1. Forward Looking Statements and Non-GAAP
Financial Measurements
Today’s presentations, including any statements related to the state of the home improvement market,
the state of the housing market, continuation of reinvestment plans and other factors affecting earnings
and sales, earnings and earnings per share guidance for Fiscal 2008 constitute "forward-looking
statements" 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.
Today’s presentations also include certain supplemental financial information not derived in accordance
with generally accepted accounting principles. These non-GAAP measurements include: Total adjusted
debt, EBITDAR, Gross margin -- % of sales as adjusted, Operating income as adjusted, Operating
margin -- % of sales as adjusted, Earnings from Continuing Operations as adjusted, and Earnings per
Share from Continuing Operations as adjusted. This supplemental information should not be considered
in isolation or as a substitute for GAAP measurements. The Company believes that the presentation of
these non-GAAP measurements provide meaningful information that is useful to investors. Such non-
GAAP measurements exclude expected costs of $543 million ($341 million after tax) taken in Q1 2008
associated with removal of 50 future openings from the Company’s new store pipeline and the closure of
15 U.S. stores. These charges are comprised of asset impairments, lease obligation costs, inventory
markdowns, severance and other costs. Adjusted debt/EBITDAR is defined as balance sheet debt plus
$1 billion contingent liability plus 8 times operating rents divided by earnings before interest, taxes,
depreciation, amortization, rents.