<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal years ended December 31, 1996, 1997 and 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
---------------- -----------------
Commission file number 1-8207
-------
Full title of the plan and the address of the plan, if different from that of
the issuer named below:
The Home Depot FutureBuilder
- --------------------------------------------------------------------------------
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office: The Home Depot, Inc., 2455
Paces Ferry Road, NW, Atlanta, GA 30339
- --------------------------------------------------------------------------------
<PAGE> 2
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements
December 31, 1998, 1997, and 1996
With Independent Auditors' Report Thereon
<PAGE> 3
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Statements of Changes in Net Assets Available for Benefits by Fund 4-6
Notes to Financial Statements 7
Item 27a - Schedule of Assets Held for Investment Purposes 12
Item 27d - Schedule of Reportable Transactions 15
</TABLE>
<PAGE> 4
INDEPENDENT AUDITORS' REPORT
The Administrative Committee
The Home Depot Futurebuilder
401(k) and Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for benefits
of The Home Depot Futurebuilder 401(k) and Employee Stock Ownership Plan (the
"Plan") as of December 31, 1998, 1997, and 1996 and the related statements of
changes in net assets available for benefits for each of the years in the
three-year period ended December 31, 1998. These financial statements are the
responsibility of the Plan's Administrative Committee. Our responsibility is to
express an opinion on these 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 the
Plan's Administrative Committee, 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 financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of The Home Depot
Futurebuilder 401(k) and Employee Stock Ownership Plan at December 31, 1998,
1997, and 1996, and the changes in net assets available for benefits for each of
the years in the three-year period ended December 31, 1998 in conformity with
generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedules 1 and 2 is presented for the purpose of additional analysis and is not
a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
Administrative Committee. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
May 18, 1999
<PAGE> 5
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits
December 31, 1998, 1997, and 1996
<TABLE>
<CAPTION>
1998 1997 1996
-------------- ----------- -----------
<S> <C> <C> <C>
Assets:
Investments, at fair value:
Shares of registered investment companies:
Biltmore Prime Fund $ -- -- 698,544
Dimensional Fixed Income Fund 9,388,834 6,144,851 3,348,509
Barclay's Global Investors Fund 34,286,478 22,698,430 8,669,946
Putnam New Opportunities Fund 54,400,853 37,683,315 17,497,281
Templeton Foreign Fund 10,090,597 10,457,652 4,930,358
Invesco Value Trust Fund 20,180,662 14,784,880 5,960,785
Home Depot Stock Fund 133,487,420 29,148,472 5,695,704
WB Short-term Investment Fund 28,023,828 15,643,666 6,241,294
Participant loans receivable 19,397,904 7,329,452 --
The Home Depot, Inc. common stock 1,151,069,495 566,880,156 329,802,701
-------------- ----------- -----------
Total investments 1,460,326,071 710,770,874 382,845,122
Cash 384,590 341,324 --
Employer contributions receivable 6,913,263 10,539,803 11,705,780
Other receivable 146,641 -- 190,575
-------------- ----------- -----------
Total assets 1,467,770,565 721,652,001 394,741,477
-------------- ----------- -----------
Liabilities:
Accrued liabilities 553,163 490,198 179,731
Other payable 494,967 2,728,134 --
Accrued interest payable -- -- 311,999
Long-term debt -- -- 5,990,785
-------------- ----------- -----------
Total liabilities 1,048,130 3,218,332 6,482,515
-------------- ----------- -----------
Net assets available for benefits $1,466,722,435 718,433,669 388,258,962
============== =========== ===========
</TABLE>
See accompanying notes to financial statements
2
<PAGE> 6
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1998, 1997, and 1996
<TABLE>
<CAPTION>
1998 1997 1996
-------------- ----------- ------------
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. $ 12,558,447 30,810,110 32,697,754
Realized gain on sale of shares of registered
investment companies 4,178,694 1,046,972 48,988
Net unrealized appreciation (depreciation) in
fair value of investments 659,591,800 236,552,302 (14,508,716)
Interest income 1,031,654 735,630 --
Dividends 7,821,045 4,681,418 2,353,642
-------------- ----------- ------------
