x | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 20-1920798 | |
(State of Incorporation) | (I.R.S. Employer Identification No.) | |
3333 Beverly Road, Hoffman Estates, Illinois | 60179 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.01 per share | The NASDAQ Stock Market | |
Warrants to Purchase Common Stock | The NASDAQ Stock Market |
Item 1. | Business |
• | Full-line Stores—547 stores located across 49 states and Puerto Rico, primarily mall-based locations averaging 159,000 square feet. Full-line stores offer a wide array of products and service offerings across many merchandise categories, including appliances, consumer electronics/connected solutions, tools, sporting goods, outdoor living, lawn and garden equipment, certain automotive services and products, such as tires and batteries, home fashion products, as well as apparel, footwear, jewelry and accessories for the whole family. Our product offerings include our proprietary Kenmore, DieHard, WallyHome, Bongo, Covington, Simply Styled, Everlast, Metaphor, Roebuck & Co., Outdoor Life and Structure brand merchandise, and other brand merchandise such as Craftsman, Roadhandler and Levi's. Lands' End, Inc. continues to operate 151 "store within a store" departments inside Sears Domestic Full-line locations. We also have 423 Sears Auto Centers operating in association with Full-line stores. In addition, there are 19 free-standing Auto Centers that operate independently of Full-line stores. Sears extends the availability of its product selection through the use of its sears.com and shopyourway.com websites, which offer an assortment of home, apparel and accessory merchandise and provide members and customers the option of buying through a mobile app or online and picking up their merchandise in one of our Sears Full-line or Kmart stores. |
• | Specialty Stores—23 specialty stores (primarily consisting of the 19 free-standing Auto Centers noted above) located in free-standing, off-mall locations or high-traffic neighborhood shopping centers, including three DieHard Auto Centers - two in Detroit and one in San Antonio. Specialty stores also include Sears Appliances and Mattresses stores in Ft. Collins, Colorado, Camp Hill, Pennsylvania, Pharr, Texas and Honolulu, Hawaii. |
• | Commercial Sales—We sell Kenmore appliances to home builders and property managers through Kenmore Direct, the business-to-business sales organization of KCD Brands. Kenmore Direct operates using a number of sales channels including an Amazon Business sales account. We also sell a wide assortment of appliance brands including luxury brands, parts and services to builders, developers, designers, among other commercial and residential customers through Monark Premium Appliance Co., which includes California Builder Appliances, Inc. (d/b/a Monark Premium Appliance Co. of California), Florida Builder Appliances, Inc. (d/b/a Monark Premium Appliance Co.) and Starwest, LLC. (d/b/a Monark Premium Appliance Co. of Arizona). |
• | Home Services—Product Repair Services, the nation's No. 1 provider of appliance and product repair services, is a key element in our active relationship with nearly 30 million households. With approximately 5,200 service technicians making over five million service calls annually, this business delivers a broad range of retail-related residential and commercial services across all 50 states, Puerto Rico, Guam and the Virgin Islands under either the Sears Parts & Repair Services or A&E Factory Service trade names. Commercial and residential customers can obtain parts and repair services for all major brands of products within the appliances, lawn and garden equipment, consumer electronics, floor care products, and heating and cooling systems categories. We also provide repair parts with supporting instructions for "do-it-yourself" members and customers through our searspartsdirect.com website. This business also offers protection agreements, home warranties and Kenmore and Carrier brand residential heating and cooling systems. Home Services also includes home improvement services (primarily siding, windows, cabinet refacing, kitchen remodeling, roofing, carpet and upholstery cleaning, air duct |
• | Delivery and Installation—Provides both home delivery and retail installation services for Holdings' retail operations with over three million deliveries and installation calls made annually. Also includes Innovel Solutions, which provides delivery services for third party customers. |
Item 1A. | Risk Factors |
• | actions by our competitors, including opening of new stores in our existing markets or changes to the way these competitors go to market online; |
• | our ability to integrate and deliver an attractive online retail experience; |
• | seasonal fluctuations due to weather conditions; |
• | changes in our merchandise strategy and mix; |
• | changes in population and other demographics; and |
• | timing of our promotional events. |
• | potential economic and political instability in countries where our suppliers are located; |
• | increases in shipping costs; |
• | manufacturing and transportation delays and interruptions, including without limitation, delays and interruptions resulting from labor slowdowns, strikes, or other disruptions at any port where merchandise we purchase enters the U.S.; |
• | the availability of raw materials to suppliers; |
• | supplier financial instability; |
• | supplier compliance with applicable laws, including labor and environmental laws, and with our global compliance program for suppliers and factories; |
• | merchandise safety and quality issues, adverse fluctuations in currency exchange rates; and |
• | changes in U.S. and foreign laws affecting the importation and taxation of goods, including duties, tariffs and quotas, or changes in the enforcement of those laws. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Sears Domestic | |||||||||
State / Territory | Kmart | Full-line Stores | Specialty Stores | ||||||
Alabama | — | 2 | — | ||||||
Alaska | — | 3 | — | ||||||
Arizona | 4 | 12 | — | ||||||
Arkansas | 2 | 2 | — | ||||||
California | 55 | 70 | 3 | ||||||
Colorado | 4 | 9 | 1 | ||||||
Connecticut | 3 | 6 | — | ||||||
Delaware | 4 | 3 | — | ||||||
Florida | 20 | 45 | 1 | ||||||
Georgia | 6 | 13 | — | ||||||
Hawaii | 2 | 4 | 1 | ||||||
Idaho | 3 | 4 | — | ||||||
Illinois | 12 | 21 | 4 | ||||||
Indiana | 12 | 10 | — | ||||||
Iowa | 9 | 5 | — | ||||||
Kansas | 3 | 2 | — | ||||||
Kentucky | 5 | 4 | — | ||||||
Louisiana | 4 | 8 | — | ||||||
Maine | 4 | 3 | — | ||||||
Maryland | 11 | 15 | — | ||||||
Massachusetts | 9 | 17 | — | ||||||
Michigan | 15 | 17 | 1 | ||||||
Minnesota | 5 | 6 | — | ||||||
Mississippi | 2 | 3 | 1 | ||||||
Missouri | 5 | 8 | — | ||||||
Montana | 5 | 1 | — | ||||||
Nebraska | 1 | 4 | — | ||||||
Nevada | 5 | 5 | 1 | ||||||
New Hampshire | 4 | 5 | — | ||||||
New Jersey | 17 | 16 | 1 | ||||||
New Mexico | 7 | 4 | — | ||||||
New York | 30 | 28 | 3 | ||||||
North Carolina | 15 | 16 | — | ||||||
North Dakota | 5 | 2 | — | ||||||
Ohio | 14 | 19 | — | ||||||
Oklahoma | 2 | 3 | — | ||||||
Oregon | 5 | 6 | 1 | ||||||
Pennsylvania | 47 | 23 | 2 | ||||||
Rhode Island | — | — | — | ||||||
South Carolina | 6 | 6 | — | ||||||
South Dakota | 1 | 2 | — | ||||||
Tennessee | 7 | 13 | — | ||||||
Texas | 3 | 46 | 2 | ||||||
Utah | 1 | 2 | — | ||||||
Vermont | 2 | 1 | — | ||||||
Virginia | 6 | 16 | — | ||||||
Washington | 6 | 16 | 1 | ||||||
West Virginia | 7 | 3 | — | ||||||
Wisconsin | 7 | 8 | — | ||||||
Wyoming | 4 | 1 | — | ||||||
Puerto Rico | 21 | 9 | — | ||||||
U.S. Virgin Islands | 4 | — | — | ||||||
Guam | 1 | — | — | ||||||
Totals | 432 | 547 | 23 |
Sears Domestic | |||||||||
Kmart | Full-line Stores | Specialty Stores | |||||||
Owned | 48 | 243 | 16 | ||||||
Leased | 384 | 304 | 7 | ||||||
February 3, 2018 | 432 | 547 | 23 |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Name | Position | Date First Became an Executive Officer | Age | |||
Edward S. Lampert | Chairman of the Board and Chief Executive Officer | 2013 | 55 | |||
Robert A. Riecker | Chief Financial Officer | 2012 | 53 | |||
Julie Ainsworth | Chief People Officer | 2017 | 46 | |||
J. Mitchell Bowling | Chief Executive Officer, Sears Home Services | 2017 | 51 | |||
Leena Munjal | Chief Digital Officer | 2013 | 41 | |||
Robert (B.J.) Naedele | Chief Commercial Officer, Shop Your Way | 2017 | 39 | |||
Perry (Dean) Schwartz | President, Hardlines | 2017 | 49 | |||
Stephen L. Sitley | General Counsel and Chief Compliance Officer | 2017 | 54 |
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Fiscal Year 2017 | |||||||||||||||
Sears Holdings | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Common stock price | |||||||||||||||
High | $ | 14.32 | $ | 11.49 | $ | 9.63 | $ | 5.85 | |||||||
Low | $ | 5.50 | $ | 6.20 | $ | 5.48 | $ | 2.31 | |||||||
Fiscal Year 2016 | |||||||||||||||
Sears Holdings | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Common stock price | |||||||||||||||
High | $ | 19.12 | $ | 16.55 | $ | 18.18 | $ | 13.84 | |||||||
Low | $ | 14.05 | $ | 10.52 | $ | 10.50 | $ | 7.08 |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans* | ||
Equity compensation plans approved by security holders | — | — | 3,778,115 | ||
Equity compensation plans not approved by security holders | — | — | — | ||
Total | — | — | 3,778,115 |
* | Represents shares of common stock that may be issued pursuant to our 2013 Stock Plan. Awards under the 2013 Stock Plan may be restricted stock, stock unit awards, incentive stock options, nonqualified stock options, stock appreciation rights, or certain other stock-based awards. The 2013 Stock Plan also allows common stock of Holdings to be awarded in settlement of an incentive award under the Sears Holdings Corporation Umbrella Incentive Program (and any incentive program established thereunder). The shares shown exclude shares covered by an outstanding plan award that, subsequent to February 3, 2018, ultimately are not delivered on an unrestricted basis (for example, because the award is forfeited, canceled, settled in cash or used to satisfy tax withholding obligations). |
Feb 1, 2013 | Jan 31, 2014 | Jan 30, 2015 | Jan 29, 2016 | Jan 27, 2017 | Feb 2, 2018 | ||||||||||||||||||
Sears Holdings | $ | 100.00 | $ | 76.49 | $ | 88.75 | $ | 56.75 | $ | 24.84 | $ | 7.87 | |||||||||||
S&P 500 Index | $ | 100.00 | $ | 120.29 | $ | 137.39 | $ | 136.47 | $ | 164.93 | $ | 202.57 | |||||||||||
S&P 500 Retailing Index | $ | 100.00 | $ | 125.31 | $ | 150.49 | $ | 175.76 | $ | 208.37 | $ | 294.43 | |||||||||||
S&P 500 Department Stores Index | $ | 100.00 | $ | 116.05 | $ | 144.80 | $ | 104.42 | $ | 84.22 | $ | 103.54 |
Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program(2) | Average Price Paid per Share for Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | |||||||||||||
October 29, 2017 to November 25, 2017 | — | $ | — | — | $ | — | |||||||||||
November 26, 2017 to December 30, 2017 | — | — | — | — | |||||||||||||
December 31, 2017 to February 3, 2018 | — | — | — | — | |||||||||||||
Total | — | $ | — | — | $ | — | $ | 503,907,832 |
(1) | Consists entirely of 0 shares acquired from associates to meet withholding tax requirements from the vesting of restricted stock. |
(2) | Our common share repurchase program was initially announced on September 14, 2005 and has a total authorization since inception of the program of $6.5 billion, including the authorizations to purchase up to an additional $500 million of common stock on each of December 17, 2009 and May 2, 2011. The program has no stated expiration date. |
Item 6. | Selected Financial Data |
Fiscal | |||||||||||||||||||
dollars in millions, except per share data | 2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||
Summary of Operations | |||||||||||||||||||
Revenues(1) | $ | 16,702 | $ | 22,138 | $ | 25,146 | $ | 31,198 | $ | 36,188 | |||||||||
Domestic comparable store sales % | (13.5 | )% | (7.4 | )% | (9.2 | )% | (1.8 | )% | (3.8 | )% | |||||||||
Net loss from continuing operations attributable to Holdings' shareholders | (383 | ) | (2,221 | ) | (1,129 | ) | (1,682 | ) | (1,365 | ) | |||||||||
Per Common Share | |||||||||||||||||||
Basic: | |||||||||||||||||||
Net loss from continuing operations attributable to Holdings' shareholders | $ | (3.57 | ) | $ | (20.78 | ) | $ | (10.59 | ) | $ | (15.82 | ) | $ | (12.87 | ) | ||||
Diluted: | |||||||||||||||||||
Net loss from continuing operations attributable to Holdings' shareholders | $ | (3.57 | ) | $ | (20.78 | ) | $ | (10.59 | ) | $ | (15.82 | ) | $ | (12.87 | ) | ||||
Holdings' book value per common share | $ | (34.54 | ) | $ | (35.71 | ) | $ | (18.40 | ) | $ | (8.93 | ) | $ | 16.34 | |||||
Financial Data | |||||||||||||||||||
Total assets | $ | 7,262 | $ | 9,362 | $ | 11,337 | $ | 13,185 | $ | 18,234 | |||||||||
Long-term debt | 2,199 | 3,470 | 1,971 | 2,878 | 2,531 | ||||||||||||||
Long-term capital lease obligations | 50 | 103 | 137 | 210 | 275 | ||||||||||||||
Capital expenditures | 80 | 142 | 211 | 270 | 329 | ||||||||||||||
Adjusted EBITDA(2) | (562 | ) | (808 | ) | (836 | ) | (718 | ) | (487 | ) | |||||||||
Number of stores | 1,002 | 1,430 | 1,672 | 1,725 | 2,429 |
(1) | We follow a retail-based financial reporting calendar. Accordingly, the fiscal year ended February 3, 2018 contained 53 weeks, while all other years presented contained 52 weeks. |
(2) | See "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 for a reconciliation of this measure to GAAP and a discussion of management’s reasoning for using such measure. The periods presented were impacted by certain significant items, which affected the comparability of amounts reflected in the above selected financial data. For 2017, 2016 and 2015, these significant items are discussed within Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." 2014 results include the impact of domestic pension expense of $89 million, store closings and severance of $224 million, other expenses of $50 million and the results of Lands' End and Sears Canada that were included in the results of operations prior to the separations of $(10) million and $71 million, respectively. 2013 results include the impact of domestic pension expense of $162 million, domestic store closings and severance of $130 million, and the results of Lands' End and Sears Canada that were included in the results of our operations prior to the separations of $(150) million and $(3) million, respectively. Both 2014 and 2013 also included charges related to impairments, as well as gains on sales of assets. |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | Overview of Holdings |
• | Results of Operations: |
• | Analysis of Consolidated Financial Condition |
• | Contractual Obligations and Off-Balance Sheet Arrangements |
• | Application of Critical Accounting Policies and Estimates |
• | Cautionary Statement Regarding Forward-Looking Information |
dollars in millions, except per share data | 2017 | 2016 | 2015 | |||||||||
REVENUES | ||||||||||||
Merchandise sales | $ | 13,409 | $ | 18,236 | $ | 20,936 | ||||||
Services and other | 3,293 | 3,902 | 4,210 | |||||||||
Total revenues | 16,702 | 22,138 | 25,146 | |||||||||
COSTS AND EXPENSES | ||||||||||||
Cost of sales, buying and occupancy - merchandise sales | 11,349 | 15,184 | 16,817 | |||||||||
Gross margin dollars - merchandise sales | 2,060 | 3,052 | 4,119 | |||||||||
Gross margin rate - merchandise sales | 15.4 | % | 16.7 | % | 19.7 | % | ||||||
Cost of sales and occupancy - services and other | 1,826 | 2,268 | 2,519 | |||||||||
Gross margin dollars - services and other | 1,467 | 1,634 | 1,691 | |||||||||
Gross margin rate - services and other | 44.5 | % | 41.9 | % | 40.2 | % | ||||||
Total cost of sales, buying and occupancy | 13,175 | 17,452 | 19,336 | |||||||||
Total gross margin dollars | 3,527 | 4,686 | 5,810 | |||||||||
Total gross margin rate | 21.1 | % | 21.2 | % | 23.1 | % | ||||||
Selling and administrative | 5,131 | 6,109 | 6,857 | |||||||||
Selling and administrative expense as a percentage of total revenues | 30.7 | % | 27.6 | % | 27.3 | % | ||||||
Depreciation and amortization | 332 | 375 | 422 | |||||||||
Impairment charges | 142 | 427 | 274 | |||||||||
Gain on sales of assets | (1,648 | ) | (247 | ) | (743 | ) | ||||||
Total costs and expenses | 17,132 | 24,116 | 26,146 | |||||||||
Operating loss | (430 | ) | (1,978 | ) | (1,000 | ) | ||||||
Interest expense | (539 | ) | (404 | ) | (323 | ) | ||||||
Interest and investment loss | (12 | ) | (26 | ) | (62 | ) | ||||||
Other income | — | 13 | — | |||||||||
Loss before income taxes | (981 | ) | (2,395 | ) | (1,385 | ) | ||||||
Income tax benefit | 598 | 174 | 257 | |||||||||
Net loss | (383 | ) | (2,221 | ) | (1,128 | ) | ||||||
Income attributable to noncontrolling interests | — | — | (1 | ) | ||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | (383 | ) | $ | (2,221 | ) | $ | (1,129 | ) | |||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | ||||||||||||
Diluted loss per share | $ | (3.57 | ) | $ | (20.78 | ) | $ | (10.59 | ) | |||
Diluted weighted average common shares outstanding | 107.4 | 106.9 | 106.6 |
millions | 2017 | 2016 | 2015 | ||||||||
Net loss attributable to Holdings per statement of operations | $ | (383 | ) | $ | (2,221 | ) | $ | (1,129 | ) | ||
Income attributable to noncontrolling interests | — | — | 1 | ||||||||
Income tax benefit | (598 | ) | (174 | ) | (257 | ) | |||||
Interest expense | 539 | 404 | 323 | ||||||||
Interest and investment loss | 12 | 26 | 62 | ||||||||
Other income | — | (13 | ) | — | |||||||
Operating loss | (430 | ) | (1,978 | ) | (1,000 | ) | |||||
Depreciation and amortization | 332 | 375 | 422 | ||||||||
Gain on sales of assets | (1,648 | ) | (247 | ) | (743 | ) | |||||
Impairment charges | 142 | 427 | 274 | ||||||||
Before excluded items | (1,604 | ) | (1,423 | ) | (1,047 | ) | |||||
Closed store reserve and severance | 462 | 384 | 98 | ||||||||
Pension expense | 656 | 288 | 229 | ||||||||
Other(1) | 2 | 31 | (64 | ) | |||||||
Amortization of deferred Seritage gain | (78 | ) | (88 | ) | (52 | ) | |||||
Adjusted EBITDA | $ | (562 | ) | $ | (808 | ) | $ | (836 | ) |
2017 | 2016 | 2015 | |||||||||||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | ||||||||||||||||||||
Operating income (loss) per statement of operations | $ | 367 | $ | (797 | ) | $ | (430 | ) | $ | (530 | ) | $ | (1,448 | ) | $ | (1,978 | ) | $ | (292 | ) | $ | (708 | ) | $ | (1,000 | ) | |||
Depreciation and amortization | 60 | 272 | 332 | 71 | 304 | 375 | 72 | 350 | 422 | ||||||||||||||||||||
Gain on sales of assets | (881 | ) | (767 | ) | (1,648 | ) | (181 | ) | (66 | ) | (247 | ) | (185 | ) | (558 | ) | (743 | ) | |||||||||||
Impairment charges | 16 | 126 | 142 | 22 | 405 | 427 | 14 | 260 | 274 | ||||||||||||||||||||
Before excluded items | (438 | ) | (1,166 | ) | (1,604 | ) | (618 | ) | (805 | ) | (1,423 | ) | (391 | ) | (656 | ) | (1,047 | ) | |||||||||||
Closed store reserve and severance | 281 | 181 | 462 | 318 | 66 | 384 | 86 | 12 | 98 | ||||||||||||||||||||
Pension expense | — | 656 | 656 | — | 288 | 288 | — | 229 | 229 | ||||||||||||||||||||
Other(1) | (23 | ) | 25 | 2 | 15 | 16 | 31 | 43 | (107 | ) | (64 | ) | |||||||||||||||||
Amortization of deferred Seritage gain | (11 | ) | (67 | ) | (78 | ) | (17 | ) | (71 | ) | (88 | ) | (11 | ) | (41 | ) | (52 | ) | |||||||||||
Adjusted EBITDA | $ | (191 | ) | $ | (371 | ) | $ | (562 | ) | $ | (302 | ) | $ | (506 | ) | $ | (808 | ) | $ | (273 | ) | $ | (563 | ) | $ | (836 | ) | ||
% to revenues | (3.4 | )% | (3.3 | )% | (3.4 | )% | (3.5 | )% | (3.8 | )% | (3.6 | )% | (2.7 | )% | (3.8 | )% | (3.3 | )% |
millions | Year Ended February 3, 2018 | |||||||||||||||||||
Other Excluded Items: | Closed store reserve and severance | Pension expense | Other(1) | Amortization of deferred Seritage gain | Total | |||||||||||||||
Gross margin impact | $ | 227 | $ | — | $ | — | $ | (78 | ) | $ | 149 | |||||||||
Selling and administrative impact | 235 | 656 | 2 | — | 893 | |||||||||||||||
Total | $ | 462 | $ | 656 | $ | 2 | $ | (78 | ) | $ | 1,042 | |||||||||
millions | Year Ended January 28, 2017 | |||||||||||||||||||
Other Excluded Items: | Closed store reserve and severance | Pension expense | Other(1) | Amortization of deferred Seritage gain | Total | |||||||||||||||
Gross margin impact | $ | 226 | $ | — | $ | (33 | ) | $ | (88 | ) | $ | 105 | ||||||||
Selling and administrative impact | 158 | 288 | 64 | — | 510 | |||||||||||||||
Total | $ | 384 | $ | 288 | $ | 31 | $ | (88 | ) | $ | 615 | |||||||||
millions | Year Ended January 30, 2016 | |||||||||||||||||||
Other Excluded Items: | Closed store reserve and severance | Pension expense | Other(1) | Amortization of deferred Seritage gain | Total | |||||||||||||||
Gross margin impact | $ | 44 | $ | — | $ | (146 | ) | $ | (52 | ) | $ | (154 | ) | |||||||
Selling and administrative impact | 54 | 229 | 82 | — | 365 | |||||||||||||||
Total | $ | 98 | $ | 229 | $ | (64 | ) | $ | (52 | ) | $ | 211 |
• | EBITDA excludes the effects of financings and investing activities by eliminating the effects of interest and depreciation costs; |
• | Management considers gains/(losses) on the sale of assets to result from investing decisions rather than ongoing operations; and |
• | Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations and reflect past investment decisions. |
• | Closed store reserve and severance – We are transforming our Company to a less asset-intensive business model. Throughout this transformation, we continue to make choices related to our stores, which could result in sales, closures, lease terminations or a variety of other decisions. |
• | Pension expense – Contributions to our pension plans remain a significant use of our cash on an annual basis. Cash contributions to our pension and postretirement plans are separately disclosed on the cash flow statement. While the Company's pension plan is frozen, and thus associates do not currently earn pension benefits, we have a legacy pension obligation for past service performed by Kmart and Sears associates. The annual pension expense included in our statement of operations related to these legacy domestic pension plans was relatively minimal in years prior to 2009. However, due to the severe decline in the capital markets that occurred in the latter part of 2008, and the resulting abnormally low interest rates, which continue to persist, our domestic pension expense was $656 million in 2017, $288 million in 2016 and $229 million in 2015. Pension expense is comprised of interest cost, expected return on plan assets and recognized net loss and other. This adjustment eliminates the entire pension expense from the statement of operations to improve comparability. Pension expense is included in the determination of net loss. |
millions | 2017 | 2016 | 2015 | ||||||||
Components of net periodic expense: | |||||||||||
Interest cost | $ | 180 | $ | 227 | $ | 210 | |||||
Expected return on plan assets | (190 | ) | (202 | ) | (249 | ) | |||||
Settlements | 479 | — | — | ||||||||
Recognized net loss and other | 187 | 263 | 268 | ||||||||
Net periodic expense | $ | 656 | $ | 288 | $ | 229 |
• | Other – Consisted of items associated with legal matters, expenses associated with natural disasters, transaction costs associated with strategic initiatives, one-time credits from vendors and other expenses. |
• | Amortization of deferred Seritage gain – A portion of the gain on the Seritage transaction and certain other sale-leaseback transactions were deferred and will be recognized in proportion to the related rent expense, which is a component of cost of sales, buying and occupancy in the Consolidated Statements of Operations, over the lease terms. Management considers the amortization of the deferred Seritage gain to result from investing decisions rather than ongoing operations. |
dollars in millions | 2017 | 2016 | 2015 | ||||||||
Total revenues | $ | 5,618 | $ | 8,650 | $ | 10,188 | |||||
Comparable store sales % | (11.4 | )% | (5.3 | )% | (7.3 | )% | |||||
Cost of sales, buying and occupancy | 4,601 | 7,093 | 8,042 | ||||||||
Gross margin dollars | 1,017 | 1,557 | 2,146 | ||||||||
Gross margin rate | 18.1 | % | 18.0 | % | 21.1 | % | |||||
Selling and administrative | 1,455 | 2,175 | 2,537 | ||||||||
Selling and administrative expense as a percentage of total revenues | 25.9 | % | 25.1 | % | 24.9 | % | |||||
Depreciation and amortization | 60 | 71 | 72 | ||||||||
Impairment charges | 16 | 22 | 14 | ||||||||
Gain on sales of assets | (881 | ) | (181 | ) | (185 | ) | |||||
Total costs and expenses | 5,251 | 9,180 | 10,480 | ||||||||
Operating income (loss) | $ | 367 | $ | (530 | ) | $ | (292 | ) | |||
Adjusted EBITDA | $ | (191 | ) | $ | (302 | ) | $ | (273 | ) | ||
Total Kmart stores | 432 | 735 | 941 |
dollars in millions | 2017 | 2016 | 2015 | ||||||||
Total revenues | $ | 11,084 | $ | 13,488 | $ | 14,958 | |||||
Comparable store sales % | (15.2 | )% | (9.3 | )% | (11.1 | )% | |||||
Cost of sales, buying and occupancy | 8,574 | 10,359 | 11,294 | ||||||||
Gross margin dollars | 2,510 | 3,129 | 3,664 | ||||||||
Gross margin rate | 22.6 | % | 23.2 | % | 24.5 | % | |||||
Selling and administrative | 3,676 | 3,934 | 4,320 | ||||||||
Selling and administrative expense as a percentage of total revenues | 33.2 | % | 29.2 | % | 28.9 | % | |||||
Depreciation and amortization | 272 | 304 | 350 | ||||||||
Impairment charges | 126 | 405 | 260 | ||||||||
Gain on sales of assets | (767 | ) | (66 | ) | (558 | ) | |||||
Total costs and expenses | 11,881 | 14,936 | 15,666 | ||||||||
Operating loss | $ | (797 | ) | $ | (1,448 | ) | $ | (708 | ) | ||
Adjusted EBITDA | $ | (371 | ) | $ | (506 | ) | $ | (563 | ) | ||
Number of: | |||||||||||
Full-line stores | 547 | 670 | 705 | ||||||||
Specialty stores | 23 | 25 | 26 | ||||||||
Total Sears Stores | 570 | 695 | 731 |
millions | February 3, 2018 | January 28, 2017 | |||||
Cash and equivalents | $ | 113 | $ | 196 | |||
Cash posted as collateral | 4 | 3 | |||||
Credit card deposits in transit | 65 | 87 | |||||
Total cash and cash equivalents | 182 | 286 | |||||
Restricted cash | 154 | — | |||||
Total cash balances | $ | 336 | $ | 286 |
• | The completion of various secured and unsecured financing transactions, the extension of the maturity of certain of our indebtedness, and the amendment to other terms of certain of our indebtedness to increase our overall financial flexibility, including: |
◦ | a $750 million Senior Secured Term Loan (the "2016 Term Loan") under its domestic credit facility maturing in July 2020; |
◦ | a $500 million real estate loan facility in April 2016 (the "2016 Secured Loan Facility"), initially maturing in July 2017, initially extended to January 2018, subsequently extended to April 2018, and then further extended to July 2018, subject to the payment of an extension fee; |
◦ | an additional $500 million real estate loan facility in January 2017 (the "2017 Secured Loan Facility"), maturing in July 2020; |
◦ | a Second Lien Credit Agreement in September 2016, pursuant to which the Company borrowed $300 million under a term loan (the "Second Lien Term Loan"), maturing in July 2020; |
◦ | an amendment in July 2017 to the Second Lien Credit Agreement to provide for the creation of a $500 million uncommitted second-lien line of credit loan facility under which the Company may borrow line of credit loans (the "Line of Credit Loans"), and a subsequent amendment to that facility to extend the maximum duration of the Line of Credit Loans from 180 days to 270 days and permit total borrowings of up to $600 million; |
◦ | a Letter of Credit and Reimbursement Agreement in December 2016, originally providing for up to a $500 million secured standby letter of credit facility (the "LC Facility") from certain affiliates of ESL Investments, Inc. ("ESL"); |
◦ | a $200 million real estate loan facility (the "Incremental Loans") in October 2017, with the Incremental Loans maturing in April 2018, with the option to extend to July 2018, subject to the extension of the 2016 Secured Loan Facility; |
◦ | the extension of the maturity date of the initial $1.0 billion term loan (the "Term Loan") under our Amended Domestic Credit Agreement from June 2018 to January 2019 (with a right of the borrowers thereunder to further extend such maturity, subject to the satisfaction of certain conditions, to July 2019); |
◦ | amendments to our Amended Domestic Credit Agreement and certain other indebtedness which reduced the aggregate revolver commitments from $1.971 billion to $1.5 billion, but also implemented other modifications to covenants and reserves against the domestic credit facility borrowing base that improved net liquidity, and increased the maximum permissible short-term borrowings of the Company from $750 million to $1.25 billion; |
◦ | a Term Loan Credit Agreement in January 2018 providing for a secured term loan facility (the "Term Loan Facility"), secured by substantially all of the unencumbered intellectual property of the Company and its subsidiaries, other than intellectual property relating to the Kenmore and DieHard brands, as well as by certain real property interests, in each case subject to certain exclusions. An aggregate principal amount of $250 million was borrowed with the ability to borrow an additional $50 million against the same collateral; |
◦ | an amendment to the indenture governing our 6 5/8% Senior Secured Notes due 2018 to increase the maximum permissible borrowings secured by inventory to 75% of book value of such inventory from 65% and defer the collateral coverage test for purposes of the repurchase offer covenant in the indenture to restart it with the second quarter of 2018 (such that no collateral coverage event can occur until the end of the third quarter of 2018); |
◦ | an amendment to the March 2016 Pension Plan Protection and Forbearance Agreement (the "PPPFA") with the Pension Benefit Guaranty Corporation (the "PBGC") providing for the release of 138 of our properties from a ring-fence arrangement created under our five-year PPPFA in exchange for the payment of approximately $407 million into the Sears pension plans. This agreement provides the Company with financial flexibility through the ability to monetize properties, and, in addition, provides funding relief from contributions to the pension plans for the next two years; and |
◦ | various commercial paper issuances to meet short-term liquidity needs, with the maximum amount outstanding during fiscal 2017 of $160 million. |
• | Achievement of $1.25 billion in annualized cost savings in 2017 as part of the restructuring program announced earlier this year. Actions taken to realize the annualized cost savings have included simplification of the organizational structure of Holdings, streamlining of operations, reducing unprofitable categories and the closure of under-performing stores. In 2017, we closed approximately 435 stores, and an additional 103 stores previously announced for closure are expected to be closed by the end of the first quarter of 2018. As a result of these actions, the Company has begun to see improvement in the operations in fiscal 2017, as the restructuring program actions, including the closing of unprofitable stores, have begun to take effect. |
• | The sale of the Craftsman brand to Stanley Black & Decker for consideration consisting of cash payments and a royalty. |
• | Sales of properties and investments for proceeds of $1.1 billion and $386 million in 2017 and 2016, respectively. |
• | Sales of the properties securing the $200 million Secured Loan to fund the repayment of such Secured Loan; |
• | Additional borrowings under the Mezzanine Loan Agreement and the Term Loan Facility; |
• | Renegotiation of certain commercial arrangements; |
• | Monetization of the Kenmore brand; |
• | Extension of maturities beyond March 2019 of Line of Credit Loans under the Second Lien Credit Agreement, the 2016 Secured Loan Facility, the Incremental Secured Loan Facility and the LC Facility and the Term Loan under the Amended Domestic Credit Agreement; |
• | Additional borrowings secured by real estate assets or borrowings under the short-term basket; and |
• | Further restructurings to help manage expenses and improve profitability. |
millions | February 3, 2018 | January 28, 2017 | |||||
Short-term borrowings: | |||||||
Unsecured commercial paper | $ | — | $ | — | |||
Secured borrowings | 271 | — | |||||
Line of credit loans | 500 | — | |||||
Incremental loans | 144 | — | |||||
Long-term debt, including current portion: | |||||||
Notes, term loan and debentures outstanding | 3,145 | 4,018 | |||||
Capitalized lease obligations | 72 | 145 | |||||
Total borrowings | $ | 4,132 | $ | 4,163 |
millions | 2017 | 2016 | |||||
Secured borrowings: | |||||||
Maximum daily amount outstanding during the period | $ | 799 | $ | 1,150 | |||
Average amount outstanding during the period | 374 | 334 | |||||
Amount outstanding at period-end | 271 | — | |||||
Weighted average interest rate | 6.2 | % | 4.6 | % | |||
Unsecured commercial paper: | |||||||
Maximum daily amount outstanding during the period | $ | 160 | $ | 250 | |||
Average amount outstanding during the period | 26 | 106 | |||||
Amount outstanding at period-end | — | — | |||||
Weighted average interest rate | 9.1 | % | 7.9 | % | |||
Line of credit loans: | |||||||
Maximum daily amount outstanding during the period | $ | 500 | $ | — | |||
Average amount outstanding during the period | 214 | — | |||||
Amount outstanding at period-end | 500 | — | |||||
Weighted average interest rate | 10.2 | % | — | % |
Total | Payments Due by Period | ||||||||||||||||||||||
Contractual Obligations | Within 1 Year | 1-3 Years | 3-5 Years | After 5 Years | Other | ||||||||||||||||||
millions | |||||||||||||||||||||||
Operating leases | $ | 2,839 | $ | 537 | $ | 807 | $ | 534 | $ | 961 | $ | — | |||||||||||
Short-term borrowings | 915 | 915 | — | — | — | — | |||||||||||||||||
Capital lease obligations | 115 | 28 | 21 | 8 | 58 | — | |||||||||||||||||
Royalty license fees(1) | 60 | 36 | 24 | — | — | — | |||||||||||||||||
Other | 2 | 2 | — | — | — | — | |||||||||||||||||
Pension funding obligations(2) | 1,682 | 280 | 485 | 431 | 486 | — | |||||||||||||||||
Long-term debt including current portion and interest | 4,155 | 1,222 | 2,381 | 40 | 512 | — | |||||||||||||||||
Liability and interest related to uncertain tax positions(3) | 181 | — | — | — | — | 181 | |||||||||||||||||
Total contractual obligations | $ | 9,949 | $ | 3,020 | $ | 3,718 | $ | 1,013 | $ | 2,017 | $ | 181 |
(1) | We pay royalties under various merchandise license agreements, which are generally based on sales of products covered under these agreements. We currently have license agreements for which we pay royalties, including those to use Joe Boxer and Everlast. Royalty license fees represent the minimum the Company is obligated to pay, regardless of sales, as guaranteed royalties under these license agreements. |
(2) | In March 2018, the Company contributed approximately $282 million to our pension plans and deposited $125 million into an escrow for the benefit of our pension plans, both from proceeds of the Secured Loan and the Mezzanine Loan. The remaining proceeds from the sale of the Craftsman Receivable are also held within an escrow for the benefit of our pension plans. Under our agreement with the PBGC, these escrowed amounts will be contributed to our pension plans and, when so contributed, will be fully credited against the Company’s minimum pension funding obligations in 2018 and 2019. As a result of these transactions, the Company has been relieved of contributions to our pension plans for approximately two years (other than the contributions from escrow described above and a $20 million supplemental payment due in the second quarter of 2018). See Note 7 of Notes to Consolidated Financial Statements for further information. |
