2.0.0.10 false Nature of Operations and Summary of Significant Accounting Policies 201 - Disclosure - Nature of Operations and Summary of Significant Accounting Policies true false false false 1 usd $ false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Nature of Operations and Summary of Significant Accounting Policies 0 jcp_BasisOfPresentationAndConsolidation jcp false na duration string No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false No definition available. false 3 Nature of Operations and Summary of Significant Accounting Policies 1 us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false false false terselabel false 1 false false false false 0 0 <div> <div><div><div> 1) Nature of Operations and Summary of Significant Accounting Policies Nature of Operations JCPenney was founded by James Cash Penney in 1902 and has grown to be a major national retailer, operating 1,108 JCPenney department stores in 49 states and Puerto Rico, as well as through the Internet at jcp.com and catalog. We sell family apparel and footwear, accessories, fine and fashion jewelry, beauty products through Sephora inside JCPenney, and home furnishings. In addition, our department stores provide services, such as styling salon, optical, portrait photography and custom decorating, to customers. Basis of Presentation and Consolidation The consolidated financial statements present the results of J. C. Penney Company, Inc. and our subsidiaries (the Company or JCPenney). All significant intercompany transactions and balances have been eliminated in consolidation. We are 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 direct subsidiaries other than JCP, and has no independent assets or operations. Our Company is a co-obligor (or guarantor, as appropriate) regarding the payment of principal and interest on JCP’s outstanding debt securities. We guarantee certain of JCP’s outstanding debt securities fully and unconditionally. Fiscal Year Our fiscal year ends on the Saturday closest to January 31. Unless otherwise stated, references to years in this report relate to fiscal years rather than to calendar years.    <div align="center"> <table class="MsoNormalTable" style="width: 84%; border-collapse: collapse;" cellspacing="0" cellpadding="0" width="84%" border="0"> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 157.6pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" width="210">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 135.1pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" width="180">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.65pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" width="174">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 157.6pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="210" nowrap="nowrap">     Fiscal Year     <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 135.1pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="180">     Ended     <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.65pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="174">     Weeks     <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 157.6pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="210">     2009     </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 135.1pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="180">     January 30, 2010     </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.65pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="174">     52     </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 157.6pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="210">     2008     </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 135.1pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="180">     January 31, 2009     </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.65pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="174">     52     </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 157.6pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="210">     2007     </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 135.1pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="180">     February 2, 2008     </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.65pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="174">     52     </td> </tr> </table> </div> Use of Estimates The preparation of financial statements, in conformity with generally accepted accounting principles in the United States of America (GAAP), requires us to make assumptions and use estimates that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  The most significant estimates relate to: inventory valuation under the retail method, specifically permanent reductions to retail prices (markdowns) and adjustments for shortages (shrinkage); valuation of long-lived assets; valuation allowances and reserves for workers’ compensation and general liability, environmental contingencies, income taxes and litigation; and pension accounting.  While actual results could differ from these estimates, we do not expect the differences, if any, to have a material effect on the consolidated financial statements. Reclassifications 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. Merchandise Inventory In the fourth quarter of 2009, we elected to change our method of valuing inventory to the FIFO method from the LIFO method. We believe that the FIFO method is preferable as it better reflects current and future operations with respect to the sourcing of merchandise, more accurately reflects the current value of our inventory presented in our consolidated balance sheet, and provides a better matching of cost of goods sold with revenue.  The cumulative effect of the change was a $1.8 million increase to gross margin recorded in the fourth quarter of 2009.  The change was not applied retrospectively to prior periods, as the effect of the change was immaterial to the consolidated financial statements of all prior periods, including interim periods.    