(Mark One) | |
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ________________ |
J. C. PENNEY COMPANY, INC. | ||||||
(Exact name of registrant as specified in its charter) | ||||||
Delaware | 26-0037077 | |||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||
6501 Legacy Drive, Plano, Texas 75024-3698 | ||||||
(Address of principal executive offices) | ||||||
(Zip Code) | ||||||
(972) 431-1000 | ||||||
(Registrant's telephone number, including area code) | ||||||
Securities registered pursuant to Section 12(b) of the Act: | ||||||
Title of each class | Name of each exchange on which registered | |||||
Common Stock of 50 cents par value | New York Stock Exchange | |||||
Preferred Stock Purchase Rights | New York Stock Exchange | |||||
Securities registered pursuant to Section 12(g) of the Act: | ||||||
None | ||||||
(Title of class) |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) |
DOCUMENTS INCORPORATED BY REFERENCE | ||
Documents from which portions are incorporated by reference | Parts of the Form 10-K into which incorporated | |
J. C. Penney Company, Inc. 2017 Proxy Statement | Part III |
Page | ||
2016 | 2015 | 2014 | |||||||
Women’s apparel | 24 | % | 25 | % | 26 | % | |||
Men’s apparel and accessories | 22 | % | 22 | % | 22 | % | |||
Home | 13 | % | 12 | % | 12 | % | |||
Women’s accessories, including Sephora | 13 | % | 12 | % | 11 | % | |||
Children’s apparel | 10 | % | 10 | % | 10 | % | |||
Footwear and handbags | 8 | % | 8 | % | 8 | % | |||
Jewelry | 6 | % | 6 | % | 6 | % | |||
Services and other | 4 | % | 5 | % | 5 | % | |||
100 | % | 100 | % | 100 | % |
Name | Offices and Other Positions Held With the Company | Age | ||
Marvin R. Ellison | Chairman of the Board and Chief Executive Officer | 52 | ||
Edward J. Record | Executive Vice President and Chief Financial Officer | 48 | ||
Michael Amend | Executive Vice President, Omnichannel | 39 | ||
Brynn L. Evanson | Executive Vice President, Human Resources | 47 | ||
Janet M. Link | Executive Vice President, General Counsel | 47 | ||
Joseph M. McFarland | Executive Vice President, Stores | 47 | ||
Therace M. Risch | Executive Vice President, Chief Information Officer | 44 | ||
Michael Robbins | Executive Vice President, Supply Chain | 51 | ||
John J. Tighe | Executive Vice President, Chief Merchant | 48 | ||
Mary Beth West* | Executive Vice President, Chief Customer and Marketing Officer | 54 | ||
Andrew S. Drexler | Senior Vice President, Chief Accounting Officer and Controller | 46 |
• | customer response to our marketing and merchandise strategies; |
• | our ability to achieve profitable sales and to make adjustments in response to changing conditions; |
• | our ability to respond to competitive pressures in our industry; |
• | our ability to effectively manage inventory; |
• | the success of our omnichannel strategy; |
• | our ability to benefit from capital improvements made to our store environment; |
• | our ability to respond to any unanticipated changes in expected cash flows, liquidity and cash needs, including our ability to obtain any additional financing or other liquidity enhancing transactions, if and when needed; |
• | our ability to achieve positive cash flow; |
• | our ability to access an adequate and uninterrupted supply of merchandise from suppliers at expected levels and on acceptable terms; |
• | changes to the regulatory environment in which our business operates; and |
• | general economic conditions. |
• | counterparty credit risk; |
• | the risk that the duration or amount of the hedge may not match the duration or amount of the related liability; |
• | the hedging transactions may be adjusted from time to time in accordance with accounting rules to reflect changes in fair values, downward adjustments or “mark-to-market losses,” which would affect our stockholders’ equity; and |
• | the risk that we may not be able to meet the terms and conditions of the hedging instruments, in which case we may be required to settle the instruments prior to maturity with cash payments that could significantly affect our liquidity. |
• | potential disruptions in manufacturing, logistics and supply; |
• | changes in duties, tariffs, quotas and voluntary export restrictions on imported merchandise; |
• | strikes and other events affecting delivery; |
• | consumer perceptions of the safety of imported merchandise; |
• | product compliance with laws and regulations of the destination country; |
• | product liability claims from customers or penalties from government agencies relating to products that are recalled, defective or otherwise noncompliant or alleged to be harmful; |
• | concerns about human rights, working conditions and other labor rights and conditions and environmental impact in foreign countries where merchandise is produced and raw materials or components are sourced, and changing labor, environmental and other laws in these countries; |
• | local business practice and political issues that may result in adverse publicity or threatened or actual adverse consumer actions, including boycotts; |
• | compliance with laws and regulations concerning ethical business practices, such as the U.S. Foreign Corrupt Practices Act; and |
• | economic, political or other problems in countries from or through which merchandise is imported. |
Alabama | 19 | Maine | 6 | Oklahoma | 19 | |||||
Alaska | 1 | Maryland | 17 | Oregon | 13 | |||||
Arizona | 22 | Massachusetts | 10 | Pennsylvania | 34 | |||||
Arkansas | 16 | Michigan | 41 | Rhode Island | 2 | |||||
California | 80 | Minnesota | 25 | South Carolina | 16 | |||||
Colorado | 21 | Mississippi | 15 | South Dakota | 7 | |||||
Connecticut | 8 | Missouri | 26 | Tennessee | 24 | |||||
Delaware | 3 | Montana | 7 | Texas | 91 | |||||
Florida | 55 | Nebraska | 11 | Utah | 8 | |||||
Georgia | 27 | Nevada | 7 | Vermont | 4 | |||||
Idaho | 9 | New Hampshire | 9 | Virginia | 24 | |||||
Illinois | 37 | New Jersey | 14 | Washington | 22 | |||||
Indiana | 27 | New Mexico | 10 | West Virginia | 9 | |||||
Iowa | 15 | New York | 41 | Wisconsin | 14 | |||||
Kansas | 19 | North Carolina | 29 | Wyoming | 4 | |||||
Kentucky | 22 | North Dakota | 8 | Puerto Rico | 7 | |||||
Louisiana | 16 | Ohio | 42 | |||||||
Total square feet | 103.3 million |
Square Footage | |||||||
Location | Leased/Owned | Primary Function(s) | (in thousands) | ||||
Manchester, Connecticut | Owned | stores, furniture | 2,120 | ||||
Lenexa, Kansas | Owned | stores, direct to customers | 1,944 | ||||
Columbus, Ohio | Owned | stores, direct to customers | 1,941 | ||||
Milwaukee, Wisconsin | Owned | stores, furniture | 1,921 | ||||
Atlanta, Georgia | Owned | stores, regional, direct to customers | 2,026 | ||||
Reno, Nevada | Owned | stores, direct to customers | 1,660 | ||||
Buena Park, California | Owned | stores, regional, furniture | 1,017 | ||||
Alliance, Texas | Owned | regional | 920 | ||||
Statesville, North Carolina | Owned | stores, regional | 595 | ||||
Lathrop, California | Leased | regional | 436 | ||||
Cedar Hill, Texas | Leased | stores | 420 | ||||
Spanish Fork, Utah | Leased | stores | 400 | ||||
Lakeland, Florida | Leased | stores | 360 | ||||
Total supply chain network | 15,760 |
Fiscal Year 2016 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Market price: | ||||||||||||||||
High | $ | 11.99 | $ | 9.82 | $ | 11.30 | $ | 10.74 | ||||||||
Low | $ | 6.88 | $ | 7.10 | $ | 8.25 | $ | 6.38 | ||||||||
Close | $ | 9.28 | $ | 9.66 | $ | 8.48 | $ | 6.45 | ||||||||
Fiscal Year 2015 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Market price: | ||||||||||||||||
High | $ | 9.50 | $ | 9.39 | $ | 10.09 | $ | 9.34 | ||||||||
Low | $ | 7.01 | $ | 8.02 | $ | 7.21 | $ | 6.00 | ||||||||
Close | $ | 8.43 | $ | 8.24 | $ | 9.17 | $ | 7.26 |
S&P Department Stores: Macy’s, Kohl’s, Nordstrom |
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||
JCPenney | $100 | $47 | $14 | $18 | $18 | $16 | ||||||
S&P 500 | 100 | 117 | 141 | 162 | 160 | 194 | ||||||
S&P Department Stores | 100 | 102 | 120 | 149 | 108 | 87 |
($ in millions, except per share data) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Results for the year | ||||||||||||||||||||
Total net sales | $ | 12,547 | $ | 12,625 | $ | 12,257 | $ | 11,859 | $ | 12,985 | ||||||||||
Sales percent increase/(decrease): | ||||||||||||||||||||
Total net sales | (0.6 | )% | 3.0 | % | 3.4 | % | (8.7 | )% | (1) | (24.8 | )% | (1) | ||||||||
Comparable store sales(2) | — | % | 4.5 | % | 4.4 | % | (7.4 | )% | (25.1 | )% | ||||||||||
Operating income/(loss) | 395 | (89 | ) | (254 | ) | (1,242 | ) | (1,001 | ) | |||||||||||
As a percent of sales | 3.1 | % | (0.7 | )% | (2.1 | )% | (10.5 | )% | (7.7 | )% | ||||||||||
Net income/(loss) from continuing operations | 1 | (513 | ) | (717 | ) | (1,278 | ) | (795 | ) | |||||||||||
Net income/(loss) from continuing operations before net interest expense, income tax (benefit)/expense and depreciation and amortization (EBITDA) (non-GAAP)(3) | 1,004 | 527 | 377 | (641 | ) | (458 | ) | |||||||||||||
Adjusted EBITDA (non-GAAP)(3) | 1,009 | 715 | 292 | (612 | ) | (373 | ) | |||||||||||||
Adjusted net income/(loss) from continuing operations (non-GAAP)(3) | 24 | (315 | ) | (766 | ) | (1,407 | ) | (751 | ) | |||||||||||
Per common share | ||||||||||||||||||||
Earnings/(loss) per share from continuing operations, diluted | $ | — | $ | (1.68 | ) | $ | (2.35 | ) | $ | (5.13 | ) | $ | (3.63 | ) | ||||||
Adjusted earnings/(loss) per share from continuing operations, diluted (non-GAAP)(3) | $ | 0.08 | $ | (1.03 | ) | $ | (2.51 | ) | $ | (5.64 | ) | $ | (3.43 | ) | ||||||
Dividends declared(4) | — | — | — | — | 0.20 | |||||||||||||||
Financial position and cash flow | ||||||||||||||||||||
Total assets | $ | 9,314 | $ | 9,442 | $ | 10,309 | $ | 11,710 | $ | 9,761 | ||||||||||
Cash and cash equivalents | 887 | 900 | 1,318 | 1,515 | 930 | |||||||||||||||
Total debt (5) | 4,836 | 4,805 | 5,321 | 5,510 | 2,962 | |||||||||||||||
Free cash flow (non-GAAP)(3) | 3 | 131 | 57 | (2,746 | ) | (906 | ) |
(1) | Includes the effect of the 53rd week in 2012. Excluding sales of $163 million for the 53rd week in 2012, total net sales decreased 7.5% and 25.7% in 2013 and 2012, respectively. |
(2) | Comparable store sales are presented on a 52-week basis and include sales from all stores, including sales from services and commissions earned from our in-store licensed departments, that have been open for 12 consecutive full fiscal months and Internet sales. Stores closed for an extended period are not included in comparable store sales calculations, while stores remodeled and minor expansions not requiring store closure remain in the calculations. Certain items, such as sales return estimates and store liquidation sales, are excluded from the Company's calculation. Our definition and calculation of comparable store sales may differ from other companies in the retail industry. |
(3) | See Non-GAAP Financial Measures herein for additional information and reconciliation to the most directly comparable GAAP financial measure. In 2016, we revised our definitions of Adjusted EBITDA (non-GAAP), Adjusted net income/(loss) from continuing operations (non-GAAP) and Adjusted earnings/(loss) per share from continuing operations, diluted (non-GAAP) to include the mark-to-market adjustment for supplemental retirement plans and have revised the prior years' amounts accordingly. |
(4) | We discontinued the quarterly $0.20 per share dividend following the May 1, 2012 payment. |
(5) | Total debt includes long-term debt, net of unamortized debt issuance costs, including current maturities, capital leases, financing obligation, note payable and any borrowings under our revolving credit facility. |
2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||||
Number of department stores: | |||||||||||||||||||||
Beginning of year | 1,021 | 1,062 | 1,094 | 1,104 | 1,102 | ||||||||||||||||
Openings | 1 | — | 1 | — | 9 | (1) | |||||||||||||||
Closings | (9 | ) | (41 | ) | (33 | ) | (10 | ) | (7 | ) | (1) | ||||||||||
End of year | 1,013 | 1,021 | 1,062 | 1,094 | 1,104 | ||||||||||||||||
Gross selling space (square feet in millions) | 103.3 | 104.7 | 107.9 | 110.6 | 111.6 | ||||||||||||||||
Sales per gross square foot(2) | $ | 121 | $ | 120 | $ | 113 | $ | 107 | $ | 116 | |||||||||||
Sales per net selling square foot(2) | $ | 166 | $ | 165 | $ | 155 | $ | 147 | $ | 161 | |||||||||||
Number of the Foundry Big and Tall Supply Co. stores(3) | — | — | — | 10 | 10 |
(1) | Includes 3 relocations. |
(2) | Calculation includes the sales, including commission revenue, and square footage of department stores, including selling space allocated to services and licensed departments, that were open for the full fiscal year, as well as Internet sales. |
(3) | All stores opened during 2011 and closed during 2014. Gross selling space was 51 thousand square feet as of the end of 2013 and 2012. |
($ in millions) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Net income/(loss) from continuing operations | $ | 1 | $ | (513 | ) | $ | (717 | ) | $ | (1,278 | ) | $ | (795 | ) | ||||||
Add: Net interest expense | 363 | 405 | 406 | 352 | 226 | |||||||||||||||
Add: Loss on extinguishment of debt | 30 | 10 | 34 | 114 | — | |||||||||||||||
Total interest expense | 393 | 415 | 440 | 466 | 226 | |||||||||||||||
Add: Income tax expense/(benefit) | 1 | 9 | 23 | (430 | ) | (432 | ) | |||||||||||||
Add: Depreciation and amortization | 609 | 616 | 631 | 601 | 543 | |||||||||||||||
EBITDA (non-GAAP) | 1,004 | 527 | 377 | (641 | ) | (458 | ) | |||||||||||||
Add: Markdowns - inventory strategy alignment | — | — | — | — | 155 | |||||||||||||||
Add: Restructuring and management transition charges | 26 | 84 | 87 | 215 | 298 | |||||||||||||||
Add: Primary pension plan expense/(income) | 1 | 154 | (1) | (18 | ) | (52 | ) | (18 | ) | |||||||||||
Add: Mark-to-market adjustment for supplemental retirement plans (2) | 11 | — | 12 | (2 | ) | 47 | ||||||||||||||
Less: Net gain on the sale of non-operating assets | (5 | ) | (9 | ) | (25 | ) | (132 | ) | (397 | ) | ||||||||||
Less: Proportional share of net income from home office land joint venture | (28 | ) | (41 | ) | (53 | ) | — | — | ||||||||||||
Less: Certain net gains | — | — | (88 | ) | (3) | — | — | |||||||||||||
Adjusted EBITDA (non-GAAP) (2) | $ | 1,009 | $ | 715 | $ | 292 | $ | (612 | ) | $ | (373 | ) |
(1) | Includes $52 million mark-to-market adjustment. |
(2) | In 2016, we revised our definitions of Adjusted EBITDA (non-GAAP), Adjusted net income/(loss) from continuing operations (non-GAAP) and Adjusted earnings/(loss) per share from continuing operations, diluted (non-GAAP) to include the mark-to-market adjustment for supplemental retirement plans and have revised the prior years' amounts accordingly. |
(3) | Represents the net gain on the sale of one department store location and the net gain recognized on a payment received from a landlord to terminate an existing lease prior to its original expiration date. |
($ in millions, except per share data) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Net income/(loss) (GAAP) from continuing operations | $ | 1 | $ | (513 | ) | $ | (717 | ) | $ | (1,278 | ) | $ | (795 | ) | ||||||
Diluted EPS (GAAP) from continuing operations | $ | — | $ | (1.68 | ) | $ | (2.35 | ) | $ | (5.13 | ) | $ | (3.63 | ) | ||||||
Add: markdowns - inventory strategy alignment | — | — | — | — | 155 | |||||||||||||||
Add: restructuring and management transition charges | 26 | 84 | 87 | 215 | 298 | |||||||||||||||
Add/(deduct): primary pension plan expense/(income) | 1 | 154 | (1) | (18 | ) | (52 | ) | (18 | ) | |||||||||||
Add: Mark-to-market adjustment for supplemental retirement plans (7) | 11 | — | 12 | (2 | ) | 47 | ||||||||||||||
Add: Loss on extinguishment of debt | 30 | 10 | 34 | 114 | — | |||||||||||||||
Less: Net gain on sale or redemption of non-operating assets | (5 | ) | (9 | ) | (25 | ) | (132 | ) | (397 | ) | ||||||||||
Less: Proportional share of net income from home office land joint venture | (28 | ) | (41 | ) | (53 | ) | — | — | ||||||||||||
Less: Certain net gains | — | — | (88 | ) | — | — | ||||||||||||||
Less: Aggregate tax impact related to the above adjustments | — | (2) | — | (2) | 2 | (3) | (22 | ) | (4) | (41 | ) | (5) | ||||||||
Less: Tax impact resulting from other comprehensive income allocation | (12 | ) | (6) | — | — | (250 | ) | (6) | — | |||||||||||
Adjusted net income/(loss) (non-GAAP) from continuing operations (7) | $ | 24 | $ | (315 | ) | $ | (766 | ) | $ | (1,407 | ) | $ | (751 | ) | ||||||
Adjusted diluted EPS (non-GAAP) from continuing operations (7) | $ | 0.08 | $ | (1.03 | ) | $ | (2.51 | ) | $ | (5.64 | ) | $ | (3.43 | ) |
(1) | Includes $52 million mark-to-market adjustment. |
(2) | Reflects no tax effect due to the impact of the Company's tax valuation allowance. |
(3) | Tax effect represents state taxes payable in separately filing states related to the sale of assets. |
(4) | Tax effect for the three months ended May 4, 2013 was calculated using the Company's statutory rate of 38.82% and includes state taxes payable in separately filing states related to the sale of assets. The last nine months of 2013 reflects no tax effect due to the impact of the Company's tax valuation allowance. |
(5) | Tax effect was calculated using the effective tax rate for the transactions. |
(6) | Represents the tax benefits related to the allocation of tax expense to other comprehensive income items, including the amortization of actuarial losses and prior service costs related to the Primary Pension Plan and the results of our annual remeasurement of our pension plans. |
(7) | In 2016, we revised our definitions of Adjusted EBITDA (non-GAAP), Adjusted net income/(loss) from continuing operations (non-GAAP) and Adjusted earnings/(loss) per share from continuing operations, diluted (non-GAAP) to include the mark-to-market adjustment for supplemental retirement plans and have revised the prior years' amounts accordingly. |
($ in millions) | 2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||
Net cash provided by/(used in) operating activities (GAAP) | $ | 334 | $ | 440 | $ | 239 | $ | (1,814 | ) | $ | (10 | ) | |||||||
Less: | |||||||||||||||||||
Capital expenditures | (427 | ) | (320 | ) | (252 | ) | (951 | ) | (810 | ) | |||||||||
Dividends paid, common stock | — | — | — | — | (86 | ) | |||||||||||||
Plus: | |||||||||||||||||||
Proceeds from sale of operating assets | 96 | 11 | 70 | 19 | — | ||||||||||||||
Free cash flow (non-GAAP) | $ | 3 | $ | 131 | $ | 57 | $ | (2,746 | ) | $ | (906 | ) | |||||||
Net cash provided by/(used in) investing activities(1) | $ | (316 | ) | $ | (296 | ) | $ | (142 | ) | $ | (789 | ) | $ | (293 | ) | ||||
Net cash provided by/(used in) financing activities | $ | (31 | ) | $ | (562 | ) | $ | (294 | ) | $ | 3,188 | $ | (274 | ) |
(1) | Net cash provided by/(used in) investing activities includes capital expenditures and proceeds from sale of operating assets, which are also included in our computation of free cash flow. |
• | Beauty; |
• | Home refresh; |
• | Omnichannel; |
• | Pricing strategy; and |
• | Women's apparel business. |
▪ | Sales were $12,547 million, a decrease of 0.6% as compared to 2015, and comparable store sales were flat for the year. |
▪ | Gross margin as a percentage of sales was 35.7% compared to 36.0% last year and was negatively impacted by the continued growth of our Internet business and the introduction of major appliance showrooms. |
▪ | Selling, general and administrative (SG&A) expenses decreased $237 million, or 6.3%, as compared to 2015. These savings were primarily driven by lower incentive compensation, store controllable costs, lower corporate overhead and more efficient advertising spend. |
▪ | We delivered a $514 million improvement in net income over the prior year to $1 million, or $0.00 per share, our first positive net income since 2010, compared to a net loss of $513 million, or $1.68 per share, in 2015. Results for 2016 included the following amounts that are not directly related to our ongoing core business operations: |
▪ | $26 million, or $0.08 per share, of restructuring and management transition charges; |
▪ | $1 million, for the Primary Pension Plan expense/(income); |
▪ | $11 million, or $0.04 per share, for the MTM adjustment for supplemental retirement plans; |
▪ | $30 million, or $0.10 per share, for the loss on extinguishment of debt; |
▪ | $5 million, or $0.02 per share, for the net gain on the sale of non-operating assets; |
▪ | $28 million, or $0.09 per share, for our proportional share of net income from our joint venture formed to develop the excess property adjacent to our home office facility in Plano, Texas (Home Office Land Joint Venture); and |
▪ | $12 million, or $0.04 per share, for the tax impact resulting from other comprehensive income allocation. |
▪ | EBITDA was $1,004 million for 2016, an improvement of $477 million compared to EBITDA of $527 million in 2015. Adjusted EBITDA was $1,009 million for 2016 compared to adjusted EBITDA of $715 million in 2015. |
▪ | We completed the refinancing of our $2.25 billion five-year senior secured term loan facility entered into in 2013 (2013 Term Loan Facility) with an amended and restated $1.688 billion seven-year senior secured term loan facility (2016 Term Loan Facility) and the issuance of $500 million of 5.875% Senior Secured Notes due 2023 (Senior Secured Notes), resulting in a loss on extinguishment of debt of $34 million. The 2016 Term Loan Facility has a lower interest rate than the 2013 Term Loan Facility, representing a 75 basis point reduction and an extended maturity from 2018 to 2023. |
▪ | The Company's Board of Directors (Board) appointed Marvin R. Ellison as Chairman of the Board, effective August 1, 2016, in addition to his position of Chief Executive Officer. Mr. Ellison succeeds Myron E. Ullman, III who retired from the Company on August 1, 2016 in accordance with the transition plan previously outlined by the Company. |
▪ | We completed our roll out of over 500 new appliance showrooms. |
▪ | In December 2016, the Company sold excess land surrounding the Company's Home Office for $80 million and recognized a $62 million gain. |
▪ | Also in December 2016, the Company executed a sale-leaseback transaction for the Home Office that resulted in $216 million of net cash proceeds. As a result of certain terms precluding sale-leaseback accounting, the transaction was accounted for as a financing with the related property remaining on our balance sheet. |
▪ | Standard and Poor's Rating Services upgraded our corporate credit rating in March 2017 to B+ from B and Moody's Investors Service upgraded our corporate credit rating in September 2016 to B1 from B3. |
(in millions, except per share data) | 2016 | 2015 | 2014 | |||||||||
Total net sales | $ | 12,547 | $ | 12,625 | $ | 12,257 | ||||||
Percent increase/(decrease) from prior year | (0.6 | )% | 3.0 | % | 3.4 | % | ||||||
Comparable store sales increase/(decrease)(1) | — | % | 4.5 | % | 4.4 | % | ||||||
Gross margin | 4,476 | 4,551 | 4,261 | |||||||||
Operating expenses/(income): | ||||||||||||
Selling, general and administrative | 3,538 | 3,775 | 3,993 | |||||||||
Pension | 19 | 162 | (48 | ) | ||||||||
Depreciation and amortization | 609 | 616 | 631 | |||||||||
Real estate and other, net | (111 | ) | 3 | (148 | ) | |||||||
Restructuring and management transition | 26 | 84 | 87 | |||||||||
Total operating expenses | 4,081 | 4,640 | 4,515 | |||||||||
Operating income/(loss) | 395 | (89 | ) | (254 | ) | |||||||
As a percent of sales | 3.1 | % | (0.7 | )% | (2.1 | )% | ||||||
Loss on extinguishment of debt | 30 | 10 | 34 | |||||||||
Net interest expense | 363 | 405 | 406 | |||||||||
Income/(loss) before income taxes | 2 | (504 | ) | (694 | ) | |||||||
Income tax (benefit)/expense | 1 | 9 | 23 | |||||||||
Net income/(loss) | $ | 1 | $ | (513 | ) | $ | (717 | ) | ||||
EBITDA(2) | $ | 1,004 | $ | 527 | $ | 377 | ||||||
Adjusted EBITDA(2) | $ | 1,009 | $ | 715 | $ | 292 | ||||||
Adjusted net income/(loss) (non-GAAP)(2) | $ | 24 | $ | (315 | ) | $ | (766 | ) | ||||
Diluted EPS | $ | — | $ | (1.68 | ) | $ | (2.35 | ) | ||||
Adjusted diluted EPS (non-GAAP)(2) | $ | 0.08 | $ | (1.03 | ) | $ | (2.51 | ) | ||||
Weighted average shares used for diluted EPS | 313.0 | 305.9 | 305.2 |
(1) | Comparable store sales are presented on a 52-week basis and include sales from all stores, including sales from services and commissions earned from our in-store licensed departments, that have been open for 12 consecutive full fiscal months and Internet sales. Stores closed for an extended period are not included in comparable store sales calculations, while stores remodeled and minor expansions not requiring store closure remain in the calculations. Certain items, such as sales return estimates and store liquidation sales, are excluded from the Company's calculation. Our definition and calculation of comparable store sales may differ from other companies in the retail industry. |
(2) | See Item 6, Selected Financial Data, for a discussion of this non-GAAP financial measure and reconciliation to its most directly comparable GAAP financial measure. |
2016 | 2015 | ||||||
Total net sales (in millions) | $ | 12,547 | $ | 12,625 | |||
Sales percent increase/(decrease) | |||||||
Total net sales | (0.6 | )% | 3.0 | % | |||
Comparable store sales(1) | — | % | 4.5 | % | |||
Sales per gross square foot(2) | $ | 121 | $ | 120 |
(1) | Comparable store sales are presented on a 52-week basis and include sales from all stores, including sales from services and commissions earned from our in-store licensed departments, that have been open for 12 consecutive full fiscal months and Internet sales. Stores closed for an extended period are not included in comparable store sales calculations, while stores remodeled and minor expansions not requiring store closure remain in the calculations. Certain items, such as sales return estimates and store liquidation sales, are excluded from the Company's calculation. Our definition and calculation of comparable store sales may differ from other companies in the retail industry. |
(2) | Calculation includes the sales, including commission revenue, and square footage of department stores, including selling space allocated to services and licensed departments, that were open for the full fiscal year, as well as Internet sales. |
($ in millions) | 2016 | ||
Comparable store sales increase/(decrease) | $ | 2 | |
Sales related to new and closed stores, net | (76 | ) | |
Other revenues and sales adjustments | (4 | ) | |
Total net sales increase/(decrease) | $ | (78 | ) |
• | Stores increase Internet sales by providing customers opportunities to view, touch and/or try on physical merchandise before ordering online. |
• | Our website increases store sales as in-store customers have often pre-shopped online before shopping in the store, including verification of which stores have online merchandise in stock. |
• | Most Internet purchases are easily returned in our stores. |
• | JCPenney Rewards can be earned and redeemed online or in stores. |
• | In-store customers can order from our website with the assistance of associates in our stores or they can shop our website from the JCPenney app while inside the store. |
• | Customers who utilize our mobile application can receive mobile coupons to use when they check out both online or in our stores. |
• | Internet orders can be shipped from a dedicated jcpenney.com fulfillment center, a store, a store merchandise distribution center, a regional warehouse, directly from vendors or any combination of the above. |
• | Certain categories of store inventory can be accessed and purchased by jcpenney.com customers and shipped directly to the customer's home from the store. |
• | Internet orders can be shipped to stores for customer pick up. |
• | "Buy online and pick up in store same day" is now available in all of our stores. |
($ in millions) | 2016 | 2015 | ||||||
Primary pension plan expense/(income) | $ | 1 | $ | 154 | ||||
Supplemental pension plans expense/(income) | 18 | 8 | ||||||
Total pension expense/(income) | $ | 19 | $ | 162 |
($ in millions) | 2016 | 2015 | ||||||
Net gain from sale of non-operating assets | $ | (5 | ) | $ | (9 | ) | ||
Investment income from Home Office Land Joint Venture | (28 | ) | (41 | ) | ||||
Net gain from sale of operating assets | (73 | ) | (9 | ) | ||||
Asset impairments | — | 20 | ||||||
Other | (5 | ) | 42 | |||||
Total expense/(income) | $ | (111 | ) | $ | 3 |
($ in millions) | 2016 | 2015 | ||||||
Home office and stores | $ | 8 | $ | 42 | ||||
Management transition | 3 | 28 | ||||||
Other | 15 | 14 | ||||||
Total | $ | 26 | $ | 84 |
2015 | 2014 | ||||||
Total net sales (in millions) | $ | 12,625 | $ | 12,257 | |||
Sales percent increase/(decrease) | |||||||
Total net sales(1) | 3.0 | % | 3.4 | % | |||
Comparable store sales(2) | 4.5 | % | 4.4 | % | |||
Sales per gross square foot(3) | $ | 120 | $ | 113 |
(1) | Comparable store sales are presented on a 52-week basis and include sales from all stores, including sales from services and commissions earned from our in-store licensed departments, that have been open for 12 consecutive full fiscal months and Internet sales. Stores closed for an extended period are not included in comparable store sales calculations, while stores remodeled and minor expansions not requiring store closure remain in the calculations. Certain items, such as sales return estimates and store liquidation sales, are excluded from the Company's calculation. Our definition and calculation of comparable store sales may differ from other companies in the retail industry. |
(2) | Calculation includes the sales, including commission revenue, and square footage of department stores, including selling space allocated to services and licensed departments, that were open for the full fiscal year, as well as Internet sales. |
($ in millions) | 2015 | ||
Comparable store sales increase/(decrease) | $ | 538 | |
Sales related to closed stores, net | (175 | ) | |
Other revenues and sales adjustments | 5 | ||
Total net sales increase/(decrease) | $ | 368 |
($ in millions) | 2015 | 2014 | ||||||
Primary pension plan expense/(income) | $ | 154 | $ | (18 | ) | |||
Supplemental pension plans expense/(income) | 8 | (30 | ) | |||||
Total pension expense/(income) | $ | 162 | $ | (48 | ) |
($ in millions) | 2015 | 2014 | ||||||
Net gain from sale of non-operating assets | $ | (9 | ) | $ | (25 | ) | ||
Investment income from Home Office Land Joint Venture | (41 | ) | (53 | ) | ||||
Net gain from sale of operating assets | (9 | ) | (92 | ) | ||||
Store and other asset impairments | 20 | 30 | ||||||
Other | 42 | (8 | ) | |||||
Total expense/(income) | $ | 3 | $ | (148 | ) |
($ in millions) | 2015 | 2014 | ||||||
Home office and stores | $ | 42 | $ | 45 | ||||
Management transition | 28 | 16 | ||||||
Other | 14 | 26 | ||||||
Total | $ | 84 | $ | 87 |
• | Completed the refinancing of the 2013 Term Loan Facility with the amended and restated $1.688 billion 2016 Term Loan Facility and the issuance of $500 million aggregate principal amount of 5.875% Senior Secured Notes due 2023. |
• | Sold excess land surrounding our home office for $80 million and recognized a $62 million gain. |
• | Executed a sale-leaseback for the Home Office that resulted in $216 million of net cash proceeds. |
($ in millions) | 2016 | 2015 | 2014 | ||||||||
Cash and cash equivalents | $ | 887 | $ | 900 | $ | 1,318 | |||||
Merchandise inventory | 2,854 | 2,721 | 2,652 | ||||||||
Property and equipment, net | 4,599 | 4,816 | 5,148 | ||||||||
Total debt(1) | 4,836 | 4,805 | 5,321 | ||||||||
Stockholders’ equity | 1,354 | 1,309 | 1,914 | ||||||||
Total capital | 6,190 | 6,114 | 7,235 | ||||||||
Maximum capacity under our credit agreement | 2,350 | 2,350 | 1,850 | ||||||||
Cash flow from operating activities | 334 | 440 | 239 | ||||||||
Free cash flow (non-GAAP)(2) | 3 | 131 | 57 | ||||||||
Capital expenditures | 427 | 320 | 252 | ||||||||
Ratios: | |||||||||||
Debt-to-total capital(3) | 78.1 | % | 78.6 | % | 73.5 | % | |||||
Cash-to-debt(4) | 18.3 | % | 18.7 | % | 24.8 | % |
(1) | Total debt includes long-term debt, net of unamortized debt issuance costs, including current maturities, capital leases, financing obligation, note payable and any borrowings under our revolving credit facility. |
(2) | See Item 6, Selected Financial Data, for a discussion of this non-GAAP financial measure and reconciliation to its most directly comparable GAAP financial measure. |
(3) | Total debt divided by total capital. |
(4) | Cash and cash equivalents divided by total debt. |
($ in millions) | 2016 | 2015 | 2014 | ||||||||
Store renewals and updates | $ | 240 | $ | 170 | $ | 152 | |||||
Capitalized software | 100 | 93 | 39 | ||||||||
New and relocated stores | 17 | — | 30 | ||||||||
Technology and other | 70 | 57 | 31 | ||||||||
Total | $ | 427 | $ | 320 | $ | 252 |
Corporate | Outlook | ||
Fitch Ratings | B+ | Stable | |
Moody’s Investors Service, Inc. | B1 | Stable | |
Standard & Poor’s Ratings Services | B+ | Positive |
($ in millions) | Total | Less Than 1 Year | 1 - 3 Years | 3 - 5 Years | More Than 5 Years | ||||||||||||||
Recorded contractual obligations: | |||||||||||||||||||
Total debt, excluding unamortized debt issuance costs, capital leases, financing obligation and note payable | $ | 4,665 | $ | 263 | $ | 749 | $ | 484 | $ | 3,169 | |||||||||
Capital leases, financing obligation and note payable | 314 | 30 | 42 | 37 | 205 | ||||||||||||||
Unrecognized tax benefits(1) | 79 | 3 | — | — | 76 | ||||||||||||||
Contributions to non-qualified supplemental retirement and postretirement medical plans(2) | 147 | 26 | 34 | 29 | 58 | ||||||||||||||
$ | 5,205 | $ | 322 | $ | 825 | $ | 550 | $ | 3,508 | ||||||||||
Unrecorded contractual obligations: | |||||||||||||||||||
Interest payments on long-term debt(3) | $ | 4,981 | $ | 283 | (4) | $ | 519 | $ | 405 | $ | 3,774 | ||||||||
Operating leases(5) | 2,709 | 220 | 366 | 301 | 1,822 | ||||||||||||||
Standby and import letters of credit(6) | 157 | 157 | — | — | — | ||||||||||||||
Surety bonds(7) | 74 | 74 | — | — | — | ||||||||||||||
Contractual obligations(8) | 148 | 78 | 60 | 10 | — | ||||||||||||||
Purchase orders(9) | 1,691 | 1,691 | — | — | — | ||||||||||||||
$ | 9,760 | $ | 2,503 | $ | 945 | $ | 716 | $ | 5,596 | ||||||||||
Total | $ | 14,965 | $ | 2,825 | $ | 1,770 | $ | 1,266 | $ | 9,104 |
(1) | Represents management’s best estimate of the payments related to tax reserves for uncertain income tax positions. Based on the nature of these liabilities, the actual payments in any given year could vary significantly from these amounts. See Note 18 to the Consolidated Financial Statements. |
(2) | Represents expected cash payments through 2026. |
(3) | Includes interest expense related to our 2016 Term Loan of $538 million that was calculated using its interest rate as of January 28, 2017 for the anticipated amount outstanding each period, which assumes the required principal payments for the loan remain the same each quarter. |
(4) | Includes $78 million of accrued interest that is included in our Consolidated Balance Sheet at January 28, 2017. |
(5) | Represents future minimum lease payments for non-cancelable operating leases, including renewals determined to be reasonably assured. Future minimum lease payments have not been reduced for sublease income. |
(6) | Standby letters of credit, which totaled $157 million, are issued as collateral to a third-party administrator for self-insured workers’ compensation and general liability claims and to support our merchandise initiatives. There were no outstanding import letters of credit at January 28, 2017. |
(7) | Surety bonds are primarily for previously incurred and expensed obligations related to workers’ compensation and general liability claims. |
(8) | Consists primarily of (a) minimum purchase requirements for exclusive merchandise and fixtures; (b) royalty obligations; and (c) minimum obligations for professional services, energy services, software maintenance and network services. |
(9) | Amounts committed under open purchase orders for merchandise inventory of which a significant portion are cancelable without penalty prior to a date that precedes the vendor’s scheduled shipment date. |
• | Nature, frequency, and severity of current and cumulative financial reporting losses. A pattern of recent losses is heavily weighted as a source of negative evidence. In certain circumstances, historical information may not be as relevant due to a change in circumstances. |
• | Sources of future taxable income. Future reversals of existing temporary differences are heavily weighted sources of objectively verifiable positive evidence. Projections of future taxable income, exclusive of reversing temporary differences, are a source of positive evidence only when the projections are combined with a history of recent profits and can be reasonably estimated. Otherwise, these projections are considered inherently subjective and generally will not be sufficient to overcome negative evidence that includes cumulative losses in recent years, particularly if the projected future taxable income is dependent on an anticipated turnaround to profitability that has not yet been achieved. In such cases, we generally give these projections of future taxable income no weight for the purposes of our valuation allowance assessment. |
• | Tax planning strategies. If necessary and available, tax-planning strategies would be implemented to accelerate taxable amounts to utilize expiring net operating loss carryforwards. These strategies would be a source of additional positive evidence and, depending on their nature, could be heavily weighted. |
2016 | 2015 | 2014 | |||||||
Expected return on plan assets | 6.75 | % | 6.75 | % | 7.00 | % | |||
Discount rate for pension expense | 4.73 | % | 3.87 | % | 4.89 | % | |||
Discount rate for pension obligation | 4.40 | % | 4.73 | % | 3.87 | % |
J. C. PENNEY COMPANY, INC. | ||
(Registrant) | ||
By /s/ Andrew S. Drexler | ||
Andrew S. Drexler | ||
Senior Vice President, Chief Accounting Officer and Controller (principal accounting officer) | ||
Date: | March 24, 2017 |
Signatures | Title | Date | ||
Marvin R. Ellison* | Chairman of the Board and Chief Executive Officer; Director (principal executive officer) | March 24, 2017 | ||
Marvin R. Ellison | ||||
Edward J. Record* | Executive Vice President and Chief Financial Officer (principal financial officer) | March 24, 2017 | ||
Edward J. Record | ||||
/s/ Andrew S. Drexler | Senior Vice President, Chief Accounting Officer and Controller (principal accounting officer) | March 24, 2017 | ||
Andrew S. Drexler | ||||
Colleen C. Barrett* | Director | March 24, 2017 | ||
Colleen C. Barrett | ||||
Paul J. Brown* | Director | March 24, 2017 | ||
Paul J. Brown | ||||
Amanda Ginsberg* | Director | March 24, 2017 | ||
Amanda Ginsberg | ||||
B. Craig Owens* | Director | March 24, 2017 | ||
Craig Owens | ||||
Lisa A. Payne* | Director | March 24, 2017 | ||
Lisa A. Payne | ||||
J. Paul Raines* | Director | March 24, 2017 | ||
J. Paul Raines |
Signatures | Title | Date | ||
Leonard H. Roberts* | Director | March 24, 2017 | ||
Leonard H. Roberts | ||||
Javier G. Teruel* | Director | March 24, 2017 | ||
Javier G. Teruel | ||||
R. Gerald Turner* | Director | March 24, 2017 | ||
R. Gerald Turner | ||||
Ronald W. Tysoe* | Director | March 24, 2017 | ||
Ronald W. Tysoe |
*By: | /s/ Andrew S. Drexler | |
Andrew S. Drexler | ||
Attorney-in-fact |
Page | |
(In millions, except per share data) | 2016 | 2015 | 2014 | |||||||||
Total net sales | $ | 12,547 | $ | 12,625 | $ | 12,257 | ||||||
Cost of goods sold | 8,071 | 8,074 | 7,996 | |||||||||
Gross margin | 4,476 | 4,551 | 4,261 | |||||||||
Operating expenses/(income): | ||||||||||||
Selling, general and administrative (SG&A) | 3,538 | 3,775 | 3,993 | |||||||||
Pension | 19 | 162 | (48 | ) | ||||||||
Depreciation and amortization | 609 | 616 | 631 | |||||||||
Real estate and other, net | (111 | ) | 3 | (148 | ) | |||||||
Restructuring and management transition | 26 | 84 | 87 | |||||||||
Total operating expenses | 4,081 | 4,640 | 4,515 | |||||||||