(3) | At February 3, 2018, our uncertain tax position liability and gross interest payable were $130 million and $51 million, respectively. We are unable to reasonably estimate the timing of liabilities and interest payments arising from uncertain tax positions in individual years due to the uncertainties in the timing of the effective settlement of tax positions. |
millions | Bank Issued | SRAC Issued | Other | Total | |||||||||||
Standby letters of credit | $ | 647 | $ | 6 | $ | — | $ | 653 | |||||||
Commercial letters of credit | — | 31 | — | 31 | |||||||||||
Secondary lease obligations and performance guarantee | — | — | 164 | 164 |
• | it requires assumptions to be made about matters that were highly uncertain at the time the estimate was made; and |
• | changes in the estimate that are reasonably likely to occur from period to period or different estimates that could have been selected would have a material effect on our financial condition, cash flows or results of operations. |
2017 | 2016 | 2015 | |||||||
Actual return on plan assets | 7.98 | % | 16.08 | % | (7.35 | )% | |||
Expected return on plan assets | 6.50 | % | 6.50 | % | 7.00 | % |
millions | 1 percentage-point Increase | 1 percentage-point Decrease | |||||
Effect on interest cost component | $ | 20 | $ | (26 | ) | ||
Effect on pension benefit obligation | $ | (384 | ) | $ | 460 |
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
Page | |
dollars in millions, except per share data | 2017 | 2016 | 2015 | ||||||||
REVENUES | |||||||||||
Merchandise sales | $ | 13,409 | $ | 18,236 | $ | 20,936 | |||||
Services and other(1)(2) | 3,293 | 3,902 | 4,210 | ||||||||
Total revenues | 16,702 | 22,138 | 25,146 | ||||||||
COSTS AND EXPENSES | |||||||||||
Cost of sales, buying and occupancy - merchandise sales(3) | 11,349 | 15,184 | 16,817 | ||||||||
Cost of sales and occupancy - services and other(1) | 1,826 | 2,268 | 2,519 | ||||||||
Total cost of sales, buying and occupancy | 13,175 | 17,452 | 19,336 | ||||||||
Selling and administrative | 5,131 | 6,109 | 6,857 | ||||||||
Depreciation and amortization | 332 | 375 | 422 | ||||||||
Impairment charges | 142 | 427 | 274 | ||||||||
Gain on sales of assets | (1,648 | ) | (247 | ) | (743 | ) | |||||
Total costs and expenses | 17,132 | 24,116 | 26,146 | ||||||||
Operating loss | (430 | ) | (1,978 | ) | (1,000 | ) | |||||
Interest expense | (539 | ) | (404 | ) | (323 | ) | |||||
Interest and investment loss | (12 | ) | (26 | ) | (62 | ) | |||||
Other income | — | 13 | — | ||||||||
Loss before income taxes | (981 | ) | (2,395 | ) | (1,385 | ) | |||||
Income tax benefit | 598 | 174 | 257 | ||||||||
Net loss | (383 | ) | (2,221 | ) | (1,128 | ) | |||||
Income attributable to noncontrolling interests | — | — | (1 | ) | |||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | (383 | ) | $ | (2,221 | ) | $ | (1,129 | ) | ||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | |||||||||||
Basic loss per share | $ | (3.57 | ) | $ | (20.78 | ) | $ | (10.59 | ) | ||
Diluted loss per share | $ | (3.57 | ) | $ | (20.78 | ) | $ | (10.59 | ) | ||
Basic weighted average common shares outstanding | 107.4 | 106.9 | 106.6 | ||||||||
Diluted weighted average common shares outstanding | 107.4 | 106.9 | 106.6 |
(1) | Includes merchandise sales to Sears Hometown and Outlet Stores, Inc. ("SHO") of $918 million, $1.1 billion and $1.3 billion in 2017, 2016 and 2015, respectively. Pursuant to the terms of the separation, merchandise is sold to SHO at cost. |
millions | 2017 | 2016 | 2015 | ||||||||
Net loss | $ | (383 | ) | $ | (2,221 | ) | $ | (1,128 | ) | ||
Other comprehensive income (loss) | |||||||||||
Pension and postretirement adjustments, net of tax | 478 | 366 | 113 | ||||||||
Currency translation adjustments, net of tax | 2 | — | (1 | ) | |||||||
Dissolution of noncontrolling interest | — | (7 | ) | — | |||||||
Total other comprehensive income | 480 | 359 | 112 | ||||||||
Comprehensive income (loss) | 97 | (1,862 | ) | (1,016 | ) | ||||||
Comprehensive (income) loss attributable to noncontrolling interests | — | 7 | (1 | ) | |||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | 97 | $ | (1,855 | ) | $ | (1,017 | ) |
millions | February 3, 2018 | January 28, 2017 | |||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 182 | $ | 286 | |||
Restricted cash | 154 | — | |||||
Accounts receivable(1) | 343 | 466 | |||||
Merchandise inventories | 2,798 | 3,959 | |||||
Prepaid expenses and other current assets(2) | 335 | 285 | |||||
Total current assets | 3,812 | 4,996 | |||||
Property and equipment | |||||||
Land | 659 | 770 | |||||
Buildings and improvements | 2,432 | 2,954 | |||||
Furniture, fixtures and equipment | 868 | 1,133 | |||||
Capital leases | 151 | 224 | |||||
Gross property and equipment | 4,110 | 5,081 | |||||
Less accumulated depreciation and amortization | (2,381 | ) | (2,841 | ) | |||
Total property and equipment, net | 1,729 | 2,240 | |||||
Goodwill | 269 | 269 | |||||
Trade names and other intangible assets | 1,168 | 1,521 | |||||
Other assets | 284 | 336 | |||||
TOTAL ASSETS | $ | 7,262 | $ | 9,362 | |||
LIABILITIES | |||||||
Current liabilities | |||||||
Short-term borrowings(3) | $ | 915 | $ | — | |||
Current portion of long-term debt and capitalized lease obligations(4) | 968 | 590 | |||||
Merchandise payables | 576 | 1,048 | |||||
Other current liabilities(5) | 1,568 | 1,956 | |||||
Unearned revenues | 641 | 748 | |||||
Other taxes | 247 | 339 | |||||
Total current liabilities | 4,915 | 4,681 | |||||
Long-term debt and capitalized lease obligations(6) | 2,249 | 3,573 | |||||
Pension and postretirement benefits | 1,619 | 1,750 | |||||
Deferred gain on sale-leaseback | 362 | 563 | |||||
Sale-leaseback financing obligation | 247 | 235 | |||||
Other long-term liabilities | 1,467 | 1,641 | |||||
Long-term deferred tax liabilities | 126 | 743 | |||||
Total Liabilities | 10,985 | 13,186 | |||||
Commitments and contingencies | |||||||
DEFICIT | |||||||
Sears Holdings Corporation deficit | |||||||
Preferred stock, 20 shares authorized; no shares outstanding | — | — | |||||
Common stock $0.01 par value; 500 shares authorized; 108 and 107 shares outstanding, respectively | 1 | 1 | |||||
Treasury stock—at cost | (5,820 | ) | (5,891 | ) | |||
Capital in excess of par value | 9,063 | 9,130 | |||||
Retained deficit | (5,895 | ) | (5,512 | ) | |||
Accumulated other comprehensive loss | (1,072 | ) | (1,552 | ) | |||
Total Deficit | (3,723 | ) | (3,824 | ) | |||
TOTAL LIABILITIES AND DEFICIT | $ | 7,262 | $ | 9,362 |
(1) | Includes $28 million and $81 million at February 3, 2018 and January 28, 2017, respectively, of net amounts receivable from SHO, $1 million and $14 million of amounts receivable from Seritage at February 3, 2018 and January 28, 2017, respectively, and $1 million of net amounts receivable from Lands' End at February 3, 2018. |
(2) | Includes $6 million of prepaid rent to Seritage at February 3, 2018. |
millions | 2017 | 2016 | 2015 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net loss | $ | (383 | ) | $ | (2,221 | ) | $ | (1,128 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Deferred tax valuation allowance | (1,395 | ) | 836 | 217 | |||||||
Tax benefit resulting from Other Comprehensive Income allocation | — | (71 | ) | — | |||||||
Depreciation and amortization | 332 | 375 | 422 | ||||||||
Impairment charges | 142 | 427 | 274 | ||||||||
Gain on sales of assets | (1,648 | ) | (247 | ) | (743 | ) | |||||
Pension and postretirement plan contributions | (312 | ) | (334 | ) | (311 | ) | |||||
Pension plan settlements | 479 | — | — | ||||||||
Mark-to-market adjustments of financial instruments | 17 | 15 | 66 | ||||||||
Amortization of deferred gain on sale-leaseback | (78 | ) | (88 | ) | (52 | ) | |||||
Amortization of debt issuance costs and accretion of debt discount | 124 | 81 | 60 | ||||||||
Other | (36 | ) | — | — | |||||||
Change in operating assets and liabilities (net of acquisitions and dispositions): | |||||||||||
Deferred income taxes | 778 | (987 | ) | (519 | ) | ||||||
Merchandise inventories | 1,144 | 1,213 | (229 | ) | |||||||
Merchandise payables | (472 | ) | (526 | ) | (47 | ) | |||||
Income and other taxes | (108 | ) | 80 | (95 | ) | ||||||
Other operating assets | 51 | (52 | ) | 54 | |||||||
Other operating liabilities | (477 | ) | 118 | (136 | ) | ||||||
Net cash used in operating activities | (1,842 | ) | (1,381 | ) | (2,167 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Proceeds from sales of property and investments(1) | 1,109 | 386 | 2,730 | ||||||||
Proceeds from Craftsman Sale | 572 | — | — | ||||||||
Proceeds from sales of receivables(2) | 293 | — | — | ||||||||
Purchases of property and equipment | (80 | ) | (142 | ) | (211 | ) | |||||
Net cash provided by investing activities | 1,894 | 244 | 2,519 | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from debt issuances(3) | 1,020 | 2,028 | — | ||||||||
Repayments of debt(4) | (1,356 | ) | (66 | ) | (1,405 | ) | |||||
Increase (decrease) in short-term borrowings, primarily 90 days or less | 271 | (797 | ) | 583 | |||||||
Proceeds from sale-leaseback financing(1) | 106 | 71 | 508 | ||||||||
Debt issuance costs(5) | (43 | ) | (51 | ) | (50 | ) | |||||
Net cash provided by (used in) financing activities | (2 | ) | 1,185 | (364 | ) | ||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 50 | 48 | (12 | ) | |||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR | 286 | 238 | 250 | ||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR | $ | 336 | $ | 286 | $ | 238 | |||||
SUPPLEMENTAL INFORMATION: | |||||||||||
Capital lease obligation incurred | $ | — | $ | 25 | $ | 6 | |||||
Supplemental Cash Flow Data: | |||||||||||
Income taxes paid, net of refunds | $ | 37 | $ | 23 | $ | 45 | |||||
Cash interest paid(6) | 412 | 275 | 252 | ||||||||
Unpaid liability to acquire equipment and software | 10 | 18 | 27 |
Deficit Attributable to Holdings’ Shareholders | |||||||||||||||||||||||
dollars and shares in millions | Number of Shares | Common Stock | Treasury Stock | Capital in Excess of Par Value | Retained Deficit | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |||||||||||||||
Balance at January 31, 2015 | 107 | $ | 1 | $ | (5,949 | ) | $ | 9,189 | $ | (2,162 | ) | $ | (2,030 | ) | $ | 6 | $ | (945 | ) | ||||
Comprehensive loss | |||||||||||||||||||||||
Net loss | — | — | — | — | (1,129 | ) | — | 1 | (1,128 | ) | |||||||||||||
Pension and postretirement adjustments, net of tax | — | — | — | — | — | 113 | — | 113 | |||||||||||||||
Currency translation adjustments, net of tax | — | — | — | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Total Comprehensive Loss | (1,016 | ) | |||||||||||||||||||||
Stock awards | — | — | 16 | (16 | ) | — | — | — | — | ||||||||||||||
Associate stock purchase | — | — | 5 | — | — | — | — | 5 | |||||||||||||||
Balance at January 30, 2016 | 107 | $ | 1 | $ | (5,928 | ) | $ | 9,173 | $ | (3,291 | ) | $ | (1,918 | ) | $ | 7 | $ | (1,956 | ) | ||||
Comprehensive loss | |||||||||||||||||||||||
Net loss | — | — | — | — | (2,221 | ) | — | — | (2,221 | ) | |||||||||||||
Pension and postretirement adjustments, net of tax | — | — | — | — | — | 366 | — | 366 | |||||||||||||||
Dissolution of noncontrolling interest | — | — | — | — | — | — | (7 | ) | (7 | ) | |||||||||||||
Total Comprehensive Loss | (1,862 | ) | |||||||||||||||||||||
Stock awards | — | — | 29 | (30 | ) | — | — | — | (1 | ) | |||||||||||||
Reclassification of warrants | — | — | — | (13 | ) | — | — | — | (13 | ) | |||||||||||||
Associate stock purchase | — | — | 8 | — | — | — | — | 8 | |||||||||||||||
Balance at January 28, 2017 | 107 | $ | 1 | $ | (5,891 | ) | $ | 9,130 | $ | (5,512 | ) | $ | (1,552 | ) | $ | — | $ | (3,824 | ) | ||||
Comprehensive income | |||||||||||||||||||||||
Net loss | — | — | — | — | (383 | ) | — | — | (383 | ) | |||||||||||||
Pension and postretirement adjustments, net of tax | — | — | — | — | — | 478 | — | 478 | |||||||||||||||
Currency translation adjustments, net of tax | — | — | — | — | — | 2 | — | 2 | |||||||||||||||
Total Comprehensive Income | 97 | ||||||||||||||||||||||
Stock awards | 1 | — | 63 | (67 | ) | — | — | — | (4 | ) | |||||||||||||
Associate stock purchase | — | — | 8 | — | — | — | — | 8 | |||||||||||||||
Balance at February 3, 2018 | 108 | $ | 1 | $ | (5,820 | ) | $ | 9,063 | $ | (5,895 | ) | $ | (1,072 | ) | $ | — | $ | (3,723 | ) |
• | The completion of various secured and unsecured financing transactions, the extension of the maturity of certain of our indebtedness, and the amendment to other terms of certain of our indebtedness to increase our overall financial flexibility, including: |
◦ | a $750 million Senior Secured Term Loan (the "2016 Term Loan") under its domestic credit facility maturing in July 2020; |
◦ | a $500 million real estate loan facility in April 2016 (the "2016 Secured Loan Facility"), initially maturing in July 2017, initially extended to January 2018, subsequently extended to April 2018, and then further extended to July 2018, subject to the payment of an extension fee; |
◦ | an additional $500 million real estate loan facility in January 2017 (the "2017 Secured Loan Facility"), maturing in July 2020; |
◦ | a Second Lien Credit Agreement in September 2016, pursuant to which the Company borrowed $300 million under a term loan (the "Second Lien Term Loan"), maturing in July 2020; |
◦ | an amendment in July 2017 to the Second Lien Credit Agreement to provide for the creation of a $500 million uncommitted second-lien line of credit loan facility under which the Company may borrow line of credit loans (the "Line of Credit Loans"), and a subsequent amendment to that facility to extend the maximum duration of the Line of Credit Loans from 180 days to 270 days and permit total borrowings of up to $600 million; |
◦ | a Letter of Credit and Reimbursement Agreement in December 2016, originally providing for up to a $500 million secured standby letter of credit facility (the "LC Facility") from certain affiliates of ESL Investments, Inc. ("ESL"); |
◦ | a $200 million real estate loan facility (the "Incremental Loans") in October 2017, with the Incremental Loans maturing in April 2018, with the option to extend to July 2018, subject to the extension of the 2016 Secured Loan Facility; |
◦ | the extension of the maturity date of the initial $1.0 billion term loan (the "Term Loan") under our Amended Domestic Credit Agreement from June 2018 to January 2019 (with a right of the borrowers thereunder to further extend such maturity, subject to the satisfaction of certain conditions, to July 2019); |
◦ | amendments to our Amended Domestic Credit Agreement and certain other indebtedness which reduced the aggregate revolver commitments from $1.971 billion to $1.5 billion, but also implemented other modifications to covenants and reserves against the domestic credit facility borrowing base that improved net liquidity, and increased the maximum permissible short-term borrowings of the Company from $750 million to $1.25 billion; |
◦ | a Term Loan Credit Agreement in January 2018 providing for a secured term loan facility (the "Term Loan Facility"), secured by substantially all of the unencumbered intellectual property of the Company and its subsidiaries, other than intellectual property relating to the Kenmore and DieHard brands, as well as by certain real property interests, in each case subject to certain exclusions. An aggregate principal amount of $250 million was borrowed with the ability to borrow an additional $50 million against the same collateral; |
◦ | an amendment to the indenture governing our 6 5/8% Senior Secured Notes due 2018 to increase the maximum permissible borrowings secured by inventory to 75% of book value of such inventory from 65% and defer the collateral coverage test for purposes of the repurchase offer covenant in the indenture to restart it with the second quarter of 2018 (such that no collateral coverage event can occur until the end of the third quarter of 2018); |
◦ | an amendment to the PPPFA with the PBGC providing for the release of 138 of our properties from a ring-fence arrangement created under our five-year PPPFA in exchange for the payment of approximately $407 million into the Sears pension plans. This agreement provides the Company with financial flexibility through the ability to monetize properties, and, in addition, provides funding relief from contributions to the pension plans for the next two years; and |
◦ | various commercial paper issuances to meet short-term liquidity needs, with the maximum amount outstanding during fiscal 2017 of $160 million. |
• | Achievement of $1.25 billion in annualized cost savings in 2017 as part of the restructuring program announced earlier this year. Actions taken to realize the annualized cost savings have included simplification of the organizational structure of Holdings, streamlining of operations, reducing unprofitable categories and the closure of under-performing stores. In 2017, we closed approximately 435 stores, and an additional 103 stores previously announced for closure are expected to be closed by the end of the first quarter of 2018. As a result of these actions, the Company has begun to see improvement in the operations in fiscal 2017, as the restructuring program actions, including the closing of unprofitable stores, have begun to take effect. |
• | The sale of the Craftsman brand to Stanley Black & Decker for consideration consisting of cash payments and a royalty. |
• | Sales of properties and investments for proceeds of $1.1 billion and $386 million in 2017 and 2016, respectively. |
• | Sales of the properties securing the $200 million Secured Loan to fund the repayment of such Secured Loan; |
• | Additional borrowings under the Mezzanine Loan Agreement and the Term Loan Facility; |
• | Renegotiation of certain commercial arrangements; |
• | Monetization of the Kenmore brand; |
• | Extension of maturities beyond March 2019 of Line of Credit Loans under the Second Lien Credit Agreement, the 2016 Secured Loan Facility, the Incremental Secured Loan Facility, and the LC Facility and the Term Loan under the Amended Domestic Credit Agreement; |
• | Additional borrowings secured by real estate assets or borrowings under the short-term basket; and |
• | Further restructurings to help manage expenses and improve profitability. |
millions | February 3, 2018 | January 28, 2017 | |||||
Cash and equivalents | $ | 113 | $ | 196 | |||
Cash posted as collateral | 4 | 3 | |||||
Credit card deposits in transit | 65 | 87 | |||||
Total cash and cash equivalents | 182 | 286 | |||||
Restricted cash | 154 | — | |||||
Total cash balances | $ | 336 | $ | 286 |
millions | |||
2018 | $ | 148 | |
2019 | 100 | ||
2020 | 74 | ||
2021 | 54 | ||
2022 | 42 | ||
Later years | 311 | ||
Total undiscounted obligation | 729 | ||
Less—discount | (83 | ) | |
Net obligation | $ | 646 |
ISSUE | February 3, 2018 | January 28, 2017 | |||||
millions | |||||||
SEARS ROEBUCK ACCEPTANCE CORP. | |||||||
6.50% to 7.50% Notes, due 2027 to 2043 | $ | 284 | $ | 327 | |||
Term Loan (Credit Facility), $1.0B due 2019 | 391 | 963 | |||||
2016 Term Loan (Credit Facility), $750M due 2020 | 559 | 726 | |||||
Second Lien Term Loan (Credit Facility), $300M due 2020 | 294 | 292 | |||||
SEARS HOLDINGS CORP. | |||||||
8% Secured Loan Facility, due 2018 | 251 | 494 | |||||
6.625% Senior Secured Notes, due 2018 | 303 | 303 | |||||
8% Senior Unsecured Notes, due 2019 | 483 | 428 | |||||
8% Secured Loan Facility, due 2020 | 374 | 485 | |||||
Term Loan Facility (Credit Facility), $300M due 2020 | 206 | — | |||||
CAPITALIZED LEASE OBLIGATIONS | 72 | 145 | |||||
Total long-term borrowings | 3,217 | 4,163 | |||||
Current maturities | (968 | ) | (590 | ) | |||
Long-term debt and capitalized lease obligations | $ | 2,249 | $ | 3,573 | |||
Weighted-average annual interest rate on long-term debt | 7.6 | % | 7.2 | % |
millions | |||
2018 | $ | 979 | |
2019 | 637 | ||
2020 | 1,471 | ||
2021 | 3 | ||
2022 | 3 | ||
Thereafter | 312 | ||
Total maturities | 3,405 | ||
Unamortized debt discount | (152 | ) | |
Unamortized debt issuance costs | (36 | ) | |
Long-term debt, net of discount & debt issuance costs | $ | 3,217 |
millions | 2017 | 2016 | 2015 | |||||||||
COMPONENTS OF INTEREST EXPENSE | ||||||||||||
Interest expense (1) | $ | 377 | $ | 288 | $ | 223 | ||||||
Amortization of debt issuance costs | 58 | 31 | 25 | |||||||||
Accretion of debt discount | 66 | 50 | 35 | |||||||||
Accretion of self-insurance obligations at net present value | 19 | 16 | 19 | |||||||||
Accretion of lease obligations at net present value | 19 | 19 | 21 | |||||||||
Interest expense | $ | 539 | $ | 404 | $ | 323 |
millions | Bank Issued | SRAC Issued | Other | Total | ||||||||||||
Standby letters of credit | $ | 647 | $ | 6 | $ | — | $ | 653 | ||||||||
Commercial letters of credit | — | 31 | — | 31 | ||||||||||||
Secondary lease obligations | — | — | 164 | 164 |
millions | 2017 | 2016 | 2015 | |||||||||
Interest income on cash and cash equivalents | $ | 2 | $ | 1 | $ | 1 | ||||||
Other investment loss | (14 | ) | (27 | ) | (63 | ) | ||||||
Total | $ | (12 | ) | $ | (26 | ) | $ | (62 | ) |
millions | 2017 | 2016 | 2015 | |||||||||
Pension plans | $ | 657 | $ | 289 | $ | 230 | ||||||
Postretirement benefits | — | 28 | (2 | ) | ||||||||
Total | $ | 657 | $ | 317 | $ | 228 |
millions | 2017 | 2016 | ||||||
Change in projected benefit obligation: | ||||||||
Beginning balance | $ | 5,165 | $ | 5,265 | ||||
Interest cost | 180 | 227 | ||||||
Actuarial loss | 227 | 108 | ||||||
Benefits paid | (316 | ) | (435 | ) | ||||
Settlements | (1,249 | ) | — | |||||
Other | (4 | ) | — | |||||
Balance at the measurement date | $ | 4,003 | $ | 5,165 | ||||
Change in assets at fair value: | ||||||||
Beginning balance | $ | 3,567 | $ | 3,189 | ||||
Actual return on plan assets | 231 | 499 | ||||||
Company contributions | 295 | 314 | ||||||
Benefits paid | (316 | ) | (435 | ) | ||||
Settlements | (1,249 | ) | — | |||||
Balance at the measurement date | $ | 2,528 | $ | 3,567 | ||||
Net amount recognized | $ | (1,475 | ) | $ | (1,598 | ) |
millions | 2017 | 2016 | ||||||
Change in accumulated postretirement benefit obligation: | ||||||||
Beginning balance | $ | 168 | $ | 143 | ||||
Interest cost | 6 | 5 | ||||||
Plan participants' contributions | — | — | ||||||
Benefits paid | (17 | ) | (19 | ) | ||||
Actuarial loss | 1 | 9 | ||||||
Other | — | 30 | ||||||
Balance at the measurement date | $ | 158 | $ | 168 | ||||
Change in plan assets at fair value: | ||||||||
Beginning of year balance | $ | — | $ | — | ||||
Company contributions | 17 | 19 | ||||||
Plan participants' contributions | — | — | ||||||
Benefits paid | (17 | ) | (19 | ) | ||||
Balance at the measurement date | $ | — | $ | — | ||||
Funded status | $ | (158 | ) | $ | (168 | ) |
2017 | 2016 | 2015 | ||||
Pension benefits: | ||||||
Discount rate | 3.75% | 4.15% | 4.50% | |||
Postretirement benefits: | ||||||
Discount rate | 3.60% | 3.85% | 4.00% |
millions | 2017 | 2016 | 2015 | |||||||||
Pension benefits: | ||||||||||||
Interest cost | $ | 180 | $ | 227 | $ | 211 | ||||||
Expected return on plan assets | (190 | ) | (202 | ) | (249 | ) | ||||||
Settlements | 479 | — | — | |||||||||
Recognized net loss and other | 188 | 264 | 268 | |||||||||
Net periodic benefit cost | $ | 657 | $ | 289 | $ | 230 | ||||||
Postretirement benefits: | ||||||||||||
Interest cost | $ | 6 | $ | 5 | $ | 5 | ||||||
Recognized net loss and other | (6 | ) | 23 | (7 | ) | |||||||
Net periodic benefit cost | $ | — | $ | 28 | $ | (2 | ) |
2017 | 2016 | 2015 | ||||
Pension benefits: | ||||||
Discount Rate(1) | 4.15% | 4.50% | 3.70% | |||
Return of plan assets | 6.50% | 6.50% | 7.00% | |||
Postretirement benefits: | ||||||
Discount Rate | 3.85% | 4.00% | 3.30% |
millions | 1 percentage-point Increase | 1 percentage-point Decrease | ||||||
Effect on interest cost component | $ | 20 | $ | (26 | ) | |||
Effect on pension benefit obligation | $ | (384 | ) | $ | 460 |
Plan Assets at | ||||||
February 3, 2018 | January 28, 2017 | |||||
Equity securities | 36 | % | 35 | % | ||
Fixed income and other debt securities | 63 | 63 | ||||
Other | 1 | 2 | ||||
Total | 100 | % | 100 | % |
millions | ||||
Pension benefits: | ||||
Employer contributions: | ||||
2018 (expected) | $ | 280 | ||
Expected benefit payments: | ||||
2018 | $ | 334 | ||
2019 | 308 | |||
2020 | 298 | |||
2021 | 291 | |||
2022 | 283 | |||
2023-2027 | 1,289 | |||
Postretirement benefits: | ||||
Employer contributions: | ||||
2018 (expected) | $ | 16 | ||
Expected employer contribution for benefit payments: | ||||
2018 | $ | 16 | ||
2019 | 17 | |||
2020 | 17 | |||
2021 | 16 | |||
2022 | 15 | |||
2023-2027 | 58 |
Investment Assets at Fair Value at | ||||||||||||||||
February 3, 2018 | ||||||||||||||||
millions | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Equity securities: | ||||||||||||||||
U.S. companies | $ | 727 | $ | 720 | $ | — | $ | 7 | ||||||||
International companies | 164 | 164 | — | — | ||||||||||||
U.S. registered investment companies | 6 | 6 | — | — | ||||||||||||
Fixed income securities: | ||||||||||||||||
Corporate bonds and notes | 1,423 | — | 1,423 | — | ||||||||||||
Sears Holdings Corporation 2016 Term Loan | 77 | — | 77 | — | ||||||||||||
Mortgage-backed and asset-backed | 9 | — | 6 | 3 | ||||||||||||
Other | (3 | ) | — | (3 | ) | — | ||||||||||
Total investment assets at fair value | $ | 2,403 | $ | 890 | $ | 1,503 | $ | 10 | ||||||||
Cash | 4 | |||||||||||||||
Accounts receivable | 39 | |||||||||||||||
Accounts payable | (28 | ) | ||||||||||||||
Investments measured at NAV: | ||||||||||||||||
Cash equivalents and short-term investments | 110 | |||||||||||||||
Net assets available for plan benefits | $ | 2,528 |
Investment Assets at Fair Value at | ||||||||||||||||
January 28, 2017 | ||||||||||||||||
millions | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Equity securities: | ||||||||||||||||
U.S. companies | $ | 980 | $ | 978 | $ | — | $ | 2 | ||||||||
International companies | 224 | 224 | — | — | ||||||||||||
U.S. registered investment companies | 3 | 3 | — | — | ||||||||||||
Fixed income securities: | ||||||||||||||||
Corporate bonds and notes | 1,994 | — | 1,994 | — | ||||||||||||
Sears Holdings Corporation 2016 Term Loan | 100 | — | 100 | — | ||||||||||||
Mortgage-backed and asset-backed | 3 | — | 1 | 2 | ||||||||||||
Other | 1 | — | 1 | — | ||||||||||||
Ventures and partnerships | 1 | — | — | 1 | ||||||||||||
Total investment assets at fair value | $ | 3,306 | $ | 1,205 | $ | 2,096 | $ | 5 | ||||||||
Cash | 8 | |||||||||||||||
Accounts receivable | 65 | |||||||||||||||
Accounts payable | (69 | ) | ||||||||||||||
Investments measured at NAV: | ||||||||||||||||
Cash equivalents and short-term investments | 257 | |||||||||||||||
Net assets available for plan benefits | $ | 3,567 |
millions, except earnings per share | 2017 | 2016 | 2015 | |||||||||
Basic weighted average shares | 107.4 | 106.9 | 106.6 | |||||||||
Dilutive effect of restricted stock awards, restricted stock units and warrants | — | — | — | |||||||||
Diluted weighted average shares | 107.4 | 106.9 | 106.6 | |||||||||
Net loss attributable to Holdings' shareholders | $ | (383 | ) | $ | (2,221 | ) | $ | (1,129 | ) | |||
Loss per share attributable to Holdings' shareholders: | ||||||||||||
Basic | $ | (3.57 | ) | $ | (20.78 | ) | $ | (10.59 | ) | |||
Diluted | $ | (3.57 | ) | $ | (20.78 | ) | $ | (10.59 | ) |
2017 | 2016 | 2015 | |||||||||||||||||||
(Shares in thousands) | Shares | Weighted- Average Fair Value on Date of Grant | Shares | Weighted- Average Fair Value on Date of Grant | Shares | Weighted- Average Fair Value on Date of Grant | |||||||||||||||
Beginning of year balance | 151 | $ | 28.89 | 60 | $ | 42.88 | 73 | $ | 45.82 | ||||||||||||
Granted | 606 | 7.15 | 384 | 16.87 | 198 | 31.26 | |||||||||||||||
Vested | (623 | ) | 8.10 | (293 | ) | 16.00 | (200 | ) | 32.01 | ||||||||||||
Forfeited | (119 | ) | 25.27 | — | — | (11 | ) | 51.39 | |||||||||||||
End of year balance | 15 | $ | 42.09 | 151 | $ | 28.89 | 60 | $ | 42.88 |
millions | 2017 | 2016 | 2015 | |||||||||
Aggregate fair value of shares granted based on weighted average fair value at date of grant | $ | 4 | $ | 6 | $ | 6 | ||||||
Aggregate fair value of shares vesting during period | 4 | 4 | 6 | |||||||||
Aggregate fair value of shares forfeited during period | 1 | — | — |
millions | February 3, 2018 | January 28, 2017 | January 30, 2016 | ||||||||
Pension and postretirement adjustments (net of tax of $(225), $(225) and $(296), respectively) | $ | (1,071 | ) | $ | (1,549 | ) | $ | (1,915 | ) | ||
Currency translation adjustments (net of tax of $0 for all periods presented) | (1 | ) | (3 | ) | (3 | ) | |||||
Accumulated other comprehensive loss | $ | (1,072 | ) | $ | (1,552 | ) | $ | (1,918 | ) |
2017 | |||||||||||
millions | Before Tax Amount | Tax Expense | Net of Tax Amount | ||||||||
Other comprehensive income | |||||||||||
Pension and postretirement adjustments | |||||||||||
Experience loss | $ | (182 | ) | $ | — | $ | (182 | ) | |||
Less: cost of settlements | 479 | — | 479 | ||||||||
Less: recognized net loss and other included in net periodic benefit cost(1) | 181 | — | 181 | ||||||||
Pension and postretirement adjustments, net of tax | 478 | — | 478 | ||||||||
Currency translation adjustments | 2 | — | 2 | ||||||||
Total other comprehensive income | $ | 480 | $ | — | $ | 480 |
2016 | |||||||||||
millions | Before Tax Amount | Tax Expense | Net of Tax Amount | ||||||||
Other comprehensive income | |||||||||||
Pension and postretirement adjustments | |||||||||||
Experience gain | $ | 181 | $ | (71 | ) | $ | 110 | ||||
Less: recognized net loss and other included in net periodic benefit cost(1) | 256 | — | 256 | ||||||||
Pension and postretirement adjustments, net of tax | 437 | (71 | ) | 366 | |||||||
Dissolution of noncontrolling interest | (7 | ) | — | (7 | ) | ||||||
Total other comprehensive income | $ | 430 | $ | (71 | ) | $ | 359 |
(1) | Included in the computation of net periodic benefit expense. See Note 7 to the Consolidated Financial Statements. |
2015 | |||||||||||
millions | Before Tax Amount | Tax Expense | Net of Tax Amount | ||||||||
Other comprehensive income | |||||||||||
Pension and postretirement adjustments | |||||||||||
Experience loss | $ | (148 | ) | $ | — | $ | (148 | ) | |||
Less: recognized net loss and other included in net periodic benefit cost(1) | 261 | — | 261 | ||||||||
Pension and postretirement adjustments, net of tax | 113 | — | 113 | ||||||||
Currency translation adjustments | (1 | ) | — | (1 | ) | ||||||
Total other comprehensive income | $ | 112 | $ | — | $ | 112 |
(1) | Included in the computation of net periodic benefit expense. See Note 7 to the Consolidated Financial Statements. |
millions | 2017 | 2016 | 2015 | |||||||||
Loss before income taxes: | ||||||||||||
U.S. | $ | (1,012 | ) | $ | (2,429 | ) | $ | (1,420 | ) | |||
Foreign | 31 | 34 | 35 | |||||||||
Total | $ | (981 | ) | $ | (2,395 | ) | $ | (1,385 | ) | |||
Income tax benefit: | ||||||||||||
Current: | ||||||||||||
Federal | $ | 9 | $ | 13 | $ | 11 | ||||||
State and local | (3 | ) | 16 | 20 | ||||||||
Foreign | 13 | 18 | 17 | |||||||||
Total current | 19 | 47 | 48 | |||||||||
Deferred: | ||||||||||||
Federal | (429 | ) | (87 | ) | (239 | ) | ||||||
State and local | (187 | ) | (134 | ) | (66 | ) | ||||||
Foreign | (1 | ) | — | — | ||||||||
Total deferred | (617 | ) | (221 | ) | (305 | ) | ||||||
Total | $ | (598 | ) | $ | (174 | ) | $ | (257 | ) |
2017 | 2016 | 2015 | |||||||
Effective tax rate reconciliation: | |||||||||
Federal income tax rate (benefit rate) | (33.7 | )% | (35.0 | )% | (35.0 | )% | |||
State and local tax (benefit) net of federal tax benefit | (11.8 | ) | (3.0 | ) | (1.8 | ) | |||
Federal tax rate change | (22.6 | ) | — | — | |||||
Federal and state valuation allowance | 21.2 | 41.1 | 37.4 | ||||||
Land and indefinite-lived intangibles | (12.1 | ) | (0.2 | ) | (16.9 | ) | |||
Impairment of indefinite-lived trade names | (1.8 | ) | (6.0 | ) | (4.9 | ) | |||
Loss disallowance | — | — | 3.5 | ||||||
Tax credits | (0.4 | ) | (0.3 | ) | (0.7 | ) | |||
Resolution of income tax matters | (0.8 | ) | — | (0.3 | ) | ||||
Adjust foreign statutory rates | (1.0 | ) | 0.1 | (0.3 | ) | ||||
Repatriation toll charge | 1.8 | — | — | ||||||
Tax benefit resulting from other comprehensive income allocation | — | (2.9 | ) | — | |||||
Other | 0.2 | (1.1 | ) | 0.4 | |||||
(61.0 | )% | (7.3 | )% | (18.6 | )% |
millions | February 3, 2018 | January 28, 2017 | ||||||
Deferred tax assets and liabilities: | ||||||||
Deferred tax assets: | ||||||||
Federal benefit for state and foreign taxes | $ | 117 | $ | 148 | ||||
Accruals and other liabilities | 142 | 135 | ||||||
Net operating loss carryforwards | 1,736 | 2,255 | ||||||
Pension and postretirement benefit plans | 972 | 1,244 | ||||||
Property and equipment | 139 | 231 | ||||||
Deferred income | 266 | 479 | ||||||
Credit carryforwards | 899 | 875 | ||||||
Other | 208 | 218 | ||||||
Total deferred tax assets | 4,479 | 5,585 | ||||||
Valuation allowance | (4,187 | ) | (5,519 | ) | ||||
Net deferred tax assets | 292 | 66 | ||||||
Deferred tax liabilities: | ||||||||
Trade names/Intangibles | 285 | 573 | ||||||
Inventory | 105 | 193 | ||||||
Other | 28 | 43 | ||||||
Total deferred tax liabilities | 418 | 809 | ||||||
Net deferred tax liability | $ | (126 | ) | $ | (743 | ) |
Federal, State and Foreign Tax | ||||||||||||
millions | February 3, 2018 | January 28, 2017 | January 30, 2016 | |||||||||
Gross UTB Balance at Beginning of Period | $ | 142 | $ | 137 | $ | 131 | ||||||
Tax positions related to the current period: | ||||||||||||
Gross increases | 20 | 12 | 14 | |||||||||
Gross decreases | — | — | — | |||||||||
Tax positions related to prior periods: | ||||||||||||
Gross increases | — | — | — | |||||||||
Gross decreases | (26 | ) | — | — | ||||||||
Settlements | (1 | ) | — | — | ||||||||
Lapse of statute of limitations | (5 | ) | (7 | ) | (8 | ) | ||||||
Gross UTB Balance at End of Period | $ | 130 | $ | 142 | $ | 137 |
2015 | |||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | ||||||||
Gain | $ | 154 | $ | 471 | $ | 625 | |||||
Loss | (17 | ) | (100 | ) | (117 | ) | |||||
Immediate Net Gain | $ | 137 | $ | 371 | $ | 508 |
2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | ||||||||||||||||||||||||||
Straight-line rent expense | $ | 20 | $ | 140 | $ | 160 | $ | 32 | $ | 152 | $ | 184 | $ | 20 | $ | 100 | $ | 120 | |||||||||||||||||
Amortization of deferred gain on sale-leaseback | (11 | ) | (67 | ) | (78 | ) | (17 | ) | (71 | ) | (88 | ) | (11 | ) | (41 | ) | (52 | ) | |||||||||||||||||
Rent expense | $ | 9 | $ | 73 | $ | 82 | $ | 15 | $ | 81 | $ | 96 | $ | 9 | $ | 59 | $ | 68 |
February 3, 2018 | January 28, 2017 | |||||||||||||||
millions | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Amortizing intangible assets: | ||||||||||||||||
Favorable lease rights | $ | 121 | $ | 44 | $ | 143 | $ | 52 | ||||||||
Non-amortizing intangible assets: | ||||||||||||||||
Trade names | 1,091 | — | 1,430 | — | ||||||||||||
Total | $ | 1,212 | $ | 44 | $ | 1,573 | $ | 52 |
Annual Amortization Expense | |||
2017 | $ | 4 | |
2016 | 5 | ||
2015 | 7 |
Estimated Amortization | |||
2018 | $ | 3 | |
2019 | 3 | ||
2020 | 3 | ||
2021 | 3 | ||
2022 | 3 | ||
Thereafter | 56 |
millions | Markdowns(1) | Severance Costs(2) | Lease Termination Costs(2) | Other Charges(2) | Impairment and Accelerated Depreciation(3) | Total Store Closing Costs | |||||||||||||||||
Kmart | $ | 154 | $ | 25 | $ | 80 | $ | 22 | $ | 19 | $ | 300 | |||||||||||
Sears Domestic | 73 | 58 | 40 | 10 | 21 | 202 | |||||||||||||||||
Total 2017 costs | $ | 227 | $ | 83 | $ | 120 | $ | 32 | $ | 40 | $ | 502 | |||||||||||
