THE HOME DEPOT Asset Protection Group. Shawn B. Blankenship Vice President Asset Protection April 30, 2015

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1 THE HOME DEPOT Asset Protection Group Shawn B. Blankenship Vice President Asset Protection April 30, 2015

2 2 Company Culture

3 US Retail Store Location / Stats The Home Depot is the world's largest home improvement specialty retailer, with more than 2,200 retail stores in the United States (including Puerto Rico, the U.S. Virgin Islands and the territory of Guam), Canada and Mexico. 3 Company Facts 1,980 US stores ~400K US store associates 3 divisions 19 regions 209 districts 181 stores in Canada 111 stores in Mexico

4 Our Vision: To Enhance and Protect The Home Depot brand Our Mission: To support sales and service and maximize profit through simplification and innovation of Asset Protection processes. 4

5 The Home Depot AP Organization Vice President Asset Protection Director AP Field Director Loss Prevention Director Environmental Health & Safety Director AP Supply Chain Field Team: 202 Multi APMs 223 Single Store APMs 1,067 APSs 21 - Home Depot Investigations SSC Support Team: 58 associates supporting Asset Protection 5

6 2015 Loss Prevention Strategy AP Operations: Drive Accuracy and Profitability Partnership with Store Operations Returns Fraud Mitigation Process Improvement Field Support AP Merchandising: Simplified, Best in Class MPS MPS Innovation Benefit Denial MPS Playbook Pick Ticket Standardization AP Forensics: Proactive Approach to Accuracy Upstream Focus Rollout Integration Transaction Testing

7 2015 Field Asset Protection Strategy Investigation Speed: Push Complexity Upstream Leverage learning resources Implement Case Management System Improve Alert Cost/Benefit and Conduct Focused Investigations Asset Management: Capital & Expense Leverage Leverage IT partnerships Manage Assets to Store Level Deploy Capital Based on ROI ORC: Best in Class Investigation Execution Focus on speed of case closure Leverage Network Analytics Leverage ORCA/LE relationships Run the Business: Simplify Field Reporting 7 Reduce Metrics to the Critical Few Deploy Mobile Reporting Streamline Pull Reporting

8 Internal Investigation Tools Covert Cameras Partnered with AP Field and HDI/CIT on design Co-developed design with camera manufacturer Spec d a design for HD racking Reduced size and weight of covert kit Internal Investigations 16 Pending Investigations with coverts currently installed 6 Investigations closed YTD for $100k in value

9 Executive Summary: Operation Ackerman Case Value : $ 693,206 Location: Midwest Method Of Theft: Merchandise Thefts/Refunds Detection Method: AP Field Tip Exposure Period: 2 years Investigation Life Cycle: 1 year 4 months AP Team: HDI Team Detroit (Jeremy Greenleaf), APM Rob Lancioni, APM Jason Megge APS Adam Green, APS Jason Wegman, APS Scott Manely, APS Matt Olarin LE Partnerships: Oakland County Sheriff s Office / Utica Police Department Arrest and Charges: 14 arrests and facing charges of Continuing Criminal Enterprise (20 Year Felony), Organized Retail Crime (5 Year Felony) and Financial Transaction Device Fraud (4 Year Felony). Synopsis and Investigative Steps: AP team reported to HDI about a subject that daily dropped off homeless individuals to conduct non-receipted refunds. Store AP obtained the license plate of their vehicle - HDI was able to positively ID the subjects with this intelligence HDI conducted mobile surveillance on the suspect multiple times with LE. LE successfully introduced a Confidential Informant to Ackerman to complete non-receipted refunds. The suspects recruited over 1000 homeless individuals to conduct retail fraud and or non-receipted refunds. HDI and LE conducted several interviews on suspects apprehended by AP that stated Ackerman paid $10.00 for refunds and 20% for thefts up to $ a day Recruiting Location Communicating w/booster Coordinating the Thefts Typical Product Selection 9 Exposure / Preventable Resolution Exposure: Associate awareness of High Theft Merchandise Opportunity with Theft Trend Dashboards Resolution: Associate awareness of customer service in high theft areas Emphasis on detailed and more frequent review of Theft Trend Dashboard Reports Refund Impact - Top 5 Stores STORE $ LOSS 2701 $230, $193, $27, $20, $11,123