Delaware
|
26-0037077
|
(State
or other jurisdiction of
|
(I.R.S.
Employer
|
incorporation
or organization)
|
Identification
No.)
|
|
|
|
Page
|
|||||||
Part I.
|
|
Financial
Information
|
|
|||||||
|
Item
1.
|
|
Unaudited
Financial Statements
|
|
||||||
|
|
Consolidated Statements of Operations |
|
1
|
||||||
|
|
Consolidated Balance Sheets |
2
|
|||||||
|
|
Consolidated Statements of Cash Flows |
|
3
|
||||||
|
|
Notes to the Unaudited Interim Consolidated Financial Statements |
|
4
|
||||||
|
|
|
15
|
|||||||
|
|
|
24
|
|||||||
|
|
|
24
|
|||||||
Part II.
|
|
Other
Information
|
|
|||||||
|
|
|
25
|
|||||||
25
|
||||||||||
|
|
|
26
|
|||||||
|
27
|
|||||||||
|
($
in millions, except per share data)
|
13
weeks ended
|
26
weeks ended
|
|
||||||||||||||
Aug.
2,
|
Aug.
4,
|
Aug. 2,
|
Aug. 4,
|
||||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||||||
Total
net sales
|
$ | 4,282 | $ | 4,391 | $ | 8,409 | $ | 8,741 | |||||||||
Cost
of goods sold
|
2,676 | 2,717 | 5,153 | 5,260 | |||||||||||||
Gross
margin
|
1,606 | 1,674 | 3,256 | 3,481 | |||||||||||||
Operating
expenses:
|
|||||||||||||||||
Selling,
general and administrative (SG&A)
|
1,248 | 1,243 | 2,543 | 2,534 | |||||||||||||
Depreciation
and amortization
|
115 | 100 | 225 | 200 | |||||||||||||
Pre-opening
|
9 | 15 | 15 | 21 | |||||||||||||
Real
estate and other (income), net
|
(9 | ) | (13 | ) | (18 | ) | (22 | ) | |||||||||
Total
operating expenses
|
1,363 | 1,345 | 2,765 | 2,733 | |||||||||||||
Operating
income
|
243 | 329 | 491 | 748 | |||||||||||||
Net
interest expense
|
55 | 37 | 108 | 69 | |||||||||||||
Bond
premiums and unamortized costs
|
- | 12 | - | 12 | |||||||||||||
Income
from continuing operations before income taxes
|
188 | 280 | 383 | 667 | |||||||||||||
Income
tax expense
|
72 | 105 | 147 | 254 | |||||||||||||
Income
from continuing operations
|
$ | 116 | $ | 175 | $ | 236 | $ | 413 | |||||||||
Income from
discontinued operations, net of income tax (benefit)/expense of $(1), $4,
$(1) and $4
|
1 | 7 | 1 | 7 | |||||||||||||
Net
income
|
$ | 117 | $ | 182 | $ | 237 | $ | 420 | |||||||||
Basic
earnings per share:
|
|||||||||||||||||
Continuing
operations
|
$ | 0.52 | $ | 0.79 | $ | 1.06 | $ | 1.84 | |||||||||
Discontinued
operations
|
- | 0.03 | - | 0.03 | |||||||||||||
Net
income
|
$ | 0.52 | $ | 0.82 | $ | 1.06 | $ | 1.87 | |||||||||
Diluted
earnings per share:
|
|||||||||||||||||
Continuing
operations
|
$ | 0.52 | $ | 0.78 | $ | 1.06 | $ | 1.82 | |||||||||
Discontinued
operations
|
- | 0.03 | - | 0.03 | |||||||||||||
Net
income
|
$ | 0.52 | $ | 0.81 | $ | 1.06 | $ | 1.85 | |||||||||
($
in millions)
|
Aug.
2,
|
Aug.
