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x
|
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
o
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Delaware
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20-1920798
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(State of Incorporation)
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(I.R.S. Employer Identification No.)
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3333 Beverly Road, Hoffman Estates, Illinois
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60179
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
|
|
Name of Each Exchange on Which Registered
|
Common Shares, par value $0.01 per share
|
|
The NASDAQ Stock Market
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Item 1.
|
Business
|
•
|
Full-line Stores—
705
stores, of which
697
are Full-line stores, located across all
50
states and
Puerto Rico
. These stores are primarily mall-based locations averaging
138,000
square feet. Full-line stores offer a wide array of products and service offerings across many merchandise categories, including appliances, consumer electronics/connected solutions, tools, sporting goods, outdoor living, lawn and garden equipment, certain automotive services and products, such as tires and batteries, home fashion products, as well as apparel, footwear, jewelry and accessories for the whole family. Our product offerings include our proprietary Kenmore, Craftsman, DieHard, Bongo, Covington, Canyon River Blues, Everlast, Metaphor, Roebuck & Co., Outdoor Life and Structure brand merchandise, and other brand merchandise such as Roadhandler, Ty Pennington Style, Levi's and WallyHome. Lands' End, Inc. continues to operate
227
"store within a store" departments inside Sears Domestic Full-line locations. We also have
620
Sears Auto Centers operating in association with Full-line stores and
seven
Sears Auto Centers operating out of Sears Essentials/Grand stores. In addition, there are
24
free-standing Sears Auto Centers that operate independently of Full-line stores. Sears extends the availability of its product selection through the use of its sears.com and shopyourway.com website, which offers an assortment of home, apparel and accessory merchandise and provides members and customers the option of buying through a mobile app or online and picking up their merchandise in one of our Full-line or Kmart stores.
|
•
|
Specialty Stores—
26
specialty stores (primarily consisting of the
24
free-standing Sears Auto Centers noted above) located in free-standing, off-mall locations or high-traffic neighborhood shopping centers.
|
•
|
Commercial Sales—We sell Sears merchandise, parts and services to commercial customers through our business-to-business Sears Commercial Sales and Appliance Builder/Distributor businesses.
|
•
|
Home Services—Product Repair Services, the nation's largest product repair service provider, is a key element in our active relationship with more than 37 million households. With approximately 6,700 service technicians making over 12 million service and installation calls annually, this business delivers a broad range of retail-related residential and commercial services across all 50 states, Puerto Rico, Guam and the Virgin Islands under either the Sears Parts & Repair Services or A&E Factory Service trade names. Commercial and residential customers can obtain parts and repair services for all major brands of products within the appliances, lawn and garden equipment, consumer electronics, floor care products, and heating and cooling systems categories. We also provide repair parts with supporting instructions for "do-it-yourself" members and customers through our searspartsdirect.com website. This business also offers protection agreements, product installation services and Kenmore and Carrier brand residential heating and cooling systems. Home Services also includes home improvement services (primarily siding, windows, cabinet refacing, kitchen remodeling, roofing, carpet and upholstery cleaning, air duct cleaning, and garage door installation and repair) provided through Sears Home Improvement Services and Sears Home & Business Franchises.
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Item 1A.
|
Risk Factors
|
•
|
actions by our competitors, including opening of new stores in our existing markets or changes to the way these competitors go to market online,
|
•
|
seasonal fluctuations due to weather conditions,
|
•
|
changes in our merchandise strategy and mix,
|
•
|
changes in population and other demographics, and
|
•
|
timing of our promotional events.
|
•
|
potential economic and political instability in countries where our suppliers are located,
|
•
|
increases in shipping costs,
|
•
|
manufacturing and transportation delays and interruptions,
|
•
|
supplier compliance with applicable laws, including labor and environmental laws, and with our global compliance program for suppliers and factories,
|
•
|
adverse fluctuations in currency exchange rates, and
|
•
|
changes in U.S. and foreign laws affecting the importation and taxation of goods, including duties, tariffs and quotas, or changes in the enforcement of those laws.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
|
|
Kmart
|
|
Sears Domestic
|
|||||
State / Territory
|
|
Discount Stores & Super Centers
|
|
Full-line Mall Stores & Essentials/Grand Stores
|
|
Specialty Stores
|
|||
Alabama
|
|
17
|
|
|
7
|
|
|
—
|
|
Alaska
|
|
—
|
|
|
3
|
|
|
—
|
|
Arizona
|
|
13
|
|
|
13
|
|
|
—
|
|
Arkansas
|
|
5
|
|
|
7
|
|
|
—
|
|
California
|
|
83
|
|
|
76
|
|
|
4
|
|
Colorado
|
|
12
|
|
|
10
|
|
|
—
|
|
Connecticut
|
|
6
|
|
|
8
|
|
|
—
|
|
Delaware
|
|
4
|
|
|
3
|
|
|
—
|
|
Florida
|
|
47
|
|
|
51
|
|
|
1
|
|
Georgia
|
|
23
|
|
|
19
|
|
|
—
|
|
Hawaii
|
|
7
|
|
|
4
|
|
|
—
|
|
Idaho
|
|
7
|
|
|
4
|
|
|
—
|
|
Illinois
|
|
35
|
|
|
25
|
|
|
5
|
|
Indiana
|
|
23
|
|
|
14
|
|
|
1
|
|
Iowa
|
|
16
|
|
|
6
|
|
|
1
|
|
Kansas
|
|
8
|
|
|
5
|
|
|
1
|
|
Kentucky
|
|
24
|
|
|
6
|
|
|
—
|
|
Louisiana
|
|
10
|
|
|
12
|
|
|
1
|
|
Maine
|
|
6
|
|
|
4
|
|
|
—
|
|
Maryland
|
|
16
|
|
|
18
|
|
|
—
|
|
Massachusetts
|
|
17
|
|
|
20
|
|
|
—
|
|
Michigan
|
|
51
|
|
|
21
|
|
|
—
|
|
Minnesota
|
|
11
|
|
|
11
|
|
|
—
|
|
Mississippi
|
|
5
|
|
|
4
|
|
|
—
|
|
Missouri
|
|
17
|
|
|
11
|
|
|
—
|
|
Montana
|
|
8
|
|
|
1
|
|
|
—
|
|
Nebraska
|
|
6
|
|
|
4
|
|
|
—
|
|
Nevada
|
|
10
|
|
|
5
|
|
|
1
|
|
New Hampshire
|
|
4
|
|
|
6
|
|
|
—
|
|
New Jersey
|
|
27
|
|
|
20
|
|
|
1
|
|
New Mexico
|
|
11
|
|
|
7
|
|
|
—
|
|
New York
|
|
46
|
|
|
39
|
|
|
5
|
|
North Carolina
|
|
29
|
|
|
18
|
|
|
—
|
|
North Dakota
|
|
5
|
|
|
4
|
|
|
—
|
|
Ohio
|
|
47
|
|
|
35
|
|
|
—
|
|
Oklahoma
|
|
7
|
|
|
7
|
|
|
—
|
|
Oregon
|
|
7
|
|
|
6
|
|
|
1
|
|
Pennsylvania
|
|
81
|
|
|
36
|
|
|
—
|
|
Rhode Island
|
|
1
|
|
|
2
|
|
|
—
|
|
South Carolina
|
|
17
|
|
|
9
|
|
|
—
|
|
South Dakota
|
|
8
|
|
|
2
|
|
|
—
|
|
Tennessee
|
|
28
|
|
|
15
|
|
|
—
|
|
Texas
|
|
19
|
|
|
57
|
|
|
1
|
|
Utah
|
|
12
|
|
|
5
|
|
|
1
|
|
Vermont
|
|
2
|
|
|
1
|
|
|
—
|
|
Virginia
|
|
27
|
|
|
19
|
|
|
—
|
|
Washington
|
|
11
|
|
|
17
|
|
|
1
|
|
West Virginia
|
|
15
|
|
|
6
|
|
|
—
|
|
Wisconsin
|
|
15
|
|
|
11
|
|
|
—
|
|
Wyoming
|
|
9
|
|
|
2
|
|
|
—
|
|
Puerto Rico
|
|
21
|
|
|
9
|
|
|
1
|
|
U.S. Virgin Islands
|
|
4
|
|
|
—
|
|
|
—
|
|
Guam
|
|
1
|
|
|
—
|
|
|
—
|
|
Totals
|
|
941
|
|
|
705
|
|
|
26
|
|
|
|
Kmart
|
|
Sears Domestic
|
|||||
|
|
Discount Stores & Super Centers
|
|
Full-line Mall Stores & Essentials/Grand Stores
|
|
Specialty Stores
|
|||
Owned
|
|
97
|
|
|
302
|
|
|
20
|
|
Leased
|
|
844
|
|
|
403
|
|
|
6
|
|
January 30, 2016
|
|
941
|
|
|
705
|
|
|
26
|
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Name
|
|
Position
|
|
Date First Became an Executive Officer
|
|
Age
|
Edward S. Lampert
|
|
Chairman of the Board and Chief Executive Officer
|
|
2013
|
|
53
|
Jeffrey A. Balagna
|
|
Executive Vice President
|
|
2013
|
|
55
|
Robert A. Schriesheim
|
|
Executive Vice President and Chief Financial Officer
|
|
2011
|
|
55
|
Girish Lakshman
|
|
President, Fulfillment - Supply Chain and Sourcing
|
|
2015
|
|
51
|
Kristin M. Coleman
|
|
Senior Vice President, General Counsel and Corporate Secretary
|
|
2014
|
|
47
|
Joelle Maher
|
|
President and Chief Member Officer, Sears
|
|
2015
|
|
49
|
Leena Munjal
|
|
Senior Vice President, Customer Experience and Integrated Retail
|
|
2013
|
|
39
|
Alasdair James
|
|
President and Chief Member Officer, Kmart
|
|
2014
|
|
45
|
Robert A. Riecker
|
|
Vice President, Controller and Chief Accounting Officer
|
|
2012
|
|
51
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Fiscal Year 2015
|
||||||||||||||
|
Sears Holdings
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Common stock price
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
46.23
|
|
|
$
|
44.72
|
|
|
$
|
28.31
|
|
|
$
|
25.24
|
|
Low
|
$
|
31.35
|
|
|
$
|
20.86
|
|
|
$
|
19.08
|
|
|
$
|
16.27
|
|
|
|
||||||||||||||
|
Fiscal Year 2014
|
||||||||||||||
|
Sears Holdings
|
||||||||||||||
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Common stock price
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
51.06
|
|
|
$
|
45.00
|
|
|
$
|
40.78
|
|
|
$
|
48.25
|
|
Low
|
$
|
31.26
|
|
|
$
|
34.88
|
|
|
$
|
24.10
|
|
|
$
|
30.70
|
|
Plan Category
|
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and
rights
|
|
Weighted-average
exercise price of
outstanding
options,
warrants and
rights
|
|
Number of securities
remaining available for
future issuance
under equity
compensation plans*
|
Equity compensation plans approved by security holders
|
—
|
|
—
|
|
4,979,161
|
Equity compensation plans not approved by security holders
|
—
|
|
—
|
|
—
|
Total
|
—
|
|
—
|
|
4,979,161
|
*
|
Represents shares of common stock that may be issued pursuant to our 2006 Stock Plan or our 2013 Stock Plan. Awards under the 2006 Stock Plan may be restricted stock awards, a grant of shares of our common stock in connection with an award made under a long-term incentive plan, or certain other stock-based awards. Awards under the 2013 Stock Plan may be restricted stock, stock unit awards, incentive stock options, nonqualified stock options, stock appreciation rights, or certain other stock-based awards. The 2013 Stock Plan also allows common stock of Holdings to be awarded in settlement of an incentive award under the Sears Holdings Corporation Umbrella Incentive Program (and any incentive program established thereunder). The shares shown consist of 359,684 shares of common stock that are available for future issuance pursuant to our 2006 Stock Plan and 4,619,477 shares of common stock that are available for future issuance pursuant to our 2013 Stock Plan. Excludes shares covered by an outstanding plan award that, subsequent to
January 30, 2016
, ultimately are not delivered on an unrestricted basis (for example, because the award is forfeited, canceled, settled in cash or used to satisfy tax withholding obligations).
|
|
Jan 28, 2011
|
|
Jan 27, 2012
|
|
Feb 1, 2013
|
|
Jan 31, 2014
|
|
Jan 30, 2015
|
|
Jan 29, 2016
|
||||||||||||
Sears Holdings
|
$
|
100.00
|
|
|
$
|
60.01
|
|
|
$
|
72.91
|
|
|
$
|
55.77
|
|
|
$
|
64.70
|
|
|
$
|
41.38
|
|
S&P 500 Index
|
$
|
100.00
|
|
|
$
|
105.32
|
|
|
$
|
123.85
|
|
|
$
|
148.98
|
|
|
$
|
170.15
|
|
|
$
|
169.01
|
|
S&P 500 Retailing Index
|
$
|
100.00
|
|
|
$
|
113.42
|
|
|
$
|
144.15
|
|
|
$
|
180.63
|
|
|
$
|
216.93
|
|
|
$
|
253.36
|
|
S&P 500 Department Stores Index
|
$
|
100.00
|
|
|
$
|
113.09
|
|
|
$
|
116.58
|
|
|
$
|
135.30
|
|
|
$
|
168.81
|
|
|
$
|
121.73
|
|
|
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 |
||||||||
November 1, 2015 to November 28, 2015
|
1,048
|
|
|
$
|
19.96
|
|
|
—
|
|
|
$
|
—
|
|
|
|
||
November 29, 2015 to January 2, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
January 3, 2016 to January 30, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||
Total
|
1,048
|
|
|
$
|
19.96
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
503,907,832
|
|
(1)
|
Consists entirely of
1,048
shares acquired from associates to meet withholding tax requirements from the vesting of restricted stock.
