<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 2, 1997
- OR -
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8207
THE HOME DEPOT, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3261426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2455 Paces Ferry Road N.W. Atlanta, Georgia 30339-4024
(Address of principal executive offices) (Zip Code)
(770)433-8211
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
$.05 par value 731,543,951 Shares, as of November 19, 1997
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
November 2, 1997
Part I. Financial Information:
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF EARNINGS -
Three-Month and Nine-Month Periods
Ended November 2, 1997 and October 27, 1996 3
CONSOLIDATED CONDENSED BALANCE SHEETS -
As of November 2, 1997 and February 2, 1997 4
CONSOLIDATED STATEMENTS OF CASH FLOWS -
Nine-Month Periods Ended November 2, 1997
and October 27, 1996...................... 5
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS 6 -7
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition.................8 - 11
Part II. Other Information:
Item 3. Submission of Matters to a Vote of Security Holders 12
Item 4. Exhibits and Reports on Form 8-K 12
Signature Page 13
Index to Exhibits 14
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
November 2, October 27, November 2, October 27,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales $6,217,045 $4,921,831 $18,424,540 $14,576,963
Cost of Merchandise Sold 4,490,920 3,583,580 13,345,917 10,581,887
Gross Profit 1,726,125 1,338,251 5,078,623 3,995,076
Operating Expenses:
Selling and Store
Operating 1,113,079 877,861 3,225,873 2,594,927
Pre-Opening 15,781 14,638 42,699 37,640
General and Administrative 106,304 81,889 305,051 234,097
Non-Recurring Charge 104,000 -0- 104,000 -0-
Total Operating Expenses 1,339,164 974,388 3,677,623 2,866,664
Operating Income 386,961 363,863 1,401,000 1,128,412
Interest Income (Expense):
Interest and Investment
Income 12,817 5,856 37,051 12,815
Interest Expense (10,043) (2,834) (31,735) (5,568)
Interest, Net 2,774 3,022 5,316 7,247
Minority Interest (3,687) (2,774) (10,906) (6,425)
Earnings Before Income
Taxes 386,048 364,111 1,395,410 1,129,234
Income Taxes 150,170 142,740 542,820 442,670
Net Earnings $ 235,878 $ 221,371 $ 852,590 $ 686,564
Earnings Per Common and
Common Equivalent Share $ 0.32 $ 0.30 $ 1.14 $ 0.95
Dividends Per Share $ 0.05 $ 0.04 $ 0.14 $ 0.11
Weighted Average Number of
Common and Common
Equivalent Shares 765,560 731,888 763,706 725,366
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE HOME DEPOT INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(In Thousands, Except Share Data)
November 2, February 2,
ASSETS 1997 1997
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 458,193 $ 146,006
Short-Term Investments 287,501 412,430
Receivables, Net 532,560 388,416
Merchandise Inventories 3,477,625 2,708,283
Other Current Assets 77,722 54,238
Total Current Assets 4,833,601 3,709,373
Property and Equipment, at cost 7,098,066 6,149,816
Less: Accumulated Depreciation
and Amortization (915,218) (712,770)
Net Property and Equipment 6,182,848 5,437,046
Long-Term Investments 15,000 8,480
Notes Receivable 27,313 39,518
Cost in Excess of the Fair Value
of Net Assets Acquired 81,661 86,540
Other 73,682 60,753
$11,214,105 $ 9,341,710
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 1,758,277 $ 1,089,736
Accrued Salaries and
Related Expenses 291,041 249,356
Sales Taxes Payable 163,909 129,284
Other Accrued Expenses 507,443 322,503
Income Taxes Payable 32,076 48,728
Current Installments of
Long-Term Debt 7,905 2,519
Total Current Liabilities 2,760,651 1,842,126
Long-Term Debt, excluding current
installments 1,285,581 1,246,593
Other Long-Term Liabilities 176,637 134,034
Deferred Income Taxes 66,308 66,020
Minority Interest 110,701 97,751
Stockholders' Equity:
Common Stock, par value $0.05.
