2. Cautionary Statement Pursuant to the Private
Securities Litigation Reform Act of 1995
Todayâs presentations, including any statements related to the state
of the home improvement market, the state of the housing market,
merchandising strategies, continuation of reinvestment plans and
other factors affecting earnings and sales and financial guidance for
Fiscal 2008 constitute quot;forward-looking statementsquot; as defined in the
Private Securities Litigation Reform Act of 1995. These statements
are based on currently available information and on our current
expectations and projections about future events. Undue reliance
should not be placed on such forward-looking statements as they
speak only as of the date hereof, and we undertake no obligation to
update these statements to reflect subsequent events or
circumstances except as may be required by law. Additional
information regarding risks and uncertainties is contained in our
periodic filings with the SEC, including our Annual Report on Form
10-K for the fiscal year ended February 3, 2008.
2
3. Housing Correction
8% Private Residential Investment
as a Share of GDP
3.5% as of Q208
3.5% as of Q208
7%
6%
Average = 4.8%
5%
4%
3.2%
3%
Q2 1982
2%
1948
1952
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
Note: Private Residential Investment includes new home construction, home improvement, and broker commissions
Source: Bureau of Economic Analysis (BEA)
3
4. Five Priorities: Progress Report
$180M Aprons on the Floor Initiative
~75% of stores $40M in success sharing checks
Net promoter score up 480 bps to 52.9%
Employing Programmatic Maintenance
Implemented Store Standards
Merchandising Execution Teams
Enhancing supply chain: operating 3 RDCs
Focused, deliberate roll-out in 2008
Improving in-stock
Implementing Merchandising Transformation
Employing a portfolio approach
Strengthening local execution
Using analytics to better understand customers
Re-define pro desk
4
5. The Evolution of our Capital
Efficiency Strategy
Focus Focus on Core Retail business and rationalize non-Core (e.g., disposition
of HD Supply, walk away from Enerbank); Invest in key priorities
February 2007
Move to capital structure that facilitates capital distribution
June 2007
Optimize with targeted investor return principles (Announced $22.5
billion recapitalization; new financial risk profile)
Rationalize new square footage
May 2008
Enhance growth and existing stores
Drive productivity
and efficiency
Ongoing
Superior Capital Efficiency and Cash Flow
5
