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 30, 1994
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
(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
4-1/2% Convertible Subordinated New York Stock Exchange
Notes due 1997
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 March 28, 1994 was
$17,835,344,406. 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 418,473,590 shares.
The number of shares outstanding of the Registrant's Common Stock
as of March 28, 1994 was 450,648,080 shares.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The Registrant's proxy statement for its Annual Meeting of
Stockholders, to be held May 25, 1994, 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
therein. In addition, pages 20 through 38 of The Home Depot,
Inc.'s 1993 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. and 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's three operating divisions--
Western, Southeast and Northeast--had 264 stores in 23 states
with an aggregate total of approximately 26,383,000 square feet
of selling space. Such stores average approximately 100,000
square feet of enclosed space per store, with an additional
10,000 to 28,000 square feet of outside selling and storage
space. The Company's executive offices are located at 2727
Paces Ferry Road, Atlanta, Georgia 30339, 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 large proportion of the Company's customers are
individual homeowners, many of whom may have limited experience
in do-it-yourself 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. 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 30,000 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.
<PAGE>
<TABLE>
<CAPTION>
Percentage of Sales
Year Ended Year Ended Year Ended
Feb. 2, Jan. 31, Jan. 30,
1992 1993 1994
<S> <C> <C> <C>
Product Group
Plumbing, heating, lighting
and electrical supplies 28.5% 27.3% 27.6%
Building materials, lumber,
floor and wall coverings 32.8 34.1 34.2
Hardware and tools 12.3 12.8 13.0
Seasonal and specialty items 15.2 14.8 14.5
Paint and Other 11.2 11.0 10.7
----- ----- -----
100.0% 100.0% 100.0%
===== ===== =====
</TABLE>
The Company sources its merchandise from approximately 4,350
vendors worldwide, of which no single vendor accounts for as much
as 10% 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 the benefits of this
"cannibalization" strategy are to increase 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 1993. 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
greenhouses or covered selling areas providing year round selling
opportunities as well as a significantly expanded product
assortment. By the end of fiscal 1993, the prototype was in place
<PAGE>
in 87 stores. Both new and older stores will incorporate
the expanded centers where space is available.
During fiscal 1993, the Company continued to develop
innovative merchandising programs that are helping to further
grow the business. The Company's installed sales program became
available in 251 stores in 26 markets and is planned to be in all
of the Company's stores over the next year. There are
approximately 2,370 installed sales vendors who, as independent,
licensed contractors, are authorized to provide services to
customers. This program targets the buy-it-yourself ("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 began a three year marketing
effort to support its sponsorship of the 1994 and 1996 Olympic
Games and the U.S. Olympic teams' participation at those games.
A select number of the Company's key suppliers are providing
significant financial support for the sponsorship.
In January 1994, the Company opened its second Expo(Regis. TM) Design
Center in Atlanta, Georgia, which is the first of its kind on the
East Coast. The Expo stores, located in San Diego and Atlanta,
are enabling the regional merchandising staff to test a variety
of upscale interior design products and services. The Company is
currently considering the feasibility of opening Expo stores in
other markets. During 1993 and early 1994, the Company also
opened seven Depot Diners on a test basis in Atlanta, Seattle and
various locations in South Florida. Depot Diners 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.
"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 scan rate, store-based inventory
management, rapid order replenishment, labor planning support,
and item movement information. Store information is communicated
to home office and divisional office computers via a satellite
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,
<PAGE>
over 250 of the Company's highest volume vendors are participating
in the EDI program. The Company also operates its own television network
and produces training and communications programs that are transmitted to
stores via the satellite network.
Employees
As of fiscal year end, The Home Depot employed
approximately 50,700 persons, of whom approximately 3,600 were
salaried and the remainder were compensated on an hourly basis.
Approximately 90 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 accurately measure the Company's market
share in its existing market areas. However, management 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, has been Chairman of the Board of Directors
and Chief Executive Officer ("CEO") 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.
<PAGE>
ARTHUR M. BLANK, 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 Post
Properties Inc. and Harry's Farmers Market, Inc.
RONALD M. BRILL, 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 Atlanta High Museum of Art; the Board
of Directors of the Atlanta Chamber of Commerce; and the
Governing Board of Woodward Academy.
JAMES W. INGLIS, 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.
BRUCE W. BERG, 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.
BILL HAMLIN, 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.
LARRY M. MERCER, 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.
MARSHALL L. DAY, 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.
STEPHEN BEBIS, has been President and Chief Executive Officer
of The Home Depot Canada, a Canadian partnership, since February
1994. Mr. Bebis' division operates the
<PAGE>
Aikenhead's Home Improvement Warehouse, which is owned jointly by the Molson
Companies Limited and The Home Depot. 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. Mr. Bebis is currently a
member of the Board of Directors of Habitat for Humanity Canada
and a member of the Young Presidents' Organization.
HARRY PIERCE, 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.
Item 2. PROPERTIES
The following table illustrates the Company's store
locations by state as of the end of fiscal year 1993:
<TABLE>
<CAPTION>
Number of Stores
State in State
<S> <C>
Alabama 2
Arizona 11
California 73
Connecticut 7
Florida 52
Georgia 18
Louisiana 6
Maryland 6
Massachusetts 9
Nevada 3
New Hampshire 3
New Jersey 12
New York 10
North Carolina 3
Oklahoma 2
Oregon 1
Pennsylvania 2
Rhode Island 1
South Carolina 3
Tennessee 7
Texas 26
Virginia 4
Washington 3
---
TOTAL 264
===
</TABLE>
<PAGE>
At fiscal year end, The Home Depot had stores located in 23
states, with approximately 68% being concentrated in California,
Georgia, Texas, Florida and Arizona. In late fiscal 1988, the
Company began to open stores in the Northeast, its first
expansion outside the Sunbelt states. Despite a generally weak
economy in the Northeast region, the stores the Company operates
in this region have reported sales volumes which are among the
highest of the Company's stores. Although new store openings for
fiscal 1993 occurred primarily in existing markets, the Company
continued its geographic expansion by opening stores in a number
of new markets in fiscal 1993 -- upper New York; eastern
Pennsylvania; metro Washington, D.C.; Portland, Oregon; Reno,
Nevada; Greensboro, North Carolina; Charleston, South Carolina;
Tallahassee, Florida; Augusta, Georgia; Bakersfield, Fresno and
Stockton, California; and Oklahoma City, Oklahoma.
In November 1993, the Company announced plans to acquire
seven non-operating store locations in the Chicago area from
Waban Inc., owners of HomeBase Home Improvement Centers. In
February 1994, the Company acquired from the Molson Companies
Limited ("Molson"), a 75% interest in the Canadian home
improvement warehouse retailer, Aikenhead's Home Improvement
Warehouse. The Company has the right to acquire Molson's
remaining 25% interest in six years. The Company will be the
managing partner of the new enterprise, known as The Home Depot
Canada, a Canadian partnership. At the time of the acquisition,
Aikenhead's was operating seven stores in Ontario and had an
additional three stores scheduled to open by April 1994. The
Company anticipates operating approximately 12 stores throughout
major Canadian markets by the end of fiscal 1994.
From the end of fiscal 1988 to the end of fiscal 1993, the
Company increased its store count by an average of approximately
22% per year (from 96 to 264 stores) and increased the total
store square footage by an average of approximately 26% per year
(from 8,216,000 to 26,383,000 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. The Home
Depot took advantage of recent competitive opportunities despite
this stated policy. During fiscal 1993, the Company opened 50
new stores and relocated six existing stores, including the
opening of approximately 18 additional stores in the Northeast
region, approximately 15 additional stores in the Southeast
region, including the Expo Design Center store, and approximately
17 additional stores in the Western region. During fiscal 1994,
the Company anticipates opening approximately 70 new stores: 18
in the Southeast, 18 in the Northeast, 19 in the West, 10 in the
Midwest and five in Canada, 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 264 stores, 61% are owned (including those
owned subject to a ground lease) consisting of approximately
16,197,00 square feet and 39% are leased consisting of
approximately 10,186,000 square feet. In recent years, the
relative percentage of new stores 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
<PAGE>
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
office occupies approximately 371,000 square feet of leased space
in two locations in Atlanta, Georgia. The Company occupies an
aggregate of 122,500 square feet, of which 68,500 square feet is
owned and 54,000 square feet is leased for divisional offices
located in Atlanta, Georgia; Fullerton, California; South
Plainfield, New Jersey; and Tampa, Florida.
