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St. Joe’s Land “Sale”
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Subs: 10K Notes
From JC Penny's 10K (click to open .pdf)
Rough math has the impact of share repurchases and pension contribution effect increasing EPS ~30% in 2011 all other things being equal. Any operational/macro improvements will simply add to that..
- No repurchases of common stock were made during the fourth quarter of 2010, and no amounts were authorized for share repurchase as of January 29, 2011. In February 2011, the Board authorized a program to repurchase up to $900 million of common stock on the open market. This program was launched on March 4, 2011 and is expected to be completed in 2011.
- We opened 76 Sephora inside jcpenney beauty boutiques to bring our total to 231 locations.
- Sales in all geographic regions increased in 2010, with the best performance in the southeast and southwest regions with the
- weakest in the northwest and northeast regions. Our best performing categories were men's apparel and women's accessories, including Sephora. Home and women's apparel experienced the weakest performance for the year. Private and exclusive brands found only at jcpenney continue to grow and as a percent of total merchandise sales were 55% in 2010 versus 54% in 2009.
- During the year, we opened 76 Sephora inside jcpenney locations, bringing us to 231 locations compared to 155 at the end of 2009. We plan to open an additional 76 Sephora inside jcpenney locations in 2011.
- Based on our 2010 year-end measurement of primary pension plan assets and benefit obligations, we expect our 2011 non-cash primary pension plan expense to decline to $87 million compared to $221 million in 2010. The lower expense will benefit EPS about $0.35 based on the 2010 level of shares used for the EPS calculation. The reduction is primarily the result of positive returns on plan assets due to favorable capital market experience in 2010 and our discretionary cash contribution of $392 million in May 2010,
- For 2010, we ended the year with $2.6 billion of cash and cash equivalent balances and had positive free cash flow of $158 million.
- Our liquidity position provides the flexibility for our team to support the key components of our growth initiatives. Early in 2010, we used cash on hand to retire $393 million of debt at its maturity and $300 million to purchase long-term debt through a tender offer. At year-end 2010, our cash-to-debt ratio was about 85%, while our debt-to-total capital ratio improved to 36%. Our next scheduled debt maturity of $230 million will occur in August 2012.
- ESOP plan holds 6% of outstanding shares....management and directors (other than Pershing/Vornado) continue to hold <1%.....that sucks
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Subs: Jamba Going Mainstream???
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GGP, HHC the WSJ and David Simon
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Subs: Miscellaneous
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Is This Recovery Really “Different”?
"Davidson" submits:
The media has presented many analysts who expressed views that “…this recovery is different” from past recoveries regarding employment. The study in Chart 1: Household Emp Survey Past Three Recoveries reveals that the current recovery is actually similar to the 2002 and 1991 recoveries regarding the comparable rate of employment recovery. One can see that the general trend of the month-to-month rate of change of the current recovery appears almost identical to that in 2002 and 1991.
But, what was truly different this time was the stimulation provided by the Community Reinvestment Act of 1995. Government has a long history of providing support for homeownership for various social and political reasons. Periodically, since the early 1960s, there have been surges and declines in the numbers of private homes built reflecting a boom-bust cycle that has averaged ~1.4million new homes each year. See- Chart 2: Employment vs. Private Housing Permits in Construction Industry
Construction Employment (includes all construction residential, commercial and etc) has a defined trend from 1961-Present that one can draw connecting the peak levels of employment that follow the surge of issued housing permits. What should be clear in Chart 2 is that Construction Employment soared after the Community Reinvestment Act of 1995 as government pressed banks to lend to the less fortunate. Excess lending led to excess employment which was nearly 1million above the peak trend line in Sept 2006-Peak Trend Line level of ~6,800,000 vs. Construction Employment of 7,718,000. This created excess employment in associated industries as well. One of the features of the excess lending during the years leading to this peak was “Sub-Prime” lending which included lending for car and light truck purchases in the form of home equity loans. This was even before Sub-Prime homeowners had created any home equity!!
Excess within an economy is never limited solely to a single industry.
The excess Construction Employment of 2006 on correction resulted in layoffs of ~2.2mil individuals in construction alone (Sept 2006-7,718,000 fell to Feb 2011-5,509,000) which represented ~25% of the 8.4mil individuals laid off from 2006 to Dec 2009 as the recession gathered strength. With housing being one of the basic industries of the US economy, the devastation to employment rolls was widespread as even industries thought minimally connected proved not exempt. The economic excess that led to our recent recession in spite of the many denials by elected officials can be laid to the political desire to stimulate homeownership in my opinion.
Almost everyone in and out of government thought Sub-Prime lending was a wonderful idea as the results piled in one on top of another. Unfortunately the I.O.U. was mountainous!
Net/net, this recovery appears quite similar to previous recoveries.
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Weekend Berkowitz and St. Joe Reading
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Subs: Miscellaneous
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