Home Depot (HD) 10-K risk factor changes: FY2019 vs FY2018

Our industry is highly competitive and [removed: rapidly] evolving.

As a result, we face competition for our products and services from a variety of retailers, suppliers, and service providers, ranging from traditional brick-and-mortar, to [added: multichannel, to exclusively online.]

We compete, both in-store and online, primarily based on customer experience, price, quality, availability, [added: product] assortment, and delivery options.

Our customers routinely use [removed: computers, tablets, smartphones and other mobile] [added: a variety of electronic] devices [added: and platforms] to shop online, read product reviews, and compare prices, products, and delivery options, regardless of [removed: whether they shop in-store] [added: where] or [removed: online.][added: how they shop.]

Intense competitive pressures from one or more of our competitors, such as through aggressive promotional pricing or liquidation events, or our inability to adapt effectively and quickly to a changing competitive landscape, could [added: adversely] affect our prices, our margins, or demand for our products and services.

The success of our business depends in part on our ability to identify and respond promptly to evolving trends in demographics; consumer preferences, expectations and needs; and unexpected weather conditions or natural disasters, while also managing appropriate inventory levels [added: in our stores] and [added: distribution or fulfillment centers and] maintaining an excellent customer experience.

As noted above, customers routinely use technology and [removed: mobile] [added: a variety of electronic] devices [added: and platforms] to rapidly compare products and prices, determine real-time product availability, and purchase products.

We have our BOSS, BOPIS, BODFS and direct fulfillment delivery options, but we cannot guarantee that these or future programs will be [added: maintained and] implemented successfully or that we will be able to meet customer expectations on delivery times, options and costs.

We must also maintain a safe store environment for our customers and [removed: associates.][added: associates, as well as to protect against loss or theft of our inventory (also called "shrink").]

Failure to [added: improve and] maintain our stores, utilize our store space effectively, and offer a safe shopping environment; to provide a compelling online presence; to timely identify or respond to changing consumer preferences, expectations and home improvement [removed: needs;] [added: needs and maintain appropriate inventory;] to provide quick and low-price or free delivery alternatives; to differentiate the customer experience for our primary customer groups; and to effectively [added: implement an increasingly localized merchandising assortment could adversely affect our relationship with customers, our reputation, the demand for our products and services, and our market share.]

Our ability to control labor costs is subject to numerous external factors, including prevailing wage rates and health and other insurance costs, as well as the impact of legislation or regulations governing labor relations, minimum wage, [removed: or] [added: and] healthcare benefits.

An inability to provide wages and/or benefits that are competitive within the markets in which we operate could adversely affect our ability [removed: to retain and attract employees.]

[removed: Conversely,] [added: Further,] changes in market compensation rates may adversely affect our labor costs.

In managing our business, we also rely heavily on the integrity of, security [removed: of] [added: of,] and consistent access [removed: to] [added: to,] this [added: operational and financial] data for information such as sales, customer data, merchandise ordering, inventory replenishment and order fulfillment.

For these information technology systems and processes to operate effectively, we or our service providers must [removed: periodically] maintain and update them.

Our systems and the third-party systems [removed: on] [added: with] which we [removed: rely] [added: interact] are subject to damage or interruption from a number of causes, including power outages; computer and telecommunications failures; computer viruses; security breaches; cyber-attacks, including the use of [added: malicious codes, worms, phishing and denial of service attacks, and] ransomware; catastrophic events such as fires, floods, earthquakes, tornadoes, or hurricanes; acts of war or terrorism; and design or usage errors by our associates, contractors or third-party service providers.

Through our information technology [removed: developments,] [added: systems,] we are able to provide an improved overall shopping and interconnected retail experience that empowers our customers to shop and interact with us from [removed: computers, tablets, smartphones] [added: a variety of electronic devices] and [removed: other mobile devices.][added: platforms.]

We use our [removed: websites and our mobile app] [added: digital platforms] both as sales channels for our products and also as methods of providing inspiration, as well as product, project, and other relevant information to our customers to drive [removed: both] [added: sales, regardless of whether they occur] in-store [removed: and online sales.][added: or online.]

[removed: Multichannel retailing] [added: The retail industry] is continually evolving and expanding, and we must effectively respond to [added: new developments and] changing customer preferences [removed: and new developments.][added: with respect to an interconnected experience.]

We continually seek to enhance all of our online properties to provide an attractive, user-friendly interface for our [removed: customers, as evidenced by our recent re-platform of our homedepot.com website.][added: customers.]

Disruptions, failures or other performance issues with these customer-facing technology systems could impair the benefits that they provide to our [removed: online and in-store] business and negatively affect our relationship with our customers.

We [removed: recently announced our intent to] [added: are] substantially [removed: increase] [added: increasing] our investments to create the One Home Depot experience, including significant investments over the next [removed: five] [added: several] years to build [removed: a] [added: the] One Home Depot Supply Chain.

These initiatives are designed to streamline our operations to allow our associates to continue to provide high-quality service to our [removed: customers,] [added: customers;] simplify customer [removed: interaction,] [added: interactions;] provide our customers with a more interconnected retail [removed: experience,] [added: experience;] and create the fastest, most efficient delivery network for home improvement products.

[added: The cost] and potential [removed: problems] [added: problems, defects of design] and interruptions associated with the implementation of these initiatives, including those associated with managing third-party service providers, employing new web-based tools and services, [added: implementing new technology, implementing] and [added: restructuring support systems and processes, and] addressing impacts on inventory levels, could disrupt or reduce the efficiency of our operations in the near term, lead to product availability issues, and impact profitability.

In addition, our store and interconnected retail initiatives, [removed: enhanced supply chain,] [added: One Home Depot Supply Chain,] and new or upgraded information technology systems might not provide the anticipated benefits, it might take longer than expected to realize the anticipated benefits, or the initiatives might fail altogether, each of which could adversely impact our competitive position and our financial condition, results of operations, or cash flows.

Our business, like that of most retailers, involves the receipt, [removed: storage] [added: storage, management] and transmission of customers’ personal information, preferences, and payment card information, as well as other confidential information, such as personal information about our associates and our suppliers and confidential Company information.

Our information systems, and those of our third-party service providers and vendors, are vulnerable to an increasing threat of continually evolving data [removed: protection and cybersecurity risks.]

Unauthorized parties [removed: may] [added: have in the past gained access, and will continue to] attempt to gain access [removed: to] [added: to,] these systems or our information through fraud or other means of deceiving our associates, third-party service providers or vendors.

We have implemented and regularly review and update [added: our] systems, processes, and procedures to protect against unauthorized access to or use of data and to prevent data loss.

As we experienced in connection with the data breach we discovered in the third quarter of fiscal [removed: 2014 (the "Data Breach"),] [added: 2014,] any significant compromise or breach of our data security, whether external or internal, or misuse of customer, associate, supplier or Company data, could result in significant costs, including costs to investigate and remediate, as well as lost sales, fines, lawsuits, and damage to our reputation.

In addition, [removed: as] the regulatory environment related to [removed: information security,] data [removed: collection and use, and] privacy [removed: becomes increasingly rigorous,] [added: and cybersecurity is constantly changing,] with new and [removed: constantly changing] [added: increasingly rigorous] requirements applicable to our business, [removed: compliance with those] [added: and the implementation of these] requirements [removed: could also result in significant costs.][added: has become more complex.]

We accept payments using a variety of methods, including cash, checks, credit and debit cards, PayPal, our [removed: private label credit cards,] [added: PLCCs,] an installment loan program, trade credit, and gift cards, and we may offer new payment options over time.

Acceptance of these payment options subjects us to rules, regulations, contractual obligations and compliance requirements, including payment network rules and operating guidelines, data security standards [added: and certification requirements, and rules governing electronic funds transfers.]

Our financial performance depends significantly on the stability of the [removed: housing, residential construction] [added: housing] and home improvement markets, as well as general economic conditions, including changes in gross domestic product.

Adverse conditions in or uncertainty about these markets, the economy or the political climate could adversely impact our customers’ confidence or financial condition, causing them to [removed: determine not to purchase] [added: decide against purchasing] home improvement products and services, causing them to delay purchasing decisions, or impacting their ability to pay for products and services.

Failure to achieve and maintain a high level of product and service quality [added: and safety] could damage our image with [removed: customers] [added: customers, expose us to litigation,] and negatively impact our sales and results of operations.

If our product and service offerings do not meet applicable safety standards or our customers’ expectations [added: regarding safety or quality, we could experience lost sales and increased costs and be exposed to legal, financial and reputational risks, as well as governmental enforcement actions.]

Actual, potential or perceived product safety [removed: concerns] [added: concerns, including health-related concerns,] could expose us to litigation, as well as government enforcement actions, and result in costly product recalls and other liabilities.

If we do not have adequate contractual indemnification or insurance available, such claims could have [removed: a material] [added: an] adverse effect on our business, financial condition and results of operations.

All of our vendors and service providers must comply with our [removed: SER] [added: responsible sourcing] standards, which cover a variety of expectations across multiple areas of social compliance, including supply chain transparency, sources of supply, and child and forced labor.

Our business, results of operations, and financial condition are subject to numerous risks and uncertainties.

In connection with any investment decision with respect to our securities, you should carefully consider the following risk factors, as well as the other information contained in this report and our other filings with the SEC.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

Should any of these risks materialize, our business, results of operations, financial condition and future prospects could be negatively impacted, which in turn could affect the trading value of our securities.

The internet facilitates competitive entry, price transparency, and comparison shopping, increasing the level of competition we face.

The One Home Depot initiative will require significant investment in our operations and systems, as well as the development and execution of new processes, systems and support.

If we are unable to effectively manage the volume and nature of these changes, our business operations and financial results could be materially and adversely affected.

In addition, to support our strategic initiatives, including One Home Depot Supply Chain, and the related technology investments needed to implement our strategic investments, we must attract and retain a large number of skilled professionals, including technology professionals.

The market for these professionals is increasingly competitive.

to retain and attract associates.

protection and cybersecurity risks.

Maintaining our compliance with those requirements may require significant effort and cost, and failure to comply with applicable requirements could subject us to fines, sanctions, governmental investigations, or lawsuits.

Our business is subject to seasonal influences, and uncharacteristic or significant weather conditions, alone or together with natural disasters, could impact our operations.

Natural disasters, such as hurricanes and tropical storms, fires, floods, tornadoes, and earthquakes; unseasonable, or unexpected or extreme weather conditions; or similar disruptions and catastrophic events can affect consumer spending and confidence and consumers' disposable income, particularly with respect to home improvement or construction projects, and could have an adverse effect on our financial performance.

These types of events can also adversely affect our work force and prevent associates and customers from reaching our stores and other facilities.

They can also, temporarily or on a long-term basis, disrupt or disable operations of stores, support centers, and portions of our supply chain and distribution network, including causing reductions in the availability of inventory and disruption of utility services.

In addition, these events may affect our information systems, resulting in disruption to various aspects of our operations, including our ability to transact with customers and fulfill orders and to communicate with our stores.

Unseasonable, unexpected or extreme weather conditions such as excessive precipitation, warm temperatures during the winter season, or prolonged or extreme periods of warm or cold temperatures could render a portion of our inventory incompatible with customer needs.

As a consequence of these or other catastrophic or uncharacteristic events, we may experience interruption to our operations, increased costs, or losses of property, equipment or inventory, which would adversely affect our revenue and profitability.

During fiscal 2018, additional guidance related to the Tax Act was issued by the U.S. Department of the Treasury and the IRS.

The U.S.

For example, there are growing concerns regarding trade relations between the U.S. and China, as both countries have indicated their intentions to impose significant tariffs on the importation of certain product categories, as well as concerns related to the renegotiation of certain other trade agreements, including the North American Free Trade Agreement.

As a significant portion of our retail products are sourced, directly or indirectly, outside of the U.S., major changes in tax or trade policies, tariffs or trade relations could adversely impact the cost of, demand for, and profitability of retail product sales in our U.S. locations.

Other countries may also change their business and trade policies in anticipation of or in response to increased import tariffs and other changes in U.S. trade policy and regulations.

The implementation of new accounting standards could also require certain systems, internal process and other changes that could increase our operating costs.

course of business.

The risks and uncertainties described below could materially and adversely affect our business, financial condition and results of operations and could cause actual results to differ materially from our expectations and projections.

There also may be other factors that we cannot anticipate or that are not described in this report generally because we do not currently perceive them to be material.

Those factors could cause results to differ materially from our expectations.

multichannel, to exclusively online.

implement an increasingly localized merchandising assortment could adversely affect our relationship with customers, our reputation, the demand for our products and services, and our market share.

The cost

and certification requirements, and rules governing electronic funds transfers.

regarding safety or quality, we could experience lost sales and increased costs and be exposed to legal, financial and reputational risks, as well as governmental enforcement actions.

In fiscal 2015, we acquired Interline, which we believe has enhanced our ability to serve our Pros.

In fiscal 2017, we acquired Compact Power and The Company Store to expand our product and service offerings.

