J.C.PenneyCompanyIncNYSE_JCP_202010-K.pdf

《J.C.PenneyCompanyIncNYSE_JCP_202010-K.pdf》由會員分享，可在線閱讀，更多相關《J.C.PenneyCompanyIncNYSE_JCP_202010-K.pdf（102頁珍藏版）》請在三個皮匠報告上搜索。

1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended February 1,2020orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCH

2、ANGE ACT OF 1934For the transition period from _ to _Commission File Number:1-15274J.C.PENNEY COMPANY,INC.(Exact name of registrant as specified in its charter)Delaware 26-0037077(State or other jurisdiction of incorporation ororganization)(I.R.S.Employer Identification No.)6501 Legacy DrivePlanoTex

3、as 75024-3698(Address of principal executive offices)(Zip Code)(972)431-1000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock of 50 cents par valueJCPNe

4、w York Stock ExchangePreferred Stock Purchase RightsJCPNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:None (Title of class)Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check

5、mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding12 months(or for such sh

6、orter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of R

7、egulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting co

8、mpany,or emerging growthcompany.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the ExchangeAct.Large accelerated filerAccelerated filer Non-accelerated filerSmaller reporting company Emerging growth company

9、If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant is a sh

10、ell company(as defined in Rule 12b-2 of the Exchange Act).Yes No State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was lastsold,or the average bid and asked price of such common equity,as o

11、f the last business day of the registrants most recently completed second fiscal quarter(August 3,2019).$227,240,130 Indicate the number of shares outstanding of each of the registrants classes of common stock,as of the latest practicable date.320,981,685 shares of Common Stock of 50 cents par value

12、,as of March 16,2020.DOCUMENTS INCORPORATED BY REFERENCEDocuments from which portions are incorporated by reference Parts of the Form 10-K into which incorporatedJ.C.Penney Company,Inc.2020 Proxy Statement Part III2025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/0001166126200000

13、22/jcp-0201202010k.htm1/102Table of ContentsINDEX PagePart I Item 1.Business3 Item 1A.Risk Factors6 Item 1B.Unresolved Staff Comments 17 Item 2.Properties18 Item 3.Legal Proceedings18 Item 4.Mine Safety Disclosures18Part II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and

14、Issuer Purchases of Equity Securities19 Item 6.Selected Financial Data21 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations23 Item 7A.Quantitative and Qualitative Disclosures about Market Risk39 Item 8.Financial Statements and Supplementary Data39 Item 9.Chan

15、ges in and Disagreements with Accountants on Accounting and Financial Disclosure39 Item 9A.Controls and Procedures39 Item 9B.Other Information42Part III Item 10.Directors,Executive Officers and Corporate Governance42 Item 11.Executive Compensation42 Item 12.Security Ownership of Certain Beneficial O

16、wners and Management and Related Stockholder Matters42 Item 13.Certain Relationships and Related Transactions,and Director Independence42 Item 14.Principal Accounting Fees and Services43Part IV Item 15.Exhibits,Financial Statement Schedules43 Item 16.Form 10-K Summary49 Signatures50 Index to Consoli

17、dated Financial Statements5222025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm2/102Table of ContentsPART I Item 1.Business Business Overview J.C.Penney Company,Inc.is a holding company whose principal operating subsidiary is J.C.Penney Corpo

18、ration,Inc.(JCP).JCP was incorporated in Delaware in 1924,and J.C.Penney Company,Inc.was incorporated in Delaware in 2002,when theholding company structure was implemented.The new holding company assumed the name J.C.Penney Company,Inc.(Company).The holding company has no independent assets or opera

19、tions,and no direct subsidiaries other than JCP.Commonstock of the Company is publicly traded under the symbol“JCP”on the New York Stock Exchange.The Company is a co-obligor(or guarantor,as appropriate)regarding the payment of principal and interest on JCPs outstanding debt securities.The guaranteeb

20、y the Company of certain of JCPs outstanding debt securities is full and unconditional.The holding company and its consolidatedsubsidiaries,including JCP,are collectively referred to in this Annual Report on Form 10-K as“we,”“us,”“our,”“ourselves,”“Company”or“JCPenney.”Since our founding by James Ca

21、sh Penney in 1902,we have grown to be a major retailer,operating 846 department stores in 49states and Puerto Rico as of February 1,2020.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 calenda

22、r years.Fiscal year 2019 ended on February 1,2020;fiscal year 2018 ended on February 2,2019;and fiscal year 2017 ended on February 3,2018.Fiscal years 2019 and 2018 consistedof 52 weeks and fiscal year 2017 consisted of 53 weeks.Our business consists of selling merchandise and services to consumers

23、through our department stores and our website at ,which utilizes fully optimized applications for desktop,mobile and tablet devices.Our department stores and website generallyserve the same type of customers,our website offers virtually the same mix of merchandise as our store assortment plus othere

24、xtended categories that are not offered in store,and our department stores generally accept returns from sales made in stores andvia our website.We fulfill online customer purchases by direct shipment to the customer from our distribution facilities and storesor from our suppliers warehouses and by

25、in store customer pick up.We primarily sell family apparel and footwear,accessories,fine and fashion jewelry,beauty products through Sephora inside JCPenney,and home furnishings.In addition,our departmentstores provide our customers with services such as styling salon,optical,portrait photography,an

26、d custom decorating.Based on how we categorized our divisions in 2019,our merchandise mix of total net sales over the last two years was as follows:20192018Mens apparel and accessories 22%20%Womens apparel 21%20%Womens accessories,including Sephora 14%14%Home 11%14%Footwear and handbags 11%11%Kids,i

27、ncluding toys 9%9%Jewelry 6%6%Services and other 6%6%100%100%Competition and Seasonality The business of selling merchandise and services is highly competitive.We are one of the largest department store and eCommerceretailers in the United States,and we have numerous competitors,as further described

28、 in Item 1A,Risk Factors.Many factors enterinto the competition for the consumers patronage,including merchandise assortment,advertising,price,quality,service,location,shipping times and cost,online and mobile user experience,reputation,credit availability,customer loyalty,availability of in-storese

29、rvices such as styling salon,optical,portrait photography and custom decorating,and the ability to offer personalized customerexperiences.Our annual earnings depend to a great extent on the results of operations for the last quarter of the fiscal year,whichincludes the holiday season,when a signific

30、ant portion of our sales and profits are recorded.32025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm3/102Table of ContentsTrademarks The JCPenney,JCP,Liz Claiborne,Claiborne,Okie Dokie,Worthington,A.N.A A NEW APPROACH,St.Johns Bay,The Origin

31、al Arizona Jean Co,Ambrielle,Stafford,J.Ferrar,Xersion,Belle+Sky,Total Girl,MONET,JCPenneyHome,Studio JCP Home,Sleep Chic,Home Expressions,Adonna,Arizona Jean Co.,Artesia,Bijoux Bar,BoldElements,City Streets,East 5th,Flirtitude,Forever Inspired,North Pole Trading Co.,Outdoor Oasis,Paw&Tail,Peyton&Pa

32、rker,Sheer Caress,Underscore,and Cooks JCPenney Home trademarks,as well as certain other trademarks,have been registered,or are the subject of pending trademark applications with the United States Patent and Trademark Office andwith the registries of many foreign countries and/or are protected by co

33、mmon law.We consider our marks and the accompanyingname recognition to be valuable to our business.Website Availability We maintain an Internet website at and make available free of charge through this website our annual reports onForm 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K

34、and all related amendments to those reports,as soon asreasonably practicable after the materials are electronically filed with or furnished to the Securities and Exchange Commission.Inaddition,our website provides press releases,access to webcasts of management presentations and other materials usef

35、ul inevaluating our Company.Suppliers We have a diversified supplier base,both domestic and foreign,and are not dependent to any significant degree on any singlesupplier.We purchase our merchandise from approximately 2,800 domestic and foreign suppliers,many of whom have donebusiness with us for man

36、y years.In addition to our Plano,Texas home office,we,through our purchasing subsidiary,maintainedbuying and quality assurance offices in 9 foreign countries as of February 1,2020.Employment The Company and its consolidated subsidiaries employed approximately 90,000 full-time and part-time employees

37、 as ofFebruary 1,2020.Environmental Matters Environmental protection requirements did not have a material effect upon our operations during 2019.It is possible thatcompliance with such requirements(including any new requirements)would lengthen lead time in expansion or renovation plansand increase c

38、onstruction costs,and therefore operating costs,due in part to the expense and time required to conductenvironmental and ecological studies and any required remediation.As of February 1,2020,we estimated our total potential environmental liabilities to be$19 million and recorded our estimate inOther

39、 liabilities in the Consolidated Balance Sheet as of that date.This estimate covered potential liabilities primarily related tounderground storage tanks and remediation of environmental conditions involving our former drugstore locations.We continue toassess required remediation and the adequacy of

40、environmental reserves as new information becomes available and knownconditions are further delineated.If we were to incur losses at the estimated amount,we do not believe that such losses would havea material effect on our financial condition,results of operations or liquidity.Information about our

41、 Executive OfficersThe following is a list,as of March 16,2020,of the names and ages of the executive officers of J.C.Penney Company,Inc.and ofthe offices and other positions held by each such person with the Company.These officers hold identical positions with JCP.Thereis no family relationship bet

42、ween any of the named persons.42025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm4/102Table of ContentsName Offices and Other Positions Held With the Company AgeJill Soltau Chief Executive Officer 53Bill Wafford Executive Vice President,Chief

43、 Financial Officer 48Brynn L.Evanson Executive Vice President,Chief Human Resources Officer 50Michelle Wlazlo Executive Vice President,Chief Merchant 52Therace M.Risch Executive Vice President,Chief Information Officer 47Jim DePaul Executive Vice President,Stores 48Steve Whaley Senior Vice President

