Delivered Positive Sales Comps for the
Quarter and Year-to-Date Periods
PLANO, Texas - (Aug. 16,
2018) - J. C. Penney Company, Inc. (NYSE: JCP) today announced
financial results for its fiscal second quarter ended Aug. 4, 2018.
Comparable sales increased 0.3 % for the second quarter. Net
loss for the quarter was $101 million or ($0.32) per share.
"During the second quarter, we
delivered a positive sales comp of 0.3%. We had a strong start and
finish to the quarter, with both May and July comps delivering
ahead of our annual comp guidance range. Overall, we are confident
that our renewed focus on Women's is having a beneficial impact,
evidenced by the positive comp sales performance in Women's and
Children's apparel, both of which meaningfully out-performed our
total Q2 comp results," said Jeffrey Davis, chief financial
officer.
Davis continued, "This quarter we
adjusted our approach to inventory management from 'buying to store
capacity' to 'buying and chasing' into demonstrated sales
trends. Inventory receipts continued to outpace total sales
performance this quarter due to prior purchase commitments.
As such, we took necessary actions to markdown and clear excessive
inventory positions across many of our categories, which
encompasses more than just seasonal product or fashion
misses. We will continue to take actions to right-size our
inventory, better curate our assortment and most importantly,
provide a solid foundation that we can continue to build upon as we
move forward. Consequently, we are reducing our earnings
guidance for fiscal 2018."
For the second quarter ended Aug.
4, 2018, total net sales decreased 7.5 % to $2.76 billion compared
to $2.99 billion for the second quarter ended Jul. 29, 2017.
The decline in total net sales was primarily the result of the 141
stores that closed in fiscal 2017. Comparable sales increased
0.3 % for the second quarter. Credit income, which was
previously reflected as a reduction to SG&A, was $67 million
for the second quarter this year compared to $83 million in the
second quarter last year.
Children's, Jewelry, Sephora,
Women's Apparel and Salon were the Company's top performing
divisions and categories during the quarter. Geographically, the
Gulf Coast, Southeast and Northwest were the best performing
regions of the country.
Cost of goods sold, which excludes
depreciation and amortization, was $1.83 billion, or 66.3 % of
sales, for the second quarter this year compared to $1.93 billion,
or 64.7 % of sales in the same period last year. The increase as a
rate of sales was primarily driven by markdown and pricing actions
taken in the quarter to clear slow-moving seasonal inventory due to
lower than planned sales.
SG&A expenses for the second
quarter were $880 million, or 31.9 % of sales compared to $935
million, or 31.3 % of sales in the second quarter last year.
The dollar reduction to last year was primarily driven by lower
store expenses because of 141 stores that closed during fiscal
2017, corporate overhead and incentive compensation.
For the second quarter, the
Company's net loss was $101 million, or ($0.32) per share, compared
to a net loss of $48 million, or ($0.15) per share in the same
period last year.
Adjusted net loss was $120
million, or ($0.38) per share, for the second quarter this year
compared to an adjusted net loss of $23 million, or ($0.07) per
share, for the second quarter last year. Adjusted net loss
for the second quarter of 2018 and 2017 included gains on the sale
of operating assets, which totaled $40 million, or $0.13 per share,
and $1 million, or $0.00 per share, respectively; and $52 million,
or approximately ($0.16) per share, resulting from an impairment
charge in the second quarter this year related to the expected sale
of the Company's three corporate-owned aircraft. In addition,
second quarter adjusted net loss for 2018 and 2017 included the
following items:
- $2 million, or $0.01 per share,
this year related to restructuring and management transition
charges compared to $23 million, or $0.07 per share, last
year;
- $19 million, or ($0.06) per
share, this year related to other components of net periodic
pension income compared to $14 million, or ($0.05) per share, last
year;
- $35 million, or $0.11 per share,
last year related to the loss on extinguishment of debt; and
- $1 million, or ($0.00) per share
this year compared to $19 million, or ($0.06) per share, last year
related to the proportional share of net income from the home
office land joint venture.
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 second quarter were $182 million. Free cash flow
was ($235) million for the six months ended Aug 4, 2018, an
improvement of $186 million compared to the three months ended May
5, 2018.
The Company ended the quarter with
liquidity of approximately $2.2 billion.
Inventory at the end of the second
quarter was $2.82 billion, an increase of 0.1 % compared to the end
of the second quarter last year, and up 1.0 % on a comp store
basis.
CEO Search Update
"I want to take this opportunity
to update our stakeholders on the progress of the CEO search. The
process is going well and the Board has met with highly qualified
candidates who have expressed a strong desire to become the next
leader of JCPenney. The hiring of a new CEO is the top priority of
the Board of Directors and we will continue to expedite the process
in order to bring this search to a successful conclusion," said
Ronald W. Tysoe, JCPenney board chairman.
