##### Table of Contents



Form 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended January 29, 2005 or o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from _____________ to_____________ Commission File No. 1-04947 J. C. PENNEY FUNDING CORPORATION  Delaware
    
    51-0101524(State or other jurisdiction of
incorporation or Identification No.)
    
    (I.R.S. Employer
organization)
 6501 Legacy Drive, Plano, Texas 75024-3698
(Address of principal executive offices)
(Zip Code) (972) 431-1000
(Registrants telephone number, including area code)    Securities registered pursuant to Section 12(b) of the Act: None
(Title of class) Securities registered pursuant to section 12(g) of the Act: None
(Title of class) 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. þ o
 Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Act). o þ
 State the aggregate market value of the voting and non-voting common equity held by non-affiliates
of the registrant: None 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 dollars par value, as of April
1, 2005. DOCUMENTS INCORPORATED BY REFERENCE Documents from which portions
are incorporated by reference
    
    Parts of the Form 10-K
into which incorporatedJ. C. Penney Company, Inc.
2004 Annual Report to Stockholders
    
    Part I
 THE
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION
I(1) (a) AND (b) OF FORM 10-K
AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 2. PropertiesItem 3. Legal ProceedingsPART IIItem 5. Market for and Dividends on Registrants Common Equity and Related Stockholder MattersItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Quantitative and Qualitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements With Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresPART IVItem 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-KSIGNATURESEXHIBIT INDEXConsent of Independent Registered Public Accounting FirmCertification by Michael P. Dastugue - 302Certification by William J. Alcorn - 302Certification by Michael P. Dastugue - 906Certification by William J. Alcorn - 906Excerpt From JCPenney's 2004 Annual Report to Stockholders    Table of Contents  
 PART I 
 Item 1. Business. J. C. Penney Funding Corporation (Funding), which was incorporated in Delaware in 1964, is a
wholly owned subsidiary of J. C. Penney Corporation, Inc. (JCPenney), also incorporated in
Delaware. Fundings executive offices are located in JCPenneys offices in Plano, Texas. Its
business consists of financing a portion of JCPenneys operations through loans to JCPenney. JCPenney, a company founded by James Cash Penney in 1902 and incorporated in 1924, has grown
to be a major retailer operating 1,017 JCPenney department stores in 49 states and Puerto Rico. In
addition, JCPenney operates 62 Renner department stores in Brazil. In November 2003 JCPenney
closed the sale of its six Mexico department stores. On July 31, 2004, JCPenney and certain of its
subsidiaries closed the sale of its Eckerd drugstore operations. JCPenneys business consists of
providing merchandise and services to consumers through department stores, catalog and Internet.
JCPenney markets family apparel, jewelry, shoes, accessories and home furnishings. Pursuant to the terms of financing agreements between Funding and JCPenney, payments from
JCPenney to Funding are set to produce earnings sufficient to cover Fundings fixed charges,
principally interest on borrowings, at a coverage ratio mutually agreed upon between Funding and
JCPenney. (See Loan Agreement below.) The earnings to fixed charges coverage ratio has
historically been at least 1.5 to 1. Holding Company Establishment. Effective January 27, 2002, J. C. Penney Company, Inc.
changed its corporate structure to a holding company format. As part of this structure, J. C.
Penney Company, Inc. changed its name to J. C. Penney Corporation, Inc. (JCPenney) and became a
wholly owned subsidiary of a newly formed affiliated holding company (Holding Company). The new
Holding Company assumed the name J. C. Penney Company, Inc. The Holding Company has no direct
subsidiaries other than JCPenney. The Holding Company has no independent assets or operations.
All outstanding shares of common and preferred stock were automatically converted into the
identical number and type of shares in the new holding company. Stockholders ownership interests
in the business did not change as a result of the new structure. Shares of the Company remain
publicly traded under the same symbol (JCP) on the New York Stock Exchange. The Holding Company is
a co-obligor (or guarantor, as appropriate) regarding the payment of principal and interest on
JCPenneys outstanding debt securities. The guarantee by the Holding Company of certain of
JCPenneys outstanding debt securities is full and unconditional. Operations of Funding. To assist in financing the operations of JCPenney as described
under Business above, Funding from time to time sells its short-term notes (commercial paper) to
investors through dealer-placed programs. The short-term notes are guaranteed on a subordinated
basis by JCPenney. Historically, Funding has issued long-term debt in public and private markets
in the United States and abroad. Funding has not issued commercial paper since 2000. In 2001,
JCPenney sold the assets of J. C. Penney Direct Marketing Services, Inc. to an unrelated third
party. During the second quarter of 2004, JCPenney sold its Eckerd drugstore chain to two
unrelated third parties generating after tax cash proceeds of approximately $3.5 billion. The
result of these transactions coupled with JCPenneys other sources of liquidity eliminated any need
for Funding to issue commercial paper for short-term borrowing requirements. Therefore, Funding
has not produced any revenue or income. In addition, with Fundings current credit ratings, it is
assumed that Funding would have little or no current access to commercial paper borrowing. Funding
had no short-term debt outstanding as of January 29, 2005, or as of January 31, 2004. 2




