JCPenney's Capital Repositioning Progressing

Business Wire, Sept 30, 2004

PLANO, Texas -- J. C. Penney Company, Inc. (NYSE:JCP) today updated the status of its recently announced capital structure repositioning program.

Robert Cavanaugh, Executive Vice President and Chief Financial Officer said, "We are pleased that our equity repurchase and debt reduction programs are proceeding according to plan. To date we have repurchased 18.3 million shares of common stock for $695 million representing 23% of our $3 billion program, and approximately $1 billion of outstanding debt has been retired during 2004."

At the end of October 2004, the Company anticipates calling its $650 million aggregate principal amount of 5% Convertible Subordinated Notes Due October 2008. These Notes are convertible into 22.8 million shares of common stock. If the Company's stock price continues to exceed the conversion price of $29.20 per share, including the call premium, it is expected that virtually all holders of such Notes will convert to common stock. Assuming such call, the redemption would occur during November 2004.

J. C. Penney Corporation, Inc., the wholly-owned operating subsidiary of the Company, is one of America's largest department store, catalog, and e-commerce retailers, employing approximately 150,000 associates. As of July 31, 2004, J. C. Penney Corporation, Inc. operated 1,018 JCPenney department stores throughout the United States and Puerto Rico, and 60 Renner department stores in Brazil. JCPenney Catalog, including e-commerce, is the nation's largest catalog merchant of general merchandise, and JCPenney.com is one of the largest apparel and home furnishings sites on the Internet. J. C. Penney Corporation, Inc. is a contributor to JCPenney Afterschool Fund, a charitable organization committed to providing children with high quality after school programs to help them reach their full potential.

This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which reflect the Company's current views of future events and financial performance, involve known and unknown risks and uncertainties that may cause the Company's actual results to be materially different from planned or expected results. Those risks and uncertainties include, but are not limited to, competition, consumer demand, seasonality, economic conditions, and government activity. Investors should take such risks into account when making investment decisions. In addition, non-GAAP terms referenced, such as EBITDA and free cash flow, are defined and presented in the Company's 2003 Annual Report on Form 10-K.