Home Depot 2004 Annual Report Download - page 40

Notes to Consolidated Financial Statements (continued)
The Home Depot, Inc. and Subsidiaries
38
8|COMMITMENTS AND CONTINGENCIES
At January 30, 2005, the Company was contingently liable for
approximately $1.2 billion under outstanding letters of credit issued
for certain business transactions, including insurance programs,
trade and construction contracts. The Company’s letters of credit are
primarily performance-based and are not based on changes in vari-
able 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
The following acquisitions completed by the Company were all
accounted for under the purchase method of accounting. Pro forma
results of operations for fiscal 2004, 2003 and 2002 would not be
materially different as a result of these acquisitions and therefore
are not presented.
In June 2004, the Company acquired all of the common stock of
Home Mart Mexico, S.A. de C.V. (“Home Mart”), the second
largest home improvement retailer in Mexico. The purchase of 20
Home Mart stores increased the total numbers of stores in Mexico
to 44 as of the end of fiscal 2004. This acquisition was part of the
Company’s strategy to expand into new markets.
In May 2004, the Company acquired all of the common stock
of White Cap Industries, Inc. (“White Cap”), a leading distributor of
specialty hardware, tools and materials to construction contractors.
Since the Company’s acquisition of White Cap, White Cap has
completed three small additional acquisitions. These acquisitions
were part of the Company’s strategy to expand the Company’s
professional customer base with value-added products and services.
In January 2004, the Company acquired substantially all of the
assets of Creative Touch Interiors, a flooring installation company
primarily servicing the production 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 operating prod-
ucts. 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 installa-
tion companies primarily servicing the production 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.
The total aggregate purchase price for acquisitions in fiscal 2004,
2003 and 2002 was $729 million, $248 million and $202 million,
respectively. Accordingly, the Company recorded Cost in Excess of
the Fair Value of Net Assets Acquired related to the acquisitions
of $554 million, $231 million and $109 million for fiscal 2004,
2003 and 2002, respectively, in the accompanying Consolidated
Balance Sheets.