Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,Washington, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 29, 20172023
-or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR -15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file numberFile Number: 1-8207
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THE HOME DEPOT, INC.
(Exact name of Registrantregistrant as specified in its charter)
Delaware95-3261426
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification Number)No.)
2455 Paces Ferry Road Atlanta, Georgia30339
Atlanta,Georgia30339
(Address of principal executive offices)(Zip Code)
(770) 433-8211
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.05 Par Value Per ShareHDNew York Stock Exchange
Indicate by check mark whether the Registrantregistrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x☒ No ¨☐
Indicate by check mark whether the Registrantregistrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrantregistrant was required to submit and post such files). Yes x☒ No ¨☐
Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large“large accelerated filer," "accelerated” “accelerated filer," "smaller” “smaller reporting company,"” and "emerging“emerging growth company"company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒         Accelerated filer ☐Non-accelerated filer ☐    Smaller reporting company ☐    Emerging growth company ☐
Large accelerated filer x
Accelerated filer ¨
Non-accelerated filer ¨
(Do not check if a smaller reporting company)
Smaller reporting company ¨
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrantregistrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨☐No x
APPLICABLE ONLY TO CORPORATE ISSUERS:☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
1,167,748,619995,261,844 shares of common stock, $0.05 par value, outstanding as of November 14, 2017
2023


THE HOME DEPOT, INC. AND SUBSIDIARIES

TABLE OF CONTENTS
ii
iii
Page
Financial Information1
3
Item 1.
31
CONSOLIDATED BALANCE SHEETS—
As of October 29, 2017 and January 29, 2017Consolidated Balance Sheets
31
CONSOLIDATED STATEMENTS OF EARNINGS—
Three and Nine Months Ended October 29, 2017 and October 30, 2016Consolidated Statements of Earnings
42
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME—
Three and Nine Months Ended October 29, 2017 and October 30, 2016Consolidated Statements of Comprehensive Income
53
CONSOLIDATED STATEMENTS OF CASH FLOWS—
Nine Months Ended October 29, 2017 and October 30, 2016Consolidated Statements of Stockholders' Equity
64
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSConsolidated Statements of Cash Flows
75
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMNotes to Consolidated Financial Statements
116
Note 1. Summary of Significant Accounting Policies
6
ItemNote 2. Net Sales
7
Note 3. Property and Leases
8
Note 4. Debt and Derivative Instruments
9
Note 5. Stockholders' Equity
10
Note 6. Fair Value Measurements
10
Note 7. Weighted Average Common Shares
11
Note 8. Contingencies
12
Report of Independent Registered Public Accounting Firm
13
Item 2.
1214
Item 3.
1721
Item 4.
21
Controls and Procedures21
17
Item 1.
Other Information21
18
Item 1A.
Legal Proceedings22
18
Item 1A.
2.
18
Item 2.
Unregistered Sales of Equity Securities and, Use of Proceeds, and Issuer Purchases of Equity Securities.
1822
Item 5.
22
Item 6.
23
Exhibits24
19
Signatures
20


Fiscal Q3 2023 Form 10-Qi
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COMMONLY USED OR DEFINED TERMS
TermDefinition
ASUAccounting Standards Update
Comparable sales
As defined in the Results of Operations section of MD&A
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
fiscal 2022Fiscal year ended January 29, 2023
fiscal 2023Fiscal year ending January 28, 2024
GAAPU.S. generally accepted accounting principles
MD&AManagement's Discussion and Analysis of Financial Condition and Results of Operations
NOPATNet operating profit after tax
Restoration PlansHome Depot FutureBuilder Restoration Plan and HD Supply Restoration Plan
ROICReturn on invested capital
SECSecurities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
SG&ASelling, general and administrative
2022 Form 10-KAnnual Report on Form 10-K for fiscal 2022 as filed with the SEC on March 15, 2023
Fiscal Q3 2023 Form 10-Qii
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FORWARD-LOOKING STATEMENTS
Certain statements contained herein, as well as in other filings we make with the SEC and other written and oral information we release, regarding our performance or other events or developments in the future constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the demand for our products and services; net sales growth; comparable sales; the effects of competition; our brand and reputation; implementation of store, interconnected retail, supply chain and technology initiatives; inventory and in-stock positions; the state of the economy; the state of the housing and home improvement markets; the state of the credit markets, including mortgages, home equity loans, and consumer credit; the impact of tariffs; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, potential associates, suppliers and service providers; cost and availability of labor; costs of fuel and other energy sources; international trade disputes, natural disasters, climate change, public health issues, cybersecurity events, military conflicts or acts of war, supply chain disruptions, and other business interruptions that could compromise data privacy or disrupt operation of our stores, distribution centers and other facilities, our ability to operate or access communications, financial or banking systems, or supply or delivery of, or demand for, our products or services; our ability to address expectations regarding environmental, social and governance matters and meet related goals; continuation or suspension of share repurchases; net earnings performance; earnings per share; future dividends; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; changes in interest rates; changes in foreign currency exchange rates; commodity or other price inflation and deflation; our ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation, including compliance with related settlements; the challenges of international operations; the adequacy of insurance coverage; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of legal and regulatory changes, including changes to tax laws and regulations; store openings and closures; financial outlook; and the impact of acquired companies on our organization and the ability to recognize the anticipated benefits of any acquisitions.
Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our historical experience and our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part II, Item 1A, Risk Factors and elsewhere in this report and also as may be described from time to time in future reports we file with the SEC. You should read such information in conjunction with our consolidated financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations in this report. There also may be other factors that we cannot anticipate or that are not described herein, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations. Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our filings with the SEC and in our other public statements.

Fiscal Q3 2023 Form 10-Qiii
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PART I.I – FINANCIAL INFORMATION
Item 1.Financial Statements.
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
in millions, except per share dataOctober 29,
2023		January 29,
2023
Assets
Current assets:
Cash and cash equivalents$2,058 $2,757 
Receivables, net3,932 3,317 
Merchandise inventories22,805 24,886 
Other current assets1,887 1,511 
Total current assets30,682 32,471 
Net property and equipment25,735 25,631 
Operating lease right-of-use assets7,071 6,941 
Goodwill7,937 7,444 
Other assets4,152 3,958 
Total assets$75,577 $76,445 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$11,478 $11,443 
Accrued salaries and related expenses2,034 1,991 
Sales taxes payable590 528 
Deferred revenue2,784 3,064 
Income taxes payable304 50 
Current installments of long-term debt1,362 1,231 
Current operating lease liabilities1,026 945 
Other accrued expenses3,994 3,858 
Total current liabilities23,572 23,110 
Long-term debt, excluding current installments40,567 41,962 
Long-term operating lease liabilities6,300 6,226 
Deferred income taxes753 1,019 
Other long-term liabilities2,955 2,566 
Total liabilities74,147 74,883 
Contingencies (Note 8)
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,796 shares at October 29, 2023 and 1,794 shares at January 29, 2023; outstanding: 996 shares at October 29, 2023 and 1,016 shares at January 29, 202390 90 
Paid-in capital12,927 12,592 
Retained earnings82,934 76,896 
Accumulated other comprehensive loss(662)(718)
Treasury stock, at cost, 800 shares at October 29, 2023 and 778 shares at January 29, 2023(93,859)(87,298)
Total stockholders’ equity1,430 1,562 
Total liabilities and stockholders’ equity$75,577 $76,445 
amounts in millions, except per share dataOctober 29,
2017		 January 29,
2017
ASSETS   
Current Assets:   
Cash and Cash Equivalents$3,549
 $2,538
Receivables, net2,166
 2,029
Merchandise Inventories13,419
 12,549
Other Current Assets548
 608
Total Current Assets19,682
 17,724
Property and Equipment, at cost41,614
 40,426
Less Accumulated Depreciation and Amortization19,654
 18,512
Net Property and Equipment21,960
 21,914
Goodwill2,217
 2,093
Other Assets1,164
 1,235
Total Assets$45,023
 $42,966
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current Liabilities:   
Short-Term Debt$125
 $710
Accounts Payable8,570
 7,000
Accrued Salaries and Related Expenses1,488
 1,484
Sales Taxes Payable629
 508
Deferred Revenue1,788
 1,669
Income Taxes Payable139
 25
Current Installments of Long-Term Debt1,198
 542
Other Accrued Expenses2,065
 2,195
Total Current Liabilities16,002
 14,133
Long-Term Debt, excluding current installments24,266
 22,349
Other Long-Term Liabilities1,968
 1,855
Deferred Income Taxes244
 296
Total Liabilities42,480
 38,633

   
Common Stock, par value $0.05; authorized: 10,000 shares; issued: 1,779 shares at October 29, 2017 and 1,776 shares at January 29, 2017; outstanding: 1,168 shares at October 29, 2017 and 1,203 shares at January 29, 201789
 88
Paid-In Capital9,883
 9,787
Retained Earnings39,193
 35,519
Accumulated Other Comprehensive Loss(629) (867)
Treasury Stock, at cost, 611 shares at October 29, 2017 and 573 shares at January 29, 2017(45,993) (40,194)
Total Stockholders’ Equity2,543
 4,333
Total Liabilities and Stockholders’ Equity$45,023
 $42,966
—————
See accompanying Notesnotes to Consolidated Financial Statements.consolidated financial statements.


Fiscal Q3 2023 Form 10-Q1
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
 Three Months EndedNine Months Ended
in millions, except per share dataOctober 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Net sales$37,710 $38,872 $117,883 $121,572 
Cost of sales24,972 25,648 78,431 80,720 
Gross profit12,738 13,224 39,452 40,852 
Operating expenses:
Selling, general and administrative6,649 6,468 19,919 19,735 
Depreciation and amortization683 608 1,987 1,830 
Total operating expenses7,332 7,076 21,906 21,565 
Operating income5,406 6,148 17,546 19,287 
Interest and other (income) expense:
Interest income and other, net(49)(7)(123)(12)
Interest expense487 413 1,430 1,166 
Interest and other, net438 406 1,307 1,154 
Earnings before provision for income taxes4,968 5,742 16,239 18,133 
Provision for income taxes1,158 1,403 3,897 4,390 
Net earnings$3,810 $4,339 $12,342 $13,743 
Basic weighted average common shares996 1,020 1,002 1,024 
Basic earnings per share$3.83 $4.25 $12.32 $13.42 
Diluted weighted average common shares999 1,023 1,005 1,028 
Diluted earnings per share$3.81 $4.24 $12.28 $13.37 
 Three Months Ended Nine Months Ended
amounts in millions, except per share dataOctober 29,
2017		 October 30,
2016		 October 29,
2017		 October 30,
2016
NET SALES$25,026
 $23,154
 $77,021
 $72,388
Cost of Sales16,378
 15,112
 50,758
 47,628
GROSS PROFIT8,648
 8,042
 26,263
 24,760
        
Operating Expenses:       
Selling, General and Administrative4,514
 4,280
 13,424
 12,949
Depreciation and Amortization454
 442
 1,347
 1,311
Total Operating Expenses4,968
 4,722
 14,771
 14,260
        
OPERATING INCOME3,680
 3,320
 11,492
 10,500
        
Interest and Other (Income) Expense:       
Interest and Investment Income(22) (10) (51) (25)
Interest Expense269
 246
 788
 726
Interest and Other, net247
 236
 737
 701
        
EARNINGS BEFORE PROVISION FOR
INCOME TAXES
3,433
 3,084
 10,755
 9,799
Provision for Income Taxes1,268
 1,115
 3,904
 3,586
NET EARNINGS$2,165
 $1,969
 $6,851
 $6,213
        
Basic Weighted Average Common Shares1,168
 1,224
 1,184
 1,236
BASIC EARNINGS PER SHARE$1.85
 $1.61
 $5.79
 $5.03
        
Diluted Weighted Average Common Shares1,174
 1,229
 1,190
 1,242
DILUTED EARNINGS PER SHARE$1.84
 $1.60
 $5.76
 $5.00
        
Dividends Declared per Share$0.89
 $0.69
 $2.67
 $2.07
—————
See accompanying Notesnotes to Consolidated Financial Statements.consolidated financial statements.



