| (Mark One): | ||||
x |
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
| For the fiscal year ended December 31, 2008 | ||||
| OR | ||||
o |
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: The Home Depot FutureBuilder |
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
| Page | ||||
| 1 | ||||
| 2 | ||||
| 3 | ||||
| 4 | ||||
| 16 | ||||
| 17 | ||||
| 2008 | 2007 | |||||||
Assets: |
||||||||
Investments, at fair value |
$ | 1,880,179,285 | $ | 2,301,391,842 | ||||
Participant loans |
133,108,393 | 134,416,867 | ||||||
Receivables: |
||||||||
Participant contributions receivable |
— | 41,366 | ||||||
Employer contributions receivable |
— | 7,370 | ||||||
Due from broker |
193,194 | — | ||||||
Other receivables |
282,357 | 250,664 | ||||||
Total receivables |
475,551 | 299,400 | ||||||
Total assets |
2,013,763,229 | 2,436,108,109 | ||||||
Liabilities: |
||||||||
Accrued liabilities |
885,509 | 829,693 | ||||||
Due to broker |
— | 1,483,076 | ||||||
Total liabilities |
885,509 | 2,312,769 | ||||||
Net assets available for benefits before adjustments |
2,012,877,720 | 2,433,795,340 | ||||||
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts |
38,144,690 | 1,753,776 | ||||||
Net assets
available for
benefits |
$ | 2,051,022,410 | $ | 2,435,549,116 | ||||
2
| 2008 | 2007 | |||||||
Investment income (loss): |
||||||||
Net depreciation in fair value of investments |
$ | (597,985,548 | ) | $ | (236,429,171 | ) | ||
Interest income |
27,146,807 | 24,583,226 | ||||||
Dividends |
30,476,989 | 36,584,820 | ||||||
Total investment loss |
(540,361,752 | ) | (175,261,125 | ) | ||||
Contributions: |
||||||||
Participants |
263,349,153 | 328,501,391 | ||||||
Employer |
140,415,288 | 154,999,501 | ||||||
Total contributions |
403,764,441 | 483,500,892 | ||||||
| (136,597,311 | ) | 308,239,767 | ||||||
Deductions from net assets attributed to: |
||||||||
Benefits paid to participants |
237,250,257 | 320,891,212 | ||||||
Assets transfer |
— | 228,002,700 | ||||||
Administrative expenses |
10,679,138 | 11,703,772 | ||||||
Total deductions |
247,929,395 | 560,597,684 | ||||||
Net decrease |
(384,526,706 | ) | (252,357,917 | ) | ||||
Net assets available for benefits: |
||||||||
Beginning of year |
2,435,549,116 | 2,687,907,033 | ||||||
End of year |
$ | 2,051,022,410 | $ | 2,435,549,116 | ||||
3
| (1) | Description of the Plan | |
| The following is a brief description of The Home Depot FutureBuilder (the Plan). Participants should refer to the plan document or 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 U.S. associates of The Home Depot, Inc. and subsidiaries (the Company). Associates are eligible to participate in the Plan for purposes of making elective deferrals after completing 90 days of service. Participants are eligible for the Company’s matching contributions on the first day of the calendar quarter (January 1, April 1, July 1, and October 1) coincident with or following the completion of 12 months of service and 1,000 hours. Temporary associates and certain of THD At-Home Services, Inc.’s 100% commission associates are eligible to make before-tax contributions following the completion of 12 months of service and 1,000 hours. The Plan excludes leased associates, nonresident aliens, and associates covered by a collective bargaining agreement, unless the terms of the collective bargaining agreement require that the associate be eligible to participate in the Plan. The Plan is subject to certain provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan is administered by the Administrative Committee, the members of which are officers of Home Depot U.S.A., Inc. | |||
| The Home Depot, Inc., the Plan Sponsor, sold certain of its subsidiaries comprising the HD Supply business segment (HD Supply) on August 30, 2007. Upon the closing of this transaction, the Plan accounts of all HD Supply associates actively employed as of the closing date were fully vested in their respective account balances in the Plan. HD Supply associates continued to participate in the Plan through December 27, 2007, and the Plan was treated as a multiple employer plan during the period beginning on the closing date and ending on December 27, 2007. The Plan was amended effective as of the closing date to incorporate all provisions required by law to satisfy the requirements for a multiple employer plan, including the continued awarding of vesting and eligibility service credit under the Plan for post-closing service with HD Supply through December 27, 2007 and separate nondiscrimination testing for HD Supply and the Company. The assets and liabilities attributable to associates of HD Supply were transferred to a newly-created HD Supply defined contribution plan on December 27, 2007. | |||
