Home Depot to Oppose Proposal from Relational Inve
Atlanta, GA, December 18, 2006--Relational Investors, LLC, an investment firm, intends to submit a proposal at the next annual meeting of Home Depot shareholders.
The proposal will request that the board of directors of Home Depot appoint a special committee of independent directors to evaluate the strategic direction of the company, the performance of management and strategic alternatives for the company.
Relational notified the company that this proposal is part of an "advocacy program" planned by Relational with respect to the company, that Relational plans to solicit proxies to have its proposal adopted, and that Relational may nominate one or more directors for election at the 2007 annual meeting. In addition, Relational has requested a meeting with Home Depot's chief executive officer, Bob Nardelli, and members of the company's board of directors.
The company said that its board of directors recently completed a strategic review and that it will oppose the resolution and proxy solicitation that Relational intends to pursue.
The company also said today that its board of directors unanimously supports the management team and its plan to continue enhancing value for all shareholders through the execution of its current strategy. During the past six years, the company has delivered strong financial results.
Sales at Home Depot have nearly doubled, from $45.7 billion in 2000 to $81.5 billion in 2005, and earnings per share have increased more than 140 percent in the same period. From 2001 to the present, the company has invested more than $29 billion back into the business, through capital and acquisition spending, while also returning over $20 billion to shareholders in the form of share repurchases and dividends, including two dividend increases of 50 percent each this year. This includes, most recently, issuing $5 billion in debt and announcing a $3 billion accelerated share repurchase. Since 2002, when the Company's share repurchase program began, Home Depot has repurchased approximately 450 million shares, or 19 percent of its outstanding shares. This demonstrates the company's balanced approach to capital allocation through business investments and cash returned to its shareholders.
Home Depot has advised Relational that it will arrange a meeting shortly after the first of the year to discuss its concerns, consistent with The Home Depot's policy of engaging in an open and direct dialogue with shareholders.
Relational indicated in its notice that it has recently become a shareholder of Home Depot. Relational further indicated that its various affiliates own approximately 12,966,338 shares of Home Depot's common stock, or roughly 0.6 percent of the common shares outstanding.