Outlook
The Company has revised its 2018
full year guidance as follows:
[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 now.
Second Quarter
Earnings Conference Call Details
At 8:30 a.m. ET today, the Company
will host a live conference call conducted by Chief Financial
Officer Jeffrey Davis 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 4296716 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 4296716
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
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, cost of goods sold, selling, general
and administrative expenses, earnings, cash flows and interest
expense. 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 |
|
|
Six Months
Ended |
|
Statements of Operations: |
August 4, 2018 |
|
July 29, 2017 |
|
% Inc. (Dec.) |
|
|
August 4, 2018 |
|
July 29, 2017 |
|
% Inc. (Dec.) |
|
Total net sales |
$ |
2,762 |
|
|
$ |
2,985 |
|
|
(7.5 |
)% |
|
|
$ |
5,346 |
|
|
$ |
5,686 |
|
|
(6.0 |
)% |
|
Credit
income and other |
67 |
|
|
83 |
|
|
(19.3 |
)% |
|
|
154 |
|
|
166 |
|
|
(7.2 |
)% |
|
Total revenues |
$ |
2,829 |
|
|
$ |
3,068 |
|
|
(7.8 |
)% |
|
|
$ |
5,500 |
|
|
$ |
5,852 |
|
|
(6.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses/(income): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of goods sold (exclusive of depreciation and amortization shown
separately below) |
1,831 |
|
|
1,932 |
|
|
(5.2 |
)% |
|
|
3,543 |
|
|
3,657 |
|
|
(3.1 |
)% |
|
Selling, general and administrative (SG&A) |
880 |
|
|
935 |
|
|
(5.9 |
)% |
|
|
1,706 |
|
|
1,873 |
|
|
(8.9 |
)% |
|
Depreciation and amortization |
140 |
|
|
144 |
|
|
(2.8 |
)% |
|
|
281 |
|
|
289 |
|
|
(2.8 |
)% |
|
Real estate and other, net |
12 |
|
|
(19 |
) |
|
(100.0 |
)% |
+ |
|
(6 |
) |
|
(137 |
) |
|
(95.6 |
)% |
|
Restructuring and management transition |
2 |
|
|
23 |
|
|
(91.3 |
)% |
|
|
9 |
|
|
123 |
|
|
(92.7 |
)% |
|
Total costs and expenses |
2,865 |
|
|
3,015 |
|
|
(5.0 |
)% |
|
|
5,533 |
|
|
5,805 |
|
|
(4.7 |
)% |
|
Operating income/(loss) |
(36 |
) |
|
53 |
|
|
(100.0 |
)% |
+ |
|
(33 |
) |
|
47 |
|
|
(100.0 |
)% |
+ |
Other components of net periodic pension
cost/(income) |
(19 |
) |
|
(14 |
) |
|
35.7 |
% |
|
|
(38 |
) |
|
92 |
|
|
100.0 |
% |
+ |
(Gain)/loss on extinguishment of debt |
- |
|
|
35 |
|
|
(100.0 |
)% |
|
|
23 |
|
|
35 |
|
|
(34.3 |
)% |
|
Net interest expense |
79 |
|
|
79 |
|
|
- |
% |
|
|
157 |
|
|
166 |
|
|
(5.4 |
)% |
|
Income/(loss) before income taxes |
(96 |
) |
|
(47 |
) |
|
(100.0 |
)% |
+ |
|
(175 |
) |
|
(246 |
) |
|
28.9 |
% |
|
Income tax expense/(benefit) |
5 |
|
|
1 |
|
|
100.0 |
% |
+ |
|
4 |
|
|
(11 |
) |
|
100.0 |
% |
+ |
Net
income/(loss) |
$ |
(101 |
) |
|
$ |
(48 |
) |
|
(100.0 |
)% |
+ |
|
$ |
(179 |
) |
|
$ |
(235 |
) |
|
23.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per share - basic and diluted |
$ |
(0.32 |
) |
|
$ |
(0.15 |
) |
|
(100.0 |
)% |
+ |
|
$ |
(0.57 |
) |
|
$ |
(0.76 |
) |
|
25.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable store sales increase/(decrease)
(1) |
0.3 |
% |
|
(1.3 |
)% |
|
|
|
|
0.2 |
% |
|
(2.4 |
)% |
|
|
|
Ratios
as a percentage of total net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
66.3 |
% |
|
64.7 |
% |
|
|
|
|
66.3 |
% |
|
64.3 |
% |
|
|
|
SG&A expenses |
31.9 |
% |
|
31.3 |
% |
|
|
|
|
31.9 |
% |
|
32.9 |
% |
|
|
|
Operating income/(loss) |
(1.3 |
)% |
|
1.8 |
% |
|
|
|
|
(0.6 |
)% |
|
0.8 |
% |
|
|
|
Effective income tax rate |
5.2 |
% |
|
2.1 |
% |
|
|
|
|
2.3 |
% |
|
(4.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Issued and outstanding shares at end of period |
314.8 |
|
|
310.3 |
|
|
|
|
|
314.8 |
|
|
310.3 |
|
|
|
|
Weighted average shares - basic |
315.7 |
|
|
310.8 |
|
|
|
|
|
314.8 |
|
|
310.2 |
|
|
|
|
