Macy's 2015 Annual Report Download - page 31

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26
Guidance
Based on its assessment of current and anticipated market conditions and its recent performance, the Company's 2016
assumptions include:
• Total sales decline of approximately 2% from 2015 levels;
• Comparable sales decrease on an owned plus licensed basis of approximately 1%, and on an owned basis to be
approximately 50 basis points lower, from 2015 levels;
• Asset sale gains of approximately $235 million, including $86 million of additional gain from the sale of the
Brooklyn real estate;
• Non-cash settlement charges of approximately $135 million relating to the Company's defined benefit plans,
resulting from an anticipated increase in lump sum distributions associated with store closings, a voluntary
separation program and organizational restructuring and small balance force outs, in addition to annual
distribution activity;
• Retirement expenses (Pension Plan, SERP, 401(k) qualified defined contribution plan and non-qualified defined
contribution plan) are assumed to decline by approximately $25 million from 2015 levels, due primarily to the
reductions in service cost and interest cost for the Pension Plan and SERP associated with the change to the full
yield curve approach, which are estimated to be approximately $40 million;
• Adjusted diluted earnings per share attributable to Macy's, Inc. shareholders of $3.80 to $3.90, excluding the
anticipated impact of settlement accounting charges related to the Company's defined benefit plans described
above; and
• Capital expenditures of approximately $900 million.
The Company's budgeted capital expenditures are primarily related to new stores, store remodels, maintenance, the
renovation of the Macy's Brooklyn location, technology and omnichannel investments, distribution network improvements
and new growth initiatives. The Company has announced that in 2016 it intends to open one new Macy's store in Kapolei,
HI, approximately 42 new Bluemercury locations (24 freestanding and 18 inside existing Macy's stores) and 16 new
Macy's Backstage locations (one freestanding and 15 inside existing Macy's stores). In 2017, the Company intends to open
a new Macy's store in Murray, UT, a Macy's replacement store in Los Angeles, CA, and a new Bloomingdale's store in San
Jose, CA. In 2018, the Company intends to open a new Bloomingdale's store in Norwalk, CT. Management presently
anticipates funding such expenditures with cash on hand and cash from operations.