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HOME DEPOT, INC.

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Document and Entity Information (USD  $)
In Billions, except Share data		 12 Months Ended
Jan. 30, 2011
 Mar. 14, 2011
 Aug. 01, 2010
Document and Entity Information
Document Type 10-K
Amendment Flag false
Document Period End Date Jan 30, 2011
Document Fiscal Year Focus 2010
Document Fiscal Period Focus FY
Trading Symbol hd
Entity Registrant Name HOME DEPOT INC
Entity Central Index Key 0000354950
Current Fiscal Year End Date --01-30
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 1,622,070,458
Entity Current Reporting Status Yes
Entity Well-known Seasoned Issuer Yes
Entity Public Float  $ 48.1
Entity Voluntary Filers No
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Consolidated Statements of Earnings (USD  $)
In Millions, except Per Share data		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Consolidated Statements of Earnings
NET SALES  $ 67,997 [1]  $ 66,176 [1]  $ 71,288 [1]
Cost of Sales 44,693 [1] 43,764 [1] 47,298 [1]
GROSS PROFIT 23,304 [1] 22,412 [1] 23,990 [1]
Operating Expenses:
Selling, General and Administrative 15,849 [1] 15,902 [1] 17,846 [1]
Depreciation and Amortization 1,616 [1] 1,707 [1] 1,785 [1]
Total Operating Expenses 17,465 [1] 17,609 [1] 19,631 [1]
OPERATING INCOME 5,839 [1] 4,803 [1] 4,359 [1]
Interest and Other (Income) Expense:
Interest and Investment Income (15) [1] (18) [1] (18) [1]
Interest Expense 530 [1] 676 [1] 624 [1]
Other 51 [1] 163 [1] 163 [1]
Interest and Other, net 566 [1] 821 [1] 769 [1]
EARNINGS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES 5,273 [1] 3,982 [1] 3,590 [1]
Provision for Income Taxes 1,935 [1] 1,362 [1] 1,278 [1]
EARNINGS FROM CONTINUING OPERATIONS 3,338 [1] 2,620 [1] 2,312 [1]
EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX 41 [1] (52) [1]
NET EARNINGS  $ 3,338 [1]  $ 2,661 [1]  $ 2,260 [1]
Weighted Average Common Shares 1,648 [1] 1,683 [1] 1,682 [1]
BASIC EARNINGS PER SHARE FROM CONTINUING OPERATIONS  $ 2.03 [1]  $ 1.56 [1]  $ 1.37 [1]
BASIC EARNINGS (LOSS) PER SHARE FROM DISCONTINUED OPERATIONS  $ 0.02 [1]  $ (0.03) [1]
BASIC EARNINGS PER SHARE  $ 2.03 [1]  $ 1.58 [1]  $ 1.34 [1]
Diluted Weighted Average Common Shares 1,658 [1] 1,692 [1] 1,686 [1]
DILUTED EARNINGS PER SHARE FROM CONTINUING OPERATIONS  $ 2.01 [1]  $ 1.55 [1]  $ 1.37 [1]
DILUTED EARNINGS (LOSS) PER SHARE FROM DISCONTINUED OPERATIONS  $ 0.02 [1]  $ (0.03) [1]
DILUTED EARNINGS PER SHARE  $ 2.01 [1]  $ 1.57 [1]  $ 1.34 [1]
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Consolidated Balance Sheets (USD  $)
In Millions		 Jan. 30, 2011
 Jan. 31, 2010
Current Assets:
Cash and Cash Equivalents  $ 545 [1]  $ 1,421 [1]
Receivables, net 1,085 964
Merchandise Inventories 10,625 10,188
Other Current Assets 1,224 1,327
Total Current Assets 13,479 13,900
Property and Equipment, at cost:
Land 8,497 8,451
Buildings 17,606 17,391
Furniture, Fixtures and Equipment 9,687 9,091
Leasehold Improvements 1,373 1,383
Construction in Progress 654 525
Capital Leases 568 504
Property and Equipment, at cost 38,385 37,345
Less Accumulated Depreciation and Amortization 13,325 11,795
Net Property and Equipment 25,060 25,550
Notes Receivable 139 33
Goodwill 1,187 1,171
Other Assets 260 223
Total Assets 40,125 40,877
Current Liabilities:
Accounts Payable 4,717 4,863
Accrued Salaries and Related Expenses 1,290 1,263
Sales Taxes Payable 368 362
Deferred Revenue 1,177 1,158
Income Taxes Payable 13 108
Current Installments of Long-Term Debt 1,042 1,020
Other Accrued Expenses 1,515 1,589
Total Current Liabilities 10,122 10,363
Long-Term Debt, excluding current installments 8,707 8,662
Other Long-Term Liabilities 2,135 2,140
Deferred Income Taxes 272 319
Total Liabilities 21,236 21,484
STOCKHOLDERS' EQUITY
Common Stock, par value  $0.05; authorized: 10 billion shares; issued: 1.722 billion shares at January 30, 2011 and 1.716 billion shares at January 31, 2010; outstanding: 1.623 billion shares at January 30, 2011 and 1.698 billion shares at January 31, 2010 86 86
Paid-In Capital 6,556 6,304
Retained Earnings 14,995 13,226
Accumulated Other Comprehensive Income 445 362
Treasury Stock, at cost, 99 million shares at January 30, 2011 and 18 million shares at January 31, 2010 (3,193) (585)
Total Stockholders' Equity 18,889 19,393
Total Liabilities and Stockholders' Equity  $ 40,125  $ 40,877
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Consolidated Balance Sheets (Parenthetical) (USD  $)
In Millions, except Per Share data		 Jan. 30, 2011
 Jan. 31, 2010
Consolidated Balance Sheets
Common Stock, par value  $ 0.05  $ 0.05
Common Stock, authorized 10,000 10,000
Common Stock, issued 1,722 1,716
Common Stock, outstanding 1,623 1,698
Treasury Stock, shares 99 18
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Consolidated Statements of Stockholders' Equity and Comprehensive Income (USD  $)
In Millions		 Common Stock [Member]
 Paid-In Capital [Member]
 Retained Earnings [Member]
 Accumulated Other Comprehensive Income (Loss) [Member]
 Treasury Stock [Member]
 Total Comprehensive Income [Member]
 Total
BALANCE at Feb. 03, 2008  $ 85  $ 5,800  $ 11,388  $ 755  $ (314)  $ 17,714
BALANCE, shares at Feb. 03, 2008 1,698 (8)
Net Earnings     2,260     2,260 2,260 [1]
Shares Issued Under Employee Stock Plans 68       68
Shares Issued Under Employee Stock Plans, shares 9
Tax Effect of Sale of Option Shares by Employees   7       7
Translation Adjustments       (831)   (831) (831)
Cash Flow Hedges, net of tax       (1)   (1) (1)
Stock Options, Awards and Amortization of Restricted Stock   176       176
Repurchases of Common Stock         (70) (70)
Repurchases of Common Stock, shares (3)
Cash Dividends     (1,521)     (1,521)
Other   (3) (34)   12 (25)
Comprehensive Income 1,428
BALANCE at Feb. 01, 2009 85 6,048 12,093 (77) (372) 17,777
BALANCE, shares at Feb. 01, 2009 1,707 (11)
Net Earnings     2,661     2,661 2,661 [1]
Shares Issued Under Employee Stock Plans 1 57       58
Shares Issued Under Employee Stock Plans, shares 9
Tax Effect of Sale of Option Shares by Employees   (2)       (2)
Translation Adjustments       426   426 426
Cash Flow Hedges, net of tax       11   11 11
Stock Options, Awards and Amortization of Restricted Stock   201       201
Repurchases of Common Stock         (213) (213)
Repurchases of Common Stock, shares (7)
Cash Dividends     (1,525)     (1,525)
Other     (3) 2   2 (1)
Comprehensive Income 3,100
BALANCE at Jan. 31, 2010 86 6,304 13,226 362 (585) 19,393
BALANCE, shares at Jan. 31, 2010 1,716 (18)
Net Earnings 3,338 3,338 3,338 [1]
Shares Issued Under Employee Stock Plans 42 42
Shares Issued Under Employee Stock Plans, shares 6
Tax Effect of Sale of Option Shares by Employees 2 2
Translation Adjustments 206 206 206
Cash Flow Hedges, net of tax (116) (116) (116)
Stock Options, Awards and Amortization of Restricted Stock 214 214
Repurchases of Common Stock (2,608) (2,608)
Repurchases of Common Stock, shares (81)
Cash Dividends (1,569) (1,569)
Other (6) (7) (7) (13)
Comprehensive Income 3,421
BALANCE at Jan. 30, 2011  $ 86  $ 6,556  $ 14,995  $ 445  $ (3,193)  $ 18,889
BALANCE, shares at Jan. 30, 2011 1,722 (99)
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Consolidated Statements of Stockholders' Equity and Comprehensive Income (Parenthetical) (USD  $)
 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Consolidated Statements of Stockholders' Equity and Comprehensive Income
Cash Dividends, per share  $ 0.945  $ 0.9  $ 0.9
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Consolidated Statements of Cash Flows (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Earnings  $ 3,338 [1]  $ 2,661 [1]  $ 2,260 [1]
Reconciliation of Net Earnings to Net Cash Provided by Operating Activities:
Depreciation and Amortization 1,718 [1] 1,806 [1] 1,902 [1]
Impairment Related to Rationalization Charges 580 [1]
Impairment of Investment 163 [1] 163 [1]
Stock-Based Compensation Expense 214 [1] 201 [1] 176 [1]
Changes in Assets and Liabilities:
(Increase) Decrease in Receivables, net (102) [1] (23) [1] 121 [1]
(Increase) Decrease in Merchandise Inventories (355) [1] 625 [1] 743 [1]
Decrease (Increase) in Other Current Assets 12 [1] 4 [1] (7) [1]
(Decrease) Increase in Accounts Payable and Accrued Expenses (133) [1] 59 [1] (646) [1]
Increase (Decrease) in Deferred Revenue 10 [1] (21) [1] (292) [1]
(Decrease) Increase in Income Taxes Payable (85) [1] (174) [1] 262 [1]
Increase (Decrease) in Deferred Income Taxes 104 [1] (227) [1] (282) [1]
(Decrease) Increase in Other Long-Term Liabilities (61) [1] (19) [1] 306 [1]
Other (75) [1] 70 [1] 242 [1]
Net Cash Provided by Operating Activities 4,585 [1] 5,125 [1] 5,528 [1]
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures, net of  $62,  $10 and  $37 of non-cash capital expenditures in fiscal 2010, 2009 and 2008, respectively (1,096) [1] (966) [1] (1,847) [1]
Proceeds from Sales of Property and Equipment 84 [1] 178 [1] 147 [1]
Purchases of Investments (168) [1]
Proceeds from Sales and Maturities of Investments 33 [1] 139 [1]
Net Cash Used in Investing Activities (1,012) [1] (755) [1] (1,729) [1]
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of Short-Term Borrowings, net (1,732) [1]
Proceeds from Long-Term Borrowings, net of discount 998 [1]
Repayments of Long-Term Debt (1,029) [1] (1,774) [1] (313) [1]
Repurchases of Common Stock (2,608) [1] (213) [1] (70) [1]
Proceeds from Sales of Common Stock 104 [1] 73 [1] 84 [1]
Cash Dividends Paid to Stockholders (1,569) [1] (1,525) [1] (1,521) [1]
Other Financing Activities (347) [1] (64) [1] (128) [1]
Net Cash Used in Financing Activities (4,451) [1] (3,503) [1] (3,680) [1]
(Decrease) Increase in Cash and Cash Equivalents (878) [1] 867 [1] 119 [1]
Effect of Exchange Rate Changes on Cash and Cash Equivalents 2 [1] 35 [1] (45) [1]
Cash and Cash Equivalents at Beginning of Year 1,421 [1] 519 [1] 445 [1]
Cash and Cash Equivalents at End of Year 545 [1] 1,421 [1] 519 [1]
SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS MADE FOR:
Interest, net of interest capitalized 579 [1] 664 [1] 622 [1]
Income Taxes  $ 2,067 [1]  $ 2,082 [1]  $ 1,265 [1]
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Consolidated Statements of Cash Flows (Parenthetical) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Consolidated Statements of Cash Flows
Capital Expenditures, non-cash capital expenditures  $ 62  $ 10  $ 37
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Summary of Significant Accounting Policies
 12 Months Ended
Jan. 30, 2011
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 

Business, Consolidation and Presentation

The Home Depot, Inc. and its subsidiaries (the "Company") operate The Home Depot stores, which are full-service, warehouse-style stores averaging approximately 105,000 square feet in size. The stores stock approximately 30,000 to 40,000 different kinds of building materials, home improvement supplies and lawn and garden products that are sold to do-it-yourself customers, do-it-for-me customers and professional customers. At the end of fiscal 2010, the Company was operating 2,248 stores, which included 1,976 The Home Depot stores in the United States, including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam ("U.S."), 179 The Home Depot stores in Canada, 85 The Home Depot stores in Mexico and 8 The Home Depot stores in China. The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation.

Fiscal Year

The Company's fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31. Fiscal years ended January 30, 2011 ("fiscal 2010"), January 31, 2010 ("fiscal 2009") and February 1, 2009 ("fiscal 2008") include 52 weeks.

 

Use of Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing these financial statements in conformity with U.S. generally accepted accounting principles. Actual results could differ from these estimates.

 

Fair Value of Financial Instruments

The carrying amounts of Cash and Cash Equivalents, Receivables and Accounts Payable approximate fair value due to the short-term maturities of these financial instruments. The fair value of the Company's investments is discussed under the caption "Short-Term Investments" in this Note 1. The fair value of the Company's Long-Term Debt is discussed in Note 11.

