Cover Page
Cover Page - shares | 9 Months Ended | |
Nov. 01, 2020 | Nov. 17, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Nov. 1, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-8207 | |
Entity Registrant Name | HOME DEPOT, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-3261426 | |
Entity Address, Address Line One | 2455 Paces Ferry Road | |
Entity Address, City or Town | Atlanta, | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339 | |
City Area Code | 770 | |
Local Phone Number | 433-8211 | |
Title of 12(b) Security | Common Stock, $0.05 Par Value Per Share | |
Trading Symbol | HD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,076,600,781 | |
Entity Central Index Key | 0000354950 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Nov. 01, 2020 | Feb. 02, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 14,652 | $ 2,133 |
Receivables, net | 2,666 | 2,106 |
Merchandise inventories | 16,155 | 14,531 |
Other current assets | 1,032 | 1,040 |
Total current assets | 34,505 | 19,810 |
Net property and equipment | 23,848 | 22,770 |
Operating lease right-of-use assets | 5,433 | 5,595 |
Goodwill | 2,236 | 2,254 |
Other assets | 897 | 807 |
Total assets | 66,919 | 51,236 |
Current liabilities: | ||
Short-term debt | 0 | 974 |
Accounts payable | 12,899 | 7,787 |
Accrued salaries and related expenses | 2,176 | 1,494 |
Sales taxes payable | 861 | 605 |
Deferred revenue | 2,664 | 2,116 |
Current installments of long-term debt | 2,491 | 1,839 |
Current operating lease liabilities | 842 | 828 |
Other accrued expenses | 3,462 | 2,732 |
Total current liabilities | 25,395 | 18,375 |
Long-term debt, excluding current installments | 32,831 | 28,670 |
Long-term operating lease liabilities | 4,880 | 5,066 |
Other long-term liabilities | 2,278 | 2,241 |
Total liabilities | 65,384 | 54,352 |
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,788 shares at November 1, 2020 and 1,786 shares at February 2, 2020; outstanding: 1,076 shares at November 1, 2020 and 1,077 shares at February 2, 2020 | 89 | 89 |
Paid-in capital | 11,312 | 11,001 |
Retained earnings | 56,892 | 51,729 |
Accumulated other comprehensive loss | (965) | (739) |
Treasury stock, at cost, 712 shares at November 1, 2020 and 709 shares at February 2, 2020 | (65,793) | (65,196) |
Total stockholders’ equity (deficit) | 1,535 | (3,116) |
Total liabilities and stockholders’ equity | $ 66,919 | $ 51,236 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Nov. 01, 2020 | Feb. 02, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, shares authorized (in shares) | 10,000,000,000 | 10,000,000,000 |
Common stock, shares, issued (in shares) | 1,788,000,000 | 1,786,000,000 |
Common stock, shares outstanding (in shares) | 1,076,000,000 | 1,077,000,000 |
Treasury stock, shares (in shares) | 712,000,000 | 709,000,000 |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 33,536 | $ 27,223 | $ 99,849 | $ 84,443 |
Cost of sales | 22,080 | 17,836 | 65,827 | 55,607 |
Gross profit | 11,456 | 9,387 | 34,022 | 28,836 |
Operating expenses: | ||||
Selling, general and administrative | 6,076 | 4,942 | 18,260 | 14,926 |
Depreciation and amortization | 528 | 498 | 1,567 | 1,470 |
Total operating expenses | 6,604 | 5,440 | 19,827 | 16,396 |
Operating income | 4,852 | 3,947 | 14,195 | 12,440 |
Interest and other (income) expense: | ||||
Interest and investment income | (11) | (22) | (37) | (56) |
Interest expense | 340 | 302 | 1,010 | 892 |
Interest and other, net | 329 | 280 | 973 | 836 |
Earnings before provision for income taxes | 4,523 | 3,667 | 13,222 | 11,604 |
Provision for income taxes | 1,091 | 898 | 3,213 | 2,843 |
Net earnings | $ 3,432 | $ 2,769 | $ 10,009 | $ 8,761 |
Basic weighted average common shares (in shares) | 1,073 | 1,089 | 1,074 | 1,096 |
Basic earnings per share (in dollars per share) | $ 3.20 | $ 2.54 | $ 9.32 | $ 7.99 |
Diluted weighted average common shares (in shares) | 1,078 | 1,094 | 1,078 | 1,100 |
Diluted earnings per share (in dollars per share) | $ 3.18 | $ 2.53 | $ 9.28 | $ 7.96 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 3,432 | $ 2,769 | $ 10,009 | $ 8,761 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 46 | (23) | (232) | (7) |
Cash flow hedges, net of tax | 1 | (2) | 6 | 4 |
Other | 0 | 0 | 0 | 5 |
Total other comprehensive income (loss) | 47 | (25) | (226) | 2 |
Comprehensive income | $ 3,479 | $ 2,744 | $ 9,783 | $ 8,763 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Paid-in Capital | Retained Earnings | Retained EarningsRevision of prior period, ASU, adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Revision of prior period, ASU, adjustment | Treasury Stock |
Balance at beginning of period at Feb. 03, 2019 | $ 89 | $ 10,578 | $ 46,423 | $ 26 | $ (772) | $ (31) | $ (58,196) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Shares issued under employee stock plans | 0 | 79 | ||||||
Stock-based compensation expense | 190 | |||||||
Repurchases of common stock | (100) | |||||||
Net earnings | $ 8,761 | 8,761 | ||||||
Cash dividends | (4,477) | |||||||
Other | (4) | |||||||
Foreign currency translation adjustments | (7) | |||||||
Cash flow hedges, net of tax | 4 | 4 | ||||||
Other | 5 | 5 | ||||||
Repurchases of common stock | (3,650) | |||||||
Balance at end of period at Nov. 03, 2019 | (1,082) | 89 | 10,747 | 50,729 | (801) | (61,846) | ||
Balance at beginning of period at Aug. 04, 2019 | 89 | 10,777 | 49,446 | (776) | (60,696) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Shares issued under employee stock plans | 0 | 20 | ||||||
Stock-based compensation expense | 50 | |||||||
Repurchases of common stock | (100) | |||||||
Net earnings | 2,769 | 2,769 | ||||||
Cash dividends | (1,486) | |||||||
Other | 0 | |||||||
Foreign currency translation adjustments | (23) | |||||||
Cash flow hedges, net of tax | (2) | (2) | ||||||
Other | 0 | 0 | ||||||
Repurchases of common stock | (1,150) | |||||||
Balance at end of period at Nov. 03, 2019 | (1,082) | 89 | 10,747 | 50,729 | (801) | (61,846) | ||
Balance at beginning of period at Feb. 02, 2020 | (3,116) | 89 | 11,001 | 51,729 | (739) | (65,196) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Shares issued under employee stock plans | 0 | 89 | ||||||
Stock-based compensation expense | 222 | |||||||
Repurchases of common stock | 0 | |||||||
Net earnings | 10,009 | 10,009 | ||||||
Cash dividends | (4,837) | |||||||
Other | (9) | |||||||
Foreign currency translation adjustments | (232) | |||||||
Cash flow hedges, net of tax | 6 | 6 | ||||||
Other | 0 | 0 | ||||||
Repurchases of common stock | (597) | |||||||
Balance at end of period at Nov. 01, 2020 | 1,535 | 89 | 11,312 | 56,892 | (965) | (65,793) | ||
Balance at beginning of period at Aug. 02, 2020 | 89 | 11,228 | 55,074 | (1,012) | (65,793) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Shares issued under employee stock plans | 0 | 16 | ||||||
Stock-based compensation expense | 68 | |||||||
Repurchases of common stock | 0 | |||||||
Net earnings | 3,432 | 3,432 | ||||||
Cash dividends | (1,614) | |||||||
