kss-10q_20190803.htm
KOHLS CORP 0000885639 --02-01 Large Accelerated Filer Q2 false P4Y P8Y P5Y P5Y kss:MerchandiseMember kss:MerchandiseMember kss:MerchandiseMember kss:MerchandiseMember us-gaap:PropertyPlantAndEquipmentNet kss:FinanceLeaseLiabilityAndFinancingObligationCurrent kss:FinanceLeaseLiabilityAndFinancingObligationNoncurrent P20Y P17Y P9Y

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 3, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from ________ to _________

 

Commission file number 1-11084

KOHL’S CORPORATION

(Exact name of registrant as specified in its charter)

 

Wisconsin

 

39-1630919

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

N56 W17000 Ridgewood Drive,

Menomonee Falls, Wisconsin

 

53051

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code (262703-7000

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on

which registered

Common Stock, $.01 par value

KSS

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

 

Accelerated filer

 

Non-accelerated filer

 

☐  

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.  

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: August 30, 2019 Common Stock, Par Value $0.01 per Share, 159,126,736 shares outstanding.

 


KOHL’S CORPORATION

INDEX

 

PART I

FINANCIAL INFORMATION

 

Item 1.

Financial Statements:

 

 

Consolidated Balance Sheets

3

 

Consolidated Statements of Income

4

 

Consolidated Statements of Changes in Shareholders' Equity

5

 

Consolidated Statements of Cash Flows

6

 

Notes to Consolidated Financial Statements

7

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21

Item 4.

Controls and Procedures

21

 

 

 

PART II

OTHER INFORMATION

 

Item 1A.

Risk Factors

22

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

22

Item 6.

Exhibits

23

Signatures

24

 


Table of Contents

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

August 3,

2019

February 2,

2019

August 4,

2018

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

625

 

$

934

 

$

1,066

 

Merchandise inventories

 

3,656

 

 

3,475

 

 

3,572

 

Other

 

397

 

 

426

 

 

404

 

Total current assets

 

4,678

 

 

4,835

 

 

5,042

 

Property and equipment, net

 

7,276

 

 

7,428

 

 

7,635

 

Operating leases

 

2,428

 

 

-

 

 

-

 

Other assets

 

160

 

 

206

 

 

238

 

Total assets

$

14,542

 

$

12,469

 

$

12,915

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

$

1,330

 

$

1,187

 

$

1,404

 

Accrued liabilities

 

1,199

 

 

1,364

 

 

1,174

 

Income taxes payable

 

34

 

 

64

 

 

70

 

Current portion of:

 

 

 

 

 

 

 

 

 

Finance leases and financing obligations

 

119

 

 

115

 

 

122

 

Operating leases

 

158

 

 

-

 

 

-

 

Total current liabilities

 

2,840

 

 

2,730

 

 

2,770

 

Long-term debt

 

1,855

 

 

1,861

 

 

2,273

 

Finance leases and financing obligations

 

1,270

 

 

1,523

 

 

1,537

 

Operating leases

 

2,647

 

 

-

 

 

-

 

Deferred income taxes

 

254

 

 

184

 

 

188

 

Other long-term liabilities

 

221

 

 

644

 

 

660

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

 

Common stock

 

4

 

 

4

 

 

4

 

Paid-in capital

 

3,236

 

 

3,204

 

 

3,163

 

Treasury stock, at cost

 

(11,353

)

 

(11,076

)

 

(10,835

)

Accumulated other comprehensive loss

 

-

 

 

-

 

 

(8

)

Retained earnings

 

13,568

 

 

13,395

 

 

13,163

 

Total shareholders’ equity

 

5,455

 

 

5,527

 

 

5,487

 

Total liabilities and shareholders’ equity

$

14,542

 

$

12,469

 

$

12,915

 

 

See accompanying Notes to Consolidated Financial Statements

 

3


Table of Contents

 

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

 

Three Months Ended

Six Months Ended

(Dollars in Millions, Except per Share Data)

August 3,

2019

August 4,

2018

August 3,

2019

August 4,

2018

Net sales

$

4,169

 

$

4,310

 

$

7,990

 

$

8,263

 

