UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1994
- - - OR -
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8207
THE HOME DEPOT, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3261426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2727 Paces Ferry Road Atlanta, Georgia 30339
(Address of principal executive offices) (Zip Code)
(404) 433-8211
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report.)
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
$.05 par value 451,958,275 Shares, as of 8/17/94
Page 1 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
July 31, 1994
Page
Part I. Financial Information:
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF EARNINGS -
Three-Month and Six-Month Periods
Ended July 31, 1994 and August 1,1993........... 3
CONSOLIDATED CONDENSED BALANCE SHEETS -
As of July 31, 1994 and January 30, 1994......... 4
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS - Six-Month Period
Ended July 31, 1994 and August 1, 1993........... 5
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS............................. 6
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition..........................................8-11
Part II. Other Information:
Item 4. Submission of Matters to a Vote on Security
Holders...................................... 12
Item 6. Exhibits and Reports on 8-K.................. 12
Signature Page........................................ 13
Index to Exhibits...................................... 14
Page 2 of 15
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PART I. FINANCIAL INFORMATION
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
<C> <S> <S> <S> <S>
July 31, August 1, July 31, August 1,
1994 1993 1994 1993
Net Sales $3,287,036 $2,453,756 $6,159,165 $4,633,974
Cost of Merchandise Sold 2,391,219 1,791,922 4,454,591 3,370,440
Gross Profit 895,817 661,834 1,704,574 1,263,534
Operating Expenses:
Selling and Store Operating 538,610 405,336 1,057,999 794,581
Pre-opening 10,066 4,822 19,779 10,320
General and Administrative 55,893 45,257 107,784 91,872
Total Operating Expenses 604,569 455,415 1,185,562 896,773
Operating Income 291,248 206,419 519,012 366,761
Interest Income (Expense):
Interest Income 8,325 16,927 16,722 32,697
Interest Expense (9,649) (8,132) (18,216) (16,765)
Interest, Net (1,324) 8,795 (1,494) 15,932
Earnings Before Income
Taxes 289,924 215,214 517,518 382,693
Income Taxes 111,910 80,710 199,700 141,390
Net Earnings $ 178,014 $ 134,504 $ 317,748 $ 241,303
Earnings Per Common and
Common Equivalent
Share (Note 4) $ .39 $ .30 $ .69 $ .53
Dividends Per Share $ .04 $ .03 $ .07 $ .05
Weighted Average Number of
Common and Common Equivalent
Shares (Note 4) 475,900 453,147 475,360 452,854
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 3 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
July 31, January 30,
1994 1994
ASSETS
Current Assets:
Cash and Cash Equivalents $ 344,062 $ 99,997
Short-Term Investments 97,023 330,976
Accounts Receivable, Net 223,409 198,431
Merchandise Inventories 1,570,235 1,293,477
Other Current Assets 53,796 43,720
Total Current Assets 2,288,525 1,966,601
Property and Equipment, at cost 3,185,023 2,618,428
Less:
Accumulated Depreciation and Amortization (295,614) (247,524)
Net Property and Equipment 2,889,409 2,370,904
Long-Term Investments held Available
for Sale 88,389 281,623
Cost in Excess of the Fair Value of Net
Assets Acquired, Net 86,713 19,503
Other 39,163 62,258
$5,392,199 $4,700,889
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 721,781 $ 521,246
Accrued Salaries and Related Expenses 213,949 167,489
Sales Taxes Payable 85,545 57,590
Other Accrued Expenses 232,968 184,462
Income Taxes Payable 34,768 40,303
Current Installments of Long-Term Debt 1,564 1,548
Total Current Liabilities 1,290,575 972,638
Convertible Subordinated Debt 804,990 804,990
Long-Term Debt, Net of Current Maturities 36,503 37,002
Other Long-Term Liabilities 95,702 44,332
Deferred Income Taxes 20,401 27,827
Stockholders' Equity:
Common Stock - 451,928,000 shares outstanding
at 07/31/94 and 449,364,000 shares outstanding
at 01/30/94 22,596 22,468
Paid-in Capital 1,486,058 1,436,029
Retained Earnings 1,686,735 1,400,575
Cumulative Translation Adjustments (5,900) (121)
Unrealized Holding Loss on Investments (610) ---
3,188,879 2,858,951
Less: Notes Receivable from ESOP 44,851 44,851
Total Stockholders' Equity 3,144,028 2,814,100
$5,392,199 $4,700,889
