-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G3uKHThyL+B3u7Zf5ChDnTTHohoLxygwjasL6NrUedOMY4DuekigJLHA6ZAGwHE7 khH8a4WpdjHQBlzqWUocRQ== 0000354950-97-000004.txt : 19970912 0000354950-97-000004.hdr.sgml : 19970911 ACCESSION NUMBER: 0000354950-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970803 FILED AS OF DATE: 19970828 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOME DEPOT INC CENTRAL INDEX KEY: 0000354950 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS [5211] IRS NUMBER: 953261426 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08207 FILM NUMBER: 97671441 BUSINESS ADDRESS: STREET 1: 2455 PACES FERRY ROAD CITY: ATLANTA STATE: GA ZIP: 30339-4024 BUSINESS PHONE: 770-433-8211 MAIL ADDRESS: STREET 1: 2455 PACES FERRY ROAD CITY: ATLANTA STATE: GA ZIP: 30339-4024 10-Q 1 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 August 3, 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) 2727 Paces Ferry Road, Atlanta, GA 30339-4024 (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 730,025,818 Shares, as of August 20, 1997 PAGE 1 OF 13 THE HOME DEPOT, INC. AND SUBSIDIARIES INDEX TO FORM 10-Q August 3, 1997 Page Part I. Financial Information: Item 1. Financial Statements CONSOLIDATED STATEMENTS OF EARNINGS - Three-Month and Six-Month Periods Ended August 3, 1997 and July 28, 1996 3 CONSOLIDATED CONDENSED BALANCE SHEETS - As of August 3, 1997 and February 2, 1997 4 CONSOLIDATED STATEMENTS OF CASH FLOWS - Six-Month Periods Ended August 3, 1997 and July 28, 1996 5 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition......................7 -10 Part II. Other Information: Item 4. Submission of Matters to a Vote of Security Holders 11 Item 6. Exhibits and Reports on Form 8-K 11 Signature Page 12 Index to Exhibits 13 PAGE 2 OF 13
PART I. FINANCIAL INFORMATION THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In Thousands, Except Per Share Data) Three Months Ended Six Months Ended August 3, July 28, August 3, July 28, 1997 1996 1997 1996 Net Sales $6,550,221 $5,292,917 $12,207,495 $9,655,132 Cost of Merchandise Sold 4,749,517 3,856,022 8,854,997 6,998,307 Gross Profit 1,800,704 1,436,895 3,352,498 2,656,825 Operating Expenses: Selling and Store Operating 1,098,214 901,407 2,112,794 1,717,066 Pre-Opening 13,879 10,143 26,918 23,002 General and Administrative 101,142 80,108 198,747 152,208 Total Operating Expenses 1,213,235 991,658 2,338,459 1,892,276 Operating Income 587,469 445,237 1,014,039 764,549 Interest Income (Expense): Interest and Investment Income 14,256 2,833 24,234 6,959 Interest Expense (10,853) (405) (21,692) (2,734) Interest, Net 3,403 2,428 2,542 4,225 Minority Interest (5,144) (3,301) (7,219) (3,651) Earnings Before Income Taxes 585,728 444,364 1,009,362 765,123 Income Taxes 227,850 174,190 392,650 299,930 Net Earnings $ 357,878 $ 270,174 $ 616,712 $ 465,193 Earnings Per Common and Common Equivalent Share $ 0.48 $ 0.37 $ 0.83 $ 0.64 Dividends Per Share $ 0.05 $ 0.04 $ 0.09 $ 0.07 Weighted Average Number of Common and Common Equivalent Shares 763,514 723,669 761,336 722,076
See accompanying notes to consolidated condensed financial statements. PAGE 3 OF 13
THE HOME DEPOT INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (In Thousands, Except Share Data) August 3, February 2, 1997 1997 ASSETS Current Assets: Cash and Cash Equivalents $ 473,258 $ 146,006 Short-Term Investments 435,090 412,430 Receivables, Net 399,661 388,416 Merchandise Inventories 3,196,919 2,708,283 Other Current Assets 90,443 54,238 Total Current Assets 4,595,371 3,709,373 Property and Equipment, at cost 6,731,581 6,149,816 Less: Accumulated Depreciation and Amortization (851,578) (712,770) Net Property and Equipment 5,880,003 5,437,046 Long-Term Investments ---- 8,480 Notes Receivable 26,097 39,518 Cost in Excess of the Fair Value of Net Assets Acquired 83,554 86,540 Other 77,139 60,753 $10,662,164 $ 9,341,710 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 1,573,822 $ 1,089,736 Accrued Salaries and Related Expenses 286,379 