44、,Principal Accounting Officer and Controller 60Brandy L.Treadway Senior Vice President,General Counsel and Secretary 45Ms.Soltau has served as Chief Executive Officer and as a director of the Company since October 2018.Prior to joining theCompany,she served as President and Chief Executive Officer o

45、f JoAnn Stores,Inc.(fabric and craft retailer)from 2015 toOctober 2018.From 2013 to 2015,she served as President of Shopko Stores(general merchandise retailer),with which she servedin positions of increasing responsibility,including Executive Vice President,Chief Merchandising Officer from 2009 to 2

46、013 andSenior Vice President,General Merchandise Manager,Apparel and Accessories from 2007 to 2009.Prior to that,she held positionsof increasing responsibility with national and regional retailers including Sears Holdings,Kohls Corporation and Carson PirieScott.Ms.Soltau currently serves as a direct

47、or of Autozone,Inc.(automotive parts and accessories retailer).Mr.Wafford has served as Executive Vice President,Chief Financial Officer of the Company since April 2019.Prior to that,heserved as Executive Vice President,Chief Financial Officer of The Vitamin Shoppe(health and wellness retailer)since

48、 2018 and asSenior Vice President,Strategy and Business Development of The Vitamin Shoppe from 2017 to 2018.Mr.Wafford served as apartner in the Advisory Practice of KPMG LLP(accounting firm)from 2015 to 2017.Prior to that,he served in positions ofincreasing responsibility with Walgreens Boots Allia

49、nce(retail pharmacy)from 2009 to 2014,including Divisional Vice President,Retail Finance from 2009 to 2012,Vice President,International Finance from 2012 to 2013,and Vice President and ManagingDirector,Well Ventures LLC from 2013 to 2014.Ms.Evanson has served as Executive Vice President,Chief Human

50、Resources Officer since 2013.She previously served as VicePresident,Compensation,Benefits and Talent Operations from 2010 to 2013 and Director of Compensation from 2009 to 2010.Prior to joining the Company,she worked at the Dayton Hudson Corporation(retailer)from 1991 to 2009(renamed TargetCorporati

51、on in 2000).Ms.Evanson began her career with Marshall Fields(department store retailer)where she advanced throughpositions in stores,finance,human resources and merchandising and moved to the Target stores division in 2000,ultimatelyserving as Director of Executive Compensation and Retirement Plans.

52、Ms.Wlazlo has served as Executive Vice President,Chief Merchant of the Company since March 2019.Prior to joining theCompany,she served as Senior Vice President,Merchandising Apparel and Accessories for Target Corporation(retailer)from 2016to 2019.From 1996 to 2015,she served in positions of increasi

53、ng responsibility with GAP,Inc.(retailer),including Senior VicePresident,Global Merchandising,GAP from 2013 to 2015,Senior Vice President,Merchandising,Old Navy from 2008 to 2013,and Vice President,Merchandising,GAP from 2005 to 2008.Ms.Risch has served as Executive Vice President,Chief Information

54、Officer of the Company since December 2019.Prior to that,she served as Executive Vice President,Chief Information Officer and Chief Digital Officer from March 2018 to December 2019and as Executive Vice President and Chief Information Officer from 2015 to March 2018.Prior to joining the Company,she s

55、ervedas Executive Vice President and Chief Information Officer of Country Financial(insurance and investment services)from 2014 to2015.Prior to that,Ms.Risch spent 10 years at Target Corporation in a variety of technology roles of increasing responsibility,including Vice President of Technology Deli

56、very Services from 2012 to 2014 and Vice President,Business Technology Team from2009 to 2012.Mr.DePaul has served as Executive Vice President,Stores of the Company since August 2019.Prior to that,he served as ChiefOperations Officer of Shopko Stores from 2017 to 2019,with whom he served in positions

57、 of increasing responsibility from 1998,including Chief Administration Officer from 2014 to 2017,Senior Vice President,Stores and Operation from 2010 to 2014,VicePresident,Stores Operations and Finance,Facilities,Construction from 2006 to 2010,Regional Director of Sales from 2004 to2006,and Senior M

58、anager Process Improvement from 2002 to 2004.Prior to joining Shopko Stores,he served inMerchandising/Operations Team Leader positions of Target Corporation.Mr.Whaley has served as Senior Vice President,Principal Accounting Officer and Controller of the Company since May 2019.Prior to that,he served

59、 as Senior Vice President and Global Controller,Principal Accounting Officer of Wal-Mart Stores,Inc.52025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm5/102Table of Contents(retailer)from 2007 to 2017 and Vice President and Assistant Controll

60、er from 2005 to 2007.Mr.Whaley served as Vice Presidentand Controller of Southwest Airlines(airline)from 2001 to 2005.Ms.Treadway has served as Senior Vice President,General Counsel and Secretary of the Company since January 2020.Prior tothat,she served as Senior Vice President,General Counsel from

61、2017 to January 2020.She served as Vice President,interimGeneral Counsel from June 2017 to August 2017;Vice President,Associate General Counsel from 2016 to June 2017;AssistantGeneral Counsel from 2014 to 2016;Senior Managing Counsel from 2012 to 2014;and Senior Counsel from 2011 to 2012.Prior tojoi

62、ning the Company,Ms.Treadway was an associate at Weil,Gotshal&Manges,LLP(law firm)from 2002 to 2011.Item 1A.Risk FactorsThe following risk factors should be read carefully in connection with evaluating our business and the forward-looking informationcontained in this Annual Report on Form 10-K.Any o

63、f the following risks could materially adversely affect our business,operatingresults,financial condition and the actual outcome of matters as to which forward-looking statements are made in this AnnualReport on Form 10-K.The recent coronavirus outbreak could have an adverse effect on our business.C

64、oncerns are rapidly growing about the global outbreak of a novel strain of coronavirus(COVID-19).The virus has spread rapidlyacross the globe,including the U.S.The pandemic is having an unprecedented impact on the U.S.economy as federal,state andlocal governments react to this public health crisis,w

65、hich has created significant uncertainties.These uncertainties include,but arenot limited to,the potential adverse effect of the pandemic on the economy,our supply chain partners,our employees andcustomers,customer sentiment in general,and traffic within the malls and shopping centers containing our

66、 stores.As the pandemiccontinues to grow,consumer fear about becoming ill with the virus and recommendations and/or mandates from federal,state andlocal authorities to avoid large gatherings of people or self-quarantine may continue to increase,which has already affected,andmay continue to affect,tr

67、affic to our stores.The Company has announced the closing of all stores through April 1,2020 in responseto the crisis.We are unable to predict when stores will reopen after this date or if additional periods of store closures will be neededor mandated.Continued impacts of the pandemic could material

68、ly adversely affect our near-term and long-term revenues,earnings,liquidity and cash flows,and may require significant actions in response,including but not limited to,employee furloughs,reducedstore hours,store closings,expense reductions or discounting of pricing of our products,all in an effort t

69、o mitigate such impacts.The extent of the impact of the pandemic on our business and financial results will depend largely on future developments,including the duration of the spread of the outbreak within the U.S.,the impact on capital and financial markets and the relatedimpact on consumer confide

70、nce and spending,all of which are highly uncertain and cannot be predicted.This situation is changingrapidly,and additional impacts may arise that we are not aware of currently.Our ability to achieve profitable growth is subject to both the risks affecting our business generally and the inherent dif

71、ficultiesassociated with implementing our strategic plan.As we position the Company for long-term growth,it may take longer than expected to achieve our objectives,and actual resultsmay be materially less than planned.Our ability to improve our operating results depends upon a significant number of

72、factors,some of which are beyond our control,including: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 effec

73、tively 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 decisionmaking;our ability to benefit from investments in our stores;our ability to respond to any unanticipated changes in

74、 expected cash flows,liquidity and cash needs,including our abilityto obtain any additional financing or other liquidity enhancing transactions,if and when needed;62025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm6/102Table of Contentsour ab

75、ility to achieve positive cash flow;our ability to access an adequate and uninterrupted supply of merchandise from suppliers at expected levels and onacceptable terms;changes to the regulatory environment in which our business operates;andgeneral economic conditions.There is no assurance that our ma

76、rketing,merchandising and omnichannel strategies,or any future adjustments to our strategies,will improve our operating results.We operate in a highly competitive industry,which could adversely impact our sales and profitability.The retail industry is highly competitive,with few barriers to entry.We

77、 compete with many other local,regional and nationalretailers for customers,employees,locations,merchandise,services and other important aspects of our business.Those competitorsinclude other department stores,discounters,home furnishing stores,specialty retailers,wholesale clubs,direct-to-consumerb

78、usinesses,including exclusively eCommerce retailers,and other forms of retail commerce.Some competitors are larger thanJCPenney,and/or have greater financial resources available to them,and,as a result,may be able to devote greater resources tosourcing,promoting,selling their products,updating their

79、 store environment and updating their technology.Competition ischaracterized by many factors,including merchandise assortment,advertising,price,quality,service,location,reputation,shippingtimes and cost,online and mobile user experience,credit availability,customer loyalty,availability of in-store s

80、ervices,such asstyling salon,optical,portrait photography and custom decorating,and the ability to offer personalized customer experiences.Wehave experienced,and anticipate that we will continue to experience for at least the foreseeable future,significant competition fromour competitors.The perform

81、ance of competitors as well as changes in their pricing and promotional policies,marketing activities,customer loyalty programs,new strategic partnerships,availability of in-store services,new store openings,store renovations,launches of eCommerce platforms,brand launches and other merchandise and o

82、perational strategies could cause us to have lowersales,lower merchandise margin and/or higher operating expenses such as marketing costs and other selling,general andadministrative expenses,which in turn could have an adverse impact on our profitability.Our sales and operating results depend on our