Fiscal Q3 2023 Form 10-Q2
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 Three Months EndedNine Months Ended
in millionsOctober 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Net earnings$3,810 $4,339 $12,342 $13,743 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments(196)(187)51 (158)
Cash flow hedges1 3 5 6 
Total other comprehensive income (loss), net of tax(195)(184)56 (152)
Comprehensive income$3,615 $4,155 $12,398 $13,591 
 Three Months Ended Nine Months Ended
amounts in millionsOctober 29,
2017		 October 30,
2016		 October 29,
2017		 October 30,
2016
NET EARNINGS$2,165
 $1,969
 $6,851
 $6,213
Other Comprehensive Income (Loss):       
Foreign Currency Translation Adjustments(145) (125) 244
 (8)
Cash Flow Hedges, net of tax(2) 21
 (5) 23
Other—
 (1) (1) —
Total Other Comprehensive Income (Loss)(147) (105) 238
 15
COMPREHENSIVE INCOME$2,018
 $1,864
 $7,089
 $6,228
—————
See accompanying Notesnotes to Consolidated Financial Statements.consolidated financial statements.



Fiscal Q3 2023 Form 10-Q3
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Three Months EndedNine Months Ended
in millionsOctober 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Common Stock:
Balance at beginning of period$90 $90 $90 $90 
Shares issued under employee stock plans, net— — — — 
Balance at end of period90 90 90 90 
Paid-in Capital:
Balance at beginning of period12,842 12,309 12,592 12,132 
Shares issued under employee stock plans, net11 (2)46 (21)
Stock-based compensation expense74 78 289 274 
Balance at end of period12,927 12,385 12,927 12,385 
Retained Earnings:
Balance at beginning of period81,213 73,074 76,896 67,580 
Net earnings3,810 4,339 12,342 13,743 
Cash dividends(2,089)(1,946)(6,304)(5,856)
Balance at end of period82,934 75,467 82,934 75,467 
Accumulated Other Comprehensive Income (Loss):
Balance at beginning of period(467)(672)(718)(704)
Foreign currency translation adjustments, net of tax(196)(187)51 (158)
Cash flow hedges, net of tax1 3 5 6 
Balance at end of period(662)(856)(662)(856)
Treasury Stock:
Balance at beginning of period(92,343)(84,564)(87,298)(80,794)
Repurchases of common stock(1,516)(1,224)(6,561)(4,994)
Balance at end of period(93,859)(85,788)(93,859)(85,788)
Total stockholders' equity$1,430 $1,298 $1,430 $1,298 
—————
See accompanying notes to consolidated financial statements.



Fiscal Q3 2023 Form 10-Q4
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THE HOME DEPOT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Nine Months Ended
in millionsOctober 29,
2023		October 30,
2022
Cash Flows from Operating Activities:
Net earnings$12,342 $13,743 
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization2,415 2,216 
Stock-based compensation expense300 286 
Changes in receivables, net(538)(312)
Changes in merchandise inventories2,131 (3,748)
Changes in other current assets(365)(568)
Changes in accounts payable and accrued expenses187 (1,568)
Changes in deferred revenue(276)(413)
Changes in income taxes payable252 30 
Changes in deferred income taxes(310)129 
Other operating activities301 226 
Net cash provided by operating activities16,439 10,021 
Cash Flows from Investing Activities:
Capital expenditures(2,368)(2,216)
Payments for businesses acquired, net(795)— 
Other investing activities15 (29)
Net cash used in investing activities(3,148)(2,245)
Cash Flows from Financing Activities:
Repayments of short-term debt, net— (1,035)
Proceeds from long-term debt, net of discounts— 6,942 
Repayments of long-term debt(1,200)(2,423)
Repurchases of common stock(6,465)(5,136)
Proceeds from sales of common stock192 146 
Cash dividends(6,304)(5,856)
Other financing activities(146)(185)
Net cash used in financing activities(13,923)(7,547)
Change in cash and cash equivalents(632)229 
Effect of exchange rate changes on cash and cash equivalents(67)(110)
Cash and cash equivalents at beginning of period2,757 2,343 
Cash and cash equivalents at end of period$2,058 $2,462 
Supplemental Disclosures:
Cash paid for interest, net of interest capitalized$1,504 $1,160 
Cash paid for income taxes3,817 4,173 
 Nine Months Ended
amounts in millionsOctober 29,
2017		 October 30,
2016
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net Earnings$6,851
 $6,213
Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:   
Depreciation and Amortization1,533
 1,474
Stock-Based Compensation Expense214
 199
Changes in Assets and Liabilities, net of acquisition effects:   
Receivables, net(95) (108)
Merchandise Inventories(776) (1,453)
Other Current Assets75
 36
Accounts Payable and Accrued Expenses1,597
 1,449
Deferred Revenue115
 64
Income Taxes Payable113
 184
Deferred Income Taxes(76) (131)
Other, net190
 (8)
Net Cash Provided by Operating Activities9,741
 7,919
    
CASH FLOWS FROM INVESTING ACTIVITIES:   
Capital Expenditures(1,354) (1,145)
Payments for Business Acquired, net(260) —
Proceeds from Sales of Property and Equipment38
 30
Net Cash Used in Investing Activities(1,576) (1,115)
    
CASH FLOWS FROM FINANCING ACTIVITIES:   
Repayments of Short-Term Debt, net(585) (350)
Proceeds from Long-Term Debt, net of discounts2,991
 4,959
Repayments of Long-Term Debt(534) (3,034)
Repurchases of Common Stock(6,067) (4,535)
Proceeds from Sales of Common Stock157
 136
Cash Dividends Paid to Stockholders(3,174) (2,567)
Other Financing Activities(41) (33)
Net Cash Used in Financing Activities(7,253) (5,424)
    
Change in Cash and Cash Equivalents912
 1,380
Effect of Exchange Rate Changes on Cash and Cash Equivalents99
 (7)
Cash and Cash Equivalents at Beginning of Period2,538
 2,216
Cash and Cash Equivalents at End of Period$3,549
 $3,589
—————
See accompanying Notesnotes to Consolidated Financial Statements.


consolidated financial statements.
6
Fiscal Q3 2023 Form 10-Q5
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THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business
The Home Depot, Inc., together with its subsidiaries (the “Company,” “Home Depot,” “we,” “our” or “us”), is a home improvement retailer that sells a wide assortment of building materials, home improvement products, lawn and garden products, décor items, and facilities maintenance, repair and operations products, in stores and online. We also provide a number of services, including home improvement installation services and tool equipment rental. We operate in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each representing one of our three operating segments, which we aggregate into one reportable segment due to the similar nature of their operations and economic characteristics.
1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Consolidated Financial Statementsconsolidated financial statements of The Home Depot, Inc. and Subsidiaries (the "Company")the Company have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP")GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the Consolidated Financial Statementsconsolidated financial statements and notes thereto included in the Company's Annual Report onour 2022 Form 10-K for the year ended January 29, 2017, as filed with the Securities and Exchange Commission on March 23, 2017 (the "2016 Form 10-K").
Valuation Reserves
As of October 29, 2017 and January 29, 2017, the valuation allowances for Merchandise Inventories and uncollectible Receivables were not material.
Recent Accounting Pronouncements10-K.
There have beenwere no materialsignificant changes to the Company’s position regarding recentour significant accounting pronouncements pending adoptionpolicies as disclosed in the 20162022 Form 10-K, except as set forth below.10-K.
In August 2017, the FinancialRecently Adopted Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities" which amends the hedge accounting recognition and presentation requirements. Pronouncements
ASU No. 2017-12 eliminates2022-04. In September 2022, the concept of recognizing periodic hedge ineffectiveness for cash flow and net investment hedges and allows the entity to apply the shortcut method to partial-term fair value hedges of interest rate risk.FASB issued ASU No. 2017-122022-04, “Liabilities—Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations,” to enhance the transparency of supplier finance programs used by an entity in connection with the purchase of goods and services. The standard requires entities that use supplier finance programs to disclose the key terms, including a description of payment terms, the confirmed amount outstanding under the program at the end of each reporting period, a description of where those obligations are presented on the balance sheet, and an annual rollforward, including the amount of obligations confirmed and the amount paid during the period. The guidance does not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs. ASU No. 2022-04 is effective for fiscal years beginning after December 15, 2018, and2022, including interim periods within those fiscal years, with early adoption permitted in any interim period after issuance of this update. The Company is evaluatingexcept for the effect that ASU No. 2017-12 will have on its Consolidated Financial Statements and related disclosures.
In May 2014, the FASB issued a new standard related to revenue recognition. Under ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)", revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). ASU No. 2014-09required rollforward information, which is effective for annual reporting periodsfiscal years beginning after December 15, 2017, including interim periods within those annual periods.2023. On January 30, 2023, we adopted ASU No. 2022-04 with no impact to our consolidated financial condition, results of operations, or cash flows.
We have a supplier finance program whereby we have entered into payment processing agreements with several financial institutions. Under these agreements, the financial institutions act as our paying agents with respect to accounts payable due to certain suppliers. Participating suppliers may, at their sole discretion, elect to receive payment for one or more of our payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. We are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program, and our rights and obligations to our suppliers are not impacted. We do not reimburse suppliers for any costs they incur for participation in the program. We have not pledged any assets as security or provided any guarantees as part of the program. We have no economic interest in our suppliers’ decisions to participate in the program. Our responsibility is limited to making payment to the respective financial institution according to the terms originally negotiated with the supplier, regardless of whether the supplier elects to receive early payment from the financial institution.
The Company continuespayment terms we negotiate with our suppliers are consistent, irrespective of whether a supplier participates in the program. Our current payment terms with a majority of our suppliers generally range from 30 to evaluate60 days, which we deem to be commercially reasonable. Our outstanding payment obligations under our supplier finance program were $309 million at October 29, 2023 and $480 million at January 29, 2023, and are recorded within accounts payable on the effect that consolidated balance sheets. The associated payments are included in operating activities within the consolidated statements of cash flows.
Fiscal Q3 2023 Form 10-Q6
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ASU No. 2014-09 will have2020-04. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on its Consolidated Financial StatementsReporting,” which provides practical expedients and related disclosuresexceptions for applying GAAP to contracts, hedging relationships, and controls.other transactions affected by reference rate reform if certain criteria are met. The Company has determinedexpedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate discontinued as a result of reference rate reform. ASU No. 2020-04 is effective as of March 12, 2020 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. This guidance was subsequently amended by ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which was effective upon issuance in December 2022 and extended the temporary relief provided by Topic 848 through December 31, 2024.
During the second quarter of fiscal 2023, we amended our existing fixed-to-variable interest rate swap agreements, which were designated as fair value hedges, to transition the variable component of such agreements from LIBOR to the Secured Overnight Financing Rate (“SOFR”). Concurrent with these amendments, we elected certain of the optional expedients provided in Topic 848, which allow us to maintain our designation of fair value hedge accounting and application of the shortcut method for these agreements. The adoption of ASU No. 2014-09 willthis guidance did not have a material impact the Company’s methodon our consolidated financial condition, results of recognizing gift card breakage income, which is currently recognized based upon historical redemption patterns. ASU No. 2014-09 requires gift card breakage income to be recognized in proportion to the pattern of rights exercised by the customer when the Company expects to be entitled to breakage. Other areas which could be impacted may be identified as the Company continues its evaluation of ASU No. 2014-09. The Company plans to adopt ASU No. 2014-09 on January 29, 2018 using the modified retrospective method.operations, or cash flows.
Recently Issued Accounting Pronouncements
Recent accounting pronouncements pending adoption not discussed above or in the 2016 Form 10-K are either not applicable or will not have or are not expected to have a material impact on our consolidated financial condition, results of operations, or cash flows.
2.NET SALES
The following table presents net sales, classified by geography:
Three Months EndedNine Months Ended
in millionsOctober 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Net sales – in the U.S.$34,544 $35,784 $108,242 $111,834 
Net sales – outside the U.S.3,166 3,088 9,641 9,738 
Net sales$37,710 $38,872 $117,883 $121,572 
The following table presents net sales by products and services:
Three Months EndedNine Months Ended
in millionsOctober 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Net sales – products$36,156 $37,448 $113,405 $117,261 
Net sales – services1,554 1,424 4,478 4,311 
Net sales$37,710 $38,872 $117,883 $121,572 
The following table presents major product lines and the Company.related merchandising departments (and related services):
2.Major Product LineRECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTSMerchandising Departments
Building MaterialsBuilding Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing
DécorAppliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint
HardlinesHardware, Indoor Garden, Outdoor Garden, and Tools
On
Fiscal Q3 2023 Form 10-Q7
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The following table presents net sales by major product line (and related services):
Three Months EndedNine Months Ended
in millionsOctober 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Building Materials$14,744 $15,343 $44,214 $46,095 
Décor12,653 13,070 38,315 40,040 
Hardlines10,313 10,459 35,354 35,437 
Net sales$37,710 $38,872 $117,883 $121,572 
Deferred Revenue
For products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment from customers before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. As of October 29, 2023 and January 29, 2023, deferred revenue for products and services was $1.8 billion and $2.0 billion, respectively.
We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, which generally occurs within six months of gift card issuance. As of October 29, 2023 and January 29, 2023, our performance obligations for unredeemed gift cards were $1.0 billion and $1.1 billion, respectively. Gift card breakage income, which is our estimate of the portion of our outstanding gift card balance not expected to be redeemed, was immaterial during the three and nine months ended October 29, 2023 and October 30, 2017,2022.
3.PROPERTY AND LEASES
Net Property and Equipment
Net property and equipment included accumulated depreciation and finance lease amortization of $28.1 billion as ofOctober 29, 2023 and $26.6 billion as of January 29, 2023.
Leases
The following table presents the Company adopted ASU No. 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting". Upon adoption of this update, all excess tax benefits or deficienciesconsolidated balance sheet classification related to share-based payment awardsoperating and finance leases:
in millionsConsolidated Balance Sheet ClassificationOctober 29,
2023		January 29,
2023
Assets:
Operating lease assetsOperating lease right-of-use assets$7,071 $6,941 
Finance lease assets (1)
Net property and equipment2,860 2,899 
Total lease assets$9,931 $9,840 
Liabilities:
Current:
   Operating lease liabilitiesCurrent operating lease liabilities$1,026 $945 
   Finance lease liabilitiesCurrent installments of long-term debt262 231 
Long-term:
   Operating lease liabilitiesLong-term operating lease liabilities6,300 6,226 
   Finance lease liabilitiesLong-term debt, excluding current installments3,032 3,054 
Total lease liabilities$10,620 $10,456 
—————
(1) Finance lease assets are recognized in the Provision for Income Taxes in the period in which they occur. Previously these amounts were reflected in Paid-In Capital. In addition, upon adoption these amounts are classifiedrecorded net of accumulated amortization of $1.2 billion as an operating activity in the Consolidated Statements of Cash Flows in the period in which they occur. Previously, these

