Home Depot 2006 Annual Report Download - page 56

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decreased by $30 million in the accompanying Consolidated Financial Statements to reflect the
appropriate adjustments to Merchandise Inventories and Accounts Payable, net of tax.
Impact of Adjustments
The impact of each of the items noted above, net of tax, on fiscal 2006 beginning balances are
presented below (amounts in millions):
Cumulative Effect as of January 30, 2006
Stock Option Vendor
Practices Credits Total
Merchandise Inventories $ — $ 9 $ 9
Accounts Payable — (59) (59)
Deferred Income Taxes 11 20 31
Other Accrued Expenses (37) — (37)
Paid-In Capital (201) — (201)
Retained Earnings 227 30 257
Total $ — $ — $ —
3. INTANGIBLE ASSETS
The Company’s intangible assets at the end of fiscal 2006 and fiscal 2005, which are included in Other
Assets in the accompanying Consolidated Balance Sheets, consisted of the following (amounts in
millions):
January 28, January 29,
2007 2006
Customer relationships $ 756 $283
Trademarks and franchises 106 92
Other 67 58
Less accumulated amortization (151) (35)
Total $ 778 $398
Amortization expense related to intangible assets was $117 million, $29 million and $4 million for fiscal
2006, 2005 and 2004, respectively. Estimated future amortization expense for intangible assets recorded
as of January 28, 2007 is $107 million, $105 million, $99 million, $94 million and $82 million for fiscal
2007 through fiscal 2011, respectively.
4. DEBT
The Company has a commercial paper program that allows for borrowings up to $2.5 billion. All of the
Company’s short-term borrowings in fiscal 2006 and 2005 were made under this commercial paper
program. In connection with the commercial paper program, the Company has a back-up credit facility
with a consortium of banks for borrowings up to $2.0 billion. The credit facility, which expires in
December 2010, contains various restrictions, none of which is expected to materially impact the
Company’s liquidity or capital resources.
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