What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-18 compared with 2025-03-21 · 320 added, 303 removed, 1077 unchanged (37% of the section changed)

24 unchanged sentences

We have audited the accompanying consolidated balance sheets of The Home Depot, Inc.

and its subsidiaries (the Company) as of February 2, 2025 and January 28, 2024, the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 2, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 2, 2025 and January 28, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended February 2, 2025, in conformity with U.S.

and its subsidiaries (the Company) as of February 1, 2026 and February 2, 2025, the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended February 1, 2026, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 1, 2026 and February 2, 2025, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended February 1, 2026, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of February 2, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 20, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of February 1, 2026, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report d ated March 18, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Fair values of customer relationships intangible assets

As discussed in Note 13 to the consolidated financial statements, on June 18, 2024, the Company acquired SRS Distribution Inc.

(SRS) in a business combination.

As a result of the transaction, the Company acquired customer relationships intangible assets associated with the generation of future income from existing customers.

The acquisition-date fair values of the customer relationships intangible assets recorded by the Company were approximately $5.4 billion.

The Company used the multi-period excess earnings method of the income approach to determine the estimated fair values of the customer relationships intangible assets.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over certain merchandise inventories

As discussed in Note 1 to the consolidated financial statements, the majority of merchandise inventories are stated at the lower of cost or market, as determined by the retail inventory method, which is based on a number of factors such as markups, markdowns, and inventory losses (or shrink).

As the inventory retail value is adjusted regularly to reflect market conditions, inventory valued using the retail method approximates the lower of cost or market.

The remaining merchandise inventories, including those within the retail operations in Canada and Mexico, distribution centers, and SRS distribution operations, are recorded at the lower of cost or net realizable value, as determined by a cost method, primarily the moving average cost and first-in, first-out methods.

The Company's merchandise inventories were $25.8 billion as of February 1, 2026.

Fiscal 2025 Form 10-K

We identified the evaluation of the acquisition-date fair values of the customer relationships intangible assets acquired in the SRS business combination as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate certain assumptions used in the valuation models, including the forecasted revenues and long-term forecasted revenue growth rates, expected customer attrition rates, and the discount rate applied.

Changes in these assumptions could have had a significant impact on the fair values of the customer relationships intangible assets.

Specialized skills and knowledge were required to assess these significant assumptions and evaluate evidence obtained.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s acquisition-date valuation process, including controls related to the development of the above assumptions.

We performed sensitivity analyses over the assumptions noted above used to determine the acquisition-date fair values of the customer relationships intangible assets to assess the impact changes in those assumptions would have on the Company’s determination of fair values.

We evaluated forecasted revenues used by the Company by comparing to certain publicly available information for comparable companies, industry reports, and historical revenues achieved.

We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the:

• long-term forecasted revenue growth rates used by comparing to certain nationwide economic trend data such as GDP, inflation, and relevant industry data

• expected customer attrition rates applied by testing management’s process to develop the attrition rate using historical revenue data

• discount rate used in the valuations by comparing the inputs to the discount rate to publicly available market data for comparable entities.

Estimation of store shrink

As discussed in Note 1 to the consolidated financial statements, the majority of the Company’s U.S.

merchandise inventories are stated at the lower of cost or market as determined by the retail inventory method, which is based on a number of factors such as markups, markdowns, and inventory losses (or shrink).

Shrink is the difference between the recorded amount of inventory and the physical inventory count.

The Company calculates shrink based on actual inventory losses identified as a result of physical inventory counts during each fiscal period and estimated inventory losses occurring between physical inventory counts.

The estimate for shrink occurring in the interim period between physical inventory counts is calculated on a store-specific basis and is primarily based on recent shrink results.

We identified the evaluation of the estimation of store shrink occurring in the period between physical inventory counts and fiscal year-end as a critical audit matter.

Evaluating the Company’s estimation of shrink at the end of the fiscal year using interim inventory loss experience in U.S.

retail stores involved auditor judgment.

We identified the sufficiency of audit evidence over merchandise inventories recorded using the retail inventory method as a critical audit matter.

Subjective auditor judgment was required to evaluate the sufficiency of audit evidence obtained primarily due to the highly automated nature of the process to record these merchandise inventories, which involves interfacing significant volumes of data across multiple information technology (IT) systems.

IT professionals with specialized skills and knowledge were required to assess the Company's IT systems used in the process to record merchandise inventories under the retail inventory method.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the process of developing the estimate of store shrink.

We evaluated the appropriateness of the Company using interim physical inventory counts to estimate inventory losses in U.S.

retail stores at the end of the fiscal year by:

• Evaluating the method and certain assumptions used;

• Testing the application of the method and certain assumptions used;

• Performing a current year trend analysis;

• Performing a sensitivity analysis over the shrink reserve estimate.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the recording of merchandise inventory recorded using the retail inventory method, including the IT systems, by:

• evaluating the design and testing the operating effectiveness of certain internal controls related to the recording of these merchandise inventories

• involving IT professionals with specialized skills and knowledge who assisted in testing the design and operating effectiveness of certain general IT and application controls used for processing and recording these merchandise inventories

• developing an expectation of certain inputs into the retail inventory method, including retail markups and markdowns, purchases at retail, and purchase discounts, and comparing them to the Company’s inputs

• selecting a sample of inventory transactions and comparing them to supporting documentation, such as vendor invoices, cash payments or vendor agreements

• performing inventory count observation procedures at a selection of locations.

We evaluated the sufficiency of audit evidence obtained by assessing the cumulative results of procedures performed, including the appropriateness of the nature and extent of such evidence.

We have served as the Company’s auditor since 1979.

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in millions, except per share data February 1,

2025 January 28,

2026 February 2,

Current assets:

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10,000 shares;

1,800 shares at February 2, 2025 and 1,796 shares at January 28, 2024;

994 shares at February 2, 2025 and 992 shares at January 28, 2024

1,802 shares at February 1, 2026 and 1,800 shares at February 2, 2025;

996 shares at February 1, 2026 and 994 shares at February 2, 2025

Paid-in capital 14,809 14,117

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Accumulated other comprehensive loss ( 652 ) ( 1,129 )

Treasury stock, at cost, 806 shares at February 2, 2025 and 804 shares at January 28, 2024

Treasury stock, at cost, 806 shares at February 1, 2026 and February 2, 2025

( 95,971 ) ( 95,971 )

26 unchanged sentences

Diluted earnings per share $ 14.23 $ 14.91 $ 15.11

Fiscal 2024 includes 53 weeks.

Fiscal 2025 and fiscal 2023 include 52 weeks.

Fiscal 2024 includes 53 weeks.

See accompanying notes to consolidated financial statements.

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Comprehensive income $ 14,633 $ 14,154 $ 15,384

Fiscal 2024 includes 53 weeks.

Fiscal 2025 and fiscal 2023 include 52 weeks.

Fiscal 2024 includes 53 weeks.

See accompanying notes to consolidated financial statements.

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$ 12,813 $ 6,640 $ 1,044

Fiscal 2024 includes 53 weeks.

Fiscal 2025 and fiscal 2023 include 52 weeks.

Fiscal 2024 includes 53 weeks.

See accompanying notes to consolidated financial statements.

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Cash Flows from Financing Activities:

Proceeds from (repayments of) short-term debt, net

316 — ( 1,035 )

Proceeds from short-term debt, net

Proceeds from long-term debt, net of discounts 2,161 10,010 1,995

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Supplemental Disclosures:

Cash paid for income taxes $ 3,653 $ 5,023 $ 5,435

Cash paid for interest, net of interest capitalized 2,405 2,199 1,809

1 unchanged sentence

Non-cash acquisition purchase consideration ( Note 13 )

Fiscal 2024 includes 53 weeks.

Fiscal 2025 and fiscal 2023 include 52 weeks.

Fiscal 2024 includes 53 weeks.

See accompanying notes to consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Home Depot, Inc., together with its subsidiaries (the “Company,” “The Home Depot,” “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 products, and facilities MRO products in stores and online.

The Home Depot, Inc., together with its subsidiaries (the “Company,” “The Home Depot,” “Home Depot,” “we,” “our” or “us”), is a home improvement retailer that sells a wide assortment of home improvement products, building materials, lawn and garden products, décor products, and facilities MRO products in stores and online.

We also provide a number of services, including home improvement installation services, and tool and equipment rental.

During the second quarter of fiscal 2024, we completed the acquisition of SRS, a leading residential specialty trade distribution company that sells roofing and complementary building products, landscape, and pool products to professional contractors.

Refer to Note 2 and Note 13 for further discussion on the acquisition, including certain impacts of the acquisition on our consolidated financial statements.

Additionally, through our subsidiary, SRS, we are a leading specialty trade distributor of roofing and building products, interior and construction products, landscape supplies, and pool supplies.

The Company's operations comprise one reportable segment, along with certain other non-reportable operating segments.

See Note 2 for further information.

Consolidation and Presentation

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Our fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31.

