Home Depot, Inc 10-K for FY2021

Home Depot, Inc. (HD)

10-K 2021-03-24 For: 2021-01-31

Added on April 02, 2026

About this 10-K

Home Depot, Inc filed this 10-K on March 24, 2021, covering the fiscal year ended January 31, 2021 (FY2021).

Headline figures

Fiscal year ended January 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $132.11B; up 19.9% from $110.23B a year earlier
Net income: $12.87B; up 14.4% from net income of $11.24B a year earlier
Diluted EPS: $11.94; up 16.5% from $10.25 a year earlier

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Commonly Used or Defined Terms		ii
Cautionary Statement Pursuant to the Private Securities Litigation Reform Act of 1995		iii

PART I
Item 1.	Business.	1
Item 1A.	Risk Factors.	10
Item 1B.	Unresolved Staff Comments.	21
Item 2.	Properties.	22
Item 3.	Legal Proceedings.	23
Item 4.	Mine Safety Disclosures.	24

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	24
Item 6.	Selected Financial Data.	25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	34
Item 8.	Financial Statements and Supplementary Data.	36
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	69
Item 9A.	Controls and Procedures.	69
Item 9B.	Other Information.	71

PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	71
Item 11.	Executive Compensation.	72
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	72
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	72
Item 14.	Principal Accounting Fees and Services.	72

PART IV
Item 15.	Exhibits, Financial Statement Schedules.	72
Item 16.	Form 10-K Summary.	77

SIGNATURES		78


Term						Definition
ASR						Accelerated share repurchase
ASU						Accounting Standards Update
BODFS						Buy Online, Deliver From Store
BOPIS						Buy Online, Pickup In Store
BORIS						Buy Online, Return In Store
BOSS						Buy Online, Ship to Store
CDP						The not-for-profit organization formerly known as the Carbon Disclosure Project
CFL						Compact fluorescent light
Comparable sales						As defined in the Results of Operations and Non-GAAP Financial Measures section of MD&A
DIFM						Do-It-For-Me
DIY						Do-It-Yourself
EH&S						Environmental, Health, and Safety
EPA						U.S. Environmental Protection Agency
ESG						Environmental, social and governance
ESPP						Employee Stock Purchase Plan
Exchange Act						Securities Exchange Act of 1934, as amended
FASB						Financial Accounting Standards Board
FIRST phone						Web-enabled handheld device used by associates in our stores
fiscal 2015						Fiscal year ended January 31, 2016 (includes 52 weeks)
fiscal 2016						Fiscal year ended January 29, 2017 (includes 52 weeks)
fiscal 2017						Fiscal year ended January 28, 2018 (includes 52 weeks)
fiscal 2018						Fiscal year ended February 3, 2019 (includes 53 weeks)
fiscal 2019						Fiscal year ended February 2, 2020 (includes 52 weeks)
fiscal 2020						Fiscal year ended January 31, 2021 (includes 52 weeks)
fiscal 2021						Fiscal year ending January 30, 2022 (includes 52 weeks)
GAAP						U.S. generally accepted accounting principles
HD Supply						HD Supply Holdings, Inc.
IRS						Internal Revenue Service
LIBOR						London interbank offered rate
MD&A						Management’s Discussion and Analysis of Financial Condition and Results of Operations
MRO						Maintenance, repair, and operations
NOPAT						Net operating profit after tax
NYSE						New York Stock Exchange
PLCC						Private label credit card
Pro						Professional customer
Restoration Plan						Home Depot FutureBuilder Restoration Plan
ROIC						Return on invested capital
SEC						Securities and Exchange Commission
Securities Act						Securities Act of 1933, as amended
SG&A						Selling, general, and administrative
Tax Act						Tax Cuts and Jobs Act of 2017


Geographic Location	Number of Associates	% of Total Workforce
United States	451,500	89.4%
Canada	34,400	6.8%
Mexico	18,600	3.7%
Other(1)	300	0.1%
Total	504,800	100%
(1) Includes associates in our sourcing organization located in China, Vietnam, India, Italy, Poland and Turkey.


