Item 1. Financial Statements.

THE HOME DEPOT, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

in millions, except per share data			July 28, 2024						January 28, 2024
Assets
Current assets:
Cash and cash equivalents			$	1,613					$	3,760
Receivables, net			5,503						3,328
Merchandise inventories			23,060						20,976
Other current assets			2,097						1,711
Total current assets			32,273						29,775
Net property and equipment			26,640						26,154
Operating lease right-of-use assets			8,613						7,884
Goodwill			19,414						8,455
Intangible assets, net			9,214						3,606
Other assets			692						656
Total assets			$	96,846					$	76,530
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt			$	2,527					$	—
Accounts payable			13,206						10,037
Accrued salaries and related expenses			2,105						2,096
Sales taxes payable			645						449
Deferred revenue			2,754						2,762
Income taxes payable			40						28
Current installments of long-term debt			1,339						1,368
Current operating lease liabilities			1,242						1,050
Other accrued expenses			4,265						4,225
Total current liabilities			28,123						22,015
Long-term debt, excluding current installments			51,869						42,743
Long-term operating lease liabilities			7,635						7,082
Deferred income taxes			2,074						863
Other long-term liabilities			2,725						2,783
Total liabilities			92,426						75,486
Contingencies (Note 9)
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,799 shares at July 28, 2024 and 1,796 shares at January 28, 2024; outstanding: 993 shares at July 28, 2024 and 992 shares at January 28, 2024			90						90
Paid-in capital			13,731						13,147
Retained earnings			87,357						83,656
Accumulated other comprehensive loss			(787)						(477)
Treasury stock, at cost, 806 shares at July 28, 2024 and 804 shares at January 28, 2024			(95,971)						(95,372)
Total stockholders’ equity			4,420						1,044
Total liabilities and stockholders’ equity			$	96,846					$	76,530

—————

See accompanying notes to consolidated financial statements.

Fiscal Q2 2024 Form 10-Q			1

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

			Three Months Ended												Six Months Ended
in millions, except per share data			July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Net sales			$	43,175					$	42,916					$	79,593					$	80,173
Cost of sales			28,759						28,759						52,744						53,459
Gross profit			14,416						14,157						26,849						26,714
Operating expenses:
Selling, general and administrative			7,144						6,915						13,811						13,270
Depreciation and amortization			738						653						1,425						1,304
Total operating expenses			7,882						7,568						15,236						14,574
Operating income			6,534						6,589						11,613						12,140
Interest and other (income) expense:
Interest income and other, net			(84)						(41)						(141)						(74)
Interest expense			573						469						1,058						943
Interest and other, net			489						428						917						869
Earnings before provision for income taxes			6,045						6,161						10,696						11,271
Provision for income taxes			1,484						1,502						2,535						2,739
Net earnings			$	4,561					$	4,659					$	8,161					$	8,532
Basic weighted average common shares			990						1,000						989						1,005
Basic earnings per share			$	4.61					$	4.66					$	8.25					$	8.49
Diluted weighted average common shares			992						1,003						992						1,008
Diluted earnings per share			$	4.60					$	4.65					$	8.23					$	8.46

—————

See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

			Three Months Ended												Six Months Ended
in millions			July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Net earnings			$	4,561					$	4,659					$	8,161					$	8,532
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments			(249)						168						(259)						247
Cash flow hedges			(60)						2						(51)						4
Total other comprehensive income (loss), net of tax			(309)						170						(310)						251
Comprehensive income			$	4,252					$	4,829					$	7,851					$	8,783

