1
CONSOLIDATED STATEMENTS OF EARNINGS
THE HOME DEPOT, INC. AND SUBSIDIARIES
AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA FISCAL YEAR ENDED
------------------------------------------
JANUARY 31, FEBRUARY 1, FEBRUARY 2,
1999 1998 1997
(52 WEEKS) (52 WEEKS) (53 WEEKS)
----------- ----------- -----------
NET SALES $ 30,219 $ 24,156 $ 19,535
Cost of Merchandise Sold 21,614 17,375 14,101
-------- -------- --------
Gross Profit 8,605 6,781 5,434
OPERATING EXPENSES:
Selling and Store Operating 5,341 4,303 3,529
Pre-Opening 88 65 55
General and Administrative 515 413 324
Non-Recurring Charge (note 8) -- 104 --
-------- -------- --------
Total Operating Expenses 5,944 4,885 3,908
-------- -------- --------
OPERATING INCOME 2,661 1,896 1,526
Interest Income (Expense):
Interest and Investment Income 30 44 25
-------- -------- --------
Interest Expense (note 2) (37) (42) (16)
-------- -------- --------
Interest, net (7) 2 9
-------- -------- --------
Earnings Before Income Taxes 2,654 1,898 1,535
Income Taxes (note 3) 1,040 738 597
-------- -------- --------
NET EARNINGS $ 1,614 $ 1,160 $ 938
======== ======== ========
BASIC EARNINGS PER SHARE (note 7) $ 1.10 $ 0.80 $ 0.65
Weighted Average Number of Common Shares Outstanding 1,471 1,459 1,438
======== ======== ========
DILUTED EARNINGS PER SHARE (note 7) $ 1.06 $ 0.78 $ 0.65
Weighted Average Number of Common Shares Outstanding Assuming Dilution 1,547 1,524 1,464
======== ======== ========
See accompanying notes to consolidated financial statements.
22
2
CONSOLIDATED BALANCE SHEETS
THE HOME DEPOT, INC. AND SUBSIDIARIES
AMOUNTS IN MILLIONS, EXCEPT SHARE DATA
JANUARY 31, FEBRUARY 1,
1999 1998
----------- -----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 62 $ 172
Short-Term Investments, including current maturities of long-term investments -- 2
Receivables, net 469 556
Merchandise Inventories 4,293 3,602
Other Current Assets 109 128
-------- --------
Total Current Assets 4,933 4,460
-------- --------
Property and Equipment, at cost:
Land 2,739 2,194
Buildings 3,757 3,041
Furniture, Fixtures and Equipment 1,761 1,370
Leasehold Improvements 419 383
Construction in Progress 540 336
Capital Leases (notes 2 and 5) 206 163
-------- --------
9,422 7,487
Less Accumulated Depreciation and Amortization 1,262 978
-------- --------
Net Property and Equipment 8,160 6,509
-------- --------
Long-Term Investments 15 15
Notes Receivable 26 27
Cost in Excess of the Fair Value of Net Assets Acquired, net of accumulated amortization
of $24 at January 31, 1999 and $18 at February 1, 1998 268 140
Other 63 78
-------- --------
$ 13,465 $ 11,229
======== ========
LIABILITIES AND STOCKHOLDERS, EQUITY
Current Liabilities:
Accounts Payable $ 1,586 $ 1,358
Accrued Salaries and Related Expenses 395 312
Sales Taxes Payable 176 143
Other Accrued Expenses 586 530
Income Taxes Payable 100 105
Current Installments of Long-Term Debt (notes 2 and 5) 14 8
-------- --------
Total Current Liabilities 2,857 2,456
-------- --------
Long-Term Debt, excluding current installments (notes 2 and 5) 1,566 1,303
Other Long-Term Liabilities 208 178
Deferred Income Taxes (note 3) 85 78
Minority Interest (note 10) 9 116
STOCKHOLDERS' EQUITY (notes 2, 4 and 6)
Common Stock, par value $0.05. Authorized: 2,500,000,000 shares; issued and outstanding--
1,475,452,000 shares at January 31, 1999 and 1,464,216,000 shares at February 1, 1998 74 73
Paid-in Capital 2,854 2,626
Retained Earnings 5,876 4,430
Accumulated Other Comprehensive Income (61) (28)
-------- --------
8,743 7,101
Less: Shares Purchased for Compensation Plans (notes 4 and 6) 3 3
-------- --------
Total Stockholders' Equity 8,740 7,098
-------- --------
Commitments and Contingencies (notes 5 and 9)
$ 13,465 $ 11,229
======== ========
See accompanying notes to consolidated financial statements.