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Loan Agreement. Funding and JCPenney are parties to a Loan Agreement, dated as of
January 28, 1986, as amended (Loan Agreement), which provides for unsecured loans to be made from
time to time by Funding to JCPenney for the general business purposes of JCPenney, subject to the
terms and conditions of the Loan Agreement. The loans may be either senior loans or subordinated
loans, at the election of JCPenney, provided that, without the consent of the Board of Directors of
Funding, the principal amount of loans outstanding at any time under the Loan Agreement may not
exceed specified limits. Currently such limits may not exceed $8 billion in the aggregate for all
loans and $1 billion in the aggregate for all subordinated loans. The terms of each loan under the
Loan Agreement shall be as agreed upon at the time of such loan by Funding and JCPenney, provided
that Funding may require upon demand that any loan be paid, and JCPenney may prepay without premium
any loan, in whole or in part at any time. Under the terms of the Loan Agreement, JCPenney and
Funding agree from time to time upon a mutually acceptable earnings coverage of Fundings interest
and other fixed charges. If at the end of each fiscal quarter during which a loan is outstanding,
the earnings coverage of Fundings interest and other fixed charges is less than the agreed upon
ratio, JCPenney will pay to Funding an additional amount sufficient to provide for such coverage to
be not less than the agreed upon ratio. In the event that JCPenney and Funding have not agreed
upon a mutually acceptable ratio for any fiscal quarter, the applicable quarterly payment with
respect to such period will include an amount equal to the excess, if any, of one and one-half
percent of the daily average of the aggregate principal amount outstanding on all loans during such
period, over the aggregate amount of interest accrued on all such loans during such period. Employment. Funding has had no employees since April 30, 1992. Forward-Looking Statements. This Annual Report on Form 10-K may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, which reflect Fundings current view of
future events and financial performance. The words except, plan, anticipate, believe, intent,
should, will and similar expressions identify forward-looking statements. Any such forward-looking
statements are subject to risks and uncertainties that may cause Fundings actual results to be
materially different from planned or expected results. Those risks and uncertainties include, but
are not limited to, competition, consumer demand, seasonality, economic conditions, including
gasoline prices, changes in management, retail industry
consolidations, acts of terrorism or war and government activity.
Please see pages 15-18 in JCPenneys 2004 Annual Report to Stockholders for a further discussion of
risks and uncertainties. While Funding believes that its assumptions are reasonable, it cautions
that it is impossible to predict the impact of such factors that could cause actual results to
differ materially from predicted results. Funding intends the forward-looking statements in this
Annual Report on Form 10-K to speak only at the time of its release and does not undertake to
update or revise these projections as more information becomes available. 
 Item 2. Properties. Funding owns no physical properties. 
 Item 3. Legal
Proceedings. Funding has no material legal proceedings pending against it, nor were any proceedings
terminated during the fourth quarter of the fiscal year covered by this report. 3




