Home Depot 2015 Annual Report Download - page 27

Table of Contents
25
September 15, 2014. The net proceeds of the June 2014 issuance were used for general corporate purposes, including
repurchases of shares of our common stock.
In fiscal 2015, we entered into forward starting interest rate swap agreements with a combined notional amount of $1.0
billion, accounted for as cash flow hedges, to hedge interest rate fluctuations in anticipation of issuing long-term debt to
refinance the 2016 notes. At January 31, 2016, the approximate fair value of these agreements was a liability of $82 million,
which is the estimated amount we would have paid to settle the agreements and is included in Other Long-Term Liabilities in
the accompanying Consolidated Balance Sheets. In connection with the February 2016 issuance, we paid $89 million in
February 2016 to settle the forward starting interest rate swap agreements we entered into in fiscal 2015.
In November 2013, we 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 our 2.25% senior notes due September 10, 2018
for variable interest equal to LIBOR plus 88 basis points. At January 31, 2016, the approximate fair value of this agreement
was an asset of $9 million, which is the estimated amount we would have received to settle the agreement and is included in
Other Assets in the accompanying Consolidated Balance Sheets.
Also in November 2013, we 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 our 3.95% senior notes due September 15,
2020 for variable interest equal to LIBOR plus 183 basis points. At January 31, 2016, the approximate fair value of this
agreement was an asset of $25 million, which is the estimated amount we would have received to settle the agreement and is
included in Other Assets in the accompanying Consolidated Balance Sheets.
At January 31, 2016, we had an outstanding interest rate swap that expired on March 1, 2016, with a notional amount of $500
million, accounted for as a fair value hedge, that swapped fixed rate interest on our 2016 notes for variable interest equal to
LIBOR plus 300 basis points. At January 31, 2016, the approximate fair value of this agreement was an asset of $9 million,
which is the estimated amount we would have received to settle the agreement and is included in Other Current Assets in the
accompanying Consolidated Balance Sheets.
We have commercial paper programs that allow for borrowings up to $2.0 billion. All of our short-term borrowings in fiscal
2015 and 2014 were under these commercial paper programs. In connection with these programs, we have a back-up credit
facility with a consortium of banks for borrowings up to $2.0 billion. In December 2014, we replaced our back-up credit
facility, which was scheduled to expire in July 2017, with a new, substantially identical $2.0 billion credit facility. The new
credit facility expires in December 2019 and contains various restrictive covenants. At January 31, 2016, we were in
compliance with all of the covenants, and they are not expected to impact our liquidity or capital resources. At January 31,
2016 and February 1, 2015, there were $350 million and $290 million, respectively, of borrowings outstanding under the
commercial paper programs. See Note 6 to our Consolidated Financial Statements for further discussion of our commercial
paper programs and related credit facility.
We use capital and operating leases to finance a portion of our real estate, including our stores, distribution centers and store
support centers. The net present value of capital lease obligations is reflected in our Consolidated Balance Sheets in Long-
Term Debt and Current Installments of Long-Term Debt. In accordance with generally accepted accounting principles, the
operating leases are not reflected in our Consolidated Balance Sheets.
As of January 31, 2016, we had $2.2 billion in Cash and Cash Equivalents. We believe that our current cash position, access
to the long-term debt capital markets and cash flow generated from operations should be sufficient not only for our operating
requirements but also to enable us to complete our capital expenditure programs and fund dividend payments, share
repurchases and any required long-term debt payments through the next several fiscal years. In addition, we have funds
available from our commercial paper programs and the ability to obtain alternative sources of financing.
Off-Balance Sheet Arrangements
In accordance with generally accepted accounting principles, operating leases for a portion of our real estate and other assets
are not reflected in our Consolidated Balance Sheets.