685,181,640 273,826,432 20,591,668
-------------- ----------- ------------
Contributions:
Participants' 85,298,480 63,988,463 43,435,643
Employer's 38,328,001 32,555,354 23,978,312
-------------- ----------- ------------
123,626,481 96,543,817 67,413,955
-------------- ----------- ------------
Total additions 808,808,121 370,370,249 88,005,623
-------------- ----------- ------------
Deductions from net assets attributed to:
Benefits paid to participants 57,872,186 38,092,137 28,719,332
Administrative expenses 2,647,169 2,069,154 2,562,401
Interest expense -- 34,251 1,041,246
-------------- ----------- ------------
Total deductions 60,519,355 40,195,542 32,322,979
-------------- ----------- ------------
Net increase 748,288,766 330,174,707 55,682,644
Net assets available for benefits:
Beginning of year 718,433,669 388,258,962 332,576,318
-------------- ----------- ------------
End of year $1,466,722,435 718,433,669 388,258,962
============== =========== ============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 7
THE HOME DEPOT FUTUREBUILDER
401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year ended December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
---------------------------------------------------------------------
DIMENSIONAL BARCLAY'S PUTNAM INVESCO
FIXED GLOBAL NEW TEMPLETON VALUE
INCOME INVESTORS OPPORTUNITIES FOREIGN TRUST
FUND FUND FUND FUND FUND
----------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. $ -- -- -- -- --
Realized gain (loss) on sale of shares of
registered investment companies 6,867 1,972,784 1,860,505 (309,973) 648,511
Net appreciation (depreciation) in fair value
of investments 2,726 5,168,087 6,852,011 (1,206,351) 625,811
Interest income -- -- -- -- --
Dividends 355,503 -- 1,670,721 1,049,788 962,738
----------- ----------- ----------- ----------- -----------
365,096 7,140,871 10,383,237 (466,536) 2,237,060
----------- ----------- ----------- ----------- -----------
Contributions:
Participants' 3,435,751 13,050,896 20,754,506 5,468,894 8,496,807
Employer's -- -- -- -- --
----------- ----------- ----------- ----------- -----------
3,435,751 13,050,896 20,754,506 5,468,894 8,496,807
----------- ----------- ----------- ----------- -----------
Total additions 3,800,847 20,191,767 31,137,743 5,002,358 10,733,867
----------- ----------- ----------- ----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants 595,528 1,233,290 1,990,431 512,624 773,934
Administrative expenses -- 46,527 -- -- --
----------- ----------- ----------- ----------- -----------
Total deductions 595,528 1,279,817 1,990,431 512,624 773,934
----------- ----------- ----------- ----------- -----------
Net increase (decrease) prior to
interfund transfers 3,205,319 18,911,950 29,147,312 4,489,734 9,959,933
Interfund transfers 38,664 (7,323,902) (12,429,774) (4,856,789) (4,564,151)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) 3,243,983 11,588,048 16,717,538 (367,055) 5,395,782
Net assets available for benefits:
Beginning of year 6,144,851 22,698,430 37,683,315 10,457,652 14,784,880
----------- ----------- ----------- ----------- -----------
End of year $ 9,388,834 34,286,478 54,400,853 10,090,597 20,180,662
=========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT NON-PARTICIPANT
DIRECTED DIRECTED
------------------------- --------------------------
HOME
DEPOT LOAN CLEARING
STOCK FUND FUND OTHER ACCOUNT
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. 1,381,429 -- -- 2,660,808
Realized gain (loss) on sale of shares of registered
investment companies -- -- -- --
Net appreciation (depreciation) in fair value
of investments 54,964,626 -- -- --
Interest income -- 1,031,654 -- --
Dividends 341,362 -- -- 44,170
----------- ----------- ----------- -----------
56,687,417 1,031,654 -- 2,704,978
----------- ----------- ----------- -----------
Contributions:
Participants' 34,091,626 -- -- --
Employer's -- -- (3,626,540) --
----------- ----------- ----------- -----------
34,091,626 -- (3,626,540) --
----------- ----------- ----------- -----------
Total additions 90,779,043 1,031,654 (3,626,540) 2,704,978
----------- ----------- ----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants 4,438,352 995,711 -- --
Administrative expenses -- (67,050) 52,925 2,614,767
----------- ----------- ----------- -----------
Total deductions 4,438,352 928,661 52,925 2,614,767
----------- ----------- ----------- -----------
Net increase (decrease) prior to
interfund transfers 86,340,691 102,993 (3,679,465) 90,211
Interfund transfers 17,998,257 12,031,576 (41) 5,709,080
----------- ----------- ----------- -----------
