the home depot, inc. (hd)
Annual reports submitted under sections 13 or 15 (d)
Under sections 13 or 15, in the Exchange Act 31, 2016 or transition report for fiscal year 34, 19 (d)
1934 Securities Trading Act of Commission Document No. 1-
Home Depot 8207(
The exact name of the registrant specified in the articles of association)DELAWARE(
State or other jurisdiction registered or organized)95-3261426(I. R. S.
Employer identity number)
2455 steps 30339, Atlanta Ferry Road, Georgia (
Main executive office address)(Zip Code)
The registrant\'s telephone number, including the area code :(770)433-
8211 securities registered under article (b)
Title of the act: each class name of each exchange registered for common stock, $0.
The face value of the New York Stock Exchange registered under section 12th (g)
Key points of the act: if the registrant is healthy, it is not indicated by a check mark
Well-known experienced issuers as defined in Rule 405 of the Securities Act.
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Indicate by check mark whether the registrant (1)
All reports requested in Section 13 or 15 have been submitted (d)
Securities Trading Act of 1934 within the first 12 months (
Or a short period of time required for the registrant to submit such reports), and (2)
This filing requirement has been bound for the last 90 days.
Is the person who checked the mark for Yes Zaino \"Indicate also submitted electronically and posted on its company website (if any), each interactive data file requested to be submitted and as per article 405th S-
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Or in such a short time that the registrant is required to submit and publish these documents).
Yes, if the declaration of arrears is disclosed under section 405th of the regulations, please indicate by check mark --
K is not included here and, to the knowledge of the registrant, will not be included in the final proxy or information statement referenced in Part 2 of this Form 10 --
K or any amendments to this form 10K.
Indicate by check mark whether the registrant is a large accelerated file manager, a non-accelerated file manager
A smaller reporting company.
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: Big acceleration file-
Indicate by check mark whether the registrant is a shell company (
Defined in Rule 12b-
2 parts of the transaction law).
Yes, the total market value of ordinary shares held by non-registrants
The affiliate of registrant onAugust2 is $2015, or $150. 1 billion.
The number of outstanding shares of the registrant\'s common stock is 2016 shares and 252,951,007 shares.
The documents contained in the reference section of the registrant\'s proxy statement at the 2016 annual general meeting are incorporated by reference into the second part of this Form 10-
K to the extent described in this article.
Home Depot Company
KTABLE CONTENTSPARTIItem1. BusinessItem1A.
Risk factor 1b.
Unresolved employee reviewsProperty item3.
Legal action 4.
Information disclosure of Mine Safety 5.
The market in which the registrant\'s common stock, related shareholder matters and the issuer purchase equity securities.
Selected Financial Data 7.
Management Discussion and Analysis of the financial status and results of the operating website 7a.
Quantitative and qualitative disclosure on the market riskitem8.
Financial statements and supplementary data 9.
Changes and disagreements with accountants on accounting and financial disclosure project 9a.
Control and procedures.
Directors, executives and corporate governance
Security ownership of certain beneficial owners and management and related shareholders mattersitem13.
Certain relationships and related party transactions, as well as independent programs for directors 14.
Major accounting fees and services
According to the contents of the Private Securities Litigation Reform Act 1995 statement of exhibits and schedule of Financial Statements Certain statements contained in this agreement concerning our future performance constitute \"forward-
The \"outlook statement\" as defined in the Private Securities Litigation Reform Act of 1995 \". Forward-
Forward-looking statements may involve, among other things, the need for our products and services;
Net sales growth;
Comparable store sales;
The impact of competition;
Housing construction, housing and home improvement market conditions;
Credit market conditions including mortgage loans, housing equity loans and consumer credit;
Demand for credit products;
Inventory and inventoryStock positions;
Implement store, connected retail and supply chain initiatives;
Manage relationships with suppliers and suppliers;
The impact and expected results of investigations, inquiries, claims and litigation, including those related to the data breaches we found in the third quarter of fiscal 2014;
Issues related to the payment method we accept;
Continue the share repurchase plan;
Net profit performance;
Earnings per share;
Capital allocation and expenditure; liquidity;
Return on investment capital;
Cost leverage; stock-
Basic compensation costs;
Rising commodity prices and deflation
Ability to issue debt on terms and rates that we can accept;
The effect of accounting fees;
The effect of adopting certain accounting standards;
Opening and closing of stores;
Integration of Interline Brands
The ability to recognize the expected synergies and benefits of acquisitions. Forward-
Forward-looking statements are based on the information currently available and our current assumptions, expectations, and predictions of future events.
You should not rely on our progress.
Look at the report.
These statements are not guarantees of future performance and will be influenced by future events, risks and uncertainties-many of which are beyond our control and depend on the actions of third parties, or which we do not know at the moment, and potentially inaccurate assumptions that may lead to significant differences between actual results and our expectations and forecasts.
These risks and uncertainties include but are not limited to the risks and uncertainties described in project 1a, \"risk factors\" and other parts of this report. Forward-
Statements that appear to be made only on the date of publication, and we do not undertake to update them, except as required by law.
However, it is recommended that you review any further disclosures made by us in the documents submitted to the Securities and Exchange Commission on a regular basis on the relevant subject matter (\"SEC\"). PARTIItem1. Business.
Introduction to Home Depot Co. , Ltd.
According to 2016 net sales in the fiscal year, it is the world\'s largest home improvement retailer (\"fiscal2015\").
Home Depot sells a wide range of building materials, home improvement products, lawn and garden products, and offers a wide range of services.
Home Depot has an average storefront area of about square feet and a garden area of about 24 000 square feet.
As of the end of 2015 at fiscal, we have 274 Depot stores across the United States, including the federal and US territories of Puerto RicoS.
Virgin Islands, Guam, Canada and Mexico.
