J. C. Penney Company, Inc. (NYSE: JCP) today announced financial
results for its fiscal third quarter ended Nov. 3, 2018. Comparable
sales decreased 5.4 % for the third quarter. Net loss for the
quarter was $151 million or ($0.48) per share.
Jill Soltau, chief executive officer, said, “I
am excited to be at JCPenney, and having been in the office for a
month now, I am encouraged by the many opportunities I see. Our
objective to put JCPenney back on a path to profitable growth is
clear. In the coming weeks and months, I will continue to
meet with and learn from our teams throughout the entire
organization – talking with them about what we’re doing that’s
working well and, most importantly, what we can do to address our
opportunities.”
Soltau continued, “In spite of our overall sales
results, I am encouraged by the recent underlying trends in key
businesses such as women’s apparel, active, special sizes and fine
jewelry. We are making progress and taking the necessary
steps to right-size our inventory positions to better support the
brands and categories that are demonstrating profitable sales
growth. While restoring JCPenney to sustained profitable
growth will be a lengthy process, I understand the need for quick
action. My commitment is that we will make sound, strategic
decisions backed by data, and will always be rooted in delivering
on our customers’ wants and expectations. We will act swiftly but
thoughtfully as we move the business forward. While these
things take time, the results we are reporting today only
strengthen our sense of urgency and purpose.”
For the third quarter ended Nov. 3, 2018, total
net sales decreased 5.8 % to $2.65 billion compared to $2.82
billion for the third quarter ended Oct. 28, 2017. Comparable
sales decreased 5.4 % for the third quarter on an unshifted basis.
Reflecting the calendar shift in 2018 due to the 53rd week in 2017,
comparable sales decreased 4.5 %. Credit income, which was
previously reflected as a reduction to SG&A, was $80 million
for the third quarter this year compared to $69 million in the
third quarter last year.
Jewelry, Women’s Apparel and Men’s were the
Company’s top performing divisions during the quarter.
Cost of goods sold, which excludes depreciation
and amortization, was $1.81 billion, or 68.1 % of sales, for the
third quarter this year compared to $1.86 billion, or 66.0 % of
sales in the same period last year. The increase as a rate of sales
was primarily driven by planned markdown and pricing actions taken
in the quarter to clear slow-moving and excess inventory.
SG&A expenses for the third quarter were
$883 million, or 33.3 % of sales compared to $920 million, or 32.7
% of sales in the third quarter last year. The dollar
reduction to last year was primarily driven by lower corporate
overhead and incentive compensation.
For the third quarter, the Company’s net loss
was $151 million, or ($0.48) per share, compared to a net loss of
$125 million, or ($0.40) per share in the same period last
year.
Adjusted net loss was $164 million, or ($0.52)
per share, for the third quarter this year compared to an adjusted
net loss of $108 million, or ($0.35) per share, for the third
quarter last year.
A reconciliation of GAAP to non-GAAP financial
measures is included in the schedules accompanying the consolidated
financial statements in this release.
Cash and cash equivalents at the end of the
third quarter were $168 million. Inventory at the end of the
third quarter was $3.22 billion, down 5.4 % compared to the end of
the third quarter last year.
The Company ended the quarter with liquidity in
excess of $1.9 billion.
Guidance Update
Given the Company has recently announced both a
new CEO and an interim CFO and to allow the ability to effectively
assess and address current and go-forward execution of the
business, the Company believes it is appropriate to withdraw its
previous 2018 full year earnings guidance and update its previous
full year comparable store sales guidance. Comparable store
sales for fiscal 2018 are now expected to be down low-single
digits. The Company continues to expect to achieve positive
free cash flow for the year.