| (b) | Contributions | ||
| Under the 401(k) portion of the Plan, participants may contribute up to 50% of annual compensation on a pretax basis, as defined in the Plan, subject to regulatory limitations, and participants age 50 or older can make catch-up contributions 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 1% of eligible compensation contributed by a participant and 50% of the next 2% to 5% of eligible compensation contributed by a participant beginning on the first day of the calendar quarter following the completion of 12 months of service and 1,000 hours. All 100% commission associates of THD At-Home Services, Inc. are not eligible to receive matching contributions. Associates of Williams Bros. Lumber Company, LLC (Williams Bros.) and Cox Lumber Company were eligible for matching contributions of 25% of the first 6% of |
4
| compensation contributed by a participant. Williams Bros. and Cox Lumber Company were included in the sale of HD Supply. Additional amounts may be contributed at the option of the Administrative Committee. The default for investment of the Company’s matching contribution if no direction is given is the participant’s current investment election with respect to elective contributions. If the participant has made no affirmative investment election with respect to elective contributions, the default was the Barclays Global Investors (BGI) Balanced Fund prior to November 6, 2008 and the appropriate LifePath Fund based on the participant’s age effective on and after November 6, 2008. | |||
| Certain former participants in the Maintenance Warehouse FutureBuilder were eligible for supplemental annual matching contributions through December 27, 2007. Eligible associates employed on or before July 1, 1999 who were actively employed by HD Supply at December 31 of each calendar year received a matching contribution equal to 4.5% of annual compensation. Additionally, eligible associates of HD Supply employed on or before July 1, 2004 who were actively employed by HD Supply at December 31 of each calendar year received a matching contribution equal to 2.5% of annual compensation. Participants were required to continually contribute at least 3% of compensation to the Plan in order to remain eligible for the supplemental annual matching contributions. Participants designated by the Company as highly compensated associates were not eligible to receive the supplemental annual matching contributions. The obligation to make supplemental annual matching contributions for the 2007 plan year transferred to HD Supply’s defined contribution plan at the end of 2007. | |||
| Employee stock ownership contributions were made solely by the Company and at the discretion of the Company’s Board of Directors (ESOP contributions). The Company made its last ESOP contribution in February 1999. The Plan was amended to eliminate ESOP contributions for plan years beginning on or after January 1, 2007. | |||
| (c) | Participant Accounts | ||
| The Plan maintains a separate account for each participant, to which contributions and investment performance are allocated. |
5
| (d) | Vesting | ||
| Under the 401(k) portion of the Plan, participants are immediately vested in their contributions and net value changes thereon. Vesting in the Company’s matching and discretionary contributions and net value changes thereon is generally based on years of vesting service. A participant is 100% vested in the Company’s matching contributions after three years of vesting service. | |||
| Vesting for the ESOP contributions and earnings or losses thereon is based on years of service, as follows: |
| Vesting | ||||
| Years of service | Percentage | |||
3
|
20 | % | ||
4
|
40 | |||
5
|
60 | |||
6
|
80 | |||
7 or more
|
100 | |||
| A participant becomes 100% vested in the Company’s matching and ESOP contributions and net value changes thereon upon death, attaining age 65 while still employed, total or permanent disability, or if the Plan is terminated. | |||
| (e) | Distributions | ||
| Upon death, disability, termination of service for any other reason, or attaining age 59 1/2, participants or beneficiaries may elect to receive a lump-sum payment of their vested account balance at fair value on the date of distribution in the form of cash or Company stock in accordance with the terms of the Plan. | |||
| (f) | Participant Loans | ||
| Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 minus the highest outstanding loan balance in the preceding 12 months or 50% of their vested account balance. Loan terms range from one to four years. The loans bear interest at a rate equal to the prime rate plus 1% at the time of loan. Certain loans with terms greater than four years remain outstanding, including certain loans rolled over from retirement plans of acquired companies. Participant loans are carried at amortized cost. | |||
| (g) | Forfeited Accounts | ||
| Forfeited nonvested accounts are used first to reduce Plan expenses and then to reduce future employer contributions. In 2008 and 2007, $3,992,382 and $5,460,223, respectively, in forfeitures were used to reduce Plan expenses. |
6
| (h) | Administrative Expenses | ||
| Certain administrative expenses of the Plan are paid by the Company. These costs include legal, accounting and certain administrative fees. Expenses paid by the Plan include all other administrative costs not paid by the Company. |
| (2) | Summary of Significant Accounting Policies | |
| The following is a summary of significant accounting policies followed by the Plan in preparing its financial statements. |
| (a) | Basis of Presentation | ||
| The accompanying financial statements have been prepared on the accrual basis of accounting. | |||
| (b) | Investment Valuation and Income Recognition | ||
| Shares of registered investment companies, the TimesSquare Mid-Cap Growth Strategy Fund and the Schwab Personal Choice Retirement Account (PCRA) are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. The JP Morgan Stable Value Fund is valued as described below. All other investments in units of collective trusts are valued at the respective net asset values as reported by such trusts. 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. The investment in short-term investment funds of The Northern Trust Company is reported at fair value as determined by The Northern Trust Company based on the quoted market prices of the securities in the fund. | |||
| The JP Morgan Stable Value Fund invests primarily in guaranteed investment contracts and synthetic investment contracts with insurance companies which are fully benefit-responsive. These investments are presented at the fair value of units held by the Plan as of December 31 in the statements of net assets available for benefits including separate disclosure of the adjustment to contract value, which is equal to principal balance plus accrued interest. As provided in Financial Accounting Standards Board (FASB) Staff Position FSP AAG INV-1 and Statement of Position No. 94-4-1, “Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans” (the FSP), an investment contract is generally valued at contract value, rather than fair value, to the extent it is fully benefit-responsive. The fair value of fully benefit-responsive investment contracts is calculated using the market approach discounting methodology which incorporates the difference between current market level rates for contract level wrap fees and the wrap fee being charged. The difference is calculated as a dollar value and discounted by the prevailing interpolated swap rate as of period-end. Additional information on the JP Morgan Stable Value Fund is discussed in Note 3. |
7
| Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. 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, credit, and individual country and currency 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 schedules. | |||
| (c) | Payment of Benefits | ||
| Benefits are recorded when paid. | |||
| (d) | Use of Estimates | ||
| The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Administrative Committee of the Plan to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions to and deductions from net assets available for benefits during the reporting period. Actual results could differ from those estimates. | |||
| (e) | Fair Value of Financial Instruments | ||
| The Plan’s investments are stated at fair value, with the exception of the Plan’s fully benefit-responsive investment contracts which, though stated at fair value, are adjusted to contract value within the Statements of Net Assets Available for Benefits. In addition, the carrying amount of receivables and liabilities is a reasonable approximation of the fair value due to the short-term nature of these instruments. |
| (3) | JP Morgan Stable Value Fund | |
