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EX-31.1 - SECTION 302 CERTIFICATION - HOME DEPOT INCdex311.htm
EX-31.2 - SECTION 302 CERTIFICATION - HOME DEPOT INCdex312.htm
EX-12.1 - STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES - HOME DEPOT INCdex121.htm
EX-32.1 - SECTION 906 CERTIFICATION - HOME DEPOT INCdex321.htm
EX-32.2 - SECTION 906 CERTIFICATION - HOME DEPOT INCdex322.htm
EX-15.1 - LETTER OF KPMG LLP, ACKNOWLEDGEMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING - HOME DEPOT INCdex151.htm
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 

(Mark One)

  

x

   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 2, 2010
- OR -

¨

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from         to
Commission file number 1-8207

THE HOME DEPOT, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware   95-3261426

(State or other jurisdiction of

incorporation or organization)

  (I.R.S. Employer Identification Number)
2455 Paces Ferry Road N.W., Atlanta, Georgia   30339
(Address of principal executive offices)   (Zip Code)

(770) 433-8211

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, ” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer x   Accelerated filer ¨   Non-accelerated filer ¨      Smaller reporting company ¨
    (Do not check if a smaller reporting company)     

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

$0.05 par value 1,680,353,844 shares of common stock, as of May 28, 2010

 

 

 


Table of Contents

THE HOME DEPOT, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

 

         Page

Part I. Financial Information

  

Item 1.

 

Financial Statements

  
 

CONSOLIDATED STATEMENTS OF EARNINGS—
Three Months Ended May 2, 2010 and May 3, 2009

   3
 

CONSOLIDATED BALANCE SHEETS—
As of May 2, 2010 and January  31, 2010

   4
 

CONSOLIDATED STATEMENTS OF CASH FLOWS—
Three Months Ended May 2, 2010 and May 3, 2009

   5
 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME—
Three Months Ended May 2, 2010 and May 3, 2009

   6
 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   7
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

   10

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and
Results of Operations

   11

Item 3.

 

Quantitative and Qualitative Disclosures about Market Risk

   17

Item 4.

 

Controls and Procedures

   17

Part II. Other Information

  

Item 1A.

 

Risk Factors

   18

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

   19

Item 6.

 

Exhibits

   20

Signatures

   21

Index to Exhibits

   22

 

2


Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 

     Three Months Ended  
amounts in millions, except per share data    May 2,
        2010        
    May 3,
        2009        
 
NET SALES    $16,863      $16,175   
Cost of Sales    11,069      10,725   
            

GROSS PROFIT

   5,794      5,450   

Operating Expenses:

    

Selling, General and Administrative

   4,078      4,042   

Depreciation and Amortization

   411      428   
            

Total Operating Expenses

   4,489      4,470   
            

OPERATING INCOME

   1,305      980   

Interest and Other (Income) Expense:

    

Interest and Investment Income

   (4   (5

Interest Expense

   142      180   

Other

   51      -   
            

Interest and Other, net

   189      175   
            

EARNINGS BEFORE PROVISION FOR INCOME TAXES

   1,116      805   

Provision for Income Taxes

   391      291   
            

NET EARNINGS

   $     725      $     514   
            

Weighted Average Common Shares

   1,677      1,683   

BASIC EARNINGS PER SHARE

   $    0.43      $    0.31   

Diluted Weighted Average Common Shares

   1,688      1,689   

DILUTED EARNINGS PER SHARE

   $    0.43      $    0.30   

Dividends Declared Per Share

   $  0.23625      $  0.225   
See accompanying Notes to Consolidated Financial Statements.     

 

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Table of Contents

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

amounts in millions, except share and per share data            May 2,        
2010
        January 31,    
2010
 
ASSETS     

Current Assets:

    

Cash and Cash Equivalents

   $  2,436      $  1,421   

Short-Term Investments

   6      6   

Receivables, net

   1,342      964   

Merchandise Inventories

   11,479      10,188   

Other Current Assets

   1,383      1,321   
            

Total Current Assets

   16,646      13,900   
            

Property and Equipment, at cost

   37,653      37,345   

Less Accumulated Depreciation and Amortization

   12,249      11,795   
            

Net Property and Equipment

   25,404      25,550   
            

Goodwill

   1,192      1,171   

Other Assets

   377      256   
            

Total Assets

   $43,619      $40,877   
            

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current Liabilities:

    

Accounts Payable

   $  7,051      $  4,863   

Accrued Salaries and Related Expenses

   1,154      1,263   

Sales Taxes Payable

   544      362   

Deferred Revenue

   1,225      1,158   

Income Taxes Payable

   400      108   

Current Installments of Long-Term Debt

   2,021      1,020   

Other Accrued Expenses

   1,582      1,589   
            

Total Current Liabilities

   13,977      10,363   
            

Long-Term Debt, excluding current installments

   7,676      8,662   

Other Long-Term Liabilities

   2,356      2,140   

Deferred Income Taxes

   239      319   
            

Total Liabilities

   24,248      21,484   
            

STOCKHOLDERS’ EQUITY

    

Common Stock, par value $0.05; authorized: 10 billion shares; issued: 1.720 billion shares at May 2, 2010 and 1.716 billion shares at January 31, 2010; outstanding: 1.686 billion shares at May 2, 2010 and 1.698 billion shares at January 31, 2010

   86      86   

Paid-In Capital

   6,321      6,304   

Retained Earnings

   13,552      13,226   

Accumulated Other Comprehensive Income

   506      362   

Treasury Stock, at cost, 34 million shares at May 2, 2010 and 18 million shares at January 31, 2010

   (1,094   (585
            

Total Stockholders’ Equity

   19,371      19,393   
            

Total Liabilities and Stockholders’ Equity

   $43,619      $40,877   
            

See accompanying Notes to Consolidated Financial Statements.