When we refer to \"Home Depot\", \"company\", \"us\" or \"ours\" in this report, we refer to Home Depot Company
And its merged subsidiaries.
Home Depot Limited
It is a Delaware company founded in 1978.
Our store support center (
Located at 2455 steps Ferry Road, Atlanta, GA, zip code 30339.
Our phone number is770)433-8211.
Our website is www. homedepot. com.
We provide our annual report to shareholders, Annual Report on Form10 free of charge in the Investor Relations section of our website
Quarterly Report on Form10
Q: Latest report on Form8
K, agency statement and Forms3, 4 and 5, and changes to such reports as soon as reasonably practicable after submitting such documents to SEC or providing such documents to SEC
We include our website address throughout the filing process for reference only.
The information contained on our website is not included in this report by reference.
For information on key financial highlights including historical revenue, profits and total assets, see \"five
Annual Summary of Financial and Operational Results\"
This report 1 and Item 7 \"Management Discussion and Analysis of the financial position and results of operations \".
Since 2009, we have been following a consistent strategic framework around our customers, our products, and our strict capital use Organization, linked through our interconnected retail initiatives.
In fiscal2015, we announced the evolution of this strategy to reflect the changing needs of our customers and businesses.
The basic aspects remain the same, but we are now more focused than ever on connecting all aspects of the business to create value for customers, colleagues, suppliers and shareholders.
Our current strategic framework includes three key initiatives-customer experience, product authority, and productivity and efficiency driven by capital allocation-which are linked to our connected retail initiatives.
As customers increasingly expect to be able to buy the way, time and place they want, we believe in providing a seamless, frictionless shopping experience across multiple channels, features fast and cost-delivered innovation and expanded product selection
An efficient way will be a key factor in future success.
Be the bestin-
As the line between online and online, the importance of class Internet retailers is growing.
Shopping in the store continues to be blurred and customers demand added value and convenience.
As discussed in more detail below, retail connectivity is intertwined through our other three initiatives.
For example, under our customer experience program, we focus on connecting our store to our online experience and connecting services to customer needs.
Under our product licensing program, we focus on connecting our product categories to local needs and connecting our customers to product information to motivate and empower them
Under our productivity and efficiency initiatives, we are committed to connecting our goods from suppliers to customers by optimizing the supply chain.
Overall, we work more closely both internally and externally through deeper cross-cooperation
Functional work and more integrated, longer
Achieve long-term cooperation with our suppliers and other business partners to build a complete final goalto-end solutions.
Customer experience our customer experience program is based on the principle of putting customers first and taking care of our colleagues.
Our commitment to customer service is a key part of this initiative, and in fiscal2015, to emphasize the importance of customer service, we re-
Train our store staff in our customer first program.
We recognize that the customer experience is not just customer service, we have taken some steps to strengthen this initiative to provide our customers with a seamless, frictionless shopping experience in our stores, online, on-site or at home. Our Customers.
We serve three major customer groups and we have different ways to meet their special needs:It-Yourself (\"DIY\")Customers.
These customers are usually homeowners who buy products and complete their own projects and installations.
Our partners help these customers on our store and installation issues through online resources and other media designed to provide product and project knowledge.
We also offer a variety of clinics and workshops to impart this knowledge and to build emotional connections with our DIY customers. Do-It-For-Me (\"DIFM\")Customers.
These customers are typically homeowners who purchase materials and hire third parties to complete the project or installation.
Our store offers a variety of installation services to DIFM customers who purchase products and install them from our store, online or home in the following ways
Our installers include many categories such as flooring, cabinets, countertops, water heaters and sheds.
In addition, we provide
Party professional installation through our in-sale of multiple categories
Home sales items such as roofs, siding, windows, cabinet renovations, stoves and central air conditioning systems.
This customer base is growing due to changes in population structure, which we believe will increase the demand for our installation services.
In addition, we focus on providing services to professional customers or \"professionals\" who provide these services to our DIFM customers, which will help us drive higher product sales.
These customers are mainly professional fitters/retrofits, general contractors, maintenance workers, installers, small business owners and merchants.
We bought Interline Brands, Inc. (\"Interline\")
In August 2015, we extended our services to maintenance, repair and operations (\"MRO\")Pro.
We recognize the unique service needs of professional customers and use our expertise to facilitate their purchase experience.
We offer a variety of special projects to these customers, including delivery and
Call service, dedicated staff, expanded credit program, designated parking spaces close to store entrance and online bulk pricing programShop shopping.
In addition, we have retained a loyalty program Pro Xtra, offering useful discounts on business services, exclusive product offers and purchasing tracking tools for our professionals, receipts that support online shopping and job tracking in all forms of payment look up table 2 content.
The plan was launched in fiscal 2013 and continues to gain traction, with nearly 4 million customers registered as of the end of 2015 at fiscal.
We also recognize that our professionals have different needs depending on the type of work they do.
Our goal is to develop a wide range of solutions for all our professional customers, such as providing regular MRO requirements and core building materials to large customers
Expand property managers and provide inventory management solutions for our traditional professional clients.
We believe that developing a unified approach to all the needs of our professionals will differentiate us from our competitors who are purely traditional retail, installation or MRO companies.
We help our DIY, DIFM and Pro customers finance their projects by offering private label credit products in our store in a third way
Third party credit providers
We also help some of our professionals through our own projects.
At fiscal2015, about 3 of our clients were opened.
With 2 million new Home Depot private label credit accounts, the total number of Home Depot active account holders was approximately 12 million at the end of the fiscal year.
At fiscal2015, sales of self-owned credit cards account for about 23% of total sales.
In addition, in the United States,S. we re-
Launch our private label credit program at the end of 2015 with additional benefits including 365-
Daily return policy for all of our customers, as well as commercial fuel rewards and extended payment terms for our professionals. Our Associates.
