A Business Report in accounting

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 FORM 10-K

(Mark One)

X Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended January 28, 2017

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 (262) 703-7000

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

Title of each class Name of each exchange on which registered Common Stock, $.01 Par Value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes X No .

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No X .

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 X No .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. .

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

Large accelerated filer X Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company

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

At July 29, 2016, the aggregate market value of the voting stock of the Registrant held by stockholders who were not affiliates of the Registrant was approximately $7.5 billion (based upon the closing price of Registrant’s Common Stock on the New York Stock Exchange on such date). At March 8, 2017, the Registrant had outstanding an aggregate of 172,356,294 shares of its Common Stock.

Documents Incorporated by Reference:

Portions of the Proxy Statement for the Registrant’s Annual Meeting of Shareholders to be held on May 10, 2017 are incorporated into Part III.

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F-3

KOHL’S CORPORATION CONSOLIDATED BALANCE SHEETS

(Dollars in Millions) January 28,

2017 January 30,

2016 Assets Current assets:

Cash and cash equivalents $ 1,074 $ 707 Merchandise inventories 3,795 4,038 Other 378 331

Total current assets 5,247 5,076 Property and equipment, net 8,103 8,308 Other assets 224 222

Total assets $ 13,574 $ 13,606

Liabilities and Shareholders’ Equity Current liabilities:

Accounts payable $ 1,507 $ 1,251 Accrued liabilities 1,224 1,206 Income taxes payable 112 130 Current portion of capital lease and financing obligations 131 127

Total current liabilities 2,974 2,714 Long-term debt 2,795 2,792 Capital lease and financing obligations 1,685 1,789 Deferred income taxes 272 257 Other long-term liabilities 671 563 Shareholders’ equity:

Common stock - 371 and 370 million shares issued 4 4 Paid-in capital 3,003 2,944 Treasury stock, at cost, 197 and 184 million shares (10,338) (9,769) Accumulated other comprehensive loss (14) (17) Retained earnings 12,522 12,329

Total shareholders’ equity 5,177 5,491 Total liabilities and shareholders’ equity $ 13,574 $ 13,606

See accompanying Notes to Consolidated Financial Statements

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F-4

KOHL’S CORPORATION CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Millions, Except per Share Data) 2016 2015 2014

Net sales $ 18,686 $ 19,204 $ 19,023 Cost of merchandise sold 11,944 12,265 12,098 Gross margin 6,742 6,939 6,925 Operating expenses:

Selling, general and administrative 4,435 4,452 4,350 Depreciation and amortization 938 934 886 Impairments, store closing and other costs 186 — —

Operating income 1,183 1,553 1,689 Interest expense, net 308 327 340 Loss on extinguishment of debt — 169 — Income before income taxes 875 1,057 1,349 Provision for income taxes 319 384 482 Net income $ 556 $ 673 $ 867 Net income per share:

Basic $ 3.12 $ 3.48 $ 4.28 Diluted $ 3.11 $ 3.46 $ 4.24

See accompanying Notes to Consolidated Financial Statements

KOHL’S CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Millions) 2016 2015 2014

Net income $ 556 $ 673 $ 867 Other comprehensive income, net of tax:

Reclassification adjustment for interest expense on interest rate derivatives included in net income 3 3 3 Unrealized gains on investments — — 11 Other comprehensive income 3 3 14

Comprehensive income $ 559 $ 676 $ 881

See accompanying Notes to Consolidated Financial Statements

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F-5

KOHL’S CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Dollars in Millions, Except per Share Data)

Common Stock Paid-In Capital

Treasury Stock Accumulated Other

Comprehensive Loss

Retained Earnings

Shares Amount Shares Amount Total

Balance at February 1, 2014 364 $ 4 $ 2,598 (153) $ (8,052) $(34) $ 11,462 $ 5,978 Comprehensive income — — — — — 14 867 881 Stock options and awards, net of tax 3 — 145 (1) (19) — — 126 Dividends paid ($1.56 per common share) — — — — 4 — (321) (317) Treasury stock purchases — — — (12) (677) — — (677) Balance at January 31, 2015 367 4 2,743 (166) (8,744) (20) 12,008 5,991 Comprehensive income — — — — — 3 673 676 Stock options and awards, net of tax 3 — 201 (1) (27) — — 174 Dividends paid ($1.80 per common share) — — — — 3 — (352) (349) Treasury stock purchases — — — (17) (1,001) — — (1,001) Balance at January 30, 2016 370 4 2,944 (184) (9,769) (17) 12,329 5,491 Comprehensive income — — — — — 3 556 559 Stock options and awards, net of tax 1 — 59 — (17) — — 42 Dividends paid ($2.00 per common share) — — — — 5 — (363) (358) Treasury stock purchases — — — (13) (557) — — (557)