Third Quarter Earnings Conference Call
Details
At 8:30 a.m. ET today, the Company will host a
live conference call conducted by Chief Executive Officer Jill
Soltau and select members of management. 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 9959597 conference ID or visit the Company’s
investor relations website at https://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 9959597 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@jcp.com
About JCPenney:J. C. Penney
Company, Inc. (NYSE: JCP), one of the nation’s largest apparel and
home retailers, combines an expansive footprint of over 860 stores
across the United States and Puerto Rico with a powerful e-commerce
site, jcp.com, to deliver style and value for all hard-working
American families. At every touchpoint, customers will discover
stylish merchandise at incredible value from an extensive portfolio
of private, exclusive and national brands. Reinforcing this
shopping experience is the customer service and warrior spirit of
approximately 98,000 associates across the globe, all driving
toward the Company's mission to help customers find what they love
for less time, money and effort. For additional information, please
visit jcp.com.
Forward-Looking StatementsThis
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, cost of goods sold, 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
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, 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: |
November 3, 2018 |
|
October 28, 2017 |
|
% Inc. (Dec.) |
|
|
November 3, 2018 |
|
October 28, 2017 |
|
% Inc. (Dec.) |
|
Total net sales |
$ |
2,653 |
|
|
$ |
2,817 |
|
|
(5.8 |
)% |
|
|
$ |
7,999 |
|
|
$ |
8,503 |
|
|
(5.9 |
)% |
|
Credit income and
other |
80 |
|
|
69 |
|
|
15.9 |
% |
|
|
234 |
|
|
235 |
|
|
(0.4 |
)% |
|
Total
revenues |
$ |
2,733 |
|
|
$ |
2,886 |
|
|
(5.3 |
)% |
|
|
$ |
8,233 |
|
|
$ |
8,738 |
|
|
(5.8 |
)% |
|
Costs and
expenses/(income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold (exclusive of depreciation and amortization shown
separately below) |
1,808 |
|
|
1,859 |
|
|
(2.7 |
)% |
|
|
5,351 |
|
|
5,516 |
|
|
(3.0 |
)% |
|
Selling,
general and administrative (SG&A) |
883 |
|
|
920 |
|
|
(4.0 |
)% |
|
|
2,589 |
|
|
2,793 |
|
|
(7.3 |
)% |
|
Depreciation and amortization |
138 |
|
|
131 |
|
|
5.3 |
% |
|
|
419 |
|
|
420 |
|
|
(0.2 |
)% |
|
Real
estate and other, net |
(7 |
) |
|
2 |
|
|
(100.0 |
)% + |
|
|
(13 |
) |
|
(135 |
) |
|
(90.4 |
)% |
|
Restructuring and management transition |
11 |
|
|
52 |
|
|
(78.8 |
)% |
|
|
20 |
|
|
175 |
|
|
(88.6 |
)% |
|
Total
costs and expenses |
2,833 |
|
|
2,964 |
|
|
(4.4 |
)% |
|
|
8,366 |
|
|
8,769 |
|
|
(4.6 |
)% |
|
Operating
income/(loss) |
(100 |
) |
|
(78 |
) |
|
(28.2 |
)% |
|
|
(133 |
) |
|
(31 |
) |
|
(100.0 |
)%
+ |
|
Other
components of net periodic pension cost/(income) |
(19 |
) |
|
(2 |
) |
|
100.0 |
% + |
|
|
(57 |
) |
|
90 |
|
|
100.0 |
% + |
|
(Gain)/loss on extinguishment of debt |
— |
|
|
— |
|
|
— |
% |
|
|
23 |
|
|
35 |
|
|
(34.3 |
)% |
|
Net
interest expense |
78 |
|
|
78 |
|
|
— |
% |
|
|
235 |
|
|
244 |
|
|
(3.7 |
)% |
|
Income/(loss) before income taxes |
(159 |
) |
|
(154 |
) |
|
(3.2 |
)% |
|
|
(334 |
) |
|
(400 |
) |
|
16.5 |
% |
|
Income tax
expense/(benefit) |
(8 |
) |
|
(29 |
) |
|
(72.4 |
)% |
|
|
(4 |
) |
|
