Continued expense
discipline drove a 310 basis point improvement in
SG&A;
Adjusted EBITDA improved $95 million to $134
million for the quarter
PLANO, Texas -
(August 14, 2015) - J. C. Penney Company, Inc. (NYSE: JCP)
today announced financial results for its second quarter ended
August 1, 2015. The Company reported net sales of $2.88
billion compared to $2.80 billion in the second quarter of 2014.
Same store sales increased 4.1 % for the period.
Marvin Ellison, chief executive officer said, "We
are pleased to report another quarter of improved performance
thanks to the commitment and diligence of the JCPenney team.
Although we have significant work to do as a company to regain our
status as a world-class retailer, I am pleased with the resilience
and the efforts of our associates. I also remain confident in
our ability to achieve the long-term financial targets we have laid
out."
For the quarter, Men's, Home,
Sephora and Fine Jewelry were the Company's top performing
merchandise divisions. In particular, Sephora continued its strong
performance this quarter with a double digit increase in comparable
store sales. Geographically, all regions experienced sales growth
when compared to the same period last year with the best
performance in the western and central regions of the country.
For the second quarter, gross
margin improved 100 basis points to 37.0 % of sales, driven by
improvements in our clearance and promotional selling margins.
SG&A expenses for the quarter
were down $63 million to $901 million or 31.3 % of sales,
representing a 310 basis point improvement from last year. These
savings were primarily driven by lower store controllable costs,
advertising and improved private label credit card revenue.
Operating income for the quarter
improved 46 % over last year to a loss of $38 million. EBITDA
improved by $25 million to $115 million. On an adjusted basis,
EBITDA improved by $95 million to $134 million. In the second
quarter, the Company showed a 20 % improvement in net income over
the prior year to a loss of $138 million or $(0.45) per share.
2015 Full-Year Outlook
The Company improved its SG&A and EBITDA
guidance and reiterated its remaining 2015 full-year guidance as
follows:
-
Comparable store sales: expected to increase 4
percent to 5 percent;
-
Gross margin: expected to improve 100 to 150
basis points;
-
SG&A: expected to decrease approximately
$120 million (compared to the previous expectation of a $100
million decrease);
-
EBITDA: approximately $620 million (compared to
the previous expectation of $600 million);
-
Primary pension plan expense: approximately $19
million;
-
Depreciation and amortization: approximately
$615 million;
-
Interest expense: approximately $415
million
-
Capital Expenditures: $250 to $300 million;
and
-
Free cash flow: expected to be breakeven.
Second Quarter
2015 Earnings Conference Call Details
At 8:30 a.m. ET today, the Company
will host a live conference call conducted by Chief Executive
Officer Marvin Ellison and Chief Financial Officer Ed Record.
They will discuss the Company's performance during the
quarter and take questions from participants.
To access the conference call,
please dial (866) 515-2911, or (617) 399-5125 for international
callers, and reference 35024104 participant code or visit the
Company's investor relations website at http://ir.jcpenney.com.
Supplemental slides will be available on the Company's investor
relations website approximately 10 minutes before the start of the
conference call.
Telephone playback will be
available approximately two hours after the conclusion of the
meeting by dialing (888) 286-8010, or (617) 801-6888 for
international callers and referencing 78480906 participant
code.
Investors and others should note
that we currently announce material information using SEC filings,
press releases, public conference calls and webcasts. In the
future, we will continue to use these channels to distribute
material information about the Company and may also utilize our
website and/or various social media to communicate important
information about the Company, key personnel, new brands and
services, trends, new marketing campaigns, corporate initiatives
and other matters. Information that we post on our website or
on social media channels could be deemed material; therefore, we
encourage investors, the media, our customers, business partners
and others interested in our Company to review the information we
post on our website as well as the following social media
channels:
Facebook
(https://www.facebook.com/jcp) and Twitter
(https://twitter.com/jcpnews).