| The Plan invests in a separate account, the JP Morgan Stable Value Fund (the Fund), which owns fully benefit-responsive investment contracts. As a result of the FSP, the Plan’s investment in the Fund is presented at fair value in the Statements of Net Assets Available for Benefits with an adjustment from fair value to contract value of $38,144,690 and $1,753,776 as of December 31, 2008 and 2007, respectively. The fair value of the Fund as of December 31, 2008 and 2007 was $436,036,810 and $248,208,004, respectively. The fair value of the Fund equals the total of the fair value of the underlying assets plus the fair value of the wrap contract, which is calculated using the market approach discounting methodology, which incorporates the difference between current market level rates for the contract level wrap fees and the wrap fee being charged. The difference is calculated as a dollar value and discounted by the prevailing interpolated swap rate as of year end. | ||
| A synthetic guaranteed investment contract (GIC), also known as a wrap contract, is an investment contract issued by an insurance company or other financial institution, designed to provide a contract value “wrapper” around a portfolio of bonds or other fixed income securities that are owned by the Fund. The assets underlying the Fund’s wrap contracts are units of fixed income collective investment trusts (Aegon, Bank of America, Royal Bank of Canada and State Street Bank with credit ratings of AA, AA-, AA- and AA, respectively). The wrap contracts are obligated to provide an interest rate not less than zero. These |
8
| contracts provide that realized and unrealized gains and losses on the underlying assets are not reflected immediately in the net assets of the Fund, but rather are amortized, over the duration of the underlying assets, through adjustments to the future interest crediting rate. The issuer guarantees that all qualified participant withdrawals will occur at contract value. | ||
| The Plan’s interest in the underlying fixed income collective investment trusts in which the Fund invests is calculated by applying the Fund’s ownership percentage in these underlying fixed income collective investment trusts to the total fair value of the underlying fixed income collective investment trusts. The underlying assets owned by the Fund consist primarily of readily marketable fixed income securities with quoted market prices. | ||
| The interest crediting rate is determined quarterly and is primarily based on the current yield to maturity of the covered investments, plus or minus amortization of the difference between the market value and the contract value of the covered investments over the duration of the covered investments at the time of computation. There is no relationship between future crediting rates and the adjustments to contract value reporting in the Statements of Net Assets Available for Benefits. | ||
| The average market yield of the Fund for the years ended December 31, 2008 and 2007 was 5.48% and 6.63%, respectively. The average yield earned by the Fund that reflects the actual interest credited to participants for the years ended December 31, 2008 and 2007 was 3.27% and 5.52%, respectively. | ||
| (4) | Tax Status | |
| The Internal Revenue Service (IRS) has determined and informed the Company by a letter dated April 9, 2002, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code (IRC), and, therefore, is exempt from federal income taxes. 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. | ||
| (5) | Plan Termination | |
| Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and terminate the Plan subject to the provisions of ERISA. In the event the Plan is terminated, participants will become 100% vested in their accounts. | ||
| (6) | Investments | |
| The Plan’s investments are held in a Master Trust by the Trustee of the Plan, The Northern Trust Company, as more fully described in Note 7. Plan participants may direct the investment of their accounts on a daily basis in a number of investment options available under the Plan. A description of the assets of the Plan’s investment options follows: |
| • | The Home Depot, Inc. Common Stock Fund — Fund invests in common stock of The Home Depot, Inc. Effective September 17, 2008, this fund was frozen with respect to new contributions. | ||
| • | JP Morgan Stable Value Fund — Fund is a separate account that invests in high quality fixed income securities. | ||
| • | TimesSquare Mid-Cap Growth Strategy Fund — Fund is a separate account that invests in common and preferred stock of U.S. mid-sized companies that display strong growth prospects. |
9
| • | BGI Equity Index Stock Fund — Fund is a collective trust that invests in the common stocks included in Standard & Poor’s 500 Index. | ||
| • | Dodge & Cox Stock Fund — Fund invests in a registered investment company that invests in common stocks of companies that the fund’s managers believe to be temporarily undervalued but have favorable long-term growth prospects. | ||
