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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 2, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 1-8207
hd-20200802_g1.jpg
THE HOME DEPOT, INC.
(Exact name of registrant as specified in its charter)
Delaware
95-3261426
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2455 Paces Ferry Road
Atlanta,Georgia30339
(Address of principal executive offices)(Zip Code)
(770) 433-8211
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.05 Par Value Per ShareHDNew York Stock Exchange LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer    Non-accelerated filer  Smaller reporting company   Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
1,076,455,514 shares of common stock, $0.05 par value, as of August 18, 2020



TABLE OF CONTENTS
Item 1.
Item 2.
Item 3.
Item 4.
Item 1A.
Item 2.
Item 6.
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COMMONLY USED OR DEFINED TERMS
TermDefinition
ASUAccounting Standards Update
Comparable sales
Exchange ActSecurities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
fiscal 2019Fiscal year ended February 2, 2020
fiscal 2020Fiscal year ending January 31, 2021
fiscal 2021Fiscal year ending January 30, 2022
GAAPU.S. generally accepted accounting principles
MD&AManagement's Discussion and Analysis of Financial Condition and Results of Operations
NOPATNet operating profit after tax
Restoration PlanHome Depot FutureBuilder Restoration Plan
ROICReturn on invested capital
SECSecurities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
SG&ASelling, general and administrative
2019 Form 10-KAnnual Report on Form 10-K for fiscal 2019 as filed with the SEC on March 25, 2020
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FORWARD-LOOKING STATEMENTS
Certain statements contained herein, as well as in other filings we make with the SEC and other written and oral information we release, regarding our future performance constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the impact of the COVID-19 pandemic on our business, results of operations, cash flows and financial condition (which, among other things, may affect many of the items listed below); the demand for our products and services; net sales growth; comparable sales; effects of competition; implementation of store, interconnected retail, supply chain and technology initiatives; inventory and in-stock positions; state of the economy; state of the housing and home improvement markets; state of the credit markets, including mortgages, home equity loans, and consumer credit; impact of tariffs; issues related to the payment methods we accept; demand for credit offerings; management of relationships with our associates, suppliers and vendors; international trade disputes, natural disasters, public health issues (including pandemics and related quarantines, shelter-in-place and other governmental orders, and similar restrictions), and other business interruptions that could disrupt supply or delivery of, or demand for, the Company’s products or services; continuation of share repurchases; net earnings performance; earnings per share; dividend targets; capital allocation and expenditures; liquidity; return on invested capital; expense leverage; stock-based compensation expense; commodity price inflation and deflation; the ability to issue debt on terms and at rates acceptable to us; the impact and expected outcome of investigations, inquiries, claims, and litigation; the effect of accounting charges; the effect of adopting certain accounting standards; the impact of regulatory changes; store openings and closures; financial outlook; and the integration of acquired companies into our organization and the ability to recognize the anticipated synergies and benefits of those acquisitions.
Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You should not rely on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control, dependent on the actions of third parties, or currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Part II, Item 1A, "Risk Factors" and elsewhere in this report and as also may be described from time to time in future reports we file with the SEC. You should read such information in conjunction with our consolidated financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report. There also may be other factors that we cannot anticipate or that are not described in this report, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations.
Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the SEC and in our other public statements.

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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
THE HOME DEPOT, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
in millions, except per share dataAugust 2,
2020
February 2,
2020
Assets
Current assets:
Cash and cash equivalents$14,139 $2,133 
Receivables, net2,562 2,106 
Merchandise inventories13,498 14,531 
Other current assets1,162 1,040 
Total current assets31,361 19,810 
Net property and equipment
23,387 22,770 
Operating lease right-of-use assets5,436 5,595 
Goodwill2,233 2,254 
Other assets932 807 
Total assets$63,349 $51,236 
Liabilities and Stockholders' Equity
Current liabilities:
Short-term debt$ $974 
Accounts payable11,691 7,787 
Accrued salaries and related expenses2,402 1,494 
Sales taxes payable907 605 
Deferred revenue2,511 2,116 
Current installments of long-term debt2,476 1,839 
Current operating lease liabilities831 828 
Other accrued expenses3,381 2,732 
Total current liabilities24,199 18,375 
Long-term debt, excluding current installments32,370 28,670 
Long-term operating lease liabilities4,895 5,066 
Other long-term liabilities2,299 2,241 
Total liabilities63,763 54,352 
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,788 shares at August 2, 2020 and 1,786 shares at February 2, 2020; outstanding: 1,076 shares at August 2, 2020 and 1,077 shares at February 2, 2020
89 89 
Paid-in capital11,228 11,001 
Retained earnings55,074 51,729 
Accumulated other comprehensive loss(1,012)(739)
Treasury stock, at cost, 712 shares at August 2, 2020 and 709 shares at February 2, 2020
(65,793)(65,196)
Total stockholders’ (deficit) equity(414)(3,116)
Total liabilities and stockholders’ equity
$63,349 $51,236 
See accompanying notes to consolidated financial statements.
