<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 1-777
--------------------------
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
J. C. Penney Company, Inc.
Savings, Profit-Sharing and Stock Ownership Plan
12700 Park Central Place
Dallas, Texas 75251
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
J. C. Penney Company, Inc.
6501 Legacy Drive
Plano, Texas 75024-3698
<PAGE>
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Financial Statements and Schedules
December 31, 1994 and 1993
(With Independent Auditors' Report Thereon)
<PAGE>
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Table of Contents
-----------------
Independent Auditors' Report
Statements of Net Assets Available for Benefits
as of December 31, 1994 and 1993
Statements of Changes in Net Assets Available for
Benefits for the years ended December 31, 1994 and 1993
Notes to Financial Statements
Schedule
--------
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1994 1
Item 27d - Schedule of Reportable Transactions for the
year ended December 31, 1994 2
<PAGE>
[LETTERHEAD OF KPMG PEAT MARWICK LLP APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
----------------------------
The J. C. Penney Company, Inc.
Benefit Plans Investment Committee,
Benefits Administration Committee, and the
Benefit Plans Review Committee:
We have audited the accompanying statements of net assets available for benefits
of the J. C. Penney Company, Inc. Savings, Profit-Sharing and Stock Ownership
Plan (the Plan) as of December 31, 1994 and 1993, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the J. C. Penney
Company, Inc. Savings, Profit-Sharing and Stock Ownership Plan as of December
31, 1994 and 1993, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules, Item 27a -
Schedule of Assets Held for Investment Purposes and Item 27d - Schedule of
Reportable Transactions, are presented for purposes of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Dallas, Texas /s/ KPMG Peat Marwick LLP
May 12, 1995
<PAGE>
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Benefits
December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Assets:
Investments, at fair value:
J. C. Penney Company, Inc. common stock - 7,710,815
shares in 1994 and 6,182,647 shares in 1993
(cost $307,771,424 and $219,409,375, respectively) $ 344,095,119 325,361,798
J. C. Penney Company, Inc. preferred stock - 1,052,000
shares in 1994 and 1,082,112 shares in 1993 (cost
$631,200,518 and $649,267,042, respectively) 938,910,518 1,138,922,612
State Street Bank Index Fund - 911,189 units in 1994 and
786,756 units in 1993 (cost $53,791,078 and
$43,391,017, respectively) 64,294,380 54,754,297
State Street Bank Liquidity Fund (cost approximates
fair value) 14,251,415 15,519,787
Funds held under structured investment contracts:
U.S. agency backed collateralized mortgage obligations
(cost $128,730,326 in 1994 and $181,202,290 in 1993) 124,019,349 185,852,394
Government trust certificates (cost $10,545,346 in 1994
and 1993) 10,120,173 10,389,891
Wrap agreements (cost $1,231,596 in 1994 and
$1,449,420 in 1993) 7,007,263 (2,835,741)
Participants' loans (unpaid principal balance approximates
fair value) 48,514,156 31,426,436
Funds with insurance companies, at contract value 192,369,168 109,223,830
-------------- -------------
Total investments 1,743,581,541 1,868,615,304
-------------- -------------
Receivables:
Due from J. C. Penney Company, Inc. 169,427 600,034
Accrued interest and dividends 53,665 9,031
-------------- -------------
223,092 609,065
-------------- -------------
Cash 90,207 --
-------------- -------------
1,743,894,840 1,869,224,369
-------------- -------------
Liabilities:
Cash overdraft -- 1,334
Loan payable 343,698,043 413,752,773
Accrued interest payable 14,040,065 16,901,801
Due to broker for securities purchased 3,644,567 2,861,912
Accounts payable and other liabilities 744,611 924,871
-------------- -------------
Total liabilities 362,127,286 434,442,691
-------------- -------------
Net assets available for benefits $1,381,767,554 1,434,781,678
============== =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets
Available for Benefits
Years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in fair value $ (225,420,970) 383,304,270
of investments
Interest 24,999,116 22,418,814
Dividends 61,875,517 60,089,452
-------------- -------------
(138,546,337) 465,812,536
Less investment expenses (158,134) (108,768)
-------------- -------------
(138,704,471) 465,703,768
-------------- -------------
Contributions:
J. C. Penney Company, Inc. 51,481,567 50,136,087
Participants 157,251,978 149,384,249
-------------- -------------
208,733,545 199,520,336
-------------- -------------