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PART II 
 Item 5. Market for
and Dividends on Registrants Common Equity and Related Stockholder Matters. JCPenney owns all of Fundings outstanding common stock. Fundings common stock is not
traded, and no dividends have been, or are currently intended to be, declared by Funding on its
common stock. 
 Item 6. Selected Financial Data. Five Year Financial Summary
    
    J. C. Penney Funding Corporation($ in millions) (Unaudited)
 2004
    
    
    2003
    
    
    2002
    
    
    2001
    
    
    2000At Year EndCapitalizationShort-term debtCommercial paper
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Credit line advance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total short term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity held by JCPenney
    
    
    1,238
    
    
    
    1,238
    
    
    
    1,238
    
    
    
    1,238
    
    
    
    1,238Total capitalization
    
    $
    1,238
    
    
    $
    1,238
    
    
    $
    1,238
    
    
    $
    1,238
    
    
    $
    1,238Committed
bank credit facilities(1)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,500
    
    
    $
    1,500For the YearIncome
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    20Expenses
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    13Net income
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5Fixed charges  times earned
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.52Peak short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    842Average debt
    
    $
    
    
    
    $
    
    

    
    $
    
    
    
    $
    
    
    
    $
    193Average interest rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.7
    %
    
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of
Operations. J. C. Penney Funding Corporation (Funding) is a wholly owned subsidiary of J. C. Penney
Corporation, Inc. (JCPenney). The business of Funding consists of financing a portion of
JCPenneys operations through loans to JCPenney. The loan agreement between Funding and 4




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JCPenney provides for unsecured loans to be made by Funding to JCPenney. Each loan is evidenced by
a revolving promissory note and is payable upon demand in whole or in part as may be required by
Funding. Copies of Fundings loan agreement with JCPenney are available upon request. No commercial paper has been issued or outstanding since 2000. The commercial paper program was
rated Not Prime by Moodys Investors Service, Inc.
and B by Fitch Ratings as of March 18, 2005.
Standard & Poors Rating Services does not rate the program. Funding had no short-term debt outstanding as of January 29, 2005, or as of January 31, 2004. At year-end 2004, the balance of the Loan to JCPenney was $1,238 million unchanged from the balance
at the end of the prior year. 
 Item 7A. Quantitative
and Qualitative Disclosures about Market Risk. Funding had no investments as of January 29, 2005, and January 31, 2004. If it had short-term
investments they would be in short-term financial instruments with original maturities of three
months or less. Such investments are subject to interest rate risk and may have a small decline in
value if interest rates increase. Since the financial instruments are of short duration, a change
of 100 basis points in interest rates would not have a material effect on Fundings financial
condition. As of January 29, 2005, Funding had no long-term debt. 
 Item 8. Financial Statements and Supplementary Data. The financial statements of Funding, including the notes to all such statements are included
in this report beginning on page F-1. 
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None. 
 Item 9A. Controls and Procedures. Based on their evaluation of Fundings disclosure controls and procedures (as defined in Rules
13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the Exchange Act)) as of the end of
the period covered by this Annual Report on Form 10-K, Fundings principal executive officer and
principal financial officer have concluded that Fundings disclosure controls and procedures are
effective for the purpose of ensuring that material information required to be in this Annual
Report on Form 10-K is made known to them by others on a timely basis. 5




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PART IV 
 Item 15. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.  (a)
    1. and 2. See financial statements on pages F-1 through F-5.  (a)
    3. Exhibits. See separate Exhibit Index on pages G-1 through G-3.  (b)
    Management contracts or compensatory plans or arrangements required to be filed
as exhibits to this report. None.  (c)
    Other Financial Statement Schedules. None. 6




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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(Registrant)By:
    
    /s/ M. P. DastugueM. P. DastugueChairman of the BoardDated: April 8, 2005
 7




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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated. Signatures
    
    Title
    
    Date/s/ M. P. Dastugue
    
    Chairman of the Board
    
    April 8, 2005(principal executiveM. P. Dastugue
    
    officer); Director/s/ M. D. Porter
    
    President
    
    April 8, 2005(principal financialM. D. Porter
    
    officer)/s/ W. J. Alcorn
    
    Vice President and
    
    April 8, 2005Controller (principalW. J. Alcorn
    
    accounting officer)
 8




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Statements of Income
    
    J. C. Penney Funding Corporation($ in millions)
 For the Year
    
    2004
    
    
    2003
    
    
    2002Interest income from JCPenney
    
    $
    
    
    