Authorized: 1,000,000,000 shares;
issued and outstanding -
731,451,000 shares at 11/2/97
and 720,773,000 shares at
2/2/97 36,572 36,038
Paid-In Capital 2,636,175 2,511,081
Retained Earnings 4,160,505 3,406,592
Cumulative Translation Adjustments (14,875) 2,173
Unrealized Loss on Investments, Net (803) (168)
6,817,574 5,955,716
Less: Shares Held in Employee
Benefit Trust 1,116 530
Deferred Compensation Plans 2,231 ----
Total Stockholders' Equity 6,814,227 5,955,186
$11,214,105 $ 9,341,710
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE HOME DEPOT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
Nine Months Ended
November 2, 1997 October 27, 1996
Cash Provided from Operations:
<S> <C> <C>
Net Earnings $ 852,590 $ 686,564
Reconciliation of Net Earnings to Net Cash
Provided by Operations:
Depreciation and Amortization 204,737 168,502
Deferred Income Tax Expense 657 18,747
Increase in Receivables, Net (122,557) (56,057)
Increase in Merchandise Inventories (755,677) (473,854)
Increase in Accounts Payable and
Accrued Expenses 952,948 732,823
Increase in Income Taxes Payable 371 13,252
Other 14,357 35,490
Net Cash Provided by Operations 1,147,426 1,125,467
Cash Flows From Investing Activities:
Capital Expenditures (984,915) (874,690)
Proceeds from Sales of Property
and Equipment 45,904 17,650
Proceeds from Sales of Investments ---- 40,737
Purchase of Investments (193,576) (189,105)
Proceeds from Maturities of Investments 311,487 25,836
Repayments of Advances Secured by
Real Estate, Net (1,046) 13,128
Net Cash Used in Investing Activities (822,146) (966,444)
Cash Flows From Financing Activities:
Proceeds from Long-Term Borrowings 14,998 1,092,960
Repayments of Commercial Paper
Obligations, Net ---- (620,000)
Repayments of Notes Receivable from ESOP ---- 8,074
Principal Repayments of Long-Term Debt (37,151) (2,077)
Proceeds from Sale of Common Stock, Net 105,834 93,378
Cash Dividends Paid to Stockholders (101,860) (81,383)
Contributions to Deferred Compensation
Plan Trust (197) ----
Shares Purchased for Employee Benefit Trust (587) ----
Minority Interest Contributions to
Partnership 6,146 13,208
Net Cash (Used In)/Provided by
Financing Activities (12,817) 504,160
Effect of Exchange Rate Changes on
Cash, Net (276) 248
Increase in Cash and Cash Equivalents 312,187 663,431
Cash and Cash Equivalents at Beginning
of Period 146,006 53,269
Cash and Cash Equivalents at End of Period $ 458,193 $ 716,700
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies:
Basis of Presentation - The accompanying consolidated
condensed financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been
included. These statements should be read in conjunction with
the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the
year ended February 2, 1997, as filed with the Securities and
Exchange Commission (File No. 1-8207).
2. Joint Venture Agreement with S.A.C.I. Falabella
On June 11, 1997, the Company entered into an agreement
formalizing a joint venture with S.A.C.I. Falabella
("Falabella"), a leading department store retailer in Chile,
to facilitate The Home Depot's entry into the Chilean market.
The Home Depot's controlling share of the joint venture is
66.67 percent. The alliance with Falabella is expected to
enhance The Home Depot's presence in the Chilean market, offer
attractive real estate opportunities and provide assistance
with, among other things, systems, credit marketing and
distribution logistics.
3. Stock Split
On May 28, 1997, the Board of Directors authorized a three-for-
two stock split, effected in the form of a stock dividend,
which was mailed on July 3, 1997, to stockholders of record on
June 12, 1997. This distribution resulted in a transfer of
$12,160,000 to common stock from paid-in capital. The
accompanying financial statements and management's discussion
and analysis of results of operations and financial condition,
including all share and per share amounts, have been adjusted
to reflect this transaction.
