Analyst TeamChristina CaamanoEric SchaferSusan Tatara

Home Depot Described

Past Performance

Future Performance

Investment Recommendation

World’s largest home improvement retailer 2,200 stores located in the U.S, Mexico,

China, Puerto Rico, Canada, Guam and the Virgin Islands

Sells building materials, home improvement, lawn/garden products and a variety of services.

Do-it-yourself Do-it-for-me Professional customers

Net earnings was $2.3 Billion Diluted earnings per share:$1.34 Net sales: $71.3 Billion Operating income: $4.4 Billion Gross Profit: 24.0 Billion

Merchandise Inventories asset: Remained at similar level for 2 years Largest asset (inventory driven company)

We expect this number will decrease by a small amount in fiscal year 2009….

Buildings asset:Increased by 4%

Home Depot purchased more buildings in fiscal year 2008

Home Depot could place properties on market as a “sale lease back”.

This would result in added value and increased revenue.

Furniture fixtures and equipment asset Construction in progress asset Short term debt liability Current installments of long term debt liability Total liabilities

LIQUIDITY:2008 2007 Industry Lowe’s

Current Ratio 1.20 1.15 1.20 1.15

Quick Ratio 0.13 0.14 0.10 0.08

Cash debt 0.46 0.45 NA 0.52

ACTIVITY:2008 2007 Industry Lowe’s

AR T/O 63.91 34.52 63.90 0.00

Inventory T/O 4.22 4.18 4.20 4.01

Asset T/O 1.13 1.10 4.96 1.50

PROFITABILITY:2008 2007 Industry Lowe’s

Profit Margin 0.03 0.06 NA 0.05

RR on assets 0.04 0.06 6.37 0.07

EPS 1.34 2.38 NA 1.51

COVERAGE:2008 2007 Industry Lowe’s

Debt to Asset 0.57 0.60 0.58 0.45

Time Interest 6.99 10.41 NA 13.52

Cash debt 0.22 0.14 NA 0.28

Liquidity: Cash flow from operations Net cash in financing activities

Current cash debt coverage ratio decreased a bit in 2008 fiscal year from

0.46 to 0.45

Net cash Leases Commercial paper programs Stock repurchase program

Write offs Rationalization charges Current economic conditions and relationship

to decline in sales…

Compensation discussion and analysis

Off balance sheet arrangements

FIFO Method In Canada a weighted average inventory

system was utilized in 2008

In Fiscal Year 2008, inventory was reduced while maintaining a favorable in-stock rate

Change in top level management

Non GAAP results Discontinued operations Revenue recognition

HOLD – if you currently own this stock

BUY - good investment opportunity

Home Depot is financially sound and will survive the economic downturn…

Questions