Kohl's 2010 Annual Report Download - page 66

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Table of Contents


 

   

Net sales $4,035 $4,100 $ 4,218 $ 6,038
Gross margin $1,537 $1,651 $1,622 $ 2,223
Net income $199 $ 260 $ 163 $493
Basic shares 307 307 307 295
Basic net income per share $0.65 $0.84 $0.53 $1.67
Diluted shares 309 308 308 297
Diluted net income per share $0.64 $0.84 $0.53 $1.66

   

Net sales $ 3,638 $ 3,806 $ 4,051 $5,682
Gross margin $1,368 $1,520 $1,539 $2,070
Net income $137 $229 $ 193 $431
Basic shares 305 305 305 306
Basic net income per share $0.45 $ 0.76 $0.63 $1.41
Diluted shares 306 306 308 308
Diluted net income per share $0.45 $ 0.75 $0.63 $1.40
(1) As discussed in our Quarterly Report on Form 10-Q for the period ended October 30, 2010, we identified various errors in our accounting for leased
properties and completed a detailed review of each of our leases in the third quarter of fiscal 2010. These corrections, which were not material to our
previously reported financial statements and were recorded as a correction of an error, reduced third quarter net income by $31 million and both basic
and diluted earnings per share by $0.10.
Due to changes in stock prices during the year and timing of issuance of shares, the sum of quarterly net income per share may not equal the annual net
income per share.
 
One of our directors is also a shareholder of a law firm which performs legal services for us.
We have agreements with Blackhawk Network, Inc. (“Blackhawk”) pursuant to which Blackhawk distributes our prepaid gift cards for sale in
various retail outlets and, beginning in 2008, to which we will sell prepaid gift cards for other retailers in our stores. We pay Blackhawk a fee for Kohl’s gift
cards which are sold at other retailers and receive a fee for selling gift cards for other retailers in our stores. Blackhawk is a subsidiary of Safeway Stores, Inc.
(“Safeway”) and one of our directors is Chairman, President and Chief Executive Officer of Safeway. This director also holds a small minority ownership
interest in Blackhawk. The agreements were entered into in the ordinary course of our business, and our director was not involved in any negotiations.
Blackhawk is a leading provider of gift card marketing services in the retail industry, and Safeway has confirmed that the terms of our agreements with
Blackhawk are substantially similar to the terms of Blackhawk’s agreements with other similarly situated national retailers.
F-22