 

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Table of Contents

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

         Three Months Ended    
amounts in millions    May 2,
2010
   May 3,
2009

CASH FLOWS FROM OPERATING ACTIVITIES:

     

Net Earnings

   $   725        $   514    

Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:

     

Depreciation and Amortization

   438        453    

Stock-Based Compensation Expense

   64        54    

Changes in Assets and Liabilities:

     

Increase in Receivables, net

   (367)       (337)   

Increase in Merchandise Inventories

   (1,227)       (734)   

Increase in Other Current Assets

   (66)       (127)   

Increase in Accounts Payable and Accrued Expenses

   2,131        1,798    

Increase in Deferred Revenue

   61        82    

Increase in Income Taxes Payable

   289        67    

Decrease in Deferred Income Taxes

   (63)       (94)   

Other

   54        51    
         

Net Cash Provided by Operating Activities

   2,039        1,727    
         

CASH FLOWS FROM INVESTING ACTIVITIES:

     

Capital Expenditures

   (167)       (172)   

Proceeds from Sales of Property and Equipment

   27        70    

Proceeds from Sales and Maturities of Investments

   -        19    
         

Net Cash Used in Investing Activities

   (140)       (83)   
         

CASH FLOWS FROM FINANCING ACTIVITIES:

     

Repayments of Long-Term Debt

   (5)       (4)   

Proceeds from Sales of Common Stock

   11        2    

Repurchases of Common Stock

   (508)       -    

Cash Dividends Paid to Stockholders

   (399)       (381)   

Other Financing Activities

   8        426    
         

Net Cash (Used in) Provided by Financing Activities

   (893)       43    
         

Increase in Cash and Cash Equivalents

   1,006        1,687    

Effect of Exchange Rate Changes on Cash and Cash Equivalents

   9        8    

Cash and Cash Equivalents at Beginning of Period

   1,421        519    
         

Cash and Cash Equivalents at End of Period

           $2,436            $2,214    
         

See accompanying Notes to Consolidated Financial Statements.

 

5


Table of Contents

THE HOME DEPOT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

         Three Months Ended    
amounts in millions            May 2,        
2010
          May 3,        
2009

Net Earnings

   $725       $514    

Other Comprehensive Income:

    

Foreign Currency Translation Adjustments

   151       41    

Cash Flow Hedges (1)

   (7)      (3)   

Unrealized Gain on Investments (1)

   -        1    
        

Total Other Comprehensive Income

   144       39    
        

Comprehensive Income

   $869       $553    
        

 

 

(1) These components of comprehensive income are reported net of income taxes.

See accompanying Notes to Consolidated Financial Statements.

 

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Table of Contents

THE HOME DEPOT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2010, as filed with the Securities and Exchange Commission.

Business

The Home Depot, Inc. and its subsidiaries (the “Company”) operate The Home Depot stores, which are full-service, warehouse-style stores averaging approximately 105,000 square feet in size. The stores stock approximately 30,000 to 40,000 different kinds of building materials, home improvement supplies and lawn and garden products that are sold to do-it-yourself customers, do-it-for-me customers and professional customers.

Valuation Reserves

As of May 2, 2010 and January 31, 2010, the valuation allowances for Merchandise Inventories and uncollectible Receivables were not material.

Reclassifications

Certain amounts in the prior fiscal period have been reclassified to conform with the presentation adopted in the current fiscal period.

2.   DEBT GUARANTEE EXTENSION

In connection with the sale of HD Supply, Inc. (“HD Supply”) on August 30, 2007, the Company guaranteed a $1.0 billion senior secured amortizing term loan (“guaranteed loan”) of HD Supply. The Company is responsible for up to $1.0 billion and any unpaid interest in the event of nonpayment by HD Supply. The guaranteed loan is collateralized by certain assets of HD Supply. The original expiration date of the guarantee was August 30, 2012. On March 19, 2010, the Company amended the guarantee to extend the expiration date to April 1, 2014. The fair value of the guarantee at August 30, 2007 was $16 million and was recorded as a liability of the Company in Other Long-Term Liabilities. The extension of the guarantee increased the fair value of the guarantee to $67 million, resulting in a $51 million charge to Interest and Other, net, for the first quarter of fiscal 2010.

3.   RATIONALIZATION CHARGES

In fiscal 2008, the Company reduced its square footage growth plans to improve free cash flow, provide stronger returns for the Company and invest in its existing stores to continue improving the customer experience. As a result of this store rationalization plan, the Company determined that it would no longer pursue the opening of approximately 50 U.S. stores that had been in its new store pipeline. The Company expects to dispose of or sublet these pipeline locations over varying periods. The Company also closed 15 underperforming U.S. stores in the second quarter of fiscal 2008, and the Company expects to dispose of or sublet those locations over varying periods.

