The Home Depot, Inc. "erence been a company ith concept nd oe wou ihe deme wet stk tase for 0 omer cringe noe alo 10 inc ips Te Home Depa ttc ck nih mile poe 27 28a ty caringr he caren far ening it month Oh fe (is Te ome Dept ih som laugh on forex monar rh ‘sacha of advoe re ata Nol os i cay then ef te arr meso age rca outs ~ 60.00 1000 ernst Yc ton wf le of ss ites il he eye nom vero nek ether ery decent con “nd rh the wero non thes igi hee dj Te one pet qua ean ch man at ups a ge leer ego grace and ee peti tf xa sece The cope as haps i maser i promatlon an ring. Tet ewe oni | od 22st al of am ae het an ssl tie $ Girth has ee sing Revere «mer S2 lon fal 0 saps ‘te utr bilan marke years ee eto cory. they climbed fom a fc 8). a ena em the fl ernie on a ta ys i mary bower in he Set, morn omit mor of san fr the lth on se They cone ein 3% pot he ea ‘ore Cal Be Bu whene shr fh enem fore conpay mth. ‘ings misono bead nw oe wee tet ne = tele The Home Depot sh mail Mayet mer mown he “Ton ie por Spero acc 21,185, "Up & Down Wal Soe a cote aro fant wes COMPANY BACKGROUND. Theat pena fr er jc,sero Wie ering ow prices, Te Hae Dept waar ato seth dh nrc sd ey f poser eed fe ae ‘Pete ca highs pours nev seed wall ies ch ame Depts x il ppt 4.5000 of near, ml cussing of aprtinney 25.000| samen pagent lth nese le ert et ‘Spay abe ocd ts coon he pescs sly wer he est on ‘he Hose Depron vere brands lw esr Aswan ‘Rely ctv ty te company’s eran mange Eve) procs ty Te ‘lhe Dept az pruned by er be manacae ye op el. “fhe Hse Def sonplencned be sve meaning eng wi ele es stance tee he est may fe comers inane rina hone nets wi po por epee In i bose npovenen recs Te Home Dat Sale enor? cea none sd serve ein 0 be very 7 ‘isto ts asgetg Pcs The company pure tuner pls aes SEL Appoint 90% ofthe cans employers wee on» lltie Bs To ‘inc sean song sls fh eben aed aay ad wage levels ‘Sone dav os competion All Bor ses peso wend sl tating ‘isch heap toowege ft companys Rone ingrovenet ots dei ‘at aplioes Tis ing embed om owes opps queso adhe cr SESmE thers expen et rater appoint fort poet Oe ie ege| ‘Shs aces pesca peviedcesed ston! heaved in como ona wit ‘Gece oaghom he drain of hese ee nly ant nots Te ome Dee pursed aepese hers ro- yam ung newspapers elena let al alga. Te comDy > Ecang eond promesond png. te toud sme a dep of Is we ‘hand esluce provi ys ss pence Te compa a pom ‘tet Seonsesin of vous wei nd prods wee a SxSSopran comers The Hace Does ae ope sen ye 8 wh, Sedo very vse. Fonciapae oeetedc The Home Depa’ rae Des ‘arhowe stores fe shopper ep Aco wih minal eric and Fecktctuses ance etme Deas es have al hci of gh Soar prenny ts prcer Bass sw arta ep toe Ee Alou nro ring lot ple ne A donna in [Povpesmagis he meio acral cone ping. merorsing and Secu conn Thing sere whi pee and hare teat, Ie eo the I he d-youre (I) semen the indy — ‘TR aie lf sphere ses bung apy wrens nd be ‘Bp hoe senars= The Home Depo he ot cmpany ths ‘Beefy of hewn few pres nd Nh erie ‘The thane Dep see ws crf blag a imresne owe com p's owalon Te tne Hoe Dept stares opened in lian in 9. ne © (eck ste rom hs moses pana, be copay ew ply and wet oi in ‘Sat Tie company's sock tty ded ween dw ited on be NeW ek Set Bxtnge n Apa 1904 Soe