Fiscal 2024 includes 53 weeks, while fiscal 2023 and fiscal 2022 include 52 weeks.

Reclassifications

Effective July 28, 2024, we began separately presenting intangible assets, net, on the consolidated balance sheets, which were previously included in the other assets line item.

In addition, we began separately presenting intangible asset amortization on the statements of cash flows, which was previously included in the depreciation and amortization line item.

Prior period amounts have been reclassified to conform to the current year’s financial statement presentation.

Fiscal 2025 and fiscal 2023 include 52 weeks, while fiscal 2024 includes 53 weeks.

Use of Estimates

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in millions February 1,

2025 January 28,

2026 February 2,

Card receivables $ 1,021 $ 1,019

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Rebate receivables represent amounts due from vendors for volume and co-op advertising rebates.

Customer receivables relate to credit extended directly to certain customers in the ordinary course of business, which increased compared to the beginning of the year primarily as a result of the SRS acquisition.

Customer receivables relate to credit extended directly to certain customers in the ordinary course of business.

The valuation allowance related to these receivables was not material to our consolidated financial statements at the end of fiscal 2025 or fiscal 2024.

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Inventory cost includes the amount we pay to acquire inventory, including freight and import costs, as well as operating costs and depreciation associated with our sourcing and distribution network, and is net of certain vendor allowances.

The majority of our merchandise inventories are stated at the lower of cost or market, as determined by the retail inventory method, which is based on a number of factors such as markups, markdowns, and inventory losses (or shrink).

T he majority of our merchandise inventories are stated at the lower of cost or market, as determined by the retail inventory method, which is based on a number of factors such as markups, markdowns, and inventory losses (or shrink).

As the inventory retail value is adjusted regularly to reflect market conditions, inventory valued using the retail method approximates the lower of cost or market.

Our remaining merchandise inventories, including those within our retail operations in Canada and Mexico, distribution centers, and SRS, are recorded at the lower of cost or net realizable value, as determined by a cost method, primarily the first-in, first-out method.

Our remaining merchandise inventories, including those within our retail operations in Canada and Mexico, distribution centers, and our SRS distribution operations, are recorded at the lower of cost or net realizable value, as determined by a cost method, primarily th e moving average cost and first-in, first-out methods.

We evaluate the inventory valued using a cost method at the end of each quarter to ensure that it is carried at the lower of cost or net realizable value, and the adjustments recorded to merchandise inventories valued under a cost method were not material to our consolidated financial statements at the end of fiscal 2025 or fiscal 2024.

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The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual store level.

Long-lived assets with indicators of impairment are evaluated for recoverability by comparing their undiscounted future cash flows with their carrying value.

If the carrying value is greater than the undiscounted future cash flows, we then measure the asset group’s fair value to determine whether an impairment loss should be recognized.

If the resulting fair value is less than the carrying value, an impairment loss is recognized for the difference between the carrying value and the estimated fair value.

Long-lived assets with indicators of impairment are evaluated for recoverability by comparing their undiscounted future cash flows with their carrying amount.

If the carrying amount is greater than the undiscounted future cash flows, we then measure the asset group’s fair value to determine whether an impairment loss should be recognized.

If the resulting fair value is less than the carrying amount, an impairment loss is recognized for the difference between the carrying amount and the estimated fair value.

Impairment losses on property and equipment are generally recorded as a component of SG&A.

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We assess whether an arrangement is or contains a lease at inception of the contract.

Our leases include certain retail locations, warehouse and distribution space, office space, equipment, and vehicles.

Our leases include certain retail locations, warehouse and distribution space, branches, office space, equipment, and vehicles.

A substantial majority of our leases have remaining lease terms of one to 20 years.

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The discount rate used to calculate the present value of lease payments is the rate implicit in the lease, when readily determinable.

As the rate implicit in the lease is rarely readily determinable, we use a secured incremental borrowing rate, which is updated on a quarterly basis, as the discount rate for the present value of lease payments.

As the rate implicit in the lease is rarely readily determinable, we use a secured incremental borrowing rate, which is updated on a quarterly basis, as the discount rate to calculate the present value of lease payments.

Real estate taxes, insurance, maintenance, and operating expenses applicable to the leased asset are generally our obligations under our lease agreements.

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Short-term leases are not included on the consolidated balance sheets and are expensed on a straight-line basis over the lease term.

We have also elected to not separate lease and non-lease components for certain classes of assets including real estate and certain equipment.

We have also elected not to separate lease and non-lease components for certain classes of assets including real estate and certain equipment.

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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Goodwill represents the excess of purchase price over the fair value of net assets acquired.

We do not amortize goodwill, but assess the recoverability of goodwill in the third quarter of each fiscal year, or more often if indicators warrant, by determining whether the fair value of each reporting unit supports its carrying value.

Each fiscal year, we may assess qualitative factors to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount as a basis for determining whether it is necessary to complete quantitative impairment assessments, with a quantitative assessment completed periodically or as facts and circumstances warrant.

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Our current payment terms with a majority of our participating suppliers generally range from 30 to 60 days, which we deem to be commercially reasonable.

Our outstanding payment obligations under our supplier finance program are recorded within accounts payable on the consolidated balance sheets.

The associated payments are included in operating activities within the consolidated statements of cash flows.

Our outstanding payment obligations under our supplier finance program are recorded within accounts payable on our consolidated balance sheets.

The associated payments are included in operating activities within our consolidated statements of cash flows.

The following table presents the changes in our outstanding obligations under our supplier finance program:

3 unchanged sentences

Confirmed invoices paid during the year

( 4,578 ) ( 5,056 )

Confirmed obligations outstanding at the end of the year

We record any premiums or discounts associated with an issuance of long-term debt as a direct addition or deduction to the carrying value of the related senior notes.

We also record debt issuance costs associated with an issuance of long-term debt as a direct deduction to the carrying value of the related senior notes.

We record any premiums or discounts associated with an issuance of long-term debt as a direct addition or deduction to the carrying amount of the related senior notes.

We also record debt issuance costs associated with an issuance of long-term debt as a direct deduction to the carrying amount of the related senior notes.

Premium, discount, and debt issuance costs are amortized over the term of the respective notes using the effective interest rate method.

9 unchanged sentences

Fiscal 2025 Form 10-K

Cash flows from the settlement of derivative instruments appear in the consolidated statements of cash flows in the same categories as the cash flows of the hedged item.

Cash flows from the settlement of derivative instruments appear in our consolidated statements of cash flows in the same categories as the cash flows of the hedged item.

Self-Insurance Reserves

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We also maintain cybersecurity and privacy liability insurance coverage to help limit our exposure to losses such as those that may be caused by a significant compromise or breach of our data security, as well as property loss coverage.

Our self-insurance liabilities, which are included in accrued salaries and related expenses, other accrued expenses, and other long-term liabilities in the consolidated balance sheets, were $ 1.5 billion at February 2, 2025, and $ 1.4 billion at January 28, 2024.

Our self-insurance liabilities, which are included in accrued salaries and related expenses, other accrued expenses, and other long-term liabilities in the consolidated balance sheets, were $ 1.6 billion at February 1, 2026, and $ 1.5 billion at February 2, 2025.

Treasury Stock

4 unchanged sentences

We recognize revenue, net of expected returns and sales tax, at the time the customer takes possession of merchandise or when a service is performed.

Our liability for sales returns is estimated based on historical return levels and our expectation of future returns.

We recognize a liability for sales returns, which is estimated based on historical return levels and our expectation of future returns.

We also recognize a return asset, and corresponding adjustment to cost of sales, for our right to recover the goods returned by the customer, measured at the former carrying amount of the goods, less any expected recovery cost.

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

As of February 2, 2025 and January 28, 2024, deferred revenue for products and services was $ 1.5 billion and $ 1.7 billion, respectively.

As of both February 1, 2026 and February 2, 2025, deferred revenue for products and services was $ 1.5 billion.

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 February 2, 2025 and January 28, 2024, our performance obligations for unredeemed gift cards were $ 1.1 billion.

As of both February 1, 2026 and February 2, 2025, our performance obligations for unredeemed gift cards were $ 1.1 billion.

Gift card breakage income, which is our estimate of the portion of our outstanding gift card balance not expected to be redeemed, is recognized in net sales and was immaterial in fiscal 2025, fiscal 2024, and fiscal 2023.

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Selling, General and Administrative

Selling, general and administrative expenses include compensation and benefits for retail and store support center associates, occupancy and operating costs of retail locations and store support centers, insurance-related expenses, advertising costs, credit and debit card processing fees, and other administrative costs.

Selling, general and administrative expenses generally include compensation and benefits for retail and support center associates, occupancy and operating costs of retail locations and support centers, insurance-related expenses, advertising costs, credit and debit card processing fees, and other administrative costs.

Advertising Expense

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Stock-Based Compensation

We are currently authorized to issue incentive and nonqualified stock options, restricted stock, restricted stock units, performance shares, performance units, stock appreciation rights, and deferred shares to certain of our associates and non-employee directors under certain stock incentive plans.

