Old COPPER (CPPRQ) 10-Q 9 Sep 09 2010 Q2 Quarterly report Financial data

CONSOLIDATED STATEMENTS of OPER

CONSOLIDATED STATEMENTS of OPERATIONS (Unaudited) (USD $)
In Millions, except Per Share data	3 Months Ended Aug. 01, 2009	3 Months Ended Aug. 02, 2008	6 Months Ended Aug. 01, 2009	6 Months Ended Aug. 02, 2008
Total net sales	$3,943	$4,282	$7,827	$8,409
Cost of goods sold	2,423	2,676	4,733	5,153
Gross margin	1,520	1,606	3,094	3,256
Operating expenses:
Selling, general and administrative (SG&A)	1,242	1,270	2,497	2,587
Pension expense/(income)	83	(22)	173	(44)
Depreciation and amortization	121	115	241	225
Pre-opening	14	9	23	15
Real estate and other (income), net	(7)	(9)	(13)	(18)
Total operating expenses	1,453	1,363	2,921	2,765
Operating income	67	243	173	491
Net interest expense	68	55	131	108
(Loss)/income from continuing operations before income taxes	(1)	188	42	383
Income tax expense	0	72	18	147
(Loss)/income from continuing operations	(1)	116	24	236
Income from discontinued operations, net of income tax (benefit) of $-, $(1), $- and $(1)	0	1	0	1
Net (loss)/income	($1)	$117	$24	$237
Earnings per share - basic	$0	0.52	0.11	1.06
Earnings per share - diluted	$0	0.52	0.11	1.06

1_CONSOLIDATED STATEMENTS of OP

CONSOLIDATED STATEMENTS of OPERATIONS (Parenthetical) (USD $)
In Millions	3 Months Ended Aug. 01, 2009	3 Months Ended Aug. 02, 2008	6 Months Ended Aug. 01, 2009	6 Months Ended Aug. 02, 2008
Income tax (benefit)-discontinued operations	$0	($1)	$0	($1)

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)
In Millions	Aug. 01, 2009		Jan. 31, 2009		Aug. 02, 2008
Current assets
Cash and cash equivalents	$2,312		$2,352		$2,243
Merchandise inventory (net of LIFO reserves of $2, $1 and $2)	3,258		3,259		3,693
Income taxes receivable	446		352		337
Prepaid expenses and other	256		257		246
Total current assets	6,272		6,220		6,519
Property and equipment (net of accumulated depreciation of $2,603, $2,378 and $2,439)	5,368		5,367		5,161
Prepaid pension	30		0		1,582
Other assets	499		424		534
Total Assets	12,169		12,011		13,796
Current liabilities
Merchandise accounts payable	1,302		1,194		1,477
Other accounts payable and accrued expenses	1,478		1,600		1,469
Current maturities of long-term debt	393		0		201
Total current liabilities	3,173		2,794		3,147
Long-term debt	2,999		3,505		3,505
Deferred taxes	747		599		1,283
Other liabilities	714		958		710
Total Liabilities	7,633		7,856		8,645
Stockholders' Equity
Common stock(1)	118	[1]	111	[1]	111	[1]
Additional paid-in capital	3,849		3,499		3,476
Reinvested earnings	1,891		1,959		1,713
Accumulated other comprehensive (loss)	(1,322)		(1,414)		(149)
Total Stockholders' Equity	4,536		4,155		5,151
Total Liabilities and Stockholders' Equity	$12,169		$12,011		$13,796
[1]1,250 million shares of common stock are authorized with a par value of $0.50 per share. The total shares issued and outstanding were 236 million as of August 1, 2009 and 222 million as of both August 2, 2008 and January 31, 2009.