(40 |
) |
|
(90.0 |
)% |
|
Net
income/(loss) |
$ |
(151 |
) |
|
$ |
(125 |
) |
|
(20.8 |
)% |
|
|
$ |
(330 |
) |
|
$ |
(360 |
) |
|
8.3 |
% |
|
Earnings/(loss) per
share - basic and diluted |
$ |
(0.48 |
) |
|
$ |
(0.40 |
) |
|
(20.0 |
)% |
|
|
$ |
(1.05 |
) |
|
$ |
(1.16 |
) |
|
9.5 |
% |
|
Financial
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales
increase/(decrease) (1) |
(5.4 |
)% |
|
1.7 |
% |
|
|
|
|
(1.7 |
)% |
|
(1.0 |
)% |
|
|
|
Ratios as a percentage
of total net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
68.1 |
% |
|
66.0 |
% |
|
|
|
|
66.9 |
% |
|
64.9 |
% |
|
|
|
SG&A
expenses |
33.3 |
% |
|
32.7 |
% |
|
|
|
|
32.4 |
% |
|
32.8 |
% |
|
|
|
Operating
income/(loss) |
(3.8 |
)% |
|
(2.8 |
)% |
|
|
|
|
(1.7 |
)% |
|
(0.4 |
)% |
|
|
|
Effective income tax
rate |
(5.0 |
)% |
|
(18.8 |
)% |
|
|
|
|
(1.2 |
)% |
|
(10.0 |
)% |
|
|
|
Common Shares
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and outstanding
shares at end of period |
315.4 |
|
|
311.1 |
|
|
|
|
|
315.4 |
|
|
311.1 |
|
|
|
|
Weighted average shares
- basic |
316.3 |
|
|
311.6 |
|
|
|
|
|
315.3 |
|
|
310.6 |
|
|
|
|
Weighted average shares
- diluted |
316.3 |
|
|
311.6 |
|
|
|
|
|
315.3 |
|
|
310.6 |
|
|
|
|
- Comparable store sales include sales from all stores,
including sales from services, 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: |
November 3, 2018 |
|
October 28, 2017 |
Current assets: |
|
|
|
Cash in
banks and in transit |
$ |
157 |
|
|
$ |
175 |
|
Cash
short-term investments |
11 |
|
|
10 |
|
Cash and
cash equivalents |
168 |
|
|
185 |
|
Merchandise inventory |
3,223 |
|
|
3,406 |
|
Prepaid
expenses and other |
224 |
|
|
243 |
|
Total
current assets |
3,615 |
|
|
3,834 |
|
Property and equipment,
net |
4,005 |
|
|
4,316 |
|
Prepaid pension |
100 |
|
|
3 |
|
Other assets |
695 |
|
|
632 |
|
Total
assets |
$ |
8,415 |
|
|
$ |
8,785 |
|
|
|
|
|
Liabilities and
stockholders' equity |
|
|
|
Current
liabilities: |
|
|
|
Merchandise accounts payable |
$ |
1,234 |
|
|
$ |
1,342 |
|
Other
accounts payable and accrued expenses |
960 |
|
|
1,081 |
|
Current
portion of capital leases, financing obligation and note
payable |
8 |
|
|
8 |
|
Current
maturities of long-term debt |
92 |
|
|
232 |
|
Total
current liabilities |
2,294 |
|
|
2,663 |
|
Long-term capital
leases, financing obligation and note payable |
206 |
|
|
214 |
|
Long-term debt |
4,161 |
|
|
4,039 |
|
Deferred taxes |
138 |
|
|
201 |
|
Other liabilities |
542 |
|
|
574 |
|
Total
liabilities |
7,341 |
|
|
7,691 |
|
Stockholders'
equity |
1,074 |
|
|
1,094 |
|
Total
liabilities and stockholders' equity |
$ |
8,415 |
|
|
$ |
8,785 |
|
SUMMARY STATEMENTS OF CASH
FLOWS(Unaudited)(Amounts in millions)
|
Nine Months Ended |
Statements of
Cash Flows: |
November 3, 2018 |
|
October 28, 2017 |
Cash flows from
operating activities: |
|
|
|
Net
income/(loss) |
$ |
(330 |
) |
|
$ |
(360 |
) |
Adjustments to reconcile net income/(loss) to net cash provided
by/(used in) operating activities: |
|
|
|
Restructuring and management transition |
(3 |
) |
|
72 |
|
Asset
impairments and other charges |
53 |
|
|
7 |
|
Net gain
on sale of operating assets |
(58 |
) |
|
(119 |
) |
(Gain)/loss on extinguishment of debt |
23 |
|
|
35 |
|
Depreciation and amortization |
419 |
|
|
420 |
|
Benefit
plans |
(56 |
) |
|
95 |
|
Stock-based compensation |