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 4 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
<S> <C> <C>
July 31, August 1,
1994 1993
Cash Provided from Operations:
Net Earnings $ 317,748 $ 241,303
Reconciliation of Net Earnings to Net Cash
Provided by Operations:
Depreciation and Amortization 60,425 42,025
Increase in Accounts Payable
and Accrued Expenses 294,667 193,352
Increase in Merchandise Inventories (223,441) (186,177)
Increase in Income Taxes Payable 2,969 27,108
Increase in Receivables, Net (17,642) (9,865)
Other, Net 2,954 (3,998)
Total 119,932 62,445
Net Cash Provided by Operations 437,680 303,748
Cash Flows From Investing Activities:
Capital Expenditures (524,213) (385,642)
Initial Acquisition of Canadian
Partnership Interest (161,548) ---
Sale (Purchases) of Short-Term
Investments, Net 49,558 102,196
Purchase of Long-Term Investments (67,710) (618,429)
Proceeds from Maturities of
Long-Term Investments 39,509 66,222
Proceeds from Sales of Long-Term
Investments 404,941 478,038
Proceeds from Sale of Property and
Equipment 15,760 24,761
Repayments of Advances
Secured by Real Estate, Net 40,532 13,222
Net Cash Used in Investing Activities $ (203,171) $ (319,632)
Cash Flows From Financing Activities:
Proceeds from Sales of Common Stock, Net 41,653 44,762
Cash Received from ESOP --- 179
Principal Repayments of Long-Term Debt (510) (745)
Cash Dividends Paid to Stockholders (31,587) (23,442)
Net Cash Provided by Financing Activities 9,556 20,754
Increase in Cash and Cash Equivalents 224,065 4,870
Cash and Cash Equivalents,
Beginning of Period 99,997 121,744
Cash and Cash Equivalents,
End of Period $ 344,062 $ 126,614
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 5 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies:
Basis of Presentation
The accompanying consolidated condensed financial
statements have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting
of normal reoccurring accruals) considered necessary for a
fair presentation have been included. These statements
should be read in conjunction with the consolidated
financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended
January 30, 1994 as filed with the Securities and Exchange
Commission (File No. 1-8207).
2. Acquisition of Interest in Canadian Company
Effective February 28, 1994, the Company entered into a
partnership and, as a result, acquired 75% of Aikenhead's
Home Improvement Warehouse, now known as The Home Depot
Canada, which was operating seven warehouse-style home
improvement stores at the time of the acquisition in
Toronto, London and Kitchener, Ontario, Canada. Subsequent
to the acquisition, the partnership has opened three stores
located in Edmonton and Calgary, Alberta and 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% of The Home Depot Canada. 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% interest in The
Home Depot Canada was approximately $162,000,000 and is
being accounted for by the purchase method of accounting.
The excess purchase price over the estimated fair value of
the net assets as of the acquisition date has been recorded
as goodwill and will be amortized over 40 years.
3. Accounting for Investments
In the first quarter of fiscal 1994, the Company
implemented Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115). This standard addresses the
accounting and reporting for investments in equity
securities that have readily determinable fair values and
for all investments in debt securities. Under SFAS 115,
the Company is required to classify its debt and marketable
equity securities in one of three categories: trading,
available for sale, or held to maturity. Trading
securities are bought and held primarily for the purpose of
selling them in the near term. Held to maturity securities
are securities that the Company has the ability and intent
to hold until maturity.
All other securities not included in trading
or held to maturity are classified as available
for sale. Trading securities are recorded at fair
value with unrealized gains and losses included
in earnings. Held to maturity securities are recorded
at amortized cost, adjusted for amortization or
accretion of premiums or discounts. Unrealized gains
and losses on securities available for sale are
excluded from earnings and are reported as a separate
component of stockholders' equity until realized.
SFAS 115 has not had a significant impact on
the Company's results of operations.
