HD 2.SEGMENT REPORTING AND NET SALES

We currently conduct our retail operations in the U.S., Canada, and Mexico, each of which represents one of our three operating segments. Our operating segments reflect the way in which internally-reported financial information is regularly reviewed by the chief operating decision maker, who is our President and Chief Executive Officer, to analyze performance, make decisions and allocate resources. For disclosure purposes, we aggregate these three operating segments into one reportable segment due to the similar nature of their operations and economic characteristics.


HD 2.SEGMENT REPORTING AND NET SALES

The following table presents net property and equipment, classified by geography: in millions####January 28, 2024####January 29, 2023####January 30, 2022 Net property and equipment – in the U.S.##$##23,347##$##23,057##$##22,696 Net property and equipment – outside the U.S.####2,807####2,574####2,503 Net property and equipment##$##26,154##$##25,631##$##25,199


HD 2.SEGMENT REPORTING AND NET SALES

No sales to an individual customer accounted for more than 10% of revenue during any of the last three fiscal years.


HD 2.SEGMENT REPORTING AND NET SALES

The following table presents net sales, classified by geography: ####Fiscal####Fiscal####Fiscal in millions####2023####2022####2021 Net sales – in the U.S.##$##140,083##$##144,840##$##138,920 Net sales – outside the U.S.####12,586####12,563####12,237 Net sales##$##152,669##$##157,403##$##151,157


HD 2.SEGMENT REPORTING AND NET SALES

The following table presents net sales by products and services: ####Fiscal####Fiscal####Fiscal in millions####2023####2022####2021 Net sales – products##$##146,835##$##151,804##$##145,745 Net sales – services####5,834####5,599####5,412 Net sales##$##152,669##$##157,403##$##151,157


HD 2.SEGMENT REPORTING AND NET SALES

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


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The following table presents net sales by major product line (and related services): ####Fiscal####Fiscal####Fiscal in millions####2023####2022####2021 Building Materials##$##57,039##$##59,533##$##54,990 Décor####50,295####52,322####50,437 Hardlines####45,335####45,548####45,730 Net sales##$##152,669##$##157,403##$##151,157


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The following table presents net sales by merchandising department (and related services): ######Fiscal##########Fiscal##########Fiscal#### ######2023##########2022##########2021#### dollars in millions####Net Sales####% of Net Sales######Net Sales####% of Net Sales######Net Sales####% of Net Sales## Appliances##$##13,863####9.1##%##$##14,461####9.2##%##$##14,232####9.4##% Building Materials####11,975####7.8######11,298####7.2######9,823####6.5## Décor/Storage####6,012####3.9######6,357####4.0######6,095####4.0## Electrical/Lighting####12,521####8.2######13,746####8.7######13,473####8.9## Flooring####8,754####5.7######9,222####5.9######9,225####6.1## Hardware####8,147####5.3######8,104####5.1######7,873####5.2## Indoor Garden####14,743####9.7######14,990####9.5######15,546####10.3## Kitchen and Bath####10,593####6.9######11,102####7.1######10,432####6.9## Lumber####11,731####7.7######13,460####8.6######13,344####8.8## Millwork####8,301####5.4######8,423####5.4######7,412####4.9## Outdoor Garden####10,278####6.7######10,078####6.4######10,317####6.8## Paint####11,073####7.3######11,180####7.1######10,453####6.9## Plumbing####12,511####8.2######12,606####8.0######10,938####7.2## Tools####12,167####8.0######12,376####7.9######11,994####7.9## Total##$##152,669####100.0##%##$##157,403####100.0##%##$##151,157####100.0##%


HD Net Property and Equipment

The following table presents components of net property and equipment: in millions####January 28, 2024####January 29, 2023 Land##$##9,027##$##8,719 Buildings and improvements####20,030####19,430 Furniture, fixtures, and equipment####16,667####16,564 Leasehold improvements####2,254####2,130 Construction in progress####1,192####1,297 Finance leases####4,087####4,135 Property and equipment, at cost####53,257####52,275 Less accumulated depreciation and finance lease amortization####27,103####26,644 Net property and equipment##$##26,154##$##25,631


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The following table presents depreciation and finance lease amortization expense, including depreciation and finance lease amortization expense included in cost of sales: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Depreciation and finance lease amortization expense##$##3,020##$##2,756##$##2,650


HD Leases

The following table presents the consolidated balance sheet classification related to operating and finance leases: in millions##Consolidated Balance Sheet Classification####January 28, 2024####January 29, 2023 Assets:########## Operating lease assets##Operating lease right-of-use assets##$##7,884##$##6,941 Finance lease assets (1)##Net property and equipment####2,840####2,899 Total lease assets####$##10,724##$##9,840 Liabilities:########## Current:########## Operating lease liabilities##Current operating lease liabilities##$##1,050##$##945 Finance lease liabilities##Current installments of long-term debt####268####231 Long-term:########## Operating lease liabilities##Long-term operating lease liabilities####7,082####6,226 Finance lease liabilities##Long-term debt, excluding current installments####3,000####3,054 Total lease liabilities####$##11,400##$##10,456


HD —————

(1) Finance lease assets are recorded net of accumulated amortization of $1.2 billion as of both January 28, 2024 and January 29, 2023.


HD —————

The following table presents components of lease cost, excluding short-term lease cost and sublease income which are immaterial: ##Consolidated Statement of Earnings Classification (1)####Fiscal####Fiscal####Fiscal in millions######2023####2022####2021 Operating lease cost##Selling, general and administrative##$##1,359##$##1,169##$##1,084 Finance lease cost:############## Amortization of leased assets##Depreciation and amortization####304####282####250 Interest on lease liabilities##Interest expense####126####125####127 Variable lease cost##Selling, general and administrative####486####470####425


HD —————

(1)Costs associated with our sourcing and distribution network are recorded in cost of sales, with the exception of interest on finance lease liabilities.


HD —————

The following table presents weighted average remaining lease terms and discount rates: ##January 28, 2024####January 29, 2023## Weighted Average Remaining Lease Term (Years):######## Operating leases##10####9## Finance leases##13####14## Weighted Average Discount Rate:######## Operating leases##3.7##%##3.2##% Finance leases##3.7##%##4.3##%


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The following table presents approximate future minimum payments under operating and finance leases at January 28, 2024: in millions####Operating Leases####Finance Leases Fiscal 2024##$##1,325##$##381 Fiscal 2025####1,342####456 Fiscal 2026####1,191####347 Fiscal 2027####1,041####323 Fiscal 2028####884####287 Thereafter####4,288####2,251 Total lease payments####10,071####4,045 Less: imputed interest####1,939####777 Present value of lease liabilities##$##8,132##$##3,268


HD Note: We have excluded approximately $450 million of lease payments (undiscounted basis) for leases that have been signed but have not yet commenced.

The following table presents supplemental cash flow information related to leases: ####Fiscal####Fiscal####Fiscal in millions####2023####2022####2021 Cash paid for amounts included in the measurement of lease liabilities:############ Operating cash flows – operating leases##$##1,328##$##1,157##$##1,090 Operating cash flows – finance leases####126####125####127 Financing cash flows – finance leases####271####241####182 Supplemental non-cash information:############ Lease assets obtained in exchange for new operating lease liabilities####1,827####1,991####964 Lease assets obtained in exchange for new finance lease liabilities####336####322####672


HD Goodwill

The following table presents the changes in the carrying amount of our goodwill: ####Fiscal####Fiscal in millions####2023####2022 Goodwill, balance at beginning of year##$##7,444##$##7,449 Acquisitions (1)####998####— Other (2)####13####(5) Goodwill, balance at end of year##$##8,455##$##7,444


HD —————

(1) Fiscal 2023 includes the preliminary determination of goodwill related to acquisitions completed within the year. See Note 13 for further details.


HD —————

(2) Reflects the net impact of foreign currency translation.


HD Intangible Assets

The following table presents information regarding our intangible assets, which are included in other assets on the consolidated balance sheets: ########January 28, 2024 (1)############January 29, 2023#### in millions####Gross Carrying Amount####Accumulated Amortization####Net Carrying Amount####Gross Carrying Amount####Accumulated Amortization####Net Carrying Amount Definite-Lived Intangible Assets:######################## Customer relationships##$##3,425##$##(670)##$##2,755##$##3,034##$##(495)##$##2,539 Trade names####227####(25)####202####151####(16)####135 Other####12####(12)####—####12####(12)####— Indefinite-Lived Intangible Assets:######################## Trade names####649########649####649########649 Total Intangible Assets##$##4,313##$##(707)##$##3,606##$##3,846##$##(523)##$##3,323


HD —————

(1) Includes the preliminary allocation of fair value to intangible assets related to acquisitions completed within fiscal 2023. See Note 13 for further details.


HD —————

Our intangible asset amortization expense was immaterial for fiscal 2023, fiscal 2022, and fiscal 2021.


HD —————

The following table presents the estimated future amortization expense related to definite-lived intangible assets as of January 28, 2024: in millions####Amortization Expense Fiscal 2024##$##207 Fiscal 2025####207 Fiscal 2026####207 Fiscal 2027####198 Fiscal 2028####181 Thereafter####1,957 Total##$##2,957


HD Short-Term Debt

We have a commercial paper program that allows for borrowings up to $5.0 billion. In connection with our program, we have back-up credit facilities with a consortium of banks for borrowings up to $5.0 billion, which consist 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. In July 2023, we completed the renewal of our 364-day $1.5 billion credit facility, extending the maturity from July 2023 to July 2024. All of our short-term borrowings in fiscal 2023 and fiscal 2022 were under our commercial paper program. At January 28, 2024 and January 29, 2023, there were no outstanding borrowings under this program.


