Mark Holifield Executive Vice President, Supply Chain and Product Development. Leverage Our Scale. Most Efficient.

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1 Mark Holifield Executive Vice President, Supply Chain and Product Development & Supply Chain Investment December 6, Fastest Leverage Our Scale Most Efficient Home Improvement Next Day & Same Day Low Cost Producer Our Core Competency To Create the Fastest, Most Efficient in Home Improvement 2

2 Our Supply Chain Upstream Downstream Direct Fulfillment Centers Vendors DC Network (Bulk / Stocking / Flow ) Stores Customers Leverage our Competitive Advantage Build a Competitive Advantage 3 Leveraging Our Upstream, Building Our Downstream Centralized Inventory Management CAR Penetration Created An Optimal Flow Network Synchronizing Our Supply Chain Enabled Interconnected Retail Capabilities Launched The Direct Fulfillment Center Network Acquired Interline Brands Enhanced Our Deliver From Store Capability 4

3 Tremendous Scale in Home Improvement 3rd 12, M+ 1,000+ 5M+ Largest Container Importer Weekly Inbound Truckloads Annual Parcel Deliveries Flatbed Trucks Annual Appliance Deliveries Statistics reflect US only; Flatbed trucks represent number of trucks on the road per day 5 Invest and Improve Our Upstream Network Rapid Deployment Centers Bulk Distribution Centers Stocking Distribution Centers Further Automate RDC Operations More Volume Through the BDC Netw ork Optimize Flow of Seasonal and Import Goods 6

4 Supply Chain Sync Initiative Continues Distribution Center Store Sync Results Reduced Transportation Expenses Reduced Order Variability Improved Inventory Productivity 7 Our International Supply Chain Evolves Mexico Supply Chain Update Canada Supply Chain Update Vaughan, Ontario Mexico City, Mexico Focus Focus Expand DC Footprint to Meet Growth Demands Enable BOSS and BODFS Capabilities Build and Enhance Downstream Network Pilot Direct Fulfillment Center Concept Optimize Appliance BOSS = Buy Online Ship to Store; BODFS = Buy Online Deliver from Store 8

5 Our Direct Fulfillment Network Coverage Extended Assortment Vendor Direct Fulfillment 9 Enhanced Deliver from Store Capabilities New New Flatbed Box Truck Van / Courier Car Products Delivered Rollout Status Windows Lumber, Drywall Vanities, Grills Paint, Ceiling Fans Drills, Hand Tools Complete Complete In Rollout In Rollout 2 hour 4 hour All-Day 10

6 Fragmented Downstream Networks Store Appliance Online Interline Create Opportunity to Consolidate and Leverage Our Scale 11 Expand, Build and Consolidate a Downstream Network Direct Fulfillment Centers Market Operations Market Stores Stock And Deliver Most Frequently Demanded SKUs Extend Next-Day Capabilities Without Increasing Inventory Stocking Points Consolidate Store For Efficiency Customers Create the Fastest, Most Efficient in Home Improvement 12

7 Expand Our Direct Fulfillment Center (DFC) Network Direct Fulfillment Centers Parcel Plus DFCs ~7 locations Flatbed DFCs ~40 locations Local DFCs ~25 locations Preliminary location estimates 13 Build New Market Operation Network DFC & Vendor Netw ork Market Operations Appliance Pro MRO DIY Extending Next Day Capabilities without Increasing Inventory Stocking Points 14

8 Market Stores in Secondary Markets Example of Future MDS Service Area Non- Store Market Store 15 Next Day Coverage to 90% of the Population Stores Parcel Plus DFCs Local & Flatbed DFCs MDOs 16

9 Five Year Journey Downstream Direct Fulfillment Centers Local DFC Pilot Market Operations Upstream Bulk Distribution Centers Pilot Stocking Distribution Centers Rapid Deployment Centers With a ~$1.2 Billion Capital Investment 17 Supply Chain Competitive Advantage In-Stock Product Available When, Where & How Customer Wants Inventory Productivity Leverage Upstream Network Logistics Cost Most Efficient Service to Stores & Customers Fastest Fastest, Most Efficient in Home Improvement 18