x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 3, 2013 |
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) |
Page | ||
PART I – FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II – OTHER INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 4. | ||
Item 6. |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions, except per share data | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
REVENUES | |||||||||||||||
Merchandise sales and services | $ | 8,871 | $ | 9,467 | $ | 17,323 | $ | 18,737 | |||||||
COSTS AND EXPENSES | |||||||||||||||
Cost of sales, buying and occupancy | 6,685 | 6,936 | 12,981 | 13,639 | |||||||||||
Selling and administrative | 2,291 | 2,437 | 4,509 | 4,882 | |||||||||||
Depreciation and amortization | 187 | 212 | 378 | 414 | |||||||||||
Impairment charges | — | — | 8 | — | |||||||||||
Gain on sales of assets | (241 | ) | (15 | ) | (255 | ) | (410 | ) | |||||||
Total costs and expenses | 8,922 | 9,570 | 17,621 | 18,525 | |||||||||||
Operating income (loss) | (51 | ) | (103 | ) | (298 | ) | 212 | ||||||||
Interest expense | (59 | ) | (65 | ) | (120 | ) | (131 | ) | |||||||
Interest and investment income | 14 | 9 | 21 | 21 | |||||||||||
Other income (loss) | (1 | ) | 1 | (1 | ) | 1 | |||||||||
Income (loss) before income taxes | (97 | ) | (158 | ) | (398 | ) | 103 | ||||||||
Income tax (expense) benefit | (30 | ) | 25 | (21 | ) | (42 | ) | ||||||||
Net income (loss) | (127 | ) | (133 | ) | (419 | ) | 61 | ||||||||
(Income) loss attributable to noncontrolling interests | (67 | ) | 1 | (54 | ) | (4 | ) | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | (194 | ) | $ | (132 | ) | $ | (473 | ) | $ | 57 | ||||
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | |||||||||||||||
Basic earnings (loss) per share | $ | (1.83 | ) | $ | (1.25 | ) | $ | (4.46 | ) | $ | 0.54 | ||||
Diluted earnings (loss) per share | $ | (1.83 | ) | $ | (1.25 | ) | $ | (4.46 | ) | $ | 0.54 | ||||
Basic weighted average common shares outstanding | 106.1 | 105.9 | 106.1 | 105.9 | |||||||||||
Diluted weighted average common shares outstanding | 106.1 | 105.9 | 106.1 | 106.1 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Net income (loss) | $ | (127 | ) | $ | (133 | ) | $ | (419 | ) | $ | 61 | ||||
Other comprehensive income | |||||||||||||||
Pension and postretirement adjustments, net of tax | 48 | 46 | 94 | 92 | |||||||||||
Deferred gain on derivatives, net of tax | — | 3 | — | 5 | |||||||||||
Currency translation adjustments, net of tax | (20 | ) | 6 | (27 | ) | — | |||||||||
Total other comprehensive income | 28 | 55 | 67 | 97 | |||||||||||
Comprehensive income (loss) | (99 | ) | (78 | ) | (352 | ) | 158 | ||||||||
Comprehensive (income) loss attributable to noncontrolling interests | (61 | ) | 1 | (47 | ) | (5 | ) | ||||||||
Comprehensive income (loss) attributable to Holdings’ shareholders | $ | (160 | ) | $ | (77 | ) | $ | (399 | ) | $ | 153 |
(Unaudited) | |||||||||||
millions | August 3, 2013 | July 28, 2012 | February 2, 2013 | ||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 671 | $ | 730 | $ | 609 | |||||
Restricted cash | 10 | 8 | 9 | ||||||||
Accounts receivable | 641 | 569 | 635 | ||||||||
Merchandise inventories | 7,708 | 8,653 | 7,558 | ||||||||
Prepaid expenses and other current assets | 470 | 385 | 454 | ||||||||
Total current assets | 9,500 | 10,345 | 9,265 | ||||||||
Property and equipment, net | 5,786 | 6,341 | 6,053 | ||||||||
Goodwill | 379 | 841 | 379 | ||||||||
Trade names and other intangible assets | 2,864 | 2,907 | 2,881 | ||||||||
Other assets | 749 | 749 | 762 | ||||||||
TOTAL ASSETS | $ | 19,278 | $ | 21,183 | $ | 19,340 | |||||
LIABILITIES | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings(1) | $ | 1,756 | $ | 1,176 | $ | 1,094 | |||||
Current portion of long-term debt and capitalized lease obligations | 75 | 154 | 83 | ||||||||
Merchandise payables | 2,903 | 3,088 | 2,761 | ||||||||
Other current liabilities | 2,435 | 2,742 | 2,683 | ||||||||
Unearned revenues | 925 | 962 | 931 | ||||||||
Other taxes | 484 | 535 | 480 | ||||||||
Short-term deferred tax liabilities | 382 | 515 | 382 | ||||||||
Total current liabilities | 8,960 | 9,172 | 8,414 | ||||||||
Long-term debt and capitalized lease obligations(2) | 1,911 | 1,970 | 1,943 | ||||||||
Pension and postretirement benefits | 2,539 | 2,582 | 2,730 | ||||||||
Other long-term liabilities | 2,081 | 2,124 | 2,126 | ||||||||
Long-term deferred tax liabilities | 963 | 839 | 955 | ||||||||
Total Liabilities | 16,454 | 16,687 | 16,168 | ||||||||
Commitments and contingencies | |||||||||||
EQUITY | |||||||||||
Total Equity | 2,824 | 4,496 | 3,172 | ||||||||
TOTAL LIABILITIES AND EQUITY | $ | 19,278 | $ | 21,183 | $ | 19,340 |
26 Weeks Ended | |||||||
millions | August 3, 2013 | July 28, 2012 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income (loss) | $ | (419 | ) | $ | 61 | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||
Depreciation and amortization | 378 | 414 | |||||
Impairment charges | 8 | — | |||||
Gain on sales of assets | (255 | ) | (410 | ) | |||
Pension and postretirement plan contributions | (176 | ) | (164 | ) | |||
Settlement of Canadian dollar hedges | — | 6 | |||||
Change in operating assets and liabilities (net of acquisitions and dispositions): | |||||||
Deferred income taxes | 12 | 32 | |||||
Merchandise inventories | (183 | ) | (248 | ) | |||
Merchandise payables | 157 | 178 | |||||
Income and other taxes | (12 | ) | 14 | ||||
Mark-to-market adjustments on Sears Canada foreign exchange forward contracts | (1 | ) | — | ||||
Other operating assets | (43 | ) | 91 | ||||
Other operating liabilities | (181 | ) | (46 | ) | |||
Net cash used in operating activities | (715 | ) | (72 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Proceeds from sales of property and investments | 287 | 456 | |||||
Net increase in investments and restricted cash | (1 | ) | (1 | ) | |||
Purchases of property and equipment | (116 | ) | (161 | ) | |||
Net cash provided by investing activities | 170 | 294 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from debt issuances | 2 | 2 | |||||
Repayments of long-term debt | (46 | ) | (231 | ) | |||
Increase in short-term borrowings, primarily 90 days or less | 662 | 1 | |||||
Purchase of Sears Canada shares | — | (10 | ) | ||||
Net cash provided by (used in) financing activities | 618 | (238 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (11 | ) | (1 | ) | |||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 62 | (17 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 609 | 747 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 671 | $ | 730 | |||
Supplemental Cash Flow Data: | |||||||
Income taxes paid, net of refunds | $ | 32 | $ | 20 | |||
Cash interest paid | 98 | 100 | |||||
Unpaid liability to acquire equipment and software | 43 | 50 |
Equity Attributable to Holdings’ Shareholders | |||||||||||||||||||||||||||||||
millions | Number of Shares | Common Stock | Treasury Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |||||||||||||||||||||||
Balance at January 28, 2012 | 106 | $ | 1 | $ | (5,981 | ) | $ | 10,005 | $ | 1,865 | $ | (1,609 | ) | $ | 60 | $ | 4,341 | ||||||||||||||
Comprehensive income | |||||||||||||||||||||||||||||||
Net income | — | — | — | — | 57 | — | 4 | 61 | |||||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | — | — | — | — | 91 | 1 | 92 | |||||||||||||||||||||||
Deferred gain on derivatives, net of tax | — | — | — | — | — | 5 | — | 5 | |||||||||||||||||||||||
Total Comprehensive Income | 158 | ||||||||||||||||||||||||||||||
Stock awards | — | — | 10 | (5 | ) | — | — | — | 5 | ||||||||||||||||||||||
Purchase of Sears Canada shares | — | — | — | (3 | ) | — | (1 | ) | (6 | ) | (10 | ) | |||||||||||||||||||
Associate stock purchase | — | — | 2 | — | — | — | — | 2 | |||||||||||||||||||||||
Balance at July 28, 2012 | 106 | — | $ | 1 | $ | (5,969 | ) | $ | 9,997 | $ | 1,922 | $ | (1,514 | ) | $ | 59 | $ | 4,496 | |||||||||||||
Balance at February 2, 2013 | 106 | $ | 1 | $ | (5,970 | ) | $ | 9,298 | $ | 885 | $ | (1,459 | ) | $ | 417 | $ | 3,172 | ||||||||||||||
Comprehensive loss | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (473 | ) | — | 54 | (419 | ) | |||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | — | — | — | — | 89 | 5 | 94 | |||||||||||||||||||||||
Currency translation adjustments, net of tax | — | — | — | — | — | (15 | ) | (12 | ) | (27 | ) | ||||||||||||||||||||
Total Comprehensive Loss | (352 | ) | |||||||||||||||||||||||||||||
Stock awards | — | — | 3 | (1 | ) | — | — | — | 2 | ||||||||||||||||||||||
Associate stock purchase | — | — | 2 | — | — | — | — | 2 | |||||||||||||||||||||||
Balance at August 3, 2013 | 106 | $ | 1 | $ | (5,965 | ) | $ | 9,297 | $ | 412 | $ | (1,385 | ) | $ | 464 | $ | 2,824 |
millions | August 3, 2013 | July 28, 2012 | February 2, 2013 | ||||||||
Short-term borrowings: | |||||||||||
Unsecured commercial paper | $ | 247 | $ | 235 | $ | 345 | |||||
Secured borrowings | 1,509 | 941 | 749 | ||||||||
Long-term debt, including current portion: | |||||||||||
Notes and debentures outstanding | 1,582 | 1,668 | 1,593 | ||||||||
Capitalized lease obligations | 404 | 456 | 433 | ||||||||
Total borrowings | $ | 3,742 | $ | 3,300 | $ | 3,120 |
millions | Total Fair Value Amounts at August 3, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||
Cash equivalents(1) | $ | 211 | $ | 211 | $ | — | $ | — | |||||||
Restricted cash(2) | 10 | 10 | — | — | |||||||||||
Foreign currency derivative assets(3) | 1 | — | 1 | — | |||||||||||
Foreign currency derivative liabilities(4) | (1 | ) | — | (1 | ) | — | |||||||||
Total | $ | 221 | $ | 221 | $ | — | $ | — |
millions | Total Fair Value Amounts at July 28, 2012 | Level 1 | Level 2 | Level 3 | |||||||||||
Cash equivalents(1) | $ | 274 | $ | 274 | $ | — | $ | — | |||||||
Restricted cash(2) | 8 | 8 | — | — | |||||||||||
Total | $ | 282 | $ | 282 | $ | — | $ | — |
millions | Total Fair Value Amounts at February 2, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||
Cash equivalents(1) | $ | 181 | $ | 181 | $ | — | $ | — | |||||||
Restricted cash(2) | 9 | 9 | — | — | |||||||||||
Total | $ | 190 | $ | 190 | $ | — | $ | — |
(1) | Included within Cash and cash equivalents on the Condensed Consolidated Balance Sheets. |
(2) | Included within Restricted cash on the Condensed Consolidated Balance Sheets. |
(3) | Included within Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets. |
(4) | Included within Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. |
millions | Markdowns(1) | Severance Costs(2) | Lease Termination Costs(2) | Other Charges(2) | Impairment and Accelerated Depreciation(3) | Total Store Closing Costs | |||||||||||||||||
Kmart | $ | 4 | $ | 1 | $ | — | $ | 3 | $ | — | $ | 8 | |||||||||||
Sears Domestic | 3 | 1 | (3 | ) | 1 | 1 | 3 | ||||||||||||||||
Total for the 13-week period ended August 3, 2013 | $ | 7 | $ | 2 | $ | (3 | ) | $ | 4 | $ | 1 | $ | 11 | ||||||||||
Kmart | $ | — | $ | — | $ | 8 | $ | — | $ | 1 | $ | 9 | |||||||||||
Sears Domestic | — | — | 8 | — | 6 | 14 | |||||||||||||||||
Sears Canada | — | 2 | — | — | — | 2 | |||||||||||||||||
Total for the 13-week period ended July 28, 2012 | $ | — | $ | 2 | $ | 16 | $ | — | $ | 7 | $ | 25 | |||||||||||
