Home Depot 2009 Annual Report Download - page 15

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If we are unable to manage effectively our installation service business, we could be subject to fines and
lawsuits.
We act as a general contractor to provide installation services to our D-I-F-M customers through third-party
installers. As such, we are subject to regulatory requirements and risks applicable to general contractors, which
include management of licensing, permitting and quality of our third-party installers. We have established
processes and procedures that provide protections beyond those required by law to manage these requirements
and ensure customer satisfaction. If we fail to manage these processes effectively, we could suffer lost sales,
fines and lawsuits.
Changes in accounting standards and subjective assumptions, estimates and judgments by management
related to complex accounting matters could significantly affect our financial results or financial condition.
Generally accepted accounting principles and related accounting pronouncements, implementation guidelines
and interpretations with regard to a wide range of matters that are relevant to our business, such as revenue
recognition, asset impairment, impairment of goodwill and other intangible assets, inventories, lease
obligations, self-insurance, tax matters and litigation, are highly complex and involve many subjective
assumptions, estimates and judgments. Changes in these rules or their interpretation or changes in underlying
assumptions, estimates or judgments could significantly change our reported or expected financial performance
or financial condition.
We are involved in a number of legal proceedings, and while we cannot predict the outcomes of those
proceedings and other contingencies with certainty, some of these outcomes may adversely affect our
operations or increase our costs.
We are involved in a number of legal proceedings, including government inquiries and investigations, and
consumer, employment, tort and other litigation that arise from time to time in the ordinary course of business.
Litigation is inherently unpredictable, and the outcome of some of these proceedings and other contingencies
could require us to take or refrain from taking actions which could adversely affect our operations or could
result in excessive verdicts. Additionally, defending against these lawsuits and proceedings may involve
significant expense and diversion of management’s attention and resources from other matters.
Item 1B. Unresolved Staff Comments.
Not applicable.
9