THE HOME DEPOT, INC.

(HD)
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HOME DEPOT, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

11/23/2021 | 06:03am EDT
Our MD&A includes the following sections:
•  Executive Summary
•  Results of Operations and Non-GAAP Financial Measures
•  Liquidity and Capital Resources
•  Critical Accounting Policies
                               Executive Summary
The following table presents quarter to date and year to date highlights of our
financial performance:
                                                          Three Months Ended                          Nine Months Ended
                                                  October 31,           November 1,           October 31,           November 1,
dollars in millions, except per share data            2021                 2020                  2021                  2020
Net sales                                        $    36,820          $     33,536          $    115,438          $     99,849
Net earnings                                           4,129                 3,432                13,081                10,009

Diluted earnings per share                       $      3.92          $       3.18          $      12.31          $       9.28

Net cash provided by operating activities                                                   $     13,386          $     17,415
Proceeds from long-term debt, net of discounts
and premiums                                                                                       2,979                 4,960
Repayments of long-term debt                                                                       1,480                 1,836
Repurchases of common stock                                                                       10,374                   791


We reported net sales of $36.8 billion in the third quarter of fiscal 2021. Net
earnings were $4.1 billion, or $3.92 per diluted share. For the first nine
months of fiscal 2021, net sales were $115.4 billion and net earnings were $13.1
billion, or $12.31 per diluted share.
We opened four stores in the U.S. and one store in Mexico during the third
quarter of fiscal 2021, resulting in a total store count of 2,317 at the end of
the third quarter of fiscal 2021, which includes 14 stores in the U.S. from a
small acquisition completed during the second quarter of fiscal 2021. As of
October 31, 2021, a total of 311 stores, or 13.4%, were located in Canada and
Mexico. For the third quarter of fiscal 2021, sales per retail square foot were
$587.28. Our inventory turnover ratio was 5.4 times at the end of the third
quarter of fiscal 2021, compared to 5.9 times at the end of the third quarter of
fiscal 2020.
We generated $13.4 billion of cash flow from operations and issued $3 billion of
long-term debt during the first nine months of fiscal 2021. This cash flow,
together with cash on hand, was used to fund cash payments of $10.4 billion for
share repurchases, pay $5.3 billion of dividends, fund $1.7 billion in capital
expenditures, and repay an aggregate of $1.5 billion of long-term debt. In
February 2021, we announced a 10% increase in our quarterly cash dividend to
$1.65 per share.
Our ROIC for the trailing twelve-month period was 43.9% at the end of the third
quarter of fiscal 2021 and 41.6% at the end of the third quarter of fiscal 2020.
See the "  Non-GAAP Financial Measures  " section below for our definition and
calculation of ROIC, as well as a reconciliation of NOPAT, a non-GAAP financial
measure, to net earnings (the most comparable GAAP financial measure).
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             Results of Operations and Non-GAAP Financial Measures
The tables and discussion below should be read in conjunction with our
consolidated financial statements and related notes included in this report and
in the 2020 Form 10-K and with our MD&A included in the 2020 Form 10-K. The
following table presents the percentage relationship between net sales and major
categories in our consolidated statements of earnings.
Fiscal 2021 and Fiscal 2020 Three Month Comparisons
                                                                               Three Months Ended
                                                           October 31,                                    November 1,
                                                               2021                                           2020
                                                                         % of                                           % of
dollars in millions                                $                   Net Sales                  $                   Net Sales
Net sales                                    $    36,820                                    $    33,536
Gross profit                                      12,563                      34.1  %            11,456                      34.2  %
Operating expenses:
Selling, general and administrative                6,168                      16.8                6,076                      18.1
Depreciation and amortization                        600                       1.6                  528                       1.6
Total operating expenses                           6,768                      18.4                6,604                      19.7
Operating income                                   5,795                      15.7                4,852                      14.5
Interest and other (income) expense:
Interest and investment income                       (15)                        -                  (11)                        -
Interest expense                                     341                       0.9                  340                       1.0
Interest and other, net                              326                       0.9                  329                       1.0
Earnings before provision for income taxes         5,469                      14.9                4,523                      13.5
Provision for income taxes                         1,340                       3.6                1,091                       3.3
Net earnings                                 $     4,129                      11.2  %       $     3,432                      10.2  %


-----

Note: Certain percentages may not sum to totals due to rounding.

