Stock-Based Compensation
 12 Months Ended
Jan. 31, 2015
Share-based Compensation [Abstract]  
Stock-Based Compensation
Stock-Based Compensation 
We grant stock-based compensation awards to employees and non-employee directors under our equity compensation plan. On May 16, 2014, our stockholders approved the J. C. Penney Company, Inc. 2014 Long-Term Incentive Plan (2014 Plan), which has a fungible share design in which each stock option will count as one share issued and each stock award will count as two shares issued. The 2014 Plan reserved 16 million shares or 32 million options for future grants and will terminate on May 31, 2019.  In addition, shares underlying any outstanding stock award or stock option grant canceled prior to vesting or exercise become available for use under the 2014 Plan. On May 21, 2014, the Company also approved an equity inducement award plan (2014 Equity Inducement Plan) which reserved 750,000 restricted stock units to grant to an incoming executive officer of the Company. Our prior 2012 Long-Term Incentive Plan (2012 Plan) terminated on May 16, 2014, except for outstanding awards, and all subsequent awards have been granted under the 2014 Plan or the 2014 Equity Inducement Plan. Under the terms of the 2014 Plan, all grants made after January 31, 2014 reduce the shares available for grant under the 2014 Plan. As of January 31, 2015, a maximum of 23.2 million shares of stock were available for future grant under the 2014 Plan.

Our stock option and restricted stock award grants have averaged about 2.3% of outstanding stock over the past three years. Authorized shares of the Company's common stock are used to settle the exercise of stock options, granting of restricted shares and vesting of restricted stock units.
 
Stock-based Compensation Cost
The components of total stock-based compensation costs are as follows:
($ in millions)
2014
 
2013
 
2012
Stock awards
$
20

 
$
14

 
$
33

Stock options
13

 
14

 
17

Total stock-based compensation(1)
$
33

 
$
28

 
$
50

 
 
 
 
 
 
Total income tax benefit recognized for stock-based compensation arrangements
$
—

 
$
—

 
$
19


(1)
Excludes $3 million, $18 million and $11 million for 2014, 2013 and 2012, respectively, of stock-based compensation costs reported in restructuring and management transition charges (Note 15).

Stock Options  
The following table summarizes stock option activity during the year ended January 31, 2015:  
 
 
Shares (in thousands)
 
Weighted - Average Exercise Price Per Share
 
Weighted - Average Remaining Contractual Term (in years)
 
Aggregate Intrinsic Value ($ in millions)(1) 
Outstanding at February 1, 2014
 
14,029

 
$
36

 
 
 
 
Granted(2)
 
2,507

 
8

 
 
 
 
Exercised
 
—

 
—

 
 
 
 
Forfeited/canceled
 
(1,961
)
 
33

 
 
 
 
Outstanding at January 31, 2015
 
14,575

 
32

 
4.4
 
$
—

Exercisable at January 31, 2015
 
10,527

 
39

 
2.9
 
$
—

 
(1)
The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option at year end. As of January 31, 2015, all outstanding stock options had an exercise price above the closing price of JCPenney common stock of $7.27.
(2)
All stock options granted during 2014 had a market condition related to achieving and maintaining a 50% or more increase in the Company's stock price over the grant date closing price for 20 consecutive days. The market condition must be met within four years of the grant date.
     
If all outstanding options were exercised, common stock outstanding would increase by 4.8%.  

Cash proceeds, tax benefits and intrinsic value related to total stock options exercised are provided in the following table:
($ in millions)
 
2014
 
2013
 
2012
Proceeds from stock options exercised
 
$
—

 
$
7

 
$
71

Intrinsic value of stock options exercised
 
—

 
2

 
38

Tax benefit related to stock-based compensation
 
—

 
—

 
15

Excess tax benefits realized on stock-based compensation
 
—

 
—

 
12


 
As of January 31, 2015, we had $11 million of unrecognized and unearned compensation expense, net of estimated forfeitures, for stock options not yet vested, which will be recognized as expense over the remaining weighted-average vesting period of approximately two years.
 
Our weighted-average fair value of stock options at grant date was $3.78 in 2014, $7.15 in 2013 and $11.49 in 2012. We used the Monte Carlo simulation model in 2014 and the binomial lattice valuation model in 2013 and 2012 to determine the fair value of the stock options granted using the following assumptions:
 
 
2014
 
2013
 
2012
Weighted-average expected option term
 
4.1 years
 
4.3 years
 
4.8 years
Weighted-average expected volatility
 
60.00%
 
62.00%
 
45.30%
Weighted-average risk-free interest rate
 
1.60%
 
0.64%
 
0.87%
Weighted-average expected dividend yield
 
—%
 
—%
 
1.40%
Expected dividend yield range
 
—%
 
—%
 
2.0% – 2.1%

 
Stock Awards
The following table summarizes our non-vested stock awards activity during the year ended January 31, 2015:  
 
Time-Based Stock Awards
 
Performance-Based Stock Awards
(shares in thousands)
Number of Units
 
Weighted-Average Grant Date Fair Value
 
Number of Units
 
Weighted-Average Grant Date Fair Value
Non-vested at February 1, 2014
1,357

 
$
23

 
73

 
$
7

Granted
6,289

 
8

 
497

 
6

Vested
(460
)
 
18

 
(37
)
 
7

Forfeited/canceled
(417
)
 
12

 
—

 
—

Non-vested at January 31, 2015
6,769

 
10

 
533

 
7


 
As of January 31, 2015, we had $46 million of unrecognized compensation expense related to unearned employee stock awards, which will be recognized over the remaining weighted-average vesting period of approximately two years. The aggregate market value of shares vested during 2014, 2013 and 2012 was $4 million, $25 million and $26 million, respectively, compared to an aggregate grant date fair value of $9 million, $42 million and $29 million, respectively.

In addition to the grants above, on March 20, 2014, we granted approximately 2.3 million phantom units as part of our management incentive compensation plan, which are similar to RSUs in that the number of units granted was based on the price of our stock, but the units will be settled in cash based on the value of our stock on the vesting date, limited to $16.72 per phantom unit. The fair value of the awards is remeasured at each reporting period and was $7.27 per share as of January 31, 2015. Compensation expense, which is variable, is recognized over the vesting period with a corresponding liability, which is recorded in Other liabilities in our unaudited Interim Consolidated Balance Sheets, of $6 million as of January 31, 2015.