Our employees are key to our customer experience program.
As mentioned above, we enhance our staff\'s ability to provide quality customer service through customer first training programs, and we strive to eliminate complex and inefficient processes from the store, let our employees focus on our customers.
In fiscal2015, we started to launch some new initiatives to improve the handling of freight in the store, as well as the project Sync, which was discussed in more detail under \"logistics\" below.
All of these projects are designed to make our freight handling process more efficient, which allows our employees to devote more time to the customer experience and make it at home
We also have a number of projects to recognize store and individual staff serving special clients and communities.
At the end of fiscal in 2015, we hired about 385,000 partners, of whom about 24,000 were paid and the rest were compensated hourly or on a temporary basis.
In order to attract and retain qualified talents, we strive to maintain competitive wage and wage levels in each market we serve.
We often measure the satisfaction of our employees, and we believe our relationship is very good.
In fiscal2015, we continue to enhance our customers\' online shopping experience through various initiatives.
Our colleagues used the first generation of the second generation of mobile phones, our network
Enable handheld devices to help customers complete online sales on the aisle, speed up the customer\'s checkout process during peak traffic, find products in the aisle and online, and check the inventory on hand.
We also provide our customers with improved product location and inventory availability tools by enhancing our website and mobile applications, we put more detailed product information into content improvements such as videos, ratings and reviews.
These enhancements are critical to our increasingly connected customers who study products online and then enter one of our stores to view the products in person or talk to colleagues before purchasing.
In the store, customers can also view ratings and reviews online, compare prices, and view our extended categories and purchase products.
We continue to enhance our special order process in fiscal2015 through our new customer order management platform (\"COM\")
It was launched in fiscal 2014.
The platform is designed to provide more special order visibility and better execution for our colleagues and to provide a more seamless, frictionless experience for our customers.
After COM launched to all American companiesS.
We expect that by the end of fiscal 2016, store staff, suppliers and customers will be able to access relevant special order information online, regardless of where the order is placed.
In addition, we have three online contact centers to meet the needs of our online customers.
We also recognize that customers want greater flexibility and convenience when receiving products and services.
At fiscal2015, we started rolling out online purchases to deliver goods from the store (\"BODFS\")
, Complement our existing connected retail projects: online purchase, selectionup In Store (\"BOPIS\")
, Online purchase, delivery to the store (\"BOSS\")
Buy online, return in store (\"BORIS\").
We expect to complete the launch of BODFS by the end of fiscal 2016.
We will continue to integrate our physical and digital assets in a seamless and frictionless way to enhance the terminalto-
End customer experience.
3 ContentsProduct authorization form our product sales transformation and portfolio strategy promotes your product authorization plan, which focuses on providing product innovation, classification and value.
In fiscal2015, we continue to introduce a variety of innovative new products to our DIY, DIFM and Pro customers, while continuing to focus on delivering daily value in our stores and online. Our Products.
In fiscal2015, we have introduced many innovative and unique products to our customers with very attractive value.
Examples of these new products include EGO. ™58-
Outdoor power tools (volt)
String trimmer, hedge trimmer, hair dryer, chainsaw and mower);
Husky®100 platform for mechanical tools;
Milwaukee®Cobalt red spiral™Drill bit;
And Feit®Electric HomeBrite®Bluetooth®Smart LED bulb.
During fiscal2015, we continue to provide value to our customers through our proprietary and exclusive brands in a wide range of departments.
Highlights of these products include Husky®Storage of hand tools and tools;
Hampton Bay®Lighting, ceiling fans and patio furniture;
Vigoro®Lawn care products;
Rich®And Ryobi. ®Electric tools;
HDX®Storage and cleaning products;
Home decoration collection®Furniture and home decor.
We will continue to evaluate departments and categories online and online
The store has the opportunity to expand the range of products available in the Home Depot proprietary and exclusive brand portfolio.
We keep our global sourcing plan to get high
Quality and innovative products directly from manufacturers around the world.
In addition to our USA, in fiscal2015S.
We have sourcing offices in China, Taiwan, India, Italy, Mexico and Canada.
As we acquired Interline, we also acquired more procurement offices in China, Thailand and Indonesia.
Our net sales percentage per major product category (
For each of the last three fiscal years, listed in note 1 to consolidated financial statements included in Item 8, financial statements and supplementary data.
Net sales outside the USS. were$8. 0 billion,$8. $5 billion and $8.
5 billion, 2014 and respectively. Long-
Living assets outside the United StatesS. totaled$2. 3 billion,$2. $5 billion and $2.
As at February 1, 2015, 9 billion and 2016, 2014 and respectively.
Our suppliers are obliged to ensure that their products comply with applicable international, federal, state and local laws.
In addition, we have quality assurance and engineering resources and are committed to setting standards and overseeing compliance with safety, quality and performance standards for our proprietary brand products.
We have also developed a global supplier social and environmental responsibility plan to ensure that all suppliers comply with the highest standards of social and environmental responsibility. Environment-
Friendly products and projects.
Home Depot is committed to sustainable business practices-from the environmental impact of our operations, to our procurement activities, to our participation in the business community.
We are confident that these efforts will continue to be successful in creating value for our customers and shareholders.
For example, we provide more and more environmental products.
The product of choice that supports sustainable development and helps our customers save energy, water and money.
Through our ecological choices®Launched in 2007, we created product categories that allow customers to easily identify products that meet energy efficiency, water conservation, healthy homes, clean air and sustainable forestry specifications.
As of the end of 2015, fiscal, our ecological options®The project includes more than 10,000 products.
Through this project, we are selling Energy Star. ®Certified appliances, LED bulbs, tank-free water heaters and other products enable our customers to save on electricity charges.