9 |
|
|
23 |
|
Deferred
taxes |
(9 |
) |
|
(49 |
) |
Change in
cash from: |
|
|
|
Inventory |
(420 |
) |
|
(510 |
) |
Prepaid
expenses and other assets |
(37 |
) |
|
(66 |
) |
Merchandise accounts payable |
261 |
|
|
365 |
|
Income
taxes |
(2 |
) |
|
3 |
|
Accrued
expenses and other |
(161 |
) |
|
(99 |
) |
Net cash
provided by/(used in) operating activities |
(311 |
) |
|
(183 |
) |
Cash flows from
investing activities: |
|
|
|
Capital
expenditures |
(321 |
) |
|
(287 |
) |
Proceeds
from sale of operating assets |
132 |
|
|
153 |
|
Joint
venture return of investment |
3 |
|
|
9 |
|
Insurance
proceeds received for damage to property and equipment |
1 |
|
|
— |
|
Net cash
provided by/(used in) investing activities |
(185 |
) |
|
(125 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds
from issuance of long-term debt |
400 |
|
|
— |
|
Proceeds
from borrowings under the credit facility |
3,466 |
|
|
521 |
|
Payments
of borrowings under the credit facility |
(3,029 |
) |
|
(310 |
) |
Premium
on early retirement of long-term debt |
(20 |
) |
|
(30 |
) |
Payments
of capital leases, financing obligation and note payable |
(6 |
) |
|
(14 |
) |
Payments
of long-term debt |
(597 |
) |
|
(552 |
) |
Financing
costs |
(7 |
) |
|
(9 |
) |
Proceeds
from stock issued under stock plans |
2 |
|
|
4 |
|
Tax
withholding payments for vested restricted stock |
(3 |
) |
|
(4 |
) |
Net cash
provided by/(used in) financing activities |
206 |
|
|
(394 |
) |
Net increase/(decrease)
in cash and cash equivalents |
(290 |
) |
|
(702 |
) |
Cash and cash
equivalents at beginning of period |
458 |
|
|
887 |
|
Cash and cash
equivalents at end of period |
$ |
168 |
|
|
$ |
185 |
|
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, other
components of net periodic pension cost/(income), the (gain)/loss
on extinguishment of debt, 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 pension
plans and interest rate swaps. Unlike other operating
expenses, restructuring and management transition charges, other
components of net periodic pension cost/(income), the (gain)/loss
on extinguishment of debt, 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 pension plans and interest rate swaps are not
directly related to our ongoing core business operations, which
consist of selling merchandise and services to consumers through
our department stores and our website at jcpenney.com.
Further, our non-GAAP adjustments are for non-operating associated
activities such as closed store impairments included in
restructuring and management transition charges and such as joint
venture earnings from the sale of excess land included in the
proportional share of net income from our Home Office Land Joint
Venture. Additionally, other components of net periodic
pension cost/(income) which 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. We believe it is useful for investors to
understand the impact of restructuring and management transition
charges, other components of net periodic pension cost/(income),
the (gain)/loss on extinguishment of debt, 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 pension plans 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 (benefit)/expense and
depreciation and amortization (adjusted EBITDA); (2) adjusted
net income/(loss); and (3) adjusted earnings/(loss) per
share-diluted.
