A position in the Singapore exchange future contract will be taken by SGX Nifty. The settlement price of SGX Nifty contract depends on NIFTY price in Indian Stock Exchange NSE. The minimum price 500 :Results of Review of Interim Financial InformationWe have reviewed the consolidated balance sheet of The Home Depot,Inc.and subsidiaries(theCompany)as of October 30,2022,therelated consolidated statements of earnings,comprehensive income,and stockholders equity for the three-month and nine-month periodsended October 30,2022 and October 31,2021,the related consolidated statements of cash flows for the nine-month periods ended October 30,2022 and October 31,2021,and the related notes(collectively,theconsolidated interim financial information).Based on our reviews,we arenot aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S.generally accepted accounting principles.We have previously audited,in accordance with the standards of the Public Company Accounting Oversight Board(United States)(PCAOB),the consolidated balance sheet of the Company as of January 30,2022,and the related consolidated statements of earnings,comprehensiveincome,stockholders equity,and cash flows for the fiscal year then ended(not presented herein);and in our report dated March 23,2022,weexpressed an unqualified opinion on those consolidated financial statements.In our opinion,the information set forth in the accompanyingconsolidated balance sheet as of January 30,2022,is fairly stated,in all material respects,in relation to the consolidated balance sheet fromwhich it has been derived.Basis for Review ResultsThis consolidated interim financial information is the responsibility of the Companys management.We are a public accounting firm registeredwith the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our reviews in accordance with the standards of the PCAOB.A review of consolidated interim financial information consistsprincipally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.It is substantiallyless in scope than an audit conducted in accordance with the standards of the PCAOB,the objective of which is the expression of an opinionregarding the financial statements taken as a whole.Accordingly,we do not express such an opinion./s/KPMG LLPAtlanta,GeorgiaNovember 21,202212Table of ContentsItem 2.Managements Discussion and Analysis of Financial Condition and Results of Operations.The following discussion provides an analysis of the Companys financial condition and results of operations from managements perspectiveand should be read in conjunction with the consolidated financial statements and related notes included in this report and in the 2021 Form 10-Kand with our MD&A included in the 2021 Form 10-K.Our MD&A includes the following sections:Executive SummaryResults of OperationsLiquidity and Capital ResourcesCritical Accounting PoliciesEXECUTIVE SUMMARYThe following table presents quarter-to-date and year-to-date highlights of our financial performance:dollars in millions,except per share dataThree Months EndedNine Months EndedOctober 30,2022October 31,2021October 30,2022October 31,2021Net sales$38,872$36,820$121,572$115,438 Net earnings4,339 4,129 13,743 13,081 Diluted earnings per share$4.24$3.92$13.37$12.31 Net cash provided by operating activities$10,021$13,386 Proceeds from long-term debt,net of discounts6,942 2,979 Repayments of long-term debt2,423 1,480 Repurchases of common stock5,136 10,374 We reported net sales of$38.9 billion in the third quarter of fiscal 2022.Net earnings were$4.3 billion,or$4.24 per diluted share.For the firstnine months of fiscal 2022,net sales were$121.6 billion and net earnings were$13.7 billion,or$13.37 per diluted share.During the third quarter of fiscal 2022,we opened one new store in the U.S.and two new stores in Mexico,and we had no store closures,resulting in a store count of 2,319 at the end of the quarter.As of October 30,2022,a total of 313 stores,or 13.5%of our total store count,werelocated in Canada and Mexico.For the third quarter of fiscal 2022,sales per retail square foot were$618.50,and for the first nine months offiscal 2022,sales per retail square foot were$646.81.Our inventory turnover ratio was 4.3 times at the end of the third quarter of fiscal 2022,compared to 5.4 times at the end of the third quarter of fiscal 2021.The decrease in our inventory turnover ratio was driven by an increase inaverage inventory levels during the first nine months of fiscal 2022 resulting from strategic investments to promote higher in-stock levels and pullforward merchandise in response to ongoing global supply chain disruption,as well as continued investment in our new supply chain facilitiesand carry over of some spring seasonal inventory.We