Home Depot 2007 Annual Report Download - page 41

$3.6 billion in capital expenditures approximately $3.4 billion was for retail operations. In fiscal 2007, we added 110 new stores, including 10
relocations.
Net Cash Used in Financing Activities for fiscal 2007 was $10.6 billion compared with $203 million for fiscal 2006. The increase in Net Cash
Used in Financing Activities was primarily due to $4.1 billion more in common stock share repurchases than last year, including the repurchase
of 289 million shares of our common stock for $10.7 billion in connection with our tender offer, along with $8.9 billion less in Proceeds from
Borrowings of Long-Term Debt in fiscal 2007.
On June 18, 2007, the Board of Directors authorized a recapitalization of the Company, including an additional $22.5 billion in common stock
repurchases. We closed the sale of HD Supply on August 30, 2007 and used the proceeds from the sale and cash on hand to repurchase
289 million shares of our common stock for $10.7 billion, or $37 per share, in settlement of a related tender offer. In November 2007, we retired
735 million shares of our treasury stock. Since the inception of our share repurchase program in 2002, we have repurchased 743 million shares of
our common stock for a total of $27.2 billion. As of February 3, 2008, $12.8 billion remained under our share repurchase authorization. We
anticipate issuing debt to complete the remainder of our recapitalization plan.
We have commercial paper programs that allow for borrowings up to $3.25 billion. In connection with the programs, we have a back-up credit
facility with a consortium of banks for borrowings up to $3.0 billion. As of February 3, 2008, there was $1.7 billion outstanding under the
commercial paper programs and there were no borrowings outstanding under the related credit facility. We do not foresee borrowings under the
commercial paper programs beyond the $3.0 billion back-up credit facility. The credit facility, which expires in December 2010, contains
various restrictive covenants, all of which we are in compliance with. None of the covenants are expected to impact our liquidity or capital
resources.
We use capital and operating leases to finance a portion of our real estate, including our stores, distribution centers and store support centers. The
net present value of capital lease obligations is reflected in our Consolidated Balance Sheets in Long-Term Debt. In accordance with generally
accepted accounting principles, the operating leases are not reflected in our Consolidated Balance Sheets. As of the end of fiscal 2007, our long-
term debt-to-equity ratio was 64.3% compared to 46.5% at the end of fiscal 2006. This increase reflects the net increase in Long-Term Debt as a
result of the December 2006 Issuance of $750 million of floating rate Senior Notes, $1.25 billion of 5.25% Senior Notes and $3.0 billion of
5.875% Senior Notes.
As of February 3, 2008, we had $457 million in Cash and Short-Term Investments. We believe that our current cash position and cash flow
generated from operations should be sufficient to enable us to complete our capital expenditure programs and any required long-term debt
payments through the next several fiscal years. In addition, we have funds available from our commercial paper programs and we believe we
have the ability to obtain alternative sources of financing for other requirements.
During fiscal 2007, we entered into interest rate swaps, accounted for as fair value hedges, with notional amounts of $2.0 billion that swap fixed
rate interest on our $3.0 billion 5.40% Senior Notes for variable rate interest equal to LIBOR plus 60 to 149 basis points that expire on March 1,
2016. At February 3, 2008, the approximate fair value of these agreements was an asset of $29 million, which is the estimated amount we would
have received to settle similar interest rate swap agreements at current interest rates.
Also during fiscal 2007, we entered into an interest rate swap, accounted for as a cash flow hedge, with a notional amount of $750 million that
swaps variable rate interest on our $750 million floating rate Senior Notes for fixed rate interest at 4.36% that expires on December 16, 2009. At
February 3, 2008, the approximate fair value of this agreement was a liability of $17 million, which is the estimated amount we would have paid
to settle similar interest rate swap agreements at current interest rates.
26