Item 2.02 Results of Operations and Financial Condition.

J. C. Penney Company, Inc. (the "Company") issued an earnings press release on August 14, 2009, announcing its second quarter results of operations and financial condition. This information is attached as Exhibit 99.1.

The press release provides certain information regarding free cash flow and adjusted operating income, both of which may be considered non-GAAP financial measures under the rules of the Securities and Exchange Commission. The press release includes a reconciliation of each such non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP.

We define free cash flow as net cash provided by operating activities of continuing operations less capital expenditures and dividends paid, plus proceeds from sale of assets. We believe that free cash flow is a relevant indicator of our ability to repay maturing debt, revise our dividend policy or fund other uses of capital that we believe will enhance stockholder value. Free cash flow is limited and does not represent remaining cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt maturities and other obligations or payments made for business acquisitions.

We define adjusted operating income as operating income excluding the non-cash impact of the qualified pension plan. We believe that the presentation of adjusted operating income, which our management uses to assess our operating results, is useful in order to better understand the operating performance of our core business, provide enhanced visibility in our selling, general and administrative expense structure and to facilitate the comparison of our results to the results of our peer companies. Unlike our primary operating expenses, pension expense is determined using numerous complex assumptions about changes in pension assets and liabilities that are subject to factors, such as market volatility, that are beyond our control. We believe it is useful to investors to understand the impact of the non-cash qualified pension expense to our results of operations through better year-over-year comparisons.

We believe it is important to view each of these non-GAAP financial measures in addition to, rather than as a substitute for, the GAAP measures of cash flows from operating activities and operating income, respectively.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibit 99.1 J. C. Penney Company, Inc. News Release issued August 14, 2009