generated$10.0 billion of cash flow from operations and issued$6.9 billion of long-term debt,net of discounts,during the first nine months offiscal 2022.This cash flow,together with cash on hand,was used to fund cash payments of$5.9 billion for dividends and$5.1 billion for sharerepurchases.In addition,we repaid$2.4 billion of long-term debt and$1.0 billion of net short-term debt and funded$2.2 billion in capitalexpenditures.In February 2022,we announced a 15%increase in our quarterly cash dividend to$1.90 per share.Our ROIC for the trailing twelve-month period was 43.3%at the end of the third quarter of fiscal 2022 and 43.9%at the end of the third quarter offiscal 2021.See the Non-GAAP Financial Measures section below for our definition and calculation of ROIC,as well as a reconciliation ofNOPAT,a non-GAAP financial measure,to net earnings(the most comparable GAAP financial measure).13Table of ContentsRESULTS OF OPERATIONSThe following table presents the percentage relationship between net sales and major categories in our consolidated statements of earnings.FISCAL 2022 AND FISCAL 2021 THREE MONTH COMPARISONSThree Months EndedOctober 30,2022October 31,2021dollars in millions$%ofNet Sales$%ofNet SalesNet sales$38,872$36,820 Gross profit13,224 34.0,563 34.1%Operating expenses:Selling,general and administrative6,468 16.6 6,168 16.8 Depreciation and amortization608 1.6 600 1.6 Total operating expenses7,076 18.2 6,768 18.4 Operating income6,148 15.8 5,795 15.7 Interest and other(income)expense:Interest income and other,net(7)(15)Interest expense413 1.1 341 0.9 Interest and other,net406 1.0 326 0.9 Earnings before provision for income taxes5,742 14.8 5,469 14.9 Provision for income taxes1,403 3.6 1,340 3.6 Net earnings$4,339 11.2%$4,129 11.2%Note:Certain percentages may not sum to totals due to rounding.Three Months EndedSelected financial and sales data:October 30,2022October 31,2021%ChangeComparable sales(%change)4.3%6.1%N/AComparable customer transactions(%change)(4.4)%(5.8)%N/AComparable average ticket(%change)8.8.7%N/ACustomer transactions(in millions)409.8 428.2(4.3)%Average ticket$89.67$82.38 8.8%Sales per retail square foot$618.50$587.28 5.3%Diluted earnings per share$4.24$3.92 8.2%(1)Does not include results for HD Supply. Contract size. 1) Global market cues from US, EU & Asia all have an impact on SGX Nifty movements. All rights reserved. 2023 Boston Consulting Group1Climate technologiestechnologies that accelerate decarbonizationare essential to limiting globalwarming.Despite the many attractive opportunities for investing in clean tech,global investmentscontinue to fall short.As a result,many of todays companies lack the technologies they need todecarbonize their operations and value chains.At the current level of investment,the second wave ofclimate technology innovation will follow the long and winding path of wind and solar:scaling up andreducing carbon emissions over 20 to 30 years.Ushering in the Next Generation ofClimate TechnologyAPRIL 18,2023 By Thomas Baker,Bahar Carroll,Greg Fischer,Karan Mistry,Paulina Ponce de Len Barid,and TinaZuzek-ArdenREADING TIME:12 MIN1 2023 Boston Consulting Group2But we do not have 20 to 30 years.To reduce emissions and avoid the worst impacts of climate change,we need to spend$3.5 trillionevery year on climate technologies.Starting now.Public and philanthropic funding alone cannot fill thisgiant gap.But public and philanthropic funding combined with market-shaping mechanisms designedto accelerate the development and scaling of climate technologies can. SGX nifty is Nifty futures contract trading in Singapore Stock Exchange and in India, Nifty contract trades on NSE. )2023 Boston Consulting Group5At maturity,and if adopted at scale,these technologies could collectively enable about 22 gigatonnesper year in global emissions abatement and fuel a cumulative global market size of$45 to$60 trillionthrough 2050.But these emerging climate technologies will not achieve widespread adoption until we remove thefollowing barriers:Unattractive Risk-Return Profile for Institutional Investors.Without proper incentives,organizationscan be reluctant to invest in unproven technologies under development given the risk that thetechnologies may fail.Unproven Markets.When introducing a new product,companies must prove that its safe,reliable,affordable,and scalableand prove to investors it is commercially viable to raise capital.Subscale Investments for Projects.Even promising projects can languish for years in the valley ofdeath as they seek additional funding from governments and other sources to scale up.Insufficient Value Proposition for Corporate Buyers.Some climate technologies will come at a costpremium as they scale without