4. Maintenance Warehouse Merger
On March 14, 1997, the Company acquired Maintenance
Warehouse/America Corp. ("Maintenance Warehouse") through the
exchange of all the common stock of Maintenance Warehouse for
shares of The Home Depot, Inc. Common Stock. Maintenance
Warehouse, which had sales of approximately $130 million in
1996, is the leading direct-mail marketer of maintenance,
repair and operations products serving the U.S. building and
facilities management market. The San Diego-based company
continues to operate under its own name as a subsidiary of the
company.
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)
5. Lawsuit Settlement
On September 19, 1997, the Company, without admitting any
wrongdoing, entered into a settlement agreement with plaintiffs
in the class action lawsuit Butler et. al. v. Home Depot, Inc.
in which the plaintiffs had asserted claims of gender
discrimination. The Company also has reached agreements in
principle to resolve three other lawsuits: Griffin et. al. v.
Home Depot, Inc.; Tostajada v. Home Depot, Inc.; and Fleniken
v. Home Depot, Inc., each of which involved claims of alleged
gender discrimination. The Company recorded a pretax non-
recurring charge of $104 million during the third quarter of
fiscal 1997. The one-time charge includes expected payments
to the plaintiff class members in Butler and their attorneys,
internal costs related to enhancing certain human resource
programs, and settlement terms for the Griffin, Tostajada and
Fleniken cases.
6. Implementation of New Accounting Standard
In March 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128 ("SFAS 128"),
"Earnings Per Share." This statement is effective for financial
statements issued for interim and annual periods ending after
December 15, 1997. In the fourth quarter of fiscal 1997, the
Company will begin reporting earnings per share based on the
requirements of SFAS 128, which will include restating all
prior periods presented, if appropriate. The Company currently
reports primary earnings per share ("EPS") in accordance
with Accounting Principles Board Opinion No. 15 ("APB No. 15"),
"Earnings Per Share." APB No. 15 requires the Primary EPS
calculation to include convertible securities and stock options
that are considered common stock equivalents. All of the
Company's convertible securities and stock options are common
stock equivalents, and therefore, are included in the calculation
of Primary EPS. The diluted EPS calculation under SFAS 128
requires similar treatment for common stock equivalents.
Implementation of SFAS 128 is not expected to have a material
impact on the Company's reported Earnings Per Share.
7. Subsequent Event
On November 21, 1997, the Company acquired for cash the assets
of privately held DeeKay Enterprises, Inc., owner of National
Blind and Wallpaper Factory, a Detroit based telephone mail
order service, and Habitat Wallpaper and Blinds, which operates
13 retail stores located in Illinois, Missouri and Ohio. The
acquisition, which will not have a material effect on the
Company's results of operations, will be accounted for using
the purchase method of accounting.
<PAGE>
<TABLE>
<CAPTION>
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The data below reflects selected sales data, the percentage relationship
between sales and major categories in the Consolidated Statements of
Earnings, and the percentage change in the dollar amounts of each of
the items.
