Income Tax Accounting Policy
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Analyst Adjustments: Removal of Deferred Taxes
Adjusted Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Income taxes are accounted for under the asset and liability method. Home Depot provides for federal, state, and foreign income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

Home Depot recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Home Depot files a consolidated U.S. federal income tax return which includes certain eligible subsidiaries. Non-U.S. subsidiaries and certain U.S. subsidiaries, which are consolidated for financial reporting purposes, are not eligible to be included in Home Depot’s consolidated U.S. federal income tax return. Separate provisions for income taxes have been determined for these entities. For unremitted earnings of the non-U.S. subsidiaries, Home Depot is required to make an assertion regarding reinvestment or repatriation for tax purposes. For any earnings that Home Depot does not make a permanent reinvestment assertion, Home Depot recognizes a provision for deferred income taxes. For earnings where Home Depot has made a permanent reinvestment assertion, no provision is recognized.

Source: 10-K (filing date: 2018-03-22).

Home Depot Inc., income tax expense (benefit), continuing operations

USD $ in millions

	12 months ended	Jan 28, 2018		Jan 29, 2017		Jan 31, 2016		Feb 1, 2015		Feb 2, 2014		Feb 3, 2013
	Federal
	State
	Foreign
	Current
	Federal
	State
	Foreign
	Deferred
	Provision for income taxes

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Home Depot Inc.’s current increased from 2016 to 2017 and from 2017 to 2018.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Home Depot Inc.’s deferred declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Home Depot Inc.’s provision for income taxes increased from 2016 to 2017 and from 2017 to 2018.

Home Depot Inc., effective income tax rate (EITR) reconciliation

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	Federal statutory income tax rate
	Federal, state and foreign effective tax rate

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

Item	Description	The company
Federal, state and foreign effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Home Depot Inc.’s federal, state and foreign effective tax rate declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

Home Depot Inc., components of deferred tax assets and liabilities

USD $ in millions

		Jan 28, 2018		Jan 29, 2017		Jan 31, 2016		Feb 1, 2015		Feb 2, 2014		Feb 3, 2013
	Deferred compensation
	Accrued self-insurance liabilities
	State income taxes
	Non-deductible reserves
	Capital loss carryover
	Net operating losses
	Impairment of investment
	Other
	Deferred tax assets
	Valuation allowance
	Deferred tax assets after valuation allowance
	Merchandise inventories
	Property and equipment
	Goodwill and other intangibles
	Other
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

Item	Description	The company
Deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Home Depot Inc.’s deferred tax assets increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Deferred tax assets after valuation allowance	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Home Depot Inc.’s deferred tax assets after valuation allowance increased from 2016 to 2017 but then declined significantly from 2017 to 2018.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Home Depot Inc.’s net deferred tax assets (liabilities) increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Home Depot Inc., deferred tax assets and liabilities, classification

USD $ in millions

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	Current deferred tax assets (included in Other current assets)
	Noncurrent deferred tax assets (included in Other assets)
	Current deferred tax liabilities (included in Other accrued expenses)
	Noncurrent deferred tax liabilities

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

Item	Description	The company
Noncurrent deferred tax assets (included in Other assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Home Depot Inc.’s noncurrent deferred tax assets (included in Other assets) increased from 2016 to 2017 and from 2017 to 2018.
Noncurrent deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Home Depot Inc.’s noncurrent deferred tax liabilities declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Home Depot Inc., adjustments to financial data

USD $ in millions

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Less: Noncurrent deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Stockholders’ Equity
	Stockholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Stockholders’ equity (adjusted)
	Adjustment to Net Earnings
	Net earnings (as reported)
	Add: Deferred income tax expense (benefit)
	Net earnings (adjusted)

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

Home Depot Inc., Financial Data: Reported vs. Adjusted

Home Depot Inc., adjusted ratios

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Home Depot Inc.’s adjusted current ratio deteriorated from 2016 to 2017 and from 2017 to 2018.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Home Depot Inc.’s adjusted net profit margin improved from 2016 to 2017 and from 2017 to 2018.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Home Depot Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Home Depot Inc.’s adjusted financial leverage increased from 2016 to 2017 and from 2017 to 2018.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Home Depot Inc.’s adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Home Depot Inc.’s adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

Home Depot Inc., Ratios: Reported vs. Adjusted

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Current assets
	Current liabilities
	Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted current assets
	Adjusted current liabilities
	Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

2018 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Home Depot Inc.’s adjusted current ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Net sales
	Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Net sales
	Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

2018 Calculations

¹ Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net earnings ÷ Net sales
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Home Depot Inc.’s adjusted net profit margin improved from 2016 to 2017 and from 2017 to 2018.

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net sales
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Net sales
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

2018 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= hidden ÷ hidden = hidden

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Home Depot Inc.’s adjusted total asset turnover improved from 2016 to 2017 and from 2017 to 2018.

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Total assets
	Stockholders’ equity
	Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted total assets
	Adjusted stockholders’ equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

2018 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Home Depot Inc.’s adjusted financial leverage increased from 2016 to 2017 and from 2017 to 2018.

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Stockholders’ equity
	Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Adjusted stockholders’ equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

2018 Calculations

¹ ROE = 100 × Net earnings ÷ Stockholders’ equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted stockholders’ equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Home Depot Inc.’s adjusted ROE improved from 2016 to 2017 and from 2017 to 2018.

		Jan 28, 2018	Jan 29, 2017	Jan 31, 2016	Feb 1, 2015	Feb 2, 2014	Feb 3, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Total assets
	Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2018-03-22), 10-K (filing date: 2017-03-23), 10-K (filing date: 2016-03-24), 10-K (filing date: 2015-03-26), 10-K (filing date: 2014-03-27), 10-K (filing date: 2013-03-28).

2018 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Home Depot Inc.’s adjusted ROA improved from 2016 to 2017 and from 2017 to 2018.

	Home Depot Inc.	Other companies (not purchased previously)
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Discounted Cash Flow (DCF) Valuation
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Home Depot Inc. (HD)

Analysis of Income Taxes

Income Tax Accounting Policy

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Analyst Adjustments: Removal of Deferred Taxes

Home Depot Inc., Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Deferred Taxes (Summary)

Home Depot Inc., Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)