Other revenue

 

261

 

 

260

 

 

527

 

 

515

 

Total revenue

 

4,430

 

 

4,570

 

 

8,517

 

 

8,778

 

Cost of merchandise sold

 

2,550

 

 

2,605

 

 

4,965

 

 

5,101

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

1,269

 

 

1,272

 

 

2,544

 

 

2,532

 

Depreciation and amortization

 

228

 

 

241

 

 

458

 

 

483

 

Impairments, store closing and other costs

 

7

 

 

 

 

56

 

 

 

Operating income

 

376

 

 

452

 

 

494

 

 

662

 

Interest expense, net

 

53

 

 

65

 

 

105

 

 

135

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

42

 

Income before income taxes

 

323

 

 

387

 

 

389

 

 

485

 

Provision for income taxes

 

82

 

 

95

 

 

86

 

 

117

 

Net income

$

241

 

$

292

 

$

303

 

$

368

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.52

 

$

1.77

 

$

1.90

 

$

2.23

 

Diluted

$

1.51

 

$

1.76

 

$

1.89

 

$

2.21

 

 

See accompanying Notes to Consolidated Financial Statements

 

4


Table of Contents

 

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

 

 

Three Months Ended

Six Months Ended

(Dollars in Millions, Except per Share Data)

August 3,

2019

August 4,

2018

August 3,

2019

August 4,

2018

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

4

 

$

4

 

$

4

 

$

4

 

Stock options and awards

 

-

 

 

-

 

 

-

 

 

-

 

Balance, end of period

$

4

 

$

4

 

$

4

 

$

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paid-in capital

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

3,223

 

$

3,125

 

$

3,204

 

$

3,078

 

Stock options and awards

 

13

 

 

38

 

 

32

 

 

85

 

Balance, end of period

$

3,236

 

$

3,163

 

$

3,236

 

$

3,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

(11,221

)

$

(10,737

)

$

(11,076

)

$

(10,651

)

Treasury stock purchases

 

(133

)

 

(95

)

 

(254

)

 

(165

)

Stock options and awards

 

(2

)

 

(4

)

 

(27

)

 

(21

)

Dividends paid

 

3

 

 

1

 

 

4

 

 

2

 

Balance, end of period

$

(11,353

)

$

(10,835

)

$

(11,353

)

$

(10,835

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

-

 

$

(8

)

$

-

 

$

(11

)

Other comprehensive income

 

-

 

 

-

 

 

-

 

 

3

 

Balance, end of period

$

-

 

$

(8

)

$

-

 

$

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

$

13,436

 

$

12,972

 

$

13,395

 

$

13,006

 

Change in accounting standard (a)

 

-

 

 

-

 

 

88

 

 

(7

)

Net earnings

 

241

 

 

293

 

 

303

 

 

368

 

Dividends paid

 

(109

)

 

(102

)

 

(218

)

 

(204

)

Balance, end of period

$

13,568

 

$

13,163

 

$

13,568

 

$

13,163

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity, end of period

$

5,455

 

$

5,487

 

$

5,455

 

$

5,487

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

Shares, beginning of period

 

375

 

 

374

 

 

374

 

 

373

 

Stock options and awards

 

-

 

 

-

 

 

1

 

 

1

 

Shares, end of period

 

375

 

 

374

 

 

375

 

 

374

 

Treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Shares, beginning of period

 

(213

)

 

(206

)

 

(211

)

 

(205

)

Treasury stock purchases

 

(2

)

 

(1

)

 

(4

)

 

(2

)

Shares, end of period

 

(215

)

 

(207

)

 

(215

)

 

(207

)

Total shares outstanding, end of period

 

160

 

 

167

 

 

160

 

 

167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends paid per common share

$

0.67

 

$

0.61

 

$

1.34

 

$

1.22

 

 

(a)

Refer to Note 4 for details on the adoption of the new lease accounting standard. 

