Kohl's 2010 Annual Report Download - page 32

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Table of Contents

Our contractual obligations as of January 29, 2011 were as follows:
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

Long-term debt $ 1,900 $400 $ — $ — $ 1,500
Capital leases 202 18 32 20 132
2,102 418 32 20 1,632

Interest payments:
Long-term debt 1,615 114 194 194 1,113
Capital leases 140 14 26 22 78
Operating leases (a) 11,280 482 947 931 8,920
Royalties 429 67 143 129 90
Purchase obligations (b) 4,088 4,058 30 — —
17,552 4,735 1,340 1,276 10,201
Total $19,654 $5,153 $1,372 $1,296 $11,833
(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 $168 million for 2010, $157 million for 2009 and $148 million for 2008.
(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
materially affect liquidity and cash flows.

We have not provided any financial guarantees as of year-end 2010.
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.

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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