Also in fiscal 2008, the Company announced that it would exit its EXPO, THD Design Center, Yardbirds and HD Bath businesses (the “Exited Businesses”) in order to focus on its core The Home Depot stores. The Company closed the Exited Businesses in the first quarter of fiscal 2009, and expects to dispose of or sublet those locations over varying periods. These steps impacted approximately 5,000 associates in those locations, their support functions and their distribution centers.

 

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Table of Contents

THE HOME DEPOT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Finally, in January 2009 the Company also restructured its support functions to better align the Company’s cost structure. These actions impacted approximately 2,000 associates.

The Company recognized total pretax charges of $146 million for fiscal 2009, including $117 million in the first quarter of fiscal 2009, and $951 million for fiscal 2008 related to these actions (collectively, the “Rationalization Charges”). The Company did not incur any charges related to these actions in the first quarter of fiscal 2010 and does not expect any further charges related to these actions.

Activity related to Rationalization Charges for the first quarter of fiscal 2010 was as follows (amounts in millions):

 

     Accrued Balance
January 31, 2010
      Cash Uses        Non-cash Uses    Accrued Balance
May 2, 2010
Asset impairments    $  23   $ —   $ —   $   23
Lease obligation costs, net      191      14      —      177
                

Total

   $214   $ 14   $ —   $ 200
                

Costs related to asset impairments and lease obligations are included in Selling, General and Administrative expenses. Asset impairment charges, including contractual costs to complete certain assets, were determined based on fair market value using market data for each individual property. Lease obligation costs represent the present value of contractually obligated rental payments offset by estimated sublet income, including estimates of the time required to sublease the locations. The payments related to the leased locations therefore are not generally incremental uses of cash.

4.  FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

 

 

Level 1 – Observable inputs that reflect quoted prices in active markets

 

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable

 

Level 3 – Unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own                 assumptions

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The assets and liabilities of the Company that are measured at fair value on a recurring basis as of May 2, 2010 and January 31, 2010 are as follows (amounts in millions):

 

   

Fair Value at May 2, 2010 Using

 

Fair Value at January 31, 2010 Using

   

    Level 1    

 

    Level 2    

 

    Level 3    

 

    Level 1    

 

    Level 2    

 

    Level 3    

Available-for-sale securities   $6   $   –   $–   $6   $  –   $–
Derivative agreements - assets     –      30     –     –     15     –
Derivative agreements - liabilities     –     (65)     –     –     (4)     –
                       

Total

  $6   $(35)   $–   $6   $11   $–
                       

The Company’s available-for-sale securities are recorded at fair value based on current market rates (level 1) and are included in Short-Term Investments in the accompanying Consolidated Balance Sheets.

The Company uses derivative financial instruments from time to time in the management of its interest rate exposure on long-term debt and its exposure on foreign currency fluctuations. The fair value of the Company’s derivative financial instruments is measured using level 2 inputs.

 

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Table of Contents

THE HOME DEPOT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The assets and liabilities of the Company that are measured at fair value on a nonrecurring basis as of May 2, 2010 are as follows (amounts in millions):

 

    

      Fair Value as of      

May 2, 2010

Level 3

  

Three Months Ended

May 2, 2010

Gains (Losses)

Store Rationalization – lease obligation costs, net

   $(177)    $    –

Guarantee of HD Supply loan

       (67)        (51)
         

Total

   $(244)      $(51)
         

Lease obligation costs included in the Company’s Rationalization Charges were measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3), as further discussed in Note 3.

The guarantee of the HD Supply loan was measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3), as further discussed in Note 2.

Long-lived assets were analyzed for impairment on a nonrecurring basis using fair value measurements with unobservable inputs (level 3). Impairment charges related to long-lived assets in the first quarter of fiscal 2010 were not material.

The aggregate fair value of the Company’s Senior Notes, based on quoted market prices (level 1), was $9.6 billion and $9.5 billion at May 2, 2010 and January 31, 2010, respectively, compared to a carrying value of $9.3 billion at both May 2, 2010 and January 31, 2010.

5.   BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES

The reconciliation of basic to diluted weighted average common shares for the three months ended May 2, 2010 and May 3, 2009 was as follows (amounts in millions):

 

    

            Three Months Ended             

    

May 2,

2010

 

May 3,

2009

Weighted average common shares

   1,677   1,683

Effect of potentially dilutive securities:

    

Stock plans

        11          6
        

Diluted weighted average common shares

   1,688   1,689
        

Stock plans include shares granted under the Company’s employee stock plans. Options to purchase 38 million and 54 million shares of common stock for the three months ended May 2, 2010 and May 3, 2009, respectively, were excluded from the computation of Diluted Earnings per Share because their effect would have been anti-dilutive.

