Home Depot 2008 Annual Report Download - page 52

The following table summarizes restricted stock outstanding at February 1, 2009 (shares in thousands):
Number of
Shares
Weighted
Average Grant
Date Fair Value
Outstanding at January 29, 2006 5,308 $35.76
Granted 7,575 41.37
Restrictions lapsed (1,202) 38.03
Canceled (1,551) 39.00
Outstanding at January 28, 2007 10,130 $39.20
Granted 7,091 39.10
Restrictions lapsed (2,662) 39.01
Canceled (2,844) 39.37
Outstanding at February 3, 2008 11,715 $39.14
Granted 7,938 27.14
Restrictions lapsed (1,251) 34.37
Canceled (2,115) 34.86
Outstanding at February 1, 2009 16,287 $34.22
As of February 1, 2009, there was $320 million of unamortized stock-based compensation expense related to restricted
stock which is expected to be recognized over a weighted average period of 3 years. The total fair value of restricted
stock shares vesting during fiscal 2008, 2007 and 2006 were $33 million, $103 million and $48 million, respectively.
9. LEASES
The Company leases certain retail locations, office space, warehouse and distribution space, equipment and vehicles.
While most of the leases are operating leases, certain locations and equipment are leased under capital leases. As leases
expire, it can be expected that, in the normal course of business, certain leases will be renewed or replaced.
Certain lease agreements include escalating rents over the lease terms. The Company expenses rent on a straight-line basis
over the lease term which commences on the date the Company has the right to control the property. The cumulative
expense recognized on a straight-line basis in excess of the cumulative payments is included in Other Accrued Expenses
and Other Long-Term Liabilities in the accompanying Consolidated Balance Sheets.
The Company had a lease agreement under which the Company leased certain assets totaling $282 million. This lease was
originally created under a structured financing arrangement and involved two special purpose entities. The Company
financed a portion of its new stores opened in fiscal years 1997 through 2003 under this lease agreement. Under this
agreement, the lessor purchased the properties, paid for the construction costs and subsequently leased the facilities to the
Company. The Company recorded the rental payments under the terms of the operating lease agreements as SG&A in the
accompanying Consolidated Statements of Earnings.
The $282 million lease agreement expired in fiscal 2008, and the Company exercised its option to purchase the assets
under this lease for $282 million. As a result of this purchase, the Company paid off $282 million of Long-Term Debt
included in the structured financing arrangement and reclassified $282 million from Long-Term Notes Receivable to
Property and Equipment in the accompanying Consolidated Balance Sheets.
Total rent expense, net of minor sublease income for fiscal 2008, 2007 and 2006 was $846 million, $824 million and
$768 million, respectively. Certain store leases also provide for contingent rent payments based on percentages of sales in
excess of specified minimums. Contingent rent expense for fiscal 2008, 2007 and 2006 was approximately $5 million,
$6 million and $9 million, respectively. Real estate taxes, insurance, maintenance and operating expenses applicable to the
leased property are obligations of the Company under the lease agreements.
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