PLANO, Texas, Aug. 10, 2012 /PRNewswire/ -- J. C. Penney
Company, Inc. (NYSE: JCP) today announced financial results for its
fiscal second quarter ended July 28,
2012. For the quarter, jcpenney reported an adjusted net loss
of $81 million or $0.37 per share, excluding restructuring and
management transition charges, inventory transition markdowns, gain
on the redemption of the Simon REIT units, net of fees and non-cash
qualified pension expense. On a GAAP basis, the Company
reported a net loss of $147 million
or $0.67 per share. A
reconciliation of GAAP to non-GAAP financial measures is included
in the schedules accompanying the consolidated financial statements
included with this release.
(Logo:
http://photos.prnewswire.com/prnh/20110222/DA51975LOGO)
"We have now completed the first six months of our
transformation and while business continues to be softer than
anticipated, we are confident the transformation of jcpenney is on
track. The transition from a highly promotional business
model to one based on everyday value will take time and we will
stay the course," said jcpenney CEO Ron
Johnson. "This month we simplified our pricing,
launched the first of our new shops, and accelerated our marketing
efforts to focus on brands, products and value. Early response to
these efforts has been very encouraging."
He added, "We continue to learn and adjust, and fully expect
that our unique, specialty department store experience will drive
jcpenney's long term success. Our rock solid balance sheet will
support the execution of our transformation and position us for
growth beginning in 2013."
Second Quarter Results:
Comparable store sales for the second quarter declined 21.7
percent. Total sales decreased 22.6 percent, which includes
the effects of the Company's exit from its outlet business.
Internet sales through jcp.com were $220
million in the second quarter, decreasing 32.6 percent from
last year. Sales were adversely impacted by the Company's
decision to significantly reduce its marketing activities during
the latter half of the quarter, as it reconsidered its approach to
pricing and marketing in time for back to school.
Gross margin was 33.2 percent of sales, compared to 38.3 percent
in the same period last year. Gross margin was impacted by
lower than expected sales in the quarter and approximately
$102 million of markdowns taken to
clear discontinued inventory in preparation for new product
arriving in the fall of 2012. Excluding these transitional
markdowns, which lowered gross margin by 340 basis points, adjusted
gross margin was 36.6 percent of sales. A reconciliation of
GAAP gross margin to non-GAAP adjusted gross margin is included in
the schedules accompanying this release.
The Company's SG&A expenses decreased $193 million versus last year's second
quarter. Based on the pace of its ongoing efforts to
aggressively manage expenses and additional operational
efficiencies that management has identified, the Company continues
to expect savings to accelerate and exceed an annual run rate of
approximately $900 million at the end
of 2012.
For the second quarter, the Company incurred $159 million in restructuring and management
transition charges. These charges comprised the following:
- Home office and store severance expense $56 million, or $0.16 per share;
- Store fixtures $42 million, or
$0.12 per share;
- Software and systems $36
million, or $0.10 per
share;
- Supply chain $10 million, or
$0.03 per share;
- Management transition $10
million, or $0.03 per
share;
- Other $5 million, or
$0.01 per share.
The Company ended the second quarter with approximately
$888 million in cash and cash
equivalents on its balance sheet. Cash used in operations in the
second quarter was $32 million,
$545 million less than the first
quarter of 2012.
2012 Outlook:
The Company no longer anticipates achieving the previously
issued non-GAAP earnings guidance for fiscal 2012. Management
intends to continue to provide qualitative information on business
trends and capital expenditures throughout the year.
Additionally, the Company expects to end the fiscal year with in
excess of $1 billion of cash on the
balance sheet after spending $800
million in capital expenditures to support the Company's
transformation efforts and paying off $230
million of notes due in August
2012.
Earnings Event Today/Webcast Details:
Additional financial detail relating to the Company's quarterly
performance is now available on its investor relations website at
ir.jcpenney.com. These slides will also be presented as part
of the Company's earnings event. At 8:00 a.m. ET today, the Company will host an
in-person meeting with members of the financial community at SIR
Stage 37 in New York City where
the jcp leadership team will provide further commentary on the
Company's second quarter 2012 financial results.
The presentations and question-and-answer session will be
available via live streaming video and webcast on the Company's
investor relations website at ir.jcpenney.com. A replay of
the webcast will be available for up to 90 days after the
event.
For individuals without access to the webcast, the event will
also be available via live conference call in listen-only mode. To
access the presentations and question-and-answer session, please
dial (888) 754-4437, or (212) 231-2900 for international callers,
and reference the jcp second quarter earnings event.
