X
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended January 28, 2017
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the Transition period from ____________ to ___________
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Wisconsin
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39-1630919
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin
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53051
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $.01 Par Value
|
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
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None
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 4A.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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F-1
|
Fiscal Year
|
Ended
|
Number of
Weeks
|
2016
|
January 28, 2017
|
52
|
2015
|
January 30, 2016
|
52
|
2014
|
January 31, 2015
|
52
|
•
|
Committee charters of our Board of Directors’ Audit Committee, Compensation Committee and Governance & Nominating Committee
|
•
|
Corporate Governance Guidelines
|
•
|
Code of Ethics
|
•
|
Corporate Social Responsibility Report
|
Number of Stores by State
|
||||||||
Mid-Atlantic Region:
|
|
Northeast Region:
|
|
South Central Region:
|
|
|||
Delaware
|
5
|
|
Connecticut
|
22
|
|
Arkansas
|
8
|
|
Maryland
|
23
|
|
Maine
|
5
|
|
Kansas
|
12
|
|
Pennsylvania
|
50
|
|
Massachusetts
|
25
|
|
Louisiana
|
8
|
|
Virginia
|
31
|
|
New Hampshire
|
11
|
|
Missouri
|
27
|
|
West Virginia
|
7
|
|
New Jersey
|
37
|
|
Oklahoma
|
11
|
|
Total Mid-Atlantic
|
116
|
|
New York
|
51
|
|
Texas
|
84
|
|
Midwest Region:
|
|
Rhode Island
|
3
|
|
Total South Central
|
150
|
|
|
Illinois
|
67
|
|
Vermont
|
2
|
|
West Region:
|
|
|
Indiana
|
39
|
|
Total Northeast
|
156
|
|
Alaska
|
1
|
|
Iowa
|
18
|
|
Southeast Region:
|
|
Arizona
|
26
|
|
|
Michigan
|
46
|
|
Alabama
|
14
|
|
California
|
116
|
|
Minnesota
|
27
|
|
Florida
|
51
|
|
Colorado
|
24
|
|
Nebraska
|
7
|
|
Georgia
|
32
|
|
Idaho
|
5
|
|
North Dakota
|
4
|
|
Kentucky
|
17
|
|
Montana
|
3
|
|
Ohio
|
58
|
|
Mississippi
|
5
|
|
Nevada
|
12
|
|
South Dakota
|
4
|
|
North Carolina
|
30
|
|
New Mexico
|
5
|
|
Wisconsin
|
41
|
|
South Carolina
|
16
|
|
Oregon
|
11
|
|
Total Midwest
|
311
|
|
Tennessee
|
20
|
|
Utah
|
12
|
|
|
|
Total Southeast
|
185
|
|
Washington
|
19
|
|
|
|
|
|
|
Wyoming
|
2
|
|
||
|
|
|
|
Total West
|
236
|
|
Store Type
|
Location
|
Ownership
|
||||||
Prototype
|
969
|
|
Strip centers
|
777
|
|
Owned
|
412
|
|
Small
|
185
|
|
Community & regional malls
|
83
|
|
Leased
|
505
|
|
|
|
|
Freestanding
|
294
|
|
Ground leased
|
237
|
|
|
Year
Opened
|
Square
Footage
|
|
Store distribution centers:
|
|
|
|
Findlay, Ohio
|
1994
|
780,000
|
|
Winchester, Virginia
|
1997
|
420,000
|
|
Blue Springs, Missouri
|
1999
|
540,000
|
|
Corsicana, Texas
|
2001
|
540,000
|
|
Mamakating, New York
|
2002
|
605,000
|
|
San Bernardino, California
|
2002
|
575,000
|
|
Macon, Georgia
|
2005
|
560,000
|
|
Patterson, California
|
2006
|
360,000
|
|
Ottawa, Illinois
|
2008
|
328,000
|
|
On-line fulfillment centers:
|
|
|
|
Monroe, Ohio
|
2001
|
1,200,000
|
|
San Bernardino, California
|
2010
|
970,000
|
|
Edgewood, Maryland
|
2011
|
1,450,000
|
|
DeSoto, Texas
|
2012
|
1,200,000
|
|
Plainfield, Indiana
|
Expected 2017
|
936,000
|
|
|
2016
|
2015
|
||||||||||
|
High
|
Low
|
Dividend
|
High
|
Low
|
Dividend
|
||||||
Fourth Quarter
|
$59.43
|
$39.00
|
$0.50
|
$50.86
|
$42.85
|
$0.45
|
||||||
Third Quarter
|
46.15
|
|
37.70
|
|
0.50
|
|
61.60
|
|
44.06
|
|
0.45
|
|
Second Quarter
|
45.07
|
|
34.49
|
|
0.50
|
|
74.51
|
|
61.17
|
|
0.45
|
|
First Quarter
|
51.13
|
|
39.69
|
|
0.50
|
|
79.07
|
|
61.44
|
|
0.45
|
|
Company / Index
|
Jan 28,
2012 |
Feb 2,
2013 |
Feb 1,
2014 |
Jan 31,
2015 |
Jan 30,
2016 |
Jan 28,
2017 |
||||||
Kohl’s Corporation
|
$100.00
|
$101.27
|
$114.50
|
$138.87
|
$119.39
|
$97.81
|
||||||
S&P 500 Index
|
100.00
|
|
117.61
|
|
141.49
|
|
161.61
|
|
160.54
|
|
194.04
|
|
Peer Group Index
|
100.00
|
|
120.64
|
|
133.20
|
|
170.06
|
|
160.37
|
|
148.61
|
|
Period
|
Total
Number
of Shares
Purchased
During
Period
|
Average
Price
Paid Per
Share
|
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (Dollars in Millions)
|
||||||
October 30 – November 26, 2016
|
498,349
|
|
|
$43.60
|
|
495,607
|
|
|
$2,000
|
|
November 27 – December 31, 2016
|
378,960
|
|
50.53
|
|
356,899
|
|
1,982
|
|
||
January 1 – January 28, 2017
|
1,865,261
|
|
41.14
|
|
1,847,000
|
|
1,906
|
|
||
Total
|
2,742,570
|
|
|
$42.88
|
|
2,699,506
|
|
|
$1,906
|
|
(Dollars in Millions, Except per Share and per Square Foot Data)
|
2016
|
2015
|
2014
|
2013
|
2012 (e)
|
||||||||||
Net sales
|
|
|
|
|
|
||||||||||
Dollars
|
$
|
18,686
|
|
$
|
19,204
|
|
$
|
19,023
|
|
$
|
19,031
|
|
$
|
19,279
|
|
Net sales increase (decrease)
|
(2.7
|
)%
|
1.0
|
%
|
0.0
|
%
|
(1.3
|
)%
|
2.5
|
%
|
|||||
Comparable sales (a)
|
(2.4
|
)%
|
0.7
|
%
|
(0.3
|
)%
|
(1.2
|
)%
|
0.3
|
%
|
|||||
Per selling square foot (b)
|
$
|
224
|
|
$
|
228
|
|
$
|
226
|
|
$
|
227
|
|
$
|
231
|
|
Gross margin
|
|
|
|
|
|
||||||||||
Dollars
|
$
|
6,742
|
|
$
|
6,939
|
|
$
|
6,925
|
|
$
|
6,944
|
|
$
|
6,990
|
|
As a percent of sales
|
36.1%
|
|
36.1%
|
|
36.4%
|
|
36.5%
|
|
36.3%
|
|
|||||
Selling, general and administrative expenses
|
|
|
|
|
|
||||||||||
Dollars
|
$
|
4,435
|
|
$
|
4,452
|
|
$
|
4,350
|
|
$
|
4,313
|
|
$
|
4,267
|
|
As a percent of sales
|
23.7%
|
|
23.2
|
%
|
22.9%
|
|
22.7%
|
|
22.1
|
%
|
|||||
Operating income
|
|
|
|
|
|
||||||||||
Dollars
|
|
|
|