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THE HOME DEPOT, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
 Three Months EndedSix Months Ended
in millions, except per share dataAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Net sales$38,053 $30,839 $66,313 $57,220 
Cost of sales25,112 20,407 43,747 37,771 
Gross profit12,941 10,432 22,566 19,449 
Operating expenses:
Selling, general and administrative 6,355 5,044 12,184 9,984 
Depreciation and amortization519 492 1,039 972 
Total operating expenses6,874 5,536 13,223 10,956 
Operating income6,067 4,896 9,343 8,493 
Interest and other (income) expense:
Interest and investment income(9)(19)(26)(34)
Interest expense346 302 670 590 
Interest and other, net337 283 644 556 
Earnings before provision for income taxes5,730 4,613 8,699 7,937 
Provision for income taxes1,398 1,134 2,122 1,945 
Net earnings$4,332 $3,479 $6,577 $5,992 
Basic weighted average common shares1,073 1,095 1,073 1,098 
Basic earnings per share$4.04 $3.18 $6.13 $5.46 
Diluted weighted average common shares1,077 1,099 1,077 1,103 
Diluted earnings per share$4.02 $3.17 $6.11 $5.43 
See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited) 
 Three Months EndedSix Months Ended
in millionsAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Net earnings$4,332 $3,479 $6,577 $5,992 
Other comprehensive income (loss):
Foreign currency translation adjustments141 59 (278)16 
Cash flow hedges, net of tax5 4 5 6 
Other(10)(4) 5 
Total other comprehensive income (loss)136 59 (273)27 
Comprehensive income$4,468 $3,538 $6,304 $6,019 
See accompanying notes to consolidated financial statements.

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THE HOME DEPOT, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited) 
Three Months EndedSix Months Ended
in millionsAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Common Stock:
Balance at beginning of period$89 $89 $89 $89 
Shares issued under employee stock plans    
Balance at end of period89 89 89 89 
Paid-in Capital:
Balance at beginning of period11,008 10,590 11,001 10,578 
Shares issued under employee stock plans144 123 73 59 
Stock-based compensation expense76 64 154 140 
Balance at end of period11,228 10,777 11,228 10,777 
Retained Earnings:
Balance at beginning of period52,354 47,459 51,729 46,423 
Cumulative effect of accounting changes   26 
Net earnings4,332 3,479 6,577 5,992 
Cash dividends
(1,612)(1,492)(3,223)(2,991)
Other  (9)(4)
Balance at end of period55,074 49,446 55,074 49,446 
Accumulated Other Comprehensive Income (Loss):
Balance at beginning of period(1,148)(835)(739)(772)
Cumulative effect of accounting change   (31)
Foreign currency translation adjustments141 59 (278)16 
Cash flow hedges, net of tax5 4 5 6 
Other(10)(4) 5 
Balance at end of period(1,012)(776)(1,012)(776)
Treasury Stock:
Balance at beginning of period(65,793)(59,446)(65,196)(58,196)
Repurchases of common stock (1,250)(597)(2,500)
Balance at end of period(65,793)(60,696)(65,793)(60,696)
Total stockholders' (deficit) equity$(414)$(1,160)$(414)$(1,160)
See accompanying notes to consolidated financial statements.



