SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] 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, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED].
For the transition period from to
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Commission file number 1-8207
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The Maintenance Warehouse FutureBuilder
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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
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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.
The Maintenance Warehouse FutureBuilder
Date: June 26, 2003
/s/ Ileana L. Connally
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By: Ileana L. Connally
Member of The Maintenance Warehouse
FutureBuilder Administrative Committee
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Financial Statements and Supplemental Schedule
December 31, 2002 and 2001
(With Independent Auditors' Report Thereon)
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) - December 31, 2002 11
INDEPENDENT AUDITORS' REPORT
The Administrative Committee
The 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, 2002
and 2001, 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 as of December 31, 2002 and 2001, 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 performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information included in
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) - December 31,
2002 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.
/s/ KPMG LLP
Atlanta, Georgia
April 4, 2003
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Statements of Net Assets Available for Benefits
December 31, 2002 and 2001
2002 2001
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Assets:
Investments (note 5) $ 10,744,372 12,301,655
Contributions receivable from employer 559,213 671,697
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Net assets available for benefits $ 11,303,585 12,973,352
=============== ===============
See accompanying notes to financial statements.
2
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2002 and 2001
2002 2001
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Additions (reductions) to net assets attributed to:
Investment income (loss):
Net depreciation in fair value of investments (note 5) $ (4,497,541) (1,110,730)
Interest and dividend income 80,043 66,627
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Total investment loss (4,417,498) (1,044,103)
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Contributions:
Participants 1,593,398 1,516,276
Employer 2,187,869 2,133,614
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3,781,267 3,649,890
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Total (reductions) additions (636,231) 2,605,787
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Deductions from net assets attributed to:
Benefits paid to participants 971,106 503,186
Administrative expenses 62,430 61,400
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Total deductions 1,033,536 564,586
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Net (decrease) increase (1,669,767) 2,041,201
Net assets available for benefits:
Beginning of year 12,973,352 10,932,151
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End of year $ 11,303,585 12,973,352
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See accompanying notes to financial statements.
3
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Notes to Financial Statements
December 31, 2002 and 2001
(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 summary plan description for a more complete description of the
Plan's provisions.
(a) GENERAL
The Plan is a defined contribution plan covering substantially all
employees of Maintenance Warehouse/America Corp. (the Company).
Employees are eligible to become participants on the first
quarterly entry date (January, 1, April 1, July 1, October 1)
following the completion of 12 months of service and 1,000 hours.
The Plan excludes leased employees, nonresident aliens, and
employees covered by a collective bargaining agreement. In
December 1999, the Plan was amended and combined in a master trust
with The Home Depot FutureBuilder. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA). The Plan is administered by the Administrative Committee
made up of employees of The Home Depot U.S.A., Inc.
(b) CONTRIBUTIONS
Participants may elect to contribute up to 50% of their pretax
compensation to the Plan. Participants may also contribute amounts
representing eligible rollover distributions from other qualified
retirement plans. The Company provides matching contributions of
150% of the first 2% of eligible compensation contributed by a
participant and 100% of the next 3% to 5% of eligible compensation
contributed by a participant. Additional amounts may be
contributed at the option of the Company's board of directors. The
matching Company contribution is initially invested in The Home
Depot, Inc. (the Parent Company) 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.
(Continued)
4
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Notes to Financial Statements
December 31, 2002 and 2001
(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:
VESTING
YEARS OF SERVICE PERCENTAGE
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Less than 3 0%
3 or more 100%
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:
VESTING
YEARS OF SERVICE PERCENTAGE
------------------------------------ ------------------
Less than 2 0%
2 but less than 3 25%
3 or more 100%
(e) DISTRIBUTIONS
Participants are entitled to distribution of their accounts upon
retirement, termination of employment, hardship, in the event of
death, or certain in-service distributions at age 65. Payments are
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) 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.
(g) FORFEITED ACCOUNTS
According to the summary plan description, 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
$38,980 and $35,940 were used to pay Plan expenses in 2002 and
2001, respectively.
(Continued)
5
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Notes to Financial Statements
December 31, 2002 and 2001
(h) ADMINISTRATIVE EXPENSES
Certain administrative expenses of the Plan are paid by the
Company. These costs include legal, accounting, and certain
administrative fees.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTATION
The financial statements of the Plan have been prepared on the
accrual basis of accounting.
(b) INVESTMENT VALUATION AND INCOME RECOGNITION
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 Parent 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.
The Plan's investments include funds which invest in various types
of investment securities and in various companies within various
markets. Investment securities are exposed to several risks, such
as interest rate, market, and credit risks. Due to the level of
risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could
materially affect the amounts reported in the Plan's financial
statements and supplemental schedule.
(c) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(d) 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.
(e) RECLASSIFICATIONS
Certain balances in the prior year have been reclassified to
conform with the current year presentation.
(f) FAIR VALUE OF FINANCIAL INSTRUMENTS
The Plan's investments are stated at fair value. In addition, the
Administrative Committee of the Plan believes that the carrying
amount of receivables/payables is a reasonable approximation of
the fair value due to the short-term nature of these instruments.
(Continued)
6
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Notes to Financial Statements
December 31, 2002 and 2001
(3) FEDERAL INCOME TAXES
The Internal Revenue Service has determined and informed the Company by a
letter dated July 16, 2002 that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the
Administrative Committee of the Plan believes the Plan is designed and is
currently being operated in compliance with the applicable requirements
of the IRC.
(4) 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.
(5) 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:
- The Home Depot, Inc. Common Stock Fund - Funds are invested in
common stock of The Home Depot, Inc.
- 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.