both October 29, 2023 and January 29, 2023.
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Fiscal Q3 2023 Form 10-Q8
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THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

amounts were reflected as a financing activity. Cash paid by the Company to tax authorities when directly withholding shares for tax withholding purposes will continue to be classified as a financing activity in the Consolidated Statements of Cash Flows. Stock-Based Compensation Expense will continue to reflect estimated forfeitures of share-based awards. The Company has adopted the applicable provisions of ASU No. 2016-09 prospectively.
As a result of the adoption of ASU No. 2016-09, the Company recognized $7 million and $92 million of excess tax benefitsfollowing table presents supplemental non-cash information related to share-based payment awardsleases:
Nine Months Ended
in millionsOctober 29,
2023		October 30,
2022
Lease assets obtained in exchange for new operating lease liabilities$791 $1,308 
Lease assets obtained in exchange for new finance lease liabilities261 234 
4.DEBT AND DERIVATIVE INSTRUMENTS
Short-Term Debt
We have a commercial paper program that allows for borrowings up to $5.0 billion. In connection with our program, we have back-up credit facilities with a consortium of banks for borrowings up to $5.0 billion, which consist of a five-year $3.5 billion credit facility scheduled to expire in its Provision for Income Taxes duringJuly 2027 and a 364-day $1.5 billion credit facility scheduled to expire in July 2024. In July 2023, we completed the third quarter andrenewal of our 364-day $1.5 billion credit facility, extending the maturity from July 2023 to July 2024. All of our short-term borrowings in the first nine months of fiscal 2017, respectively. The recognition2023 were under our commercial paper program, and the maximum amount outstanding at any time was $1.5 billion. At both October 29, 2023 and January 29, 2023, there were no outstanding borrowings under our commercial paper program.
Long-Term Debt
We did not have any new issuances of these benefits contributed $0.01 and $0.08 to Diluted Earnings per Share forsenior notes during the third quarter and first nine months of fiscal 2017, respectively.
3.LONG-TERM DEBT
2023. In September 2017, the Company issuedApril 2023, we repaid our $1.0 billion of 2.80%2.70% senior notes due September 14, 2027 (the "2027 notes") at a discountmaturity.
Derivative Instruments and Hedging Activities
We had outstanding interest rate swap agreements with combined notional amounts of $3 million. Interest$5.4 billion at both October 29, 2023 and January 29, 2023. These agreements are accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. At October 29, 2023 and January 29, 2023, the fair values of these agreements totaled $1.1 billion and $778 million, respectively, all of which are recognized within other long-term liabilities on the 2027 notes is due semi-annually on March 14 and September 14 of each year, beginning March 14, 2018. The $3 million discount associated with the 2027 notes is being amortized over the term of the notes using the effective interest rate method. Issuance costs of $6 million associated with the 2027 notes were recorded as a direct deduction to the carrying value of the senior notes and are being amortized over the term of the notes. The net proceeds of the 2027 notes were used to repay the Company's floating rate notes due September 15, 2017 and for general corporate purposes, including repurchases of the Company's common stock.
In June 2017, the Company issued $500 million of floating rate senior notes due June 5, 2020 (the "2020 floating rate notes"); $750 million of 1.80% senior notes due June 5, 2020 (the "2020 notes") at a discount of $1 million; and $750 million of 3.90% senior notes due June 15, 2047 (the "2047 notes") at a discount of $5 million (together, the "June 2017 issuance"). The 2020 floating rate notes bear interest at a variable rate determined quarterly equal to the three-month London Interbank Offered Rate ("LIBOR") plus 15 basis points. Interest on the 2020 floating rate notes is due quarterly on March 5, June 5, September 5, and December 5 of each year, beginning September 5, 2017. Interest on the 2020 notes is due semi-annually on June 5 and December 5 of each year, beginning December 5, 2017. Interest on the 2047 notes is due semi-annually on June 15 and December 15 of each year, beginning December 15, 2017. Interest payments for the 2020 notes and 2047 notes will include accrued interest from and including June 5, 2017. The $6 million discount associated with the 2020 notes and the 2047 notes is being amortized over the term of the notes using the effective interest rate method. Issuance costs of $12 million associated with the June 2017 issuance were recorded as a direct deduction to the carrying value of the senior notes and are being amortized over the term of the notes. The net proceeds of the June 2017 issuance were used for general corporate purposes, including repurchases of the Company's common stock.consolidated balance sheets.
All of the Company's senior notes, other than its outstanding floating rate notes, may be redeemed by the Company at any time, in whole or in part, at the redemption price plus accrued interest up to the redemption date. 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, as defined in the respective notes. Additionally, if a Change in Control Triggering Event occurs, as defined in the notes, holders of all notes have the right to require the Company to redeem those notes at 101% of the aggregate principal amount of the notes plus accrued interest up to the redemption date. The Company is generally not limited under the indentures governing the notes in its ability to incur additional indebtedness or required to maintain financial ratios or specified levels of net worth or liquidity. The indentures governing the notes contain various customary covenants; however, none are expected to impact the Company's liquidity or capital resources.
Also in September 2017, we entered into anour interest rate swap agreement with a notional amount of $250 million, accounted foragreements are designated as a fair value hedge, to hedge againsthedges and 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 2027 notes attributablehedged long-term debt.
During the second quarter of fiscal 2023, we amended all of our interest rate swap agreements to replace LIBOR with SOFR and concurrently adopted certain expedients provided in Topic 848. These amendments did not result in any change to our application of hedge accounting or have a material impact to our consolidated financial statements. See Note 1 for further discussion.
There were no material changes to any other hedging arrangements disclosed in our 2022 Form 10-K, and all related activity was immaterial for the designated benchmark interest rate.periods presented within this document.
Collateral. We generally enter into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. To further limit our credit risk, we enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain derivative instruments exceeds or falls below contractually established thresholds. The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $926 million and $634 million as of October 29, 2023 and January 29, 2023, respectively, which was recorded in other current assets on the consolidated balance sheets. We did not hold any cash collateral as of October 29, 2023 or January 29, 2023.
4.Fiscal Q3 2023 Form 10-QACCELERATED SHARE REPURCHASE AGREEMENTS9
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The Company enters into Accelerated Share Repurchase ("ASR") agreements from time to time with third-party financial institutions to repurchase shares of the Company’s common stock. Under an ASR agreement, the Company pays a specified amount to the financial institution and receives an initial delivery of shares. This initial delivery of shares represents the minimum number of shares that the Company may receive under the agreement. Upon settlement of the ASR agreement, the financial institution delivers additional shares, with the final number of shares delivered determined with reference to the volume weighted average price per share of the Company’s common stock over the term of the ASR agreement, less a negotiated discount. The transactions are accounted for as equity transactions and are included in Treasury Stock when the

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THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