Weighted average shares - diluted |
315.7 |
|
|
310.8 |
|
|
|
|
|
314.8 |
|
|
310.2 |
|
|
|
|
-
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: |
August 4, 2018 |
|
July 29, 2017 |
Current assets: |
|
|
|
Cash
in banks and in transit |
$ |
171 |
|
|
$ |
186 |
|
Cash short-term investments |
11 |
|
|
128 |
|
Cash
and cash equivalents |
182 |
|
|
314 |
|
Merchandise inventory |
2,824 |
|
|
2,820 |
|
Prepaid expenses and other |
221 |
|
|
223 |
|
Total current assets |
3,227 |
|
|
3,357 |
|
Property and equipment, net |
4,058 |
|
|
4,390 |
|
Prepaid pension |
87 |
|
|
- |
|
Other
assets |
686 |
|
|
622 |
|
Total assets |
$ |
8,058 |
|
|
$ |
8,369 |
|
|
|
|
|
Liabilities and stockholders'
equity |
|
|
|
Current liabilities: |
|
|
|
Merchandise accounts payable |
$ |
910 |
|
|
$ |
950 |
|
Other
accounts payable and accrued expenses |
1,025 |
|
|
1,121 |
|
Current portion of capital leases, financing
obligation and note payable |
7 |
|
|
9 |
|
Current maturities of long-term debt |
42 |
|
|
232 |
|
Total current liabilities |
1,984 |
|
|
2,312 |
|
Long-term capital leases, financing obligation and note
payable |
208 |
|
|
216 |
|
Long-term debt |
3,960 |
|
|
3,836 |
|
Deferred taxes |
144 |
|
|
202 |
|
Other liabilities |
546 |
|
|
635 |
|
Total liabilities |
6,842 |
|
|
7,201 |
|
Stockholders' equity |
1,216 |
|
|
1,168 |
|
Total liabilities and stockholders'
equity |
$ |
8,058 |
|
|
$ |
8,369 |
|
SUMMARY STATEMENTS
OF CASH FLOWS
(Unaudited)
(Amounts in millions)
|
Six Months
Ended |
Statements of Cash Flows: |
August 4, 2018 |
|
July 29, 2017 |
Cash flows from operating activities: |
|
|
|
Net income/(loss) |
$ |
(179 |
) |
|
$ |
(235 |
) |
Adjustments to reconcile net income/(loss) to net
cash provided by/(used in) operating activities: |
|
|
|
Restructuring and management transition |
(3 |
) |
|
73 |
|
Asset impairments and other charges |
52 |
|
|
3 |
|
Net
gain on sale of operating assets |
(57 |
) |
|
(118 |
) |
(Gain)/loss on extinguishment of debt |
23 |
|
|
35 |
|
Depreciation and amortization |
281 |
|
|
289 |
|
Benefit plans |
(37 |
) |
|
96 |
|
Stock-based compensation |
6 |
|
|
16 |
|
Deferred taxes |
(1 |
) |
|
(19 |
) |
Change
in cash from: |
|
|
|
Inventory |
(21 |
) |
|
76 |
|
Prepaid expenses and other assets |
(21 |
) |
|
(64 |
) |
Merchandise accounts payable |
(63 |
) |
|
(27 |
) |
Income
taxes |
- |
|
|
3 |
|
Accrued expenses and other |
(115 |
) |
|
(72 |
) |
Net
cash provided by/(used in) operating activities |
(135 |
) |
|
56 |
|
Cash flows from investing activities: |
|
|
|
Capital expenditures |
(221 |
) |
|
(192 |
) |
Proceeds from sale of operating assets |
121 |
|
|
146 |
|
Joint
venture return of investment |
- |
|
|
9 |
|
Net cash provided by/(used in) investing
activities |
(100 |
) |
|
(37 |
) |
Cash
flows from financing activities: |
|
|
|
Proceeds from issuance of long-term debt |
400 |
|
|
- |
|
Proceeds from borrowings under the credit facility |
2,258 |
|
|
272 |
|
Payments of borrowings under the credit
facility |
(2,081 |
) |
|
(272 |
) |
Premium on early retirement of long-term debt |
(20 |
) |
|
(30 |
) |
Payments of capital leases, financing obligation
and note payable |
(4 |
) |
|
(12 |
) |
Payments of long-term debt |
(586 |
) |
|
(541 |
) |
Financing costs |
(7 |
) |
|
(9 |
) |
Proceeds from stock issued under stock plans |
2 |
|
|
3 |
|
Tax withholding payments for vested restricted
stock |
(3 |
) |
|
(3 |
) |
Net
cash provided by/(used in) financing activities |
(41 |
) |
|
(592 |
) |
Net increase/(decrease) in cash and cash
equivalents |
(276 |
) |
|
(573 |
) |
Cash
and cash equivalents at beginning of period |
458 |
|
|
887 |
|
Cash and cash equivalents at end of period |
$ |
182 |
|
|
$ |
314 |
|
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.
