(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 (Do not check if a smaller reporting company) | Smaller reporting company o |
Emerging growth company o |
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. 2018 Proxy Statement | Part III |
Page | ||
2017 | 2016 | 2015 | |||||||
Women’s apparel | 22 | % | 23 | % | 25 | % | |||
Men’s apparel and accessories | 21 | % | 22 | % | 22 | % | |||
Home | 15 | % | 13 | % | 12 | % | |||
Women’s accessories, including Sephora | 13 | % | 13 | % | 12 | % | |||
Children’s apparel | 9 | % | 10 | % | 10 | % | |||
Footwear and handbags | 8 | % | 8 | % | 8 | % | |||
Jewelry | 6 | % | 6 | % | 6 | % | |||
Services and other | 6 | % | 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 | 53 | ||
Jeffrey A. Davis | Executive Vice President and Chief Financial Officer | 55 | ||
Brynn L. Evanson | Executive Vice President, Human Resources | 48 | ||
Marci Grebstein | Executive Vice President, Chief Marketing Officer | 54 | ||
Joseph M. McFarland | Executive Vice President and Chief Customer Officer | 48 | ||
Therace M. Risch | Executive Vice President and Chief Information/Digital Officer | 45 | ||
Michael Robbins | Executive Vice President, Supply Chain | 52 | ||
Andrew S. Drexler | Senior Vice President, Chief Accounting Officer and Controller | 47 | ||
Brandy L. Treadway | Senior Vice President, General Counsel | 43 |
• | 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 gather accurate and relevant data and effectively utilize that data in our strategic planning and decision making; |
• | 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 | 15 | Maine | 5 | Oklahoma | 15 | |||||
Alaska | 1 | Maryland | 16 | Oregon | 8 | |||||
Arizona | 21 | Massachusetts | 9 | Pennsylvania | 27 | |||||
Arkansas | 14 | Michigan | 34 | Rhode Island | 2 | |||||
California | 76 | Minnesota | 16 | South Carolina | 14 | |||||
Colorado | 17 | Mississippi | 10 | South Dakota | 3 | |||||
Connecticut | 7 | Missouri | 24 | Tennessee | 21 | |||||
Delaware | 3 | Montana | 5 | Texas | 82 | |||||
Florida | 53 | Nebraska | 8 | Utah | 8 | |||||
Georgia | 22 | Nevada | 6 | Vermont | 4 | |||||
Idaho | 8 | New Hampshire | 9 | Virginia | 22 | |||||
Illinois | 30 | New Jersey | 13 | Washington | 21 | |||||
Indiana | 22 | New Mexico | 10 | West Virginia | 8 | |||||
Iowa | 11 | New York | 38 | Wisconsin | 10 | |||||
Kansas | 14 | North Carolina | 23 | Wyoming | 3 | |||||
Kentucky | 22 | North Dakota | 5 | Puerto Rico | 6 | |||||
Louisiana | 13 | Ohio | 38 | |||||||
Total square feet | 95.6 million |
Square Footage | |||||||
Location | Leased/Owned | Primary Function(s) | (in thousands) | ||||
Manchester, Connecticut | Owned | stores | 1,956 | ||||
Lenexa, Kansas | Owned | stores, direct to customers | 1,944 | ||||
Columbus, Ohio | Owned | stores, direct to customers | 1,941 | ||||
Milwaukee, Wisconsin | Owned | stores | 1,921 | ||||
Atlanta, Georgia | Owned | stores, regional, direct to customers | 2,026 | ||||
Reno, Nevada | Owned | stores, direct to customers | 1,660 | ||||
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 | 412 | ||||
Buena Park, California (1) | Leased | stores, regional | 1,034 | ||||
San Bernardino, California (1) | Leased | stores | 625 | ||||
Total supply chain network | 15,890 |
(1) | The Company sold the Buena Park location during 2017 and is leasing it back until it transfers certain operations to the San Bernardino location during 2018. |
Fiscal Year 2017 | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Market price: | ||||||||||||||||
High | $ | 7.42 | $ | 5.73 | $ | 5.63 | $ | 4.24 | ||||||||
Low | $ | 5.32 | $ | 4.17 | $ | 2.76 | $ | 2.35 | ||||||||
Close | $ | 5.38 | $ | 5.56 | $ | 3.12 | $ | 3.54 | ||||||||
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 |
S&P Department Stores: Macy’s, Kohl’s, Nordstrom |
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | |||||||
JCPenney | $100 | $30 | $37 | $37 | $32 | $18 | ||||||
S&P 500 | 100 | 120 | 137 | 136 | 165 | 203 | ||||||
S&P Department Stores | 100 | 116 | 145 | 104 | 84 | 104 |
($ in millions, except per share data) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Results for the year | ||||||||||||||||||||
Total net sales | $ | 12,506 | $ | 12,547 | $ | 12,625 | $ | 12,257 | $ | 11,859 | ||||||||||
Sales percent increase/(decrease): | ||||||||||||||||||||
Total net sales | (0.3 | )% | (1) | (0.6 | )% | 3.0 | % | 3.4 | % | (8.7 | )% | (1) | ||||||||
Comparable store sales (2) | 0.1 | % | 0.0 | % | 4.5 | % | 4.4 | % | (7.4 | )% | ||||||||||
Operating income/(loss) | 116 | 395 | (89 | ) | (254 | ) | (1,242 | ) | ||||||||||||
As a percent of sales | 0.9 | % | 3.1 | % | (0.7 | )% | (2.1 | )% | (10.5 | )% | ||||||||||
Net income/(loss) from continuing operations | (116 | ) | 1 | (513 | ) | (717 | ) | (1,278 | ) | |||||||||||
Adjusted EBITDA (non-GAAP) (3) | 972 | 1,009 | 715 | 292 | (612 | ) | ||||||||||||||
Adjusted net income/(loss) from continuing operations (non-GAAP) (3) | 68 | 24 | (315 | ) | (766 | ) | (1,407 | ) | ||||||||||||
Per common share | ||||||||||||||||||||
Earnings/(loss) per share from continuing operations, diluted | $ | (0.37 | ) | $ | 0.00 | $ | (1.68 | ) | $ | (2.35 | ) | $ | (5.13 | ) | ||||||
Adjusted earnings/(loss) per share from continuing operations, diluted (non-GAAP) (3) | $ | 0.22 | $ | 0.08 | $ | (1.03 | ) | $ | (2.51 | ) | $ | (5.64 | ) | |||||||
Financial position and cash flow | ||||||||||||||||||||
Total assets | $ | 8,413 | $ | 9,118 | $ | 9,211 | $ | 10,137 | $ | 11,517 | ||||||||||
Cash and cash equivalents | 458 | 887 | 900 | 1,318 | 1,515 | |||||||||||||||
Total debt (4) | 4,232 | 4,836 | 4,805 | 5,321 | 5,510 | |||||||||||||||
Free cash flow (non-GAAP) (3) | 213 | 3 | 131 | 57 | (2,746 | ) |
(1) | Includes the effect of the 53rd week in 2017 and 2012. Excluding sales of $147 million and $163 million for the 53rd week in 2017 and 2012, respectively, total net sales decreased 1.5% and 7.5% in 2017 and 2013, 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. |
(4) | 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. |
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Number of department stores: | ||||||||||||||||||||
Beginning of year | 1,013 | 1,021 | 1,062 | 1,094 | 1,104 | |||||||||||||||
Openings | — | 1 | — | 1 | — | |||||||||||||||
Closings | (141 | ) | (9 | ) | (41 | ) | (33 | ) | (10 | ) | ||||||||||
End of year | 872 | 1,013 | 1,021 | 1,062 | 1,094 | |||||||||||||||
Gross selling space (square feet in millions) | 95.6 | 103.3 | 104.7 | 107.9 | 110.6 | |||||||||||||||
Sales per gross square foot (1) | $ | 127 | $ | 121 | $ | 120 | $ | 113 | $ | 107 | ||||||||||
Sales per net selling square foot (1) | $ | 177 | $ | 166 | $ | 165 | $ | 155 | $ | 147 | ||||||||||
Number of the Foundry Big and Tall Supply Co. stores (2) | — | — | — | — | 10 |
(1) | 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. |
(2) | All stores opened during 2011 and closed during 2014. Gross selling space was 51 thousand square feet as of the end of 2013. |
• | Beauty; |
• | Home refresh; |
• | Women's apparel business; and |
• | Omnichannel. |
▪ | Sales were $12,506 million, a decrease of 0.3% as compared to 2016, and comparable store sales increased 0.1% for the year. Excluding sales of $147 million for the 53rd week in 2017, total net sales decreased 1.5% in 2017. |
▪ | Cost of goods sold, which excludes depreciation and amortization, as a percentage of sales was 65.4% compared to 64.3% last year. This increase was primarily driven by the liquidation of both closed store and slow-moving inventory, the continued growth in certain lower margin merchandise categories such as major appliances and higher shrinkage rates. |
▪ | Selling, general and administrative (SG&A) expenses decreased $70 million, or 2.0%, as compared to 2016. These savings were primarily driven by reductions in store controllable costs and marketing efficiencies, which were partially offset by lower credit income and higher incentive compensation. |
▪ | Net loss was $116 million, or $0.37 per share, compared to net income of $1 million, or $0.00 per share, in 2016. Results for 2017 included the following amounts that are not directly related to our ongoing core business operations: |
▪ | $303 million, or $(0.97) per share, of restructuring and management transition charges most of which encompassed the closure of 138 stores and the costs related to a Voluntary Early Retirement Program (VERP) for approximately 2,800 eligible associates; |
▪ | $11 million, or $0.04 per share, for Primary Pension Plan income; |
▪ | $25 million, or $(0.08) per share, for the mark-to-market (MTM) adjustment for supplemental retirement plans; |
▪ | $33 million, or $(0.11) per share, for the loss on extinguishment of debt; |
▪ | $31 million, or $0.10 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); |
▪ | $60 million, or $0.19 per share, for the tax impact resulting from other comprehensive income allocation; and |
▪ | $75 million, or $0.24 per share, for the impact of tax reform. |
▪ | Adjusted net income was $68 million, or $0.22 per share, compared to adjusted net income of $24 million, or $0.08 per share, in 2016. See the reconciliation of net income/(loss) and diluted EPS, the most directly comparable GAAP financial measures, to adjusted net income/(loss) and adjusted diluted EPS on page 36. |
▪ | Adjusted EBITDA was $972 million for 2017 compared to adjusted EBITDA of $1,009 million in 2016. See the reconciliation of net income/(loss), the most directly comparable GAAP financial measure, to adjusted EBITDA on page 35. |
▪ | We completed the sale of our Buena Park, California distribution facility in March for a net sales price of $131 million |
▪ | During the second quarter, we amended and restated our $2.35 billion senior secured asset-based revolving credit facility to, among other things, extend the maturity date to June 20, 2022 and to lower the interest rate spread by 75 basis points. |
▪ | During the year, we reduced our outstanding debt position by approximately $600 million. |
(in millions, except per share data) | 2017 | 2016 | 2015 | |||||||||
Total net sales | $ | 12,506 | $ | 12,547 | $ | 12,625 | ||||||
Percent increase/(decrease) from prior year | (0.3 | )% | (1) | (0.6 | )% | 3.0 | % | |||||
Comparable store sales increase/(decrease) (2) | 0.1 | % | 0.0 | % | 4.5 | % | ||||||
Costs and expenses/(income): | ||||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 8,174 | 8,071 | 8,074 | |||||||||
Selling, general and administrative | 3,468 | 3,538 | 3,775 | |||||||||
Pension | 21 | 19 | 162 | |||||||||
Depreciation and amortization | 570 | 609 | 616 | |||||||||
Real estate and other, net | (146 | ) | (111 | ) | 3 | |||||||
Restructuring and management transition | 303 | 26 | 84 | |||||||||
Total costs and expenses | 12,390 | 12,152 | 12,714 | |||||||||
Operating income/(loss) | 116 | 395 | (89 | ) | ||||||||
As a percent of sales | 0.9 | % | 3.1 | % | (0.7 | )% | ||||||
Loss on extinguishment of debt | 33 | 30 | 10 | |||||||||
Net interest expense | 325 | 363 | 405 | |||||||||
Income/(loss) before income taxes | (242 | ) | 2 | (504 | ) | |||||||
Income tax (benefit)/expense | (126 | ) | 1 | 9 | ||||||||
Net income/(loss) | $ | (116 | ) | $ | 1 | $ | (513 | ) | ||||
Adjusted EBITDA (3) | $ | 972 | $ | 1,009 | $ | 715 | ||||||
Adjusted net income/(loss) (non-GAAP) (3) | $ | 68 | $ | 24 | $ | (315 | ) | |||||
Diluted EPS | $ | (0.37 | ) | $ | 0.00 | $ | (1.68 | ) | ||||
Adjusted diluted EPS (non-GAAP) (3) | $ | 0.22 | $ | 0.08 | $ | (1.03 | ) | |||||
Weighted average shares used for diluted EPS | 311.1 | 313.0 | 305.9 |
(1) | Includes the effect of the 53rd week in 2017. Excluding sales of $147 million for the 53rd week in 2017, total net sales decreased 1.5% in 2017. |
(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 discussion herein of this non-GAAP financial measure and reconciliation to its most directly comparable GAAP financial measure. |
2017 | 2016 | ||||||
Total net sales (in millions) | $ | 12,506 | $ | 12,547 | |||
Sales percent increase/(decrease) | |||||||
Total net sales | (0.3 | )% | (1) | (0.6 | )% | ||
Comparable store sales (2) | 0.1 | % | — | % | |||
Sales per gross square foot (3) | $ | 127 | $ | 121 |
(1) | Includes the effect of the 53rd week in 2017. Excluding sales of $147 million for the 53rd week in 2017, total net sales decreased 1.5% in 2017. |
(2) | Comparable store sales are presented on a 52-week basis and include sales from all stores, including sales from services and commissions earned from our in-store licensed departments, that have been open for 12 consecutive full fiscal months and Internet sales. Stores closed for an extended period are not included in comparable store sales calculations, while stores remodeled and minor expansions not requiring store closure remain in the calculations. Certain items, such as sales return estimates and store liquidation sales, are excluded from the Company's calculation. Our definition and calculation of comparable store sales may differ from other companies in the retail industry. |
(3) | Calculation includes the sales, including commission revenue, and square footage of department stores, including selling space allocated to services and licensed departments, that were open for the full fiscal year, as well as Internet sales. |
($ in millions) | 2017 | ||
Comparable store sales increase/(decrease) | $ | 12 | |
Sales related to new and closed stores, net | (205 | ) | |
Other revenues and sales adjustments (1) | 152 | ||
Total net sales increase/(decrease) | $ | (41 | ) |
(1) | Includes sales of $147 million for the 53rd week in 2017. |
• | Stores increase Internet sales by providing customers opportunities to view, touch and/or try on physical merchandise before ordering online. |
• | Our website increases store sales as in-store customers have often pre-shopped online before shopping in the store, including verification of which stores have online merchandise in stock. |
• | Most Internet purchases are easily returned in our stores. |
• | JCPenney Rewards can be earned and redeemed online or in stores. |
• | In-store customers can order from our website with the assistance of associates in our stores or they can shop our website from the JCPenney app while inside the store. |
• | Customers who utilize our mobile application can receive mobile coupons to use when they check out both online or in our stores. |
• | Internet orders can be shipped from a dedicated jcpenney.com fulfillment center, a store, a store merchandise distribution center, a regional warehouse, directly from vendors or any combination of the above. |
• | Certain categories of store inventory can be accessed and purchased by jcpenney.com customers and shipped directly to the customer's home from the store. |
• | Internet orders can be shipped to stores for customer pick up. |
• | "Buy online and pick up in store" is now available in all of our stores. |
($ in millions) | 2017 | 2016 | ||||||
Primary pension plan expense/(income) | $ | (11 | ) | $ | 1 | |||
Supplemental pension plans expense/(income) | 32 | 18 | ||||||
Total pension expense/(income) | $ | 21 | $ | 19 |
($ in millions) | 2017 | 2016 | ||||||
Net gain from sale of non-operating assets | $ | — | $ | (5 | ) | |||
Investment income from Home Office Land Joint Venture | (31 | ) | (28 | ) | ||||
Net gain from sale of operating assets | (119 | ) | (73 | ) | ||||
Other | 4 | (5 | ) | |||||
Total expense/(income) | $ | (146 | ) | $ | (111 | ) |
($ in millions) | 2017 | 2016 | ||||||
VERP | $ | 122 | $ | — | ||||
Home office and stores | 176 | 8 | ||||||
Management transition | — | 3 | ||||||
Other | 5 | 15 | ||||||
Total | $ | 303 | $ | 26 |
2016 | 2015 | ||||||
Total net sales (in millions) | $ | 12,547 | $ | 12,625 | |||
Sales percent increase/(decrease) | |||||||
Total net sales(1) | (0.6 | )% | 3.0 | % | |||
Comparable store sales(2) | — | % | 4.5 | % | |||
Sales per gross square foot(3) | $ | 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 | ) |
($ 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 |
($ in millions) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Net income/(loss) from continuing operations | $ | (116 | ) | $ | 1 | $ | (513 | ) | $ | (717 | ) | $ | (1,278 | ) | |||||
Add: Net interest expense | 325 | 363 | 405 | 406 | 352 | ||||||||||||||
Add: Loss on extinguishment of debt | 33 | 30 | 10 | 34 | 114 | ||||||||||||||
Add: Income tax expense/(benefit) | (126 | ) | 1 | 9 | 23 | (430 | ) | ||||||||||||
Add: Depreciation and amortization | 570 | 609 | 616 | 631 | 601 | ||||||||||||||
Add: Restructuring and management transition charges | 303 | 26 | 84 | 87 | 215 | ||||||||||||||
Add: Primary pension plan expense/(income) | (11 | ) | 1 | 154 | (1) | (18 | ) | (52 | ) | ||||||||||
Add: Mark-to-market adjustment for supplemental retirement plans | 25 | 11 | — | 12 | (2 | ) | |||||||||||||
Less: Net gain on the sale of non-operating assets | — | (5 | ) | (9 | ) | (25 | ) | (132 | ) | ||||||||||
Less: Proportional share of net income from home office land joint venture | (31 | ) | (28 | ) | (41 | ) | (53 | ) | — | ||||||||||
Less: Certain net gains | — | — | — | (88 | ) | (2) | — | ||||||||||||
Adjusted EBITDA (non-GAAP) | $ | 972 | $ | 1,009 | $ | 715 | $ | 292 | $ | (612 | ) |
(1) | Includes $52 million mark-to-market adjustment. |
(2) | Represents the net gain on the sale of one department store location and the net gain recognized on a payment received from a landlord to terminate an existing lease prior to its original expiration date. |
($ in millions, except per share data) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Net income/(loss) (GAAP) from continuing operations | $ | (116 | ) | $ | 1 | $ | (513 | ) | $ | (717 | ) | $ | (1,278 | ) | ||||||
Diluted EPS (GAAP) from continuing operations | $ | (0.37 | ) | $ | — | $ | (1.68 | ) | $ | (2.35 | ) | $ | (5.13 | ) | ||||||
Add: restructuring and management transition charges | 303 | 26 | 84 | 87 | 215 | |||||||||||||||
Add/(deduct): primary pension plan expense/(income) | (11 | ) | 1 | 154 | (1) | (18 | ) | (52 | ) | |||||||||||
Add: Mark-to-market adjustment for supplemental retirement plans | 25 | 11 | — | 12 | (2 | ) | ||||||||||||||
Add: Loss on extinguishment of debt | 33 | 30 | 10 | 34 | 114 | |||||||||||||||
Less: Net gain on sale or redemption of non-operating assets | — | (5 | ) | (9 | ) | (25 | ) | (132 | ) | |||||||||||
Less: Proportional share of net income from home office land joint venture | (31 | ) | (28 | ) | (41 | ) | (53 | ) | — | |||||||||||
Less: Certain net gains | — | — | — | (88 | ) | (2) | — | |||||||||||||
Less: Aggregate tax impact related to the above adjustments | — | (3) | — | (3) | — | (3) | 2 | (4) | (22 | ) | (5) | |||||||||
Less: Tax impact resulting from other comprehensive income allocation | (60 | ) | (6) | (12 | ) | (6) | — | — | (250 | ) | (6) | |||||||||
Less: Impact of tax reform | (75 | ) | — | — | — | — | ||||||||||||||
Adjusted net income/(loss) (non-GAAP) from continuing operations | $ | 68 | $ | 24 | $ | (315 | ) | $ | (766 | ) | $ | (1,407 | ) | |||||||
Adjusted diluted EPS (non-GAAP) from continuing operations | $ | 0.22 | $ | 0.08 | $ | (1.03 | ) | $ | (2.51 | ) | $ | (5.64 | ) |
(1) | Includes $52 million mark-to-market adjustment. |
(2) | 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. |
(3) | Reflects no tax effect due to the impact of the Company's tax valuation allowance. |
(4) | Tax effect represents state taxes payable in separately filing states related to the sale of assets. |
(5) | 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. |
(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. |
• | Sold our Buena Park, California distribution facility for a net sale price of $131 million and recorded a net gain of $111 million. |
• | We paid $334 million to settle cash tender offers with respect to portions of our outstanding 5.75% Senior Notes due 2018 (2018 Notes) and 8.125% Senior Notes due 2019 (2019 Notes) and amended and restated our $2.35 billion senior secured asset-based revolving credit facility (Revolving Credit Facility) to extend the maturity date to June 20, 2022 and to lower the interest rate spread by 75 basis points. |
($ in millions) | 2017 | 2016 | 2015 | ||||||||
Cash and cash equivalents | $ | 458 | $ | 887 | $ | 900 | |||||
Merchandise inventory | 2,762 | 2,854 | 2,721 | ||||||||
Property and equipment, net | 4,281 | 4,599 | 4,816 | ||||||||
Total debt and other financing obligations (1) | 4,232 | 4,836 | 4,805 | ||||||||
Stockholders’ equity | 1,379 | 1,354 | 1,309 | ||||||||
Total capital | 5,611 | 6,190 | 6,114 | ||||||||
Maximum capacity under our Revolving Credit Facility | 2,350 | 2,350 | 2,350 | ||||||||
Cash flow from operating activities | 454 | 334 | 440 | ||||||||
Free cash flow (non-GAAP) (2) | 213 | 3 | 131 | ||||||||
Capital expenditures | 395 | 427 | 320 | ||||||||
Ratios: | |||||||||||
Debt-to-total capital (3) | 75.4 | % | 78.1 | % | 78.6 | % | |||||
Cash-to-debt (4) | 10.8 | % | 18.3 | % | 18.7 | % |
(1) | 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 below for a discussion of this non-GAAP financial measure and reconciliation to its most directly comparable GAAP financial measure. |
(3) | Total debt and other financing obligations divided by total capital. |
(4) | Cash and cash equivalents divided by total debt. |