5. STOCKHOLDERS' EQUITY
shares are received, at which time there is an immediate reduction in the weighted average common shares calculation for Basic and Diluted Earnings per Share.Stock Rollforward
The following table provides the terms for eachpresents a reconciliation of the ASR agreementsnumber of shares of our common stock outstanding and cash dividends per share:
shares in millionsThree Months EndedNine Months Ended
October 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Common stock:
Shares at beginning of period1,796 1,793 1,794 1,792 
Shares issued under employee stock plans, net— — 2 1 
Shares at end of period1,796 1,793 1,796 1,793 
Treasury stock:
Shares at beginning of period(795)(769)(778)(757)
Repurchases of common stock(5)(4)(22)(16)
Shares at end of period(800)(773)(800)(773)
Shares outstanding at end of period996 1,020 996 1,020 
Cash dividends per share$2.09 $1.90 $6.27 $5.70 
Share Repurchases
In August 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the Company entered into duringprevious authorization of $15.0 billion, which was approved in August 2022. This new authorization does not have a prescribed expiration date. As of October 29, 2023, approximately $13.8 billion of the first nine months$15.0 billion share repurchase authorization remained available.
The following table presents information about our repurchases of fiscal 2017. Eachcommon stock, all of these agreements followed the structure outlined above (amounts in millions):which were completed through open market purchases:
in millionsThree Months EndedNine Months Ended
October 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Total number of shares repurchased5 4 22 16 
Total cost of shares repurchased (1)
$1,516 $1,224 $6,561 $4,994 
Agreement Date Settlement Date Agreement Amount Initial Shares Delivered Additional Shares Delivered Total Shares Delivered
Q2 2017 Q2 2017 $1,650
 9.7 1.1 10.8
Q3 2017(1)
 Q4 2017 $1,200
 6.7 0.7 7.4
—————
(1) Effective January 1, 2023, the Company’s share repurchases are subject to a 1% excise tax as a result of the Inflation Reduction Act of 2022. Excise taxes incurred on share repurchases represent direct costs of the repurchase and are recorded as a part of the cost basis of the shares within treasury stock.
The cost of shares repurchased may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period and excise taxes incurred on share repurchases.
6.FAIR VALUE MEASUREMENTS
The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:
•Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities;
•Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and
•Level 3: unobservable inputs for which little or no market data exists, therefore requiring management judgment to develop the Company’s own models with estimates and assumptions.
(1)Fiscal Q3 2023 Form 10-QThe fair market value of the initial 6.7 million shares on the date of delivery was $1,053 million and is included in Treasury Stock in the accompanying Consolidated Balance Sheets as of October 29, 2017. The remaining $147 million is included in Paid-In Capital in the accompanying Consolidated Balance Sheets as of October 29, 2017. The ASR agreement terminated on November 17, 2017, at which time the Company became contractually entitled to receive an additional 0.7 million shares upon settlement.10
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5.FAIR VALUE MEASUREMENTS
The carrying amountTable of Cash and Cash Equivalents, Receivables and Accounts Payable as reported in the Company's Consolidated Balance Sheets approximates fair value due to their short-term maturities.Contents
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the assets and liabilities if any, of the Company that are measured at fair value on a recurring basis:
October 29, 2023January 29, 2023
in millions 
Fair Value
(Level 2)
Fair Value
(Level 2)
Derivative agreements – assets$— $— 
Derivative agreements – liabilities(1,073)(778)
Total$(1,073)$(778)

Fair Value at October 29, 2017 Using Fair Value at January 29, 2017 Using
amounts in millions 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
Derivative agreements - assets$—
 $189
 $—
 $—
 $271
 $—
Derivative agreements - liabilities—
 (9) —
 —
 —
 —
Total$—
 $180
 $—
 $—
 $271
 $—
The Company usesfair values of our derivative financial instruments from time to time inare determined using an income approach and Level 2 inputs, which primarily include the management of itsrespective interest rate exposure on certain Long-Term Debtforward curves and its exposure to foreign currency fluctuations.discount rates. Our derivative instruments are discussed further in Note 4.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Long-lived assets, were analyzed for impairment on agoodwill, and other intangible assets are subject to nonrecurring basis using fair value measurements with unobservable inputs (level 3). Impairment charges related to long-lived assets inmeasurement for the first nine monthsassessment of fiscal 2017 and 2016 were not material.impairment.
During the third quarter of fiscal 2017, the Company2023, we completed itsour annual assessment of the recoverability of Goodwillgoodwill for itsour U.S., Canada, and Mexico reporting units.units, using a quantitative approach. The Companyquantitative test for goodwill impairment was performed qualitative assessments, concluding thatby determining the fair value of the reporting units wasusing a combination of discounted cash flow and market-based approaches. The results of our quantitative analysis indicated that the fair value of each of the reporting units substantially exceeded its respective carrying value, including goodwill. Additionally, during the third quarter of fiscal 2023, we completed our annual assessment of the recoverability of our indefinite-lived intangibles based on quantitative factors and concluded no impairment losses should be recognized.
We did not more likely than not less thanhave any material assets or liabilities that were measured at fair value on a nonrecurring basis during the three and nine months ended October 29, 2023 or October 30, 2022.
Other Fair Value Disclosures
The carrying value. Accordingly, no Goodwill impairments were recorded for these reporting units.
amounts of cash and cash equivalents, receivables, and accounts payable approximate fair value due to their short-term nature. The following table presents the aggregate fair values and carrying values of the Company'sour senior notes were as follows:notes:
October 29, 2023January 29, 2023
in millions Fair Value
(Level 1)		Carrying
Value		Fair Value
(Level 1)		Carrying
Value
Senior notes$33,135 $38,635 $38,537 $39,908 
7.WEIGHTED AVERAGE COMMON SHARES
 October 29, 2017 January 29, 2017
amounts in millions 
Fair Value
(Level 1)
 
Carrying
Value
 
Fair Value
(Level 1)
 
Carrying
Value
Senior notes$26,650
 $24,482
 $23,620
 $22,013

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THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

6.BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES
The following table presents the reconciliation of our basic to diluted weighted average common shares as well as the effectnumber of anti-dilutive securities excluded from diluted weighted average common shares:
in millionsThree Months EndedNine Months Ended
October 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Basic weighted average common shares996 1,020 1,002 1,024 
Effect of potentially dilutive securities (1)
3 3 3 4 
Diluted weighted average common shares999 1,023 1,005 1,028 
Anti-dilutive securities excluded from diluted weighted average common shares1 1 1 1 
—————
(1)    Represents the dilutive impact of stock-based awards.
 Three Months Ended Nine Months Ended
amounts in millionsOctober 29,
2017		 October 30,
2016		 October 29,
2017		 October 30,
2016
Basic Weighted Average Common Shares1,168
 1,224
 1,184
 1,236
Effect of potentially dilutive securities6
 5
 6
 6
Diluted Weighted Average Common Shares1,174
 1,229
 1,190
 1,242
        
Effect of anti-dilutive securities excluded from Diluted Weighted Average Common Shares—
 1
 1
 1
7.Fiscal Q3 2023 Form 10-QCOMMITMENTS AND CONTINGENCIES11
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Data Breach
As previously reported,
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8.CONTINGENCIES
We are involved in litigation arising in the third quarternormal course of fiscal 2014, the Company confirmed that its payment data systems were breached, which potentially impacted customers who used payment cards at self-checkout systems in the Company’s U.S. and Canadian stores (the "Data Breach"). Since the end of fiscal 2016, there have been no material changes with respectbusiness. In management’s opinion, any such litigation is not expected to the Data Breach, except as discussed below.
As reported in the 2016 Form 10-K, in the first quarter of fiscal 2017, the Company agreed to settlement terms that, upon approval of the court, will resolve and dismiss the claims asserted in the financial institutions class actions. In addition, in the first quarter of fiscal 2017, the parties to the purported shareholder derivative actions agreed to settlement terms that, upon approval of the court, will resolve and dismiss the claims asserted in those actions. In the third quarter of fiscal 2017, both of these settlement agreements were approved by the court.
As of the end of the first quarter of fiscal 2017, the Company has resolved the most significant claims relating to the Data Breach, and there were no material changes during the first nine months of fiscal 2017 to the Company’s loss contingency assessment relating to any remaining matters. The Company does not believe that the ultimate amounts paid with respect to any remaining matters will have a material adverse effect on the Company’sour consolidated financial condition, results of operations, or cash flows in future periods.

flows.
Fiscal Q3 2023 Form 10-Q12
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TheTo the Stockholders and Board of Directors and Stockholders
The Home Depot, Inc.:
Results of Review of Interim Financial Information
We have reviewed the Consolidated Balance Sheetconsolidated balance sheet of The Home Depot, Inc. and Subsidiariesits subsidiaries (the “Company”) as of October 29, 2017,2023, the related Consolidated Statementsconsolidated statements of Earningsearnings, comprehensive income and Comprehensive Incomestockholders’ equity for the three-month and nine-month periods ended October 29, 20172023 and October 30, 2016, and2022, the related Consolidated Statementsconsolidated statements of Cash Flowscash flows for the nine-month periods ended October 29, 20172023 and October 30, 2016. These Consolidated Financial Statements2022, and the related notes (collectively, the “consolidated interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the responsibility of the Company's management.consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.
We conducted our reviewshave previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (“PCAOB”), the consolidated balance sheet of the Company as of January 29, 2023, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the fiscal year then ended (not presented herein); and in our report dated March 15, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 29, 2023 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States),PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the Consolidated Financial Statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the Consolidated Balance Sheet of The Home Depot, Inc. and Subsidiaries as of January 29, 2017, and the related Consolidated Statements of Earnings, Comprehensive Income, Stockholders' Equity, and Cash Flows for the year then ended (not presented herein); and in our report dated March 23, 2017, we expressed an unqualified opinion on those Consolidated Financial Statements. In our opinion, the information set forth in the accompanying Consolidated Balance Sheet as of January 29, 2017, is fairly stated, in all material respects, in relation to the Consolidated Balance Sheet from which it has been derived.
/s/ KPMG LLP
Atlanta, Georgia
November 20, 20172023


