<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                                   FORM 10-K

               ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
 
For the 52 weeks ended January 30, 1999      Commission file number 1-4947-1
                       J. C. Penney Funding Corporation
                  -------------------------------------------
            (Exact name of registrant as specified in its charter)
 
              DELAWARE                                      51-0101524
     ---------------------------                            ----------
       (State of incorporation)                      (I.R.S. Employer ID No.)
 
6501 LEGACY DRIVE, PLANO, TEXAS                              75024-3698
-----------------------------------                          ----------
(Address of principal executive offices)                     (Zip Code)
 
Registrant's telephone number, including area code:        (972) 431-1000
--------------------------------------------------         --------------

Securities registered pursuant to Section 12(b) of the Act:      None
----------------------------------------------------------           

Securities registered pursuant to Section 12(g) of the Act:      None
----------------------------------------------------------           

     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 ___.
                                               ---        

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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.  [X]

     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 registrant's
classes of common stock, as of the latest practicable date: 500,000 shares of
Common Stock of $100 par value, as of March 31, 1999.

                      DOCUMENTS INCORPORATED BY REFERENCE
                      -----------------------------------

     Portions of Registrant's 1998 Annual Report ("1998 Annual Report") are
incorporated into Parts I, II, and IV. Portions of J. C. Penney Company, Inc.'s
1998 Annual Report to Stockholders ("JCPenney's 1998 Annual Report") are
incorporated into 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.
<PAGE>
 
                                    PART I
                                    ------

1.   BUSINESS.
     -------- 

     J. C. Penney Funding Corporation ("Funding"), which was incorporated in
Delaware in 1964, is a wholly-owned subsidiary of J. C. Penney Company, 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, the
purchase of customer receivable balances that arise from the retail credit sales
of JCPenney, or a combination of both. No receivables have been purchased by
Funding since 1985.

     JCPenney, a company founded by James Cash Penney in 1902 and incorporated
in 1924, is a major retailer operating approximately 1,150 JCPenney department
stores in all 50 states, Puerto Rico, Mexico, and Chile. In addition, in January
1999, JCPenney completed the acquisition of the majority interest in a Brazilian
department store chain that operates 21 stores under the Renner name. The major
portion of JCPenney's business consists of providing merchandise and services to
consumers through department stores that include catalog departments. JCPenney
stores market predominantly family apparel, jewelry, shoes, accessories, and
home furnishings. In addition, JCPenney, through its wholly-owned subsidiary,
Eckerd Corporation, operates a chain of approximately 2,900 drugstores located
throughout the northeast, southeast, and Sunbelt regions of the United States,
including JCPenney's March 1999 acquisition of the New York-based Genovese
drugstore chain. JCPenney also has several direct marketing subsidiaries, the
principal of which is J. C. Penney Life Insurance Company, which market life,
health, accident and credit insurance as well as a growing portfolio of
membership services to both domestic and international customers. JCPenney's
total revenues for the 52 weeks ended January 30, 1999 were $30.7 billion and
net income was $594 million. Pursuant to the terms of financing agreements
between Funding and JCPenney, payments from JCPenney to Funding are designed 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" and "Receivables Agreement", below.) The
earnings to fixed charges coverage ratio has historically been, and in fiscal
1998 was, at least 1.5 to 1.

     Operations of Funding.  To finance the operations of JCPenney as described
     ---------------------                                                     
under "Business" above, Funding 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. Funding has, from time to time, issued long-
term debt in public and private markets in the United States and abroad. Prior
to April 3, 1992, Funding issued commercial paper and master notes to investors
on a direct issue basis. Funding also has in place arrangements for short-term
bank borrowings. Short-term debt in fiscal 1998 averaged $1,938 million compared
to $2,247 million in fiscal 1997 and $2,041 million in fiscal 1996. Short-term
debt rates averaged 5.5 percent in fiscal 1998, compared to 5.6 percent in
fiscal 1997 and 5.5 percent in fiscal 1996. Interest expense decreased in fiscal
1998 compared to fiscal 1997 due to lower borrowing levels and lower short-term
interest rates. Interest expense increased in fiscal 1997 as compared to fiscal
1996 due to higher borrowing levels and higher short-term interest rates.