Telephone playback will be available for seven days beginning
approximately two hours after the conclusion of the meeting by
dialing (800) 633-8284, reservation code 21600421 and (402)
977-9140, reservation code 21600421 for international callers.
For further information, contact:
Eric Cerny and Angelika Torres; (972)431.5500
jcpinvestorrelations@jcpenney.com
Kristin Hays and Joey Thomas; (972)431.3400
jcpcorpcomm@jcpenney.com
Corporate Website
ir.jcpenney.com
About jcpenney:
More than a century ago, James Cash
Penney founded his company on the principle of the Golden
Rule: treat others the way you'd like to be treated – Fair and
Square. His legacy continues to this day, as J. C. Penney Company,
Inc. (NYSE: JCP) boldly transforms the retail experience across
1,100 stores and jcp.com to become America's favorite store.
Focused on making the customer experience better every day,
jcpenney is dreaming up new ways to make customers love shopping
again. On every visit, customers will discover great prices every
day in a unique Shops environment that features exceptionally
curated merchandise, a dynamic presentation and unmatched customer
service. For more information, visit us at jcp.com.
This release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements, which reflect the Company's
current views of future events and financial performance, involve
known and unknown risks and uncertainties 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 spending patterns, credit
availability and debt levels, changes in store traffic trends, the
cost of goods, trade restrictions, the impact of changes designed
to transform our business, changes in tariff, freight and shipping
rates, changes in the cost of fuel and other energy and
transportation costs, 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, a systems failure and/or security breach that results
in the theft, transfer or unauthorized disclosure of customer,
employee or Company information and legal and regulatory
proceedings. Please refer to the Company's most recent Form
10-K and subsequent filings for a further discussion of risks and
uncertainties. Investors should take such risks into account when
making investment decisions. 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
|
|
|
|
|
July
28,
|
|
July
30,
|
|
%
Inc.
|
|
July
28,
|
|
July
30,
|
|
%
Inc.
|
|
|
|
|
2012
|
|
2011
|
|
(Dec.)
|
|
2012
|
|
2011
|
|
(Dec.)
|
|
STATEMENTS OF OPERATIONS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net
sales
|
|
$
3,022
|
|
$
3,906
|
|
(22.6)%
|
|
$
6,174
|
|
$
7,849
|
|
(21.3)%
|
|
Costs of
goods sold
|
|
2,018
|
|
2,409
|
|
(16.2)%
|
|
3,984
|
|
4,757
|
|
(16.2)%
|
|
Gross
margin
|
|
1,004
|
|
1,497
|
|
(32.9)%
|
|
2,190
|
|
3,092
|
|
(29.2)%
|
|
Operating
expenses/(income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative (SG&A)
|
|
1,050
|
|
1,243
|
|
(15.5)%
|
|
2,210
|
|
2,524
|
|
(12.4)%
|
|
Qualified
pension plan
|
|
48
|
|
21
|
|
100+%
|
|
97
|
|
43
|
|
100+%
|
|
Supplemental pension plans
|
|
10
|
|
7
|
|
42.9%
|
|
19
|
|
14
|
|
35.7%
|
|
|
Total
pension
|
|
58
|
|
28
|
|
100+%
|
|
116
|
|
57
|
|
100+%
|
|
Depreciation and amortization
|
|
128
|
|
128
|
|
0.0%
|
|
253
|
|
256
|
|
(1.2)%
|
|
Real
estate and other, net
|
|
(208)
|
|
(6)
|
|
100+%
|
|
(215)
|
|
(19)
|
|
100+%
|
|
Restructuring and management transition
|
|
159
|
|
23
|
|
100+%
|
|
235
|
|
32
|
|
100+%
|
|
Total
operating expenses
|
|
1,187
|
|
1,416
|
|
(16.2)%
|
|
2,599
|
|
2,850
|
|
(8.8)%
|
|
Operating
