Home Depot, Decomposition of ROE, 1986-1999

1986
1987
ROE
26.8%
33.2%
NOPAT ($ Millions)
30
56
NOPAT Margin
2.9%
3.8%
Net Assets ($ Millions)
290
263
Operating ATO
3.5
5.5
Operating ROA
10.2%
21.1%
Net Debt ($ Millions)
201
100
Net Financial Leverage
2.25
0.61
Net Interest Expense After
5.70
1.50
Tax ($ Millions)
Net Interest Rate After Tax
2.8%
1.5%
Spread
7.4%
19.6%
Financial Leverage Effect
16.6%
12.0%

1988
23.9%
77
3.9%
347
5.8
22.3%
27
0.08

1989
29.2%
114
4.1%
475
5.8
23.9%
92
0.24

1990
31.9%
167
4.4%
681
5.6
24.5%
169
0.33

1991
36.5%
240
4.7%
1,079
4.8
22.3%
395
0.58

1992
21.5%
346
4.8%
1,568
4.6
22.1%
(123)
(0.07)

0.60

1.60

3.70

(9.10)

(16.70)

2.2%
20.1%
1.7%

1.8%
22.2%
5.3%

2.2%
22.4%
7.4%

-2.3%
24.6%
14.2%

13.6%
8.4%
-0.6%

1993
19.9%
439
4.7%
2,735
3.4
16.0%
431
0.19

1994
21.5%
609
4.9%
3,267
3.8
18.6%
453
0.16

1995
21.3%
722
4.7%
4,390
3.5
16.4%
948
0.28

1996
18.8%
932
4.8%
5,602
3.5
16.6%
614
0.12

1997
19.5%
1,159
4.8%
6,647
3.6
17.4%
691
0.12

1998
22.7%
1,618
5.4%
8,235
3.7
19.7%
1,137
0.16

1999
26.5%
2,315
6.0%
10,258
3.7
22.6%
1,618
0.17

(18.70)

4.60

(9.50)

(5.80)

(1.20)

4.30

(5.50)

4.3%
20.4%
3.8%

1.0%
17.6%
2.8%

-1.0%
17.4%
4.8%

-0.9%
17.6%
2.2%

-0.2%
17.6%
2.0%

0.4%
19.3%
3.1%

-0.4%
22.9%
4.0%

Home Depot, Operational Data, 1986-1999

1986
Sales ($ Millions)
1,011
Number of Stores
60
Total Square Footage at year end
5,000
(000)
Increase in Square Footage
20.6%
Average Square Footage per Store
80
(000)
Same Store Sales Increase
7%
Weekly Sales per Store ($000)
355
Sales per Square Foot ($)
230
Number of Customer Transactions
34
($ Millions)
Average Sale per Transaction ($)
29.73
GMROI
179%
Number of Employees at yesr-end
6,600

1987
1,454
75

1988
2,000
96

1989
2,758
118

1990
3,815
145

1991
5,137
174

6,000

8,000

10,000

13,000

16,000

27.6%

33.4%

26.9%

27.4%

24.1%

82

86

88

92

95

18%
418
265

13%
464
282

13%
515
303

10%
566
322

11%
633
348

48

64

84

112

146

30.24
219%
9,100

31.13
219%
13,000

32.65
233%
17,500

33.92
246%
21,500

35.13
255%
28,000

1992
7,148
214

1993
9,239
264

1994
12,477
340

1995
15,470
423

1996
19,535
512

1997
24,156
624

1998
30,219
761

1999
38,434
930

21,000

26,000

35,000

44,000

54,000

66,000

81,000

100,000

26.8%

26.3%

33.2%

26.3%

21.6%

23.1%

22.8%

23.5%

98

100

103

105

105

106

107

108

15%
724
387

7%
764
398

8%
802
404

3%
787
390

7%
803
398

7%
829
406

7%
844
410

10%
876
423

189

236

302

370

464

550

665

797

37.72
254%
38,900

39.13
236%
50,600

41.29
238%
67,300

41.78
227%
80,800

42.09
232%
98,100

43.63
224%
124,400

45.05
227%
156,700

47.87
243%
201,400

Home Depot EPS and Stock Data 1990-1999

1990
Diluted EPS ($)
0.10
Diluted EPS Increase
43%
Weighted Number of Shares
1,824
Assuming Dilution (Millions)
Return on Stock Home Depot
54%
Return on Stock S&P 500
-5%