83、 ability to develop merchandise offerings that resonate with our existingcustomers and help to attract new customers.Our sales and operating results depend in part on our ability to predict and respond to changes in fashion trends and customerpreferences in a timely manner by consistently offering s

84、tylish,quality merchandise assortments at competitive prices.Wecontinuously assess emerging styles and trends and focus on developing a merchandise assortment to meet customer preferences.There is no assurance that these efforts will be successful or that we will be able to satisfy constantly changi

85、ng customer demands.To the extent our decisions regarding our merchandise differ from our customers preferences,we may be faced with reduced salesand excess inventories for some products and/or missed opportunities for others.Any sustained failure to identify and respond toemerging trends in lifesty

86、le and customer preferences and buying trends could have an adverse impact on our business.In addition,merchandise misjudgments may adversely impact the perception or reputation of our Company,which could result in declines incustomer loyalty and vendor relationship issues,and ultimately have a mate

87、rial adverse effect on our business,financial conditionand results of operations.We may also seek to expand into new lines of business from time to time.There is no assurance that these efforts will besuccessful.As we devote time and resources to new lines of business,managements attention and resou

88、rces may be diverted fromexisting business activities.Further,if new lines of business are not as successful as we planned,then we risk damaging our overallbusiness results.In addition,we may seek to expand our merchandise offerings into new product categories.Moving into new linesof business and ex

89、panding our merchandise offerings may carry new or additional risks beyond those typically associated with ourtraditional apparel and home furnishings businesses,including potential reputational harm resulting from actions by unaffiliatedthird-parties that we may use to assist us in providing goods

90、or services.We may not be able to develop new lines of business in amanner that improves our operating results or address or mitigate the risks associated with new product categories and new lines ofbusiness,and may therefore be forced to close the new lines of business or reduce our expanded mercha

91、ndise offerings,which maydamage our reputation and negatively impact our operating results.Our results may be negatively impacted if customers do not maintain their favorable perception of our Company and ourprivate brand merchandise.Maintaining and continually enhancing the value of our Company and

92、 our private brand merchandise is important to the success ofour business.The value of our private brands is based in large part on the degree to which customers perceive and72025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm7/102Table of Con

93、tentsreact to them.The value of our private brands could diminish significantly due to a number of factors,including customerperception that we have acted in an irresponsible manner in sourcing our private brand merchandise,adverse publicity about ourprivate brand merchandise,our failure to maintain

94、 the quality of our private brand products,the failure of our private brandmerchandise to deliver consistently good value to the customer,or the failure to protect the image associated with our privatebrands.The growing use of social and digital media by customers,us,and third parties increases the

95、speed and extent thatinformation or misinformation and opinions can be shared.Negative posts or comments about us,our private brands,or any of ourmerchandise on social or digital media could seriously damage our reputation.If we do not maintain the favorable perception ofour Company and our private

96、brand merchandise or we experience a reduction in the level of private brand sales,our businessresults could be negatively impacted.Our ability to increase sales and store productivity is largely dependent upon our ability to increase customer traffic andconversion.Customer traffic depends upon our

97、ability to successfully market compelling merchandise assortments,present an appealingshopping environment and experience to customers,and attract customers to our stores through omnichannel initiatives such asbuy-online-pickup-in-store programs.Our strategies focus on increasing customer traffic an

98、d improving conversion in our storesand online;however,there can be no assurance that our efforts will be successful or will result in increased sales or margins.Further,costs to drive online traffic may be higher than anticipated,which could result in lower margins,and actions to driveonline traffi

99、c may not deliver anticipated results.In addition,external events outside of our control,including store closings by ourcompetitors,pandemics,terrorist threats,domestic conflicts and civil unrest,may influence customers decisions to visit malls ormight otherwise cause customers to avoid public place

100、s.There is no assurance that we will be able to reverse any decline in trafficor that increases in eCommerce sales will offset any decline in store traffic.We may need to respond to any declines in customertraffic or conversion rates by increasing markdowns or promotions to attract customers,which c

101、ould adversely impact ouroperating results and cash flows from operating activities.In addition,the challenge of declining store traffic along with the growthof digital shopping channels and its diversion of sales from brick-and-mortar stores could lead to store closures and/or assetimpairment charg

102、es,which could adversely impact our operating results,financial position and cash flows.If we are unable to manage our inventory effectively,our merchandise margins could be adversely affected.Our profitability depends upon our ability to manage appropriate inventory levels and respond quickly to sh

103、ifts in consumerdemand patterns.We must properly execute our inventory management strategies by appropriately allocating merchandise amongour stores and online,timely and efficiently distributing inventory to stores,maintaining an appropriate mix and level of inventoryin stores and online,adjusting

104、our merchandise mix between our private and exclusive brands and national brands,appropriatelychanging the allocation of floor space of stores among product categories to respond to customer demand and effectively managingpricing and markdowns.If we overestimate customer demand for our merchandise,w

105、e will likely need to record inventorymarkdowns and sell the excess inventory at clearance prices which would negatively impact our merchandise margins andoperating results.If we underestimate customer demand for our merchandise,we may experience inventory shortages which mayresult in missed sales o

106、pportunities and have a negative impact on customer loyalty.In addition,although we have variousprocesses and systems to help protect against loss or theft of our inventory,higher than expected levels of lost or stolen inventory(called“shrinkage”)could result in write-offs and lost sales,which could

107、 adversely impact our profitability.We must protect against security breaches or other unauthorized disclosures of confidential data about our customers as well asabout our employees and other third parties.As part of our normal operations,we and third-party service providers with whom we contract r

108、eceive and maintain informationabout our customers(including credit/debit card information),our employees and other third parties.Confidential data must at alltimes be protected against security breaches or other unauthorized disclosure.We have,and require our third-party serviceproviders to have,ad

109、ministrative,physical and technical safeguards and procedures in place to protect the security,confidentiality,integrity and availability of such information and to protect such information against unauthorized access,disclosure or acquisition.Despite our safeguards and security processes and proced

110、ures,our systems and processes,and those of our third-party serviceproviders,are not free from vulnerability to security breaches,inadvertent data disclosure or acquisition by third parties.Further,because the methods used to obtain unauthorized access change frequently and may not be immediately de

111、tected,we may beunable to anticipate these methods or promptly implement safeguards.Additionally,as the regulatory environment related to information security,data collection,and use and privacy becomesincreasingly rigorous,with new and constantly changing requirements applicable to our business,com

112、pliance with thoserequirements could also result in additional costs.For example,California passed the California Consumer Privacy Act of 2018(the“CCPA”),which went into effect in January 2020 and provides broad rights to California consumers with respect to thecollection and use of their informatio

113、n by businesses.The CCPA expands the privacy rights of California citizens and as a82025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm8/102Table of Contentsresult,we may need to process enhancements and commit resources in support of complian

114、ce with Californias regulatoryrequirements.Any failure to adhere to the requirements of the CCPA and other evolving laws and regulations in this area,or toprotect confidential data about our business or our customers,employees or other third parties,could result in financial penaltiesand legal liabi

115、lity and could materially damage our brand and reputation,as well as result in significant expenses and disruptions toour operations,and loss of customer confidence,any of which could have a material adverse impact on our business and results ofoperations.We could also be subject to government enfor

116、cement actions and private litigation as a result of any such failure.The failure to retain,attract and motivate our employees,including employees in key positions,could have an adverse impacton our results of operations.Our results depend on the contributions of our employees,including our senior m

117、anagement team and other key employees.Thisdepends to a great extent on our ability to retain,attract and motivate talented employees throughout the organization,many ofwhom,particularly in the stores,are in entry level or part-time positions,which have historically had high rates of turnover.Wecurr

118、ently operate with significantly fewer individuals than we have in the past who have assumed additional duties andresponsibilities,which could have an adverse impact on our operating performance and efficiency.Negative media reportsregarding the Company or the retail industry in general,as well as u

119、ncertainty due to store closings or future Companyperformance,could also have an adverse impact on our ability to attract,retain and motivate our employees.If we are unable toretain,attract and motivate talented employees with the appropriate skill sets,we may not achieve our objectives and our resu

120、lts ofoperations could be adversely impacted.Our ability to meet our changing labor needs while controlling our costs is also subject toexternal factors such as unemployment levels,competing wages,potential union organizing efforts and government regulation.Aninability to provide wages and/or benefi

121、ts that are competitive within the markets in which we operate could adversely affect ourability to retain and attract employees.In addition,the loss of one or more of our key personnel or the inability to effectivelyidentify a suitable successor to a key role in our senior management could have a m

122、aterial adverse effect on our business.If we are unable to successfully develop and maintain a relevant and reliable omnichannel experience for our customers,oursales,results of operations and reputation could be adversely affected.We believe it is critical that we deliver a superior omnichannel sho

123、pping experience for our customers through the integration ofour store and digital shopping channels.Omnichannel retailing is rapidly evolving and we must anticipate and meet changingcustomer expectations.Our omnichannel strategies include our ship-from-store and buy-online-pickup-in-store programs.