($ in millions) | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Net cash provided by/(used in) operating activities (GAAP) | $ | 454 | $ | 334 | $ | 440 | $ | 239 | $ | (1,814 | ) | ||||||||
Less: | |||||||||||||||||||
Capital expenditures | (395 | ) | (427 | ) | (320 | ) | (252 | ) | (951 | ) | |||||||||
Plus: | |||||||||||||||||||
Proceeds from sale of operating assets | 154 | 96 | 11 | 70 | 19 | ||||||||||||||
Free cash flow (non-GAAP) | $ | 213 | $ | 3 | $ | 131 | $ | 57 | $ | (2,746 | ) | ||||||||
Net cash provided by/(used in) investing activities (1) | $ | (229 | ) | $ | (316 | ) | $ | (296 | ) | $ | (142 | ) | $ | (789 | ) | ||||
Net cash provided by/(used in) financing activities | $ | (654 | ) | $ | (31 | ) | $ | (562 | ) | $ | (294 | ) | $ | 3,188 |
(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. |
($ in millions) | 2017 | 2016 | 2015 | ||||||||
Store renewals and updates | $ | 178 | $ | 240 | $ | 170 | |||||
Capitalized software | 123 | 100 | 93 | ||||||||
New and relocated stores | 5 | 17 | — | ||||||||
Technology and other | 89 | 70 | 57 | ||||||||
Total | $ | 395 | $ | 427 | $ | 320 |
Corporate | Outlook | ||
Fitch Ratings | B+ | Stable | |
Moody’s Investors Service, Inc. | B1 | Stable | |
Standard & Poor’s Ratings Services | B+ | Negative |
($ 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 | $ | 4,063 | $ | 232 | $ | 619 | $ | 84 | $ | 3,128 | |||||||||
Capital leases, financing obligation and note payable | 285 | 21 | 40 | 38 | 186 | ||||||||||||||
Unrecognized tax benefits (1) | 35 | 2 | — | — | 33 | ||||||||||||||
Contributions to non-qualified supplemental retirement plans (2) | 156 | 29 | 54 | 29 | 44 | ||||||||||||||
$ | 4,539 | $ | 284 | $ | 713 | $ | 151 | $ | 3,391 | ||||||||||
Unrecorded contractual obligations: | |||||||||||||||||||
Interest payments on long-term debt (3) | $ | 4,653 | $ | 242 | (4) | $ | 442 | $ | 389 | $ | 3,580 | ||||||||
Operating leases (5) | 2,535 | 211 | 356 | 282 | 1,686 | ||||||||||||||
Standby and import letters of credit (6) | 135 | 135 | — | — | — | ||||||||||||||
Surety bonds (7) | 68 | 68 | — | — | — | ||||||||||||||
Contractual obligations (8) | 114 | 74 | 39 | 1 | — | ||||||||||||||
Purchase orders (9) | 1,847 | 1,847 | — | — | — | ||||||||||||||
$ | 9,352 | $ | 2,577 | $ | 837 | $ | 672 | $ | 5,266 | ||||||||||
Total | $ | 13,891 | $ | 2,861 | $ | 1,550 | $ | 823 | $ | 8,657 |
(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 19 to the Consolidated Financial Statements. |
(2) | Represents expected cash payments through 2027. |
(3) | Includes interest expense related to our 2016 Term Loan Facility of $450 million that was calculated using its interest rate as of February 3, 2018 for the anticipated amount outstanding each period, which assumes the required principal payments for the loan remain the same each quarter. |
(4) | Includes $67 million of accrued interest that is included in our Consolidated Balance Sheet at February 3, 2018. |
(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 $135 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 February 3, 2018. |
(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 |
• | 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. |
2017 | 2016 | 2015 | |||||||
Expected return on plan assets | 6.50 | % | 6.75 | % | 6.75 | % | |||
Discount rate for pension expense | 4.40 | % | 4.73 | % | 3.87 | % | |||
Discount rate for pension obligation | 3.98 | % | 4.40 | % | 4.73 | % |
(Unaudited) | 2017 | 2016 | |||||||||||||||||||||
($ in millions, except per share data) | As Reported | Adjustment | As Adjusted | As Reported | Adjustment | As Adjusted | |||||||||||||||||
Total net sales | $ | 12,506 | $ | 48 | $ | 12,554 | $ | 12,547 | $ | 24 | $ | 12,571 | |||||||||||
Credit income and other | — | 319 | 319 | — | 347 | 347 | |||||||||||||||||
Total revenues | $ | 12,506 | $ | 367 | $ | 12,873 | $ | 12,547 | $ | 371 | $ | 12,918 | |||||||||||
Costs and expenses/(income): | |||||||||||||||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 8,174 | 34 | 8,208 | 8,071 | 26 | 8,097 | |||||||||||||||||
Selling, general and administrative (SG&A) | 3,468 | 377 | 3,845 | 3,538 | 418 | 3,956 | |||||||||||||||||
Pension | 21 | (21 | ) | — | 19 | (19 | ) | — | |||||||||||||||
Depreciation and amortization | 570 | — | 570 | 609 | — | 609 | |||||||||||||||||
Real estate and other, net | (146 | ) | — | (146 | ) | (111 | ) | — | (111 | ) | |||||||||||||
Restructuring and management transition | 303 | (119 | ) | 184 | 26 | — | 26 | ||||||||||||||||
Total costs and expenses | 12,390 | 271 | 12,661 | 12,152 | 425 | 12,577 | |||||||||||||||||
Operating income/(loss) | 116 | 96 | 212 | 395 | (54 | ) | 341 | ||||||||||||||||
Other components of net periodic pension cost/(income) | — | 98 | 98 | — | (36 | ) | (36 | ) | |||||||||||||||
Loss on extinguishment of debt | 33 | — | 33 | 30 | — | 30 | |||||||||||||||||
Net interest expense | 325 | — | 325 | 363 | — | 363 | |||||||||||||||||
Income/(loss) before income taxes | (242 | ) | (2 | ) | (244 | ) | 2 | (18 | ) | (16 | ) | ||||||||||||
Income tax expense/(benefit) | (126 | ) | — | (126 | ) | 1 | — | 1 | |||||||||||||||
Net income/(loss) | $ | (116 | ) | $ | (2 | ) | $ | (118 | ) | $ | 1 | $ | (18 | ) | $ | (17 | ) | ||||||
Earnings/(loss) per share: | |||||||||||||||||||||||
Basic | $ | (0.37 | ) | $ | (0.38 | ) | $ | — | $ | (0.06 | ) | ||||||||||||
Diluted | $ | (0.37 | ) | $ | (0.38 | ) | $ | — | $ | (0.06 | ) | ||||||||||||
Weighted average shares – basic | 311.1 | 311.1 | 308.1 | 308.1 | |||||||||||||||||||
Weighted average shares – diluted | 311.1 | 311.1 | 313.0 | 308.1 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
2.1 | 8-K | 001-15274 | 2 | 1/28/2002 | ||||||||
3.1 | 10-Q | 001-15274 | 3.1 | 6/8/2011 | ||||||||
3.2 | 8-K | 001-15274 | 3.1 | 7/21/2016 | ||||||||
3.3 | 8-K | 001-15274 | 3.1 | 8/22/2013 | ||||||||
4.1 | 10-K | 001-00777 | 4(a) | 4/19/1994 | ||||||||
4.2 | 10-K | 001-00777 | 4(b) | 4/19/1994 | ||||||||
4.3 | 10-K | 001-00777 | 4(c) | 4/19/1994 | ||||||||
4.4 | † | |||||||||||
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 | 10-K | 001-15274 | 4(o) | 4/25/2002 | ||||||||
4.7 | 8-K | 001-15274 | 4.1 | 5/24/2013 | ||||||||
4.8 | S-3 | 033-53275 | 4(a) | 4/26/1994 | ||||||||
4.9 | 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 | 10-Q | 001-15274 | 4 | 9/6/2002 | ||||||||
4.11 | 8-K | 001-15274 | 4.1 | 9/15/2014 | ||||||||
4.12 | 8-K | 001-15274 | 4.2 | 9/15/2014 | ||||||||
4.13 | 8-K | 001-15274 | 4.1 | 6/24/2016 | ||||||||
4.14 | 8-K | 001-15274 | 4.1 | 6/14/2011 | ||||||||
4.15 | 8-K | 001-15274 | 4.2 | 6/14/2011 | ||||||||
4.16 | 8-K | 001-15274 | 4.1 | 1/28/2014 | ||||||||
4.17 | 8-K | 001-15274 | 4.1 | 1/23/2017 | ||||||||
10.1 | 8-K | 001-15274 | 10.1 | 6/23/2014 | ||||||||
10.2 | 8-K | 001-15274 | 10.1 | 12/11/2015 | ||||||||
10.3 | 8-K | 001-15274 | 10.1 | 6/21/2017 | ||||||||
10.4 | 8-K | 001-15274 | 10.2 | 6/23/2014 | ||||||||
10.5 | 8-K | 001-15274 | 10.1 | 6/24/2016 | ||||||||
10.6 | 8-K | 001-15274 | 10.2 | 6/24/2016 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
10.7 | 8-K | 001-15274 | 10.3 | 6/24/2016 | ||||||||
10.8 | 8-K | 001-15274 | 10.4 | 6/24/2016 | ||||||||
10.9 | 8-K | 001-15274 | 10.1 | 11/6/2009 | ||||||||
10.10 | 8-K | 001-15274 | 10.1 | 10/29/2010 | ||||||||
10.11 | 8-K | 001-15274 | 10.1 | 2/4/2013 | ||||||||
10.12 | 8-K | 001-15274 | 10.1 | 10/15/2013 | ||||||||
10.13 | 10-Q | 001-15274 | 10.1 | 6/3/2014 | ||||||||
10.14 | 10-Q | 001-15274 | 10.1 | 6/4/2015 | ||||||||
10.15 | 10-K | 001-15274 | 10.14 | 3/16/2016 | ||||||||
10.16 | 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) | ||||||
10.17 | 10-K | 001-15274 | 10.16 | 3/24/2017 | ||||||||
10.18 | 10-Q | 001-15274 | 10.2 | 8/30/2017 | ||||||||
10.19** | J. C. Penney Company, Inc. Directors’ Equity Program Tandem Restricted Stock Award/Stock Option Plan | 10-K | 001-00777 | 10(k) | 4/24/1989 | |||||||
10.20** | J. C. Penney Company, Inc. 1993 Non-Associate Directors’ Equity Plan | Def. Proxy Stmt. | 001-00777 | B | 4/20/1993 | |||||||
10.21** | 10-K | 001-00777 | 10(ii)(m) | 4/18/1995 | ||||||||
10.22** | Directors’ Charitable Award Program | 10-K | 001-00777 | 10(r) | 4/25/1990 | |||||||
10.23** | Def. Proxy Stmt. | 001-00777 | A | 4/11/1997 | ||||||||
10.24** | Def. Proxy Stmt. | 001-00777 | B | 4/11/2001 | ||||||||
10.25** | 10-K | 001-15274 | 10.65 | 3/31/2009 | ||||||||
10.26** | Def. Proxy Stmt. | 001-15274 | Annex A | 3/31/2009 | ||||||||
10.27** | Def. Proxy Stmt. | 001-15274 | Annex A | 3/28/2012 | ||||||||
10.28** | Def. Proxy Stmt. | 001-15274 | Annex A | 3/21/2014 | ||||||||
10.29** | Def. Proxy Stmt. | 001-15274 | Annex A | 3/23/2016 | ||||||||
10.30** | 10-Q | 001-15274 | 10.1 | 9/12/2007 | ||||||||
10.31** | 8-K | 001-15274 | 10.5 | 2/15/2005 | ||||||||
10.32** | 8-K | 001-15274 | 10.1 | 5/24/2005 | ||||||||
10.33** | 8-K | 001-15274 | 10.1 | 11/18/2005 | ||||||||
10.34** | 8-K | 001-15274 | 10.1 | 9/26/2007 | ||||||||
10.35** | 10-Q | 001-15274 | 10.3 | 12/5/2013 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
10.36** | 8-K | 001-15274 | 10.2 | 5/21/2015 | ||||||||
10.37** | 10-K | 001-15274 | 10.33 | 3/16/2016 | ||||||||
10.38** | 8-K | 001-15274 | 10.1 | 5/19/2006 | ||||||||
10.39** | 8-K | 001-15274 | 10.2 | 5/19/2006 | ||||||||
10.40** | 8-K | 001-15274 | 10.8 | 2/15/2005 | ||||||||
10.41** | 8-K | 001-15274 | 10.3 | 5/19/2006 | ||||||||
10.42** | 8-K | 001-15274 | 10.4 | 5/19/2006 | ||||||||
10.43** | 8-K | 001-15274 | 10.1 | 3/15/2007 | ||||||||
10.44** | 8-K | 001-15274 | 10.1 | 3/7/2008 | ||||||||
10.45** | 10-K | 001-15274 | 10.60 | 3/31/2009 | ||||||||
10.46** | 8-K | 001-15274 | 10.1 | 6/14/2011 | ||||||||
10.47** | † | |||||||||||
10.48** | 10-K | 001-15274 | 10.53 | 3/31/2009 | ||||||||
10.49** | 10-Q | 001-15274 | 10.2 | 9/10/2008 | ||||||||
10.50** | 10-Q | 001-15274 | 10.1 | 11/30/2016 | ||||||||
10.51** | 10-K | 001-15274 | 10(ii)(ab) | 4/25/2002 | ||||||||
10.52** | 10-K | 001-15274 | 10.56 | 3/31/2009 | ||||||||
10.53** | 10-K | 001-15274 | 10.61 | 3/31/2009 | ||||||||
10.54** | 10-K | 001-15274 | 10.62 | 3/31/2009 | ||||||||
10.55** | 10-Q | 001-15274 | 10.2 | 9/9/2009 | ||||||||
10.56** | 10-Q | 001-15274 | 10.4 | 9/9/2009 | ||||||||
10.57** | 10-K | 001-15274 | 10.55 | 3/24/2017 | ||||||||
10.58** | 8-K | 001-15274 | 10.2 | 10/14/2014 | ||||||||
10.59** | 10-K | 001-15274 | 10.80 | 3/20/2013 |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
10.60** | 10-K | 001-15274 | 10.82 | 3/20/2013 | ||||||||
10.61** | 8-K | 001-15274 | 10.1 | 3/24/2014 | ||||||||
10.62** | 8-K | 001-15274 | 10.2 | 3/24/2014 | ||||||||
10.63** | 10-Q | 001-15274 | 10.3 | 6/4/2015 | ||||||||
10.64** | 10-Q | 001-15274 | 10.4 | 6/4/2015 | ||||||||
10.65** | 10-Q | 001-15274 | 10.5 | 6/4/2015 | ||||||||
10.66** | 10-Q | 001-15274 | 10.6 | 6/4/2015 | ||||||||
10.67** | 10-K | 001-15274 | 10.71 | 3/16/2016 | ||||||||
10.68** | 10-K | 001-15274 | 10.72 | 3/16/2016 | ||||||||
10.69** | 10-K | 001-15274 | 10.73 | 3/16/2016 | ||||||||
10.70** | 10-K | 001-15274 | 10.74 | 3/16/2016 | ||||||||
10.71** | 10-Q | 001-15274 | 10.1 | 5/31/2016 | ||||||||
10.72** | 10-Q | 001-15274 | 10.2 | 8/30/2016 | ||||||||
10.73** | 10-Q | 001-15274 | 10.1 | 06/7/2017 | ||||||||
10.74** | 10-Q | 001-15274 | 10.2 | 06/7/2017 | ||||||||
10.75** | 10-Q | 001-15274 | 10.3 | 06/7/2017 | ||||||||
10.76** | 8-K | 001-15274 | 10.1 | 7/24/2017 | ||||||||
12 | † | |||||||||||
21 | † | |||||||||||
23 | † | |||||||||||
24 | † | |||||||||||
31.1 | † | |||||||||||
31.2 | † | |||||||||||
32.1 | † | |||||||||||
32.2 | † | |||||||||||
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 | † |
Incorporated by Reference | ||||||||||||
Filed | ||||||||||||
SEC | Filing | Herewith (†) | ||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Exhibit | Date | (as indicated) | ||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | † | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | † |
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: | May 30, 2018 |
Signatures | Title | Date | ||
Marvin R. Ellison* | Chief Executive Officer; Director (principal executive officer) | May 30, 2018 | ||
Marvin R. Ellison | ||||
Jeffrey A. Davis* | Executive Vice President and Chief Financial Officer (principal financial officer) | May 30, 2018 | ||
Jeffrey A. Davis | ||||
/s/ Andrew S. Drexler | Senior Vice President, Chief Accounting Officer and Controller (principal accounting officer) | May 30, 2018 | ||
Andrew S. Drexler | ||||
Paul J. Brown* | Director | May 30, 2018 | ||
Paul J. Brown | ||||
Amanda Ginsberg* | Director | May 30, 2018 | ||
Amanda Ginsberg | ||||
Wonya Y. Lucas* | Director | May 30, 2018 | ||
Wonya Y. Lucas | ||||
B. Craig Owens* | Director | May 30, 2018 | ||
Craig Owens | ||||
Lisa A. Payne* | Director | May 30, 2018 | ||
Lisa A. Payne | ||||
Debora A. Plunkett* | Director | May 30, 2018 | ||
Debora A. Plunkett |
Signatures | Title | Date | ||
Leonard H. Roberts* | Director | May 30, 2018 | ||
Leonard H. Roberts | ||||
Javier G. Teruel* | Director | May 30, 2018 | ||
Javier G. Teruel | ||||
R. Gerald Turner* | Director | May 30, 2018 | ||
R. Gerald Turner | ||||
Ronald W. Tysoe* | Chairman of the Board; Director | May 30, 2018 | ||
Ronald W. Tysoe |
*By: | /s/ Andrew S. Drexler | |
Andrew S. Drexler | ||
Attorney-in-fact |
Page | |
(In millions, except per share data) | 2017 | 2016 | 2015 | |||||||||
Total net sales | $ | 12,506 | $ | 12,547 | $ | 12,625 | ||||||
Costs and expenses/(income): | ||||||||||||
Cost of goods sold (exclusive of depreciation and amortization shown separately below) | 8,174 | 8,071 | 8,074 | |||||||||
Selling, general and administrative (SG&A) | 3,468 | 3,538 | 3,775 | |||||||||
Pension | 21 | 19 | 162 | |||||||||
Depreciation and amortization | 570 | 609 | 616 | |||||||||
Real estate and other, net | (146 | ) | (111 | ) | 3 | |||||||
Restructuring and management transition | 303 | 26 | 84 | |||||||||
Total costs and expenses | 12,390 | 12,152 | 12,714 | |||||||||
Operating income/(loss) | 116 | 395 | (89 | ) | ||||||||
Loss on extinguishment of debt | 33 | 30 | 10 | |||||||||
Net interest expense | 325 | 363 | 405 | |||||||||
Income/(loss) before income taxes | (242 | ) | 2 | (504 | ) | |||||||
Income tax expense/(benefit) | (126 | ) | 1 | 9 | ||||||||
Net income/(loss) | $ | (116 | ) | $ | 1 | $ | (513 | ) | ||||
Earnings/(loss) per share: | ||||||||||||
Basic | $ | (0.37 | ) | $ | — | $ | (1.68 | ) | ||||
Diluted | (0.37 | ) | — | (1.68 | ) | |||||||
Weighted average shares – basic | 311.1 | 308.1 | 305.9 | |||||||||
Weighted average shares – diluted | 311.1 | 313.0 | 305.9 |
($ in millions) | 2017 | 2016 | 2015 | |||||||||
Net income/(loss) | $ | (116 | ) | $ | 1 | $ | (513 | ) | ||||
Other comprehensive income/(loss), net of tax: | ||||||||||||
Retirement benefit plans | ||||||||||||
Net actuarial gain/(loss) arising during the period (1) | 67 | 1 | (213 | ) | ||||||||
Prior service credit/(cost) arising during the period (2) | — | 5 | — | |||||||||
Reclassification of net actuarial (gain)/loss from a settlement (3) | 8 | — | 110 | |||||||||
Reclassification for net actuarial (gain)/loss (4) | 16 | 1 | 31 | |||||||||
Reclassification for amortization of prior service (credit)/cost (5) | 4 | — | 2 | |||||||||
Reclassification of prior service (credit)/cost from a curtailment (6) | 3 | — | — | |||||||||
Cash flow hedges | ||||||||||||
Gain/(loss) on interest rate swaps (7) | 6 | 3 | (23 | ) | ||||||||
Reclassification for periodic settlements (8) | 7 | 8 | 6 | |||||||||
Foreign currency translation | ||||||||||||
Unrealized gain/(loss) | 2 | — | — | |||||||||
Deferred tax valuation allowance | — | — | (54 | ) | ||||||||
Total other comprehensive income/(loss), net of tax | 113 | 18 | (141 | ) | ||||||||
Total comprehensive income/(loss), net of tax | $ | (3 | ) | $ | 19 | $ | (654 | ) |
(1) | Net of $(36) million in tax in 2017, $(1) million in tax in 2016 and $136 million in tax in 2015. For 2017, the amount includes a |
(2) | Net of $0 million in tax in 2017, $(3) million in tax in 2016 and $0 million in tax in 2015. |
(3) | Net of $(5) million and $(70) million in tax in 2017 and 2015, respectively. Pre-tax amounts of $13 million and $180 million were recognized in Pension in the Consolidated Statement of Operations in 2017 and 2015, respectively. |
(4) | Net of $(9) million in tax in 2017, $(1) million in tax in 2016 and $(22) million in tax in 2015. Pre-tax amounts of $25 million in 2017, $11 million in 2016 and $53 million in 2015 were recognized in Pension in the Consolidated Statement of Operations. Pre-tax amount of $(9) million in 2016 was recognized in SG&A in the Consolidated Statement of Operations. |
(5) | Net of $(3) million of tax in 2017, $0 million of tax in 2016 and $(1) million of tax in 2015. Pre-tax amounts of $7 million in 2017, $8 million in 2016 and $8 million in 2015 were recognized in Pension in the Consolidated Statement of Operations. Pre-tax amounts of $(8) million in 2016 and $(7) million in 2015 were recognized in SG&A in the Consolidated Statement of Operations. |
(6) | Net of $(1) million in tax in 2017. Pre-tax prior service cost of $5 million related to the curtailment is included in Restructuring and management transition in the Consolidated Statements of Operations in 2017. |
(7) | Net of $(3) million, $(2) million and $15 million of tax in 2017, 2016 and 2015, respectively. |
(8) | Net of $(3) million, $(5) million and $(4) million of tax in 2017, 2016 and 2015, respectively. Pre-tax amounts of $10 million in 2017, $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) | 2017 | 2016 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash in banks and in transit | $ | 116 | $ | 125 | ||||
Cash short-term investments | 342 | 762 | ||||||
Cash and cash equivalents | 458 | 887 | ||||||
Merchandise inventory | 2,762 | 2,854 | ||||||
Prepaid expenses and other | 190 | 160 | ||||||
Total current assets | 3,410 | 3,901 | ||||||
Property and equipment | 4,281 | 4,599 | ||||||
Prepaid pension | 61 | — | ||||||
Other assets | 661 | 618 | ||||||
Total Assets | $ | 8,413 | $ | 9,118 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Merchandise accounts payable | $ | 973 | $ | 977 | ||||
Other accounts payable and accrued expenses | 1,119 | 1,164 | ||||||
Current portion of capital leases, financing obligation and note payable | 8 | 15 | ||||||
Current maturities of long-term debt | 232 | 263 | ||||||
Total current liabilities | 2,332 | 2,419 | ||||||
Long-term capital leases, financing obligation and note payable | 212 | 219 | ||||||
Long-term debt | 3,780 | 4,339 | ||||||
Deferred taxes | 143 | 204 | ||||||
Other liabilities | 567 | 583 | ||||||
Total Liabilities | 7,034 | 7,764 | ||||||
Stockholders' Equity | ||||||||
Common stock (1) | 156 | 154 | ||||||
Additional paid-in capital | 4,705 | 4,679 | ||||||
Reinvested earnings/(accumulated deficit) | (3,122 | ) | (3,006 | ) | ||||
Accumulated other comprehensive income/(loss) | (360 | ) | (473 | ) | ||||
Total Stockholders’ Equity | 1,379 | 1,354 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 8,413 | $ | 9,118 |
(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 312.0 million and 308.3 million as of February 3, 2018 and January 28, 2017, 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 | |||||||||||||||||
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 | ||||||||||
Net income/(loss) | — | — | — | (116 | ) | — | (116 | ) | |||||||||||||||
Other comprehensive income/(loss) | — | — | — | — | 113 | 113 | |||||||||||||||||
Stock-based compensation and other | 3.7 | 2 | 26 | — | — | 28 | |||||||||||||||||
February 3, 2018 | 312.0 | $ | 156 | $ | 4,705 | $ | (3,122 | ) | $ | (360 | ) | $ | 1,379 |
($ in millions) | 2017 | 2016 | 2015 | ||||||||
Cash flows from operating activities | |||||||||||
Net income/(loss) | $ | (116 | ) | $ | 1 | $ | (513 | ) | |||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||||||||
Restructuring and management transition | 74 | (1 | ) | 10 | |||||||
Asset impairments and other charges | 6 | 3 | 25 | ||||||||
Net gain on sale of non-operating assets | — | (5 | ) | (9 | ) | ||||||
Net gain on sale of operating assets | (119 | ) | (73 | ) | (9 | ) | |||||
Loss on extinguishment of debt | 33 | 30 | 10 | ||||||||
Depreciation and amortization | 570 | 609 | 616 | ||||||||
Benefit plans | 106 | (39 | ) | 127 | |||||||
Stock-based compensation | 25 | 35 | 44 | ||||||||
Other comprehensive income tax benefits | (60 | ) | (12 | ) | — | ||||||
Deferred taxes | (63 | ) | 9 | — | |||||||
Change in cash from: | |||||||||||
Inventory | 92 | (133 | ) | (69 | ) | ||||||
Prepaid expenses and other assets | (15 | ) | 11 | 19 | |||||||
Merchandise accounts payable | (4 | ) | 52 | (72 | ) | ||||||
Income taxes | (12 | ) | (6 | ) | 4 | ||||||
Accrued expenses and other | (63 | ) | (147 | ) | 257 | ||||||
Net cash provided by/(used in) operating activities | 454 | 334 | 440 | ||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures | (395 | ) | (427 | ) | (320 | ) | |||||
Proceeds from sale of non-operating assets | — | 2 | 13 | ||||||||
Proceeds from sale of operating assets | 154 | 96 | 11 | ||||||||
Joint venture return of investment | 9 | 13 | — | ||||||||
Insurance proceeds received for damage to property and equipment | 3 | — | — | ||||||||
Net cash provided by/(used in) investing activities | (229 | ) | (316 | ) | (296 | ) | |||||