Any updates to the list of social
media channels we may use to communicate material information will
be posted on the Investor Relations page of the Company's website
at www.jcpenney.com
Media
Relations:
(972) 431-3400 or jcpnews@jcp.com
Investor Relations:
(972) 431-5500 or jcpinvestorrelations@jcpenney.com
About JCPenney:
J. C. Penney Company, Inc. (NYSE: JCP), one of the nation's largest
apparel and home furnishing retailers, is dedicated to fitting the
diversity of America with unparalleled style, quality and value.
Across approximately 1,020 stores and at jcpenney.com, customers
will discover a broad assortment of national, private and exclusive
brands to fit all shapes, sizes, occasions and budgets. For
more information, please visit jcpenney.com.
Forward-Looking
Statements
This release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "expect" and similar expressions identify
forward-looking statements, which include, but are not limited to,
statements regarding sales, gross margin, selling, general and
administrative expenses, and cash flows. Forward-looking
statements are based only on the Company's current assumptions and
views of future events and financial performance. They are subject
to known and unknown risks and uncertainties, many of which are
outside of the Company's control that may cause the Company's
actual results to be materially different from planned or expected
results. Those risks and uncertainties include, but are not limited
to, general economic conditions, including inflation, recession,
unemployment levels, consumer confidence and spending patterns,
credit availability and debt levels, changes in store traffic
trends, the cost of goods, more stringent or costly payment terms
and/or the decision by a significant number of vendors not to sell
us merchandise on a timely basis or at all, trade restrictions, the
ability to monetize non-core assets on acceptable terms, the
ability to implement our strategic plan, customer acceptance of our
strategies, our ability to attract, motivate and retain key
executives and other associates, the impact of cost reduction
initiatives, our ability to generate or maintain liquidity,
implementation of new systems and platforms, changes in tariff,
freight and shipping rates, changes in the cost of fuel and other
energy and transportation costs, disruptions and congestion at
ports through which we import goods, increases in wage and benefit
costs, competition and retail industry consolidations, interest
rate fluctuations, dollar and other currency valuations, the impact
of weather conditions, risks associated with war, an act of
terrorism or pandemic, the ability of the federal government to
fund and conduct its operations, a systems failure and/or security
breach that results in the theft, transfer or unauthorized
disclosure of customer, employee or Company information, legal and
regulatory proceedings and the Company's ability to access the debt
or equity markets on favorable terms or at all. There can be
no assurances that the Company will achieve expected results, and
actual results may be materially less than expectations.
Please refer to the Company's most recent Form 10-Q for a
further discussion of risks and uncertainties. Investors should
take such risks into account and should not rely on forward-looking
statements when making investment decisions. Any forward-looking
statement made by us in this press release is based only on
information currently available to us and speaks only as of the