Kmart | $ | 187 | $ | 28 | $ | 71 | $ | 32 | $ | 13 | $ | 331 | |||||||||||
Sears Domestic | 39 | 13 | 5 | 9 | 7 | 73 | |||||||||||||||||
Total 2016 costs | $ | 226 | $ | 41 | $ | 76 | $ | 41 | $ | 20 | $ | 404 | |||||||||||
Kmart | $ | 39 | $ | 16 | $ | 21 | $ | 10 | $ | 1 | $ | 87 | |||||||||||
Sears Domestic | 5 | 21 | (15 | ) | 1 | 2 | 14 | ||||||||||||||||
Total 2015 costs | $ | 44 | $ | 37 | $ | 6 | $ | 11 | $ | 3 | $ | 101 |
(1) | Recorded within cost of sales, buying and occupancy in the Consolidated Statements of Operations. |
(2) | Recorded within selling and administrative in the Consolidated Statements of Operations. Lease termination costs are net of estimated sublease income, and include the reversal of closed store reserves for which the lease agreement has been terminated and the reversal of deferred rent balances related to closed stores. |
(3) | 2017, 2016 and 2015 costs are recorded within depreciation and amortization on the Consolidated Statements of Operations. |
millions | Severance Costs | Lease Termination Costs | Other Charges | Total | |||||||||||
Balance at January 30, 2016 | $ | 58 | $ | 114 | $ | 8 | $ | 180 | |||||||
Store closing costs | 41 | 85 | 41 | 167 | |||||||||||
Payments/utilizations/other | (45 | ) | (55 | ) | (31 | ) | (131 | ) | |||||||
Balance at January 28, 2017 | 54 | 144 | 18 | 216 | |||||||||||
Store closing costs | 83 | 162 | 32 | 277 | |||||||||||
Store closing capital lease obligations | — | 33 | — | 33 | |||||||||||
Payments/utilizations/other | (88 | ) | (139 | ) | (38 | ) | (265 | ) | |||||||
Balance at February 3, 2018 | $ | 49 | $ | 200 | $ | 12 | $ | 261 |
millions | 2017 | 2016 | 2015 | ||||||||
Kmart | $ | 16 | $ | 22 | $ | 14 | |||||
Sears Domestic | 54 | 24 | 80 | ||||||||
Sears Holdings | $ | 70 | $ | 46 | $ | 94 |
millions | 2017 | 2016 | 2015 | |||||||||
Minimum rentals | $ | 666 | $ | 739 | $ | 713 | ||||||
Percentage rentals | 5 | 7 | 8 | |||||||||
Less-Sublease rentals | (43 | ) | (51 | ) | (46 | ) | ||||||
Less-Amortization of deferred gain on sale-leaseback | (78 | ) | (88 | ) | (52 | ) | ||||||
Total | $ | 550 | $ | 607 | $ | 623 |
Minimum Lease Commitments | ||||||||
millions | Capital | Operating | ||||||
2018 | $ | 28 | $ | 537 | ||||
2019 | 15 | 439 | ||||||
2020 | 6 | 368 | ||||||
2021 | 4 | 297 | ||||||
2022 | 4 | 237 | ||||||
Later years | 58 | 961 | ||||||
Total minimum lease payments | 115 | 2,839 | ||||||
Less minimum sublease income | (92 | ) | ||||||
Net minimum lease payments | $ | 2,747 | ||||||
Less: | ||||||||
Estimated executory costs | (4 | ) | ||||||
Interest at a weighted average rate of 4.9% | (39 | ) | ||||||
Capital lease obligations | 72 | |||||||
Less current portion of capital lease obligations | (22 | ) | ||||||
Long-term capital lease obligations | $ | 50 |
• | SHO obtains a significant amount of its merchandise from the Company. We have also entered into certain agreements with SHO to provide logistics, handling, warehouse and transportation services. SHO also pays a royalty related to the sale of Kenmore, Craftsman and DieHard products and fees for participation in the Shop Your Way program. |
• | SHO receives commissions from the Company for the sale of merchandise made through www.sears.com, extended service agreements, delivery and handling services and credit revenues. |
• | The Company provides SHO with shared corporate services. These services include accounting and finance, human resources and information technology. |
millions | February 3, 2018 | January 28, 2017 | |||||
Unearned revenues | $ | 539 | $ | 639 | |||
Self-insurance reserves | 491 | 535 | |||||
Other | 437 | 467 | |||||
Total | $ | 1,467 | $ | 1,641 |
millions | Unearned Revenues | ||
Balance at January 30, 2016 | $ | 1,405 | |
Sales of service contracts | 855 | ||
Revenue recognized on existing service contracts | (961 | ) | |
Balance at January 28, 2017 | 1,299 | ||
Sales of service contracts | 691 | ||
Revenue recognized on existing service contracts | (876 | ) | |
Balance at February 3, 2018 | $ | 1,114 |
(i) | Hardlines—consists of home appliances, consumer electronics, lawn & garden, tools & hardware, automotive parts, household goods, toys, housewares and sporting goods; |
(ii) | Apparel and Soft Home—includes women's, men's, kids', footwear, jewelry, accessories and soft home; |
(iii) | Food and Drug—consists of grocery & household, pharmacy and drugstore; |
(iv) | Service—includes repair, installation and automotive service and extended contract revenue; and |
(v) | Other—includes revenues earned in connection with our agreements with SHO and Lands' End, as well as online commissions, licensed business revenues, wholesale revenues, rental income and credit revenues. |
2017 | ||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | |||||||||
Merchandise sales | ||||||||||||
Hardlines | $ | 1,550 | $ | 5,656 | $ | 7,206 | ||||||
Apparel and Soft Home | 2,096 | 2,182 | 4,278 | |||||||||
Food and Drug | 1,918 | 7 | 1,925 | |||||||||
Total merchandise sales | 5,564 | 7,845 | 13,409 | |||||||||
Services and other | ||||||||||||
Services | 4 | 1,811 | 1,815 | |||||||||
Other | 50 | 1,428 | 1,478 | |||||||||
Total services and other | 54 | 3,239 | 3,293 | |||||||||
Total revenues | 5,618 | 11,084 | 16,702 | |||||||||
Costs and expenses: | ||||||||||||
Cost of sales, buying and occupancy - merchandise sales | 4,592 | 6,757 | 11,349 | |||||||||
Cost of sales and occupancy - services and other | 9 | 1,817 | 1,826 | |||||||||
Total cost of sales, buying and occupancy | 4,601 | 8,574 | 13,175 | |||||||||
Selling and administrative | 1,455 | 3,676 | 5,131 | |||||||||
Depreciation and amortization | 60 | 272 | 332 | |||||||||
Impairment charges | 16 | 126 | 142 | |||||||||
Gain on sales of assets | (881 | ) | (767 | ) | (1,648 | ) | ||||||
Total costs and expenses | 5,251 | 11,881 | 17,132 | |||||||||
Operating income (loss) | $ | 367 | $ | (797 | ) | $ | (430 | ) | ||||
Total assets | $ | 1,576 | $ | 5,686 | $ | 7,262 | ||||||
Capital expenditures | $ | 18 | $ | 62 | $ | 80 |
2016 | ||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | |||||||||
Merchandise sales | ||||||||||||
Hardlines | $ | 2,445 | $ | 7,126 | $ | 9,571 | ||||||
Apparel and Soft Home | 3,044 | 2,522 | 5,566 | |||||||||
Food and Drug | 3,088 | 11 | 3,099 | |||||||||
Total merchandise sales | 8,577 | 9,659 | 18,236 | |||||||||
Services and other | ||||||||||||
Services | 9 | 2,101 | 2,110 | |||||||||
Other | 64 | 1,728 | 1,792 | |||||||||
Total services and other | 73 | 3,829 | 3,902 | |||||||||
Total revenues | 8,650 | 13,488 | 22,138 | |||||||||
Costs and expenses: | ||||||||||||
Cost of sales, buying and occupancy - merchandise sales | 7,075 | 8,109 | 15,184 | |||||||||
Cost of sales and occupancy - services and other | 18 | 2,250 | 2,268 | |||||||||
Total cost of sales, buying and occupancy | 7,093 | 10,359 | 17,452 | |||||||||
Selling and administrative | 2,175 | 3,934 | 6,109 | |||||||||
Depreciation and amortization | 71 | 304 | 375 | |||||||||
Impairment charges | 22 | 405 | 427 | |||||||||
Gain on sales of assets | (181 | ) | (66 | ) | (247 | ) | ||||||
Total costs and expenses | 9,180 | 14,936 | 24,116 | |||||||||
Operating loss | $ | (530 | ) | $ | (1,448 | ) | $ | (1,978 | ) | |||
Total assets | $ | 2,134 | $ | 7,228 | $ | 9,362 | ||||||
Capital expenditures | $ | 43 | $ | 99 | $ | 142 |
2015 | ||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | |||||||||
Merchandise sales | ||||||||||||
Hardlines | $ | 2,936 | $ | 7,915 | $ | 10,851 | ||||||
Apparel and Soft Home | 3,434 | 2,907 | 6,341 | |||||||||
Food and Drug | 3,735 | 9 | 3,744 | |||||||||
Total merchandise sales | 10,105 | 10,831 | 20,936 | |||||||||
Services and other | ||||||||||||
Services | 13 | 2,127 | 2,140 | |||||||||
Other | 70 | 2,000 | 2,070 | |||||||||
Total services and other | 83 | 4,127 | 4,210 | |||||||||
Total revenues | 10,188 | 14,958 | 25,146 | |||||||||
Costs and expenses: | ||||||||||||
Cost of sales, buying and occupancy - merchandise sales | 8,023 | 8,794 | 16,817 | |||||||||
Cost of sales and occupancy - services and other | 19 | 2,500 | 2,519 | |||||||||
Total cost of sales, buying and occupancy | 8,042 | 11,294 | 19,336 | |||||||||
Selling and administrative | 2,537 | 4,320 | 6,857 | |||||||||
Depreciation and amortization | 72 | 350 | 422 | |||||||||
Impairment charges | 14 | 260 | 274 | |||||||||
Gain on sales of assets | (185 | ) | (558 | ) | (743 | ) | ||||||
Total costs and expenses | 10,480 | 15,666 | 26,146 | |||||||||
Operating loss | $ | (292 | ) | $ | (708 | ) | $ | (1,000 | ) | |||
Total assets | $ | 3,059 | $ | 8,278 | $ | 11,337 | ||||||
Capital expenditures | $ | 42 | $ | 169 | $ | 211 |
2017 | ||||||||||||||||
millions, except per share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenues | $ | 4,301 | $ | 4,365 | $ | 3,660 | $ | 4,376 | ||||||||
Cost of sales, buying and occupancy | 3,371 | 3,394 | 2,958 | 3,452 | ||||||||||||
Selling and administrative | 1,267 | 1,369 | 1,339 | 1,156 | ||||||||||||
Net income (loss) attributable to Holdings' shareholders | 244 | (251 | ) | (558 | ) | 182 | ||||||||||
Basic net income (loss) per share attributable to Holdings' shareholders | 2.28 | (2.34 | ) | (5.19 | ) | 1.69 | ||||||||||
Diluted net income (loss) per share attributable to Holdings' shareholders | 2.28 | (2.34 | ) | (5.19 | ) | 1.69 |
2016 | ||||||||||||||||
millions, except per share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Revenues | $ | 5,394 | $ | 5,663 | $ | 5,029 | $ | 6,052 | ||||||||
Cost of sales, buying and occupancy | 4,217 | 4,403 | 4,067 | 4,765 | ||||||||||||
Selling and administrative | 1,503 | 1,484 | 1,543 | 1,579 | ||||||||||||
Net loss attributable to Holdings' shareholders | (471 | ) | (395 | ) | (748 | ) | (607 | ) | ||||||||
Basic net loss per share attributable to Holdings' shareholders | (4.41 | ) | (3.70 | ) | (6.99 | ) | (5.67 | ) | ||||||||
Diluted net loss per share attributable to Holdings' shareholders | (4.41 | ) | (3.70 | ) | (6.99 | ) | (5.67 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 152 | $ | 30 | $ | — | $ | 182 | ||||||||||
Restricted cash | 154 | — | — | — | 154 | |||||||||||||||
Intercompany receivables | — | — | 27,993 | (27,993 | ) | — | ||||||||||||||
Accounts receivable | — | 322 | 21 | — | 343 | |||||||||||||||
Merchandise inventories | — | 2,798 | — | — | 2,798 | |||||||||||||||
Prepaid expenses and other current assets | 309 | 899 | 478 | (1,351 | ) | 335 | ||||||||||||||
Total current assets | 463 | 4,171 | 28,522 | (29,344 | ) | 3,812 | ||||||||||||||
Total property and equipment, net | — | 1,043 | 686 | — | 1,729 | |||||||||||||||
Goodwill and intangible assets | — | 346 | 1,189 | (98 | ) | 1,437 | ||||||||||||||
Other assets | 179 | 1,331 | 1,159 | (2,385 | ) | 284 | ||||||||||||||
Investment in subsidiaries | 8,790 | 27,752 | — | (36,542 | ) | — | ||||||||||||||
TOTAL ASSETS | $ | 9,432 | $ | 34,643 | $ | 31,556 | $ | (68,369 | ) | $ | 7,262 | |||||||||
Current liabilities | ||||||||||||||||||||
Short-term borrowings | $ | 144 | $ | 937 | $ | — | $ | (166 | ) | $ | 915 | |||||||||
Current portion of long-term debt and capitalized lease obligations | 303 | 897 | — | (232 | ) | 968 | ||||||||||||||
Merchandise payables | — | 576 | — | — | 576 | |||||||||||||||
Intercompany payables | 11,099 | 16,894 | — | (27,993 | ) | — | ||||||||||||||
Other current liabilities | 16 | 1,941 | 1,448 | (949 | ) | 2,456 | ||||||||||||||
Total current liabilities | 11,562 | 21,245 | 1,448 | (29,340 | ) | 4,915 | ||||||||||||||
Long-term debt and capitalized lease obligations | 1,991 | 2,734 | — | (2,476 | ) | 2,249 | ||||||||||||||
Pension and postretirement benefits | — | 1,616 | 3 | — | 1,619 | |||||||||||||||
Deferred gain on sale-leaseback | — | 360 | 2 | — | 362 | |||||||||||||||
Sale-leaseback financing obligation | — | 158 | 89 | — | 247 | |||||||||||||||
Long-term deferred tax liabilities | — | — | 349 | (223 | ) | 126 | ||||||||||||||
Other long-term liabilities | — | 1,131 | 514 | (178 | ) | 1,467 | ||||||||||||||
Total Liabilities | 13,553 | 27,244 | 2,405 | (32,217 | ) | 10,985 | ||||||||||||||
EQUITY (DEFICIT) | ||||||||||||||||||||
Shareholder's equity (deficit) | (4,121 | ) | 7,399 | 29,151 | (36,152 | ) | (3,723 | ) | ||||||||||||
Total Equity (Deficit) | (4,121 | ) | 7,399 | 29,151 | (36,152 | ) | (3,723 | ) | ||||||||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 9,432 | $ | 34,643 | $ | 31,556 | $ | (68,369 | ) | $ | 7,262 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 260 | $ | 26 | $ | — | $ | 286 | ||||||||||
Intercompany receivables | — | — | 27,415 | (27,415 | ) | — | ||||||||||||||
Accounts receivable | — | 441 | 25 | 466 | ||||||||||||||||
Merchandise inventories | — | 3,959 | — | — | 3,959 | |||||||||||||||
Prepaid expenses and other current assets | 23 | 692 | 856 | (1,286 | ) | 285 | ||||||||||||||
Total current assets | 23 | 5,352 | 28,322 | (28,701 | ) | 4,996 | ||||||||||||||
Total property and equipment, net | — | 1,504 | 736 | — | 2,240 | |||||||||||||||
Goodwill and intangible assets | — | 360 | 1,528 | (98 | ) | 1,790 | ||||||||||||||
Other assets | 4 | 285 | 931 | (884 | ) | 336 | ||||||||||||||
Investment in subsidiaries | 9,110 | 26,703 | — | (35,813 | ) | — | ||||||||||||||
TOTAL ASSETS | $ | 9,137 | $ | 34,204 | $ | 31,517 | $ | (65,496 | ) | $ | 9,362 | |||||||||
Current liabilities | ||||||||||||||||||||
Short-term borrowings | $ | — | $ | 108 | $ | — | $ | (108 | ) | $ | — | |||||||||
Current portion of long-term debt and capitalized lease obligations | — | 1,189 | — | (599 | ) | 590 | ||||||||||||||
Merchandise payables | — | 1,048 | — | — | 1,048 | |||||||||||||||
Intercompany payables | 11,830 | 15,585 | — | (27,415 | ) | — | ||||||||||||||
Other current liabilities | 17 | 2,479 | 1,219 | (672 | ) | 3,043 | ||||||||||||||
Total current liabilities | 11,847 | 20,409 | 1,219 | (28,794 | ) | 4,681 | ||||||||||||||
Long-term debt and capitalized lease obligations | 1,215 | 3,160 | — | (802 | ) | 3,573 | ||||||||||||||
Pension and postretirement benefits | — | 1,746 | 4 | — | 1,750 | |||||||||||||||
Deferred gain on sale-leaseback | — | 563 | — | — | 563 | |||||||||||||||
Sale-leaseback financing obligation | — | 235 | — | — | 235 | |||||||||||||||
Long-term deferred tax liabilities | 48 | — | 724 | (29 | ) | 743 | ||||||||||||||
Other long-term liabilities | — | 808 | 1,038 | (205 | ) | 1,641 | ||||||||||||||
Total Liabilities | 13,110 | 26,921 | 2,985 | (29,830 | ) | 13,186 | ||||||||||||||
EQUITY (DEFICIT) | ||||||||||||||||||||
Shareholder's equity (deficit) | (3,973 | ) | 7,283 | 28,532 | (35,666 | ) | (3,824 | ) | ||||||||||||
Total Equity (Deficit) | (3,973 | ) | 7,283 | 28,532 | (35,666 | ) | (3,824 | ) | ||||||||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 9,137 | $ | 34,204 | $ | 31,517 | $ | (65,496 | ) | $ | 9,362 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Merchandise sales | $ | — | $ | 13,375 | $ | — | $ | 34 | $ | 13,409 | |||||||||
Services and other | — | 3,303 | 2,283 | (2,293 | ) | 3,293 | |||||||||||||
Total revenues | — | 16,678 | 2,283 | (2,259 | ) | 16,702 | |||||||||||||
Cost of sales, buying and occupancy - merchandise sales | 1 | 11,237 | — | 111 | 11,349 | ||||||||||||||
Cost of sales and occupancy - services and other | — | 2,228 | 876 | (1,278 | ) | 1,826 | |||||||||||||
Total cost of sales, buying and occupancy | 1 | 13,465 | 876 | (1,167 | ) | 13,175 | |||||||||||||
Selling and administrative | (27 | ) | 5,409 | 841 | (1,092 | ) | 5,131 | ||||||||||||
Depreciation and amortization | — | 270 | 62 | — | 332 | ||||||||||||||
Impairment charges | — | 70 | 72 | — | 142 | ||||||||||||||
Gain on sales of assets | (486 | ) | (1,142 | ) | (20 | ) | — | (1,648 | ) | ||||||||||
Total costs and expenses | (512 | ) | 18,072 | 1,831 | (2,259 | ) | 17,132 | ||||||||||||
Operating income (loss) | 512 | (1,394 | ) | 452 | — | (430 | ) | ||||||||||||
Interest expense | (600 | ) | (994 | ) | (19 | ) | 1,074 | (539 | ) | ||||||||||
Interest and investment income (loss) | 45 | 195 | 412 | (664 | ) | (12 | ) | ||||||||||||
Income (loss) before income taxes | (43 | ) | (2,193 | ) | 845 | 410 | (981 | ) | |||||||||||
Income tax (expense) benefit | 232 | 765 | (399 | ) | — | 598 | |||||||||||||
Equity (deficit) in earnings in subsidiaries | (982 | ) | 460 | — | 522 | — | |||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (793 | ) | $ | (968 | ) | $ | 446 | $ | 932 | $ | (383 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Merchandise sales | $ | — | $ | 18,218 | $ | — | $ | 18 | $ | 18,236 | |||||||||
Services and other | — | 3,985 | 2,796 | (2,879 | ) | 3,902 | |||||||||||||
Total revenues | — | 22,203 | 2,796 | (2,861 | ) | 22,138 | |||||||||||||
Cost of sales, buying and occupancy - merchandise sales | — | 15,104 | — | 80 | 15,184 | ||||||||||||||
Cost of sales and occupancy - services and other | — | 2,824 | 1,056 | (1,612 | ) | 2,268 | |||||||||||||
Total cost of sales, buying and occupancy | — | 17,928 | 1,056 | (1,532 | ) | 17,452 | |||||||||||||
Selling and administrative | 6 | 6,506 | 926 | (1,329 | ) | 6,109 | |||||||||||||
Depreciation and amortization | — | 303 | 72 | — | 375 | ||||||||||||||
Impairment charges | — | 46 | 381 | — | 427 | ||||||||||||||
Gain on sales of assets | — | (343 | ) | (2 | ) | 98 | (247 | ) | |||||||||||
Total costs and expenses | 6 | 24,440 | 2,433 | (2,763 | ) | 24,116 | |||||||||||||
Operating income (loss) | (6 | ) | (2,237 | ) | 363 | (98 | ) | (1,978 | ) | ||||||||||
Interest expense | (385 | ) | (645 | ) | (13 | ) | 639 | (404 | ) | ||||||||||
Interest and investment income (loss) | 20 | 152 | 441 | (639 | ) | (26 | ) | ||||||||||||
Other income (loss) | 13 | — | (217 | ) | 217 | 13 | |||||||||||||
Income (loss) before income taxes | (358 | ) | (2,730 | ) | 574 | 119 | (2,395 | ) | |||||||||||
Income tax (expense) benefit | 28 | 529 | (383 | ) | — | 174 | |||||||||||||
Equity (deficit) in earnings in subsidiaries | (2,010 | ) | 5 | — | 2,005 | — | |||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (2,340 | ) | $ | (2,196 | ) | $ | 191 | $ | 2,124 | $ | (2,221 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Merchandise sales | $ | — | $ | 20,925 | $ | — | $ | 11 | $ | 20,936 | |||||||||
Services and other | — | 4,339 | 2,861 | (2,990 | ) | 4,210 | |||||||||||||
Total revenues | — | 25,264 | 2,861 | (2,979 | ) | 25,146 | |||||||||||||
Cost of sales, buying and occupancy - merchandise sales | — | 16,749 | — | 68 | 16,817 | ||||||||||||||
Cost of sales and occupancy - services and other | — | 3,070 | 1,131 | (1,682 | ) | 2,519 | |||||||||||||
Total cost of sales, buying and occupancy | — | 19,819 | 1,131 | (1,614 | ) | 19,336 | |||||||||||||
Selling and administrative | 3 | 7,322 | 897 | (1,365 | ) | 6,857 | |||||||||||||
Depreciation and amortization | — | 350 | 72 | — | 422 | ||||||||||||||
Impairment charges | — | 94 | 180 | — | 274 | ||||||||||||||
Gain on sales of assets | — | (735 | ) | (8 | ) | — | (743 | ) | |||||||||||
Total costs and expenses | 3 | 26,850 | 2,272 | (2,979 | ) | 26,146 | |||||||||||||
Operating income (loss) | (3 | ) | (1,586 | ) | 589 | — | (1,000 | ) | |||||||||||
Interest expense | (265 | ) | (481 | ) | (83 | ) | 506 | (323 | ) | ||||||||||
Interest and investment income (loss) | (19 | ) | 44 | 419 | (506 | ) | (62 | ) | |||||||||||
Income (loss) before income taxes | (287 | ) | (2,023 | ) | 925 | — | (1,385 | ) | |||||||||||
Income tax (expense) benefit | 115 | 480 | (338 | ) | — | 257 | |||||||||||||
Equity (deficit) in earnings in subsidiaries | (956 | ) | 158 | — | 798 | — | |||||||||||||
Net income (loss) | (1,128 | ) | (1,385 | ) | 587 | 798 | (1,128 | ) | |||||||||||
Income attributable to noncontrolling interests | — | — | — | (1 | ) | (1 | ) | ||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (1,128 | ) | $ | (1,385 | ) | $ | 587 | $ | 797 | $ | (1,129 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Net income (loss) | $ | (793 | ) | $ | (968 | ) | $ | 446 | $ | 932 | $ | (383 | ) | ||||||
Other comprehensive income: | |||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 478 | — | — | 478 | ||||||||||||||
Unrealized net gain, net of tax | 6 | — | 45 | (51 | ) | — | |||||||||||||
Currency translation adjustments, net of tax | — | — | 2 | — | 2 | ||||||||||||||
Total other comprehensive income | 6 | 478 | 47 | (51 | ) | 480 | |||||||||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | (787 | ) | $ | (490 | ) | $ | 493 | $ | 881 | $ | 97 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Net income (loss) | $ | (2,340 | ) | $ | (2,196 | ) | $ | 191 | $ | 2,124 | $ | (2,221 | ) | ||||||
Other comprehensive income: | |||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 366 | — | — | 366 | ||||||||||||||
Dissolution of noncontrolling interest | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Unrealized net gain, net of tax | — | — | 122 | (122 | ) | — | |||||||||||||
Total other comprehensive income | — | 366 | 115 | (122 | ) | 359 | |||||||||||||
Comprehensive income (loss) | (2,340 | ) | (1,830 | ) | 306 | 2,002 | (1,862 | ) | |||||||||||
Comprehensive income attributable to noncontrolling interest | — | — | — | 7 | 7 | ||||||||||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | (2,340 | ) | $ | (1,830 | ) | $ | 306 | $ | 2,009 | $ | (1,855 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Net income (loss) | $ | (1,128 | ) | $ | (1,385 | ) | $ | 587 | $ | 798 | $ | (1,128 | ) | ||||||
Other comprehensive income (loss): | |||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 113 | — | — | 113 | ||||||||||||||
Currency translation adjustments, net of tax | — | — | (1 | ) | — | (1 | ) | ||||||||||||
Unrealized net loss, net of tax | — | (3 | ) | (65 | ) | 68 | — | ||||||||||||
Total other comprehensive income (loss) | — | 110 | (66 | ) | 68 | 112 | |||||||||||||
Comprehensive income (loss) | (1,128 | ) | (1,275 | ) | 521 | 866 | (1,016 | ) | |||||||||||
Comprehensive loss attributable to noncontrolling interest | — | — | — | (1 | ) | (1 | ) | ||||||||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | (1,128 | ) | $ | (1,275 | ) | $ | 521 | $ | 865 | $ | (1,017 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 1 | $ | (2,404 | ) | $ | 682 | $ | (121 | ) | $ | (1,842 | ) | |||||||
Proceeds from sales of property and investments | — | 1,093 | 16 | — | 1,109 | |||||||||||||||
Proceeds from Craftsman Sale | 572 | — | — | — | 572 | |||||||||||||||
Proceeds from sales of receivables | 293 | — | — | — | 293 | |||||||||||||||
Purchases of property and equipment | — | (70 | ) | (10 | ) | — | (80 | ) | ||||||||||||
Net investing with Affiliates | (934 | ) | — | (563 | ) | 1,497 | — | |||||||||||||
Net cash provided by (used in) investing activities | (69 | ) | 1,023 | (557 | ) | 1,497 | 1,894 | |||||||||||||
Proceeds from debt issuances | 410 | 610 | — | — | 1,020 | |||||||||||||||
Repayments of long-term debt | (171 | ) | (1,185 | ) | — | — | (1,356 | ) | ||||||||||||
Increase in short-term borrowings, primarily 90 days or less | — | 271 | — | — | 271 | |||||||||||||||
Proceeds from sale-leaseback financing | — | 106 | — | — | 106 | |||||||||||||||
Debt issuance costs | (17 | ) | (26 | ) | — | — | (43 | ) | ||||||||||||
Intercompany dividend | — | — | (121 | ) | 121 | — | ||||||||||||||
Net borrowing with Affiliates | — | 1,497 | — | (1,497 | ) | — | ||||||||||||||
Net cash provided by (used in) financing activities | 222 | 1,273 | (121 | ) | (1,376 | ) | (2 | ) | ||||||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 154 | (108 | ) | 4 | — | 50 | ||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR | — | 260 | 26 | — | 286 | |||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR | $ | 154 | $ | 152 | $ | 30 | $ | — | $ | 336 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 244 | $ | (2,137 | ) | $ | 820 | $ | (308 | ) | $ | (1,381 | ) | |||||||
Proceeds from sales of property and investments | — | 273 | 113 | — | 386 | |||||||||||||||
Purchases of property and equipment | — | (133 | ) | (9 | ) | — | (142 | ) | ||||||||||||
Net investing with Affiliates | (239 | ) | — | (627 | ) | 866 | — | |||||||||||||
Net cash provided by (used in) investing activities | (239 | ) | 140 | (523 | ) | 866 | 244 | |||||||||||||
Proceeds from debt issuances | — | 2,028 | — | — | 2,028 | |||||||||||||||
Repayments of long-term debt | — | (65 | ) | (1 | ) | — | (66 | ) | ||||||||||||
Decrease in short-term borrowings, primarily 90 days or less | — | (797 | ) | — | — | (797 | ) | |||||||||||||
Proceeds from sale-leaseback financing | — | 71 | — | — | 71 | |||||||||||||||
Debt issuance costs | (5 | ) | (46 | ) | — | — | (51 | ) | ||||||||||||
Intercompany dividend | — | — | (308 | ) | 308 | — | ||||||||||||||
Net borrowing with Affiliates | — | 866 | — | (866 | ) | — | ||||||||||||||
Net cash provided by (used in) financing activities | (5 | ) | 2,057 | (309 | ) | (558 | ) | 1,185 | ||||||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | — | 60 | (12 | ) | — | 48 | ||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR | — | 200 | 38 | — | 238 | |||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR | $ | — | $ | 260 | $ | 26 | $ | — | $ | 286 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net cash provided by (used in) operating activities | $ | 395 | $ | (3,021 | ) | $ | 938 | $ | (479 | ) | $ | (2,167 | ) | |||||||
Proceeds from sales of property and investments | — | 2,725 | 5 | — | 2,730 | |||||||||||||||
Purchases of property and equipment | — | (202 | ) | (9 | ) | — | (211 | ) | ||||||||||||
Net investing with Affiliates | (395 | ) | — | (446 | ) | 841 | — | |||||||||||||
Net cash provided by (used in) investing activities | (395 | ) | 2,523 | (450 | ) | 841 | 2,519 | |||||||||||||
Repayments of long-term debt | — | (1,403 | ) | (2 | ) | — | (1,405 | ) | ||||||||||||
Increase in short-term borrowings, primarily 90 days or less | — | 583 | — | — | 583 | |||||||||||||||
Proceeds from sale-leaseback financing | — | 508 | — | — | 508 | |||||||||||||||
Debt issuance costs | — | (50 | ) | — | — | (50 | ) | |||||||||||||
Intercompany dividend | — | (479 | ) | 479 | — | |||||||||||||||
Net borrowing with Affiliates | — | 841 | — | (841 | ) | — | ||||||||||||||
Net cash provided by (used in) financing activities | — | 479 | (481 | ) | (362 | ) | (364 | ) | ||||||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | — | (19 | ) | 7 | — | (12 | ) | |||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR | — | 219 | 31 | — | 250 | |||||||||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR | $ | — | $ | 200 | $ | 38 | $ | — | $ | 238 |
millions | Balance at beginning of period | Additions charged to costs and expenses | (Deductions) | Balance at end of period | ||||||||||||
Allowance for Doubtful Accounts(1): | ||||||||||||||||
2017 | $ | 37 | $ | 7 | $ | (9 | ) | $ | 35 | |||||||
2016 | 34 | 9 | (6 | ) | 37 | |||||||||||
2015 | 25 | 10 | (1 | ) | 34 | |||||||||||
Allowance for Deferred Tax Assets(2): | ||||||||||||||||
2017 | $ | 5,519 | $ | 86 | $ | (1,418 | ) | $ | 4,187 | |||||||
2016 | 4,757 | 1,000 | (238 | ) | 5,519 | |||||||||||
2015 | 4,478 | 603 | (324 | ) | 4,757 |
(1) | Charges to the account are for the purposes for which the reserves were created. |
(2) | In 2017, the deferred tax assets and liabilities, along with the valuation allowance, decreased due to the reduction in the corporate income tax rate from 35% to 21% pursuant to the Tax Act. In addition, the pension liability and other federal and state deferred tax assets decreased during the year. |
• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. |
/s/ DELOITTE & TOUCHE LLP |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9B. | Other Information |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accounting Fees and Services |
Item 15. | Exhibits, Financial Statement Schedules |
(a) | The following documents are filed as part of this report: |
1. | Financial Statements |
2. | Financial Statement Schedule |
(b) | Exhibits |
Item 16. | Form 10-K Summary |
SEARS HOLDINGS CORPORATION | |
By: | /S/ ROBERT A. RIECKER |
Name: | Robert A. Riecker |
Title: | Chief Financial Officer |
Date: March 23, 2018 |
/S/ EDWARD S. LAMPERT | Director, Chairman of the Board of Directors, and Chief Executive Officer (principal executive officer) | March 23, 2018 | |
Edward S. Lampert | |||
/S/ ROBERT A. RIECKER | Chief Financial Officer (principal financial officer and principal accounting officer) | March 23, 2018 | |
Robert A. Riecker | |||
/S/ PAUL G. DEPODESTA | Director | March 23, 2018 | |
Paul G. DePodesta | |||
/S/ KUNAL S. KAMLANI | Director | March 23, 2018 | |
Kunal S. Kamlani | |||
/S/ WILLIAM C. KUNKLER, III | Director | March 23, 2018 | |
William C. Kunkler, III | |||
/S/ ANN N. REESE | Director | March 23, 2018 | |
Ann N. Reese | |||
/S/ THOMAS J. TISCH | Director | March 23, 2018 | |
Thomas J. Tisch | |||
2.1 | ||||
2.2 | ||||
2.3 | ||||
3.1 | ||||
3.2 | ||||
4.1 | Registrant hereby agrees to furnish to the Commission, upon request, the instruments defining the rights of holders of each issue of long-term debt of Registrant and its consolidated subsidiaries. | |||
4.2 | ||||
4.3 | ||||
4.4 | Fifth Supplemental Indenture, dated as of March 20, 2018, among Sears Holdings Corporation, the guarantors party thereto and Wilmington Trust, National Association, as successor trustee and collateral agent (incorporated by reference to Exhibit 4.1 to Registrant's Current Report on Form 8-K, dated March 20, 2018, filed March 23, 2018 (File No. 001-36693)) | |||
4.5 | Indenture, dated as of March 20, 2018, by and among Sears Holdings Corporation, the guarantors party thereto and Computershare Trust Company, N.A. (including form of note) (incorporated by reference to Exhibit 4.2 to Registrant's Current Report on Form 8-K, dated March 20, 2018, filed March 23, 2018 (File No. 001-36693)). | |||
4.6 | Amended and Restated Security Agreement, dated as of March 20, 2018, among Sears Holdings Corporation, the guarantors party thereto and National Association, as Collateral Agent (incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K, dated March 20, 2018, filed on March 23, 2018 (File No. 001-36693)). | |||
4.7 | Second Amended and Restated Intercreditor Agreement, dated as of March 20, 2018, by and among Bank of America, N.A. and Wells Fargo Bank, National Association as ABL Agents, and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K, dated March 20, 2018, filed on March 23, 2018 (File No. 001-36693)). | |||
4.8 | ||||
4.90 | ||||
4.10 | ||||
4.11 | Second Supplemental Indenture, dated as of March 20, 2018, by and by and between Sears Holdings Corporation and Computershare Trust Company, N.A., as Trustee (including form of note) (incorporated by reference to Exhibit 4.4 to Registrant’s Current Report on Form 8-K, dated March 20, 2018, filed on March 23, 2018 (File No. 001-36693)). | |||
4.12 | ||||
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*10.54 | ||||
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10.74 | Fourth Amendment to Second Lien Credit Agreement, dated as of March 20, 2018, among Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation, as borrowers, the subsidiaries of Sears Holdings Corporation party thereto, the lenders party thereto, and JPP, LLC, as administrative and collateral administrator (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K, dated March 20, 2018, filed on March 23, 2018 (File No. 001-36693)). | |||
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*31.1 | ||||
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*32.1 | ||||
*32.2 | ||||
101 | The following financial information from the Annual Report on Form 10-K for the fiscal year ended February 3, 2018, formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Operations for the fiscal years ended February 3, 2018, January 28, 2017 and January 30, 2016; (ii) the Consolidated Statements of Comprehensive Loss for the fiscal years ended February 3, 2018, January 28, 2017 and January 30, 2016; (iii) the Consolidated Balance Sheets at February 3, 2018 and January 28, 2017; (iv) the Consolidated Statements of Cash Flows for the fiscal years ended February 3, 2018, January 28, 2017 and January 30, 2016; (v) the Consolidated Statements of Equity (Deficit) for the fiscal years ended February 3, 2018, January 28, 2017 and January 30, 2016; and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. |
* | Filed herewith |
** | A management contract or compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 15(b) of Form 10-K. |
(1) | Confidential treatment was granted as to omitted portions of this Exhibit. The omitted material has been filed separately with the Securities and Exchange Commission. |
• | Annual base salary will increase to $350,000; |
• | Annual incentive opportunity under SHC’s Annual Incentive Plan will increase to 75% of your base salary; |
• | Participation under SHC’s Long Term Incentive Program will increase to 75% of your base salary. |
• | Your annual base salary rate will be increased to $425,000. |
• | A Special Performance Bonus with a target payment opportunity of $200,000 (“SPB Target”). Any payout would be based upon the combined Home Appliances cumulative BOP and Consumer Electronics cumulative BOP for the 2nd, 3rd and 4th quarters of fiscal year 2017 (“Q2-Q4FY2017”) relative to the combined Home Appliances cumulative BOP and Consumer Electronics cumulative BOP for the 2nd, 3rd and 4th quarters of fiscal year 2016 (“Q2-Q4FY2016”). Payout would be determined as follows: |
o | Q2-Q4FY2017 is equal to Q2-Q4FY2016 (“Threshold”) – Payout at Threshold equals fifty percent (50%) of SPB Target, or $100,000. |
o | Q2-Q4FY2017 is 10% greater than Q2-Q4FY2016 (“Target”) – Payout at Target equals one hundred percent (100%) of SPB Target, or $200,000. |
• | Annual base salary at a rate of $550,000. |
• | You will receive a one-time sign-on bonus of $180,000. This sign-on bonus will be payable within thirty (30) days following your start date. In the event you voluntarily terminate your employment with the Company or are terminated by the Company for misconduct or integrity issues within twenty-four (24) months of your start date, you will be required to repay the full amount of the payment paid to you, including any taxes withheld, unless prohibited by law, to the Company within thirty (30) days of your last day worked. |
• | Participation in the Sears Holdings Corporation Annual Incentive Plan (“AIP”) with an annual target incentive opportunity of 100% of your base salary. Your first year target annual incentive opportunity under the AIP will be prorated based on the period of time from your start date until the last day of such fiscal year. Any payment under the AIP will be paid by April 15th of the following fiscal year, provided that you fulfill the duties and responsibilities of your position for the applicable fiscal year (as determined by the Company) and are actively employed as of the payment date. Further details regarding your AIP target award will be provided to you following your start date. |
• | Notwithstanding the foregoing, provided you fulfill the duties and responsibilities of your position for the applicable fiscal year (as determined by the Company) and are actively employed on the AIP payment date for the applicable fiscal year’s AIP, for the following fiscal years, your AIP bonus will be no less than the minimum amount indicated below: |
Fiscal Year | Minimum Amount |
2017 | 100% of your pro-rated target incentive opportunity under the 2017 AIP. |
2018 | 100% of your target incentive opportunity under the 2018 AIP less the actual 2017 AIP paid to you on or about April 15, 2018. |