sew Sores wee opened in mae 2 ene pn ora nyap ty Sint te oi str pray oe Dg ‘Son maon 985i | proses may of prow Be oy ap ‘ons Te cng sak pe perfomance daring 95S summa EN INDUSTRY AND COMPETITION ‘ee honsimrowenet indy was ge ad poving ring i 980 The ay ‘toe poset SB 8S nd rg indy ero wo pt eau, ep ne Gotsoure (1) ean his ad preva coon ‘amd aro pret vere st S yr Wi the mamter ope Sousa gavin ee sine ile es dete ore, ‘ny boncorners ete unsrng hse pojs yen ae an igo {ase Resch candace byte Dod esl sea ins te eran even Eg "Ie ecnsof won eng ocd by Te Hone Depo ate ter compe ine nny Anan he areca ea opersng Indy wet Bules Sour sen of K Mar, Mr. HOW ta dine. erase) The Hone Cb sna Zar Cn, Payles Casas SHG [EWR Gand Hechinger Co Noo tee se nano Pew tating oso "Among Te Home Depts comptes, es sues ws Hen Wi pera arrr se fag ied ety need Uo ean ene eA nary of eso’ ce San peforare ps i Exh ‘THE HOME DEPOT'S FUTURE We The Home Dep had cite id rm vy yea sine is ie ‘Sore cle wich was inane ily As The Hane Dept engaged in mar Sow eves es 6 pretom 0% monn fl 6640S mien over bsompary's caring Js! in 9 om eee el ached ‘he preva hel eu Ue a 185, Te Hoe Dept eed 83.2, C308. ‘Stas coapured wat S141 elon 5036 per star fl 198, Sarah ae Opt hn oe, en acl 1985 was ear ofp epanion ad coined pooh fo The Hone De po Fed he ne wr ip rari enhance ur hare edo oars (or te ard he opera mateo snot ice io em ‘ur Ar Be one ewe oped that hr pg growth al Gok‘he Hane Depa’ 198 ml opr (EAM 4) povided ere tis te St noc perforce ing ea [As feral IDES cae be, The Hose Dept ue ce ee. The com esonin ed yun nazy wa hein Te ae x mat ens ws ‘pedo ret pre om mari dinar el startles. aed ut cpa Gm inh dey fo ee, As ae Hoa Dept bd fioouced plans fo furherexpenson at cede opening ane sow sree 1986 Te conpny ema sh ose ad enacion woul co ts 86 fal fr ech sie nd einen ines tf vendor Sati) wale ‘eg an eion SL lls per are Te conpery nese ios aed ‘teint ingleneat pla. Home Dept edo exe! acing bth ee al eu—o fends pth ia sb a 1985 Howe be sean pi iy sce pce 158 ade Fe ay Snucring ns sci, Woe he company col ety i eof ‘dso make met Hen lye inert Sverge etme (ee Nae 3 sib § fre Sci of dk coven msn), Cerly gene oe exh os own oper would bee ex wy frome Dept tien who ‘oninbl tata QUESTIONS 1. aut Hane D's cnc rng Toy hi te ae eye tong 2 Amiyae Howe Dep's hal poms dig te fa ear 1983-98, Compu Howe Des performace nis bd with Heng’ erence. (fo my ee sw he css Dow sayin xh a sane) | How podacive er Ham Depa sore inh Sl yen 1983-19857 Yon uy seats i aI as ala) 4: Home Depot's rie roped by 23 pres bee nary 1985 ud Febery 1986 ang tea or company eon uy cpl floes owe Coven x exis et (ses in Nee 36 Ech) eit ape ‘tecorany’s fur boroving Give se oss, wal ec ie sald ‘Hose Depa ks win espe cane pron td owt seg an ‘Seconpan ingen sop pone? Stale compan change ect exits tow? 4i} ath atlexHuiT 2 ‘The Home Depo's Common Stock Price ard Standard & Poors S00 (Composite Index from January 1985 to Febuary 1986, Home Depot 87509 ue ‘Sock Pace Compote dex sins sa ‘Reventon ceEXHIBIT “The Home Depot Inc. ~Samunary of Finacial Performance of Hechinger Company |. Hechinger Financial Ratios arene frag foray ve in Se Pct a0 o ant dia Ce pen pe ce on ceed cf