We measure and recognize compensation expense for all stock-based payment awards made to associates and non-employee directors based on estimated fair values.

We are currently authorized to issue equity awards including incentive and nonqualified stock options, restricted stock, restricted stock units, performance shares, performance units, stock appreciation rights, and deferred shares to certain of our associates and non-employee directors under certain stock incentive plans.

We measure and recognize compensation expense for all stock-based payment awards granted to associates and non-employee directors based on estimated fair values.

The value of the portion of the award that is ultimately expected to vest is recognized as stock-based compensation expense, on a straight-line basis, over the requisite service period or as restrictions lapse.

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Comprehensive income includes net earnings adjusted for certain gains and losses that are excluded from net earnings and recognized within accumulated other comprehensive loss as a component of equity, which consists primarily of foreign currency translation adjustments.

Accumulated other comprehensive loss also includes net losses on cash flow hedges that were immaterial as of February 2, 2025 and January 28, 2024.

Accumulated other comprehensive loss also includes net losses on cash flow hedges that were immaterial as of February 1, 2026 and February 2, 2025.

Reclassifications from accumulated other comprehensive loss into earnings were immaterial in fiscal 2025, fiscal 2024, and fiscal 2023.

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Revenues and expenses are translated using average exchange rates for the period, and equity transactions are translated using the actual rate on the day of the transaction.

Cumulative foreign currency translation adjustments recorded in accumulated other comprehensive loss as of February 2, 2025 and January 28, 2024 were losses of $ 970 million and $ 365 million, respectively.

Cumulative foreign currency translation adjustments recorded in accumulated other comprehensive loss as of February 1, 2026 and February 2, 2025 were losses of $ 501 million and $ 970 million, respectively.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The disclosure requirements included in ASU No.

2023-07 are required for all public entities, including entities with a single reportable segment.

2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.

The guidance is required to be applied on a retrospective basis .

We adopted ASU No.

2023-07 in the fourth quarter of fiscal 2024.

The adoption of this guidance resulted in additional financial statement disclosures and had no impact to our consolidated financial condition, results of operations, or cash flows.

See Note 2 which includes the disclosures resulting from our adoption of this guidance.

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 of such programs, along with an annual rollforward of the related obligations, including the amount of obligations confirmed and the amounts paid during the period.

2022-04 was effective for fiscal years beginning after December 15, 2022, except for the required rollforward information, which was effective for fiscal years beginning after December 15, 2023.

We adopted ASU No.

2022-04 in the first quarter of fiscal 2023, with the exception of the annual rollforward requirement, which was adopted on a prospective basis in the fourth quarter of fiscal 2024.

The adoption of this guidance did not have an impact on our consolidated financial condition, results of operations, or cash flows.

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

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The guidance is required to be applied on a prospective basis, with the option to apply the standard retrospectively.

We adopted ASU No.

2023-09 on a retrospective basis in the fourth quarter of fiscal 2025.

The adoption of this guidance resulted in additional financial statement disclosures and had no impact to our consolidated financial condition, results of operations, or cash flows.

See Note 6 , which includes the disclosures resulting from our adoption of this guidance.

Accounting Pronouncements Not Yet Adopted

In September 2025, the FASB issued ASU No.

2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software,” which is intended to modernize internal-use software guidance by removing all references to project stages and by clarifying the thresholds entities apply to begin capitalizing costs.

2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods.

Early adoption is permitted.

We are currently evaluating the impact of the standard on our consolidated financial statement disclosures.

Fiscal 2024 Form 10-K

The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis.

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

In November 2024, the FASB issued ASU No.

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Recent accounting pronouncements adopted or pending adoption not discussed above are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.

Fiscal 2025 Form 10-K

SEGMENT REPORTING AND NET SALES

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Primary Segment.

We are engaged in the operation of retail stores and sell a wide assortment of building materials, home improvement products, lawn and garden products, décor products, and facilities MRO products both in stores and online.

We are engaged in retail operations and sell a wide assortment of home improvement products, building materials, lawn and garden products, décor products, and facilities MRO products both in stores and online.

We also provide a number of services, including home improvement installation services, and tool and equipment rental.

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For disclosure purposes, we aggregate these three geographic operating segments into one reportable segment (the “Primary segment”) due to the similar nature of their operations and economic characteristics.

As discussed in Note 13 , in June 2024, we acquired SRS, a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor through its branches located throughout the U.S.

SRS is organized as three different lines of business:

roofing and complementary building products, landscape, and pool.

We have determined that each of these three lines of business represents an operating segment, none of which meets the thresholds prescribed under Topic 280 to be deemed a reportable segment.

Therefore, results from our SRS operating segments are presented in “Other” beginning from the acquisition date of June 18, 2024.

On September 4, 2025, SRS completed the acquisition of GMS, a leading distributor of specialty building products, including drywall, ceilings, steel framing and other complementary construction products, through branches located across the U.S.

GMS became an additional vertical within SRS referred to as interior and construction products, and SRS is now organized as four different lines of business:

roofing and building products, interior and construction products, landscape, and pool.

We have determined that each of these four lines of business represents an operating segment, none of which meets the thresholds prescribed under Accounting Standards Codification Topic 280:

“Segment Reporting” to be deemed a reportable segment.

Therefore, results from these operating segments are presented in “Other.”

Segment Information.

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99,717 101,194 101,709

51,914 50,960 52,778

Operating expenses:

Selling, general and administrative 28,885 27,822 26,598

27,822 26,598 26,284

Depreciation and amortization 2,790 2,779 2,673

2,779 2,673 2,455

Total operating expenses

30,601 29,271 28,739

Primary segment operating income

Operating income

$ 20,574 $ 21,313 $ 21,689

Fiscal 2024 Form 10-K

The following table presents a reconciliation of certain Primary segment information to our consolidated totals:

in millions Primary Segment Other Consolidated

The following table presents a reconciliation of certain segment information to our consolidated totals:

Fiscal 2025 Fiscal 2024

in millions Primary

Consolidated Primary

$ 151,966 $ 12,717 $ 164,683 $ 153,108 $ 6,406 $ 159,514

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Interest income and other, net

( 124 ) ( 201 )

Interest expense

Earnings before provision for income taxes

$ 18,602 $ 19,406

Depreciation and amortization (2)

$ 3,344 $ 715 $ 4,059 $ 3,350 $ 358 $ 3,708

(1) Net sales presented in Other relate to the sale of products within our SRS non-reportable operating segments, following our acquisition of SRS in the second quarter of fiscal 2024 and the subsequent acquisition of GMS in the third quarter of fiscal 2025.

Operating income presented in Other includes cost of sales and operating expenses totaling $ 12.4 billion and $ 6.2 billion for fiscal 2025 and fiscal 2024, respectively, within these SRS non-reportable operating segments.

Fiscal 2025 Form 10-K

(2) Includes depreciation and finance lease amortization in cost of sales.

Also includes intangible asset amortization expense of $ 207 million in our Primary segment and $ 218 million in Other.

Net sales presented in Other relate to the sale of products by SRS, with roofing and related products accounting for approximately 68 % of sales in Other during fiscal 2024.

Prior to the SRS acquisition, our total Company consolidated results represented our Primary segment.

Therefore, a reconciliation to our consolidated totals is not applicable for fiscal 2023 or fiscal 2022.

Also includes intangible asset amortization expense of $ 209 million and $ 207 million for fiscal 2025 and fiscal 2024, respectively, in our Primary segment, and intangible asset amortization expense of $ 398 million and $ 218 million for fiscal 2025 and fiscal 2024, respectively, in Other.

Prior to the SRS acquisition in fiscal 2024, our total Company consolidated results represented our Primary segment.

Therefore, a reconciliation to our consolidated totals is not applicable for fiscal 2023.

The following table presents net property and equipment, classified by geography:

in millions February 1,

2025 January 28,

2026 February 2,

2025 January 28,

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Hardlines Hardware, Indoor Garden, Outdoor Garden, Power, and Storage & Organization

During the first quarter of fiscal 2024, we made certain changes to our merchandising department structure that realigned certain merchandising departments across our three major product lines within our Primary segment.

As a result, prior-year amounts in each of the tables below have been reclassified to conform with the current-year presentation.

As noted in our Quarterly Report on Form 10-Q for the first quarter of fiscal 2025, we made changes that realigned certain product categories across our major product lines and merchandising departments within our Primary segment.

As a result, prior-year amounts in each of the respective tables below have been reclassified to conform with the current-year presentation.

These changes had no impact on consolidated net sales.

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12,717 6,406 —

$ 164,683 $ 159,514 $ 152,669

Roofing and related products accounted for approximately 53 % and 68 % of Other net sales for fiscal 2025 and fiscal 2024, respectively.

Fiscal 2025 Form 10-K

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Certain percentages may not sum to totals due to rounding.

See additional discussion above for information on the components of Other net sales.

(1) See above for further discussion of net sales presented in Other.