Percentage
Increase
(Decrease) in
Three Months Ended Nine Months Ended Dollar Amounts
Selected Consolidated Nov. 2, Oct. 27, Nov. 2, Oct. 27, Three Nine
Statements of Earnings Data 1997 1996 1997 1996 Months Months
<S> <C> <C> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 100.0% 26.3% 26.4%
Gross Profit 27.8 27.2 27.6 27.4 29.0 27.1
Operating Expenses:
Selling and Store
Operating 17.9 17.8 17.5 17.8 26.8 24.3
Pre-Opening 0.3 0.3 0.2 0.3 7.8 13.4
General and
Administrative 1.7 1.7 1.7 1.6 29.8 30.3
Non-Recurring Charge 1.7 0.0 0.6 0.0 N/A N/A
Total Operating
Expenses 21.6 19.8 20.0 19.7 37.4 28.3
Operating Income 6.2 7.4 7.6 7.7 6.3 24.2
Interest Income
(Expense):
Interest and Investment
Income 0.2 0.1 0.2 0.1 118.9 189.1
Interest Expense (0.2) (0.0) (0.2) (0.1) 254.4 470.0
Interest, Net 0.0 0.1 0.0 0.0 (8.2) (26.6)
Minority Interest (0.0) (0.1) (0.0) (0.0) 32.9 69.7
Earnings Before
Income Taxes 6.2 7.4 7.6 7.7 6.0 23.6
Income Taxes 2.4 2.9 3.0 3.1 5.2 22.6
Net Earnings 3.8% 4.5% 4.6% 4.7% 6.6 24.2
Selected Consolidated
Sales Data
Number of
Transactions (000's) 138,813 115,656 417,552 344,705 20.0 21.1
Average Amount of
Sale Per Transaction $44.50 $42.56 $43.89 $42.29 4.6 3.8
Weighted Average Weekly
Sales Per Operating
Store (000's) $ 838 $ 815 $ 865 $ 836 2.8 3.5
Weighted Average
Sales Per Square Foot $ 411 $ 403 $ 424 $ 413 1.9 2.6
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS - (Continued)
Sales for the third quarter of fiscal 1997 increased 26% to
$6,217,045,000 compared to sales of $4,921,831,000 for the third
quarter of fiscal 1996. For the first nine months of fiscal 1997,
sales increased 26% to $18,424,540,000 from sales of $14,576,963,000
for the comparable period in fiscal 1996. The sales increase for
both periods was primarily attributable to new stores (583 at the end
of the third quarter of fiscal 1997 compared to 479 at the end of the
third quarter of fiscal 1996) and a comparable store-for-store sales
increase of 7% and 8% for the third quarter and first nine months of
fiscal 1997, respectively.
Gross profit as a percent of sales was 27.8% for the third quarter of
fiscal 1997 compared to 27.2% for the comparable period of fiscal
1996. The increase for the quarter was primarily attributable to
merchandise line reviews, which resulted in lower cost of goods in
certain product categories, other merchandising initiatives, improved
shrink results, product mix changes and lower and more stable lumber
costs. For the first nine months of fiscal 1997 gross profit as a
percent of sales was 27.6% compared to 27.4% for the comparable
period of fiscal 1996, also reflecting the improvements as described
above.
Operating expenses as a percent of sales increased to 21.6% for the
third quarter of fiscal 1997 from 19.8% for the same period of
fiscal 1996. Operating expenses included a pre-tax non-recurring
charge of $104,000,000 related to the settlements of a class action
lawsuit and three other lawsuits. Excluding the non-recurring
charge, operating expenses as a percent of sales were 19.9% for the
third quarter of fiscal 1997. Selling and store operating expenses
as a percent of sales increased to 17.9% for the third quarter of
fiscal 1997 from 17.8% for the third quarter of fiscal 1996. The
increase for the third quarter was attributable to, among other
things, higher selling payroll related to an increased focus on
certain merchandising categories that are more labor intensive,
higher store relocation costs (estimated unrecoverable costs for two
future store relocations were expensed in the third quarter of fiscal
1997 compared to expenses for one store relocation in the third
quarter of fiscal 1996), additional store real estate related costs,
and expenses for two distribution centers that are expected to close
when the Company's Import Distribution Center in Savannah, Georgia is
fully operational in December of 1997. Partially offsetting these
increases were lower net advertising expenses resulting from higher
marketing funds provided by vendors.
For the first nine months of fiscal 1997 operating expenses as a
percent of sales increased to 20.0% from 19.7% for the same period of
fiscal 1996. Excluding the non-recurring charge, operating expenses
as a percent of sales were 19.4% for the first nine months of fiscal
1997. Selling and store operating expenses, as a percent of sales,
decreased to 17.5% for the first nine months of fiscal 1997 from
17.8% for the first nine months of fiscal 1996. The decrease was
partially attributable to leveraging certain costs as a result of a
comparable store-for-store sales increases of 8% for the first nine
months of fiscal 1997. In addition, the
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS - (Continued)
Company incurred one-time expenditures related to the Olympic games
during fiscal 1996. Also, net advertising expenses were lower as a
percent of sales as described above.