The table below presents the results, in the period of the change, with and without the change in accounting principle on inventory and cost of sales.    <div align="center"> <table class="MsoNormalTable" style="width: 59.18%; border-collapse: collapse;" cellspacing="0" cellpadding="0" width="59%" border="0"> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.45pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="174">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 167.8pt; padding-top: 0in; border-bottom: windowtext 1pt solid; background-color: transparent;" valign="bottom" width="224" colspan="2"> Determined by </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.45pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="174"> ($ in millions) </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 79.8pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="106"> LIFO Method <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 88pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="117"> FIFO Method <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.45pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="174"> January 30, 2010 </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 79.8pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="106">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 88pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="117" nowrap="nowrap">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.45pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="174"> Merchandise inventory   </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 79.8pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="106"> $             2,999 </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 88pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="117" nowrap="nowrap"> $             3,024   </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 130.45pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="174"> Cost of goods sold </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 79.8pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="106"> $           10,671 </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 88pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="117" nowrap="nowrap"> $           10,646   </td> </tr> </table> </div>    For the year ended January 30, 2010, without the accounting change, income from continuing operations before income taxes would have been $23 million lower, net income would have been $14 million lower and EPS would have been $0.06 lower; however, this would not have been reflective of our 2009 operating results, as described above.    Inventories are valued at the lower of cost or market.  For department stores, regional warehouses and store distribution centers, we value inventories using the retail method.  Lower of cost or market for Direct (Internet/catalog) is determined by standard cost, representing average vendor cost. Merchandise and Services Revenue Recognition Total net sales, which exclude sales taxes and are net of estimated returns, are recorded at the point of sale when payment is received and the customer takes possession of the merchandise in department stores, at the point of shipment of merchandise ordered through Direct or, in the case of services, at the time the customer receives the benefit of the service, such as salon, portrait, optical or custom decorating. Commissions earned on sales generated by licensed departments are included as a component of total net sales. Shipping and handling fees charged to customers are also included in total net sales with corresponding costs recorded as cost of goods sold. We provide for estimated future returns based on historical return rates and sales levels. Gift Card Revenue Recognition At the time gift cards are sold, no revenue is recognized; rather, a liability is established for the face amount of the card. The liability remains recorded until the earlier of redemption, escheatment or 60 months. The liability is relieved and revenue is recognized when gift cards are redeemed for merchandise. We escheat a portion of unredeemed gift cards according to Delaware escheatment requirements that govern remittance of the cost of the merchandise portion of unredeemed gift cards over five years old. After reflecting the amount escheated, any remaining liability (referred to as breakage) is relieved and recognized as a reduction of selling, general and administrative (SG&A) expenses as an offset to the costs of administering the gift card program. Though our gift cards do not expire, it is our historical experience that the likelihood of redemption after 60 months is remote. The liability for gift cards is recorded in other accounts payable and accrued expenses on the Consolidated Balance Sheets. Cost of Goods Sold Cost of goods sold includes all costs directly related to bringing merchandise to its final selling destination. These costs include the cost of the merchandise (net of discounts or allowances earned), sourcing and procurement costs, buying and brand development costs, including buyers’ salaries and related expenses, freight costs, warehouse operating expenses, merchandise examination, inspection and testing, store merchandise distribution center expenses, including rent, and shipping and handling costs incurred related to Direct sales to customers. Selling, General and Administrative Expenses SG&A expenses include the following costs, except as related to merchandise buying, sourcing, warehousing or distribution activities: salaries, marketing costs, occupancy and rent expense, utilities and maintenance, costs related to information technology, administrative costs related to our home office and district and regional operations, real and personal property and other taxes (excluding income taxes) and credit card fees.    