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THE HOME DEPOT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months Ended
in millionsAugust 2,
2020
August 4,
2019
Cash Flows from Operating Activities:
Net earnings$6,577 $5,992 
Reconciliation of net earnings to net cash provided by operating activities:
Depreciation and amortization1,222 1,107 
Stock-based compensation expense155 139 
Changes in receivables, net(477)(338)
Changes in merchandise inventories920 (810)
Changes in other current assets(126)(244)
Changes in accounts payable and accrued expenses5,673 2,097 
Changes in deferred revenue397 452 
Changes in income taxes payable447 11 
Changes in deferred income taxes13 58 
Other operating activities28 79 
Net cash provided by operating activities14,829 8,543 
Cash Flows from Investing Activities:
Capital expenditures
(1,032)(1,246)
Proceeds from sales of property and equipment12 11 
Other investing activities (14)
Net cash used in investing activities(1,020)(1,249)
Cash Flows from Financing Activities:
Repayments of short-term debt, net(974)(1,339)
Proceeds from long-term debt, net of discounts and premiums4,960 1,404 
Repayments of long-term debt(1,806)(1,030)
Repurchases of common stock(791)(2,619)
Proceeds from sales of common stock164 157 
Cash dividends
(3,223)(2,991)
Other financing activities(127)(116)
Net cash used in financing activities(1,797)(6,534)
Change in cash and cash equivalents12,012 760 
Effect of exchange rate changes on cash and cash equivalents(6)9 
Cash and cash equivalents at beginning of period2,133 1,778 
Cash and cash equivalents at end of period$14,139 $2,547 
Supplemental Disclosures:
Cash paid for interest, net of interest capitalized$587 $558 
Cash paid for income taxes1,611 1,912 
See accompanying notes to consolidated financial statements.
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THE HOME DEPOT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements of The Home Depot, Inc. and its subsidiaries (the "Company," "Home Depot," "we," "our" or "us") have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2019 Form 10-K.
Impact of COVID-19
The outbreak of the novel coronavirus COVID-19, which was declared a global pandemic by the World Health Organization on March 11, 2020, has led to adverse impacts on the U.S. and global economies and has impacted our supply chain, operations, and customer demand. Even though the Company has taken measures to adapt to operating in this challenging environment, the pandemic could further affect our operations and the operations of our suppliers and vendors as a result of additional shelter-in-place and other governmental orders, facility closures, travel and logistics restrictions, and other factors as circumstances continue to evolve.
In response to COVID-19, we expanded our associate pay and benefits to provide additional paid time off, weekly bonuses, double overtime pay and other benefits. These expanded pay and benefits were included in SG&A in the Consolidated Statements of Earnings and resulted in $479 million of additional expense for the second quarter of fiscal 2020 and $1.3 billion of additional expense for the first six months of fiscal 2020. As of August 2, 2020, there were $393 million included in accrued salaries and related expenses in the Consolidated Balance Sheets related to these expanded pay and benefits.
We assess the recoverability of goodwill and other indefinite-lived intangibles in the third quarter of each year, or more often if indicators warrant. We assessed the current environment to determine if there were any indicators of impairment as a result of the operating conditions resulting from COVID-19 or otherwise and concluded that while there have been events and circumstances in the macro-environment that have impacted us, we have not experienced any entity-specific indicators of impairment for goodwill or other indefinite-lived intangibles that would require an impairment test as of August 2, 2020.
We evaluate our long-lived assets each quarter for indicators of potential impairment. Indicators of impairment include current period losses combined with a history of losses, our decision to relocate or close a store or other location before the end of its previously estimated useful life, or when changes in other circumstances indicate the carrying amount of an asset may not be recoverable. We performed our quarterly assessment of long-lived assets during the first and second quarters of 2020 and did not record any material long-lived asset impairments.
Also in response to COVID-19, we took steps to further solidify our liquidity position in March 2020 by expanding our commercial paper program and corresponding revolving credit facility capacity, as well as issuing senior notes. See Note 4 for further discussion.
Reclassifications
Effective February 3, 2020, we reclassified cash flows relating to book overdrafts from financing to operating activities for all periods presented in the Consolidated Statements of Cash Flows. The amounts of these reclassifications were not material.
There were no significant changes to our significant accounting policies as disclosed in the 2019 Form 10-K.
Recently Adopted Accounting Pronouncements
ASU No. 2018-15. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to
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develop or obtain internal-use software. On February 3, 2020, we adopted ASU No. 2018-15 with no material impact to our consolidated financial position, results of operations or cash flows.
ASU No. 2017-04. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which simplifies how an entity is required to test goodwill for impairment. The amendments in ASU No. 2017-04 require goodwill impairment to be measured using the difference between the carrying amount and the fair value of the reporting unit and require the loss recognized to not exceed the total amount of goodwill allocated to that reporting unit. On February 3, 2020, we adopted ASU No. 2017-04 with no material impact to our consolidated financial position, results of operations or cash flows.