The ultimate impact of the Tax Act on us may differ from our current estimates due to changes in interpretations and assumptions made by us as well as the issuance of any further regulations or guidance that may alter the operation of the U.S. federal income tax code.

As we complete our analysis of the Tax Act, we may make adjustments to provisional amounts that we have recorded that may impact our provision for income taxes in the period in which the adjustments are made.

| • | [Executive [removed: Summary](#s1DBC648A07A75EA8B166D30D8030A5D0)] [added: Summary](#sE2751374AEBA5EA5AB32C601796508DD)] |

| • | [Liquidity and Capital [removed: Resources](#seb97f9937fe049878d1e98cca644ae32)] [added: Resources](#sE06514A5786A5CF19E2E0745C713A319)] |

| • | [Critical Accounting [removed: Policies](#s7AEC7C90CA4D5065B18BE63A5996C469)] [added: Policies](#sA328471F0B395D19A8493F3C8A87CD00)] |

| [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | |

| Net sales | $ | [removed: 100,904] [added: 108,203] | | | $ | [removed: 94,595] [added: 100,904] | | | $ | [removed: 88,519] [added: 94,595] | |

| Net earnings | [removed: 8,630] [added: 11,121] | | | | [removed: 7,957] [added: 8,630] | | | | [removed: 7,009] [added: 7,957] | | |

| Diluted earnings per share | [removed: 7.29] [added: $] | [added: 9.73] | | | [removed: 6.45] [added: $] | [added: 7.29] | | | [removed: 5.46] [added: $] | [added: 6.45] | |

| Net cash provided by operating activities | $ | [removed: 12,031] [added: 13,038] | | | $ | [removed: 9,783] [added: 12,031] | | | $ | [removed: 9,373] [added: 9,783] | |

| Proceeds from long-term debt, net of discounts | [removed: 2,991] [added: 3,466] | | | | [removed: 4,959] [added: 2,991] | | | | [removed: 3,991] [added: 4,959] | | |

| Repayments of long-term debt | [removed: 543] [added: 1,209] | | | | [removed: 3,045] [added: 543] | | | | [removed: 39] [added: 3,045] | | |

| Repurchases of common stock | [removed: 8,000] [added: 9,963] | | | | [removed: 6,880] [added: 8,000] | | | | [removed: 7,000] [added: 6,880] | | |

We reported net sales of [removed: $100.9] [added: $108.2] billion in fiscal [removed: 2017.][added: 2018.]

[removed: | • | Results] [added: The effective income tax rate] for fiscal 2017 also reflected a [removed: benefit of] $106 million [added: benefit] to our provision for income taxes for share-based payment awards [removed: resulting from the] [added: as a result of our] adoption of ASU No. [removed: 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" in the first quarter of fiscal 2017. This benefit contributed $0.09 to diluted earnings per share in fiscal 2017. |][added: 2016-09.]

We opened [removed: three] [added: two] new stores in [removed: the U.S.] [added: Mexico] and [removed: three] [added: one] new [removed: stores] [added: store] in [removed: Mexico] [added: the U.S.] during fiscal [removed: 2017,] [added: 2018,] for a total store count of [removed: 2,284] [added: 2,287] at [removed: January 28, 2018.][added: February 3, 2019.]

At the end of fiscal [removed: 2017,] [added: 2018,] a total of [removed: 304] [added: 306] of our stores, or [removed: 13.3%,] [added: 13.4%,] were located in Canada and Mexico.

Total sales per square foot were [removed: $417.02] [added: $446.86] in fiscal [removed: 2017,] [added: 2018,] and our inventory turnover ratio was 5.1 times at the end of fiscal [removed: 2017.][added: 2018.]

[removed: Also in] [added: In] February [removed: 2017,] [added: 2019,] our Board of Directors authorized a [added: new] $15.0 billion share repurchase program that replaced the previous authorization.

In [removed: December 2017,] [added: February 2019,] our Board of Directors authorized a [removed: new] $15.0 billion share repurchase program that replaced the [removed: February] [added: December] 2017 [removed: authorization.][added: authorization, and we announced a 32% increase in our quarterly cash dividend to $1.36 per share.]

During fiscal [removed: 2017,] [added: 2018,] we repurchased [removed: a total of 49.5 million shares] [added: $10.0 billion] of our common stock [removed: for $8.0 billion] through ASR agreements and open market transactions.

We generated [removed: $12.0] [added: $13.0] billion of cash flow from operations during fiscal [removed: 2017.][added: 2018 and issued $3.5 billion of long-term debt in fiscal 2018.]

This cash flow, along with [removed: $3.0 billion of long-term debt and $850 million of net short-term borrowings in fiscal 2017,] [added: cash on hand,] was used to [removed: repay $500 million of floating rate senior notes that matured in September 2017,] fund cash payments of [removed: $8.0] [added: $10.0] billion for share repurchases, pay [removed: $4.2] [added: $4.7] billion of [removed: cash] dividends, fund [removed: $1.9] [added: $2.4] billion in capital expenditures, [removed: and acquire Compact Power] [added: repay $1.2 billion of senior notes that matured in September 2018,] and [removed: The Company Store.][added: repay $220 million of net short-term borrowings.]

Our ROIC was [removed: 34.2%] [added: 44.8%] for fiscal [removed: 2017.][added: 2018.]

[removed: For] [added: See the "[Non-GAAP Financial Measures](#s761104CBA1825941A1C579D20304D908)" section below for our definition and calculation of ROIC, as well as] a reconciliation of [removed: NOPAT] [added: NOPAT, a non-GAAP financial measure,] to net [removed: earnings, the] [added: earnings (the] most comparable GAAP financial [removed: measure, and our calculation of ROIC, see the "Non-GAAP Financial Measures" section below.][added: measure).]

| [added: 2018] | [removed: 2017] | | | | | | [added: 2017] | [removed: 2016] | | | | | | [added: 2016] | [removed: 2015] | | | | | |

| Net sales | $ | [removed: 100,904] [added: 108,203] | | | | | | $ | [removed: 94,595] [added: 100,904] | | | | | | $ | [removed: 88,519] [added: 94,595] | | | | |

| Gross profit | [removed: 34,356] [added: 37,160] | | | | [removed: 34.0] [added: 34.3] | % | | [removed: 32,313] [added: 34,356] | | | | [removed: 34.2] [added: 34.0] | % | | [removed: 30,265] [added: 32,313] | | | | 34.2 | % |

| Selling, general and administrative | [removed: 17,864] [added: 19,513] | | | | [removed: 17.7] [added: 18.0] | | | [removed: 17,132] [added: 17,864] | | | | [removed: 18.1] [added: 17.7] | | | [removed: 16,801] [added: 17,132] | | | | [removed: 19.0] [added: 18.1] | |

| Depreciation and amortization | [removed: 1,811] [added: 1,870] | | | | [removed: 1.8] [added: 1.7] | | | [removed: 1,754] [added: 1,811] | | | | [removed: 1.9] [added: 1.8] | | | [removed: 1,690] [added: 1,754] | | | | 1.9 | |

| Total operating expenses | [removed: 19,675] [added: 21,630] | | | | [removed: 19.5] [added: 20.0] | | | [removed: 18,886] [added: 19,675] | | | | [removed: 20.0] [added: 19.5] | | | [removed: 18,491] [added: 18,886] | | | | [removed: 20.9] [added: 20.0] | |

| Operating income | [removed: 14,681] [added: 15,530] | | | | [removed: 14.5] [added: 14.4] | | | [removed: 13,427] [added: 14,681] | | | | [removed: 14.2] [added: 14.5] | | | [removed: 11,774] [added: 13,427] | | | | [removed: 13.3] [added: 14.2] | |

| Interest and investment income | [removed: (74] [added: (93] | | ) | | (0.1 | ) | | [removed: (36] [added: (74] | | ) | | [removed: —] [added: (0.1] | [added: )] | | [removed: (166] [added: (36] | | ) | | [removed: (0.2] [added: —] | [removed: )] |

| Interest expense | [removed: 1,057] [added: 1,051] | | | | 1.0 | | | [removed: 972] [added: 1,057] | | | | 1.0 | | | [removed: 919] [added: 972] | | | | 1.0 | |

| Interest and other, net | [removed: 983] [added: 974] | | | | [removed: 1.0] [added: 0.9] | | | [removed: 936] [added: 983] | | | | 1.0 | | | [removed: 753] [added: 936] | | | | [removed: 0.9] [added: 1.0] | |

| Earnings before provision for income taxes | [removed: 13,698] [added: 14,556] | | | | [removed: 13.6] [added: 13.5] | | | [removed: 12,491] [added: 13,698] | | | | [removed: 13.2] [added: 13.6] | | | [removed: 11,021] [added: 12,491] | | | | [removed: 12.5] [added: 13.2] | |

| Provision for income taxes | [removed: 5,068] [added: 3,435] | | | | [removed: 5.0] [added: 3.2] | | | [removed: 4,534] [added: 5,068] | | | | [removed: 4.8] [added: 5.0] | | | [removed: 4,012] [added: 4,534] | | | | [removed: 4.5] [added: 4.8] | |

| Net earnings | $ | [removed: 8,630] [added: 11,121] | | | [removed: 8.6] [added: 10.3] | % | | $ | [removed: 7,957] [added: 8,630] | | | [removed: 8.4] [added: 8.6] | % | | $ | [removed: 7,009] [added: 7,957] | | | [removed: 7.9] [added: 8.4] | % |

[removed: Note:] Certain percentages may not sum to totals due to rounding.

| | | | | | | | | | | [added: | | |] % Change | | | | |

| [removed: 2017] [added: 2018] | | | [removed: 2016] | [added: 2017] | | [removed: 2015] | | [added: 2016] | [removed: 2017] [added: | | | 2018] vs. [removed: 2016] [added: 2017] | | | [removed: 2016] [added: 2017] vs. [removed: 2015] [added: 2016] | | |

| Selected financial and sales data: | [added: Fiscal] | | | | [added: Fiscal] | | | | [added: Fiscal] | | | | [added: Fiscal] | | [added: | Fiscal | |]

| • | [Results of Operations and Non-GAAP Measures](#s6CA8D7E50CF355128727B87EA31CBB60) |

| Effective tax rate | 23.6 | | % | | 37.0 | | % | | 36.3 | | % |

Note: Fiscal 2018 includes 53 weeks.

Fiscal 2017 and fiscal 2016 include 52 weeks.

Net earnings were $11.1 billion, or $9.73 per diluted share.

The 53rd week in fiscal 2018 added $1.7 billion of net sales and $241 million of net earnings and increased diluted earnings per share by $0.21.

Our effective tax rate was 23.6% for fiscal 2018 and lower than fiscal 2017 and fiscal 2016 primarily due to enactment of the Tax Act.

Results of Operations and Non-GAAP Measures

| Impairment loss | 247 | | | | 0.2 | | | — | | | | — | | | — | | | | — | |

| Other | 16 | | | | — | | | — | | | | — | | | — | | | | — | |

Note: Fiscal 2018 includes 53 weeks.

Fiscal 2017 and fiscal 2016 include 52 weeks.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | |

| Average ticket (3) (4) | $ | 65.74 | | | $ | 63.06 | | | $ | 60.35 | | | 4.2 | % | | 4.5 | % |

| Sales per square foot (3) (4) | $ | 446.86 | | | $ | 417.02 | | | $ | 390.78 | | | 7.2 | % | | 6.7 | % |

| Diluted earnings per share | $ | 9.73 | | | $ | 7.29 | | | $ | 6.45 | | | 33.5 | % | | 13.0 | % |

| (2) | The calculations do not include results from the 53rd week of fiscal 2018. |

| (3) | The calculations do not include results for Interline. |

| (4) | The 53rd week of fiscal 2018 increased customer transactions by 24.5 million, added $0.01 to average ticket, and increased sales per square foot by $6.87. |

Fiscal 2018 Compared to Fiscal 2017

Fiscal 2018 consisted of 53 weeks compared to 52 weeks in fiscal 2017.

Online sales, which consist of sales generated online through our websites for products picked up in our stores or delivered to customer locations, represented 7.9% of net sales and grew 26.2% during fiscal 2018.

The adoption of ASU No. 2014-09 benefited net sales by $216 million in fiscal 2018, while the effect of foreign currency had a negligible impact on net sales.

See [Note 1](#s087397B3AD7A56C3AA31D78C4485B5CF) to our consolidated financial statements for more information on ASU No. 2014-09 and the implementation of this new standard for revenue recognition.

Net sales for the 53rd week in a fiscal year are not included in the comparable sales calculation for that fiscal year.

For example, our comparable sales results for fiscal 2018 compare weeks 1 through 52 in fiscal 2018 to the 52-week period reported for fiscal 2017.

Total comparable sales increased 5.2% in fiscal 2018.

The increase in comparable sales reflected a number of factors, including the execution of our strategic efforts to drive an enhanced interconnected experience in both the physical and digital worlds.

Our comparable average ticket increased 4.2% in fiscal 2018 while comparable customer transactions increased 1.0% during fiscal 2018.