Associate Population	Race/Ethnicity		Gender
	% Minority	% White	% Female	% Male
U.S. Workforce	47%	53%	38%	62%
U.S. Managers & Above(2)	35%	65%	32%	68%
U.S. Officers	25%	75%	29%	71%


Year Announced	Goal	Progress
2015	Store Energy Usage: Reduce our U.S. stores’ kilowatt-hour energy use by 20% over 2010 levels by 2020	Completed
2015	Renewable/Alternative Energy Sources: Produce and procure, on an annual basis, 135 megawatts of energy through renewable or alternative energy sources, such as wind, solar and fuel cell technology, by 2020	Completed
2017	Customer Greenhouse Gas Emissions: Help reduce North American customers’ greenhouse gas emissions by 20 million metric tons by 2020	Completed
2017	Customer Energy and Water Savings: Help customers save $2.5 billion in electricity costs and reduce water use by 250 billion gallons by 2020	Completed
2017	Paint Chemical Reduction: Reduce suspect chemicals in paints by 2020	Completed
2018	Cleaning Products Chemical Reduction: Reduce suspect chemicals in cleaning products by 2022	In Process
2018	Science-Based Carbon Emissions Targets: Commit to a 2.1% annual reduction in carbon emissions, with the goal to achieve a 40% reduction by 2030 and a 50% reduction by 2035	In Process
2019	Recyclable Packaging: Exclude expanded polystyrene foam (EPS) and polyvinyl chloride (PVC) film from the packaging of private-brand products we sell, replacing them with easier-to-recycle materials by 2023	In Process
2020	NEW GOAL for Renewable/Alternative Energy Sources: Produce or procure, on an annual basis, 335 megawatts of renewable or alternative energy by 2025	In Process


square footage in millions	Owned		Leased		Total Square Footage
Stores (1)	90	%	10	%	238.6
Warehouses and distribution centers	5	%	95	%	75.9
Offices and other	23	%	77	%	5.1
Total					319.6


U.S.	Stores	U.S.	Stores
Alabama	28	Montana	6
Alaska	7	Nebraska	8
Arizona	56	Nevada	21
Arkansas	14	New Hampshire	20
California	232	New Jersey	67
Colorado	46	New Mexico	13
Connecticut	30	New York	101
Delaware	9	North Carolina	40
District of Columbia	1	North Dakota	2
Florida	155	Ohio	70
Georgia	90	Oklahoma	16
Guam	1	Oregon	27
Hawaii	7	Pennsylvania	70
Idaho	11	Puerto Rico	10
Illinois	76	Rhode Island	8
Indiana	24	South Carolina	26
Iowa	10	South Dakota	1
Kansas	16	Tennessee	39
Kentucky	14	Texas	180
Louisiana	28	Utah	22
Maine	11	Vermont	3
Maryland	41	Virgin Islands	2
Massachusetts	45	Virginia	49
Michigan	70	Washington	45
Minnesota	33	West Virginia	6
Mississippi	14	Wisconsin	27
Missouri	34	Wyoming	5
		Total U.S.	1,987


	Fiscal Year Ended
	January 31, 2016		January 29, 2017		January 28, 2018		February 3, 2019		February 2, 2020		January 31, 2021
The Home Depot	$	100.00	$	112.34	$	172.17	$	156.60	$	199.00	$	241.94
S&P Retail Composite Index	100.00		118.55		172.18		181.29		218.65		309.14
S&P 500 Index	100.00		120.86		154.33		148.35		180.31		211.39


