Home Depot 2006 Annual Report Download - page 37

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In March 2006, we entered into a forward starting interest rate swap agreement with a notional amount
of $2.0 billion, accounted for as a cash flow hedge, to hedge interest rate fluctuations in anticipation of
the issuance of the 5.40% Senior Notes due March 1, 2016. Upon issuance of the hedged debt, we
settled our forward starting interest rate swap agreement and recorded a $12 million decrease, net of
income taxes, to Accumulated Other Comprehensive Income, which will be amortized to interest
expense over the life of the related debt.
In May 2006, we entered into a $2 billion accelerated share repurchase agreement with a financial
institution pursuant to which we repurchased approximately 53 million shares of our common stock.
Under the agreement, the financial institution purchased an equivalent number of shares of our
common stock in the open market. The shares repurchased by us were subject to a future purchase
price adjustment based upon the weighted average price of our common stock over an agreed period,
subject to a specified collar. In August 2006, we settled the accelerated share repurchase. We elected
settlement in cash and received $61 million from the financial institution, which was recorded as an
offset to our cost of treasury stock.
In October 2006, we entered into a forward starting interest rate swap agreement with a notional
amount of $1.0 billion, accounted for as a cash flow hedge, to hedge interest rate fluctuations in
anticipation of the issuance of the 5.875% Senior Notes due December 16, 2036. Upon issuance of the
hedged debt in December 2006, we settled our forward starting interest rate swap agreement and
recorded an $11 million decrease, net of income taxes, to Accumulated Other Comprehensive Income,
which will be amortized to interest expense over the life of the related debt.
In December 2006, we entered into a $3 billion accelerated share repurchase agreement with a
financial institution pursuant to which we repurchased approximately 75 million shares of our common
stock. Under the agreement, the financial institution purchased an equivalent number of shares of our
common stock in the open market. The shares repurchased by us were subject to a future purchase
price adjustment based upon the weighted average price of our common stock over an agreed period.
In March 2007, we settled the accelerated share repurchase. We elected settlement in cash and received
$36 million from the financial institution, which was recorded as an offset to our cost of treasury stock
in fiscal 2007.
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