Net increase (decrease) 104,338,948 12,134,569 (3,679,506) 5,799,291
Net assets available for benefits:
Beginning of year 29,148,472 7,576,335 10,039,606 6,702,295
----------- ----------- ----------- -----------
End of year 133,487,420 19,710,904 6,360,100 12,501,586
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
--------------
HOME
DEPOT
STOCK TOTAL
-------------- -------------
<S> <C> <C>
Additions to net assets attributed to:
Investment income
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. 8,516,210 12,558,447
Realized gain (loss) on sale of shares of registered
investment companies -- 4,178,694
Net appreciation (depreciation) in fair value
of investments 593,184,890 659,591,800
Interest income -- 1,031,654
Dividends 3,396,763 7,821,045
-------------- -------------
605,097,863 685,181,640
-------------- -------------
Contributions:
Participants' -- 85,298,480
Employer's 41,954,541 38,328,001
-------------- -------------
-------------- -------------
41,954,541 123,626,481
-------------- -------------
Total additions 647,052,404 808,808,121
-------------- -------------
Deductions from net assets attributed to:
Benefits paid to participants 47,332,316 57,872,186
Administrative expenses -- 2,647,169
-------------- -------------
Total deductions 47,332,316 60,519,355
-------------- -------------
Net increase (decrease) prior to
interfund transfers 599,720,088 748,288,766
Interfund transfers (6,602,920) --
-------------- -------------
Net increase (decrease) 593,117,168 748,288,766
Net assets available for benefits:
Beginning of year 573,197,833 718,433,669
-------------- -------------
End of year 1,166,315,001 1,466,722,435
============== =============
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 8
THE HOME DEPOT FUTUREBUILDER
401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year ended December 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
---------------------------------------------------------------------
DIMENSIONAL BARCLAY'S PUTNAM INVESCO
FIXED GLOBAL NEW TEMPLETON VALUE
INCOME INVESTORS OPPORTUNITIES FOREIGN TRUST
FUND FUND FUND FUND FUND
------------ ---------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. $ -- -- -- -- --
Realized gain on sale of shares of registered
investment companies 98 435,449 291,969 114,169 205,287
Net appreciation (depreciation) in fair value
of investments (11,935) 3,796,317 4,705,755 (835,600) 1,508,533
Interest income -- -- -- -- --
Dividends -- -- -- -- --
------------ ---------- ----------- ----------- ----------
(11,837) 4,231,766 4,997,724 (721,431) 1,713,820
------------ ---------- ----------- ----------- ----------
Contributions:
Participants' 5,103,158 12,219,264 21,917,387 8,193,821 9,003,680
Employer's -- -- -- -- --
------------ ---------- ----------- ----------- ----------
5,103,158 12,219,264 21,917,387 8,193,821 9,003,680
------------ ---------- ----------- ----------- ----------
Total additions 5,091,321 16,451,030 26,915,111 7,472,390 10,717,500
------------ ---------- ----------- ----------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 2,294,979 2,422,546 6,729,077 1,945,096 1,893,405
Administrative expenses -- -- -- -- --
Interest expense -- -- -- -- --
------------ ---------- ----------- ----------- ----------
Total deductions 2,294,979 2,422,546 6,729,077 1,945,096 1,893,405
------------ ---------- ----------- ----------- ----------
Net increase (decrease) 2,796,342 14,028,484 20,186,034 5,527,294 8,824,095
Net assets available for benefits:
Beginning of year 3,348,509 8,669,946 17,497,281 4,930,358 5,960,785
------------ ---------- ----------- ----------- ----------
End of year $ 6,144,851 22,698,430 37,683,315 10,457,652 14,784,880
============ ========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT NON-PARTICIPANT
DIRECTED DIRECTED
----------- ----------------------------------------
WB
HOME SHORT-TERM HOME
DEPOT INVESTMENT DEPOT
STOCK FUND OTHER FUND STOCK TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. -- 30,810,110 -- -- 30,810,110
Realized gain on sale of shares of registered
investment companies -- -- -- -- 1,046,972
Net appreciation (depreciation) in fair value
of investments 23,452,768 -- -- 203,936,464 236,552,302
Interest income -- 735,630 -- -- 735,630
Dividends -- 4,681,418 -- -- 4,681,418
----------- ----------- ----------- ----------- -----------
23,452,768 36,227,158 -- 203,936,464 273,826,432
----------- ----------- ----------- ----------- -----------
Contributions:
Participants' -- 7,551,153 -- -- 63,988,463
Employer's -- (11,269,706) 8,703,831 35,121,229 32,555,354
----------- ----------- ----------- ----------- -----------
