SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
ý ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
For the fiscal year ended December 31, 2001
OR
o TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
Commission file number 1-8207
Full title of the plan and the address of the plan, if different from that of the issuer named below:
The Maintenance Warehouse FutureBuilder
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
The Home Depot, Inc., 2455 Paces Ferry Road, NW, Atlanta, GA 30339
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
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The Maintenance Warehouse FutureBuilder |
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Date: June 26, 2002 |
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/s/ Lawrence A. Smith |
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By: Lawrence A. Smith |
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Member, Administrative Committee |
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MAINTENANCE WAREHOUSE FUTUREBUILDER
Financial Statements and Supplemental Schedule
December 31, 2001 and 2000
(With Independent Auditors’ Report Thereon)
MAINTENANCE WAREHOUSE FUTUREBUILDER
Table of Contents
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Schedule of Assets Held for Investment Purposes at End of Year |
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The Administrative
Committee
Maintenance Warehouse FutureBuilder:
We have audited the accompanying statements of net assets available for benefits of The Maintenance Warehouse FutureBuilder (the Plan) as of December 31, 2001 and 2000 and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s Administrative Committee. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan’s Administrative Committee, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of The Maintenance Warehouse FutureBuilder at December 31, 2001 and 2000 and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in schedule of assets held for investment purposes at end of year is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s Administrative Committee. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
April 19, 2002
Atlanta, Georgia
MAINTENANCE WAREHOUSE FUTUREBUILDER
Statements of Net Assets Available for Benefits
December 31, 2001 and 2000
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2001 |
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2000 |
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Assets: |
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Investments (note 3) |
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$ |
12,301,655 |
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10,045,250 |
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Contributions receivable: |
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Employer |
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671,697 |
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839,221 |
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Employee |
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— |
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47,680 |
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Total receivable |
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671,697 |
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886,901 |
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Net assets available for benefits |
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$ |
12,973,352 |
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10,932,151 |
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See accompanying notes to financial statements.
2
MAINTENANCE WAREHOUSE FUTUREBUILDER
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2001 and 2000
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2001 |
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2000 |
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Additions to net assets attributed to: |
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Dividends and interest |
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$ |
66,627 |
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51,244 |
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Contributions: |
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Employer |
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2,133,614 |
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1,961,929 |
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Participants |
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1,516,276 |
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2,090,975 |
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Total contributions |
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3,649,890 |
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4,052,904 |
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Total additions |
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3,716,517 |
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4,104,148 |
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Deductions: |
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Net depreciation in fair value of investments (note 3) |
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1,110,730 |
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2,799,069 |
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Benefits paid directly to participants |
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503,186 |
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343,226 |
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Administrative expenses |
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61,400 |
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19,512 |
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Total deductions |
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1,675,316 |
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3,161,807 |
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Net increase |
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2,041,201 |
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942,341 |
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Net assets available for benefits: |
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Beginning of year |
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10,932,151 |
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9,989,810 |
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End of year |
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$ |
12,973,352 |
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10,932,151 |
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See accompanying notes to financial statements.
3
Maintenance Warehouse FutureBuilder
December 31, 2001 and 2000
(1) Description of the Plan
The following description of The Maintenance Warehouse FutureBuilder (the Plan) is provided for general information only. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
(a) General
The Plan was adopted March 17, 1997, as a defined contribution 401(k) retirement plan covering employees of Maintenance Warehouse/America Corp. (the Company) who are at least 21 years of age, have completed one year of eligible service, and are not in a unit of employees covered by a collective bargaining agreement. In December 1999, the 1997 Plan was amended and combined in a master trust with the Home Depot, Inc.’s FutureBuilder. The Home Depot, Inc. is the Parent of the Company (the Parent Company). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
(b) Contributions
Participants may elect to contribute up to 15% of their pretax compensation to the Plan. The Company provides matching contributions of 150% of the first 2% of base compensation contributed by a participant and 100% of the next 3% to 5% of base compensation contributed by a participant. Additional amounts may be contributed at the option of the Parent’s Board of Directors. The matching Company contribution is initially invested in Home Depot, Inc. common stock and may be diversified at the discretion of the participants.