Fiscal Q3 2023 Form 10-Q13
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Table of Contents
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
FORWARD-LOOKING STATEMENTS
Certain statements contained herein regarding our future performance constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the demand for our products and services; net sales growth; comparable store sales; effects of competition; state of the economy; state of the residential construction, housing and home improvement markets; state of the credit markets, including mortgages, home equity loans and consumer credit; demand for credit offerings; inventory and in-stock positions; implementation of store, interconnected retail, supply chain and technology initiatives; management of relationships with our suppliers and vendors; the impact and expected outcome of investigations, inquiries, claims and litigation, including those related to the Data Breach we discovered in the third quarter of fiscal 2014; issues related to the payment methods we accept; continuation of share repurchase programs; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the effect of accounting charges; the effect of adopting certain accounting standards; store openings and closures; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and benefits of those acquisitions.
Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control or are currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part II, Item 1A, "Risk Factors" and elsewhere in this report. You should read such information in conjunction with our Consolidated Financial Statements and related notes and "Management's2. Management's Discussion and Analysis of Financial Condition and Results of Operations"Operations.
The following discussion provides an analysis of the Company’s financial condition and results of operations from management's perspective and should be read in this report. There also may be other factors that we cannot anticipate or that are not describedconjunction with the consolidated financial statements and related notes included in this report generally because we do not currently perceive them to be material. Such factors could cause results to differ materially fromand in the 2022 Form 10-K and with our expectations.MD&A included in the 2022 Form 10-K.
Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the Securities and Exchange Commission ("SEC").TABLE OF CONTENTS
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EXECUTIVE SUMMARY AND SELECTED FINANCIAL AND OPERATING DATA
Net Sales increased 8.1% to $25.0The following table presents quarter-to-date and year-to-date highlights of our financial performance:
dollars in millions, except per share dataThree Months EndedNine Months Ended
October 29,
2023		October 30,
2022		October 29,
2023		October 30,
2022
Net sales$37,710 $38,872 $117,883 $121,572 
Net earnings$3,810 $4,339 $12,342 $13,743 
Diluted earnings per share$3.81 $4.24 $12.28 $13.37 
Net cash provided by operating activities$16,439 $10,021 
Proceeds from long-term debt, net of discounts$— $6,942 
Repayments of long-term debt$1,200 $2,423 
We reported net sales of $37.7 billion forin the third quarter of fiscal 2017 from $23.22023. Net earnings were $3.8 billion, for the third quarter of fiscal 2016.or $3.81 per diluted share. For the first nine months of fiscal 2017, Net Sales increased 6.4% to $77.02023, net sales were $117.9 billion from $72.4and net earnings were $12.3 billion, for the first nine months of fiscal 2016. Our total comparable store sales increased 7.9% foror $12.28 per diluted share.
During the third quarter of fiscal 2017, driven by a 5.1% increase in our comparable store average ticket and a 2.7% increase in our comparable store customer transactions. Comparable store sales for our U.S.2023, we opened five new stores increased 7.7% for the third quarter of fiscal 2017. For the first nine months of fiscal 2017, our total comparable store sales increased 6.6% and comparable store sales for our U.S. stores increased 6.8%.
For the third quarter of fiscal 2017, we reported Net Earnings of $2.2 billion and Diluted Earnings per Share of $1.84 compared to Net Earnings of $2.0 billion and Diluted Earnings per Share of $1.60 for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, we reported Net Earnings of $6.9 billion and Diluted Earnings per Share of $5.76 compared to Net Earnings of $6.2 billion and Diluted Earnings per Share of $5.00 for the first nine months of fiscal 2016.
In the third quarter of fiscal 2017, three hurricanes impacted our operations in the continental U.S., Puerto Rico and the U.S. Virgin Islands. Hurricane-related sales positively impacted total sales growth by approximately $282 million in the third quarter of fiscal 2017. The gross margin on these hurricane-related sales was considerably less than the Company average. We also incurred approximately $104 million of hurricane-related expense in the third quarter of fiscal 2017. As a result of the hurricanes, operating profit was negatively impacted by approximately $51 million in the third quarter of fiscal 2017.
We opened onetwo new storestores in Mexico, during the third quarter of fiscal 2017, forand we had no store closures, resulting in a total store count of 2,283 2,333 at the end of the quarter. As of October 29, 2023, a total of 319 stores, or 13.7% of our total store count, were located in Canada and Mexico. For the third quarter of fiscal 2023, sales per retail square foot were $595.71, and for the first nine months of fiscal 2023, sales per retail square foot were $623.17. Our inventory turnover ratio was 4.3 times at the end of the third quarter for both fiscal 2023 and fiscal 2022.
We generated $16.4 billion of fiscal 2017, a total of 303 of our stores, or 13.3%, were located in Canada and Mexico. Total sales per square foot for the third quarter of fiscal 2017 were $412.49, up 7.9%cash flow from last year. Foroperations during the first nine months of 2017, total salesfiscal 2023. This cash flow, together with cash on hand, was used to fund cash payments of $6.5 billion for share repurchases and $6.3 billion for dividends. In addition, we funded $2.4 billion in capital expenditures and repaid $1.2 billion of long-term debt during the first nine months of fiscal 2023. In February 2023, we announced a 10% increase in our quarterly cash dividend to $2.09 per square foot were $423.60, up 6.1% from last year. share.
Our inventory turnover ratioROIC for the trailing twelve-month period was 5.2 times38.7% at the end of the third quarter of fiscal 20172023 compared to 5.0 times43.3% at the end of the third quarter of fiscal 2016.

In the third quarter and first nine months of fiscal 2017, we continued to focus on the following:
Customer Experience – Customer experience is anchored on the principles of putting customers first and taking care of our associates, and our commitment to customer service remains strong. In the first nine months of fiscal 2017, we continued to invest2022. The decrease in our digital platforms, including content, website improvements, and the mobile experience, to provide a frictionless interconnected experience online, while also remaining focused on improving the interconnected experience in the store. Sales from our online channels increased 18.6% for the third quarter of fiscal 2017 compared to the same period last year, and represented 6.2% of our total Net Sales. For the first nine months of fiscal 2017, sales from our online channels increased 21.6% compared to the same period last year, and represented 6.4% of our total Net Sales. We also continued to focus on being a valued partner to our professional customersROIC was primarily driven by offering solutions in the store and at the jobsite that help them effectively manage their businesses.
Product Authority – Product authority is facilitated by our merchandising transformation and portfolio strategy, which is focused on delivering product innovation, assortment and value. We strive to be the leader in product authority, connecting products and services to the needs of our customers. In the first nine months of fiscal 2017, our merchants continued to collaborate with our suppliers to introduce a wide range of innovative new products to our do-it-yourself, do-it-for-me and professional customers, while remaining focused on offering everyday values in our stores and online.
Productivity and Efficiency Driven by Capital Allocation – We drive productivity and efficiency through continuous operational improvement in our stores and supply chain. Further, our disciplined capital allocation builds shareholder value through higher returns on invested capital and total value returned to shareholders in the form of dividends and share repurchases. We plan to continue to innovate our business model and value chain to support our productivity cycle and enhance overall value for customers throughout the year.
In February 2017, our Board of Directors increased our targeted dividend payout ratio to 55% of Diluted Earnings per Share. Also in February 2017, our Board of Directors authorized a new $15.0 billion share repurchase program that replaced the previous authorization. Under the program, we repurchased a total of 12.3 million shares of our common stock for $2.1 billion through an ASR agreement and the open market during the third quarter of fiscal 2017. During the first nine months of fiscal 2017, we repurchased 38.0 million shares of our common stock for $5.9 billion through ASR agreements and the open market.
We generated $9.7 billion of cash flow from operations in the first nine months of fiscal 2017. This cash flow,lower operating income along with $3.0 billion ofan increase in average long-term debt issued inover the first nine monthsrespective periods. See the Non-GAAP Financial Measures section below for our definition and calculation of fiscal 2017, was used to fund cash payments of $6.1 billion for share repurchases, pay $3.2 billion of dividends, fund $1.4 billion in capital expenditures, repay $585 million of short-term debt, and repay $500 million of floating rate senior notes that matured on September 15, 2017.
Our return on invested capital ("ROIC") was 32.5% for the third quarter of fiscal 2017 compared to 29.1% for the third quarter of fiscal 2016. We define ROIC, as net operating profit after tax ("NOPAT"),well as a reconciliation of NOPAT, a non-GAAP financial measure, for the most recent twelve-month period, divided by the average of beginning and ending long-term debt, including current installments, and equity for the most recent twelve-month period. For a reconciliation of NOPAT to Net Earnings, thenet earnings (the most comparable GAAP financial measure, and our calculationmeasure).
Fiscal Q3 2023 Form 10-Q14
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Table of ROIC, see "Non-GAAP Financial Measures" below.Contents

RESULTS OF OPERATIONS
We believeThe following table presents the percentage relationship between Net Salesnet sales and the major categories in the Consolidated Statementsour consolidated statements of Earnings and the percentage change in the dollar amounts of each of these items as well as the selected sales data presented below are important in evaluating the performance of our business operations.earnings.
FISCAL 2023 AND FISCAL 2022 THREE MONTH COMPARISONS
 % of Net Sales % Increase (Decrease)
in Dollar Amounts
 Three Months Ended Nine Months Ended 
 October 29, 2017 October 30, 2016 October 29, 2017 October 30, 2016 Three Months 
Nine
Months
NET SALES100.0 % 100.0 % 100.0 % 100.0 % 8.1% 6.4%
GROSS PROFIT34.6
 34.7
 34.1
 34.2
 7.5
 6.1
Operating Expenses:    

 

    
Selling, General and Administrative18.0
 18.5
 17.4
 17.9
 5.5
 3.7
Depreciation and Amortization1.8
 1.9
 1.7
 1.8
 2.7
 2.7
Total Operating Expenses19.9
 20.4
 19.2
 19.7
 5.2
 3.6
            
OPERATING INCOME14.7
 14.3
 14.9
 14.5
 10.8
 9.4
Interest and Other (Income) Expense:           
Interest and Investment Income(0.1) —
 (0.1) —
 N/M
 N/M
Interest Expense1.1
 1.1
 1.0
 1.0
 9.3
 8.5
Interest and Other, net1.0
 1.0
 1.0
 1.0
 4.7
 5.1
            
EARNINGS BEFORE PROVISION
  FOR INCOME TAXES
13.7
 13.3
 14.0
 13.5
 11.3
 9.8
Provision for Income Taxes5.1
 4.8
 5.1
 5.0
 13.7
 8.9
NET EARNINGS8.7 % 8.5 % 8.9 % 8.6 % 10.0% 10.3%
            
SELECTED SALES DATA (1)
           
Number of Customer Transactions (millions)389.5
 380.0
 1,212.0
 1,184.8
 2.5% 2.3%
Average Ticket (actual)$62.84
 $59.78
 $62.78
 $60.26
 5.1% 4.2%
Sales per Square Foot (actual)$412.49
 $382.18
 $423.60
 $399.12
 7.9% 6.1%
Comparable Store Sales Increase (%) (2)
7.9 % 5.5 % 6.6 % 5.5 % N/A
 N/A
Online Sales (% of Net Sales) (3)
6.2 % 5.6 % 6.4 % 5.6 % 18.6% 21.6%
Three Months Ended
October 29, 2023October 30, 2022
dollars in millions$% of
Net Sales		$% of
Net Sales
Net sales$37,710 $38,872 
Gross profit12,738 33.8 %13,224 34.0 %
Operating expenses:
Selling, general and administrative6,649 17.6 6,468 16.6 
Depreciation and amortization683 1.8 608 1.6 
Total operating expenses7,332 19.4 7,076 18.2 
Operating income5,406 14.3 6,148 15.8 
Interest and other (income) expense:
Interest income and other, net(49)(0.1)(7)— 
Interest expense487 1.3 413 1.1 
Interest and other, net438 1.2 406 1.0 
Earnings before provision for income taxes4,968 13.2 5,742 14.8 
Provision for income taxes1,158 3.1 1,403 3.6 
Net earnings$3,810 10.1 %$4,339 11.2 %
—————
Note: Certain percentages may not sum to totals due to rounding.
Three Months Ended
Selected financial and sales data:October 29,
2023		October 30,
2022		% Change
Comparable sales (% change)(3.1)%4.3 %N/A
Comparable customer transactions (% change) (1)
(2.7)%(4.4)%N/A
Comparable average ticket (% change) (1)
(0.3)%8.8 %N/A
Customer transactions (in millions) (1)
399.8 409.8 (2.4)%
Average ticket (1) (2)
$89.36 $89.67 (0.3)%
Sales per retail square foot (1) (3)
$595.71 $618.50 (3.7)%
Diluted earnings per share$3.81 $4.24 (10.1)%
—————
(1)Selected Sales Data does not include results for Interline Brands, Inc., which was acquired in the third quarter of fiscal 2015.
(2)
Includes sales at locations open greater than 12 months, including relocated and remodeled stores and online sales, and excluding closed stores. Retail stores become comparable on the Monday following their 365th day of operation. Comparable store sales is intended only as supplemental information and is not a substitute for Net Sales or Net Earnings presented in accordance with GAAP.
(3)Consists of sales generated online through our websites for products picked up in stores or delivered to customer locations.
N/M – Not Meaningful
N/A – Not Applicable(1)Does not include results for HD Supply.

(2)Average ticket represents the average price paid per transaction and is used by management to monitor the performance of the Company, as it represents a primary driver in measuring sales performance.

(3)Sales per retail square foot represents annualized sales divided by retail store square footage. Sales per retail square foot is a measure of the efficiency of sales based on the total square footage of our stores and is used by management to monitor the performance of the Company’s retail operations as an indicator of the productivity of owned and leased square footage for these retail operations.