date on which it is made. We do not undertake to update these
forward-looking statements as of any future date.
###
J. C. PENNEY
COMPANY, INC.
SUMMARY OF OPERATING RESULTS
(Unaudited)
(Amounts in millions except per share data)
|
Three Months Ended |
|
Six Months Ended |
|
Statements of Operations: |
August 1, 2015 |
|
August 2, 2014 |
|
% Inc. (Dec.) |
|
August 1, 2015 |
|
August 2, 2014 |
|
% Inc. (Dec.) |
|
Total
net sales |
$ |
2,875 |
|
|
$ |
2,799 |
|
|
2.7 |
% |
|
$ |
5,732 |
|
|
$ |
5,600 |
|
|
2.4 |
% |
|
Cost
of goods sold |
1,810 |
|
|
1,791 |
|
|
1.1 |
% |
|
3,626 |
|
|
3,666 |
|
|
(1.1 |
)% |
|
Gross
margin |
1,065 |
|
|
1,008 |
|
|
5.7 |
% |
|
2,106 |
|
|
1,934 |
|
|
8.9 |
% |
|
Operating expenses/(income): |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (SG&A) |
901 |
|
|
964 |
|
|
(6.5 |
)% |
|
1,866 |
|
|
1,973 |
|
|
(5.4 |
)% |
|
Pension |
13 |
|
|
2 |
|
|
100.0 |
% |
+ |
23 |
|
|
3 |
|
|
100.0 |
% |
+ |
Depreciation and amortization |
153 |
|
|
160 |
|
|
(4.4 |
)% |
|
307 |
|
|
318 |
|
|
(3.5 |
)% |
|
Real
estate and other, net |
19 |
|
|
(53 |
) |
|
(100.0 |
)% |
+ |
(16 |
) |
|
(70 |
) |
|
(77.1 |
)% |
|
Restructuring and management transition |
17 |
|
|
5 |
|
|
100.0 |
% |
+ |
39 |
|
|
27 |
|
|
44.4 |
% |
|
Total
operating expenses |
1,103 |
|
|
1,078 |
|
|
2.3 |
% |
|
2,219 |
|
|
2,251 |
|
|
(1.4 |
)% |
|
Operating income/(loss) |
(38 |
) |
|
(70 |
) |
|
(45.7 |
)% |
|
(113 |
) |
|
(317 |
) |
|
(64.4 |
)% |
|
Net
interest expense |
103 |
|
|
106 |
|
|
(2.8 |
)% |
|
201 |
|
|
203 |
|
|
(1.0 |
)% |
|
Income/(loss) before income taxes |
(141 |
) |
|
(176 |
) |
|
(19.9 |
)% |
|
(314 |
) |
|
(520 |
) |
|
(39.6 |
)% |
|
Income
tax expense/(benefit)(1) |
(3 |
) |
|
(4 |
) |
|
(25.0 |
)% |
|
(9 |
) |
|
4 |
|
|
100.0 |
% |
+ |
Net
income/(loss) |
$ |
(138 |
) |
|
$ |
(172 |
) |
|
(19.8 |
)% |
|
$ |
(305 |
) |
|
$ |
(524 |
) |
|
(41.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per share - basic and diluted |
$ |
(0.45 |
) |
|
$ |
(0.56 |
) |
|
(19.6 |
)% |
|
$ |
(1.00 |
) |
|
$ |
(1.72 |
) |
|
(41.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Data: |
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales increase/(decrease)(2) |
4.1 |
% |
|
6.0 |
% |
|
|
|
3.7 |
% |
|
6.6 |
% |
|
|
|
Ratios
as a percentage of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin |
37.0 |
% |
|
36.0 |
% |
|
|
|
36.7 |
% |
|
34.5 |
% |
|
|
|
SG&A expenses |
31.3 |
% |
|
34.4 |
% |
|
|
|
32.6 |
% |
|
35.2 |
% |
|
|
|
Total
operating expenses |
38.4 |
% |
|
38.5 |
% |
|
|
|
38.7 |
% |
|
40.2 |
% |
|
|
|
Operating income/(loss) |
(1.3 |
)% |
|
(2.5 |
)% |
|
|
|
(2.0 |
)% |
|
(5.7 |
)% |
|
|
|
Effective income tax rate(1) |
(2.1 |
)% |
|
(2.3 |
)% |
|
|
|
(2.9 |
)% |
|
0.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Data: |
|
|
|
|
|
|
|
|
|
|
|
|
Issued
and outstanding shares at end of period |
305.5 |
|
|
304.8 |
|
|
|
|
305.5 |
|
|
304.8 |
|
|
|
|
Weighted average shares - basic |
305.9 |
|
|
305.2 |
|
|
|
|
305.7 |
|
|
305.1 |
|
|
|
|
Weighted average shares - diluted |
305.9 |
|
|
305.2 |
|
|
|
|
305.7 |
|
|
305.1 |
|
|
|
|
-
For the three and six months
ended August 1, 2015, the Company increased its net valuation
allowance by $46 million and $90 million, respectively, against
certain federal and state net operating loss carry forward
assets. For the three and six months ended August 2, 2014,
the Company increased its net valuation allowance by $28 million
and $148 million, respectively, against certain federal and state
net operating loss carry forward assets.