|
(2)
|
Our common share repurchase program was initially announced on September 14, 2005 and has a total authorization since inception of the program of $6.5 billion, including the authorizations to purchase up to an additional $500 million of common stock on each of December 17, 2009 and May 2, 2011. The program has no stated expiration date.
|
Item 6.
|
Selected Financial Data
|
|
Fiscal
|
||||||||||||||||||
dollars in millions, except per share and store data
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Summary of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
(1)
|
$
|
25,146
|
|
|
$
|
31,198
|
|
|
$
|
36,188
|
|
|
$
|
39,854
|
|
|
$
|
41,567
|
|
Domestic comparable store sales %
|
(9.2
|
)%
|
|
(1.8
|
)%
|
|
(3.8
|
)%
|
|
(2.5
|
)%
|
|
(2.2
|
)%
|
|||||
Net loss from continuing operations attributable to Holdings' shareholders
(2)
|
(1,129
|
)
|
|
(1,682
|
)
|
|
(1,365
|
)
|
|
(930
|
)
|
|
(3,113
|
)
|
|||||
Per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss from continuing operations attributable to Holdings' shareholders
|
$
|
(10.59
|
)
|
|
$
|
(15.82
|
)
|
|
$
|
(12.87
|
)
|
|
$
|
(8.78
|
)
|
|
$
|
(29.15
|
)
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss from continuing operations attributable to Holdings' shareholders
|
$
|
(10.59
|
)
|
|
$
|
(15.82
|
)
|
|
$
|
(12.87
|
)
|
|
$
|
(8.78
|
)
|
|
$
|
(29.15
|
)
|
Holdings' book value per common share
|
$
|
(18.40
|
)
|
|
$
|
(8.93
|
)
|
|
$
|
16.34
|
|
|
$
|
25.89
|
|
|
$
|
40.26
|
|
Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total assets
|
$
|
11,337
|
|
|
$
|
13,185
|
|
|
$
|
18,234
|
|
|
$
|
19,320
|
|
|
$
|
21,357
|
|
Long-term debt
|
1,971
|
|
|
2,878
|
|
|
2,531
|
|
|
1,560
|
|
|
1,668
|
|
|||||
Long-term capital lease obligations
|
137
|
|
|
210
|
|
|
275
|
|
|
364
|
|
|
395
|
|
|||||
Capital expenditures
|
211
|
|
|
270
|
|
|
329
|
|
|
378
|
|
|
432
|
|
|||||
Adjusted EBITDA
(3)
|
(836
|
)
|
|
(718
|
)
|
|
(487
|
)
|
|
428
|
|
|
51
|
|
|||||
Domestic Adjusted EBITDA
(3)
|
(836
|
)
|
|
(647
|
)
|
|
(490
|
)
|
|
359
|
|
|
(50
|
)
|
|||||
Domestic Adjusted EBITDA excluding Seritage/JV rent
(3)
|
(703
|
)
|
|
(647
|
)
|
|
(490
|
)
|
|
359
|
|
|
(50
|
)
|
|||||
Number of stores
|
1,672
|
|
|
1,725
|
|
|
2,429
|
|
|
2,548
|
|
|
4,010
|
|
(1)
|
We follow a retail-based financial reporting calendar. Accordingly, the fiscal year ended February 2, 2013 contained 53 weeks, while all other years presented contained 52 weeks.
|
(2)
|
The periods presented were impacted by certain significant items, which affected the comparability of amounts reflected in the above selected financial data. For
2015
,
2014
and
2013
, these significant items are discussed within Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations." 2012 results include the impact of non-cash charges of domestic pension settlements of $452 million, domestic pension expense of $103 million, domestic store closings and severance of $109 million, domestic transaction costs of $6 million, domestic gain on the sales of assets of $160 million and the results of the Lands' End, Sears Canada and Sears Hometown and Outlet businesses that were included in the results of our operations prior to the respective separations of $50 million, $(51) million and $51 million, respectively. 2011 results include the impact of non-cash charges of $551 million related to the impairment of goodwill balances, a $1.8 billion non-cash charge to establish a valuation allowance against our domestic deferred tax assets, domestic pension expense of $46 million, store closings and severance of $225 million, mark-to-market losses of $3 million on Sears Canada hedge transactions, gain on the sale of real estate of $20 million, and hurricane losses of $7 million.
|
(3)
|
See "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 for a reconciliation of this measure to GAAP and a discussion of management’s reasoning for using such measure.
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Overview of Holdings
|
•
|
Results of Operations:
|
•
|
Analysis of Consolidated Financial Condition
|
•
|
Contractual Obligations and Off-Balance Sheet Arrangements
|
•
|
Application of Critical Accounting Policies and Estimates
|
•
|
Cautionary Statement Regarding Forward-Looking Information
|
millions, except per share data
|
|
2015
|
|
2014
|
|
2013
|
||||||
REVENUES
|
|
|
|
|
|
|
||||||
Merchandise sales and services
|
|
$
|
25,146
|
|
|
$
|
31,198
|
|
|
$
|
36,188
|
|
COSTS AND EXPENSES
|
|
|
|
|
|
|
||||||
Cost of sales, buying and occupancy
|
|
19,336
|
|
|
24,049
|
|
|
27,433
|
|
|||
Gross margin dollars
|
|
5,810
|
|
|
7,149
|
|
|
8,755
|
|
|||
Gross margin rate
|
|
23.1
|
%
|
|
22.9
|
%
|
|
24.2
|
%
|
|||
Selling and administrative
|
|
6,857
|
|
|
8,220
|
|
|
9,384
|
|
|||
Selling and administrative expense as a percentage of revenues
|
|
27.3
|
%
|
|
26.3
|
%
|
|
25.9
|
%
|
|||
Depreciation and amortization
|
|
422
|
|
|
581
|
|
|
732
|
|
|||
Impairment charges
|
|
274
|
|
|
63
|
|
|
233
|
|
|||
Gain on sales of assets
|
|
(743
|
)
|
|
(207
|
)
|
|
(667
|
)
|
|||
Total costs and expenses
|
|
26,146
|
|
|
32,706
|
|
|
37,115
|
|
|||
Operating loss
|
|
(1,000
|
)
|
|
(1,508
|
)
|
|
(927
|
)
|
|||
Interest expense
|
|
(323
|
)
|
|
(313
|
)
|
|
(254
|
)
|
|||
Interest and investment income (loss)
|
|
(62
|
)
|
|
132
|
|
|
207
|
|
|||
Other income
|
|
—
|
|
|
4
|
|
|
2
|
|
|||
Loss before income taxes
|
|
(1,385
|
)
|
|
(1,685
|
)
|
|
(972
|
)
|
|||
Income tax (expense) benefit
|
|
257
|
|
|
(125
|
)
|
|
(144
|
)
|
|||
Net loss
|
|
(1,128
|
)
|
|
(1,810
|
)
|
|
(1,116
|
)
|
|||
(Income) loss attributable to noncontrolling interests
|
|
(1
|
)
|
|
128
|
|
|
(249
|
)
|
|||
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
|
|
$
|
(1,129
|
)
|
|
$
|
(1,682
|
)
|
|
$
|
(1,365
|
)
|
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
|
|
|
|
|
|
|
||||||
Diluted loss per share
|
|
$
|
(10.59
|
)
|
|
$
|
(15.82
|
)
|
|
$
|
(12.87
|
)
|
Diluted weighted average common shares outstanding
|
|
106.6
|
|
|
106.3
|
|
|
106.1
|
|
millions
|
2015
|
|
2014
|
|
2013
|
||||||
Net loss attributable to Holdings per statement of operations
|
$
|
(1,129
|
)
|
|
$
|
(1,682
|
)
|
|
$
|
(1,365
|
)
|
Income (loss) attributable to noncontrolling interests
|
1
|
|
|
(128
|
)
|
|
249
|
|
|||
Income tax expense (benefit)
|
(257
|
)
|
|
125
|
|
|
144
|
|
|||
Interest expense
|
323
|
|
|
313
|
|
|
254
|
|
|||
Interest and investment (income) loss
|
62
|
|
|
(132
|
)
|
|
(207
|
)
|
|||
Other income
|
—
|
|
|
(4
|
)
|
|
(2
|
)
|
|||
Operating loss
|
(1,000
|
)
|
|
(1,508
|
)
|
|
(927
|
)
|
|||
Depreciation and amortization
|
422
|
|
|
581
|
|
|
732
|
|
|||
Gain on sales of assets
|
(743
|
)
|
|
(207
|
)
|
|
(667
|
)
|
|||
Before excluded items
|
(1,321
|
)
|
|
(1,134
|
)
|
|
(862
|
)
|
|||
|
|
|
|
|
|
||||||
Closed store reserve and severance
|
98
|
|
|
224
|
|
|
130
|
|
|||
Domestic pension expense
|
229
|
|
|
89
|
|
|
162
|
|
|||
Other expenses
(1)
|
(64
|
)
|
|
50
|
|
|
—
|
|
|||
Amortization of deferred Seritage gain
|
(52
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment charges
|
274
|
|
|
63
|
|
|
233
|
|
|||
Adjusted EBITDA
|
(836
|
)
|
|
(708
|
)
|
|
(337
|
)
|
|||
|
|
|
|
|
|
||||||
Lands' End separation
|
—
|
|
|
(10
|
)
|
|
(150
|
)
|
|||
Adjusted EBITDA as defined
(2)
|
$
|
(836
|
)
|
|
$
|
(718
|
)
|
|
$
|
(487
|
)
|
|
|
|
|
|
|
||||||
Sears Canada segment
|
—
|
|
|
71
|
|
|
(3
|
)
|
|||
Domestic Adjusted EBITDA as defined
(2)
|
$
|
(836
|
)
|
|
$
|
(647
|
)
|
|
$
|
(490
|
)
|
|
|
|
|
|
|
||||||
Seritage/JV rent
|
133
|
|
|
—
|
|
|
—
|
|
|||
Domestic Adjusted EBITDA as defined
(2)
excluding Seritage/JV rent
|
$
|
(703
|
)
|
|
$
|
(647
|
)
|
|
$
|
(490
|
)
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||||||||
millions
|
Kmart
|
Sears Domestic
|
Sears Holdings
|
|
Kmart
|
Sears Domestic
|
Sears Canada
|
Sears Holdings
|
|
Kmart
|
Sears Domestic
|
Sears Canada
|
Sears Holdings
|
||||||||||||||||||||||
Operating income (loss) per statement of operations
|
$
|
(292
|
)
|
$
|
(708
|
)
|
$
|
(1,000
|
)
|
|
$
|
(422
|
)
|
$
|
(920
|
)
|
$
|
(166
|
)
|
$
|
(1,508
|
)
|
|
$
|
(351
|
)
|
$
|
(940
|
)
|
$
|
364
|
|
$
|
(927
|
)
|
Depreciation and amortization
|
72
|
|
350
|
|
422
|
|
|
95
|
|
437
|
|
49
|
|
581
|
|
|
129
|
|
511
|
|
92
|
|
732
|
|
|||||||||||
(Gain) loss on sales of assets
|
(185
|
)
|
(558
|
)
|
(743
|
)
|
|
(103
|
)
|
(105
|
)
|
1
|
|
(207
|
)
|
|
(66
|
)
|
(63
|
)
|
(538
|
)
|
(667
|
)
|
|||||||||||
Before excluded items
|
(405
|
)
|
(916
|
)
|
(1,321
|
)
|
|
(430
|
)
|
(588
|
)
|
(116
|
)
|
(1,134
|
)
|
|
(288
|
)
|
(492
|
)
|
(82
|
)
|
(862
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Closed store reserve, severance and other
|
86
|
|
12
|
|
98
|
|
|
142
|
|
55
|
|
27
|
|
224
|
|
|
89
|
|
(31
|
)
|
72
|
|
130
|
|
|||||||||||
Domestic pension expense
|
—
|
|
229
|
|
229
|
|
|
—
|
|
89
|
|
—
|
|
89
|
|
|
—
|
|
162
|
|
—
|
|
162
|
|
|||||||||||
Other expenses
(1)
|
43
|
|
(107
|
)
|
(64
|
)
|
|
43
|
|
4
|
|
3
|
|
50
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||||
Amortization of deferred Seritage gain
|
(11
|
)
|
(41
|
)
|
(52
|
)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||||
Impairment charges
|
14
|
|
260
|
|
274
|
|
|
29
|
|
19
|
|
15
|
|
63
|
|
|
70
|
|
150
|
|
13
|
|
233
|
|
|||||||||||
Adjusted EBITDA
|
(273
|
)
|
(563
|
)
|
(836
|
)
|
|
(216
|
)
|
(421
|
)
|
(71
|
)
|
(708
|
)
|
|
(129
|
)
|
(211
|
)
|
3
|
|
(337
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Lands' End separation
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(10
|
)
|
—
|
|
(10
|
)
|
|
—
|
|
(150
|
)
|
—
|
|
(150
|
)
|
|||||||||||
Adjusted EBITDA as defined
(2)
|
$
|
(273
|
)
|
$
|
(563
|
)
|
$
|
(836
|
)
|
|
$
|
(216
|
)
|
$
|
(431
|
)
|
$
|
(71
|
)
|
$
|
(718
|
)
|
|
$
|
(129
|
)
|
$
|
(361
|
)
|
$
|
3
|
|
$
|
(487
|
)
|
% to revenues
(3)
|
(2.7
|
)%
|
(3.8
|
)%
|
(3.3
|
)%
|
|
(1.8
|
)%
|
(2.6
|
)%
|
(3.4
|
)%
|
(2.3
|
)%
|
|
(1.0
|
)%
|
(2.0
|
)%
|
0.1
|
%
|
(1.4
|
)%
|
|
Year Ended January 30, 2016
|
|||||||||||||||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||||||||||||||
millions, except per share data
|
GAAP
|
Domestic
Pension Expense |
Domestic Closed Store Reserve, Store Impairments and Severance
|
Trade name Impairment
|
