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Asset quality is extremely high (non performing assets to total assets was 0.05% at year end), but it is that way partially because the bank has maintained (during extremely favorable conditions) a charge off ratio of 0.28% (2 year average).Provisions increased 25% last year due to elevated credit card charge offs. Credit card charge offs are typically higher and more consistent so past levels aren't a concern, but one must recognize that these accounts are growing and that asset quality has been at an all time high. Any form of mean reversion should be expected to yield higher provision charges that are a headwind to earnings growth.Note on the graph below the jagged edges on the chart with net charge offs is due to plotting quarterly amounts reported in 2016 and 2017.
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iPhone Cases $211M on 2017 ABL Credit Facility now maturing 2022 $190M 5.75% Senior Unsecured Notes due 2018 $175M 8.125% Senior Unsecured Notes due 2019 $400M 5.65% Senior Unsecured Notes due 2020 $1,635M Term Loan Facility due 2023 $500M 5.875% Senior Secured Notes due 2023 Free cash flow here is incredibly important. Penney has long maintained that it intends deleverage through pushing its cash flow towards debt paydown. The company has been working hard at this already this year, reducing its 2018 and 2019 maturities to less than $200M outstanding per issue iPhone x case Cases..
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