 

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THE HOME DEPOT, INC. AND SUBSIDIARIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

The Home Depot, Inc.:

We have reviewed the Consolidated Balance Sheet of The Home Depot, Inc. and subsidiaries as of May 2, 2010, and the related Consolidated Statements of Earnings, Cash Flows and Comprehensive Income for the three-month periods ended May 2, 2010 and May 3, 2009. These Consolidated Financial Statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the Consolidated Financial Statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the Consolidated Balance Sheet of The Home Depot, Inc. and subsidiaries as of January 31, 2010, and the related Consolidated Statements of Earnings, Stockholders’ Equity and Comprehensive Income, and Cash Flows for the year then ended (not presented herein); and in our report dated March 25, 2010, we expressed an unqualified opinion on those Consolidated Financial Statements. In our opinion, the information set forth in the accompanying Consolidated Balance Sheet as of January 31, 2010, is fairly stated, in all material respects, in relation to the Consolidated Balance Sheet from which it has been derived.

 

/s/ KPMG LLP

 

Atlanta, Georgia

June 2, 2010

 

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Table of Contents

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Certain statements regarding our future performance constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may relate to, among other things, the demand for our products and services, net sales growth, comparable store sales, state of the economy, state of the residential construction, housing and home improvement markets, state of the credit markets, including mortgages, home equity loans and consumer credit, commodity price inflation and deflation, implementation of store initiatives, continuation of reinvestment plans, net earnings performance, earnings per share, stock-based compensation expense, capital allocation and expenditures, liquidity, the effect of adopting certain accounting standards, return on invested capital, management of our purchasing or customer credit policies, the effect of accounting charges, the planned recapitalization of the Company, timing of the completion of the recapitalization, the ability to issue debt securities on terms and at rates acceptable to us, store openings and closures and financial outlook.

Forward-looking statements are based on currently available information and our current assumptions, expectations and projections about future events. You are cautioned not to place undue reliance on our forward-looking statements. These statements are not guarantees of future performance and are subject to future events, risks and uncertainties – many of which are beyond our control or are currently unknown to us – as well as potentially inaccurate assumptions that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, those described in Item 1A, “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended January 31, 2010 as filed with the Securities and Exchange Commission (“SEC”) on March 25, 2010 (“Form 10-K”) and in Item 1A of Part II and elsewhere in this report. The risks and uncertainties described in the Form 10-K and in this report include the risks associated with the current economic environment and the possible adverse effects on the Company’s results of operations and financial condition. You should read such information in conjunction with our Financial Statements and related notes in Item 1 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report. There also may be other factors that we cannot anticipate or that are not described in this report, generally because we do not currently perceive them to be material. Such factors could cause results to differ materially from our expectations.

Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements other than as required by law. You are advised, however, to review any further disclosures we make on related subjects in our periodic filings with the SEC.

EXECUTIVE SUMMARY AND SELECTED CONSOLIDATED STATEMENTS OF EARNINGS DATA

For the first quarter of fiscal 2010, we reported Net Earnings of $725 million and Diluted Earnings per Share of $0.43 compared to Net Earnings of $514 million and Diluted Earnings per Share of $0.30 for the first quarter of fiscal 2009.

The results for the first quarter of fiscal 2010 include a $51 million pretax charge related to the extension of our guarantee of a senior secured loan of HD Supply, Inc. (“guarantee extension”). The results for the first quarter of fiscal 2009 reflect the impact of several strategic actions initiated in fiscal 2008. These strategic actions resulted in store rationalization charges related to the closing of 15 underperforming U.S. stores and the removal of approximately 50 U.S. stores from our new store pipeline, business rationalization charges related to the exit of our EXPO, THD Design Center, Yardbirds and HD Bath businesses (the “Exited Businesses”) and charges related to the restructuring of support functions (collectively, the “Rationalization Charges”). These actions resulted in pretax Rationalization Charges of $117 million in the first quarter of fiscal 2009. Excluding the $51 million charge and the Rationalization Charges, Net Earnings were $758 million and Diluted Earnings per Share were $0.45 for the first quarter of fiscal 2010 compared to Net Earnings of $587 million and Diluted Earnings per Share of $0.35 for the first quarter of fiscal 2009.

Net Sales increased 4.3% to $16.9 billion for the first quarter of fiscal 2010 from $16.2 billion for the first quarter of fiscal 2009. Our strong performance in our seasonal categories and commodity price inflation in certain categories like lumber positively impacted our Net Sales for the first quarter of fiscal 2010. Our comparable store sales increased 4.8% in the first quarter of fiscal 2010, our largest increase since the fourth quarter of fiscal 2005, driven by a 4.4% increase in comparable store customer transactions and a 0.4% increase in our comparable store average ticket to $52.53. Comparable store sales for our U.S. stores increased 3.3% in the first quarter of fiscal 2010.

 

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In the first quarter of fiscal 2010, we continued to focus on our core retail business, investing in our associates and stores and improving our customer service. The roll-out of our Customers FIRST training to all store associates and support staff in fiscal 2009 has brought simplification and focus across the business, and we repeated and refreshed the Customers FIRST training during the first quarter of fiscal 2010. This program is part of our ongoing commitment to improve customer service levels in our stores, and we continued to see the benefit of this training in improved customer service ratings for the first quarter of fiscal 2010.