Domestic Gain on Sales of Assets
|
Mark-to-Market Adjustments
|
Amortization of Deferred Seritage Gain
|
Other
(1)
|
Domestic Tax Matters
|
As
Adjusted |
||||||||||||||||||||
Gross margin impact
|
$
|
5,810
|
|
$
|
—
|
|
$
|
44
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(52
|
)
|
$
|
(146
|
)
|
$
|
—
|
|
$
|
5,656
|
|
Selling and administrative impact
|
6,857
|
|
(229
|
)
|
(54
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(82
|
)
|
—
|
|
6,492
|
|
||||||||||
Depreciation and amortization impact
|
422
|
|
—
|
|
(3
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
419
|
|
||||||||||
Impairment charges impact
|
274
|
|
—
|
|
(94
|
)
|
(180
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Gain on sales of assets impact
|
(743
|
)
|
—
|
|
—
|
|
—
|
|
687
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(56
|
)
|
||||||||||
Operating loss impact
|
(1,000
|
)
|
229
|
|
195
|
|
180
|
|
(687
|
)
|
—
|
|
(52
|
)
|
(64
|
)
|
—
|
|
(1,199
|
)
|
||||||||||
Interest and investment loss impact
|
(62
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
59
|
|
—
|
|
—
|
|
—
|
|
(3
|
)
|
||||||||||
Income tax benefit impact
|
257
|
|
(86
|
)
|
(73
|
)
|
(68
|
)
|
258
|
|
(22
|
)
|
20
|
|
24
|
|
263
|
|
573
|
|
||||||||||
After tax and noncontrolling interests impact
|
(1,129
|
)
|
143
|
|
122
|
|
112
|
|
(429
|
)
|
37
|
|
(32
|
)
|
(40
|
)
|
263
|
|
(953
|
)
|
||||||||||
Diluted loss per share impact
|
$
|
(10.59
|
)
|
$
|
1.34
|
|
$
|
1.14
|
|
$
|
1.05
|
|
$
|
(4.02
|
)
|
$
|
0.35
|
|
$
|
(0.30
|
)
|
$
|
(0.38
|
)
|
$
|
2.47
|
|
$
|
(8.94
|
)
|
|
Year Ended January 31, 2015
|
|||||||||||||||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||||||||||||||
millions, except per share data
|
GAAP
|
Domestic
Pension Expense |
Domestic Closed Store Reserve, Store Impairments and Severance
|
Domestic Gain on Sales of Assets
|
Other Expenses
|
Gain on Sears Canada Disposition
|
Domestic Tax Matters
|
Sears Canada Segment
|
Lands' End Separation
|
As Adjusted
(1)
|
||||||||||||||||||||
Gross margin impact
|
$
|
7,149
|
|
$
|
—
|
|
$
|
68
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(502
|
)
|
$
|
(87
|
)
|
$
|
6,628
|
|
Selling and administrative impact
|
8,220
|
|
(89
|
)
|
(129
|
)
|
—
|
|
(47
|
)
|
—
|
|
—
|
|
(603
|
)
|
(77
|
)
|
7,275
|
|
||||||||||
Depreciation and amortization impact
|
581
|
|
—
|
|
(8
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(49
|
)
|
(3
|
)
|
521
|
|
||||||||||
Impairment charges impact
|
63
|
|
—
|
|
(48
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(15
|
)
|
—
|
|
—
|
|
||||||||||
Gain on sales of assets impact
|
(207
|
)
|
—
|
|
—
|
|
87
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(121
|
)
|
||||||||||
Operating loss impact
|
(1,508
|
)
|
89
|
|
253
|
|
(87
|
)
|
47
|
|
—
|
|
—
|
|
166
|
|
(7
|
)
|
(1,047
|
)
|
||||||||||
Interest expense impact
|
(313
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
—
|
|
(308
|
)
|
||||||||||
Interest and investment income impact
|
132
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(70
|
)
|
—
|
|
(38
|
)
|
—
|
|
24
|
|
||||||||||
Other income impact
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
—
|
|
—
|
|
||||||||||
Income tax expense impact
|
(125
|
)
|
(33
|
)
|
(95
|
)
|
33
|
|
(18
|
)
|
26
|
|
574
|
|
136
|
|
3
|
|
501
|
|
||||||||||
Loss attributable to noncontrolling interests impact
|
128
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(128
|
)
|
—
|
|
—
|
|
||||||||||
After tax and noncontrolling interests impact
|
(1,682
|
)
|
56
|
|
158
|
|
(54
|
)
|
29
|
|
(44
|
)
|
574
|
|
137
|
|
(4
|
)
|
(830
|
)
|
||||||||||
Diluted loss per share impact
|
$
|
(15.82
|
)
|
$
|
0.53
|
|
$
|
1.48
|
|
$
|
(0.51
|
)
|
$
|
0.27
|
|
$
|
(0.41
|
)
|
$
|
5.40
|
|
$
|
1.29
|
|
$
|
(0.04
|
)
|
$
|
(7.81
|
)
|
|
Year Ended February 1, 2014
|
|||||||||||||||||||||||
|
|
Adjustments
|
|
|||||||||||||||||||||
millions, except per share data
|
GAAP
|
Domestic
Pension Expense |
Domestic Closed Store Reserve, Store Impairments and Severance
|
Domestic Gain on Sales of Assets
|
Domestic Tax Matters
|
Sears Canada Segment
|
Lands' End Separation
|
As Adjusted
(1)
|
||||||||||||||||
Gross margin impact
|
$
|
8,755
|
|
$
|
—
|
|
$
|
56
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,016
|
)
|
$
|
(616
|
)
|
$
|
7,179
|
|
Selling and administrative impact
|
9,384
|
|
(162
|
)
|
(2
|
)
|
—
|
|
—
|
|
(1,085
|
)
|
(466
|
)
|
7,669
|
|
||||||||
Depreciation and amortization impact
|
732
|
|
—
|
|
(11
|
)
|
—
|
|
—
|
|
(92
|
)
|
(22
|
)
|
607
|
|
||||||||
Impairment charges impact
|
233
|
|
—
|
|
(220
|
)
|
—
|
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
||||||||
Gain on sales of assets impact
|
(667
|
)
|
—
|
|
—
|
|
67
|
|
—
|
|
538
|
|
—
|
|
(62
|
)
|
||||||||
Operating loss impact
|
(927
|
)
|
162
|
|
289
|
|
(67
|
)
|
—
|
|
(364
|
)
|
(128
|
)
|
(1,035
|
)
|
||||||||
Interest expense impact
|
(254
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
—
|
|
(253
|
)
|
||||||||
Interest and investment income impact
|
207
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(187
|
)
|
—
|
|
20
|
|
||||||||
Other income impact
|
2
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
—
|
|
||||||||
Income tax expense impact
|
(144
|
)
|
(60
|
)
|
(109
|
)
|
26
|
|
655
|
|
59
|
|
49
|
|
476
|
|
||||||||
Income attributable to noncontrolling interests impact
|
(249
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
249
|
|
—
|
|
—
|
|
||||||||
After tax and noncontrolling interests impact
|
(1,365
|
)
|
102
|
|
180
|
|
(41
|
)
|
655
|
|
(244
|
)
|
(79
|
)
|
(792
|
)
|
||||||||
Diluted loss per share impact
|
$
|
(12.87
|
)
|
$
|
0.96
|
|
$
|
1.70
|
|
$
|
(0.39
|
)
|
$
|
6.17
|
|
$
|
(2.30
|
)
|
$
|
(0.73
|
)
|
$
|
(7.46
|
)
|
•
|
EBITDA excludes the effects of financings and investing activities by eliminating the effects of interest and depreciation costs;
|
•
|
Management considers gains/(losses) on the sale of assets to result from investing decisions rather than ongoing operations; and
|
•
|
Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations and reflect past investment decisions.
|
•
|
Domestic pension expense – Contributions to our pension plans remain a significant use of our cash on an annual basis. Cash contributions to our pension and postretirement plans are separately disclosed on the cash flow statement. While the Company's pension plan is frozen, and thus associates do not currently earn pension benefits, we have a legacy pension obligation for past service performed by Kmart and Sears associates. The annual pension expense included in our statement of operations related to these legacy domestic pension plans was relatively minimal in years prior to 2009. However, due to the severe decline in the capital markets that occurred in the latter part of 2008, and the resulting abnormally low interest rates, which continue to persist, our domestic pension expense was
$229 million
in
2015
,
$89 million
in
2014
and
$162 million
in
2013
. Pension expense is comprised of interest cost, expected return on plan assets and recognized net loss and other. This adjustment eliminates the entire pension expense from the statement of operations to improve comparability. Pension expense is included in the determination of net income (loss).
|
millions
|
2015
|
|
2014
|
|
2013
|
||||||
Components of net periodic expense:
|
|
|
|
|
|
||||||
Interest cost
|
$
|
210
|
|
|
$
|
221
|
|
|
$
|
219
|
|
Expected return on plan assets
|
(249
|
)
|
|
(247
|
)
|
|
(224
|
)
|
|||
Recognized net loss and other
|
268
|
|
|
115
|
|
|
167
|
|
|||
Net periodic expense
|
$
|
229
|
|
|
$
|
89
|
|
|
$
|
162
|
|
•
|
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.
|
•
|
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 asset and indefinite-lived intangible asset balances.
|
•
|
Domestic gains on sales of assets – We have recorded significant gains on sales of assets, as well as gains on sales of joint venture interests, 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.
|
•
|
Mark-to-market adjustments – We elected the fair value option for the equity method investment in Sears Canada, and the change in fair value is recorded in interest and investment income on the Consolidated Statement of Operations. Management considers activity related to our retained investment in Sears Canada to result from investing decisions rather than ongoing operations. Furthermore, we do not consider the short term fluctuations in Sears Canada's stock price useful in assessing our operating performance.
|
•
|
Amortization of deferred Seritage gain – A portion of the gain on the Seritage transaction was deferred and will be recognized in proportion to the related rent expense, which is a component of cost of sales, buying and occupancy on the Consolidated Statement of Operations, over the lease term. Management considers the amortization of the deferred Seritage gain to result from investing decisions rather than ongoing operations.
|
•
|
Other – consists of one-time credits from vendors, transaction costs associated with strategic initiatives, expenses associated with legal matters and other expenses.
|
•
|
Domestic 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
|
•
|
Gain on Sears Canada disposition – We recognized a gain upon de-consolidation of Sears Canada. Management considers the gain to result from investing decisions rather than ongoing operations.
|
•
|
Sears Canada segment – Reflects the results of the Sears Canada business that were included in our results of operations prior to the disposition. The adjustment also includes the valuation allowance that was recorded in the third quarter of 2014 prior to the de-consolidation of Sears Canada.
|
•
|
Lands' End separation – Reflects the results of the Lands' End business that were included in our results of operations prior to the separation.
|
•
|
Seritage/JV rent – Reflects the impact of the additional rent expense and assigned sub-tenant income as a result of the Seritage and joint venture transactions. The terms of our leases with Seritage and the joint venture partners provide us with the ability to accelerate the transformation of our physical stores. We expect that our cash rent obligation will decrease significantly as space in these stores is recaptured.