We estimate that in fiscal2015, we have helped customers save more than $0. 7 billion in power costs by selling energy star®Energy Star-certified products and over $0. 3 billion in product costs®Rebate plan.
We also estimate that our customers saved 70 billion gallons of water and saved over $0. 59 billion in the fiscal2015 by selling our WaterSense®-
Bathtub faucet with label, shower head, hair dryer, toilet and irrigation controller.
We continue to provide store recycling programs across the country, E. G.
Compact fluorescent lamps for storage (\"CFL\")
Bulb recycling is scheduled to start in 2008.
This service is available to customers free of charge and is available in all parts of the United States. S. stores.
We kept it.
Storage rechargeable battery recovery plan.
The project was launched in 2001 and is currently completed in partnership with call2cycle and is also available to customers free of charge in all stores in the United StatesS.
Through these recycling plans, in fiscal2015, we helped recycle more than 680,000 pounds CFL bulbs and more than 930,000 pounds rechargeable batteries collected from customers.
In fiscal2015, we also recycled more than 170,000 lead-acid batteries collected from our customers under our lead-acid battery exchange program, as well as more than 200,000 tons of cardboard through the national cardboard recycling program in the United StatesS. stores.
We believe in our ecological choices. ®The project and our recycling efforts drive sales, which in turn benefits our shareholders, as well as our customers and the environment.
4 Contact The content table of retail.
A typical Home Depot store stores about 30 000 to 40 000 products in a year, including national brands and proprietary products.
In order to improve our sales capacity, we continue to improve the information technology tools in fiscal2015 to better understand our customers and provide a more localized product portfolio to meet their needs and optimize the space, use the right square feet in the right location for the right product.
We also continue to use resources from BlackLocus, Inc.
This is a data analysis and pricing company we acquired in fiscal 2012, designed to help us make centralized sales decisions based on large complex data sets.
Our online products complement our store through extended channels, and we offer a wider range of products through Home Depot, home decor collection, and blinds. com websites.
We continue to enhance our website and mobile experience by improving navigation and search capabilities, making it easier for customers to find and purchase a range of extended products and providing flexibility and convenience for customers\' purchases, for example, through our BOPIS, BOSS, BORIS, and BODFS projects.
In addition, we invest in content such as video, room scene, purchase guide and how to operate
We regularly evaluate our online classification to balance selection and planning to deliver value to our customers.
Thanks to these efforts, in fiscal2015, we enhanced the customer experience and saw an increase in website traffic, an increase in online sales conversion rate, and a greater proportion of orders in our stores.
We have more than 1 for fiscal2015.
4 billion visits to our online property;
Compared with fiscal 25%, sales of our online channels increased by more than 2014;
More than 40% of our online orders were received in one store. Seasonality.
Our business is affected by seasonal factors.
Generally speaking, our highest sales volume occurs in our second fiscal quarter, and the lowest sales volume occurs in our first or fourth fiscal quarter. Competition.
The competition in our industry is fierce, mainly based on customer service, price, store location and appearance, as well as the quality, availability and classification of goods.
Although we are currently the largest home improvement retailer in the world, there are many other home improvement shops, electrical appliances, plumbing and construction materials supply companies in every market we serve, as well as timber yards
We also compete with professional design stores, showrooms, discount stores, local, regional and national hardware stores, paint stores, mail order companies, warehouse clubs in some product and service areas, independent building supply stores, MRO and other retailers, as well as installers for home improvement products.
In addition, as our customers are increasingly using computers, tablets, we are facing increasingly fierce competition from online and multi-channel retailers, the cost structure of some of these retailers may be lower than ours for online shopping and comparison of prices and products for smartphones and other mobile devices.
Our business has one of the most famous brands in North America.
Therefore, we believe that Home Depot®Trademark has important value and is an important factor in our product marketing.
Business, store and business.
We have registered or applied for registered trademarks, service trademarks, copyrights and Internet domain names for our business, including our ever-expanding proprietary brands such as HDX®Husky®Hampton Bay hotels®Home decoration collection®Glacier Bay®And Vigoro. ®.
We also retain a patent portfolio related to some of our products and services and seek patents or otherwise protect the innovations we incorporate into our product or business operations.
Capital allocation drives productivity and efficiency we build the best-in-
Gain first-class competitive advantage in our information technology and supply chain to better ensure customer product availability while managing our costs to deliver higher returns to shareholders.
During fiscal2015, we continue to focus on optimizing the supply chain network and improving the efficiency of inventory, transportation and distribution. Logistics.
Our supply chain operations focus on creating competitive advantage by ensuring customer product availability, effectively leveraging inventory investments, and managing total supply chain costs.
One of our main initiatives is to further optimize and efficiently operate our network by starting a multi-field initial effort
Annual plan called \"supply chain Sync\" or \"project Sync.
Our distribution strategy is to provide the best logistics path for a given product.
Rapid Deployment Center (\"RDCs\")
Plays a key role in optimizing our network as they allow product requirements from multiple stores to be aggregated to a single purchase order and then quickly allocate and deploy inventory to RDC upon arrival.
This simplifies the ordering process and improves transportation and inventory management.
We have 18 Mechanized RDCs in the United States. S.
Two companies have recently opened mechanized RDCs in Canada.
Through Project sync, the project is gradually being promoted to several suppliers in the United StatesS.
RDCs, we can significantly shorten the average lead time from supplier to shelf.
Project sync requires deep collaboration between our suppliers, transport suppliers, RDCs and stores, as well as rigorous planning and information technology development to create a timeline for engineering processes that Shorten and stabilize lead times, resulting in a more predictable and consistent freight flow of the contents of the 5 tables.
As we continue to roll out project syncing throughout the supply chain over the next few years, we plan to create a terminalto-
The final solution benefits all participants in our supply chain, from our suppliers to our transportation providers to our RDC and store partners to our customers.