—————

See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

			Three Months Ended												Six Months Ended
in millions			July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Common Stock:
Balance at beginning of period			$	90					$	90					$	90					$	90
Shares issued under employee stock plans, net			—						—						—						—
Balance at end of period			90						90						90						90
Paid-in Capital:
Balance at beginning of period			13,153						12,584						13,147						12,592
Shares issued under employee stock plans, net			466						154						362						35
Stock-based compensation expense			112						104						222						215
Balance at end of period			13,731						12,842						13,731						12,842
Retained Earnings:
Balance at beginning of period			85,027						78,651						83,656						76,896
Net earnings			4,561						4,659						8,161						8,532
Cash dividends			(2,231)						(2,097)						(4,460)						(4,215)
Balance at end of period			87,357						81,213						87,357						81,213
Accumulated Other Comprehensive Income (Loss):
Balance at beginning of period			(478)						(637)						(477)						(718)
Foreign currency translation adjustments, net of tax			(249)						168						(259)						247
Cash flow hedges, net of tax			(60)						2						(51)						4
Balance at end of period			(787)						(467)						(787)						(467)
Treasury Stock:
Balance at beginning of period			(95,972)						(90,326)						(95,372)						(87,298)
Repurchases of common stock			1						(2,017)						(599)						(5,045)
Balance at end of period			(95,971)						(92,343)						(95,971)						(92,343)
Total stockholders’ equity			$	4,420					$	1,335					$	4,420					$	1,335

—————

See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

			Six Months Ended
in millions			July 28, 2024						July 30, 2023
Cash Flows from Operating Activities:
Net earnings			$	8,161					$	8,532
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization, excluding amortization of intangible assets			1,615						1,500
Intangible asset amortization			142						88
Stock-based compensation expense			222						215
Changes in receivables, net			(391)						(492)
Changes in merchandise inventories			(214)						1,751
Changes in other current assets			(339)						(392)
Changes in accounts payable and accrued expenses			1,628						929
Changes in deferred revenue			(31)						10
Changes in income taxes payable			14						(32)
Changes in deferred income taxes			159						(48)
Other operating activities			(60)						144
Net cash provided by operating activities			10,906						12,205
Cash Flows from Investing Activities:
Capital expenditures			(1,566)						(1,697)
Payments for businesses acquired, net			(17,570)						(215)
Other investing activities			38						10
Net cash used in investing activities			(19,098)						(1,902)
Cash Flows from Financing Activities:
Proceeds from short-term debt, net			2,527						—
Proceeds from long-term debt, net of discounts			9,952						—
Repayments of long-term debt			(1,255)						(1,130)
Repurchases of common stock			(649)						(4,954)
Proceeds from sales of common stock			210						175
Cash dividends			(4,460)						(4,215)
Other financing activities			(212)						(142)
Net cash provided by (used in) financing activities			6,113						(10,266)
Change in cash and cash equivalents			(2,079)						37
Effect of exchange rate changes on cash and cash equivalents			(68)						20
Cash and cash equivalents at beginning of period			3,760						2,757
Cash and cash equivalents at end of period			$	1,613					$	2,814
Supplemental Disclosures:
Cash paid for interest, net of interest capitalized			$	982					$	900
Cash paid for income taxes			2,634						2,894
Non-cash acquisition purchase consideration (Note 10)			321						—

—————

See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

**1.**SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements of The Home Depot, Inc., together with its subsidiaries (the “Company,” “Home Depot,” “we,” “our” or “us”), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2023 Form 10-K. There were no significant changes to our significant accounting policies as disclosed in the 2023 Form 10-K.

During the second quarter of fiscal 2024, we completed the acquisition of SRS. Refer to Note 2 and Note 10 for further discussion on the acquisition, including certain impacts of the acquisition on our consolidated financial statements.

Reclassifications

Effective July 28, 2024, we began separately presenting intangible assets, net, on the consolidated balance sheets, which were previously included in the other assets line item. In addition, we began separately presenting intangible asset amortization on the statements of cash flows, which was previously included in the depreciation and amortization line item. Prior period amounts have been reclassified to conform to the current year’s financial statement presentation.

Receivables, net

The following table presents components of receivables, net:

in millions			July 28, 2024						January 28, 2024
Card receivables			$	1,240					$	988
Rebate receivables			1,395						841
Customer receivables			2,296						924
Other receivables			572						575
Receivables, net			$	5,503					$	3,328

Card receivables consist of payments due from financial institutions for the settlement of credit card and debit card transactions. Rebate receivables represent amounts due from vendors for volume and co-op advertising rebates. Customer receivables relate to credit extended directly to certain customers in the ordinary course of business, which increased compared to the beginning of the year as a result of the SRS acquisition. The valuation allowance related to our receivables was not material to our consolidated financial statements at July 28, 2024 or January 28, 2024.