|
millions, except number of stores
|
2015
|
|
2014
|
|
2013
|
||||||
Merchandise sales and services
|
$
|
10,188
|
|
|
$
|
12,074
|
|
|
$
|
13,194
|
|
Comparable store sales %
|
(7.3
|
)%
|
|
(1.4
|
)%
|
|
(3.6
|
)%
|
|||
Cost of sales, buying and occupancy
|
8,042
|
|
|
9,513
|
|
|
10,329
|
|
|||
Gross margin dollars
|
2,146
|
|
|
2,561
|
|
|
2,865
|
|
|||
Gross margin rate
|
21.1
|
%
|
|
21.2
|
%
|
|
21.7
|
%
|
|||
Selling and administrative
|
2,537
|
|
|
2,962
|
|
|
3,083
|
|
|||
Selling and administrative expense as a percentage of total revenues
|
24.9
|
%
|
|
24.5
|
%
|
|
23.4
|
%
|
|||
Depreciation and amortization
|
72
|
|
|
95
|
|
|
129
|
|
|||
Impairment charges
|
14
|
|
|
29
|
|
|
70
|
|
|||
Gain on sales of assets
|
(185
|
)
|
|
(103
|
)
|
|
(66
|
)
|
|||
Total costs and expenses
|
10,480
|
|
|
12,496
|
|
|
13,545
|
|
|||
Operating income (loss)
|
$
|
(292
|
)
|
|
$
|
(422
|
)
|
|
$
|
(351
|
)
|
Adjusted EBITDA
|
$
|
(273
|
)
|
|
$
|
(216
|
)
|
|
$
|
(129
|
)
|
Total Kmart stores
|
941
|
|
|
979
|
|
|
1,152
|
|
millions, except number of stores
|
2015
|
|
2014
|
|
2013
|
||||||
Merchandise sales and services
|
$
|
14,958
|
|
|
$
|
17,036
|
|
|
$
|
19,198
|
|
Comparable store sales %
|
(11.1
|
)%
|
|
(2.1
|
)%
|
|
(1.4
|
)%
|
|||
Cost of sales, buying and occupancy
|
11,294
|
|
|
12,950
|
|
|
14,324
|
|
|||
Gross margin dollars
|
3,664
|
|
|
4,086
|
|
|
4,874
|
|
|||
Gross margin rate
|
24.5
|
%
|
|
24.0
|
%
|
|
25.4
|
%
|
|||
Selling and administrative
|
4,320
|
|
|
4,655
|
|
|
5,216
|
|
|||
Selling and administrative expense as a percentage of total revenues
|
28.9
|
%
|
|
27.3
|
%
|
|
27.2
|
%
|
|||
Depreciation and amortization
|
350
|
|
|
437
|
|
|
511
|
|
|||
Impairment charges
|
260
|
|
|
19
|
|
|
150
|
|
|||
Gain on sales of assets
|
(558
|
)
|
|
(105
|
)
|
|
(63
|
)
|
|||
Total costs and expenses
|
15,666
|
|
|
17,956
|
|
|
20,138
|
|
|||
Operating loss
|
$
|
(708
|
)
|
|
$
|
(920
|
)
|
|
$
|
(940
|
)
|
Adjusted EBITDA
|
$
|
(563
|
)
|
|
$
|
(421
|
)
|
|
$
|
(211
|
)
|
Lands' End separation
|
—
|
|
|
(10
|
)
|
|
(150
|
)
|
|||
Adjusted EBITDA as defined
(1)
|
$
|
(563
|
)
|
|
$
|
(431
|
)
|
|
$
|
(361
|
)
|
Number of:
|
|
|
|
|
|
||||||
Full-line stores
|
705
|
|
|
717
|
|
|
778
|
|
|||
Specialty stores
|
26
|
|
|
29
|
|
|
50
|
|
|||
Total Domestic Sears Stores
|
731
|
|
|
746
|
|
|
828
|
|
millions, except number of stores
|
2014
|
|
2013
|
||||
Merchandise sales and services
|
$
|
2,088
|
|
|
$
|
3,796
|
|
Comparable sales %
|
(8.0
|
)%
|
|
(2.7
|
)%
|
||
Cost of sales, buying and occupancy
|
1,586
|
|
|
2,780
|
|
||
Gross margin dollars
|
502
|
|
|
1,016
|
|
||
Gross margin rate
|
24.0
|
%
|
|
26.8
|
%
|
||
Selling and administrative
|
603
|
|
|
1,085
|
|
||
Selling and administrative expense as a percentage of total revenues
|
28.9
|
%
|
|
28.6
|
%
|
||
Depreciation and amortization
|
49
|
|
|
92
|
|
||
Impairment charges
|
15
|
|
|
13
|
|
||
(Gain) loss on sales of assets
|
1
|
|
|
(538
|
)
|
||
Total costs and expenses
|
2,254
|
|
|
3,432
|
|
||
Operating income (loss)
|
$
|
(166
|
)
|
|
$
|
364
|
|
Adjusted EBITDA
|
$
|
(71
|
)
|
|
$
|
3
|
|
Number of:
|
|
|
|
||||
Full-line stores
|
—
|
|
|
118
|
|
||
Specialty stores
|
—
|
|
|
331
|
|
||
Total Sears Canada Stores
|
—
|
|
|
449
|
|
millions
|
January 30,
2016 |
|
January 31,
2015 |
||||
Cash and equivalents
|
$
|
141
|
|
|
$
|
143
|
|
Cash posted as collateral
|
2
|
|
|
2
|
|
||
Credit card deposits in transit
|
95
|
|
|
105
|
|
||
Total cash balances
|
$
|
238
|
|
|
$
|
250
|
|
millions
|
January 30,
2016 |
|
January 31,
2015 |
||||
Short-term borrowings:
|
|
|
|
||||
Unsecured commercial paper
|
$
|
—
|
|
|
$
|
2
|
|
Secured short-term loan
|
—
|
|
|
399
|
|
||
Secured borrowings
|
797
|
|
|
213
|
|
||
Long-term debt, including current portion:
|
|
|
|
||||
Notes, term loan and debentures outstanding
|
1,984
|
|
|
2,890
|
|
||
Capitalized lease obligations
|
195
|
|
|
272
|
|
||
Total borrowings
|
$
|
2,976
|
|
|
$
|
3,776
|
|
millions
|
2015
|
|
2014
|
||||
Secured borrowings:
|
|
|
|
||||
Maximum daily amount outstanding during the period
|
$
|
876
|
|
|
$
|
1,645
|
|
Average amount outstanding during the period
|
416
|
|
|
1,098
|
|
||
Amount outstanding at period-end
|
797
|
|
|
213
|
|
||
Weighted average interest rate
|
3.2
|
%
|
|
2.8
|
%
|
||
|
|
|
|
||||
Unsecured commercial paper:
|
|
|
|
||||
Maximum daily amount outstanding during the period
|
$
|
104
|
|
|
$
|
159
|
|
Average amount outstanding during the period
|
15
|
|
|
37
|
|
||
Amount outstanding at period-end
|
—
|
|
|
2
|
|
||
Weighted average interest rate
|
4.1
|
%
|
|
3.2
|
%
|
||
|
|
|
|
||||
Secured short-term loan:
|
|
|
|
||||
Maximum daily amount outstanding during the period
|
$
|
400
|
|
|
$
|
400
|
|
Average amount outstanding during the period
|
84
|
|
|
145
|
|
||
Amount outstanding at period-end
|
—
|
|
|
400
|
|
||
Weighted average interest rate
|
5.0
|
%
|
|
5.0
|
%
|
|
Total
|
|
Payments Due by Period
|
||||||||||||||||||||
Contractual Obligations
|
|
Within 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5 Years
|
|
Other
|
|||||||||||||
millions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating leases
|
$
|
4,502
|
|
|
$
|
708
|
|
|
$
|
1,152
|
|
|
$
|
805
|
|
|
$
|
1,837
|
|
|
$
|
—
|
|
Short-term debt
|
797
|
|
|
797
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Capital lease obligations
|
265
|
|
|
75
|
|
|
89
|
|
|
32
|
|
|
69
|
|
|
—
|
|
||||||
Royalty license fees
(1)
|
105
|
|
|
47
|
|
|
38
|
|
|
20
|
|
|
—
|
|
|
—
|
|
||||||
Purchase obligations
|
27
|
|
|
13
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Pension funding obligations
|
2,174
|
|
|
318
|
|
|
818
|
|
|
537
|
|
|
501
|
|
|
—
|
|
||||||
Long-term debt including current portion and interest
|
2,997
|
|
|
150
|
|
|
1,580
|
|
|
714
|
|
|
553
|
|
|
—
|
|
||||||
Liability and interest related to uncertain tax positions
(2)
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
||||||
Total contractual obligations
|
$
|
11,060
|
|
|
$
|
2,108
|
|
|
$
|
3,691
|
|
|
$
|
2,108
|
|
|
$
|
2,960
|
|
|
$
|
193
|
|
(1)
|
We pay royalties under various merchandise license agreements, which are generally based on sales of products covered under these agreements. We currently have license agreements for which we pay royalties, including those to use American Greetings and Joe Boxer. Royalty license fees represent the minimum the Company is obligated to pay, regardless of sales, as guaranteed royalties under these license agreements.
|
(2)
|
At
January 30, 2016
, our uncertain tax position liability and gross interest payable were
$137 million
and
$56 million
, respectively. We are unable to reasonably estimate the timing of liabilities and interest payments arising from uncertain tax positions in individual years due to the uncertainties in the timing of the effective settlement of tax positions.
|
millions
|
Bank
Issued
|
|
SRAC
Issued
|
|
Other
|
|
Total
|
||||||||
Standby letters of credit
|
$
|
652
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
663
|
|
Commercial letters of credit
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||
Secondary lease obligations and performance guarantee
|
—
|
|
|
—
|
|
|
128
|
|
|
128
|
|
•
|
it requires assumptions to be made about matters that were highly uncertain at the time the estimate was made, and
|
•
|
changes in the estimate that are reasonably likely to occur from period to period or different estimates that could have been selected would have a material effect on our financial condition, cash flows or results of operations.
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Actual return on plan assets
|
|
(7.35
|
)%
|
|
1.49
|
%
|
|
10.54
|
%
|
Expected return on plan assets
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.00
|
%
|
millions
|
1 percentage-point
Increase
|
|
1 percentage-point
Decrease
|
||||
Effect on interest cost component
|
$
|
23
|
|
|
$
|
(30
|
)
|
Effect on pension benefit obligation
|
$
|
(498
|
)
|
|
$
|
596
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions, except per share data
|
2015
|
|
2014
|
|
2013
|
||||||
REVENUES
|
|
|
|
|
|
||||||
Merchandise sales and services
(1)(2)
|
$
|
25,146
|
|
|
$
|
31,198
|
|
|
$
|
36,188
|
|
COSTS AND EXPENSES
|
|
|
|
|
|
||||||
Cost of sales, buying and occupancy
(1)(3)
|
19,336
|
|
|
24,049
|
|
|
27,433
|
|
|||
Selling and administrative
|
6,857
|
|
|
8,220
|
|
|
9,384
|
|
|||
Depreciation and amortization
|
422
|
|
|
581
|
|
|
732
|
|
|||
Impairment charges
|
274
|
|
|
63
|
|
|
233
|
|
|||
Gain on sales of assets
|
(743
|
)
|
|
(207
|
)
|
|
(667
|
)
|
|||
Total costs and expenses
|
26,146
|
|
|
32,706
|
|
|
37,115
|
|
|||
Operating loss
|
(1,000
|
)
|
|
(1,508
|
)
|
|
(927
|
)
|
|||
Interest expense
|
(323
|
)
|
|
(313
|
)
|
|
(254
|
)
|
|||
Interest and investment income (loss)
|
(62
|
)
|
|
132
|
|
|
207
|
|
|||
Other income
|
—
|
|
|
4
|
|
|
2
|
|
|||
Loss before income taxes
|
(1,385
|
)
|
|
(1,685
|
)
|
|
(972
|
)
|
|||
Income tax (expense) benefit
|
257
|
|
|
(125
|
)
|
|
(144
|
)
|
|||
Net loss
|
(1,128
|
)
|
|
(1,810
|
)
|
|
(1,116
|
)
|
|||
(Income) loss attributable to noncontrolling interests
|
(1
|
)
|
|
128
|
|
|
(249
|
)
|
|||
NET LOSS ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
|
$
|
(1,129
|
)
|
|
$
|
(1,682
|
)
|
|
$
|
(1,365
|
)
|
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS’ SHAREHOLDERS
|
|
|
|
|
|
||||||
Basic loss per share
|
$
|
(10.59
|
)
|
|
$
|
(15.82
|
)
|
|
$
|
(12.87
|
)
|
Diluted loss per share
|
$
|
(10.59
|
)
|
|
$
|
(15.82
|
)
|
|
$
|
(12.87
|
)
|
Basic weighted average common shares outstanding
|
106.6
|
|
|
106.3
|
|
|
106.1
|
|
|||
Diluted weighted average common shares outstanding
|
106.6
|
|
|
106.3
|
|
|
106.1
|
|
(1)
|
Includes merchandise sales to Sears Hometown and Outlet Stores, Inc. ("SHO") of
$1.3 billion
,
$1.4 billion
and
$1.5 billion
in
2015
,
2014
and
2013
, respectively. Pursuant to the terms of the separation, merchandise is sold to SHO at cost.