Over the past few years, we have focused our inventory planning and replenishment functions to continuously improve Forecasting and Replenishment technologies.
This helps us improve product availability and inventory productivity at the same time.
At the end of fiscal2015, more than 95% of our USS.
Order store products through central inventory management.
In addition to our RDCs, at the end of 2015 at fiscal, we also operate 34 bulk distribution centers that handle the best distribution of products on us flat-panel trucksS. and Canada;
22 stocking distribution centers in the United StatesS.
Canada and Mexico;
As well as ten professional distribution centers in the United States, including offshore integration and return logistics centers. S. and Canada.
We also use fourS.
Transshipment facilities operated by third parties near the harbor for our imported products.
These facilities enable us to improve our import logistics costs and inventory management by delaying final inventory deployment decisions until the product reaches the destination port.
We remain committed to making the most of and optimizing our improved logistics network and leveraging our supply chain capabilities.
To support our online growth, we opened the third of three new direct fulfillment centers in fiscal2015 (\"DFCs\").
We expect these facilities to enable us to reach 90% of the United States. S.
Parcel Shipping provides customers with a cost efficiency and speed balance for online order shipping within two business days or less. For non-
Package order from our DFCs, we fully implemented BOSS through RDC delivery, providing cheaper shop pick service for our customersup alternative.
As we acquired Interline, we also added more than 90 distribution points by quickly delivering a variety of MRO products.
In addition to the above distribution and fulfillment centers, we also use our funds of nearly $2,000. S.
As an online store that is convenient for customers to choose
Return and delivery of fulfillment locations.
For customers who shop online and want to pick-
Buy or return in our USAS.
We have fully implemented the BOPIS, BOSS and BORIS programs, which we believe provide us with a competitive advantage.
For customers who wish to choose a store --
We send orders directly to their home or work location to pick, pack and ship orders from our store to customers.
We will continue to launch BODFS in fiscal 2016, allowing online customers to select their preferred delivery date and time window for the store
Based on delivery.
Our supply chain and logistics strategy will continue to focus on providing convenient and low-cost product supply to our customers.
Commitment to sustainable development and business responsible for the environment.
Home Depot focuses on sustainable operations and is committed to doing business in an environment-responsible manner.
This commitment affects all areas of our business, including energy use, supply chain, store building and maintenance, as described above, in the \"environment-
Provide friendly products and projects to our customers \", product selection and recycling projects.
In our 2015 Sustainability Report, on our corporate website, under \"corporate responsibility> THD and the environment\", we report that, we have significantly exceeded the energy and carbon reduction targets set in 2010 and announced two new sustainable development goals for 2020.
Our goal of 2010 is to reduce the kilowatt hours (kWh)
Every square foot of our AmericaS.
The store is 2004 full of 20%, reducing the carbon emissions of our supply chain by 20% in 2015 by more than 2010.
We estimate that by the end of fiscal 30%, we have reduced levels by more than 35% and more than 2015, respectively.
From 2014 to 2015 alone, we were reduced by about 3 KW hours per square foot. 6%.
Our new 2020 sustainable commitment is to reduce our America. S.
The store\'s energy usage has increased by 20%, by more than 2010, and produces and purchases 135 MW of energy for our stores every year through renewable or alternative sources, such as wind energy, solar and fuel cell technologies.
We are committed to the implementation of strict operating standards to establish energy-efficient operations in all regions of the United StatesS.
Facilities and continuous investment in renewable energy.
Our 2015 Sustainability Report also uses the Global Reporting Initiative (GRI)
Framework for Sustainable Development reporting.
In addition, we implemented a rainwater recycling project in our store in 2010.
As of the end of 2015 at fiscal, 145 of our stores used recycling tanks to collect rainwater and condensate from the roof of the HVAC unit and garden center, which in turn became accustomed to watering plants in the garden center outside US.
We estimate that the amount of water we save every year from these units is about 500,000 gallons per store, saving a total of more than 68 million gallons of water in fiscal2015.
Our commitment to the sustainable development of the enterprise has received many environmental awards and recognition.
In 2015, we won three important awards from the United States. S.
Environmental Protection Bureau (\"EPA\").
Energy Star®With our overall excellence in energy efficiency, the department has rated us as \"annual retail partner-continuous excellence\" and we have earned 2015 WaterSense®Our overall excellence in water efficiency continues to be outstanding.
We have also won EPA\'s 6 catalog \"SmartWay Excellence Awards\", which recognize Home Depot as an industry leader in environmental performance and energy efficiency in the freight supply chain.
We also attended CDP (
Carbon Disclosure Project)
CDP is an independent, internationalfor-
Profitable organizations provide enterprises and cities with a global system to measure, disclose, manage and share environmental information.
In 2015, we scored 99 out of 100 points disclosed by CDP, making us one of the highest scoring companies in the index and close to the highest level in our industry.
We were also named industry leader by CDP and got-(
Out of range from a to E)
Reflects high levels of action in climate change mitigation, adaptation and transparency.
We are committed to maintaining a safe shopping and working environment for our customers and colleagues and to protecting the environment of the community in which we do business.
Our environment, health and safety (\"EH&S\")
The functional department is committed to ensuring the health and safety of our customers and employees, as well as trained employees who evaluate, develop, implement and implement policies, processes and plans in the company --wide basis.
Our EH & S policy is integrated into our daily operations and is part of the Home Depot culture.
Some common program elements include: Daily store check list (by department); routine follow-
Audit of our store
Operate site teams based on security team members and regional, regional and store;
Equipment enhancement and preventive maintenance programs that promote physical safety;
Department Sales safety standards;
Provide training and education programs for all employees, and provide different levels of training according to the role and responsibility of employees;
And awareness, communication and recognition programs designed to drive operational awareness and understanding of EH & S issues.