Period	Total Number of Shares Purchased(1) (3)	Average Price Paid Per Share(1)		Total Number of Shares Purchased as Part of Publicly Announced Program(2)	Dollar Value of Shares that May Yet Be Purchased Under the Program(2)
November 2, 2020 – November 29, 2020	2,278	$	273.99	—	$	7,680,368,043
November 30, 2020 – December 27, 2020	530	269.44		—	7,680,368,043
December 28, 2020 – January 31, 2021	1,148	269.81		—	7,680,368,043
Total	3,956	272.17		—


dollars in millions, except per share data	Fiscal		Fiscal		Fiscal
	2020		2019		2018
Net sales	$	132,110	$	110,225	$	108,203
Net earnings	12,866		11,242		11,121

Diluted earnings per share	$	11.94	$	10.25	$	9.73

Net cash provided by operating activities	$	18,839	$	13,687	$	13,165
Payments for businesses acquired, net	7,780		—		21
Proceeds from long-term debt, net of discounts and premiums	7,933		3,420		3,466
Repayments of long-term debt	2,872		1,070		1,209
Repurchases of common stock	791		6,965		9,963


							% Change
Selected financial and sales data:	Fiscal		Fiscal		Fiscal		Fiscal		Fiscal
	2020		2019		2018		2020 vs. 2019		2019 vs. 2018
Comparable sales (% change) (1) (6)	19.7	%	3.5	%	5.2	%	N/A		N/A
Comparable customer transactions (% change) (1) (2) (6)	8.6	%	1.1	%	1.0	%	N/A		N/A
Comparable average ticket (% change) (1) (2) (6)	10.5	%	2.5	%	4.2	%	N/A		N/A
Customer transactions (in millions) (2) (3) (6)	1,756.3		1,616.0		1,620.8		8.7	%	(0.3)	%
Average ticket (2) (3) (4) (6)	$74.32		$67.30		$65.74		10.4	%	2.4	%
Sales per retail square foot (2) (3) (5) (6)	$543.74		$454.82		$446.86		19.6	%	1.8	%
Diluted earnings per share	$11.94		$10.25		$9.73		16.5	%	5.3	%


	Payments Due by Period
in millions	Total		Less than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years

Long-term debt – principal payments (1)	$	34,750	$	1,350	$	3,250	$	2,100	$	28,050
Long-term debt – interest payments (2)	20,581		1,162		2,210		2,114		15,095
Finance lease obligations (3)	3,693		272		565		590		2,266
Operating lease obligations (3)	7,122		955		1,814		1,352		3,001
Purchase obligations (4)	3,778		2,689		1,030		56		3
Unrecognized tax benefits (5)	7		7		—		—		—
Total	$	69,931	$	6,435	$	8,869	$	6,212	$	48,415


Report of Independent Registered Public Accounting Firm						37
Consolidated Balance Sheets						39
Consolidated Statements of Earnings						40
Consolidated Statements of Comprehensive Income						41
Consolidated Statements of Stockholders' Equity						42
Consolidated Statements of Cash Flows						43
Notes to Consolidated Financial Statements						44
Note 1. Summary of Significant Accounting Policies						44
Note 2. Net Sales and Segment Reporting						51
Note 3. Property and Leases						53
Note 4. Debt and Derivative Instruments						55
Note 5. Income Taxes						60
Note 6. Stockholders' Equity						63
Note 7. Fair Value Measurements						63
Note 8. Stock-Based Compensation						64
Note 9. Employee Benefit Plans						67
Note 10. Weighted Average Common Shares						67
Note 11. Commitments and Contingencies						67
Note 12. HD Supply Acquisition						67


in millions, except per share data	January 31, 2021		February 2, 2020
Assets
Current assets:
Cash and cash equivalents	$	7,895	$	2,133
Receivables, net	2,992		2,106
Merchandise inventories	16,627		14,531
Other current assets	963		1,040
Total current assets	28,477		19,810
Net property and equipment	24,705		22,770
Operating lease right-of-use assets	5,962		5,595
Goodwill	7,126		2,254
Other assets	4,311		807
Total assets	$	70,581	$	51,236