- Dodge & Cox Stock Fund - Funds are invested in shares of a
registered investment company that invests in common stocks of
companies that the Fund's managers believe to be temporarily
undervalued by the stock market but have favorable long-term
growth prospects.
- IRT Core Balanced Fund - Funds are invested in shares of a
registered investment company that invests in a combination of
equity and fixed income securities.
- 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.
- T. Rowe Price Science & Technology Fund - Funds are invested in
shares of a registered investment company that invests in the
common stocks of companies which generate growth primarily through
new technological developments.
- T. Rowe Price Small Cap Stock Fund - Funds are invested in shares
of a registered investment company that invests in common stocks
of smaller, faster-growing companies that are believed to offer
strong potential earnings growth or are undervalued.
- 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.
- Primco IRT Stable Value Fund - Funds are primarily invested in
short-term debt obligations that mature within one to three years.
(Continued)
7
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Notes to Financial Statements
December 31, 2002 and 2001
The fair value of individual investments that represent 5% or more of the
Plan's assets at December 31, 2002 and 2001 are as follows:
2002 2001
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The Home Depot, Inc. Common Stock $ 2,640,395 3,374,208
The Home Depot, Inc. Common Stock Fund 903,151 1,240,744
Barclay's Global Investors Equity Index Stock Fund 1,223,502 1,402,884
Primco IRT Stable Value Fund 2,374,082 2,131,996
Putnam New Opportunities Fund 632,091 803,991
T. Rowe Price Science & Technology Fund 981,802 1,593,747
During 2002 and 2001, the Plan's investments appreciated (depreciated) in
fair value as follows:
2002 2001
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Net (depreciation) appreciation in fair value:
Registered investment companies $ (1,316,031) (1,622,522)
The Home Depot, Inc. common stock (3,181,510) 511,792
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Net depreciation in fair value $ (4,497,541) (1,110,730)
=============== ===============
(6) 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 The Home Depot
FutureBuilder sponsored by the Parent Company. As discussed in note 8,
assets of The Home Depot FutureBuilder for Puerto Rico were transferred
into the Master Trust on April 1, 2002. At December 31, 2002 and 2001,
the Plan's interest in the net assets of the Master Trust was less than
1%.
(Continued)
8
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Notes to Financial Statements
December 31, 2002 and 2001
Summarized financial information of the Master Trust as of December 31,
2002 and 2001 is as follows:
2002 2001
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Assets:
Investments $ 1,218,130,415 2,069,938,920
Receivables:
Employee contributions receivable 1,821,134 34,049
Employer contributions receivable 3,633,115 690,296
Other receivable 443,168 325,339
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Total receivables 5,897,417 1,049,684
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Total assets 1,224,027,832 2,070,988,604
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Liabilities:
Accrued liabilities 81,019 17,877
Payable to broker 2,770,796 --
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Total liabilities 2,851,815 17,877
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Net assets available for benefits $ 1,221,176,017 2,070,970,727
================ ================
Net assets, 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, 2002 and 2001 is as follows:
2002 2001
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Investment income (loss):
Net (depreciation) appreciation in fair value of investments $ (941,057,070) 146,689,290
Dividends and interest income 16,836,110 11,123,625
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Total investment income (loss) $ (924,220,960) 157,812,915
=============== ===============
(7) RELATED PARTY TRANSACTIONS
Certain Plan investments include shares of common stock issued by The
Home Depot, Inc., the Parent Company. At December 31, 2002 and 2001, the
Plan held a combined total of 147,894 and 90,472 shares valued at
approximately $23.96 and $51.01 per share, respectively. As the Parent
Company of the Plan Sponsor, these transactions qualify as
party-in-interest.
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.
(Continued)
9
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Notes to Financial Statements
December 31, 2002 and 2001
(8) 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).
Also, on November 21, 2001, the Administrative Committee of The
Maintenance Warehouse FutureBuilder adopted an amendment to allow the
Company to take advantage of provisions in the Economic Growth and Tax
Relief Reconciliation Act of 2001 expanding the circumstances under which
a corporation may deduct dividends paid to an ESOP.
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 15% 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 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 and its subsidiaries are in one Master Trust.
(9) SUBSEQUENT EVENT
Effective March 3, 2003, the investment committee of The Maintenance
Warehouse FutureBuilder replaced the Putnam New Opportunities Fund with
the Artisan Mid-Cap Fund.
10
SCHEDULE 1
THE MAINTENANCE WAREHOUSE FUTUREBUILDER
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2002
CURRENT
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT VALUE
-------------------------------------------------- ------------------------------------------------------- -------------------
* The Home Depot, Inc. Common Stock 110,200 shares of common stock $ 2,640,395
* The Home Depot, Inc. Common Stock Fund 37,694 shares of common stock 903,151
Barclay's Global Investors Equity Index
Stock Fund 48,188 shares of registered investment company 1,223,502
Dodge & Cox Stock Fund 2,371 shares of registered investment company 208,799
IRT Core Balanced Fund 61,694 shares of registered investment company 545,373
Putnam New Opportunities Fund 22,233 shares of registered investment company 632,091
T. Rowe Price Science and Technology Fund 78,986 shares of registered investment company 981,802
T. Rowe Price Small Cap Stock Fund 4,477 shares of registered investment company 95,993
Templeton Foreign Fund 56,829 shares of registered investment company 472,252
Primco IRT Stable Value Fund 2,374,082 shares of registered investment company 2,374,082
Participant loans Loans with interest rates ranging from
5.75% to 10.5% and maturity dates
through January 31, 2018 666,932
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$ 10,744,372
===============
* Indicates party-in-interest to the Plan.
See accompanying independent auditors' report.
11
EXHIBIT INDEX
Exhibit Number Description
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23 Consent of KPMG LLP
99 Section 906 Certification