|
|
||||||||||
Reported (GAAP)
|
$
|
1,183
|
|
$
|
1,553
|
|
$
|
1,689
|
|
$
|
1,742
|
|
$
|
1,890
|
|
Excluding non-recurring items (Non-GAAP) (c)
|
$
|
1,369
|
|
$
|
1,553
|
|
$
|
1,689
|
|
$
|
1,742
|
|
$
|
1,890
|
|
As a percent of sales
|
|
|
|
|
|
||||||||||
Reported (GAAP)
|
6.3%
|
|
8.1
|
%
|
8.9%
|
|
9.2%
|
|
9.8%
|
|
|||||
Excluding non-recurring items (Non-GAAP) (c)
|
7.3%
|
|
8.1
|
%
|
8.9%
|
|
9.2%
|
|
9.8%
|
|
|||||
Net income
|
|
|
|
|
|
||||||||||
Reported (GAAP)
|
$
|
556
|
|
$
|
673
|
|
$
|
867
|
|
$
|
889
|
|
$
|
986
|
|
Excluding non-recurring items (Non-GAAP) (c)
|
$
|
673
|
|
$
|
781
|
|
$
|
867
|
|
$
|
889
|
|
$
|
986
|
|
Diluted earnings per share
|
|
|
|
|
|
||||||||||
Reported (GAAP)
|
$
|
3.11
|
|
$
|
3.46
|
|
$
|
4.24
|
|
$
|
4.05
|
|
$
|
4.17
|
|
Excluding non-recurring items (Non-GAAP) (c)
|
$
|
3.76
|
|
$
|
4.01
|
|
$
|
4.24
|
|
$
|
4.05
|
|
$
|
4.17
|
|
Dividends per share
|
$
|
2.00
|
|
$
|
1.80
|
|
$
|
1.56
|
|
$
|
1.40
|
|
$
|
1.28
|
|
Balance sheet
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
13,574
|
|
$
|
13,606
|
|
$
|
14,333
|
|
$
|
14,228
|
|
$
|
13,761
|
|
Working capital
|
$
|
2,273
|
|
$
|
2,362
|
|
$
|
2,721
|
|
$
|
2,412
|
|
$
|
2,061
|
|
Long-term debt
|
$
|
2,795
|
|
$
|
2,792
|
|
$
|
2,780
|
|
$
|
2,777
|
|
$
|
2,478
|
|
Capital lease and financing obligations
|
$
|
1,816
|
|
$
|
1,916
|
|
$
|
1,968
|
|
$
|
2,069
|
|
$
|
2,061
|
|
Shareholders’ equity
|
$
|
5,177
|
|
$
|
5,491
|
|
$
|
5,991
|
|
$
|
5,978
|
|
$
|
6,048
|
|
Cash flow
|
|
|
|
|
|
||||||||||
Cash flow from operations
|
$
|
2,148
|
|
$
|
1,474
|
|
$
|
2,024
|
|
$
|
1,884
|
|
$
|
1,265
|
|
Capital expenditures
|
$
|
768
|
|
$
|
690
|
|
$
|
682
|
|
$
|
643
|
|
$
|
785
|
|
Free cash flow (d)
|
$
|
1,264
|
|
$
|
671
|
|
$
|
1,234
|
|
$
|
1,127
|
|
$
|
381
|
|
Return on average shareholders’ equity
|
|
|
|
|
|
||||||||||
Reported (GAAP)
|
10.6%
|
|
11.8
|
%
|
14.7%
|
|
14.8%
|
|
15.8
|
%
|
|||||
Excluding non-recurring items (Non-GAAP) (c)
|
12.5%
|
|
13.5
|
%
|
14.7%
|
|
14.8%
|
|
15.8
|
%
|
|||||
Kohl's store information
|
|
|
|
|
|
||||||||||
Number of stores
|
1,154
|
|
1,164
|
|
1,162
|
|
1,158
|
|
1,146
|
|
|||||
Total square feet of selling space (in thousands)
|
82,757
|
|
83,810
|
|
83,750
|
|
83,671
|
|
83,098
|
|
(a)
|
Comparable sales include sales for stores (including relocated or remodeled stores), which were open during both the current and prior year periods. We also include on-line sales in our comparable sales. Fiscal 2013 compares the 52 weeks ended February 1, 2014 and February 2, 2013. Fiscal 2012 compares the 52 weeks ended January 26, 2013 and January 28, 2012.
|
(b)
|
Net sales per selling square foot includes on-line sales and stores open for the full current period. 2012 excludes the impact of the 53rd week.
|
(c)
|
Non-recurring items include $186 million ($117 million, net of tax) of impairments, store closing, and other costs in 2016, and $169 million ($108 million, net of tax) of debt extinguishment losses in 2015. See GAAP to Non-GAAP reconciliation in Results of Operations.
|
(d)
|
Free cash flow is a non-GAAP financial measure which we define as net cash provided by operating activities and proceeds from financing obligations less capital expenditures and capital lease and financing obligation payments. See GAAP to Non-GAAP reconciliation in Liquidity and Capital Resources.
|
(e)
|
Fiscal 2012 was a 53-week year. During the 53rd week, total sales were $169 million; selling, general and administrative expenses were approximately $30 million; interest was approximately $2 million; net income was approximately $15 million and diluted earnings per share was approximately $0.06.
|
•
|
Inventory per store decreased 5%.
|
•
|
Gross margin as a percentage of sales decreased 6 basis points to 36.1% driven by fewer promotional markdowns which were offset by higher shipping costs.
|
•
|
Sales, general and administrative expenses ("SG&A") decreased $17 million on strong expense management against the lower sales volume.
|
|
Including 53rd Week
|
Excluding 53rd Week
|
Net sales
|
Decrease (1.3) - Increase 0.7%
|
Decrease (2) - 0%
|
Comparable sales
|
Decrease (2) - 0%
|
Decrease (2) - 0%
|
Gross margin as a percent of sales
|
Increase 10 - 15 bps
|
Increase 10 - 15 bps
|
Selling, general and administrative expenses
|
Increase 0.5 - 2%
|
Increase 0 - 1.5%
|
Depreciation and amortization
|
$960 million
|
$960 million
|
Interest expense, net
|
$300 million
|
$297 million
|
Effective tax rate
|
37.5%
|
37.5%
|
Earnings per diluted share
|
$3.50 - $3.80
|
$3.40 - $3.70
|
Capital expenditures
|
$700 million
|
$700 million
|
Share repurchases
|
$350 million
|
$350 million
|
•
|
Stores increase on-line sales by providing customers opportunities to view, touch and/or try on physical merchandise before ordering on-line.
|
•
|
On-line purchases can easily be returned in our stores.
|
•
|
Kohl's Cash coupons and Yes2You rewards can be earned and redeemed on-line or in store regardless of where they were earned.
|
•
|
In-store customers can order from on-line kiosks in our stores.
|
•
|
Buy on-line and pick-up in store is available in all stores.
|
•
|
Customers who utilize our mobile app while in the store may receive mobile coupons to use when they check out.
|
•
|
On-line orders may be shipped from a dedicated on-line fulfillment center, a store, a retail distribution center, direct ship vendors or any combination of the above.
|
•
|
More than 75% of our on-line customers also shop in our stores.