Balance at January 28, 2017 371 $ 4 $ 3,003 (197) $(10,338) $(14) $ 12,522 $ 5,177

See accompanying Notes to Consolidated Financial Statements

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F-6

KOHL’S CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Millions) 2016 2015 2014

Operating activities Net income $ 556 $ 673 $ 867 Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 938 934 886 Share-based compensation 41 48 48 Excess tax benefits from share-based compensation (5) (10) (3) Deferred income taxes 13 (38) 49 Other non-cash expenses, net 30 24 31 Loss on extinguishment of debt — 169 — Impairments, store closing and other costs 57 — — Changes in operating assets and liabilities:

Merchandise inventories 249 (215) 68 Other current and long-term assets (45) 43 (30) Accounts payable 256 (260) 146 Accrued and other long-term liabilities 81 53 30 Income taxes (23) 53 (68)

Net cash provided by operating activities 2,148 1,474 2,024 Investing activities Acquisition of property and equipment (768) (690) (682) Sales of investments in auction rate securities — — 82 Other 12 9 7 Net cash used in investing activities (756) (681) (593) Financing activities Treasury stock purchases (557) (1,001) (677) Shares withheld for taxes on vested restricted shares (17) (27) (19) Dividends paid (358) (349) (317) Proceeds from issuance of debt, net — 1,088 — Reduction of long-term borrowings — (1,085) — Premium paid on redemption of debt — (163) — Capital lease and financing obligation payments (127) (114) (114) Proceeds from stock option exercises 18 147 123 Excess tax benefits from share-based compensation 5 10 3 Proceeds from financing obligations 11 1 6 Net cash used in financing activities (1,025) (1,493) (995) Net increase (decrease) in cash and cash equivalents 367 (700) 436 Cash and cash equivalents at beginning of period 707 1,407 971 Cash and cash equivalents at end of period $ 1,074 $ 707 $ 1,407 Supplemental information

Interest paid, net of capitalized interest $ 299 $ 318 $ 329 Income taxes paid 314 372 502

Non-Cash investing and financing activities Property and equipment acquired through additional liabilities $ 54 $ 63 $ 41

See accompanying Notes to Consolidated Financial Statements

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KOHL’S CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-7

1. Business and Summary of Accounting Policies

Business

As of January 28, 2017, we operated 1,154 department stores, a website (www.Kohls.com), 12 FILA outlets, and three Off-Aisle clearance centers. Our Kohl's stores and website sell moderately-priced private label, exclusive and national brand apparel, footwear, accessories, beauty and home products. Our Kohl's stores generally carry a consistent merchandise assortment with some differences attributable to local preferences. Our website includes merchandise which is available in our stores, as well as merchandise which is available only on-line.

Our authorized capital stock consists of 800 million shares of $0.01 par value common stock and 10 million shares of $0.01 par value preferred stock.

Consolidation

The consolidated financial statements include the accounts of Kohl’s Corporation and its subsidiaries including Kohl’s Department Stores, Inc., its primary operating company. All intercompany accounts and transactions have been eliminated.

Accounting Period

Our fiscal year ends on the Saturday closest to January 31st each year. Unless otherwise stated, references to years in this report relate to fiscal years rather than to calendar years. The following fiscal periods are presented in this report.

Fiscal year Ended Number of

Weeks

2016 January 28, 2017 52 2015 January 30, 2016 52 2014 January 31, 2015 52

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

In addition to money market investments, cash equivalents include commercial paper and certificates of deposit with original maturities of three months or less. We carry these investments at cost which approximates fair value.

Also included in cash and cash equivalents are amounts due from credit card transactions with settlement terms of less than five days. Credit and debit card receivables included within cash were $81 million at January 28, 2017 and $92 million at January 30, 2016.

Merchandise Inventories

Merchandise inventories are valued at the lower of cost or market with cost determined on the first-in, first-out (“FIFO”) basis using the retail inventory method (“RIM”). Under RIM, the valuation of inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value inventory. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market since permanent markdowns are currently taken as a reduction of the retail value of inventory. We would record an additional reserve if the future estimated selling price is less than cost.