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