SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C.
                                      20549

                                   -----------

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                                   ----------

For the 13 week period                           Commission File Number 1-4947-1
ended April 27, 2002

                        J. C. PENNEY FUNDING CORPORATION
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             (Exact name of registrant as specified in its charter)


          Delaware                                      51-0101524
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    (State or other jurisdiction of               (I.R.S. Employer
     incorporation or organization)               Identification No.)


6501 Legacy Drive, Plano, Texas                        75024-3698
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(Address of principal executive offices)                (Zip Code)


Registrant's telephone number, including area code    972-431-1000
                                                     ------------------



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 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 par value, as of April 27, 2002.

THE REGISTRANT  MEETS THE CONDITIONS SET FORTH IN GENERAL  INSTRUCTION  H(1) (a)
AND (b) OF FORM  10-Q  AND IS  THEREFORE  FILING  THIS  FORM  WITH  THE  REDUCED
DISCLOSURE FORMAT.


<PAGE>


PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements


The following interim financial  information of J. C. Penney Funding Corporation
("Funding"),  a  wholly  owned  subsidiary  of J. C.  Penney  Corporation,  Inc.
("JCPenney"),  is unaudited; however, in the opinion of Funding, it includes all
adjustments,  consisting only of normal recurring accruals, necessary for a fair
presentation.  The financial  information should be read in conjunction with the
audited  financial  statements  included in Funding's Annual Report on Form 10-K
for the 52 weeks ended January 26, 2002.


Statements of Income and Reinvested Earnings
(Dollars in millions)
<table>
<caption>

                                                                            13 weeks ended
                                                                       ------------------------
                                                                        <c>                        <c>
                                                                       April 27,                April 28,
                                                                         2002                     2001
                                                                       ---------                 ---------


Interest earned from
     JCPenney and affiliates                                             $  0                     $ 0



Interest expense                                                            0                       0
                                                                          ---                     ---

Income before income taxes                                                  0                       0

Income taxes                                                                0                       0
                                                                          ---                     ---

Net income                                                                  0                       0

Reinvested earnings at
   beginning of period                                                  1,093                   1,093
                                                                        -----                  ------

Reinvested earnings at
      end of period                                                     1,093                   1,093
                                                                        =====                  ======

</table>
                                       1
<PAGE>


<table>
<caption>
Balance Sheets
(Dollars in millions)

                                                                     <c>                <c>                  <c>

                                                                  April 27,           April 28,           Jan. 26,
                                                                    2002                2001                2002
                                                                  ---------           ---------           ------
ASSETS

Loans to JCPenney and affiliates                                  $1,238              $1,238              $1,238
                                                                  ------              ------              ------

                                                                  $1,238              $1,238              $1,238
                                                                  ======              ======              ======

LIABILITIES AND EQUITY OF JCPENNEY

Short-term debt                                                   $    0              $    0              $    0

Due to JCPenney                                                        0                   0                   0

Total liabilities                                                      0                   0                   0

Equity of JCPenney:
   Common stock (including
   contributed capital), par value
   $100:
   Authorized, 750,000 shares
   Issued, 500,000 shares

                                                                     145                 145                 145

Reinvested earnings                                                1,093               1,093               1,093
                                                                  ------              ------              ------

Total equity of JCPenney                                           1,238               1,238               1,238
                                                                  ------              ------              ------

                                                                  $1,238              $1,238              $1,238
                                                                  ======              ======              ======
</table>
                                       2
<page>
<table>
<caption>

Consolidated Statements of Cash Flows
(Dollars in millions)

                                                                             13 weeks ended
                                                                             ---------------
                                                                        <c>                                  <c>
                                                                      April 27,                          April 28,
                                                                       2002                               2001
                                                                     ---------                          ------
Operating Activities

Net income                                                          $     0                             $     0


Decrease in loans to JCPenney                                             0                                   2

Decrease in amount due to
   JCPenney
                                                                          0                                  (2)
                                                                       ----                               ------

                                                                          0                                   0
                                                                       -----                              -----

Financing Activities

Decrease in short-term debt                                               0                                   0
                                                                       ----                               -----

Increase in cash                                                          0                                   0

Cash at beginning of year                                                 0                                   0
                                                                       -----                              -----
Cash at end of first quarter                                         $    0                              $    0
                                                                     =======                             ======


</table>
                                       3

<PAGE>



ITEM 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

Funding  derives  earnings  on loans to  JCPenney  under  the  terms of the Loan
Agreement  which provides for unsecured loans to be made by Funding to JCPenney.
Additionally,  in order to maintain Funding's income at defined coverage ratios,
Funding's  income is supplemented by charges to JCPenney.  The income of Funding
is designed to cover  Funding's fixed charges  (interest  expense) at a coverage
ratio  mutually  agreed  upon by Funding  and  JCPenney.  The  earnings to fixed
charges coverage ratio has historically been at least one and one-half times.

Funding from time to time issues  commercial  paper through  Credit Suisse First
Boston  Corporation,  J.P. Morgan  Securities Inc.,  Merrill Lynch Money Markets
Inc., and Morgan Stanley Dean Witter to corporate and institutional investors in
the  domestic  market.  The  commercial  paper is  guaranteed  by  JCPenney on a
subordinated  basis.  The  commercial  paper is rated "A3" by  Standard & Poor's
Ratings Services and "Not Prime" by Moody's Investors Service, Inc.

Funding had no short-term debt  outstanding as of April 27, 2002 nor as of April
28, 2001.

After  paying off $700  million of debt that  matured in April 2002,  JCPenney's
liquidity remains strong with  approximately $2.3 billion in cash and short-term
investments as of April 27, 2002.

As a result of JCPenney's strong liquidity position,  it is not anticipated that
any external  financing  will be required in 2002 to fund  JCPenney's  operating
cash needs.

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<PAGE>



PART II - OTHER INFORMATION



         Item 6.        Exhibits and Reports on Form 8-K

              (a)       Exhibits

                        None.

              (b)       Reports on Form 8-K

                        None.



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<PAGE>









                                   SIGNATURES


Pursuant  to the  requirements  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




                                            By:   /s/ W. J. Alcorn
                                               ---------------------------------
                                                  W. J. Alcorn
                                                  Controller
                                                  (Principal Accounting Officer)


Date:  June 11, 2002

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