-- (3,718,553) 8,703,831 35,121,229 96,543,817
----------- ----------- ----------- ----------- -----------
Total additions 23,452,768 32,508,605 8,703,831 239,057,693 370,370,249
----------- ----------- ----------- ----------- -----------
Deductions from net assets attributed to:
Benefits paid to participants -- 20,826,797 -- 1,980,237 38,092,137
Administrative expenses -- 2,069,154 -- -- 2,069,154
Interest expense -- 34,251 -- -- 34,251
----------- ----------- ----------- ----------- -----------
Total deductions -- 22,930,202 -- 1,980,237 40,195,542
----------- ----------- ----------- ----------- -----------
Net increase (decrease) 23,452,768 9,578,403 8,703,831 237,077,456 330,174,707
Net assets available for benefits:
Beginning of year 5,695,704 5,413,840 6,939,838 329,802,701 388,258,962
----------- ----------- ----------- ----------- -----------
End of year 29,148,472 14,992,243 15,643,669 566,880,157 718,433,669
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 9
THE HOME DEPOT FUTUREBUILDER
401(k) AND EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Benefits With Fund Information
Year ended December 31, 1996
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------
DIMENSIONAL BARCLAY'S PUTNAM INVESCO
FIXED GLOBAL NEW TEMPLETON VALUE
INCOME INVESTORS OPPORTUNITIES FOREIGN TRUST
FUND FUND FUND FUND FUND
----------- ----------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. $ -- -- -- -- --
Realized gain on sale of shares of registered
investment companies 6,497 10,507 (3,077) 2,962 3,937
Net appreciation (depreciation) in fair value
of investments (9,369) 841,626 (532,619) 194,200 250,946
Interest income -- -- -- -- --
Dividends -- -- -- -- --
----------- ----------- ----------- --------- ----------
(2,872) 852,133 (535,696) 197,162 254,883
----------- ----------- ----------- --------- ----------
Contributions:
Participants' 3,812,813 8,062,586 18,594,971 4,935,900 5,850,419
Employer's -- -- -- -- --
----------- ----------- ----------- --------- ----------
3,812,813 8,062,586 18,594,971 4,935,900 5,850,419
----------- ----------- ----------- --------- ----------
Total additions 3,809,941 8,914,719 18,059,275 5,133,062 6,105,302
----------- ----------- ----------- --------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 461,433 244,773 561,994 202,704 144,517
Administrative expenses -- -- -- -- --
Interest expense -- -- -- -- --
----------- ----------- ----------- --------- ----------
Total deductions 461,433 244,773 561,994 202,704 144,517
----------- ----------- ----------- --------- ----------
Net increase (decrease) 3,348,508 8,669,946 17,497,281 4,930,358 5,960,785
Net assets available for benefits:
Beginning of year 1 -- -- -- --
----------- ----------- ----------- --------- ----------
End of year $ 3,348,509 8,669,946 17,497,281 4,930,358 5,960,785
=========== =========== =========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
NON-PARTICIPANT
PARTICIPANT DIRECTED DIRECTED
------------------------ -----------------------------------------------
HOME BILTMORE BILTMORE
DEPOT PRIME SHORT-TERM FIXED
STOCK FUND FUND OTHER INVESTMENT CD FUND FUND
---------- ---------- ----------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. -- -- 32,697,754 -- -- --
Realized gain on sale of shares of registered
investment companies -- -- -- -- -- (2,726)
Net appreciation (depreciation) in fair value
of investments (464,758) -- -- -- -- --
Interest income -- -- -- -- -- --
Dividends -- -- 2,353,642 -- -- --
---------- ---------- ----------- --------- -------- --------
(464,758) -- 35,051,396 -- -- (2,726)
---------- ---------- ----------- --------- -------- --------
Contributions:
Participants' -- -- 2,178,954 -- -- --
Employer's 6,160,462 488 11,677,566 5,071,560 367,700 161,136
---------- ---------- ----------- --------- -------- --------
6,160,462 488 13,856,520 5,071,560 367,700 161,136
---------- ---------- ----------- --------- -------- --------
Total additions 5,695,704 488 48,907,916 5,071,560 367,700 158,410
---------- ---------- ----------- --------- -------- --------
Deductions from net assets attributed to:
Benefits paid to participants -- -- 22,597,322 -- 602,800 233,605
Administrative expenses -- -- 2,562,401 -- -- --
Interest expense -- -- 1,041,246 -- -- --
---------- ---------- ----------- --------- -------- --------
Total deductions -- -- 26,200,969 -- 602,800 233,605
---------- ---------- ----------- --------- -------- --------
Net increase (decrease) 5,695,704 488 22,706,947 5,071,560 (235,100) (75,195)
Net assets available for benefits:
Beginning of year -- 698,056 (17,293,107) 1,169,734 235,100 75,195