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Per Share data	Aug. 01, 2009	Jan. 31, 2009	Aug. 02, 2008
LIFO reserves	$2	$2	$1
Accumulated depreciation	$2,603	$2,439	$2,378
Common stock, authorized	1,250	1,250	1,250
Common stock, par value per share	0.5	0.5	0.5
Common stock, issued and outstanding	236	222	222

CONSOLIDATED STATEMENTS of CASH

CONSOLIDATED STATEMENTS of CASH FLOWS (Unaudited) (USD $)
In Millions	6 Months Ended Aug. 01, 2009	6 Months Ended Aug. 02, 2008
Cash flows from operating activities:
Net income	$24	$237
(Income) from discontinued operations	0	(1)
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairments, PVOL and other unit closing costs	6	8
Depreciation and amortization	241	225
Benefit plans expense/(income)	157	(58)
Stock-based compensation	20	24
Tax benefits from stock-based compensation	4	9
Deferred taxes	91	34
Change in cash from:
Inventory	1	(52)
Prepaid expenses and other assets	0	33
Merchandise accounts payable	108	5
Current income taxes payable	(102)	(37)
Accrued expenses and other	(47)	(84)
Net cash provided by operating activities of continuing operations	503	343
Cash flows from investing activities:
Capital expenditures	(304)	(496)
Net cash (used in) investing activities of continuing operations	(304)	(496)
Cash flows from financing activities:
Payments of long-term debt, including capital leases	(113)	(2)
Financing costs	(32)	0
Dividends paid, common	(89)	(134)
Proceeds from stock options exercised	1	4
Excess tax benefits from stock-based compensation	0	1
Tax withholding payments reimbursed by restricted stock	(2)	(4)
Net cash (used in) financing activities of continuing operations	(235)	(135)
Cash flows from discontinued operations:
Operating cash flows	(4)	0
Investing cash flows	0	(1)
Financing cash flows	0	0
Total cash (paid for) discontinued operations	(4)	(1)
Net (decrease) in cash and cash equivalents	(40)	(289)
Cash and cash equivalents at beginning of year	2,352	2,532
Cash and cash equivalents at end of period	$2,312	$2,243

Basis of Presentation and Conso

Basis of Presentation and Consolidation
	6 Months Ended Aug. 01, 2009 USD / shares
Basis of Presentation and Consolidation
Basis of Presentation and Consolidation	Note 1 Basis of Presentation and Consolidation Basis of Presentation J. C. Penney Company, Inc. is a holding company whose principal operating subsidiary is J. C. Penney Corporation, Inc. (JCP). JCP was incorporated in Delaware in 1924, and J. C. Penney Company, Inc. was incorporated in Delaware in 2002, when the holding company structure was implemented. The holding company has no independent assets or operations, and no direct subsidiaries other than JCP. J. C. Penney Company, Inc. is a co-obligor (or guarantor, as appropriate) regarding the payment of principal and interest on JCPs outstanding debt securities. The guarantee of certain of JCPs outstanding debt securities by J. C. Penney Company, Inc. is full and unconditional. The holding company and its consolidated subsidiaries, including JCP, are collectively referred to in this quarterly report as we, us, our, ourselves, JCPenney or the Company, unless otherwise indicated. These Interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (SEC). The accompanying Interim Consolidated Financial Statements are unaudited but, in our opinion, include all material adjustments necessary for a fair presentation and should be read in conjunction with the Consolidated Financial Statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended January 31, 2009 (2008 Form 10-K). We followed substantially the same accounting policies to prepare these quarterly financial statements as we followed to prepare our annual 2008 financial statements. A description of such significant accounting policies is included in the 2008 Form 10-K. The January 31, 2009 financial information was derived from the audited Consolidated Financial Statements, with related footnotes, included in the 2008 Form 10-K. In connection with preparation of the consolidated financial statements and in accordance with recently issued Statement of Financial Accounting Standards (SFAS) No. 165, Subsequent Events, we evaluated subsequent events after August 1, 2009 through the date and time the financial statements were issued on September 9, 2009. Because of the seasonal nature of the retail business, operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Basis of Consolidation All significant intercompany transactions and balances have been eliminated in consolidation. Certain reclassifications were made to prior year amounts to conform to the current period presentation. None of the reclassifications affected our net income in any period.