23
3
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
THE HOME DEPOT, INC. AND SUBSIDIARIES
AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA
COMMON STOCK ACCUMULATED
--------------- OTHER TOTAL
PAID-IN RETAINED COMPREHENSIVE STOCKHOLDERS COMPREHENSIVE
SHARES AMOUNT CAPITAL EARNINGS INCOME OTHER EQUITY INCOME(1)
------ ------ ------- -------- ------------- ----- ------------ -------------
BALANCE, JANUARY 28, 1996 1,432 $72 $2,360 $ 2,579 $ (6) $(17) $ 4,988
===== === ====== ======= ==== ==== =======
Shares Sold Under Employee Stock
Purchase and Option Plans,
net of retirements (note 4) 10 -- 104 -- -- -- 104
Tax Effect of Sale of Option
Shares by Employees -- -- 11 -- -- -- 11
Net Earnings -- -- -- 938 -- -- 938 $ 938
Translation Adjustments -- -- -- -- 8 -- 8 8
Repayments of Notes Receivable from
ESOP, net (note 6) -- -- -- -- -- 17 17
Shares Purchased for Compensation
Plans (notes 4 and 6) -- -- -- -- -- (1) (1)
Cash Dividends ($0.077 per share) -- -- -- (110) -- -- (110)
-------
Comprehensive Income for Fiscal 1996 $ 946
=======
----- --- ------ ------- ---- ---- -------
BALANCE, FEBRUARY 2, 1997 1,442 $72 $2,475 $ 3,407 $ 2 $ (1) $ 5,955
===== === ====== ======= ==== ==== =======
Shares Sold Under Employee Stock
Purchase and Option Plans,
net of retirements (note 4) 8 -- 124 -- -- -- 124
Tax Effect of Sale of Option
Shares by Employees -- -- 26 -- -- -- 26
Net Earnings -- -- -- 1,160 -- -- 1,160 1,160
Translation Adjustments -- -- -- -- (30) -- (30) (30)
Immaterial Pooling of Interests 14 1 1 2 -- -- 4
Shares Purchased for Compensation
Plans (notes 4 and 6) -- -- -- -- -- (2) (2)
Cash Dividends ($0.095 per share) -- -- -- (139) -- -- (139)
------
Comprehensive Income for Fiscal 1997 $1,130
======
----- --- ------ ------- ---- ---- -------
BALANCE, FEBRUARY 1, 1998 1,464 $73 $2,626 $ 4,430 $(28) $ (3) $ 7,098
===== === ====== ======= ==== ==== =======
Shares Sold Under Employee Stock
Purchase and Option Plans,
net of retirements (note 4) 11 1 165 -- -- -- 166
Tax Effect of Sale of Option
Shares by Employees -- -- 63 -- -- -- 63
Net Earnings -- -- -- 1,614 -- -- 1,614 1,614
Translation Adjustments -- -- -- -- (33) -- (33) (33)
Cash Dividends ($0.115 per share) -- -- -- (168) -- -- (168)
------
Comprehensive Income for Fiscal 1998 $1,581
======
----- --- ------ ------- ---- ---- -------
BALANCE, JANUARY 31, 1999 1,475 $74 $2,854 $ 5,876 $(61) $ (3) $ 8,740
===== === ====== ======= ==== ==== =======
(1) Components of comprehensive income are reported net of related taxes.
See accompanying notes to consolidated financial statements.
24
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
THE HOME DEPOT, INC. AND SUBSIDIARIES
AMOUNTS IN MILLIONS FISCAL YEAR ENDED
----------------------------------------
JANUARY 31, FEBRUARY 1, FEBRUARY 2,
1999 1998 1997
(52 WEEKS) (52 WEEKS) (53 WEEKS)
---------- ---------- ----------
CASH PROVIDED FROM OPERATIONS:
Net Earnings $ 1,614 $ 1,160 $ 938
Reconciliation of Net Earnings to Net Cash Provided by Operations:
Depreciation and Amortization 373 283 232
Deferred Income Tax Expense (Benefit) 7 (28) 29
Decrease (Increase) in Receivables, net 85 (166) (58)
Increase in Merchandise Inventories (698) (885) (525)
Increase in Accounts Payable and Accrued Expenses 423 577 434
Increase in Income Taxes Payable 59 83 25
Other 54 5 25
------- ------- -------
Net Cash Provided by Operations 1,917 1,029 1,100
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures, net of $41, $44 and $54 of non-cash capital expenditures
in fiscal 1998, 1997 and 1996, respectively (2,059) (1,481) (1,194)
Purchase of Remaining Interest in The Home Depot Canada (261) -- --
Proceeds from Sales of Property and Equipment 45 85 22
Proceeds from Sales of Investments -- -- 41
Purchases of Investments (2) (194) (409)
Proceeds from Maturities of Investments 4 599 27
Repayments of Advances Secured by Real Estate, net 2 20 6
------- ------- -------
Net Cash Used in Investing Activities (2,271) (971) (1,507)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of (Repayments of) Commercial Paper Obligations, net 246 -- (620)
Proceeds from Long-Term Borrowings, net -- 15 1,093
Repayments of Notes Receivable from ESOP -- -- 17
Principal Repayments of Long-Term Debt (8) (40) (3)
Proceeds from Sale of Common Stock, net 167 122 104
Cash Dividends Paid to Stockholders (168) (139) (110)
Minority Interest Contributions to Partnership 11 10 19
------- ------- -------
Net Cash Provided by (Used in) Financing Activities 248 (32) 500
------- ------- -------
Effect of Exchange Rate Changes on Cash and Cash Equivalents (4) -- --
(Decrease) Increase in Cash and Cash Equivalents (110) 26 93
Cash and Cash Equivalents at Beginning of Year 172 146 53
------- ------- -------
Cash and Cash Equivalents at End of Year $ 62 $ 172 $ 146
======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR:
Interest, net of interest capitalized $ 36 $ 42 $ 3
Income Taxes $ 940 $ 685 $ 548
See accompanying notes to consolidated financial statements.
25
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THE HOME DEPOT, INC. AND SUBSIDIARIES
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Home Depot operates full-service, warehouse-style stores averaging
approximately 107,000 square feet in size. The stores stock approximately 40,000
to 50,000 different kinds of building materials, home improvement supplies and
lawn and garden products that are sold primarily to do-it-yourselfers, but also
to home improvement contractors, tradespeople and building maintenance
professionals. In addition, the Company operates EXPO Design Center stores,
which offer products and services primarily related to design and renovation
projects. At the end of fiscal 1998, the Company was operating 761 stores,
including 707 Home Depot stores and 8 EXPO Design Center stores in the United
States; 43 Home Depot stores in Canada; 2 Home Depot stores in Chile; and 1 Home
Depot store in Puerto Rico. Included in the Company's Consolidated Balance
Sheets at January 31, 1999 are $568 million of net assets of the Canadian and
Chilean operations.
Fiscal Year
The Company's fiscal year is a 52- or 53-week period ending on the Sunday
nearest to January 31. Fiscal years 1998 and 1997, which ended January 31, 1999
and February 1, 1998, respectively, consisted of 52 weeks, while fiscal year
1996, which ended February 2, 1997, consisted of 53 weeks.
Basis of Presentation
The consolidated financial statements include the accounts of the Company, its
wholly-owned subsidiaries, and its majority-owned partnership. All significant
intercompany transactions have been eliminated in consolidation.
Stockholders' equity, share and per share amounts for all periods
presented 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.