 

See accompanying Notes to Consolidated Financial Statements  

5


Table of Contents

 

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Six Months Ended

(Dollars in Millions)

August 3,

2019

August 4,

2018

Operating activities

 

 

 

 

 

 

Net income

$

303

 

$

368

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

458

 

 

483

 

Share-based compensation

 

27

 

 

50

 

Deferred income taxes

 

41

 

 

(25

)

Impairments, store closing and other costs

 

45

 

 

-

 

Loss on extinguishment of debt

 

-

 

 

42

 

Non-cash lease expense

 

75

 

 

-

 

Other non-cash expenses

 

3

 

 

13

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Merchandise inventories

 

(175

)

 

(24

)

Accrued and other long-term liabilities

 

(177

)

 

(88

)

Accounts payable

 

143

 

 

133

 

Other current and long-term assets

 

29

 

 

89

 

Income taxes

 

(8

)

 

6

 

Operating lease liabilities

 

(88

)

 

-

 

Net cash provided by operating activities

 

676

 

 

1,047

 

Investing activities

 

 

 

 

 

 

Acquisition of property and equipment

 

(439

)

 

(312

)

Other

 

-

 

 

6

 

Net cash used in investing activities

 

(439

)

 

(306

)

Financing activities

 

 

 

 

 

 

Treasury stock purchases

 

(254

)

 

(165

)

Shares withheld for taxes on vested restricted shares

 

(27

)

 

(21

)

Dividends paid

 

(214

)

 

(202

)

Reduction of long-term borrowings

 

(6

)

 

(528

)

Premium paid on redemption of debt

 

-

 

 

(35

)

Finance lease and financing obligation payments

 

(60

)

 

(64

)

Proceeds from financing obligations

 

13

 

 

-

 

Proceeds from stock option exercises

 

2

 

 

32

 

Net cash used in financing activities

 

(546

)

 

(983

)

Net decrease in cash and cash equivalents

 

(309

)

 

(242

)

Cash at beginning of period

 

934

 

 

1,308

 

Cash at end of period

$

625

 

$

1,066

 

Supplemental information

 

 

 

 

 

 

Interest paid, net of capitalized interest

$

105

 

$

141

 

Income taxes paid

 

77

 

 

164

 

Property and equipment acquired through:

 

 

 

 

 

 

Finance lease liabilities

 

73

 

 

-

 

Operating lease liabilities

 

67

 

 

-

 

Financing obligations

 

-

 

 

7

 

 

 

See accompanying Notes to Consolidated Financial Statements

 

6


Table of Contents

 

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for fiscal year end consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended February 2, 2019 (Commission File No. 1-11084) as filed with the Securities and Exchange Commission.

Due to the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

We operate as a single business unit.

The following table provides a brief description of issued, but not yet effective, accounting standards:

 

Standard

Description

Effect on our Financial Statements

Cloud Computing

(ASU 2018-15)

 

Issued August 2018

 

Effective Q1 2020

Under the new standard, implementation costs related to a cloud computing arrangement will be deferred or expensed as incurred, in accordance with the existing internal-use software guidance for similar costs.

 

The new standard also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense.

We are evaluating the impact of the new standard, but believe it is generally consistent with our current accounting for cloud computing arrangements and will not have a material impact on our financials.

 

 

 

 

 


7


Table of Contents

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

2. Revenue Recognition

 

The following table summarizes net sales by line of business:

 

 

Three Months Ended

 

Six Months Ended

 

(Dollars in Millions)

August 3, 2019

 

August 4, 2018 (1)

 

August 3, 2019

 

August 4, 2018 (1)

 

Women's

$

1,373

 

$

1,439

 

$

2,592

 

$

2,694

 

Men's

 

933

 

 

955

 

 

1,717

 

 

1,745

 

Home

 

651

 

 

678

 

 

1,280

 

 

1,369

 

Children's

 

458

 

 

464

 

 

914

 

 

919

 

Footwear

 

447

 

 

465

 

 

867

 

 

902

 

Accessories

 

307

 

 

309

 

 

620

 

 

634

 

Net Sales

$

4,169

 

$

4,310

 

$

7,990

 

$

8,263

 

 

(1)

Certain businesses do not agree to previously reported amounts due to changes in category classification.

