ITEM 1.  BUSINESS

The Home Depot, Inc. is the world's largest home improvement retailer and the
second largest retailer in the United States based on net sales volume for
fiscal 2000. At the end of our 2000 fiscal year, we were operating 1,103 Home
Depot(R) stores and 26 EXPO Design Center(R) stores. A description of these two
types of stores is as follows:

-        HOME DEPOT STORES: Home Depot stores sell a wide assortment
of building materials and home improvement and lawn and
garden products and provide a number of services. Home Depot
stores average approximately 108,000 square feet of enclosed
space, with an additional approximately 24,000 square feet in
the outside garden area. At fiscal year end, we had 1,096
Home Depot stores located throughout the United States and
Canada, as well as seven in South America.

products and services primarily for design and renovation
projects. Unlike Home Depot stores, EXPO Design Center stores
do not sell building materials and lumber. Rather, EXPO
Design Center stores offer interior design products, such as
kitchen and bathroom cabinetry, tiles, flooring and lighting
fixtures, and installation services. The prototypical EXPO
Design Center is approximately 100,000 square feet.

Additionally, at the end of fiscal 2000 we were operating four Villager's(R)
Hardware test stores in New Jersey. Villager's Hardware stores offer products
for home enhancement and small projects. We also have one test store called The
Home Depot Floor Store(SM) in Texas that sells only flooring products.

We also offer products through two direct marketing subsidiaries. Our
Maintenance Warehouse(R) subsidiary is a leading direct mail marketer of
maintenance, repair and operations products serving primarily the multi-family
housing and lodging facilities management market. The company fills orders
through its 19 distribution centers, which are located throughout the United
States. During fiscal 2000, Maintenance Warehouse expanded its operations in
Texas, Arizona and Georgia through the acquisition of N-E Thing Supply Company,
Inc. National Blinds & Wallpaper(SM), a wholly owned subsidiary, is a telephone
mail order service for wallpaper and custom window treatments.

We also operate two wholly owned subsidiaries, Georgia Lighting, Inc. and Apex
Supply Company, Inc. Georgia Lighting(R), a leading specialty lighting
designer, distributor and retailer, has six retail locations in Georgia. Apex
Supply Company is a wholesale supplier of plumbing, HVAC, appliances and other
related professional products with 22 locations in Georgia, Tennessee and South
Carolina.

Our Store Support Center (corporate office) is located at 2455 Paces Ferry
Road, Atlanta, Georgia 30339-4024. The telephone number is (770) 433-8211.

RETAIL BUSINESSES

HOME DEPOT STORES

OPERATING STRATEGY. The operating strategy for Home Depot stores is to offer a
broad assortment of high-quality merchandise and services at competitive prices
using highly knowledgeable, service-oriented personnel and aggressive
advertising. We believe that our associates' knowledge of products and home
improvement techniques and applications is very important in our marketing
approach and our ability to maintain customer satisfaction. We regularly check
our competitors' prices to ensure that our prices are competitive within each
market.

CUSTOMERS. Home Depot stores serve three primary customer groups:

typically homeowners who purchase products and complete their
own projects and installations. To complement the in-store
expertise of our associates, Home Depot stores offer many
D-I-Y "how-to" clinics taught by associates and merchandise
vendors.

typically homeowners who purchase materials themselves and
hire third parties to complete the project and/or
installation. We offer B-I-Y customers installation services
for a variety of products through third party contractors.

-        PROFESSIONAL CUSTOMERS: These customers are professional
repair remodelers, general contractors and tradesmen. In many
stores we offer a variety of programs to these professional
customers, including additional delivery and will-call
services; dedicated staff; extensive merchandise selections;
and expanded credit programs, all of which we believe
increase sales.