                                                                      Three 

Months Ended

                                                               October 31,          November 1,
Selected financial and sales data:                                 2021                 2020                 % Change
Comparable sales (% change) (1)                                       6.1  %              24.1  %                      N/A
Comparable customer transactions (%
change) (1) (2)                                                      (5.8) %              13.0  %                      N/A
Comparable average ticket (% change) (1)
(2)                                                                  12.7  %              10.0  %                      N/A
Customer transactions (in millions) (1)
(2)                                                                 428.2                453.2                     (5.5) %
Average ticket (1) (2) (3)                                    $     82.38          $     72.98                     12.9  %
Sales per retail square foot (1) (2) (4)                      $    587.28          $    552.85                      6.2  %
Diluted earnings per share                                    $      3.92          $      3.18                     23.3  %


-----
(1)Does not include results for HD Supply, which was acquired in December 2020.
(2)Does not include results for the legacy Interline Brands business.
(3)Average ticket represents the average price paid per transaction and is used
by management to monitor the performance of the Company, as it represents a
primary driver in measuring sales performance.
(4)Sales per retail square foot represents annualized sales divided by retail
store square footage. Sales per retail square foot is a measure of the
efficiency of sales based on the total square footage of our stores and is used
by management to monitor the performance of the Company's retail operations as
an indicator of the productivity of owned and leased square footage for these
retail operations.
Sales. We assess our sales performance by evaluating both net sales and
comparable sales.
Net Sales. Net sales for the third quarter of fiscal 2021 increased 9.8% to
$36.8 billion from $33.5 billion for the third quarter of fiscal 2020. The
increase in net sales for the third quarter of fiscal 2021 primarily reflected
the impact of positive comparable sales driven by an increase in comparable
average ticket, offset by a decrease in comparable
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customer transactions, as well as sales from HD Supply, which was acquired in
the fourth quarter of fiscal 2020. Online sales, which consist of sales
generated online through our websites for products picked up at our stores or
delivered to customer locations, represented 12.8% of net sales and grew by 8.4%
during the third quarter of fiscal 2021 compared to the third quarter of fiscal
2020. The increase in online sales for the third quarter of fiscal 2021 was
driven by customers continuing to leverage our digital platforms for their
shopping needs. A weaker U.S. dollar positively impacted sales growth by $193
million in the third quarter of fiscal 2021.
Comparable Sales. Comparable sales is a measure that highlights the performance
of our existing locations and websites by measuring the change in net sales for
a period over the comparable prior-period of equivalent length. Comparable sales
includes sales at all locations, physical and online, open greater than 52 weeks
(including remodels and relocations) and excludes permanently closed stores.
Retail stores become comparable on the Monday following their 52nd week of
operation. Acquisitions are typically included in comparable sales after they
have been owned for more than 52 weeks. Comparable sales is intended only as
supplemental information and is not a substitute for net sales presented in
accordance with GAAP.
Total comparable sales increased 6.1% for the third quarter of fiscal 2021,
reflecting a 12.7% increase in comparable average ticket, partially offset by a
5.8% decrease in comparable customer transactions compared to the third quarter
of fiscal 2020. The increase in comparable average ticket was primarily driven
by inflation across several product categories, including core commodity price
inflation largely from copper and building materials, which was partially offset
by deflation in lumber. Comparable average ticket also increased due to an
increase in big-ticket transactions and strong demand for new and innovative
products. The decrease in comparable customer transactions was primarily due to
lapping comparable transactions of 13.0% that we experienced in the third
quarter of fiscal 2020. Total comparable sales for the third quarter of fiscal
2020 included a significant acceleration in sales growth and strong performance
across our departments, driven in part by the increase in demand during the
COVID-19 pandemic, resulting in comparable sales performance of 24.1% for the
third quarter of fiscal 2020.
During the third quarter of fiscal 2021, 12 of our 14 merchandising departments
posted positive comparable sales. Comparable sales for our Appliances, Plumbing,
Electrical/Lighting, Building Materials, Tools, Kitchen and Bath, Décor/Storage,
Millwork, and Flooring merchandising departments were above the company average
in the third quarter of fiscal 2021. Comparable sales for our Indoor Garden
merchandising department were essentially flat, and our Lumber department had
high single-digit negative comparable sales in the third quarter of fiscal 2021,