124、Inaddition,we continue to explore ways to enhance our customers omnichannel shopping experience,including through investmentsin IT systems,operational changes and developing a more customer-friendly user experience.Our competitors are also investing inomnichannel initiatives,some of which may be mor

125、e successful than our initiatives.For example,eCommerce competitors haveplaced an emphasis on delivery services,with customers increasingly seeking faster,guaranteed delivery times and low-price orfree shipping.There is no assurance that we will be able to compete successfully on delivery times and

126、delivery costs,which isdependent on many factors.If the implementation of our omnichannel strategies is not successful or does not meet customerexpectations,or we do not realize a return on our omnichannel investments,our reputation and operating results may be adverselyaffected.Disruptions in our e

127、Commerce platforms,or our inability to successfully execute our eCommerce or omnichannel strategies,could have an adverse impact on our sales and results of operations.We sell merchandise over the Internet through our website,and through mobile applications for smart phones andtablets.Our Internet o

128、perations are subject to numerous risks,including rapid technological change and the implementation of newsystems and platforms;liability for online and mobile content;violations of state or federal laws,including those relating to onlineand mobile privacy and intellectual property rights;credit car

129、d fraud;problems associated with the operation,security andavailability of our website,mobile applications and related support systems;computer malware;telecommunications failures;electronic break-ins and similar disruptions;and the allocation of inventory between our online operations and departmen

130、t stores.The failure of our website or mobile applications to perform as expected could result in disruptions and costs to our operations andmake it more difficult for customers to purchase merchandise online.In addition,our inability to successfully develop and maintainthe necessary technological i

131、nterfaces for our customers to purchase merchandise through our website and mobile applications,including user friendly software applications for smart phones and tablets,could result in the loss of Internet sales and have anadverse impact on our results of operations.92025/1/17 15:11Documenthttps:/

132、www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm9/102Table of ContentsOur operations are dependent on information technology systems;disruptions in those systems or increased costs relating totheir implementation could have an adverse impact on our results of operations

133、.Our operations are dependent upon the integrity,security and consistent operation of various systems and data centers,includingthe point-of-sale systems in the stores,our eCommerce platforms,data centers that process transactions,communication systemsand various software applications used throughou

134、t our Company to source merchandise,track inventory flow,process transactions,generate performance and financial reports and administer payroll and benefit plans.We have implemented several applications and systems from third party vendors,providers and licensors to simplify our processesand reduce

135、our use of customized existing legacy systems and expect to place additional applications and systems into operation inthe future.Any continued reliance on existing legacy systems may result in extended system outages due to the difficulty inrecovering those systems as well as inefficiencies in our

136、business workflow due to the complexity and high levels of customizationinherent in such systems.Implementing new applications and systems carries substantial risk,including implementation delays,cost overruns,disruption of operations,potential loss of data or information,lower customer satisfaction

137、 resulting in lost customersor sales,inability to deliver merchandise to our stores or our customers,the potential inability to meet reporting requirements andunintentional security vulnerabilities.There can be no assurances that we will successfully launch the new applications and systemsas planned

138、,that the new applications and systems will perform as expected or that the new applications and systems will beimplemented without disruptions to our operations,any of which may cause critical information upon which we rely to be delayed,unreliable,corrupted,insufficient or inaccessible.We also out

139、source various information technology functions to third party service providers and may outsource other functions inthe future.We rely on those third party service providers to provide services on a timely and effective basis and their failure toperform as expected or as required by contract could

140、result in disruptions and costs to our operations.Our vendors are also highly dependent on the use of information technology systems.Major disruptions in their informationtechnology systems could result in their inability to communicate with us or otherwise to process our transactions or information

141、,their inability to perform required functions,or in the loss or corruption of our information,any and all of which could result indisruptions to our operations.Our vendors are responsible for having safeguards and procedures in place to protect theconfidentiality,integrity and security of our infor

142、mation,and to protect our information and systems against unauthorized access,disclosure or acquisition.Any failure in their systems to operate or in their ability to protect our information or systems could havea material adverse impact on our business and results of operations.We have insourced,an

143、d may continue to insource,certain business functions from third party vendors and may seek to relocatecertain business functions to international locations in an attempt to achieve additional efficiencies,both of which subject us torisks,including disruptions in our business.We have insourced certa

144、in business functions and may also need to continue to insource other aspects of our business in the futurein order to effectively manage our costs and stay competitive.We may also seek from time to time to relocate certain businessfunctions to countries other than the United States to access highly

145、 skilled labor markets and further control costs.There is noassurance that these efforts will be successful.In addition,future regulatory developments could hinder our ability to fully realizethe anticipated benefits of these actions.These actions may also cause disruptions that negatively impact ou

146、r business.If we areultimately unable to perform insourced functions better than,or at least as well as,third party providers,or otherwise fully realizethe anticipated benefits of these actions,our operating results could be adversely impacted.Changes in our credit ratings may limit our access to ca

147、pital markets and adversely affect our liquidity.The credit rating agencies periodically review our capital structure and the quality and stability of our earnings.Any downgrades toour long-term credit ratings could result in reduced access to the credit and capital markets and higher interest costs

148、 on futurefinancings.The future availability of financing will depend on a variety of factors such as economic and market conditions,theavailability of credit and our credit ratings,as well as the possibility that lenders could develop a negative perception of us.There isno assurance that we will be

149、 able to obtain additional financing on favorable terms or at all.Our profitability depends on our ability to source merchandise and deliver it to our customers in a timely and cost-effectivemanner.Our merchandise is sourced from a wide variety of suppliers,and our business depends on being able to

150、find qualified suppliersand access products in a timely and efficient manner.Inflationary pressures on commodity prices and other input costs couldincrease our cost of goods,and an inability to pass such cost increases on to our customers or a change in our merchandise mix as aresult of such cost in

151、creases could have an adverse impact on our profitability.Additionally,the impact of economic conditions onour suppliers cannot be predicted and our suppliers may be unable to access financing or become insolvent and102025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620

152、000022/jcp-0201202010k.htm10/102Table of Contentsthus become unable to supply us with products.Developments in tax policy,such as the imposition of tariffs on importedmerchandise,or changes to U.S.trade legislation could further have a material adverse effect on our results of operations andliquidit

153、y.Our arrangements with our suppliers and vendors may be impacted by our financial results or financial position.Substantially all of our merchandise suppliers and vendors sell to us on open account purchase terms.There is a risk that our keysuppliers and vendors could respond to any actual or appar

154、ent decrease in or any concern with our financial results or liquidity byrequiring or conditioning their sale of merchandise to us on more stringent or more costly payment terms,such as by requiringstandby letters of credit,earlier or advance payment of invoices,payment upon delivery or other assura

155、nces or credit support or bychoosing not to sell merchandise to us on a timely basis or at all.Our arrangements with our suppliers and vendors may also beimpacted by media reports regarding our financial position.Our need for additional liquidity could significantly increase and oursupply of merchan

156、dise could be materially disrupted if a significant portion of our key suppliers and vendors took one or more ofthe actions described above,which could have a material adverse effect on our sales,customer satisfaction,cash flows,liquidityand financial position.Our senior secured real estate term loa

157、n credit facility and senior secured notes are secured by certain of our real property and,together with our senior secured second priority notes,substantially all of our personal property,and such property may besubject to foreclosure or other remedies in the event of our default.In addition,the re

158、al estate term loan credit facility and theindentures governing the senior secured notes and senior secured second priority notes contain provisions that could restrictour operations and our ability to obtain additional financing.We are(i)party to a$1.688 billion senior secured term loan credit faci

159、lity and(ii)the issuer of$500 million aggregate principalamount of senior secured notes.We have also issued$400 million aggregate principal amount of senior secured second prioritynotes.The senior secured term loan credit facility and the senior secured notes are secured by mortgages on certain real

160、 property ofthe Company and,together with the senior secured second priority notes,liens on substantially all personal property of theCompany,subject to certain exclusions set forth in the security documents relating to the term loan credit facility,the seniorsecured notes and the senior secured sec

161、ond priority notes.The real property subject to mortgages under the term loan creditfacility and the indenture governing the senior secured notes includes our distribution centers and certain of our stores.The credit and guaranty agreement governing the term loan credit facility and the indentures g

162、overning the senior secured notesand the senior secured second-priority notes contain operating restrictions which may impact our future alternatives by limiting,without lender consent,our ability to borrow additional funds,execute certain equity financings or enter into dispositions or otherliquidi

163、ty enhancing or strategic transactions regarding certain of our assets,including our real property.Our ability to obtainadditional or other financing or to dispose of certain assets could also be negatively impacted because a substantial portion of ourassets have been restricted or pledged as collat

164、eral for repayment of our indebtedness under the term loan credit facility,the seniorsecured notes and the senior secured second-priority notes.If an event of default occurs and is continuing,our outstanding obligations under the term loan credit facility,the senior securednotes and the senior secur

165、ed second-priority notes could be declared immediately due and payable or the lenders could foreclose onor exercise other remedies with respect to the assets securing the term loan credit facility,the senior secured notes and the seniorsecured second-priority notes,including,with respect to the term

166、 loan credit facility and senior secured notes,our distributioncenters and certain of our stores.If an event of default occurs,there is no assurance that we would have the cash resources availableto repay such accelerated obligations or refinance such indebtedness on commercially reasonable terms,or

167、 at all.The occurrence ofany one of these events could have a material adverse effect on our business,financial condition,results of operations and liquidity.Our senior secured asset-based revolving credit facility limits our borrowing capacity to the value of certain of our assets.Inaddition,our se

168、nior secured asset-based revolving credit facility is secured by certain of our personal property,and lenders mayexercise remedies against the collateral in the event of our default.We are party to a$2.35 billion senior secured asset-based revolving credit facility.Our borrowing capacity under our r

169、evolvingcredit facility varies according to the Companys inventory levels,accounts receivable and credit card receivables,net of certainreserves.In the event of any material decrease in the amount of or appraised value of these assets,our borrowing capacity wouldsimilarly decrease,which could advers

170、ely impact our business and liquidity.Our revolving credit facility contains customary affirmative and negative covenants and certain restrictions on operations becomeapplicable if our availability falls below certain thresholds.These covenants could impose significant operating and financiallimitat

171、ions and restrictions on us,including restrictions on our ability to enter into particular transactions and to engage in otheractions that we may believe are advisable or necessary for our business.112025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202

172、010k.htm11/102Table of ContentsOur obligations under the revolving credit facility are secured by liens with respect to inventory,accounts receivable,depositaccounts and certain related collateral.In the event of a default that is not cured or waived within any applicable cure periods,thelenders com

