<PAGE>
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, 1996
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 214-431-1000
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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
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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, 1996.
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.
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
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The following interim financial information of J. C. Penney Funding
Corporation ("Funding"), a wholly owned subsidiary of J. C. Penney
Company, 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 27, 1996.
<TABLE>
<CAPTION>
Statements of Income and Reinvested Earnings
(Dollars in millions)
13 weeks ended
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April 27, April 29,
1996 1995
--------- ---------
<S> <C> <C>
Interest earned from
JCPenney and affiliates $ 32 $ 48
Interest expense 21 31
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Income before income taxes 11 17
Income taxes 4 6
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Net income 7 11
Reinvested earnings at
beginning of period 926 883
---- ----
Reinvested earnings at
end of period $933 $894
---- ----
---- ----
</TABLE>
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<TABLE>
<CAPTION>
Balance Sheets
(Dollars in millions)
April 27, April 29, Jan. 27,
1996 1995 1996
--------- --------- --------
<S> <C> <C> <C>
ASSETS
Loans to JCPenney and affiliates $2,423 $3,211 $2,563
------ ------ ------
$2,423 $3,211 $2,563
------ ------ ------
------ ------ ------
LIABILITIES AND EQUITY OF JCPENNEY
Short-term debt $1,332 $2,154 $1,482
Due to JCPenney 13 18 10
------ ------ ------
Total liabilities 1,345 2,172 1,492
Equity of JCPenney:
Common stock (including contributed
capital), par value $100:
Authorized, 750,000 shares
Issued, 500,000 shares 145 145 145
Reinvested earnings 933 894 926
------ ------ ------
Total equity of JCPenney 1,078 1,039 1,071
------ ------ ------
$2,423 $3,211 $2,563
------ ------ ------
------ ------ ------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
(Dollars in millions)
13 weeks ended
-----------------------
April 27, April 29,
1996 1995
--------- ---------
<S> <C> <C>
Operating Activities
Net income $ 7 $ 11
Decrease (Increase) in loans to JCPenney 140 (96)
Increase in amount due to JCPenney 3 6
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150 (79)
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Financing Activities
(Decrease) Increase in short-term debt (150) 79
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Increase (Decrease) in cash 0 0
Cash at beginning of year 0 0
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Cash at end of first quarter $ 0 $ 0
------- -------
------- -------
</TABLE>
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<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Under the terms of the loan agreement which provides for unsecured loans
to be made by Funding to JCPenney and the receivables agreement pursuant
to which Funding may purchase an undivided interest in certain JCPenney
customer receivables, Funding derives earnings on loans to JCPenney and
income from 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.
Since 1986, Funding has provided financing to JCPenney in accordance with
the loan agreement and no receivable balances have been purchased.
Funding is not and has not been involved in the administration of
JCPenney's retail credit operation and does not bear any expenses or
receive any finance charge revenue connected therewith.
For the first quarter of 1996, income, expenses, and provision for taxes
decreased as compared with the first quarter of 1995, as a result of both
lower average borrowing levels and lower average interest rates.
Borrowing levels averaged $1,546 million during the 1996 first quarter as
compared with $2,053 million during the comparable 1995 period. At the
end of the first quarter of 1996, borrowing levels were $1,332 million as
compared with $2,154 million at the end of the first quarter of 1995.
For the first quarter of 1996, average interest rates decreased 73 basis
points as compared with the same period in 1995.
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<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
The following document is filed as an exhibit to this report:
27 Financial Data Schedule for the three months ended
April 27, 1996.
(b) Reports on Form 8-K
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None
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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 6, 1996
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND RELATED CONSOLIDATED STATEMENT OF INCOME
OF J. C. PENNEY FUNDING CORPORATION AS OF APRIL 27, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-25-1997
<PERIOD-END> APR-27-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 2,423
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,423
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,423
<CURRENT-LIABILITIES> 1,345
<BONDS> 0
<COMMON> 145
0
0
<OTHER-SE> 933
<TOTAL-LIABILITY-AND-EQUITY> 2,423
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (11)
<INCOME-PRETAX> 11
<INCOME-TAX> 4
<INCOME-CONTINUING> 7
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