249,356 Sales Taxes Payable 164,576 129,284 Other Accrued Expenses 396,463 322,503 Income Taxes Payable 57,761 48,728 Current Installments of Long-Term Debt 4,497 2,519 Total Current Liabilities 2,483,498 1,842,126 Long-Term Debt, excluding current installments 1,262,180 1,246,593 Other Long-Term Liabilities 174,421 134,034 Deferred Income Taxes 66,297 66,020 Minority Interest 102,847 97,751 Stockholders' Equity: Common Stock, par value $0.05. Authorized: 1,000,000,000 shares; issued and outstanding - 729,973,000 shares at 8/3/97 and 720,773,000 shares at 2/2/97 36,499 36,038 Paid-In Capital 2,586,255 2,511,081 Retained Earnings 3,961,143 3,406,592 Cumulative Translation Adjustments (6,960) 2,173 Unrealized Loss on Investments, Net (847) (168) 6,576,090 5,955,716 Less: Shares Held in Employee Benefit Trust 862 530 Deferred Compensation Plans 2,307 ---- Total Stockholders' Equity 6,572,921 5,955,186 $10,662,164 $ 9,341,710
See accompanying notes to consolidated condensed financial statements. PAGE 4 OF 13
THE HOME DEPOT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands) Six Months Ended August 3, 1997 July 28, 1996 Cash Provided from Operations: Net Earnings $ 616,712 $ 465,193 Reconciliation of Net Earnings to Net Cash Provided by Operations: Depreciation and Amortization 134,203 109,332 Deferred Income Tax Expense 658 5,239 (Increase) Decrease in Receivables, Net (3,994) 10,459 Increase in Merchandise Inventories (471,565) (335,628) Increase in Accounts Payable and Accrued Expenses 649,636 545,634 Increase in Income Taxes Payable 17,574 47,932 Other (11,450) 17,495 Net Cash Provided by Operations 931,774 865,656 Cash Flows Used In Investing Activities: Capital Expenditures (584,846) (532,354) Proceeds from Sales of Property and Equipment 24,438 9,709 Proceeds from Sales of Investments ---- 40,737 Purchase of Investments (64,730) (211) Proceeds from Maturities of Investments 49,441 25,606 Repayments of Advances Secured by Real Estate, Net 8,238 11,489 Net Cash Used in Investing Activities (567,459) (445,024) Cash Flows Used in Financing Activities: Repayments of Commercial Paper Obligations, Net ---- (454,000) Repayments of Notes Receivable from ESOP ---- 5,649 Principal Repayments of Long-Term Debt (36,680) (1,357) Proceeds from Sale of Common Stock, Net 64,012 55,637 Cash Dividends Paid to Stockholders (65,344) (52,631) Contributions to Deferred Compensation Plan Trust (96) ---- Shares Purchased for Employee Benefit Trust (235) (247) Minority Interest Contributions to Partnership 1,667 6,380 Net Cash Used by Financing Activities (36,676) (440,569) Effect of Exchange Rate Changes on Cash (387) (108) Increase (Decrease) in Cash and Cash Equivalents 327,252 (20,045) Cash and Cash Equivalents at Beginning of Period 146,006 53,269 Cash and Cash Equivalents at End of Period $ 473,258 $ 33,224
See accompanying notes to consolidated condensed financial statements. PAGE 5 OF 13 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 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 will be 66.67 percent. The alliance with S.A.C.I. 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 will continue to operate under its own name as a subsidiary of the company. PAGE 6 OF 13
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 Six Months Ended Dollar Amounts Selected Consolidated Aug. 3, July 28, Aug. 3, July 28, Three Six Statements of Earnings Data 1997 1996 1997 1996 Months Months Net Sales 100.0% 100.0% 100.0% 100.0% 23.8% 26.4% Gross Profit 27.5 27.1 27.4 27.5 25.3 26.2 Operating Expenses: Selling and Store Operating 16.8 17.0 17.3 17.8 21.8 23.0 Pre-Opening 0.2 0.2 0.2 0.2 36.8 17.0 General and Administrative 1.5 1.5 1.6 1.6 26.3 30.6 Total Operating Expenses 18.5 18.7 19.1 19.6 22.3 23.6 Operating Income 9.0 8.4 8.3 7.9 31.9 32.6 Interest Income (Expense): Interest and Investment Income 0.2 0.1 0.2 0.1 403.2 248.2 Interest Expense (0.2) --- (0.2) (0.1) 2579.8 693.4 Interest, Net 0.0 0.1 0.0 0.0 40.2 (39.8) Minority Interest (0.1) (0.1) (0.0) 0.0 55.8 97.7 Earnings Before Income Taxes 8.9 8.4 8.3 7.9 31.8 31.9 Income Taxes 3.4 3.3 3.2 3.1 30.8 30.9 Net Earnings 5.5% 5.1% 5.1% 4.8% 32.5 32.6 Selected Consolidated Sales Data Number of Transactions (000's) 148,994 124,840 278,739 229,048 19.3 21.7 Average Amount of Sale Per Transaction $ 43.71 $ 42.40 $ 43.59 $ 42.15 3.1 3.4 Weighted Average Weekly Sales Per Operating Store (000's) $ 922 $ 911 $ 879 $ 848 1.0 3.7 Weighted Average Sales Per Square Foot $ 452 $ 450 $ 431 $ 419 0.6 2.9