4,
|
Feb. 2,
|
|||||||||
2008
|
2007
|
2008
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(1)
|
||||||||||
Assets
|
||||||||||||
Current
assets
|
||||||||||||
Cash
and short-term investments
|
$ | 2,109 | $ | 2,180 | $ | 2,471 | ||||||
Receivables
|
500 | 624 | 430 | |||||||||
Merchandise
inventory (net of LIFO reserves
|
||||||||||||
of
$1, $8 and $1)
|
3,693 | 3,649 | 3,641 | |||||||||
Prepaid
expenses
|
217 | 230 | 209 | |||||||||
Total
current assets
|
6,519 | 6,683 | 6,751 | |||||||||
Property
and equipment (net of accumulated
|
||||||||||||
depreciation
of $2,378, $2,267 and $2,219)
|
5,161 | 4,570 | 4,959 | |||||||||
Prepaid
pension
|
1,582 | 1,284 | 2,030 | |||||||||
Other
assets
|
534 | 542 | 569 | |||||||||
Total
Assets
|
$ | 13,796 | $ | 13,079 | $ | 14,309 | ||||||
Liabilities
and Stockholders’ Equity
|
||||||||||||
Current
liabilities
|
||||||||||||
Trade
payables
|
$ | 1,477 | $ | 1,635 | $ | 1,472 | ||||||
Accrued
expenses and other current liabilities
|
1,469 | 1,492 | 1,663 | |||||||||
Current
maturities of long-term debt
|
201 | 105 | 203 | |||||||||
Total
current liabilities
|
3,147 | 3,232 | 3,338 | |||||||||
Long-term
debt
|
3,505 | 3,705 | 3,505 | |||||||||
Deferred
taxes
|
1,283 | 1,100 | 1,463 | |||||||||
Other
liabilities
|
710 | 800 | 691 | |||||||||
Total
Liabilities
|
8,645 | 8,837 | 8,997 | |||||||||
Stockholders'
Equity
|
||||||||||||
Common
stock
(2)
|
111 | 111 | 111 | |||||||||
Additional
paid-in-capital
|
3,476 | 3,431 | 3,453 | |||||||||
Reinvested
earnings at beginning of year
|
1,540 | 922 | 922 | |||||||||
SFAS
158–change in measurement date
(3)
|
26 | - | - | |||||||||
Adjustment
to initially apply FIN 48
|
- | 5 | 5 | |||||||||
Net
income
|
237 | 420 | 1,111 | |||||||||
Dividends
declared
|
(90 | ) | (90 | ) | (178 | ) | ||||||
Retirement
of common stock
|
- | (320 | ) | (320 | ) | |||||||
Reinvested
earnings at end of period
|
1,713 | 937 | 1,540 | |||||||||
Accumulated
other comprehensive (loss)/income
|
(149 | ) | (237 | ) | 208 | |||||||
Total
Stockholders’ Equity
|
5,151 | 4,242 | 5,312 | |||||||||
Total
Liabilities and Stockholders’ Equity
|
$ | 13,796 | $ | 13,079 | $ | 14,309 |
($
in millions)
|
26
weeks ended
|
|||||||
Aug.
2,
|
Aug.