Supplier Finance Programs

We have a supplier finance program whereby participating suppliers may, at their sole discretion, elect to receive payment for one or more of our payment obligations, prior to their scheduled due dates, at a discounted price from participating financial institutions. The payment terms we negotiate with our suppliers are consistent, irrespective of whether a supplier participates in the program, and we are not a party to the agreements between the participating financial institutions and the suppliers in connection with the program. We do not reimburse suppliers for any costs they incur for participation in the program, and we have not pledged any assets as security or provided any guarantees as part of the program. Our outstanding payment obligations under our supplier finance program were $530 million at July 28, 2024 and $514 million at January 28, 2024 and are recorded within accounts payable on the consolidated balance sheets.

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Recent Accounting Pronouncements

We did not adopt any new accounting pronouncements during the six months ended July 28, 2024 that had a material impact on our consolidated financial condition, results of operations or cash flows. There were no significant changes in recently issued accounting pronouncements pending adoption from those disclosed in the 2023 Form 10-K, and those not discussed in the 2023 Form 10-K are either not applicable or are not expected to have a material impact on our consolidated financial condition, results of operations or cash flows.

**2.**SEGMENT REPORTING AND NET SALES

The Company defines its segments on the basis of the way in which internally reported financial information is regularly reviewed by the chief operating decision maker (“CODM”), our President and Chief Executive Officer, to analyze financial performance, make decisions, and allocate resources.

The Company is engaged in the operation of retail stores and sells a wide assortment of building materials, home improvement products, lawn and garden products, décor products, and facilities maintenance, repair and operations products both in stores and online. We also provide a number of services, including home improvement installation services and tool and equipment rental. We currently conduct these operations in the U.S. (including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam), Canada, and Mexico, each of which represents an operating segment. For disclosure purposes, we aggregate these three operating segments into one reportable segment (the Primary segment) due to the similar nature of their operations and economic characteristics.

As discussed in Note 10, in June 2024, we acquired SRS, a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor through its branches located throughout the U.S. SRS is organized as three different lines of business: roofing and complementary building products, landscape, and pool. We have determined each of these three lines of business represents an operating segment, none of which meet the thresholds prescribed under Topic 280 to be deemed a reportable segment.

The following presents a reconciliation of the results of our Primary segment to our consolidated totals:

			Three Months Ended																		Six Months Ended
			July 28, 2024																		July 28, 2024
in millions			Primary Segment						Other						Consolidated						Primary Segment						Other						Consolidated
Net sales			$	41,901					$	1,274					$	43,175					$	78,319					$	1,274					$	79,593
Operating income (1)			6,462						72						6,534						11,541						72						11,613
Interest income and other, net															(84)																		(141)
Interest expense															573																		1,058
Earnings before provision for income taxes															$	6,045																	$	10,696

—————

*(1)*Includes intangible asset amortization expense of $51 million and $103 million for the three and six months ended July 28, 2024, respectively, in our Primary segment, and intangible asset amortization expense of $39 million for both the three and six months ended July 28, 2024 in Other.

“Other” in the table above represents our SRS operations and is reflective of partial period results beginning from the acquisition date of June 18, 2024. Net sales in the Other category relate to the sale of products by SRS, with roofing and related products accounting for approximately 65% of sales in Other during both the three and six months ended July 28, 2024.

Prior to the acquisition of SRS, our total Company consolidated results represented our Primary segment and therefore, a reconciliation to our consolidated totals is not applicable for the three and six months ended July 30, 2023.

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The following table presents our Primary segment major product lines and the related merchandising departments (and related services):

Major Product Line						Merchandising Departments
Building Materials						Building Materials, Electrical, Lumber, Millwork, and Plumbing
Décor						Appliances, Bath, Flooring, Kitchen & Blinds, Lighting, and Paint
Hardlines						Hardware, Indoor Garden, Outdoor Garden, Power, and Storage & Organization

The following table presents net sales by major product line (and related services), as well as Other net sales:

			Three Months Ended												Six Months Ended
in millions			July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Building Materials			$	13,935					$	14,268					$	26,549					$	27,261
Décor			13,591						13,863						25,935						26,567
Hardlines			14,375						14,785						25,835						26,345
Primary segment net sales			41,901						42,916						78,319						80,173
Other net sales (1)			1,274						—						1,274						—
Net sales			$	43,175					$	42,916					$	79,593					$	80,173

—————

(1) Represents SRS net sales since the acquisition date of June 18, 2024. See discussion above for information on the components of Other net sales.

