Home Depot 2011 Annual Report Download - page 15

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and volatility in the capital markets could result in diminished availability of credit, higher cost of borrowing and lack of
confidence in the equity market, making it more difficult to obtain additional financing on terms that are favorable to us.
If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in
our international operations.
Our ability to successfully conduct retail operations in, and source from, international markets is affected by many of the
same risks we face in our U.S. operations, as well as unique costs and difficulties of managing international operations. Our
international operations, including any expansion in international markets, may be adversely affected by local laws and
customs, U.S. laws applicable to foreign operations, such as the Foreign Corrupt Practices Act ("FCPA") and other legal and
regulatory constraints, as well as political and economic conditions. Risks inherent in international operations also include,
among others, potential adverse tax consequences, greater difficulty in enforcing intellectual property rights, risks associated
with FCPA and local anti-bribery law compliance, challenges in our ability to identify and gain access to local suppliers and
the impact of foreign currency exchange rates and fluctuations.
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 with the services
provided by our third-party installers. If we fail to manage these processes effectively or provide proper oversight of these
services, we could suffer lost sales, fines and lawsuits, as well as damage to our reputation, which could adversely affect our
business.
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.