Home Depot 2011 Annual Report Download - page 12

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Our efforts have resulted in a number of environmental awards and recognitions. For instance, in 2011, we were named
"Retail Partner of the Year" by the WaterSense division of the U.S. Environmental Protection Agency for our overall
excellence in water efficiency, and we were recognized as a "High Performer" by the Carbon Disclosure Project.
We are also committed to maintaining a safe environment for our customers and associates and protecting the environment of
the communities in which we do business. Our Environmental, Health & Safety ("EH&S") function is dedicated to ensuring
the health and safety of our customers and associates, with trained associates who evaluate, develop, implement and enforce
policies, processes and programs on a Company-wide basis. Our EH&S policies are woven into our everyday operations and
are part of The Home Depot culture. Some common program elements include: daily store inspection checklists (by
department); routine follow-up audits from our store-based safety team members and regional, district and store operations
field teams; equipment enhancements and preventative maintenance programs to promote physical safety; departmental
merchandising safety standards; training and education programs for all associates, with more extensive training provided
based on an associate's role and responsibilities; and awareness, communication and recognition programs designed to drive
operational awareness and understanding of EH&S issues.
Interconnected Retail
Our interconnected retail initiative supports and connects our three other key initiatives. In fiscal 2011, we focused on
leveraging technology to improve our customer's retail experience and provide better access to and information about our
products. As described above, these efforts included information technology solutions that take tasks out of the store and free
our associates to devote more time to customer-facing activities. They also included significant website enhancements and
improvements to our special ordering process that allow customers to more easily find and purchase an expanded array of
products and provide a choice in how to receive the order (for example, through our BOPIS program). Through our website,
which can be accessed through computers, smart phones and other mobile devices, customers can not only purchase products,
but can also connect with our associates and with one another to gain product and project knowledge. Furthermore, to
increase the productivity and efficiency of our associates, merchants and vendors and ensure that the right product is in the
right place to meet our customers' needs, we developed and implemented the improved merchandising tools that provide
better visibility into category and item performance and the new distribution forecasting and replenishment system for
enhanced inventory management.
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. The Risk Factors
described below include the considerable risks associated with the current economic environment and the related potential
adverse effects on our financial condition and results of operations. You should read these Risk Factors in conjunction with
"Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 and our Consolidated
Financial Statements and related notes in Item 8. There also may be other factors that we cannot anticipate or that are not
described in this report generally because we do not currently perceive them to be material. Those factors could cause results
to differ materially from our expectations.
Sustained uncertainty regarding current economic conditions and other factors beyond our control could adversely affect
demand for our products and services, our costs of doing business and our financial performance.
Our financial performance depends significantly on the stability of the housing, residential construction and home
improvement markets, as well as general economic conditions, including changes in gross domestic product. Adverse
conditions in or sustained uncertainty about these markets or the economy could adversely impact consumer confidence,
causing our customers to delay purchasing or determine not to purchase home improvement products and services. Other
factors – including high levels of unemployment and foreclosures, interest rate fluctuations, fuel and other energy costs, labor
and healthcare costs, the availability of financing, the state of the credit markets, including mortgages, home equity loans and
consumer credit, weather, natural disasters and other conditions beyond our control – could further adversely affect demand
for our products and services, our costs of doing business and our financial performance.
Strong competition could adversely affect prices and demand for our products and services and could decrease our market
share.
We operate in markets that are highly competitive. We compete principally based on customer service, price, store location
and appearance, and quality, availability and assortment of merchandise. In each market we serve, there are a number of other
home improvement stores, electrical, plumbing and building materials supply houses and lumber yards. With respect to some
products and services, we also compete with specialty design stores, showrooms, discount stores, local, regional and national