THE HOME DEPOT, INC.
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
Quarter to date and year to date highlights of our financial performance follow:
Three Months Ended Six Months Ended
August 2, August 4, August 2, August 4,
dollars in millions, except per share data 2020 2019 2020 2019
Net sales $ 38,053 $ 30,839 $ 66,313 $ 57,220
Net earnings 4,332 3,479 6,577 5,992
Diluted earnings per share $ 4.02 $ 3.17 $ 6.11 $ 5.43
Net cash provided by operating activities $ 14,829 $ 8,543
Proceeds from long-term debt, net of discounts
and premiums 4,960 1,404
Repayments of long-term debt 1,806 1,030
Repurchases of common stock 791 2,619
We reported net sales of $38.1 billion in the second quarter of fiscal 2020. Net
earnings were $4.3 billion , or $4.02 per diluted share. For the first six months
of fiscal 2020, net sales were $66.3 billion and net earnings were $6.6 billion ,
or $6.11 per diluted share.
Our total store count was 2,293 at the end of the second quarter of fiscal 2020.
As of August 2, 2020 , a total of 308 of our stores, or 13.4%, were located in
Canada and Mexico . For the second quarter of fiscal 2020, total sales per retail
square foot were $629.38 . Our inventory turnover ratio was 6.1 times, up from
5.1 times last year, driven by a significant increase in customer demand across
all merchandising departments.
We generated $14.8 billion of cash flow from operations and issued $5.0 billion
of long-term debt, net of discounts, during the first six months of fiscal 2020.
These funds, together with cash on hand, were used to pay $3.2 billion of
dividends, repay $1.8 billion of senior notes that matured in June 2020 and that
were scheduled to mature in September 2020 , fund $1.0 billion in capital
expenditures, repay $974 million of net short-term borrowings, and fund cash
payments of $791 million for share repurchases before we suspended share
repurchases in March 2020 . In February 2020 , we announced a 10% increase in our
quarterly cash dividend to $1.50 per share.
Our ROIC for the trailing twelve-month period was 41.1% at the end of the second
quarter of fiscal 2020 and 43.7% at the end of the second quarter of fiscal
2019. 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).
The decrease in ROIC from the second quarter of fiscal 2019 primarily reflects
our decision to temporarily enhance our liquidity position, including the
suspension of share repurchases.
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 or other governmental orders; restrictions
and limitations on travel, logistics and other business activities; potential
product and labor shortages; limitations on store or facility operations up to
and including closures; and other governmental, business or consumer actions. As
circumstances have evolved, our focus has been and continues to be on two key
priorities: the safety and well-
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being of our associates and customers, and providing our customers and
communities with the products and services that they need.
In the first quarter, we took a number of actions in response to COVID-19 to
promote social and physical distancing. We implemented a change to store
operating hours, and we took measures to limit the number of customers in
stores, which included canceling or modifying certain annual merchandising
events and rolling out curbside pickup at our stores. We also shifted store
support operations to remote or virtual. In the second quarter, we continued to
adapt and adjust our operating approach to promote a safe shopping environment.
To reduce constriction and better manage growing demand in the stores, we
adopted a more localized approach on limits to the number of customers in stores
and expanded store hours while still focusing on promoting a safe shopping
environment. In addition, we announced that masks or facial coverings are
required for all associates and customers in our U.S. stores and other
facilities.
The impact of COVID-19 and actions taken in response to it had varying effects
on our results of operations throughout the first six months of fiscal 2020.
Shelter-in-place mandates and the measures we took to temporarily restrict the
sale and installation of in-home services deemed non-essential adversely
impacted our services business in the first six months of fiscal 2020. In
addition, as we worked to limit customer traffic in our stores and as customers
chose to stay at home, our customers sought alternative methods for obtaining
the products they needed. As a result, online sales grew by approximately 100%
in the second quarter of fiscal 2020, and approximately 90% in the first six
months of fiscal 2020.
During the last three weeks of the first quarter of fiscal 2020, we saw a
significant acceleration in sales with strong performance across most of our
departments. This acceleration in sales growth continued through the second
quarter of fiscal 2020, as customers maintained their focus on home improvement
projects and repairs. The increase in customer demand for certain products
together with the impact of COVID-19 on our supply chain has pressured our
ability to maintain inventory in-stock levels, particularly for certain high
demand products. We have been able to mitigate some of the impact, however, due
to the benefits from our strategic investments as well as through such actions
as working cross-functionally and partnering with our suppliers to make
real-time adjustments to our product assortments, introducing alternative
products or reducing assortments to the most popular selections in a product
category.
