Home Depot 2006 Annual Report Download - page 66

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9. BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES
The reconciliation of basic to diluted weighted average common shares for fiscal 2006, 2005 and 2004
was as follows (amounts in millions):
Fiscal Year Ended
January 28, January 29, January 30,
2007 2006 2005
Weighted average common shares 2,054 2,138 2,207
Effect of potentially dilutive securities:
Stock Plans 899
Diluted weighted average common shares 2,062 2,147 2,216
Stock plans include shares granted under the Company’s employee stock plans as described in Note 6
to the Consolidated Financial Statements. Options to purchase 45.4 million, 55.1 million and
49.1 million shares of common stock at January 28, 2007, January 29, 2006 and January 30, 2005,
respectively, were excluded from the computation of Diluted Earnings per Share because their effect
would have been anti-dilutive.
10. COMMITMENTS AND CONTINGENCIES
At January 28, 2007, 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 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 and in certain
securities and derivative litigation matters. In management’s opinion, this litigation is not expected to
have a material adverse effect on the Company’s consolidated financial condition or results of
operations.
11. ACQUISITIONS
The following acquisitions completed by the Company were all accounted for under the purchase
method of accounting and, accordingly, their results of operations have been consolidated in the
Company’s financial statements since the date of acquisition. Pro forma results of operations for fiscal
2006, 2005 and 2004 would not be materially different as a result of these acquisitions and therefore
are not presented.
During fiscal 2006, the Company made the following acquisitions under its HD Supply segment:
– Burrus Contractors Supply – Heartland Waterworks Supply
– Cox Lumber Company – Hughes Supply
– CTF Supply – Rice Planter Carpets
– Edson Electric Supply – Sioux Pipe
– Forest Products Supply – Texas Contractors Supply
– Grafton Utility Supply – Western Fasteners
Additionally, during fiscal 2006, the Company acquired Home Decorators Collection, The Home Way
and Jubilee Home Solutions under its Retail segment.
The aggregate purchase price for acquisitions in fiscal 2006, 2005 and 2004 was $4.5 billion, $2.6 billion
and $729 million, respectively, including $3.5 billion for Hughes Supply in fiscal 2006. The Company
recorded Goodwill related to the HD Supply segment of $2.8 billion, $1.8 billion and $391 million for
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