Operating income/(loss) | 395 | (89 | ) | (254 | ) | |||||||
Loss on extinguishment of debt | 30 | 10 | 34 | |||||||||
Net interest expense | 363 | 405 | 406 | |||||||||
Income/(loss) before income taxes | 2 | (504 | ) | (694 | ) | |||||||
Income tax expense/(benefit) | 1 | 9 | 23 | |||||||||
Net income/(loss) | $ | 1 | $ | (513 | ) | $ | (717 | ) | ||||
Earnings/(loss) per share: | ||||||||||||
Basic | $ | — | $ | (1.68 | ) | $ | (2.35 | ) | ||||
Diluted | — | (1.68 | ) | (2.35 | ) | |||||||
Weighted average shares – basic | 308.1 | 305.9 | 305.2 | |||||||||
Weighted average shares – diluted | 313.0 | 305.9 | 305.2 |
($ in millions) | 2016 | 2015 | 2014 | |||||||||
Net income/(loss) | $ | 1 | $ | (513 | ) | $ | (717 | ) | ||||
Other comprehensive income/(loss), net of tax: | ||||||||||||
Foreign currency translation | ||||||||||||
Unrealized gain/(loss) (1) | — | — | (2 | ) | ||||||||
Retirement benefit plans | ||||||||||||
Net actuarial gain/(loss) arising during the period (2) | 1 | (213 | ) | (293 | ) | |||||||
Prior service credit/(cost) arising during the period (3) | 5 | — | (12 | ) | ||||||||
Reclassification of net actuarial (gain)/loss from a settlement (4) | — | 110 | — | |||||||||
Reclassification for net actuarial (gain)/loss (5) | 1 | 31 | 7 | |||||||||
Reclassification for amortization of prior service (credit)/cost (6) | — | 2 | (1 | ) | ||||||||
Cash flow hedges | ||||||||||||
Gain/(loss) on interest rate swaps (7) | 3 | (23 | ) | — | ||||||||
Reclassification for periodic settlements (8) | 8 | 6 | — | |||||||||
Deferred tax valuation allowance | — | (54 | ) | (190 | ) | |||||||
Total other comprehensive income/(loss), net of tax | 18 | (141 | ) | (491 | ) | |||||||
Total comprehensive income/(loss), net of tax | $ | 19 | $ | (654 | ) | $ | (1,208 | ) |
(1) | Net of $1 million in tax in 2014. |
(2) | Net of $(1) million in tax in 2016, $136 million in tax in 2015 and $186 million in tax in 2014. |
(3) | Net of $(3) million in tax in 2016, $0 million in tax in 2015 and $8 million in tax in 2014. |
(4) | Net of $(70) million in tax in 2015 and $180 million of pre-tax amount recognized in Pension in the Consolidated Statement of Operations. |
(5) | Net of $(1) million in tax in 2016, $(22) million in tax in 2015 and $(5) million in tax in 2014. Pre-tax amounts of $11 million in 2016, $53 million in 2015 and $12 million in 2014 were recognized in Pension in the Consolidated Statement of Operations. Pre-tax amounts of $(9) million in 2016 were recognized in SG&A in the Consolidated Statement of Operations. |
(6) | Net of $- million of tax in 2016, $(1) million of tax in 2015 and $- million of tax in 2014. Pre-tax amounts of $8 million in 2016, $8 million in 2015 and $7 million in 2014 were recognized in Pension in the Consolidated Statement of Operations. Pre-tax amounts of $(8) million in 2016, $(7) million in 2015 and $(8) million in 2014 were recognized in SG&A in the Consolidated Statement of Operations. |
(7) | Net of $(2) million and $15 million of tax in 2016 and 2015, respectively. |
(8) | Net of $(5) million and $(4) million of tax in 2016 and 2015, respectively. Pre-tax amounts of $13 million in 2016 and $10 million in 2015 were recognized in Net interest expense in the Consolidated Statement of Operations. |
(In millions, except per share data) | 2016 | 2015 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash in banks and in transit | $ | 125 | $ | 119 | ||||
Cash short-term investments | 762 | 781 | ||||||
Cash and cash equivalents | 887 | 900 | ||||||
Merchandise inventory | 2,854 | 2,721 | ||||||
Deferred taxes | 196 | 231 | ||||||
Prepaid expenses and other | 160 | 166 | ||||||
Total current assets | 4,097 | 4,018 | ||||||
Property and equipment | 4,599 | 4,816 | ||||||
Other assets | 618 | 608 | ||||||
Total Assets | $ | 9,314 | $ | 9,442 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Merchandise accounts payable | $ | 977 | $ | 925 | ||||
Other accounts payable and accrued expenses | 1,164 | 1,360 | ||||||
Current portion of capital leases, financing obligation and note payable | 15 | 26 | ||||||
Current maturities of long-term debt | 263 | 101 | ||||||
Total current liabilities | 2,419 | 2,412 | ||||||
Long-term capital leases, financing obligation and note payable | 219 | 10 | ||||||
Long-term debt | 4,339 | 4,668 | ||||||
Deferred taxes | 400 | 425 | ||||||
Other liabilities | 583 | 618 | ||||||
Total Liabilities | 7,960 | 8,133 | ||||||
Stockholders' Equity | ||||||||
Common stock(1) | 154 | 153 | ||||||
Additional paid-in capital | 4,679 | 4,654 | ||||||
Reinvested earnings/(accumulated deficit) | (3,006 | ) | (3,007 | ) | ||||
Accumulated other comprehensive income/(loss) | (473 | ) | (491 | ) | ||||
Total Stockholders’ Equity | 1,354 | 1,309 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 9,314 | $ | 9,442 |
(1) | 1,250 million shares of common stock are authorized with a par value of $0.50 per share. The total shares issued and outstanding were 308.3 million and 306.1 million as of January 28, 2017 and January 30, 2016, respectively. |
(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, 2014 | 304.6 | $ | 152 | $ | 4,571 | $ | (1,777 | ) | $ | 141 | $ | 3,087 | |||||||||||
Net income/(loss) | — | — | — | (717 | ) | — | (717 | ) | |||||||||||||||
Other comprehensive income/(loss) | — | — | — | — | (491 | ) | (491 | ) | |||||||||||||||
Stock-based compensation | 0.3 | — | 35 | — | — | 35 | |||||||||||||||||
January 31, 2015 | 304.9 | $ | 152 | $ | 4,606 | $ | (2,494 | ) | $ | (350 | ) | $ | 1,914 | ||||||||||
Net income/(loss) | — | — | — | (513 | ) | — | (513 | ) | |||||||||||||||
Other comprehensive income/(loss) | — | — | — | — | (141 | ) | (141 | ) | |||||||||||||||
Stock-based compensation | 1.2 | 1 | 48 | — | — | 49 | |||||||||||||||||
January 30, 2016 | 306.1 | $ | 153 | $ | 4,654 | $ | (3,007 | ) | $ | (491 | ) | $ | 1,309 | ||||||||||
Net income/(loss) | — | — | — | 1 | — | 1 | |||||||||||||||||
Other comprehensive income/(loss) | — | — | — | — | 18 | 18 | |||||||||||||||||
Stock-based compensation | 2.2 | 1 | 25 | — | — | 26 | |||||||||||||||||
January 28, 2017 | 308.3 | $ | 154 | $ | 4,679 | $ | (3,006 | ) | $ | (473 | ) | $ | 1,354 |
($ in millions) | 2016 | 2015 | 2014 | ||||||||
Cash flows from operating activities | |||||||||||
Net income/(loss) | $ | 1 | $ | (513 | ) | $ | (717 | ) | |||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||||||||
Restructuring and management transition | (1 | ) | 10 | 32 | |||||||
Asset impairments and other charges | 3 | 25 | 39 | ||||||||
Net gain on sale or redemption of non-operating assets | (5 | ) | (9 | ) | (25 | ) | |||||
Net gain on sale of operating assets | (73 | ) | (9 | ) | (92 | ) | |||||
Loss on extinguishment of debt | 30 | 10 | 34 | ||||||||
Depreciation and amortization | 609 | 616 | 631 | ||||||||
Benefit plans | (39 | ) | 127 | (78 | ) | ||||||
Stock-based compensation | 35 | 44 | 33 | ||||||||
Other comprehensive income tax benefits | (12 | ) | — | — | |||||||
Deferred taxes | 9 | — | 3 | ||||||||
Change in cash from: | |||||||||||
Inventory | (133 | ) | (69 | ) | 283 | ||||||
Prepaid expenses and other assets | 11 | 19 | (1 | ) | |||||||
Merchandise accounts payable | 52 | (72 | ) | 49 | |||||||
Current income taxes | (6 | ) | 4 | (10 | ) | ||||||
Accrued expenses and other | (147 | ) | 257 | 58 | |||||||
Net cash provided by/(used in) operating activities | 334 | 440 | 239 | ||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (427 | ) | (320 | ) | (252 | ) | |||||
Proceeds from sale or redemption of non-operating assets | 2 | 13 | 35 | ||||||||
Proceeds from sale of operating assets | 96 | 11 | 70 | ||||||||
Joint venture return of investment | 13 | — | 5 | ||||||||
Net cash provided by/(used in) investing activities | (316 | ) | (296 | ) | (142 | ) | |||||
Cash flows from financing activities | |||||||||||
Payment on short-term borrowings | — | — | (650 | ) | |||||||
Proceeds from issuance of long-term debt | 2,188 | — | 893 | ||||||||
Proceeds from borrowings under the credit facility | 667 | — | — | ||||||||
Payments of borrowings under the credit facility | (667 | ) | — | — | |||||||
Net proceeds from financing obligation | 216 | — | — | ||||||||
Premium on early retirement of debt | — | — | (33 | ) | |||||||
Payments of capital leases, financing obligation and note payable | (29 | ) | (33 | ) | (26 | ) | |||||
Payments of long-term debt | (2,349 | ) | (520 | ) | (412 | ) | |||||
Financing costs | (49 | ) | (4 | ) | (65 | ) | |||||
Proceeds from stock options exercised | 2 | — | — | ||||||||
Tax withholding payments for vested restricted stock | (10 | ) | (5 | ) | (1 | ) | |||||
Net cash provided by/(used in) financing activities | (31 | ) | (562 | ) | (294 | ) | |||||
Net increase/(decrease) in cash and cash equivalents | (13 | ) | (418 | ) | (197 | ) | |||||
Cash and cash equivalents at beginning of period | 900 | 1,318 | 1,515 | ||||||||
Cash and cash equivalents at end of period | $ | 887 | $ | 900 | $ | 1,318 |
Fiscal Year | Ended | Weeks | ||
2016 | January 28, 2017 | 52 | ||
2015 | January 30, 2016 | 52 | ||
2014 | January 31, 2015 | 52 |
2016 | 2015 | 2014 | |||||||
Women’s apparel | 24 | % | 25 | % | 26 | % | |||
Men’s apparel and accessories | 22 | % | 22 | % | 22 | % | |||
Home | 13 | % | 12 | % | 12 | % | |||
Women’s accessories, including Sephora | 13 | % | 12 | % | 11 | % | |||
Children’s apparel | 10 | % | 10 | % | 10 | % | |||
Footwear and handbags | 8 | % | 8 | % | 8 | % | |||
Jewelry | 6 | % | 6 | % | 6 | % | |||
Services and other | 4 | % | 5 | % | 5 | % | |||
100 | % | 100 | % | 100 | % |
Estimated Useful Lives | ||||||||||
($ in millions) | (Years) | 2016 | 2015 | |||||||
Land | N/A | $ | 249 | $ | 272 | |||||
Buildings | 50 | 4,859 | 4,877 | |||||||
Furniture and equipment | 3-20 | 1,963 | 2,064 | |||||||
Leasehold improvements(1) | 1,254 | 1,244 | ||||||||
Capital leases (equipment) | 3-5 | 116 | 116 | |||||||
Accumulated depreciation | (3,842 | ) | (3,757 | ) | ||||||
Property and equipment, net | $ | 4,599 | $ | 4,816 |
(1) | Leasehold improvements are depreciated over the shorter of the estimated useful lives of the improvements or the term of the lease, including renewals determined to be reasonably assured. |
• | Valuation Method. We estimate the fair value of stock option awards on the date of grant using primarily the binomial lattice model. We believe that the binomial lattice model is a more accurate model for valuing employee stock options since it better reflects the impact of stock price changes on option exercise behavior. |
• | Expected Term. Our expected option term represents the average period that we expect stock options to be outstanding and is determined based on our historical experience, giving consideration to contractual terms, vesting schedules, anticipated stock prices and expected future behavior of option holders. |
• | Expected Volatility. Our expected volatility is based on a blend of the historical volatility of JCPenney stock combined with an estimate of the implied volatility derived from exchange traded options. |
• | Risk-Free Interest Rate. Our risk-free interest rate is based on zero-coupon U.S. Treasury yields in effect at the date of grant with the same period as the expected option life. |
• | Expected Dividend Yield. The dividend assumption is based on our current expectations about our dividend policy. |
(in millions, except per share data) | 2016 | 2015 | 2014 | |||||||||
Earnings/(loss) | ||||||||||||
Net income/(loss) | $ | 1 | $ | (513 | ) | $ | (717 | ) | ||||
Shares | ||||||||||||
Weighted average common shares outstanding (basic shares) | 308.1 | 305.9 | 305.2 | |||||||||
Adjustment for assumed dilution: | ||||||||||||
Stock options and restricted stock awards | 4.9 | — | — | |||||||||
Weighted average shares assuming dilution (diluted shares) | 313.0 | 305.9 | 305.2 | |||||||||
EPS | ||||||||||||
Basic | $ | — | $ | (1.68 | ) | $ | (2.35 | ) | ||||
Diluted | $ | — | $ | (1.68 | ) | $ | (2.35 | ) |
(Shares in millions) | 2016 | 2015 | 2014 | ||||||
Stock options, restricted stock awards and a warrant | 17.8 | 34.1 | 26.8 |
($ in millions) | 2016 | 2015 | |||||
Capitalized software, net | $ | 265 | $ | 232 | |||
Indefinite-lived intangible assets, net (1) | 275 | 268 | |||||
Realty investments (Note 17) | 13 | 31 | |||||
Revolving credit facility unamortized costs, net | 30 | 42 | |||||
Other | 35 | 35 | |||||
Total | $ | 618 | $ | 608 |
($ in millions) | 2016 | 2015 | ||||||
Accrued salaries, vacation and bonus | $ | 204 | $ | 326 | ||||
Customer gift cards | 215 | 222 | ||||||
Taxes other than income taxes | 127 | 110 | ||||||
Occupancy and rent-related | 35 | 40 | ||||||
Interest | 78 | 88 | ||||||
Advertising | 82 | 76 | ||||||
Current portion of workers’ compensation and general liability self-insurance | 47 | 55 | ||||||
Restructuring and management transition (Note 16) | 29 | 46 | ||||||
Current portion of retirement plan liabilities (Note 15) | 26 | 46 | ||||||
Capital expenditures | 33 | 13 | ||||||
Unrecognized tax benefits (Note 18) | 3 | 3 | ||||||
Other | 285 | 335 | ||||||
Total | $ | 1,164 | $ | 1,360 |
($ in millions) | 2016 | 2015 | ||||||
Supplemental pension and other postretirement benefit plan liabilities (Note 15) | $ | 126 | $ | 138 | ||||
Long-term portion of workers’ compensation and general liability insurance | 131 | 153 | ||||||
Deferred developer/tenant allowances | 143 | 113 | ||||||
Deferred rent liability | 97 | 91 | ||||||
Primary pension plan (Note 15) | 18 | 40 | ||||||
Interest rate swaps (Notes 8 and 9) | 10 | 28 | ||||||
Unrecognized tax benefits (Note 18) | 1 | 4 | ||||||
Restructuring and management transition (Note 16) | 2 | 5 | ||||||
Other | 55 | 46 | ||||||
Total | $ | 583 | $ | 618 |
($ in millions) | 2016 | 2015 | Line Item in the Financial Statements | ||||||
Gain/(loss) recognized in other comprehensive income/(loss) | $ | 5 | $ | (38 | ) | Accumulated other comprehensive income | |||
Gain/(loss) recognized in net income/(loss) | (13 | ) | (10 | ) | Interest expense |
Asset Derivatives at Fair Value | Liability Derivatives at Fair Value | |||||||||||||||||
($ in millions) | Balance Sheet Location | 2016 | 2015 | Balance Sheet Location | 2016 | 2015 | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||
Interest rate swaps | N/A | $ | — | $ | — | Other accounts payable and accrued expenses | $ | 2 | $ | 2 | ||||||||
Interest rate swaps | N/A | — | — | Other liabilities | 10 | 28 | ||||||||||||
Total derivatives designated as hedging instruments | $ | — | $ | — | $ | 12 | $ | 30 |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities. |
• | Level 2 — Significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. |
• | Level 3 — Significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. |
As of January 28, 2017 | As of January 30, 2016 | |||||||||||||||
($ in millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Total debt, excluding unamortized debt issuance costs, capital leases, financing obligation and notes payable | $ | 4,665 | $ | 4,495 | $ | 4,830 | $ | 4,248 |
($ in millions) | 2016 | 2015 | ||||||
Issue: | ||||||||
5.65% Senior Notes Due 2020 (1) | $ | 400 | $ | 400 | ||||
5.75% Senior Notes Due 2018 (1) | 265 | 300 | ||||||
5.875% Senior Secured Notes Due 2023 (1) | 500 | — | ||||||
6.375% Senior Notes Due 2036 (1) | 388 | 400 | ||||||
6.9% Notes Due 2026 | 2 | 2 | ||||||
7.125% Debentures Due 2023 | 10 | 10 | ||||||
7.4% Debentures Due 2037 | 313 | 326 | ||||||
7.625% Notes Due 2097 | 500 | 500 | ||||||
7.65% Debentures Due 2016 | — | 78 | ||||||
7.95% Debentures Due 2017 | 220 | 220 | ||||||
8.125% Senior Notes Due 2019 | 400 | 400 | ||||||
2016 Term Loan Facility | 1,667 | — | ||||||
2013 Term Loan Facility | — | 2,194 | ||||||
Total debt, excluding unamortized debt issuance costs, capital leases, financing obligation and note payable | 4,665 | 4,830 | ||||||
Unamortized debt issuance costs | (63 | ) | (61 | ) | ||||
Total debt, excluding capital leases, financing obligation and note payable | 4,602 | 4,769 | ||||||
Less: current maturities | 263 | 101 | ||||||
Total long-term debt, excluding capital leases, financing obligation and note payable | $ | 4,339 | $ | 4,668 | ||||
Weighted-average interest rate at year end | 6.3 | % | 6.5 | % | ||||
Weighted-average maturity (in years) | 15 years |
(1) | These debt issuances contain a change of control provision that would obligate us, at the holders’ option, to repurchase the debt at a price of 101%. These provisions trigger if there were a beneficial ownership change of 50% or more of our common stock. |
($ in millions) | |||
2017 | $ | 263 | |
2018 | 307 | ||
2019 | 442 | ||
2020 | 442 | ||
2021 | 42 | ||
Thereafter | 3,169 | ||
Total | $ | 4,665 |
($ in millions) | Net Actuarial Gain/(Loss) | Prior Service Credit/(Cost) | Foreign Currency Translation | Gain/(Loss) on Cash Flow Hedges | Accumulated Other Comprehensive Income/(Loss) | |||||||||||||||
January 31, 2015 | $ | (308 | ) | $ | (40 | ) | $ | (2 | ) | $ | — | $ | (350 | ) | ||||||
Current period change | (115 | ) | 2 | — | (28 | ) | (141 | ) | ||||||||||||
January 30, 2016 | $ | (423 | ) | $ | (38 | ) | $ | (2 | ) | $ | (28 | ) | $ | (491 | ) | |||||
Current period change | 2 | 5 | — | 11 | 18 | |||||||||||||||
January 28, 2017 | $ | (421 | ) | $ | (33 | ) | $ | (2 | ) | $ | (17 | ) | $ | (473 | ) |
($ in millions) | 2016 | 2015 | 2014 | ||||||||
Stock awards | $ | 27 | $ | 32 | $ | 20 | |||||
Stock options | 8 | 12 | 13 | ||||||||
Total stock-based compensation(1) | $ | 35 | $ | 44 | $ | 33 | |||||
Total income tax benefit recognized for stock-based compensation arrangements | $ | — | $ | — | $ | — |
(1) | Excludes $0 million, $9 million and $3 million for 2016, 2015 and 2014, respectively, of stock-based compensation costs reported in restructuring and management transition charges (Note 16). |
Shares (in thousands) | Weighted - Average Exercise Price Per Share | Weighted - Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value ($ in millions)(1) | ||||||||||
Outstanding at January 30, 2016 | 16,096 | $ | 24 | ||||||||||
Granted | 2,072 | 11 | |||||||||||
Exercised | (223 | ) | 8 | ||||||||||
Forfeited/canceled | (3,527 | ) | 43 | ||||||||||
Outstanding at January 28, 2017 | 14,418 | 18 | 5.6 | $ | — | ||||||||
Exercisable at January 28, 2017 | 8,169 | 25 | 3.6 | $ | — |
(1) | The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option at year end. |
($ in millions) | 2016 | 2015 | 2014 | |||||||||
Proceeds from stock options exercised | $ | 2 | $ | — | $ | — | ||||||
Intrinsic value of stock options exercised | — | — | — | |||||||||
Tax benefit related to stock-based compensation | — | — | — | |||||||||
Excess tax benefits realized on stock-based compensation | — | — | — |
2016 | 2015 | 2014 | ||||
Weighted-average expected option term | 4.7 years | 4.6 years | 4.1 years | |||
Weighted-average expected volatility | 54.22% | 51.46% | 60.00% | |||
Weighted-average risk-free interest rate | 1.38% | 1.50% | 1.60% | |||
Weighted-average expected dividend yield (1) | —% | —% | —% | |||
Expected dividend yield range (1) | —% | —% | —% |
Time-Based Stock Awards | Performance-Based Stock Awards | ||||||||||||
(shares in thousands) | Number of Units | Weighted-Average Grant Date Fair Value | Number of Units | Weighted-Average Grant Date Fair Value | |||||||||
Non-vested at January 30, 2016 | 7,698 | $ | 9 | 2,557 | $ | 7 | |||||||
Granted | 1,501 | 10 | 1,071 | 11 | |||||||||
Vested | (2,793 | ) | 9 | (418 | ) | 7 | |||||||
Forfeited/canceled | (588 | ) | 9 | (82 | ) | 8 | |||||||
Non-vested at January 28, 2017 | 5,818 | 9 | 3,128 | 8 |
($ in millions) | 2016 | 2015 | 2014 | |||||||||
Real property base rent and straight-lined step rent expense | $ | 214 | $ | 221 | $ | 233 | ||||||
Real property contingent rent expense (based on sales) | 7 | 7 | 8 | |||||||||
Personal property rent expense | 31 | 39 | 53 | |||||||||
Total rent expense | $ | 252 | $ | 267 | $ | 294 | ||||||
Less: sublease income(1) | (11 | ) | (11 | ) | (13 | ) | ||||||
Net rent expense | $ | 241 | $ | 256 | $ | 281 |
(1) | Sublease income is reported in Real estate and other, net. |
($ in millions) | |||
2017 | $ | 220 | |
2018 | 193 | ||
2019 | 173 | ||
2020 | 158 | ||
2021 | 143 | ||
Thereafter | 1,822 | ||
Less: sublease income | (16 | ) | |
Total minimum lease payments | $ | 2,693 |
($ in millions) | |||
2017 | $ | 30 | |
2018 | 21 | ||
2019 | 21 | ||
2020 | 18 | ||
2021 | 19 | ||
Thereafter | 205 | ||
Less: sublease income | — | ||
Total payments | 314 | ||
Plus: amount representing residual asset balance | 77 | ||
Less: amounts representing interest | (157 | ) | |
Present value of net minimum lease obligations, financing obligation and note payable | $ | 234 |
Defined Benefit Pension Plans |
Primary Pension Plan – funded |
Supplemental retirement plans – unfunded |
Other Benefit Plans |
Postretirement benefits – medical and dental |
Defined contribution plans: |
401(k) savings, profit-sharing and stock ownership plan |
Deferred compensation plan |
($ in millions) | ||||||||||||
Primary Pension Plan | 2016 | 2015 | 2014 | |||||||||
Service cost | $ | 55 | $ | 69 | $ | 61 | ||||||
Interest cost | 153 | 196 | 211 | |||||||||
Expected return on plan assets | (215 | ) | (357 | ) | (348 | ) | ||||||
Actuarial loss/(gain) | — | 52 | — | |||||||||
Amortization of prior service cost/(credit) | 8 | 8 | 7 | |||||||||
Settlement expense | — | 180 | — | |||||||||
Other | — | 6 | — | |||||||||
Loss/(gain) on transfer of benefits | — | — | 51 | |||||||||
Net periodic benefit expense/(income) | $ | 1 | $ | 154 | $ | (18 | ) | |||||
Supplemental Pension Plans | ||||||||||||
Service cost | $ | — | $ | — | $ | — | ||||||
Interest cost | 7 | 7 | 9 | |||||||||
Actuarial loss/(gain) | 11 | 1 | 12 | |||||||||
Amortization of prior service cost/(credit) | — | — | — | |||||||||
Loss/(gain) on transfer of benefits | — | — | (51 | ) | ||||||||
Net periodic benefit expense/(income) | $ | 18 | $ | 8 | $ | (30 | ) | |||||
Primary and Supplemental Pension Plans Total | ||||||||||||
Service cost | $ | 55 | $ | 69 | $ | 61 | ||||||
Interest cost | 160 | 203 | 220 | |||||||||
Expected return on plan assets | (215 | ) | (357 | ) | (348 | ) | ||||||
Amortization of actuarial loss/(gain) | 11 | 53 | 12 | |||||||||
Amortization of prior service cost/(credit) | 8 | 8 | 7 | |||||||||
Settlement expense | — | 180 | — | |||||||||
Other | — | 6 | — | |||||||||
Loss/(gain) on transfer of benefits | — | — | — | |||||||||
Net periodic benefit expense/(income) | $ | 19 | $ | 162 | $ | (48 | ) |
2016 | 2015 | 2014 | |||||||
Expected return on plan assets | 6.75 | % | 6.75 | % | 7.00 | % | |||
Discount rate | 4.73 | % | 3.87 | % | 4.89 | % | |||
Salary increase | 3.9 | % | 3.5 | % | 3.5 | % |
Primary Pension Plan | Supplemental Plans | |||||||||||||||
($ in millions) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Change in PBO | ||||||||||||||||
Beginning balance | $ | 3,327 | $ | 5,254 | $ | 176 | $ | 191 | ||||||||
Service cost | 55 | 69 | — | — | ||||||||||||
Interest cost | 153 | 196 | 7 | 7 | ||||||||||||
Amendments | — | — | — | — | ||||||||||||
Settlements | — | (1,555 | ) | — | — | |||||||||||
Transfer of benefits | — | — | — | — | ||||||||||||
Actuarial loss/(gain) | 151 | (247 | ) | 10 | (3 | ) | ||||||||||
Benefits (paid) | (213 | ) | (390 | ) | (41 | ) | (19 | ) | ||||||||
Balance at measurement date | $ | 3,473 | $ | 3,327 | $ | 152 | $ | 176 | ||||||||
Change in fair value of plan assets | ||||||||||||||||
Beginning balance | $ | 3,287 | $ | 5,474 | $ | — | $ | — | ||||||||
Company contributions | — | — | 41 | 19 | ||||||||||||
Actual return on assets(1) | 381 | (242 | ) | — | — | |||||||||||
Settlements | — | (1,555 | ) | — | — | |||||||||||
Benefits (paid) | (213 | ) | (390 | ) | (41 | ) | (19 | ) | ||||||||
Balance at measurement date | $ | 3,455 | $ | 3,287 | $ | — | $ | — | ||||||||
Funded status of the plan | $ | (18 | ) | (2) | $ | (40 | ) | (2) | $ | (152 | ) | (3) | $ | (176 | ) | (3) |
(1) | Includes plan administrative expenses. |
(2) | $18 million in 2016 and $40 million in 2015 are included in Other liabilities in the Consolidated Balance Sheets. |
(3) | $26 million in 2016 and $46 million in 2015 were included in Other accounts payable and accrued expenses on the Consolidated Balance Sheets, and the remaining amounts were included in Other liabilities. |
Primary Pension Plan | Supplemental Plans | ||||||||||||||
($ in millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net actuarial loss/(gain) | $ | 318 | $ | 333 | $ | 12 | $ | 13 | |||||||
Prior service cost/(credit) | 49 | 57 | (4 | ) | (4 | ) | |||||||||
Total | $ | 367 | (1) | $ | 390 | $ | 8 | $ | 9 |
(1) | In 2017, approximately $8 million for the Primary Pension Plan is expected to be amortized from Accumulated other comprehensive income/(loss) into net periodic benefit expense/(income) included in Pension in the Consolidated Statement of Operations. |
2016 | 2015 | 2014 | |||||||
Discount rate | 4.40 | % | 4.73 | % | 3.87 | % | |||
Salary progression rate | 3.9 | % | 3.9 | % | 3.5 | % |
2016 Target | Plan Assets | |||||||
Asset Class | Allocation Ranges | 2016 | 2015 | |||||
Equity | 20% - 40% | 22 | % | 16 | % | |||
Fixed income | 50% - 65% | 60 | % | 54 | % | |||
Real estate, cash and other investments | 10% - 20% | 18 | % | 30 | % | |||
Total | 100 | % | 100 | % |
Investments at Fair Value at January 28, 2017 | ||||||||||||||||
($ in millions) | Level 1(1) | Level 2(1) | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Cash | $ | 2 | $ | — | $ | — | $ | 2 | ||||||||
Common collective trusts | — | 88 | — | 88 | ||||||||||||
Cash and cash equivalents total | 2 | 88 | — | 90 | ||||||||||||
Common collective trusts – international | — | 148 | — | 148 | ||||||||||||
Equity securities – domestic | 421 | — | — | 421 | ||||||||||||
Equity securities – international | 113 | — | — | 113 | ||||||||||||
Equity securities total | 534 | 148 | — | 682 | ||||||||||||
Common collective trusts | — | 864 | — | 864 | ||||||||||||
Corporate bonds | — | 919 | 7 | 926 | ||||||||||||
Swaps | — | 934 | — | 934 | ||||||||||||
Government securities | — | 185 | — | 185 | ||||||||||||
Mortgage backed securities | — | 4 | — | 4 | ||||||||||||
Other fixed income | — | 149 | — | 149 | ||||||||||||
Fixed income total | — | 3,055 | 7 | 3,062 | ||||||||||||
Public REITs | 37 | — | — | 37 | ||||||||||||
Private real estate | — | 15 | — | 15 | ||||||||||||
Real estate total | 37 | 15 | — | 52 | ||||||||||||
Total investment assets at fair value | $ | 573 | $ | 3,306 | $ | 7 | $ | 3,886 | ||||||||
Liabilities | ||||||||||||||||
Swaps | $ | — | $ | (928 | ) | $ | — | $ | (928 | ) | ||||||
Other fixed income | — | (6 | ) | — | (6 | ) | ||||||||||
Fixed income total | — | (934 | ) | — | (934 | ) | ||||||||||
Total liabilities at fair value | $ | — | $ | (934 | ) | $ | — | $ | (934 | ) | ||||||
Accounts payable, net | (76 | ) | ||||||||||||||
Investments at Net Asset Value (NAV)(2) | ||||||||||||||||
Private equity | $ | 220 | ||||||||||||||
Private real estate | 135 | |||||||||||||||
Hedge funds | 224 | |||||||||||||||
Total investments at NAV | $ | 579 | ||||||||||||||
Total net assets | $ | 3,455 |
(1) | There were no significant transfers in or out of level 1 or 2 investments. |
(2) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheet. |
Investments at Fair Value at January 30, 2016 | ||||||||||||||||
($ in millions) | Level 1(1) | Level 2(1) | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Cash | $ | 86 | $ | — | $ | — | $ | 86 | ||||||||
Common collective trusts | — | 427 | — | 427 | ||||||||||||
Cash and cash equivalents total | 86 | 427 | — | 513 | ||||||||||||
Common collective trusts – international | — | 166 | — | 166 | ||||||||||||
Equity securities – domestic | 192 | — | — | 192 | ||||||||||||
Equity securities – international | 89 | — | — | 89 | ||||||||||||
Equity securities total | 281 | 166 | — | 447 | ||||||||||||
Common collective trusts | — | 676 | — | 676 | ||||||||||||
Corporate bonds | — | 771 | 5 | 776 | ||||||||||||
Swaps | — | 787 | — | 787 | ||||||||||||
Government securities | — | 230 | — | 230 | ||||||||||||
Mortgage backed securities | — | 4 | — | 4 | ||||||||||||
Other fixed income | — | 155 | 3 | 158 | ||||||||||||
Fixed income total | — | 2,623 | 8 | 2,631 | ||||||||||||
Public REITs | 34 | — | — | 34 | ||||||||||||
Private real estate | — | 14 | — | 14 | ||||||||||||
Real estate total | 34 | 14 | — | 48 | ||||||||||||
Total investment assets at fair value | $ | 401 | $ | 3,230 | $ | 8 | $ | 3,639 | ||||||||
Liabilities | ||||||||||||||||
Swaps | $ | — | $ | (801 | ) | $ | — | $ | (801 | ) | ||||||
Other fixed income | — | (6 | ) | — | (6 | ) | ||||||||||
Fixed income total | — | (807 | ) | — | (807 | ) | ||||||||||
Total liabilities at fair value | $ | — | $ | (807 | ) | $ | — | $ | (807 | ) | ||||||
Accounts payable, net | (158 | ) | ||||||||||||||
Investments at Net Asset Value (NAV)(2) | ||||||||||||||||
Private equity | $ | 248 | ||||||||||||||
Private real estate | 151 | |||||||||||||||
Hedge funds | 214 | |||||||||||||||
Total investments at NAV | $ | 613 | ||||||||||||||
Total net assets | $ | 3,287 |
(1) | There were no significant transfers in or out of level 1 or 2 investments. |
(2) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheet. |
2016 | |||||||
($ in millions) | Corporate Loans | Corporate Bonds | |||||
Balance, beginning of year | $ | 3 | $ | 5 | |||
Transfers, net | — | — | |||||
Realized gains/(loss) | — | 3 | |||||
Unrealized (losses)/gains | — | (4 | ) | ||||
Purchases and issuances | — | 15 | |||||
Sales, maturities and settlements | (3 | ) | (12 | ) | |||
Balance, end of year | $ | — | $ | 7 |
2015 | |||||||
($ in millions) | Corporate Loans | Corporate Bonds | |||||
Balance, beginning of year | $ | 5 | $ | 7 | |||
Realized gains/(loss) | — | (3 | ) | ||||
Unrealized (losses)/gains | — | 2 | |||||
Purchases and issuances | — | 1 | |||||
Sales, maturities and settlements | (2 | ) | (2 | ) | |||
Balance, end of year | $ | 3 | $ | 5 |
($ in millions) | Primary Plan Benefits | Supplemental Plan Benefits | ||||||
2017 | $ | 203 | $ | 26 | ||||
2018 | 205 | 18 | ||||||
2019 | 210 | 16 | ||||||
2020 | 215 | 16 | ||||||
2021 | 221 | 13 | ||||||
2022-2026 | 1,160 | 58 |
• | Home office and stores -- charges for actions to reduce our store and home office expenses including employee termination benefits, store lease termination and impairment charges; |
• | Management transition -- charges related to implementing changes within our management leadership team for both incoming and outgoing members of management; and |
• | Other -- charges related primarily to contract termination costs and other costs associated with our previous shops strategy. |
Cumulative Amount From Program Inception Through | ||||||||||||||||
($ in millions) | 2016 | 2015 | 2014 | 2016 | ||||||||||||
Home office and stores | $ | 8 | $ | 42 | $ | 45 | $ | 297 | ||||||||
Management transition | 3 | 28 | 16 | 255 | ||||||||||||
Other | 15 | 14 | 26 | 178 | ||||||||||||
Total | $ | 26 | $ | 84 | $ | 87 | $ | 730 |
($ in millions) | Home Office and Stores | Management Transition | Other | Total | ||||||||||||
January 31, 2015 | $ | 9 | $ | — | $ | 17 | $ | 26 | ||||||||
Charges | 42 | 28 | 14 | 84 | ||||||||||||
Cash payments | (33 | ) | (9 | ) | (7 | ) | (49 | ) | ||||||||
Non-cash | — | (9 | ) | (1 | ) | (10 | ) | |||||||||
January 30, 2016 | 18 | 10 | 23 | 51 | ||||||||||||
Charges | 8 | 3 | 15 | 26 | ||||||||||||
Cash payments | (23 | ) | (13 | ) | (11 | ) | (47 | ) | ||||||||
Non-cash | 1 | — | — | 1 | ||||||||||||
January 28, 2017 | $ | 4 | $ | — | $ | 27 | $ | 31 |
($ in millions) | 2016 | 2015 | 2014 | |||||||||
Net gain from sale of non-operating assets | $ | (5 | ) | $ | (9 | ) | $ | (25 | ) | |||
Investment income from Home Office Land Joint Venture | (28 | ) | (41 | ) | (53 | ) | ||||||
Net gain from sale of operating assets | (73 | ) | (9 | ) | (92 | ) | ||||||
Store and other asset impairments | — | 20 | 30 | |||||||||
Other | (5 | ) | 42 | (8 | ) | |||||||
Total expense/(income) | $ | (111 | ) | $ | 3 | $ | (148 | ) |
($ in millions) | 2016 | 2015 | 2014 | |||||||||
Current | ||||||||||||
Federal and foreign | $ | (12 | ) | $ | 5 | $ | 12 | |||||
State and local | 4 | 6 | 8 | |||||||||
Total current | (8 | ) | 11 | 20 | ||||||||
Deferred | ||||||||||||
Federal and foreign | 9 | (1 | ) | 9 | ||||||||
State and local | — | (1 | ) | (6 | ) | |||||||
Total deferred | 9 | (2 | ) | 3 | ||||||||
Total | $ | 1 | $ | 9 | $ | 23 |
($ in millions) | 2016 | 2015 | 2014 | ||||||
Federal income tax at statutory rate | 1 | (176 | ) | (243 | ) | ||||
State and local income tax, less federal income tax benefit | (2 | ) | (21 | ) | (29 | ) | |||
Increase/(decrease) in valuation allowance | (1 | ) | 185 | 290 | |||||
Other, including permanent differences and credits | 3 | 21 | 5 | ||||||
Total income tax expense/(benefit) | 1 | 9 | 23 |
($ in millions) | 2016 | 2015 | ||||||
Assets | ||||||||
Merchandise inventory | $ | 27 | $ | 39 | ||||
Accrued vacation pay | 17 | 22 | ||||||
Gift cards | 98 | 90 | ||||||
Stock-based compensation | 58 | 77 | ||||||
Deferred equity adjustment | 4 | 11 | ||||||
State taxes | 12 | 15 | ||||||
Workers’ compensation/general liability | 74 | 85 | ||||||
Accrued rent | 39 | 37 | ||||||
Litigation exposure | 16 | 32 | ||||||
Mirror savings plan | 13 | 15 | ||||||
Pension and other retiree obligations | 76 | 96 | ||||||
Net operating loss and tax credit carryforwards | 931 | 1,072 | ||||||
Other | 73 | 65 | ||||||
Total deferred tax assets | 1,438 | 1,656 | ||||||
Valuation allowance | (993 | ) | (1,025 | ) | ||||
Total net deferred tax assets | 445 | 631 | ||||||
Liabilities | ||||||||
Depreciation and amortization | (561 | ) | (741 | ) | ||||
Tax benefit transfers | (53 | ) | (56 | ) | ||||
Long-lived intangible assets | (35 | ) | (28 | ) | ||||
Total deferred tax liabilities | (649 | ) | (825 | ) | ||||
Total net deferred tax liabilities | $ | (204 | ) | $ | (194 | ) |
($ in millions) | 2016 | 2015 | ||||||
Other current assets | $ | 196 | $ | 231 | ||||
Other long-term liabilities | (400 | ) | (425 | ) | ||||
Total net deferred tax liabilities | $ | (204 | ) | $ | (194 | ) |
($ in millions) | 2016 | 2015 | 2014 | |||||||||
Beginning balance | $ | 91 | $ | 62 | $ | 70 | ||||||
Additions for tax positions of prior years | 16 | 40 | 10 | |||||||||
Reductions for tax positions of prior years | (24 | ) | — | — | ||||||||
Settlements and effective settlements with tax authorities | (4 | ) | (10 | ) | (16 | ) | ||||||
Expirations of statute | — | (1 | ) | (2 | ) | |||||||
Balance at end of year | $ | 79 | $ | 91 | $ | 62 |
($ in millions) | 2016 | 2015 | ||||||
Deferred taxes (current assets) | $ | 75 | $ | 84 | ||||
Accounts payable and accrued expenses (Note 6) | 3 | 3 | ||||||
Other liabilities (Note 7) | 1 | 4 | ||||||
Total | $ | 79 | $ | 91 |
($ in millions) | 2016 | 2015 | 2014 | |||||||||
Supplemental cash flow information | ||||||||||||
Income taxes received/(paid), net | $ | (10 | ) | $ | (5 | ) | $ | (30 | ) | |||
Interest received/(paid), net | (344 | ) | (369 | ) | (401 | ) | ||||||
Supplemental non-cash investing and financing activity | ||||||||||||
Property contributed to joint venture | — | — | 30 | |||||||||
Increase/(decrease) in other accounts payable related to purchases of property and equipment and software | 20 | 1 | (14 | ) | ||||||||
Financing costs withheld from proceeds of long-term debt | — | — | 7 | |||||||||
Purchase of property and equipment and software through capital leases and a note payable | 1 | 1 | 3 |
2016 | ||||||||||||||||
($ in millions, except EPS) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total net sales | $ | 2,811 | $ | 2,918 | $ | 2,857 | $ | 3,961 | ||||||||
Gross margin | 1,018 | 1,084 | 1,062 | 1,312 | ||||||||||||
SG&A expenses | 872 | 853 | 888 | 925 | ||||||||||||
Restructuring and management transition(1) | 6 | 9 | 2 | 9 | ||||||||||||
Net income/(loss)(2) | (68 | ) | (56 | ) | (67 | ) | 192 | |||||||||
Diluted earnings/(loss) per share(3) | $ | (0.22 | ) | $ | (0.18 | ) | $ | (0.22 | ) | $ | 0.61 | |||||
2015 | ||||||||||||||||
($ in millions, except EPS) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total net sales | $ | 2,857 | $ | 2,875 | $ | 2,897 | $ | 3,996 | ||||||||
Gross margin | 1,041 | 1,065 | 1,082 | 1,363 | ||||||||||||
SG&A expenses | 965 | 901 | 947 | 962 | ||||||||||||
Restructuring and management transition(4) | 22 | 17 | 14 | 31 | ||||||||||||
Net income/(loss)(5) | (150 | ) | (117 | ) | (115 | ) | (131 | ) | ||||||||
Diluted earnings/(loss) per share(3) | $ | (0.49 | ) | $ | (0.38 | ) | $ | (0.38 | ) | $ | (0.43 | ) |
(1) | Restructuring and management transition charges (Note 16) by quarter for 2016 consisted of the following: |
($ in million) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Home office and stores | $ | 4 | $ | — | $ | 2 | $ | 2 | |||||||
Management transition | 2 | 1 | — | — | |||||||||||
Other | — | 8 | — | 7 | |||||||||||
Total | $ | 6 | $ | 9 | $ | 2 | $ | 9 |
(2) | The first, second and third quarters of 2016 contained increases of $13 million, $19 million and $30 million, respectively, and the fourth quarter contained a decrease of $94 million to our tax valuation allowance. The first quarter of 2016 contained gains from non-operating assets sales (Note 17) of $5 million. |
(3) | EPS is computed independently for each of the quarters presented. The sum of the quarters may not equal the total year amount due to the impact of changes in average quarterly shares outstanding. |
(4) | Restructuring and management transition charges (Note 16) by quarter for 2015 consisted of the following: |
($ in millions) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
Home office and stores | $ | 14 | $ | 15 | $ | 9 | $ | 4 | |||||||
Management transition | 6 | 1 | 3 | 18 | |||||||||||
Other | 2 | 1 | 2 | 9 | |||||||||||
Total | $ | 22 | $ | 17 | $ | 14 | $ | 31 |
(5) | The first, second, third and fourth quarters of 2015 contained increases to our tax valuation allowance of $44 million, $46 million, $41 million, and $110 million, respectively. The first, second and third quarters of 2015 contained gains from non-operating assets sales (Note 17) of $2 million, $6 million and $1 million, respectively. |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
2.1 | Agreement and Plan of Merger dated as of January 23, 2002, between JCP and Company | 8-K | 001-15274 | 2 | 1/28/2002 | |||||||
3.1 | Restated Certificate of Incorporation of the Company, as amended to May 20, 2011 | 10-Q | 001-15274 | 3.1 | 6/8/2011 | |||||||
3.2 | Bylaws of the Company, as amended to July 20, 2016 | 8-K | 001-15274 | 3.1 | 7/21/2016 | |||||||
3.3 | Certificate of Designation, Preferences and Rights of Series C Junior Participating Preferred Stock | 8-K | 001-15274 | 3.1 | 8/22/2013 | |||||||
4.1 | Indenture, dated as of October 1, 1982, between JCP and U.S. Bank National Association, Trustee (formerly First Trust of California, National Association, as Successor Trustee to Bank of America National Trust and Savings Association) | 10-K | 001-00777 | 4(a) | 4/19/1994 | |||||||
4.2 | First Supplemental Indenture, dated as of March 15, 1983, between JCP and U.S. Bank National Association, Trustee (formerly First Trust of California, National Association, as Successor Trustee to Bank of America National Trust and Savings Association) | 10-K | 001-00777 | 4(b) | 4/19/1994 | |||||||
4.3 | Second Supplemental Indenture, dated as of May 1, 1984, between JCP and U.S. Bank National Association, Trustee (formerly First Trust of California, National Association, as Successor Trustee to Bank of America National Trust and Savings Association) | 10-K | 001-00777 | 4(c) | 4/19/1994 | |||||||
4.4 | Third Supplemental Indenture, dated as of March 7, 1986, between JCP and U.S. Bank National Association, Trustee (formerly First Trust of California, National Association, as Successor Trustee to Bank of America National Trust and Savings Association) | S-3 | 033-03882 | 4(d) | 3/11/1986 | |||||||
4.5 | Fourth Supplemental Indenture, dated as of June 7, 1991, between JCP and U.S. Bank National Association, Trustee (formerly First Trust of California, National Association, as Successor Trustee to Bank of America National Trust and Savings Association) | S-3 | 033-41186 | 4(e) | 6/13/1991 | |||||||