PAGE 7 OF 13 THE HOME DEPOT, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) RESULTS OF OPERATIONS Sales for the second quarter of fiscal 1997 increased 24% to $6,550,221,000 compared to sales of $5,292,917,000 for the second quarter of fiscal 1996. For the first six months of fiscal 1997, sales increased 26% to $12,207,495,000 from sales of $9,655,132,000 for the comparable period in fiscal 1996. The sales increase for both periods was primarily attributable to new stores (559 at the end of the second quarter of fiscal 1997 compared to 456 at the end of the second quarter of fiscal 1996) and a comparable store-for-store sales increase of 5% and 8% for the second quarter and first six months of fiscal 1997, respectively. Management believes that the comp sales comparison for the second quarter of fiscal 1997 was negatively impacted by higher than normal sales during the second quarter of fiscal 1996. Pent-up demand materialized from a late start to the 1996 spring season. Gross profit as a percent of sales was 27.5% for the second quarter of fiscal 1997 compared to 27.1% for the comparable period of fiscal 1996. The increase for the quarter was primarily attributable to product line reviews which resulted in lower cost of goods in certain product categories, other merchandising initiatives, product mix changes, as well as lower and more stable lumber costs. For the first six months of both fiscal 1997 gross profit as a percent of sales was 27.4% compared to 27.5% for the comparable period of fiscal 1996. Operating expenses as a percent of sales decreased to 18.5% for the second quarter of fiscal 1997 from 18.7% for the same period of fiscal 1996. Selling and store operating expenses as a percent of sales decreased to 16.8% for the second quarter of fiscal 1997, from 17.0% for the second quarter of fiscal 1996. The decrease for the second quarter was attributable to, among other things, lower net advertising expenses due to higher cooperative participation from vendors, lower store relocation costs (estimated unrecoverable costs for one future store relocation was expensed in the second quarter of fiscal 1997 compared to expenses for three store relocations in the second quarter of fiscal 1996), and lower insurance expense as a percent of sales resulting from favorable claims experience for the Company's self-funded insurance programs. Also, the Company incurred one-time expenditures related to the Olympic Games during the second quarter of fiscal 1996. For the first six months of fiscal 1997 operating expenses as a percent of sales were down to 19.1% from 19.6% for the same period of fiscal 1996. Selling and store operating expenses, as a percent of sales, decreased to 17.3% for the first six months of fiscal 1997 from 17.8% for the first six months of fiscal 1996. The decrease as a percent of sales for the first six months of fiscal 1997 was partially attributable to the high comparable store-for-store sales increase for the first quarter of fiscal 1997. In addition, lower utilities and facility maintenance expenses as a percent of sales resulted from milder weather in the first quarter and expenses for net advertising, store relocations, insurance costs, and one-time Olympic expenses were lower as a percent of sales as described above. Pre-opening expenses as a percent of sales were 0.2% for both the second quarter and first six months of fiscal 1997 and fiscal 1996. The Company opened 23 new stores in the second quarter of fiscal 1997 compared to 15 new stores