Given these ongoing demands and the complexity of the current environment, we
have continued to focus on taking care of our associates by investing in
additional pay and benefits, including weekly bonuses for hourly associates in
our stores and distribution centers. These enhanced pay and benefits resulted in
additional expense of $479 million for the second quarter of fiscal 2020, and
$1.3 billion for the first six months of fiscal 2020, which increased SG&A in
fiscal 2020 compared to fiscal 2019.
Although we cannot estimate the future impact of COVID-19, we believe our
existing liquidity, including steps we took in the first quarter to strengthen
our financial position through the increase in our commercial paper program and
back-up credit facilities, suspension of our share repurchases, and issuance of
$5.0 billion of new debt, will be sufficient to continue to run our business
effectively. We also believe that the investments we have made in recent years
in our stores, interconnected and digital assets, associates, supply chain, and
merchandising organization have allowed us to quickly adapt to shifts in
customer needs and behaviors and the fluid circumstances created by COVID-19. We
continue to actively monitor our business and operations and may take further
actions as may be required by federal, state or local authorities or that we
determine are in the best interests of our associates, customers, suppliers,
vendors and shareholders.
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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 2019 Form 10-K and with our MD&A included in the 2019 Form 10-K. The
following table displays the percentage relationship between net sales and major
categories in our Consolidated Statements of Earnings, as well as the percentage
change in the associated dollar amounts.
Fiscal 2020 and Fiscal 2019 Three Month Comparisons
Three Months Ended
August 2, August 4,
2020 2019
% of % of
dollars in millions $ Net Sales $ Net Sales
Net sales $ 38,053 $ 30,839
Gross profit 12,941 34.0 % 10,432 33.8 %
Operating expenses:
Selling, general and administrative 6,355 16.7 5,044 16.4
Depreciation and amortization 519 1.4 492 1.6
Total operating expenses 6,874 18.1 5,536 18.0
Operating income 6,067 15.9 4,896 15.9
Interest and other (income) expense:
Interest and investment income (9) - (19) (0.1)
Interest expense 346 0.9 302 1.0
Interest and other, net 337 0.9 283 0.9Earnings before provision for income taxes 5,730 15.1
4,613 15.0 Provision for income taxes 1,398 3.7 1,134 3.7 Net earnings$ 4,332 11.4 %$ 3,479 11.3 % -----
Note: Certain percentages may not sum to totals due to rounding.
Three Months Ended
August 2, August 4,
Selected financial and sales data: 2020 2019 % Change
Comparable sales (% change) 23.4 % 3.0 % N/A
Comparable customer transactions (% change) (1) 12.3 % 1.0 % N/A
Comparable average ticket (% change) (1) 10.1 % 2.0 % N/A
Customer transactions (in millions) (1) 511.5 455.5 12.3 %
Average ticket (1) (2) $ 74.12 $ 67.31 10.1 %
Sales per retail square foot (1) (3) $ 629.38 $ 509.55 23.5 %
Diluted earnings per share $ 4.02 $ 3.17 26.8 %
-----
(1)Does not include results for the legacy Interline Brands business, now
operating as a part of The Home Depot Pro.
(2)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.
(3)Sales per retail square foot represents sales divided by the 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 as an indicator of the productivity of
owned and leased square footage for retail operations.
Sales. We assess our sales performance by evaluating both net sales and
comparable sales.
Net Sales . Net sales for the second quarter of fiscal 2020 increased 23.4% to
$38.1 billion from $30.8 billion in the second quarter of fiscal 2019. The
increase in net sales in the second quarter of fiscal 2020 primarily reflected
the impact of positive comparable sales driven by an increase in comparable
customer transactions and comparable average ticket. Online sales, which consist
of sales generated online through our websites for products picked up at our
stores or delivered to customer locations, represented 14.4% of net sales and
grew by approximately 100%
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during the second quarter of fiscal 2020. The increase in online sales in the
second quarter of fiscal 2020 was driven in large part by the impact of
COVID-19, with customers continuing to turn online for their shopping needs. A
stronger U.S. dollar negatively impacted sales growth by $196 million in the
second quarter of fiscal 2020.