 

Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company's cash equivalents are carried at fair market value and consist primarily of high-grade commercial paper, money market funds and U.S. government agency securities.

 

Short-Term Investments

Short-term investments are recorded at fair value based on current market rates and are classified as available-for-sale. The Company's short-term investments are included in Other Current Assets in the accompanying Consolidated Balance Sheets.

 

Accounts Receivable

The Company has an agreement with a third-party service provider who directly extends credit to customers, manages the Company's private label credit card program and owns the related receivables. The Company evaluated the third-party entities holding the receivables under the program and concluded that they should not be consolidated by the Company. The agreement with the third-party service provider expires in 2018, with the Company having the option, but no obligation, to purchase the receivables at the end of the agreement. The deferred interest charges incurred by the Company for its deferred financing programs offered to its customers are included in Cost of Sales. The interchange fees charged to the Company for the customers' use of the cards and the profit sharing with the third-party administrator are included in Selling, General and Administrative expenses ("SG&A"). The sum of the three is referred to by the Company as "the cost of credit" of the private label credit card program.

In addition, certain subsidiaries of the Company extend credit directly to customers in the ordinary course of business. The receivables due from customers were  $42 million and  $38 million as of January 30, 2011 and January 31, 2010, respectively. The Company's valuation reserve related to accounts receivable was not material to the Consolidated Financial Statements of the Company as of the end of fiscal 2010 or 2009.

 

Merchandise Inventories

The majority of the Company's Merchandise Inventories are stated at the lower of cost (first-in, first-out) or market, as determined by the retail inventory method. As the inventory retail value is adjusted regularly to reflect market conditions, the inventory valued using the retail method approximates the lower of cost or market. Certain subsidiaries, including retail operations in Canada, Mexico and China, and distribution centers, record Merchandise Inventories at the lower of cost or market, as determined by a cost method. These Merchandise Inventories represent approximately 20% of the total Merchandise Inventories balance. The Company evaluates the inventory valued using a cost method at the end of each quarter to ensure that it is carried at the lower of cost or market. The valuation allowance for Merchandise Inventories valued under a cost method was not material to the Consolidated Financial Statements of the Company as of the end of fiscal 2010 or 2009.

Independent physical inventory counts or cycle counts are taken on a regular basis in each store and distribution center to ensure that amounts reflected in the accompanying Consolidated Financial Statements for Merchandise Inventories are properly stated. During the period between physical inventory counts in stores, the Company accrues for estimated losses related to shrink on a store-by-store basis based on historical shrink results and current trends in the business. Shrink (or in the case of excess inventory, "swell") is the difference between the recorded amount of inventory and the physical inventory. Shrink may occur due to theft, loss, inaccurate records for the receipt of inventory or deterioration of goods, among other things.

Income Taxes

Income taxes are accounted for under the asset and liability method. The Company provides for federal, state and foreign income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company and its eligible subsidiaries file a consolidated U.S. federal income tax return. Non-U.S. subsidiaries and certain U.S. subsidiaries, which are consolidated for financial reporting purposes, are not eligible to be included in the Company's consolidated U.S. federal income tax return. Separate provisions for income taxes have been determined for these entities. The Company intends to reinvest substantially all of the unremitted earnings of its non-U.S. subsidiaries and postpone their remittance indefinitely. Accordingly, no provision for U.S. income taxes for these non-U.S. subsidiaries was recorded in the accompanying Consolidated Statements of Earnings.

 

Depreciation and Amortization

The Company's Buildings, Furniture, Fixtures and Equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold Improvements are amortized using the straight-line method over the original term of the lease or the useful life of the improvement, whichever is shorter. The Company's Property and Equipment is depreciated using the following estimated useful lives:

 

         
     Life  

Buildings

      5 – 45 years   

Furniture, Fixtures and Equipment

      2 – 20 years   

Leasehold Improvements

      5 – 45 years   

Capitalized Software Costs

The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software, which is three to six years. These costs are included in Furniture, Fixtures and Equipment in the accompanying Consolidated Balance Sheets. Certain development costs not meeting the criteria for capitalization are expensed as incurred.

 

Revenues

The Company recognizes revenue, net of estimated returns and sales tax, at the time the customer takes possession of merchandise or receives services. The liability for sales returns is estimated based on historical return levels. When the Company receives payment from customers before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as Deferred Revenue in the accompanying Consolidated Balance Sheets until the sale or service is complete. The Company also records Deferred Revenue for the sale of gift cards and recognizes this revenue upon the redemption of gift cards in Net Sales. Gift card breakage income is recognized based upon historical redemption patterns and represents the balance of gift cards for which the Company believes the likelihood of redemption by the customer is remote. During fiscal 2010, 2009 and 2008, the Company recognized  $46 million,  $40 million and  $37 million, respectively, of gift card breakage income. This income is included in the accompanying Consolidated Statements of Earnings as a reduction in SG&A.

 

Services Revenue

Net Sales include services revenue generated through a variety of installation, home maintenance and professional service programs. In these programs, the customer selects and purchases material for a project and the Company provides or arranges professional installation. These programs are offered through the Company's stores. Under certain programs, when the Company provides or arranges the installation of a project and the subcontractor provides material as part of the installation, both the material and labor are included in services revenue. The Company recognizes this revenue when the service for the customer is complete.

All payments received prior to the completion of services are recorded in Deferred Revenue in the accompanying Consolidated Balance Sheets. Services revenue was  $2.7 billion,  $2.6 billion and  $3.1 billion for fiscal 2010, 2009 and 2008, respectively.

 

Self-Insurance

The Company is self-insured for certain losses related to general liability, workers' compensation, medical, product liability and automobile claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. The expected ultimate cost of claims is estimated based upon analysis of historical data and actuarial estimates.

 

Prepaid Advertising

Television and radio advertising production costs, along with media placement costs, are expensed when the advertisement first appears. Amounts included in Other Current Assets in the accompanying Consolidated Balance Sheets relating to prepayments of production costs for print and broadcast advertising as well as sponsorship promotions were not material at the end of fiscal 2010 and 2009.

 

 

Vendor Allowances

Vendor allowances primarily consist of volume rebates that are earned as a result of attaining certain purchase levels and advertising co-op allowances for the promotion of vendors' products that are typically based on guaranteed minimum amounts with additional amounts being earned for attaining certain purchase levels. These vendor allowances are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases.

Volume rebates and certain advertising co-op allowances earned are initially recorded as a reduction in Merchandise Inventories and a subsequent reduction in Cost of Sales when the related product is sold. Certain advertising co-op allowances that are reimbursements of specific, incremental and identifiable costs incurred to promote vendors' products are recorded as an offset against advertising expense. In fiscal 2010, 2009 and 2008, gross advertising expense was  $864 million,  $897 million and  $1.0 billion, respectively, and is included in SG&A. Specific, incremental and identifiable advertising co-op allowances were  $90 million,  $105 million and  $107 million for fiscal 2010, 2009 and 2008, respectively, and are recorded as an offset to advertising expense in SG&A.

 

Cost of Sales

Cost of Sales includes the actual cost of merchandise sold and services performed, the cost of transportation of merchandise from vendors to the Company's stores, locations or customers, the operating cost of the Company's sourcing and distribution network and the cost of deferred interest programs offered through the Company's private label credit card program.

The cost of handling and shipping merchandise from the Company's stores, locations or distribution centers to the customer is classified as SG&A. The cost of shipping and handling, including internal costs and payments to third parties, classified as SG&A was  $438 million,  $426 million and  $501 million in fiscal 2010, 2009 and 2008, respectively.

 

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets each quarter for indicators of potential impairment. Indicators of impairment include current period losses combined with a history of losses, management's decision to relocate or close a store or other location before the end of its previously estimated useful life, or when changes in other circumstances indicate the carrying amount of an asset may not be recoverable. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual store level.

The assets of a store with indicators of impairment are evaluated by comparing its undiscounted cash flows with its carrying value. The estimate of cash flows includes management's assumptions of cash inflows and outflows directly resulting from the use of those assets in operations, including gross margin on Net Sales, payroll and related items, occupancy costs, insurance allocations and other costs to operate a store. If the carrying value is greater than the undiscounted cash flows, an impairment loss is recognized for the difference between the carrying value and the estimated fair market value. Impairment losses are recorded as a component of SG&A in the accompanying Consolidated Statements of Earnings. When a leased location closes, the Company also recognizes in SG&A the net present value of future lease obligations less estimated sublease income.

As part of its Rationalization Charges, the Company recorded no asset impairments in fiscal 2010 and 2009 and recorded  $580 million of asset impairments in fiscal 2008. Also as part of its Rationalization Charges, the Company recorded no lease obligation costs in fiscal 2010 and recorded  $84 million and  $252 million of lease obligation costs in fiscal 2009 and 2008, respectively. See Note 2 for more details on the Rationalization Charges. The Company also recorded impairments and other lease obligation costs on other closings and relocations in the ordinary course of business, which were not material to the Consolidated Financial Statements in fiscal 2010, 2009 and 2008.

 

 

Goodwill and Other Intangible Assets

Goodwill represents the excess of purchase price over the fair value of net assets acquired. The Company does not amortize goodwill, but does assess the recoverability of goodwill in the third quarter of each fiscal year, or more often if indicators warrant, by determining whether the fair value of each reporting unit supports its carrying value. The fair values of the Company's identified reporting units were estimated using the present value of expected future discounted cash flows.

The Company amortizes the cost of other intangible assets over their estimated useful lives, which range up to 20 years, unless such lives are deemed indefinite. Intangible assets with indefinite lives are tested in the third quarter of each fiscal year for impairment, or more often if indicators warrant. Impairment charges related to goodwill and other intangible assets were not material for fiscal 2010, 2009 or 2008.

 

Stock-Based Compensation

The per share weighted average fair value of stock options granted during fiscal 2010, 2009 and 2008 was  $6.70,  $6.61 and  $6.46, respectively. The fair value of these options was determined at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

 

                         
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		      February 1,
2009		  

Risk-free interest rate

      3.1%             2.3%             2.9%       

Assumed volatility

      26.4%             41.5%             33.8%       

Assumed dividend yield

      2.9%             3.9%             3.5%       

Assumed lives of option

      5 years             6 years             6 years       

 

Derivatives

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 Company accounts for its derivative financial instruments in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 815-10. The fair value of the Company's derivative financial instruments is discussed in Note 11.

 

Comprehensive Income

Comprehensive Income includes Net Earnings adjusted for certain revenues, expenses, gains and losses that are excluded from Net Earnings under U.S. generally accepted accounting principles. Adjustments to Net Earnings and Accumulated Other Comprehensive Income consist primarily of foreign currency translation adjustments.

 

Foreign Currency Translation

Assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current rate of exchange on the last day of the reporting period. Revenues and expenses are generally translated using average exchange rates for the period and equity transactions are translated using the actual rate on the day of the transaction.

Segment Information

The Company operates within a single reportable segment primarily within North America. Net Sales for the Company outside of the U.S. were  $7.5 billion,  $7.0 billion and  $7.4 billion for fiscal 2010, 2009 and 2008, respectively. Long-lived assets outside of the U.S. totaled  $3.2 billion and  $3.0 billion as of January 30, 2011 and January 31, 2010, respectively.

 

 

Reclassifications

Certain amounts in prior fiscal years have been reclassified to conform with the presentation adopted in the current fiscal year.

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Rationalization Charges
 12 Months Ended
Jan. 30, 2011
Rationalization Charges
Rationalization Charges
2. RATIONALIZATION CHARGES

In fiscal 2008, the Company reduced its square footage growth plans to improve free cash flow, provide stronger returns for the Company and invest in its existing stores to continue improving the customer experience. As a result of this store rationalization plan, the Company determined that it would no longer pursue the opening of approximately 50 U.S. stores that had been in its new store pipeline. The Company expects to dispose of or sublet any remaining pipeline locations over varying periods. The Company also closed 15 underperforming U.S. stores in the second quarter of fiscal 2008, and the Company expects to dispose of or sublet any remaining locations over varying periods.

Also in fiscal 2008, the Company announced that it would exit its EXPO, THD Design Center, Yardbirds and HD Bath businesses (the "Exited Businesses") in order to focus on its core The Home Depot stores. The Company closed the Exited Businesses in the first quarter of fiscal 2009 and expects to dispose of or sublet any remaining locations over varying periods. These steps impacted approximately 5,000 associates in those locations, their support functions and their distribution centers.

Finally, in January 2009 the Company also restructured its support functions to better align the Company's cost structure. These actions impacted approximately 2,000 associates.

The Company did not incur any material charges related to these actions (collectively, the "Rationalization Charges") in fiscal 2010 and recognized  $146 million and  $951 million in total pretax charges for fiscal 2009 and 2008, respectively. The Company does not expect any further material charges related to these actions.