Kmart | $ | 9 | $ | 2 | $ | (1 | ) | $ | 6 | $ | 1 | $ | 17 | ||||||||||
Sears Domestic | 6 | 2 | (6 | ) | 3 | 9 | 14 | ||||||||||||||||
Sears Canada | — | 2 | — | — | — | 2 | |||||||||||||||||
Total for the 26-week period ended August 3, 2013 | $ | 15 | $ | 6 | $ | (7 | ) | $ | 9 | $ | 10 | $ | 33 | ||||||||||
Kmart | $ | — | $ | — | $ | 11 | $ | — | $ | 1 | $ | 12 | |||||||||||
Sears Domestic | — | — | 39 | — | 6 | 45 | |||||||||||||||||
Sears Canada | — | 2 | — | — | — | 2 | |||||||||||||||||
Total for the 26-week period ended July 28, 2012 | $ | — | $ | 2 | $ | 50 | $ | — | $ | 7 | $ | 59 |
(1) | Recorded within Cost of sales, buying and occupancy on the Condensed Consolidated Statements of Operations. |
(2) | Recorded within Selling and administrative on the Condensed 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) | Costs for the 26- week period ended August 3, 2013 include $8 million recorded within Impairment charges and $2 million recorded within Depreciation and amortization on the Condensed Consolidated Statements of Operations. Costs for the 13- week period ended August 3, 2013 and the 13- week and 26- week periods ended July 28, 2012 are recorded within Depreciation and amortization on the Condensed Consolidated Statements of Operations. |
millions | Severance Costs | Lease Termination Costs | Other Charges | Total | |||||||||||
Balance at July 28, 2012 | $ | 21 | $ | 123 | $ | 21 | $ | 165 | |||||||
Store closing costs | 29 | 25 | 7 | 61 | |||||||||||
Payments/utilizations | (9 | ) | (10 | ) | (14 | ) | (33 | ) | |||||||
Balance at February 2, 2013 | 41 | 138 | 14 | 193 | |||||||||||
Store closing costs | 6 | (7 | ) | 9 | 8 | ||||||||||
Payments/utilizations | (24 | ) | (12 | ) | (8 | ) | (44 | ) | |||||||
Balance at August 3, 2013 | $ | 23 | $ | 119 | $ | 15 | $ | 157 |
millions | August 3, 2013 | July 28, 2012 | February 2, 2013 | ||||||||
Pension and postretirement adjustments (net of tax of $(441), $(489) and $(443), respectively) | $ | (1,319 | ) | $ | (1,485 | ) | $ | (1,408 | ) | ||
Currency translation adjustments (net of tax of $(40), $(27) and $(39), respectively) | (66 | ) | (29 | ) | (51 | ) | |||||
Accumulated other comprehensive loss | $ | (1,385 | ) | $ | (1,514 | ) | $ | (1,459 | ) |
13 Weeks Ended August 3, 2013 | 13 Weeks Ended July 28, 2012 | ||||||||||||||||||||||
millions | Before Tax Amount | Tax Expense | Net of Tax Amount | Before Tax Amount | Tax Expense | Net of Tax Amount | |||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Pension and postretirement adjustments(1) | $ | 49 | $ | (1 | ) | $ | 48 | $ | 47 | $ | (1 | ) | $ | 46 | |||||||||
Deferred gain on derivatives | — | — | — | 3 | — | 3 | |||||||||||||||||
Currency translation adjustments | (20 | ) | — | (20 | ) | 5 | 1 | 6 | |||||||||||||||
Total other comprehensive income (loss) | $ | 29 | $ | (1 | ) | $ | 28 | $ | 55 | $ | — | $ | 55 | ||||||||||
26 Weeks Ended August 3, 2013 | 26 Weeks Ended July 28, 2012 | ||||||||||||||||||||||
millions | Before Tax Amount | Tax Expense | Net of Tax Amount | Before Tax Amount | Tax Expense | Net of Tax Amount | |||||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Pension and postretirement adjustments(1) | $ | 97 | $ | (3 | ) | $ | 94 | $ | 95 | $ | (3 | ) | $ | 92 | |||||||||
Deferred gain on derivatives | — | — | — | 5 | — | 5 | |||||||||||||||||
Currency translation adjustments | (28 | ) | 1 | (27 | ) | (1 | ) | 1 | — | ||||||||||||||
Total other comprehensive income (loss) | $ | 69 | $ | (2 | ) | $ | 67 | $ | 99 | $ | (2 | ) | $ | 97 |
(1) | Included in the computation of net periodic benefit expense. See Note 8 to the Condensed Consolidated Financial Statements. |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Components of net periodic expense: | |||||||||||||||
Interest cost | $ | 75 | $ | 96 | $ | 150 | $ | 192 | |||||||
Expected return on plan assets | (77 | ) | (93 | ) | (154 | ) | (186 | ) | |||||||
Amortization of experience losses | 49 | 47 | 97 | 95 | |||||||||||
Net periodic expense | $ | 47 | $ | 50 | $ | 93 | $ | 101 |
(i) | Hardlines—consists of 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; and |
(iv) | Service and Other—includes repair, installation and automotive service and extended contract revenue as well as revenues earned in connection with our agreements with SHO. |
13 Weeks Ended August 3, 2013 | |||||||||||||||
millions | Kmart | Sears Domestic | Sears Canada | Sears Holdings | |||||||||||
Merchandise sales and services | |||||||||||||||
Hardlines | $ | 977 | $ | 2,458 | $ | 484 | $ | 3,919 | |||||||
Apparel and Soft Home | 1,003 | 1,120 | 387 | 2,510 | |||||||||||
Food and Drug | 1,169 | 3 | — | 1,172 | |||||||||||
Service and Other | 19 | 1,202 | 49 | 1,270 | |||||||||||
Total merchandise sales and services | 3,168 | 4,783 | 920 | 8,871 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of sales, buying and occupancy | 2,459 | 3,544 | 682 | 6,685 | |||||||||||
Selling and administrative | 747 | 1,301 | 243 | 2,291 | |||||||||||
Depreciation and amortization | 33 | 129 | 25 | 187 | |||||||||||
Gain on sales of assets | (15 | ) | (45 | ) | (181 | ) | (241 | ) | |||||||
Total costs and expenses | 3,224 | 4,929 | 769 | 8,922 | |||||||||||
Operating income (loss) | $ | (56 | ) | $ | (146 | ) | $ | 151 | $ | (51 | ) | ||||
Total assets | $ | 4,291 | $ | 12,602 | $ | 2,385 | $ | 19,278 | |||||||
Capital expenditures | $ | 4 | $ | 47 | $ | 5 | $ | 56 |
13 Weeks Ended July 28, 2012 | |||||||||||||||
millions | Kmart | Sears Domestic | Sears Canada | Sears Holdings | |||||||||||
Merchandise sales and services | |||||||||||||||
Hardlines | $ | 1,033 | $ | 3,129 | $ | 577 | $ | 4,739 | |||||||
Apparel and Soft Home | 1,024 | 1,195 | 406 | 2,625 | |||||||||||
Food and Drug | 1,297 | 12 | — | 1,309 | |||||||||||
Service and Other | 20 | 726 | 48 | 794 | |||||||||||
Total merchandise sales and services | 3,374 | 5,062 | 1,031 | 9,467 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of sales, buying and occupancy | 2,586 | 3,611 | 739 | 6,936 | |||||||||||
Selling and administrative | 763 | 1,389 | 285 | 2,437 | |||||||||||
Depreciation and amortization | 38 | 149 | 25 | 212 | |||||||||||
Gain on sales of assets | (9 | ) | (5 | ) | (1 | ) | (15 | ) | |||||||
Total costs and expenses | 3,378 | 5,144 | 1,048 | 9,570 | |||||||||||
Operating loss | $ | (4 | ) | $ | (82 | ) | $ | (17 | ) | $ | (103 | ) | |||
Total assets | $ | 4,637 | $ | 13,736 | $ | 2,810 | $ | 21,183 | |||||||
Capital expenditures | $ | 35 | $ | 26 | $ | 20 | $ | 81 |
26 Weeks Ended August 3, 2013 | |||||||||||||||
millions | Kmart | Sears Domestic | Sears Canada | Sears Holdings | |||||||||||
Merchandise sales and services | |||||||||||||||
Hardlines | $ | 1,875 | $ | 4,641 | $ | 925 | $ | 7,441 | |||||||
Apparel and Soft Home | 1,996 | 2,285 | 741 | 5,022 | |||||||||||
Food and Drug | 2,359 | 6 | — | 2,365 | |||||||||||
Service and Other | 41 | 2,358 | 96 | 2,495 | |||||||||||
Total merchandise sales and services | 6,271 | 9,290 | 1,762 | 17,323 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of sales, buying and occupancy | 4,857 | 6,837 | 1,287 | 12,981 | |||||||||||
Selling and administrative | 1,460 | 2,556 | 493 | 4,509 | |||||||||||
Depreciation and amortization | 66 | 262 | 50 | 378 | |||||||||||
Impairment charges | — | 8 | — | 8 | |||||||||||
Gain on sales of assets | (28 | ) | (46 | ) | (181 | ) | (255 | ) | |||||||
Total costs and expenses | 6,355 | 9,617 | 1,649 | 17,621 | |||||||||||
Operating income (loss) | $ | (84 | ) | $ | (327 | ) | $ | 113 | $ | (298 | ) | ||||
Total assets | $ | 4,291 | $ | 12,602 | $ | 2,385 | $ | 19,278 | |||||||
Capital expenditures | $ | 25 | $ | 76 | $ | 15 | $ | 116 |
26 Weeks Ended July 28, 2012 | |||||||||||||||
millions | Kmart | Sears Domestic | Sears Canada | Sears Holdings | |||||||||||
Merchandise sales and services | |||||||||||||||
Hardlines | $ | 2,001 | $ | 6,104 | $ | 1,071 | $ | 9,176 | |||||||
Apparel and Soft Home | 2,086 | 2,452 | 772 | 5,310 | |||||||||||
Food and Drug | 2,659 | 23 | — | 2,682 | |||||||||||
Service and Other | 43 | 1,421 | 105 | 1,569 | |||||||||||
Total merchandise sales and services | 6,789 | 10,000 | 1,948 | 18,737 | |||||||||||
Costs and expenses | |||||||||||||||
Cost of sales, buying and occupancy | 5,151 | 7,098 | 1,390 | 13,639 | |||||||||||
Selling and administrative | 1,515 | 2,804 | 563 | 4,882 | |||||||||||
Depreciation and amortization | 71 | 292 | 51 | 414 | |||||||||||
Gain on sales of assets | (14 | ) | (233 | ) | (163 | ) | (410 | ) | |||||||
Total costs and expenses | 6,723 | 9,961 | 1,841 | 18,525 | |||||||||||
Operating income | $ | 66 | $ | 39 | $ | 107 | $ | 212 | |||||||
Total assets | $ | 4,637 | $ | 13,736 | $ | 2,810 | $ | 21,183 | |||||||
Capital expenditures | $ | 67 | $ | 58 | $ | 36 | $ | 161 |
millions | August 3, 2013 | July 28, 2012 | February 2, 2013 | ||||||||
Unearned revenues | $ | 858 | $ | 791 | $ | 843 | |||||
Self-insurance reserves | 705 | 735 | 714 | ||||||||
Other | 518 | 598 | 569 | ||||||||
Total | $ | 2,081 | $ | 2,124 | $ | 2,126 |
• | 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, information technology and real estate. |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 336 | $ | 335 | $ | — | $ | 671 | |||||||||
Intercompany receivables | — | — | 26,087 | (26,087 | ) | — | |||||||||||||
Accounts receivable | — | 530 | 111 | — | 641 | ||||||||||||||
Merchandise inventories | — | 6,856 | 852 | — | 7,708 | ||||||||||||||
Prepaid expenses and other current assets | 92 | 1,093 | 470 | (1,175 | ) | 480 | |||||||||||||
Total current assets | 92 | 8,815 | 27,855 | (27,262 | ) | 9,500 | |||||||||||||
Total property and equipment, net | — | 4,241 | 1,545 | — | 5,786 | ||||||||||||||
Goodwill and intangible assets | — | 955 | 2,288 | — | 3,243 | ||||||||||||||
Other assets | 15 | 227 | 2,905 | (2,398 | ) | 749 | |||||||||||||
Investment in subsidiaries | 15,822 | 25,301 | — | (41,123 | ) | — | |||||||||||||
TOTAL ASSETS | $ | 15,929 | $ | 39,539 | $ | 34,593 | $ | (70,783 | ) | $ | 19,278 | ||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings | $ | — | $ | 1,756 | $ | — | $ | — | $ | 1,756 | |||||||||
Current portion of long-term debt and capitalized lease obligations | — | 60 | 15 | — | 75 | ||||||||||||||
Merchandise payables | — | 2,530 | 373 | — | 2,903 | ||||||||||||||
Intercompany payables | 12,442 | 13,645 | — | (26,087 | ) | — | |||||||||||||
Short-term deferred tax liabilities | 3 | 412 | — | (33 | ) | 382 | |||||||||||||
Other current liabilities | 26 | 2,405 | 2,555 | (1,142 | ) | 3,844 | |||||||||||||
Total current liabilities | 12,471 | 20,808 | 2,943 | (27,262 | ) | 8,960 | |||||||||||||
Long-term debt and capitalized lease obligations | 1,237 | 2,923 | 101 | (2,350 | ) | 1,911 | |||||||||||||
Pension and postretirement benefits | — | 2,150 | 389 | — | 2,539 | ||||||||||||||
Long-term deferred tax liabilities | — | 8 | 889 | 66 | 963 | ||||||||||||||
Other long-term liabilities | — | 826 | 1,508 | (253 | ) | 2,081 | |||||||||||||
Total Liabilities | 13,708 | 26,715 | 5,830 | (29,799 | ) | 16,454 | |||||||||||||
EQUITY | |||||||||||||||||||
Shareholder’s equity | 2,221 | 12,824 | 28,763 | (41,448 | ) | 2,360 | |||||||||||||