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, digital or otherwise, are included in comparable sales
after they are 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 23.4% in the second quarter of fiscal 2020,
reflecting a 10.1% increase in comparable average ticket and a 12.3% increase in
comparable customer transactions. The increase in comparable sales reflected a
number of factors, including increased consumer demand across our core
categories and the execution of our strategic efforts to drive an enhanced
interconnected experience in both the physical and digital worlds. The increase
in comparable average ticket and comparable customer transactions was driven by
an increase in the number of products sold per transaction, strong customer
traffic both physically and digitally, and commodity price inflation.
All of our merchandising departments posted positive comparable sales in the
second quarter of fiscal 2020, with 13 of our 14 departments posting
double-digit comparable sales, while Kitchen and Bath posted high single-digit
comparable sales.
Gross Profit. Gross profit for the second quarter of fiscal 2020 increased 24.1%
to $12.9 billion from $10.4 billion in the second quarter of fiscal 2019. Gross
profit as a percentage of net sales, or gross profit margin, was 34.0% in the
second quarter of fiscal 2020 compared to 33.8% in the second quarter of fiscal
2019. The increase in gross profit margin primarily reflected a benefit from
lower promotional activity as we cancelled or modified certain annual
merchandising events in response to COVID-19; this benefit was partially offset
by higher shrink and a change in product mix.
Operating Expenses. Our operating expenses are composed of SG&A and depreciation
and amortization.
Selling, General & Administrative. SG&A for the second quarter of fiscal 2020
increased 26.0% to $6.4 billion from $5.0 billion in the second quarter of
fiscal 2019. As a percentage of net sales, SG&A was 16.7% in the second quarter
of fiscal 2020 compared to 16.4% in the second quarter of fiscal 2019. This
increase was primarily driven by an additional $479 million of expense related
to the expansion of our associate pay and benefits as part of our COVID-19
response to support our associates and an additional $108 million of operational
expense related to COVID-19, partially offset by leverage resulting from a
positive comparable sales environment.
Depreciation and Amortization. Depreciation and amortization increased 5.5% to
$519 million in the second quarter of fiscal 2020 from $492 million in the
second quarter of fiscal 2019. As a percentage of net sales, depreciation and
amortization was 1.4% in the second quarter of fiscal 2020 compared to 1.6% in
the second quarter of fiscal 2019. The decrease in depreciation and amortization
as a percentage of net sales primarily reflected leverage resulting from a
positive comparable sales environment and timing of asset additions, partially
offset by strategic investments in the business.
Interest and Other, net. Interest and other, net, was $337 million in the second
quarter of fiscal 2020 compared to $283 million in the second quarter of fiscal
2019. Interest and other, net, as a percentage of net sales was 0.9% in the
second quarter of both fiscal 2020 and fiscal 2019, and primarily reflected
higher interest expense resulting from higher debt balances at the end of the
second quarter of fiscal 2020.
Provision for Income Taxes. Our combined effective income tax rate was 24.4% for
the second quarter of fiscal 2020 compared to 24.6% for the second quarter of
fiscal 2019.
Diluted Earnings per Share. Diluted earnings per share were $4.02 for the second
quarter of fiscal 2020 compared to $3.17 for the second quarter of fiscal 2019.
The increase in diluted earnings per share for the second quarter of fiscal 2020
reflected the impact of a positive comparable sales environment, partially
offset by the additional expenses incurred in response to COVID-19.
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Fiscal 2020 and Fiscal 2019 Six Month Comparisons
Six Months Ended
August 2, August 4,
2020 2019
% of % of
dollars in millions $ Net Sales $ Net Sales
Net sales $ 66,313 $ 57,220
Gross profit 22,566 34.0 % 19,449 34.0 %
Operating expenses:
Selling, general and administrative 12,184 18.4 9,984 17.4
Depreciation and amortization 1,039 1.6 972 1.7
Total operating expenses 13,223 19.9 10,956 19.1
Operating income 9,343 14.1 8,493 14.8
Interest and other (income) expense:
Interest and investment income (26) - (34) (0.1)
Interest expense 670 1.0 590 1.0
Interest and other, net 644 1.0 556 1.0Earnings before provision for income taxes 8,699 13.1
7,937 13.9 Provision for income taxes 2,122 3.2 1,945 3.4 Net earnings$ 6,577 9.9 %$ 5,992 10.5 % -----
Note: Certain percentages may not sum to totals due to rounding.