PRODUCTS. A typical Home Depot store stocks approximately 40,000 to 50,000
product items, including variations in color and size. Each store carries a
wide selection of high-quality and nationally advertised brand name
merchandise. The following table shows the percentage of sales of each major
product group for each of the last three fiscal years:

<CAPTION>
Percentage of Sales for
Fiscal Year Ended

Product Group

We buy our store merchandise from vendors located throughout the world. No
single vendor accounts for more than six percent of our total purchases, and we
are not dependent on any single vendor. Most of our merchandise is purchased
directly from manufacturers, which eliminates "middleman" costs. We believe
that competitive sources of supply are readily available for substantially all
of the products we sell in Home Depot stores.

We maintain a global sourcing merchandise program to source high-quality
products directly from overseas manufacturers, which gives our customers a
broader selection of products and better values while enhancing our gross
margin. Our product development managers travel internationally to identify
opportunities to purchase items directly for our stores. This enables us to
improve product quality, to import products not currently available to our
customers and to offer at a lower price products that would otherwise be
purchased from third party importers. We currently source products from more
than 260 manufacturers in approximately 35 countries.

To complement the established national brand name products we offer, we have
formed strategic alliances with vendor partners to market products under brand
names that are only offered through The Home Depot. At the end of fiscal year
2000, we offered products under more than 30 proprietary and other exclusive
brands, including Thomasville(TM) kitchen and bathroom cabinets; RIDGID(R)
power tools; Behr Premium Plus(R) paint; Mill's Pride(R) cabinets; GE
SmartWater(TM) water heaters; and Vigoro(R) fertilizer. In the future, we may
consider additional strategic alignments with other vendors to offer products
under proprietary brand names. Additionally, we will continue to assess
opportunities to expand the range of products available under existing
proprietary brands.

INSTALLED SALES SERVICES. Home Depot stores offer a variety of installed sales
programs through its At-Home Services business. This service targets the B-I-Y
customer who will select and purchase materials for a project and prefers the
Company to provide professional installation. We implement our installed sales
programs through approximately 6,800 independent qualified contractors in the
U.S. and Canada. These programs include the installation of carpeting, hard
flooring, cabinets, solid surface countertops, exterior doors, garage doors,
roofing, siding and windows. During fiscal 2000, we also began testing a
residential HVAC program in Tennessee and Georgia and plan to expand the
offering during fiscal 2001.

IN-STORE INITIATIVES. We continually assess our business to find opportunities
to increase customer loyalty, thereby increasing sales. Accordingly, we
implemented or expanded a number of in-store initiatives in Home Depot stores
during fiscal 2000, including:

-        Professional Business Customer Initiative. We are committed
to being the supplier of choice to a variety of professional
customers, including certain repair remodelers, carpenters,
plumbers, painters, electricians, building maintenance
professionals and designers. During fiscal 2000, we continued
to expand an initiative that adds service-related programs to
our stores that are designed to increase sales to
professional customers. Stores participating in the program
add associates at a sales desk dedicated to providing more
personalized service to professional customers, including
managing accounts and taking and filling orders for pick-up
or same-day delivery. Additionally, during the hours when
professionals typically shop, these stores assign sales
associates in certain departments to assist these customers.
To better serve our professional customers, we also increase
quantities of existing products typically purchased by

professionals in bulk quantities and offer certain items in
each department packaged in bulk to offer additional savings.
While aimed at the professional customer, this program also
enables us to better serve our D-I-Y customer with improved
customer service, including delivery and will-call services,
expanded credit programs and additional merchandise. Through
this initiative, we have identified best practices in serving
our professional customers that are being implemented in many
of our stores without material additional costs. By the end
of fiscal 2000, we had expanded the professional customer
initiative into 29 markets with approximately 165 stores. We
anticipate that during fiscal year 2001, we will expand this
initiative to approximately 335 additional stores.

-        SPI Initiative. We began testing the Service Performance
Improvement, or "SPI," initiative during fiscal 2000 in
approximately 51 stores in three markets. The program focuses
on making it easier to shop in our stores while emphasizing
safety and improving customer service. Stores that have
implemented the initiative assign some associates specific
tasks while others focus on assisting customers.
Additionally, these stores schedule associates to receive
shipments and stock merchandise when our stores are closed or
during hours when they have fewer customers. We believe this
separation of assignments will allow us to provide better
customer service while improving labor productivity, managing
inventory more efficiently and increasing sales. We currently
anticipate rolling this program out to most of our stores
during fiscal 2001.