hs ono me rare ee teFen Ae ss er tnteg Feta Ftany2, acy 28 Theva) ioee ile Provided from Operations ne mn eam saa teu ft or arate prison od sero re sea. a0 Part core a ts ioe isis Daored row gent ant iow ta sao wa as vested in Operon acobls 9 3908 394 ere 990 is se nee “o Sno 10 pean sree eps yom Sesame 2s aa aan gee Cash Provided fom Operations nim i9007 reser epery mri epee Geen nd eo es assy ame) edt Pay Dien to Sharon ss cam oy Provided from Financing Aceves ions chs com nto ie ica = SS span cling ean echt en mse = ne cronies i 4 oe (Cc) ning ee) sk openly cane eben = om ntl ae igre guy q “as —a Incas n Cath and Marian Secures stat sia sineet Bao Ap nd exe m4 “The Home Depot, Ine.—Abridged Annual Report for Fiscal Year 1985 ‘A Later to Our Shareholders: eal 1S was yr cap expen cone {Gcyoma or The Hone Dee Feiy he ne Sefer ont ene our aur the eur Sam ieeanee hoo ipsam ae A ‘Sous oop eo err poh trowevnows tee ‘The Hone Dae anf wh er or a secure we verve The yon Sagan ering new mre wera Ses commune tpn map fen po ieee cor sce cr wp soe [Fomocon nd gownp em ere meat Vr Stnoves bios eter a ae tbe from tera barn nt ua 980 hte ‘eta ~Daan Hon edoonle, Se Deg, (eregum Saar Ben Raga Hesse Speted oppo 9 mon nace, tirve oe Dot soso trai Be nandng owrseqerrdn de baee ‘Squotn wich ad ote ow one (Soyer ae Dengan ce pants ‘Seams th any mito woe nya ‘Sg sre or See “re exon roy reuied venendone ‘ns ap eens nave a IRpracrel Arama surtc eng ddd fem cartes serdar Oreo Jain ta 198, Te oe Depend $8000 a $33 prs romper wih Snot or $30 po sry noc 984 Fa fea Te one Duet npg a map ot cena cadet erat Presence rote 3 for $0279.00 8 fee nes shana tac 8 ‘a ou sect ree we i cot {Sens yy monger con nec, “Tete Door acd pr $10 eo fark ‘cede in waned ooo ‘Se pvement 0 men macaw re ‘mingricandiartac eae orang (et prema $5 mio rf ur ‘Ste Tem eee tara ie yg th ‘rural roe ah ‘Socyer aga ar cms sn coon che fo yen ‘eg mito or anaes ap ne Gear al ome ‘Soca perry Soca eh Sy femsrce ota "pays tg a won Scr pi ures ar fay Seine andor cureee “Weert vata fdnelope a compress eae Sore sree ne eigen ng eeepc eeur ‘Si opine toa Te Home Dept SLE ees Ee Se Si camwuee Sioa ieieeteaeemeinares ese Soares oe Seresmoeoa Semin Tresor one Seueuarsese mhcenwienere Scena Sy we Shoes Soo noe Sores Width re tnionbg mts Ser wero two lawpourpr ss man ve pong ‘beget lan balan rater nda Fer terry f Amarin an se tose nih suse rane fey (retire cnt eal fenggtare imaneancey cringe ‘Secon We Tus ae Depot re ing yous savergeng e alone ise tomers ody mang inden curtain erased ound [Strom ctu nee of pews wih poe‘he Home Dapor mange and maar deed ‘rer a oar ee: Se Operteg Ofer ‘CONSOUDATED STATEMENTS OF EARNINGS ‘700,72 000 12435400 "sno asso Warr ‘arr a Waste s2n00 Incomes (rote 4) Nat Eanes[CONSOUDATED BALANCE SHEETS 21906 5 247100 arate s.00CCONSOUDATED BALANCE SHEETS fated) Febery 21986 ‘Sooven sock pre $65 Astra 200000 te Toned und esr 230009 srs eonay Tt S85 oe ar aba ‘etm one Main arg “Res ey ety Comer and Coningenier ‘om stand) 20193000 CCONSQUDATED STATEMENTS OF CHANGES IN FINANCIAL POSTION, ual ned a Soares f Wore Capea Neon seiineo 140m SET cneting cote Daesinen Od onraas pope ad ered ones eeraantee ect ei oh zp o dao of py nd