|
millions
|
2015
|
|
2014
|
|
2013
|
||||||
Net loss
|
$
|
(1,128
|
)
|
|
$
|
(1,810
|
)
|
|
$
|
(1,116
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Pension and postretirement adjustments, net of tax
|
113
|
|
|
(1,040
|
)
|
|
422
|
|
|||
Deferred gain (loss) on derivatives, net of tax
|
—
|
|
|
(2
|
)
|
|
2
|
|
|||
Currency translation adjustments, net of tax
|
(1
|
)
|
|
3
|
|
|
(71
|
)
|
|||
Sears Canada de-consolidation
|
—
|
|
|
(186
|
)
|
|
—
|
|
|||
Total other comprehensive income (loss)
|
112
|
|
|
(1,225
|
)
|
|
353
|
|
|||
Comprehensive loss
|
(1,016
|
)
|
|
(3,035
|
)
|
|
(763
|
)
|
|||
Comprehensive (income) loss attributable to noncontrolling interests
|
(1
|
)
|
|
438
|
|
|
(260
|
)
|
|||
Comprehensive loss attributable to Holdings' shareholders
|
$
|
(1,017
|
)
|
|
$
|
(2,597
|
)
|
|
$
|
(1,023
|
)
|
millions
|
January 30,
2016 |
|
January 31,
2015 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
238
|
|
|
$
|
250
|
|
Accounts receivable
(1)
|
419
|
|
|
429
|
|
||
Merchandise inventories
|
5,172
|
|
|
4,943
|
|
||
Prepaid expenses and other current assets
|
216
|
|
|
241
|
|
||
Total current assets
|
6,045
|
|
|
5,863
|
|
||
|
|
|
|
||||
Property and equipment
|
|
|
|
||||
Land
|
827
|
|
|
1,701
|
|
||
Buildings and improvements
|
3,140
|
|
|
4,701
|
|
||
Furniture, fixtures and equipment
|
1,352
|
|
|
1,629
|
|
||
Capital leases
|
272
|
|
|
282
|
|
||
Gross property and equipment
|
5,591
|
|
|
8,313
|
|
||
Less accumulated depreciation and amortization
|
(2,960
|
)
|
|
(3,864
|
)
|
||
Total property and equipment, net
|
2,631
|
|
|
4,449
|
|
||
Goodwill
|
269
|
|
|
269
|
|
||
Trade names and other intangible assets
|
1,909
|
|
|
2,097
|
|
||
Other assets
|
483
|
|
|
507
|
|
||
TOTAL ASSETS
|
$
|
11,337
|
|
|
$
|
13,185
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
(2)
|
$
|
797
|
|
|
$
|
614
|
|
Current portion of long-term debt and capitalized lease obligations
|
71
|
|
|
75
|
|
||
Merchandise payables
|
1,574
|
|
|
1,621
|
|
||
Other current liabilities
(3)
|
1,925
|
|
|
2,087
|
|
||
Unearned revenues
|
787
|
|
|
818
|
|
||
Other taxes
|
284
|
|
|
380
|
|
||
Total current liabilities
|
5,438
|
|
|
5,595
|
|
||
Long-term debt and capitalized lease obligations
(4)
|
2,108
|
|
|
3,087
|
|
||
Pension and postretirement benefits
|
2,206
|
|
|
2,404
|
|
||
Deferred gain on sale-leaseback
|
753
|
|
|
—
|
|
||
Sale-leaseback financing obligation
|
164
|
|
|
—
|
|
||
Other long-term liabilities
|
1,731
|
|
|
1,849
|
|
||
Long-term deferred tax liabilities
|
893
|
|
|
1,195
|
|
||
Total Liabilities
|
13,293
|
|
|
14,130
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
EQUITY (DEFICIT)
|
|
|
|
||||
Sears Holdings Corporation equity (deficit)
|
|
|
|
||||
Preferred stock, 20 shares authorized; no shares outstanding
|
—
|
|
|
—
|
|
||
Common stock $0.01 par value; 500 shares authorized; 107 and 107 shares outstanding, respectively
|
1
|
|
|
1
|
|
||
Treasury stock—at cost
|
(5,928
|
)
|
|
(5,949
|
)
|
||
Capital in excess of par value
|
9,173
|
|
|
9,189
|
|
||
Retained deficit
|
(3,291
|
)
|
|
(2,162
|
)
|
||
Accumulated other comprehensive loss
|
(1,918
|
)
|
|
(2,030
|
)
|
||
Total Sears Holdings Corporation equity (deficit)
|
(1,963
|
)
|
|
(951
|
)
|
||
Noncontrolling interest
|
7
|
|
|
6
|
|
||
Total Equity (Deficit)
|
(1,956
|
)
|
|
(945
|
)
|
||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
$
|
11,337
|
|
|
$
|
13,185
|
|
(1)
|
Includes
$51 million
and
$61 million
at
January 30, 2016
and
January 31, 2015
, respectively, of net amounts receivable from SHO,
$5 million
at
January 31, 2015
of net amounts receivable from Lands' End, and
$7 million
of a net amount receivable from Seritage at
January 30, 2016
.
|
(4)
|
Includes
$11 million
and
$205 million
of Senior Secured Notes at
January 30, 2016
and
January 31, 2015
, respectively, and
$3 million
of Subsidiary Notes held by ESL and its affiliates at both
January 30, 2016
and
January 31, 2015
. Also includes
$193 million
and
$299 million
of Senior Unsecured Notes held by ESL and its affiliates at
January 30, 2016
and
January 31, 2015
, respectively. Includes
$22 million
and
$183 million
of Senior Secured Notes at January 30, 2016 and January 31, 2015, respectively, and
$14 million
of Subsidiary Notes held by Fairholme and its affiliates at January 30, 2016. Also includes
$360 million
and
$205 million
of Senior Unsecured Notes held by Fairholme and its affiliates at January 30, 2016 and January 31, 2015, respectively.
|
millions
|
2015
|
|
2014
|
|
2013
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net loss
|
(1,128
|
)
|
|
(1,810
|
)
|
|
(1,116
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Deferred tax valuation allowance
|
217
|
|
|
835
|
|
|
720
|
|
|||
Tax benefit resulting from Other Comprehensive Income allocation
|
—
|
|
|
—
|
|
|
(97
|
)
|
|||
Depreciation and amortization
|
422
|
|
|
581
|
|
|
732
|
|
|||
Impairment charges
|
274
|
|
|
63
|
|
|
233
|
|
|||
Gain on sales of assets
|
(743
|
)
|
|
(207
|
)
|
|
(667
|
)
|
|||
Gain on sales of investments
|
—
|
|
|
(105
|
)
|
|
(169
|
)
|
|||
Pension and postretirement plan contributions
|
(311
|
)
|
|
(450
|
)
|
|
(426
|
)
|
|||
Mark-to-market adjustments of financial instruments
|
66
|
|
|
(3
|
)
|
|
—
|
|
|||
Amortization of deferred gain on sale-leaseback
|
(52
|
)
|
|
—
|
|
|
—
|
|
|||
Settlement of Canadian dollar hedges
|
—
|
|
|
8
|
|
|
9
|
|
|||
Change in operating assets and liabilities (net of acquisitions and dispositions):
|
|
|
|
|
|
||||||
Deferred income taxes
|
(519
|
)
|
|
(719
|
)
|
|
(441
|
)
|
|||
Merchandise inventories
|
(229
|
)
|
|
1,091
|
|
|
446
|
|
|||
Merchandise payables
|
(47
|
)
|
|
(528
|
)
|
|
(230
|
)
|
|||
Income and other taxes
|
(95
|
)
|
|
(110
|
)
|
|
63
|
|
|||
Other operating assets
|
68
|
|
|
(41
|
)
|
|
44
|
|
|||
Other operating liabilities
|
(90
|
)
|
|
8
|
|
|
(210
|
)
|
|||
Net cash used in operating activities
|
(2,167
|
)
|
|
(1,387
|
)
|
|
(1,109
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from sales of property and investments
(1)
|
2,730
|
|
|
424
|
|
|
995
|
|
|||
Net increase in investments and restricted cash
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Purchases of property and equipment
|
(211
|
)
|
|
(270
|
)
|
|
(329
|
)
|
|||
De-consolidation of Sears Canada cash
|
—
|
|
|
(207
|
)
|
|
—
|
|
|||
Proceeds from Sears Canada rights offering
(2)
|
—
|
|
|
380
|
|
|
—
|
|
|||
Net cash provided by investing activities
|
2,519
|
|
|
327
|
|
|
664
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Proceeds from debt issuances
(3)
|
—
|
|
|
1,025
|
|
|
994
|
|
|||
Repayments of debt
(4)
|
(1,405
|
)
|
|
(80
|
)
|
|
(83
|
)
|
|||
Increase (decrease) in short-term borrowings, primarily 90 days or less
|
583
|
|
|
(1,117
|
)
|
|
238
|
|
|||
Proceeds from sale-leaseback financing
(1)
|
508
|
|
|
—
|
|
|
—
|
|
|||
Lands' End, Inc. pre-separation funding
|
—
|
|
|
515
|
|
|
—
|
|
|||
Separation of Lands' End, Inc.
|
—
|
|
|
(31
|
)
|
|
—
|
|
|||
Debt issuance costs
|
(50
|
)
|
|
(27
|
)
|
|
(14
|
)
|
|||
Sears Canada dividends paid to noncontrolling interests
|
—
|
|
|
—
|
|
|
(233
|
)
|
|||
Net cash provided by (used in) financing activities
|
(364
|
)
|
|
285
|
|
|
902
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
(3
|
)
|
|
(38
|
)
|
|||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(12
|
)
|
|
(778
|
)
|
|
419
|
|
|||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
250
|
|
|
1,028
|
|
|
609
|
|
|||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
$
|
238
|
|
|
$
|
250
|
|
|
$
|
1,028
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
||||||
Capital lease obligation incurred
|
$
|
6
|
|
|
$
|
45
|
|
|
$
|
31
|
|
Supplemental Cash Flow Data:
|
|
|
|
|
|
||||||
Income taxes paid, net of refunds
|
$
|
45
|
|
|
$
|
119
|
|
|
$
|
21
|
|
Cash interest paid
|
252
|
|
|
230
|
|
|
206
|
|
|||
Unpaid liability to acquire equipment and software
|
27
|
|
|
25
|
|
|
41
|
|
|
Equity (Deficit) Attributable to Holdings’ Shareholders
|
|
|
||||||||||||||||||||
dollars and shares in millions
|
Number
of Shares |
Common
Stock |
Treasury
Stock |
Capital in
Excess of Par Value |
Retained Earnings (Deficit)
|
Accumulated
Other Comprehensive Income (Loss) |
Noncontrolling
Interests |
Total
|
|||||||||||||||
Balance at February 2, 2013
|
106
|
|
$
|
1
|
|
$
|
(5,970
|
)
|
$
|
9,298
|
|
$
|
885
|
|
$
|
(1,459
|
)
|
$
|
417
|
|
$
|
3,172
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net income (loss)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,365
|
)
|
—
|
|
249
|
|
(1,116
|
)
|
|||||||
Pension and postretirement adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
372
|
|
50
|
|
422
|
|
|||||||
Deferred gain on derivatives, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
2
|
|
|||||||
Currency translation adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(32
|
)
|
(39
|
)
|
(71
|
)
|
|||||||
Total Comprehensive Loss
|
|
|
|
|
|
|
|
(763
|
)
|
||||||||||||||
Stock awards
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
|
|||||||
Associate stock purchase
|
—
|
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||||
Sears Canada dividend paid to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(233
|
)
|
(233
|
)
|
|||||||
Balance at February 1, 2014
|
106
|
|
$
|
1
|
|
$
|
(5,963
|
)
|
$
|
9,298
|
|
$
|
(480
|
)
|
$
|
(1,117
|
)
|
$
|
444
|
|
$
|
2,183
|
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,682
|
)
|
—
|
|
(128
|
)
|
(1,810
|
)
|
|||||||
Pension and postretirement adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,045
|
)
|
5
|
|
(1,040
|
)
|
|||||||
Deferred loss on derivatives, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(2
|
)
|
—
|
|
(2
|
)
|
|||||||
Currency translation adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
(1
|
)
|
3
|
|
|||||||
Sears Canada de-consolidation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
128
|
|
(314
|
)
|
(186
|
)
|
|||||||
Total Comprehensive Loss
|
|
|
|
|
|
|
|
(3,035
|
)
|
||||||||||||||
Stock awards
|
1
|
|
—
|
|
9
|
|
(5
|
)
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||||
Separation of Lands' End, Inc.
