Best Buy 2016 Annual Report Download - page 5

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Squad Academies, all in an effort to expose underprivileged teens to the career
opportunities that technology offers.
2. Returning Capital to Shareholders
In FY16, we returned $1.5 billion to our shareholders. This number included $1 billion in
share repurchases, originally planned to be completed over three years. We also
increased our dividend and gave shareholders a one-time dividend payment associated
with a favorable legal settlement.
As we laid out in our Q4 FY16 earnings call, our long-term capital allocation strategy is
first to fund operations and investments in growth, including potential acquistions, and
then to return excess free cash flow over time to shareholders through dividends and
share repurchases. Our intent is to be a premium dividend payer and to regularly
repurchase shares every year that, at a minimum, offset dilution from equity-based
awards. We intend to do this all while maintaining investment-grade credit metrics.
In line with this strategy, our FY17 return-of-capital plan includes: 1) a 22% increase in the
regular quarterly dividend, to $0.28 per share; 2) a two-year, $1 billion share repurchase
program and; 3) a special dividend of $0.45 per share.
3. A Look Ahead at Our Growth Strategy and FY17 Priorities
As pleased as we are with our performance, we are even more excited about what lies
ahead. We have entered the next phase of our transformation, and our purpose is clear:
help customers learn about and enjoy the latest technology as they pursue their passions
or take care of what is important to them in their life, whether it is the desire to be
entertained, communicate easily, work efficiently, prepare food, or clean, protect,
monitor, or automate their home.
With this purpose in mind, we are on a mission to constantly innovate to improve the
experience of our customers and determined to find ways to accelerate the growth of our
business.
In this context, we are pursuing the following priorities in FY17:
1) Build on our strong industry position and multi-channel capabilities to move the
existing business forward
2) Create greater efficiency and reduce waste throughout the business
3) Advance key growth initiatives
In pursuing our first priority continuing to move the existing business forward we
are implementing a number of initiatives across merchandising, marketing, digital, stores,
services and supply chain.