beatandraise : SEC Filings Research with AI

beta

HOME DEPOT, INC.

Exhibits

d10q.htm dex31.htm dex121.htm dex151.htm dex311.htm dex312.htm dex321.htm dex322.htm hd-20110731.xml Financial_Report.xls

Notes Support

about terms

beatandraise.com

beta

HOME DEPOT, INC.

Statements

Exhibits

d10q.htm dex31.htm dex121.htm dex151.htm dex311.htm dex312.htm dex321.htm dex322.htm hd-20110731.xml Financial_Report.xls

Notes Support

about terms

0000354950 2010-05-31 0000354950 us-gaap:ScenarioPreviouslyReportedMember 2011-01-31 2011-07-31 0000354950 2011-05-01 0000354950 us-gaap:FairValueInputsLevel3Member 2010-08-01 0000354950 2007-08-30 0000354950 2011-03-31 0000354950 hd:FourPointFourZeroPercentSeniorNotesMember 2011-03-01 2011-03-31 0000354950 hd:FivePointTwoZeroPercentSeniorNotesMember 2011-03-01 2011-03-31 0000354950 hd:FivePointNineFivePercentSeniorNotesMember 2011-03-01 2011-03-31 0000354950 hd:FourPointFourZeroPercentSeniorNotesMember 2011-03-31 0000354950 hd:FivePointTwoZeroPercentSeniorNotesMember 2011-03-31 0000354950 hd:FivePointNineFivePercentSeniorNotesMember 2011-03-31 0000354950 hd:MarchTwoThousandAndElevenIssuanceMember 2011-03-01 2011-03-31 0000354950 2010-08-01 0000354950 2010-01-31 0000354950 2011-01-30 0000354950 us-gaap:FairValueInputsLevel3Member 2011-07-31 0000354950 us-gaap:FairValueInputsLevel2Member 2011-07-31 0000354950 us-gaap:FairValueInputsLevel1Member 2011-07-31 0000354950 us-gaap:FairValueInputsLevel3Member 2011-01-30 0000354950 us-gaap:FairValueInputsLevel2Member 2011-01-30 0000354950 us-gaap:FairValueInputsLevel1Member 2011-01-30 0000354950 2011-03-01 2011-03-31 0000354950 hd:AcceleratedShareRepurchaseAgreementMember 2011-05-01 0000354950 2011-05-02 2011-07-31 0000354950 2010-05-03 2010-08-01 0000354950 2010-02-01 2010-08-01 0000354950 hd:InterestAndOtherNetMember 2010-02-01 2010-08-01 0000354950 hd:InterestAndOtherNetMember 2010-02-01 2010-05-02 0000354950 us-gaap:FairValueMeasurementsNonrecurringMember 2011-01-31 2011-07-31 0000354950 us-gaap:FairValueMeasurementsNonrecurringMember 2010-02-01 2010-08-01 0000354950 2011-07-31 0000354950 hd:AcceleratedShareRepurchaseAgreementMember 2011-05-02 2011-07-31 0000354950 hd:AcceleratedShareRepurchaseAgreementMember 2011-03-01 2011-03-31 0000354950 2011-08-25 0000354950 2011-01-31 2011-07-31 iso4217:USD xbrli:shares xbrli:pure iso4217:USD xbrli:shares false --01-29 Q2 2011 2011-07-31 10-Q 0000354950 1564291782 Large Accelerated Filer HOME DEPOT INC 1000000000 6000000 105000 30000 40000 <div> Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended January 30, 2011, as filed with the Securities and Exchange Commission.</div> <div> Business The Home Depot, Inc. and 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.</div> 59000000 -7000000 51000000 51000000 51000000 337000000 148000000 285000000 146000000 21000000 1.01 1.00 <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%" align="center"> <tr><td width="68%"> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">Three Months Ended</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">Six Months Ended</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">July 31, 2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">August 1, 2010</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">July 31, 2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">August 1, 2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Weighted average common shares</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,568</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,653</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,585</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,666</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Effect of potentially dilutive securities:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Stock plans</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Diluted weighted average common shares</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,577</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,663</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,595</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,676</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> 7000000 29000000 <div class="MetaData"> Valuation Reserves As of July 31, 2011 and January 30, 2011, the valuation allowances for Merchandise Inventories and uncollectible Receivables were not material. </div>