Return the value of shareholders.
As mentioned above, we improve productivity and efficiency through capital allocation decisions, with a focus on cost control.
This discipline promotes a higher return on investment capital and enables us to return value to shareholders through $7.
Shares are bought back at $0, $3.
0 billion in the dividend in fiscal2015, as discussed in Item 7 \"Management\'s Discussion and Analysis of financial status and Operational Results.
In the third quarter of fiscal 2014, we confirmed that our payment data system was broken, which affected customers using payment cards in the United States. S.
Canada store (
\"Data Leakage \").
For a description of matters related to data leakage, see Item 7 of the consolidated financial statements in item 8, \"Management\'s Discussion and Analysis of Financial Position and operational results\" and note 13, \"Financial Statements and supplementary data \". Item1A. Risk Factors.
The risks and uncertainties described below may have a significant adverse effect on our business, financial position and operational results and may result in significant differences in actual results from our expectations and forecasts.
You should read these risk factors in conjunction with the \"Management\'s Discussion and Analysis of Financial Position and operational results\" in Item 7 and the consolidated financial statements and associated notes in Item 8.
We may also not be able to anticipate other factors, or because we currently believe that they are not substantial, they are not described in this report.
These factors may lead to significant differences in results from our expectations.
Intense competition may adversely affect the price and demand of our products and services and may reduce our market share.
We operate in a competitive market.
We compete mainly based on customer service, price, store location and look and the quality, availability and variety of the item.
There are many other home improvement shops, electrical appliances, plumbing and construction materials supply companies and timber mills in every market we serve.
We also compete with professional design stores, showrooms, discount stores, local, regional and national hardware stores, paint stores, mail order companies, warehouse clubs in some product and service areas, independent building supply stores, MRO and other retailers, as well as installers for home improvement products.
In addition, as our customers are increasingly using computers, tablets, we are facing increasingly fierce competition from online and multi-channel retailers, some of these retailers may have a lower cost structure than our smartphones and other mobile devices to shop online and compare prices and products in real time.
Intense competitive pressure from one or more competitors, or we are unable to adapt effectively and quickly to the changing competitive environment, may affect our prices, profits or demand for products and services
If we are not able to respond to these competitive pressures in a timely and appropriate manner, including providing an exceptional customer experience by maintaining customer service and customer relationships, our market share and financial performance may be adversely affected.
We may not be able to identify or respond effectively to the needs, expectations or trends of consumers in a timely manner, which may adversely affect our relationship with our customers, our reputation, our needs for products and services, and our market share.
The success of our business depends to a certain extent on our ability to identify and respond quickly to changing demographic trends;
Consumer preferences, expectations and needs;
Manage the appropriate inventory levels at the same time and maintain a good customer experience.
It is difficult for us to successfully predict the product and service needs of our customers.
With the continuous recovery of the housing and home improvement market, the resulting demand changes will put further pressure on our ability to meet customer needs and expectations and maintain a high level of service.
In addition, each of our major customer groups-DIY, DIFM, and Pro-have different needs and expectations, many of which change as the demographic structure of a particular customer base changes.
If we do not successfully separate the shopping experience area to meet the individual needs and expectations of our customer base, we may lose the market share of these customers.
Customers also have higher expectations about the way they buy and receive products or services.
Customers are increasingly using technology and mobile devices to quickly compare products and prices and determine real prices.
Time for product supply and purchase.
Once a product is purchased, the customer is looking for an alternative to delivering these products and they usually expect to be fast and lowcost delivery.
We must constantly anticipate and adapt to these changes in the procurement process.
We have implemented projects such as BOSS, BOPIS, and direct implementation, and are launching BODFS, however, we cannot guarantee that these or other projects that we may implement can be successfully implemented, or can meet the needs and expectations of customers.
Customers are also using social media to provide feedback and information about our company, products and services in a fast and widespread way.
To some extent, customers have a negative experience and share it through social media, which may affect our brand and reputation.
In addition, we have an aging store base that requires maintenance and space redistribution plans to provide the shopping environment that customers want.
Failure to effectively maintain our store and take advantage of our store space, failure to provide compelling online displays, failure to identify or respond in a timely manner to changing consumer preferences, expectations and home improvement needs, and differentiate the customer experience for our three major customer groups, which may adversely affect our relationship with our customers, our reputation, and the needs of our products and services, and our market share.
Our success depends on our ability to attract, develop and retain highly qualified employees while controlling labor costs.
Our customers expect our employees to provide a high level of customer service and product knowledge.
In order to meet the needs and expectations of our customers, we must attract, develop and retain a large number of high-quality employees while controlling labor costs.
Our ability to control labor costs is affected by many external factors, including current wage rates, health and other insurance costs, as well as legislation or regulations governing labor relations, minimum wages, or medical benefits.
Failure to provide competitive wages and/or benefits in the markets we operate may adversely affect our ability to retain and attract employees.
In addition, we compete with other retail businesses to provide hourly jobs to many of our employees, and we invest a lot of resources to train and motivate them to maintain a high level of job satisfaction.
The historically high turnover rate of these positions may result in an increase in training and retention costs, especially in the context of sustained economic improvement and increased employment opportunities.
We cannot guarantee to attract or retain highly qualified employees in the future.
We have suffered losses related to our data breaches and we are still determining the full impact of the relevant government investigations and civil proceedings on the results of our operations, this can adversely affect our operations, financial results and reputation.
Data breaches involve stealing certain payment card information and customer email addresses through unauthorized access to our system.
Since the data breach, we have recorded a pre-tax fee of $0. 161 billion, deducting the expected insurance recovery rate, as described in more detail in Item 7, \"Management\'s Discussion and Analysis of Financial Position and operating results\" and notes to consolidated financial statements included in Item 8 \"financial statements and supplementary data\" 13.
