Kohl's (KSS) 10-Q 4 Sep 09 2010 Q2 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Aug. 01, 2009	Jan. 31, 2009	Aug. 02, 2008
Current assets:
Cash	$221	$167	$217
Short-term investments	1,133	509	71
Merchandise inventories	2,724	2,799	2,718
Deferred income taxes	72	74	72
Other	131	151	134
Total current assets	4,281	3,700	3,212
Property and equipment, net	7,142	6,984	6,951
Long-term investments	325	332	391
Favorable lease rights, net	196	201	202
Goodwill	9	9	9
Other assets	106	108	111
Total assets	12,059	11,334	10,876
Current liabilities:
Accounts payable	1,153	881	1,023
Accrued liabilities	873	812	820
Income taxes payable	59	105	78
Current portion of capital leases	16	17	14
Total current liabilities	2,101	1,815	1,935
Long-term debt and capital leases	2,053	2,053	2,050
Deferred income taxes	333	320	279
Other long-term liabilities	436	407	379
Shareholders' equity:
Common stock	4	4	4
Paid-in capital	2,000	1,971	1,935
Treasury stock, at cost, 46 shares at August 1, 2009, January 31, 2009 and August 2, 2008	(2,639)	(2,638)	(2,638)
Accumulated other comprehensive loss	(45)	(46)	(20)
Retained earnings	7,816	7,448	6,952
Total shareholders' equity	7,136	6,739	6,233
Total liabilities and shareholders' equity	$12,059	$11,334	$10,876

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
Share data in Millions	Aug. 01, 2009	Jan. 31, 2009	Aug. 02, 2008
Treasury stock, shares	46	46	46

Statement Of Income

Statement Of Income (USD $)
In Millions, except Per Share data	3 Months Ended Aug. 01, 2009	3 Months Ended Aug. 02, 2008	6 Months Ended Aug. 01, 2009	6 Months Ended Aug. 02, 2008
Net sales	$3,806	$3,725	$7,445	$7,350
Cost of merchandise sold (exclusive of depreciation shown separately below)	2,286	2,250	4,556	4,540
Gross margin	1,520	1,475	2,889	2,810
Operating expenses:
Selling, general, and administrative	966	930	1,927	1,852
Depreciation and amortization	144	133	285	263
Preopening expenses	11	6	26	17
Operating income	399	406	651	678
Interest expense, net	31	26	62	53
Income before income taxes	368	380	589	625
Provision for income taxes	139	144	221	236
Net income	$229	$236	$368	$389
Basic:
Basic	0.76	0.77	1.21	1.27
Average number of shares	305	306	305	307
Diluted:
Diluted	0.75	0.77	1.2	1.26
Average number of shares	306	307	306	308

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions		Common Stock Amount	Paid-In Capital	Treasury Stock	Accumulated Other Comprehensive Income [Member]	Retained Earnings	Total
Beginning Balance at Jan. 31, 2009		$4	$1,971	($2,638)	($46)	$7,448	$6,739
Beginning Balance at Jan. 31, 2009	351
Net income						368	368
Other comprehensive income:
Unrealized gain on investments, net of tax					1		1
Share-based compensation			30				30
Exercise of stock options and other	1
Exercise of stock options and other			4				4
Net income tax impact from exercise of stock options			(5)				(5)
Treasury stock purchases				(1)			(1)
Ending Balance at Aug. 01, 2009	352
Ending Balance at Aug. 01, 2009		4	2,000	(2,639)	(45)	7,816	7,136
Beginning Balance at May. 02, 2009		4
Other comprehensive income:
Ending Balance at Aug. 01, 2009		$4

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	3 Months Ended Aug. 01, 2009	3 Months Ended Aug. 02, 2008	6 Months Ended Aug. 01, 2009	6 Months Ended Aug. 02, 2008
Operating activities
Net income	$229	$236	$368	$389
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including debt discount and deferred financing fees	144	133	285	263
Share-based compensation			27	23
Deferred income taxes			15	28
Other non-cash revenues and expenses			36	14
Changes in operating assets and liabilities:
Merchandise inventories			77	139
Other current and long-term assets			18	(4)
Accounts payable			272	190
Accrued and other long-term liabilities			(36)	(118)
Income taxes			(50)	(50)
Net cash provided by operating activities			1,012	874
Investing activities
Acquisition of property and equipment and favorable lease rights			(336)	(558)
Net purchases of short-term investments			(624)	(40)
Purchases of long-term investments			0	(53)
Sales of long-term investments			8	77
Other			(1)	3
Net cash used in investing activities			(953)	(571)
Financing activities
Capital lease payments			(8)	(6)
Treasury stock purchases			(1)	(262)
Proceeds from stock option exercises			4	1
Net cash used in financing activities			(5)	(267)
Net increase in cash			54	36
Cash at beginning of period			167	181
Cash at end of period	221	217	221	217
Supplemental information:
Interest paid, net of capitalized interest			67	77
Income taxes paid			$260	$257