Total additions 70,029,074 665,224,104
-------------- -------------
Deductions from net assets attributed to:
Benefit payments 93,362,640 80,885,198
Interest expense 29,539,639 35,150,796
Deferral fees 140,919 59,181
-------------- -------------
Total deductions 123,043,198 116,095,175
-------------- -------------
Change in net assets available for benefits (53,014,124) 549,128,929
Beginning net assets available for benefits 1,434,781,678 885,652,749
-------------- -------------
Ending net assets available for benefits $1,381,767,554 1,434,781,678
============== =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1994 and 1993
(1) Description of Plan
-------------------
The following brief description of the provisions of the J. C. Penney
Company, Inc. Savings, Profit-Sharing and Stock Ownership Plan (the "Plan")
is provided for general informational purposes only. Associates should
refer to the Plan's summary description for more complete information. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
(a) General
-------
The Plan is a defined contribution plan available to all eligible employees
("Associates") of J. C. Penney Company, Inc. (the "Company") and certain
subsidiaries. Associates who have completed at least 1,000 hours of service
within a period of 12 consecutive months and have attained age 21 are
eligible to participate in the Plan.
The financial statements include all of the funds which comprise the Plan.
All administrative expenses of the Plan not paid by the J. C. Penney
Company, Inc. Savings, Profit-Sharing and Stock Ownership Plan Trust (the
"Trust") are paid by the Company.
(b) Contributions
-------------
Associates that are classified as highly compensated (earning $20,000 or
more annually) are permitted to contribute from 1% to 10% of their earnings
(up to a maximum of $150,000) with a maximum of 8% in Tax-deferred Deposits
(subject to annual maximums of $9,240 in 1994 and $8,994 in 1993).
Nonhighly compensated Associates may contribute in 1% increments up to 16%
of earnings in either Taxed or Tax-deferred Deposits or a combination of
both.
The Company contributes to the Plan an amount which when combined with the
dividends earned on the J. C. Penney Company, Inc. Series B ESOP
Convertible Preferred Stock ("Preferred Stock") will be sufficient to
service the semiannual loan payments (see note 3). The Company's
contribution amounted to $51.5 million in 1994 and $50.1 million in 1993.
At the time of each loan payment, shares of Preferred Stock are allocated
to Associate's accounts. In accordance with the terms of the Plan, 116,667
shares of Preferred Stock were allocated to Associates in both 1994 and
1993, and will be allocated to Associates each year thereafter until 1998.
The year-end market value of the shares released during 1994 and 1993 was
$104.1 million and $122.8 million, respectively. A portion of the 116,667
shares will be used to satisfy dividends on previously allocated Preferred
Stock. The remaining shares will be allocated to each Associates' Penney
Preferred Stock Account in accordance with the ratio that each Associate's
deposits, not in excess of 6% of earnings ("matched deposits"), bear to all
such deposits by Associates for the
(Continued)
<PAGE>
2
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
applicable Plan year. The value of the 1994 allocation to Associates was
equal to 75% of matched deposits versus 93% in 1993.
If the total value of Preferred Stock released for allocation in any year
is less than 4-1/2% of available profits (as defined in the Plan document),
the Company is required to make an additional contribution in cash or
shares of J. C. Penney Company, Inc. common stock ("Common Stock") to the
Plan which will be deposited to the Penney Stock Company Account. The
additional Company contribution, if any, is allocated to Associates based
on their matched deposits in the same manner as described above.
(c) Associates' Accounts
--------------------
Associates' account balances are invested in the Plan's investment programs
in accordance with their elections. These investment programs include the
Penney Stock Account (consisting of investments in J. C. Penney, Inc.
common stock), the S & P 500 Account (consisting of investments in
commingled equity funds), and the Interest Income Account (consisting of
contracts with insurance companies and structured investment contracts,
which provide a specific interest rate for a specified period of time).
Each of these funds are maintained on a unit value basis and, accordingly,
the actual earnings and appreciation or depreciation in the underlying
securities are reflected in the daily unit value.