Sales
RESULTS OF OPERATIONSWe assess our sales performance by evaluating both net sales and comparable sales.
Net SalesSales. Net sales for the third quarter of fiscal 2017 increased 8.1% to $25.02023 were $37.7 billion, a decrease of 3.0% from $23.2$38.9 billion for the third quarter of fiscal 2016. For2022. The decrease in net sales for the third quarter of fiscal 2023 reflects the impact of a negative comparable sales environment, primarily driven by a decrease in comparable customer transactions as well as the impact from commodity price deflation.
Fiscal Q3 2023 Form 10-Q15
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Table of Contents
Online sales, which consist of sales generated through our websites and mobile applications for products picked up at our stores or delivered to customer locations, represented 14.3% of net sales during the third quarter of fiscal 2023 and increased by 4.6% compared to the third quarter of fiscal 2022.
A weaker U.S. dollar positively impacted net sales by $131 million during the third quarter of fiscal 2023.
Comparable Sales. Comparable sales is a measure that highlights the performance of our existing locations and websites by measuring the change in net sales for a period over the comparable prior period of equivalent length. Comparable sales includes sales at all locations, physical and online, open greater than 52 weeks (including remodels and relocations) and excludes closed stores. Retail stores become comparable on the Monday following their 52nd week of operation. Acquisitions are typically included in comparable sales after they have been owned for more than 52 weeks. Comparable sales is intended only as supplemental information and is not a substitute for net sales presented in accordance with GAAP.
Total comparable sales for the third quarter of fiscal 2023 decreased 3.1%, reflecting a 2.7% decrease in comparable customer transactions and a 0.3% decrease in comparable average ticket compared to the third quarter of fiscal 2022. The decrease in comparable customer transactions reflects the impact of macroeconomic factors and moderating home improvement demand. Comparable average ticket reflects U.S. commodity price deflation, which negatively impacted average ticket by approximately 60 basis points, partially offset by demand for new and innovative products.
During the third quarter of fiscal 2023, our Building Materials merchandising department posted positive comparable sales compared to the third quarter of fiscal 2022. All of our other merchandising departments posted negative comparable sales during the third quarter of fiscal 2023 compared to the third quarter of fiscal 2022.
Gross Profit
Gross profit for the third quarter of fiscal 2023 decreased 3.7% to $12.7 billion from $13.2 billion for the third quarter of fiscal 2022. Gross profit as a percentage of net sales, or gross profit margin, was 33.8% for the third quarter of fiscal 2023 compared to 34.0% for the third quarter of fiscal 2022. The decrease in gross profit margin during the third quarter of fiscal 2023 was primarily driven by price stabilization, partially offset by lower supply chain costs.
Operating Expenses
Our operating expenses are composed of SG&A and depreciation and amortization.
Selling, General & Administrative. SG&A for the third quarter of fiscal 2023 increased $181 million, or 2.8%, to $6.6 billion from $6.5 billion for the third quarter of fiscal 2022. As a percentage of net sales, SG&A was 17.6% for the third quarter of fiscal 2023 compared to 16.6% for the third quarter of fiscal 2022, primarily reflecting deleverage from a negative comparable sales environment and previously executed wage investments for hourly associates.
Depreciation and Amortization. Depreciation and amortization for the third quarter of fiscal 2023 increased $75 million, or 12.3%, to $683 million from $608 million for the third quarter of fiscal 2022. As a percentage of net sales, depreciation and amortization was 1.8% for the third quarter of fiscal 2023 compared to 1.6% for the third quarter of fiscal 2022, primarily reflecting increased depreciation expense from ongoing investments in the business and deleverage from a negative comparable sales environment.
Interest and Other, net
Interest and other, net, for the third quarter of fiscal 2023 increased $32 million, or 7.9%, to $438 million from $406 million for the third quarter of fiscal 2022. As a percentage of net sales, interest and other, net was 1.2% for the third quarter of fiscal 2023 compared to 1.0% for the third quarter of fiscal 2022, primarily due to increased variable rate interest on floating rate debt resulting from interest rate swaps, higher average debt balances, and deleverage from a negative comparable sales environment, partially offset by higher interest income.
Provision for Income Taxes
Our combined effective income tax rate was 23.3% for the third quarter of fiscal 2023 compared to 24.4% for the third quarter of fiscal 2022. The decrease in our effective rate was driven by certain discrete tax benefits recognized during the third quarter of fiscal 2023.
Diluted Earnings per Share
Diluted earnings per share were $3.81 for the third quarter of fiscal 2023 compared to $4.24 for the third quarter of fiscal 2022. The decrease in diluted earnings per share was primarily driven by lower net earnings during the third quarter of fiscal 2023, partially offset by lower diluted shares due to share repurchases.
Fiscal Q3 2023 Form 10-Q16
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Table of Contents
FISCAL 2023 AND FISCAL 2022 NINE MONTH COMPARISONS
Nine Months Ended
October 29, 2023October 30, 2022
dollars in millions$% of
Net Sales		$% of
Net Sales
Net sales$117,883 $121,572 
Gross profit39,452 33.5 %40,852 33.6 %
Operating expenses:
Selling, general and administrative19,919 16.9 19,735 16.2 
Depreciation and amortization1,987 1.7 1,830 1.5 
Total operating expenses21,906 18.6 21,565 17.7 
Operating income17,546 14.9 19,287 15.9 
Interest and other (income) expense:
Interest income and other, net(123)(0.1)(12)— 
Interest expense1,430 1.2 1,166 1.0 
Interest and other, net1,307 1.1 1,154 0.9 
Earnings before provision for income taxes16,239 13.8 18,133 14.9 
Provision for income taxes3,897 3.3 4,390 3.6 
Net earnings$12,342 10.5 %$13,743 11.3 %
—————
Note: Certain percentages may not sum to totals due to rounding.
Nine Months Ended
Selected financial and sales data:October 29,
2023		October 30,
2022		% Change
Comparable sales (% change)(3.2)%4.2 %N/A
Comparable customer transactions (% change) (1)
(3.2)%(5.3)%N/A
Comparable average ticket (% change) (1)
— %9.7 %N/A
Customer transactions (in millions) (1)
1,249.8 1,287.9 (3.0)%
Average ticket (1) (2)
$90.42 $90.45 — 
Sales per retail square foot (1) (3)
$623.17 $646.81 (3.7)%
Diluted earnings per share$12.28 $13.37 (8.2)%
—————
(1)Does not include results for HD Supply.
(2)Average ticket represents the average price paid per transaction and is used by management to monitor the performance of the Company, as it represents a primary driver in measuring sales performance.
(3)Sales per retail square foot represents annualized sales divided by retail store square footage. Sales per retail square foot is a measure of the efficiency of sales based on the total square footage of our stores and is used by management to monitor the performance of the Company’s retail operations as an indicator of the productivity of owned and leased square footage for these retail operations.
Sales
We assess our sales performance by evaluating both net sales and comparable sales.
Net Sales. Net sales for the first nine months of fiscal 2017, Net Sales increased 6.4% to $77.02023 were $117.9 billion, a decrease of 3.0% from $72.4$121.6 billion for the first nine months of fiscal 2016.2022. The increasedecrease in Net Salesnet sales for the third quarter and first nine months of fiscal 2017 primarily2023 reflects the impact of positivea negative comparable store sales environment, primarily driven by increaseda decrease in comparable customer transactions and average ticket growth. Hurricane-relatedas well as the impact from lumber price deflation.
Online sales positively impacted totalrepresented 14.4% of net sales growth by approximately $282 million induring the third quarter of fiscal 2017. We expect continued hurricane recovery-related sales in the fourth quarter of fiscal 2017.
Total comparable store sales increased 7.9% and 6.6% for the third quarter and first nine months of fiscal 2017, respectively, which reflects a number2023 and increased by 0.9% compared to the first nine months of factors, includingfiscal 2022.
A weaker U.S. dollar positively impacted net sales by $145 million for the executionfirst nine months of our strategy and broad-based growth across our stores. Allfiscal 2023.
Fiscal Q3 2023 Form 10-Q17
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Table of our departments except one posted positiveContents
Comparable Sales. Total comparable store sales for the third quarterfirst nine months of fiscal 2017. 2023 decreased 3.2%, reflecting a 3.2% decrease in comparable customer transactions and flat comparable average ticket compared to the first nine months of fiscal 2022. The decrease in comparable customer transactions reflects the impact of macroeconomic factors and moderating home improvement demand. Comparable average ticket was primarily impacted by inflation across several product categories along with demand for new and innovative products, offset by U.S. commodity price deflation, which negatively impacted average ticket by approximately 180 basis points, driven primarily by lumber.
During the first nine months of fiscal 2017, all2023, four of our departments 14 merchandising departments—Building Materials, Hardware, Outdoor Garden, and Plumbing—posted positive comparable store sales except for one, which was flat. Comparable store sales for our Lumber, Appliances, Electrical, Indoor Garden, Tools, Building Materials and Flooring product categories were above the Company average for the third quarter of fiscal 2017. Further, our comparable store average ticket increased 5.1% and 4.2% for the third quarter and first nine months of fiscal 2017, respectively, due in partcompared to strong sales in big ticket purchases such as appliances and flooring. Our comparable store customer transactions increased 2.7% and 2.3% for the third quarter and first nine months of fiscal 2017, respectively.
Gross Profit increased 7.5% to $8.6 billion for the third quarter of fiscal 2017 from $8.0 billion for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, 2022. All of our other merchandising departments posted negative comparable sales during the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022, with our Lumber department posting a double-digit comparable sales decline primarily resulting from lumber price deflation, partially offset by higher unit sales.
Gross Profit increased 6.1%
Gross profit for the first nine months of fiscal 2023 decreased 3.4% to $26.3$39.5 billion from $24.8$40.9 billion for the first nine months of fiscal 2016.2022. Gross Profitprofit as a percentpercentage of Net Sales,net sales, or gross profit margin, was 34.6% for the third quarter of fiscal 2017 compared to 34.7% for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, gross profit margin was 34.1% compared to 34.2%33.5% for the first nine months of fiscal 2016. Gross profit margin for the third quarter of fiscal 2017 reflects pressure from product mix changes and higher supply chain expense driven by hurricane-related sales. Gross profit margin2023 compared to 33.6% for the first nine months of fiscal 2017 reflects the impact of product mix changes and higher shrink, partially offset by benefits from our supply chain.
Selling, General and Administrative ("SG&A") increased 5.5% to $4.5 billion for the third quarter of fiscal 2017 from $4.3 billion for the third quarter of fiscal 2016. For2022. The decrease in gross profit margin during the first nine months of fiscal 2017,2023 was primarily driven by price stabilization along with pressure from shrink, partially offset by lower supply chain costs and favorable product mix.
Operating Expenses
Our operating expenses are composed of SG&A and depreciation and amortization.
Selling, General & Administrative. SG&A for the first nine months of fiscal 2023 increased 3.7%$184 million, or 0.9%, to $13.4$19.9 billion from $12.9$19.7 billion for the first nine months of fiscal 2016. SG&A includes approximately $104 million of hurricane-related expenses in the third quarter and first nine months of fiscal 2017.2022. As a percentpercentage of Net Sales,net sales, SG&A was 18.0% for the third quarter of fiscal 2017 compared to 18.5% for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, SG&A as a percent of Net Sales was 17.4% compared to 17.9%16.9% for the first nine months of fiscal 2016. The decrease in SG&A as a percent of Net Sales for the third quarter and first nine months of fiscal 2017 reflects expense leverage resulting from the positive comparable store sales environment and continued expense control.
Depreciation and Amortization increased 2.7% to $454 million for the third quarter of fiscal 2017 from $442 million for the third quarter of fiscal 2016. Depreciation and Amortization was $1.3 billion for the first nine months of both fiscal 2017 and 2016. Depreciation and Amortization as a percent of Net Sales was 1.8% for the third quarter of fiscal 20172023 compared to 1.9% for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, Depreciation and Amortization as a percent of Net Sales was 1.7% compared to 1.8%16.2% for the first nine months of fiscal 2016. 2022, primarily reflecting deleverage from a negative comparable sales environment along with previously executed wage investments for hourly associates, partially offset by the one-time benefit from the favorable settlement of litigation with a vendor as well as lower incentive compensation.
Depreciation and Amortization as a percent of Net SalesAmortization. Depreciation and amortization for the third quarter and first nine months of fiscal 2017 reflects expense leverage resulting from the positive comparable store sales environment.
Operating Income increased 10.8% to $3.7 billion for the third quarter of fiscal 2017 from $3.3 billion for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, Operating Income2023 increased 9.4%$157 million, or 8.6%, to $11.5$2.0 billion from $10.5$1.8 billion for the first nine months of fiscal 2016.2022. As a resultpercentage of the hurricanes, Operating Incomenet sales, depreciation and amortization was negatively impacted by approximately $51 million in the third quarter and first nine months of fiscal 2017. Operating Income as a percent of Net Sales was 14.7% for the third quarter of fiscal 2017 compared to 14.3% for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, Operating Income as a percent of Net Sales was 14.9% compared to 14.5%1.7% for the first nine months of fiscal 2016.
Interest2023 and Other, net, was $247 million for the third quarter of fiscal 2017 compared to $236 million for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, Interest and Other, net, was $737 million compared to $701 million1.5% for the first nine months of fiscal 2016. 2022, primarily reflecting increased depreciation expense from ongoing investments in the business and deleverage from a negative comparable sales environment.
Interest and Other, net as a percent of Net Sales was 1.0%
Interest and other, net for the third quarter and first nine months of both fiscal 20172023 increased $153 million, or 13.3%, to $1.3 billion from $1.2 billion for the first nine months of fiscal 2022. As a percentage of net sales, interest and 2016.other, net was 1.1% for the first nine months of fiscal 2023 compared to 0.9% for the first nine months of fiscal 2022, primarily due to increased variable rate interest on floating rate debt resulting from interest rate swaps, higher average debt balances, and deleverage from a negative comparable sales environment, partially offset by higher interest income.
Provision for Income Taxes
Our combined effective income tax rate was 36.3%24.0% for the first nine months of fiscal 20172023 compared to 36.6%24.2% for the first nine months of fiscal 2016. The effective income tax rate2022.
Diluted Earnings per Share
Diluted earnings per share were $12.28 for the first nine months of fiscal 2017 reflects a $92 million benefit to our Provision for Income Taxes for share-based payment awards as a result of the adoption of ASU No. 2016-09.