Note: During the first quarter of fiscal 2024, we made certain changes to our merchandising department structure that realign certain merchandising departments across our major product lines. As a result, prior-year amounts have been reclassified to conform with the current-year presentation. These changes had no impact on consolidated net sales.

The following table presents net sales, classified by geography:

			Three Months Ended												Six Months Ended
in millions			July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Net sales – in the U.S.			$	39,513					$	39,191					$	73,082					$	73,698
Net sales – outside the U.S.			3,662						3,725						6,511						6,475
Net sales			$	43,175					$	42,916					$	79,593					$	80,173

The following table presents net sales by products and services:

			Three Months Ended												Six Months Ended
in millions			July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Net sales – products			$	41,605					$	41,361					$	76,683					$	77,249
Net sales – services			1,570						1,555						2,910						2,924
Net sales			$	43,175					$	42,916					$	79,593					$	80,173

Deferred Revenue

For products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. As of July 28, 2024 and January 28, 2024, deferred revenue for products and services was $1.8 billion and $1.7 billion, respectively.

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We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, which generally occurs within six months of gift card issuance. As of July 28, 2024 and January 28, 2024, our performance obligations for unredeemed gift cards were $1.0 billion and $1.1 billion, respectively. Gift card breakage income, which is our estimate of the portion of our outstanding gift card balance not expected to be redeemed, is recognized in net sales and was immaterial during the three and six months ended July 28, 2024 and July 30, 2023.

**3.**PROPERTY AND LEASES

Net Property and Equipment

Net property and equipment included accumulated depreciation and finance lease amortization of $28.3 billion as of July 28, 2024 and $27.1 billion as of January 28, 2024.

Leases

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

in millions			Consolidated Balance Sheet Classification			July 28, 2024						January 28, 2024
Assets:
Operating lease assets			Operating lease right-of-use assets			$	8,613					$	7,884
Finance lease assets (1)			Net property and equipment			2,754						2,840
Total lease assets						$	11,367					$	10,724
Liabilities:
Current:
Operating lease liabilities			Current operating lease liabilities			$	1,242					$	1,050
Finance lease liabilities			Current installments of long-term debt			273						268
Long-term:
Operating lease liabilities			Long-term operating lease liabilities			7,635						7,082
Finance lease liabilities			Long-term debt, excluding current installments			2,923						3,000
Total lease liabilities						$	12,073					$	11,400

—————

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

The following table presents supplemental non-cash information related to leases:

			Six Months Ended
in millions			July 28, 2024						July 30, 2023
Lease assets obtained in exchange for new operating lease liabilities			$	670					$	583
Lease assets obtained in exchange for new finance lease liabilities			74						192

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**4.**GOODWILL AND INTANGIBLE ASSETS

Goodwill

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

in millions			Primary Segment						Other						Consolidated
Goodwill, balance at January 28, 2024			$	8,455					$	—					$	8,455
Acquisitions (1)			—						10,967						10,967
Other (2)			(8)						—						(8)
Goodwill, balance at July 28, 2024			$	8,447					$	10,967					$	19,414

—————

(1) Fiscal 2024 activity represents the preliminary determination of goodwill related to the acquisition of SRS. See Note 10 for details regarding the SRS acquisition.

(2) Primarily reflects the net impact of foreign currency translation as well as immaterial measurement period adjustments related to fiscal 2023 acquisitions.

Intangible Assets

The following table presents information regarding our intangible assets:

			July 28, 2024 (1)																		January 28, 2024
in millions			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Definite-Lived Intangible Assets:
Customer relationships			$	8,795					$	(797)					$	7,998					$	3,425					$	(670)					$	2,755
Trade names			607						(40)						567						227						(25)						202
Other			11						(11)						—						12						(12)						—
Indefinite-Lived Intangible Assets:
Trade names			649												649						649												649
Total Intangible Assets			$	10,062					$	(848)					$	9,214					$	4,313					$	(707)					$	3,606

—————

(1) Fiscal 2024 includes the preliminary allocation of fair value to intangible assets related to the acquisition of SRS. See Note 10 for details regarding the SRS acquisition.