HD Short-Term Debt

The following table presents additional information on borrowings under our commercial paper program during fiscal 2023 and fiscal 2022: ####Fiscal####Fiscal in millions####2023####2022 Maximum amount outstanding during the period##$##1,453##$##2,745 Average daily short-term borrowings####72####269


HD Long-Term Debt

The following table presents details of the components of our long-term debt: ############Carrying Amount (1)#### in millions##Interest Payable####Principal Amount####January 28, 2024######January 29, 2023 2.70% Senior notes due April 2023##Semi-annually##$##—##$##—####$##1,000 3.75% Senior notes due February 2024##Semi-annually####1,100####1,100######1,099 2.70% Senior notes due April 2025##Semi-annually####500####499######498 5.125% Senior notes due April 2025##Semi-annually####500####498######— 3.35% Senior notes due September 2025##Semi-annually####1,000####999######998 4.00% Senior notes due September 2025##Semi-annually####750####749######748 3.00% Senior notes due April 2026##Semi-annually####1,300####1,296######1,295 2.125% Senior notes due September 2026##Semi-annually####1,000####995######994 4.95% Senior notes due September 2026##Semi-annually####750####746######— 2.875% Senior notes due April 2027##Semi-annually####750####745######744 2.50% Senior notes due April 2027##Semi-annually####750####746######745 2.80% Senior notes due September 2027##Semi-annually####1,000####979######979 0.90% Senior notes due March 2028##Semi-annually####500####497######496 1.50% Senior notes due September 2028##Semi-annually####1,000####994######993 3.90% Senior notes due December 2028##Semi-annually####1,000####970######977 4.90% Senior notes due April 2029##Semi-annually####750####743######— 2.95% Senior notes due June 2029##Semi-annually####1,750####1,665######1,675 2.70% Senior notes due April 2030##Semi-annually####1,500####1,346######1,347 1.375% Senior notes due March 2031##Semi-annually####1,250####1,167######1,170 1.875% Senior notes due September 2031##Semi-annually####1,000####936######942 3.25% Senior notes due April 2032##Semi-annually####1,250####1,239######1,237 4.50% Senior notes due September 2032##Semi-annually####1,250####1,243######1,242 5.875% Senior notes due December 2036##Semi-annually####3,000####2,872######2,874 3.30% Senior notes due April 2040##Semi-annually####1,250####1,057######1,075 5.40% Senior notes due September 2040##Semi-annually####500####496######496 5.95% Senior notes due April 2041##Semi-annually####1,000####991######990 4.20% Senior notes due April 2043##Semi-annually####1,000####927######939 4.875% Senior notes due February 2044##Semi-annually####1,000####982######981 4.40% Senior notes due March 2045##Semi-annually####1,000####980######980 4.25% Senior notes due April 2046##Semi-annually####1,600####1,586######1,586 3.90% Senior notes due June 2047##Semi-annually####1,150####1,145######1,144 4.50% Senior notes due December 2048##Semi-annually####1,500####1,465######1,464 3.125% Senior notes due December 2049##Semi-annually####1,250####1,173######1,178 3.35% Senior notes due April 2050##Semi-annually####1,500####1,472######1,472 2.375% Senior notes due March 2051##Semi-annually####1,250####1,150######1,156 2.75% Senior notes due September 2051##Semi-annually####1,000####983######983 3.625% Senior notes due April 2052##Semi-annually####1,500####1,458######1,458 4.95% Senior notes due September 2052##Semi-annually####1,000####980######980 3.50% Senior notes due September 2056##Semi-annually####1,000####974######973 Total senior notes####$##42,150##$##40,843####$##39,908 Finance lease obligations; payable in varying installments through April 30, 2076########$##3,268####$##3,285 Total long-term debt##########44,111######43,193 Less current installments of long-term debt##########1,368######1,231 Long-term debt, excluding current installments########$##42,743####$##41,962


HD —————

(1) Includes unamortized discounts, premiums, debt issuance costs, and the effects of fair value hedges.


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November 2023 Issuance. In November 2023, we issued three tranches of senior notes. •The first tranche consisted of $500 million of 5.125% senior notes due April 30, 2025 at a discount of $0.3 million. Interest on these notes is due semi-annually on April 30 and October 30 of each year, beginning April 30, 2024. •The second tranche consisted of $750 million of 4.95% senior notes due September 30, 2026 at a discount of $1.6 million. Interest on these notes is due semi-annually on March 30 and September 30 of each year, beginning March 30, 2024. •The third tranche consisted of $750 million of 4.90% senior notes due April 15, 2029 at a discount of $3.4 million. Interest on these notes is due semi-annually on April 15 and October 15 of each year, beginning April 15, 2024. •Issuance costs totaled $7 million.


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Repayments. In April 2023, we repaid our $1.0 billion 2.70% senior notes at maturity.


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Redemption. All of our senior notes may be redeemed by us at any time, in whole or in part, at the redemption price plus accrued interest up to the redemption date. With respect to the 5.875% 2036 notes and the 5.125% 2025 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 to be redeemed that would be due after the related redemption date. With respect to all other notes, prior to the 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. On or after the Par Call Date, the redemption price is equal to 100% of the principal amount of the 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 redeem those notes at 101% of the aggregate principal amount of the notes plus accrued interest up to the redemption date.


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The indentures governing the notes do 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 indentures governing the notes contain various customary covenants; however, none are expected to impact our liquidity or capital resources.


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Maturities of Long-Term Debt. The following table presents our long-term debt maturities, excluding finance leases, as of January 28, 2024: in millions####Principal Fiscal 2024##$##1,100 Fiscal 2025####2,750 Fiscal 2026####3,050 Fiscal 2027####2,500 Fiscal 2028####2,500 Thereafter####30,250 Total##$##42,150


HD Derivative Instruments and Hedging Activities

We use derivative instruments as part of our normal business operations in the management of our exposure to fluctuations in foreign currency exchange rates and interest rates on certain debt. Our objective in managing these exposures is to decrease the volatility of cash flows affected by changes in the underlying rates and minimize the risk of changes in the fair value of our senior notes.


Fair Value Hedges. We had outstanding interest rate swap agreements with combined notional amounts of $5.4 billion at both January 28, 2024 and January 29, 2023. 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 January 28, 2024 and January 29, 2023, the fair values of these agreements totaled $858 million and $778 million, respectively, all of which are recognized in other long-term liabilities on the consolidated balance sheets.


All of our interest rate swap agreements designated as fair value hedges 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.


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During the second quarter of fiscal 2023, we amended all of our interest rate swap agreements to replace LIBOR with SOFR and concurrently adopted certain expedients provided in Topic 848. These amendments did not result in any change to our application of hedge accounting or have a material impact to our consolidated financial statements. See Note 1 for further discussion.


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Cash Flow Hedges. At January 28, 2024 and January 29, 2023, we had outstanding foreign currency forward contracts accounted for as cash flow hedges, which hedge the variability of forecasted cash flows associated with certain payments made in our foreign operations. At January 28, 2024 and January 29, 2023, the notional amounts and the fair values of these contracts were not material. Additionally, the realized and unrealized gains and losses on these instruments were not material during fiscal 2023, fiscal 2022, and fiscal 2021.


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We also settled forward-starting interest rate swap agreements in prior years, which were used to hedge the variability in future interest payments attributable to changing interest rates on forecasted debt issuances. Unamortized losses on these forward-starting swaps, which were designated as cash flow hedges, are being amortized to interest expense over the life of the respective notes. Unamortized losses recognized on these swaps remaining in accumulated other comprehensive loss were immaterial as of January 28, 2024 and January 29, 2023, as were the losses recognized within interest expense for fiscal 2023, fiscal 2022, and fiscal 2021.


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We expect an immaterial amount recorded in accumulated other comprehensive loss as of January 28, 2024 to be reclassified into earnings within the next 12 months.


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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 $714 million and $634 million as of January 28, 2024 and January 29, 2023, which was recorded in other current assets on the consolidated balance sheets. We did not hold any cash collateral as of January 28, 2024 or January 29, 2023.


HD Provision for Income Taxes

The following table presents our earnings before the provision for income taxes: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 United States##$##18,681##$##20,990##$##20,320 Foreign####1,243####1,487####1,417 Total##$##19,924##$##22,477##$##21,737


HD Provision for Income Taxes

The following table presents our provision for income taxes: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Current:############ Federal##$##3,764##$##3,918##$##4,066 State####882####880####981 Foreign####365####436####511 Total current####5,011####5,234####5,558 Deferred:############ Federal####(228)####102####(155) State####12####61####(11) Foreign####(14)####(25)####(88) Total deferred####(230)####138####(254) Provision for income taxes##$##4,781##$##5,372##$##5,304


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The following table presents our combined federal, state, and foreign effective tax rates: ##Fiscal####Fiscal####Fiscal## ##2023####2022####2021## Combined federal, state, and foreign effective tax rates##24.0##%##23.9##%##24.4##%


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The following table presents the reconciliation of our provision for income taxes at the federal statutory rate of 21% to the actual tax expense: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Income taxes at federal statutory rate##$##4,184##$##4,720##$##4,565 State income taxes, net of federal income tax benefit####706####743####766 Other, net####(109)####(91)####(27) Total##$##4,781##$##5,372##$##5,304


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On August 16, 2022, the Inflation Reduction Act of 2022 (“2022 Tax Act”) was enacted into law. The key tax provisions include a 15% minimum tax on adjusted financial statement income. There was no impact on the Company’s effective tax rate as a result of the 15% minimum tax under the 2022 Tax Act.


