Home Depot 2006 Annual Report Download - page 17

and new areas of business. We are not aware of any facts that could be expected to have a material
adverse affect on our intellectual property.
Quality Assurance Program. We have a quality assurance program for our directly imported globally-
sourced products. Through this program, we have established criteria for supplier and product
performance, which measures factors such as product quality and timeliness of shipments. The
performance record is made available to the factories to allow them to strive for improvement. The
program addresses quality assurance at the factory, product and packaging levels.
Environmental, Health & Safety (‘‘EH&S’’). We are committed to maintaining a safe environment for
our customers and associates, and protecting the environment of the communities in which we do
business. Our EH&S function in the field is directed by trained associates focused primarily on
execution of the EH&S programs. Additionally, we have an Atlanta-based team of dedicated EH&S
professionals who evaluate, develop, implement and enforce policies, processes and programs on a
Company-wide basis.
Item 1A. Risk Factors.
The risks and uncertainties described below could materially and adversely affect our business, financial
condition and results of operations and could cause actual results to differ materially from our
expectations and projections. While we believe that our assumptions, expectations and projections are
reasonable in view of the currently available information, you are cautioned not to place undue reliance
on our forward-looking statements. These statements are not guarantees of future performance. They
are subject to future events, risks and uncertainties – many of which are beyond our control – as well
as potentially inaccurate assumptions that could cause actual results to differ materially from our
expectations and projections. Forward-looking statements may relate to such matters as Net Sales
growth, comparable store sales, impact of cannibalization, state of the residential construction and
housing markets, commodity price inflation and deflation, implementation of store initiatives,
protection of intellectual property rights, Net Earnings performance, including Depreciation and
Amortization expense, earnings per share, stock-based compensation expense, store openings and
closures, capital allocation and expenditures, the effect of adopting certain accounting standards, return
on invested capital, management of our purchasing or customer credit policies, strategic direction,
including whether or not a sale or initial public offering of HD Supply will occur or, if a transaction is
undertaken, its terms or timing, and the demand for our products and services. You should read these
Risk Factors in conjunction with ‘‘Management’s Discussion and Analysis of Financial Condition and
Results of Operations’’ in Item 7 of this report and our Consolidated Financial Statements and related
notes in Item 8 of this report. There also may be other factors that we cannot anticipate or that are
not described in this report, generally because we do not perceive them to be material, that could cause
results to differ materially from our expectations. Forward-looking statements speak only as of the date
they are made, and we do not undertake to update these forward-looking statements. You are advised,
however, to review any further disclosures we make on related subjects in our periodic filings with the
SEC.
Rising costs, a reduction in the availability of financing, weather and other conditions in North America could
adversely affect our costs of doing business, demand for our products and services and our average ticket
price.
Interest rates, fuel and other energy costs, labor and healthcare costs, availability of financing,
employment, state of the residential construction and housing markets, consumer confidence and
general economic outlook, weather, natural disasters, terrorism and other conditions that adversely
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