Kohl's 2008 Annual Report Download - page 58

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KOHL’S CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
6. Income Taxes (continued)
A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
2008 2007
(In Millions)
Balance at beginning of year ...................................... $81 $67
Increases due to:
Tax positions taken in current year .............................. 16 17
Tax positions taken in prior years ............................... —3
Decreases due to:
Tax positions taken in prior years ............................... (4) (2)
Settlements with taxing authorities .............................. (1) (3)
Lapse of applicable statute of limitations ......................... —(1)
Balance at end of year ............................................ $92 $81
Not included in the unrecognized tax benefits reconciliation above are gross unrecognized accrued interest
and penalties of $23 million at January 31, 2009 and $17 million at February 2, 2008. Interest and penalty
expense was $6 million in both 2008 and 2007.
Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $60 million
as of January 31, 2009 and $53 million as of February 2, 2008.
It is reasonably possible that our unrecognized tax positions may change within the next 12 months,
primarily as a result of ongoing audits. While it is possible that one or more of these audits may be resolved in
the next year, it is not anticipated that a significant impact to the unrecognized tax benefit balance will occur.
7. Stock-Based Compensation
We currently grant share-based compensation pursuant to the 1997 and 2003 Long-Term Compensation
Plans. The 2003 Long-Term Compensation Plan provides for the granting of various forms of equity-based
awards, including nonvested stock and options to purchase shares of our common stock, to officers and key
employees. Annual grants of stock options and nonvested stock are made in the first quarter of the subsequent
fiscal year. The 1997 Stock Option Plan for Outside Directors provides for granting of equity-based awards to
outside directors. We also have outstanding options which were granted to officers and key employees under the
1992 and 1994 Long-Term Compensation Plans.
The following table summarizes the number of options and nonvested stock authorized and available for
grant as of January 31, 2009:
1997 Plan 2003 Plan Total
(In Thousands)
Options and nonvested stock:
Authorized .......................................... 400 31,000 31,400
Available for grant .................................... 148 17,413 17,561
Options and nonvested stock that are surrendered or terminated without issuance of shares are available for
future grants.
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