Home Depot 2010 Annual Report Download - page 30

In fiscal 2010, we spent $1.1 billion on Capital Expenditures, allocated as follows: 34% for core technology, 18%
for merchandising and operations, 17% for maintenance, 9% for new stores and 22% for other initiatives. In
fiscal 2010, we added eight new stores, including one relocation.
Net Cash Used in Financing Activities for fiscal 2010 was $4.5 billion compared to $3.5 billion for fiscal 2009.
This increase was primarily due to $2.4 billion more in Repurchases of Common Stock than in fiscal 2009,
partially offset by a $998 million increase in Proceeds from Long-Term Borrowings and a $745 million decrease
in Repayments of Long-Term Debt in fiscal 2010.
We repurchased 80.9 million shares of our common stock for $2.6 billion in fiscal 2010 and 7.7 million shares
for $213 million in fiscal 2009. Since the inception of our share repurchase program in 2002, we have
repurchased 834.4 million shares of our common stock for a total of $30.1 billion. As of January 30, 2011,
$9.9 billion remained under our share repurchase authorization.
We have commercial paper programs that allow for borrowings up to $2.0 billion. In connection with the
programs, we have a back-up credit facility with a consortium of banks for borrowings up to $2.0 billion. As of
January 30, 2011, there were no borrowings outstanding under the commercial paper programs or the related
credit facility. The credit facility expires in July 2013 and contains various restrictive covenants. As of
January 30, 2011, we were in compliance with all of the covenants, and they are not 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 and Current Installments of 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 2010, our long-term debt-to-equity ratio was 46.1% compared to 44.7% at the end of fiscal 2009.
As of January 30, 2011, we guaranteed a $1.0 billion senior secured amortizing term loan in connection with the
sale of HD Supply. We are responsible for up to $1.0 billion and any unpaid interest in the event of nonpayment
by HD Supply. As reported in the quarterly report on Form 10-Q of HD Supply for the period ended October 31,
2010, the outstanding balance of this term loan as of October 31, 2010 was $940 million. The guaranteed loan is
collateralized by certain assets of HD Supply. The original expiration date of the guarantee was August 30, 2012.
On March 19, 2010, we amended the guarantee to extend the expiration date to April 1, 2014. The fair value of
the guarantee at August 30, 2007 was $16 million and was recorded as a liability in Other Long-Term Liabilities.
The extension of the guarantee increased the fair value of the guarantee to $67 million, resulting in a $51 million
charge to Interest and Other, net, for fiscal 2010.
As of January 30, 2011, we had $545 million in Cash and Cash Equivalents. We believe that our current cash
position, access to the debt capital markets and cash flow generated from operations should be sufficient to
enable us to complete our capital expenditure programs and fund dividend payments, share repurchases 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 the ability to obtain alternative sources of financing. Subsequent to the end
of fiscal 2010, we repaid $1.0 billion of 5.20% Senior Notes that were due March 1, 2011. We issued commercial
paper to repay the 5.20% Senior Notes and plan to refinance this debt in the first quarter of fiscal 2011.
At January 30, 2011, we had outstanding interest rate swaps, accounted for as fair value hedges, that expire on
December 16, 2013 with a notional amount of $1.25 billion that swap fixed rate interest on our $1.25 billion
5.25% Senior Notes for variable interest equal to LIBOR plus 259 basis points. At January 30, 2011, the
approximate fair value of these agreements was an asset of $47 million, which is the estimated amount we would
have received to settle the agreements.
In May 2010, we entered into a forward starting interest rate swap agreement with a notional amount of $500
million, accounted for as cash flow hedge, to hedge interest rate fluctuations in anticipation of issuing long-term
debt to refinance debt maturing in fiscal 2011. At January 30, 2011, the approximate fair market value of this
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