Noncontrolling interest | — | — | — | 464 | 464 | ||||||||||||||
Total Equity | 2,221 | 12,824 | 28,763 | (40,984 | ) | 2,824 | |||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 15,929 | $ | 39,539 | $ | 34,593 | $ | (70,783 | ) | $ | 19,278 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 359 | $ | 371 | $ | — | $ | 730 | |||||||||
Intercompany receivables | — | — | 25,527 | (25,527 | ) | — | |||||||||||||
Accounts receivable | — | 405 | 164 | — | 569 | ||||||||||||||
Merchandise inventories | — | 7,819 | 834 | — | 8,653 | ||||||||||||||
Prepaid expenses and other current assets | 81 | 620 | 471 | (779 | ) | 393 | |||||||||||||
Total current assets | 81 | 9,203 | 27,367 | (26,306 | ) | 10,345 | |||||||||||||
Total property and equipment, net | — | 4,660 | 1,681 | — | 6,341 | ||||||||||||||
Goodwill and intangible assets | — | 1,155 | 2,593 | — | 3,748 | ||||||||||||||
Other assets | 21 | 308 | 2,420 | (2,000 | ) | 749 | |||||||||||||
Investment in subsidiaries | 17,178 | 25,890 | — | (43,068 | ) | — | |||||||||||||
TOTAL ASSETS | $ | 17,280 | $ | 41,216 | $ | 34,061 | $ | (71,374 | ) | $ | 21,183 | ||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings | $ | — | $ | 1,176 | $ | — | $ | — | $ | 1,176 | |||||||||
Current portion of long-term debt and capitalized lease obligations | — | 138 | 16 | — | 154 | ||||||||||||||
Merchandise payables | — | 2,695 | 393 | — | 3,088 | ||||||||||||||
Intercompany payables | 11,942 | 13,585 | — | (25,527 | ) | — | |||||||||||||
Short-term deferred tax liabilities | 5 | 540 | — | (30 | ) | 515 | |||||||||||||
Other current liabilities | 24 | 2,752 | 2,212 | (749 | ) | 4,239 | |||||||||||||
Total current liabilities | 11,971 | 20,886 | 2,621 | (26,306 | ) | 9,172 | |||||||||||||
Long-term debt and capitalized lease obligations | 1,237 | 2,828 | 104 | (2,199 | ) | 1,970 | |||||||||||||
Pension and postretirement benefits | — | 2,139 | 443 | — | 2,582 | ||||||||||||||
Long-term deferred tax liabilities | — | — | 772 | 67 | 839 | ||||||||||||||
Other long-term liabilities | — | 830 | 1,525 | (231 | ) | 2,124 | |||||||||||||
Total Liabilities | 13,208 | 26,683 | 5,465 | (28,669 | ) | 16,687 | |||||||||||||
EQUITY | |||||||||||||||||||
Shareholder’s equity | 4,072 | 14,533 | 28,596 | (42,764 | ) | 4,437 | |||||||||||||
Noncontrolling interest | — | — | — | 59 | 59 | ||||||||||||||
Total Equity | 4,072 | 14,533 | 28,596 | (42,705 | ) | 4,496 | |||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 17,280 | $ | 41,216 | $ | 34,061 | $ | (71,374 | ) | $ | 21,183 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 320 | $ | 289 | $ | — | $ | 609 | |||||||||
Intercompany receivables | — | — | 25,553 | (25,553 | ) | — | |||||||||||||
Accounts receivable | — | 506 | 129 | — | 635 | ||||||||||||||
Merchandise inventories | — | 6,709 | 849 | — | 7,558 | ||||||||||||||
Prepaid expenses and other current assets | 92 | 970 | 461 | (1,060 | ) | 463 | |||||||||||||
Total current assets | 92 | 8,505 | 27,281 | (26,613 | ) | 9,265 | |||||||||||||
Total property and equipment, net | — | 4,412 | 1,641 | — | 6,053 | ||||||||||||||
Goodwill and intangible assets | — | 968 | 2,292 | — | 3,260 | ||||||||||||||
Other assets | 17 | 223 | 3,147 | (2,625 | ) | 762 | |||||||||||||
Investment in subsidiaries | 16,413 | 24,988 | — | (41,401 | ) | — | |||||||||||||
TOTAL ASSETS | $ | 16,522 | $ | 39,096 | $ | 34,361 | $ | (70,639 | ) | $ | 19,340 | ||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings | $ | — | $ | 1,094 | $ | — | $ | — | $ | 1,094 | |||||||||
Current portion of long-term debt and capitalized lease obligations | — | 66 | 17 | — | 83 | ||||||||||||||
Merchandise payables | — | 2,392 | 369 | — | 2,761 | ||||||||||||||
Intercompany payables | 12,594 | 12,959 | — | (25,553 | ) | — | |||||||||||||
Short-term deferred tax liabilities | 3 | 412 | — | (33 | ) | 382 | |||||||||||||
Other current liabilities | 26 | 2,640 | 2,455 | (1,027 | ) | 4,094 | |||||||||||||
Total current liabilities | 12,623 | 19,563 | 2,841 | (26,613 | ) | 8,414 | |||||||||||||
Long-term debt and capitalized lease obligations | 1,237 | 3,081 | 135 | (2,510 | ) | 1,943 | |||||||||||||
Pension and postretirement benefits | — | 2,310 | 420 | — | 2,730 | ||||||||||||||
Long-term deferred tax liabilities | — | — | 914 | 41 | 955 | ||||||||||||||
Other long-term liabilities | — | 861 | 1,513 | (248 | ) | 2,126 | |||||||||||||
Total Liabilities | 13,860 | 25,815 | 5,823 | (29,330 | ) | 16,168 | |||||||||||||
EQUITY | |||||||||||||||||||
Shareholder’s equity | 2,662 | 13,281 | 28,538 | (41,726 | ) | 2,755 | |||||||||||||
Noncontrolling interest | — | — | — | 417 | 417 | ||||||||||||||
Total Equity | 2,662 | 13,281 | 28,538 | (41,309 | ) | 3,172 | |||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 16,522 | $ | 39,096 | $ | 34,361 | $ | (70,639 | ) | $ | 19,340 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 8,030 | $ | 1,780 | $ | (939 | ) | $ | 8,871 | |||||||||
Cost of sales, buying and occupancy | — | 6,121 | 1,037 | (473 | ) | 6,685 | ||||||||||||||
Selling and administrative | 1 | 2,219 | 537 | (466 | ) | 2,291 | ||||||||||||||
Depreciation and amortization | — | 142 | 45 | — | 187 | |||||||||||||||
Gain on sales of assets | — | (60 | ) | (181 | ) | — | (241 | ) | ||||||||||||
Total costs and expenses | 1 | 8,422 | 1,438 | (939 | ) | 8,922 | ||||||||||||||
Operating income (loss) | (1 | ) | (392 | ) | 342 | — | (51 | ) | ||||||||||||
Interest expense | (55 | ) | (90 | ) | (22 | ) | 108 | (59 | ) | |||||||||||
Interest and investment income | — | 10 | 112 | (108 | ) | 14 | ||||||||||||||
Other loss | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Income (loss) before income taxes | (56 | ) | (472 | ) | 431 | — | (97 | ) | ||||||||||||
Income tax (expense) benefit | — | 37 | (67 | ) | — | (30 | ) | |||||||||||||
Equity (deficit) in earnings in subsidiaries | (71 | ) | 281 | — | (210 | ) | — | |||||||||||||
Net income (loss) | (127 | ) | (154 | ) | 364 | (210 | ) | (127 | ) | |||||||||||
Income attributable to noncontrolling interests | — | — | — | (67 | ) | (67 | ) | |||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | (127 | ) | $ | (154 | ) | $ | 364 | $ | (277 | ) | $ | (194 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 8,422 | $ | 1,944 | $ | (899 | ) | $ | 9,467 | |||||||||
Cost of sales, buying and occupancy | — | 6,276 | 1,103 | (443 | ) | 6,936 | ||||||||||||||
Selling and administrative | 1 | 2,287 | 605 | (456 | ) | 2,437 | ||||||||||||||
Depreciation and amortization | — | 163 | 49 | — | 212 | |||||||||||||||
Gain on sales of assets | — | (14 | ) | (1 | ) | — | (15 | ) | ||||||||||||
Total costs and expenses | 1 | 8,712 | 1,756 | (899 | ) | 9,570 | ||||||||||||||
Operating income (loss) | (1 | ) | (290 | ) | 188 | — | (103 | ) | ||||||||||||
Interest expense | (56 | ) | (95 | ) | (27 | ) | 113 | (65 | ) | |||||||||||
Interest and investment income | — | 9 | 113 | (113 | ) | 9 | ||||||||||||||
Other income | — | — | 1 | — | 1 | |||||||||||||||
Income (loss) before income taxes | (57 | ) | (376 | ) | 275 | — | (158 | ) | ||||||||||||
Income tax (expense) benefit | 20 | 53 | (48 | ) | — | 25 | ||||||||||||||
Equity (deficit) in earnings in subsidiaries | (96 | ) | 144 | — | (48 | ) | — | |||||||||||||
Net income (loss) | (133 | ) | (179 | ) | 227 | (48 | ) | (133 | ) | |||||||||||
Loss attributable to noncontrolling interests | — | — | — | 1 | 1 | |||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | (133 | ) | $ | (179 | ) | $ | 227 | $ | (47 | ) | $ | (132 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 15,608 | $ | 3,475 | $ | (1,760 | ) | $ | 17,323 | |||||||||
Cost of sales, buying and occupancy | — | 11,888 | 1,949 | (856 | ) | 12,981 | ||||||||||||||
Selling and administrative | 1 | 4,306 | 1,106 | (904 | ) | 4,509 | ||||||||||||||
Depreciation and amortization | — | 286 | 92 | — | 378 | |||||||||||||||
Impairment charges | — | 8 | — | — | 8 | |||||||||||||||
Gain on sales of assets | — | (74 | ) | (181 | ) | — | (255 | ) | ||||||||||||
Total costs and expenses | 1 | 16,414 | 2,966 | (1,760 | ) | 17,621 | ||||||||||||||
Operating income (loss) | (1 | ) | (806 | ) | 509 | — | (298 | ) | ||||||||||||
Interest expense | (110 | ) | (184 | ) | (48 | ) | 222 | (120 | ) | |||||||||||
Interest and investment income | — | 19 | 224 | (222 | ) | 21 | ||||||||||||||
Other loss | — | — | (1 | ) | — | (1 | ) | |||||||||||||
Income (loss) before income taxes | (111 | ) | (971 | ) | 684 | — | (398 | ) | ||||||||||||
Income tax (expense) benefit | — | 86 | (107 | ) | — | (21 | ) | |||||||||||||
Equity (deficit) in earnings in subsidiaries | (308 | ) | 408 | — | (100 | ) | — | |||||||||||||
Net income (loss) | (419 | ) | (477 | ) | 577 | (100 | ) | (419 | ) | |||||||||||
Income attributable to noncontrolling interests | — | — | — | (54 | ) | (54 | ) | |||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | (419 | ) | $ | (477 | ) | $ | 577 | $ | (154 | ) | $ | (473 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 16,732 | $ | 3,770 | $ | (1,765 | ) | $ | 18,737 | |||||||||
Cost of sales, buying and occupancy | — | 12,375 | 2,133 | (869 | ) | 13,639 | ||||||||||||||
Selling and administrative | 1 | 4,570 | 1,207 | (896 | ) | 4,882 | ||||||||||||||
Depreciation and amortization | — | 316 | 98 | — | 414 | |||||||||||||||
Gain on sales of assets | — | (247 | ) | (163 | ) | — | (410 | ) | ||||||||||||
Total costs and expenses | 1 | 17,014 | 3,275 | (1,765 | ) | 18,525 | ||||||||||||||
Operating income (loss) | (1 | ) | (282 | ) | 495 | — | 212 | |||||||||||||
Interest expense | (112 | ) | (191 | ) | (54 | ) | 226 | (131 | ) | |||||||||||
Interest and investment income | — | 20 | 227 | (226 | ) | 21 | ||||||||||||||
Other income | — | — | 1 | — | 1 | |||||||||||||||
Income (loss) before income taxes | (113 | ) | (453 | ) | 669 | — | 103 | |||||||||||||
Income tax (expense) benefit | 39 | 35 | (116 | ) | — | (42 | ) | |||||||||||||
Equity in earnings in subsidiaries | 135 | 388 | — | (523 | ) | — | ||||||||||||||
Net income (loss) | 61 | (30 | ) | 553 | (523 | ) | 61 | |||||||||||||
Income attributable to noncontrolling interests | — | — | — | (4 | ) | (4 | ) | |||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | 61 | $ | (30 | ) | $ | 553 | $ | (527 | ) | $ | 57 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | (127 | ) | $ | (154 | ) | $ | 364 | $ | (210 | ) | $ | (127 | ) | ||||||
Other comprehensive income (loss) | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 42 | 6 | — | 48 | |||||||||||||||
Currency translation adjustments, net of tax | — | — | (20 | ) | — | (20 | ) | |||||||||||||
Unrealized net loss, net of tax | — | (3 | ) | (100 | ) | 103 | — | |||||||||||||
Total other comprehensive income (loss) | — | 39 | (114 | ) | 103 | 28 | ||||||||||||||
Comprehensive income (loss) | (127 | ) | (115 | ) | 250 | (107 | ) | (99 | ) | |||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | — | (61 | ) | (61 | ) | |||||||||||||
Comprehensive income (loss) attributable to Holdings’ shareholders | $ | (127 | ) | $ | (115 | ) | $ | 250 | $ | (168 | ) | $ | (160 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | (133 | ) | $ | (179 | ) | $ | 227 | $ | (48 | ) | $ | (133 | ) | ||||||
