JCP Case Study

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IS

J.C. Penney's Income Statement
(In millions, except per share data) 2017 2016 2015
Total net sales $ 12,506 $ 12,547 $ 12,625
Costs and expenses/(income):
Cost of goods sold (exclusive of depreciation and amortization shown separately below) 8,174 8,071 8,074
Selling, general and administrative (SG&A) 3,468 3,538 3,775
Pension 21 19 162
Depreciation and amortization 570 609 616
Real estate and other, net -146 -111 3
Restructuring and management transition 303 26 84
Total costs and expenses 12,390 12,152 12,714
Operating income/(loss) 116 395 -89
Loss on extinguishment of debt 33 30 10
Net interest expense 325 363 405
Income/(loss) before income taxes -242 2 -504
Income tax expense/(benefit) -126 1 9
Net income/(loss) -116 1 -513
Price $3.16 $8.31 $6.66
Earnings/(loss) per share:
Basic -0.37 — -1.68
Diluted -0.37 — -1.68
Weighted average shares – basic 311.1 308.1 305.9
Weighted average shares – diluted 311.1 313 305.9

BS

J.C. Penney's Balance Sheet
(In millions, except per share data) 2017 2016 2015
Assets
Current assets:
Cash in banks and in transit $116 $125 $119
Cash short-term investments 342 762 781
Cash and cash equivalents 458 887 900
Merchandise inventory 2,762 2,854 2,721
Prepaid expenses and other 190 160 397
Total current assets 3,410 3,901 4,018
Property and equipment 4,281 4,599 4,816
Prepaid pension 61 — —
Other assets 661 618 608
Total Assets $ 8,413 $ 9,118 $ 9,442
Liabilities and Stockholders’ Equity
Current liabilities:
Merchandise accounts payable $ 973 $ 977 $ 925
Other accounts payable and accrued expenses 1,119 1,164 1,360
Current portion of capital leases, financing obligation and note payable 8 15 26
Current maturities of long-term debt 232 263 101
Total current liabilities 2,332 2,419 2,412
Long-term capital leases, financing obligation and note payable 212 219 10
Long-term debt 3,780 4,339 4,668
Deferred taxes 143 204 425
Other liabilities 567 583 618
Total Liabilities 7,034 7,764 8,133
Stockholders' Equity
Common stock (1) 156 154 153
Additional paid-in capital 4,705 4,679 4,654
Reinvested earnings/(accumulated deficit) -3,122 -3,006 -3,007
Accumulated other comprehensive income/(loss) -360 -473 -491
Total Stockholders’ Equity 1,379 1,354 1,309
Total Liabilities and Stockholders’ Equity 8,413 9,118 $ 9,442
Shares Outstanding (in million) 312 308.3 306.1