Cash flows from financing activities | |||||||||||
Proceeds from issuance of long-term debt | — | 2,188 | — | ||||||||
Proceeds from borrowings under the credit facility | 804 | 667 | — | ||||||||
Payments of borrowings under the credit facility | (804 | ) | (667 | ) | — | ||||||
Net proceeds from financing obligation | — | 216 | — | ||||||||
Premium on early retirement of debt | (30 | ) | — | — | |||||||
Payments of capital leases, financing obligation and note payable | (16 | ) | (29 | ) | (33 | ) | |||||
Payments of long-term debt | (599 | ) | (2,349 | ) | (520 | ) | |||||
Financing costs | (9 | ) | (49 | ) | (4 | ) | |||||
Proceeds from stock issued under stock plans | 5 | 2 | — | ||||||||
Tax withholding payments for vested restricted stock | (5 | ) | (10 | ) | (5 | ) | |||||
Net cash provided by/(used in) financing activities | (654 | ) | (31 | ) | (562 | ) | |||||
Net increase/(decrease) in cash and cash equivalents | (429 | ) | (13 | ) | (418 | ) | |||||
Cash and cash equivalents at beginning of period | 887 | 900 | 1,318 | ||||||||
Cash and cash equivalents at end of period | $ | 458 | $ | 887 | $ | 900 |
Fiscal Year | Ended | Weeks | ||
2017 | February 3, 2018 | 53 | ||
2016 | January 28, 2017 | 52 | ||
2015 | January 30, 2016 | 52 |
2017 | 2016 | 2015 | |||||||
Women’s apparel | 22 | % | 23 | % | 25 | % | |||
Men’s apparel and accessories | 21 | % | 22 | % | 22 | % | |||
Home | 15 | % | 13 | % | 12 | % | |||
Women’s accessories, including Sephora | 13 | % | 13 | % | 12 | % | |||
Children’s apparel | 9 | % | 10 | % | 10 | % | |||
Footwear and handbags | 8 | % | 8 | % | 8 | % | |||
Jewelry | 6 | % | 6 | % | 6 | % | |||
Services and other | 6 | % | 5 | % | 5 | % | |||
100 | % | 100 | % | 100 | % |
Estimated Useful Lives | ||||||||||
($ in millions) | (Years) | 2017 | 2016 | |||||||
Land | N/A | $ | 245 | $ | 249 | |||||
Buildings | 50 | 4,750 | 4,859 | |||||||
Furniture and equipment | 3-20 | 1,603 | 1,963 | |||||||
Leasehold improvements (1) | 1,068 | 1,254 | ||||||||
Capital leases (equipment) | 3-5 | 115 | 116 | |||||||
Accumulated depreciation | (3,500 | ) | (3,842 | ) | ||||||
Property and equipment, net | $ | 4,281 | $ | 4,599 |
(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. |
• | 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) | 2017 | 2016 | 2015 | |||||||||
Earnings/(loss) | ||||||||||||
Net income/(loss) | $ | (116 | ) | $ | 1 | $ | (513 | ) | ||||
Shares | ||||||||||||
Weighted average common shares outstanding (basic shares) | 311.1 | 308.1 | 305.9 | |||||||||
Adjustment for assumed dilution: | ||||||||||||
Stock options and restricted stock awards | — | 4.9 | — | |||||||||
Weighted average shares assuming dilution (diluted shares) | 311.1 | 313.0 | 305.9 | |||||||||
EPS | ||||||||||||
Basic | $ | (0.37 | ) | $ | — | $ | (1.68 | ) | ||||
Diluted | $ | (0.37 | ) | $ | — | $ | (1.68 | ) |
(Shares in millions) | 2017 | 2016 | 2015 | ||||||
Stock options, restricted stock awards and a warrant | 31.5 | 17.8 | 34.1 |
($ in millions) | 2017 | 2016 | |||||
Capitalized software, net | $ | 300 | $ | 265 | |||
Indefinite-lived intangible assets, net (1) | 275 | 275 | |||||
Revolving credit facility unamortized costs, net | 28 | 30 | |||||
Interest rate swaps (Notes 9 and 10) | 9 | — | |||||
Realty investments (Note 18) | 5 | 13 | |||||
Other | 44 | 35 | |||||
Total | $ | 661 | $ | 618 |
($ in millions) | 2017 | 2016 | ||||||
Accrued salaries, vacation and bonus | $ | 193 | $ | 204 | ||||
Customer gift cards | 203 | 215 | ||||||
Taxes other than income taxes | 102 | 127 | ||||||
Occupancy and rent-related | 28 | 35 | ||||||
Interest | 67 | 78 | ||||||
Advertising | 77 | 82 | ||||||
Current portion of workers’ compensation and general liability self-insurance | 44 | 47 | ||||||
Restructuring and management transition (Note 17) | 26 | 29 | ||||||
Current portion of retirement plan liabilities (Note 16) | 29 | 26 | ||||||
Capital expenditures | 58 | 33 | ||||||
Other | 292 | 288 | ||||||
Total | $ | 1,119 | $ | 1,164 |
($ in millions) | 2017 | 2016 | ||||||
Supplemental pension and other postretirement benefit plan liabilities (Note 16) | $ | 153 | $ | 126 | ||||
Long-term portion of workers’ compensation and general liability insurance | 121 | 131 | ||||||
Deferred developer/tenant allowances | 139 | 143 | ||||||
Deferred rent liability | 97 | 97 | ||||||
Primary pension plan (Note 16) | — | 18 | ||||||
Interest rate swaps (Notes 9 and 10) | — | 10 | ||||||
Restructuring and management transition (Note 17) | 15 | 2 | ||||||
Other | 42 | 56 | ||||||
Total | $ | 567 | $ | 583 |
($ in millions) | 2017 | 2016 | Line Item in the Financial Statements | ||||||
Gain/(loss) recognized in other comprehensive income/(loss) | $ | 9 | $ | 5 | Accumulated other comprehensive income | ||||
Gain/(loss) recognized in net income/(loss) | (10 | ) | (13 | ) | Interest expense |
Asset Derivatives at Fair Value | Liability Derivatives at Fair Value | |||||||||||||||||
($ in millions) | Balance Sheet Location | 2017 | 2016 | Balance Sheet Location | 2017 | 2016 | ||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||
Interest rate swaps | N/A | $ | — | $ | — | Other accounts payable and accrued expenses | $ | 1 | $ | 2 | ||||||||
Interest rate swaps | Other assets | 9 | — | Other liabilities | — | 10 | ||||||||||||
Total derivatives designated as hedging instruments | $ | 9 | $ | — | $ | 1 | $ | 12 |
• | 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 February 3, 2018 | As of January 28, 2017 | |||||||||||||||
($ in millions) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Total debt, excluding unamortized debt issuance costs, capital leases, financing obligation and notes payable | $ | 4,063 | $ | 3,607 | $ | 4,665 | $ | 4,495 |
($ in millions) | 2017 | 2016 | ||||||
Issue: | ||||||||
7.95% Debentures Due 2017 | $ | — | $ | 220 | ||||
5.75% Senior Notes Due 2018 (1) | 190 | 265 | ||||||
8.125% Senior Notes Due 2019 | 175 | 400 | ||||||
5.65% Senior Notes Due 2020 (1) | 360 | 400 | ||||||
2016 Term Loan Facility (Matures in 2023) | 1,625 | 1,667 | ||||||
5.875% Senior Secured Notes Due 2023 (1) | 500 | 500 | ||||||
7.125% Debentures Due 2023 | 10 | 10 | ||||||
6.9% Notes Due 2026 | 2 | 2 | ||||||
6.375% Senior Notes Due 2036 (1) | 388 | 388 | ||||||
7.4% Debentures Due 2037 | 313 | 313 | ||||||
7.625% Notes Due 2097 | 500 | 500 | ||||||
Total debt | 4,063 | 4,665 | ||||||
Unamortized debt issuance costs | (51 | ) | (63 | ) | ||||
Less: current maturities | (232 | ) | (263 | ) | ||||
Total long-term debt | $ | 3,780 | $ | 4,339 | ||||
Weighted-average interest rate at year end | 6.1 | % | 6.3 | % | ||||
Weighted-average maturity (in years) | 16 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) | |||
2018 | $ | 232 | |
2019 | 217 | ||
2020 | 402 | ||
2021 | 42 | ||
2022 | 42 | ||
Thereafter | 3,128 | ||
Total | $ | 4,063 |
($ 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 30, 2016 | $ | (423 | ) | $ | (38 | ) | $ | (2 | ) | $ | (28 | ) | $ | (491 | ) | |||||
Current period change | 2 | 5 | — | 11 | 18 | |||||||||||||||
January 28, 2017 | $ | (421 | ) | $ | (33 | ) | $ | (2 | ) | $ | (17 | ) | $ | (473 | ) | |||||
Current period change | 91 | 7 | 2 | 13 | 113 | |||||||||||||||
February 3, 2018 | $ | (330 | ) | $ | (26 | ) | $ | — | $ | (4 | ) | $ | (360 | ) |
($ in millions) | 2017 | 2016 | 2015 | ||||||||
Stock awards | $ | 18 | $ | 27 | $ | 32 | |||||
Stock options | 7 | 8 | 12 | ||||||||
Total stock-based compensation (1) | $ | 25 | $ | 35 | $ | 44 | |||||
Total income tax benefit recognized for stock-based compensation arrangements | $ | — | $ | — | $ | — |
(1) | Excludes $2 million, $0 million and $9 million for 2017, 2016 and 2015, respectively, of stock-based compensation costs reported in restructuring and management transition charges (Note 17). |
Shares (in thousands) | Weighted - Average Exercise Price Per Share | Weighted - Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value ($ in millions) (1) | ||||||||||
Outstanding at January 28, 2017 | 14,418 | $ | 18 | ||||||||||
Granted | 3,318 | 6 | |||||||||||
Exercised | — | — | |||||||||||
Forfeited/canceled | (3,461 | ) | 24 | ||||||||||
Outstanding at February 3, 2018 | 14,275 | 14 | 5.5 | $ | — | ||||||||
Exercisable at February 3, 2018 | 7,446 | 19 | 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) | 2017 | 2016 | 2015 | |||||||||
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 | — | — | — |
2017 | 2016 | 2015 | ||||
Weighted-average expected option term | 4.6 years | 4.7 years | 4.6 years | |||
Weighted-average expected volatility | 57.90% | 54.22% | 51.46% | |||
Weighted-average risk-free interest rate | 2.02% | 1.38% | 1.50% | |||
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 28, 2017 | 5,818 | $ | 9 | 3,128 | $ | 8 | |||||||
Granted | 2,859 | 6 | 1,727 | 6 | |||||||||
Vested | (3,218 | ) | 8 | (262 | ) | 6 | |||||||
Forfeited/canceled | (1,011 | ) | 8 | (659 | ) | 8 | |||||||
Non-vested at February 3, 2018 | 4,448 | 7 | 3,934 | 7 |
($ in millions) | 2017 | 2016 | 2015 | |||||||||
Real property base rent and straight-lined step rent expense | $ | 177 | $ | 214 | $ | 221 | ||||||
Real property contingent rent expense (based on sales) | 8 | 7 | 7 | |||||||||
Personal property rent expense | 29 | 31 | 39 | |||||||||
Total rent expense | $ | 214 | $ | 252 | $ | 267 | ||||||
Less: sublease income (1) | (11 | ) | (11 | ) | (11 | ) | ||||||
Net rent expense | $ | 203 | $ | 241 | $ | 256 |
(1) | Sublease income is reported in Real estate and other, net. |
($ in millions) | |||
2018 | $ | 211 | |
2019 | 187 | ||
2020 | 169 | ||
2021 | 150 | ||
2022 | 132 | ||
Thereafter | 1,686 | ||
Less: sublease income | (51 | ) | |
Total minimum lease payments | $ | 2,484 |
($ in millions) | |||
2018 | $ | 21 | |
2019 | 21 | ||
2020 | 19 | ||
2021 | 19 | ||
2022 | 19 | ||
Thereafter | 186 | ||
Total payments | 285 | ||
Plus: amount representing residual asset balance | 77 | ||
Less: amounts representing interest | (142 | ) | |
Present value of net minimum lease obligations, financing obligation and note payable | $ | 220 |
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 | 2017 | 2016 | 2015 | |||||||||
Service cost | $ | 42 | $ | 55 | $ | 69 | ||||||
Interest cost | 143 | 153 | 196 | |||||||||
Expected return on plan assets | (216 | ) | (215 | ) | (357 | ) | ||||||
Actuarial loss/(gain) | — | — | 52 | |||||||||
Amortization of prior service cost/(credit) | 7 | 8 | 8 | |||||||||
Settlement expense | 13 | — | 180 | |||||||||
Other | — | — | 6 | |||||||||
Net periodic benefit expense/(income) | $ | (11 | ) | $ | 1 | $ | 154 | |||||
Supplemental Pension Plans | ||||||||||||
Service cost | $ | — | $ | — | $ | — | ||||||
Interest cost | 7 | 7 | 7 | |||||||||
Actuarial loss/(gain) | 25 | 11 | 1 | |||||||||
Amortization of prior service cost/(credit) | — | — | — | |||||||||
Net periodic benefit expense/(income) | $ | 32 | $ | 18 | $ | 8 | ||||||
Primary and Supplemental Pension Plans Total | ||||||||||||
Service cost | $ | 42 | $ | 55 | $ | 69 | ||||||
Interest cost | 150 | 160 | 203 | |||||||||
Expected return on plan assets | (216 | ) | (215 | ) | (357 | ) | ||||||
Actuarial loss/(gain) | 25 | 11 | 53 | |||||||||
Amortization of prior service cost/(credit) | 7 | 8 | 8 | |||||||||
Settlement expense | 13 | — | 180 | |||||||||
Other | — | — | 6 | |||||||||
Net periodic benefit expense/(income) | $ | 21 | $ | 19 | $ | 162 |
2017 | 2016 | 2015 | |||||||
Expected return on plan assets | 6.50 | % | 6.75 | % | 6.75 | % | |||
Discount rate | 4.40 | % | (1) | 4.73 | % | 3.87 | % | ||
Salary increase | 3.9 | % | 3.9 | % | 3.5 | % |
(1) | As of January 31, 2017. The Primary Pension Plan was remeasured as of March 31, 2017 using a discount rate of 4.34% and as of October 31, 2017 using a discount rate of 3.94%. |
Primary Pension Plan | Supplemental Plans | |||||||||||||||
($ in millions) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Change in PBO | ||||||||||||||||
Beginning balance | $ | 3,473 | $ | 3,327 | $ | 152 | $ | 176 | ||||||||
Service cost | 42 | 55 | — | — | ||||||||||||
Interest cost | 143 | 153 | 7 | 7 | ||||||||||||
Special termination benefits (1) | 88 | — | 24 | — | ||||||||||||
Settlements | (217 | ) | — | — | — | |||||||||||
Curtailments | (27 | ) | — | 3 | — | |||||||||||
Actuarial loss/(gain) | 126 | 151 | 31 | 10 | ||||||||||||
Benefits (paid) | (161 | ) | (213 | ) | (35 | ) | (41 | ) | ||||||||
Balance at measurement date | $ | 3,467 | $ | 3,473 | $ | 182 | $ | 152 | ||||||||
Change in fair value of plan assets | ||||||||||||||||
Beginning balance | $ | 3,455 | $ | 3,287 | $ | — | $ | — | ||||||||
Company contributions | — | — | 35 | 41 | ||||||||||||
Actual return on assets (2) | 451 | 381 | — | — | ||||||||||||
Settlements | (217 | ) | — | — | — | |||||||||||
Benefits (paid) | (161 | ) | (213 | ) | (35 | ) | (41 | ) | ||||||||
Balance at measurement date | $ | 3,528 | $ | 3,455 | $ | — | $ | — | ||||||||
Funded status of the plan | $ | 61 | (3) | $ | (18 | ) | (3) | $ | (182 | ) | (4) | $ | (152 | ) | (4) |
(1) | See Note 17 for VERP charges classified in Restructuring and management transition. |
(2) | Includes plan administrative expenses. |
(3) | $61 million in 2017 was included in Prepaid pension and $18 million in 2016 was included in Other liabilities in the Consolidated Balance Sheets. |
(4) | $29 million in 2017 and $26 million in 2016 were included in Other accounts payable and accrued expenses on the Consolidated Balance Sheets, and the remaining amounts were included in Other liabilities. |
Primary Pension Plan | Supplemental Plans | ||||||||||||||
($ in millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net actuarial loss/(gain) | $ | 169 | $ | 318 | $ | 18 | $ | 12 | |||||||
Prior service cost/(credit) | 37 | 49 | (3 | ) | (4 | ) | |||||||||
Total | $ | 206 | (1) | $ | 367 | $ | 15 | $ | 8 |
(1) | In 2018, approximately $7 million for the Primary Pension Plan is expected to be amortized from Accumulated other comprehensive income/(loss) and into the Consolidated Statement of Operations. |
2017 | 2016 | 2015 | |||||||
Discount rate | 3.98 | % | 4.40 | % | 4.73 | % | |||
Salary progression rate | 3.8 | % | 3.9 | % | 3.9 | % |
2017 Target | Plan Assets | |||||||
Asset Class | Allocation Ranges | 2017 | 2016 | |||||
Equity | 15% - 35% | 23 | % | 22 | % | |||
Fixed income | 55% - 70% | 62 | % | 60 | % | |||
Real estate, cash and other investments | 10% - 20% | 15 | % | 18 | % | |||
Total | 100 | % | 100 | % |
Investments at Fair Value at February 3, 2018 | ||||||||||||||||
($ in millions) | Level 1 (1) | Level 2 (1) | Level 3 | Total | ||||||||||||
Assets | ||||||||||||||||
Cash | $ | 18 | $ | — | $ | — | $ | 18 | ||||||||
Common collective trusts | — | 100 | — | 100 | ||||||||||||
Cash and cash equivalents total | 18 | 100 | — | 118 | ||||||||||||
Common collective trusts – international | — | 155 | — | 155 | ||||||||||||
Equity securities – domestic | 426 | — | — | 426 | ||||||||||||
Equity securities – international | 160 | — | — | 160 | ||||||||||||
Equity securities total | 586 | 155 | — | 741 | ||||||||||||
Common collective trusts | — | 904 | — | 904 | ||||||||||||
Corporate bonds | — | 982 | 10 | 992 | ||||||||||||
Swaps | — | 848 | — | 848 | ||||||||||||
Government securities | — | 187 | — | 187 | ||||||||||||
Mortgage backed securities | — | 6 | — | 6 | ||||||||||||
Other fixed income | — | 143 | 4 | 147 | ||||||||||||
Fixed income total | — | 3,070 | 14 | 3,084 | ||||||||||||
Public REITs | 38 | — | — | 38 | ||||||||||||
Real estate total | 38 | — | — | 38 | ||||||||||||
Total investment assets at fair value | $ | 642 | $ | 3,325 | $ | 14 | $ | 3,981 | ||||||||
Liabilities | ||||||||||||||||
Swaps | $ | — | $ | (837 | ) | $ | — | $ | (837 | ) | ||||||
Other fixed income | — | (5 | ) | — | (5 | ) | ||||||||||
Fixed income total | — | (842 | ) | — | (842 | ) | ||||||||||
Total liabilities at fair value | $ | — | $ | (842 | ) | $ | — | $ | (842 | ) | ||||||
Accounts payable, net | (47 | ) | ||||||||||||||
Investments at Net Asset Value (NAV) (2) | ||||||||||||||||
Private equity | $ | 191 | ||||||||||||||
Private real estate | 62 | |||||||||||||||
Hedge funds | 183 | |||||||||||||||
Total investments at NAV | $ | 436 | ||||||||||||||
Total net assets | $ | 3,528 |
(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 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. |
2017 | |||||||
($ in millions) | Corporate Loans | Corporate Bonds | |||||
Balance, beginning of year | $ | — | $ | 7 | |||
Transfers, net | — | — | |||||
Realized gains/(loss) | — | (7 | ) | ||||
Unrealized (losses)/gains | — | 6 | |||||
Purchases and issuances | 4 | 6 | |||||
Sales, maturities and settlements | — | (2 | ) | ||||
Balance, end of year | $ | 4 | $ | 10 |
2016 | |||||||
($ in millions) | Corporate Loans | Corporate Bonds | |||||
Balance, beginning of year | $ | 3 | $ | 5 | |||
Realized gains/(loss) | — | 3 | |||||
Unrealized (losses)/gains | — | (4 | ) | ||||
Purchases and issuances | — | 15 | |||||
Sales, maturities and settlements | (3 | ) | (12 | ) | |||
Balance, end of year | $ | — | $ | 7 |
($ in millions) | Primary Plan Benefits | Supplemental Plan Benefits | ||||||
2018 | $ | 195 | $ | 29 | ||||
2019 | 196 | 28 | ||||||
2020 | 199 | 26 | ||||||
2021 | 202 | 21 | ||||||
2022 | 206 | 8 | ||||||
2023-2027 | 1,080 | 44 |
• | VERP -- charges for enhanced retirement benefits, curtailment and other expenses related to the VERP (See Note 16); |
• | 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 and costs related to the closure of certain supply chain locations. |
Cumulative Amount From Program Inception Through | ||||||||||||||||
($ in millions) | 2017 | 2016 | 2015 | 2017 | ||||||||||||
VERP | $ | 122 | $ | — | $ | — | $ | 122 | ||||||||
Home office and stores | 176 | 8 | 42 | 473 | ||||||||||||
Management transition | — | 3 | 28 | 255 | ||||||||||||
Other | 5 | 15 | 14 | 183 | ||||||||||||
Total | $ | 303 | $ | 26 | $ | 84 | $ | 1,033 |
($ in millions) | Home Office and Stores | Management Transition | Other | Total | ||||||||||||
January 30, 2016 | $ | 18 | $ | 10 | $ | 23 | $ | 51 | ||||||||
Charges | 9 | 3 | 15 | 27 | ||||||||||||
Cash payments | (23 | ) | (13 | ) | (11 | ) | (47 | ) | ||||||||
January 28, 2017 | 4 | — | 27 | 31 | ||||||||||||
Charges | 102 | — | 5 | 107 | ||||||||||||
Cash payments | (72 | ) | — | (25 | ) | (97 | ) | |||||||||
February 3, 2018 | $ | 34 | $ | — | $ | 7 | $ | 41 |
($ in millions) | 2017 | 2016 | 2015 | |||||||||
Net gain from sale of non-operating assets | $ | — | $ | (5 | ) | $ | (9 | ) | ||||
Investment income from Home Office Land Joint Venture | (31 | ) | (28 | ) | (41 | ) | ||||||
Net gain from sale of operating assets | (119 | ) | (73 | ) | (9 | ) | ||||||
Store and other asset impairments | — | — | 20 | |||||||||
Other | 4 | (5 | ) | 42 | ||||||||
Total expense/(income) | $ | (146 | ) | $ | (111 | ) | $ | 3 |
($ in millions) | 2017 | 2016 | 2015 | |||||||||
Current | ||||||||||||
Federal and foreign | $ | (64 | ) | $ | (12 | ) | $ | 5 | ||||
State and local | 22 | 4 | 6 | |||||||||
Total current | (42 | ) | (8 | ) | 11 | |||||||
Deferred | ||||||||||||
Federal and foreign | (59 | ) | 9 | (1 | ) | |||||||
State and local | (25 | ) | — | (1 | ) | |||||||
Total deferred | (84 | ) | 9 | (2 | ) | |||||||
Total income tax expense/(benefit) | $ | (126 | ) | $ | 1 | $ | 9 |
($ in millions) | 2017 | 2016 | 2015 | |||||||||
Federal income tax at statutory rate | $ | (82 | ) | $ | 1 | $ | (176 | ) | ||||
State and local income tax, less federal income tax benefit | (12 | ) | (2 | ) | (21 | ) | ||||||
Increase/(decrease) in valuation allowance | 33 | (1 | ) | 185 | ||||||||
Effect of U.S. tax reform | (75 | ) | — | — | ||||||||
Other, including permanent differences and credits | 10 | 3 | 21 | |||||||||
Total income tax expense/(benefit) | $ | (126 | ) | $ | 1 | $ | 9 |
($ in millions) | 2017 | 2016 | ||||||
Assets | ||||||||
Merchandise inventory | $ | 10 | $ | 27 | ||||
Accrued vacation pay | 8 | 17 | ||||||
Gift cards | 57 | 98 | ||||||
Stock-based compensation | 30 | 58 | ||||||
State taxes | 5 | 12 | ||||||
Workers’ compensation/general liability | 44 | 74 | ||||||
Accrued rent | 26 | 39 | ||||||
Litigation exposure | 3 | 16 | ||||||
Mirror savings plan | 8 | 13 | ||||||
Pension and other retiree obligations | 34 | 76 | ||||||
Net operating loss and tax credit carryforwards | 719 | 931 | ||||||
Other | 48 | 77 | ||||||
Total deferred tax assets | 992 | 1,438 | ||||||
Valuation allowance | (767 | ) | (993 | ) | ||||
Total net deferred tax assets | 225 | 445 | ||||||
Liabilities | ||||||||
Depreciation and amortization | (310 | ) | (561 | ) | ||||
Tax benefit transfers | (31 | ) | (53 | ) | ||||
Long-lived intangible assets | (27 | ) | (35 | ) | ||||
Total deferred tax liabilities | (368 | ) | (649 | ) | ||||
Total net deferred tax liabilities | $ | (143 | ) | $ | (204 | ) |
($ in millions) | 2017 | 2016 | 2015 | |||||||||
Beginning balance | $ | 79 | $ | 91 | $ | 62 | ||||||
Additions for tax positions of prior years | 4 | 16 | 40 | |||||||||
Reductions for tax positions of prior years | (45 | ) | (24 | ) | — | |||||||
Settlements and effective settlements with tax authorities | (3 | ) | (4 | ) | (10 | ) | ||||||
Expirations of statute | — | — | (1 | ) | ||||||||
Balance at end of year | $ | 35 | $ | 79 | $ | 91 |
