J. C. PENNEY COMPANY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
| | | | | | | | | |
| | | Three Months Ended |
| (In millions) | | May 2, 2020 | | May 4, 2019 | |
| Total net sales | | $ | 1,082 |
| | $ | 2,439 |
| |
| Credit income and other | | 114 |
| | 116 |
| |
| Total revenues | | 1,196 |
| | 2,555 |
| |
| | | | | | |
| Costs and expenses/(income): | | | | | |
| Cost of goods sold (exclusive of depreciation and amortization shown separately below) | | 813 |
| | 1,630 |
| |
| Selling, general and administrative (SG&A) | | 572 |
| | 856 |
| |
| Depreciation and amortization | | 135 |
| | 147 |
| |
| Real estate and other, net | | (2 | ) | | (5 | ) | |
| Restructuring and management transition (1) | | 155 |
| | 20 |
| |
| Total costs and expenses | | 1,673 |
| | 2,648 |
| |
| Operating income/(loss) | | (477 | ) | | (93 | ) | |
| Other components of net periodic pension cost/(income) | | (23 | ) | | (13 | ) | |
| Net interest expense | | 75 |
| | 73 |
| |
| Loss due to discontinuance of hedge accounting | | 77 |
| | — |
| |
| Income/(loss) before income taxes | | (606 | ) | | (153 | ) | |
| Income tax expense/(benefit) | | (60 | ) | | 1 |
| |
| Net income/(loss) | | $ | (546 | ) | | $ | (154 | ) | |
| Earnings/(loss) per share - basic | | $ | (1.69 | ) | | $ | (0.48 | ) | |
| Earnings/(loss) per share - diluted | | $ | (1.69 | ) | | $ | (0.48 | ) | |
(1) Restructuring and management transition includes $139 million and $14 million related to asset impairments for the three months ended May 2, 2020 and the three months ended May 4, 2019, respectively. The impairments for the three months ended May 2, 2020 include impairment of long-lived assets, including lease right of use assets, of $97 million and an impairment of indefinite-lived intangible assets of $42 million.
J. C. PENNEY COMPANY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(Unaudited)
|
| | | | | | | | |
| | | Three Months Ended |
| (In millions) | | May 2,
2020 | | May 4,
2019 |
| Net income/(loss) | | $ | (546 | ) | | $ | (154 | ) |
| Other comprehensive income/(loss), net of tax: | | | | |
| Retirement benefit plans | | | | |
| Reclassification for amortization of prior service (credit)/cost | | 1 |
| | 2 |
|
| Cash flow hedges | | | | |
| Gain/(loss) on interest rate swaps | | — |
| | (11 | ) |
| Reclassification for periodic settlements | | — |
| | (2 | ) |
| Total other comprehensive income/(loss), net of tax | | 1 |
| | (11 | ) |
| Total comprehensive income/(loss), net of tax | | $ | (545 | ) | | $ | (165 | ) |
.
J. C. PENNEY COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| | | | | | | | | | | |
| | May 2, 2020 | | May 4, 2019 | | February 1, 2020 |
| (In millions, except per share data) | | | | | |
| Assets | | | | | |
| Current assets: | | | | | |
| Cash in banks and in transit | $ | 62 |
| | $ | 160 |
| | $ | 108 |
|
| Cash short-term investments | 636 |
| | 11 |
| | 278 |
|
| Cash and cash equivalents | 698 |
| | 171 |
| | 386 |
|
| Merchandise inventory | 2,221 |
| | 2,477 |
| | 2,166 |
|
| Prepaid expenses and other | 272 |
| | 287 |
| | 174 |
|
| Total current assets | 3,191 |
| | 2,935 |
| | 2,726 |
|
| Property and equipment, net | 3,344 |
| | 3,669 |
| | 3,488 |
|
| Operating lease assets | 934 |
| | 917 |
| | 998 |
|
| Prepaid pension | 138 |
| | 156 |
| | 120 |
|
| Other assets | 616 |
| | 665 |
| | 657 |
|
| Total assets | $ | 8,223 |
| | $ | 8,342 |
| | $ | 7,989 |
|
| | | | | | |
| Liabilities and stockholders' equity | | | | | |
| Current liabilities: | | | | | |
| Merchandise accounts payable | $ | 579 |
| | $ | 842 |
| | $ | 786 |
|
| Other accounts payable and accrued expenses | 829 |
| | 925 |
| | 931 |
|
| Current operating lease liabilities | 84 |
| | 84 |
| | 67 |
|
| Current portion of finance leases and note payable | — |
| | 2 |
| | 1 |
|
| Current portion of long-term debt, net | 4,884 |
| | 92 |
| | 147 |
|
| Total current liabilities | 6,376 |
| | 1,945 |
| | 1,932 |
|
| Noncurrent operating lease liabilities | 1,086 |
| | 1,082 |
| | 1,108 |
|
| Long-term debt | — |
| | 3,826 |
| | 3,574 |
|
| Deferred taxes | 48 |
| | 119 |
| | 116 |
|
| Other liabilities | 365 |
| | 336 |
| | 430 |
|
| Total liabilities | 7,875 |
| | 7,308 |
| | 7,160 |
|
| Stockholders' equity | | | | | |
| Common stock (1) | 161 |
| | 158 |
| | 160 |
|
| Additional paid-in capital | 4,725 |
| | 4,715 |
| | 4,723 |
|
| Reinvested earnings/(accumulated deficit) | (4,215 | ) | | (3,553 | ) | | (3,667 | ) |
| Accumulated other comprehensive income/(loss) | (323 | ) | | (286 | ) | | (387 | ) |
| Total stockholders’ equity | 348 |
| | 1,034 |
| | 829 |
|
| Total liabilities and stockholders' equity | $ | 8,223 |
| | $ | 8,342 |
| | $ | 7,989 |
|
(1) 1.25 billion shares of common stock are authorized with a par value of $0.50 per share. The total shares issued and outstanding were 321.9 million, 316.8 million and 320.5 million as of May 2, 2020, May 4, 2019 and February 1, 2020, respectively.