(d) Vesting
-------
Associates are immediately vested in their contributions and earnings
thereon. Vesting in the Company Accounts is graduated at 20% per full year
of service up to 100% after the earlier of 5 years of service, normal
retirement age, death, or total disability. Associates who separate from
service prior to full vesting of their rights forfeit the unvested balance
of their Company Accounts.
(e) Payment of Benefits
-------------------
Benefits remain in the Plan until the Associate elects payment. The normal
form of payment is a lump sum settlement (cash and/or shares of Common
Stock). In lieu of a lump sum settlement, terminating Associates may elect
to defer their balances (if at least $3,500) or, for those Associates who
have attained age 55 with 15 years of Plan service or are over age 65, may
elect an optional annuity for life or installment payments payable for a
specified period of time. Associates in deferred status may request
periodic withdrawals, fixed monthly payments of at least $100 or a complete
distribution. Minimum distributions will be made in the year the Associate
attains age 70-1/2 and each year thereafter to comply with federal law.
(f) Participants' Loan
------------------
Loans may be made available to Associates who have not separated from
service upon their request. All loans must be adequately secured and bear
interest at a reasonable rate. Loan amounts and the term of repayment are
limited in accordance with Plan provisions.
(Continued)
<PAGE>
3
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
(2) Investments
-----------
Investments in securities are stated at fair value using quoted market
prices. The fair value of the Preferred Stock, which is not publicly
traded, is determined to be the greater of its issue price of $600 per
share or the Common Stock price into which it can be converted. The Common
Stock is widely traded. Funds with insurance companies are recorded at
contract value as reported to the Plan by each insurance company. Each
contract is credited with earnings and charged for withdrawals. The Plan
also invests in structured investment contracts. Under these arrangements,
the Plan enters into a wrap agreement with a financial institution at a
stated yield on fixed income securities purchased by the Plan. The wrap
agreements are stated at fair value based on fluctuations in the fair value
of the underlying fixed income securities. The average cost method is used
to calculate gains and losses on the sale of investments on a trade date
basis. Except for certain funds with insurance companies, the Plan's
investments are held by the trustee, State Street Bank and Trust Company.
The Preferred Stock is convertible into Common Stock at a ratio of 1:20.
Each 1/20 of a share of Preferred Stock has a minimum value of $30. The
Company has the option of settling a participant's Penney Preferred Stock
Account in cash or whole shares of the Common Stock derived from the
conversion of the Preferred Stock to Common Stock, or any combination
thereof, if the market price of Common Stock at the time of distribution is
equal to or less than the conversion value of $600 per share of the
Preferred Stock. However, if the participant requests settlement of such
account in shares, the participant will receive shares of the Common Stock
derived from the conversion of the Preferred Stock to Common Stock. A
participant's Penney Preferred Stock Account will be settled with the
Common Stock derived from the conversion of the Preferred Stock to Common
Stock if the market price of Common Stock exceeds the conversion value of
$600 per share of the Preferred Stock. The annual dividend on the Preferred
Stock is 7.9%, payable semiannually on January 1 and July 1.
The following table presents the fair values of investments. Investments
that represent 5% or more of the Plan's net assets are separately
identified:
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
----------------- -----------------
Investments Shares Fair value Shares Fair value
----------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Investments, at fair value:
J. C. Penney Company, Inc.
common stock 7,710,815 $ 344,095,119 6,182,647 $ 325,361,798
J. C. Penney Company, Inc.
preferred stock 1,052,000 938,910,518 1,082,112 1,138,922,612
Other 460,575,904 404,330,894
-------------- --------------
$1,743,581,541 $1,868,615,304
============== ==============
</TABLE>
(Continued)
<PAGE>
4
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
The number of units and net asset value per unit at December 31, 1994 and
1993 follows:
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
----------------- -----------------
Net asset Net asset
Units value Units value
----- ----- ----- -----
<S> <C> <C> <C> <C>
Penney Common Stock Account 163,696,987 $2.113702 135,838,744 $2.417959
Penney Preferred Stock Account 234,789,948 2.216479 209,348,497 2.498093
S & P 500 Account 32,542,528 1.969445 28,333,109 1.943240
Interest Income Account* 212,886,742 1.605329 208,987,834 1.504741
</TABLE>
* Units are not assigned to Associates' loans receivable.