($ in millions) | 2017 | 2016 | ||||||
Deferred taxes (noncurrent liability) | $ | 32 | $ | 75 | ||||
Accounts payable and accrued expenses (Note 7) | 2 | 3 | ||||||
Other liabilities (Note 8) | 1 | 1 | ||||||
Total | $ | 35 | $ | 79 |
($ in millions) | 2017 | 2016 | 2015 | |||||||||
Supplemental cash flow information | ||||||||||||
Income taxes received/(paid), net | $ | (9 | ) | $ | (10 | ) | $ | (5 | ) | |||
Interest received/(paid), net | (302 | ) | (344 | ) | (369 | ) | ||||||
Supplemental non-cash investing and financing activity | ||||||||||||
Increase/(decrease) in other accounts payable related to purchases of property and equipment and software | 25 | 20 | 1 | |||||||||
Purchase of property and equipment and software through capital leases and a note payable | — | 1 | 1 |
2017 | ||||||||||||||||
($ in millions, except EPS) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total net sales | $ | 2,706 | $ | 2,962 | $ | 2,807 | $ | 4,031 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 1,723 | 1,923 | 1,852 | 2,676 | ||||||||||||
SG&A expenses | 843 | 842 | 840 | 943 | ||||||||||||
Restructuring and management transition (1) | 220 | 23 | 52 | 8 | ||||||||||||
Net income/(loss) | (180 | ) | (62 | ) | (128 | ) | 254 | |||||||||
Diluted earnings/(loss) per share (2) | $ | (0.58 | ) | $ | (0.20 | ) | $ | (0.41 | ) | $ | 0.81 | |||||
2016 | ||||||||||||||||
($ in millions, except EPS) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total net sales | $ | 2,811 | $ | 2,918 | $ | 2,857 | $ | 3,961 | ||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 1,793 | 1,834 | 1,795 | 2,649 | ||||||||||||
SG&A expenses | 872 | 853 | 888 | 925 | ||||||||||||
Restructuring and management transition (3) | 6 | 9 | 2 | 9 | ||||||||||||
Net income/(loss) | (68 | ) | (56 | ) | (67 | ) | 192 | |||||||||
Diluted earnings/(loss) per share (2) | $ | (0.22 | ) | $ | (0.18 | ) | $ | (0.22 | ) | $ | 0.61 |
(1) | Restructuring and management transition charges (Note 17) by quarter for 2017 consisted of the following: |
($ in million) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||
VERP | $ | 122 | $ | — | $ | — | $ | — | |||||||
Home office and stores | 98 | 23 | 52 | 3 | |||||||||||
Management transition | — | — | — | — | |||||||||||
Other | — | — | — | 5 | |||||||||||
Total | $ | 220 | $ | 23 | $ | 52 | $ | 8 |
(2) | 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. |
(3) | Restructuring and management transition charges (Note 17) by quarter for 2016 consisted of the following: |
($ in millions) | 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 |
J. C. PENNEY COMPANY, INC. | |
By: | /s/ D. A. McKay |
ATTEST: | D. A. McKay |
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION | |
By: | /s/ V. L. Higgins |
ATTEST: | V. L. Higgins |
/s/ J. Minardi | |
J. Minardi |
Section | Page | |||
1 | Deposit of Trust Funds | 3 | ||
2 | Permitted Investments | 8 | ||
3 | Distribution of Funds from the Indemnification Trust Fund | 12 | ||
4 | Representatives of the Indemnitees; Challenges to Indemnification Claims or Trust Fund Deposits | 21 | ||
5 | Concerning the Trustee | 28 | ||
6 | Change in Control | 33 | ||
7 | Termination of the Trust | 35 | ||
8 | Suspension of Payment on Indemnification Claims | 36 | ||
9 | Miscellaneous | 37 | ||
Exhibit A | Payment Instructions | |||
Exhibit B | Initial Representatives of the Indemnitees | |||
Exhibit C | Initial Indemnitees | |||
Acknowledgements |
ATTEST | By: | J. C. Penney Company, Inc. | ||
__________________________ | __________________________ | |||
Albert W. Driver, Jr. | Robert E. Northam | |||
Secretary | Senior Vice President and Chief Financial Officer | |||
ATTEST | By: | CHEMICAL BANK | ||
__________________________ | __________________________ | |||
Marianne W. Reynolds | James N. Donaldson | |||
Assistant Trust Officer | Vice President | |||
Name | Address |
1. | Section 1 (e) of the Trust Agreement shall be amended and restated in its entirety as follows: |
ATTEST | By: | J. C. Penney Company, Inc. | ||
____________________ | ||||
Robert E. Northam | ||||
Senior Vice President and Secretary | Senior Vice President and Chief Financial Officer | |||
ATTEST | By: | CHEMICAL BANK | ||
____________________ | ||||
James H. Shurmon, Jr. | ||||
Title: | Vice President | |||
53 Weeks | 52 Weeks | 52 Weeks | 52 Weeks | 52 Weeks | |||||||||||||||
Ended | Ended | Ended | Ended | Ended | |||||||||||||||
($ in millions) | 2/3/2018 | 1/28/2017 | 1/30/2016 | 1/31/2015 | 2/1/2014 | ||||||||||||||
Income/(loss) from continuing operations before income taxes | $ | (242 | ) | $ | 2 | $ | (504 | ) | $ | (694 | ) | $ | (1,708 | ) | |||||
Fixed charges: | |||||||||||||||||||
Net interest expense | 325 | 363 | 405 | 406 | 352 | ||||||||||||||
Interest income included in net interest | 1 | — | — | — | 1 | ||||||||||||||
Loss on extinguishment of debt, bond premiums and unamortized costs | 33 | 30 | 10 | 34 | 114 | ||||||||||||||
Estimated interest within rental expense | 93 | 93 | 94 | 98 | 99 | ||||||||||||||
Total fixed charges | 452 | 486 | 509 | 538 | 566 | ||||||||||||||
Total earnings available for fixed charges | $ | 210 | $ | 488 | $ | 5 | $ | (156 | ) | $ | (1,142 | ) | |||||||
Ratio of earnings to fixed charges | 0.5 | 1.0 | — | (0.3 | ) | (2.0 | ) | ||||||||||||
Coverage deficiency | 242 | NA | 504 | 694 | 1,708 |
/s/ Marvin R. Ellison | /s/ Jeffrey A. Davis | |
Marvin R. Ellison Chairman of the Board and Chief Executive Officer; Director (principal executive officer) | Jeffrey A. Davis Executive Vice President and Chief Financial Officer (principal financial officer) | |
/s/ Andrew S. Drexler | /s/ Paul Brown | |
Andrew S. Drexler Senior Vice President, Chief Accounting Officer and Controller (principal accounting officer) | Paul Brown Director | |
/s/ Amanda Ginsberg | /s/ Wonya Y. Lucas | |
Amanda Ginsberg Director | Wonya Y. Lucas Director | |
/s/ B. Craig Owens | /s/ Lisa A. Payne | |
B. Craig Owens Director | Lisa A. Payne Director | |
/s/ Debora A. Plunkett | /s/ Leonard H. Roberts | |
Debora A. Plunkett 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 Amendment No. 1 to Annual Report on Form 10-K/A 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 | |
Chief Executive Officer |
1. | I have reviewed this Amendment No. 1 to Annual Report on Form 10-K/A 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/ Jeffrey A. Davis | |
Jeffrey A. Davis | |
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 |
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/ Jeffrey A. Davis |
Jeffrey A. Davis |
Executive Vice President and Chief Financial Officer |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
May 25, 2018 |
Jul. 29, 2017 |
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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 | Feb. 03, 2018 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | true | ||
Amendment Description | The sole purpose of this Amendment No. 1 is to provide a corrected version of KPMG LLP’s report contained in Part II, Item 8 of the form 10-K to include a paragraph that was inadvertently omitted from such report. | ||
Entity Common Stock, Shares Outstanding | 312,215,072 | ||
Trading Symbol | jcp | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,716,555,230 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Millions |
12 Months Ended | |||||||||||||||||||
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Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
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Net income/(loss) | $ (116) | $ 1 | $ (513) | |||||||||||||||||
Other comprehensive income/(loss), net of tax: | ||||||||||||||||||||
Net actuarial gain/(loss) arising during the period (1) | [1] | 67 | 1 | (213) | ||||||||||||||||
Prior service credit/(cost) arising during the period (2) | [2] | 0 | 5 | 0 | ||||||||||||||||
Reclassification of net actuarial (gain)/loss from a settlement (3) | [3] | 8 | 0 | 110 | ||||||||||||||||
Reclassification for net actuarial (gain)/loss (4) | [4] | 16 | 1 | 31 | ||||||||||||||||
Reclassification for amortization of prior service (credit)/cost (5) | [5] | 4 | 0 | 2 | ||||||||||||||||
Reclassification of prior service (credit)/cost from a curtailment (6) | [6] | 3 | 0 | 0 | ||||||||||||||||
Gain/(loss) on interest rate swaps (7) | [7] | 6 | 3 | (23) | ||||||||||||||||
Reclassification for periodic settlements (8) | [8] | 7 | 8 | 6 | ||||||||||||||||
Unrealized gain/(loss) | 2 | 0 | 0 | |||||||||||||||||
Deferred tax valuation allowance | 0 | 0 | (54) | |||||||||||||||||
Total other comprehensive income/(loss), net of tax | 113 | 18 | (141) | |||||||||||||||||
Total comprehensive income/(loss), net of tax | (3) | 19 | (654) | |||||||||||||||||
Other Comprehensive Income Loss Reclassification Pension And Other Postretirement Benefit Plans Settlement Adjustment In Net Periodic Benefit Cost Gross Amount | (13) | (180) | ||||||||||||||||||
Other Comprehensive Income Loss Reclassification Pension And Other Postretirement Benefit Plans Settlement Adjustment In Net Periodic Benefit Cost Tax Amount | (5) | (70) | ||||||||||||||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | (3) | (2) | 15 | |||||||||||||||||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, Tax | (9) | (1) | (22) | |||||||||||||||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, Prior Service Cost (Credit), Reclassification Adjustment from AOCI, Tax | (3) | 0 | (1) | |||||||||||||||||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Pre-tax Amount Due to Curtailment | 27 | |||||||||||||||||||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans Reclassification of Prior Service (Credit)/Cost from a Curtailment, Tax | (1) | |||||||||||||||||||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Plan Amendments, Tax Effect | 0 | (3) | 0 | |||||||||||||||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | $ (3) | $ (5) | $ (4) | |||||||||||||||||
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Feb. 03, 2018 |
Jan. 28, 2017 |
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Statement of Financial Position [Abstract] | ||
Common stock, authorized | 1,250,000,000 | |
Common stock, par value per share | $ 0.5 | |
Common stock, issued and outstanding | 312,000,000 | 308,300,000 |
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 at Jan. 31, 2015 | $ 1,914 | $ 152 | $ 4,606 | $ (2,494) | $ (350) |
Shares balance as of the beginning 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 and other | 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 | 1 | |||
Other comprehensive income/(loss) | 18 | 18 | |||
Stock-based compensation and other | 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 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income/(loss) | (116) | ||||
Other comprehensive income/(loss) | 113 | 113 | |||
Stock-based compensation and other | 28 | $ 2 | 26 | ||
Stock-based compensation, shares | 3.7 | ||||
Balance as of the end of the period at Feb. 03, 2018 | $ 1,379 | $ 156 | $ 4,705 | $ (3,122) | $ (360) |
Shares balance as of the end of the period at Feb. 03, 2018 | 312.0 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
12 Months Ended | ||||
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Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
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Cash flows from operating activities | |||||
Net income/(loss) | $ (116) | $ 1 | $ (513) | ||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||
Restructuring and management transition | 74 | (1) | 10 | ||
Asset impairments and other charges | 6 | 3 | 25 | ||
Net gain on sale of non-operating assets | 0 | (5) | (9) | ||
Net gain from sale of operating assets | (119) | (73) | (9) | ||
Loss on extinguishment of debt | 33 | 30 | 10 | ||
Depreciation and amortization | 570 | 609 | 616 | ||
Benefit plans | 106 | (39) | 127 | ||
Stock-based compensation | [1] | 25 | 35 | 44 | |
Other comprehensive income tax benefits | (60) | (12) | 0 | ||
Deferred taxes | (63) | 9 | 0 | ||
Change in cash from: | |||||
Inventory | 92 | (133) | (69) | ||
Prepaid expenses and other assets | (15) | 11 | 19 | ||
Merchandise accounts payable | (4) | 52 | (72) | ||
Income taxes | (12) | (6) | 4 | ||
Accrued expenses and other | (63) | (147) | 257 | ||
Net cash provided by/(used in) operating activities | 454 | 334 | 440 | ||
Cash flows from investing activities | |||||
Capital expenditures | (395) | (427) | (320) | ||
Proceeds from sale of non-operating assets | 0 | 2 | 13 | ||
Proceeds from sale of operating assets | 154 | 96 | 11 | ||
Joint venture return of investment | 9 | 13 | 0 | ||
Insurance proceeds received for damage to property and equipment | 3 | 0 | 0 | ||
Net cash provided by/(used in) investing activities | (229) | (316) | (296) | ||
Cash flows from financing activities | |||||
Proceeds from issuance of long-term debt | 0 | 2,188 | 0 | ||
Proceeds from borrowings under the credit facility | 804 | 667 | 0 | ||
Payments of borrowings under the credit facility | (804) | (667) | 0 | ||
Net proceeds from financing obligation | 0 | 216 | 0 | ||
Premium on early retirement of debt | (30) | 0 | 0 | ||
Payments of capital leases, financing obligation and note payable | (16) | (29) | (33) | ||
Payments of long-term debt | (599) | (2,349) | (520) | ||
Financing costs | (9) | (49) | (4) | ||
Proceeds from stock issued under stock plans | 5 | 2 | 0 | ||
Excess tax benefits from stock-based compensation | 0 | 0 | 0 | ||
Tax withholding payments for vested restricted stock | (5) | (10) | (5) | ||
Net cash provided by/(used in) financing activities | (654) | (31) | (562) | ||
Net increase/(decrease) in cash and cash equivalents | (429) | (13) | (418) | ||
Cash and cash equivalents at beginning of period | 887 | 900 | 1,318 | ||
Cash and cash equivalents at end of period | $ 458 | $ 887 | $ 900 | ||
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Basis of Presentation and Consolidation |
12 Months Ended | |||||||||||||||||||||||||||||||||||
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Feb. 03, 2018 | ||||||||||||||||||||||||||||||||||||
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 872 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 |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2017, 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 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 (Exclusive of Depreciation and Amortization) Cost of goods sold includes 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 (net of income earned on our private label credit card and co-branded MasterCard® programs). 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 $27 million, $26 million and $32 million for 2017, 2016 and 2015, respectively, were $714 million, $769 million and $792 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 using the retail method (RIM). Under RIM, 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. Shrinkage accruals are estimated as a percent of sales for a given period based on physical inventories or cycle count activities. Physical inventory counts for stores are are taken at least annually and cycle count activities for distribution centers and regional warehouses are executed on a daily basis. Inventory records and shrinkage accruals are adjusted appropriately based on the actual results from physical inventories and cycle counts. The shrinkage rate from the most recent physical inventory and cycle count activity, in combination with current events and historical experience, is used as the standard for the shrinkage accrual rate for the next inventory cycle or cycle count activity. Historically, our actual physical inventory and cycle counts results have shown our estimates to be reliable. See Note 3 for the discussion of the accounting change related to our merchandise inventory. 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. Assets or asset groups that trigger an impairment review are tested for recoverability by comparing the estimated undiscounted cash flows expected to result from the use of the asset plus any net proceeds expected from disposition of the asset to the carrying value of the asset. If the asset or asset group is not recoverable on a undiscounted cash flow basis, the amount of the impairment loss is measured by comparing the carrying value of the asset or asset group to its fair value and and depending on the transaction any loss is included in Restructuring and management transition or 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 remaining 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. |
Change in Accounting for Merchandise Inventories (Notes) |
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Feb. 03, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes [Text Block] | Change in Accounting for Merchandise Inventories During the third quarter of fiscal 2017, the Company retired certain legacy systems and implemented a new module of its enterprise resource planning system to account for its merchandise inventories. Along with this implementation, the Company changed its method of accounting for merchandise inventories for its Internet operations from the lower of standard cost (representing average vendor costs) or net realizable value to the lower of cost or market using the retail inventory method (RIM). The change in inventory valuation method with respect to the Company's Internet operations allows the Company to better account for inventory on an enterprise-wide basis and to be more consistent with its omnichannel focus of physical and digital interaction with its customers. The Company believes this will result in greater uniformed costing of inventories and a more consistent matching of cost of goods sold with net sales generated. The effect of the change on the Inventory and Reinvested Earnings/(Accumulated Deficit) balances was not material. The Company could not determine the impact of the change to the retail method for its inventory related to its Internet operations for periods prior to fiscal 2017 and therefore could not retroactively apply the change to periods prior to fiscal 2017. |
Effect of New Accounting Standards |
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Feb. 03, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Effect of New Accounting Standards | Effect of New Accounting Standards In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 no longer requires allocating valuation allowances between current and noncurrent deferred tax assets because those allowances are classified as noncurrent. The Company adopted ASU 2015-17 retrospectively at the beginning of 2017. As a result of the retrospective adoption, the Company reclassified deferred tax assets of $196 million as of January 28, 2017 from Deferred taxes (a component of current assets) to a reduction in Deferred taxes (a component of long-term liabilities) on the Consolidated Balance Sheets. 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 previous 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 RIM. The Company adopted ASU 2015-11 at the beginning of 2017. The adoption of this standard did not have a material impact on our financial condition, results of operations or cash flows as substantially all of our inventory was measured by the RIM impairment model at that time which is considered a continued acceptable method under the new standard. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 changes how companies account for certain aspects of share-based payments to employees. Entities are required to recognize the income tax effects of awards (windfalls or shortfalls) in the statement of operations 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 also changed. The ASU also provides a practical expedient for public companies that allows the use of a simplified method to estimate the expected term for certain awards. The Company adopted ASU 2016-09 at the beginning of 2017. 