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 30, 1994.
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.
<PAGE>
<TABLE>
<CAPTION>
Price Range* Cash
--------------- Dividends
Low High Declared*
--- ---- ----------
<S> <C> <C> <C>
Fiscal Year 1992
First Quarter ended May 3, 1992 $29.75 $34.25 $.0150
Second Quarter ended August 2, 1992 30.88 38.00 .0225
Third Quarter ended November 1, 1992 36.75 43.75 .0225
Fourth Quarter ended January 31, 1993 42.75 51.50 .0225
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 (through March 28, 1994) $37.13 $44.63 $.0300
_____________________________
<FN>
* On July 1, 1992, the Company effected a three-for-two stock
split and on April 13, 1993, the Company effected a four-for-
three stock split, each in the form of a stock dividend, with
respect to the shares of Common Stock issued and outstanding on
June 11, 1992 and March 24, 1993, respectively. The prices in
the table set forth above have been adjusted by the Company to
give effect retroactively to such stock splits. Dividends
declared also have been adjusted to give effect to the stock
splits.
</TABLE>
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 March 28, 1994 was 61,596 (without including
individual participants in nominee security position listings).
Item 6. SELECTED FINANCIAL DATA
Reference is made to information for the fiscal years
1988-1993 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 30, 1994, which
information is incorporated herein by reference.
<PAGE>
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 30, 1994, 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 30, 1994, 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 25, 1994, 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 25, 1994.
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 25, 1994.
<PAGE>
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 25, 1994.
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 25 through 38 of the
Registrant's Annual Report to Stockholders for the fiscal year
ended January 30, 1994, as provided in Item 8 hereof:
- Consolidated Statements of Earnings for the fiscal years
ended January 30, 1994, January 31, 1993 and February 2, 1992.
- Consolidated Balance Sheets as of January 30, 1994 and
January 31, 1993.
- Consolidated Statements of Stockholders' Equity for the
fiscal years ended January 30, 1994, January 31, 1993 and February 2, 1992.
- Consolidated Statements of Cash Flows for the fiscal years
ended January 30, 1994, January 31, 1993 and February 2, 1992.
- Notes to Consolidated Financial Statements.
- Independent Auditors' Report.
2. Financial Statement Schedules
The following financial statement schedules are filed herewith:
- Independent Auditors' Report on Financial Statement Schedules.
- Schedule I - Investments for the fiscal year ended January 30, 1994.
- Schedule II - Amounts Receivable from Related Parties and
Underwriters, Promoters and Employees Other Than Related Parties
for the fiscal years ended January 30, 1994, January 31, 1993
and February 2, 1992.
<PAGE>
- Schedule V - Property and Equipment for the fiscal years
ended January 30, 1994, January 31, 1993 and February 2, 1992.
- Schedule VI - Accumulated Depreciation and Amortization of
Property and Equipment for the fiscal years ended January 30, 1994,
January 31, 1993 and February 2, 1992.
All other 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 30, 1994.
(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.
[Form 10-K for the fiscal year ended January 29, 1989,
Exhibit 3.1].
* 3.2 By-Laws, as amended [Form 10-K for the fiscal year ended
February 3, 1991, Exhibit 3.2].
* 4.1 Indenture dated as of January 15, 1992 among The Home Depot,
Inc., as issuer, Home Depot U.S.A., Inc., as guarantor, and
Wachovia Bank of Georgia, N.A., as trustee for $805,000,000,
4-1/2% Convertible Subordinated Notes due 1997. [Form 10-K for
the fiscal year ended February 2, 1992, Exhibit 4.2].
*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 March 22, 1991
[Appendix B to Registrant's Proxy Statement for the Annual
Meeting of Stockholders held May 22, 1991].
10.4 +Senior Officers' Bonus Pool Plan as adopted by the
Compensation Committee of the Board of Directors on February
23, 1994.
<PAGE>
*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].
11 Computation of Earnings Per Common and Common Equivalent
Share.
13 The Registrant's Annual Report to Stockholders for the
fiscal year ended January 30, 1994. 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 Peter S. Gold.
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.
- ----------------------
+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.
<PAGE>
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 22nd day of April, 1994.
THE HOME DEPOT, INC.
By: /s/ Bernard Marcus
(Bernard Marcus, Chairman of theBoard,
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 22, 1994
(Bernard Marcus) Executive Officer and Secretary
(Principal Executive Officer)
/s/ Arthur M. Blank President, Chief Operating April 22, 1994
(Arthur M. Blank) Officer and Director
/s/ Ronald M. Brill Chief Financial Officer, April 22, 1994
(Ronald M. Brill) Executive Vice President and
Director (Principal Financial
and Accounting Officer)
* Director April 22, 1994
(Frank Borman)
<PAGE>
Signature Title Date
- --------- ----- ----
* Director April 22, 1994
(Berry R. Cox)
* Director April 22, 1994
(Peter S. Gold)
* Director April 22, 1994
(Milledge A. Hart, III)
* Director April 22, 1994
(James W. Inglis)
* Director April 22, 1994
(Donald R. Keough)
* Director April 22, 1994
(Kenneth G. Langone)
* Director April 22, 1994
(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)
<PAGE>
KPMG Peat Marwick
Certified Public Accountants
303 Peachtree Street, N.E. Telephone 404 222 3000
Suite 2000 Telefax 404 222 3050
Atlanta. GA 30308
Independent Auditors' Report on Financial Statement Schedules
The Board of Directors
and Stockholders
The Home Depot, Inc.:
Under date of March 11, 1994, we reported on the consolidated balance
sheets of The Home Depot, Inc. and subsidiaries as of January 30, 1994
and January 31, 1993, and the related consolidated statements of
earnings, stockholders' equity, and cash flows for each of the years in
the three-year period ended January 30, 1994, as contained in the
January 30, 1994 annual report to stockholders. These consolidated
financial statements and our report thereon are incorporated by
reference in the annual report on Form 10-K for the year ended January
30, 1994. In connection with our audits of the aforementioned
consolidated financial statements, we also have audited the related
financial statement schedules as listed in Item 14. These financial
statement schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as whole,
present fairly, in all material respects, the information set forth
therein.
/s/KPMG PEAT MARWICK
March 11, 1994
<PAGE>
<TABLE>
Schedule I
The Home Depot, Inc.
Investments
As of 1-30-94
(000's)
<CAPTION>
Col A. Col. B Col. C Col. D Col. E
Amount At
Market Which Carried
Category Principal Cost Value @ 1-30-94 On Balance Sheet
<S> <C> <C> <C> <C>
Tax-exempt notes and bonds $100,110 $105,473 $105,419 $104,997
U.S. Treasury securities 60,915 61,339 61,717 61,285
U.S. government agency
securities 74,392 74,983 74,898 74,941
Commercial paper 15,285 16,496 16,437 16,496
Certificates of deposit 30,000 30,000 29,811 30,000
Corporate bonds 208,500 210,714 212,172 209,902
Preferred stock 46,850 46,831 47,144 46,831
Asset-backed securities 60,397 61,351 61,357 61,288
Other 6,500 7,052 6,894 6,859
-------- -------- -------- --------
$602,949 $614,239 $615,849 $612,599
======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
Schedule II
Amounts Receivable From Related Parties
and Underwriters, Promoters and Employees
Other Than Related Parties
<CAPTION>
Col. A Col. B Col. C Col. D Col. E
Balance at End
Deductions of Period
Balance at (1) (2) (1) (2)
Name of Beginning of Amt. Written Not
Debtor Period Additions Amt. Collected Off Current Current
<S> <C> <C> <C> <C> <C> <C> <C>
Fiscal Year 1993:
Don Ingham (a) --- $100,000 $100,000 --- --- ---
Lynn Martineau (a) $100,000 --- $100,000 --- --- ---
Bernard Wolford (a) --- $125,000 $125,000 --- --- ---
Fiscal Year 1992:
Dennis Ryan (a) $ 35,241 --- $ 35,241 --- --- ---
Bryant Scott (a) $100,000 --- $100,000 --- --- ---
Lynn Martineau (a) --- $100,000 --- --- $100,000 ---
Fiscal Year 1991:
Bryant Scott (a) --- $100,000 --- --- $100,000 ---
Dennis Ryan (a) $ 70,483 --- $ 35,242 --- $ 35,241 ---
Ken Ubertino (a) $280,000 --- $280,000 --- --- ---
Harry Pierce (a) $100,000 --- $100,000 --- --- ---
<FN>
(a) Non-interest bearing note was issued in conjunction with purchase of new home and is payable upon
sale of existing home and/or from proceeds of annual bonuses or sales of stock through 1994.