Earnings per Share

Earnings per Share
	6 Months Ended Aug. 01, 2009 USD / shares
Earnings per Share
Earnings per Share	Note 2 Earnings per Share Basic earnings per share (EPS) is computed by dividing net income/(loss) by the weighted-average number of shares of common stock outstanding for the period. The diluted EPS calculation includes the impact of restricted stock units and shares that could have been issued under outstanding stock options during the period, except when the effect is anti-dilutive. Income from continuing operations and shares used to compute basic and diluted EPS are reconciled below: (in millions, except per share data) Three Months Ended Six Months Ended Aug. 1, Aug. 2, Aug. 1, Aug. 2, 2009 2008 2009 2008 Earnings: (Loss)/income from continuing operations, basic and diluted $ (1 ) $ 116 $ 24 $ 236 Shares: Average common shares outstanding (basic shares) 234 222 228 222 Adjustment for assumed dilution: Stock options and restricted stock awards - 1 1 1 Average shares assuming dilution (diluted shares) 234 223 229 223 EPS from continuing operations: Basic $ - $ 0.52 $ 0.11 $ 1.06 Diluted $ - $ 0.52 $ 0.11 $ 1.06 The following average potential shares of common stock were excluded from the diluted EPS calculations because their effect would have been anti-dilutive: (Shares in millions) Three Months Ended Six Months Ended Aug. 1, Aug. 2, Aug. 1, Aug. 2, 2009 2008 2009 2008 Stock options and restricted awards 16 8 10 8

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	6 Months Ended Aug. 01, 2009 USD / shares
Supplemental Cash Flow Information
Supplemental Cash Flow Information	Note 3 Supplemental Cash Flow Information ($ in millions) Six Months Ended Aug. 1, Aug. 2, 2009 2008 Income taxes paid $ 24 $ 140 Interest paid 139 137 Interest received 2 25 Non-cash transaction 340 - Non-cash transaction: On May 18, 2009, we made a voluntary contribution of approximately 13.4 million newly issued shares of JCPenney common stock, valued at $340 million, to the J. C. Penney Corporation, Inc. Pension Plan. See Note 9 for more information regarding this contribution.

Credit Facility

Credit Facility
	6 Months Ended Aug. 01, 2009 USD / shares
Credit Facility
Credit Facility	Note 4 Credit Facility On April 8, 2009, J. C. Penney Company, Inc., JCP and J. C. Penney Purchasing Corporation entered into a three-year, $750 million revolving credit agreement (2009 Credit Facility) with a syndicate of lenders with JPMorgan Chase Bank, N.A., as administrative agent. The 2009 Credit Facility replaced our $1.2 billion credit facility that was scheduled to expire in April 2010. The facility is secured by our inventory, which security interest can be released upon attainment of certain credit rating levels. The 2009 Credit Facility is available for general corporate purposes, including the issuance of letters of credit. Pricing under the 2009 Credit Facility is tiered based on JCPs senior unsecured long-term credit ratings issued by Moodys Investors Service, Inc. and Standard Poors Ratings Services. JCPs obligations under the 2009 Credit Facility are guaranteed by J. C. Penney Company, Inc. The 2009 Credit Facility requires that we maintain certain financial covenants, which include a leverage ratio, a fixed charge coverage ratio and an asset coverage ratio (each as defined in the 2009 Credit Facility). Under the terms of the 2009 Credit Facility, non-cash charges or credits related to retirement plans are not included in the calculation of EBITDA (consolidated earnings before income taxes less depreciation and amortization), which is used in the leverage ratio and fixed charge coverage ratio. The leverage ratio, which is calculated as of the last day of the quarter and measured on a trailing four-quarter basis, cannot exceed 4.0 to 1.0 through January30, 2010; 3.5 to 1.0 from January31, 2010 through October30, 2010; and 3.0 to 1.0 thereafter. The fixed charge coverage ratio, which is calculated as of the last day of the quarter and measured on a trailing four-quarter basis, cannot be less than 2.25 to 1.0 through October30, 2010; 2.5 to 1.0 from October31, 2010 through October29, 2011; and 3.0 to 1.0 thereafter. The asset coverage ratio, which is calculated as of the last day of each fiscal month, cannot be less than 3.0 to 1.0. As of August 1, 2009, we were in compliance with these requirements with a leverage ratio of 2.6 to 1.0, a fixed charge coverage ratio of 3.2 to 1.0 and an asset coverage ratio of 19.9 to 1.0. No borrowings, other than the issuance of standby and import letters of credit totaling $164 million as of the end of the second quarter of 2009, have been made under the 2009 Credit Facility.

