-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Uu44xaSMtSZNCStrO7/kPFvP+rV+ToDmHQGbxoaE7L9bNOrJrg33/gHlDPjQjStS eGU6k3LiQYubm47vPAAxqg== 0000354950-95-000002.txt : 19950421 0000354950-95-000002.hdr.sgml : 19950421 ACCESSION NUMBER: 0000354950-95-000002 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19950129 FILED AS OF DATE: 19950420 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME DEPOT INC CENTRAL INDEX KEY: 0000354950 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS [5211] IRS NUMBER: 953261426 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-08207 FILM NUMBER: 95529835 BUSINESS ADDRESS: STREET 1: 2727 PACES FERRY RD CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 4044338211 10-K405 1 FORM 10-K FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended January 29, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission File Number 1-8207 THE HOME DEPOT, INC. (Exact name of Registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) IRS No. 95-3261426 (I.R.S. Employer Identification No.) 2727 Paces Ferry Road, Atlanta, Georgia (Address of principal executive offices) 30339-4089 (Zip Code) Registrant's telephone number, including area code: (404) 433-8211 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Name of Each Exchange Title of Each Class on Which Registered Common Stock, $.05 Par Value New York Stock Exchange SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[X] The aggregate market value of the Common Stock of the Registrant held by nonaffiliates of the Registrant on April 3, 1995 was $19,491,388,444. The aggregate market value was computed by reference to the closing price of the stock on the New York Stock Exchange on such date. For the purposes of this response, executive officers and directors are deemed to be the affiliates of the Registrant and the holding by nonaffiliates was computed as 442,986,101 shares. The number of shares outstanding of the Registrant's Common Stock as of April 3, 1995 was 475,254,023 shares. DOCUMENTS INCORPORATED BY REFERENCE The Registrant's proxy statement for its Annual Meeting of Stockholders, to be held May 31, 1995, which will be filed pursuant to Regulation 14A within 120 days of the close of Registrant's fiscal year, is incorporated by reference in answer to Part III of this report but only to the extent indicated herein. In addition, pages 14 through 30 and the inside cover page of The Home Depot, Inc.'s 1994 Annual Report to Stockholders is incorporated by reference in answer to Items 6, 7 and 8 of Part II and Item 14(a) of Part IV of this report. PART I Item 1. BUSINESS The Home Depot, Inc., including its subsidiaries ("The Home Depot" or "Company") is the leading retailer in the home improvement industry. It operates "warehouse style" stores which sell a wide assortment of building materials and home improvement products. At fiscal year end, the Company had 340 stores in 28 states and 3 Canadian provinces, with an aggregate total of approximately 35,133,000 square feet of selling space. Such stores average approximately 103,000 square feet of enclosed space per store, with an additional 20,000 to 28,000 square feet of garden center and storage space. The Company's corporate offices are located at 2727 Paces Ferry Road, Atlanta, Georgia 30339-4089, telephone number (404) 433-8211. The Home Depot's operating strategy stresses providing a broad range of merchandise at competitive prices and utilizing highly knowledgeable service oriented personnel and aggressive advertising. Company-employed shoppers regularly check prices at competitors' operations to ensure that The Home Depot's low "Day-In, Day-Out" warehouse prices are competitive within each market. Since a majority of the Company's customers are individual homeowners, many of whom may have limited experience in do-it-yourself ("D-I-Y") projects, management considers its employees' knowledge of products and home improvement techniques and applications to be very important to its marketing approach and its ability to maintain customer satisfaction. Many D-I-Y customers take advantage of "how-to" classes offered in The Home Depot stores. Another segment of the Company's business activity is the buy-it-yourself ("B-I-Y") customers. The B-I-Y customer chooses products, makes the purchase and contracts with others to complete or install the project. The Home Depot also devotes significant marketing, advertising and service efforts toward attracting professional remodelers and commercial users. Products Management estimates that during the course of a year, a typical store stocks approximately 40,000 to 50,000 product items, including variations in color and size. Each store carries a wide selection of quality and nationally advertised brand name merchandise. The table below shows the percentage of sales of each major product group for each of the last three fiscal years. However, these percentages may not necessarily be representative of the Company's future product mix due, among other things, to the effects of promotional activities associated with opening additional stores. Also, newly opened stores did not operate through a complete seasonal product cycle for all periods presented.
Percentage of Sales Year Ended Year Ended Year Ended Feb. 2, Jan. 31, Jan. 29, 1993 1994 1995 Product Group Plumbing, heating, lighting and electrical supplies 27.3% 27.6% 27.9% Building materials, lumber, floor and wall coverings 34.1 34.2 34.0 Hardware and tools 12.8 13.0 13.1 Seasonal and specialty items 14.8 14.5 14.5 Paint and Other 11.0 10.7 10.5 100.0% 100.0% 100.0%
The Company sources its merchandise from approximately 8,000 vendors worldwide, of which no single vendor accounts for as much as 10 percent of purchases. The Company is not dependent on any single vendor. A substantial majority of merchandise is purchased directly from manufacturers, thereby eliminating costs of intermediaries. Management believes that competitive sources of supply are readily available for substantially all its products. Marketing and Sales Management believes a number of the Company's existing stores are operating at or above their optimum capacity. In order to enhance market penetration over time, the Company has adopted a strategy of adding new stores near the edge of the market areas served by existing stores. While such a strategy may initially have a negative impact on the rate of growth of comparable store-for-store sales, management believes this "cannibalization" strategy increases customer satisfaction and overall market share by reducing delays in shopping, increasing utilization by existing customers and attracting new customers to more convenient locations. The Home Depot has continued to introduce or refine a number of merchandising programs during fiscal 1994. Key among them is the Company's ongoing commitment to becoming the supplier of first choice to an assortment of professional customers, primarily small- scale remodelers, carpenters, plumbers, electricians and building maintenance professionals. The Company has reacted to the needs of this group by emphasizing commercial credit programs, delivery services, new merchandising programs and more efficient shopping through the Company's Store Productivity Improvement program. The Company continued a Company-wide roll-out of an enlarged garden center prototype. These centers which are as large as 28,000 square feet, feature 6,000 to 8,000 square foot house plant enclosures ("HPE") or covered selling areas providing year round selling opportunities as well as a significantly expanded product assortment. By the end of fiscal 1994, the prototype was in place in at least 244 stores. By the end of fiscal 1995, these enlarged centers should be in most of the Company's stores. The organization of the merchandising group was revamped during fiscal 1994 to be more efficient and responsive to customers' needs. Under the new structure, both product line merchandisers and regional merchandisers report to division merchandise managers who have responsibility for broad product categories, such as construction, decor, repair and season- lawn/garden. The Company's installed sales program is available in 332 stores in 70 markets and is planned to be in all of the Company's stores over the next year. There are approximately 3,400 installed sales vendors who, as independent, licensed contractors, are authorized to provide services to customers. This program targets the B-I-Y customer, who will purchase an item but either does not have the desire or ability to install the item. During the past year, the Company has continued its marketing effort to support its sponsorship of the 1994 and 1996 Olympic Games and the U.S. Olympic teams' participation at those games. In fiscal 1994, the Company unveiled a program to help pave the Olympic Park in Atlanta with engraved bricks, and hired athletes to work in its stores and offices while they train for the Olympic Games. The Company's growing partnership with 29 key suppliers in the United States and 26 in Canada is providing significant financial support for the sponsorship. During fiscal 1994, the Company also announced its sponsorship of the Paralympic Games, which will follow the 1996 Summer Games in Atlanta. Support of the Paralympic Games is symbolic of the Company's commitment to better serve those of its associates and customers with disabilities. In January 1994, the Company opened its second Expo(R) Design Center in Atlanta, Georgia. The Expo stores, located in San Diego and Atlanta, enabled the regional merchandising staff to test a variety of upscale interior design products and services. Due to strong customer acceptance of its Expo stores, the Company plans to add Expo stores in Westbury, New York, and in Dallas, Texas, during 1995. The Expo stores offer approximately 125,000 square feet of selling space plus 5,000 square feet of climate controlled garden centers. During 1994, the Company also opened additional food service facilities in certain stores. These facilities are an extension of the Company's commitment to total customer satisfaction, and are designed to provide customers and employees with a convenient place to eat. The Company believes customers with limited amounts of time to complete their shopping, especially customers with small children, may spend more time in the store if fast food is available on site. The food service providers vary by market. On February 28, 1994, the Company acquired a 75 percent interest in the Aikenhead's Home Improvement Warehouse ("Aikenhead's") chain in Canada. This 75 percent interest was purchased from the Molson Companies Limited ("Molson"). The Company has the right to acquire Molson's remaining 25 percent interest beginning in 2000. The Company is the managing partner of this partnership which operates as The Home Depot Canada. During fiscal 1994, the Company began developing plans to open stores in Mexico. Although the Company has begun building relationships with key suppliers in Mexico, entry into this market will be cautious and slow. On a long-term basis, however, it is anticipated that success in Mexico could lead to more opportunities throughout Central and South America. The CrossRoads(tm) store format, announced during fiscal 1994, will carry building and home improvement supplies sold at traditional Home Depot stores, as well as a broad assortment of products and services for farmers and ranchers. By combining its traditional customer base with the markets in farming and ranching communities, the Company anticipates being able to penetrate hundreds of smaller markets that might not otherwise have supported Home Depot stores. The first CrossRoads store is expected to open in Quincy, Illinois during the summer of 1995, with stores in Waterloo, Iowa and Columbia, Missouri expected to also open during the year. The average CrossRoads store is expected to encompass more that 100,000 square feet, plus additional outside selling space of approximately 100,000 square feet. "The Home Depot", the "Homer" advertising symbol and various private label brand names under which the Company sells a limited range of products are service marks, trademarks or trade names of the Company and are considered to be important assets of the Company. Information Systems Each store is equipped with a computerized point of sale system, electronic bar code scanning system, and a mini-computer. These systems provide efficient customer check-out with an approximate 90 percent of scannable products, store-based inventory management, rapid order replenishment, labor planning support, and item movement information. In fiscal 1994 faster registers were introduced as well as a new check approval system and a new receipt format to expedite credit card transactions. Store information is communicated to home office and divisional office computers via a satellite and land-based communications network. These computers provide corporate financial and merchandising support systems. The Company is constantly assessing and upgrading its information systems to support its growth, reduce and control costs, and enable better decision-making. The Company continues to see greater efficiency as a result of its electronic data interchange (EDI) program. Currently, over 400 of the Company's highest volume vendors are participating in the EDI program. A paperless system, EDI electronically processes orders from stores to vendors, alerts the store when the merchandise is to arrive and transmits vendor invoice data. In fiscal 1994, the Company introduced phone centers to serve its customers who call to inquire about pricing and availability of merchandise. By adding experienced sales associates to a phone bank to answer calls quickly and efficiently, weekly phone sales have increased. Without the necessity of responding to phone calls, the sales associates can better concentrate on serving in- store customers. In fiscal 1994, stores were outfitted with Electronic Article Surveillance ("EAS") detectors that trigger an alarm if a person exits the store with merchandise that has been affixed with an EAS label that has not been desensitized at the cash register. The system is proving to be a deterrent to theft, with many stores reporting reductions in shoplifting offenses. The Company also operates its own television network and produces training and informational programs that are transmitted to stores via the communications network. Employees As of fiscal year end, The Home Depot employed approximately 67,000 persons, of whom approximately 4,800 were salaried and the remainder were compensated on an hourly basis. Approximately 83 percent of the Company's employees are employed on a full-time basis. In order to attract and retain qualified personnel, the Company seeks to maintain salary and wage levels above those of its competitors in its market areas. The Company's policy is to hire and train additional personnel in anticipation of future store expansion. The Company has never experienced a strike or any work stoppage, and management believes that its employee relations are satisfactory. There are no collective bargaining agreements covering any of the Company's employees. Competition The business of the Company is highly competitive, based in part on price, location of store, customer service and depth of merchandise. In each of the markets served by the Company, there are several other chains of building supply houses, lumber yards and home improvement stores. In addition, the Company must compete, with respect to some of its products, with discount stores, local, regional and national hardware stores, warehouse clubs, independent building supply stores and to a lesser extent, other retailers. Due to the variety of competition faced by the Company, management is unable to precisely measure the Company's market share in its existing market areas. Management, however, believes that the Company is an effective and significant competitor in these markets. Executive Officers The following provides information concerning the executive officers holding positions in the Company and/or its subsidiaries. BERNARD MARCUS, age 65, has been Chairman of the Board of Directors and Chief Executive Officer ("CEO") of The Home Depot since its inception in 1978; and is, together with Mr. Arthur M. Blank and Mr. Kenneth G. Langone (a director of the Company), a co- founder of the Company. Mr. Marcus serves on the Board of Directors of Wachovia Bank of Georgia, N.A., National Service Industries, Inc. and the New York Stock Exchange, Inc. Mr. Marcus is a member of the Advisory Board and Board of Directors of the Shepherd Spinal Center in Atlanta, as well as a Vice President and member of the Board of The City of Hope, a charitable organization in Duarte, California. Mr. Marcus is also a member of Emory University's Board of Visitors. ARTHUR M. BLANK, age 52, has been President, Chief Operating Officer ("COO") and a director of The Home Depot since its inception in 1978; and is, together with Mr. Bernard Marcus and Mr. Kenneth G. Langone, a co-founder of the Company. Mr. Blank serves as Chairman of the Board of Trustees of North Carolina Outward Bound School, a non-profit corporation; serves on the Board of Trustees of Emory University; the Board of Councilors of the Carter Center of Emory University; and the Board of Directors of Cox Enterprises, Inc., Post Properties Inc. and Harry's Farmers Market, Inc. RONALD M. BRILL, age 51, has been Executive Vice President and Chief Financial Officer ("CFO") of the Company since March 1993. Mr. Brill joined The Home Depot as its Controller in 1978, was elected Treasurer in 1980, Vice President-Finance in 1981, Senior Vice President and CFO in 1984, and elected as a director in 1987. Mr. Brill serves on the Board of Directors of AutoFinance Group, Inc.; the Board of Trustees of the Atlanta Jewish Federation; the Board of Trustees of Woodruff Arts Center; the Board of Directors of the High Museum of Art; and the Governing Board of Woodward Academy. BILL HAMLIN, age 42, has been Executive Vice President- Merchandising since April 1994. Mr. Hamlin joined the Company in 1985 as a merchandiser and was promoted to Vice President- Merchandising (West Coast) in 1988 and President-Western Division in 1990. JAMES W. INGLIS, age 51, has been a director of the Company since 1993. Mr. Inglis has been Executive Vice President-Strategic Development since April 1994. Mr. Inglis joined The Home Depot in 1983 as a merchandiser and was shortly thereafter promoted to Senior Merchandiser and then promoted to Vice President- Merchandising (West Coast) in 1985, and Executive Vice President- Merchandising in 1988. Mr. Inglis serves as endowment chairman for the City of Hope's hardware and home improvement industry group. STEPHEN BEBIS, age 42, has been President of The Home Depot Canada since February 1994 when the company acquired a 75 percent interest in the operation formerly known as Aikenhead's. Mr. Bebis joined The Home Depot in 1984 as a merchandiser. Prior to joining Aikenhead's in 1990, Mr. Bebis was Vice President-Merchandising for the Mid-South Division of The Home Depot. BRUCE W. BERG, age 46, has been President-Southeast Division since 1991. Mr. Berg joined the Company in 1984 as Vice President- Merchandising (East Coast) and was promoted to Senior Vice President (East Coast) in 1988. W. ANDREW McKENNA, age 49, has been President-Midwest Division since August 1994. Mr. McKenna joined The Home Depot in 1990 as Senior Vice President-Corporate Information Systems. LARRY M. MERCER, age 46, has been President-Northeast Division since 1991. Mr. Mercer joined the Company in 1979 as an Assistant Store Manager and after serving as a Store Manager was promoted to Regional Manager of the Central Florida Region in 1983. Mr. Mercer was then promoted to Vice President-Store Operations (East Coast) in 1987. HARRY PIERCE, age 36, has been President-Western Division since April 1994. Mr. Pierce joined the Company in 1984 as an Assistant Store Manager and later became an associate merchandiser in 1985. After serving several years as a merchandiser both in Atlanta and in the Northeast, Mr. Pierce was promoted to Manager- Merchandising Information Systems in 1990. In 1992, Mr. Pierce joined the Company's Western Division as Vice President- Merchandising. DENNIS J. RYAN, age 48, has been President of the CrossRoads Division since January 1995. Mr. Ryan joined the Company in 1985 as a building materials merchandiser and became Vice President- Merchandising in 1988. Mr. Ryan was then promoted to Senior Vice President-Merchandising in 1992. BRYANT W. SCOTT, age 39, has been President of the Expo Design Centers Division since March 1995. Mr. Scott began his career with The Home Depot in 1980 as a store associate. Since then he has served in a variety of positions and most recently served as Vice President-Merchandising for the Southeast Division, located in Tampa, Florida. MARSHALL L. DAY, age 51, has been Senior Vice President- Finance since March 1993. Mr. Day joined the Company in 1986 as Controller, was promoted to Vice President-Controller in 1988 and Vice President-Finance in 1989. Item 2. PROPERTIES The following table illustrates the Company's store locations by state in the United States and province in Canada as of the end of fiscal year 1994:
Number of Stores State in State ----------------------------------------------------------- Alabama 2 Arizona 11 California 76 Connecticut 7 Florida 55 Georgia 18 Idaho 1 Illinois 6 Louisiana 7 Maryland 7 Massachusetts 11 Michigan 5 Nevada 3 New Hampshire 3 New Jersey 13 New Mexico 2 New York 16 North Carolina 10 Oklahoma 4 Oregon 3 Pennsylvania 7 Rhode Island 1 South Carolina 5 Tennessee 7 Texas 33 Utah 3 Virginia 5 Washington 7 -------------------------------------------- Subtotal 328 Number of Stores Canadian Provinces in Province Ontario 8 British Columbia 2 Alberta 2 -------------------------------------------- Subtotal 12 -------------------------------------------- TOTAL 340 ============================================
At fiscal year end, The Home Depot had stores located in 28 states, with approximately 53 percent being concentrated in California, Georgia, Texas and Florida. Although new store openings for fiscal 1994 occurred primarily in existing markets, the Company continued its geographic expansion by opening stores in a number of new markets in fiscal 1994 -- Boise, Idaho; Chicago, Illinois; Detroit, Michigan; Albuquerque, New Mexico; upstate New York; Winston-Salem, North Carolina; Tulsa, Oklahoma; Eugene, Oregon; eastern Pennsylvania; Columbia, South Carolina; and Salt Lake City, Utah. The Company made its initial entry into the midwest region of the United States through the region's two largest markets, Chicago, Illinois and Detroit, Michigan in fiscal 1994. By the close of fiscal 1994, the Company had opened 11 stores in the region. The Midwest division is expected to be one of the fastest growing divisions for the next several years. Approximately 16 new stores are scheduled for 1995, and by the end of 1998, the Company expects approximately 112 stores to be open. The Home Depot Canada commenced operations with 7 stores operated previously by Aikenhead's. The Home Depot Canada built an additional 5 stores during fiscal 1994, for a total of 12 stores at fiscal year end. Approximately 9 additional new stores are planned for a total of 21 by the end of fiscal 1995. From the end of fiscal 1989 to the end of fiscal 1994, the Company increased its store count by an average of approximately 24 percent per year (from 118 to 340 stores) and increased the total store square footage by an average of approximately 28 percent per year (from 10,424,000 to 35,133,000 total square feet). The Home Depot expects to continue to increase its store count in both existing and selected new markets on a basis consistent with its previously stated policy of not exceeding a maximum growth rate of new stores of approximately 25 percent per year in the U.S. The Home Depot took advantage of recent competitive opportunities during the 1994 fiscal year despite this stated policy. During fiscal 1994, the Company opened 70 new stores, acquired seven stores, closed one and relocated nine existing stores, including the opening of 16 additional stores in the Northeast division, 19 additional stores in the Southeast division, 11 in the Midwest division, 19 additional stores in the Western division and 5 stores in Canada. During fiscal 1995, the Company anticipates opening approximately 91 new stores: 24 in the Southeast, 20 in the Northeast, 18 in the West, 15 in the Midwest, nine in Canada, two Expo stores and three CrossRoads stores, plus relocations of nine existing stores. New stores average approximately 102,000 square feet with an additional 15,000 to 28,000 square feet of outside selling and storage area. Of the Company's 340 stores, 67 percent are owned (including those owned subject to a ground lease) consisting of approximately 23,644,000 square feet and 33 percent are leased consisting of approximately 11,489,000 square feet. In recent years, the relative percentage of new stores which are owned has increased. The Company prefers to own stores because of the greater operating control and flexibility, generally lower occupancy costs and certain other economic advantages of owned stores. See "Management's Discussion and Analysis of Results of Operations and Financial Condition--Liquidity and Capital Resources." The Company's executive, corporate staff and accounting offices occupy approximately 511,000 square feet of leased space in several locations in Atlanta, Georgia. The Company has acquired land in Atlanta, Georgia and has commenced construction of replacement office facilities. The office facilities will be completed in stages to coincide with the end of various lease terms and space requirements. The Company occupies an aggregate of 209,600 square feet, of which 77,600 square feet is owned and 132,000 square feet is leased, for divisional offices located in Atlanta, Georgia; Fullerton, California; South Plainfield, New Jersey; Schaumberg, Illinois; Tampa, Florida; and Scarborough, Ontario, Canada. The Company utilizes 2,171,000 square feet of warehousing and distribution space of which 188,000 is owned and 1,983,000 is leased. The Company also recently announced plans to acquire an approximately 1.4 million square foot facility in Savannah, Georgia for an international distribution center. Imported products will be staged in the distribution center pending shipment to the stores. Item 3. LEGAL PROCEEDINGS There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company is a party or to which any of its property is the subject. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of security holders during the fourth quarter of the fiscal year ended January 29, 1995. PART II Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Since April 19, 1984, the Common Stock of the Company has been listed on the New York Stock Exchange under the symbol "HD". The table below sets forth the high and low sales prices of the Common Stock on the New York Stock Exchange Composite Tape as reported in The Wall Street Journal and the quarterly cash dividends declared per share of Common Stock during the periods indicated.
