Home Depot 2012 Annual Report Download - page 48

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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.
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 3.95% Senior Notes due September 15, 2020 and the 5.40% Senior Notes due September 15, 2040 (together the
"September 2010 issuance"), and the 5.25% Senior Notes and the 5.875% Senior Notes (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.
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.
At February 3, 2013, the Company had outstanding cross currency swap agreements with a notional amount of $190 million,
accounted for as cash flow hedges, to hedge foreign currency fluctuations on certain intercompany debt. At February 3, 2013,
the approximate fair value of these agreements was a liability of $15 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 $3 million in fiscal 2012, 2011 and 2010, respectively. Maturities of Long-Term Debt are $1.3 billion for fiscal
2013, $32 million for fiscal 2014, $29 million for fiscal 2015, $3.1 billion for fiscal 2016, $27 million for fiscal 2017 and
$6.3 billion thereafter.
6. ACCELERATED SHARE REPURCHASE AGREEMENTS
In fiscal 2012, the Company entered into ASR agreements with third-party financial institutions to repurchase $3.05 billion of
the Company’s common stock. Under the agreements, the Company paid $3.05 billion to the financial institutions, using cash
on hand, and received a total of 58 million shares in fiscal 2012. The final number of shares delivered upon settlement of
each agreement was determined with reference to the average price of the Company’s common stock over the term of the
applicable ASR agreement. The $3.05 billion of shares repurchased are included in Treasury Stock in the accompanying
Consolidated Balance Sheets.
In fiscal 2011, the Company entered into an ASR agreement with a third-party financial institution to repurchase $1.0 billion
of the Company’s common stock. Under the agreement, the Company paid $1.0 billion to the financial institution, using a
portion of the proceeds from the March 2011 issuance, and received a total of 27 million shares in fiscal 2011. The final
number of shares delivered upon settlement of the agreement was determined with reference to the average price of the
Company’s common stock over the term of the ASR agreement. The $1.0 billion of shares repurchased are included in
Treasury Stock in the accompanying Consolidated Balance Sheets.
In March 2013, the Company entered into an ASR agreement with a third-party financial institution to repurchase $1.5 billion
of the Company’s common stock. Under the agreement, the Company will pay $1.5 billion to the financial institution, using
cash on hand, and receive an initial delivery of approximately 18 million shares in the first quarter of fiscal 2013. The final
number of shares delivered upon settlement of the agreement will be determined with reference to the average price of the
Company’s common stock over the term of the ASR agreement.