The following table presents net sales, classified by geography:

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in millions February 1,

2025 January 28,

2026 February 2,

Land $ 9,499 $ 9,060

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Depreciation and finance lease amortization expense $ 3,452 $ 3,283 $ 3,020

The following table presents the consolidated balance sheet classification related to operating and finance leases:

The following table presents certain consolidated balance sheet information related to operating and finance leases:

in millions Consolidated Balance Sheet Classification February 1,

2025 January 28,

2026 February 2,

Operating lease assets Operating lease right-of-use assets $ 9,204 $ 8,592

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Total lease liabilities $ 12,541 $ 11,928

(1) Finance lease assets are recorded net of accumulated amortization of $ 1.4 billion as of February 2, 2025 and $ 1.2 billion as of January 28, 2024.

(1) Finance lease assets are recorded net of accumulated amortization of $ 1.6 billion as of February 1, 2026 and $ 1.4 billion as of February 2, 2025.

Fiscal 2025 Form 10-K

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The following table presents weighted average remaining lease terms and discount rates:

2025 January 28,

2026 February 2,

Weighted Average Remaining Lease Term (Years):

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The following table presents the changes in the carrying amount of our goodwill:

in millions Primary Segment

in millions Primary

Goodwill, balance at January 28, 2024

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Acquisitions (1)

Goodwill, balance at January 28, 2024

23 11,025 11,048

Acquisitions (1)

( 28 ) — ( 28 )

Goodwill, balance at February 2, 2025

8,450 11,025 19,475

Acquisitions (1)

86 2,757 2,843

Goodwill, balance at February 1, 2026

(1) Activity includes the preliminary determination of goodwill related to acquisitions completed during the fiscal year.

Amounts presented in the Other column represent goodwill related to the SRS acquisition completed in the second quarter of fiscal 2024, as well as other immaterial acquisitions completed by SRS during the second half of fiscal 2024.

See Note 13 for further details.

$ 8,564 $ 13,780 $ 22,344

(1) Activity in fiscal 2024 includes the preliminary determination of goodwill related to the SRS acquisition and other immaterial acquisitions completed during that fiscal year.

Activity in fiscal 2025 includes the preliminary determination of goodwill related to the GMS acquisition and other immaterial acquisitions completed during that fiscal year.

See Note 13 for details regarding the SRS and GMS acquisitions.

(2) Primarily reflects the net impact of foreign currency translation as well as immaterial measurement period adjustments related to acquisitions completed in the prior fiscal year.

(3) Amounts presented in the Other column represent goodwill activity within our SRS non-reportable operating segments.

During the third quarter of fiscal 2025, we completed our annual assessment of the recoverability of goodwill for our U.S., Canada, and Mexico reporting units that reside within our Primary segment.

As the results of our most recent quantitative analysis in fiscal 2023 indicated that the fair value of each reporting unit substantially exceeded its respective carrying value, we performed a qualitative assessment to determine if there were any indicators of impairment.

Based on this assessment, we concluded that while there have been events and circumstances that have both positively and negatively impacted our reporting units, no single factor or combination of factors is an indicator that it is more likely than not that the fair value of any of these reporting units was less than its carrying amount.

Additionally, following the completion of the SRS acquisition, we now have three new reporting units which align with our SRS operating segments:

roofing and complementary building products, landscape, and pool.

As a result of the recency of the acquisition to our annual assessment date, these reporting units were also analyzed for impairment during the third quarter of fiscal 2024 using a qualitative approach.

Based on this analysis, we concluded that there were no events or circumstances that would indicate that it is more likely than not that the fair value of any of these reporting units was less than its carrying amount.

As the results of our most recent quantitative analysis in fiscal 2023 indicated that the fair value of each reporting unit substantially exceeded its respective carrying amount, we performed a qualitative assessment to determine if there were any indicators of impairment.

Based on this assessment, we concluded that while there have been events and circumstances that have both positively and negatively impacted the fair values of our reporting units, no single factor or combination of factors is an indicator that it is more likely than not that the fair value of any of these reporting units was less than its carrying amount.

During the third quarter of fiscal 2025, we also completed our annual assessment of our SRS roofing and building products, landscape, and pool reporting units using a quantitative approach.

The quantitative test for goodwill impairment was performed by determining the fair value of each reporting unit using a combination of discounted cash flow and market-based approaches.

The results of our quantitative analysis indicated that the fair value of each reporting unit exceeded its respective carrying amount, including goodwill.

Additionally, due to the proximity of the GMS acquisition date to our annual impairment assessment date, we concluded that there were no events or circumstances that would indicate that it is more likely than not that the fair value of the goodwill recognized in the acquisition was less than its carrying amount.

There were also no impairment charges related to goodwill in fiscal 2024 or fiscal 2023.

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The following table presents information regarding our intangible assets:

February 2, 2025 (1)

January 28, 2024

February 1, 2026 February 2, 2025

in millions Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

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$ 12,056 $ ( 1,727 ) $ 10,329 $ 10,115 $ ( 1,132 ) $ 8,983

(1) Includes the allocation of fair value to intangible assets related to the SRS acquisition, as well as other immaterial acquisitions completed during fiscal 2024.

See Note 13 for further details.

Our intangible asset amortization expense was $ 425 million, $ 186 million and $ 179 million for fiscal 2024, fiscal 2023, and fiscal 2022, respectively.

Fiscal 2025 Form 10-K

Our intangible asset amortization expense was $ 607 million, $ 425 million, and $ 186 million for fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

The following table presents the estimated future amortization expense related to definite-lived intangible assets as of February 1, 2026:

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Total $ 9,680

During the third quarter of fiscal 2024, we completed our annual assessment of the recoverability of our indefinite-lived intangible assets using a quantitative analysis and concluded no impairment losses should be recognized.

During the third quarter of fiscal 2025, we completed our annual assessment of the recoverability of our indefinite-lived intangible assets based on quantitative factors and concluded that no impairment losses should be recognized.

There were no impairment charges related to any of our definite or indefinite-lived intangible assets in fiscal 2025, fiscal 2024, or fiscal 2023.

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Short-Term Debt

At the beginning of fiscal 2024, we had a commercial paper program that allowed for an aggregate of $ 5.0 billion in borrowings.

In connection with this program, we had back-up credit facilities with a consortium of banks for an aggregate of $ 5.0 billion in borrowings, which consisted of 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 2024.

At January 28, 2024, there were no outstanding borrowings under our commercial paper program or back-up credit facilities.

In May 2024, we increased our commercial paper program from $ 5.0 billion to $ 19.5 billion in connection with the anticipated financing of the acquisition of SRS (see Note 13 for details regarding the SRS acquisition).

In May 2024, in connection with the increase in the commercial paper program, we entered into three additional back-up credit facilities that consisted of a 364 -day $ 3.5 billion credit facility scheduled to expire in May 2025, a three-year $ 1.0 billion credit facility scheduled to expire in May 2027, and a 364 -day $ 10.0 billion credit facility scheduled to expire in May 2025.

The $ 10.0 billion credit facility also provided that the commitments and any borrowings under that facility would be reduced by the amount of net cash proceeds we received from any future debt issuance.

In June 2024, leading up to the acquisition of SRS on June 18, 2024, we raised commercial paper borrowings of over $ 15.0 billion to fund the transaction.

On June 25, 2024, we received the proceeds from the issuance of $ 10.0 billion of long-term debt, as further discussed below, and immediately used the proceeds to repay approximately $ 10.0 billion of these commercial paper borrowings.

On June 27, 2024, we terminated the $ 10.0 billion back-up credit facility, and subsequently reduced our commercial paper program from $ 19.5 billion to $ 9.5 billion.

In July 2024, we completed the renewal of our 364 -day $ 1.5 billion credit facility, extending the maturity from July 2024 to July 2025.

In December 2024, we reduced our total credit facilities and concurrently reduced our commercial paper program, each by $ 2.5 billion.

This reduction included terminating the three-year $ 1.0 billion back-up credit facility that was scheduled to expire in May 2027 and reducing the aggregate commitments under the 364 -day back-up credit facility that is scheduled to expire in May 2025 from $ 3.5 billion to $ 2.0 billion.

As of February 2, 2025, our commercial paper program allowed for an aggregate of $ 7.0 billion in borrowings and is supported by $ 7.0 billion of back-up credit facilities.

All of our short-term borrowings in fiscal 2024 and fiscal 2023 were under our commercial paper program.

At the beginning of fiscal 2025, we had a commercial paper program that allowed for an aggregate of $ 7.0 billion in borrowings, and was supported by $ 7.0 billion of back-up credit facilities.

These back-up credit facilities consisted of a five-year $ 3.5 billion credit facility scheduled to expire in July 2027, a 364 -day $ 2.0 billion credit facility scheduled to expire in May 2025, and a 364 -day $ 1.5 billion credit facility scheduled to expire in July 2025.

In May 2025, we terminated all three back-up credit facility agreements and simultaneously entered into a new five-year $ 3.5 billion credit facility scheduled to expire in May 2030 and a new 364 -day $ 3.5 billion credit facility scheduled to expire in May 2026.