Long-Term Debt

Long-Term Debt
	6 Months Ended Aug. 01, 2009 USD / shares
Long-Term Debt
Long-Term Debt	Note 5 Long-Term Debt Debt Reductions On May 12, 2009, we accepted for purchase $104 million principal amount of JCPs outstanding 8% Notes due March 1, 2010 (Notes), which were validly tendered pursuant to our cash tender offer to purchase up to $200 million aggregate principal amount of the Notes. We paid $107 million aggregate consideration, including accrued and unpaid interest, for the accepted Notes on May 13, 2009. In addition, we purchased $9 million of these Notes in the open market on July 10, 2009. We had no scheduled debt maturities or early repayments during the first half of 2008.

Fair Value Disclosures

Fair Value Disclosures
	6 Months Ended Aug. 01, 2009 USD / shares
Fair Value Disclosures
Fair Value Disclosures	Note 6 Fair Value Disclosures SFAS 157, Fair Value Measurements, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. SFAS 157 establishes a hierarchy for inputs used in measuring fair value, as follows: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 Significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. REIT Assets Measured on a Recurring Basis We determined the fair value of our investments in public real estate investment trusts (REITs) using quoted market prices. The fair value of these investments reflected in other assets in our Consolidated Balance Sheet as of August 1, 2009 is presented in the table below based on the hierarchy outlined in SFAS 157. See Note 7 for the net unrealized gain of $20 million in REITs recorded in accumulated other comprehensive income, a component of net equity. Our REIT assets measured at fair value on a recurring basis were as follows: REIT Assets at Fair Value as of Aug. 1, 2009 ($ in millions) Level 1 Level 2 Level 3 Total $ 133 $ - $ - $ 133 Corporate Assets Measured on a Non-Recurring Basis For the second quarter of 2009, we recorded a $3 million other-than-temporary impairment for certain corporate assets. We determined the fair value using an executed contract price for one of the assets and quoted prices for similar assets, corroborated by current market information for the other asset. Our financial assets and liabilities measured at fair value on a non-recurring basis were as follows: Corporate Assets at Fair Value as of Aug. 1, 2009 ($ in millions) Level 1 Level 2 Level 3 Total $ - $ 17 $ - $ 17 Other Financial Instruments Our financial instruments include cash and cash equivalents and long-term debt. The carrying amount of our cash and cash equivalents approximates fair value because of the short maturity of these instruments. The fair value of long-term debt, excluding capital leases and other is estimated by obtaining quotes from brokers or is based on current rates offered for similar debt. At August 1, 2009, long-term debt, including current maturities and excluding capital leases and other, had a carrying value of $3.4 billion and a fair value of $3.0 billion. At January 31, 2009, long-term debt excluding capital leases and other, had a carrying value of $3.5 billion and a fair value of $2.6 billion.