Cash Equivalents
The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents. The Company's cash and cash
equivalents are primarily cash equivalents carried at fair market value and
consist primarily of commercial paper, money market funds, U.S. government
agency securities and tax-exempt notes and bonds.
Merchandise Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market, as
determined by the retail inventory method.
Income Taxes
The Company provides for federal, state and foreign income taxes currently
payable, as well as for those deferred because of timing differences between
reporting income and expenses for financial statement purposes versus tax
purposes. Federal, state and foreign incentive tax credits are recorded as a
reduction of income taxes. Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The
effect of a change in tax rates is recognized as income or expense in the period
that includes the enactment date.
The Company and its eligible subsidiaries file a consolidated U.S.
federal income tax return. Non-U.S. subsidiaries, which are consolidated for
financial reporting, are not eligible to be included in consolidated U.S.
federal income tax returns, and separate provisions for income taxes have been
determined for these entities. The Company intends to reinvest the unremitted
earnings of its non-U.S. subsidiaries and postpone their remittance
indefinitely. Accordingly, no provision for U.S. income taxes for non-U.S.
subsidiaries was required for any year presented.
Depreciation and Amortization
The Company's buildings, furniture, fixtures and equipment are depreciated using
the straight-line method over the estimated useful lives of the assets.
Improvements to leased premises are amortized using the straight-line method
over the life of the lease or the useful life of the improvement, whichever is
shorter. The Company's property and equipment is depreciated using the following
estimated useful lives:
LIFE
-----------
Buildings 10-45 years
Furniture, fixtures and equipment 5-20 years
Leasehold improvements 5-30 years
Computer software 3-5 years
Cost in Excess of the Fair Value of Net Assets Acquired
Goodwill, which represents the excess of purchase price over fair value of net
assets acquired, is amortized on a straight-line basis over 40 years. The
Company assesses the recoverability of this intangible asset by determining
whether the amortization of the goodwill balance over its remaining useful life
can be recovered through undiscounted future operating cash flows of the
acquired operation. The amount of goodwill impairment, if any, is measured based
on projected discounted future operating cash flows using a discount rate
reflecting the Company's average cost of funds.
Notes Receivable
Notes receivable, which are issued to real estate developers in connection with
development and construction of stores and underlying real estate, are recorded
at cost less an allowance for impaired notes receivable when necessary.
26
6
Store Pre-Opening Costs
Non-capital expenditures associated with opening new stores are expensed as
incurred.
Impairment of Long-Lived Assets
The Company reviews long-lived assets for impairment when circumstances indicate
the carrying amount of an asset may not be recoverable. An impairment is
recognized to the extent the sum of undiscounted estimated future cash flows
expected to result from the use of the asset is less than the carrying value.
Accordingly, when the Company commits to relocate or close a store, the
estimated unrecoverable costs are charged to expense. Such costs include the
estimated loss on the sale of land and buildings, the book value of abandoned
fixtures, equipment and leasehold improvements, and a provision for the present
value of future lease obligations, less estimated sub-lease income.
Stock Compensation
The Company has adopted Statement of Financial Accounting Standards No. 123
("SFAS 123"), "Accounting for Stock-Based Compensation." SFAS 123 encourages the
use of a fair-value-based method of accounting for stock-based awards under
which the fair value of stock options is determined on the date of grant and
expensed over the vesting period. Under SFAS 123, companies may, however,
measure compensation costs for those plans using the method prescribed by
Accounting Principles Board Opinion No. 25 ("APB No. 25"), "Accounting for Stock
Issued to Employees." Companies that apply APB No. 25 are required to include
pro forma disclosures of net earnings and earnings per share as if the
fair-value-based method of accounting had been applied. The Company elected to
account for such plans under the provisions of APB No. 25.
Comprehensive Income
Comprehensive income includes net earnings adjusted for certain revenues,
expenses, gains and losses that are excluded from net earnings under generally
accepted accounting principles. Examples include foreign currency translation
adjustments and unrealized gains and losses on investments.
Foreign Currency Translation
The assets and liabilities denominated in a foreign currency are translated into
U.S. dollars at the current rate of exchange on the last day of the reporting
period, revenues and expenses are translated at the average monthly exchange
rates, and all other equity transactions are translated using the actual rate on
the day of the transaction.
Use of Estimates
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from these estimates.
Reclassifications
Certain balances in prior fiscal years have been reclassified to conform with
the presentation adopted in the current fiscal year.
Note 2 LONG-TERM DEBT
The Company's long-term debt at the end of fiscal 1998 and 1997 consisted of the
following (amounts in millions):
JANUARY 31, FEBRUARY 1,
1999 1998
----------- -----------
3 1/4% Convertible Subordinated Notes, due
October 1, 2001; convertible into shares
of common stock of the Company at a
conversion price of $23.0417 per share;
redeemable by the Company at a premium,
plus accrued interest, beginning
October 2, 1999 $1,103 $1,104
Commercial Paper; weighted average
interest rate of 4.8% at January 31, 1999 246 --
Capital Lease Obligations; payable in
varying installments through
January 31, 2019 (see note 5) 180 151
Installment Notes Payable; interest
imputed at rates between 6.1% and
10.5%; payable in varying installments
through 2018 27 32
Unsecured Bank Loan; floating interest
rate averaging 5.9% in fiscal 1998 and
6.05% in fiscal 1997; payable in
August 2002 15 15
Variable Rate Industrial Revenue Bonds;
secured by letters of credit or land;
interest rates averaging 3.8% during
fiscal 1998 and 4.2% during fiscal 1997;
payable in varying installments
through 2010 9 9
------ ------
Total long-term debt 1,580 1,311
Less current installments 14 8
------ ------
Long-term debt, excluding
current installments $1,566 $1,303
====== ======
In October 1996, the Company issued, through a public offering, $1.1
billion of 3 1/4% Convertible Subordinated Notes ("3 1/4% Notes") due October 1,
2001. The 3 1/4% Notes were issued at par and are convertible into shares of
common stock at any time prior to maturity, unless previously redeemed by the
Company, at a conversion price of $23.0417 per share, subject to adjustment
under certain conditions. The 3 1/4% Notes may be redeemed by the Company at any
time on or after October 2, 1999, in whole or in part, at a redemption price of
100.813% of the principal amount and after October 1, 2000, at 100% of the
principal amount. The 3 1/4% Notes are not subject to sinking fund provisions.