4.6 | Fifth Supplemental Indenture, dated as of January 27, 2002, among the Company, JCP and U.S. Bank National Association, Trustee (formerly First Trust of California, National Association, as Successor Trustee to Bank of America National Trust and Savings Association) to Indenture dated as of October 1, 1982 | 10-K | 001-15274 | 4(o) | 4/25/2002 | |||||||
4.7 | Sixth Supplemental Indenture, dated as of May 20, 2013, among J. C. Penney Corporation, Inc., J. C. Penney Company, Inc., as co-obligor, and Wilmington Trust, National Association, as successor trustee | 8-K | 001-15274 | 4.1 | 5/24/2013 | |||||||
4.8 | Indenture, dated as of April 1, 1994, between JCP and U.S. Bank National Association, Trustee (formerly First Trust of California, National Association, as Successor Trustee to Bank of America National Trust and Savings Association) | S-3 | 033-53275 | 4(a) | 4/26/1994 | |||||||
4.9 | First Supplemental Indenture dated as of January 27, 2002, among the Company, JCP and U.S. Bank National Association, Trustee (formerly Bank of America National Trust and Savings Association) to Indenture dated as of April 1, 1994 | 10-K | 001-15274 | 4(p) | 4/25/2002 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
4.10 | Second Supplemental Indenture dated as of July 26, 2002, among the Company, JCP and U.S. Bank National Association, Trustee (formerly Bank of America National Trust and Savings Association) to Indenture dated as of April 1, 1994 | 10-Q | 001-15274 | 4 | 9/6/2002 | |||||||
4.11 | Indenture, dated September 15, 2014, among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc. and Wilmington Trust, National Association | 8-K | 001-15274 | 4.1 | 9/15/2014 | |||||||
4.12 | First Supplemental Indenture (including the form of Note), dated September 15, 2014, among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., and Wilmington Trust, National Association | 8-K | 001-15274 | 4.2 | 9/15/2014 | |||||||
4.13 | Indenture (including the form of Note), dated as of June 23, 2016, among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., the subsidiary guarantors party thereto and Wilmington Trust, National Association | 8-K | 001-15274 | 4.1 | 6/24/2016 | |||||||
4.14 | Warrant Purchase Agreement dated June 13, 2011 between J. C. Penney Company, Inc. and Ronald B. Johnson | 8-K | 001-15274 | 4.1 | 6/14/2011 | |||||||
4.15 | Warrant dated as of June 13, 2011 between J. C. Penney Company, Inc. and Ronald B. Johnson | 8-K | 001-15274 | 4.2 | 6/14/2011 | |||||||
4.16 | Amended and Restated Rights Agreement, dated as of January 27, 2014, by and between J. C. Penney Company, Inc. and Computershare Inc., as Rights Agent | 8-K | 001-15274 | 4.1 | 1/28/2014 | |||||||
4.17 | First Amendment to the Amended and Restated Rights Agreement, dated as of January 23, 2017, by and between J. C. Penney Company, Inc. and Computershare Inc., as Rights Agent | 8-K | 001-15274 | 4.1 | 1/23/2017 | |||||||
10.1 | Credit Agreement dated as of June 20, 2014 among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., J. C. Penney Purchasing Corporation, the Lenders party thereto, Wells Fargo Bank, National Association, as Administrative Agent, Revolving Agent and Swingline Lender, Bank of America, N.A., as Term Agent, Wells Fargo Bank, National Association and Bank of America, N.A., as Co-Collateral Agents and Wells Fargo Bank, National Association, as LC Agent | 8-K | 001-15274 | 10.1 | 6/23/2014 | |||||||
10.2 | Amendment No. 1 to Credit Agreement dated as of December 10, 2015 among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., J. C. Penney Purchasing Corporation, the guarantors party thereto, Wells Fargo Bank, National Association, as Administrative Agent and Revolving Agent, Bank of America, N.A., as Term Agent, Wells Fargo Bank, National Association and Bank of America, N.A., as co-collateral agents, and the lenders party thereto. | 8-K | 001-15274 | 10.1 | 12/11/2015 | |||||||
10.3 | Guarantee and Collateral Agreement dated as of June 20, 2014 among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., J. C. Penney Purchasing Corporation, the Subsidiaries of J. C. Penney Company, Inc. identified therein, and Wells Fargo Bank, National Association, as Administrative Agent | 8-K | 001-15274 | 10.2 | 6/23/2014 | |||||||
10.4 | Restatement Agreement, dated as of June 23, 2016, among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent | 8-K | 001-15274 | 10.1 | 6/24/2016 | |||||||
10.5 | Amended and Restated Pledge and Security Agreement, dated as of June 23, 2016, among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., the subsidiary guarantors party thereto and Wilmington Trust, National Association, as collateral agent | 8-K | 001-15274 | 10.2 | 6/24/2016 | |||||||
10.6 | Intercreditor and Collateral Cooperation Agreement, dated as of June 23, 2016, among Wells Fargo Bank, National Association, as representative for the ABL secured parties, Wilmington Trust, National Association, as representative for the term loan/notes secured parties, J. C. Penney Company, Inc., J. C. Penney Corporation, Inc. and the subsidiary guarantors party thereto | 8-K | 001-15274 | 10.3 | 6/24/2016 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
10.7 | Pari Passu Intercreditor Agreement, dated as of June 23, 2016, among Wilmington Trust, National Association, as collateral agent, Wilmington Trust, National Association, as trustee, and JPMorgan Chase Bank, N.A., as administrative agent | 8-K | 001-15274 | 10.4 | 6/24/2016 | |||||||
10.8 | Consumer Credit Card Program Agreement by and between JCP and GE Money Bank, as amended and restated as of November 5, 2009 | 8-K | 001-15274 | 10.1 | 11/6/2009 | |||||||
10.9 | First Amendment, dated as of October 29, 2010, to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and GE Money Bank, as amended and restated as of November 5, 2009 | 8-K | 001-15274 | 10.1 | 10/29/2010 | |||||||
10.10 | Second Amendment dated as of January 30, 2013 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and GE Capital Retail Bank, as amended and restated as of November 5, 2009 and as amended by the First Amendment thereto dated as of October 29, 2010 | 8-K | 001-15274 | 10.1 | 2/4/2013 | |||||||
10.11 | Third Amendment dated as of October 11, 2013 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and GE Capital Retail Bank, as amended and restated as of November 5, 2009, as amended by the First Amendment thereto dated as of October 29, 2010 and the Second Amendment thereto dated as of January 30, 2013 | 8-K | 001-15274 | 10.1 | 10/15/2013 | |||||||
10.12 | Fourth Amendment dated February 25, 2014 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and GE Capital Retail Bank, as amended and restated as of November 5, 2009, as amended by the First Amendment thereto dated as of October 29, 2010, the Second Amendment thereto dated as of January 30, 2013 and the Third Amendment thereto dated October 11, 2013 | 10-Q | 001-15274 | 10.1 | 6/3/2014 | |||||||
10.13 | Fifth Amendment dated as of April 6, 2015 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and Synchrony Bank, as amended and restated as of November 5, 2009, as amended by the First Amendment thereto dated as of October 29, 2010, the Second Amendment thereto dated as of January 30, 2013, the Third Amendment thereto dated October 11, 2013 and the Fourth Amendment thereto dated February 25, 2014 | 10-Q | 001-15274 | 10.1 | 6/4/2015 | |||||||
10.14 | Sixth Amendment dated as of June 26, 2015 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and Synchrony Bank, as amended and restated as of November 5, 2009, as amended by the First Amendment thereto dated as of October 29, 2010, the Second Amendment thereto dated as of January 30, 2013, the Third Amendment thereto dated October 11, 2013, the Fourth Amendment thereto dated February 25, 2014, and the Fifth Amendment thereto dated April 6, 2015 | 10-K | 001-15274 | 10.14 | 3/16/2016 | |||||||
10.15 | Seventh Amendment dated as of August 17, 2016 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and Synchrony Bank, as amended and restated as of November 5, 2009, as amended by the First Amendment thereto dated as of October 29, 2010, the Second Amendment thereto dated as of January 30, 2013, the Third Amendment thereto dated October 11, 2013, the Fourth Amendment thereto dated February 25, 2014, the Fifth Amendment thereto dated April 6, 2015, and the Sixth Amendment thereto dated June 26, 2015 | 10-Q | 001-15274 | 10.2 | 11/30/2016 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
10.16 | Eighth Amendment dated as of January 18, 2017 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and Synchrony Bank, as amended and restated as of November 5, 2009, as amended by the First Amendment thereto dated as of October 29, 2010, the Second Amendment thereto dated as of January 30, 2013, the Third Amendment thereto dated October 11, 2013, the Fourth Amendment thereto dated February 25, 2014, the Fifth Amendment thereto dated April 6, 2015, the Sixth Amendment thereto dated June 26, 2015, and the Seventh Amendment thereto dated August 17, 2016 | † | ||||||||||
10.17** | J. C. Penney Company, Inc. Directors’ Equity Program Tandem Restricted Stock Award/Stock Option Plan | 10-K | 001-00777 | 10(k) | 4/24/1989 | |||||||
10.18** | J. C. Penney Company, Inc. 1993 Non-Associate Directors’ Equity Plan | Def. Proxy Stmt. | 001-00777 | B | 4/20/1993 | |||||||
10.19** | February 1995 Amendment to J. C. Penney Company, Inc. 1993 Non-Associate Directors’ Equity Plan | 10-K | 001-00777 | 10(ii)(m) | 4/18/1995 | |||||||
10.20** | Directors’ Charitable Award Program | 10-K | 001-00777 | 10(r) | 4/25/1990 | |||||||
10.21** | J. C. Penney Company, Inc. 1997 Equity Compensation Plan | Def. Proxy Stmt. | 001-00777 | A | 4/11/1997 | |||||||
10.22** | J. C. Penney Company, Inc. 2001 Equity Compensation Plan | Def. Proxy Stmt. | 001-00777 | B | 4/11/2001 | |||||||
10.23** | J. C. Penney Company, Inc. 2005 Equity Compensation Plan, as amended through 12/10/2008 | 10-K | 001-15274 | 10.7 | 3/31/2009 | |||||||
10.24** | J. C. Penney Company, Inc. 2009 Long-Term Incentive Plan | Def. Proxy Stmt. | 001-15274 | Annex A | 3/31/2009 | |||||||
10.25** | J. C. Penney Company, Inc. 2012 Long-Term Incentive Plan | Def. Proxy Stmt. | 001-15274 | Annex A | 3/28/2012 | |||||||
10.26** | J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | Def. Proxy Stmt. | 001-15274 | Annex A | 3/21/2014 | |||||||
10.27** | J. C. Penney Company, Inc. 2016 Long-Term Incentive Plan | Def. Proxy Stmt. | 001-15274 | Annex A | 3/23/2016 | |||||||
10.28** | JCP Supplemental Term Life Insurance Plan for Management Profit-Sharing Associates, as amended and restated effective July 1, 2007 | 10-Q | 001-15274 | 10.1 | 9/12/2007 | |||||||
10.29** | Form of Notice of Restricted Stock Award - Non-Associate Director Annual Grant under the J. C. Penney Company, Inc. 2001 Equity Compensation Plan | 8-K | 001-15274 | 10.5 | 2/15/2005 | |||||||
10.30** | Form of Notice of Non-Associate Director Restricted Stock Unit Award under the J. C. Penney Company, Inc. 2001 Equity Compensation Plan | 8-K | 001-15274 | 10.1 | 5/24/2005 | |||||||
10.31** | Form of Notice of Non-Associate Director Restricted Stock Unit Award under the J. C. Penney Company, Inc. 2005 Equity Compensation Plan | 8-K | 001-15274 | 10.1 | 11/18/2005 | |||||||
10.32** | JCP Form of Executive Termination Pay Agreement, as amended and restated effective September 21, 2007 | 8-K | 001-15274 | 10.1 | 9/26/2007 | |||||||
10.33** | JCP Form of Executive Termination Pay Agreement, as amended and restated effective December 3, 2013 | 10-Q | 001-15274 | 10.3 | 12/5/2013 | |||||||
10.34** | JCP Form of Termination Pay Agreement | 8-K | 001-15274 | 10.2 | 5/21/2015 | |||||||
10.35** | JCP Form of Executive Termination Pay Agreement. as amended and restated effective December 17, 2015 | 10-K | 001-15274 | 10.3 | 3/16/2016 | |||||||
10.36** | Form of Election to Receive Stock in Lieu of Cash Retainer(s) (J. C. Penney Company, Inc. 2005 Equity Compensation Plan) | 8-K | 001-15274 | 10.1 | 5/19/2006 | |||||||
10.37** | Form of Notice of Election to Defer under the J. C. Penney Company, Inc. Deferred Compensation Plan for Directors | 8-K | 001-15274 | 10.2 | 5/19/2006 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
10.38** | Form of Notice of Change of Factor for Deferral Account under the J. C. Penney Company, Inc. Deferred Compensation Plan for Directors | 8-K | 001-15274 | 10.8 | 2/15/2005 | |||||||
10.39** | Form of Notice of Change in the Amount of Fees Deferred under the J. C. Penney Company, Inc. Deferred Compensation Plan for Directors | 8-K | 001-15274 | 10.30 | 5/19/2006 | |||||||
10.40** | Form of Notice of Termination of Election to Defer under the J. C. Penney Company, Inc. Deferred Compensation Plan for Directors | 8-K | 001-15274 | 10.4 | 5/19/2006 | |||||||
10.41** | Form of Notice of Grant of Stock Options under the J. C. Penney Company, Inc. 2005 Equity Compensation Plan | 8-K | 001-15274 | 10.1 | 3/15/2007 | |||||||
10.42** | 2008 Form of Notice of Grant of Stock Options under the J. C. Penney Company, Inc. 2005 Equity Compensation Plan | 8-K | 001-15274 | 10.10 | 3/7/2008 | |||||||
10.43** | JCP 2009 Change in Control Plan | 10-K | 001-15274 | 10.6 | 3/31/2009 | |||||||
10.44** | J. C. Penney Corporation, Inc. Change in Control Plan, effective January 10, 2011 | 8-K | 001-15274 | 10.1 | 6/14/2011 | |||||||
10.45** | Form of Indemnification Trust Agreement between JCP and JPMorgan Chase Bank (formerly Chemical Bank) dated as of July 30, 1986, as amended March 30, 1987 | Def. Proxy Stmt. | 001-00777 | Exhibit 1 to Exhibit B | 4/24/1987 | |||||||
10.46** | Second Amendment to Indemnification Trust Agreement between JCP and JPMorgan Chase Bank, effective as of January 27, 2002 | 10-K | 001-15274 | 10.53 | 3/31/2009 | |||||||
10.47** | Third Amendment to Indemnification Trust Agreement between Company, JCP and JPMorgan Chase Bank, effective as of June 1, 2008 | 10-Q | 001-15274 | 10.20 | 9/10/2008 | |||||||
10.48** | Fourth Amendment to Indemnification Trust Agreement between Company, JCP and SunTrust Bank, dated as of October 5, 2016 | 10-Q | 001-15274 | 10.1 | 11/30/2016 | |||||||
10.49** | Form of Indemnification Agreement between Company, JCP and individual Indemnitees, as amended through January 27, 2002 | 10-K | 001-15274 | 10(ii)(ab) | 4/25/2002 | |||||||
10.50** | Special Rules for Reimbursements Subject to Code Section 409A under Indemnification Agreement between Company, JCP and individual Indemnitees, adopted December 9, 2008 | 10-K | 001-15274 | 10.6 | 3/31/2009 | |||||||
10.51** | JCP Mirror Savings Plan, amended and restated effective December 31, 2007 and as further amended through December 9, 2008 | 10-K | 001-15274 | 10.6 | 3/31/2009 | |||||||
10.52** | J. C. Penney Company, Inc. Deferred Compensation Plan for Directors, as amended and restated effective February 27, 2008 and as further amended through December 10, 2008 | 10-K | 001-15274 | 10.62 | 3/31/2009 | |||||||
10.53** | Form of Notice of Grant of Stock Options under the J. C. Penney Company, Inc. 2009 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.2 | 9/9/2009 | |||||||
10.54** | Form of Notice of Non-Associate Director Restricted Stock Unit Award under the J. C. Penney Company, Inc. 2009 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.40 | 9/9/2009 | |||||||
10.55** | Amended and Restated J. C. Penney Corporation, Inc., Management Incentive Compensation Program, effective January 29, 2017 | † | ||||||||||
10.56** | Notice of Restricted Stock Unit Grant for Edward J. Record | 10-K | 001-15274 | 10.61 | 3/23/2015 | |||||||
10.57** | Form of Executive Termination Pay Agreement between J. C. Penney Company, Inc. and Marvin R. Ellison | 8-K | 001-15274 | 10.20 | 10/14/2014 | |||||||
10.58** | Notice of Restricted Stock Unit Grant for Marvin R. Ellison | 10-K | 001-15274 | 10.64 | 3/23/2015 | |||||||
10.59** | Form of Notice of Grant of Stock Options under the J. C. Penney Company, Inc. 2012 Long-Term Incentive Plan | 10-K | 001-15274 | 10.8 | 3/20/2013 | |||||||
10.60** | Form of Notice of Non-Associate Director Restricted Stock Unit Award under the J. C. Penney Company, Inc. 2012 Long-Term Incentive Plan | 10-K | 001-15274 | 10.8 | 3/20/2013 | |||||||
10.61** | Form of Notice of 2014 Performance-Contingent Stock Option Grant under the J. C. Penney Company, Inc. 2012 Long-Term Incentive Plan for Myron E. Ullman, III | 8-K | 001-15274 | 10.1 | 3/24/2014 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
10.62** | Form of Notice of 2014 Performance-Contingent Stock Option Grant under the J. C. Penney Company, Inc. 2012 Long-Term Incentive Plan | 8-K | 001-15274 | 10.2 | 3/24/2014 | |||||||
10.63** | Form of Notice of 2015 CEO Performance Unit Grant under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.2 | 6/4/2015 | |||||||
10.64** | Form of Notice of 2015 CEO Stock Option Grant under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.3 | 6/4/2015 | |||||||
10.65** | Form of Notice of Restricted Stock Unit Grant under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.4 | 6/4/2015 | |||||||
10.66** | Form of Notice of Stock Option Grant under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.5 | 6/4/2015 | |||||||
10.67** | Form of Notice of Performance Unit Grant under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.6 | 6/4/2015 | |||||||
10.68** | Notice of Restricted Stock Unit Grant for Andrew Drexler | 10-K | 001-15274 | 10.71 | 3/16/2016 | |||||||
10.69** | Notice of Stock Option Grant for Andrew Drexler | 10-K | 001-15274 | 10.72 | 3/16/2016 | |||||||
10.70** | Form of Stock Option Grant Agreement under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-K | 001-15274 | 10.73 | 3/16/2016 | |||||||
10.71** | Form of Restricted Stock Unit Grant Agreement under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-K | 001-15274 | 10.74 | 3/16/2016 | |||||||
10.72** | Form of Performance Unit Grant Agreement under the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.1 | 5/31/2016 | |||||||
10.73** | Form of Notice of Non-Associate Director Restricted Stock Unit Award under the J. C. Penney Company, Inc. 2016 Long-Term Incentive Plan | 10-Q | 001-15274 | 10.2 | 8/30/2016 | |||||||
12 | Computation of Ratios of Earnings to Fixed Charges | † | ||||||||||
21 | Subsidiaries of the Registrant | † | ||||||||||
23 | Consent of Independent Registered Public Accounting Firm | † | ||||||||||
24 | Power of Attorney | † | ||||||||||
31.1 | Certification by CEO pursuant to 15 U.S.C. 78m(a) or 780(d), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
31.2 | Certification by CFO pursuant to 15 U.S.C. 78m(a) or 780(d), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
32.1 | Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
32.2 | Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | † | ||||||||||
101.INS | XBRL Instance Document | † | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | † | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | † | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | † | ||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | † | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | † |
A. | Amendment to Schedule 3.24. Schedule 3.24 of the Agreement is hereby deleted in its entirety and replaced with the new Schedule 3.24 attached hereto. |
J. C. PENNEY CORPORATION, INC. | SYNCHRONY BANK | ||||
By: | /s/ James Ward | By: | /s/ Thomas M. Quindlen | ||
Title: | Vice President, Credit | Title: | EVP Retail Card |
52 Weeks | 52 Weeks | 52 Weeks | 52 Weeks | 53 Weeks | |||||||||||||||
Ended | Ended | Ended | Ended | Ended | |||||||||||||||
($ in millions) | 1/28/2017 | 1/30/2016 | 1/31/2015 | 2/1/2014 | 2/2/2013 | ||||||||||||||
Income/(loss) from continuing operations before income taxes | $ | 2 | $ | (504 | ) | $ | (694 | ) | $ | (1,708 | ) | $ | (1,227 | ) | |||||
Fixed charges: | |||||||||||||||||||
Net interest expense | 363 | 405 | 406 | 352 | 226 | ||||||||||||||
Interest income included in net interest | — | — | — | 1 | 6 | ||||||||||||||
Loss on extinguishment of debt, bond premiums and unamortized costs | 30 | 10 | 34 | 114 | — | ||||||||||||||
Estimated interest within rental expense | 93 | 94 | 98 | 99 | 101 | ||||||||||||||
Total fixed charges | 486 | 509 | 538 | 566 | 333 | ||||||||||||||
Total earnings available for fixed charges | $ | 488 | $ | 5 | $ | (156 | ) | $ | (1,142 | ) | $ | (894 | ) | ||||||
Ratio of earnings to fixed charges | 1.0 | — | (0.3 | ) | (2.0 | ) | (2.7 | ) | |||||||||||
Coverage deficiency | NA | 504 | 694 | 1,708 | 1,227 |
/s/ Marvin R. Ellison | /s/ Edward J. Record | |
Marvin R. Ellison Chairman of the Board and Chief Executive Officer; Director (principal executive officer) | Edward J. Record Executive Vice President and Chief Financial Officer (principal financial officer) | |
/s/ Andrew S. Drexler | /s/ Colleen C. Barrett | |
Andrew S. Drexler Senior Vice President, Chief Accounting Officer and Controller (principal accounting officer) | Colleen C. Barrett Director | |
/s/ Paul J. Brown | /s/ Amanda Ginsberg | |
Paul J. Brown Director | Amanda Ginsberg Director | |
/s/ B. Craig Owens | /s/ Lisa A. Payne | |
B. Craig Owens Director | Lisa A. Payne Director | |
/s/ J. Paul Raines | /s/ Leonard H. Roberts | |
J. Paul Raines Director | Leonard H. Roberts Director | |
/s/ Javier G. Teruel | /s/ R. Gerald Turner | |
Javier G. Teruel Director | R. Gerald Turner Director | |
/s/ Ronald W. Tysoe | ||
Ronald W. Tysoe Director |
1. | I have reviewed this Annual Report on Form 10-K of J. C. Penney Company, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Marvin R. Ellison | |
Marvin R. Ellison | |
Chairman of the Board and Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K of J. C. Penney Company, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Edward J. Record | |
Edward J. Record | |
Executive Vice President and | |
Chief Financial Officer |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Marvin R. Ellison |
Marvin R. Ellison |
Chairman of the Board and Chief Executive Officer |
(1) | the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Edward J. Record |
Edward J. Record |
Executive Vice President and Chief Financial Officer |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Mar. 17, 2017 |
Jul. 30, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | J C PENNEY CO INC | ||
Entity Central Index Key | 0001166126 | ||
Current Fiscal Year End Date | --02-02 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 28, 2017 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 308,619,449 | ||
Trading Symbol | jcp | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,955,141,924 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Millions |
12 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||||||||||||||||||
Statement of Comprehensive Income [Abstract] | |||||||||||||||||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | $ (2) | $ 15 | |||||||||||||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI, Pension and Other Postretirement Benefit Plans, for Net Gain (Loss), Tax | (1) | (22) | $ (5) | ||||||||||||||||||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Plan Amendments, Tax Effect | (3) | 0 | 8 | ||||||||||||||||||
Net income/(loss) | 1 | (513) | (717) | ||||||||||||||||||
Other comprehensive income/(loss), net of tax: | |||||||||||||||||||||
Unrealized gain/(loss) (1) | 0 | 0 | (2) | [1] | |||||||||||||||||
Net actuarial gain/(loss) arising during the period (2) | [2] | 1 | (213) | (293) | |||||||||||||||||
Prior service credit/(cost) arising during the period (3) | [3] | 5 | 0 | (12) | |||||||||||||||||
Reclassification of net actuarial (gain)/loss from a settlement (4) | [4] | 0 | 110 | 0 | |||||||||||||||||
Reclassification for net actuarial (gain)/loss (5) | [5] | 1 | 31 | 7 | |||||||||||||||||
Reclassification for amortization of prior service (credit)/cost (6) | [6] | 0 | 2 | (1) | |||||||||||||||||
Gain/(loss) on interest rate swaps (7) | [7] | 3 | (23) | 0 | |||||||||||||||||
Reclassification for periodic settlements (8) | [8] | 8 | 6 | 0 | |||||||||||||||||
Deferred tax valuation allowance | 0 | (54) | (190) | ||||||||||||||||||
Total other comprehensive income/(loss), net of tax | 18 | (141) | (491) | ||||||||||||||||||
Total comprehensive income/(loss), net of tax | 19 | (654) | $ (1,208) | ||||||||||||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (5) | (4) | |||||||||||||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | $ 13 | $ 10 | |||||||||||||||||||
|
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, authorized | 1,250,000,000 | |
Common stock, par value per share | $ 0.50 | |
Common stock, issued and outstanding | 308,300,000 | 306,100,000 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions |
Total |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Reinvested Earnings/(Loss) [Member] |
Accumulated Other Comprehensive Income/(Loss) [Member] |
---|---|---|---|---|---|
Balance as of the beginning of the period - as adjusted at Feb. 01, 2014 | $ 3,087 | $ 152 | $ 4,571 | $ (1,777) | $ 141 |
Shares balance as of the beginning of the period at Feb. 01, 2014 | 304.6 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income/(loss) | (717) | (717) | |||
Other comprehensive income/(loss) | (491) | (491) | |||
Stock-based compensation | 35 | $ 0 | 35 | ||
Stock-based compensation, shares | 0.3 | ||||
Balance as of the end of the period at Jan. 31, 2015 | 1,914 | $ 152 | 4,606 | (2,494) | (350) |
Shares balance as of the end of the period at Jan. 31, 2015 | 304.9 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income/(loss) | (513) | (513) | |||
Other comprehensive income/(loss) | (141) | (141) | |||
Stock-based compensation | 49 | $ 1 | 48 | ||
Stock-based compensation, shares | 1.2 | ||||
Balance as of the end of the period at Jan. 30, 2016 | 1,309 | $ 153 | 4,654 | (3,007) | (491) |
Shares balance as of the end of the period at Jan. 30, 2016 | 306.1 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income/(loss) | 1 | ||||
Other comprehensive income/(loss) | 18 | 18 | |||
Stock-based compensation | 26 | $ 1 | 25 | ||
Stock-based compensation, shares | 2.2 | ||||
Balance as of the end of the period at Jan. 28, 2017 | $ 1,354 | $ 154 | $ 4,679 | $ (3,006) | $ (473) |
Shares balance as of the end of the period at Jan. 28, 2017 | 308.3 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||
Cash flows from operating activities | |||||
Net income/(loss) | $ 1 | $ (513) | $ (717) | ||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||
Restructuring and management transition | (1) | 10 | 32 | ||
Asset impairments and other charges | 3 | 25 | 39 | ||
Net gain on sale or redemption of non-operating assets | (5) | (9) | (25) | ||
Net gain from sale of operating assets | (73) | (9) | (92) | ||
Loss on extinguishment of debt | 30 | 10 | 34 | ||
Depreciation and amortization | 609 | 616 | 631 | ||
Benefit plans | (39) | 127 | (78) | ||
Stock-based compensation | [1] | 35 | 44 | 33 | |
Other comprehensive income tax benefits | (12) | 0 | 0 | ||
Deferred taxes | 9 | 0 | 3 | ||
Change in cash from: | |||||
Inventory | (133) | (69) | 283 | ||
Prepaid expenses and other assets | 11 | 19 | (1) | ||
Merchandise accounts payable | 52 | (72) | 49 | ||
Current income taxes | (6) | 4 | (10) | ||
Accrued expenses and other | (147) | 257 | 58 | ||
Net cash provided by/(used in) operating activities | 334 | 440 | 239 | ||
Cash flows from investing activities | |||||
Capital expenditures | (427) | (320) | (252) | ||
Proceeds from sale or redemption of non-operating assets | 2 | 13 | 35 | ||
Proceeds from sale of operating assets | 96 | 11 | 70 | ||
Joint venture return of investment | 13 | 0 | 5 | ||
Net cash provided by/(used in) investing activities | (316) | (296) | (142) | ||
Cash flows from financing activities | |||||
Payment on short-term borrowings | 0 | 0 | (650) | ||
Proceeds from issuance of long-term debt | 2,188 | 0 | 893 | ||
Proceeds from borrowings under the credit facility | 667 | 0 | 0 | ||
Payments of borrowings under the credit facility | (667) | ||||
Net proceeds from financing obligation | 216 | 0 | 0 | ||
Premium on early retirement of debt | 0 | 0 | (33) | ||
Payments of capital leases, financing obligation and note payable | (29) | (33) | (26) | ||
Payments of long-term debt | (2,349) | (520) | (412) | ||
Financing costs | (49) | (4) | (65) | ||
Proceeds from stock options exercised | 2 | 0 | 0 | ||
Excess tax benefits from stock-based compensation | 0 | 0 | 0 | ||
Tax withholding payments for vested restricted stock | (10) | (5) | (1) | ||
Net cash provided by/(used in) financing activities | (31) | (562) | (294) | ||
Net increase/(decrease) in cash and cash equivalents | (13) | (418) | (197) | ||
Cash and cash equivalents at beginning of period | 900 | 1,318 | 1,515 | ||
Cash and cash equivalents at end of period | $ 887 | $ 900 | $ 1,318 | ||
|
Basis of Presentation and Consolidation |
12 Months Ended | |||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 | ||||||||||||||||||||||||||||||||||||
Basis of Presentation and Consolidation [Abstract] | ||||||||||||||||||||||||||||||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation Nature of Operations Our Company was founded by James Cash Penney in 1902 and has grown to be a major national retailer, operating 1,013 department stores in 49 states and Puerto Rico, as well as through our Internet website at jcpenney.com. We sell family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, and home furnishings. In addition, our department stores provide services, such as styling salon, optical, portrait photography and custom decorating, to customers. Basis of Presentation and Consolidation The Consolidated Financial Statements present the results of J. C. Penney Company, Inc. and our subsidiaries (the Company or JCPenney). All significant inter-company transactions and balances have been eliminated in consolidation. We are a holding company whose principal operating subsidiary is J. C. Penney Corporation, Inc. (JCP). JCP was incorporated in Delaware in 1924, and J. C. Penney Company, Inc. was incorporated in Delaware in 2002, when the holding company structure was implemented. The holding company has no direct subsidiaries other than JCP, and has no independent assets or operations. The Company is a co-obligor (or guarantor, as appropriate) regarding the payment of principal and interest on JCP’s outstanding debt securities. We guarantee certain of JCP’s outstanding debt securities fully and unconditionally. Fiscal Year Our fiscal year ends on the Saturday closest to January 31. Unless otherwise stated, references to years in this report relate to fiscal years rather than to calendar years.
Use of Estimates and Assumptions The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America (GAAP), requires us to make assumptions and use estimates that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are subject to inherent uncertainties, which may result in actual amounts differing from reported amounts. |
Significant Accounting Policies |
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Significant Accounting Policies | Significant Accounting Policies Merchandise and Services Revenue Recognition Total net sales, which exclude sales taxes and are net of estimated returns, are generally recorded when payment is received and the customer takes possession of the merchandise. Service revenue is recorded at the time the customer receives the benefit of the service, such as salon, portrait, optical or custom decorating. Commissions earned on sales generated by licensed departments are included as a component of total net sales. Shipping and handling fees charged to customers are also included in total net sales with corresponding costs recorded as cost of goods sold. We provide for estimated future returns based primarily on historical return rates and sales levels. Based on how we categorized our divisions in 2016, our merchandise mix of total net sales over the last three years was as follows:
Gift Card Revenue Recognition At the time gift cards are sold, no revenue is recognized; rather, a liability is established for the face amount of the card. The liability remains recorded until the earlier of redemption, escheatment or 60 months. The liability is relieved and revenue is recognized when gift cards are redeemed for merchandise or services. We escheat a portion of unredeemed gift cards according to Delaware escheatment requirements that govern remittance of the cost of the merchandise portion of unredeemed gift cards over five years old. After reflecting the amount escheated, any remaining liability (referred to as breakage) is relieved and recognized as a reduction of SG&A expenses as an offset to the costs of administering the gift card program. Though our gift cards do not expire, it is our historical experience that the likelihood of redemption after 60 months is remote. The liability for gift cards is recorded in other accounts payable and accrued expenses on the Consolidated Balance Sheets. Customer Loyalty Program Customers who spend a certain amount with us using our private label card or registered third party credit cards receive JCP Rewards® certificates, redeemable for merchandise or services in our stores the following two months. In accordance with the incremental cost method, we estimate the net cost of the rewards that will be redeemed and record this as cost of goods sold as rewards points are accumulated. Other administrative costs of the loyalty program are recorded in SG&A expenses as incurred. Cost of Goods Sold Cost of goods sold includes all costs directly related to bringing merchandise to its final selling destination. These costs include the cost of the merchandise (net of discounts or allowances earned), sourcing and procurement costs, buying and brand development costs, including buyers’ salaries and related expenses, royalties and design fees, freight costs, warehouse operating expenses, merchandise examination, inspection and testing, store merchandise distribution center expenses, including rent, and shipping and handling costs incurred on sales via the Internet. Vendor Allowances We receive vendor support in the form of cash payments or allowances for a variety of reimbursements such as cooperative advertising, markdowns, vendor shipping and packaging compliance, defective merchandise and the purchase of vendor specific fixtures. We have agreements in place with each vendor setting forth the specific conditions for each allowance or payment. Depending on the arrangement, we either recognize the allowance as a reduction of current costs or defer the payment over the period the related merchandise is sold. If the payment is a reimbursement for costs incurred, it is generally offset against those related costs; otherwise, it is treated as a reduction to the cost of merchandise. Markdown reimbursements related to merchandise that has been sold are negotiated and documented by our buying teams and are credited directly to cost of goods sold in the period received. Vendor allowances received prior to merchandise being sold are deferred and recognized as a reduction of inventory and credited to cost of goods sold based on an inventory turnover rate. Vendor compliance credits reimburse us for incremental merchandise handling expenses incurred due to a vendor’s failure to comply with our established shipping or merchandise preparation requirements. Vendor compliance credits are recorded as a reduction of merchandise handling costs. Selling, General and Administrative Expenses SG&A expenses include the following costs, except as related to merchandise buying, sourcing, warehousing or distribution activities: salaries, marketing costs, occupancy and rent expense, utilities and maintenance, pre-opening expenses, costs related to information technology, administrative costs related to our home office and district and regional operations, real and personal property and other taxes (excluding income taxes) and credit/debit card fees. Advertising Advertising costs, which include newspaper, television, Internet search marketing, radio and other media advertising, are expensed either as incurred or the first time the advertisement occurs. For cooperative advertising programs offered by national brands that require proof of advertising to be provided to the vendor to support the reimbursement of the incurred cost, we offset the allowances against the related advertising expense. Programs that do not require proof of advertising are monitored to ensure that the allowance provided by each vendor is a reimbursement of costs incurred to advertise for that particular vendor’s label. Total advertising costs, net of cooperative advertising vendor reimbursements of $26 million, $32 million and $1 million for 2016, 2015 and 2014, respectively, were $769 million, $792 million and $886 million, respectively. Income Taxes We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not such assets will be realized. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense in our Consolidated Statements of Operations. Earnings/(Loss) per Share Basic earnings/(loss) per share (EPS) is computed by dividing net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income/(loss) by the weighted-average number of common shares outstanding during the period plus the number of additional common shares that would have been outstanding if the potentially dilutive shares had been issued. Potentially dilutive shares include stock options, unvested restricted stock units and awards and a warrant outstanding during the period, using the treasury stock method. Potentially dilutive shares are excluded from the computations of diluted EPS if their effect would be anti-dilutive. Cash and Cash Equivalents Cash and cash equivalents include cash short-term investments that are highly liquid investments with original maturities of three months or less. Cash short-term investments consist primarily of short-term U.S. Treasury money market funds and a portfolio of highly rated bank deposits and are stated at cost, which approximates fair market value due to the short-term maturity. Cash in banks and in transit also include credit card sales transactions that are settled early in the following period. Merchandise Inventory Inventories are valued at the lower of cost (using the first-in, first-out or “FIFO” method) or market. For department stores, regional warehouses and store distribution centers, we value inventories using the retail method. Under the retail method, retail values of merchandise groups are converted to a cost basis by applying the specific average cost-to-retail ratio related to each merchandise grouping. For Internet, we use standard cost, representing average vendor cost, to determine lower of cost or market. Physical inventories are taken on a staggered basis at least once per year at all store and supply chain locations, inventory records are adjusted to reflect actual inventory counts and any resulting shortage (shrinkage) is recognized. Following inventory counts, shrinkage is estimated as a percent of sales, based on the most recent physical inventory, in combination with current events and historical experience. We have loss prevention programs and policies in place that are intended to mitigate shrinkage. Property and Equipment, Net
Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed primarily by using the straight-line method over the estimated useful lives of the related assets. We expense routine maintenance and repairs when incurred. We capitalize major replacements and improvements. We remove the cost of assets sold or retired and the related accumulated depreciation or amortization from the accounts and include any resulting gain or loss in net income/(loss). We recognize a liability for the fair value of our conditional asset retirement obligations, which are primarily related to asbestos removal, when probable and if the liability’s fair value can be reasonably estimated. Capitalized Software Costs We capitalize costs associated with the acquisition or development of major software for internal use in other assets in our Consolidated Balance Sheets and amortize the asset over the expected useful life of the software, generally between three and seven years. We only capitalize subsequent additions, modifications or upgrades to internal-use software to the extent that such changes allow the software to perform a task it previously did not perform. We expense software maintenance and training costs as incurred. Cloud computing arrangements are evaluated to determine whether the arrangement includes a software license or is a service contract. If determined to be a software license, then the arrangement is capitalized as an other asset and amortized over the expected life of software, generally between three to seven years. If determined to be a service contract, then the cost of the arrangement is expensed as the services are provided. Impairment of Long-Lived and Indefinite-Lived Assets We evaluate long-lived assets such as store property and equipment and other corporate assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results and significant changes in the manner of use of the assets or our overall business strategies. Potential impairment exists if the estimated undiscounted cash flows expected to result from the use of the asset plus any net proceeds expected from disposition of the asset are less than the carrying value of the asset. The amount of the impairment loss represents the excess of the carrying value of the asset over its fair value and is included in Real estate and other, net in the Consolidated Statements of Operations. We estimate fair value based on either a projected discounted cash flow method using a discount rate that is considered commensurate with the risk inherent in our current business model or appraised value, as appropriate. We also take other factors into consideration in estimating the fair value of our stores, such as local market conditions, operating environment, mall performance and other trends. We assess the recoverability of indefinite-lived intangible assets at least annually during the fourth quarter of our fiscal year or whenever events or changes in circumstances indicate that the carrying amount of the indefinite-lived intangible asset may not be fully recoverable. Examples of a change in events or circumstances include, but are not limited to, a decrease in the market price of the asset, a history of cash flow losses related to the use of the asset or a significant adverse change in the extent or manner in which an asset is being used. We test our indefinite-lived intangible assets utilizing the relief from royalty method to determine the estimated fair value for each indefinite-lived intangible asset. The relief from royalty method estimates our theoretical royalty savings from ownership of the intangible asset. Key assumptions used in this model include discount rates, royalty rates, growth rates, sales projections and terminal value rates. Leases We use a consistent lease term when calculating amortization of leasehold improvements, determining straight-line rent expense under an operating lease and determining classification of leases as either operating or capital. For purposes of recognizing incentives, premiums, rent holidays and minimum rental expenses on a straight-line basis over the terms of operating leases, we use the date of initial possession to begin amortization, which is generally when we take control of the property. Renewal options determined to be reasonably assured are also included in the lease term. Some leases require additional payments based on sales and the related contingent rent is recorded as rent expense when the payment is probable. Some of our lease agreements contain developer/tenant allowances. Upon receipt of such allowances, we record a deferred rent liability in other liabilities on the Consolidated Balance Sheets. The allowances are then amortized on a straight-line basis over the remaining terms of the corresponding leases as a reduction of rent expense. Capital leases are recorded as an asset and an obligation at an amount equal to the present value of the minimum lease payments during the lease term. Assets subject to an operating lease and the related lease payments are not recorded on our balance sheet. Rent expense related to an operating lease is recognized on a straight-line basis over the lease term resulting in periodic deferred rent balances to adjust the cash rent paid. Sale-leasebacks are transactions through which we sell assets and subsequently lease them back. The resulting leases that qualify for sale-leaseback accounting are evaluated and accounted for as operating leases or capital leases. A transaction that does not qualify for sale-leaseback accounting as a result of a prohibited form of continuing involvement is accounted for as a financing. For a financing transaction, we retain the "sold" assets within property and equipment and record a financing obligation equal to the amount of cash proceeds received. Rental payments under such transactions are recognized as a reduction of the financing obligation and as interest expense using an effective interest method. Exit or Disposal Activity Costs Costs associated with exit or disposal activities are recorded at their fair values when a liability has been incurred. Reserves for operating leases are established at the time of closure for the present value of any remaining operating lease obligations (PVOL), net of estimated sublease income. Severance is recorded over the service period required to be rendered in order to receive the termination benefits or, if employees will not be retained to render future service, a reserve is established when communication has occurred to the affected employees. Other exit costs are accrued when incurred. Retirement-Related Benefits We recognize the funded status – the difference between the fair value of plan assets and the plan’s benefit obligation – of our defined benefit pension and postretirement plans directly on the Consolidated Balance Sheet. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability. We adjust other comprehensive income/(loss) to reflect prior service cost or credits and actuarial gain or loss amounts arising during the period and reclassification adjustments for amounts being recognized as components of net periodic pension/postretirement cost, net of tax. Prior service cost or credits are amortized to net income/(loss) over the average remaining service period, a period of about eight years for the primary plan. Pension related actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plan's projected benefit obligation (the corridor) are recognized annually in the fourth quarter each year (Mark-to-market (MTM) adjustment), and, if applicable, in any interim period in which an interim remeasurement is triggered. We measure the plan assets and obligations annually at the adopted measurement date of January 31 to determine pension expense for the subsequent year. The factors and assumptions affecting the measurement are the characteristics of the population and salary increases, with the most important being the expected return on plan assets and the discount rate for the pension obligation. We use actuarial calculations for the assumptions, which require significant judgment. Stock-Based Compensation Stock options are valued primarily using the binomial lattice option pricing model and are granted with an exercise price equal to the closing price of our common stock on the grant date. Time-based and performance-based restricted stock awards are valued using the closing price of our common stock on the grant date. For awards that have market conditions, such as attaining a specified stock price or based on total shareholder return, we use a Monte Carlo simulation model to determine the value of the award. Our current plan does not permit awarding stock options below grant-date market value nor does it allow any repricing subsequent to the date of grant. Stock options are valued using the following assumptions:
Employee stock options and time-based and performance-based restricted stock awards typically vest over periods ranging from one to three years and employee stock options have a maximum term of 10 years. Estimates of forfeitures are incorporated at the grant date and are adjusted if actual results are different from initial estimates. For awards that have performance conditions, the probability of achieving the performance condition is evaluated each reporting period, and if the performance condition is expected to be achieved, the related compensation expense is recorded over the service period. In addition, certain performance-based restricted stock awards may be granted where the number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of the performance metrics in accordance with the terms established at the time of the award. In the event that performance conditions are not achieved and the awards do not vest, compensation expense is reversed. For market based awards, we record expense over the service period, regardless of whether or not the market condition is achieved. Awards with graded vesting that only have a time vesting requirement and awards that vest entirely at the end of the vesting requirement are expensed on a straight-line basis for the entire award. Expense for awards with graded vesting that incorporate a market or performance requirement is attributed separately based on the vesting for each tranche. |
Effect of New Accounting Standards |
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New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Effect of New Accounting Standards | Effect of New Accounting Standards In February 2016, the FASB issued ASC Topic 842, Leases (Topic 842), a replacement of Leases (Topic 840), which will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. While many aspects of lessor accounting would remain the same, the new standard would make some changes, such as eliminating today’s real estate-specific guidance. As a globally converged standard, lessees and lessors would be required to classify most leases using a principle generally consistent with that of International Accounting Standards. The standard also would change what would be considered the initial direct costs of a lease. The standard would be effective for annual periods beginning after December 15, 2018 and interim periods within that year and must be adopted on a modified retrospective method, with elective reliefs, which requires application of the new guidance for all periods presented. We have developed a project team to analyze the impacts of the new standard on our current accounting policies and internal controls and the changes required to be made by our leasing software provider. With almost 70% of our store locations involved in an operating lease, the new standard will have a significant impact on our financial statements due to the recognition of lease liabilities and right-of-use assets that were not required by the current accounting requirements for operating leases. Given the magnitude of the project to implement the new standard, we are still evaluating the effect that the new accounting guidance will have on our financial condition, results of operations and cash flows. In May 2014, the FASB issued ASC Topic 606, Revenue from Contracts with Customers, a replacement of Revenue Recognition (Topic 605). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for us beginning in fiscal 2018 and can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are analyzing the impact of the new standard on our current accounting policies and internal controls and the required software changes required to implement the new standard. Although we have not completed all of the required due diligence, we have identified the certain impacts to our revenue recognition policies related to gift card breakage and our customer loyalty programs. Whereas we currently recognize gift card breakage, net of required escheatment, 60 months after the gift card is issued, the new standard will require us to recognize gift card breakage, net of required escheatment, over the redemption pattern of gift cards. Additionally, whereas under current standards we utilize the incremental cost method to account for our customer loyalty programs, the new standard will require us to account for our customer loyalty program as revenue which will require us to defer a portion of our incremental sales to loyalty rewards to be earned by reward members. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes, which requires all deferred tax assets and liabilities to be classified as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. The new standard will also no longer require allocating valuation allowances between current and noncurrent deferred tax assets because those allowances also will be classified as noncurrent. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods and the Company can adopt the guidance either prospectively or retrospectively. We do not expect the adoption of this standard to have a material impact on our financial condition, results of operations or cash flows. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Under current guidance, net realizable value is one of several calculations an entity needs to make to measure inventory at the lower of cost or market. However, companies will continue to apply their existing impairment models to inventories that are accounted for using last-in first-out (LIFO) and the retail inventory method (RIM). The guidance, which can be early adopted, is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years and the guidance must be applied prospectively after the date of adoption. We do not expect the adoption of this standard to have a material impact on our financial condition, results of operations or cash flows. In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 will change how companies account for certain aspects of share-based payments to employees. Entities will be required to recognize the income tax effects of awards (windfalls or shortfalls) in the income statement when the awards vest or are settled (i.e., additional paid-in capital or APIC pools will be eliminated). The guidance on employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation and for forfeitures is changing. The ASU also provides a practical expedient for public companies that will allow the use of a simplified method to estimate the expected term for certain awards. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. As a result of ASU 2016-09 requiring all windfalls and shortfalls to be recognized when they arise, excess tax benefits that were not previously recognized because the related tax deduction had not reduced current taxes payable are to be recorded on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of the period in which the new guidance is adopted. Additionally, the deferred tax assets recognized as a result of this transition guidance will need to be assessed for realizability and any valuation allowance should be recognized as part of the cumulative effect adjustment to retained earnings also as a result of this transition guidance. Considering these aspects of transitioning to the new guidance, there will be no impact to retained earnings as a result of a valuation allowance being recorded against the related deferred tax asset recorded as the cumulative adjustment. In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-05). Under the ASU, the novation of a derivative contract (i.e., a change in the counterparty) in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. The hedge accounting relationship could continue uninterrupted if all of the other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods therein. Early adoption is permitted. Entities may apply the guidance prospectively or on a modified retrospective basis. We are currently evaluating the effect that adopting this new accounting guidance will have on our financial condition, results of operations or cash flows. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-15). ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods therein. Early adoption is permitted. Entities should apply the guidance retrospectively, but if it is impracticable to do so for an issue, the amendments related to that issue may be applied prospectively. We are currently evaluating the effect that adopting this new accounting guidance will have on our Consolidated Statements of Cash Flows. |
Earnings/(Loss) per Share |
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Earnings/(Loss) per Share | Earnings/(Loss) per Share Net income/(loss) and shares used to compute basic and diluted EPS are reconciled below:
The following average potential shares of common stock were excluded from the diluted EPS calculation because their effect would have been anti-dilutive:
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Other Assets | Other Assets
(1) Amounts are net of an accumulated impairment loss of $9 million. Our indefinite-lived intangible assets consists of our worldwide rights for the Liz Claiborne® family of trademarks and related intellectual property and our ownership of the U.S. and Puerto Rico rights of the monet® trademarks and related intellectual property. In connection with our annual indefinite-lived intangible assets impairment tests performed during the fourth quarter of 2016, we did not record an impairment for our indefinite-lived intangible assets as the estimated fair values exceeded the carrying values of the underlying assets. |
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Other Accounts Payable and Accrued Expenses | Other Accounts Payable and Accrued Expenses
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Other Liabilities |
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Other Liabilities | Other Liabilities
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Derivative Financial Instruments (Notes) |
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Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivative Financial Instruments We use derivative financial instruments for hedging and non-trading purposes to manage our exposure to changes in interest rates. Use of derivative financial instruments in hedging programs subjects us to certain risks, such as market and credit risks. Market risk represents the possibility that the value of the derivative instrument will change. In a hedging relationship, the change in the value of the derivative is offset to a great extent by the change in the value of the underlying hedged item. Credit risk related to derivatives represents the possibility that the counterparty will not fulfill the terms of the contract. The notional, or contractual amount of our derivative financial instruments is used to measure interest to be paid or received and does not represent our exposure due to credit risk. Credit risk is monitored through established approval procedures, including setting concentration limits by counterparty, reviewing credit ratings and requiring collateral (generally cash) from the counterparty when appropriate. When we use derivative financial instruments for the purpose of hedging our exposure to interest rates, the contract terms of a hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria are recorded using hedge accounting. If a derivative instrument is a hedge, depending on the nature of the hedge, changes in the fair value of the instrument will either be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or be recognized in Accumulated other comprehensive income/(loss) until the hedged item is recognized in earnings. The ineffective portion of an instrument’s change in fair value will be immediately recognized in earnings during the period. Instruments that do not meet the criteria for hedge accounting, or contracts for which we have not elected hedge accounting, are valued at fair value with unrealized gains or losses reported in earnings during the period of change. Effective May 7, 2015, we entered into interest rate swap agreements with notional amounts totaling $1,250 million to fix a portion of our variable LIBOR-based interest payments. The interest rate swap agreements have a weighted-average fixed rate of 2.04%, mature on May 7, 2020 and have been designated as cash flow hedges. The fair value of our interest rate swaps are recorded in the Consolidated Balance Sheets as an asset or a liability (see Note 9). The effective portion of the interest rate swaps' changes in fair values is reported in Accumulated other comprehensive income/(loss) (see Note 12), and the ineffective portion is reported in Net income/(loss). Amounts in Accumulated other comprehensive income/(loss) are reclassified into Net income/(loss) when the related interest payments affect earnings. For the periods presented, all of the interest rate swaps were 100% effective. Information regarding the pre-tax changes in the fair value of our interest rate swaps is as follows:
Information regarding the gross amounts of our derivative instruments in the Consolidated Balance Sheets is as follows:
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Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures | Fair Value Disclosures In determining fair value, the accounting standards establish a three level hierarchy for inputs used in measuring fair value, as follows:
Cash Flow Hedges Measured on a Recurring Basis The $12 million fair value of our cash flow hedges are valued in the market using discounted cash flow techniques which use quoted market interest rates in discounted cash flow calculations which consider the instrument's term, notional amount, discount rate and credit risk. Significant inputs to the derivative valuation for interest rate swaps are observable in the active markets and are classified as Level 2 in the fair value measurement hierarchy. Other Non-Financial Assets Measured on a non-Recurring Basis In 2014, assets of 19 underperforming department stores that continued to operate with carrying values of $32 million were written down to their estimated fair values of $2 million resulting in impairment charges of $30 million. Store impairment charges are recorded in the line item Real estate and other, net in the Consolidated Statements of Operations. Key assumptions used to determine fair values were future cash flows including, among other things, expected future operating performance and changes in economic conditions as well as other market information obtained from brokers. Significant inputs related to valuing the store related assets are classified as Level 3 in the fair value measurement hierarchy. Other Financial Instruments Carrying values and fair values of financial instruments that are not carried at fair value in the Consolidated Balance Sheets are as follows:
The fair value of long-term debt is estimated by obtaining quotes from brokers or is based on current rates offered for similar debt. As of January 28, 2017 and January 30, 2016, the fair values of cash and cash equivalents, accounts payable and short-term borrowings approximate their carrying values due to the short-term nature of these instruments. Concentrations of Credit Risk We have no significant concentrations of credit risk. |
Credit Facility |
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Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility The Company has a $2,350 million senior secured asset-based credit facility (2014 Credit Facility), comprised of a $2,350 million revolving line of credit (Revolving Facility). During 2015, the Company amended the 2014 Credit Facility to increase the Revolving Facility from $1,850 million to $2,350 million, and in connection with upsizing the Revolving Facility, the Company prepaid and retired the $494 million outstanding principal amount of the $500 million term loan under the 2014 Credit Facility. The 2014 Credit Facility matures on June 20, 2019. The 2014 Credit Facility is secured by a perfected first-priority security interest in substantially all of our eligible credit card receivables, accounts receivable and inventory. The Revolving Facility is available for general corporate purposes, including the issuance of letters of credit. Pricing under the Revolving Facility is tiered based on our utilization under the line of credit. JCP’s obligations under the 2014 Credit Facility are guaranteed by J. C. Penney Company, Inc. The borrowing base under the Revolving Facility is limited to a maximum of 85% of eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% of the liquidation value of our inventory, net of certain reserves. Letters of credit reduce the amount available to borrow by their face value. In addition, the maximum availability is limited by a minimum excess availability threshold which is the lesser of 10% of the borrowing base or $200 million, subject to a minimum threshold requirement of $150 million. As of the end of 2016, we had no borrowings outstanding under the Revolving Facility. In addition, as of the end of 2016, we had $2,061 million available for borrowing, of which $157 million was reserved for outstanding standby and import letters of credit, none of which have been drawn on, leaving $1,904 million for future borrowings. The applicable rate for standby and import letters of credit was 2.50% and 1.25%, respectively, while the required commitment fee was 0.375% for the unused portion of the Revolving Facility. |
Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt
During the first quarter of 2016, we repurchased and retired $60 million aggregate principal amount of our outstanding debt resulting in a gain on extinguishment of debt of $4 million. During the second quarter of 2016, we completed the refinancing of our $2.25 billion five-year senior secured term loan facility entered into in 2013 (2013 Term Loan Facility) with an amended and restated $1.688 billion seven-year senior secured term loan credit facility (2016 Term Loan Facility) and the issuance of $500 million of 5.875% Senior Secured Notes due 2023 (Senior Secured Notes), resulting in a loss on extinguishment of debt of $34 million. The 2016 Term Loan Facility bears interest at a rate of LIBOR (subject to a 1% floor) plus 4.25% and matures on June 23, 2023. We are required to make quarterly repayments in a principal amount equal to $10.55 million during the seven-year term, subject to certain reductions for mandatory and optional prepayments. Proceeds from the 2016 Term Loan Facility and the Senior Secured Notes were used to repay the entire outstanding principal balance of the 2013 Term Loan Facility. The 2016 Term Loan Facility and the Senior Secured Notes are guaranteed by the Company and certain subsidiaries of JCP and are secured by mortgages on certain real estate of JCP and the guarantors. Scheduled Annual Principal Payments on Long-Term Debt, Excluding Capital Leases Financing Obligation and Note Payable
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Stockholders' Equity |
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Stockholders' Equity | Stockholders’ Equity Accumulated Other Comprehensive Income/(Loss) The following table shows the changes in accumulated other comprehensive income/(loss) balances for 2016 and 2015:
Common Stock On a combined basis, our 401(k) savings plan, including our employee stock ownership plan (ESOP), held approximately 14 million shares, or approximately 4.5% of outstanding Company common stock, at January 28, 2017. Under our 2016 senior secured term loan, we are subject to restrictive covenants regarding our ability to pay cash dividends. Preferred Stock We have authorized 25 million shares of preferred stock; no shares of preferred stock were issued and outstanding as of January 28, 2017 or January 30, 2016. Stock Warrant On June 13, 2011, prior to his employment, we entered into a warrant purchase agreement with Ronald B. Johnson pursuant to which Mr. Johnson made a personal investment in the Company by purchasing a warrant to acquire approximately 7.3 million shares of J. C. Penney Company, Inc. common stock for a purchase price of approximately $50 million at a mutually determined fair value of $6.89 per share. The warrant has an exercise price of $29.92 per share, subject to customary adjustments resulting from a stock split, reverse stock split, or other extraordinary distribution with respect to J. C. Penney Company, Inc. common stock. The warrant has a term of seven and one-half years and was initially exercisable after the sixth anniversary, or June 13, 2017; however, the warrant became immediately exercisable upon the termination of Mr. Johnson’s employment with us in April 2013. The warrant is also subject to transfer restrictions. The proceeds from the sale of the warrant were recorded as additional paid-in capital. Stockholders' Rights Agreement As authorized by our Company’s Board of Directors (the Board), on January 27, 2014, the Company entered into an Amended and Restated Rights Agreement (Amended Rights Agreement) with Computershare Inc., as Rights Agent (Rights Agent), amending, restating and replacing the Rights Agreement, dated as of August 22, 2013 (Original Rights Agreement), between the Company and the Rights Agent. Pursuant to the terms of the Original Rights Agreement, one preferred stock purchase right (a Right) was attached to each outstanding share of Common Stock of $0.50 par value of the Company (Common Stock) held by holders of record as of the close of business on September 3, 2013. The Company has issued one Right in respect of each new share of Common Stock issued since the record date. The Rights, registered on August 23, 2013, trade with and are inseparable from our Common Stock and will not be evidenced by separate certificates unless they become exercisable. The purpose of the Amended Rights Agreement is to diminish the risk that the Company's ability to use its net operating losses and other tax assets to reduce potential future federal income tax obligations would become subject to limitations by reason of the Company's experiencing an "ownership change" as defined under Section 382 of the Internal Revenue Code of 1986, as amended (the Code). Ownership changes under Section 382 generally relate to the cumulative change in ownership among stockholders with an ownership interest of 5% or more (as determined under Section 382's rules) over a rolling three year period. The Amended Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 by deterring any person or group from acquiring beneficial ownership of 4.9% or more of the outstanding Common Stock. The amendments to the Original Rights Agreement also extended the expiration date of the Rights from August 20, 2014 to January 26, 2017 and amended certain other provisions, including the definition of "beneficial ownership" to include terms appropriate for the purpose of preserving tax benefits. The Board authorized to extend the term of the rights plan for an additional three years and we will submit the extension of the rights plan to a vote at our annual meeting of stockholders in May 2017. If stockholders do not approve the extension of the rights plan, the rights plan will terminate. Each Right entitles its holder to purchase from the Company 1/1000th of a share of a newly authorized series of participating preferred stock at an exercise price of $55.00, subject to adjustment in accordance with the terms of the Amended Rights Agreement, once the Rights become exercisable. In general terms, under the Amended Rights Agreement, the Rights become exercisable if any person or group acquires 4.9% or more of the Common Stock or, in the case of any person or group that owned 4.9% or more of the Common Stock as of January 27, 2014, upon the acquisition of any additional shares by such person or group. In addition, the Company, its subsidiaries, employee benefit plans of the Company or any of its subsidiaries, and any entity holding Common Stock for or pursuant to the terms of any such plan, are excepted. Upon exercise of the Right in accordance with the Amended Rights Agreement, the holder would be able to purchase a number of shares of Common Stock from the Company having an aggregate market value (as defined in the Amended Rights Agreement) equal to twice the then-current exercise price for an amount in cash equal to the then-current exercise price. The Rights will not prevent an ownership change from occurring under Section 382 of the Code or a takeover of the Company, but may cause substantial dilution to a person that acquires 4.9% or more of our Common Stock. |
Stock-Based Compensation |
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Share-based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation We grant stock-based compensation awards to employees and non-employee directors under our equity compensation plan. On May 20, 2016, our stockholders approved the J. C. Penney Company, Inc. 2016 Long-Term Incentive Plan (2016 Plan), which has a fungible share design in which each stock option will count as one share issued and each stock award will count as 1.6 shares issued, except for stock awards issued from January 30, 2016 to May 20, 2016, the effective date of the 2016 Plan, in which each stock award counted as two shares issued. The 2016 Plan reserved 12.25 million shares of common stock or 19.6 million options for future grants and will terminate on May 30, 2021. In addition, shares underlying any outstanding stock award or stock option grant canceled prior to vesting or exercise become available for use under the 2016 Plan. Under the terms of the 2016 Plan, all grants made after January 30, 2016 reduce the shares available for grant under the 2016 Plan. As of January 28, 2017, a maximum of 18.4 million shares of stock were available for future grant under the 2016 Plan. Our stock option and restricted stock award grants have averaged about 2.7% of outstanding stock over the past three years. Authorized shares of the Company's common stock are used to settle the exercise of stock options, granting of restricted shares and vesting of restricted stock units. Stock-based Compensation Cost The components of total stock-based compensation costs are as follows:
Stock Options The following table summarizes stock option activity during the year ended January 28, 2017:
Cash proceeds, tax benefits and intrinsic value related to total stock options exercised are provided in the following table:
As of January 28, 2017, we had $12 million of unrecognized and unearned compensation expense, net of estimated forfeitures, for stock options not yet vested, which will be recognized as expense over the remaining weighted-average vesting period of approximately two years. Our weighted-average fair value of stock options at grant date was $4.89 in 2016, $3.48 in 2015 and $3.78 in 2014. We primarily used the binomial lattice valuation model in 2016 and 2015 and the Monte Carlo simulation model in 2014 to determine the fair value of the stock options granted using the following assumptions:
(1) Following the May 1, 2012 payment, we discontinued the quarterly $0.20 per share dividend. Stock Awards The following table summarizes our non-vested stock awards activity during the year ended January 28, 2017:
As of January 28, 2017, we had $38 million of unrecognized compensation expense related to unearned employee stock awards, which will be recognized over the remaining weighted-average vesting period of approximately two years. The aggregate market value of shares vested during 2016, 2015 and 2014 was $30 million, $16 million and $4 million, respectively, compared to an aggregate grant date fair value of $28 million, $27 million and $9 million, respectively. In addition to the grants above, on March 3, 2016, we granted approximately 1.8 million phantom units as part of our management incentive compensation plan, which are similar to RSUs in that the number of units granted was based on the price of our stock, but the units will be settled in cash based on the value of our stock on the vesting date, limited to $21.68 per phantom unit. The fair value of the awards is remeasured at each reporting period and was $6.45 per share as of January 28, 2017. Compensation expense, which is variable, is recognized over the vesting period with a corresponding liability, which is recorded in Other liabilities in our Consolidated Balance Sheets. The phantom units have a liability of $10 million as of January 28, 2017, and $22 million in cash was paid during 2016 for previously granted phantom units. |
Leases |
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Leases | Leases, Financing Obligation and Note Payable We conduct a major part of our operations from leased premises that include retail stores, store distribution centers, warehouses, offices and other facilities. Almost all leases will expire during the next 20 years; however, most leases will be renewed, primarily through an option exercise, or replaced by leases on other premises. We also lease data processing equipment and other personal property under operating leases of primarily three to five years. Rent expense, net of sublease income, was as follows:
As of January 28, 2017, future minimum lease payments for non-cancelable operating leases, including lease renewals determined to be reasonably assured and capital leases, including our note payable, were as follows:
On December 29, 2016, the Company executed a sale-leaseback transaction for its Home Office where the related real estate was sold for $273 million and the Company leased back approximately 65% of the building for an initial term of 15 years and three options to renew the lease for five-year increments. The sale price of the building encompassed net cash proceeds of $216 million, after the payment of $7 million in related closing costs, and seller-financing of $50 million, that is due to the Company in four years along with interest at an annual rate of 5%. The seller-financing portion of the transaction created a form of continuing involvement which precludes sale-leaseback accounting until the related note is paid in full. Accordingly, the Company accounted for the sale-leaseback as a financing transaction with the Home Office remaining on our books at its then carrying value, the net cash proceeds received being reflected as a financing obligation, and the future rental payments to the landlord being treated as debt service and applied to interest and principal over the initial 15 year term. As of January 28, 2017, future minimum lease payments for capital leases and payments related to our financing obligation and note payable were as follows:
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Retirement Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefit Plans | Retirement Benefit Plans We provide retirement pension benefits, postretirement health and welfare benefits, as well as 401(k) savings, profit-sharing and stock ownership plan benefits to various segments of our workforce. Retirement benefits are an important part of our total compensation and benefits program designed to retain and attract qualified, talented employees. Pension benefits are provided through defined benefit pension plans consisting of a non-contributory qualified pension plan (Primary Pension Plan) and, for certain management employees, non-contributory supplemental retirement plans, including a 1997 voluntary early retirement plan. Retirement and other benefits include:
Defined Benefit Pension Plans Primary Pension Plan — Funded The Primary Pension Plan is a funded non-contributory qualified pension plan, initiated in 1966 and closed to new entrants on January 1, 2007. The plan is funded by Company contributions to a trust fund, which are held for the sole benefit of participants and beneficiaries. Supplemental Retirement Plans — Unfunded We have unfunded supplemental retirement plans, which provide retirement benefits to certain management employees. We pay ongoing benefits from operating cash flow and cash investments. The plans are a Supplemental Retirement Program and a Benefit Restoration Plan. Participation in the Supplemental Retirement Program is limited to employees who were annual incentive-eligible management employees as of December 31, 1995. Benefits for these plans are based on length of service and final average compensation. The Benefit Restoration Plan is intended to make up benefits that could not be paid by the Primary Pension Plan due to governmental limits on the amount of benefits and the level of pay considered in the calculation of benefits. The Supplemental Retirement Program is a non-qualified plan that was designed to allow eligible management employees to retire at age 60 with retirement income comparable to the age 65 benefit provided under the Primary Pension Plan and Benefit Restoration Plan. In addition, the Supplemental Retirement Program offers participants who leave between ages 60 and 62 benefits equal to the estimated social security benefits payable at age 62. The Supplemental Retirement Program also continues Company-paid term life insurance at a declining rate until it is phased out at age 70. Employee-paid term life insurance through age 65 is continued under a separate plan (Supplemental Term Life Insurance Plan for Management Profit-Sharing Employees). Primary Pension Plan Lump-Sum Payment Offer and Annuity Contract Purchase In August 2015, as a result of a plan amendment, we offered approximately 31,000 retirees and beneficiaries in the Primary Pension Plan who commenced their benefit between January 1, 2000 and August 31, 2012 the option to receive a lump-sum settlement payment. In addition, we offered approximately 8,000 participants in the Primary Pension Plan who separated from service and had a deferred vested benefit as of August 31, 2012 the option to receive a lump-sum settlement payment. Approximately 12,000 retirees and beneficiaries elected to receive voluntary lump-sum payments to settle the Primary Pension Plan's obligation to them. In addition, approximately 1,900 former employees having deferred vested benefits elected to receive lump-sums. The lump-sum settlement payments totaling $717 million were made by the Company on November 5, 2015 using assets from the Primary Pension Plan. On December 7, 2015, the Company completed the purchase of a group annuity contract that transferred to The Prudential Insurance Company of America the pension benefit obligation of approximately 18,000 retirees totaling $838 million. Actuarial loss of $180 million was recognized as settlement expense as a result of the lump-sum offer payment and the purchase of the group annuity contract. Pension Expense/(Income) for Defined Benefit Pension Plans The components of net periodic benefit expense/(income) for our Primary Pension Plan and our non-contributory supplemental pension plans are as follows:
The defined benefit plan pension expense shown in the above table is included as a separate line item in the Consolidated Statements of Operations. During 2014, we transferred $56 million of supplemental pension plan benefits, as allowed under the Employee Retirement Income Security Act of 1974, out of our supplemental pension plans and into our Primary Pension Plan. The transfer did not have a significant impact on our Consolidated Financial Statements; however, it did result in a gain of $51 million for our supplemental pension plans and loss of $51 million for our Primary Pension Plan. Assumptions The weighted-average actuarial assumptions used to determine expense were as follows:
The expected return on plan assets is based on the plan’s long-term asset allocation policy, historical returns for plan assets and overall capital market returns, taking into account current and expected market conditions. The discount rate used to measure pension expense each year is the rate as of the beginning of the year (i.e., the prior measurement date). The discount rate used, determined by the plan actuary, was based on a hypothetical AA yield curve represented by a series of bonds maturing over the next 30 years, designed to match the corresponding pension benefit cash payments to retirees. The salary progression rate to measure pension expense was based on age ranges and projected forward. Funded Status As of the end of 2016, the funded status of the Primary Pension Plan was 99%. The Primary Benefit Obligation (PBO) is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases. Under the Employee Retirement Income Security Act of 1974 (ERISA), the funded status of the plan exceeded 100% as of December 31, 2016 and 2015, the qualified pension plan’s year end. The following table provides a reconciliation of benefit obligations, plan assets and the funded status of the Primary Pension Plan and supplemental pension plans:
In 2016, the funded status of the Primary Pension Plan increased by $22 million primarily due to the performance of plan assets. The actual one-year return on pension plan assets at the measurement date was 12.3% in 2016, bringing the annualized return since inception of the plan to 8.9%. The following pre-tax amounts were recognized in Accumulated other comprehensive income/(loss) in the Consolidated Balance Sheets as of the end of 2016 and 2015:
Assumptions to Determine Obligations The weighted-average actuarial assumptions used to determine benefit obligations for each of the years below were as follows:
Accumulated Benefit Obligation (ABO) The ABO is the present value of benefits earned to date, assuming no future salary growth. The ABO for our Primary Pension Plan was $3.2 billion and $3.1 billion as of the end of 2016 and 2015, respectively. At the end of 2016, plan assets of $3.5 billion for the Primary Pension Plan were above the ABO. The ABO for our unfunded supplemental pension plans was $133 million and $153 million as of the end of 2016 and 2015, respectively. Primary Pension Plan Asset Allocation The target allocation ranges for each asset class as of the end of 2016 and the fair value of each asset class as a percent of the total fair value of pension plan assets were as follows:
Asset Allocation Strategy In 2009, we began implementing a liability-driven investment (LDI) strategy to lower the plan’s volatility risk and minimize the impact of interest rate changes on the plan funded status. The implementation of the LDI strategy is phased in over time by reallocating the plan’s assets more towards fixed income investments (i.e., debt securities) that are more closely matched in terms of duration to the plan liability. The plan’s asset portfolio is actively managed and primarily invested in fixed income balanced with investments in equity securities and other asset classes to maintain an efficient risk/return diversification profile. The risk of loss in the plan’s equity portfolio is mitigated by investing in a broad range of equity securities across different sectors and countries. Investment types, including high-yield debt securities, illiquid assets such as real estate, the use of derivatives and Company securities are set forth in written guidelines established for each investment manager and monitored by the plan’s management team. The plan’s asset allocation policy is designed to meet the plan’s future pension benefit obligations. Under the policy, asset classes are periodically reviewed and rebalanced as necessary, to ensure that the mix continues to be appropriate relative to established targets and ranges. We have an internal Benefit Plans Investment Committee (BPIC), which consists of senior executives who have established a review process of asset allocation and investment strategies and oversee risk management practices associated with the management of the plan’s assets. Key risk management practices include having an established and broad decision-making framework in place, focused on long-term plan objectives. This framework consists of the BPIC and various third parties, including investment managers, an investment consultant, an actuary and a trustee/custodian. The funded status of the plan is monitored on a continuous basis, including quarterly reviews with updated market and liability information. Actual asset allocations are monitored monthly and rebalancing actions are executed at least quarterly, if needed. To manage the risk associated with an actively managed portfolio, the plan’s management team reviews each manager’s portfolio on a quarterly basis and has written manager guidelines in place, which are adjusted as necessary to ensure appropriate diversification levels. Finally, to minimize operational risk, we utilize a master custodian for all plan assets, and each investment manager reconciles its account with the custodian at least quarterly. Fair Value of Primary Pension Plan Assets The tables below provide the fair values of the Primary Pension Plan’s assets as of the end of 2016 and 2015, by major class of asset.
Following is a description of the valuation methodologies used for Primary Pension Plan assets measured at fair value. Cash – Cash is valued at cost which approximates fair value, and is classified as level 1 of the fair value hierarchy. Common Collective Trusts – Common collective trusts are pools of investments within cash equivalents, equity and fixed income that are benchmarked relative to a comparable index. They are valued on the basis of the relative interest of each participating investor in the fair value of the underlying assets. The investments are are valued at net asset value (NAV) as fair value and are classified as level 2 of the fair value hierarchy. Equity Securities – Equity securities are common stocks and preferred stocks valued based on the price of the security as listed on an open active exchange and classified as level 1 of the fair value hierarchy, as well as warrants and preferred stock that are valued at a price, which is based on a broker quote in an over-the-counter market, and are classified as level 2 of the fair value hierarchy. Private Equity – Private equity is composed of interests in private equity funds valued on the basis of the relative interest of each participating investor in the fair value of the underlying assets and/or common stock of privately held companies. There are no observable market values for private equity funds. The valuations for the funds are derived using a combination of different methodologies including (1) the market approach, which consists of analyzing market transactions for comparable assets, (2) the income approach using the discounted cash flow model, or (3) cost method. Private equity funds also provide audited financial statements. Private equity investments are valued at NAV as a practical expedient. Corporate Bonds – Corporate bonds and Corporate loans are valued at a price which is based on observable market information in primary markets or a broker quote in an over-the-counter market, and are classified as level 2 or level 3 of the fair value hierarchy. Swaps – swap contracts are based on broker quotes in an over-the-counter market and are classified as level 2 of the fair value hierarchy. Government, Municipal Bonds and Mortgaged Backed Securities – Government and municipal securities are valued at a price based on a broker quote in an over-the-counter market and classified as level 2 of the fair value hierarchy. Mortgage backed securities are valued at a price based on observable market information or a broker quote in an over-the-counter market and classified as level 2 of the fair value hierarchy. Other Fixed Income – non-mortgage asset backed securities, collateral held in short-term investments for derivative contract and derivatives composed of futures contracts, option contracts and other fixed income derivatives valued at a price based on observable market information or a broker quote in an over-the-counter market and classified as level 2 of the fair value hierarchy. Real Estate – Real estate is comprised of public and private real estate investments. Real estate investments through registered investment companies that trade on an exchange are classified as level 1 of the fair value hierarchy. Investments through open end private real estate funds that are valued at the reported NAV as fair value and are classified as level 2 of the fair value hierarchy. Private real estate investments through partnership interests that are valued based on different methodologies including discounted cash flow, direct capitalization and market comparable analysis are valued at NAV as a practical expedient. Hedge Fund – Hedge funds exposure is through fund of funds, which are made up of over 30 different hedge fund managers diversified over different hedge strategies. The fair value of the hedge fund is determined by the fund's administrator using valuation provided by the third party administrator for each of the underlying funds. Hedge fund investments are valued at NAV as a practical expedient. The following tables set forth a summary of changes in the fair value of the Primary Pension Plan’s level 3 investment assets:
Contributions Our policy with respect to funding the Primary Pension Plan is to fund at least the minimum required by ERISA rules, as amended by the Pension Protection Act of 2006, and not more than the maximum amount deductible for tax purposes. Due to our past funding of the pension plan and overall positive growth in plan assets since plan inception, there will not be any required cash contribution for funding of plan assets in 2017 under ERISA, as amended by the Pension Protection Act of 2006. Our contributions to the unfunded non-qualified supplemental retirement plans are equal to the amount of benefit payments made to retirees throughout the year and for 2017 are anticipated to be approximately $26 million. Benefits are paid in the form of five equal annual installments to participants and no election as to the form of benefit is provided for in the unfunded plans. The following sets forth our estimated future benefit payments:
Other Benefit Plans Postretirement Benefits — Medical and Dental We provide medical and dental benefits to retirees through a contributory medical and dental plan based on age and years of service. We provide a defined dollar commitment toward retiree medical premiums. Effective June 7, 2005, we amended the medical plan to reduce our subsidy to post-age 65 retirees and spouses by 45% beginning January 1, 2006, and then fully eliminated the subsidy after December 31, 2006. As disclosed previously, the postretirement benefit plan was amended in 2001 to reduce and cap the per capita dollar amount of the benefit costs that would be paid by the plan. Thus, changes in the assumed or actual health care cost trend rates do not materially affect the accumulated postretirement benefit obligation or our annual expense. The net periodic postretirement benefit income of $17 million in 2016, $7 million in 2015 and $8 million in 2014 is included in SG&A expenses in the Consolidated Statements of Operations. The postretirement medical and dental plan was terminated effective December 31, 2016. At the end of 2015, the postretirement medical and dental plan had no assets and an accumulated postretirement benefit obligation (APBO) of $8 million. Defined Contribution Plans The Savings, Profit-Sharing and Stock Ownership Plan (Savings Plan) is a qualified defined contribution plan, a 401(k) plan, available to all eligible employees. Effective January 1, 2007, all employees who are age 21 or older are immediately eligible to participate in and contribute a percentage of their pay to the Savings Plan. Eligible employees, who have completed one year and at least 1,000 hours of service within an eligibility period, are offered a fixed matching contribution each pay period equal to 50% of up to 6% of pay contributed by the employee. Matching contributions are credited to employees’ accounts in accordance with their investment elections and fully vest after three years. We may make additional discretionary matching contributions. The Savings Plan includes a non-contributory retirement account. Participants who are hired or rehired on or after January 1, 2007 and who have completed at least 1,000 hours of service within an eligibility period receive a Company contribution in an amount equal to 2% of the participants’ annual pay. This Company contribution is in lieu of the primary pension benefit that was closed to employees hired or rehired on or after that date. Participating employees are fully vested after three years. Effective January 1, 2017, the Company added a Safe Harbor 401(k) Plan that was made available for active employees hired on or after January 1, 2007. The Company matching contributions under the Safe Harbor Plan are equal to 100% of up to 5% of pay contributed by the employee. Matching contributions are credited to employees' accounts in accordance with their investment elections and fully vest immediately. The Safe Harbor Plan replaces the non-contributory retirement account. In addition to the Savings Plan, we sponsor the Mirror Savings Plan, which is a non-qualified contributory unfunded defined contribution plan offered to certain management employees. This plan supplements retirement savings under the Savings Plan for eligible management employees who choose to participate in it. The plan’s investment options generally mirror the traditional Savings Plan investment options. Similar to the supplemental retirement plans, the Mirror Savings Plan benefits are paid from our operating cash flow and cash investments. The expense for these plans, which was predominantly included in SG&A expenses in the Consolidated Statements of Operations, was $49 million in 2016, $56 million in 2015 and $53 million in 2014. |
Restructuring and Management Transition |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Management Transition | Restructuring and Management Transition The components of Restructuring and management transition include:
The composition of restructuring and management transition charges was as follows:
Activity for the restructuring and management transition liability for 2016 and 2015 was as follows:
Non-cash amounts represent charges that do not result in cash expenditures including increased depreciation and write-off of store fixtures and stock-based compensation. |
Real Estate and Other, Net |
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Real Estate and Other, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Other Expense Disclosure [Text Block] | Real Estate and Other, Net Real estate and other consists of ongoing operating income from our real estate subsidiaries. Real estate and other also includes net gains from the sale of facilities and equipment that are no longer used in operations, asset impairments, accruals for certain litigation and other non-operating charges and credits. In addition, during the first quarter of 2014, we formed a joint venture to develop the excess property adjacent to our home office facility in Plano, Texas (Home Office Land Joint Venture) in which we contributed approximately 220 acres of excess property adjacent to our home office facility in Plano, Texas. The joint venture was formed to develop the contributed property and our proportional share of the joint venture's activities will be recorded in Real estate and other, net. The composition of real estate and other, net was as follows:
Investment Income from Joint Ventures In 2016, the Company had $28 million in income related to its proportional share of the net income in the Home Office Land Joint Venture and received an aggregate cash distribution of $44 million. In 2015, the Company had $41 million in income related to its proportional share of the net income in the Home Office Land Joint Venture and received an aggregate cash distribution of $36 million. Land Sale In 2016, the Company sold excess land adjacent to its home office for approximately $80 million and recognized an approximate $62 million gain. Other - Settlement of Class Action Lawsuit During 2015, the Company accrued $50 million for the proposed settlement related to a pricing class action lawsuit. Pursuant to the settlement, the Company paid $25 million in cash to certain class members and issued $25 million of store credit to the remainder of the class members. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The components of our income tax expense/(benefit) were as follows:
The following table summarizes a reconciliation of income tax expense/(benefit) compared with the amounts at the U.S. federal statutory income tax rate:
Our deferred tax assets and liabilities were as follows:
Deferred tax assets and liabilities included in our Consolidated Balance Sheets were as follows:
As of January 28, 2017, a valuation allowance of $993 million has been recorded against our deferred tax assets. In assessing the need for the valuation allowance, we considered both positive and negative evidence related to the likelihood of realization of the deferred tax assets. As a result of our assessment, we concluded that, beginning in the second quarter of 2013, our estimate of the realization of deferred tax assets would be based solely on the future reversals of existing taxable temporary differences and tax planning strategies that we would make use of to accelerate taxable income to utilize expiring net operating loss (NOL) and tax credit carryforwards. In accordance with accounting standards, we are required to allocate a portion of our tax provision between operating losses and Accumulated other comprehensive income/(loss). In 2015 and 2014, the company did not benefit any of its operating loss and incurred an actuarial loss in Other comprehensive income/(loss), the tax benefit on which was fully offset by a valuation allowance within Other comprehensive income/(loss). In 2016, we experienced income in both continuing operations and other comprehensive income. Under the allocation rules we are only required to recognize the valuation allowance allocable to the tax benefit attributable to losses in each component of comprehensive income. Accordingly, there is no valuation allowance offsetting a deferred tax benefit attributable to other comprehensive income included in the total valuation allowance of $993 million noted above. However, in 2016, we recorded a $12 million tax benefit in the Consolidated Statements of Operations offset by income tax expense on actuarial gains recorded in Other comprehensive income/(loss). For U.S. federal income tax purposes, we have $2.2 billion of gross NOL carryforwards that expire in 2032 through 2034 and $62 million of tax credit carryforwards that expire at various dates through 2034. These NOL carryforwards include an unrealized gross tax deduction of $28 million (tax effect $11 million) that will be recorded in equity when realized. These carryforwards have a potential to be used to offset future taxable income and reduce future cash tax liabilities by approximately $931 million. The Company’s ability to utilize these carryforwards will depend upon the availability of future taxable income during the carryforward period and, as such, there is no assurance the Company will be able to realize such tax savings. The Company’s ability to utilize NOL carryforwards could be further limited if it were to experience an “ownership change,” as defined in Section 382 of the Code and similar state provisions. An ownership change can occur whenever there is a cumulative shift in the ownership of a company by more than 50 percentage points by one or more “5% stockholders” within a three-year period. The occurrence of such a change generally limits the amount of NOL carryforwards a company could utilize in a given year to the aggregate fair market value of the company’s common stock immediately prior to the ownership change, multiplied by the long-term tax-exempt interest rate in effect for the month of the ownership change. As discussed in Note 12, on January 27, 2014, the Board adopted the Amended Rights Agreement to help prevent acquisitions of the Company’s common stock that could result in an ownership change under Section 382 which helps preserve the Company’s ability to use its NOL and tax credit carryforwards. The Amended Rights Agreement was ratified by the shareholder vote on May 16, 2014 and remains effective through January 26, 2017. Approval required an affirmative vote of the shares of common stock present in person or by proxy at the Annual Meeting. As discussed in Note 12, the Company’s Board of Directors resubmitted the Amended Rights Agreement for stockholder approval of a subsequent three year term. The Amended Rights Agreement is designed to prevent acquisitions of the Company’s common stock that would result in a stockholder owning 4.9% or more of the Company’s common stock (as calculated under Section 382), or any existing holder of 4.9% or more of the Company’s common stock acquiring additional shares, by substantially diluting the ownership interest of any such stockholder unless the stockholder obtains an exemption from the Board. A reconciliation of unrecognized tax benefits is as follows:
Unrecognized tax benefits included in our Consolidated Balance Sheets were as follows:
As of the end of 2016, 2015 and 2014, the unrecognized tax benefits balance included $32 million, $33 million and $36 million, respectively, that, if recognized, would be a benefit in the income tax provision after giving consideration to the offsetting effect of $11 million, $12 million and $13 million, respectively, related to the federal tax deduction of state taxes. The remaining amounts reflect tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing. Accrued interest and penalties related to unrecognized tax benefits included in income tax expense as of the end of 2016, 2015 and 2014 were $2 million, $3 million and $3 million, respectively. We file income tax returns in U.S. federal and state jurisdictions and certain foreign jurisdictions. Our U.S. federal returns have been examined through 2014. We are audited by the taxing authorities of many states and certain foreign countries and are subject to examination by these taxing jurisdictions for years generally after 2008. The tax authorities may have the right to examine prior periods where federal and state NOL and tax credit carryforwards were generated, and make adjustments up to the amount of the NOL and credit carryforward amounts. |
Supplemental Cash Flow Information |
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Supplemental Cash Flow Information | Supplemental Cash Flow Information
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Litigation, Other Contingencies and Guarantees |
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Litigation, Other Contingencies and Guarantees [Abstract] | |
Litigation, Other Contingencies and Guarantees | Litigation and Other Contingencies Litigation Macy’s Litigation On August 16, 2012, Macy’s, Inc. and Macy’s Merchandising Group, Inc. (together the Plaintiffs) filed suit against JCP in the Supreme Court of the State of New York, County of New York, alleging that the Company tortiously interfered with, and engaged in unfair competition relating to, a 2006 agreement between Macy’s and Martha Stewart Living Omnimedia, Inc. (MSLO) by entering into a partnership agreement with MSLO in December 2011. The Plaintiffs sought primarily to prevent the Company from implementing our partnership agreement with MSLO as it related to products in the bedding, bath, kitchen and cookware categories. The suit was consolidated with an already-existing breach of contract lawsuit by the Plaintiffs against MSLO, and a bench trial commenced on February 20, 2013. On October 21, 2013, the Company and MSLO entered into an amendment of the partnership agreement, providing in part that the Company will not sell MSLO-designed merchandise in the bedding, bath, kitchen and cookware categories. On January 2, 2014, MSLO and Macy's announced that they had settled the case as to each other, and MSLO was subsequently dismissed as a defendant. On June 16, 2014, the court issued a ruling against the Company on the remaining claim of intentional interference, and held that Macy’s is not entitled to punitive damages. The court referred other issues related to damages to a Judicial Hearing Officer. On June 30, 2014, the Company appealed the court’s decision, and Macy’s cross-appealed a portion of the decision. On February 26, 2015, the appellate court affirmed the trial court's rulings concerning the claim of intentional interference and lack of punitive damages, and reinstated Macy's claims for intentional interference and unfair competition that had been dismissed during trial. On June 17, 2015, Macy’s appealed the court’s order that the Judicial Hearing Officer proceed with the damages phase of the proceedings on the tortious interference claim. On November 24, 2015, the Judicial Hearing Officer issued a recommendation on the amount of damages to be awarded to Macy’s. On June 6, 2016, the court adopted the Judicial Hearing Officer's recommendation on the amount of damages to be awarded to Macy's. Both parties have filed a notice of appeal. On November 10, 2016, the appellate court issued a ruling affirming the court's order, finding Macy’s challenge to the measure of damages to be untimely. The parties reached a settlement agreement, which was effective as of January 13, 2017. On January 31, 2017, the court entered an order dismissing the case with prejudice. Class Action Securities Litigation The Company, Myron E. Ullman, III and Kenneth H. Hannah are parties to the Marcus consolidated purported class action lawsuit in the U.S. District Court, Eastern District of Texas, Tyler Division. The Marcus consolidated complaint is purportedly brought on behalf of persons who acquired our common stock during the period from August 20, 2013 through September 26, 2013, and alleges claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Plaintiff claims that the defendants made false and misleading statements and/or omissions regarding the Company’s financial condition and business prospects that caused our common stock to trade at artificially inflated prices. The consolidated complaint seeks class certification, unspecified compensatory damages, including interest, reasonable costs and expenses, and other relief as the court may deem just and proper. Defendants filed a motion to dismiss the consolidated complaint which was denied by the court on September 29, 2015. Defendants filed an answer to the consolidated complaint on November 12, 2015. Plaintiff filed a motion for class certification on January 25, 2016, and defendants submitted a response to the motion on April 15, 2016. On August 29, 2016, a magistrate judge issued a report and recommendation that the motion for class certification be granted. Defendants have filed objections to the report and recommendation. Also, on August 26, 2014, plaintiff Nathan Johnson filed a purported class action lawsuit against the Company, Myron E. Ullman, III and Kenneth H. Hannah in the U.S. District Court, Eastern District of Texas, Tyler Division. The suit is purportedly brought on behalf of persons who acquired our securities other than common stock during the period from August 20, 2013 through September 26, 2013, generally mirrors the allegations contained in the Marcus lawsuit discussed above, and seeks similar relief. On June 8, 2015, plaintiff in the Marcus lawsuit amended the consolidated complaint to include the members of the purported class in the Johnson lawsuit, and on June 10, 2015, the Johnson lawsuit was consolidated into the Marcus lawsuit. We believe these lawsuits are without merit and we intend to vigorously defend them. While no assurance can be given as to the ultimate outcome of these matters, we believe that the final resolution of these actions will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. Shareholder Derivative Litigation In October, 2013, two purported shareholder derivative actions were filed against certain present and former members of the Company’s Board of Directors and executives by the following parties in the U.S. District Court, Eastern District of Texas, Sherman Division: Weitzman (filed October 2, 2013) and Zauderer (filed October 3, 2013). The Company is named as a nominal defendant in both suits. The lawsuits assert claims for breaches of fiduciary duties and unjust enrichment based upon alleged false and misleading statements and/or omissions regarding the Company’s financial condition. The lawsuits seek unspecified compensatory damages, restitution, disgorgement by the defendants of all profits, benefits and other compensation, equitable relief to reform the Company’s corporate governance and internal procedures, reasonable costs and expenses, and other relief as the court may deem just and proper. On October 28, 2013, the Court consolidated the two cases into the Weitzman lawsuit. On January 15, 2014, the Court entered an order staying the derivative suits pending certain events in the class action securities litigation described above. Also, in March 2016, plaintiff Frank Lipsius filed a purported shareholder derivative action against certain present and former members of the Company's Board of Directors and executives in the District Court of Collin County in the State of Texas. The Company is named as a nominal defendant in the suit. The suit generally mirrors the allegations contained in the Weitzman and Zauderer suits discussed above, and seeks similar relief. While no assurance can be given as to the ultimate outcome of these matters, we believe that the final resolution of these actions will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. ERISA Class Action Litigation JCP and certain present and former members of JCP's Board of Directors have been sued in a purported class action complaint by plaintiffs Roberto Ramirez and Thomas Ihle, individually and on behalf of all others similarly situated, which was filed on July 8, 2014 in the U.S. District Court, Eastern District of Texas, Tyler Division. The suit alleges that the defendants violated Section 502 of the Employee Retirement Income Security Act (ERISA) by breaching fiduciary duties relating to the J. C. Penney Corporation, Inc. Savings, Profit-Sharing and Stock Ownership Plan (the Plan). The class period is alleged to be between November 1, 2011 and September 27, 2013. Plaintiffs allege that they and others who invested in or held Company stock in the Plan during this period were injured because defendants allegedly made false and misleading statements and/or omissions regarding the Company’s financial condition and business prospects that caused the Company’s common stock to trade at artificially inflated prices. The complaint seeks class certification, declaratory relief, a constructive trust, reimbursement of alleged losses to the Plan, actual damages, attorneys’ fees and costs, and other relief. Defendants filed a motion to dismiss the complaint which was granted in part and denied in part by the court on September 29, 2015. The parties have reached a settlement agreement, subject to court approval, pursuant to which JCP would make available $4.5 million to settle class members’ claims. While no assurance can be given as to the ultimate outcome of this matter, we believe that the final resolution of this action will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. Employment Class Action Litigation JCP is a defendant in a class action proceeding entitled Tschudy v. JCPenney Corporation filed on April 15, 2011 in the U.S. District Court, Southern District of California. The lawsuit alleges that JCP violated the California Labor Code in connection with the alleged forfeiture of accrued and vested vacation time under its “My Time Off” policy. The class consists of all JCP employees who worked in California from April 5, 2007 to the present. Plaintiffs amended the complaint to assert additional claims under the Illinois Wage Payment and Collection Act on behalf of all JCP employees who worked in Illinois from January 1, 2004 to the present. After the court granted JCP’s motion to transfer the Illinois claims, those claims are now pending in a separate action in the U.S. District Court, Northern District of Illinois, entitled Garcia v. JCPenney Corporation. The lawsuits seek compensatory damages, penalties, interest, disgorgement, declaratory and injunctive relief, and attorney’s fees and costs. Plaintiffs in both lawsuits filed motions, which the Company opposed, to certify these actions on behalf of all employees in California and Illinois based on the specific claims at issue. On December 17, 2014, the California court granted plaintiffs’ motion for class certification. Pursuant to a motion by the Company, the California court decertified the class on December 9, 2015. On March 30, 2016, the California court granted JCP’s motion for summary judgment. On April 26, 2016, the California plaintiffs filed a notice of appeal. On May 4, 2016, the California court entered judgment for JCP on all plaintiffs’ claims. The Illinois court denied without prejudice plaintiffs' motion for class certification pending the filing of an amended complaint. Plaintiffs filed their amended complaint in the Illinois lawsuit on April 14, 2015 and the Company has answered. On July 2, 2015, the Illinois plaintiffs renewed their motion for class certification, which the Illinois court granted on March 8, 2016. The parties have reached a settlement agreement, subject to court approval, to resolve the California and Illinois actions for a combined total of $6.75 million. While no assurance can be given as to the ultimate outcome of these matters, we believe that the final resolution of these actions will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. Other Legal Proceedings We are subject to various other legal and governmental proceedings involving routine litigation incidental to our business. Accruals have been established based on our best estimates of our potential liability in certain of these matters, including certain matters discussed above, all of which we believe aggregate to an amount that is not material to the Consolidated Financial Statements. These estimates were developed in consultation with in-house and outside counsel. While no assurance can be given as to the ultimate outcome of these matters, we currently believe that the final resolution of these actions, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. Contingencies As of January 28, 2017, we estimated our total potential environmental liabilities to range from $20 million to $26 million and recorded our best estimate of $24 million in Other accounts payable and accrued expenses and Other liabilities in the Consolidated Balance Sheet as of that date. This estimate covered potential liabilities primarily related to underground storage tanks, remediation of environmental conditions involving our former drugstore locations and asbestos removal in connection with approved plans to renovate or dispose of our facilities. We continue to assess required remediation and the adequacy of environmental reserves as new information becomes available and known conditions are further delineated. If we were to incur losses at the upper end of the estimated range, we do not believe that such losses would have a material effect on our financial condition, results of operations or liquidity. |
Quarterly Results of Operations (Unaudited) |
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Quarterly Results of Operations (Unaudited) | Quarterly Results of Operations (Unaudited) The following is a summary of our quarterly unaudited consolidated results of operations for 2016 and 2015:
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Subsequent Events (Notes) |
