SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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 EX-
CHANGE ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
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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
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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
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THE HOME DEPOT FUTUREBUILDER
Financial Statements
December 31, 1999, 1998, and 1997
(With Independent Auditors' Report Thereon)
THE HOME DEPOT FUTUREBUILDER
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Schedule of Assets Held for Investment Purposes 9
INDEPENDENT AUDITORS' REPORT
The Administrative Committee
The Home Depot FutureBuilder:
We have audited the accompanying statements of net assets available for benefits
of The Home Depot FutureBuilder (the "Plan") as of December 31, 1999, 1998, and
1997 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, 1999. 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 at December 31, 1999, 1998, and 1997, and the changes in net
assets available for benefits for each of the years in the three-year period
ended December 31, 1999 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
Schedule 1 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. This
supplemental schedule is the responsibility of the Plan's Administrative
Committee. The supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ KPMG LLP
June 23, 2000
THE HOME DEPOT FUTUREBUILDER
Statement of Net Assets Available for Benefits
December 31, 1999, 1998, and 1997
1999 1998 1997
--------------- --------------- -------------
Assets:
Cash $ -- 348,590 341,324
Investment (note 5) 2,442,810,306 1,440,928,167 703,441,422
--------------- --------------- -------------
2,442,810,306 1,441,312,757 703,782,746
--------------- --------------- -------------
Receivables:
Employer contributions receivable -- 6,913,263 10,539,803
Participant loans receivable 38,266,706 19,397,904 7,329,452
Other receivable 749,486 146,641 --
--------------- --------------- -------------
Total receivables 39,016,192 26,457,808 17,869,255
--------------- --------------- -------------
Total assets 2,481,826,498 1,467,770,565 721,652,001
--------------- --------------- -------------
Liabilities:
Accrued liabilities 355,724 553,163 490,198
Other payable 636,670 494,967 2,728,134
--------------- --------------- -------------
Total liabilities 992,394 1,048,130 3,218,332
--------------- --------------- -------------
Net assets available for benefits $ 2,480,834,104 1,466,722,435 718,433,669
=============== =============== =============
See accompanying notes to financial statements.
THE HOME DEPOT FUTUREBUILDER
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1999, 1998, and 1997
1999 1998 1997
--------------- --------------- -------------
Additions to net assets attributed to:
Investment income:
Realized gain on sale or distribution of
common stock of The Home Depot, Inc. $ 46,416,984 12,558,447 30,810,110
Realized gain on sale of shares of registered
investment companies 8,295,525 4,178,694 1,046,972
Net unrealized appreciation in fair vaue
of investments 880,597,712 659,591,800 236,552,302
Interest Income 13,898,916 1,031,654 735,630
Dividends 3,608,370 7,821,045 4,681,418
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952,817,507 685,181,640 273,826,432
Contributions:
Participants' 120,578,245 85,298,480 63,988,463
Employer's 58,786,276 38,328,001 32,555,354
--------------- ---------------- -------------
179,364,521 123,626,481 96,543,817
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Total additions 1,132,182,028 808,808,121 370,370,249
Deductions from net assets attributed to :
Benefits paid to participants 114,284,453 57,872,186 38,092,137
Administrative expenses 3,785,906 2,647,169 2,069,154
Interest expense -- -- 34,251
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Total deductions 118,070,359 60,519,355 40,195,542
--------------- ---------------- -------------
Net increase 1,014,111,669 748,288,766 330,174,707
Net assets availble for benefits:
Beginning of year 1,466,722,435 718,433,669 388,258,962
--------------- ---------------- -------------
End of year $ 2,480,834,104 1,466,722,435 718,433,669
============= ================ ===========
See accompanying notes to financial statements.
(1) DESCRIPTION OF THE PLAN
The following is a brief description of The Home Depot FutureBuilder (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 were made solely by the Company and at the
discretion of the Company's Board of Directors ("ESOP
contributions"). During February 1999, the Company made its final
ESOP contribution in lieu of increased percentage contributions to
the 401(k) Plan.
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. The Company provides matching contributions of
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. The
matching Company contribution is invested directly 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.
(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:
YEARS
OF VESTING
SERVICE PERCENTAGE
------- ----------
3 20%
4 40
5 60
6 80
7 or more 100
===
Under 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 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 first reduce Plan
expenses and then to reduce future employer contributions. In
1999, employer contributions were reduced by forfeitures of
$3,600,000.
(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) INVESTMENT VALUATION AND INCOME RECOGNITION
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 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. Share amounts
related to the Company's common stock have been adjusted for a
three-for-two stock split effected in the form of a stock dividend
on December 30, 1999; 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) 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.
(E) RECENT ACCOUNTING PRONOUNCEMENTS
In September 1999, the American Institute of Certified Public
Accountants (AICPA) issued Statement of Position No. 99-3 ("SOP
99-3"), ACCOUNTING FOR AND REPORTING OF CERTAIN DEFINED
CONTRIBUTION PLAN INVESTMENTS AND OTHER DISCLOSURE MATTERS,
effective for employee benefit plan years ending after December
15, 1999. This SOP amends the disclosure requirements for defined
contribution plans and was adopted by the Plan in the current
year.
(F) RECLASSIFICATIONS
Certain balances in prior years have been reclassified to conform
with the current year presentation.