The increase in comparable average ticket was due in large part to strong sales in big ticket purchases in certain categories, such as appliances and vinyl plank flooring.

Gross profit increased $2.8 billion, or 8.2%, to $37.2 billion in fiscal 2018.

The increase in gross profit margin for fiscal 2018 was primarily driven by a $598 million benefit from the adoption of ASU No. 2014-09 and a benefit from mix of products sold, partially offset by higher transportation and fuel costs in our supply chain and shrink.

The additional week in fiscal 2018 contributed $615 million to gross profit.

SG&A increased $1.6 billion, or 9.2%, to $19.5 billion in fiscal 2018.

The additional week in fiscal 2018 contributed $301 million to SG&A.

The additional week in fiscal 2018 did not result in incremental expense because we recognize depreciation and amortization expense on a monthly basis.

Impairment Loss.

We recognized a $247 million impairment loss in fiscal 2018 related to certain trade names associated with Interline.

| • | [Results of Operations](#sc20f371ad03a406e8fd00b6afcda5281) |

Net earnings were $8.6 billion, or $7.29 per diluted share, and reflected the following:

| • | 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 contributed approximately $662 million to net sales in the second half of fiscal 2017. The gross profit on these hurricane-related sales was considerably less than the Company average. We also incurred approximately $170 million of hurricane-related expenses in the second half of fiscal 2017. |

| • | In the fourth quarter of fiscal 2017, we paid a one-time cash bonus to our U.S. hourly associates, which negatively impacted net earnings by $72 million and reduced diluted earnings per share by approximately $0.06. |

| • | On December 22, 2017, the U.S. government enacted the Tax Act, which included a reduction in the U.S. federal statutory tax rate from 35% to 21% and a transition to a modified territorial system. As a result of the enactment of the Tax Act, we recorded a net $127 million charge in the fourth quarter of fiscal 2017. This charge resulted in a $0.11 reduction to diluted earnings per share in fiscal 2017 (see [Note 5](#sE734C72BFB8A597EA0FC04045415431C) to the Consolidated Financial Statements for further discussion). |

In February 2017, our Board of Directors increased our targeted dividend payout ratio to 55% of prior-year diluted earnings per share.

In February 2018, we announced a 15.7% increase in our quarterly cash dividend to $1.03 per share.

We define ROIC as 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.

Results of Operations

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Fiscal | | | Fiscal | | | Fiscal | | | Fiscal | | | Fiscal | |

| Average ticket (1) | $63.06 | | | $60.35 | | | $58.77 | | | 4.5 | % | | 2.7 | % |

| Sales per square foot (1) | $417.02 | | | $390.78 | | | $370.55 | | | 6.7 | % | | 5.5 | % |

| Diluted earnings per share | $7.29 | | | $6.45 | | | $5.46 | | | 13.0 | % | | 18.1 | % |

The effective income tax rate for fiscal 2017 also reflected a $106 million benefit to our provision for income taxes for share-based payment awards as a result of our adoption of ASU No. 2016-09 (see [Note 1](#s93D37013B5F358DD8ACEE0892CAF3389) and [Note 5](#sE734C72BFB8A597EA0FC04045415431C) to our consolidated financial statements for further discussion).

Fiscal 2016 Compared to Fiscal 2015

The increase in net sales was partially offset by pressure from a stronger U.S. dollar, which negatively impacted total sales growth by $549 million in fiscal 2016.

Total comparable sales increased 5.6% for fiscal 2016, which reflected a number of factors, including the execution of our strategy, improved strength across our business, and an improved U.S. home improvement market.

Online sales represented 5.9% of net sales and grew 19.3% during fiscal 2016.

Further, our comparable customer transactions increased 2.8% for fiscal 2016 and comparable average ticket increased 2.7% for fiscal 2016, due in part to strong sales in big ticket purchases in merchandising departments such as Appliances, Flooring, and Roofing, offset in part by a stronger U.S. dollar.

Gross profit for fiscal 2016 increased $2.0 billion, or 6.8%, to $32.3 billion.

Gross profit margin for fiscal 2016 reflected the impact of product mix changes, offset by benefits from our supply chain driven by increased productivity, and benefits from reaching higher levels of co-op allowances and rebates in certain category classes.

SG&A for fiscal 2016 increased $331 million, or 2.0%, to $17.1 billion.

SG&A included Data Breach-related pretax expenses of $37 million in fiscal 2016 compared to $128 million of pretax net expenses in fiscal 2015.

Interest and other, net, for fiscal 2015 included a $144 million pretax gain related to the sale of our remaining equity ownership in HD Supply.

Interest and other, net, as a percent of net sales was 1.0% for fiscal 2016 compared to 0.9% for fiscal 2015 due primarily to the HD Supply pretax gain in fiscal 2015 noted above and higher long-term debt balances in fiscal 2016.

Expenses related to the Data Breach resulted in decreases of $0.02 and $0.06 to diluted earnings per share for fiscal 2016 and 2015, respectively.

The gain on the sale of our remaining equity ownership in HD Supply contributed a benefit of $0.07 to diluted earnings per share for fiscal 2015.

Net cash provided by operating activities increased $2.2 billion in fiscal 2017 and increased $410 million in fiscal 2016, and primarily reflected an increase in net earnings, excluding changes in working capital and non-cash items from operations.

In December 2017, we increased the borrowing capacity of our commercial paper programs from $2.0 billion to $3.0 billion.

In addition, we added a separate 364-day $1.0 billion credit facility that expires in December 2018.

We also issue senior notes from time to time.

| Long-term debt – interest payments (2) | 15,167 | | | | 914 | | | | 1,739 | | | | 1,526 | | | | 10,988 | | |

| Capital lease obligations (3) | 1,753 | | | | 147 | | | | 298 | | | | 264 | | | | 1,044 | | |

| Operating lease obligations | 7,138 | | | | 921 | | | | 1,655 | | | | 1,276 | | | | 3,286 | | |

| Purchase obligations (4) | 1,634 | | | | 1,123 | | | | 269 | | | | 110 | | | | 132 | | |

| Total | $ | 52,188 | | | $ | 6,001 | | | $ | 6,711 | | | $ | 6,776 | | | $ | 32,700 | |

lowest level of identifiable cash flows, which is generally the individual store level.

At [removed: January 28, 2018,] [added: February 3, 2019,] after giving consideration to our interest rate swap agreements, floating rate debt principal was [removed: $1.75] [added: $2.1] billion, or approximately [removed: 7%] [added: 8%] of our [added: long-term] debt portfolio.

Revenues from these foreign operations accounted for approximately [removed: $8.5] [added: $8.8] billion of our revenue for fiscal [removed: 2017.][added: 2018.]

The United Kingdom’s Financial Conduct Authority has announced the intent to phase out the use of LIBOR by the end of 2021.

If LIBOR is discontinued, we may need to renegotiate the terms of certain of our floating rate notes, interest rate swap agreements, and credit instruments, which utilize LIBOR as a benchmark in determining the interest rate, to replace LIBOR with the new standard that is established.

As a result, we may incur incremental costs in transitioning to a new standard, and interest rates on our current or future indebtedness may be adversely affected by the new standard.

There is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement rate.

As such, the potential effect of any such event on our cost of capital cannot yet be determined, but we do not expect it to have a material impact on our consolidated financial condition, results of operations, or cash flows.

The Home Depot, Inc. is the world’s largest home improvement retailer based on net sales for fiscal [removed: 2017.][added: 2018.]

As of the end of fiscal [removed: 2017,] [added: 2018,] we had [removed: 2,284] [added: 2,287] The Home Depot stores located throughout the [removed: U.S., including] [added: U.S. (including] the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and [removed: Guam,] [added: Guam),] Canada, and Mexico.

Our telephone number [added: at that address] is (770) 433-8211.

As the retail landscape continues to [removed: rapidly] evolve, we must become more agile in responding to the changing competitive [removed: landscape] [added: environment] and customer preferences.

We believe that providing a seamless and frictionless shopping experience across multiple channels, featuring curated and innovative product choices, personalized for the individual shopper’s need, which are then delivered in a fast and cost-efficient manner, [removed: will be] [added: is] a key enabler for our future success.

Taken together, these strategies [removed: will help] [added: are helping] us to create the One Home Depot experience that our customers demand.

Below are some of the ways we have been investing in that experience during fiscal [removed: 2017.][added: 2018.]

We serve two primary customer groups and have different approaches to [removed: meet] [added: meeting] their needs:

| • | Professional Customers (or “Pros”). These customers are primarily professional renovators/remodelers, general contractors, handymen, property managers, building service contractors and specialty tradesmen, such as [removed: installers.] [added: electricians, plumbers and painters. These customers build, renovate, remodel, repair and maintain residential properties, multifamily properties, hospitality properties and commercial facilities, including education facilities, healthcare facilities, government buildings and office buildings.] We recognize the great value our Pro customers provide to their clients, and we strive to make the [removed: Pro’s] [added: Pros'] job [removed: easier. For example, we offer our Pros a wide range of special programs such as delivery and will-call services, dedicated sales] [added: easier] and [removed: service staff, enhanced credit] [added: help them] |

[removed: In addition, we maintain a] [added: Our Pro] loyalty program, Pro Xtra, [removed: that] provides [removed: our] Pros with [removed: discounts on] [added: benefits related to] useful business services, exclusive product [removed: offers,] [added: offers] and a purchase [removed: tracking] [added: monitoring] tool to enable receipt lookup [removed: online] and job tracking of purchases across all forms of payment.

These customers are typically home owners who [removed: purchase materials and hire] [added: engage with] Pros to complete [added: their project or installation, instead of completing] the project or [removed: installation.][added: installation themselves.]

[removed: Our stores offer] [added: DIFM customers can purchase] a variety of installation services [removed: available to DIFM customers who purchase products and installation of those products from us] in our stores, online or in their homes through in-home consultations.

Our installation programs include many categories, such as flooring, [removed: cabinets,] [added: cabinets and cabinet makeovers,] countertops, [removed: water heaters] [added: furnaces] and [removed: sheds.][added: central air systems, and windows.]

We help our customers finance their projects by offering [removed: private label credit card, or] PLCC products through third-party credit providers.

Our [removed: private label credit] [added: PLCC] program includes other benefits, such as a 365-day return policy and, for our Pros, commercial fuel rewards and extended payment terms.

In fiscal [removed: 2017,] [added: 2018,] our customers opened approximately [removed: 4.4] [added: 4.8] million new The Home Depot private label credit accounts, and at the end of fiscal [removed: 2017] [added: 2018] the total number of The Home Depot active account holders was approximately [removed: 15] [added: 16] million.

PLCC sales accounted for approximately 23% of net sales in fiscal [removed: 2017.][added: 2018.]

[removed: In] [added: To this end, in] fiscal [removed: 2017,] [added: 2018] we continued to invest in freight handling capabilities as part of an end-to-end initiative to optimize how product flows from suppliers to our shelves.

In addition, we [removed: are implementing] [added: launched] a new order management system called “Order Up” to consolidate certain of our existing legacy systems into a simple and intuitive user [removed: interface.][added: interface that requires minimal training and significantly decreases associate time required to create, sell, manage and edit orders.]

These efforts [removed: will] allow our associates to devote more time to the customer and make working at The Home Depot a better experience.

At the end of fiscal [removed: 2017,] [added: 2018,] we employed approximately 413,000 associates, of whom approximately [removed: 28,000] [added: 29,000] were salaried, with the remainder compensated on an hourly or temporary basis.

[removed: To attract and retain qualified] personnel, we seek to maintain competitive salary and wage levels in each market we serve.

As a result, we have taken a number of steps to provide our customers with a seamless and frictionless [added: interconnected] shopping experience across our stores, online, on the job site, and in their homes.

Our stores are the hub of our business, and we are investing to improve the [added: customer shopping experience through easier navigation and increasing the] convenience and speed of [removed: the customer shopping experience in our stores.][added: checkout.]

For several years, our associates have used [removed: FIRST phones,] our [removed: web-enabled handheld devices,] [added: FIRST phones] to help expedite the online order checkout process, locate products in the aisles and online, and check inventory on hand.

In fiscal [removed: 2017,] [added: 2018,] we empowered our customers with additional self-help tools.

[removed: For example, we invested] [added: We also continued to invest] in a better digital navigation experience through store-specific maps, which allow customers to pinpoint the exact location of an item on their mobile devices.

We [removed: continued] [added: continue] to make investments in our website and mobile apps.

[removed: During] [added: In] fiscal [removed: 2017,] [added: 2018,] we [removed: implemented a new e-commerce platform, enhanced] [added: continued to enhance] our search and mobile functionality, [removed: increased] [added: our] checkout speed, and [removed: expanded] [added: our] chat functionality with our online contact centers.

We do not view the customer experience as a specific transaction; rather, [added: we believe] it encompasses an entire process from inspiration and know-how, to purchase and [removed: fulfillment,] [added: fulfillment and] to post-purchase care and support.