4,
|
|||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 237 | $ | 420 | ||||
(Income)
from discontinued operations
|
(1 | ) | (7 | ) | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Asset
impairments, PVOL and other unit closing costs
|
8 | 3 | ||||||
Depreciation
and amortization
|
225 | 200 | ||||||
Net
(gains) on sale of assets
|
- | (6 | ) | |||||
Benefit
plans (income)
|
(58 | ) | (34 | ) | ||||
Stock-based
compensation
|
24 | 28 | ||||||
Tax
benefits from stock-based compensation
|
9 | 15 | ||||||
Deferred
taxes
|
34 | 13 | ||||||
Change
in cash from:
|
||||||||
Receivables
|
(46 | ) | (61 | ) | ||||
Inventory
|
(52 | ) | (250 | ) | ||||
Prepaid
expenses and other assets
|
6 | 13 | ||||||
Trade
payables
|
5 | 268 | ||||||
Current
income taxes payable
|
(37 | ) | (223 | ) | ||||
Accrued
expenses and other
|
(84 | ) | (190 | ) | ||||
Net
cash provided by operating activities
|
270 | 189 | ||||||
Cash
flows from investing activities:
|
||||||||
Capital
expenditures
|
(496 | ) | (598 | ) | ||||
Proceeds
from sales of assets
|
- | 8 | ||||||
Net
cash (used in) investing activities
|
(496 | ) | (590 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from issuance of long-term debt
|
- | 980 | ||||||
Premium
on early retirement of debt
|
- | (9 | ) | |||||
Payments
of long-term debt, including capital leases
|
(2 | ) | (633 | ) | ||||
Common
stock repurchased
|
- | (400 | ) | |||||
Dividends
paid, common
|
(134 | ) | (130 | ) | ||||
Proceeds
from stock options exercised
|
4 | 41 | ||||||
Excess
tax benefits from stock-based compensation
|
1 | 20 | ||||||
Tax
withholding payments reimbursed by restricted stock
|
(4 | ) | (8 | ) | ||||
Net
cash (used in) financing activities
|
(135 | ) | (139 | ) | ||||
Cash
flows from discontinued operations
|
||||||||
Operating
cash flows
|
- | (2 | ) | |||||
Investing
cash flows
|
(1 | ) | (25 | ) | ||||
Financing
cash flows
|
- | - | ||||||
Total
cash (paid for) discontinued operations
|
(1 | ) | (27 | ) | ||||
Net
(decrease) in cash and short-term investments
|
(362 | ) | (567 | ) | ||||
Cash
and short-term investments at beginning of year
|
2,471 | 2,747 | ||||||
Cash
and short-term investments at end of period
|
$ | 2,109 | $ | 2,180 |
(in
millions, except per share data)
|
13
weeks ended
|
26
weeks ended
|
||||||||||||||
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Earnings:
|
||||||||||||||||
Income
from continuing operations, basic and diluted
|
$ | 116 | $ | 175 | $ | 236 | $ | 413 | ||||||||
Shares:
|
||||||||||||||||
Average
common shares outstanding (basic shares)
|
222 | 223 | 222 | 224 | ||||||||||||
Adjustment
for assumed dilution:
|
||||||||||||||||
Stock
options and restricted stock awards
|
1 | 2 | 1 | 3 | ||||||||||||
Average
shares assuming dilution (diluted shares)
|
223 | 225 | 223 | 227 | ||||||||||||
EPS
from continuing operations:
|
||||||||||||||||
Basic
|
$ | 0.52 | $ | 0.79 | $ | 1.06 | $ | 1.84 | ||||||||
Diluted
|
$ | 0.52 | $ | 0.78 | $ | 1.06 | $ | 1.82 |
(shares
in millions)
|
13
weeks ended
|
26
weeks ended
|
||||||||
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
|||||||
2008
|
2007
|
2008
|
2007
|
|||||||
Stock
options and restricted awards
|
8
|
1
|
8
|
1
|
($ in
millions)
|
Assets
at Fair Value as of Aug. 2, 2008
|
||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
||||||||||
Total
REIT assets
|
$
|
232
|
$
|
-
|
$
|
-
|
$
|
232
|
($
in millions)
|
Aug.
2,
|
Aug.
4,
|
Feb.
2,
|
|||||||||
2008
|
2007
|
2008
|
||||||||||
Cash
|
$ | 133 | $ | 146 | $ | 119 | ||||||
Short-term
investments
|
1,976 | 2,034 | 2,352 | |||||||||
Total
cash and short-term investments
|
$ | 2,109 | $ | 2,180 | $ | 2,471 |
($
in millions)
|
26
weeks ended
|
|||||||
Aug.
