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About Hoover's Handbook of American Business 2010

In times of great economic turbulence such as we are currently experiencing, knowledge is king. When it's information about companies you need to make business, financial, or employment decisions, we believe that Hoover's Business Press is the place to turn. For our premier Hoover's Handbooks series of guides to businesses, we've done the sorting and sifting of information, leaving you with the facts you need to make the important decisions you face. This 20th edition of Hoover's Handbook of American Business, as it has throughout its history, stands as one of America's respected sources of business information, packed with the information you need. Hoover's Handbook of American Business is the first of our four-title series of handbooks that covers, literally, the world of business. The series is available as an indexed set, and also includes Hoover's Handbook of World Business, Hoover's Handbook of Private Companies, and Hoover's Handbook of Emerging Companies. This series brings you information on the biggest, fastest-growing, and most influential enterprises in the world. HOOVER'S ONLINE FOR BUSINESS NEEDS In addition to the 2,550 companies featured in our handbooks, comprehensive coverage of more than 40,000 business enterprises is available in electronic format on our Web site, Hoover's Online (www.hoovers.com). Our goal is to provide one site that offers authoritative, updated intelligence on US and global companies, industries, and the people who shape them. Hoover's has partnered with other prestigious business information and service providers to bring you all the right business information, services, and links in one place. We welcome the recognition we have received as a provider of high-quality company information -- online, electronically, and in print -- and continue to look for ways to make our products more available and more useful to you. We believe that anyone who buys from, sells to, invests in, lends to, competes with, interviews with, or works for a company should know all there is to know about that enterprise. Taken together, this book and the other Hoover's products and resources represent the most complete source of basic corporate information readily available to the general public. This latest version of Hoover's Handbook of American Business contains, as always, profiles of the largest and most influential companies in the United States. Each of the companies profiled here was chosen because of its important role in American business. For more details on how these companies were selected, see the section titled "Using Hoover's Handbooks." HOW TO USE THIS BOOK This book has four sections: 1. "Using Hoover's Handbooks" describes the contents of our profiles and explains the ways in which we gather and compile our data. 2. "A List-Lover's Compendium" contains lists of the largest, smallest, best, most, and other superlatives related to companies involved in American business. 3. The company profiles section makes up the largest and most important part of the book -- 750 profiles of major US enterprises. 4. Three indexes complete the book. The first sorts companies by industry groups, the second by headquarters location. The third index is a list of all the executives found in the Executives section of each company profile. As always, we hope you find our books useful. We invite your comments via phone (512-374-4500), fax (512-374-4538), mail (5800 Airport Boulevard, Austin, Texas 78752), or e-mail ([email protected]). The Editors, Austin, Texas, October 2009

xi

Home Depot

11470

When embarking on household projects, many start their journey at The Home Depot. As the world's largest home improvement chain and second-largest retailer in the US after Wal-Mart, the firm operates about 2,200 stores across North America, Puerto Rico, and China, as well as an e-commerce site. It targets the do-ityourself and professional markets with its selection of about 40,000 items, including lumber, flooring, plumbing, gardening supplies, tools, paint, and appliances. The Home Depot also offers carpeting, cabinetry, and other installation services. In response to angry shareholders, the retailer decided in 2008 that it will close its EXPO, THD Design Center, and Yardbirds stores. The exit, part of a move to satisfy investors calling for a more robust stock price, come amid a deepening recession and a battered housing market. The EXPO, THD Design Center, and Yardbirds stores were part of Home Depot's upscale group of home design and hardware stores targeted at those remodeling their homes. Also in early 2009 the company eliminated about 7,000 jobs, and it plans to shed 2,000 non-store positions and freeze the pay of its officers. The home improvement chain also decided to close 15 stores and curtail its 2010 growth plan by about 50 stores. The cost-cutting measures turn up as the retailer looks to reposition itself as a bargainpriced DIY store. To spur sales along, the company has slashed prices on its best-selling items, cleaned up stores to attract female customers, and retrained employees in customer service. While The Home Depot does not expect to see results from this approach in 2009, the retailer hopes its sales will rebound with the economy and housing market in the years following. As the US's #2 retailer works to boost sales at home, it is also aiming to leverage itself in international markets. About 10% of The Home Depot's stores are located in Canada, China, and Mexico. The company operates about a dozen stores in China and about 170 locations in Canada. Home Depot Mexico is the country's #1 do-it-yourself operator with about 70 stores. Recent years have been difficult for the home improvement chain, marked by the departure of its controversial former CEO Robert Nardelli in 2007, slowing same-store sales, and investor dissatisfaction. Under Nardelli, the company had aggressively expanded its professional services business while, critics claimed, the retail side of the business suffered. The downturn in the US housing market also interrupted the company's turnaround plans led by Nardelli's successor, Frank Blake. In late 2007 The Home Depot had cut about 950 jobs when it decided to close three call centers related to its sagging home services business. More job reductions were announced in early 2008, when 500 positions were cut from the company's headquarters, amounting to about 10% of employees there.