Other comprehensive income (loss) | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 42 | 4 | — | 46 | |||||||||||||||
Deferred gain on derivatives, net of tax | 3 | — | — | — | 3 | |||||||||||||||
Currency translation adjustments, net of tax | 23 | — | (17 | ) | — | 6 | ||||||||||||||
Unrealized net loss, net of tax | — | (269 | ) | (96 | ) | 365 | — | |||||||||||||
Total other comprehensive income (loss) | 26 | (227 | ) | (109 | ) | 365 | 55 | |||||||||||||
Comprehensive income (loss) | (107 | ) | (406 | ) | 118 | 317 | (78 | ) | ||||||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | — | 1 | 1 | |||||||||||||||
Comprehensive income (loss) attributable to Holdings’ shareholders | $ | (107 | ) | $ | (406 | ) | $ | 118 | $ | 318 | $ | (77 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | (419 | ) | $ | (477 | ) | $ | 577 | $ | (100 | ) | $ | (419 | ) | ||||||
Other comprehensive income (loss) | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 84 | 10 | — | 94 | |||||||||||||||
Currency translation adjustments, net of tax | — | — | (27 | ) | — | (27 | ) | |||||||||||||
Unrealized net loss, net of tax | — | (2 | ) | (44 | ) | 46 | — | |||||||||||||
Total other comprehensive income (loss) | — | 82 | (61 | ) | 46 | 67 | ||||||||||||||
Comprehensive income (loss) | (419 | ) | (395 | ) | 516 | (54 | ) | (352 | ) | |||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | — | (47 | ) | (47 | ) | |||||||||||||
Comprehensive income (loss) attributable to Holdings’ shareholders | $ | (419 | ) | $ | (395 | ) | $ | 516 | $ | (101 | ) | $ | (399 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | 61 | $ | (30 | ) | $ | 553 | $ | (523 | ) | $ | 61 | ||||||||
Other comprehensive income (loss) | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 83 | 9 | — | 92 | |||||||||||||||
Deferred gain on derivatives, net of tax | 5 | — | — | — | 5 | |||||||||||||||
Currency translation adjustments, net of tax | 6 | — | (6 | ) | — | — | ||||||||||||||
Unrealized net loss, net of tax | — | (269 | ) | (96 | ) | 365 | — | |||||||||||||
Total other comprehensive income (loss) | 11 | (186 | ) | (93 | ) | 365 | 97 | |||||||||||||
Comprehensive income (loss) | 72 | (216 | ) | 460 | (158 | ) | 158 | |||||||||||||
Comprehensive income attributable to noncontrolling interests | — | — | — | (5 | ) | (5 | ) | |||||||||||||
Comprehensive income (loss) attributable to Holdings’ shareholders | $ | 72 | $ | (216 | ) | $ | 460 | $ | (163 | ) | $ | 153 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Net cash provided by (used in) operating activities | $ | — | $ | (1,213 | ) | $ | 498 | $ | — | $ | (715 | ) | |||||||
Proceeds from sales of property and investments | — | 100 | 187 | — | 287 | ||||||||||||||
Net increase in investments and restricted cash | — | — | (1 | ) | — | (1 | ) | ||||||||||||
Purchases of property and equipment | — | (101 | ) | (15 | ) | — | (116 | ) | |||||||||||
Net investing with Affiliates | — | — | 45 | (45 | ) | — | |||||||||||||
Net cash provided by (used in) investing activities | — | (1 | ) | 216 | (45 | ) | 170 | ||||||||||||
Proceeds from debt issuances | — | — | 2 | — | 2 | ||||||||||||||
Repayments of long-term debt | — | (39 | ) | (7 | ) | — | (46 | ) | |||||||||||
Increase in short-term borrowings, primarily 90 days or less | — | 662 | — | — | 662 | ||||||||||||||
Intercompany dividend | 257 | 21 | (278 | ) | — | — | |||||||||||||
Net borrowing with Affiliates | (257 | ) | 586 | (374 | ) | 45 | — | ||||||||||||
Net cash provided by (used in) financing activities | — | 1,230 | (657 | ) | 45 | 618 | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (11 | ) | — | (11 | ) | ||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — | 16 | 46 | — | 62 | ||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 320 | 289 | — | 609 | ||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 336 | $ | 335 | $ | — | $ | 671 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Net cash provided by (used in) operating activities | $ | — | $ | (450 | ) | $ | 378 | $ | — | $ | (72 | ) | |||||||
Proceeds from sales of property and investments | — | 284 | 172 | — | 456 | ||||||||||||||
Net increase in investments and restricted cash | — | — | (1 | ) | — | (1 | ) | ||||||||||||
Purchases of property and equipment | — | (124 | ) | (37 | ) | — | (161 | ) | |||||||||||
Net investing with Affiliates | — | — | (81 | ) | 81 | — | |||||||||||||
Net cash provided by investing activities | — | 160 | 53 | 81 | 294 | ||||||||||||||
Proceeds from debt issuances | — | — | 2 | — | 2 | ||||||||||||||
Repayments of long-term debt | — | (120 | ) | (111 | ) | — | (231 | ) | |||||||||||
Increase in short-term borrowings, primarily 90 days or less | — | 1 | — | — | 1 | ||||||||||||||
Purchase of Sears Canada shares | — | — | (10 | ) | — | (10 | ) | ||||||||||||
Net borrowing with Affiliates | — | 432 | (351 | ) | (81 | ) | — | ||||||||||||
Net cash provided by (used in) financing activities | — | 313 | (470 | ) | (81 | ) | (238 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (1 | ) | — | (1 | ) | ||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — | 23 | (40 | ) | — | (17 | ) | ||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 336 | 411 | — | 747 | ||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 359 | $ | 371 | $ | — | $ | 730 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions, except per share data | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
REVENUES | |||||||||||||||
Merchandise sales and services | $ | 8,871 | $ | 9,467 | $ | 17,323 | $ | 18,737 | |||||||
COSTS AND EXPENSES | |||||||||||||||
Cost of sales, buying and occupancy | 6,685 | 6,936 | 12,981 | 13,639 | |||||||||||
Gross margin dollars | 2,186 | 2,531 | 4,342 | 5,098 | |||||||||||
Gross margin rate | 24.6 | % | 26.7 | % | 25.1 | % | 27.2 | % | |||||||
Selling and administrative | 2,291 | 2,437 | 4,509 | 4,882 | |||||||||||
Selling and administrative expense as a percentage of total revenues | 25.8 | % | 25.7 | % | 26.0 | % | 26.1 | % | |||||||
Depreciation and amortization | 187 | 212 | 378 | 414 | |||||||||||
Impairment charges | — | — | 8 | — | |||||||||||
Gain on sales of assets | (241 | ) | (15 | ) | (255 | ) | (410 | ) | |||||||
Total costs and expenses | 8,922 | 9,570 | 17,621 | 18,525 | |||||||||||
Operating income (loss) | (51 | ) | (103 | ) | (298 | ) | 212 | ||||||||
Interest expense | (59 | ) | (65 | ) | (120 | ) | (131 | ) | |||||||
Interest and investment income | 14 | 9 | 21 | 21 | |||||||||||
Other income (loss) | (1 | ) | 1 | (1 | ) | 1 | |||||||||
Income (loss) before income taxes | (97 | ) | (158 | ) | (398 | ) | 103 | ||||||||
Income tax (expense) benefit | (30 | ) | 25 | (21 | ) | (42 | ) | ||||||||
Net income (loss) | (127 | ) | (133 | ) | (419 | ) | 61 | ||||||||
(Income) loss attributable to noncontrolling interests | (67 | ) | 1 | (54 | ) | (4 | ) | ||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ | (194 | ) | $ | (132 | ) | $ | (473 | ) | $ | 57 | ||||
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | |||||||||||||||
Basic earnings (loss) per share | $ | (1.83 | ) | $ | (1.25 | ) | $ | (4.46 | ) | $ | 0.54 | ||||
Diluted earnings (loss) per share | $ | (1.83 | ) | $ | (1.25 | ) | $ | (4.46 | ) | $ | 0.54 | ||||
Basic weighted average common shares outstanding | 106.1 | 105.9 | 106.1 | 105.9 | |||||||||||
Diluted weighted average common shares outstanding | 106.1 | 105.9 | 106.1 | 106.1 |
• | 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. Adjustments to EBITDA include impairment charges related to fixed assets and intangible assets, closed store and severance charges, domestic pension expense and the SHO separation. 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. |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Net income (loss) attributable to SHC per statement of operations | $ | (194 | ) | $ | (132 | ) | $ | (473 | ) | $ | 57 | ||||
Income (loss) attributable to noncontrolling interests | 67 | (1 | ) | 54 | 4 | ||||||||||
Income tax expense (benefit) | 30 | (25 | ) | 21 | 42 | ||||||||||
Interest expense | 59 | 65 | 120 | 131 | |||||||||||
Interest and investment income | (14 | ) | (9 | ) | (21 | ) | (21 | ) | |||||||
Other (income) loss | 1 | (1 | ) | 1 | (1 | ) | |||||||||
Operating income (loss) | (51 | ) | (103 | ) | (298 | ) | 212 | ||||||||
Depreciation and amortization | 187 | 212 | 378 | 414 | |||||||||||
Gain on sales of assets | (241 | ) | (15 | ) | (255 | ) | (410 | ) | |||||||
Before excluded items | (105 | ) | 94 | (175 | ) | 216 | |||||||||
Closed store reserve and severance | 10 | 18 | 23 | 52 | |||||||||||
Domestic pension expense | 40 | 41 | 81 | 82 | |||||||||||
Impairment charges | — | — | 8 | — | |||||||||||
Adjusted EBITDA | (55 | ) | 153 | (63 | ) | 350 | |||||||||
SHO separation | — | (37 | ) | — | (74 | ) | |||||||||
Adjusted EBITDA as defined | $ | (55 | ) | $ | 116 | $ | (63 | ) | $ | 276 | |||||
% to revenues | (0.6 | )% | 1.3 | % | (0.4 | )% | 1.6 | % |
13 Weeks Ended | |||||||||||||||||||||||||
August 3, 2013 | July 28, 2012 | ||||||||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Canada | Sears Holdings | Kmart | Sears Domestic | Sears Canada | Sears Holdings | |||||||||||||||||
Operating income (loss) per statement of operations | $ | (56 | ) | $ | (146 | ) | $ | 151 | $ | (51 | ) | $ | (4 | ) | $ | (82 | ) | $ | (17 | ) | $ | (103 | ) | ||
Depreciation and amortization | 33 | 129 | 25 | 187 | 38 | 149 | 25 | 212 | |||||||||||||||||
Gain on sales of assets | (15 | ) | (45 | ) | (181 | ) | (241 | ) | (9 | ) | (5 | ) | (1 | ) | (15 | ) | |||||||||
Before excluded items | (38 | ) | (62 | ) | (5 | ) | (105 | ) | 25 | 62 | 7 | 94 | |||||||||||||
Closed store reserve and severance | 8 | 2 | — | 10 | 8 | 8 | 2 | 18 | |||||||||||||||||
Domestic pension expense | — | 40 | — | 40 | — | 41 | — | 41 | |||||||||||||||||
Adjusted EBITDA | (30 | ) | (20 | ) | (5 | ) | (55 | ) | 33 | 111 | 9 | 153 | |||||||||||||
SHO separation | — | — | — | — | — | (37 | ) | — | (37 | ) | |||||||||||||||
Adjusted EBITDA as defined | $ | (30 | ) | $ | (20 | ) | $ | (5 | ) | $ | (55 | ) | $ | 33 | $ | 74 | $ | 9 | $ | 116 | |||||
% to revenues | (0.9 | )% | (0.4 | )% | (0.5 | )% | (0.6 | )% | 1.0 | % | 1.7 | % | 0.9 | % | 1.3 | % |
26 Weeks Ended | |||||||||||||||||||||||||
August 3, 2013 | July 28, 2012 | ||||||||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Canada | Sears Holdings | Kmart | Sears Domestic | Sears Canada | Sears Holdings | |||||||||||||||||
Operating income (loss) per statement of operations | $ | (84 | ) | $ | (327 | ) | $ | 113 | $ | (298 | ) | $ | 66 | $ | 39 | $ | 107 | $ | 212 | ||||||
Depreciation and amortization | 66 | 262 | 50 | 378 | 71 | 292 | 51 | 414 | |||||||||||||||||
Gain on sales of assets | (28 | ) | (46 | ) | (181 | ) | (255 | ) | (14 | ) | (233 | ) | (163 | ) | (410 | ) | |||||||||
Before excluded items | (46 | ) | (111 | ) | (18 | ) | (175 | ) | 123 | 98 | (5 | ) | 216 | ||||||||||||
Closed store reserve and severance | 16 | 5 | 2 | 23 | 11 | 39 | 2 | 52 | |||||||||||||||||
Domestic pension expense | — | 81 | — | 81 | — | 82 | — | 82 | |||||||||||||||||
