Kohl's 2009 Annual Report Download - page 31

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Table of Contents

Our contractual obligations as of January 30, 2010 were as follows:
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

Long-term debt $ 1,900 $ — $400 $ — $ 1,500
Capital leases 174 16 29 20 109
2,074 16 429 20 1,609
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Interest payments:
Long-term debt 1,738 123 211 194 1,210
Capital leases 103 12 21 18 52
Operating leases (a) 11,038 479 931 917 8,711
Royalties 255 58 105 74 18
Purchase obligations (b) 3,245 3,245 — — —
16,379 3,917 1,268 1,203 9,991
Total $ 18,453 $3,933 $1,697 $1,223 $11,600
(a) Our leases typically require that we pay real estate taxes, insurance and maintenance costs in addition to the minimum rental payments included in the
table above. Such costs vary from period to period and totaled $157 million for 2009, $148 million for 2008 and $135 million for 2007.
(b) Our purchase obligations consist mainly of purchase orders for merchandise. Amounts committed under open purchase orders for merchandise are
cancelable without penalty prior to a date that precedes the vendors’ scheduled shipment date.
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 payment of any such amounts in future periods will affect
liquidity and cash flows.

We have not provided any financial guarantees as of year-end 2009.
We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating
our business. We do not have any arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to
materially affect our liquidity or the availability of capital resources.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates
and assumptions that affect the reported amounts. A discussion of the more significant estimates follows. Management has discussed the development,
selection and disclosure of these estimates and assumptions with the Audit Committee of our Board of Directors.
Retail Inventory Method and Inventory Valuation
We value our inventory at the lower of cost or market with cost determined on the first-in, first-out (“FIFO”) basis using the retail inventory method
(“RIM”). RIM is an averaging method that has been widely
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