income/(loss)
|
|
(183)
|
|
81
|
|
(100+)%
|
|
(409)
|
|
242
|
|
(100+)%
|
|
Net
interest expense
|
|
58
|
|
57
|
|
1.8%
|
|
114
|
|
115
|
|
(0.9)%
|
|
Income/(loss) before income taxes
|
|
(241)
|
|
24
|
|
(100+)%
|
|
(523)
|
|
127
|
|
(100+)%
|
|
Income tax
expense/(benefit)
|
|
(94)
|
|
10
|
|
(100+)%
|
|
(213)
|
|
49
|
|
(100+)%
|
|
Net
income/(loss)
|
|
$
(147)
|
|
$
14
|
|
(100+)%
|
|
$
(310)
|
|
$
78
|
|
(100+)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per share - basic
|
|
$
(0.67)
|
|
$
0.07
|
|
(100+)%
|
|
$
(1.42)
|
|
$
0.35
|
|
(100+)%
|
|
Earnings/(loss) per share - diluted
|
|
$
(0.67)
|
|
$
0.07
|
|
(100+)%
|
|
$
(1.42)
|
|
$
0.35
|
|
(100+)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
store sales increase/(decrease)
|
|
(21.7)%
|
|
1.5%
|
|
|
|
(20.3)%
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios as
a percentage of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
33.2%
|
|
38.3%
|
|
|
|
35.5%
|
|
39.4%
|
|
|
|
SG&A
expenses
|
|
34.7%
|
|
31.8%
|
|
|
|
35.8%
|
|
32.2%
|
|
|
|
Total
operating expenses
|
|
39.3%
|
|
36.2%
|
|
|
|
42.1%
|
|
36.3%
|
|
|
|
Operating
income/(loss)
|
|
(6.1)%
|
|
2.1%
|
|
|
|
(6.6)%
|
|
3.1%
|
|
|
|
Effective
income tax rate
|
|
39.0%
|
|
41.7%
|
|
|
|
40.7%
|
|
38.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
SHARES DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding shares at end of period
|
|
218.8
|
|
213.3
|
|
|
|
218.8
|
|
213.3
|
|
|
|
Weighted
average shares outstanding (basic shares)
|
|
219.3
|
|
213.3
|
|
|
|
218.9
|
|
221.3
|
|
|
|
Weighted
average shares used for diluted EPS
|
|
219.3
|
|
216.3
|
|
|
|
218.9
|
|
224.2
|
|
|
|
SUMMARY BALANCE SHEETS AND STATEMENTS OF
CASH FLOWS
(Unaudited)
(Amounts
in millions)
|
|
|
|
|
|
|
|
|
|
July
28,
|
|
July
30,
|
|
2012
|
|
2011
|
|
SUMMARY
BALANCE SHEETS:
|
|
|
|
|
Cash in
banks and in transit
|
$
171
|
|
$
244
|
|
Cash
short-term investments
|
717
|
|
1,307
|
|
Cash and
cash equivalents
|
888
|
|
1,551
|
|
Merchandise inventory
|
2,993
|
|
3,572
|
|
Income tax
receivable
|
209
|
|
138
|
|
Deferred
income taxes
|
407
|
|
196
|
|
Prepaid
expenses and other
|
239
|
|
194
|
|
Property
and equipment, net
|
5,153
|
|
5,237
|
|
Prepaid
pension
|
-
|
|
788
|
|
Other
assets
|
923
|
|
778
|
|
Total
assets
|
$
10,812
|
|
$
12,454
|
|
|
|
|
|
|
|
|
|
|
Merchandise accounts payable
|
$
1,015
|
|
$
1,386
|
|
Other
accounts payable and accrued expenses
|
1,219
|
|
1,381
|
|
Current
maturities of long-term debt, including capital leases
|
250
|
|
-
|
|
Long-term
debt, including capital leases
|
2,901
|
|
3,099
|
|
Deferred
taxes
|
904
|
|
1,216
|
|
Other
liabilities
|
852
|
|
669
|
|
Total
liabilities
|
7,141
|
|
7,751
|
|
Stockholders' equity
|
3,671
|
|
4,703
|
|
Total
liabilities and stockholders' equity
|
$
10,812
|
|
$
12,454
|
|
|
|
Three
months ended
|
|
Six
months ended
|
|
|
|
July 28,
|
|
July 30,
|
|
July 28,
|
|
July 30,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
STATEMENTS OF CASH FLOWS:
|
|
|
|
|
|
|
|
|
Cash flows
from operating activities:
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
$
(147)
|
|
$
14
|
|
$
(310)
|
|
$
78
|
|
Adjustments to reconcile net
income/(loss) to net cash
|
|
|
|
|
|
|
|
|
provided
by/(used in) operating activities:
|
|
|
|
|
|
|
|
|
Restructuring and management transition
|
78
|
|
13
|
|
90
|
|
14
|
|
Asset
impairments and other charges
|
3
|
|
1
|
|
4
|
|
2
|
|
(Gain) on
redemption of REIT units
|
(202)
|
|
-
|
|
(202)
|
|
-
|
|
Depreciation and amortization
|