Impairment charges | — | 8 | — | 8 | — | — | — | — | |||||||||||||||||
Adjusted EBITDA | (30 | ) | (17 | ) | (16 | ) | (63 | ) | 134 | 219 | (3 | ) | 350 | ||||||||||||
SHO separation | — | — | — | — | — | (74 | ) | — | (74 | ) | |||||||||||||||
Adjusted EBITDA as defined | $ | (30 | ) | $ | (17 | ) | $ | (16 | ) | $ | (63 | ) | $ | 134 | $ | 145 | $ | (3 | ) | $ | 276 | ||||
% to revenues | (0.5 | )% | (0.2 | )% | (0.9 | )% | (0.4 | )% | 2.0 | % | 1.7 | % | (0.2 | )% | 1.6 | % |
• | Impairment charges – Accounting standards require the Company to evaluate the carrying value of fixed assets, goodwill and intangible assets for impairment. As a result of the Company’s analysis, we have recorded impairment charges related to certain fixed assets balances. |
• | 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. |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Components of net periodic expense: | |||||||||||||||
Interest cost | $ | 55 | $ | 73 | $ | 109 | $ | 145 | |||||||
Expected return on plan assets | (57 | ) | (73 | ) | (112 | ) | (146 | ) | |||||||
Amortization of experience losses | 42 | 41 | 84 | 83 | |||||||||||
Net periodic expense | $ | 40 | $ | 41 | $ | 81 | $ | 82 |
• | SHO separation – The results of the Sears Hometown and Outlet businesses that were included in our results of operations prior to the separation. |
13 Weeks Ended August 3, 2013 | |||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||
millions, except per share data | GAAP | Domestic Pension Expense | Closed Store Reserve and Severance | Gain on Sales of Assets | Tax Matters | As Adjusted | |||||||||||||||||
Gross margin impact | $ | 2,186 | $ | — | $ | 7 | $ | — | $ | — | $ | 2,193 | |||||||||||
Selling and administrative impact | 2,291 | (40 | ) | (3 | ) | — | — | 2,248 | |||||||||||||||
Depreciation and amortization impact | 187 | — | (1 | ) | — | — | 186 | ||||||||||||||||
Gain on sales of assets impact | (241 | ) | — | — | 235 | — | (6 | ) | |||||||||||||||
Operating loss impact | (51 | ) | 40 | 11 | (235 | ) | — | (235 | ) | ||||||||||||||
Income tax expense impact | (30 | ) | (15 | ) | (4 | ) | 89 | 65 | 105 | ||||||||||||||
Income attributable to noncontrolling interest impact | (67 | ) | — | — | 88 | — | 21 | ||||||||||||||||
After tax and noncontrolling interest impact | (194 | ) | 25 | 7 | (58 | ) | 65 | (155 | ) | ||||||||||||||
Diluted loss per share impact | $ | (1.83 | ) | $ | 0.24 | $ | 0.07 | $ | (0.55 | ) | $ | 0.61 | $ | (1.46 | ) |
13 Weeks Ended July 28, 2012 | |||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||
millions, except per share data | GAAP | Domestic Pension Expense | Closed Store Reserve and Severance | Mark-to-Market Gains | As Adjusted - Reported | SHO Separation | As Adjusted (1) | ||||||||||||||||||||
Gross margin impact | $ | 2,531 | $ | — | $ | — | $ | — | $ | 2,531 | $ | (160 | ) | $ | 2,371 | ||||||||||||
Selling and administrative impact | 2,437 | (41 | ) | (18 | ) | — | 2,378 | (124 | ) | 2,254 | |||||||||||||||||
Depreciation and amortization impact | 212 | — | (7 | ) | — | 205 | (2 | ) | 203 | ||||||||||||||||||
Operating loss impact | (103 | ) | 41 | 25 | — | (37 | ) | (34 | ) | (71 | ) | ||||||||||||||||
Other income impact | 1 | — | — | (1 | ) | — | (1 | ) | (1 | ) | |||||||||||||||||
Income tax benefit impact | 25 | (15 | ) | (9 | ) | — | 1 | 14 | 15 | ||||||||||||||||||
After tax and noncontrolling interest impact | (132 | ) | 26 | 16 | (1 | ) | (91 | ) | (21 | ) | (112 | ) | |||||||||||||||
Diluted loss per share impact | $ | (1.25 | ) | $ | 0.25 | $ | 0.15 | $ | (0.01 | ) | $ | (0.86 | ) | $ | (0.20 | ) | $ | (1.06 | ) |
26 Weeks Ended August 3, 2013 | |||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||
millions, except per share data | GAAP | Domestic Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Tax Matters | As Adjusted | |||||||||||||||||
Gross margin impact | $ | 4,342 | $ | — | $ | 15 | $ | — | $ | — | $ | 4,357 | |||||||||||
Selling and administrative impact | 4,509 | (81 | ) | (8 | ) | — | — | 4,420 | |||||||||||||||
Depreciation and amortization impact | 378 | — | (2 | ) | — | — | 376 | ||||||||||||||||
Impairment charges impact | 8 | — | (8 | ) | — | — | — | ||||||||||||||||
Gain on sales of assets impact | (255 | ) | — | — | 235 | — | (20 | ) | |||||||||||||||
Operating loss impact | (298 | ) | 81 | 33 | (235 | ) | — | (419 | ) | ||||||||||||||
Income tax expense impact | (21 | ) | (30 | ) | (13 | ) | 89 | 170 | 195 | ||||||||||||||
Income attributable to noncontrolling interest impact | (54 | ) | — | (1 | ) | 88 | — | 33 | |||||||||||||||
After tax and noncontrolling interest impact | (473 | ) | 51 | 19 | (58 | ) | 170 | (291 | ) | ||||||||||||||
Diluted loss per share impact | $ | (4.46 | ) | $ | 0.49 | $ | 0.18 | $ | (0.55 | ) | $ | 1.60 | $ | (2.74 | ) |
26 Weeks Ended July 28, 2012 | |||||||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||||
millions, except per share data | GAAP | Domestic Pension Expense | Closed Store Reserve and Severance | Gain on Sales of Assets | Tax Matters | As Adjusted - Reported | SHO Separation | As Adjusted(1) | |||||||||||||||||||||||
Gross margin impact | $ | 5,098 | $ | — | $ | — | $ | — | $ | — | $ | 5,098 | $ | (319 | ) | $ | 4,779 | ||||||||||||||
Selling and administrative impact | 4,882 | (82 | ) | (52 | ) | — | — | 4,748 | (246 | ) | 4,502 | ||||||||||||||||||||
Depreciation and amortization impact | 414 | — | (7 | ) | — | — | 407 | (5 | ) | 402 | |||||||||||||||||||||
Gain on sales of assets impact | (410 | ) | — | — | 386 | — | (24 | ) | — | (24 | ) | ||||||||||||||||||||
Operating income impact | 212 | 82 | 59 | (386 | ) | — | (33 | ) | (68 | ) | (101 | ) | |||||||||||||||||||
Income tax expense impact | (42 | ) | (31 | ) | (22 | ) | 145 | (37 | ) | 13 | 27 | 40 | |||||||||||||||||||
Income attributable to noncontrolling interest impact | (4 | ) | — | — | 8 | — | 4 | — | 4 | ||||||||||||||||||||||
After tax and noncontrolling interest impact | 57 | 51 | 37 | (233 | ) | (37 | ) | (125 | ) | (42 | ) | (167 | ) | ||||||||||||||||||
Diluted earnings per share impact | $ | 0.54 | $ | 0.48 | $ | 0.35 | $ | (2.20 | ) | $ | (0.35 | ) | $ | (1.18 | ) | $ | (0.40 | ) | $ | (1.58 | ) |
• | Gains on sales of assets – We have recorded significant gains on sales of assets which were primarily attributable to several real estate transactions. Management considers these gains on sale of assets to result from investing decisions rather than ongoing operations. |
• | Tax Matters – In 2011, we recorded a non-cash charge to establish a valuation allowance against substantially all of our domestic deferred tax assets. Accounting rules generally require that a valuation reserve be established when income has not been generated over a three-year cumulative period to support the deferred tax asset. While an accounting loss was recorded, we believe no economic loss has occurred as these net operating losses and tax benefits remain available to reduce future taxes as income is generated in subsequent periods. As this valuation allowance has a significant impact on the effective tax rate, we have adjusted our results to reflect a standard effective tax rate for the Company. |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions, except number of stores | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Merchandise sales and services | $ | 3,168 | $ | 3,374 | $ | 6,271 | $ | 6,789 | |||||||
Cost of sales, buying and occupancy | 2,459 | 2,586 | 4,857 | 5,151 | |||||||||||
Gross margin dollars | 709 | 788 | 1,414 | 1,638 | |||||||||||
Gross margin rate | 22.4 | % | 23.4 | % | 22.5 | % | 24.1 | % | |||||||
Selling and administrative | 747 | 763 | 1,460 | 1,515 | |||||||||||
Selling and administrative expense rate | 23.6 | % | 22.6 | % | 23.3 | % | 22.3 | % | |||||||
Depreciation and amortization | 33 | 38 | 66 | 71 | |||||||||||
Gain on sales of assets | (15 | ) | (9 | ) | (28 | ) | (14 | ) | |||||||
Total costs and expenses | 3,224 | 3,378 | 6,355 | 6,723 | |||||||||||
Operating income (loss) | $ | (56 | ) | $ | (4 | ) | $ | (84 | ) | $ | 66 | ||||
Adjusted EBITDA | $ | (30 | ) | $ | 33 | $ | (30 | ) | $ | 134 | |||||
Number of stores | 1,195 | 1,261 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions, except number of stores | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Merchandise sales and services | $ | 4,783 | $ | 5,062 | $ | 9,290 | $ | 10,000 | |||||||
Cost of sales, buying and occupancy | 3,544 | 3,611 | 6,837 | 7,098 | |||||||||||
Gross margin dollars | 1,239 | 1,451 | 2,453 | 2,902 | |||||||||||
Gross margin rate | 25.9 | % | 28.7 | % | 26.4 | % | 29.0 | % | |||||||
Selling and administrative | 1,301 | 1,389 | 2,556 | 2,804 | |||||||||||
Selling and administrative expense rate | 27.2 | % | 27.4 | % | 27.5 | % | 28.0 | % | |||||||
Depreciation and amortization | 129 | 149 | 262 | 292 | |||||||||||
Impairment charges | — | — | 8 | — | |||||||||||
Gain on sales of assets | (45 | ) | (5 | ) | (46 | ) | (233 | ) | |||||||
Total costs and expenses | 4,929 | 5,144 | 9,617 | 9,961 | |||||||||||
Operating income (loss) | $ | (146 | ) | $ | (82 | ) | $ | (327 | ) | $ | 39 | ||||
Adjusted EBITDA | $ | (20 | ) | $ | 111 | $ | (17 | ) | $ | 219 | |||||
SHO separation | — | (37 | ) | — | (74 | ) | |||||||||
Adjusted EBITDA as defined (1) | $ | (20 | ) | $ | 74 | $ | (17 | ) | $ | 145 | |||||
Number of: | |||||||||||||||
Full-line stores(2) | 791 | 814 | |||||||||||||
Specialty stores(3) | 50 | 1,282 | |||||||||||||
Total Domestic Sears Stores | 841 | 2,096 |
13 Weeks Ended | 26 Weeks Ended | ||||||||||||||
millions, except number of stores | August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
Merchandise sales and services | $ | 920 | $ | 1,031 | $ | 1,762 | $ | 1,948 | |||||||
Cost of sales, buying and occupancy | 682 | 739 | 1,287 | 1,390 | |||||||||||
Gross margin dollars | 238 | 292 | 475 | 558 | |||||||||||
Gross margin rate | 25.9 | % | 28.3 | % | 27.0 | % | 28.6 | % | |||||||
Selling and administrative | 243 | 285 | 493 | 563 | |||||||||||
Selling and administrative expense rate | 26.4 | % | 27.6 | % | 28.0 | % | 28.9 | % | |||||||
Depreciation and amortization | 25 | 25 | 50 | 51 | |||||||||||
Gain on sales of assets | (181 | ) | (1 | ) | (181 | ) | (163 | ) | |||||||
Total costs and expenses | 769 | 1,048 | 1,649 | 1,841 | |||||||||||
Operating income (loss) | $ | 151 | $ | (17 | ) | $ | 113 | $ | 107 | ||||||
Adjusted EBITDA | $ | (5 | ) | $ | 9 | $ | (16 | ) | $ | (3 | ) | ||||
Number of: | |||||||||||||||
Full-line stores | 118 | 122 | |||||||||||||
Specialty stores | 343 | 369 | |||||||||||||
Total Sears Canada Stores | 461 | 491 |
millions | August 3, 2013 | July 28, 2012 | February 2, 2013 | ||||||||
Domestic | |||||||||||
Cash and equivalents | $ | 206 | $ | 212 | $ | 227 | |||||
Cash posted as collateral | 19 | 20 | 20 | ||||||||
Credit card deposits in transit | 158 | 174 | 133 | ||||||||
Total domestic cash and cash equivalents | 383 | 406 | 380 | ||||||||
Sears Canada | 288 | 324 | 229 | ||||||||
Total cash and cash equivalents | 671 | 730 | 609 | ||||||||
Restricted cash | 10 | 8 | 9 | ||||||||
Total cash balances | $ | 681 | $ | 738 | $ | 618 |
millions | August 3, 2013 | July 28, 2012 | February 2, 2013 | ||||||||