Working ale rove by pertins ection sont ope pec fon ogstr rng arson "Seaeoo es etWerking Capa adore eo ore ne iment ion of ona Home Case eto 3 9217 0 2 pre = tais00 oem come a" thr ae et te = Nonesmesngs00 $ 11917000 at irom * S60 ee aime ahr ‘ego _ a0 aa eed opie, aioe "Sib ere (Git saanoe ort fog ee “i000 eos Saumioos, Fame ShaoSELECTED FINANCIAL OATA ee cmp hasrooe T4390 ee inane nano meses SS ios eo en fpr ean ce “ount se {ENTS DISCUSSION AND ANALYSIS OF RESULTS OF AONS AND FINANCIAL CONDITION ra on econ pocenge mena tewn i nd aor gr sme meg ned rau Orr oe oi aa me tee ie ‘panes asiioo same aa paeeeronny sae mn pat mary Sepeaprimenre ¢ season § asses 2am) “Tha nape Pl V00 soe a5 ne se 1 od ED eh conf 5 we ear Ended Feb 21988 Compre o Fb 3,1905 Nec les fc yo 85 and or $5270 6 $7072900, The PSLLES. inca ice one compe opened 2 new ses ih ee cl tts dt ow vpn cre noo Ma eee otal srs opersan-ne wes we ese an rears a ey enabh aa aFes Rate Aad i Gor prot 5 nerd 5% tow $1900 845710, The arg seta mtd lt td at rey fay eaten Oe ros pre fron 2612598 The reucton bpm oe raed ae mrtcyeec ney are on sf poses were 7% ring 185 ak pref en, reed 03k 0 Hk The se I sel A noe cprung peapeg cos Inara epee anh opnag nw nares om forte wf ‘Shen one Cun sees ide ot ang rat Sar Th ry ng fey nee io ele bt ed ecapty an a on Sng epee tne ce oe pocenage segs now open a a prc fs, The tpn on apssn af poe and eq ip ere Noun vere Ens bre oe ens decreed 5% bom $2452.00 wo $1619.00 omthencare epee pent apport Compu? epson papa (Coan cv ume ceed Yon #638 tw 99% maley fon ‘hse crag ecard Fam 2.38 ses HS an cee caer Ended Fran 2185 Corgared a auty 21904 Net aes fc asd 6 re $5464.02 40.7700. The owt eral ners ters, Fv company peed bret ar ugh Scand Conary el 975820 form re former Bont Nene Su ged ob Deer 0 The candy cle ees were red ‘Genes re peed cy fal Ih Pour compre are ses amt ‘hammer: fe peter one anny ere mene sr eres 1% for SILSAOIOw 262520 compe acer aucaed shove Sus preau cong, howe we ee ‘Se Boot sore eon $1 O00 roma cf acuson cee eat rT Cong efeciencae rnered sgh fom S08 Teer or trecone ache et eh tage Dr As peerage ly ins Seced Yom 0% fe 98 013 [STW6t The deci trod fe congas raced po pat peg ‘Semin prt epee duced ae Inga ot Idan ed Chang PeeFn Th Conary fa ample wt rperang egret he Fre ‘inmng Suede bod Same Na 3a oe ensues Doe ‘Se tipertnre ingen sje eins nd sump sn th soni pe ‘Ghocon cored brow mcunng pono: oe Came gues to ‘Seveeuns apo ‘ay and Caples Resor Gah fw gener fom cry are oprn pre be Comp wh» i (eens oy ses Ses tons cavandcy tae sao apereor evo ba Comp esr fanend sae nor on me Tu pay ‘Spleerad grange low moro enh bk cade od ab ‘Raven Our oe Ine $58,000 of norng pel was prone ro reas ne s4t00 fom tl re bo nd pean S178 fo omar nnn an tc 98S Congr eared ob oon ee Inceiees SnD rting rea oly wha Pop of oo ‘Covey mr th pm er ng a ne prs wl ep opon wo we Se sets Compe[NES TO CONSOLIDATED FINANCIAL STATEMENTS 1, Summary of Sinifcane Accounting Poles “The Cony aya edhe dy neh i yf uy 2 ay connate Eyl teas on mere Showa yt Te el at SETSSLT Tiss Uae ald Ss yr ned Fry 3 a tine cowie of wna tab pte par 1104190) coend of Principles of Conan 3 “The enced fran onan cae he cn ol Capa ad oot Stour A pian