Effective January 1, 2000, eligible employees receive a supplemental annual matching contribution of 4.5% of compensation (4.0% of compensation for highly compensated employees). Eligible employees were employed on or before July 1, 1999 and are actively employed at December 31 of each calendar year. In addition, the participant must have enrolled in the Plan on or before December 31, 1999 and continuously contributed at least 3% of compensation to the Plan.
(c) Participants’ Accounts
Individual accounts are maintained for the participants and are credited for their contributions and the Company’s contributions. The accounts are further adjusted for Plan fees and investment income or losses.
(d) Vesting
Participants are 100% vested in their contributions and net value changes thereon. For employees hired subsequent to July 1, 1999, or former employees rehired after July 1, 1999 at a time when the matching account balance remaining in the Plan is less than 25% vested, the Company’s contributions vest on an increasing percentage basis as follows:
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Years of service |
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Vesting percentage |
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Less than 3 |
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0 |
% |
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3 or more |
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100 |
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For employees of the Company as of July 1, 1999 or former employees rehired after July 1, 1999 at a time when the matching account balance remaining in the Plan is at least 25% vested, the Company’s contributions vest on an increasing percentage basis as follow:
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Years of service |
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Vesting percentage |
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Less than 2 |
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0 |
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2 but less than 3 |
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25 |
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3 or more |
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100 |
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(e) Payment of Benefits
Participants are entitled to distribution of their accounts upon retirement, termination of employment, hardship, or in the event of death. Payment of benefits is made in a single lump-sum payment when directed by the participant. A participant may roll over their account balance directly into an eligible retirement plan. In the case of death, the participant’s entire account balance will be paid to the participant’s beneficiary.
(f) Forfeitures
According to the Plan agreement, for participants who have terminated employment, the nonvested portion of the Company matching contributions is used to reduce Plan expenses. Any remaining forfeitures may be used to reduce employer contributions. Total forfeitures, including earnings thereon, of $35,940 and $79,335, respectively, were used to pay Plan expenses in 2001 and 2000.
(g) Plan Termination
Although it has not expressed any intent to do so, the Company has the right to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. Upon termination of the Plan, all participants would become 100% vested in Company contributions and earnings thereon.
(h) Participant Loans
With the consent of the Trustee, loans are permitted to all Plan participants. In the aggregate, the amount of a participant’s loan cannot exceed 50% of the present value of the participant’s vested accrued benefit or $50,000, whichever is less. Loans must be adequately secured and bear interest at a reasonable rate as determined by the Plan administrator. The Plan provides for repayment of loans over a reasonable period of time not to exceed four years, except that a longer period is allowed for loans used by participants to acquire their residence.
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(i) Tax Status of Plan
The Plan Sponsor has filed an application for a determination letter with the Internal Revenue Service. The application is currently being processed by the Internal Revenue Service. The Company believes that the Plan, as currently designed and operated, is in compliance with the applicable requirements of the Internal Revenue Code and, accordingly, is qualified and exempt from Federal income taxes.
(2) Summary of Significant Accounting Policies
(a) General
Effective April 2000, the Plan changed the trustee of the Plan from Wachovia Bank, N.A. to The Northern Trust Company. The trustee holds, controls, manages, and administers the assets of the Plan.
(b) Basis of Presentation
The financial statements of the Plan have been prepared on the accrual basis of accounting.
(c) Investment Valuation
The Plan’s investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices, which represents the net asset value of shares held by the Plan at year-end. The Company’s common stock is valued at its quoted market price as obtained from the New York Stock Exchange.
Securities transactions are accounted for on the trade date. Participant loans are carried at cost which approximates fair value.
(d) Payment of Benefits
Benefits are recorded when paid.
(e) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and disclosure of contingent assets and liabilities at the date of the financial statements and the reported changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates.
(f) Reclassifications
Certain balances in prior years have been reclassified to conform with the current year presentation.
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(3) Investments
The Plan’s investments are held by the Trustee of the Plan, The Northern Trust Company. A description of the investments of the Plan follows:
Participant Directed
• Primco IRT Stable Value Fund — Funds are primarily invested in short-term debt obligations that mature within one to three years.
