The ratings on Home Depot Inc. reflect the company's sizable position in the still-fragmented home improvement industry, intermediate financial profile, and considerable cash flow generation. These factors are partly offset by the high exposure that the U.S. home improvement retail industry has to weak economic conditions and the cyclical domestic housing industry, which has weakened operating performance over the past three years. Home Depot, which pioneered the full-service, warehouse-style format in the 1970s, has a leading market position in home improvement retail. The company has an annual revenue base in excess of $70 billion, and is meaningfully larger than its nearest competitor, Lowe's Cos. Inc., which has a revenue base of about $47 billion. At Aug. 2, 2009, Atlanta-based Home
