Home Depot 2014 Annual Report Download - page 50

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associated with the September 2013 issuance were approximately $19 million and are being amortized over the term of the
notes.
In April 2013, the Company issued $1.0 billion of 2.70% senior notes due April 1, 2023 at a discount of $2 million and $1.0
billion of 4.20% senior notes due April 1, 2043 at a discount of $4 million (together, the "April 2013 issuance"). Interest on
these notes is due semi-annually on April 1 and October 1 of each year, beginning October 1, 2013. The net proceeds of the
April 2013 issuance were used for general corporate purposes, including repurchases of shares of the Company's common
stock. The $6 million discount associated with the April 2013 issuance is being amortized over the term of the notes using the
effective interest rate method. Issuance costs associated with the April 2013 issuance were approximately $15 million and are
being amortized over the term of the notes.
The Company's 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 notes to be redeemed, and (2) the sum of the present values of the remaining scheduled payments of principal and
interest to the Par Call Date, as defined in the respective notes. Additionally, if a Change in Control Triggering Event occurs,
as defined in each of the outstanding notes except for the 5.40% senior notes due March 1, 2016 (the "2016 notes"), holders
of all notes other than the 2016 notes 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
indentures governing the 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 indentures governing the notes contain various restrictive
covenants, none are expected to impact the Company’s liquidity or capital resources.
In November 2013, the Company entered into an interest rate swap that expires on September 10, 2018, with a notional
amount of $500 million, accounted for as a fair value hedge, that swaps fixed rate interest on the 2018 notes for variable
interest equal to LIBOR plus 88 basis points. At February 1, 2015, the approximate fair value of this agreement was an asset
of $8 million, which is the estimated amount the Company would have received to settle the agreement and is included in
Other Assets in the accompanying Consolidated Balance Sheets.
Also in November 2013, the Company entered into an interest rate swap that expires on September 15, 2020, with a notional
amount of $500 million, accounted for as a fair value hedge, that swaps fixed rate interest on the Company’s 3.95% senior
notes due September 15, 2020 for variable interest equal to LIBOR plus 183 basis points. At February 1, 2015, the
approximate fair value of this agreement was an asset of $25 million, which is the estimated amount the Company would
have received to settle the agreement and is included in Other Assets in the accompanying Consolidated Balance Sheets.
At February 1, 2015, the Company had an outstanding interest rate swap that expires on March 1, 2016, with a notional
amount of $500 million, accounted for as a fair value hedge, that swaps fixed rate interest on the Company’s 5.40% senior
notes due March 1, 2016 for variable interest equal to LIBOR plus 300 basis points. At February 1, 2015, the approximate
fair value of this agreement was an asset of $19 million, which is the estimated amount the Company would have received to
settle the agreement and is included in Other Assets in the accompanying Consolidated Balance Sheets.
During fiscal 2013, the Company had outstanding interest rate swaps, accounted for as fair value hedges, with a notional
amount of $1.25 billion that swapped fixed rate interest on the Company’s $1.25 billion 5.25% senior notes that expired when
the notes were repaid on December 16, 2013.
At February 1, 2015, the Company had outstanding cross currency swap agreements with a notional amount of $676 million,
accounted for as cash flow hedges, to hedge foreign currency fluctuations on certain intercompany debt. At February 1, 2015,
the approximate fair value of these agreements was an asset of $72 million, which is the estimated amount the Company
would have received to settle the agreements.
Interest Expense in the accompanying Consolidated Statements of Earnings is net of interest capitalized of $2 million, $2
million and $3 million in fiscal 2014, 2013 and 2012, respectively. Maturities of Long-Term Debt are $38 million for fiscal
2015, $3.1 billion for fiscal 2016, $37 million for fiscal 2017, $1.2 billion for fiscal 2018, $1.0 billion for fiscal 2019 and
$11.5 billion thereafter.
5. ACCELERATED SHARE REPURCHASE AGREEMENTS
In fiscal 2014, the Company entered into Accelerated Share Repurchase ("ASR") agreements with third-party financial
institutions to repurchase $2.7 billion of the Company’s common stock. Under the agreements, the Company paid $2.7 billion
to the financial institutions and received a total of 34 million shares in fiscal 2014. 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