ASU No. 2016-13. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which introduced an expected credit loss model for the impairment of financial assets measured at amortized cost. The model replaces the probable, incurred loss model for those assets and broadens the information an entity must consider in developing its expected credit loss estimate for assets measured at amortized cost. On February 3, 2020, we adopted ASU No. 2016-13 with no material impact to our consolidated financial position, results of operations or cash flows.
Recently Issued Accounting Pronouncements
ASU 2020-04. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides practical expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. These amendments are not applicable to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. ASU No. 2020-04 is effective as of March 12, 2020 through December 31, 2022 and may be applied to contract modifications and hedging relationships from the beginning of an interim period that includes or is subsequent to March 12, 2020. We will adopt this standard when LIBOR is discontinued. We are evaluating the impact the new standard will have on our consolidated financial statements and related disclosures but do not anticipate a material impact.
Recent accounting pronouncements pending adoption not discussed above or in the 2019 Form 10-K are either not applicable or will not have or are not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

2.NET SALES
No sales to an individual customer accounted for more than 10% of our net sales during the three and six months ended August 2, 2020 and August 4, 2019. Net sales, classified by geography, follow:
Three Months EndedSix Months Ended
in millionsAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Net sales – in the U.S.
$35,205 $28,186 $61,623 $52,639 
Net sales – outside the U.S.
2,848 2,653 4,690 4,581 
Net sales
$38,053 $30,839 $66,313 $57,220 
Net sales by products and services follow:
Three Months EndedSix Months Ended
in millionsAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Net sales – products$36,990 $29,480 $64,295 $54,712 
Net sales – services1,063 1,359 2,018 2,508 
Net sales
$38,053 $30,839 $66,313 $57,220 
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Major product lines and the related merchandising departments (and related services) follow:
Major Product LineMerchandising Departments
Building MaterialsBuilding Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing
DécorAppliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint
HardlinesHardware, Indoor Garden, Outdoor Garden, and Tools
Net sales by major product lines (and related services) follow:
Three Months EndedSix Months Ended
in millionsAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Building Materials$12,556 $10,495 $22,372 $19,899 
Décor11,790 10,050 21,096 18,795 
Hardlines13,707 10,294 22,845 18,526 
Net sales$38,053 $30,839 $66,313 $57,220 

3.PROPERTY AND LEASES
Net Property and Equipment
Net property and equipment includes accumulated depreciation and amortization of $22.9 billion as of August 2, 2020 and $22.1 billion as of February 2, 2020.
Leases
We lease certain retail locations, office space, warehouse and distribution space, equipment, and vehicles. We consider various factors such as market conditions and the terms of any renewal options that may exist to determine whether we will renew or replace the lease. A substantial majority of our leases have remaining lease terms of one to 20 years, typically with the option to extend the leases for up to five years. Some of our leases may include the option to terminate in less than five years. In the event we are reasonably certain to exercise the option to extend a lease, we will include the extended terms in the related lease assets and liabilities. Real estate taxes, insurance, maintenance, and operating expenses applicable to the leased property are generally our obligations under the lease agreements.
Certain of our property lease agreements contain residual value guarantees, which generally become due at the expiration of the lease term and are estimated as the greater of the fair value of the leased asset or a set minimum value. These residual value guarantees are primarily related to leases of facilities whose construction was funded by industrial revenue bonds.
Our lease agreements do not contain any material restrictive covenants. Further, certain lease agreements include rental payments based on an index or rate and others include rental payments based on a percentage of sales.
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The Consolidated Balance Sheet location of assets and liabilities related to operating and finance leases follow:
in millionsConsolidated Balance Sheet CaptionAugust 2,
2020
February 2,
2020
Assets:
Operating lease assetsOperating lease right-of-use assets$5,436 $5,595 
Finance lease assets (1)
Net property and equipment
1,940 934 
Total lease assets$7,376 $6,529 
Liabilities:
Current:
   Operating lease liabilitiesCurrent operating lease liabilities$831 $828 
   Finance lease liabilitiesCurrent installments of long-term debt128 84 
Long-term:
   Operating lease liabilitiesLong-term operating lease liabilities4,895 5,066 
   Finance lease liabilitiesLong-term debt, excluding current installments2,056 1,081 
Total lease liabilities$7,910 $7,059 
—————
(1) Finance lease assets are recorded net of accumulated amortization of $707 million as of August 2, 2020 and $644 million as of February 2, 2020.