Activity related to Rationalization Charges for fiscal 2010, 2009 and 2008 was as follows (amounts in millions):

 

     Asset
Impairments		      Lease Obligation
Costs, net		     Severance      Other      Total  

Fiscal 2008 Charges

     $ 580        $ 252       $ 78        $ 41        $ 951   

Cash Uses

      —         39        6         18         63   

Non-cash Activity

      542         —        —         3         545   
                                           

Accrued Balance at February 1, 2009

      38         213        72         20         343   
                                           

Fiscal 2009 Charges

      —         84        8         54         146   

Cash Uses

      —         106        80         71         257   

Non-cash Activity

      15         —        —         3         18   
                                           

Accrued Balance at January 31, 2010

      23         191        —         —         214   
                                           

Cash Uses

      —         42        —         —         42   

Non-cash Activity

      19         (9 )      —         —         10   
                                           

Accrued Balance at January 30, 2011

     $ 4        $ 158       $  —        $  —        $ 162   
                                           

Inventory markdown costs reflected in Other are included in Cost of Sales in the accompanying Consolidated Statements of Earnings, and costs related to asset impairments, lease obligations, severance and other miscellaneous costs are included in SG&A expenses. Asset impairment charges, including contractual costs to complete certain assets, were determined based on fair market value using market data for each individual property. Lease obligation costs represent the present value of contractually obligated rental payments offset by estimated sublet income, including estimates of the time required to sublease the locations. The payments related to the leased locations therefore are not generally incremental uses of cash.

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Change In Accounting Principle
 12 Months Ended
Jan. 30, 2011
Change In Accounting Principle
Change In Accounting Principle
3. CHANGE IN ACCOUNTING PRINCIPLE

During fiscal 2008, the Company implemented a new enterprise resource planning ("ERP") system, including a new inventory system, for its retail operations in Canada. Along with this implementation, the Company changed its method of accounting for Merchandise Inventories for its retail operations in Canada from the lower of cost (first-in, first-out) or market, as determined by the retail inventory method, to the lower of cost or market using a weighted-average cost method. As of the end of fiscal 2008, the implementation of the new inventory system and related conversion to the weighted-average cost method for Canadian retail operations was complete.

The new ERP system allows the Company to utilize the weighted-average cost method, which the Company believes will result in greater precision in the costing of inventories and a better matching of cost of sales with revenue generated. The effect of the change on the Merchandise Inventories and Retained Earnings balances was not material. Prior to the inventory system conversion, the Company could not determine the impact of the change to the weighted-average cost method, and therefore, could not retroactively apply the change to periods prior to fiscal 2008.

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HD Supply Disposition
 12 Months Ended
Jan. 30, 2011
HD Supply Disposition
HD Supply Disposition
4. HD SUPPLY DISPOSITION

On August 30, 2007, the Company closed the sale of HD Supply, Inc. In accordance with FASB ASC 360-10, the Company reclassified the results of HD Supply as discontinued operations in its Consolidated Statements of Earnings for all periods presented. Settlement of working capital matters arising from the sale of HD Supply resulted in earnings from discontinued operations of  $41 million, net of tax, in fiscal 2009 and a loss from discontinued operations of  $52 million, net of tax, in fiscal 2008.

In connection with the sale, the Company purchased a 12.5% equity interest in the newly formed HD Supply for  $325 million. In fiscal 2008, the Company determined its 12.5% equity interest in HD Supply was impaired and recorded a  $163 million charge to write-down the investment. In fiscal 2009, the Company determined its equity interest in HD Supply was further impaired and recorded an additional charge of  $163 million to write-down the remaining investment. These charges are included in Interest and Other, net, in the accompanying Consolidated Statements of Earnings.

Also in connection with the sale, the Company guaranteed a  $1.0 billion senior secured amortizing term loan of HD Supply. The Company is responsible for up to  $1.0 billion and any unpaid interest in the event of nonpayment by HD Supply. As reported in the quarterly report Form 10-Q of HD Supply for the period ended October 31, 2010, the outstanding balance of this term loan as of October 31, 2010 was  $940 million. The guaranteed loan is collateralized by certain assets of HD Supply. The original expiration date of the guarantee was August 30, 2012. On March 19, 2010, the Company amended the guarantee to extend the expiration date to April 1, 2014. The fair value of the guarantee at August 30, 2007 was  $16 million and was recorded as a liability of the Company in Other Long-Term Liabilities. The extension of the guarantee increased the fair value of the guarantee to  $67 million, resulting in a  $51 million charge to Interest and Other, net, for fiscal 2010.

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Debt
 12 Months Ended
Jan. 30, 2011
Debt
Debt
5. DEBT

The Company has commercial paper programs that allow for borrowings up to  $2.0 billion. All of the Company's short-term borrowings in fiscal 2010 and 2009 were under these commercial paper programs. In connection with the commercial paper programs, the Company has a back-up credit facility with a consortium of banks for borrowings up to  $2.0 billion. The credit facility expires in July 2013 and contains various restrictive covenants. At January 30, 2011, the Company was in compliance with all of the covenants, and they are not expected to impact the Company's liquidity or capital resources.

 

Short-Term Debt under the commercial paper programs was as follows (amounts in millions):

 

     January 30,
2011		     January 31,
2010		  

Balance outstanding at fiscal year-end

     $ —       $ —   

Maximum amount outstanding at any month-end

     $ —       $ 190   

Average daily short-term borrowings

     $ 5       $ 55   

Weighted average interest rate

      0.4 %      1.1 % 

The Company's Long-Term Debt at the end of fiscal 2010 and 2009 consisted of the following (amounts in millions):

 

    January 30,
2011		      January 31,
2010		  

4.625% Senior Notes; due August 15, 2010; interest payable semi-annually on February 15 and August 15

     $ —         $ 999   

5.20% Senior Notes; due March 1, 2011; interest payable semi-annually on March 1 and September 1

     1,000         1,000   

5.25% Senior Notes; due December 16, 2013; interest payable semi-annually on June 16 and December 16

     1,297         1,258   

5.40% Senior Notes; due March 1, 2016; interest payable semi-annually on March 1 and September 1

     3,033         3,040   

3.95% Senior Notes; due September 15, 2020; interest payable semi-annually on March 15 and September 15

     499         —   

5.875% Senior Notes; due December 16, 2036; interest payable semi-annually on June 16 and December 16

     2,960         2,960   

5.40% Senior Notes; due September 15, 2040; interest payable semi-annually on March 15 and September 15

     499         —   

Capital Lease Obligations; payable in varying installments through January 31, 2055

     452         408   

Other

     9         17   
                

Total debt

     9,749         9,682   

Less current installments

     1,042         1,020   
                

Long-Term Debt, excluding current installments

     $ 8,707         $ 8,662   
                

At January 30, 2011, the Company had outstanding interest rate swaps, accounted for as fair value hedges, that expire on December 16, 2013 with a notional amount of  $1.25 billion that swap fixed rate interest on the Company's  $1.25 billion 5.25% Senior Notes for variable interest equal to LIBOR plus 259 basis points. At January 30, 2011, the approximate fair value of these agreements was an asset of  $47 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 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 issuing long-term debt to refinance debt maturing in fiscal 2011. At January 30, 2011, the approximate fair market value of this agreement was a liability of  $2 million, which is the estimated amount the Company would have paid to settle the agreement and is included in Other Long-Term Liabilities in the accompanying Consolidated Balance Sheets.

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 term of the Senior Notes using the effective interest rate method. Issuance costs were  $8 million and are being amortized over the term of the Senior Notes.

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, which were 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.

During fiscal 2007 and 2008, the Company entered into interest rate swaps, accounted for as fair value hedges, with notional amounts of  $3.0 billion, that swapped fixed rate interest on the Company's  $3.0 billion 5.40% Senior Notes due March 1, 2016 for variable rate interest equal to LIBOR plus 60 to 149 basis points. In fiscal 2008, the Company received  $56 million to settle these swaps, which is being amortized to reduce net Interest Expense over the remaining term of the debt.

The Senior Notes may be redeemed by the Company at any time, in whole or in part, at a 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, or (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 September 2010 Issuance and the 5.25% Senior Notes and the 5.875% Senior Notes issuance (together the "December 2006 Issuance"), holders of the September 2010 Issuance and the 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 30, 2011, the Company had outstanding cross currency swap agreements with a notional amount of  $590 million, accounted for as cash flow hedges, to hedge foreign currency fluctuations on certain intercompany debt. At January 30, 2011, the approximate fair value of these agreements was a liability of  $38 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,  $4 million and  $20 million in fiscal 2010, 2009 and 2008, respectively. Maturities of Long-Term Debt are  $1.0 billion for fiscal 2011,  $29 million for fiscal 2012,  $1.3 billion for fiscal 2013,  $28 million for fiscal 2014,  $26 million for fiscal 2015 and  $7.3 billion thereafter.

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Income Taxes
 12 Months Ended
Jan. 30, 2011
Income Taxes
Income Taxes
6. INCOME TAXES

The components of Earnings from Continuing Operations before Provision for Income Taxes for fiscal 2010, 2009 and 2008 were as follows (amounts in millions):

 

                         
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		      February 1,
2009		  

United States

      $ 4,854         $ 3,586         $ 3,136   

Foreign

      419         396         454   
                            

Total

      $ 5,273         $ 3,982         $ 3,590   
                            

 

The Provision for Income Taxes consisted of the following (amounts in millions):

 

                         
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		     February 1,
2009		  

Current:

                          

Federal

      $ 1,478         $ 1,157        $ 1,283   

State

      181         184        198   

Foreign

      151         195        85   
                           
       1,810         1,536        1,566   
                           

Deferred:

                          

Federal

      79         (121 )      (209 ) 

State

      21         (24 )      (56 ) 

Foreign

      25         (29 )      (23 ) 
                           
       125         (174 )      (288 ) 
                           

Total

      $ 1,935         $ 1,362        $ 1,278   
                           

The Company's combined federal, state and foreign effective tax rates for fiscal 2010, 2009 and 2008, net of offsets generated by federal, state and foreign tax benefits, were approximately 36.7%, 34.2% and 35.6%, respectively.

The reconciliation of the Provision for Income Taxes at the federal statutory rate of 35% to the actual tax expense for the applicable fiscal years was as follows (amounts in millions):

 

                         
     Fiscal Year Ended  
     January 30,
2011		     January 31,
2010		     February 1,
2009		  

Income taxes at federal statutory rate

      $ 1,846        $ 1,394        $ 1,257   

State income taxes, net of federal income tax benefit

      131        104        92   

Other, net

      (42 )      (136 )      (71 ) 
                          

Total

      $ 1,935        $ 1,362        $ 1,278   
                          

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of January 30, 2011 and January 31, 2010 were as follows (amounts in millions):

 

     January 30,
        2011         		        January 31,
        2010         		  

Current:

        

Deferred Tax Assets:

        

Property and equipment

      $ 64           $ 85   

Accrued self-insurance liabilities

      115           109   

Other accrued liabilities

      196           303   

Deferred compensation

      393           372   
                   

Current Deferred Tax Assets

      768           869   

Deferred Tax Liabilities:

        

Accelerated inventory deduction

      (106 )         (114 ) 

Other

      (114 )         (111 ) 
                   

Current Deferred Tax Liabilities

      (220 )         (225 ) 
                   

Current Deferred Tax Assets, net

      548           644   
                   

Noncurrent:

        

Deferred Tax Assets:

        

Accrued self-insurance liabilities

      345           338   

State income taxes

      69           123   

Capital loss carryover

      141           86   

Net operating losses

      66           74   

Foreign tax credit carry forward

      30           65   

Impairment of investment

      120           114   

Other

      212           174   

Valuation allowance

      (66 )         (15 ) 
                   

Noncurrent Deferred Tax Assets

      917           959   

Deferred Tax Liabilities:

        

Property and equipment

      (1,073 )         (1,178 ) 

Goodwill and other intangibles

      (95 )         (88 ) 
                   

Noncurrent Deferred Tax Liabilities

      (1,168 )         (1,266 ) 
                   

Noncurrent Deferred Tax Liabilities, net

      (251 )         (307 ) 
                   

Net Deferred Tax Assets

      $ 297           $ 337   
                   

Current deferred tax assets and current deferred tax liabilities are netted by tax jurisdiction and noncurrent deferred tax assets and noncurrent deferred tax liabilities are netted by tax jurisdiction, and are included in the accompanying Consolidated Balance Sheets as follows (amounts in millions):

 

                 
     January 30,
2011		     January 31,
2010		  

Other Current Assets

      $ 553        $ 650   

Other Assets

      21        12   

Other Accrued Expenses

      (5 )      (6 ) 

Deferred Income Taxes

      (272 )      (319 ) 
                  

Net Deferred Tax Assets (Liabilities)

      $ 297        $ 337   
                  

The Company believes that the realization of the deferred tax assets is more likely than not, based upon the expectation that it will generate the necessary taxable income in future periods, and except for certain net operating and capital losses discussed below, no valuation reserves have been provided.

 

At January 30, 2011, the Company had state and foreign net operating loss carryforwards available to reduce future taxable income, expiring at various dates from 2011 to 2028. Management has concluded that it is more likely than not that the tax benefits related to the net operating losses will be realized. However, certain foreign net operating losses are in jurisdictions where the expiration period is too short to be assured of utilization. Therefore, a valuation allowance has been provided to reduce the deferred tax asset related to net operating losses to an amount that is more likely than not to be realized. Total valuation allowances related to net operating losses at January 30, 2011 and January 31, 2010 were  $21 million and  $15 million, respectively.

As a result of its sale of HD Supply, the Company incurred a tax loss, resulting in a net capital loss carryover of approximately  $397 million as of January 30, 2011. Portions of the net capital loss carryover will expire in fiscal years 2013 through 2015 if not used. The Company has concluded that it is not more likely than not that all of the tax benefits related to the capital loss carryover will be realized based on its ability to generate adequate capital gain income during the carryover period. Therefore, a valuation allowance of  $45 million has been provided.

The Company had foreign tax credit carryforwards of  $30 million and  $65 million as of January 30, 2011 and January 31, 2010, respectively. The foreign tax credit carryforwards will expire in 2020. Management has concluded that it is more likely than not that the tax benefits related to the foreign tax credit carryforwards will be realized based on the Company's ability to generate foreign source income during the carryforward period. Therefore, no valuation allowance has been provided.