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Additionally, as of the end of fiscal 2023, the Organization for Economic Cooperation and Development (“OECD”) has published rules for a new global minimum tax framework through its base erosion and profit shifting pillar two project (“BEPS Pillar Two”), and various governments around the world have enacted or are in the process of enacting legislation on these rules. Many member states have committed to adopting BEPS Pillar Two, which calls for a global minimum tax of 15% to be effective for tax years beginning in 2024. The OECD guidance published to date includes transition and safe harbor rules around the implementation of the BEPS Pillar Two global minimum tax. We are monitoring developments and evaluating the impacts these new rules will have on our effective tax rate, including eligibility to qualify for these safe harbor rules, and at this time do not expect the impact to be material.


HD Deferred Taxes

The following table presents the tax effects of temporary differences that give rise to significant portions of our deferred tax assets and deferred tax liabilities: in millions####January 28, 2024####January 29, 2023 Assets:######## Deferred compensation##$##237##$##236 Accrued self-insurance liabilities####258####276 State income taxes####209####149 Merchandise inventories####110####30 Non-deductible reserves####474####318 Net operating losses####99####115 Lease liabilities####2,034####1,879 Deferred revenue####191####148 Other####46####56 Total deferred tax assets####3,658####3,207 Valuation allowance####(67)####(5) Total deferred tax assets, net of valuation allowance####3,591####3,202 Liabilities:######## Property and equipment####(988)####(992) Goodwill and other intangibles####(1,000)####(953) Lease right-of-use assets####(1,956)####(1,799) Tax on unremitted earnings####(53)####(63) Other####(144)####(95) Total deferred tax liabilities####(4,141)####(3,902) Net deferred tax liabilities##$##(550)##$##(700)


HD Deferred Taxes

The following table presents our noncurrent deferred tax assets and noncurrent deferred tax liabilities, netted by tax jurisdiction, as presented on the consolidated balance sheets: in millions##Consolidated Balance Sheet Classification####January 28, 2024####January 29, 2023 Deferred tax assets##Other assets##$##313##$##319 Deferred tax liabilities##Deferred income taxes####(863)####(1,019) Net deferred tax liabilities####$##(550)##$##(700)


HD Deferred Taxes

As of January 28, 2024, we recorded deferred tax assets of $99 million for net operating losses and $69 million for tax credits, primarily related to state jurisdictions. These losses and credits expire at various dates beginning in 2024 and 2025, respectively. We have concluded that it is more likely than not that tax benefits related to substantially all net operating losses will be realized based upon the expectation that we will generate the necessary taxable income in future periods. We have concluded that it is not more likely than not that tax benefits related to substantially all tax credits will be realized prior to expiration, and a valuation allowance has been recorded against these tax credits. The overall change in our valuation allowance was not material in fiscal 2023.


HD Reinvestment of Unremitted Earnings

Substantially all of our current year foreign cash earnings in excess of working capital and cash needed for strategic investments are not intended to be indefinitely reinvested offshore. Therefore, the tax effects of repatriation for applicable state taxes and foreign withholding taxes of such cash earnings have been provided for in the accompanying consolidated statements of earnings. We have the intent and ability to reinvest substantially all of the $4.8 billion of non-cash unremitted earnings of our non-U.S. subsidiaries indefinitely. Accordingly, no provision for state taxes or foreign withholding taxes was recorded on these unremitted earnings in the accompanying consolidated statements of earnings. It is impracticable for us to determine the amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings due to the complexities associated with the hypothetical calculation.


HD Tax Return Examination Status

Our income tax returns are routinely examined by U.S. federal, state and local, and foreign tax authorities. Our U.S. federal tax returns for fiscal years 2010 through 2021, with the exception of 2015, are currently under examination by the IRS. With respect to fiscal years 2010 to 2014, the IRS had issued a proposed adjustment relating to transfer pricing between our entities in the U.S. and China, which was resolved during fiscal year 2023 with no material impact to our consolidated financial condition, results of operations, or cash flows. There are also ongoing U.S. state and local audits and other foreign audits covering fiscal years 2013 through 2021. We do not expect the results from any ongoing income tax audit to have a material impact on our consolidated financial condition, results of operations, or cash flows.


HD Tax Return Examination Status

Over the next twelve months, it is reasonably possible that the resolution of federal and state tax examinations, as well as the expiration of statutes of limitations, could reduce our unrecognized tax benefits by an immaterial amount. We do not anticipate the resolution of these matters will result in a material change to our consolidated financial condition or results of operations.


HD Unrecognized Tax Benefits

The following table reconciles the beginning and ending amount of our gross unrecognized tax benefits: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Unrecognized tax benefits balance at beginning of fiscal year##$##643##$##570##$##540 Additions based on tax positions related to the current year####74####75####80 Additions for tax positions of prior years####13####22####24 Reductions for tax positions of prior years####(14)####(7)####(40) Reductions due to settlements####—####(1)####(29) Reductions due to lapse of statute of limitations####(27)####(16)####(5) Unrecognized tax benefits balance at end of fiscal year##$##689##$##643##$##570


HD Unrecognized Tax Benefits

Unrecognized tax benefits that if recognized would affect our annual effective income tax rate on net earnings were $568 million, $537 million, and $479 million at January 28, 2024, January 29, 2023, and January 30, 2022, respectively.


HD Interest and Penalties

Net adjustments to accruals for interest and penalties associated with uncertain tax positions were immaterial in fiscal 2023, fiscal 2022, and fiscal 2021. Our total accrued interest and penalties associated with uncertain tax positions were immaterial as of January 28, 2024 and January 29, 2023.


HD 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####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Common stock:############ Shares at beginning of year####1,794####1,792####1,789 Shares issued under employee stock plans, net####2####2####3 Shares at end of year####1,796####1,794####1,792 Treasury stock:############ Shares at beginning of year####(778)####(757)####(712) Repurchases of common stock####(26)####(21)####(45) Shares at end of year####(804)####(778)####(757) Shares outstanding at end of year####992####1,016####1,035 Cash dividends per share##$##8.36##$##7.60##$##6.60


HD 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 January 28, 2024, approximately $12.3 billion of the $15.0 billion share repurchase authorization remained available.


HD Share Repurchases

The following table presents information about our repurchases of common stock, all of which were completed through open market purchases: ####Fiscal####Fiscal####Fiscal in millions####2023####2022####2021 Total number of shares repurchased####26####21####45 Total cost of shares repurchased##$##8,074##$##6,504##$##15,001


HD Share Repurchases

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 excise taxes incurred on share repurchases.


HD 8.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


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The following table presents the assets and liabilities that are measured at fair value on a recurring basis: ####January 28, 2024####January 29, 2023 in millions####Fair Value (Level 2)####Fair Value (Level 2) Derivative agreements – assets##$##—##$##— Derivative agreements – liabilities####(859)####(778) Total##$##(859)##$##(778)


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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.


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Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis


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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 fiscal 2023, fiscal 2022, or fiscal 2021.


HD Other Fair Value Disclosures

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


HD Other Fair Value Disclosures

The following table presents the aggregate fair values and carrying values of our senior notes: ######January 28, 2024##########January 29, 2023#### in millions####Fair Value (Level 1)######Carrying Value####Fair Value (Level 1)######Carrying Value Senior notes##$##38,495####$##40,843##$##38,537####$##39,908


HD Omnibus Stock Incentive Plans

The Home Depot, Inc. Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022 (the “Omnibus Plan”) and The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan (the “1997 Plan” and collectively with the Omnibus Plan, the “Plans”) provide that incentive and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, deferred shares, and other stock-based awards may be issued to certain of our associates and non-employee directors. Under the Omnibus Plan, the maximum number of shares of our common stock authorized for issuance is 80 million shares plus a number of shares (not to exceed 10 million) related to underlying awards outstanding as of May 19, 2022, which can be returned to the share pool if those awards are subsequently terminated or expire unexercised, or are cancelled, forfeited or lapse for any reason, with any award other than a stock option or stock appreciation right reducing the number of shares available for issuance by 2.11 shares. At January 28, 2024, there were approximately 77 million shares available for future grants under the Omnibus Plan. No additional equity awards could be issued from the 1997 Plan after May 26, 2005.


HD Omnibus Stock Incentive Plans

The following table presents total stock-based compensation expense, net of estimated forfeitures, including expense related to our ESPPs, and related income tax benefit: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Pre-tax stock-based compensation expense##$##382##$##367##$##403 Income tax benefit####(79)####(73)####(86) After-tax stock-based compensation expense##$##303##$##294##$##317


HD Omnibus Stock Incentive Plans

At January 28, 2024, there was $454 million of unrecognized stock-based compensation expense, which is expected to be recognized over a weighted average period of two years.