27
7
The Company has an $800 million commercial paper program supported by a
back-up credit facility with an available commitment amount of $800 million. The
back-up credit facility expires in December 2000. Covenants related to the
back-up credit facility place limitations on total Company indebtedness,
subsidiary indebtedness and liens. As of January 31, 1999, the Company was in
compliance with all restrictive covenants.
The restrictive covenants related to letter of credit agreements
securing the industrial revenue bonds are no more restrictive than those
referenced or described above.
Interest expense in the accompanying Consolidated Statements of
Earnings is net of interest capitalized of $31 million in fiscal 1998, $19
million in fiscal 1997 and $23 million in fiscal 1996.
Maturities of long-term debt (excluding the 3 1/4% Notes) are $14
million for fiscal 1999, $250 million for fiscal 2000, $3 million for fiscal
2001, $19 million for fiscal 2002 and $5 million for fiscal 2003.
The estimated fair value of the 3 1/4% Notes, which are publicly
traded, was approximately $2.9 billion based on the market price at January
31, 1999. The estimated fair value of commercial paper borrowings approximate
their carrying value. The estimated fair value of all other long-term borrowings
was approximately $382 million compared to the carrying value of $231 million.
These fair values were estimated using a discounted cash flow analysis based on
the Company's incremental borrowing rate for similar liabilities.
Note 3 INCOME TAXES
The provision for income taxes consisted of the following (in millions):
FISCAL YEAR ENDED
-----------------------------------------
JANUARY 31, FEBRUARY 1, FEBRUARY 2,
1999 1998 1997
----------- ----------- -----------
Current:
U.S. $ 823 $ 653 $ 486
State 150 98 72
Foreign 20 15 10
------- ------- -------
993 766 568
------- ------- -------
Deferred:
U.S. 46 (31) 23
State (1) 1 6
Foreign 2 2 --
------- ------- -------
47 (28) 29
------- ------- -------
Total $ 1,040 $ 738 $ 597
======= ======= =======
The Company's combined federal, state and foreign effective tax rates
for fiscal years 1998, 1997 and 1996, net of offsets generated by federal, state
and foreign tax incentive credits, were approximately 39.2%, 38.9% and 38.9%,
respectively. A reconciliation of income tax expense at the federal statutory
rate of 35% to actual tax expense for the applicable fiscal years follows (in
millions):
FISCAL YEAR ENDED
-------------------------------------
JANUARY 31, FEBRUARY 1, FEBRUARY 2,
1999 1998 1997
----------- ----------- -----------
Income taxes at U.S. statutory rate $ 929 $ 664 $ 537
State income taxes, net of
federal income tax benefit 96 65 51
Foreign rate differences -- 2 2
Other, net 15 7 7
------ ------ ------
Total $1,040 $ 738 $ 597
====== ====== ======
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of January
31, 1999 and February 1, 1998 were as follows (in millions):
FISCAL YEAR ENDED
------------------------
JANUARY 31, FEBRUARY 1,
1999 1998
----------- -----------
Deferred Tax Assets
Accrued self-insurance liabilities $ 110 $ 92
Other accrued liabilities 97 104
----- -----
Total gross deferred tax assets 207 196
----- -----
Deferred Tax Liabilities
Accelerated depreciation (249) (196)
Other (43) (38)
----- -----
Total gross deferred tax liabilities (292) (234)
----- -----
Net deferred tax liability $ (85) $ (38)
===== =====
No valuation allowance was recorded against the deferred tax assets at
January 31, 1999 or February 1, 1998. Company management believes the existing
net deductible temporary differences comprising the total gross deferred tax
assets will reverse during periods in which the Company generates net taxable
income.
28
8
Note 4 EMPLOYEE STOCK PLANS
The 1997 Omnibus Stock Incentive Plan ("1997 Plan"), which is an amendment and
restatement of the 1991 Omnibus Stock Option Plan ("1991 Plan"), provides that
incentive stock options, non-qualified stock options, stock appreciation rights,
restricted stock and deferred shares may be issued to selected associates,
officers and directors of the Company. The maximum number of shares of the
Company's common stock available for issuance under the 1997 Plan is the lesser
of 100 million shares, or the number of shares carried over from prior plans
plus one-half percent of the total number of outstanding shares as of the first
day of each fiscal year. In addition, restricted shares issued under the 1997
Plan may not exceed 10 million shares. As of January 31, 1999, the maximum
shares available for future grants under the 1997 Plan were 85,549,859.
Under the 1997 Plan, incentive and non-qualified options for 15,788,234
shares, net of cancellations (of which 17,577 had been exercised), have been
granted at prices ranging from $19.17 to $47.88 per share. Incentive stock
options vest at the rate of 25% per year commencing on the first anniversary
date of the grant and expire on the tenth anniversary date of the grant. The
non-qualified options have similar terms; however, vesting does not generally
begin until the second anniversary date of the grant.
As of January 31, 1999, 108,594 shares of restricted stock were
outstanding. The restricted shares vest over varying terms and are generally
based on the attainment of certain performance goals. The expected fair value of
the restricted shares on the vesting dates will be charged to expense ratably
over the vesting periods unless it is determined that the performance goals will
not be met.
Under the 1991 Plan, which became effective June 1, 1991, options for
52,798,833 shares, net of cancellations (of which 20,881,960 had been
exercised), had been granted at prices ranging from $8.17 to $17.79 per share as
of January 31, 1999. The 1991 Plan expired on February 28, 1997, and the shares
available for grant were carried over to the 1997 Plan.