|
|
2016
|
2015
|
Change
|
|||||
Net sales (in Millions)
|
$
|
18,686
|
|
$
|
19,204
|
|
(2.7
|
)%
|
Net sales per selling square foot (a)
|
$
|
224
|
|
$
|
228
|
|
(1.8
|
)%
|
Selling price per unit
|
1.5
|
%
|
Units per transaction
|
1.6
|
|
Average transaction value
|
3.1
|
|
Number of transactions
|
(5.5
|
)
|
Comparable sales
|
(2.4
|
)%
|
(Dollars in Millions)
|
2016
|
2015
|
Change
|
||||||
Gross margin
|
$
|
6,742
|
|
$
|
6,939
|
|
$
|
(197
|
)
|
As a percent of net sales
|
36.1
|
%
|
36.1
|
%
|
6 bp
|
|
(Dollars in Millions)
|
2016
|
2015
|
Change
|
||||||
SG&A
|
$
|
4,435
|
|
$
|
4,452
|
|
$
|
(17
|
)
|
As a percent of net sales
|
23.7
|
%
|
23.2
|
%
|
55 bp
|
|
(Dollars in Millions)
|
2016
|
2015
|
Change
|
||||||
Depreciation and amortization
|
$
|
938
|
|
$
|
934
|
|
$
|
4
|
|
Interest expense, net
|
308
|
|
327
|
|
(19
|
)
|
|||
Impairments, store closing and other costs
|
186
|
|
—
|
|
186
|
|
|||
Provision for income taxes
|
319
|
|
384
|
|
(65
|
)
|
|||
Effective tax rate
|
36.5
|
%
|
36.3
|
%
|
27 bp
|
|
|
2016
|
||||||||
|
Income before Taxes
|
Net Income
|
Earnings per Diluted Share
|
||||||
(Dollars in Millions, Except per Share Data)
|
|||||||||
GAAP
|
$
|
875
|
|
$
|
556
|
|
$
|
3.11
|
|
Impairments, store closing and other costs
|
186
|
|
117
|
|
0.65
|
|
|||
Adjusted (Non-GAAP)
|
$
|
1,061
|
|
$
|
673
|
|
$
|
3.76
|
|
|
2015
|
2014
|
Change
|
|||||
Net sales (in Millions)
|
$
|
19,204
|
|
$
|
19,023
|
|
1.0
|
%
|
Net sales per selling square foot (a)
|
$
|
228
|
|
$
|
226
|
|
0.9
|
%
|
Selling price per unit
|
1.3
|
%
|
Units per transaction
|
(0.4
|
)
|
Average transaction value
|
0.9
|
|
Number of transactions
|
(0.2
|
)
|
Comparable sales
|
0.7
|
%
|
(Dollars in Millions)
|
2015
|
2014
|
Change
|
||||||
Gross margin
|
$
|
6,939
|
|
$
|
6,925
|
|
$
|
14
|
|
As a percent of net sales
|
36.1
|
%
|
36.4
|
%
|
(27) bp
|
|
(Dollars in Millions)
|
2015
|
2014
|
Change
|
||||||
SG&A
|
$
|
4,452
|
|
$
|
4,350
|
|
$
|
102
|
|
As a percent of net sales
|
23.2
|
%
|
22.9
|
%
|
(32) bp
|
|
(Dollars in Millions)
|
2015
|
2014
|
Change
|
||||||
Depreciation and amortization
|
$
|
934
|
|
$
|
886
|
|
$
|
48
|
|
Interest expense, net
|
327
|
|
340
|
|
(13
|
)
|
|||
Loss on extinguishment of debt
|
169
|
|
—
|
|
169
|
|
|||
Provision for income taxes
|
384
|
|
482
|
|
(98
|
)
|
|||
Effective tax rate
|
36.3
|
%
|
35.7
|
%
|
(60) bp
|
|
|
2015
|
||||||||
|
Income before Taxes
|
Net Income
|
Earnings per Diluted Share
|
||||||
(Dollars in Millions, Except per Share Data)
|
|||||||||
GAAP
|
$
|
1,057
|
|
$
|
673
|
|
$
|
3.46
|
|
Loss on extinguishment of debt
|
169
|
|
108
|
|
0.55
|
|
|||
Adjusted (Non-GAAP)
|
$
|
1,226
|
|
$
|
781
|
|
$
|
4.01
|
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Cash and cash equivalents
|
$
|
1,074
|
|
$
|
707
|
|
$
|
1,407
|
|
Net cash provided by (used in):
|
|
|
|
||||||
Operating activities
|
$
|
2,148
|
|
$
|
1,474
|
|
$
|
2,024
|
|
Investing activities
|
(756
|
)
|
(681
|
)
|
(593
|
)
|
|||
Financing activities
|
(1,025
|
)
|
(1,493
|
)
|
(995
|
)
|
|
2017
Estimate
|
2016
|
2015
|
2014
|
||||
Information technology
|
50
|
%
|
46
|
%
|
44
|
%
|
45
|
%
|
Store strategies
|
20
|
|
28
|
|
36
|
|
33
|
|
Base capital
|
30
|
|
26
|
|
20
|
|
22
|
|
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
|
Moody’s
|
Standard & Poor’s
|
Fitch
|
Long-term debt
|
Baa2
|
BBB-
|
BBB
|
|
(a) Non-GAAP financial measure
|
|
2016
|
2015
|
2014
|
Debt/capitalization
|
47.2%
|
46.3%
|
44.3%
|
Adjusted Debt to Adjusted EBITDAR (a)
|
2.65
|
2.52
|
2.45
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Net cash provided by operating activities
|
$
|
2,148
|
|
$
|
1,474
|
|
$
|
2,024
|
|
Acquisition of property and equipment
|
(768
|
)
|
(690
|
)
|
(682
|
)
|
|||
Capital lease and financing obligation payments
|
(127
|
)
|
(114
|
)
|
(114
|
)
|
|||
Proceeds from financing obligations
|
11
|
|
1
|
|
6
|
|
|||
Free cash flow
|
$
|
1,264
|
|
$
|
671
|
|
$
|
1,234
|
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Operating income
|
$
|
1,183
|
|
$
|
1,553
|
|
$
|
1,689
|
|
Depreciation and amortization
|
938
|
|
934
|
|
886
|
|
|||
Rent expense
|
276
|
|
279
|
|
277
|
|
|||
EBITDAR
|
$
|
2,397
|
|
$
|
2,766
|
|
$
|
2,852
|
|
Average: (a)
|
|
|
|
||||||
Total assets
|
$
|
13,584
|
|
$
|
14,288
|
|
$
|
14,286
|
|
Cash equivalents and long-term investments (b)
|
(476
|
)
|
(703
|
)
|
(647
|
)
|
|||
Other assets
|
(35
|
)
|
(40
|
)
|
(32
|
)
|
|||
Accumulated depreciation and amortization
|
6,558
|
|
6,203
|
|
5,743
|
|
|||
Accounts payable
|
(1,515
|
)
|
(1,623
|
)
|
(1,624
|
)
|
|||
Accrued liabilities
|
(1,188
|
)
|
(1,175
|
)
|
(1,119
|
)
|
|||
Other long-term liabilities
|
(620
|
)
|
(556
|
)
|
(551
|
)
|
|||
Capitalized rent (c)
|
2,654
|
|
2,672
|
|
2,667
|
|
|||
Gross Investment (“AGI”)
|
$
|
18,962
|
|
$
|
19,066
|
|
$
|
18,723
|
|
Return on Assets (“ROA”)
(d)
|
4.1
|
%
|
4.7
|
%
|
6.1
|
%
|
|||
Return on Gross Investment (“ROI”)
(e)
|
12.6
|
%
|
14.5
|
%
|
15.2
|
%
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Total Debt (net of discount)
|
$
|
4,626
|
|
$
|
4,726
|
|
$
|
4,761
|
|
Rent x 8
|
2,208
|
|
2,232
|
|
2,216
|
|
|||
Adjusted Debt
|
$
|
6,834
|
|
$
|
6,958
|
|
$
|
6,977
|
|
Total Equity
|
$
|
5,177
|
|
$
|
5,491
|
|
$
|
5,991
|
|
Adjusted EBITDAR as calculated above
|
$
|
2,583
|
|
$
|
2,766
|
|
$
|
2,852
|
|
Debt/capitalization
(a)
|
47.2
|
%
|
46.3
|
%
|
44.3
|
%
|
|||
Adjusted Debt to Adjusted EBITDAR
(b)
|
2.65
|
|
2.52
|
|
2.45
|
|
|
Maturing in:
|
||||||||||||||
(Dollars in Millions)
|
Total
|
2017
|
2018
and
2019
|
2020
and
2021
|
2022
and
after
|
||||||||||
Recorded contractual obligations:
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
2,815
|
|
$
|
—
|
|
$
|
—
|
|
$
|
650
|
|
$
|
2,165
|
|
Capital lease and financing obligations
|
1,345
|
|
123
|
|
225
|
|
194
|
|
803
|
|
|||||
|
4,160
|
|
123
|
|
225
|
|
844
|
|
2,968
|
|
|||||
Unrecorded contractual obligations:
|
|
|
|
|
|
||||||||||
Interest payments:
|
|
|
|
|