-        Appliance Sales. During fiscal 2000, we completed the
roll-out of our appliance sales program to most of our stores
in the U.S. Through this program we sell appliances
manufactured by General Electric(R), Maytag(R) and other
manufacturers. We display and stock the more popular
appliances in our stores and offer the ability to special
order over 2,000 additional products through computer kiosks
located in the store. Through the computer kiosks we can
check inventory and arrange for delivery to the customer
directly from the manufacturer as soon as 48 hours after the
order is placed. During fiscal 2001, we plan to expand the
appliances we sell and to continue to test new formats for
selling appliances.

-        Tool Rental. As part of our efforts to satisfy a broad range
of the needs of our professional customers and our D-I-Y
customers, we offer a tool rental service in certain stores.
Under this program, we rent approximately 200
commercial-quality tools in ten categories, including saws,
floor sanders, generators, gas powered lawn equipment and
plumbing tools. Customers can lease the tools on an hourly,
daily, weekly or monthly basis. Our associates who work in
the tool rental area receive special training concerning the
use and maintenance of the tools. As of January 28, 2001, we
offered tool rental service in approximately 342 stores
compared to 150 stores at the end of fiscal 1999. During
fiscal 2001, we anticipate expanding tool rental services
into additional stores, and we believe that ultimately tool
rental centers will be in approximately 60% of our stores. We
believe that offering this service increases the sales of
related merchandise without reducing the sales of equipment
similar to that available for rental.

-        Special Order Center Test. Currently, the special order
center processes water heater orders nationwide through a
toll-free number and special order blinds and wallpaper
through a separate toll-free number that is available to
approximately 95 stores in three markets. Stores currently
participating in the program have experienced increased water
heater sales and reductions in customer transaction times for
placing orders for blinds and wallpaper.

-        Customer Education Programs. We offer several programs to
enhance the skills and confidence of our D-I-Y customers. Our
associates and vendors teach "how-to" clinics that focus on
D-I-Y projects, such as installing garbage disposals, laying
patio pavers or building a deck. In addition to the clinics,
we offer Home Depot University(SM), which presents four-week
modules allowing our customers to learn about several facets
of a home improvement topic. For example, a room enhancement
module may provide instruction on paint, wallpaper and window
treatments. Through The Home Depot's Kids Workshop(SM)
program, children are instructed in tool safety and complete a
small project, such as building a birdhouse or tool box. We
believe that these types of educational programs increase our
sales by encouraging our customers to undertake more projects,
differentiating us from our competition and reinforcing our
position as experts in home improvement.

STORE GROWTH

United States. At the end of fiscal 2000, we were operating 1,029 Home Depot
stores in the United States, including Puerto Rico. During fiscal 2000 in the
U.S., we opened 173 new Home Depot stores and relocated eight existing Home
Depot stores. Although these new store openings occurred primarily in existing
markets, we continued our geographic expansion by opening stores in a number of
new markets. We currently anticipate opening approximately 200 new stores and
relocating nine existing stores during fiscal 2001.

To increase customer service levels, gain incremental sales and enhance
long-term market penetration, we often open new stores near the edge of the
market areas served by existing stores. While these openings may initially have
a negative impact on comparable store-for-store sales, we believe this
"cannibalization" strategy increases customer satisfaction and overall market
share by reducing delays in shopping, increasing utilization by existing
customers and attracting new customers to more convenient locations. During
fiscal 2000, approximately 30% of our stores were cannibalized by new store
openings.

Canada. At the end of fiscal 2000, we were operating 67 Home Depot stores in
seven Canadian provinces. Of these stores, 14 were opened during fiscal 2000,
including our first stores in Quebec and Nova Scotia. During fiscal 2001, we
plan to open approximately 13 additional stores in Canada. Our Canadian stores
are operated through a wholly owned Canadian subsidiary of The Home Depot.