Other | 0 | |||||||
Foreign currency translation adjustments | 46 | |||||||
Cash flow hedges, net of tax | 1 | 1 | ||||||
Other | 0 | 0 | ||||||
Repurchases of common stock | 0 | |||||||
Balance at end of period at Nov. 01, 2020 | $ 1,535 | $ 89 | $ 11,312 | $ 56,892 | $ (965) | $ (65,793) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Cash Flows from Operating Activities: | ||
Net earnings | $ 10,009 | $ 8,761 |
Reconciliation of net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 1,853 | 1,701 |
Stock-based compensation expense | 234 | 197 |
Changes in receivables, net | (580) | (298) |
Changes in merchandise inventories | (1,718) | (1,788) |
Changes in other current assets | 12 | (152) |
Changes in accounts payable and accrued expenses | 6,555 | 1,745 |
Changes in deferred revenue | 549 | 340 |
Changes in income taxes payable | 530 | 116 |
Changes in deferred income taxes | (86) | 107 |
Other operating activities | 57 | 64 |
Net cash provided by operating activities | 17,415 | 10,793 |
Cash Flows from Investing Activities: | ||
Capital expenditures | (1,503) | (1,891) |
Proceeds from sales of property and equipment | 55 | 21 |
Other investing activities | (3) | (10) |
Net cash used in investing activities | (1,451) | (1,880) |
Cash Flows from Financing Activities: | ||
Repayments of short-term debt, net | (974) | (644) |
Proceeds from long-term debt, net of discounts and premiums | 4,960 | 1,404 |
Repayments of long-term debt | (1,836) | (1,046) |
Repurchases of common stock | (791) | (3,909) |
Proceeds from sales of common stock | 185 | 185 |
Cash dividends | (4,837) | (4,477) |
Other financing activities | (132) | (120) |
Net cash used in financing activities | (3,425) | (8,607) |
Change in cash and cash equivalents | 12,539 | 306 |
Effect of exchange rate changes on cash and cash equivalents | (20) | 109 |
Cash and cash equivalents at beginning of period | 2,133 | 1,778 |
Cash and cash equivalents at end of period | 14,652 | 2,193 |
Supplemental Disclosures: | ||
Cash paid for interest, net of interest capitalized | 986 | 910 |
Cash paid for income taxes | $ 2,681 | $ 2,660 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Nov. 01, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements of The Home Depot, Inc. and its subsidiaries (the "Company," "Home Depot," "we," "our" or "us") have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2019 Form 10-K. Impact of COVID-19 The outbreak of the novel coronavirus COVID-19, which was declared a global pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies and has impacted and continues to impact our supply chain, operations, and customer demand. Even though the Company has taken measures to adapt to operating in this challenging environment, the pandemic could further affect our operations and the operations of our suppliers and vendors as a result of additional shelter-in-place and other governmental orders, facility closures, travel and logistics restrictions, and other factors as circumstances continue to evolve. In response to COVID-19, we expanded our associate pay and benefits through the third quarter of fiscal 2020 to provide additional paid time off, weekly bonuses and other benefits. These expanded pay and benefits are included in SG&A in the Consolidated Statements of Earnings and resulted in $354 million of additional expense for the third quarter of fiscal 2020 and $1.7 billion of additional expense for the first nine months of fiscal 2020. As of November 1, 2020, there were $311 million of additional expense included in accrued salaries and related expenses in the Consolidated Balance Sheets related to these expanded pay and benefits. Also in response to COVID-19, in March 2020 we took steps to further solidify our liquidity position by expanding our commercial paper program and corresponding revolving credit facility capacity, as well as issuing senior notes. See Note 4 for further discussion. Reclassifications Effective February 3, 2020, we reclassified cash flows relating to book overdrafts from financing to operating activities for all periods presented in the Consolidated Statements of Cash Flows. The amounts of these reclassifications were not material. There were no significant changes to our significant accounting policies as disclosed in the 2019 Form 10-K. Recently Adopted Accounting Pronouncements ASU No. 2018-15. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. On February 3, 2020, we adopted ASU No. 2018-15 with no material impact to our consolidated financial position, results of operations or cash flows. ASU No. 2017-04. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies how an entity is required to test goodwill for impairment. The amendments in ASU No. 2017-04 require goodwill impairment to be measured using the difference between the carrying amount and the fair value of the reporting unit and require the loss recognized to not exceed the total amount of goodwill allocated to that reporting unit. On February 3, 2020, we adopted ASU No. 2017-04 with no material impact to our consolidated financial position, results of operations or cash flows. ASU No. 2016-13. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The model replaces the probable, incurred loss model for those assets and broadens the information an entity must consider in developing its expected credit loss estimate for assets measured at amortized cost. On February 3, 2020, we adopted ASU No. 2016-13 with no material impact to our consolidated financial position, results of operations or cash flows. Recently Issued Accounting Pronouncements ASU 2020-04. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients 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 expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 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. We will adopt this standard when LIBOR is discontinued. We are evaluating the impact the new standard will have on our consolidated financial statements and related disclosures but do not anticipate a material impact. Recent accounting pronouncements pending adoption not discussed above or in the 2019 Form 10-K are either not applicable or will not have or are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
Net Sales
Net Sales | 9 Months Ended |
Nov. 01, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Net Sales | NET SALES No sales to an individual customer accounted for more than 10% of our net sales during the three and nine months ended November 1, 2020 and November 3, 2019. Net sales, classified by geography, follow: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Net sales – in the U.S. $ 30,845 $ 24,995 $ 92,468 $ 77,634 Net sales – outside the U.S. 2,691 2,228 7,381 6,809 Net sales $ 33,536 $ 27,223 $ 99,849 $ 84,443 Net sales by products and services follow: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Net sales – products $ 32,312 $ 25,887 $ 96,607 $ 80,599 Net sales – services 1,224 1,336 3,242 3,844 Net sales $ 33,536 $ 27,223 $ 99,849 $ 84,443 Major product lines and the related merchandising departments (and related services) follow: Major Product Line Merchandising Departments Building Materials Building Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing Décor Appliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint Hardlines Hardware, Indoor Garden, Outdoor Garden, and Tools Net sales by major product lines (and related services) follow: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Building Materials $ 12,594 $ 10,299 $ 34,966 $ 30,198 Décor 11,213 9,383 32,309 28,178 Hardlines 9,729 7,541 32,574 26,067 Net sales $ 33,536 $ 27,223 $ 99,849 $ 84,443 |