|
||||||||||
Long-term debt
|
1,716
|
|
132
|
|
263
|
|
263
|
|
1,058
|
|
|||||
Capital lease and financing obligations
|
2,300
|
|
163
|
|
302
|
|
266
|
|
1,569
|
|
|||||
Operating leases (a)
|
5,309
|
|
253
|
|
503
|
|
486
|
|
4,067
|
|
|||||
Other (b)
|
1,075
|
|
294
|
|
322
|
|
225
|
|
234
|
|
|||||
|
10,400
|
|
842
|
|
1,390
|
|
1,240
|
|
6,928
|
|
|||||
Total
|
$
|
14,560
|
|
$
|
965
|
|
$
|
1,615
|
|
$
|
2,084
|
|
$
|
9,896
|
|
•
|
Expected lease term
—Our expected lease term includes both contractual lease periods and cancelable option periods where failure to exercise such options would result in an economic penalty. The expected lease term is used in determining whether the lease is accounted for as an operating lease or a capital lease. A lease is considered a capital lease if the lease term exceeds 75% of the leased asset’s useful life. The expected lease term is also used in determining the depreciable life of the asset or the straight-line rent recognition period. Increasing the expected lease term will increase the probability that a lease will be considered a capital lease and will generally result in higher rent expense for an operating lease and higher interest and depreciation expenses for a leased property recorded on our balance sheet.
|
•
|
Incremental borrowing rate
—We estimate our incremental borrowing rate using treasury rates for debt with maturities comparable to the expected lease term and our credit spread. The incremental borrowing rate is primarily used in determining whether the lease is accounted for as an operating lease or a capital lease. A lease is considered a capital lease if the net present value of the lease payments is greater than 90% of the fair market value of the property. Increasing the incremental borrowing rate decreases the net present value of the lease payments and reduces the probability that a lease will be considered a capital lease. For leases which are recorded on our balance sheet with a related capital lease or financing obligation, the incremental borrowing rate is also used in allocating our rental payments between interest expense and a reduction of the outstanding obligation.
|
•
|
Fair market value of leased asset
—The fair market value of leased retail property is generally estimated based on comparable market data as provided by third-party appraisers or consideration received from the landlord. Fair market value is used in determining whether the lease is accounted for as an operating lease or a capital lease. A lease is considered a capital lease if the net present value of the lease payments is greater than 90% of the fair market value of the property. Increasing the fair market value reduces the probability that a lease will be considered a capital lease. Fair market value is also used in determining the amount of property and related financing obligation to be recognized on our balance sheet for certain leased properties which are considered owned for accounting purposes.
|
|
|
|
|
|
Kohl’s Corporation
|
|
|
|
|
By:
|
/
S
/ K
EVIN
M
ANSELL
|
|
|
Kevin Mansell
|
|
|
Chairman, Chief Executive Officer, President and Director
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/S/ W
ESLEY S.
M
C
D
ONALD
|
|
|
Wesley S. McDonald
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
/
S
/ K
EVIN
M
ANSELL
Kevin Mansell
Chairman, President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
|
|
|
|
/
S
/ P
ETER
B
ONEPARTH
Peter Boneparth
Director
|
|
/
S
/ J
ONAS
P
RISING
Jonas Prising
Director
|
|
|
|
/
S
/ S
TEVEN
A. B
URD
Steven A. Burd
Director
|
|
/
S
/ S
TEPHANIE
A. S
TREETER
Stephanie A. Streeter
Director
|
|
|
|
/
S
/ Adrianne Shapira
Adrianne Shapira
Director
|
|
/
S
/ N
INA
G
.
V
ACA
Nina G. Vaca
Director
|
|
|
|
/
S
/ J
OHN
E. S
CHLIFSKE
John E. Schlifske
Director
|
|
/
S
/ S
TEPHEN
E. W
ATSON
Stephen E. Watson
Director
|
|
|
|
/
S
/ F
RANK
V. S
ICA
Frank V. Sica
Director
|
|
|
|
|
|
|
|
|
Exhibit
Number
|
|
Description
|
3.1
|
|
Amended and Restated Articles of Incorporation of the Company, incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 16, 2011.
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of the Company, incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on November 13, 2015.
|
|
|
|
4.1
|
|
Amended and Restated Credit Agreement dated as of July 1, 2015 by and among the Company, the Lenders party thereto, Bank of America, N.A., as Administrative Agent, an Issuing Bank and a Swing Line Lender, U.S. Bank National Association and Wells Fargo Bank, National Association, as Issuing Banks, Swing Line Lenders and Syndication Agents, Morgan Stanley Senior Funding, Inc., as Documentation Agent, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, U.S. Bank National Association and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Bookrunners, incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed on July 2, 2015.
|
|
|
|
4.2
|
|
Certain other long-term debt is described in Note 3 of the Notes to Consolidated Financial Statements. The Company agrees to furnish to the Commission, upon request, copies of any instruments defining the rights of holders of any such long-term debt described in Note 3 and not filed herewith.
|
|
|
|
10.1(a)
|
|
Form of Chief Executive Officer Restricted Stock Agreement Pursuant to the Kohl's Corporation 2010 Long Term Compensation Plan, incorporated herein by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2016.*
|
|
|
|
10.1(b)
|
|
Private Label Credit Card Program Agreement dated as of August 11, 2010 by and between Kohl’s Department Stores, Inc. and Capital One, National Association, incorporated herein by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2010.
|
|
|
|
10.1(c)
|
|
Amendment to Private Label Credit Card Program Agreement dated as of May 13, 2014 by and between Kohl's Department Stores, Inc. and Capital One, National Association, incorporated herein by reference to Exhibit 10.2 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2014.
