Home Depot 2006 Annual Report Download - page 67

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fiscal 2006, 2005 and 2004, respectively, and Goodwill related to the Retail segment of $229 million,
$111 million and $163 million for fiscal 2006, 2005 and 2004, respectively, in the accompanying
Consolidated Balance Sheets. Of the Goodwill recorded in fiscal 2006, approximately $500 million will
be deductible for income taxes.
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed
at the dates of acquisition for all acquisitions made during fiscal 2006, and is subject to the final fair
value determination of certain assets and liabilities (amounts in millions):
Cash $ 224
Receivables 948
Inventories 874
Property and Equipment 231
Intangible Assets(1) 547
Goodwill 3,007
Other Assets 187
Total assets acquired 6,018
Current Liabilities 1,321
Other Liabilities 193
Total liabilities assumed 1,514
Net assets acquired $4,504
(1) Primarily customer relationships and tradenames which are included in Other Assets in the
accompanying Consolidated Balance Sheets and are being amortized over a weighted average useful life
of 10 years.
12. SEGMENT INFORMATION
The Company operates in two reportable business segments: Retail and HD Supply. The Retail
segment is principally engaged in the operation of retail stores located in the United States, Canada,
Mexico and the Company’s recently acquired stores in China. The HD Supply segment distributes
products and sells installation services to business-to-business customers, including home builders,
professional contractors, municipalities and maintenance professionals. The Company identifies
segments based on how management makes operating decisions, assesses performance and allocates
resources. The first quarter of fiscal 2006 was the first period in which the Company began to report its
results of operations in two segments. This change was a result of the purchase of Hughes Supply,
which significantly increased the size of HD Supply and resulted in changes in the Company’s internal
reporting and management structure.
The Retail segment includes The Home Depot stores, EXPO Design Center stores and other retail
formats. The Retail segment also includes our retail services business and our catalog and on-line sales
businesses.
The HD Supply segment consists of four major platforms: 1) infrastructure, including waterworks and
utilities; 2) construction, including construction supply, lumber and building materials, electrical,
plumbing/HVAC and interiors; 3) maintenance, including facilities maintenance and industrial PVF; and
4) repair and remodel.
The Company measures the profit of its segments as Operating Income, which is defined as earnings
before net interest expense and provision for income taxes. The amounts under the caption
Eliminations/Other in the following tables are unallocated corporate overhead, invested cash and
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