Home Depot 2008 Annual Report Download - page 46

6. DEBT
The Company has commercial paper programs that allow for borrowings up to $3.25 billion. All of the Company’s short-
term borrowings in fiscal 2008 and 2007 were under these commercial paper programs. In connection with the
commercial paper programs, the Company has a back-up credit facility with a consortium of banks for borrowings up to
$3.25 billion. The credit facility, which expires in December 2010, contains various restrictive covenants, all of which we
are in compliance. None of the covenants are expected to impact the Company’s liquidity or capital resources.
Short-Term Debt under the commercial paper programs was as follows (dollars in millions):
February 1,
2009 February 3, 2008
Balance outstanding at fiscal year-end $— $1,747
Maximum amount outstanding at any month-end $1,771 $1,747
Average daily short-term borrowings $ 403 $ 526
Weighted average interest rate 3.4% 5.0%
The Company’s Long-Term Debt at the end of fiscal 2008 and 2007 consisted of the following (amounts in millions):
February 1,
2009 February 3, 2008
3.75% Senior Notes; due September 15, 2009; interest payable semi-annually on
March 15 and September 15 $ 999 $ 998
Floating Rate Senior Notes; due December 16, 2009; interest payable on
March 16, June 16, September 16 and December 16 750 750
4.625% Senior Notes; due August 15, 2010; interest payable semi-annually on
February 15 and August 15 998 998
5.20% Senior Notes; due March 1, 2011; interest payable semi-annually on
March 1 and September 1 1,000 1,000
5.25% Senior Notes; due December 16, 2013; interest payable semi-annually on
June 16 and December 16 1,245 1,244
5.40% Senior Notes; due March 1, 2016; interest payable semi-annually on
March 1 and September 1 3,047 3,017
5.875% Senior Notes; due December 16, 2036; interest payable semi-annually on
June 16 and December 16 2,959 2,959
Capital Lease Obligations; payable in varying installments through January 31,
2055 417 415
Other 19 302
Total debt 11,434 11,683
Less current installments 1,767 300
Long-Term Debt, excluding current installments $ 9,667 $11,383
During fiscal 2008 and 2007, the Company entered into interest rate swaps, accounted for as fair value hedges, with
notional amounts of $3.0 billion, that swapped fixed rate interest on the Company’s $3.0 billion 5.40% Senior Notes for
variable rate interest equal to LIBOR plus 60 to 149 basis points. In fiscal 2008, the Company received $56 million to
settle these swaps, which will be amortized to reduce net Interest Expense over the remaining term of the debt.
At February 1, 2009, the Company had outstanding an interest rate swap, accounted for as a cash flow hedge, with a
notional amount of $750 million that swaps variable rate interest on the Company’s $750 million floating rate Senior
Notes for fixed rate interest at 4.36% that expires on December 16, 2009. At February 1, 2009, the approximate fair value
of this agreement was a liability of $21 million, which is the estimated amount the Company would have paid to settle the
interest rate swap agreement.
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.
41