[removed: Further, we] [added: We] believe that by connecting our stores to online and online to our stores, we drive sales not just in-store but also online.

In fiscal [removed: 2017,] [added: 2018,] we saw increased traffic to our online properties and improved online sales conversion rates.

Sales from our online channels increased over [removed: 21%] [added: 26%] during fiscal [removed: 2017.][added: 2018.]

In fiscal [removed: 2017,] [added: 2018,] we continued to introduce a wide range of innovative new products to our DIY and Pro customers, while remaining focused on offering everyday values in our stores and online.

A typical The Home Depot store stocks approximately 30,000 to 40,000 [removed: products] [added: items] during the year, including both national brand name and proprietary [removed: items.][added: products.]

Our online product offerings complement our stores by serving as an extended aisle, and we offer a significantly broader product assortment through our websites, including [removed: homedepot.com] [added: homedepot.com, blinds.com,] and [removed: blinds.com.][added: thecompanystore.com, an online retailer of textiles and décor products that we acquired in late fiscal 2017 to expand our offering of online décor categories.]

In fiscal [removed: 2017,] [added: 2018,] we introduced a number of innovative and distinctive products to our customers at attractive values.

During fiscal [removed: 2017,] [added: 2018,] we continued to offer value to our customers through a wide range of our proprietary and exclusive brands.

[added: Highlights of these offerings include Husky® hand tools, tool storage and work benches, water] resistant gloves, dual beam flashlights, diamond tip screwdrivers, [added: and] 15-in-1 screwdriver/nut [removed: drivers,] [added: drivers; Everbilt® products, including hardware fasteners, plumbing parts, pumps] and [removed: 3/8 inch drive digital torque wrenches;] [added: garbage disposals;] Hampton Bay® lighting, ceiling fans and kitchen cabinets; Glacier Bay® bath fixtures and [removed: toilets, featuring a SuperClean™ toilet;] [added: toilets;] LifeProof® flooring including carpet, carpet with PetProof® technology, [removed: laminate and] [added: rigid core] vinyl [removed: flooring;] [added: plank flooring, and new slip resistant tiles;] EcoSmart® lighting, featuring all-glass LED light bulbs; Vigoro® lawn care products; [added: Stanley® hand tools; Troy-Bilt® outdoor snow throwers;] and RIDGID® and Ryobi® power tools, featuring Ryobi® 40V cordless push mowers.

As noted [removed: above under “Our Customers,”] [added: above,] we provide a number of special programs for our Pro customers to meet their particular needs, and for our DIY and DIFM customers, we provide a number of installation services.

This is what we call the One Home Depot experience.

In late 2017, we announced that we would be investing approximately $11 billion over a multi-year period in our stores, associates, digital experience and supply chain to drive value for our customers, our associates, our suppliers and our shareholders.

To accomplish this, we are executing against five key strategies designed to drive growth in our business:

grow their business.

We believe that investments aimed at deepening our relationships with our Pro customers are yielding increased engagement and will continue to translate into incremental spend.

As part of our continued commitment to invest in Pro customer relationships and the significant market opportunity these customers represent, we have created an enhanced Pro customer experience, both online and in-store.

At the end of 2018, we announced a new consolidated, go-to-market strategy for all of our Pro initiatives, including our MRO business (formerly known as Interline), under “The Home Depot Pro” banner.

With The Home Depot Pro, Pros have access to a comprehensive offering that includes a combination of our vast store network, a best-in-class dedicated sales force, quality and affordable products from trusted brands, an extensive delivery network and online business solutions.

We provide specialized programs such as an expanded MRO assortment, inventory management solutions, custom product offerings, in-store Pro desk and Pro services, and enhanced credit programs.

We also provide and are continuously working to improve our delivery options for Pros, including pick up in-store, direct to job site delivery or ship-to home, to allow us to deliver when, where and how our customers demand.

Online, our Pros receive a personalized experience based on their business, their needs, their industry and their purchasing behavior.

Pro customers are not one-size-fits-all, and The Home Depot Pro offers the level of value-added services that our diverse Pro customers demand.

We will continue to invest in the Pro customer experience to provide the services, solutions, support, and online tools they need to grow their businesses.

We deployed our new overhead management application on our FIRST phones, our web-enabled handheld devices, in fiscal 2018, which helps associates locate product stored in overhead storage quickly and accurately, saving time, improving the customer experience, and assisting with inventory management.

During fiscal 2018, we also enhanced our labor model to better align associate activity with customer needs, shifting from a model based on the number of transactions to one that correlates to the specific volume of activity within each store down to the department level.

This change, which is now live in all stores, allows us to better allocate our workforce to provide a best-in-class customer experience.

To attract, reward, and retain qualified

In fiscal 2018, as part of our strategic investments, we made a number of investments in our associates, including changes to our benefits programs to eliminate a waiting period for new hires and an enhanced paid maternity and parental leave program.

From the inspirational point of the purchase journey to providing product know-how, we are investing in the infrastructure and processes needed to deliver the most relevant marketing messages to our customers based upon what is important for them today.

This means adjusting messages so that they are personalized to the customer, such as showing product that completes their project based upon what was recently purchased, or highlighting products and services that are most relevant based upon changing weather conditions.

Customers desire more personalized messaging, so we are focusing on connecting marketing activities with the online and in-store experiences to create a seamless series of contacts across all channels.

Doing this well provides tremendous value to the customer, which in turn drives business results.

As part of our strategic investments, we have made progress with the implementation of our wayfinding sign and store refresh package, with almost 1,300 of our U.S. stores completed by the end of fiscal 2018, ahead of our original plan.

This package includes new, more intuitive signage, better lighting, and basic store enhancements.

We also continued the roll out of our re-designed front end area, including optimized layouts in all checkout areas and expanded and enhanced self-checkout options, as well as the addition of self-service lockers at the front entrance to offer convenient pick up of online orders.

During fiscal 2018, we continued to improve our e-commerce platform with a goal of driving a more personalized customer experience, as discussed above.

To create an enhanced customer experience, we have been expanding our use of technology, including machine learning and data sciences.

To enhance our merchandising capabilities, we continued to make improvements to our information technology tools in fiscal 2018 to build an interconnected shopping experience that is tailored to our customers’ persona, shopping context, and location; to ensure we have the best value in the market; and to optimize our product assortments.

Examples of these new products include the Halo Color Selectable LED Downlight Retrofits, Behr Quick Dry Oil-Based Wood Finish, EGO® 56V Carbon Fiber PowerLoad Technology™ Trimmer, Andersen® LuminAire™ Retractable Screen, and Loctite® PL® Premium Max Construction Adhesive.

As part of our investment in One Home Depot Supply Chain, we will add a number of different fulfillment facilities designed to help us meet our goal of reaching 90% of the U.S. population with same or next day delivery for an extended home improvement product offering, including big and bulky goods.

These facilities include more direct fulfillment centers and market delivery operations, or MDOs, which function as local hubs to consolidate freight for dispatch to customers for the final mile of delivery.

In fiscal 2018, we began piloting these facilities.

We also continue to focus on developing new capabilities to improve both the efficiency and customer experience in our store delivery program.

For example, as of the end of fiscal 2018, we have rolled out van and car delivery to over 70% and 40% of the U.S. population, respectively, which provides our customers with a fast and affordable service for smaller deliveries.

To fully realize the One Home Depot experience, we will continue to connect the various aspects of our business and leverage our scale.

Competition

Since program inception, we have helped recycle 10 million pounds of rechargeable batteries.

In 2018, we set a Science Based Target goal in connection with our annual CDP reporting (discussed below) with commitments to a 2.1% annual reduction in carbon emissions.

Our goal is to achieve a 39.9% reduction by 2030 and a 50.4% reduction by 2035.

Multiple times over these years, the ENERGY STAR® division named us "Retail Partner of the Year – Sustained Excellence"

This is our vision for One Home Depot.

We have been focused on providing this interconnected retail experience to drive value for our customers, our associates, our suppliers and our shareholders.

With that in mind, we have refined our strategic principles into the following five key strategies designed to drive growth in our business:

programs, designated parking spaces close to store entrances and bulk pricing programs for both online and in-store purchases.

We also serve Pros in the MRO market where our customers are primarily institutions (such as educational and healthcare institutions), hospitality businesses, and national, multi-family apartment complexes.

Through our entry into this market with our acquisition of Interline in fiscal 2015, we gained additional competencies relevant to our large Pro customers, including outside sales and account management, expanded product assortment, and last mile delivery capabilities.

During fiscal 2017, we continued our integration efforts, rolling out Pro MRO in all U.S. stores, giving customers in our stores access to Interline's assortment.

Similarly, we launched our Pro Purchase program, which gives Interline customers the ability to shop our stores using their house accounts.

Our Pros have differing needs depending on the type of work they perform.

Our goal is to develop a comprehensive set of capabilities for our Pros to provide solutions across every purchase opportunity, such as supplying both recurring MRO needs and renovation products and services to property managers or providing inventory management solutions for specialty tradesmen’s replenishment needs.

In fiscal 2017, we enhanced our service offering to our Pros through our acquisition of Compact Power, a national provider of equipment rental and maintenance services.

We believe that by bringing our best resources to bear for each individual customer, we can provide a differentiated customer experience and enhanced value proposition for our Pro customers.

In addition, we provide third-party professional installation in a number of categories sold through our in-home sales programs, such as roofing, siding, windows, cabinet refacing, furnaces and central air systems.

In fiscal 2017, we announced a one-time bonus to our U.S. hourly associates in light of the benefit we expect to receive from the Tax Cuts and Jobs Act of 2017.

This bonus was in addition to our semi-annual Success Sharing bonus

program for our non-management associates.

We have also undertaken a number of store pilots in response to customer feedback around navigation and checkout.

These pilots include new, more intuitive signage, better lighting, and a redesign of the front end of our store.

As part of these store pilots, we added self-service lockers at the front entrance to offer convenient pick up of online orders.

We plan to roll out these store pilots more broadly to our U.S. stores over the next several years.

We have also begun to focus on voice-enabled commerce to further remove friction for our customers in-store and online.

We also made two strategic acquisitions to further enhance our offerings to our customers.

To enhance our merchandising capabilities, we continued to make improvements to our information technology tools in fiscal 2017 to better understand our customers, provide more localized assortments to fit customer demand, and optimize space to dedicate the right square footage to the right products in the right location.

In fiscal 2017, we expanded our offering of online décor categories though our acquisition of The Company Store, an online retailer of textiles and décor products.

Examples of these new products include EGO® 56V cordless self-propelled mowers; PPG® Timeless™ paint; Samsung® Activewash™ high-efficiency washers; and Leviton® smart lighting controls.

Highlights of these offerings include Husky® hand tools, tool storage and work benches, water

In fiscal 2017, we enhanced our tool rental offering through our acquisition of Compact Power.

Given the changing needs of our customers, our goal is to create the fastest and most efficient delivery capabilities in home improvement.

Efficient delivery is also key.

We have developed specialized capabilities for delivering building materials, which is particularly important to our Pro customers.

During fiscal 2017, we implemented new and improved delivery capabilities from our stores, including two- and four-hour delivery windows, and we piloted van and car options for faster delivery on small orders in certain markets.

Competition.

appearance as well as presentation of merchandise.

Other Information

SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental [removed: provisions] [added: regulations] if we reasonably believe that such proceedings may result in monetary sanctions of $100,000 or more.

In [removed: February 2018,] [added: January 2019,] we received a letter from the California South Coast Air Quality Management District ("SCAQMD") regarding allegations that we [added: have] sold [removed: certain non-compliant paint thinners and solvents from 2010 to] [added: denatured alcohol since] 2015 in [removed: violation of applicable rules.][added: a manner that is not compliant with]

In the second quarter of fiscal 2018, we received a subpoena for documents from the EPA civil enforcement division.

applicable rules.

For a description of the claims and investigations related to the Data Breach that we discovered in the third quarter of fiscal 2014, see [Note 11](#sB8EA4A977AA45B52B09C1F90E2CD364C) to our consolidated financial statements included in Item 8, "Financial Statements and Supplementary Data," which description is incorporated herein by reference.

As previously reported, in November 2013, we received subpoenas from the District Attorney of Alameda County, California, working with various District Attorneys and the California Attorney General’s office (collectively, the "District Attorneys"), seeking documents and information relating to our disposal of hazardous waste at our California facilities.

The District Attorneys sought monetary penalties and certain changes to our operations with respect to the disposal of hazardous waste in California.

In the first quarter of fiscal 2018, the Alameda County Superior Court approved a settlement agreement among the parties to resolve this matter for an aggregate of $21 million in penalties, costs, and supplemental environmental projects; the obligation to perform other environmental compliance activities in lieu of additional penalties; and certain injunctive relief.