Property and Leases
Property and Leases | 9 Months Ended |
Nov. 01, 2020 | |
Leases [Abstract] | |
Property and Leases | PROPERTY AND LEASES Net Property and Equipment Net property and equipment includes accumulated depreciation and amortization of $23.5 billion as of November 1, 2020 and $22.1 billion as of February 2, 2020. Leases We lease certain retail locations, office space, warehouse and distribution space, equipment, and vehicles. We consider various factors such as market conditions and the terms of any renewal options that may exist to determine whether we will renew or replace the lease. A substantial majority of our leases have remaining lease terms of one certain to exercise the option to extend or early terminate a lease at commencement, we will include the respective terms in the related lease assets and liabilities. Real estate taxes, insurance, maintenance, and operating expenses applicable to the leased property are generally our obligations under our lease agreements. Certain of our property lease agreements contain residual value guarantees, which generally become due at the expiration of the lease term and are estimated as the greater of the fair value of the leased asset or a set minimum value. These residual value guarantees are primarily related to leases of facilities whose construction was funded by industrial revenue bonds. Our lease agreements do not contain any material restrictive covenants. Further, certain lease agreements include rental payments based on an index or rate and others include rental payments based on a percentage of sales. The Consolidated Balance Sheet location of assets and liabilities related to operating and finance leases follow: in millions Consolidated Balance Sheet Caption November 1, February 2, Assets: Operating lease assets Operating lease right-of-use assets $ 5,433 $ 5,595 Finance lease assets (1) Net property and equipment 2,471 934 Total lease assets $ 7,904 $ 6,529 Liabilities: Current: Operating lease liabilities Current operating lease liabilities $ 842 $ 828 Finance lease liabilities Current installments of long-term debt 143 84 Long-term: Operating lease liabilities Long-term operating lease liabilities 4,880 5,066 Finance lease liabilities Long-term debt, excluding current installments 2,590 1,081 Total lease liabilities $ 8,455 $ 7,059 ————— (1) Finance lease assets are recorded net of accumulated amortization of $755 million as of November 1, 2020 and $644 million as of February 2, 2020. The components of lease cost follow: Three Months Ended Nine Months Ended in millions Consolidated Statement of Earnings Caption November 1, November 3, November 1, November 3, Operating lease cost Selling, general and administrative $ 198 $ 211 $ 586 $ 626 Finance lease cost: Amortization of leased assets Depreciation and amortization 46 21 113 64 Interest on lease liabilities Interest expense 29 23 81 69 Short-term lease cost Selling, general and administrative 17 30 54 73 Variable lease cost Selling, general and administrative 76 53 202 175 Sublease income Selling, general and administrative (2) (3) (9) (10) Net lease cost $ 364 $ 335 $ 1,027 $ 997 The discount rate used to calculate the present value of lease payments is the rate implicit in the lease, when readily determinable. As the rate implicit in the lease is rarely readily determinable, we use a secured incremental borrowing rate as the discount rate for the present value of lease payments. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow: November 1, February 2, Weighted Average Remaining Lease Term (Years): Operating leases 10 10 Finance leases 15 12 Weighted Average Discount Rate: Operating leases 3.0 % 3.1 % Finance leases 5.5 % 10.4 % The approximate future minimum lease payments under operating and finance leases as of November 1, 2020 follow: in millions Operating Finance Fiscal 2020 $ 243 $ 62 Fiscal 2021 958 257 Fiscal 2022 855 259 Fiscal 2023 754 254 Fiscal 2024 647 253 Thereafter 3,200 2,518 Total lease payments 6,657 3,603 Less imputed interest 935 870 Present value of lease liabilities $ 5,722 $ 2,733 ————— Note: Future minimum lease payments do not include approximately $900 million of leases (undiscounted basis) that have not yet commenced. These leases will commence primarily between the remainder of fiscal 2020 and fiscal 2021 with lease terms of up to 20 years. Other lease information follows: Nine Months Ended in millions November 1, November 3, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 761 $ 750 Operating cash flows - finance leases 81 69 Financing cash flows - finance leases 87 46 Lease assets obtained in exchange for new operating lease liabilities 500 589 Lease assets obtained in exchange for new finance lease liabilities 1,662 101 |
Property and Leases | PROPERTY AND LEASES Net Property and Equipment Net property and equipment includes accumulated depreciation and amortization of $23.5 billion as of November 1, 2020 and $22.1 billion as of February 2, 2020. Leases We lease certain retail locations, office space, warehouse and distribution space, equipment, and vehicles. We consider various factors such as market conditions and the terms of any renewal options that may exist to determine whether we will renew or replace the lease. A substantial majority of our leases have remaining lease terms of one certain to exercise the option to extend or early terminate a lease at commencement, we will include the respective terms in the related lease assets and liabilities. Real estate taxes, insurance, maintenance, and operating expenses applicable to the leased property are generally our obligations under our lease agreements. Certain of our property lease agreements contain residual value guarantees, which generally become due at the expiration of the lease term and are estimated as the greater of the fair value of the leased asset or a set minimum value. These residual value guarantees are primarily related to leases of facilities whose construction was funded by industrial revenue bonds. Our lease agreements do not contain any material restrictive covenants. Further, certain lease agreements include rental payments based on an index or rate and others include rental payments based on a percentage of sales. The Consolidated Balance Sheet location of assets and liabilities related to operating and finance leases follow: in millions Consolidated Balance