|
|
|
|
10.2
|
|
Amended and Restated Executive Deferred Compensation Plan, incorporated herein by reference to Exhibit 10.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2003.*
|
|
|
|
10.3
|
|
Kohl’s Corporation 2005 Deferred Compensation Plan, as amended and restated effective January 1, 2005, incorporated herein by reference to Exhibit 10.4 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2006.*
|
|
|
|
10.4
|
|
Summary of Executive Medical Plan, incorporated herein by reference to Exhibit 10.6 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005.*
|
|
|
|
10.5
|
|
Summary of Executive Life and Accidental Death and Dismemberment Plans, incorporated herein by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005.*
|
|
|
|
10.6
|
|
Kohl’s Corporation Annual Incentive Plan, incorporated herein by reference to Annex B to the Proxy Statement on Schedule 14A filed on March 24, 2016 in connection with the Company’s 2016 Annual Meeting of Shareholders.*
|
|
|
Exhibit
Number
|
|
Description
|
10.7
|
|
1994 Long-Term Compensation Plan, incorporated herein by reference to Exhibit 10.15 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 4, 1996.*
|
|
|
|
10.8
|
|
1997 Stock Option Plan for Outside Directors, incorporated herein by reference to Exhibit 4.4 of the Company’s registration statement on Form S-8 (File No. 333-26409), filed on May 2, 1997.*
|
|
|
|
10.9
|
|
Amended and Restated 2003 Long-Term Compensation Plan, incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 2, 2008.*
|
|
|
|
10.10
|
|
Kohl’s Corporation 2010 Long Term Compensation Plan, incorporated herein by reference to Annex A to the Proxy Statement on Schedule 14A filed on March 24, 2016 in connection with the Company’s 2016 Annual Meeting.*
|
|
|
|
10.11
|
|
Form of Executive Performance Share Agreement pursuant to the Kohl’s Corporation 2010 Long Term Compensation Plan, incorporated herein by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed on January 15, 2014.*
|
|
|
|
10.12
|
|
Form of Executive Stock Option Agreement pursuant to the Kohl's Corporation 2010 Long Term Compensation Plan, incorporated herein by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended May 1, 2010.*
|
|
|
|
10.13(a)
|
|
Form of Executive Restricted Stock Agreement pursuant to the Kohl’s Corporation 2010 Long Term Compensation Plan (5-year vesting), incorporated herein by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 1, 2010.*
|
|
|
|
10.13(b)
|
|
Form of Executive Restricted Stock Agreement pursuant to the Kohl’s Corporation 2010 Long Term Compensation Plan (4-year vesting), incorporated herein by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on January 15, 2014.*
|
|
|
|
10.13(c)
|
|
Form of Executive Restricted Stock Agreement pursuant to the Kohl’s Corporation 2010 Long Term Compensation Plan (2-year vesting), incorporated herein by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2014.*
|
|
|
|
10.14
|
|
Form of Outside Director Stock Option Agreement pursuant to the Kohl’s Corporation 2010 Long Term Compensation Plan, incorporated herein by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 1, 2010.*
|
|
|
|
10.15
|
|
Form of Outside Director Restricted Stock Agreement pursuant to the Kohl’s Corporation 2010 Long Term Compensation Plan, incorporated herein by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 1, 2010.*
|
|
|
|
10.16
|
|
Summary of Outside Director Compensation.*
|
|
|
|
10.17
|
|
Amended and Restated Employment Agreement between Kohl’s Corporation and Kohl’s Department Stores, Inc. and Kevin Mansell dated as of November 14, 2014, incorporated herein by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed on November 14, 2014.*
|
|
|
|
10.18
|
|
Amended and Restated Employment Agreement between Kohl’s Department Stores, Inc. and Kohl’s Corporation and Michelle Gass effective as of June 10, 2015, incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on June 12, 2015.*
|
|
|
|
|
|
Page
|
Consolidated Financial Statements
|
|
F-2
|
|
F-3
|
|
F-4
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-7
|
|
2. Impairments, Store Closing and Other Costs
|
|
3
. Debt
|
|
5
. Benefit Plan
s
|
|
F-16
|
|
F-17
|
|
F-20
|
|
F-20
|
(Dollars in Millions)
|
January 28,
2017 |
January 30,
2016 |
||||
Assets
|
|
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
1,074
|
|
$
|
707
|
|
Merchandise inventories
|
3,795
|
|
4,038
|
|
||
Other
|
378
|
|
331
|
|
||
Total current assets
|
5,247
|
|
5,076
|
|
||
Property and equipment, net
|
8,103
|
|
8,308
|
|
||
Other assets
|
224
|
|
222
|
|
||
Total assets
|
$
|
13,574
|
|
$
|
13,606
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
||||
Current liabilities:
|
|
|
||||
Accounts payable
|
$
|
1,507
|
|
$
|
1,251
|
|
Accrued liabilities
|
1,224
|
|
1,206
|
|
||
Income taxes payable
|
112
|
|
130
|
|
||
Current portion of capital lease and financing obligations
|
131
|
|
127
|
|
||
Total current liabilities
|
2,974
|
|
2,714
|
|
||
Long-term debt
|
2,795
|
|
2,792
|
|
||
Capital lease and financing obligations
|
1,685
|
|
1,789
|
|
||
Deferred income taxes
|
272
|
|
257
|
|
||
Other long-term liabilities
|
671
|
|
563
|
|
||
Shareholders’ equity:
|
|
|
||||
Common stock - 371 and 370 million shares issued
|
4
|
|
4
|
|
||
Paid-in capital
|
3,003
|
|
2,944
|
|
||
Treasury stock, at cost, 197 and 184 million shares
|
(10,338
|
)
|
(9,769
|
)
|
||
Accumulated other comprehensive loss
|
(14
|
)
|
(17
|
)
|
||
Retained earnings
|
12,522
|
|
12,329
|
|
||
Total shareholders’ equity
|
5,177
|
|
5,491
|
|
||
Total liabilities and shareholders’ equity
|
$
|
13,574
|
|
$
|
13,606
|
|
(Dollars in Millions, Except per Share Data)
|
2016
|
2015
|
2014
|
||||||
Net sales
|
$
|
18,686
|
|
$
|
19,204
|
|
$
|
19,023
|
|
Cost of merchandise sold
|
11,944
|
|
12,265
|
|
12,098
|
|
|||
Gross margin
|
6,742
|
|
6,939
|
|
6,925
|
|
|||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
4,435
|
|
4,452
|
|
4,350
|
|
|||
Depreciation and amortization
|
938
|
|
934
|
|
886
|
|
|||
Impairments, store closing and other costs
|
186
|
|
—
|
|
—
|
|
|||
Operating income
|
1,183
|
|
1,553
|
|
1,689
|
|
|||
Interest expense, net
|
308
|
|
327
|
|
340
|
|
|||
Loss on extinguishment of debt
|
—
|
|
169
|
|
—
|
|
|||
Income before income taxes
|
875
|
|
1,057
|
|
1,349
|
|
|||
Provision for income taxes
|
319
|
|
384
|
|
482
|
|
|||
Net income
|
$
|
556
|
|
$
|
673
|
|
$
|
867
|
|
Net income per share:
|
|
|
|
||||||
Basic
|
$
|
3.12
|
|
$
|
3.48
|
|
$
|
4.28
|
|
Diluted
|
$
|
3.11
|
|
$
|
3.46
|
|
$
|
4.24
|
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Net income
|
$
|
556
|
|
$
|
673
|
|
$
|
867
|
|
Other comprehensive income, net of tax:
|
|
|
|
||||||
Reclassification adjustment for interest expense on interest rate
derivatives included in net income
|
3
|
|
3
|
|
3