Short-term borrowings: | |||||||||||
Unsecured commercial paper | $ | 247 | $ | 235 | $ | 345 | |||||
Secured borrowings | 1,509 | 941 | 749 | ||||||||
Long-term debt, including current portion: | |||||||||||
Notes and debentures outstanding | 1,582 | 1,668 | 1,593 | ||||||||
Capitalized lease obligations | 404 | 456 | 433 | ||||||||
Total borrowings | $ | 3,742 | $ | 3,300 | $ | 3,120 |
Moody’s Investors Service | Standard & Poor’s Ratings Services | Fitch Ratings | ||
B3 | CCC+ | CCC |
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 | |||||||||||||
May 5, 2013 to June 1, 2013 | 1,581 | $ | 57.43 | — | $ | — | |||||||||||
June 2, 2013 to July 6, 2013 | 720 | 49.25 | — | — | |||||||||||||
July 7, 2013 to August 3, 2013 | 329 | 46.08 | — | — | |||||||||||||
Total | 2,630 | $ | 53.77 | — | $ | — | $ | 503,907,832 |
(1) | Consists entirely of 2,630 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. |
(a) | Exhibits. |
3.1 | Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K, dated March 24, 2005, filed on March 24, 2005 (File No. 000-51217)). |
3.2 | Amended and Restated By-Laws (incorporated by reference to Exhibit 3.2 to Registrant's Current Report on Form 8-K, dated December 2, 2009, filed on December 4, 2009 (File No. 000-51217)). |
*31.1 | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
*31.2 | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
*32 | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 2013, formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Statements of Operations (Unaudited) for the 13 and 26 Weeks Ended August 3, 2013 and July 28, 2012; (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the 13 and 26 Weeks Ended August 3, 2013 and July 28, 2012 (iii) the Condensed Consolidated Balance Sheets (Unaudited) at August 3, 2013, July 28, 2012 and February 2, 2013; (iv) the Condensed Consolidated Statements of Cash Flows (Unaudited) for the 26 Weeks Ended August 3, 2013 and July 28, 2012; (v) the Condensed Consolidated Statements of Equity (Unaudited) for the 26 Weeks Ended August 3, 2013 and July 28, 2012; and (vi) the Notes to the Condensed Consolidated Financial Statements (Unaudited). |
* | Filed herewith. |
1. | I have reviewed this quarterly report on Form 10-Q 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. |
/s/ Edward S. Lampert |
Edward S. Lampert |
Chairman of the Board and Chief Executive Officer Sears Holdings Corporation |
1. | I have reviewed this quarterly report on Form 10-Q 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. |
/s/ Robert A. Schriesheim |
Robert A. Schriesheim |
Executive Vice President and Chief Financial Officer Sears Holdings Corporation |
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 |
/s/ Robert A. Schriesheim |
Robert A. Schriesheim |
Executive Vice President and Chief Financial Officer |
SUMMARY OF SEGMENT DATA
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Aug. 03, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SEGMENT DATA | SUMMARY OF SEGMENT DATA These reportable segment classifications are based on our business formats, as described in Note 1. The Kmart and Sears Canada formats each represent both an operating and reportable segment. The Sears Domestic reportable segment consists of the aggregation of several business formats. These formats are evaluated by our Chief Operating Decision Maker ("CODM") to make decisions about resource allocation and to assess performance. Each of these segments derives its revenues from the sale of merchandise and related services to customers, primarily in the United States and Canada. The merchandise and service categories are as follows:
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Other Long-Term Liabilities (Detail) (USD $)
In Millions, unless otherwise specified |
Aug. 03, 2013
|
Feb. 02, 2013
|
Jul. 28, 2012
|
---|---|---|---|
Supplemental Financial Information Disclosure [Abstract] | |||
Unearned revenues | $ 858 | $ 843 | $ 791 |
Self-insurance reserves | 705 | 714 | 735 |
Other | 518 | 569 | 598 |
Total | $ 2,081 | $ 2,126 | $ 2,124 |
Condensed Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified |
Aug. 03, 2013
|
Feb. 02, 2013
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Jul. 28, 2012
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---|---|---|---|---|---|---|---|---|---|---|
Current assets | ||||||||||
Cash and cash equivalents | $ 671 | $ 609 | $ 730 | |||||||
Restricted cash | 10 | 9 | 8 | |||||||
Accounts receivable | 641 | 635 | 569 | |||||||
Merchandise inventories | 7,708 | 7,558 | 8,653 | |||||||
Prepaid expenses and other current assets | 470 | 454 | 385 | |||||||
Total current assets | 9,500 | 9,265 | 10,345 | |||||||
Property and equipment, net | 5,786 | 6,053 | 6,341 | |||||||
Goodwill | 379 | 379 | 841 | |||||||
Trade names and other intangible assets | 2,864 | 2,881 | 2,907 | |||||||
Other assets | 749 | 762 | 749 | |||||||
TOTAL ASSETS | 19,278 | 19,340 | 21,183 | |||||||
Current liabilities | ||||||||||
Short-term borrowings | 1,756 | [1] | 1,094 | [1] | 1,176 | [1] | ||||
Current portion of long-term debt and capitalized lease obligations | 75 | 83 | 154 | |||||||
Merchandise payables | 2,903 | 2,761 | 3,088 | |||||||
Other current liabilities | 2,435 | 2,683 | 2,742 | |||||||
Unearned revenues | 925 | 931 | 962 | |||||||
Other taxes | 484 | 480 | 535 | |||||||
Short-term deferred tax liabilities | 382 | 382 | 515 | |||||||
Total current liabilities | 8,960 | 8,414 | 9,172 | |||||||
Long-term debt and capitalized lease obligations | 1,911 | [2] | 1,943 | [2] | 1,970 | [2] | ||||
Pension and postretirement benefits | 2,539 | 2,730 | 2,582 | |||||||
Other long-term liabilities | 2,081 | 2,126 | 2,124 | |||||||
Long-term deferred tax liabilities | 963 | 955 | 839 | |||||||
Total Liabilities | 16,454 | 16,168 | 16,687 | |||||||
EQUITY | ||||||||||
Total Equity | 2,824 | 3,172 | 4,496 | |||||||
TOTAL LIABILITIES AND EQUITY | $ 19,278 | $ 19,340 | $ 21,183 | |||||||
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DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
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6 Months Ended |
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Aug. 03, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS We primarily use derivatives as a risk management tool to decrease our exposure to fluctuations in the foreign currency market, and do not use derivative financial instruments for trading or speculative purposes. Sears Canada is exposed to fluctuations in foreign currency exchange rates due to inventory purchase contracts denominated in U.S. dollars. During the second quarter of 2013, Sears Canada entered into $165 million notional amount of foreign exchange forward contracts. These forward contracts are used to reduce the foreign exchange risk with respect to U.S. dollar denominated assets and liabilities and purchases of goods or services. Sears Canada has merchandise purchase contracts denominated in U.S. currency. The merchandise purchase contracts are considered embedded derivatives under relevant accounting rules. We record mark-to-market adjustments for the fair value of forward contracts and embedded derivatives at the end of each period. Changes in the fair value of any derivatives that are not designated as hedges are recorded in earnings each period. Sears Canada mitigates the risk of foreign currency exchange rates by entering into foreign exchange forward contracts. Since the Company's functional currency is the U.S. dollar, we are not directly exposed to the risk of exchange rate changes due to Sears Canada's contracts, and therefore we do not account for these instruments as a hedge of our foreign currency exposure risk. |
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (Tables)
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Aug. 03, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement Amounts for Other Financial Assets and Liabilities Recorded in Condensed Consolidated Balance Sheets at Fair Value | The following tables provide the fair value measurement amounts for other financial assets and liabilities recorded in our Condensed Consolidated Balance Sheets at fair value at August 3, 2013, July 28, 2012 and February 2, 2013:
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SUPPLEMENTAL FINANCIAL INFORMATION
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2013
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Supplemental Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Other long-term liabilities at August 3, 2013, July 28, 2012 and February 2, 2013 consisted of the following:
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EQUITY (Income Tax Expense Allocated to Each Component of Other Comprehensive Income) (Loss) (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2013
|
Jul. 28, 2012
|
Aug. 03, 2013
|
Jul. 28, 2012
|
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Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, before Tax | $ 49 | $ 47 | $ 97 | $ 95 |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Tax | (1) | (1) | (3) | (3) |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 0 | 3 | 0 | 5 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 0 | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | 0 | 3 | 0 | 5 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | (20) | 5 | (28) | (1) |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | 0 | 1 | 1 | 1 |
Other Comprehensive Income (Loss), before Tax | 29 | 55 | 69 | 99 |
Other Comprehensive Income (Loss), Tax | (1) | 0 | (2) | (2) |
Other comprehensive income (loss) Pension and postretirement adjustments, net of tax amount | ||||
Pension and postretirement adjustments, net of tax | 48 | 46 | 94 | 92 |
Currency translation adjustments, net of tax amount | (20) | 6 | (27) | 0 |
Total other comprehensive income | $ 28 | $ 55 | $ 67 | $ 97 |
Condensed Consolidating Statement of Operations (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2013
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Jul. 28, 2012
|
Aug. 03, 2013
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Jul. 28, 2012
|
|
Condensed Financial Statements, Captions [Line Items] | ||||
Merchandise sales and services | $ 8,871 | $ 9,467 | $ 17,323 | $ 18,737 |
Cost of sales, buying and occupancy | 6,685 | 6,936 | 12,981 | 13,639 |
Selling and administrative | 2,291 | 2,437 | 4,509 | 4,882 |
Depreciation and amortization | 187 | 212 | 378 | 414 |
Impairment charges | 0 | 0 | 8 | 0 |
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | (241) | (15) | (255) | (410) |
Costs and Expenses | 8,922 | 9,570 | 17,621 | 18,525 |
Operating Income (Loss) | (51) | (103) | (298) | 212 |
Interest Expense | (59) | (65) | (120) | (131) |
Interest and investment income | 14 | 9 | 21 | 21 |
Other Nonoperating Income (Expense) | (1) | 1 | (1) | 1 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | (97) | (158) | (398) | 103 |
Income Tax Expense (Benefit) | (30) | 25 | (21) | (42) |
Equity In Earnings Of Subsidiaries | 0 | 0 | 0 | 0 |
Net income (loss) | (127) | (133) | (419) | 61 |
Net Income (Loss) Attributable to Noncontrolling Interest | (67) | 1 | (54) | (4) |
