Kohl's 2010 Annual Report Download - page 11

Table of Contents
for developments that may adversely impact us. Failure to detect changes and comply with such laws and regulations may result in an erosion of our
reputation, disruption of business and/or loss of employee morale. Additionally, we are regularly involved in various litigation matters that arise in the
ordinary course of our business. Litigation or regulatory developments could adversely affect our business operations and financial performance.

We believe the Kohl’s brand name and many of our private and exclusive brand names are powerful sales and marketing tools and we devote significant
resources to promoting and protecting them. We develop and promote private and exclusive brands that have generated national recognition. In some cases, the
brands or the marketing of such brands are tied to or affiliated with well-known individuals. Damage to the reputations (whether or not justified) of our brand
names or any affiliated individuals, could arise from product failures, litigation or various forms of adverse publicity, especially in social media outlets, and
may generate negative customer sentiment, potentially resulting in a reduction in sales, earnings, and shareholder value.

The efficient operation of our business is dependent on our information systems. In particular, we rely on our information systems to effectively manage
sales, distribution, merchandise planning and allocation functions. We also generate sales though the operations of our Kohls.com website. The failure of our
information systems to perform as designed could disrupt our business and harm sales and profitability.


As part of our normal course of business, we collect, process and retain sensitive and confidential customer information. Despite the security measures
we have in place, our facilities and systems, and those of our third party service providers, may be vulnerable to security breaches, acts of vandalism,
computer viruses, misplaced or lost data, programming and/or human errors, or other similar events. Any security breach involving the misappropriation,
loss or other unauthorized disclosure of confidential information, whether by us or our vendors, could severely damage our reputation, expose us to risks of
litigation and liability, disrupt our operations and harm our business.

Our sales and results of operations may be adversely affected by new legal requirements, including health care reform and proposed climate change and
other environmental legislation and regulations.
In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 were signed into law in the
U.S. This legislation expands health care coverage to many uninsured individuals and expands coverage to those already insured. The changes required by
this legislation could cause us to incur additional health care and other costs, but we do not expect any material short-term impact on our financial results as a
result of the legislation and are currently assessing the extent of any long-term impact.
The Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”) mandated fundamental changes in 2010 to many of our
current business credit card practices, including marketing, underwriting, pricing and billing (specifically restrictions on late and other penalty fees). While
we have made numerous changes designed to lessen the impact of the changes required by the CARD Act, there is no assurance that we will be successful. If
we are not able to lessen the impact of the changes required by the CARD Act, the
11