HD Table of Contents

The award types issued under the Plans are as follows:


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Stock Options. Under the terms of the Plans, incentive stock options and nonqualified stock options must have an exercise price at or above the fair market value of our stock on the date of the grant. Typically, nonqualified stock options vest at the rate of 25% per year commencing on the second anniversary date of the grant and expire on the tenth anniversary date of the grant. Additionally, a majority of our stock options may become non-forfeitable upon the associate reaching age 60, provided the associate has had five years of continuous service. No incentive stock options have been issued under the Omnibus Plan.


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We estimate the fair value of stock option awards on the date of grant using the Black-Scholes option-pricing model. Our determination of fair value of stock option awards on the date of grant using the Black-Scholes option-pricing model is affected by our stock price as well as assumptions regarding a number of variables.


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The following table presents the per share weighted average fair value of stock options granted and the assumptions used in determining fair value at the date of grant using the Black-Scholes option-pricing model: ####Fiscal######Fiscal######Fiscal## ####2023######2022######2021## Per share weighted average fair value##$##66.01####$##70.21####$##57.71## Risk-free interest rate####3.6##%####2.5##%####1.0##% Assumed volatility####26.7##%####27.0##%####26.5##% Assumed dividend yield####2.8##%####2.4##%####2.2##% Assumed lives of options####6 years######6 years######6 years##


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The following table presents a summary of stock option activity by number of shares and weighted average exercise price during fiscal 2023: shares in thousands##Number of Shares####Weighted Average Exercise Price Outstanding at beginning of year##3,626##$##167.66 Granted##235####283.85 Exercised##(743)####106.96 Forfeited##(33)####275.93 Outstanding at end of year##3,085####189.97


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The following table presents the total intrinsic value of stock options exercised: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Total intrinsic value of stock options exercised##$##152##$##61##$##237


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The following table presents details regarding outstanding and exercisable stock options at January 28, 2024: 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##3,085##$##510##4.6 years##$##189.97 Exercisable##2,102####424##3.2 years####153.57


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Shares of common stock issued from stock option exercises may be issued from authorized and unissued common stock or treasury stock.


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Restricted Stock and Performance Share Awards. Restrictions on the restricted stock issued under the Plans generally lapse over various periods up to five years. At the grant date of the award, recipients of restricted stock are granted voting rights and generally receive dividends on unvested shares, paid in the form of cash on each dividend payment date. Dividends paid on unvested shares were immaterial for fiscal 2023, fiscal 2022, and fiscal 2021. Additionally, the majority of our restricted stock awards may become non-forfeitable upon the associate’s attainment of age 60, provided the associate has had five years of continuous service.


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We have also granted performance share awards under the Plans. These awards provide for the issuance of shares of our common stock at the end of the three-year performance cycle based upon our performance against target average ROIC and operating profit over that performance cycle. Additionally, the awards become non-forfeitable upon the associate’s attainment of age 60, provided the associate has had five years of continuous service and minimum performance targets are achieved. Recipients of performance share awards have no voting rights until the shares are issued following completion of the performance period. Dividend equivalents accrue on the performance shares (as reinvested shares) and are paid upon the payout of the award based upon the actual number of shares earned. The fair value of the restricted stock and performance shares is based on the closing stock price on the date of grant and is expensed over the period during which the restrictions lapse.


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Restricted Stock Units. Each restricted stock unit entitles the associate to one share of common stock to be received upon vesting up to five years after the grant date. Additionally, the majority of these awards may become non-forfeitable upon the associate reaching age 60, provided the associate has had five years of continuous service. Recipients of restricted stock units have no voting rights until the vesting of the award. Recipients receive dividend equivalents that accrue on unvested units and are paid out in the form of additional shares of stock on the vesting date. The fair value of the restricted stock units is based on the closing stock price on the date of grant and is expensed over the period during which the units vest.


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The following table presents a summary of restricted stock, performance shares, and restricted stock unit activity during fiscal 2023: shares in thousands##Number of Shares####Weighted Average Grant Date Fair Value Nonvested at beginning of year##3,359##$##261.66 Granted##1,692####273.63 Vested##(1,429)####231.72 Forfeited##(236)####277.20 Nonvested at end of year##3,386####279.19


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The following table presents the total fair value of restricted stock, performance shares, and restricted stock units vested: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Total fair value vested##$##412##$##479##$##405


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Deferred Shares. We grant awards of deferred shares to non-employee directors under the Plans. Each deferred share entitles the non-employee director to one share of common stock to be received following termination of Board service. Recipients of deferred shares have no voting rights and receive dividend equivalents that accrue and are paid out in the form of additional shares of stock upon payout of the underlying shares following termination of service. The fair value of the deferred shares is based on the closing stock price on the date of grant and is expensed immediately upon grant.


HD Table of Contents

The following table presents deferred shares granted to non-employee directors: ##Fiscal##Fiscal##Fiscal ##2023##2022##2021 Deferred shares granted to non-employee directors##19,000##19,000##15,000


HD Employee Stock Purchase Plans

We maintain two ESPPs: a U.S. and a non-U.S. plan. The plan for U.S. associates is a tax-qualified plan under Section 423 of the Internal Revenue Code. The non-U.S. plan is not a Section 423 plan. At January 28, 2024, there were approximately 15 million shares available under the U.S. plan and approximately 18 million shares available under the non-U.S. plan. The purchase price of shares under the ESPPs is equal to 85% of the stock’s fair market value on the last day of the purchase period, which is a six-month period ending on December 31 and June 30 of each year. During fiscal 2023, there were approximately 1 million shares purchased under the ESPPs at an average price of $277.19. Under the outstanding ESPPs at January 28, 2024, associates have contributed $22 million to purchase shares at 85% of the stock’s fair market value on the last day of the current purchase period, June 30, 2024.


HD 10.EMPLOYEE BENEFIT PLANS

We maintain active defined contribution retirement plans for our associates (the “Benefit Plans”). All associates satisfying certain service requirements are eligible to participate in the Benefit Plans. We make cash contributions each payroll period up to specified percentages of associates’ contributions as approved by our Board of Directors.


HD 10.EMPLOYEE BENEFIT PLANS

We also maintain the Restoration Plans to provide certain associates deferred compensation that they would have received under the Benefit Plans as a matching contribution if not for the maximum compensation limits under the Internal Revenue Code. We fund the Restoration Plans through contributions made to grantor trusts, which are then used to purchase shares of our common stock in the open market.


HD 10.EMPLOYEE BENEFIT PLANS

The following table presents our contributions to the Benefit Plans and the Restoration Plans: in millions####Fiscal####Fiscal####Fiscal ####2023####2022####2021 Contributions to the Benefit Plans and the Restoration Plans##$##293##$##280##$##278


HD 10.EMPLOYEE BENEFIT PLANS

At January 28, 2024, the Benefit Plans and the Restoration Plans held a total of 5.0 million shares of our common stock in trusts for plan participants.


HD 11.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##Fiscal##Fiscal##Fiscal ##2023##2022##2021 Basic weighted average common shares##999##1,022##1,054 Effect of potentially dilutive securities (1)##3##3##4 Diluted weighted average common shares##1,002##1,025##1,058 Anti-dilutive securities excluded from diluted weighted average common shares##1##1##—


HD —————

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


HD 12.COMMITMENTS AND CONTINGENCIES

At January 28, 2024, we had outstanding letters of credit totaling $598 million, primarily related to certain business transactions, including insurance programs, trade contracts, and construction contracts.


HD 12.COMMITMENTS AND 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.


HD 13.ACQUISITIONS

During fiscal 2023, we completed three individually immaterial acquisitions for total aggregate cash purchase consideration of $1.5 billion. Based on preliminary acquisition date fair values, we recognized aggregate definite-lived intangible assets of $469 million with a weighted average amortization period of 17 years, primarily related to customer relationships, and goodwill of $998 million. The goodwill arising from the acquisitions is primarily attributable to operational synergies and acceleration of growth strategy, as well as the assembled workforce. The portion of goodwill generated through these acquisitions that is expected to be deductible for U.S. federal and state tax purposes is not material.


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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 dates. 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 respective acquisition dates. Accordingly, there may be adjustments to the assigned values of acquired assets and liabilities, including, but not limited to, intangible assets and their respective estimated useful lives. The final determination of the fair values and related income tax impacts will be completed as soon as practicable, and within the measurement period of up to one year from the respective acquisition dates 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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Net sales and net earnings for fiscal 2023 attributable to these acquisitions in the aggregate after their respective acquisition dates were immaterial. Pro forma results of operations would not be materially different as a result of the acquisitions in the aggregate and therefore are not presented.


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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure


HD Table of Contents

Not applicable.


HD DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.


HD DISCLOSURE CONTROLS AND PROCEDURES

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.


HD MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) promulgated under the Exchange Act. 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 January 28, 2024 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 January 28, 2024 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 January 28, 2024 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein.


HD CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

We are in the process of an ongoing business transformation initiative, which includes upgrading and migrating certain accounting and finance systems. We plan to continue to migrate additional business processes over the course of the next few years and have modified and will continue to modify the design and implementation of certain internal control processes as the transformation continues.


Except as described above, there were no other changes in our internal control over financial reporting during the fiscal quarter ended January 28, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


HD To the Stockholders and the Board of Directors

The Home Depot, Inc.: Opinion on Internal Control Over Financial Reporting


We have audited The Home Depot, Inc. and its subsidiaries' (the Company) internal control over financial reporting as of January 28, 2024, based on criteria established in Internal Control – 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 January 28, 2024, 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) (PCAOB), the consolidated balance sheets of the Company as of January 28, 2024 and January 29, 2023, the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended January 28, 2024, and the related notes (collectively, the consolidated financial statements), and our report dated March 13, 2024 expressed an unqualified opinion on those consolidated financial statements.