The Company has not provided for U.S. deferred income taxes on approximately  $2.0 billion of undistributed earnings of international subsidiaries because of its intention to indefinitely reinvest these earnings outside the U.S. The determination of the amount of the unrecognized deferred U.S. income tax liability related to the undistributed earnings is not practicable; however, unrecognized foreign income tax credits would be available to reduce a portion of this liability.

The Company's income tax returns are routinely examined by domestic and foreign tax authorities. The Company's U.S. federal and Canadian tax returns for fiscal years 2005 through 2007 are currently under audit by the IRS and the Canadian tax authorities. There are also ongoing U.S. state and local and other foreign audits covering tax years 2003 to 2009. The Company does not expect the results from any income tax audit to have a material impact on the Company's financial statements.

The Company believes that certain adjustments under examination by the IRS and in certain states will be agreed upon within the next twelve months. The Company has classified approximately  $63 million of the reserve for unrecognized tax benefits as a short-term liability in the accompanying Consolidated Balance Sheets. Final settlement of these audit issues may result in payments that are more or less than these amounts, but the Company does not anticipate the resolution of these matters will result in a material change to its consolidated financial position or results of operations.

Reconciliations of the beginning and ending amount of gross unrecognized tax benefits for continuing operations for fiscal 2010, 2009 and 2008 were as follows (amounts in millions):

 

                         
     January 30,
2011		     January 31,
2010		     February 1,
2009		  

Unrecognized tax benefits balance at beginning of fiscal year

     $ 659       $ 695       $ 608   

Additions based on tax positions related to the current year

      174        55        67   

Additions for tax positions of prior years

      84        33        231   

Reductions for tax positions of prior years

      (181 )      (28 )      (142 ) 

Reductions due to settlements

      (65 )      (94 )      (65 ) 

Reductions due to lapse of statute of limitations

      (9 )      (2 )      (4 ) 
                          

Unrecognized tax benefits balance at end of fiscal year

     $

662

       $ 659       $ 695   
                          

The amount of unrecognized tax benefits was  $298 million,  $386 million and  $401 million as of January 30, 2011, January 31, 2010 and February 1, 2009, respectively, that if recognized would affect the annual effective income tax rate.

Interest and penalties associated with uncertain tax positions provided income of  $32 million in fiscal 2010, expense of  $41 million in fiscal 2009 and income of  $19 million in fiscal 2008. Total accrued interest and penalties as of January 30, 2011 and January 31, 2010 are  $84 million and  $138 million, respectively. Interest and penalties are included in Interest Expense and SG&A, respectively, in the accompanying Consolidated Statements of Earnings. 
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Employee Stock Plans
 12 Months Ended
Jan. 30, 2011
Employee Stock Plans
Employee Stock Plans
7. EMPLOYEE STOCK PLANS

The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan ("2005 Plan") and The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan ("1997 Plan" and collectively with the 2005 Plan, the "Plans") provide that incentive and non-qualified stock options, stock appreciation rights, restricted shares, performance shares, performance units and deferred shares may be issued to selected associates, officers and directors of the Company. Under the 2005 Plan, the maximum number of shares of the Company's common stock authorized for issuance is 255 million shares, with any award other than a stock option reducing the number of shares available for issuance by 2.11 shares. As of January 30, 2011, there were 175 million shares available for future grants under the 2005 Plan. No additional equity awards could be issued from the 1997 Plan after the adoption of the 2005 Plan on May 26, 2005.

Under the terms of the Plans, incentive stock options and non-qualified stock options must have an exercise price at or above the fair market value of the Company's stock on the date of the grant. Typically, incentive stock options and non-qualified stock options vest at the rate of 25% per year commencing on the first or second anniversary date of the grant and expire on the tenth anniversary date of the grant. Certain of the non-qualified stock options also include performance options which vest on the later of the first anniversary date of the grant and the date the closing price of the Company's common stock has been 25% greater than the exercise price of the options for 30 consecutive trading days. Additionally, certain stock options may become non-forfeitable upon age 60, provided the associate has had five years of continuous service. The Company recognized  $20 million,  $19 million and  $47 million of stock-based compensation expense in fiscal 2010, 2009 and 2008, respectively, related to stock options.

Restrictions on the restricted stock issued under the Plans generally lapse according to one of the following schedules: (1) the restrictions on the restricted stock lapse over various periods up to five years, (2) the restrictions on 25% of the restricted stock lapse upon the third and sixth anniversaries of the date of issuance with the remaining 50% of the restricted stock lapsing upon the associate's attainment of age 62, or (3) the restrictions on 25% of the restricted stock lapse upon the third and sixth anniversaries of the date of issuance with the remaining 50% of the restricted stock lapsing upon the earlier of the associate's attainment of age 60 or the tenth anniversary date. The Company has also granted performance shares under the Plans, the payout of which is dependent on either (1) the Company's total shareholder return percentile ranking compared to the performance of individual companies included in the S&P 500 index at the end of the three-year performance cycle, or (2) the Company's performance against target average return on invested capital and operating profit over a three-year performance cycle. Additionally, certain awards may become non-forfeitable upon the attainment of age 60, provided the associate has had five years of continuous service. The fair value of the restricted stock and performance shares is expensed over the period during which the restrictions lapse. The Company recorded stock-based compensation expense related to restricted stock and performance shares of  $167 million,  $158 million and  $109 million in fiscal 2010, 2009 and 2008, respectively.

In fiscal 2010, 2009 and 2008, there were an aggregate of 479 thousand, 666 thousand and 641 thousand deferred shares, respectively, granted under the Plans. For associates, each deferred share entitles the individual to one share of common stock to be received up to five years after the grant date of the deferred shares, subject to certain deferral rights of the associate. Additionally, certain awards may become non-forfeitable upon age 60, provided the associate has had five years of continuous service. The Company recorded stock-based compensation expense related to deferred shares of  $14 million,  $14 million and  $9 million in fiscal 2010, 2009 and 2008, respectively.

As of January 30, 2011, there were 2 million non-qualified stock options outstanding under non-qualified stock option plans that are not part of the Plans.

The Company maintains two Employee Stock Purchase Plans ("ESPPs") (U.S. and non-U.S. plans). The plan for U.S. associates is a tax-qualified plan under Section 423 of the Internal Revenue Code. The non-U.S. plan is not a Section 423 plan. As of January 30, 2011, there were 11 million shares available under the plan for U.S associates and 20 million shares available under the non-U.S. plan. The purchase price of shares under the ESPPs is equal to 85% of the stock's fair market value on the last day of the purchase period, which is a six-month period ending on December 31 and June 30 of each year. During fiscal 2010, there were 3 million shares purchased under the ESPPs at an average price of  $26.50. Under the outstanding ESPPs as of January 30, 2011, employees have contributed  $7 million to purchase shares at 85% of the stock's fair market value on the last day (June 30, 2011) of the purchase period. The Company recognized  $13 million,  $10 million and  $11 million of stock-based compensation expense in fiscal 2010, 2009 and 2008, respectively, related to the ESPPs.

In total, the Company recorded stock-based compensation expense, including the expense of stock options, ESPPs, restricted stock, performance shares and deferred shares, of  $214 million,  $201 million and  $176 million, in fiscal 2010, 2009 and 2008, respectively.

The following table summarizes stock options outstanding at January 30, 2011, January 31, 2010 and February 1, 2009, and changes during the fiscal years ended on these dates (shares in thousands):

 

     Number of
Shares		     Weighted
Average Exercise
Price		  

Outstanding at February 3, 2008

      52,365        $ 38.98   
                

Granted

      5,226        26.09   

Exercised

      (777 )      22.55   

Canceled

      (4,800 )      39.14   
                

Outstanding at February 1, 2009

      52,014        $ 37.91   
                

Granted

      4,174        23.29   

Exercised

      (374 )      24.50   

Canceled

      (6,505 )      37.65   
                

Outstanding at January 31, 2010

      49,309        $ 36.81   
                

Granted

      3,723        32.24   

Exercised

      (1,294 )      26.63   

Canceled

      (7,271 )      43.95   
                

Outstanding at January 30, 2011

      44,467        $ 35.56   
                

The total intrinsic value of stock options exercised was  $9 million,  $1 million and  $4 million in fiscal 2010, 2009 and 2008, respectively. As of January 30, 2011, there were approximately 44 million stock options outstanding with a weighted average remaining life of four years and an intrinsic value of  $51 million. As of January 30, 2011, there were approximately 33 million stock options exercisable with a weighted average exercise price of  $38.21, a weighted average remaining life of two years, and an intrinsic value of  $49 million. As of January 30, 2011, there were approximately 41 million stock options vested or expected to ultimately vest. As of January 30, 2011, there was  $45 million of unamortized stock-based compensation expense related to stock options, which is expected to be recognized over a weighted average period of two years.

 

The following table summarizes restricted stock and performance shares outstanding at January 30, 2011 (shares in thousands):

 

     Number of
Shares		     Weighted
Average Grant
Date Fair Value		  

Outstanding at February 3, 2008

      11,715        $ 39.14   
                

Granted

      7,938        27.14   

Restrictions lapsed

      (1,251 )      34.37   

Canceled

      (2,115 )      34.86   
                

Outstanding at February 1, 2009

      16,287        $ 34.22   
                

Granted

      8,257        23.41   

Restrictions lapsed

      (1,686 )      34.65   

Canceled

      (2,195 )      31.84   
                

Outstanding at January 31, 2010

      20,663        $ 30.11   
                

Granted

      5,799        32.31   

Restrictions lapsed

      (5,276 )      32.28   

Canceled

      (1,747 )      30.11   
                

Outstanding at January 30, 2011

      19,439        $ 30.18   
                

As of January 30, 2011, there was  $259 million of unamortized stock-based compensation expense related to restricted stock and performance shares, which is expected to be recognized over a weighted average period of two years. The total fair value of restricted stock and performance shares vesting during fiscal 2010, 2009 and 2008 was  $168 million,  $41 million and  $33 million, respectively.

 
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Leases
 12 Months Ended
Jan. 30, 2011
Leases
Leases
8. LEASES

The Company leases certain retail locations, office space, warehouse and distribution space, equipment and vehicles. While most of the leases are operating leases, certain locations and equipment are leased under capital leases. As leases expire, it can be expected that, in the normal course of business, certain leases will be renewed or replaced.

Certain lease agreements include escalating rents over the lease terms. The Company expenses rent on a straight-line basis over the lease term which commences on the date the Company has the right to control the property. The cumulative expense recognized on a straight-line basis in excess of the cumulative payments is included in Other Accrued Expenses and Other Long-Term Liabilities in the accompanying Consolidated Balance Sheets.

Total rent expense, net of minor sublease income for fiscal 2010, 2009 and 2008 was  $821 million,  $823 million and  $846 million, respectively. Certain store leases also provide for contingent rent payments based on percentages of sales in excess of specified minimums. Contingent rent expense for fiscal 2010, 2009 and 2008 was approximately  $3 million,  $4 million and  $5 million, respectively. Real estate taxes, insurance, maintenance and operating expenses applicable to the leased property are obligations of the Company under the lease agreements.

 

The approximate future minimum lease payments under capital and all other leases at January 30, 2011 were as follows (amounts in millions):

 

Fiscal Year

    Capital
Leases		      Operating
Leases		  

2011

      $ 114         $ 783   

2012

      96         699   

2013

      96         639   

2014

      92         582   

2015

      87         543   

Thereafter through 2097

      774         4,935   
                 
     1,259         $ 8,181   
           

Less imputed interest

      807      
           

Net present value of capital lease obligations

      452      

Less current installments

      41      
           

Long-term capital lease obligations, excluding current installments

      $ 411      
           

Short-term and long-term obligations for capital leases are included in the accompanying Consolidated Balance Sheets in Current Installments of Long-Term Debt and Long-Term Debt, respectively. The assets under capital leases recorded in Property and Equipment, net of amortization, totaled  $336 million and  $299 million at January 30, 2011 and January 31, 2010, respectively.

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Employee Benefit Plans
 12 Months Ended
Jan. 30, 2011
Employee Benefit Plans
Employee Benefit Plans
9. EMPLOYEE BENEFIT PLANS

The Company maintains active defined contribution retirement plans for its employees (the "Benefit Plans"). All associates satisfying certain service requirements are eligible to participate in the Benefit Plans. The Company makes cash contributions each payroll period up to specified percentages of associates' contributions as approved by the Board of Directors.

The Company also maintains a restoration plan to provide certain associates deferred compensation that they would have received under the Benefit Plans as a matching contribution if not for the maximum compensation limits under the Internal Revenue Code. The Company funds the restoration plan through contributions made to a grantor trust, which are then used to purchase shares of the Company's common stock in the open market.

The Company's contributions to the Benefit Plans and the restoration plan were  $171 million,  $161 million and  $158 million for fiscal 2010, 2009 and 2008, respectively. At January 30, 2011, the Benefit Plans and the restoration plan held a total of 16 million shares of the Company's common stock in trust for plan participants.

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Basic and Diluted Weighted Average Common Shares
 12 Months Ended
Jan. 30, 2011
Basic and Diluted Weighted Average Common Shares
Basic and Diluted Weighted Average Common Shares
10. BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES

The reconciliation of basic to diluted weighted average common shares for fiscal 2010, 2009 and 2008 was as follows (amounts in millions):

 

     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		      February 1,
2009		  

Weighted average common shares

      1,648         1,683         1,682   

Effect of potentially dilutive securities:

         

Stock Plans

      10         9         4   
                          

Diluted weighted average common shares

      1,658         1,692         1,686   
                          

Stock plans consist of shares granted under the Company's employee stock plans as described in Note 7 to the Consolidated Financial Statements. Options to purchase 39 million, 48 million and 52 million shares of common stock at January 30, 2011, January 31, 2010 and February 1, 2009, respectively, were excluded from the computation of Diluted Earnings per Share because their effect would have been anti-dilutive.

