Home Depot (HD)

Store Growth

United States.    At the end of fiscal 2007, we were operating 1,950 The Home Depot stores in the U.S., including the territories of Puerto Rico, the Virgin Islands and Guam. During fiscal 2007, we opened 87 new The Home Depot stores, including nine relocations, in the U.S.

Canada.    At the end of fiscal 2007, we were operating 165 The Home Depot stores in ten Canadian provinces. Of these stores, ten were opened during fiscal 2007.

Mexico.    At the end of fiscal 2007, we were operating 66 The Home Depot stores in Mexico. Of these stores, six were opened during fiscal 2007, including one relocation.

China.    At the end of fiscal 2007, we were operating 12 The Home Depot stores in six Chinese cities.

Other.    In fiscal 2007, we opened five Yardbirds stores in California and a THD Design Center in California and North Carolina. At the end of fiscal 2007, we were operating 34 EXPO Design Center stores in 13 states. Also in fiscal 2007, we closed our 11 The Home Depot Landscape Supply stores and our two The Home Depot Floor stores.

Financial information about our operations outside of the U.S. is reported in Note 1 to the Consolidated Financial Statements.

Store Growth

United States.    At the end of fiscal 2007, we were operating 1,950 The Home Depot stores in the U.S., including
the territories of Puerto Rico, the Virgin Islands and Guam. During fiscal 2007, we opened 87 new The Home Depot stores, including nine relocations, in the U.S.

Canada.    At the end of fiscal 2007, we were operating 165 The Home Depot stores in ten Canadian
provinces. Of these stores, ten were opened during fiscal 2007.

Mexico.    At the end of fiscal 2007, we were operating 66 The Home Depot stores in Mexico. Of these
stores, six were opened during fiscal 2007, including one relocation.

China.    At the end of fiscal 2007, we were operating 12 The Home Depot stores in six Chinese cities.

Other.    In fiscal 2007, we opened five Yardbirds stores in California and a THD Design Center in California and
North Carolina. At the end of fiscal 2007, we were operating 34 EXPO Design Center stores in 13 states. Also in fiscal 2007, we closed our 11 The Home Depot Landscape Supply
stores and our two The Home Depot Floor stores.

Financial
information about our operations outside of the U.S. is reported in Note 1 to the Consolidated Financial Statements.

Store Growth

United States.    At the end of fiscal 2006, we were operating 1,872 The Home Depot stores in the U.S., including the territories of Puerto Rico and the Virgin Islands. During fiscal 2006, we opened 86 new The Home Depot stores, including eight relocations, in the U.S.

Canada.    At the end of fiscal 2006, we were operating 155 The Home Depot stores in ten Canadian provinces. Of these stores, 20 were opened during fiscal 2006, including two relocations.

Mexico.    At the end of fiscal 2006, we were operating 61 The Home Depot stores in Mexico. Of these stores, seven were opened during fiscal 2006.

China.    In fiscal 2006, we acquired The Home Way, a Chinese home improvement retailer, including 12 stores in six cities.

Credit Services.    We offer credit purchase programs through third-party credit providers to professional, D-I-Y and D-I-F-M customers. In fiscal 2006, approximately 4.5 million new The Home Depot credit accounts were opened, bringing the total number of The Home Depot account holders to approximately 17 million. Proprietary credit card sales accounted for approximately 28% of store sales in fiscal 2006. We also offer an unsecured Home Improvement Loan program through third-party credit providers that gives our customers the opportunity to finance the purchase of products and services in our stores. We believe this loan program not only supports large sales, such as kitchen and bath remodels, but also generates incremental sales from our customers.

Logistics.    Our logistics programs are designed to ensure excellent product availability for customers, effective use of our investment in inventory and low total supply chain costs. At the end of fiscal 2006, we operated 18 import distribution centers located in the U.S. and Canada. At the end of fiscal 2006, we also operated 30 lumber distribution centers in the U.S. and Canada to support the lumber demands of our stores and 10 transit facilities to receive merchandise from manufacturers for immediate delivery to our stores. At the end of fiscal 2006, approximately 40% of the merchandise shipped to our stores flowed through our network of distribution centers and transit facilities. As our networks evolve, we expect to increase our flow-through. The remaining merchandise will be shipped directly from our suppliers to our stores. In addition to replenishing merchandise supplies at our stores, we also provide delivery services directly to our customers.