</TABLE>
<PAGE>
<TABLE>
Schedule V
Property and Equipment
<CAPTION>
Col. A Col. B Col. C Col. D Col. E Col. F
(In thousands)
Other
changes -
Balance at add Balance
beginning Additions (deduct) - at end
Classification (1) of period at cost Retirements describe of period
<S> <C> <C> <C> <C> <C>
Fiscal year 1993
Land $ 502,022 $332,579 $20,161 --- $ 814,440
Buildings 619,909 280,713 8,867 --- 891,755
Furniture, fixtures,
and equipment 344,139 139,785 32,135 --- 451,789
Leasehold improvements 212,196 24,880 12,143 --- 224,933
Construction in progress 101,064 93,912 494 --- 194,482
Capital leases 12,446 28,583 --- --- 41,029
---------- -------- ------- --- ----------
$1,791,776 $900,452 $73,800 --- $2,618,428
========== ======== ======= === ==========
Fiscal year 1992
Land $ 379,073 $125,580 $ 2,631 --- $ 502,022
Buildings 444,249 177,939 2,279 --- 619,909
Furniture, fixtures,
and equipment 253,831 104,273 13,965 --- 344,139
Leasehold improvements 178,460 39,389 5,654 --- 212,196
Construction in progress 120,390 (14,970) 4,356 --- 101,064
Capital leases 7,380 5,066 --- --- 12,446
---------- -------- ------- --- ----------
$1,383,383 $437,277 $28,885 --- $1,791,776
========== ======== ======= === ==========
Fiscal year 1991
Land $ 262,560 $117,632 $ 1,119 --- $ 379,073
Buildings 272,095 172,313 159 --- 444,249
Furniture, fixtures,
and equipment 186,025 72,153 4,347 --- 253,831
Leasehold improvements 160,760 23,907 6,207 --- 178,460
Construction in progress 82,179 38,813 602 --- 120,390
Capital leases --- 7,380 --- --- 7,380
---------- -------- ------- --- ----------
$ 963,619 $432,198 $12,434 --- $1,383,383
========== ======== ======= === ==========
<FN>
(1) Estimated useful lives used for property and equipment are:
Buildings 20-45 years
Furniture, fixtures, and equipment 5-20 years
Leasehold improvements 8-30 years
</TABLE>
<PAGE>
<TABLE>
Schedule VI
Accumulated Depreciation and Amortization
of Property and Equipment
<CAPTION>
Col. A Col. B Col. C Col. D Col. E Col. F
In thousands
Other
Additions changes -
Balance at charged to add Balance
beginning costs and (deduct) - at end
of period expenses Retirements describe of period
<S> <C> <C> <C> <C> <C>
Fiscal year 1993
Buildings $ 44,573 $21,933 $ 1,361 --- $ 65,145
Furniture, fixtures,
and equipment 93,714 46,398 16,992 --- 123,120
Leasehold improvements 45,505 16,514 3,182 --- 58,837
Capital leases --- 422 --- --- 422
--------- ------- ------- --- --------
$ 183,792 $85,267 $21,535 --- $247,524
========= ======= ======= === ========
Fiscal year 1992
Buildings $ 28,974 $16,110 $ 511 --- $ 44,573
Furniture, fixtures,
and equipment 66,949 33,882 7,117 --- 93,714
Leasehold improvements 32,686 14,985 2,166 --- 45,505
-------- ------- ------ --- --------
$128,609 $64,977 $9,794 --- $183,792
======== ======= ====== === ========
Fiscal year 1991
Buildings $17,568 $11,416 $ 10 --- $ 28,974
Furniture, fixtures,
and equipment 44,549 24,633 2,233 --- 66,949
Leasehold improvements 22,772 12,989 3,075 --- 32,686
------- ------- ------ --- --------
$84,889 $49,038 $5,318 --- $128,609
======= ======= ====== === ========
</TABLE>
<PAGE>
EXHIBIT INDEX
10.4 Senior Officers' Bonus Pool Plan as adopted by the Compensation
Committee of the Board of Directors on February 23, 1994.
11 Computation of Earnings Per Common and Common Equivalent Share.
13 The Registrant's Annual Report to Stockholders for the fiscal
year ended January 30, 1994. 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 Peter S. Gold.
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.
SENIOR OFFICERS' BONUS POOL PLAN
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 1994 is equal to $457,401,000, which is approximately
equal to the Company's net earnings for fiscal 1993. Monies
payable from the SOBP are to be shared by the CEO and COO at the
ratio of 54% and 46% respectively, on the first $2 million and
50% each on the balance of the next $2 million. For 1994, 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.
<TABLE>
Exhibit 11
THE HOME DEPOT, INC.
Computation of Primary and Fully Diluted Earnings
Per Common and Common Equivalent Share
<CAPTION>
(In thousands, except per share amounts)
Fiscal Year Ended
1-30-94 1-31-93 2-2-92
<S> <C> <C> <C>
Primary
Net earnings applicable
to common and common
equivalent shares $457,401 $362,863 $249,150
======== ======== ========
Shares:
Weighted average number of
common and common equivalent
shares assuming average
market price for period 453,037 444,989 415,997
======== ======== ========
Primary earnings
per common and common
equivalent share $ 1.01 $ .82 $ .60
======== ======== ========
Fully Diluted
Net earnings applicable
to common and common
equivalent shares $457,401 $362,863 $249,150
Tax effected interest
expense attributable to
convertible subordinated
debentures $ 18,981 $ 898 $ 3,062
-------- -------- --------
$476,382 $363,761 $252,212
Shares: ======== ======== ========
Weighted average number
of common and common
equivalent shares at higher
of ending or average
market price 453,037 445,197 416,342
Additional shares from
convertible subordinated
debentures 20,774 5,208 10,370
------- ------- -------
473,811 450,405 426,712
Fully diluted earnings ======= ======= =======
per common & common
equivalent share $ 1.01 $ .81 $ .59
======= ======= =======
<FN>
(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 6% convertible notes, issued in 1990, were common
stock equivalents prior to their conversion to equity in June 1992.
Because shares issuable upon conversion of this debt issue were not
dilutive in 1991 and 1992, they are not included in the earnings
per share computations for such years. The Company's 4-1/2%
convertible notes, issued in 1992, are also common stock
equivalents. Fully diluted earnings per share shows the effect on
earnings per share assuming conversion of the 4-1/2% convertible notes
as of the beginning of the accounting periods. In 1992, shares
issuable upon conversion of the notes were not dilutive, and are
not included in the earnings per share computation. In 1993,
shares issuable upon conversion of the notes were dilutive, but had
no impact on earnings per share.