Page 6 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
4. Earnings Per 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 for the three and six
month period ended August 1, 1993 represent options to
purchase shares granted under the Company's employee stock
option and stock purchase plans.
The Company's 4.5% Convertible Subordinated Notes
(Notes), due in 1997, issued in 1992, are common stock
equivalents. For the three and six month periods ended
July 31, 1994, the Notes were dilutive and are assumed to
be converted as of the beginning of the respective
accounting periods 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 Notes, by weighted average shares. Weighted
average number of common and common equivalent shares
include shares issuable under the stock plans mentioned
above and the 20,774,000 shares issuable upon conversion of
the Notes.
For the three and six month periods ended July 31,
1993 the Notes were not dilutive and therefore were
excluded from the earnings per share calculation.
Page 7 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The data below reflect selected sales data and 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.
<TABLE>
<CAPTION>
Percentage
3 Months Ended 6 Months Ended Increase(Decrease)
<S> <C> <C> <C> <C> <C> <C>
Jul 31, Aug 1, Jul 31, Aug 1, in Dollar Amounts
1994 1993 1994 1993 3 Months 6 Months
Selected Consolidated
Statements of Earnings Data
Net Sales 100.0% 100.0% 100.0% 100.0% 34.0% 32.9%
Gross Profit 27.2 27.0 27.7 27.3 35.4 34.9
Operating Expenses:
Selling and Store
Operating 16.4 16.5 17.2 17.2 32.9 33.2
Pre-Opening .3 .2 .3 .2 108.8 91.7
General and
Administrative 1.7 1.9 1.8 2.0 23.5 17.3
Total Operating
Expenses 18.4 18.6 19.3 19.4 32.8 32.2
Operating Income 8.8 8.4 8.4 7.9 41.1 41.5
Interest Income (Expense):
Interest Income .3 .7 .3 .7 (50.8) (48.9)
Interest Expense (.3) (.3) (.3) (.4) 18.7 8.7
Interest, Net .0 .4 .0 .3 N/A N/A
Earnings Before
Income Tax 8.8 8.8 8.4 8.2 34.7 35.2
Income Taxes 3.4 3.3 3.2 3.0 38.7 41.3
Net Earnings 5.4% 5.5% 5.2% 5.2% 32.3% 31.7%
Selected Consolidated Sales Data
Number of Customer Transactions
78,771,000 62,240,000 149,631,000 118,110,000 26.6% 26.7%
Average Amount of Sales Per
Transaction $ 41.73 $ 39.42 $ 41.16 $ 39.23 5.9 4.9
Weighted Average
Weekly Sales Per Operating
Store $869,000 $838,000 $833,000 $802,000 3.7 3.9
Weighted Average Sales Per Square Foot
$ 442 $ 442 $ 424 $ 423 0.0 0.2
</TABLE>
Page 8 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS
Sales for the second quarter of fiscal 1994 increased 34% to
$3,287,036,000 compared to sales of $2,453,756,000 for the
second quarter of fiscal 1993. For the first six months of
fiscal 1994 sales increased 33% to $6,159,165,000 compared to
sales of $4,633,974,000 for the comparable period of fiscal
1993. This sales increase was attributable to new stores (298
at the end of the second quarter of fiscal 1994 compared to 230
at the end of the second quarter of fiscal 1993) and a
comparable store-for-store sales increase of 6%. The percentage
increase in comparable store sales would have been 7% for the
quarter after excluding all sales from the ten stores in
southern Florida that were significantly affected by Hurricane
Andrew. For the first six months of fiscal 1994, comparable
store-for-store sales increased 7% but would have been 9%
without the ten southern Florida stores referred to above.
Gross profit as a percent of sales was 27.2% for the second
quarter of fiscal 1994 compared to 27.0% for the comparable
period of fiscal 1993. For the first six months of fiscal 1994,
gross profit as a percent of sales was 27.7% compared to 27.3%
for the comparable period of fiscal 1993. These increases were
attributable to, among other things, changes in merchandise mix
and higher vendor volume rebates.
Operating expenses as a percent of sales decreased to 18.4% and
19.3% for the second quarter and first six months of fiscal
1994, respectively, compared to 18.6% and 19.4% for the second
quarter and first six months of fiscal 1993, respectively.