128
|
|
128
|
|
253
|
|
256
|
|
Benefit
plans expense
|
41
|
|
14
|
|
79
|
|
28
|
|
Stock-based compensation
|
14
|
|
13
|
|
26
|
|
26
|
|
Excess tax
benefits from stock-based compensation
|
(12)
|
|
(1)
|
|
(23)
|
|
(4)
|
|
Deferred
taxes
|
(153)
|
|
(11)
|
|
(197)
|
|
(105)
|
|
Change in cash
from:
|
|
|
|
|
|
|
|
|
Inventory
|
91
|
|
(164)
|
|
(77)
|
|
(359)
|
|
Prepaid
expenses and other assets
|
(44)
|
|
(7)
|
|
(15)
|
|
3
|
|
Merchandise accounts payable
|
31
|
|
112
|
|
(7)
|
|
253
|
|
Current
income taxes payable
|
113
|
|
(61)
|
|
34
|
|
74
|
|
Accrued
expenses and other
|
27
|
|
69
|
|
(264)
|
|
(94)
|
|
|
Net cash
provided by/(used in) operating activities
|
(32)
|
|
120
|
|
(609)
|
|
172
|
|
Cash flows
from investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(132)
|
|
(178)
|
|
(239)
|
|
(295)
|
|
Proceeds
from redemption of REIT units
|
248
|
|
-
|
|
248
|
|
-
|
|
Acquisition of tradenames
|
-
|
|
-
|
|
(9)
|
|
-
|
|
|
Net cash
provided by/(used in) investing activities
|
116
|
|
(178)
|
|
-
|
|
(295)
|
|
Cash flows
from financing activities:
|
|
|
|
|
|
|
|
|
Financing
costs
|
(2)
|
|
-
|
|
(4)
|
|
(15)
|
|
Stock
repurchase program
|
-
|
|
(167)
|
|
-
|
|
(900)
|
|
Proceeds
from issuance of stock warrant
|
-
|
|
50
|
|
-
|
|
50
|
|
Proceeds
from stock options exercised
|
1
|
|
3
|
|
69
|
|
11
|
|
Other
changes in stock
|
9
|
|
1
|
|
11
|
|
(2)
|
|
Dividends
paid
|
(43)
|
|
(45)
|
|
(86)
|
|
(92)
|
|
|
Net cash
provided by/(used in) financing activities
|
(35)
|
|
(158)
|
|
(10)
|
|
(948)
|
|
Net
increase/(decrease) in cash and cash equivalents
|
49
|
|
(216)
|
|
(619)
|
|
(1,071)
|
|
Cash and
cash equivalents at beginning of period
|
839
|
|
1,767
|
|
1,507
|
|
2,622
|
|
Cash and
cash equivalents at end of period
|
$
888
|
|
$
1,551
|
|
$
888
|
|
$
1,551
|
|
Reconciliation of
Non-GAAP Financial Measures
|
|
(Unaudited)
|
|
(Amounts in millions except
per share data)
|
|
|
We define (1) adjusted
gross margin as gross margin excluding the impact of markdowns
related to the transition of the Company's merchandise mix to align
with its new strategy, (2) adjusted operating income/(loss) as
operating income/(loss) excluding the impact of markdowns related
to the transition of the Company's merchandise mix to align with
its new strategy, restructuring and management transition charges,
the non-cash impact of the qualified pension plan expense and the
redemption of real estate investment trust (REIT) units, net of
fees, and (3) adjusted net income/(loss) and adjusted
earnings/(loss) per share - diluted as net income/(loss) and
earnings/(loss) per share - diluted, respectively, excluding the
after-tax impacts of the markdowns related to the transition of the
Company's merchandise mix to align with its new strategy, the
restructuring and management transition charges, the non-cash
impact of the qualified pension plan expense and the redemption of
REIT units, net of fees. We believe that the presentation of these
non-GAAP financial measures, which our management relies on to
assess our operating results, provides enhanced visibility into our
gross margin and selling, general and administrative expense
structures and facilitates the comparison of our results to the
results of our peer companies. It is important to view each of
these non-GAAP financial measures in addition to, rather that as a
substitute for, the GAAP measures of gross margin, operating
income/(loss), net income/(loss) and earnings/(loss) per
share-diluted, respectively.