</TABLE>
<TABLE>
Ten Year Selected Financial
and Operating Highlights (Selected Portions)
The Home Depot, Inc. and Subsidiaries
Amounts in thousands, except where noted
<CAPTION>
5 Year Annual
Compound
Growth Rate 1993 1992 1991 1990(1) 1989
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Earnings Data
<S> <C> <C> <C> <C> <C> <C>
Net sales 35.8% $ 9,238,763 $7,148,436 $5,136,674 $ 3,815,356 $2,758,535
Net sales increase - % 29.2 39.2 34.6 38.3 38.0
Earnings before income taxes 42.4 736,871 575,973 396,120 259,828 182,015
Net earnings 42.9 457,401 362,863 249,150 163,428 111,954
Net earnings increase - % _ 26.1 45.6 52.5 46.0 45.9
Earnings per share ($) 35.6 1.01 .82 .60 .45 .32
Earnings per share increase - % _ 23.2 36.7 33.3 40.6 45.5
Weighted avg. number of shares 5.5 453,037 444,989 415,997 362,505 355,409
Gross margin - % to sales _ 27.7 27.6 28.1 27.9 27.8
Store selling and
operating - % to sales _ 17.6 17.4 18.1 18.2 18.3
Pre-opening - % to sales _ .4 .4 .3 .4 .3
General and administrative
- % to sales _ 2.0 2.1 2.3 2.4 2.5
Net interest income (expense)
- % to sales _ .3 .4 .3 (.1) (.1)
Earnings before income taxes
- % to sales _ 8.0 8.1 7.7 6.8 6.6
Net earnings - % to sales _ 5.0 5.1 4.8 4.3 4.1
- --------------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data and Financial Ratios
Total assets 46.4% $4,700,889 $3,931,790 $2,510,292 $1,639,503 $ 1,117,534
Working capital 47.4 993,963 807,028 623,937 300,867 273,851
Merchandise inventories 34.5 1,293,477 939,824 662,257 509,022 381,452
Net property and equipment 48.1 2,370,904 1,607,984 1,254,774 878,730 514,440
Long-term debt 50.9 841,992 843,672 270,575 530,774 302,901
Stockholders' equity 49.0 2,814,100 2,304,081 1,691,212 683,402 512,129
Book value per share ($) 40.8 6.26 5.20 4.01 1.93 1.49
Long-term debt to equity - % _ 29.9 36.6 16.0 77.7 59.1
Current ratio _ 2.02:1 2.07:1 2.17:1 1.73:1 1.94:1
Inventory turnover _ 5.9x 6.3x 6.1x 6.0x 5.9x
Return on average equity - % _ 17.9 18.1 18.5 27.6 25.2
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Cash Flows Data
Depreciation and amortization 43.7% $ 89,839 $ 69,536 $ 52,283 $ 34,358 $ 21,107
Capital expenditures 53.7 900,452 437,278 432,198 400,205 204,972
Cash dividends per share ($) _ .113 .083 .055 .037 .024
- --------------------------------------------------------------------------------------------------------------------------------
Customer and Store Data
Number of states 18.1% 23 19 15 12 12
Number of stores 22.4 264 214 174 145 118
Square footage at year-end 26.3 26,383 20,897 16,480 13,278 10,424
Change in square footage - % _ 26.3 26.8 24.1 27.4 26.9
Average square footage per store _ 100 98 95 92 88
No. of customer transactions 29.7 236,101 189,493 146,221 112,464 84,494
Average sale per transaction ($) 4.7 39.13 37.72 35.13 33.92 32.65
Number of employees 31.2 50,600 38,900 28,000 21,500 17,500
- --------------------------------------------------------------------------------------------------------------------------------
Other Data
Avg. total company weekly sales 35.8% $ 177,669 $ 137,470 $ 98,782 $ 71,988 $ 53,049
Weighted average weekly sales
per operating store 10.5 764 724 633 566 515
Comparable store
sales increase - % (2) _ 7 15 11 10 13
Weighted average sales per
square foot ($) (2) 7.1 398 387 348 322 303
Advertising expense - % to sales _ .5 .5 .7 .9 1.1
- --------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) Fiscal years 1990 and 1984 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.
</TABLE>
<PAGE>
Management's Discussion and Analysis of Results
of Operations and Financial Condition
The Home Depot, Inc. and Subsidiaries
The data below reflect 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.
<TABLE>
<CAPTION>
Percentage
Increase (Decrease)
of Dollar Amounts
Fiscal Year(1) -----------------------
---------------------------- 1993 1992
1993 1992 1991 vs. 1992 vs. 1991
- -------------------------------------------------------------------------------------------------------
Selected Consolidated Statements
of Earnings Data
<S> <C> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 29.2% 39.2%
- -------------------------------------------------------------------------------------------------------
Gross Profit 27.7 27.6 28.1 29.7 36.3
- -------------------------------------------------------------------------------------------------------
Operating Expenses:
Selling and Store Operating 17.6 17.4 18.1 30.5 34.1
Pre-Opening .4 .4 .3 36.6 52.6
General and Administrative 2.0 2.1 2.3 25.8 26.7
- -------------------------------------------------------------------------------------------------------
Total Operating Expenses 20.0 19.9 20.7 30.1 33.6
- -------------------------------------------------------------------------------------------------------
Operating Income 7.7 7.7 7.4 28.6 43.9
Interest Income (Expense):
Interest Income .6 1.0 .5 (9.9) 152.2
Interest Expense (.3) (.6) (.2) (25.1) 232.1
- -------------------------------------------------------------------------------------------------------
Interest, Net .3 .4 .3 13.7 83.9
- -------------------------------------------------------------------------------------------------------
Earnings Before Income Taxes 8.0 8.1 7.7 27.9 45.4
Income Taxes 3.0 3.0 2.9 31.1 45.0
- -------------------------------------------------------------------------------------------------------
Net Earnings 5.0% 5.1% 4.8% 26.1% 45.6%
=======================================================================================================
Selected Consolidated Sales Data
Number of Customer Transactions 236,101,000 189,493,000 146,221,000 24.6% 29.6%
Average Amount of Sale
Per Transaction $ 39.13 $ 37.72 $ 35.13 3.7 7.4
Weighted Average Weekly Sales
Per Operating Store $ 764,000 $ 724,000 $ 633,000 5.5 14.4
Weighted Average Sales
Per Square Foot $ 398.18 $ 386.92 $ 348.13 2.9 11.1
=======================================================================================================
<FN>
(1) Fiscal years 1993, 1992 and 1991 refer to the fiscal years
ended January 30, 1994, January 31, 1993 and February 2, 1992,
respectively.
</TABLE>
<PAGE>
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 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 hours on the selling floor, partially offset
by lower self-funded insurance costs 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.
Fiscal Year Ended January 31, 1993 Compared to February 2, 1992
- --------------------------------------------------------------------------
Sales for fiscal year 1992 increased 39.2% from $5,136,674,000 in
fiscal 1991 to $7,148,436,000. This increase was attributable to,
among other things, 40 new store openings, five store
relocations, a 15% comparable store-for-store sales increase and
full year sales from the 30 store openings during fiscal 1991.
The percentage increase in comparable store sales would have been
14% after excluding all sales from the eight stores in Southern
Florida that were significantly affected by Hurricane Andrew.
Gross profit as a percent of sales was 27.6% for fiscal 1992
compared to 28.1% for fiscal 1991. This lower gross profit
percentage resulted primarily from more aggressive pricing and a
higher penetration of sales from lower margin categories such as
lumber and building materials.
Operating expenses as a percent of sales decreased to 19.9% in
fiscal 1992 from 20.7% in fiscal 1991. This decrease was
attributable to, among other things, lower net advertising
expenses, lower occupancy costs, lower payroll costs and lower
general and administrative expenses as a percent of sales, due to
economies of scale from increased volumes and cost control
measures. These reductions as a percent of sales were partially
offset by higher pre-opening expenses during fiscal 1992
associated with 40 store openings and five relocations compared
to 30 store openings and four relocations during fiscal 1991.
<PAGE>
Interest income as a percent of sales increased to 1.0% in fiscal
1992 compared to 0.5% during fiscal 1991. This increase was
attributable to investing proceeds from the $805,000,000, 4-1/2%
Convertible Subordinated Notes due 1997 (4-1/2% Convertible Notes)
issued on February 3, 1992. Interest expense as a percent of
sales increased to 0.6% in fiscal 1992 from 0.2% in fiscal 1991
due to the issue of the 4-1/2% Convertible Notes, partially offset
by the call for redemption and conversion to equity of
substantially all the Company's 6% Convertible Subordinated Notes
in June, 1992.