| • | Dodge & Cox International Stock Fund — Fund invests in a registered investment company that invests in a diversified portfolio of equity securities issued by non-U.S. companies, which will provide long-term growth. | ||
| • | T. Rowe Price Small-Cap Stock Fund — Fund invests in a registered investment company that invests in common stocks of small, fast-growing companies that are believed to offer strong potential earnings growth or are undervalued. | ||
| • | BGI LifePath Portfolios — Fund is a collective trust that invests in stocks, bonds and money market instruments. | ||
| • | BGI U.S. Debt Index Fund — Fund is a collective trust that invests in U.S. Treasury and federal agency bonds, corporate bonds, residential and commercial mortgage-backed securities and asset-backed securities. | ||
| • | BGI Balanced Fund — Fund is a synthetic fund that invests approximately 60% of its assets in the BGI Equity Index Stock Fund (which invests in equity securities — stocks) with the remainder of the fund invested in the BGI U.S. Debt Index Fund (which invests in fixed income securities — bonds). | ||
| • | Schwab PCRA — The brokerage window provides the freedom to invest in a wide range of investment choices, including no-load, no transaction-fee mutual funds, stocks listed on major exchanges, exchange-traded funds and individual bonds, certificates of deposit and other fixed income investments. The brokerage window was first offered as of September 17, 2008. |
10
| 2008 | 2007 | |||||||
The Home Depot, Inc. Common Stock Fund |
$ | 473,213,968 | $ | 588,128,841 | ||||
JP Morgan Stable Value Fund |
436,036,810 | 248,208,004 | ||||||
TimesSquare Mid-Cap Growth Strategy Fund |
222,636,902 | 373,443,847 | ||||||
BGI Equity Index Stock Fund |
185,498,131 | 300,449,399 | ||||||
BGI U.S. Debt Index Fund |
136,682,859 | 72,842,714 | ||||||
Dodge & Cox International Stock Fund |
132,628,496 | 278,130,070 | ||||||
Dodge & Cox Stock Fund |
129,137,304 | 258,145,270 | ||||||
| 2008 | 2007 | |||||||
Net (depreciation) appreciation in fair value: |
||||||||
The Home Depot, Inc. Common Stock Fund |
$ | (82,268,908 | ) | $ | (305,946,459 | ) | ||
Separate accounts |
(121,081,444 | ) | 48,587,526 | |||||
Collective trust funds |
(121,227,017 | ) | 19,597,632 | |||||
Registered investment funds |
(273,118,280 | ) | 1,332,130 | |||||
Brokerage window |
(289,899 | ) | — | |||||
Net depreciation in fair value |
$ | (597,985,548 | ) | $ | (236,429,171 | ) | ||
11
| (7) | Investment in Master Trust | |
| The assets of the Plan are invested in a Master Trust. At December 31, 2008 and 2007, the Plan’s interest in the net assets of the Master Trust was over 99%, with The Home Depot FutureBuilder for Puerto Rico holding the remaining interest. | ||
| Summarized financial information of the Master Trust as of December 31, 2008 and 2007 is as follows: |
| 2008 | 2007 | |||||||
Assets: |
||||||||
Investments |
||||||||
The Home Depot, Inc. Common Stock Fund |
$ | 474,421,344 | $ | 589,844,807 | ||||
Separate accounts |
660,675,703 | 623,188,604 | ||||||
Collective trust funds |
410,446,569 | 444,609,398 | ||||||
Registered investment funds |
332,472,633 | 648,136,559 | ||||||
Brokerage window |
6,328,356 | — | ||||||
Total investments |
1,884,344,605 | 2,305,779,368 | ||||||
Participant loans |
133,950,919 | 135,204,221 | ||||||
Receivables: |
||||||||
Participant contributions receivable |
— | 41,366 | ||||||
Employer contributions receivable |
— | 7,370 | ||||||
Due from broker |
193,677 | — | ||||||
Other receivables |
282,357 | 250,664 | ||||||
Total receivables |
476,034 | 299,400 | ||||||
Total assets |
2,018,771,558 | 2,441,282,989 | ||||||
Liabilities: |
||||||||
Accrued liabilities |
887,723 | 831,440 | ||||||
Due to broker |
— | 1,486,196 | ||||||
Total liabilities |
887,723 | 2,317,636 | ||||||
Net assets available for benefits before adjustments |
2,017,883,835 | 2,438,965,353 | ||||||
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts |
38,373,404 | 1,763,733 | ||||||
Net assets available for benefits |
$ | 2,056,257,239 | $ | 2,440,729,086 | ||||
12
| 2008 | 2007 | |||||||
Investment (loss) income: |
||||||||
Net (depreciation) appreciation in fair value of investments: |
||||||||
The Home Depot, Inc. Common Stock Fund |
$ | (82,526,024 | ) | $ | (306,720,817 | ) | ||
Separate accounts |
(121,161,528 | ) | 48,609,884 | |||||
Collective trust funds |
(121,384,778 | ) | 19,623,860 | |||||
Registered investment funds |
(273,389,536 | ) | 1,399,226 | |||||
Brokerage window |
(289,899 | ) | — | |||||
Net depreciation in fair value
of investments |
(598,751,765 | ) | (237,087,847 | ) | ||||
