Home Depot 2005 Annual Report Download - page 27

White Cap Construction has 103 branch locations in Arizona, Arkansas, California, Colorado, Florida,
Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, Nebraska, Nevada, New
Mexico, Ohio, Oregon, Texas, Utah, Virginia, Washington and Wyoming.
Williams Bros. Lumber Company has 16 branch locations in Georgia.
Your Other Warehouse has five distribution centers located in Louisiana, Maryland and Nevada.
Of our 2,042 stores, at fiscal 2005 year end approximately 87% were owned (including those owned
subject to a ground lease) consisting of approximately 186.6 million square feet, and approximately 13%
of such stores were leased consisting of approximately 28.2 million square feet. In recent years, we have
increased the relative percentage of new stores that are owned. We generally prefer to own stores
because of greater operating control and flexibility, generally lower occupancy costs and certain other
economic advantages.
Our executive, corporate staff, divisional staff and financial offices occupy approximately 1.9 million
square feet of leased and owned space in Atlanta, Georgia. At the end of fiscal 2005, we occupied an
aggregate of approximately 4.2 million square feet, of which approximately 2.3 million square feet is
owned and approximately 1.9 million square feet is leased, for divisional store support centers,
subsidiary store support centers and subsidiary customer support centers. At the end of fiscal 2005, our
primary support centers were located in Orange, California; Washington, D.C.; Tampa, Florida; Atlanta,
Georgia; Arlington Heights, Illinois; Canton, Massachusetts; South Plainfield, New Jersey; Austin,
Texas; Dallas, Texas; Tukwila, Washington; Toronto, Ontario and Quebec, Canada; Monterrey and
Juarez, Mexico; and Shenzhen and Shanghai, China.
At the end of fiscal 2005, we utilized approximately 31.2 million square feet of warehousing and
distribution space, of which approximately 3.2 million is owned and approximately 28.0 million is
leased.
We believe that at the end of existing lease terms, our current leased space can be either relet or
replaced by alternate space for lease or purchase that is readily available.
Item 3. Legal Proceedings.
In August 2005, the Company received an informal request from the staff of the Securities and
Exchange Commission for information related to the Company’s return-to-vendor policies and
procedures. The Company has responded to this and subsequent requests and continues to fully
cooperate with the SEC staff. The SEC has informed the Company that the informal inquiry is not an
indication that any violations of law have occurred. Although the Company cannot predict the outcome
of this matter, it does not expect that this informal inquiry will have a material adverse effect on the
Company’s consolidated financial position or its results of operations.
In compliance with SEC disclosure requirements, the environmental proceedings set forth below involve
potential monetary sanctions of $100,000 or more. Although the Company cannot predict the outcome
of these proceedings, it does not expect any such outcome to have a material adverse effect on the
Company’s consolidated financial position or its results of operations.
In January 2003, Home Depot U.S.A. Inc., a wholly-owned subsidiary of the Company, received a
request for information from the U.S. Environmental Protection Agency (‘‘EPA’’) regarding alleged
pollutant discharges during construction activities at certain The Home Depot stores. The EPA
subsequently referred this matter to the U.S. Department of Justice (‘‘DOJ’’). The DOJ and the
Company are currently discussing settlement of this matter.
In April 2005, the Company received subpoenas from the State of New York’s Office of Attorney
General seeking documents and testimony related to the sale and handling of pesticides. The Company
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