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Table of Contents THE HOME DEPOT, INC. CONSOLIDATED BALANCE SHEETS February 3, 2019 January 28, in millions, except per share data 2018 Assets Current assets: Cash and cash equivalents 1,778 $ 3,595 Receivables, net 1,936 1,952 Merchandise inventories 13,925 12,748 Other current assets 890 538 Total current assets 18,529 18,933 Net property and equipment 22,375 22,075 Goodwill 2,252 2,275 Other assets 347 1.246 Total assets $ 44,003 $ 44,529 Liabilities and Stockholders' Equity Current liabilities: Short-term debt $ 1,339 $ 1,559 Accounts payable 7,755 7,244 Accrued salaries and related expenses 1,506 1,640 Sales taxes payable 656 520 Deferred revenue 1,782 1,805 Income taxes payable 11 54 Current installments of long-term debt 1,056 1,202 Other accrued expenses 2,611 2,170 Total current liabilities 16,716 16,194 Long-term debt, excluding current installments 26,807 24,267 Deferred income taxes 491 440 Other long-term liabilities 1,867 2,174 Total liabilities 15,88 43,075 Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018 89 89 Paid-in capital 10,578 10,192 Retained earnings 46,423 39,935 Accumulated other comprehensive loss (772) (566) Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018 (58, 196) (48, 196) Total stockholders' (deficit) equity (1,878 ,454 Total liabilities and stockholders' equity $ 44,003 $ 44,529 See accompanying notes to consolidated financial statements. 31Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF EARNINGS Fiscal Fiscal Fiscal in millions, except per share data 2018 2017 2016 Net sales 108,203 $ 100,904 $ 34,595 Cost of sales 71,043 66,548 62,282 Gross profit 37,160 34,356 32,313 Operating expenses: Selling, general and administrative 19,513 17,864 17,132 Depreciation and amortization 1,870 1,811 1,754 Impairment loss 247 Total operating expenses 21,630 19,675 8,886 Operating income 15,530 14,681 13,427 Interest and other (income) expense: Interest and investment income (93) (74) (36) Interest expense 1,051 1,057 972 Other 16 Interest and other, net 974 983 936 Earnings before provision for income taxes 14,556 13,698 12,491 Provision for income taxes 3,435 5,068 4,534 Net earnings 11, 121 $ 8,630 $ 7,957 Basic weighted average common shares 1, 137 1,178 1,229 Basic earnings per share S $ 7.33 $ 6.47 Diluted weighted average common shares 1,143 1,184 1,234 Diluted earnings per share 9.73 $ 7.29 6.45 Fiscal 2018 includes 53 weeks. Fiscal 2017 and fiscal 2016 include 52 weeks. See accompanying notes to consolidated financial statements. 32Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Fiscal Fiscal in millions 2018 2017 2016 Net earnings $ 11, 121 $ 8,630 $ 7,957 Other comprehensive (loss) income: Foreign currency translation adjustments (267) 311 (3) Cash flow hedges, net of tax 53 (1) 34 Other 8 (9) Total other comprehensive (loss) income 206 301 31 Comprehensive income S 10,915 $ 8,931 $ 7,988 Fiscal 2018 includes 53 weeks. Fiscal 2017 and fiscal 2016 include 52 weeks. See accompanying notes to consolidated financial statements. 33Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Fiscal Fiscal Fiscal in millions 2018 2017 2016 Common Stock: Balance at beginning of year S 89 S 88 $ 88 Shares issued under employee stock plans Balance at end of year 89 39 88 Paid-in Capital: Balance at beginning of year 10, 192 9,787 9,347 Shares issued under employee stock plans 104 132 76 Tax effect of stock-based compensation 97 Stock-based compensation expense 282 273 267 Balance at end of year 10,578 10,192 9,787 Retained Earnings: Balance at beginning of year 39,935 35,519 30,973 Cumulative effect of accounting change 75 Net earnings 11,121 8,630 7,957 Cash dividends (4,704) (4,212) (3,404) Other (4) (2) (7) Balance at end of year 46,423 39,935 35,519 Accumulated Other Comprehensive Income (Loss): Balance at beginning of year (566) (867) (898) Foreign currency translation adjustments (267) 311 (3) Cash flow hedges, net of tax 53 (1) 34 Other 8 (9) Balance at end of year 772) 566 867 Treasury Stock: Balance at beginning of year (48, 196) (40, 194) (33, 194) Repurchases of common stock 10,000) (8,002 7,000) Balance at end of year 58, 196) (48,196) (40,194) Total stockholders' (deficit) equity S (1,878) $ 1,454 $ 4,333 Fiscal 2018 includes 53 weeks. Fiscal 2017 and fiscal 2016 include 52 weeks. See accompanying notes to consolidated financial statements. 34Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Fiscal Fiscal in millions 2018 2017 2016 Cash Flows from Operating Activities: Net earnings S 11, 121 $ 8,630 $ 7,957 Reconciliation of net earnings to net cash provided by operating activities: Depreciation and amortization 2,152 2,062 1,973 Stock-based compensation expense 282 273 267 Impairment loss 247 Changes in receivables, net 33 139 (138) Changes in merchandise inventories (1,244) (84) (769) Changes in other current assets (257) (10) (48) Changes in accounts payable and accrued expenses 743 352 446 Changes in deferred revenue 80 128 99 Changes in income taxes payable (42) 29 109 Changes in deferred income taxes 26 92 (117) Other operating activities (103) 420 4 Net cash provided by operating activities 13,038 12,031 9,783 Cash Flows from Investing Activities: Capital expenditures, net of non-cash capital expenditures (2,442) (1,897) (1,621) Payments for businesses acquired, net (21) (374) Proceeds from sales of property and equipment 33 47 38 Other investing activities 14 (4) Net cash used in investing activities 2,416) (2,228 1,583) Cash Flows from Financing Activities: (Repayments of) proceeds from short-term debt, net (220) 850 360 Proceeds from long-term debt, net of discounts 3,466 2,991 4,959 Repayments of long-term debt (1,209) (543) (3,045) Repurchases of common stock (9,963) (8,000) (6,880) Proceeds from sales of common stock 236 255 218 Cash dividends (4,704) (4,212) (3,404) Other financing activities (26 (211) (78) Net cash used in financing activities (12,420 8,870 7,870) Change in cash and cash equivalents (1,798) 933 330 Effect of exchange rate changes on cash and cash equivalents (19) 124 (8) Cash and cash equivalents at beginning of year 3,595 2,538 2,216 Cash and cash equivalents at end of year S 1,778 $ 3,595 $ 2,538 Supplemental Disclosures: Cash paid for income taxes S 3,774 $ 4,732 $ 4,623 Cash paid for interest, net of interest capitalized 1,035 991 924 Non-cash capital expenditures 248 150 179 Fiscal 2018 includes 53 weeks. Fiscal 2017 and fiscal 2016 include 52 weeks. See accompanying notes to consolidated financial statements 35Question 11 6 pts Ratio Analysis Based on the financial statements of Home Depot for the fiscal year that ended February 3, 2019, calculate the following ratios for the last two fiscal years and indicate whether they are getting better or worse: 7) Total Debt to Total Capital (%) FYE 1/28/18 FYE 2/3/19 Better/Worse Please use two decimal points for your final answers
