Q1) Will banks loan Home Depot $75 million for its expansion project?

Long-Term debt consists of the following: February 2, 1986 February 3, 1985 8 1/2% convertible subordinated debentures, due July 1, 2009, convertible into shares of common stock of the Company at a conversion price of $26.50 per share. The debentures are redeemable by the Company at a premium from July 1, 1986 to July 1, 1995, will retire 70% of the issue prior to maturity. Interest is payable semi-annually. $ 86,250,000 $86,250,000 9% convertible subordinated debentures, due December 15, 1999, convertible into shares of common stock of the Company at a conversion price of $16.90 per share. The debentures are redeemable by the Company at a premium from December 15, 1986 to December 15, 1994. An annual mandatory sinking fund of $2,000,000 per year is required from 1994 to 1998. Interest is payable semi-annually. 14,000,000 14,000,000 Total convertible subordinated debentures 100,250,000 100,250,000 Revolving credit agreement. Interest may be fixed for any portion outstanding for up to 180 days, at the Company's option, based on a CD rate plus 3/4%, the LIBOR rate plus 1/2% or at the prime rate. 88,000,000 *Variable Rate Industrial Revenue Bond (see note 7) 10,100,000 10,100,000 *Variable Rate Industrial Revenue Bond, secured by a letter of credit, payable in sinking fund installments from December 1, 1991 through December 1, 2010 4,400,000 9 5/8% Industrial Revenue Bond, secured by a letter of credit, payable on December 1, 1993, with interest payable semi-annually 4,200,000 4,200,000 *Variable Rate Industrial Revenue Bond, secured by land, payable in annual installments of $233,000 with interest payable semi-annually 3,267,000 3,500,000 Other 108,000 179,000 Total long-term debt 210,325,000 118,229,000 Less current portion 10,382,000 287,000 Long-term debt, excluding current portion $199.943,000 $117.942,000 *The interest rates on the variable rate industrial revenue bonds are related to various short-term municipal money market composite rates. Maturities of long-term debt are approximately $10,382,000 for fiscal 1986 and $234,000 for each of the next four subsequent years. During the fiscal year ended February 2, 1986, the Company entered into a new unsecured revolving line of credit for a maximum of $200,000,000, subject to certain limitations, of which $88,000,000 is outstanding at year-end. Commitment amounts under the agreement decrease by $15,000,000 on July 31, 1990, by $20,000,000 each six months from that date through January 31, 1993, by $35,000,000 on July 31, 1993 and with the remaining $50,000,000 commitment expiring on January 31, 1994. Maximum borrowings outstanding within the commitment limits may not exceed specified Exhibit 2 The Home Depot's Common Stock Price and Standard & Poor's 500 Composite Index from January 1985 to February 1986 Date Home Depot Stock Price S&P 500 Composite Index 1/2/85 2/1/85 3/1/85 4/1/85 5/1/85 6/3/85 7/1/85 8/1/85 9/2/85 10/1/85 11/1/85 12/2/85 1/2/86 2/3/86 $17.125 16.375 19.000 17.000 18.000 16.125 13.000 12.625 11.875 11.375 10.750 11.000 12.625 13.125 165.4 178.6 183.2 181.3 178.4 189.3 192.4 192.1 197.9 185.1 191.5 200.5 209.6 214.0 Cumulative Return: -23.4% 29.4% The Home Depot's B = 1.3 (Value Line estimate). Selected Financial Data February 2, 1986 February 3, 1985(1) Fiscal Year Ended January 29, 1984 January 30, 1983 January 31, 1982 $432,779,000 114,319,000 $256,184,000 70,014,000 $117,645,000 33,358,000 $51,542,000 14,735,000 Selected Consolidated Statement of Earnings Data: Net sales $700,729,000 Gross Profit 181,457,000 Earnings before income taxes and extraordinary item 11,619,000 Earnings before extraordinary item 8,219,000 Extraordinary item-reduction of income taxes arising from carryforward of prior years operating losses Net earnings $8,219,000 26,252,000 14,122,000 18,986,000 10,261,000 9,870,000 5,315,000 1,963,000 1,211,000 $14,122,000 $10,261,000 $5,315,000 234,000 $1,445,000 $.56 $.41 $.24 $.06 .01 Per Common and Common Equivalent Share: Earnings before extraordinary item $.33 Extraordinary item Net earnings $.33 Weighted average number of common and common equivalent shares 25,247,000 $.56 _$.41 $.24 $.07 25,302,000 VOO 24,834,000 22,233,000 21,050,000 Selected Consolidated Balance Sheet Data: Working Capital $ 106,451,000 Total assets 380,193,000 Long-term debt 199,943,000 Stockholders' equity 89,092,000 $100,110,000 249,364,000 117,942,000 80,214,000 $ 49,318,000 105,230,000 4,384,000 65,278,000 $ 12,901,000 33,014,000 236,000 18,354,000 $ 5,502,000 16,906,000 3,738,000 5,024,000 (1) 53 week fiscal year, all