<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.
20549
---------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
---------------
For the 13 and 39 week periods Commission file number 1-777
ended October 29, 1994
J. C. PENNEY COMPANY, INC.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-5583779
- ----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6501 Legacy Drive, Plano, Texas 75024 - 3698
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 431-1000
-------------------------
-------------------
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 preceding 12 months (or for such shorter 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 X . No .
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
232,431,640 shares of Common Stock of $0.50 par value, as of October 29, 1994.
<PAGE>
-1-
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS.
The following interim financial information is unaudited but, in the opinion of
the Company, includes all adjustments, consisting only of normal recurring
accruals, necessary for a fair presentation. The financial information should
be read in conjunction with the audited consolidated financial statements
included in the Company's Annual Report on Form 10-K for the 52 weeks ended
January 29, 1994.
Statements of Income
(Amounts in millions except per share data)
<TABLE>
<CAPTION>
13 weeks ended 39 weeks ended
---------------------- ----------------------
Oct. 29, Oct. 30, Oct. 29, Oct. 30,
1994 1993 1994 1993
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Retail sales $ 5,149 $ 4,735 $ 13,741 $ 12,662
Other revenue 179 153 518 438
---------- ---------- ---------- ----------
Total revenue 5,328 4,888 14,259 13,100
---------- ---------- ---------- ----------
Costs and expenses
Cost of goods sold, occupancy, buying,
and warehousing costs 3,488 3,205 9,403 8,661
Selling, general, and administrative
expenses 1,204 1,145 3,375 3,191
Costs and expenses of other businesses 141 115 399 326
Net interest expense and credit
operations 48 29 57 71
---------- ---------- ---------- ----------
Total costs and expenses 4,881 4,494 13,234 12,249
---------- ---------- ---------- ----------
Income before income taxes, extraordinary
charge, and cumulative effect of
accounting change 447 394 1,025 851
Income taxes 173 173 396 346
---------- ---------- ---------- ----------
Income before extraordinary charge and
cumulative effect of accounting change 274 221 629 505
Extraordinary charge on debt redemption,
net of income taxes of $23 and $33 -- (36) -- (53)
Cumulative effect of accounting change
for income taxes -- -- -- 51
---------- ---------- ---------- ----------
Net income $ 274 $ 185 $ 629 $ 503
========== ========== ========== ==========
Net income per common share
Primary
Income before extraordinary charge and
cumulative effect of accounting change $ 1.11 $ .88 $ 2.51 $ 1.99
Extraordinary charge on debt redemption -- (.15) -- (.22)
Cumulative effect of accounting change
for income taxes -- -- -- .21
========== ========== ========== ==========
Net income $ 1.11 $ .73 $ 2.51 $ 1.98
========== ========== ========== ==========
Fully diluted
Income before extraordinary charge and
cumulative effect of accounting change $ 1.04 $ .83 $ 2.39 $ 1.90
Extraordinary charge on debt redemption -- (.14) -- (.20)
Cumulative effect of accounting change
for income taxes -- -- -- .19
---------- ---------- ---------- ----------
Net income $ 1.04 $ .69 $ 2.39 $ 1.89
========== ========== ========== ==========
Weighted average common shares outstanding
Primary 236.8 239.0 238.2 238.7
========== ========== ========== ==========
Fully diluted 258.1 262.7 259.6 261.5
========== ========== ========== ==========
</TABLE>
<PAGE>
-2-
Balance Sheets
(Amounts in millions)
<TABLE>
<CAPTION>
Oct. 29, Oct. 30, Jan. 29,
1994 1993 1994
-------- -------- --------
<S> <C> <C> <C>
ASSETS
Current assets
Cash and short term investments
of $193, $263, and $156 $ 314 $ 365 $ 173
Receivables, net 4,618 3,899 4,679
Merchandise inventories 4,833 4,417 3,545
Prepaid expenses 209 196 168
-------- -------- --------
Total current assets 9,974 8,877 8,565
Properties, net of accumulated
depreciation of $2,071, $2,029,
and $2,001 3,864 3,768 3,818
Investments 1,352 1,131 1,182
Deferred insurance policy acquisition costs 477 414 426
Other assets 911 776 797
-------- -------- --------
$ 16,578 $ 14,966 $ 14,788
======== ======== ========
</TABLE>
<PAGE>
-3-
Balance Sheets
(Amounts in millions)
<TABLE>
<CAPTION>
Oct. 29, Oct. 30, Jan. 29,
1994 1993 1994
-------- -------- --------
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 2,610 $ 2,485 $ 2,139
Short term debt 2,253 1,998 1,284