HD Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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.


HD Basis for Opinion

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.


HD Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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 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.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


HD Other Information

During the fiscal quarter ended January 28, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of the SEC’s Regulation S-K.


HD Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.


HD Directors, Executive Officers and Corporate Governance

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 2024 Annual Meeting of Shareholders (“Proxy Statement”).


Executive officers are appointed by, and serve at the pleasure of, the Board of Directors. Our executive officers are as follows:


WILLIAM D. BASTEK, age 57, has been Executive Vice President – Merchandising, since March 2023. From January 2019 to March 2023, Mr. Bastek served as Senior Vice President of Merchandising, Hardlines for the Company, responsible for merchandising and marketing strategies for hardware and garden. Prior to that role, he was Merchandising Vice President for hardware and tools from December 2013 to January 2019. Mr. Bastek began his career in 1989 at HD Supply, formerly known as Maintenance Warehouse, which was originally acquired by the Company in 1997. Mr. Bastek has served in various roles of increasing responsibility, including Global Product Merchant, Senior Merchant, Divisional Merchandise Manager and Merchandising Vice President for building materials.


ANN-MARIE CAMPBELL, age 58, has been Senior Executive Vice President since November 2023. From October 2020 to October 2023, she served as Executive Vice President – U.S. Stores and International Operations, from February 2016 to October 2020, she served as Executive Vice President – U.S. Stores, from January 2009 to February 2016, she served as Division President of the Southern Division, and from December 2005 to January 2009, she served as Vice President – Vendor Services. Ms. Campbell began her career with The Home Depot in 1985 as a cashier and has held roles of increasing responsibility since she joined the Company, including vice president roles in the Company’s operations, merchandising, and marketing departments. She serves as a director of Workday, Inc., a financial and human capital management software vendor.


MATTHEW A. CAREY, age 59, has been Executive Vice President – Customer Experience since April 2022. He served as Executive Vice President and Chief Information Officer from September 2008 to April 2022. From January 2006 through August 2008, he served as Senior Vice President and Chief Technology Officer at eBay Inc., an online commerce platform. Mr. Carey was previously with Wal-Mart Stores, Inc., a general merchandise retailer, from June 1985 to December 2005. His final position with Wal-Mart was Senior Vice President and Chief Technology Officer. He serves as a director of Chipotle Mexican Grill, Inc., which owns and operates restaurants in the U.S. and internationally.


JOHN DEATON, age 50, has been Executive Vice President – Supply Chain & Product Development since November 2021. From April 2021 to October 2021, he served as Senior Vice President – Operations; from May 2017 to April 2021, he served as Senior Vice President – Supply Chain; from July 2011 to April 2017, he served as Senior Vice President – Brand and Product Development; and from April 2007 to June 2011, he served as Vice President – Supply Chain.


EDWARD P. DECKER, age 61, has served as our Chair since October 2022, and as our President and Chief Executive Officer since March 2022. He served as our President and Chief Operating Officer from October 2020 through February 2022. From August 2014 to October 2020, he served as Executive Vice President – Merchandising, and from October 2006 through July 2014, he served as Senior Vice President – Retail Finance, Pricing Analytics, and Assortment Planning. Mr. Decker joined The Home Depot in 2000 and held various strategic planning roles, including serving as Vice President – Strategic Business Development from November 2002 to April 2006 and Senior Vice President – Strategic Business and Asset Development from April 2006 to September 2006. Prior to joining the Company, Mr. Decker held various positions in strategic planning, business development, finance, and treasury at Kimberly-Clark Corp. and Scott Paper Co., both of which are consumer products companies.


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TIMOTHY A. HOURIGAN, age 67, has been Executive Vice President – Human Resources since June 2017. From February 2016 through June 2017, he served as Division President of the Southern Division. Prior to his role as Division President, Mr. Hourigan served in various human resources roles with the Company, including Vice President – Human Resources, U.S. Stores and Operations from September 2013 to February 2016; Vice President – Compensation and Benefits from February 2007 to September 2013; and Vice President – Human Resources from July 2002 to February 2007.


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RICHARD V. McPHAIL, age 53, has been Executive Vice President and Chief Financial Officer since September 2019. From August 2017 through August 2019, he served as Senior Vice President, Finance Control and Administration of the Company, and was responsible for enterprise financial reporting and operations, financial planning and analysis, treasury, payments, tax, and international financial operations. From August 2014 to September 2017, he served as Senior Vice President, Finance, with responsibility for U.S. Retail finance, strategic and financial planning, and business development activity. Mr. McPhail served as Senior Vice President, Global FP&A, Strategy, and New Business Development, from March 2013 to August 2014; Vice President, Strategic Business Development, from January 2007 to March 2013; and director of Strategic Business Development from May 2005 to January 2007. Prior to joining the Company in 2005, Mr. McPhail served as executive vice president of corporate finance for Marconi Corporation plc in London, England. Prior to Marconi, Mr. McPhail held positions with Wachovia Securities and Arthur Andersen.


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HECTOR PADILLA, age 49, has been Executive Vice President – U.S. Stores and Operations since November 2023. He previously served as Executive Vice President – Outside Sales & Services from May 2021 to October 2023, Division President of the Southern Division from June 2017 to May 2021, and Senior Vice President – Operations from November 2014 to June 2017. Mr. Padilla began his career with The Home Depot in 1994 as a store associate and has held roles of increasing responsibility since he joined the Company, serving in various management roles with oversight of field operations and services.


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TERESA WYNN ROSEBOROUGH, age 65, has been Executive Vice President, General Counsel and Corporate Secretary since November 2011. From April 2006 through November 2011, Ms. Roseborough served in several legal positions with MetLife, Inc., a provider of insurance and other financial services, including Senior Chief Counsel – Compliance & Litigation and most recently as Deputy General Counsel. Prior to joining MetLife, Ms. Roseborough was a partner with the law firm Sutherland Asbill & Brennan LLP from February 1996 through March 2006 and a Deputy Assistant Attorney General in the Office of Legal Counsel of the United States Department of Justice from January 1994 through February 1996. Ms. Roseborough serves as a director of The Hartford Financial Services Group, Inc., an investment and insurance company.


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FAHIM SIDDIQUI, age 57, has been Executive Vice President and Chief Information Officer since April 2022. He previously served as Senior Vice President of Information Technology from December 2018 to April 2022. Before joining The Home Depot, Mr. Siddiqui served as Senior Vice President and Chief Information Officer – eCommerce and Digital at Staples Inc. from May 2017 through November 2018. Prior to that role, he served in various technology, product and engineering leadership roles in the retail, energy and telecom sectors.


HD Executive Compensation

The information required by this item is incorporated by reference to the sections entitled “Executive Compensation,” “Director Compensation,” and “Leadership Development and Compensation Committee Report” in our Proxy Statement; provided that the section entitled “Executive Compensation – Pay Versus Performance” in our Proxy Statement is not incorporated herein by reference.


HD Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters


HD Executive Compensation

The information required by this item is incorporated by reference to the sections entitled “Beneficial Ownership of Common Stock” and “Executive Compensation – Equity Compensation Plan Information” in our Proxy Statement.


HD Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference to the section entitled “Corporate Governance” in our Proxy Statement.


HD Principal Accountant Fees and Services

The information required by this item is incorporated by reference to the section entitled “Independent Registered Public Accounting Firm’s Fees” in our Proxy Statement.


HD Exhibit and Financial Statement Schedules

The following documents are filed as part of this report: 1. Financial Statements


The following financial statements are set forth in Item 8 hereof: •Report of Independent Registered Public Accounting Firm (KPMG LLP, Atlanta, GA, Auditor Firm ID: 185); •Consolidated Balance Sheets as of January 28, 2024 and January 29, 2023; •Consolidated Statements of Earnings for fiscal 2023, fiscal 2022, and fiscal 2021; •Consolidated Statements of Comprehensive Income for fiscal 2023, fiscal 2022, and fiscal 2021; •Consolidated Statements of Stockholders’ Equity for fiscal 2023, fiscal 2022, and fiscal 2021; •Consolidated Statements of Cash Flows for fiscal 2023, fiscal 2022, and fiscal 2021; and •Notes to Consolidated Financial Statements.


HD 2. Financial Statement Schedules

All schedules are omitted, as the required information is inapplicable or the information is presented in our consolidated financial statements or related notes.


