Home Depot 2011 Annual Report Download - page 45

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39
Activity related to Rationalization Charges for fiscal 2011, 2010 and 2009 was as follows (amounts in millions):
Accrued Balance at February 1, 2009
Fiscal 2009 Charges
Cash Uses
Non-cash Activity
Accrued Balance at January 31, 2010
Cash Uses
Non-cash Activity
Accrued Balance at January 30, 2011
Cash Uses
Non-cash Activity
Accrued Balance at January 29, 2012
Asset
Impairments
$38
—
—
15
23
—
19
4
—
2
$2
Lease Obligation
Costs, net
$ 213
84
106
—
191
42
(9)
158
29
(15)
$ 144
Severance
$72
8
80
—
—
—
—
—
—
—
$—
Other
$20
54
71
3
—
—
—
—
—
—
$—
Total
$ 343
146
257
18
214
42
10
162
29
(13)
$ 146
Costs related to asset impairments, lease obligations, severance and other miscellaneous costs are included in SG&A in the
accompanying Consolidated Statements of Earnings. Asset impairment charges, including contractual costs to complete
certain assets, were determined based on fair market value using market data for each individual property. Lease obligation
costs represent the present value of contractually obligated rental payments offset by estimated sublet income, including
estimates of the time required to sublease the locations. The payments related to the leased locations therefore are not
generally incremental uses of cash.
3. HD SUPPLY DISPOSITION
On August 30, 2007, the Company closed the sale of HD Supply, Inc. In accordance with FASB ASC Subtopic 360-10, the
Company reclassified the results of HD Supply as discontinued operations in its Consolidated Statements of Earnings for all
periods presented. Settlement of working capital matters arising from the sale of HD Supply resulted in earnings from
discontinued operations of $41 million, net of tax, in fiscal 2009.
In connection with the sale, the Company purchased a 12.5% equity interest in the newly formed HD Supply for $325
million. In fiscal 2008, the Company determined its 12.5% equity interest in HD Supply was impaired and recorded a $163
million charge to write-down the investment. In fiscal 2009, the Company determined its equity interest in HD Supply was
further impaired and recorded an additional charge of $163 million to write-down the remaining investment, which is
included in Interest and Other, net, in the accompanying Consolidated Statements of Earnings.
Also in connection with the sale, the Company guaranteed a $1.0 billion senior secured amortizing term loan of HD Supply.
The Company is 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 30, 2011, the outstanding balance
of this term loan as of October 30, 2011 was $930 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, the Company 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 of the Company 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.