Current maturities of long term debt -- 887 348
Deferred taxes 110 83 112
-------- -------- --------
Total current liabilities 4,973 5,453 3,883
Long term debt 3,380 1,979 2,929
Deferred taxes 1,015 908 1,013
Bank deposits 650 558 581
Insurance policy and claims reserves 603 522 540
Other liabilities 462 566 477
-------- -------- --------
Total liabilities 11,083 9,986 9,423
Stockholders' equity
Preferred stock, without par value:
Authorized, 25 million shares -
issued, 1 million shares of
Series B ESOP convertible preferred 634 652 648
Guaranteed ESOP obligation (343) (414) (379)
Common stock, par value $0.50:
Authorized, 1,250 million shares -
issued, 232, 236, and 236 million
shares 1,042 983 1,003
-------- -------- --------
Total capital stock 1,333 1,221 1,272
-------- -------- --------
Reinvested earnings at beginning
of year 4,093 3,531 3,531
Net income 629 503 940
Net unrealized change in debt
and equity securities (8) (1) 1
Retirement of common stock (237) -- --
Common stock dividends declared (295) (254) (339)
Preferred stock dividends
declared, net of taxes (20) (20) (40)
-------- -------- --------
Reinvested earnings at end of
period 4,162 3,759 4,093
-------- -------- --------
Total stockholders' equity 5,495 4,980 5,365
-------- -------- --------
$16,578 $14,966 $14,788
======== ======== ========
</TABLE>
<PAGE>
-4-
Statements of Cash Flows
(Amounts in millions)
<TABLE>
<CAPTION>
39 weeks ended
-------------------------
Oct. 29, Oct. 30,
1994 1993
---------- ----------
<S> <C> <C>
Operating activities
Net income $ 629 $ 503
Extraordinary charge, net of income taxes -- 53
Cumulative effect of accounting change -- (51)
Depreciation and amortization 215 219
Amortization of original issue discount 4 36
Deferred taxes -- (34)
Change in cash from:
Customer receivables 206 345
Securitized customer receivables amortized -- (342)
Inventories, net of trade payables (862) (740)
Other assets and liabilities, net (102) (79)
---------- ----------
90 (90)
---------- ----------
Investing activities
Capital expenditures (365) (312)
Purchases of investment securities (432) (304)
Proceeds from sales of investment securities 267 173
---------- ----------
(530) (443)
---------- ----------
Financing activities
Increase in short term debt 969 1,091
Issuance of long term debt 500 --
Payments of long term debt (350) (352)
Premium on debt retirement -- (16)
Common stock issued, net 34 28
Retirement of common stock (258) --
Preferred stock retired (14) (14)
Dividends paid, preferred and common (300) (265)
---------- ----------
581 472
---------- ----------
Net increase (decrease) in cash and short term
investments 141 (61)
Cash and short term investments at beginning
of year 173 426
---------- ----------
Cash and short term investments at end of
third quarter $ 314 $ 365
========== ==========
</TABLE>
<PAGE>
-5-
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Financial Condition
- -------------------
Customer receivables at the end of the 1994 third quarter were $3,420 million,
$574 million or 20.2 per cent higher than the prior year. Customer receivables
increased due to higher sales volume, greater usage of the JCPenney credit card
by customers, the addition of new credit card accounts, and a lower repayment
rate in the nine months ended October 29, 1994. Also, receivables increased due
to the amortization of the $425 million Series D Trust Certificates in the
latter part of fiscal 1993. Total customer receivables serviced by the Company,
including those sold through a Trust, were $4,145 million, $491 million or 13.4
per cent higher than the prior year.
Merchandise inventories, on a FIFO basis, were $5,079 million at the end of the
third quarter, an increase of 8.1 per cent from the level in the prior year.
The current cost of inventories exceeded the LIFO basis amount carried on the
balance sheet by approximately $246 million at October 29, 1994, $246 million at
January 29, 1994, and $282 million at October 30, 1993.
Capital expenditures for property, plant and equipment were $365 million in the
nine months ended October 29, 1994, $53 million higher than the comparable
period last year, primarily due to increased expenditures for new and existing
stores.
Investments, primarily JCPenney Insurance investments and asset-backed
certificates held by the Company, were $1,352 million at October 29, 1994, an
increase of $221 million from the end of the 1993 third quarter. The increase
reflects, in part, the Company's investment of excess cash in fixed income
securities totalling $117 million. JCPenney Insurance investments were $719
million, $20 million higher than the prior year's level.