HISTORY

Bernard Marcus and Arthur Blank founded The Home Depot in 1978 after they were fired (under disputed circumstances) from Handy Dan Home Improvement Centers. They joined Handy Dan co-worker Ronald Brill to launch a "new and improved" home center for the do-ityourselfer (DIY). In 1979 they opened three

stores in the fast-growing Atlanta area and expanded to four stores in 1980. Home Depot went public, opened four stores in South Florida, and posted sales of $50 million in 1981. The chain entered Louisiana and Arizona next. By 1983 sales were more than $250 million. In 1984 Home Depot's stock was listed on the NYSE and the company acquired nine Bowater Home Centers in the South. Through subsequent stock and debenture offerings, Home Depot continued to grow, entering California (Handy Dan's home turf) with six new stores in 1985. Back on track in 1986, sales exceeded $1 billion in the firm's 60 stores. Home Depot began the current policy of "low day-in, day-out pricing" the following year, achieving Marcus' dream of eliminating sales events. The company entered the competitive northeastern market with stores in Long Island, New York, in 1988 and opened its first EXPO Design Center in San Diego. Home Depot's sales continued to rise during the 1990-92 recession and the retailer kept opening stores. It entered Canada in 1994 when it acquired a 75% interest in Aikenhead's, a DIY chain that it converted to the Home Depot name (it bought the remaining 25% in 1998). A series of gender-bias lawsuits plagued the company in 1994 as female workers claimed they were not treated on an equal basis with male employees. Home Depot reached a $65 million out-of-court settlement in 1997, but not before the company was ordered to pay another female employee $1.7 million in a case in California. In 1997 Blank succeeded Marcus as the company's CEO; Marcus remained chairman. In 2000 the company named General Electric executive Robert Nardelli as its president and CEO. Marcus and Blank were named co-chairmen, but Marcus was named chairman in 2001 after Blank stepped down. Later in the year Marcus retired and Nardelli became chairman. In mid-2005 Home Depot acquired National Waterworks Holdings (now National Waterworks, Inc.) and Williams Bros. Lumber of Georgia, and folded them both into its The Home Depot Supply business (renamed HD Supply). The company's direct-to-consumer division launched a pair of high-end catalogs in 2005: 10 Crescent Lane and Paces Trading Company. However, the catalogs, which featured home furnishings and lighting products, were discontinued in 2006 and selected products were folded back into the main Home Depot store catalog and Web site. In January 2006 Home Depot acquired carpet and upholstery cleaning franchisor Chem-Dry, which it will add to its At-Home Services division. (Chem-Dry has nearly 4,000 franchises worldwide, including 2,500 in the US.) In March the company completed its largest acquisition to date: the construction, repair, and maintenance products distributor Hughes Supply Inc., for $3.2 billion. That purchase was followed in May by the acquisition of Cox Lumber Co., a Tampabased provider of trusses, doors, and lumberrelated products. In early 2007 Nardelli left the company and vice chairman and EVP Frank Blake took the top spot. Home Depot decided to close its handful of flooring-only stores that year. It also closed a call center in Texas, affecting 550 employees. The company sold its HD Supply business in 2007 to Bain Capital, Carlyle Group, and Clayton Dubilier & Rice.

EXECUTIVES

Chairman and CEO: Francis S. (Frank) Blake, age 59, $8,584,167 total compensation SVP Operations: Marc D. Powers EVP Corporate Services and CFO: Carol B. Tomé, age 52, $5,745,747 total compensation EVP and CIO: Matt Carey SVP and Chief Marketing Officer: Frank P. Bifulco Jr. EVP Merchandising: Craig A. Menear, age 51, $3,043,646 total compensation EVP US Stores: Marvin Ellison, age 44, $2,605,739 total compensation EVP Human Resources: Timothy M. (Tim) Crow, age 53 EVP, General Counsel, and Corporate Secretary: Jack A. VanWoerkom, age 55 SVP Enterprise Program Management: Kelly H. Barrett SVP Store Merchandising: Millard E. Barron SVP Merchandising Décor: Gordon M. Erickson SVP Merchandising; President, Expo: Bruce A. Merino, age 55 SVP Merchandising Building Materials: Eric Peterson SVP Global Supply Chain: Mark Holifield SVP IT Store, Field, and Corporate Support: Cara D. Kinzey, age 42 SVP Investor Relations: Dianne S. Dayhoff President, Home Depot Canada and Home Depot Asia: Annette M. Verschuren, age 52, $3,536,691 total compensation VP Corporate Communications and External Affairs: Brad Shaw Auditors: KPMG LLP

LOCATIONS

HQ: The Home Depot, Inc. 2455 Paces Ferry Rd. NW, Atlanta, GA 30339 Phone: 770-433-8211 Fax: 770-384-2356 Web: www.homedepot.com

2009 Locations

No.