In July 2025, we increased our commercial paper program by $ 4.0 billion in connection with the anticipated financing of the GMS acquisition (see Note 13 ).

In July 2025, in connection with the increase in the commercial paper program, we also entered into a new three-year $ 3.0 billion back-up credit facility scheduled to expire in July 2028, and a new 364 -day $ 1.0 billion back-up credit facility scheduled to expire in July 2026, as well as amended and restated our existing 364 -day $ 3.5 billion credit facility to extend the maturity from May 2026 to July 2026.

In the aggregate, as of February 1, 2026, our commercial paper program allows for borrowings up to $ 11.0 billion and is supported by $ 11.0 billion of back-up credit facilities.

During fiscal 2025, all of our short-term borrowings were under our commercial paper program, and the maximum amount outstanding during that period was $ 5.8 billion.

At February 1, 2026, we had $ 4.5 billion of outstanding borrowings under our commercial paper program with a weighted average interest rate of 3.7 % and no outstanding borrowings under back-up credit facilities.

At February 2, 2025, we had $ 316 million of outstanding borrowings under our commercial paper program with a weighted-average interest rate of 4.4 % and no outstanding borrowings under back-up credit facilities.

The following table presents information on borrowings under our commercial paper program during fiscal 2024 and fiscal 2023:

Fiscal Fiscal

in millions 2024 2023

Maximum amount outstanding during the period $ 15,317 $ 1,453

Average daily short-term borrowings 1,343 72

Fiscal 2025 Form 10-K

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Amount February 1,

2025 January 28,

3.75 % Senior notes due February 2024

Semi-annually $ — $ — $ 1,100

2026 February 2,

2.70 % Senior notes due April 2025

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Semi-annually 1,000 997 995

3.75 % Senior notes due September 2028

Semi-annually 500 498 —

3.90 % Senior notes due December 2028

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Semi-annually 1,500 1,401 1,359

3.95 % Senior notes due September 2030

Semi-annually 500 496 —

1.375 % Senior notes due March 2031

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Semi-annually 1,750 1,727 1,725

4.65 % Senior notes due September 2035

Semi-annually 1,000 993 —

5.875 % Senior notes due December 2036

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Finance lease obligations;

payable in varying installments through January 31, 2055 3,021 3,268

payable in varying installments through July 31, 2075

Other long-term debt

4 unchanged sentences

Fiscal 2025 Form 10-K

June 2024 Issuance.

In June 2024, we issued nine tranches of senior notes.

• The first tranche consisted of $ 600 million of floating rate senior notes due December 24, 2025 (the “floating rate notes”).

The floating rate notes bear interest at a variable rate determined quarterly equal to the compounded Secured Overnight Financing Rate (“SOFR”) plus 33 basis points.

Interest on the floating rate notes is due quarterly on March 24, June 24, September 24, and December 24 of each year, beginning on September 24, 2024.

• The second tranche consisted of $ 900 million of 5.10 % senior notes due December 24, 2025 (the “2025 notes”) at a discount of $ 0.8 million.

Interest on the 2025 notes is due semi-annually on June 24 and December 24 of each year, beginning on December 24, 2024.

• The third tranche consisted of $ 1.5 billion of 5.15 % senior notes due June 25, 2026 (the “2026 notes”) at a discount of $ 1.7 million.

Interest on the 2026 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The fourth tranche consisted of $ 1.0 billion of 4.875 % senior notes due June 25, 2027 (the “2027 notes”) at a discount of $ 3.3 million.

Interest on the 2027 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The fifth tranche consisted of $ 1.25 billion of 4.75 % senior notes due June 25, 2029 (the “2029 notes”) at a discount of $ 8.1 million.

Interest on the 2029 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The sixth tranche consisted of $ 1.0 billion of 4.85 % senior notes due June 25, 2031 (the “2031 notes”) at a discount of $ 7.1 million.

Interest on the 2031 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The seventh tranche consisted of $ 1.75 billion of 4.95 % senior notes due June 25, 2034 (the “2034 notes”) at a discount of $ 16.7 million.

Interest on the 2034 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The eighth tranche consisted of $ 1.5 billion of 5.30 % senior notes due June 25, 2054 (the “2054 notes”) at a discount of $ 23.5 million.

Interest on the 2054 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The ninth tranche consisted of $ 500 million of 5.40 % senior notes due June 25, 2064 (the “2064 notes”) at a discount of $ 8.5 million.

Interest on the 2064 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• Issuance costs for the June 2024 issuance totaled $ 41 million.

Our floating rate notes are not redeemable prior to maturity.

September 2025 Senior Notes Issuance.

In September 2025, we issued three tranches of senior notes.

• The first tranche consisted of $ 500 million of 3.75 % senior notes due September 15, 2028 (the “2028 notes”) at a discount of $ 0.3 million.

Interest on the 2028 notes is due semi-annually on March 15 and September 15 of each year, beginning on March 15, 2026.

• The second tranche consisted of $ 500 million of 3.95 % senior notes due September 15, 2030 (the “2030 notes”) at a discount of $ 1.8 million.

Interest on the 2030 notes is due semi-annually on March 15 and September 15 of each year, beginning on March 15, 2026.

• The third tranche consisted of $ 1.0 billion of 4.65 % senior notes due September 15, 2035 (the “2035 notes”) at a discount of $ 3.1 million.

Interest on the 2035 notes is due semi-annually on March 15 and September 15 of each year, beginning on March 15, 2026.

• Issuance costs for the September 2025 issuance totaled $ 10 million.

Senior Notes Redemption.

All of our fixed rate notes may be redeemed by us at any time, in whole or in part, at the redemption price plus accrued and unpaid interest up to the redemption date.

With respect to the 5.125 % 2025 notes, 5.10 % 2025 notes, 5.15 % 2026 notes and 5.875 % 2036 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 on the notes that would be due after the related redemption date.

With respect to all other fixed rate notes, prior to the relevant Par Call Date, as defined in the respective 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.

With respect to the 5.15 % 2026 notes and 5.875 % 2036 notes, the redemption price is equal to the greater of (1) 100 % of the principal amount of the notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes that would be due after the related redemption date.

With respect to all other fixed rate notes, prior to the relevant Par Call Date, as defined in the respective notes, the redemption price is equal to the greater of (1) 100 % of the principal amount of the notes to be redeemed and (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 relevant Par Call Date, the redemption price is equal to 100 % of the principal amount of such 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 offer payment, in cash, for those notes equal to 101 % of the aggregate principal amount of such notes plus accrued and unpaid interest up to the date of purchase.

Additionally, if a Change in Control Triggering Event occurs, as defined in the applicable notes, holders of such applicable notes have the right to require us to offer payment, in cash, for those notes equal to 101 % of the aggregate principal amount of such notes plus accrued and unpaid interest up to the date of purchase.

The indentures governing our senior notes do 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 indentures governing our notes contain various customary covenants;

however, none of the covenants are expected to impact our liquidity or capital resources.

In February 2024, we repaid our $ 1.1 billion 3.75 % senior notes at maturity.

Fiscal 2024 Form 10-K

The indentures governing these notes contain various covenants, none of which are expected to impact our liquidity or capital resources.

Senior Notes Repayments .

In December 2025, we repaid our $ 900 million 5.10 % senior notes and $ 600 million floating rate senior notes at maturity.

In September 2025, we repaid our $ 1.0 billion 3.35 % and $ 750 million 4.00 % senior notes at maturity.

In April 2025, we repaid our $ 500 million 2.70 % and $ 500 million 5.125 % senior notes at maturity.

Maturities of Long-Term Debt.

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Our objective in managing these exposures is to decrease the volatility of cash flows affected by changes in the underlying rates and minimize the risk of changes in the fair value of our senior notes.

Fiscal 2025 Form 10-K

Fair Value Hedges.

We had outstanding interest rate swap agreements with combined notional amounts of $ 5.4 billion at both February 2, 2025 and January 28, 2024.

We had outstanding interest rate swap agreements with combined notional amounts of $ 5.4 billion at both February 1, 2026 and February 2, 2025.

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 February 2, 2025 and January 28, 2024, the fair values of these agreements totaled $ 795 million and $ 858 million, respectively, all of which are recognized in other long-term liabilities on our consolidated balance sheets.

At February 1, 2026 and February 2, 2025, the fair values of these agreements totaled $ 558 million and $ 795 million, respectively, all of which are recognized in other long-term liabilities on our consolidated balance sheets.

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.

At February 1, 2026 and February 2, 2025, the carrying amount of long-term debt, excluding current installments, subject to fair value hedges was $ 14.6 billion and $ 14.3 billion, respectively.

Cash Flow Hedges.

At February 2, 2025 and January 28, 2024, we had outstanding foreign currency forward contracts accounted for as cash flow hedges, which hedge the variability of forecasted cash flows associated with certain payments made in our foreign operations.

At February 2, 2025 and January 28, 2024, the notional amounts and the fair values of these contracts were not material.