3.  ACCELERATED SHARE REPURCHASE In March 2011, the Company entered into an ASR agreement with a third-party financial institution to repurchase $1.0 billion of the Company's common stock. Under the agreement, the Company paid $1.0 billion to the financial institution, using a portion of the proceeds from the March 2011 issuance, and received an initial delivery of approximately 21 million shares in the first quarter of fiscal 2011. The transaction was completed in the second quarter of fiscal 2011, with the Company receiving an additional 6 million shares. The $1.0 billion of shares repurchased are included in Treasury Stock in the accompanying Consolidated Balance Sheets as of July 31, 2011. The final number of shares delivered upon settlement of the agreement was determined with reference to the average price of the Company's common stock over the term of the ASR agreement.

4717000000

5890000000

1085000000

1332000000

13000000

306000000

13325000000

14099000000

445000000

603000000

6556000000

6665000000

40000000

42000000

26000000

30000000

40125000000

42277000000

13479000000

15857000000

1421000000

2395000000

545000000

2551000000

970000000

2005000000

0.4725

0.23625

0.50

0.25

0.05

10000000000

1722000000

1728000000

1623000000

1569000000

86000000

1947000000

1078000000

2333000000

1353000000

23897000000

12828000000

24351000000

13356000000

2. LONG-TERM DEBT In March 2011, the Company issued $1.0 billion of 4.40% Senior Notes due April 1, 2021 at a discount of $2 million and $1.0 billion of 5.95% Senior Notes due April 1, 2041 at a discount of $4 million (together, the "March 2011 issuance"). Interest on these Senior Notes is due semi-annually on April 1 and October 1 of each year, beginning October 1, 2011. The net proceeds of the March 2011 issuance were used to repurchase $1.0 billion of the Company's common stock through an Accelerated Share Repurchase ("ASR") agreement and the balance of the net proceeds were used to repay the Company's 5.20% Senior Notes that matured March 1, 2011 in the aggregate principal amount of $1.0 billion. The $6 million discount associated with the March 2011 issuance is being amortized over the term of the Senior Notes using the effective interest rate method. Issuance costs were approximately $15 million and are being amortized over the term of the Senior Notes. The Senior Notes may be redeemed by the Company at any time, in whole or in part, at the redemption price plus accrued interest up to the redemption date. The redemption price is equal to the greater of (1) 100% of the principal amount of the Senior Notes to be redeemed, 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 March 2011 issuance, holders of the March 2011 issuance have the right to require the Company to redeem those notes at 101% of the aggregate principal amount of the notes plus accrued interest up to the redemption date. The Company is generally not limited under the indenture governing the Senior Notes in its ability to incur additional indebtedness or required to maintain financial ratios or specified levels of net worth or liquidity. Further, while the indenture governing the Senior Notes contains various restrictive covenants, none is expected to impact the Company's liquidity or capital resources. In May 2010, the Company entered into a forward starting interest rate swap agreement with a notional amount of $500 million, which was accounted for as a cash flow hedge, to hedge interest rate fluctuations in anticipation of the March 2011 issuance. Upon the March 2011 issuance, the Company settled this forward starting interest rate swap agreement for an immaterial amount.