Six Months Ended
Selected financial and sales data: August 2, 2020 August 4, 2019 % Change
Comparable sales (% change) 15.6% 2.8% N/A
Comparable customer transactions (%
change) (1) 4.7% 0.8% N/A
Comparable average ticket (% change) (1) 10.5% 2.0% N/A
Customer transactions (in millions) (1) 886.3 845.5 4.8%
Average ticket (1) (2) $ 74.37 $ 67.31 10.5%
Sales per retail square foot (1) (3) $ 547.94 $ 472.22 16.0%
Diluted earnings per share $ 6.11 $ 5.43 12.5%
-----
(1)Does not include results for the legacy Interline Brands business, now
operating as a part of The Home Depot Pro.
(2)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.
(3)Sales per retail square foot represents sales divided by the 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 as an indicator of the productivity of
owned and leased square footage for retail operations.
Sales. We assess our sales performance by evaluating both net sales and
comparable sales.
Net Sales . For the first six months of fiscal 2020, net sales increased 15.9% to
$66.3 billion from $57.2 billion in the first six months of fiscal 2019. The
increase in net sales for the first six months of fiscal 2020 primarily
reflected the impact of positive comparable sales driven by an increase in
comparable average ticket and comparable customer transactions. Online sales,
which consist of sales generated online through our websites for products picked
up in our stores or delivered to customer locations, represented 14.6% of net
sales and grew 90.4% during the first six months of fiscal 2020. The increase in
online sales in the first six months of fiscal 2020 was driven in large part by
the impact of COVID-19, with customers turning online for their shopping needs.
A stronger U.S. dollar negatively impacted sales growth by $257 million in the
first six months of fiscal 2020.
Comparable Sales. For the first six months of fiscal 2020, total comparable
sales increased 15.6%, consisting of a 10.5% increase in comparable average
ticket and a 4.7% increase in comparable customer transactions. This increase
reflected a number of factors, including increased consumer demand across our
core categories and the
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execution of our strategic efforts to drive an enhanced interconnected
experience in both the physical and digital worlds. The increase in comparable
average ticket and comparable customer transactions for the first six months of
fiscal 2020 was primarily driven by an increase in the number of products sold
per transaction and stronger online customer engagement.
During the first six months of fiscal 2020, 13 of our 14 merchandising
departments posted positive comparable sales, while Kitchen and Bath remained
flat when compared with last year.
Gross Profit. For the first six months of fiscal 2020, gross profit increased
16.0% to $22.6 billion from $19.4 billion in the first six months of fiscal
2019. Gross profit as a percentage of net sales, or gross profit margin, was
34.0% for the first six months of both fiscal 2020 and fiscal 2019, and
reflected a benefit from lower promotional activity as we cancelled or modified
certain annual merchandising events in response to COVID-19; this benefit was
partially offset by higher shrink and a change in product mix.
Operating Expenses. Our operating expenses are composed of SG&A and depreciation
and amortization.
Selling, General & Administrative. SG&A increased 22.0% to $12.2 billion in the
first six months of fiscal 2020 from $10.0 billion in the first six months of
fiscal 2019. As a percentage of net sales, SG&A was 18.4% in the first six
months of fiscal 2020 compared to 17.4% in the first six months of fiscal 2019.
The increase in SG&A as a percentage of net sales for the first six months of
fiscal 2020 was primarily driven by an additional $1.3 billion of expense
related to expanded associate pay and benefits offered in response to COVID-19
and an additional $124 million of operational expense related to COVID-19,
partially offset by leverage resulting from a positive comparable sales
environment.
Depreciation and Amortization. Depreciation and amortization increased 6.9% to
$1.0 billion in the first six months of fiscal 2020 from $972 million in the
first six months of fiscal 2019. As a percentage of net sales, depreciation and
amortization was 1.6% in the first six months of fiscal 2020 compared to 1.7% in
the first six months of fiscal 2019. The decrease in depreciation and
amortization as a percentage of net sales primarily reflected leverage resulting
from a positive comparable sales environment and timing of asset additions,
partially offset by strategic investments in the business.
Interest and Other, net. Interest and other, net was $644 million in the first
six months of fiscal 2020, compared to $556 million for the first six months of
fiscal 2019. As a percentage of net sales, interest and other, net was 1.0% for
the first six months of both fiscal 2020 and fiscal 2019, and primarily
reflected higher interest expense resulting from higher debt balances.
Provision for Income Taxes. Our combined effective income tax rate was 24.4% for
the first six months of fiscal 2020 compared to 24.5% for the first six months
of fiscal 2019.