1991
0.13
30%

1992
0.18
38%

1993
0.22
22%

1994
0.29
32%

1995
0.34
17%

1,985

2,096

2,132

2,142

2,151

167%
32%

48%
8%

-20%
10%

19%
2%

6%
38%

1996
0.43
26%

1997
0.55
28%

1998
0.71
29%

1999
1.00
41%

2,195

2,287

2,320

2,342

6%
22%

81%
34%

111%
28%

77%
21%

Home Depot.Inc
Income Statement ($ Millions)
Years Ending January
2000
1999
1998
Net Sales
38,434
30,219
24,156
Cost of Merchandise Sold
27,023
21,614
17,375
Gross Profit
$11,411
$8,605
$6,781
Operating Expenses
Selling and Store Operating
6,832
5,341
4,303
Pre-Opening
113
88
65
General and Administrative
671
515
413
Non-Recurring Charge
0
0
104
Total Operating Expenses
7,616
5,944
4,885
Operating Income
3,795
2,661
1,896
Interest and Investment Income
37
30
44
Interest Expense
(28)
(37)
(42)
Interest, net
9
(7)
2
Earnings Before Income Taxes
3,804
2,654
1,898
Income Taxes
1,484
1,040
738
Net Earnings
2,320
1,614
1,160
Basic Earnings Per Share
1.03
0.73
0.53
Diluted Earnings Per Share
1.00
0.71
0.52

Home Depot.Inc
Balance Sheet ($ Millions)
As of End of January
2000
1999
ASSETS
Cash and Cash Equivalents
Short-Term Investments
Receivables, net
Merchandise Inventories
Other Current Assets
Total Current Assets
Property and Equipment
Land
Buildings
Furniture, Fixtures and Equipment
Leasehold Improvements
Construction in Progress
Capital Leases
Less Accumulated Depreciation and Amortization
Net Property and Equipment
Cost in Excess of the Fair Value of Net Assets Acquired
Other
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts Payable
Accrued Salaries and Related Expenses
Sales Taxes Payable
Other Accrued Expenses
Income Taxes Payable
Current Installments of Long-Term Debt
Total Current Liabilities
Long-Term Debt, excluding current installments
Other Long-Term Liabilities
Deferred Income Taxes
Minority Interest
Total Liabilities
Stockholders' Equity
Common Stock
Paid-In Capital
Retained Earnings
Other
Total Stockholders' Equity
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

168
2
587
5,489
144
6,390

62
469
4,293
109
4,933

3,248
4,834
2,279
493
791
245
11,890
1,663
10,227
311
153
17,081

2,739
3,757
1,761
419
540
206
9,422
1,262
8,160
268
104
13,465

1,993
541
269
763
61
29
3,656
750
237
87
10
4,740

1,586
395
176
586
100
14
2,857
1,566
208
85
9
4,725

115
4,319
7,941
(34)
12,341
17,081

111
2,817
5,876
(64)
8,740
13,465

Home Depot.Inc
Cash Flow Statement ($ Millions)
Years Ending January
2000
1999
1998
CASH FLOW PROVIDED BY OPERATING ACTIVITY
Net Earnings
Depreciation and Amortization
(Increase) Decrease in Receivables, net
Increase in Merchandise Inventories
Increase in Accounts Payable and Accrued Expenses
Increase in Income Taxes Payable
Other
CASH FLOW PROVIDED BY INVESTING ACTIVITY
Capital Expenditure
Purchase of Remaining Interest in The Home Depot Canada
Payments for Businesses Acquired, net
Proceeds from Sales of Property and Equipment
Purchase of Investment
Proceeds from Maturities of Investment
Advanced Secured by Real Estate, net
CASH FLOW PROVIDED BY FINANCING ACTIVITY
(Repayment) Issuance of Commercial Paper Obligations, net
Proceeds from Long-Term Borrowings, net
Repayment of Long-Term Debt
Proceeds from Sale Common Stock, net
Cash Dividens paid to Stockholders
Minority Interest Contributions to Partnership
Effect of Exchange Rate Changes
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year

2,320
463
(85)
(1,142)
820
93
(23)
2,446

1,614
373
85
(698)
423
59
61
1,917

1,160
283
(166)
(885)
577
83
(23)
1,029

(2,581)
0
(101)
87
(32)
30
(25)
(2,622)

(2,053)
(261)
(6)
45
(2)
4
2
(2,271)

(1,420)
0
(61)
85
(194)
599
20
(971)

(246)
522
(14)
267
(255)
7
281
1
106
62
168

246
0
(8)
167
(168)
11
248
(4)
(110)
172
62

0
15
(40)
122
(139)
10
(32)
0
26
146
172

Projected Growth in U.S Market for Home

Improvement Products, as of June 2000
Year
Percent Change Over Previous Year
2000
6.30%
2001
3.20%
2002
4.00%
2003
4.40%
2004
4.60%

Summary Data for Lowe's ($ Millions)

Sales
NOPAT
NOPAT Margin
Net Assets
Operatinng ROA
Number of Stores at year-end
Comparable Stores Sales Increase
Sales per Square Foot
GMROI

1999
$15,905
$727
4.6%
$4,961
14.7%
576
6.0%
$303
169.0%

1998
$13,330
$530
4.0%
$3,545
15.0%
520
6.0%
$273
173.0%

1997
$11,108
$398
3.6%
$2,810
14.2%
477
4.0%
$302
162.0%