---------- ---------- ----------- --------- -------- --------
End of year 5,695,704 698,544 5,413,840 6,241,294 -- --
========== ========== =========== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
NON-PARTICIPANT
DIRECTED
---------------------------
BILTMORE HOME
EQUITY DEPOT
FUND STOCK TOTAL
----------- ------------ ------------
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. -- -- 32,697,754
Realized gain on sale of shares of registered
investment companies 30,888 -- 48,988
Net appreciation (depreciation) in fair value
of investments -- (14,788,742) (14,508,716)
Interest income -- -- --
Dividends -- -- 2,353,642
----------- ------------ ------------
30,888 (14,788,742) 20,591,668
----------- ------------ ------------
Contributions:
Participants' -- -- 43,435,643
Employer's 539,400 -- 23,978,312
----------- ------------ ------------
539,400 -- 67,413,955
----------- ------------ ------------
Total additions 570,288 (14,788,742) 88,005,623
----------- ------------ ------------
Deductions from net assets attributed to:
Benefits paid to participants 882,526 2,787,658 28,719,332
Administrative expenses -- -- 2,562,401
Interest expense -- -- 1,041,246
----------- ------------ ------------
Total deductions 882,526 2,787,658 32,322,979
----------- ------------ ------------
Net increase (decrease) (312,238) (17,576,400) 55,682,644
Net assets available for benefits:
Beginning of year 312,238 347,379,101 332,576,318
----------- ------------ ------------
End of year -- 329,802,701 388,258,962
=========== ============ ============
</TABLE>
See accompanying notes to financial statements
6
<PAGE> 10
(1) DESCRIPTION OF THE PLAN
The following is a brief description of The Home Depot Futurebuilder
401(k) and Employee Stock Ownership Plan (the "Plan"). Participants
should refer to the Plan agreement for a more complete description of the
Plan's provisions.
(A) GENERAL
The Plan is a defined contribution plan covering substantially all
employees of The Home Depot, Inc. and subsidiaries (the
"Company"). Employees are eligible to become participants on the
first quarterly entry date (January 1, April 1, July 1, and
October 1) following the completion of one year of service. The
Plan is subject to certain provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
(B) CONTRIBUTIONS
Under the employee stock ownership portion of the Plan,
contributions are made solely by the Company and at the discretion
of the Company's Board of Directors ("ESOP contributions").
Under the 401(k) portion of the Plan, participants may contribute
up to 15% of pretax annual compensation, as defined in the Plan.
Participants may also contribute amounts representing
distributions from other qualified defined benefit plans or
contribution plans. For the first 10 months of the Plan year ended
December 31, 1998, the Company contributed 50% of the first 5% of
base compensation that a participant contributed to the Plan.
Effective November 1, 1998, the Plan was amended increasing the
Company matching contribution to 150% of the first 1% of base
compensation contributed by a participant and 50% of the next 2%
to 5% of base compensation contributed by a participant.
Additional amounts may be contributed at the option of the
Company's Board of Directors. All employer contributions are
initially invested in Home Depot common stock. Contributions are
subject to certain limitations.
(C) PARTICIPANT ACCOUNTS
The Plan maintains a separate account for each participant, to
which contributions, forfeitures, and investment performance are
allocated. ESOP contributions are allocated to individual accounts
based on the ratio of the employee's eligible compensation to
total eligible compensation of all participants.
7
<PAGE> 11
(D) VESTING
An employee becomes 100% vested upon death, reaching retirement
age 65, total or permanent disability, or if the Plan is
terminated. If an employee leaves the service of the Company for
reasons other than stated above, vesting for the ESOP
contributions and earnings thereon is based on years of service,
as follows:
<TABLE>
<CAPTION>
YEARS VESTING
OF SERVICE PERCENTAGE
---------- ----------
<S> <C>
3 20%
4 40
5 60
6 80
7 or more 100
===
</TABLE>
Nonvested stock and cash forfeited by participants are reallocated
to active participant accounts annually on December 31.
For the 401(k) portion of the Plan, participants are immediately
vested in their contributions plus actual earnings thereon.
Vesting in the Company's matching and discretionary contributions
plus actual earnings thereon is based on years of vesting service.
A participant is 100% vested after three years of vesting service.
