Home Depot, Decomposition of ROE, 1986-19991986 1987 1988 1989 1990 1991 1992

ROE 26.8% 33.2% 23.9% 29.2% 31.9% 36.5% 21.5%NOPAT ($ Millions) 30 56 77 114 167 240 346 NOPAT Margin 2.9% 3.8% 3.9% 4.1% 4.4% 4.7% 4.8%Net Assets ($ Millions) 290 263 347 475 681 1,079 1,568 Operating ATO 3.5 5.5 5.8 5.8 5.6 4.8 4.6Operating ROA 10.2% 21.1% 22.3% 23.9% 24.5% 22.3% 22.1%Net Debt ($ Millions) 201 100 27 92 169 395 (123)Net Financial Leverage 2.25 0.61 0.08 0.24 0.33 0.58 (0.07)

5.70 1.50 0.60 1.60 3.70 (9.10) (16.70)

Net Interest Rate After Tax 2.8% 1.5% 2.2% 1.8% 2.2% -2.3% 13.6%Spread 7.4% 19.6% 20.1% 22.2% 22.4% 24.6% 8.4%Financial Leverage Effect 16.6% 12.0% 1.7% 5.3% 7.4% 14.2% -0.6%

Net Interest Expense After Tax ($ Millions)

Home Depot, Decomposition of ROE, 1986-19991993 1994 1995 1996 1997 1998 1999

19.9% 21.5% 21.3% 18.8% 19.5% 22.7% 26.5%439 609 722 932 1,159 1,618 2,315

4.7% 4.9% 4.7% 4.8% 4.8% 5.4% 6.0%2,735 3,267 4,390 5,602 6,647 8,235 10,258

3.4 3.8 3.5 3.5 3.6 3.7 3.716.0% 18.6% 16.4% 16.6% 17.4% 19.7% 22.6%

431 453 948 614 691 1,137 1,618 0.19 0.16 0.28 0.12 0.12 0.16 0.17

(18.70) 4.60 (9.50) (5.80) (1.20) 4.30 (5.50)

4.3% 1.0% -1.0% -0.9% -0.2% 0.4% -0.4%20.4% 17.6% 17.4% 17.6% 17.6% 19.3% 22.9%3.8% 2.8% 4.8% 2.2% 2.0% 3.1% 4.0%

Home Depot, Operational Data, 1986-19991986 1987 1988 1989 1990 1991

Sales ($ Millions) 1,011 1,454 2,000 2,758 3,815 5,137 Number of Stores 60 75 96 118 145 174

5,000 6,000 8,000 10,000 13,000 16,000

Increase in Square Footage 20.6% 27.6% 33.4% 26.9% 27.4% 24.1%

80 82 86 88 92 95

Same Store Sales Increase 7% 18% 13% 13% 10% 11%Weekly Sales per Store ($000) 355 418 464 515 566 633Sales per Square Foot ($) 230 265 282 303 322 348

34 48 64 84 112 146

Average Sale per Transaction ($) 29.73 30.24 31.13 32.65 33.92 35.13GMROI 179% 219% 219% 233% 246% 255%Number of Employees at yesr-end 6,600 9,100 13,000 17,500 21,500 28,000

Total Square Footage at year end (000)

Average Square Footage per Store (000)

Number of Customer Transactions ($ Millions)

Home Depot, Operational Data, 1986-19991992 1993 1994 1995 1996 1997 1998 1999

7,148 9,239 12,477 15,470 19,535 24,156 30,219 38,434 214 264 340 423 512 624 761 930

21,000 26,000 35,000 44,000 54,000 66,000 81,000 100,000

26.8% 26.3% 33.2% 26.3% 21.6% 23.1% 22.8% 23.5%

98 100 103 105 105 106 107 108

15% 7% 8% 3% 7% 7% 7% 10%724 764 802 787 803 829 844 876387 398 404 390 398 406 410 423

189 236 302 370 464 550 665 797

37.72 39.13 41.29 41.78 42.09 43.63 45.05 47.87254% 236% 238% 227% 232% 224% 227% 243%38,900 50,600 67,300 80,800 98,100 124,400 156,700 201,400

Home Depot EPS and Stock Data 1990-19991990 1991 1992 1993 1994 1995

Diluted EPS ($) 0.10 0.13 0.18 0.22 0.29 0.34Diluted EPS Increase 43% 30% 38% 22% 32% 17%

1,824 1,985 2,096 2,132 2,142 2,151

Return on Stock Home Depot 54% 167% 48% -20% 19% 6%Return on Stock S&P 500 -5% 32% 8% 10% 2% 38%

Weighted Number of Shares Assuming Dilution (Millions)

Home Depot EPS and Stock Data 1990-19991996 1997 1998 1999

0.43 0.55 0.71 1.0026% 28% 29% 41%

2,195 2,287 2,320 2,342

6% 81% 111% 77%22% 34% 28% 21%

Home Depot.IncIncome Statement ($ Millions)