9800000000

11200000000

semi-annually on April 1 and October 1

0.0595

0.052

0.044

2041-04-01

2011-03-01

2021-04-01

6000000

4000000

2000000

15000000

1177000000

1178000000

272000000

230000000

817000000

406000000

793000000

396000000

866000000

849000000

47000000

85000000

40000000

56000000

1.15

0.72

1.37

0.87

1.14

0.72

1.36

0.86

6.  BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES The reconciliation of basic to diluted weighted average common shares for the three and six months ended July 31, 2011 and August 1, 2010 was as follows (amounts in millions):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%" align="center"> <tr><td width="68%"> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td> <td valign="bottom" width="3%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">Three Months Ended</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="6" align="center">Six Months Ended</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">July 31, 2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">August 1, 2010</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">July 31, 2011</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">August 1, 2010</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Weighted average common shares</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,568</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,653</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,585</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,666</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Effect of potentially dilutive securities:</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Stock plans</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Diluted weighted average common shares</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,577</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,663</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,595</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,676</td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table> Stock plans consist of shares granted under the Company's employee stock plans. Options to purchase 30 million and 42 million shares of common stock for the three months ended July 31, 2011 and August 1, 2010, respectively, and options to purchase 26 million and 40 million shares of common stock for the six months ended July 31, 2011 and August 1, 2010, respectively, were excluded from the computation of Diluted Earnings per Share because their effect would have been anti-dilutive.

4000000

1000000

1290000000

1262000000

1000000000

<table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr style="line-height: 0pt; visibility: hidden; color: white;"><td width="40%"> </td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="5" align="center">Fair Value at July 31, 2011 Using</td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="5" align="center">Fair Value at January 30, 2011 Using</td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 1    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 2    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 3    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 1    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 2    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 3    </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Derivative agreements - assets</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$85</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$47</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td></tr> <tr><td valign="top"> Derivative agreements - liabilities</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">(56)</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">(40)</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$29</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$7</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td></tr></table>

<div class="MetaData">   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%"> <tr><td width="68%"> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="center">Fair Value Measured During the Six Months Ended July 31, 2011 - Level 3</td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Gains (Losses)</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Lease obligation costs, net</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  $(139)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$7    </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total for the first six months of fiscal 2011</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$7    </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%"> <tr><td width="68%"> </td> <td valign="bottom" width="10%"> </td> <td> </td> <td valign="bottom" width="10%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="center">Fair Value Measured During the Six Months Ended August 1, 2010 - Level 3</td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Gains (Losses)</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Lease obligation costs, net</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$(177)</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$  (8)  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Guarantee of HD Supply loan</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$  (67)</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(51)  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total for the first six months of fiscal 2010</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$(59)  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table></div>

5.  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, rather than 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:   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="11%" align="left">—     Level 1 –</td> <td valign="top" align="left">Observable inputs that reflect quoted prices in active markets </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="11%" align="left">—     Level 2 –</td> <td valign="top" align="left">Inputs other than quoted prices in active markets that are either directly or indirectly observable </td></tr></table> <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr><td valign="top" width="11%" align="left">—     Level 3 –</td> <td valign="top" align="left">Unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions </td></tr></table> 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 July 31, 2011 and January 30, 2011 were as follows (amounts in millions):   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr style="line-height: 0pt; visibility: hidden; color: white;"><td width="40%"> </td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td> <td valign="bottom" width="6%"> </td> <td nowrap="nowrap">000,000</td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="5" align="center">Fair Value at July 31, 2011 Using</td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="5" align="center">Fair Value at January 30, 2011 Using</td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 1    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 2    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 3    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 1    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 2    </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" nowrap="nowrap" align="center">    Level 3    </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Derivative agreements - assets</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$85</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$47</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td></tr> <tr><td valign="top"> Derivative agreements - liabilities</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">(56)</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">(40)</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  –  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$29</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td> <td valign="bottom">  </td> <td valign="bottom" align="center">$7</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$–  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td></tr></table> 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.   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 the six months ended July 31, 2011 and August 1, 2010 were as follows (amounts in millions): <div class="MetaData">   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%"> <tr><td width="68%"> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td valign="bottom" width="11%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="center">Fair Value Measured During the Six Months Ended July 31, 2011 - Level 3</td> <td valign="bottom"> </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Gains (Losses)</td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Lease obligation costs, net</td> <td valign="bottom">  </td> <td valign="bottom" align="center">  $(139)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$7    </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr><td valign="top"> Total for the first six months of fiscal 2011</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$7    </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table>   <table style="border-collapse: collapse;" border="0" cellspacing="0" cellpadding="0" width="84%"> <tr><td width="68%"> </td> <td valign="bottom" width="10%"> </td> <td> </td> <td valign="bottom" width="10%"> </td> <td> </td> <td> </td> <td> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" align="center">Fair Value Measured During the Six Months Ended August 1, 2010 - Level 3</td> <td valign="bottom">  </td> <td style="border-bottom: #000000 1px solid;" valign="bottom" colspan="2" align="center">Gains (Losses)</td> <td valign="bottom"> </td></tr> <tr><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Lease obligation costs, net</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$(177)</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$  (8)  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr><td valign="top"> Guarantee of HD Supply loan</td> <td valign="bottom">  </td> <td valign="bottom" align="center">$  (67)</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(51)  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr> <tr bgcolor="#cceeff"><td valign="top"> Total for the first six months of fiscal 2010</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">$(59)  </td> <td valign="bottom" nowrap="nowrap">  </td></tr> <tr style="font-size: 1px;"><td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td valign="bottom">  </td> <td> </td></tr></table></div>   <div> Lease obligation costs were related to certain store closings and the exit of certain businesses in fiscal 2009 and 2008. These charges were measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3). 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 were analyzed for impairment on a nonrecurring basis using fair value measurements with unobservable inputs (level 3). Impairment charges related to long-lived assets in the first six months of fiscal 2011 and 2010 were not material. The Company completed an assessment on the recoverability of Goodwill for one of its reporting units in the first six months of fiscal 2011. The fair value of the Company's reporting unit was based on the potential selling price of the reporting unit. The impairment charge related to this Goodwill assessment was not material. The aggregate fair value of the Company's Senior Notes, based on quoted market prices, was $11.2 billion and $9.8 billion at July 31, 2011 and January 30, 2011, respectively, compared to a carrying value of $10.3 billion and $9.3 billion at July 31, 2011 and January 30, 2011, respectively. </div>

