Net Loss improves
42 percent over the same period last year
Company reaffirms
its full year earnings and $1 billion EBITDA guidance
PLANO, Texas - (Nov. 11,
2016) - J. C. Penney Company, Inc. (NYSE: JCP) today announced
financial results for its third quarter ended Oct. 29, 2016.
Comparable sales were (0.8) % for the third quarter, providing a
two-year stack of 5.6 %. Net loss improved 42 % versus the prior
year to $(67) million.
"We are pleased to see strong
sales performance in the growth initiatives we discussed at our
most recent analyst meeting. The results of these initiatives
are reflected in a positive sales comp in the month of October,
driven by over 200 basis points of comp benefit from our 500 new
appliance showrooms. We view our October sales results -
specifically our acceleration in the last two weeks of the month -
and the benefit from appliances as examples of what we expect for
the balance of the fourth quarter. Despite experiencing
softness in apparel sales, we are continuing to improve the bottom
line of our business thanks to the commitment and hard work of our
over 100,000 Associates."
Ellison continued, "We are excited
about the initiatives we have in place to drive incremental growth
during the Holiday Season with our increased appliance penetration,
new Sephora locations, free same day pick up for online orders, a
strong cadence of promotional events and our new lowest price
guarantee. We are also thrilled about delivering a 200 basis
point improvement in our private label credit card penetration in
the third quarter, which led to our highest penetration in many
years. These and other initiatives reinforce our confidence
in our ability to achieve $1 billion in EBITDA for 2016."
For the quarter, Sephora, Home,
Salon and Fine Jewelry were the Company's top performing divisions.
Geographically, the Pacific and Northwest were the best performing
regions of the country.
For the third quarter, gross
margin was 37.2 % of sales, a 10 basis point decline compared to
the same period last year.
SG&A expenses for the quarter
decreased $59 million to $888 million, or 31.1 % of sales,
representing a 160 basis point improvement from last year. These
savings were primarily driven by lower corporate overhead,
incentive compensation and store controllable costs.
For the third quarter, the Company
delivered a 42 % improvement in net loss over the prior year to
$(67) million or $(0.22) per share. Adjusted earnings per
share improved 54 % to a loss of $(0.21) per share for the third
quarter this year compared to a loss of $(0.46) per share last
year
EBITDA improved $36 million to
$172 million for the quarter, a 26 % improvement from the same
period last year. Adjusted EBITDA improved 57 % to $174
million, a $63 million improvement from the same period last
year.
A reconciliation of GAAP to
non-GAAP financial measures is included in the schedules
accompanying the consolidated financial statements in this
release.
Outlook
The Company has updated its 2016
full year guidance as follows:
-
Comparable store sales: expected to now
increase 1% to 2%;
-
Gross margin: expected to now be flat
versus 2015;
-
SG&A dollars: expected to decrease
versus 2015;
-
EBITDA1: expected to
be $1 billion;
-
Adjusted earnings per share1: expected to
be positive;
-
Free cash flow1: expected to
improve versus 2015.
[1]
A reconciliation of non-GAAP forward-looking projections to GAAP
financial measures is not available as the nature or amount of
potential adjustments, which may be significant, cannot be
determined at this time.
Third Quarter
Earnings Conference Call Details
At 8:30 a.m. ET today, the Company will host a live conference call
conducted by chairman and chief executive officer Marvin R. Ellison
and chief financial officer Ed Record. Management will
discuss the Company's performance during the quarter and take
questions from participants. To access the conference call,
please dial (844) 243-9275, or (225) 283-0394 for international
callers, and reference 7715351 conference ID 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 for seven days beginning approximately two hours after
the conclusion of the conference call by dialing (855) 859-2056, or
(404) 537-3406 for international callers, and referencing 7715351
conference ID.