(E) PAYMENT OF BENEFITS
Upon retirement, death, disability, or termination of service for
any other reason, participants may elect to receive a lump-sum
payment of their vested account balance in the form of cash or
securities at the market value on the date of distribution.
(F) PARTICIPANT LOANS RECEIVABLE
Participants may borrow from their fund accounts a minimum of
$1,000 up to a maximum equal to the lessor of $50,000 or 50% of
their account balance. Loan transactions are treated as a transfer
to (from) the investment fund from (to) the loan fund. Loan terms
range from one to five years. The loans bear interest at a rate
commensurate with local prevailing rates.
(G) FORFEITED ACCOUNTS
Forfeited nonvested accounts are used to reduce forfeitures of
future employer contributions. In 1998, employer contributions
were reduced by forfeitures of $6,742,000.
8
<PAGE> 12
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Plan in preparing its financial statements.
(A) GENERAL
The Plan is administered by an Administrative Committee made
up of employees of the Company. Wachovia Bank of Georgia, N.A.
has been appointed the Trustee of the Plan, and as such holds,
controls, manages, and administers the assets of the Plan.
(B) BASIS OF PRESENTATION
The accompanying financial statements have been prepared on the
accrual basis of accounting.
(C) INVESTMENTS
The Plan's investments are stated at fair value. Shares of
registered investment companies are valued at quoted market
prices, which represents the net asset value of shares held by the
Plan at year-end. The Company's common stock is valued at its
quoted market price as obtained from the New York Stock Exchange.
The investment in the WB Short-Term Investment Fund is reported at
fair value as determined by Wachovia Bank based on the quoted
market prices of the securities in the fund. Securities
transactions are accounted for on the trade date. The cost basis
of securities owned is determined using an annual average cost
method on a first-in, first-out basis. At December 31, 1998, 1997,
and 1996, the fair value of common stock of the Company was
$61.19, $29.44, and $16.71 per share, respectively. At December
31, 1998, the Plan's average cost basis per share of common stock
is $6.87. Per share amounts have been adjusted for a two-for-one
stock split effected in the form of a stock dividend on July 2,
1998 and a three-for-two stock split effected in the form of a
stock dividend on July 3, 1997.
The Plan also invests in short-term investments which are carried
at market value.
(D) EXPENSES
Administrative expenses consist principally of amounts paid for
consulting and management fees related to the 401(k) program and
to the Trustee for management and investment of the trust fund.
These fees are paid out of Plan assets.
(E) USE OF ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
9
<PAGE> 13
(3) FEDERAL INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated September 4, 1997 that the Plan is designed in accordance
with applicable sections of the Internal Revenue Code ("IRC"). The Plan
has been amended since receiving the determination letter. However, the
Administrative Committee of the Plan believes the Plan is designed and is
currently being operated in compliance with the applicable requirements
of the IRC.
(4) TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
terminate the Plan subject to provisions of ERISA. In the event of plan
termination, participants will become 100% vested in their accounts.
(5) REALIZED GAIN ON COMMON STOCK OF THE HOME DEPOT, INC.
The Plan's realized gains on common stock of the Company are summarized
as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ---------- ----------
<S> <C> <C> <C>
Market value at date of sale or
distribution of shares of common
stock of The Home Depot, Inc. $16,225,791 32,790,348 35,485,412
Less cost of shares of common stock of
The Home Depot, Inc. sold or
distributed 3,667,344 1,980,238 2,787,658
----------- ---------- ----------
Total realized gain $12,558,447 30,810,110 32,697,754
=========== ========== ==========
</TABLE>
The total number of shares sold or distributed to fund cash withdrawals
and expenses of the Plan were 442,437 in 1998; 590,794 in 1997; and
522,724 in 1996.
10
<PAGE> 14
(6) INVESTMENTS
The Plan's investments are held by the Trustee of the Plan, Wachovia Bank
of Georgia, N.A. A description of the assets of the Plan follows:
PARTICIPANT DIRECTED
- Dimensional Fixed Income Fund - Funds are invested in shares
of a registered investment company that invests in high
quality short-term debt obligations that mature within two
years.
- Barclay's Global Investors Fund - Funds are invested in shares
of a registered investment company that invests in the common
stocks included in the Standard & Poor's 500 Index.
- Putnam New Opportunities Fund - Funds are invested in shares
of a registered investment company that invests primarily in
common stocks which are believed to have the potential to grow
at an above-average pace over time.