                                       2
<PAGE>
 
     Credit Operations of JCPenney. Virtually all types of merchandise and
     -----------------------------                                         
services sold by JCPenney in the United States, Puerto Rico, Mexico, and Chile
may be purchased on JCPenney's revolving credit card. In addition, JCPenney
accepts American Express, Diners Club (Mexico and Brazil only), Discover (United
States and Puerto Rico only), MasterCard, and Visa at JCPenney stores, catalog,
and drugstores throughout the 50 states, Puerto Rico, Mexico, Chile, and Brazil.
For additional information regarding the credit card operations of JCPenney, see
"Net Interest Expense and Credit Operations" (page 17), which appears in the
section of JCPenney's 1998 Annual Report entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations", and "Pre-tax cost of
JCPenney credit card", "Department Stores and Catalog", and "Key JCPenney credit
card information" (page 42), which appear in the section of JCPenney's 1998
Annual Report entitled "Supplemental Data (Unaudited)", on the pages indicated
in the parenthetical references, which are incorporated by reference herein.

     Funding has never incurred any losses from JCPenney's retail credit
operation since, pursuant to the Receivables Agreement, JCPenney itself
administers the customer receivables when sold to Funding, receives all finance
charge revenue on those customer receivables, and bears all related costs.

     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.

     Receivables Agreement.  Since December 1, 1985, JCPenney has not sold an
     ---------------------                                                   
undivided interest in any of its customer receivables to Funding.  The
Receivables Agreement between Funding and JCPenney, as amended ("Receivables
Agreement"), continues to be in full force and effect and while no purchases of
JCPenney 

                                       3
<PAGE>
 
customer receivables by Funding are presently contemplated, JCPenney may again
commence sales of its customer receivables to Funding.

     The Receivables Agreement sets forth the terms and provisions governing
sales of customer receivables (other than specified types of customer
receivables immaterial in amount) by JCPenney to Funding. At the end of each
monthly accounting period, JCPenney may sell to Funding an undivided interest in
its undefaulted customer receivables which are not sold or contracted to be sold
by JCPenney to anyone other than Funding. Settlements are made as of the end of
each such monthly accounting period with respect to collections, defaults, and
other adjustments to customers' accounts occurring during that month.

     The purchase price for the customer receivables acquired by Funding from
JCPenney is equal to the aggregate dollar amount of such customer receivables.
JCPenney pays to Funding at the end of each monthly accounting period a discount
in an amount agreed upon from time to time. In the event of a failure to agree
as to the amount of the discount, the amount to be paid is one-half of one
percent of the average daily closing balance of conveyed customer receivables
held by Funding during such monthly accounting period less the average daily
closing balance of the Contract Reserve Account during such period.

     In addition, at the time of purchase of customer receivables from JCPenney,
Funding withholds from the purchase price, and adds to the Contract Reserve
Account, the lesser of (i) five percent of the amount of customer receivables
then being purchased, or (ii) the amount, if any, by which the amount in the
Contract Reserve Account is less than five percent of the total amount of
customer receivables then owned by Funding. If the amount in the Contract
Reserve Account should exceed five percent of the total amount of customer
receivables owned by Funding at the end of any monthly accounting period, such
excess is to be paid to JCPenney in accordance with the Receivables Agreement.
If any portion of a customer receivable becomes more than 180 days past due or
if the customer is, in the judgment of JCPenney, unable to make further payment,
such customer receivable is considered to be in default for the purposes of the
Receivables Agreement and is charged against the Contract Reserve Account.
Collections with respect to any such defaulted customer receivable are credited
to the Contract Reserve Account. As described above, all bad debts written off
to date have been covered by the Contract Reserve Account.

     Funding acquires all of JCPenney's right, title, and interest in and to the
undivided portion of the customer receivables being conveyed to it. All sales of
customer receivables to Funding are without recourse to JCPenney. However, in
the event of returned, rejected, or repossessed merchandise to which any
previously conveyed undefaulted customer receivable relates, or in the event of
a breach of a warranty made by JCPenney in the Receivables Agreement to which
any previously conveyed undefaulted customer receivable relates, JCPenney is
obligated to pay to Funding the amount by which Funding has been damaged. Either
party has the right at any time to terminate the further sale or purchase, as
the case may be, of customer receivables under the Receivables Agreement. 

