JCP Case Study

JCPData.xlsx

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

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