|
—
|
|
—
|
|
—
|
|
(323
|
)
|
—
|
|
2
|
|
—
|
|
(321
|
)
|
|||||||
Issuance of warrants to purchase common stock
|
—
|
|
—
|
|
—
|
|
219
|
|
—
|
|
—
|
|
—
|
|
219
|
|
|||||||
Associate stock purchase
|
—
|
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|||||||
Balance at January 31, 2015
|
107
|
|
$
|
1
|
|
$
|
(5,949
|
)
|
$
|
9,189
|
|
$
|
(2,162
|
)
|
$
|
(2,030
|
)
|
$
|
6
|
|
$
|
(945
|
)
|
Comprehensive loss
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,129
|
)
|
—
|
|
1
|
|
(1,128
|
)
|
|||||||
Pension and postretirement adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
113
|
|
—
|
|
113
|
|
|||||||
Currency translation adjustments, net of tax
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|||||||
Total Comprehensive Loss
|
|
|
|
|
|
|
|
(1,016
|
)
|
||||||||||||||
Stock awards
|
—
|
|
—
|
|
16
|
|
(16
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Associate stock purchase
|
—
|
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
|||||||
Balance at January 30, 2016
|
107
|
|
$
|
1
|
|
$
|
(5,928
|
)
|
$
|
9,173
|
|
$
|
(3,291
|
)
|
$
|
(1,918
|
)
|
$
|
7
|
|
$
|
(1,956
|
)
|
millions
|
|
||
2016
|
$
|
190
|
|
2017
|
123
|
|
|
2018
|
89
|
|
|
2019
|
64
|
|
|
2020
|
49
|
|
|
Later years
|
338
|
|
|
Total undiscounted obligation
|
853
|
|
|
Less—discount
|
(93
|
)
|
|
Net obligation
|
$
|
760
|
|
ISSUE
|
January 30,
2016 |
|
January 31,
2015 |
||||
millions
|
|
|
|
||||
SEARS ROEBUCK ACCEPTANCE CORP.
|
|
|
|
||||
6.50% to 7.50% Notes, due 2017 to 2043
|
$
|
327
|
|
|
$
|
327
|
|
Term Loan (Credit Facility), due 2018
|
968
|
|
|
973
|
|
||
SEARS HOLDINGS CORP.
|
|
|
|
||||
6.625% Senior Secured Notes, due 2018
|
302
|
|
|
1,229
|
|
||
8% Senior Unsecured Notes, due 2019
|
383
|
|
|
348
|
|
||
CAPITALIZED LEASE OBLIGATIONS
|
195
|
|
|
272
|
|
||
OTHER NOTES AND MORTGAGES
|
4
|
|
|
13
|
|
||
Total long-term borrowings
|
2,179
|
|
|
3,162
|
|
||
Current maturities
|
(71
|
)
|
|
(75
|
)
|
||
Long-term debt and capitalized lease obligations
|
$
|
2,108
|
|
|
$
|
3,087
|
|
Weighted-average annual interest rate on long-term debt
|
6.6
|
%
|
|
6.5
|
%
|
millions
|
|
||
2016
|
$
|
71
|
|
2017
|
97
|
|
|
2018
|
1,290
|
|
|
2019
|
640
|
|
|
2020
|
11
|
|
|
Thereafter
|
327
|
|
|
Total maturities
|
2,436
|
|
|
Unamortized debt discount
|
(245
|
)
|
|
Unamortized debt issuance costs
|
$
|
(12
|
)
|
Long-term debt, net of discount & debt issuance costs
|
$
|
2,179
|
|
millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
COMPONENTS OF INTEREST EXPENSE
|
|
|
|
|
|
|
||||||
Interest expense
|
|
$
|
223
|
|
|
$
|
238
|
|
|
$
|
193
|
|
Amortization of debt issuance costs
|
|
25
|
|
|
33
|
|
|
21
|
|
|||
Amortization of debt discount
|
|
35
|
|
|
5
|
|
|
—
|
|
|||
Accretion of self-insurance obligations at net present value
|
|
19
|
|
|
22
|
|
|
24
|
|
|||
Accretion of lease obligations at net present value
|
|
21
|
|
|
15
|
|
|
16
|
|
|||
Interest expense
|
|
$
|
323
|
|
|
$
|
313
|
|
|
$
|
254
|
|
millions
|
|
Bank
Issued |
|
SRAC
Issued |
|
Other
|
|
Total
|
||||||||
Standby letters of credit
|
|
$
|
652
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
663
|
|
Commercial letters of credit
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||
Secondary lease obligations
|
|
—
|
|
|
—
|
|
|
128
|
|
|
128
|
|
millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Interest income on cash and cash equivalents
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Gain on de-consolidation of Sears Canada
|
|
—
|
|
|
70
|
|
|
—
|
|
|||
Other investment income (loss)
|
|
(63
|
)
|
|
59
|
|
|
203
|
|
|||
Total
|
|
$
|
(62
|
)
|
|
$
|
132
|
|
|
$
|
207
|
|
millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Retirement/401(k) Savings Plans
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
8
|
|
Pension plans
|
|
230
|
|
|
82
|
|
|
176
|
|
|||
Postretirement benefits
|
|
(2
|
)
|
|
9
|
|
|
18
|
|
|||
Total
|
|
$
|
228
|
|
|
$
|
95
|
|
|
$
|
202
|
|
|
|
2015
|
|
2014
|
||||
millions
|
|
SHC
Domestic |
|
SHC
Domestic |
||||
Change in projected benefit obligation:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
5,874
|
|
|
$
|
4,981
|
|
Interest cost
|
|
211
|
|
|
221
|
|
||
Actuarial (gain) loss
|
|
(354
|
)
|
|
1,016
|
|
||
Benefits paid
|
|
(468
|
)
|
|
(344
|
)
|
||
Other
|
|
$
|
2
|
|
|
$
|
—
|
|
Balance at the measurement date
|
|
$
|
5,265
|
|
|
$
|
5,874
|
|
|
|
|
|
|
|
|
||
Change in assets at fair value:
|
|
|
|
|
|
|
||
Beginning balance
|
|
$
|
3,616
|
|
|
$
|
3,490
|
|
Actual return on plan assets
|
|
(258
|
)
|
|
52
|
|
||
Company contributions
|
|
299
|
|
|
418
|
|
||
Benefits paid
|
|
(468
|
)
|
|
(344
|
)
|
||
Balance at the measurement date
|
|
$
|
3,189
|
|
|
$
|
3,616
|
|
Net amount recognized
|
|
$
|
(2,076
|
)
|
|
$
|
(2,258
|
)
|
|
|
2015
|
|
2014
|
||||
millions
|
|
SHC
Domestic |
|
SHC
Domestic |
||||
Change in accumulated postretirement benefit obligation:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
156
|
|
|
$
|
215
|
|
Interest cost
|
|
5
|
|
|
8
|
|
||
Plan participants' contributions
|
|
1
|
|
|
28
|
|
||
Benefits paid
|
|
(13
|
)
|
|
(47
|
)
|
||
Actuarial gain
|
|
(6
|
)
|
|
—
|
|
||
Plan amendment
|
|
—
|
|
|
(48
|
)
|
||
Balance at the measurement date
|
|
$
|
143
|
|
|
$
|
156
|
|
|
|
|
|
|
||||
Change in plan assets at fair value:
|
|
|
|
|
||||
Beginning of year balance
|
|
$
|
—
|
|
|
$
|
—
|
|
Company contributions
|
|
12
|
|
|
19
|
|
||
Plan participants' contributions
|
|
1
|
|
|
28
|
|
||
Benefits paid
|
|
(13
|
)
|
|
(47
|
)
|
||
Balance at the measurement date
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded status
|
|
$
|
(143
|
)
|
|
$
|
(156
|
)
|
|
|
2015
|
|
2014
|
|
2013
|
||
|
|
SHC
Domestic |
|
SHC
Domestic |
|
SHC
Domestic |
|
Sears
Canada |
Pension benefits:
|
|
|
|
|
|
|
|
|
Discount Rate
|
|
4.50%
|
|
3.70%
|
|
4.60%
|
|
4.20%
|
Rate of compensation increases
|
|
N/A
|
|
N/A
|
|
N/A
|
|
3.50%
|
Postretirement benefits:
|
|
|
|
|
|
|
|
|
Discount Rate
|
|
4.00%
|
|
3.30%
|
|
4.00%
|
|
4.20%
|
Rate of compensation increases
|
|
N/A
|
|
N/A
|
|
N/A
|
|
3.50%
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||
millions
|
|
SHC
Domestic |
|
SHC
Domestic |
|
Sears
Canada |
|
Total
|
|
SHC
Domestic |
|
Sears
Canada |
|
Total
|
||||||||||||||
Pension benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest cost
|
|
$
|
211
|
|
|
$
|
221
|
|
|
$
|
36
|
|
|
$
|
257
|
|
|
$
|
219
|
|
|
$
|
56
|
|
|
$
|
275
|
|
Expected return on plan assets
|
|
(249
|
)
|
|
(246
|
)
|
|
(52
|
)
|
|
(298
|
)
|
|
(224
|
)
|
|
(76
|
)
|
|
(300
|
)
|
|||||||
Recognized net loss and other
|
|
268
|
|
|
115
|
|
|
8
|
|
|
123
|
|
|
167
|
|
|
34
|
|
|
201
|
|
|||||||
Net periodic benefit cost
|
|
$
|
230
|
|
|
$
|
90
|
|
|
$
|
(8
|
)
|
|
$
|
82
|
|
|
$
|
162
|
|
|
$
|
14
|
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest cost
|
|
$
|
5
|
|
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
12
|
|
|
$
|
20
|
|
Expected return on assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||
Recognized net loss and other
|
|
(7
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net periodic benefit cost
|
|
$
|
(2
|
)
|
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
18
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||
|
|
SHC
Domestic |
|
SHC
Domestic |
|
Sears
Canada |
|
SHC
Domestic |
|
Sears
Canada |
Pension benefits:
|
|
|
|
|
|
|
|
|
|
|
Discount Rate
|
|
3.70%
|
|
4.60%
|
|
4.20%
|
|
4.25%
|
|
4.20%
|
Return of plan assets
|
|
7.00%
|
|
7.00%
|
|
6.50%
|
|
7.00%
|
|
6.50%
|
Rate of compensation increases
|
|
N/A
|
|
N/A
|
|
3.50%
|
|
N/A
|
|
3.50%
|
Postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
Discount Rate
|
|
3.30%
|
|
4.00%
|
|
3.90%
|
|
3.55%
|
|
4.20%
|
Return of plan assets
|
|
N/A
|
|
N/A
|
|
1.00%
|
|
N/A
|
|
3.75%
|
Rate of compensation increases
|
|
N/A
|
|
N/A
|
|
3.50%
|
|
N/A
|
|
3.50%
|
millions
|
|
1 percentage-point
Increase |
|
1 percentage-point
Decrease |
||||
Effect on interest cost component
|
|
$
|
23
|
|
|
$
|
(30
|
)
|
Effect on pension benefit obligation
|
|
$
|
(498
|
)
|
|
$
|
596
|
|
|
|
Plan Assets at
|
||||
|
|
January 30,
2016 |
|
January 31,
2015 |
||
Equity securities
|
|
34
|
%
|
|
33
|
%
|
Fixed income and other debt securities
|
|
63
|
|
|
63
|
|
Other
|
|
3
|
|
|
4
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
millions
|
|
SHC
Domestic |
||
Pension benefits:
|
|
|
||
Employer contributions:
|
|
|
||
2016 (expected)
|
|
$
|
318
|
|
Expected benefit payments:
|
|
|
|
|
2016
|
|
$
|
424
|
|
2017
|
|
385
|
|
|
2018
|
|
382
|
|
|
2019
|
|
408
|
|
|
2020
|
|
396
|
|
|
2021-2025
|
|
1,795
|
|
|
Postretirement benefits:
|
|
|
|
|
Employer contributions:
|
|
|
|
|
2016 (expected)
|
|
$
|
15
|
|
Expected employer contribution for benefit payments:
|
|
|
|
|
2016
|
|
$
|
15
|
|
2017
|
|
15
|
|
|
2018
|
|
14
|
|
|
2019
|
|
14
|
|
|
2020
|
|
13
|
|
|
2021-2025
|
|
54
|
|
|
|
Investment Assets at Fair Value at
|
||||||||||||||
SHC Domestic
|
|
January 30, 2016
|
||||||||||||||
millions
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents and short-term investments
|
|
$
|
307
|
|
|
$
|
—
|
|
|
$
|
307
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. companies
|
|
861
|
|
|
861
|
|
|
—
|
|
|
—
|
|
||||
International companies
|
|
140
|
|
|
140
|
|
|
—
|
|
|
—
|
|
||||
U.S. registered investment companies
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds and notes
|
|
1,848
|
|
|
—
|
|
|
1,848
|
|
|
—
|
|
||||
Mortgage-backed and asset-backed
|
|
4
|
|
|
—
|
|
|
1
|
|
|
3
|
|
||||
Other