J. C. PENNEY COMPANY, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | Number of Common Shares | | Common Stock | | Additional Paid-in Capital | | Reinvested Earnings/(Accumulated Deficit) | | Accumulated Other Comprehensive Income/(Loss) | | Total Stockholders' Equity |
| February 1, 2020 | 320.5 |
| | $ | 160 |
| | $ | 4,723 |
| | $ | (3,667 | ) | | $ | (387 | ) | | $ | 829 |
|
| Net income/(loss) | — |
| | — |
| | — |
| | (546 | ) | | — |
| | (546 | ) |
| Discontinuance of hedge accounting | | | | | | | | | 63 |
| | 63 |
|
| Other comprehensive income/(loss) | — |
| | — |
| | — |
| | | | 1 |
| | 1 |
|
| Stock-based compensation and other | 1.4 |
| | 1 |
| | 2 |
| | (2 | ) | | — |
| | 1 |
|
| May 2, 2020 | 321.9 |
| | $ | 161 |
| | $ | 4,725 |
| | $ | (4,215 | ) | | $ | (323 | ) | | $ | 348 |
|
|
| | | | | | | | | | | | | | | | | | | | | | |
| (In millions) | Number of Common Shares | | Common Stock | | Additional Paid-in Capital | | Reinvested Earnings/(Accumulated Deficit) | | Accumulated Other Comprehensive Income/(Loss) | | Total Stockholders' Equity |
| February 2, 2019 | 316.1 |
| | $ | 158 |
| | $ | 4,713 |
| | $ | (3,373 | ) | | $ | (328 | ) | | $ | 1,170 |
|
| ASC 842 (Leases) and ASU 2018-02 (Stranded Taxes) adoption (See Note 2) | — |
| | — |
| | — |
| | (26 | ) | | 53 |
| | 27 |
|
| Net income/(loss) | — |
| | — |
| | — |
| | (154 | ) | | — |
| | (154 | ) |
| Other comprehensive income/(loss) | — |
| | — |
| | — |
| | — |
| | (11 | ) | | (11 | ) |
| Stock-based compensation and other | 0.7 |
| | — |
| | 2 |
| | — |
| | — |
| | 2 |
|
| May 4, 2019 | 316.8 |
| | $ | 158 |
| | $ | 4,715 |
| | $ | (3,553 | ) | | $ | (286 | ) | | $ | 1,034 |
|
J. C. PENNEY COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| | | | | | | |
| | Three Months Ended |
| (In millions) | May 2, 2020 | | May 4, 2019 |
| Cash flows from operating activities: | | | |
| Net income/(loss) | $ | (546 | ) | | $ | (154 | ) |
| Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | | | |
| Restructuring and management transition | 139 |
| | 15 |
|
| Net gain on sale of operating assets | — |
| | (4 | ) |
| Discontinuance of hedge accounting | 77 |
| | — |
|
| Depreciation and amortization | 135 |
| | 147 |
|
| Benefit plans | (22 | ) | | (14 | ) |
| Stock-based compensation | 2 |
| | 2 |
|
| Deferred taxes | (60 | ) | | (3 | ) |
| Change in cash from: | | | |
| Inventory | (55 | ) | | (40 | ) |
| Prepaid expenses and other assets | (98 | ) | | (98 | ) |
| Merchandise accounts payable | (207 | ) | | (5 | ) |
| Income taxes | (1 | ) | | 3 |
|
| Accrued expenses and other | (178 | ) | | (54 | ) |
| Net cash provided by/(used in) operating activities | (814 | ) | | (205 | ) |
| Cash flows from investing activities: | | | |
| Capital expenditures | (33 | ) | | (71 | ) |
| Proceeds from sale of operating assets | — |
| | 8 |
|
| Net cash provided by/(used in) investing activities | (33 | ) | | (63 | ) |
| Cash flows from financing activities: | | | |
| Proceeds from borrowings under the credit facility | 1,950 |
| | 408 |
|
| Payments of borrowings under the credit facility | (771 | ) | | (290 | ) |
| Payments of finance leases and note payable | (1 | ) | | (1 | ) |
| Payments of long-term debt | (19 | ) | | (11 | ) |
| Net cash provided by/(used in) financing activities | 1,159 |
| | 106 |
|
| Net increase/(decrease) in cash and cash equivalents | 312 |
| | (162 | ) |
| Cash and cash equivalents at beginning of period | 386 |
| | 333 |
|
| Cash and cash equivalents at end of period | $ | 698 |
| | $ | 171 |
|