Advertising Advertising costs, which include newspaper, television, Internet search marketing, radio and other media advertising, are expensed either as incurred or the first time the advertisement occurs. Total advertising costs, net of cooperative advertising vendor reimbursements of $154 million, $167 million and $210 million for 2009, 2008 and 2007, respectively, were $1,167 million, $1,314 million and $1,316 million. These totals include direct-to-consumer advertising, consisting of catalog book costs and Internet advertising, of $285 million, $331 million and $346 million for 2009, 2008 and 2007, respectively. Catalog book preparation and printing costs, which are considered direct response advertising, are charged to expense over the productive life of the catalog, not to exceed eight months. Deferred catalog book costs of $18 million at January 30, 2010 and $35 million at January 31, 2009 were included in prepaid expenses and other on the Consolidated Balance Sheets. Vendor Allowances We receive vendor support in the form of cash payments or allowances for a variety of reimbursements such as cooperative advertising, markdowns, vendor shipping and packaging compliance and defective merchandise. We have agreements in place with each vendor setting forth the specific conditions for each allowance or payment. Depending on the arrangement, we either recognize the allowance as a reduction of current costs or defer the payment over the period the related merchandise is sold. If the payment is a reimbursement for costs incurred, it is offset against those related costs; otherwise, it is treated as a reduction to the cost of merchandise. For cooperative advertising programs offered by national brands, we generally offset the allowances against the related advertising expense. Certain programs require proof-of-advertising to be provided to the vendor to support the reimbursement of the incurred cost. Programs that do not require proof-of-advertising are monitored to ensure that the allowance provided by each vendor is a reimbursement of costs incurred to advertise for that particular vendor’s label. If the allowance exceeds the advertising costs incurred on a vendor-specific basis, then the excess allowance for the vendor is recorded as a reduction of merchandise cost. Markdown reimbursements related to merchandise that has been sold are negotiated and documented by our buying teams and are credited directly to cost of goods sold in the period received. If vendor allowances are received prior to merchandise being sold, they are recorded as a reduction of merchandise cost. Vendor compliance charges reimburse us for incremental merchandise handling expenses incurred due to a vendor’s failure to comply with our established shipping or merchandise preparation requirements. Vendor compliance charges are recorded as a reduction of merchandise handling costs. Pre-Opening Expense Expenses associated with the pre-opening phase, including advertising, hiring and training costs for new associates, processing and stocking initial merchandise inventory and rent, are expensed as incurred.   Income Taxes We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not such assets will be realized. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense on our Consolidated Statements of Operations. Earnings per Share Basic earnings per share (EPS) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Except when the effect would be anti-dilutive at the continuing operations level, the diluted EPS calculation includes the impact of restricted stock units and shares that, during the period, could have been issued under outstanding stock options. Comprehensive Income/(Loss) Comprehensive income/(loss) consists of two components: net income and other comprehensive income/(loss). For all years presented, other comprehensive income/(loss) includes the unrealized net actuarial gain or loss from pension and other postretirement benefit plans, and unrealized gains and losses on investments. On February 3, 2008, the opening balance of other comprehensive income/(loss) was adjusted to reflect the impact from the adoption of new pension accounting guidance that required the measurement date be changed to the end of our fiscal year from the prior measurement date of October 31, 2007. Since 2007, other comprehensive income/(loss) reflects the gain or loss and prior service cost arising during the period and reclassification adjustments for amounts being recognized as components of net periodic pension/postretirement cost during the period, all net of tax. Cash and Cash Equivalents Cash and cash equivalents include cash short-term investments that are highly liquid investments with original maturities of three months or less. Cash short-term investments consist primarily of short-term U.S. Treasury money market funds and a portfolio of highly rated bank deposits and are stated at cost, which approximates fair market value due to the short-term maturity.  Cash in banks and in transit also includes credit card sales transactions that are settled early in the following period.    Fair Value Disclosures Fair value is defined 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.  In determining fair value, the accounting standards establish a three-level 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.    