Cash Price Range * Dividends Low High Declared * Fiscal Year 1993 First Quarter ended May 2, 1993 $39.63 $50.50 $.0225 Second Quarter ended August 1, 1993 41.13 47.00 .0300 Third Quarter ended October 31, 1993 35.00 47.25 .0300 Fourth Quarter ended January 30, 1994 36.50 44.25 .0300 Fiscal Year 1994 First Quarter ended May 1, 1994 $37.13 $44.63 $.0300 Second Quarter ended July 31, 1994 39.63 46.38 .0400 Third Quarter ended October 30, 1994 39.75 46.25 .0400 Fourth Quarter ended January 29, 1994 44.13 48.25 .0400 Fiscal Year 1995 First Quarter (through April 3, 1995) $42.88 $49.75 $.0400 ____________________________ * On April 13, 1993, the Company effected a four-for-three stock split, in the form of a stock dividend, with respect to the shares of Common Stock issued and outstanding on March 24, 1993. The prices in the table set forth above have been adjusted by the Company to give effect retroactively to such stock split. Dividends declared also have been adjusted to give effect to the stock split.
The Company paid its first cash dividend on June 22, 1987, and has since paid dividends in each quarter. Future dividend policy will depend on the Company's earnings, capital requirements, financial condition and other factors considered relevant by the Board of Directors. Number of Record Holders The number of record holders of The Home Depot's Common Stock as of April 3, 1995 was 63,336 (without including individual participants in nominee security position listings). Item 6. SELECTED FINANCIAL DATA Reference is made to information for the fiscal years 1989-1994 under the heading "Ten Year Selected Financial and Operating Highlights" contained in the Company's Annual Report to Stockholders for the fiscal year ended January 29, 1995, which information is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Reference is made to information under the heading "Management's Discussion and Analysis of Results of Operations and Financial Condition" contained in the Company's Annual Report to Stockholders for the fiscal year ended January 29, 1995, which information is incorporated herein by reference. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Reference is made to information under the headings "Consolidated Statements of Earnings," "Consolidated Balance Sheets," "Consolidated Statements of Stockholders' Equity," "Consolidated Statements of Cash Flows," "Notes to Consolidated Financial Statements" and "Independent Auditors' Report" contained in the Company's Annual Report to Stockholders for the fiscal year ended January 29, 1995, which information is incorporated herein by reference. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by Item 10 is incorporated by reference from the information in Registrant's proxy statement (filed or to be filed pursuant to Regulation 14A) for its Annual Meeting of Stockholders to be held May 31, 1995, except as to biographical information on Executive Officers which is contained in Item I of this Annual Report on Form 10-K. Item 11. EXECUTIVE COMPENSATION The information required by Item 11 is incorporated by reference from the information in Registrant's proxy statement (filed or to be filed pursuant to Regulation 14A) for its Annual Meeting of Stockholders to be held May 31, 1995. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by Item 12 is incorporated by reference from the information in Registrant's proxy statement (filed or to be filed pursuant to Regulation 14A) for its Annual Meeting of Stockholders to be held May 31, 1995. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by Item 13 is incorporated by reference from the information in Registrant's proxy statement (filed or to be filed pursuant to Regulation 14A) for its Annual Meeting of Stockholders to be held May 31, 1995. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) 1. Financial Statements The following financial statements are filed herewith by incorporation by reference from pages 17 through 30 of the Registrant's Annual Report to Stockholders for the fiscal year ended January 29, 1995, as provided in Item 8 hereof: - - Consolidated Statements of Earnings for the fiscal years ended January 29, 1995, January 30, 1994 and January 31, 1993. - - Consolidated Balance Sheets as of January 29, 1995 and January 30, 1994. - - Consolidated Statements of Stockholders' Equity for the fiscal years ended January 29, 1995, January 30, 1994 and January 31, 1993. - - Consolidated Statements of Cash Flows for the fiscal years ended January 29, 1995, January 30, 1994 and January 31, 1993. - - Notes to Consolidated Financial Statements. - - Independent Auditors' Report. 2. Financial Statement Schedules All schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the last quarter of the fiscal year ended January 29, 1995. (c) Exhibits Exhibits marked with an asterisk (*) are hereby incorporated by reference to exhibits or appendices previously filed by the Registrant as indicated in brackets following the description of the exhibit. 3.l Restated Certificate of Incorporation of The Home Depot, Inc., as amended. * 3.2 By-Laws, as amended [Form 10-K for the fiscal year ended February 3, 1991, Exhibit 3.2] * 4.1 $300,000,000 Credit Agreement dated as of November 2, 1994 among The Home Depot, Inc., the Banks Listed Therein and Wachovia Bank of Georgia, N.A., as Agent (without exhibits). [Form 10-Q for the fiscal quarter ended October 30, 1994, Exhibit 10] *10.1 Investment Banking Consulting Contract dated April 17, 1985 between Invemed Associates, Inc. and the Registrant. [Form 10-K for the fiscal year ended February 2, 1992, Exhibit 10.1] *10.2 +Corporate Office Management Bonus Plan of the Registrant dated March 1, 1991. [Form 10-K for the fiscal year ended February 2, 1992, Exhibit 10.2] *10.3 +Employee Stock Purchase Plan, as amended. [Appendix A to Registrant's Proxy Statement for the Annual Meeting of Stockholders held May 31, 1995] 10.4 +Senior Officers' Bonus Pool Plan, as amended. *10.5 +The Home Depot Employee Stock Ownership Plan and Trust, as amended. [Form 10-K for the fiscal year ended January 29, 1989, Exhibit 10.7] *10.6 +The Home Depot, Inc. 1991 Omnibus Stock Option Plan. [Appendix A to Registrant's Proxy Statement for the Annual Meeting of Stockholders held May 22, 1991] *10.7 +Executive Medical Reimbursement Plan, effective January 1, 1992. [Form 10-K for the fiscal year ended January 31, 1993, Exhibit 10.7] 10.8 +The Home Depot ESOP Restoration Plan. 11 Computation of Earnings Per Common and Common Equivalent Share. 13 The Registrant's Annual Report to Stockholders for fiscal year ended January 29, 1995. Only those portions of said report which are specifically designated in this Form 10-K as being incorporated by reference are being electronically filed pursuant to the Securities Exchange Act of 1934. 21 List of Subsidiaries of the Registrant. 23 Consent of Independent Auditors. 24 Special Powers of Attorney authorizing execution of Form 10-K Annual Report have been granted and are filed herewith as follows: Power of Attorney from Frank Borman. Power of Attorney from Berry R. Cox. Power of Attorney from Milledge A. Hart, III. Power of Attorney from James W. Inglis. Power of Attorney from Donald R. Keough. Power of Attorney from Kenneth G. Langone. Power of Attorney from M. Faye Wilson. 27 Financial Data Schedule. +Management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 14(c) of this report. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant, The Home Depot, Inc., has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Atlanta, and State of Georgia on this 17th day of April, 1995. THE HOME DEPOT, INC. By: /s/ Bernard Marcus ----------------------------------- (Bernard Marcus, Chairman of the Board, Chief Executive Officer and Secretary) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant, The Home Depot, Inc., and in the capacities and on the dates indicated. Signature Title Date /s/ Bernard Marcus Chairman of the - ------------------------ Board, Chief April 17, 1995 (Bernard Marcus) Executive Officer and Secretary (Principal Executive Officer) /s/ Arthur M. Blank President, - ------------------------ Chief Operating Officer April 17, 1995 (Arthur M. Blank) and Director /s/ Ronald M. Brill Chief - ------------------------ Financial Officer, Executive April 17, 1995 (Ronald M. Brill) Vice President and Director (Principal Financial and Accounting Officer) * - ------------------------ Director April 17, 1995 (Frank Borman) * - ------------------------ Director April 17, 1995 (Berry R. Cox) * - ------------------------ Director April 17, 1995 (Milledge A. Hart, III) * - ------------------------ Director April 17, 1995 (James W. Inglis) * Director April 17, 1995 - ------------------------ (Donald R. Keough) * - ------------------------ Director April 17, 1995 (Kenneth G. Langone) * Director April 17, 1995 - ------------------------ (M. Faye Wilson) * The undersigned, by signing his name hereto, does hereby sign this report on behalf of each of the above-indicated directors of the Registrant pursuant to powers of attorney, executed on behalf of each such director. By:/s/ Bernard Marcus ----------------------------- (Bernard Marcus, Attorney-in-fact) EXHIBIT INDEX 3.1 Restated Certificate of Incorporation of The Home Depot, Inc., as amended. 10.4 Senior Officers' Bonus Pool Plan, as amended. 10.8 The Home Depot ESOP Restoration Plan. 11 Computation of Earnings Per Common and Common Equivalent Share. 13 The Registrant's Annual Report to Stockholders for the fiscal year ended January 29, 1995. Only those portions of said report which are specifically designated in this Form 10-K as being incorporated by reference are being electronically filed pursuant to the Securities Exchange Act of 1934. 21 List of Subsidiaries of the Registrant. 23 Consent of Independent Auditors. 24 Special Powers of Attorney authorizing execution of this Form 10-K Annual Report have been granted and are filed herewith as follows: Power of Attorney from Frank Borman. Power of Attorney from Berry R. Cox. Power of Attorney from Milledge A. Hart, III. Power of Attorney from James W. Inglis. Power of Attorney from Donald R. Keough. Power of Attorney from Kenneth G. Langone. Power of Attorney from M. Faye Wilson. 27 Financial Data Schedule. [Filed Electronically with S.E.C. Only] EX-3.1 2 EXHIBIT 3.1 RESTATED CERTIFICATE OF INCORPORATION OF THE HOME DEPOT, INC., AS AMENDED (Originally incorporated on June 29, 1978 under the name M. B. Associates Incorporated) FIRST: The name of the corporation (which is herein referred to as the "Corporation") is The Home Depot, Inc. SECOND: The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, in the City of Wilmington, in the County of New Castle. The name of its registered agent at that address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage ln any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware. Without limiting in any manner the scope and generality of the foregoing, it is hereby provided that the Corporation shall have the following purposes, objects and powers: To manufacture, purchase or otherwise acquire, invest in, own, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and deal with, any and all goods, wares, merchandise and personal property relating to home improvement services, materials, products, devices, manuals, audio-visual aids, tools and any and all products related thereto of every kind and description. To do all and everything necessary, suitable and proper for the accomplishment of any of the purposes or the attainment of any of the objects or the furtherance of any of the powers hereinbefore set forth, either alone or in association with other corporations, firms or individuals, and to do every other act or acts, thing or things incidental to or growing out of or connected with the aforesaid powers or any part or parts thereof, including, without limitation, the acquisition and operation of businesses exclusively or partially engaged in providing home improvement services, materials, products, devices, manuals, audio-visual aids, tools, and related products or services to consumers. The business or purpose of the Corporation is from time to time to do any one or more of the acts and things hereinbefore set forth, and it shall have power to conduct and carry on said business, or any part thereof, and to have one or more offices, and to exercise any or all of its corporate powers and rights, in the State of Delaware, and in the various other states, territories, colonies and dependencies of the United States, in the District of Columbia, and in all or any foreign countries. The enumeration herein of the objects and purposes of the Corporation shall be construed as powers as well as objects and purposes and shall not be deemed to exclude by inference any powers, objects or purposes which the Corporation is empowered to exercise, whether expressly by force of the laws of the State of Delaware now or hereafter in effect, or impliedly by the reasonable construction of said laws. FOURTH: The total number of shares of stock which the Corporation will have authority to issue is 1,000,000,000, all of which shall be shares of Common Stock of the par value of five cents ($.05) each. FIFTH: The name and mailing address of the sole incorporator is as follows: Kenneth G. Langone c/o INVEMED ASSOCIATES INCORPORATED 375 Park Avenue New York. New York 10022 SIXTH: 1. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not less than three nor more than fifteen directors, the exact number of directors to be determined from time to time by resolution adopted by affirmative vote of a majority of the entire Board of Directors. The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. At the meeting of stockholders at which this Article is adopted, Class I, II and III directors shall be elected to serve until the 1987, 1986 and 1985 annual meetings of stockholders, respectively. 2. At each annual meeting of the stockholders beginning with 1985, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, and any other vacancy occurring in the Board of Directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. 3. No person (other than a person nominated by or on behalf of the Board of Directors) shall be eligible for election as a director at any annual or special meeting of stockholders unless a written request that his or her name be placed in nomination is received from a stockholder of record by the Secretary of the Corporation not less than 30 days prior to the date fixed for the meeting, together with the written consent of such person to serve as a director. 4. Except to the extent prohibited by law, the Board of Directors shall have the right (which, to the extent exercised, shall be exclusive) to establish the rights, powers, duties, rules and procedures that from time to time shall govern the Board of Directors and each of its members, including without limitation the vote required for any action by the Board of Directors, the determination by resolution of the Board of Directors of the officers of the Corporation and their respective titles and duties, the determination by resolution of the Board of Directors of the manner of choosing the officers of the Corporation and the terms of their respective offices, the determination by resolution of the Board of Directors of the terms and conditions under which the Corporation shall exercise the powers granted to it as of January I, 1984 by Section 145 of the Delaware General Corporation Law, as such powers may exist from time to time after January 1, 1984, and that from time to time shall affect the directors' power otherwise to manage the business and affairs of the Corporation; and, notwithstanding any other provision of this Certificate of Incorporation to the contrary, no by-law shall be adopted by stockholders which shall interpret or qualify, or impair or impede the implementation of, the foregoing. Any inconsistency between, on the one side, a document which implements the provisions of this paragraph 4 and sets forth the rights, powers, duties, rules and/or procedures governing the Board of Directors and, on the other side, any by-law or other corporate document shall be construed in favor of the document setting forth such rights, powers, duties, rules and/or procedures. 5. No action shall be taken by stockholders of the Corporation except at an annual or special meeting of the stockholders of the Corporation. Except to the extent, if any, otherwise required by law, a special meeting of the stockholders of the Corporation may be called only by the Chairman of the Board of Directors, the President or the Board of Directors of the Corporation. 6. No amendment to the Certificate of Incorporation of the Corporation shall amend, alter, change or repeal any of the provisions of this Article SIXTH, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote of the holders of eighty percent (80%) of all shares of stock of the Corporation entitled to vote in the election of directors, considered for the purposes of this Article SIXTH as one class; provided that this paragraph 6 shall not apply to, and such eighty percent (80%) vote or consent shall not be required for, any amendment, alteration, change or repeal unanimously recommended to the stockholders by the Board of Directors of the Corporation if each of such directors is a person who would be eligible to serve as a continuing director as hereinafter defined in paragraph 7 of this Article SIXTH. 