At February 1, 2026 and February 2, 2025, we had outstanding foreign currency forward contracts accounted for as cash flow hedges, which hedge the variability of forecasted cash flows associated with certain payments made in our foreign operations.

At February 1, 2026 and February 2, 2025, the notional amounts and the fair values of these contracts were not material.

Additionally, the realized and unrealized gains and losses on these instruments were not material during fiscal 2025, fiscal 2024, and fiscal 2023.

From time to time, we also use treasury locks or forward-starting interest rate swap agreements to hedge the variability in future interest payments attributable to changing interest rates on forecasted debt issuances.

There were no such instruments outstanding as of February 2, 2025 or January 28, 2024.

There were no such instruments outstanding as of February 1, 2026 or February 2, 2025.

All previously settled arrangements were designated as cash flow hedges and thus, the corresponding losses were initially recognized in accumulated other comprehensive loss and are being amortized to interest expense over the life of the respective notes.

Unamortized losses remaining in accumulated other comprehensive loss were immaterial as of February 2, 2025 and January 28, 2024, as were the losses recognized within interest expense for fiscal 2024, fiscal 2023, and fiscal 2022.

Unamortized losses remaining in accumulated other comprehensive loss were immaterial as of February 1, 2026 and February 2, 2025, as were the losses recognized within interest expense for fiscal 2025, fiscal 2024, and fiscal 2023.

We expect an immaterial amount of losses related to cash flow hedges recorded in accumulated other comprehensive loss as of February 1, 2026 to be reclassified into earnings within the next 12 months.

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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 $ 668 million and $ 714 million as of February 2, 2025 and January 28, 2024, respectively, which was recorded in other current assets on our consolidated balance sheets.

We did not hold any cash collateral as of February 2, 2025 or January 28, 2024.

Fiscal 2024 Form 10-K

Provision for Income Taxes

The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $ 459 million and $ 668 million as of February 1, 2026 and February 2, 2025, respectively, which was recorded in other current assets on our consolidated balance sheets.

We did not hold any cash collateral from counterparties as of February 1, 2026 or February 2, 2025.

Provision for Income Taxes and Income Taxes Paid

The following table presents our earnings before the provision for income taxes:

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Total $ 18,602 $ 19,406 $ 19,924

Fiscal 2025 Form 10-K

The following table presents our provision for income taxes:

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Provision for income taxes:

The following table presents our combined federal, state, and foreign effective tax rates:

Federal 3,315 3,350 3,536

State 771 861 894

Foreign 360 389 351

$ 4,446 $ 4,600 $ 4,781

The following table presents the reconciliation of our provision for income taxes at the federal statutory rate of 21 % to the actual tax expense as well as our effective tax rate:

Fiscal Fiscal Fiscal

in millions 2025 2024 2023

Amount Percent Amount Percent

federal statutory income tax rate

$ 3,906 21.0 % $ 4,075 21.0 % $ 4,184 21.0 %

Combined federal, state, and foreign effective tax rates 23.7 % 24.0 % 23.9 %

The following table presents the reconciliation of our provision for income taxes at the federal statutory rate of 21 % to the actual tax expense:

in millions Fiscal Fiscal Fiscal

State and local income taxes, net of federal income tax effect (1)

663 3.6 701 3.6 698 3.5

Income taxes at federal statutory rate $ 4,075 $ 4,184 $ 4,720

State income taxes, net of federal income tax benefit 680 706 743

Other, net ( 155 ) ( 109 ) ( 91 )

Foreign tax effects

190 1.0 164 0.8 133 0.7

( 142 ) ( 0.8 ) ( 150 ) ( 0.8 ) ( 142 ) ( 0.7 )

Other adjustments (2)

( 171 ) ( 0.9 ) ( 190 ) ( 1.0 ) ( 92 ) ( 0.5 )

Total $ 4,446 23.9 % $ 4,600 23.7 % $ 4,781 24.0 %

Certain percentages may not sum to totals due to rounding.

(1) State taxes in California, Illinois, Massachusetts, New Jersey and New York made up the majority (greater than 50 percent) of the tax effect in this category.

(2) Includes immaterial activities in nontaxable or nondeductible items, cross-border tax laws, and changes in unrecognized tax benefits.

The Company had no activity in changes in federal tax laws or rates enacted in the current period or changes in federal valuation allowances.

The following table presents income taxes paid:

in millions Fiscal Fiscal Fiscal

2025 2024 2023

$ 3,590 $ 2,475 $ 3,737

Domestic state and local:

Domestic state and local subtotal

Total income taxes paid

$ 4,848 $ 3,653 $ 5,023

* The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

Fiscal 2025 Form 10-K

On July 4, 2025, the OBBBA was signed into law in the U.S., which contains a broad range of tax provisions, including the allowance to expense 100% of the cost of qualified property and immediate expensing of domestic research and experimental expenditures.

The provisions of the OBBBA did not have a material impact to our fiscal 2025 effective tax rate.

We have realized a reduction in our fiscal 2025 cash tax payments due to the above mentioned provisions.

In fiscal 2024, the IRS provided automatic income tax relief to taxpayers in certain southeastern states, extending the timeline to make certain tax payments.

As a result, our fourth quarter fiscal 2024 estimated federal tax payment was deferred and paid in the first quarter of fiscal 2025.

Deferred Taxes

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in millions February 1,

2025 January 28,

2026 February 2,

Deferred compensation $ 289 $ 230

1 unchanged sentence

State income taxes 118 133

Merchandise inventories — 110

Non-deductible reserves 450 475

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Property and equipment ( 1,514 ) ( 854 )

Goodwill and other intangibles (1)

Intangible assets and goodwill

( 2,438 ) ( 2,200 )

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Net deferred tax liabilities $ ( 2,553 ) $ ( 1,693 )

(1) Increase year over year primarily results from the difference in book and tax basis related to identifiable intangible assets from the SRS acquisition (See Note 13 ).

The following table presents our noncurrent deferred tax assets and noncurrent deferred tax liabilities, netted by tax jurisdiction, as presented on the consolidated balance sheets:

The following table presents our deferred tax assets and deferred tax liabilities, netted by tax jurisdiction, as presented on the consolidated balance sheets:

in millions Consolidated Balance Sheet Classification February 1,

2025 January 28,

2026 February 2,

Deferred tax assets Other assets $ 292 $ 269

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Net deferred tax liabilities $ ( 2,553 ) $ ( 1,693 )

As of February 2, 2025, we recorded immaterial amounts for deferred tax assets for net operating losses as well as tax credits, primarily related to state jurisdictions.

These losses and credits expire at various dates beginning in 2025 and 2026, respectively.

As of February 1, 2026, we recorded immaterial amounts of deferred tax assets for net operating losses as well as tax credits, primarily related to state jurisdictions.

These losses and credits expire at various dates beginning in fiscal 2026.

We have concluded that it is more likely than not that tax benefits related to substantially all net operating losses and tax credits will be realized based upon the expectation that we will generate the necessary taxable income in future periods.

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Therefore, the tax effects of repatriation for applicable state taxes and foreign withholding taxes of such cash earnings have been provided for in the accompanying consolidated statements of earnings.

We have the intent and ability to reinvest substantially all of the $ 5.1 billion of non-cash unremitted earnings of our non-U.S.

We have the intent and ability to reinvest substantially all non-cash unremitted earnings of our non-U.S.

subsidiaries indefinitely.

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federal, state and local, and foreign tax authorities.

The Company remains subject to income tax examination for fiscal years 2015 through 2023.

The IRS is currently examining our U.S.

The Company remains subject to U.S.

federal income tax examination for fiscal years 2015 through 2024, with the IRS currently examining our U.S.

federal income tax returns for fiscal years 2016 through 2021.

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We do not expect the results from any ongoing income tax audit to have a material impact on our consolidated financial condition, results of operations, or cash flows.

Over the next twelve months, it is reasonably possible that the resolution of federal and state tax examinations, as well as the expiration of statutes of limitations, could reduce our unrecognized tax benefits by a n immaterial amount.

We do not anticipate the resolution of these matters will result in a material change to our consolidated financial condition, results of operations, or cash flows.

Unrecognized Tax Benefits

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Unrecognized tax benefits balance at end of fiscal year $ 559 $ 627 $ 689

Unrecognized tax benefits that if recognized would affect our annual effective income tax rate on net earnings were $ 509 million, $ 568 million, and $ 537 million at February 2, 2025, January 28, 2024, and January 29, 2023, respectively.

Unrecognized tax benefits that, if recognized, would affect our annual effective income tax rate were $ 464 million, $ 509 million, and $ 568 million at February 1, 2026, February 2, 2025, and January 28, 2024, respectively.

Interest and Penalties

Interest and penalties associated with uncertain tax positions recognized in the consolidated statements of earnings were immaterial in fiscal 2025, fiscal 2024, and fiscal 2023.

Our total accrued interest and penalties associated with uncertain tax positions were immaterial as of February 2, 2025 and January 28, 2024.