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | (194) | (132) | (473) | 57 |
Parent
|
||||
Condensed Financial Statements, Captions [Line Items] | ||||
Merchandise sales and services | 0 | 0 | 0 | 0 |
Cost of sales, buying and occupancy | 0 | 0 | 0 | 0 |
Selling and administrative | 1 | 1 | 1 | 1 |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Impairment charges | 0 | |||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | 0 | 0 | 0 | 0 |
Costs and Expenses | 1 | 1 | 1 | 1 |
Operating Income (Loss) | (1) | (1) | (1) | (1) |
Interest Expense | (55) | (56) | (110) | (112) |
Interest and investment income | 0 | 0 | 0 | 0 |
Other Nonoperating Income (Expense) | 0 | 0 | 0 | 0 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | (56) | (57) | (111) | (113) |
Income Tax Expense (Benefit) | 0 | 20 | 0 | 39 |
Equity In Earnings Of Subsidiaries | (71) | (96) | (308) | 135 |
Net income (loss) | (127) | (133) | (419) | 61 |
Net Income (Loss) Attributable to Noncontrolling Interest | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | (127) | (133) | (419) | 61 |
Guarantor Subsidiaries
|
||||
Condensed Financial Statements, Captions [Line Items] | ||||
Merchandise sales and services | 8,030 | 8,422 | 15,608 | 16,732 |
Cost of sales, buying and occupancy | 6,121 | 6,276 | 11,888 | 12,375 |
Selling and administrative | 2,219 | 2,287 | 4,306 | 4,570 |
Depreciation and amortization | 142 | 163 | 286 | 316 |
Impairment charges | 8 | |||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | (60) | (14) | (74) | (247) |
Costs and Expenses | 8,422 | 8,712 | 16,414 | 17,014 |
Operating Income (Loss) | (392) | (290) | (806) | (282) |
Interest Expense | (90) | (95) | (184) | (191) |
Interest and investment income | 10 | 9 | 19 | 20 |
Other Nonoperating Income (Expense) | 0 | 0 | 0 | 0 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | (472) | (376) | (971) | (453) |
Income Tax Expense (Benefit) | 37 | 53 | 86 | 35 |
Equity In Earnings Of Subsidiaries | 281 | 144 | 408 | 388 |
Net income (loss) | (154) | (179) | (477) | (30) |
Net Income (Loss) Attributable to Noncontrolling Interest | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | (154) | (179) | (477) | (30) |
Non-Guarantor Subsidiaries
|
||||
Condensed Financial Statements, Captions [Line Items] | ||||
Merchandise sales and services | 1,780 | 1,944 | 3,475 | 3,770 |
Cost of sales, buying and occupancy | 1,037 | 1,103 | 1,949 | 2,133 |
Selling and administrative | 537 | 605 | 1,106 | 1,207 |
Depreciation and amortization | 45 | 49 | 92 | 98 |
Impairment charges | 0 | |||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | (181) | (1) | (181) | (163) |
Costs and Expenses | 1,438 | 1,756 | 2,966 | 3,275 |
Operating Income (Loss) | 342 | 188 | 509 | 495 |
Interest Expense | (22) | (27) | (48) | (54) |
Interest and investment income | 112 | 113 | 224 | 227 |
Other Nonoperating Income (Expense) | (1) | 1 | (1) | 1 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | 431 | 275 | 684 | 669 |
Income Tax Expense (Benefit) | (67) | (48) | (107) | (116) |
Equity In Earnings Of Subsidiaries | 0 | 0 | 0 | 0 |
Net income (loss) | 364 | 227 | 577 | 553 |
Net Income (Loss) Attributable to Noncontrolling Interest | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | 364 | 227 | 577 | 553 |
Eliminations
|
||||
Condensed Financial Statements, Captions [Line Items] | ||||
Merchandise sales and services | (939) | (899) | (1,760) | (1,765) |
Cost of sales, buying and occupancy | (473) | (443) | (856) | (869) |
Selling and administrative | (466) | (456) | (904) | (896) |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Impairment charges | 0 | |||
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property | 0 | 0 | 0 | 0 |
Costs and Expenses | (939) | (899) | (1,760) | (1,765) |
Operating Income (Loss) | 0 | 0 | 0 | 0 |
Interest Expense | 108 | 113 | 222 | 226 |
Interest and investment income | (108) | (113) | (222) | (226) |
Other Nonoperating Income (Expense) | 0 | 0 | 0 | 0 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | 0 | 0 | 0 | 0 |
Income Tax Expense (Benefit) | 0 | 0 | 0 | 0 |
Equity In Earnings Of Subsidiaries | (210) | (48) | (100) | (523) |
Net income (loss) | (210) | (48) | (100) | (523) |
Net Income (Loss) Attributable to Noncontrolling Interest | (67) | 1 | (54) | (4) |
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS | $ (277) | $ (47) | $ (154) | $ (527) |
BORROWINGS (Wholly owned Insurance Subsidiary and Intercompany Securities) (Details) (USD $)
In Billions, unless otherwise specified |
May 31, 2006
|
Nov. 30, 2003
|
Nov. 30, 2003
Subsidiaries
Store
|
Aug. 03, 2013
Securitized trademark rights
|
Feb. 02, 2013
Securitized trademark rights
|
Jul. 28, 2012
Securitized trademark rights
|
Aug. 03, 2013
Securitized real estate assets
|
Feb. 02, 2013
Securitized real estate assets
|
Jul. 28, 2012
Securitized real estate assets
|
---|---|---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||||||
Number of stores | 125 | ||||||||
Mortgage-backed securities owned | $ 1.3 | ||||||||
Asset-backed securities issued | 1.8 | ||||||||
Net book value of the securitized assets | $ 1.0 | $ 1.0 | $ 1.0 | $ 0.7 | $ 0.8 | $ 0.8 |
BENEFIT PLANS (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2013
|
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Total Net Periodic Benefit Expense for Retirement Plans | The following table summarizes the components of total net periodic benefit expense, recorded within Selling and administrative on the Condensed Consolidated Statements of Operations, for our retirement plans:
|
EQUITY (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2013
|
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accumulated Other Comprehensive Loss | The following table displays the components of accumulated other comprehensive loss:
Pension and postretirement adjustments relate to the net actuarial loss on our pension and postretirement plans recognized as a component of accumulated other comprehensive loss. Accumulated other comprehensive loss attributable to noncontrolling interests at August 3, 2013, July 28, 2012, and February 2, 2013 was $71 million, $7 million and $64 million, respectively. |
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Income Tax Expense Allocated to Each Component of Other Comprehensive Income (Loss) | Income tax expense allocated to each component of other comprehensive income (loss) was as follows:
|
EQUITY (Components of Accumulated Other Comprehensive Loss) (Detail) (USD $)
In Millions, unless otherwise specified |
Aug. 03, 2013
|
Feb. 02, 2013
|
Jul. 28, 2012
|
---|---|---|---|
Stockholders' Equity Note [Abstract] | |||
Pension and postretirement adjustments (net of tax of $(0), $(442) and $(492), respectively) | $ (1,319) | $ (1,408) | $ (1,485) |
Currency translation adjustments (net of tax of $(0), $(34) and $(26), respectively) | (66) | (51) | (29) |
Accumulated other comprehensive loss | $ (1,385) | $ (1,459) | $ (1,514) |
BORROWINGS (Domestic Credit Agreement) (Details)
|
3 Months Ended | 3 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 03, 2013
USD ($)
|
Feb. 02, 2013
USD ($)
|
Jul. 28, 2012
USD ($)
|
Apr. 30, 2011
Domestic Credit Agreement
USD ($)
|
Aug. 03, 2013
Domestic Credit Agreement
USD ($)
|
Feb. 02, 2013
Domestic Credit Agreement
USD ($)
|
Jul. 28, 2012
Domestic Credit Agreement
USD ($)
|
Aug. 03, 2013
Domestic Credit Agreement
Second Lien
USD ($)
|
Apr. 30, 2011
Domestic Credit Agreement
Second Lien
USD ($)
|
Apr. 30, 2011
Minimum
Domestic Credit Agreement
|
Apr. 30, 2011
Minimum
Domestic Credit Agreement
LIBOR
|
Apr. 30, 2011
Minimum
Domestic Credit Agreement
Base Rate
|
Apr. 30, 2011
Maximum
Domestic Credit Agreement
USD ($)
|
Apr. 30, 2011
Maximum
Domestic Credit Agreement
LIBOR
|
Apr. 30, 2011
Maximum
Domestic Credit Agreement
Base Rate
|
Apr. 30, 2011
Letter of Credit
Domestic Credit Agreement
USD ($)
|
Aug. 03, 2013
Sears Canada
Five Year Revolving Credit Facility
USD ($)
|
Aug. 03, 2013
Sears Canada
Five Year Revolving Credit Facility
CAD
|
Feb. 02, 2013
Sears Canada
Five Year Revolving Credit Facility
USD ($)
|
Feb. 02, 2013
Sears Canada
Five Year Revolving Credit Facility
CAD
|
Jul. 28, 2012
Sears Canada
Five Year Revolving Credit Facility
USD ($)
|
Jul. 28, 2012
Sears Canada
Five Year Revolving Credit Facility
CAD
|
Sep. 30, 2010
Sears Canada
Five Year Revolving Credit Facility
USD ($)
|
|
Debt Instrument [Line Items] | |||||||||||||||||||||||
Credit agreement | $ 3,275,000,000 | $ 2,000,000,000 | $ 1,500,000,000 | $ 800,000,000 | |||||||||||||||||||
Credit agreement, additional borrowing capacity | 1,000,000,000 | ||||||||||||||||||||||
Credit agreement, interest rates margin | 2.00% | 1.00% | 2.50% | 1.50% | |||||||||||||||||||
Commitment fees | 0.375% | 0.625% | |||||||||||||||||||||
Line of Credit Facility, Amount Outstanding | 1,509,000,000 | 749,000,000 | 941,000,000 | 1,500,000,000 | 749,000,000 | 941,000,000 | 1,200,000,000 | 0 | 0 | 0 | |||||||||||||
Fair value of long-term debt | 1,500,000,000 | 1,400,000,000 | 1,400,000,000 | ||||||||||||||||||||
Letters of credit outstanding amount | 680,000,000 | 754,000,000 | 744,000,000 | ||||||||||||||||||||
Credit Agreement available amount | $ 1,100,000,000 | $ 1,800,000,000 | $ 1,600,000,000 | $ 760,000,000 | $ 530,000,000 | 551,000,000 | $ 503,000,000 | 502,000,000 | $ 542,000,000 | 545,000,000 | |||||||||||||
Limit of availability under the credit facility to make restricted payments | 15.00% | ||||||||||||||||||||||
Fixed charge ratio at the last day of any quarter | 1.0 | ||||||||||||||||||||||
Credit agreement, covenant terms | The Domestic Credit Agreement limits our ability to make restricted payments, including dividends and share repurchases, subject to specified exceptions that are available if, in each case, no event of default under the credit facility exists immediately before giving effect to the restricted payment. These include exceptions that require that projected availability under the credit facility, as defined, is at least 15% and an exception that requires that the restricted payment is funded from cash on hand and not borrowings under the credit facility. The Domestic Credit Agreement also imposes various other requirements, which take effect if availability falls below designated thresholds, including a cash dominion requirement and a requirement that the fixed charge ratio at the last day of any quarter be not less than 1.0 to 1.0. |
Fair Value Measurement Amounts for Other Financial Assets and Liabilities Recorded in Condensed Consolidated Balance Sheets at Fair Value (Detail) (USD $)
In Millions, unless otherwise specified |
Aug. 03, 2013
|
Feb. 02, 2013
|
Jul. 28, 2012
|
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Fair Value Measurements [Line Items] | ||||||||||
Cash equivalents | $ 211 | [1] | $ 181 | [1] | $ 274 | [1] | ||||
Restricted cash | 10 | [2] | 9 | [2] | 8 | [2] | ||||
Foreign currency derivative assets | 1 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | (1) | |||||||||
Total | 221 | 190 | 282 | |||||||
Level 1
|
||||||||||
Fair Value Measurements [Line Items] | ||||||||||
Cash equivalents | 211 | [1] | 181 | [1] | 274 | [1] | ||||
Restricted cash | 10 | [2] | 9 | [2] | 8 | [2] | ||||