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Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events On March 17, 2017, the Company finalized its announced plans to close a distribution facility and 138 stores and to relocate and sell a distribution facility in 2017. These strategic decisions will help align the Company's brick-and-mortar presence with its omnichannel network, thereby redirecting capital resources to invest in locations and initiatives that offer the greatest revenue potential. As a result of the store actions, the Company will close a distribution center located in Lakeland, Florida in early June, at which time operations will transfer to the Company's logistics facility in Atlanta as part of a strategic effort to streamline store support services. Also, on March 10, 2017, the Company entered into a contract to sell its supply chain facility in Buena Park, California for approximately $130 million with plans to close on the sale on or before March 31, 2017. In connection with the store closings, the Company expects to incur charges primarily related to lease termination obligation expenses, non-cash asset impairments and transition costs as the store closings are executed in 2017. The Company also initiated a Voluntary Early Retirement Program (VERP) for approximately 6,000 eligible associates. Eligibility for the VERP will generally include home office, stores and supply chain personnel who met certain criteria related to age and years of service as of January 31, 2017. The consideration period for eligible associates to accept the VERP will end on March 31, 2017. Based on the number of eligible associates that irrevocably accept the VERP, the Company will record the related charges in the first quarter of 2017. |
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Basis of Presentation and Consolidation [Abstract] | ||||||||||||||||||||||||||||||||||||
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Consolidated Financial Statements present the results of J. C. Penney Company, Inc. and our subsidiaries (the Company or JCPenney). All significant inter-company transactions and balances have been eliminated in consolidation. We are a holding company whose principal operating subsidiary is J. C. Penney Corporation, Inc. (JCP). JCP was incorporated in Delaware in 1924, and J. C. Penney Company, Inc. was incorporated in Delaware in 2002, when the holding company structure was implemented. The holding company has no direct subsidiaries other than JCP, and has no independent assets or operations. The Company is a co-obligor (or guarantor, as appropriate) regarding the payment of principal and interest on JCP’s outstanding debt securities. We guarantee certain of JCP’s outstanding debt securities fully and unconditionally. |
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Fiscal Year | Fiscal Year Our fiscal year ends on the Saturday closest to January 31. Unless otherwise stated, references to years in this report relate to fiscal years rather than to calendar years.
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Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America (GAAP), requires us to make assumptions and use estimates that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. |
Significant Accounting Policies (Policy) |
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Accounting Policies [Abstract] | |||||||||||||||||||||
Revenue Recognition, Sales of Goods | Total net sales, which exclude sales taxes and are net of estimated returns, are generally recorded when payment is received and the customer takes possession of the merchandise. |
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Revenue Recognition, Sales of Services | Service revenue is recorded at the time the customer receives the benefit of the service, such as salon, portrait, optical or custom decorating. Commissions earned on sales generated by licensed departments are included as a component of total net sales. Shipping and handling fees charged to customers are also included in total net sales with corresponding costs recorded as cost of goods sold. We provide for estimated future returns based primarily on historical return rates and sales levels. |
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Revenue Recognition, Gift Cards | Gift Card Revenue Recognition At the time gift cards are sold, no revenue is recognized; rather, a liability is established for the face amount of the card. The liability remains recorded until the earlier of redemption, escheatment or 60 months. The liability is relieved and revenue is recognized when gift cards are redeemed for merchandise or services. We escheat a portion of unredeemed gift cards according to Delaware escheatment requirements that govern remittance of the cost of the merchandise portion of unredeemed gift cards over five years old. After reflecting the amount escheated, any remaining liability (referred to as breakage) is relieved and recognized as a reduction of SG&A expenses as an offset to the costs of administering the gift card program. Though our gift cards do not expire, it is our historical experience that the likelihood of redemption after 60 months is remote. The liability for gift cards is recorded in other accounts payable and accrued expenses on the Consolidated Balance Sheets. |
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Customer Loyalty Program | Customer Loyalty Program Customers who spend a certain amount with us using our private label card or registered third party credit cards receive JCP Rewards® certificates, redeemable for merchandise or services in our stores the following two months. In accordance with the incremental cost method, we estimate the net cost of the rewards that will be redeemed and record this as cost of goods sold as rewards points are accumulated. Other administrative costs of the loyalty program are recorded in SG&A expenses as incurred. |
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Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes all costs directly related to bringing merchandise to its final selling destination. These costs include the cost of the merchandise (net of discounts or allowances earned), sourcing and procurement costs, buying and brand development costs, including buyers’ salaries and related expenses, royalties and design fees, freight costs, warehouse operating expenses, merchandise examination, inspection and testing, store merchandise distribution center expenses, including rent, and shipping and handling costs incurred on sales via the Internet. |
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Vendor Allowances | Vendor Allowances We receive vendor support in the form of cash payments or allowances for a variety of reimbursements such as cooperative advertising, markdowns, vendor shipping and packaging compliance, defective merchandise and the purchase of vendor specific fixtures. We have agreements in place with each vendor setting forth the specific conditions for each allowance or payment. Depending on the arrangement, we either recognize the allowance as a reduction of current costs or defer the payment over the period the related merchandise is sold. If the payment is a reimbursement for costs incurred, it is generally offset against those related costs; otherwise, it is treated as a reduction to the cost of merchandise. Markdown reimbursements related to merchandise that has been sold are negotiated and documented by our buying teams and are credited directly to cost of goods sold in the period received. Vendor allowances received prior to merchandise being sold are deferred and recognized as a reduction of inventory and credited to cost of goods sold based on an inventory turnover rate. Vendor compliance credits reimburse us for incremental merchandise handling expenses incurred due to a vendor’s failure to comply with our established shipping or merchandise preparation requirements. Vendor compliance credits are recorded as a reduction of merchandise handling costs. |
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Selling, General and Administrative Expenses | Selling, General and Administrative Expenses SG&A expenses include the following costs, except as related to merchandise buying, sourcing, warehousing or distribution activities: salaries, marketing costs, occupancy and rent expense, utilities and maintenance, pre-opening expenses, costs related to information technology, administrative costs related to our home office and district and regional operations, real and personal property and other taxes (excluding income taxes) and credit/debit card fees. |
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Advertising Cost, Expensed | Advertising costs, which include newspaper, television, Internet search marketing, radio and other media advertising, are expensed either as incurred or the first time the advertisement occurs. |
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Cooperative Advertising Programs | For cooperative advertising programs offered by national brands that require proof of advertising to be provided to the vendor to support the reimbursement of the incurred cost, we offset the allowances against the related advertising expense. Programs that do not require proof of advertising are monitored to ensure that the allowance provided by each vendor is a reimbursement of costs incurred to advertise for that particular vendor’s label. |
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Income Taxes | Income Taxes We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not such assets will be realized. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense in our Consolidated Statements of Operations. |
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Earnings/(Loss) per Share | Earnings/(Loss) per Share Basic earnings/(loss) per share (EPS) is computed by dividing net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income/(loss) by the weighted-average number of common shares outstanding during the period plus the number of additional common shares that would have been outstanding if the potentially dilutive shares had been issued. Potentially dilutive shares include stock options, unvested restricted stock units and awards and a warrant outstanding during the period, using the treasury stock method. Potentially dilutive shares are excluded from the computations of diluted EPS if their effect would be anti-dilutive. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash short-term investments that are highly liquid investments with original maturities of three months or less. Cash short-term investments consist primarily of short-term U.S. Treasury money market funds and a portfolio of highly rated bank deposits and are stated at cost, which approximates fair market value due to the short-term maturity. Cash in banks and in transit also include credit card sales transactions that are settled early in the following period. |
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Merchandise Inventory | Merchandise Inventory Inventories are valued at the lower of cost (using the first-in, first-out or “FIFO” method) or market. For department stores, regional warehouses and store distribution centers, we value inventories using the retail method. Under the retail method, retail values of merchandise groups are converted to a cost basis by applying the specific average cost-to-retail ratio related to each merchandise grouping. For Internet, we use standard cost, representing average vendor cost, to determine lower of cost or market. Physical inventories are taken on a staggered basis at least once per year at all store and supply chain locations, inventory records are adjusted to reflect actual inventory counts and any resulting shortage (shrinkage) is recognized. Following inventory counts, shrinkage is estimated as a percent of sales, based on the most recent physical inventory, in combination with current events and historical experience. We have loss prevention programs and policies in place that are intended to mitigate shrinkage. |
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Property and Equipment, Net | Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed primarily by using the straight-line method over the estimated useful lives of the related assets. We expense routine maintenance and repairs when incurred. We capitalize major replacements and improvements. We remove the cost of assets sold or retired and the related accumulated depreciation or amortization from the accounts and include any resulting gain or loss in net income/(loss). We recognize a liability for the fair value of our conditional asset retirement obligations, which are primarily related to asbestos removal, when probable and if the liability’s fair value can be reasonably estimated. |
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Capitalized Software Costs | Capitalized Software Costs We capitalize costs associated with the acquisition or development of major software for internal use in other assets in our Consolidated Balance Sheets and amortize the asset over the expected useful life of the software, generally between three and seven years. We only capitalize subsequent additions, modifications or upgrades to internal-use software to the extent that such changes allow the software to perform a task it previously did not perform. We expense software maintenance and training costs as incurred. Cloud computing arrangements are evaluated to determine whether the arrangement includes a software license or is a service contract. If determined to be a software license, then the arrangement is capitalized as an other asset and amortized over the expected life of software, generally between three to seven years. If determined to be a service contract, then the cost of the arrangement is expensed as the services are provided. |
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Impairment of Long-Lived and Indefinite-Lived Assets | Impairment of Long-Lived and Indefinite-Lived Assets We evaluate long-lived assets such as store property and equipment and other corporate assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results and significant changes in the manner of use of the assets or our overall business strategies. Potential impairment exists if the estimated undiscounted cash flows expected to result from the use of the asset plus any net proceeds expected from disposition of the asset are less than the carrying value of the asset. The amount of the impairment loss represents the excess of the carrying value of the asset over its fair value and is included in Real estate and other, net in the Consolidated Statements of Operations. We estimate fair value based on either a projected discounted cash flow method using a discount rate that is considered commensurate with the risk inherent in our current business model or appraised value, as appropriate. We also take other factors into consideration in estimating the fair value of our stores, such as local market conditions, operating environment, mall performance and other trends. |
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Indefinite-Lived Intangible Assets | We assess the recoverability of indefinite-lived intangible assets at least annually during the fourth quarter of our fiscal year or whenever events or changes in circumstances indicate that the carrying amount of the indefinite-lived intangible asset may not be fully recoverable. Examples of a change in events or circumstances include, but are not limited to, a decrease in the market price of the asset, a history of cash flow losses related to the use of the asset or a significant adverse change in the extent or manner in which an asset is being used. We test our indefinite-lived intangible assets utilizing the relief from royalty method to determine the estimated fair value for each indefinite-lived intangible asset. The relief from royalty method estimates our theoretical royalty savings from ownership of the intangible asset. Key assumptions used in this model include discount rates, royalty rates, growth rates, sales projections and terminal value rates. |
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Leases | Leases We use a consistent lease term when calculating amortization of leasehold improvements, determining straight-line rent expense under an operating lease and determining classification of leases as either operating or capital. For purposes of recognizing incentives, premiums, rent holidays and minimum rental expenses on a straight-line basis over the terms of operating leases, we use the date of initial possession to begin amortization, which is generally when we take control of the property. Renewal options determined to be reasonably assured are also included in the lease term. Some leases require additional payments based on sales and the related contingent rent is recorded as rent expense when the payment is probable. Some of our lease agreements contain developer/tenant allowances. Upon receipt of such allowances, we record a deferred rent liability in other liabilities on the Consolidated Balance Sheets. The allowances are then amortized on a straight-line basis over the remaining terms of the corresponding leases as a reduction of rent expense. Capital leases are recorded as an asset and an obligation at an amount equal to the present value of the minimum lease payments during the lease term. Assets subject to an operating lease and the related lease payments are not recorded on our balance sheet. Rent expense related to an operating lease is recognized on a straight-line basis over the lease term resulting in periodic deferred rent balances to adjust the cash rent paid. Sale-leasebacks are transactions through which we sell assets and subsequently lease them back. The resulting leases that qualify for sale-leaseback accounting are evaluated and accounted for as operating leases or capital leases. A transaction that does not qualify for sale-leaseback accounting as a result of a prohibited form of continuing involvement is accounted for as a financing. For a financing transaction, we retain the "sold" assets within property and equipment and record a financing obligation equal to the amount of cash proceeds received. Rental payments under such transactions are recognized as a reduction of the financing obligation and as interest expense using an effective interest method. |
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Exit or Disposal Activity Costs | Exit or Disposal Activity Costs Costs associated with exit or disposal activities are recorded at their fair values when a liability has been incurred. Reserves for operating leases are established at the time of closure for the present value of any remaining operating lease obligations (PVOL), net of estimated sublease income. Severance is recorded over the service period required to be rendered in order to receive the termination benefits or, if employees will not be retained to render future service, a reserve is established when communication has occurred to the affected employees. Other exit costs are accrued when incurred. |
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Retirement-Related Benefits | Retirement-Related Benefits We recognize the funded status – the difference between the fair value of plan assets and the plan’s benefit obligation – of our defined benefit pension and postretirement plans directly on the Consolidated Balance Sheet. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability. We adjust other comprehensive income/(loss) to reflect prior service cost or credits and actuarial gain or loss amounts arising during the period and reclassification adjustments for amounts being recognized as components of net periodic pension/postretirement cost, net of tax. Prior service cost or credits are amortized to net income/(loss) over the average remaining service period, a period of about eight years for the primary plan. Pension related actuarial gains or losses in excess of 10% of the greater of the fair value of plan assets or the plan's projected benefit obligation (the corridor) are recognized annually in the fourth quarter each year (Mark-to-market (MTM) adjustment), and, if applicable, in any interim period in which an interim remeasurement is triggered. We measure the plan assets and obligations annually at the adopted measurement date of January 31 to determine pension expense for the subsequent year. The factors and assumptions affecting the measurement are the characteristics of the population and salary increases, with the most important being the expected return on plan assets and the discount rate for the pension obligation. We use actuarial calculations for the assumptions, which require significant judgment. |
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Stock-Based Compensation | Stock-Based Compensation Stock options are valued primarily using the binomial lattice option pricing model and are granted with an exercise price equal to the closing price of our common stock on the grant date. Time-based and performance-based restricted stock awards are valued using the closing price of our common stock on the grant date. For awards that have market conditions, such as attaining a specified stock price or based on total shareholder return, we use a Monte Carlo simulation model to determine the value of the award. Our current plan does not permit awarding stock options below grant-date market value nor does it allow any repricing subsequent to the date of grant. Stock options are valued using the following assumptions:
Employee stock options and time-based and performance-based restricted stock awards typically vest over periods ranging from one to three years and employee stock options have a maximum term of 10 years. Estimates of forfeitures are incorporated at the grant date and are adjusted if actual results are different from initial estimates. For awards that have performance conditions, the probability of achieving the performance condition is evaluated each reporting period, and if the performance condition is expected to be achieved, the related compensation expense is recorded over the service period. In addition, certain performance-based restricted stock awards may be granted where the number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of the performance metrics in accordance with the terms established at the time of the award. In the event that performance conditions are not achieved and the awards do not vest, compensation expense is reversed. For market based awards, we record expense over the service period, regardless of whether or not the market condition is achieved. Awards with graded vesting that only have a time vesting requirement and awards that vest entirely at the end of the vesting requirement are expensed on a straight-line basis for the entire award. Expense for awards with graded vesting that incorporate a market or performance requirement is attributed separately based on the vesting for each tranche. |
Significant Accounting Policies (Tables) |
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Schedule of Merchandise Mix [Table Text Block] | Based on how we categorized our divisions in 2016, our merchandise mix of total net sales over the last three years was as follows:
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Schedule of Property and Equipment, Net |
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Earnings/(Loss) per Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings/(Loss) per Share | Net income/(loss) and shares used to compute basic and diluted EPS are reconciled below:
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Antidilutive common stock | The following average potential shares of common stock were excluded from the diluted EPS calculation because their effect would have been anti-dilutive:
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Other Assets (Tables) |
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Schedule of Other Assets |
(1) Amounts are net of an accumulated impairment loss of $9 million. |
Other Accounts Payable and Accrued Expenses (Tables) |
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Schedule of Other Accounts Payable and Accrued Liabilities |
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Other Liabilities (Tables) |
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Schedule of Other Liabilities |
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Derivative Financial Instruments (Tables) |
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Derivative Instruments, Gain (Loss) [Table Text Block] | Information regarding the pre-tax changes in the fair value of our interest rate swaps is as follows:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | Information regarding the gross amounts of our derivative instruments in the Consolidated Balance Sheets is as follows:
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Fair Value Disclosures (Tables) |
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Other Financial Instruments | Carrying values and fair values of financial instruments that are not carried at fair value in the Consolidated Balance Sheets are as follows:
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Long-Term Debt (Tables) |
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Schedule of Debt |
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Schedule of Maturities of Long-term Debt |
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Stockholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income/(Loss) |
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The components of total stock-based compensation costs are as follows:
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Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity during the year ended January 28, 2017:
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Schedule of Cash Proceeds Received from Share-based Payment Awards | Cash proceeds, tax benefits and intrinsic value related to total stock options exercised are provided in the following table:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Our weighted-average fair value of stock options at grant date was $4.89 in 2016, $3.48 in 2015 and $3.78 in 2014. We primarily used the binomial lattice valuation model in 2016 and 2015 and the Monte Carlo simulation model in 2014 to determine the fair value of the stock options granted using the following assumptions:
(1) Following the May 1, 2012 payment, we discontinued the quarterly $0.20 per share dividend. |
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Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes our non-vested stock awards activity during the year ended January 28, 2017:
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Rent Expense | Rent expense, net of sublease income, was as follows:
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Schedule of Future Minimum Rental Payments for Operating Leases | As of January 28, 2017, future minimum lease payments for non-cancelable operating leases, including lease renewals determined to be reasonably assured and capital leases, including our note payable, were as follows:
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Schedule of Future Minimum Lease Payments for Capital Leases |
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Retirement Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Types of Retirement and Other Benefits | Retirement and other benefits include:
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Schedule of Costs of Retirement Plans |
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Schedule of Changes in Projected Benefit Obligations |
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Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) |
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Schedule of Allocation of Plan Assets |
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Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets |
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Schedule of Expected Benefit Payments |
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Schedule of Target Allocation Ranges for Defined Benefit Plan Assets |
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Weighted-Average Actuarial Assumptions Used To Determine Expense [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assumptions Used |
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Weighted Average Actuarial Assumptions Used To Determine Liability [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assumptions Used |
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Restructuring and Management Transition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Current And Cumulative Restructuring And Management Transition Charges | The composition of restructuring and management transition charges was as follows:
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Restructuring and Management Transition Charges | Activity for the restructuring and management transition liability for 2016 and 2015 was as follows:
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Real Estate and Other, Net (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate and Other, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Operating Cost and Expense, by Component [Table Text Block] | The composition of real estate and other, net was as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The components of our income tax expense/(benefit) were as follows:
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Schedule of Effective Income Tax Rate Reconciliation | :
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Schedule of Deferred Tax Assets and Liabilities | Our deferred tax assets and liabilities were as follows:
Deferred tax assets and liabilities included in our Consolidated Balance Sheets were as follows:
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Summary of Income Tax Contingencies | A reconciliation of unrecognized tax benefits is as follows:
Unrecognized tax benefits included in our Consolidated Balance Sheets were as follows:
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Supplemental Cash Flow Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information |
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Quarterly Results of Operations (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 28, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Results of Operations (Unaudited) | The following is a summary of our quarterly unaudited consolidated results of operations for 2016 and 2015:
|
Basis of Presentation and Consolidation (Nature of Operations) (Details) |
12 Months Ended | ||
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Jan. 28, 2017
state
department_store
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Jan. 30, 2016 |
Jan. 31, 2015 |
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Entity Information [Line Items] | |||
Nature of Operations | Our Company was founded by James Cash Penney in 1902 and has grown to be a major national retailer, operating 1,013 department stores in 49 states and Puerto Rico, as well as through our Internet website at jcpenney.com. We sell family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, and home furnishings. In addition, our department stores provide services, such as styling salon, optical, portrait photography and custom decorating, to customers. | ||
Number of stores | department_store | 1,013 | ||
Number of states in which entity operates | state | 49 | ||
State of incorporation | Delaware | ||
Fiscal Period Duration | 364 days | 364 days | 364 days |
J. C. Penney Corporation, Inc. [Member] | |||
Entity Information [Line Items] | |||
Year incorporated | 1924 | ||
J. C. Penney Company, Inc. [Member] | |||
Entity Information [Line Items] | |||
Year incorporated | 2002 | ||
Founded by James Cash Penney [Member] | |||
Entity Information [Line Items] | |||
Year incorporated | 1902 |
Significant Accounting Policies Significant Accounting Policies (Merchandise and Revenue Recognition) (Details) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 100.00% | 100.00% | 100.00% |
Women's apparel [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 24.00% | 25.00% | 26.00% |
Men's apparel and accessories [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 22.00% | 22.00% | 22.00% |
Home [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 13.00% | 12.00% | 12.00% |
Women's accessories, including Sephora [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 13.00% | 12.00% | 11.00% |
Children's apparel [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 10.00% | 10.00% | 10.00% |
Footwear and handbags [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 8.00% | 8.00% | 8.00% |
Jewelry [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 6.00% | 6.00% | 6.00% |
Services and other [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 4.00% | 5.00% | 5.00% |
Significant Accounting Policies (Gift Card) (Details) |
12 Months Ended |
---|---|
Jan. 28, 2017 | |
Accounting Policies [Abstract] | |
Gift card liability, maximum term | 60 months |
Significant Accounting Policies (Advertising) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Accounting Policies [Abstract] | |||
Cooperative advertising vendor reimbursements | $ 26 | $ 32 | $ 1 |
Advertising costs | $ 769 | $ 792 | $ 886 |
Significant Accounting Policies (Property and Equipment, Net) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
|||
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation | $ (3,842) | $ (3,757) | ||
Property and equipment, net | 4,599 | 4,816 | ||
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | 249 | 272 | ||
Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | $ 4,859 | 4,877 | ||
Estimated useful lives | 50 years | |||
Furniture and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | $ 1,963 | 2,064 | ||
Furniture and equipment | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives | 3 years | |||
Furniture and equipment | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives | 20 years | |||
Leasehold improvements(1) | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | [1] | $ 1,254 | 1,244 | |
Capital Leases (Equipment) [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | $ 116 | $ 116 | ||
Capital Leases (Equipment) [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives | 3 years | |||
Capital Leases (Equipment) [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Estimated useful lives | 5 years | |||
|
Significant Accounting Policies Significant Accounting Policies (Stock-Based Compensation) (Details) |
12 Months Ended |
---|---|
Jan. 28, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Maximum Term | 10 years |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used | Valuation Method. We estimate the fair value of stock option awards on the date of grant using primarily the binomial lattice model. We believe that the binomial lattice model is a more accurate model for valuing employee stock options since it better reflects the impact of stock price changes on option exercise behavior. Expected Term. Our expected option term represents the average period that we expect stock options to be outstanding and is determined based on our historical experience, giving consideration to contractual terms, vesting schedules, anticipated stock prices and expected future behavior of option holders. Expected Volatility. Our expected volatility is based on a blend of the historical volatility of JCPenney stock combined with an estimate of the implied volatility derived from exchange traded options. Risk-Free Interest Rate. Our risk-free interest rate is based on zero-coupon U.S. Treasury yields in effect at the date of grant with the same period as the expected option life. Expected Dividend Yield. The dividend assumption is based on our current expectations about our dividend policy. |
Share-based Compensation Arrangement by Share-based Payment Award, Description | Stock options are valued primarily using the binomial lattice option pricing model and are granted with an exercise price equal to the closing price of our common stock on the grant date. Time-based and performance-based restricted stock awards are valued using the closing price of our common stock on the grant date. For awards that have market conditions, such as attaining a specified stock price or based on total shareholder return, we use a Monte Carlo simulation model to determine the value of the award. Our current plan does not permit awarding stock options below grant-date market value nor does it allow any repricing subsequent to the date of grant. |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years |
Change in Accounting for Retirement-Related Benefits (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
|||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,354 | $ 1,309 | $ 1,914 | $ 3,087 | ||
Pension | 19 | 162 | (48) | |||
Reinvested earnings/(accumulated deficit) | (3,006) | (3,007) | ||||
Income/(loss) before income taxes | 2 | (504) | (694) | |||
Income tax expense/(benefit) | 1 | 9 | 23 | |||
Net income/(loss) | $ 1 | $ (513) | $ (717) | |||
Basic earnings/(loss) per common share | $ 0.00 | $ (1.68) | $ (2.35) | |||
Diluted earnings/(loss) per common share | $ 0.00 | $ (1.68) | $ (2.35) | |||
Reclassifications for amortization of net actuarial (gain)/loss | [1] | $ 1 | $ 31 | $ 7 | ||
Deferred tax valuation allowance | 0 | (54) | (190) | |||
Other Comprehensive Income (Loss), Net of Tax | 18 | (141) | (491) | |||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 19 | (654) | (1,208) | |||
Accumulated other comprehensive income (loss) | (473) | (491) | ||||
Benefit plans | (39) | 127 | (78) | |||
Other comprehensive income tax benefits | (12) | 0 | 0 | |||
Deferred taxes | 9 | 0 | 3 | |||
Retained Earnings [Member] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (3,006) | (3,007) | (2,494) | (1,777) | ||
Net income/(loss) | (513) | (717) | ||||
Accumulated Other Comprehensive Income/(Loss) [Member] | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (473) | (491) | (350) | $ 141 | ||
Other Comprehensive Income (Loss), Net of Tax | $ 18 | $ (141) | $ (491) | |||
|
Effect of New Accounting Standards (Details) |
12 Months Ended |
---|---|
Jan. 28, 2017 | |
ASC Topic 842 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In February 2016, the FASB issued ASC Topic 842, Leases (Topic 842), a replacement of Leases (Topic 840), which will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. While many aspects of lessor accounting would remain the same, the new standard would make some changes, such as eliminating today’s real estate-specific guidance. As a globally converged standard, lessees and lessors would be required to classify most leases using a principle generally consistent with that of International Accounting Standards. The standard also would change what would be considered the initial direct costs of a lease. The standard would be effective for annual periods beginning after December 15, 2018 and interim periods within that year and must be adopted on a modified retrospective method, with elective reliefs, which requires application of the new guidance for all periods presented. We have developed a project team to analyze the impacts of the new standard on our current accounting policies and internal controls and the changes required to be made by our leasing software provider. With almost 70% of our store locations involved in an operating lease, the new standard will have a significant impact on our financial statements due to the recognition of lease liabilities and right-of-use assets that were not required by the current accounting requirements for operating leases. Given the magnitude of the project to implement the new standard, we are still evaluating the effect that the new accounting guidance will have on our financial condition, results of operations and cash flows. |