Notes to Financial Statements

Notes to Financial Statements
	6 Months Ended Aug. 01, 2009 USD / shares
Notes to Financial Statements [Abstract]
1.Basis of Presentation	1. Basis of Presentation The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for fiscal year end financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and related footnotes included in our Form 10-K (Commission File No.1-11084) filed with the Securities and Exchange Commission. Due to the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year. In addition, quarterly results of operations depend significantly upon the timing and amount of sales and costs associated with the opening of new stores. We operate as a single business unit.
2.Debt	2. Debt Long-term debt consists of the following: Maturing Weighted Average Effective Rate August1, 2009 January31, 2009 August2, 2008 (Dollars in Millions) Non-callable and unsecured senior debt: 2011 6.59 % $ 400 $ 400 $ 400 2017 6.31 % 650 650 650 2029 7.36 % 200 200 200 2033 6.05 % 300 300 300 2037 6.89 % 350 350 350 Total senior debt 6.55 % 1,900 1,900 1,900 Capital lease obligations 176 177 171 Unamortized debt discount (7 ) (7 ) (7 ) Less current portion (16 ) (17 ) (14 ) Long-term debt and capital leases $ 2,053 $ 2,053 $ 2,050 Based on quoted market prices (Level 1per SFAS No.157, Fair Value Measurements), the estimated fair value of our senior debt was approximately $1.9 billion at August1, 2009.
3.Share-Based Compensation	3. Share-Based Compensation We grant share-based compensation, including options to purchase shares of our common stock and nonvested stock, pursuant to various plans. Annual grants of stock options and nonvested stock are generally made to eligible employees in the first quarter of the fiscal year. Grants to newly-hired and promoted employees and other discretionary grants are made periodically throughout the remainder of the year. The Black-Scholes option valuation model was used to estimate the fair value of each option award during the first six months of the respective fiscal year based on the following assumptions: 2009 2008 Volatility 42.8 % 36.6 % Risk-free interest rate 1.8 % 2.5 % Expected life in years 5.4 5.3 Dividend yield 0 % 0 % Weighted-average fair value at grant date $ 17.12 $ 15.96 The following table summarizes our stock option activity for the first six months of 2009 and 2008: 2009 2008 Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price (Shares in Thousands) Balance at beginning of year 19,134 $ 53.01 17,313 $ 55.79 Granted 2,785 41.65 2,592 43.03 Forfeited/expired (521 ) 56.49 (770 ) 59.21 Exercised (92 ) 38.15 (35 ) 38.87 Balance at end of quarter 21,306 $ 51.50 19,100 $ 53.95 The following table summarizes our nonvested stock activity for the first six months of 2009 and 2008: 2009 2008 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value (Shares in Thousands) Balance at beginning of year 276 $ 54.39 150 $ 69.98 Granted 661 41.63 61 42.89 Vested (60 ) 60.64 (48 ) 65.46 Balance at end of quarter 877 $ 44.35 163 $ 61.22 Total share-based compensation expense was $16 million for the three months ended August1, 2009 and $15 million for the three months ended August2, 2008. Total share-based compensation expense was $27 million for the six months ended August1, 2009 and $23 million for the six months ended August2, 2008. Total unrecognized share-based compensation expense for all share-based payment plans was $148 million at August1, 2009, of which approximately $34 million is expected to be recognized in the remainder of 2009, $54 million in 2010, $30 million in 2011, $16 million in 2012, $12 million in 2013 and $2 million in 2014. Future compensation expense may be impacted by future grants, changes in forfeiture estimates and/or actual forfeitures which differ from estimated forfeitures.
4.Long-Term Investments	4. Long-Term Investments As of August1, 2009 we had long-term investments in auction rate securities (ARS) with a par value of $399 million and a fair value of $325 million. ARS are long-term debt instruments with interest rates reset through periodic short-term auctions. Our ARS mature at various dates between 2015 and 2056. The weighted-average remaining maturity of our ARS portfolio is approximately 27 years. Our ARS portfolio consists entirely of highly-rated, insured student loan backed securities. Substantially all of the principal and interest is insured by the federal government and the remainder is insured by various insurance companies. As of August1, 2009, $195 million of our ARS (at fair value) were rated AAA by Moodys, Standard Poors and/or Fitch Ratings. The remaining ARS investments have ratings equivalent to the Standard Poors AA and A ratings. As a result of persistent failed auctions since February 2008 and the resulting uncertainty of when these investments could be successfully liquidated at par, we have recorded all of our ARS as Long-term Investments within the Condensed Consolidated Balance Sheets. We intend to hold these ARS until their fair value once again equals their par value and, based on other sources of liquidity, do not believe we will be required to sell them before recovery of par value. Therefore, impairment charges are considered temporary and have been included in Accumulated Other Comprehensive Loss within our Condensed Consolidated Balance Sheets. The following table presents a rollforward of our ARS, all of which are measured at fair value on a recurring basis using unobservable inputs (Level 3per SFAS No.157, Fair Value Measurements): (In millions) Balance as of January31, 2009 $ 332 Sales (at par) (8 ) Unrealized gain on sale 1 Balance as of August1, 2009 $ 325