Liabilities and Stockholders’ Equity
Current liabilities:
Short-term debt	$	—	$	974
Accounts payable	11,606		7,787
Accrued salaries and related expenses	2,463		1,494
Sales taxes payable	774		605
Deferred revenue	2,823		2,116
Income taxes payable	193		55
Current installments of long-term debt	1,416		1,839
Current operating lease liabilities	828		828
Other accrued expenses	3,063		2,677
Total current liabilities	23,166		18,375
Long-term debt, excluding current installments	35,822		28,670
Long-term operating lease liabilities	5,356		5,066
Deferred income taxes	1,131		706
Other long-term liabilities	1,807		1,535
Total liabilities	67,282		54,352

Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,789 shares at January 31, 2021 and 1,786 shares at February 2, 2020; outstanding: 1,077 shares at January 31, 2021 and February 2, 2020	89		89
Paid-in capital	11,540		11,001
Retained earnings	58,134		51,729
Accumulated other comprehensive loss	(671)		(739)
Treasury stock, at cost, 712 shares at January 31, 2021 and 709 shares at February 2, 2020	(65,793)		(65,196)
Total stockholders’ equity (deficit)	3,299		(3,116)
Total liabilities and stockholders’ equity	$	70,581	$	51,236


			Life
Buildings			5 – 45 years
Furniture, fixtures and equipment			2 – 20 years
Leasehold improvements			5 – 45 years


Canada	Stores	Mexico	Stores
Alberta	27	Aguascalientes	2
British Columbia	26	Baja California	6
Manitoba	6	Baja California Sur	2
New Brunswick	3	Campeche	2
Newfoundland	1	Chiapas	2
Nova Scotia	4	Chihuahua	5
Ontario	88	Coahuila	5
Prince Edward Island	1	Colima	2
Quebec	22	Distrito Federal	10
Saskatchewan	4	Durango	1
Total Canada	182	Guanajuato	5
		Guerrero	2
		Hidalgo	1
		Jalisco	8
		Michoacán	4
		Morelos	3
		Nayarit	1
		Nuevo León	11
		Oaxaca	1
		Puebla	5
		Querétaro	4
		Quintana Roo	3
		San Luis Potosí	2
		Sinaloa	5
		Sonora	4
		State of Mexico	16
		Tabasco	1
		Tamaulipas	5
		Tlaxcala	1
		Veracruz	5
		Yucatán	2
		Zacatecas	1
		Total Mexico	127


	Fiscal				Fiscal				Fiscal
	2020				2019				2018
dollars in millions	$		% of Net Sales		$		% of Net Sales		$		% of Net Sales
Net sales	$	132,110			$	110,225			$	108,203
Gross profit	44,853		34.0	%	37,572		34.1	%	37,160		34.3	%
Operating expenses:
Selling, general and administrative	24,447		18.5		19,740		17.9		19,513		18.0
Depreciation and amortization	2,128		1.6		1,989		1.8		1,870		1.7
Impairment loss	—		—		—		—		247		0.2
Total operating expenses	26,575		20.1		21,729		19.7		21,630		20.0
Operating income	18,278		13.8		15,843		14.4		15,530		14.4
Interest and other (income) expense:
Interest and investment income	(47)		—		(73)		(0.1)		(93)		(0.1)
Interest expense	1,347		1.0		1,201		1.1		1,051		1.0
Other	—		—		—		—		16		—
Interest and other, net	1,300		1.0		1,128		1.0		974		0.9
Earnings before provision for income taxes	16,978		12.9		14,715		13.3		14,556		13.5
Provision for income taxes	4,112		3.1		3,473		3.2		3,435		3.2
Net earnings	$	12,866	9.7	%	$	11,242	10.2	%	$	11,121	10.3	%


in millions	January 31, 2021		February 2, 2020
Card receivables	$	992	$	778
Rebate receivables	987		668
Customer receivables	571		292
Other receivables	442		368
Receivables, net	$	2,992	$	2,106


in millions	January 31, 2021
	Gross Carrying Amount		Accumulated Amortization
Definite-Lived Intangible Assets:
Customer relationships	$	2,965	$	(157)
Trade names	151		(1)
Other	16		(11)
Indefinite-Lived Intangible Assets:
Trade names	649
Total Intangible Assets	$	3,781	$	(169)


in millions
Fiscal 2021	$	176
Fiscal 2022	176
Fiscal 2023	174
Fiscal 2024	174
Fiscal 2025	174
Thereafter	2,089
Total	$	2,963