We also continued to make significant progress on our merchandising tools in the U.S. that helped us manage markdown and clearance activity and better control inventory. We improved our inventory turnover ratio to 4.1 times for the first quarter of fiscal 2010, compared to 3.9 times for the first quarter of fiscal 2009, and increased our in-stock levels during a challenging season. At the end of the first quarter of fiscal 2010, we had 13 Rapid Deployment Centers (“RDCs”) that serve approximately 70% of our U.S. stores. We remain committed to our overall RDC roll-out strategy, supporting our goal of increasing our central distribution penetration, and are on track to serve 100% of our U.S. stores by the end of fiscal 2010.

We opened one new store and closed one store during the first quarter of fiscal 2010, for a total store count of 2,244 at the end of the first quarter of fiscal 2010. As of the end of the first quarter of fiscal 2010, a total of 268 stores, or approximately 12%, were located in Canada, Mexico and China compared to 265 stores, or approximately 12%, as of the end of the first quarter of fiscal 2009.

We generated $2.0 billion of cash flow from operations in the first quarter of fiscal 2010. We used a portion of this cash flow to fund $508 million of share repurchases, pay $399 million of dividends and fund $167 million in capital expenditures.

At the end of the first quarter of fiscal 2010, our long-term debt-to-equity ratio was 39.6% compared to 53.7% at the end of the first quarter of fiscal 2009. Our return on invested capital (computed on net operating profit after tax for the trailing twelve months and the average of beginning and ending long-term debt and equity) was 11.5% for the first quarter of fiscal 2010 compared to 10.0% for the first quarter of fiscal 2009. This increase reflects the increase in our operating profit, which includes the impact of the Rationalization Charges in the results of the first quarter of fiscal 2009. Excluding Rationalization Charges, our return on invested capital was 11.1% for the first quarter of fiscal 2009.

 

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We believe the selected sales data, the percentage relationship between Net Sales and major categories in the Consolidated Statements of Earnings and the percentage change in the dollar amounts of each of the items presented below are important in evaluating the performance of our business operations.

 

 

     % of Net Sales        
     Three Months Ended        
     May 2,
2010
    May 3,
2009
    % Increase
(Decrease) in
Dollar Amounts
 

NET SALES

   100.0   100.0   4.3

GROSS PROFIT

   34.4      33.7      6.3   

Operating Expenses:

      

Selling, General and Administrative

   24.2      25.0      0.9   

Depreciation and Amortization

   2.4      2.6      (4.0
              

Total Operating Expenses

   26.6      27.6      0.4   
              

OPERATING INCOME

   7.7      6.1      33.2   

Interest and Other (Income) Expense:

      

Interest and Investment Income

   -      -      (20.0

Interest Expense

   0.8      1.1      (21.1

Other

   0.3      -      N/M   
              

Interest and Other, net

   1.1      1.1      8.0   
              

EARNINGS BEFORE PROVISION FOR INCOME TAXES

   6.6      5.0      38.6   

Provision for Income Taxes

   2.3      1.8      34.4   
              

NET EARNINGS

   4.3   3.2   41.1
              

Note: Certain percentages may not sum to totals due to rounding.

      

SELECTED SALES DATA

      

Number of Customer Transactions (in millions)

   323      310      4.2

Average Ticket

   $52.54      $52.67      (0.2

Weighted Average Weekly Sales Per

      

Operating Store (in thousands)

   $   581      $   552      5.3   

Weighted Average Sales per Square Foot

   $   288      $   273      5.4

Comparable Store Sales Increase (Decrease) (%)(1)

   4.8   (10.2 )%    N/A   

 

  (1)

Includes Net Sales at locations open greater than 12 months, including relocated and remodeled stores. Retail stores become comparable on the Monday following their 365th day of operation. Comparable store sales is intended only as supplemental information and is not a substitute for Net Sales or Net Earnings presented in accordance with generally accepted accounting principles.

N/M – Not Meaningful

 

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RESULTS OF OPERATIONS

Net Sales for the first quarter of fiscal 2010 increased 4.3%, or $688 million, to $16.9 billion from $16.2 billion for the first quarter of fiscal 2009. The increase in Net Sales for the first quarter of fiscal 2010 reflects the impact of positive comparable store sales. Total comparable store sales increased 4.8% for the first quarter of fiscal 2010 compared to a decrease of 10.2% for the first quarter of fiscal 2009.

The increase in comparable store sales for the first quarter of fiscal 2010 reflects a number of factors. Every department posted positive comparable store sales for the first quarter of fiscal 2010, and comparable store customer transactions increased 4.4% compared to the first quarter of fiscal 2009. Comparable store sales for our Lumber, Paint, Electrical and Garden/Seasonal product categories were above the Company average for the first quarter of fiscal 2010, while comparable store sales for our Building Materials, Flooring, Hardware, Plumbing, Kitchen/Bath and Millwork product categories were below the Company average for the first quarter of fiscal 2010. Also, in the first quarter of fiscal 2010, lumber and copper price inflation positively impacted our comparable store sales by approximately 100 basis points.