We report investments in real estate investment trusts (REITs) at fair value on an ongoing basis in other assets on the Consolidated Balance Sheets. Certain other assets are measured at fair value on a nonrecurring basis; that is, the assets are subject to fair value adjustments only in certain circumstances (for example, asset impairments). When there are asset impairments, the fair value of applicable long-lived assets is recorded on the Consolidated Balance Sheets in property and equipment, net, and the corresponding impairment is recorded in real estate and other, net, on the Consolidated Statements of Operations. We also present the primary pension plan assets at fair value, of which level 2 investments are measured using net asset value (NAV) or broker quotes. Property and Equipment, Net    <div align="center"> <table class="MsoNormalTable" style="width: 100%; border-collapse: collapse;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" width="344">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" width="108">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" width="110">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" width="110">    </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr style="height: 15pt;"> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; height: 15pt; background-color: transparent;" valign="bottom" width="344" rowspan="2"> ($ in millions) </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; height: 15pt; background-color: transparent;" valign="bottom" width="108" rowspan="2"> Estimated Useful Lives (Years) <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; height: 15pt; background-color: transparent;" valign="bottom" width="110" rowspan="2"> 2009 <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; height: 15pt; background-color: transparent;" valign="bottom" width="110" rowspan="2"> 2008 <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; height: 15pt; background-color: transparent;" width="0" height="20"></td> </tr> <tr style="height: 14.25pt;"> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; height: 14.25pt; background-color: transparent;" width="0" height="19"></td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="344"> Land </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108" nowrap="nowrap">                   N/A   </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap"> $                308   </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap"> $                308   </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="344"> Buildings </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108" nowrap="nowrap">                     50   </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">                4,276 </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">                4,090   </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="344"> Furniture and equipment </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108" nowrap="nowrap">                  3-20   </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">                2,356   </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">                2,364   </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="344"> Leasehold improvements </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">                1,118 </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">                1,044   </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="344"> Accumulated depreciation </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">               (2,701) </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap">               (2,439) </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="344">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110"> <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110"> <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 1pt solid; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="top" width="344"> Property and equipment, net </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap"> $             5,357   </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110" nowrap="nowrap"> $             5,367   </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> <tr> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 257.7pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="344">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 81.2pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="108">    </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110"> <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 2.25pt double; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; padding-right: 0in; border-top: #d4d0c8; padding-left: 0.1in; padding-bottom: 0in; border-left: #d4d0c8; width: 82.55pt; padding-top: 0in; border-bottom: #d4d0c8; background-color: transparent;" valign="bottom" width="110"> <div style="border-right: medium none; padding-right: 0in; border-top: windowtext 2.25pt double; padding-left: 0in; padding-bottom: 0in; border-left: medium none; padding-top: 1pt; border-bottom: medium none;">    </div> </td> <td style="border-right: #d4d0c8; border-top: #d4d0c8; border-left: #d4d0c8; border-bottom: #d4d0c8; background-color: transparent;" width="0">    </td> </tr> </table> </div> Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed primarily by using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the shorter of the estimated useful lives of the improvements or the term of the lease, including renewals determined to be reasonably assured. We expense routine maintenance and repairs when incurred. We capitalize major replacements and improvements. We remove the cost of assets sold or retired and the related accumulated depreciation or amortization from the accounts and include any resulting gain or loss in income from continuing operations. We recognize a liability for the fair value of our conditional asset retirement obligations, which are primarily related to asbestos removal, when incurred if the liability’s fair value can be reasonably estimated. Capitalized Software Costs We capitalize costs associated with the acquisition or development of major software for internal use in other assets in our Consolidated Balance Sheets and amortize the asset over the expected useful life of the software, generally between three and seven years. We only capitalize subsequent additions, modifications or upgrades to internal-use software to the extent that such changes allow the software to perform a task it previously did not perform. We expense software maintenance and training costs as incurred.    