|
|
|
ADJUSTED GROSS MARGIN,
NON-GAAP FINANCIAL MEASURE
|
|
The following table
reconciles gross margin, the most directly comparable GAAP measure,
to adjusted gross margin, non-GAAP financial
measure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Six
months ended
|
|
|
|
|
July
28,
|
|
July
30,
|
|
July
28,
|
|
July
30,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Gross
margin
|
|
$
1,004
|
|
$
1,497
|
|
$
2,190
|
|
$
3,092
|
|
As a
percent of sales
|
|
33.2%
|
|
38.3%
|
|
35.5%
|
|
39.4%
|
|
Add:
|
Markdowns
- inventory strategy alignment (1)
|
|
102
|
|
-
|
|
155
|
|
-
|
|
As a
percent of sales
|
|
3.4%
|
|
0.0%
|
|
2.5%
|
|
0.0%
|
|
Adjusted
gross margin (non-GAAP)
|
|
$
1,106
|
|
$
1,497
|
|
$
2,345
|
|
$
3,092
|
|
As a
percent of sales
|
|
36.6%
|
|
38.3%
|
|
38.0%
|
|
39.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes second quarter 2012 markdowns
taken to clear discontinued inventory in preparation for new
product for shops and a first quarter 2012 markdown reserve taken
as a result of the Company's continuing efforts to reduce inventory
levels to align with its new strategy.
|
|
|
ADJUSTED OPERATING INCOME/(LOSS), NON-GAAP
FINANCIAL MEASURE
|
|
|
|
|
|
|
|
|
|
|
|
|
The
following table reconciles operating income/(loss), the most
directly comparable GAAP measure, to adjusted operating
income/(loss), non-GAAP financial measure:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Six
months ended
|
|
|
|
|
July
28,
|
|
July
30,
|
|
July
28,
|
|
July
30,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Operating
income/(loss)
|
|
$
(183)
|
|
$
81
|
|
$
(409)
|
|
$
242
|
|
As a
percent of sales
|
|
(6.1)%
|
|
2.1%
|
|
(6.6)%
|
|
3.1%
|
|
Add:
|
Markdowns
- inventory strategy alignment
|
|
102
|
|
-
|
|
155
|
|
-
|
|
Restructuring and management transition
charges
|
|
159
|
|
23
|
|
235
|
|
32
|
|
Qualified
pension plan expense
|
|
48
|
|
21
|
|
97
|
|
43
|
|
Less:
|
Redemption
of REIT units, net of fees
|
|
(200)
|
|
-
|
|
(200)
|
|
-
|
|
Adjusted
operating income/(loss) (non-GAAP)
|
|
$
(74)
|
|
$
125
|
|
$
(122)
|
|
$
317
|
|
As a
percent of sales
|
|
(2.4)%
|
|
3.2%
|
|
(2.0)%
|
|
4.0%
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures
|
|
|
|
(Unaudited)
|
|
|
|
(Amounts
in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
July
28,
|
|
July
30,
|
|
July
28,
|
|
July
30,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Net
income/(loss)
|
|
$
(147)
|
|
$
14
|
|
$
(310)
|
|
$
78
|
|
Earnings/(loss) per share - diluted
|
|
$
(0.67)
|
|
$
0.07
|
|
$
(1.42)
|
|
$
0.35
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
Markdowns
- inventory strategy alignment (net of tax of $39, $-, $60,
$-)
|
|
63
|
|
-
|
|
95
|
|
-
|
|
Restructuring and management transition charges (net
of tax of $61, $9, $91 and $12)
|
|
98
|
|
14
|
|
144
|
|
20
|
|
Qualified
pension plan expense (net of tax
|
|
|
|
|
|
|
|
|
|
of $19,
$8, $38 and $17)
|
|
29
|
|
13
|
|
59
|
|
26
|
|
Less:
|
Redemption
of REIT units, net of fees (net of tax of $(76), $-, $(76) and
$-)
|
|
(124)
|
|
-
|
|
(124)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
net income/loss (non-GAAP)
|
|
$
(81)
|
|
$
41
|
|
$
(136)
|
|
$
124
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
earnings/(loss) per share - diluted (non-GAAP)
|
$
(0.37)
|
|
$
0.19
|
|
$
(0.62)
|
|
$
0.55
|
|
FREE CASH FLOW, NON-GAAP
FINANCIAL MEASURE
|
|
|
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 and dividends paid, 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.
|
|
|
The following table
reconciles cash flow from operating activities, the most directly
comparable GAAP measure, to free cash flow, non-GAAP financial
measure:
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Six
months ended
|
|
|
|
July
28,
|
|
July
30,
|
|
July
28,
|
|
July
30,
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Net cash
provided by/(used in) operating activities
|
|
$
(32)
|
|
$
120
|
|
$
(609)
|
|
$
172
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(132)
|
|
(178)
|
|
(239)
|
|
(295)
|
|
Dividends
paid
|
|
(43)
|
|
(45)
|
|
(86)
|
|
(92)
|
|
Free cash
flow (non-GAAP)
|
|
$
(207)
|
|
$
(103)
|
|
$
(934)
|
|
$
(215)
|
SOURCE J. C. Penney Company, Inc.