Federated Reports Third Quarter Earnings of 3 Cents Per Diluted Share from Continuing Operations.Diluted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , Excluding Merger Integration Costs and Inventory Valuation Adjustments, is 20 Cents, the High End of the Company's Guidance CINCINNATI -- Federated Connected and treated as one. See federated database and federated directories. Department Stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. , Inc. (NYSE NYSE See: New York Stock Exchange :FD)(NYSE Arca For other uses of "ARCA", see ARCA. NYSE Arca, previously known as ArcaEx, an abbreviation of Archipelago Exchange, is an entirely online securities exchange on which both stocks and options are traded. :FD) today reported earnings of 3 cents per diluted share from continuing operations for the third quarter of 2006, ended Oct. 28, 2006. This compares with diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations of 87 cents for the same 13-week period last year. Excluding May Company merger integration costs and related inventory valuation adjustments of $145 million ($90 million after tax or 17 cents per diluted share), third quarter diluted earnings per share from continuing operations were 20 cents. This is at the high end of the company's prior guidance for earnings of 15 cents to 20 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. excluding merger integration costs and related inventory valuation adjustments. Included in the 2005 third quarter earnings per share from continuing operations was a one-time pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain of $480 million ($384 million after tax, or 79 cents per share) on the sale of credit card receivables to Citigroup, as well as merger integration costs of $63 million ($39 million after tax, or 8 cents per diluted share). Excluding these items, earnings per diluted share from continuing operations were 16 cents for the third quarter of 2005. The 16 cents in last year's third quarter included a gain of approximately $10 million, or 1.5 cents per diluted share, related to Federated's portion of an antitrust litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement. For the first three quarters of 2006, Federated reported diluted earnings from continuing operations of 41 cents per share, compared with $1.76 per share in the same period of 2005. Excluding May Company merger integration costs and related inventory valuation adjustments of $451 million ($282 million after tax or 50 cents per diluted share) and the gains on the sale of credit card receivables of $191 million ($119 million after tax or 21 cents per diluted share), diluted earnings per share from continuing operations were 70 cents in the first three quarters of 2006. This compares with diluted earnings per share from continuing operations of 89 cents in the same period last year, excluding merger integration costs of $63 million ($39 million after tax or 10 cents per diluted share) and gain on the sale of credit card receivables of $480 million ($384 million after tax or 97 cents per diluted share). Terry J. Lundgren Terry J. Lundgren (b. 1952) is the CEO, Chairman of the Board, President, and Director at Macy's, Inc., the parent company of Macy*s and Bloomingdale's department stores. Lundgren is also the namesake of the Terry J. , Federated's chairman, president and chief executive officer, said, "Our third quarter earnings performance was at the high end of our expectations. On a year-to-date basis, we're ahead of our guidance. We continue to view 2006 as a transition year that has included a tremendous amount of change for our organization, notably a transition of more than 400 stores to the Macy's nameplate. With a new brand structure now fully in place, we look forward to a successful holiday selling season and to continued improvement in financial results in 2007." Federated's sales and earnings for the third quarter and 2006 year-to-date include results of The May Department Stores The May Department Stores Company was a department store chain founded in 1877 by David May in Leadville, Colorado. Its headquarters moved to St. Louis, Missouri in 1905, and the company went public in 1911. Company, which was acquired Aug. 30, 2005. For 2005, former May Company locations are included only for periods after Aug. 30. Sales and earnings from the company's Lord & Taylor division, which Federated sold in October 2006, and Bridal Group division, which the company is divesting, are treated as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Sales Sales in the third quarter totaled $5.886 billion, an increase of 6 percent compared to sales of $5.555 billion in the same period last year. On a same-store basis, Federated's third quarter sales were up 5.9 percent. The company's prior third quarter guidance was for total sales of between $5.9 billion and $6.1 billion, and for a same-store sales Same-store sales is a business term which refers to the revenue generated by one of a retail chain's specific outlets during a certain period of time (often a fiscal quarter or a particular shopping season), compared to an identical period in the past, usually in the previous year. increase of between 3 percent and 5 percent. For the year to date, Federated's sales totaled $17.811 billion, up 39 percent from total sales of $12.819 billion in the first 39 weeks of 2005. On a same-store basis, Federated's year-to-date sales were up 3.5 percent. The company opened four new department stores in the third quarter of 2006 - Macy's in Philadelphia, Denver and Chula Vista Chula Vista (ch  `lə), city (1990 pop. 135,163), San Diego co., S Calif., on San Diego Bay; inc. 1911. , CA, and a
Bloomingdale's in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . Aside from duplicate locations
being divested, no stores were closed.
Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Federated's operating income totaled $134 million or 2.3 percent of sales for the quarter ended Oct. 28, 2006, compared to operating income of $687 million or 12.4 percent of sales for the same period last year. Federated's third quarter 2006 operating income included $145 million in May Company integration costs and related inventory valuation adjustments. Federated's third quarter 2005 operating income included $63 million in May Company integration costs, as well as a gain of $480 million on the sale of credit card receivables. Excluding merger integration costs and related inventory valuation adjustments, operating income for the third quarter of 2006 was $279 million or 4.7 percent of sales. In the third quarter of 2005, operating income excluding merger integration costs and gain on the sale of credit card receivables was $270 million or 4.9 percent of sales. For the first 39 weeks of 2006, Federated's operating income totaled $576 million or 3.2 percent of sales, compared to operating income of $1.230 billion or 9.6 percent of sales for the same period last year. Federated's year-to-date 2006 operating income includes $451 million in May Company integration costs and related inventory valuation adjustments, as well as gains of $191 million on the sale of credit card receivables. Federated's year-to-date 2005 operating income included $63 million in May Company integration costs, as well as a gain of $480 million on the sale of credit card receivables. Excluding merger integration costs and related inventory valuation adjustments, as well as gains on the sale of credit card receivables, year-to-date operating income in 2006 was $836 million or 4.7 percent of sales. For the first three quarters of 2005, operating income excluding merger integration costs and gain on the sale of credit card receivables was $813 million or 6.3 percent of sales. Cash Flow Federated generated $1.971 billion in cash from continuing operating activities in the first 39 weeks of 2006, compared to $2.316 billion in the same period last year. Cash generated by continuing investing activities was $865 million in the first 39 weeks of this year, compared with $4.446 billion used in the same period last year (primarily for the acquisition of May Company), resulting in cash flow from continuing operating activities before continuing financing activities of $2.836 billion generated year-to-date in 2006 and $2.130 billion used in the same period last year. In addition, the company generated $32 million in net cash from discontinued operations year-to-date in 2006. A series of major transactions contributed to cash flow in the first three quarters of 2006. Cash generated from continuing operating activities includes $1.860 billion in proceeds from the sale of May Company credit card receivables. Cash from continuing investing activities includes $1.047 billion in proceeds from the sale of Lord & Taylor and Federated's purchase of $1.141 billion in credit card receivables from General Electric Capital Corporation, which then were sold to Citigroup for $1.323 billion (for a net increase of $182 million), as well as $494 million from the disposal of property and equipment, primarily from the sale of approximately 61 duplicate store locations. Additional transactions will contribute to cash flow in the fourth quarter of 2006. These are expected to include the sale of at least two additional duplicate stores being divested. Proceeds from transactions to date in 2006 have been used to pay down short-term borrowings associated with the May Company acquisition and to repurchase shares. The company used approximately $1.1 billion of excess cash to repurchase approximately 28 million shares of Federated common stock in the first three quarters of 2006. At the end of the third quarter, the company had remaining authorization to purchase up to approximately $1.6 billion of common stock. Looking Ahead The company's guidance for the fourth quarter is unchanged. Federated continues to anticipate same-store sales for the fourth quarter to increase by 3 percent to 5 percent over last year. Total fourth quarter sales are expected in the range of $9.1 billion to $9.4 billion. Guidance for diluted earnings per share, excluding merger integration costs and related inventory valuation adjustments, is $1.40 to $1.50 for the fourth quarter. Federated, with corporate offices in Cincinnati and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , is one of the nation's premier retailers, with fiscal 2006 sales expected to be about $27 billion. Federated operates more than 850 department stores in 45 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , Guam and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. under the names of Macy's and Bloomingdale's. The company also operates macys.com, bloomingdales.com and Bloomingdale's By Mail. All statements in this press release that are not statements of historical fact are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements are based upon the current beliefs and expectations of Federated's management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including conditions to, or changes in the timing of, proposed transactions, prevailing interest rates, competitive pressures from specialty stores Noun 1. specialty store - a store that sells only one kind of merchandise shop, store - a mercantile establishment for the retail sale of goods or services; "he bought it at a shop on Cape Cod" , general merchandise stores, manufacturers' outlets, off-price and discount stores, new and established forms of home shopping Home Shopping commonly refers to the electronic retailing / home shopping channels industry, which includes such billion dollar companies as HSN, QVC, eBay, ShopNBC, Buy.com, and Amazon.com. (including the Internet, mail-order catalogs and television) and general consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. levels, including the impact of the availability and level of consumer debt, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission.. (NOTE: Additional information on Federated is available on the Internet at www.fds.com/pressroom. A webcast of Federated's third quarter earnings call with analysts will be held beginning at 10:30 a.m. ET on Wednesday, Nov. 8. Pre-registration is requested. Those unable to access the webcast at www.fds.com may call 1-800-946-0782 and use the passcode 9007436 to listen to the audio in real time. The webcast will be archived for replay beginning approximately two hours after the conclusion of the live call. 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