                                       4
<PAGE>
 
     Certain state laws provide for recording or other notice formalities in
connection with the assignment of accounts receivable. Funding does not deem it
appropriate to utilize such procedures in connection with customer receivables
purchased from JCPenney. In the event of the bankruptcy or receivership of
JCPenney, it is possible that creditors of JCPenney might be deemed to have
superior rights to some or all of the customer receivables previously purchased
by Funding.

     Committed Bank Credit Facilities. Committed bank credit facilities
     --------------------------------                                   
available to Funding and JCPenney as of January 30, 1999 amounted to $3.0
billion. These facilities, as amended and restated, support commercial paper
borrowing arrangements and include a $1.5 billion, 364-day revolver and a $1.5
billion, five-year revolver. The 364-day revolver includes a $750 million
seasonal credit line for the August to January period, thus allowing JCPenney to
match its seasonal borrowing requirements. (See page 2 of Funding's 1998 Annual
Report which is incorporated herein by reference.)

     Employment. Funding has had no employees since April  30, 1992.
     ----------                                                      

     General.  Legislation regulating consumer credit has been enacted in all
     -------                                                                 
states and federally.  Funding's operations have not been affected by such
legislation since Funding does not deal directly with consumers.

2.   PROPERTIES.
     ---------- 

     Funding owns no physical properties.

3.   LEGAL PROCEEDINGS.
     ----------------- 

     Funding has no material legal proceedings pending against it.


                                    PART II
                                    -------


5.   MARKET FOR 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.

                                       5
<PAGE>
 
8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
     ------------------------------------------- 

     The Balance Sheets of Funding as of January 30, 1999 and January 31, 1998,
and the related statements of income, reinvested earnings, and cash flows for
each of the years in the three-year period ended January 30, 1999, appearing on
pages 3 through 5 of Funding's 1998 Annual Report, together with the related
notes and the Independent Auditors' Report of KPMG LLP, independent certified
public accountants, appearing on page 6 of Funding's 1998 Annual Report, the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing on page 2 thereof, the section of Funding's 1998 Annual
Report entitled "Five Year Financial Summary" appearing on page 7 thereof, and
the unaudited quarterly financial highlights ("Quarterly Data") appearing on
page 8 thereof, are incorporated herein by reference in response to Item 8 of
Form 10-K.

     On April 15, 1999, Moody's Investors Service and Fitch IBCA lowered their
respective ratings of the Company's long-term debt from A2 to A3 and from A to
A-, and commercial paper from P1 to P2 and from F1 to F2.

9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
     ON ACCOUNTING AND FINANCIAL DISCLOSURE.
     --------------------------------------

     None.

                                    PART IV
                                    -------

14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
     REPORTS ON FORM 8-K.
     -------------------

     (a)(1) All Financial Statements.

            See Item 8 of this Form 10-K for financial statements incorporated
            by reference to Funding's 1998 Annual Report.

     (a)(2) Financial Statement Schedules.

            All schedules have been omitted as they are inapplicable or not
            required under the rules, or the information has been submitted in
            the financial statements or in the notes to the financial statements
            incorporated by reference to Funding's 1998 Annual Report.

     (a)(3) Exhibits.

            See separate Exhibit Index on pages G-1 through G-4.

     (b)    Reports on Form 8-K filed during the fourth quarter of fiscal 1998.

            None.

                                       6
<PAGE>
 
                                  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/ R. B. Cavanaugh
                                 -----------------------------
                                 R. B. Cavanaugh
                                 Chairman of the Board
Dated: April 23, 1999

                                       7
<PAGE>
 
    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/ R. B. Cavanaugh 
-------------------
R. B. Cavanaugh          Chairman of the Board         April 23, 1999
                         (principal executive
                         officer); Director
 
S. F. Walsh*
------------
S. F. Walsh              President                     April 23, 1999
                         (principal financial
                         officer); Director
 
W. J. Alcorn*
-------------
W. J. Alcorn             Controller (principal         April 23, 1999
                         accounting officer)
 
D. A. McKay*
------------
D. A. McKay              Director                      April 23, 1999
 


*By /s/ R. B. Cavanaugh
    -------------------
    R. B. Cavanaugh
    Attorney-in-fact