Impairment of Long-Lived Assets We evaluate long-lived assets such as store property and equipment and other corporate assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. Factors considered important that could trigger an impairment review include, but are not limited to, significant underperformance relative to historical or projected future operating results and significant changes in the manner of use of the assets or our overall business strategies. Potential impairment exists if the estimated undiscounted cash flows expected to result from the use of the asset plus any net proceeds expected from disposition of the asset are less than the carrying value of the asset. The amount of the impairment loss represents the excess of the carrying value of the asset over its fair value and is included in real estate and other, net on the Consolidated Statements of Operations. For stores, we estimate fair value based on a projected discounted cash flow method using a discount rate that is considered to be commensurate with the risk inherent in our current business model.  For assets other than stores, we generally base fair value on either appraised value or projected discounted cash flows. We also take other factors into consideration, such as local market conditions, operating environment, mall performance and other trends. Leases We use a consistent lease term when calculating amortization of leasehold improvements, determining straight-line rent expense and determining classification of leases as either operating or capital. For purposes of recognizing incentives, premiums, rent holidays and minimum rental expenses on a straight-line basis over the terms of the leases, we use the date of initial possession to begin amortization, which is generally when we enter the property and begin to make improvements in preparation of its intended use. Renewal options determined to be reasonably assured are also included in the lease term. Some leases require additional payments based on sales and are recorded in rent expense when the contingent rent is probable. Some of our lease agreements contain developer/tenant allowances. Upon receipt of such allowances, we record a deferred rent liability in other liabilities on the Consolidated Balance Sheets. The allowances are then amortized on a straight-line basis over the remaining terms of the corresponding leases as a reduction of rent expense. Retirement-Related Benefits Since 2007, we have recognized the funded status – the difference between the fair value of plan assets and the plan’s benefit obligation – of our defined benefit pension and postretirement plans directly on the balance sheet. Each overfunded plan is recognized as an asset and each underfunded plan is recognized as a liability. We adjust other comprehensive income/(loss) to reflect prior service cost or credits and actuarial gain or loss amounts arising during the period and reclassification adjustments for amounts being recognized as components of net periodic pension/postretirement cost, net of tax.  Other comprehensive income/(loss) is amortized over the average remaining service period, a period of about seven years for the primary plan. We measure the plan assets and obligations annually at the adopted measurement date of January 31 to determine pension expense for the subsequent year.  In 2008 in accordance with new pension accounting guidance, we transitioned to a year-end measurement date of January 31 for our defined benefit pension and other postretirement plans and completed a new measurement of plan assets and benefit obligations as of the beginning and end of 2008. The factors and assumptions affecting the measurement are the characteristics of the population and salary increases, with the most important being the expected return on plan assets and the discount rate for the pension obligation.  We use actuarial calculations for the assumptions, which require significant judgment. Beginning in 2009, the fair values of plan assets are presented annually in accordance with recent Financial Accounting Standards Board (FASB) guidance.  Fair value measurement of the primary plan’s level 2 investments was performed using NAV per share as a practical expedient allowed under recent FASB guidance on investments in certain entities that calculate NAV. Exit or Disposal Activity Costs Costs associated with exit or disposal activities are recorded at their fair values when a liability has been incurred. Reserves are established at the time of closure for the present value of any remaining operating lease obligations (PVOL), net of estimated sublease income, and at the point of decision for severance and other exit costs. Since we have an established program for termination benefits upon a reduction in force or the closing of a facility, termination benefits paid under the existing program are considered part of an ongoing benefit arrangement and are recorded when payment of the benefits is considered probable and reasonably estimable. Stock-Based Compensation We record compensation expense for time-vested awards on a straight-line basis over the associates’ service period, to the earlier of the retirement eligibility date, if the grant contains provisions such that the award becomes fully vested upon retirement, or the stated vesting period (the non-substantive vesting period approach). See Note 14 for a full discussion of our stock-based compensation. </div></div></div> </div> 1) Nature of Operations and Summary of Significant Accounting Policies Nature of Operations JCPenney was founded by James Cash Penney in 1902 and has grown to false false false Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Staff Position (FSP) -Number FAS140-4 and FIN46(R)-8 -Paragraph 8, C1, C7 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 51 -Paragraph 2-6 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 94-6 -Paragraph 10 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 46R -Paragraph 4, 14, 15 false false 1 2 false UnKnown UnKnown UnKnown false true