Kohl's 2009 Annual Report Download - page 57

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Table of Contents


.
facility expires in October 2011. The co-leads of this facility, The Bank of New York Mellon and Bank of America, have each committed $100 million. The
remaining 12 lenders have each committed between $30 and $130 million. There were no draws on these facilities during 2009. Weighted-average borrowings
under these facilities were $40 million during 2008.
Our debt agreements contain various covenants including limitations on additional indebtedness and certain financial tests. As of January 30, 2010, we
were in compliance with all covenants of the debt agreements.
We also have outstanding trade letters of credit and stand-by letters of credit totaling approximately $37 million at January 30, 2010, issued under
uncommitted lines with two banks.
Interest payments, net of amounts capitalized, were $133 million for 2009, $145 million for 2008 and $59 million for 2007.
.
We lease certain property and equipment. Rent expense is recognized on a straight-line basis over the expected lease term. The lease term begins on the
date we become legally obligated for the rent payments or we take possession of the building or land for initial setup of fixtures and merchandise or land
improvements, whichever is earlier. The lease term includes cancelable option periods where failure to exercise such options would result in an economic
penalty. Failure to exercise such options would result in the recognition of accelerated depreciation expense of the related assets.
Rent expense charged to operations was $498 million for 2009, $448 million for 2008 and $417 million for 2007. Rent expense includes contingent
rents, which are based on sales, of $2 million for 2009, $3 million for 2008 and $4 million for 2007. In addition, we are often required to pay real estate taxes,
insurance and maintenance costs. These items are not included in the rent expenses listed above. Many store leases include multiple renewal options,
exercisable at our option, that generally range from two additional five-year periods to eight ten-year periods.
Assets held under capital leases are included in property and equipment and depreciated over the term of the lease. Assets under capital leases consist of
the following:





Buildings and improvements  $ 209
Equipment   24
Less accumulated depreciation  (74)
 $159
Depreciation expense related to capital leases totaled $21 million for 2009, $19 million for 2008 and $14 million for 2007.
F-15