as a result of lumber price deflation. Comparable sales for our Lumber
department grew by more than 50% in the third quarter of fiscal 2020.
Gross Profit. Gross profit for the third quarter of fiscal 2021 increased 9.7%
to $12.6 billion from $11.5 billion for the third quarter of fiscal 2020. Gross
profit as a percentage of net sales, or gross profit margin, was 34.1% for the
third quarter of fiscal 2021 compared to 34.2% for the third quarter of fiscal
2020. The decrease in gross profit margin during the third quarter of fiscal
2021 was primarily driven by higher transportation costs and pressure from
product mix, partially offset by the benefit from higher retail prices.
Operating Expenses. Our operating expenses are composed of SG&A and depreciation
and amortization.
Selling, General & Administrative. SG&A for the third quarter of fiscal 2021
increased $92 million or 1.5% to $6.2 billion from the third quarter of fiscal
2020. As a percentage of net sales, SG&A was 16.8% for the third quarter of
fiscal 2021 compared to 18.1% for the third quarter of fiscal 2020. The decrease
in SG&A as a percentage of net sales was primarily driven by leverage resulting
from a positive comparable sales environment, including payroll leverage, and
cycling COVID-19-related expenses that we incurred during the third quarter of
fiscal 2020, including $354 million of additional expenses related to expanded
benefits to support our associates and an additional $59 million of operational
expenses. Total COVID-19-related expenses were $35 million for the third quarter
of fiscal 2021. These benefits were partially offset by an increase in hourly
payroll-related costs in the third quarter of fiscal 2021 driven by the wage
investments we made in the latter part of fiscal 2020.
Depreciation and Amortization. Depreciation and amortization increased 13.6% to
$600 million for the third quarter of fiscal 2021 from $528 million for the
third quarter of fiscal 2020. As a percentage of net sales, depreciation and
amortization was 1.6% for the third quarter of both fiscal 2021 and fiscal 2020,
primarily reflecting increased depreciation expense from our strategic
investments in the business as well as higher intangible asset amortization
expense, offset by leverage resulting from a positive comparable sales
environment.
Interest and Other, net. Interest and other, net, was $326 million for the third
quarter of fiscal 2021 compared to $329 million for the third quarter of fiscal
2020. Interest and other, net, as a percentage of net sales was 0.9% for the
third quarter of fiscal 2021 compared to 1.0% for the third quarter of fiscal
2020. The decrease in interest and
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other, net, as a percentage of net sales primarily reflected leverage resulting
from a positive comparable sales environment.
Provision for Income Taxes. Our combined effective income tax rate was 24.5% for
the third quarter of fiscal 2021 compared to 24.1% for the third quarter of
fiscal 2020.
Diluted Earnings per Share. Diluted earnings per share were $3.92 for the third
quarter of fiscal 2021 compared to $3.18 for the third quarter of fiscal 2020.
The increase in diluted earnings per share was primarily driven by the factors
discussed above.
Fiscal 2021 and Fiscal 2020 Nine Month Comparisons
                                                                               Nine Months Ended
                                                           October 31,                                   November 1,
                                                              2021                                           2020
                                                                        % of                                           % of
dollars in millions                                $                  Net Sales                  $                   Net Sales
Net sales                                    $  115,438                                    $    99,849
Gross profit                                     38,970                      33.8  %            34,022                      34.1  %
Operating expenses:
Selling, general and administrative              18,975                      16.4               18,260                      18.3
Depreciation and amortization                     1,780                       1.5                1,567                       1.6
Total operating expenses                         20,755                      18.0               19,827                      19.9
Operating income                                 18,215                      15.8               14,195                      14.2
Interest and other (income) expense:
Interest and investment income                      (26)                        -                  (37)                        -
Interest expense                                  1,006                       0.9                1,010                       1.0
Interest and other, net                             980                       0.8                  973                       1.0
Earnings before provision for income taxes       17,235                      14.9               13,222                      13.2
Provision for income taxes                        4,154                       3.6                3,213                       3.2
Net earnings                                 $   13,081                      11.3  %       $    10,009                      10.0  %


-----

Note: Certain percentages may not sum to totals due to rounding.

