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The April 2005 share repurchase program, which became quarter. Effective with the quarterly cash dividend paid in
effective on April 27, 2005, terminated and replaced a the third quarter of fiscal 2007, we increased our quarterly
$500 million share repurchase program authorized by our cash dividend per share by 25% to $0.10 per share per
Board in June 2004. quarter. Effective with the quarterly cash dividend paid in
the third quarter of fiscal 2008, we increased our quarterly
In accordance with our June 2007 share repurchase cash dividend per share by 30% to $0.13 per share per
program, on June 26, 2007, we entered into an quarter. The payment of cash dividends is subject to
ASR program authorized by the Board. The ASR program customary legal and contractual restrictions. During fiscal
consisted of two agreements to purchase shares of our 2008, we made four dividend payments totaling $0.46
common stock from Goldman for an aggregate purchase per share, or $204 million in the aggregate.
price of $3.0 billion. The ASR program concluded in
February 2008. Total aggregate shares repurchased under During fiscal 2008, we spent a total of $3.7 billion for
the ASR program were 65.8 million shares at an average share repurchases and dividend payments.
purchase price of $45.59 per share.
Other Financial Measures
At the end of fiscal 2008, $2.5 billion of the $5.5 billion
authorized by our Board was available for future share Our debt-to-capitalization ratio, which represents the ratio
repurchases under the June 2007 share repurchase of total debt, including the current portion of long-term
program. debt, to total capitalization (total debt plus total
shareholders’ equity), increased to 15% at the end of fiscal
During fiscal 2007, we purchased and retired 5.6 million 2008, compared with 9% at the end of fiscal 2007. The
shares at a cost of $267 million under the June 2006 increase was due primarily to the impact of our share
share repurchase program, and 6.2 million shares at a repurchases, which increased debt and decreased
cost of $332 million under the April 2005 share shareholders’ equity. We view our debt-to-capitalization
repurchase program. ratio as an important indicator of our creditworthiness.
During fiscal 2006, we purchased and retired 16.5 million Our adjusted debt-to-capitalization ratio, including
shares at a cost of $711 million under the April 2005 capitalized operating lease obligations (rental expense for
share repurchase program, and 1.8 million shares at a all operating leases multiplied by eight), was 60% at the
cost of $61 million under the June 2004 share repurchase end of fiscal 2008, compared with 49% at the end of
program. fiscal 2007.
We consider several factors in determining when to make Our adjusted debt-to-capitalization ratio, including
share repurchases including, among other things, our cash capitalized operating lease obligations, is considered a
needs and the market price of our stock. We expect that non-GAAP financial measure and is not in accordance
cash provided by future operating activities, as well as with, or preferable to, the ratio determined in accordance
available cash and cash equivalents and short-term with GAAP. However, we have included this information as
investments, will be the sources of funding for our share we believe that our adjusted debt-to-capitalization ratio,
repurchase program. Based on the anticipated amounts to including capitalized operating lease obligations, is
be generated from those sources of funds in relation to the important for understanding our operations and provides
remaining authorization approved by our Board under the meaningful additional information about our ability to
June 2007 share repurchase program, we do not expect service our long-term debt and other fixed obligations, and
that future share repurchases will have a material impact to fund our future growth. In addition, we believe our
on our short-term or long-term liquidity. adjusted debt-to-capitalization ratio, including capitalized
operating lease obligations, is relevant because it enables
In fiscal 2004, our Board initiated the payment of a investors to compare our indebtedness to retailers who
regular quarterly cash dividend on our common stock. A own, rather than lease, their stores. Our decision to own
quarterly cash dividend has been paid in each subsequent or lease real estate is based on an assessment of our
quarter. Effective with the quarterly cash dividend paid in financial liquidity, our capital structure, our desire to own
the third quarter of fiscal 2006, we increased our quarterly or to lease the location, the owner’s desire to own or to
cash dividend per share by 9%, to $0.08 per share per
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