173、mitment to extend further credit under our revolving credit facility could be terminated,our outstanding obligationscould become immediately due and payable,outstanding letters of credit may be required to be cash collateralized and remediesmay be exercised against the collateral,which generally con

174、sists of the Companys inventory,accounts receivable and depositaccounts and cash credited thereto.If we are unable to borrow under our revolving credit facility,we may not have the necessarycash resources for our operations and,if any event of default occurs,there is no assurance that we would have

175、the cash resourcesavailable to repay such accelerated obligations,refinance such indebtedness on commercially reasonable terms,or at all,or cashcollateralize our letters of credit,which would have a material adverse effect on our business,financial condition,results ofoperations and liquidity.Our le

176、vel of indebtedness may adversely affect our business and results of operations and may require the use of our availablecash resources to meet repayment obligations,which could reduce the cash available for other purposes.As of February 1,2020,we have$3.721 billion in total indebtedness and we are h

177、ighly leveraged.Our level of indebtedness maylimit our ability to obtain additional financing,if needed,to fund additional projects,working capital requirements,capitalexpenditures,debt service,and other general corporate or other obligations,as well as increase the risks to our business associatedw

178、ith general adverse economic and industry conditions.Our level of indebtedness may also place us at a competitive disadvantageto our competitors that are not as highly leveraged.In addition,the future limitations on tax deductions for interest paid onoutstanding indebtedness as a result of the Tax C

179、uts and Jobs Act enacted in December 2017(the“Tax Act”)could have a materialadverse effect on our results of operations and liquidity.We are required to make quarterly repayments in a principal amount equal to$10.55 million during the seven-year term of the realestate term loan credit facility,subje

180、ct to certain reductions for mandatory and optional prepayments.In addition,we are requiredto make prepayments of the real estate term loan credit facility with the proceeds of certain asset sales,insurance proceeds andexcess cash flow,which could reduce the cash available for other purposes,includi

181、ng capital expenditures for store improvements,and could impact our ability to reinvest in other areas of our business.There is no assurance that our internal and external sources of liquidity will at all times be sufficient for our cashrequirements.We must have sufficient sources of liquidity to fu

182、nd our working capital requirements,capital improvement plans,service ouroutstanding indebtedness and finance investment opportunities.The principal sources of our liquidity are funds generated fromoperating activities,available cash and cash equivalents,borrowings under our credit facilities,other

183、debt financings,equityfinancings and sales of non-operating assets.We expect our ability to generate cash through the sale of non-operating assets todiminish as our portfolio of non-operating assets decreases.In addition,our recent operating losses have limited our capitalresources.Our ability to ac

184、hieve our business and cash flow plans is based on a number of assumptions which involve significantjudgments and estimates of future performance,borrowing capacity and credit availability,which cannot at all times be assured.Accordingly,there is no assurance that cash flows from operations and othe

185、r internal and external sources of liquidity will at alltimes be sufficient for our cash requirements.If necessary,we may need to consider actions and steps to improve our cash positionand mitigate any potential liquidity shortfall,such as modifying our business plan,pursuing additional financing to

186、 the extentavailable,reducing capital expenditures,pursuing and evaluating other alternatives and opportunities to obtain additional sources ofliquidity and other potential actions to reduce costs.There can be no assurance that any of these actions would be successful,sufficient or available on favo

187、rable terms.Any inability to generate or obtain sufficient levels of liquidity to meet our cashrequirements at the level and times needed could have a material adverse impact on our business and financial position.Our ability to obtain any additional financing or any refinancing of our debt,if neede

188、d at any time,depends upon many factors,including our existing level of indebtedness and restrictions in our debt facilities,historical business performance,financialprojections,the value and sufficiency of collateral,prospects and creditworthiness,external economic conditions and generalliquidity i

189、n the credit and capital markets.Any additional debt,equity or equity-linked financing may require modification of ourexisting debt agreements,which there is no assurance would be obtainable.Any additional financing or refinancing could also beextended only at higher costs and require us to satisfy

190、more restrictive covenants,which could further limit or restrict our businessand results of operations,or be dilutive to our stockholders.Our use of interest rate hedging transactions could expose us to risks and financial losses that may adversely affect ourfinancial condition,liquidity and results

191、 of operations.To reduce our exposure to interest rate fluctuations,we have entered into,and in the future may enter into,interest rate swaps withvarious financial counterparties.The interest rate swap agreements effectively convert a portion of our variable rate122025/1/17 15:11Documenthttps:/www.s

192、ec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm12/102Table of Contentsinterest payments to a fixed price.There can be no assurances,however,that our hedging activity will be effective in insulating usfrom the risks associated with changes in interest rates.In addition,our h

193、edging transactions may expose us to certain risks andfinancial losses,including,among other things: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 a

194、ccordance with accounting rules to reflect changes in fairvalues,downward adjustments or“mark-to-market losses,”which would affect our stockholders equity;andthe risk that we may not be able to meet the terms and conditions of the hedging instruments,in which case we may berequired to settle the ins

195、truments prior to maturity with cash payments that could significantly affect our liquidity.Further,we have designated the swaps as cash flow hedges in accordance with Accounting Standards Codification Topic 815,Derivatives and Hedging.However,in the future,we may fail to qualify for hedge accountin

196、g treatment under these standards for anumber of reasons,including if we fail to satisfy hedge documentation and hedge effectiveness assessment requirements or if theswaps are not highly effective.If we fail to qualify for hedge accounting treatment,losses on the swaps caused by the change intheir f

197、air value will be recognized as part of net income,rather than being recognized as part of other comprehensive income.Operating results and cash flows may cause us to incur asset impairment charges.Long-lived assets,primarily property and equipment,and operating lease assets are reviewed at the stor

198、e level at least annually forimpairment,or whenever changes in circumstances indicate that a full recovery of net asset values through future cash flows is inquestion.We also assess the recoverability of indefinite-lived intangible assets at least annually or whenever events or changes incircumstanc

199、es indicate that the carrying amount may not be fully recoverable.Our impairment review requires us to makeestimates and projections regarding,but not limited to,sales,operating profit and future cash flows.If our operating performancereflects a sustained decline,we may be exposed to significant ass

200、et impairment charges in future periods,which could be materialto our results of operations.Reductions in income and cash flow from our marketing and servicing arrangement related to our private label and co-brandedcredit cards could adversely affect our operating results and cash flows.Synchrony Fi

201、nancial(“Synchrony”)owns and services our private label credit card and co-branded MasterCard programs.Ouragreement with Synchrony provides for certain payments to be made by Synchrony to the Company,including a share of incomefrom the performance of the credit card portfolios.The income and cash fl

202、ow that the Company receives from Synchrony isdependent upon a number of factors including the level of sales on private label and co-branded accounts,the percentage of saleson private label and co-branded accounts relative to the Companys total sales,the level of balances carried on the accounts,pa

203、yment rates on the accounts,finance charge rates and other fees on the accounts,the level of credit losses for the accounts,Synchronys ability to extend credit to our customers as well as the cost of customer rewards programs.All of these factors canvary based on changes in federal and state credit

204、card,banking and consumer protection laws,which could also materially limit theavailability of credit to consumers or increase the cost of credit to our cardholders.The factors affecting the income and cash flowthat the Company receives from Synchrony can also vary based on a variety of economic,leg

205、al,social and other factors that wecannot control.If the income or cash flow that the Company receives from our consumer credit card program agreement withSynchrony decreases,our operating results and cash flows could be adversely affected.We are subject to risks associated with importing merchandis

206、e from foreign countries.A substantial portion of our merchandise is sourced by our vendors and by us outside of the United States.All of our direct privatebrand vendors must comply with our supplier legal compliance program and applicable laws,including consumer and productsafety laws.Although we d

207、iversify our sourcing and production by country and supplier,the failure of a supplier to produce anddeliver our goods on time,to meet our quality standards and adhere to our product safety requirements or to meet the requirementsof our supplier compliance program or applicable laws could result in

208、damage to our reputation.Although we have implemented policies and procedures designed to facilitate compliance with laws and regulations relating todoing business in foreign markets and importing merchandise from abroad,there can be no assurance that suppliers and other thirdparties with whom we do

209、 business will not violate such laws and regulations or our policies,which could subject us to liability andcould adversely affect our results of operations.132025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm13/102Table of ContentsWe are sub

210、ject to the various risks of importing merchandise from abroad and purchasing product made in foreign countries,suchas:potential disruptions in manufacturing,logistics and supply;changes in duties,tariffs,quotas and voluntary export restrictions on imported merchandise;strikes and other events affec

211、ting 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

212、 alleged to be harmful;concerns about human rights,working conditions and other labor rights and conditions and environmental impact inforeign countries where merchandise is produced and raw materials or components are sourced,and changing labor,environmental and other laws in these countries;local

213、business practice and political issues that may result in adverse publicity or threatened or actual adverse consumeractions,including boycotts;natural disasters,public health crisis,acts of terrorism and other catastrophic events that could result in significantdisruptions at our manufacturing facil

214、ities or distribution centers of our third-party manufacturers,suppliers and deliveryservice providers;compliance with laws and regulations concerning ethical business practices,such as the U.S.Foreign Corrupt PracticesAct;andeconomic,political or other problems in countries from or through which me

215、rchandise is imported.Political or financial instability,trade restrictions,tariffs,currency exchange rates,labor conditions,congestion and labor issues atmajor ports,transport capacity and costs,systems issues,problems in third party distribution and warehousing and otherinterruptions of the supply

216、 chain,compliance with U.S.and foreign laws and regulations and other factors relating to internationaltrade and imported merchandise beyond our control could affect the availability and the price of our inventory.These risks andother factors relating to foreign trade could subject us to liability o

217、r hinder our ability to access suitable merchandise on acceptableterms or at all,which could adversely impact our results of operations.In addition,developments in tax policy,such as theimposition of tariffs on imported merchandise or changes to U.S.trade legislation,could have a material adverse ef