The Company's combined Federal and state effective
income tax rate was 37.0% for fiscal 1992 compared to 37.1% for
fiscal 1991. This decrease was attributable to an increase in
income from tax-advantaged investments.
Net earnings as a percent of sales was 5.1% for fiscal 1992 compared
to 4.8% for fiscal 1991, reflecting lower operating expenses, higher net
interest income and a lower effective income tax rate, partially offset by
lower gross profits, as described above. Earnings per share was
$.82 for fiscal 1992 compared to $.60 for fiscal 1991 on 7% more
weighted average shares outstanding in fiscal 1992.
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 70 new stores and relocate nine
existing stores during fiscal 1994. Of these 79 locations, it is anticipated
that approximately 80% will be owned and the balance will be leased.
The Company also plans to open approximately 93 stores, including
relocations, in fiscal 1995. Although some of these locations will be leased
directly, it is expected that many may be obtained during fiscal
1994 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 $12,800,000 per location, including land, building
and fixtures. 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 $2,900,000 to finance
inventories, net of vendor financing.
In addition, the Company paid approximately $163,000,000 on
February 28, 1994 in conjunction with the acquisition of a 75% interest
in Aikenhead's Home Improvement Warehouse 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
Canadian company. 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 January 30, 1994, the Company had $430,973,000 in cash and
cash equivalents and short-term investments as well as
$281,623,000 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>
<TABLE>
Consolidated Statements of Earnings
The Home Depot, Inc. and Subsidiaries
Amounts in thousands, except per share data
<CAPTION>
Fiscal Year Ended
January 30, January 31, February 2,
1994 1993 1992
<S> <C> <C> <C>
Net Sales $9,238,763 $7,148,436 $5,136,674
Cost of Merchandise Sold 6,685,384 5,179,368 3,692,337
- ------------------------------------------------------------------------------------
Gross Profit 2,553,379 1,969,068 1,444,337
- ------------------------------------------------------------------------------------
Operating Expenses:
Selling and Store Operating 1,624,920 1,245,608 928,928
Pre-Opening 36,816 26,959 17,668
General and Administrative 184,954 147,080 116,063
- ------------------------------------------------------------------------------------
Total Operating Expenses 1,846,690 1,419,647 1,062,659
- ------------------------------------------------------------------------------------
Operating Income 706,689 549,421 381,678
- ------------------------------------------------------------------------------------
Interest Income (Expense):
Interest Income 60,896 67,562 26,790
Interest Expense (note 2) (30,714) (41,010) (12,348)
- ------------------------------------------------------------------------------------
Interest, Net 30,182 26,552 14,442
- ------------------------------------------------------------------------------------
Earnings Before Income Taxes 736,871 575,973 396,120
Income Taxes (note 3) 279,470 213,110 146,970
- ------------------------------------------------------------------------------------
Net Earnings $ 457,401 $ 362,863 $ 249,150
====================================================================================
Earnings Per Common and
Common Equivalent Share $ 1.01 $ .82 $ .60
====================================================================================
Weighted Average Number of Common and
Common Equivalent Shares (note 4) 453,037 444,989 415,997
====================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Balance Sheets
The Home Depot, Inc. and Subsidiaries
Amounts in thousands, except share data
<CAPTION>
January 30, January 31,
1994 1993
- ----------------------------------------------------------------------------
<C> <C> <C>
Assets
Current Assets:
Cash and Cash Equivalents $ 99,997 $ 121,744
Short-Term Investments, including
current maturities of
long-term investments (note 7) 330,976 292,451
Accounts Receivable, Net 198,431 177,502
Merchandise Inventories 1,293,477 939,824
Other Current Assets 43,720 30,452
- ----------------------------------------------------------------------------
Total Current Assets 1,966,601 1,561,973
- ----------------------------------------------------------------------------
Property and Equipment, at cost:
Land 814,440 502,022
Buildings 891,755 619,909
Furniture, Fixtures and Equipment 451,789 344,139
Leasehold Improvements 224,933 212,196
Construction in Progress 194,482 101,064
Capital Leases (note 5) 41,029 12,446
- ----------------------------------------------------------------------------
2,618,428 1,791,776
Less Accumulated Depreciation
and Amortization 247,524 183,792
- ----------------------------------------------------------------------------
Net Property and Equipment 2,370,904 1,607,984
Long-Term Investments (note 7) 281,623 694,276
Cost in Excess of the Fair Value of Net
Assets Acquired, net of accumulated
amortization of $5,788 at January 30, 1994 and
$5,155 at January 31, 1993 19,503 20,136
Other 62,258 47,421
- ----------------------------------------------------------------------------
$4,700,889 $3,931,790
============================================================================
<FN>
See accompanying notes to consolidated financial statements.
============================================================================
============================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
January 30, January 31,
1994 1993
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $ 521,246 $ 420,318
Accrued Salaries and
Related Expenses (note 8) 167,489 127,133
Sales Taxes Payable 57,590 46,320
Other Accrued Expenses (note 5) 184,462 135,478
Income Taxes Payable 40,303 23,868
Current Installments of Long-Term Debt (note 2) 1,548 1,828
- ----------------------------------------------------------------------------
Total Current Liabilities 972,638 754,945
- ----------------------------------------------------------------------------
Long-Term Debt, excluding current
installments (notes 2 and 6) 841,992 843,672
- ----------------------------------------------------------------------------
Other Long-Term Liabilities (note 5) 44,332 12,968
- ----------------------------------------------------------------------------
Deferred Income Taxes (note 3) 27,827 16,124
- ----------------------------------------------------------------------------
Stockholders' Equity (notes 2 and 4):
Common Stock, par value $.05.
Authorized: 1,000,000,000 shares;
issued and outstanding 449,364,000
shares at January 30, 1994 and
443,585,000 shares at January 31, 1993 22,468 22,179
Paid-in Capital 1,436,029 1,339,821
Retained Earnings 1,400,575 993,517
Cumulative Translation Adjustments (121) _
- ----------------------------------------------------------------------------
2,858,951 2,355,517
- ----------------------------------------------------------------------------
Less Notes Receivable From ESOP (note 6) 44,851 51,436
- ----------------------------------------------------------------------------
Total Stockholders' Equity 2,814,100 2,304,081
- ----------------------------------------------------------------------------
Commitments and Contingencies (notes 5, 8 and 10)
- ----------------------------------------------------------------------------
$4,700,889 $3,931,790
============================================================================
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Stockholders' Equity
The Home Depot, Inc. and Subsidiaries
Fiscal years ended January 30, 1994, January 31, 1993 and February 2, 1992
Amounts in thousands, except per share data
<CAPTION>
Common Stock Cumulative Notes Total
----------------- Paid-in Retained Translation Receivable Stockholders'
Shares Amount Capital Earnings Adjustments from ESOP Equity
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, February 3, 1991 354,197 $ 17,710 $ 252,494 $ 439,770 $ - $ (26,572) $ 683,402
Conversion of 6-3/4% Convertible
Subordinated Debentures, Net 35,627 1,781 253,769 _ _ _ 255,550
Sale of Common Stock in a Public
Stock Offering,
Net of Expenses of Sale 25,876 1,294 467,495 _ _ _ 468,789
Shares Sold Under Employee
Stock Purchase and Option Plans,
Net of Retirements (note 4) 6,511 325 33,500 _ _ _ 33,825
Tax Effect of Sale of Option
Shares by Employees _ _ 14,575 _ _ _ 14,575
Repayments of Notes Receivable
from ESOP (note 6) _ _ _ _ _ 8,159 8,159
Conversion of 6% Convertible
Subordinated Notes, Net 13 1 210 _ _ _ 211
Net Earnings _ _ _ 249,150 _ _ 249,150
Cash Dividends ($.05 per share) _ _ _ (22,449) _ _ (22,449)
- ------------------------------------------------------------------------------------------------------------------------------------
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 $8,419 (note 6) _ _ _ _ _ (33,023) (33,023)
Conversion of 6% Convertible
Subordinated Notes, Net 14,308 715 227,346 _ _ _ 228,061
Conversion of 4-1/2% Convertible
Subordinated Notes, Net (note 2) _ _ 10 _ _ _ 10
Net Earnings _ _ _ 362,863 _ _ 362,863