Dividends and interest income |
57,810,521 | 61,276,345 | ||||||
Total investment loss |
$ | (540,941,244 | ) | $ | (175,811,502 | ) | ||
| (8) | Fair Value Measurements | |
| In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (SFAS 157). The provisions of SFAS 157 are effective for the Plan as of January 1, 2008. SFAS 157 provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy under SFAS 157 are described below: | ||
| Level 1 — inputs use unadjusted quoted prices in active markets for identical assets or liabilities that the Plan has the ability to access. | ||
| Level 2 — inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets, and other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. | ||
| Level 3 — inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. | ||
| In instances where inputs used to measure fair value fall into different levels of the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. | ||
| The following table sets forth by level within the fair value hierarchy the Master Trust’s investments measured at fair value on a recurring basis, as of December 31, 2008. As required by SFAS 157, investments are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. |
13
| Investments at Fair Value as of December 31, 2008 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
The Home Depot, Inc. Common Stock Fund |
$ | 474,421,344 | $ | — | $ | — | $ | 474,421,344 | ||||||||
Separate accounts |
222,795,434 | 437,880,269 | — | 660,675,703 | ||||||||||||
Collective trust funds |
— | 410,446,569 | — | 410,446,569 | ||||||||||||
Registered investment funds |
332,472,633 | — | — | 332,472,633 | ||||||||||||
Brokerage window |
6,328,356 | — | — | 6,328,356 | ||||||||||||
Total investments at fair value |
$ | 1,036,017,767 | $ | 848,326,838 | $ | — | $ | 1,884,344,605 | ||||||||
| (9) | Related-Party Transactions | |
| Certain Plan investments include shares of common stock issued by The Home Depot, Inc., the Plan Sponsor. At December 31, 2008 and 2007, the Plan held a combined total of 20,556,645 and 21,831,063 shares valued at approximately $23.02 and $26.94 per share, respectively. Additionally, dividends received by the Plan include dividends paid by The Home Depot, Inc. totaling $19,516,079 and $21,370,042 for the years ended December 31, 2008 and 2007, respectively. These transactions constitute party-in-interest transactions since The Home Depot, Inc. is the Plan Sponsor. | ||
| 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 a Plan fiduciary, and therefore, these transactions constitute party-in-interest transactions. | ||
| (10) | Plan Amendments and Other Plan Changes | |
| Effective January 1, 2007, the Plan was amended and restated to incorporate all prior amendments, as required for submission of the Plan for favorable determination by the IRS for all changes in the law since GUST, including the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), final Section 401(k) and 401(m) Treasury regulations, and changes to Section 401(a)(9) of the IRC. | ||
| Effective August 30, 2007, the Plan was amended to (i) allow for the continued participation of associates of HD Supply and its subsidiaries following the sale of that business by The Home Depot, Inc., (ii) add the provisions required under the IRC for a multiple employer plan (Items (i) and (ii) collectively, the “Transition Provisions”), (iii) authorize the Administrative and Investment Committees to remove and replace their own members, and (iv) add HD Guam, LLC as a participating employer. | ||
| Effective December 27, 2007, the Plan’s Administrative Committee authorized the transfer of assets and liabilities attributable to associates of HD Supply and its subsidiaries by means of a plan-to-plan transfer of assets and liabilities from the Plan to a newly-created HD Supply defined contribution plan. The amount of the transfer was $228,002,700. | ||
| Effective January 1, 2008, the Plan was amended to remove the Transition Provisions from the Plan. |
14
| The Plan was amended: (1) effective January 1, 2008, to incorporate new requirements provided for in final regulations under Section 415 of the IRC; (2) effective January 1, 2007, to eliminate ESOP contributions prospectively; (3) effective September 17, 2008, to freeze contributions to The Home Depot, Inc. Common Stock Fund, add a brokerage window as an investment option and to allow in-kind distributions from the brokerage window; and (4) effective January 1, 2009, to grant eligibility for matching contributions to associates of THD At-Home Services, Inc. who are paid on a 100% commission basis under the same terms as other associates. | ||
