Home Depot 2014 Annual Report Download - page 3

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assortments. While we are in the early days of a multi-year plan to bring a more scientic, data-driven approach to
determining the optimal assortment of products in our stores, results to date have been promising.
What drives our economic engine: disciplined capital allocation
Our utilization of capital focuses on a few key factors: investing to maintain the asset base of our business; investing
to drive efciency; and investing to enable our interconnected retail experience. In 2014, we opened two new direct
fulllment centers to support our online channel; a third will be completed in 2015. We are currently in pilot with Buy
Online, Deliver From Store, which will allow product to be delivered to the job site or home within a time-specic
delivery window. We will continue to make investments like these to allow our customers to shop when, where and
how they want with The Home Depot.
Our shareholder return principles are straightforward and have not changed over the last several years. We intend to
increase our dividend every year, targeting a payout ratio of 50 percent of net earnings, and we will return excess cash
to our shareholders through share buy backs.
In 2014, we repurchased a total of $7 billion, or 80 million shares, of our outstanding stock. In February 2015 we
announced a new $18 billion share repurchase program. We also announced a 26 percent increase in our quarterly
dividend to $0.59 per share, or an annual dividend of $2.36 per share.
Our Culture
The Home Depot continues to be a business driven by a commitment to its values and strong culture. In 2014, Team
Depot, our associate-led volunteer force, completed 1,200 projects to improve veterans’ homes and housing facilities
across 882 cities. Through The Home Depot Foundation, we have invested more than $80 million to support the
housing needs of veterans over the past four years.
In 2014, we received the ENERGY STAR Partner of the Year—Sustained Excellence Award for outstanding
contributions to reducing greenhouse gas emissions through promotion of energy-efcient products. Additionally, we
have implemented operational standards throughout our U.S. facilities that establish energy efcient practices, and
since 2004 we have saved roughly 8.6 billion kilowatt hours of electricity.
My vision for our company is simple:
• The Home Depot needs to be the best place for associates to work and have the opportunity to advance their careers;
• The Home Depot needs to be the best place for our business partners to grow and deliver higher protability for
their businesses; and
• The Home Depot needs to be the best place for investors to put their money.
Achieving this vision requires The Home Depot to be the best place for customers to receive a great, seamless,
interconnected experience and thus their rst choice of places to shop for home improvement products. We’re excited
for the opportunities ahead, and the value to be unlocked as we move forward.
Craig Menear
March 26, 2015