ASC Topic 606 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In May 2014, the FASB issued ASC Topic 606, Revenue from Contracts with Customers, a replacement of Revenue Recognition (Topic 605). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle of the guidance is that a Company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard is effective for us beginning in fiscal 2018 and can be adopted by the Company either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are analyzing the impact of the new standard on our current accounting policies and internal controls and the required software changes required to implement the new standard. Although we have not completed all of the required due diligence, we have identified the certain impacts to our revenue recognition policies related to gift card breakage and our customer loyalty programs. Whereas we currently recognize gift card breakage, net of required escheatment, 60 months after the gift card is issued, the new standard will require us to recognize gift card breakage, net of required escheatment, over the redemption pattern of gift cards. Additionally, whereas under current standards we utilize the incremental cost method to account for our customer loyalty programs, the new standard will require us to account for our customer loyalty program as revenue which will require us to defer a portion of our incremental sales to loyalty rewards to be earned by reward members. |
Accounting Standards Update 2015-17 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes, which requires all deferred tax assets and liabilities to be classified as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. The new standard will also no longer require allocating valuation allowances between current and noncurrent deferred tax assets because those allowances also will be classified as noncurrent. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods and the Company can adopt the guidance either prospectively or retrospectively. We do not expect the adoption of this standard to have a material impact on our financial condition, results of operations or cash flows. |
Accounting Standards Update 2015-11 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory, which simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. Under current guidance, net realizable value is one of several calculations an entity needs to make to measure inventory at the lower of cost or market. However, companies will continue to apply their existing impairment models to inventories that are accounted for using last-in first-out (LIFO) and the retail inventory method (RIM). The guidance, which can be early adopted, is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years and the guidance must be applied prospectively after the date of adoption. We do not expect the adoption of this standard to have a material impact on our financial condition, results of operations or cash flows. |
Accounting standards update 2016-09 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 will change how companies account for certain aspects of share-based payments to employees. Entities will be required to recognize the income tax effects of awards (windfalls or shortfalls) in the income statement when the awards vest or are settled (i.e., additional paid-in capital or APIC pools will be eliminated). The guidance on employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation and for forfeitures is changing. The ASU also provides a practical expedient for public companies that will allow the use of a simplified method to estimate the expected term for certain awards. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted. As a result of ASU 2016-09 requiring all windfalls and shortfalls to be recognized when they arise, excess tax benefits that were not previously recognized because the related tax deduction had not reduced current taxes payable are to be recorded on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of the beginning of the period in which the new guidance is adopted. Additionally, the deferred tax assets recognized as a result of this transition guidance will need to be assessed for realizability and any valuation allowance should be recognized as part of the cumulative effect adjustment to retained earnings also as a result of this transition guidance. Considering these aspects of transitioning to the new guidance, there will be no impact to retained earnings as a result of a valuation allowance being recorded against the related deferred tax asset recorded as the cumulative adjustment. |
Accounting Standards Update 2015-05 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-05). Under the ASU, the novation of a derivative contract (i.e., a change in the counterparty) in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. The hedge accounting relationship could continue uninterrupted if all of the other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The guidance is effective for fiscal years beginning after December 15, 2016, and interim periods therein. Early adoption is permitted. Entities may apply the guidance prospectively or on a modified retrospective basis. We are currently evaluating the effect that adopting this new accounting guidance will have on our financial condition, results of operations or cash flows. |
Accounting Standards Update 2015-04 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) (ASU 2016-15). ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods therein. Early adoption is permitted. Entities should apply the guidance retrospectively, but if it is impracticable to do so for an issue, the amendments related to that issue may be applied prospectively. We are currently evaluating the effect that adopting this new accounting guidance will have on our Consolidated Statements of Cash Flows. |
Earnings/(Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
[1] | Oct. 29, 2016 |
[1] | Jul. 30, 2016 |
[1] | Apr. 30, 2016 |
[1] | Jan. 30, 2016 |
[1] | Oct. 31, 2015 |
[1] | Aug. 01, 2015 |
[1] | May 02, 2015 |
[1] | Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||
Earnings Per Share [Abstract] | |||||||||||||||||||||
Net income/(loss) | $ 1 | $ (513) | $ (717) | ||||||||||||||||||
Weighted average common shares outstanding (basic shares) | 308.1 | 305.9 | 305.2 | ||||||||||||||||||
Stock options and restricted stock awards | 4.9 | 0.0 | 0.0 | ||||||||||||||||||
Weighted average shares assuming dilution (diluted shares) | 313.0 | 305.9 | 305.2 | ||||||||||||||||||
Basic | $ 0.00 | $ (1.68) | $ (2.35) | ||||||||||||||||||
Diluted | $ 0.61 | $ (0.22) | $ (0.18) | $ (0.22) | $ (0.43) | $ (0.38) | $ (0.38) | $ (0.49) | $ 0.00 | $ (1.68) | $ (2.35) | ||||||||||
Stock options, restricted stock awards and a warrant | 17.8 | 34.1 | 26.8 | ||||||||||||||||||
|
Other Assets (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
||
---|---|---|---|---|
Other Assets, Noncurrent Disclosure [Abstract] | ||||
Capitalized software, net | $ 265 | $ 232 | ||
Indefinite-lived intangible assets, net (1) | [1] | 275 | 268 | |
Realty investments (Note 17) | 13 | 31 | ||
Revolving credit facility unamortized costs, net | 30 | 42 | ||
Other | 35 | 35 | ||
Total | $ 618 | $ 608 | ||
|
Other Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued salaries, vacation and bonus | $ 204 | $ 326 |
Customer gift cards | 215 | 222 |
Taxes other than income taxes | 127 | 110 |
Occupancy and rent-related | 35 | 40 |
Interest | 78 | 88 |
Advertising | 82 | 76 |
Current portion of workers’ compensation and general liability self-insurance | 47 | 55 |
Restructuring and management transition (Note 16) | 29 | 46 |
Current portion of retirement plan liabilities (Note 15) | 26 | 46 |
Capital expenditures | 33 | 13 |
Unrecognized tax benefits (Note 18) | 3 | 3 |
Other | 285 | 335 |
Total | $ 1,164 | $ 1,360 |
Other Liabilities (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Other Liabilities, Noncurrent [Abstract] | ||
Supplemental pension and other postretirement benefit plan liabilities (Note 15) | $ 126 | $ 138 |
Long-term portion of workers’ compensation and general liability insurance | 131 | 153 |
Deferred developer/tenant allowances | 143 | 113 |
Deferred rent liability | 97 | 91 |
Primary pension plan (Note 15) | 18 | 40 |
Interest rate swaps (Notes 8 and 9) | 10 | 28 |
Unrecognized tax benefits (Note 18) | 1 | 4 |
Restructuring and management transition (Note 16) | 2 | 5 |
Other | 55 | 46 |
Total | $ 583 | $ 618 |
Derivative Financial Instruments (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
May 07, 2015 |
||||
Derivatives, Fair Value [Line Items] | |||||||
Gain/(loss) recognized in other comprehensive income/(loss) | [1] | $ 3 | $ (23) | $ 0 | |||
Derivative, Notional Amount | $ 0 | ||||||
Interest rate swaps | $ 10 | 28 | |||||
Derivative, Average Fixed Interest Rate | 2.04% | ||||||
Effectiveness of interest rate swaps | 100.00% | ||||||
Other Accounts Payable and Accrued Expenses [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Interest rate swaps | $ 2 | 2 | |||||
Accumulated Other Comprehensive Income/(Loss) [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gain/(loss) recognized in other comprehensive income/(loss) | [1] | 5 | (38) | ||||
Other Liabilities [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Interest rate swaps | 10 | 28 | |||||
Total [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Interest rate swaps | 12 | 30 | |||||
Interest Expense [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | (13) | $ (10) | |||||
Fair Value, Inputs, Level 2 [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Liability | $ 12 | ||||||
|
Fair Value Disclosures (Other Financial Instruments) (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017
USD ($)
department_store
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
department_store
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total debt, excluding unamortized debt issuance costs, capital leases and note payable | $ 4,665 | $ 4,830 | |
Store assets, Carrying Value | 4,599 | 4,816 | |
Total, Carrying Value | 9,314 | 9,442 | |
Total Gains (Losses) | $ 0 | (20) | $ (30) |
Number of underperforming department stores | department_store | 1,013 | ||
Long-term debt, including current maturities, Fair Value | $ 4,495 | $ 4,248 | |
Store assets that continued to operate [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Store assets, Carrying Value | $ 32 | ||
Number of underperforming department stores | department_store | 19 | ||
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Liability | $ 12 | ||
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member] | Store assets that continued to operate [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Store assets, Significant Unobservable Inputs | $ 2 |
Credit Facility (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Line of Credit Facility [Line Items] | ||
2014 Credit Facility | $ 2,350 | |
Revolving Facility, maximum borrowing capacity | $ 2,350 | $ 1,850 |
Extinguishment of Debt, Amount | $ 494 | |
2014 Credit Facility, Expiration Date | Jun. 20, 2019 | |
Current Borrowing Capacity Before Standby And Import Letters Of Credit | $ 2,061 | |
2014 Credit Facility, description | The 2014 Credit Facility is secured by a perfected first-priority security interest in substantially all of our eligible credit card receivables, accounts receivable and inventory. The Revolving Facility is available for general corporate purposes, including the issuance of letters of credit. Pricing under the Revolving Facility is tiered based on our utilization under the line of credit. JCP’s obligations under the 2014 Credit Facility are guaranteed by J. C. Penney Company, Inc. | |
Revolving Facility, borrowing capacity, description | The borrowing base under the Revolving Facility is limited to a maximum of 85% of eligible accounts receivable, plus 90% of eligible credit card receivables, plus 90% of the liquidation value of our inventory, net of certain reserves. Letters of credit reduce the amount available to borrow by their face value. In addition, the maximum availability is limited by a minimum excess availability threshold which is the lesser of 10% of the borrowing base or $200 million, subject to a minimum threshold requirement of $150 million. | |
Revolving Facility, total standby and import letters of credit | $ 157 | |
Revolving Facility, commitment fee percentage on unused capacity | 0.375% | |
Revolving Facility, remaining borrowing capacity | $ 1,904 | |
Domestic Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving Facility, interest rate at period end | 2.50% | |
Foreign Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving Facility, interest rate at period end | 1.25% |
Long-Term Debt (Debt Issues) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 30, 2016 |
Jan. 28, 2017 |
Apr. 30, 2016 |
Jan. 30, 2016 |
||||
Debt Instrument [Line Items] | |||||||
Total debt, excluding unamortized debt issuance costs, capital leases and note payable | $ 4,665 | $ 4,830 | |||||
Total debt, excluding unamortized debt issuance costs, capital leases, financing obligation and note payable | 4,602 | 4,769 | |||||
Unamortized Debt Issuance Expense | (63) | (61) | |||||
Less: current maturities | 263 | 101 | |||||
Total long-term debt, excluding capital leases, financing obligation and note payable | $ 4,339 | $ 4,668 | |||||
Weighted-average interest rate at year end | 6.30% | 6.50% | |||||
Weighted-average maturity (in years) | 15 years | ||||||
Debt Instrument, Repurchased Face Amount | $ 60 | ||||||
5.65% Senior Notes Due 2020 (1) | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 5.65% | 5.65% | |||||
Unsecured Long-term Debt, Noncurrent | [1] | $ 400 | $ 400 | ||||
5.75% Senior Notes Due 2018 (1) | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 5.75% | 5.75% | |||||
Unsecured Long-term Debt, Noncurrent | [1] | $ 265 | $ 300 | ||||
Senior Secured Notes Five Point Eight Seven Five Percent Due2023 [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 5.875% | ||||||
Secured Debt | [1] | $ 500 | |||||
6.375% Senior Notes Due 2036 (1) | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 6.375% | 6.375% | |||||
Unsecured Long-term Debt, Noncurrent | [1] | $ 388 | $ 400 | ||||
6.9% Notes Due 2026 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 6.90% | 6.90% | |||||
Unsecured Long-term Debt, Noncurrent | $ 2 | $ 2 | |||||
7.125% Debentures Due 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 7.125% | 7.125% | |||||
Unsecured Long-term Debt, Noncurrent | $ 10 | $ 10 | |||||
7.4% Debentures Due 2037 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 7.40% | 7.40% | |||||
Unsecured Long-term Debt, Noncurrent | $ 313 | $ 326 | |||||
7.625% Notes Due 2097 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 7.625% | 7.625% | |||||
Unsecured Long-term Debt, Noncurrent | $ 500 | $ 500 | |||||
7.65% Debentures Due 2016 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 7.65% | 7.65% | |||||
Unsecured Long-term Debt, Noncurrent | $ 0 | $ 78 | |||||
7.95% Debentures Due 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 7.95% | 7.95% | |||||
Unsecured Long-term Debt, Noncurrent | $ 220 | $ 220 | |||||
2013 Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Secured Debt | 2,194 | ||||||
Debt Instrument, Repurchased Face Amount | $ 2,250 | ||||||
Total debt, excluding unamortized debt issuance costs, capital leases, financing obligation and note payable | |||||||
Debt Instrument [Line Items] | |||||||
Total debt, excluding unamortized debt issuance costs, capital leases and note payable | $ 4,665 | $ 4,830 | |||||
Senior notes | |||||||
Debt Instrument [Line Items] | |||||||
Debt repurchase provision, percentage of outstanding principal | 101.00% | ||||||
Debt repurchase provision, required beneficial ownership change | 50.00% | ||||||
8.125% Senior Notes Due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, stated interest rate (percent) | 8.125% | 8.125% | |||||
Unsecured Long-term Debt, Noncurrent | $ 400 | $ 400 | |||||
2016 Term Loan Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Secured Debt | $ 1,667 | ||||||
2016 Term Loan Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
2013 Term Loan Facility, term | 7 years | ||||||
|
Long-Term Debt (Financial Covenants) (Details) |
12 Months Ended |
---|---|
Jan. 28, 2017 | |
Debt Instrument [Line Items] | |
Long-Term Debt Financial Covenant | These debt issuances contain a change of control provision that would obligate us, at the holders’ option, to repurchase the debt at a price of 101%. These provisions trigger if there were a beneficial ownership change of 50% or more of our common stock. |
Long-Term Debt (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Debt Instrument [Line Items] | ||||||
Debt Instrument, Repurchased Face Amount | $ 60,000,000 | |||||
Proceeds from issuance of long-term debt | $ 2,188,000,000 | $ 0 | $ 893,000,000 | |||
Loss on extinguishment of debt | $ 34,000,000 | $ (4,000,000) | 30,000,000 | 10,000,000 | $ 34,000,000 | |
Extinguishment of Debt, Amount | 494,000,000 | |||||
8.125% Senior Notes Due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Unsecured Long-term Debt, Noncurrent | $ 400,000,000 | $ 400,000,000 | $ 400,000,000 | |||
Debt instrument, stated interest rate (percent) | 8.125% | 8.125% | 8.125% | |||
Senior Secured Notes Five Point Eight Seven Five Percent Due2023 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate (percent) | 5.875% | 5.875% | ||||
Secured Long-term Debt, Noncurrent | 500,000,000 | |||||
2016 Term Loan Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
2013 Term Loan Facility, basis spread on variable interest rate | 4.25% | |||||
2016 Term Loan Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
2013 Term Loan Facility, face amount | $ 2,000,000,000 | |||||
2013 Term Loan Facility, term | 7 years | |||||
2013 Term Loan Facility, required quarterly principal payment | $ 10,550,000.00 |
Long-Term Debt (Annual Principal Payments) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|
Debt Disclosure [Abstract] | ||
2017 | $ 263 | |
2018 | 307 | |
2019 | 442 | |
2020 | 442 | |
2021 | 42 | |
Thereafter | 3,169 | |
Total | $ 4,665 | $ 4,830 |
Stockholders' Equity (Accumulated Other Comprehensive Income/ (Loss) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of the beginning of the period - as adjusted | $ 1,309 | $ 1,914 | $ 3,087 |
Current period change, accumulated other comprehensive income/(loss) | 18 | (141) | (491) |
Balance as of the end of the period | 1,354 | 1,309 | 1,914 |
Net Actuarial Gain/(Loss) [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Net Actuarial Gain/(Loss) Prior Service Credit/(Cost),Net of Tax | (421) | (423) | (308) |
Current period change, pension and postretirement benefits | 2 | (115) | |
Prior Service Credit/(Cost) [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated Other Comprehensive Income (Loss), Net Actuarial Gain/(Loss) Prior Service Credit/(Cost),Net of Tax | (33) | (38) | (40) |
Current period change, pension and postretirement benefits | 5 | 2 | |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 0 | 0 | |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | (2) | (2) | (2) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 11 | (28) | |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | (17) | (28) | |
Accumulated Other Comprehensive Income/(Loss) [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of the beginning of the period - as adjusted | (491) | (350) | 141 |
Current period change, accumulated other comprehensive income/(loss) | 18 | (141) | (491) |
Balance as of the end of the period | $ (473) | $ (491) | $ (350) |
Stockholders' Equity Stockholders' Equity (Reclassifications Out of Accumulated Other Comprehensive Income/ (Loss) (Details) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassification for amortization of prior service (credit)/cost (6) | [1] | $ 0 | $ 2 | $ (1) | |
Reclassification of net actuarial (gain)/loss recognized in net periodic benefit expense/(income) from a settlement, gross amount | 180 | ||||
Other comprehensive income/(loss) | 18 | (141) | (491) | ||
Primary and Supplemental Pension Plans Total | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of actuarial (gain)/loss | 11 | 53 | 12 | ||
Amortization of prior service cost/(credit) | 8 | 8 | 7 | ||
Selling, General and Administrative Expenses [Member] | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassification for amortization of net actuarial (gain)/loss included in net periodic benefit expense/(income), gross amount | 9 | 0 | 0 | ||
Amortization of prior service (credit)/cost | $ (8) | $ (7) | $ (8) | ||
|
Stockholders' Equity (Common Stock) (Details) - $ / shares shares in Millions |
Jan. 28, 2017 |
Jan. 27, 2014 |
---|---|---|
Schedule of Capitalization, Equity [Line Items] | ||
Common stock Issued, par value per share | $ 0.50 | $ 0.50 |
Shares held in 401(k) plan, including ESOP | 14 | |
Percent of shares held in 401(k) plan, including ESOP | 4.50% |
Stockholders' Equity (Preferred Stock) (Details) |
Jan. 28, 2017
shares
|
---|---|
Stockholders' Equity Note [Abstract] | |
Preferred Stock, Shares Authorized | 25,000,000 |
Stockholders' Equity (Stock Warrant) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | |
---|---|---|
Jun. 13, 2011 |
Jan. 28, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Title of security warrants outstanding | On June 13, 2011, prior to his employment, we entered into a warrant purchase agreement with Ronald B. Johnson pursuant to which Mr. Johnson made a personal investment in the Company by purchasing a warrant to acquire approximately 7.3 million shares of J. C. Penney Company, Inc. common stock for a purchase price of approximately $50 million at a mutually determined fair value of $6.89 per share. | |
Reason for issuing warrants to nonemployees | personal investment in the Company | |
Warrant purchase agreement, Monte Carlo Simulation, methodology and assumptions | Valuation Method. The fair value of the stock warrant was determined on the date of the warrant purchase agreement using a Monte Carlo simulation method that reflected the impact of the key features of the warrant using different simulations and probability weighting. Expected Term. The expected term was determined based on the maturity determined period that both parties expect the warrant to be outstanding. Expected Volatility. The expected volatility was based on implied volatility. Risk-free Interest Rate. The risk-free interest rate was based on zero-coupon U.S. Treasury yields in effect at the date of the agreement with the same maturity as the expected warrant term. Expected Dividend Yield. The dividend assumption was based on expectations about the Company’s dividend policy. | |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of warrants sold | 7.3 | |
Proceeds from sale of stock warrants | $ 50 | |
Sale price of warrants (in dollars per share) | $ 6.89 | |
Warrants, exercise price | $ 29.92 | |
Date warrants are exercisable | Jun. 13, 2017 |
Stockholders' Equity (Stockholders Agreements) (Details) |
12 Months Ended | |
---|---|---|
Jan. 27, 2014
right / shares
right
$ / shares
|
Jan. 28, 2017
$ / shares
|
|
Stockholders' Equity (Stockholders Agreements) [Line Items] | ||
Common stock, par value per share | $ 0.50 | $ 0.50 |
Stockholders agreements | As authorized by our Company’s Board of Directors (the Board), on January 27, 2014, the Company entered into an Amended and Restated Rights Agreement (Amended Rights Agreement) with Computershare Inc., as Rights Agent (Rights Agent), amending, restating and replacing the Rights Agreement, dated as of August 22, 2013 (Original Rights Agreement), between the Company and the Rights Agent. Pursuant to the terms of the Original Rights Agreement, one preferred stock purchase right (a Right) was attached to each outstanding share of Common Stock of $0.50 par value of the Company (Common Stock) held by holders of record as of the close of business on September 3, 2013. The Company has issued one Right in respect of each new share of Common Stock issued since the record date. The Rights, registered on August 23, 2013, trade with and are inseparable from our Common Stock and will not be evidenced by separate certificates unless they become exercisable. The purpose of the Amended Rights Agreement is to diminish the risk that the Company's ability to use its net operating losses and other tax assets to reduce potential future federal income tax obligations would become subject to limitations by reason of the Company's experiencing an "ownership change" as defined under Section 382 of the Internal Revenue Code. Ownership changes under Section 382 generally relate to the cumulative change in ownership among stockholders with an ownership interest of 5% or more (as determined under Section 382's rules) over a rolling three year period. The Amended Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 by deterring any person or group from acquiring beneficial ownership of 4.9% or more of the outstanding Common Stock. The amendments to the Original Rights Agreement also extended the expiration date of the Rights from August 20, 2014 to January 26, 2017 and amended certain other provisions, including the definition of "beneficial ownership" to include terms appropriate for the purpose of preserving tax benefits. We are submitting the Amended Rights Agreement for stockholder approval at our 2014 annual meeting and the Rights will immediately expire if stockholder approval is not received. Each Right entitles its holder to purchase from the Company 1/1000th of a share of a newly authorized series of participating preferred stock at an exercise price of $55.00, subject to adjustment in accordance with the terms of the Amended Rights Agreement, once the Rights become exercisable. In general terms, under the Amended Rights Agreement, the Rights become exercisable if any person or group acquires 4.9% or more of the Common Stock or, in the case of any person or group that owned 4.9% or more of the Common Stock as of January 27, 2014, upon the acquisition of any additional shares by such person or group. In addition, the Company, its subsidiaries, employee benefit plans of the Company or any of its subsidiaries, and any entity holding Common Stock for or pursuant to the terms of any such plan, are excepted. Upon exercise of the Right in accordance with the Amended Rights Agreement, the holder would be able to purchase a number of shares of Common Stock from the Company having an aggregate market value (as defined in the Amended Rights Agreement) equal to twice the then-current exercise price for an amount in cash equal to the then-current exercise price. The Rights will not prevent an ownership change from occurring under Section 382 of the Code or a takeover of the Company, but may cause substantial dilution to a person that acquires 4.9% or more of our Common Stock. | |
Preferred Stock [Member] | ||
Stockholders' Equity (Stockholders Agreements) [Line Items] | ||
Number of preferred stock purchase rights | right | 1 | |
Conversion ratio of right to share of preferred stock | right / shares | 0.001 | |
Warrants, exercise price | $ 55.00 | |
Common Stock [Member] | ||
Stockholders' Equity (Stockholders Agreements) [Line Items] | ||
Stock purchase right, exercisable upon individual stock ownership percentage | 4.90% | |
Stock purchase right, dilution affecting stockholder ownership (percent) | 4.90% |
Stock-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
May 20, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Share-based Liabilities Paid | $ 22 | |||
Stock options and restricted stock, percent of total outstanding stock | 2.70% | |||
Stock options, weighted average grant date fair value | $ 4.89 | $ 3.48 | $ 3.78 | |
Long-Term Incentive Plan, 2016 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long-term incentive plan, shares available for future grant | 18,400,000 | |||
Stock Awards [Member] | Long-Term Incentive Plan, 2016 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long-term incentive plan, shares reserved for future grants | 12,250,000.00 | |||
Stock Option Award [Member] | Long-Term Incentive Plan, 2016 [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Long-term incentive plan, shares reserved for future grants | 19,600,000.0 | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 12 | |||
Weighted average period over which unrecognized compensation is expected to be recognized (years) | 2 years |
Stock-Based Compensation (Stock-Based Compensation Costs) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation(1) | [1] | $ 35 | $ 44 | $ 33 | |
Total income tax benefit recognized for stock-based compensation arrangements | 0 | 0 | 0 | ||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation(1) | 27 | 32 | 20 | ||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation(1) | 8 | 12 | 13 | ||
Management Transition and Home Office and Stores Stock-Based Compensation [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Excluded stock-based compensation recorded in restructuring and management transition | $ 0 | $ 9 | $ 3 | ||
|
Stock-Based Compensation (Stock Options Activity) (Details) $ / shares in Units, shares in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Jan. 28, 2017
USD ($)
$ / shares
shares
| ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding stock options, beginning balance | shares | 16,096 | |||
Stock Options, Granted | shares | 2,072 | |||
Stock Options, Exercised | shares | (223) | |||
Stock Options, Forfeited/canceled | shares | (3,527) | |||
Outstanding stock options, ending balance | shares | 14,418 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted-Average Exercise Price Per Share, beginning balance | $ / shares | $ 24 | |||
Weighted-Average Exercise Price Per Share, Granted | $ / shares | 11 | |||
Weighted-Average Exercise Price Per Share, Exercised | $ / shares | 8 | |||
Weighted-Average Exercise Price Per Share, Forfeited/canceled | $ / shares | 43 | |||
Weighted-Average Exercise Price Per Share, ending balance | $ / shares | $ 18 | |||
Weighted-Average Remaining Contractual Term, Outstanding | 5 years 7 months | |||
Aggregate Intrinsic Value, Outstanding | $ | $ 0 | [1] | ||
Stock Options, Exercisable | shares | 8,169 | |||
Weighted-Average Exercise Price Per Share, Exercisable | $ / shares | $ 25 | |||
Weighted-Average Remaining Contractual Term, Exercisable | 3 years 7 months | |||
Aggregate Intrinsic Value, Exercisable | $ | $ 0 | |||
|
Stock-Based Compensation (Stock Options Exercised) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Share-based Compensation [Abstract] | |||
Proceeds from stock options exercised | $ 2 | $ 0 | $ 0 |
Intrinsic value of stock options exercised | 0 | 0 | 0 |
Tax benefit related to stock-based compensation | 0 | 0 | 0 |
Excess tax benefits from stock-based compensation | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation (Stock Option Valuation) (Details) - USD ($) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
May 01, 2012 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 3 years 7 months | |||||
Dividends | $ 0.20 | |||||
Weighted-average expected option term | 4 years 8 months | 4 years 7 months | 4 years 1 month | |||
Weighted-average expected volatility | 54.22% | 51.46% | 60.00% | |||
Weighted-average risk-free interest rate | 1.38% | 1.50% | 1.60% | |||
Weighted-average expected dividend yield (1) | [1] | 0.00% | 0.00% | 0.00% | ||
Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average expected dividend yield (1) | 0.00% | 0.00% | 0.00% | |||
Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Weighted-average expected dividend yield (1) | 0.00% | 0.00% | 0.00% | |||
|
Stock-Based Compensation (Non-Vested Stock Awards Activity) (Details) shares in Thousands |
12 Months Ended |
---|---|
Jan. 28, 2017
$ / shares
shares
| |
Time-Based Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested Stock Awards, beginning balance | shares | 7,698 |
Granted, Stock Awards | shares | 1,501 |
Vested, Stock Awards | shares | (2,793) |
Forfeited/canceled, Stock Awards | shares | (588) |
Non-vested Stock Awards, ending balance | shares | 5,818 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Non-vested Weighted-Average Grant Date Fair Value, beginning of year | $ / shares | $ 9 |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 10 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 9 |
Forfeited/canceled, Weighted-Average Grant Date Fair Value | $ / shares | 9 |
Non-vested Weighted-Average Grant Date Fair Value, end of year | $ / shares | $ 9 |
Performance-Based Stock Awards [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested Stock Awards, beginning balance | shares | 2,557 |
Granted, Stock Awards | shares | 1,071 |
Vested, Stock Awards | shares | (418) |
Forfeited/canceled, Stock Awards | shares | (82) |
Non-vested Stock Awards, ending balance | shares | 3,128 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Non-vested Weighted-Average Grant Date Fair Value, beginning of year | $ / shares | $ 7 |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 11 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 7 |
Forfeited/canceled, Weighted-Average Grant Date Fair Value | $ / shares | 8 |
Non-vested Weighted-Average Grant Date Fair Value, end of year | $ / shares | $ 8 |
Stock-Based Compensation (Stock Awards) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Mar. 03, 2016 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock awards vested in period, aggregate market value | $ 30 | $ 16 | $ 4 | |
Stock awards, aggregate grant date fair value | 28 | $ 27 | $ 9 | |
Deferred Compensation Liability, Current and Noncurrent | $ 10 | |||
Phantom Share Units (PSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1.8 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Maximum Award Settlement, Per Share | $ 21.68 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Outstanding, Grant Date Fair Value | $ 6.45 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 38 | |||
Weighted average period over which unrecognized compensation is expected to be recognized (years) | 2 years |
Leases (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Operating Leased Assets [Line Items] | |||
Financing Transaction, Gross Proceeds | $ 273 | ||
Net proceeds from financing obligation | $ 216 | $ 0 | $ 0 |
Operating leases, description | Almost all leases will expire during the next 20 years; however, most leases will be renewed, primarily through an option exercise, or replaced by leases on other premises. | ||
Financing Transaction, Payment of Closing Costs | $ 7 | ||
Financing Transaction, Seller Financing | $ 50 | ||
Minimum [Member] | |||
Operating Leased Assets [Line Items] | |||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 3 years | ||
Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 20 years | ||
Maximum [Member] | Data processing equipment and other personal property [Member] | |||
Operating Leased Assets [Line Items] | |||
Lessee Leasing Arrangements, Operating Leases, Term of Contract | 5 years |
Leases (Rent Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||
Operating Leases, Rent Expense [Line Items] | |||||
Total rent expense | $ 252 | $ 267 | $ 294 | ||
Less: sublease income(1) | [1] | (11) | (11) | (13) | |
Net rent expense | 241 | 256 | 281 | ||
Real property base rent and straight-lined step rent expense [Member] | |||||
Operating Leases, Rent Expense [Line Items] | |||||
Real/personal property, rent expense | 214 | 221 | 233 | ||
Real property contingent rent expense (based on sales) [Member] | |||||
Operating Leases, Rent Expense [Line Items] | |||||
Real property contingent rent expense (based on sales) | 7 | 7 | 8 | ||
Personal property rent expense [Member] | |||||
Operating Leases, Rent Expense [Line Items] | |||||
Real/personal property, rent expense | $ 31 | $ 39 | $ 53 | ||
|
Leases (Future Minimum Lease Payments) (Details) $ in Millions |
Jan. 28, 2017
USD ($)
|
---|---|
Leases [Abstract] | |
2017, Operating | $ 220 |
2018 Operating | 193 |
2019, Operating | 173 |
2020, Operating | 158 |
2021, Operating | 143 |
Thereafter, Operating | 1,822 |
Less: sublease payments, Operating | (16) |
Total minimum lease payments, Operating | 2,693 |
2017, Capital | 30 |
2018, Capital | 21 |
2019, Capital | 21 |
2020, Capital | 18 |
2021, Capital | 19 |
Thereafter, Capital | 205 |
Total minimum lease payments, Capital | 314 |
Amount Representing Residual Asset Balance | 77 |
Less: amounts representing interest | (157) |
Present value of net minimum lease obligations, financing obligation and note payable | $ 234 |
Retirement Benefit Plans (Net Periodic Expense) (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Dec. 07, 2015
USD ($)
employee
|
Aug. 03, 2015
employee
|
Jan. 30, 2016
USD ($)
|
Jan. 30, 2016
USD ($)
|
Oct. 31, 2015
employee
|
Jan. 28, 2017
USD ($)
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Discount rate | 4.73% | 4.73% | 4.40% | 4.73% | 3.87% | |||
Defined benefit plan, description of plan amendment | In August 2015, as a result of a plan amendment, we offered approximately 31,000 retirees and beneficiaries in the Primary Pension Plan who commenced their benefit between January 1, 2000 and August 31, 2012 the option to receive a lump-sum settlement payment. In addition, we offered approximately 8,000 participants in the Primary Pension Plan who separated from service and had a deferred vested benefit as of August 31, 2012 the option to receive a lump-sum settlement payment. Approximately 12,000 retirees and beneficiaries elected to receive voluntary lump-sum payments to settle the Primary Pension Plan's obligation to them. In addition, approximately 1,900 former employees having deferred vested benefits elected to receive lump-sums. The lump-sum settlement payments totaling approximately $700 million were made by the Company on November 5, 2015 using assets from the Primary Pension Plan. On December 7, 2015, the Company completed the purchase of a group annuity contract that transferred to The Prudential Insurance Company of America the pension benefit obligation of approximately 18,000 retirees totaling approximately $800 million. Actuarial loss of $180 million was recognized as settlement expense as a result of the lump-sum offer payment and the purchase of the group annuity contract. | |||||||
Funded status of plan percentage, description | As of the end of 2016, the funded status of the Primary Pension Plan was 99%. The Primary Benefit Obligation (PBO) is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases. Under the Employee Retirement Income Security Act of 1974 (ERISA), the funded status of the plan exceeded 100% as of December 31, 2016 and 2015, the qualified pension plan’s year end. | |||||||
Number of employees offered lump sum settlement | employee | 31,000 | |||||||
Participants Who Separated From Service | employee | 8,000 | |||||||
Number of employees accepted lump sum settlement | employee | 12,000 | |||||||
Participants Who Separated From Service and Accepted | employee | 1,900 | |||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||
Net periodic benefit expense/(income) | $ 19 | $ 162 | $ (48) | |||||
Pension Plan [Member] | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Transfer of supplemental pension plan benefits | 0 | 1,555 | ||||||
Defined Benefit Plan, Settlements, Plan Assets | 0 | (1,555) | ||||||
Balance at measurement date | $ 3,327 | $ 3,327 | 3,473 | 3,327 | 5,254 | |||
Payments for lump sum settlement | 717 | |||||||
Number of retirees for which pension obligation transferred | employee | 18,000 | |||||||
DefinedBenefitPlansandOtherPostretirementBenefitPlansTransferredPensionBenefitObligation | $ 838 | |||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||
Service cost | 55 | 69 | 61 | |||||
Interest cost | 153 | 196 | 211 | |||||
Expected return on plan assets | (215) | (357) | (348) | |||||
Actuarial loss/(gain) | 0 | 52 | 0 | |||||
Amortization of prior service cost/(credit) | 8 | 8 | 7 | |||||
Settlement expense | (180) | 0 | 180 | 0 | ||||
Other | 0 | 6 | ||||||
Loss/(gain) on transfer of benefits | 0 | 0 | 51 | |||||
Net periodic benefit expense/(income) | 1 | 154 | (18) | |||||
Supplemental Employee Retirement Plan [Member] | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Transfer of supplemental pension plan benefits | 0 | 0 | 56 | |||||
