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Success Factors

Historical Track Record of Reinvesting in Our Business, Returning Value to Shareholders

We take a prudent approach to our capital structure to support the business and the long-term success of the Company. Historically, our strong financial returns and cash generation allowed us to simultaneously invest in the growth of the business and return cash to shareholders. Our “A” S&P Global rating is one of the strongest in retail, and we are committed to maintaining a strong rating. We believe this is an important metric for our vendors, landlords, and other business associates.

In 2019, we continued our investments in new stores, store remodels, and our offices and distribution centers to support our growth plans. We generated $4.1 billion in cash from operations and returned a total of $2.6 billion to shareholders through our share repurchase and dividend programs.

In March 2020, as a result of the COVID-19 pandemic, we announced prudent steps we are taking to strengthen our financial flexibility and liquidity given the uncertain environment, including reducing our capital expenditures and operating expenses. We also suspended our share repurchase program. Further, we announced our intent to not declare a dividend for the first quarter of fiscal 2021. While we will continue to evaluate our dividend program in the near term, we remain committed to paying dividends whenever the environment normalizes for the long term, as we have been for decades. It is important to underscore that our Company has a decades-long history of financial strength and has historically taken a conservative financial approach. We ended Fiscal 20 in a very strong financial position and we view these recent actions as prudent and proactive given the impact of the COVID-19 pandemic on the current environment.

Updated April 2020