We face a hypothetical class action in the United States. S.
Combined shareholder derivative lawsuits filed by two so-called shareholders in Canada and the United StatesS.
, Other claims have been and may be made on behalf of the client, the payment card issuing bank, the shareholder or other person seeking damages or other related relief, which are alleged to have been caused by the data breach.
We also face investigations by state and federal agencies.
These claims and investigations may adversely affect the operation of our business, divert management\'s attention to the operation of the business, adversely affect our reputation, resulting in additional costs and fines.
In addition, government agencies investigating data breaches may seek to enforce ban relief, which may significantly increase our data security costs, adversely affect how we operate the system, collect and use customer information, putting us at a competitive disadvantage with other retailers.
If our efforts to maintain the privacy and security of our customers, colleagues, suppliers and company information are not successful, we may incur significant additional costs and reputational damage, further litigation and enforcement may occur.
Like most retailers, our business involves the receipt, storage and transmission of customer personal information, consumer preferences and payment card information, as well as confidential information about our employees, some of our suppliers and our companies are entrusted to third parties.
Third-party service providers and suppliers.
We also work with the third person.
Party service providers and suppliers that provide the technology, systems and services we use when receiving, storing and transmitting this information.
Our information system and our third information system
Third-party service providers and suppliers are vulnerable to the increasing threat of evolving cyber security risks.
Unauthorized parties may attempt to access these systems or our information through fraud or other ways that deceive our colleagues, third-
A third-party service provider or supplier.
Hardware, software or applications that we develop or obtain from third parties may contain design or manufacturing defects or other issues that may accidentally compromise information security.
Methods used to obtain unauthorized access, disable or downgrade services or disrupt systems are also changing and evolving and may be difficult to predict or detect for a long time.
We have implemented and regularly reviewed and updated processes and procedures to prevent unauthorized access to or use of secure data and to prevent data loss.
The threat of continuous development means that we and our third
Third-party service providers and suppliers must constantly evaluate and adapt our respective systems and processes, and there is no guarantee that they are sufficient to prevent all data from being compromised or abused securely.
Any significant compromise or disruption to our data security in the future, whether external or internal, or abuse of customer, colleague, supplier or company data, can all result in additional significant costs, sales losses, litigation, damage to our reputation.
In addition, as regulatory environments related to information security, data collection and use, and privacy become more stringent, the requirements applicable to our business are constantly changing, and compliance with these requirements may also result in additional costs.
We have to pay-
The associated risks may increase our operating costs, expose us to fraud or theft, place us under potential responsibility and have the potential to disrupt our business.
We accept payments in a variety of ways, including cash, checks, credit and debit cards, PayPal, our private label credit cards and installment loan plans, and gift cards, over time, we may offer new payment options.
Accepting these payment options will enable us to comply with rules, regulations, contractual obligations and compliance requirements, including payment network rules and operational guidelines, data security standards and certification requirements, and electronic fund transfer rules.
These requirements may change or be re-interpreted over time, which makes compliance more difficult or expensive.
For certain payment methods, including credit and debit cards, we pay for exchanges and other fees that may increase over time and increase our operating costs.
We rely on third parties to provide payment processing services, including processing of credit cards, debit cards and other forms of electronic payment.
If these companies are unable to provide these services to us, or if their systems are compromised, it can undermine our business.
The payment methods we provide also expose us to potential fraud and theft by criminals, who are becoming more and more complex, as reflected in our recent data breaches, attempts to obtain unauthorized access to or take advantage of the weaknesses that may exist in the payment system.
If we fail to comply with the applicable rules or requirements of the payment method we accept, or if payment-
Due to the disclosure or misuse of the data and the disclosure of the relevant data, we may be responsible for the fees incurred by the payment card issuing bank and other third parties, or subject to fines and higher transaction fees, or our ability to accept or promote certain types of payments may be compromised.
In addition, our customers may lose confidence in certain payment types, which may lead to a shift to other payment types, or our payment system may change, resulting in higher costs.
As a result, our business and operational results may be adversely affected.
The uncertainty of the housing market, economic conditions and other factors beyond our control may adversely affect our product and service needs, operating costs and financial performance.
Our financial performance depends to a large extent on the stability of the housing, residential construction and home improvement market, as well as the general economic situation, including changes in gross domestic product.
Adverse conditions or uncertainties in these markets or economies may adversely affect the confidence or financial situation of our customers, resulting in their decision not to purchase home improvement products and services, or late purchase or payment of these products and services.
Other factors beyond our control, including high unemployment and foreclosure;
Interest rate fluctuations;
Fuel and other energy costs;
Labor and medical costs;
Availability of financing;
Credit market conditions including mortgage loans, housing equity loans and consumer credit; weather;
Natural disasters and other conditions tables beyond our control may further affect the demand for our products and services, our operating costs and our financial performance.
Failure of critical information technology systems or processes may adversely affect our business.
We rely extensively on information technology systems, some of which are managed or provided by third parties.
Analyze, process, store, manage and protect transactions and data.
When managing our business, we also rely heavily on the integrity, security, and consistent access of this data.
In order for these systems and processes to run effectively, we or our service providers must maintain and update them on a regular basis.
Our system and the third
The political party system on which we rely will be damaged or interrupted by multiple causes, including power outages;
Computer and telecom failures;
Security vulnerability; cyber-attacks;
Catastrophic events such as fires, floods, earthquakes, tornadoes or hurricanes;
Acts of war or terrorism;
And errors in the design or use of our colleagues, contractors or third parties
Third-party service providers.
Although we and our third
Third-party service providers seek to effectively maintain our respective systems and successfully address the risk that the integrity, security and consistency operations of these systems are compromised and we may not be successful.