    $
    
    
    
    $
    Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income before income taxes
    
    
    
    
    
    
    
    
    
    
    Income taxes
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    
    
    
    $
    
    
    
    $
    
 Statements of Reinvested
Earnings
($ in millions) 2004
    
    
    2003
    
    
    2002Balance at beginning of year
    
    $

    1,093
    
    
    $
    1,093
    
    
    $
    1,093Net income
    
    
    
    
    
    
    
    
    
    
    Balance at end of year
    
    $
    1,093
    
    
    $
    1,093
    
    
    $
    1,093
 See notes to Financial Statements on pages F-4 and F-5. F-1




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Balance Sheets
    
    J. C. Penney Funding Corporation($ in millions except share data)
 2004
    
    
    2003AssetsLoans to JCPenney
    
    $
    1,238
    
    
    $
    1,238Liabilities and Equity held by JCPenneyLiabilities
    
    
    
    
    
    
    Equity held by JCPenneyCommon stock (including contributed
capital), par value $100 per share:Authorized, 750,000 shares -
issued and outstanding, 500,000 shares
    
    
    145
    
    
    
    145Reinvested earnings
    
    
    1,093
    
    
    
    1,093Total Equity held by JCPenney
    
    
    1,238
    
    
    
    1,238Total Liabilities and Equity held by JCPenney
    
    $
    1,238
    
    
    $
    1,238
 See notes to Financial Statements on pages F-4 and F-5. F-2




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Statements of Cash Flows
    
    J. C. Penney Funding Corporation($ in millions)
 2004
    
    
    2003
    
    
    2002Operating ActivitiesNet income
    
    $
    
    
    
    $
    
    
    
    $
    Decrease in loans to JCPenney
    
    
    
    
    
    
    
    
    
    
    Decrease in amount due to JCPenney
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Financing ActivitiesDecrease in short-term debt
    
    $
    
    
    
    $
    
    
    
    $
    Supplemental Cash Flow InformationInterest paid
    
    $
    
    
    
    $
    
    
    
    $
    Income taxes paid
    
    $
    
    
    
    $
    
    
    
    $
    
 See notes to Financial Statements on pages F-4 and F-5. F-3




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Report of Independent Registered Public Accounting Firm
    
    J. C. Penney Funding CorporationTo the Board of Directors ofJ. C. Penney Funding Corporation:
 We have audited the accompanying balance sheets of J. C. Penney Funding Corporation as of January
29, 2005 and January 31, 2004, and the related statements of income, reinvested earnings, and cash
flows for each of the years in the three-year period ended January 29, 2005. These financial
statements are the responsibility of the Corporations management. Our responsibility is to
express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). 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 financial position of J. C. Penney Funding Corporation as of January 29, 2005 and
January 31, 2004, and the results of its operations and its cash flows for each of the years in the
three-year period ended January 29, 2005, in conformity with U. S. generally accepted accounting
principles. (KPMG LLP LOGO)
Dallas, Texas
March 25, 2005 Notes to Financial Statements Nature of Operations J. C. Penney Funding Corporation (Funding) is a wholly owned subsidiary of J. C. Penney
Corporation, Inc. (JCPenney). The principal business of Funding consists of financing a portion
of JCPenneys operations through loans to JCPenney. To finance its operations, Funding issues
commercial paper, which is guaranteed by JCPenney on a subordinated basis, to corporate and
institutional investors in the domestic market. Historically, Funding has issued long-term debt in
public and private markets in the United States and abroad. Funding has not issued commercial
paper since 2000. In 2001, JCPenney sold the assets of J. C. Penney Direct Marketing Services,
Inc. to an unrelated third party. During the second quarter of 2004, JCPenney sold its Eckerd
drugstore chain to two unrelated third parties generating after tax cash proceeds of approximately
$3.5 billion. The result of these transactions coupled with JCPenneys other sources of liquidity
eliminated any need for Funding to issue commercial paper for short-term borrowing requirements.
Therefore, Funding has not produced any revenue or income. In addition, with Fundings current
credit ratings, it is assumed that Funding would have little or no current access to commercial
paper borrowing. Commercial Paper Placement Funding places commercial paper solely through dealers. No commercial paper has been issued or
outstanding since 2000. Summary Of Accounting Policies Income Taxes Fundings taxable income is included in the consolidated federal income tax return of JCPenney.
Income taxes in Fundings statements of income are computed as if Funding filed a separate federal
income tax return. Use of Estimates Fundings financial statements have been prepared in conformity with generally accepted accounting
principles. F-4