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; Follow us @jcpnews
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 furnishings retailers, is on a mission to ensure
every customer's shopping experience is worth her time, money and
effort. Whether shopping jcp.com or visiting one of over 1,000
store locations across the United States and Puerto Rico, she will
discover a broad assortment of products from a leading portfolio of
private, exclusive and national brands. Supporting this value
proposition is the warrior spirit of over 100,000 JCPenney
associates worldwide, who are focused on the Company's three
strategic priorities of strengthening private brands, becoming a
world-class omnichannel retailer and increasing revenue per
customer. For additional information, please visit jcp.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, earnings 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 including our omnichannel initiatives, 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 including
EMV chip technology, 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 |
|
|
Nine Months Ended |
|
Statements of Operations: |
October 29, 2016 |
|
October 31, 2015 |
(1) |
% Inc. (Dec.) |
|
|
October 29, 2016 |
|
October 31, 2015 |
(1) |
% Inc. (Dec.) |
|
Total net sales |
$ |
2,857 |
|
|
$ |
2,897 |
|
|
(1.4 |
)% |
|
|
$ |
8,586 |
|
|
$ |
8,629 |
|
|
(0.5 |
)% |
|
Cost of goods sold |
1,795 |
|
|
1,815 |
|
|
(1.1 |
)% |
|
|
5,422 |
|
|
5,441 |
|
|
(0.3 |
)% |
|
Gross margin |
1,062 |
|
|
1,082 |
|
|
(1.8 |
)% |
|
|
3,164 |
|
|
3,188 |
|
|
(0.8 |
)% |
|
Operating expenses/(income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative (SG&A) |
888 |
|
|
947 |
|
|
(6.2 |
)% |
|
|
2,613 |
|
|
2,813 |
|
|
(7.1 |
)% |
|
Pension |
1 |
|
|
(17 |
) |
|
(100.0 |
)% |
+ |
|
5 |
|
|
(52 |
) |
|
(100.0 |
)% |
+ |
Depreciation and
amortization |
149 |
|
|
152 |
|
|
(2.0 |
)% |
|
|
456 |
|
|
459 |
|
|
(0.7 |
)% |
|
Real estate and other, net |
(1 |
) |
|
2 |
|
|
100.0 |
% |
+ |
|
(48 |
) |
|
(14 |
) |
|
100.0 |
% |
+ |
Restructuring and management
transition |
2 |
|
|
14 |
|
|
(85.7 |
)% |
|
|
17 |
|
|
53 |
|
|
(67.9 |
)% |
|
Total operating expenses |
1,039 |
|
|
1,098 |
|
|
(5.4 |
)% |
|
|
3,043 |
|
|
3,259 |
|
|
(6.6 |
)% |
|
Operating income/(loss) |
23 |
|
|
(16 |
) |
|
100.0 |
% |
+ |
|
121 |
|
|
(71 |
) |
|
100.0 |
% |
+ |
(Gain)/loss on extinguishment of debt |
- |
|
|
- |
|
|
- |
% |
|
|
30 |
|
|
- |
|
|
100.0 |
% |
+ |
Net interest expense |
87 |
|
|
102 |
|
|
(14.7 |
)% |
|
|
275 |
|
|
303 |
|
|
(9.2 |
)% |
|
Income/(loss) before income taxes |
(64 |
) |
|
(118 |
) |
|
(45.8 |
)% |
|
|
(184 |
) |
|
(374 |
) |
|
(50.8 |
)% |
|
Income tax expense/(benefit)
(2) |
3 |
|
|
(3 |
) |
|
100.0 |
% |
+ |
|
7 |
|
|
8 |
|
|
(12.5 |
)% |
|
Net income/(loss) |
$ |
(67 |
) |
|
$ |
(115 |
) |
|
(41.7 |
)% |
|
|
$ |
(191 |
) |
|
$ |
(382 |
) |
|
(50.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per share - basic and diluted |
$ |
(0.22 |
) |
|
$ |
(0.38 |
) |
|
(42.1 |
)% |
|
|
$ |
(0.62 |
) |
|
$ |
(1.25 |
) |
|
(50.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales
increase/(decrease) (3) |
(0.8 |
)% |
|
6.4 |
% |
|
|
|
|
0.3 |
% |
|
4.6 |
% |
|
|
|
Ratios as a percentage of sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
37.2 |
% |
|
37.3 |
% |
|
|
|
|
36.9 |
% |
|
36.9 |
% |
|
|
|
SG&A expenses |
31.1 |
% |
|
32.7 |
% |
|
|
|
|
30.4 |
% |
|
32.6 |
% |
|
|
|
Total operating expenses |
36.4 |
% |
|
37.9 |
% |
|
|
|
|
35.4 |
% |
|
37.8 |
% |
|
|
|
Operating income/(loss) |
0.8 |
% |
|
(0.6 |
)% |
|
|
|
|
1.4 |
% |
|
(0.8 |
)% |
|
|
|
Effective income tax rate
(2) |
4.7 |
% |
|
(2.5 |
)% |
|
|
|
|
3.8 |
% |
|
2.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and outstanding shares at end of period |
307.8 |
|
|
305.5 |
|
|
|
|
|
307.8 |
|
|
305.5 |
|
|
|
|
Weighted average shares -
basic |
308.3 |
|
|
306.0 |
|
|
|
|
|
307.8 |
|
|
305.8 |
|
|
|
|
Weighted average shares - diluted |
308.3 |
|
|
306.0 |
|
|
|
|
|
307.8 |
|
|
305.8 |
|
|
|
|
-
Prior year amounts have been
adjusted to reflect the retrospective application of accounting
policy change for recognizing pension expense.