| (11) | Reconciliation of Financial Statements to Form 5500 | |
| The following is a reconciliation of net assets available for plan benefits as presented in these financial statements to the balance per Form 5500 as of December 31 (as expected to be filed for 2007 and as filed for 2006): |
| 2008 | 2007 | |||||||||||
Net assets available for plan benefits |
$ | 2,051,022,410 | $ | 2,435,549,116 | ||||||||
Deemed distributions |
(700,290 | ) | (684,478 | ) | ||||||||
Participant withdrawals payable |
(1,075,203 | ) | (1,726,245 | ) | ||||||||
Adjustment from contract value to fair value for fully benefit-responsive investment contracts |
(38,144,690 | ) | (1,753,776 | ) | ||||||||
Net assets available for plan benefits - Form 5500 |
$ | 2,011,102,227 | $ | 2,431,384,617 | ||||||||
| Deemed distributions are defaulted and unpaid participant loans. | ||
| The following is a reconciliation of changes in net assets available for plan benefits as presented in these financial statements and Form 5500 as of December 31 (as expected to be filed for 2008 and as filed for 2007): |
| 2008 | 2007 | |||||||
(Decrease) increase in net assets per statement of changes
in net assets available for plan benefits |
$ | (384,526,706 | ) | $ | (252,357,917 | ) | ||
Deemed distributions |
(15,812 | ) | (150,882 | ) | ||||
Participant withdrawals payable |
651,042 | (1,726,245 | ) | |||||
Adjustment from contract value to fair value for fully benefit-responsive investment contracts |
(36,390,914 | ) | (1,753,776 | ) | ||||
Assets transfer |
— | 228,002,700 | ||||||
Net loss — Part II Line K Form 5500 |
$ | (420,282,390 | ) | $ | (27,986,120 | ) | ||
| (12) | Nonexempt transactions | |
| For the plan year ended December 31, 2007, there were isolated, immaterial instances in which subsidiaries of the Company failed to remit participant contributions and loan repayments to the Plan in the time required by the Department of Labor, representing a nonexempt loan of funds to the subsidiaries from the Plan. These late contributions and loan repayments have been corrected, and the Plan’s Administrative Committee is in the process of self-reporting these transactions to the IRS on Form 5330 and paying the applicable excise taxes. |
15
| (b) | ||||||||
| Relationship to Plan, | (d) | |||||||
| (a) | Employer or other | (c) | Amount on | |||||
| Identity of party invloved | Party in interest | Description of transactions | Line 4(a) | |||||
The Home Depot, Inc.
|
Plan sponsor | Employees deferral not
deposited to Plan in a timely manner |
$ | 7,371 | ||||
16
| Description | Current | |||||||||||
| Identity of issue | of investment | value | ||||||||||
*
|
The Home Depot, Inc. Common Stock | 20,556,645 | shares of common stock | $ | 473,213,968 | |||||||
| JP Morgan Stable Value | 436,036,810 | units of separate account | 436,036,810 | |||||||||
| TimesSquare Mid-Cap Growth Strategy Fund | 8,669,661 | units of separate account | 222,636,902 | |||||||||
| BGI Equity Index Stock Fund | 6,344,651 | units of collective trust | 185,498,131 | |||||||||
| Dodge & Cox Stock Fund | 1,736,417 | shares of registered investment company | 129,137,304 | |||||||||
| Dodge & Cox International Stock Fund | 6,056,096 | shares of registered investment company | 132,628,496 | |||||||||
| T. Rowe Price Small-Cap Stock Fund | 3,630,138 | shares of registered investment company | 70,352,082 | |||||||||
| BGI LifePath Portfolios | 8,328,612 | units of collective trust | 69,390,665 | |||||||||
| BGI U.S. Debt Index Fund | 8,954,032 | units of collective trust | 136,682,859 | |||||||||
*
|
The Northern Trust Company Coltv Short-Term Investment Fund |
18,273,712 | units of collective trust | 18,273,712 | ||||||||
| Schwab PCRA | 6,328,356 | brokerage window | 6,328,356 | |||||||||
| Participant loans | loans with interest rates generally ranging | |||||||||||
| from 5.0% to 10.5% and maturity dates through January 17, 2013 | 133,108,393 | |||||||||||
Total
|
$ | 2,013,287,678 | ||||||||||
17
| Date: June 26, 2009 | The Home Depot FutureBuilder | |||||
| /s/ Richard I. Johnson | ||||||
| By: | Richard I. Johnson | |||||
| Member of The Home Depot | ||||||
| FutureBuilder Administrative Committee | ||||||
| /s/ Rebecca I. Flick | ||||||
| By: | Rebecca I. Flick | |||||
| Member of The Home Depot | ||||||
| FutureBuilder Administrative Committee | ||||||
| /s/ Timothy A. Hourigan | ||||||
| By: | Timothy A. Hourigan | |||||
| Member of The Home Depot | ||||||
| FutureBuilder Administrative Committee | ||||||
17
| Exhibit | ||
| Number | Description | |
23.1
|
Consent of Independent Registered Public Accounting Firm |