|
|
|||
Unrealized gains on investments
|
—
|
|
—
|
|
11
|
|
|||
Other comprehensive income
|
3
|
|
3
|
|
14
|
|
|||
Comprehensive income
|
$
|
559
|
|
$
|
676
|
|
$
|
881
|
|
(Dollars in Millions, Except per Share Data)
|
Common Stock
|
Paid-In Capital
|
Treasury Stock
|
Accumulated Other Comprehensive Loss
|
Retained Earnings
|
|
||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Total
|
||||||||||||||||
Balance at February 1, 2014
|
364
|
|
$
|
4
|
|
$
|
2,598
|
|
(153
|
)
|
$
|
(8,052
|
)
|
$(34)
|
$
|
11,462
|
|
$
|
5,978
|
|
Comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14
|
867
|
|
881
|
|
|||||
Stock options and awards, net of tax
|
3
|
|
—
|
|
145
|
|
(1
|
)
|
(19
|
)
|
—
|
—
|
|
126
|
|
|||||
Dividends paid ($1.56 per common share)
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
—
|
(321
|
)
|
(317
|
)
|
|||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
(12
|
)
|
(677
|
)
|
—
|
—
|
|
(677
|
)
|
|||||
Balance at January 31, 2015
|
367
|
|
4
|
|
2,743
|
|
(166
|
)
|
(8,744
|
)
|
(20)
|
12,008
|
|
5,991
|
|
|||||
Comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
673
|
|
676
|
|
|||||
Stock options and awards, net of tax
|
3
|
|
—
|
|
201
|
|
(1
|
)
|
(27
|
)
|
—
|
—
|
|
174
|
|
|||||
Dividends paid ($1.80 per common share)
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
—
|
(352
|
)
|
(349
|
)
|
|||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
(17
|
)
|
(1,001
|
)
|
—
|
—
|
|
(1,001
|
)
|
|||||
Balance at January 30, 2016
|
370
|
|
4
|
|
2,944
|
|
(184
|
)
|
(9,769
|
)
|
(17)
|
12,329
|
|
5,491
|
|
|||||
Comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
556
|
|
559
|
|
|||||
Stock options and awards, net of tax
|
1
|
|
—
|
|
59
|
|
—
|
|
(17
|
)
|
—
|
—
|
|
42
|
|
|||||
Dividends paid ($2.00 per common share)
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
—
|
(363
|
)
|
(358
|
)
|
|||||
Treasury stock purchases
|
—
|
|
—
|
|
—
|
|
(13
|
)
|
(557
|
)
|
—
|
—
|
|
(557
|
)
|
|||||
Balance at January 28, 2017
|
371
|
|
$
|
4
|
|
$
|
3,003
|
|
(197
|
)
|
$
|
(10,338
|
)
|
$(14)
|
$
|
12,522
|
|
$
|
5,177
|
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
556
|
|
$
|
673
|
|
$
|
867
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
938
|
|
934
|
|
886
|
|
|||
Share-based compensation
|
41
|
|
48
|
|
48
|
|
|||
Excess tax benefits from share-based compensation
|
(5
|
)
|
(10
|
)
|
(3
|
)
|
|||
Deferred income taxes
|
13
|
|
(38
|
)
|
49
|
|
|||
Other non-cash expenses, net
|
30
|
|
24
|
|
31
|
|
|||
Loss on extinguishment of debt
|
—
|
|
169
|
|
—
|
|
|||
Impairments, store closing and other costs
|
57
|
|
—
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
||||||
Merchandise inventories
|
249
|
|
(215
|
)
|
68
|
|
|||
Other current and long-term assets
|
(45
|
)
|
43
|
|
(30
|
)
|
|||
Accounts payable
|
256
|
|
(260
|
)
|
146
|
|
|||
Accrued and other long-term liabilities
|
81
|
|
53
|
|
30
|
|
|||
Income taxes
|
(23
|
)
|
53
|
|
(68
|
)
|
|||
Net cash provided by operating activities
|
2,148
|
|
1,474
|
|
2,024
|
|
|||
Investing activities
|
|
|
|
||||||
Acquisition of property and equipment
|
(768
|
)
|
(690
|
)
|
(682
|
)
|
|||
Sales of investments in auction rate securities
|
—
|
|
—
|
|
82
|
|
|||
Other
|
12
|
|
9
|
|
7
|
|
|||
Net cash used in investing activities
|
(756
|
)
|
(681
|
)
|
(593
|
)
|
|||
Financing activities
|
|
|
|
||||||
Treasury stock purchases
|
(557
|
)
|
(1,001
|
)
|
(677
|
)
|
|||
Shares withheld for taxes on vested restricted shares
|
(17
|
)
|
(27
|
)
|
(19
|
)
|
|||
Dividends paid
|
(358
|
)
|
(349
|
)
|
(317
|
)
|
|||
Proceeds from issuance of debt, net
|
—
|
|
1,088
|
|
—
|
|
|||
Reduction of long-term borrowings
|
—
|
|
(1,085
|
)
|
—
|
|
|||
Premium paid on redemption of debt
|
—
|
|
(163
|
)
|
—
|
|
|||
Capital lease and financing obligation payments
|
(127
|
)
|
(114
|
)
|
(114
|
)
|
|||
Proceeds from stock option exercises
|
18
|
|
147
|
|
123
|
|
|||
Excess tax benefits from share-based compensation
|
5
|
|
10
|
|
3
|
|
|||
Proceeds from financing obligations
|
11
|
|
1
|
|
6
|
|
|||
Net cash used in financing activities
|
(1,025
|
)
|
(1,493
|
)
|
(995
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
367
|
|
(700
|
)
|
436
|
|
|||
Cash and cash equivalents at beginning of period
|
707
|
|
1,407
|
|
971
|
|
|||
Cash and cash equivalents at end of period
|
$
|
1,074
|
|
$
|
707
|
|
$
|
1,407
|
|
Supplemental information
|
|
|
|
||||||
Interest paid, net of capitalized interest
|
$
|
299
|
|
$
|
318
|
|
$
|
329
|
|
Income taxes paid
|
314
|
|
372
|
|
502
|
|
|||
Non-Cash investing and financing activities
|
|
|
|
||||||
Property and equipment acquired through additional liabilities
|
$
|
54
|
|
$
|
63
|
|
$
|
41
|
|
Fiscal year
|
Ended
|
Number of
Weeks
|
2016
|
January 28, 2017
|
52
|
2015
|
January 30, 2016
|
52
|
2014
|
January 31, 2015
|
52
|
(Dollars in Millions)
|
Jan 28,
2017 |
Jan 30,
2016 |
||||
Land
|
$
|
1,118
|
|
$
|
1,110
|
|
Buildings and improvements:
|
|
|
||||
Owned
|
8,004
|
|
7,999
|
|
||
Leased
|
1,801
|
|
1,848
|
|
||
Store fixtures and equipment
|
1,711
|
|
1,804
|
|
||
Computer hardware and software
|
1,939
|
|
1,590
|
|
||
Construction in progress
|
318
|
|
167
|
|
||
Total property and equipment, at cost
|
14,891
|
|
14,518
|
|
||
Less accumulated depreciation and amortization
|
(6,788
|
)
|
(6,210
|
)
|
||
Property and equipment, net
|
$
|
8,103
|
|
$
|
8,308
|
|
Buildings and improvements
|
5-40 years
|
Store fixtures and equipment
|
3-15 years
|
Computer hardware and software
|
3-8 years
|
(Dollars in Millions)
|
Jan 28,
2017 |
Jan 30,
2016 |
||||
Gift cards and merchandise return cards
|
$
|
329
|
|
$
|
323
|
|
Sales, property and use taxes
|
183
|
|
184
|
|
||
Payroll and related fringe benefits
|
147
|
|
117
|
|
||
Accrued capital
|
102
|
|
64
|
|
||
Marketing
|
82
|
|
77
|
|
||
Credit card liabilities
|
67
|
|
88
|
|
||
Other
|
314
|
|
353
|
|
||
Accrued liabilities
|
$
|
1,224
|
|
$
|
1,206
|
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Interest rate derivatives:
|
|
|
|
||||||
Before-tax amounts
|
$
|
5
|
|
$
|
5
|
|
$
|
5
|
|
Tax expense
|
(2
|
)
|
(2
|
)
|
(2
|
)
|
|||
After-tax amounts
|
3
|
|
3
|
|
3
|
|
|||
Unrealized gains on investments:
|
|
|
|
||||||
Before-tax amounts
|
—
|
|
—
|
|
18
|
|
|||
Tax expense
|
—
|
|
—
|
|
(7
|
)
|
|||
After-tax amounts
|
—
|
|
—
|
|
11
|
|
|||
Other comprehensive income
|
$
|
3
|
|
$
|
3
|
|
$
|
14
|
|
Level 1:
|
|
Financial instruments with unadjusted, quoted prices listed on active market exchanges.
|
|
|
|
Level 2:
|
|
Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. The prices for the financial instruments are determined using prices for recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals.
|
|
|
|
Level 3:
|
|
Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation techniques.
