] 3 Consolidated Statements of Financial Position Januanuary 31 (millions, except footnotes) 2015 Assets Cash and cash equivalents, including short-term investments of $3,008 and $1,520 $ 4,046 $ 2,210 Inventory 8,601 8,282 Assets of discontinued operations 322 1,058 Other current assets 1,161 2,074 Total current assets 14,130 13,624 Property and equipment Land 6,125 6,127 Buildings and improvements 27.059 26,613 Fixtures and equipment 5,347 5,329 Computer hardware and software 2,617 2,552 Construction-in-progress 315 424 Accumulated depreciation (16,246) (15,093) Property and equipment, net 25,217 25,952 Noncurrent assets of discontinued operations 75 717 Other noncurrent assets 840 879 Total assets $ 40,262 $ 41,172 Liabilities and shareholders' investment Accounts payable 7,418 $ 7.759 Accrued and other current liabilities 4,236 3,783 Current portion of long-term debt and other borrowings 815 91 Liabilities of discontinued operations 153 103 Total current liabilities 12,622 11,736 Long-term debt and other borrowings 11,945 12,634 Deferred income taxes 823 1,160 Noncurrent liabilities of discontinued operations 18 193 Other noncurrent liabilities 1.897 1,452 Total noncurrent liabilities 14,683 15,439 Shareholders investment Common stock 60 53 Additional paid in capital 5,348 4,899 Retained earnings 8,188 9.644 Accumulated other comprehensive loss Pension and other benefit abilities (588) (581) Currency translation adjustment and cash flow hedoos (41) (38) Total shareholders investment 12.957 13,997 Total liabilities and shareholders' investment $ 40,2025 Common Stock And,000,000,000 100633ar62.226.517 seriedadestanding.lawry 10, 2016 640.11.07 has dan tanding ary 31, 2015 Preferred Stock Auto 5.000.000 1001 Vanhas or outstanding ary 2011 Jan lypo + A Bead aloud Consolidated Statements of Operations $ 2015 73,785 $ 51.997 21,788 14,665 2.213 (620) 2014 72,618 5 51,278 21,340 14,676 2,129 2013 71,279 50,039 21,240 14,465 1.996 (391) (millions, except per share data) Sales Cost of sales Gross margin Selling, general and administrative expenses Depreciation and amortization Gain on sale Earnings from continuing operations before interest expense and income taxes Net interest expense Earnings from continuing operations before income taxes Provision for income taxes Net earnings from continuing operations Discontinued operations, net of tax Net earnings I (loss) Basic earnings /(loss) per share Continuing operations Discontinued operations Net earnings floss) per share Diluted earnings/(loss) per share Continuing operations Discontinued operations Net earnings/class) per share Weighted average common shares outstanding Basic Dilutive effect of share-based awards Diluted Artidutive shares Pershe may not foot due to pounding es companying Masto Consolidated Financial Statements 5.530 607 4,923 1.602 3,321 42 3,363 S 4,535 882 3,653 1,204 2,449 (4.085) (1,636) 5,170 1,049 4,121 1,427 2,694 (723) 1.971 $ $ 5.29 $ 0.07 5.35 $ 3.86 $ (6.44) (2.58) $ 4.24 (1.14) 3.10 S $ 5.25 $ 0.07 5.31 $ 3.83 $ (6.38) (256) $ 4 20 (1.13 3.07 $ 634.7 6277 5.2 632.9 635.1 6.7 5418 23 6-40.1 3.3 KOHL'S CORPORATION CONSOLIDATED BALANCE SHEETS (In Millions) (Unaudited) Jan 30, 2016 Jan 31, 2015 s 707 $ 1,407 4,038 3,814 331 359 5,076 5.580 8,308 8,515 222 238 $ 13,606 S 14,333 Assets Current assets: Cash and cash equivalents Merchandise inventories Other Total current assets Property and equipment, net Other assets Total assets Liabilities and ShareholdersEquity Current liabilities: Accounts payable Accrued liabilities Income taxes payable Current portion of capital lense and financing obligations Total current linbilities Long-term debt Capital tense and financing obligations Deferred income taxes Other long-term liabilities Shareholders equity Total liabilities and shareholders' equity S 1,251 S 1,206 130 1,511 1.160 78 110 127 2,714 2.859 2,792 2,780 1.789 1.858 257 298 563 547 5.491 5.991 $ 13,606 S14331 KOHL'S CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In