In fiscal 2024, the IRS provided automatic income tax relief to taxpayers in certain southeastern states, extending the timeline to make certain tax payments.

As a result, our fourth quarter fiscal 2024 estimated federal tax payment has been deferred to the first quarter of fiscal 2025, which reduced our cash paid for income taxes during fiscal 2024 and increased income taxes payable at February 2, 2025.

Our total accrued interest and penalties associated with uncertain tax positions were immaterial as of February 1, 2026 and February 2, 2025.

Fiscal 2025 Form 10-K

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As of February 1, 2026, approximately $ 11.7 billion of the $ 15.0 billion share repurchase authorization remained available.

In March 2024, we paused share repurchases in anticipation of the SRS acquisition (see Note 13 for details regarding the SRS acquisition).

In March 2024, we paused share repurchases and have not resumed repurchase activity as of February 1, 2026.

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

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

February 2, 2025 January 28, 2024

in millions Fair Value (Level 2) Fair Value (Level 2)

February 1, 2026 February 2, 2025

in millions Fair Value

Derivative agreements – assets

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We did not have any material assets or liabilities that were measured and recognized at fair value on a nonrecurring basis during fiscal 2025, fiscal 2024, or fiscal 2023.

See Note 13 for discussion on the fair values of assets acquired and liabilities assumed from business combinations.

See Note 13 for discussion on the fair values of assets acquired and liabilities assumed in the SRS and GMS acquisitions.

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:

February 2, 2025 January 28, 2024

The carrying amounts of cash and cash equivalents, receivables, accounts payable, short-term debt, and other long-term debt approximate fair value.

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

February 1, 2026 February 2, 2025

(Level 1) Carrying

Value Fair Value

(Level 1) Carrying

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STOCK-BASED COMPENSATION

Omnibus Stock Incentive Plans

Omnibus Stock Incentive Plan

The Home Depot, Inc.

Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022 (the “Omnibus Plan”) and The Home Depot, Inc.

1997 Omnibus Stock Incentive Plan (the “1997 Plan” and collectively with the Omnibus Plan, the “Plans”) provide that incentive and nonqualified stock options, restricted stock, restricted stock units, performance shares, performance units, deferred shares, stock appreciation rights, and other stock-based awards may be issued to certain of our associates and non-employee directors.

Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022 (the “Omnibus Plan”) provides that incentive and nonqualified stock options, restricted stock, restricted stock units, performance shares, performance units, deferred shares, stock appreciation rights, and other stock-based awards may be issued to certain of our associates and non-employee directors.

Under th e Omnibus Plan, the maximum number of shares of our common stock authorized for issuance is 80 million shares plus a number of shares (not to exceed 10 million) related to underlying awards outstanding as of May 19, 2022, which can be returned to the share pool if those awards are subsequently terminated or expire unexercised, or are cancelled, forfeited or lapse for any reason, with any award other than a stock option or stock appreciation right reducing the number of shares available for issuance by 2.11 shares.

At February 1, 2026, there were approximately 67 million shares available for future grants under the Omnibus Plan.

No additional equity awards could be issued from the 1997 Plan after May 26, 2005.

The following table presents total stock-based compensation expense, net of estimated forfeitures, including expense related to our ESPPs, and related income tax benefit:

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After-tax stock-based compensation expense $ 416 $ 352 $ 303

At February 2, 2025, there was $ 687 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted-average period of three years .

At February 1, 2026, there was $ 755 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted average period of approximately three years .

Fiscal 2025 Form 10-K

The award types issued under the Plans are as follows:

The award types issued under the Omnibus Plan are as follows:

Stock Options.

Under the terms of the Plans, incentive stock options and nonqualified stock options must have an exercise price at or above the fair market value of our stock on the date of the grant.

Under the terms of the Omnibus Plan, incentive stock options and nonqualified stock options must have an exercise price at or above the fair market value of our stock on the date of the grant.

Typically, nonqualified stock options vest at the rate of 25 % per year commencing on the second anniversary date of the grant and expire on the tenth anniversary date of the grant.

Additionally, a majority of our stock options may become non-forfeitable upon the associate reaching age 60 , provided the associate has had five years of continuous service.

There are no incentive stock options outstanding under the Plans.

These awards become non-forfeitable upon the associate reaching age 60 , provided the associate has had at least five years of continuous service.

There are no incentive stock options outstanding under the Omnibus Plan.

We estimate the fair value of stock option awards on the date of grant using the Black-Scholes option-pricing model.

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Restricted Stock Awards.

Restrictions on the restricted stock issued under the Plans generally lapse over various periods up to five years .

Restrictions on the restricted stock issued under the Omnibus Plan generally lapse over various periods up to five years .

At the grant date of the award, recipients of restricted stock are granted voting rights and generally receive dividends on unvested shares, paid in the form of cash on each dividend payment date.

Dividends paid on unvested shares were immaterial for fiscal 2025, fiscal 2024, and fiscal 2023.

Additionally, the majority of our restricted stock awards may become non-forfeitable upon the associate’s attainment of age 60 , provided the associate has had five years of continuous service.

Additionally, the majority of our restricted stock awards may become non-forfeitable upon the associate reaching age 60 , provided the associate has had at least five years of continuous service.

The fair value of restricted stock is based on the closing stock price on the date of grant and is expensed over the period during which the restrictions lapse.

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Each restricted stock unit entitles the associate to one share of common stock to be received upon vesting up to five years after the grant date.

Additionally, the majority of these awards may become non-forfeitable upon the associate reaching age 60 , provided the associate has had five years of continuous service.

Additionally, the majority of these awards may become non-forfeitable upon the associate reaching age 60 , provided the associate has had at least five years of continuous service.

Recipients of restricted stock units have no voting rights until the vesting of the award.

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Nonvested at end of year 3,115 350.21

(1) Includes replacement restricted stock awards with service-based vesting conditions issued in connection with the SRS acquisition (see Note 1 3 ).

The following table presents the total fair value of restricted stock and restricted stock units vested:

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Performance Share Awards.

We also grant performance share awards under the Plans.

We also grant performance share awards under the Omnibus Plan.

Recipients of performance share awards have no voting rights until the shares are issued following completion of the performance period.

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Certain of these performance share awards provide for the issuance of shares of our common stock at the end of a three-year performance cycle based upon our performance against target average ROIC and operating profit over that performance cycle.

These awards become non-forfeitable upon the associate’s attainment of age 60 , provided the associate has had five years of continuous service and minimum performance targets are achieved.

These awards become non-forfeitable upon the associate reaching age 60 , provided the associate has had at least five years of continuous service and minimum performance targets are achieved.

The fair value of these performance share awards is based on the closing stock price on the date of grant.

Separately, in relation to the SRS acquisition, we also granted performance share awards to various SRS employees.

Separately, in connection with, as well as subsequent to, the SRS acquisition, we also granted performance share awards to various SRS employees.

These awards provide for the issuance of shares of our common stock at the end of a five-year performance period.

A portion of these awards are subject to the achievement of SRS EBITDA and sales targets, and a portion of these awards are subject to market conditions based on our stock price performance.

A portion of these awards are subject to the achievement of SRS earnings before interest, taxes, depreciation and amortization (“EBITDA”) and sales targets, and a portion of these awards are subject to market conditions based on our stock price performance.

The fair value of the portion of the awards subject to the achievement of EBITDA and sales targets were valued based on the closing stock price on the grant date.

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The following table presents the per share weighted average fair value and the assumptions used in the Monte Carlo simulation for the market-based awards:

Fiscal Fiscal

Per share weighted average fair value $ 120.50 $ 125.92

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Expected volatility

24.2 % 25.4 %

Dividend yield

4 years 5 years

The risk-free interest rate is based on the U.S.

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Nonvested at end of year 1,443 300.43

(1) Includes performance share awards issued in relation to the SRS acquisition.

The following table presents the total fair value of performance shares vested:

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Deferred Shares.

We grant awards of deferred shares to non-employee directors under the Plans.

We grant awards of deferred shares to non-employee directors under the Omnibus Plan.

Each deferred share entitles the non-employee director to one share of common stock to be received following termination of Board service.

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The fair value of the deferred shares is based on the closing stock price on the date of grant and is expensed immediately upon grant.

The following table presents deferred shares granted to non-employee directors:

shares in thousands

Fiscal Fiscal Fiscal

2024 2023 2022

Deferred shares granted to non-employee directors 15 19 19

Deferred shares granted to non-employee directors were immaterial during fiscal 2025, fiscal 2024, and fiscal 2023.

Employee Stock Purchase Plans

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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.

GMS Acquisition

On June 29, 2025, we entered into a definitive agreement to acquire GMS, a leading distributor of specialty building products including drywall, ceilings, steel framing and other complementary construction products, through branches located across the U.S.

Under the terms of the merger agreement, we, through a wholly owned subsidiary, made a cash tender offer to purchase all outstanding shares of GMS common stock for $ 110 per share.