2,
|
Aug.
4,
|
|||||||
2008
|
2007
|
|||||||
Interest
paid by continuing operations
|
$ | 137 | $ | 147 | ||||
Interest
received by continuing operations
|
$ | 25 | $ | 67 | ||||
Total
income taxes paid
|
$ | 140 | $ | 430 | ||||
Less:
income taxes (received) attributable to discontinued
operations
|
- | (1 | ) | |||||
Income
taxes paid by continuing operations
|
$ | 140 | $ | 431 |
($
in millions)
|
Aug.
2,
|
Aug.
4,
|
Feb.
2,
|
|||||||||
2008
|
2007
|
2008
|
||||||||||
Receivables
|
$ | 500 | $ | 624 | $ | 430 |
Accumulated
Other Comprehensive Income/(Loss)
|
|||||||||||||
($ in millions)
|
Unrealized
Gain/(Loss) in REITs
|
Net
actuarial gain/(loss) and prior service credit/(cost) for pension and
post- retirement plans
|
Total
|
Total
Comprehensive Income
|
|||||||||
Second Quarter 2008
|
|||||||||||||
May
3, 2008
|
$
|
126
|
$
|
(250
|
)
|
$
|
(124
|
)
|
|||||
Net
unrealized (loss) in REITs
|
(25
|
)
|
-
|
(25
|
)
|
$
|
(25
|
)
|
|||||
Net
income
|
-
|
-
|
-
|
117
|
|||||||||
August
2, 2008
|
$
|
101
|
$
|
(250
|
)
|
$
|
(149
|
)
|
$
|
92
|
|||
Second Quarter 2007
|
|||||||||||||
May
5, 2007
|
$
|
159
|
$
|
(342
|
)
|
$
|
(183
|
)
|
|||||
Net
unrealized (loss) in REITs
|
(54
|
)
|
-
|
(54
|
)
|
$
|
(54
|
)
|
|||||
Net
income
|
-
|
-
|
-
|
182
|
|||||||||
August
4, 2007
|
$
|
105
|
$
|
(342
|
)
|
$
|
(237
|
)
|
$
|
128
|
First Half 2008
|
|||||||||||||
February
2, 2008
|
$
|
115
|
(1)
|
$
|
93
|
(2)
|
$
|
208
|
|||||
SFAS
158 - change in measurement date
|
-
|
(343)
|
|
(343
|
)
|
||||||||
Adjusted
balances – February 3, 2008
|
115
|
(250)
|
|
(135
|
)
|
||||||||
Net
unrealized (loss) in REITs
|
(14
|
)
|
-
|
(14
|
)
|
$
|
(14
|
)
|
|||||
Net
income
|
-
|
-
|
-
|
237
|
|||||||||
August
2, 2008
|
$
|
101
|
(1)
|
$
|
(250)
|
(2)
|
$
|
(149
|
)
|
$
|
223
|
||
First Half 2007
|
|||||||||||||
February
3, 2007
|
$
|
166
|
$
|
(342)
|
|
$
|
(176
|
)
|
|||||
Net
unrealized (loss) in REITs
|
(61
|
)
|
-
|
(61
|
)
|
$
|
(61
|
)
|
|||||
Net
income
|
-
|
-
|
-
|
420
|
|||||||||
August
4, 2007
|
$
|
105
|
(1)
|
$
|
(342)
|
(2)
|
$
|
(237
|
)
|
$
|
359
|
($
in millions)
|
13
weeks ended
|
26
weeks ended
|
|||||||||||
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
Stock
awards (shares and units)
|
$
|
6
|
$
|
9
|
$
|
11
|
$
|
17
|
|||||
Stock
options
|
6
|
5
|
13
|
11
|
|||||||||
Total
stock-based compensation cost
|
$
|
12
|
$
|
14
|
$
|
24
|
$
|
28
|
|||||
Total
income tax benefit recognized in the
|
|||||||||||||
Consolidated
Statements of Operations for
|
|||||||||||||
Stock-based
compensation arrangements
|
$
|
4
|
$
|
6
|
$
|
9
|
$
|
11
|
(options
in thousands)
|
Stock
Options
|
Weighted-Average
Exercise
Price
|
||||||
Outstanding
at February 2, 2008
|
8,233 | $ | 50 | |||||
Granted
|
3,500 | 36 | ||||||
Exercised
|
(131 | ) | 29 | |||||
Forfeited
or expired
|
(605 | ) | 65 | |||||
Outstanding