Cash Dividends ($.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
===================================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
The Home Depot, Inc. and Subsidiaries
Amounts in thousands
<CAPTION>
Fiscal Year Ended
--------------------------------------
January 30, January 31, February 2,
1994 1993 1992
<S> <C> <C> <C>
Cash Provided From Operations:
Net Earnings $ 457,401 $ 362,863 $ 249,150
Reconciliation of Net Earnings to
Net Cash Provided by Operations:
Depreciation and Amortization 89,839 69,536 52,283
Deferred Income Tax Expense
(Benefit) 12,578 5,465 (2,082)
Increase in Receivables, Net (36,658) (68,593) (30,147)
Increase in Merchandise
Inventories (353,653) (277,567) (153,235)
Increase in Accounts Payable
and Accrued Expenses 200,977 219,046 108,180
Increase in Income Taxes Payable 36,143 34,031 28,063
Other (10,120) (6,639) 14,405
- ------------------------------------------------------------------------------
Total (60,894) (24,721) 17,467
- ------------------------------------------------------------------------------
Net Cash Provided by Operations 396,507 338,142 266,617
- ------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Capital Expenditures,
Net of $36,294, $4,765 and $538 of
non-cash capital expenditures in
1993, 1992 and 1991, respectively (864,158) (432,513) (431,660)
Proceeds from Sale of Property
and Equipment 35,070 5,046 831
Sale (Purchase) of Short-Term
Investments, Net 14,903 (62,008) (132,124)
Purchase of Long-Term Investments (840,361) (2,029,214) (85,844)
Proceeds from Maturities of Long-
Term Investments 269,988 212,786 6,451
Proceeds from Sale of
Long-Term Investments 929,598 1,132,627 _
Advances Secured by Real Estate, Net 5,681 (54,022) -
- ------------------------------------------------------------------------------
Net Cash Used in Investing
Activities (449,279) (1,227,298) (642,346)
- ------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Proceeds from Long-Term Borrowings _ 805,000 5,200
Cash Loaned to ESOP _ (41,442) _
Repayments of Notes
Receivable from ESOP 6,585 8,419 8,159
Principal Repayments of Long-Term Debt (2,006) (2,133) (7,141)
Proceeds from Sale of Common Stock, Net 76,789 58,324 502,614
Cash Dividends Paid to Stockholders (50,343) (35,817) (22,449)
- ------------------------------------------------------------------------------
Net Cash Provided by
Financing Activities 31,025 792,351 486,383
-----------------------------------------------------------------------------
(Decrease) Increase in Cash and
Cash Equivalents (21,747) (96,805) 110,654
Cash and Cash Equivalents at
Beginning of Year 121,744 218,549 107,895
- ------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $99,997 $ 121,744 $ 218,549
==============================================================================
Supplemental Disclosure of Cash Payments Made For:
Interest (net of interest
capitalized) $ 28,778 $ 26,182 $ 16,366
Income Taxes $ 228,968 $ 169,617 119,901
- ------------------------------------------------------------------------------
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
Notes to Consolidated Financial Statements
The Home Depot, Inc. and Subsidiaries
NOTE 1. 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 1993, 1992 and
1991, which ended January 30, 1994, January 31, 1993 and February
2, 1992, respectively, consisted of 52 weeks.
Basis of Presentation
- ----------------------------------------------------------------------------
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. 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 cost, which approximate market value, and
consist of preferred stocks, commercial paper, money market
funds, promissory notes and U.S. government agency securities.
Investments
- ----------------------------------------------------------------------------
The Company's short-term investments, consisting primarily of
debt securities, are valued at amortized cost which approximates
market. Certain long-term investments have been designated as
being held available for sale, and are recorded at the lower of
amortized cost or market. The Company has the intent and ability
to hold its remaining long-term investments until maturity.
Accordingly, these long-term investments are valued at amortized
cost. However, the Company's intent to hold long-term investments
until maturity is based upon an evaluation of anticipated future
events. Should the actual events differ substantially from the
Company's forecast, the intent to hold long-term investments
until maturity may change. The cost of investments sold is
determined on the specific identification method.
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 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.
<PAGE>
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 20-45 years
Furniture, fixtures and equipment 5-20 years
Leasehold improvements 8-30 years
- ----------------------------------------------------------------------------
The cost in excess of the fair value of net assets acquired is
being amortized on a straight-line basis over 40 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.
The Company's 4-1/2% Convertible Subordinated Notes due
1997, issued in 1992, are common stock equivalents. The Company's
6% Convertible Subordinated Notes, issued in 1990, were common
stock equivalents prior to their conversion to equity in 1992.
Because shares issuable upon conversion of either of these debt
issues were not dilutive in 1991 and 1992, they are not included
in the earnings per share computations for such years. In 1993,
shares issuable upon conversion of the 4-1/2% Convertible
Subordinated Notes were dilutive, but had no impact on earnings
per share.
Employee Stock Ownership Plan
- ----------------------------------------------------------------------------
For all shares purchased by the Employee Stock Ownership Plan
(ESOP) prior to December 15, 1993, 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
15, 1993, the Company's contributions to the ESOP will be 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
results of operations are not material.
Recent Accounting Pronouncements
- ----------------------------------------------------------------------------
In May 1993, Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115), was issued. 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.
<PAGE>
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. The Company plans to adopt
SFAS 115 in fiscal year 1994. SFAS 115 will not have a
significant impact on the Company's results of operations.
Reclassifications
- ----------------------------------------------------------------------------
Certain balances in prior fiscal years have been reclassified to
conform with the presentation adopted in the current fiscal year.
NOTE 2. LONG-TERM DEBT
<TABLE>
The Company's long-term debt consists of the following (in
thousands):
<CAPTION>
January 30, January 31,
1994 1993
<S> <C> <C>
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. $804,990 $804,990
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 2.9% during
fiscal 1993, payable in varying
installments through 1999 and
$5,200 payable on September 1, 2011. 10,500 11,133
Installment Notes Payable of $10,092 and
$12,102 in 1993 and 1992, respectively,
interest imputed at rates between
9.5% and 11.5%, payable in varying
installments through 2000. 7,592 8,862
Other 458 515
- ----------------------------------------------------------------------------
Total long-term debt 843,540 845,500
Less current installments 1,548 1,828
- ----------------------------------------------------------------------------
Long-term debt,
excluding current installments $841,992 $843,672
============================================================================
</TABLE>
Maturities of long-term debt are $1,548,000 for fiscal 1994,
$21,854,000 for fiscal 1995, $1,240,000 for fiscal 1996,
$806,129,000 for fiscal 1997 and $3,902,000 for fiscal 1998.
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 may be redeemed in
whole or in part during the period beginning March 3, 1995 and
ending on February 14, 1996 at 101.125% of their principal amount
and thereafter at 100% of their principal amount. The Notes are
not subject to sinking fund provisions.
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 30, 1994. The restrictive
covenants related to letter of credit agreements securing the
industrial revenue bonds are no more restrictive than those
referenced or described above.
<PAGE>
Interest expense in the accompanying consolidated statements of
earnings is net of interest capitalized of $13,912,000 in fiscal
1993, $7,549,000 in fiscal 1992 and $11,676,000 in fiscal 1991.
Based on discounted cash flows of future payment streams,
assuming rates equivalent to the average yield on investment
securities that would be sold to retire existing debt, the fair
value of the 7.95% unsecured ESOP Note, the Variable Rate
Industrial Revenue Bonds, the Installment Notes and other notes
payable as of January 30, 1994 is $40,604,000. The fair value of
the 4-1/2% Convertible Notes as of January 30, 1994, based on the
quoted market price on the last business day of the year, is
$933,788,000.
NOTE 3. 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.