• | You will be eligible to receive a Special Incentive Award (“SIA”) with respect to each of SHC’s fiscal years stated in the chart below. Any SIA amount payable with respect to a fiscal year will be paid by April 15th of the following fiscal year provided that you are actively employed at the applicable payment date. The following is a summary of the target amounts per fiscal year under your SIA. The performance criteria and metrics detailing the payout of your SIA will be determined by the company and provided to you at a later date. |
Fiscal Year | Target Amount |
2017 | $300,000 prorated from your start date through February 3, 2018, the last day of SHC’s 2017 fiscal year |
2018 | $400,000 |
2019 | $500,000 |
• | Participation in the SHC long-term incentive programs (“LTI”): Your target incentive opportunity under the SHC LTI will be 100% of your base salary. However, your 2017 LTI target opportunity will be prorated based on the period of time from your start date through February 1, 2020, the last day of SHC’s 2019 fiscal year and the last day of the 2017 - 2019 LTI performance period. SHC’s LTI is comprised of two separate programs: (i) Cash Long-Term Incentive Plan (“Cash LTI”), a time-based vesting program; and (ii) Long-Term Incentive Program (“LTIP”), a performance-based program. For the 2017 LTI , Cash LTI is 25% of your total LTI target opportunity, and LTIP is 75% of the total. Further details regarding your SHC LTI target award and both programs will be provided to you following your start date. |
• | A special cash award of $450,000 (“Special Cash Award”). This award will be earned progressively as of your first (1st), second (2nd) and third (3rd) anniversaries of your start date as follows: |
Anniversary of Start Date | Amount |
1st | $100,000 |
2nd | $175,000 |
3rd | $175,000 |
• | You represent and warrant to the Company that: |
(a) | as of your start date with the Company, you are not subject to any obligation, written or oral, containing any non-competition provision or any other restriction (including, without limitation, any confidentiality provision) that would result in any restriction on your ability to accept and perform this or any other position with the Company or any of its affiliates; and, |
(b) | you are not (i) a member of any board of directors, board of trustees or similar governing body of any for-profit, non-profit or not-for-profit entity, or (ii) a party to any agreement, written or oral, with any entity under which you would receive remuneration for your services, except as disclosed to and approved by the Company in advance of your start date. |
• | You will be required to sign an Executive Severance Agreement (“Agreement”), the Agreement provides consideration of twelve (12) months of salary continuation, subject to mitigation, upon, for example, involuntary termination without Cause as defined therein. In addition, the Agreement includes non-disclosure, non-solicitation and a limited non-compete that apply following termination of employment and regardless of whether you receive severance benefits under this Agreement. These provisions are detailed in the Agreement, which you should review thoroughly. |
• | You will be provided commuter benefits from your start date through August 31, 2017 or until completion of your relocation to the greater Chicago metropolitan area, whichever occurs first. These commuter benefits will be: |
• | Weekly round trip commercial air transportation between your home in Portland, OR and the greater Chicago metropolitan area, subject to the procedures and guidelines set forth in SHC’s Corporate Travel and Entertainment Policy (“T&E Policy”); and |
• | A monthly cash commuter allowance of $5,000. This cash allowance is intended to assist you with all other commuter related expenses including but not limited to hotel or rent (including security deposit), utilities, meals, ground transportation including car rental, fuel and tolls, as applicable. This payment will be processed with the last paycheck of each month and is subject to applicable tax withholding. |
• | You will be eligible for relocation assistance in accordance with the Company’s standard relocation policy. To receive relocation assistance, you must sign a Relocation Repayment Agreement which will be included in the Relocation Benefits package that will be sent to you from the company’s relocation vendor. A sample copy of the Relocation Repayment Agreement is enclosed for your information. Your relocation package will include: |
• | Home sale assistance and moving and storage of household goods (includes shipment of up to two (2) automobiles); and |
• | A one-time relocation lump sum payment of $30,000 (net) |
• | You will be covered under and subject to the terms and conditions of the Non-Accrual Vacation Policy. |
• | You will be eligible to participate in all retirement, health and welfare programs on a basis no less favorable than other executives at your level, in accordance with the applicable terms, conditions and availability of those programs. |
• | This offer also is contingent upon satisfactory completion of a background reference check, employment authorization verification and pre-employment drug test. |
1. | The Company will withhold and report on Form W-2 all taxes applicable to relocation benefits and payments for relocation services. It is my responsibility to maintain all receipts for and documentation of my relocation expenses. |
2. | If I do not complete my relocation by the first anniversary of my start date with the Company, I will repay all relocation benefits and reimbursements, with taxes, to the Company within thirty (30) days of request and will forfeit any and all rights, claims or interest in or to any future benefits and/or payments. |
3. | If I withdraw from the offered relocation, voluntarily terminate my employment with the Company or be involuntarily terminated from employment by the Company for misconduct or integrity, I will reimburse the Company, as specified below, for relocation benefits and payments provided to me or paid on my behalf including any taxes withheld and any tax gross-up, unless prohibited by law: |
4. | I authorize the Company to make deductions from my final paycheck and any form of compensation paid to me following my termination to satisfy any reimbursement obligation under this Agreement except if and to the extent prohibited by law. If such deductions are not sufficient to reimburse the Company, I will pay the Company the remaining balance on my last day of employment. If I fail to fulfill the reimbursement obligation, I will be liable for all costs and attorney fees incurred by the Company in connection with the collection of my relocation expenses. |
5. | My relocation expenses will not be processed unless I sign this Agreement. |
6. | This Agreement will be governed by the laws of the State of Illinois without regard to its choice of law provisions. |
• | Annual base salary at a rate of $475,000. |
• | You will be eligible to receive a long-term incentive cash award of $350,000 (gross). The grant date of this award is February 2, 2014, subject to Compensation Committee approval. This award will be scheduled to vest on a graded basis, with $50,000 of the award vesting on the first anniversary of the grant date and $150,000 of the award vesting on each of the second and third anniversaries of the grant date, provided you are actively employed on the applicable vesting date, and will be payable as soon as administratively possible following the applicable vesting date. This award is separate from and not in the place of your participation under the Sears Holdings long-term incentive programs. Once approved by the Compensation Committee, this award will be documented by a Sears Holdings Corporation Executive LTI Cash Award Agreement (“Award Agreement”). Enclosed for your information is a draft of the Award Agreement, which includes the specific terms of the award. |
1. | Retention Award. Subject to the terms and conditions of this Agreement: |
Retention Periods | Start/End of Retention Period | Retention Awards |
1st Retention Period | Date Agreement signed by Executive until January 31, 2018 | $100,000 |
2nd Retention Period | Last day of 1st Retention Period until April 30, 2018 | $100,000 |
3rd Retention Period | Last day of 2nd Retention Period until July 31, 2018 | $100,000 |
4th Retention Period | Last day of 3rd Retention Period until October 31, 2018 | $100,000 |
1. | made within thirty (30) days after the end of the applicable Retention Period; |
2. | subject to applicable withholding in accordance with Section 2(g) below; |
3. | a special bonus and shall not be eligible compensation for purposes of any qualified or nonqualified retirement plan maintained by Sears. |
EXECUTIVE | SEARS HOLDINGS CORPORATION | |
/s/ Leena Munjal | /s/ Julie Ainsworth | |
Leena Munjal | Julie Ainsworth | |
1/8/2018 | 1/10/2018 | |
Date | Date |
1. | Incorporation of Terms. All capitalized terms not otherwise defined herein shall have the same meaning as in the Existing LC Facility Agreement. |
2. | Amendments to Existing LC Facility Agreement. Each of the parties hereto agrees that, effective as of the Amendment Effective Date (as defined below), Section 2.05(e) of the Existing LC Facility Agreement shall be amended and restated as follows: |
3. | Conditions to Effectiveness. This Amendment shall become effective on the date (the “Amendment Effective Date”) that this Amendment shall have been duly executed and delivered by Holdings, the Borrowers, the Required L/C Lenders, the Agent and the Issuing Bank, and the Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. |
4. | Binding Effect. The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto, the L/C Lenders, the Issuing Bank and their respective successors and assigns. |
5. | Multiple Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original and together which shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e. “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. |
6. | Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW. |
7. | Jurisdiction. Section 9.11 of the Existing LC Facility Agreement is hereby incorporated by reference, mutatis mutandis, as if it were fully set forth in this Amendment. |
8. | WAIVER OF JURY TRIAL. EACH OF HOLDINGS, THE BORROWERS, THE AGENT, THE ISSUING BANK AND THE L/C LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE OTHER LOAN DOCUMENTS OR THE ACTIONS OF THE AGENT, THE ISSUING BANK OR ANY L/C LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF. |
Title: | Vice President of BlueLight.com, Inc., the Sole Member of Kmart.com LLC |
Title: | Member |
Name of Term Increase Lender | Amendment No. 1 Term Increase Commitment |
JPP, LLC | $21,698,000 |
JPP II, LLC | $8,302,000 |
TOTAL | $30,000,000 |
(i) | The first sentence of Section 2.18(g) of the Credit Agreement is hereby deleted in its entirety. |
(ii) | Section 2.07 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
(i) | such certificates of resolutions or other action, incumbency certificates and/or other certificates of Authorized Officers of each Loan Party as the Agent may reasonably require evidencing (A) the authority of each Loan Party to enter into this Amendment and the other documents or instruments executed or to be executed in connection with this Amendment to which such Loan Party is a party or is to be a party and (B) the identity, authority and capacity of each Authorized Officer thereof authorized to act as an Authorized Officer in connection with this Amendment and such other documents to which such Loan Party is a party or is to be a party (or, in the case of this clause (B), in the Agent’s discretion “no change” certifications); |
(ii) | copies of each Loan Party’s organization or other governing documents and such other documents and certifications as the Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing and in good standing in its jurisdiction of organization and, with respect to each Loan Party granting a Mortgage, in good standing in each jurisdiction other than California where any Property owned by such Loan Party is located; |
(iii) | an opinion of counsel from each of (a) Wachtell, Lipton, Rosen & Katz, as special New York counsel, (b) Morris, Nichols, Arsht & Tunnel LLP, as Delaware local counsel and (c) Dykema Gossett PLLC, as Illinois, Michigan and Texas local counsel, to Holdings, the Borrowers, and the other Loan Parties, or such other firms as may be reasonably acceptable to the Agent; |
(iv) | a certificate signed by an Authorized Officer of Holdings and the Borrowers certifying (A) that the conditions specified in Section 4.02 of the Credit Agreement have been satisfied and (B) that the execution and delivery of this Amendment and the incurrence of the Loans, when incurred, will not conflict with, and the Liens on the Collateral granted pursuant to any Loan Document to secure the Loans are permitted by, the Material Documents; |
(v) | results of searches or other evidence reasonably satisfactory to the Agent (in each case dated as of a date reasonably satisfactory to the Agent) indicating the absence of Liens on the Collateral, except for Liens permitted by Section 6.02(a) of the Credit Agreement; and |
(vi) | such other customary certificates, documents or consents as the Agent reasonably may require. |
By: | Cyrus Capital Partners, L.P., as Investment Manager |
Name of Term Increase Lender | Additional Term Increase Commitment |
JPP, LLC | $11,069,000.00 |
JPP II, LLC | $28,931,000.00 |
Total | $40,000,000 |
Page | |||
ARTICLE I | DEFINITIONS | 1 | |
SECTION 1.01. | Defined Terms | 1 | |
SECTION 1.02. | Terms Generally | 25 | |
SECTION 1.03. | Accounting Terms; GAAP; Pro Forma Calculations | 26 | |
SECTION 1.04. | Rounding | 27 | |
SECTION 1.05. | Times of Day | 27 | |
ARTICLE II | THE TERM LOAN | 27 | |
SECTION 2.01. | Commitments | 27 | |
SECTION 2.02. | Loans | 27 | |
SECTION 2.03. | Request for Loans | 27 | |
SECTION 2.04. | Reserved | 27 | |
SECTION 2.05. | Reserved | 27 | |
SECTION 2.06. | Reserved | 27 | |
SECTION 2.07. | Joint and Several Liability | 27 | |
SECTION 2.08. | Termination of Commitments | 28 | |
SECTION 2.09. | Repayment of Loans; Evidence of Debt | 28 | |
SECTION 2.10. | Repayment of Loans | 29 | |
SECTION 2.11. | Fees | 31 | |
SECTION 2.12. | Interest | 31 | |
SECTION 2.13. | Illegality | 32 | |
SECTION 2.14. | Alternate Rate of Interest | 32 | |
SECTION 2.15. | Increased Costs | 33 | |
SECTION 2.16. | Break Funding Payments | 34 | |
SECTION 2.17. | Taxes | 34 | |
SECTION 2.18. | Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of Set-offs | 38 | |
SECTION 2.19. | Mitigation Obligations; Replacement of Lenders | 39 | |
SECTION 2.20. | Collateral Reserves | 40 | |
ARTICLE III | REPRESENTATIONS AND WARRANTIES | 41 | |
SECTION 3.01. | Organization; Powers; Single Purpose Entity; Subsidiaries | 41 | |
SECTION 3.02. | Authorization; Enforceability | 42 | |
SECTION 3.03. | Governmental Approvals; No Conflicts | 42 | |
SECTION 3.04. | Financial Condition; No Material Adverse Change | 42 | |
SECTION 3.05. | Properties; Title | 43 | |
SECTION 3.06. | Litigation, Environmental and Labor Matters | 43 | |
SECTION 3.07. | Compliance with Laws and Agreements | 43 | |
SECTION 3.08. | Investment Company Status | 43 | |
SECTION 3.09. | Taxes | 44 | |
SECTION 3.10. | ERISA | 44 | |
SECTION 3.11. | Disclosure | 44 | |
SECTION 3.12. | Federal Reserve Regulations | 44 |
Page | |||
SECTION 3.13. | Liens | 45 | |
SECTION 3.14. | Condemnation | 45 | |
SECTION 3.15. | Utilities and Public Access; Zoning | 45 | |
SECTION 3.16. | Solvency | 45 | |
SECTION 3.17. | Insurance | 45 | |
SECTION 3.18. | Security Interest in Collateral | 45 | |
SECTION 3.19. | Master Lease; Agreements; Management Agreements | 45 | |
SECTION 3.20. | OFAC | 45 | |
SECTION 3.21. | Patriot Act | 46 | |
SECTION 3.22. | Foreign Corrupt Practices Act; Anti-Corruption Laws | 46 | |
SECTION 3.23. | Tax Shelter Regulations | 46 | |
SECTION 3.24. | PPPFA | 46 | |
SECTION 3.25. | Broker’s Fees | 46 | |
SECTION 3.26. | Federal Income Tax Classification | 46 | |
SECTION 3.27. | Flood Zone | 46 | |
SECTION 3.28. | Physical Condition | 47 | |
SECTION 3.29. | Master Lease; Ground Leases; Leases | 47 | |
SECTION 3.30. | Boundaries; Separate Lots | 48 | |
SECTION 3.31. | Opinion Assumptions | 49 | |
SECTION 3.32. | Business Purpose | 49 | |
SECTION 3.33. | Certificate of Occupancy; Licenses | 49 | |
SECTION 3.34. | Assessments | 49 | |
SECTION 3.35. | Filing, Recording and Other Taxes | 49 | |
SECTION 3.36. | Casualty | 49 | |
SECTION 3.37. | Purchase Options | 49 | |
SECTION 3.38. | Underwriting Representations | 50 | |
SECTION 3.39. | Sears REMIC | 50 | |
ARTICLE IV | CONDITIONS | 50 | |
SECTION 4.01. | Effective Date | 50 | |
ARTICLE V | AFFIRMATIVE COVENANTS | 52 | |
SECTION 5.01. | Financial Statements and Other Information | 53 | |
SECTION 5.02. | Notices of Material Events | 53 | |
SECTION 5.03. | Existence; Conduct of Business | 55 | |
SECTION 5.04. | Payment of Obligations | 55 | |
SECTION 5.05. | Maintenance of Properties; Defense of Title; Insurance; Further Assurances | 55 | |
SECTION 5.06. | Books and Records; Inspection Rights | 56 | |
SECTION 5.07. | Compliance with Laws and Obligations | 57 | |
SECTION 5.08. | Use of Proceeds | 57 |
Page | |||
SECTION 5.09. | Alterations | 57 | |
SECTION 5.10. | Handicapped Access | 58 | |
SECTION 5.11. | Additional Collateral; Environmental Matters; Further Assurances; Estoppels | 58 | |
SECTION 5.12. | Cooperation in Legal Proceedings | 60 | |
SECTION 5.13. | Master Lease | 60 | |
SECTION 5.14. | Taxes on Security | 60 | |
SECTION 5.15. | Interest Rate Protection | 60 | |
SECTION 5.16. | Single Purpose Entity | 61 | |
SECTION 5.17. | Post-Closing Matters | 61 | |
SECTION 5.18. | Ground Lease | 61 | |
SECTION 5.19. | REA | 64 | |
ARTICLE VI | NEGATIVE COVENANTS | 65 | |
SECTION 6.01. | Indebtedness; Swap Agreements | 65 | |
SECTION 6.02. | Liens | 66 | |
SECTION 6.03. | Transfers | 66 | |
SECTION 6.04. | Investments | 67 | |
SECTION 6.05. | Reserved | 67 | |
SECTION 6.06. | Transactions with Affiliates | 67 | |
SECTION 6.07. | REA | 67 | |
SECTION 6.08. | Management Agreements | 68 | |
SECTION 6.09. | Material Agreements; Master Lease; Organizational Documents | 68 | |
SECTION 6.10. | No Joint Assessment | 68 | |
SECTION 6.11. | No Plan Assets | 68 | |
SECTION 6.12. | Zoning | 68 | |
SECTION 6.13. | Use of Properties | 68 | |
SECTION 6.14. | Accounting Changes; Fiscal Year | 68 | |
SECTION 6.15. | Ground Lease | 68 | |
SECTION 6.16. | PPPFA | 69 | |
ARTICLE VII | EVENTS OF DEFAULT | 69 | |
SECTION 7.01. | Events of Default | 69 | |
SECTION 7.02. | Limited Right to Cure | 73 | |
ARTICLE VIII | THE ADMINISTRATIVE AGENT | 73 | |
SECTION 8.01. | Appointment of Agency | 73 | |
SECTION 8.02. | Rights and Powers of Administrative Agent | 74 | |
SECTION 8.03. | Resignation and Replacement | 75 | |
SECTION 8.04. | No Joint Venture, Etc | 75 | |
SECTION 8.05. | Agent as Representative, Etc | 76 | |
Page | |||
ARTICLE IX | MISCELLANEOUS | 77 | |
SECTION 9.01. | Notices; Effectiveness; Electronic Communication | 77 | |
SECTION 9.02. | Waivers; Amendments | 79 | |
SECTION 9.03. | Expenses; Indemnity; Damage Waiver | 81 | |
SECTION 9.04. | Successors and Assigns | 83 | |
SECTION 9.05. | Survival | 86 | |
SECTION 9.06. | Counterparts; Integration; Effectiveness | 86 | |
SECTION 9.07. | Severability | 86 | |
SECTION 9.08. | Right of Setoff | 87 | |
SECTION 9.09. | Governing Law; Jurisdiction; Consent to Service of Process | 87 | |
SECTION 9.10. | WAIVER OF JURY TRIAL | 88 | |
SECTION 9.11. | Headings | 88 | |
SECTION 9.12. | Confidentiality | 88 | |
SECTION 9.13. | USA Patriot Act | 89 | |
SECTION 9.14. | Exculpation | 89 | |
SECTION 9.15. | Acknowledgement and Consent to Bail-In of EEA Financial Institutions | 93 | |
SECTION 9.16. | Interest Rate Limitation | 94 | |
SECTION 9.17. | No Advisory or Fiduciary Responsibility | 94 | |
SECTION 9.18. | Independent Effect of Covenants | 94 | |
SECTION 9.19. | Inconsistencies with Other Documents | 94 | |
SECTION 9.20. | Partial Release | 95 | |
SECTION 9.21. | Publicity | 95 | |
SECTION 9.22. | Additional Titles | 95 |
Date | Applicable Margin for Eurodollar Loans | Applicable Margin for Base Rate Loans |
Effective Date through and including June 14, 2018 | 6.50% | 5.50% |
June 15, 2018 through and including September 14, 2018 | 7.50% | 6.50% |
September 15, 2018 and at all times thereafter | 8.50% | 7.50% |
Store Number | Address | City | County | State | |
1 | 2819 | 3115 Airport Way | Fairbanks | Fairbanks North Star Borough | AK |
2 | 1228 | 1601 Arden Way | Arden | Sacramento | CA |
3 | 4371 | 2875 Santa Maria Way | Santa Maria | Santa Barbara | CA |
4 | 1141 | 14200 E. Alameda Avenue | Aurora | Arapahoe | CO |
5 | 1221 | 1650 Briargate Blvd | Colorado Springs | El Paso | CO |
6 | 1281 | 3201 Dillon Dr | Pueblo | Pueblo | CO |
7 | 1831 | 16395 Washington Street | Thornton | Adams | CO |
8 | 1043 | 470 Lewis Ave | Meriden | New Haven | CT |
9 | 1263 | 425 Union St | Waterbury | New Haven | CT |
10 | 7979 | 3555 St. Johns Bluff Road South | Jacksonville | Duval | FL |
11 | 8065 | 3301 NW 107th Ave | Doral | Miami-Dade | FL |
12 | 1035 | 3450 Wrightsboro Road | Augusta | Richmond | GA |
13 | 1095 | 6580 Douglas Blvd | Douglasville | Douglas | GA |
14 | 1155 | 400 Ernest W Barrett Pkwy Nw | Kennesaw | Cobb | GA |
15 | 1565 | 1300 Southlake Mall | Morrow(Southlake) | Clayton | GA |
16 | 1685 | 2100 Pleasant Hill Road | Duluth | Gwinnett | GA |
17 | 2845 | 3700 Atlanta Highway | Athens | Clarke | GA |
18 | 8745 | 4650, 4616 & 4740 Hugh Howell Road; 2301 Mountain Industrial Boulevard | Tucker | DeKalb | GA |
19 | 1012 | 4000 Merle Hay Road** | Des Moines | Polk | IA |
20 | 2422 | 4480 Sergeant Road | Sioux City | Woodbury | IA |
21 | 2760 | 320 W Kimberly Road | Davenport | Scott | IA |
22 | 1172 | 5 Stratford Square | Bloomingdale | Dupage | IL |
23 | 1321 | 2200 W War Memorial Dr Ste 998 | Peoria | Peoria | IL |
24 | 1570 | 2 Woodfield Mall | Schaumburg | Cook | IL |
25 | 1780 | 104 White Oaks Mall | Springfield | Sangamon | IL |
26 | 1820 | 5000 Spring Hill Mall | West Dundee | Kane | IL |
27 | 1840 | 6501 95Th Street | Chicago Ridge | Cook | IL |
28 | 2121 | 1607 36Th Street | Peru | La Salle | IL |
29 | 2360 | 3400 Quincy Mall | Quincy | Adams | IL |
30 | 1600 | 6020 E 82Nd St | Indianapolis | Marion | IN |
31 | 1650 | 2300 Southlake Mall | Merrillville | Lake | IN |
32 | 1680 | 10202 E Washington Street | Indianapolis | Marion | IN |
33 | 1800 | 6501 Grape Road | Mishawaka | St. Joseph | IN |
34 | 2290 | 3901 Franklin Street | Michigan City | Laporte | IN |
35 | 1642 | 1781 SW Wanamaker Road | Topeka | Shawnee | KS |
36 | 1730 | 3000 Mall Road | Florence | Boone | KY |
37 | 1077 | 3601 Southern Ave | Shreveport | Caddo Parish | LA |
38 | 1086 | 9001 Cortana Place | Baton Rouge | East Baton Rouge Parish | LA |
39 | 1116 | 4800 Millhaven Road | Monroe | Ouachita Parish | LA |
40 | 1147 | 6501 Blubonnet Boulevard | Baton Rouge | East Baton Rouge Parish | LA |
41 | 1226 | 4400 Veterans Memorial Boulevard | Metairie | Jefferson Parish | LA |
Store Number | Address | City | County | State | |
42 | 2087 | 3401 Masonic Dr | Alexandria | Rapides Parish | LA |
43 | 2677 | 2950 E. Texas Street | Bossier City | Bossier Parish | LA |
44 | 1033 | 1009 South Washington Street | North Attleboro | Bristol | MA |
45 | 1104 | 521 Donald Lynch Blvd | Marlborough | Middlesex and Worcester | MA |
46 | 1223 | 200 Westgate Dr | Brockton-Westgate | Plymouth | MA |
47 | 2934 | 8 Galleria Mall Drive | Taunton | Bristol | MA |
48 | 1074 | 11170 Mall Circle | Waldorf | Charles | MD |
49 | 1634 | 6901 Security Blvd | Baltimore | Baltimore | MD |
50 | 1754 | 701 Russell Ave | Gaithersburg | Montgomery | MD |
51 | 1854 | 8200 Perry Hall | Nottingham | Baltimore | MD |
52 | 1011 | 3622 Rivertown Pkwy Sw | Grandville | Kent | MI |
53 | 1092 | 35000 Warren Road ** | Westland | Wayne | MI |
54 | 1110 | 6780 S Westnedge Ave | Portage | Kalamazoo | MI |
55 | 1192 | 5500 Harvey St | Muskegon | Muskegon | MI |
56 | 1700 | 18900 Michigan Ave | Dearborn | Wayne | MI |
57 | 1720 | 14100 Lakeside Circle | Sterling Hts | Macomb | MI |
58 | 1760 | 27600 Novi Road | Novi | Oakland | MI |
59 | 2040 | 5575 B Drive N | Battle Creek | Calhoun | MI |
60 | 2180 | 1212 S Airport Road W | Traverse City | Grand Traverse | MI |
61 | 9693 | Shortcut Road | Marine City | St Clair | MI |
62 | 8702 | 2700 Winter St Ne | Minneapolis | Hennepin | MN |
63 | 1042 | 101 N Rangeline Road | Joplin | Jasper | MO |
64 | 1171 | 2825 S Glenstone Ave, Suite 500 | Springfield | Greene | MO |
65 | 1182 | 3 Mid Rivers Mall Dr | St. Peters | St. Charles | MO |
66 | 1222 | 250 S County Center Way | St. Louis | St. Louis County | MO |
67 | 1690 | 1 Chesterfield Mall | Chesterfield | St. Louis | MO |
68 | 1822 | 330 Siemers Drive | Cape Girardeau | Cape Girardeau County | MO |
69 | 1166 | 1740 Bonita Lakes Circle | Meridian | Lauderdale | MS |
70 | 1306 | 1000 Turtle Creek Dr | Hattiesburg | Lamar | MS |
71 | 1165 | 1480 Concord Parkway | Concord | Cabarrus | NC |
72 | 1375 | 3320 Silas Creek Pkwy | Winston Salem | Forsyth | NC |
73 | 1605 | 7330 Old Wake Forest Road | Raleigh | Wake | NC |
74 | 1805 | 4601 Glenwood Ave Unit 1 | Raleigh | Wake | NC |
75 | 2175 | 3600 S. Memorial Drive | Greenville | Pitt | NC |
76 | 2515 | 1940 US Highway 70 SE | Hickory | Catawba | NC |
77 | 7385 | 819 E Six Forks Road | Raleigh | Wake | NC |
78 | 1712 | 2800 S Columbia Road | Grand Forks | Grand Forks | ND |
79 | 1022 | 3420 Oak View Drive | Oakview | Douglas | NE |
80 | 1314 | 51 Us Hwy #1 | New Brunswick | Middlesex | NJ |
81 | 1554 | 4409 Black Horse Pike | Mays Landing | Atlantic | NJ |
82 | 1614 | 112 Eisenhower Pkwy Ste 2A | Livingston | Essex | NJ |
83 | 1734 | 300 Quaker Bridge Mall | Lawrenceville | Mercer | NJ |
84 | 1764 | Route 80 & Mt. Hope Avenue | Rockaway | Morris | NJ |
85 | 1874 | 2501 Mt Holly Road | Burlington | Burlington | NJ |
86 | 1717 | 10000 Coors Bypass Nw | Albuquerque | Bernalillo | NM |
87 | 2207 | 1000 S Main St | Roswell | Chaves | NM |
Store Number | Address | City | County | State | |
88 | 1504 | 4475 Transit Road | Clarence | Erie | NY |
89 | 4928 | 308 Dix Avenue | Queensberry | Warren | NY |
90 | 1051 | 17271 Southpark Ctr | Strongsville | Cuyahoga | OH |
91 | 1120 | 5053 Tuttle Crossing Blvd | Columbus | Franklin | OH |
92 | 1210 | 1400 Polaris Parkway | Columbus | Delaware | OH |
93 | 1710 | 5000 Great Northern Mall | North Olmsted | Cuyahoga | OH |
94 | 2010 | 600 Richland Mall | Mansfield | Richland | OH |
95 | 2390 | 1475 Upper Valley Pike | Springfield | Clark | OH |
96 | 4937 | 1470 North Bridge Street | Chillicothe | Ross | OH |
97 | 1545 | 205 W. Blackstock Road | Spartanburg | Spartanburg | SC |
98 | 1595 | 700 Haywood Road | Greenville | Greenville | SC |
99 | 2305 | 3101 N. Main Street | Anderson | Anderson | SC |
100 | 2855 | 2068 Sam Rittenberg Boulevard | Charleston | Charleston | SC |
101 | 1315 | 401 Northgate Mall | Chattanooga | Hamilton | TN |
102 | 8206 | 640 Thompson Lane | Nashville | Davidson | TN |
103 | 447 | 3, 1501 & 1602 Kings Road; 2850 & 3150 Marquis Drive | Garland | Dallas | TX |
104 | 1027 | 750 Sunland Park Drive | El Paso | El Paso | TX |
105 | 1076 | 2401 S Stemmons Fwy | Lewisville | Denton | TX |
106 | 1176 | 999 Pasadena Blvd | Pasadena | Harris | TX |
107 | 1187 | 3000 Town East Mall | Mesquite | Dallas | TX |
108 | 1217 | 1305 Airline Road | Corpus Christi | Nueces | TX |
109 | 1267 | 1800 Green Oaks Road | Fort Worth | Tarrant | TX |
110 | 1297 | 1101 Melbourne Road | Hurst | Tarrant | TX |
111 | 1307 | 4310 Buffalo Gap Road | Abilene | Taylor | TX |
112 | 1317 | 8401 Gateway Blvd W | El Paso | El Paso | TX |
113 | 1327 | 1000 San Jacinto Mall | Baytown | Harris | TX |
114 | 1337 | 851 N Central Expwy | Plano | Collin | TX |
115 | 1367 | 6001 W Waco Dr | Waco | Mclennan | TX |
116 | 1377 | 7925 Fm 1960 Road W | Houston | Harris | TX |
117 | 1387 | 7701 Interstate Highway 40 W | Amarillo | Potter | TX |
118 | 1407 | 6461 Eastex Fwy | Beaumont | Jefferson | TX |
119 | 1417 | 20131 Highway 59 N | Humble | Harris | TX |
120 | 1427 | 6909 N Loop 1604 E | San Antonio | Bexar | TX |
121 | 1447 | 4900 S. Hulen Street | Hulen | Tarrant | TX |
122 | 1487 | 12701 Ridgeline Boulevard | Austin | Williamson | TX |
123 | 2197 | 10000 Emmett F Lowry Expy | Texas City | Galveston | TX |
124 | 2247 | 5300 San Dario Avenue | Laredo | Webb | TX |
125 | 2497 | 2320 N Expressway | Brownsville | Cameron | TX |
126 | 2547 | 1502 Harvey Road | College Station | Brazos | TX |
127 | 2557 | 3510 McCann Road | Longview | Gregg | TX |
128 | 2587 | 2201 S. Interstate 35 E | Denton | Denton | TX |
129 | 8147 | 7353 NW Loop 410 | San Antonio | Bexar | TX |
130 | 8217 | 5001 N. Beach Street | Fort Worth | Tarrant | TX |
131 | 8717 | 5901 Griggs Road | Houston | Harris | TX |
132 | 1029 | 4700 N Division St | Spokane | Spokane | WA |
133 | 1038 | 14720 E Indiana Ave | Spokane Valley | Spokane | WA |
134 | 1139 | 301 Southcenter Mall | Tukwila | King | WA |
Store Number | Address | City | County | State | |
135 | 2029 | 9 E Valley Mall Blvd ** | Union Gap | Yakima | WA |
136 | 2219 | 651 Sleater Kinney Road | Lacey/Olympia | Thurston | WA |
137 | 2309 | 10315 Silverdale Way Nw, Suite C | Silverdale | Kitsap | WA |
138 | 4147 | 4110 E Sprague Avenue | Spokane | Spokane | WA |
Borrower | Currently Owned Permitted Subsidiaries | Previously Owned Permitted Subsidiaries |
SRC O.P. LLC | SRC Facilities LLC (formerly known as SRC Facilities Statutory Trust No. 2003-A) | None |
SRC Facilities LLC | SRC Real Estate (TX), LLC | SRC Real Estate Holdings (TX), LLC |
SRC Real Estate (TX), LLC | None | None |
Store | Location | Notes |
1012 | Des Moines, IA | SRC Facilities LLC owns the leasehold interest |
1092 | Westland, MI | SRC Facilities LLC owns the leasehold interest |
2017 | Gastonia, NC | SRC Facilities LLC (formerly known as SRC Facilities Statutory Trust No. 2003-A) used to own |
2029 | Union Gap, WA | SRC Facilities LLC owns the leasehold interest |
8745 | Tucker, GA | SRC Facilities LLC used to own parcel 1 and a portion of parcel 2 |
1080 | Frisco, TX | Borrower previously owned; removed from REMIC |
1099 | Federal Way, WA | Borrower previously owned; removed from REMIC |
1109 | Lynnwood, WA | Borrower previously owned; removed from REMIC |
1204 | Freehold, NJ | Borrower previously owned; removed from REMIC |
1271 | Littleton, CO | Borrower previously owned; removed from REMIC |
1286 | Gretna, NA | Borrower previously owned; removed from REMIC |
1343 | Cambridge, MA | Borrower previously owned; removed from REMIC |
1357 | Austin, TX | Borrower previously owned; removed from REMIC |
1390 | Ann Arbor, MI | Borrower previously owned; removed from REMIC |
1403 | Natick, MA | Borrower previously owned; removed from REMIC |
1405 | Fayetteville, NC | Borrower previously owned; removed from REMIC |
1424 | Bethesda, MD | Borrower previously owned; removed from REMIC |
1435 | Macon, GA | Borrower previously owned; removed from REMIC |
1437 | Arlington, TX | Borrower previously owned; removed from REMIC |
1455 | Wilmington, NC | Borrower previously owned; removed from REMIC |
1457 | The Woodlands, TX | Borrower previously owned; removed from REMIC |
1464 | Deptford, NJ | Borrower previously owned; removed from REMIC |
1475 | Durham, NC | Borrower previously owned; removed from REMIC |
1664 | Paramus, NJ | Borrower previously owned; removed from REMIC |
1750 | Orland Park, IL | Borrower previously owned; removed from REMIC |
1790 | Louisville, KY | Borrower previously owned; removed from REMIC |
1810 | Cincinnati, OH | Borrower previously owned; removed from REMIC |
1985 | High Point, NC | Borrower previously owned; removed from REMIC |
2060 | Forsyth, IL | Borrower previously owned; removed from REMIC |
2115 | Waycross, GA | Borrower previously owned; removed from REMIC |
2161 | Coralville, IA | Borrower previously owned; removed from REMIC |
2250 | Crystal Lake, IL | Borrower previously owned; removed from REMIC |
2271 | Fort Collins, CO | Borrower previously owned; removed from REMIC |
2507 | McAllen, TX | Borrower previously owned; removed from REMIC |
2524 | Toms River, NJ | Borrower previously owned; removed from REMIC |
2865 | Union City, GA | Borrower previously owned; removed from REMIC |
EMG Project # | Service | Store # | Report Date |
129620.17R000-058.042 | Property Condition Assessment | 1011 | 12/28/2017 |
129620.17R000-019.042 | Property Condition Assessment | 1012 | 12/27/2017 |
129620.17R000-078.042 | Property Condition Assessment | 1022 | 01/12/2018 |
129620.17R000-127.042 | Property Condition Assessment | 1027 | 01/12/2018 |
129620.17R000-136.042 | Property Condition Assessment | 1029 | 01/13/2018 |
129620.17R000-046.042 | Property Condition Assessment | 1033 | 12/28/2017 |
129620.17R000-018.042 | Property Condition Assessment | 1035 | 12/29/2017 |
129620.17R000-137.042 | Property Condition Assessment | 1038 | 01/12/2018 |
129620.17R000-066.042 | Property Condition Assessment | 1042 | 01/09/2018 |
129620.17R000-008.042 | Property Condition Assessment | 1043 | 01/12/2018 |
129620.17R000-092.042 | Property Condition Assessment | 1051 | 01/09/2018 |
129620.17R000-048.042 | Property Condition Assessment | 1074 | 12/22/2017 |
129620.17R000-102.042 | Property Condition Assessment | 1076 | 01/12/2018 |
129620.17R000-040.042 | Property Condition Assessment | 1077 | 01/11/2018 |
129620.17R000-038.042 | Property Condition Assessment | 1086 | 01/12/2018 |
129620.17R000-053.042 | Property Condition Assessment | 1092 | 01/12/2018 |
129620.17R000-014.042 | Property Condition Assessment | 1095 | 12/27/2017 |
129620.17R000-044.042 | Property Condition Assessment | 1104 | 12/28/2017 |
129620.17R000-057.042 | Property Condition Assessment | 1110 | 12/28/2017 |
129620.17R000-042.042 | Property Condition Assessment | 1116 | 01/08/2018 |
129620.17R000-089.042 | Property Condition Assessment | 1120 | 12/28/2017 |
129620.17R000-131.042 | Property Condition Assessment | 1139 | 12/29/2017 |
129620.17R000-004.042 | Property Condition Assessment | 1141 | 12/27/2017 |
129620.17R000-039.042 | Property Condition Assessment | 1147 | 12/27/2017 |
129620.17R000-015.042 | Property Condition Assessment | 1155 | 12/27/2017 |
129620.17R000-075.042 | Property Condition Assessment | 1165 | 01/10/2018 |
129620.17R000-068.042 | Property Condition Assessment | 1166 | 01/13/2018 |
129620.17R000-067.042 | Property Condition Assessment | 1171 | 12/28/2017 |
129620.17R000-022.042 | Property Condition Assessment | 1172 | 01/13/2018 |
129620.17R000-115.042 | Property Condition Assessment | 1176 | 01/12/2018 |
129620.17R000-064.042 | Property Condition Assessment | 1182 | 12/28/2017 |
129620.17R000-104.042 | Property Condition Assessment | 1187 | 12/28/2017 |
129620.17R000-059.042 | Property Condition Assessment | 1192 | 12/28/2017 |
129620.17R000-090.042 | Property Condition Assessment | 1210 | 12/28/2017 |
129620.17R000-122.042 | Property Condition Assessment | 1217 | 01/12/2018 |
129620.17R000-006.042 | Property Condition Assessment | 1221 | 12/29/2017 |
129620.17R000-063.042 | Property Condition Assessment | 1222 | 01/12/2018 |
129620.17R000-045.042 | Property Condition Assessment | 1223 | 12/28/2017 |
129620.17R000-037.042 | Property Condition Assessment | 1226 | 12/27/2017 |
129620.17R000-003.042 | Property Condition Assessment | 1228 | 12/27/2017 |
129620.17R000-009.042 | Property Condition Assessment | 1263 | 01/08/2018 |
129620.17R000-108.042 | Property Condition Assessment | 1267 | 01/15/2018 |
129620.17R000-007.042 | Property Condition Assessment | 1281 | 01/08/2018 |
EMG Project # | Service | Store # | Report Date |
129620.17R000-107.042 | Property Condition Assessment | 1297 | 12/28/2017 |
129620.17R000-069.042 | Property Condition Assessment | 1306 | 01/12/2018 |
129620.17R000-126.042 | Property Condition Assessment | 1307 | 01/10/2018 |
