Home Depot 2002 Annual Report Download - page 37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
THE HOME DEPOT, INC. AND SUBSIDIARIES
RECLASSIFICATIONS
Certain amounts in prior fiscal years have been reclassified to
conform with the presentation adopted in the current fiscal year.
2LONG-TERM DEBT
The Company’s long-term debt at the end of fiscal 2002 and
fiscal 2001 consisted of the following (amounts in millions):
February 2, February 3,
2003 2002
61/2% Senior Notes; due September 15,
2004; interest payable semi-annually
on March 15 and September 15 $ 500 $ 500
53/8% Senior Notes; due April 1, 2006;
interest payable semi-annually
on April 1 and October 1 500 500
Capital Lease Obligations;
payable in varying installments
through May 31, 2027 277 232
Other 51 23
Total long-term debt 1,328 1,255
Less current installments 75
Long-term debt, excluding
current installments $1,321 $1,250
The Company has a commercial paper program with
maximum available borrowings for up to $1 billion. In con-
nection with the program, the Company has a back-up credit
facility with a consortium of banks for up to $800 million. The
credit facility, which expires in September 2004, contains vari-
ous restrictive covenants, none of which are expected to mate-
rially impact the Company’s liquidity or capital resources.
The Company had $500 million of 61/2% Senior Notes
and $500 million of 53/8% Senior Notes outstanding as of
February 2, 2003, collectively referred to as “Senior Notes.”
The Senior Notes may be redeemed by the Company at any
time, in whole or in part, at a redemption price plus accrued
interest up to the redemption date. The redemption price is
equal to the greater of (1) 100% of the principal amount of the
Senior Notes to be redeemed, or (2) the sum of the present
values of the remaining scheduled payments of principal and
interest to maturity. The Senior Notes are not subject to sinking
fund requirements.
Interest Expense in the accompanying Consolidated
Statements of Earnings is net of interest capitalized of
$59 million, $84 million and $73 million in fiscal years 2002,
2001 and 2000, respectively. Maturities of long-term debt
are $7 million for fiscal 2003, $507 million for fiscal 2004,
$8 million for fiscal 2005, $509 million for fiscal 2006 and
$11 million for fiscal 2007.
As of February 2, 2003, the market values of the publicly
traded 61/2% and 53/8% Senior Notes were approximately
$537 million and $538 million, respectively. The estimated
fair value of all other long-term borrowings, excluding capital
lease obligations, approximated the carrying value of $51 million.
These fair values were estimated using a discounted cash flow
analysis based on the Company’s incremental borrowing rate
for similar liabilities.
3INCOME TAXES
The provision for income taxes consisted of the following
(in millions):
Fiscal Year Ended
February 2, February 3, January 28,
2003 2002 2001
Current:
Federal $1,679 $1,594 $1,267
State 239 265 216
Foreign 117 60 45
2,035 1,919 1,528
Deferred:
Federal 174 (12) 98
State 1(1) 9
Foreign (2) 7 1
173 (6) 108
Tot a l $2,208 $1,913 $1,636
The Company’s combined federal, state and foreign effec-
tive tax rates for fiscal years 2002, 2001 and 2000, net of offsets
generated by federal, state and foreign tax incentive credits,
were approximately 37.6%, 38.6% and 38.8%, respectively.
THE HOME DEPOT, INC. 2002 ANNUAL REPORT 35