Stockholders' Equity

Stockholders' Equity
	2/1/2009 - 8/1/2009 USD / shares
Stockholders' Equity
Stockholders' Equity	Note 7 Stockholders Equity The following table shows the change in the components of stockholders equity for the first six months of 2009: (in millions) Number of Common Shares Common Stock Additional Paid-in Capital Reinvested Earnings Accumulated Other Comprehensive (Loss)/Income Total Stockholders Equity January31, 2009 222 $ 111 $ 3,499 $ 1,959 $ (1,414) (1) $ 4,155 Net income - - - 24 - 24 Other comprehensive income - - - - 92 92 Dividends declared, common - - - (92) - (92) Common stock contributed to primary pension plan 13 7 333 - - 340 Vesting of share-based payments 1 - 17 - - 17 August 1, 2009 236 $ 118 $ 3,849 $ 1,891 $ (1,322) (2) $ 4,536 (1) Includes an unrealized gain in REITs of $15 million (shown net of an $8 million deferred tax liability) and actuarial (loss) and prior service (cost) for the pension and postretirement plans of $1,429 million (shown net of a $910 million deferred tax asset). (2) Includes an unrealized gain in REITs of $35 million (shown net of a deferred tax liability of $20 million) and actuarial (loss) and prior service (cost) for the pension and postretirement plans of $1,357 million (shown net of an $865 million deferred tax asset). Comprehensive Income/(Loss) Three Months Ended Six Months Ended ($ in millions) Aug. 1, 2009 Aug. 2, 2008 Aug. 1, 2009 Aug. 2, 2008 Net (loss)/income $ (1 ) $ 117 $ 24 $ 237 Other comprehensive income/(loss) net of tax: Remeasurement of primary pension plan at May 18, 2009 (10 ) - (10 ) - Amortization of net actuarial loss and prior service cost 40 - 82 - Unrealized gain/(loss) in REITs 10 (25 ) 20 (14 ) Total other comprehensive income/(loss) 40 (25 ) 92 (14 ) Total comprehensive income $ 39 $ 92 $ 116 $ 223

Stock-Based Compensation

Stock-Based Compensation
	6 Months Ended Aug. 01, 2009 USD / shares
Stock-Based Compensation
Stock-Based Compensation	Note 8 Stock-Based Compensation We grant stock-based compensation awards to employees (associates) and non-employee directors under our equity compensation plan. On May 15, 2009, our stockholders approved the J. C. Penney Company, Inc. 2009 Long-Term Incentive Plan (2009 Plan), reserving 13.1 million shares for future grants (8.5 million newly authorized shares plus up to 4.6 million reserved but unissued shares from our prior 2005 Equity Compensation Plan (2005 Plan)). In addition, shares underlying any outstanding stock award or stock option grant cancelled prior to vesting or exercise become available for use under the 2009 Plan. The 2005 Plan was terminated on May 15, 2009, except for outstanding awards. Subsequent awards have been and will be granted under the 2009 Plan. As of August 1, 2009, there were 14.1 million shares of stock available for future grant under the 2009 Plan, which includes approximately 1 million shares from awards cancelled during the second quarter of 2009, subsequent to May 15, 2009. The following table presents total stock-based compensation costs included in the unaudited Consolidated Statements of Operations. Stock-Based Compensation Costs ($ in millions) Three Months Ended Six Months Ended Aug. 1, Aug. 2, Aug. 1, Aug. 2, 2009 2008 2009 2008 Stock awards (shares and units) $ 3 $ 6 $ 6 $ 11 Stock options 7 6 14 13 Total stock-based compensation cost $ 10 $ 12 $ 20 $ 24 Total income tax benefit recognized in the Consolidated Statements of Operations for stock-based compensation arrangements $ 4 $ 4 $ 8 $ 9 Stock Options On March 16, 2009, we made an annual grant of stock options covering approximately 3.9 million shares to associates at an option price of $16.09, with a fair value of $6.27 per option. The following table summarizes stock options outstanding as of August 1, 2009, as well as activity during the six months then ended: (options in thousands) Stock Options Weighted-Average Exercise Price Outstanding at January 31, 2009 11,862 $ 42 Granted 3,882 16 Exercised (48 ) 18 Forfeited or expired (1,760 ) 32 Outstanding at August 1, 2009 13,936 36 Exercisable at August 1, 2009 7,302 46 As of August 1, 2009, there was $49 million of unrecognized compensation expense, net of estimated forfeitures, for unvested stock options, which will be recognized over the remaining weighted-average vesting period of approximately 1.1 years. Stock Awards On March 16, 2009, we granted approximately 149,000 performance-based restricted stock units to our Chairman and Chief Executive Officer, with a fair value of $8.59 per unit. The performance measurement for the award is the Companys annualized total stockholder return over a three-year