7. As used in paragraph 6 of this Article SIXTH, (a) the term "continuing director" shall mean either a person who was a member of the Board of Directors of the Corporation elected by the stockholders of the Corporation prior to the time that an "other entity" acquired in excess of ten percent (10%) of the stock of the Corporation entitled to vote in the election of directors, or a person recommended to succeed any continuing director by a majority of continuing directors; (b) the term "other entity" shall include any corporation, person or other entity (other than the Corporation, any of its subsidiaries or a trustee holding stock for the benefit of employees of the Corporation or its subsidiaries, or any one of them, pursuant to one or more employee benefit plans or arrangements) and any other entity with which it or its "affiliate" or "associate" (as defined below) has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of stock of the Corporation, or which is its "affiliate" or "associate" as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934 as in effect on January 1, 1984, together with the successors and assigns of such persons in any transaction or series of transactions not involving a "public offering" of the Corporation's stock within the meaning of the Securities Act of 1933, provided that "other entity" does not include any one or any group of more than one of the persons who were directors of the Corporation as of January 1, 1984, or any one or any group of more than one continuing director (as defined above); (c) an other entity (as defined above) shall be deemed to be the beneficial owner of any shares of stock of the Corporation which such other entity has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise; and (d) the outstanding shares of any class of stock of the Corporation shall include shares deemed owned through application of clause (c) above but shall not include any other shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise. 8. A majority of the continuing directors shall have the power and duty to determine for the purposes of this Article SIXTH on the basis of information known to them whether (a) such other entity beneficially owns more than ten percent (10%) of the outstanding shares of stock of the Corporation entitled to vote in the election of directors, (b) an other entity is an "affiliate" or "associate" (as defined above) of another, or (c) an other entity has an agreement, arrangement or understanding with another. SEVENTH: The Board of Directors shall have power to make, alter or repeal the by-laws of the Corporation, except as may otherwise be provided in the by-laws. EIGHTH: 1. The affirmative vote or, if permitted under this Certificate of Incorporation, consent of the holders of eighty percent (80%) of all shares of the Corporation entitled to vote in the election of directors, considered for the purposes of this Article EIGHTH as one class, shall be required for the adoption or authorization of (i) a business combination (as hereinafter defined) with any other entity (as hereinafter defined) if, as of the record date for the determination of stockholders entitled to notice thereof and to vote thereon, or, if so permitted, consent thereto, such other entity is the beneficial owner, directly or indirectly, of more than twenty percent (20%) of the outstanding shares of stock of the Corporation entitled to vote in the election of directors, considered for the purposes of this Article EIGHTH as one class, or (ii) a proposed dissolution of the Corporation or a proposed amendment of the Certificate of Incorporation of the Corporation which would either change the entitlement of the holders of shares of Common Stock of the Corporation to vote in the election of directors or would authorize the Corporation to issue either shares of capital stock (other than shares of its Common Stock) or bonds, debentures or other obligations, which, if issued, would or could be entitled to vote in the election of directors if, as of the record date for the determination of stockholders entitled to notice of and to vote on or, if so permitted, consent to such proposed dissolution or such proposed amendment, an other entity (as hereinafter defined) is the beneficial owner, directly or indirectly, of more than twenty percent (20%) of the outstanding shares of stock of the Corporation entitled to vote in the election of directors, considered for the purposes of this Article EIGHTH as one class; provided that such eighty percent (808) voting requirement shall not be applicable to the adoption or authorization of a business combination if: (a) The cash, or fair market value of other consideration, to be received per share by holders of shares of any class of capital stock of the Corporation in such business combination bears the same or a greater percentage relationship to the market price of such shares of capital stock immediately prior to the announcement of such business combination as the highest per share price (including brokerage commissions and/or soliciting dealers' fees) which such other entity has theretofore paid for any of such shares of capital stock already owned by it bears to the market price of such shares of capital stock immediately prior to the commencement of acquisition of such shares of capital stock by such other entity; (b) The cash, or fair market value of other consideration, to be received per share by holders of shares of any class of capital stock of the Corporation in such business combination is not less than the highest per share price (including brokerage commissions and/or soliciting dealers' fees) paid by such other entity in acquiring any of its holdings of such shares of capital stock (c) After such other entity has acquired such greater-than- twenty percent (20%) interest and prior to the consummation of such business combination: (i) such other entity shall have taken steps to ensure that the Corporation's Board of Directors included- at all times representation by continuing director(s) (as hereinafter defined) proportionate to the stockholdings of the Corporation's stockholders not affiliated with such other entity (with a continuing director to occupy any resulting fractional board position); (ii) such other entity shall not have acquired any newly issued shares of capital stock, directly or indirectly, from the Corporation (except upon conversion of securities acquired by it prior to obtaining such greater-than-twenty percent (20%) interest or as a result of a pro rata stock dividend or stock split); and (iii) such other entity shall not have acquired any additional shares of the Corporation's outstanding capital stock or securities convertible into capital stock except as a part of the transaction which results in such other entity acquiring such greater-than- twenty percent (20%) interest; and (d) Such other entity shall not have received the benefit, directly or indirectly (except proportionately as a stockholder) of any loans, advances, guarantees, pledges or other financial assistance or tax credits provided by the Corporation. The provisions of this Article EIGHTH shall also apply to a business combination with any other entity which at any time has been the beneficial owner, directly or indirectly, of more than twenty percent (20%) of the outstanding shares of stock of the Corporation entitled to vote in the election of directors, considered for the purpose of this Article EIGHTH as one class, notwithstanding the fact that such other entity has reduced its shareholdings below twenty percent (20%) if, as of the record date for the determination of stockholders entitled to notice of and to vote on or, if so permitted, consent to the business combination, such other entity is an "affiliate" of the Corporation (as hereinafter defined). 2. As used in this Article EIGHTH, (a) the term "other entity" shall include any corporation, person or other entity (other than the Corporation, any of its subsidiaries or a trustee holding stock for the benefit of employees of the Corporation or its subsidiaries or any one of them, pursuant to one or more employee benefit plans or arrangements) and any other entity with which it or its "affiliate" or "associate" (as defined below) has any agreement, arrangement or understanding, directly or indirectly, for the purpose of acquiring, holding, voting or disposing of stock of the. Corporation, or which is its "affiliate" or "associate" as those terms are defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934 as in effect on January 1, 1984, together with the successors and assigns of such persons in any transaction or series of transactions not involving a "public offering" of the Corporation's stock within the meaning of the Securities Act of 1933, provided that "other entity" does not include any one or any group of more than one of the persons who were directors of the Corporation as of January 1, 1984, or any one or any group of more than one continuing director (as defined below), (b) an other entity (as defined above) shall be deemed to be the beneficial owner of any shares of stock of the Corporation which such other entity has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise; (c) the outstanding shares of any class of stock of the Corporation shall include shares deemed owned through application of clause (b) above but shall not include any other shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise; (d) the term, "business combination" shall include any merger or consolidation of the Corporation with or into any other corporation, or the sale or lease of all or any substantial part of the assets of the Corporation to, or any sale or lease to the Corporation or any subsidiary thereof in exchange for securities of the Corporation of any assets (except assets having an aggregate fair market value of less than $5,000,000) of, any other entity; (e) the term "continuing director" shall mean either a person who was a member of the Board of Directors of the Corporation elected by the stockholders of the Corporation prior to the time that an other entity acquired in excess of ten percent (10%) of the stock of the Corporation entitled to vote in the election of directors, or a person recommended to succeed any continuing director by a majority of continuing directors; and (f) for the purposes of subparagraphs l(a) and (b) of this Article EIGHTH the term "other consideration to be received" shall mean capital stock of the Corporation retained by its stockholders (other than such other entity) in the event of a business combination with such other entity in which the Corporation is the surviving corporation. 3. A majority of the continuing directors shall have the power and duty to determine for the purposes of this Article EIGHTH on the basis of information known to them whether (a) such other entity beneficially owns more than ten percent (108) or twenty percent (20%) of the outstanding shares of stock of the Corporation entitled to vote in the election of directors, (b) an other entity is an "affiliate" or "associate" (as defined above) of another, (c) an other entity has an agreement, arrangement or understanding with another, or (d) the assets being acquired by the Corporation, or any subsidiary thereof, have an aggregate fair market value of less than S5,000,000. 4. No amendment to the Certificate of Incorporation of the Corporation- shall amend, alter, change or repeal any of the provisions of this Article EIGHTH, unless the amendment effecting such amendment, alteration, change or repeal shall receive the affirmative vote or consent of the holders of eighty percent (80%) of all shares of stock of the Corporation entitled to vote in the election of directors, considered for the purposes of this Article EIGHTH as one class; provided that this paragraph 4 shall not apply to, and such eighty percent (80%) vote or (if permitted under this Certificate of Incorporation) consent shall not be required for, any amendment, alteration, change or repeal unanimously recommended to the stockholders by the Board of Directors of the Corporation if all of such directors are persons who would be eligible to serve as "continuing directors" within the meaning of paragraph 2 of this Article EIGHTH. 5. Nothing contained in this Article EIGHTH shall be construed to relieve any other entity from any fiduciary obligation imposed by law. 6. The provisions of this Article EIGHTH shall not apply to: (a) The adoption or authorization of any business combination described in paragraph 1 of this Article EIGHTH if the Board of Directors of the Corporation shall have approved by resolution a memorandum of understanding with the other corporation, person or entity with whom such business combination is proposed prior to the time that such other corporation, person or entity shall have become a beneficial owner of five percent (5%) or more of the outstanding shares of any class of capital stock of the Corporation entitled to vote in the election of directors: or (b) The adoption or authorization of any business combination, proposed dissolution or proposed amendment described in paragraph 1 of this Article EIGHTH, if such business combination, proposed dissolution or proposed amendment is approved, prior to its adoption or authorization by the stockholders of the Corporation, by a resolution of the Board of Directors of the Corporation which is approved by at least two- thirds of those members of the Board of Directors of the Corporation who are not, at the time of their approval, involved with and/or representing an other entity which, at such time, is the beneficial owner, directly or indirectly, of more than twenty percent (20%) of the outstanding shares of stock of the Corporation then entitled to vote in the election of directors. NINTH: No director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. EX-10.4 3 EXHIBIT 10.4 SENIOR OFFICERS' BONUS POOL PLAN, AS AMENDED The performance goals contained in the Senior Officers' Bonus Pool Plan (the "SOBP") as adopted by the Compensation Committee of the Board of Directors of The Home Depot, Inc. (the "Company"), a committee of outside directors (the "Committee") will govern the award of annual bonuses to Mr. Bernard Marcus, Chief Executive Officer of the Company (the "CEO") and Mr. Arthur M. Blank, Chief Operating Officer of the Company (the "COO"), who are the designated eligible participants. Moreover, pursuant to the applicable provisions of the Omnibus Budget Reconciliation Act of 1993 ("OBRA"), the U.S. Department of the Treasury could limit the Company's federal tax deduction for compensation paid to its senior officers to $1 million each, unless compensation in excess of this amount is based on the achievement of performance goals and eligibility requirements. The SOBP qualifies as performance-based compensation and all sums paid thereunder should be deductible by the Company. In 1993, the SOBP allowed the CEO and the COO collectively to earn a bonus based on 1.25% of the Company's earnings up to $54 million and 2.0% of earnings above $54 million (before being adjusted for the bonus pool and income taxes) up to a maximum amount of $4 million. In order to comply with a "safe harbor" under proposed regulations adopted under OBRA, the Committee has revised the SOBP to allow the CEO and the COO collectively to earn a bonus equal to 10% of the Company's earnings in excess of a threshold amount as established by the Committee (the "Earnings Threshold"), subject to an annual maximum established by the Committee. The Earnings Threshold for fiscal 1995 is equal to $604,501,000, which is approximately equal to the Company's net earnings for fiscal 1994. Monies payable from the SOBP are to be shared by the CEO and COO at the ratio of 50% each. For fiscal 1995, the maximum amount awardable under the SOBP is $4 million; however, the actual benefits to be paid under the SOBP are not presently determinable. Prior to awarding any cash bonuses for the 1994 fiscal year and all subsequent years covered by the SOBP, the Committee will evaluate the performance of the Company to certify that the performance goals have been met. EX-10.8 4 EXHIBIT 10.8 THE HOME DEPOT ESOP RESTORATION PLAN THE HOME DEPOT ESOP RESTORATION PLAN Effective as of the 1st day of January, 1994, The Home Depot, Inc., a corporation duly organized and existing under the laws of the State of Delaware (the "Controlling Company"), hereby establishes The Home Depot ESOP Restoration Plan. BACKGROUND AND PURPOSE A. Background. The Controlling Company sponsors The Home Depot Employee Stock Ownership Plan ("the "ESOP"), an employee stock ownership plan qualified under Sections 401(a) and 4975(e)(7) of the Internal Revenue Code of 1986, as amended (the "Code"). B. General Purpose. The primary purpose of the Plan is to provide additional retirement income to certain key executive employees of the Controlling Company and its affiliates that are participating companies in the Plan, in order to reduce the impact of certain provisions of the Code that limit the maximum benefits that may accrue under the ESOP. In particular, the Controlling Company intends for the Plan to at least partially offset the effects of the maximum compensation limitation under Code Section 401(a)(17), by providing the amount of supplemental retirement income specified in the Plan. C. Type of Plan. The Plan constitutes an unfunded, nonqualified deferred compensation plan that benefits certain designated employees who are within a select group of key management or highly compensated employees. STATEMENT OF AGREEMENT To establish the Plan with the purposes and goals as hereinabove described, the Controlling Company hereby sets forth the terms and provisions as follows: TABLE OF CONTENTS Page ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . . 1 1.1 Account. . . . . . . . . . . . . . . . . . . . . . 1 1.2 Administrative Committee . . . . . . . . . . . . . 1 1.3 Allocation Date. . . . . . . . . . . . . . . . . . .1 1.4 Beneficiary. . . . . . . . . . . . . . . . . . . . 1 1.5 Board. . . . . . . . . . . . . . . . . . . . . . . 1 1.6 Code . . . . . . . . . . . . . . . . . . . . . . . 1 1.7 Company. . . . . . . . . . . . . . . . . . . . . . 1 1.8 Company Stock. . . . . . . . . . . . . . . . . . . .1 1.9 Controlled Group . . . . . . . . . . . . . . . . . 1 1.10 Controlling Company. . . . . . . . . . . . . . . . 1 1.11 Disability . . . . . . . . . . . . . . . . . . . . .2 1.12 Effective Date . . . . . . . . . . . . . . . . . . 2 1.13 Eligible Employee. . . . . . . . . . . . . . . . . .2 1.14 Employee . . . . . . . . . . . . . . . . . . . . . .2 1.15 ERISA. . . . . . . . . . . . . . . . . . . . . . . 2 1.16 ESOP . . . . . . . . . . . . . . . . . . . . . . . .2 1.17 Participant. . . . . . . . . . . . . . . . . . . . 2 1.18 Participating Company. . . . . . . . . . . . . . . .2 1.19 Plan . . . . . . . . . . . . . . . . . . . . . . . 2 1.20 Plan Year. . . . . . . . . . . . . . . . . . . . . 3 1.21 Section 401(a)(17) Limitation. . . . . . . . . . . 3 1.22 Stock Unit . . . . . . . . . . . . . . . . . . . . .3 1.23 Surviving Spouse . . . . . . . . . . . . . . . . . 3 1.24 Trust or Trust Agreement . . . . . . . . . . . . . 3 1.25 Trustee. . . . . . . . . . . . . . . . . . . . . . 3 1.26 Trust Fund . . . . . . . . . . . . . . . . . . . . 3 ARTICLE II ELIGIBILITY AND PARTICIPATION. . . . . . . . . . . .4 2.1 Eligibility. . . . . . . . . . . . . . . . . . . . 4 2.2 Participation. . . . . . . . . . . . . . . . . . . .4 2.3 Cessation of Eligibility and Participation . . . . 4 ARTICLE III PARTICIPANTS' ACCOUNTS; BENEFITS AND CREDITING . . 5 3.1 Participants' Accounts . . . . . . . . . . . . . . 5 (a) Establishment of Accounts. . . . . . . . . .5 (b) Nature of Contributions and Accounts . . . .5 3.2 Benefit Amount . . . . . . . . . . . . . . . . . . 5 (a) Account Balance. . . . . . . . . . . . . . 5 (b) Amount Credited. . . . . . . . . . . . . . 5 (c) Crediting of Stock Units . . . . . . . . . 6 (d) Cash Dividends . . . . . . . . . . . . . . .6 (e) Adjustments for Stock Dividends and Splits .6 (f) Value of Account . . . . . . . . . . . . . .6 (g) Value of Company Stock . . . . . . . . . . .7 3.3 Vesting. . . . . . . . . . . . . . . . . . . . . . 7 3.4 Notice to Participants of Account Balances . . . . .7 3.5 Good Faith Valuation Binding . . . . . . . . . . . .8 3.6 Errors and Omissions in Accounts . . . . . . . . . .8 ARTICLE IV PAYMENT OF ACCOUNT BALANCES . . . . . . . . . . . .9 4.1 Benefit Payments . . . . . . . . . . . . . . . . . 9 (a) General Rule Concerning Benefit Payments . .9 (b) Timing of Distribution . . . . . . . . . . .9 4.2 Form of Distribution . . . . . . . . . . . . . . . 9 4.3 Beneficiary Designation. . . . . . . . . . . . . . 10 (a) General. . . . . . . . . . . . . . . . . . 10 (b) No Designation or Designee Dead or Missing 10 4.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE V CLAIMS . . . . . . . . . . . . . . . . . . . . . . 11 5.1 Claims . . . . . . . . . . . . . . . . . . . . . . 11 (a) Initial Claim. . . . . . . . . . . . . . . 11 (b) Appeal . . . . . . . . . . . . . . . . . . 11 (c) Satisfaction of Claims . . . . . . . . . . 11 ARTICLE VI SOURCE OF FUNDS; TRUST . . . . . . . . . . . . . . 12 6.1 Source of Funds. . . . . . . . . . . . . . . . . . 12 6.2 Trust. . . . . . . . . . . . . . . . . . . . . . . 12 ARTICLE VII ADMINISTRATIVE COMMITTEE . . . . . . . . . . . . . 13 7.1 Action . . . . . . . . . . . . . . . . . . . . . . 13 7.2 Rights and Duties. . . . . . . . . . . . . . . . . 13 7.3 Compensation, Indemnity and Liability. . . . . . . 14 ARTICLE VIII AMENDMENT AND TERMINATION . . . . . . . . . . . 15 8.1 Amendments . . . . . . . . . . . . . . . . . . . . 15 8.2 Termination of Plan. . . . . . . . . . . . . . . . 15 ARTICLE IX MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 16 9.1 Taxation . . . . . . . . . . . . . . . . . . . . . 16 9.2 No Employment Contract . . . . . . . . . . . . . . 16 9.3 Headings . . . . . . . . . . . . . . . . . . . . . 16 9.4 Gender and Number. . . . . . . . . . . . . . . . . 16 9.5 Assignment of Benefits . . . . . . . . . . . . . . 16 9.6 Legally Incompetent. . . . . . . . . . . . . . . . 16 9.7 Governing Law. . . . . . . . . . . . . . . . . . . 17 ARTICLE I DEFINITIONS For purposes of the Plan, the following terms, when used with an initial capital letter, shall have the meaning set forth below unless a different meaning plainly is required by the context. 1.1 Account shall mean, with respect to a Participant or his Beneficiary, the total dollar amount, value and/or number of Stock Units evidenced by the last balance posted in accordance with the terms of the Plan to the account record established for such Participant or Beneficiary. 1.2 Administrative Committee shall mean the administrative committee of the ESOP, or such other committee as shall be appointed by the Board to administer the Plan. 1.3 Allocation Date shall mean the last day of each Plan Year. 1.4 Beneficiary shall mean, with respect to a Participant, the person(s) designated or otherwise determined in accordance with Section 4.3 to receive any death benefits that may be payable under the Plan upon the death of the Participant. 