Sheet Caption November 1, February 2, Assets: Operating lease assets Operating lease right-of-use assets $ 5,433 $ 5,595 Finance lease assets (1) Net property and equipment 2,471 934 Total lease assets $ 7,904 $ 6,529 Liabilities: Current: Operating lease liabilities Current operating lease liabilities $ 842 $ 828 Finance lease liabilities Current installments of long-term debt 143 84 Long-term: Operating lease liabilities Long-term operating lease liabilities 4,880 5,066 Finance lease liabilities Long-term debt, excluding current installments 2,590 1,081 Total lease liabilities $ 8,455 $ 7,059 ————— (1) Finance lease assets are recorded net of accumulated amortization of $755 million as of November 1, 2020 and $644 million as of February 2, 2020. The components of lease cost follow: Three Months Ended Nine Months Ended in millions Consolidated Statement of Earnings Caption November 1, November 3, November 1, November 3, Operating lease cost Selling, general and administrative $ 198 $ 211 $ 586 $ 626 Finance lease cost: Amortization of leased assets Depreciation and amortization 46 21 113 64 Interest on lease liabilities Interest expense 29 23 81 69 Short-term lease cost Selling, general and administrative 17 30 54 73 Variable lease cost Selling, general and administrative 76 53 202 175 Sublease income Selling, general and administrative (2) (3) (9) (10) Net lease cost $ 364 $ 335 $ 1,027 $ 997 The discount rate used to calculate the present value of lease payments is the rate implicit in the lease, when readily determinable. As the rate implicit in the lease is rarely readily determinable, we use a secured incremental borrowing rate as the discount rate for the present value of lease payments. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow: November 1, February 2, Weighted Average Remaining Lease Term (Years): Operating leases 10 10 Finance leases 15 12 Weighted Average Discount Rate: Operating leases 3.0 % 3.1 % Finance leases 5.5 % 10.4 % The approximate future minimum lease payments under operating and finance leases as of November 1, 2020 follow: in millions Operating Finance Fiscal 2020 $ 243 $ 62 Fiscal 2021 958 257 Fiscal 2022 855 259 Fiscal 2023 754 254 Fiscal 2024 647 253 Thereafter 3,200 2,518 Total lease payments 6,657 3,603 Less imputed interest 935 870 Present value of lease liabilities $ 5,722 $ 2,733 ————— Note: Future minimum lease payments do not include approximately $900 million of leases (undiscounted basis) that have not yet commenced. These leases will commence primarily between the remainder of fiscal 2020 and fiscal 2021 with lease terms of up to 20 years. Other lease information follows: Nine Months Ended in millions November 1, November 3, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 761 $ 750 Operating cash flows - finance leases 81 69 Financing cash flows - finance leases 87 46 Lease assets obtained in exchange for new operating lease liabilities 500 589 Lease assets obtained in exchange for new finance lease liabilities 1,662 101 |
Debt and Derivative Instruments
Debt and Derivative Instruments | 9 Months Ended |
Nov. 01, 2020 | |
Debt Disclosure [Abstract] | |
Debt and Derivative Instruments | DEBT AND DERIVATIVE INSTRUMENTS Short-Term Debt In March 2020, we expanded our commercial paper programs from $3.0 billion to $6.0 billion. All of our short-term borrowings in the first nine months of fiscal 2020 were under these commercial paper programs, and the maximum amount outstanding at any time was $1.0 billion. In connection with these programs, we have back-up credit facilities with a consortium of banks for borrowings of up to $6.5 billion, which consist of (1) a 364-day $3.5 billion credit facility that was entered into in March 2020 in connection with our expanded commercial paper program and is scheduled to expire in March 2021, (2) a five-year $2.0 billion credit facility scheduled to expire in December 2022, and (3) a 364-day $1.0 billion credit facility scheduled to expire in December 2020. At November 1, 2020, there were no outstanding borrowings under our commercial paper programs. Long-Term Debt March 2020 Issuance. In March 2020, we issued four tranches of senior notes. • The first tranche consisted of $750 million of 2.50% senior notes due April 15, 2027 (the “2027 notes”) at a discount of $4 million. Interest on the 2027 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020. • The second tranche consisted of $1.5 billion of 2.70% senior notes due April 15, 2030 (the “2030 notes”) at a discount of $8 million. Interest on the 2030 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020. • The third tranche consisted of $1.25 billion of 3.30% senior notes due April 15, 2040 (the "2040 notes") at a discount of $11 million. Interest on the 2040 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020. • The fourth tranche consisted of $1.5 billion of 3.35% senior notes due April 15, 2050 (the "2050 notes") at a discount of $17 million (together with the 2027 notes, the 2030 notes and the 2040 notes, the "March 2020 issuance"). Interest on the 2050 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020. • Issuance costs for the March 2020 issuance totaled $36 million. The net proceeds of the March 2020 issuance were used for general corporate purposes, which included the repayment of outstanding senior notes that matured in June 2020 and the early repayment of outstanding senior notes that had a maturity date in September 2020. Redemption. The 2027 notes, 2030 notes, 2040 notes and 2050 notes may be redeemed by us at any time, in whole or in part, at the redemption price plus accrued interest up to the redemption date. The 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, as defined in the notes, occurs, holders of all notes have the right to require us to redeem those notes at 101% of the aggregate principal amount of the notes plus accrued interest up to the redemption date. We are generally not limited under the indentures governing the notes in our 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 our liquidity or capital resources. Derivative Instruments We use derivative and nonderivative financial instruments in the management of our exposure to fluctuations in foreign currency exchange rates and interest rates on certain long-term debt. We had outstanding interest rate swap agreements with combined notional amounts of $3.2 billion at November 1, 2020 and $2.1 billion at February 2, 2020. These agreements were accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. The fair values of these agreements were $176 million at November 1, 2020 and $120 million at February 2, 2020. At November 1, 2020 and February 2, 2020, we had outstanding foreign currency forward contracts accounted for as cash flow hedges, which hedge the variability of forecasted cash flows associated with certain payments made in our foreign operations. The notional amounts and the fair values of these contracts were not material. At February 2, 2020, we had outstanding foreign