Our intangible asset amortization expense was $90 million and $44 million during the second quarter of fiscal 2024 and 2023, respectively, and $142 million and $88 million during the first six months of fiscal 2024 and 2023, respectively.

The following table presents the estimated future amortization expense related to definite-lived intangible assets as of July 28, 2024:

in millions			Amortization Expense
Fiscal 2024 - remaining			$	282
Fiscal 2025			551
Fiscal 2026			551
Fiscal 2027			542
Fiscal 2028			524
Thereafter			6,115
Total			$	8,565

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**5.**DEBT AND DERIVATIVE INSTRUMENTS

Short-Term Debt

At the beginning of fiscal 2024, we had a commercial paper program that allowed for borrowings up to $5.0 billion. In connection with this program, we had back-up credit facilities with a consortium of banks for borrowings up to $5.0 billion, which consisted of a five-year $3.5 billion credit facility scheduled to expire in July 2027 and a 364-day $1.5 billion credit facility scheduled to expire in July 2024. At January 28, 2024, there were no outstanding borrowings under our commercial paper program or back-up credit facilities.

In May 2024, we increased our commercial paper program from $5.0 billion to $19.5 billion in connection with the anticipated financing of the acquisition of SRS (see Note 10). In May 2024, in connection with the increase in the commercial paper program, we also entered into three additional back-up credit facilities that consisted of a 364-day $3.5 billion credit facility scheduled to expire in May 2025, a three-year $1.0 billion credit facility scheduled to expire in May 2027, and a 364-day $10.0 billion credit facility scheduled to expire in May 2025. The $10.0 billion credit facility also provided that the commitments and any borrowings under this facility would be reduced by the amount of net cash proceeds we received from any future debt issuance.

In June 2024, leading up to the acquisition of SRS on June 18, 2024, we raised commercial paper borrowings of over $15.0 billion to fund the transaction. On June 25, 2024, we received the proceeds from the issuance of $10.0 billion of long-term debt, as further discussed below, and immediately used the proceeds to repay approximately $10.0 billion of these commercial paper borrowings. On June 27, 2024, we terminated the $10.0 billion back-up credit facility, and subsequently reduced our commercial paper program from $19.5 billion to $9.5 billion.

In July 2024, we also completed the renewal of our 364-day $1.5 billion credit facility, extending the maturity from July 2024 to July 2025. As of July 28, 2024, our commercial paper program allowed for borrowings up to $9.5 billion and is supported by $9.5 billion of back-up credit facilities.

All of our short-term borrowings in the first six months of fiscal 2024 were under our commercial paper program, and the maximum amount outstanding at any time was $15.3 billion. At July 28, 2024, we had $2.5 billion of outstanding borrowings under our commercial paper program with a weighted average interest rate of 5.4% and no outstanding borrowings under our back-up credit facilities.

Long-Term Debt

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

• The first tranche consisted of $600 million of floating rate senior notes due December 24, 2025 (the “floating rate notes”). The floating rate notes bear interest at a variable rate determined quarterly equal to the compounded Secured Overnight Borrowing Rate (“SOFR”) plus 33 basis points. Interest on the floating rate notes is due quarterly on March 24, June 24, September 24, and December 24 of each year, beginning on September 24, 2024.

• The second tranche consisted of $900 million of 5.100% senior notes due December 24, 2025 (the “2025 notes”) at a discount of $0.8 million. Interest on the 2025 notes is due semi-annually on June 24 and December 24 of each year, beginning on December 24, 2024.

