Home Depot 2013 Annual Report Download - page 54

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49
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The assets and liabilities of the Company that are measured at fair value on a recurring basis as of February 2, 2014 and
February 3, 2013 were as follows (amounts in millions):
Fair Value at February 2, 2014 Using Fair Value at February 3, 2013 Using
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Derivative agreements - assets $ — $ 30 $ — $ — $ 64 $ —
Derivative agreements - liabilities — (10) — — (15) —
Total $ — $ 20 $ — $ — $ 49 $ —
The Company uses derivative financial instruments from time to time in the management of its interest rate exposure on
long-term debt and its exposure on foreign currency fluctuations. The fair value of the Company’s derivative financial
instruments was measured using level 2 inputs. The Company’s derivative agreements are discussed further in Note 3.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Upon announcement in fiscal 2012 of its intention to close seven stores in China, the Company completed an assessment on
the recoverability of Goodwill for its China reporting unit. The fair value of the China reporting unit was estimated using the
present value of expected future discounted cash flows through unobservable inputs (level 3). As a result of this analysis, the
Company recorded a $97 million impairment charge to Goodwill in fiscal 2012. See Note 8 for further discussion of the
China store closings.
Long-lived assets, the remaining goodwill and other intangible assets were also analyzed for impairment on a nonrecurring
basis using fair value measurements with unobservable inputs (level 3). Impairment charges related to long-lived assets, the
remaining goodwill and other intangible assets in fiscal 2013 and 2012 were not material, as further discussed in Note 1
under the captions "Impairment of Long-Lived Assets" and "Goodwill and Other Intangible Assets," respectively.
The aggregate fair value of the Company’s senior notes, based on quoted market prices, was $15.6 billion and $12.2 billion at
February 2, 2014 and February 3, 2013, respectively, compared to a carrying value of $14.2 billion and $10.3 billion at
February 2, 2014 and February 3, 2013, respectively.
11. BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES
The reconciliation of basic to diluted weighted average common shares for fiscal 2013, 2012 and 2011 was as follows
(amounts in millions):
Fiscal Year Ended
February 2,
2014 February 3,
2013 January 29,
2012
Weighted average common shares 1,425 1,499 1,562
Effect of potentially dilutive securities:
Stock plans 912 8
Diluted weighted average common shares 1,434 1,511 1,570
Stock plans consist of shares granted under the Company’s employee stock plans as described in Note 6 to the Consolidated
Financial Statements. Options to purchase 1 million, 1 million and 23 million shares of common stock at February 2,
2014, February 3, 2013 and January 29, 2012, respectively, were excluded from the computation of Diluted Earnings per
Share because their effect would have been anti-dilutive.