Selling and store operating expenses as a percent of sales
decreased to 16.4% for the second quarter of fiscal 1994
compared to 16.5% for the same period of fiscal 1993. This
decrease was due to, among other things, no relocations for the
second quarter of fiscal 1994 compared to one relocation during
the same period of fiscal 1993 and efficiencies in advertising
and other operating expenses due to higher sales volumes. For
the first six months of both fiscal 1994 and fiscal 1993,
selling and store operating expenses were 17.2%. Pre-opening
expenses as a percent of sales increased to 0.3% for both the
second quarter and first six months of fiscal 1994 compared to
0.2% for both comparable periods of fiscal 1993. The increase
for the quarter was attributable to 12 new store openings in
fiscal 1994 compared to six new store openings and one
relocation in the same period of fiscal 1993. The increase for
the first six months of fiscal 1994 was attributable to 28 new
store openings plus five relocations compared to 16 new store
openings plus three relocations in the same period of fiscal
1993. General and administrative expenses as a percent of sales
decreased to 1.7% and 1.8% for the second quarter and first six
months of fiscal 1994, respectively, compared to 1.9% and 2.0%
for the second quarter and first six months of fiscal 1993,
respectively. These decreases were attributable to economies
from increased sales volumes and continued focus on cost
controls.
Interest income as a percent of sales decreased to 0.3% for the
second quarter and first six months of fiscal 1994 from 0.7% for
the second quarter and first six months of fiscal 1993. This
decrease was attributable to a lower investment base and lower
effective yields due to shorter maturities. Interest expense as
a percent of sales was 0.3% for both the second quarter of
fiscal 1994 and fiscal 1993. For the first six months of fiscal
1994, interest expense as a percent of sales decreased to 0.3%
from 0.4% for the same period of fiscal 1993. This decrease was
attributable to higher capitalized interest due to having more
owned stores under construction partially offset by interest on
capitalized leases.
Page 9 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS--(Continued)
The Company's combined Federal and state effective income tax
rate increased to 38.6% for the second quarter of fiscal 1994
compared to 37.5% for the same period of fiscal 1993 due to the
implementation of the Omnibus Budget Reconciliation Act of 1993
and fewer tax advantaged investments. For the first six months
of fiscal 1994, the Company's combined Federal and state
effective income tax rate increased to 38.6% from 36.9% for the
same period of fiscal 1993. This increase was attributable to
the reasons noted above and in addition, the Federal and state
combined effective rate for the first six months of fiscal 1993
would have been 37.5%, however Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" was implemented
in first quarter of fiscal 1993 which reduced the Federal and
state effective rate to 36.9%.
Net earnings as a percent of sales was 5.4% for the second
quarter of fiscal 1994 compared to 5.5% for the same period of
fiscal 1993. This decrease was attributable to lower net
interest income and higher taxes, offset partially by higher
gross profits and lower operating expenses, as described above.
For the first six months of both fiscal 1994 and fiscal 1993,
net earnings as a percent sales was 5.2%.
Earnings per share was $.39 and $.69 for the second quarter and
first six months of fiscal 1994, respectively, compared to $.30
and $.53 for the second quarter and first six months of fiscal
1993, respectively. Weighted average shares were 5% higher for
both the second quarter and first six months of fiscal 1994
compared to the same periods of fiscal 1993 due to the dilution
attributable to the Company's outstanding 4.5% Convertible Notes
as discussed in Exhibit 11.1 and footnote No. 4.
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.
During the first six months of fiscal 1994, the Company opened
28 stores, acquired seven stores in Canada, relocated five of
its existing stores and closed one store. During the remainder
of fiscal 1994, the Company plans to open approximately 42
additional new stores and relocate four existing stores. Of the
70 new stores and nine relocations planned for fiscal 1994, it
is expected that 69 will be owned and 10 will be leased. The
Company currently plans to open approximately 85 new stores and
may relocate 10 stores during fiscal 1995. Although some of
these locations will be leased directly, it is expected that
many may be obtained through the purchase of pre-existing
leasehold interests, the acquisition of land parcels and the
construction or purchase of buildings during fiscal 1994. While
the cost of new stores to be constructed and owned by the
Company varies widely, principally due to land costs, new store
costs (including land, building and fixtures) are currently
estimated to average approximately $12,700,000 per location.