at August 2, 2008
|
10,997 | 45 | ||||||
Exercisable
at August 2, 2008
|
6,225 | 44 |
(awards
in thousands)
|
Non-Vested
|
Weighted-
Average Grant
|
||||||
Stock
Awards
|
Date
Fair Value
|
|||||||
Non-vested
at February 2, 2008
|
894 | $ | 58 | |||||
Granted
|
879 | 40 | ||||||
Vested
|
(337 | ) | 57 | |||||
Forfeited
|
(37 | ) | 49 | |||||
Non-vested
at August 2, 2008
|
1,399 | 47 |
26
weeks ended
|
||||||
(shares
in millions)
|
Aug.
2,
|
Aug.
4,
|
||||
2008
|
2007
|
|||||
Shares
outstanding at beginning of year
|
221.7
|
225.5
|
||||
Exercise
of stock options
|
0.1
|
1.1
|
||||
Vesting
of restricted stock units and other
|
0.3
|
0.2
|
||||
Shares
terminated for tax withholding
|
-
|
(0.1
|
)
|
|||
Shares
repurchased
|
-
|
(5.1
|
)
|
|||
Shares
outstanding at end of period
|
222.1
|
221.6
|
($
in millions)
|
SFAS
158 Funded Status Adjustments
|
Measurement
Date Change Transition Adjustment
|
Current
Period Pension Accrual
|
Total
|
||||||||||||
Balance
as of August 4, 2007
|
$ | 1,284 | ||||||||||||||
2007
second half changes
|
$ | 697 | $ | - | $ | 49 | 746 | |||||||||
Balance
as of February 2, 2008
|
2,030 | |||||||||||||||
2008
first half changes
|
(561 | ) | 47 | 66 | (448 | ) | ||||||||||
Balance
as of August 2, 2008
|
$ | 1,582 | ||||||||||||||
Pension
Plans
|
||||||||||||||||||||||||
Qualified
|
Supplemental
(Nonqualified)
|
Postretirement
Plan
|
||||||||||||||||||||||
($
in millions)
|
13
weeks ended
|
13
weeks ended
|
13
weeks ended
|
|||||||||||||||||||||
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
|||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
Service
cost
|
$ | 22 | $ | 24 | $ | 1 | $ | 1 | $ | - | $ | - | ||||||||||||
Interest
cost
|
59 | 54 | 5 | 5 | - | 1 | ||||||||||||||||||
Expected
return on plan assets
|
(114 | ) | (103 | ) | - | - | - | - | ||||||||||||||||
Net
amortization
|
- | 1 | 5 | 7 | (6 | ) | (8 | ) | ||||||||||||||||
Net
periodic benefit
(income)/expense
|
$ | (33 | ) | $ | (24 | ) | $ | 11 | $ | 13 | $ | (6 | ) | $ | (7 | ) | ||||||||
Pension
Plans
|
||||||||||||||||||||||||
Qualified
|
Supplemental
(Nonqualified)
|
Postretirement
Plan
|
||||||||||||||||||||||
($
in millions)
|
26
weeks ended
|
26
weeks ended
|
26
weeks ended
|
|||||||||||||||||||||
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
|||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||
Service
cost
|
$ | 44 | $ | 47 | $ | 2 | $ | 2 | $ | - | $ | - | ||||||||||||
Interest
cost
|
118 | 109 | 10 | 11 | - | 1 | ||||||||||||||||||
Expected
return on plan assets
|
(228 | ) | (207 | ) | - | - | - | - | ||||||||||||||||
Net
amortization
|
- | 3 | 10 | 13 | (12 | ) | (16 | ) | ||||||||||||||||
Net
periodic benefit (income)/expense
|
$ | (66 | ) | $ | (48 | ) | $ | 22 | $ | 26 | $ | (12 | ) | $ | (15 | ) | ||||||||
($
in millions)
|
13
weeks ended
|
26
weeks ended
|
||||||||||||||
Aug.