Retirement Benefit Plans

Retirement Benefit Plans
	6 Months Ended Aug. 01, 2009 USD / shares
Retirement Benefit Plans
Retirement Benefit Plans	Note 9 Retirement Benefit Plans Our retirement benefit plans consist of a non-contributory qualified defined benefit pension plan (primary pension plan), non-contributory supplemental pension plans, a deferred compensation plan for certain management associates, a 1997 voluntary early retirement program, a contributory medical and dental plan (postretirement health and welfare plan) and a 401(k) savings plan and employee stock ownership plan (401(k) savings plan). These plans are discussed in more detail in our 2008 Form 10-K. Associates hired or rehired on or after January1, 2002 are not eligible for retiree medical or dental coverage. Associates hired or rehired on or after January 1, 2007 are not eligible to participate in the primary pension plan. Employer Contributions Our practice with respect to funding the primary pension plan is to fund at least the minimum required by the Employee Retirement Income Security Act of 1974 (ERISA) rules, as amended by the Pension Protection Act of 2006; however, we may make discretionary voluntary contributions, taking into account liquidity and capital resource availability and capital market conditions. In making voluntary contributions, we do not contribute more than the maximum amount deductible for tax purposes. Based on the plans funded status, we are not required to make a mandatory contribution under ERISA rules in 2009 or 2010. Consistent with our discretionary contribution practice, on May 18, 2009, we voluntarily contributed approximately 13.4 million newly issued shares of JCPenney common stock to the plan. The contribution was valued at $340 million, based on a price of $25.39 per share, reflecting a 6.5% discount to the closing price of JCPenney common stock on May 18, 2009. Remeasurement of Primary Pension Plan Assets and Obligations The primary pension plan assets and obligations were remeasured as of the date of the stock contribution. Certain of the actuarial assumptions were updated in conjunction with the remeasurement compared to the assumptions used at the original measurement date of January 31, 2009. The discount rate used to determine benefit obligations was updated to 6.86% from 6.95%. Other assumptions for salary progression, turnover and retirement rates were updated to reflect actual experience based on January 1, 2009 associate population data. Primarily as a result of the contribution and positive market returns, the funded status of the plan at the new measurement date increased $310 million to a positive $35 million compared with a deficiency of $275 million at January 31, 2009, representing a funded status of 101% versus 93%. The net periodic benefit expense estimated for 2009 at the remeasurement date was reduced by $24 million to $298 million from the original estimate of $322 million. Pension Plans Net Periodic Benefit Expense/(Income) Pension Plans Primary Plan Supplemental Total ($ in millions) Three Months Ended Three Months Ended Three Months Ended Aug. 1, Aug. 2, Aug. 1, Aug. 2, Aug. 1, Aug. 2, 2009 2008 2009 2008

Real Estate and Other

Real Estate and Other (Income) Expense
	6 Months Ended Aug. 01, 2009 USD / shares
Real Estate and Other (Income)/Expense
Real Estate and Other (Income)/Expense	Note 10 Real Estate and Other (Income)/Expense ($ in millions) Three Months Ended Six Months Ended Aug. 1, Aug. 2, Aug. 1, Aug. 2, 2009 2008 2009 2008 Real estate activities $ (9 ) $ (10 ) $ (18 ) $ (20 ) Other 2 1 5 2 Total $ (7 ) $ (9 ) $ (13 ) $ (18 ) Real estate and other consists mainly of ongoing operating income from our real estate subsidiaries whose primary investments are in REITs, as well as investments in 14 joint ventures that own regional mall properties. Real estate and other also includes net gains from the sale of facilities and equipment that are no longer used in operations, asset impairments and other non-operating charges and credits. The decrease in real estate activities reflected a decline in our ongoing real estate joint venture and REIT investment income resulting from the weakened retail real estate market. The increase in other was due to write downs to reflect the fair value of certain corporate assets held for sale.

