Kohl's 2012 Annual Report Download - page 27

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Contractual Obligations
Our contractual obligations as of February 2, 2013 were as follows:
Total
Less
Than 1
Year 1 - 3
Years 3 - 5 Years
More
than 5
Years
(In Millions)
Recorded contractual obligations:
Long-term debt ............................................... $ 2,500 $ — $ — $ 650 $ 1,850
Capital lease and financing obligations.......... 1,596 105 177 174 1,140
4,096 105 177 824 2,990
Unrecorded contractual obligations:
Interest payments:
Long-term debt........................................... 1,752 129 269 269 1,085
Capital lease and financing obligations ..... 2,933 188 356 325 2,064
Operating leases (a) ........................................ 6,240 243 485 475 5,037
Royalties ......................................................... 326 82 139 78 27
Purchase obligations (b) ................................. 4,225 4,225 — — —
Other (c).......................................................... 465 115 124 92 134
15,941 4,982 1,373 1,239 8,347
Total................................................................ $ 20,037 $ 5,087 $ 1,550 $ 2,063 $ 11,337
(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 $165
million for 2012, $161 million for 2011 and $168 million for 2010. The lease term includes cancelable option
periods where failure to exercise such options would result in economic penalty.
(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.
(c) Our other commitments include legally binding minimum lease and interest payments for stores opening in 2013
or later, as well as payments associated with technology agreements.
We have not included $126 million of long-term liabilities for unrecognized tax benefits and the related interest and
penalties in the contractual obligations table because we are not able to reasonably estimate the timing of cash settlements. It is
reasonably possible that such 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.
Off-Balance Sheet Arrangements
We have not provided any financial guarantees as of year-end 2012.
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 financial condition, liquidity, results
of operations or capital resources.
Critical Accounting Policies and Estimates
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.