Diluted Earnings per Share were $1.84 for the third quarter of fiscal 20172023, compared to $1.60 for the third quarter of fiscal 2016. For the first nine months of fiscal 2017, Diluted Earnings per Share were $5.76 compared to $5.00$13.37 for the first nine months of fiscal 2016. Diluted Earnings2022. The decrease in diluted earnings per Share forshare was primarily driven by lower net earnings during the third quarter and first nine months of fiscal 2017 included benefits2023, partially offset by lower diluted shares due to share repurchases.
Fiscal Q3 2023 Form 10-Q18
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Table of $0.01 and $0.08, respectively, as a result of the adoption of ASU No. 2016-09.Contents

Non-GAAP Financial MeasuresNON-GAAP FINANCIAL MEASURES
To provide clarity internally and externally, abouton our operating performance, we supplement our reporting with certain non-GAAP financial measures. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures. Non-GAAP financial measures presented herein may differ from similar measures used by other companies.
Return on Invested Capital
We believe ROIC is meaningful for investors and management because it measures how effectively we deploy our capital base. We define ROIC as NOPAT, a non-GAAP financial measure, for the most recent twelve-month period, divided by average debt and equity. We define average debt and equity as the average of beginning and ending long-term debt (including current installments) and equity for the most recent twelve-month period.
The following table provides ourpresents the calculation of ROIC, calculation and reconcilestogether with a reconciliation of NOPAT to Net Earnings:net earnings (the most comparable GAAP measure):
 Twelve Months Ended
dollars in millionsOctober 29,
2023		October 30,
2022
Net earnings$15,704 $17,095 
Interest and other, net1,715 1,477 
Provision for income taxes4,879 5,540 
Operating income22,298 24,112 
Income tax adjustment (1)
(5,347)(5,844)
NOPAT$16,951 $18,268 
Average debt and equity$43,810 $42,222 
ROIC38.7 %43.3 %
  For the Twelve Months Ended
dollar amounts in millions October 29,
2017		 October 30,
2016
Net Earnings $8,595
 $7,684
Add:    
Interest and Other, net 972
 937
Provision for Income Taxes 4,852
 4,428
Operating Income 14,419
 13,049
Subtract:    
Income Tax Adjustment (1)
 5,234
 4,771
Net Operating Profit After Tax $9,185
 $8,278
     
Average Debt and Equity (2)
 $28,255
 $28,441
     
Return on Invested Capital (3)
 32.5% 29.1%
—————
(1)Income Tax Adjustment is defined as Operating Income multiplied by the Company's effective tax rate.
(2)Average Debt and Equity is defined as the average of beginning and ending long-term debt, including current installments, and equity for the most recent twelve-month period.
(3)ROIC is calculated as NOPAT divided by Average Debt and Equity.
(1)Income tax adjustment is defined as operating income multiplied by our effective tax rate for the trailing twelve months.
LIQUIDITY AND CAPITAL RESOURCES
At October 29, 2023, we had $2.1 billion in cash and cash equivalents, of which $1.0 billion was held by our foreign subsidiaries. We believe that our current cash position, cash flow generated from operations, funds available from our commercial paper program, and access to the long-term debt capital markets should be sufficient not only for our operating requirements, any required debt payments, and satisfaction of other contractual obligations, but also to enable us to invest in the business, fund dividend payments, and fund any share repurchases through the next several fiscal years. In addition, we believe that we have the ability to obtain alternative sources of financing, if necessary.
Our material cash requirements include contractual and other obligations arising in the normal course of business. These obligations primarily include long-term debt and related interest payments, operating and finance lease obligations, and purchase obligations.
In addition to our cash requirements, we follow a disciplined approach to capital allocation. This approach first prioritizes investing in the business, followed by paying dividends, with the intent of then returning excess cash to shareholders in the form of share repurchases. For fiscal 2023, we plan to invest approximately $3 billion back into the business in the form of capital expenditures, in line with our expectation of approximately two percent of net sales on an annual basis. However, we may adjust our capital expenditures to support the operations of the business, to enhance long-term strategic positioning, or in response to the economic environment, as necessary or appropriate. Capital expenditures were $2.4 billion for the first nine months of fiscal 2023.
In February 2023, we announced a 10% increase in our quarterly cash dividend from $1.90 to $2.09 per share. During the first nine months of fiscal 2023, we paid cash dividends of $6.3 billion to shareholders. We intend to pay a dividend in the future; however, any future dividend is subject to declaration by our Board of Directors based on our earnings, capital requirements, financial condition, and other factors considered relevant by our Board of Directors.
Fiscal Q3 2023 Form 10-Q19
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In August 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the previous authorization of $15.0 billion, which was approved in August 2022. This new authorization does not have a prescribed expiration date. As of October 29, 2023, approximately $13.8 billion of the $15.0 billion share repurchase authorization remained available. During the first nine months of fiscal 2023, we had cash payments of $6.5 billion for repurchases of our common stock through open market purchases.
DEBT
We have a commercial paper program that allows for borrowings up to $5.0 billion. In connection with our program, we have back-up credit facilities with a consortium of banks for borrowings up to $5.0 billion, which consist 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. In July 2023, we completed the renewal of our 364-day $1.5 billion credit facility, extending the maturity from July 2023 to July 2024. All of our short-term borrowings in the first nine months of fiscal 2023 were under our commercial paper program, and the maximum amount outstanding at any time was $1.5 billion. At October 29, 2023, we had no outstanding borrowings under our commercial paper program, and we were in compliance with all of the covenants contained in our credit facilities, none of which are expected to impact our liquidity or capital resources.
We also issue senior notes from time to time as part of our capital management strategy. We did not have any issuances of senior notes during the first nine months of fiscal 2023. In April 2023, we repaid $1.0 billion of senior notes at maturity.
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 are expected to impact our liquidity or capital resources. See Note 4 to our consolidated financial statements for further discussion of our debt arrangements.
CASH FLOWS SUMMARY
Operating Activities
Cash flow generated from operations provides us with a significant source of liquidity. For the first nine months of fiscal 2017, Net Cash Provided by Operating Activities was $9.7 billion compared to $7.9 billion for the same period of fiscal 2016. This increase primarily reflects a $677 million increase inOur operating cash flows result primarily from the effectivecash received from our customers, offset by cash payments we make for products and services, associate compensation, operations, occupancy costs, and income taxes. Cash provided by or used in operating activities is also subject to changes in working capital. Working capital at any point in time is subject to many variables, including seasonality, inventory management and procurementcategory expansion, the timing of Merchandise Inventoriescash receipts and a $638 million increasepayments, vendor payment terms, and fluctuations in Net Earnings resulting from higher sales and expense leverage.
Net Cash Used in Investing Activities for the first nine months of fiscal 2017 was $1.6 billion compared to $1.1 billion for the same period of fiscal 2016. This change was primarily due to $260 million in Payments for Business Acquired, net, related to the acquisition of Compact Power Equipment, Inc. and a $209 million increase in Capital Expenditures.foreign exchange rates.
Net Cash Used in Financing Activities for the first nine months of fiscal 2017 was $7.3cash provided by operating activities increased by $6.4 billion compared to $5.4 billion for the same period of fiscal 2016. This change was primarily due to $1.5 billion more in Repurchases of Common Stock, $607 million more in Cash Dividends Paid to Stockholders and $235 million more in Repayments of Short-Term Debt, partially offset by $532 million more in net incremental long-term debt issued in the first nine months of fiscal 20172023 compared to the same periodfirst nine months of fiscal 2016.2022, primarily driven by changes in working capital, slightly offset by a decrease in net earnings. Changes in working capital were primarily driven by lower inventory purchases in the first nine months of fiscal 2023 relative to the first nine months of fiscal 2022, as well as timing of vendor payments.
In September 2017, we issuedInvesting Activities
Net cash used in investing activities increased by $903 million in the 2027 notes at a discountfirst nine months of $3 million. Thefiscal 2023 compared to the first nine months of fiscal 2022, primarily resulting from cash paid for acquired businesses as well as increased capital expenditures during fiscal 2023.
Financing Activities
Net cash used in financing activities in the first nine months of fiscal 2023 primarily reflected $6.5 billion of share repurchases, $6.3 billion of cash dividends paid, and $1.2 billion of repayments of long-term debt. Net cash used in financing activities in the first nine months of fiscal 2022 primarily reflected $5.9 billion of cash dividends paid, $5.1 billion of share repurchases, $2.4 billion of repayments of long-term debt, and $1.0 billion of net repayments of short-term debt, partially offset by $6.9 billion of net proceeds from long-term debt.
Fiscal Q3 2023 Form 10-Q20
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Table of the 2027 notes were used to repay our floating rate notes due September 15, 2017 and for general corporate purposes, including repurchases of shares of our common stock. See Note 3 to the Consolidated Financial Statements included in this report.Contents