Further, other components of net periodic pension cost/(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. 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 |
|
Six Months
Ended |
|
August 4, 2018 |
|
July 29, 2017 |
|
August 4, 2018 |
|
July 29, 2017 |
Net income/(loss) |
$ |
(101 |
) |
|
$ |
(48 |
) |
|
$ |
(179 |
) |
|
$ |
(235 |
) |
Add:
Net interest expense |
79 |
|
|
79 |
|
|
157 |
|
|
166 |
|
Add: (Gain)/loss on extinguishment of debt |
- |
|
|
35 |
|
|
23 |
|
|
35 |
|
Add:
Income tax expense/(benefit) |
5 |
|
|
1 |
|
|
4 |
|
|
(11 |
) |
Add: Depreciation and amortization |
140 |
|
|
144 |
|
|
281 |
|
|
289 |
|
Add:
Restructuring and management transition charges |
2 |
|
|
23 |
|
|
9 |
|
|
123 |
|
Add: Other components of net periodic pension
cost/(income) |
(19 |
) |
|
(14 |
) |
|
(38 |
) |
|
92 |
|
Less:
Proportional share of net income from the home office land joint
venture |
(1 |
) |
|
(19 |
) |
|
(1 |
) |
|
(20 |
) |
Adjusted EBITDA
(non-GAAP) |
$ |
105 |
|
|
$ |
201 |
|
|
$ |
256 |
|
|
$ |
439 |
|
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 4, 2018 |
|
July 29, 2017 |
|
August 4, 2018 |
|
July 29, 2017 |
Net income/(loss) |
$ |
(101 |
) |
|
$ |
(48 |
) |
|
$ |
(179 |
) |
|
$ |
(235 |
) |
Earnings/(loss) per share-diluted |
$ |
(0.32 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.57 |
) |
|
$ |
(0.76 |
) |
|
|
|
|
|
|
|
|
Add:
Restructuring and management transition charges (1) |
2 |
|
|
23 |
|
|
9 |
|
|
123 |
|
Add: Other components of net periodic pension
cost/(income) (1) |
(19 |
) |
|
(14 |
) |
|
(38 |
) |
|
92 |
|
Add:
(Gain)/loss on extinguishment of debt (1) |
- |
|
|
35 |
|
|
23 |
|
|
35 |
|
Less: Proportional share of net income from the
home office land joint venture (1) |
(1 |
) |
|
(19 |
) |
|
(1 |
) |
|
(20 |
) |
Less:
Tax impact resulting from other comprehensive income allocation
(2) |
(1 |
) |
|
- |
|
|
(3 |
) |
|
(16 |
) |
Adjusted net income/(loss)
(non-GAAP) |
$ |
(120 |
) |
|
$ |
(23 |
) |
|
$ |
(189 |
) |
|
$ |
(21 |
) |
Adjusted earnings/(loss) per share-diluted
(non-GAAP) |
$ |
(0.38 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.60 |
) |
|
$ |
(0.07 |
) |
-
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:
|
Six Months
Ended |
|
August 4, 2018 |
|
July 29, 2017 |
Net cash provided by/(used in) operating
activities |
$ |
(135 |
) |
|
$ |
56 |
|
Add: Proceeds from sale of operating assets |
121 |
|
|
146 |
|
Less: Capital expenditures |
(221 |
) |
|
(192 |
) |
Free cash flow (non-GAAP) |
$ |
(235 |
) |
|
$ |
10 |
|
|
|
|
|
Net
cash provided by/(used in) investing activities (1) |
$ |
(100 |
) |
|
$ |
(37 |
) |
Net cash provided by/(used in) financing
activities |
$ |
(41 |
) |
|
$ |
(592 |
) |
(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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