129620.17R000-084.042 | Property Condition Assessment | 1314 | 12/28/2017 |
129620.17R000-100.042 | Property Condition Assessment | 1315 | 01/08/2018 |
129620.17R000-128.042 | Property Condition Assessment | 1317 | 12/28/2017 |
129620.17R000-027.042 | Property Condition Assessment | 1321 | 12/27/2017 |
129620.17R000-116.042 | Property Condition Assessment | 1327 | 01/08/2018 |
129620.17R000-103.042 | Property Condition Assessment | 1337 | 01/12/2018 |
129620.17R000-112.042 | Property Condition Assessment | 1367 | 01/15/2018 |
129620.17R000-070.042 | Property Condition Assessment | 1375 | 12/28/2017 |
129620.17R000-113.042 | Property Condition Assessment | 1377 | 12/28/2017 |
129620.17R000-125.042 | Property Condition Assessment | 1387 | 01/11/2018 |
129620.17R000-118.042 | Property Condition Assessment | 1407 | 01/15/2018 |
129620.17R000-114.042 | Property Condition Assessment | 1417 | 12/28/2017 |
129620.17R000-121.042 | Property Condition Assessment | 1427 | 12/28/2017 |
129620.17R000-109.042 | Property Condition Assessment | 1447 | 12/28/2017 |
129620.17R000-124.042 | Property Condition Assessment | 1487 | 12/28/2017 |
129620.17R000-088.042 | Property Condition Assessment | 1504 | 01/12/2018 |
129620.17R000-096.042 | Property Condition Assessment | 1545 | 01/08/2018 |
129620.17R000-082.042 | Property Condition Assessment | 1554 | 12/28/2017 |
129620.17R000-016.042 | Property Condition Assessment | 1565 | 01/12/2018 |
129620.17R000-024.042 | Property Condition Assessment | 1570 | 12/28/2017 |
129620.17R000-098.042 | Property Condition Assessment | 1595 | 12/28/2017 |
129620.17R000-031.042 | Property Condition Assessment | 1600 | 12/28/2017 |
129620.17R000-073.042 | Property Condition Assessment | 1605 | 12/28/2017 |
129620.17R000-079.042 | Property Condition Assessment | 1614 | 12/28/2017 |
129620.17R000-051.042 | Property Condition Assessment | 1634 | 12/28/2017 |
129620.17R000-035.042 | Property Condition Assessment | 1642 | 01/08/2018 |
129620.17R000-033.042 | Property Condition Assessment | 1650 | 12/27/2017 |
129620.17R000-030.042 | Property Condition Assessment | 1680 | 01/15/2018 |
129620.17R000-013.042 | Property Condition Assessment | 1685 | 01/12/2018 |
129620.17R000-062.042 | Property Condition Assessment | 1690 | 12/28/2017 |
129620.17R000-052.042 | Property Condition Assessment | 1700 | 12/28/2017 |
129620.17R000-091.042 | Property Condition Assessment | 1710 | 12/28/2017 |
129620.17R000-077.042 | Property Condition Assessment | 1712 | 01/08/2018 |
129620.17R000-085.042 | Property Condition Assessment | 1717 | 01/12/2018 |
129620.17R000-054.042 | Property Condition Assessment | 1720 | 12/28/2017 |
129620.17R000-036.042 | Property Condition Assessment | 1730 | 12/28/2017 |
129620.17R000-083.042 | Property Condition Assessment | 1734 | 12/28/2017 |
129620.17R000-049.042 | Property Condition Assessment | 1754 | 12/28/2017 |
129620.17R000-055.042 | Property Condition Assessment | 1760 | 12/27/2017 |
129620.17R000-080.042 | Property Condition Assessment | 1764 | 12/28/2017 |
129620.17R000-029.042 | Property Condition Assessment | 1780 | 01/09/2018 |
129620.17R000-034.042 | Property Condition Assessment | 1800 | 12/27/2017 |
EMG Project # | Service | Store # | Report Date |
129620.17R000-072.042 | Property Condition Assessment | 1805 | 12/28/2017 |
129620.17R000-023.042 | Property Condition Assessment | 1820 | 01/12/2018 |
129620.17R000-065.042 | Property Condition Assessment | 1822 | 12/28/2017 |
129620.17R000-005.042 | Property Condition Assessment | 1831 | 12/29/2017 |
129620.17R000-025.042 | Property Condition Assessment | 1840 | 12/28/2017 |
129620.17R000-050.042 | Property Condition Assessment | 1854 | 12/28/2017 |
129620.17R000-081.042 | Property Condition Assessment | 1874 | 01/08/2018 |
129620.17R000-093.042 | Property Condition Assessment | 2010 | 01/10/2018 |
129620.17R000-134.042 | Property Condition Assessment | 2029 | 12/28/2017 |
129620.17R000-056.042 | Property Condition Assessment | 2040 | 01/12/2018 |
129620.17R000-043.042 | Property Condition Assessment | 2087 | 01/11/2018 |
129620.17R000-026.042 | Property Condition Assessment | 2121 | 01/08/2018 |
129620.17R000-074.042 | Property Condition Assessment | 2175 | 01/08/2018 |
129620.17R000-060.042 | Property Condition Assessment | 2180 | 01/11/2018 |
129620.17R000-117.042 | Property Condition Assessment | 2197 | 01/12/2018 |
129620.17R000-086.042 | Property Condition Assessment | 2207 | 01/12/2018 |
129620.17R000-133.042 | Property Condition Assessment | 2219 | 12/28/2017 |
129620.17R000-120.042 | Property Condition Assessment | 2247 | 12/28/2017 |
129620.17R000-032.042 | Property Condition Assessment | 2290 | 01/15/2018 |
129620.17R000-099.042 | Property Condition Assessment | 2305 | 01/08/2018 |
129620.17R000-132.042 | Property Condition Assessment | 2309 | 12/28/2017 |
129620.17R000-028.042 | Property Condition Assessment | 2360 | 01/08/2018 |
129620.17R000-094.042 | Property Condition Assessment | 2390 | 01/09/2018 |
129620.17R000-020.042 | Property Condition Assessment | 2422 | 01/09/2018 |
129620.17R000-123.042 | Property Condition Assessment | 2497 | 01/09/2018 |
129620.17R000-076.042 | Property Condition Assessment | 2515 | 12/28/2017 |
129620.17R000-119.042 | Property Condition Assessment | 2547 | 01/12/2018 |
129620.17R000-106.042 | Property Condition Assessment | 2557 | 01/12/2018 |
129620.17R000-111.042 | Property Condition Assessment | 2587 | 01/13/2018 |
129620.17R000-041.042 | Property Condition Assessment | 2677 | 01/09/2018 |
129620.17R000-021.042 | Property Condition Assessment | 2760 | 01/12/2018 |
129620.17R000-001.042 | Property Condition Assessment | 2819 | 01/15/2018 |
129620.17R000-017.042 | Property Condition Assessment | 2845 | 01/12/2018 |
129620.17R000-097.042 | Property Condition Assessment | 2855 | 12/28/2017 |
129620.17R000-047.042 | Property Condition Assessment | 2934 | 01/12/2018 |
129620.17R000-135.042 | Property Condition Assessment | 4147 | 12/28/2017 |
129620.17R000-002.042 | Property Condition Assessment | 4371 | 12/28/2017 |
129620.17R000-087.042 | Property Condition Assessment | 4928 | 12/28/2017 |
129620.17R000-095.042 | Property Condition Assessment | 4937 | 01/09/2018 |
129620.17R000-071.042 | Property Condition Assessment | 7385 | 01/09/2018 |
129620.17R000-010.042 | Property Condition Assessment | 7979 | 01/13/2018 |
129620.17R000-011.042 | Property Condition Assessment | 8065 | 12/24/2017 |
129620.17R000-130.042 | Property Condition Assessment | 8147 | 01/13/2018 |
129620.17R000-101.042 | Property Condition Assessment | 8206 | 12/29/2017 |
129620.17R000-110.042 | Property Condition Assessment | 8217 | 01/08/2018 |
EMG Project # | Service | Store # | Report Date |
129620.17R000-061.042 | Property Condition Assessment | 8702 | 12/28/2017 |
129620.17R000-129.042 | Property Condition Assessment | 8717 | 01/08/2018 |
129620.17R000-012.042 | Property Condition Assessment | 8745 | 12/27/2017 |
129620.17R000-105.042 | Property Condition Assessment | 477 | 12/28/2017 |
129620.17R000-065.066 | Seismic Risk Analysis | 1822 | 12/28/2017 |
129620.17R000-131.316 | Seismic Risk Study | 1139 | 12/28/2017 |
129620.17R000-003.316 | Seismic Risk Study | 1228 | 12/28/2017 |
129620.17R000-133.316 | Seismic Risk Study | 2219 | 12/28/2017 |
129620.17R000-132.316 | Seismic Risk Study | 2309 | 12/28/2017 |
129620.17R000-001.316 | Seismic Risk Study | 2819 | 01/11/2018 |
129620.17R000-002.316 | Seismic Risk Study | 4371 | 12/28/2017 |
LENDER | COMMITMENT |
UBS AG, Stamford Branch | $200,000,000 |
AGGREGATE COMMITMENTS | $200,000,000 |
2. | Assignee[s]: ______________________________ |
3. | Borrowers: SRC O.P. LLC, a Delaware limited liability company, SRC Facilities LLC, |
4. | Administrative Agent: UBS AG, Stamford Branch, in its capacity as Administrative Agent under the Credit Agreement, together with its successors and assigns |
5. | Credit Agreement: The Credit Agreement dated as of March 14, 2018 among the Borrowers, the Lenders parties thereto, the Administrative Agent and UBS Securities LLC, as Lead Arranger and Bookrunner |
6. | Assigned Interest[s]: |
Assignor[s]5 | Assignee[s]6 | Aggregate Amount of Loans for all Lenders | Amount of Loans Assigned8 | Percentage Assigned of Loans7 |
$ | $ | % | ||
$ | $ | % | ||
$ | $ | % |
ARTICLE I | Page | ||
DEFINITIONS | 1 | ||
SECTION 1.01. | Defined Terms | 1 | |
SECTION 1.02. | Reserved | 20 | |
SECTION 1.03. | Terms Generally | 20 | |
SECTION 1.04. | Accounting Terms; GAAP; Pro Forma Calculations | 20 | |
SECTION 1.05. | Rounding | 21 | |
SECTION 1.06. | Times of Day | 21 | |
ARTICLE II | |||
THE LOAN | 21 | ||
SECTION 2.01. | Commitments | 21 | |
SECTION 2.02. | Loans | 21 | |
SECTION 2.03. | Request for Loans | 21 | |
SECTION 2.04. | Reserved | 21 | |
SECTION 2.05. | Reserved | 21 | |
SECTION 2.06. | Reserved | 22 | |
SECTION 2.07. | Reserved | 22 | |
SECTION 2.08. | Termination of Commitments. The Commitments shall terminate immediately upon funding the Loans on the Effective Date | 22 | |
SECTION 2.09. | Repayment of Loans; Evidence of Debt | 22 | |
SECTION 2.10. | Repayment of Loans | 23 | |
SECTION 2.11. | Fees | 24 | |
SECTION 2.12. | Interest | 24 | |
SECTION 2.13. | Illegality | 24 | |
SECTION 2.14. | Alternate Rate of Interest. If at any point: | 25 | |
SECTION 2.15. | Increased Costs | 26 | |
SECTION 2.16. | Break Funding Payments | 27 | |
SECTION 2.17. | Taxes | 27 | |
SECTION 2.18. | Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of Set-offs | 31 | |
SECTION 2.19. | Mitigation Obligations; Replacement of Lenders | 32 | |
SECTION 2.20. | Reserved | 33 | |
ARTICLE III | |||
REPRESENTATIONS AND WARRANTIES | 33 | ||
SECTION 3.01. | Organization; Powers; Single Purpose Entity; Subsidiaries | 33 | |
SECTION 3.02. | Authorization; Enforceability | 33 | |
SECTION 3.03. | Governmental Approvals; No Conflicts | 33 | |
SECTION 3.04. | Financial Condition; No Material Adverse Change | 34 | |
SECTION 3.05. | Properties; Title | 34 | |
SECTION 3.06. | Litigation, Environmental and Labor Matters | 34 | |
SECTION 3.07. | Compliance with Laws and Agreements | 35 |
Page | |||
SECTION 3.08. | Investment Company Status | 35 | |
SECTION 3.09. | Taxes | 35 | |
SECTION 3.10. | ERISA | 35 | |
SECTION 3.11. | Disclosure | 35 | |
SECTION 3.12. | Federal Reserve Regulations | 35 | |
SECTION 3.13. | Liens | 36 | |
SECTION 3.14. | Reserved | 36 | |
SECTION 3.15. | Reserved | 36 | |
SECTION 3.16. | Solvency | 36 | |
SECTION 3.17. | Reserved | 36 | |
SECTION 3.18. | Security Interest in Collateral | 36 | |
SECTION 3.19. | Reserved | 36 | |
SECTION 3.20. | OFAC | 36 | |
SECTION 3.21. | Patriot Act | 36 | |
SECTION 3.22. | Foreign Corrupt Practices Act; Anti-Corruption Laws | 36 | |
SECTION 3.23. | Tax Shelter Regulations | 37 | |
SECTION 3.24. | PPPFA | 37 | |
SECTION 3.25. | Broker’s Fees | 37 | |
SECTION 3.26. | Federal Income Tax Classification | 37 | |
SECTION 3.27. | Reserved | 37 | |
SECTION 3.28. | Reserved | 37 | |
SECTION 3.29. | Reserved | 38 | |
SECTION 3.30. | Reserved | 38 | |
SECTION 3.31. | Opinion Assumptions | 38 | |
SECTION 3.32. | Business Purpose | 38 | |
SECTION 3.33. | Reserved | 38 | |
SECTION 3.34. | Reserved | 38 | |
SECTION 3.35. | Filing, Recording and Other Taxes | 38 | |
SECTION 3.36. | Reserved | 38 | |
SECTION 3.37. | Reserved | 38 | |
SECTION 3.38. | Underwriting Representations | 38 | |
ARTICLE IV | |||
Reserved | 39 | ||
ARTICLE V | |||
Affirmative Covenants | 39 | ||
SECTION 5.01. | Financial Statements and Other Information | 39 | |
SECTION 5.02. | Notices of Material Events | 40 | |
SECTION 5.03. | Existence; Conduct of Business | 41 | |
SECTION 5.04. | Payment of Obligations | 42 | |
SECTION 5.05. | Maintenance of Properties; Defense of Title; Insurance; Further Assurances | 42 |
Page | |||
SECTION 5.06. | Books and Records; Inspection Rights | 43 | |
SECTION 5.07. | Compliance with Laws and Obligations | 43 | |
SECTION 5.08. | Use of Proceeds | 43 | |
SECTION 5.09. | Alterations | 43 | |
SECTION 5.10. | Handicapped Access | 44 | |
SECTION 5.11. | Additional Collateral; Environmental Matters; Further Assurances; Estoppels | 44 | |
SECTION 5.12. | Cooperation in Legal Proceedings | 45 | |
SECTION 5.13. | Master Lease | 45 | |
SECTION 5.14. | Taxes on Security | 45 | |
SECTION 5.15. | Interest Rate Protection | 45 | |
SECTION 5.16. | Single Purpose Entity | 45 | |
SECTION 5.17. | Post-Closing Matters | 45 | |
SECTION 5.18. | Ground Lease | 46 | |
SECTION 5.19. | REA | 46 | |
SECTION 5.20. | Title Policy | 46 | |
ARTICLE VI | |||
NEGATIVE COVENANTS | 46 | ||
SECTION 6.01. | Indebtedness; Swap Agreements.\ | 46 | |
SECTION 6.02. | Liens | 47 | |
SECTION 6.03. | Transfers | 47 | |
SECTION 6.04. | Investments | 47 | |
SECTION 6.05. | Reserved | 48 | |
SECTION 6.06. | Transactions with Affiliates | 48 | |
SECTION 6.07. | REA | 48 | |
SECTION 6.08. | Management Agreements | 48 | |
SECTION 6.09. | Organizational Documents | 48 | |
SECTION 6.10. | No Joint Assessment | 48 | |
SECTION 6.11. | No Plan Assets | 48 | |
SECTION 6.12. | Zoning | 48 | |
SECTION 6.13. | Use of Properties | 48 | |
SECTION 6.14. | Accounting Changes; Fiscal Year | 49 | |
SECTION 6.15. | Ground Lease | 49 | |
SECTION 6.16. | PPPFA | 49 | |
SECTION 6.17. | No Dividends | 49 | |
ARTICLE VII | |||
EVENTS OF DEFAULT | 49 | ||
SECTION 7.01. | Events of Default | 49 |
Page | |||
ARTICLE VIII | |||
THE ADMINISTRATIVE AGENT | 53 | ||
SECTION 8.01. | Appointment of Agency | 53 | |
SECTION 8.02. | Rights and Powers of Administrative Agent | 53 | |
SECTION 8.03. | Resignation and Replacement | 54 | |
SECTION 8.04. | No Joint Venture, Etc | 55 | |
SECTION 8.05. | Agent as Representative, Etc | 55 | |
ARTICLE IX | |||
MISCELLANEOUS | 57 | ||
SECTION 9.01. | Notices; Effectiveness; Electronic Communication | 57 | |
SECTION 9.02. | Waivers; Amendments | 59 | |
SECTION 9.03. | Expenses; Indemnity; Damage Waiver.\ | 61 | |
SECTION 9.04. | Successors and Assigns | 62 | |
SECTION 9.05. | Survival | 65 | |
SECTION 9.06. | Counterparts; Integration; Effectiveness | 65 | |
SECTION 9.07. | Severability | 66 | |
SECTION 9.08. | Reserved | 66 | |
SECTION 9.09. | Governing Law; Jurisdiction; Consent to Service of Process | 67 | |
SECTION 9.10. | WAIVER OF JURY TRIAL | 67 | |
SECTION 9.11. | Headings | 67 | |
SECTION 9.12. | Confidentiality | 67 | |
SECTION 9.13. | USA Patriot Act | 68 | |
SECTION 9.14. | Exculpation | 68 | |
SECTION 9.15. | Acknowledgement and Consent to Bail-In of EEA Financial Institutions | 72 | |
SECTION 9.16. | Interest Rate Limitation | 72 | |
SECTION 9.17. | No Advisory or Fiduciary Responsibility | 72 | |
SECTION 9.18. | Independent Effect of Covenants | 73 | |
SECTION 9.19. | Inconsistencies with Other Documents | 73 | |
SECTION 9.20. | Reserved | 73 | |
SECTION 9.21. | Publicity | 73 | |
SECTION 9.22. | Mortgage Loan | 73 |
Store Number | Address | City | County | State | |
1 | 2819 | 3115 Airport Way | Fairbanks | Fairbanks North Star Borough | AK |
2 | 1228 | 1601 Arden Way | Arden | Sacramento | CA |
3 | 4371 | 2875 Santa Maria Way | Santa Maria | Santa Barbara | CA |
4 | 1141 | 14200 E. Alameda Avenue | Aurora | Arapahoe | CO |
5 | 1221 | 1650 Briargate Blvd | Colorado Springs | El Paso | CO |
6 | 1281 | 3201 Dillon Dr | Pueblo | Pueblo | CO |
7 | 1831 | 16395 Washington Street | Thornton | Adams | CO |
8 | 1043 | 470 Lewis Ave | Meriden | New Haven | CT |
9 | 1263 | 425 Union St | Waterbury | New Haven | CT |
10 | 7979 | 3555 St. Johns Bluff Road South | Jacksonville | Duval | FL |
11 | 8065 | 3301 NW 107th Ave | Doral | Miami-Dade | FL |
12 | 1035 | 3450 Wrightsboro Road | Augusta | Richmond | GA |
13 | 1095 | 6580 Douglas Blvd | Douglasville | Douglas | GA |
14 | 1155 | 400 Ernest W Barrett Pkwy Nw | Kennesaw | Cobb | GA |
15 | 1565 | 1300 Southlake Mall | Morrow(Southlake) | Clayton | GA |
16 | 1685 | 2100 Pleasant Hill Road | Duluth | Gwinnett | GA |
17 | 2845 | 3700 Atlanta Highway | Athens | Clarke | GA |
18 | 8745 | 4650, 4616 & 4740 Hugh Howell Road; 2301 Mountain Industrial Boulevard | Tucker | DeKalb | GA |
19 | 1012 | 4000 Merle Hay Road** | Des Moines | Polk | IA |
20 | 2422 | 4480 Sergeant Road | Sioux City | Woodbury | IA |
21 | 2760 | 320 W Kimberly Road | Davenport | Scott | IA |
22 | 1172 | 5 Stratford Square | Bloomingdale | Dupage | IL |
23 | 1321 | 2200 W War Memorial Dr Ste 998 | Peoria | Peoria | IL |
24 | 1570 | 2 Woodfield Mall | Schaumburg | Cook | IL |
25 | 1780 | 104 White Oaks Mall | Springfield | Sangamon | IL |
26 | 1820 | 5000 Spring Hill Mall | West Dundee | Kane | IL |
27 | 1840 | 6501 95Th Street | Chicago Ridge | Cook | IL |
28 | 2121 | 1607 36Th Street | Peru | La Salle | IL |
29 | 2360 | 3400 Quincy Mall | Quincy | Adams | IL |
30 | 1600 | 6020 E 82Nd St | Indianapolis | Marion | IN |
31 | 1650 | 2300 Southlake Mall | Merrillville | Lake | IN |
32 | 1680 | 10202 E Washington Street | Indianapolis | Marion | IN |
33 | 1800 | 6501 Grape Road | Mishawaka | St. Joseph | IN |
34 | 2290 | 3901 Franklin Street | Michigan City | Laporte | IN |
35 | 1642 | 1781 SW Wanamaker Road | Topeka | Shawnee | KS |
36 | 1730 | 3000 Mall Road | Florence | Boone | KY |
37 | 1077 | 3601 Southern Ave | Shreveport | Caddo Parish | LA |
38 | 1086 | 9001 Cortana Place | Baton Rouge | East Baton Rouge Parish | LA |
39 | 1116 | 4800 Millhaven Road | Monroe | Ouachita Parish | LA |
40 | 1147 | 6501 Blubonnet Boulevard | Baton Rouge | East Baton Rouge Parish | LA |
Store Number | Address | City | County | State | |
41 | 1226 | 4400 Veterans Memorial Boulevard | Metairie | Jefferson Parish | LA |
42 | 2087 | 3401 Masonic Dr | Alexandria | Rapides Parish | LA |
43 | 2677 | 2950 E. Texas Street | Bossier City | Bossier Parish | LA |
44 | 1033 | 1009 South Washington Street | North Attleboro | Bristol | MA |
45 | 1104 | 521 Donald Lynch Blvd | Marlborough | Middlesex and Worcester | MA |
46 | 1223 | 200 Westgate Dr | Brockton-Westgate | Plymouth | MA |
47 | 2934 | 8 Galleria Mall Drive | Taunton | Bristol | MA |
48 | 1074 | 11170 Mall Circle | Waldorf | Charles | MD |
49 | 1634 | 6901 Security Blvd | Baltimore | Baltimore | MD |
50 | 1754 | 701 Russell Ave | Gaithersburg | Montgomery | MD |
51 | 1854 | 8200 Perry Hall | Nottingham | Baltimore | MD |
52 | 1011 | 3622 Rivertown Pkwy Sw | Grandville | Kent | MI |
53 | 1092 | 35000 Warren Road ** | Westland | Wayne | MI |
54 | 1110 | 6780 S Westnedge Ave | Portage | Kalamazoo | MI |
55 | 1192 | 5500 Harvey St | Muskegon | Muskegon | MI |
56 | 1700 | 18900 Michigan Ave | Dearborn | Wayne | MI |
57 | 1720 | 14100 Lakeside Circle | Sterling Hts | Macomb | MI |
58 | 1760 | 27600 Novi Road | Novi | Oakland | MI |
59 | 2040 | 5575 B Drive N | Battle Creek | Calhoun | MI |
60 | 2180 | 1212 S Airport Road W | Traverse City | Grand Traverse | MI |
61 | 9693 | Shortcut Road | Marine City | St Clair | MI |
62 | 8702 | 2700 Winter St Ne | Minneapolis | Hennepin | MN |
63 | 1042 | 101 N Rangeline Road | Joplin | Jasper | MO |
64 | 1171 | 2825 S Glenstone Ave, Suite 500 | Springfield | Greene | MO |
65 | 1182 | 3 Mid Rivers Mall Dr | St. Peters | St. Charles | MO |
66 | 1222 | 250 S County Center Way | St. Louis | St. Louis County | MO |
67 | 1690 | 1 Chesterfield Mall | Chesterfield | St. Louis | MO |
68 | 1822 | 330 Siemers Drive | Cape Girardeau | Cape Girardeau County | MO |
69 | 1166 | 1740 Bonita Lakes Circle | Meridian | Lauderdale | MS |
70 | 1306 | 1000 Turtle Creek Dr | Hattiesburg | Lamar | MS |
71 | 1165 | 1480 Concord Parkway | Concord | Cabarrus | NC |
72 | 1375 | 3320 Silas Creek Pkwy | Winston Salem | Forsyth | NC |
73 | 1605 | 7330 Old Wake Forest Road | Raleigh | Wake | NC |
74 | 1805 | 4601 Glenwood Ave Unit 1 | Raleigh | Wake | NC |
75 | 2175 | 3600 S. Memorial Drive | Greenville | Pitt | NC |
76 | 2515 | 1940 US Highway 70 SE | Hickory | Catawba | NC |
77 | 7385 | 819 E Six Forks Road | Raleigh | Wake | NC |
78 | 1712 | 2800 S Columbia Road | Grand Forks | Grand Forks | ND |
79 | 1022 | 3420 Oak View Drive | Oakview | Douglas | NE |
80 | 1314 | 51 Us Hwy #1 | New Brunswick | Middlesex | NJ |
81 | 1554 | 4409 Black Horse Pike | Mays Landing | Atlantic | NJ |
82 | 1614 | 112 Eisenhower Pkwy Ste 2A | Livingston | Essex | NJ |
83 | 1734 | 300 Quaker Bridge Mall | Lawrenceville | Mercer | NJ |
84 | 1764 | Route 80 & Mt. Hope Avenue | Rockaway | Morris | NJ |
85 | 1874 | 2501 Mt Holly Road | Burlington | Burlington | NJ |
86 | 1717 | 10000 Coors Bypass Nw | Albuquerque | Bernalillo | NM |
Store Number | Address | City | County | State | |
87 | 2207 | 1000 S Main St | Roswell | Chaves | NM |
88 | 1504 | 4475 Transit Road | Clarence | Erie | NY |
89 | 4928 | 308 Dix Avenue | Queensberry | Warren | NY |
90 | 1051 | 17271 Southpark Ctr | Strongsville | Cuyahoga | OH |
91 | 1120 | 5053 Tuttle Crossing Blvd | Columbus | Franklin | OH |
92 | 1210 | 1400 Polaris Parkway | Columbus | Delaware | OH |
93 | 1710 | 5000 Great Northern Mall | North Olmsted | Cuyahoga | OH |
94 | 2010 | 600 Richland Mall | Mansfield | Richland | OH |
95 | 2390 | 1475 Upper Valley Pike | Springfield | Clark | OH |
96 | 4937 | 1470 North Bridge Street | Chillicothe | Ross | OH |
97 | 1545 | 205 W. Blackstock Road | Spartanburg | Spartanburg | SC |
98 | 1595 | 700 Haywood Road | Greenville | Greenville | SC |
99 | 2305 | 3101 N. Main Street | Anderson | Anderson | SC |
100 | 2855 | 2068 Sam Rittenberg Boulevard | Charleston | Charleston | SC |
101 | 1315 | 401 Northgate Mall | Chattanooga | Hamilton | TN |
102 | 8206 | 640 Thompson Lane | Nashville | Davidson | TN |
103 | 447 | 3, 1501 & 1602 Kings Road; 2850 & 3150 Marquis Drive | Garland | Dallas | TX |
104 | 1027 | 750 Sunland Park Drive | El Paso | El Paso | TX |
105 | 1076 | 2401 S Stemmons Fwy | Lewisville | Denton | TX |
106 | 1176 | 999 Pasadena Blvd | Pasadena | Harris | TX |
107 | 1187 | 3000 Town East Mall | Mesquite | Dallas | TX |
108 | 1217 | 1305 Airline Road | Corpus Christi | Nueces | TX |
109 | 1267 | 1800 Green Oaks Road | Fort Worth | Tarrant | TX |
110 | 1297 | 1101 Melbourne Road | Hurst | Tarrant | TX |
111 | 1307 | 4310 Buffalo Gap Road | Abilene | Taylor | TX |
112 | 1317 | 8401 Gateway Blvd W | El Paso | El Paso | TX |
113 | 1327 | 1000 San Jacinto Mall | Baytown | Harris | TX |
114 | 1337 | 851 N Central Expwy | Plano | Collin | TX |
115 | 1367 | 6001 W Waco Dr | Waco | Mclennan | TX |
116 | 1377 | 7925 Fm 1960 Road W | Houston | Harris | TX |
117 | 1387 | 7701 Interstate Highway 40 W | Amarillo | Potter | TX |
118 | 1407 | 6461 Eastex Fwy | Beaumont | Jefferson | TX |
119 | 1417 | 20131 Highway 59 N | Humble | Harris | TX |
120 | 1427 | 6909 N Loop 1604 E | San Antonio | Bexar | TX |
121 | 1447 | 4900 S. Hulen Street | Hulen | Tarrant | TX |
122 | 1487 | 12701 Ridgeline Boulevard | Austin | Williamson | TX |
123 | 2197 | 10000 Emmett F Lowry Expy | Texas City | Galveston | TX |
124 | 2247 | 5300 San Dario Avenue | Laredo | Webb | TX |
125 | 2497 | 2320 N Expressway | Brownsville | Cameron | TX |
126 | 2547 | 1502 Harvey Road | College Station | Brazos | TX |
127 | 2557 | 3510 McCann Road | Longview | Gregg | TX |
128 | 2587 | 2201 S. Interstate 35 E | Denton | Denton | TX |
129 | 8147 | 7353 NW Loop 410 | San Antonio | Bexar | TX |
130 | 8217 | 5001 N. Beach Street | Fort Worth | Tarrant | TX |
131 | 8717 | 5901 Griggs Road | Houston | Harris | TX |
132 | 1029 | 4700 N Division St | Spokane | Spokane | WA |
133 | 1038 | 14720 E Indiana Ave | Spokane Valley | Spokane | WA |
Store Number | Address | City | County | State | |
134 | 1139 | 301 Southcenter Mall | Tukwila | King | WA |
135 | 2029 | 9 E Valley Mall Blvd ** | Union Gap | Yakima | WA |
136 | 2219 | 651 Sleater Kinney Road | Lacey/Olympia | Thurston | WA |
137 | 2309 | 10315 Silverdale Way Nw, Suite C | Silverdale | Kitsap | WA |
138 | 4147 | 4110 E Sprague Avenue | Spokane | Spokane | WA |
LENDER | COMMITMENT | ||
JPP, LLC | $228,000,000 | ||
JPP II, LLC | $12,000,000 | ||
AGGREGATE COMMITMENTS | $240,000,000 |
2. | Assignee[s]: ______________________________ |
3. | Borrowers: [BORROWER], a Delaware limited liability company |
4. | Administrative Agent: [ADMINISTRATIVE AGENT, in its capacity as Administrative Agent under the Credit Agreement, together with its successors and assigns |
5. | Credit Agreement: The Credit Agreement dated as of March 14, 2018 among the Borrower, the Lenders parties thereto and the Administrative Agent |
6. | Assigned Interest[s]: |
Assignor[s]5 | Assignee[s]6 | Aggregate Amount of Loans for all Lenders | Amount of Loans Assigned8 | Percentage Assigned of Loans7 |
$ | $ | % | ||
$ | $ | % | ||
$ | $ | % |
Year Ended | ||||||||||||||||||||
(millions, except ratios) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Fixed Charges | ||||||||||||||||||||
Interest and amortization of debt discount and expense on all indebtedness | $511 | $377 | $289 | $276 | $214 | |||||||||||||||
Add interest element implicit in rentals | 223 | 249 | 240 | 241 | 259 | |||||||||||||||
734 | 626 | 529 | 517 | 473 | ||||||||||||||||
Interest capitalized | 1 | — | 2 | 2 | 2 | |||||||||||||||
Total fixed charges | $735 | $626 | $531 | $519 | $475 | |||||||||||||||
Income | ||||||||||||||||||||
Income before income taxes, noncontrolling interest, and extraordinary loss | ($981 | ) | ($2,395 | ) | ($1,385 | ) | ($1,685 | ) | ($972 | ) | ||||||||||
Deduct undistributed net income of unconsolidated companies | — | — | — | 37 | 185 | |||||||||||||||
(981 | ) | (2,395 | ) | (1,385 | ) | (1,722 | ) | (1,157 | ) | |||||||||||
Add | ||||||||||||||||||||
Fixed charges (excluding interest capitalized) | 734 | 626 | 529 | 517 | 473 | |||||||||||||||
Income before fixed charges and income taxes | ($247 | ) | ($1,769 | ) | ($856 | ) | ($1,205 | ) | ($684 | ) | ||||||||||
Ratio of income to fixed charges | (0.34 | ) | (2.83 | ) | (1.61 | ) | (2.32 | ) | (1.44 | ) |
Names | State or Other Jurisdiction of Organization | ||||||
Consolidated Subsidiaries: | |||||||
Kmart Holding Corporation* | Delaware | ||||||
Kmart Corporation* | Michigan | ||||||
KBL Holding Inc. | Delaware | ||||||
BlueLight.com, Inc. | Delaware | ||||||
Kmart.com LLC* | Delaware | ||||||
KLC, Inc.* | Texas | ||||||
Kmart of Michigan, Inc.* | Michigan | ||||||
Kmart of Washington LLC* | Washington | ||||||
Kmart Overseas Corporation | Nevada | ||||||
Sears Holdings Global Sourcing Limited | Hong Kong | ||||||
Kmart Stores of Illinois LLC* | Illinois | ||||||
Kmart Stores of Texas LLC* | Texas | ||||||
MyGofer LLC* | Delaware | ||||||
Kmart Operations LLC* | Delaware | ||||||
Sears Operations LLC* | Delaware | ||||||
Sears, Roebuck and Co.* | New York | ||||||
A&E Factory Service, LLC* | Delaware | ||||||
A&E Home Delivery, LLC* | Delaware | ||||||
A&E Lawn & Garden, LLC* | Delaware | ||||||
A&E Signature Service, LLC* | Delaware | ||||||
FBA Holdings Inc. | Delaware | ||||||
California Builder Appliances, Inc.* | Delaware | ||||||
Florida Builder Appliances, Inc.* | Delaware | ||||||
SOE, Inc.* | Delaware | ||||||
StarWest, LLC* | Delaware | ||||||
Innovel Solutions, Inc. | Delaware | ||||||
Private Brands, Ltd.* | Delaware | ||||||
Sears Financial Holding Corporation | Delaware | ||||||
Sears Holdings Management Corporation*1 | Delaware | ||||||
Sears Brands Business Unit Corporation | Illinois | ||||||
Sears Brands, L.L.C. | Illinois | ||||||
KCD IP, LLC2 | Delaware | ||||||
Sears Buying Services, Inc. | Delaware | ||||||
Sears Brands Management Corporation* | Delaware | ||||||
Sears Home Improvement Products, Inc.* | Pennsylvania | ||||||
Sears Insurance Services, L.L.C. | Illinois |
Names | State or Other Jurisdiction of Organization | ||||||
Sears International Holdings Corp. | Delaware | ||||||
Sears Canada Holdings Corp. | Delaware | ||||||
Sears Protection Company* | Illinois | ||||||
Sears Protection Company (Florida), L.L.C.* | Florida | ||||||
Sears Roebuck Acceptance Corp.* | Delaware | ||||||
Sears, Roebuck de Puerto Rico, Inc.* | Delaware | ||||||
SRC Depositor Corporation3 | Delaware | ||||||
SRC O.P. Corporation3 | Delaware | ||||||
SRC Facilities Statutory Trust No. 2003-A3 | Delaware | ||||||
SRC Real Estate Holdings (TX), LLC3 | Delaware | ||||||
SRe Holding Corporation | Delaware | ||||||
Sears Reinsurance Company Ltd. | Bermuda |
* | Loan party under the Registrant's Third Amended and Restated Credit Agreement, dated as of July 21, 2015. |
1 | Shares are owned by Sears, Roebuck and Co. and Kmart Holding Corporation. |
2 | Bankruptcy remote, special purpose entity that owns the U.S. rights to the Kenmore, Craftsman and DieHard trademarks and issuer of intercompany securities backed by such trademark rights. |
3 | REMIC-related subsidiary. |
1. | I have reviewed this annual report on Form 10-K of Sears Holdings Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this annual report on Form 10-K of Sears Holdings Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Edward S. Lampert |
Edward S. Lampert |
Chairman of the Board and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Robert A. Riecker |
Robert A. Riecker |
Chief Financial Officer |
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$ in Millions12 Months Ended
Document and Entity Information [Abstract]
Entity Registrant Name
SEARS HOLDINGS CORP
Entity Central Index Key
0001310067
Current Fiscal Year End Date
--02-03
Entity Filer Category
Accelerated Filer
Document Type
10-K
Document Period End Date
Feb. 03, 2018
Document Fiscal Year Focus
2017
Document Fiscal Period Focus
FY
Amendment Flag
false
Trading Symbol
SHLD
Entity Common Stock, Shares Outstanding
107,957,410
Entity Well-known Seasoned Issuer
No
Entity Voluntary Filers
No
Entity Current Reporting Status
Yes
Entity Public Float
$ 200
shares in Millions, $ in Millions3 Months Ended
12 Months Ended
REVENUES
Merchandise sales
$ 13,409
$ 18,236
$ 20,936
Services and other
[1],[2]
3,293
3,902
4,210
Total revenues
$ 4,376
$ 3,660
$ 4,365
$ 4,301
$ 6,052
$ 5,029
$ 5,663
$ 5,394
16,702
22,138
25,146
COSTS AND EXPENSES
Cost of sales, buying and occupancy - merchandise sales
[3]
11,349
15,184
16,817
Cost of sales and occupancy - services and other
[1]
1,826
2,268
2,519
Total cost of sales, buying and occupancy
3,452
2,958
3,394
3,371
4,765
4,067
4,403
4,217
13,175
17,452
19,336
Selling and administrative
1,156
1,339
1,369
1,267
1,579
1,543
1,484
1,503
5,131
6,109
6,857
Depreciation and amortization
332
375
422
Impairment charges
142
427
274
Gain on sales of assets
(1,648)
(247)
(743)
Total costs and expenses
17,132
24,116
26,146
Operating income (loss)
(430)
(1,978)
(1,000)
Interest expense
(539)
(404)
(323)
Interest and investment loss
(12)
(26)
(62)
Other income
0
13
0
Loss before income taxes
(981)
(2,395)
(1,385)
Income tax benefit
598
174
257
Net loss
(383)
(2,221)
(1,128)
Income attributable to noncontrolling interests
0
0
(1)
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
$ 182
$ (558)
$ (251)
$ 244
$ (607)
$ (748)
$ (395)
$ (471)
$ (383)
$ (2,221)
$ (1,129)
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
Basic loss per share (in USD per share)
$ 1.69
$ (5.19)
$ (2.34)
$ 2.28
$ (5.67)
$ (6.99)
$ (3.70)
$ (4.41)
$ (3.57)
$ (20.78)
$ (10.59)
Diluted loss per share (in USD per share)
$ 1.69
$ (5.19)
$ (2.34)
$ 2.28
$ (5.67)
$ (6.99)
$ (3.70)
$ (4.41)
$ (3.57)
$ (20.78)
$ (10.59)
Basic weighted average common shares outstanding (in shares)
107.4
106.9
106.6
Diluted weighted average common shares outstanding (in shares)
107.4
106.9
106.6
[1]
Includes merchandise sales to Sears Hometown and Outlet Stores, Inc. ("SHO") of $918 million, $1.1 billion and $1.3 billion in 2017, 2016 and 2015, respectively. Pursuant to the terms of the separation, merchandise is sold to SHO at cost.
[2]
Includes revenue from Lands' End, Inc. ("Lands' End") for retail services and rent for Lands' End Shops at Sears, participation in the Shop Your Way program and corporate shared services of $47 million, $52 million and $59 million in 2017, 2016 and 2015, respectively.
[3]
Includes rent expense (consisting of straight-line rent expense offset by amortization of a deferred gain on sale-leaseback) of $70 million, $83 million and $49 million in 2017, 2016, and 2015, respectively, and installment expenses of $43 million, $64 million and $40 million in 2017, 2016 and 2015, respectively, pursuant to the master lease with Seritage Growth Properties ("Seritage").
$ in Millions12 Months Ended
Rent expense, net of amortization of deferred gain on sale-leaseback
$ 82
$ 96
$ 68
Sears Hometown and Outlet Stores, Inc.
Proceeds from sale of inventory to affiliate
918
1,100
1,300
Lands' End, Inc.
Revenue from related parties
47
52
59
Seritage Growth Properties
Rent expense, net of amortization of deferred gain on sale-leaseback
70
83
49
Installment expense
$ 43
$ 64
$ 40
$ in Millions12 Months Ended
Statement of Comprehensive Income [Abstract]
Net loss
$ (383)
$ (2,221)
$ (1,128)
Other comprehensive income (loss)
Pension and postretirement adjustments, net of tax
478
366
113
Currency translation adjustments, net of tax
2
0
(1)
Dissolution of noncontrolling interest
0
(7)
0
Total other comprehensive income
480
359
112
Comprehensive income (loss)
97
(1,862)
(1,016)
Comprehensive (income) loss attributable to noncontrolling interests
0
7
(1)
Comprehensive income (loss) attributable to Holdings' shareholders
$ 97
$ (1,855)
$ (1,017)
Current assets
Cash and cash equivalents
$ 182,000,000
$ 286,000,000
Restricted cash
154,000,000
0
Accounts receivable
[1]
343,000,000
466,000,000
Merchandise inventories
2,798,000,000
3,959,000,000
Prepaid expenses and other current assets
[2]
335,000,000
285,000,000
Total current assets
3,812,000,000
4,996,000,000
Property and equipment
Land
659,000,000
770,000,000
Buildings and improvements
2,432,000,000
2,954,000,000
Furniture, fixtures and equipment
868,000,000
1,133,000,000
Capital leases
151,000,000
224,000,000
Gross property and equipment
4,110,000,000
5,081,000,000
Less accumulated depreciation and amortization
(2,381,000,000)
(2,841,000,000)
Total property and equipment, net
1,729,000,000
2,240,000,000
Goodwill
269,000,000
269,000,000
Trade names and other intangible assets
1,168,000,000
1,521,000,000
Other assets
284,000,000
336,000,000
TOTAL ASSETS
7,262,000,000
9,362,000,000
Current liabilities
Short-term borrowings
[3]
915,000,000
0
Current portion of long-term debt and capitalized lease obligations
[4]
968,000,000
590,000,000
Merchandise payables
576,000,000
1,048,000,000
Other current liabilities
[5]
1,568,000,000
1,956,000,000
Unearned revenues
641,000,000
748,000,000
Other taxes
247,000,000
339,000,000
Total current liabilities
4,915,000,000
4,681,000,000
Long-term debt and capitalized lease obligations
[6]
2,249,000,000
3,573,000,000
Pension and postretirement benefits
1,619,000,000
1,750,000,000
Deferred gain on sale-leaseback
362,000,000
563,000,000
Sale-leaseback financing obligation
247,000,000
235,000,000
Other long-term liabilities
1,467,000,000
1,641,000,000
Long-term deferred tax liabilities
126,000,000
743,000,000
Total Liabilities
10,985,000,000
13,186,000,000
Commitments and contingencies
DEFICIT
Preferred stock, 20 shares authorized; no shares outstanding
0
0
Common stock $0.01 par value; 500 shares authorized; 108 and 107 shares outstanding, respectively
1,000,000
1,000,000
Treasury stock—at cost
(5,820,000,000)
(5,891,000,000)
Capital in excess of par value
9,063,000,000
9,130,000,000
Retained deficit
(5,895,000,000)
(5,512,000,000)
Accumulated other comprehensive loss
(1,072,000,000)
(1,552,000,000)
Total Deficit
(3,723,000,000)
(3,824,000,000)
TOTAL LIABILITIES AND DEFICIT
$ 7,262,000,000
$ 9,362,000,000
[1]
Includes $28 million and $81 million at February 3, 2018 and January 28, 2017, respectively, of net amounts receivable from SHO, $1 million and $14 million of amounts receivable from Seritage at February 3, 2018 and January 28, 2017, respectively, and $1 million of net amounts receivable from Lands' End at February 3, 2018.