The per share weighted average fair value of stock options granted
during fiscal years 1998, 1997 and 1996 was $14.91, $6.30 and $4.62,
respectively. These amounts were determined using the Black-Scholes
option-pricing model, which values options based on the stock price at the grant
date, the expected life of the option, the estimated volatility of the stock,
expected dividend payments, and the risk-free interest rate over the expected
life of the option. The dividend yield was calculated by dividing the current
annualized dividend by the option price for each grant. Expected volatility was
based on stock prices for the fiscal year the grant occurred and the two
previous fiscal years. The risk-free interest rate was the rate available on
zero coupon U.S. government issues with a term equal to the remaining term for
each grant. The expected life of each option was estimated based on the exercise
history from previous grants. The assumptions used in the Black-Scholes model
were as follows:
STOCK OPTIONS
GRANTED IN FISCAL YEAR
-----------------------------
1998 1997 1996
-----------------------------
Risk-free interest rate 5.6% 6.1% 6.1%
Expected volatility of common stock 45.7% 30.0% 23.5%
Dividend yield 0.4% 0.5% 0.6%
Expected option term 5 years 5 years 5 years
The Company applies APB No. 25 in accounting for its stock plans and,
accordingly, no compensation costs have been recognized in the Company's
financial statements for incentive or non-qualified stock options granted. If,
under SFAS 123, the Company determined compensation costs based on the fair
value at the grant date for its stock options, net earnings and earnings per
share would have been reduced to the pro forma amounts below (in millions,
except per share data):
FISCAL YEAR
--------------------------
1998 1997 1996
--------------------------
Net Earnings
As reported $1,614 $1,160 $ 938
Pro forma $1,527 $1,118 $ 916
Basic Earnings per Share
As reported $ 1.10 $ 0.80 $0.65
Pro forma $ 1.04 $ 0.77 $0.64
Diluted Earnings per Share
As reported $ 1.06 $ 0.78 $0.65
Pro forma $ 1.01 $ 0.75 $0.63
The following table summarizes shares outstanding under the various
stock option plans at January 31, 1999, February 1, 1998 and February 2, 1997
and changes during the fiscal years ended on these dates (shares in thousands):
NUMBER AVERAGE
OF SHARES OPTION PRICE
--------- ------------
Outstanding at January 28, 1996 29,970 $ 11.79
Granted 14,438 14.57
Exercised (5,982) 9.74
Cancelled (2,288) 13.12
------ --------
Outstanding at February 2, 1997 36,138 13.16
Granted 17,238 21.87
Exercised (6,862) 13.23
Cancelled (2,696) 15.28
------ --------
Outstanding at February 1, 1998 43,818 15.12
Granted 14,027 32.44
Exercised (7,760) 13.61
Cancelled (2,357) 20.84
------ --------
OUTSTANDING AT JANUARY 31, 1999 47,728 $ 20.17
====== ========
Exercisable 13,105 $ 13.35
====== ========
29
9
The average remaining contractual life of the outstanding options as
of January 31, 1999 was approximately 7.6 years.
In addition, the Company had 7,962,854 shares available for future
grants under the Employee Stock Purchase Plan ("ESPP") at January 31, 1999. The
ESPP enables the Company to grant substantially all full-time associates
options to purchase up to 66,412,500 shares of common stock, of which
58,449,648 shares have been exercised from inception of the plan, at a price
equal to the lower of 85% of the stock's fair market value on the first day or
the last day of the purchase period. Shares purchased may not exceed the lesser
of 20% of the associate's annual compensation, as defined, or $25,000 of common
stock at its fair market value (determined at the time such option is granted)
for any one calendar year. Associates pay for the shares ratably over a period
of one year (the purchase period) through payroll deductions, and cannot
exercise their option to purchase any of the shares until the conclusion of the
purchase period. In the event an associate elects not to exercise such options,
the full amount withheld is refundable. During fiscal 1998, options for
3,669,886 shares were exercised at an average price of $19.27 per share. At
January 31, 1999, there were 2,184,525 options outstanding, net of
cancellations, at an average price of $31.41 per share.
Note 5 LEASES
The Company leases certain retail locations, office space, warehouse and
distribution space, equipment and vehicles. While the majority of the leases are
operating leases, certain retail locations are leased under capital leases. As
leases expire, it can be expected that in the normal course of business, leases
will be renewed or replaced.
In June 1996, the Company entered into a $300 million operating lease
agreement for the purpose of financing construction costs for selected new
stores. The Company increased its available funding under the operating lease
agreement to $600 million in May 1997. In October 1998, through a second
operating lease agreement, the Company further increased the available funding
by $282 million to $882 million. Under the agreements, the lessor purchases the
properties, pays for the construction costs and subsequently leases the
facilities to the Company. The initial lease term for the $600 million
agreement is five years with five 2-year renewal options. The lease term for
the $282 million agreement is 10 years with no renewal options. Both lease
agreements provide for substantial residual value guarantees and include
purchase options at original cost on each property. The Company financed a
portion of its new stores in fiscal 1997 and 1998 under the operating lease
agreements and anticipates utilizing these facilities to finance selected new
stores in fiscal 1999 and 2000 and an office building in fiscal 1999.
During 1995, the Company entered into two operating lease agreements
under which the Company leases an import distribution facility, including its
related equipment, and an office building for store support functions. The
initial lease terms are five and seven years, respectively, with five 5-year
renewal options for the import distribution facility and one 5-year renewal
option for the office building. Both lease agreements provide for substantial
residual value guarantees and include purchase options at the higher of the
cost or fair market value of the assets for the import distribution facility
and at cost for the office building.
The maximum amount of the residual value guarantees relative to the
assets under the lease agreements described above is projected to be $855
million. As the leased assets are placed into service, the Company estimates
its liability under the residual value guarantees and records additional rent
expense on a straight-line basis over the remaining lease terms.
Total rent expense, net of minor sublease income for the fiscal years
ended January 31, 1999, February 1, 1998 and February 2, 1997 was $321 million,
$262 million and $219 million, respectively. Real estate taxes, insurance,
maintenance, and operating expenses applicable to the leased property are
obligations of the Company under the building leases. Certain of the store
leases provide for contingent rentals based on percentages of sales in excess
of specified minimums. Contingent rentals for the fiscal years ended January
31,1999, February 1, 1998 and February 2, 1997 were approximately $11 million,
$10 million and $10 million, respectively.