5.Contingencies	5. Contingencies We are involved in various legal matters arising in the normal course of business. In the opinion of management, the outcome of such proceedings and litigation will not have a material adverse impact on our consolidated financial statements.
6.Net Income Per Share	6. Net Income Per Share The calculations of the numerator and denominator for basic and diluted net income per share are summarized as follows: Three Months Ended Six Months Ended August1, 2009 August2, 2008 August1, 2009 August2, 2008 (In Millions) Numerator - net income $ 229 $ 236 $ 368 $ 389 Denominator - weighted average shares: Basic 305 306 305 307 Impact of dilutive employee stock options and non-vested stock(a) 1 1 1 1 Diluted 306 307 306 308 (a)Excludes 18million options for the three months ended August1, 2009, 19million options for the six months ended August1, 2009 and 16million options for both the three and six months ended August2, 2008 as the impact of such options was antidilutive.
7.New Accounting Pronouncements	7. New Accounting Pronouncements In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No.157, Fair Value Measurements (SFAS No.157). SFAS No.157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. We adopted the required portions of this statement in fiscal 2008. The remaining portions of this statement, which are related to non-financial assets and liabilities, were adopted without material impact in the first quarter of 2009. In April 2009, the FASB also issued FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which requires disclosures about the fair value of financial instruments for interim reporting periods as well as in annual financial statements. The fair value of our debt is reported in Note 2, Debt, and the fair value of our long-term investments is reported in Note 4, Long-Term Investments. During the first quarter of 2009, we also adopted the provisions of FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, and FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments, without material impact on our financial statements. In February 2007, the FASB issued SFAS No.159, The Fair Value Option for Financial Assets and Financial Liabilities Including an amendment of FASB Statement No.115. This standard permits entities to measure many financial instruments and certain other items at fair value. As of August1, 2009, we have not, and do not expect to, elect the fair value option for any eligible financial asset or liability. We adopted SFAS No.165, Subsequent Events (SFAS No.165) during the quarter ended August1, 2009.This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). We reviewed events for inclusion in the financial statements through the time that the accompanying financial statements were filed with the Securities and Exchange Commission. In June 2009, the FASB issued SFAS No.168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (GAAP) (SFAS No.168). SFAS No.168 replaces FASB Statement No.162, The Hierarchy of Generally Accepted Accounting Principles, and establishes the FASB Accounting Standards Codification (Codification) as the source of authoritative accounting principles recognized by the FASB in the preparation of financial statements in conformity with GAAP. The Codification supersedes all previously-existing non-SEC accounting and reporting standards.Rules and interpretive releases of the SEC under authority of federal securities laws will continue to be sources of authoritative GAAP for SEC registrants.We will begin to use the new guidelines and numbering system prescribed by the Codification when referring to GAAP in our Quarterly Report on Form 10-Q for the period ending October31, 200

Document Information

Document Information
	6 Months Ended Aug. 01, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Amendment Description	N.A.
Document Period End Date	2009-08-01

Entity Information

Entity Information (USD $)
	6 Months Ended Aug. 01, 2009	Aug. 28, 2009	Aug. 02, 2008
Entity [Text Block]
Trading Symbol	KSS
Entity Registrant Name	KOHLS CORPORATION
Entity Central Index Key	0000885639
Current Fiscal Year End Date	--01-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		305,582,208
Entity Public Float			$12,822,000,000