-
For the three and nine months
ended October 29, 2016, the Company increased its net valuation
allowance by $30 million and $62 million, respectively, against
certain federal and state net operating loss carry forward
assets. For the three and nine months ended October 31, 2015,
the Company increased its net valuation allowance by $41 million
and $131 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. 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. Our definition and calculation of comparable store
sales may differ from other companies in the retail
industry.
SUMMARY BALANCE
SHEETS
(Unaudited)
(Amounts in millions)
Summary Balance Sheets: |
October 29, 2016 |
|
October 31, 2015 |
(1) |
Current assets: |
|
|
|
|
Cash in banks and in transit |
$ |
172 |
|
|
$ |
152 |
|
|
Cash short-term
investments |
11 |
|
|
486 |
|
|
Cash and cash equivalents |
183 |
|
|
638 |
|
|
Merchandise inventory |
3,691 |
|
|
3,669 |
|
|
Deferred taxes |
208 |
|
|
208 |
|
|
Prepaid expenses and
other |
254 |
|
|
218 |
|
|
Total current assets |
4,336 |
|
|
4,733 |
|
|
Property and equipment,
net |
4,651 |
|
|
4,905 |
|
|
Prepaid pension |
- |
|
|
289 |
|
|
Other assets |
608 |
|
|
623 |
|
|
Total assets |
$ |
9,595 |
|
|
$ |
10,550 |
|
|
|
|
|
|
|
Liabilities and stockholders'
equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Merchandise accounts payable |
$ |
1,493 |
|
|
$ |
1,453 |
|
|
Other accounts payable and
accrued expenses |
1,170 |
|
|
1,246 |
|
|
Current maturities of capital leases and note payable |
15 |
|
|
26 |
|
|
Current maturities of
long-term debt |
263 |
|
|
106 |
|
|
Total current liabilities |
2,941 |
|
|
2,831 |
|
|
Long-term capital leases and
note payable |
9 |
|
|
14 |
|
|
Long-term debt |
4,509 |
|
|
5,147 |
|
|
Deferred taxes |
406 |
|
|
395 |
|
|
Other liabilities |
590 |
|
|
616 |
|
|
Total
liabilities |
8,455 |
|
|
9,003 |
|
|
Stockholders' equity |
1,140 |
|
|
1,547 |
|
|
Total
liabilities and stockholders' equity |
$ |
9,595 |
|
|
$ |
10,550 |
|
|
-
Prior year amounts have been
adjusted to reflect the retrospective application of accounting
policy change for recognizing pension expense.
SUMMARY STATEMENTS
OF CASH FLOWS
(Unaudited)
(Amounts in millions)
|
Three Months Ended |
|
Nine Months Ended |
|
Statements of Cash Flows: |
October 29, 2016 |
|
October 31, 2015 |
(1) |
October 29, 2016 |
|
October 31, 2015 |
(1) |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net income/(loss) |
$ |
(67 |
) |
|
$ |
(115 |
) |
|
$ |
(191 |
) |
|
$ |
(382 |
) |
|
Adjustments to reconcile net
income/(loss) to net cash provided by/(used in) operating
activities: |
|
|
|
|
|
|
|
|
Restructuring and management transition |
- |
|
|
(1 |
) |
|
(1 |
) |
|
3 |
|
|
Asset impairments and other
charges |
- |
|
|
4 |
|
|
2 |
|
|
6 |
|
|
Net gain on sale of non-operating assets |
- |
|
|
(1 |
) |
|
(5 |
) |
|
(9 |
) |
|
Net gain on sale of operating
assets |
- |
|
|
(1 |
) |
|
(10 |
) |
|
(9 |
) |
|
(Gain)/loss on extinguishment of debt |
- |
|
|
- |
|
|
30 |
|
|
- |
|
|
Depreciation and
amortization |
149 |
|
|
152 |
|
|
456 |
|
|
459 |
|
|
Benefit plans |
(14 |
) |
|
(25 |
) |
|
(41 |
) |
|
(73 |
) |
|
Stock-based compensation |
7 |
|
|
12 |
|
|
27 |
|
|
33 |
|
|
Deferred taxes |
3 |
|
|
(8 |
) |
|
3 |
|
|
(5 |
) |
|
Change in cash from: |
|
|
|
|
|
|
|
|
Inventory |
(710 |
) |
|
(664 |
) |
|
(970 |
) |
|
(1,017 |
) |
|
Prepaid expenses and other
assets |
(19 |
) |
|
(22 |
) |
|
(87 |
) |
|
(33 |
) |
|
Merchandise accounts payable |
399 |
|
|
331 |
|
|
568 |
|
|
456 |
|
|
Current income taxes |
(1 |
) |
|
4 |
|
|
(5 |
) |
|
10 |
|
|
Accrued expenses and other |
60 |
|
|
102 |
|
|
(177 |
) |
|
145 |
|
|
Net cash provided by/(used in)
operating activities |