[2]
Includes $6 million of prepaid rent to Seritage at February 3, 2018.
[3]
Includes balances held by related parties of $645 million at February 3, 2018 related to our Line of Credit Loans and Incremental Loans (each as defined in Note 3). See Notes 3 and 15 for further information.
[4]
Includes balances held by related parties of $146 million and $216 million at February 3, 2018 and January 28, 2017, respectively, related to our 2016 Secured Loan Facility for both periods and also related to our Senior Secured Notes at February 3, 2018. See Note 3 for defined terms.
[5]
Includes $1 million of net amounts payable to Lands' End and $11 million of amounts payable to Seritage at January 28, 2017.
[6]
Includes balances held by related parties of $1.5 billion and $1.7 billion at February 3, 2018 and January 28, 2017, respectively, related to our Subsidiary Notes, Senior Unsecured Notes, Second Lien Term Loan, 2016 Term Loan and 2017 Secured Loan Facility for both periods and also related to our Term Loan Facility at February 3, 2018 and our Senior Secured Notes at January 28, 2017. See Note 3 for defined terms and Notes 3 and 15 for further information.
$ in Millions
Prepaid expenses and other current assets
[1]
$ 335
$ 285
Long-term debt and capitalized lease obligations
[2]
$ 2,249
$ 3,573
Preferred stock, shares authorized
20,000,000
20,000,000
Preferred stock, shares outstanding
0
0
Common stock, par value (in dollars per share)
$ 0.01
$ 0.01
Common stock, shares authorized
500,000,000
500,000,000
Common stock, shares, outstanding
108,000,000
107,000,000
Sears Hometown and Outlet Stores, Inc.
Due from affiliate
$ 28
$ 81
Seritage Growth Properties
Due from affiliate
1
14
Due to related parties
[3]
11
Seritage Growth Properties | Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets
6
Lands' End, Inc.
Due from affiliate
[3]
1
Due to related parties
1
Affiliated Entity
Long-term debt and capitalized lease obligations
1,500
1,700
Affiliated Entity | Line of Credit Loans and Incremental Loans
Principal amount of debt
645
Affiliated Entity | Secured Loan Facility | Loan Facility, Maturity July 2017
Principal amount of debt
$ 146
$ 216
[1]
Includes $6 million of prepaid rent to Seritage at February 3, 2018.
[2]
Includes balances held by related parties of $1.5 billion and $1.7 billion at February 3, 2018 and January 28, 2017, respectively, related to our Subsidiary Notes, Senior Unsecured Notes, Second Lien Term Loan, 2016 Term Loan and 2017 Secured Loan Facility for both periods and also related to our Term Loan Facility at February 3, 2018 and our Senior Secured Notes at January 28, 2017. See Note 3 for defined terms and Notes 3 and 15 for further information.
[3]
Includes $28 million and $81 million at February 3, 2018 and January 28, 2017, respectively, of net amounts receivable from SHO, $1 million and $14 million of amounts receivable from Seritage at February 3, 2018 and January 28, 2017, respectively, and $1 million of net amounts receivable from Lands' End at February 3, 2018.
$ in Millions12 Months Ended
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$ (383)
$ (2,221)
$ (1,128)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred tax valuation allowance
(1,395)
836
217
Tax benefit resulting from Other Comprehensive Income allocation
0
(71)
0
Depreciation and amortization
332
375
422
Impairment charges
142
427
274
Gain on sales of assets
(1,648)
(247)
(743)
Pension and postretirement plan contributions
(312)
(334)
(311)
Pension plan settlements
479
0
0
Mark-to-market adjustments of financial instruments
17
15
66
Amortization of deferred gain on sale-leaseback
(78)
(88)
(52)
Amortization of debt issuance costs and accretion of debt discount
124
81
60
Other
(36)
0
0
Change in operating assets and liabilities (net of acquisitions and dispositions):
Deferred income taxes
778
(987)
(519)
Merchandise inventories
1,144
1,213
(229)
Merchandise payables
(472)
(526)
(47)
Income and other taxes
(108)
80
(95)
Other operating assets
51
(52)
54
Other operating liabilities
(477)
118
(136)
Net cash used in operating activities
(1,842)
(1,381)
(2,167)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of property and investments
[1]
1,109
386
2,730
Proceeds from Craftsman Sale
572
0
0
Proceeds from sales of receivables
[2]
293
0
0
Purchases of property and equipment
(80)
(142)
(211)
Net cash provided by investing activities
1,894
244
2,519
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt issuances
[3]
1,020
2,028
0
Repayments of debt
[4]
(1,356)
(66)
(1,405)
Increase (decrease) in short-term borrowings, primarily 90 days or less
271
(797)
583
Proceeds from sale-leaseback financing
[1]
106
71
508
Debt issuance costs(5)
[5]
(43)
(51)
(50)
Net cash provided by (used in) financing activities
(2)
1,185
(364)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
50
48
(12)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR
286
238
250
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR
336
286
238
SUPPLEMENTAL INFORMATION:
Capital lease obligation incurred
0
25
6
Supplemental Cash Flow Data:
Income taxes paid, net of refunds
37
23
45
Cash interest paid
[6]
412
275
252
Unpaid liability to acquire equipment and software
$ 10
$ 18
$ 27
[1]
Holdings received cash proceeds of $2.7 billion ($2.6 billion, net of closing costs) from the Seritage transaction (including $745 million and $297 million, respectively, received from ESL Investments, Inc. and its affiliates ("ESL") and Fairholme Capital Management, LLC and its affiliates ("Fairholme")), and $429 million ($426 million, net of closing costs) from the JV transactions. Proceeds from the Seritage transaction are included in proceeds from sales of property and investments ($2.6 billion), and proceeds from sale-leaseback financing ($82 million) for 2015. Proceeds from the JV transactions are included in proceeds from sale-leaseback financing ($426 million) for 2015. See Note 11 for further information and defined terms.
[2]
Proceeds in 2017 include $63 million from JPP, LLC and JPP II, LLC, entities affiliated with ESL (as defined in Note 1), for the sale of receivables.
[3]
Proceeds in 2017 and 2016, respectively, include amounts from related parties of $876 million in connection with the Term Loan Facility, Line of Credit Loans and Incremental Loans and $1.3 billion received from the 2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan and Second Lien Term Loan. See Notes 3 and 15 for further information and defined terms.
[4]
Repayments in 2017 and 2015, respectively, include $345 million to related parties in connection with the 2017 Secured Loan Facility, 2016 Secured Loan Facility, Incremental Loans, 2016 Term Loan and Line of Credit Loans and $400 million of the Secured Short-Term Loan with related parties and $482 million of Senior Secured Notes tendered by related parties, respectively. See Notes 3 and 15 for further information and defined terms.
[5]
Includes one-time extension fees equal to $5 million to JPP, LLC and JPP II, LLC, entities affiliated with ESL during 2017. See Note 3 for further information.
[6]
Cash interest paid includes $180 million, $94 million and $83 million interest paid to related parties related to our borrowings in 2017, 2016 and 2015, respectively. See Notes 3 and 15 for further information.
$ in Millions12 Months Ended
Proceeds from sale-leaseback financing
[1]
$ 106
$ 71
$ 508
Proceeds from sales of receivables
[2]
293
0
0
Proceeds from debt issuances
[3]
1,020
2,028
0
Cash interest paid
[4]
412
275
252
Short-term Debt
Proceeds from debt issuances
876
1,300
2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan, Incremental Loans, and Line of Credit Loans
Repayments of debt
345
Esl Investments Inc | Senior Secured Note
Repayments of debt
165
Fairholme | Senior Secured Note
Repayments of debt
207
Affiliated Entity
Cash interest paid
180
$ 94
[5]
83
[5]
Affiliated Entity | Short-term Debt
Repayments of debt
400
Affiliated Entity | Senior Secured Note
Repayments of debt
482
Corporate Joint Venture
Sale leaseback transaction, gross proceeds, financing activities
429
Proceeds from sale-leaseback financing
426
Seritage Growth Properties
Aggregate proceeds from sale-leaseback transaction and rights offering of common stock and limited partnership units
2,700
Net proceeds from sale-leaseback transaction and rights offering of common stock and limited partnership units
2,600
Proceeds from sale-leaseback financing
82
Seritage Growth Properties | Esl Investments Inc
Proceeds from rights offering of common shares and limited partnership units
745
Seritage Growth Properties | Fairholme
Proceeds from rights offering of common shares and limited partnership units
$ 297
JPP LLC and JPP II, LLC | Affiliated Entity
Proceeds from sales of receivables
63
Payment of debt extension fees
$ 5
[1]
Holdings received cash proceeds of $2.7 billion ($2.6 billion, net of closing costs) from the Seritage transaction (including $745 million and $297 million, respectively, received from ESL Investments, Inc. and its affiliates ("ESL") and Fairholme Capital Management, LLC and its affiliates ("Fairholme")), and $429 million ($426 million, net of closing costs) from the JV transactions. Proceeds from the Seritage transaction are included in proceeds from sales of property and investments ($2.6 billion), and proceeds from sale-leaseback financing ($82 million) for 2015. Proceeds from the JV transactions are included in proceeds from sale-leaseback financing ($426 million) for 2015. See Note 11 for further information and defined terms.
[2]
Proceeds in 2017 include $63 million from JPP, LLC and JPP II, LLC, entities affiliated with ESL (as defined in Note 1), for the sale of receivables.
[3]
Proceeds in 2017 and 2016, respectively, include amounts from related parties of $876 million in connection with the Term Loan Facility, Line of Credit Loans and Incremental Loans and $1.3 billion received from the 2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan and Second Lien Term Loan. See Notes 3 and 15 for further information and defined terms.
[4]
Cash interest paid includes $180 million, $94 million and $83 million interest paid to related parties related to our borrowings in 2017, 2016 and 2015, respectively. See Notes 3 and 15 for further information.
[5]
Includes one-time extension fees equal to $5 million to JPP, LLC and JPP II, LLC, entities affiliated with ESL during 2017. See Note 3 for further information.
12 Months Ended
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SUMMARY OF SIGNFICANT ACCOUNTING POLICIES
2018
2017
12 Months Ended
Noncontrolling Interest [Abstract]
SEARS CANADA
12 Months Ended
Debt Disclosure [Abstract]
BORROWINGS
2018
2017
12 Months Ended
Derivative Instruments and Hedging Activities Disclosure [Abstract]
FINANCIAL GUARANTEES
Issued
Issued
12 Months Ended
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
12 Months Ended
Investment Income, Interest and Dividend [Abstract]
INTEREST AND INVESTMENT LOSS
12 Months Ended
Retirement Benefits [Abstract]
BENEFIT PLANS
Increase
Decrease
2018
2017
12 Months Ended
Earnings Per Share [Abstract]
EARNINGS PER SHARE
12 Months Ended
Stockholders' Equity Note [Abstract]
EQUITY
Average
Fair Value
on Date
of Grant
Average
Fair Value
on Date
of Grant
Average
Fair Value
on Date
of Grant
2018
2017
2016
Tax
Amount
Expense
Tax
Amount
Tax
Amount
Tax
Amount
Tax
Amount
Tax
Amount
12 Months Ended
Income Tax Disclosure [Abstract]
INCOME TAXES
2018
2017
2018
2017
12 Months Ended
Real Estate [Abstract]
REAL ESTATE TRANSACTIONS
12 Months Ended
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND INTANGIBLE ASSETS
Carrying
Amount
Amortization
Carrying
Amount
Amortization
12 Months Ended
Restructuring and Related Activities [Abstract]
STORE CLOSING CHARGES, SEVERANCE COSTS AND IMPAIRMENTS
12 Months Ended
Leases [Abstract]
LEASES
12 Months Ended
Related Party Transactions [Abstract]
RELATED PARTY DISCLOSURE
12 Months Ended
Supplemental Financial Information [Abstract]
SUPPLEMENTAL FINANCIAL INFORMATION
2018
2017
12 Months Ended
Segment Reporting [Abstract]
SUMMARY OF SEGMENT DATA
12 Months Ended
Commitments and Contingencies Disclosure [Abstract]
LEGAL PROCEEDINGS
12 Months Ended
Quarterly Financial Information Disclosure [Abstract]
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
12 Months Ended
Condensed Financial Information of Parent Company Only Disclosure [Abstract]
GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
12 Months Ended
Valuation and Qualifying Accounts [Abstract]
Schedule of Valuation and Qualifying Accounts
12 Months Ended
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations, Consolidation and Basis of Presentation
Fiscal Year
Use of Estimates
Cash and Cash Equivalents
Allowance for Doubtful Accounts
Merchandise Inventories
Vendor Rebates and Allowances
Property and Equipment
Impairment of Long-Lived Assets and Costs Associated with Exit Activities
Goodwill, Trade Names and Related Impairments
Fair Value of Financial Instruments
Self-insurance Reserves
Loss Contingencies
Revenue Recognition
Cost of Sales, Buying and Occupancy Costs
Selling and Administrative Expenses
Pre-Opening Costs
Advertising Costs
Income Taxes
Stock-based Compensation
Earnings Per Common Share
New Accounting Pronouncements
12 Months Ended
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Cash and Cash Equivalents
2018
2017
Restrictions on Cash and Cash Equivalents
2018
2017
Schedule of Self-Insurance Reserve
12 Months Ended
Debt Disclosure [Abstract]
Total Borrowings
2018
2017
Schedule of Maturities of Long-term Debt
Schedule of Interest Expense on Debt
12 Months Ended
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Guarantor Obligations
Issued
Issued
12 Months Ended
Investment Income, Interest and Dividend [Abstract]
Schedule of Components of Interest and Investment Loss
12 Months Ended
Defined Benefit Plan Disclosure [Line Items]
Expenses for Retirement and Savings Related Benefit Plans
Schedule Of Assumptions Used In Calculating Net Periodic Benefit Cost
Schedule of Net Benefit Costs
Effect of One-Percentage-Point Change in Assumed Discount Rate on Pension Liability
Increase
Decrease
Schedule of Expected Benefit Payments
Schedule of Allocation of Plan Assets
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Pension Plans and Postretirement Benefit Obligations
Classes of Securities in Plan Assets Investment
2018
2017
Postretirement Benefit Plans
Defined Benefit Plan Disclosure [Line Items]
Pension Plans and Postretirement Benefit Obligations
12 Months Ended
Earnings Per Share [Abstract]
Schedule of Earnings Per Share
12 Months Ended
Stockholders' Equity Note [Abstract]
Changes in Restricted Stock Awards
Average
Fair Value
on Date
of Grant
Average
Fair Value
on Date
of Grant
Average
Fair Value
on Date
of Grant
Aggregate Fair Value of Shares Granted Based on Weighted Average Fair Value at Date of Grant
Components of Accumulated Other Comprehensive Loss
2018
2017
2016
Income Tax Expense Allocated to Each Component of Other Comprehensive Income (Loss)
Tax
Amount
Expense
Tax
Amount
Tax
Amount
Tax
Amount
Tax
Amount
Tax
Amount
12 Months Ended
Income Tax Disclosure [Abstract]
Income Taxes
Effective Tax Rate Reconciliation
Deferred Tax Assets and Liabilities
2018
2017
Reconciliation of Beginning and Ending Amount of Gross Unrecognized Tax Benefits
2018
2017
12 Months Ended
Real Estate [Abstract]
Schedule of Immediate Gain on Sale Leaseback
Schedule of Rent Expense
12 Months Ended
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets
Carrying
Amount
Amortization
Carrying
Amount
Amortization
Schedule of Future Amortization Expense
12 Months Ended
Restructuring and Related Activities [Abstract]
Store Closing Costs Recorded
Store Closing Cost Accruals
Impairment of Long-Lived Assets
12 Months Ended
Leases [Abstract]
Schedule of Rent Expense
Schedule of Future Minimum Obligations Under Operating And Capital Lease Commitments
12 Months Ended
Supplemental Financial Information [Abstract]
Other Long-Term Liabilities
2018
2017
Deferred Revenue, by Arrangement, Disclosure
12 Months Ended
Segment Reporting [Abstract]
Summary of Segment Data
12 Months Ended
Quarterly Financial Information Disclosure [Abstract]
Schedule of Quarterly Financial Information
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
12 Months Ended
Condensed Financial Information of Parent Company Only Disclosure [Abstract]
Condensed Consolidating Balance Sheet
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Condensed Consolidating Statement of Operations
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Condensed Consolidating Statement of Comprehensive Income (Loss)
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
Condensed Consolidating Statement of Cash Flows
Subsidiaries
Guarantor
Subsidiaries
Subsidiaries
Guarantor
Subsidiaries
$ in Millions
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and equivalents
$ 113
$ 196
Cash posted as collateral
4
3
Credit card deposits in transit
65
87
Total cash and cash equivalents
182
286
Restricted cash
154
0
Total cash balances
$ 336
$ 286
$ 238
$ 250
$ in Millions
Organization, Consolidation and Presentation of Financial Statements [Abstract]
2018
$ 148
2019
100
2020
74
2021
54
2022
42
Later years
311
Total undiscounted obligation
729
Less—discount
(83)
Net obligation
$ 646
shares in Millions, $ in Millions12 Months Ended
Sears Canada
Noncontrolling Interest [Line Items]
Shares of beneficial interest (in shares)
12
12
Ownership interest percentage in equity method investment
12.00%
12.00%
Other-than-temporary impairment
$ 12
Sears Canada
Noncontrolling Interest [Line Items]
Equity method investments balance
$ 17
Debt Instrument [Line Items]
Debt and capital lease obligations
$ 4,100,000,000
$ 4,200,000,000
Short-term borrowings:
Short-term borrowings
[1]
$ 915,000,000
$ 0
Short-term debt, weighted average interest rate
8.00%
5.40%
Long-term debt
Carrying amount, long-term debt
$ 3,217,000,000
$ 4,163,000,000
Capitalized lease obligations
72,000,000
145,000,000
Current maturities
(968,000,000)
(590,000,000)
Long-term debt and capitalized lease obligations
[2]
$ 2,249,000,000
$ 3,573,000,000
Weighted-average annual interest rate on long-term debt
7.60%
7.20%
Fair value of long-term debt
$ 2,800,000,000
$ 4,000,000,000
6.50% to 7.50% Notes, due 2027 to 2043
Long-term debt
Carrying amount, long-term debt
284,000,000
327,000,000
8% Secured Loan Facility, due 2018
Long-term debt
Carrying amount, long-term debt
$ 251,000,000
494,000,000
Stated interest rate on debt instrument
8.00%
6.625% Senior Secured Notes, due 2018
Long-term debt
Carrying amount, long-term debt
$ 303,000,000
303,000,000
Stated interest rate on debt instrument
6.625%
6.625%
Principal amount of debt
$ 1,000
8% Senior Unsecured Notes, due 2019
Long-term debt
Carrying amount, long-term debt
$ 483,000,000
428,000,000
Stated interest rate on debt instrument
8.00%
8.00%
8.00%
8% Secured Loan Facility, due 2020
Long-term debt
Carrying amount, long-term debt
$ 374,000,000
485,000,000
Stated interest rate on debt instrument
8.00%
Term Loan Facility (Credit Facility), $300M due 2020
Long-term debt
Carrying amount, long-term debt
$ 206,000,000
0
Principal amount of debt
300,000,000
Secured Debt | Term Loan (Credit Facility), $1.0B due 2019
Long-term debt
Carrying amount, long-term debt
391,000,000
963,000,000
Principal amount of debt
1,000,000,000
Secured Debt | 2016 Term Loan (Credit Facility), $750M due 2020
Long-term debt
Carrying amount, long-term debt
559,000,000
726,000,000
Principal amount of debt
750,000,000
Secured Debt | Second Lien Term Loan (Credit Facility), $300M due 2020
Long-term debt
Carrying amount, long-term debt
294,000,000
$ 292,000,000
Principal amount of debt
$ 300,000,000
Minimum | 6.50% to 7.50% Notes, due 2027 to 2043
Long-term debt
Stated interest rate on debt instrument
6.50%
Maximum | 6.50% to 7.50% Notes, due 2027 to 2043
Long-term debt
Stated interest rate on debt instrument
7.50%
[1]
Includes balances held by related parties of $645 million at February 3, 2018 related to our Line of Credit Loans and Incremental Loans (each as defined in Note 3). See Notes 3 and 15 for further information.
[2]
Includes balances held by related parties of $1.5 billion and $1.7 billion at February 3, 2018 and January 28, 2017, respectively, related to our Subsidiary Notes, Senior Unsecured Notes, Second Lien Term Loan, 2016 Term Loan and 2017 Secured Loan Facility for both periods and also related to our Term Loan Facility at February 3, 2018 and our Senior Secured Notes at January 28, 2017. See Note 3 for defined terms and Notes 3 and 15 for further information.
$ in Millions
Debt Disclosure [Abstract]
2018
$ 979
2019
637
2020
1,471
2021
3
2022
3
Thereafter
312
Aggregate original principal amount
3,405
Unamortized debt discount
(152)
Unamortized debt issuance costs
(36)
Carrying amount, long-term debt
$ 3,217
$ 4,163
$ in Millions12 Months Ended
Debt Disclosure [Abstract]
Interest expense
$ 377
$ 288
$ 223
Amortization of debt issuance costs
58
31
25
Accretion of debt discount
66
50
35
Accretion of self-insurance obligations at net present value
19
16
19
Accretion of lease obligations at net present value
19
19
21
Interest expense
$ 539
$ 404
$ 323
Debt Disclosure [Abstract]
Unsecured commercial paper
$ 0
$ 0
Short-term Debt [Line Items]
Short-term borrowings
[1]
$ 915,000,000
$ 0
Esl Investments Inc
Short-term Debt [Line Items]
Short-term borrowings
$ 0
$ 0
$ 400,000,000
[1]
Includes balances held by related parties of $645 million at February 3, 2018 related to our Line of Credit Loans and Incremental Loans (each as defined in Note 3). See Notes 3 and 15 for further information.
Line of Credit Facility [Line Items]
Credit agreement
$ 1,500,000,000.0
$ 1,971,000,000.000
Standby Letters of Credit
Line of Credit Facility [Line Items]
Credit agreement
$ 500,000,000
Esl Investments Inc | Standby Letters of Credit
Line of Credit Facility [Line Items]
Credit agreement
$ 500,000,000
Letters of credit outstanding amount
271,000,000
$ 200,000,000
Portion syndicated to unaffiliated third party lenders
$ 138,000,000
Cash collateral, percent of commitment
102.00%
Funding fee percentage
1.00%
Eurodollar | Esl Investments Inc | Standby Letters of Credit
Line of Credit Facility [Line Items]
Credit agreement, interest rates margin
11.00%
Debt Instrument [Line Items]
Number of properties released under amendment | property
138
Subsequent Event | Secured Loan
Debt Instrument [Line Items]
Principal amount of debt
$ 200,000,000
Subsequent Event | Secured Loan | LIBOR
Debt Instrument [Line Items]
Upfront commitment fee percentage
1.50%
Subsequent Event | Mezzanine Loan
Debt Instrument [Line Items]
Principal amount of debt
$ 240,000,000
Additional borrowing capacity under incremental loan feature
$ 200,000,000
Subsequent Event | Mezzanine Loan | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate
11.00%
Upfront commitment fee percentage
1.80%
Subsequent Event | Secured Loan and Mezzanine Loan
Debt Instrument [Line Items]
Default interest rate in excess of the base interest rate
2.00%
LIBOR rate, first three months | Subsequent Event | Secured Loan | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate
6.50%
LIBOR rate, fourth through the sixth month | Subsequent Event | Secured Loan | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate
7.50%
LIBOR rate, seventh through the ninth month | Subsequent Event | Secured Loan | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate
8.50%
1 Months Ended
12 Months Ended
Debt Instrument [Line Items]
Carrying amount, long-term debt
$ 3,217,000,000
$ 3,217,000,000
$ 4,163,000,000
Term Loan Facility
Debt Instrument [Line Items]
Proceeds from long-term debt
$ 20,000,000
$ 30,000,000
$ 100,000,000
210,000,000
Additional borrowing capacity under incremental loan feature
$ 200,000,000
Carrying amount, long-term debt
$ 206,000,000
206,000,000
$ 0
Paid-in-kind interest
$ 1,000,000
Term Loan Facility | LIBOR
Debt Instrument [Line Items]
Credit agreement, interest rates margin
12.50%
Subsequent Event | Term Loan Facility
Debt Instrument [Line Items]
Proceeds from long-term debt
$ 40,000,000
Additional borrowing capacity under incremental loan feature
$ 50,000,000
Unaffiliated Third Party Lenders | Term Loan Facility
Debt Instrument [Line Items]
Proceeds from long-term debt
$ 60,000,000
1 Months Ended
12 Months Ended
Debt Instrument [Line Items]
Proceeds from debt issuances
[1]
$ 1,020,000,000
$ 2,028,000,000
$ 0
Carrying amount, long-term debt
3,217,000,000
4,163,000,000
2017 Secured Loan Facility
Debt Instrument [Line Items]
Repayments of secured debt
(116,000,000)
Incremental Loans
Debt Instrument [Line Items]
Repayments of secured debt
(55,000,000)
Secured Debt | 2017 Secured Loan Facility
Debt Instrument [Line Items]
Principal amount of debt
$ 500,000,000
$ 500,000,000
Proceeds from debt issuances
$ 321,000,000
$ 179,000,000
Commitment fees
1.00%
Funding fee percentage
1.00%
Number of real estate properties pledged as collateral | Property
69
Repayments of secured debt
(116,000,000)
Default interest rate in excess of the base interest rate
2.50%
Carrying amount, long-term debt
$ 374,000,000
$ 485,000,000
Secured Debt | 2017 Secured Loan Facility | Base Rate
Debt Instrument [Line Items]
Credit agreement, interest rates margin
8.00%
Secured Debt | 2017 Secured Loan Facility | Prime Rate
Debt Instrument [Line Items]
Basis spread on prime rate for debt default interest rate
1.00%
Notes Payable, Other Payables | Incremental Loans
Debt Instrument [Line Items]
Principal amount of debt
$ 200,000,000
Stated interest rate on debt instrument
11.00%
Number of real estate properties pledged as collateral | property
7
Repayments of short-term debt
$ (55,000,000)
Carrying value of Incremental Loans
$ 144,000,000
Subsequent Event | Notes Payable, Other Payables | 2017 Secured Loan Facility | LIBOR
Debt Instrument [Line Items]
Credit agreement, interest rates margin
9.00%
Subsequent Event | Notes Payable, Other Payables | Second Incremental Loan
Debt Instrument [Line Items]
Principal amount of debt
$ 100,000,000
[1]
Proceeds in 2017 and 2016, respectively, include amounts from related parties of $876 million in connection with the Term Loan Facility, Line of Credit Loans and Incremental Loans and $1.3 billion received from the 2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan and Second Lien Term Loan. See Notes 3 and 15 for further information and defined terms.
1 Months Ended
12 Months Ended
Debt Instrument [Line Items]
Proceeds from debt issuances
[1]
$ 1,020,000,000
$ 2,028,000,000
$ 0
Carrying amount, long-term debt
3,217,000,000
4,163,000,000
2016 Secured Loan Facility
Debt Instrument [Line Items]
Repayments of secured debt
(250,000,000)
Secured Debt | 2016 Secured Loan Facility
Debt Instrument [Line Items]
Principal amount of debt
$ 500,000,000
$ 500,000,000
Proceeds from debt issuances
$ 250,000,000
$ 250,000,000
Debt instrument, refinance amount
$ 400,000,000
Carrying amount, long-term debt
251,000,000
$ 494,000,000
Commitment fees
1.00%
Funding fee percentage
1.00%
Number of real estate properties pledged as collateral | Property
21
Default interest rate in excess of the base interest rate
2.50%
Repayments of secured debt
$ (250,000,000)
Secured Debt | 2016 Secured Loan Facility | Base Rate
Debt Instrument [Line Items]
Credit agreement, interest rates margin
8.00%
Extension fee on debt instrument
$ 8,000,000
Secured Debt | 2016 Secured Loan Facility | Prime Rate
Debt Instrument [Line Items]
Basis spread on prime rate for debt default interest rate
1.00%
[1]
Proceeds in 2017 and 2016, respectively, include amounts from related parties of $876 million in connection with the Term Loan Facility, Line of Credit Loans and Incremental Loans and $1.3 billion received from the 2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan and Second Lien Term Loan. See Notes 3 and 15 for further information and defined terms.
2 Months Ended
3 Months Ended
12 Months Ended
Debt Instrument [Line Items]
Credit agreement
$ 1,500,000,000.0
$ 1,500,000,000.0
$ 1,971,000,000.000
Additional borrowing capacity under accordion feature
1,000,000,000
1,000,000,000
Aggregate original principal amount
3,405,000,000
3,405,000,000
Carrying amount, long-term debt
$ 3,217,000,000
$ 3,217,000,000
4,163,000,000
Minimum fixed charge coverage ratio
1.0
1.0
Secured Debt
Debt Instrument [Line Items]
Number of secure loan facilities | loan
2
Domestic Credit Agreement
Debt Instrument [Line Items]
Credit Agreement available amount
$ 69,000,000
$ 69,000,000
165,000,000
Covenant term in the event of certain repayment of indebtedness
1 year
Letters of credit outstanding amount
377,000,000
$ 377,000,000
464,000,000
2016 Term Loan | Senior Secured Note
Debt Instrument [Line Items]
Principal amount of debt
750,000,000
750,000,000
Carrying amount, long-term debt
$ 559,000,000
559,000,000
726,000,000
Proceeds from debt, net of issuance costs
$ 722,000,000
Premium percentage prepayment prior to April 8, 2017
2.00%
2.00%
Premium percentage prepayment to prior after April 8, 2017
1.00%
1.00%
2016 Term Loan | Domestic Credit Agreement
Debt Instrument [Line Items]
Extension fee percentage
2.00%
Credit facility, amount outstanding
$ 750,000,000
$ 750,000,000
Domestic Credit Agreement
Debt Instrument [Line Items]
Credit agreement
750,000,000
750,000,000
Additional borrowing capacity under FILO tranche feature
500,000,000
500,000,000
Permitted short-term borrowings under amended agreement
1,000,000,000.0
1,000,000,000.0
Domestic Credit Agreement | Subsequent Event
Debt Instrument [Line Items]
Credit agreement
$ 1,250,000,000.00
Domestic Credit Agreement | Letter of Credit
Debt Instrument [Line Items]
Credit agreement
1,000,000,000.0
$ 1,000,000,000.0
Extended Maturity | Domestic Credit Agreement
Debt Instrument [Line Items]
Commitment fees
0.625%
Second Lien | Domestic Credit Agreement
Debt Instrument [Line Items]
Credit agreement
2,000,000,000.0
$ 2,000,000,000.0
Credit facility, amount outstanding
1,100,000,000
1,100,000,000
Credit Agreement available amount
896,000,000
896,000,000
Sears Holdings Corporation 2016 Term Loan | Secured Debt
Debt Instrument [Line Items]
Principal amount of debt
1,000,000,000.0
1,000,000,000.0
Periodic payment on debt
2,500,000
Aggregate original principal amount
400,000,000
400,000,000
970,000,000
Carrying amount, long-term debt
391,000,000
391,000,000
963,000,000
Repayments of debt
325,000,000
$ 570,000,000
Sears Holdings Corporation 2016 Term Loan | Secured Debt | Subsequent Event
Debt Instrument [Line Items]
Repayments of debt
$ 97,000,000
Minimum | Domestic Credit Agreement
Debt Instrument [Line Items]
Limit of availability under the credit facility to make restricted payments
15.00%
Minimum | Domestic Credit Agreement | Domestic Credit Agreement
Debt Instrument [Line Items]
Limit of availability under the credit facility to make restricted payments
12.50%
Maximum | Domestic Credit Agreement
Debt Instrument [Line Items]
Limit of availability under the credit facility to make restricted payments
10.00%
LIBOR | 2016 Term Loan | Senior Secured Note
Debt Instrument [Line Items]
Credit agreement, interest rates margin
7.50%
Floor rate on variable interest
1.00%
LIBOR | Sears Holdings Corporation 2016 Term Loan | Secured Debt
Debt Instrument [Line Items]
Floor interest rate percentage
1.00%
LIBOR | Minimum | Extended Maturity | Domestic Credit Agreement
Debt Instrument [Line Items]
Credit agreement, interest rates margin
3.50%
LIBOR | Minimum | Sears Holdings Corporation 2016 Term Loan | Secured Debt
Debt Instrument [Line Items]
Applicable margin on variable rate
4.50%
LIBOR | Maximum | Extended Maturity | Domestic Credit Agreement
Debt Instrument [Line Items]
Credit agreement, interest rates margin
4.00%
Base Rate | Minimum | Extended Maturity | Domestic Credit Agreement
Debt Instrument [Line Items]
Credit agreement, interest rates margin
2.50%
Base Rate | Minimum | Sears Holdings Corporation 2016 Term Loan | Secured Debt
Debt Instrument [Line Items]
Applicable margin on variable rate
3.50%
Base Rate | Maximum | Extended Maturity | Domestic Credit Agreement
Debt Instrument [Line Items]
Credit agreement, interest rates margin
3.00%
Secured Debt
Debt Instrument [Line Items]
Credit facility, amount outstanding
271,000,000
$ 271,000,000
$ 0
Affiliated Entity | 2016 Term Loan | Senior Secured Note
Debt Instrument [Line Items]
Principal amount of debt
$ 750,000,000
$ 750,000,000
1 Months Ended
12 Months Ended
Debt Instrument [Line Items]
Additional borrowing capacity under accordion feature
$ 1,000,000,000
Maximum borrowing capacity
1,500,000,000.0
$ 1,971,000,000.000
Carrying amount, long-term debt
3,217,000,000
4,163,000,000
Second Lien Term Loan
Debt Instrument [Line Items]
Repayments of debt
110,000,000
Inventory advance rate
75.00%
65.00%
Secured Debt | Second Lien Term Loan
Debt Instrument [Line Items]
Principal amount of debt
300,000,000
$ 300,000,000
Additional borrowing capacity under accordion feature
$ 500,000,000
Line of Credit | Line of Credit Loans
Debt Instrument [Line Items]
Debt instrument, term
180 days
Carrying amount, long-term debt
500,000,000
Esl Investments Inc
Debt Instrument [Line Items]
Proceeds from lines of credit
480,000,000
Esl Investments Inc | Secured Debt | Second Lien Term Loan
Debt Instrument [Line Items]
Principal amount of debt
$ 300,000,000
Proceeds from debt, net of issuance costs
$ 291,000,000
Additional borrowing capacity under accordion feature
$ 500,000,000
Carrying amount, long-term debt
294,000,000
$ 292,000,000
Esl Investments Inc | Secured Debt | Second Lien Term Loan | LIBOR
Debt Instrument [Line Items]
Floor interest rate percentage
1.00%
Credit agreement, interest rates margin
7.50%
Esl Investments Inc | Secured Debt | Second Lien Term Loan | Base Rate
Debt Instrument [Line Items]
Credit agreement, interest rates margin
6.50%
Esl Investments Inc | Line of Credit | Line of Credit Loans
Debt Instrument [Line Items]
Debt instrument, term
180 days
Affiliated Entity
Debt Instrument [Line Items]
Proceeds from lines of credit
$ 610,000,000
Subsequent Event | Second Lien Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity
$ 1,250,000,000
Subsequent Event | Line of Credit | Line of Credit Loans
Debt Instrument [Line Items]
Debt instrument, term
270 days
Maximum borrowing capacity
$ 600,000,000
Subsequent Event | Esl Investments Inc | Line of Credit | Line of Credit Loans
Debt Instrument [Line Items]
Debt instrument, term
270 days
Maximum borrowing capacity
$ 600,000,000
1 Months Ended
12 Months Ended
Debt Instrument [Line Items]
Long-term debt
$ 3,405,000,000
Debt repurchase authorized amount
$ 1,000,000,000.0
Carrying amount, long-term debt
$ 3,217,000,000
$ 4,163,000,000
Old Senior Secured Notes
Debt Instrument [Line Items]
Long-term debt
$ 1,000,000,000
Percentage of note repurchase price per principal amount
101.00%
Repayments of debt
936,000,000
Early tender repurchase amount per tender offer
990
Principal amount of debt
1,000
Early tender payment per $1000
30
Repurchase amount per tender offer
960
Inventory advance rate
75.00%
65.00%
Stated interest rate on debt instrument
6.625%
6.625%
Repurchase amount on debt instrument
929,000,000
Repurchase on debt
936,000,000
Unamortized debt issue costs and discount
7,000,000
Carrying amount, long-term debt
$ 303,000,000
$ 303,000,000
Domestic Plan | Pension Plans | Old Senior Secured Notes
Debt Instrument [Line Items]
Long-term debt
$ 0
$ 250,000,000
Subsequent Event | Old Senior Secured Notes
Debt Instrument [Line Items]
Repayments of debt
$ 169,800,000
Subsequent Event | New Senior Secured Notes
Debt Instrument [Line Items]
Stated interest rate on debt instrument
6.625%
Conversion price (in dollars per share)
$ 5.00
Volume weighted average trading price threshold (in dollars per share)
$ 10.00
Debt instrument, purchase price, percentage
101.00%
Treasury Rate | Old Senior Secured Notes
Debt Instrument [Line Items]
Basis spread on variable rate
0.50%
Esl Investments Inc | Old Senior Secured Notes
Debt Instrument [Line Items]
Repayments of debt
$ 165,000,000
Esl Investments Inc | Subsequent Event | Old Senior Secured Notes
Debt Instrument [Line Items]
Repayments of debt
$ 20,000,000
$ / shares in Units, $ in Millions
12 Months Ended
Debt Instrument [Line Items]
Rights offering of units consisting of senior unsecured notes and warrants
$ 625.0
Aggregate original principal amount
$ 3,405.0
Proceeds from debt issuances
[1]
1,020.0
$ 2,028.0
$ 0.0
Unamortized discount on debt instrument
152.0
Accretion of debt discount
66.0
50.0
$ 35.0
Carrying amount, long-term debt
$ 3,217.0
4,163.0
Old Senior Unsecured Notes
Debt Instrument [Line Items]
Rights offering of units consisting of senior unsecured notes and warrants
$ 625.0
Stated interest rate on debt instrument
8.00%
8.00%
8.00%
Aggregate original principal amount
$ 625.0
Proceeds from debt issuances
625.0
Unamortized discount on debt instrument
$ 278.0
$ 140.0
195.0
Effective interest rate on debt instrument
11.55%
Accretion of debt discount
55.0
44.0
Carrying amount, long-term debt
$ 483.0
$ 428.0
Subsequent Event | Old Senior Unsecured Notes
Debt Instrument [Line Items]
Repayments of debt
$ 214.0
Subsequent Event | New Senior Unsecured Notes
Debt Instrument [Line Items]
Stated interest rate on debt instrument
8.00%
Conversion price (in dollars per share)
$ 8.33
Volume weighted average trading price threshold (in dollars per share)
$ 10.00
Esl Investments Inc | Subsequent Event | Old Senior Unsecured Notes
Debt Instrument [Line Items]
Repayments of debt
$ 187.6
[1]
Proceeds in 2017 and 2016, respectively, include amounts from related parties of $876 million in connection with the Term Loan Facility, Line of Credit Loans and Incremental Loans and $1.3 billion received from the 2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan and Second Lien Term Loan. See Notes 3 and 15 for further information and defined terms.