                                                                       Nine 

Months Ended

                                                               October 31,          November 1,
Selected financial and sales data:                                 2021                 2020                 % Change
Comparable sales (% change) (1)                                      12.5  %              18.3  %                      N/A
Comparable customer transactions (%
change) (1) (2)                                                       1.1  %               7.4  %                      N/A
Comparable average ticket (% change) (1)
(2)                                                                  11.5  %              10.3  %                      N/A
Customer transactions (in millions) (1)
(2)                                                               1,357.2              1,339.5                      1.3  %
Average ticket (1) (2) (3)                                    $     82.43          $     73.90                     11.5  %
Sales per retail square foot (1) (2) (4)                      $    615.98          $    549.26                     12.1  %
Diluted earnings per share                                    $     12.31          $      9.28                     32.7  %


-----
(1)Does not include results for HD Supply, which was acquired in December 2020.
(2)Does not include results for the legacy Interline Brands business.
(3)Average ticket represents the average price paid per transaction and is used
by management to monitor the performance of the Company, as it represents a
primary driver in measuring sales performance.
(4)Sales per retail square foot represents annualized sales divided by retail
store square footage. Sales per retail square foot is a measure of the
efficiency of sales based on the total square footage of our stores and is used
by management to monitor the performance of the Company's retail operations as
an indicator of the productivity of owned and leased square footage for these
retail operations.
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Sales. We assess our sales performance by evaluating both net sales and
comparable sales.
Net Sales. For the first nine months of fiscal 2021, net sales increased 15.6%
to $115.4 billion from $99.8 billion for the first nine months of fiscal 2020.
The increase in net sales for the first nine months of fiscal 2021 primarily
reflected the impact of positive comparable sales driven by an increase in
comparable average ticket and comparable customer transactions, as well as sales
from HD Supply, which was acquired in the fourth quarter of fiscal 2020. The
impact of the COVID-19 pandemic and the actions we took in response to it had
varying effects on our sales throughout the first nine months of fiscal 2020. At
the beginning of the pandemic, we reduced store hours, limited customer traffic
in stores, and canceled or modified certain annual merchandising events, all of
which negatively impacted our sales during the first quarter of fiscal 2020.
During the last three weeks of the first quarter of fiscal 2020 and continuing
throughout fiscal 2020, we saw elevated home improvement demand with strong
performance across our departments as customers focused on home improvement
projects and repairs.
Online sales, which consist of sales generated online through our websites for
products picked up in our stores or delivered to customer locations, represented
13.4% of net sales and grew by approximately 11% during the first nine months of
fiscal 2021 compared to the first nine months of fiscal 2020. The increase in
online sales for the first nine months of fiscal 2021 was driven by customers
continuing to leverage our digital platforms for their shopping needs. A weaker
U.S. dollar positively impacted sales growth by $735 million for the first nine
months of fiscal 2021.
Comparable Sales. For the first nine months of fiscal 2021, total comparable
sales increased 12.5%, reflecting an 11.5% increase in comparable average ticket
and a 1.1% increase in comparable customer transactions compared to the first
nine months of fiscal 2020. The increase in comparable sales reflected a number
of factors, including increased consumer demand and benefits from our strategic
efforts to drive an enhanced interconnected experience in both the physical and
digital worlds. The increase in comparable average ticket was primarily driven
by inflation, including commodity price inflation largely from lumber, an
increase in big-ticket transactions, elevated project demand and strong demand
for new and innovative products.
During the first nine months of fiscal 2021, all of our merchandising
departments posted positive comparable sales and 10 of our 14 merchandising
departments posted double-digit positive comparable sales, led by Kitchen and
Bath and Lumber, when compared to the first nine months of fiscal 2020. Our
Outdoor Garden, Indoor Garden, Hardware and Paint departments had single-digit