(193 |
) |
|
(232 |
) |
|
(401 |
) |
|
(416 |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
(122 |
) |
|
(93 |
) |
|
(282 |
) |
|
(234 |
) |
|
Proceeds from sale of non-operating assets |
- |
|
|
- |
|
|
2 |
|
|
13 |
|
|
Proceeds from sale of
operating assets |
- |
|
|
1 |
|
|
16 |
|
|
6 |
|
|
Joint venture return of investment |
- |
|
|
- |
|
|
15 |
|
|
- |
|
|
Net cash provided by/(used in)
investing activities |
(122 |
) |
|
(92 |
) |
|
(249 |
) |
|
(215 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of
long-term debt |
- |
|
|
- |
|
|
2,188 |
|
|
- |
|
|
Credit facility proceeds |
259 |
|
|
- |
|
|
259 |
|
|
- |
|
|
Credit facility payments |
(97 |
) |
|
- |
|
|
(97 |
) |
|
- |
|
|
Payments of capital leases and note payable |
(5 |
) |
|
(4 |
) |
|
(24 |
) |
|
(27 |
) |
|
Payments of long-term
debt |
(89 |
) |
|
(7 |
) |
|
(2,339 |
) |
|
(20 |
) |
|
Financing costs |
- |
|
|
- |
|
|
(49 |
) |
|
- |
|
|
Proceeds from stock options
exercised |
1 |
|
|
- |
|
|
2 |
|
|
- |
|
|
Other changes in stockholders' equity |
- |
|
|
- |
|
|
(7 |
) |
|
(2 |
) |
|
Net cash provided by/(used in)
financing activities |
69 |
|
|
(11 |
) |
|
(67 |
) |
|
(49 |
) |
|
Net increase/(decrease) in cash and cash equivalents |
(246 |
) |
|
(335 |
) |
|
(717 |
) |
|
(680 |
) |
|
Cash and cash equivalents at
beginning of period |
429 |
|
|
973 |
|
|
900 |
|
|
1,318 |
|
|
Cash and cash equivalents at end of period |
$ |
183 |
|
|
$ |
638 |
|
|
$ |
183 |
|
|
$ |
638 |
|
|
-
Prior year amounts have been
adjusted to reflect the retrospective application of accounting
policy change for recognizing pension expense.
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 (gain)/loss on extinguishment of debt,
the net gain on the sale of non-operating assets and 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). Unlike other
operating expenses, restructuring and management transition
charges, the (gain)/loss on extinguishment of debt, the net gain on
the sale of non-operating assets and the proportional share of net
income from the Home Office Land Joint Venture 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 (gain)/loss on
extinguishment of debt, the net gain on the sale of non-operating
assets and the proportional share of net income from the Home
Office Land Joint Venture to other comprehensive income 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 (benefit)/expense 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 |
|
Nine Months Ended |
|
|
October 29, 2016 |
|
October 31, 2015 |
(1) |
October 29, 2016 |
|
October 31, 2015 |
(1) |
Net income/(loss) |
$ |
(67 |
) |
|
$ |
(115 |
) |
|
$ |
(191 |
) |
|
$ |
(382 |
) |
|
Add: Net interest expense |
87 |
|
|
102 |
|
|
275 |
|
|
303 |
|
|
Add: (Gain)/loss on
extinguishment of debt |
- |
|
|
- |
|
|
30 |
|
|
- |
|
|
Total interest expense |
87 |
|
|
102 |
|
|
305 |
|
|
303 |
|
|
Add: Income tax
expense/(benefit) |
3 |
|
|
(3 |
) |
|
7 |
|
|
8 |
|
|
Add: Depreciation and amortization |
149 |
|
|
152 |
|
|
456 |
|
|
459 |
|
|
EBITDA
(non-GAAP) |
172 |
|
|
136 |
|
|
577 |
|
|
388 |
|
|
Add: Restructuring and management transition charges |
2 |
|
|
14 |
|
|
17 |
|
|
53 |
|
|
Add: Primary pension plan
expense/(income) |
- |
|
|
(19 |
) |
|
- |
|
|
(57 |
) |
|
Less: Net gain on the sale of non-operating assets |
- |
|
|
(1 |
) |
|
(5 |
) |
|
(9 |
) |
|
Less: Proportional share of
net income from the home office land joint venture |
- |
|
|
(19 |
) |
|
(29 |
) |
|
(41 |
) |
|
Adjusted EBITDA (non-GAAP) |
$ |
174 |
|
|
$ |
111 |
|
|
$ |
560 |
|
|
$ |
334 |
|
|
-
Prior year amounts have been
adjusted to reflect the retrospective application of accounting
policy change for recognizing pension expense.