Litigation, Other Contingencies

Litigation, Other Contingencies and Guarantees
	6 Months Ended Aug. 01, 2009 USD / shares
Litigation, Other Contingencies and Guarantees
Litigation, Other Contingencies and Guarantees	Note 11 Litigation, Other Contingencies and Guarantees We are subject to various legal and governmental proceedings involving routine litigation incidental to our business. Reserves have been established based on our best estimates of our potential liability in certain of these matters. These estimates have been developed in consultation with in-house and outside counsel. While no assurance can be given as to the ultimate outcome of these matters, we currently believe that the final resolution of these actions, individually or in the aggregate, will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. As of August 1, 2009, we estimated our total potential environmental liabilities to range from $41 million to $52 million and recorded our best estimate of $45 million in other liabilities in the Consolidated Balance Sheet as of that date. This estimate covered potential liabilities primarily related to underground storage tanks, remediation of environmental conditions involving our former Eckerd drugstore locations and asbestos removal in connection with approved plans to renovate or dispose of our facilities. We continue to assess required remediation and the adequacy of environmental reserves as new information becomes available and known conditions are further delineated. If we were to incur losses at the upper end of the estimated range, we do not believe that such losses would have a material effect on our financial condition, results of operations or liquidity. As of August 1, 2009, we had a guarantee totaling $20 million for the maximum exposure on insurance reserves established by a former subsidiary included in the sale of our Direct Marketing Services business.

Effect of New Accounting Standa

Effect of New Accounting Standards
	6 Months Ended Aug. 01, 2009 USD / shares
Effect of New Accounting Standards
Effect of New Accounting Standards	Note 12 Effect of New Accounting Standards Adoption of New Accounting Standards In May2009, the Financial Accounting Standards Board (FASB) issued SFAS No.165, Subsequent Events, which establishes general standards of accounting for and disclosing events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, this standard sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. Our adoption of this standard beginning in the second quarter did not have a material impact on our consolidated financial statements. SFAS 157, Fair Value Measurements, became effective as of the beginning of 2008. This standard defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, but does not require any new fair value measurements. In November 2007, the FASB issued FSP FAS 157-2, Effective Date of FASB Statement No. 157, (FSP 157-2) which delayed the implementation of SFAS 157 for other non-financial assets and liabilities that are recorded or disclosed on a non-recurring basis until the beginning of the first quarter of 2009. The adoption of FSP 157-2 in the first quarter did not have a material impact on our consolidated financial statements. In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, (FSP 157-3) which clarifies the application of SFAS 157 as it relates to the valuation of financial assets in inactive markets. FSP 157-3 was immediately effective and included those periods for which financial statements had not been issued. The adoption of FSP 157-3 did not have a material impact on our consolidated financial statements. In April2009, the FASB issued FSP FAS 157-4, Determining Fair Value When Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, (FSP 157-4). FSP 157-4 provides guidance on how to determine the fair value of assets and liabilities when the volume and level of activity for the asset/liability has significantly decreased. FSP 157-4 also provides guidance on identifying circumstances that indicate a transaction is not orderly. In addition, FSP 157-4 requires disclosure in interim and annual periods of the inputs and valuation techniques used to measure fair value and a discussion of changes in valuation techniques. FSP 157-4 was effective for us beginning in the second quarter of 2009 and did not have a significant impact on our consolidated financial statements. I

Document Information

Document Information
	6 Months Ended Aug. 01, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-08-01

Entity Information

Entity Information (USD $)
	6 Months Ended Aug. 01, 2009	Sep. 04, 2009	Aug. 02, 2008
Entity Information [Line Items]
Entity Registrant Name	J. C. PENNEY COMPANY, INC.
Entity Central Index Key	0001166126
Current Fiscal Year End Date	--01-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$6,693,199,575
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		235,867,866