HD 3. Exhibits

Exhibits not filed or furnished herewith are incorporated by reference to exhibits previously filed with the SEC, as reflected in the table below. Our Current, Quarterly, and Annual Reports are filed with the SEC under File No. 1-8207. Our Registration Statements have the file numbers noted wherever such statements are identified in the following list of exhibits. We will furnish a copy of any exhibit to shareholders without charge upon written request to Investor Relations, The Home Depot, Inc., 2455 Paces Ferry Road, Atlanta, Georgia 30339, via the internet at http://ir.homedepot.com, or by calling Investor Relations at (770) 384-2871. Exhibit##Description##Reference 3.1##Amended and Restated Certificate of Incorporation of The Home Depot, Inc.##Form 10-Q for the fiscal quarter ended July 31, 2011, Exhibit 3.1 3.2##By-Laws of The Home Depot, Inc. (Amended and Restated Effective February 23, 2023)##Form 8-K filed February 28, 2023, Exhibit 3.2 4.1##Indenture, dated as of May 4, 2005, between The Home Depot, Inc. and The Bank of New York Mellon Trust Company, N.A. (fka The Bank of New York Trust Company, N.A.), as Trustee##Form S-3 (File No. 333-124699) filed May 6, 2005, Exhibit 4.1 4.2##Indenture, dated as of August 24, 2012, between The Home Depot, Inc. and Deutsche Bank Trust Company Americas, as Trustee##Form S-3 (File No. 333-183621) filed August 29, 2012, Exhibit 4.3 4.3##Form of 5.875% Senior Note due December 16, 2036##Form 8-K filed December 19, 2006, Exhibit 4.3 4.4##Form of 5.40% Senior Note due September 15, 2040##Form 8-K filed September 10, 2010, Exhibit 4.2 4.5##Form of 5.95% Senior Note due April 1, 2041##Form 8-K filed March 31, 2011, Exhibit 4.2 4.6##Form of 2.700% Senior Note due April 1, 2023##Form 8-K filed April 5, 2013, Exhibit 4.2 4.7##Form of 4.200% Senior Note due April 1, 2043##Form 8-K filed April 5, 2013, Exhibit 4.3 4.8##Form of 3.750% Senior Note due February 15, 2024##Form 8-K filed September 10, 2013, Exhibit 4.3 4.9##Form of 4.875% Senior Note due February 15, 2044##Form 8-K filed September 10, 2013, Exhibit 4.4 4.10##Form of 4.40% Senior Note due March 15, 2045##Form 8-K filed June 12, 2014, Exhibit 4.3 4.11##Form of 4.250% Senior Note due April 1, 2046##Form 8-K filed June 2, 2015, Exhibit 4.3 4.12##Form of 3.35% Note due September 15, 2025##Form 8-K filed September 15, 2015, Exhibit 4.3 4.13##Form of 3.000% Senior Note due April 1, 2026##Form 8-K filed February 12, 2016, Exhibit 4.3


HD Table of Contents

Exhibit####Description##Reference 4.14####Form of 4.250% Senior Note due April 1, 2046##Form 8-K filed February 12, 2016, Exhibit 4.4 4.15####Form of 2.125% Note due September 15, 2026##Form 8-K filed September 15, 2016, Exhibit 4.2 4.16####Form of 3.500% Note due September 15, 2056##Form 8-K filed September 15, 2016, Exhibit 4.3 4.17####Form of 3.900% Note due June 15, 2047##Form 8-K filed June 5, 2017, Exhibit 4.4 4.18####Form of 2.800% Note due September 14, 2027##Form 8-K filed September 14, 2017, Exhibit 4.2 4.19####Form of 3.900% Note due December 6, 2028##Form 8-K filed December 6, 2018, Exhibit 4.4 4.20####Form of 4.500% Note due December 6, 2048##Form 8-K filed December 6, 2018, Exhibit 4.5 4.21####Form of 2.950% Note due June 15, 2029##Form 8-K filed June 17, 2019, Exhibit 4.2 4.22####Form of 3.900% Note due June 15, 2047##Form 8-K filed June 17, 2019, Exhibit 4.3 4.23####Form of 2.950% Note due June 15, 2029##Form 8-K filed January 13, 2020, Exhibit 4.2 4.24####Form of 3.125% Note due December 15, 2049##Form 8-K filed January 13, 2020, Exhibit 4.3 4.25####Form of 2.500% Note due April 15, 2027##Form 8-K filed March 30, 2020, Exhibit 4.2 4.26####Form of 2.700% Note due April 15, 2030##Form 8-K filed March 30, 2020, Exhibit 4.3 4.27####Form of 3.300% Note due April 15, 2040##Form 8-K filed March 30, 2020, Exhibit 4.4 4.28####Form of 3.350% Note due April 15, 2050##Form 8-K filed March 30, 2020, Exhibit 4.5 4.29####Form of 0.900% Note due March 15, 2028##Form 8-K filed January 7, 2021, Exhibit 4.2 4.30####Form of 1.375% Note due March 15, 2031##Form 8-K filed January 7, 2021, Exhibit 4.3 4.31####Form of 2.375% Note due March 15, 2051##Form 8-K filed January 7, 2021, Exhibit 4.4 4.32####Form of 1.500% Note due September 15, 2028##Form 8-K filed September 21, 2021, Exhibit 4.2 4.33####Form of 1.875% Note due September 15, 2031##Form 8-K filed September 21, 2021, Exhibit 4.3 4.34####Form of 2.750% Note due September 15, 2051##Form 8-K filed September 21, 2021, Exhibit 4.4 4.35####Form of 2.700% Note due April 15, 2025##Form 8-K filed March 28, 2022, Exhibit 4.2 4.36####Form of 2.875% Note due April 15, 2027##Form 8-K filed March 28, 2022, Exhibit 4.3 4.37####Form of 3.250% Note due April 15, 2032##Form 8-K filed March 28, 2022, Exhibit 4.4 4.38####Form of 3.625% Note due April 15, 2052##Form 8-K filed March 28, 2022, Exhibit 4.5 4.39####Form of 4.000% Note due September 15, 2025##Form 8-K filed September 19, 2022, Exhibit 4.2 4.40####Form of 4.500% Note due September 15, 2032##Form 8-K filed September 19, 2022, Exhibit 4.3 4.41####Form of 4.950% Note due September 15, 2052##Form 8-K filed September 19, 2022, Exhibit 4.4 4.42####Form of 5.125% Note due April 30, 2025##Form 8-K filed December 4, 2023, Exhibit 4.2 4.43####Form of 4.950% Note due September 30, 2026##Form 8-K filed December 4, 2023, Exhibit 4.3 4.45####Form of 4.900% Note due April 15, 2029##Form 8-K filed December 4, 2023, Exhibit 4.4 4.46####Description of Securities##Form 10-K for the fiscal year ended February 2, 2020, Exhibit 4.33 10.1##†##The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan##Form 10-Q for the fiscal quarter ended August 4, 2002, Exhibit 10.1 10.2##†##Form of Executive Employment Death Benefit Agreement##Form 10-K for the fiscal year ended February 3, 2013, Exhibit 10.2 10.3##†##The Home Depot Deferred Compensation Plan for Officers (As Amended and Restated Effective January 1, 2008)##Form 8-K filed August 20, 2007, Exhibit 10.1 10.4##†##Amendment No. 1 to The Home Depot Deferred Compensation Plan for Officers (As Amended and Restated Effective January 1, 2008)##Form 10-K for the fiscal year ended January 31, 2010, Exhibit 10.4 10.5##†##Amendment No. 2 to The Home Depot Deferred Compensation Plan for Officers (As Amended and Restated Effective January 1, 2008)##Form 10-K for the fiscal year ended January 31, 2021, Exhibit 10.5 10.6##†##The Home Depot, Inc. Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022##Form 10-Q for the fiscal quarter ended July 31, 2022, Exhibit 10.1


HD Table of Contents

Exhibit####Description##Reference 10.7##†##The Home Depot FutureBuilder Restoration Plan##Form 8-K filed August 20, 2007, Exhibit 10.2 10.8##†##Amendment No.1 to The Home Depot FutureBuilder Restoration Plan##Form 10-K for the fiscal year ended February 2, 2014, Exhibit 10.8 10.9##†##HD Supply Restoration Plan##Form 10-K for the fiscal year ended January 29, 2023, Exhibit 10.9 10.10##†##The Home Depot, Inc. Nonemployee Directors’ Deferred Stock Compensation Plan##Form 8-K filed August 20, 2007, Exhibit 10.3 10.11##†##The Home Depot Amended and Restated Management Incentive Plan (effective January 31, 2022)##Form 8-K filed May 24, 2022, Exhibit 10.1 10.12##†##The Home Depot, Inc. Amended and Restated Employee Stock Purchase Plan, as amended and restated effective July 1, 2012##Form 10-Q for the fiscal quarter ended April 29, 2012, Exhibit 10.1 10.13##†##Form of Executive Officer Restricted Stock Award Pursuant to The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan##Form 10-Q for the fiscal quarter ended October 31, 2004, Exhibit 10.1 10.14##†##Form of Deferred Share Award (Nonemployee Director) Pursuant to The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan##Form 8-K filed November 15, 2007, Exhibit 10.1 10.15##†##Form of Executive Officer Equity Award Terms and Conditions Agreement Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan##Form 8-K filed March 6, 2013, Exhibit 10.1 10.16##†##Form of Executive Officer Equity Award Agreement (Nonqualified Stock Option) Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan##Form 8-K filed March 8, 2016, Exhibit 10.1 10.17##†##Form of Deferred Share Award (Nonemployee Director) Pursuant to The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan##Form 10-K for the fiscal year ended January 29, 2017, Exhibit 10.21 10.18##†##Form of Executive Officer Equity Award Agreement (Nonqualified Stock Option) Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan##Form 8-K filed February 28, 2018, Exhibit 10.3 10.19##†##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##Form 8-K filed March 4, 2019, Exhibit 10.2 10.20##†##Form of Executive Officer Equity Award Agreement (Nonqualified Stock Option) Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan##Form 8-K filed March 4, 2019, Exhibit 10.3 10.21##†##Form of Executive Officer Equity Award Agreement Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan##Form 8-K filed March 2, 2020, Exhibit 10.1 10.22##†##Form of Executive Officer Restricted Stock and Stock Option Award Agreement Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan##Form 10-Q for the fiscal quarter ended November 1, 2020, Exhibit 10.4 10.23##†##Form of Executive Officer Equity Award Agreement Pursuant to The Home Depot, Inc. Amended and Restated 2005 Omnibus Stock Incentive Plan##Form 8-K filed March 1, 2021, Exhibit 10.1