[removed: | ý |] [added: x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [removed: |]

For the fiscal year ended [removed: January 28, 2018][added: February 3, 2019]

[removed: |] ¨ [removed: |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [removed: |]

[removed: ][added: ]

| [removed: DELAWARE (State] [added: | Delaware State] or other jurisdiction of incorporation or [removed: organization)] [added: organization] | [added: |] 95-3261426 (I.R.S. Employer Identification No.) | [added: |]

| [added: |] 2455 [removed: PACES FERRY ROAD, ATLANTA, GEORGIA] [added: Paces Ferry Road, Atlanta, Georgia] 30339 (Address of principal executive offices) (Zip Code) | [added: |] Registrant’s [removed: Telephone Number, Including Area Code:] [added: telephone number, including area code:] (770) 433-8211 | [added: |]

| [removed: SECURITIES REGISTERED PURSUANT TO SECTION] [added: | Securities registered pursuant to Section] 12(b) [removed: OF THE ACT:] [added: of the Act:] | | [added: | |]

| [removed: TITLE OF EACH CLASS] | [removed: NAME OF EACH EXCHANGE ON WHICH REGISTERED] [added: Title of each class] | [added: | Name of each exchange on which registered | |]

| [added: |] Common Stock, $0.05 Par Value Per Share | [added: |] New York Stock Exchange | [added: |]

Indicate by check mark whether the [removed: Registrant] [added: registrant] has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T [added: (§ 232.405 of this chapter)] during the preceding 12 months (or for such shorter period that the [removed: Registrant] [added: registrant] was required to submit [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K [added: (§ 229.405 of this chapter)] is not contained herein, and will not be contained, to the best of [removed: Registrant’s] [added: registrant’s] knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Indicate by check mark whether the [removed: Registrant] [added: registrant] is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting company, or an emerging growth company.

Indicate by check mark whether the [removed: Registrant] [added: registrant] is a shell company (as defined in Rule 12b-2 of the [removed: Exchange] Act).

The aggregate market value of [removed: the] [added: voting] common stock [removed: of the Registrant] held by non-affiliates of the [removed: Registrant] [added: registrant] on July [removed: 30, 2017] [added: 29, 2018] was [removed: $176.5] [added: $225.3] billion.

The number of shares outstanding of the [removed: Registrant’s] [added: registrant’s] common stock as of March [removed: 2, 2018] [added: 8, 2019] was [removed: 1,157,269,522] [added: 1,103,903,507] shares.

Portions of the [removed: Registrant’s] [added: registrant’s] proxy statement for the [removed: 2018] [added: 2019] Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K to the extent described herein.

| [Commonly Used or Defined [removed: Terms](#s44a9be8d04314670a81652bd5b4842bc)] [added: Terms](#sA9B6D4F80470569185213A555922AC20)] | | [removed: [ii](#s44a9be8d04314670a81652bd5b4842bc)] [added: [ii](#sA9B6D4F80470569185213A555922AC20)] |

| [Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of [removed: 1995](#sAB156269ACA5566B99323F0506D1D156)] [added: 1995](#s2EED2A08AA9B5CC49BC29487CBDAEFE4)] | | [removed: [iii](#sAB156269ACA5566B99323F0506D1D156)] [added: [iii](#s2EED2A08AA9B5CC49BC29487CBDAEFE4)] |

| Item 1. | [removed: [Business](#s2F8C452764DE55729CD5A6E4BB349CBB).] [added: [Business](#s78C995DA6A7E5858889FC7ED146CBCEC).] | [removed: [1](#s2F8C452764DE55729CD5A6E4BB349CBB)] [added: [1](#s78C995DA6A7E5858889FC7ED146CBCEC)] |

| Item 1A. | [Risk [removed: Factors](#sBBF289033A9C5AAC8F01F467E92BC0BB).] [added: Factors](#s329D4C38F0485C3896FB13DD513F20F7).] | [removed: [7](#sBBF289033A9C5AAC8F01F467E92BC0BB)] [added: [8](#s329D4C38F0485C3896FB13DD513F20F7)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s0C7D423C96C25950BA61D87FA4AB9CAF).] [added: Comments](#s3FA83B3ACC235B848512BE55F5D9B057).] | [removed: [14](#s0C7D423C96C25950BA61D87FA4AB9CAF)] [added: [15](#s3FA83B3ACC235B848512BE55F5D9B057)] |

| Item 2. | [removed: [Properties](#s9E8913E674F35B1D8E62CBD4A3B4F9C8).] [added: [Properties](#sAEF698C8BCBC5816B1810EFD5177CF0B).] | [removed: [14](#s9E8913E674F35B1D8E62CBD4A3B4F9C8)] [added: [15](#sAEF698C8BCBC5816B1810EFD5177CF0B)] |

| Item 3. | [Legal [removed: Proceedings](#s244601E7F8575E67A649BDDE6DFE9A7C).] [added: Proceedings](#s116A32FD02FB574391E745D9F6CB86FC).] | [removed: [16](#s244601E7F8575E67A649BDDE6DFE9A7C)] [added: [17](#s116A32FD02FB574391E745D9F6CB86FC)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s6325CE124F7D5AB39FE3A3175509AEB4).] [added: Disclosures](#s410AB6AF6DCA55FBAFA895485F1E82BC).] | [removed: [17](#s6325CE124F7D5AB39FE3A3175509AEB4)] [added: [18](#s410AB6AF6DCA55FBAFA895485F1E82BC)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s3FCBB4171F15574E90C2FC014E7A9FEA).] [added: Securities](#s86E52F74434355248B6E04956E4A056E).] | [removed: [17](#s3FCBB4171F15574E90C2FC014E7A9FEA)] [added: [18](#s86E52F74434355248B6E04956E4A056E)] |

| Item 6. | [Selected Financial [removed: Data](#s6ACA45DF5460512D9108791C48B1EF39).] [added: Data](#sB0B3F8D46FBC54C994357E44F0C86B26).] | [removed: [19](#s6ACA45DF5460512D9108791C48B1EF39)] [added: [19](#sB0B3F8D46FBC54C994357E44F0C86B26)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sF1883DCF7E425B84AB4A2FD0853E031F).] [added: Operations](#s0370279D1307537CA712C94D1C705550).] | [removed: [19](#sF1883DCF7E425B84AB4A2FD0853E031F)] [added: [19](#s0370279D1307537CA712C94D1C705550)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sEE29F8ECFD6653A3BEA26DE4676EBB88).] [added: Risk](#sDD7DE0829F6A5D508899853A60AA03CB).] | [removed: [28](#sEE29F8ECFD6653A3BEA26DE4676EBB88)] [added: [28](#sDD7DE0829F6A5D508899853A60AA03CB)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s9E37D0ED033552958B2E7FE27813510F).] [added: Data](#s49F30D7FCC0B5D429505826B8EB17096).] | [removed: [29](#s9E37D0ED033552958B2E7FE27813510F)] [added: [29](#s49F30D7FCC0B5D429505826B8EB17096)] |

| Item 9. | [Changes in and Disagreements [removed: with] [added: With] Accountants on Accounting and Financial [removed: Disclosure](#sF4C725C16FA8584D8AA8700B3884E7A3).] [added: Disclosure](#s59B39C966EDB51698696D3B0A1A62C22).] | [removed: [57](#sF4C725C16FA8584D8AA8700B3884E7A3)] [added: [59](#s59B39C966EDB51698696D3B0A1A62C22)] |

| Item 9A. | [Controls and [removed: Procedures](#sAA22060B51EC5F1A893E20C73AF17646).] [added: Procedures](#s6C0AA686E965590A83F284BF8976706B).] | [removed: [57](#sAA22060B51EC5F1A893E20C73AF17646)] [added: [59](#s6C0AA686E965590A83F284BF8976706B)] |

| Item 9B. | [Other [removed: Information](#s5379979B9AA250869CDBCB24F9CB37D9).] [added: Information](#sB24ADDF07C4D5A8C924846463CD3FE88).] | [removed: [59](#s5379979B9AA250869CDBCB24F9CB37D9)] [added: [61](#sB24ADDF07C4D5A8C924846463CD3FE88)] |

| [PART [removed: III](#sB710CDA97CD958929D9DCD808D0BCD2F)] [added: III](#sE102A8CDAE8C5CDD9A943BB25027BFB6)] | | |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#sC9528F0B74A3535384A3ED277967E195).] [added: Governance](#sC7CEC66318035D81B860F1612DBE7BA0).] | [removed: [59](#sC9528F0B74A3535384A3ED277967E195)] [added: [61](#sC7CEC66318035D81B860F1612DBE7BA0)] |

| Item 11. | [Executive [removed: Compensation](#s3E2649B2917259C49E8D7AFA1E266193).] [added: Compensation](#s4532F3AF11755BD89FF1936FE37172EA).] | [removed: [60](#s3E2649B2917259C49E8D7AFA1E266193)] [added: [62](#s4532F3AF11755BD89FF1936FE37172EA)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s01F8A6AA684056B7B1551663A33FFE7D).] [added: Matters](#s9F89750D30FC5A78911B9031AD6EC851).] | [removed: [60](#s01F8A6AA684056B7B1551663A33FFE7D)] [added: [62](#s9F89750D30FC5A78911B9031AD6EC851)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s8BFB97D83C9A51A89C24145058A9858A).] [added: Independence](#s07EC8ECA3EB354EE927CF314148FFCAA).] | [removed: [60](#s8BFB97D83C9A51A89C24145058A9858A)] [added: [62](#s07EC8ECA3EB354EE927CF314148FFCAA)] |

| Item 14. | [Principal [removed: Accountant] [added: Accounting] Fees and [removed: Services](#sC3588D1796C0588FB31AE585AAAF52A9).] [added: Services](#s56E238DB2CD7513AB28B626492C7D983).] | [removed: [60](#sC3588D1796C0588FB31AE585AAAF52A9)] [added: [62](#s56E238DB2CD7513AB28B626492C7D983)] |

| Item 15. | [removed: [Exhibits and] [added: [Exhibits,] Financial Statement [removed: Schedules](#s34f00102c64747718d9005c55fd9fa7d).] [added: Schedules](#s37AFB7123F265C2E94DDB1C973A321B6).] | [removed: [60](#s34f00102c64747718d9005c55fd9fa7d)] [added: [62](#s37AFB7123F265C2E94DDB1C973A321B6)] |

| Item 16. | [Form 10-K [removed: Summary](#s7e765c58578141e89c28602bba378dfa).] [added: Summary](#sA236D2C573615D0C80202AFE7801FA4B).] | [removed: [64](#s7e765c58578141e89c28602bba378dfa)] [added: [66](#sA236D2C573615D0C80202AFE7801FA4B)] |

10-K 1 hd_10kx02032019.htm 10-K

(Mark One)

For the transition period from to

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| --- | --- | --- | --- | --- |

| | | | | |

| | | | | |

| [PART I](#sB4711ECF2BC854E1819DDD63B3F70915) | | |

| [PART II](#sBF259971135E531295F0423E14286E01) | | |

| [PART IV](#s4FA07EE9590659EC9CAFA0B501A3486F) | | |

| [SIGNATURES](#sA4A8E56A8F605DDCBE1BB489CE980F46) | | [67](#sA4A8E56A8F605DDCBE1BB489CE980F46) |

| | | |

| CDP | | The not-for-profit organization formerly known as the Carbon Disclosure Project |

| CFL | | Compact fluorescent light |

| FSC | | Forest Stewardship Council |

10-K 1 hd_10k01282018.htm 10-K

________________________________________

| | |

| --- | --- |

(Check one):

| [PART I](#s4FCE6AE6F53F511CB09BF94334F86EE5) | | |

| [PART II](#s53DBC4BBB19C5CFC8FEB33104F42C12C) | | |

| [PART IV](#sBE68262E69035DBDA75C344BA605BE00) | | |

| | [Signatures](#sECBBA2B41C5F50C18B61AFEFA0B5F1FE) | [65](#sECBBA2B41C5F50C18B61AFEFA0B5F1FE) |

| ASC | | Accounting Standards Codification |

| Compact Power | | Compact Power Equipment, Inc. |

| HD Supply | | HD Supply Holdings, Inc. |

| SER | | Social and Environmental Responsibility |

The percentage of our owned [removed: and] [added: versus] leased facilities that were operating at the end of fiscal [removed: 2017,] [added: 2018,] along with the total square footage, follows.

| Warehouses and distribution centers (2) | 4 | % | | 96 | % | | [removed: 55.0] [added: 56.1] | |

| Offices and other | [removed: 21] [added: 22] | % | | [removed: 79] [added: 78] | % | | 4.3 | |

| (2) | Located in [removed: 48 states or] [added: 49 states, territories, and] provinces. |

Our U.S. store locations at the end of fiscal [removed: 2017] [added: 2018] follow.

| U.S. | Stores | | | [added: U.S.] | Stores | |

| Connecticut | [removed: 29] [added: 30] | | | New York | 100 | |

| | | | | Total U.S. | [removed: 1,980] [added: 1,981] | |

Our store locations outside of the U.S. at the end of fiscal [removed: 2017] [added: 2018] follow.

| British Columbia | 26 | | | Baja California | [removed: 5] [added: 6] | |

| | | | | Queretaro | [removed: 3] [added: 4] | |

| | | | | Total Mexico | [removed: 122] [added: 124] | |

| Stores (1) | 90 | % | | 10 | % | | 237.7 | |

| Total | | | | | | | 298.1 | |

| Stores (1) | 90 | % | | 10 | % | | 237.4 | |

| Total | | | | | | | 296.7 | |

At March [removed: 2, 2018,] [added: 8, 2019,] there were approximately [removed: 114,000] [added: 110,000] holders of record of our common stock and approximately [removed: 2,053,000] [added: 2,561,000] additional "street name" holders whose shares are held of record by banks, brokers, and other financial institutions.