1.5 Board shall mean the Board of Directors of the Controlling Company. In the event the Plan provides that the Controlling Company shall act, such action shall be taken by the Board unless the Board has authorized and directed the Administrative Committee or other person or entity to act in its stead. 1.6 Code shall mean the Internal Revenue Code of 1986, as amended. 1.7 Company shall mean, collectively, the Controlling Company and each of the other Participating Companies. 1.8 Company Stock shall mean the $.05 par value per share voting common stock of the Controlling Company. 1.9 Controlled Group shall mean all of the companies that are either (i) members of the same controlled group of corporations (within the meaning of Code Section 414(b)), or (ii) under common control (within the meaning of Code Section 414(c)), with the Controlling Company. 1.10 Controlling Company shall mean The Home Depot, Inc., a Delaware corporation with its principal place of business in Atlanta, Georgia. 1.11 Disability shall mean, with respect to a Participant, his disability as provided under the terms of the ESOP. 1.12 Effective Date shall mean January 1, 1994, the date that the Plan initially shall be effective; provided, for purposes of ERISA, the Plan shall be established on the date it is approved by the Board. 1.13 Eligible Employee shall mean, for a Plan Year, an individual: (a) Who is a member of a select group of highly compensated or key management Employees of the Company; (b) Who participates in and receives allocations under the ESOP for such Plan Year; and (c) Whose Compensation for such Plan Year exceeds the Section 401(a)(17) Limitation. The Administrative Committee shall determine, from time to time and in its sole discretion, which Employees satisfy said criteria, and the Administrative Committee's determination shall be binding. 1.14 Employee shall mean an individual who is considered an employee of the Company for purposes of the ESOP. 1.15 ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended. 1.16 ESOP shall mean The Home Depot Employee Stock Ownership Plan, an employee stock ownership plan qualified under Code Sections 401(a) and 4975(e)(7) and sponsored by the Controlling Company, and all amendments thereto. 1.17 Participant shall mean any individual who has been admitted to, and has not been removed from, participation in the Plan pursuant to the provisions of Article II. 1.18 Participating Company shall mean, individually, the Controlling Company and each of its affiliates that is a participating company in the ESOP, unless the Board or Administrative Committee has specifically excluded such a company from participation in the Plan. 1.19 Plan shall mean The Home Depot ESOP Restoration Plan as contained herein and all amendments hereto. The Plan is intended to be an unfunded, nonqualified deferred compensation plan covering certain designated Employees who are within a select group of key management or highly compensated Employees. 1.20 Plan Year shall mean the 12-consecutive-month period ending on December 31 of each year. 1.21 Section 401(a)(17) Limitation shall mean the limitation imposed under Code Section 401(a)(17) that establishes, subject to cost-of-living adjustments, a maximum amount of compensation that can be taken into account for any year under a retirement plan qualified under Code Section 401(a). 1.22 Stock Unit shall mean an accounting entry on a Participating Company's books, that is equal in value at any time to the current fair market value of one share of Company Stock, and that represents an unsecured obligation of the Participating Company to pay that amount to a Participant in accordance with the terms of the Plan. A Stock Unit shall not carry any voting, dividend or other similar rights and shall not constitute an option or any other right to acquire any equity securities of the Company. 1.23 Surviving Spouse shall mean, with respect to a Participant, the person who is treated as married to such Participant under the laws of the state in which the Participant resides. The determination of a Participant's Surviving Spouse shall be made as of the date of such Participant's death. 1.24 Trust or Trust Agreement shall mean the separate agreement or agreements between the Participating Companies and the Trustee governing the creation of the Trust Fund, and all amendments thereto. 1.25 Trustee shall mean the party or parties so designated from time to time pursuant to the terms of the Trust Agreement. 1.26 Trust Fund shall mean the total amount of Company Stock, cash and other property held by the Trustee (or any nominee thereof) at any time under the Trust Agreement. ARTICLE II ELIGIBILITY AND PARTICIPATION 2.1 Eligibility. Each Eligible Employee for a Plan Year shall be eligible to participate in the Plan for such Plan Year. 2.2 Participation. Each Eligible Employee for a Plan Year shall actively participate in the Plan (that is, shall be an active Participant) for such Plan Year only if (i) his employment, with the Company, all other members of the Controlled Group and any other company that the Administrative Committee designates for purposes of the Plan as an affiliate of the Company, does not terminate prior to the March 1 succeeding such Plan Year, and (ii) he completes such forms and provides such data, if any, as may be required by the Administrative Committee as a precondition of participation in the Plan. Such forms and data may include, without limitation, the Eligible Employee's acceptance of the terms and conditions of the Plan and the designation of a Beneficiary to receive any death benefits payable hereunder. 2.3 Cessation of Eligibility and Participation. If during a Plan Year an individual ceases to satisfy any of the criteria that qualified him as an Eligible Employee, or if his employment, with the Company, all members of the Controlled Group and any other company that the Administrative Committee designates for purposes of the Plan as an affiliate of the Company, ceases for any reason prior to the March 1 immediately succeeding such Plan Year, his active participation (that is, his status as an active Participant) in the Plan shall cease commencing with and for such Plan Year; provided, such employee shall remain an inactive Participant in the Plan until the earlier of (i) the date the full value of his Account (if any) is forfeited and/or paid in accordance with the terms of the Plan, or (ii) the date he again becomes an Eligible Employee and qualifies under Section 2.2 to actively participate in the Plan. During the time that an employee is an inactive Participant in the Plan, his Account shall continue to be adjusted for cash dividends and changes in Company Stock as provided in Sections 3.2(d) and (e). ARTICLE III PARTICIPANTS' ACCOUNTS; BENEFITS AND CREDITING 3.1 Participants' Accounts. (a) Establishment of Accounts. The Administrative Committee shall establish and maintain, on behalf of each Participant, an Account. Each Account shall be credited with the amount of Stock Units described in Section 3.2. Each Account of a Participant shall be maintained until the value thereof has been forfeited and/or paid to or on behalf of such Participant or his Beneficiary. (b) Nature of Contributions and Accounts. The Stock Units credited to a Participant's Account shall be represented solely by bookkeeping entries, and no moneys or other assets shall actually be set aside for such Participant. Except as provided in Article VI, all payments to a Participant under the Plan shall be made from the general assets of the Company. The Administrative Committee or the Board shall allocate the total liability to pay benefits under the Plan among the Participating Companies in such manner and amount as the Administrative Committee or the Board (as applicable) in its sole discretion deems appropriate. Any assets which may be acquired by a Participating Company in anticipation of its obligations under the Plan shall be part of the general assets of such Participating Company. A Participating Company's obligation to pay benefits under the Plan constitutes a mere promise of such Participating Company to pay such benefits, and a Participant or Beneficiary shall be and remain no more than an unsecured, general creditor of such Participating Company. 3.2 Benefit Amount. (a) Account Balance. A Participant's accrued benefit under the Plan at any time shall be equal to the value of his Account balance; provided, as described in Section 3.3 and Article IV, only the portion of a Participant's Account balance that is vested shall be payable to him. (b) Amount Credited. For each Plan Year, each active Participant shall have credited to his Account an amount equal to the difference between: (i) the value of the shares of Company Stock that would have been allocated to his account under the ESOP as a result of Company contributions (exclusive of forfeitures) actually made to the ESOP for such Plan Year, if the maximum dollar limit applied to the definition of "compensation" under the ESOP was $1 million rather than the Section 401(a)(17) Limitation; and (ii) the value of the shares of Company Stock actually allocated to his account under the ESOP for such Plan Year as a result of Company contributions actually made to the ESOP for such Plan Year; provided, the value of the shares of Company Stock to be credited to a Participant's Account under this section for a Plan Year, when aggregated with the value of Company Stock and other assets allocated to the Participant's account under the ESOP for such Plan Year as a result of (i) Company contributions actually made to the ESOP for such Plan Year and (ii) forfeitures allocated for such Plan Year, may not exceed the dollar or percentage limits established for annual additions under Code Section 415 (that is, for 1994, $30,000 or 25 percent of Form W-2 compensation) and, to the extent such maximum limit would be exceeded, the amount otherwise to be credited to a Participant's Account hereunder shall be reduced. (c) Crediting of Stock Units. The amount determined pursuant to subsection (b) hereof for a Participant for a Plan Year shall be credited to his Account as of the March 1 immediately succeeding such Plan Year and shall be expressed in terms of whole and fractional Stock Units. The number of Stock Units credited to a Participant's Account for a Plan Year shall be determined by dividing (i) the amount determined for him in subsection (b) hereof for such Plan Year, by (ii) the per share fair market value of Company Stock on the Allocation Date for such Plan Year. (d) Cash Dividends. For Stock Units that have been credited to a Participant's Account on or before a record date for Company Stock cash dividends and that remain credited to his Account through the corresponding dividend payment date, the Administrative Committee shall credit to such Participant's Account a dollar amount equal to the amount of cash dividends that would have been paid on his Stock Units if each Stock Unit constituted one share of Company Stock. Such dollar amount then will be converted into a number of Stock Units equal to the number of full and fractional shares of Company Stock that could have been purchased, at fair market value on the dividend payment date, with such dollar amount. (e) Adjustments for Stock Dividends and Splits. In the event of any subdivision or combination of the outstanding shares of Company Stock, by reclassification, stock split, reverse stock split or otherwise, or in the event of the payment of a stock dividend on Company Stock, or in the event of any other increase or decrease in the number of outstanding shares of Company Stock, other than the issuance of shares for value received by the Company or the redemption of shares for value, the number of Stock Units credited to a Participant's Account shall be adjusted upward or downward, as the case may be, to reflect the subdivision or combination of the outstanding shares. The amount of increase or decrease in the number of Stock Units in such event will be equal to the adjustment that would have been made if each Stock Unit credited to a Participant's Account immediately prior to the event constituted one share of Company Stock. (f) Value of Account. The value of a Participant's Account as of any date shall be equal to the product of (i) the number of Stock Units credited to his Account as of such date (as determined in accordance with the preceding subsections), and (ii) the per share fair market value of Company Stock on such date. (g) Value of Company Stock. (i) For all purposes under the Plan for which the value of Company Stock must be determined as of any particular date as of which Company Stock is trading on the New York Stock Exchange, the fair market value per share of Company Stock on such date shall be the closing price of Company Stock on the New York Stock Exchange on such date. If, for any reason, the fair market value per share of Company Stock cannot be ascertained or is unavailable for a particular date, the fair market value of Company Stock on such date shall be determined as of the nearest preceding date on which the fair market value can be ascertained pursuant to the terms hereof. (ii) For all purposes under the Plan for which the value of Company Stock must be determined as of any particular date on which Company Stock is not trading on the New York Stock Exchange but on which Company Stock is trading on another national securities exchange in the United States, the fair market value per share of Company Stock shall be the closing price of the Company Stock on such national securities exchange on such date. If Company Stock is trading on such other national securities exchange in the United States on such date but no sales of shares of Company Stock occurred thereon, the fair market value per share of Company Stock shall be the closing price of the Stock on the nearest preceding date. If on any particular date a public market shall exist for Company Stock but Company Stock is not trading on a national securities exchange in the United States, then, if Company Stock is listed on the National Market List by the National Association of Securities Dealers, Inc. (the "NASD"), the fair market value per share of Company Stock shall be the last sale price for such shares reflected on said market list for such date, and if Company Stock is not listed on the National Market List of the NASD, then the fair market value per share of Company Stock shall be the mean between the bid and asked quotations in the over-the-counter market for such shares on such date. If there is no bid and asked quotation for Company Stock on such date, the fair market value per share of Company Stock shall be the mean between the bid and asked quotations in the over-the-counter market for such shares on the nearest preceding date. If the fair market value per share of Company Stock cannot otherwise be determined under this section as of a particular date, such value shall be determined by the Administrative Committee, in its sole discretion, based on all relevant available facts. 3.3 Vesting. Stock Units credited to a Participant's Account shall vest in accordance with the same vesting schedule and service, and/or based on the same events, as provided in the ESOP. 3.4 Notice to Participants of Account Balances. At least once for each Plan Year, the Administrative Committee shall cause a written statement of a Participant's Account balance to be distributed to the Participant. 3.5 Good Faith Valuation Binding. In determining the value of the Accounts, the Administrative Committee shall exercise its best judgment, and all such determinations of value (in the absence of bad faith) shall be binding upon all Participants and their Beneficiaries. 3.6 Errors and Omissions in Accounts. If an error or omission is discovered in the Account of a Participant or in the amount credited to a Participant's Account, the Administrative Committee, in its sole discretion, shall cause appropriate, equitable adjustments to be made as soon as administratively practicable following the discovery of such error or omission. ARTICLE IV PAYMENT OF ACCOUNT BALANCES 4.1 Benefit Payments. (a) General Rule Concerning Benefit Payments. In accordance with the terms of subsection (b) hereof, if a Participant's employment, with the Company, all other members of the Controlled Group and any other company that the Administrative Committee designates for purposes of the Plan as an affiliate of the Company, terminates for any reason including his death, he (or the Beneficiary or Beneficiaries designated by such Participant in his latest beneficiary designation form filed with the Administrative Committee) shall be entitled to receive a distribution of the value of the vested number of Stock Units credited to the Participant's Account, determined as of the last day of the calendar quarter immediately preceding the date payment of such distribution is to be made. For purposes of this subsection, the "date payment of such distribution is to be made" refers to the date established for such purpose by administrative practice, even if actual payment is made at a later date due to delays in valuation, administration or any other procedure. (b) Timing of Distribution. (1) If a Participant's employment terminates (i) on account of retirement on or after he attains age 65, or (ii) on account of his Disability or death during a Plan Year and prior to October 1 of that Plan Year, the vested benefit payable to him or his Beneficiary or Beneficiaries under this Section shall be distributed as soon as administratively feasible after the date his employment so terminates. (2) If a Participant's employment terminates on account of his Disability or death during a Plan Year and after September 30 of that Plan Year, the vested benefit payable to him or his Beneficiary or Beneficiaries under this Section shall be distributed as soon as administratively feasible after December 31 of that Plan Year. (3) If a Participant's employment terminates for any reason other than the reasons specified in the preceding paragraphs, the vested benefit payable to him (or his Beneficiary or Beneficiaries, if he dies after such termination of employment but before distribution of his Account) under this Section shall be distributed as soon as administratively feasible after the last day of the second calendar quarter following the calendar quarter in which his employment so terminates. 4.2 Form of Distribution. The benefit payable to a Participant (or his Beneficiary or Beneficiaries) under Section 4.1 shall be paid in a single payment in the form of a number of shares of Company Stock equal to the whole number of Stock Units credited to his Account, with any fractional Stock Unit being paid, at its fair market value as if it were a fractional share of Company Stock, in a single-sum, cash payment. 4.3 Beneficiary Designation. (a) General. Participants shall designate and from time to time may redesignate their Beneficiaries in such form and manner as the Administrative Committee may determine. (b) No Designation or Designee Dead or Missing. In the event that: (1) a Participant dies without designating a Beneficiary; (2) the Beneficiary designated by a Participant is not surviving when a payment is to be made to such person under the Plan, and no contingent Beneficiary has been designated; or (3) the Beneficiary designated by a Participant cannot be located by the Administrative Committee within 1 year from the date benefits are to be paid to such person; then, in any of such events, the Beneficiary of such Participant with respect to any benefits that remain payable under the Plan shall be the Participant's Surviving Spouse, if any, and if not, the estate of the Participant. 