The approximate future minimum lease payments under capital and
operating leases at January 31, 1999 were as follows (in millions):
CAPITAL OPERATING
FISCAL YEAR LEASES LEASES
------- ---------
1999 $ 29 $ 358
2000 29 352
2001 29 325
2002 29 299
2003 30 282
Thereafter 396 3,109
---- ------
542 $4,725
======
Less: Imputed interest (362)
----
Net present value of capital lease obligations 180
Less: Current installments (2)
----
Long-term capital lease obligations,
excluding current installments $178
====
Short-term and long-term obligations for capital leases are included
in the Company's Consolidated Balance Sheets in Current Installments of
Long-Term Debt and Long-Term Debt, respectively. The assets under capital
leases recorded in Net Property and Equipment, net of amortization, totaled
$180 million and $147 million at January 31, 1999 and February 1, 1998,
respectively.
30
10
Note 6 EMPLOYEE BENEFIT PLANS
During fiscal 1996, the Company established a defined contribution plan
("401(k)") pursuant to Section 401(k) of the Internal Revenue Code. The 401(k)
covers substantially all associates that meet certain service requirements. The
Company makes matching cash contributions, on a weekly basis, up to specified
percentages of associates' contributions as approved by the Board of Directors.
During fiscal 1988, the Company established a leveraged Employee Stock
Ownership Plan and Trust ("ESOP") covering substantially all full-time
associates. At January 31, 1999, the ESOP held a total of 21,024,649 shares of
the Company's common stock in trust for plan participants' accounts. The ESOP
purchased the shares in the open market with contributions received from the
Company in fiscal 1998 and 1997, and from the proceeds of loans obtained from
the Company during fiscal 1992, 1990 and 1989 totaling approximately $81
million. All loans payable to the Company in connection with the purchase of
such shares have been paid in full.
During February 1999, the Company made its final contribution to the
ESOP plan and amended its 401(k) plan. In the amendment, the Company elected to
increase its percentage contribution to the 401(k) in lieu of future ESOP
contributions.
The Company adopted a non-qualified ESOP Restoration Plan in fiscal
1994. The Company also made its final contribution to the ESOP Restoration Plan
during February 1999 and established a new 401(k) Restoration Plan. The primary
purpose of the new plan is to provide certain associates deferred compensation
that they would have received under the 401(k) matching contribution if not for
the maximum compensation limits under the Internal Revenue Code of 1986, as
amended. The Company has established a "rabbi trust" to fund the benefits under
the ESOP Restoration Plan. Compensation expense related to this plan for fiscal
years 1998, 1997 and 1996 was not material. Funds provided to the trust are
primarily used to purchase shares of the Company's common stock in the open
market.
The Company's combined contributions to the 401(k) and ESOP were $41
million, $33 million and $25 million for fiscal years 1998, 1997 and 1996,
respectively.
Note 7 BASIC AND DILUTED EARNINGS PER SHARE
The calculations of basic and diluted earnings per share for fiscal years 1998,
1997 and 1996 were as follows (amounts in millions, except per share data):
FISCAL YEAR ENDED
-----------------------------------
JANUARY 31, FEBRUARY 1, FEBRUARY 2,
1999 1998 1997
(52 WEEKS) (52 WEEKS) (53 WEEKS)
----------- ----------- -----------
CALCULATION OF BASIC
EARNINGS PER SHARE
Net earnings $1,614 $1,160 $ 938
Weighted average number of
common shares outstanding 1,471 1,459 1,438
------ ------ ------
BASIC EARNINGS PER SHARE $ 1.10 $ 0.80 $ 0.65
====== ====== ======
CALCULATION OF DILUTED
EARNINGS PER SHARE
Net earnings $1,614 $1,160 $ 938
Tax-effected interest expense
attributable to 3 1/4% Notes 23 23 8
------ ------ ------
Net earnings assuming dilution $1,637 $1,183 $ 946
------ ------ ------
Weighted average number of
common shares outstanding 1,471 1,459 1,438
Effect of potentially
dilutive securities:
3 1/4% Notes 48 48 16
Employee stock plans 28 17 10
------ ------ ------
Weighted average number of
common shares outstanding
assuming dilution 1,547 1,524 1,464
------ ------ ------
DILUTED EARNINGS
PER SHARE $ 1.06 $ 0.78 $ 0.65
====== ====== ======
Employee stock plans represent shares granted under the Company's
employee stock purchase plan and stock option plans, as well as shares issued
for deferred compensation stock plans. For fiscal years 1998, 1997 and 1996,
shares issuable upon conversion of the Company's 3 1/4% Notes, issued in
October 1996, were included in weighted average shares assuming dilution for
purposes of calculating diluted earnings per share. To calculate diluted
earnings per share, net earnings are adjusted for tax-effected net interest and
issue costs on the 3 1/4% Notes and divided by weighted average shares assuming
dilution.
31
11
Note 8 LAWSUIT SETTLEMENTS
During fiscal 1997, the Company, without admitting any wrongdoing, entered into
a settlement agreement with plaintiffs in the class action lawsuit Butler et.
al. v. Home Depot, Inc., in which the plaintiffs had asserted claims of gender
discrimination. The Company subsequently reached agreements to settle three
other lawsuits seeking class action status, each of which involved claims of
gender discrimination.
As a result of these agreements, the Company recorded a pre-tax
non-recurring charge of $104 million in fiscal 1997 and, in fiscal 1998, made
payments to settle these agreements. The payments made in fiscal 1998 included
$65 million to the plaintiff class members and $22.5 million to the plaintiffs'
attorneys in Butler, and approximately $8 million for other related internal
costs, including implementation or enhancement of certain human resources
programs, as well as the settlement terms of the three other lawsuits. The
Company expects to spend the remaining $9 million for related internal costs
over the next two years. Excluding the non-recurring charge, diluted earnings
per share for fiscal 1997 were $0.82 compared to $0.78 as reported.
Note 9 COMMITMENTS AND CONTINGENCIES
At January 31, 1999, the Company was contingently liable for approximately $431
million under outstanding letters of credit issued primarily in connection with
purchase commitments.
