Refer to the financial statements of The Home Depot in Appendix A. (Note: Fiscal 2016 for The Home Depot runs from February 1 2016, to January 29, 2017. As with many retail companies, The Home Depot labels the period "Fiscal 2016" even though it ends in the 2017 calendar year. The label "Fiscal 2016" is appropriate because Fiscal 2016 includes 11 months from the 2016 calendar year. The Home Depot explains its choice of fiscal period in Note 1 to its financial statements.) Required: 1. Which of the two basic reporting approaches for the cash flows from operating activities did The Home Depot use? Direct Indirect 2. What amount of income tax payments did The Home Depot make during the year ended January 29, 2017? $3,082 million $12 million O $639 million O $4,623 million 3. In the fiscal year ended January 29, 2017, The Home Depot generated $9,783 million from operating activities. Indicate where this cash was spent by listing the two largest cash outflows. O Long-Term Debt Repayments ($3,045 million) and Share Repurchase ($6,880 million) O Share Repurchase ($7,000 million) and Cash Dividends ($3,404 million) O Cash Dividends ($3,404 million) and Share Repurchase ($6,880 million) Share Repurchase ($6,880 million) and Capital Expenditures ($1,621 million) A5 APPENDIX A reform the al 2016 Annual Report of The Home Depot, Inc. THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Balance Sheets January 29, 2017 "Fiscal 2016" January 31, 2016 Fiscal 2015 $ 2.538 2,029 12,349 608 17,724 40,426 18,512 21,914 2,093 1.235 $42,966 52.216 1,890 11.809 569 16,484 39,266 17.075 22,191 2.102 1.196 $41.973 amounts in millions, except share and pershare data ASSETS Current Assets Cash and Cash Equivalents Receivables, et Merchandise Inventories Other Current Assets Total Current Assets Property and Equipment, al cost Less Accumulated Depreciation and Amortization Net Property and Equipment Goodwill Other Assets Total Assets LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-Term Debt Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses Total Current Liabilities Long-Term Debt, excluding current installments Other Long-Term Liabilities Deferred Income Taxes Total Liabilities STOCKHOLDERS' EQUITY Common Stock, par value 50.05: authorized: 10 billion shares, issued 1.776 billion shares at January 29, 2017 and 1.772 billion shares at January 31, 2016 outstanding: 1203 billion shares at January 29, 2017 and 1.252 billion shares at January 31, 2016 Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock, at cost, 573 million shares at January 29, 2017 and $20 million shares at January 31, 2016 Total Stockholders' Equity Total Liabilities and Stockholders' Equity See accompanying Notes de Consolidated Financial Statements $ 710 7.000 1.484 50N 1.669 25 542 2,195 14,133 22,349 $ 350 6,565 1.515 476 1,566 34 77 1.941 12.524 20,789 1.965 1.855 379 296 38.633 35,657 88 88 9,787 35,519 (867) (40,194) 9,347 30,973 (898) (33.194) 4,333 $42,966 6,316 $41.973 THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Earnings Fiscal Year Ended Jan 31, 2016 "Fiscal 2015 588,519 58.254 Feb 1, 2015 "Fiscal 2014 $83,176 30.265 28389 16.801 1,690 18.491 11.774 16.280 1.600 17.920 10.469 Jan. 29, 2017 amounts in millions, except per share data "Fiscal 2016 NET SALES $94,595 Cost of Sales 62,282 GROSS PROFIT 32,313 Operating Expenses: Selling, General and Administrative 17,132 Depreciation and Amortization 1,754 Total Operating Expenses 18.886 OPERATING INCOME 13,427 Interest and Other (Income) Expense: Interest and Investment Income (36) Interest Expense 972 Interest and Other, net 936 EARNINGS BEFORE PROVISION FOR INCOME TAXES 12,491 Provision for Income Taxes 4,534 NET EARNINGS $7.957 Weighted Average Common Shares 1.229 BASIC EARNINGS PER SHARE $ 6,47 Diluted Weighted Average Common Shares 1,234 DILUTED EARNINGS PER SHARE $ 6.45 (1) Fiscal years ended January 29, 2017 January 31, 2016, and February 1, 2015 include 52 weeks. See accompanying Notes to Consolidated Financial Statements (166) (337) 830 493 919 753 11.021 4,012 $ 7,009 1.277 $5.49 1.23 $ 5.46 9.976 3.631 $ 6345 1,338 54.74 1,346 $ 4.71 THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income Fiscal Year Ended Alan. 31, 2016 "Fiscal 2015" $7,009 Feb 1, 2015 "Fiscal 2014 56 345 (412) (510) amounts in millions Jan. 29, 2017 "Fiscal 2016 Net Earnings $7,957 Other