4.4 Taxes. If the whole or any part of any Participant's or Beneficiary's benefit hereunder shall become subject to any estate, inheritance, income or other tax which the Company (or its agent) shall be required to pay or withhold, the Company (or its agent, as applicable) shall have the full power and authority (i) to withhold and pay such tax out of any monies or other property in its hand for the account of the Participant or Beneficiary whose interests hereunder are so affected and/or (ii) to require the Participant or Beneficiary to pay to the Company (or its agent, as applicable), in cash or cash equivalent, the amount of any such tax. Prior to making any payment, the Company (or its agent, as applicable) may require such releases or other documents from any lawful taxing authority as it shall deem necessary. ARTICLE V CLAIMS 5.1 Claims. (a) Initial Claim. Claims for benefits under the Plan may be filed in writing with the Administrative Committee on forms or in such other written documents, as the Administrative Committee may prescribe. The Administrative Committee shall furnish to the claimant written notice of the disposition of a claim within 90 days after the application therefor is filed. In the event the claim is denied, the notice of the disposition of the claim shall provide the specific reasons for the denial, citations of the pertinent provisions of the Plan, and, where appropriate, an explanation as to how the claimant can perfect the claim and/or submit the claim for review. (b) Appeal. Any Participant or Beneficiary who has been denied a benefit shall be entitled, upon request to the Administrative Committee, to appeal the denial of his claim. The claimant (or his duly authorized representative) may review pertinent documents related to the Plan and in the Administrative Committee's possession in order to prepare the appeal. The request for review, together with written statement of the claimant's position, must be filed with the Administrative Committee no later than 60 days after receipt of the written notification of denial of a claim provided for in subsection (a). The Administrative Committee's decision shall be made within 60 days following the filing of the request for review. If unfavorable, the notice of the decision shall explain the reasons for denial and indicate the provisions of the Plan or other documents used to arrive at the decision. (c) Satisfaction of Claims. Any payment to a Participant or Beneficiary shall to the extent thereof be in full satisfaction of all claims hereunder against the Administrative Committee and the Company, any of whom may require such Participant or Beneficiary, as a condition to such payment, to execute a receipt and release therefor in such form as shall be determined by the Administrative Committee or the Company. If receipt and release is required but the Participant or Beneficiary (as applicable) does not provide such receipt and release in a timely enough manner to permit a timely distribution in accordance with the general timing of distribution provisions in the Plan, the payment of any affected distribution may be delayed until the Administrative Committee or the Company receive a proper receipt and release. ARTICLE VI SOURCE OF FUNDS; TRUST 6.1 Source of Funds. Except as provided in this Section and Section 6.2, each Participating Company shall provide the benefits described in the Plan from the general assets of such Participating Company. In any event, each Participating Company ultimately shall have the obligation to pay all benefits due to Participants and Beneficiaries under the Plan to the extent liability therefor has been allocated hereunder to such Participating Company. A Participating Company may, but shall not be required to, establish a Trust and may pay over funds from time to time to such Trust (as described in Section 6.2), and, to the extent that funds in such Trust allocable to the benefits payable under the Plan by such Participating Company are sufficient, the Trust assets shall be used to pay such benefits. If such Trust assets are not sufficient to pay all such benefits due under the Plan, then such Participating Company shall have the obligation, and the Participant or Beneficiary, who is due such benefits, shall look to such Participating Company to provide such benefits. The Administrative Committee or the Board shall allocate the total liability to pay benefits under the Plan among the Participating Companies in such manner and amount as the Administrative Committee or the Board (as applicable) in its sole discretion deems appropriate. 6.2 Trust. A Participating Company may transfer all or any portion of the funds necessary to fund benefits accrued hereunder to the Trustee to be held and administered by the Trustee pursuant to the terms of the Trust Agreement. Each transfer into the Trust Fund shall be irrevocable as long as such Participating Company has any liability or obligations under the Plan to pay benefits, such that the Trust property is in no way subject to use by such Participating Company; provided, it is the intent of such Participating Company that the assets held by the Trust are and shall remain at all times subject to the claims of the general creditors of such Participating Company. No Participant or Beneficiary shall have any interest in the assets held by the Trust or in the general assets of any Participating Company other than as a general, unsecured creditor. Accordingly, no Participating Company shall grant a security interest in the assets held by the Trust in favor of the Participants, Beneficiaries or any creditor. ARTICLE VII ADMINISTRATIVE COMMITTEE 7.1 Action. Action of the Administrative Committee may be taken with or without a meeting of committee members; provided, action shall be taken only upon the vote or other affirmative expression of a majority of the committee members qualified to vote with respect to such action. If a member of the committee is a Participant or Beneficiary, he shall not participate in any decision which solely affects his own benefit under the Plan. For purposes of administering the Plan, the Administrative Committee shall choose a secretary who shall keep minutes of the committee's proceedings and all records and documents pertaining to the administration of the Plan. The secretary may execute any certificate or any other written direction on behalf of the Administrative Committee. 7.2 Rights and Duties. The Administrative Committee shall administer the Plan and shall have all powers necessary to accomplish that purpose, including (but not limited to) the following: (a) To construe, interpret and administer the Plan; (b) To make determinations required by the Plan, and to maintain records regarding Participants' and Beneficiaries' benefits hereunder; (c) To compute and certify to the Company the amount and kinds of benefits payable to Participants and Beneficiaries, and to determine the time and manner in which such benefits are to be paid; (d) To authorize all disbursements by the Company pursuant to the Plan; (e) To maintain all the necessary records of the administration of the Plan; (f) To make and publish such rules for the regulation of the Plan as are not inconsistent with the terms hereof; (g) To delegate to other individuals or entities from time to time the performance of any of its duties or responsibilities hereunder; (h) To hire agents, accountants, actuaries, consultants and legal counsel to assist in operating and administering the Plan. The Administrative Committee shall have the exclusive right to construe and interpret the Plan, to decide all questions of eligibility for benefits and to determine the amount of such benefits, and its decisions on such matters shall be final and conclusive on all parties. 7.3 Compensation, Indemnity and Liability. The Administrative Committee and its members shall serve as such without bond and without compensation for services hereunder. All expenses of the Administrative Committee shall be paid by the Company. No member of the committee shall be liable for any act or omission of any other member of the committee, nor for any act or omission on his own part, excepting his own willful misconduct. The Company shall indemnify and hold harmless the Administrative Committee and each member thereof against any and all expenses and liabilities, including reasonable legal fees and expenses, arising out of his membership on the committee, excepting only expenses and liabilities arising out of his own willful misconduct. ARTICLE VIII AMENDMENT AND TERMINATION 8.1 Amendments. The Controlling Company, through action of the Board or the Administrative Committee, shall have the right, in its sole discretion, to amend the Plan in whole or in part at any time and from time to time; provided, the Administrative Committee may not amend the Plan to increase the level of benefits hereunder without Board approval; and, provided further, Section 3.2 (relating to the amount of benefits to be accrued under the Plan) may not be amended more frequently than once every 6 months other than to comport with changes in the Code or ERISA, or rules thereunder. Any amendment shall be in writing and executed by a duly authorized officer of the Controlling Company or a member of the Administrative Committee. An amendment to the Plan may modify its terms in any respect whatsoever, and may include, without limitation, a permanent or temporary freezing of the Plan such that the Plan shall remain in effect with respect to existing Account balances without permitting any new contributions; provided, no such action may reduce the amount already credited to a Participant's Account without the affected Participant's written consent. All Participants and Beneficiaries shall be bound by such amendment. 8.2 Termination of Plan. The Controlling Company expects to continue the Plan but reserves the right to discontinue and terminate the Plan at any time, for any reason. Any action to terminate the Plan shall be taken by the Board in the form of a written Plan amendment executed by a duly authorized officer of the Controlling Company. If the Plan is terminated, each Participant shall become 100 percent vested in his Account which shall be distributed in a single payment of Company Stock and cash, in the manner prescribed in Section 4.2, as soon as practicable after the date the Plan is terminated. The amount of any such distribution shall be determined as of the date such termination distribution is to be processed. Such termination shall be binding on all Participants and Beneficiaries. ARTICLE IX MISCELLANEOUS 9.1 Taxation. It is the intention of the Company that the benefits payable hereunder shall not be deductible by the Company nor taxable for federal income tax purposes to Participants or Beneficiaries until such benefits are paid by the Company, or the Trust, as the case may be, to such Participants or Beneficiaries. When such benefits are so paid, it is the intention of the Company that they shall be deductible by the Company under Code Section 162. 9.2 No Employment Contract. Nothing herein contained is intended to be nor shall be construed as constituting a contract or other arrangement between the Company and any Participant to the effect that the Participant will be employed by the Company for any specific period of time. 9.3 Headings. The headings of the various articles and sections in the Plan are solely for convenience and shall not be relied upon in construing any provisions hereof. Any reference to a section shall refer to a section of the Plan unless specified otherwise. 9.4 Gender and Number. Use of any gender in the Plan will be deemed to include all genders when appropriate, and use of the singular number will be deemed to include the plural when appropriate, and vice versa in each instance. 9.5 Assignment of Benefits. The right of a Participant or his Beneficiary to receive payments under the Plan may not be anticipated, alienated, sold, assigned, transferred, pledged, encumbered, attached or garnished by creditors of such Participant or Beneficiary, except by will or by the laws of descent and distribution and then only to the extent permitted under the terms of the Plan. 9.6 Legally Incompetent. The Administrative Committee, in its sole discretion, may direct that payment be made to an incompetent or disabled person, whether because of minority or mental or physical disability, to the guardian of such person or to the person having custody of such person, without further liability on the part of the Company for the amount of such payment to the person on whose account such payment is made. 9.7 Governing Law. The Plan shall be construed, administered and governed in all respects in accordance with applicable federal law (including ERISA) and, to the extent not preempted by federal law, in accordance with the laws of the State of Georgia. If any provisions of this instrument shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective. IN WITNESS WHEREOF, the Controlling Company has caused the Plan to be executed by its duly authorized officer on the 15th day of March, 1995. THE HOME DEPOT, INC. By: /s/ Marshall L. Day Title: Senior Vice President-Finance EX-11 5 EXHIBIT 11 THE HOME DEPOT, INC. Computation of Primary and Fully Diluted Earnings Per Common and Common Equivalent Share
Fiscal Year Ended -------------------------------- 1-29-95 1-30-94 1-31-93 Primary - ------- Net earnings applicable to common and common equivalent shares $604,501 $457,401 $362,863 ======== ======== Tax affected interest expense, net of interest capitalized attributable to convertible subordinated notes 22,580 --------- $627,081 ========= Shares: Weighted average number of common and common equivalent shares assuming average market price for period 455,173 453,037 444,989 ======= ======= Additional shares assuming conversion of the notes 20,774 ------- 475,947 ======= Primary earnings per common and common equivalent share $ 1.32 $ 1.01 $ .82 ======== ======== ======== Fully Diluted Net earnings applicable to common and common equivalent shares $604,501 $457,401 $362,863 Tax effected interest expense attributable to convertible subordinated notes $ 22,580 $ 18,981 $ 898 -------- -------- -------- $627,081 $476,382 $363,761 ======== ======== ======== Shares: Weighted average number of common and common equivalent shares at the ending market price 455,717 453,037 445,197 Additional shares assuming conversion of the notes 20,774 20,774 5,208 ------- ------- ------- 476,491 473,811 450,405 ======= ======= ======= Fully diluted earnings per common & common equivalent share $ 1.32 $ 1.01 $ .81 ======== ========== ========= (1) Common equivalent shares represent shares granted under three stock option plans and an employee stock purchase plan. All periods have been adjusted to reflect the three-for-two and four-for-three stock split-ups effected in the form of a dividend in July 1992 and April 1993, respectively. (2) The Company's 4 % Convertible Subordinated Notes, issued in 1992, were common stock equivalents prior to the conversion in March, 1995. For fiscal year 1994, the 4 % Notes were dilutive and are assumed to be converted as of the beginning of the accounting period for purposes of calculating primary earnings per share. In fiscal year 1993, the 4 % Notes were dilutive but had no impact on earnings per share and therefore were excluded from the computation of primary earnings per share. The 4 % Notes were not dilutive for fiscal year 1992.
EX-13 6 EXHIBIT 13
TEN YEAR SELECTED FINANCIAL AND OPERATING HIGHLIGHTS 5 Year 10 Year Annual Annual Compound Compound Growth Rate Growth Rate 1994 1993 1992 1991 1990(1) Statement of Earnings Data Net sales 35.2% 40.0% $12,476,697 $9,238,763 $7,148,436 $5,136,674 $3,815,356 Net sales increase - % - - 35.0 29.2 39.2 34.6 38.3 Earnings before taxes 40.0 43.6 979,751 736,871 575,973 396,120 259,828 Net earnings 40.1 45.6 604,501 457,401 362,863 249,150 163,428 Net earnings increase - % - - 32.2 26.1 45.6 52.5 46.0 Net earnings per share ($) 32.8 36.2 1.32 1.01 .82 .60 .45 Net earnings per share increase - % - - 30.5 23.2 36.7 33.3 40.6 Weighted average number of shares 6.0 6.4 475,947 453,037 444,989 415,997 362,505 Gross margin - % to sales - - 27.9 27.7 27.6 28.1 27.9 Store selling and operating-% to sales - - 17.8 17.6 17.4 18.1 18.2 Pre-opening - % to sales - - .4 .4 .4 .3 .4 General and administrative - % to sales - - 1.8 2.0 2.1 2.3 2.4 Net interest(expense)income-% to sales - - (.1) .3 .4 .3 (.1) Earnings before taxes - % to sales - - 7.8 8.0 8.1 7.7 6.8 Net earnings - % to sales - - 4.8 5.0 5.1 4.8 4.3 Balance Sheet Data and Financial Ratios Total assets 38.9% 36.9% $ 5,778,041 $4,700,889 $3,931,790 $2,510,292 $1,639,503 Working capital 27.4 24.8 918,724 993,963 807,028 623,937 300,867 Merchandise inventories 35.6 35.5 1,749,312 1,293,477 939,824 662,257 509,022 Net property and equipment 45.9 46.3 3,397,237 2,370,904 1,607,984 1,254,774 878,730 Long-term debt 26.6 23.6 983,369 874,048 843,672 270,575 530,774 Stockholders' equity 46.4 45.6 3,442,223 2,814,100 2,304,081 1,691,212 683,402 Book value per share ($) 37.1 36.6 7.59 6.26 5.20 4.01 1.93 Long-term debt to equity - % - - 28.6 31.1 36.6 16.0 77.7 Current ratio - - 1.76:1 2.02:1 2.07:1 2.17:1 1.73:1 Inventory turnover - - 5.7x 5.9x 6.3x 6.1x 6.0x Return on average equity - % - - 19.3 17.9 18.1 18.5 27.6 Statement of Cash Flows Data Depreciation and amortization 43.8% 49.2% $ 129,609 $89,839 $ 69,536 $ 52,283 $ 34,358 Capital expenditures 42.9 37.4 1,220,180 900,452 437,278 432,198 400,205 Cash dividends per share ($) - - .15 .11 .08 .05 .04 Customer and Store Data Number of U.S. states 18.5% 16.7% 28 23 19 15 12 Number of Canadian provinces - - 3 - - - - Number of stores 23.6 27.1 340 264 214 174 145 Square footage at year-end 27.5 30.9 35,133 26,383 20,897 16,480 13,278 Change in square footage - % - - 33.2 26.3 26.8 24.1 27.4 Average square footage per store - - 103 100 98 95 92 Number of customer transactions 29.0 35.7 302,181 236,101 189,493 146,221 112,464 Average sale per transaction ($) 4.8 3.1 41.29 39.13 37.72 35.13 33.92 Number of employees 30.9 32.6 67,300 50,600 38,900 28,000 21,500 Other Data Average total company weekly sales 35.2% 40.0% $ 239,936 $ 177,669 $ 137,470 $ 98,782 $ 71,988 Weighted average weekly sales per operating store 9.3 8.2 802 764 724 633 566 Comparable store sales increase-% (2) - - 8 7 15 11 10 Weighted average sales per square foot ($) (2) 5.9 5.0 404 398 387 348 322 Advertising expense - % to sales - - .5 .5 .5 .7 .9 (1) Fiscal year 1990 consisted of 53 weeks, all other years reported consisted of 52 weeks. (2) Adjusted to reflect the first 52 weeks of the 53-week fiscal year in 1990.
Management's Discussion and Analysis of Results of Operations and Financial Condition The data below reflects selected sales data, the percentage relationship between sales and major categories in the Consolidated Statements of Earnings and the percentage change in the dollar amounts of each of the items.
Percentage Increase (Decrease) of Dollar Amounts --------------------------- Fiscal Year(1) ----------------------- 1994 1993 1994 1993 1992 vs. 1993 vs. 1992 ---------------------------------------------------------------------------- Selected Consolidated Statements of Earnings Data Net Sales 100.0% 100.0% 100.0% 35.0% 29.2% ---------------------------------------------------------------------------- Gross Profit 27.9 27.7 27.6 36.5 29.7 ---------------------------------------------------------------------------- Operating Expenses: Selling and Store Operating 17.8 17.6 17.4 36.4 30.5 Pre-Opening .4 .4 .4 39.4 36.6 General and Administrative 1.8 2.0 2.1 24.6 25.8 ---------------------------------------------------------------------------- Total Operating Expenses 20.0 20.0 19.9 35.3 30.1 ---------------------------------------------------------------------------- Operating Income 7.9 7.7 7.7 39.7 28.6 Interest Income (Expense): Interest and Investment Income .2 .6 1.0 (53.2) (9.9) Interest Expense (.3) (.3) (.6) 17.0 (25.1) --------------------------------------------------------------------------- Interest, Net (.1) .3 .4 (124.7) 13.7 --------------------------------------------------------------------------- Earnings Before Income Taxes 7.8 8.0 8.1 33.0 27.9 Income Taxes 3.0 3.0 3.0 34.3 31.1 --------------------------------------------------------------------------- Net Earnings 4.8% 5.0% 5.1% 32.2% 26.1% =========================================================================== Selected Consolidated Sales Data Number of Customer Transactions 302,181,000 236,101,000 189,493,000 28.0% 24.6% Average Amount of Sale Per Transaction $ 41.29 $ 39.13 $ 37.72 5.5 3.7 Weighted Average Weekly Sales Per Operating Store $802,000 $764,000 $724,000 5.0 5.5 Weighted Average Sales Per Square Foot $ 404.04 $ 398.18 $ 386.92 1.5 2.9 ============================================================================ (1) Fiscal years 1994, 1993 and 1992 refer to the fiscal years ended January 29, 1995, January 30, 1994 and January 31, 1993, respectively.