Foreign currency derivative assets | 0 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | 0 | |||||||||
Total | 221 | 190 | 282 | |||||||
Level 2
|
||||||||||
Fair Value Measurements [Line Items] | ||||||||||
Cash equivalents | 0 | [1] | 0 | [1] | 0 | [1] | ||||
Restricted cash | 0 | [2] | 0 | [2] | 0 | [2] | ||||
Foreign currency derivative assets | 1 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | (1) | |||||||||
Total | 0 | 0 | 0 | |||||||
Level 3
|
||||||||||
Fair Value Measurements [Line Items] | ||||||||||
Cash equivalents | 0 | [1] | 0 | [1] | 0 | [1] | ||||
Restricted cash | 0 | [2] | 0 | [2] | 0 | [2] | ||||
Foreign currency derivative assets | 0 | |||||||||
Foreign Currency Contracts, Liability, Fair Value Disclosure | 0 | |||||||||
Total | $ 0 | $ 0 | $ 0 | |||||||
|
BENEFIT PLANS Summary of Components of Total Net Periodic Benefit Expense for Retirement Plans (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2013
|
Jul. 28, 2012
|
Aug. 03, 2013
|
Jul. 28, 2012
|
|
Components of net periodic expense: | ||||
Interest cost | $ 75 | $ 96 | $ 150 | $ 192 |
Expected return on plan assets | (77) | (93) | (154) | (186) |
Amortization of experience losses | 49 | 47 | 97 | 95 |
Net periodic expense | $ 47 | $ 50 | $ 93 | $ 101 |
BASIS OF PRESENTATION - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Aug. 03, 2013
|
Jul. 28, 2012
|
Aug. 03, 2013
|
Jul. 28, 2012
|
Aug. 03, 2013
United States Full Line And Specialty Retail Stores [Member] [Domain]
Store
|
Aug. 03, 2013
Sears Canada Full Line And Specialty Retail Stores
Store
|
Aug. 03, 2013
Sears Canada
|
Feb. 02, 2013
Sears Canada
|
Jul. 28, 2012
Sears Canada
|
|
Significant Accounting Policies [Line Items] | |||||||||
Number of stores | 2,036 | 461 | |||||||
Percentage of ownership interest | 51.00% | 51.00% | 96.00% | ||||||
Depreciation expense | $ 181 | $ 199 | $ 361 | $ 388 |
Store Closing Costs Recorded (Detail) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 03, 2013
|
Jul. 28, 2012
|
Aug. 03, 2013
|
Jul. 28, 2012
|
|||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | $ 11 | $ 25 | $ 33 | $ 59 | ||||||||||
Depreciation expense | 181 | 199 | 361 | 388 | ||||||||||
Kmart
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 8 | 9 | 17 | 12 | ||||||||||
Sears Domestic
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 3 | 14 | 14 | 45 | ||||||||||
Sears Canada
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 2 | 2 | 2 | |||||||||||
Markdowns
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 7 | [1] | 0 | [1] | 15 | [1] | 0 | [1] | ||||||
Markdowns | Kmart
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 4 | [1] | 0 | [1] | 9 | [1] | 0 | [1] | ||||||
Markdowns | Sears Domestic
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 3 | [1] | 0 | [1] | 6 | [1] | 0 | [1] | ||||||
Markdowns | Sears Canada
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 0 | [1] | 0 | [1] | 0 | [1] | ||||||||
Severance Costs
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 2 | [2] | 2 | [2] | 6 | 2 | [2] | |||||||
Severance Costs | Kmart
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 1 | [2] | 0 | [2] | 2 | [2] | 0 | [2] | ||||||
Severance Costs | Sears Domestic
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 1 | [2] | 0 | [2] | 2 | [2] | 0 | [2] | ||||||
Severance Costs | Sears Canada
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 2 | [2] | 2 | [2] | 2 | [2] | ||||||||
Lease Termination Costs
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | (3) | [2] | 16 | [2] | (7) | 50 | [2] | |||||||
Lease Termination Costs | Kmart
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 0 | [2] | 8 | [2] | (1) | [2] | 11 | [2] | ||||||
Lease Termination Costs | Sears Domestic
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | (3) | [2] | 8 | [2] | (6) | [2] | 39 | [2] | ||||||
Lease Termination Costs | Sears Canada
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 0 | [2] | 0 | [2] | 0 | [2] | ||||||||
Other Charges
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 4 | [2] | 0 | [2] | 9 | 0 | [2] | |||||||
Other Charges | Kmart
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 3 | [2] | 0 | [2] | 6 | [2] | 0 | [2] | ||||||
Other Charges | Sears Domestic
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 1 | [2] | 0 | [2] | 3 | [2] | 0 | [2] | ||||||
Other Charges | Sears Canada
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 0 | [2] | 0 | [2] | 0 | [2] | ||||||||
Impairment and Accelerated Depreciation
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 1 | [3] | 7 | [3] | 10 | [3] | 7 | [3] | ||||||
Impairment charges | 8 | |||||||||||||
Depreciation expense | 2 | |||||||||||||
Impairment and Accelerated Depreciation | Kmart
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 0 | [3] | 1 | [3] | 1 | [3] | 1 | [3] | ||||||
Impairment and Accelerated Depreciation | Sears Domestic
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | 1 | [3] | 6 | [3] | 9 | [3] | 6 | [3] | ||||||
Impairment and Accelerated Depreciation | Sears Canada
|
||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Store closing costs | $ 0 | [3] | $ 0 | [3] | $ 0 | [3] | ||||||||
|
STORE CLOSING COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2013
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Store Closing Costs, Impairments and Real Estate Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Store Closing Costs Recorded | Store closing costs recorded for the 13- and 26- week periods ended August 3, 2013 and July 28, 2012 were as follows:
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Store Closing Cost Accruals | Store closing cost accruals of $157 million, $165 million and $193 million at August 3, 2013, July 28, 2012 and February 2, 2013, respectively, were as follows:
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Condensed Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
---|---|---|
Aug. 03, 2013
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Jul. 28, 2012
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CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (419) | $ 61 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation and amortization | 378 | 414 |
Impairment charges | 8 | 0 |
Gain on sales of assets | (255) | (410) |
Pension and postretirement plan contributions | (176) | (164) |
Settlement of Canadian dollar hedges | 0 | 6 |
Change in operating assets and liabilities (net of acquisitions and dispositions): | ||
Deferred income taxes | 12 | 32 |
Merchandise inventories | (183) | (248) |
Merchandise payables | 157 | 178 |
Income and other taxes | (12) | 14 |
Mark-to-market adjustments and settlements on Sears Canada U.S. dollar collar contracts | (1) | 0 |
Other operating assets | (43) | 91 |
Other operating liabilities | (181) | (46) |
Net cash used in operating activities | (715) | (72) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sales of property and investments | 287 | 456 |
Net (increase) decrease in investments and restricted cash | (1) | (1) |
Purchases of property and equipment | (116) | (161) |
Net cash provided by (used in) investing activities | 170 | 294 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from debt issuances | 2 | 2 |
Repayments of long-term debt | (46) | (231) |
Increase (decrease) in short-term borrowings, primarily 90 days or less | 662 | 1 |
Purchase of Sears Canada shares | 0 | (10) |
Net cash provided by (used in) financing activities | 618 | (238) |
Effect of exchange rate changes on cash and cash equivalents | (11) | (1) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 62 | (17) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 609 | 747 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 671 | 730 |
Supplemental Cash Flow Data: | ||
Income taxes paid, net of refunds | 32 | 20 |
Cash interest paid | 98 | 100 |
Unpaid liability to acquire equipment and software | $ 43 | $ 50 |
BASIS OF PRESENTATION
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6 Months Ended |
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Aug. 03, 2013
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Sears Holdings Corporation (“Holdings”) is the parent company of Kmart Holding Corporation (“Kmart”) and Sears, Roebuck and Co. (“Sears”). Holdings (together with its subsidiaries, “we,” “us,” “our,” or the “Company”) was formed as a Delaware corporation in 2004 in connection with the merger of Kmart and Sears (the “Merger”), on March 24, 2005. We are an integrated retailer with 2,036 full-line and specialty retail stores in the United States, operating through Kmart and Sears, and 461 full-line and specialty retail stores in Canada operating through Sears Canada Inc. (“Sears Canada”), a 51%-owned subsidiary. We have three reportable segments: Kmart, Sears Domestic and Sears Canada. These interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full fiscal year. The retail business is seasonal in nature, and we generate a high proportion of our revenues and operating cash flows during the fourth quarter of our fiscal year, which includes the holiday season. These interim financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended February 2, 2013. Depreciation Expense Depreciation expense included within depreciation and amortization expense reported on the Condensed Consolidated Statements of Operations was $181 million, $361 million, $199 million and $388 million for the 13- and 26- week periods ended August 3, 2013 and July 28, 2012, respectively. Separation of Sears Hometown and Outlet Businesses On October 11, 2012, we completed the separation of our Sears Hometown and Outlet businesses through a rights offering transaction. We accounted for this separation in accordance with accounting standards applicable to common control transactions as ESL Investments, Inc. (together with its affiliated funds, "ESL"), at the completion of the separation, was a majority shareholder of Holdings and was a majority shareholder of Sears Hometown and Outlet Stores, Inc. ("SHO") as a result of exercising subscription rights pursuant to the rights offering. Accordingly, we classified the difference between the proceeds received and carrying value of net assets contributed to SHO as a reduction of capital in excess of par value in the Consolidated Statement of Equity for the period ended February 2, 2013. In connection with the separation, Holdings and certain of its subsidiaries entered into various agreements with SHO under the terms described in Note 14. Because of the various agreements with SHO, the Company has determined that it has significant continuing cash flows with SHO. Accordingly, the operating results for the Sears Hometown and Outlet businesses through the date of the separation are presented within the consolidated operations of Holdings and the Sears Domestic segment in the accompanying Condensed Consolidated Financial Statements. Additionally, the Company has guaranteed lease obligations for certain SHO store leases that were assigned as a result of the separation. See Note 14 to the Condensed Consolidated Financial Statements for further information related to the agreements with SHO. |
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