Kohl's 2012 Annual Report Download - page 54

KOHL’S CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-15
6. Income Taxes
Deferred income taxes consist of the following:
Feb 2,
2013 Jan 28, 2012
(In Millions)
Deferred tax liabilities:
Property and equipment ........................................................................................... $ 1,405 $ 1,480
Deferred tax assets:
Merchandise inventories .......................................................................................... 23 19
Accrued and other liabilities, including stock options............................................. 217 213
Capital lease and financing obligations.................................................................... 810 823
Accrued step rent liability ........................................................................................ 86 78
Unrealized loss on investments................................................................................ 12 15
Unrealized loss on interest rate swap....................................................................... 17 18
1,165 1,166
Net deferred tax liability.................................................................................................. $ 240 $ 314
We have corrected the presentation of $37 million of short-term deferred tax assets that were previously recorded as long-
term deferred tax liabilities as of January 28, 2012.
The components of the provision for income taxes are as follows:
2012 2011 2010
(In Millions)
Current federal ............................................................................................... $ 590 $ 497 $ 561
Current state................................................................................................... 60 60 69
Deferred federal ............................................................................................. (66)124 35
Deferred state................................................................................................. (9)11 3
$ 575 $ 692 $ 668
The provision for income taxes differs from the amount that would be provided by applying the statutory U.S. corporate
tax rate due to the following items:
2012 2011 2010
Provision at statutory rate............................................................................... 35.0% 35.0% 35.0%
State income taxes, net of federal tax benefit................................................. 2.2 2.7 2.7
Tax-exempt interest income........................................................................... (0.1) —(0.3)
Federal HIRE Act tax credit........................................................................... —(0.4) —
Other Federal tax credits ................................................................................ (0.3) (0.1) —
Provision for income taxes............................................................................. 36.8% 37.2% 37.4%
We have analyzed filing positions in all of the federal and state jurisdictions where we are required to file income tax
returns, as well as all open tax years in these jurisdictions. The only federal returns subject to examination are for the 2008
through 2012 tax years. State returns subject to examination vary depending upon the state. Generally, the 2009 through 2012
tax years are subject to state examination; however, in some instances, earlier periods are presently being audited. The earliest
open period is 2003. Certain states have proposed adjustments which we are currently appealing. If we do not prevail on our
appeals, we do not anticipate that the adjustments would result in a material change in our financial position.