Results of Operations For an understanding of the significant factors that influenced the Company's performance during the past three fiscal years, the following discussion should be read in conjunction with the consolidated financial statements appearing elsewhere in this annual report. Fiscal Year Ended January 29, 1995 Compared to January 30, 1994 Sales for fiscal year 1994 increased 35.0% from $9,238,763,000 in fiscal 1993 to $12,476,697,000. This increase was attributable to, among other things, 69 new store openings, nine store relocations, the acquisition of a 75% partnership interest in seven Canadian stores then known as Aikenhead's Home Improvement Warehouse, an 8% comparable store-for-store sales increase and full year sales from the 50 new store openings during fiscal 1993. The percentage increase in comparable store sales would have been 9% after excluding all sales from the ten stores in Southern Florida that were significantly affected by Hurricane Andrew during 1993. Gross profit as a percent of sales was 27.9% for fiscal 1994 compared to 27.7% for fiscal 1993. This higher gross profit percentage resulted primarily from changes in merchandise mix including more decor products and upgraded seasonal merchandise at higher margins, as well as decreased sales penetrations in lumber which carries lower margins. Operating expenses as a percent of sales were 20.0% for both fiscal 1994 and fiscal 1993. Selling and store operating expenses as a percent of sales increased to 17.8% in fiscal 1994 compared to 17.6% in fiscal 1993. This increase was attributable to, among other things, additional costs associated with nine store relocations during fiscal 1994 compared to six store relocations during fiscal 1993. The increase in selling and store operating expenses as a percent of sales was offset by lower general and administrative expenses as a percent of sales due to cost control measures and economies from higher sales volumes. Interest and investment income as a percent of sales decreased to 0.2% in fiscal 1994 compared to 0.6% during fiscal 1993. This decrease was attributable to a reduction of investment principal due to utilization of funds for capital expansion, as well as lower yields due to shorter maturities on the investment portfolio. Interest expense as a percent of sales was 0.3% for both fiscal 1994 and fiscal 1993. Higher interest expense from additional capital leases was partially offset by higher capitalized interest resulting from constructing more owned stores than in the previous year. The Company's combined Federal and state effective income tax rate was 38.3% for fiscal 1994 compared to 38.2% for fiscal 1993, before cumulative effect of change in accounting principle. This increase was attributable to lower tax-advantaged investments. The Company implemented SFAS 109 "Accounting for Income Taxes" during fiscal 1993 which reduced the combined Federal and state effective income tax rate to 37.9% in fiscal 1993. Net earnings as a percent of sales was 4.8% for fiscal 1994 compared to 5.0% for fiscal 1993, reflecting lower interest income and a higher effective income tax rate, partially offset by higher gross profits, as described above. Earnings per share was $1.32 for fiscal 1994 compared to $1.01 during fiscal 1993. Fiscal Year Ended January 30, 1994 Compared to January 31, 1993 Sales for fiscal year 1993 increased 29.2% from $7,148,436,000 in fiscal 1992 to $9,238,763,000. This increase was attributable to, among other things, 50 new store openings, six store relocations, a 7% comparable store-for-store sales increase and full year sales from the 40 store openings during fiscal 1992. The percentage increase in comparable store sales would have been 8% after excluding all sales from the ten stores in Southern Florida that were significantly affected by Hurricane Andrew. Gross profit as a percent of sales was 27.7% for fiscal 1993 compared to 27.6% for fiscal 1992. This higher gross profit percentage resulted primarily from higher vendor volume rebates and changes in merchandise mix, partially offset by lower margins in highly competitive markets. Operating expenses as a percent of sales increased to 20.0% in fiscal 1993 from 19.9% in fiscal 1992. This increase was attributable to, among other things, higher payroll costs as a percent of sales due to the implementation of new labor standards that put additional sales hours on the selling floor, partially offset by lower self-funded insurance reserves and lower general and administrative expenses as a percent of sales due to cost control measures. Interest income as a percent of sales decreased to 0.6% in fiscal 1993 compared to 1.0% during fiscal 1992. This decrease was attributable to a reduction of investment principal due to utilization of funds for capital expansion, partially offset by a higher yield on the investment portfolio. Interest expense as a percent of sales decreased to 0.3% in fiscal 1993 from 0.6% in fiscal 1992 due to the call for redemption and conversion to equity of substantially all the Company's 6% Convertible Subordinated Notes in June, 1992 and due to higher capitalized interest. The Company's combined Federal and state effective income tax rate, before cumulative effect of a change in accounting principle, was 38.2% for fiscal 1993 compared to 37.0% for fiscal 1992. This increase was attributable to the enactment of the Omnibus Budget Reconciliation Act of 1993 and to lower tax-advantaged investments. The Company implemented SFAS 109 "Accounting for Income Taxes" in the first quarter of fiscal 1993. As a result of this change in accounting principle, the combined Federal and state effective income tax rate was 37.9% in 1993. Net earnings as a percent of sales was 5.0% for fiscal 1993 compared to 5.1% for fiscal 1992, reflecting higher operating expenses, lower net interest income and a higher effective income tax rate, partially offset by higher gross profits, as described above. Earnings per share was $1.01 for fiscal 1993 compared to $.82 for fiscal 1992 on 2% more weighted average shares outstanding in fiscal 1993. Liquidity and Capital Resources Cash flow generated from store operations provides the Company with a significant source of liquidity. Additionally, a significant portion of the Company's inventory is financed under vendor credit terms. The Company plans to open approximately 91 new stores and relocate nine existing stores during fiscal 1995. Of these 100 locations, it is anticipated that approximately 90% will be owned and the balance will be leased. The Company also plans to open approximately 122 stores, including relocations, in fiscal 1996. Although some of these locations may be newly leased, it is expected that most will be obtained during fiscal 1995 through the purchase of pre-existing leasehold interests, the acquisition of land parcels and the construction or purchase of buildings. While the cost of new stores to be constructed and owned by the Company varies widely, principally due to land costs, new store costs are currently estimated to average approximately $12,600,000 per location. In addition, the Company may purchase leasehold interests at varying amounts depending on the value of such properties. The cost to remodel and fixture stores to be leased is expected to average approximately $4,000,000 per store. Each new store will require approximately $3,100,000 to finance inventories, net of vendor financing. During fiscal 1994, the Company initiated a commercial paper program which will provide short-term funding needs up to a maximum of $300,000,000 of which $100,000,000 was outstanding as of January 29, 1995. In connection with the program, the Company entered into a back-up credit facility with a consortium of banks for up to $300,000,000. The facility expires November 1, 1997. The facility contains various restrictive covenants, none of which is expected to impact the Company's liquidity or capital resources. On February 28, 1995, the Company announced its decision to redeem on March 31, 1995, all of its outstanding 41_2% Convertible Subordinated Notes due February 15, 1997 at a redemption price of $1,016.75 (which includes premium and accrued interest) per $1,000 principal amount of Notes. The Notes are convertible into common stock of the Company at the rate of one share for each $38.75 principal amount of Notes owned. In light of current market prices of the Company's common stock, it is expected that the redemption call will result in the conversion of substantially all of the outstanding principal ($804,985,000) to equity and, thereby, result in the issuance of approximately 20,774,000 additional shares of common stock. As of January 29, 1995, the Company had $57,866,000 in cash and cash equivalents and short-term investments as well as $98,022,000 in long-term investments. Management believes that its current cash position, the proceeds from short-term and long-term investments, internally generated funds, its commercial paper program, and/or the ability to obtain alternate sources of financing should enable the Company to complete its capital expenditure programs, including store expansion and renovation, through the next several fiscal years. Impact of Inflation and Changing Prices Although the Company cannot accurately determine the precise effect of inflation on its operations, it does not believe inflation has had a material effect on sales or results of operations.
Consolidated Statements of Earnings The Home Depot, Inc. and Subsidiaries Amounts in thousands, except per share data Fiscal Year Ended January 29, January 30, January 31, 1995 1994 1993 Net Sales $12,476,697 $9,238,763 $7,148,436 Cost of Merchandise Sold 8,991,204 6,685,384 5,179,368 Gross Profit 3,485,493 2,553,379 1,969,068 Operating Expenses: Selling and Store Operating 2,216,540 1,624,920 1,245,608 Pre-Opening 51,307 36,816 26,959 General and Administrative 230,456 184,954 147,080 Total Operating Expenses 2,498,303 1,846,690 1,419,647 Operating Income 987,190 706,689 549,421 Interest Income (Expense): Interest and Investment Income 28,510 60,896 67,562 Interest Expense (note 2) (35,949) (30,714) (41,010) Interest, Net (7,439) 30,182 26,552 Earnings Before Income Taxes 979,751 736,871 575,973 Income Taxes (note 3) 375,250 279,470 213,110 Net Earnings $ 604,501 $ 457,401 $ 362,863 =========================================== Earnings Per Common and Common Equivalent Share $ 1.32 $ 1.01 $ .82 =========================================== Weighted Average Number of Common and Common Equivalent Shares 475,947 453,037 444,989 ============================================== See accompanying notes to consolidated financial statements.
Consolidated Balance Sheets Amounts in thousands, except per share data January 29, January 30, 1995 1994 ------------------------------- Assets Current Assets: Cash and Cash Equivalents $ 1,154 $ 99,997 Short-Term Investments, including current maturities of long-term investments (note 7) 56,712 330,976 Receivables, Net 272,225 198,431 Merchandise Inventories 1,749,312 1,293,477 Other Current Assets 53,560 43,720 ------------------------------- Total Current Assets 2,132,963 1,966,601 ------------------------------- Property and Equipment, at cost: Land 1,167,063 814,440 Buildings 1,311,806 891,755 Furniture, Fixtures and Equipment 634,173 451,789 Leasehold Improvements 273,015 224,933 Construction in Progress 289,157 194,482 Capital Leases (notes 2 and 5) 72,054 41,029 ------------------------------- 3,747,268 2,618,428 Less Accumulated Depreciation and Amortization 350,031 247,524 ------------------------------- Net Property and Equipment 3,397,237 2,370,904 Long-Term Investments (note 7) 98,022 281,623 Notes Receivable 32,528 35,470 Cost in Excess of the Fair Value of Net Assets Acquired, net of accumulated amortization of $8,636 at January 29, 1995 and $5,788 at January 30, 1994 88,513 19,503 Other 28,778 26,788 =============================== $5,778,041 $4,700,889 Liabilities and Stockholders' Equity Current Liabilities: Accounts Payable $ 681,291 $ 521,246 Accrued Salaries and Related Expenses 192,151 167,489 Sales Taxes Payable 101,011 57,590 Other Accrued Expenses 208,377 183,933 Income Taxes Payable 8,717 40,303 Current Installments of Long-Term Debt (notes 2, 5 and 6) 22,692 2,077 -------------------------------- Total Current Liabilities 1,214,239 972,638 -------------------------------- Long-Term Debt, excluding current installments (notes 2, 5 and 6) 983,369 874,048 Other Long-Term Liabilities 67,953 12,276 Deferred Income Taxes (note 3) 19,258 27,827 Minority Interest (note 9) 50,999 - Stockholders' Equity (notes 2 and 4): Common Stock, par value $.05. Authorized: 1,000,000,000 shares; issued and outstanding - 453,365,000 shares at January 29, 1995 and 449,364,000 shares at January 30, 1994 22,668 22,468 Paid-in Capital 1,526,463 1,436,029 Retained Earnings 1,937,284 1,400,575 Cumulative Translation Adjustments (10,887) (121) Unrealized Loss on Investments, Net (1,495) - ------------------------------- 3,474,033 2,858,951 Less Notes Receivable From ESOP (note 6) 31,810 44,851 ------------------------------- Total Stockholders' Equity 3,442,223 2,814,100 ------------------------------- Commitments and Contingencies (notes 5, 8 and 9) $5,778,041 $4,700,889 =============================== See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Unrealized Total Common Stock Cumulative Loss on Notes Stock- ------------- Paid-in Retained Translation Investments, Receivable holders' Shares Amount Capital Earnings Adjustments Net from ESOP Equity - ----------------------------------------------------------------------------------------------------------------------------------- Balance, February 2, 1992 422,224 $21,111 $1,022,043 $ 666,471 $ - $ - $(18,413) $1,691,212 Shares Sold Under Employee Stock Purchase and Option Plans, Net of Retirements (note 4) 7,053 353 57,971 - - - - 58,324 Tax Effect of Sale of Option Shares by Employees - - 32,451 - - - - 32,451 Additional Notes Receivable from ESOP, Net of Repayments of $8,419 (note 6) - - - - - - (33,023) (33,023) Conversion of 6% Convertible Subordinated Notes, Net (note 2) 14,308 715 227,346 - - - - 228,061 Conversion of 4-1/2% Convertible Subordinated Notes, Net (note 2) - - 10 - - - - 10 Net Earnings - - - 362,863 - - - 362,863 Cash Dividends ($.08 per share) - - - (35,817) - - - (35,817) - ----------------------------------------------------------------------------------------------------------------------------------- Balance, January 31, 1993 443,585 $22,179 $1,339,821 $ 993,517 $ - $ - $(51,436) $2,304,081 =================================================================================================================================== Shares Sold Under Employee Stock Purchase and Option Plans, Net of Retirements (note 4) 5,779 289 76,500 - - - - 76,789 Tax Effect of Sale of Option Shares by Employees - - 19,708 - - - - 19,708 Cumulative Translation Adjustments - - - - (121) - - (121) Repayments of Notes Receivable from ESOP (note 6) - - - - - - 6,585 6,585 Net Earnings - - - 457,401 - - - 457,401 Cash Dividends ($.11 per share) - - - (50,343) - - - (50,343) - ----------------------------------------------------------------------------------------------------------------------------------- Balance, January 30, 1994 449,364 $22,468 $1,436,029 $1,400,575 $ (121) $ - $(44,851) $2,814,100 =================================================================================================================================== Shares Sold Under Employee Stock Purchase and Option Plans, Net of Retirements (note 4) 4,001 200 77,720 - - - - 77,920 Tax Effect of Sale of Option Shares by Employees - - 12,709 - - - - 12,709 Cumulative Translation Adjustments - - - - (10,766) - - (10,766) Repayments of Notes Receivable from ESOP (note 6) - - - - - - 13,041 13,041 Conversion of 4-1/2% Convertible Subordinated Notes, Net (note 2) - - 5 - - - - 5 Unrealized Loss on Investments, Net (note 7) - - - - - (1,495) - (1,495) Net Earnings - - - 604,501 - - - 604,501 Cash Dividends ($.15 per share) - - - (67,792) - - - (67,792) - ----------------------------------------------------------------------------------------------------------------------------------- Balance, January 29, 1995 453,365 $22,668 $1,526,463 $1,937,284 $(10,887) $(1,495) $(31,810) $3,442,223 =================================================================================================================================== See accompanying notes to consolidated financial statements.
