Kohl's 2015 Annual Report Download - page 49

Table of Contents



The tax effects of each component of other comprehensive income are as follows:




Interest rate derivatives:
Before-tax amounts  
$ 5
$ 5
Tax expense 
(2)
(2)
After-tax amounts 
3
3
Unrealized gains on investments:
Before-tax amounts 
18
12
Tax expense 
(7)
(4)
After-tax amounts 
11
8
Other comprehensive income  
$ 14
$ 11

Revenue from the sale of merchandise at our stores is recognized at the time of sale, net of any returns. Sales of merchandise shipped to our customers
are recorded based on estimated receipt of merchandise by the customer. Net sales do not include sales tax as we are considered a pass-through conduit for
collecting and remitting sales taxes.
Revenue from Kohl's gift card sales is recognized when the gift card is redeemed. Gift card breakage revenue is based on historical redemption patterns
and represents the balance of gift cards for which we believe the likelihood of redemption by a customer is remote.

The following table illustrates the primary costs classified in Cost of Merchandise Sold and Selling, General and Administrative Expenses:



• Total cost of products sold including product development costs, net of
vendor payments other than reimbursement of specific, incremental and
identifiable costs
• Inventory shrink
• Markdowns
• Freight expenses associated with moving merchandise from our vendors to
our distribution centers
• Shipping and handling expenses of omni-channel sales
• Terms cash discount
• Compensation and benefit costs including:
• Stores
• Corporate headquarters, including buying and merchandising
• Distribution centers
• Occupancy and operating costs of our retail, distribution and
corporate facilities
• Net revenues from the Kohl’s credit card program
• Freight expenses associated with moving merchandise from our
distribution centers to our retail stores and between distribution
and retail facilities
• Marketing expenses, offset by vendor payments for reimbursement
of specific, incremental and identifiable costs
• Other administrative revenues and expenses
The classification of these expenses varies across the retail industry.
F-10