>There doesn't seem to be any disclosure as to how much of that ground is actually owned by the company.
That's a fair question. I'd be willing to bet the percentage that are on ground leases is the same percentage of owned buildings that are in multi-tenant centers.
>>Shareholder equity is stated as being $18 billion. The difference between 6.9% and 30% is $4.1 billion in off balance sheet debt.
Okay, but there is also an offsetting asset.... the present value of those leases. You seem to be trying to hold HD to a standard that is not a generally standard accounting principle. Can you cite any SP500 company that capitalizes their operating leases, other than closed-end leases? Your position that said accounting principle should be changed is an entirely different debate, but HD should not be singled out because their accounting conforms to a GAAP with which you happen to disagree.
And KM, well they were a poorly managed, stagnant company with working capital debt up to their eyeballs. HD is not even close to that.
>>Another item where disclosure appears to be noticeably absent is their credit card accounts.
All of the consumer credit was outsourced to GE Capital... always has been. It was recently decided to move it over to CitiGroup. The receivables you cite are mostly commercial A/R of the subs, i.e., Apex, YoW, Maintenance Warehouse, as well as some commercial credit extended by stores.
>what is the Home Depot exposure to that risk?
Me recollection is that the consumer credit accounts are non-recourse. The provider earns the interest and takes the risk, not HD. If you call HD (or Lowes) about your charge account, you'll be talking to GECC. Heck, damn near ever major consumer good retailer with "in-house" credit cards lays it off on GECC, CG or their brethern.
Don, I'm not really looking to argue with you, and don't necessarily think HD is a bargain here. However, it bothers me when I see someone yelling "fire" in a crowded theatre when it's just some kid smoking in the balcony. |