• The third tranche consisted of $1.5 billion of 5.150% senior notes due June 25, 2026 (the “2026 notes”) at a discount of $1.7 million. Interest on the 2026 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The fourth tranche consisted of $1.0 billion of 4.875% senior notes due June 25, 2027 (the “2027 notes”) at a discount of $3.3 million. Interest on the 2027 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The fifth tranche consisted of $1.25 billion of 4.750% senior notes due June 25, 2029 (the “2029 notes”) at a discount of $8.1 million. Interest on the 2029 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The sixth tranche consisted of $1.0 billion of 4.850% senior notes due June 25, 2031 (the “2031 notes”) at a discount of $7.1 million. Interest on the 2031 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

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• The seventh tranche consisted of $1.75 billion of 4.950% senior notes due June 25, 2034 (the “2034 notes”) at a discount of $16.7 million. Interest on the 2034 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The eighth tranche consisted of $1.5 billion of 5.300% senior notes due June 25, 2054 (the “2054 notes”) at a discount of $23.5 million. Interest on the 2054 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

• The ninth tranche consisted of $500 million of 5.400% senior notes due June 25, 2064 (the “2064 notes”) at a discount of $8.5 million. Interest on the 2064 notes is due semi-annually on June 25 and December 25 of each year, beginning on December 25, 2024.

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

Redemption. The floating rate notes are not redeemable prior to maturity. Each of these fixed rate senior notes may be redeemed by us at any time, in whole or in part, at the redemption price plus accrued and unpaid interest up to the redemption date. With respect to the 2025 notes and 2026 notes, the redemption price is equal to the greater of (1) 100% of the principal amount of the notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the notes that would be due after the related redemption date. With respect to all other fixed rate notes, prior to the relevant Par Call Date, as defined in the respective notes, the redemption price is equal to the greater of (1) 100% of the principal amount of the notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest to the Par Call Date. With respect to all fixed rate notes other than the 2025 and 2026 notes, on or after the relevant Par Call Date, the redemption price is equal to 100% of the principal amount of such notes. Additionally, if a Change in Control Triggering Event occurs, as defined in the notes, holders of all such notes have the right to require us to offer payment, in cash, for those notes equal to 101% of the aggregate principal amount of such notes plus accrued and unpaid interest up to the date of purchase.

The indenture governing these notes does not generally limit our ability to incur additional indebtedness or require us to maintain financial ratios or specified levels of net worth or liquidity. The indenture governing the notes contains various customary covenants; however, none are expected to impact our liquidity or capital resources.

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

Derivative Instruments and Hedging Activities

We had outstanding interest rate swap agreements with combined notional amounts of $5.4 billion at both July 28, 2024 and January 28, 2024. These agreements are accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. At July 28, 2024 and January 28, 2024, the fair values of these agreements totaled $796 million and $858 million, respectively, all of which are recognized within other long-term liabilities on the consolidated balance sheets.

All of our interest rate swap agreements are designated as fair value hedges and meet the shortcut method requirements under GAAP. Accordingly, the changes in the fair values of these agreements offset the changes in the fair value of the hedged long-term debt.

There was no new material hedging activity or material changes to any other hedging arrangements disclosed in our 2023 Form 10-K, and all related activity was immaterial for the periods presented within this report.

Collateral. We generally enter into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. To further limit our credit risk, we enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain derivative instruments exceeds or falls below contractually established thresholds. The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $686 million and $714 million as of July 28, 2024 and January 28, 2024, respectively, which was recorded in other current assets on the consolidated balance sheets. We did not hold any cash collateral as of July 28, 2024 or January 28, 2024.

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**6.**STOCKHOLDERS' EQUITY

Stock Rollforward

The following table presents a reconciliation of the number of shares of our common stock outstanding and cash dividends per share:

shares in millions			Three Months Ended												Six Months Ended
July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Common stock:
Shares at beginning of period			1,798						1,795						1,796						1,794
Shares issued under employee stock plans, net			1						1						3						2
Shares at end of period			1,799						1,796						1,799						1,796
Treasury stock:
Shares at beginning of period			(806)						(788)						(804)						(778)
Repurchases of common stock			—						(7)						(2)						(17)
Shares at end of period			(806)						(795)						(806)						(795)
Shares outstanding at end of period			993						1,001						993						1,001
Cash dividends per share			$	2.25					$	2.09					$	4.50					$	4.18

Share Repurchases

In August 2023, our Board of Directors approved a $15.0 billion share repurchase authorization that replaced the previous authorization of $15.0 billion, which was approved in August 2022. The August 2023 authorization does not have a prescribed expiration date. As of July 28, 2024, approximately $11.7 billion of the $15.0 billion share repurchase authorization remained available. In March 2024, we paused share repurchases in anticipation of the acquisition of SRS (see Note 10).