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 have been recorded on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of January 29, 2017. Additionally, the deferred tax assets recognized as a result of this transition guidance have been assessed for realizability and a valuation allowance has been 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 was 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 Company adopted ASU 2016-05 at the beginning of 2017 and the new guidance did not have any impact as the Company had no transactions involving the novation of a derivative. In May 2014, the FASB issued ASC Topic 606 (ASC 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 we plan to adopt the new standard using the full retrospective approach. We have analyzed the impact of the new standard on our current accounting policies and internal controls and the software changes required to implement the new standard. Our revenue recognition policies related to gift card breakage, customer loyalty programs, credit card income and principal versus agent considerations will change. Whereas we currently recognize gift card breakage, net of required escheatment, 60 months after the gift card is issued, we will in the future recognize gift card breakage, net of required escheatment, over the redemption pattern of gift cards. Additionally, whereas we utilize the incremental cost method to account for our customer loyalty programs, we will in the future account for our customer loyalty programs as revenue which will require us to defer a portion of our sales to loyalty rewards to be earned by reward members for a future discount on a future sale. We have also evaluated the classification of profit sharing income earned in connection with our private label credit card and co-branded MasterCard® programs owned and serviced by Synchrony Financial (Synchrony). Under our agreement with Synchrony, we receive cash payments from Synchrony based upon the performance of the credit card portfolios. Currently the income we earn under our agreement with Synchrony is included as an offset to SG&A expenses. In connection with the adoption of the new standard, we plan to change our presentation to include such income in a separate line item described as Credit card income and other. Further, we evaluated certain contracts for principal versus agent considerations and where we currently consider ourselves to be the principal (report gross sales) or the agent (report net sales) based on our risk and rewards in a sales transaction, we will in the future assess principal versus agent considerations depending on our control of the good or service before it is transferred to the customer. Upon our retrospective adoption of ASC 606 on February 4, 2018, we recorded a $4 million transition adjustment that increased our Retained earnings/(accumulated deficit) and on a retrospective basis our Net sales increased by $48 million in 2017 and by $24 million in 2016 and our Net income/(loss) decreased by a loss of $2 million in 2017 and $18 million in 2016. In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. Companies will present all other components of net benefit cost outside of operating income, if this subtotal is presented. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods therein. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. Entities should apply this guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost in the income statement and prospectively, on and after the effective date, for any capitalization of the service cost component of net periodic pension cost in assets. Upon our retrospective adoption of ASU 2017-07 on February 4, 2018, we changed the presentation of our Consolidated Statement of Operations to exclude the Pension line item and to reflect the service cost component of our pension expense/(income) in SG&A and to reflect all other cost components as in a new separate line item below operating income/(loss) described as Other components of net periodic pension cost/(income). In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This standard focuses on a targeted improvement to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) enacted on December 22, 2017 from Accumulated other comprehensive income/(loss) to Retained earnings/accumulated deficit. The amount of the reclassification would be the difference between the amount initially charged or credited directly to other comprehensive income at the previously enacted U.S. federal corporate income tax rate that remains in Accumulated other comprehensive income/(loss) and the amount that would have been charged or credited directly to Other comprehensive income/(loss) using the newly enacted U.S. federal corporate income tax rate, excluding the effect of any valuation allowance previously charged to Net income/(loss). ASU 2018-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the effect that the new accounting guidance will have on our Consolidated Balance Sheet. 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 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 Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 |
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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 2017, 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. |
Other Accounts Payable and Accrued Expenses |
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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 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 10). The effective portion of the interest rate swaps' changes in fair values is reported in Accumulated other comprehensive income/(loss) (see Note 13), 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 | 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 $9 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 connection with the Company announcing its plan to close underperforming department stores in 2017, long-lived assets held and used with a carrying value of $86 million were written down to their fair value of $9 million, resulting in asset impairment charges of $77 million in 2017. The fair value was determined based on comparable market values of similar properties or on a rental income approach and the significant inputs related to valuing the store related assets are classified as Level 2 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 February 3, 2018 and January 28, 2017, 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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Feb. 03, 2018 | |
Line of Credit Facility [Abstract] | |
Credit Facility | Credit Facility The Company has a $2,350 million senior secured asset-based credit facility (2017 Credit Facility), comprised of a $2,350 million revolving line of credit (Revolving Facility). During the second quarter of 2017, we amended the 2015 Credit Facility to, among other things, extend the maturity date to June 20, 2022 and to lower the interest rate spread by 75 basis points. All borrowings under the 2017 Credit Facility accrue interest at a rate equal to, at the Company's option, a base rate or an adjusted LIBOR rate plus a spread. The 2017 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 2017 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 2017, we had no borrowings outstanding under the Revolving Facility. In addition, as of the end of 2017, we had $2,019 million available for borrowing, of which $135 million was reserved for outstanding standby and import letters of credit, none of which have been drawn on, leaving $1,884 million for future borrowings. The applicable rate for standby and import letters of credit was 1.75% and 0.875%, respectively, while the required commitment fee was 0.375% for the unused portion of the Revolving Facility. |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt
During the second quarter of 2017, we settled cash tender offers with respect to portions of our outstanding 5.75% Senior Notes due 2018 (2018 Notes) and 8.125% Senior Notes due 2019 (2019 Notes), resulting in a loss on extinguishment of debt of $34 million, and amended our $2.35 billion senior secured asset-based revolving credit facility (Revolving Credit Facility), which resulted in a loss on extinguishment of debt of $1 million. During the fourth quarter of 2017, we repurchased and retired $40 million aggregate principal amount of our outstanding debt resulting in a gain on extinguishment of debt of $2 million. 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 Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Accumulated Other Comprehensive Income/(Loss) The following table shows the changes in accumulated other comprehensive income/(loss) balances for 2017 and 2016:
Common Stock On a combined basis, our 401(k) savings plan, including our employee stock ownership plan (ESOP), held approximately 13 million shares, or approximately 4.3% of outstanding Company common stock, at February 3, 2018. 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 February 3, 2018 or January 28, 2017. 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. After various amendments to the Original Rights Agreement, expiration date of the Rights were extended to January 26, 2020 and certain other provisions were amended including the definition of "beneficial ownership" to include terms appropriate for the purpose of preserving tax benefits. 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 February 3, 2018, a maximum of 12.7 million options were available for future grant under the 2016 Plan. Our stock option and restricted stock award grants have averaged about 2.5% 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 February 3, 2018:
Cash proceeds, tax benefits and intrinsic value related to total stock options exercised are provided in the following table:
As of February 3, 2018, we had $9 million of unrecognized 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 $2.91 in 2017, $4.89 in 2016 and $3.48 in 2015. We primarily used the binomial lattice valuation model to determine the fair value of the stock options granted using the following assumptions:
(1) Following the May 1, 2012 payment, we discontinued paying dividends. Stock Awards The following table summarizes our non-vested stock awards activity during the year ended February 3, 2018:
As of February 3, 2018, we had $22 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 2017, 2016 and 2015 was $17 million, $30 million and $16 million, respectively, compared to an aggregate grant date fair value of $27 million, $28 million and $27 million, respectively. Stock awards granted include approximately 362,000 fully vested RSUs to directors during 2017 with a fair value of $4.57 per RSU award. In addition to the grants above, on March 6, 2017, we granted approximately 3.3 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 $11.92 per phantom unit. The fair value of the awards is remeasured at each reporting period and was $3.54 per share as of February 3, 2018. Compensation expense, which is variable, is recognized over the vesting period with a corresponding liability, which is recorded in Other accounts payable and accrued expenses and Other liabilities in our Consolidated Balance Sheets. The phantom units have a liability of $11 million as of February 3, 2018. No cash was paid during 2017 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 February 3, 2018, 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 February 3, 2018, 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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Retirement Benefits [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). Voluntary Early Retirement Program In 2017, the Company initiated a Voluntary Early Retirement Program (VERP) for approximately 6,000 eligible associates. Eligibility for the VERP included 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 ended on March 31, 2017. Based on the approximately 2,800 associates who elected to accept the VERP, we incurred a total charge of $112 million for enhanced retirement benefits. The enhanced retirement benefits increased the projected benefit obligation (PBO) of the Primary Pension Plan and the Supplemental Pension Plans by $88 million and $24 million, respectively. In addition, we incurred curtailment charges of $6 million related to our Primary Pension Plan and $2 million related to Supplemental Pension Plans as a result of the reduction in the expected years of future service related to these plans. Additionally, we recognized settlement expense of $13 million in 2017 due to higher lump-sum payment activity to retirees primarily as a result of the VERP executed earlier in the year. 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. 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 2017, the funded status of the Primary Pension Plan was 102%. 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, 2017 and 2016, 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 2017, the funded status of the Primary Pension Plan increased by $79 million primarily due to the performance of plan assets. The actual one-year return on pension plan assets at the measurement date was 14.1% in 2017, bringing the annualized return since inception of the plan to 9.0%. The following pre-tax amounts were recognized in Accumulated other comprehensive income/(loss) in the Consolidated Balance Sheets as of the end of 2017 and 2016:
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 as of the end of both 2017 and 2016. At the end of 2017, plan assets of $3.5 billion for the Primary Pension Plan were above the ABO. The ABO for our unfunded supplemental pension plans was $167 million and $133 million as of the end of 2017 and 2016, respectively. Primary Pension Plan Asset Allocation The target allocation ranges for each asset class as of the end of 2017 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 2017 and 2016, 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, depending on the type of investment, are valued at the reported NAV as fair value or 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 2018 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 2018 are anticipated to be approximately $29 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 and $7 million in 2015 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 $46 million in 2017, $49 million in 2016 and $56 million in 2015. |
Restructuring and Management Transition |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Management Transition | Restructuring and Management Transition On March 17, 2017, the Company finalized its plans to close 138 stores to 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. The store closures resulted in a $77 million asset impairment charge for store assets with limited future use and a $14 million severance charge for the expected displacement of store associates. During 2017, $52 million in store related closing and other costs such as certain lease obligations were recorded as a result of each respective store ceasing operations. 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 2017 and 2016 was as follows:
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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 2017, the Company had $31 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 $40 million. 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. Net Gain from Sale of Operating Assets In 2017, we completed the sale of our Buena Park, California distribution facility for a net sale price of $131 million and recorded a net gain of $111 million. 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:
The U.S. Tax Cuts and Jobs Act, enacted in December 2017, significantly changed the U.S. corporate income tax laws. In connection with the enactment, we recorded a net benefit of $75 million during the fourth quarter of 2017, which is primarily due to the revaluation of net deferred tax liabilities based on the new lower corporate income tax rate. As of February 3, 2018, a valuation allowance of $767 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. We are required to allocate a portion of our tax provision between operating losses and Accumulated other comprehensive income/(loss). In 2017, we experienced a loss in continuing operations and income in 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 $767 million noted above. The Company has a federal net operating loss (NOL) of $2.1 billion and $58 million of tax credit carryforwards as of February 3, 2018. These NOL carryforwards (expiring in 2032 through 2034) arose prior to December 31, 2017 and are available to offset future taxable income. The Company may recognize additional NOLs in the future which, under the Tax Act, would not expire but would only be available to offset up to 80% of the Company’s future taxable income. These carryforwards have a potential to be used to offset future taxable income and reduce future cash tax liabilities by approximately $719 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 13, 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. On May 19, 2017, stockholders approved the extension of the term of the agreement to January 26, 2020. 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 2017, 2016 and 2015, the unrecognized tax benefits balance included $32 million, $32 million and $33 million, respectively, that, if recognized, would be a benefit in the income tax provision after giving consideration to the offsetting effect of $7 million, $11 million and $12 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 2017, 2016 and 2015 were $1 million, $2 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 2015. 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 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 on August 29, 2016, a magistrate judge issued a report and recommendation that the motion for class certification be granted. The district court adopted this report and recommendation granting class certification on March 8, 2017. 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. The parties have reached an agreement to settle the consolidated securities class action for $97.5 million, which will be funded by insurance. The court granted final approval of the settlement on January 4, 2018. 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. On January 24, 2018, the Court issued an order reopening the suits. 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. On May 18, 2017, plaintiff in the Lipsius suit voluntarily dismissed the Collin County action, and on May 19, 2017, refiled the action in the District Court of Dallas County, Texas. On June 8, 2017, the Company’s Board of Directors received a demand from a purported shareholder of the Company, Douglas Carlson, to conduct an investigation regarding potential claims that certain present and former members of the Board of Directors and executives violated federal securities law and/or breached their fiduciary duties to the Company based upon allegations similar to those in the Marcus class action securities litigation and the related shareholder derivative litigation. The Board of Directors appointed a committee of independent directors (the "Demand Review Committee") to review the demand and make a recommendation to the Board of Directors regarding a response to the demand. In November 2017, the Demand Review Committee completed its review and recommended that the demand be denied, which recommendation was adopted by the Board of Directors. 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 reached a settlement agreement pursuant to which JCP will make available $4.5 million to settle class members’ claims, and the court granted final approval of the settlement on December 18, 2017. 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 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 final court approval, to resolve the California action for $1.75 million. The California court granted final approval of the settlement on November 3, 2017. The parties have also reached a settlement agreement to resolve the Illinois action for $5 million. The Illinois court granted final approval of the settlement on August 9, 2017. 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 February 3, 2018, we have an estimated accrual of $20 million related to potential environmental liabilities that is recorded in Other accounts payable and accrued expenses and Other liabilities in the Consolidated Balance Sheet. 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 estimated amount, we do not believe that such losses would have a material effect on our financial condition, results of operations or liquidity. As a result of Hurricanes Harvey, Irma and Maria in 2017, the Company incurred varying property damage and inventory losses in all of its Puerto Rico stores, in one store in Texas and in one store in Florida. Costs related to the property damage and inventory losses are recoverable (net of deductibles) from property insurance maintained by the Company and from certain landlords per the store leases. We have recorded $16 million in losses related to the cost of any property damage and inventory losses and have collected $15 million in loss recoveries from our insurance provider and have a receivable of $1 million for future expected recoveries. |
Subsequent Events (Notes) |
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Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Events On March 12, 2018, JCP issued $400 million of senior secured second priority notes with a 8.625% rate (the "Notes"). The Notes are guaranteed, jointly and severally, by the Company and certain domestic subsidiaries of JCP that guarantee the Company's senior secured term loan facility and existing senior secured notes. The net proceeds from the Notes are expected to be used for the tender consideration for the Company's contemporaneous cash tender offers for approximately $95 million in principal of its 8.125% Senior Notes Due 2019 and approximately $225 million in principal of its 5.65% Senior Notes Due 2020. |
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 2017 and 2016:
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Basis of Presentation and Consolidation (Policy) |
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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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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 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 (Exclusive of Depreciation and Amortization) Cost of goods sold includes 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 (net of income earned on our private label credit card and co-branded MasterCard® programs). |