1187000000

1177000000

12376000000

6582000000

12704000000

6876000000

16000000

67000000

1000000000

935000000

April 1, 2014

August 30, 2012

3017000000

1901000000

3431000000

2148000000

1100000000

709000000

1256000000

785000000

1193000000

1419000000

161000000

308000000

78000000

-4000000

-13000000

-4000000

47000000

40000000

-24000000

29000000

246000000

238000000

526000000

65000000

293000000

151000000

290000000

149000000

10625000000

10756000000

7000000

3000000

5000000

3000000

21236000000

24044000000

40125000000

42277000000

10122000000

10947000000

8707000000

10731000000

1042000000

44000000

-2030000000

-2040000000

-363000000

-442000000

3363000000

4487000000

1917000000

1192000000

2175000000

1363000000

500000000

9022000000

4533000000

8988000000

4582000000

3354000000

2049000000

3716000000

2294000000

1515000000

1758000000

1224000000

1218000000

399000000

445000000

-82000000

-75000000

-1000000

2000000

112000000

-39000000

174000000

-12000000

30000000

-114000000

158000000

-10000000

-15000000

2135000000

2136000000

-51000000

1209000000

2251000000

1000000000

793000000

798000000

407000000

469000000

52000000

83000000

-63000000

-54000000

1994000000

44000000

27000000

38385000000

38897000000

25060000000

24798000000

17000000

1014000000

177000000

139000000

8000000

-7000000

14995000000

16372000000

368000000

509000000

36273000000

19410000000

37055000000

20232000000

4.  DEBT GUARANTEE EXTENSION In connection with the sale of HD Supply, Inc. ("HD Supply") on August 30, 2007, 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 on Form 10-Q of HD Supply for the period ended May 1, 2011, the outstanding balance of this term loan as of May 1, 2011 was $935 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 the first quarter and first six months of fiscal 2010.

8205000000

4127000000

8195000000

4186000000

1000000000

9300000000

10300000000

112000000

108000000

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <div> Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended January 30, 2011, as filed with the Securities and Exchange Commission.</div>   <div> Business The Home Depot, Inc. and 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.</div> <div>  </div> <div class="MetaData"> Valuation Reserves As of July 31, 2011 and January 30, 2011, the valuation allowances for Merchandise Inventories and uncollectible Receivables were not material. </div>

18889000000

18233000000

99000000

159000000

3193000000

5493000000

10000000

9000000

1676000000

1663000000

1595000000

1577000000

1666000000

1653000000

1585000000

1568000000

This component of comprehensive income is reported net of income taxes.