currency forward contracts accounted for as net investment hedges, with a combined notional amount of $1.2 billion. These agreements hedged against foreign currency exposure on our net investment in certain subsidiaries. At February 2, 2020, the fair values of these contracts were not material. These foreign currency forward contracts settled during the first quarter of fiscal 2020, resulting in an immaterial gain. In addition to our forward contracts, we also hedge a portion of our foreign currency risk by designating nonderivative foreign-currency-denominated intercompany debt as hedges of our net investment in certain of our foreign operations. As of November 1, 2020, we had outstanding intercompany debt instruments with a combined notional value of $1.2 billion that were designated as hedges of our net investment in our foreign operations. For the three and nine months ended November 1, 2020, $8 million of foreign currency losses and $15 million of foreign currency gains associated with this debt, respectively, were recorded as foreign currency translation adjustments in accumulated other comprehensive income (loss). As of February 2, 2020, the notional value of our nonderivative hedges and related foreign currency translation adjustments were immaterial. 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. Derivative assets and derivative liabilities are presented at their gross fair values in the Consolidated Balance Sheets. As of November 1, 2020, the cash collateral received by the Company related to derivative instruments under our collateral security arrangements was $141 million, which was recorded in other current liabilities in the Consolidated Balance Sheets. We did not receive any cash collateral as of February 2, 2020 or have any cash collateral posted with counterparties as of November 1, 2020 or February 2, 2020. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Nov. 01, 2020 | |
Equity [Abstract] | |
Stockholders' equity | STOCKHOLDERS' EQUITY Stock Rollforward A reconciliation of the number of shares of our common stock and dividends per share follows: shares in millions Three Months Ended Nine Months Ended November 1, November 3, November 1, November 3, Common stock: Balance at beginning of period 1,788 1,785 1,786 1,782 Shares issued under employee stock plans — — 2 3 Balance at end of period 1,788 1,785 1,788 1,785 Treasury stock: Balance at beginning of period (712) (689) (709) (677) Repurchases of common stock — (6) (3) (18) Balance at end of period (712) (695) (712) (695) Shares outstanding at end of period 1,076 1,090 1,076 1,090 Cash dividends per share $ 1.50 $ 1.36 $ 4.50 $ 4.08 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Nov. 01, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | 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. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities that are measured at fair value on a recurring basis follow: Fair Value at November 1, 2020 Using Fair Value at February 2, 2020 Using in millions Quoted Prices in Active Markets for Identical Assets Significant Significant Quoted Prices in Active Markets for Identical Assets Significant Significant Derivative agreements – assets $ — $ 207 $ — $ — $ 133 $ — Derivative agreements – liabilities — (31) — — — — Total $ — $ 176 $ — $ — $ 133 $ — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The carrying amounts of cash and cash equivalents, receivables, short-term debt, and accounts payable approximate fair value due to the short-term maturities of these financial instruments. Long-lived assets and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment or as the result of business acquisitions. During the third quarter of fiscal 2020, we completed our annual assessment of the recoverability of goodwill for our U.S., Canada and Mexico reporting units based on qualitative factors. As part of this analysis, we assessed the current environment to determine if there were any indicators of impairment as a result of the operating conditions resulting from COVID-19 or otherwise and concluded that while there have been events and circumstances in the macro-environment that have impacted us, we have not experienced any entity-specific indicators of impairment of goodwill or other indefinite-lived intangibles that would require us to perform a quantitative impairment assessment. Including goodwill as described above, we did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis as of November 1, 2020 or February 2, 2020. The aggregate fair values and carrying values of our senior notes follow: November 1, February 2, in millions Fair Value Carrying Fair Value Carrying Senior notes $ 39,398 $ 32,589 $ 34,102 $ 29,344 |
Weighted Average Common Shares
Weighted Average Common Shares | 9 Months Ended |
Nov. 01, 2020 | |
Earnings Per Share [Abstract] | |
Weighted Average Common Shares | WEIGHTED AVERAGE COMMON SHARES The reconciliation of our basic to diluted weighted average common shares follows: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Basic weighted average common shares 1,073 1,089 1,074 1,096 Effect of potentially dilutive securities 5 5 4 4 Diluted weighted average common shares 1,078 1,094 1,078 1,100 Anti-dilutive securities excluded from diluted weighted average common shares — — — — |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Nov. 01, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | COMMITMENTS AND CONTINGENCIESWe are involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Nov. 01, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTSOn November 16, 2020, we announced that we have entered into a definitive agreement to acquire HD Supply, a leading national distributor of MRO products in the multi-family and hospitality sectors. Under the terms of the merger agreement, a subsidiary of Home Depot will commence a cash tender offer to purchase all outstanding shares of HD Supply common stock for $56 per share, for a total enterprise value (including net cash) of approximately $8 billion. The completion of the acquisition is subject to customary closing conditions, including regulatory approvals and the tender of a majority of the shares of HD Supply common stock then outstanding (on a fully diluted basis), and is expected to be completed during our fiscal fourth quarter, which ends on January 31, 2021. The transaction is expected to be funded through cash on hand and debt. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Nov. 01, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation The accompanying consolidated financial statements of The Home Depot, Inc. and its subsidiaries (the "Company," "Home Depot," "we," "our" or "us") have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2019 Form 10-K. |
Reclassifications | Reclassifications Effective February 3, 2020, we reclassified cash flows relating to book overdrafts from financing to operating activities for all periods presented in the Consolidated Statements of Cash Flows. The amounts of these reclassifications were not material. |