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Loans to JCPenney Funding and JCPenney are parties to a Loan Agreement which provides for unsecured loans, payable on
demand, to be made from time to time by Funding to JCPenney for the general business purposes of
JCPenney, subject to the terms and conditions of the Loan Agreement. Under the terms of the Loan
Agreement, Funding and JCPenney agree upon a mutually acceptable earnings coverage of Fundings
interest and other fixed charges. The earnings to fixed charges ratio has historically been at
least one and one-half times. Fair Value of Financial Instruments The fair value of loans to JCPenney at January 29, 2005, and January 31, 2004, approximates the
amount reflected on the balance sheets because the loan is payable on demand. F-5




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EXHIBIT INDEX Exhibit 3. (i) Articles of Incorporation  (a)
    Certificate of Incorporation of Funding, effective April 13, 1964 (incorporated
by reference to Exhibit 3(a) to Fundings Annual Report on Form 10-K for the 52 weeks
ended January 29, 1994*).(b)
    Certificate of Amendment of Certificate of Incorporation, effective January 1,
1969 (incorporated by reference to Exhibit 3(b) to Fundings Annual Report on Form
10-K for the 52 weeks ended January 29, 1994*).(c)
    Certificate of Amendment of Certificate of Incorporation, effective August 11,
1987 (incorporated by reference to Exhibit 3(c) to Fundings Annual Report on Form
10-K for the 52 weeks ended January 29, 1994*).(d)
    Certificate of Amendment of Certificate of Incorporation, effective April 10,
1988 (incorporated by reference to Exhibit 3(d) to Fundings Annual Report on Form
10-K for the 52 weeks ended January 29, 1994*). (ii) Bylaws  (a)
    Bylaws of Funding, as amended to May 19, 1995 (incorporated by reference to
Exhibit 3(ii) to Fundings Quarterly Report on Form 10-Q for the 13 and 39 weeks
ended October 26, 1996*). 4. Instruments defining the rights of security holders, including indentures  (a)
    Issuing and Paying Agency Agreement dated as of March 16, 1992, between J. C.
Penney Funding Corporation and Morgan Guaranty Trust Company of New York
(incorporated by reference to Exhibit 4(a) to Fundings Current Report on Form 8-K,
Date of Report  April 3, 1992*).(b)
    Issuing and Paying Agency Agreement dated as of February 3, 1997, between J.
C. Penney Funding Corporation and The Chase Manhattan Bank (incorporated by
reference to Exhibit 4(b) to Fundings Annual Report on Form 10-K for the 52 weeks
ended January 25, 1997*).(c)
    Guaranty dated as of February 17, 1997, executed by J. C. Penney Company,
Inc.(incorporated by reference to Exhibit 4(c) to Fundings Annual Report on Form
10-K for the 52 weeks ended January 25, 1997*).(d)
    Amendment and Restatement Agreement to Five-Year Revolving Credit Agreement,
dated as of November 21, 1997, among J. C. Penney Company, Inc., J. C. Penney Funding Corporation,
the Lenders party thereto, Morgan Guaranty Trust Company of New York, as Agent, and Bank of America
National Trust and Savings Association, Bankers Trust Company, The Chase