 
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Fair Value Measurements
 12 Months Ended
Jan. 30, 2011
Fair Value Measurements
Fair Value Measurements
11. FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

· Level 1 – Observable inputs that reflect quoted prices in active markets

· Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable

· Level 3 – Unobservable inputs in which little or no market data exists, therefore requiring the Company to                         develop its own assumptions

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 January 30, 2011 and January 31, 2010 were as follows (amounts in millions):

 

     Fair Value at
January 30, 2011 Using		      Fair Value at
January 31, 2010 Using		  
         Level 1      Level 2     Level 3              Level 1      Level 2     Level 3      

Derivative agreements - assets

     $ –         $ 47       $ –         $ –         $ 15       $  –    

Derivative agreements - liabilities

      –          (40 )      –          –          (4 )      –    
                                                   

Total

     $ –         $ 7       $ –         $ –         $ 11       $  –    
                                                   

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 5.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The assets and liabilities of the Company that were measured at fair value on a nonrecurring basis during fiscal 2010 and fiscal 2009 were as follows (amounts in millions):

 

     Fair Value Measured
During Fiscal 2010
Level 3		     Gains (Losses)  

Store Rationalization - lease obligation costs, net

     $ (158 )     $ (9 ) 

Guarantee of HD Supply loan

     $ (67 )      (51 ) 
          

Total for fiscal 2010

       $ (60 ) 
          
     Fair Value Measured
During Fiscal 2009
Level 3		     Gains (Losses)  

HD Supply investment

     $ —       $ (163 ) 

Store Rationalization - lease obligation costs, net

     $ (191 )      (84 ) 
          

Total for fiscal 2009

       $ (247 ) 
          

During fiscal 2009, the Company impaired the remaining value of its investment in HD Supply using fair value measurements with unobservable inputs (level 3), as further discussed in Note 4. Lease obligation costs included in the Company's Rationalization Charges were measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3), as further discussed in Note 2. Additionally, the guarantee of the HD Supply loan was measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3), as further discussed in Note 4.

Long-lived assets and 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 goodwill and other intangible assets and long-lived assets in fiscal 2010 and 2009 were not material, as further discussed in Note 1 under the captions "Goodwill and Other Intangible Assets" and "Impairment of Long-Lived Assets," respectively.

The aggregate fair value of the Company's Senior Notes, based on quoted market prices (level 1), was  $9.8 billion and  $9.5 billion at January 30, 2011 and January 31, 2010, respectively, compared to a carrying value of  $9.3 billion at both January 30, 2011 and January 31, 2010.

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Commitments and Contingencies
 12 Months Ended
Jan. 30, 2011
Commitments and Contingencies
Commitments and Contingencies
12. COMMITMENTS AND CONTINGENCIES

At January 30, 2011, the Company was contingently liable for approximately  $606 million under outstanding letters of credit and open accounts issued for certain business transactions, including insurance programs, trade contracts and construction contracts. The Company's letters of credit are primarily performance-based and are not based on changes in variable components, a liability or an equity security of the other party.

The Company is involved in litigation arising from the normal course of business. In management's opinion, this litigation is not expected to have a material adverse effect on the Company's consolidated financial condition or results of operations.

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Quarterly Financial Data
 12 Months Ended
Jan. 30, 2011
Quarterly Financial Data
Quarterly Financial Data
13. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the quarterly consolidated results of operations from continuing operations for the fiscal years ended January 30, 2011 and January 31, 2010 (amounts in millions, except per share data):

                                         
     Net Sales      Gross
Profit		        Earnings from
Continuing
Operations		        Basic
Earnings per
Share from
Continuing
Operations		        Diluted
Earnings per
Share from
Continuing
Operations		  

Fiscal Year Ended January 30, 2011:

                                                   

First Quarter

      $ 16,863         $ 5,794           $ 725          $  0.43           $  0.43   

Second Quarter

      19,410         6,582           1,192           0.72           0.72   

Third Quarter

      16,598         5,685           834           0.51           0.51   

Fourth Quarter

      15,126         5,243           587           0.36           0.36   
                                                    

Fiscal Year

      $ 67,997         $ 23,304           $ 3,338          $ 2.03           $ 2.01   
                                                    

Fiscal Year Ended January 31, 2010:

                                                   

First Quarter

      $ 16,175         $ 5,450           $ 514          $ 0.31           $ 0.30   

Second Quarter

      19,071         6,388           1,116           0.66           0.66   

Third Quarter

      16,361         5,561           689           0.41           0.41   

Fourth Quarter

      14,569         5,013           301           0.18           0.18   
                                                    

Fiscal Year

      $ 66,176         $ 22,412           $ 2,620          $ 1.56           $ 1.55   
                                                    

Note: The quarterly data may not sum to fiscal year totals.

 

 
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Summary of Significant Accounting Policies (Policy)
 12 Months Ended
Jan. 30, 2011
Summary of Significant Accounting Policies
Business, Consolidation and Presentation
 

Business, Consolidation and Presentation

The Home Depot, Inc. and its subsidiaries (the "Company") operate The Home Depot stores, which are full-service, warehouse-style stores averaging approximately 105,000 square feet in size. The stores stock approximately 30,000 to 40,000 different kinds of building materials, home improvement supplies and lawn and garden products that are sold to do-it-yourself customers, do-it-for-me customers and professional customers. At the end of fiscal 2010, the Company was operating 2,248 stores, which included 1,976 The Home Depot stores in the United States, including the Commonwealth of Puerto Rico and the territories of the U.S. Virgin Islands and Guam ("U.S."), 179 The Home Depot stores in Canada, 85 The Home Depot stores in Mexico and 8 The Home Depot stores in China. The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation.
Fiscal Period

Fiscal Year

The Company's fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31. Fiscal years ended January 30, 2011 ("fiscal 2010"), January 31, 2010 ("fiscal 2009") and February 1, 2009 ("fiscal 2008") include 52 weeks.
Use of Estimates

Use of Estimates

Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing these financial statements in conformity with U.S. generally accepted accounting principles. Actual results could differ from these estimates.
Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of Cash and Cash Equivalents, Receivables and Accounts Payable approximate fair value due to the short-term maturities of these financial instruments. The fair value of the Company's investments is discussed under the caption "Short-Term Investments" in this Note 1. The fair value of the Company's Long-Term Debt is discussed in Note 11.
Cash Equivalents

Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company's cash equivalents are carried at fair market value and consist primarily of high-grade commercial paper, money market funds and U.S. government agency securities.
Short-Term Investments

Short-Term Investments

Short-term investments are recorded at fair value based on current market rates and are classified as available-for-sale. The Company's short-term investments are included in Other Current Assets in the accompanying Consolidated Balance Sheets.
Accounts Receivable

Accounts Receivable

The Company has an agreement with a third-party service provider who directly extends credit to customers, manages the Company's private label credit card program and owns the related receivables. The Company evaluated the third-party entities holding the receivables under the program and concluded that they should not be consolidated by the Company. The agreement with the third-party service provider expires in 2018, with the Company having the option, but no obligation, to purchase the receivables at the end of the agreement. The deferred interest charges incurred by the Company for its deferred financing programs offered to its customers are included in Cost of Sales. The interchange fees charged to the Company for the customers' use of the cards and the profit sharing with the third-party administrator are included in Selling, General and Administrative expenses ("SG&A"). The sum of the three is referred to by the Company as "the cost of credit" of the private label credit card program.

In addition, certain subsidiaries of the Company extend credit directly to customers in the ordinary course of business. The receivables due from customers were  $42 million and  $38 million as of January 30, 2011 and January 31, 2010, respectively. The Company's valuation reserve related to accounts receivable was not material to the Consolidated Financial Statements of the Company as of the end of fiscal 2010 or 2009.

Merchandise Inventories

Merchandise Inventories

The majority of the Company's Merchandise Inventories are stated at the lower of cost (first-in, first-out) or market, as determined by the retail inventory method. As the inventory retail value is adjusted regularly to reflect market conditions, the inventory valued using the retail method approximates the lower of cost or market. Certain subsidiaries, including retail operations in Canada, Mexico and China, and distribution centers, record Merchandise Inventories at the lower of cost or market, as determined by a cost method. These Merchandise Inventories represent approximately 20% of the total Merchandise Inventories balance. The Company evaluates the inventory valued using a cost method at the end of each quarter to ensure that it is carried at the lower of cost or market. The valuation allowance for Merchandise Inventories valued under a cost method was not material to the Consolidated Financial Statements of the Company as of the end of fiscal 2010 or 2009.

Independent physical inventory counts or cycle counts are taken on a regular basis in each store and distribution center to ensure that amounts reflected in the accompanying Consolidated Financial Statements for Merchandise Inventories are properly stated. During the period between physical inventory counts in stores, the Company accrues for estimated losses related to shrink on a store-by-store basis based on historical shrink results and current trends in the business. Shrink (or in the case of excess inventory, "swell") is the difference between the recorded amount of inventory and the physical inventory. Shrink may occur due to theft, loss, inaccurate records for the receipt of inventory or deterioration of goods, among other things.
Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. The Company provides for federal, state and foreign income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company and its eligible subsidiaries file a consolidated U.S. federal income tax return. Non-U.S. subsidiaries and certain U.S. subsidiaries, which are consolidated for financial reporting purposes, are not eligible to be included in the Company's consolidated U.S. federal income tax return. Separate provisions for income taxes have been determined for these entities. The Company intends to reinvest substantially all of the unremitted earnings of its non-U.S. subsidiaries and postpone their remittance indefinitely. Accordingly, no provision for U.S. income taxes for these non-U.S. subsidiaries was recorded in the accompanying Consolidated Statements of Earnings.
Depreciation and Amortization

Depreciation and Amortization

The Company's Buildings, Furniture, Fixtures and Equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold Improvements are amortized using the straight-line method over the original term of the lease or the useful life of the improvement, whichever is shorter. The Company's Property and Equipment is depreciated using the following estimated useful lives:

 

         
     Life  

Buildings

      5 – 45 years   

Furniture, Fixtures and Equipment

      2 – 20 years   

Leasehold Improvements

      5 – 45 years   
Capitalized Software Costs

Capitalized Software Costs

The Company capitalizes certain costs related to the acquisition and development of software and amortizes these costs using the straight-line method over the estimated useful life of the software, which is three to six years. These costs are included in Furniture, Fixtures and Equipment in the accompanying Consolidated Balance Sheets. Certain development costs not meeting the criteria for capitalization are expensed as incurred.
Revenues

Revenues

The Company recognizes revenue, net of estimated returns and sales tax, at the time the customer takes possession of merchandise or receives services. The liability for sales returns is estimated based on historical return levels. When the Company receives payment from customers before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as Deferred Revenue in the accompanying Consolidated Balance Sheets until the sale or service is complete. The Company also records Deferred Revenue for the sale of gift cards and recognizes this revenue upon the redemption of gift cards in Net Sales. Gift card breakage income is recognized based upon historical redemption patterns and represents the balance of gift cards for which the Company believes the likelihood of redemption by the customer is remote. During fiscal 2010, 2009 and 2008, the Company recognized  $46 million,  $40 million and  $37 million, respectively, of gift card breakage income. This income is included in the accompanying Consolidated Statements of Earnings as a reduction in SG&A.

Services Revenue

Services Revenue

Net Sales include services revenue generated through a variety of installation, home maintenance and professional service programs. In these programs, the customer selects and purchases material for a project and the Company provides or arranges professional installation. These programs are offered through the Company's stores. Under certain programs, when the Company provides or arranges the installation of a project and the subcontractor provides material as part of the installation, both the material and labor are included in services revenue. The Company recognizes this revenue when the service for the customer is complete.

All payments received prior to the completion of services are recorded in Deferred Revenue in the accompanying Consolidated Balance Sheets. Services revenue was  $2.7 billion,  $2.6 billion and  $3.1 billion for fiscal 2010, 2009 and 2008, respectively.

Self-Insurance

Self-Insurance

The Company is self-insured for certain losses related to general liability, workers' compensation, medical, product liability and automobile claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. The expected ultimate cost of claims is estimated based upon analysis of historical data and actuarial estimates.

Prepaid Advertising

Prepaid Advertising

Television and radio advertising production costs, along with media placement costs, are expensed when the advertisement first appears. Amounts included in Other Current Assets in the accompanying Consolidated Balance Sheets relating to prepayments of production costs for print and broadcast advertising as well as sponsorship promotions were not material at the end of fiscal 2010 and 2009.
Vendor Allowances

 

Vendor Allowances

Vendor allowances primarily consist of volume rebates that are earned as a result of attaining certain purchase levels and advertising co-op allowances for the promotion of vendors' products that are typically based on guaranteed minimum amounts with additional amounts being earned for attaining certain purchase levels. These vendor allowances are accrued as earned, with those allowances received as a result of attaining certain purchase levels accrued over the incentive period based on estimates of purchases.

Volume rebates and certain advertising co-op allowances earned are initially recorded as a reduction in Merchandise Inventories and a subsequent reduction in Cost of Sales when the related product is sold. Certain advertising co-op allowances that are reimbursements of specific, incremental and identifiable costs incurred to promote vendors' products are recorded as an offset against advertising expense. In fiscal 2010, 2009 and 2008, gross advertising expense was  $864 million,  $897 million and  $1.0 billion, respectively, and is included in SG&A. Specific, incremental and identifiable advertising co-op allowances were  $90 million,  $105 million and  $107 million for fiscal 2010, 2009 and 2008, respectively, and are recorded as an offset to advertising expense in SG&A.