The Company is involved in litigation arising from the normal course
of business. In management's opinion, this litigation is not expected to
materially impact the Company's consolidated results of operations or financial
condition.
Note 10 MERGERS AND ACQUISITIONS
During the first quarter of fiscal 1998, the Company purchased, for $261
million, the remaining 25% partnership interest held by The Molson Companies in
The Home Depot Canada. The excess purchase price over the estimated fair value
of net assets of $117 million as of the acquisition date was recorded as
goodwill and is being amortized over 40 years. As a result of this
transaction, the Company now owns all of The Home Depot's Canadian operations.
The Home Depot Canada partnership was formed in 1994 when the Company acquired
75% of Aikenhead's Home Improvement Warehouse for approximately $162 million.
The terms of the original partnership agreement provided for a put/call option,
which would have resulted in the Company purchasing the remaining 25% of The
Home Depot Canada at any time after the sixth anniversary of the original
agreement. The companies reached a mutual agreement to complete the purchase
transaction at an earlier date.
Note 11 QUARTERLY FINANCIAL DATA
The following is a summary of the unaudited quarterly results of operations for
the fiscal years ended January 31, 1999 and February 1, 1998 (dollars in
millions, except per share data):
PERCENT INCREASE BASIC DILUTED
IN COMPARABLE GROSS NET EARNINGS EARNINGS
NET SALES STORE SALES PROFIT EARNINGS PER SHARE PER SHARE
--------- ---------------- ------ -------- --------- ---------
Fiscal year ended January 31, 1999:
First quarter $ 7,123 7% $1,968 $ 337 $0.23 $0.22
Second quarter 8,139 7% 2,263 467 0.32 0.31
Third quarter 7,699 7% 2,177 392 0.27 0.26
Fourth quarter 7,258 9% 2,197 418 0.28 0.27
------- -- ------ ------ ----- -----
Fiscal year $30,219 7% $8,605 $1,614 $1.10 $1.06
======= == ====== ====== ===== =====
Fiscal year ended February 1, 1998:
First quarter $ 5,657 11% $1,552 $ 259 $0.18 $0.18
Second quarter 6,550 5% 1,800 358 0.25 0.24
Third quarter 6,217 7% 1,726 236 0.16 0.16
Fourth quarter 5,732 6% 1,703 307 0.21 0.20
------- -- ------ ------ ----- -----
Fiscal year $24,156 7% $6,781 $1,160 $0.80 $0.78
======= == ====== ====== ===== =====
32
12
THE HOME DEPOT, INC. AND SUBSIDIARIES
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The financial statements presented in this Annual Report have been prepared with
integrity and objectivity and are the responsibility of the management of The
Home Depot, Inc. These financial statements have been prepared in conformity
with generally accepted accounting principles and properly reflect certain
estimates and judgments based upon the best available information.
The Company maintains a system of internal accounting controls, which
is supported by an internal audit program and is designed to provide reasonable
assurance, at an appropriate cost, that the Company's assets are safeguarded
and transactions are properly recorded. This system is continually reviewed and
modified in response to changing business conditions and operations and as a
result of recommendations by the external and internal auditors. In addition,
the Company has distributed to associates its policies for conducting business
affairs in a lawful and ethical manner.
The financial statements of the Company have been audited by KPMG LLP,
independent auditors. Their accompanying report is based upon an audit
conducted in accordance with generally accepted auditing standards, including
the related review of internal accounting controls and financial reporting
matters.
The Audit Committee of the Board of Directors, consisting solely of
outside Directors, meets quarterly with the independent auditors, the internal
auditors and representatives of management to discuss auditing and financial
reporting matters. The Audit Committee, acting on behalf of the stockholders,
maintains an ongoing appraisal of the internal accounting controls, the
activities of the outside auditors and internal auditors and the financial
condition of the Company. Both the Company's independent auditors and the
internal auditors have free access to the Audit Committee.
/s/ Dennis Carey /s/ Marshall L. Day
Dennis Carey Marshall L. Day
Executive Vice President and Senior Vice President-
Chief Financial Officer Finance and Accounting
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND STOCKHOLDERS
The Home Depot, Inc.:
We have audited the accompanying consolidated balance sheets of The Home Depot,
Inc. and subsidiaries as of January 31, 1999 and February 1, 1998, and the
related consolidated statements of earnings, stockholders' equity and
comprehensive income, and cash flows for each of the years in the three-year
period ended January 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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 management, 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of The
Home Depot, Inc. and subsidiaries as of January 31, 1999 and February 1, 1998,
and the results of their operations and their cash flows for each of the years
in the three-year period ended January 31, 1999 in conformity with generally
accepted accounting principles.