South America. At the end of fiscal 2000, we were operating seven Home Depot
stores in Chile and Argentina, and we anticipate opening additional stores in
South America during fiscal 2001. We operate our Chilean Home Depot stores
through a joint venture with S.A.C.I. Falabella, a leading department store
retailer in Chile. Our controlling share of the joint venture is 66.67%.

Our Argentina stores are operated through a wholly owned Argentine subsidiary.
We have offices in both Argentina and Chile from which day-to-day operations
are handled by a management team comprised of local nationals and seasoned U.S.
Home Depot managers.

EXPO DESIGN CENTER STORES

OPERATING STRATEGY. The operating strategy for our EXPO Design Center stores is
to offer complete interior design services, high-quality, competitively priced
products and installation services to assist our customers in their home decor
and remodeling projects. Each EXPO Design Center store features up to eight
different showrooms, each with full-size displays to help customers visualize
the end result of possible interior design projects. To assist our customers,
we employ associates who provide exceptional customer service and who have
expertise in designing, planning and completing projects.

CUSTOMERS. Typically, customers at EXPO Design Center stores are middle to
upper income B-I-Y customers, who purchase merchandise for installation by
others. Accordingly, we offer installation services for most of the products we
sell at these stores.

PRODUCTS. EXPO Design Center stores offer interior design products and
installation services in the following core product categories:

EXPO Design Center stores offer a broad range of merchandise in an effort to
meet all the needs of shoppers whose interior design preferences may go beyond
the items available in a Home Depot store. While there is minimal overlap
between the products offered in Home Depot stores and EXPO Design Center
stores, those products available at EXPO Design Center stores are typically
higher-end or more unique items. In addition to nationally advertised brand
name products, we also offer items that must be special ordered or that are
typically offered through showrooms open only to design professionals.

STORE GROWTH. At the end of fiscal 2000, we were operating 26 EXPO Design
Center stores, eleven of which were opened that year. We currently anticipate
opening 17 additional stores in fiscal 2001. These new stores are expected to
average approximately 100,000 square feet and will incorporate a showroom
environment.

IN-STORE SERVICES. We have associates at our EXPO Design Center stores to
assist with every phase of a project. Certified kitchen and bath designers are
on staff. We also have design professionals to help our customers design
lighting, tile and flooring, custom upholstery and bedding, custom closets and
window treatments. Installation services are available for most

products at EXPO Design Center stores, including kitchens, baths, flooring,
wallpaper, tile, lighting fixtures and window treatments. Our project managers
ensure that the products are available and then schedule licensed third party
contractors to complete the work. We warrant the workmanship of each
installation for as long as the customer owns the home.

GEORGIA LIGHTING

We acquired our wholly owned subsidiary Georgia Lighting in June 1999. Georgia
Lighting is a leading specialty lighting designer, distributor and retailer
based in Atlanta. The company, which has six retail locations, offers an
extensive collection of decorative lighting fixtures, supplies, accents and
accessories to commercial and retail customers. We believe that the acquisition
of Georgia Lighting has allowed us to strengthen our sourcing, training and
merchandising in lighting for both The Home Depot and EXPO Design Center
stores.

APEX SUPPLY COMPANY

In January 2000, we acquired Apex Supply Company, a wholesale distributor of
plumbing, HVAC, appliances and other related products. The Company offers these
products through 22 locations in Georgia, Tennessee and South Carolina and
employs approximately 570 associates. Apex assisted us with the development of
our HVAC program, and we believe this acquisition will help us to increase our
penetration of the professional plumbing trades and to be able to handle
special orders for plumbing products more efficiently in Home Depot stores.

VILLAGER'S HARDWARE STORES

During fiscal 1999, we opened the first two Villager's Hardware test stores,
and in fiscal 2000 we opened an additional two stores, all of which are in New
Jersey. These stores stock approximately 40,000 items, including variations in
color and size, including hardware, fasteners, tools, plumbing, electrical and
seasonal, as well as a broad selection of home enhancement products, including
paint and wallpaper, window treatments, lighting, storage, housewares and
giftware. We believe that the primary focus for these stores will be home
enhancement and small projects. Each Villager's Hardware store has
approximately 35,000 to 40,000 square feet of selling space in a retail
environment, emphasizing customer service and education. During fiscal 2001, we
will continue to analyze the results of this test.