218、fect on ourresults of operations and liquidity.Disruptions and congestion at ports through which we import merchandise may increase our costs and/or delay the receipt ofgoods in our stores,which could adversely impact our profitability,financial position and cash flows.We ship the majority of our pr

219、ivate brand merchandise by ocean to ports in the United States.Our national brand suppliers alsoship merchandise by ocean.Disruptions in the operations of ports through which we import our merchandise,including,but notlimited to,labor disputes involving work slowdowns,lockouts or strikes,natural dis

220、asters,public health crises,and othercatastrophic events,could require us and/or our vendors to ship merchandise by air freight or to alternative ports in the UnitedStates.Shipping by air is significantly more expensive than shipping by ocean,which could adversely affect our profitability.Similarly,

221、shipping to alternative ports in the United States could result in increased lead times and transportation costs.Disruptionsat ports through which we import our goods could also result in unanticipated inventory shortages,which could adversely impactour reputation and our results of operations.If we

222、 cannot meet the continued listing requirements of the NYSE,the NYSE may delist our common stock.On January 31,2020,we received written notification from the New York Stock Exchange(“NYSE”)that the average closing priceof our common stock had fallen below$1.00 per share over a period of 30 consecuti

223、ve trading days,which is the minimum averageclosing share price required to maintain listing under Section 802.01C of the NYSE Listed Company Manual.The notice has noimmediate impact on the listing of our common stock,which will continue to be listed and traded on the NYSE during the periodallowed t

224、o regain compliance,subject to our compliance with other listing standards.Our common stock is permitted to continue totrade on the NYSE under the symbol“JCP,”but will have an added designation of“.BC”to indicate the status of the common stockas“below compliance.”We informed the NYSE that we intend

225、to cure the deficiency and to return to compliance with the NYSE continued listingrequirements.We can regain compliance at any time during the six-month period following receipt of the notification if ourcommon stock has a closing share price of at least$1.00 on the last trading day of any calendar

226、month during the six-month periodand also has an average closing share price of at least$1.00 over the 30-trading day period ending on the last trading day of thatmonth.142025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm14/1022025/1/17 15:11

227、Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm15/102Table of ContentsNotwithstanding the foregoing,if we were to determine that we must cure the deficiency by taking an action that would requireapproval of our stockholders(such as a reverse stock split)

228、,we could also regain compliance by(i)obtaining the requisitestockholder approval for such action and(ii)implementing the action promptly thereafter,such that the price of our common stockwould promptly exceed$1.00 per share,provided that the price must remain above that level for at least the follo

229、wing 30 tradingdays.However,there is no assurance that our stockholders would vote for such proposal.While we are considering various options to cure the deficiency,it may take a significant effort to regain compliance with thiscontinued listing standard,and there can be no assurance that we will be

230、 successful.Our common stock could also be delisted if(i)our average market capitalization over a consecutive 30 trading-day period is lessthan$15 million,or(ii)our common stock trades at an“abnormally low”price.In either case,we would not have an opportunity tocure the deficiency,and,as a result,ou

231、r common stock would be suspended from trading on the NYSE immediately,and the NYSEwould begin the process to delist our common stock,subject to our right to appeal under NYSE rules.There is no assurance thatany appeal we undertake in these or other circumstances would be successful,nor is there any

232、 assurance that we will continue tocomply with the other NYSE continued listing standards.Failure to maintain our NYSE listing could negatively impact us and our stockholders by reducing the willingness of investors tohold our common stock because of the resulting decreased price,liquidity and tradi

233、ng of our common stock,limited availability ofprice quotations,and reduced news and analyst coverage.These developments may also require brokers trading in our commonstock to adhere to more stringent rules and may limit our ability to raise capital by issuing additional shares in the future.Delistin

234、gmay adversely impact the perception of our financial condition and cause reputational harm with investors and parties conductingbusiness with us.In addition,the perceived decreased value of employee equity incentive awards may reduce their effectiveness inencouraging performance and retention.Our C

235、ompanys growth and profitability depend on the levels of consumer confidence and spending.Our results of operations are sensitive to changes in overall economic and political conditions that impact consumer spending,including discretionary spending.Many economic factors outside of our control,includ

236、ing the housing market,interest rates,recession,inflation and deflation,energy costs and availability,consumer credit availability and terms,consumer debt levels,taxrates and policy,and unemployment trends,influence consumer confidence and spending.The domestic and international politicalsituation a

237、nd actions also affect consumer confidence and spending.Additional events that could impact our performance includepublic health crises,terrorist threats and activities,worldwide military and domestic disturbances and conflicts,political instabilityand civil unrest.Declines in the level of consumer

238、spending could adversely affect our growth and profitability.Our business is seasonal,which impacts our results of operations.Our annual earnings and cash flows depend to a great extent on the results of operations for the last quarter of our fiscal year,which includes the holiday season.Our fiscal

239、fourth-quarter results may fluctuate significantly,based on many factors,includingholiday spending patterns and weather conditions.This seasonality causes our operating results to vary considerably from quarterto quarter.Our profitability may be impacted by weather conditions.Our merchandise assortm

240、ents reflect assumptions regarding expected weather patterns and our profitability depends on our abilityto timely deliver seasonally appropriate inventory.Unseasonable or unexpected weather conditions such as warm temperaturesduring the winter season or prolonged or extreme periods of warm or cold

241、temperatures could render a portion of our inventoryincompatible with consumer needs.Extreme weather or natural disasters could also severely hinder our ability to timely deliverseasonally appropriate merchandise,preclude customers from traveling to our stores,delay capital improvements or cause us

242、toclose stores.A reduction in the demand for or supply of our seasonal merchandise could have an adverse effect on our inventorylevels and results of operations.Changes in federal,state or local laws and regulations could increase our expenses and adversely affect our results ofoperations.Our busine

243、ss is subject to a wide array of laws and regulations.Government intervention and activism and/or regulatory reformmay result in substantial new regulations and disclosure obligations and/or changes in the interpretation of existing laws andregulations,which may lead to additional compliance costs a

244、s well as the diversion of our managements time and attention fromstrategic initiatives.If we fail to comply with applicable laws and regulations,we could be subject to legal risk,includinggovernment enforcement action and class action civil litigation that could disrupt our operations and increase

245、our costs of doingbusiness.Changes in the regulatory environment regarding topics such as privacy and information security,tax policy,product152025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm16/102Table of Contentssafety,environmental prote

246、ction,including regulations in response to concerns regarding climate change,collective bargainingactivities,minimum wage,wage and hour,and health care mandates,among others,as well as changes to applicable accountingrules and regulations,could also cause our compliance costs to increase and adverse

247、ly affect our business,financial condition andresults of operations.Legal and regulatory proceedings could have an adverse impact on our results of operations.Our Company is subject to various legal and regulatory proceedings relating to our business,certain of which may involvejurisdictions with re

248、putations for aggressive application of laws and procedures against corporate defendants.We are impacted bytrends in litigation,including class action litigation brought under various consumer protection,employment,and privacy andinformation security laws.In addition,litigation risks related to clai

249、ms that technologies we use infringe intellectual property rightsof third parties have been amplified by the increase in third parties whose primary business is to assert such claims.Reserves areestablished,as needed,based on our best estimates of our potential liability.However,we cannot accurately

250、 predict the ultimateoutcome of any such proceedings due to the inherent uncertainties of litigation.Regardless of the outcome or whether the claimsare meritorious,legal and regulatory proceedings may require that we devote substantial time and expense to defend our Company.Unfavorable rulings could

251、 result in a material adverse impact on our business,financial condition or results of operations.Significant changes in discount rates,actual investment return on pension assets,and other factors could affect our earnings,equity,and pension contributions in future periods.Our earnings may be positi

252、vely or negatively impacted by the amount of income or expense recorded for our qualified pensionplan.Generally accepted accounting principles in the United States of America(GAAP)require that income or expense for the planbe calculated at the annual measurement date using actuarial assumptions and

253、calculations.The most significant assumptions relateto the capital markets,interest rates and other economic conditions.Changes in key economic indicators can change theassumptions.Two critical assumptions used to estimate pension income or expense for the year are the expected long-term rate ofretu

254、rn on plan assets and the discount rate.In addition,at the measurement date,we must also reflect the funded status of the plan(assets and liabilities)on the balance sheet,which may result in a significant change to equity through a reduction or increase toother comprehensive income.We may also exper

255、ience volatility in the amount of the annual actuarial gains or losses recognized asincome or expense because we have elected to recognize pension expense using mark-to-market accounting.Although GAAPexpense and pension contributions are not directly related,the key economic factors that affect GAAP

256、 expense would also likelyaffect the amount of cash we could be required to contribute to the pension plan.Potential pension contributions include bothmandatory amounts required under federal law and discretionary contributions to improve a plans funded status.Our stock price has been and may contin

257、ue to be volatile.The market price of our common stock has fluctuated substantially and may continue to fluctuate significantly.Futureannouncements or disclosures concerning us or any of our competitors,our strategic initiatives,our sales and profitability,ourfinancial condition,any quarterly variat

258、ions in actual or anticipated operating results or comparable sales,any failure to meetanalysts expectations and sales of large blocks of our common stock,among other factors,could cause the market price of ourcommon stock to fluctuate substantially.In addition,the stock market has experienced price

259、 and volume fluctuations that haveaffected the market price of many retail and other stocks that have often been unrelated or disproportionate to the operatingperformance of these companies.This volatility could affect the price at which you could sell shares of our common stock.Securities class act

260、ion litigation has often been instituted against companies following periods of volatility in the overall marketand in the market price of a companys securities.Such litigation could result in substantial costs,divert our managementsattention and resources and have an adverse effect on our business,

