Home Depot 2011 Annual Report Download - page 47

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the approximate fair value of these agreements was an asset of $52 million, which is the estimated amount the Company
would have received to settle the agreements and is included in Other Assets in the accompanying Consolidated Balance
Sheets.
In March 2011, the Company issued $1.0 billion of 4.40% Senior Notes due April 1, 2021 at a discount of $2 million and
$1.0 billion of 5.95% Senior Notes due April 1, 2041 at a discount of $4 million (together, the "March 2011 issuance").
Interest on these Senior Notes is due semi-annually on April 1 and October 1 of each year, beginning October 1, 2011. The
net proceeds of the March 2011 issuance were used to repurchase $1.0 billion of the Company’s common stock through an
Accelerated Share Repurchase ("ASR") agreement, and the balance of the net proceeds was used to repay the Company’s
5.20% Senior Notes that matured March 1, 2011 in the aggregate principal amount of $1.0 billion. The $6 million discount
associated with the March 2011 issuance is being amortized over the lives of the Senior Notes using the effective interest rate
method. Issuance costs were approximately $15 million and are being amortized over the lives of the Senior Notes issued in
March 2011.
In May 2010, the Company entered into a forward starting interest rate swap agreement with a notional amount of $500
million, accounted for as a cash flow hedge, to hedge interest rate fluctuations in anticipation of the March 2011 issuance.
Upon the March 2011 issuance, the Company settled this forward starting interest rate swap agreement for an immaterial
amount.
In September 2010, the Company issued $500 million of 3.95% Senior Notes due September 15, 2020 at a discount of $1
million and $500 million of 5.40% Senior Notes due September 15, 2040 at a discount of $1 million (together, the
"September 2010 issuance"). Interest on these Senior Notes is due semi-annually on March 15 and September 15 of each
year. The net proceeds of the September 2010 issuance were used to refinance the Company’s 4.625% Senior Notes that
matured August 15, 2010 in the aggregate principal amount of $1.0 billion. The $2 million discount associated with the
September 2010 issuance is being amortized over the lives of the Senior Notes using the effective interest rate
method. Issuance costs were $8 million and are being amortized over the lives of the Senior Notes issued in September 2010.
In fiscal 2009 and 2010, the Company entered into forward starting interest rate swap agreements with a combined notional
amount of $1.0 billion to hedge interest rate fluctuations in anticipation of the September 2010 issuance, accounted for as
cash flow hedges. Upon the September 2010 issuance, the Company paid $193 million to settle these forward starting interest
rate swap agreements. This amount, net of income taxes, is included in Accumulated Other Comprehensive Income and is
being amortized to Interest Expense over the lives of the Senior Notes issued in September 2010.
The Senior Notes may be redeemed by the Company at any time, in whole or in part, at the 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, and (2) the sum of the present values of the remaining scheduled payments of principal and
interest to maturity. Additionally, if a Change in Control Triggering Event occurs, as defined by the terms of the March 2011
issuance, the September 2010 issuance, and the 5.25% Senior Notes and the 5.875% Senior Notes issuance (together the
"December 2006 issuance"), holders of the March 2011 issuance, September 2010 issuance and December 2006 issuance
have the right to require the Company to redeem those notes at 101% of the aggregate principal amount of the notes plus
accrued interest up to the redemption date. The Company is generally not limited under the indenture governing the Senior
Notes in its ability to incur additional indebtedness or required to maintain financial ratios or specified levels of net worth or
liquidity. Further, while the indenture governing the Senior Notes contains various restrictive covenants, none is expected to
impact the Company’s liquidity or capital resources.
At January 29, 2012, the Company had outstanding cross currency swap agreements with a notional amount of $390 million,
accounted for as cash flow hedges, to hedge foreign currency fluctuations on certain intercompany debt. At January 29, 2012,
the approximate fair value of these agreements was a liability of $27 million, which is the estimated amount the Company
would have paid to settle the agreements and is included in Other Long-Term Liabilities in the accompanying Consolidated
Balance Sheets.
Interest Expense in the accompanying Consolidated Statements of Earnings is net of interest capitalized of $3 million, $3
million and $4 million in fiscal 2011, 2010 and 2009, respectively. Maturities of Long-Term Debt are $30 million for fiscal
2012, $1.3 billion for fiscal 2013, $30 million for fiscal 2014, $27 million for fiscal 2015, $3.1 billion for fiscal 2016 and
$6.3 billion thereafter.