Effective January 30, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities". This Statement requires that securities be classified
as trading, held-to-maturity, or available-for-sale. The Company's marketable
investment securities, primarily held by JCPenney Insurance, are classified as
available-for-sale and are required to be carried at market value. Changes in
unrealized gains and losses are recorded directly to stockholders' equity, net
of applicable income taxes. Adoption of this Statement had no impact on net
income.
Other assets were $911 million at the end of the 1994 third quarter, an increase
of $135 million from the prior year. The Company made a $99 million
contribution to its pension plan in the 1994 first quarter, which increased the
prepaid pension asset.
<PAGE>
-6-
Accounts payable and accrued expenses were $2,610 million on October 29, 1994,
$125 million higher than the prior year. Trade payables were $1,461 million,
$98 million above last year's level due to higher merchandise inventories. The
quarterly dividend on common stock was increased to 42 cents per share beginning
with the first quarter of 1994, or an indicated annual rate of $1.68 per share,
as compared with $1.44 per share in 1993. Dividends payable were $99 million,
$13 million higher than last year reflecting the increase in the quarterly
dividend rate.
Total debt on the Company's balance sheet at October 29, 1994 was $5,633 million
as compared with $4,864 million at October 30, 1993, an increase of 15.8 per
cent. Total debt was higher than last year to support the growth in customer
receivables, the increased investment in merchandise inventories, and the
Company's stock buyback program.
Total debt, net of short term investments, and including off-balance-sheet debt
related to operating leases and the securitization of a portion of the Company's
customer receivables, was $6,493 million on October 29, 1994, as compared with
$5,928 million at October 30, 1993, an increase of 9.5 per cent. The Company's
debt to capital ratio was 54.2 per cent, compared with 54.3 per cent at the end
of the third quarter last year.
In October 1994, Moody's Investor Service raised its ratings of the Company's
long-term debt to A1 from A2.
On July 1, 1994, the Company established a Series A, Medium-Term Note program of
up to $1 billion. Issuance and sale of the notes may be made from time to time
in various amounts and maturities. This Medium-Term Note program is a component
of the Company's overall debt securities program implemented pursuant to a shelf
registration statement filed by the Company in April 1994. The Company
anticipates using the net proceeds from Medium-Term Note sales for general
corporate purposes. As of October 29, 1994, no Medium-Term Notes had been
issued.
On March 9, 1994, the Board of Directors approved the purchase of up to 10
million shares of the Company's common stock to offset dilution caused by the
issuance of common shares under the Company's equity compensation and benefit
plans. For the nine months ended October 29, 1994, the Company purchased
approximately 5.0 million shares of common stock at a cost of $258 million. All
shares were retired and returned to the status of authorized but unissued shares
of common stock.
<PAGE>
-7-
Results of Operations
- ---------------------
Ratios useful in analyzing the results of operations are as follows:
<TABLE>
<CAPTION>
13 weeks ended 39 weeks ended
------------------ ------------------
Oct. 29, Oct. 30, Oct. 29, Oct. 30,
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Retail sales, per cent increase 8.7 9.1 8.5 6.2
JCPenney stores sales, per cent
increase 8.3 8.1 7.5 5.7
Gross margin, per cent of retail
sales
FIFO 32.2 32.3 31.6 31.6
LIFO 32.2 32.3 31.6 31.6
Selling, general, and adminis-
trative expenses, per cent of
retail sales 23.4 24.2 24.6 25.2
Effective income tax rate -
operations 38.7 40.4 38.7 39.0
</TABLE>
For the 13 weeks ended October 29, 1994, net income was a Company record for the
third quarter at $274 million, or $1.04 per share, as compared with $185
million, or 69 cents per share, in the same period last year. Net income in the
1993 third quarter included an extraordinary charge related to debt redemption.
Excluding the effect of this item, net income for the 1994 third quarter, at
$274 million, was 24.1 per cent higher than 1993's income of $221 million, and
net income per share was 25.3 per cent higher than last year's 83 cents per
share. For the nine months ended October 29, 1994, net income totalled $629
million, or $2.39 per share, as compared with $503 million, or $1.89 per share,
in the comparable 1993 period. The improvement in earnings in the third quarter
and nine months ended October 29, 1994, reflected the increased sales
performance of both JCPenney stores and catalog, and well-managed expenses.
