Home Depot 2013 Annual Report Download - page 15

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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 the Foreign
Corrupt Practices Act 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.
The inflation or deflation of commodity prices could affect our prices, demand for our products, our sales and our profit
margins.
Prices of certain commodity products, including lumber and other raw materials, are historically volatile and are subject to
fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market
speculation, government regulations and periodic delays in delivery. Rapid and significant changes in commodity prices may
affect the demand for our products, our sales and our profit margins.
Our ability to obtain additional financing on favorable terms, if needed, could be adversely affected by the volatility in the
capital markets.
We obtain and manage liquidity from the positive cash flow we generate from our operating activities and our access to
capital markets, including our commercial paper programs supported by a back-up credit facility with a consortium of banks.
There is no assurance that our ability to obtain additional financing through the capital markets, if needed, will not be
adversely impacted due to economic conditions. New or incremental tightening in the credit markets, low liquidity 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.
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.