ADJUSTED EBITDA, NON-GAAP FINANCIAL
MEASURE:
The following table reconciles net income/(loss), the most
directly comparable GAAP measure, to adjusted EBITDA, a non-GAAP
financial measure:
|
Three Months Ended |
|
Nine Months Ended |
|
November 3, 2018 |
|
October 28, 2017 |
|
November 3, 2018 |
|
October 28, 2017 |
Net income/(loss) |
$ |
(151 |
) |
|
$ |
(125 |
) |
|
$ |
(330 |
) |
|
$ |
(360 |
) |
Add: Net interest
expense |
78 |
|
|
78 |
|
|
235 |
|
|
244 |
|
Add: (Gain)/loss
on extinguishment of debt |
— |
|
|
— |
|
|
23 |
|
|
35 |
|
Add: Income tax
expense/(benefit) |
(8 |
) |
|
(29 |
) |
|
(4 |
) |
|
(40 |
) |
Add: Depreciation
and amortization |
138 |
|
|
131 |
|
|
419 |
|
|
420 |
|
Add:
Restructuring and management transition charges |
11 |
|
|
52 |
|
|
20 |
|
|
175 |
|
Add: Other
components of net periodic pension cost/(income) |
(19 |
) |
|
(2 |
) |
|
(57 |
) |
|
90 |
|
Less:
Proportional share of net income from the home office land joint
venture |
(3 |
) |
|
(3 |
) |
|
(4 |
) |
|
(23 |
) |
Adjusted
EBITDA (non-GAAP) |
$ |
46 |
|
|
$ |
102 |
|
|
$ |
302 |
|
|
$ |
541 |
|
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 |
|
November 3, 2018 |
|
October 28, 2017 |
|
November 3, 2018 |
|
October 28, 2017 |
Net income/(loss) |
$ |
(151 |
) |
|
$ |
(125 |
) |
|
$ |
(330 |
) |
|
$ |
(360 |
) |
Earnings/(loss) per
share-diluted |
$ |
(0.48 |
) |
|
$ |
(0.40 |
) |
|
$ |
(1.05 |
) |
|
$ |
(1.16 |
) |
|
|
|
|
|
|
|
|
Add:
Restructuring and management transition charges (1) |
11 |
|
|
52 |
|
|
20 |
|
|
175 |
|
Add: Other
components of net periodic pension cost/(income) (1) |
(19 |
) |
|
(2 |
) |
|
(57 |
) |
|
90 |
|
Add: (Gain)/loss
on extinguishment of debt (1) |
— |
|
|
— |
|
|
23 |
|
|
35 |
|
Less:
Proportional share of net income from the home office land joint
venture (1) |
(3 |
) |
|
(3 |
) |
|
(4 |
) |
|
(23 |
) |
Less: Tax impact
resulting from other comprehensive income allocation (2) |
(2 |
) |
|
(30 |
) |
|
(5 |
) |
|
(46 |
) |
Adjusted net
income/(loss) (non-GAAP) |
$ |
(164 |
) |
|
$ |
(108 |
) |
|
$ |
(353 |
) |
|
$ |
(129 |
) |
Adjusted
earnings/(loss) per share-diluted (non-GAAP) |
$ |
(0.52 |
) |
|
$ |
(0.35 |
) |
|
$ |
(1.12 |
) |
|
$ |
(0.42 |
) |
- Reflects no tax effect due to the impact of the Company's tax
valuation allowance.
- Represents the net tax benefit that resulted from our other
comprehensive income allocation between our Operating loss and
Accumulated other comprehensive income.
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, payments made for
business acquisitions or required pension contributions, if
any. 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:
|
Nine Months Ended |
|
November 3, 2018 |
|
October 28, 2017 |
Net cash provided
by/(used in) operating activities |
$ |
(311 |
) |
|
$ |
(183 |
) |
Add: Proceeds from sale of operating assets |
132 |
|
|
153 |
|
Less: Capital expenditures |
(321 |
) |
|
(287 |
) |
Free cash flow
(non-GAAP) |
$ |
(500 |
) |
|
$ |
(317 |
) |
|
|
|
|
Net cash provided
by/(used in) investing activities (1) |
$ |
(185 |
) |
|
$ |
(125 |
) |
Net cash provided
by/(used in) financing activities |
$ |
206 |
|
|
$ |
(394 |
) |
(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.
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