• Barclay’s Global Investors Equity Index Stock Fund — Funds are invested in shares of a registered investment company that invests in the common stocks included in the Standard & Poor’s 500 Index.
• Putnam New Opportunities Fund — Funds are invested in shares of a registered investment company that invests primarily in common stocks which are believed to have the potential to grow at an above-average pace over time.
• Templeton Foreign Fund — Funds are invested in shares of a registered investment company that invests in stocks and debt obligations of companies and governments outside the U.S.
• Invesco Total Return Fund — Funds are invested in shares of a registered investment company that invests in bonds, common stocks, and high-quality short-term to intermediate-term debt obligations.
• T. Rowe Price Science & Technology Fund — Funds are invested in shares of a registered investment company that invests in the common stock of companies which generate growth primarily through new technological developments.
• The Home Depot, Inc. Common Stock Fund — Funds are invested in common stock of The Home Depot, Inc.
The fair value of individual investments that represent 5% or more of the Plan’s assets at December 31, 2001 and 2000 are as follows:
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2001 |
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2000 |
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T. Rowe Price Science & Technology Fund |
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1,593,747 |
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2,627,328 |
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Primco IRT Stable Value Fund |
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2,131,996 |
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1,698,067 |
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Barclay’s Global Investors Equity Index Stock Fund |
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1,402,884 |
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1,456,275 |
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Putnam New Opportunities Fund |
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803,991 |
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965,895 |
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Templeton Foreign Fund |
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582,673 |
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636,583 |
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The Home Depot, Inc. Common Stock |
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3,374,208 |
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1,074,574 |
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The Home Depot, Inc. Common Stock Fund |
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1,240,744 |
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685,097 |
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Participant Loans |
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664,430 |
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580,831 |
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* Non-Participant Directed
7
During 2001 and 2000, net (depreciation) appreciation of the Plan’s investments was as follows:
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2001 |
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2000 |
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Net (depreciation) appreciation in fair value: |
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Registered investment companies |
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$ |
(1,622,522 |
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(2,533,573 |
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The Home Depot, Inc. common stock |
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511,792 |
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(265,496 |
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$ |
(1,110,730 |
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(2,799,069 |
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Non-Participant Directed
The Home Depot, Inc. Common Stock is comprised of shares of The Home Depot, Inc.’s common stock, representing the Company’s matching contributions. These shares have been allocated to individual participant accounts. Participants may immediately transfer the Company’s matching contributions to other investment funds. Information about the net assets and significant components of the changes in net assets (without consideration of year end contribution receivables) relating to the nonparticipant-directed investments is as follows:
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2001 |
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2000 |
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Net assets — The Home Depot, Inc. Common Stock — January 1 |
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$ |
1,074,574 |
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198,711 |
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Changes in net assets: |
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Net appreciation (depreciation) |
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373,442 |
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(165,444 |
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Contributions |
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2,301,138 |
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1,122,708 |
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Dividends |
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9,193 |
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1,792 |
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Benefits paid directly to participants |
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(133,638 |
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(25,657 |
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Administrative expenses |
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(35,785 |
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(12,726 |
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Loan withdrawals |
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(29,778 |
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(7,235 |
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Cash transfer to other funds |
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(184,938 |
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(37,575 |
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Net assets — The Home Depot, Inc. Common Stock — December 31 |
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$ |
3,374,208 |
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1,074,574 |
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(4) Investment in Master Trust
Effective December 15, 1999, a Master Trust was established for the investment of assets of the Plan and the assets of another retirement plan sponsored by The Home Depot, Inc., the Parent of the Company. At December 31, 2001, the Plan’s interest in the net assets of the Master Trust was less than 1%.