Diluted Earnings per Share. Diluted earnings per share were $6.11 for the first
six months of fiscal 2020, compared to $5.43 for the first six months of fiscal
2019. The increase in diluted earnings per share for the first six months of
fiscal 2020 reflected the impact of a positive comparable sales environment,
partially offset by the additional expenses incurred in response to COVID-19.
Non-GAAP Financial Measures
To provide clarity, internally and externally, 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.
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The calculation of ROIC, together with a reconciliation of NOPAT to net earnings
(the most comparable GAAP measure), follows:
Twelve Months Ended
August 2, August 4,
dollars in millions 2020 2019
Net earnings $ 11,827 $ 11,203
Interest and other, net 1,216 1,045
Provision for income taxes 3,650 3,493
Operating income 16,693 15,741
Income tax adjustment (1) (4,013) (3,791)
NOPAT $ 12,680 $ 11,950
Average debt and equity $ 30,826 $ 27,364
ROIC 41.1 % 43.7 %
-----
(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 position, results of operations
or cash flows, see Note 1 to our consolidated financial statements.
Liquidity and Capital Resources
Cash and Cash Equivalents
At August 2, 2020 , we had $14.1 billion in cash and cash equivalents, of which
$1.3 billion was held by our foreign subsidiaries. We currently believe that our
current cash position, access to the long-term debt capital markets, cash flow
generated from operations, and funds available under our commercial paper
programs should be sufficient not only for our operating requirements but also
to enable us to complete our capital expenditure programs and fund dividend
payments, and any required long-term 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.
We remain committed to our strategic investment program. However, given the
current uncertainty related to COVID-19 and the priority around safety, as well
as the complexities of the current operating environment, we have decided to
postpone some of our in-store investments. As a result, we now expect that our
capital expenditures will be less than initially planned for fiscal 2020 and
that some spending originally planned for fiscal 2020 will move to fiscal 2021.
In addition, we may further adjust our capital expenditures as necessary or
appropriate to support the operations of the business.
Debt and Derivatives
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 up to
$6.5 billion , which consist of (1) a 364-day $3.5 billion credit facility that
we entered into in March 2020 in connection with the 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 . We may enter
into additional credit facilities or other debt financing.
At August 2, 2020 , we were in compliance with all of the covenants contained in
the credit facilities, and none of these covenants are expected to impact our
liquidity or capital resources. At August 2, 2020 , there were no outstanding
borrowings under our commercial paper programs. We also issued $5.0 billion of
senior notes in March 2020. See Note 4 to our consolidated financial
statements for further discussion of our senior notes issuances. We issue senior
notes from time to time as part of our capital management strategy.
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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. See Note 4 to our consolidated financial
statements for further discussion of these financial instruments.
Share Repurchases
In February 2019 , our Board of Directors authorized $15.0 billion in share
repurchases, of which approximately $7.7 billion remained available as of
August 2, 2020 . In the first six months of fiscal 2020, we had cash payments of
$791 million for repurchases of our common stock through open market purchases.
On March 13, 2020 , we suspended our share repurchases until such time as we deem
appropriate.
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 increased $6.3 billion in the first
six months of fiscal 2020 compared to the first six months of fiscal 2019 and
was primarily driven by an increase in net earnings and changes in working
capital associated with accounts payable and accrued expenses and merchandise
inventories.
Investing Activities. Cash used in investing activities decreased by $229
million in the first six months of fiscal 2020 compared to the first six months
of fiscal 2019, primarily the result of capital expenditures from the
continuation of our strategic investments in our business of $1.0 billion during
the first six months of fiscal 2020 compared to $1.2 billion of capital
expenditures in the first six months of fiscal 2019.
Financing Activities. Cash used in financing activities in the first six months
of fiscal 2020 primarily reflected $5.0 billion of net proceeds from long-term
debt, partially offset by $3.2 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 .
Cash used in financing activities in the first six months of fiscal 2019
primarily reflected $3.0 billion of cash dividends paid, $2.6 billion of share
repurchases, $1.3 billion of net repayments of short-term debt, and $1.0 billion
of net repayments of long-term debt, partially offset by $1.4 billion of net
proceeds from long-term debt.
Critical Accounting Policies
There were no changes during the first six months of fiscal 2020 to our critical
accounting policies as disclosed in the 2019 Form 10-K. Our significant
accounting policies are disclosed in Note 1 to our consolidated financial
statements.
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