2,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Real
estate activities
|
$ | (10 | ) | $ | (9 | ) | $ | (20 | ) | $ | (19 | ) | ||||
Net
gains on sale of real estate
|
- | (6 | ) | - | (6 | ) | ||||||||||
Other
|
1 | 2 | 2 | 3 | ||||||||||||
Total
|
$ | (9 | ) | $ | (13 | ) | $ | (18 | ) | $ | (22 | ) |
§
|
The
difficult economic environment impacting consumers continued in the second
quarter of 2008 and negatively impacted both sales and
profits. However, despite the challenging environment,
management was able to execute effectively by focusing on managing
inventory and controlling expenses.
|
§
|
Comparable
store inventory decreased 3.5% as of the end of the second quarter of 2008
compared with last year’s second quarter as a result of lower merchandise
receipts and effective clearance of seasonal merchandise. At
the end of the second quarter, inventory was better aligned with current
sales trends.
|
§
|
SG&A
expenses were well managed across the entire organization and increased
only slightly in the second quarter of 2008, despite the addition of 35
new stores, net of closings and relocations, since the second quarter of
2007.
|
§
|
Brand
launches for the all important Back-to-School season included Fabulosity™
and Decree™ in juniors, and White Tag™ and the expansion of American
Living™ in young men’s. In home, the Company introduced Dorm Life™ and
Linden Street™.
|
§
|
During
the second quarter of 2008, the Company opened 12 new stores, three of
which were relocations, and 11 of the new stores were in the new off-mall
format. The Company plans to open a total of 35 new or
relocated stores in 2008, representing a 2.8% increase in gross square
footage. One of the openings originally scheduled for 2008 has been
deferred to 2009. The Company also opened 10 new Sephora inside
JCPenney locations during the second quarter of 2008. Sephora
inside JCPenney continues to be one of the strongest areas of the
Company’s business and ended the second quarter of 2008 with 81
locations.
|
§
|
On
June 25, 2008, the Company announced updated Bridge Plan targets for 2009,
including a further reduction in capital expenditures to approximately
$650 million, versus $1 billion planned for 2008. This reflects plans to
open 20 new or relocated stores in 2009, down from 35 new or relocated
stores that are currently planned to open in 2008. The Company has also
reduced its store renovation plans to 10-15 stores in 2009, down from the
20 renovations it expects to complete in 2008. See page 22 for
additional discussion of the Bridge
Plan.
|
($
in millions)
|
13
weeks ended
|
26
weeks ended
|
||||||||||||||
Aug.
2,,
|
Aug.
4,
|
Aug.
2,
|
Aug.