-
Comparable store sales include
sales from all stores, including sales from services and
commissions earned from our in-store licensed departments, that
have been open for 12 consecutive full fiscal months and Internet
sales through jcp.com. Stores closed for an extended period are not
included in comparable store sales calculations, while stores
remodeled and minor expansions not requiring store closure remain
in the calculations. Certain items, such as sales return estimates
and store liquidation sales, are excluded from the Company's
calculation.
SUMMARY BALANCE
SHEETS
(Unaudited)
(Amounts in millions)
Summary Balance Sheets: |
August 1, 2015 |
|
August 2, 2014 |
Current assets: |
|
|
|
Cash
in banks and in transit |
$ |
178 |
|
|
$ |
189 |
|
Cash
short-term investments |
795 |
|
|
847 |
|
Cash
and cash equivalents |
973 |
|
|
1,036 |
|
Merchandise inventory |
3,005 |
|
|
2,848 |
|
Deferred taxes |
184 |
|
|
182 |
|
Prepaid expenses and other |
200 |
|
|
207 |
|
Total
current assets |
4,362 |
|
|
4,273 |
|
Property and equipment, net |
4,989 |
|
|
5,415 |
|
Prepaid pension |
266 |
|
|
701 |
|
Other
assets |
615 |
|
|
627 |
|
Total assets |
$ |
10,232 |
|
|
$ |
11,016 |
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
Current liabilities: |
|
|
|
Merchandise accounts payable |
$ |
1,122 |
|
|
$ |
984 |
|
Other
accounts payable and accrued expenses |
1,170 |
|
|
1,094 |
|
Current maturities of capital leases and note payable |
27 |
|
|
30 |
|
Current maturities of long-term debt |
28 |
|
|
28 |
|
Total
current liabilities |
2,347 |
|
|
2,136 |
|
Long-term capital leases and note payable |
18 |
|
|
44 |
|
Long-term debt |
5,225 |
|
|
5,227 |
|
Deferred taxes |
378 |
|
|
364 |
|
Other
liabilities |
604 |
|
|
645 |
|
Total liabilities |
8,572 |
|
|
8,416 |
|
Stockholders' equity |
1,660 |
|
|
2,600 |
|
Total liabilities and stockholders'
equity |
$ |
10,232 |
|
|
$ |
11,016 |
|
SUMMARY STATEMENTS
OF CASH FLOWS
(Unaudited)
(Amounts in millions)
|
Three Months Ended |
|
Six Months Ended |
Statements of Cash Flows: |
August 1, 2015 |
|
August 2, 2014 |
|
August 1, 2015 |
|
August 2, 2014 |
Cash
flows from operating activities: |
|
|
|
|
|
|
|
Net income/(loss) |
$ |
(138 |
) |
|
$ |
(172 |
) |
|
$ |
(305 |
) |
|
$ |
(524 |
) |
Adjustments to reconcile net income/(loss) to net cash provided
by/(used in) operating activities: |
|
|
|
|
|
|
|
Restructuring and management transition |
1 |
|
|
1 |
|
|
4 |
|
|
3 |
|
Asset
impairments and other charges |
1 |
|
|
2 |
|
|
2 |
|
|
4 |
|
Net
gain on sale of non-operating assets |
(6 |
) |
|
(9 |
) |
|
(8 |
) |
|
(21 |
) |
Net
gain on sale of operating assets |
- |
|
|
- |
|
|
(8 |
) |
|
(1 |
) |
Depreciation and amortization |
153 |
|
|
160 |
|
|
307 |
|
|
318 |
|
Benefit plans |
6 |
|
|
(4 |
) |
|
10 |
|
|
(13 |
) |
Stock-based compensation |
11 |
|
|
9 |
|
|
21 |
|
|
16 |
|
Deferred taxes |
(6 |
) |
|
(14 |
) |
|
(17 |
) |
|
(19 |
) |
Change
in cash from: |
|
|
|
|
|
|
|
Inventory |
(194 |
) |
|
(13 |
) |
|
(353 |
) |
|
87 |
|
Prepaid expenses and other assets |
26 |
|
|
8 |
|
|
(11 |
) |
|
(19 |
) |
Merchandise accounts payable |
59 |
|
|
143 |
|
|
125 |
|
|
36 |
|
Current income taxes |
2 |
|
|
(6 |
) |
|
6 |
|
|
4 |
|
Accrued expenses and other |
127 |
|
|
32 |
|
|
43 |
|
|
(5 |
) |
Net
cash provided by/(used in) operating activities |
42 |
|
|
137 |
|
|
(184 |
) |
|
(134 |
) |
Cash