positive comparable sales when compared to the first nine months of fiscal 2020.
Gross Profit. For the first nine months of fiscal 2021, gross profit increased
14.5% to $39.0 billion from $34.0 billion for the first nine months of fiscal
2020. Gross profit as a percentage of net sales, or gross profit margin, was
33.8% for the first nine months of fiscal 2021 compared to 34.1% for the first
nine months of fiscal 2020. The decrease in gross profit margin during the first
nine months of fiscal 2021 reflected pressure from product mix, including rate
and mix pressure from lumber, higher transportation costs, and investments in
our supply chain, partially offset by the benefit from higher retail prices.
Operating Expenses. Our operating expenses are composed of SG&A and depreciation
and amortization.
Selling, General & Administrative. SG&A increased 3.9% to $19.0 billion for the
first nine months of fiscal 2021 from $18.3 billion for the first nine months of
fiscal 2020. As a percentage of net sales, SG&A was 16.4% for the first nine
months of fiscal 2021 compared to 18.3% for the first nine months of fiscal
2020. The decrease in SG&A as a percentage of net sales for the first nine
months of fiscal 2021 was primarily driven by leverage resulting from a positive
comparable sales environment and cycling COVID-19-related expenses that we
incurred during the first nine months of fiscal 2020, including $1.7 billion of
additional expenses related to expanded benefits to support our associates and
an additional $183 million of operational expenses. Total COVID-19-related
expenses incurred in the first nine months of fiscal 2021 were $137 million.
These benefits were partially offset by an increase in hourly payroll-related
costs in the first nine months of fiscal 2021 driven by the wage investments we
made in the latter part of fiscal 2020.
Depreciation and Amortization. Depreciation and amortization increased 13.6% to
$1.8 billion for the first nine months of fiscal 2021 from $1.6 billion for the
first nine months of fiscal 2020. As a percentage of net sales, depreciation and
amortization was 1.5% for the first nine months of fiscal 2021 compared to 1.6%
for the first nine months of fiscal 2020. The decrease in depreciation and
amortization as a percentage of net sales primarily reflected leverage resulting
from a positive comparable sales environment, partially offset by increased
depreciation expense from our strategic investments in the business as well as
higher intangible asset amortization expense.
Interest and Other, net. Interest and other, net was $980 million for the first
nine months of fiscal 2021 compared to $973 million for the first nine months of
fiscal 2020. As a percentage of net sales, interest and other, net was
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0.8% for the first nine months of fiscal 2021 and 1.0% for the first nine months
of fiscal 2020, primarily reflecting leverage resulting from a positive
comparable sales environment.
Provision for Income Taxes. Our combined effective income tax rate was 24.1% for
the first nine months of fiscal 2021 compared to 24.3% for the first nine months
of fiscal 2020.
Diluted Earnings per Share. Diluted earnings per share were $12.31 for the first
nine months of fiscal 2021, compared to $9.28 for the first nine months of
fiscal 2020. The increase in diluted earnings per share was primarily driven by
the factors discussed above.
Non-GAAP Financial Measures
To provide clarity about our operating performance, we supplement our reporting
with certain non-GAAP financial measures. However, this supplemental information
should not be considered in isolation or as a substitute for the related GAAP
measures. Non-GAAP financial measures presented herein may differ from similar
measures used by other companies.
Return on Invested Capital. We believe ROIC is meaningful for investors and
management because it measures how effectively we deploy our capital base. We
define ROIC as NOPAT, a non-GAAP financial measure, for the most recent
twelve-month period, divided by average debt and equity. We define average debt
and equity as the average of beginning and ending long-term debt (including
current installments) and equity for the most recent twelve-month period.
The following table presents the calculation of ROIC, together with a
reconciliation of NOPAT to net earnings (the most comparable GAAP measure):
                                      Twelve Months Ended
                                 October 31,      November 1,
dollars in millions                 2021              2020
Net earnings                    $   15,938       $    12,490
Interest and other, net              1,307             1,265
Provision for income taxes           5,053             3,843
Operating income                    22,298            17,598
Income tax adjustment (1)           (5,378)           (4,252)
NOPAT                           $   16,920       $    13,346