 

Liabilities for performance obligations resulting from our rewards programs, return reserves, and unredeemed gift cards and merchandise return cards totaled $354 million as of August 3, 2019, $413 million as of February 2, 2019 and $358 million as of August 4, 2018.

 

3. Debt

 

Long-term debt consists of the following unsecured senior debt:

 

 

 

 

 

 

 

 

Outstanding

Maturity by fiscal year

(Dollars in Millions)

Effective

Rate

Coupon

Rate

August 3,

2019

February 2,

2019

August 4,

2018

2021

 

4.81

%

 

4.00

%

$

-

 

$

-

 

$

413

 

2023

 

3.25

%

 

3.25

%

 

350

 

 

350

 

 

350

 

2023

 

4.78

%

 

4.75

%

 

184

 

 

184

 

 

184

 

2025

 

4.25

%

 

4.25

%

 

650

 

 

650

 

 

650

 

2029

 

7.36

%

 

7.25

%

 

42

 

 

42

 

 

42

 

2033

 

6.05

%

 

6.00

%

 

113

 

 

113

 

 

112

 

2037

 

6.89

%

 

6.88

%

 

101

 

 

101

 

 

101

 

2045

 

5.57

%

 

5.55

%

 

427

 

 

433

 

 

435

 

Outstanding long-term debt

 

 

 

 

 

 

 

1,867

 

 

1,873

 

 

2,287

 

Unamortized debt discounts and deferred financing costs

 

 

 

 

 

 

 

(12

)

 

(12

)

 

(14

)

Long-term debt

 

 

 

 

 

 

$

1,855

 

$

1,861

 

$

2,273

 

Effective interest rate

 

 

 

 

 

 

 

4.74

%

 

4.74

%

 

4.76

%

 

Our long-term debt is classified as Level 1, financial instruments with unadjusted, quoted prices listed on active market exchanges. The estimated fair value of our long-term debt was $1.9 billion at August 3, 2019, $1.8 billion at February 2, 2019, and $2.3 billion at August 4, 2018.

 

On July 25, 2019, we amended and extended our existing credit facility with various lenders which provides for a $1.0 billion senior unsecured five-year revolving credit facility that will mature in July 2024.  Among other things, the agreement includes a maximum leverage ratio financial covenant (which is generally consistent with the ratio under our prior agreement) and restrictions on liens and subsidiary indebtedness.  No amounts were outstanding on the credit facility at August 3, 2019, February 2, 2019, or August 4, 2018.

8


Table of Contents

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

Year to date 2019, we have reduced our outstanding debt by $6 million through open market repurchases.          

 

4. Leases

Effective February 3, 2019 (the “adoption date”), we adopted ASC 842 Leases (the “new standard”).  The new standard requires lessees to recognize a liability for lease obligations and a corresponding right of use asset on the balance sheet. The guidance also requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing, and potential uncertainty of cash flows related to leases.  We adopted the new standard using a modified retrospective transition method and applied the transition provisions at the beginning of the period of adoption through a cumulative-effect adjustment to retained earnings.  We did not restate prior period financial statements.

The new standard includes several transition practical expedients that were available to reduce the burden of implementing the standard.  

 

 

We elected the package of practical expedients, which among other things, allowed us to carry forward our historical lease classifications.

 

We did not elect the hindsight practical expedient which would have allowed us to revisit key assumptions, such as lease term, that were made when we originally entered into the lease.

The following table summarizes changes in our Consolidated Balance Sheet upon adoption of the new standard:

 

(Dollars in Millions)

 

Assets

 

 

 

 

Property and equipment, net

$

(174

)

(a)

Operating leases

 

2,446

 

(b)

Other assets

 

(32

)

(c)

Total assets

$

2,240

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

Finance leases and financing obligations

$

(237

)

(a)

Operating leases

 

2,771

 

(b)

Accrued and other liabilities

 

(413

)

(c)

Deferred taxes

 

31

 

(d)

Shareholders' equity

 

88

 

(d)

Total liabilities and shareholders' equity

$

2,240

 

 

 

 

(a)

The reductions are primarily due to historical failed sale leaseback and build to suit arrangements where we were deemed owner for accounting purposes. In accordance with ASC 842 transition provisions, they became operating or finance leases.  