4,
|
|||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Total
net sales
|
$ | 4,282 | $ | 4,391 | $ | 8,409 | $ | 8,741 | ||||||||
Gross
margin
|
1,606 | 1,674 | 3,256 | 3,481 | ||||||||||||
Operating
expenses:
|
||||||||||||||||
Selling,
general and administrative (SG&A)
|
1,248 | 1,243 | 2,543 | 2,534 | ||||||||||||
Depreciation
and amortization
|
115 | 100 | 225 | 200 | ||||||||||||
Pre-opening
|
9 | 15 | 15 | 21 | ||||||||||||
Real
estate and other (income), net
|
(9 | ) | (13 | ) | (18 | ) | (22 | ) | ||||||||
Total
operating expenses
|
1,363 | 1,345 | 2,765 | 2,733 | ||||||||||||
Operating
income
|
243 | 329 | 491 | 748 | ||||||||||||
Net
interest expense
|
55 | 37 | 108 | 69 | ||||||||||||
Bond
premiums and unamortized costs
|
- | 12 | - | 12 | ||||||||||||
Income
from continuing operations before income taxes
|
188 | 280 | 383 | 667 | ||||||||||||
Income
tax expense
|
72 | 105 | 147 | 254 | ||||||||||||
Income
from continuing operations
|
116 | 175 | 236 | 413 | ||||||||||||
Diluted
EPS from continuing operations
|
$ | 0.52 | $ | 0.78 | $ | 1.06 | $ | 1.82 | ||||||||
Ratios
as a percent of sales:
|
||||||||||||||||
Gross
margin
|
37.5 | % | 38.1 | % | 38.7 | % | 39.8 | % | ||||||||
SG&A
|
29.1 | % | 28.3 | % | 30.2 | % | 29.0 | % | ||||||||
Total
operating expenses
|
31.8 | % | 30.6 | % | 32.9 | % | 31.2 | % | ||||||||
Operating
income
|
5.7 | % | 7.5 | % | 5.8 | % | 8.6 | % |
($
in millions)
|
13
weeks ended
|
26
weeks ended
|
||||||||||||||
Aug.
2,
2008
|
Aug.
4,
2007
|
Aug.
2,
2008
|
Aug.
4,
2007
|
|||||||||||||
Total
net sales
|
$ | 4,282 | $ | 4,391 | $ | 8,409 | $ | 8,741 | ||||||||
Sales
percent (decrease)/increase:
|
||||||||||||||||
Total
net sales
|
(2.5 | )% | 3.6 | % | (3.8 | )% | 3.3 | % | ||||||||
Comparable
store sales
(1)
|
(4.3 | )% | 2.9 | % | (5.8 | )% | 3.1 | % |
(1)
|
Comparable
store sales include sales from new and relocated stores that have been
opened for 12 consecutive full fiscal months. Stores closed for
an extended period are not included in comparable store sales
calculations, while stores remodeled and minor expansions not requiring
store closures remain in the calculations. Beginning in 2008, the Company
changed its sales reporting to include online sales, through jcp.com, in
comparable store sales. Comparable store sales presented in the table
above have been reclassified for all periods presented to include jcp.com
sales.
|
26
weeks ended
|
||||||||
($
in millions)
|
Aug.
2,
|
Aug.
4,
|
||||||
2008
|
2007
|
|||||||
Net
cash provided by/(used in):
|
||||||||
Continuing
operations:
|
||||||||
Operating
activities
|
$ | 270 | $ | 189 | ||||
Investing
activities
|
(496 | ) | (590 | ) | ||||
Financing
activities
|
(135 | ) | (139 | ) | ||||
Discontinued
operations:
|
||||||||
Operating
activities
|
- | (2 | ) | |||||
Investing
activities
|
(1 | ) | (25 | ) | ||||
Financing
activities
|
- | - | ||||||
Net
(decrease) in cash and short-term investments
|
$ | (362 | ) | $ | (567 | ) |
1.
|
Election
of Directors. At the Company’s Annual Meeting of Stockholders
held on May 16, 2008, each of the nominees listed below was elected a
director to hold office until the next annual meeting of stockholders and
until his or her respective successor has been elected and
qualified. Set forth below next to the name of each of the
nominees is the number of shares of common stock voted for and against
each nominee and the number of shares of common stock abstaining with
respect to each nominee:
|
Nominee
|
For
|
Against
|
Abstain
|
||||
Colleen
C. Barrett
|
117,866,785
|
67,606,198
|
2,487,230
|
||||
M.