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Gross marketing costs
|
$
|
1,164
|
|
$
|
1,171
|
|
$
|
1,189
|
|
Vendor allowances
|
(148
|
)
|
(160
|
)
|
(165
|
)
|
|||
Net marketing costs
|
$
|
1,016
|
|
$
|
1,011
|
|
$
|
1,024
|
|
Net marketing costs as a percent of net sales
|
5.4
|
%
|
5.3
|
%
|
5.4
|
%
|
(Dollars in Millions, Except per Share Data)
|
2016
|
2015
|
2014
|
||||||
Numerator—net income
|
$
|
556
|
|
$
|
673
|
|
$
|
867
|
|
Denominator—weighted average shares
|
|
|
|
||||||
Basic
|
178
|
|
193
|
|
203
|
|
|||
Impact of dilutive employee stock options (a)
|
1
|
|
2
|
|
1
|
|
|||
Diluted
|
179
|
|
195
|
|
204
|
|
|||
Net income per share:
|
|
|
|
||||||
Basic
|
$
|
3.12
|
|
$
|
3.48
|
|
$
|
4.28
|
|
Diluted
|
$
|
3.11
|
|
$
|
3.46
|
|
$
|
4.24
|
|
(Dollars in Millions)
|
|
||
Store leases:
|
|
||
Record future obligations
|
$
|
114
|
|
Write-off net obligations
|
(21
|
)
|
|
Impairments:
|
|
||
Software licenses
|
23
|
|
|
Buildings and other store assets
|
53
|
|
|
Severance and other
|
17
|
|
|
Impairments, store closing and other costs
|
$
|
186
|
|
(Dollars in Millions)
|
Store Lease Obligations
|
Severance
|
Total
|
||||||
Charges
|
$
|
114
|
|
$
|
15
|
|
129
|
|
|
Payments
|
(11
|
)
|
(12
|
)
|
(23
|
)
|
|||
Balance at end of year
|
$
|
103
|
|
$
|
3
|
|
$
|
106
|
|
Maturity
(Dollars in Millions)
|
Effective
Rate
|
Coupon Rate
|
Outstanding
|
||||
2021
|
4.81
|
%
|
4.00
|
%
|
$
|
650
|
|
2023
|
3.25
|
%
|
3.25
|
%
|
350
|
|
|
2023
|
4.78
|
%
|
4.75
|
%
|
300
|
|
|
2025
|
4.25
|
%
|
4.25
|
%
|
650
|
|
|
2029
|
7.36
|
%
|
7.25
|
%
|
99
|
|
|
2033
|
6.05
|
%
|
6.00
|
%
|
166
|
|
|
2037
|
6.89
|
%
|
6.88
|
%
|
150
|
|
|
2045
|
5.57
|
%
|
5.55
|
%
|
450
|
|
|
|
4.88
|
%
|
|
|
$
|
2,815
|
|
(Dollars in Millions)
|
Capital Lease and Financing Obligations
|
Operating
Leases
|
||||
Fiscal year:
|
|
|
||||
2017
|
$
|
286
|
|
$
|
253
|
|
2018
|
272
|
|
254
|
|
||
2019
|
255
|
|
249
|
|
||
2020
|
238
|
|
245
|
|
||
2021
|
222
|
|
241
|
|
||
Thereafter
|
2,372
|
|
4,067
|
|
||
|
3,645
|
|
$
|
5,309
|
|
|
Non-cash gain on future sale of property
|
471
|
|
|
|||
Amount representing interest
|
(2,300
|
)
|
|
|||
Present value of lease payments
|
$
|
1,816
|
|
|
(Dollars in Millions)
|
Jan 28,
2017 |
Jan 30,
2016 |
||||
Deferred tax liabilities:
|
|
|
||||
Property and equipment
|
$
|
1,226
|
|
$
|
1,319
|
|
Merchandise inventories
|
95
|
|
—
|
|
||
Total deferred tax liabilities
|
1,321
|
|
1,319
|
|
||
Deferred tax assets:
|
|
|
||||
Capital lease and financing obligations
|
711
|
|
752
|
|
||
Accrued and other liabilities, including stock-based compensation
|
194
|
|
151
|
|
||
Accrued step rent liability
|
111
|
|
106
|
|
||
Federal benefit on state tax reserves
|
47
|
|
45
|
|
||
Unrealized loss on interest rate swap
|
9
|
|
11
|
|
||
Merchandise inventories
|
—
|
|
24
|
|
||
Total deferred tax assets
|
1,072
|
|
1,089
|
|
||
Net deferred tax liability
|
$
|
249
|
|
$
|
230
|
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Current federal
|
$
|
272
|
|
$
|
397
|
|
$
|
400
|
|
Current state
|
25
|
|
34
|
|
36
|
|
|||
Deferred federal
|
16
|
|
(35
|
)
|
48
|
|
|||
Deferred state
|
6
|
|
(12
|
)
|
(2
|
)
|
|||
Provision for income taxes
|
$
|
319
|
|
$
|
384
|
|
$
|
482
|
|
|
2016
|
2015
|
2014
|
|||
Federal statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
State income taxes, net of federal tax benefit
|
2.4
|
|
2.1
|
|
1.3
|
|
Other federal tax credits
|
(0.9
|
)
|
(0.8
|
)
|
(0.6
|
)
|
Effective tax rate
|
36.5
|
%
|
36.3
|
%
|
35.7
|
%
|
(Dollars in Millions)
|
2016
|
2015
|
||||
Balance at beginning of year
|
$
|
139
|
|
$
|
123
|
|
Increases due to:
|
|
|
||||
Tax positions taken in prior years
|
3
|
|
16
|
|
||
Tax positions taken in current year
|
15
|
|
19
|
|
||
Decreases due to:
|
|
|
||||
Tax positions taken in prior years
|
—
|
|
(6
|
)
|
||
Settlements with taxing authorities
|
(6
|
)
|
(10
|
)
|
||
Lapse of applicable statute of limitations
|
(2
|
)
|
(3
|
)
|
||
Balance at end of year
|
$
|
149
|
|
$
|
139
|
|
|
2016
|
2015
|
2014
|
||||||||||||
(Shares in Thousands)
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Exercise
Price
|
|||||||||
Balance at beginning of year
|
3,076
|
|
$
|
52.65
|
|
6,211
|
|
$
|
52.95
|
|
11,375
|
|
$
|
56.05
|
|
Granted
|
—
|
|
—
|
|
—
|
|
—
|
|
186
|
|
54.69
|
|
|||
Exercised
|
(410
|
)
|
46.86
|
|
(2,815
|
)
|
52.79
|
|
(2,647
|
)
|
46.87
|
|
|||
Forfeited/expired
|
(316
|
)
|
55.39
|
|
(320
|
)
|
57.36
|
|
(2,703
|
)
|
72.21
|
|
|||
Balance at end of year
|
2,350
|
|
$
|
53.29
|
|
3,076
|
|
$
|
52.65
|
|
6,211
|
|
$
|
52.95
|
|
(Shares in Thousands)
|
Stock Options Outstanding
|
Stock Options Exercisable
|
||||||||||
Range of Exercise Prices
|
Shares
|
Weighted
Average
Remaining
Contractual
Life (in
years)
|
Weighted
Average
Exercise
Price
|
Shares
|
Weighted
Average
Remaining
Contractual
Life (in
years)
|
Weighted
Average
Exercise
Price
|
||||||
$ 41.08 – $ 50.00
|
831
|
|
2.4
|
$
|
47.76
|
|
623
|
|
2.3
|
$
|
47.79
|
|
$ 50.01 – $ 60.00
|
1,170
|
|
1.6
|
53.26
|
|
1,026
|
|
1.3
|
53.25
|
|
||
$ 60.01 – $ 77.62
|
349
|
|
0.3
|
66.56
|
|
349
|
|
0.3
|
66.56
|
|
||
Balance at end of year
|