The net asset value for the Penney Preferred Stock Account is based on the
value of the Penney Preferred Stock allocated to Associates, excluding
forfeitures, as of December 31, 1994 and 1993.
(3) Loan Payable
------------
The Plan borrowed $700 million in August 1988, through a term loan
agreement obtained by private placement with several financial
institutions. The loan is guaranteed by the Company and the proceeds were
used to purchase the Preferred Stock issued by the Company. The loan
agreement specifies semiannual principal and interest payments of $51.2
million on January 1 and July 1, with the final installment due in 1998.
The loan bears interest at 8.17%.
(4) Plan Termination
----------------
While the Company presently has no intention to do so, it reserves the
right to terminate the Plan and the related Trust at any time subject to
the provisions of ERISA. In the event of Plan termination, Associates will
become fully vested in amounts allocated to their Company accounts.
(5) Tax Status
----------
The Plan obtained its determination letter on August 23, 1993 in which the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable qualification requirements of the Internal
Revenue Code ("Code"). The Plan has been amended subsequent to receiving
the determination letter; however, the Plan administrator believes that the
Plan is currently designed and being operated in compliance with the
applicable requirements of the Code. Therefore, the Plan administrator
believes that the Plan was qualified and the related trust was tax-exempt
as of the date of the financial statements.
(Continued)
<PAGE>
5
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6) Allocation of Plan Assets and Liabilities to Investment Programs
----------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1994
-------------------------------------------------------------------------------
Penney Penney Preferred
Common Stock Account Interest
Stock ------------- S & P 500 Income
Total Account Unallocated Allocated Account Account
----- ------- ----------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
J. C. Penney Company, Inc.
common stock - 7,710,815
shares (cost $307,771,424) $ 344,095,119 344,095,119 -- -- -- --
J. C. Penney Company, Inc.
preferred stock - 1,052,000
shares (cost $631,200,518) 938,910,518 -- 416,500,298 522,410,220 -- --
State Street Bank Index Fund -
911,189 units (cost
$53,791,078) 64,294,380 -- -- -- 64,294,380 --
State Street Bank Liquidity
Fund (cost approximates fair 14,251,415 4,838,649 -- 92,704 -- 9,320,062
value)
Funds held under structured
investment contracts:
U.S. agency backed
collateralized mortgage
obligations (cost
$128,730,326) 124,019,349 -- -- -- -- 124,019,349
Government trust certificates
(cost $10,545,346) 10,120,173 -- -- -- -- 10,120,173
Wrap agreements (cost
$1,231,596) 7,007,263 -- -- -- -- 7,007,263
Participants' loans (unpaid
principal balance
approximates fair value) 48,514,156 -- -- -- -- 48,514,156
Funds with insurance
companies, at contract value 192,369,168 -- -- -- -- 192,369,168
-------------- ----------- ------------- ----------- ---------- -----------
Total investments 1,743,581,541 348,933,768 416,500,298 522,502,924 64,294,380 391,350,171
-------------- ----------- ------------- ----------- ---------- -----------
Receivables:
Due from J. C. Penney
Company, Inc. 169,427 657,987 -- 268,727 (57,135) (700,152)
Accrued interest and dividends 53,665 18,143 -- 4,770 -- 30,752
-------------- ----------- ------------- ----------- ---------- -----------
223,092 676,130 -- 273,497 (57,135) (669,400)
-------------- ----------- ------------- ----------- ---------- -----------
Cash 90,207 (98,736) -- 196,491 (7,548) --
-------------- ----------- ------------- ----------- ---------- -----------
Total assets 1,743,894,840 349,511,162 416,500,298 522,972,912 64,229,697 390,680,771
-------------- ----------- ------------- ----------- ---------- -----------
</TABLE>
(Continued)
<PAGE>
6
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6) Allocation of Plan Assets and Liabilities to Investment Programs,
-----------------------------------------------------------------
Continued
- ---------
<TABLE>
<CAPTION>
December 31, 1994
-------------------------------------------------------------------------------
Penney Penney Preferred
Common Stock Account Interest
Stock ------------- S & P 500 Income
Total Account Unallocated Allocated Account Account
----- ------- ----------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Liabilities:
Loan payable $ 343,698,043 -- 343,698,043 -- -- --
Accrued interest payable 14,040,065 -- 14,040,065 -- -- --
Due to broker 3,644,567 3,644,567 -- -- -- --
Accounts payable and other
liabilities 744,611 96,235 -- 160,134 42,215 446,027
Inter-fund balances -- (243,718) -- 24,516 28,218 190,984
-------------- ----------- ----------- ----------- ---------- -----------
Total liabilities 362,127,286 3,497,084 357,738,108 184,650 70,433 637,011
-------------- ----------- ----------- ----------- ---------- -----------
Net assets available for benefits $1,381,767,554 346,014,078 58,762,190 522,788,262 64,159,264 390,043,760
============== =========== =========== =========== ========== ===========
</TABLE>
(Continued)
<PAGE>
7
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6) Allocation of Plan Assets and Liabilities to Investment Programs,
-----------------------------------------------------------------
Continued:
- ---------
<TABLE>
<CAPTION>
December 31, 1993
---------------------------------------------------------------------------
Penney Penney Preferred
Common Stock Account Interest
Stock ------------- S & P 500 Income
Total Account Unallocated Allocated Account Account
----- ------- ----------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments, at fair value:
J. C. Penney Company, Inc.
common stock -
6,182,647 shares (cost
$219,409,375) $ 325,361,798 325,361,798 -- -- -- --
J. C. Penney Company, Inc.
preferred stock -
1,082,112 shares (cost
$649,267,042) 1,138,922,612 -- 613,958,398 524,964,214 -- --
State Street Bank Index Fund -
786,756 units
(cost $43,391,017) 54,754,297 -- -- -- 54,754,297 --
State Street Bank Liquidity Fund
(cost approximates
fair value) 15,519,787 5,046,421 -- 85,688 -- 10,387,678
Funds held under structured
investment contracts:
U.S. agency backed
collateralized mortgage
obligations (cost
$181,202,290) 185,852,394 -- -- -- -- 185,852,394
Government trust certificates
(cost $10,545,346) 10,389,891 -- -- -- -- 10,389,891
Wrap agreements (cost
$1,449,420) (2,835,741) -- -- -- -- (2,835,741)
Participants' loans (unpaid
principal balance approximates
fair value) 31,426,436 -- -- -- -- 31,426,436
Funds with insurance companies, at
contract value 109,223,830 -- -- -- -- 109,223,830
------------- ----------- ----------- ---------- ---------- -----------
Total investments 1,868,615,304 330,408,219 613,958,398 525,049,902 54,754,297 344,444,488
------------- ----------- ----------- ----------- ---------- -----------
Receivables:
Due from J. C. Penney Company,
Inc. 600,034 104,765 -- 402,276 16,091 76,902
Accrued interest and dividends 9,031 4,045 -- 4,494 -- 492
-------------- ----------- ------------- ----------- ---------- -----------
609,065 108,810 -- 406,770 16,091 77,394
-------------- ----------- ------------- ----------- ---------- -----------
Total assets 1,869,224,369 330,517,029 613,958,398 525,456,672 54,770,388 344,521,882
-------------- ----------- ------------- ----------- ---------- -----------
</TABLE>
(Continued)
<PAGE>
8
J.C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6) Allocation of Plan Assets and Liabilities to Investment Programs, Continued:
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1993
------------------------------------------------------------------------------------
Penney Penney Preferred
Common Stock Account Interest
Stock ------------- S & P 500 Income
Total Account Unallocated Allocated Account Account
----- ------- ----------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Liabilities:
Cash overdraft $ 1,334 3,300 -- (1,725) (241) --
Loan payable 413,752,773 -- 413,752,773 -- -- --
Accrued interest payable 16,901,801 -- 16,901,801 -- -- --
Due to broker 2,861,912 2,861,912 -- -- -- --
Accounts payable and other
liabilities 924,871 170,215 -- 196,904 68,775 488,977
Inter-fund balances -- 88,155 -- 130,597 (88,134) (130,618)
------------- ----------- ----------- ----------- ---------- -----------
Total liabilities 434,442,691 3,123,582 430,654,574 325,776 (19,600) 358,359
------------- ----------- ----------- ----------- ---------- -----------
Net assets available for benefits $1,434,781,678 327,393,447 183,303,824 525,130,896 54,789,988 344,163,523
============= =========== =========== =========== ========== ===========
</TABLE>
(Continued)
<PAGE>
9
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
(7) Allocation of Plan Income and Changes in Plan Equity to Investment Programs
---------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1994
-------------------------------------------------------------------------------
Penney Penney Preferred
Common Stock Account Interest
Stock ------------- S & P 500 Income
Total Account Unallocated Allocated Account Account
----- ------- ----------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation)
in fair value of investments $ (225,420,970) (57,894,045) (127,458,099) (40,918,231) 849,405 --
Interest 24,999,116 167,043 -- 18,449 7,485 24,806,139