Third quarter total retail sales increased 8.7 per cent to $5,149 million from
$4,735 million in last year's comparable period. Third quarter sales from
JCPenney stores increased 8.3 per cent from the prior year's period. Sales from
the Company's catalog operation increased 10.1 per cent in the third quarter
while sales of the Thrift Drug store operation improved by 8.5 per cent over the
comparable 1993 period. For the nine months ended October 29, 1994, total
retail sales increased 8.5 per cent to $13,741 million from $12,662 million in
the comparable 1993 period.
Gross margin dollars improved $131 million or 8.5 per cent in the 1994 third
quarter compared with the same 1993 period, due to increased sales volume from
both stores and catalog. As a per cent of retail sales, gross margin declined
slightly to 32.2 per cent from 32.3 per cent in last year's period. For the nine
months ended October 29, 1994, gross margin, as a per cent of retail sales, was
31.6 per cent, the same as the comparable 1993 period.
<PAGE>
-8-
Selling, general, and administrative ("SG&A") expenses, as a per cent of retail
sales, declined to 23.4 per cent in the 1994 third quarter from 24.2 per cent in
the 1993 comparable period. SG&A expense levels increased 5.2 per cent over
last year's third quarter due to planned increases in store and catalog
advertising and greater sales incentive compensation in stores. For the nine
months ended October 29, 1994, SG&A, as a per cent of retail sales, declined 60
basis points to 24.6 per cent.
Net interest expense and credit operations, which consists of finance charge
revenue from the Company's proprietary credit card, credit operating costs, and
net interest expense, was $48 million in the third quarter of 1994 compared with
$29 million in the comparable period last year. Finance charge revenue was $145
million, up $26 million over the same period last year due to higher customer
receivables. Credit operating costs were $120 million in the third quarter of
1994, $29 million higher than the comparable period last year. Bad debt
expense, which is included in credit costs, increased from $26 million to $53
million due to higher customer receivables. Net interest expense was $73
million, up $16 million compared with last year's third quarter, due to higher
borrowing levels to finance the investment in receivables and inventory, and the
Company's stock buyback program. For the nine months ended October 29, 1994,
net interest expense and costs from credit operations were $57 million compared
with $71 million in last year's period.
Total revenue from the Company's life and health insurance business was $147
million in the 1994 third quarter, an increase of $24 million or 20.8 per cent
over the comparable period in the prior year. Total pre-tax income was $32
million, compared with $29 million in the prior year's third quarter. Last
year's third quarter included realized gains of $3 million from the investment
portfolio. Excluding the effect of these gains, operating profit in the 1994
third quarter was up $6 million or 24.6 per cent, primarily due to higher
premium income. For the first nine months of 1994, total revenue increased 21.5
per cent to $423 million, and pretax income was $98 million compared with $90
million in the same period last year. Excluding the effect of realized gains in
both years, operating profit for the nine months of 1994 was $91 million, 16.3
per cent higher than the same period last year.
The effective income tax rate was 38.7 per cent in the 1994 third quarter,
compared with the 1993 effective tax rate from operations of 40.4 per cent.
Last year's rate included the retroactive impact of the Federal tax rate
increase enacted in August 1993. Total income taxes in the 1993 third quarter
also included a one-time charge of $14 million to adjust deferred taxes for the
rate increase.
The Company's business depends to a great extent on the last quarter of the
year. Historically, sales for that period have averaged approximately one third
of annual sales. Accordingly, the results of operations for the 39 weeks ended
October 29, 1994 are not necessarily indicative of the results for the entire
year.
<PAGE>
-9-
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS.
The Company has no material legal proceedings pending against it.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
--------
The following documents are filed as exhibits to this report:
11 Computation of net income per common share.
12(a) Computation of ratios of available income to combined fixed
charges and preferred stock dividend requirement.
12(b) Computation of ratios of available income to fixed charges.
27 Financial Data Schedule for the nine months ended October 29,
1994.
99 November 9, 1994 Company press release relating to certain
organizational changes.
(b) Reports on Form 8-K
-------------------
None.
