Home Depot 2015 Annual Report Download - page 9

Table of Contents
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"SmartWay Excellence Award", which recognizes The Home Depot as an industry leader in freight supply chain
environmental performance and energy efficiency. We also participate in the CDP (formerly known as the Carbon Disclosure
Project) reporting process. CDP is an independent, international, not-for-profit organization providing a global system for
companies and cities to measure, disclose, manage and share environmental information. In 2015, we scored 99 out of 100
from the CDP for our disclosure, placing us among the highest scoring companies in the Index and near the top of our sector.
We also were named as an industry leader by the CDP and received a performance band ranking of A- (out of a range from A
to E), reflecting a high level of action on climate change mitigation, adaptation and transparency.
We are strongly committed to maintaining a safe shopping and working 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
varying degrees of 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.
Returning Value to Shareholders. As noted above, we drive productivity and efficiency through our capital allocation
decisions, with a focus on expense control. This discipline drove higher returns on invested capital and allowed us to return
value to shareholders through $7.0 billion in share repurchases and $3.0 billion in dividends in fiscal 2015, as discussed in
Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations".
Data Breach
In the third quarter of fiscal 2014, we confirmed that our payment data systems were breached, which impacted customers
who used payment cards at our U.S. and Canadian stores (the "Data Breach"). For a description of matters related to the Data
Breach, see Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and Note 13
to the Consolidated Financial Statements included in Item 8, "Financial Statements and Supplementary Data".
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. 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.
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
hardware stores, paint stores, mail order firms, warehouse clubs, independent building supply stores, MRO companies and, to
a lesser extent, other retailers, as well as with installers of home improvement products. In addition, we face growing
competition from online and multichannel retailers, some of whom may have a lower cost structure than ours, as our
customers increasingly use computers, tablets, smartphones and other mobile devices to shop online and compare prices and
products in real time. Intense competitive pressures from one or more of our competitors or our inability to adapt effectively
and quickly to a changing competitive landscape could affect our prices, our margins or demand for our products and
services. If we are unable to timely and appropriately respond to these competitive pressures, including through maintenance
of customer service and customer relationships to deliver a superior customer experience, our market share and our financial
performance could be adversely affected.