Dividends 61,875,517 10,900,980 50,974,537 -- -- --
-------------- ----------- ------------ ----------- ---------- -----------
(138,546,337) (46,826,022) (76,483,562) (40,899,782) 856,890 24,806,139
Less investment expenses (158,134) -- -- -- -- (158,134)
------------- ----------- ------------ ----------- ---------- -----------
(138,704,471) (46,826,022) (76,483,562) (40,899,782) 856,890 24,648,005
------------- ----------- ------------ ----------- ---------- -----------
Contributions:
J. C. Penney Company, Inc. 51,481,567 -- 51,481,567 -- -- --
Participants 157,251,978 72,925,838 -- -- 18,503,950 65,822,190
------------- ----------- ------------ ----------- ---------- -----------
208,733,545 72,925,838 51,481,567 -- 18,503,950 65,822,190
------------- ----------- ------------ ----------- ---------- -----------
Total additions 70,029,074 26,099,816 (25,001,995) (40,899,782) 19,360,840 90,470,195
------------- ----------- ------------ ----------- ---------- -----------
Transfer of preferred stock at cost
(116,667 shares) -- -- 70,000,000 (70,000,000) -- --
Deductions from net assets attributed to:
Benefit payments 93,362,640 34,538,251 -- 28,572,801 6,803,557 23,448,031
Interest expense 29,539,639 -- 29,539,639 -- -- --
Deferral fees 140,919 17,848 -- 1,929 7,465 113,677
Participants' transfers -- (27,076,914) -- 2,868,122 3,180,542 21,028,250
------------- ----------- ------------ ----------- ---------- -----------
Total deductions 123,043,198 7,479,185 99,539,639 (38,557,148) 9,991,564 44,589,958
------------- ----------- ------------ ----------- ---------- -----------
Change in net assets available for benefits (53,014,124) 18,620,631 (124,541,634) (2,342,634) 9,369,276 45,880,237
Beginning net assets available for benefits 1,434,781,678 327,393,447 183,303,824 525,130,896 54,789,988 344,163,523
------------- ----------- ------------ ----------- ---------- -----------
Ending net assets available for benefits $ 1,381,767,554 346,014,078 58,762,190 522,788,262 64,159,264 390,043,760
============= =========== ============ =========== ========== ===========
</TABLE>
(Continued)
<PAGE>
10
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Notes to Financial Statements
(7) Allocation of Plan Income and Changes in Plan Equity to Investment Programs,
----------------------------------------------------------------------------
Continued
---------
<TABLE>
<CAPTION>
December 31, 1993
---------------------------------------------------------------------------------------
Penney Preferred
Stock Account
Common ------------- S & P 500 Income
Total Account Unallocated Allocated Account Account
----- ------- -------------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of
investments $ 383,304,270 77,339,508 139,706,254 161,766,384 4,492,124 --
Interest 22,418,814 113,124 -- 15,153 5,451 22,285,086
Dividends 60,089,452 7,769,435 52,320,017 -- -- --
-------------- ----------- ----------- ----------- ----------- -----------
465,812,536 85,222,067 192,026,271 161,781,537 4,497,575 22,285,086
Less investment expenses (108,768) -- -- -- -- (108,768)
-------------- ----------- ----------- ----------- ----------- -----------
465,703,768 85,222,067 192,026,271 161,781,537 4,497,575 22,176,318
-------------- ----------- ----------- ----------- ----------- -----------
Contributions:
J. C. Penney Company, Inc. 50,136,087 -- 50,136,087 -- -- --
Participants 149,384,249 60,206,320 -- -- 17,159,021 72,018,908
-------------- ----------- ----------- ----------- ----------- -----------
199,520,336 60,206,320 50,136,087 -- 17,159,021 72,018,908
-------------- ----------- ----------- ----------- ----------- -----------