8
Summarized financial information of the Master Trust as of December 31, 2001 and 2000 is as follows:
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2001 |
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2000 |
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Assets: |
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Investments |
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$ |
2,069,938,920 |
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1,815,071,250 |
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Receivables: |
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Employer contributions receivable |
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690,296 |
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839,221 |
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Employee contributions receivable |
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34,049 |
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— |
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Other receivable |
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325,339 |
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327,687 |
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Total receivables |
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1,049,684 |
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1,166,908 |
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Total assets |
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2,070,988,604 |
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1,816,238,158 |
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Liabilities: |
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Accrued liabilities |
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17,877 |
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160,512 |
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Other payable |
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— |
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96,977 |
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Total liabilities |
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17,877 |
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257,489 |
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Net assets available for benefits |
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$ |
2,070,970,727 |
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1,815,980,669 |
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Investment income and administrative expenses related to the Master Trust are allocated to the individual plans based upon actual activity for each of the plans. Investment income for the Master Trust for the years ended December 31, 2001 and 2000 is as follows:
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2001 |
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2000 |
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Investment income: |
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Realized gain on sale or distribution of common stock of The Home Depot, Inc. |
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$ |
57,642,597 |
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69,624,095 |
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Realized (loss) gain on sale of shares of registered investment companies |
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(6,305,584 |
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18,740,198 |
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Net unrealized appreciation (depreciation) in fair value of investments |
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95,352,277 |
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(857,708,413 |
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Dividends and interest income |
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11,123,625 |
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11,525,344 |
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Total |
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$ |
157,812,915 |
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(757,818,776 |
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(5) Related Party Transactions
Certain Plan investments include shares of common stock issued by The Home Depot, Inc., the Parent Company. At December 31, 2001 and 2000, the Plan held a combined total of 90,472 and 38,515 shares valued at approximately $51.01 and $45.6875 per share, respectively. As the Parent Company of the Plan Sponsor, these transactions qualify as party-in-interest.
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Other Plan investments include units of short-term investment funds managed by The Northern Trust Company. The Northern Trust Company is the Trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest.
(6) Plan Amendments and Other Plan Changes
On November 21, 2001, the Administrative Committee of The Maintenance Warehouse FutureBuilder adopted an amendment to bring the plan in compliance with the General Agreement on Tariffs and Trades as amended in 1994, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997, and the Internal Revenue Service Restructuring and Reform Act of 1998 (collectively known as GUST).
Effective January 1, 2002, the Plan was amended to increase the maximum percentage of pretax contributions that participants can contribute each year to the Plan from 1% to 50% of eligible pay (subject to other Plan limitations).
Effective February 1, 2002, the investment committee of The Maintenance Warehouse FutureBuilder replaced the Invesco Total Return Fund with the IRT Core Balanced Fund. The change was the result of the underperformance of the Invesco Fund. The investment committee also added two new funds to the plan: Dodge & Cox Stock Fund and the T. Rowe Price Small Cap Stock Fund.
Effective April 1, 2002, the assets of The Home Depot FutureBuilder for Puerto Rico were added to the Master Trust. Three defined contribution plans of the Parent Company will now be in one Master Trust.
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Schedule 1
MAINTENANCE WAREHOUSE FUTUREBUILDER
Schedule of Assets Held for Investment Purposes at End of Year
December 31, 2001
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Current |
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Identity of issue |
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value |
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*The Home Depot, Inc. Common Stock |
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66,148 shares of common stock |
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$ |
3,374,208 |
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*The Home Depot, Inc. Common Stock Fund |
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24,324 shares of common stock |
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1,240,744 |
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Barclay’s Global Investors Equity Index Stock Fund |
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43,086 shares of registered investment company |
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1,402,884 |
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Invesco Total Return Fund |
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20,271 shares of registered investment company |
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506,982 |
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Putnam New Opportunities Fund |
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19,619 shares of registered investment company |
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803,991 |
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Templeton Foreign Fund |
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62,992 shares of registered investment company |
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582,673 |
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T. Rowe Price Science & Technology Fund |
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76,190 shares of registered investment company |
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1,593,747 |
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Primco IRT Stable Value Fund |
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2,131,996 shares of registered investment company |
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2,131,996 |
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*Participant loans |
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Loans with interest rates ranging from 6.5% to 10.5% and maturity dates through January 13, 2018 |
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664,430 |
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$ |
12,301,655 |
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*Indicates party-in-interest to the Plan.
See accompanying independent auditors’ report.
11