The graph assumes $100 was invested at the closing price of our common stock on the NYSE and in each index on the last trading day of fiscal [removed: 2012,] [added: 2013] and assumes that all dividends were reinvested on the date paid.

[removed: ][added: ]

| [added: |] —●— | The Home Depot | —u— | S&P Retail Composite Index | —■— | S&P 500 Index | [removed: |]

| | February [removed: 3, 2013 | | | | February] 2, 2014 | | | | February 1, 2015 | | | | January 31, 2016 | | | | January 29, 2017 | | | | January 28, 2018 | | | [added: | February 3, 2019 | | |]

The number and average price of shares purchased in each fiscal month of the fourth quarter of fiscal [removed: 2017] [added: 2018] follow.

| Period | [removed: |] Total Number of Shares [removed: Purchased (1)] [added: Purchased(1)] | | | Average Price Paid Per [removed: Share (1)] [added: Share(1)] | | | | Total Number of Shares Purchased as Part of Publicly Announced [removed: Program (2)] [added: Program(2)] | | | Dollar Value of Shares that May Yet Be Purchased Under the [removed: Program (2)] [added: Program(2)] | | |

| (2) | In [removed: February] [added: December] 2017, our Board of Directors authorized a $15.0 billion share repurchase [removed: program that replaced the previous authorization,] [added: program,] of which approximately [removed: $9.1] [added: $2.9] billion remained [removed: available] at the end of [removed: November 2017.] [added: fiscal 2018.] In [removed: December 2017,] [added: February 2019,] our Board of Directors authorized a new $15.0 billion share repurchase program that replaced the [removed: February 2017] [added: previous] authorization. This new [removed: repurchase] program does not have a prescribed expiration date. [removed: At the end of fiscal 2017, approximately $12.9 billion of the December 2017 authorization remained available.] |

During the fourth quarter of fiscal [removed: 2017,] [added: 2018,] we issued [removed: 471] [added: 530] 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 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 fourth quarter of fiscal [removed: 2017.][added: 2018.]

During the fourth quarter of fiscal [removed: 2017,] [added: 2018,] we credited [removed: 1,045] [added: 11,989] deferred stock units to participant accounts under the Restoration Plan pursuant to an exemption from the registration requirements of the Securities Act for involuntary, non-contributory plans.

| The Home Depot | $ | 100.00 | | | $ | 138.83 | | | $ | 170.59 | | | $ | 191.64 | | | $ | 293.71 | | | $ | 267.16 | |

| S&P Retail Composite Index | 100.00 | | | | 120.09 | | | | 140.26 | | | | 166.28 | | | | 241.50 | | | | 254.29 | | |

| S&P 500 Index | 100.00 | | | | 114.22 | | | | 113.45 | | | | 137.11 | | | | 175.09 | | | | 168.30 | | |

| | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| October 29, 2018 - November 25, 2018: | 5,379,057 | | | $ | 176.92 | | | 5,375,064 | | | $ | 6,494,055,865 | |

| November 26, 2018 - December 23, 2018: | 8,460,498 | | | 172.63 | | | | 8,454,414 | | | 5,034,627,517 | | |

| December 24, 2018 - February 3, 2019: | 11,974,922 | | | 175.35 | | | | 11,917,918 | | | 2,945,026,439 | | |

| Total | 25,814,477 | | | 174.78 | | | | 25,747,396 | | | | | |

The table below sets forth the high and low closing sales prices of our common stock on the NYSE and the quarterly cash dividend declared per share for the periods indicated.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Price Range | | | | | | | | Cash Dividend Declared Per Share | | |

| | High | | | | Low | | | | | | |

| Fiscal 2017: | | | | | | | | | | | |

| First quarter ended April 30, 2017 | $ | 156.12 | | | $ | 136.49 | | | $ | 0.89 | |

| Second quarter ended July 30, 2017 | 158.81 | | | | 144.58 | | | | 0.89 | | |

| Third quarter ended October 29, 2017 | 167.65 | | | | 147.49 | | | | 0.89 | | |

| Fourth quarter ended January 28, 2018 | 207.23 | | | | 162.71 | | | | 1.03 | | |

| Fiscal 2016: | | | | | | | | | | | |

| First quarter ended May 1, 2016 | $ | 136.80 | | | $ | 111.85 | | | $ | 0.69 | |

| Second quarter ended July 31, 2016 | 138.24 | | | | 124.67 | | | | 0.69 | | |

| Third quarter ended October 30, 2016 | 138.77 | | | | 122.26 | | | | 0.69 | | |

| Fourth quarter ended January 29, 2017 | 138.46 | | | | 119.89 | | | | 0.89 | | |

| The Home Depot | $ | 100.00 | | | $ | 116.59 | | | $ | 161.86 | | | $ | 198.89 | | | $ | 223.43 | | | $ | 342.43 | |

| S&P Retail Composite Index | 100.00 | | | | 125.28 | | | | 150.45 | | | | 175.72 | | | | 208.32 | | | | 302.55 | | |

| S&P 500 Index | 100.00 | | | | 119.90 | | | | 136.95 | | | | 136.03 | | | | 164.40 | | | | 209.93 | | |

Since the inception of our initial share repurchase program in fiscal 2002 through the end of fiscal 2017, we have repurchased shares of our common stock having a value of approximately $75.1 billion.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Oct. 30, 2017 – Nov. 26, 2017 | | 753,441 | | | $ | 198.52 | | | 739,162 | | | $ | 9,052,805,480 | |

| Nov. 27, 2017 – Dec. 24, 2017 | | 3,906,875 | | | 184.34 | | | | 3,905,783 | | | 14,280,001,110 | | |

| Dec. 25, 2017 – Jan. 28, 2018 | | 6,824,118 | | | 195.67 | | | | 6,822,816 | | | 12,945,001,270 | | |

| Total | | 11,484,434 | | | 192.00 | | | | 11,467,761 | | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#sC174AA25EC565F93BA8F61B331E63BA2)] [added: Firm](#s177D98CB76655FA9AFD38A312DA23CDF)] | | [removed: [30](#sC174AA25EC565F93BA8F61B331E63BA2)] [added: [30](#s177D98CB76655FA9AFD38A312DA23CDF)] |

| [Consolidated Balance [removed: Sheets](#s89A1997399A75C598341884EAF92ACC8)] [added: Sheets](#sD657D90451BD501E88301B9FC69093FB)] | | [removed: [31](#s89A1997399A75C598341884EAF92ACC8)] [added: [31](#sD657D90451BD501E88301B9FC69093FB)] |

| [Consolidated Statements of [removed: Earnings](#sB43F9282A3465815A246DC25D0C36D17)] [added: Earnings](#s341FB55916085C83B3D59EADCC88FC35)] | | [removed: [32](#sB43F9282A3465815A246DC25D0C36D17)] [added: [32](#s341FB55916085C83B3D59EADCC88FC35)] |

| [Consolidated Statements of Comprehensive [removed: Income](#s4EEA0043B0045477916ACF6A0B486080)] [added: Income](#s1F298AB5CB3E5C3FAE42A0E74EB39B88)] | | [removed: [33](#s4EEA0043B0045477916ACF6A0B486080)] [added: [33](#s1F298AB5CB3E5C3FAE42A0E74EB39B88)] |

| [Consolidated Statements of Stockholders' [removed: Equity](#scdb4b00891374f919b64994a95189b82)] [added: Equity](#s7D2DEB95FE005F66888A1BD7253A5972)] | | [removed: [34](#scdb4b00891374f919b64994a95189b82)] [added: [34](#s7D2DEB95FE005F66888A1BD7253A5972)] |

| [Consolidated Statements of Cash [removed: Flows](#sB63A8FE7C6D252EC9571DE696DD7F08F)] [added: Flows](#s84E3A61E3F965C05B7C6FB2DA0DE0ED1)] | | [removed: [35](#sB63A8FE7C6D252EC9571DE696DD7F08F)] [added: [35](#s84E3A61E3F965C05B7C6FB2DA0DE0ED1)] |

| [Notes to Consolidated Financial [removed: Statements](#s8DCBAAB0F01C5F468FC170CFEA7BECE3)] [added: Statements](#s0A1FEB0DF78050D1BD93A7CEEBBE7D57)] | | [removed: [36](#s8DCBAAB0F01C5F468FC170CFEA7BECE3)] [added: [36](#s0A1FEB0DF78050D1BD93A7CEEBBE7D57)] |

| [Note 1. Summary of Significant Accounting [removed: Policies](#s93D37013B5F358DD8ACEE0892CAF3389)] [added: Policies](#s087397B3AD7A56C3AA31D78C4485B5CF)] | | [removed: [36](#s93D37013B5F358DD8ACEE0892CAF3389)] [added: [36](#s087397B3AD7A56C3AA31D78C4485B5CF)] |

| [Note 3. Property and [removed: Leases](#sFC4A5CE4C0CA5522BFB3556DEBFD8476)] [added: Leases](#s992E82EE1A555AB69AB217713443B81F)] | | [removed: [43](#sFC4A5CE4C0CA5522BFB3556DEBFD8476)] [added: [45](#s992E82EE1A555AB69AB217713443B81F)] |

| [Note 4. Debt and Derivative [removed: Instruments](#s0681E43602B45CA0BD83E10307DC1A26)] [added: Instruments](#s389F5318012651CFACB4B91B48BA5BE6)] | | [removed: [44](#s0681E43602B45CA0BD83E10307DC1A26)] [added: [46](#s389F5318012651CFACB4B91B48BA5BE6)] |

| [Note 5. Income [removed: Taxes](#sE734C72BFB8A597EA0FC04045415431C)] [added: Taxes](#sC22377C2EF0B5DFCBA253BA0F77EAEBF)] | | [removed: [47](#sE734C72BFB8A597EA0FC04045415431C)] [added: [49](#sC22377C2EF0B5DFCBA253BA0F77EAEBF)] |

| [Note 6. Stockholders' [removed: Equity](#s77286A9FC7C459B8AF7811E377CFB51F)] [added: Equity](#s9421ECBF1CCE59389D33DFCB28C40F73)] | | [removed: [51](#s77286A9FC7C459B8AF7811E377CFB51F)] [added: [53](#s9421ECBF1CCE59389D33DFCB28C40F73)] |

| [Note 7. Fair Value [removed: Measurements](#sCFC4DF6C45D852E58446F83C03BE27A3)] [added: Measurements](#sEA7646CE0C1B5DF0952B07B7E5212806)] | | [removed: [51](#sCFC4DF6C45D852E58446F83C03BE27A3)] [added: [53](#sEA7646CE0C1B5DF0952B07B7E5212806)] |

| [Note [removed: 8.] [added: 9.] Employee [removed: Stock Plans](#s260BDE13DAE0537E81A13AB1D9742B52)] [added: Benefit Plans](#s84E1132BFAF15988977D5A35AD10F3D5)] | | [removed: [52](#s260BDE13DAE0537E81A13AB1D9742B52)] [added: [57](#s84E1132BFAF15988977D5A35AD10F3D5)] |

| [Note 10. Weighted Average Common [removed: Shares](#sF46075CDC7AC5DC197F9B15F1D50D2FE)] [added: Shares](#sEAA67D2245055CF2A6D905EAB1E7FF17)] | | [removed: [55](#sF46075CDC7AC5DC197F9B15F1D50D2FE)] [added: [57](#sEAA67D2245055CF2A6D905EAB1E7FF17)] |

| [Note 11. Commitments and [removed: Contingencies](#sB8EA4A977AA45B52B09C1F90E2CD364C)] [added: Contingencies](#s917C66CA5267552B9201E47474735B12)] | | [removed: [55](#sB8EA4A977AA45B52B09C1F90E2CD364C)] [added: [57](#s917C66CA5267552B9201E47474735B12)] |

| [Note [removed: 14.] [added: 12.] Quarterly Financial Data [removed: (Unaudited)](#sB107D9120C3A500E8CADA02E47B6624C)] [added: (Unaudited)](#sD0EC56035BC95A7BB988A30AE0137839)] | | [removed: [56](#sB107D9120C3A500E8CADA02E47B6624C)] [added: [58](#sD0EC56035BC95A7BB988A30AE0137839)] |

We have audited the accompanying Consolidated Balance Sheets of The Home Depot, Inc. and Subsidiaries as of [removed: January 28, 2018] [added: February 3, 2019] and January [removed: 29, 2017,] [added: 28, 2018,] and the related Consolidated Statements of Earnings, Comprehensive Income, Stockholders’ Equity, and Cash Flows for each of the fiscal years in the [removed: three-year] [added: three‑year] period ended [removed: January 28, 2018] [added: February 3, 2019,] and the related notes (collectively, the [removed: "Consolidated] [added: “Consolidated] Financial [removed: Statements").][added: Statements”).]