Years Ending January

2000 1999 1998Net Sales 38,434 30,219 24,156 Cost of Merchandise Sold 27,023 21,614 17,375

Gross Profit $11,411 $8,605 $6,781 Operating ExpensesSelling and Store Operating 6,832 5,341 4,303 Pre-Opening 113 88 65 General and Administrative 671 515 413 Non-Recurring Charge 0 0 104

Total Operating Expenses 7,616 5,944 4,885 Operating Income 3,795 2,661 1,896

Interest and Investment Income 37 30 44 Interest Expense (28) (37) (42)Interest, net 9 (7) 2 Earnings Before Income Taxes 3,804 2,654 1,898 Income Taxes 1,484 1,040 738

Net Earnings 2,320 1,614 1,160 Basic Earnings Per Share 1.03 0.73 0.53 Diluted Earnings Per Share 1.00 0.71 0.52

Home Depot.IncBalance Sheet ($ Millions)

As of End of January

2000 1999ASSETS

Cash and Cash Equivalents 168 62 Short-Term Investments 2 - Receivables, net 587 469 Merchandise Inventories 5,489 4,293 Other Current Assets 144 109

Total Current Assets 6,390 4,933 Property and Equipment

Land 3,248 2,739 Buildings 4,834 3,757 Furniture, Fixtures and Equipment 2,279 1,761 Leasehold Improvements 493 419 Construction in Progress 791 540 Capital Leases 245 206

11,890 9,422

Less Accumulated Depreciation and Amortization 1,663 1,262

Net Property and Equipment 10,227 8,160 Cost in Excess of the Fair Value of Net Assets Acquired 311 268 Other 153 104

TOTAL ASSETS 17,081 13,465 LIABILITIES AND STOCKHOLDERS EQUITY

Accounts Payable 1,993 1,586 Accrued Salaries and Related Expenses 541 395 Sales Taxes Payable 269 176 Other Accrued Expenses 763 586 Income Taxes Payable 61 100 Current Installments of Long-Term Debt 29 14

Total Current Liabilities 3,656 2,857 Long-Term Debt, excluding current installments 750 1,566 Other Long-Term Liabilities 237 208 Deferred Income Taxes 87 85 Minority Interest 10 9

Total Liabilities 4,740 4,725 Stockholders' Equity Common Stock 115 111 Paid-In Capital 4,319 2,817 Retained Earnings 7,941 5,876 Other (34) (64)

Total Stockholders' Equity 12,341 8,740

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 17,081 13,465

Home Depot.IncCash Flow Statement ($ Millions)

Years Ending January

2000 1999 1998CASH FLOW PROVIDED BY OPERATING ACTIVITY

Net Earnings 2,320 1,614 1,160 Depreciation and Amortization 463 373 283 (Increase) Decrease in Receivables, net (85) 85 (166)Increase in Merchandise Inventories (1,142) (698) (885)Increase in Accounts Payable and Accrued Expenses 820 423 577 Increase in Income Taxes Payable 93 59 83 Other (23) 61 (23)

2,446 1,917 1,029 CASH FLOW PROVIDED BY INVESTING ACTIVITY

Capital Expenditure (2,581) (2,053) (1,420)Purchase of Remaining Interest in The Home Depot Canada 0 (261) 0 Payments for Businesses Acquired, net (101) (6) (61)Proceeds from Sales of Property and Equipment 87 45 85 Purchase of Investment (32) (2) (194)Proceeds from Maturities of Investment 30 4 599 Advanced Secured by Real Estate, net (25) 2 20

(2,622) (2,271) (971)CASH FLOW PROVIDED BY FINANCING ACTIVITY (Repayment) Issuance of Commercial Paper Obligations, net (246) 246 0 Proceeds from Long-Term Borrowings, net 522 0 15 Repayment of Long-Term Debt (14) (8) (40)Proceeds from Sale Common Stock, net 267 167 122 Cash Dividens paid to Stockholders (255) (168) (139)Minority Interest Contributions to Partnership 7 11 10

281 248 (32)Effect of Exchange Rate Changes 1 (4) 0 Increase (Decrease) in Cash and Cash Equivalents 106 (110) 26 Cash and Cash Equivalents at Beginning of Year 62 172 146

Cash and Cash Equivalents at End of Year 168 62 172

Projected Growth in U.S Market for HomeImprovement Products, as of June 2000

Year Percent Change Over Previous Year

2000 6.30%2001 3.20%2002 4.00%2003 4.40%2004 4.60%

Summary Data for Lowe's ($ Millions)1999 1998 1997

Sales $15,905 $13,330 $11,108 NOPAT $727 $530 $398 NOPAT Margin 4.6% 4.0% 3.6%Net Assets $4,961 $3,545 $2,810 Operatinng ROA 14.7% 15.0% 14.2%Number of Stores at year-end 576 520 477Comparable Stores Sales Increase 6.0% 6.0% 4.0%Sales per Square Foot $303 $273 $302 GMROI 169.0% 173.0% 162.0%