The components of lease cost follow:
Three Months EndedSix Months Ended
in millionsConsolidated Statement of Earnings CaptionAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Operating lease costSelling, general and administrative$193 $205 $388 $415 
Finance lease cost:
Amortization of leased assetsDepreciation and amortization36 22 67 43 
Interest on lease liabilitiesInterest expense26 23 52 46 
Short-term lease costSelling, general and administrative19 18 37 43 
Variable lease costSelling, general and administrative65 64 126 122 
Sublease incomeSelling, general and administrative(4)(4)(7)(7)
Net lease cost$335 $328 $663 $662 
When the rate implicit in the contract is not readily determinable, we use a secured incremental borrowing rate as the discount rate for the present value of lease payments. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Lease terms and discount rates follow:
August 2,
2020
February 2,
2020
Weighted Average Remaining Lease Term (Years):
Operating leases1010
Finance leases1512
Weighted Average Discount Rate:
Operating leases3.0 %3.1 %
Finance leases6.8 %10.4 %
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The approximate future minimum lease payments under operating and finance leases as of August 2, 2020 follow:
in millionsOperating
Leases
Finance
Leases
Fiscal 2020$490 $117 
Fiscal 2021937 239 
Fiscal 2022833 239 
Fiscal 2023733 234 
Fiscal 2024630 217 
Thereafter3,041 1,974 
Total lease payments6,664 3,020 
Less imputed interest938 836 
Present value of lease liabilities$5,726 $2,184 
—————
Note: Amounts presented do not include payments relating to immaterial leases excluded from the Consolidated Balance Sheets as a result of adopting certain practical expedients. Additionally, future minimum lease payments do not include approximately $1.1 billion of leases (undiscounted basis) that have not yet commenced. These leases will commence between fiscal 2020 and fiscal 2021 with lease terms of one to 20 years.
Other lease information follows:
Six Months Ended
in millionsAugust 2,
2020
August 4,
2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows - operating leases$505 $500 
Operating cash flows - finance leases52 46 
Financing cash flows - finance leases56 30 
Lease assets obtained in exchange for new operating lease liabilities296 520 
Lease assets obtained in exchange for new finance lease liabilities1,085 67 

4.DEBT AND DERIVATIVE INSTRUMENTS
Short-Term Debt
In March 2020, we expanded our commercial paper programs from $3.0 billion to $6.0 billion. All of our short-term borrowings in the first six months of fiscal 2020 were under these commercial paper programs, and the maximum amount outstanding at any time was $1.0 billion. In connection with these programs, we have back-up credit facilities with a consortium of banks for borrowings of up to $6.5 billion, which consist of (1) a 364-day $3.5 billion credit facility that was entered into in March 2020 in connection with our expanded commercial paper program and is scheduled to expire in March 2021, (2) a five-year $2.0 billion credit facility scheduled to expire in December 2022, and (3) a 364-day $1.0 billion credit facility scheduled to expire in December 2020.
Long-Term Debt
March 2020 Issuance. In March 2020, we issued four tranches of senior notes.
The first tranche consisted of $750 million of 2.50% senior notes due April 15, 2027 (the “2027 notes”) at a discount of $4 million. Interest on the 2027 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020.
The second tranche consisted of $1.5 billion of 2.70% senior notes due April 15, 2030 (the “2030 notes”) at a discount of $8 million. Interest on the 2030 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020.
The third tranche consisted of $1.25 billion of 3.30% senior notes due April 15, 2040 (the "2040 notes") at a discount of $11 million. Interest on the 2040 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020.
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The fourth tranche consisted of $1.5 billion of 3.35% senior notes due April 15, 2050 (the "2050 notes") at a discount of $17 million (together with the 2027 notes, the 2030 notes and the 2040 notes, the "March 2020 issuance"). Interest on the 2050 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2020.
Issuance costs totaled $36 million. The net proceeds of the March 2020 issuance were used for general corporate purposes, which included the repayment of outstanding senior notes that matured in June 2020 and the repayment of outstanding senior notes that were scheduled to mature in September 2020.