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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 using the retail method (RIM). Under RIM, 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. Shrinkage accruals are estimated as a percent of sales for a given period based on physical inventories or cycle count activities. Physical inventory counts for stores are are taken at least annually and cycle count activities for distribution centers and regional warehouses are executed on a daily basis. Inventory records and shrinkage accruals are adjusted appropriately based on the actual results from physical inventories and cycle counts. The shrinkage rate from the most recent physical inventory and cycle count activity, in combination with current events and historical experience, is used as the standard for the shrinkage accrual rate for the next inventory cycle or cycle count activity. Historically, our actual physical inventory and cycle counts results have shown our estimates to be reliable. See Note 3 for the discussion of the accounting change related to our merchandise inventory. |
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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. Assets or asset groups that trigger an impairment review are tested for recoverability by comparing the estimated undiscounted cash flows expected to result from the use of the asset plus any net proceeds expected from disposition of the asset to the carrying value of the asset. If the asset or asset group is not recoverable on a undiscounted cash flow basis, the amount of the impairment loss is measured by comparing the carrying value of the asset or asset group to its fair value and and depending on the transaction any loss is included in Restructuring and management transition or 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 remaining 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 2017, 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/(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) |
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Schedule of Accumulated Other Comprehensive Income/(Loss) |
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 February 3, 2018:
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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 $2.91 in 2017, $4.89 in 2016 and $3.48 in 2015. We primarily used the binomial lattice valuation model to determine the fair value of the stock options granted using the following assumptions:
(1) Following the May 1, 2012 payment, we discontinued paying dividends. |
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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 February 3, 2018:
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 03, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 February 3, 2018, 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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Feb. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 Liability [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 Expense [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assumptions Used |
|
Restructuring and Management Transition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2017 and 2016 was as follows:
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Real Estate and Other, Net (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 03, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 03, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | The following table summarizes a reconciliation of income tax expense/(benefit) compared with the amounts at the U.S. federal statutory income tax rate:
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Schedule of Deferred Tax Assets and Liabilities | Our deferred tax assets and liabilities 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 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 03, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Feb. 03, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2017 and 2016:
|
Basis of Presentation and Consolidation (Nature of Operations) (Details) |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018
state
department_store
|
Jan. 28, 2017 |
Jan. 30, 2016 |
|
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 872 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 | 872 | ||
Number of states in which entity operates | state | 49 | ||
State of incorporation | Delaware | ||
Fiscal Period Duration | 371 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 | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
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 | 22.00% | 23.00% | 25.00% |
Men's apparel and accessories [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 21.00% | 22.00% | 22.00% |
Home [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 15.00% | 13.00% | 12.00% |
Women's accessories, including Sephora [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 13.00% | 13.00% | 12.00% |
Children's apparel [Member] | |||
Revenue from External Customer [Line Items] | |||
Percentage of merchandise mix | 9.00% | 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 | 6.00% | 5.00% | 5.00% |
Significant Accounting Policies (Advertising) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Accounting Policies [Abstract] | |||
Cooperative advertising vendor reimbursements | $ 27 | $ 26 | $ 32 |
Advertising costs | $ 714 | $ 769 | $ 792 |
Significant Accounting Policies (Property and Equipment, Net) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
|||
Property, Plant and Equipment [Line Items] | ||||
Accumulated depreciation | $ (3,500) | $ (3,842) | ||
Property and equipment, net | 4,281 | 4,599 | ||
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | 245 | 249 | ||
Buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | $ 4,750 | 4,859 | ||
Estimated useful lives | 50 years | |||
Furniture and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | $ 1,603 | 1,963 | ||
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] | $ 1,068 | 1,254 | |
Capital Leases (Equipment) [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment | $ 115 | $ 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 |
---|---|
Feb. 03, 2018 | |
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. 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 |
Effect of New Accounting Standards (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 03, 2018
months
|
Jan. 28, 2017
USD ($)
|
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Gift Card Liability, Maximum term | months | 60 | |
Accounting Standards Update 2015-17 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred taxes (current assets) | $ | $ 196 | |
New Accounting Pronouncement or Change in Accounting Principle, Description | In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 no longer requires allocating valuation allowances between current and noncurrent deferred tax assets because those allowances are classified as noncurrent. The Company adopted ASU 2015-17 retrospectively at the beginning of 2017. As a result of the retrospective adoption, the Company reclassified deferred tax assets of $196 million as of January 28, 2017 from Deferred taxes (a component of current assets) to a reduction in Deferred taxes (a component of long-term liabilities) on the Consolidated Balance Sheets. | |
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 previous 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 RIM. The Company adopted ASU 2015-11 at the beginning of 2017. The adoption of this standard did not have a material impact on our financial condition, results of operations or cash flows as substantially all of our inventory was measured by the RIM impairment model at that time which is considered a continued acceptable method under the new standard. | |
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 FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 changes how companies account for certain aspects of share-based payments to employees. Entities are required to recognize the income tax effects of awards (windfalls or shortfalls) in the statement of operations 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 also changed. The ASU also provides a practical expedient for public companies that allows the use of a simplified method to estimate the expected term for certain awards. The Company adopted ASU 2016-09 at the beginning of 2017. 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 have been recorded on a modified retrospective basis through a cumulative effect adjustment to retained earnings as of January 29, 2017. Additionally, the deferred tax assets recognized as a result of this transition guidance have been assessed for realizability and a valuation allowance has been 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 was 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 2016-05 [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 Company adopted ASU 2016-05 at the beginning of 2017 and the new guidance did not have any impact as the Company had no transactions involving the novation of a derivative. | |
Accounting Standards Update 2014-09 [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 (ASC 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 we plan to adopt the new standard using the full retrospective approach. We have analyzed the impact of the new standard on our current accounting policies and internal controls and the software changes required to implement the new standard. Our revenue recognition policies related to gift card breakage, customer loyalty programs, credit card income and principal versus agent considerations will change. Whereas we currently recognize gift card breakage, net of required escheatment, 60 months after the gift card is issued, we will in the future recognize gift card breakage, net of required escheatment, over the redemption pattern of gift cards. Additionally, whereas we utilize the incremental cost method to account for our customer loyalty programs, we will in the future account for our customer loyalty programs as revenue which will require us to defer a portion of our sales to loyalty rewards to be earned by reward members for a future discount on a future sale. We have also evaluated the classification of profit sharing income earned in connection with our private label credit card and co-branded MasterCard® programs owned and serviced by Synchrony Financial (Synchrony). Under our agreement with Synchrony, we receive cash payments from Synchrony based upon the performance of the credit card portfolios. Currently the income we earn under our agreement with Synchrony is included as an offset to SG&A expenses. In connection with the adoption of the new standard, we plan to change our presentation to include such income in a separate line item described as Credit card income and other. Further, we evaluated certain contracts for principal versus agent considerations and where we currently consider ourselves to be the principal (report gross sales) or the agent (report net sales) based on our risk and rewards in a sales transaction, we will in the future assess principal versus agent considerations depending on our control of the good or service before it is transferred to the customer. Upon our retrospective adoption of ASC 606 on February 4, 2018, we recorded a $4 million transition adjustment that increased our Retained earnings/(accumulated deficit) and on a retrospective basis our Net sales increased by $48 million in 2017 and by $24 million in 2016 and our Net income/(loss) decreased by a loss of $2 million in 2017 and $18 million in 2016. | |
Accounting Standards Update 2017-07 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Description | In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU 2017-07 requires companies to present the service cost component of net benefit cost in the same line items in which they report compensation cost. Companies will present all other components of net benefit cost outside of operating income, if this subtotal is presented. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods therein. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued or made available for issuance. Entities should apply this guidance retrospectively for the presentation of the service cost component and the other components of net periodic pension cost in the income statement and prospectively, on and after the effective date, for any capitalization of the service cost component of net periodic pension cost in assets. Upon our retrospective adoption of ASU 2017-07 on February 4, 2018, we changed the presentation of our Consolidated Statement of Operations to exclude the Pension line item and to reflect the service cost component of our pension expense/(income) in SG&A and to reflect all other cost components as in a new separate line item below operating income/(loss) described as Other components of net periodic pension cost/(income). | |
Accounting Standards Update 2018-02 [Member] | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
New Accounting Pronouncement or Change in Accounting Principle, Description | In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This standard focuses on a targeted improvement to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) enacted on December 22, 2017 from Accumulated other comprehensive income/(loss) to Retained earnings/accumulated deficit. The amount of the reclassification would be the difference between the amount initially charged or credited directly to other comprehensive income at the previously enacted U.S. federal corporate income tax rate that remains in Accumulated other comprehensive income/(loss) and the amount that would have been charged or credited directly to Other comprehensive income/(loss) using the newly enacted U.S. federal corporate income tax rate, excluding the effect of any valuation allowance previously charged to Net income/(loss). ASU 2018-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the effect that the new accounting guidance will have on our Consolidated Balance Sheet. | |
Accounting Standards Update 2016-02 [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. | |
Accounting Standards Update 2016-15 [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 | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 03, 2018 |
[1] | Oct. 28, 2017 |
[1] | Jul. 29, 2017 |
[1] | Apr. 29, 2017 |
[1] | Jan. 28, 2017 |
[1] | Oct. 29, 2016 |
[1] | Jul. 30, 2016 |
[1] | Apr. 30, 2016 |
[1] | Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|||
Earnings Per Share [Abstract] | |||||||||||||||||||||
Net income/(loss) | $ (116) | $ 1 | $ (513) | ||||||||||||||||||
Weighted average common shares outstanding (basic shares) | 311.1 | 308.1 | 305.9 | ||||||||||||||||||
Stock options and restricted stock awards | 0.0 | 4.9 | 0.0 | ||||||||||||||||||
Weighted average shares assuming dilution (diluted shares) | 311.1 | 313.0 | 305.9 | ||||||||||||||||||
Basic | $ (0.37) | $ 0.00 | $ (1.68) | ||||||||||||||||||
Diluted | $ 0.81 | $ (0.41) | $ (0.20) | $ (0.58) | $ 0.61 | $ (0.22) | $ (0.18) | $ (0.22) | $ (0.37) | $ 0.00 | $ (1.68) | ||||||||||
Stock options, restricted stock awards and a warrant | 31.5 | 17.8 | 34.1 | ||||||||||||||||||
|
Other Assets (Details) - USD ($) $ in Millions |
Feb. 03, 2018 |
Jan. 28, 2017 |
||
---|---|---|---|---|
Other Assets, Noncurrent Disclosure [Abstract] | ||||
Capitalized software, net | $ 300 | $ 265 | ||
Indefinite-lived intangible assets, net (1) | [1] | 275 | 275 | |
Revolving credit facility unamortized costs, net | 28 | 30 | ||
Interest rate swaps (Notes 9 and 10) | 9 | 0 | ||
Realty investments (Note 18) | 5 | 13 | ||
Other | 44 | 35 | ||
Total | $ 661 | $ 618 | ||
|
Other Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions |
Feb. 03, 2018 |
Jan. 28, 2017 |
---|---|---|
Accounts Payable and Accrued Liabilities, Current [Abstract] | ||
Accrued salaries, vacation and bonus | $ 193 | $ 204 |
Customer gift cards | 203 | 215 |
Taxes other than income taxes | 102 | 127 |
Occupancy and rent-related | 28 | 35 |
Interest | 67 | 78 |
Advertising | 77 | 82 |
Current portion of workers’ compensation and general liability self-insurance | 44 | 47 |
Restructuring and management transition (Note 17) | 26 | 29 |
Current portion of retirement plan liabilities (Note 16) | 29 | 26 |
Capital expenditures | 58 | 33 |
Unrecognized tax benefits (Note 19) | 2 | 3 |
Other | 292 | 288 |
Total | $ 1,119 | $ 1,164 |
Other Liabilities (Details) - USD ($) $ in Millions |
Feb. 03, 2018 |
Jan. 28, 2017 |
---|---|---|
Other Liabilities, Noncurrent [Abstract] | ||
Supplemental pension and other postretirement benefit plan liabilities (Note 16) | $ 153 | $ 126 |
Long-term portion of workers’ compensation and general liability insurance | 121 | 131 |
Deferred developer/tenant allowances | 139 | 143 |
Deferred rent liability | 97 | 97 |
Primary pension plan (Note 16) | 0 | 18 |
Interest rate swaps (Notes 9 and 10) | 0 | 10 |
Restructuring and management transition (Note 17) | 15 | 2 |
Other | 42 | 56 |
Total | $ 567 | $ 583 |
Derivative Financial Instruments (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
May 07, 2015 |
||||
Derivatives, Fair Value [Line Items] | |||||||
Gain/(loss) recognized in other comprehensive income/(loss) | [1] | $ 6 | $ 3 | $ (23) | |||
Derivative, Notional Amount | $ 1,250 | ||||||
Interest rate swaps | 0 | 10 | |||||
Interest Rate Cash Flow Hedge Asset at Fair Value | $ 9 | 0 | |||||
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 | $ 1 | 2 | |||||
Other Assets [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Interest Rate Cash Flow Hedge Asset at Fair Value | 9 | ||||||
Accumulated Other Comprehensive Income/(Loss) [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gain/(loss) recognized in other comprehensive income/(loss) | [1] | 9 | 5 | ||||
Other Liabilities [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Interest rate swaps | 0 | 10 | |||||
Total [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Interest rate swaps | 1 | 12 | |||||
Interest Rate Cash Flow Hedge Asset at Fair Value | 9 | ||||||
Interest Expense [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | (10) | $ (13) | |||||
Fair Value, Inputs, Level 2 [Member] | |||||||
Derivatives, Fair Value [Line Items] | |||||||
Derivative Asset | $ 9 | ||||||
|
Fair Value Disclosures (Other Financial Instruments) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
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 | $ 4,063 | $ 4,665 | |
Asset impairments | 0 | 0 | $ 20 |
Long-term debt, including current maturities, Fair Value | 3,607 | $ 4,495 | |
Carrying value of long-lived assets impaired, fair value disclosure | 86 | ||
Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative Asset | 9 | ||
Assets, Fair Value Disclosure, Nonrecurring | 9 | ||
Home Office And Stores [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Asset impairments | $ 77 |
Credit Facility (Details) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Jul. 29, 2017 |
Feb. 03, 2018
USD ($)
|
|
Line of Credit Facility [Line Items] | ||
2017 Credit Facility | $ 2,350 | |
Revolving Facility, maximum borrowing capacity | 2,350 | |
2017 Credit Facility, interest rate spread lowered, basis points | 75 | |
Current Borrowing Capacity Before Standby And Import Letters Of Credit | $ 2,019 | |
2017 Credit Facility, description | The 2017 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 2017 Credit Facility are guaranteed by J. C. Penney Company, Inc. | |
2017 Credit Facility, Expiration Date | Jun. 20, 2022 | |
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 | $ 135 | |
Revolving Facility, commitment fee percentage on unused capacity | 0.375% | |
Revolving Facility, remaining borrowing capacity | $ 1,884 | |
Domestic Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving Facility, interest rate at period end | 1.75% | |
Foreign Line of Credit [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving Facility, interest rate at period end | 0.875% |
Long-Term Debt (Debt Issues) (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Apr. 30, 2016 |
||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 4,063 | $ 4,665 | ||||
Unamortized debt issuance costs | (51) | (63) | ||||
Total long-term debt | $ 3,780 | $ 4,339 | ||||
Weighted-average interest rate at year end | 6.10% | 6.30% | ||||
Weighted-average maturity (in years) | 16 years | |||||
Debt Instrument, Repurchased Face Amount | $ 40 | $ 60 | ||||
Less: current maturities | (232) | $ (263) | ||||
7.95% Debentures Due 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate (percent) | 7.95% | |||||
Unsecured Long-term Debt, Noncurrent | $ 0 | $ 220 | ||||
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] | $ 190 | $ 265 | |||
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 | $ 175 | $ 400 | ||||
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] | $ 360 | $ 400 | |||
2016 Term Loan Facility (Matures in 2023) | ||||||
Debt Instrument [Line Items] | ||||||
Secured Debt | $ 1,625 | $ 1,667 | ||||
5.875% Senior Secured Notes Due 2023 (1) | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate (percent) | 5.875% | 5.875% | ||||