Anthony Burns
|
123,318,765
|
61,987,678
|
2,653,769
|
||||
Maxine
K. Clark
|
117,885,215
|
67,464,253
|
2,610,745
|
||||
Thomas
J. Engibous
|
129,191,376
|
56,162,956
|
2,605,881
|
||||
Kent
B. Foster
|
129,257,091
|
56,083,220
|
2,619,901
|
||||
Ken
C. Hicks
|
180,732,779
|
5,196,557
|
2,030,878
|
||||
Leonard
H. Roberts
|
129,110,866
|
56,277,428
|
2,571,920
|
||||
Javier
G. Teruel
|
180,880,381
|
4,839,859
|
2,239,972
|
||||
Myron
E. Ullman, III
|
128,031,796
|
57,310,757
|
2,617,660
|
2.
|
Ratification
of Appointment of Independent Auditor. At the Company’s Annual
Meeting, the stockholders ratified the appointment of KPMG LLP as
independent auditor for the fiscal year ending January 31, 2009 by a vote
of 181,600,425 shares voting for, 4,457,399 shares voting against, and
1,902,388 shares abstaining.
|
3.
|
Stockholder
proposal relating to stockholder approval of certain severance
agreements. At the Company’s Annual Meeting, the proposal was
approved by a vote of 119,024,443 shares voting for, 46,203,542 shares
voting against, 2,608,085 shares abstaining and 20,124,144 broker
non-votes.
|
Incorporated
by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit
Description
|
Form
|
SEC
File
No.
|
Exhibit
|
Filing
Date
|
Filed
Herewith
|
||||||
3.1
|
Restated
Certificate of Incorporation of J. C. Penney Company, Inc., as amended to
May 19, 2006
|
10-Q
|
001-15274
|
3.1
|
06/07/2006
|
|||||||
3.2
|
J.
C. Penney Company, Inc. Bylaws, as amended to
March
27, 2008
|
8-K
|
001-15274
|
3.1
|
04/02/2008
|
|||||||
10.1**
|
Summary
of Non-Employee Director Compensation
|
X
|
||||||||||
10.2**
|
Third
Amendment to Indemnification Trust Agreement between J. C. Penney Company,
Inc., J. C. Penney Corporation, Inc. and JPMorgan Chase Bank, effective as
of June 1, 2008
|
X
|
||||||||||
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||||
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||||
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
X
|
||||||||||
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
|
X
|
J.
C. PENNEY COMPANY, INC.
|
||||
By | /s/ Dennis P. Miller |
|
||
Dennis P.
Miller
|
||||
Senior
Vice President and Controller
|
||||
(Principal
Accounting Officer)
|
Annual Cash Retainer * | $ 60,000 | |
Annual Restricted Stock Unit Award | $ 120,000 ** | |
Annual Cash Retainer – Audit Committee Chair * | $ 15,000 | |
Annual Cash Retainer – Human Resources and Compensation Committee Chair * | $ 10,000 | |
Annual Cash Retainer – Corporate Governance / Finance Committee Chairs * | $ 7,500 | |
Annual Cash Retainer – Presiding Director * | $ 15,000 | |
Annual Cash Retainer – Representatives under Indemnification Trust Agreement *** | $ 5,000 |
1.
|
Section
4(e) of the Trust Agreement shall be amended and restated in its entirety
as follows:
|
2.
|
This
Third Amendment may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which taken together constitute
one and the same instrument.
|
3.
|
This
Third Amendment shall be governed by, and construed in accordance with,
the laws of the State of New York.
|
|
/s/
Robert B.
Cavanaugh
Robert
B.
Cavanaugh
|
|
Executive
Vice President and
|
|
Chief
Financial Officer
|
|
/s/
Robert B. Cavanaugh
Robert
B. Cavanaugh
|
|
Executive
Vice President and
|
|
Chief
Financial Officer
|