Cost of Sales

Cost of Sales

Cost of Sales includes the actual cost of merchandise sold and services performed, the cost of transportation of merchandise from vendors to the Company's stores, locations or customers, the operating cost of the Company's sourcing and distribution network and the cost of deferred interest programs offered through the Company's private label credit card program.

The cost of handling and shipping merchandise from the Company's stores, locations or distribution centers to the customer is classified as SG&A. The cost of shipping and handling, including internal costs and payments to third parties, classified as SG&A was  $438 million,  $426 million and  $501 million in fiscal 2010, 2009 and 2008, respectively.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets each quarter for indicators of potential impairment. Indicators of impairment include current period losses combined with a history of losses, management's decision to relocate or close a store or other location before the end of its previously estimated useful life, or when changes in other circumstances indicate the carrying amount of an asset may not be recoverable. The evaluation for long-lived assets is performed at the lowest level of identifiable cash flows, which is generally the individual store level.

The assets of a store with indicators of impairment are evaluated by comparing its undiscounted cash flows with its carrying value. The estimate of cash flows includes management's assumptions of cash inflows and outflows directly resulting from the use of those assets in operations, including gross margin on Net Sales, payroll and related items, occupancy costs, insurance allocations and other costs to operate a store. If the carrying value is greater than the undiscounted cash flows, an impairment loss is recognized for the difference between the carrying value and the estimated fair market value. Impairment losses are recorded as a component of SG&A in the accompanying Consolidated Statements of Earnings. When a leased location closes, the Company also recognizes in SG&A the net present value of future lease obligations less estimated sublease income.

As part of its Rationalization Charges, the Company recorded no asset impairments in fiscal 2010 and 2009 and recorded  $580 million of asset impairments in fiscal 2008. Also as part of its Rationalization Charges, the Company recorded no lease obligation costs in fiscal 2010 and recorded  $84 million and  $252 million of lease obligation costs in fiscal 2009 and 2008, respectively. See Note 2 for more details on the Rationalization Charges. The Company also recorded impairments and other lease obligation costs on other closings and relocations in the ordinary course of business, which were not material to the Consolidated Financial Statements in fiscal 2010, 2009 and 2008.
Goodwill and Other Intangible Assets

 

Goodwill and Other Intangible Assets

Goodwill represents the excess of purchase price over the fair value of net assets acquired. The Company does not amortize goodwill, but does assess the recoverability of goodwill in the third quarter of each fiscal year, or more often if indicators warrant, by determining whether the fair value of each reporting unit supports its carrying value. The fair values of the Company's identified reporting units were estimated using the present value of expected future discounted cash flows.

The Company amortizes the cost of other intangible assets over their estimated useful lives, which range up to 20 years, unless such lives are deemed indefinite. Intangible assets with indefinite lives are tested in the third quarter of each fiscal year for impairment, or more often if indicators warrant. Impairment charges related to goodwill and other intangible assets were not material for fiscal 2010, 2009 or 2008.

Stock-Based Compensation

Stock-Based Compensation

The per share weighted average fair value of stock options granted during fiscal 2010, 2009 and 2008 was  $6.70,  $6.61 and  $6.46, respectively. The fair value of these options was determined at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

 

                         
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		      February 1,
2009		  

Risk-free interest rate

      3.1%             2.3%             2.9%       

Assumed volatility

      26.4%             41.5%             33.8%       

Assumed dividend yield

      2.9%             3.9%             3.5%       

Assumed lives of option

      5 years             6 years             6 years       
Derivatives

Derivatives

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 Company accounts for its derivative financial instruments in accordance with the Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 815-10. The fair value of the Company's derivative financial instruments is discussed in Note 11.
Comprehensive Income

Comprehensive Income

Comprehensive Income includes Net Earnings adjusted for certain revenues, expenses, gains and losses that are excluded from Net Earnings under U.S. generally accepted accounting principles. Adjustments to Net Earnings and Accumulated Other Comprehensive Income consist primarily of foreign currency translation adjustments.

Foreign Currency Translation

Foreign Currency Translation

Assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current rate of exchange on the last day of the reporting period. Revenues and expenses are generally translated using average exchange rates for the period and equity transactions are translated using the actual rate on the day of the transaction.

Segment Information

Segment Information

The Company operates within a single reportable segment primarily within North America. Net Sales for the Company outside of the U.S. were  $7.5 billion,  $7.0 billion and  $7.4 billion for fiscal 2010, 2009 and 2008, respectively. Long-lived assets outside of the U.S. totaled  $3.2 billion and  $3.0 billion as of January 30, 2011 and January 31, 2010, respectively.

Reclassifications

 

Reclassifications

Certain amounts in prior fiscal years have been reclassified to conform with the presentation adopted in the current fiscal year.

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Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Jan. 30, 2011
Summary of Significant Accounting Policies
Depreciation and Amortization
         
     Life  

Buildings

      5 – 45 years   

Furniture, Fixtures and Equipment

      2 – 20 years   

Leasehold Improvements

      5 – 45 years   
Fair value of options determined at date of grant
                         
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		      February 1,
2009		  

Risk-free interest rate

      3.1%             2.3%             2.9%       

Assumed volatility

      26.4%             41.5%             33.8%       

Assumed dividend yield

      2.9%             3.9%             3.5%       

Assumed lives of option

      5 years             6 years             6 years       
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Rationalization Charges (Tables)
 12 Months Ended
Jan. 30, 2011
Rationalization Charges
Restructuring Reserve Activity
     Asset
Impairments		      Lease Obligation
Costs, net		     Severance      Other      Total  

Fiscal 2008 Charges

     $ 580        $ 252       $ 78        $ 41        $ 951   

Cash Uses

      —         39        6         18         63   

Non-cash Activity

      542         —        —         3         545   
                                           

Accrued Balance at February 1, 2009

      38         213        72         20         343   
                                           

Fiscal 2009 Charges

      —         84        8         54         146   

Cash Uses

      —         106        80         71         257   

Non-cash Activity

      15         —        —         3         18   
                                           

Accrued Balance at January 31, 2010

      23         191        —         —         214   
                                           

Cash Uses

      —         42        —         —         42   

Non-cash Activity

      19         (9 )      —         —         10   
                                           

Accrued Balance at January 30, 2011

     $ 4        $ 158       $  —        $  —        $ 162   
                                           
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Debt (Tables)
 12 Months Ended
Jan. 30, 2011
Debt
Short-Term Debt
     January 30,
2011		     January 31,
2010		  

Balance outstanding at fiscal year-end

     $ —       $ —   

Maximum amount outstanding at any month-end

     $ —       $ 190   

Average daily short-term borrowings

     $ 5       $ 55   

Weighted average interest rate

      0.4 %      1.1 % 
Long-Term Debt
    January 30,
2011		      January 31,
2010		  

4.625% Senior Notes; due August 15, 2010; interest payable semi-annually on February 15 and August 15

     $ —         $ 999   

5.20% Senior Notes; due March 1, 2011; interest payable semi-annually on March 1 and September 1

     1,000         1,000   

5.25% Senior Notes; due December 16, 2013; interest payable semi-annually on June 16 and December 16

     1,297         1,258   

5.40% Senior Notes; due March 1, 2016; interest payable semi-annually on March 1 and September 1

     3,033         3,040   

3.95% Senior Notes; due September 15, 2020; interest payable semi-annually on March 15 and September 15

     499         —   

5.875% Senior Notes; due December 16, 2036; interest payable semi-annually on June 16 and December 16

     2,960         2,960   

5.40% Senior Notes; due September 15, 2040; interest payable semi-annually on March 15 and September 15

     499         —   

Capital Lease Obligations; payable in varying installments through January 31, 2055

     452         408   

Other

     9         17   
                

Total debt

     9,749         9,682   

Less current installments

     1,042         1,020   
                

Long-Term Debt, excluding current installments

     $ 8,707         $ 8,662   
                
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Income Taxes (Tables)
 12 Months Ended
Jan. 30, 2011
Income Taxes
Components of Earnings from Continuing Operations before Provision for Income Taxes
                         
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		      February 1,
2009		  

United States

      $ 4,854         $ 3,586         $ 3,136   

Foreign

      419         396         454   
                            

Total

      $ 5,273         $ 3,982         $ 3,590   
                            
Provision for Income Taxes
                         
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		     February 1,
2009		  

Current:

                          

Federal

      $ 1,478         $ 1,157        $ 1,283   

State

      181         184        198   

Foreign

      151         195        85   
                           
       1,810         1,536        1,566   
                           

Deferred:

                          

Federal

      79         (121 )      (209 ) 

State

      21         (24 )      (56 ) 

Foreign

      25         (29 )      (23 ) 
                           
       125         (174 )      (288 ) 
                           

Total

      $ 1,935         $ 1,362        $ 1,278   
                           
Reconciliation for Provision for Income Taxes
                         
     Fiscal Year Ended  
     January 30,
2011		     January 31,
2010		     February 1,
2009		  

Income taxes at federal statutory rate

      $ 1,846        $ 1,394        $ 1,257   

State income taxes, net of federal income tax benefit

      131        104        92   

Other, net

      (42 )      (136 )      (71 ) 
                          

Total

      $ 1,935        $ 1,362        $ 1,278   
                          
Tax Effects of Temporary Differences
     January 30,
        2011         		        January 31,
        2010         		  

Current:

        

Deferred Tax Assets:

        

Property and equipment

      $ 64           $ 85   

Accrued self-insurance liabilities

      115           109   

Other accrued liabilities

      196           303   

Deferred compensation

      393           372   
                   

Current Deferred Tax Assets

      768           869   

Deferred Tax Liabilities:

        

Accelerated inventory deduction

      (106 )         (114 ) 

Other

      (114 )         (111 ) 
                   

Current Deferred Tax Liabilities

      (220 )         (225 ) 
                   

Current Deferred Tax Assets, net

      548           644   
                   

Noncurrent:

        

Deferred Tax Assets:

        

Accrued self-insurance liabilities

      345           338   

State income taxes

      69           123   

Capital loss carryover

      141           86   

Net operating losses

      66           74   

Foreign tax credit carry forward

      30           65   

Impairment of investment

      120           114   

Other

      212           174   

Valuation allowance

      (66 )         (15 ) 
                   

Noncurrent Deferred Tax Assets

      917           959   

Deferred Tax Liabilities:

        

Property and equipment

      (1,073 )         (1,178 ) 

Goodwill and other intangibles

      (95 )         (88 ) 
                   

Noncurrent Deferred Tax Liabilities

      (1,168 )         (1,266 ) 
                   

Noncurrent Deferred Tax Liabilities, net

      (251 )         (307 ) 
                   

Net Deferred Tax Assets

      $ 297           $ 337   
                   
Tax Balance Sheet Accounts
                 
     January 30,
2011		     January 31,
2010		  

Other Current Assets

      $ 553        $ 650   

Other Assets

      21        12   

Other Accrued Expenses

      (5 )      (6 ) 

Deferred Income Taxes

      (272 )      (319 ) 
                  

Net Deferred Tax Assets (Liabilities)

      $ 297        $ 337   
                  
Unrecognized Tax Benefits
                         
     January 30,
2011		     January 31,
2010		     February 1,
2009		  

Unrecognized tax benefits balance at beginning of fiscal year

     $ 659       $ 695       $ 608   

Additions based on tax positions related to the current year

      174        55        67   

Additions for tax positions of prior years

      84        33        231   

Reductions for tax positions of prior years

      (181 )      (28 )      (142 ) 

Reductions due to settlements

      (65 )      (94 )      (65 ) 

Reductions due to lapse of statute of limitations

      (9 )      (2 )      (4 ) 
                          

Unrecognized tax benefits balance at end of fiscal year

     $

662

       $ 659       $ 695   
                          
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Employee Stock Plans (Tables)
 12 Months Ended
Jan. 30, 2011
Employee Stock Plans
Summary of Stock Options Outstanding
     Number of
Shares		     Weighted
Average Exercise
Price		  

Outstanding at February 3, 2008

      52,365        $ 38.98   
                

Granted

      5,226        26.09   

Exercised

      (777 )      22.55   

Canceled

      (4,800 )      39.14   
                

Outstanding at February 1, 2009

      52,014        $ 37.91   
                

Granted

      4,174        23.29   

Exercised

      (374 )      24.50   

Canceled

      (6,505 )      37.65   
                

Outstanding at January 31, 2010

      49,309        $ 36.81   
                

Granted

      3,723        32.24   

Exercised

      (1,294 )      26.63   

Canceled

      (7,271 )      43.95   
                

Outstanding at January 30, 2011

      44,467        $ 35.56   
                
Restricted Stock and Performance Shares
     Number of
Shares		     Weighted
Average Grant
Date Fair Value		  

Outstanding at February 3, 2008

      11,715        $ 39.14   
                

Granted

      7,938        27.14   

Restrictions lapsed

      (1,251 )      34.37   

Canceled

      (2,115 )      34.86   
                

Outstanding at February 1, 2009

      16,287        $ 34.22   
                

Granted

      8,257        23.41   

Restrictions lapsed

      (1,686 )      34.65   

Canceled

      (2,195 )      31.84   
                

Outstanding at January 31, 2010

      20,663        $ 30.11   
                

Granted

      5,799        32.31   

Restrictions lapsed

      (5,276 )      32.28   

Canceled

      (1,747 )      30.11   
                

Outstanding at January 30, 2011

      19,439        $ 30.18   
                
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Leases (Tables)
 12 Months Ended
Jan. 30, 2011
Leases
Schedule of Future Minimum Lease Payments

