Kohl's 2007 Annual Report Download - page 18

The management of Kohl’s Corporation is responsible for the integrity
and objectivity of the fi nancial and operating information contained in
this Annual Report, including the consolidated fi nancial statements
covered by the Report of Independent Registered Public Accounting
Firm. These statements were prepared in conformity with U.S.
generally accepted accounting principles and include amounts that
are based on the best estimates and judgments of management.
We remain committed to managing our business both ethically
and responsibly and to representing the best interest of our
shareholders through good corporate governance. After thorough
review by its Governance and Nominating Committee, the Board
of Directors believes Kohl’s is in full compliance with all applicable
corporate governance rules of the Securities and Exchange
Commission (SEC) and the New York Stock Exchange (NYSE).
Accordingly, in 2007, Kohl’s provided the NYSE with an unqualifi ed
Annual CEO Certifi cation of Compliance, and has fi led with the
SEC, as an exhibit to our Annual Report on Form 10-K for the
fi scal year 2007, the Sarbanes-Oxley Act Section 302 certifi cation
regarding the quality of the company’s public disclosure.
The consolidated fi nancial statements and related notes have
been audited by Ernst & Young LLP, independent registered public
accounting fi rm, whose report is based on audits conducted in
accordance with the standards of the Public Company Accounting
Oversight Board (United States). The Company’s consolidated
fi nancial statements, including the Report of Independent Registered
Public Accounting Firm, are included in the Company’s Form 10-K
for the year ended February 2, 2008.
The Audit Committee of the Board of Directors is composed of
four independent Directors. The Committee is responsible for
assisting the Board in its oversight of Kohl’s fi nancial accounting
and reporting practices. The Audit Committee is directly
responsible for the compensation, appointment and oversight
of the Company’s independent registered public accounting fi rm.
The Audit Committee meets periodically with the independent
registered public accounting fi rm, as well as with management, to
review accounting, auditing, internal accounting control and fi nancial
reporting matters. The independent registered public accounting
fi rm has unrestricted access to the Audit Committee.
LARRY MONTGOMERY
Chairman and Chief Executive Officer
Financial Summary
FISCAL YEAR 2007 2006 2005 2004 2003
Summary of Operations (In millions, except per share amounts)
Net sales $ 16,474 $ 15,597 $ 13,444 $ 11,740 $ 10,312
Gross margin 6,014 5,675 4,780 4,129 3,406
Selling, general and administrative expenses 3,697 3,423 2,981 2,599 2,169
Depreciation and amortization 452 388 339 288 239
Preopening expenses 61 49 44 49 47
Operating income 1,804 1,815 1,416 1,193 951
Interest expense, net 62 41 70 63 73
Income before income taxes 1,742 1,774 1,346 1,130 878
Net income 1,084 1,109 842 703 546
Earnings per Diluted Share $ 3.39 $ 3.31 $ 2.43 $ 2.04 $ 1.59
Financial Position Data (Dollars in millions)
Working capital $ 1,952 $ 1,482 $ 2,520 $ 2,187 $ 1,902
Property and equipment, net 6,510 5,353 4,616 4,063 3,390
Tot al assets 10,560 9,034 9,146 7,973 6,684
Long-term debt and capital leases 2,052 1,040 1,046 1,103 1,076
Shareholders’ equity 6,102 5,603 5,957 5,034 4,212
Return on average shareholders’ equity 18.5% 19.2% 15.3% 15.2% 14.1%
Operating Data
Comparable store sales growth (0.8%) 5.9% 3.4% 0.3% (1.6)%
Net sales per selling square foot $ 249 $ 256 $ 252 $ 255 $ 268
Total square feet of selling space (in thousands) 69,889 62,357 56,625 49,201 41,447
Number of stores open 929 817 732 637 542
Report of Management
WESLEY S. MCDONALD
Executive Vice President
and Chief Financial Officer
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