Home Depot 2003 Annual Report Download - page 37

The Home Depot, Inc. | 35
Notes to Consolidated Financial Statements
The Home Depot, Inc. and Subsidiaries
Stock plans include shares granted under the Company’s ESPPs
and stock incentive plans, as well as shares issued for deferred
compensation stock plans. Options to purchase 67.9 million,
52.9 million and 10.9 million shares of common stock at February 1,
2004, February 2, 2003 and February 3, 2002, respectively, were
excluded from the computation of Diluted Earnings per Share
because their effect would have been anti-dilutive.
8. COMMITMENTS AND CONTINGENCIES
At February 1, 2004, the Company was contingently liable for
approximately $1.3 billion under outstanding letters of credit
issued for certain business transactions, including insurance
programs, purchases of import merchandise inventories and con-
struction contracts. The Company’s letters of credit are primarily
performance-based and are not based on changes in variable
components, a liability or an equity security of the other party.
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.
9. ACQUISITIONS AND DISPOSITIONS
The following acquisitions completed by the Company were all
accounted for under the purchase method of accounting. Pro
forma results of operations for fiscal 2003, 2002 and 2001 would
not be materially different as a result of these acquisitions and
therefore are not presented.
In January 2004, the Company acquired substantially all of the
assets of Creative Touch Interiors, Inc., a flooring supply company
servicing the new homebuilder industry.
In December 2003, the Company acquired all of the common
stock of Economy Maintenance Supply Company (“EMS”) and all
of the common stock of RMA Home Services, Inc. (“RMA”). EMS is
a wholesale supplier of maintenance, repair and operations
products. RMA is a replacement windows and siding installed
services business. In October 2003, the Company acquired
substantially all of the assets of Installed Products U.S.A., a
roofing and fencing installed services business.
In October 2002, the Company acquired substantially all of the
assets of FloorWorks, Inc. and Arvada Hardwood Floor Company
and all of the common stock of Floors, Inc., three flooring
installation companies primarily servicing the new homebuilder
industry. In June 2002, the Company acquired the assets of
Maderería Del Norte, S.A. de C.V., a four-store chain of home
improvement stores in Juarez, Mexico.
In fiscal 2001, the Company acquired the assets of Your
“other” Warehouse and Soluciones Para Las Casas de Mexico,
S. de R.L. de C.V.
The total aggregate purchase price for acquisitions in fiscal 2003,
2002 and 2001 was $248 million, $202 million and $193 million,
respectively. Accordingly, the Company recorded Cost in Excess of
the Fair Value of Net Assets Acquired related to these acquisitions
of $231 million, $109 million and $110 million for fiscal 2003,
2002 and 2001, respectively, on the accompanying Consolidated
Balance Sheets.
In February 2002, the Company sold all of the assets of The Home
Depot Argentina S.R.L. In connection with the sale, the Company
received proceeds comprised of cash and notes. An impairment
charge of $45 million was recorded in Selling and Store Operating
Expenses in the accompanying Consolidated Statements of
Earnings in fiscal 2001 to write down the net assets of The Home
Depot Argentina S.R.L. to fair value. In October 2001, the
Company sold all of the assets of The Home Depot Chile S.A.,
resulting in a gain of $31 million included in Selling and
Store Operating Expenses in the accompanying Consolidated
Statements of Earnings.