additional functional benefits;companies must be willing to paythat differential.2023 Boston Consulting Group6The good news is that these barriers can be overcome with deliberate actions.In the US,for example,the 2022 Inflation Reduction Act provides both production and investment tax incentives for keyclimate technologies,including incentives to ramp up carbon-capture facilities and boost greenhydrogen production.The goal is to improve the overall risk-return profile and spur investments in theinnovative technologies most needed to meet net-zero goals.These incentives have spurred action notjust in the US but globally,with many major economies developing similar plans to support the marketfor climate technologies.Market-shaping mechanisms like these can dramatically shi the economicviability of green energy and climate technology.How to Drive New Forms of InvestmentCompanies and investors are experimenting with new mechanisms to accelerate the development andscaling of climate technologies.Here are some of the most promising ones being used today.Mobilize capital through innovative finance and send clear demand signals.Companies canaccelerate the development and deployment of climate technologies by mobilizing capital through avariety of mechanisms,including advance market commitments,concessional capital,oakeagreements,volume guarantees,and coalitions.These mechanisms not only provide alternativefunding sources beyond institutional investors to help companies cross the valley of death but alsosupport mitigation beyond companies value chains and help address some of the imbalance thatexists today between net zero targets and available offset mechanisms.Advance Market Commitments(AMCs).With AMCs,a pool of money is allocated to purchase largequantities of a product at established prices,which incentivizes large-scale development anddeployment at an affordable price.Example:Frontier Climate has committed$925 million to fund the development of carbonremoval technologies between 2022 and 2030.Frontiers AMCs send a strong demand signalwithout favoring any particular technology.Similarly,the Carbon Removal Alliance,anindustry group of 20-plus members,is working to advance policies that support permanentcarbon removal technologies.Concessional Capital.Concessional capital aims to benefit the greater good and catalyze additionalthird-party investment,making it a more patient and risk-tolerant investment.Example:Breakthrough Energy Catalyst has raised over$1.5 billion of concessional capitalfrom philanthropies,governments,and companies to support large-scale demonstrations ofcritical climate technologies.Oakes,Volume Guarantees,and Pooled Procurement.These mechanisms deploy capital when atechnology is available for purchase,reducing the financial risk companies face when scaling up 2023 Boston Consulting Group7Advocate for and implement beneficial policy mechanisms.Companies can also work withgovernments and regulators to spur investment in promising technologies so they can scale up andbecome more affordable,which in turn incentivizes financial institutions and buyers to invest in thetechnology.Here are just a few examples:Investment is flowing.In 2021,venture capital and private equity in climate technologies exceeded$50billion,and in 2022,the US Inflation Reduction Act devoted approximately$400 billion in funding toaccelerate climate tech.Now is the time for corporations and financial institutions to execute market-production.Oakes and volume guarantees can be purchased in conjunction with othercompanies(using a mechanism called pooled procurement),allowing buyers to gain purchasingpower and secure supply.Example:The Clean Energy Buyers Association deploys clean energy and tracks utility-scaledeals in the procurement of renewables,where the deals serve as customer-led volumeguarantees for renewables providers.Coalitions can send a clear signal that market demand exists for climate technologies.Example:As part of First Movers Coalition,50 companies committed to decarbonizingseven hard-to-abate industrial sectors by purchasing clean energy technologies.This includesadvance purchasing a portion of materials and transportation needed from suppliers usingnear-zero or zero-carbon solutions.Permitting.Permitting and reviews can be a hurdle that slows deployment of many climatetechnologies.The direct and indirect costs of permitting can account for 30%of residential solarinstallation costs and the average wait time for installation has doubled from 2005 to 2020.Incentives.In the United States,the 2022 Inflation Reduction Act implemented an$85 per toncredit for permanent geological sequestration of CO2 and a 60%investment tax credit for newsolar projects,among many others.Climate