<PAGE>
-10-
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
J. C. PENNEY COMPANY, INC.
By /s/D. A. McKay
------------------------------
D. A. McKay
Vice President and Controller
(Principal Accounting Officer)
Date: December 9, 1994
<PAGE>
Exhibit 11
J. C. PENNEY COMPANY, INC.
and Consolidated Subsidiaries
Computation of Net Income Per Common Share
-------------------------------------------
(Amounts in millions except per common share data)
<TABLE>
<CAPTION>
39 Weeks Ended
---------------------------------------------------
Oct. 29, 1994 Oct. 30, 1993
---------------------- ----------------------
Shares Income Shares Income
------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Primary:
- -------
Income before extraordinary charge and
cumulative effect of accounting change $ 629 $ 505
Dividend on Series B ESOP convertible
preferred stock (after-tax) (31) (31)
------ ------
Adjusted income before extraordinary
charge and cumulative effect of
accounting change 598 474
Weighted average number of shares
outstanding 234.8 235.6
Common stock equivalents:
Stock options and other dilutive effects 3.4 3.1
------ ------ ------ ------
238.2 598 238.7 474
Income per common share before
extraordinary charge and cumulative
effect of accounting change $2.51 $1.99
Extraordinary charge on debt redemption,
net of income taxes -- -- (0.22) (53)
Cumulative effect of accounting change -- -- 0.21 51
------ ------ ------ ------ ------ ------
238.2 238.7
====== ======
Net income $ 598 $ 472
====== ======
Net income per common share $2.51 $1.98
====== ======
Fully diluted:
- -------------
Income before extraordinary charge and
cumulative effect of accounting change $ 629 $ 505
Tax benefit differential on ESOP dividend
assuming stock is fully converted (2) (2)
Assumed additional contribution to ESOP
if preferred stock is fully converted (5) (7)
------ ------
Adjusted income before extraordinary
charge and cumulative effect of
accounting change 622 496
Weighted average number of shares
outstanding (primary) 238.2 238.7
Maximum dilution 0.0 0.8
Convertible preferred stock 21.4 22.0
------ ------ ------ ------
259.6 622 261.5 496
Income per common share before
extraordinary charge and cumulative
effect of accounting change $2.39 $1.90
Extraordinary charge on debt redemption,
net of income taxes -- -- (0.20) (53)
Cumulative effect of accounting change -- -- 0.19 51
------ ------ ------ ------ ------ ------
259.6 261.5
====== ======
Net income $ 622 $ 494
====== ======
Net income per common share $2.39 $1.89
====== ======
</TABLE>
<PAGE>
Exhibit 12(a)
J. C. Penney Company, Inc.
(the Company and all subsidiaries)
Computation of Ratios of Available Income to Combined Fixed Charges
and Preferred Stock Dividend Requirement
<TABLE>
<CAPTION>
52 weeks 53 weeks
ended ended
-------- --------
Oct. 29, Oct. 30,
1994 1993
-------- --------
($ Millions)
<S> <C> <C>
Income from continuing operations
(before income taxes,
before capitalized interest,
but after preferred stock dividend) $ 1,673 $ 1,402
-------- --------
Fixed charges
Interest (including capitalized
interest)
On operating leases 97 96
On short term debt 73 41
On long term debt 227 258
On capital leases 8 10
Other, net (1) 11
-------- --------
Total fixed charges 404 416
Preferred stock dividend, before taxes 51 52
-------- --------
Combined fixed charges and preferred stock
dividend requirement 455 468
-------- --------
Total available income $ 2,128 $ 1,870
======== ========
Ratio of available income to combined
fixed charges and preferred stock
dividend requirement 4.7 4.0
======== ========
</TABLE>
The interest cost of the LESOP notes guaranteed by the Company is not included
in fixed charges above.
The Company believes that, due to the seasonal nature of its business, ratios
for a period other than a 52 or 53 week period are inappropriate.
<PAGE>
Exhibit 12(b)
J. C. Penney Company, Inc.
(the Company and all subsidiaries)
Computation of Ratios of Available Income to Fixed Charges
<TABLE>
<CAPTION>
52 weeks 53 weeks
ended ended
-------- --------
Oct. 29, Oct. 30,
1994 1993
-------- --------
($ Millions)
<S> <C> <C>
Income from continuing operations
(before income taxes and
before capitalized interest) $ 1,724 $ 1,454
-------- --------
Fixed charges
Interest (including capitalized
interest)
On operating leases 97 96
On short term debt 73 41
On long term debt 227 258
On capital leases 8 10
Other, net (1) 11
-------- --------
Total fixed charges 404 416
-------- --------
Total available income $ 2,128 $ 1,870
======== ========
Ratio of available income to fixed charges 5.3 4.5
======== ========
</TABLE>
The interest cost of the LESOP notes guaranteed by the Company is not included
in fixed charges above.