others were 52 week fiscal years. Long-Term debt consists of the following: February 2, 1986 February 3, 1985 8 1/2% convertible subordinated debentures, due July 1, 2009, convertible into shares of common stock of the Company at a conversion price of $26.50 per share. The debentures are redeemable by the Company at a premium from July 1, 1986 to July 1, 1995, will retire 70% of the issue prior to maturity. Interest is payable semi-annually. $ 86,250,000 $86,250,000 9% convertible subordinated debentures, due December 15, 1999, convertible into shares of common stock of the Company at a conversion price of $16.90 per share. The debentures are redeemable by the Company at a premium from December 15, 1986 to December 15, 1994. An annual mandatory sinking fund of $2,000,000 per year is required from 1994 to 1998. Interest is payable semi-annually. 14,000,000 14,000,000 Total convertible subordinated debentures 100,250,000 100,250,000 Revolving credit agreement. Interest may be fixed for any portion outstanding for up to 180 days, at the Company's option, based on a CD rate plus 3/4%, the LIBOR rate plus 1/2% or at the prime rate. 88,000,000 *Variable Rate Industrial Revenue Bond (see note 7) 10,100,000 10,100,000 *Variable Rate Industrial Revenue Bond, secured by a letter of credit, payable in sinking fund installments from December 1, 1991 through December 1, 2010 4,400,000 9 5/8% Industrial Revenue Bond, secured by a letter of credit, payable on December 1, 1993, with interest payable semi-annually 4,200,000 4,200,000 *Variable Rate Industrial Revenue Bond, secured by land, payable in annual installments of $233,000 with interest payable semi-annually 3,267,000 3,500,000 Other 108,000 179,000 Total long-term debt 210,325,000 118,229,000 Less current portion 10,382,000 287,000 Long-term debt, excluding current portion $199.943,000 $117.942,000 *The interest rates on the variable rate industrial revenue bonds are related to various short-term municipal money market composite rates. Maturities of long-term debt are approximately $10,382,000 for fiscal 1986 and $234,000 for each of the next four subsequent years. During the fiscal year ended February 2, 1986, the Company entered into a new unsecured revolving line of credit for a maximum of $200,000,000, subject to certain limitations, of which $88,000,000 is outstanding at year-end. Commitment amounts under the agreement decrease by $15,000,000 on July 31, 1990, by $20,000,000 each six months from that date through January 31, 1993, by $35,000,000 on July 31, 1993 and with the remaining $50,000,000 commitment expiring on January 31, 1994. Maximum borrowings outstanding within the commitment limits may not exceed specified Exhibit 2 The Home Depot's Common Stock Price and Standard & Poor's 500 Composite Index from January 1985 to February 1986 Date Home Depot Stock Price S&P 500 Composite Index 1/2/85 2/1/85 3/1/85 4/1/85 5/1/85 6/3/85 7/1/85 8/1/85 9/2/85 10/1/85 11/1/85 12/2/85 1/2/86 2/3/86 $17.125 16.375 19.000 17.000 18.000 16.125 13.000 12.625 11.875 11.375 10.750 11.000 12.625 13.125 165.4 178.6 183.2 181.3 178.4 189.3 192.4 192.1 197.9 185.1 191.5 200.5 209.6 214.0 Cumulative Return: -23.4% 29.4% The Home Depot's B = 1.3 (Value Line estimate). Selected Financial Data February 2, 1986 February 3, 1985(1) Fiscal Year Ended January 29, 1984 January 30, 1983 January 31, 1982 $432,779,000 114,319,000 $256,184,000 70,014,000 $117,645,000 33,358,000 $51,542,000 14,735,000 Selected Consolidated Statement of Earnings Data: Net sales $700,729,000 Gross Profit 181,457,000 Earnings before income taxes and extraordinary item 11,619,000 Earnings before extraordinary item 8,219,000 Extraordinary item-reduction of income taxes arising from carryforward of prior years operating losses Net earnings $8,219,000 26,252,000 14,122,000 18,986,000 10,261,000 9,870,000 5,315,000 1,963,000 1,211,000 $14,122,000 $10,261,000 $5,315,000 234,000 $1,445,000 $.56 $.41 $.24 $.06 .01 Per Common and Common Equivalent Share: Earnings before extraordinary item $.33 Extraordinary item Net earnings $.33 Weighted average number of common and common equivalent shares 25,247,000 $.56 _$.41 $.24 $.07 25,302,000 VOO 24,834,000 22,233,000 21,050,000 Selected Consolidated Balance Sheet Data: Working Capital $ 106,451,000 Total assets 380,193,000 Long-term debt 199,943,000 Stockholders' equity 89,092,000 $100,110,000 249,364,000 117,942,000 80,214,000 $ 49,318,000 105,230,000 4,384,000 65,278,000 $ 12,901,000 33,014,000 236,000 18,354,000 $ 5,502,000 16,906,000 3,738,000 5,024,000 (1) 53 week fiscal year, all others were 52 week fiscal years