Auctions.More than 100 countries are using auction-based approaches to subsidizerenewable energy,and many have achieved renewable energy prices that are lower thantraditional power sources.Feed-in Tariffs.With agreement from the regulator,in 2013,Dominion Energy created a feed-intariff for residential and commercial solar photovoltaic generators in the United States.Participants receive 15 cents per kilowatt hour for all solar photovoltaic-generated electricityprovided to the grid,which has helped bring 2,200 megawatts of solar into operation in ten statesenough energy to power about 550,000 homes at peak output.2023 Boston Consulting Group8shaping activities to further legitimize markets,advance climate technologies toward large-scalecommercialization,and gain benefits and competitive advantage in the process.Next Steps for Developing a Market-Shaping StrategyEvery organization can take steps to dramatically accelerate adoption of climate technologies withinand beyond their value chain.For companies and financial institutions that wish to participate in market shaping and reap itsbenefits,there are a range of options to consider.For example,companies can reduce carbonemissions throughout their value chain,work with industry partners to increase the scale of existinginitiatives,spearhead market-shaping initiatives,and advocate for policies that are favorable toclimate technology adoption.Market shaping is a win-win for companies,allowing them to secure supply,meetclimate goals,and increase internal know-how on essential technologies.Financial institutions can incorporate climate metrics into their investment strategy,encourageportfolio companies to disclose climate data,launch sustainability-linked instruments,and joinmarket-leading efforts to fund commercial-scale green technologies.While financial institutions arefacing scrutiny around climate initiatives,the benefits of climate investments will continue to grow overtime,creating a singular opportunity to shape the market.The slideshow lays out the most important actions companies and financial institutions can take nowto shape the market for emerging climate technologies and speed progress toward globaldecarbonization.2023 Boston Consulting Group9If we want to achieve global net zero,we cant allow climate technologies to evolve at their currentpace.They will take far too long to scale.To move the market faster,we need to encourage new waysof investing.Market shaping is a win-win for companies,allowing them to secure supply,meet climate goals,andincrease internal know-how on essential technologies.By aligning private capital,public capital,andpublic policy,market shaping can play a key role in ensuring climate technologies gain the traction theyneed to scaleand ultimately transform our world.The authors thank BCGs Connor Sendel and Habib Azarabadi for their contributions to this article.2023 Boston Consulting Group10AuthorsThomas BakerMANAGING DIRECTOR&PARTNERSan Francisco-Bay AreaBahar CarrollPROJECT LEADERSeattleGreg FischerPARTNER AND DIRECTORLondonKaran MistryPARTNERLos AngelesPaulina Ponce de Len BaridMANAGING DIRECTOR&PARTNERSan Francisco-Bay AreaTina Zuzek-ArdenMANAGING DIRECTOR&PARTNERWashington,DC ABOUT BOSTON CONSULTING GROUP1From Clean Tech 1.0 to Climate Tech 2.0:A New Era of Investment Opportunities,B CapitalGroup,January 17,2023,https:/ the Clean Industrial Revolution,Breakthrough Energy,October 29,2021,https:/breakthroughenergy.org/news/financing-the-clean-industrial-revolution/.2023 Boston Consulting Group11Boston Consulting Group partners with leaders in business and society to tackle their most importantchallenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it wasfounded in 1963.Today,we work closely with clients to embrace a transformational approach aimed atbenefiting all stakeholdersempowering organizations to grow,build sustainable competitive advantage,and drive positive societal impact.Our diverse,global teams bring deep industry and functional expertise and a range of perspectives thatquestion the status quo and spark change.BCG delivers solutions through leading-edge managementconsulting,technology and design,and corporate and digital ventures.We work in a uniquely collaborativemodel across the firm and throughout all levels of the client organization,fueled by the goal of helping ourclients thrive and enabling them to make the world a better place.Boston Consulting Group 2023.All rights reserved.For information or permission to reprint,please contact BCG at .To find the latestBCG content and register to receive e-alerts on this topic or others,please visit .Follow BostonConsulting Group on Facebook and Twitter.
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