All conditions of the offer were satisfied, including receipt of the requisite regulatory approvals, and the merger was completed on September 4, 2025.

As a result of the merger, GMS became a direct subsidiary of SRS and an indirect, wholly owned subsidiary of the Company.

We believe the GMS acquisition will enhance SRS's position as a leading multi-category building materials distributor, bringing differentiated capabilities, product categories and customer relationships that are highly complementary to SRS's existing business.

Cash consideration remitted by the Company for the purchase of all outstanding shares of GMS common stock totaled approximately $ 4.3 billion, and we also repaid approximately $ 1.2 billion of certain GMS outstanding debt concurrent with the completion of the merger.

The merger consideration and repayment of GMS debt was funded through a combination of cash on hand and approximately $ 2.0 billion of borrowings under our commercial paper program, which were refinanced with the issuance of $ 2.0 billion of long-term debt in September 2025 (see Note 5 ).

Fiscal 2025 Form 10-K

The acquisition was accounted for in accordance with Accounting Standards Codification Topic 805:

“Business Combinations” and GMS’s results of operations have been consolidated in the Company’s financial statements effective September 4, 2025.

Acquisition-related costs were expensed as incurred and were not material.

Fair Value of Consideration Transferred.

The following table summarizes total purchase consideration:

Cash consideration for outstanding shares

Repayment of GMS outstanding debt (1)

Total purchase consideration

(1) Represents the repayment of certain GMS long-term debt which was required to be repaid upon a change in control.

As further discussed below, an additional $ 354 million of GMS long-term debt was also repaid upon completion of the merger and has been reflected as an assumed liability upon consummation of the transaction.

Allocation of Consideration Transferred.

We recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of September 4, 2025.

The following table summarizes our preliminary purchase price allocation, including resulting goodwill:

in millions Preliminary Fair Value

Cash and cash equivalents

Merchandise inventories

Property and equipment

Intangible assets

Other current and non-current assets

Total assets acquired

Accounts payable

Other current liabilities

Senior notes (1)

Deferred income taxes (2)

Other long-term liabilities

Total liabilities assumed

Net assets acquired

(1) Represents GMS senior notes that were redeemed by the Company upon completion of the merger.

As the repayment was made at the discretion of the Company, the senior notes are reflected as an assumed liability upon consummation of the transaction with the corresponding long-term debt repayment presented within financing activities on our consolidated statement of cash flows.

(2) Primarily resulting from the difference in book and tax basis related to identifiable intangible assets.

The preliminary fair values of identifiable intangible assets were determined by using certain estimates and assumptions that are not observable in the market.

The Company used the multi-period excess earnings method to value the customer relationships intangible assets.

The significant assumptions used to estimate the fair value of customer relationships included forecasted revenues, customer attrition rates, and the discount rate.

Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets will have different useful lives.

The preliminary fair value and estimated useful lives of identifiable intangible assets are as follows:

in millions Weighted Average Useful Life (Years)

Preliminary Fair Value

Customer relationships

Total identifiable intangible assets

Fiscal 2025 Form 10-K

The goodwill arising from the acquisition is calculated as the excess of the purchase price over the net assets acquired and is attributable to anticipated (i) growth acceleration in the residential and commercial Pro market;

(ii) expanded capabilities and product categories;

(iii) additional addressable market opportunities;

(iv) enhanced delivery network capabilities;

and (v) growth in sales force.

We expect approximately $ 214 million of goodwill related to the acquisition to be deductible for U.S.

federal and state income tax purposes.

As the valuation is preliminary, we have not yet finalized the assignment of goodwill to our reporting units, and no goodwill related to the GMS acquisition currently resides in our Primary segment.

We have completed preliminary valuation analyses necessary to assess the fair values of the assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date.

These fair values were based on management’s estimates and assumptions;

however, the amounts indicated above are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date.

Accordingly, there may be adjustments to the assigned values of acquired assets and liabilities.

The primary areas that remain preliminary include, but are not limited to, intangible assets, including the preliminary assumptions used in their estimates of fair values and their respective estimated useful lives, the valuation of certain tangible assets, income taxes, and residual goodwill.

The final determination of the fair values, related income tax impacts, and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP.

Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.

Measurement period adjustments recognized during fiscal 2025 were immaterial.

Results of Operations.

Net sales attributable to GMS since the completion of the acquisition and included within our results of operations for fiscal 2025 totaled $ 2.0 billion.

Net earnings attributable to GMS since the completion of the acquisition and included within our results of operations for fiscal 2025 were immaterial.

Pro forma results of operations are not presented as the effect of the acquisition was not material to our financial results.

SRS Acquisition

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as the surviving entity and a wholly owned subsidiary of the Company.

We believe the acquisition of SRS will accelerate the Company’s growth with the Pro.

The acquisition is expected to establish the Company as a leading specialty trade distributor across multiple verticals, complement our existing capabilities, and enable us to better serve complex project purchase occasions with the renovator/remodeler.

The acquisition was completed to accelerate the Company’s growth with Pros, including establishing the Company as a leading specialty trade distributor across multiple verticals, complementing our existing capabilities, and enabling us to better serve complex project purchase occasions with the renovator/remodeler.

We primarily used a combination of proceeds from commercial paper borrowings, the issuance of long-term debt, as well as cash on hand to fund the acquisition.

See Note 5 for further information on the financing for the transaction, and below for a summary of purchase consideration.

Fiscal 2024 Form 10-K

The acquisition was accounted for in accordance with Accounting Standards Codification Topic 805 “Business Combinations,” and SRS’s results of operations have been consolidated in the Company’s financial statements effective June 18, 2024.

In fiscal 2024, we recorded a preliminary allocation of the purchase price to the assets acquired and liabilities assumed based on their estimated acquisition date fair values.

Measurement period adjustments recognized in fiscal 2025 were immaterial, and we finalized our purchase price allocation during the first quarter of fiscal 2025.

Acquisition-related costs were expensed as incurred and were not material.

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Total purchase consideration

Fiscal 2025 Form 10-K

(1) In connection with the acquisition, certain members of SRS’s management team concurrently reinvested a portion of their respective after-tax merger consideration proceeds into shares of the Company’s common stock.

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Allocation of Consideration Transferred.

We recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of June 18, 2024.

The following table summarizes our preliminary purchase price allocation, including resulting goodwill:

in millions Preliminary Fair Value

The following table summarizes our purchase price allocation, including resulting goodwill:

in millions Fair Value

Cash and cash equivalents

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Total identifiable intangible assets

Fiscal 2024 Form 10-K

The goodwill arising from the acquisition is attributable to anticipated (i) growth acceleration in the Pro market;

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federal and state income tax purposes.

At this time, all preliminary goodwill has been allocated to our three SRS reporting units and no goodwill currently resides in our Primary segment.

We have completed valuation analyses necessary to assess the fair values of the assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date.

These fair values were based on management’s estimates and assumptions;

Accordingly, there may be adjustments to the assigned values of acquired assets and liabilities assumed.

Areas that remain preliminary primarily relate to income taxes, as well as any changes to residual goodwill resulting from measurement period adjustments.

The final determination of acquisition date fair values and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP.

Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.

Measurement period adjustments recognized during fiscal 2024 were immaterial.

The goodwill has been allocated to our SRS roofing and building products, landscape, and pool reporting units and no goodwill related to the SRS acquisition resides in our Primary segment.

Results of Operations.

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Net earnings attributable to SRS since the completion of the acquisition and included within our results of operations for fiscal 2024 were immaterial.

Pro forma results of operations would not be materially different as a result of the acquisition and therefore are not presented.

Other Fiscal 2024 Acquisitions

All other acquisitions completed during fiscal 2024 were immaterial both individually and in the aggregate.

Fiscal 2023 Acquisitions

During fiscal 2023, we completed three individually immaterial acquisitions for total aggregate cash purchase consideration of $ 1.5 billion.

We recognized aggregate definite-lived intangible assets of $ 469 million with a weighted average amortization period of 17 years, primarily related to customer relationships, and goodwill of $ 1.0 billion.

The goodwill arising from the acquisitions resides in our Primary segment and is primarily attributable to operational synergies and acceleration of growth strategy, as well as the assembled workforce.

The portion of goodwill generated through these acquisitions that is expected to be deductible for U.S.

federal and state tax purposes is not material.

Measurement period adjustments recognized during fiscal 2024 were immaterial and our purchase price allocations are now finalized.

Net sales and net earnings for fiscal 2023 attributable to these acquisitions in the aggregate after their respective acquisition dates were immaterial.

Pro forma results of operations would not be materially different as a result of the acquisitions in the aggregate and therefore are not presented.

Fiscal 2025 Form 10-K

Pro forma results of operations are not presented as the effect of the acquisition was not material to our financial results.

Other Acquisitions

All other acquisitions completed during fiscal 2025 and fiscal 2024 were immaterial both individually and in the aggregate.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

Fiscal 2024 Form 10-K

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-K

Item 8. Financial Statements and Supplementary Data