THE HOME DEPOT FLOOR STORE

During fiscal 2000, we opened a test store in Plano, Texas that offers flooring
products. The Floor Store's merchandise assortment includes carpet, ceramic,
wood, laminate and vinyl flooring. During fiscal 2001, we will continue to
analyze the results of this test.

INTERNET

Our website is located at www.homedepot.com. The site offers information about
projects and our products, calculators to estimate the amount and kinds of
materials needed to complete a project, as well as information about our
company. As with our stores, the focus of our website is customer service. We
believe our Internet site provides us with an opportunity to build

relationships with our customers, educate our customers, improve service and
increase incremental store sales.

During fiscal 2000, we began selling Home Depot products over the Internet in
three markets. We offer customers the products available at stores in their
local market on our website, and the products are priced based on the market in
which the customer lives. Orders are fulfilled from our stores, and customers
can either pick up their purchases or have them delivered. By integrating
Internet purchases with our stores, we hope to provide our customers with
greater flexibility and service. During fiscal 2001, we have begun to offer
products that can be shipped by United Parcel Service for sale through the
Internet in additional areas of the U.S.

DIRECT MARKETING SALES

We have two subsidiaries that sell merchandise through direct marketing:

-        MAINTENANCE WAREHOUSE. Our Maintenance Warehouse subsidiary is a
leading provider of maintenance, repair and operations products
primarily to the multi-family housing and lodging facilities
management market. Through its catalog, which is published
semi-annually, Maintenance Warehouse offers approximately 16,000
items, including variations in color and size. Maintenance Warehouse,
which employs approximately 1,100 people, emphasizes accurate order
taking, delivery and personalized service. Orders are typically placed
over the telephone, through a field sales representative or through
the company's website at www.mwh.com, are filled through one of
Maintenance Warehouses' 19 distribution centers and are shipped for
same-day or next-day delivery. During fiscal 2000, Maintenance
Warehouse expanded its operations in Texas, Arkansas and Georgia
through the acquisition of N-E Thing Supply Company, Inc.

products through telephone sales and over the Internet. The company
markets primarily through magazine advertising aimed at customers
seeking the lowest prices. The company maintains no inventory, but
rather acts as a broker to fill special order sales.

STORE SUPPORT SERVICES

Hardware store is equipped with a computerized point of sale system, electronic
bar code scanning system and a UNIX server. Store information is communicated
to the Store Support Center's computers via a land-based Asynchronous Transfer
Mode ("ATM") network in the U.S. and a frame relay network internationally.
These computers provide corporate, financial, merchandising and other back
office function support. We believe our systems provide efficient customer
check-out and returns, store-based inventory management, rapid order
replenishment, labor planning support and item movement information. Fast
registers, credit authorizations and check approvals expedite transactions in
our stores at a pace that we believe sets the standard for our industry. For
example, to better serve the increasing number of customers applying for credit
while in our stores, the charge card approval process time has been reduced to
less than 30 seconds.

We have implemented a mobile ordering system in our Home Depot stores using
portable carts with

computers to assist our associates in placing accurate orders for inventory.
Through the system, an associate on the sales floor can see the supply the
store has for a given item, review the suggested re-order quantities based on
the store's historical experience and place an order with the vendor. We
believe the system increases the efficiency and productivity of our associates
because it requires less time and fewer people to assess and order inventory.
We have also implemented a mobile signing system to help ensure that our
signing is consistent with our point-of-sale price data. Additionally, we are
in the process of rolling out additional systems tools to assist with labor
scheduling to help ensure the best possible customer service levels.