HD Table of Contents

Exhibit####Description##Reference 10.24##†##Form of Executive Officer Equity Award Agreement (Performance Shares, Performance-Based Restricted Stock and Nonqualified Stock Options) Pursuant to The Home Depot, Inc. Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022##Form 8-K filed May 24, 2022, Exhibit 10.2 10.25##†##Form of Executive Officer Equity Award Agreement (Restricted Stock and Nonqualified Stock Options) Pursuant to The Home Depot, Inc. Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022##Form 8-K filed May 24, 2022, Exhibit 10.3 10.26##†##Form of Executive Officer Equity Award Agreement (Performance Shares, Performance-Based Restricted Stock and Nonqualified Stock Options) Pursuant to The Home Depot, Inc. Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022##Form 8-K filed February 28, 2023, Exhibit 10.1 10.27##†##Form of Executive Officer Equity Award Agreement (Restricted Stock and Nonqualified Stock Options) Pursuant to The Home Depot, Inc. Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022##Form 8-K filed February 28, 2023, Exhibit 10.2 10.29##†##Form of Nonemployee Director Deferred Share Award Agreement Pursuant to The Home Depot, Inc. Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022##Form 8-K filed May 24, 2022, Exhibit 10.4 10.30##†##Employment Arrangement between Edward P. Decker and The Home Depot, Inc., dated February 24, 2022##Form 10-Q for the fiscal quarter ended May 1, 2022, Exhibit 10.1 10.31##†##Employment Arrangement between Richard V. McPhail and The Home Depot, Inc., dated October 1, 2020##Form 10-Q for the fiscal quarter ended November 1, 2020, Exhibit 10.1 10.34##†##Employment Arrangement between Ann-Marie Campbell and The Home Depot, Inc., dated October 25, 2023##Form 10-Q for the fiscal quarter ended October 29, 2023, Exhibit 10.1 10.35##†##Separation Agreement between Jeffrey G. Kinnaird and The Home Depot, Inc., dated April 17, 2023##Form 10-Q for the fiscal quarter ended April 30, 2023, Exhibit 10.3 10.36##†##Employment Arrangement between Matthew A. Carey and The Home Depot, Inc., dated April 19, 2022##Form 10-Q for the fiscal quarter ended May 1, 2022, Exhibit 10.3 10.37##†*##Employment Arrangement between Teresa Wynn Roseborough and The Home Depot, Inc., dated September 28, 2011## 21##*##List of Subsidiaries of the Company## 23##*##Consent of Independent Registered Public Accounting Firm## 31.1##*##Certification of the Chair, President and Chief Executive Officer pursuant to Rule 13a-14(a)## 31.2##*##Certification of Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a)## 32.1##‡##Certification of the Chair, President and Chief Executive Officer furnished pursuant Section 906 of the Sarbanes-Oxley Act of 2002## 32.2##‡##Certification of Executive Vice President and Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002## 97##*##The Home Depot, Inc. Executive Compensation Clawback Policy##


HD Table of Contents

Exhibit####Description##Reference 101.INS##*##XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document## 101.SCH##*##XBRL Taxonomy Extension Schema Document## 101.CAL##*##XBRL Taxonomy Extension Calculation Linkbase Document## 101.DEF##*##XBRL Taxonomy Extension Definition Linkbase Document## 101.LAB##*##XBRL Taxonomy Extension Label Linkbase Document## 101.PRE##*##XBRL Taxonomy Extension Presentation Linkbase Document## 104####Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)##


HD * Filed herewith

‡ Furnished (and not filed) herewith pursuant to Item 601(b)(32)(ii) of the SEC’s Regulation S-K


HD Form 10-K Summary

None.


HD SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ##THE HOME DEPOT, INC. (Registrant)#### By:######/s/ EDWARD P. DECKER ######Edward P. Decker, Chair, President and Chief Executive Officer Date:####March 13, 2024##


HD SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of March 13, 2024. Signature##Title /s/ EDWARD P. DECKER##Chair, President and Chief Executive Officer (Principal Executive Officer) Edward P. Decker## /s/ RICHARD V. MCPHAIL##Executive Vice President and Chief Financial Officer (Principal Financial Officer) Richard V. McPhail## /s/ KIMBERLY R. SCARDINO##Senior Vice President — Finance, Chief Accounting Officer and Controller (Principal Accounting Officer) Kimberly R. Scardino## /s/ GERARD J. ARPEY##Director Gerard J. Arpey## /s/ ARI BOUSBIB##Director Ari Bousbib## /s/ JEFFERY H. BOYD##Director Jeffery H. Boyd## /s/ GREGORY D. BRENNEMAN##Director Gregory D. Brenneman## /s/ J. FRANK BROWN##Director J. Frank Brown## /s/ ALBERT P. CAREY##Director Albert P. Carey## /s/ LINDA R. GOODEN##Director Linda R. Gooden## /s/ WAYNE M. HEWETT##Director Wayne M. Hewett## /s/ MANUEL KADRE##Director Manuel Kadre## /s/ STEPHANIE C. LINNARTZ##Director Stephanie C. Linnartz## /s/ PAULA A. SANTILLI##Director Paula A. Santilli## /s/ CARYN SEIDMAN-BECKER##Director Caryn Seidman-Becker##


HD Fiscal 2023 Form 10-K 75


JNJ General

Johnson & Johnson and its subsidiaries (the Company) have approximately 131,900 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. Johnson & Johnson is a holding company, with operating companies conducting business in virtually all countries of the world. The Company’s primary focus is products related to human health and well-being. Johnson & Johnson was incorporated in the State of New Jersey in 1887.


JNJ General

The Executive Committee of Johnson & Johnson is the principal management group responsible for the strategic operations and allocation of the resources of the Company. This Committee oversees and coordinates the activities of the Company's two business segments: Innovative Medicine (previously referred to as Pharmaceutical) and MedTech. Within the strategic parameters provided by the Committee, senior management groups at U.S. and international operating companies are each responsible for their own strategic plans and the day-to-day operations of those companies. Each subsidiary within the business segments is, with limited exceptions, managed by residents of the country where located.


JNJ Segments of business

Following the completion of the separation of the Consumer Health business (Kenvue) in August 2023, the Company is now organized into two business segments: Innovative Medicine and MedTech. Additional information required by this item is incorporated herein by reference to the narrative and tabular descriptions of segments and operating results under: Item 7. Management’s discussion and analysis of results of operations and financial condition of this Report; and Note 17 Segments of business and geographic areas of the notes to consolidated financial statements included in Item 8 of this Report.


JNJ Innovative Medicine

The Innovative Medicine segment is focused on the following therapeutic areas: Immunology (e.g., rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease and psoriasis), Infectious Diseases (e.g., HIV/AIDS), Neuroscience (e.g., mood disorders, neurodegenerative disorders and schizophrenia), Oncology (e.g., prostate cancer, hematologic malignancies, lung cancer and bladder cancer), Cardiovascular and Metabolism (e.g., thrombosis, diabetes and macular degeneration) and Pulmonary Hypertension (e.g., Pulmonary Arterial Hypertension). Medicines in this segment are distributed directly to retailers, wholesalers, distributors, hospitals and healthcare professionals for prescription use. Key products in the Innovative Medicine segment include: REMICADE (infliximab), a treatment for a number of immune-mediated inflammatory diseases; SIMPONI (golimumab), a subcutaneous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis, active ankylosing spondylitis and moderately active to severely active ulcerative colitis; SIMPONI ARIA (golimumab), an intravenous treatment for adults with moderate to severe rheumatoid arthritis, active psoriatic arthritis and active ankylosing spondylitis and active polyarticular juvenile idiopathic arthritis (pJIA) in people 2 years of age and older; STELARA (ustekinumab), a treatment for adults and children with moderate to severe plaque psoriasis, for adults with active psoriatic arthritis, for adults with moderately to severely active Crohn's disease and treatment of moderately to severely active ulcerative colitis; TREMFYA (guselkumab), a treatment for adults with moderate to severe plaque psoriasis and active psoriatic arthritis; EDURANT (rilpivirine), PREZISTA (darunavir) and PREZCOBIX/REZOLSTA (darunavir/cobicistat), antiretroviral medicines for the treatment of human immunodeficiency virus (HIV) in combination with other antiretroviral products and SYMTUZA (darunavir/cobicistat/emtricitabine/tenofovir alafenamide), a once-daily single tablet regimen for the treatment of HIV; CONCERTA (methylphenidate HCl) extended-release tablets CII, a treatment for attention deficit hyperactivity disorder; INVEGA SUSTENNA/XEPLION (paliperidone palmitate), for the treatment of schizophrenia and schizoaffective disorder in adults; INVEGA TRINZA/TREVICTA (paliperidone palmitate), for the treatment of schizophrenia in patients after they have been adequately treated with INVEGA SUSTENNA for at least four months; SPRAVATO (Esketamine), a nasal spray, used along with an oral antidepressant, to treat adults with treatment-resistant depression (TRD) and depressive symptoms in adults with major depressive disorder (MDD) with suicidal thoughts or actions; CARVYKTI (ciltacabtagene autoleucel), a chimeric antigen receptor (CAR)-T-cell therapy for the treatment of patients with relapsed/refractory multiple myeloma; ZYTIGA (abiraterone