and one relocation in the second quarter of fiscal 1996. General and administrative expenses as a percent of sales were 1.5% for both the second quarters of fiscal 1997 and fiscal 1996 and 1.6% for the first six months of fiscal 1997 and fiscal 1996. PAGE 8 OF 13 THE HOME DEPOT, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) RESULTS OF OPERATIONS - (Continued) Net interest income as a percent of sales decreased to 0.0% for the second quarter of fiscal 1997 from 0.1% for the same period of fiscal 1996 and was 0.0% for the first six months of both fiscal 1997 and fiscal 1996. Interest and investment income as a percent of sales for the second quarter and first six months of fiscal 1997 increased to 0.2% from 0.1% for the second quarter and first six months of fiscal 1996 due to investment income generated from the remaining proceeds of the 3.25% Convertible Subordinated Notes issued in October 1996. Interest expense as a percent of sales for the second quarter and first six months of fiscal 1997 increased to 0.2% from 0.0% for the second quarter and 0.1% for the first six 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 second quarter and first six 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 due to lower tax-advantaged investments and a higher effective state income tax rate, particularly offset by various state and local tax planning strategies. Net earnings as a percent of sales were 5.5% and 5.1% for the second quarter and first six months of fiscal 1997, respectively, compared to 5.1% and 4.8% for the second q uarter and first six months of fiscal 1996. Earnings per share were $0.48 and $0.83 for the second quarter and first six months of fiscal 1997, respectively, compared to $0.37 and $0.64 for the second quarter and first six months of fiscal 1996, respectively. LIQUIDITY AND CAPITAL RESOURCES Cash flow generated from store operations provides the Company with a significant source of liquidity. Additionally, a significant portion of the Company's inventory is financed under vendor credit terms. During the first six months of fiscal 1997, the Company opened 47 stores and relocated 1 store. During the remainder of fiscal 1997, the Company plans to open approximately 64 additional new stores and relocate 3 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 $13,000,000 per location. The Company may purchase PAGE 9 OF 13 THE HOME DEPOT, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES - (Continued) leasehold interests at varying amounts depending upon the value of such properties. In addition, each new store will require approximately $3,400,000 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 $2,500,000 per store. Of the 111 new stores and 4 relocations planned in fiscal 1997, it is expected that approximately 70% 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 August 3, 1997, the Company had $908,348,000 in cash and short-term investments. Management believes that its current cash position, the proceeds from short-term investments, internally generated funds, 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 10 OF 13 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. At the Company's Annual Meeting of Stockholders, on May 28, 1997, the stockholders elected the slate of nominees for election as director with votes cast as follows: Col. Frank Borman had 416,074,398 shares for and 7,311,818 shares withheld; Mr. Ronald M. Brill had 416,472,889 shares for and 6,913,327 shares withheld; Mr. Berry R. Cox had 416,417,600 shares for and 6,968,616 shares withheld; and Mr. Ronald A. Matricaria had 413,872,465 shares for and 9,513,751 shares withheld. There were no abstentions or broker non-votes applicable to the election of directors. The following other directors have terms of office as a director that continued after the meeting: Mr. Arthur M. Blank, Mr. John L. Clendenin, Dr. Johnnetta B. Cole, Mr. Milledge A. Hart, III, Mr. Donald R. Keough, Mr. Kenneth G. Langone, Mr. Bernard Marcus and Ms. M. Faye