Total additions 665,224,104 145,428,387 242,162,358 161,781,537 21,656,596 94,195,226
-------------- ----------- ----------- ----------- ----------- -----------
Transfer of preferred stock at cost
(116,667 shares) -- -- 70,000,000 (70,000,000) -- --
Deductions from net assets attributed to:
Benefit payments 80,885,198 26,200,584 -- 22,093,777 6,307,652 26,283,185
Interest expense 35,150,796 -- 35,150,796 -- -- --
Deferral fees 59,181 5,385 -- 536 1,496 51,764
Participants' transfers -- (25,353,040) (2,100) 3,986,509 1,714,234 19,654,397
-------------- ----------- ----------- ----------- ----------- -----------
Total deductions 116,095,175 852,929 105,148,696 (43,919,178) 8,023,382 45,989,346
-------------- ----------- ----------- ----------- ----------- -----------
Change in net assets available for benefits 549,128,929 144,575,458 137,013,662 205,700,715 13,633,214 48,205,880
Beginning net assets available for benefits 885,652,749 182,817,989 46,290,162 319,430,181 41,156,774 295,957,643
-------------- ----------- ----------- ----------- ----------- -----------
Ending net assets available for benefits $ 1,434,781,678 327,393,447 183,303,824 525,130,896 54,789,988 344,163,523
============== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
Schedule 1
----------
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND STOCK
OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1994
<TABLE>
<CAPTION>
Identity of issue Description of asset Cost Current value
- --------------------------- -------------------- ---- -------------
<S> <C> <C> <C>
J. C. Penney Company, Inc.* Common stock, 7,710,815 shares $ 307,771,424 344,095,119
----------- -----------
J. C. Penney Company, Inc.* Preferred stock, 1,052,000 shares 631,200,518 938,910,518
----------- -----------
State Street Bank* Index Fund, 911,189 units 53,791,078 64,294,380
----------- ----------
State Street Bank* Liquidity Fund, 14,251,415 units 14,251,415 14,251,415
----------- ----------
Union Bank of Switzerland FHLMC backed CMO 7.00% -
matures 7/15/04 35,682,829 33,206,250
Union Bank of Switzerland FHLMC backed CMO 5.20% -
matures 1/15/11 13,725,538 12,802,629
Union Bank of Switzerland FHLMC backed CMO 5.10% -
matures 11/15/01 5,065,039 4,721,850
Peoples Security Life Insurance FHLMC backed CMO 5.50% -
matures 3/15/15 24,900,333 24,163,620
Peoples Security Life Insurance FNMA backed CMO 7.00% -
matures 11/25/14 49,356,587 49,125,000
------------ -----------
Total U.S. agency
backed CMO's 128,730,326 124,019,349
------------ -----------
Bankers Trust (Delaware) Government trust certificate zero
coupon - matures 11/15/97 2,907,997 2,790,751
Bankers Trust (Delaware) Government trust certificate zero
coupon - matures 11/15/97 3,018,079 2,896,394
Bankers Trust (Delaware) Government trust certificate zero
coupon - matures 11/15/97 2,084,884 2,000,825
Bankers Trust (Delaware) Government trust certificate zero
coupon - matures 11/15/97 2,189,129 2,100,866
Bankers Trust (Delaware) Government trust certificate zero
coupon - matures 11/15/97 345,257 331,337
------------ -----------
Total government
trust certificates 10,545,346 10,120,173
------------ -----------
Bankers Trust (Delaware) Wrap agreement zero coupon -
matures 11/15/97 49,316 1,134,360
Union Bank of Switzerland Wrap agreement 7.00% - matures
7/15/04 579,600 2,505,149
Union Bank of Switzerland Wrap agreement 5.10% to 5.20% -
maturities ranging from
11/15/01 to 1/15/11 182,106 1,256,401
Peoples Security Life Insurance Wrap agreement 5.50% to 7.00% -
maturities ranging from
3/15/95 to 11/25/14 420,574 2,111,353
------------ -----------
Total wrap
agreements 1,231,596 7,007,263
------------- -----------
</TABLE>
(Continued)
<PAGE>
Schedule 1, Cont.
