Exhibit 99(a)
JCPenney News Release
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CONTACT
Tim Lyons Quinton Crenshaw Eli Akresh Bob Johnson
Public Relations Public Relations Investor Relations Investor Relations
(972) 431-4834 (972) 431-5581 (972) 431-2207 (972) 431-2217
tmlyons@jcpenney.com qcrensha@jcpenney.com eakresh@jcpenney.com rvjohnso@jcpenney.com
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JCPENNEY AGREES TO SELL ECKERD DRUGSTORES FOR $4.525 BILLION
Cash Proceeds of $3.5 Billion Targeted To Enhance Shareholder Value
Transactions Expected To Close By the End of the Fiscal Second Quarter
PLANO, Texas, April 5, 2004 - J. C. Penney Company, Inc. (NYSE:JCP) has
signed definitive agreements with The Jean Coutu Group (PJC) Inc. (TSX:PJC.A)
and CVS Corporation (NYSE:CVS) for the sale of its Eckerd drugstore operations
for a total of $4.525 billion in cash. As a result, The Jean Coutu Group will
acquire Eckerd drugstores and support facilities located in thirteen Northeast
and mid-Atlantic states, as well as the Eckerd Home Office in Florida, for
$2.375 billion. CVS will acquire Eckerd drugstores and support facilities
located in the remaining southern states, principally Florida and Texas, and
Eckerd's pharmacy benefits management and mail order businesses, for $2.150
billion. After closing adjustments, taxes, fees and other expenses related to
the transactions, JCPenney expects to generate approximately $3.5 billion in
cash proceeds. Closing of the transactions, which are subject to normal and
customary regulatory approvals, is anticipated to occur by the end of the fiscal
second quarter.
Allen Questrom, Chairman and Chief Executive Officer of JCPenney, said, "I
am pleased to announce the sale of Eckerd and believe that it will allow both
JCPenney and Eckerd to maximize their potential. I want to extend my sincere
appreciation for all the hard work and dedication that Eckerd associates have
contributed over the years to make Eckerd the valuable customer franchise that
it is. This sale will allow JCPenney to focus entirely on our core department
store and catalog/Internet business. Our core business has made tremendous
progress over the past three years, with significant improvement in both sales
and operating profit, and we remain confident we will achieve our operating
profit goal of 6-8% of sales in 2005."
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Questrom added, "JCPenney's Board of Directors will review strategies and
programs for using the $3.5 billion in after-tax sale proceeds for an
appropriate mix of both common stock repurchases and debt retirements. These
actions will be designed to further strengthen the Company's financial position
and capital structure, and support our objectives of enhancing shareholder value
and improving JCPenney's credit profile. Going forward, our financing strategy
will remain focused on preserving both strong liquidity and financial
flexibility as we work to improve the performance of our department store and
catalog/Internet business."
In the fourth quarter of 2003, JCPenney classified Eckerd as a discontinued
operation and recorded an adjustment to reflect the estimated fair value of its
investment in Eckerd. The Company also recorded the estimated tax liability that
would be due upon the closing of a transaction. Additional fair value and tax
liability adjustments related to the sale, if any, will be recorded in the first
quarter.
J. C. Penney Corporation, Inc., the wholly-owned operating subsidiary of
the Company, is one of America's largest department store, catalog, and
e-commerce retailers, employing approximately 150,000 associates. As of January
31, 2004, J. C. Penney Corporation, Inc. operated 1,020 JCPenney department
stores throughout the United States and Puerto Rico, and 58 Renner department
stores in Brazil. JCPenney Catalog, including e-commerce, is the nation's
largest catalog merchant of general merchandise, and JCPenney.com is one of the
largest apparel and home furnishings sites on the Internet. J. C. Penney
Corporation, Inc. is a contributor to JCPenney Afterschool Fund, a charitable
organization committed to providing children with high quality after school
programs to help them reach their full potential.
This release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements, which reflect the Company's current views of future events and
financial performance, involve known and unknown risks and uncertainties 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, competition, consumer demand, seasonality, economic conditions, and
government activity. Investors should take such risks into account when making
investment decisions.
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