We are continuously assessing and upgrading our information systems to support
growth, reduce and control costs and enable our associates to make better
decisions. We continue to realize greater efficiency as a result of our
electronic data interchange ("EDI") program. Currently, most of our high volume
vendors are participating in the EDI program, which represents more than 70% of
our total transactional volume. EDI is a paperless system, which processes
orders from buying offices to vendors, alerts the stores when the merchandise
is to arrive and transmits invoice data from the vendors and freight carriers
to the Store Support Center.

ASSOCIATE DEVELOPMENT. As of January 28, 2001, we employed approximately
227,000 associates, of whom approximately 12,800 were salaried, with the
remainder compensated on an hourly basis. Approximately 74% of our associates
are employed on a full-time basis. To attract and retain qualified personnel,
we seek to maintain salary and wage levels equal to or above those of our
competitors in each market area. Store managers have access to information
regarding competitive salary rates in their respective markets.

We develop our training programs in a continuing effort to service the needs of
our associates. These programs are designed to increase associates' knowledge
of merchandising departments and products, including mandatory product
knowledge training classes, and to educate, develop and test the skills of
those associates who are interested in being promoted. Because our policy is to
promote or relocate current associates to serve as managers and assistant
managers for new stores, training and assessment of our associates is essential
to our growth. Our district managers and store managers typically meet with our
human resources associates to discuss the development of assistant managers and
certain department heads and consider possible candidates for promotion.

We have implemented programs in our stores to ensure that we hire and promote
the best qualified associates in a non-discriminatory way. These programs
integrate validated computerized tests for all applicants, as well as
specialized tests for certain positions. If an applicant passes the computer
test, he or she may be selected for a structured interview in which questions
to be asked are selected by the computer based on the answers given on the
original computer test. We also maintain a list of qualified associates who are
interested in a new assignment and of qualified outside applicants that can be
reviewed when positions become available.

We have never experienced a strike or any work stoppage, and we believe that
our employee relations are good. There are no collective bargaining agreements
covering any of our associates.

MARKETING. We are one of the nation's largest retail advertisers, and we
utilize all forms of mass media and selected forms of highly targeted media. We
also incorporate major sponsorships into our marketing plan, such as NASCAR(R),
the Olympic games, CBS College Football and home and garden shows. We extend
our reach and educate our customers through proprietary publications,

such as the Home Improvement 1-2-3(TM) series and the Style Ideas magazine.

We execute our marketing campaigns on both a national and local basis. Because
the vast majority of our stores are located throughout the United States and
Canada, we can achieve greater efficiencies than smaller retailers by using
national advertising. At the same time, we tailor the majority of our
advertising locally to respond to market differences, both in terms of products
and the competitive environment.

CREDIT SERVICES. Home Depot offers credit purchase programs to both
professional and D-I-Y and B-I-Y customers. In fiscal 2000, 2.6 million new
Home Depot credit accounts were opened, bringing the total number of Home Depot
account holders to almost 8 million. Proprietary credit card sales accounted
for approximately 19% of all Home Depot sales in fiscal 2000. During fiscal
2000, we rolled-out a program to all U.S. stores that gives our customers the
opportunity to apply for unsecured Home Improvement Loans to purchase products
and services in our stores. We believe that this loan program not only
increases large sales, such as kitchen and bath remodels, but also generates
incremental sales from our customers.

have registered or applied for registration of a variety of trade names,
service marks, trademarks and copyrights for use in our business, including The
Home Depot(R), the "Homer" (R) character, EXPO Design Center(R) stores, Hampton
Bay(R) fans, lighting and accessories and PremiumCut(TM) lumber. We regard our
intellectual property as having significant value and as being an important
factor in the marketing of the Company and our stores and direct marketing
efforts. We are not aware of any facts that could be expected to negatively
impact our intellectual property.