Fiscal Year

    Capital
Leases		      Operating
Leases		  

2011

      $ 114         $ 783   

2012

      96         699   

2013

      96         639   

2014

      92         582   

2015

      87         543   

Thereafter through 2097

      774         4,935   
                 
     1,259         $ 8,181   
           

Less imputed interest

      807      
           

Net present value of capital lease obligations

      452      

Less current installments

      41      
           

Long-term capital lease obligations, excluding current installments

      $ 411      
           
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Basic and Diluted Weighted Average Common Shares (Tables)
 12 Months Ended
Jan. 30, 2011
Basic and Diluted Weighted Average Common Shares
Basic and Diluted Weighted Average Common Shares
     Fiscal Year Ended  
     January 30,
2011		      January 31,
2010		      February 1,
2009		  

Weighted average common shares

      1,648         1,683         1,682   

Effect of potentially dilutive securities:

         

Stock Plans

      10         9         4   
                          

Diluted weighted average common shares

      1,658         1,692         1,686   
                          
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Fair Value Measurements (Tables)
 12 Months Ended
Jan. 30, 2011
Fair Value Measurements
Asset and Liabilities Measured at Fair Value on a Recurring Basis
     Fair Value at
January 30, 2011 Using		      Fair Value at
January 31, 2010 Using		  
         Level 1      Level 2     Level 3              Level 1      Level 2     Level 3      

Derivative agreements - assets

     $ –         $ 47       $ –         $ –         $ 15       $  –    

Derivative agreements - liabilities

      –          (40 )      –          –          (4 )      –    
                                                   

Total

     $ –         $ 7       $ –         $ –         $ 11       $  –    
                                                   
Fair Value Assets and Liabilities Gains (Losses) Measured on a Nonrecurring Basis Text Block
     Fair Value Measured
During Fiscal 2010
Level 3		     Gains (Losses)  

Store Rationalization - lease obligation costs, net

     $ (158 )     $ (9 ) 

Guarantee of HD Supply loan

     $ (67 )      (51 ) 
          

Total for fiscal 2010

       $ (60 ) 
          
     Fair Value Measured
During Fiscal 2009
Level 3		     Gains (Losses)  

HD Supply investment

     $ —       $ (163 ) 

Store Rationalization - lease obligation costs, net

     $ (191 )      (84 ) 
          

Total for fiscal 2009

       $ (247 ) 
          
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Quarterly Financial Data (Tables)
 12 Months Ended
Jan. 30, 2011
Quarterly Financial Data
Schedule of Quarterly Financial Data
                                         
     Net Sales      Gross
Profit		        Earnings from
Continuing
Operations		        Basic
Earnings per
Share from
Continuing
Operations		        Diluted
Earnings per
Share from
Continuing
Operations		  

Fiscal Year Ended January 30, 2011:

                                                   

First Quarter

      $ 16,863         $ 5,794           $ 725          $  0.43           $  0.43   

Second Quarter

      19,410         6,582           1,192           0.72           0.72   

Third Quarter

      16,598         5,685           834           0.51           0.51   

Fourth Quarter

      15,126         5,243           587           0.36           0.36   
                                                    

Fiscal Year

      $ 67,997         $ 23,304           $ 3,338          $ 2.03           $ 2.01   
                                                    

Fiscal Year Ended January 31, 2010:

                                                   

First Quarter

      $ 16,175         $ 5,450           $ 514          $ 0.31           $ 0.30   

Second Quarter

      19,071         6,388           1,116           0.66           0.66   

Third Quarter

      16,361         5,561           689           0.41           0.41   

Fourth Quarter

      14,569         5,013           301           0.18           0.18   
                                                    

Fiscal Year

      $ 66,176         $ 22,412           $ 2,620          $ 1.56           $ 1.55   
                                                    

Note: The quarterly data may not sum to fiscal year totals.