2,350
|
|
1.7
|
$
|
53.29
|
|
1,998
|
|
1.4
|
$
|
53.88
|
|
|
2016
|
2015
|
2014
|
||||||||||||
(Shares in Thousands)
|
Shares
|
Weighted
Average
Grant
Date Fair
Value
|
Shares
|
Weighted
Average
Grant
Date Fair
Value
|
Shares
|
Weighted
Average
Grant
Date Fair
Value
|
|||||||||
Balance at beginning of year
|
2,211
|
|
$
|
57.37
|
|
2,431
|
|
$
|
52.29
|
|
2,653
|
|
$
|
50.56
|
|
Granted
|
1,128
|
|
46.61
|
|
955
|
|
65.02
|
|
910
|
|
56.13
|
|
|||
Vested
|
(935
|
)
|
55.54
|
|
(957
|
)
|
52.61
|
|
(818
|
)
|
50.69
|
|
|||
Forfeited
|
(241
|
)
|
55.54
|
|
(218
|
)
|
55.16
|
|
(314
|
)
|
51.47
|
|
|||
Balance at end of year
|
2,163
|
|
$
|
52.75
|
|
2,211
|
|
$
|
57.37
|
|
2,431
|
|
$
|
52.29
|
|
|
2016
|
2015
|
2014
|
||||||||||||
(Shares in Thousands)
|
Shares
|
Weighted
Average
Grant
Date Fair
Value
|
Shares
|
Weighted
Average
Grant
Date Fair
Value
|
Shares
|
Weighted
Average
Grant
Date Fair
Value
|
|||||||||
Balance at beginning of year
|
357
|
|
$
|
63.58
|
|
221
|
|
$
|
56.76
|
|
300
|
|
$
|
55.33
|
|
Granted
|
309
|
|
47.89
|
|
177
|
|
70.50
|
|
18
|
|
60.76
|
|
|||
Vested
|
—
|
|
—
|
|
—
|
|
—
|
|
(34
|
)
|
50.72
|
|
|||
Forfeited
|
(154
|
)
|
59.74
|
|
(41
|
)
|
56.71
|
|
(63
|
)
|
54.41
|
|
|||
Balance at end of year
|
512
|
|
$
|
57.82
|
|
357
|
|
$
|
63.58
|
|
221
|
|
$
|
56.76
|
|
|
2016
|
|||||||||||
(Dollars in Millions, Except per Share Data)
|
First
|
Second
|
Third
|
Fourth
|
||||||||
Net sales
|
$
|
3,972
|
|
$
|
4,182
|
|
$
|
4,327
|
|
$
|
6,205
|
|
Gross margin
|
$
|
1,412
|
|
$
|
1,650
|
|
$
|
1,607
|
|
$
|
2,072
|
|
Selling, general and administrative expenses
|
$
|
1,008
|
|
$
|
986
|
|
$
|
1,080
|
|
$
|
1,360
|
|
Impairments, store closing and other costs
|
$
|
64
|
|
$
|
128
|
|
$
|
(6
|
)
|
—
|
|
|
Net income
|
$
|
17
|
|
$
|
140
|
|
$
|
146
|
|
$
|
252
|
|
Basic shares
|
183
|
|
180
|
|
177
|
|
174
|
|
||||
Basic net income per share
|
$
|
0.09
|
|
$
|
0.77
|
|
$
|
0.83
|
|
$
|
1.45
|
|
Diluted shares
|
184
|
|
181
|
|
177
|
|
175
|
|
||||
Diluted net income per share
|
$
|
0.09
|
|
$
|
0.77
|
|
$
|
0.83
|
|
$
|
1.44
|
|
|
2015
|
|||||||||||
(Dollars in Millions, Except per Share Data)
|
First
|
Second
|
Third
|
Fourth
|
||||||||
Net sales
|
$
|
4,123
|
|
$
|
4,267
|
|
$
|
4,427
|
|
$
|
6,387
|
|
Gross margin
|
$
|
1,523
|
|
$
|
1,662
|
|
$
|
1,643
|
|
$
|
2,112
|
|
Selling, general and administrative expenses
|
$
|
1,016
|
|
$
|
1,005
|
|
$
|
1,099
|
|
$
|
1,332
|
|
Loss on extinguishment of debt
|
—
|
|
$
|
131
|
|
$
|
38
|
|
—
|
|
||
Net income
|
$
|
127
|
|
$
|
130
|
|
$
|
120
|
|
$
|
296
|
|
Basic shares
|
200
|
|
196
|
|
191
|
|
187
|
|
||||
Basic net income per share
|
$
|
0.64
|
|
$
|
0.66
|
|
$
|
0.63
|
|
$
|
1.58
|
|
Diluted shares
|
202
|
|
197
|
|
192
|
|
187
|
|
||||
Diluted net income per share
|
$
|
0.63
|
|
$
|
0.66
|
|
$
|
0.63
|
|
$
|
1.58
|
|
(1)
|
The Health Insurance Benefits being reasonably available to Company with respect to you and your eligible dependents, as the case may be; and
|
(2)
|
You or your eligible dependents, as the case may be, shall reimburse Company for all premiums paid for the Health Insurance Benefits, as determined by Company in good faith from time to time. Company shall provide a quarterly invoice for such reimbursement. The current premium for your Health Insurance Benefits is $1,208.51 per month.
|
Dated:
|
|
|
|
|
Wesley S. McDonald
|
(Dollars in Millions)
|
2016
|
2015
|
2014
|
||||||
Earnings
|
|
|
|
||||||
Income before income taxes, including non-recurring items
|
$
|
875
|
|
$
|
1,057
|
|
$
|
1,349
|
|
Fixed charges
|
484
|
|
512
|
|
524
|
|
|||
Less: Interest capitalized during period
|
(1
|
)
|
0
|
|
(2
|
)
|
|||
|
$
|
1,358
|
|
$
|
1,569
|
|
$
|
1,871
|
|
Fixed charges
|
|
|
|
||||||
Interest (expensed or capitalized)
|
$
|
309
|
|
$
|
329
|
|
$
|
342
|
|
Portion of rent expense representative of interest
|
173
|
|
181
|
|
180
|
|
|||
Amortization of deferred financing fees
|
2
|
|
2
|
|
2
|
|
|||
|
$
|
484
|
|
$
|
512
|
|
$
|
524
|
|
Ratio of earnings to fixed charges
|
2.8
|
|
3.1
|
|
3.6
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Kohl's Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
March 17, 2017
|
/s/ Kevin Mansell
|
|
|
Kevin Mansell
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Kohl's Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
March 17, 2017
|
/s/ Wesley S. McDonald
|
|
|
Wesley S. McDonald
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Chief Accounting Officer)
|
1.
|
This Annual Report on Form 10-K of the Company for the annual period ended
January 28, 2017
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
That the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
March 17, 2017
|
/s/ Kevin Mansell
|
|
|
Kevin Mansell
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
1.
|
This Annual Report on Form 10-K of the Company for the annual period ended
January 28, 2017
(the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
That the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated:
|
March 17, 2017
|
/s/ Wesley S. McDonald
|
|
|
Wesley S. McDonald
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Chief Accounting Officer)
|