Recently adopted and issued accounting pronouncements | Recently Adopted Accounting Pronouncements ASU No. 2018-15. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. On February 3, 2020, we adopted ASU No. 2018-15 with no material impact to our consolidated financial position, results of operations or cash flows. ASU No. 2017-04. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies how an entity is required to test goodwill for impairment. The amendments in ASU No. 2017-04 require goodwill impairment to be measured using the difference between the carrying amount and the fair value of the reporting unit and require the loss recognized to not exceed the total amount of goodwill allocated to that reporting unit. On February 3, 2020, we adopted ASU No. 2017-04 with no material impact to our consolidated financial position, results of operations or cash flows. ASU No. 2016-13. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The model replaces the probable, incurred loss model for those assets and broadens the information an entity must consider in developing its expected credit loss estimate for assets measured at amortized cost. On February 3, 2020, we adopted ASU No. 2016-13 with no material impact to our consolidated financial position, results of operations or cash flows. Recently Issued Accounting Pronouncements ASU 2020-04. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients 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 expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 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. We will adopt this standard when LIBOR is discontinued. We are evaluating the impact the new standard will have on our consolidated financial statements and related disclosures but do not anticipate a material impact. Recent accounting pronouncements pending adoption not discussed above or in the 2019 Form 10-K are either not applicable or will not have or are not expected to have a material impact on our consolidated financial position, results of operations or cash flows. |
Net Sales (Tables)
Net Sales (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of net sales, classified by geography | Net sales, classified by geography, follow: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Net sales – in the U.S. $ 30,845 $ 24,995 $ 92,468 $ 77,634 Net sales – outside the U.S. 2,691 2,228 7,381 6,809 Net sales $ 33,536 $ 27,223 $ 99,849 $ 84,443 |
Summary of net sales by products and services | Net sales by products and services follow: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Net sales – products $ 32,312 $ 25,887 $ 96,607 $ 80,599 Net sales – services 1,224 1,336 3,242 3,844 Net sales $ 33,536 $ 27,223 $ 99,849 $ 84,443 |
Summary of net sales by major product line | Major product lines and the related merchandising departments (and related services) follow: Major Product Line Merchandising Departments Building Materials Building Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing Décor Appliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint Hardlines Hardware, Indoor Garden, Outdoor Garden, and Tools Net sales by major product lines (and related services) follow: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Building Materials $ 12,594 $ 10,299 $ 34,966 $ 30,198 Décor 11,213 9,383 32,309 28,178 Hardlines 9,729 7,541 32,574 26,067 Net sales $ 33,536 $ 27,223 $ 99,849 $ 84,443 |
Property and Leases (Tables)
Property and Leases (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Leases [Abstract] | |
Schedule of assets and liabilities related to operating and finance leases | The Consolidated Balance Sheet location of assets and liabilities related to operating and finance leases follow: in millions Consolidated Balance Sheet Caption November 1, February 2, Assets: Operating lease assets Operating lease right-of-use assets $ 5,433 $ 5,595 Finance lease assets (1) Net property and equipment 2,471 934 Total lease assets $ 7,904 $ 6,529 Liabilities: Current: Operating lease liabilities Current operating lease liabilities $ 842 $ 828 Finance lease liabilities Current installments of long-term debt 143 84 Long-term: Operating lease liabilities Long-term operating lease liabilities 4,880 5,066 Finance lease liabilities Long-term debt, excluding current installments 2,590 1,081 Total lease liabilities $ 8,455 $ 7,059 ————— (1) Finance lease assets are recorded net of accumulated amortization of $755 million as of November 1, 2020 and $644 million as of February 2, 2020. |
Schedule of future minimum rental payments for operating leases | The approximate future minimum lease payments under operating and finance leases as of November 1, 2020 follow: in millions Operating Finance Fiscal 2020 $ 243 $ 62 Fiscal 2021 958 257 Fiscal 2022 855 259 Fiscal 2023 754 254 Fiscal 2024 647 253 Thereafter 3,200 2,518 Total lease payments 6,657 3,603 Less imputed interest 935 870 Present value of lease liabilities $ 5,722 $ 2,733 ————— Note: Future minimum lease payments do not include approximately $900 million of leases (undiscounted basis) that have not yet commenced. These leases will commence primarily between the remainder of fiscal 2020 and fiscal 2021 with lease terms of up to 20 years. |
Schedule of future minimum rental payments for financing leases | The approximate future minimum lease payments under operating and finance leases as of November 1, 2020 follow: in millions Operating Finance Fiscal 2020 $ 243 $ 62 Fiscal 2021 958 257 Fiscal 2022 855 259 Fiscal 2023 754 254 Fiscal 2024 647 253 Thereafter 3,200 2,518 Total lease payments 6,657 3,603 Less imputed interest 935 870 Present value of lease liabilities $ 5,722 $ 2,733 ————— Note: Future minimum lease payments do not include approximately $900 million of leases (undiscounted basis) that have not yet commenced. These leases will commence primarily between the remainder of fiscal 2020 and fiscal 2021 with lease terms of up to 20 years. |
Lease cost | The components of lease cost follow: Three Months Ended Nine Months Ended in millions Consolidated Statement of Earnings Caption November 1, November 3, November 1, November 3, Operating lease cost Selling, general and administrative $ 198 $ 211 $ 586 $ 626 Finance lease cost: Amortization of leased assets Depreciation and amortization 46 21 113 64 Interest on lease liabilities Interest expense 29 23 81 69 Short-term lease cost Selling, general and administrative 17 30 54 73 Variable lease cost Selling, general and administrative 76 53 202 175 Sublease income Selling, general and administrative (2) (3) (9) (10) Net lease cost $ 364 $ 335 $ 1,027 $ 997 The discount rate used to calculate the present value of lease payments is the rate implicit in the lease, when readily determinable. As the rate implicit in the lease is rarely readily determinable, we use a secured incremental borrowing rate as the discount rate for the present value of lease payments. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow: November 1, February 2, Weighted Average Remaining Lease Term (Years): Operating leases 10 10 Finance leases 15 12 Weighted Average Discount Rate: Operating leases 3.0 % 3.1 % Finance leases 5.5 % 10.4 % Other lease information follows: Nine Months Ended in millions November 1, November 3, Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows - operating leases $ 761 $ 750 Operating cash flows - finance leases 81 69 Financing cash flows - finance leases 87 46 Lease assets obtained in exchange for new operating lease liabilities 500 589 Lease assets obtained in exchange for new finance lease liabilities 1,662 101 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Equity [Abstract] | |