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EXHIBIT INDEX Exhibit Manhattan Bank, Citibank, N.A., Credit Suisse First Boston, and NationsBank of
Texas, N.A., as Managing Agents (incorporated by reference to Exhibit 4(g) to
Fundings Annual Report on Form 10-K for the 53 weeks ended January 31, 1998*).  (e)
    Commercial Paper Dealer Agreement dated March 16, 1992 between J. C. Penney
Funding Corporation and J.P. Morgan Securities Inc. (incorporated by reference to
Exhibit 10(a) to Fundings Current Report on Form 8-K, Date of Report  April 3,
1992*).(f)
    Commercial Paper Dealer Agreement dated March 16, 1992 between J. C. Penney
Funding Corporation and The First Boston Corporation (incorporated by reference to
Exhibit 10(b) to Fundings Current Report on Form 8-K, Date of Report  April 3,
1992*).(g)
    Commercial Paper Dealer Agreement dated May 3, 1994 between J. C. Penney
Funding Corporation and Merrill Lynch Money Markets Inc. (incorporated by reference
to Exhibit 4(g) to Fundings Annual Report on Form 10-K for the 52 weeks ended
January 28, 1995*).(h)
    Commercial Paper Dealer Agreement dated January 25, 1995 between J. C.
Penney Funding Corporation and Morgan Stanley & Co. Incorporated (incorporated by
reference to Exhibit 4(h) to Fundings Annual Report on Form 10-K for the 52 weeks
ended January 28, 1995*).(i)
    Commercial Paper Dealer Agreement dated February 7, 1997 between J. C.
Penney Funding Corporation and Credit Suisse First Boston Corporation (incorporated
by reference to Exhibit 4(l) to Fundings Annual Report on Form 10-K for the 52
weeks ended January 25, 1997*).** Instruments evidencing long-term debt, previously issued but now fully prepaid, have not
been filed as exhibits hereto because none of the debt authorized under any such
instrument exceeded 10 percent of the total assets of the Registrant. The Registrant
agrees to furnish a copy of any of its long-term debt instruments to the Securities and
Exchange Commission upon request. 10. Material Contracts Funding has no compensatory plans or arrangements required to be filed as exhibits to
this Report pursuant toItem 14(c)of this Report.  (a)
    Loan Agreement dated as of January 28, 1986 between J. C. Penney Company, Inc.
and J. C. Penney Financial Corporation (incorporated by reference to Exhibit 1 to
Fundings Current Report on Form 8-K, Date of Report  January 28, 1986*).(b)
    Amendment No. 1 to Loan Agreement dated as of January 28, 1986 between J. C.
Penney Company, Inc. and J. C. Penney Financial Corporation (incorporated by
reference to Exhibit 1 to Fundings Current Report on Form 8-K, Date of Report -
December 31, 1986*).




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EXHIBIT INDEX Exhibit  (c)
    Amendment No. 2 to Loan Agreement dated as of January 28, 1986 between J. C.
Penney Company, Inc. and J. C. Penney Funding Corporation (incorporated by reference
to Exhibit 10(e) to Fundings Annual Report on Form 10-K for the 52 weeks ended
January 25, 1997*).  23.
    Consent of Independent Registered Public Accounting Firm  31.1
    Certification by Michael P. Dastugue pursuant to 15 U. S. C. 78m (a) or 78o (d),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  31.2
    Certification by William J. Alcorn pursuant to 15 U. S. C. 78m (a) or 78o (d),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  32.1
    Certification by Michael P. Dastugue pursuant to 18 U. S. C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2
    Certification by William J. Alcorn pursuant to 18 U. S. C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  99.
    Additional Exhibits Excerpt from JCPenneys 2004 Annual Report to Stockholders.  *
    SEC file number 1-4947-1  **
    Funding has entered into identical Commercial Paper Dealer Agreements dated February 7,
1997, with each of Merrill Lynch Money Markets Inc., J.P. Morgan Securities Inc., and
Morgan Stanley & Co. Incorporated, which agreements are omitted pursuant to Instruction 2
to Item 601 of Regulation S-K. Funding agrees to furnish a copy of any of such
agreements to the Securities and Exchange Commission upon request.