US Canada Mexico China Total

1,971 176 74 12 2,233

PRODUCTS/OPERATIONS

2009 Sales

% of total

Plumbing, electrical & kitchen Hardware & seasonal Building materials, lumber & millwork Paint, flooring & wall covering Total Behr Premium Plus (paint) Hampton Bay (lighting) Husky (hand tools) Mill's Pride (cabinets) Traffic Master (carpet) Vigoro (fertilizer)

30 29 22 19 100

Selected Private Labels and Proprietary Brands

COMPETITORS

84 Lumber Abbey Carpet Ace Hardware Amazon.com B&Q Best Buy Building Materials Holding CCA Global Costco Wholesale Do it Best F.W. Webb Guardian Building Products Improvement Direct Kelly-Moore Kmart Lowe's Menard Northern Tool Pacific Coast Building Products Reno-Depot RONA Sears Sherwin-Williams Stock Building Supply Sutherland Lumber Target Tractor Supply True Value Wal-Mart W.E. Aubuchon Wolseley

HOOVER'S HANDBOOK OF AMERICAN BUSINESS 2010

439

HISTORICAL FINANCIALS

Company Type: Public

Income Statement

REVENUE

FYE: Sunday nearest January 31

NET INCOME NET PROFIT MARGIN EMPLOYEES

($ mil.)

($ mil.)

1/09 1/08 1/07 1/06 1/05

Annual Growth

71,288.0 77,349.0 90,837.0 81,511.0 73,094.0 (0.6%)

2,260.0 4,395.0 5,761.0 5,838.0 5,001.0 (18.0%)

3.2% 5.7% 6.3% 7.2% 6.8% --

322,000 331,000 364,000 345,000 325,000 (0.2%)

2009 Year-End Financials

Debt ratio: 54.4% No. of shares (mil.): 1,703 Return on equity: 12.7% Dividends Cash ($ mil.): 519 Yield: 4.2% Current ratio: 1.20 Payout: 67.2% Long-term debt ($ mil.): 9,667 Market value ($ mil.): 36,674

Stock History

45 40 35 30 25 20 15 10 5 0

NYSE: HD

friction materials. Lastly, the company turns out consumer car care products (Prestone, FRAM brands) through its Transportation Systems segment. In 2009 Honeywell advanced further into the clean energy market. The company acquired Germany-based RMG Group (RMG Regel + Messtechnik Gmbh) and subsidiaries. A maker of regulating and safety systems, metering and shutoff, and installation services for natural gas businesses, RMG Group builds Honeywell's position in supplying natural gas transmission, storage, and industrial demand. In another arena, Honeywell picked up Norcross Safety Products in 2008 for around $1.2 billion. Norcross expands Honeywell Life Safety, part of Honeywell's Automation and Control Solutions. Later that year the company sold its Consumable Solutions business to BE Aerospace for $1.15 billion in cash and stock. Consumable Solutions distributes aerospace fasteners and hardware around the world to airlines, distributors, flight service centers, OEMs, and repair shops.

HISTORY

During WWI Germany controlled much of the world's chemical industry, causing dye and drug shortages. In response, Washington Post publisher Eugene Meyer and scientist William Nichols organized the Allied Chemical & Dye Corporation in 1920. Allied opened a synthetic ammonia plant in 1928 near Hopewell, Virginia, and became the world's leading producer of ammonia. After WWII Allied began making nylon, refrigerants, and other products. The company became Allied Chemical Corporation in 1958. Seeking a supplier of raw materials for its chemical products, in 1962 Allied bought Union Texas Natural Gas. In the early 1970s CEO John Connor sold many of the firm's unprofitable businesses and invested in oil and gas exploration. By 1979, when Edward Hennessy became CEO, Union Texas produced 80% of Allied's income. Hennessy led the company into the electronics and technical markets. Under a new name, Allied Corporation (1981), it bought the Bendix Corporation, an aerospace and automotive company, in 1983. In 1985 Allied merged with Signal Companies (founded by Sam Mosher in 1922) to form AlliedSignal. The company spun off more than 40 unprofitable chemical and engineering businesses over the next two years. Larry Bossidy, hired from General Electric in 1991 as the new CEO, began to cut waste and buy growth businesses. Late in 1999 the company acquired Honeywell in a deal valued at $15 billion and changed its name to Honeywell International. Honeywell, after trying to make a go of it in the computer and telecommunications industries, had refocused on its bread and butter -- thermostats, security systems, and other automation equipment. The chairman and CEO of the original Honeywell, Michael Bonsignore, took the same titles in the combined company. In 2000 Honeywell picked up buildingsecurity and fire systems company Pittway for $2 billion. Then, amid lower-than-expected earnings, the company announced plans to cut an additional 6,000 jobs on top of the 11,000 cuts already planned. Late in the year Honeywell was reportedly close to inking a deal to be acquired by United Technologies, but the talks ended when industrial behemoth GE made a better offer. Honeywell then agreed to be acquired by GE in a stock deal worth