flows from investing activities: |
|
|
|
|
|
|
|
Capital expenditures |
(95 |
) |
|
(61 |
) |
|
(141 |
) |
|
(141 |
) |
Proceeds from sale of non-operating assets |
7 |
|
|
11 |
|
|
13 |
|
|
26 |
|
Proceeds from sale of operating assets |
- |
|
|
- |
|
|
5 |
|
|
2 |
|
Joint
venture return of investment |
- |
|
|
8 |
|
|
- |
|
|
8 |
|
Net
cash provided by/(used in) investing activities |
(88 |
) |
|
(42 |
) |
|
(123 |
) |
|
(105 |
) |
Cash
flows from financing activities: |
|
|
|
|
|
|
|
Payment on short-term borrowings |
- |
|
|
(650 |
) |
|
- |
|
|
(650 |
) |
Net
proceeds from issuance of long-term debt |
- |
|
|
500 |
|
|
- |
|
|
500 |
|
Payments of capital leases and note payable |
(18 |
) |
|
(13 |
) |
|
(23 |
) |
|
(18 |
) |
Payments of long-term debt |
(7 |
) |
|
(6 |
) |
|
(13 |
) |
|
(11 |
) |
Financing costs |
- |
|
|
(60 |
) |
|
- |
|
|
(60 |
) |
Other
changes in stockholders' equity |
- |
|
|
- |
|
|
(2 |
) |
|
(1 |
) |
Net
cash provided by/(used in) financing activities |
(25 |
) |
|
(229 |
) |
|
(38 |
) |
|
(240 |
) |
Net
increase/(decrease) in cash and cash equivalents |
(71 |
) |
|
(134 |
) |
|
(345 |
) |
|
(479 |
) |
Cash
and cash equivalents at beginning of period |
1,044 |
|
|
1,170 |
|
|
1,318 |
|
|
1,515 |
|
Cash
and cash equivalents at end of period |
$ |
973 |
|
|
$ |
1,036 |
|
|
$ |
973 |
|
|
$ |
1,036 |
|
Reconciliation of
Non-GAAP Financial Measures
(Unaudited)
(Amounts in millions except per share data)
We report our financial information in accordance
with generally accepted accounting principles in the United States
(GAAP). However, we present certain financial measures and
ratios identified as non-GAAP under the rules of the Securities and
Exchange Commission (SEC) to assess our results. We believe
the presentation of these non-GAAP financial measures and ratios is
useful in order to better understand our financial performance as
well as to facilitate the comparison of our results to the results
of our peer companies. In addition, management uses these
non-GAAP financial measures and ratios to assess the results of our
operations. It is important to view non-GAAP financial
measures in addition to, rather than as a substitute for, those
measures and ratios prepared in accordance with GAAP. We have
provided reconciliations of the most directly comparable GAAP
measures to our non-GAAP financial measures presented.
The following non-GAAP financial measures are
adjusted to exclude restructuring and management transition
charges, the impact of our qualified defined benefit pension plan
(Primary Pension Plan), the net gain on the sale of non-operating
assets, the proportional share of net income from our joint venture
formed to develop the excess property adjacent to our home office
facility in Plano, Texas (Home Office Land Joint Venture) and the
tax impact for the allocation of income taxes to other
comprehensive income items related to our Primary Pension Plan and
interest rate swaps. Unlike other operating expenses, restructuring
and management transition charges, the net gain on the sale of
non-operating assets, the proportional share of net income from the
Home Office Land Joint Venture and the tax impact for the
allocation of income taxes to other comprehensive income items
related to our Primary Pension Plan and interest rate swaps are not
directly related to our ongoing core business operations.