(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) 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
o 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.
o Primco JRT Stable Fund - Funds are primarily invested in
short-term debt obligations that mature within one to three
years.
o 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.
o 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.
o 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.
o 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.
o The Home Depot Stock Fund - Funds are invested in common
stock of The Home Depot, Inc.
The fair value of individual investments that represent 5.0% or more of the
Plan's net assets are as follows:
1999 1998 1997
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The Home Depot Stock Fund $ 437,755,450 133,487,420 29,148,472
The Home Depot, Inc. Common Stock* 1,759,867,725 1,151,069,495 566,880,156
Putnam New Opportunities Fund 99,088,489 54,400,853 37,683,315
*Nonparticipant directed
Investments in the Putnam New Opportunities Fund did not exceed 5.0% of the
Plan's net assets at December 31, 1999 and 1998.
During 1999, 1998, and 1997, the Plan's investments (bought, sold, and held
during the year) appreciated in value by $880,597,712, $659,591,800, and
$236,552,302, respectively, as follows:
1999 1998 1997
------------------ ------------------ --------------------
Net unrealized appreciation in fair market value:
Mutual funds $ 35,600,891 11,442,284 9,163,070
Common stock 844,996,821 648,149,516 227,389,232
------------------ ------------------ --------------------
Net change in fair market value $ 880,597,712 659,591,800 236,552,302
================== ================== ====================
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. Information about the net
assets and the significant components of the changes in net assets
relating to the nonparticipant-directed investments is as follows:
1999 1998 1997
------------------ ------------------ --------------------
Net assets - The Home Depot, Inc. Common
Stock $ 1,759,867,725 1,151,069,495 566,880,156
================== ================== ====================
Changes in net assets:
Net appreciation $ 591,706,121 589,567,114 203,936,464
Contributions 64,510,953 41,954,541 35,121,229
Benefits paid to participants (47,418,844) (47,332,316) (1,980,237)
------------------ ------------------ --------------------
$ 608,798,230 584,189,339 237,077,456
================== ================== ====================
(6) SUBSEQUENT EVENTS
Effective April 2000, the Plan changed the trustee of the Plan to
Northern Trust.
THE HOME DEPOT FUTUREBUILDER
Schedule of Assets Held for Investment Purposes
December 31, 1999
Description Current
Identity of Issue of Investment value
- ---------------------------------------- ------------------------------------------------------ ----------------
*The Home Depot, Inc. common stock 25,598,076 shares of common stock $ 1,759,867,725
*The Home Depot Stock Fund 6,367,352 shares of common stock 437,755,450
Barclay's Global Investors Fund 1,148,890 shares of registered investment company 46,714,658
Invesco Value Trust Fund 782,523 shares of registered investment company 22,661,860
Putnam New Opportunities Fund 1,089,363 shares of registered investment company 99,088,489
Templeton Foreign Fund 1,405,218 shares of registered investment company 15,766,543
Primco JRT Stable Fund 11,591,576 shares of registered investment company 11,591,576
*Wachovia Bank Short-Term 49,364,005 shares of collective
Investment Fund trust fund of Wachovia Bank 49,364,005
----------------
Total investments $ 2,442,810,306
================
* Indicates party-in-interest to the Plan.
THE HOME DEPOT FUTUREBUILDER
Schedule of Assets Held for Investment Purposes
December 31, 1998
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT CURRENT VALUE
- ----------------- ------------------------- -------------
*The Home Depot, Inc. common stock 18,814,474 shares of common stock $1,151,069,495
*The Home Depot Stock Fund 2,179,305 shares of common stock 133,487,420
Dimensional Fixed Income Fund 927,750 shares of registered investment company 9,388,834
Barclay's Global Investors Fund 1,020,345 shares of registered investment company 34,286,478
Invesco Value Trust Fund 643,516 shares of registered investment company 20,180,662
Putnam New Opportunities Fund 931,043 shares of registered investment company 54,400,853
Templeton Foreign Fund 1,202,693 shares of registered investment company 10,090,597
*Wachovia Bank Short-Term 28,023,833 shares of collective trust fund of 28,023,828
Investment Fund Wachovia Bank --------------
Total investments $1,440,928,167
==============
THE HOME DEPOT FUTUREBUILDER
Schedule of Assets Held for Investment Purposes
December 31, 1997
Description Current
Identity of Issue of Investment value
- ---------------------------------------- ------------------------------------------------------ ----------------
*The Home Depot, Inc. common stock 9,628,538 shares of common stock $ 566,880,156
*The Home Depot Stock Fund 495,091 shares of common stock 29,148,472
Dimensional Fixed Income Fund 608,401 shares of registered investment company 6,144,851
Barclay's Global Investors Fund 868,241 shares of registered investment company 22,698,430
Invesco Value Trust Fund 508,246 shares of registered investment company 14,784,880
Putnam New Opportunities Fund 774,580 shares of registered investment company 37,683,315
Templeton Foreign Fund 1,051,020 shares of registered investment company 10,457,652
*Wachovia Bank Short-Term 15,643,665 shares of collective
Investment Fund trust fund of Wachovia Bank 15,643,666
----------------
Total investments $ 703,441,422
================
* Indicates party-in-interest to the Plan.
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: July 12 , 2000
/s/ LAWRENCE A. SMITH
---------------------
By: Lawrence A. Smith
Member, Administrative Committee