Comprehensive Income (Loss): Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Other Total Other Comprehensive Income (Loss) 31 COMPREHENSIVE INCOME $7,988 (1) Fiscal years ended January 29, 2017. January 31, 2016, and February 1, 2015 include 52 weeks. See accompanying Nows to Consolidated Financial Statement 1 (446) 56.563 $5.847 A7 APPENDIX A from the Fiscal 2016 Annual Report of The Home Depot In THE HOME DEPOT, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity 136 11111 . - 11 II - Accumulated Common Stock Other Pald-In Retained Comprehensive Treasury Stock Stockholders' amount in millions, except per share data Shares Amount Capital Earnings Income (L.) Shares Amount Equity Balance, February 2, 2014 1,761 $88 $8,402 $23,180 $ 46 (381) $(19.194) $12,522 Net Earnings 6,345 6,345 Shares Issued Under Employee Stock Plans 122 122 Tax Effect of Suck-Based Compensation 136 Foreign Currency Translation Adjustments (510) (510) Cash Flow Hedges, net of tax 11 11 Stock Options, Awards and Amortization 225 225 of Restricted Stock Repurchases of Common Stock (80) (7.000) (7.000) Cash Dividends ($1.88 per share) (2.530) (2.530) Other Balance, February 1, 2015 1,768 SAN S8,885 $26,995 $(452) (461) $(26,194) $ 9,322 Net Earnings 7,009 7.009 Shares Issued Under Employee Stock Plans 73 73 Tax Effect of Stock-Based Compensation 145 145 Foreign Currency Translation Adjustments (412) (412) Cash Flow Hedges, niet of tax Stock Options, Awards and Amortization 244 244 of Restricted Stock Repurchases of Common Stock (59) (7.000) 67,000) Cash Dividends ($2.36 per share) (3,031) (3.031) Balance, January 31, 2016 $88 $9,347 $30,973 $(898) (520) $(33,194) $ 6,316 Net Earnings 7.957 7,957 Shares Issued Under Employee Stock Plans 76 76 Tax Effect of Stock-Based Compensation 97 97 Foreign Currency Translation Adjustments (3) Cash Flow Hedges, net of tax 34 34 Stock Options, Awards and Amortization 267 267 of Restricted Stock Repurchases of Common Stock (53) (7.000) (7.000) Cash Dividends (52.76 per share) (3,404) (3.404) Other (7) Balance, January 29, 2017 1,776 $88 $9,787 $35,519 S(867) (573) $(40,194) $ 4,333 See accompanying Notes do Consolidated Financial Statements - 1,772 Fiscal Year Ended Jan. 31, 2016 "Fiscal 2015" Feb 1, 2015 "Fiscal 2014" 57,009 56.345 1,973 1.863 244 1,786 225 (323) (8D) (124) (199) (48) (181) (546) (5) 888 109 154 15 146 168 159 (105) 8.242 9.373 (1.503) (1.442) Jan. 29, 2017 aments in millions "Fiscal 2016" CASH FLOWS FROM OPERATING ACTIVITIES: Net Earnings $7,957 Reconciliation of Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization Stock-Based Compensation Expense 267 Gain on Sales of Investments Changes in Assets and Liabilities, net of the effects of acquisitions: Receivables, net (138) Merchandise Inventories (769) Other Current Assets Accounts Payabic and Accrued Expenses 446 Deferred Revenue 99 Income Taxes Payable 109 Deferred Income Taxes (117) Other Net Cash Provided by Operating Activities 9,783 CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures, net of $179. S165 and $217 of non-cash capital (1,621) expenditures in fiscal 2016, 2015 and 2014, respectively Proceeds from Sales of Investments Payments for Businesses Acquired, net Proceeds from Sales of Property and Equipment 38 Net Cash Used in Investing Activities (1,583) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Short-Term Borrowings, net 360 Proceeds from Long-Term Borrowings, net of discounts 4.959 Repayments of Long-Term Debt (3,045) Repurchases of Common Stock (6,880) Proceeds from Sales of Common Stock 218 Cash Dividends Paid to Stockholders (3,404) Other Financing Activities (78 Net Cash Used in Financing Activities (7.870 Change in Cash and Cash Equivalents 330 Effect of Exchange Rate Changes on Cash and Cash Equivalents (8) Cash and Cash Equivalents at Beginning of Year 2,216 Cash and Cash Equivalents at End of Year $2,538 SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR: Interest, net of interest capitalized $ 924 Income Taxes $4,623 (1) Fiscal years ended January 29, 2017 January 31, 2016, and February 1, 2015 include 52 weeks, See accompanying Notes to Consolidated Financial Statements (1.666) 323 (200) 48 (1.271) (2.982) 60 3.991 (39) (7.000) 228 (3.031) 290 1.981 (39) (7.000) 252 (2.530) 25 (5,787) 604 (111) 1.723 $2.216 (7,071) (100) (106) 1.929 $1,723 $ 874 $3.853 $ 782 $3,435