Defined Benefit Plan, Settlements, Plan Assets | $ 0 | 0 | ||||||
Employee retirement age | 60 years | |||||||
Termination of company-paid term life insurance, employee age | 70 years | |||||||
Termination of employee-paid term life insurance, employee age | 65 years | |||||||
Balance at measurement date | $ 176 | $ 176 | $ 152 | 176 | 191 | |||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||
Service cost | 0 | 0 | 0 | |||||
Interest cost | 7 | 7 | 9 | |||||
Actuarial loss/(gain) | 11 | 1 | 12 | |||||
Amortization of prior service cost/(credit) | 0 | 0 | 0 | |||||
Loss/(gain) on transfer of benefits | 0 | 0 | (51) | |||||
Net periodic benefit expense/(income) | $ 18 | 8 | (30) | |||||
Supplemental Employee Retirement Plan [Member] | Minimum [Member] | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Employee retirement age for equal social security benefits | 60 years | |||||||
Supplemental Employee Retirement Plan [Member] | Maximum [Member] | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Employee retirement age for equal social security benefits | 62 years | |||||||
Primary and Supplemental Pension Plans Total | ||||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||
Service cost | $ 55 | 69 | 61 | |||||
Interest cost | 160 | 203 | 220 | |||||
Expected return on plan assets | (215) | (357) | (348) | |||||
Actuarial loss/(gain) | 11 | 53 | 12 | |||||
Amortization of prior service cost/(credit) | 8 | 8 | 7 | |||||
Settlement expense | 0 | 180 | 0 | |||||
Other | 0 | 6 | 0 | |||||
Loss/(gain) on transfer of benefits | 0 | 0 | 0 | |||||
Net periodic benefit expense/(income) | $ 19 | 162 | (48) | |||||
Social Security Benefits [Member] | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Employee retirement age | 62 years | |||||||
Primary Pension Plan and Benefit Restoration Plan [Member] | ||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||
Employee retirement age | 65 years | |||||||
Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||
Net periodic benefit expense/(income) | $ (17) | $ (7) | $ (8) |
Retirement Benefit Plans (Expense Actuarial Assumptions) (Details) |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expected return on plan assets | 6.80% | 6.80% | 7.00% |
Discount rate | 4.73% | 3.87% | 4.89% |
Salary increase | 3.90% | 3.50% | 3.50% |
Discount rate | 4.40% | 4.73% | 3.87% |
Narrative description of basis used to determine overall expected long-term rate-of-return on asset assumption | The expected return on plan assets is based on the plan’s long-term asset allocation policy, historical returns for plan assets and overall capital market returns, taking into account current and expected market conditions. | ||
Assumptions used in calculations, description | The discount rate used to measure pension expense each year is the rate as of the beginning of the year (i.e., the prior measurement date). The discount rate used, determined by the plan actuary, was based on a hypothetical AA yield curve represented by a series of bonds maturing over the next 30 years, designed to match the corresponding pension benefit cash payments to retirees. | ||
Maximum [Member] | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assumptions used calculating net periodic benefit cost, discount rate calculation, bond term | 30 years |
Retirement Benefit Plans (Obligations and Funded Status) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Dec. 31, 2016 |
||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||
Defined Benefit Pension Plan, Liabilities, Noncurrent | $ 18 | $ 40 | |||||||||
Change in fair value of plan assets | |||||||||||
Increase/(Decrease) in funded status of plan | $ (22) | ||||||||||
Actual return on plan assets (percent) | 12.30% | ||||||||||
Cumulative return on plan assets since inception (percent) | 8.90% | ||||||||||
Pension Plan [Member] | |||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||
Defined Benefit Pension Plan, Liabilities, Noncurrent | $ 18 | ||||||||||
Prepaid pension | $ 40 | ||||||||||
Funded status of the plan (percent) | 99.00% | ||||||||||
Change in APBO | |||||||||||
Beginning balance | $ 3,327 | 5,254 | |||||||||
Service cost | 55 | 69 | $ 61 | ||||||||
Interest cost | 153 | 196 | 211 | ||||||||
Amendments | 0 | 0 | |||||||||
Transfer of benefits | 0 | (1,555) | |||||||||
Actuarial loss/(gain) | 151 | (247) | |||||||||
Benefits (paid) | (213) | (390) | |||||||||
Balance at measurement date | 3,473 | 3,327 | 5,254 | ||||||||
Change in fair value of plan assets | |||||||||||
Beginning Balance | 3,287 | 5,474 | |||||||||
Company contributions | 0 | 0 | |||||||||
Actual return on assets | [1] | 381 | (242) | ||||||||
Benefits (paid) | (213) | (390) | |||||||||
Balance at measurement date | 3,455 | 3,287 | 5,474 | ||||||||
Funded status of the plan | [2] | (18) | (40) | ||||||||
Defined Benefit Plan, Settlements, Plan Assets | 0 | (1,555) | |||||||||
Supplemental Employee Retirement Plan [Member] | |||||||||||
Change in APBO | |||||||||||
Beginning balance | 176 | 191 | |||||||||
Service cost | 0 | 0 | 0 | ||||||||
Interest cost | 7 | 7 | 9 | ||||||||
Amendments | 0 | 0 | |||||||||
Transfer of benefits | 0 | 0 | (56) | ||||||||
Actuarial loss/(gain) | 10 | (3) | |||||||||
Benefits (paid) | (41) | (19) | |||||||||
Balance at measurement date | 152 | 176 | 191 | ||||||||
Change in fair value of plan assets | |||||||||||
Beginning Balance | 0 | 0 | |||||||||
Company contributions | 41 | 19 | |||||||||
Actual return on assets | 0 | 0 | |||||||||
Benefits (paid) | (41) | (19) | |||||||||
Balance at measurement date | 0 | 0 | $ 0 | ||||||||
Funded status of the plan | [3] | (152) | (176) | ||||||||
Current portion of pension plan liability accrued | 26 | 46 | |||||||||
Defined Benefit Plan, Settlements, Plan Assets | $ 0 | $ 0 | |||||||||
Exceeded 100% [Member] | Pension Plan [Member] | |||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||
Funded status of the plan (percent) | 100.00% | ||||||||||
|
Retirement Benefit Plans (Accumulated Other Comprehensive (Loss)/Income) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
||||
Supplemental Employee Retirement Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Net loss/(gain) | $ 12 | $ 13 | |||
Prior service cost/(credit) | (4) | (4) | |||
Defined Benefit Plan, Accumulated Other Comprehensive Income, before Tax, Total | 8 | 9 | |||
Pension Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Net loss/(gain) | 318 | 333 | |||
Prior service cost/(credit) | 49 | 57 | |||
Defined Benefit Plan, Accumulated Other Comprehensive Income, before Tax, Total | 367 | [1] | $ 390 | ||
Defined Benefit Plan, Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year | $ 8 | ||||
|
Retirement Benefit Plans (Benefit Obligation Actuarial Assumptions) (Details) |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
---|---|---|---|
Compensation and Retirement Disclosure [Abstract] | |||
Discount rate | 4.40% | 4.73% | 3.87% |
Salary progression rate | 3.90% | 3.90% | 3.50% |
Retirement Benefit Plans Retirement Benefit Plans (Accumulated Benefit Obligation) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
---|---|---|---|
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | $ 3,200 | $ 3,100 | |
Fair value of plan assets | 3,455 | 3,287 | $ 5,474 |
Supplemental Employee Retirement Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | 133 | 153 | |
Fair value of plan assets | $ 0 | $ 0 | $ 0 |
Retirement Benefit Plans (Asset Allocation) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 30, 2016 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Actual plan asset allocations | 100.00% | 100.00% | 100.00% | |
Defined benefit plan, investment policies and strategies narrative description | In 2009, we began implementing a liability-driven investment (LDI) strategy to lower the plan’s volatility risk and minimize the impact of interest rate changes on the plan funded status. The implementation of the LDI strategy is phased in over time by reallocating the plan’s assets more towards fixed income investments (i.e., debt securities) that are more closely matched in terms of duration to the plan liability. The plan’s asset portfolio is actively managed and primarily invested in fixed income balanced with investments in equity securities and other asset classes to maintain an efficient risk/return diversification profile. The risk of loss in the plan’s equity portfolio is mitigated by investing in a broad range of equity types. Equity diversification includes large-capitalization and small-capitalization companies, growth-oriented and value-oriented investments and U.S. and non-U.S. securities. Investment types, including high-yield debt securities, illiquid assets such as real estate, the use of derivatives and Company securities are set forth in written guidelines established for each investment manager and monitored by the plan’s management team. The plan’s asset allocation policy is designed to meet the plan’s future pension benefit obligations. Under the policy, asset classes are periodically reviewed and rebalanced as necessary, to ensure that the mix continues to be appropriate relative to established targets and ranges. | |||
Defined benefit plan, risk management practices | We have an internal Benefit Plans Investment Committee (BPIC), which consists of senior executives who have established a review process of asset allocation and investment strategies and oversee risk management practices associated with the management of the plan’s assets. Key risk management practices include having an established and broad decision-making framework in place, focused on long-term plan objectives. This framework consists of the BPIC and various third parties, including investment managers, an investment consultant, an actuary and a trustee/custodian. The funded status of the plan is monitored on a continuous basis, including quarterly reviews with updated market and liability information. Actual asset allocations are monitored monthly and rebalancing actions are executed at least quarterly, if needed. To manage the risk associated with an actively managed portfolio, the plan’s management team reviews each manager’s portfolio on a quarterly basis and has written manager guidelines in place, which are adjusted as necessary to ensure appropriate diversification levels. Also, annual audits of the investment managers are conducted by independent auditors. Finally, to minimize operational risk, we utilize a master custodian for all plan assets, and each investment manager reconciles its account with the custodian at least quarterly. | |||
Equity securities total [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Target allocation minimum | 15.00% | |||
Target allocation maximum | 35.00% | |||
Actual plan asset allocations | 16.00% | 22.00% | 16.00% | |
Fixed income total [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Target allocation minimum | 50.00% | |||
Target allocation maximum | 60.00% | |||
Actual plan asset allocations | 54.00% | 60.00% | 54.00% | |
Real estate, cash and other [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Target allocation minimum | 20.00% | |||
Target allocation maximum | 40.00% | |||
Actual plan asset allocations | 30.00% | 18.00% | 30.00% | |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements | $ 180 | $ 0 | $ (180) | $ 0 |
Retirement Benefit Plans (Investments at Fair Value) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Total investment assets at fair value | $ 3,886 | $ 3,639 | |||||||||||
Total investment liabilities at fair value | (934) | ||||||||||||
Accounts payable, net | (76) | (158) | |||||||||||
Defined Benefit Plans Fair Value Total Investments at NAV | 579 | [1] | (613) | [2] | |||||||||
Total net assets | $ 3,455 | 3,287 | |||||||||||
Plan assets at fair value, description | Cash – Cash is valued at cost which approximates fair value, and is classified as level 1 of the fair value hierarchy. Common Collective Trusts – Common collective trusts are pools of investments within cash equivalents, equity and fixed income that are benchmarked relative to a comparable index. They are valued on the basis of the relative interest of each participating investor in the fair value of the underlying assets. The underlying assets are valued at net asset value (NAV) and are classified as level 2 of the fair value hierarchy. Equity Securities – Equity securities are common stocks and preferred stocks valued based on the price of the security as listed on an open active exchange and classified as level 1 of the fair value hierarchy, as well as warrants and preferred stock that are valued at a price, which is based on a broker quote in an over-the-counter market, and are classified as level 2 of the fair value hierarchy. Private Equity – Private equity is composed of interests in private equity funds valued on the basis of the relative interest of each participating investor in the fair value of the underlying assets and/or common stock of privately held companies. There are no observable market values for private equity funds. The valuations for the funds are derived using a combination of different methodologies including (1) the market approach, which consists of analyzing market transactions for comparable assets, (2) the income approach using the discounted cash flow model, or (3) cost method. Private equity funds also provide audited financial statements. Private equity investments are classified as level 3 of the fair value hierarchy. Corporate Bonds – Corporate bonds and Corporate loans are valued at a price which is based on observable market information in primary markets or a broker quote in an over-the-counter market, and are classified as level 2 or level 3 of the fair value hierarchy. Swaps – swap contracts are based on broker quotes in an over-the-counter market and are classified as level 2 of the fair value hierarchy. Government, Municipal Bonds and Mortgaged Backed Securities – Government and municipal securities are valued at a price based on a broker quote in an over-the-counter market and classified as level 2 of the fair value hierarchy. Mortgage backed securities are valued at a price based on observable market information or a broker quote in an over-the-counter market and classified as level 2 of the fair value hierarchy. Other fixed income – non-mortgage asset backed securities, collateral held in short-term investments for derivative contract and derivatives composed of futures contracts, option contracts and other fix income derivatives valued at a price based on observable market information or a broker quote in an over-the-counter market and classified as level 2 of the fair value hierarchy. Real Estate – Real estate is comprised of public and private real estate investments. Real estate investments through registered investment companies that trade on an exchange are classified as level 1 of the fair value hierarchy. Investments through open end private real estate funds that are valued at the reported NAV are classified as level 2 of the fair value hierarchy. Private real estate investments through partnership interests that are valued based on different methodologies including discounted cash flow, direct capitalization and market comparable analysis are classified as level 3 of the fair value hierarchy. Hedge Fund – Hedge funds exposure is through fund of funds, which are made up of over 30 different hedge fund managers diversified over different hedge strategies. The fair value of the hedge fund is determined by the fund's administrator using valuation provided by the third party administrator for each of the underlying funds. | ||||||||||||
Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | [3] | $ 0 | |||||||||||
Total investment assets at fair value | 573 | [3] | 401 | [4] | |||||||||
Total investment liabilities at fair value | 0 | [3] | 0 | [4] | |||||||||
Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Total investment assets at fair value | 3,306 | [3] | 3,230 | [4] | |||||||||
Total investment liabilities at fair value | (934) | [3] | (807) | [4] | |||||||||
Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | ||||||||||||
Total investment assets at fair value | 7 | 8 | |||||||||||
Total investment liabilities at fair value | 0 | 0 | |||||||||||
Common Collective Trusts [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 88 | 427 | |||||||||||
Common Collective Trusts [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | [4] | 0 | |||||||||||
Common Collective Trusts [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 88 | [3] | 427 | [4] | |||||||||
Common Collective Trusts [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | ||||||||||||
Cash and cash equivalents total [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 90 | 513 | |||||||||||
Cash and cash equivalents total [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 2 | [3] | 86 | [4] | |||||||||
Cash and cash equivalents total [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 88 | [3] | 427 | [4] | |||||||||
Cash and cash equivalents total [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Cash, benefit plan [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 2 | 86 | |||||||||||
Cash, benefit plan [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 2 | [3] | 86 | [4] | |||||||||
Cash, benefit plan [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Cash, benefit plan [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Equity securities total [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 682 | 447 | |||||||||||
Equity securities total [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 534 | [3] | 281 | [4] | |||||||||
Equity securities total [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 148 | [3] | 166 | [4] | |||||||||
Equity securities total [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Equity securities held within common collective trusts, international [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 148 | 166 | |||||||||||
Equity securities held within common collective trusts, international [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Equity securities held within common collective trusts, international [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 148 | [3] | 166 | [4] | |||||||||
Equity securities held within common collective trusts, international [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Equity securities, domestic [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 421 | 192 | |||||||||||
Equity securities, domestic [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 421 | [3] | 192 | [4] | |||||||||
Equity securities, domestic [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Equity securities, domestic [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Equity securities, international [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 113 | 89 | |||||||||||
Equity securities, international [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 113 | [3] | 89 | [4] | |||||||||
Equity securities, international [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Equity securities, international [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Fixed income total [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 3,062 | 2,631 | |||||||||||
Investment liabilities at fair value | (934) | (807) | |||||||||||
Total investment liabilities at fair value | (807) | ||||||||||||
Fixed income total [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Investment liabilities at fair value | 0 | [3] | 0 | [4] | |||||||||
Fixed income total [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 3,055 | [3] | 2,623 | [4] | |||||||||
Investment liabilities at fair value | (934) | [3] | (807) | [4] | |||||||||
Fixed income total [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 7 | 8 | |||||||||||
Investment liabilities at fair value | 0 | 0 | |||||||||||
Debt securities held within common collective trusts [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 864 | 676 | |||||||||||
Debt securities held within common collective trusts [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Debt securities held within common collective trusts [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 864 | [3] | 676 | [4] | |||||||||
Debt securities held within common collective trusts [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Corporate bonds [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 926 | 776 | |||||||||||
Corporate bonds [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Corporate bonds [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 919 | [3] | 771 | [4] | |||||||||
Corporate bonds [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 7 | 5 | |||||||||||
Swaps [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 934 | 787 | |||||||||||
Investment liabilities at fair value | (928) | (801) | |||||||||||
Swaps [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Investment liabilities at fair value | 0 | [3] | 0 | [4] | |||||||||
Swaps [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 934 | [3] | 787 | [4] | |||||||||
Investment liabilities at fair value | (928) | [3] | (801) | [4] | |||||||||
Swaps [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Investment liabilities at fair value | 0 | 0 | |||||||||||
Asset-backed Securities [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 4 | 4 | |||||||||||
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 4 | [3] | 4 | [4] | |||||||||
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Government securities [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 185 | 230 | |||||||||||
Government securities [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Government securities [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 185 | [3] | 230 | [4] | |||||||||
Government securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Other fixed income [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 149 | 158 | |||||||||||
Investment liabilities at fair value | (6) | (6) | |||||||||||
Other fixed income [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Investment liabilities at fair value | 0 | [3] | 0 | [4] | |||||||||
Other fixed income [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 149 | [3] | 155 | [4] | |||||||||
Investment liabilities at fair value | (6) | [3] | (6) | [4] | |||||||||
Other fixed income [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 3 | |||||||||||
Investment liabilities at fair value | 0 | 0 | |||||||||||
Real estate total [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 52 | 48 | |||||||||||
Real estate total [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 37 | [3] | 34 | [4] | |||||||||
Real estate total [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 15 | [3] | 14 | [4] | |||||||||
Real estate total [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Public REITs [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 37 | 34 | |||||||||||
Public REITs [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 37 | [3] | 34 | [4] | |||||||||
Public REITs [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Public REITs [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Private real estate [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 15 | 14 | |||||||||||
Private real estate [Member] | Fair Value, Inputs, Level 1 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | [3] | 0 | [4] | |||||||||
Private real estate [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 15 | [3] | 14 | [4] | |||||||||
Private real estate [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 0 | 0 | |||||||||||
Investments at NAV Common Collective Trusts [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Defined Benefit Plans Fair Value Total Investments at NAV | (220) | [1] | (248) | [2] | |||||||||
Investments at NAV Private Real Estate [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Defined Benefit Plans Fair Value Total Investments at NAV | 135 | [1] | 151 | [2] | |||||||||
Investments at NAV Hedge Funds [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Defined Benefit Plans Fair Value Total Investments at NAV | $ 224 | [1] | $ 214 | [2] | |||||||||
|
Retirement Benefit Plans (Level 3 Investment Assets) (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Jan. 28, 2017
USD ($)
manager
|
Jan. 30, 2016
USD ($)
|
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Number of hedge fund managers (more than) | manager | 30 | |
Corporate bonds [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of year | $ 5 | $ 7 |
Transfers, net | 0 | |
Realized gains | 3 | (3) |
Unrealized gains/(losses) | (4) | 2 |
Purchases and issuances | 15 | 1 |
Sales, maturities and settlements | (12) | (2) |
Balance, end of year | 7 | 5 |
Corporate loans [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of year | 3 | 5 |
Transfers, net | 0 | |
Realized gains | 0 | 0 |
Unrealized gains/(losses) | 0 | 0 |
Purchases and issuances | 0 | 0 |
Sales, maturities and settlements | (3) | (2) |
Balance, end of year | $ 0 | $ 3 |
Retirement Benefits Plans (Estimated Future Benefit Payments) (Details) $ in Millions |
Jan. 28, 2017
USD ($)
|
---|---|
Pension Plan [Member] | |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |
2016 | $ 203 |
2017 | 205 |
2018 | 210 |
2019 | 215 |
2020 | 221 |
2021-2025 | 1,160 |
Supplemental Pension Plans [Member] | |
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract] | |
2016 | 26 |
2017 | 18 |
2018 | 16 |
2019 | 16 |
2020 | 13 |
2021-2025 | $ 58 |
Retirement Benefit Plans (Postretirement Plan (Income)) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jun. 07, 2005 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Net periodic benefit expense/(income) | $ (19) | $ (162) | $ 48 | |
Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Reduction of plan benefits, employee age (post-age) | 65 years | |||
Reduction of plan benefits (percent) | 45.00% | |||
Net periodic benefit expense/(income) | $ 17 | 7 | $ 8 | |
Accumulated postretirement benefit obligation | $ 8 |
Retirement Benefit Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Defined Contribution Plan, Cost Recognized | $ 49 | $ 56 | $ 53 |
Savings, Profit-Sharing and Stock Ownership Plan [Member] | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Defined contribution plan, required age for employee eligibility | 21 years | ||
Defined contribution plan, service term required for matching contributions | 1 year | ||
Defined contribution plan, service hours required for matching contributions | 1000 hours | ||
Defined contribution plan, employer's matching contribution, percent of employees' contribution subject to plan | 50.00% | ||
Defined contribution plan, employee contribution subject to plan, percent of employees' gross pay | 6.00% | ||
Defined contribution plan, vesting period for matching contributions | 3 years | ||
Savings Plan - Noncontributory Retirement Account [Member] | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Defined contribution plan, service hours required for matching contributions | 1000 hours | ||
Defined contribution plan, vesting period for matching contributions | 3 years | ||
Defined contribution plan, annual contributions per employee (percent) | 2.00% |
Restructuring and Management Transition Restructuring and Management Transition Summary (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017
USD ($)
department_store
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and management transition charges | $ 26 | $ 84 | $ 87 |
Cumulative charges incurred to date | $ 730 | ||
Number of stores closed | department_store | 1,013 | ||
Home Office And Stores [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and management transition charges | $ 8 | 42 | 45 |
Cumulative charges incurred to date | 297 | ||
Management Transition [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and management transition charges | 3 | 28 | 16 |
Cumulative charges incurred to date | 255 | ||
Other [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and management transition charges | 15 | $ 14 | $ 26 |
Cumulative charges incurred to date | $ 178 |
Restructuring and Management Transition Cumulative Charges (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Restructuring Reserve [Roll Forward] | |||
Charges | $ 26 | $ 84 | $ 87 |
Home Office And Stores [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring and management transition liability, beginning balance | 18 | 9 | |
Charges | 8 | 42 | 45 |
Cash payments | (23) | (33) | |
Non-cash | 1 | 0 | |
Restructuring and management transition liability, ending balance | 4 | 18 | 9 |
Management Transition [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring and management transition liability, beginning balance | 10 | 0 | |
Charges | 3 | 28 | 16 |
Cash payments | (13) | (9) | |
Non-cash | 0 | (9) | |
Restructuring and management transition liability, ending balance | 0 | 10 | 0 |
Other [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring and management transition liability, beginning balance | 23 | 17 | |
Charges | 15 | 14 | 26 |
Cash payments | (11) | (7) | |
Non-cash | 0 | (1) | |
Restructuring and management transition liability, ending balance | 27 | 23 | 17 |
Total [Member] | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring and management transition liability, beginning balance | 51 | 26 | |
Charges | 26 | 84 | |
Cash payments | (47) | (49) | |
Non-cash | 1 | (10) | |
Restructuring and management transition liability, ending balance | $ 31 | $ 51 | $ 26 |
Real Estate and Other, Net (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Apr. 30, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Aug. 01, 2015
USD ($)
|
May 02, 2015
USD ($)
|
Jan. 28, 2017
USD ($)
department_store
|
Jan. 30, 2016
USD ($)
|
Jan. 31, 2015
USD ($)
|
May 03, 2014
a
|
|
Real Estate Properties [Line Items] | ||||||||
Net gain on sale or redemption of non-operating assets | $ (5) | $ (1) | $ (6) | $ (2) | $ (5) | $ (9) | $ (25) | |
Investment income from Home Office Land Joint Venture | (28) | (41) | (53) | |||||
Gain (Loss) on Disposition of Property Plant Equipment | 73 | 9 | 92 | |||||
Net gain from sale of operating assets | 62 | |||||||
Store and other asset impairments | 0 | 20 | 30 | |||||
Other | (5) | 42 | (8) | |||||
Total expense/(income) | (111) | 3 | (148) | |||||
Area of Land | a | 220 | |||||||
Payments for (Proceeds from) Investments | $ (2) | (13) | $ (35) | |||||
Number of stores | department_store | 1,013 | |||||||
Proceeds from sale of operating assets | $ 80 | |||||||
Proceeds from Equity Method Investment, Dividends or Distributions | $ 44 | 36 | ||||||
Litigation Settlement, Expense | $ 50 |
Income Taxes (Components of Income Tax (Benefits)/Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Federal and foreign, Current | $ (12) | $ 5 | $ 12 |
State and local, Current | 4 | 6 | 8 |
Total, Current | (8) | 11 | 20 |
Federal and foreign, Deferred | 9 | (1) | 9 |
State and local, Deferred | 0 | (1) | (6) |
Total, Deferred | 9 | (2) | 3 |
Total | $ 1 | $ 9 | $ 23 |
Income Taxes (Reconciliation of the Statutory Federal Income Tax Rate) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ 1 | $ (176) | $ (243) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | (2) | (21) | (29) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | (1) | 185 | 290 |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 3 | 21 | 5 |
Income tax expense/(benefit) | $ 1 | $ 9 | $ 23 |
Income Taxes (Components of Deferred Tax Assets/(Liabilities)) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Merchandise inventory | $ 27 | $ 39 |
Accrued vacation pay | 17 | 22 |
Gift cards | 98 | 90 |
Stock-based compensation | 58 | 77 |
Deferred equity adjustment | 4 | 11 |
State taxes | 12 | 15 |
Workers’ compensation/general liability | 74 | 85 |
Accrued rent | 39 | 37 |
Litigation exposure | 16 | 32 |
Mirror savings plan | 13 | 15 |
Pension and other retiree obligations | 76 | 96 |
Net operating loss and tax credit carryforwards | 931 | 1,072 |
Other | 73 | 65 |
Total deferred tax assets | 1,438 | 1,656 |
Valuation allowance | (993) | (1,025) |
Total net deferred tax assets | 445 | 631 |
Depreciation and amortization | (561) | (741) |
Tax benefit transfers | (53) | (56) |
Long-lived intangible assets | (35) | (28) |
Total deferred tax liabilities | (649) | (825) |
Total net deferred tax liabilities | $ (204) | $ (194) |
Operating Loss Carryforwards, Expiration Dates | For U.S. federal income tax purposes, we have $2.2 billion of gross NOL carryforwards that expire in 2032 through 2034 and $62 million of tax credit carryforwards that expire at various dates through 2034. |
Income Taxes (Deferred Tax Assets/Liabilities in Consolidated Balance Sheets) (Details) - USD ($) $ in Millions |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
Feb. 01, 2014 |
---|---|---|---|---|
Income Tax Contingency [Line Items] | ||||
Other current assets | $ 196 | $ 231 | ||
Other long-term liabilities | (400) | (425) | ||
Total net deferred tax liabilities | (204) | (194) | ||
Deferred taxes (current assets) | 75 | 84 | ||
Accounts payable and accrued expenses (Note 6) | 3 | 3 | ||
Other liabilities (Note 7) | 1 | 4 | ||
Total | $ 79 | $ 91 | $ 62 | $ 70 |
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Beginning balance | $ 91 | $ 62 | $ 70 |
Additions for tax positions of prior years | 16 | 40 | 10 |
Reductions for tax positions of prior years | (24) | 0 | 0 |
Settlements and effective settlements with tax authorities | (4) | (10) | (16) |
Expirations of statute | 0 | (1) | (2) |
Balance at end of year | $ 79 | $ 91 | $ 62 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jan. 27, 2014 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance | $ 993 | $ 1,025 | ||
Income Tax Expense (Benefit), Intraperiod Tax Allocation | 12 | |||
Net tax expense (benefit) | 1 | 9 | $ 23 | |
Tax Credit Carryforward Amount Attributable to Share Based Compensation | 28 | |||
Tax Credit Carryforward Amount Attributable to Share Based Compensation, Tax | 11 | |||
Operating loss carryforwards and tax credits, potential offset to future ordinary taxable income | 900 | |||
Amended rights agreement, stockholder ownership percentage, maximum | 4.90% | |||
Amended rights agreement, Minimum stock ownership percentage by which stockholders are prevented from acquiring additional shares | 4.90% | |||
Amount of unrecognized tax benefits that would impact effective tax rate if recognized | 32 | 33 | 36 | |
Benefit of federal tax deduction of state taxes | 11 | 12 | 13 | |
Accrued interest and penalties for unrecognized tax benefits | 2 | $ 3 | $ 3 | |
Federal [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforward | 2,200 | |||
Tax credit carryforwards | $ 62 |
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|
Supplemental cash flow information | |||
Income taxes received/(paid), net | $ (10) | $ (5) | $ (30) |
Interest received/(paid), net | (344) | (369) | (401) |
Supplemental non-cash investing and financing activity | |||
Property contributed to joint venture | 0 | 0 | 30 |
Increase/(decrease) in other accounts payable related to purchases of property and equipment and software | 20 | 1 | (14) |
Financing costs withheld from proceeds of long-term debt | 0 | 0 | 7 |
Purchase of property and equipment and software through capital leases and a note payable | $ 1 | $ 1 | $ 3 |
Litigation, Other Contingencies and Guarantees (Narrative) (Details) $ in Thousands |
12 Months Ended |
---|---|
Jan. 28, 2017
USD ($)
| |
Loss Contingencies [Line Items] | |
Payments for Legal Settlements | $ 25,000 |
Recorded Best Estimate | 24,000 |
Store credit issued for litigation settlement | 25,000 |
Minimum [Member] | |
Loss Contingencies [Line Items] | |
Estimate Potential Environmental Liabilities Minimum | 20,000 |
Maximum [Member] | |
Loss Contingencies [Line Items] | |
Estimate Potential Environmental Liabilities Minimum | 26,000 |
ERISA Class Action Litigation [Member] | |
Loss Contingencies [Line Items] | |
Estimated Litigation Liability | 4,500 |
Employment Class Action Litigation [Member] | |
Loss Contingencies [Line Items] | |
Estimated Litigation Liability | $ 6,750 |
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Aug. 01, 2015 |
May 02, 2015 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
|||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||||||
Total net sales | $ 3,961 | $ 2,857 | $ 2,918 | $ 2,811 | $ 3,996 | $ 2,897 | $ 2,875 | $ 2,857 | $ 12,547 | $ 12,625 | $ 12,257 | ||||||||||||||||||
Gross margin | 1,312 | 1,062 | 1,084 | 1,018 | 1,363 | 1,082 | 1,065 | 1,041 | 4,476 | 4,551 | 4,261 | ||||||||||||||||||
SG&A expenses | 925 | 888 | 853 | 872 | 962 | 947 | 901 | 965 | 3,538 | 3,775 | 3,993 | ||||||||||||||||||
Restructuring and management transition | 9 | [1] | 2 | [1] | 9 | [1] | 6 | [1] | 31 | [2] | 14 | [2] | 17 | [2] | 22 | [2] | $ 26 | $ 84 | $ 87 | ||||||||||
Net income/(loss)(2) | $ 192 | [3] | $ (67) | [3] | $ (56) | [3] | $ (68) | [3] | $ (131) | [4] | $ (115) | [4] | $ (117) | [4] | $ (150) | [4] | |||||||||||||
Diluted earnings/(loss) per share(3) | $ 0.61 | [5] | $ (0.22) | [5] | $ (0.18) | [5] | $ (0.22) | [5] | $ (0.43) | [5] | $ (0.38) | [5] | $ (0.38) | [5] | $ (0.49) | [5] | $ 0.00 | $ (1.68) | $ (2.35) | ||||||||||
Change to income tax valuation allowance | $ 94 | $ (30) | $ (19) | $ (13) | $ (110) | $ (41) | $ (46) | $ (44) | |||||||||||||||||||||
Gain from non-operating asset sales | 5 | 1 | 6 | 2 | $ 5 | $ 9 | $ 25 | ||||||||||||||||||||||
Asset impairments | 0 | 20 | 30 | ||||||||||||||||||||||||||
Income tax expense/(benefit) | $ 1 | $ 9 | $ 23 | ||||||||||||||||||||||||||
Home Office And Stores [Member] | |||||||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||||||
Restructuring and management transition | 2 | 2 | 0 | 4 | 4 | 9 | 15 | 14 | |||||||||||||||||||||
Management Transition [Member] | |||||||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||||||
Restructuring and management transition | 0 | 0 | 1 | 2 | 18 | 3 | 1 | 6 | |||||||||||||||||||||
Other [Member] | |||||||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||||||
Restructuring and management transition | $ 7 | $ 0 | $ 8 | $ 0 | $ 9 | $ 2 | $ 1 | $ 2 | |||||||||||||||||||||
|
Subsequent Events (Details) |
Mar. 31, 2017 |
Mar. 17, 2017 |
Mar. 10, 2017 |
---|---|---|---|
Subsequent Event [Line Items] | |||
Subsequent Event, Description | The Company also initiated a Voluntary Early Retirement Program (VERP) for approximately 6,000 eligible associates. Eligibility for the VERP will generally include home office, stores and supply chain personnel who met certain criteria related to age and years of service as of January 31, 2017. The consideration period for eligible associates to accept the VERP will end on March 31, 2017. Based on the number of eligible associates that irrevocably accept the VERP, the Company will record the related charges in the first quarter of 2017. |
On March 17, 2017, the Company finalized its announced plans to close a distribution facility and 138 stores and to relocate and sell a distribution facility in 2017. These strategic decisions will help align the Company's brick-and-mortar presence with its omnichannel network, thereby redirecting capital resources to invest in locations and initiatives that offer the greatest revenue potential. As a result of the store actions, the Company will close a distribution center located in Lakeland, Florida in early June, at which time operations will transfer to the Company's logistics facility in Atlanta as part of a strategic effort to streamline store support services. |
Also, on March 10, 2017, the Company entered into a contract to sell its supply chain facility in Buena Park, California for approximately $130 million with plans to close on the sale on or before March 31, 2017. In connection with the store closings, the Company expects to incur charges primarily related to lease termination obligation expenses, non-cash asset impairments and transition costs as the store closings are executed in 2017. |