<TABLE>
<CAPTION>
Income tax expense for the fiscal year ended January 30,
1994 is comprised of the following (in thousands):
<S> <C>
Income tax expense from operations $281,600
Cumulative effect of a change in accounting principle (2,130)
- ------------------------------------------------------------------------------
Total $279,470
==============================================================================
</TABLE>
<TABLE>
The provision for income taxes from operations consists of the
following (in thousands):
<CAPTION>
Fiscal Year Ended
--------------------------------------------
January 30, January 31, February 2,
1994 1993 1992
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $236,888 $181,727 $ 133,139
State 32,134 25,918 15,913
- ------------------------------------------------------------------------------------
269,022 207,645 149,052
- -------------------------------------------------------------------------------------
Deferred:
Federal 10,212 4,413 (1,676)
State 2,366 1,052 (406)
- ------------------------------------------------------------------------------------
12,578 5,465 (2,082)
- ------------------------------------------------------------------------------------
Total $281,600 $ 213,110 $146,970
</TABLE>
<TABLE>
The significant components of deferred income tax expense from
operations for the fiscal year ended January 30, 1994 are as
follows (in thousands):
<CAPTION>
<S> <C>
Deferred tax expense, exclusive of other
components listed below $12,399
Adjustments to deferred tax assets and liabilities for
enacted changes in tax rates and laws 307
Other (128)
- ------------------------------------------------------------------------------------
Total $12,578
====================================================================================
</TABLE>
In August 1993, the Omnibus Budget Reconciliation Act of 1993 was
enacted into law. Accordingly, the effect of the increase in the
corporate Federal tax rate from 34% to 35% was recorded in the
Company's fiscal third quarter results by cumulative adjustment
for the first half of the fiscal year. Including the effect of
the Federal tax rate increase, the Company's combined state and
Federal effective tax rate from operations, net of offsets
generated by targeted jobs tax credits, is approximately 38.2%
for fiscal year 1993. The effective tax rates for fiscal years
1992 and 1991 were 37.0% and 37.1%, respectively. 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):
<TABLE>
<CAPTION>
Fiscal Year Ended
--------------------------------------------
January 30, January 31, February 2,
1994 1993 1992
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income taxes at Federal statutory rate $ 257,905 $195,831 $ 134,681
State income taxes, net of Federal
income tax benefit 22,425 17,800 10,235
Other, net 1,270 (521) 2,054
- ------------------------------------------------------------------------------------
Total $281,600 $213,110 $146,970
====================================================================================
</TABLE>
<PAGE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at January 30, 1994 are as follows (in thousands):
<TABLE>
<CAPTION>
Deferred Tax Assets:
- ------------------------------------------------------------------------------------
<S> <C>
Accrued self-insurance liabilities $ 26,813
Other accrued liabilities 16,300
- ------------------------------------------------------------------------------------
Net deferred tax assets $ 43,113
- ------------------------------------------------------------------------------------
Deferred Tax Liabilities:
Accelerated depreciation $ (62,835)
Other (8,105)
- ------------------------------------------------------------------------------------
Total gross deferred liabilities $ (70,940)
Net deferred tax liability $ (27,827)
====================================================================================
</TABLE>
No valuation allowance was recorded against the deferred tax
assets at February 1, 1993 or January 30, 1994. 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.
<TABLE>
Deferred income taxes result 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 are as follows (in thousands):
<CAPTION>
Fiscal Year Ended
--------------------------
January 31, February 2,
1993 1992
- ------------------------------------------------------------------------------------
<S> <C> <C>
Accelerated depreciation $12,245 $ 7,708
Accrued self-insurance liabilities (9,132) (5,463)
Other accrued liabilities (574) (5,316)
Other, net 2,926 989
- ------------------------------------------------------------------------------------
Total $ 5,465 $(2,082)
====================================================================================
</TABLE>
NOTE 4. 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 43,408,150 shares, net of cancellations (of which 38,861,116
have been exercised), have been granted at $.16 to $18.83 per
share as of January 30, 1994. 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 have been
exercised), have been granted at $1.53 to $9.86 per share as of
January 30, 1994. Such options may be exercised at varying rates
commencing on the first 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 1% 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 5,130,259 shares, net of
cancellations (of which 179,749 have been exercised), have been
granted at $24.50 to $48.94 per share. As of January 30, 1994,
the maximum shares available under this plan for future grants
were 27,589,560.
<PAGE>
<TABLE>
The following summarizes shares outstanding under the plans at
January 30, 1994, January 31, 1993 and February 2, 1992 and
changes during the fiscal years then ended (in thousands of
shares):
<CAPTION>
Fiscal Year Ended
--------------------------------------------
January 30, January 31, February 2,
1994 1993 1992
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Number of option shares
At beginning of year
Outstanding 12,455 14,750 16,640
Exercisable 4,528 4,576 3,936
During the year
Issued 1,831 3,549 3,042
Cancelled 332 415 506
Became exercisable 2,536 5,381 5,066
Exercised 4,307 5,429 4,426
At end of year
Outstanding 9,647 12,455 14,750
Exercisable 2,757 4,528 4,576
Average price per share
Outstanding at the
end of year $23.50 $14.89 $7.33
Exercised during the year $ 7.42 $ 4.99 $3.77
</TABLE>
In addition, the Company had 3,795,923 shares available for
future grants under the Employee Stock Purchase Plan at January
30, 1994. This plan enables the Company to grant substantially
all full-time employees options to purchase up to 17,137,500
shares of common stock, of which 13,341,577 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 1993, options
for 1,525,074 shares were exercised at an average price of $30.96
per share. At January 30, 1994, 889,464 options were outstanding,
net of cancellations, at an average price of $35.14 per share.
NOTE 5. 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 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 30, 1994, January 31,
1993 and February 2, 1992 amounted to $137,252,000, $110,577,000
and $87,750,000, 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 30,
1994, January 31, 1993 and February 2, 1992 were approximately
$8,370,000, $6,855,000 and $4,381,000, respectively.
<TABLE>
The approximate future minimum lease payments under capital and
operating leases at January 30, 1994 are as follows (in
thousands):
<CAPTION>
Capital Operating
Fiscal year leases leases
<C> <C> <C>
1994 $ 9,064 $ 147,557
1995 9,064 156,645
1996 9,064 149,081
1997 9,064 139,969
1998 9,072 130,919
Thereafter 137,325 1,498,308
- ---------------------------------------------------------------------
182,653 $2,222,479
====================
Less: Imputed interest (141,822)
- -----------------------------------------
Net present value of
capital lease obligations 40,831
Less: Current installments (561)
- -----------------------------------------
Long-term, excluding
current installments $ 40,270
=========================================
</TABLE>
<PAGE>
On the Consolidated Balance Sheet the short-term and long-term
obligations for capital leases are included in Other Accrued
Expenses and Other Long-Term Liabilities, respectively. The
assets recorded at January 30, 1994 and January 31, 1993, net of
amortization, in Net Property and Equipment amounted to
$40,608,000 and $12,446,000, respectively.
NOTE 6. EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
During fiscal 1988, the Company established a leveraged Employee
Stock Ownership Plan and Trust (ESOP) covering substantially all
full-time employees. At January 30, 1994, the ESOP held a total
of 7,911,264 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. The private placement loan and remaining $61,442,000 of
Company loans to the ESOP have similar terms. Maturities are
$40,000,000 in August, 1995 and $41,442,000 in August, 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. Each year the Company makes contributions to the ESOP
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. 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 $6,000,000, $8,200,000
and $8,000,000 for the fiscal years 1993, 1992 and 1991,
respectively.
NOTE 7. INVESTMENTS
<TABLE>
The Company's investments, including aggregate estimated market
values by balance sheet classification consisted of the following
at January 30, 1994 and January 31, 1993 (in thousands):
<CAPTION>
January 30, 1994 January 31, 1993
--------------------------------------------------------------------------------------------
Short-term, Short-term,
including current Long-term including current Long-term Long-term
maturities of held available maturities of held available held to
long-term for sale long-term for sale maturity
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tax exempt notes and bonds $ 6,897 $ 98,100 $ 47,134 $185,662 $ _
U.S. Treasury securities 1,427 59,858 103,697 182,968 _
U.S. government agency securities 67,405 7,536 21,625 4,990 _
Commercial paper 16,496 _ _ _ _
Certificates of deposit _ 30,000 8,013 _ _
Corporate bonds 184,278 25,624 _ 218,110 _
Preferred stock 12,905 33,926 5,000 _ 40,832
Promissory notes _ _ 24,517 _ _
Asset-backed securities 41,568 19,720 82,465 61,529 _
Other _ 6,859 _ _ 185
- ------------------------------------------------------------------------------------
Total $ 330,976 $281,623 $292,451 $653,259 $ 41,017
- ------------------------------------------------------------------------------------
Estimated market value $ 332,524 $283,325 $293,518 $662,775 $ 41,195
====================================================================================
</TABLE>
Estimated market values of investments are based on quoted market
prices on the last business day of the fiscal year.