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 |
|
Nine Months Ended |
|
|
October 29, 2016 |
|
October 31, 2015 |
(1) |
October 29, 2016 |
|
October 31, 2015 |
(1) |
Net income/(loss) |
$ |
(67 |
) |
|
$ |
(115 |
) |
|
$ |
(191 |
) |
|
$ |
(382 |
) |
|
Earnings/(loss) per share-diluted |
$ |
(0.22 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.62 |
) |
|
$ |
(1.25 |
) |
|
|
|
|
|
|
|
|
|
|
Add: Restructuring and management transition charges
(2) |
2 |
|
|
14 |
|
|
17 |
|
|
53 |
|
|
Add: Primary pension plan
expense/(income) (2) |
- |
|
|
(19 |
) |
|
- |
|
|
(57 |
) |
|
Add: (Gain)/loss on extinguishment of debt (2) |
- |
|
|
- |
|
|
30 |
|
|
- |
|
|
Less: Net gain on the
sale of non-operating assets (2) |
- |
|
|
(1 |
) |
|
(5 |
) |
|
(9 |
) |
|
Less: Proportional share of net income from the home
office land joint venture (2) |
- |
|
|
(19 |
) |
|
(29 |
) |
|
(41 |
) |
|
Adjusted net
income/(loss) (non-GAAP) |
$ |
(65 |
) |
|
$ |
(140 |
) |
|
$ |
(178 |
) |
|
$ |
(436 |
) |
|
Adjusted earnings/(loss) per
share-diluted (non-GAAP) |
$ |
(0.21 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.58 |
) |
|
$ |
(1.43 |
) |
|
-
Prior year amounts have been
adjusted to reflect the retrospective application of accounting
policy change for recognizing pension expense.
-
Reflects no tax effect due to
the impact of the Company's tax valuation allowance.
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 sets forth a reconciliation of
cash flow from operating activities, the most directly comparable
GAAP measure, to free cash flow, a non-GAAP financial measure, as
well as information regarding net cash provided by/(used in)
investing activities and net cash provided by/(used in) financing
activities:
|
Three Months Ended |
|
Nine Months Ended |
|
October 29, 2016 |
|
October 31, 2015 |
|
October 29, 2016 |
|
October 31, 2015 |
Net cash provided by/(used in)
operating activities |
$ |
(193 |
) |
|
$ |
(232 |
) |
|
$ |
(401 |
) |
|
$ |
(416 |
) |
Add: Proceeds from sale of operating assets |
- |
|
|
1 |
|
|
16 |
|
|
6 |
|
Less: Capital
expenditures |
(122 |
) |
|
(93 |
) |
|
(282 |
) |
|
(234 |
) |
Free cash flow (non-GAAP) |
$ |
(315 |
) |
|
$ |
(324 |
) |
|
$ |
(667 |
) |
|
$ |
(644 |
) |
|
|
|
|
|
|
|
|
Net cash provided by/(used in) investing activities
(1) |
$ |
(122 |
) |
|
$ |
(92 |
) |
|
$ |
(249 |
) |
|
$ |
(215 |
) |
Net cash provided by/(used in)
financing activities |
$ |
69 |
|
|
$ |
(11 |
) |
|
$ |
(67 |
) |
|
$ |
(49 |
) |
(1)
Net cash provided by/(used in) investing
activities includes capital expenditures and proceeds from sale of
operating assets, which are also included in our computation of
free cash flow.
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq 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
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