Home Depot is the fastest growing retailer ... Some of The

1

October 7th, 2004
2
New Realities in Lawn Garden Retailing

• Richard Dale
• Global Product Merchant

3
Company Overview

• The Home Depot is the worlds largest home
  improvement retailer.
• Over 1,800 stores
• Located in the United States, Canada, and Mexico
• THD intends to open 185 retail outlets in 2005.
  Thats a store opening every 50 hours!

4
Company Overview

• Did You Know?
• Home Depot is the fastest growing retailer in
  U.S. history the first to reach 30 billion,
  then 40 billion, then 50 billion and now 60
  billion in sales.

5
Financials in FY 2003

• 64.8 billion in record sales
• 4.3 billion in earnings
• 2.9 billion in cash and short-term investments.
  One of the strongest balance sheets in retail.
• 3.7 billion reinvested in the business
• 1.2 billion customer transactions

6
Community Efforts

• Giving back is one of the core values
• Contributed 3 million to aid hurricane
  rebuilding efforts
• Helped to renovate over 5,300 homes with
  Rebuilding Together
• Some of The Home Depot focuses
• The environment, recovery and relief,disaster
  preparedness, at-risk youth, and affordable
  housing

7
Our Stores

• Opened in Atlanta in 1979
• Stores average 107,000 square feet
• The Home Depot offers How-to clinics and Do-It
  Yourself project solutions
• Tool Rental Centers, more than 825 stores
• At-Home Services offers installation on select
  products

8
Our Customer

• Garden Business market is estimated to be over
  100 billion
• Housing Start for the next 5 years
• Mega trend Aging population with gardening 1
  project
• More than 70 of the gardening decisions and
  purchases are controlled by women
• Todays customer is intelligent, demanding and
  expects their purchase to be safe
• Global issues are causing home nesting

9
Commitments

• To provide safe products
• The Home Depots policy is not to sell mulch
  which contains CCA, lead, lead paint and CD
  materials.
• Vendors sign a separate agreement stipulating to
  this requirement
• The Home Depot conducts 3rd party verification
  inspection on all suppliers environmental product
  claims

10
Recent Fox 13 Investigation

• Arsenic-tainted Mulch July 16, 2004
• Do-it-Yourself couple in Florida Keys used Red
  mulch to landscape home, Mystery illness
  numbness in feet and legs
• Samples confirm arsenic in the mulch
• Mulch Sales Over 400 million a year
• Customers expect the product to be safe
• Remember the arsenic scare in the 90s

11
Retail Segment Concerns

• Negative News Media Reports
• CCA Treated Wood Use
• Colorant Safety
• No Government regulation
• Inability of consumers to judge quality by
  appearance and label
• Absence of industry 3rd party verification

12
Retail Segment Concerns

• Unverifiable product claims and labels
• Misleading reports consumer confusion
• No Industry Standard to point to for both the
  retailer and our customers.
• Product Demand vs. Natural Resources
• Lack of Product Lot Identification
• Voluntary to Regulated Industry??

13
Closing

• The Home Depot supports the Mulch Soil
  Councils Mulch Certification Program
• We are proud of the leadership role this Council
  has taken through this voluntary program by
  establishing testing protocols and metrics
• We subscribe to this voluntary testing program
  and recommend our suppliers to follow our lead

14