<PAGE>
NOTE 8. COMMITMENTS AND CONTINGENCIES
At January 30, 1994, the Company was contingently liable for
approximately $111,906,000 under outstanding letters of credit
issued in connection with purchase commitments.
Under the Company's workers' compensation program, coverage is obtained
for significant exposures as well as those risks required to be
insured by law or contract. It is the Company's preference to
retain a significant portion of certain expected losses related
to workers' compensation. Provisions for expected losses under
this program are recorded based upon the Company's estimates of
the aggregate liability for claims incurred. Included in Accrued
Salaries and Related Expenses on the Consolidated Balance Sheets
as of January 30, 1994 and January 31, 1993 are accruals for
workers' compensation liability totaling $52,738,000 and
$32,708,000, respectively.
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 9. QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
The following is a summary of the unaudited quarterly results of
operations for the fiscal years ended January 30, 1994 and
January 31, 1993 (in thousands, except per share data):
Net earnings
<CAPTION>
Percent per common
increase in and common
comparable Gross Net equivalent
Net Sales store sales profit earnings share
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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
============================================================================================================================
Fiscal year ended January 31, 1993:
First Quarter $ 1,639,575 15% $ 446,000 $ 79,496$ .18
Second Quarter 1,856,380 14% 502,420 101,867 .23
Third Quarter 1,834,006 16% 495,093 84,360 .19
Fourth Quarter 1,818,475 15% 525,555 97,140 .21
- ----------------------------------------------------------------------------------------------------------------------------
$ 7,148,436 15% $1,969,068 $362,863 $ .82
============================================================================================================================
</TABLE>
NOTE 10. SUBSEQUENT EVENT
Effective February 28, 1994, the Company entered into a
partnership and, as a result, acquired 75% of a Canadian company
(Aikenhead's Home Improvement Warehouse) which currently operates
seven warehouse-style home improvement stores in Toronto, London,
and Kitchener, Ontario, Canada. 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 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% interest in the Canadian company
was approximately $163,000,000 and will be 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 will be recorded as goodwill and
amortized over 40 years.
<PAGE>
Independent Auditors' Report
The Home Depot, Inc. and Subsidiaries
KPMG Peat Marwick
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 30, 1994 and
January 31, 1993, and the related consolidated statements of
earnings, stockholders' equity, and cash flows for each of the
years in the three-year period ended January 30, 1994. 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 30, 1994
and January 31, 1993, and the results of their operations and
their cash flows for each of the years in the three-year period
ended January 30, 1994 in conformity with generally accepted
accounting principles.
/s/KPMG Peat Marwick
KPMG Peat Marwick
Atlanta, Georgia
March 11, 1994
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
Homerlease, Inc. Delaware
M B Food Service, Inc. Delaware
Home Depot of Canada Inc. Canada
THD Bermuda, LTD. Bermuda
Home Depot NRO Holdings, Inc. Canada
Jabs Realty, Inc. Georgia
Homer II, Inc. Delaware
Homer TLC, Inc. Delaware
Home Depot Recycling, Inc. Georgia
The Home Depot Special
Services, Inc. Delaware
Go Blue, Inc. Georgia
The Home Depot Canada A Canadian Aikenhead's
partnership Home Improvement
in which the Warehouse
Registrant owns
a 75% interest
KPMG Peat Marwick
Certified Public Accountants
303 Peachtree Street, N.E. Telephone 404 222 3000
Suite 2000 Telefax 404 222 3050
Atlanta, GA 30308
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
The Home Depot, Inc.:
We consent to incorporation by reference in the Registration Statements
(No.'s 33-46476, 33-22531, and 33-22299) on Form S-8 of The Home Depot,
Inc. of our report dated March 11, 1994, relating to the consolidated
balance sheets of The Home Depot, Inc. and subsidiaries as of January
30, 1994 and January 31, 1993, and the related consolidated statements
of earnings, stockholders' equity, and cash flows and related schedules
for each of the years in the three-year period ended January 30, 1994,
which reports are included or incorporated by reference in the January
30, 1994 Annual Report on Form 10-K of The Home Depot, Inc.
/s/KPMG PEAT MARWICK
Atlanta, Georgia
April 15, 1994
POWER OF ATTORNEY
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 of Form 10-K for the
fiscal year of the Corporation ended January 30, 1994, 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
16th day of February, 1994.
/s/ Frank Borman
ACKNOWLEDGEMENT
BEFORE me this 16th day of February, 1994, 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
as his true act and deed.
/s/Patricia M. Frietze
NOTARY PUBLIC
State of New Mexico
My Commission Expires: November 11, 1995
<PAGE>
POWER OF ATTORNEY
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 Annual Report of the Corporation of Form 10-K for the
fiscal year of the Corporation ended January 30, 1994, 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
18th day of February, 1994.
/s/ Berry R. Cox
ACKNOWLEDGEMENT
BEFORE me this 18th day of February, 1994, 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/Shirley Young
NOTARY PUBLIC
State of Texas
My Commission Expires: May 21, 1997
<PAGE>
POWER OF ATTORNEY
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
KNOW ALL MEN BY THESE PRESENTS, that I, Peter S. Gold, 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 of Form 10-K for the
fiscal year of the Corporation ended January 30, 1994, 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
17th day of February, 1994.
/s/ Peter S. Gold
ACKNOWLEDGEMENT
BEFORE me this 17th day of February, 1994, came Peter S. Gold,
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/Julie Ann Gold
NOTARY PUBLIC
State of California
My Commission Expires: September 5, 1996
<PAGE>
POWER OF ATTORNEY
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 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 of Form 10-K for the fiscal year of the Corporation
ended January 30, 1994, 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
22nd day of February, 1994.
/s/ Milledge A. Hart, III
ACKNOWLEDGEMENT
BEFORE me this 22nd day of February, 1994, 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/Jodie L. Patnoe
NOTARY PUBLIC
State of Texas
My Commission Expires: June 10, 1995
<PAGE>
POWER OF ATTORNEY
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 of Form 10-K for the fiscal year of the Corporation
ended January 30, 1994, 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
28th day of February, 1994.
/s/ James W. Inglis
ACKNOWLEDGEMENT
BEFORE me this 28th day of February, 1994, 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/Diana S. Eastman
NOTARY PUBLIC
State of Georgia
My Commission Expires: January 21, 1997
<PAGE>
POWER OF ATTORNEY
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 of Form 10-K for the fiscal year of the Corporation
ended January 30, 1994, 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
18th day of April, 1994.
/s/ Donald R. Keough
ACKNOWLEDGEMENT
BEFORE me this 18th day of April, 1994, 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
<PAGE>
POWER OF ATTORNEY
STATE OF GEORGIA
COUNTY OF COBB
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 of Form 10-K for the fiscal year of the Corporation
ended January 30, 1994, 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
23rd day of February, 1994.
/s/ Kenneth G. Langone
ACKNOWLEDGEMENT
BEFORE me this 23rd day of February, 1994, 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/Margie Bidwell
NOTARY PUBLIC
State of Georgia
My Commission Expires: August 14, 1994
<PAGE>
POWER OF ATTORNEY
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 of Form 10-K for the fiscal year of the Corporation
ended January 30, 1994, 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
15th day of February, 1994.
/s/ Margaret Faye Wilson
ACKNOWLEDGEMENT
BEFORE me this 15th day of February, 1994, 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: April 29, 1994