1/05

1/06

1/07

1/08

1/09

STOCK PRICE ($)

P/E

PER SHARE ($)

FY Close

High/Low Earnings Dividends Book Value

1/09 1/08 1/07 1/06 1/05

Annual Growth

21.53 30.64 40.74 40.55 41.26 (15.0%)

23 18 16 16 20

13 10 12 13 14

1.34 2.37 2.79 2.72 2.26

0.90 0.90 0.68 0.40 0.32

10.44 10.40 14.69 15.80 14.18 (7.4%)

-- -- (12.2%) 29.5%

about $45 billion. However, the deal collapsed in 2001 when GE -- which had offered to sell assets that generate about $2.2 billion a year -- balked at demands from European Union regulators that it sell virtually all of Honeywell's avionics operations. The EU formally rejected the acquisition in July, and Honeywell ousted CEO Bonsignore, replacing him with Bossidy. In September the company said that it would take cost-cutting measures with charges of almost $1 billion and increased the total of previously announced layoffs, cutting about 16,000 jobs (about 13% of its workforce) by year's end. In December Honeywell agreed to pay Northrop Grumman $440 million to settle an antitrust and patent infringement lawsuit filed against it by Litton (now a part of Northrop) in 1990. In 2002 David Cote (like Bossidy, a former GE executive), the former chairman, president, and CEO of TRW, was named president and CEO of Honeywell, replacing Bossidy (Cote also replaced Bossidy as chairman in July 2002). Early in 2005 Honeywell acquired UK-based Novar plc for about $1.7 billion. Novar's operations include aluminum products, building control and security systems, and checkbook printing. Late in 2005 Honeywell sold its US nylon fibers business to Shaw Industries and its Clarke American Checks (check printing) business to M&F Worldwide for $800 million. It also bought Dow Chemical's 50% stake in UOP, their energy refining joint venture, for $825 million. Honeywell sold Novar's Indalex Aluminum Solutions operations to Sun Capital Partners for $425 million early in 2006. Not long after, Honeywell completed the acquisition of First Technology PLC, a maker of gas sensing, automotive, and safety equipment, for $718 million. In mid-2007 Honeywell acquired Dimensions International, a provider of logistics support to the US military and other defense agencies. In late 2007 Honeywell bought Hand Held Products Inc., a maker of automatic identification and data collection (AIDC) equipment.

Honeywell International

10062

EXECUTIVES

Chairman and CEO: David M. Cote, age 56, $30,312,456 total compensation SVP Technology and Operations: Larry E. Kittelberger, age 60 SVP and CFO: David J. (Dave) Anderson, age 59, $8,442,355 total compensation SVP Energy Strategy: Adriane M. Brown, age 50 SVP Human Resources and Communications: Mark James, age 47 SVP and General Counsel: Katherine L. (Kate) Adams VP, Strategy and Business Development: Rhonda G. Germany VP, Secretary, and Deputy Corporate Counsel: Thomas F. Larkins VP and Controller: Kathleen A. Winters, age 41 President and CEO, Aerospace: Robert J. (Rob) Gillette President and CEO, Automation and Control Solutions: Roger Fradin, age 55, $13,453,516 total compensation President and CEO, Specialty Materials: Andreas Kramvis President and CEO, Transportation Business: Alexandre (Alex) Ismail, age 44 Auditors: PricewaterhouseCoopers LLP

Jet engines and thermostats seem worlds apart, but they're Honeywell International's bread and butter. More than a century old, the company is a diverse industrial conglomerate, with automation/control products and aerospace offerings its biggest lines of business. Aerospace is Honeywell's most profitable business, yet the company is bracing for possible changes in the Pentagon budget. Sales to the US government account for about 12% of Honeywell's revenues. The company tends to constantly tweak its unique blend of businesses through acquisitions and divestitures. The company's largest business segment, Automation and Control, includes home and industrial heating, ventilation, and manufacturing process products. Close behind is Honeywell Aerospace, which makes products such as turbofan and turboprop engines and flight safety and landing systems. Honeywell, through its Specialty Materials segment, also makes performance materials used in semiconductors, polymers for electronics and fibers, and specialty

LOCATIONS

HQ: Honeywell International Inc. 101 Columbia Rd., Morristown, NJ 07962 Phone: 973-455-2000 Fax: 973-455-4807 Web: www.honeywell.com

440

HOOVER'S HANDBOOK OF AMERICAN BUSINESS 2010

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