Wilson. The stockholders approved The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan with votes cast as follows: 237,760,918 shares for; 102,055,909 shares against; 2,680,062 shares abstained and 80,889,327 broker non-votes. The stockholders approved the Company's Nonemployee Directors' Deferred Stock Compensation Plan with votes cast as follows: 331,799,589 shares for; 7,774,782 shares against; 2,922,517 shares abstained; and 80,889,328 broker non-votes. The stockholders did not adopt a proposal to amend the Company's Bylaws to require that the Board of Directors consist of a majority of independent directors with votes cast as follows: 82,035,043 shares for; 241,969,792 shares against; 17,978,052 shares abstained; and 81,403,329 broker non-votes. The stockholders did not adopt a proposal to amend the Company's Bylaws to require that an independent director who was not formerly the chief executive of the Company serve as chair of the board with votes cast as follows: 69,220,478 shares for; 259,549,706 shares against; 13,726,702 shares abstained; and 80,889,330 broker non-votes. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11.1 Computation of Earnings per Common and Common Equivalent Share (b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended August 3, 1997. PAGE 11 OF 13 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 August 28, 1997 PAGE 12 OF 13 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) PAGE 13 OF 13 EX-11.1 2
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 Six Months Ended Primary August 3, July 28, August 3, July 28, 1997 1996 1997 1996 Net Earnings Applicable to Common and Common Equivalent Shares $ 357,878 $ 270,174 $ 616,712 $ 465,193 Tax Effected Interest Expense, Net of Interest Capitalized, Attributable to 3.25% Convertible Subordinated Notes 5,845 ------ 11,686 ---- Shares: Weighted Average Number of Common and Common Equivalent Shares Assuming Average Market Price for Period 737,928 723,669 734,469 722,076 Additional Shares from assumed Conversion of 3.25% Convertible Subordinated Notes 23,957 ------ 23,957 ------ 761,885 723,669 758,426 722,076 Primary Earnings per Common and common Equivalent Share $ .477 $ .373 $ .829 $ .644 Fully Diluted Net Earnings Applicable to Common and Common Equivalent Shares $ 357,878 $ 270,174 $ 616,712 $ 465,193 Tax Effected Interest Expense, Net of Interest Capitalized, attributable to 3.25% Convertible Subordinated Notes $ 5,845 $ ------- $ 11,686 $ ------ $ 363,723 $ 270,174 $ 628,398 $ 465,193 Shares: Weighted Average Number of Common and Common Equivalent Shares at Higher of Ending or Average Market Price 739,557 723,669 737,379 722,437 Additional Shares From 3.25% Convertible Subordinated Notes 23,957 ----- 23,957 ------ 763,514 723,669 761,336 722,437 Fully Diluted Earnings per Common and Common Equivalent Shares $ .476 $ .373 $ .825 $ .644 (1) Common equivalent shares represent shares granted under the Company's employee stock purchase plan and stock option plans for the three and six month periods ended August 3, 1997 and July 28, 1996. All periods have been adjusted to reflect the three-for-two stock split in July 1997. Exhibit 11.1 (continued) THE HOME DEPOT, INC. AND SUBSIDIARIES Computation of Earnings Per Common and Common Equivalent Share (2) The Company's 3.25% Convertible Subordinated Notes issued on October 2, 1996, are common stock equivalents. For the three and six months ended August 3, 1997, 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. (3) For the three month period ended July 28, 1996, the ending price of the stock was lower than the average price and therefore the average price of the stock is used in calculating fully dilutive earnings per share.
EX-27 3
5 1000 3-MOS FEB-01-1998 AUG-03-1997 473258 435090 399661 0 3196919 4595371 6731581 851578 10662164 2483498 1262180 0 0 36499 6536422 10662164 6550221 6550221 4749517 4749517 1218379 0 3403 585728 227850 357878 0 0 0 357878 .48 .48
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