copy nace a en ce sia Sree ReeEite were nade oe BD ince eto eno Earn Seri sand fo oo atin. cn) mrt deri on eal enor meted ? Depron ad Amartaton 4 “The Conynys bug, fries, nes eupret we depen eg seupnnchebod on be me sla eral srs byrne EaPSEitet ose weapon ated oo ol ewe oe el ‘Seinpovonne whch sheer Teroer cree ae eared rec fete nce nt _ eta eda moi th pang tore ad ri uring fer Common and Canmen Eqn Share unter i rend eurin ora Conon equals are ede SETS pe sre epee sre panee ae be Coopers enor pec rnd enpes wpe peapart t Cay Boni hyn ended erry 4185 ed “iret mt ogee wee lee bag a yr 9 reared ror be acer he ta of opresore {Shay 195 rere x eh eprom. erp eee 6250900 sauasiow na conmeron pen 51690 per ar Teco ‘adeeb Conga 2 premin fon Dc {2 ows bec 161990 Ando andor sre fests mas pare Sot comer aortas eebecuet caasasee | ODer ching cer ogmemans ran becom orton, ‘erg up 180k the Compr apn aed SECO ei Oak aga Beeps 7 ‘ert ate nr Ree ond note) Tasones ——satoasae “Wrabe Rattndnral Renu Ban secre eer ot ‘raspy nosing nas om ace | ‘Sh dra Owens 200 ‘400000 int Ree ov rey ae ord pte Dacia 9h eres pate eo oa ‘200000ceca nae aan ets ahaa aac ; Ec cee I == epee aac ee aa07900 vn gen mn i ot resin ine of eae ors asim of §200000 000 ict tral aon of teh ae seats eee care eno Saha ame nee nse Riaae ge iat ance tesatchayai hee toetcertane wre Veer ss dees ow greene Une cera conn, the comers Semana cogeeenne are casey sarah ieee \ Sa i mar eee soo oe se : wa bomhoharenn ors naas a SE ne Seem eon tee area Eu uvtererseecrumoe Soe int cptee tect eter soem ‘fucmans sey te anil rnc baer pd he oer ord ere eens inh cmon cnc starr rings mt 4. Income TaxesFa i Sa ya Fer! 457800) amon sens = ste tesa “ta pa sow srom0 non) arom) 009 _ 109 a cd ieee eg ‘ested depen ‘aeow —shissmo 713000 trees canon ‘sso 30 a i = Es 5. Leases The Company ne cra real oan end rsa a rin pce pitas nd ces wae opontaginns Aes i eg inne are ‘nme expec tn normal cure un as bee ‘pd Tal re penne mo ae came ek yrs sed Fe $7 recy 3965 sn nay, 904 smote occ $1897 riacnd se sabia, mepecny Under be bang asa rl” ous areInara, an opeaeg pti plo he ied propery Seay Gretna ern rome Sey ne ya oe acy er s714ss60 Taam 17, Disposition of Property and Equipment arg eer urea a 55 he Congr pee of en deadpan xs: pint $1517. Te proper reed eo a Barc ouran 2d eso ad ene praeedherncen f Sto gan poe ose moped e soms oe Oe Soper be Se Bi eo oe Comma dy uso py oe Congr td tre sre on ore Congr prepa so ong eucdin soo rca Spee 3185000 enad eo wanes £8, Commitments and Contingencies sven ae eres oes ree The Comper sion gray om srt af ata coo gen wi ey set Compe nr onion 4, Quarterly Financial Data (Unaudited) “Teflon ry fh nnd grey rt of pronFmt ys 5 36300000 Ssnowe note 5 momo iesofeo _ 39700 4 sie cee AUDITORS’ REPORT ‘The Bol Dre nd Seen, The Home Depot hes Wehr rid he snd bc shen The Home Dept ea i ‘aya Februar 3 ad abrary 95a rnd Cohn ton ‘tangs sole gy wa cng nel pontine ch he pu the ‘ran ret ned briny 200 Our manent Set ap ign sng cd we oo ‘hw option tn serontredcnthied Sorc steno ty os earl petion Ta Hane Dep an ery utr 0d ey {Subbed of opr Garg Rl ptr an af fe ye noe rane pureed forays Conary wh para ed coon pees pled on cor bs ‘eco Siro ae