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

in millions			Three Months Ended												Six Months Ended
July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Total number of shares repurchased			—						7						2						17
Total cost of shares repurchased			$	(1)					$	2,017					$	599					$	5,045

The cost of shares repurchased may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period and net excise taxes incurred on share repurchases.

**7.**FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are:

• Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities;

• Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and

• Level 3: unobservable inputs for which little or no market data exists, therefore requiring management judgment to develop the Company’s own models with estimates and assumptions.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

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

									July 28, 2024												January 28, 2024
in millions									Fair Value (Level 2)																		Fair Value (Level 2)
Derivative agreements – assets									$	—																	$	—
Derivative agreements – liabilities									(796)																		(859)
Total									$	(796)																	$	(859)

The fair values of our derivative instruments are determined using an income approach and Level 2 inputs, which primarily include the respective interest rate forward curves and discount rates. Our derivative instruments are discussed further in Note 5.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Long-lived assets, goodwill, and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment. We did not have any material assets or liabilities that were measured and recognized at fair value on a nonrecurring basis during the three and six months ended July 28, 2024 or July 30, 2023. See Note 10 for discussion on the fair values of assets acquired and liabilities assumed in our acquisition of SRS.

Other Fair Value Disclosures

The carrying amounts of cash and cash equivalents, receivables, accounts payable, and short-term debt approximate fair value due to their short-term nature.

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

			July 28, 2024												January 28, 2024
in millions			Fair Value (Level 1)						Carrying Value						Fair Value (Level 1)						Carrying Value
Senior notes			$	46,879					$	49,709					$	38,495					$	40,843

**8.**WEIGHTED AVERAGE COMMON SHARES

The following table presents the reconciliation of our basic to diluted weighted average common shares as well as the number of anti-dilutive securities excluded from diluted weighted average common shares:

in millions			Three Months Ended												Six Months Ended
July 28, 2024						July 30, 2023						July 28, 2024						July 30, 2023
Basic weighted average common shares			990						1,000						989						1,005
Effect of potentially dilutive securities (1)			2						3						3						3
Diluted weighted average common shares			992						1,003						992						1,008
Anti-dilutive securities excluded from diluted weighted average common shares			1						1						1						1

—————

(1) Represents the dilutive impact of stock-based awards.

**9.**CONTINGENCIES

We are involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

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**10.**ACQUISITIONS

SRS Acquisition

On March 27, 2024, we entered into a definitive agreement to acquire SRS Distribution Inc., a leading residential specialty trade distribution company across several verticals serving the professional roofer, landscaper and pool contractor. On June 18, 2024, following the satisfaction or waiver of the applicable closing conditions, including receipt of the requisite regulatory approvals, the acquisition was completed and all merger consideration was transferred. Under the terms of the merger agreement, a subsidiary of The Home Depot, Inc. merged with and into Shingle Acquisition Holdings, Inc., the parent company of SRS, with Shingle Acquisition Holdings, Inc. as the surviving entity and a wholly owned subsidiary of the Company. We believe the acquisition of SRS will accelerate the Company’s growth with the residential professional customer. The acquisition is expected to complement our existing capabilities and enable us to better serve complex project purchase occasions with the renovator/remodeler, while also establishing the Company as a leading specialty trade distributor across multiple verticals. We primarily used a combination of proceeds from commercial paper borrowings, the issuance of long-term debt, as well as cash on hand to fund the acquisition. See Note 5 for further information on the financing for the transaction, and below for a summary of preliminary purchase consideration.

The acquisition was accounted for in accordance with Accounting Standards Codification Topic 805 "Business Combinations," and SRS’s results of operations have been consolidated in the Company’s financial statements effective June 18, 2024. Acquisition-related costs were expensed as incurred and were not material.