Gross Profit increased 6.3% to $5.8 billion for the first quarter of fiscal 2010 from $5.5 billion for the first quarter of fiscal 2009. Gross Profit as a percent of Net Sales increased 67 basis points to 34.4% for the first quarter of fiscal 2010 compared to 33.7% for the first quarter of fiscal 2009. Excluding the impact of markdowns related to the closing of our Exited Businesses taken in the first quarter of last year, gross margin increased by 38 basis points. Our U.S. stores reported 12 basis points of gross profit margin expansion in the first quarter of fiscal 2010 driven by lower markdowns taken compared to the same period last year, as we saw benefits from better product assortment management and fewer promotions. Additionally, we realized 26 basis points of gross margin expansion arising from our non-U.S. businesses, principally Canada, as we anniversaried the disruption we experienced last year when we implemented our new enterprise resource planning system in Canada.

Selling, General and Administrative Expense (“SG&A”) increased 0.9% to $4.1 billion for the first quarter of fiscal 2010 from $4.0 billion for the first quarter of fiscal 2009. As a percent of Net Sales, SG&A was 24.2% for the first quarter of fiscal 2010 compared to 25.0% for the first quarter of fiscal 2009. Excluding the Rationalization Charges from the results of the first quarter of fiscal 2009, SG&A decreased 26 basis points for the first quarter of fiscal 2010 from the same period last year. This decrease reflects expense leverage in the positive comparable store sales environment and solid expense control partially offset by a higher cost of credit due to a higher penetration of bank cards.

Depreciation and Amortization decreased 4.0% to $411 million for the first quarter of fiscal 2010 from $428 million for the first quarter of fiscal 2009. Depreciation and Amortization as a percent of Net Sales was 2.4% for the first quarter of fiscal 2010 and 2.6% for the first quarter of fiscal 2009. Depreciation and Amortization as a percent of Net Sales decreased by 21 basis points from the first quarter of fiscal 2009, primarily due to sales leverage.

Operating Income increased 33.2% to $1.3 billion for the first quarter of fiscal 2010 from $980 million for the first quarter of fiscal 2009. Operating Income as a percent of Net Sales was 7.7% for the first quarter of fiscal 2010 compared to 6.1% for the first quarter of fiscal 2009. Excluding the Rationalization Charges from the results of the first quarter of fiscal 2009, Operating Income increased 19.0% for the first quarter of fiscal 2010.

In the first quarter of fiscal 2010, we recognized $189 million of Interest and Other, net, compared to $175 million in the first quarter of fiscal 2009. Interest and Other, net, as a percent of Net Sales was 1.1% for the first quarter of fiscal 2010 and 2009. Interest and Other, net, reflects a $51 million charge in the first quarter of fiscal 2010 related to the guarantee extension. Excluding this charge, Interest and Other, net, as a percent of Net Sales was 0.8% for the first quarter of fiscal 2010, a decrease of 28 basis points from the same period last year. The decrease in Interest and Other, net, excluding the $51 million charge, was due primarily to a lower debt balance.

Our combined effective income tax rate decreased to 35.0% for the first quarter of fiscal 2010 from 36.1% for the comparable period of fiscal 2009. The decrease in our effective income tax rate for the first quarter of fiscal 2010 reflects benefits arising from favorable settlements with various state taxing authorities.

Diluted Earnings per Share were $0.43 for the first quarter of fiscal 2010 and $0.30 for the first quarter of fiscal 2009. Excluding the $51 million debt guarantee extension charge and the Rationalization Charges, Diluted Earnings per Share for the first quarter of fiscal 2010 were $0.45 compared to $0.35 for the first quarter of fiscal 2009, an increase of 28.6%.

 

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To provide clarity, internally and externally, about our operating performance for the first quarter of fiscal 2010 and 2009, we supplement our reporting with non-GAAP financial measures to reflect adjustments for the $51 million pretax charge related to the guarantee extension as described more fully in Note 2 to the Consolidated Financial Statements, Rationalization Charges as described more fully in Note 3, and the Net Sales from Exited Businesses during the period from closing announcement to actual closing. We believe these non-GAAP financial measures better enable management and investors to understand and analyze our performance by providing them with meaningful information relevant to events of unusual nature or frequency. However, this supplemental information should not be considered in isolation or as a substitute for the related GAAP measures.

The following reconciles the non-GAAP financial measures to the corresponding GAAP measures for the first quarter of fiscal 2010 and 2009 (amounts in millions, except per share data):

 

     Three Months Ended May 2, 2010
     As
Reported
   Adjustment    Non-GAAP
Measures
   % of
Net Sales

Net Sales

       $16,863        $       -         $16,863    100.0%

Cost of Sales

   11,069       11,069    65.6 
                   

Gross Profit

   5,794       5,794    34.4 

Operating Expenses:

           

Selling, General and Administrative

   4,078       4,078    24.2 

Depreciation and Amortization

   411       411      2.4 
                   

Total Operating Expenses

   4,489       4,489    26.6 
                 

Operating Income

   1,305       1,305      7.7 

Interest and Other, net

   189    51     138      0.8 
                   

Earnings Before Provision for Income Taxes

   1,116    (51)    1,167      6.9 

Provision for Income Taxes

   391    (18)    409      2.4 
                   

Net Earnings

       $     725        $   (33)        $     758        4.5%
                   

Diluted Earnings per Share

       $    0.43        $(0.02)        $    0.45    N/A
                   
     Three Months Ended May 3, 2009
     As
Reported
   Adjustments    Non-GAAP
Measures
   % of
Net Sales