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


in millions	Consolidated Balance Sheet Caption	January 31, 2021		February 2, 2020
Assets:
Operating lease assets	Operating lease right-of-use assets	$	5,962	$	5,595
Finance lease assets (1)	Net property and equipment	2,493		934
Total lease assets		$	8,455	$	6,529

Liabilities:
Current:
Operating lease liabilities	Current operating lease liabilities	$	828	$	828
Finance lease liabilities	Current installments of long-term debt	66		84
Long-term:
Operating lease liabilities	Long-term operating lease liabilities	5,356		5,066
Finance lease liabilities	Long-term debt, excluding current installments	2,700		1,081
Total lease liabilities		$	8,950	$	7,059


	January 31, 2021		February 2, 2020
Weighted Average Remaining Lease Term (Years):
Operating leases	10		10
Finance leases	15		12

Weighted Average Discount Rate:
Operating leases	2.9	%	3.1	%
Finance leases	5.6	%	10.4	%


in millions	Operating Leases		Finance Leases
Fiscal 2021	$	955	$	272
Fiscal 2022	960		285
Fiscal 2023	854		280
Fiscal 2024	738		273
Fiscal 2025	614		317
Thereafter	3,001		2,266
Total lease payments	7,122		3,693
Less: imputed interest	938		927
Present value of lease liabilities	$	6,184	$	2,766


				Carrying Amount
in millions	Interest Payable	Principal Amount		January 31, 2021		February 2, 2020
Floating rate senior notes due June 2020	Quarterly	$	—	$	—	$	500
1.80% Senior notes due June 2020	Semi-annually	—		—		750
3.95% Senior notes due September 2020	Semi-annually	—		—		506
4.40% Senior notes due April 2021	Semi-annually	—		—		999
2.00% Senior notes due April 2021	Semi-annually	1,350		1,350		1,348
Floating rate senior notes due March 2022	Quarterly	300		300		299
3.25% Senior notes due March 2022	Semi-annually	700		699		698
2.625% Senior notes due June 2022	Semi-annually	1,250		1,248		1,246
2.70% Senior notes due April 2023	Semi-annually	1,000		998		998
3.75% Senior notes due February 2024	Semi-annually	1,100		1,096		1,095
3.35% Senior notes due September 2025	Semi-annually	1,000		997		996
3.00% Senior notes due April 2026	Semi-annually	1,300		1,291		1,290
2.125% Senior notes due September 2026	Semi-annually	1,000		990		989
2.50% Senior notes due April 2027	Semi-annually	750		743		—
2.80% Senior notes due September 2027	Semi-annually	1,000		1,017		1,007
0.90% Senior notes due March 2028	Semi-annually	500		494		—
3.90% Senior notes due December 2028	Semi-annually	1,000		1,075		1,059
2.95% Senior notes due June 2029	Semi-annually	1,750		1,828		1,797
2.70% Senior notes due April 2030	Semi-annually	1,500		1,464		—
1.375% Senior notes due March 2031	Semi-annually	1,250		1,229		—
5.875% Senior notes due December 2036	Semi-annually	3,000		2,935		2,953
3.30% Senior notes due April 2040	Semi-annually	1,250		1,207		—
5.40% Senior notes due September 2040	Semi-annually	500		496		495
5.95% Senior notes due April 2041	Semi-annually	1,000		990		989
4.20% Senior notes due April 2043	Semi-annually	1,000		989		989
4.875% Senior notes due February 2044	Semi-annually	1,000		980		979
4.40% Senior notes due March 2045	Semi-annually	1,000		979		978
4.25% Senior notes due April 2046	Semi-annually	1,600		1,585		1,585
3.90% Senior notes due June 2047	Semi-annually	1,150		1,144		1,144
4.50% Senior notes due December 2048	Semi-annually	1,500		1,463		1,462
3.125% Senior notes due December 2049	Semi-annually	1,250		1,222		1,221
3.35% Senior notes due April 2050	Semi-annually	1,500		1,470		—
2.375% Senior notes due March 2051	Semi-annually	1,250		1,220		—
3.50% Senior notes due September 2056	Semi-annually	1,000		973		972
Total senior notes		$	34,750	34,472		29,344
Finance lease obligations; payable in varying installments through January 31, 2055				2,766		1,165
Total long-term debt				37,238		30,509
Less current installments of long-term debt				1,416		1,839
Long-term debt, excluding current installments				$	35,822	$	28,670


