Item 1 of Form 10-K.
In addition, information about J. C. Penney Funding Corporation, a wholly owned consolidated subsidiary of the Company, which appears in Item 1 of its separate Annual Report on Form 10-K for the fiscal year ended January 30, 1999, is incorporated herein by reference and filed hereto as Exhibit 99(a) in response to Item 1 of Form 10-K.
SUPPLIERS. The Company purchases its merchandise from approximately 4,150 --------- domestic and foreign suppliers, many of whom have done business with the Company for many years. In addition, Eckerd purchases merchandise and pharmaceuticals from approximately 3,100 suppliers, substantially all of which are domestic. The majority of Eckerd's suppliers have done business with Eckerd for many years. In addition to its Plano, Texas home office, the Company, through its international purchasing subsidiary, maintained buying offices in twelve foreign countries and quality assurance inspection offices in an additional six foreign countries as of January 30, 1999.
EMPLOYMENT. The Company and its consolidated subsidiaries employed ---------- approximately 262,000 persons as of January 30, 1999.
ENVIRONMENT. Environmental protection requirements did not have a material ----------- effect upon the Company's operations during fiscal 1998. While management believes it unlikely, it is possible that compliance with such requirements will lengthen lead time in expansion plans and increase construction, and therefore operating costs due in part to the expense and time required to conduct environmental and ecological studies.
2. PROPERTIES. ----------
At January 30, 1999, the Company operated 3,925 retail stores, comprised of 1,148 JCPenney department stores, 21 Renner department stores and 2,756 drugstores, in all 50 states, Puerto Rico, Brazil, Mexico, and Chile, of which 288 JCPenney department stores and 16 drugstores were owned. In addition, the Company owns six store locations that are leased to other tenants and not operated as units of the Company. The Company also operated six catalog fulfillment centers, of which four were owned, and owned one store
distribution center, three drugstore distribution centers, J. C. Penney Direct Marketing Services, Inc. and Eckerd corporate offices, and the Company's home office facility and approximately 240 acres of property in Plano, Texas, adjacent to the facility. Information relating to certain of the Company's facilities included under the caption "Five Year Operations Summary", which appears on page 41 of the Company's 1998 Annual Report to Stockholders, is incorporated herein by reference and filed hereto as Exhibit 13 in response to Item 2
Item 2 of Form 10-K.
3. LEGAL PROCEEDINGS. -----------------
The Company has no material legal proceedings pending against it.
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. ---------------------------------------------------
No matter was submitted to a vote of stockholders during the fourth quarter of fiscal 1998.
EXECUTIVE OFFICERS OF THE REGISTRANT. ------------------------------------
The following is a list, as of March 22, 1999, of the names and ages of the executive officers of the Company and of the offices and other positions held by each such person with the Company. The terms of all executive officers will expire on May 21, 1999. There is no family relationship between any of the named persons.
_____________
Mr. Oesterreicher was elected Chairman of the Board effective January 1997 and has served as Chief Executive Officer since 1995. He served as Vice Chairman of the Board from 1995 to 1997. From 1992 to 1995, he served as President of JCPenney Stores and Catalog.
Ms. Cumming was elected President of Merchandising for JCPenney Stores and Catalog, effective March 1, 1999. Prior to that, she served as President of the Women's Apparel Division from 1996 to 1999, and from 1993 to 1996, President of the Home and Leisure Division.
Mr. Davis, who was elected Executive Vice President, Chief Human Resources and Administration Officer, effective April 1, 1998, served as Senior Vice President, Director of Human Resources and Administration from 1997 to 1998. From 1996 to 1997, he served as Senior Vice President and Director of Personnel and Administration. He was elected President of the Northwestern Region in 1992 and served in that capacity until 1996.
Ms. Duff-Bloom was elected President of Marketing and Company Communications in February 1996. She was elected Senior Executive Vice President and served as Director of Personnel and Company Communications from January 1995 to February 1996. She was elected an Executive Vice President in 1993 and served as Director of Administration from 1993 to 1995.
Mr. Evans was elected Senior Vice President, Chief Information Officer, effective November 1, 1997. Prior to that, he served as Senior Vice President, Director of Information Systems and from 1995 to 1997 he served as Senior Vice President, Director of Planning and Information Systems. He was elected a Vice President in 1987 and served as Director of Information Systems from 1987 to 1995.
Mr. Fesperman was elected President and Chief Operating Officer, JCPenney Direct Marketing Services, Credit, and Facilities Services, effective December 1, 1997. Prior to that, he served as Senior Vice President, Director of Planning, Facilities, and International Development and from 1996 to 1997 he served as Senior Vice President and Director of Support Services and Subsidiary Operations. He was elected a Vice President in 1993 and served as Director of Insurance from 1991 to 1996.
Mr. Lotter was elected an Executive Vice President in 1993. He was elected Senior Vice President, General Counsel and Secretary in 1987. He has also served as a director of Eckerd Corporation since December 1996.
Mr. McKay was elected an Executive Vice President in 1997. He was elected Senior Vice President and Chief Financial Officer in 1996. From 1994 to 1996, he served as Vice President and Controller. He was elected Vice President and Treasurer in 1985 and served in that capacity until 1994. He has also served as a director of Eckerd Corporation since December 1996.
Mr. Newman was elected Chairman of the Board of Eckerd Corporation in May 1997. He has served as Chief Executive Officer of Eckerd Corporation since February 1996. He is also President and a director of Eckerd Corporation, positions he has held since July 1993. Prior to joining Eckerd, Mr. Newman served as President, Chief Executive Officer and a director of F&M Distributors, Inc. ("F&M"), a drugstore chain, since 1986. F&M filed bankruptcy under Chapter 11 of the United States Bankruptcy Code in December 1994. Prior to joining F&M, he was the Executive Vice President of Household Merchandising, Inc., a retail firm, from 1984 to 1986 and the Senior Vice President of Merchandising for F. W. Woolworth, a
retail firm, from 1980 to 1984.
Mr. Taxter was elected Senior Vice President, Director of JCPenney Stores, effective March 1, 1999. In 1998, he was elected Senior Vice President and served as Director of Strategic Development. In 1995, he was elected Regional President and served as President of the South and Southeastern Region from 1996 to 1998. Prior to that, he served as Director of Coordination between 1993 and 1996.
PART II -------
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. ---------------------------------------------------------------------
The Company's Common Stock is traded principally on the New York Stock Exchange, as well as on other exchanges in the United States. In addition, the Company has authorized 25 million shares of Preferred Stock, of which 792 thousand shares of Series B ESOP Convertible Preferred Stock were issued and outstanding at January 30, 1999. Additional information relating to the Common Stock and Preferred Stock of the Company included under the captions "Consolidated Statements of Stockholders' Equity" (page 23), "Capital Stock" (page 30), and "Quarterly Data (Unaudited)" (page 40), which appear in the Company's 1998 Annual Report to Stockholders on the pages indicated in the parenthetical references, is incorporated herein by reference and filed hereto as Exhibit 13 in response to Item 5