Therefore, we or our service providers may encounter errors, interruptions, delays, or service interruptions in critical parts of our information technology infrastructure, which may seriously interfere with our operations, cost time and resources
Interruption of our customers
Facing a technology system can compromise our interconnected retail strategy and bring a negative customer experience.
With our information technology development, we are able to provide a better overall shopping and multi-channel experience, enabling our customers to shop and interact with us from computers, tablets, smartphones and other mobile devices
We use our website as both a sales channel for our products and a way to provide our customers with products, projects and other relevant information to drive
Shop and online sales.
We have multiple online communities and knowledge centers that allow us to inform, help and interact with our customers.
As multi-channel retail continues to grow, we must respond effectively to changing customer expectations and new developments.
For example, in order to improve our special order process, we are currently launching our new customer order management system COM, which our customers can access online, we are constantly looking to improve all of our online attributes to provide an attractive user-
Provide a friendly interface for our customers.
Interruptions, failures or other performance issues for these customers-
Facing a technical system can compromise the benefits they provide for our online and online
Influence our relationship with our customers.
If we fail to identify and develop a relationship with a sufficient number of qualified suppliers, or if our suppliers encounter financial difficulties or other challenges, our ability to access products that meet our high quality standards in a timely and effective manner may be adversely affected.
We buy our products from suppliers around the world.
We are able to continue to identify and develop relationships with qualified suppliers who are able to meet our high standards of quality and responsible procurement and our need to obtain products in a timely and effective manner, it is a major challenge.
Our ability to obtain products from suppliers can be adversely affected by political instability, military conflict, financial instability of suppliers (
Especially considering the continuing economic difficulties in all regions of the world)
Suppliers do not comply with applicable laws, trade restrictions, tariffs, currency exchange rates, any disruption to supplier logistics or supply chain networks, and other factors beyond our or our supplier\'s control.
Disruption in our supply chain and other factors that affect the distribution of goods may adversely affect our business.
Disruption of our logistics or supply chain network may adversely affect our ability to deliver our inventory in a timely manner, which may compromise our ability to meet customer product needs and lead to loss of sales, increase supply chain costs or damage our reputation.
This interruption may be caused by damage or damage to our distribution center; weather-related events;
Trade restrictions; tariffs; third-
Party strike, lock
Stop work, stop work or stop work;
Interruption or cost of supply or transportation;
Or other factors beyond our control.
Any such interference may have a negative impact on our financial performance or financial situation.
The implementation of our supply chain and technology initiatives may undermine our operations in the short term, which may not bring the expected benefits or fail.
We have and plan to continue to invest heavily in supply chain and technology.
These programs, such as Project Sync and COM, are designed to simplify our operations and enable our employees to continue to provide 10 Heights
To provide customers with quality services, while simplifying customer interaction, to provide customers with a more interconnected retail experience.
Costs, potential issues and disruptions related to the implementation of these initiatives, including issues and disruptions related to the management of the third initiative
Third-party service providers and the use of new networks
Based on tools and services, we may interrupt or reduce our operational efficiency in the short term and cause product availability problems.
In addition, our improved supply chain and new or upgraded technologies may not be able to provide the expected benefits, and it may take longer than expected to achieve the expected benefits, or these initiatives may fail completely, all of these can adversely affect our competitive position, our financial position, our operating results, or our cash flow.
If we are unable to effectively manage and expand our alliances and relationships with selected suppliers of brands and proprietary products, we may not be able to effectively implement our strategy to differentiate ourselves from our competitors.
As part of our focus on product difference, we have formed strategic alliances and exclusive relationships with selected suppliers to sell products in a variety of good environments
We have also established relationships with selected suppliers, enabling us to sell proprietary products that are comparable to national brands.
Our proprietary products make us different from other retailers, usually have higher profit margins than national brand products, and account for a growing proportion of our business.
If we are unable to manage and expand these alliances and relationships and identify alternative sources for comparable brands and proprietary products, we may not be able to effectively perform product differentiate, this may affect our sales and gross margin.
Our proprietary products pose certain risks to us.
As we expand our proprietary products, we may face greater risks as we play a greater role in the design, manufacturing, marketing and sales of these products.
These risks include greater responsibility to manage and comply with applicable regulatory requirements, increased potential product liability and product recall risks, and increased potential reputational risks associated with responsible procurement of these products.
In order to effectively implement our product differentiated strategy, we must also be able to successfully protect our proprietary rights and successfully navigate and avoid claims related to proprietary rights of third parties.
In addition, the increase in sales of our proprietary products may adversely affect the sales of our supplier\'s products, which in turn may adversely affect our relationship with certain suppliers.
If part or all of these risks cannot be properly addressed, it will damage our reputation and adversely affect our business, operational results and financial position.
We may fail in implementing our growth strategy, including integrating Interline to expand our business with professional customers and MRO markets, this may adversely affect our financial position and operational results.
In fiscal 2015, we completed the acquisition of Interline, which we believe will increase our ability to serve our professional customers and increase our share in the MRO market.
Our goal is to serve all of our different professional customer groups through an integrated approach to drive growth and capture market share in the retail, service and MRO markets, this successful integration of Interline.
As with any acquisition, we need to successfully integrate the products, services, partners and systems of the target company into our business operations.
Integration can be a complicated time-
If the integration is not fully successful or is delayed for a long time, we may not be able to achieve the expected synergies or benefits of the acquisition.
Failure to fully realize the expected synergies or benefits of cross-line acquisitions may adversely affect our financial position or operational results.
In addition, even if Interline is successfully integrated, the acquisition may not be able to advance our business strategy as expected, leaving us facing more fierce competition or challenges in terms of products or services, and make us face additional liabilities related to the Interline business.
If we are unable to effectively manage our installation services business, we may suffer a loss of sales and be subject to fines, litigation and reputation damage.
We, as general cont