Pre-opening expenses as a percent of sales were 0.3% and 0.2% for the
third quarter and first nine months of fiscal 1997, respectively,
compared to 0.3% for both the third quarter and first nine months of
fiscal 1996, respectively. The Company opened 24 new stores and
relocated 2 stores in the third quarter of fiscal 1997 compared to
opening 23 new stores in the third quarter of fiscal 1996. General
and administrative expenses as a percent of sales were 1.7% for the
third quarter of both fiscal 1997 and fiscal 1996 and 1.7% for the
first nine months of fiscal 1997 as compared to 1.6% for the first
nine months of fiscal 1996. The increase for the nine month period
was primarily attributable to costs incurred for initiatives that are
expected to provide future benefits.
Net interest income as a percent of sales was 0.0% for the third
quarter and first nine months of 1997 compared to 0.1% for the third
quarter and 0.0% for the first nine months of fiscal 1996. Interest
and investment income as a percent of sales for the third quarter and
first nine months of fiscal 1997 increased to 0.2% from 0.1% for the
third quarter and first nine months of fiscal 1996 due to investment
income generated from the remaining proceeds of the 3.25% Convertible
Subordinated Notes issued in October 1996 (the "Notes"). Interest
expense as a percent of sales for the third quarter and first nine
months of fiscal 1997 increased to 0.2% from 0.0% for the third
quarter and 0.1% for the first nine months of fiscal 1996 due to the
interest expense on the Notes.
The Company's combined federal and state effective income tax rate
decreased to 38.9% for the third quarter and first nine months of
fiscal 1997 from 39.2% for the comparable periods of fiscal 1996.
During the fourth quarter of fiscal 1996, the Company adjusted its
combined federal and state effective income tax rate to 38.9% for the
fiscal year.
For the third quarter of fiscal 1997, net earnings as a percent of
sales decreased to 3.8% from 4.5% for the third quarter of fiscal
1996. The decrease was primarily attributable to the non-recurring
charge, partially offset by higher gross margins as described above.
For the first nine months, net earnings were 4.6% and 4.7% of fiscal
years 1997 and 1996, respectively. Excluding the non-recurring
charge, net earnings as a percent of sales were 4.8% and 5.0% for the
third quarter and first nine months of fiscal 1997, respectively, as
compared to 4.5% and 4.7% for the third quarter and first nine months
of fiscal 1996.
Earnings per share were $0.32 and $1.14 for the third quarter and
first nine months of fiscal 1997, respectively. Excluding the non-
recurring charge, earnings per share were $0.40 and $1.22 for the
third quarter and first nine months of fiscal 1997, respectively,
compared to $0.30 and $0.95 for the third quarter and first nine
months of fiscal 1996, respectively.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
(CONTINUED)
RESULTS OF OPERATIONS AND FINANCIAL CONDITION - (Continued)
LIQUIDITY AND CAPITAL RESOURCES
Cash flow generated from store operations provides the Company with a
significant source of liquidity. Additionally, a significant portion
of the Company's inventory is financed under vendor credit terms.
During the first nine months of fiscal 1997, the Company opened 71
stores and relocated 3 stores. During the fourth quarter of fiscal
1997, the Company plans to open approximately 40 new stores and
relocate 2 existing stores. In fiscal 1998, the Company plans to
increase its total number of stores by approximately 21 to 22
percent. Although some of these locations will be leased directly,
it is expected that many may be obtained through the purchase of pre-
existing leasehold interests, the acquisition of land parcels and
the construction or purchase of buildings during fiscal 1997. While
the cost of new stores to be constructed and owned by the Company
varies widely, principally due to land costs, new store costs
(including land, building and fixtures) are currently estimated to
average approximately $13,100,000 per location. The Company may
purchase leasehold interests at varying amounts depending upon the
value of such properties. In addition, each new store will require
approximately $3,600,000 to finance inventories, net of vendor
financing. The cost to remodel (including leasehold interests) and
fixture stores to be leased is expected to average approximately
$2,400,000 per store. Of the 111 new stores and 5 relocations
planned in fiscal 1997, it is expected that approximately 65% will be
owned and the remainder will be leased.