/s/ KPMG LLP
Atlanta, Georgia
March 12, 1999
33
13
10-YEAR SUMMARY OF FINANCIAL AND OPERATING RESULTS
THE HOME DEPOT, INC. AND SUBSIDIARIES
AMOUNTS IN MILLIONS, EXCEPT WHERE NOTED
5-YEAR 10-YEAR
COMPOUND ANNUAL COMPOUND ANNUAL
GROWTH RATE GROWTH RATE 1998
--------------- --------------- --------
STATEMENT OF EARNINGS DATA
Net sales 26.7% 31.2% $ 30,219
Net sales increase (%) -- -- 25.1
Earnings before income taxes(2) 29.2 35.6 2,654
Net earnings(2) 28.7 35.6 1,614
Net earnings increase (%)(2) -- -- 31.9
Diluted earnings per share ($)(2,3,4) 25.9 30.5 1.06
Diluted earnings per share increase (%)(2) -- -- 29.3
Weighted average number of common shares
outstanding assuming dilution(3) 1.7 4.1 1,547
Gross margin--% of sales -- -- 28.5
Store selling and operating expense--% of sales -- -- 17.7
Pre-opening expense--% of sales -- -- 0.3
General and administrative expense--% of sales -- -- 1.7
Net interest income (expense)--% of sales -- -- --
Earnings before income taxes--% of sales(2) -- -- 8.8
Net earnings--% of sales(2) -- -- 5.3
---- ---- --------
BALANCE SHEET DATA AND FINANCIAL RATIOS
Total assets 23.4% 34.4% $ 13,465
Working capital 15.9 30.7 2,076
Merchandise inventories 27.1 30.7 4,293
Net property and equipment 28.0 37.7 8,160
Long-term debt 12.4 30.7 1,566
Stockholders' equity 25.4 36.7 8,740
Book value per share ($)(3) 23.2 31.7 5.92
Long-term debt to equity (%) -- -- 17.9
Current ratio -- -- 1.73:1
Inventory turnover -- -- 5.4x
Return on invested capital (%)(2) -- -- 19.3
---- ---- --------
STATEMENT OF CASH FLOWS DATA
Depreciation and amortization 32.9% 38.2% $ 373
Capital expenditures 18.4 34.9 2,100
Cash dividends per share ($)(3) 25.2 35.7 0.12
---- ---- --------
STORE DATA(5)
Number of stores 23.6% 23.0% 761
Square footage at year-end 25.3 25.8 81
Increase in square footage (%) -- -- 22.8
Average square footage per store (in thousands) 1.4 2.3 107
---- ---- --------
STORE SALES AND OTHER DATA(5)
Comparable store sales increase (%)(6) -- -- 7
Weighted average weekly sales per operating store (in thousands) 2.0% 6.2% $ 844
Weighted average sales per square foot ($)(6) 0.6 3.8 410
Number of customer transactions 23.0 26.3 665
Average sale per transaction ($) 2.9 3.8 45.05
Number of associates at year-end (actual) 25.4 28.3 156,700
---- ---- --------
(1) Fiscal years 1996 and 1990 consisted of 53 weeks; all other years reported
consisted of 52 weeks.
(2) Excludes the effect of a $104 million non-recurring charge in fiscal 1997.
(3) All share and per share data have been adjusted for a two-for-one stock
split on July 2, 1998.
34
14
THE HOME DEPOT, INC. AND SUBSIDIARIES
1997 1996(1) 1995 1994 1993 1992 1991 1990(1) 1989
- -------- ------- ------- -------- ------- ------- ------- -------- --------
$ 24,156 $19,535 $15,470 $ 12,477 $ 9,239 $ 7,148 $ 5,137 $ 3,815 $ 2,759
23.7 26.3 24.0 35.0 29.2 39.2 34.6 38.3 38.0
2,002 1,535 1,195 980 737 576 396 260 182
1,224 938 732 605 457 363 249 163 112
30.5 28.2 21.0 32.2 26.1 45.6 52.5 46.0 45.9
0.82 0.65 0.51 0.44 0.34 0.28 0.20 0.15 0.10
26.2 27.5 15.9 29.4 21.4 40.0 33.3 50.0 42.9
1,524 1,464 1,434 1,428 1,421 1,397 1,323 1,216 1,147
28.1 27.8 27.7 27.9 27.7 27.6 28.1 27.9 27.8
17.8 18.0 18.0 17.8 17.6 17.4 18.1 18.2 18.3
0.3 0.3 0.4 0.4 0.4 0.4 0.3 0.4 0.3
1.7 1.7 1.7 1.8 2.0 2.1 2.3 2.4 2.5
-- 0.1 0.1 (0.1) 0.3 0.4 0.3 (0.1) (0.1)
8.3 7.9 7.7 7.8 8.0 8.1 7.7 6.8 6.6
5.1 4.8 4.7 4.8 5.0 5.1 4.8 4.3 4.1
- -------- ------- ------- -------- ------- ------- ------- -------- --------
$ 11,229 $ 9,342 $ 7,354 $ 5,778 $ 4,701 $ 3,932 $ 2,510 $ 1,640 $ 1,118
2,004 1,867 1,255 919 994 807 624 301 274
3,602 2,708 2,180 1,749 1,293 940 662 509 381
6,509 5,437 4,461 3,397 2,371 1,608 1,255 879 514
1,303 1,247 720 983 874 844 271 531 303
7,098 5,955 4,988 3,442 2,814 2,304 1,691 683 512
4.85 4.13 3.48 2.53 2.09 1.73 1.34 0.64 0.49
18.4 20.9 14.4 28.6 31.1 36.6 16.0 77.7 59.1
1.82:1 2.01:1 1.89:1 1.76:1 2.02:1 2.07:1 2.17:1 1.73:1 1.94:1
5.4x 5.6x 5.5x 5.7x 5.9x 6.3x 6.1x 6.0x 5.9x
17.0 16.3 16.3 16.5 13.9 17.6 19.8 20.6 23.2
- -------- ------- ------- -------- ------- ------- ------- -------- --------
$ 283 $ 232 $ 181 $ 130 $ 90 $ 70 $ 52 $ 34 $ 21
1,525 1,248 1,308 1,220 900 437 432 400 205
0.10 0.08 0.06 0.05 0.04 0.03 0.02 0.01 0.01
- -------- ------- ------- -------- ------- ------- ------- -------- --------
624 512 423 340 264 214 174 145 118
66 54 44 35 26 21 16 13 10
23.1 21.6 26.3 33.2 26.3 26.8 24.1 27.4 26.9
106 105 105 103 100 98 95 92 88
- -------- ------- ------- -------- ------- ------- ------- -------- --------
7 7 3 8 7 15 11 10 13
$ 829 $ 803 $ 787 $ 802 $ 764 $ 724 $ 633 $ 566 $ 515
406 398 390 404 398 387 348 322 303
550 464 370 302 236 189 146 112 84
43.63 42.09 41.78 41.29 39.13 37.72 35.13 33.92 32.65
124,400 98,100 80,800 67,300 50,600 38,900 28,000 21,500 17,500
- -------- ------- ------- -------- ------- ------- ------- -------- --------
(4) Diluted earnings per share for fiscal 1997, including a $104 million
non-recurring charge, were $0.78 (see note 8 of the Notes to Consolidated
Financial Statements).
(5) Excludes Maintenance Warehouse and National Blinds and Wallpaper, Inc.
(6) Adjusted to reflect the first 52 weeks of the 53-week fiscal years in 1996
and 1990.
35