Consolidated Statements of Cash Flows The Home Depot, Inc. and Subsidiaries Amounts in thousands Fiscal Year Ended - --------------------------------------------------------------------------------------------------------------------------- January 29, January 30, January 31, 1995 1994 1993 Cash Provided From Operations: Net Earnings $ 604,501 $ 457,401 $ 362,863 Reconciliation of Net Earnings to Net Cash Provided by Operations: Depreciation and Amortization 129,609 89,839 69,536 Deferred Income Tax (Benefit) Expense (2,468) 12,578 5,465 Increase in Receivables, Net (69,023) (36,658) (68,593) Increase in Merchandise Inventories (405,197) (353,653) (277,567) Increase in Accounts Payable and Accrued Expenses 280,056 200,977 219,046 (Decrease) Increase in Income Taxes Payable (11,126) 36,143 34,031 Other 8,161 (10,120) (6,639) - -------------------------------------------------------------------------------------------------------------------------- Net Cash Provided by Operations 534,513 396,507 338,142 - -------------------------------------------------------------------------------------------------------------------------- Cash Flows From Investing Activities: Capital Expenditures, Net of $31,183, $36,294 and $4,765 of non-cash capital expenditures in fiscal 1994, 1993 and 1992, respectively (1,100,654) (864,158) (432,513) Acquisition of Canadian Partnership Interest (161,548) - - Proceeds from Sale of Property and Equipment 49,718 35,070 5,046 Sale (Purchase) of Short-Term Investments, Net 96,007 14,903 (62,008) Purchase of Long-Term Investments (94,442) (840,361) (2,029,214) Proceeds from Maturities of Long-Term Investments 50,251 269,988 212,786 Proceeds from Sale of Long-Term Investments 403,738 929,598 1,132,627 Advances Secured by Real Estate, Net 2,650 5,681 (54,022) - --------------------------------------------------------------------------------------------------------------------------- Net Cash Used in Investing Activities (754,280) (449,279) (1,227,298) - --------------------------------------------------------------------------------------------------------------------------- Cash Flows From Financing Activities: Proceeds from Commercial Paper and Long-Term Borrowings 100,000 - 805,000 Cash Loaned to ESOP - - (41,442) Repayments of Notes Receivable from ESOP 13,041 6,585 8,419 Principal Repayments of Long-Term Debt (2,175) (2,006) (2,133) Proceeds from Sale of Common Stock, Net 77,926 76,789 58,324 Cash Dividends Paid to Stockholders (67,792) (50,343) (35,817) Effect of Exchange Rate Changes on Cash (76) - - - -------------------------------------------------------------------------------------------------------------------------- Net Cash Provided by Financing Activities 120,924 31,025 792,351 - -------------------------------------------------------------------------------------------------------------------------- Decrease in Cash and Cash Equivalents (98,843) (21,747) (96,805) Cash and Cash Equivalents at Beginning of Year 99,997 121,744 218,549 - -------------------------------------------------------------------------------------------------------------------------- Cash and Cash Equivalents at End of Year $ 1,154 $ 99,997 $ 121,744 ========================================================================================================================== Supplemental Disclosure of Cash Payments Made For: Interest (net of interest capitalized) $ 30,537 $ 28,778 $ 26,182 Income Taxes $ 393,915 $ 228,968 $ 169,617 =========================================================================================================================== See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements Note ONE Summary of Significant Accounting Policies Fiscal Year The Company's fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31. Fiscal years 1994, 1993 and 1992, which ended January 29, 1995, January 30, 1994 and January 31, 1993, respectively, consisted of 52 weeks. Basis of Presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. Minority interest represents the minority partner's share of the equity in The Home Depot Canada. All significant intercompany transactions have been eliminated in consolidation. Cash Equivalents The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Company's cash and cash equivalents are primarily cash equivalents carried at fair market value and consist of preferred stocks, commercial paper, money market funds and U.S. government agency securities. Investments Effective January 31, 1994, the Company adopted Statement of Financial Accounting Standards No. 115 (SFAS 115), "Accounting for Certain Investments in Debt and Equity Securities," which was effective for fiscal years beginning after December 15, 1993. The Company classifies its investments into one of three categories: trading, held to maturity, or available for sale. Trading securities, which are bought and held primarily for the purpose of selling them in the near term, are recorded at fair value with gains and losses included in earnings. Held to maturity securities, which are securities that the Company has the ability and the intent to hold until maturity, are recorded at amortized cost and adjusted for amortization or accretion of premiums or discounts. The Company's short-term and long-term investments, consisting primarily of debt securities, have been designated as being held available for sale, and accordingly, are reported at fair value. Unrealized gains and losses on securities classified as available for sale are reported as a separate component of stockholders' equity, net of income taxes until realized. The cost of investments sold is determined using the specific identification method. Estimated fair values of investments are based on quoted market prices on the last business day of the fiscal year. A decline in the market value of any available for sale or held to maturity security below cost that is deemed other than temporary is charged to earnings resulting in the establishment of a new cost basis for the security. In fiscal years 1993 and 1992, the Company valued its short-term investments, consisting primarily of debt securities, at amortized cost which approximated market. Certain long-term investments designated as available for sale were recorded at lower of amortized cost or market. The Company's remaining investments classified as held to maturity were valued at amortized cost. Merchandise Inventories Inventories are stated at the lower of cost (first-in, first-out) or market, as determined by the retail inventory method. Income Taxes The Company provides for Federal and state income taxes currently payable as well as for those deferred because of timing differences between reporting income and expenses for financial statement purposes and income and expenses for tax purposes. Targeted jobs tax credits are recorded as a reduction of income taxes in the year realized. Effective February 1, 1993, the Company adopted the provisions of Statement of Financial Accounting Standards No. 109 (SFAS 109), "Accounting for Income Taxes" and reported the cumulative effect of that change in the method of accounting for income taxes in the consolidated statement of earnings for the first fiscal quarter of 1993, which ended May 2, 1993. SFAS 109 requires an asset and liability approach in accounting for income taxes and, therefore, required a change from the deferred method the Company previously used. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to 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 tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. Pursuant to the deferred method under Accounting Principles Board Opinion 11, which was applied in fiscal 1992 and prior years, deferred income taxes that were reported in different years for financial reporting purposes and income tax purposes were recognized for income and expense items using the tax rate applicable for the year of the calculation. Under the deferred method, deferred taxes were not adjusted for subsequent changes in the tax rate. Depreciation and Amortization The Company's buildings, furniture, fixtures and equipment are depreciated using the straight-line method over the estimated useful lives of the assets. Improvements to leased premises are amortized on the straight-line method over the life of the lease or the useful life of the improvement, whichever is shorter. The Company's property and equipment is depreciated using the following estimated useful lives:
Life Buildings 10-45 years Furniture, fixtures and equipment 5-20 years Leasehold improvements 8-30 years
The cost of purchased software and associated consulting fees is amortized on a straight-line basis over periods ranging from three to five years. Store Pre-Opening Costs Non-capital expenditures associated with opening new stores are charged to expense as incurred. Store Closing Costs When a store is relocated or closed, estimated unrecoverable costs are charged to expense. Such costs include the estimated loss on sale of land and building, the book value of abandoned fixtures, equipment, leasehold improvements and a provision for the present value of future lease obligations, less estimated sub-rental income. Earnings Per Common and Common Equivalent Share Earnings per common and common equivalent share are based on the weighted average number of shares and equivalent shares outstanding. Common equivalent shares used in the calculation of earnings per share represent options to purchase shares granted under the Company's employee stock option and stock purchase plans and the Company's 4-1/2% Convertible Subordinated Notes due 1997, issued in 1992. For the 1994 fiscal year, the 4-1/2% Notes are dilutive and are assumed to be converted as of the beginning of the accounting period for purposes of calculating earnings per share. Earnings per share is calculated by dividing net earnings, adjusted for tax-effected net interest and issue costs on the 4-1/2% Notes, by weighted average common and common equivalent shares. The weighted average number of common and common equivalent shares include shares issuable under the Company's stock plans and the 20,774,000 shares issuable upon conversion of the 4-1/2% Notes. In fiscal year 1993, the 4-1/2% Notes were dilutive but had no impact on earnings per share. The Company's 6% Convertible Subordinated Notes, issued in 1990, were common stock equivalents prior to their conversion in 1992. Because shares issuable upon conversion of the 6% Notes were not dilutive in fiscal 1992, they were excluded from the earnings per share calculations. Cost in Excess of the Fair Value of Net Assets Acquired Goodwill, which represents the excess of purchase price over fair value of net assets acquired, is amortized on a straight-line basis over a 40-year period. The Company assesses the recoverability of this intangible asset by determining whether the amortization of the goodwill balance over its remaining useful life can be recovered through undiscounted future operating cash flows of the acquired operation. The amount of goodwill impairment, if any, is measured based on projected discounted future operating cash flows using a discount rate reflecting the Company's average cost of funds. Employee Stock Ownership Plan For all shares purchased by the Employee Stock Ownership Plan (ESOP) prior to December 31, 1992, the Company's contributions to the ESOP are determined based on the ESOP's cost of the shares released to the employees. For shares purchased after December 31, 1992, the Company's contributions to the ESOP will be determined based on the fair value of the shares released to the employees as of the release date. Foreign Currency Translation The local currency has been used as the functional currency in Canada. The assets and liabilities denominated in foreign currency are translated into U.S. dollars at the current rate of exchange existing at year-end and revenues and expenses are translated at the average monthly exchange rates. The translation gains and losses are included as a separate component of stockholders' equity. Transaction gains and losses included in income are immaterial. Recent Accounting Pronouncements In December 1993, the Accounting Institute of Certified Public Accountants issued Statement of Position 93-7, "Reporting on Advertising Costs" (SOP 93-7). Under SOP 93-7, certain advertising expenditures must be expensed either as incurred or the first time the advertising takes place. Certain production costs incurred by the Company are currently amortized over periods not exceeding one year. While the Company plans to adopt SOP 93-7 in fiscal 1995, it is not expected to have a significant impact on the Company's results of operations. In June 1993, Statement of Financial Accounting Standards No. 116, "Accounting for Contributions Received and Contributions Made" (SFAS 116) was issued. SFAS 116 requires companies that make contributions of cash and other assets, including unconditional promises to give, to not-for-profit organizations, to recognize expense in the accounting period made. Under SFAS 116, conditional promises to give should be recognized when the conditions on which they depend are substantially met. Results of operations for the Company will not be significantly impacted when SFAS 116 is adopted by the Company in fiscal 1995. Reclassifications Certain balances in prior fiscal years have been reclassified to conform with the presentation adopted in the current fiscal year. Note TWO Long-Term Debt
The Company's long-term debt consists of the following (in thousands): January 29, January 30, 1995 1994 4-1/2% Convertible Subordinated Notes, due February 15, 1997, convertible into shares of common stock of the Company at a conversion price of $38.75 per share. The Notes are redeemable by the Company at a premium, plus accrued interest, beginning March 3, 1995. $ 804,985 $804,990 Commercial Paper, with a weighted average interest rate of 5.9%. 100,000 - Capital Lease obligations payable in varying installments through January 31, 2015 (see note 5). 63,225 32,585 7.95% Unsecured Note, payable on September 1, 1995, incurred in connection with the establishment of a leveraged Employee Stock Ownership Plan and Trust (see Note 6); interest is payable semi-annually. 20,000 20,000 Variable Rate Industrial Revenue Bonds, secured by letters of credit or land, interest rates averaging 2.7% during fiscal 1994, payable in varying installments through 1999, $3,000 payable on December 1, 2010 and $5,200 payable on September 1, 2011. 9,966 10,500 Installment Notes Payable, interest imputed at rates between 9.5% and 11.5%, payable in varying installments through 2014. 7,419 7,592 Other 466 458 Total long-term debt 1,006,061 876,125 Less current installments 22,692 2,077 Long-term debt, excluding current installments $ 983,369 $ 874,048
On February 3, 1992, the Company issued, through a public offering, $805,000,000 of its 4-1/2% Convertible Subordinated Notes at par, maturing February 15, 1997. The Notes are convertible into shares of common stock at any time prior to maturity, unless previously redeemed, at a conversion price of $38.75 per share, subject to adjustment under certain conditions. The Notes are not subject to sinking fund provisions. On February 28, 1995, the Company announced that its outstanding 4-1/2% Convertible Subordinated Notes which had a face value of $804,985,000 would be redeemed on March 31, 1995, at a redemption price of $1,016.75 (which includes premium and accrued interest) per $1,000 principal amount of Notes. Noteholders have the right through March 21, 1995 to convert their Notes into approximately 25.81 shares of common stock of The Home Depot, Inc. for each $1,000 principal amount of Notes at the conversion price of $38.75 per share. Conversion of all the Notes would result in the issuance of approximately 20,774,000 shares of the Company's common stock. In January, 1995, the Company established a $300,000,000 Commercial Paper program supported by a back-up credit facility with a maximum aggregate principal amount outstanding of $300,000,000. The program expires November 1, 1997. The Commercial Paper borrowings are classified as long-term debt as it is the Company's intention to refinance them on a long-term basis. As of January 29, 1995, the Company was in compliance with all restrictive covenants. The 7.95% Unsecured Note related to the ESOP requires, among other things, that debt shall not exceed 66-2/3% of consolidated assets, net of goodwill and current liabilities. The Company was in compliance with all restrictive covenants as of January 29, 1995. The restrictive covenants related to letter of credit agreements securing the industrial revenue bonds are no more restrictive than those referenced or described above. Interest expense in the accompanying consolidated statements of earnings is net of interest capitalized of $17,559,000 in fiscal 1994, $13,912,000 in fiscal 1993 and $7,549,000 in fiscal 1992. Maturities of long-term debt (excluding the 4-1/2% Convertible Subordinated Notes) are $22,692,000 for fiscal 1995, $3,197,000 for fiscal 1996, $102,706,000 for fiscal 1997, $2,594,000 for fiscal 1998, and $2,805,000 for fiscal 1999. Based on discounted cash flows of future payment streams, assuming rates equivalent to the Company's current incremental borrowing rate on similar liabilities, the fair value of the 7.95% unsecured ESOP Note, the Variable Rate Industrial Revenue Bonds, the Installment Notes, the Capital Leases, the Commercial Paper, and other notes payable as of January 29, 1995 is $231,649,000. The fair value of the 4-1/2% Convertible Subordinated Notes as of January 29, 1995, based on the quoted market price on the last business day of the year, is $986,107,000. Note THREE Income Taxes As discussed in Note 1, the Company adopted SFAS 109 as of February 1, 1993. The cumulative effect of this change in accounting for income taxes, which resulted in a tax benefit of $2,130,000, was determined as of February 1, 1993 and has been reflected in the consolidated statement of earnings for the fiscal year ended January 30, 1994. Prior years' financial statements have not been restated to apply the provisions of SFAS 109. The provision for income taxes from operations consists of the following (in thousands):
Fiscal Year Ended January 29, January 30, January 31, 1995 1994 1993 Current: Federal $330,232 $236,888 $181,727 State 47,486 32,134 25,918 - --------------------------------------------------------------------- 377,718 269,022 207,645 - --------------------------------------------------------------------- Deferred: Federal (1,875) 10,212 4,413 State (593) 2,366 1,052 - --------------------------------------------------------------------- (2,468) 12,578 5,465 - --------------------------------------------------------------------- Total $375,250 $281,600 $213,110
The Company's combined state and Federal effective tax rate from operations for fiscal years 1994, 1993 and 1992, net of offsets generated by targeted jobs tax credits, were approximately 38.3%, 38.2% and 37.0%, respectively. The 1994 and 1993 fiscal year effective tax rates include the effect of the corporate Federal tax rate increase from 34% to 35% enacted into law during the Company's 1993 fiscal year. A reconciliation of income tax expense from operations at the Federal statutory rate to actual tax expense from operations for the applicable fiscal years follows (in thousands):
Fiscal Year Ended January 29, January 30, January 31, 1995 1994 1993 Income taxes at Federal statutory rate $342,913 $257,905 $195,831 State income taxes, net of Federal income tax benefit 30,480 22,425 17,800 Other, net 1,857 1,270 (521) - ---------------------------------------------------------------------------- Total $375,250 $281,600 $213,110 - ----------------------------------------------------------------------------
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of January 29, 1995 and January 30, 1994 are as follows (in thousands):
January 29, January 30, 1995 1994 Deferred Tax Assets: Accrued self-insurance liabilities $ 40,906 $ 26,813 Other accrued liabilities 28,061 16,300 Net deferred tax assets 68,967 43,113 Deferred Tax Liabilities: Accelerated depreciation (77,061) (62,835) Other (11,164) (8,105) Total gross deferred liabilities (88,225) (70,940) Net deferred tax liability $(19,258) $(27,827)
No valuation allowance was recorded against the deferred tax assets at January 29, 1995, January 30, 1994, or February 1, 1993. The Company's management believes the existing net deductible temporary differences comprising the total gross deferred tax assets will reverse during periods in which the Company generates net taxable income. For fiscal years ending before January 31, 1993, deferred income taxes resulted from differences in the timing of reporting income and expenses for financial statement and income tax purposes. The sources of these differences and the tax effect of each for fiscal 1992 are as follows (in thousands):
Accelerated depreciation $12,245 Accrued self-insurance liabilities (9,132) Other accrued liabilities (574) Other, net 2,926 Total $ 5,465
Note FOUR Employee Stock Plans The Company has stock option plans that provide for the granting of incentive and non-qualified options to purchase the Company's common stock to selected key employees, officers and directors. Under the Employee Incentive Stock Option Plan of 1981, options for 43,360,692 shares, net of cancellations (of which 41,246,391 had been exercised), have been granted at $.16 to $18.83 per share as of January 29, 1995. Such options may be exercised at the rate of 25% per year commencing with the first anniversary date of the grant and expire after five years. The Plan expired on June 1, 1991 and the shares available for grant were carried over to the 1991 Omnibus Stock Option Plan. Under the Non-Qualified Stock Option Plan of 1984, options for 679,124 shares, net of cancellations (of which 529,232 had been exercised), have been granted at $1.53 to $9.86 per share as of January 29, 1995. Such options may be exercised at varying rates commencing on the third anniversary date of the grant and expire on the tenth anniversary date of the grant. The Plan expired on June 1, 1991 and the shares available for grant were carried over to the 1991 Omnibus Stock Option Plan. The provisions of the 1991 Omnibus Stock Option Plan, which became effective June 1, 1991, authorize a maximum number of shares available for grant equal to the cumulative number of shares available the previous year plus one percent of the number of shares of common stock issued and outstanding at the beginning of each fiscal year the plan is in effect. Under the 1991 Omnibus Stock Option Plan, options for 6,852,504 shares, net of cancellations (of which 426,102 had been exercised), have been granted at $24.50 to $48.94 per share. As of January 29, 1995, the maximum shares available under this plan for future grants were 30,408,417. The following summarizes shares outstanding under the plans at January 29, 1995, January 30, 1994 and January 31, 1993 and changes during the fiscal years then ended (in thousands of shares):
Fiscal Year Ended January 29, January 30, January 31, 1995 1994 1993 Number of option shares At beginning of year Outstanding 9,647 12,455 14,750 Exercisable 2,757 4,528 4,576 During the year Issued 1,981 1,831 3,549 Cancelled 306 332 415 Became exercisable 2,843 2,536 5,381 Exercised 2,631 4,307 5,429 At end of year Outstanding 8,691 9,647 12,455 Exercisable 2,969 2,757 4,528 Average price per share Outstanding at the end of year $30.57 $23.50 $14.89 Exercised during the year $10.66 $ 7.42 $ 4.99
