Home Depot 2005 Annual Report Download - page 13

CAUTIONARY STATEMENT PURSUANT TO THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements contained herein, including any statements related to Net Sales growth, increases in
comparable store sales, impact of cannibalization, commodity price inflation and deflation,
implementation of store initiatives, protection of intellectual property rights, Net Earnings performance,
earnings per share, stock-based compensation expense, store openings and closures, payments on
commercial paper borrowings, the effect of adopting certain accounting standards, future financial
reporting, financing, margins, return on invested capital, operations after the closing of the merger with
Hughes Supply, Inc. (‘‘Hughes Supply’’), the timing and certainty of closing of the merger with Hughes
Supply, the accounting and financial impact of the merger with Hughes Supply, strategic direction and
the demand for our products and services, constitute ‘‘forward-looking statements’’ as defined in the
Private Securities Litigation Reform Act of 1995. These statements are based on currently available
information and are based on our current expectations and projections about future events. These
statements are subject to risks and uncertainties that could cause actual results to differ materially from
our historical experience and expectations. Some of the material risks and uncertainties that could
cause actual results to differ materially from historical experience and expectations are described in
Item 1A. ‘‘Risk Factors.’’ Undue reliance should not be placed on the forward-looking statements
contained herein as they speak only as of the date hereof and we undertake no obligation to update
these forward-looking statements to reflect subsequent events or circumstances. Additional information
regarding these and other risks and uncertainties is contained in our periodic filings with the Securities
and Exchange Commission.
PART I
Item 1. Business.
Introduction
The Home Depot, Inc. is the world’s largest home improvement retailer and the second largest retailer
in the United States (‘‘U.S.’’), based on Net Sales for the fiscal year ended January 29, 2006 (‘‘fiscal
2005’’). As of the end of fiscal 2005, we were operating 2,042 stores, most of which are The Home
Depot↦ stores. The following is a description of our The Home Depot stores, Home Depot Supply and
our other store formats.
The Home Depot stores sell a wide assortment of building materials, home improvement and lawn and
garden products and provide a number of services. The Home Depot stores average approximately
105,000 square feet of enclosed space, with approximately 23,000 additional square feet of outside
garden area. As of the end of fiscal 2005, we had 1,984 The Home Depot stores located throughout the
U.S. (including the territories of Puerto Rico and the Virgin Islands), Canada and Mexico.
In addition to The Home Depot stores, we have a retail store format that sells products and services
primarily for home decorating and remodeling projects called EXPO Design Center and two retail
store formats focused on professional customers called Home Depot Supply and The Home Depot
Landscape Supply. As of the end of fiscal 2005, we were operating 34 EXPO Design Center stores,
three Home Depot Supply stores and 11 The Home Depot Landscape Supply stores. We also have two
The Home Depot Floor Stores located in Texas and Florida that primarily sell flooring products.
In addition to our retail stores, our business also includes Home Depot Supply. Home Depot Supply
distributes products and sells installation services primarily to professional business contractors,
businesses and municipalities and generally operates in the following three areas:
•Maintenance, Repair and Operations (‘‘MRO’’) supplies maintenance, repair and operating
products primarily to multi-family housing, hospitality and lodging facilities. Included under
MRO are National Waterworks, Inc. and Apex Supply Company, Inc. National Waterworks
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