The Company believes that, due to the seasonal nature of its business, ratios
for a period other than a 52 or 53 week period are inappropriate.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND RELATED CONSOLIDATED STATEMENT OF INCOME OF J. C.
PENNEY COMPANY, INC. AND SUBSIDIARIES AS OF OCTOBER 29, 1994, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-28-1995
<PERIOD-END> OCT-29-1994
<CASH> 314
<SECURITIES> 0
<RECEIVABLES> 4,690
<ALLOWANCES> (72)
<INVENTORY> 4,833
<CURRENT-ASSETS> 9,974
<PP&E> 5,935
<DEPRECIATION> (2,071)
<TOTAL-ASSETS> 16,578
<CURRENT-LIABILITIES> 4,973
<BONDS> 3,380
<COMMON> 1,042
0
634
<OTHER-SE> 3,819
<TOTAL-LIABILITY-AND-EQUITY> 16,578
<SALES> 13,741
<TOTAL-REVENUES> 14,259
<CGS> 9,403
<TOTAL-COSTS> 12,778
<OTHER-EXPENSES> 137
<LOSS-PROVISION> 126
<INTEREST-EXPENSE> 193
<INCOME-PRETAX> 1,025
<INCOME-TAX> 396
<INCOME-CONTINUING> 629
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 629
<EPS-PRIMARY> 2.51
<EPS-DILUTED> 2.39
</TABLE>
<PAGE>
EXHIBIT 99
FOR IMMEDIATE RELEASE
JCPENNEY ELECTS OESTERREICHER
AS VICE CHAIRMAN AND CEO;
AND TYGART, PRESIDENT AND COO
PLANO, TX, Nov. 9 -- The board of directors of J. C. Penney Company, Inc.
has elevated several key officers of the company and made other organizational
changes in order to ensure a smooth transition upon the retirement of W. R.
Howell, chairman of the board and chief executive officer, which is anticipated
within the next few years, the company announced today.
The board has elected James E. Oesterreicher as vice chairman of the board
and chief executive officer and W. Barger Tygart as president and chief
operating officer. The appointments are effective January 1, 1995.
Oesterreicher, now president of JCPenney stores and catalog, and Tygart,
senior executive vice president and director of merchandising and support
operations, have been elected to the board of directors, effective the same
date.
"The separation of the duties of the chairman and the chief executive
officer will enable the chairman to focus his energies on board and strategic
issues such as international expansion," Mr. Howell stated in announcing the
board action. "The changes also provide for continuity in the leadership which
has made our $20-billion company a consistent performance leader in the retail
sector and has positioned JCPenney as America's national department store," the
chairman said.
In other changes, Gale Duff-Bloom, executive vice president and director
of administration, has been elected senior executive vice-president, reporting
along with Mr. Tygart to Mr. Oesterreicher. John T. Cody, Jr., executive vice
president and director of JCPenney stores, has been elected president of
JCPenney stores. Thomas D. Hutchens, executive vice president and director of
merchandising, has been elected president of merchandising worldwide. Both
Messrs. Cody and Hutchens will report to Mr. Tygart.
<PAGE>
JCPENNEY CHANGES
Page 2
Commenting on the board's action, Mr. Howell said, "These changes are
indicative of the exceptional combined strength of our management team. They
will enable the company to move aggressively forward, while maintaining its
momentum of outstanding performance, which is shared by all associates,
shareholders, and suppliers alike."
Testifying to the company's success with consumers, Mr. Howell noted,
Women's Wear Daily last month reported that JCPenney is top-rated by shoppers
for women's apparel; MR ("Magazine of the Menswear Industry") named the company
retailer of the year; and Consumer Reports released a survey in which JCPenney
was the highest ranked national department store and drew more consumer comments
than any other store.
Company officers reporting to Mr. Oesterreicher, in addition to Mr. Tygart
and Ms. Duff-Bloom, will be Terry S. Prindiville, executive vice president and
director of support services; Charles R. Lotter, executive vice president,
secretary and general counsel; and Robert E. Northam, executive vice president
and chief financial officer.
Officers reporting to Mr. Tygart, along with Messrs. Cody and Hutchens,
will be William E. McCarthy, president of the catalog division, and four vice
presidents: Anton C. Haake, director of quality assurance; Randy S. Ronning,
director of special businesses; James C. Schwaninger, director of government
relations; and Michael Todres, director of distribution and non-resale
purchasing.
# # #
Contact: Hank Rusman or Duncan Muir
Public Relations Financial Public Relations
(214) 431-1316 (214) 431-1329