- Templeton Foreign Fund - Funds are invested in shares of a
registered investment company that invests in stocks and debt
obligations of companies and governments outside the U.S.
- Invesco Value Trust Fund - Funds are invested in shares of a
registered investment company that invests in bonds, common
stocks, and high-quality short-term to intermediate-term debt
obligations.
- Home Depot Stock Fund - Funds are invested in common stock of
The Home Depot, Inc.
NON-PARTICIPANT DIRECTED
- The Home Depot, Inc. Common Stock - Comprised of shares of The
Home Depot's common stock, representing the Company's matching
and ESOP contributions. These shares have been allocated to
individual participant accounts. Participants may immediately
transfer the Company's matching contributions to other
investment funds. Each participant who has completed five
years of service and attained the age of 55 may transfer ESOP
contributions to other investment funds.
The fair value of individual investments that represent 5.0% or more of
the Plan's net assets are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
-------------- ----------- -----------
<S> <C> <C> <C>
The Home Depot, Inc. common stock $1,284,556,915 596,028,628 329,802,701
Putnam New Opportunities Fund 54,400,853 37,683,315 17,497,281
</TABLE>
Investments in the Putnam New Opportunities Fund did not exceed 5.0% of
the Plan's net assets at December 31, 1998 and 1996.
11
<PAGE> 15
SCHEDULE 1
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT COST VALUE
- -------------------------------------- ---------------------------------- ---------------- -----------------
<S> <C> <C> <C>
*The Home Depot, Inc. common stock 20,993,779 shares of common
stock $144,168,684 1,284,556,915
Dimensional Fixed Income Fund 927,750 shares of registered
investment company 9,407,412 9,388,834
Barclay's Global Investors Fund 1,020,345 shares of registered
investment company 24,480,448 34,286,478
Invesco Value Trust Fund 643,516 shares of registered
investment company 17,795,371 20,180,662
Putnam New Opportunities Fund 931,043 shares of registered
investment company 43,375,706 54,400,853
Templeton Foreign Fund 1,202,693 shares of registered
investment company 11,938,348 10,090,597
*Wachovia Bank Short-Term 28,023,833 shares of collective
Investment Fund trust fund of Wachovia Bank 28,023,828 28,023,828
Loans receivable Participant loans 19,397,904 19,397,904
------------ --------------
Total investments $298,587,701 1,460,326,071
============ ==============
</TABLE>
*Indicates party-in-interest to the Plan.
12
<PAGE> 16
SCHEDULE 1
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT COST VALUE
- ------------------------------------ --------------------------------- ---------------- -----------------
<S> <C> <C> <C>
*The Home Depot, Inc. common stock 10,123,629 shares of common
stock $114,760,756 596,028,628
Dimensional Fixed Income Fund 608,401 shares of registered
investment company 6,166,155 6,144,851
Barclay's Global Investors Fund 868,241 shares of registered
investment company 18,060,487 22,698,430
Invesco Value Trust Fund 508,246 shares of registered
investment company 13,025,401 14,784,880
Putnam New Opportunities Fund 774,580 shares of registered
investment company 33,510,179 37,683,315
Templeton Foreign Fund 1,051,020 shares of registered
investment company 11,099,052 10,457,652
*Wachovia Bank Short-Term 15,643,665 shares of collective
Investment Fund trust fund of Wachovia Bank 15,643,666 15,643,666
Loans receivable Participants' loans 7,329,452 7,329,452
------------ -----------
Total investments $219,595,148 710,770,874
============ ===========
</TABLE>
*Indicates party-in-interest to the Plan.
13
<PAGE> 17
SCHEDULE 1
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1996
<TABLE>
<CAPTION>
DESCRIPTION CURRENT
IDENTITY OF ISSUE OF INVESTMENT COST VALUE
- -------------------------------------- -------------------------------- ----------------- -----------------
<S> <C> <C> <C>
*The Home Depot, Inc. common stock 6,579,605 shares of common
stock $ 75,459,041 329,802,701
*Home Depot Stock Fund 113,630 shares of common
stock 6,150,462 5,695,704
Dimensional Fixed Income Fund 331,208 shares of registered
investment income 3,357,878 3,348,509
Barclay's Global Investors Fund 442,254 shares of registered
investment income 7,828,320 8,669,946
Invesco Value Trust Fund 245,300 shares of registered
investment income 5,709,839 5,960,785
Putnam New Opportunities Fund 430,649 shares of registered
investment income 18,029,900 17,497,281
Templeton Foreign Fund 475,903 shares of registered
investment income 4,736,158 4,930,358
Biltmore Prime Fund 698,544 shares of registered
investment income 698,544 698,544
*Wachovia Bank Short-Term Investment
Fund 6,241,294 shares of collective
trust fund of Wachovia Bank 6,241,294 6,241,294
Total investments $128,211,436 382,845,122
============ ===========
</TABLE>
*Indicates party-in-interest to the Plan.