In addition, the Company had 2,375,460 shares available for future grants under the Employee Stock Purchase Plan at January 29, 1995. This plan enables the Company to grant substantially all eligible employees options to purchase up to 17,137,500 shares of common stock, of which 14,762,040 shares have been exercised from inception of the plan, at a price equal to 85% of the stock's fair market value at the date of grant. Shares purchased may not exceed the lesser of 20% of the employee's annual compensation, as defined, or $25,000 of common stock at its fair market value (determined at the time such option is granted) for any one calendar year. Employees pay for the shares ratably over a period of one year (the purchase period) through payroll deductions, and cannot exercise their option to purchase any of the shares until the conclusion of the purchase period. In the event an employee elects not to exercise such options, the full amount withheld is refundable. During fiscal 1994, options for 1,420,463 shares were exercised at an average price of $34.72 per share. At January 29, 1995, 821,812 options were outstanding, net of cancellations, at an average price of $36.68 per share. Note FIVE Leases The Company leases certain retail locations, office space, warehouse and distribution space, equipment and vehicles. While the majority of the leases are operating leases, certain retail locations are leased under capital leases. As leases expire, it can be expected that in the normal course of business, leases will be renewed or replaced. Total rent expense, net of minor sublease income for the fiscal years ended January 29, 1995, January 30, 1994 and January 31, 1993 amounted to $164,381,000, $137,252,000 and $110,577,000, respectively. Real estate taxes, insurance, maintenance and operating expenses applicable to the leased property are obligations of the Company under the building leases. Certain of the store leases provide for contingent rentals based on percentages of sales in excess of specified minimums. Contingent rentals for fiscal years ended January 29, 1995, January 30, 1994 and January 31, 1993 were approximately $9,744,000, $8,370,000 and $6,855,000, respectively. The approximate future minimum lease payments under capital and operating leases at January 29, 1995, are as follows (in thousands):
Fiscal year Capital leases Operating leases 1995 $ 10,411 $ 184,801 1996 10,465 186,131 1997 10,486 176,534 1998 10,628 165,559 1999 10,780 161,801 Thereafter 157,452 1,902,130 210,222 $2,776,956 ========== Less: Imputed interest (146,997) Net present value of capital lease obligations 63,225 Less: Current installments (803) Long-term, excluding current installments $ 62,422 ==========
On the Consolidated Balance Sheet the long-term and short-term obligations for capital leases are included in Long-term Debt and Current Installments of Long-term Debt, respectively. The assets recorded at January 29, 1995 and January 30, 1994, net of amortization, in Net Property and Equipment amounted to $68,647,000 and $40,608,000, respectively. Note SIX Employee Benefit Plans During fiscal 1988, the Company established a leveraged Employee Stock Ownership Plan and Trust (ESOP) covering substantially all full-time employees. At January 29, 1995, the ESOP held a total of 7,558,551 shares of the Company's common stock in trust for plan participants. The ESOP purchased the shares in the open market with the proceeds of loans obtained from the Company during fiscal 1992, 1990 and 1989 totaling $81,442,000. Of that amount, the Company borrowed $20,000,000 during 1988 in a private placement (see note 2), which in turn was loaned to the ESOP for the purpose of purchasing the shares. The additional $61,442,000 loaned to the ESOP was funded by cash from operations of the Company. Outstanding loans totalling $31,810,000 to the ESOP are due and payable to the Company in varying amounts from 1995 through 2001. The Company's Board of Directors authorized loans to the ESOP up to $90,000,000. The Company may advance funds to the ESOP so that the ESOP may purchase up to an additional $8,558,000 of the Company's stock in the open market at prices the ESOP deems desirable. The Company's common stock purchased by the ESOP is held in a "suspense account" as collateral for amounts loaned by the Company. The Company makes annual contributions to the ESOP at the discretion of its Board of Directors which the plan trustee is required to use to make loan interest and principal payments to the Company. When the Company commits to make contributions to the ESOP, a portion of the common stock is released from the "suspense account" and allocated to participating employees. As of January 29, 1995, 5,296,862 shares had been allocated to participating employees, 433,295 shares were committed to be released, and 1,828,394 shares were held in suspense by the trustee. Any dividends on unallocated shares are used to service the ESOP's debt, to pay expenses of the ESOP, to purchase additional shares of the Company or to purchase other investments. The unpaid portion of the ESOP's obligation to the Company is recorded as a reduction of stockholders' equity. The Company's contributions to the ESOP were $12,500,000, $6,000,000 and $8,200,000 for the fiscal years 1994, 1993 and 1992, respectively. The Company adopted a non-qualified ESOP Restoration Plan in fiscal 1994. The primary purpose of the Plan is to provide certain employees deferred compensation that they would have received under the ESOP if not for the maximum compensation limits under the Internal Revenue Code of 1986, as amended. The Company plans to establish a "rabbi trust" to fund the benefits under the ESOP Restoration Plan. Compensation expense for 1994 related to this plan was not significant. Funds to be provided to the trust will primarily be used to purchase shares of the Company's common stock on the open market. Note SEVEN Investments The Company's investments are all classified as available for sale and consisted of the following at January 29, 1995 and January 30, 1994 (in thousands):
January 29, 1995 January 30, 1994 ------------------------------------------------ ------------------------------------------------- Gross Gross Gross Gross Amortized unrealized unrealized Fair Amortized unrealized unrealized Fair cost gains losses value cost gains losses value ------------------------------------------------- ------------------------------------------------- Tax exempt notes and bonds $ 95,079 $ - $1,431 $ 93,648 $104,996 $ 482 $ 12 $105,466 U.S. Treasury securities - - - - 61,286 449 18 61,717 U.S. government agency securities 13,000 - 296 12,704 74,940 157 200 74,897 Commercial paper - - - - 16,496 3 61 16,438 Certificates of deposit - - - - 30,000 - 189 29,811 Corporate obligations 13,900 - 139 13,761 209,903 2,479 211 212,171 Preferred stock 14,998 - 301 14,697 46,831 271 4 47,098 Corporate Asset- backed securities 6,415 - 127 6,288 61,288 389 320 61,357 Other 13,636 - - 13,636 6,859 35 - 6,894 - ----------------------------------------------------------------------------------------------------------------------------------- 157,028 - 2,294 154,734 612,599 4,265 1,015 615,849 - ----------------------------------------------------------------------------------------------------------------------------------- Short-term, including current maturities of long-term investments 57,345 - 633 56,712 330,976 2,322 774 332,524 Long-term investments 99,683 - 1,661 98,022 281,623 1,943 241 283,325 - ----------------------------------------------------------------------------------------------------------------------------------- Total $157,028 - $2,294 $154,734 $612,599 $4,265 $1,015 $615,849
Proceeds from sale of investments available for sale during the year ended January 29, 1995 were $526,696,000. Gross gains of $1,638,000 and gross losses of $1,251,000 were realized on those sales. Maturities of investment securities classified as available for sale were as follows at January 29, 1995 (in thousands):
Amortized Cost Fair Value Due within one year $ 52,842 $ 52,323 Due after one year through five years 99,683 98,022 Mortgage-backed securities not due at a single date 4,503 4,389 - ---------------------------------------------------------------------------- $157,028 $154,734 ===================================
Note EIGHT Commitments and Contingencies At January 29, 1995, the Company was contingently liable for approximately $131,896,000 under outstanding letters of credit issued in connection with purchase commitments. The Company has litigation arising from the normal course of business. In management's opinion this litigation will not materially affect the Company's consolidated results of operations. Note NINE Acquisition of Interest in Canadian Company Effective February 28, 1994, the Company entered into a partnership and, as a result, acquired 75 percent of Aikenhead's Home Improvement Warehouse which was operating seven warehouse-style home improvement stores in Toronto, London and Kitchener, Ontario, Canada. Subsequent to the acquisition, the partnership has opened five stores which include one store each in Edmonton and Calgary, Alberta and Toronto, Ontario, and two stores in Vancouver, British Columbia. At any time after the sixth anniversary of the purchase, the Company has the option to purchase, or the other partner has the right to cause the Company to purchase, the remaining 25 percent of the Canadian company. The option price is based on the lesser of fair market value or a value to be determined by an agreed-upon formula as of the option exercise date. The purchase price paid for the 75 percent interest in the Canadian company was approximately $161,548,000 and was accounted for by the purchase method of accounting. Accordingly, results of the partnership's operations have been included with those of the Company from the date of acquisition. The excess purchase price over the estimated fair value of the net assets as of the acquisition date of $66,800,000 has been recorded as goodwill and will be amortized over 40 years. Proforma results of operations did not have a significant impact on historical results of the Company and, therefore, are not presented. Note TEN Quarterly Financial Data (Unaudited) The following is a summary of the unaudited quarterly results of operations for the fiscal years ended January 29, 1995 and January 30, 1994 (in thousands, except per share data):
Net earnings Percent per common increase in and common comparable Gross Net equivalent Net sales store sales profit earnings share ------------------------------------------------------------------------------- Fiscal year ended January 29, 1995: First Quarter $ 2,872,129 7% $ 808,757 $139,734 $ .31 Second Quarter 3,287,036 6% 895,817 178,014 .39 Third Quarter 3,240,050 9% 880,568 140,774 .31 Fourth Quarter 3,077,482 8% 900,351 145,979 .32 ------------------------------------------------------------------------------------- $ 12,476,697 8% $ 3,485,493 $604,501 $1.32 ===================================================================================== Fiscal year ended January 30, 1994: First Quarter $ 2,180,218 7% $ 601,700 $106,799 $ .24 Second Quarter 2,453,756 9% 661,834 134,504 .30 Third Quarter 2,317,372 6% 626,186 103,418 .23 Fourth Quarter 2,287,417 6% 663,659 112,680 .25 ------------------------------------------------------------------------------------- $ 9,238,763 7% $ 2,553,379 $457,401 $1.01 =====================================================================================
Independent Auditors' Report The Board of Directors and Stockholders The Home Depot, Inc.: We have audited the accompanying consolidated balance sheets of The Home Depot, Inc. and subsidiaries as of January 29, 1995 and January 30, 1994, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the years in the three-year period ended January 29, 1995. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Home Depot, Inc. and subsidiaries as of January 29, 1995 and January 30, 1994, and the results of their operations and their cash flows for each of the years in the three-year period ended January 29, 1995 in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Atlanta, Georgia March 10, 1995 EX-21 7 EXHIBIT 21
Exhibit 21 List of Subsidiaries of the Registrant State or Jurisdiction of Name of Subsidiary Incorporation d/b/a ------------------ --------------- ----- Home Depot International, Inc. Delaware Home Depot U.S.A., Inc. Delaware The Home Depot Homer III, Inc. Delaware
Certain subsidiaries were omitted pursuant to Item 601(21)(ii) of Regulation S-K of the Securities Exchange Act of 1934. EX-23 8 EXHIBIT 23 Independent Auditors' Report The Board of Directors and Stockholders The Home Depot, Inc.: We have audited the accompanying consolidated balance sheets of The Home Depot, Inc. and subsidiaries as of January 29, 1995 and January 30, 1994, and the related consolidated statements of earnings, stockholders' equity, and cash flows for each of the years in the three-year period ended January 29, 1995. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Home Depot, Inc. and subsidiaries as of January 29, 1995 and January 30, 1994, and the results of their operations and their cash flows for each of the years in the three-year period ended January 29, 1995 in conformity with generally accepted accounting principles. KPMG Peat Marwick LLP Atlanta, Georgia March 10, 1995 EX-24 9 EXHIBIT 24 STATE OF NEW MEXICO COUNTY OF DONA ANA KNOW ALL MEN BY THESE PRESENTS, that I, Frank Borman, a director of The Home Depot, Inc., a Delaware corporation, do constitute and appoint Bernard Marcus and Ronald M. Brill, jointly and severally, my true and lawful attorneys-in-fact, each with full power of substitution, for me in any and all capacities, to sign, pursuant to the requirements of the Securities Exchange Act of 1934, the Annual Report of the Corporation on Form 10-K for the fiscal year of the Corporation ended January 29, 1995, and to file the same with the Securities and Exchange Commission, together with all exhibits thereto and other documents in connection therewith, including such as are incorporated therein by reference, and to sign on my behalf and in my stead, in any and all capacities, any amendments to said Annual Report, incorporating such changes as any of the said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do orcause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 5th day of April, 1995. /s/ Frank Borman ------------------------------------- Frank Borman BEFORE me this 5th day of April, 1995, came Frank Borman, personally known to me, who in my presence did sign and seal the above and foregoing Power of Attorney and acknowledged the same ashis true act and deed. /s/ Patricia M. Frietze -------------------------------------- NOTARY PUBLIC State of New Mexico My Commission Expires: November 22, 1995 STATE OF TEXAS COUNTY OF DALLAS KNOW ALL MEN BY THESE PRESENTS, that I, Berry R. Cox, a director of The Home Depot, Inc.,a Delaware corporation, do constitute and appoint Bernard Marcus and Ronald M. Brill, jointly and severally, my true and lawful attorneys-in-fact, each with full power of substitution, for me in any and all capacities, to sign, pursuant to the requirements of the Securities Exchange Act of 1934, the AnnualReport of the Corporation on Form 10-K for the fiscal year of the Corporation ended January 29, 1995, and to file the same with the Securities and Exchange Commission, together with all exhibits thereto andother documents in connection therewith, including such as are incorporated therein by reference, and to sign on my behalf and in my stead, in any and all capacities, any amendments to said Annual Report, incorporating such changes as any of the said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 6th day of April, 1995. /s/ Berry R. Cox ----------------------------------- Berry R. Cox BEFORE me this 6th day of April, 1995, came Berry R. Cox, personally known to me, who in my presence did sign and seal the above and foregoing Power of Attorney and acknowledged the same as his true act and deed. /s/ Cindy Lou Wolf ----------------------------------- NOTARY PUBLIC State of Texas My Commission Expires: August 24, 1996 STATE OF TEXAS COUNTY OF DALLAS KNOW ALL MEN BY THESE PRESENTS, that I, Milledge A. Hart, III, a director of The Home Depot, Inc., a Delaware corporation, do constitute and appoint Bernard Marcus and Ronald M. Brill, jointly and severally, my true and lawful attorneys-in-fact, each with fullpower of substitution, for me in any and all capacities, to sign, pursuant to the requirements of the Securities Exchange Act of 1934, the Annual Report of the Corporation on Form 10-K for the fiscal year of the Corporation ended January 29, 1995, and to file the same with the Securities and Exchange Commission, together with all exhibits thereto and other documents in connection therewith, including such as are incorporated therein by reference, and to sign on my behalf and in my stead, in any and all capacities, anyamendments to said Annual Report, incorporating such changes as any of the said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 10th day of April, 1995. /s/ Milledge A. Hart, III ----------------------------------- Milledge A. Hart, III BEFORE me this 10th day of April, 1995, came Milledge A. Hart, III, personally known to me, who in my presence did sign and seal the above and foregoing Power of Attorney and acknowledged the same as his true act and deed. /s/ Jodi L. Patnoe ----------------------------------- NOTARY PUBLIC State of Texas My Commission Expires: June 10, 1995 STATE OF GEORGIA COUNTY OF COBB KNOW ALL MEN BY THESE PRESENTS, that I, James W. Inglis, a director of The Home Depot, Inc., a Delaware corporation, do constitute and appoint Bernard Marcus and Ronald M. Brill, jointly and severally, my true and lawful attorneys-in-fact, each with full power of substitution, for me in any and all capacities, to sign, pursuant to the requirements of the Securities Exchange Act of 1934, the Annual Report of the Corporation on Form 10-K for the fiscal year of the Corporation ended January 29, 1995, and to file the same with the Securities and Exchange Commission, together with all exhibits thereto andother documents in connection therewith, including such as are incorporated therein by reference, and to sign on my behalf and in my stead, in any and all capacities, any amendments to said Annual Report, incorporating such changes as any of the said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 14th day of April, 1995. /s/ James W. Inglis --------------------------- James W. Inglis BEFORE me this 14th of April, 1995, came James W. Inglis, personally known to me, who in my presence did sign and seal the above and foregoing Power of Attorney and acknowledged the same as his true act and deed. /s/ Margie Bidwell --------------------------- NOTARY PUBLIC State of Georgia My Commission Expires: August 14, 1998 STATE OF GEORGIA COUNTY OF COBB KNOW ALL MEN BY THESE PRESENTS, that I, Donald R. Keough, a director of The Home Depot, Inc., a Delaware corporation, do constitute and appoint Bernard Marcus and Ronald M. Brill, jointly and severally, my true and lawful attorneys-in-fact, each with full power of substitution, for me in any and all capacities, to sign, pursuant to the requirements of the Securities Exchange Act of 1934, the Annual Report of the Corporation on Form 10-K for the fiscal year of the Corporation ended January 29, 1995, and to file the same with the Securities and Exchange Commission, together with all exhibits thereto andother documents in connection therewith, including such as are incorporated therein by reference, and to sign on my behalf and in my stead, in any and all capacities, any amendments to said Annual Report, incorporating such changes as any of the said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 6th day of April, 1995. /s/ Donald R. Keough --------------------------- Donald R. Keough BEFORE me this 6th day of April, 1995, came Donald R. Keough, personally known to me, who in my presence did sign and seal the above and foregoing Power of Attorney and acknowledged the same as his true act and deed. /s/ Mary Beth Meeder --------------------------- NOTARY PUBLIC State of Georgia My Commission Expires: January 28, 1996 STATE OF FLORIDA COUNTY OF PALM BEACH KNOW ALL MEN BY THESE PRESENTS, that I, Kenneth G. Langone, a director of The Home Depot, Inc., a Delaware corporation, do constitute and appoint Bernard Marcus and Ronald M. Brill, jointly and severally, my true and lawful attorneys-in-fact, each with full power of substitution, for me in any and all capacities, to sign, pursuant to the requirements of the Securities Exchange Act of 1934, the Annual Report of the Corporation on Form 10-K for the fiscal year of the Corporation ended January 29, 1995, and to file the same with the Securities and Exchange Commission, together with all exhibits thereto and other documents in connection therewith, including such as are incorporated therein by reference, and to sign on my behalf and in my stead, in any and all capacities, any amendments to said Annual Report, incorporating such changes as any of the said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 7th day of April, 1995. /s/ Kenneth G. Langone --------------------------- Kenneth G. Langone BEFORE me this 7th day of April, 1995, came Kenneth G. Langone, personally known to me, who in my presence did sign and seal the above and foregoing Power of Attorney and acknowledged the same as his true act and deed. /s/ Judith A. Irber --------------------------- NOTARY PUBLIC State of Florida My Commission Expires: October 29, 1995 STATE OF CALIFORNIA COUNTY OF SAN DIEGO KNOW ALL MEN BY THESE PRESENTS, that I, M. Faye Wilson, a director of The Home Depot, Inc., a Delaware corporation, do constitute and appoint Bernard Marcus and Ronald M. Brill, jointly and severally, my true and lawful attorneys-in-fact, each with full power of substitution, for me in any and all capacities, to sign, pursuant to the requirements of the Securities Exchange Act of 1934, the Annual Report of the Corporation on Form 10-K for the fiscal year of the Corporation ended January 29, 1995, and to file the same with the Securities and Exchange Commission, together with all exhibits thereto and other documents in connection therewith, including such as are incorporated therein by reference, and to sign on my behalf and in my stead, in any and all capacities, any amendments to said Annual Report, incorporating such changes as any of the said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact deems appropriate, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand and seal this 6th day of April, 1995. /s/ M. Faye Wilson --------------------------- M. Faye Wilson BEFORE me this 6th day of April, 1995, came M. Faye Wilson, personally known to me, who in my presence did sign and seal the above and foregoing Power of Attorney and acknowledged the same as her true act and deed. /s/ Carla D. Barlow --------------------------- NOTARY PUBLIC State of California My Commission Expires: June 5, 1998 EX-27 10 EXHIBIT 27
5 1,000 YEAR JAN-29-1995 JAN-29-1995 1,154 56,712 272,225 0 1,749,312 2,132,963 3,747,268 350,031 5,778,041 1,214,239 983,369 22,668 0 0 3,419,555 5,778,041 12,476,697 12,476,697 8,991,204 8,991,204 2,498,303 0 7,439 979,751 375,250 604,501 0 0 0 604,501 1.32 1.32
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