EX-99.1 2 dex991.htm 2007 ANALYST MEETING MATERIALS (DAY TWO - PRESENTATION OF ROBERT B. CAVANAUGH) 2007 Analyst Meeting Materials (Day Two - Presentation of Robert B. Cavanaugh)
2007 Analyst Meeting
Exhibit 99.1

Bob Cavanaugh
Executive Vice President
Chief Financial Officer
Financial Growth Leadership

Overview
•
2006 accomplishments
•
Leadership strategies and
initiatives
•
Long range financial targets
•
Value delivery to investors
•
Growth initiatives
•
Operating fundamentals

2006 Accomplishments
•
Financial position “inflection
point”
•
Strong operating results
•
Value delivery to investors
•
Key financial metrics aligned
•
$750M stock repurchase
•
44% dividend increase
•
Credit rating upgrades
•
Capital markets recognition

Financial Growth Leadership
•
Financial strategy
•
Enhance shareholder value
•
Strengthen financial position
•
Improve credit profile
•
New Financial Model
•
Increased financial flexibility
•
Reinvest in business
•
Accelerate growth

Financial Strategy “Brand”
Positioning
Financial
Strength
Shareholder Value
Best
Better
Good
Good
Better
Best
2006
GOAL
2001

Plan Alignment Triangle
Essentials
Customer Value
Proposition
Core
Capital
Fashion
EPS Growth

$6,300
x   16%
$1,000
225
$4.40
$5.44
$10
Plan Alignment Targets
Capital 2008 –
2011 ($mm)
Cost of Capital
Net Income by 2011 ($mm)
Average Shares
EPS by 2011
2007 EPS Guidance
2011 EPS
÷
2008 to 2011 EPS CAGR
(4 Years)
=  16%
+

Growth Drivers
•
Brand positioning
•
Merchandise
•
Lifestyle focus
•
Private brand growth
•
New brands and concepts
•
Internet
•
Stores
•
50 new stores per year
•
Improve sales productivity
•
Inventory flow

2008 -
2011
Long-Range Sales Targets
mid
singles
mid to
high singles
low to mid
singles
low
singles
mid
singles
low
singles
Direct
Dept.
Stores
Comps
2007
Total Co.
8%
mid
singles

2011E
Operating Targets
12.0% -
12.5%
40%
28%
10.3%
modest
impr.
modest
impr.
9.7%
39.3%
29.6%
Operating
Income
Gross
Margin
Total
Operating
Expenses
2007
2006

365
266
110
31
772
New Stores
Existing Stores
Technology
Other
Total
650
375
75
100
1,200
Capital Expenditures
2008-2011
700
375
100
100
1,275
Annual Estimates
2006
2007
GSF Increase
1%
3%
3%
($ in millions)

Financial Targets
0.6
10.5
> 26
ROE %
2006
28.3
Fixed Charge
Coverage (x)
Leverage
Ratio (x)
ROIC %
17.4
1.5
6.9
28.9
18.0
1.3
7.4
2007E
2011E
> 20

(0.8)
(0.8)
(0.3)
Activity
Operating
Investing
Financing
Net
(1.2)
(1.0)
(0.6)
Cash Flow Targets
2008-2011
(5.1)
(3.1)
(0.6)
2006
2007E
Cash Balance
2.7
2.1
1.5
($ in billions)
1.3
1.6
7.6

Shareholder Value “Brand”
Positioning
2006
Economic
Value
ROIC –
“C of C”
Sustainable EPS Growth
Growth
Leadership
Fwd. P/E > 16
Fwd. PEG > 1.0
2001
“Next $75”
per share
Best
Best

Raising the Bar
Blueprint for a Growth LEADER
Leverage
JCP
Brand
with
Customers
Execute
2007-2011
Long-Range
Plan
Associate
Engagement
Deliver
Consistently
EPS
Growth
Target
Re-Invent
for
Future
Growth

Value Delivery
EPS Growth Drivers
Financial
Flexibility
Growth
Acceleration
Consistent
Execution
16%
EPS
Growth

2006 Annual Report

2007 Analyst Meeting