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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
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FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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For the 13 week period Commission file Number 1-4947-1
ended April 30, 1994
J. C. PENNEY FUNDING CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 51-0101524
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6501 Legacy Drive, Plano, Texas 75024-3698
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 214-431-2011
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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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
500,000 shares of Common Stock of $100 par value, as of April 30, 1994.
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1) (a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
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The following interim financial information of J. C. Penney Funding Corporation
("Funding"), a wholly-owned subsidiary of J. C. Penney Company, Inc.
("JCPenney"), is unaudited but, in the opinion of Funding, includes all
adjustments, consisting only of normal recurring accruals, necessary for a fair
presentation.
Statements of Income and Reinvested Earnings
(Dollars in millions)
<TABLE>
<CAPTION>
13 weeks ended
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April 30, May 1,
1994 1993
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<S> <C> <C>
Interest earned from
JCPenney $ 24 $ 13
Interest and administrative
expenses 16 9
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Income before income taxes 8 4
Income taxes 3 1
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Net income 5 3
Reinvested earnings at
beginning of period 851 835
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Reinvested earnings at
end of period $856 $838
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</TABLE>
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Balance Sheets
(Dollars in millions)
<TABLE>
<CAPTION>
April 30, May 1, Jan. 29,
1994 1993 1994
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<S> <C> <C> <C>
ASSETS
Loans to JCPenney $2,757 $1,905 $2,323
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$2,757 $1,905 $2,323
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LIABILITIES AND EQUITY OF JCPENNEY
Short-term debt $1,709 $ 884 $1,284
Due to JCPenney 47 38 43
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Total liabilities 1,756 922 1,327
Equity of JCPenney:
Common stock (including contributed
capital), par value $100:
Authorized, 750,000 shares
Issued, 500,000 shares 145 145 145
Reinvested earnings 856 838 851
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Total equity of JCPenney 1,001 983 996
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$2,757 $1,905 $2,323
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</TABLE>
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Consolidated Statements of Cash Flows
(Dollars in millions)
<TABLE>
<CAPTION>
13 weeks ended
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April 30, May 1,
1994 1993
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<S> <C> <C>
Operating Activities
Net income $ 5 $ 3
(Increase) Decrease in loans to JCPenney (434) 7
Increase (Decrease) in amount due to JCPenney 4 (7)
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(425) 3
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Financing Activities
Increase (Decrease) in short-term debt 425 (3)
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Increase (Decrease) in cash 0 0
Cash at beginning of year 0 0
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Cash at end of first quarter $ 0 $ 0
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</TABLE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
Under the terms of the loan agreement which provides for unsecured loans to be
made by Funding to JCPenney and the receivables agreement pursuant to which
Funding may purchase an undivided interest in certain JCPenney customer
receivables, Funding derives earnings on loans to JCPenney and income from
charges to JCPenney. This income, when combined with other income of Funding,
is designed to cover Funding's fixed charges, principally interest expense, at a
coverage ratio mutually agreed upon by Funding and JCPenney. The earnings to
fixed charges coverage ratio has historically been at least one and one-half
times.
Since 1986, Funding has provided financing to JCPenney in accordance with the
loan agreement and no receivable balances have been purchased.
Funding is not and has not been involved in the administration of JCPenney's
retail credit operation and does not bear any expenses or receive any finance
charge revenue connected therewith.
Subsequent to the first quarter of 1994, Merrill Lynch Money Markets Inc. became
the third dealer to sell Funding's commercial paper.
For the first quarter of 1994, income, expenses, and provision for taxes
increased as compared with the first quarter of 1993, as a result of higher
average borrowing levels. Borrowing levels averaged $1,735 million during the
1994 first quarter as compared with $928 million during the comparable 1993
period. Borrowings increased significantly during the quarter in support of
JCPenney's working capital requirements. At the end of the first quarter of
1994, borrowing levels were $1,709 million as compared with $884 million at the
end of the 1993 first quarter.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
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None
(b) Reports on Form 8-K
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None
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SIGNATURES
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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 FUNDING CORPORATION
By: /S/ L. A. Gispanski
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L. A. Gispanski
Controller
(Principal Accounting Officer)
Date: June 10, 1994
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