Fair Value of Consideration Transferred. The following table summarizes total preliminary purchase consideration:

in millions
Total cash consideration			$	17,720
Fair value of common stock issued (1)			321
Total preliminary purchase consideration			$	18,041

—————

(1) In connection with the acquisition, certain members of SRS’s management team concurrently reinvested a portion of their respective after-tax merger consideration proceeds into shares of the Company’s common stock. A portion of such shares of Company common stock are fully vested, and accordingly, the fair value of such shares was recorded as non-cash purchase consideration. A portion of such shares of Company common stock, which replaced legacy SRS stock-based awards, are subject to service-based vesting conditions over a three-year period and become forfeitable if such vesting conditions are not satisfied. Accordingly, a portion of the fair value of these shares was recorded as non-cash purchase consideration, and the remainder will be recorded as post-combination expense over the vesting period. The fair value of these shares, including the amount which will be recorded as post-combination compensation cost, is not material.

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Allocation of Consideration Transferred. We recorded a preliminary allocation of the purchase price to assets acquired and liabilities assumed based on their estimated fair values as of June 18, 2024. The following table summarizes the recorded fair values of the assets acquired and liabilities assumed:

in millions			Preliminary Fair Value
Cash and cash equivalents			$	161
Receivables			1,832
Merchandise inventories			1,988
Property and equipment			834
Goodwill			10,967
Intangible assets			5,750
Other current and non-current assets			744
Total assets acquired			$	22,276
Accounts payable			$	1,791
Other current liabilities			584
Deferred tax liabilities (1)			1,078
Other long-term liabilities			782
Total liabilities assumed			$	4,235

—————

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

The preliminary fair value of identifiable intangible assets was determined by using certain estimates and assumptions that are not observable in the market. The Company used the multi-period excess earnings method to value the customer relationships intangible assets. The significant assumptions used to estimate the fair value of customer relationships included forecasted revenues, customer attrition rates, and the discount rate. Determining the useful life of an intangible asset also requires judgment, as different types of intangible assets will have different useful lives. The preliminary fair value and estimated useful lives of identifiable intangible assets are as follows:

in millions			Weighted Average Useful Life (Years)						Preliminary Fair Value
Customer relationships			20						$	5,370
Trade names			5						380
Total identifiable intangible assets									$	5,750

The goodwill arising from the acquisition is calculated as the excess of the purchase price over the net assets acquired and is attributable to (i) growth acceleration in the residential professional customer market; (ii) expansion in high growth verticals including roofing; (iii) additional addressable market opportunities; (iv) enhanced delivery network capabilities; and (v) growth in sales force. We expect approximately $1.0 billion of goodwill related to the acquisition to be deductible for U.S. federal and state income tax purposes. As the valuation is preliminary, we have not yet finalized the assignment of goodwill to our reporting units, and no goodwill currently resides in our Primary segment.

We have completed preliminary valuation analyses necessary to assess the fair values of the assets acquired and liabilities assumed and the amount of goodwill to be recognized as of the acquisition date. These fair values were based on management’s estimates and assumptions; however, the amounts indicated above are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. Accordingly, there may be adjustments to the assigned values of acquired assets and liabilities. The primary areas that remain preliminary include, but are not limited to, intangible assets including the preliminary assumptions used in their estimates of fair values and their respective estimated useful lives, the valuation of certain tangible assets, income taxes, and residual goodwill. The final determination of the fair values, purchase consideration, related income tax impacts and residual goodwill will be completed as soon as practicable, and within the measurement period of up to one year from the acquisition date as permitted under GAAP. Any adjustments to provisional amounts that are identified during the measurement period will be recorded in the reporting period in which the adjustment is determined.

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Results of Operations. Net sales attributable to SRS since the completion of the acquisition and included within our results of operations for both the three and six months ended July 28, 2024 totaled $1.3 billion. Net earnings attributable to SRS since the completion of the acquisition and included within our results of operations for both the three and six months ended July 28, 2024 were immaterial.

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

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

The Home Depot, Inc.:

Results of Review of Interim Financial Information

We have reviewed the consolidated balance sheet of The Home Depot, Inc. and its subsidiaries (the “Company”) as of July 28, 2024, the related consolidated statements of earnings, comprehensive income and stockholders’ equity for the three-month and six-month periods ended July 28, 2024 and July 30, 2023, the related consolidated statements of cash flows for the six-month periods ended July 28, 2024 and July 30, 2023, and the related notes (collectively, the “consolidated interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of January 28, 2024, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the fiscal year then ended (not presented herein); and in our report dated March 13, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 28, 2024 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP

Atlanta, Georgia

August 19, 2024

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