Millions, except per share data) (Unaudited) Quarter Ended Jan 30, Jan 31, 2016 2015 Year Ended Jan 30, Jan 31, 2016 2015 $ 6,387 4,275 $ 6,337 4,190 $ 19,204 12,265 S 19.023 12,098 2,112 2.147 6,939 6,925 1,332 239 1,272 221 4,452 934 4,350 886 Net sales Cost of merchandise sold Gross margin Operating expenses: Selling, general, and administrative Depreciation and amortization Operating income Interest expense, net Loss on extinguishment of debt Income before income taxes Provision for income taxes 541 654 1,553 1,689 79 84 327 340 169 462 166 570 201 1,057 384 1,349 482 Net income S 296 369 $ 673 s 867 S s s s 1.58 187 1.85 199 3.48 193 4.28 203 S S s 1.58 187 1.83 201 S 3.46 195 4.24 204 Basic net income per share Average number of shares Diluted net income per share Average number of shares As a percent of net sales: Gross margin Selling general and administrative expenses Operating income Net income 33.1% 33.9% 36.1% 36.4% 20.9% 8.5% 4.6% 20.1% 10.3% 5.8% 23.2% 8.1% 3.5% 22.99 8.996 4.6% Excluding losos. extinguishment of debt: Net income Diluted net income per share Net income as a percent of net sales S s 296 1.58 S S 369 1.83 S S 781 S 4.01 S 4.19% 867 4.24 14. Property and Equipment Property and equipment is depreciated using the straight-line method over estimated useful lives or lease terms if shorter. We amortize leasehold improvements purchased after the beginning of the initial lease term over the shorter of the assets useful lives or a term that includes the original lease term, plus any renewals that are reasonably assured at the date the leasehold improvements are acquired. Depreciation and capital lease amortization expense for 2015, 2014, and 2013 was $2,191 million, $2,108 million, and $1,975 million, respectively. For income tax purposes, accelerated depreciation methods are generally used. Repair and maintenance costs are expensed as incurred. Facility pre-opening costs, including supplies and payroll, are expensed as incurred Estimated Useful Lives Life (Years) Buildings and improvements 8-39 Fixtures and equipment 2-15 Computer hardware and software 2-7 Long-lived assets are reviewed for impairment when events or changes in circumstances, such as a decision to relocate or close a store or make significant software changes, indicate that the asset's carrying value may not be recoverable. For asset groups classified as held for sale, the carrying value is compared to the fair value less cost to sell. We estimate fair value by obtaining market appraisals, valuations from third party brokers, or other valuation techniques. Impairments (milions) 2015 2014 2013 Impairments included in segment SG&A $ 50 $ 108 S 58 Unallocated impairments AI 4 16 19 Total impairments $ 54 $ 124 $ 77 Substantially all of the impairments are recorded in SG&Acxpense on the Consolidated Statements of Operations, primarily from completed of planned to closures and software changes For 2015, represents long-lived asset impairments from our decision to wind down certain noncon operations For 2014 and 2013 represents impairments of undeveloped land 15. Other Noncurrent Assets 322 Other Noncurrent Assets January 30, January 31 millions) 2016 2015 Goodwill and intangible assets 277 $ 298 Company-owned life insurance investments 308 Pension asset 66 1 Interest rate swaps 27 65 Other 162 193 Total S 840 3 879 Company-ben eine son approximately 4,000 am mers who have been designated highly compensated under the Revenge Coded have given their consent to be red Amounts are present of loans that are secured by No 10 and 21 non rating our rewape 16. Goodwill and intangible Assets Goodwill totaled $133 million and 5147 milionat January 30, 2016 and January 31, 2015, respectively. During 2015, we announced our decision to wind down certain noncore operations. As a result, we recorded a $35 milion prefix impairments which included approximately $23 milion of intangible assets and 512 million of good. These costs