In June 1996, the Company entered into a $300,000,000 operating lease
agreement for the purpose of financing construction costs of new
stores. In May 1997, the Company increased its available funding
under the operating lease agreement to $600,000,000. As of November
2, 1997, the Company had $745,694,000 in cash and short-term
investments. Management believes that its current cash position, the
proceeds from short-term investments, internally generated funds,
remaining funds available from the $600,000,000 operating lease
agreement, and/or the ability to obtain alternate sources of
financing, including the ability to raise financing under its
commercial paper program, 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>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The information required by Item 1 is incorporated by
reference from Note 5 of the Notes to Consolidated Condensed
Financial Statements included in Part I of this report.
Item 3. Submission of Matters to a Vote of Security Holders.
During the third quarter of fiscal 1997, no matters were
submitted to a vote of security holders.
Item 4. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Earnings per Common and Common Equivalent
Share
27. Financial Data Schedule (only submitted to SEC in
electronic format)
(b) Reports on Form 8-K
On September 23, 1997, the Company filed a Form 8-K,
pursuant to Item 5 - Other Event, reporting the
settlement of Butler et al. v. Home Depot, Inc. and
and Frank, et al. v. Home Depot, Inc., Case Nos. 94-
4335SI and 95-2182SI, respectively, pending in U.S.
Dist. Ct., N.D. CA.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE HOME DEPOT, INC.
(Registrant)
By: /s/ Arthur M. Blank
Arthur M. Blank
CEO, President & COO
/s/ Marshall L. Day
Marshall L. Day
Senior Vice President
Chief Financial Officer
December 2, 1997
<PAGE>
THE HOME DEPOT, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit Description
11.1 Computation of Earnings per Common and Common Equivalent Share
27. Financial Data Schedule (only submitted to SEC in electronic
format)
<TABLE>
<CAPTION>
Exhibit 11.1
THE HOME DEPOT, INC. AND SUBSIDIARIES
Computation of Earnings
Per Common and Common Equivalent Share
(In Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
Primary November 2, October 27, November 2, October 27,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Earnings Applicable to
Common and Common
Equivalent Shares $ 235,878 $ 221,371 $ 852,590 $ 686,564
Tax Effected Interest
Expense, Net of Interest
Capitalized, Attributable
to 3.25% Convertible
Subordinated Notes 5,845 1,659 17,531 1,659
$ 241,723 $ 223,030 $ 870,121 $ 688,223
Shares:
Weighted Average Number of
Common and Common
Equivalent Shares Assuming
the higher of the Ending
or Average Market Price
for Period 741,604 725,043 739,750 723,084
Additional Shares from
Assumed Conversion of
3.25% Convertible
Subordinated Notes 23,956 6,845 23,956 2,282
765,560 731,888 763,706 725,366
Primary Earnings per Common
and Common Equivalent
Share $ 0.316 $ 0.305 $ 1.139 $ 0.949
<PAGE>
(1) Common equivalent shares represent shares granted under the Company's
employee stock purchase plan and stock option plans for the three and
nine month periods ended November 2, 1997 and October 27, 1996. All
periods have been adjusted to reflect the three-for-two stock split
in July 1997.
(2) Primary Earnings per Common and Common Equivalent Shares excluding the
$104,000,000 non-recurring charge were $.399 for the three months and
$1.223 for the nine months ended November 2, 1997.
(3) The Company's 3.25% Convertible Subordinated Notes issued on October 2,
1996, are common stock equivalents. For the three and nine month
periods ended November 2, 1997 and October 27, 1996, the Notes were
dilutive and, accordingly, were assumed to be converted at the
beginning of the accounting period for purposes of calculating
earnings per share.
</TABLE>
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