The Company may purchase leasehold interests at varying amounts
depending upon the value of such properties. The cost to
remodel (including leasehold interests) and fixture stores to be
leased is expected to average approximately $4,000,000 per
store. In addition, each new store will require approximately
$2,500,000 to finance inventories, net of vendor financing.
Page 10 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES--(Continued)
In addition, the Company paid approximately $162,000,000 on
February 28, 1994 in conjunction with the acquisition of a 75%
interest in Aikenhead's Home Improvement Warehouse (now known as
The Home Depot Canada) in Canada. After six years, the Company
has the option to purchase, or the other partner has the right
to cause the Company to purchase, the remaining 25% of The Home
Depot Canada. At the time of acquisition, Aikenhead's was
operating seven stores and the Company anticipates having 12
stores in Canada by the end of fiscal 1994. These Canadian
stores have been included in the planned store totals discussed
above.
As of July 31, 1994, the Company had $441,085,000 in cash and
short-term investments as well as $88,389,000 in long-term
investments. Management believes that its current cash
position, the proceeds from short-term and long-term
investments, internally generated funds, 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.
Page 11 of 15
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 25, 1994, at the Company's Annual Meeting of
Stockholders, the stockholders elected the slate of
nominees for election as director with votes cast as
follows: Col. Frank Borman had 384,703,738 shares for
and 2,883,098 shares withheld; Mr. Ronald M. Brill had
385,263,152 shares for and 2,323,684 shares withheld;
and Mr. Berry R. Cox had 385,422,126 shares for and
2,164,710 shares withheld. There were no abstentions
or broker non-votes applicable to the election of
directors.
The stockholders also adopted the proposal to approve
the Senior Officers' Bonus Pool Plan with votes cast
as follows: 361,061,626 shares for; 23,172,405 shares
against; 3,352,804 shares abstained; and 63,076,253
shares of non-votes.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Earnings per Common and
Common Equivalent Share
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the
quarter ended July 31, 1994.
Page 12 of 15
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE HOME DEPOT, INC.
(Registrant)
By: /s/ Arthur M. Blank
Arthur M. Blank
President
/s/ Ronald M. Brill
Ronald M. Brill
Executive Vice President
Chief Financial Officer
(Date)
Page 13 of 15
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
THE HOME DEPOT, INC.
(Registrant)
By:
Arthur M. Blank
President
Ronald M. Brill
Executive Vice President
Chief Financial Officer
(Date)
Page 13 of 15
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THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit Description Page
11.1 Computation of Earnings per Common and Common
Equivalent Share............................... 15
Page 14 of 15
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Exhibit 11.1
THE HOME DEPOT, INC. AND SUBSIDIARIES
Computation of Earnings
Per Common and Common Equivalent Share
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31, August 1, July 31, August 1,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net earnings applicable
to common and common
equivalent shares $178,014 $134,504 $317,748 $241,303
Tax effected interest expense,
net of interest capitalized,
attributable to convertible
subordinated notes 5,209 - 10,340 -
$183,223 $134,504 $328,088 $241,303
Shares:
Weighted average number of
common and common equivalent
shares assuming higher of
ending or average market
price 455,126 453,176 454,586 452,683
Additional shares from
conversion of notes 20,774 - 20,774 -
475,900 453,176 475,360 452,683
Primary earnings
per common and common
equivalent share $ .385 $ .297 $ .690 $ .533
</TABLE>
(1) Common equivalent shares represent shares granted under
three stock option plans and an employee stock purchase
plan.
(2) The Company's 4.5% Convertible Subordinated Notes, issued
in 1992, are common stock equivalents. For the three and
six month periods ended August 1, 1993, shares issuable
upon their conversion were anti-dilutive and, therefore,
were excluded from the earnings per share calculation. For
the three and six month periods ended July 31, 1994, the
Notes are dilutive and, accordingly, are assumed to be
converted as of the beginning of the accounting periods for
purposes of calculating earnings per share.
Page 15 of 15
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