-----------------
2
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Item 27a - Schedule of Assets Held for Investment Purposes, Continued
as of December 31, 1994
<TABLE>
<CAPTION>
Identity of issue Description of asset Cost Current value
----------------- -------------------- ---- -------------
<S> <C> <C> <C>
Participants' loans* Interest rates ranging from 9.25%
to 12.5% $ -- 48,514,156
-------------- -------------
Allstate Life Insurance Company 8.75% - matures 12/30/96 20,743,797 20,743,797
Business Men's Assurance
Company 6.12% - matures 5/15/98 7,325,159 7,325,159
Canada Life 5.85% - matures 9/29/97 10,460,435 10,460,435
CNA Insurance Companies 6.92% - matures 9/28/98 10,474,715 10,474,715
Metropolitan Life Insurance 8.55% - matures 12/31/95
Company 10,649,357 10,649,357
New York Life Insurance 7.05% - matures 1/28/99
Company 10,477,673 10,477,673
New York Life Insurance 7.30% - matures 5/28/98
Company 6,795,093 6,795,093
New York Life Insurance 6.87% - matures 1/28/98
Company 5,203,355 5,203,355
New York Life Insurance 7.50% - matures 7/06/99
Company 5,179,490 5,179,490
New York Life Insurance 7.75% - matures 9/28/99
Company 7,623,711 7,623,711
New York Life Insurance 8.25% - matures 11/29/99
Company 3,229,481 3,229,481
Provident Life & Accident 4.58% - matures 3/27/97
Insurance Company 23,179,491 23,179,491
Prudential Asset Management 7.86% - matures 6/30/95
Company 12,787,978 12,787,978
Southland Life 5.75% - matures 1/21/99 19,017,247 19,017,247
Southland Life 7.00% - matures 5/28/99 18,425,703 18,425,703
Transamerica Occidental Life
Insurance Company 5.71% - matures 3/27/98 20,796,483 20,796,483
Total investment ------------- -------------
contracts with
insurance
companies 192,369,168 192,369,168
------------- -------------
Total investments $ 1,339,890,871 1,743,581,541
============= =============
</TABLE>
*Party in interest
See accompanying independent auditors' report.
<PAGE>
Schedule 2
----------
J. C. PENNEY COMPANY, INC.
SAVINGS, PROFIT-SHARING AND
STOCK OWNERSHIP PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1994
<TABLE>
<CAPTION>
Expenses Current
incurred in value of
Identity of Aggregate connection asset on Net
party Description number of Purchase Selling Lease with the Cost of transaction gain
involved of asset transactions price price rental transaction asset date (loss)
-------- ----------- ------------ -------- ------- ------ ----------- ----------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases:
Common stock -
J. C. Penney Common
Company, Inc. stock 397 $119,486,494 -- -- -- 119,486,494 119,486,494 --
</TABLE>
See accompanying independent auditors' report.
<PAGE>
[LETTERHEAD OF KPMG PEAT MARWICK LLP APPEARS HERE]
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The J. C. Penney Company, Inc.
Benefits Administration Committee,
Benefit Plans Investment Committee, and
Benefit Plans Review Committee:
We consent to incorporation by reference in the registration statements
(No. 33-56993 and No. 33-59666) on Form S-8 of J. C. Penney Company, Inc. of our
report dated May 12, 1995 relating to the statements of net assets available for
benefits of the J. C. Penney Company, Inc. Savings, Profit-Sharing and Stock
Ownership Plan as of December 31, 1994 and 1993, and the related statements of
changes in net assets available for benefits and related schedules for the years
then ended, which report appears in the December 31, 1994 annual report on Form
11-K of the J. C. Penney Company, Inc. Savings, Profit-Sharing and Stock Plan.
/s/ KPMG Peat Marwick LLP
Dallas, Texas
June 22, 1995
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
SAVINGS, PROFIT-SHARING AND STOCK OWNERSHIP PLAN
By: /s/ J. F. Hundley
-------------------------------------------
J. F. Hundley
Member of Benefits Administration Committee
Date: June 22, 1995