JNJ 2023 Annual Report 1

acetate), a treatment for patients with prostate cancer; ERLEADA (apalutamide), a next-generation androgen receptor inhibitor for the treatment of patients with prostate cancer; IMBRUVICA (ibrutinib), a treatment for certain B-cell malignancies, or blood cancers and chronic graft versus host disease; DARZALEX (daratumumab), a treatment for multiple myeloma; DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), a treatment for multiple myeloma and light chain (AL) Amyloidosis; XARELTO (rivaroxaban), an oral anticoagulant for the prevention of deep vein thrombosis (DVT), which may lead to pulmonary embolism (PE) in patients undergoing hip or knee replacement surgery, to reduce the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation, and for the treatment and reduction of risk of recurrence of DVT and PE to reduce the risk of major cardiovascular events in patients with coronary artery disease (CAD) and peripheral artery disease (PAD), for the treatment and secondary prevention of thromboembolism in pediatric patients, and for thromboprophylaxis in pediatric patients following the Fontan procedure; OPSUMIT (macitentan) as monotherapy or in combination, indicated for the long-term treatment of pulmonary arterial hypertension (PAH); UPTRAVI (selexipag), the only approved oral and intravenous, selective IP receptor agonist targeting a prostacyclin pathway in PAH. Many of these medicines were developed in collaboration with strategic partners or are licensed from other companies and maintain active lifecycle development programs.


JNJ MedTech

The MedTech segment includes a broad portfolio of products used in the Interventional Solutions, Orthopaedics, Surgery and Vision categories. Interventional Solutions include electrophysiology products (Biosense Webster) to treat heart rhythm disorders, the heart recovery portfolio (Abiomed) which includes technologies to treat severe coronary artery disease requiring high-risk PCI or AMI cardiogenic shock, and Neurovascular care (Cerenovus) that treats hemorrhagic and ischemic stroke. The Orthopaedics portfolio (DePuy Synthes) includes products and enabling technologies that support Hips, Knees, Trauma, and Spine, Sports & Other. The Surgery portfolios include advanced and general surgery technologies (Ethicon), as well as solutions that focus on breast aesthetics (Mentor), and Ear, Nose and Throat (Acclarent) procedures. Johnson & Johnson Vision products include ACUVUE Brand contact lenses and TECNIS intraocular lenses for cataract surgery. These products are distributed to wholesalers, hospitals and retailers, and used predominantly in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics.


JNJ Geographic areas

Johnson & Johnson and its subsidiaries (the Company) have approximately 131,900 employees worldwide engaged in the research and development, manufacture and sale of a broad range of products in the healthcare field. The Company conducts business in virtually all countries of the world with the primary focus on products related to human health and well-being.


JNJ Geographic areas

The products made and sold in the international business include many of those described above under Segments of Business – Innovative Medicine and MedTech. However, the principal markets, products and methods of distribution in the international business vary with the country and the culture. The products sold in international business include those developed in the U.S. and by subsidiaries abroad.


JNJ Geographic areas

Investments and activities in some countries outside the U.S. are subject to higher risks than comparable U.S. activities because the investment and commercial climate may be influenced by financial instability in international economies, restrictive economic policies and political and legal system uncertainties.


JNJ Raw materials

Raw materials essential to the Company's business are generally readily available from multiple sources. Where there are exceptions, the temporary unavailability of those raw materials would not likely have a material adverse effect on the financial results of the Company.


JNJ Patents

The Company's subsidiaries have made a practice of obtaining patent protection on their products and processes where possible. They own, or are licensed under, a significant number of patents in the U.S. and other countries relating to their products, product uses, formulations and manufacturing processes, which in the aggregate are believed to be of material importance to the Company in the operation of its businesses. The Company’s subsidiaries face patent challenges from third parties, including challenges seeking to manufacture and market generic and biosimilar versions of the Company's key


JNJ Patents

pharmaceutical products prior to expiration of the applicable patents covering those products. Significant legal proceedings and claims involving the Company's patent and other intellectual property are described in Note 19 Legal proceedings—Intellectual property of the Notes to Consolidated Financial Statements included in Item 8 of this Report.


JNJ Patents

Sales of the Company’s largest product, STELARA (ustekinumab) accounted for approximately 12.8% of the Company's total revenues for fiscal 2023. Accordingly, the patents related to this product are believed to be material to the Company. Janssen Biotech, Inc., a wholly-owned subsidiary of Johnson & Johnson, owns patents specifically related to STELARA. The latest expiring United States composition of matter patent expired in 2023. As a result of settlements and other agreements with third parties, the Company does not anticipate the launch of a biosimilar version of STELARA before January 1, 2025 in the United States. The latest expiring European composition of matter patent (Supplementary Protection Certificate) expires in 2024.


JNJ Patents

Sales of the Company’s second largest product, collectively DARZALEX (daratumumab) and DARZALEX FASPRO (daratumumab and hyaluronidase-fihj), accounted for approximately 11.4% of the Company's total revenues for fiscal 2023. Accordingly, the patents related to this product are believed to be material to the Company. Genmab A/S owns two patent families related to DARZALEX, and Janssen Biotech, Inc. has an exclusive license to those patent families. The two patent families both expire in the United States in 2029, and in Europe, compound patent protection in select countries extends to 2031/2032. Janssen Biotech, Inc. owns a separate patent portfolio related to DARZALEX FASPRO.


JNJ Trademarks

The Company’s subsidiaries have made a practice of selling their products under trademarks and of obtaining protection for these trademarks by all available means. These trademarks are protected by registration in the U.S. and other countries where such products are marketed. The Company considers these trademarks in the aggregate to be of material importance in the operation of its businesses.


JNJ Seasonality

Worldwide sales do not reflect any significant degree of seasonality; however, spending has typically been heavier in the fourth quarter of each year than in other quarters. This reflects increased spending decisions, principally for research and development activity.


JNJ Competition

In all of their product lines, the Company's subsidiaries compete with companies both locally and globally. Competition exists in all product lines without regard to the number and size of the competing companies involved. Competition in research, both internally and externally sourced, involving the development and the improvement of new and existing products and processes, is particularly significant. The development of new and innovative products, as well as protecting the underlying intellectual property of the Company’s product portfolio, is important to the Company's success in all areas of its business. The competitive environment requires substantial investments in continuing research.


JNJ Environment

The Company is subject to a variety of environmental laws and regulations in the United States and other jurisdictions. The Company believes that its operations comply in all material respects with applicable environmental laws and regulations. The Company’s compliance with these requirements is not expected to have a material effect upon its capital expenditures, cash flows, earnings or competitive position.


JNJ Regulation

The Company’s businesses are subject to varying degrees of governmental regulation in the countries in which operations are conducted, and the general trend is toward increasingly stringent regulation and enforcement. The Company is subject to costly and complex U.S. and foreign laws and governmental regulations and any adverse regulatory action may materially adversely affect the Company's financial condition and business operations. In the U.S., the pharmaceutical product and medical technology industries have long been subject to regulation by various federal and state agencies, primarily as to product safety, efficacy, manufacturing, advertising, labeling and safety reporting. The exercise of broad regulatory powers by the U.S. Food and Drug Administration (the U.S. FDA) continues to result in increases in the amounts of testing and documentation required for U.S. FDA approval of new drugs and devices and a corresponding increase in the expense of product introduction. Similar trends are also evident in major markets outside of the U.S.


JNJ Regulation

The new medical device regulatory framework and the evolving privacy, data localization, and emerging cyber security laws and regulations around the world are examples of such increased regulation. Within the U.S., an increasing number of U.S. States have enacted comprehensive privacy laws and federal regulators (e.g., the U.S. FDA, FTC and HHS) continue to stress the intersection of health and privacy as a compliance and enforcement priority. In the EU, multiple directives and laws (including NIS2, EHDS, the Data Act, the Cyber Resilience Act, and the AI Act) are rapidly changing privacy and cybersecurity compliance requirements while introducing new enforcement risks. In addition, China has introduced broad personal information protection and data security regulations, with more anticipated, thereby increasing China’s scrutiny of company compliance and data transfer practices. With other jurisdictions enacting similar privacy laws, local data protection authorities will force greater accountability on the collection, access and use of personal data in the healthcare industry. These laws can also restrict transfers of data across borders, potentially impacting how data-driven health care solutions are developed and deployed globally in a compliant manner. Moreover, as a result of the broad scale release and availability of Artificial Intelligence (AI) technologies such as generative AI, a global trend towards more comprehensive and nuanced regulation (e.g., White House’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence; the EU AI Act) to ensure the ethical use, privacy, and security of AI is underway that includes standards for transparency, accountability, and fairness, which will require compliance developments or enhancements.


JNJ Regulation

The regulatory agencies under whose purview the Company operates have administrative powers that may subject it to actions such as product withdrawals, recalls, seizure of products and other civil and criminal sanctions. In some cases, the Company’s subsidiaries may deem it advisable to initiate product recalls regardless of whether it has been required or directed to.