Reconciliation of the number of shares of common stock and dividends per share | A reconciliation of the number of shares of our common stock and dividends per share follows: shares in millions Three Months Ended Nine Months Ended November 1, November 3, November 1, November 3, Common stock: Balance at beginning of period 1,788 1,785 1,786 1,782 Shares issued under employee stock plans — — 2 3 Balance at end of period 1,788 1,785 1,788 1,785 Treasury stock: Balance at beginning of period (712) (689) (709) (677) Repurchases of common stock — (6) (3) (18) Balance at end of period (712) (695) (712) (695) Shares outstanding at end of period 1,076 1,090 1,076 1,090 Cash dividends per share $ 1.50 $ 1.36 $ 4.50 $ 4.08 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities that are measured at fair value on a recurring basis follow: Fair Value at November 1, 2020 Using Fair Value at February 2, 2020 Using in millions Quoted Prices in Active Markets for Identical Assets Significant Significant Quoted Prices in Active Markets for Identical Assets Significant Significant Derivative agreements – assets $ — $ 207 $ — $ — $ 133 $ — Derivative agreements – liabilities — (31) — — — — Total $ — $ 176 $ — $ — $ 133 $ — |
Assets and liabilities measured at fair value on a nonrecurring basis | The aggregate fair values and carrying values of our senior notes follow: November 1, February 2, in millions Fair Value Carrying Fair Value Carrying Senior notes $ 39,398 $ 32,589 $ 34,102 $ 29,344 |
Weighted Average Common Shares
Weighted Average Common Shares (Tables) | 9 Months Ended |
Nov. 01, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of shares | The reconciliation of our basic to diluted weighted average common shares follows: Three Months Ended Nine Months Ended in millions November 1, November 3, November 1, November 3, Basic weighted average common shares 1,073 1,089 1,074 1,096 Effect of potentially dilutive securities 5 5 4 4 Diluted weighted average common shares 1,078 1,094 1,078 1,100 Anti-dilutive securities excluded from diluted weighted average common shares — — — — |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Recently Adopted and Issued Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Feb. 02, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative | $ 6,076 | $ 4,942 | $ 18,260 | $ 14,926 | |
Accrued salaries and related expenses | 2,176 | 2,176 | $ 1,494 | ||
COVID-19 employee benefits | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative | 354 | 1,700 | |||
Accrued salaries and related expenses | $ 311 | $ 311 |
Net Sales (Details)
Net Sales (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 33,536 | $ 27,223 | $ 99,849 | $ 84,443 |
Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 32,312 | 25,887 | 96,607 | 80,599 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 1,224 | 1,336 | 3,242 | 3,844 |
Building Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,594 | 10,299 | 34,966 | 30,198 |
Décor | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 11,213 | 9,383 | 32,309 | 28,178 |
Hardlines | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 9,729 | 7,541 | 32,574 | 26,067 |
In the U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 30,845 | 24,995 | 92,468 | 77,634 |
Outside the U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 2,691 | $ 2,228 | $ 7,381 | $ 6,809 |
Property and Leases - Narrative
Property and Leases - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Nov. 01, 2020 | Feb. 02, 2020 | |
Leases [Abstract] | ||
Leases, not yet commenced | $ 900 | |
Lessor, Lease, Description [Line Items] | ||
Accumulated depreciation and amortization | $ 23,500 | $ 22,100 |
Option to terminate | 5 years | |
Maximum | ||
Lessor, Lease, Description [Line Items] | ||
Remaining lease terms | 20 years | |
Option to extend | 5 years | |
Minimum | ||
Lessor, Lease, Description [Line Items] | ||
Remaining lease terms | 1 year |
Property and Leases - Schedule
Property and Leases - Schedule of assets and liabilities related to operating and finance leases (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Feb. 02, 2020 |
Assets | ||
Operating lease assets | $ 5,433 | $ 5,595 |
Finance lease assets | 2,471 | 934 |
Total lease assets | 7,904 | 6,529 |
Current: | ||
Operating lease liabilities | 842 | 828 |
Finance lease liabilities | 143 | 84 |
Long-term: | ||
Operating lease liabilities | 4,880 | 5,066 |
Finance lease liabilities | 2,590 | 1,081 |
Total lease liabilities | 8,455 | 7,059 |
Finance lease asset accumulated amortization | $ 755 | $ 644 |
Property and Leases - Component
Property and Leases - Components of Lease Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Amortization of leased assets | $ 46 | $ 21 | $ 113 | $ 64 |
Interest on lease liabilities | 29 | 23 | 81 | 69 |
Net lease cost | 364 | 335 | 1,027 | 997 |
Selling, general and administrative | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease cost | 198 | 211 | 586 | 626 |
Short-term lease cost | 17 | 30 | 54 | 73 |
Variable lease cost | 76 | 53 | 202 | 175 |
Sublease income | $ (2) | $ (3) | $ (9) | $ (10) |
Property and Leases - Schedul_2
Property and Leases - Schedule of Lease Terms and Discount Rates (Details) | Nov. 01, 2020 | Feb. 02, 2020 |
Weighted Average Remaining Lease Term (Years): | ||
Operating leases | 10 years | 10 years |
Finance leases | 15 years | 12 years |
Weighted Average Discount Rate: | ||
Operating leases | 3.00% | 3.10% |
Finance leases | 5.50% | 10.40% |
Property and Leases - Schedules
Property and Leases - Schedules of Future Minimum Lease Payments Under Operating and Finance Leases (Details) $ in Millions | 9 Months Ended |
Nov. 01, 2020USD ($) | |
Operating Leases | |
Fiscal 2020 | $ 243 |
Fiscal 2021 | 958 |
Fiscal 2022 | 855 |
Fiscal 2023 | 754 |
Fiscal 2024 | 647 |
Thereafter | 3,200 |
Total lease payments | 6,657 |
Less imputed interest | 935 |
Present value of lease liabilities | 5,722 |
Finance Leases | |
Fiscal 2020 | 62 |
Fiscal 2021 | 257 |
Fiscal 2022 | 259 |
Fiscal 2023 | 254 |
Fiscal 2024 | 253 |
Thereafter | 2,518 |
Total lease payments | 3,603 |
Less imputed interest | 870 |
Present value of lease liabilities | $ 2,733 |
Maximum | |
Finance Leases | |
Remaining lease terms | 20 years |
Minimum | |
Finance Leases | |
Remaining lease terms | 1 year |
Property and Leases - Other Lea
