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1. Identify Home Depot's long-term liabilities and the amounts for those liabilities from Home Depot's balance sheet at January 29, 2017 2. Review Home Depot's note 4. The note reports that as of January 29, 2017, it had $2.947 billion of 5.875% Senior Notes; due December 16, 2036; interest payable semiannually on June 16 and December 16." These notes have a face value of $3.0 billion and were originally issued at $2.958 billion. a. Why would Home Depot issue $3.0 billion of its notes for only $2.958 billion? b. How much cash interest must Home Depot pay each June 16 and December 16 on these notes? January 29, 2017 January 31, 2016 2.53 2,216 2,029 1,890 12.549 11,809 608 569 amounts in millions, except share and per share data ASSETS Current Assets: Cash and Cash Equivalents Receivables, net Merchandise Inventories Other Current Assets Total Current Assets Property and Equipment, at cost Less Accumulated Depreciation and Amortization Net Property and Equipment Goodwill Other Assets Total Assets 17,724 16,484 40,426 39,266 18,512 17,075 21.914 22,191 2.093 2,102 1.235 1.196 42.966 41,973 710 $ 350 7,000 6,565 1.484 1,515 SON 476 1.669 1,566 25 34 542 77 2.195 1,941 12,524 20,79 I.RS 1,965 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short-Term Debt Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses Total Current Liabilities Long-Term Debt, excluding current installments Other Long-Term Liabilities Deferred Income Taxes Total Liabilities STOCKHOLDERS' EQUITY Common Stock, par value $0.05; authorized: 10 billion shares; issued: 1.776 billion shares at January 29, 2017 and 1.772 billion shares at January 31, 2016; outstanding: 1.203 billion shares at January 29, 2017 and 1.252 billion shares at January 31, 2016 Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock, at cost, 573 million shares at January 29, 2017 and 520 million shares at January 31, 2016 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 296 379 38,621 35.657 XN XX 9,787 9,347 35.519 30,973 (867) (898) (40.194) 4,333 (33,194) 6,316 42,966 $ 41,973 Balance outstanding at fiscal year-end Maximum amount outstanding at any month-end Average daily short-term borrowings Weighted average interest rate 44 Table of Contents The Company's Long-Term Deht at the end of fiscal 2016 and 2015 consisted of the following famounts in millions): 5.407% Senior Notes; due March 1, 2016, interest payable semi-annually on March 1 and September 1 Floating Rate Senior Notes due September 15, 2017 interest payable quarterly con March 15, June 15. September 15 and December 15 2.25% Senior Notes, due September 10, 2018; interest payable semi-annually en March 10 and September 10 2.00% Senior Notes, due June 15, 2019. Interest payable manually June 15 and December 15 3.98%Senior Notes, due September 15, 2000, interest payable semi-annually on March 15 and September 15 4.40% Senior Notes, due April , 2012, interest payable semi-annually on April 1 and October 1 2.00%Senior Notes de April 1, 2021 interest payable manually on April 1 and October 2.029% Senior Notesduone 1.2022. Interest payable semi-annually on June and December 2.2. Senior Notes de April 1. 2023, interese payable semi-annually on April 1 and October 1 3.79% Senior Notes due February 15, 21124, Interest puyable mi-annually on 3.38% Senior Notes dhe September 15, 2025, interest payable semi-amulyo March 15 and September 15 3.00%Senior Noter, due April 1, 2006 interest payable semi-annually on April 1 and October 1 3.125% Senior Notes: due September 15, 2006, interest payable semi-romually on March 15 and September 15 5.879% Sensor Notes de December 16, 2036, interest payable semi-annually on June 16 and December 16 5.40% Senior Notes, due September 15, 2040: interest payable semanmully on March 15 and September IS 5.95% Senior Notes: due April 1, 2041; interest payable semi-atmually on April 1 and October 1 4.20% Senior Notes, due April 1, 2043; interest payable semi-annually on April 1 and October 1 4.875% Senior Notes, due February 15, 2044, interest payable semi-annually on February 15 and August 15 4.40% Senior Notes, due March 15, 2045, interest puyable semi-annually en March 15 and September 15 4.25% Senior Notes, due April 1, 2046 interest payable semi-annually co April 1 and October 1 3.50% Senior Notes, due September 15,2056; interest payable semi-annually on March 15 and September 15 Capital Lease Obligations, payable in varying installments through January 31, 2055 Other Total debt Less current installments Long-Term Debt, excluding current installment SE 3 Fiscal Year Ended January 29, 2017 January 31. 2016 s 710 350 $ 710 350 Balance outstanding at fiscal year-end Maximum amount outstanding at any month-end Average daily short-term borrowings Weighted average interest rate 51 69 0.63% 0.34% Table of Contents The Company's Long-Term Debt at the end of fiscal 2016 and 2015 consisted of the following amounts in millions): 2017 January 31, 2016 3,010 499 1.151 1.156 996 994 5.40% Senior Notes: due March 1, 2016; interest payable semi-annually on March 1 and September 1 Floating Rate Senior Notes; due September 15, 2017; interest payable quarterly on March 15, June 15, September 15 and December 15 2.25% Senior Notes; due September 10, 2018; interest payable semi-annually on March 10 and September 10 2.00% Senior Notes; due June 15, 2019; interest payable semi-annually on June 15 and December 15 3.95% Senior Notes; due September 15, 2020; interest payable semi-annually on March 15 and September 15 4.40% Senior Notes; due April 1, 2021; interest payable semi-annually on April 1 and October 1 2.00% Senior Notes; due April 1, 2021; interest payable semi-annually on April 1 and October 1 2.625% Senior Notes, due June 1, 2022; interest payable semi-annually on June 1 and December 997 996 1.341 1.241 1.240 1.241 1.240 996 995 1,092 1,091 994 993 1.286 984 2,947 2.946 499 495 June 1 and December 1 2.70% Senior Notes; due April 1, 2023; interest payable semi-annually on April 1 and October 1 3.75% Senior Notes: due February 15, 2024; interest payable semi-annually on February 15 and August 15 3.35% Senior Notes; due September 15, 2025; interest payable semi-annually on March 15 and September 15 3.00% Senior Notes; due April 1, 2026; interest payable semi-annually on April 1 and October 1 2.125% Senior Notes; due September 15, 2026; interest payable semi-annually on March 15 and September 15 5.875% Senior Notes; due December 16, 2036; interest payable semi-annually on June 16 and December 16 5.40% Senior Notes; due September 15, 2040; interest payable semi-annually on March 15 and September 15 5.95% Senior Notes; due April 1, 2041; interest payable semi-annually on April 1 and October 1 4.20% Senior Notes, due April 1, 2043; interest payable semi-annually on April 1 and October 1 4.875% Senior Notes; due February 15, 2044; interest payable semi-annually on February 15 and August 15 4.40% Senior Notes: due March 15, 2045; interest payable semi-annually on March 15 and September 15 4.25% Senior Notes; due April 1, 2046; interest payable semi-annually on April 1 and October 1 3.50% Senior Notes; due September 15, 2056; interest payable semi-annually on March 15 and September 15 Capital Lease Obligations; payable in varying installments through January 31, 2055 Other Total debt Less current installments Long-Term Debt, excluding current installments 988 988 988 987 978 977 976 976 1.584 1.235 971 878 763 1 22,891 20,866 77 542 22,349 S 20,789

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