Secured Debt | [1] | $ 500 | $ 500 | |||
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 | ||||
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 | ||||
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 | $ 388 | |||
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 | $ 313 | ||||
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 | ||||
|
Long-Term Debt (Financial Covenants) (Details) |
12 Months Ended |
---|---|
Feb. 03, 2018 | |
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. |
Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Debt Repurchase Provision, Percentage of Outstanding Principal | 101.00% |
Debt Repurchase Provision, Required Beneficial Ownership Change | 50.00% |
Long-Term Debt (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Feb. 03, 2018 |
Jul. 29, 2017 |
Jan. 28, 2017 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Repurchased Face Amount | $ 40,000,000 | $ 60,000,000 | $ 40,000,000 | |||||
Proceeds from issuance of long-term debt | 0 | $ 2,188,000,000 | $ 0 | |||||
Loss on extinguishment of debt | $ (2,000,000) | $ 34,000,000 | $ (4,000,000) | $ 33,000,000 | $ 30,000,000 | $ 10,000,000 | ||
2013 Term Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Repurchased Face Amount | 2,250,000,000 | |||||||
8.125% Senior Notes Due 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, stated interest rate (percent) | 8.125% | 8.125% | 8.125% | 8.125% | ||||
Unsecured Long-term Debt, Noncurrent | $ 175,000,000 | $ 400,000,000 | $ 175,000,000 | $ 400,000,000 | ||||
2016 Term Loan Facility (Matures in 2023) | ||||||||
Debt Instrument [Line Items] | ||||||||
2016 Term Loan Facility, basis spread on variable interest rate | 4.25% | |||||||
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% | 5.875% | 5.875% | ||||
Secured Long-term Debt, Noncurrent | 500,000,000 | |||||||
Portions of Senior Notes due 2018 and Senior Notes due 2019 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Loss on extinguishment of debt | $ 34,000,000 | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Loss on extinguishment of debt | $ 1,000,000 | |||||||
2016 Term Loan Facility (Matures in 2023) | ||||||||
Debt Instrument [Line Items] | ||||||||
2016 Term Loan Facility, face amount | $ 1,688,000,000 | |||||||
2016 Term Loan Facility, term | 7 years | |||||||
2016 Term Loan Facility, required quarterly principal payment | $ 10,550,000.00 |
Long-Term Debt (Annual Principal Payments) (Details) - USD ($) $ in Millions |
Feb. 03, 2018 |
Jan. 28, 2017 |
---|---|---|
Debt Disclosure [Abstract] | ||
2018 | $ 232 | |
2019 | 217 | |
2020 | 402 | |
2021 | 42 | |
2022 | 42 | |
Thereafter | 3,128 | |
Total | $ 4,063 | $ 4,665 |
Stockholders' Equity (Accumulated Other Comprehensive Income/ (Loss) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of the beginning of the period | $ 1,354 | $ 1,309 | $ 1,914 |
Current period change, accumulated other comprehensive income/(loss) | 113 | 18 | (141) |
Balance as of the end of the period | 1,379 | 1,354 | 1,309 |
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 | (330) | (421) | (423) |
Current period change, pension and postretirement benefits | 91 | 2 | |
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 | (26) | (33) | (38) |
Current period change, pension and postretirement benefits | 7 | 5 | |
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 | 2 | 0 | |
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax | 0 | (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 | 13 | 11 | |
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax | (4) | (17) | (28) |
Accumulated Other Comprehensive Income/(Loss) [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance as of the beginning of the period | (473) | (491) | (350) |
Current period change, accumulated other comprehensive income/(loss) | 113 | 18 | (141) |
Balance as of the end of the period | $ (360) | $ (473) | $ (491) |
Stockholders' Equity Stockholders' Equity (Reclassifications Out of Accumulated Other Comprehensive Income/ (Loss) (Details) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Reclassification for amortization of prior service (credit)/cost (5) | [1] | $ 4 | $ 0 | $ 2 | |
Other Comprehensive Income Loss Reclassification Pension And Other Postretirement Benefit Plans Settlement Adjustment In Net Periodic Benefit Cost Gross Amount | (13) | (180) | |||
Other comprehensive income/(loss) | 113 | 18 | (141) | ||
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 | 0 | 9 | 0 | ||
Amortization of prior service (credit)/cost | $ 0 | $ (8) | $ (7) | ||
|
Stockholders' Equity (Common Stock) (Details) - $ / shares shares in Millions |
Feb. 03, 2018 |
Jan. 27, 2014 |
---|---|---|
Schedule of Capitalization, Equity [Line Items] | ||
Common stock Issued, par value per share | $ 0.5 | $ 0.50 |
Shares held in 401(k) plan, including ESOP | 13 | |
Percent of shares held in 401(k) plan, including ESOP | 4.30% |
Stockholders' Equity (Preferred Stock) (Details) |
Feb. 03, 2018
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 |
Feb. 03, 2018 |
|
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
|
Feb. 03, 2018
$ / shares
|
|
Stockholders' Equity (Stockholders Agreements) [Line Items] | ||
Common stock, par value per share | $ 0.50 | $ 0.5 |
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 | |||
---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
May 20, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options and restricted stock, percent of total outstanding stock | 2.50% | |||
Stock options, weighted average grant date fair value | $ 2.91 | $ 4.89 | $ 3.48 | |
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 | 12,700,000 | |||
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 | $ 9 | |||
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 | ||||
---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation (1) | [1] | $ 25 | $ 35 | $ 44 | |
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) | 18 | 27 | 32 | ||
Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total stock-based compensation (1) | 7 | 8 | 12 | ||
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 | $ 2 | $ 0 | $ 9 | ||
|
Stock-Based Compensation (Stock Options Activity) (Details) $ / shares in Units, shares in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Feb. 03, 2018
USD ($)
$ / shares
shares
| ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Outstanding stock options, beginning balance | shares | 14,418 | |||
Stock Options, Granted | shares | 3,318 | |||
Stock Options, Exercised | shares | 0 | |||
Stock Options, Forfeited/canceled | shares | (3,461) | |||
Outstanding stock options, ending balance | shares | 14,275 | |||
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 | $ 18 | |||
Weighted-Average Exercise Price Per Share, Granted | $ / shares | 6 | |||
Weighted-Average Exercise Price Per Share, Exercised | $ / shares | 0 | |||
Weighted-Average Exercise Price Per Share, Forfeited/canceled | $ / shares | 24 | |||
Weighted-Average Exercise Price Per Share, ending balance | $ / shares | $ 14 | |||
Weighted-Average Remaining Contractual Term, Outstanding | 5 years 6 months | |||
Aggregate Intrinsic Value, Outstanding | $ | $ 0 | [1] | ||
Stock Options, Exercisable | shares | 7,446 | |||
Weighted-Average Exercise Price Per Share, Exercisable | $ / shares | $ 19 | |||
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 | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Share-based Compensation [Abstract] | |||
Proceeds from stock options exercised | $ 0 | $ 2 | $ 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) |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|||
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 | ||||
Weighted-average expected option term | 4 years 7 months | 4 years 8 months | 4 years 7 months | ||
Weighted-average expected volatility | 57.90% | 54.22% | 51.46% | ||
Weighted-average risk-free interest rate | 2.02% | 1.38% | 1.50% | ||
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 |
---|---|
Feb. 03, 2018
$ / 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 | 5,818 |
Granted, Stock Awards | shares | 2,859 |
Vested, Stock Awards | shares | (3,218) |
Forfeited/canceled, Stock Awards | shares | (1,011) |
Non-vested Stock Awards, ending balance | shares | 4,448 |
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 | 6 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 8 |
Forfeited/canceled, Weighted-Average Grant Date Fair Value | $ / shares | 8 |
Non-vested Weighted-Average Grant Date Fair Value, end of year | $ / shares | $ 7 |
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 | 3,128 |
Granted, Stock Awards | shares | 1,727 |
Vested, Stock Awards | shares | (262) |
Forfeited/canceled, Stock Awards | shares | (659) |
Non-vested Stock Awards, ending balance | shares | 3,934 |
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 | $ 8 |
Granted, Weighted-Average Grant Date Fair Value | $ / shares | 6 |
Vested, Weighted-Average Grant Date Fair Value | $ / shares | 6 |
Forfeited/canceled, Weighted-Average Grant Date Fair Value | $ / shares | 8 |
Non-vested Weighted-Average Grant Date Fair Value, end of year | $ / shares | $ 7 |
Stock-Based Compensation (Stock Awards) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Mar. 06, 2017 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock awards vested in period, aggregate market value | $ 17 | $ 30 | $ 16 | |
Stock awards, aggregate grant date fair value | 27 | $ 28 | $ 27 | |
Deferred Compensation Liability, Current and Noncurrent | $ 11 | |||
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 | 3.3 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Maximum Award Settlement, Per Share | $ 11.92 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Outstanding, Grant Date Fair Value | $ 3.54 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 22 | |||
Weighted average period over which unrecognized compensation is expected to be recognized (years) | 2 years |
Leases (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Operating Leased Assets [Line Items] | |||
Financing Transaction, Gross Proceeds | $ 273 | ||
Net proceeds from financing obligation | $ 0 | 216 | $ 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, Operating Lease, Term of Contract | 3 years | ||
Maximum [Member] | |||
Operating Leased Assets [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 20 years | ||
Maximum [Member] | Data processing equipment and other personal property [Member] | |||
Operating Leased Assets [Line Items] | |||
Lessee, Operating Lease, Term of Contract | 5 years |
Leases (Rent Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|||
Operating Leases, Rent Expense [Line Items] | |||||
Total rent expense | $ 214 | $ 252 | $ 267 | ||
Less: sublease income (1) | [1] | (11) | (11) | (11) | |
Net rent expense | 203 | 241 | 256 | ||
Real property base rent and straight-lined step rent expense [Member] | |||||
Operating Leases, Rent Expense [Line Items] | |||||
Real/personal property, rent expense | 177 | 214 | 221 | ||
Real property contingent rent expense (based on sales) [Member] | |||||
Operating Leases, Rent Expense [Line Items] | |||||
Real property contingent rent expense (based on sales) | 8 | 7 | 7 | ||
Personal property rent expense [Member] | |||||
Operating Leases, Rent Expense [Line Items] | |||||
Real/personal property, rent expense | $ 29 | $ 31 | $ 39 | ||
|
Leases (Future Minimum Lease Payments) (Details) $ in Millions |
Feb. 03, 2018
USD ($)
|
---|---|
Leases [Abstract] | |
2018, Operating | $ 211 |
2019, Operating | 187 |
2020, Operating | 169 |
2021, Operating | 150 |
2022, Operating | 132 |
Thereafter, Operating | 1,686 |
Less: sublease payments, Operating | (51) |
Total minimum lease payments, Operating | 2,484 |
2018, Capital | 21 |
2019, Capital | 21 |
2020, Capital | 19 |
2021, Capital | 19 |
2022, Capital | 19 |
Thereafter, Capital | 186 |
Total minimum lease payments, Capital | 285 |
Amount Representing Residual Asset Balance | 77 |
Less: amounts representing interest | (142) |
Present value of net minimum lease obligations, financing obligation and note payable | $ 220 |
Retirement Benefit Plans (Net Periodic Expense) (Details) $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 07, 2015
USD ($)
employee
|
Aug. 03, 2015
employee
|
Apr. 29, 2017
USD ($)
employee
|
Jan. 30, 2016
USD ($)
|
Jan. 30, 2016
USD ($)
|
Oct. 31, 2015
employee
|
Feb. 03, 2018
USD ($)
|
Jan. 28, 2017
USD ($)
|
Jan. 30, 2016
USD ($)
|
||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||
Discount rate | 4.73% | 4.73% | 3.98% | 4.40% | 4.73% | |||||||
Defined benefit plan, description of plan amendment | In 2017, the Company initiated a Voluntary Early Retirement Program (VERP) for approximately 6,000 eligible associates. Eligibility for the VERP included 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 ended on March 31, 2017. Based on the approximately 2,800 associates who elected to accept the VERP, we incurred a total charge of $112 million for enhanced retirement benefits. The enhanced retirement benefits increased the projected benefit obligation (PBO) of the Primary Pension Plan and the Supplemental Pension Plans by $88 million and $24 million, respectively. In addition, we incurred curtailment charges of $6 million related to our Primary Pension Plan and $2 million related to Supplemental Pension Plans as a result of the reduction in the expected years of future service related to these plans. Additionally, we recognized settlement expense of $13 million in 2017 due to higher lump-sum payment activity to retirees primarily as a result of the VERP executed earlier in the year. 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. | |||||||||||
Funded status of plan percentage, description | As of the end of 2017, the funded status of the Primary Pension Plan was 102%. 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, 2017 and 2016, 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 | |||||||||||
Special termination benefits (1) | $ 112 | |||||||||||
Participants Who Separated From Service and Accepted | employee | 1,900 | |||||||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||||||
Net periodic benefit expense/(income) | $ 21 | $ 19 | $ 162 | |||||||||
Number of employees eligible for VERP | employee | 6,000 | |||||||||||
Number of employees accepted VERP | employee | 2,800 | |||||||||||
Pension Plan [Member] | ||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||
Defined Benefit Plan, Expected Future Benefit Payment, Next Twelve Months | 195 | |||||||||||
Defined Benefit Plan, Expected Future Benefit Payment, Five Fiscal Years Thereafter | 1,080 | |||||||||||
Settlements | 217 | 0 | ||||||||||
Balance at measurement date | $ 3,327 | $ 3,327 | 3,467 | 3,473 | 3,327 | |||||||
Number of retirees for which pension obligation transferred | employee | 18,000 | |||||||||||
DefinedBenefitPlansandOtherPostretirementBenefitPlansTransferredPensionBenefitObligation | $ 838 | |||||||||||
Payments for lump sum settlement | 717 | |||||||||||
Special termination benefits (1) | 88 | [1] | 0 | |||||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||||||
Service cost | 42 | 55 | 69 | |||||||||
Interest cost | 143 | 153 | 196 | |||||||||
Expected return on plan assets | (216) | (215) | (357) | |||||||||
Actuarial loss/(gain) | 0 | 0 | 52 | |||||||||
Amortization of prior service cost/(credit) | 7 | 8 | 8 | |||||||||
Settlement expense | (180) | 13 | 0 | 180 | ||||||||
Other | 0 | 0 | 6 | |||||||||
Net periodic benefit expense/(income) | $ (11) | 1 | 154 | |||||||||
Defined benefit plan increase (decrease) due to enhanced retirement benefits | $ 88 | |||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | 6 | |||||||||||
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 | |||||||||||
Supplemental Employee Retirement Plan [Member] | ||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||
Defined Benefit Plan, Expected Future Benefit Payment, Next Twelve Months | $ 29 | |||||||||||
Defined Benefit Plan, Expected Future Benefit Payment, Five Fiscal Years Thereafter | 44 | |||||||||||
Settlements | $ 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 | $ 182 | 152 | 176 | |||||||
Special termination benefits (1) | 24 | [1] | 0 | |||||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||||||
Service cost | 0 | 0 | 0 | |||||||||
Interest cost | 7 | 7 | 7 | |||||||||
Actuarial loss/(gain) | 25 | 11 | 1 | |||||||||
Amortization of prior service cost/(credit) | 0 | 0 | 0 | |||||||||
Net periodic benefit expense/(income) | 32 | 18 | 8 | |||||||||
Defined benefit plan increase (decrease) due to enhanced retirement benefits | 24 | |||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Curtailment | $ 2 | |||||||||||
Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||||||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||||||
Net periodic benefit expense/(income) | (17) | (7) | ||||||||||
Primary and Supplemental Pension Plans Total [Member] | ||||||||||||
Net Periodic Benefit Expense/(Income) [Abstract] | ||||||||||||
Service cost | 42 | 55 | 69 | |||||||||
Interest cost | 150 | 160 | 203 | |||||||||
Expected return on plan assets | (216) | (215) | (357) | |||||||||
Actuarial loss/(gain) | 25 | 11 | 53 | |||||||||
Amortization of prior service cost/(credit) | 7 | 8 | 8 | |||||||||
Settlement expense | 13 | 0 | 180 | |||||||||
Other | 0 | 0 | 6 | |||||||||
Net periodic benefit expense/(income) | $ 21 | $ 19 | $ 162 | |||||||||
Social Security Benefits [Member] | ||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||
Employee retirement age | 62 years | |||||||||||
Minimum [Member] | Supplemental Employee Retirement Plan [Member] | ||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||
Employee retirement age for equal social security benefits | 60 years | |||||||||||
Maximum [Member] | Supplemental Employee Retirement Plan [Member] | ||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||||
Employee retirement age for equal social security benefits | 62 years | |||||||||||
|
Retirement Benefit Plans (Expense Actuarial Assumptions) (Details) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||
Expected return on plan assets | 6.50% | 6.75% | 6.75% | |||
Discount rate | 4.40% | [1] | 4.73% | 3.87% | ||
Salary increase | 3.90% | 3.90% | 3.50% | |||
Discount rate | 3.98% | 4.40% | 4.73% | |||
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 | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||
Liability, Defined Benefit Pension Plan, Noncurrent | $ 0 | $ 18 | ||||||||
Prepaid pension | 61 | 0 | ||||||||
Change in fair value of plan assets | ||||||||||
Increase/(Decrease) in funded status of plan | $ (79) | |||||||||
Actual return on plan assets (percent) | 14.10% | |||||||||
Cumulative return on plan assets since inception (percent) | 9.00% | |||||||||
Pension Plan [Member] | ||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||||||||
Prepaid pension | $ 61 | |||||||||
Liability, Defined Benefit Plan, Noncurrent | 18 | |||||||||
Funded status of the plan (percent) | 102.00% | |||||||||
Change in APBO | ||||||||||
Beginning balance | $ 3,473 | 3,327 | ||||||||
Service cost | 42 | 55 | $ 69 | |||||||
Interest cost | 143 | 153 | 196 | |||||||
Actuarial loss/(gain) | 126 | 151 | ||||||||
Balance at measurement date | 3,467 | 3,473 | 3,327 | |||||||
Change in fair value of plan assets | ||||||||||
Beginning Balance | 3,455 | 3,287 | ||||||||
Company contributions | 0 | 0 | ||||||||
Actual return on assets | [1] | 451 | 381 | |||||||
Balance at measurement date | 3,528 | 3,455 | 3,287 | |||||||
Funded status of the plan | [2] | 61 | (18) | |||||||
Settlements | (217) | 0 | ||||||||
Curtailments | (27) | 0 | ||||||||
Defined Benefit Plan, Benefit Obligation, Benefits Paid | 161 | 213 | ||||||||
Supplemental Employee Retirement Plan [Member] | ||||||||||
Change in APBO | ||||||||||
Beginning balance | 152 | 176 | ||||||||
Service cost | 0 | 0 | 0 | |||||||
Interest cost | 7 | 7 | 7 | |||||||
Actuarial loss/(gain) | 31 | 10 | ||||||||
Balance at measurement date | 182 | 152 | 176 | |||||||
Change in fair value of plan assets | ||||||||||
Beginning Balance | 0 | 0 | ||||||||
Company contributions | 35 | 41 | ||||||||
Actual return on assets | 0 | 0 | ||||||||
Balance at measurement date | 0 | 0 | $ 0 | |||||||
Funded status of the plan | [3] | (182) | (152) | |||||||
Current portion of pension plan liability accrued | 29 | 26 | ||||||||
Settlements | 0 | 0 | ||||||||
Curtailments | 3 | 0 | ||||||||
Defined Benefit Plan, Benefit Obligation, Benefits Paid | $ 35 | $ 41 | ||||||||
Exceeded 100% [Member] | Pension Plan [Member] | ||||||||||
Change in fair value of plan assets | ||||||||||
Defined Benefit Plan, Funded Percentage | 100.00% | |||||||||
|
Retirement Benefit Plans (Accumulated Other Comprehensive (Loss)/Income) (Details) - USD ($) $ in Millions |
Feb. 03, 2018 |
Jan. 28, 2017 |
|||
---|---|---|---|---|---|
Supplemental Employee Retirement Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Net loss/(gain) | $ 18 | $ 12 | |||
Prior service cost/(credit) | (3) | (4) | |||
Defined Benefit Plan, Accumulated Other Comprehensive Income, before Tax, Total | 15 | 8 | |||
Pension Plan [Member] | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Net loss/(gain) | 169 | 318 | |||
Prior service cost/(credit) | 37 | 49 | |||