Property and Leases - Other Lease Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Nov. 01, 2020 | Nov. 03, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows - operating leases | $ 761 | $ 750 |
Operating cash flows - finance leases | 81 | 69 |
Financing cash flows - finance leases | 87 | 46 |
Lease assets obtained in exchange for new operating lease liabilities | 500 | 589 |
Lease assets obtained in exchange for new finance lease liabilities | $ 1,662 | $ 101 |
Debt and Derivative Instrumen_2
Debt and Derivative Instruments - Short-term Debt (Details) - USD ($) | 9 Months Ended | ||
Nov. 01, 2020 | Mar. 31, 2020 | Feb. 29, 2020 | |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity of credit facility | $ 6,000,000,000 | $ 3,000,000,000 | |
Maximum amount outstanding during period | $ 1,000,000,000 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity of credit facility | 6,500,000,000 | ||
Revolving Credit Facility | Back-up Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity of credit facility | 3,500,000,000 | ||
Revolving Credit Facility | 5-year Back-up Credit Facility | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity of credit facility | $ 1,000,000,000 | ||
Expiration period | 364 days | ||
Revolving Credit Facility | Five year back up credit facility expiring December 2020 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity of credit facility | $ 2,000,000,000 | ||
Expiration period | 5 years |
Debt and Derivative Instrumen_3
Debt and Derivative Instruments - Long-term Debt (Details) | 9 Months Ended | |
Nov. 01, 2020 | Mar. 31, 2020USD ($)tranche | |
Debt Instrument [Line Items] | ||
Debt instrument redemption price (in percentage) | 100.00% | |
Debt instrument change of control redemption price (in percentage) | 101.00% | |
Senior notes | ||
Debt Instrument [Line Items] | ||
Number of tranches of senior notes | tranche | 4 | |
Issuance costs | $ 36,000,000 | |
Senior notes | 2.50% Senior Notes Due April, 2027, First Tranche | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 750,000,000 | |
Debt instrument interest rate (in percentage) | 2.50% | |
Debt instrument unamortized discount | $ 4,000,000 | |
Senior notes | 2.70% Senior Notes Due April, 2030, Second Tranche | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 1,500,000,000 | |
Debt instrument interest rate (in percentage) | 2.70% | |
Debt instrument unamortized discount | $ 8,000,000 | |
Senior notes | 3.30% Senior Notes Due April, 2040, Third Tranche | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 1,250,000,000 | |
Debt instrument interest rate (in percentage) | 3.30% | |
Debt instrument unamortized discount | $ 11,000,000 | |
Senior notes | 3.35% Senior Notes Due April, 2050, Fourth Tranche | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 1,500,000,000 | |
Debt instrument interest rate (in percentage) | 3.35% | |
Debt instrument unamortized discount | $ 17,000,000 |
Debt and Derivative Instrumen_4
Debt and Derivative Instruments - Derivative Instruments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Feb. 02, 2020 | |
Derivative [Line Items] | |||||
Other liabilities, current | $ 141,000,000 | $ 141,000,000 | $ 0 | ||
Foreign currency translation adjustments | 46,000,000 | $ (23,000,000) | (232,000,000) | $ (7,000,000) | |
Interest rate swap | Fair value hedging | |||||
Derivative [Line Items] | |||||
Notional amount | 3,200,000,000 | 3,200,000,000 | 2,100,000,000 | ||
Fair value agreements | 176,000,000 | 176,000,000 | 120,000,000 | ||
Forward Contracts | Net investment hedging | |||||
Derivative [Line Items] | |||||
Notional amount | $ 1,200,000,000 | ||||
Foreign currency hedge | Net investment hedging | |||||
Derivative [Line Items] | |||||
Notional amount | 1,200,000,000 | 1,200,000,000 | |||
Foreign currency translation adjustments | $ 8,000,000 | $ 15,000,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Reconciliation of the Number of Shares of Common Stock and Dividends Per Share (Details) - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended | |||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | Feb. 02, 2020 | |
Common stock: | |||||
Balance at beginning of period (in shares) | 1,788 | 1,785 | 1,786 | 1,782 | |
Shares issued under employee stock plans (in shares) | 0 | 0 | 2 | 3 | |
Balance at end of period (in shares) | 1,788 | 1,785 | 1,788 | 1,785 | |
Treasury stock: | |||||
Balance at beginning of period (in shares) | (712) | (689) | (709) | (677) | |
Repurchases of common stock (in shares) | 0 | (6) | (3) | (18) | |
Balance at end of period (in shares) | (712) | (695) | (712) | (695) | |
Shares outstanding at end of period (in shares) | 1,076 | 1,090 | 1,076 | 1,090 | 1,077 |
Cash dividends per share (in usd per share) | $ 1.50 | $ 1.36 | $ 4.50 | $ 4.08 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Fair value measurements recurring - USD ($) $ in Millions | Nov. 01, 2020 | Feb. 02, 2020 |
Fair value inputs level 1 | ||
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items] | ||
Derivative agreements – assets | $ 0 | $ 0 |
Derivative agreements – liabilities | 0 | 0 |
Total | 0 | 0 |
Fair value inputs level 2 | ||
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items] | ||
Derivative agreements – assets | 207 | 133 |
Derivative agreements – liabilities | (31) | 0 |
Total | 176 | 133 |
Fair value inputs level 3 | ||
Fair Value, Assets and Liabilities Measured on a Recurring Basis [Line Items] | ||
Derivative agreements – assets | 0 | 0 |
Derivative agreements – liabilities | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value Measurements (Asse_2
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis) (Details) - USD ($) $ in Millions | Nov. 01, 2020 | Feb. 02, 2020 |
Fair Value, Assets and Liabilities Measured on a Nonrecurring Basis [Line Items] | ||
Carrying value of senior notes | $ 32,589 | $ 29,344 |
Senior notes | Fair Value measurements nonrecurring | Fair value inputs level 1 | ||
Fair Value, Assets and Liabilities Measured on a Nonrecurring Basis [Line Items] | ||
Fair value of senior notes | $ 39,398 | $ 34,102 |
Weighted Average Common Share_2
Weighted Average Common Shares (Reconciliation of Basic to Diluted Weighted Average Common Shares) (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2020 | Nov. 03, 2019 | Nov. 01, 2020 | Nov. 03, 2019 | |
Reconciliation of Basic to Diluted Weighted Average Common Shares: | ||||
Basic weighted average common shares (in shares) | 1,073 | 1,089 | 1,074 | 1,096 |
Effect of potentially dilutive securities (in shares) | 5 | 5 | 4 | 4 |
Diluted weighted average common shares (in shares) | 1,078 | 1,094 | 1,078 | 1,100 |
Anti-dilutive securities excluded from diluted weighted average common shares (in shares) | 0 | 0 | 0 | 0 |
Subsequent Events (Details)
Subsequent Events (Details) - HD Supply Holdings, Inc. - Subsequent Event $ / shares in Units, $ in Billions | Nov. 16, 2020USD ($)$ / shares |
Subsequent Event [Line Items] | |
Consideration transferred | $ | $ 8 |
Share price (in usd per share) | $ / shares | $ 56 |