                                       8
<PAGE>
 
                                 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)  Amended and Restated 364-Day Revolving Credit Agreement dated as of
        December 3, 1996, among J. C. Penney Company, Inc., J. C. Penney Funding
        Corporation, the Lenders party thereto, Morgan Guaranty Trust Company of
        New York, as Agent for the Lenders, and Bank of America Illinois,
        Bankers Trust Company, The Chase Manhattan Bank,

                                      G-1
<PAGE>
 
                                 EXHIBIT INDEX

     Exhibit
     -------

        Citibank, N.A., Credit Suisse, and NationsBank of Texas, N.A., as Co-
        Agents for the Lenders (incorporated by reference to Exhibit 4(d) to
        Funding's Annual Report on Form 10-K for the 52 weeks ended January 25,
        1997*).

   (e)  Amended and Restated Five-Year Revolving Credit Agreement dated as of
        December 3, 1996, among J. C. Penney Company, Inc., J. C. Penney Funding
        Corporation, the Lenders party thereto, Morgan Guaranty Trust Company of
        New York, as Agent for the Lenders, and Bank of America Illinois,
        Bankers Trust Company, The Chase Manhattan Bank, Citibank, N.A., Credit
        Suisse, and NationsBank of Texas, N.A., as Co-Agents for the Lenders
        (incorporated by reference to Exhibit 4(e) to Funding's Annual Report on
        Form 10-K for the 52 weeks ended January 25, 1997*).

   (f)  Amendment and Restatement Agreement to 364-Day Revolving Credit
        Agreement, dated as of November 20, 1998, among J. C. Penney Company,
        Inc., J. C. Penney Funding Corporation, the Lenders party thereto,
        Morgan Guaranty Trust Company of New York, as Agent, Citibank, N.A.,
        Nationsbanc Montgomery Securities LLC and The Chase Manhattan Bank, as
        Co-Syndication Agents, and Credit Suisse First Boston and First Union
        National Bank, as Managing Agents.

   (g)  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
        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*).

   (h)  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*).

   (i)  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-2
<PAGE>
 
                                 EXHIBIT INDEX

     Exhibit
     -------

   (j)  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*).

   (k)  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*).

   (l)  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*).**

   (m)  Guaranty dated as of December 3, 1996, executed by J. C. Penney Company,
        Inc. with respect to the Amended and Restated 364-Day and Five Year
        Revolving Credit Agreements, each dated as of December 3, 1996
        (incorporated by reference to Exhibit 4(m) 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
    ------------------

        THE CORPORATION HAS NO COMPENSATORY PLANS OR ARRANGEMENTS REQUIRED TO BE
        FILED AS EXHIBITS TO THIS REPORT PURSUANT TO ITEM 14(C) OF THIS REPORT.

    (a) Amended and Restated Receivables Agreement dated as of January 29, 1980
        between J. C. Penney Company, Inc. and J. C. Penney Financial
        Corporation (incorporated by reference to Exhibit 10(a) to Funding's
        Annual Report on Form 10-K for the 52 weeks ended January 29, 1994*).

    (b) Amendment No. 1 to Amended and Restated Receivables Agreement dated as
        of January 25, 1983 between J. C. Penney Company, Inc. and J. C. Penney
        Financial Corporation (incorporated by reference to Exhibit 10(b) to
        Funding's Annual Report on Form 10-K for the 52 weeks ended January 29,
        1994*).

                                      G-3
<PAGE>
 
                                 EXHIBIT INDEX

     Exhibit
     -------

   (c)  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*).

   (d)  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*).

   (e)  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*).

   (f)  Line of Credit Agreement dated as of July 1, 1994, between J. C. Penney
        Funding Corporation and J. C. Penney Chile, Inc. (incorporated by
        reference to Exhibit 10(e) to Funding's Annual Report on Form 10-K for
        the 52 weeks ended January 28, 1995*).


13. Annual Report to Security Holders
    ---------------------------------

        Excerpt from Funding's 1998 Annual Report.

23. Independent Auditor's Consent
    -----------------------------

24. Power of Attorney
    -----------------

27. Financial Data Schedule
    -----------------------

        Financial Data Schedule for the 52 week period ended January 30, 1999.

99. Additional Exhibits
    -------------------

        Excerpt from JCPenney's 1998 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.

                                      G-4