Seasonality.    Our business is seasonal to a certain extent. Generally, our highest volume of sales occurs in our second fiscal quarter and the lowest volume occurs during our fourth fiscal quarter.

Competition.    Our business is highly competitive, based in part on price, store location, customer service and depth of merchandise. In each of the markets we serve, there are a number of other home improvement stores, electrical, plumbing and building materials supply houses and lumber yards. With respect to some products, we also compete with discount stores, local, regional and national hardware stores, mail order firms, warehouse clubs, independent building supply stores and, to a lesser extent, other retailers. In addition to these entities, our EXPO Design Center stores compete with specialty design stores or showrooms, some of which are only open to interior design professionals. Due to the variety of competition we face, we are unable to precisely measure the impact on our sales by our competitors.

Store Growth

United States.    At the end of fiscal 2005, we were operating 1,793 The Home Depot stores in the U.S., including the territories of Puerto Rico and the Virgin Islands. During fiscal 2005, we opened 140 new The Home Depot stores, including four relocations, in the U.S. Although these new store openings occurred primarily in existing markets, we continued our geographic expansion by opening stores in a number of new markets.

To increase customer service levels, gain incremental sales and enhance long-term market penetration, we often open new stores near the edge of market areas served by existing stores. While these openings may initially have a negative impact on comparable store sales growth, we believe this "cannibalization" strategy increases customer satisfaction and our overall market share by reducing delays in shopping, increasing utilization by existing customers and attracting new customers to more convenient locations. During fiscal 2005, we believe that approximately 20% of our stores were cannibalized by certain of our new stores.

Canada.    At the end of fiscal 2005, we were operating 137 The Home Depot stores in ten Canadian provinces. Of these stores, 21 were opened during fiscal 2005, including one relocation.

Mexico.    At the end of fiscal 2005, we were operating 54 stores in Mexico. Of these stores, 10 were opened during fiscal 2005.

China.    At the end of fiscal 2004, we entered into an arrangement to lease commercial office space in Shanghai to support a retail initiative in China. We are currently pursuing our strategy for entry into the China home improvement marketplace.

Store Growth

United States. At the end of Fiscal 2004, we were operating 1,657 Home Depot stores in the United States, including the territories of Puerto Rico and the Virgin Islands. During Fiscal 2004, we opened 142 new Home Depot stores in the U.S. Although these new store openings occurred primarily in existing markets, we continued our geographic expansion by opening stores in a number of new markets.

To increase customer service levels, gain incremental sales and enhance long-term market penetration, we often open new stores near the edge of market areas served by existing stores. While these openings may initially have a negative impact on comparable store sales growth, we believe this "cannibalization" strategy increases customer satisfaction and our overall market share by reducing delays in shopping, increasing utilization by existing customers and attracting new customers to more convenient locations. At the end of Fiscal 2004, we believe that approximately 17% of our stores were cannibalized by certain new stores.

Canada. At the end of Fiscal 2004, we were operating 117 Home Depot stores in nine Canadian provinces. Of these stores, 15 were opened during Fiscal 2004. During Fiscal 2005, we plan to open 19 additional stores in Canada.

Mexico. At the end of Fiscal 2004, we were operating 44 stores in Mexico. Of these stores, 20 were acquired as part of the June 2004 acquisition of Home Mart Mexico, S.A. de C.V., the second largest home improvement retailer in Mexico. During Fiscal 2005, we plan to open 10 additional stores in Mexico.

China. At the end of 2004, the Company entered into an arrangement to lease commercial space in Shanghai to support a retail initiative in China. The Company is currently pursuing its strategy for entry into the China home improvement marketplace.