261、results of operations and financial condition.The Companys ability to use net operating loss carryforwards to offset future taxable income for U.S.federal income taxpurposes may be limited.The Company has a federal net operating loss(NOL)of$2.1 billion as of February 1,2020.Nearly all of these NOL c

262、arryforwards(expiring in 2032 through 2034)arose prior to December 31,2017 and are available to offset future taxable income in full.NOLsrecognized after December 31,2017 are only available to offset up to 80%of the Companys future taxable income.Section 382 of the Internal Revenue Code of 1986,as a

263、mended(the Code),imposes an annual limitation on the amount of taxableincome that may be offset by a corporations NOLs if the corporation experiences an“ownership change”as defined in Section 382of the Code.An ownership change occurs when the Companys“five-percent shareholders”(as defined in162025/1

264、/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm17/102Table of ContentsSection 382 of the Code)collectively increase their ownership in the Company by more than 50 percentage points(by value)over arolling three-year period.Additionally,various st

265、ates have similar limitations on the use of state NOLs following an ownershipchange.If an ownership change occurs,the amount of the taxable income for any post-change year that may be offset by a pre-change lossis subject to an annual limitation that is cumulative to the extent it is not all utilize

266、d in a year.This limitation is derived bymultiplying the fair market value of the Company stock as of the ownership change by the applicable federal long-term tax-exemptrate,which was 1.63%at February 1,2020.To the extent that a company has a net unrealized built-in gain at the time of anownership c

267、hange,which is realized or deemed recognized during the five-year period following the ownership change,there is anincrease in the annual limitation for each of the first five-years that is cumulative to the extent it is not all utilized in a year.The Company has an ongoing study of the rolling thre

268、e-year testing periods.Based upon the elections the Company has made andthe information that has been filed with the Securities and Exchange Commission through February 1,2020,the Company has nothad a Section 382 ownership change through February 1,2020.If an ownership change should occur in the fut

269、ure,the Companys ability to use the NOL to offset future taxable income will besubject to an annual limitation and will depend on the amount of taxable income generated by the Company in future periods.There is no assurance that the Company will be able to fully utilize the NOL and the Company could

270、 be required to record anadditional valuation allowance related to the amount of the NOL that may not be realized,which could impact the Companysresult of operations.We believe that these NOL carryforwards are a valuable asset for us.Consequently,we have a stockholders rights agreement(Amended Right

271、s Agreement)in place,which was approved by the Companys stockholders,to protect our NOLs during theeffective period of the Amended Rights Agreement.On January 24,2020,the term of the Amended Rights Agreement wasextended to January 25,2023.The Company expects to submit the extension of the Amended Ri

272、ghts Agreement to stockholders forapproval at its 2020 annual meeting of stockholders.If stockholders do not approve the extension of the Amended RightsAgreement,the Amended Rights Agreement will terminate.Although the Amended Rights Agreement is intended to reduce the likelihood of an“ownership cha

273、nge”that could adversely affectus,there is no assurance that the restrictions on transferability in the rights plan will prevent all transfers that could result in such an“ownership change”.The Amended Rights Agreement could make it more difficult for a third party to acquire,or could discourage a t

274、hird party fromacquiring,our Company or a large block of our common stock.A third party that acquires 4.9%or more of our common stockcould suffer substantial dilution of its ownership interest under the terms of the Amended Rights Agreement through the issuance ofcommon stock or common stock equival

275、ents to all stockholders other than the acquiring person.The foregoing provisions may adversely affect the marketability of our common stock by discouraging potential investors fromacquiring our stock.In addition,these provisions could delay or frustrate the removal of incumbent directors and could

276、make moredifficult a merger,tender offer or proxy contest involving us,or impede an attempt to acquire a significant or controlling interest inus,even if such events might be beneficial to us and our stockholders.Item 1B.Unresolved Staff Comments None.172025/1/17 15:11Documenthttps:/www.sec.gov/Arch

277、ives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm18/102Table of ContentsItem 2.Properties At February 1,2020,we operated 846 department stores throughout the continental United States,Alaska and Puerto Rico,ofwhich 387 were owned,including 110 stores located on ground leases.The followi

278、ng table lists the number of stores operating bystate as of February 1,2020:Alabama15 Maine5Oklahoma 14Alaska1 Maryland15Oregon 8Arizona21 Massachusetts9Pennsylvania 27Arkansas13 Michigan33Rhode Island 2California71 Minnesota15South Carolina 13Colorado16 Mississippi9South Dakota 3Connecticut7 Missou

279、ri23Tennessee 21Delaware3 Montana5Texas 82Florida52 Nebraska8Utah 8Georgia21 Nevada6Vermont 4Idaho8 New Hampshire9Virginia 22Illinois29 New Jersey11Washington 19Indiana22 New Mexico10West Virginia 8Iowa11 New York38Wisconsin 10Kansas14 North Carolina20Wyoming 3Kentucky22 North Dakota5Puerto Rico 6Lo

280、uisiana13 Ohio36 Total square feet93.5 million We are party to a$1.688 billion senior secured term loan credit facility and the issuer of$500 million aggregate principal amountof senior secured notes that are secured by mortgages on certain real property of the Company,in addition to liens on substa

281、ntiallyall personal property of the Company,subject to certain exclusions set forth in the security documents relating to the term loancredit facility and the senior secured notes.The real property subject to mortgages under the term loan credit facility and theindenture governing the senior secured

282、 notes includes our distribution centers and certain of our stores.At February 1,2020,our supply chain network operated 11 facilities with multiple types of distribution activities, fulfillment centers(direct to customers),store merchandise distribution centers(stores)and regional warehouses(regiona

283、l)as indicated in the following table:Square FootageLeased/Owned NumberPrimary Function(s)(in thousands)Owned 6direct to customers,stores,regional9,266Leased 5stores,regional2,529 11,795Item 3.Legal ProceedingsThe matters under the caption Litigation in Note 22 of the Notes to Consolidated Financial

284、 Statements included in this Form 10-K are incorporated herein by reference.Item 4.Mine Safety Disclosures Not applicable.182025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm19/102Table of ContentsPART II Item 5.Market for Registrants Common

285、Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Registrants Common Equity Our common stock is traded principally on the New York Stock Exchange(NYSE)under the symbol“JCP.”The number ofstockholders of record at March 16,2020,was 20,557.In addition to common sto

286、ck,we have authorized 25 million shares ofpreferred stock,of which no shares were issued and outstanding at February 1,2020.Since May 2012,the Company has not paid a dividend.Under our senior secured term loan credit facility and senior secured asset-based credit facility,we are subject to covenants

287、 restricting our ability to pay cash dividends.Additional information relating to the common stock and preferred stock is included in this Annual Report on Form 10-K in theConsolidated Statements of Stockholders Equity and in Note 14 to the Consolidated Financial Statements.Issuer Purchases of Secur

288、ities No repurchases of common stock were made during the fourth quarter of 2019 and no amounts are authorized for share repurchasesas of February 1,2020.Recent Sales of Unregistered Securities On May 2,2019,the Company granted a compensatory equity award of 284,091 time-based restricted stock units

289、(TBRSUs)toSteve Whaley,the Companys senior vice president,principal accounting officer and controller using the exemption rule under Rule506 of Regulation D.On April 11,2019,the Company granted a compensatory equity award of 1,209,678 TBRSUs to Bill Wafford,the Companysexecutive vice president,chief

290、 financial officer using the exemption rule under Rule 506 of Regulation D.192025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm20/102Table of ContentsFive-Year Total Stockholder Return Comparison The following presentation compares our cumula

291、tive stockholder returns for the past five fiscal years with the returns of the S&P500 Stock Index and the S&P 500 Retail Index for Department Stores over the same period.A list of these companies follows thegraph below.The graph assumes$100 invested at the closing price of our common stock on the N

292、YSE and each index as of the lasttrading day of our fiscal year 2014 and assumes that all dividends,if applicable,were reinvested on the date paid.The points on thegraph represent fiscal year-end amounts based on the last trading day of each fiscal year.The following graph and relatedinformation sha

293、ll not be deemed“soliciting material”or to be“filed”with the Securities and Exchange Commission,nor shall suchinformation be incorporated by reference into any filing under the Securities Act of 1933 or Securities Exchange Act of 1934,eachas amended,except to the extent that we specifically incorpor

294、ate it by reference into such filing.S&P Department Stores:Macys,Kohls,Nordstrom 2015 2016 20172018 2019 2020JCPenney$100$100$89$49$18$10S&P 500100 99 120147 147 179S&P Department Stores100 72 5872 76 54 The stockholder returns shown are neither determinative nor indicative of future performance.202

295、025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm21/102Table of ContentsItem 6.Selected Financial DataEffective February 3,2019,we adopted Accounting Standards Update(ASU)2016-02,Leases(Topic 842),as amended.TheCompany adopted the provisions

296、of ASU 2016-02 using the modified retrospective adoption method and the simplified transitionoption.As a result,prior period financial position information has not been restated to reflect the new accounting standard.SeeNote 3 to the Consolidated Financial Statements for further information.As of Fe

297、bruary 4,2018,we adopted Accounting Standards Codification(ASC)Topic 606(ASC 606),Revenue from Contracts withCustomers,and ASU 2017-07,Compensation-Retirement Benefits(Topic 715):Improving the Presentation of Net Periodic Costand Net Periodic Postretirement Benefit Cost.As a result,certain prior per

298、iod results have been adjusted due to the transitionmethod applied.Five-Year Financial Summary($in millions,except per share data)2019 2018 201720162015(1)Results for the year Total net sales$10,716$11,664$12,554$12,571$12,625 Sales percent increase/(decrease):Total net sales(8.1)%(7.1)%(2)(0.1)%(2)

