<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 29, 2000       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 April 1, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of Registrant's 1999 Annual Report ("1999 Annual Report") are
incorporated into Parts I, II, and IV. Portions of J. C. Penney Company, Inc.'s
1999 Annual Report to Stockholders ("JCPenney's 1999 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.

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                                     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.

         JCPenney, a company founded by James Cash Penney in 1902 and
incorporated in 1924, is a major retailer operating approximately 1,140 JCPenney
department stores in all 50 states, Puerto Rico, and Mexico. In addition, the
Company operates 37 department stores in Brazil 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 2,600 drugstores located
throughout the Southeast, Sunbelt and Northeast regions of the United States.
JCPenney, through its wholly-owned subsidiary, J. C. Penney Direct Marketing
Services, Inc., also has several subsidiaries 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 29, 2000 were $32.510 billion and net income was
$336 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" below.) The earnings to fixed charges coverage ratio has
historically been, and in fiscal 1999 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. Funding also has in place arrangements for short-term bank borrowings.
Short-term debt in fiscal 1999 averaged $2,475 million compared to $1,938
million in fiscal 1998 and $2,247 million in fiscal 1997. Short-term debt rates
averaged 5.5 percent in fiscal 1999, compared to 5.5 percent in


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fiscal 1998 and 5.6 percent in fiscal 1997. Interest expense increased in
fiscal 1999 compared to fiscal 1998 due to higher average borrowing levels
with flat short-term interest rates. Interest expense decreased in fiscal
1998 compared to fiscal 1997 due to lower borrowing levels and lower
short-term interest rates.

         CREDIT OPERATIONS OF JCPENNEY. Virtually all types of merchandise and
services sold by JCPenney in the United States, Puerto Rico, and Mexico 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, and Brazil. On
December 6, 1999, JCPenney completed its sale to General Electric Capital
Corporation and certain of its affiliates of substantially all of the assets
relating to JCPenney's consumer and commercial private label credit card
business. For additional information regarding the credit card operations of
JCPenney, see "Net Interest Expense and Credit Operations" (page 20), which
appears in the section of JCPenney's 1999 Annual Report entitled "Management's
Discussion and Analysis of Financial Condition and Results of Operations".

         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


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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.

         COMMITTED BANK CREDIT FACILITIES. Committed bank credit facilities
available to Funding and JCPenney as of January 29, 2000 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. (See page 3 of Funding's 1999 Annual Report which
is incorporated herein by reference.)

         EMPLOYMENT. Funding has had no employees since April 30, 1992.

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.


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<PAGE>

8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The Balance Sheets of Funding as of January 29, 2000 and January 30,
1999, and the related statements of income, reinvested earnings, and cash flows
for each of the years in the three-year period ended January 29, 2000, appearing
on pages 4 through 6 of Funding's 1999 Annual Report, together with the related
notes and the Independent Auditors' Report of KPMG LLP, independent certified
public accountants, appearing on page 7 of Funding's 1999 Annual Report, the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing on page 3 thereof, the section of Funding's 1999 Annual
Report entitled "Five Year Financial Summary" appearing on page 8 thereof, and
the unaudited quarterly financial highlights ("Quarterly Data") appearing on
page 9 thereof, are incorporated herein by reference in response to Item 8 of
Form 10-K.

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 1999 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
                  1999 Annual Report.


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         (a)(3)   Exhibits.

                  See separate Exhibit Index on pages G-1 through G-5.

         (b)      Reports on Form 8-K filed during the fourth quarter of fiscal
                  1999.

                  None.




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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. Dastugue
                                          ---------------------------------
                                           M. P. Dastugue
                                           Chairman of the Board



Dated: April 25, 2000



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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.

<TABLE>
<CAPTION>

    SIGNATURES                 TITLE                         DATE
    ----------                 -----                         ----
<S>                      <C>                             <C>
/s/ M. P. Dastugue       Chairman of the Board           April 25, 2000
--------------------     (principal executive
M. P. Dastugue           officer); Director


M. D. Porter*            President                       April 25, 2000
--------------------     (principal financial
M. D. Porter             officer)


W. J. Alcorn*            Controller (principal           April 25, 2000
--------------------     accounting officer)
W. J. Alcorn


D. A. Mckay*             Director                        April 25, 2000
--------------------
D. A. McKay
</TABLE>


*By: /s/ M. P. Dastugue
    --------------------
     M. P. Dastugue
     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*).


                                     G-1
<PAGE>


       (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, 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 October 1, 1999, among J. C.
              Penney Company, Inc., J. C. Penney Funding Corporation, the
              Lenders party thereto, The Chase Manhattan Bank, as
              Administrative Agent, Salomon Smith Barney Inc., as
              Syndication Agent, and Bank of America, N.A. and Credit Suisse
              First Boston, as Co-Documentation Agents (incorporated by
              reference to Exhibit 4(a) to Funding's Quarterly Report on
              Form 10-Q for the 13 and 39 weeks ended October 30, 1999*).

       (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*).


                                     G-2
<PAGE>

                                  EXHIBIT INDEX

         EXHIBIT
         -------

       (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*).

       (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.


                                     G-3
<PAGE>


                                  EXHIBIT INDEX

         EXHIBIT

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)      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*).

         (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*).

13.      ANNUAL REPORT TO SECURITY HOLDERS

         Excerpt from Funding's 1999 Annual Report.

23.      INDEPENDENT AUDITORS' CONSENT

24.      POWER OF ATTORNEY

27.      FINANCIAL DATA SCHEDULE

         Financial Data Schedule for the 52 week period ended January 29, 2000.


                                     G-4
<PAGE>

99.      ADDITIONAL EXHIBITS

         Excerpt from JCPenney's 1999 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-5