Net Sales

       $16,175        $  221         $15,954    100.0%

Cost of Sales

   10,725    192     10,533    66.0 
                   

Gross Profit

   5,450    29     5,421    34.0 

Operating Expenses:

           

Selling, General and Administrative

   4,042    143     3,899    24.4 

Depreciation and Amortization

   428       425      2.7 
                   

Total Operating Expenses

   4,470    146     4,324    27.1 
                   

Operating Income

   980    (117)    1,097      6.9 

Interest and Other, net

   175       175      1.1 
                   

Earnings Before Provision for Income Taxes

   805    (117)    922      5.8 

Provision for Income Taxes

   291    (44)    335      2.1 
                   

Net Earnings

       $     514        $   (73)        $     587        3.7%
                   

Diluted Earnings per Share

       $    0.30        $(0.04)        $    0.35    N/A
                   

Note: Certain amounts in Diluted Earnings Per Share may not foot due to rounding.

 

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LIQUIDITY AND CAPITAL RESOURCES

Cash flow generated from operations provides us with a significant source of liquidity. During the first quarter of fiscal 2010, Net Cash Provided by Operating Activities was $2.0 billion compared to $1.7 billion for the same period of fiscal 2009. This increase was primarily a result of stronger Net Earnings in the first quarter of fiscal 2010.

Net Cash Used in Investing Activities for the first quarter of fiscal 2010 was $140 million compared to $83 million for the same period of fiscal 2009.

Net Cash Used in Financing Activities for the first quarter of fiscal 2010 was $893 million compared to Net Cash Provided by Financing Activities of $43 million for the same period of fiscal 2009. This change was primarily the result of $508 million in Repurchases of Common Stock in the first quarter of fiscal 2010. Since the inception of our share repurchase program in 2002, we have repurchased 769.2 million shares of our common stock for a total of $28.0 billion. As of May 2, 2010, $12.0 billion remained under our share repurchase authorization.

We have commercial paper programs that allow for borrowings up to $3.25 billion. In connection with the programs, we have a back-up credit facility with a consortium of banks for borrowings up to $3.25 billion. As of May 2, 2010, there were no borrowings outstanding under the commercial paper programs or the related credit facility. The credit facility expires in December 2010 and contains various restrictive covenants. As of May 2, 2010, we were in compliance with all of the covenants, and they are not expected to impact our liquidity or capital resources.

As of May 2, 2010, we had $2.4 billion in Cash, Cash Equivalents and Short-Term Investments. We believe that our current cash position, access to the debt capital markets and cash flow generated from operations should be sufficient to enable us to complete our capital expenditure programs and fund dividend payments, any share repurchases and any required long-term debt payments through the next several fiscal years. In addition, we have funds available from our commercial paper programs and the ability to obtain alternative sources of financing.

At January 31, 2010, we had an outstanding forward starting interest rate swap agreement with a notional amount of $500 million to hedge interest rate fluctuations in anticipation of issuing long-term debt to refinance debt maturing in August 2010. In April 2010, we entered into an additional forward starting interest rate swap agreement with a notional amount of $500 million, increasing the total notional amount of these agreements to $1.0 billion. Both of these swaps are accounted for as cash flow hedges. At May 2, 2010, the approximate fair value of these agreements was a liability of $21 million, which is the estimated amount we would have paid to settle the agreements.

In May 2010, we entered into a forward starting interest rate swap agreement with a notional amount of $500 million, accounted for as cash flow hedge, to hedge interest rate fluctuations in anticipation of issuing long-term debt to refinance debt maturing in fiscal 2011.

 

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our exposure to market risks results primarily from fluctuations in interest rates. There have been no material changes to our exposure to market risks from those disclosed in our Form 10-K.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act) during the fiscal quarter ended May 2, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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PART II. OTHER INFORMATION

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed under Item 1A, “Risk Factors” and elsewhere in our Form 10-K. These risks and uncertainties could materially and adversely affect our business, financial condition and results of operations. The risks and uncertainties described in the Form 10-K include the risks and uncertainties associated with the current economic environment, such as the state of the residential construction, housing and home improvement markets; the state of the credit markets, including the limited availability of mortgages, home equity loans, consumer credit for our retail customers and commercial credit for our professional customers and our suppliers, as well as the availability and costs of commercial credit generally; reduced consumer spending; lower levels of consumer confidence; increased levels of consumer and commercial delinquencies; and supply interruptions and adverse business circumstances experienced by certain of our suppliers. Some of these risks and uncertainties and related effects that we experienced during the fiscal quarter covered by this report (and continue to experience) are described in greater detail in this Form 10-Q in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The risks described in our Form 10-K and set forth above are not the only risks we face. Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.

 

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

  (a) During the first quarter of fiscal 2010, the Company issued 396 deferred stock units under The Home Depot, Inc. NonEmployee Directors’ Deferred Stock Compensation Plan pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. The deferred stock units were credited to the accounts of such nonemployee directors who elected to receive board retainers in the form of deferred stock units instead of cash during the first quarter of fiscal 2010. The deferred stock units convert to shares of common stock on a one-for-one basis following a termination of service as described in this plan.