Average debt and equity         $   38,519       $    32,095

ROIC                                  43.9  %           41.6  %


-----
(1)Income tax adjustment is defined as operating income multiplied by our
effective tax rate for the trailing twelve months.
Additional Information
For information on accounting pronouncements that have impacted or are expected
to materially impact our consolidated financial condition, results of operations
or cash flows, see   Note 1   to our consolidated financial statements.
                        Liquidity and Capital Resources
Cash and Cash Equivalents
At October 31, 2021, we had $5.1 billion in cash and cash equivalents, of which
$1.4 billion was held by our foreign subsidiaries. We believe that our current
cash position, cash flow generated from operations, funds available from our
commercial paper programs, and access to the long-term debt capital markets
should be sufficient not only for our operating requirements but also to enable
us to complete our capital expenditure programs, fund dividend payments, fund
any share repurchases, and make any required debt payments through the next
several fiscal years. In addition, we believe that we have the ability to obtain
alternative sources of financing, if necessary.
For fiscal 2021, we will continue to follow our disciplined approach to capital
allocation. We anticipate capital expenditures of approximately two percent of
net sales on an annual basis. However, we may adjust our capital expenditures to
support the operations of the business, to enhance long-term strategic
positioning, or in response to the economic environment, as necessary or
appropriate.
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Debt and Derivative Instruments
We have commercial paper programs that allow for borrowings of up to
$3.0 billion. All of our short-term borrowings in the first nine months of
fiscal 2021 were under these commercial paper programs, and the maximum amount
outstanding at any time was $11 million. In connection with these programs, we
have back-up credit facilities with a consortium of banks for borrowings up to
$3.0 billion, which consist of a five-year $2.0 billion credit facility
scheduled to expire in December 2023 and a 364-day $1.0 billion credit facility
scheduled to expire in December 2021 that we plan to renew. At October 31, 2021,
we were in compliance with all of the covenants contained in the credit
facilities, none of which are expected to impact our liquidity or capital
resources. At October 31, 2021 and January 31, 2021, there were no outstanding
borrowings under our commercial paper programs.
We also issue senior notes from time to time as part of our capital management
strategy. In September 2021, we issued $3.0 billion of senior notes. The net
proceeds from this issuance are being used for general corporate purposes,
including repurchases of shares of our common stock, subject to market
conditions and other business considerations. In March 2021, we also repaid our
$1.35 billion 2.00% senior notes that had a maturity date of April 2021. See
  Note 4   to our consolidated financial statements for further discussion of
our senior notes.
We use derivative and nonderivative 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 long-term debt.
Share Repurchases
In May 2021, our Board of Directors approved a $20.0 billion share repurchase
authorization that replaced the previous authorization. This new authorization
does not have a prescribed expiration date. As of October 31, 2021,
approximately $14.1 billion of the $20.0 billion share repurchase authorization
remained available.
In March 2020, we suspended our share repurchases to enhance our liquidity
position during the COVID-19 pandemic. We resumed share repurchases in the first
quarter of fiscal 2021, the amount and continuation of which will be influenced
by the evolving economic environment as well as business conditions. In the
first nine months of fiscal 2021, we had cash payments of $10.4 billion for
repurchases of our common stock through open market purchases.
Cash Flows Summary
Operating Activities. Cash flow generated from operations provides us with a
significant source of liquidity. Our operating cash flows result primarily from
cash received from our customers, offset by cash payments we make for products
and services, associate compensation, operations, and occupancy costs.
Cash provided by or used in operating activities is also subject to changes in
working capital. Working capital at any point in time is subject to many
variables, including seasonality, inventory management and category expansion,
the timing of cash receipts and payments, vendor payment terms, and fluctuations
in foreign exchange rates.
Net cash provided by operating activities decreased by $4.0 billion in the first
nine months of fiscal 2021 compared to the first nine months of fiscal 2020 and
was primarily driven by changes in working capital, partially offset by an
increase in net earnings. Working capital was impacted by timing of vendor
payments, along with higher merchandise inventories to continue to support
increased demand.
Investing Activities. Cash used in investing activities increased by $681
million in the first nine months of fiscal 2021 compared to the first nine
months of fiscal 2020, primarily as a result of cash paid for an acquired
business during fiscal 2021 and increased capital expenditures.
Financing Activities. Cash used in financing activities in the first nine months
of fiscal 2021 primarily reflected $10.4 billion of share repurchases, $5.3
billion of cash dividends paid, and $1.5 billion of repayments of long-term
debt, partially offset by $3.0 billion of net proceeds from long-term debt.
Cash used in financing activities in the first nine months of fiscal 2020
primarily reflected $4.8 billion of cash dividends paid, $1.8 billion of
repayments of long-term debt, $974 million of net repayments of short-term debt,
and $791 million of share repurchases prior to our suspension of share
repurchases in March 2020, partially offset by $5.0 billion of net proceeds from
long-term debt.
                          Critical Accounting Policies
During the first nine months of fiscal 2021, there were no changes to our
critical accounting policies as disclosed in the 2020 Form 10-K. Our significant
accounting policies are disclosed in   Note 1   to our consolidated financial
statements.
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