QUALITY ASSURANCE PROGRAM. For our globally sourced products that we directly
import, we have implemented a quality assurance program. Through this program,
we have established criteria for both vendor/factory and product performance,
which measure factors including product quality, timely shipments and fill
rate. The performance record is monitored relative to our requirements and is
also made available to the factories to allow them to strive for improvement.
This quality assurance program, which is applied to products directly imported
by Home Depot, has four components:

-        we authorize laboratories to test products prior to purchase
to ensure compliance with requirements;

-        we develop and document product requirements, based on test
results, applicable national and international standards and
features determined by our merchants;

-        we assess the capability of factories to manufacture quality
products that meet the expectations we have developed, as
well as to assess their compliance with Home Depot policies
on child labor; and

-        we routinely assess product quality and factory performance
by conducting inspections at the factory on shipments to
assure continued compliance with our product requirements,
and we reserve the right to perform random audits on child
labor policies.

LOGISTICS. We use several mechanisms to lower distribution costs and increase
our efficiencies. A large percentage of our merchandise is shipped directly
from our vendors to the stores. We operate a number of facilities to distribute
the remaining merchandise to our stores. For example, certain import products
require the use of distribution centers. Accordingly, we have seven import
distribution centers, located in the United States, Canada, Argentina and
Chile. Additionally, at the end of fiscal 2000, we had 27 lumber distribution
facilities in the United States and Canada to support the lumber demands of our
stores. We also operated one cross-docking transit facility, and we currently
plan to add several additional facilities during fiscal 2001. At these
facilities, we receive merchandise from manufacturers and immediately load it
onto trucks for delivery to our stores. We continually assess opportunities to
improve our distribution network to better satisfy the needs of our stores and
to lower costs.

SAFETY. We are committed to maintaining a safe environment for our customers
and associates. The Safety Department consists of a team of directors and
managers in the field focused primarily on education and training, as well as
an Atlanta-based team of dedicated safety resources who evaluate and implement
policies and processes Company-wide. The goal of the Safety Department is to
implement a safety program designed to engineer safety into the fabric of our
Company, establishing a "safety first" approach to all facets of our business.
Our Safety Department is responsible for managing the Company's safety program,
which is implemented in conjunction with store-level associates, store and
Division management, and the Human Resources and Merchandising Departments. The
primary focuses of our safety program are (1) to establish safety standards and
processes for all aspects of store operations and merchandising, (2) to
effectively train appropriate associates on all applicable standards, and (3)
to monitor compliance with established safety standards.

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 also 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
our market share in existing market areas. We believe that we are an effective
and significant competitor in our markets. Based on U.S. Census data estimates,
internal estimates and data provided by the Home Improvement Research
Institute, we believe that our market share in the U.S. and Canada, currently
defined as including the Do-It-Yourself/Buy-It-Yourself, Tradesmen,
Builders/General Contractors, Heavy Industrial, Repair and Remodeling and
Property Maintenance markets, is approximately 9.4%.

EXECUTIVE OFFICERS

Executive officers of Home Depot are elected by, and serve at the
pleasure of, the Board of Directors. The following provides information as of
January 28, 2001 concerning our executive officers:

BERNARD MARCUS, age 71, is a co-founder of The Home Depot and serves
as Co-Chairman of the Board. From inception of the Company in 1978 until 1997,
he served as Chairman of the Board and Chief Executive Officer, at which time
the title of CEO was passed on to Mr. Arthur M. Blank. In December 2000, Mr.
Marcus became Co-Chairman of the Board. Mr. Marcus serves as a director on the
boards of ChoicePoint Inc., and Westfield America, Inc.

ARTHUR M. BLANK, age 58, is a co-founder of The Home Depot and has
been Co-Chairman of the Board since December 2000. Prior thereto he had been
President and Chief Executive Officer since 1997 and President, Chief Operating
Officer and a director of The Home Depot since its inception in 1978. Mr. Blank
is a member of the Board of Directors of Cox Enterprises, Inc. and Post
Properties, Inc.

ROBERT L. NARDELLI, age 52, has been President and Chief Executive
Officer since December 2000. Prior thereto, Mr. Nardelli served as President
and Chief Executive Officer of GE Power Systems, a division of General Electric
Company, since 1995.

LAURENCE B. APPEL, age 39, has been Senior Vice President - Legal
since August 2000. Prior thereto, Mr. Appel was Vice President - Legal from
1999 until his most recent promotion. He joined the Company in 1997 as Senior
Counsel. From 1995 until 1997, he was an attorney with the firm of Altman,
Kritzer & Levick.