299、(0.4)%(3)3.0%Comparable store sales(4)(7.7)%(3.1)%0.1%0.0%4.5%Operating income/(loss)(8)(6)2123244 As a percent of sales(0.1)%(0.1)%1.7%2.6%0.0%Net income/(loss)from continuingoperations(268)(255)(118)(17)(513)Adjusted EBITDA(non-GAAP)(5)583568 935926654 Adjusted net income/(loss)from continuingoper

300、ations(non-GAAP)(5)(257)(296)31(59)(376)Per common share Earnings/(loss)per share from continuingoperations,diluted$(0.84)$(0.81)$(0.38)$(0.06)$(1.68)Adjusted earnings/(loss)per share fromcontinuing operations,diluted(non-GAAP)(5)$(0.80)$(0.94)$0.10$(0.19)$(1.23)Financial position and cash flow Tota

301、l assets$7,989$7,721$8,454$9,160$9,211Cash and cash equivalents386333 458887900 Total debt(6)3,7213,808 4,0124,6024,769 Free cash flow(non-GAAP)(5)145111 2133131 (1)We have chosen to not adjust 2015 results for ASC 606,as permitted.Therefore,2015 only reflects adjusted results for ASU 2017-07.(2)Inc

302、ludes the effect of the 53rd week in 2017.Excluding sales of$147 million for the 53rd week in 2017,total net sales decreased 6.0%in2018 and 1.3%in 2017.(3)Calculation of increase/(decrease)of Total net sales as presented.(4)Comparable store sales are presented on a 52-week basis and include sales fr

303、om all stores,including sales from services,that have beenopen for 12 consecutive full fiscal months and eCommerce sales.Stores closed for an extended period are not included in comparable storesales calculations,while stores remodeled and minor expansions not requiring store closure remain in the c

304、alculations.Certain items,suchas sales return estimates and store liquidation sales,are excluded from the Companys calculation.Our definition and calculation ofcomparable store sales may differ from other companies in the retail industry.(5)See Non-GAAP Financial Measures herein for additional infor

305、mation and reconciliation to the most directly comparable GAAP financialmeasure.(6)Total debt includes long-term debt,net of unamortized debt issuance costs,including current maturities and any borrowings under ourrevolving credit facility.2025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/dat

306、a/1166126/000116612620000022/jcp-0201202010k.htm22/102212025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm23/102Table of ContentsFive-Year Operations Summary 20192018201720162015Number of department stores:Beginning of year 8648721,0131,0211,

307、062Openings 11Closings(18)(9)(141)(9)(41)End of year 8468648721,0131,021Gross selling space(square feet in millions)93.595.095.6103.3104.7Sales per gross square foot(1)$114$122$127$121$120Sales per net selling square foot(1)$159$170$177$166$165(1)Calculation includes the sales,including commission r

308、evenue,and square footage of department stores,including selling space allocated toservices and licensed departments,that were open for the full fiscal year,as well as eCommerce sales.222025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm24/102

309、Table of ContentsItem 7.Managements Discussion and Analysis of Financial Condition and Results of Operations OverviewThe following discussion,which presents our results,should be read in conjunction with the accompanying Consolidated FinancialStatements and notes thereto,along with the Five-Year Fin

310、ancial and Operations Summaries,the risk factors and the cautionarystatement regarding forward-looking information.Unless otherwise indicated,all references in this Managements Discussion andAnalysis(MD&A)related to earnings/(loss)per share(EPS)are on a diluted basis and all references to years rela

311、te to fiscal yearsrather than to calendar years.JCPenney is a national omnichannel retailer operating through our 846 stores in 49 states and Puerto Rico as well as eCommercechannels,which consist of our website at and our JCPenney mobile application.We offer a wide range of appareland home merchand

312、ise from a portfolio of private,exclusive and national brands.We operate in a highly competitive retailenvironment,competing with brick and mortar stores,as well as omnichannel and exclusively eCommerce businesses.Plan for RenewalIn November 2019,the Company announced its Plan for Renewal to return

313、JCPenney to sustainable,profitable growth.Coupledwith our deep understanding of the customer,these five components of our Plan for Renewal guide everything we do:Offer compelling merchandise;Deliver an engaging experience;Drive traffic;Fuel growth;andBuild a results-minded culture.We plan to transfo

314、rm our merchandising efforts centered around Offering Compelling Merchandise within the five lifestyles ofhow our customers,in particular the All-in Shopping Enthusiast,live and want to shop:To Deliver an Engaging Experience,we used our extensive research and customer insights to create test and lea

315、rns whichfeatured occasion merchandising,improved visual merchandising,and a redesigned shopping experience.We expanded thelearnings from these tests to over 90 stores.In addition,in November,we opened our Brand-Defining store to create an inspiring,shared experience showcasing compelling products a

316、nd brands along with differentiating elements.It is the fullest articulation ofour customer commitment-and the manifestation of the research,planning,and hard work that characterized 2019.We aremeasuring over 100 touchpoints in this lab store to inform our future actions.To Drive Traffic,we have thr

317、ee distinct work streams:personalization,our affinity programs,and improvements to oureCommerce site-which we consider our flagship store.Additionally,we strengthened our execution on fulfillment,includingshipping from stores and picking up online orders in stores,which is helping us meet our increa

318、sing fulfillment demands.To Fuel Growth,we are developing a more efficient operating model,reinvesting in value-creating activities,and establishing acapital structure that supports the long-term needs of the company.Lastly,we are developing a Results-Minded Culture focused on accountability,urgency

319、,and innovative problem solving at alllevels of the organization,and we are building a culture that connects all associates to achievements larger than the individual.232025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm25/102Table of Contents

320、2019 Summary Total net sales were$10,716 million,a decrease of 8.1%as compared to 2018,and comparable store sales decreased 7.7%for the year.Adjusted comparable store sales,which exclude the impact of the Companys exit from major appliance andin-store furniture categories,decreased 5.6%for the year.

321、See Non-GAAP Financial Measures for a discussion of thisnon-GAAP measure and reconciliation to its most directly comparable GAAP financial measure and further informationon its uses and limitations.Credit income and other was$451 million compared to$355 million in 2018.The increase was due to improv

322、edperformance of the credit portfolio.Cost of goods sold,which excludes depreciation and amortization,as a percentage of Total net sales was 65.4%comparedto 67.5%last year.The improvement as a rate of net sales was primarily driven by an increase in both store and onlineselling margins,improved shri

323、nkage results and the exit from the major appliance and in-store furniture categories earlierthis year.SG&A expenses decreased$11 million,or 0.3%,as compared to 2018.The decrease in SG&A dollars was primarily dueto lower advertising and store controllable expenses,which were offset by slightly highe

324、r incentive compensation.Net loss was$268 million,or$0.84 per share,compared to a net loss of$255 million,or$0.81 per share,in 2018.Resultsfor 2019 included the following amounts that are not directly related to our ongoing core business operations:$48 million,or$(0.15)per share,of restructuring and

325、 management transition charges;$35 million,or$0.11 per share,for other components of net periodic pension and postretirement benefit income;$1 million,or$0.00 per share,for the gain on extinguishment of debt;and$1 million,or$0.00 per share,for the net gain on the sale of non-operating assets.Adjuste

326、d net loss was$257 million,or$(0.80)per share,compared to adjusted net loss of$296 million,or$(0.94)pershare,in 2018.See Non-GAAP Financial Measures for a discussion of this non-GAAP measure and reconciliation to itsmost directly comparable GAAP financial measure and further information on its uses

327、and limitations.Adjusted EBITDA was$583 million for 2019 compared to adjusted EBITDA of$568 million in 2018.See Non-GAAPFinancial Measures for a discussion of this non-GAAP measure and reconciliation to its most directly comparable GAAPfinancial measure and further information on its uses and limita

328、tions.242025/1/17 15:11Documenthttps:/www.sec.gov/Archives/edgar/data/1166126/000116612620000022/jcp-0201202010k.htm26/102Table of ContentsResults of OperationsEffective February 3,2019,we adopted ASU 2016-02,Leases(Topic 842),as amended.The Company adopted the provisions ofthe new lease standard us

329、ing the modified retrospective adoption method and the simplified transition option.See Note 3 to theConsolidated Financial Statements for further information.Three-Year Comparison of Operating Performance(in millions,except per share data)2019 20182017Total net sales$10,716$11,664$12,554Credit inco

330、me and other451 355319Total revenues11,167 12,01912,873Total net sales percent increase/(decrease)from prior year(8.1)%(7.1)%(1)(0.1)%(1)Comparable store sales increase/(decrease)(2)(7.7)%(3.1)%0.1%Adjusted comparable store sales increase/(decrease)(non-GAAP)(3)(5.6)%(2.3)%(1.9)%Costs and expenses/(

331、income):Cost of goods sold(exclusive of depreciation and amortization shownseparately below)7,013 7,8708,208Selling,general and administrative3,585 3,5963,845Depreciation and amortization544 556570Real estate and other,net(15)(19)(146)Restructuring and management transition48 22184Total costs and ex

332、penses11,175 12,02512,661Operating income/(loss)(8)(6)212As a percent of sales(0.1)%(0.1)%1.7%Other components of net periodic pension and postretirement benefitcost/(income)(35)(71)98(Gain)/loss on extinguishment of debt(1)2333Net interest expense293 313325Income/(loss)before income taxes(265)(271)

333、(244)Income tax(benefit)/expense3(16)(126)Net income/(loss)$(268)$(255)$(118)Adjusted EBITDA(3)$583$568$935Adjusted net income/(loss)(non-GAAP)(3)$(257)$(296)$31Diluted EPS$(0.84)$(0.81)$(0.38)Adjusted diluted EPS(non-GAAP)(3)$(0.80)$(0.94)$0.10Weighted average shares used for diluted EPS320.2 315.7311.1(1)Includes the effect of the 53rd week in 2017.Excluding sales of$147 million for the 53rd we