In our opinion, the Consolidated Financial Statements present fairly, in all material respects, the financial position of The Home Depot, Inc. and Subsidiaries as of [removed: January 28, 2018] [added: February 3, 2019] and January [removed: 29, 2017,] [added: 28, 2018,] and the results of their operations and their cash flows for each of the fiscal years in the [removed: three-year] [added: three‑year] period ended [removed: January 28, 2018,] [added: February 3, 2019,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [removed: ("PCAOB"),] [added: (“PCAOB”),] The Home Depot, Inc.’s internal control over financial reporting as of [removed: January 28, 2018,] [added: February 3, 2019,] based on criteria established in Internal Control [removed: –] [added: -] Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March [removed: 22, 2018] [added: 28, 2019] expressed an unqualified opinion on the effectiveness of the [removed: Company's] [added: Company’s] internal control over financial reporting.

| in millions, except per share data | [removed: January 28, 2018] [added: February 3, 2019] | | | | January [removed: 29, 2017] [added: 28, 2018] | | |

| Cash and cash equivalents | $ | [removed: 3,595] [added: 1,778] | | | $ | [removed: 2,538] [added: 3,595] | |

| Receivables, net | [removed: 1,952] [added: 1,936] | | | | [removed: 2,029] [added: 1,952] | | |

| Merchandise inventories | [removed: 12,748] [added: 13,925] | | | | [removed: 12,549] [added: 12,748] | | |

| Other current assets | [removed: 638] [added: 890] | | | | [removed: 608] [added: 638] | | |

| Total current assets | [removed: 18,933] [added: 18,529] | | | | [removed: 17,724] [added: 18,933] | | |

| Net property and equipment | [removed: 22,075] [added: 22,375] | | | | [removed: 21,914] [added: 22,075] | | |

| Goodwill | [removed: 2,275] [added: 2,252] | | | | [removed: 2,093] [added: 2,275] | | |

| Other assets | [removed: 1,246] [added: 847] | | | | [removed: 1,235] [added: 1,246] | | |

| Total assets | $ | [removed: 44,529] [added: 44,003] | | | $ | [removed: 42,966] [added: 44,529] | |

| Short-term debt | $ | [removed: 1,559] [added: 1,339] | | | $ | [removed: 710] [added: 1,559] | |

| Accounts payable | [removed: 7,244] [added: 7,755] | | | | [removed: 7,000] [added: 7,244] | | |

| Accrued salaries and related expenses | [removed: 1,640] [added: 1,506] | | | | [removed: 1,484] [added: 1,640] | | |

| Sales taxes payable | [removed: 520] [added: 656] | | | | [removed: 508] [added: 520] | | |

| Deferred revenue | [removed: 1,805] [added: 1,782] | | | | [removed: 1,669] [added: 1,805] | | |

| Income taxes payable | [removed: 54] [added: 11] | | | | [removed: 25] [added: 54] | | |

| Current installments of long-term debt | [removed: 1,202] [added: 1,056] | | | | [removed: 542] [added: 1,202] | | |

| Other accrued expenses | [removed: 2,170] [added: 2,611] | | | | [removed: 2,195] [added: 2,170] | | |

| Total current liabilities | [removed: 16,194] [added: 16,716] | | | | [removed: 14,133] [added: 16,194] | | |

| Long-term debt, excluding current installments | [removed: 24,267] [added: 26,807] | | | | [removed: 22,349] [added: 24,267] | | |

| [Note 2. Net Sales and Segment Reporting](#sF4593FEB7A875B41A16A5AD84FAA1531) | | [43](#sF4593FEB7A875B41A16A5AD84FAA1531) |

| [Note 8. Stock-Based Compensation](#sA8DABB280A625DAA9D2086614FE092F9) | | [54](#sA8DABB280A625DAA9D2086614FE092F9) |

March 28, 2019

| Impairment loss | 247 | | | | — | | | | — | | |

Fiscal 2018 includes 53 weeks.

Fiscal 2017 and fiscal 2016 include 52 weeks.

| Cumulative effect of accounting change | 75 | | | | — | | | | — | | |

| Net earnings | 11,121 | | | | 8,630 | | | | 7,957 | | |

| Foreign currency translation adjustments | (267 | | ) | | 311 | | | | (3 | | ) |

| Cash flow hedges, net of tax | 53 | | | | (1 | | ) | | 34 | | |

—————

Fiscal 2018 includes 53 weeks.

Fiscal 2017 and fiscal 2016 include 52 weeks.

| Net earnings | $ | 11,121 | | | $ | 8,630 | | | $ | 7,957 | |

| Impairment loss | 247 | | | | — | | | | — | | |

| Other operating activities | (103 | | ) | | 420 | | | | 4 | | |

| Cash dividends | (4,704 | | ) | | (4,212 | | ) | | (3,404 | | ) |

—————

Fiscal 2018 includes 53 weeks.

Fiscal 2017 and fiscal 2016 include 52 weeks.

THE HOME DEPOT, INC.

Fiscal 2018 includes 53 weeks compared to fiscal 2017 and fiscal 2016, both of which include 52 weeks.

| in millions | February 3, 2019 | | | | January 28, 2018 | | |

We categorize leases at their inception as either operating or capital leases.

Lease agreements include certain retail locations, office space, warehouse and distribution space, equipment, and vehicles.

Most of these leases are operating leases.

However, certain retail locations and equipment are leased under capital leases.

Total rent expense for fiscal 2018, fiscal 2017, and fiscal 2016 is net of an immaterial amount of sublease income.

| Disposition | (15 | | ) | | — | | | | — | | |

—————

(1) Includes purchase price allocation adjustments.

In January 2019, we recognized a pretax impairment loss of $247 million for certain trade names as a result of a shift in strategy for our MRO business.

Our remaining finite-lived and indefinite-lived intangibles were not material at February 3, 2019.

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

Net Sales

On January 29, 2018, we adopted ASU No. 2014-09 using the modified retrospective transition method which requires that we recognize revenue differently pre- and post-adoption.

See "—Recently Adopted Accounting Pronouncements—ASU No. 2014-09" below for more information.

Fiscal 2018 and Subsequent Periods.

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

The liability for sales returns, including the impact to gross profit, is estimated based on historical return levels and recognized at the transaction price.

| [Note 2. Segment Reporting](#se076b4b5c4fa4a6bb842032aabde750d) | | [42](#se076b4b5c4fa4a6bb842032aabde750d) |

| [Note 9. Employee Benefit Plans](#s2CA5E4EAE8FF547695F8224813AAE4CD) | | [54](#s2CA5E4EAE8FF547695F8224813AAE4CD) |

| [Note 12. Interline Acquisition](#sEF62FFF086E557B5B2E71ACC063F3ABE) | | [56](#sEF62FFF086E557B5B2E71ACC063F3ABE) |

| [Note 13. Investment in HD Supply](#s4668F31136915B9E957F31E4FFEE39EF) | | [56](#s4668F31136915B9E957F31E4FFEE39EF) |

March 22, 2018

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| in millions, except per share data | Fiscal | | | | Fiscal | | | | Fiscal | | |

| Cash dividends ($3.56 per share in fiscal 2017, $2.76 per share in fiscal 2016, and $2.36 per share in fiscal 2015) | (4,212 | | ) | | (3,404 | | ) | | (3,031 | | ) |

| Gain on sales of investments | — | | | | — | | | | (144 | | ) |

| Changes in assets and liabilities, net of acquisition effects: | | | | | | | | | | | |

| Proceeds from sales of investments | — | | | | — | | | | 144 | | |

| | |

| --- | --- |

Revenues

Gift card breakage income is recognized based upon historical redemption patterns and represents the balance of gift cards for which we believe the likelihood of redemption by the customer is remote.

Gift card breakage income, which is recognized as a reduction to SG&A, follows.

| Gift card breakage income | $ | 39 | | | $ | 34 | | | $ | 27 | |

The sum of these three components is referred to as the cost of credit of the PLCC program.

and expenses for financial statement purposes versus tax purposes.

ASU No. 2016-09.

In the first quarter of fiscal 2017, we 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 deficiencies related to share-based payment awards 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 classified as an operating activity in our consolidated statements of cash flows in the period in which they occur.

Previously, these amounts were reflected as a financing activity.

Cash paid to tax authorities when directly withholding shares for tax withholding purposes will continue to be classified as a financing activity in our consolidated statements of cash flows.

We have adopted the applicable provisions of ASU No. 2016-09 prospectively.

As a result of the adoption of ASU No. 2016-09, we recognized $106 million of excess tax benefits related to share-based payment awards in our provision for income taxes during fiscal 2017.

The recognition of these benefits contributed $0.09 to diluted earnings per share in fiscal 2017.

partial-term fair value hedges of interest rate risk.

Early adoption is permitted.

ASU No. 2016-02 is effective for us in the first quarter of fiscal 2019 using a modified retrospective approach.

We are evaluating and planning for the adoption and implementation of ASU No. 2016-02.

ASU No. 2014-09 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. 2014-09 is effective for us in the first quarter of fiscal 2018.

This adoption will not materially impact our consolidated financial statements or related disclosures.

We are in the process of implementing changes to our processes, controls and systems in support of our adoption of ASU No. 2014-09.

(1) Certain sales were reclassified from products to services in fiscal 2017.

| Appliances | $ | 8,147 | | | 8.1 | | | $ | 7,362 | | | 7.8 | | | $ | 6,539 | | | 7.4 | |

| Building Materials | 7,342 | | | | 7.3 | | | 6,774 | | | | 7.2 | | | 6,416 | | | | 7.2 | |

There have not been any changes in our internal control over financial reporting during the fiscal quarter ended [removed: January 28, 2018] [added: February 3, 2019] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of [removed: January 28, 2018] [added: February 3, 2019] based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of [removed: January 28, 2018] [added: February 3, 2019] in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

The effectiveness of our internal control over financial reporting as of [removed: January 28, 2018] [added: February 3, 2019] has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.

We have audited The Home Depot, Inc. and [removed: Subsidiaries'] [added: Subsidiaries’] internal control over financial reporting as of [removed: January 28, 2018,] [added: February 3, 2019,] based on criteria established in Internal Control [removed: –] [added: -] Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of [removed: January 28, 2018,] [added: February 3, 2019,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) [removed: ("PCAOB"),] [added: (“PCAOB”),] the Consolidated Balance Sheets of [removed: the] [added: The] Home Depot, Inc. and Subsidiaries as of [removed: January 28, 2018] [added: February 3, 2019] and January [removed: 29, 2017,] [added: 28, 2018,] and the related Consolidated Statements of Earnings, Comprehensive Income, [removed: Stockholders'] [added: Stockholders’] Equity, and Cash Flows for each of the fiscal years in the three-year period ended [removed: January 28, 2018,] [added: February 3, 2019,] and the related notes (collectively, the [removed: "Consolidated] [added: “Consolidated] Financial [removed: Statements"),] [added: Statements”),] and our report dated March [removed: 22, 2018] [added: 28, 2019] expressed an unqualified opinion on those Consolidated Financial Statements.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with [added: U.S.] generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

March 28, 2019

March 22, 2018

Information required by this item, other than the information regarding the executive officers set forth below, is incorporated by reference to the sections entitled "Election of Directors," "Corporate Governance," "General," and "Audit Committee Report" in our Proxy Statement for the [removed: 2018] [added: 2019] Annual Meeting of Shareholders [removed: (the "Proxy] [added: ("Proxy] Statement").

ANN-MARIE CAMPBELL, age [removed: 52,] [added: 53,] has been Executive Vice President – U.S. Stores since February 2016.

CAREY, age [removed: 53,] [added: 54,] has been Executive Vice President and Chief Information Officer since September 2008.

DECKER, age [removed: 55,] [added: 56,] has been Executive Vice President – Merchandising since August 2014.

HOLIFIELD, age [removed: 61,] [added: 62,] has been Executive Vice President – Supply Chain and Product Development since February 2014.

HOURIGAN, age [removed: 61,] [added: 62,] has been Executive Vice President – Human Resources since June 2017.

LENNIE, age [removed: 62,] [added: 63,] has been Executive Vice President – Outside Sales & Service since [removed: August] [added: July] 2015.

MENEAR, age [removed: 60,] [added: 61,] has been our Chief Executive Officer and President since November 2014 and our Chairman since February 2015.

He previously served as our President, U.S. Retail from February 2014 [removed: to] [added: through] October 2014.

[added: From 1997] through August 2003, Mr. Menear served in various management and vice president level positions in the Company’s merchandising department, including Merchandising Vice President of Hardware, Merchandising Vice President of the Southwest Division, and Divisional Merchandise Manager of the Southwest Division.