 

 

(b)

The increases include land and other operating leases which were not previously recorded on our balance sheet or were previously recorded as financing obligations.

 

 

(c)

The reductions are primarily due to the reclassification of lease-related assets and liabilities such as straight-line rent and reserves for closed stores to operating lease assets and liabilities.

 

 

(d)

The cumulative effect of lease adjustments, net of the deferred tax impact, was recorded as an adjustment to retained earnings.  In addition, retained earnings include a $26 million lease impairment charge.

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KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

 

These adjustments represent non-cash activities for Statement of Cash Flow purposes.

 

Adoption of the new standard is not expected to have a material impact on our net income prospectively.  We expect immaterial increases in Selling, general and administrative expenses to be more than offset by decreases in Depreciation and amortization and Interest expense. Substantially all of the expected income statement changes are due to the reversal of accounting for build to suit arrangements where construction is complete which were accounted for as operating or finance leases in accordance with the transition provisions of ASC 842.

 

Finance and Operating Leases

 

We lease certain property and equipment used in our operations.  Some of our store leases include additional rental payments based on a percentage of sales over contractual levels or which are adjusted periodically for inflation.  Our typical store lease has an initial term of 20 to 25 years and four to eight five-year renewal options.  

 

Lease assets represent our right to use an underlying asset for the lease term. Lease assets are recognized at commencement date based on the value of the lease liability and are adjusted for any lease payments made to the lessor at or before commencement date, minus any lease incentives received and any initial direct costs incurred by the lessee.

 

Lease liabilities represent our contractual obligation to make lease payments.  At the commencement date, the lease liabilities equal the present value of minimum lease payments over the lease term.  As the implicit interest rate is not readily identifiable in our leases, we estimate our collateralized borrowing rate to calculate the present value of lease payments. For leases that commenced prior to the adoption date, we used the February 3, 2019 rate for a term consistent with the original lease term for operating leases and the rate on the lease commencement date for finance leases.

 

For leases with terms of 12 months or less, we elected the practical expedient to exclude them from the balance sheet and recognize expense on a straight-line basis over the lease term.  For leases beginning, modified, or reassessed in 2019 and later, we elected the practical expedient to combine lease and non-lease components.

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KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements:

 

Consolidated Balance Sheet

August 3,

2019

(Dollars in Millions)

Classification

Assets

 

 

 

 

Operating leases

Operating leases

$

2,428

 

Finance leases

Property and equipment, net

 

544

 

Total operating and finance leases

 

 

2,972

 

Liabilities

 

 

 

 

Current

 

 

 

 

Operating leases

Current portion of operating leases

 

158

 

Finance leases

Current portion of finance leases and financing obligations

 

72

 

Noncurrent

 

 

 

 

Operating leases

Operating leases

 

2,647

 

Finance leases

Finance leases and financing obligations

 

764

 

Total operating and finance leases

 

$

3,641

 

 

 

Consolidated Statement of Income

Three Months Ended

 

Six Months

Ended

 

(Dollars in Millions)

Classification

August 3, 2019

 

August 3, 2019

 

Operating leases

Selling, general, and administrative

$

79

 

$

157

 

Finance leases

 

 

 

 

 

 

 

Amortization of leased assets

Depreciation and amortization

 

18

 

 

35

 

Interest on lease liabilities

Interest expense, net

 

24

 

 

48

 

Total operating and finance leases

 

$

121

 

$

240

 

 

 

Consolidated Statement of Cash Flows

Six Months

Ended

 

(Dollars in Millions)

Classification

August 3, 2019

 

Cash paid for amounts included in the measurement of lease liabilities

 

 

 

Operating cash flows from operating leases

$

169

 

Operating cash flows from finance leases

 

48

 

Financing cash flows from finance leases

 

37

 

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Table of Contents

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

The following table summarizes future lease payments by fiscal year:

 

 

August 3, 2019

 

(Dollars in Millions)

Operating Leases

 

Finance Leases

 

Total

 

2019

$

145

 

$

82

 

$

227

 

2020

 

309

 

 

168

 

 

477

 

2021

 

301

 

 

148