JCPenney 2015 Annual Report Download - page 63

Table of Contents
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Our Company was founded by James Cash Penney in 1902 and has grown to be a major national retailer, operating 1,021 department stores in 49 states and
Puerto Rico, as well as through our Internet website at jcpenney.com. We sell family apparel and footwear, accessories, fine and fashion jewelry, beauty
products through Sephora inside JCPenney, and home furnishings. In addition, our department stores provide services, such as styling salon, optical, portrait
photography and custom decorating, to customers.
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The Consolidated Financial Statements present the results of J. C. Penney Company, Inc. and our subsidiaries (the Company or JCPenney). All significant
inter-company transactions and balances have been eliminated in consolidation.
We are a holding company whose principal operating subsidiary is J. C. Penney Corporation, Inc. (JCP). JCP was incorporated in Delaware in 1924, and J. C.
Penney Company, Inc. was incorporated in Delaware in 2002, when the holding company structure was implemented. The holding company has no direct
subsidiaries other than JCP, and has no independent assets or operations.
The Company is a co-obligor (or guarantor, as appropriate) regarding the payment of principal and interest on JCP’s outstanding debt securities. We
guarantee certain of JCP’s outstanding debt securities fully and unconditionally.
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Our fiscal year ends on the Saturday closest to January 31. Unless otherwise stated, references to years in this report relate to fiscal years rather than to
calendar years.
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2015 January 30, 2016 52
2014 January 31, 2015 52
2013 February 1, 2014 52
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The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America (GAAP), requires us to
make assumptions and use estimates that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions are subject to inherent
uncertainties, which may result in actual amounts differing from reported amounts.
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Certain reclassifications were made to prior period amounts to conform to the current period presentation. None of the reclassifications affected our
net income/(loss) in any period.
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Total net sales, which exclude sales taxes and are net of estimated returns, are generally recorded when payment is received and the customer takes possession
of the merchandise. Service revenue is recorded at the time the customer receives the benefit of the service, such as salon, portrait, optical or custom
decorating. Commissions earned on sales generated by licensed departments are included as a component of total net sales. Shipping and handling fees
charged to customers are also included in total net sales with corresponding costs recorded as cost of goods sold. We provide for estimated future returns
based primarily on historical return rates and sales levels.
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