Home Depot 2005 Annual Report Download - page 60

The Company’s Long-Term Debt at the end of fiscal 2005 and fiscal 2004 consisted of the following
(amounts in millions):
January 29, January 30,
2006 2005
45⁄8% Senior Notes; due August 15, 2010; interest payable
semi-annually on February 15 and August 15 $ 996 $—
33⁄4% Senior Notes; due September 15, 2009; interest payable
semi-annually on March 15 and September 15 996 995
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 January 31, 2055 381 351
Other 312 313
Total Long-Term Debt 3,185 2,159
Less current installments 513 11
Long-Term Debt, excluding current installments $2,672 $2,148
In May 2005, the Company filed a shelf registration statement with the Securities and Exchange
Commission for the future issuance of up to $5.0 billion of debt securities. In August 2005, the
Company issued $1.0 billion of 45⁄8% Notes due August 15, 2010 (‘‘45⁄8% Senior Notes’’) at a discount
of $5 million. Interest on the 45⁄8% Senior Notes is payable semi-annually on February 15 and
August 15 of each year. The net proceeds of $995 million were used to pay for a portion of the
acquisition price of National Waterworks, Inc. The $5 million discount associated with the issuance is
being amortized to interest expense over the term of the 45⁄8% Senior Notes using the effective interest
rate method. Issuance costs of $7 million are being amortized to interest expense over the term of the
45⁄8% Senior Notes using the straight-line method.
In September 2004, the Company issued $1.0 billion of 33⁄4% Senior Notes due September 15, 2009
(‘‘33⁄4% Senior Notes’’) at a discount of $5 million with interest payable semi-annually on March 15 and
September 15 of each year. The net proceeds of $995 million were used in part for the repayment of
the Company’s outstanding 61⁄2% Senior Notes due September 2004 in the aggregate principal amount
of $500 million. The remainder of the net proceeds was used for general corporate purposes. The
$5 million discount associated with the issuance is being amortized to interest expense over the term of
the 33⁄4% Senior Notes using the effective interest rate method. Issuance costs of $7 million are being
amortized to interest expense over the term of the 33⁄4% Senior Notes using the straight-line method.
The Company also had $500 million of unsecured 53⁄8% Senior Notes outstanding as of January 29,
2006, collectively referred to with the 45⁄8% Senior Notes and the 33⁄4% Senior Notes 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 Company is
generally not limited under these indentures in its ability to incur additional indebtedness nor required
to maintain financial ratios or specified levels of net worth or liquidity. However, the indentures
governing the Senior Notes contain various restrictive covenants, none of which are expected to impact
the Company’s liquidity or capital resources. 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 $51 million, $40 million and $50 million in fiscal 2005, 2004 and 2003, respectively.
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