CRITICAL ACCOUNTING ESTIMATES
Also in September 2017, we entered into an interest rate swap agreement with a notional amount of $250 million, accounted for as a fair value hedge, to hedge against changes in the fair value of the 2027 notes attributable to changes in the designated benchmark interest rate.
In June 2017, we issued the 2020 floating rate notes; the 2020 notes at a discount of $1 million; and the 2047 notes at a discount of $5 million. The net proceeds of the June 2017 issuance were used for general corporate purposes, including repurchases of shares of our common stock. See Note 3 to the Consolidated Financial Statements included in this report.
In the second quarter of fiscal 2017, we entered into an ASR agreement under which we paid $1.65 billion to a third party financial institution and received a total of 10.8 million shares. In the third quarter of fiscal 2017, we entered into an ASR agreement under which we paid $1.2 billion to a third party financial institution and received an initial delivery of 6.7 million shares. The ASR agreement terminated on November 17, 2017, at which time the Company became contractually entitled to receive an additional 0.7 million shares upon settlement. See Note 4 to the Consolidated Financial Statements included in this report.
We have commercial paper programs that allow for borrowings up to $2.0 billion. In connection with these programs, we have a back-up credit facility with a consortium of banks for borrowings up to $2.0 billion. The credit facility expires in December 2019 and contains various customary covenants. At October 29, 2017, we were in compliance with all of the covenants, and none are expected to impact our liquidity or capital resources. During the first nine months of fiscal 2017, all of our short-term borrowings were under these commercial paper programs, and the maximum amount outstanding at any time during the first nine months of fiscal 2017 was $1.0 billion. As of October 29, 2017,2023, there were $125 million of borrowings outstanding underno changes to our critical accounting estimates or our significant accounting policies as disclosed in the commercial paper programs.2022 Form 10-K. Our significant accounting policies are disclosed in Note 1 to our consolidated financial statements.
As of October 29, 2017, we had $3.5 billion in Cash and Cash Equivalents. We believe that our current cash position, access to the long-term debt capital markets and cash flow generated from operations should be sufficient not only for our operating requirements but also to enable us to complete our capital expenditure programs and fund dividend payments, share repurchases and any required long-term debt payments through the next several fiscal years. In addition, we have funds available from our commercial paper programs and the ability to obtain alternative sources of financing.ADDITIONAL INFORMATION
RECENT ACCOUNTING PRONOUNCEMENTS
For a summary of recently issuedinformation on accounting pronouncements which may be applicablethat have impacted or are expected to us,materially impact our consolidated financial condition, results of operations, or cash flows, see Note 1 to the Consolidated Financial Statements included in this report.our consolidated financial statements.
For a summary of recently adopted accounting pronouncements, see Note 2 to the Consolidated Financial Statements included in this report.
Item 3.Quantitative and Qualitative Disclosures about Market Risk.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Our exposure to market risksrisk results primarily from fluctuations in interest rates.rates in connection with our long-term debt portfolio. We are also exposed to risks from foreign currency exchange rate fluctuations on the translation of our foreign operations into U.S. dollars and on the purchase of goods by these foreign operations that are not denominated in their local currencies. Additionally, we may experience inflation and deflation related to our purchase and sale of certain commodity products. There have been no material changes to our exposure to market risks, including the types of instruments we use to manage our exposure to such risks, from those disclosed in our 2016the 2022 Form 10-K.
Item 4.Controls and Procedures.
Item 4. Controls and Procedures.
Under the direction and with the participation of the Company'sour Chief Executive Officer and Chief Financial Officer, the Companywe evaluated itsour disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended)Act) and concluded that itsour disclosure controls and procedures were effective as of October 29, 2017. There has been no change2023.
We are in the Company'sprocess of an ongoing business transformation initiative, which includes upgrading and migrating certain accounting and finance systems. We plan to continue to migrate additional business processes over the course of the next few years and have modified and will continue to modify the design and implementation of certain internal control processes as the transformation continues.
Except as described above, there were no other changes in our internal control over financial reporting during the fiscal quarter ended October 29, 2017,2023 that hashave materially affected, or isare reasonably likely to materially affect, the Company'sour internal control over financial reporting.

PART II.II – OTHER INFORMATION
Item 1.Legal Proceedings.
Item 1. Legal Proceedings.
Except as set forth below, there were no material changes during the third quarterfirst nine months of fiscal 20172023 to our disclosure in Item 3 of our 2016 Form 10-K.
For a description of the matters related to the Data Breach, see Note 7 to the Consolidated Financial Statements included in Part I, Item 1, "Financial Statements"3, “Legal Proceedings” of our 2022 Form 10-K.
SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to SEC regulations, the Company uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required.
As previously reported, in April 2021 we entered into a civil consent decree with the U.S. Department of Justice, the U.S. Environmental Protection Agency (“EPA”), which description is incorporated hereinand the states of Utah, Massachusetts, and Rhode Island. The decree required certain changes to lead-safe work practices in our installation services business and provided for stipulated penalties for failure to perform by reference.our third-party installers. In the first quarter of fiscal 2023, the EPA informed us that it believes we owe certain penalties for violations by our third-party installers of documentation requirements under the decree. We are engaged in discussions with the EPA regarding the basis for the stipulated penalties we allegedly owe under the decree. While we cannot predict the amount of stipulated penalties we may ultimately owe to the EPA under the decree, we do not expect it to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. Further, we expect to recoup any amount we ultimately owe from corresponding fines we levy against our third-party installers.
Fiscal Q3 2023 Form 10-Q21
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Item 1A.Risk Factors.
Item 1A. Risk Factors.
In addition to the other information set forth in this Form 10-Q,report, you should carefully consider the factors discussed under Part I, Item 1A, "Risk Factors"“Risk Factors” and elsewhere in our 2016the 2022 Form 10-K. These risks and uncertainties could materially and adversely affect our business, consolidated financial condition, results of operations, or cash flows. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently do not consider immaterialmaterial to our business. There have been no material changes in the risk factors discussed in our 2016the 2022 Form 10-K.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
(a) Item 2. Unregistered Sales of Equity Securities,
1.
During the third quarter of fiscal 2017, the Company issued 535 deferred stock units under The Home Depot, Inc. Non-Employee Directors' Deferred Stock Compensation Plan pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act") and Rule 506 of the SEC's Regulation D thereunder. The deferred stock units were credited to the accounts of those non-employee directors who elected to receive all or a portion of board retainers in the form of deferred stock units instead of cash during the third quarter of fiscal 2017. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in this plan.
2.
During the third quarter of fiscal 2017, the Company credited 1,188 deferred stock units to participant accounts under The Home Depot FutureBuilder Restoration Plan pursuant to an exemption from the registration requirements of the Securities Act for involuntary, non-contributory plans. The deferred stock units convert to shares of common stock on a one-for-one basis following the termination of service as described in this plan.
(b) Use of Proceeds, and Issuer Purchases of Equity SecuritiesSecurities.
InISSUER PURCHASES OF EQUITY SECURITIES
The following table presents the first quarter of fiscal 2017, the Board of Directors authorized a $15.0 billion share repurchase program. Through the end of the third quarter of fiscal 2017, the Company has repurchased shares of its common stock having a value of approximately $5.9 billion under this program. The number and average price of shares purchased in each fiscal month of the third quarter of fiscal 2017 are set forth in the table below:2023:
Period
Total Number of Shares Purchased(1)
Average Price Paid Per Share(1)(3)
Total Number of Shares Purchased as Part of Publicly Announced Program(2)
Dollar Value of Shares that May Yet Be Purchased Under the Program(2)(3)
July 31, 2023 – August 27, 20231,549,939 $328.70 1,546,953 $14,748,903,852 
August 28, 2023 – September 24, 20231,642,254 324.92 1,640,096 14,216,012,142 
September 25, 2023 – October 29, 20231,579,519 292.96 1,570,423 13,756,031,773 
4,771,712 315.57 4,757,472 
Period 
Total
Number of
Shares
Purchased(1)
 
Average Price
Paid
Per Share(1)
 
Total Number of
Shares Purchased as
Part of Publicly
Announced Program(2)
 
Dollar Value of
Shares that May Yet
Be Purchased 
Under the Program(2)
July 31, 2017 – August 27, 2017 4,007,643
 $151.26
 3,975,984
 $10,507,805,292
August 28, 2017 – September 24, 2017(3)
 8,368,921
 $156.65
 8,349,174
 $9,052,805,480
September 25, 2017 – October 29, 2017 3,214
 $163.99
 —
 $9,052,805,480
  12,379,778
 $154.91
 12,325,158
  
—————
(1)These amounts include repurchases pursuant to the Company's 1997 andour Omnibus Stock Incentive Plan, as Amended and Restated 2005May 19, 2022, and our 1997 Omnibus Stock Incentive Plans (the "Plans"Plan (collectively, the “Plans”). Under the Plans, participants may surrender shares as payment of applicable tax withholding on the vesting of restricted stock and deferred share awards.stock. Participants in the Plans may also exercise stock options by surrendering shares of common stock that the participants already own as payment of the exercise price. Shares so surrendered by participants in the Plans are repurchased pursuant to the terms of the Plans and applicable award agreement and not pursuant to publicly announced share repurchase programs.
(2) In the first quarter of fiscal 2017, theOn August 14, 2023, our Board of Directors authorizedapproved a $15.0 billion share repurchase programauthorization that replaced the previous authorization. The programauthorization of $15.0 billion, which was approved on August 18, 2022. This new authorization does not have a prescribed expiration date.
(3) InExcludes excise taxes incurred on share repurchases.

SALES OF UNREGISTERED SECURITIES
During the third quarter of fiscal 2017,2023, we issued 553 deferred stock units under The Home Depot, Inc. Nonemployee Directors’ Deferred Stock Compensation Plan pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of the SEC’s Regulation D thereunder. The deferred stock units were credited during the third quarter of fiscal 2023 to the accounts of those non-employee directors who elected to receive all or a portion of board retainers in the form of deferred stock units instead of cash. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in this plan.
During the third quarter of fiscal 2023, we credited 935 deferred stock units to participant accounts under the Restoration Plans pursuant to an exemption from the registration requirements of the Securities Act for involuntary, non-contributory plans. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in these plans.
Item 5. Other Information.
During the fiscal quarter ended October 29, 2023, no director or officer of the Company paid $1.2 billion under an ASR agreement and received an initial deliveryadopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of 6.7 million shares. The ASR agreement terminated on November 17, 2017, at which time the Company becameSEC’s Regulation S-K.

contractually entitled to receive an additional 0.7 million shares upon settlement. See Note 4 to the Consolidated Financial Statements included in this report.
Item 6.Exhibits
Fiscal Q3 2023 Form 10-Q22
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Table of Contents
Item 6. Exhibits.
Exhibits marked with an asterisk (*) are incorporated by reference to exhibits or appendices previously filed with the SEC, as indicated by the references in brackets. All other exhibits are filed or furnished herewith.
ExhibitDescription
*
*
[Form 10-Q filed on September 1, 2011, Exhibit 3.1]
*3.2
[Form 8-K filed on March 8, 2016,February 28, 2023, Exhibit 3.2]
12.1
†
15.1
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
101101.SCH
The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended October 29, 2017, formattedInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as inline XBRL and contained in XBRL (Extensible Business Reporting Language) and filed electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Earnings; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements.Exhibit 101)

—————
†    Management contract or compensatory plan or arrangement
Fiscal Q3 2023 Form 10-Q23
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
THE HOME DEPOT, INC.
(Registrant)
(Registrant)
By:/s/ EDWARD P. DECKER
By:/s/ CRAIG A. MENEAR
Craig A. Menear
Chairman,Edward P. Decker, Chair, President and Chief Executive Officer and
President

/s/ CAROL B. TOMÉ
Carol B. Tomé
Chief Financial Officer and
(Principal Executive Vice President – Corporate Services
Officer)
/s/ RICHARD V. MCPHAIL
Richard V. McPhail, Executive Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ KIMBERLY R. SCARDINO
Kimberly R. Scardino, Senior Vice President – Finance, Chief Accounting Officer and Controller (Principal Accounting Officer)
Date:November 20, 2017
(Date)2023

20
Fiscal Q3 2023 Form 10-Q24
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