in millions	Principal
Fiscal 2021	$	1,350
Fiscal 2022	2,250
Fiscal 2023	1,000
Fiscal 2024	1,100
Fiscal 2025	1,000
Thereafter	28,050
Total	$	34,750


Agreement Date	Settlement Date	Agreement Amount	Initial Shares Delivered	Additional Shares Delivered	Total Shares Delivered
Q1 2018	Q2 2018	750	3.4	0.8	4.2
Q2 2018	Q3 2018	1,600	7.1	1.0	8.1
Q3 2019	Q4 2019	820	3.2	0.4	3.6


	Fair Value at January 31, 2021 Using						Fair Value at February 2, 2020 Using
in millions	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative agreements – assets	$	—	$	172	$	—	$	—	$	133	$	—
Derivative agreements – liabilities	—		(71)		—		—		—		—
Total	$	—	$	101	$	—	$	—	$	133	$	—


shares in thousands	Number of Shares	Weighted Average Exercise Price
Outstanding at beginning of year	5,212	$	111.54
Granted	422	193.84
Exercised	(1,258)	75.83
Forfeited	(26)	169.40
Outstanding at end of year	4,350	129.50


shares in thousands, dollars in millions, except for per share amounts	Number of Shares	Intrinsic Value		Weighted Average Remaining Life	Weighted Average Exercise Price
Outstanding	4,350	$	615	5 years	$	129.50
Exercisable	2,677	454		4 years	101.08


shares in thousands	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at beginning of year	3,975	$	170.58
Granted	1,803	181.75
Vested	(1,506)	155.14
Forfeited	(174)	177.71
Nonvested at end of year	4,098	180.87


in millions
Total cash consideration for outstanding shares	$	8,637
Value of share-based awards attributed to services already rendered (1)	55
Total purchase consideration	$	8,692


in millions	Fair Value
Cash	$	912
Other current assets	879
Goodwill	4,870
Other assets (1)	3,943
Total assets acquired	$	10,604

Current liabilities	$	801
Long-term liabilities (2)	1,111
Total liabilities assumed	$	1,912


in millions	Useful Life (Years)	Preliminary Fair Value
Customer relationships	19	$	2,630
Trade name – indefinite lived	Indefinite	520
Trade names – definite lived	20	150
Identifiable intangible assets		$	3,300


THE HOME DEPOT, INC. (Registrant)

By:		/s/ CRAIG A. MENEAR
		Craig A. Menear, Chairman and Chief Executive Officer

Date:	March 24, 2021


THE ADMINISTRATIVE COMMITTEE OF THE HOME DEPOT DEFERRED COMPENSATION PLAN FOR OFFICERS

By:			/s/ Scott Smith
			Name: Scott Smith
			Title: Vice President, HR Performance Systems

Date Signed:			12/22/2020


/s/ Craig A. Menear
Craig A. Menear
Chairman and Chief Executive Officer


/s/ Richard V. McPhail
Richard V. McPhail
Executive Vice President and Chief Financial Officer