$ in Millions
Debt Disclosure [Abstract]
Cash posted as collateral
$ 4
$ 3
$ in Millions
Debt Instrument [Line Items]
Mortgage-backed securities owned
$ 1,300
Asset-backed securities issued
$ 1,800
Asset-backed securities redeemed
$ 900
Subsidiaries
Debt Instrument [Line Items]
Number of stores | Store
138
Securitized trademark rights
Debt Instrument [Line Items]
Carrying amount of asset securitized
$ 700
$ 1,000
Real Estate
Debt Instrument [Line Items]
Carrying amount of asset securitized
$ 500
$ 600
$ in Millions
Standby letters of credit
Derivative [Line Items]
Guarantor obligations
$ 653
Commercial letters of credit
Derivative [Line Items]
Guarantor obligations
31
Secondary lease obligations
Derivative [Line Items]
Guarantor obligations
164
Bank Issued | Standby letters of credit
Derivative [Line Items]
Guarantor obligations
647
Bank Issued | Commercial letters of credit
Derivative [Line Items]
Guarantor obligations
0
Bank Issued | Secondary lease obligations
Derivative [Line Items]
Guarantor obligations
0
SRAC Issued | Standby letters of credit
Derivative [Line Items]
Guarantor obligations
6
SRAC Issued | Commercial letters of credit
Derivative [Line Items]
Guarantor obligations
31
SRAC Issued | Secondary lease obligations
Derivative [Line Items]
Guarantor obligations
0
Other | Standby letters of credit
Derivative [Line Items]
Guarantor obligations
0
Other | Commercial letters of credit
Derivative [Line Items]
Guarantor obligations
0
Other | Secondary lease obligations
Derivative [Line Items]
Guarantor obligations
$ 164
$ in Millions12 Months Ended
Investment Income, Interest and Dividend [Abstract]
Interest income on cash and cash equivalents
$ 2
$ 1
$ 1
Other investment loss
(14)
(27)
(63)
Total
(12)
(26)
(62)
Loss from equity method investments
$ 17
$ 35
$ 59
$ in Millions12 Months Ended
Retirement Benefits [Abstract]
Pension plans
$ 657
$ 289
$ 230
Postretirement benefits
0
28
(2)
Total
$ 657
$ 317
$ 228
retiree in Thousands, participant in Thousands, $ in Millions
1 Months Ended
3 Months Ended
12 Months Ended
Defined Benefit Plan Disclosure [Line Items]
Discount rate
3.75%
3.85%
4.15%
4.50%
3.70%
MetLife
Defined Benefit Plan Disclosure [Line Items]
Number of retirees | retiree
20
51
20
51
Pension plan settlements
$ 512
$ (515)
Loss reclassification adjustment from AOCI, pension and other postretirement benefit plans
$ 76
$ 203
$ 200
Number of eligible terminated vested participants | participant
20
Qualified pension plan liabilities, eligible terminated vested participants
$ 300
Payments of pension benefits to terminated vested participants
$ 209
$ in Millions1 Months Ended
12 Months Ended
Pension Plans
Change in benefit obligation
Beginning balance
$ 5,165
$ 5,265
Interest cost
180
227
$ 211
Actuarial loss
227
108
Benefits paid
(316)
(435)
Settlements
(1,249)
0
Other
(4)
0
Balance at measurment date
4,003
5,165
5,265
Change in Plan Assets at Fair Value
Beginning balance
3,567
3,189
Actual return on plan assets
231
499
Company contributions
$ 407
295
314
Benefits paid
(316)
(435)
Settlements
(1,249)
0
Balance at measurement date
2,528
3,567
$ 3,189
Funded Status
(1,475)
(1,598)
Accumulated benefit obligation
$ 4,000
$ 5,200
Weighted average assumptions used in calculating plan obligations
Discount rate
3.75%
4.15%
4.50%
Pension Plans | Change In Assumptions For Defined Benefit Plans
Change in benefit obligation
Actuarial loss
$ 229
Postretirement Benefit Plans
Change in benefit obligation
Beginning balance
168
$ 143
Interest cost
6
5
$ 5
Plan participants' contributions
0
0
Actuarial loss
1
9
Benefits paid
(17)
(19)
Other
0
30
Balance at measurment date
158
168
143
Change in Plan Assets at Fair Value
Beginning balance
0
0
Company contributions
17
19
Plan participants' contributions
0
0
Benefits paid
(17)
(19)
Balance at measurement date
0
0
$ 0
Funded Status
(158)
$ (168)
Current liabilities for postretirement obligations
$ 16
Weighted average assumptions used in calculating plan obligations
Discount rate
3.60%
3.85%
4.00%
$ in Millions
12 Months Ended
Effect of One Percentage Point Increase/Decrease
Unrecognized net losses in accumulated other comprehensive income are expected to be amortized as a component of net periodic benefit cost
$ 146
Pension Plans
Components of Net Periodic Benefit Cost
Interest cost
180
$ 227
$ 211
Expected return on plan assets
(190)
(202)
(249)
Settlements
479
0
0
Recognized net loss and other
188
264
268
Net periodic benefit cost
$ 657
$ 289
$ 230
Weighted Average Assumptions Used in Calculating Net Cost
Discount Rate
3.75%
3.85%
4.15%
4.50%
3.70%
Return of plan assets
6.50%
6.50%
7.00%
Effect of One Percentage Point Increase/Decrease
Effect on interest cost component, increase
$ 20
Effect on interest cost component, decrease
(26)
Effect on pension benefit obligation, increase
(384)
Effect on pension benefit obligation, decrease
460
Postretirement Benefit Plans
Components of Net Periodic Benefit Cost
Interest cost
6
$ 5
$ 5
Recognized net loss and other
(6)
23
(7)
Net periodic benefit cost
$ 0
$ 28
$ (2)
Weighted Average Assumptions Used in Calculating Net Cost
Discount Rate
3.85%
4.00%
3.30%
Defined Benefit Plan Disclosure [Line Items]
Percentage of actual plan asset allocations
100.00%
100.00%
Equity securities
Defined Benefit Plan Disclosure [Line Items]
Percentage of actual plan asset allocations
36.00%
35.00%
Percentage of target plan asset allocations
35.00%
Fixed income and other debt securities
Defined Benefit Plan Disclosure [Line Items]
Percentage of actual plan asset allocations
63.00%
63.00%
Other
Defined Benefit Plan Disclosure [Line Items]
Percentage of actual plan asset allocations
1.00%
2.00%
Fixed income securities
Defined Benefit Plan Disclosure [Line Items]
Percentage of target plan asset allocations
65.00%
$ in Millions
Pension Plans
Employer contributions:
2018 (expected)
$ 280
Expected Payments
2018
334
2019
308
2020
298
2021
291
2022
283
2023-2027
1,289
Postretirement Benefit Plans
Employer contributions:
2018 (expected)
16
Expected Payments
2018
16
2019
17
2020
17
2021
16
2022
15
2023-2027
$ 58
$ in Millions
1 Months Ended
12 Months Ended
Defined Benefit Plan Disclosure [Line Items]
Period to contribute to pension plan payments
5 years
Number of properties released under amendment | property
138
Craftsman Brand
Defined Benefit Plan Disclosure [Line Items]
Income stream related to new Stanley Black and Decker sales
15 years
Period to contribute to pension plan payments
5 years
Real estate pledged as collateral to secure minimum pension funding
$ 100
Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Company contributions
$ 407
295
$ 314
2018 expected contributions
280
Supplemental payment due in the second quarter of 2018
20
2019 expected contributions
$ 276
Employer contribution relief period
2 years
Subsequent Event | Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Company contributions
$ 282
Escrow deposit for pension plans
$ 125
Employer contribution relief period
2 years
$ in Millions
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
$ 2,528
$ 3,567
$ 3,189
U.S. companies
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
727
980
U.S. companies | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
720
978
U.S. companies | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
U.S. companies | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
7
2
International companies
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
164
224
International companies | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
164
224
International companies | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
International companies | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
U.S. registered investment companies
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
6
3
U.S. registered investment companies | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
6
3
U.S. registered investment companies | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
U.S. registered investment companies | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Corporate bonds and notes
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
1,423
1,994
Corporate bonds and notes | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Corporate bonds and notes | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
1,423
1,994
Corporate bonds and notes | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Sears Holdings Corporation 2016 Term Loan
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
77
100
Sears Holdings Corporation 2016 Term Loan | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Sears Holdings Corporation 2016 Term Loan | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
77
100
Sears Holdings Corporation 2016 Term Loan | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Mortgage-backed and asset-backed
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
9
3
Mortgage-backed and asset-backed | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Mortgage-backed and asset-backed | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
6
1
Mortgage-backed and asset-backed | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
3
2
Other
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
(3)
1
Other | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Other | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
(3)
1
Other | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
0
Ventures and partnerships
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
1
Ventures and partnerships | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
Ventures and partnerships | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
0
Ventures and partnerships | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
1
Total investment assets at fair value
Defined Benefit Plan Disclosure [Line Items]
Total investment assets at fair value
2,403
3,306
Total investment assets at fair value | Level 1
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
890
1,205
Total investment assets at fair value | Level 2
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
1,503
2,096
Total investment assets at fair value | Level 3
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
10
5
Cash
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
4
8
Accounts receivable
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
39
65
Accounts payable
Defined Benefit Plan Disclosure [Line Items]
Investment assets at fair value
(28)
(69)
Cash equivalents and short-term investments
Defined Benefit Plan Disclosure [Line Items]
Investments measured at NAV
$ 110
$ 257
$ / shares in Units, shares in Thousands, $ in Millions3 Months Ended
12 Months Ended
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of EPS amount (in shares)
2
5,000
Basic weighted average shares (in shares)
107,400
106,900
106,600
Dilutive effect of restricted stock awards, restricted stock units and warrants (in shares)
0
0
0
Diluted weighted average shares (in shares)
107,400
106,900
106,600
Net loss attributable to Holdings' shareholders
$ 182
$ (558)
$ (251)
$ 244
$ (607)
$ (748)
$ (395)
$ (471)
$ (383)
$ (2,221)
$ (1,129)
Loss per share attributable to Holdings' shareholders:
Basic (in USD per share)
$ 1.69
$ (5.19)
$ (2.34)
$ 2.28
$ (5.67)
$ (6.99)
$ (3.70)
$ (4.41)
$ (3.57)
$ (20.78)
$ (10.59)
Diluted (in USD per share)
$ 1.69
$ (5.19)
$ (2.34)
$ 2.28
$ (5.67)
$ (6.99)
$ (3.70)
$ (4.41)
$ (3.57)
$ (20.78)
$ (10.59)
$ / shares in Units, shares in Thousands, $ in Millions12 Months Ended
Aggregate Fair Value
Aggregate fair value of shares granted based on weighted average fair value at date of grant
$ 4
$ 6
$ 6
Aggregate fair value of shares vesting during period
4
4
6
Aggregate fair value of shares forfeited during period
$ 1
$ 0
$ 0
Restricted Stock
Shares
Beginning of year balance (in shares)
151
60
73
Granted (in shares)
606
384
198
Vested (in shares)
(623)
(293)
(200)
Forfeited (in shares)
(119)
0
(11)
Ending of year balance (in shares)
15
151
60
Weighted- Average Fair Value on Date of Grant
Beginning of year balance (in dollars per share)
$ 28.89
$ 42.88
$ 45.82
Granted (in dollars per share)
7.15
16.87
31.26
Vested (in dollars per share)
8.10
16.00
32.01
Forfeited (in dollars per share)
25.27
0.00
51.39
End of year balance (in dollars per share)
$ 42.09
$ 28.89
$ 42.88
Aggregate Fair Value
Expected to vest (in shares)
15
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period
0 years
Maximum | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period
3 years
12 Months Ended
Stockholders' Equity Note [Abstract]
Stock repurchase program, authorized amount
$ 6,500,000,000.0
Repurchase of common shares (in shares)
0
0
0
Remaining authorization to repurchase common shares under share repurchase program, value
$ 504,000,000
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss
$ (3,723,000,000)
$ (3,824,000,000)
$ (1,956,000,000)
$ (945,000,000)
Pension and postretirement adjustments (net of tax of $(225), $(225) and $(296), respectively)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss
(1,071,000,000)
(1,549,000,000)
(1,915,000,000)
Accumulated other comprehensive loss, tax
(225,000,000)
(225,000,000)
(296,000,000)
Currency translation adjustments (net of tax of $0 for all periods presented)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss
(1,000,000)
(3,000,000)
(3,000,000)
Accumulated other comprehensive loss, tax
0
0
0
Accumulated other comprehensive loss
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss
$ (1,072,000,000)
$ (1,552,000,000)
$ (1,918,000,000)
$ (2,030,000,000)
$ in Millions12 Months Ended
Accumulated Other Comprehensive Income (Loss) [Line Items]
Before Tax Amount
$ 480
$ 430
$ 112
Tax Expense
0
(71)
0
Total other comprehensive income
480
359
112
Pension and postretirement adjustments, net of tax
Accumulated Other Comprehensive Income (Loss) [Line Items]
Before Tax Amount
478
437
113
Tax Expense
0
(71)
0
Total other comprehensive income
478
366
113
Experience gain (loss)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Before Tax Amount
(182)
181
(148)
Tax Expense
0
(71)
0
Total other comprehensive income
(182)
110
(148)
Less: cost of settlements
Accumulated Other Comprehensive Income (Loss) [Line Items]
Before Tax Amount
479
Tax Expense
0
Total other comprehensive income
479
Less: recognized net loss and other included in net periodic benefit cost
Accumulated Other Comprehensive Income (Loss) [Line Items]
Before Tax Amount
181
256
261
Tax Expense
0
0
0
Total other comprehensive income
181
256
261
Currency translation adjustments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Before Tax Amount
2
(1)
Tax Expense
0
0
Total other comprehensive income
$ 2
$ (1)
Dissolution of noncontrolling interest
Accumulated Other Comprehensive Income (Loss) [Line Items]
Before Tax Amount
(7)
Tax Expense
0
Total other comprehensive income
$ (7)
$ / shares in Units, $ in Millions
Class of Stock [Line Items]
Number of warrants to purchase shares (in shares)
22,000,000
Rights offering of units consisting of senior unsecured notes and warrants
$ 625
Number of securities called by each warrant or right (in shares)
1.11
1
Exercise price of warrants or rights (in dollars per share)
$ 25.686
$ 28.41
Unsecured Senior Notes
Class of Stock [Line Items]
Rights offering of units consisting of senior unsecured notes and warrants
$ 625
Stated interest rate on debt instrument
8.00%
8.00%
8.00%
$ in Millions12 Months Ended
Loss before income taxes:
U.S.
$ (1,012)
$ (2,429)
$ (1,420)
Foreign
31
34
35
Loss before income taxes
(981)
(2,395)
(1,385)
Current:
Federal
9
13
11
State and local
(3)
16
20
Foreign
13
18
17
Total current
19
47
48
Deferred:
Federal
(429)
(87)
(239)
State and local
(187)
(134)
(66)
Foreign
(1)
0
0
Total deferred
(617)
(221)
(305)
Income tax expense (benefit)
$ (598)
$ (174)
$ (257)
12 Months Ended
Income Tax Disclosure [Abstract]
Federal income tax rate (benefit rate)
(33.717%)
(35.00%)
(35.00%)
State and local tax (benefit) net of federal tax benefit
(11.80%)
(3.00%)
(1.80%)
Federal tax rate change
(22.60%)
(0.00%)
(0.00%)
Federal and state valuation allowance
21.20%
41.10%
37.40%
Land and indefinite-lived intangibles
(12.10%)
(0.20%)
(16.90%)
Impairment of indefinite-lived trade names
(1.80%)
(6.00%)
(4.90%)
Loss disallowance
(0.00%)
(0.00%)
3.50%
Tax credits
(0.40%)
(0.30%)
(0.70%)
Resolution of income tax matters
(0.80%)
(0.00%)
(0.30%)
Adjust foreign statutory rates
(1.00%)
0.10%
(0.30%)
Repatriation toll charge
1.80%
(0.00%)
(0.00%)
Tax benefit resulting from other comprehensive income allocation
(0.00%)
(2.90%)
(0.00%)
Other
0.20%
(1.10%)
0.40%
Effective Income Tax Rate, Continuing Operations
(61.00%)
(7.30%)
(18.60%)
$ in Millions
Deferred tax assets:
Federal benefit for state and foreign taxes
$ 117
$ 148
Accruals and other liabilities
142
135
Net operating loss carryforwards
1,736
2,255
Pension and postretirement benefit plans
972
1,244
Property and equipment
139
231
Deferred income
266
479
Credit carryforwards
899
875
Other
208
218
Total deferred tax assets
4,479
5,585
Valuation allowance
(4,187)
(5,519)
Net deferred tax assets
292
66
Deferred tax liabilities:
Trade names/Intangibles
285
573
Inventory
105
193
Other
28
43
Total deferred tax liabilities
418
809
Total deferred tax liabilities
$ (126)
$ (743)
1 Months Ended
3 Months Ended
12 Months Ended
Income Taxes [Line Items]
Blended income tax rate
33.717%
35.00%
35.00%
Net tax benefit, Tax Act
$ 470,000,000
$ 470,000,000
Corporate rate reduction, Tax Act
222,000,000
Valuation allowance release net tax benefit, Tax Act
270,000,000
Transition tax expense, Tax Act
11,000,000
Provisional transition tax obligation, Tax Act
6,000,000
6,000,000
Tax expense resulting from OCI allocation
$ 71,000,000
Tax benefit resulting from OCI allocation
0
71,000,000
$ 0
Increase (decrease) in valuation allowance
$ (500,000,000)
(1,300,000,000)
762,000,000
279,000,000
Valuation allowance increase in other comprehensive income
62,000,000
3,000,000
63,000,000
Valuation allowance
4,187,000,000
4,187,000,000
5,519,000,000
Net operating loss carryforwards
1,736,000,000
1,736,000,000
2,255,000,000
Credit carryforwards
899,000,000
899,000,000
Number of stores sold | property
5
Number of properties contributed to Joint Venture | Property
31
31
Tax benefit realized on deferred taxes related to indefinite-life assets sold to Seritage and JVs
$ 229,000,000
Taxable gain on sales of properties to Seritage and JVs
2,200,000,000
Income taxes payable on sale of properties to Seritage and JVs
0
Utilization of net operating loss attributes and corresponding release of valuation allowance
856,000,000
Taxes payable
$ 4,000,000
Unrecognized tax benefits
130,000,000
130,000,000
142,000,000
137,000,000
$ 131,000,000
Unrecognized tax benefits that would, if recognized, impact effective tax rate
103,000,000
103,000,000
Gross increases
20,000,000
12,000,000
14,000,000
Unrecognized tax benefits decrease resulting from Land's End spin-off and Sears Canada de-consolidation
12,000,000
Expected decrease in unrecognized tax benefits over the next 12 months
10,000,000
10,000,000
Interest and penalties recognized on balance sheet
51,000,000
51,000,000
61,000,000
Interest and penalties recognized, net of federal benefit
40,000,000
40,000,000
40,000,000
Net interest benefit (expense) recognized in statement of income
$ 6,000,000
$ (3,000,000)
$ (4,000,000)
Income tax examination
The U.S. Internal Revenue Service ("IRS") has completed its examination of all federal tax returns of Holdings through the 2009 return, and all matters arising from such examinations have been resolved. In addition, Holdings and Sears are under examination by various state, local and foreign income tax jurisdictions for the years 2003 through 2016, and Kmart is under examination by such jurisdictions for the years 2006 through 2016.
Seritage Growth Properties
Income Taxes [Line Items]
Number of stores sold | Property
235
Corporate Joint Venture
Income Taxes [Line Items]
Percentage of ownership interest
50.00%
50.00%
Minimum
Income Taxes [Line Items]
Unrecognized tax benefits
1,000,000
$ 1,000,000
Unrecognized tax benefits that would, if recognized, impact effective tax rate
1,000,000
1,000,000
Maximum
Income Taxes [Line Items]
Unrecognized tax benefits
14,000,000
14,000,000
Unrecognized tax benefits that would, if recognized, impact effective tax rate
$ 11,000,000
$ 11,000,000
Sears Mexico
Income Taxes [Line Items]
Proceeds from divestiture of businesses
$ 106,000,000
Gain on sale of investments
105,000,000
Current taxes payable
0
Valuation Allowance, Operating Loss Carryforwards
Income Taxes [Line Items]
Increase (decrease) in valuation allowance
$ (37,000,000)
Craftsman Brand
Income Taxes [Line Items]
Deferred taxes, business combination, income tax benefit realized
$ 101,000,000
Gain on disposition of business
963,000,000
Operating loss carryforward, amount used
361,000,000
Domestic Tax Authority | Craftsman Brand
Income Taxes [Line Items]
Taxes payable
0
State and Local Jurisdiction | Craftsman Brand
Income Taxes [Line Items]
Taxes payable
$ 4,000,000
$ in Millions12 Months Ended
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross UTB Balance at Beginning of Period
$ 142
$ 137
$ 131
Tax positions related to the current period:
Gross increases
20
12
14
Gross decreases
0
0
0
Tax positions related to prior periods:
Gross increases
0
0
0
Gross decreases
(26)
0
0
Settlements
(1)
0
0
Lapse of statute of limitations
(5)
(7)
(8)
Gross UTB Balance at End of Period
$ 130
$ 142
$ 137
$ in Millions
1 Months Ended
3 Months Ended
12 Months Ended
18 Months Ended
Long Lived Assets Held-for-sale
Gain on sales of assets
$ 1,648
$ 247
$ 743
Proceeds from sale-leaseback financing
[1]
106
71
508
Number of distinct real estate joint ventures | Joint_venture
3
Number of properties contributed to Joint Venture | Property
31
31
Real estate investments, joint ventures
$ 858
Number of stores sold | property
5
Leaseback transaction, number of stores | Property
255
Number of stores recaptured | store
19
Number of stores with lease terminated | store
56
Equity method investment, ownership percentage sold
50.00%
Amount due under financial arrangement
247
235
Aggregate net proceeds from sale-leaseback transaction and joint venture agreements
3,100
Net book value of sale leaseback transaction
$ 1,500
$ 1,500
$ 1,500
$ 1,500
Immediate net gain recognized
508
Deferred gain on sale-leaseback
$ 894
Agreement termination, minimum period of rent payment
1 year
Number of properties qualified for sale leaseback accounting | property
2
Future Minimum lease payments, sale leaseback transactions
$ 59
Future minimum lease payments, 2018
6
Future minimum lease payments, 2019
11
Future minimum lease payments, 2020
9
Future minimum lease payments, 2021
6
Future minimum lease payments, 2022
6
Future minimum lease payments, thereafter
21
Lease payment prepaid upon transaction closing
6
Current portion of deferred gain, net
138
132
Long-term portion of deferred gain
362
563
Rent expense
82
96
68
Kmart
Long Lived Assets Held-for-sale
Gain on sales of assets
881
181
185
Net book value of sale leaseback transaction
175
175
175
175
Immediate net gain recognized
137
Rent expense
9
15
9
Sears Domestic
Long Lived Assets Held-for-sale
Gain on sales of assets
767
66
558
Net book value of sale leaseback transaction
$ 1,300
1,300
$ 1,300
$ 1,300
Immediate net gain recognized
371
Real property assets of properties with continuing involvement
66
96
Rent expense
73
81
59
Seritage Growth Properties
Long Lived Assets Held-for-sale
Proceeds from sale-leaseback financing
82
Number of stores sold | Property
235
Aggregate proceeds from sale-leaseback transaction and rights offering of common stock and limited partnership units
2,700
2,700
Net proceeds from sale-leaseback transaction and rights offering of common stock and limited partnership units
2,600
2,600
Proceeds from rights offering of common shares and limited partnership units
1,600
Sale-leaseback transaction, aggregate value
2,300
Amount due under financial arrangement
70
Number of properties with continuing involvement
4
4
Related party transaction, termination payment expenses
24
21
Gain on sale of properties
40
48 Sears Full-line Stores and Two Non-Retail Locations | Sears Domestic
Long Lived Assets Held-for-sale
Gain from sale of real estate
544
Proceed from sale of real estate
$ 711
48 Sears Full-line Stores | Sears Domestic
Long Lived Assets Held-for-sale
Number of properties sold | Property
48
Four Sears Non-Retail Locations | Sears Domestic
Long Lived Assets Held-for-sale
Number of properties sold | store
4
41 Kmart Stores and Two Non-Retail Locations | Kmart
Long Lived Assets Held-for-sale
Gain from sale of real estate
$ 164
Proceed from sale of real estate
$ 190
41 Kmart Stores | Kmart
Long Lived Assets Held-for-sale
Number of properties sold | store
41
Two Kmart Non-Retail Locations | Kmart
Long Lived Assets Held-for-sale
Number of properties sold | store
2
Two Sears Full-line Stores | Sears Domestic
Long Lived Assets Held-for-sale
Gain from sale of real estate
$ 15
$ 86
Number of properties sold | Property
2
2
Proceed from sale of real estate
$ 27
$ 96
Distribution Facility | Sears Domestic
Long Lived Assets Held-for-sale
Gain from sale of real estate
$ 12
Number of properties sold | Property
1
Proceed from sale of real estate
$ 23
One Sears Full-line Store | Sears Domestic
Long Lived Assets Held-for-sale
Gain from sale of real estate
$ 83
Number of properties sold | Store
1
Proceed from sale of real estate
$ 12
$ 102
One Sears Full-line Store | Sale Leaseback Deferred Gain | Sears Domestic
Long Lived Assets Held-for-sale
Proceed from sale of real estate
$ 90
One Kmart Store | Kmart
Long Lived Assets Held-for-sale
Gain from sale of real estate
$ 10
$ 10
Number of properties sold | Property
1
1
Proceed from sale of real estate
$ 10
Esl Investments Inc | Seritage Growth Properties
Long Lived Assets Held-for-sale
Proceeds from rights offering of common shares and limited partnership units
745
$ 745
Fairholme | Seritage Growth Properties
Long Lived Assets Held-for-sale
Proceeds from rights offering of common shares and limited partnership units
$ 297
297
Seritage Growth Properties
Long Lived Assets Held-for-sale
Due to related parties
[2]
11
Rent expense
$ 70
83
49
Corporate Joint Venture
Long Lived Assets Held-for-sale
Proceeds from sale-leaseback financing
$ 426
426
Percentage of ownership interest
50.00%
50.00%
50.00%
50.00%
50.00%
Sale leaseback transaction, gross proceeds, financing activities
$ 429
$ 429
Amount due under financial arrangement
$ 426
Scenario, Forecast
Long Lived Assets Held-for-sale
Number of stores recaptured | store
11
Master Leases
Long Lived Assets Held-for-sale
Gain on sales of assets
$ 253
$ 72
Recapture right, percentage of property area
100.00%
Master Leases | Seritage Growth Properties
Long Lived Assets Held-for-sale
Recapture right, percentage of property area
50.00%
2016 Secured Loan Facility
Long Lived Assets Held-for-sale
Repayments of secured debt
$ 250
2017 Secured Loan Facility
Long Lived Assets Held-for-sale
Repayments of secured debt
116
Incremental Loans
Long Lived Assets Held-for-sale
Repayments of secured debt
55
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Craftsman Brand
Long Lived Assets Held-for-sale
Gain on sales of assets
$ 492
[1]
Holdings received cash proceeds of $2.7 billion ($2.6 billion, net of closing costs) from the Seritage transaction (including $745 million and $297 million, respectively, received from ESL Investments, Inc. and its affiliates ("ESL") and Fairholme Capital Management, LLC and its affiliates ("Fairholme")), and $429 million ($426 million, net of closing costs) from the JV transactions. Proceeds from the Seritage transaction are included in proceeds from sales of property and investments ($2.6 billion), and proceeds from sale-leaseback financing ($82 million) for 2015. Proceeds from the JV transactions are included in proceeds from sale-leaseback financing ($426 million) for 2015. See Note 11 for further information and defined terms.
[2]
Includes $28 million and $81 million at February 3, 2018 and January 28, 2017, respectively, of net amounts receivable from SHO, $1 million and $14 million of amounts receivable from Seritage at February 3, 2018 and January 28, 2017, respectively, and $1 million of net amounts receivable from Lands' End at February 3, 2018.
$ in Millions12 Months Ended
Sale Leaseback Transaction [Line Items]
Gain
$ 625
Loss
(117)
Immediate Net Gain
508
Kmart
Sale Leaseback Transaction [Line Items]
Gain
154
Loss
(17)
Immediate Net Gain
137
Sears Domestic
Sale Leaseback Transaction [Line Items]
Gain
471
Loss
(100)
Immediate Net Gain
$ 371
$ in Millions12 Months Ended
Sale Leaseback Transaction [Line Items]
Straight-line rent expense
$ 160
$ 184
$ 120
Amortization of deferred gain on sale-leaseback
(78)
(88)
(52)
Rent expense
82
96
68
Kmart
Sale Leaseback Transaction [Line Items]
Straight-line rent expense
20
32
20
Amortization of deferred gain on sale-leaseback
(11)
(17)
(11)
Rent expense
9
15
9
Sears Domestic
Sale Leaseback Transaction [Line Items]
Straight-line rent expense
140
152
100
Amortization of deferred gain on sale-leaseback
(67)
(71)
(41)
Rent expense
$ 73
$ 81
$ 59
$ in Millions
Schedule of Finite and Indefinite-Lived Assets [Line Items]
Gross Carrying Amount
$ 1,212
$ 1,573
Accumulated Amortization
44
52
Favorable lease rights | Amortizable Intangible Assets
Schedule of Finite and Indefinite-Lived Assets [Line Items]
Gross Carrying Amount
121
143
Accumulated Amortization
44
52
Trade names | Non Amortizable Intangible Assets
Schedule of Finite and Indefinite-Lived Assets [Line Items]
Gross Carrying Amount
$ 1,091
$ 1,430
$ in Millions12 Months Ended
Goodwill and Intangible Assets Disclosure [Abstract]
Annual Amortization Expense
$ 4
$ 5
$ 7
Estimated Amortization
2018
3
2019
3
2020
3
2021
3
2022
3
Thereafter
$ 56
$ in Millions12 Months Ended
Goodwill [Line Items]
Goodwill
$ 269
$ 269
Trade names and other intangible assets
1,168
1,521
Sears Domestic
Goodwill [Line Items]
Goodwill
269
269
Impairment of indefinite-lived intangible assets
72
381
$ 180
Trade names and other intangible assets
$ 359
$ 431
$ in Millions12 Months Ended
Restructuring Cost and Reserve [Line Items]
Number of stores closed
435
Number of stores announced for closure
103
Expected restructuring and related costs | $
$ 55
Kmart
Restructuring Cost and Reserve [Line Items]
Number of stores closed
303
206
38
Number of stores announced for closure
66
Sears Domestic
Restructuring Cost and Reserve [Line Items]
Number of stores closed
123
37
12
Number of stores announced for closure
40
Number of supply chain distribution centers closed
1
$ in Millions12 Months Ended
Restructuring Cost and Reserve [Line Items]
Stores closing costs
$ 502
$ 404
$ 101
Kmart
Restructuring Cost and Reserve [Line Items]
Stores closing costs
300
331
87
Sears Domestic
Restructuring Cost and Reserve [Line Items]
Stores closing costs
202
73
14
Markdowns
Restructuring Cost and Reserve [Line Items]
Stores closing costs
227
226
44
Markdowns | Kmart
Restructuring Cost and Reserve [Line Items]
Stores closing costs
154
187
39
Markdowns | Sears Domestic
Restructuring Cost and Reserve [Line Items]
Stores closing costs
73
39
5
Severance Costs
Restructuring Cost and Reserve [Line Items]
Stores closing costs
83
41
37
Severance Costs | Kmart
Restructuring Cost and Reserve [Line Items]
Stores closing costs
25
28
16
Severance Costs | Sears Domestic
Restructuring Cost and Reserve [Line Items]
Stores closing costs
58
13
21
Lease Termination Costs
Restructuring Cost and Reserve [Line Items]
Stores closing costs
120
76
6
Lease Termination Costs | Kmart
Restructuring Cost and Reserve [Line Items]
Stores closing costs
80
71
21
Lease Termination Costs | Sears Domestic
Restructuring Cost and Reserve [Line Items]
Stores closing costs
40
5
(15)
Other Charges
Restructuring Cost and Reserve [Line Items]
Stores closing costs
32
41
11
Other Charges | Kmart
Restructuring Cost and Reserve [Line Items]
Stores closing costs
22
32
10
Other Charges | Sears Domestic
Restructuring Cost and Reserve [Line Items]
Stores closing costs
10
9
1
Impairment and Accelerated Depreciation
Restructuring Cost and Reserve [Line Items]
Stores closing costs
40
20
3
Impairment and Accelerated Depreciation | Kmart
Restructuring Cost and Reserve [Line Items]
Stores closing costs
19
13
1
Impairment and Accelerated Depreciation | Sears Domestic
Restructuring Cost and Reserve [Line Items]
Stores closing costs
$ 21
$ 7
$ 2
$ in Millions12 Months Ended
Restructuring Reserve [Roll Forward]
Beginning Balance
$ 216
$ 180
Store closing costs
277
167
Store closing capital lease obligations
33
Payments/utilizations/other
(265)
(131)
Ending Balance
261
216
Severance Costs
Restructuring Reserve [Roll Forward]
Beginning Balance
54
58
Store closing costs
83
41
Store closing capital lease obligations
0
Payments/utilizations/other
(88)
(45)
Ending Balance
49
54
Lease Termination Costs
Restructuring Reserve [Roll Forward]
Beginning Balance
144
114
Store closing costs
162
85
Store closing capital lease obligations
33
Payments/utilizations/other
(139)
(55)
Ending Balance
200
144
Other Charges
Restructuring Reserve [Roll Forward]
Beginning Balance
18
8
Store closing costs
32
41
Store closing capital lease obligations
0
Payments/utilizations/other
(38)
(31)
Ending Balance
12
18
Other Current Liabilities
Restructuring Reserve [Roll Forward]
Beginning Balance
122
81
Ending Balance
126
122
Other Noncurrent Liabilities
Restructuring Reserve [Roll Forward]
Beginning Balance
94
99
Ending Balance
$ 135
$ 94
$ in Millions12 Months Ended
Property, Plant and Equipment [Line Items]
Impairment charges
$ 70
$ 46
$ 94
Kmart
Property, Plant and Equipment [Line Items]
Impairment charges
16
22
14
Sears Domestic
Property, Plant and Equipment [Line Items]
Impairment charges
$ 54
$ 24
$ 80
$ in Millions12 Months Ended
Leases [Abstract]
Minimum rentals
$ 666
$ 739
$ 713
Percentage rentals
5
7
8
Less-Sublease rentals
(43)
(51)
(46)
Less-Amortization of deferred gain on sale-leaseback
(78)
(88)
(52)
Total
$ 550
$ 607
$ 623
$ in Millions
Leases [Abstract]
Weighted average interest rate
4.90%
Capital
2018
$ 28
2019
15
2020
6
2021
4
2022
4
Later years
58
Total minimum lease payments
115
Estimated executory costs
(4)
Interest at a weighted average rate of 4.9%
(39)
Capital lease obligations
72
$ 145
Less current portion of capital lease obligations
(22)
Long-term capital lease obligations
50
Operating
2018
537
2019
439
2020
368
2021
297
2022
237
Later years
961
Total minimum lease payments
2,839
Less minimum sublease income
(92)
Net minimum lease payments
$ 2,747
1 Months Ended
12 Months Ended
Related Party Transaction
Cash interest paid
[1]
$ 412,000,000
$ 275,000,000
$ 252,000,000
Proceeds from debt issuances
[2]
1,020,000,000
2,028,000,000
0
Additional borrowing capacity under accordion feature
1,000,000,000
Number of warrants to purchase shares (in shares) | shares
22,000,000
Prepaid expenses and other current assets
[3]
335,000,000
285,000,000
Rent expense
82,000,000
96,000,000
68,000,000
Amortization of deferred gain on sale-leaseback
78,000,000
88,000,000
52,000,000
Term Loan Facility
Related Party Transaction
Principal amount of debt
300,000,000
2017 Secured Loan Facility
Related Party Transaction
Repayments of secured debt
116,000,000
Incremental Loans
Related Party Transaction
Repayments of secured debt
55,000,000
2016 Secured Loan Facility
Related Party Transaction
Repayments of secured debt
250,000,000
Second Lien Term Loan
Related Party Transaction
Repayments of debt
$ 110,000,000
Senior Secured Note
Related Party Transaction
Stated interest rate on debt instrument
6.625%
6.625%
Principal amount of debt
$ 1,000
Repayments of debt
$ 936,000,000
Unsecured Senior Notes
Related Party Transaction
Stated interest rate on debt instrument
8.00%
8.00%
8.00%
Proceeds from debt issuances
$ 625,000,000
Senior unsecured notes
$ 625,000,000
Secured Debt | 2017 Secured Loan Facility
Related Party Transaction
Principal amount of debt
$ 500,000,000
$ 500,000,000
Repayments of secured debt
116,000,000
Proceeds from debt issuances
321,000,000
$ 179,000,000
Secured Debt | 2016 Secured Loan Facility
Related Party Transaction
Principal amount of debt
$ 500,000,000
$ 500,000,000
Repayments of secured debt
250,000,000
Proceeds from debt issuances
$ 250,000,000
$ 250,000,000
Secured Debt | Second Lien Term Loan
Related Party Transaction
Principal amount of debt
300,000,000
$ 300,000,000
Additional borrowing capacity under accordion feature
$ 500,000,000
Senior Secured Note | 2016 Term Loan
Related Party Transaction
Principal amount of debt
750,000,000
Esl Investments Inc
Related Party Transaction
Secured short-term loan
0
0
$ 400,000,000
Proceeds from lines of credit
480,000,000
Esl Investments Inc | Term Loan Facility
Related Party Transaction
Principal amount of debt
$ 300,000,000
Esl Investments Inc | Senior Secured Note
Related Party Transaction
Repayments of debt
165,000,000
Senior secured notes
20,000,000
11,000,000
Esl Investments Inc | Unsecured Senior Notes
Related Party Transaction
Subsidiary notes
3,000,000
Senior unsecured notes
$ 188,000,000
$ 188,000,000
Number of warrants to purchase shares (in shares) | shares
10,033,472
10,033,472
Esl Investments Inc | Secured Debt | Second Lien Term Loan
Related Party Transaction
Principal amount of debt
$ 300,000,000
Additional borrowing capacity under accordion feature
$ 500,000,000
Fairholme
Related Party Transaction
Number of mutual funds serviced by related party | mutual_fund
3
Fairholme | Senior Secured Note
Related Party Transaction
Repayments of debt
207,000,000
Senior secured notes
$ 46,000,000
Fairholme | Unsecured Senior Notes
Related Party Transaction
Subsidiary notes
$ 9,000,000
14,000,000
Senior unsecured notes
$ 336,000,000
$ 357,000,000
Number of warrants to purchase shares (in shares) | shares
5,768,185
6,713,725
Affiliated Entity
Related Party Transaction
Cash interest paid
$ 180,000,000
$ 94,000,000
[4]
83,000,000
[4]
Proceeds from lines of credit
610,000,000
Affiliated Entity | Senior Secured Note
Related Party Transaction
Repayments of debt
482,000,000
Affiliated Entity | Secured Loan Facility | 2017 Secured Loan Facility
Related Party Transaction
Repayments of secured debt
116,000,000
Affiliated Entity | Secured Loan Facility | 2016 Secured Loan Facility
Related Party Transaction
Principal amount of debt
126,000,000
216,000,000
Repayments of secured debt
$ 89,000,000
Affiliated Entity | Senior Secured Note | 2016 Term Loan
Related Party Transaction
Principal amount of debt
750,000,000
Proceeds from debt issuances
146,000,000
Trust for Benefit of Employees | Senior Secured Note | 2016 Term Loan
Related Party Transaction
Principal amount of debt
77,000,000
100,000,000
Proceeds from debt issuances
$ 100,000,000
Repayments of debt
24,000,000
JPP LLC and JPP II, LLC | Term Loan Facility
Related Party Transaction
Principal amount of debt
151,000,000
JPP LLC and JPP II, LLC | Secured Debt | 2017 Secured Loan Facility
Related Party Transaction
Principal amount of debt
384,000,000
500,000,000
JPP LLC and JPP II, LLC | Secured Debt | Second Lien Term Loan
Related Party Transaction
Principal amount of debt
300,000,000
300,000,000
JPP LLC and JPP II, LLC | Senior Secured Note | 2016 Term Loan
Related Party Transaction
Principal amount of debt
38,000,000
150,000,000
Repayments of debt
36,000,000
Lands' End, Inc.