TERESA WYNN ROSEBOROUGH, age [removed: 59,] [added: 60,] has been Executive Vice President, General Counsel and Corporate Secretary since November 2011.

TOMÉ, age [removed: 61,] [added: 62,] has been Chief Financial Officer since May 2001 and Executive Vice President – Corporate Services since January 2007.

Prior thereto, Ms. Tomé served as Senior Vice President – Finance and Accounting/Treasurer from [removed: February] [added: April] 2000 through May 2001 and as Vice President and Treasurer from 1995 through [removed: February] [added: April] 2000.

She also serves as a member of the Advisory Board of certain Fidelity [removed: funds, and in fiscal 2017, she served as Trustee of certain Fidelity] funds.

From 1997

| • | Consolidated Balance Sheets as of [removed: January 28, 2018] [added: February 3, 2019] and January [removed: 29, 2017;] [added: 28, 2018;] |

| • | Consolidated Statements of Earnings for fiscal [removed: 2017,] [added: 2018,] fiscal [removed: 2016,] [added: 2017,] and fiscal [removed: 2015;] [added: 2016;] |

| • | Consolidated Statements of Comprehensive Income for fiscal [removed: 2017,] [added: 2018,] fiscal [removed: 2016,] [added: 2017,] and fiscal [removed: 2015;] [added: 2016;] |

| • | Consolidated Statements of Stockholders’ Equity for fiscal [removed: 2017,] [added: 2018,] fiscal [removed: 2016,] [added: 2017,] and fiscal [removed: 2015;] [added: 2016;] |

| • | Consolidated Statements of Cash Flows for fiscal [removed: 2017,] [added: 2018,] fiscal [removed: 2016,] [added: 2017,] and fiscal [removed: 2015;] [added: 2016;] and |

| 3.2 | | [By-Laws of The Home Depot, Inc. (Amended and Restated Effective [removed: March 3, 2016)](http://www.sec.gov/Archives/edgar/data/354950/000035495016000058/hd_exx32x03022016.htm)] [added: February 28, 2019)](http://www.sec.gov/Archives/edgar/data/354950/000035495019000005/hd_exx32x02282019.htm)] | | Form 8-K filed on March [removed: 8, 2016,] [added: 4, 2019,] Exhibit 3.2 |

| 4.17 | | [Form of [removed: Floating Rate] [added: 3.35%] Note due September 15, [removed: 2017](http://www.sec.gov/Archives/edgar/data/354950/000035495015000040/hd_exhibit42x09152015.htm)] [added: 2025](http://www.sec.gov/Archives/edgar/data/354950/000035495015000040/hd_exhibit43x09152015.htm)] | | Form 8-K filed September 15, 2015, Exhibit [removed: 4.2] [added: 4.3] |

| [removed: 4.18] [added: 4.22] | | [Form of [removed: 3.35%] [added: 3.500% Senior] Note due September 15, [removed: 2025](http://www.sec.gov/Archives/edgar/data/354950/000035495015000040/hd_exhibit43x09152015.htm)] [added: 2056](http://www.sec.gov/Archives/edgar/data/354950/000035495016000086/hd_exhibit43x09152016.htm)] | | Form 8-K filed September 15, [removed: 2015,] [added: 2016,] Exhibit 4.3 |

| [removed: 4.19] [added: 4.18] | | [Form of 2.000% Senior Note due April 1, 2021](http://www.sec.gov/Archives/edgar/data/354950/000035495016000053/hd_exhibit42x02122016.htm) | | Form 8-K filed February 12, 2016, Exhibit 4.2 |

| [removed: 4.20] [added: 4.19] | | [Form of 3.000% Senior Note due April 1, 2026](http://www.sec.gov/Archives/edgar/data/354950/000035495016000053/hd_exhibit43x02122016.htm) | | Form 8-K filed February 12, 2016, Exhibit 4.3 |

| [removed: 4.21] [added: 4.20] | | [Form of 4.250% Senior Note due April 1, 2046](http://www.sec.gov/Archives/edgar/data/354950/000035495016000053/hd_exhibit44x02122016.htm) | | Form 8-K filed February 12, 2016, Exhibit 4.4 |

| [removed: 4.22] [added: 4.21] | | [Form of 2.125% Senior Note due September 15, 2026](http://www.sec.gov/Archives/edgar/data/354950/000035495016000086/hd_exhibit42x09152016.htm) | | Form 8-K filed September 15, 2016, Exhibit 4.2 |

| [removed: 4.23] [added: 4.24] | | [Form of [removed: 3.500%] [added: 1.800%] Senior Note due [removed: September 15, 2056](http://www.sec.gov/Archives/edgar/data/354950/000035495016000086/hd_exhibit43x09152016.htm)] [added: June 5, 2020](http://www.sec.gov/Archives/edgar/data/354950/000035495017000020/hd_exhibit43x06052017.htm)] | | Form 8-K filed [removed: September 15, 2016,] [added: June 5, 2017,] Exhibit 4.3 |

| [removed: 4.24] [added: 4.23] | | [Form of Floating Rate Note due June 5, 2020](http://www.sec.gov/Archives/edgar/data/354950/000035495017000020/hd_exhibit42x06052017.htm) | | Form 8-K filed June 5, 2017, Exhibit 4.2 |

| 4.25 | | [Form of [removed: 1.800%] [added: 3.900%] Senior Note due June [removed: 5, 2020](http://www.sec.gov/Archives/edgar/data/354950/000035495017000020/hd_exhibit43x06052017.htm)] [added: 15, 2047](http://www.sec.gov/Archives/edgar/data/354950/000035495017000020/hd_exhibit44x06052017.htm)] | | Form 8-K filed June 5, 2017, Exhibit [removed: 4.3] [added: 4.4] |

| [removed: 4.26] [added: 4.29] | | [Form of 3.900% Senior Note due [removed: June 15, 2047](http://www.sec.gov/Archives/edgar/data/354950/000035495017000020/hd_exhibit44x06052017.htm)] [added: December 6, 2028](http://www.sec.gov/Archives/edgar/data/354950/000035495018000069/hd_exhibit44x12062018.htm)] | | Form 8-K filed [removed: June 5, 2017,] [added: December 6, 2018,] Exhibit 4.4 |

| [removed: 4.27] [added: 4.26] | | [Form of 2.800% Note due September 14, 2027](http://www.sec.gov/Archives/edgar/data/354950/000035495017000037/hd_exhibit42x09142017.htm) | | Form 8-K filed September 14, 2017, Exhibit 4.2 |

| 10.13 | † | [Form of [added: Executive Officer] Nonqualified Stock Option [added: Award] Pursuant to The Home Depot, Inc. 2005 Omnibus Stock Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/354950/000110465907022771/a07-9119_1ex10d6.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/354950/000119312509053941/dex104.htm)] | | Form 8-K filed on March [removed: 27, 2007,] [added: 13, 2009,] Exhibit [removed: 10.6] [added: 10.4] |

| [removed: 10.14] [added: 10.17] | † | [Form of Executive Officer [removed: Nonqualified Stock Option] [added: Equity] Award [added: Agreement (Nonqualified Stock Option)] Pursuant to The Home Depot, Inc. [added: Amended and Restated] 2005 Omnibus Stock Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/354950/000119312509053941/dex104.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495016000058/hd_exx101x03022016.htm)] | | Form 8-K filed on March [removed: 13, 2009,] [added: 8, 2016,] Exhibit [removed: 10.4] [added: 10.1] |

| [removed: 10.15] [added: 10.14] | † | [Form of Deferred Share Award (Nonemployee Director) Pursuant to The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/354950/000110465907083581/a07-29019_1ex10d1.htm) | | Form 8-K filed on November 15, 2007, Exhibit 10.1 |

| [removed: 10.16] [added: 10.15] | † | [Form of Equity Award Terms and Conditions Agreement Pursuant to The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/354950/000119312511053677/dex101.htm) | | Form 8-K filed on March 2, 2011, Exhibit 10.1 |

| [removed: 10.17] [added: 10.16] | † | [Form of Executive Officer Equity Award Terms and Conditions Agreement Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495013000005/hd_exx101x03062013.htm) | | Form 8-K filed on March 6, 2013, Exhibit 10.1 |

| 10.18 | † | [Form of Executive Officer Equity Award Agreement [removed: (Nonqualified Stock Option)] [added: (Performance Based Restricted Stock)] Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495016000058/hd_exx101x03022016.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495016000058/hd_exx102x03022016.htm)] | | Form 8-K filed on March 8, 2016, Exhibit [removed: 10.1] [added: 10.2] |

| 10.19 | † | [Form of Executive Officer Equity Award Agreement (Performance [removed: Based Restricted Stock)] [added: Shares)] Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495016000058/hd_exx102x03022016.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495016000058/hd_exx103x03022016.htm)] | | Form 8-K filed on March 8, 2016, Exhibit [removed: 10.2] [added: 10.3] |

| [removed: 10.20] [added: 10.24] | † | [Form of Executive Officer Equity Award Agreement (Performance Shares) Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495016000058/hd_exx103x03022016.htm)] [added: Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495019000005/hd_exx101x02272019.htm)] | | Form 8-K filed on March [removed: 8, 2016,] [added: 4, 2019,] Exhibit [removed: 10.3] [added: 10.1] |

| [removed: 10.21] [added: 10.20] | † | [Form of Deferred Share Award (Nonemployee Director) Pursuant to The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495017000005/hd-01292017xexx1021.htm) | | Form 10-K for the fiscal year ended January 29, 2017, Exhibit 10.21 |

| [removed: 10.22] [added: 10.21] | † | [Form of Executive Officer Equity Award Agreement (Performance Shares) Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495018000007/hd_exx101x02222018.htm) | | Form 8-K filed on February 28, 2018, Exhibit 10.1 |

| [removed: 10.23] [added: 10.22] | † | [Form of Executive Officer Equity Award Agreement (Performance Based Restricted Stock) Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495018000007/hd_exx102x02222018.htm) | | Form 8-K filed on February 28, 2018, Exhibit 10.2 |

| [removed: 10.24] [added: 10.23] | † | [Form of Executive Officer Equity Award Agreement (Nonqualified Stock Option) Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan](http://www.sec.gov/Archives/edgar/data/354950/000035495018000007/hd_exx103x02222018.htm) | | Form 8-K filed on February 28, 2018, Exhibit 10.3 |

| [removed: 10.25] [added: 10.27] | † | [Employment Arrangement between Craig A. Menear and The Home Depot, Inc., dated October 16, 2014](http://www.sec.gov/Archives/edgar/data/354950/000035495014000047/hd_exhibit102x11022014.htm) | | Form 10-Q for the fiscal quarter ended November 2, 2014, Exhibit 10.2 |

| [removed: 10.26] [added: 10.28] | † | [Employment Arrangement between Carol B. Tomé and The Home Depot, Inc., dated January 20, 2007](http://www.sec.gov/Archives/edgar/data/354950/000095014407000490/g05150exv10w2.htm) | | Form 8-K/A filed on January 24, 2007, Exhibit 10.2 |

| [removed: 10.27] [added: 10.29] | † | [Code Section 409A Amendment to Employment Arrangement between Carol B. Tomé and The Home Depot, Inc., dated December 21, 2012](http://www.sec.gov/Archives/edgar/data/354950/000035495013000008/hd-232013xexx1022.htm) | | Form 10-K for the fiscal year ended February 3, 2013, Exhibit 10.22 |

| [removed: 10.28] [added: 10.30] | † | [Employment Arrangement between Matthew A. Carey and The Home Depot, Inc., dated August 22, 2008, as amended on September 3, 2008](http://www.sec.gov/Archives/edgar/data/354950/000119312511076501/dex1036.htm) | | Form 10-K for the fiscal year ended January 30, 2011, Exhibit 10.36 |

| [removed: 10.29] [added: 10.31] | † | [Employment Arrangement between Mark Q. Holifield and The Home Depot, Inc., dated February 27, 2014](http://www.sec.gov/Archives/edgar/data/354950/000035495015000008/hd-212015xexx1030.htm) | | Form 10-K for the fiscal year ended February 1, 2015, Exhibit 10.30 |

| [removed: 10.30] [added: 10.32] | † | [Employment Arrangement between [removed: Ann-Marie Campbell] [added: Edward P. Decker] and The Home Depot, Inc., dated [removed: January 12, 2016](http://www.sec.gov/Archives/edgar/data/354950/000035495017000005/hd-01292017xexx1029.htm)] [added: July 29, 2014](http://www.sec.gov/Archives/edgar/data/354950/000035495018000019/hd_01282018xexhibit1031.htm)] | | Form 10-K for the fiscal year ended January [removed: 29, 2017,] [added: 28, 2018,] Exhibit [removed: 10.29] [added: 10.31] |

| 21 | * | [List of Subsidiaries of the [removed: Company](https://www.sec.gov/Archives/edgar/data/354950/000035495018000019/hd_01282018xexhibit21.htm)] [added: Company](https://www.sec.gov/Archives/edgar/data/354950/000035495019000010/hd_exhibit21x02032019.htm)] | | |