Primary Pension Plan expense/(income) is determined using numerous
complex assumptions about changes in pension assets and liabilities
that are subject to factors beyond our control, such as market
volatility. Accordingly, we eliminate our Primary Pension
Plan expense/(income) in its entirety as we view all components of
net periodic benefit expense/(income) as a single, net amount,
consistent with its presentation in our Consolidated Financial
Statements. We believe it is useful for investors to
understand the impact of restructuring and management transition
charges, Primary Pension Plan expense/(income), the net gain on the
sale of non-operating assets, the proportional share of net income
from the Home Office Land Joint Venture and the tax impact for the
allocation of income taxes to other comprehensive income items
related to our Primary Pension Plan and interest rate swaps on our
financial results and therefore are presenting the following
non-GAAP financial measures: (1) adjusted net income/(loss) before
net interest expense, income tax expense/(benefit) and depreciation
and amortization (adjusted EBITDA); (2) adjusted net
income/(loss); and (3) adjusted earnings/(loss) per
share-diluted.
In addition, we believe that EBITDA is a useful
measure in assessing our operating performance and are therefore
presenting this non-GAAP financial measure in addition to the
non-GAAP financial measures listed above.
EBITDA AND ADJUSTED EBITDA,
NON-GAAP FINANCIAL MEASURES:
The following table reconciles net income/(loss), the most directly
comparable GAAP measure, to EBITDA and adjusted EBITDA, non-GAAP
financial measures:
|
Three Months Ended |
|
Six Months Ended |
|
August 1, 2015 |
|
August 2, 2014 |
|
August 1, 2015 |
|
August 2, 2014 |
Net
income/(loss) |
$ |
(138 |
) |
|
$ |
(172 |
) |
|
$ |
(305 |
) |
|
$ |
(524 |
) |
Add:
Net interest expense |
103 |
|
|
106 |
|
|
201 |
|
|
203 |
|
Add:
Income tax expense/(benefit) |
(3 |
) |
|
(4 |
) |
|
(9 |
) |
|
4 |
|
Add:
Depreciation and amortization |
153 |
|
|
160 |
|
|
307 |
|
|
318 |
|
EBITDA (non-GAAP) |
115 |
|
|
90 |
|
|
194 |
|
|
1 |
|
Add:
Restructuring and management transition charges |
17 |
|
|
5 |
|
|
39 |
|
|
27 |
|
Add:
Primary pension plan expense/(income) |
8 |
|
|
(4 |
) |
|
13 |
|
|
(9 |
) |
Less:
Net gain on the sale of non-operating assets |
(6 |
) |
|
(9 |
) |
|
(8 |
) |
|
(21 |
) |
Less:
Proportional share of net income from the home office land joint
venture |
- |
|
|
(43 |
) |
|
(22 |
) |
|
(43 |
) |
Adjusted EBITDA (non-GAAP) |
$ |
134 |
|
|
$ |
39 |
|
|
$ |
216 |
|
|
$ |
(45 |
) |
ADJUSTED NET INCOME/(LOSS) AND
ADJUSTED EARNINGS/(LOSS) PER SHARE-DILUTED, NON-GAAP FINANCIAL
MEASURES:
The following table reconciles net income/(loss)
and earnings/(loss) per share-diluted, the most directly comparable
GAAP measures, to adjusted net income/(loss) and adjusted
earnings/(loss) per share-diluted, non-GAAP financial measures:
|
Three Months Ended |
|
Six Months Ended |
|
August 1, 2015 |
|
August 2, 2014 |
|
August 1, 2015 |
|
August 2, 2014 |
Net
income/(loss) |
$ |
(138 |
) |
|
$ |
(172 |
) |
|
$ |
(305 |
) |
|
$ |
(524 |
) |
Earnings/(loss) per share-diluted |
$ |
(0.45 |
) |
|
$ |
(0.56 |
) |
|
$ |
(1.00 |
) |
|
$ |
(1.72 |
) |
|
|
|
|
|
|
|
|
Add:
Restructuring and management transition charges, net of tax of $-,
$-, $- and $-(1) |
17 |
|
|
5 |
|
|
39 |
|
|
27 |
