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GuruFocus has detected 2 Warning Signs with JC Penney Co Inc $JCP.
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JC Penney Co Inc (NYSE:JCP)
Capital Lease Obligation
$0 Mil (As of Apr. 2017)

JC Penney Co Inc's long-term capital lease obligation for the quarter that ended in Apr. 2017 was $0 Mil.

JC Penney Co Inc's quarterly long-term capital lease obligation increased from Oct. 2016 ($9 Mil) to Jan. 2017 ($219 Mil) but then declined from Jan. 2017 ($219 Mil) to Apr. 2017 ($0 Mil).

JC Penney Co Inc's annual long-term capital lease obligation increased from Jan. 2015 ($0 Mil) to Jan. 2016 ($10 Mil) and increased from Jan. 2016 ($10 Mil) to Jan. 2017 ($219 Mil).


Definition

Capital lease obligations are the amount due for long-term asset lease agreements that are nearly equivalent to asset purchases. Capital lease obligations are installment payments that constitute a payment of principal plus interest for the capital lease. The current portion of a capital lease obligation is the portion of a long-term capital lease that is due over the next year.


Explanation

Under US Generally Accepted Accounting Principles (GAAP), a capital lease is essentially equivalent to a purchase by the lessee if it meets the following criteria:

1. Ownership of the asset is transferred to the lessee at the end of the lease term;
2. The lease contains a bargain purchase option to buy the equipment at less than fair market value;
3. The lease term equals or exceeds 75% of the asset's estimated useful life;
4. The present value of the lease payments equals or exceeds 90% of the total original cost of the equipment.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

JC Penney Co Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
LongTermCapitalLeaseObligation 0000000010219

JC Penney Co Inc Quarterly Data

Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17Apr17
LongTermCapitalLeaseObligation 022014107092190
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