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Summary of Significant Accounting Policies (Narrative) (Details) (USD  $)
 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Approximate averaging square footage of warehouse-style stores 105,000
Approximate lower limit of different types of inventory held at stores 30,000
Approximate upper limit of different types of inventory held at stores 40,000
Number of stores in operation 2,248
Receivables due from customers  $ 1,085,000,000  $ 964,000,000
Percentage of Merchandise Inventories that are calculated at the lower of cost or market 20.00%
Gift card breakage income 46,000,000 40,000,000 37,000,000
Services revenue 2,700,000,000 2,600,000,000 3,100,000,000
Gross advertising expense 864,000,000 897,000,000 1,000,000,000
Incremental and identifiable advertising co-op allowances 90,000,000 105,000,000 107,000,000
Shipping and handling costs 438,000,000 426,000,000 501,000,000
Asset impairments 0 0 580,000,000
Estimated useful life for intangible assets, maximum, in years 20
Per share weighted average fair value of stock options granted  $ 6.7  $ 6.61  $ 6.46
Net Sales outside of the U.S. 7,500,000,000 7,000,000,000 7,400,000,000
Long-lived assets outside of U.S. 3,200,000,000 3,000,000,000
Trade Accounts Receivable [Member]
Receivables due from customers 42,000,000 38,000,000
United States [Member]
Number of stores in operation 1,976
Canada [Member]
Number of stores in operation 179
Mexico [Member]
Number of stores in operation 85
China [Member]
Number of stores in operation 8
Lease Obligation Costs, net [Member]
Store Rationalization - Lease obligation costs, net  $ 0  $ 84,000,000  $ 252,000,000
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Summary of Significant Accounting Policies (Depreciation Estimated Useful Lives) (Details)
 12 Months Ended
Jan. 30, 2011
Leasehold Improvements [Member]
Minimum useful life, in years 5
Maximum useful life, in years 45
Buildings [Member]
Minimum useful life, in years 5
Maximum useful life, in years 45
Furniture, Fixtures and Equipment [Member]
Minimum useful life, in years 2
Maximum useful life, in years 20
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Summary of Significant Accounting Policies (Black-Scholes option-pricing model) (Details)
 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Summary of Significant Accounting Policies
Risk-free interest rate 3.10% 2.30% 2.90%
Assumed volatility 26.40% 41.50% 33.80%
Assumed dividend yield 2.90% 3.90% 3.50%
Assumed lives of options, in years 5 6 6
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Rationalization Charges (Narrative) (Details) (USD  $)
In Millions, unless otherwise specified		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Rationalization Charges
Approximate number of US stores the Company will no longer pursue to open that were a part of new store pipeline 50
Number of underperforming US stores closed 15
Approximate number of associates impacted by the exiting businesses 5,000
Approximate number of associates impacted by restructured support functions 2,000
Rationalization charges  $ 0  $ 146  $ 951
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Rationalization Charges (Activity Related to Rationalization Charges) (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Fiscal Charges  $ 146  $ 951
Cash Uses 42 257 63
Non-cash Activity 10 18 545
Accrued Balance 162 214 343
Asset Impairments [Member]
Fiscal Charges 580
Non-cash Activity 19 15 542
Accrued Balance 4 23 38
Lease Obligation Costs, net [Member]
Fiscal Charges 84 252
Cash Uses 42 106 39
Non-cash Activity (9)
Accrued Balance 158 191 213
Severance [Member]
Fiscal Charges 8 78
Cash Uses 80 6
Accrued Balance 72
Other [Member]
Fiscal Charges 54 41
Cash Uses 71 18
Non-cash Activity 3 3
Accrued Balance  $ 20
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HD Supply Disposition (Narrative) (Details) (USD  $)
In Millions, unless otherwise specified		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
 Feb. 03, 2008
 Nov. 04, 2007
Earnings (loss) from discontinued operations  $ 41  $ (52)
Equity interest in the newly formed HD Supply 12.50% 12.50%
Payment to acquire equity interest 325
Write-down of investment 163 [1] 163 [1]
Debt guarantee 940 1,000
Guaranteed loan expiration date April 1, 2014
Fair value of the guarantee 67 16
Interest and Other, net [Member]
Charge to Interest and Other, net  $ 51
Scenario, Previously Reported [Member]
Guaranteed loan expiration date August 30, 2012
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Debt (Short-term and Commercial Paper Programs) (Details) (USD  $)
 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
Maximum Available Commercial Paper Borrowing Capacity  $ 2,000,000,000
Back-up credit facility 2,000,000,000
Credit facility expiration date July 2013
Maximum amount outstanding at any month-end 190,000,000
Average daily short-term borrowings  $ 5,000,000  $ 55,000,000
Weighted average interest rate 0.40% 1.10%
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Debt (Long-Term Debt) (Details) (USD  $)
In Millions, unless otherwise specified		 Jan. 30, 2011
 Jan. 31, 2010
 Jan. 30, 2011
4.625% Senior Notes due August 15, 2010 [Member]
 Jan. 31, 2010
4.625% Senior Notes due August 15, 2010 [Member]
 Jan. 30, 2011
5.20% Senior Notes due March 1, 2011 [Member]
 Jan. 31, 2010
5.20% Senior Notes due March 1, 2011 [Member]
 Jan. 30, 2011
5.25% Senior Notes due December 16, 2013 [Member]
 Jan. 31, 2010
5.25% Senior Notes due December 16, 2013 [Member]
 Jan. 30, 2011
5.40% Senior Notes due March 1, 2016 [Member]
 Jan. 31, 2010
5.40% Senior Notes due March 1, 2016 [Member]
 Jan. 30, 2011
3.95% Senior Notes due September 15, 2020 [Member]
 Jan. 31, 2010
3.95% Senior Notes due September 15, 2020 [Member]
 Jan. 30, 2011
5.875% Senior Notes due December 16, 2036 [Member]
 Jan. 31, 2010
5.875% Senior Notes due December 16, 2036 [Member]
 Jan. 30, 2011
5.40% Senior Notes due September 15, 2040 [Member]
 Jan. 31, 2010
5.40% Senior Notes due September 15, 2040 [Member]
 Jan. 30, 2011
Lease Obligation Costs, net [Member]
 Jan. 31, 2010
Lease Obligation Costs, net [Member]
 Jan. 30, 2011
Other Debt [Member]
 Jan. 31, 2010
Other Debt [Member]
Total Debt  $ 9,749  $ 9,682  $ 999  $ 1,000  $ 1,000  $ 1,297  $ 1,258  $ 3,033  $ 3,040  $ 499    $ 2,960  $ 2,960  $ 499    $ 452  $ 408  $ 9  $ 17
Less current installments 1,042 1,020
Long-Term Debt, excluding current installments  $ 8,707  $ 8,662
Stated interest rate percentage 4.63% 5.20% 5.25% 5.40% 3.95% 5.88% 5.40%
Debt Instrument, Maturity Date Aug 15, 2010 Mar 1, 2011 Dec 16, 2013 Mar 1, 2016 Sep 15, 2020 Dec 16, 2036 Sep 15, 2040 Jan 31, 2055
Debt Instrument, Frequency of Periodic Payment semi-annually on February 15 and August 15 semi-annually on March 1 and September 1 semi-annually on June 16 and December 16 semi-annually on March 1 and September 1 semi-annually on March 15 and September 15 semi-annually on June 16 and December 16 semi-annually on March 15 and September 15 varying installments through January 31, 2055
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Debt (Narrative) (Details) (USD  $)
 12 Months Ended 12 Months Ended 1 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
 May 31, 2010
 Feb. 03, 2008
 Jan. 30, 2011
Interest Rate Swap Agreement [Member]
 Sep. 30, 2010
3.95% Senior Notes due September 15, 2020 [Member]
 Sep. 30, 2010
4.625% Senior Notes due August 15, 2010 [Member]
 Jan. 30, 2011
5.25% Senior Notes due December 16, 2013 [Member]
 Feb. 01, 2009
5.40% Senior Notes due March 1, 2016 [Member]
 Feb. 03, 2008
5.40% Senior Notes due March 1, 2016 [Member]
 Sep. 30, 2010
5.40% Senior Notes due September 15, 2040 [Member]
 Sep. 30, 2010
September 2010 Issuance [Member]
Interest rate swap  $ 1,250,000,000  $ 1,000,000,000  $ 500,000,000  $ 3,000,000,000  $ 1,000,000,000
Senior Notes 500,000,000 1,000,000,000 1,250,000,000 3,000,000,000 3,000,000,000 500,000,000
Fair value of derivative agreements, asset 47,000,000
Fair value of derivative agreements, liability 2,000,000
Debt Discount 1,000,000 1,000,000 2,000,000
Debt Issuance Costs 8,000,000
Payment (Receipt) to Settle Forward Starting Interest Rate Swap Agreements (56,000,000) 193,000,000
Long-term debt, redemption price 100
Cross currency swap 590,000,000
Amount by which the fair value of cross currency swap agreements was a liability 38,000,000
Interest capitalized 3,000,000 4,000,000 20,000,000
Maturities of Long-Term Debt for fiscal 2011 1,000,000,000
Maturities of Long-Term Debt for fiscal 2012 29,000,000
Maturities of Long-Term Debt for fiscal 2013 1,300,000,000
Maturities of Long-Term Debt for fiscal 2014 28,000,000
Maturities of Long-Term Debt for fiscal 2015 26,000,000
Maturities of Long-Term Debt for fiscal years thereafter  $ 7,300,000,000
Variable interest basis points 2.59%
Variable interest basis points, minimum 0.60%
Variable interest basis points, maximum 1.49%
Debt holder, change of control redemption percentage 101
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Income Taxes (Narrative) (Details) (USD  $)
 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Combined federal, state and foreign effective tax rate 36.70% 34.20% 35.60%
Federal statutory rate 35.00%
Foreign tax credit carry forward  $ 30,000,000  $ 65,000,000
Unrecognized tax benefits that would impact effective tax rate 298,000,000 386,000,000 401,000,000
Accrual for interest and penalties (32,000,000) 41,000,000 (19,000,000)
Total accrued interest and penalties 84,000,000 138,000,000
Amount classified of the reserve for unrecognized tax benefits as a short-term liability 63,000,000
Investments in Foreign Subsidiaries and Foreign Corporate Joint Ventures that are Essentially Permanent in Duration [Member]
Deferred tax liabilities, undistributed foreign earnings 2,000,000,000
Internal Revenue Service (IRS) [Member]
Capital loss carryover 397,000,000
State and Foreign, Net Operating Loss Carryforwards [Member]
Valuation Allowance 21,000,000 15,000,000
Net Capital Loss Carryover [Member]
Valuation Allowance  $ 45,000,000
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Income Taxes (Components Of Earnings From Continuing Operations Before Provision For Income Taxes) (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Income Taxes
United States  $ 4,854  $ 3,586  $ 3,136
Foreign 419 396 454
Total  $ 5,273 [1]  $ 3,982 [1]  $ 3,590 [1]
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Income Taxes (Provision for Income Taxes) (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Current:
Federal  $ 1,478  $ 1,157  $ 1,283
State 181 184 198
Foreign 151 195 85
Total Current 1,810 1,536 1,566
Deferred:
Federal 79 (121) (209)
State 21 (24) (56)
Foreign 25 (29) (23)
Total Deferred 125 (174) (288)
Total Income Taxes  $ 1,935 [1]  $ 1,362 [1]  $ 1,278 [1]
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Income Taxes (Federal statutory rate) (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Income Taxes
Income taxes at federal statutory rate  $ 1,846  $ 1,394  $ 1,257
State income taxes, net of federal income tax benefit 131 104 92
Other, net (42) (136) (71)
Total  $ 1,935  $ 1,362  $ 1,278
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Income Taxes (Tax Effects of Temporary Differences) (Details) (USD  $)
In Millions		 Jan. 30, 2011
 Jan. 31, 2010
Property and equipment  $ 64  $ 85
Other accrued liabilities 196 303
Deferred compensation 393 372
Current Deferred Tax Assets 768 869
Accelerated inventory deduction (106) (114)
Other (114) (111)
Current Deferred Tax Liabilities (220) (225)
Current Deferred Tax Assets, net 548 644
State income taxes 69 123
Capital loss carryover 141 86
Net operating losses 66 74
Foreign tax credit carry forward 30 65
Impairment of investments 120 114
Other 212 174
Valuation allowance (66) (15)
Noncurrent Deferred Tax Assets 917 959
Property and equipment (1,073) (1,178)
Goodwill and other intangibles (95) (88)
Noncurrent Deferred Tax Liabilities (1,168) (1,266)
Noncurrent Deferred Tax Liabilities, net (251) (307)
Net Deferred Tax Assets 297 337
Current [Member]
Accrued self-insurance liabilities 115 109
Noncurrent [Member]
Accrued self-insurance liabilities  $ 345  $ 338
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Income Taxes (Balance Sheet Accounts) (Details) (USD  $)
In Millions		 Jan. 30, 2011
 Jan. 31, 2010
Net Deferred Tax Assets  $ 297  $ 337
Other Current Assets [Member]
Net Deferred Tax Assets 553 650
Other Assets [Member]
Net Deferred Tax Assets 21 12
Other Accrued Expenses [Member]
Net Deferred Tax Assets (5) (6)
Deferred Income Taxes [Member]
Net Deferred Tax Assets  $ (272)  $ (319)
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Income Taxes (Unrecognized Tax Benefits) (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Income Taxes
Unrecognized tax benefits balance at beginning of fiscal year  $ 659  $ 695  $ 608
Additions based on tax positions related to the current year 174 55 67
Additions for tax positions of prior years 84 33 231
Reductions for tax positions of prior years (181) (28) (142)
Reductions due to settlements (65) (94) (65)
Reductions due to lapse of statute of limitations (9) (2) (4)
Unrecognized tax benefits balance at end of fiscal year  $ 662  $ 659  $ 695
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Employee Stock Plans (Narrative) (Details) (USD  $)
 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Common Stock, authorized 10,000,000,000 10,000,000,000
Shares available for future grants 175,000,000
Share-based compensation  $ 214,000,000 [1]  $ 201,000,000 [1]  $ 176,000,000 [1]
Deferred shares 479,000 666,000 641,000
Non-qualified stock options outstanding 44,000,000
Shares purchased 3,000,000
Average price 26.5
Employee contributions 7,000,000
Reduction of number of shares available for issuance 2.11
Vesting rate for incentive stock options and non-qualified stock options 25.00%
Percentage by Which Stock Price Has To Exceed Grant Date Price for Performance Option to Vest 25.00%
Percentage of restriction on restricted stock lapse on the third and sixth anniversaries of the date of issuance 25.00%
Remaining percentage of the restricted stock lapsing upon the associate's attainment of age 62 50.00%
Percentage which the restricted stock lapse upon the third and sixth anniversaries of the date of issuance 25.00%
Remaining percentage of the restricted stock lapsing upon the earlier of the associate's attainment of age 60 or tenth anniversary date 50.00%
Percentage the purchase price of shares under the ESPPs is equal to the stock's fair market value 85.00%
Percentage of the stock's fair market value charged for employee's contributions to purchase shares 85.00%
Stock Options [Member]
Share-based compensation 20,000,000 19,000,000 47,000,000
Restricted Stock [Member]
Share-based compensation 167,000,000 158,000,000 109,000,000
Deferred Shares [Member]
Allocated share-based compensation expense 14,000,000 14,000,000 9,000,000
Non-Qualified [Member]
Non-qualified stock options outstanding 2,000,000
ESPP [Member]
Allocated share-based compensation expense  $ 13,000,000  $ 10,000,000  $ 11,000,000
2005 Plan [Member]
Common Stock, authorized 255,000,000
U.S. ESPP Plan [Member]
Common Stock, authorized 11,000,000
Non U.S. ESPP Plan [Member]
Common Stock, authorized 20,000,000
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Employee Stock Plans (Stock Options) (Details) (USD  $)
In Millions, except Share data, unless otherwise specified		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Number of shares beginning balance 49,309,000 52,014,000 52,365,000
Granted 3,723,000 4,174,000 5,226,000
Exercised (1,294,000) (374,000) (777,000)
Canceled (7,271,000) (6,505,000) (4,800,000)
Number of shares ending balance 44,467,000 49,309,000 52,014,000
Weighted average exercise price beginning balance  $ 36.81  $ 37.91  $ 38.98
Weighted average exercise price granted  $ 32.24  $ 23.29  $ 26.09
Weighted average exercise price exercised  $ 26.63  $ 24.5  $ 22.55
Weighted average exercise price canceled  $ 43.95  $ 37.65  $ 39.14
Weighted average exercise price ending balance  $ 35.56  $ 36.81  $ 37.91
Intrinsic value of stock options exercised  $ 9  $ 1  $ 4
Stock options outstanding 44,000,000
Weighted average remaining life 4
Intrinsic value of stock options outstanding 51
Stock options exercisable 33,000,000
Weighted average exercise price  $ 38.21
Weighted average remaining life 2
Intrinsic value of stock options exercisable 49
Number of stock options vested or expected to vest 41,000,000
Unamortized stock-based compensation expense 259
Stock Options [Member]
Unamortized stock-based compensation expense  $ 45
Weighted average period, in years 2
Non-Qualified [Member]
Stock options outstanding 2,000,000
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Employee Stock Plans (Restricted Stock and Performance Shares) (Details) (USD  $)
In Millions, except Share data in Thousands, unless otherwise specified		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Number of Shares beginning balance 20,663 16,287 11,715
Granted 5,799 8,257 7,938
Restrictions lapsed (5,276) (1,686) (1,251)
Canceled (1,747) (2,195) (2,115)
Number of Shares ending balance 19,439 20,663 16,287
Weighted average grant date fair value beginning balance  $ 30.11  $ 34.22  $ 39.14
Weighted average grant date fair value granted  $ 32.31  $ 23.41  $ 27.14
Weighted average grant date fair value restrictions lapsed  $ 32.28  $ 34.65  $ 34.37
Weighted average grant date fair value canceled  $ 30.11  $ 31.84  $ 34.86
Weighted average grant date fair value ending balance  $ 30.18  $ 30.11  $ 34.22
Unamortized stock-based compensation expense  $ 259
Fair value of restricted stock and performance shares vesting during period  $ 168  $ 41  $ 33
Restricted Stock [Member]
Weighted average period, in years 2
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Leases (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Leases
Total rent expense  $ 821  $ 823  $ 846
Contingent rent expense 3 4 5
Capital leases
2011 114
2012 96
2013 96
2014 92
2015 87
Thereafter through 2097 774
Total Capital Leases 1,259
Less imputed interest 807
Net present value of capital lease obligations 452
Less current installments 41
Long-term capital lease obligations, excluding current installments 411
Operating leases
2011 783
2012 699
2013 639
2014 582
2015 543
Thereafter through 2097 4,935
Total Operating Leases 8,181
Capital leases recorded in property and equipment  $ 336  $ 299
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Employee Benefit Plans (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Employee Benefit Plans
Contributions to benefit plans  $ 171  $ 161  $ 158
Number of Shares Held in Employee Benefit Plans 16
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Basic and Diluted Weighted Average Common Shares (Narrative) (Details)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Basic and Diluted Weighted Average Common Shares
Options to purchase common stock 39 48 52
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Basic and Diluted Weighted Average Common Shares (Reconciliation of Basic to Diluted Weighted Average Common Shares) (Details)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Basic and Diluted Weighted Average Common Shares
Weighted average common shares 1,648 [1] 1,683 [1] 1,682 [1]
Effect of potentially dilutive securities: Stock Plans 10 9 4
Diluted weighted average common shares 1,658 [1] 1,692 [1] 1,686 [1]
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Fair Value Measurements (Narrative) (Details) (USD  $)
In Billions		 Jan. 30, 2011
 Jan. 31, 2010
Senior Notes  $ 9.3  $ 9.3
Fair Value, Inputs, Level 1 [Member]
Fair value of Senior Notes  $ 9.8  $ 9.5
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Fair Value Measurements (Assets and Liabilities on a Recurring Basis) (Details) (USD  $)
In Millions		 Jan. 30, 2011
 Jan. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Derivative agreements - assets    
Derivative agreements - liabilities    
Total    
Fair Value, Inputs, Level 2 [Member]
Derivative agreements - assets 47 15
Derivative agreements - liabilities (40) (4)
Total 7 11
Fair Value, Inputs, Level 3 [Member]
Derivative agreements - assets    
Derivative agreements - liabilities    
Total    
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Fair Value Measurements (Assets and Liabilities on a Nonrecurring Basis) (Details) (USD  $)
In Millions		 12 Months Ended
Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
 Nov. 04, 2007
HD Supply investment  $ (163) [1]  $ (163) [1]
Store Rationalization (162) (214) (343)
Store Rationalization (146) (951)
Store Rationalization 10 18 545
Guarantee of HD Supply loan (67) (16)
Fair Value, Inputs, Level 3 [Member]
Store Rationalization (158) (191)
Guarantee of HD Supply loan (67)
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Gains (Losses) [Member]
HD Supply investment (163)
Store Rationalization (84)
Store Rationalization (9)
Guarantee of HD Supply loan (51)
Total  $ (60)  $ (247)
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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Commitments and Contingencies (Narrative) (Details) (USD  $)
In Millions		 Jan. 30, 2011
Commitments and Contingencies
Amount the company was contingently liable for under outstanding letters of credit and open accounts  $ 606
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Quarterly Financial Data (Quarterly Consolidated Results of Operations) (Details) (USD  $)
In Millions, except Per Share data		 3 Months Ended 12 Months Ended
Jan. 30, 2011
 Oct. 31, 2010
 Aug. 01, 2010
 May 02, 2010
 Jan. 31, 2010
 Nov. 01, 2009
 Aug. 02, 2009
 May 03, 2009
 Jan. 30, 2011
 Jan. 31, 2010
 Feb. 01, 2009
Quarterly Financial Data
Net Sales  $ 15,126  $ 16,598  $ 19,410  $ 16,863  $ 14,569  $ 16,361  $ 19,071  $ 16,175  $ 67,997 [1]  $ 66,176 [1]  $ 71,288 [1]
Gross Profit 5,243 5,685 6,582 5,794 5,013 5,561 6,388 5,450 23,304 [1] 22,412 [1] 23,990 [1]
Earnings from Continuing Operations  $ 587  $ 834  $ 1,192  $ 725  $ 301  $ 689  $ 1,116  $ 514  $ 3,338 [1]  $ 2,620 [1]  $ 2,312 [1]
Basic Earnings per Share from Continuing Operations  $ 0.36  $ 0.51  $ 0.72  $ 0.43  $ 0.18  $ 0.41  $ 0.66  $ 0.31  $ 2.03 [1]  $ 1.56 [1]  $ 1.37 [1]
Diluted Earnings per Share from Continuing Operations  $ 0.36  $ 0.51  $ 0.72  $ 0.43  $ 0.18  $ 0.41  $ 0.66  $ 0.3  $ 2.01 [1]  $ 1.55 [1]  $ 1.37 [1]
[1] Fiscal years ended January 30, 2011, January 31, 2010 and February 1, 2009 include 52 weeks.
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