Related Party Transaction
Net amount receivable due from affiliates
[5]
1,000,000
Due to related parties
(1,000,000)
Revenue from related parties
60,000,000
65,000,000
69,000,000
Call center services and commission expenses with related party
2,000,000
10,000,000
10,000,000
Sears Hometown and Outlet Stores, Inc.
Related Party Transaction
Net amount receivable due from affiliates
$ 28,000,000
81,000,000
Related party receivables, repayment term
10 days
Proceeds from sale of inventory and shared corporate services to affiliate
$ 1,000,000,000
1,200,000,000
1,500,000,000
Payments for commissions to affiliate
66,000,000
82,000,000
91,000,000
Seritage Growth Properties
Related Party Transaction
Net amount receivable due from affiliates
1,000,000
14,000,000
Due to related parties
[5]
(11,000,000)
Annual aggregate base rent under master lease
$ 134,000,000
Sale-leaseback transaction, minimum lease payment annual increase, percentage
2.00%
Rent expense
$ 70,000,000
83,000,000
49,000,000
Straight line rent
117,000,000
142,000,000
84,000,000
Amortization of deferred gain on sale-leaseback
47,000,000
59,000,000
35,000,000
Annual aggregate installment expenses under master lease, initial amount
70,000,000
Reconciled annual aggregate installment rxpenses under master lease
41,000,000
Installment expense
43,000,000
$ 64,000,000
$ 40,000,000
Seritage Growth Properties | Prepaid Expenses and Other Current Assets
Related Party Transaction
Prepaid expenses and other current assets
$ 6,000,000
Sears Hometown and Outlet Stores, Inc. | Esl Investments Inc
Related Party Transaction
Percentage of ownership in outstanding common stock
58.00%
Sears Holdings Corporation | Esl Investments Inc
Related Party Transaction
Percentage of ownership in outstanding common stock
49.00%
Common stock subject to be acquired upon the exercise of warrants, period
60 days
Sears Holdings Corporation | Fairholme
Related Party Transaction
Percentage of ownership in outstanding common stock
18.00%
Common stock subject to be acquired upon the exercise of warrants, period
60 days
SRAC Issued | Esl Investments Inc | Commercial Paper
Related Party Transaction
Weighted average maturity period on debt | Day
8
21
Cash interest paid
$ 3,000,000
Sears Canada | Esl Investments Inc
Related Party Transaction
Percentage of ownership in outstanding common stock
45.00%
Lands' End, Inc. | Esl Investments Inc
Related Party Transaction
Percentage of ownership in outstanding common stock
67.00%
Seritage Growth Properties | Esl Investments Inc
Related Party Transaction
Percentage of ownership in outstanding common stock
7.20%
Limited partnership interest acquired
43.50%
Seritage Growth Properties | Fairholme | Common Class A
Related Party Transaction
Percentage of ownership in outstanding common stock
11.00%
Seritage Growth Properties | Fairholme | Common Class C
Related Party Transaction
Percentage of ownership in outstanding common stock
100.00%
Standby Letters of Credit | Esl Investments Inc
Related Party Transaction
Letters of credit outstanding amount
$ 271,000,000
$ 200,000,000
Line of credit facility, cash collateral required
133,000,000
$ 204,000,000
Portion syndicated to unaffiliated third party lenders
$ 138,000,000
Commercial Paper | SRAC Issued | Esl Investments Inc
Related Party Transaction
Stated interest rate on debt instrument
8.22%
7.87%
Weighted average commercial paper outstanding
$ 28,000,000
$ 100,000,000
Commercial Paper | SRAC Issued | Esl Investments Inc | Maximum
Related Party Transaction
Due from related parties
160,000,000
Commercial Paper | SRAC Issued | Fairholme
Related Party Transaction
Weighted average maturity period on debt | Day
63
Stated interest rate on debt instrument
7.42%
Weighted average commercial paper outstanding
$ 1,000,000
Mr. Berkowitz | Second Lien Term Loan
Related Party Transaction
Repayments of debt
25,000,000
Mr. Berkowitz | Fairholme
Related Party Transaction
Proceeds from lines of credit
25,000,000
Mr. Tisch | Unsecured Senior Notes
Related Party Transaction
Senior unsecured notes
$ 10,000,000
$ 10,000,000
Number of warrants to purchase shares (in shares) | shares
136,272
136,272
Mr. Tisch | Director
Related Party Transaction
Proceeds from lines of credit
$ 20,000,000
Mr. Tisch | Sears Holdings Corporation | Director
Related Party Transaction
Percentage of ownership in outstanding common stock
3.00%
Notes Payable, Other Payables | Incremental Loans
Related Party Transaction
Stated interest rate on debt instrument
11.00%
Principal amount of debt
$ 200,000,000
Repayments of short-term debt
$ 55,000,000
Notes Payable, Other Payables | Affiliated Entity | Incremental Loans
Related Party Transaction
Repayments of short-term debt
55,000,000
Notes Payable, Other Payables | JPP LLC and JPP II, LLC | Incremental Loans
Related Party Transaction
Other short-term borrowings, gross
$ 145,000,000
[1]
Cash interest paid includes $180 million, $94 million and $83 million interest paid to related parties related to our borrowings in 2017, 2016 and 2015, respectively. See Notes 3 and 15 for further information.
[2]
Proceeds in 2017 and 2016, respectively, include amounts from related parties of $876 million in connection with the Term Loan Facility, Line of Credit Loans and Incremental Loans and $1.3 billion received from the 2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan and Second Lien Term Loan. See Notes 3 and 15 for further information and defined terms.
[3]
Includes $6 million of prepaid rent to Seritage at February 3, 2018.
[4]
Includes one-time extension fees equal to $5 million to JPP, LLC and JPP II, LLC, entities affiliated with ESL during 2017. See Note 3 for further information.
[5]
Includes $28 million and $81 million at February 3, 2018 and January 28, 2017, respectively, of net amounts receivable from SHO, $1 million and $14 million of amounts receivable from Seritage at February 3, 2018 and January 28, 2017, respectively, and $1 million of net amounts receivable from Lands' End at February 3, 2018.
$ in Millions
Supplemental Financial Information [Abstract]
Unearned revenues
$ 539
$ 639
Self-insurance reserves
491
535
Other
437
467
Total
$ 1,467
$ 1,641
$ in Millions12 Months Ended
Movement in Deferred Revenue [Roll Forward]
Deferred revenue, beginning balance
$ 1,299
$ 1,405
Sales of service contracts
691
855
Revenue recognized on existing service contracts
(876)
(961)
Deferred revenue, ending balance
$ 1,114
$ 1,299
Minimum
Deferred Revenue Arrangement [Line Items]
Maintenance contracts, term
12 months
Maximum
Deferred Revenue Arrangement [Line Items]
Maintenance contracts, term
144 months
$ in Millions3 Months Ended
12 Months Ended
Merchandise sales
Merchandise sales
$ 13,409
$ 18,236
$ 20,936
Services and other
Services and other
[1],[2]
3,293
3,902
4,210
Total revenues
$ 4,376
$ 3,660
$ 4,365
$ 4,301
$ 6,052
$ 5,029
$ 5,663
$ 5,394
16,702
22,138
25,146
COSTS AND EXPENSES
Cost of sales, buying and occupancy - merchandise sales
[3]
11,349
15,184
16,817
Cost of sales and occupancy - services and other
[1]
1,826
2,268
2,519
Total cost of sales, buying and occupancy
3,452
2,958
3,394
3,371
4,765
4,067
4,403
4,217
13,175
17,452
19,336
Selling and administrative
1,156
$ 1,339
$ 1,369
$ 1,267
1,579
$ 1,543
$ 1,484
$ 1,503
5,131
6,109
6,857
Depreciation and amortization
332
375
422
Impairment charges
142
427
274
Gain on sales of assets
(1,648)
(247)
(743)
Total costs and expenses
17,132
24,116
26,146
Operating income (loss)
(430)
(1,978)
(1,000)
Total assets
7,262
9,362
7,262
9,362
11,337
Capital expenditures
80
142
211
Hardlines
Merchandise sales
Merchandise sales
7,206
9,571
10,851
Apparel and Soft Home
Merchandise sales
Merchandise sales
4,278
5,566
6,341
Food and Drug
Merchandise sales
Merchandise sales
1,925
3,099
3,744
Services
Services and other
Services and other
1,815
2,110
2,140
Other
Services and other
Services and other
1,478
1,792
2,070
Kmart
Merchandise sales
Merchandise sales
5,564
8,577
10,105
Services and other
Services and other
54
73
83
Total revenues
5,618
8,650
10,188
COSTS AND EXPENSES
Cost of sales, buying and occupancy - merchandise sales
4,592
7,075
8,023
Cost of sales and occupancy - services and other
9
18
19
Total cost of sales, buying and occupancy
4,601
7,093
8,042
Selling and administrative
1,455
2,175
2,537
Depreciation and amortization
60
71
72
Impairment charges
16
22
14
Gain on sales of assets
(881)
(181)
(185)
Total costs and expenses
5,251
9,180
10,480
Operating income (loss)
367
(530)
(292)
Total assets
1,576
2,134
1,576
2,134
3,059
Capital expenditures
18
43
42
Kmart | Hardlines
Merchandise sales
Merchandise sales
1,550
2,445
2,936
Kmart | Apparel and Soft Home
Merchandise sales
Merchandise sales
2,096
3,044
3,434
Kmart | Food and Drug
Merchandise sales
Merchandise sales
1,918
3,088
3,735
Kmart | Services
Services and other
Services and other
4
9
13
Kmart | Other
Services and other
Services and other
50
64
70
Sears Domestic
Merchandise sales
Merchandise sales
7,845
9,659
10,831
Services and other
Services and other
3,239
3,829
4,127
Total revenues
11,084
13,488
14,958
COSTS AND EXPENSES
Cost of sales, buying and occupancy - merchandise sales
6,757
8,109
8,794
Cost of sales and occupancy - services and other
1,817
2,250
2,500
Total cost of sales, buying and occupancy
8,574
10,359
11,294
Selling and administrative
3,676
3,934
4,320
Depreciation and amortization
272
304
350
Impairment charges
126
405
260
Gain on sales of assets
(767)
(66)
(558)
Total costs and expenses
11,881
14,936
15,666
Operating income (loss)
(797)
(1,448)
(708)
Total assets
$ 5,686
$ 7,228
5,686
7,228
8,278
Capital expenditures
62
99
169
Sears Domestic | Hardlines
Merchandise sales
Merchandise sales
5,656
7,126
7,915
Sears Domestic | Apparel and Soft Home
Merchandise sales
Merchandise sales
2,182
2,522
2,907
Sears Domestic | Food and Drug
Merchandise sales
Merchandise sales
7
11
9
Sears Domestic | Services
Services and other
Services and other
1,811
2,101
2,127
Sears Domestic | Other
Services and other
Services and other
$ 1,428
$ 1,728
$ 2,000
[1]
Includes merchandise sales to Sears Hometown and Outlet Stores, Inc. ("SHO") of $918 million, $1.1 billion and $1.3 billion in 2017, 2016 and 2015, respectively. Pursuant to the terms of the separation, merchandise is sold to SHO at cost.
[2]
Includes revenue from Lands' End, Inc. ("Lands' End") for retail services and rent for Lands' End Shops at Sears, participation in the Shop Your Way program and corporate shared services of $47 million, $52 million and $59 million in 2017, 2016 and 2015, respectively.
[3]
Includes rent expense (consisting of straight-line rent expense offset by amortization of a deferred gain on sale-leaseback) of $70 million, $83 million and $49 million in 2017, 2016, and 2015, respectively, and installment expenses of $43 million, $64 million and $40 million in 2017, 2016 and 2015, respectively, pursuant to the master lease with Seritage Growth Properties ("Seritage").
$ / shares in Units, $ in Millions3 Months Ended
12 Months Ended
Quarterly Financial Information Disclosure [Abstract]
Revenues
$ 4,376
$ 3,660
$ 4,365
$ 4,301
$ 6,052
$ 5,029
$ 5,663
$ 5,394
$ 16,702
$ 22,138
$ 25,146
Cost of sales, buying and occupancy
3,452
2,958
3,394
3,371
4,765
4,067
4,403
4,217
13,175
17,452
19,336
Selling and administrative
1,156
1,339
1,369
1,267
1,579
1,543
1,484
1,503
5,131
6,109
6,857
Net income (loss) attributable to Holdings' shareholders
$ 182
$ (558)
$ (251)
$ 244
$ (607)
$ (748)
$ (395)
$ (471)
$ (383)
$ (2,221)
$ (1,129)
Basic net income (loss) per share attributable to Holdings' shareholders (in USD per share)
$ 1.69
$ (5.19)
$ (2.34)
$ 2.28
$ (5.67)
$ (6.99)
$ (3.70)
$ (4.41)
$ (3.57)
$ (20.78)
$ (10.59)
Diluted net income (loss) per share attributable to Holdings' shareholders (in USD per share)
$ 1.69
$ (5.19)
$ (2.34)
$ 2.28
$ (5.67)
$ (6.99)
$ (3.70)
$ (4.41)
$ (3.57)
$ (20.78)
$ (10.59)
Segment Reporting Information [Line Items]
Gain on sales of assets
$ 1,648
$ 247
$ 743
Net tax benefit, Tax Act
$ 470
470
Sears Domestic
Quarterly Financial Information Disclosure [Abstract]
Revenues
11,084
13,488
14,958
Cost of sales, buying and occupancy
8,574
10,359
11,294
Selling and administrative
3,676
3,934
4,320
Segment Reporting Information [Line Items]
Gain on sales of assets
767
66
558
Impairment of indefinite-lived intangible assets
72
$ 381
$ 180
Craftsman Brand | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Segment Reporting Information [Line Items]
Gain on sales of assets
$ 492
$ in Millions12 Months Ended
Condensed Financial Statements, Captions [Line Items]
Carrying amount, long-term debt
$ 3,217
$ 4,163
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Percentage of collateralized ownership of domestic subsidiaries
100.00%
Old Senior Secured Notes
Condensed Financial Statements, Captions [Line Items]
Maturity year of debt
2018
Carrying amount, long-term debt
$ 303
$ 303
Stated interest rate on debt instrument
6.625%
6.625%
Current assets
Cash and cash equivalents
$ 182,000,000
$ 286,000,000
Restricted cash
154,000,000
0
Intercompany receivables
0
0
Accounts receivable
[1]
343,000,000
466,000,000
Merchandise inventories
2,798,000,000
3,959,000,000
Prepaid expenses and other current assets
[2]
335,000,000
285,000,000
Total current assets
3,812,000,000
4,996,000,000
Total property and equipment, net
1,729,000,000
2,240,000,000
Goodwill and intangible assets
1,437,000,000
1,790,000,000
Other assets
284,000,000
336,000,000
Investment in subsidiaries
0
0
TOTAL ASSETS
7,262,000,000
9,362,000,000
$ 11,337,000,000
Current liabilities
Short-term borrowings
[3]
915,000,000
0
Current portion of long-term debt and capitalized lease obligations
[4]
968,000,000
590,000,000
Merchandise payables
576,000,000
1,048,000,000
Intercompany payables
0
0
Other current liabilities
2,456,000,000
3,043,000,000
Total current liabilities
4,915,000,000
4,681,000,000
Long-term debt and capitalized lease obligations
[5]
2,249,000,000
3,573,000,000
Pension and postretirement benefits
1,619,000,000
1,750,000,000
Deferred gain on sale-leaseback
362,000,000
563,000,000
Sale-leaseback financing obligation
247,000,000
235,000,000
Long-term deferred tax liabilities
126,000,000
743,000,000
Other long-term liabilities
1,467,000,000
1,641,000,000
Total Liabilities
10,985,000,000
13,186,000,000
EQUITY (DEFICIT)
Shareholder's equity (deficit)
(3,723,000,000)
(3,824,000,000)
Total Deficit
(3,723,000,000)
(3,824,000,000)
$ (1,956,000,000)
$ (945,000,000)
TOTAL LIABILITIES AND DEFICIT
7,262,000,000
9,362,000,000
Eliminations
Current assets
Cash and cash equivalents
0
0
Restricted cash
0
Intercompany receivables
(27,993,000,000)
(27,415,000,000)
Accounts receivable
0
Merchandise inventories
0
0
Prepaid expenses and other current assets
(1,351,000,000)
(1,286,000,000)
Total current assets
(29,344,000,000)
(28,701,000,000)
Total property and equipment, net
0
0
Goodwill and intangible assets
(98,000,000)
(98,000,000)
Other assets
(2,385,000,000)
(884,000,000)
Investment in subsidiaries
(36,542,000,000)
(35,813,000,000)
TOTAL ASSETS
(68,369,000,000)
(65,496,000,000)
Current liabilities
Short-term borrowings
(166,000,000)
(108,000,000)
Current portion of long-term debt and capitalized lease obligations
(232,000,000)
(599,000,000)
Merchandise payables
0
0
Intercompany payables
(27,993,000,000)
(27,415,000,000)
Other current liabilities
(949,000,000)
(672,000,000)
Total current liabilities
(29,340,000,000)
(28,794,000,000)
Long-term debt and capitalized lease obligations
(2,476,000,000)
(802,000,000)
Pension and postretirement benefits
0
0
Deferred gain on sale-leaseback
0
0
Sale-leaseback financing obligation
0
0
Long-term deferred tax liabilities
(223,000,000)
(29,000,000)
Other long-term liabilities
(178,000,000)
(205,000,000)
Total Liabilities
(32,217,000,000)
(29,830,000,000)
EQUITY (DEFICIT)
Shareholder's equity (deficit)
(36,152,000,000)
(35,666,000,000)
Total Deficit
(36,152,000,000)
(35,666,000,000)
TOTAL LIABILITIES AND DEFICIT
(68,369,000,000)
(65,496,000,000)
Parent | Reportable Legal Entities
Current assets
Cash and cash equivalents
0
0
Restricted cash
154,000,000
Intercompany receivables
0
0
Accounts receivable
0
0
Merchandise inventories
0
0
Prepaid expenses and other current assets
309,000,000
23,000,000
Total current assets
463,000,000
23,000,000
Total property and equipment, net
0
0
Goodwill and intangible assets
0
0
Other assets
179,000,000
4,000,000
Investment in subsidiaries
8,790,000,000
9,110,000,000
TOTAL ASSETS
9,432,000,000
9,137,000,000
Current liabilities
Short-term borrowings
144,000,000
0
Current portion of long-term debt and capitalized lease obligations
303,000,000
0
Merchandise payables
0
0
Intercompany payables
11,099,000,000
11,830,000,000
Other current liabilities
16,000,000
17,000,000
Total current liabilities
11,562,000,000
11,847,000,000
Long-term debt and capitalized lease obligations
1,991,000,000
1,215,000,000
Pension and postretirement benefits
0
0
Deferred gain on sale-leaseback
0
0
Sale-leaseback financing obligation
0
0
Long-term deferred tax liabilities
0
48,000,000
Other long-term liabilities
0
0
Total Liabilities
13,553,000,000
13,110,000,000
EQUITY (DEFICIT)
Shareholder's equity (deficit)
(4,121,000,000)
(3,973,000,000)
Total Deficit
(4,121,000,000)
(3,973,000,000)
TOTAL LIABILITIES AND DEFICIT
9,432,000,000
9,137,000,000
Guarantor Subsidiaries | Reportable Legal Entities
Current assets
Cash and cash equivalents
152,000,000
260,000,000
Restricted cash
0
Intercompany receivables
0
0
Accounts receivable
322,000,000
441,000,000
Merchandise inventories
2,798,000,000
3,959,000,000
Prepaid expenses and other current assets
899,000,000
692,000,000
Total current assets
4,171,000,000
5,352,000,000
Total property and equipment, net
1,043,000,000
1,504,000,000
Goodwill and intangible assets
346,000,000
360,000,000
Other assets
1,331,000,000
285,000,000
Investment in subsidiaries
27,752,000,000
26,703,000,000
TOTAL ASSETS
34,643,000,000
34,204,000,000
Current liabilities
Short-term borrowings
937,000,000
108,000,000
Current portion of long-term debt and capitalized lease obligations
897,000,000
1,189,000,000
Merchandise payables
576,000,000
1,048,000,000
Intercompany payables
16,894,000,000
15,585,000,000
Other current liabilities
1,941,000,000
2,479,000,000
Total current liabilities
21,245,000,000
20,409,000,000
Long-term debt and capitalized lease obligations
2,734,000,000
3,160,000,000
Pension and postretirement benefits
1,616,000,000
1,746,000,000
Deferred gain on sale-leaseback
360,000,000
563,000,000
Sale-leaseback financing obligation
158,000,000
235,000,000
Long-term deferred tax liabilities
0
0
Other long-term liabilities
1,131,000,000
808,000,000
Total Liabilities
27,244,000,000
26,921,000,000
EQUITY (DEFICIT)
Shareholder's equity (deficit)
7,399,000,000
7,283,000,000
Total Deficit
7,399,000,000
7,283,000,000
TOTAL LIABILITIES AND DEFICIT
34,643,000,000
34,204,000,000
Non-Guarantor Subsidiaries | Reportable Legal Entities
Current assets
Cash and cash equivalents
30,000,000
26,000,000
Restricted cash
0
Intercompany receivables
27,993,000,000
27,415,000,000
Accounts receivable
21,000,000
25,000,000
Merchandise inventories
0
0
Prepaid expenses and other current assets
478,000,000
856,000,000
Total current assets
28,522,000,000
28,322,000,000
Total property and equipment, net
686,000,000
736,000,000
Goodwill and intangible assets
1,189,000,000
1,528,000,000
Other assets
1,159,000,000
931,000,000
Investment in subsidiaries
0
0
TOTAL ASSETS
31,556,000,000
31,517,000,000
Current liabilities
Short-term borrowings
0
0
Current portion of long-term debt and capitalized lease obligations
0
0
Merchandise payables
0
0
Intercompany payables
0
0
Other current liabilities
1,448,000,000
1,219,000,000
Total current liabilities
1,448,000,000
1,219,000,000
Long-term debt and capitalized lease obligations
0
0
Pension and postretirement benefits
3,000,000
4,000,000
Deferred gain on sale-leaseback
2,000,000
0
Sale-leaseback financing obligation
89,000,000
0
Long-term deferred tax liabilities
349,000,000
724,000,000
Other long-term liabilities
514,000,000
1,038,000,000
Total Liabilities
2,405,000,000
2,985,000,000
EQUITY (DEFICIT)
Shareholder's equity (deficit)
29,151,000,000
28,532,000,000
Total Deficit
29,151,000,000
28,532,000,000
TOTAL LIABILITIES AND DEFICIT
$ 31,556,000,000
$ 31,517,000,000
[1]
Includes $28 million and $81 million at February 3, 2018 and January 28, 2017, respectively, of net amounts receivable from SHO, $1 million and $14 million of amounts receivable from Seritage at February 3, 2018 and January 28, 2017, respectively, and $1 million of net amounts receivable from Lands' End at February 3, 2018.
[2]
Includes $6 million of prepaid rent to Seritage at February 3, 2018.
[3]
Includes balances held by related parties of $645 million at February 3, 2018 related to our Line of Credit Loans and Incremental Loans (each as defined in Note 3). See Notes 3 and 15 for further information.
[4]
Includes balances held by related parties of $146 million and $216 million at February 3, 2018 and January 28, 2017, respectively, related to our 2016 Secured Loan Facility for both periods and also related to our Senior Secured Notes at February 3, 2018. See Note 3 for defined terms.
[5]
Includes balances held by related parties of $1.5 billion and $1.7 billion at February 3, 2018 and January 28, 2017, respectively, related to our Subsidiary Notes, Senior Unsecured Notes, Second Lien Term Loan, 2016 Term Loan and 2017 Secured Loan Facility for both periods and also related to our Term Loan Facility at February 3, 2018 and our Senior Secured Notes at January 28, 2017. See Note 3 for defined terms and Notes 3 and 15 for further information.
$ in Millions3 Months Ended
12 Months Ended
Condensed Financial Statements, Captions [Line Items]
Merchandise sales
$ 13,409
$ 18,236
$ 20,936
Services and other
[1],[2]
3,293
3,902
4,210
Total revenues
$ 4,376
$ 3,660
$ 4,365
$ 4,301
$ 6,052
$ 5,029
$ 5,663
$ 5,394
16,702
22,138
25,146
Cost of sales, buying and occupancy - merchandise sales
[3]
11,349
15,184
16,817
Cost of sales and occupancy - services and other
[1]
1,826
2,268
2,519
Total cost of sales, buying and occupancy
3,452
2,958
3,394
3,371
4,765
4,067
4,403
4,217
13,175
17,452
19,336
Selling and administrative
1,156
1,339
1,369
1,267
1,579
1,543
1,484
1,503
5,131
6,109
6,857
Depreciation and amortization
332
375
422
Impairment charges
142
427
274
Gain on sales of assets
(1,648)
(247)
(743)
Total costs and expenses
17,132
24,116
26,146
Operating income (loss)
(430)
(1,978)
(1,000)
Interest expense
(539)
(404)
(323)
Interest and investment loss
(12)
(26)
(62)
Other income (loss)
0
13
0
Loss before income taxes
(981)
(2,395)
(1,385)
Income tax (expense) benefit
598
174
257
Equity (deficit) in earnings in subsidiaries
0
0
0
Net loss
(383)
(2,221)
(1,128)
(Income) loss attributable to noncontrolling interests
0
0
(1)
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
$ 182
$ (558)
$ (251)
$ 244
$ (607)
$ (748)
$ (395)
$ (471)
(383)
(2,221)
(1,129)
Eliminations
Condensed Financial Statements, Captions [Line Items]
Merchandise sales
34
18
11
Services and other
(2,293)
(2,879)
(2,990)
Total revenues
(2,259)
(2,861)
(2,979)
Cost of sales, buying and occupancy - merchandise sales
111
80
68
Cost of sales and occupancy - services and other
(1,278)
(1,612)
(1,682)
Total cost of sales, buying and occupancy
(1,167)
(1,532)
(1,614)
Selling and administrative
(1,092)
(1,329)
(1,365)
Depreciation and amortization
0
0
0
Impairment charges
0
0
0
Gain on sales of assets
0
98
0
Total costs and expenses
(2,259)
(2,763)
(2,979)
Operating income (loss)
0
(98)
0
Interest expense
1,074
639
506
Interest and investment loss
(664)
(639)
(506)
Other income (loss)
217
Loss before income taxes
410
119
0
Income tax (expense) benefit
0
0
0
Equity (deficit) in earnings in subsidiaries
522
2,005
798
Net loss
932
2,124
798
(Income) loss attributable to noncontrolling interests
(1)
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
932
2,124
797
Parent | Reportable Legal Entities
Condensed Financial Statements, Captions [Line Items]
Merchandise sales
0
0
0
Services and other
0
0
0
Total revenues
0
0
0
Cost of sales, buying and occupancy - merchandise sales
1
0
0
Cost of sales and occupancy - services and other
0
0
0
Total cost of sales, buying and occupancy
1
0
0
Selling and administrative
(27)
6
3
Depreciation and amortization
0
0
0
Impairment charges
0
0
0
Gain on sales of assets
(486)
0
0
Total costs and expenses
(512)
6
3
Operating income (loss)
512
(6)
(3)
Interest expense
(600)
(385)
(265)
Interest and investment loss
45
20
(19)
Other income (loss)
13
Loss before income taxes
(43)
(358)
(287)
Income tax (expense) benefit
232
28
115
Equity (deficit) in earnings in subsidiaries
(982)
(2,010)
(956)
Net loss
(793)
(2,340)
(1,128)
(Income) loss attributable to noncontrolling interests
0
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
(793)
(2,340)
(1,128)
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Financial Statements, Captions [Line Items]
Merchandise sales
13,375
18,218
20,925
Services and other
3,303
3,985
4,339
Total revenues
16,678
22,203
25,264
Cost of sales, buying and occupancy - merchandise sales
11,237
15,104
16,749
Cost of sales and occupancy - services and other
2,228
2,824
3,070
Total cost of sales, buying and occupancy
13,465
17,928
19,819
Selling and administrative
5,409
6,506
7,322
Depreciation and amortization
270
303
350
Impairment charges
70
46
94
Gain on sales of assets
(1,142)
(343)
(735)
Total costs and expenses
18,072
24,440
26,850
Operating income (loss)
(1,394)
(2,237)
(1,586)
Interest expense
(994)
(645)
(481)
Interest and investment loss
195
152
44
Other income (loss)
0
Loss before income taxes
(2,193)
(2,730)
(2,023)
Income tax (expense) benefit
765
529
480
Equity (deficit) in earnings in subsidiaries
460
5
158
Net loss
(968)
(2,196)
(1,385)
(Income) loss attributable to noncontrolling interests
0
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
(968)
(2,196)
(1,385)
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Financial Statements, Captions [Line Items]
Merchandise sales
0
0
0
Services and other
2,283
2,796
2,861
Total revenues
2,283
2,796
2,861
Cost of sales, buying and occupancy - merchandise sales
0
0
0
Cost of sales and occupancy - services and other
876
1,056
1,131
Total cost of sales, buying and occupancy
876
1,056
1,131
Selling and administrative
841
926
897
Depreciation and amortization
62
72
72
Impairment charges
72
381
180
Gain on sales of assets
(20)
(2)
(8)
Total costs and expenses
1,831
2,433
2,272
Operating income (loss)
452
363
589
Interest expense
(19)
(13)
(83)
Interest and investment loss
412
441
419
Other income (loss)
(217)
Loss before income taxes
845
574
925
Income tax (expense) benefit
(399)
(383)
(338)
Equity (deficit) in earnings in subsidiaries
0
0
0
Net loss
446
191
587
(Income) loss attributable to noncontrolling interests
0
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
$ 446
$ 191
$ 587
[1]
Includes merchandise sales to Sears Hometown and Outlet Stores, Inc. ("SHO") of $918 million, $1.1 billion and $1.3 billion in 2017, 2016 and 2015, respectively. Pursuant to the terms of the separation, merchandise is sold to SHO at cost.
[2]
Includes revenue from Lands' End, Inc. ("Lands' End") for retail services and rent for Lands' End Shops at Sears, participation in the Shop Your Way program and corporate shared services of $47 million, $52 million and $59 million in 2017, 2016 and 2015, respectively.
[3]
Includes rent expense (consisting of straight-line rent expense offset by amortization of a deferred gain on sale-leaseback) of $70 million, $83 million and $49 million in 2017, 2016, and 2015, respectively, and installment expenses of $43 million, $64 million and $40 million in 2017, 2016 and 2015, respectively, pursuant to the master lease with Seritage Growth Properties ("Seritage").
$ in Millions12 Months Ended
Condensed Financial Statements, Captions [Line Items]
Net income (loss)
$ (383)
$ (2,221)
$ (1,128)
Other comprehensive income (loss)
Pension and postretirement adjustments, net of tax
478
366
113
Dissolution of noncontrolling interest
0
(7)
0
Unrealized net gain, net of tax
0
0
0
Currency translation adjustments, net of tax
2
0
(1)
Total other comprehensive income
480
359
112
Comprehensive income (loss)
97
(1,862)
(1,016)
Comprehensive (income) loss attributable to noncontrolling interests
0
7
(1)
Comprehensive income (loss) attributable to Holdings' shareholders
97
(1,855)
(1,017)
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net income (loss)
932
2,124
798
Other comprehensive income (loss)
Pension and postretirement adjustments, net of tax
0
0
0
Dissolution of noncontrolling interest
0
Unrealized net gain, net of tax
(51)
(122)
68
Currency translation adjustments, net of tax
0
0
Total other comprehensive income
(51)
(122)
68
Comprehensive income (loss)
2,002
866
Comprehensive (income) loss attributable to noncontrolling interests
7
(1)
Comprehensive income (loss) attributable to Holdings' shareholders
881
2,009
865
Parent | Reportable Legal Entities
Condensed Financial Statements, Captions [Line Items]
Net income (loss)
(793)
(2,340)
(1,128)
Other comprehensive income (loss)
Pension and postretirement adjustments, net of tax
0
0
0
Dissolution of noncontrolling interest
0
Unrealized net gain, net of tax
6
0
0
Currency translation adjustments, net of tax
0
0
Total other comprehensive income
6
0
0
Comprehensive income (loss)
(2,340)
(1,128)
Comprehensive (income) loss attributable to noncontrolling interests
0
0
Comprehensive income (loss) attributable to Holdings' shareholders
(787)
(2,340)
(1,128)
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Financial Statements, Captions [Line Items]
Net income (loss)
(968)
(2,196)
(1,385)
Other comprehensive income (loss)
Pension and postretirement adjustments, net of tax
478
366
113
Dissolution of noncontrolling interest
0
Unrealized net gain, net of tax
0
0
(3)
Currency translation adjustments, net of tax
0
0
Total other comprehensive income
478
366
110
Comprehensive income (loss)
(1,830)
(1,275)
Comprehensive (income) loss attributable to noncontrolling interests
0
0
Comprehensive income (loss) attributable to Holdings' shareholders
(490)
(1,830)
(1,275)
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Financial Statements, Captions [Line Items]
Net income (loss)
446
191
587
Other comprehensive income (loss)
Pension and postretirement adjustments, net of tax
0
0
0
Dissolution of noncontrolling interest
(7)
Unrealized net gain, net of tax
45
122
(65)
Currency translation adjustments, net of tax
2
(1)
Total other comprehensive income
47
115
(66)
Comprehensive income (loss)
306
521
Comprehensive (income) loss attributable to noncontrolling interests
0
0
Comprehensive income (loss) attributable to Holdings' shareholders
$ 493
$ 306
$ 521
$ in Millions12 Months Ended
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities
$ (1,842)
$ (1,381)
$ (2,167)
Proceeds from sales of property and investments
[1]
1,109
386
2,730
Proceeds from Craftsman Sale
572
0
0
Proceeds from sales of receivables
[2]
293
0
0
Purchases of property and equipment
(80)
(142)
(211)
Net investing with Affiliates
0
0
0
Net cash provided by investing activities
1,894
244
2,519
Proceeds from debt issuances
[3]
1,020
2,028
0
Increase in short-term borrowings, primarily 90 days or less
[4]
(1,356)
(66)
(1,405)
Increase in short-term borrowings, primarily 90 days or less
271
(797)
583
Proceeds from sale-leaseback financing
[1]
106
71
508
Debt issuance costs
[5]
(43)
(51)
(50)
Intercompany dividend
0
0
0
Net borrowing with Affiliates
0
0
0
Net cash provided by (used in) financing activities
(2)
1,185
(364)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
50
48
(12)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR
286
238
250
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR
336
286
238
Reportable Legal Entities | Parent
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities
1
244
395
Proceeds from sales of property and investments
0
0
0
Proceeds from Craftsman Sale
572
Proceeds from sales of receivables
293
Purchases of property and equipment
0
0
0
Net investing with Affiliates
(934)
(239)
(395)
Net cash provided by investing activities
(69)
(239)
(395)
Proceeds from debt issuances
410
0
Increase in short-term borrowings, primarily 90 days or less
(171)
0
0
Increase in short-term borrowings, primarily 90 days or less
0
0
0
Proceeds from sale-leaseback financing
0
0
0
Debt issuance costs
(17)
(5)
0
Intercompany dividend
0
0
0
Net borrowing with Affiliates
0
0
0
Net cash provided by (used in) financing activities
222
(5)
0
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
154
0
0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR
0
0
0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR
154
0
0
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities
(2,404)
(2,137)
(3,021)
Proceeds from sales of property and investments
1,093
273
2,725
Proceeds from Craftsman Sale
0
Proceeds from sales of receivables
0
Purchases of property and equipment
(70)
(133)
(202)
Net investing with Affiliates
0
0
0
Net cash provided by investing activities
1,023
140
2,523
Proceeds from debt issuances
610
2,028
Increase in short-term borrowings, primarily 90 days or less
(1,185)
(65)
(1,403)
Increase in short-term borrowings, primarily 90 days or less
271
(797)
583
Proceeds from sale-leaseback financing
106
71
508
Debt issuance costs
(26)
(46)
(50)
Intercompany dividend
0
0
Net borrowing with Affiliates
1,497
866
841
Net cash provided by (used in) financing activities
1,273
2,057
479
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
(108)
60
(19)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR
260
200
219
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR
152
260
200
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities
682
820
938
Proceeds from sales of property and investments
16
113
5
Proceeds from Craftsman Sale
0
Proceeds from sales of receivables
0
Purchases of property and equipment
(10)
(9)
(9)
Net investing with Affiliates
(563)
(627)
(446)
Net cash provided by investing activities
(557)
(523)
(450)
Proceeds from debt issuances
0
0
Increase in short-term borrowings, primarily 90 days or less
0
(1)
(2)
Increase in short-term borrowings, primarily 90 days or less
0
0
0
Proceeds from sale-leaseback financing
0
0
0
Debt issuance costs
0
0
0
Intercompany dividend
(121)
(308)
(479)
Net borrowing with Affiliates
0
0
0
Net cash provided by (used in) financing activities
(121)
(309)
(481)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
4
(12)
7
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR
26
38
31
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR
30
26
38
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities
(121)
(308)
(479)
Proceeds from sales of property and investments
0
0
0
Proceeds from Craftsman Sale
0
Proceeds from sales of receivables
0
Purchases of property and equipment
0
0
0
Net investing with Affiliates
1,497
866
841
Net cash provided by investing activities
1,497
866
841
Proceeds from debt issuances
0
0
Increase in short-term borrowings, primarily 90 days or less
0
0
0
Increase in short-term borrowings, primarily 90 days or less
0
0
0
Proceeds from sale-leaseback financing
0
0
0
Debt issuance costs
0
0
0
Intercompany dividend
121
308
479
Net borrowing with Affiliates
(1,497)
(866)
(841)
Net cash provided by (used in) financing activities
(1,376)
(558)
(362)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
0
0
0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH BEGINNING OF YEAR
0
0
0
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF YEAR
$ 0
$ 0
$ 0
[1]
Holdings received cash proceeds of $2.7 billion ($2.6 billion, net of closing costs) from the Seritage transaction (including $745 million and $297 million, respectively, received from ESL Investments, Inc. and its affiliates ("ESL") and Fairholme Capital Management, LLC and its affiliates ("Fairholme")), and $429 million ($426 million, net of closing costs) from the JV transactions. Proceeds from the Seritage transaction are included in proceeds from sales of property and investments ($2.6 billion), and proceeds from sale-leaseback financing ($82 million) for 2015. Proceeds from the JV transactions are included in proceeds from sale-leaseback financing ($426 million) for 2015. See Note 11 for further information and defined terms.
[2]
Proceeds in 2017 include $63 million from JPP, LLC and JPP II, LLC, entities affiliated with ESL (as defined in Note 1), for the sale of receivables.
[3]
Proceeds in 2017 and 2016, respectively, include amounts from related parties of $876 million in connection with the Term Loan Facility, Line of Credit Loans and Incremental Loans and $1.3 billion received from the 2017 Secured Loan Facility, 2016 Secured Loan Facility, 2016 Term Loan and Second Lien Term Loan. See Notes 3 and 15 for further information and defined terms.
[4]
Repayments in 2017 and 2015, respectively, include $345 million to related parties in connection with the 2017 Secured Loan Facility, 2016 Secured Loan Facility, Incremental Loans, 2016 Term Loan and Line of Credit Loans and $400 million of the Secured Short-Term Loan with related parties and $482 million of Senior Secured Notes tendered by related parties, respectively. See Notes 3 and 15 for further information and defined terms.
[5]
Includes one-time extension fees equal to $5 million to JPP, LLC and JPP II, LLC, entities affiliated with ESL during 2017. See Note 3 for further information.
$ in Millions12 Months Ended
Allowance for Doubtful Accounts
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period
[1]
$ 37
$ 34
$ 25
Additions charged to costs and expenses
[1]
7
9
10
(Deductions)
[1]
(9)
(6)
(1)
Balance at end of period
[1]
35
37
34
Allowance of Deferred Tax Assets
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period
[2]
5,519
4,757
4,478
Additions charged to costs and expenses
[2]
86
1,000
603
(Deductions)
[2]
(1,418)
(238)
(324)
Balance at end of period
[2]
$ 4,187
$ 5,519
$ 4,757
[1]
Charges to the account are for the purposes for which the reserves were created.
[2]
In 2017, the deferred tax assets and liabilities, along with the valuation allowance, decreased due to the reduction in the corporate income tax rate from 35% to 21% pursuant to the Tax Act. In addition, the pension liability and other federal and state deferred tax assets decreased during the year.
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