Redemption. The 2027 notes, 2030 notes, 2040 notes and 2050 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. 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, as defined in the respective notes. Additionally, if a Change in Control Triggering Event, as defined in the notes, occurs, holders of all 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. We are generally not limited under the indentures governing the notes in our ability to incur additional indebtedness or required 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.
Derivative Instruments
We use derivative and nonderivative financial instruments in the management of our exposure to fluctuations in foreign currency exchange rates and interest rates on certain long-term debt.
We had outstanding interest rate swap agreements with combined notional amounts of $2.9 billion at August 2, 2020 and $2.1 billion at February 2, 2020. These agreements were accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes. The fair values of these agreements were $261 million at August 2, 2020 and $120 million at February 2, 2020.
At August 2, 2020 and February 2, 2020, 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. The notional amounts and the fair values of these agreements were not material.
We had outstanding foreign currency forward contracts accounted for as net investment hedges, with a combined notional amount of $1.2 billion at February 2, 2020. These agreements hedged against foreign currency exposure on our net investment in certain subsidiaries. At February 2, 2020, the fair values of these agreements were not material. These foreign currency forward contracts settled during the first quarter of fiscal 2020, resulting in an immaterial gain.
In addition to our forward contracts, we also hedge a portion of our foreign currency risk by designating nonderivative foreign-currency-denominated intercompany debt as hedges of our net investment in certain of our foreign operations. We had outstanding intercompany debt with a combined notional value of $1.2 billion as of August 2, 2020 that was designated as hedges of our net investment in our foreign operations. For the three and six months ended August 2, 2020, respectively, $52 million of foreign currency losses and $23 million of foreign currency gains associated with this debt were recorded as foreign currency translation adjustments in accumulated other comprehensive income (loss). As of February 2, 2020, the notional value of our nonderivative hedges and related foreign currency translation adjustments were immaterial.
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. Derivative assets and derivative liabilities are presented at their gross fair values in the Consolidated Balance Sheets. As of August 2, 2020, the cash collateral received by the Company related to derivative instruments under our collateral security arrangements was $158 million, which was recorded in other current liabilities in the Consolidated Balance Sheets. We did not receive any cash collateral as of February 2, 2020 or have any cash collateral posted with counterparties as of August 2, 2020 or February 2, 2020.



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5. STOCKHOLDERS' EQUITY
Stock Rollforward
A reconciliation of the number of shares of our common stock and dividends per share follows:
shares in millionsThree Months EndedSix Months Ended
August 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Common stock:
Balance at beginning of period1,788 1,784 1,786 1,782 
Shares issued under employee stock plans 1 2 3 
Balance at end of period1,788 1,785 1,788 1,785 
Treasury stock:
Balance at beginning of period(712)(683)(709)(677)
Repurchases of common stock (6)(3)(12)
Balance at end of period(712)(689)(712)(689)
Shares outstanding at end of period1,076 1,096 1,076 1,096 
Cash dividends per share$1.50 $1.36 $3.00 $2.72 

6.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.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities that are measured at fair value on a recurring basis follow:
Fair Value at August 2, 2020 UsingFair Value at February 2, 2020 Using
in millions Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant
Observable Inputs
(Level 2)
Significant
Unobservable Inputs
(Level 3)
Derivative agreements – assets$ $262 $ $ $133 $ 
Derivative agreements – liabilities      
Total$ $262 $ $ $133 $ 
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The carrying amounts of cash and cash equivalents, receivables, short-term debt, and accounts payable approximate fair value due to the short-term maturities of these financial instruments.
Long-lived assets and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment or as the result of business acquisitions. We did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis as of August 2, 2020 or February 2, 2020, respectively.
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The aggregate fair values and carrying values of our senior notes follow:
August 2,
2020
February 2,
2020
in millions Fair Value
(Level 1)
Carrying
Value
Fair Value
(Level 1)
Carrying
Value
Senior notes$40,941 $32,662 $34,102 $29,344 

7. WEIGHTED AVERAGE COMMON SHARES
The reconciliation of our basic to diluted weighted average common shares follows:
Three Months EndedSix Months Ended
in millionsAugust 2,
2020
August 4,
2019
August 2,
2020
August 4,
2019
Basic weighted average common shares1,073 1,095 1,073 1,098 
Effect of potentially dilutive securities 4 4 4 5 
Diluted weighted average common shares1,077 1,099 1,077 1,103 
Anti-dilutive securities excluded from diluted weighted average common shares