14
<PAGE> 18
SCHEDULE 2
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1998
A reportable transaction is defined as any individual transaction or a series of
similar transactions greater than 5% of the fair value of the plan assets at the
beginning of the plan year. The following represents reportable transactions for
the year ended December 31, 1998:
<TABLE>
<CAPTION>
CURRENT VALUE
PURCHASE SELLING COST ON TRANSACTION
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE OF ASSET DATE
- ----------------------------------------- -------------------------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
*The Home Depot, Inc. Common stock $ 43,111,133 -- 43,111,133 43,111,133
*The Home Depot, Inc. Common stock -- 16,225,791 3,667,344 16,225,741
*Wachovia Bank Short-term investment fund 192,991,955 -- 192,991,955 192,991,955
*Wachovia Bank Short-term investment fund -- 180,611,791 180,611,791 180,611,791
============ =========== =========== ===========
<CAPTION>
NET GAIN
IDENTITY OF PARTY INVOLVED OR (LOSS)
- ----------------------------------------- ----------
<S> <C>
*The Home Depot, Inc. --
*The Home Depot, Inc. 12,558,447
*Wachovia Bank --
*Wachovia Bank --
==========
</TABLE>
*Indicates party-in-interest to the Plan
15
<PAGE> 19
SCHEDULE 2
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1997
A reportable transaction is defined as any individual transaction or a series of
similar transactions greater than 5% of the fair value of the plan assets at the
beginning of the plan year. The following represents reportable transactions for
the year ended December 31, 1997:
<TABLE>
<CAPTION>
EXPENSES CURRENT VALUE
SELLING INCURRED IN COST ON TRANSACTION
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE TRANSACTION OF ASSET DATE NET GAIN
- ----------------------------- -------------------- ----------------- ----------- --------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
*The Home Depot, Inc. Common stock $ 32,790,348 -- 1,980,238 32,790,348 30,810,110
================= =========== ========= ============= ==========
</TABLE>
*Indicates party-in-interest to the Plan.
16
<PAGE> 20
SCHEDULE 2
THE HOME DEPOT FUTUREBUILDER
401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN
Item 27(d) - Schedule of Reportable Transactions
Year ended December 31, 1996
A reportable transaction is defined as any individual transaction or a series of
similar transactions greater than 5% of the fair value of the plan assets at the
beginning of the plan year. The following represents reportable transactions for
the year ended December 31, 1996:
<TABLE>
<CAPTION>
EXPENSES CURRENT VALUE
SELLING INCURRED IN COST ON TRANSACTION
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE TRANSACTION OF ASSET DATE
- ------------------------------ -------------------- ----------------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
*The Home Depot, Inc. Common stock $ 35,485,412 -- 2,787,658 35,485,412
================= =========== ========= ==========
<CAPTION>
IDENTITY OF PARTY INVOLVED NET GAIN
- ------------------------------ ----------
<S> <C>
*The Home Depot, Inc. 32,697,754
==========
</TABLE>
*Indicates party-in-interest to the Plan
17
<PAGE> 21
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
The Home Depot FutureBuilder
Date: June 23, 1999
/s/ Lawrence A. Smith
----------------------------
By: Lawrence A. Smith
Member, Administrative Committee
<PAGE> 1
EXHIBIT 23
The Board of Directors
The Home Depot, Inc.:
We consent to incorporation by reference in the registration statements (No.'s
333-61733, 333-56207, 33-46476, 33-22531, 33-22299, 33-58807, 333-16695,
333-01385) on Form S-8 and (No. 333-03497) on Form S-3 of The Home Depot, Inc.
of our report dated May 18, 1999, relating to the statements of net assets
available for benefits of The Home Depot Futurebuilder 401(K) and Employee Stock
Ownership Plan as of December 31, 1998, 1997 and 1996, and the related
statements of changes in net assets available for benefits for each of the years
in the three-year period ended December 31, 1998, which report appears in the
December 31, 1998 annual report on Form 11-K of The Home Depot Futurebuilder
401(K) and Employee Stock Ownership Plan.
/s/ KPMG LLP
Atlanta, Georgia
June 23, 1999