MARK R. BAKER, age 43, has been Executive Vice President -
Merchandising since October 2000, and prior to such time, had been Group
President and Senior Vice President - Merchandising since June 1999. From 1997
until 1999, he was President of the Midwest Division. Mr. Baker joined the
Company in 1996 as Vice President-Merchandising for the Midwest Division. Prior
to joining The Home Depot, from 1992 until 1996, Mr. Baker was an Executive
Vice President - Merchandising for HomeBase Inc. in Fullerton, California. In
March 2000, Mr. Baker was promoted to Executive Vice President and Chief
Operating Officer of Home Depot U.S. stores.

DENNIS J. CAREY, age 54, has been Executive Vice President and Chief
Financial Officer since May 1998. From 1994 to 1998, Mr. Carey was employed by
AT&T Corp., most recently as Vice President and General Manager - Corporate
Productivity and Mergers and Acquisitions. Prior to joining AT&T, Mr. Carey
held a number of positions during his 25 year tenure with General Electric
Company, including Vice President and General Manager of International
Operations.

JEFFREY W. COHEN, age 42, has been Division President - Service
Business since January 2001 and prior to that time he had been Group
President - Direct Marketing Businesses since May 1998. From January 1997 until
he joined The Home Depot, Mr. Cohen was President of Cohen & Associates
Management Consultants. From 1995 through 1997, he was Executive Vice President
of Harte-Hanks Direct Marketing, and prior thereto he was a Senior Vice
President - General

Manager at GE Capital Corp. He also spent seven years at American Express
Company where he held various marketing positions.

VERNON JOSLYN, age 49, has been Division President - Midwest since
January 2001, and he served as Group President from April 2000 until that time.
He previously served as President of the Northeast Division from 1996 until
April 2000. Mr. Joslyn also previously served as Vice President-Operations for
the Northeast Division from 1993 until 1996.

LYNN MARTINEAU, age 44, has been Division President - New Growth
Businesses since January 2001. He previously served as Group President from
April 2000 until he assumed his current position, was President - Western
Division from 1996 through 2000 and was Vice President - Merchandising for the
Southeast Division from 1994 through 1996.

LARRY M. MERCER, age 54, is Executive Vice President of Operations. He
is responsible for the functional leadership across the entire Home Depot
enterprise, both domestically since March 1996 and internationally since
January 2000. Prior to his promotion Mr. Mercer was President of the Northeast
Division for five years. Mr. Mercer joined the Company in 1979 as an Assistant
Store Manager and has risen through the ranks to his current position.

ANDERS C. MOBERG, age 51, has served as Division President -
International since January 2001. He joined the Company as Group President -
International and Global Resourcing in August 1999. Prior to such time, Mr.
Moberg was President of The IKEA Group for more than the previous five years.

BARRY L. SILVERMAN, age 52, has been Division President - EXPO Design
Center since January 2001 and prior thereto had served as Group President since
January 2000. Prior thereto he was President - Southwest Division since 1997,
and he was Vice President - Merchandising of the Northeast Division from 1991
through 1997.

CAROL B. TOME, age 44, has been Senior Vice President - Finance and
Accounting/ Treasurer since February 2000. She previously served as Vice
President and Treasurer from 1995 until her most recent promotion. From 1992
until 1995, when she joined The Home Depot, Ms. Tome was Vice President and
Treasurer of Riverwood International Corporation.

M. FAYE WILSON, age 63, has served as Senior Vice President - Risk
Management since January 2001 and has served on the Board of Directors for the
Company since 1992. Prior to assuming her current position, Ms. Wilson was
Senior Vice President - Value Initiatives since joining the Company in 1998.
From 1992 until joining The Home Depot, she was an Executive Vice President of
Bank of America NT&SA and Chairman and President of Security Pacific Financial
Services, Inc. Ms. Wilson serves as a director of Farmers Insurance Group.