Defined Benefit Plan, Accumulated Other Comprehensive Income, before Tax, Total | 206 | [1] | $ 367 | ||
Defined Benefit Plan, Amounts that Will be Amortized from Accumulated Other Comprehensive Income (Loss) in Next Fiscal Year | $ 7 | ||||
|
Retirement Benefit Plans (Benefit Obligation Actuarial Assumptions) (Details) |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|---|
Retirement Benefits [Abstract] | |||
Discount rate | 3.98% | 4.40% | 4.73% |
Salary progression rate | 3.80% | 3.90% | 3.90% |
Retirement Benefit Plans Retirement Benefit Plans (Accumulated Benefit Obligation) (Details) - USD ($) $ in Millions |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
---|---|---|---|
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | $ 3,200 | $ 3,200 | |
Fair value of plan assets | 3,528 | 3,455 | $ 3,287 |
Supplemental Employee Retirement Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Accumulated benefit obligation | 167 | 133 | |
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 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Actual plan asset allocations | 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 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. | |||
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. 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] | ||||
Defined Benefit Plan, Target Allocation Percentage | 15% - 35% | |||
Actual plan asset allocations | 23.00% | 22.00% | ||
Fixed income total [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Target Allocation Percentage | 55% - 70% | |||
Actual plan asset allocations | 62.00% | 60.00% | ||
Real estate, cash and other [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Target Allocation Percentage | 10% - 20% | |||
Actual plan asset allocations | 15.00% | 18.00% | ||
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ 180 | $ (13) | $ 0 | $ (180) |
Retirement Benefit Plans (Investments at Fair Value) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Total investment assets at fair value | $ 3,981 | $ 3,886 | |||||||||||
Total investment liabilities at fair value | (842) | ||||||||||||
Accounts payable, net | (47) | (76) | |||||||||||
Defined Benefit Plans Fair Value Total Investments at NAV | 436 | [1] | (579) | [2] | |||||||||
Total net assets | $ 3,528 | 3,455 | |||||||||||
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 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, depending on the type of investment, are valued at the reported NAV as fair value or 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. | ||||||||||||
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 | 642 | [3] | 573 | [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 | 3,325 | [3] | 3,306 | [4] | |||||||||
Total investment liabilities at fair value | (842) | [3] | (934) | [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 | 14 | 7 | |||||||||||
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 | 100 | 88 | |||||||||||
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 | 100 | [3] | 88 | [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 | 118 | 90 | |||||||||||
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 | 18 | [3] | 2 | [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 | 100 | [3] | 88 | [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 | 18 | 2 | |||||||||||
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 | 18 | [3] | 2 | [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 | 741 | 682 | |||||||||||
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 | 586 | [3] | 534 | [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 | 155 | [3] | 148 | [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 | 155 | 148 | |||||||||||
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 | 155 | [3] | 148 | [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 | 426 | 421 | |||||||||||
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 | 426 | [3] | 421 | [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 | 160 | 113 | |||||||||||
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 | 160 | [3] | 113 | [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 | 3,084 | 3,062 | |||||||||||
Investment liabilities at fair value | (842) | (934) | |||||||||||
Total investment liabilities at fair value | (934) | ||||||||||||
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 | 3,070 | [3] | 3,055 | [4] | |||||||||
Investment liabilities at fair value | (842) | [3] | (934) | [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 | 14 | 7 | |||||||||||
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 | 904 | 864 | |||||||||||
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 | 904 | [3] | 864 | [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 | 992 | 926 | |||||||||||
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 | 982 | [3] | 919 | [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 | 10 | 7 | |||||||||||
Swaps [Member] | |||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||||||||||
Investments at fair value | 848 | 934 | |||||||||||
Investment liabilities at fair value | (837) | (928) | |||||||||||
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 | 848 | [3] | 934 | [4] | |||||||||
Investment liabilities at fair value | (837) | [3] | (928) | [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 | 6 | 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 | 6 | [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 | 187 | 185 | |||||||||||
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 | 187 | [3] | 185 | [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 | 147 | 149 | |||||||||||
Investment liabilities at fair value | (5) | (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 | 143 | [3] | 149 | [4] | |||||||||
Investment liabilities at fair value | (5) | [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 | 4 | 0 | |||||||||||
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 | 38 | 52 | |||||||||||
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 | 38 | [3] | 37 | [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 | 0 | [3] | 15 | [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 | 38 | 37 | |||||||||||
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 | 38 | [3] | 37 | [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 | ||||||||||||
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 | [4] | 0 | |||||||||||
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 | [4] | 15 | |||||||||||
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 | ||||||||||||
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 | (191) | [1] | (220) | [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 | 62 | [1] | 135 | [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 | $ 183 | [1] | $ 224 | [2] | |||||||||
|
Retirement Benefit Plans (Level 3 Investment Assets) (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 03, 2018
USD ($)
manager
|
Jan. 28, 2017
USD ($)
|
|
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 | $ 7 | $ 5 |
Transfers, net | 0 | |
Realized gains | (7) | 3 |
Unrealized gains/(losses) | 6 | (4) |
Purchases and issuances | 6 | 15 |
Sales, maturities and settlements | (2) | (12) |
Balance, end of year | 10 | 7 |
Corporate loans [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of year | 0 | 3 |
Transfers, net | 0 | |
Realized gains | 0 | 0 |
Unrealized gains/(losses) | 0 | 0 |
Purchases and issuances | 4 | 0 |
Sales, maturities and settlements | 0 | (3) |
Balance, end of year | $ 4 | $ 0 |
Retirement Benefits Plans (Estimated Future Benefit Payments) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 30, 2016 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 21 | $ 19 | $ 162 | |
Primary and Supplemental Pension Plans Total [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 7 | 8 | 8 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 21 | 19 | 162 | |
Defined Benefit Plan, Service Cost | 42 | 55 | 69 | |
Defined Benefit Plan, Interest Cost | 150 | 160 | 203 | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | (13) | 0 | (180) | |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 7 | 8 | 8 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | (11) | 1 | 154 | |
Defined Benefit Plan, Service Cost | 42 | 55 | 69 | |
Defined Benefit Plan, Interest Cost | 143 | 153 | 196 | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | ||||
2018 | 195 | |||
2019 | 196 | |||
2020 | 199 | |||
2021 | 202 | |||
2022 | 206 | |||
2023-2027 | 1,080 | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ 180 | (13) | 0 | (180) |
Supplemental Employee Retirement Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 0 | 0 | 0 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | 32 | 18 | 8 | |
Defined Benefit Plan, Service Cost | 0 | 0 | 0 | |
Defined Benefit Plan, Interest Cost | 7 | 7 | 7 | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | ||||
2018 | 29 | |||
2019 | 28 | |||
2020 | 26 | |||
2021 | 21 | |||
2022 | 8 | |||
2023-2027 | $ 44 | |||
Other Postretirement Benefit Plan, Defined Benefit [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ (17) | $ (7) |
Retirement Benefit Plans (Postretirement Plan (Income)) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jun. 07, 2005 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Net periodic benefit expense/(income) | $ (21) | $ (19) | $ (162) | |
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 | ||
Accumulated postretirement benefit obligation | $ 8 |
Retirement Benefit Plans (Defined Contribution Plans) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Defined Contribution Plan, Cost | $ 46 | $ 49 | $ 56 |
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, 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 | |||
---|---|---|---|---|
Feb. 03, 2018
USD ($)
|
Jan. 28, 2017
USD ($)
|
Jan. 30, 2016
USD ($)
|
Apr. 29, 2017
stores
|
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and management transition charges | $ 303 | $ 26 | $ 84 | |
Cumulative charges incurred to date | 1,033 | |||
Asset impairments | 0 | 0 | 20 | |
Severance Costs | 14 | |||
Home Office And Stores [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of stores announced closing | stores | 138 | |||
Restructuring and management transition charges | 52 | |||
Asset impairments | 77 | |||
VERP [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and management transition charges | 122 | 0 | 0 | |
Cumulative charges incurred to date | 122 | |||
Home Office And Stores [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and management transition charges | 176 | 8 | 42 | |
Cumulative charges incurred to date | 473 | |||
Management Transition [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and management transition charges | 0 | 3 | 28 | |
Cumulative charges incurred to date | 255 | |||
Other [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and management transition charges | 5 | $ 15 | $ 14 | |
Cumulative charges incurred to date | $ 183 |
Restructuring and Management Transition Cumulative Charges (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Home Office And Stores [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | $ 102 | $ 9 |
Restructuring Reserve [Roll Forward] | ||
Restructuring and management transition liability, beginning balance | 4 | 18 |
Cash payments | (72) | (23) |
Restructuring and management transition liability, ending balance | 34 | 4 |
Management Transition [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 0 | 3 |
Restructuring Reserve [Roll Forward] | ||
Restructuring and management transition liability, beginning balance | 0 | 10 |
Cash payments | 0 | (13) |
Restructuring and management transition liability, ending balance | 0 | 0 |
Other [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 5 | 15 |
Restructuring Reserve [Roll Forward] | ||
Restructuring and management transition liability, beginning balance | 27 | 23 |
Cash payments | (25) | (11) |
Restructuring and management transition liability, ending balance | 7 | 27 |
Total [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and Related Cost, Incurred Cost | 107 | 27 |
Restructuring Reserve [Roll Forward] | ||
Restructuring and management transition liability, beginning balance | 31 | 51 |
Cash payments | (97) | (47) |
Restructuring and management transition liability, ending balance | $ 41 | $ 31 |
Real Estate and Other, Net (Details) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Feb. 03, 2018
USD ($)
department_store
|
Jan. 28, 2017
USD ($)
|
Jan. 30, 2016
USD ($)
|
May 03, 2014
a
|
|
Real Estate Properties [Line Items] | ||||
Net gain on sale of non-operating assets | $ 0 | $ (5) | $ (9) | |
Investment income from Home Office Land Joint Venture | (31) | (28) | (41) | |
Net gain from sale of operating assets | 119 | 73 | 9 | |
Net gain from sale of operating assets | 62 | |||
Store and other asset impairments | 0 | 0 | 20 | |
Other | 4 | (5) | 42 | |
Total expense/(income) | (146) | (111) | 3 | |
Area of Land | a | 220 | |||
Payments for (Proceeds from) Investments | $ 0 | (2) | (13) | |
Number of stores | department_store | 872 | |||
Proceeds from sale of operating assets | 80 | |||
Proceeds from Equity Method Investment, Distribution | $ 40 | $ 44 | ||
Net sale price of Buena Park CA distribution facility | 131 | |||
Net gain on sale of Buena Park CA distribution facility | $ 111 | |||
Litigation Settlement, Expense | $ 50 |
Income Taxes (Components of Income Tax (Benefits)/Expense) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Effective income tax rate reconciliation, U. S. Tax Cuts and Jobs Act of 2017, Amount | $ (75) | $ 0 | $ 0 |
Federal and foreign, Current | (64) | (12) | 5 |
State and local, Current | 22 | 4 | 6 |
Total, Current | (42) | (8) | 11 |
Federal and foreign, Deferred | (59) | 9 | (1) |
State and local, Deferred | (25) | 0 | (1) |
Total, Deferred | (84) | 9 | (2) |
Total income tax expense/(benefit) | $ (126) | $ 1 | $ 9 |
Income Taxes (Reconciliation of the Statutory Federal Income Tax Rate) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal income tax at statutory rate | $ (82) | $ 1 | $ (176) |
State and local income tax, less federal income tax benefit | (12) | (2) | (21) |
Increase/(decrease) in valuation allowance | 33 | (1) | 185 |
Effect of U.S. tax reform | (75) | 0 | 0 |
Other, including permanent differences and credits | 10 | 3 | 21 |
Total income tax expense/(benefit) | $ 126 | $ (1) | $ (9) |
Income Taxes (Components of Deferred Tax Assets/(Liabilities)) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Merchandise inventory | $ 10 | $ 27 |
Accrued vacation pay | 8 | 17 |
Gift cards | 57 | 98 |
Stock-based compensation | 30 | 58 |
State taxes | 5 | 12 |
Workers’ compensation/general liability | 44 | 74 |
Accrued rent | 26 | 39 |
Litigation exposure | 3 | 16 |
Mirror savings plan | 8 | 13 |
Pension and other retiree obligations | 34 | 76 |
Net operating loss and tax credit carryforwards | 719 | 931 |
Other | 48 | 77 |
Total deferred tax assets | 992 | 1,438 |
Valuation allowance | (767) | (993) |
Total net deferred tax assets | 225 | 445 |
Depreciation and amortization | (310) | (561) |
Tax benefit transfers | (31) | (53) |
Long-lived intangible assets | (27) | (35) |
Total deferred tax liabilities | (368) | (649) |
Total net deferred tax liabilities | $ (143) | $ (204) |
Operating Loss Carryforwards, Expiration Dates | The Company has a federal net operating loss (NOL) of $2.1 billion and $58 million of tax credit carryforwards as of February 3, 2018. These NOL carryforwards (expiring in 2032 through 2034) arose prior to December 31, 2017 and are available to offset future taxable income. The Company may recognize additional NOLs in the future which, under the Tax Act, would not expire but would only be available to offset up to 80% of the Company’s future taxable income. |
Income Taxes (Deferred Tax Assets/Liabilities in Consolidated Balance Sheets) (Details) - USD ($) $ in Millions |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
Jan. 31, 2015 |
---|---|---|---|---|
Income Tax Contingency [Line Items] | ||||
Total net deferred tax liabilities | $ (143) | $ (204) | ||
Deferred taxes (current assets) | 32 | 75 | ||
Accounts payable and accrued expenses (Note 7) | 2 | 3 | ||
Other liabilities (Note 8) | 1 | 1 | ||
Total | $ 35 | $ 79 | $ 91 | $ 62 |
Income Taxes (Reconciliation of Unrecognized Tax Benefits) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Beginning balance | $ 79 | $ 91 | $ 62 |
Additions for tax positions of prior years | 4 | 16 | 40 |
Reductions for tax positions of prior years | (45) | (24) | 0 |
Settlements and effective settlements with tax authorities | (3) | (4) | (10) |
Expirations of statute | 0 | 0 | (1) |
Balance at end of year | $ 35 | $ 79 | $ 91 |
Income Taxes (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jan. 27, 2014 |
Feb. 03, 2018 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Operating Loss Carryforwards [Line Items] | |||||
Net tax benefit recorded in connection with U. S. Tax Cuts and Jobs Act | $ 75 | ||||
Valuation allowance | 767 | $ 767 | $ 993 | ||
Net tax expense (benefit) | (126) | 1 | $ 9 | ||
Operating loss carryforwards and tax credits, potential offset to future ordinary taxable income | 719 | 719 | |||
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 | 32 | 32 | 33 | |
Benefit of federal tax deduction of state taxes | 7 | 11 | 12 | ||
Accrued interest and penalties for unrecognized tax benefits | 1 | 1 | $ 2 | $ 3 | |
Federal [Member] | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryforward | 2,100 | 2,100 | |||
Tax credit carryforwards | $ 58 | $ 58 |
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|
Supplemental cash flow information | |||
Income taxes received/(paid), net | $ (9) | $ (10) | $ (5) |
Interest received/(paid), net | (302) | (344) | (369) |
Supplemental non-cash investing and financing activity | |||
Increase/(decrease) in other accounts payable related to purchases of property and equipment and software | 25 | 20 | 1 |
Purchase of property and equipment and software through capital leases and a note payable | $ 0 | $ 1 | $ 1 |
Litigation, Other Contingencies and Guarantees (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Feb. 03, 2018 |
Jan. 28, 2017 |
|
Loss Contingencies [Line Items] | ||
Payments for Legal Settlements | $ 25,000 | |
Recorded Best Estimate | $ 20,000 | |
Store credit issued for litigation settlement | $ 25,000 | |
Loss Contingency Accrual | 16,000 | |
Insurance Recoveries | 15,000 | |
Estimated Insurance Recoveries | 1,000 | |
Class Action Securities Litigation - Amount to be Funded by Insurance [Member] | ||
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | 97,500 | |
ERISA Class Action Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | 4,500 | |
Employment Class Action Litigation CA [Member] | ||
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | 1,750 | |
Employment Class Action Litigation IL [Member] | ||
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | $ 5,000 |
Subsequent Events (Details) |
Mar. 12, 2018 |
---|---|
Subsequent Event [Line Items] | |
Subsequent Event, Description |
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 03, 2018 |
Oct. 28, 2017 |
Jul. 29, 2017 |
Apr. 29, 2017 |
Jan. 28, 2017 |
Oct. 29, 2016 |
Jul. 30, 2016 |
Apr. 30, 2016 |
Feb. 03, 2018 |
Jan. 28, 2017 |
Jan. 30, 2016 |
|||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||
Total net sales | $ 4,031 | $ 2,807 | $ 2,962 | $ 2,706 | $ 3,961 | $ 2,857 | $ 2,918 | $ 2,811 | $ 12,506 | $ 12,547 | $ 12,625 | ||||||||||||||
Cost of goods sold (exclusive of depreciation and amortization) | 2,676 | 1,852 | 1,923 | 1,723 | 2,649 | 1,795 | 1,834 | 1,793 | |||||||||||||||||
SG&A expenses | 943 | 840 | 842 | 843 | 925 | 888 | 853 | 872 | 3,468 | 3,538 | 3,775 | ||||||||||||||
Restructuring and management transition | 8 | [1] | 52 | [1] | 23 | [1] | 220 | [1] | 9 | [2] | 2 | [2] | 9 | [2] | 6 | [2] | $ 303 | $ 26 | $ 84 | ||||||
Net income/(loss) | $ 254 | $ (128) | $ (62) | $ (180) | $ 192 | $ (67) | $ (56) | $ (68) | |||||||||||||||||
Diluted earnings/(loss) per share (2) | $ 0.81 | [3] | $ (0.41) | [3] | $ (0.20) | [3] | $ (0.58) | [3] | $ 0.61 | [3] | $ (0.22) | [3] | $ (0.18) | [3] | $ (0.22) | [3] | $ (0.37) | $ 0.00 | $ (1.68) | ||||||
Gain from non-operating asset sales | $ 0 | $ 5 | $ 9 | ||||||||||||||||||||||
Asset impairments | 0 | 0 | 20 | ||||||||||||||||||||||
Income tax expense/(benefit) | $ (126) | $ 1 | $ 9 | ||||||||||||||||||||||
VERP [Member] | |||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||
Restructuring and management transition | $ 0 | $ 0 | $ 0 | $ 122 | |||||||||||||||||||||
Home Office And Stores [Member] | |||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||
Restructuring and management transition | 3 | 52 | 23 | 98 | $ 2 | $ 2 | $ 0 | $ 4 | |||||||||||||||||
Management Transition [Member] | |||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||
Restructuring and management transition | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 2 | |||||||||||||||||
Other [Member] | |||||||||||||||||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||||||||||||||||
Restructuring and management transition | $ 5 | $ 0 | $ 0 | $ 0 | $ 7 | $ 0 | $ 8 | $ 0 | |||||||||||||||||
|
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