 

       During the first quarter of fiscal 2010, the Company credited 1,098 deferred stock units to participant accounts under The Home Depot FutureBuilder Restoration Plan pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, for involuntary, non-contributory plans. The deferred stock units convert to shares of common stock on a one-for-one basis following the termination of services as described in this plan.

 

  (c) Since fiscal 2002, the Company has repurchased shares of its common stock having a value of approximately $28.0 billion pursuant to its share repurchase program. The number and average price of shares purchased in each fiscal month of the first quarter of fiscal 2010 are set forth in the table below:

 

Period

  

Total

Number of

Shares

Purchased(1)

  

Average

Price Paid

Per Share(1)

  

Total Number of

Shares Purchased as

Part of Publicly

Announced Program(2)

  

Approximate Dollar

Value of Shares

that May Yet Be

Purchased Under

the Program(2)

February 1, 2010 - February 28, 2010

   356,875     $31.11        320,400        $12,508,395,194  

March 1, 2010 - March 28, 2010

   10,831,298     $32.30        9,168,400        $12,212,394,999  

March 29, 2010 - May 2, 2010

   6,086,407     $33.27        6,084,200        $12,009,995,808  

 

  (1) These amounts include repurchases pursuant to the Company’s 1997 and 2005 Omnibus Stock Incentive Plans (the “Plans”). Under the Plans, participants may exercise stock options by surrendering shares of common stock that the participants already own as payment of the exercise price. Participants in the Plans may also surrender shares as payment of applicable tax withholding on the vesting of restricted stock and deferred share awards. Shares so surrendered by participants in the Plans are repurchased pursuant to the terms of the Plans and applicable award agreement and not pursuant to publicly announced share repurchase programs.

 

  (2) The Company’s common stock repurchase program was initially announced on July 15, 2002. As of the end of the first quarter of fiscal 2010, the Board had approved purchases up to $40.0 billion. The program does not have a prescribed expiration date.

 

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Item 6. Exhibits

Exhibits marked with an asterisk (*) are incorporated by reference to exhibits or appendices previously filed with the Securities and Exchange Commission, as indicated by the references in brackets. All other exhibits are filed or furnished herewith.

 

*3.1    Amended and Restated Certificate of Incorporation of The Home Depot, Inc. [Form 10-Q for the fiscal quarter ended August 4, 2002, Exhibit 3.1 (File No. 1-8207)]
*3.2    Certificate of Amendment to Amended and Restated Certificate of Incorporation of The Home Depot, Inc. [Form 10-Q for the fiscal quarter ended May 3, 2009, Exhibit 3.2]
*3.3    By-Laws of The Home Depot, Inc. (Amended and Restated Effective August 20, 2009) [Form 8-K filed on August 26, 2009, Exhibit 3.1]
12.1    Statement of Computation of Ratio of Earnings to Fixed Charges.
15.1    Letter of KPMG LLP, Acknowledgement of Independent Registered Public Accounting Firm, dated June 2, 2010.
31.1    Certification of the Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2    Certification of the Chief Financial Officer and Executive Vice President – Corporate Services pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32.1    Certification of Chairman and Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification of Chief Financial Officer and Executive Vice President – Corporate Services furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101    The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2010, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Earnings; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Comprehensive Income; and (v) the Notes to the Consolidated Financial Statements, tagged as blocks of text.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

   

THE HOME DEPOT, INC.

  (Registrant)
By:  

/s/ FRANCIS S. BLAKE

  Francis S. Blake
  Chairman and Chief Executive Officer
 

/s/ CAROL B. TOMÉ

  Carol B. Tomé
  Chief Financial Officer and
  Executive Vice President – Corporate Services
 

June 1, 2010

  (Date)

 

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INDEX TO EXHIBITS

 

 

Exhibit

  

Description

Exhibits marked with an asterisk (*) are incorporated by reference to exhibits or appendices previously filed with the Securities and Exchange Commission, as indicated by the references in brackets. All other exhibits are filed or furnished herewith.
  *3.1    Amended and Restated Certificate of Incorporation of The Home Depot, Inc. [Form 10-Q for the fiscal quarter ended August 4, 2002, Exhibit 3.1 (File No. 1-8207)]
  *3.2    Certificate of Amendment to Amended and Restated Certificate of Incorporation of The Home Depot, Inc. [Form 10-Q for the fiscal quarter ended May 3, 2009, Exhibit 3.2]
  *3.3    By-Laws of The Home Depot, Inc. (Amended and Restated Effective August 20, 2009) [Form 8-K filed on August 26, 2009, Exhibit 3.1]
  12.1    Statement of Computation of Ratio of Earnings to Fixed Charges.
  15.1    Letter of KPMG LLP, Acknowledgement of Independent Registered Public Accounting Firm, dated June 2, 2010.
  31.1    Certification of the Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
  31.2    Certification of the Chief Financial Officer and Executive Vice President – Corporate Services pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
  32.1    Certification of Chairman and Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  32.2    Certification of Chief Financial Officer and Executive Vice President – Corporate Services furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  101    The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2010, formatted in XBRL (Extensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Earnings; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statements of Comprehensive Income; and (v) the Notes to the Consolidated Financial Statements, tagged as blocks of text.

 

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