|
Add:
Primary pension plan expense/(income), net of tax of $-, $-, $-
and $- (2) |
8 |
|
|
(4 |
) |
|
13 |
|
|
(9 |
) |
Less: Net gain on the sale of non-operating assets, net of
tax of $-, $-, $- and $-(3) |
(6 |
) |
|
(9 |
) |
|
(8 |
) |
|
(21 |
) |
Less:
Proportional share of net income from the home office land joint
venture, net of tax of $-, $-, $- and $-(1) |
- |
|
|
(43 |
) |
|
(22 |
) |
|
(43 |
) |
Less:
Tax impact resulting from other comprehensive income
allocation(4) |
(7 |
) |
|
(5 |
) |
|
(18 |
) |
|
(11 |
) |
Adjusted net income/(loss) (non-GAAP) |
$ |
(126 |
) |
|
$ |
(228 |
) |
|
$ |
(301 |
) |
|
$ |
(581 |
) |
Adjusted earnings/(loss) per share-diluted
(non-GAAP) |
$ |
(0.41 |
) |
|
$ |
(0.75 |
) |
|
$ |
(0.98 |
) |
|
$ |
(1.90 |
) |
-
Reflects no tax effect due to
the impact of the Company's tax valuation allowance.
-
The tax effect is included in
the line item Tax impact resulting from other comprehensive income
allocation. See footnote 4 below.
-
Tax effect was calculated using
the effective tax rate for the transactions.
-
Represents the net tax benefit
that resulted from our other comprehensive income allocation
between our Operating loss and Accumulated other comprehensive
income for the amortization of net actuarial losses and prior
service credits related to the Primary Pension Plan and the tax
affect for the loss on our interest rate swaps.
Reconciliation of
Non-GAAP Financial Measures
(Unaudited)
(Amounts in millions)
Free cash flow is a key financial measure of our
ability to generate additional cash from operating our business and
in evaluating our financial performance. We define free cash flow
as cash flow from operating activities, less capital expenditures,
plus the proceeds from the sale of operating assets. Free
cash flow is a relevant indicator of our ability to repay maturing
debt, revise our dividend policy or fund other uses of capital that
we believe will enhance stockholder value. Free cash flow is
considered a non-GAAP financial measure under the rules of the SEC.
Free cash flow is limited and does not represent remaining cash
flow available for discretionary expenditures due to the fact that
the measure does not deduct payments required for debt maturities,
pay-down of off-balance sheet pension debt, and other obligations
or payments made for business acquisitions. Therefore, it is
important to view free cash flow in addition to, rather than as a
substitute for, our entire statement of cash flows and those
measures prepared in accordance with GAAP.
FREE CASH FLOW, NON-GAAP
FINANCIAL MEASURE:
The following table reconciles cash flow from
operating activities, the most directly comparable GAAP measure, to
free cash flow, a non-GAAP financial measure:
|
Three Months Ended |
|
Six Months Ended |
|
August 1, 2015 |
|
August 2, 2014 |
|
August 1, 2015 |
|
August 2, 2014 |
Net
cash provided by/(used in) operating activities |
$ |
42 |
|
|
$ |
137 |
|
|
$ |
(184 |
) |
|
$ |
(134 |
) |
Add: Proceeds from sale of operating assets |
- |
|
|
- |
|
|
5 |
|
|
2 |
|
Less: Capital expenditures |
(95 |
) |
|
(61 |
) |
|
(141 |
) |
|
(141 |
) |
Free cash flow (non-GAAP) |
$ |
(53 |
) |
|
$ |
76 |
|
|
$ |
(320 |
) |
|
$ |
(273 |
) |
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: J. C. Penney Company, Inc. via Globenewswire
HUG#1945562
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