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Ventures and partnerships
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Total investment assets at fair value
|
|
$
|
3,170
|
|
|
$
|
1,006
|
|
|
$
|
2,157
|
|
|
$
|
7
|
|
Cash
|
|
1
|
|
|
|
|
|
|
|
|||||||
Accounts receivable
|
|
63
|
|
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
(45
|
)
|
|
|
|
|
|
|
|
||||||
Net assets available for plan benefits
|
|
$
|
3,189
|
|
|
|
|
|
|
|
|
|
|
|
Investment Assets at Fair Value at
|
||||||||||||||
SHC Domestic
|
|
January 31, 2015
|
||||||||||||||
millions
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash equivalents and short-term investments
|
|
$
|
363
|
|
|
$
|
—
|
|
|
$
|
363
|
|
|
$
|
—
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. companies
|
|
931
|
|
|
931
|
|
|
—
|
|
|
—
|
|
||||
International companies
|
|
157
|
|
|
157
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds and notes
|
|
2,010
|
|
|
—
|
|
|
2,010
|
|
|
—
|
|
||||
Sears Holdings Corporation senior secured notes
|
|
101
|
|
|
—
|
|
|
101
|
|
|
—
|
|
||||
Mortgage-backed and asset-backed
|
|
8
|
|
|
—
|
|
|
2
|
|
|
6
|
|
||||
Other
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Ventures and partnerships
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||
Total investment assets at fair value
|
|
$
|
3,576
|
|
|
$
|
1,088
|
|
|
$
|
2,477
|
|
|
$
|
11
|
|
Cash
|
|
4
|
|
|
|
|
|
|
|
|||||||
Accounts receivable
|
|
63
|
|
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
(27
|
)
|
|
|
|
|
|
|
|
||||||
Net assets available for plan benefits
|
|
$
|
3,616
|
|
|
|
|
|
|
|
|
|
millions, except earnings per share
|
|
2015
|
|
2014
|
|
2013
|
||||||
Basic weighted average shares
|
|
106.6
|
|
|
106.3
|
|
|
106.1
|
|
|||
Dilutive effect of restricted stock awards, restricted stock units and warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average shares
|
|
106.6
|
|
|
106.3
|
|
|
106.1
|
|
|||
|
|
|
|
|
|
|
||||||
Net loss attributable to Holdings' shareholders
|
|
$
|
(1,129
|
)
|
|
$
|
(1,682
|
)
|
|
$
|
(1,365
|
)
|
Loss per share attributable to Holdings' shareholders:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
(10.59
|
)
|
|
$
|
(15.82
|
)
|
|
$
|
(12.87
|
)
|
Diluted
|
|
$
|
(10.59
|
)
|
|
$
|
(15.82
|
)
|
|
$
|
(12.87
|
)
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
(Shares in thousands)
|
|
Shares
|
|
Weighted-
Average Fair Value on Date of Grant |
|
Shares
|
|
Weighted-
Average Fair Value on Date of Grant |
|
Shares
|
|
Weighted-
Average Fair Value on Date of Grant |
|||||||||
Beginning of year balance
|
|
73
|
|
|
$
|
45.82
|
|
|
205
|
|
|
$
|
48.24
|
|
|
424
|
|
|
$
|
57.72
|
|
Granted
|
|
198
|
|
|
31.26
|
|
|
168
|
|
|
38.35
|
|
|
135
|
|
|
49.19
|
|
|||
Vested
|
|
(200
|
)
|
|
32.01
|
|
|
(248
|
)
|
|
41.17
|
|
|
(281
|
)
|
|
57.71
|
|
|||
Forfeited
|
|
(11
|
)
|
|
51.39
|
|
|
(52
|
)
|
|
53.44
|
|
|
(73
|
)
|
|
68.47
|
|
|||
End of year balance
|
|
60
|
|
|
$
|
42.88
|
|
|
73
|
|
|
$
|
45.82
|
|
|
205
|
|
|
$
|
48.24
|
|
millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Aggregate fair value of shares granted based on weighted average fair value at date of grant
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
7
|
|
Aggregate fair value of shares vesting during period
|
|
6
|
|
|
9
|
|
|
14
|
|
|||
Aggregate fair value of shares forfeited during period
|
|
—
|
|
|
2
|
|
|
4
|
|
millions
|
January 30,
2016 |
|
January 31,
2015 |
|
February 1,
2014 |
||||||
Pension and postretirement adjustments (net of tax of $(296), $(296)and $(328), respectively)
|
$
|
(1,915
|
)
|
|
$
|
(2,028
|
)
|
|
$
|
(1,036
|
)
|
Cumulative unrealized derivative gain (net of tax of $0)
|
—
|
|
|
—
|
|
|
2
|
|
|||
Currency translation adjustments (net of tax of $0, $0 and $(38), respectively)
|
(3
|
)
|
|
(2
|
)
|
|
(83
|
)
|
|||
Accumulated other comprehensive loss
|
$
|
(1,918
|
)
|
|
$
|
(2,030
|
)
|
|
$
|
(1,117
|
)
|
|
2015
|
||||||||||
millions
|
Before
Tax Amount |
|
Tax
Expense |
|
Net of
Tax Amount |
||||||
Other comprehensive income
|
|
|
|
|
|
||||||
Pension and postretirement adjustments
|
|
|
|
|
|
||||||
Experience loss
|
$
|
(148
|
)
|
|
$
|
—
|
|
|
$
|
(148
|
)
|
Less: recognized net loss and other included in net periodic benefit cost
(1)
|
261
|
|
|
—
|
|
|
261
|
|
|||
Pension and postretirement adjustments, net of tax
|
113
|
|
|
—
|
|
|
113
|
|
|||
Currency translation adjustments
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Total other comprehensive income
|
$
|
112
|
|
|
$
|
—
|
|
|
$
|
112
|
|
|
2014
|
||||||||||
millions
|
Before
Tax Amount |
|
Tax Expense
|
|
Net of
Tax Amount |
||||||
Other comprehensive loss
|
|
|
|
|
|
||||||
Pension and postretirement adjustments
|
|
|
|
|
|
||||||
Experience loss
|
$
|
(1,163
|
)
|
|
$
|
—
|
|
|
$
|
(1,163
|
)
|
Less: recognized net loss and other included in net periodic benefit cost
(1)
|
126
|
|
|
(3
|
)
|
|
123
|
|
|||
Pension and postretirement adjustments, net of tax
|
(1,037
|
)
|
|
(3
|
)
|
|
(1,040
|
)
|
|||
Deferred loss on derivatives
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Currency translation adjustments
|
4
|
|
|
(1
|
)
|
|
3
|
|
|||
Sears Canada de-consolidation
|
(186
|
)
|
|
—
|
|
|
(186
|
)
|
|||
Total other comprehensive income
|
$
|
(1,221
|
)
|
|
$
|
(4
|
)
|
|
$
|
(1,225
|
)
|
|
2013
|
||||||||||
millions
|
Before
Tax Amount |
|
Tax (Expense) Benefit
|
|
Net of
Tax Amount |
||||||
Other comprehensive income
|
|
|
|
|
|
||||||
Pension and postretirement adjustments
|
|
|
|
|
|
||||||
Experience gain
|
$
|
362
|
|
|
$
|
(126
|
)
|
|
$
|
236
|
|
Less: recognized net loss and other included in net periodic benefit cost
(1)
|
193
|
|
|
(7
|
)
|
|
186
|
|
|||
Pension and postretirement adjustments, net of tax
|
555
|
|
|
(133
|
)
|
|
422
|
|
|||
Deferred gain on derivatives
|
2
|
|
|
—
|
|
|
2
|
|
|||
Currency translation adjustments
|
(70
|
)
|
|
(1
|
)
|
|
(71
|
)
|
|||
Total other comprehensive income
|
$
|
487
|
|
|
$
|
(134
|
)
|
|
$
|
353
|
|
(1)
|
Included in the computation of net periodic benefit expense. See Note 7 to the Consolidated Financial Statements.
|
millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Income (loss) before income taxes:
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
(1,420
|
)
|
|
$
|
(1,560
|
)
|
|
$
|
(1,610
|
)
|
Foreign
|
|
35
|
|
|
(125
|
)
|
|
638
|
|
|||
Total
|
|
$
|
(1,385
|
)
|
|
$
|
(1,685
|
)
|
|
$
|
(972
|
)
|
|
|
|
|
|
|
|
|
|
|
|||
Income tax expense (benefit):
|
|
|
|
|
|
|
|
|
|
|||
Current:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
$
|
11
|
|
|
$
|
19
|
|
|
$
|
2
|
|
State and local
|
|
20
|
|
|
19
|
|
|
(6
|
)
|
|||
Foreign
|
|
17
|
|
|
21
|
|
|
47
|
|
|||
Total current
|
|
48
|
|
|
59
|
|
|
43
|
|
|||
|
|
|
|
|
|
|
|
|
||||
Deferred:
|
|
|
|
|
|
|
|
|
||||
Federal
|
|
(239
|
)
|
|
70
|
|
|
96
|
|
|||
State and local
|
|
(66
|
)
|
|
(139
|
)
|
|
(42
|
)
|
|||
Foreign
|
|
—
|
|
|
135
|
|
|
47
|
|
|||
Total deferred
|
|
(305
|
)
|
|
66
|
|
|
101
|
|
|||
Total
|
|
$
|
(257
|
)
|
|
$
|
125
|
|
|
$
|
144
|
|
|
|
2015
|
|
2014
|
|
2013
|
|||
Effective tax rate reconciliation:
|
|
|
|
|
|
|
|||
Federal income tax rate (benefit rate)
|
|
(35.0
|
)%
|
|
(35.0
|
)%
|
|
(35.0
|
)%
|
State and local tax (benefit) net of federal tax benefit
|
|
(1.8
|
)
|
|
(4.6
|
)
|
|
(3.5
|
)
|
Federal and state valuation allowance
|
|
37.4
|
|
|
44.1
|
|
|
74.0
|
|
Long-lived land and intangibles
|
|
(16.9
|
)
|
|
(0.4
|
)
|
|
0.6
|
|
Impairment of indefinite-lived trade names
|
|
(4.9
|
)
|
|
—
|
|
|
—
|
|
Loss disallowance
|
|
3.5
|
|
|
—
|
|
|
—
|
|
Tax credits
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
Resolution of income tax matters
|
|
(0.3
|
)
|
|
(2.7
|
)
|
|
(1.4
|
)
|
Adjust foreign statutory rates
|
|
(0.3
|
)
|
|
0.5
|
|
|
(15.7
|
)
|
Sears Canada valuation allowance
|
|
—
|
|
|
9.0
|
|
|
—
|
|
Sears Canada rights offering
|
|
—
|
|
|
1.4
|
|
|
—
|
|
Tax benefit resulting from additional paid-in capital income allocation
|
|
—
|
|
|
(3.5
|
)
|
|
—
|
|
Tax benefit resulting from other comprehensive income allocation
|
|
—
|
|
|
—
|
|
|
(9.9
|
)
|
Canadian repatriation cost on Sears Canada dividend received
|
|
—
|
|
|
(0.7
|
)
|
|
6.1
|
|
Other
|
|
0.4
|
|
|
0.2
|
|
|
0.9
|
|
|
|
(18.6
|
)%
|
|
7.4
|
%
|
|
14.8
|
%
|
millions
|
|
January 30,
2016 |
|
January 31,
2015 |
||||
Deferred tax assets and liabilities:
|
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Federal benefit for state and foreign taxes
|
|
$
|
147
|
|
|
$
|
146
|
|
Accruals and other liabilities
|
|
180
|
|
|
166
|
|
||
Capital leases
|
|
54
|
|
|
64
|
|
||
NOL carryforwards
|
|
1,583
|
|
|
1,843
|
|
||
Postretirement benefit plans
|
|
86
|
|
|
92
|
|
||
Pension
|
|
1,241
|
|
|
1,207
|
|
||
Property and equipment
|
|
226
|
|
|
74
|
|
||
Deferred income
|
|
514
|
|
|
128
|
|
||
Credit carryforwards
|
|
832
|
|
|
791
|
|
||
Other
|
|
164
|
|
|
124
|
|
||
Total deferred tax assets
|
|
5,027
|
|
|
4,635
|
|
||
Valuation allowance
|
|
(4,757
|
)
|
|
(4,478
|
)
|
||
Net deferred tax assets
|
|
270
|
|
|
157
|
|
||
|
|
|
|
|
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Trade names/Intangibles
|
|
722
|
|
|
791
|
|
||
Inventory
|
|
338
|
|
|
440
|
|
||
Other
|
|
103
|
|
|
121
|
|
||
Total deferred tax liabilities
|
|
1,163
|
|
|
1,352
|
|
||
Net deferred tax liability
|
|
$
|
(893
|
)
|
|
$
|
(1,195
|
)
|
|
|
Federal, State, and Foreign Tax
|
||||||||||
millions
|
|
January 30,
2016 |
|
January 31,
2015 |
|
February 1, 2014
|
||||||
Gross UTB Balance at Beginning of Period
|
|
$
|
131
|
|
|
$
|
150
|
|
|
$
|
161
|
|
Tax positions related to the current period:
|
|
|
|
|
|
|
|
|
|
|||
Gross increases
|
|
14
|
|
|
15
|
|
|
15
|
|
|||
Gross decreases
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Tax positions related to prior periods:
|
|
|
|
|
|
|
|
|
||||
Gross increases
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Gross decreases
|
|
—
|
|
|
(27
|
)
|
|
(17
|
)
|
|||
Settlements
|
|
—
|
|
|
(5
|
)
|
|
(1
|
)
|
|||
Lapse of statute of limitations
|
|
(8
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|||
Exchange rate fluctuations
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|||
Gross UTB Balance at End of Period
|
|
$
|
137
|
|
|
$
|
131
|
|
|
$
|
150
|
|
|
2015
|
||||||||||
millions
|
Kmart
|
|
Sears Domestic
|
|
Sears Holdings
|
||||||
Straight-line rent expense
|
$
|
20
|
|
|
$
|
100
|
|
|
$
|
120
|
|
Amortization of deferred gain on sale-leaseback
|
(11
|
)
|
|
(41
|
)
|
|
(52
|
)
|
|||
Rent expense
|
$
|
9
|
|
|
$
|
59
|
|
|
$
|
68
|
|
|
2015
|
||||||||||
millions
|
Kmart
|
|
Sears Domestic
|
|
Sears Holdings
|
||||||
Gain
|
$
|
154
|
|
|
$
|
471
|
|
|
$
|
625
|
|
Loss
|
(17
|
)
|
|
(100
|
)
|
|
(117
|
)
|
|||
Immediate Net Gain
|
$
|
137
|
|
|
$
|
371
|
|
|
$
|
508
|
|
|
|
January 30, 2016
|
|
January 31, 2015
|
||||||||||||
millions
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
||||||||
Amortizing intangible assets:
|
|
|
|
|
|
|
|
|
||||||||
Favorable lease rights
|
|
$
|
155
|
|
|
$
|
57
|
|
|
$
|
158
|
|
|
$
|
54
|
|
Contractual arrangements and customer lists
|
|
96
|
|
|
96
|
|
|
96
|
|
|
94
|
|
||||
|
|
251
|
|
|
153
|
|
|
254
|
|
|
148
|
|
||||
Non-amortizing intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Trade names
|
|
1,811
|
|
|
—
|
|
|
1,991
|
|
|
—
|
|
||||
Total
|
|
$
|
2,062
|
|
|
$
|
153
|
|
|
$
|
2,245
|
|
|
$
|
148
|
|
Estimated Amortization
|
|
||
2016
|
$
|
5
|
|
2017
|
4
|
|
|
2018
|
4
|
|
|
2019
|
4
|
|
|
2020
|
4
|
|
|
Thereafter
|
77
|
|
millions
|
Sears Domestic
|
||
Balance, February 1, 2014:
|
|
||
Goodwill
|
$
|
379
|
|
2014 activity:
|
|
||
Separation of Lands' End
|
(110
|
)
|
|
Balance, January 30, 2016 and January 31, 2015
|
$
|
269
|
|
millions
|
Markdowns
(1)
|
|
Severance Costs
(2)
|
|
Lease Termination Costs
(2)
|
|
Other Charges
(2)
|
|
Impairment and Accelerated Depreciation
(3)
|
|
Total
Store Closing Costs
|
||||||||||||
Kmart
|
$
|
39
|
|
|
$
|
16
|
|
|
$
|
21
|
|
|
$
|
10
|
|
|
$
|
1
|
|
|
$
|
87
|
|
Sears Domestic
|
5
|
|
|
21
|
|
|
(15
|
)
|
|
1
|
|
|
2
|
|
|
14
|
|
||||||
Total 2015 costs
|
$
|
44
|
|
|
$
|
37
|
|
|
$
|
6
|
|
|
$
|
11
|
|
|
$
|
3
|
|
|
$
|
101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Kmart
|
$
|
54
|
|
|
$
|
32
|
|
|
$
|
42
|
|
|
$
|
14
|
|
|
$
|
23
|
|
|
$
|
165
|
|
Sears Domestic
|
14
|
|
|
14
|
|
|
21
|
|
|
6
|
|
|
14
|
|
|
69
|
|
||||||
Sears Canada
|
1
|
|
|
10
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Total 2014 costs
|
$
|
69
|
|
|
$
|
56
|
|
|
$
|
68
|
|
|
$
|
20
|
|
|
$
|
37
|
|
|
$
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Kmart
|
$
|
45
|
|
|
$
|
10
|
|
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
12
|
|
|
$
|
101
|
|
Sears Domestic
|
11
|
|
|
(3
|
)
|
|
(39
|
)
|
|
—
|
|
|
12
|
|
|
(19
|
)
|
||||||
Sears Canada
|
1
|
|
|
52
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
55
|
|
||||||
Total 2013 costs
|
$
|
57
|
|
|
$
|
59
|
|
|
$
|
(23
|
)
|
|
$
|
20
|
|
|
$
|
24
|
|
|
$
|
137
|
|
(1)
|
Recorded within cost of sales, buying and occupancy on the Consolidated Statements of Operations.
|
(2)
|
Recorded within selling and administrative on the Consolidated Statements of Operations. Lease termination costs are net of estimated sublease income, and include the reversal of closed store reserves for which the lease agreement has been terminated and the reversal of deferred rent balances related to closed stores.
|
(3)
|
2015 costs are recorded within depreciation and amortization on the Consolidated Statements of Operations. 2014 costs include
$29 million
recorded within impairment charges and
$8 million
recorded within depreciation and amortization on the Consolidated Statements of Operations. 2013 costs include
$13 million
recorded within impairment charges and
$11 million
recorded within depreciation and amortization on the Consolidated Statements of Operations.
|
millions
|
Severance
Costs
|
|
Lease
Termination
Costs
|
|
Other
Charges
|
|
Total
|
||||||||
Balance at February 1, 2014
|
$
|
63
|
|
|
$
|
119
|
|
|
$
|
17
|
|
|
$
|
199
|
|
Store closing costs
|
56
|
|
|
76
|
|
|
20
|
|
|
152
|
|
||||
Payments/utilizations/other
|
(76
|
)
|
|
(39
|
)
|
|
(29
|
)
|
|
(144
|
)
|
||||
Balance at January 31, 2015
|
43
|
|
|
156
|
|
|
8
|
|
|
207
|
|
||||
Store closing costs
|
37
|
|
|
8
|
|
|
11
|
|
|
56
|
|
||||
Payments/utilizations/other
|
(22
|
)
|
|
(50
|
)
|
|
(11
|
)
|
|
(83
|
)
|
||||
Balance at January 30, 2016
|
$
|
58
|
|
|
$
|
114
|
|
|
$
|
8
|
|
|
$
|
180
|
|
millions
|
2015
|
|
2014
|
|
2013
|
||||||
Kmart
|
$
|
14
|
|
|
$
|
10
|
|
|
$
|
67
|
|
Sears Domestic
|
80
|
|
|
9
|
|
|
140
|
|
|||
Sears Canada
|
—
|
|
|
15
|
|
|
13
|
|
|||
Sears Holdings
|
$
|
94
|
|
|
$
|
34
|
|
|
$
|
220
|
|
millions
|
|
2015
|
|
2014
|
|
2013
|
||||||
Minimum rentals
|
|
$
|
713
|
|
|
$
|
710
|
|
|
$
|
762
|
|
Percentage rentals
|
|
8
|
|
|
12
|
|
|
15
|
|
|||
Less-Sublease rentals
|
|
(46
|
)
|
|
(45
|
)
|
|
(56
|
)
|
|||
Less-Amortization of deferred gain on sale-leaseback
|
|
(52
|
)
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
623
|
|
|
$
|
677
|
|
|
$
|
721
|
|
|
|
Minimum Lease Commitments
|
||||||
millions
|
|
Capital
|
|
Operating
|
||||
2016
|
|
$
|
75
|
|
|
$
|
708
|
|
2017
|
|
56
|
|
|
623
|
|
||
2018
|
|
33
|
|
|
529
|
|
||
2019
|
|
19
|
|
|
435
|
|
||
2020
|
|
13
|
|
|
370
|
|
||
Later years
|
|
69
|
|
|
1,837
|
|
||
Total minimum lease payments
|
|
265
|
|
|
4,502
|
|
||
Less-minimum sublease income
|
|
|
|
|
(127
|
)
|
||
Net minimum lease payments
|
|
|
|
|
$
|
4,375
|
|
|
Less:
|
|
|
|
|
|
|
||
Estimated executory costs
|
|
(14
|
)
|
|
|
|
||
Interest at a weighted average rate of 5.9%
|
|
(56
|
)
|
|
|
|
||
Capital lease obligations
|
|
195
|
|
|
|
|
||
Less current portion of capital lease obligations
|
|
(58
|
)
|
|
|
|
||
Long-term capital lease obligations
|
|
$
|
137
|
|
|
|
|
•
|
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 amounts 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
|
January 30,
2016 |
|
January 31,
2015 |
||||
Unearned revenues
|
$
|
694
|
|
|
$
|
739
|
|
Self-insurance reserves
|
567
|
|
|
611
|
|
||
Other
|
470
|
|
|
499
|
|
||
Total
|
$
|
1,731
|
|
|
$
|
1,849
|
|
(i)
|
Hardlines—consists of home appliances, consumer electronics, lawn & garden, tools & hardware, automotive parts, household goods, toys, housewares and sporting goods;
|
(ii)
|
Apparel and Soft Home—includes women's, men's, kids', footwear, jewelry, accessories and soft home;
|
(iii)
|
Food and Drug—consists of grocery & household, pharmacy and drugstore;
|
(iv)
|
Service—includes repair, installation and automotive service and extended contract revenue; and
|
(v)
|
Other—includes revenues earned in connection with our agreements with SHO and Lands' End, as well as credit revenues and licensed business revenues.
|
|
|
2015
|
||||||||||
millions
|
|
Kmart
|
|
Sears Domestic
|
|
Sears Holdings
|
||||||
Merchandise sales and services:
|
|
|
|
|
|
|
||||||
Hardlines
|
|
$
|
2,936
|
|
|
$
|
7,915
|
|
|
$
|
10,851
|
|
Apparel and Soft Home
|
|
3,434
|
|
|
2,907
|
|
|
6,341
|
|
|||
Food and Drug
|
|
3,735
|
|
|
9
|
|
|
3,744
|
|
|||
Service
|
|
13
|
|
|
2,127
|
|
|
2,140
|
|
|||
Other
|
|
70
|
|
|
2,000
|
|
|
2,070
|
|
|||
Total merchandise sales and services
|
|
10,188
|
|
|
14,958
|
|
|
25,146
|
|
|||
Costs and expenses:
|
|
|
|
|
|
|
||||||
Cost of sales, buying and occupancy
|
|
8,042
|
|
|
11,294
|
|
|
19,336
|
|
|||
Selling and administrative
|
|
2,537
|
|
|
4,320
|
|
|
6,857
|
|
|||
Depreciation and amortization
|
|
72
|
|
|
350
|
|
|
422
|
|
|||
Impairment charges
|
|
14
|
|
|
260
|
|
|
274
|
|
|||
Gain on sales of assets
|
|
(185
|
)
|
|
(558
|
)
|
|
(743
|
)
|
|||
Total costs and expenses
|
|
10,480
|
|
|
15,666
|
|
|
26,146
|
|
|||
Operating loss
|
|
$
|
(292
|
)
|
|
$
|
(708
|
)
|
|
$
|
(1,000
|
)
|
Total assets
|
|
$
|
3,059
|
|
|
$
|
8,278
|
|
|
$
|
11,337
|
|
Capital expenditures
|
|
$
|
42
|
|
|
$
|
169
|
|
|
$
|
211
|
|
|
|
2014
|
||||||||||||||
millions
|
|
Kmart
|
|
Sears Domestic
|
|
Sears Canada
|
|
Sears Holdings
|
||||||||
Merchandise sales and services:
|
|
|
|
|
|
|
|
|
||||||||
Hardlines
|
|
$
|
3,605
|
|
|
$
|
8,903
|
|
|
$
|
1,100
|
|
|
$
|
13,608
|
|
Apparel and Soft Home
|
|
4,049
|
|
|
3,673
|
|
|
880
|
|
|
8,602
|
|
||||
Food and Drug
|
|
4,326
|
|
|
12
|
|
|
—
|
|
|
4,338
|
|
||||
Service
|
|
17
|
|
|
2,318
|
|
|
77
|
|
|
2,412
|
|
||||
Other
|
|
77
|
|
|
2,130
|
|
|
31
|
|
|
2,238
|
|
||||
Total merchandise sales and services
|
|
12,074
|
|
|
17,036
|
|
|
2,088
|
|
|
31,198
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales, buying and occupancy
|
|
9,513
|
|
|
12,950
|
|
|
1,586
|
|
|
24,049
|
|
||||
Selling and administrative
|
|
2,962
|
|
|
4,655
|
|
|
603
|
|
|
8,220
|
|
||||
Depreciation and amortization
|
|
95
|
|
|
437
|
|
|
49
|
|
|
581
|
|
||||
Impairment charges
|
|
29
|
|
|
19
|
|
|
15
|
|
|
63
|
|
||||
(Gain) loss on sales of assets
|
|
(103
|
)
|
|
(105
|
)
|
|
1
|
|
|
(207
|
)
|
||||
Total costs and expenses
|
|
12,496
|
|
|
17,956
|
|
|
2,254
|
|
|
32,706
|
|
||||
Operating loss
|
|
$
|
(422
|
)
|
|
$
|
(920
|
)
|
|
$
|
(166
|
)
|
|
$
|
(1,508
|
)
|
Total assets
|
|
$
|
3,142
|
|
|
$
|
10,043
|
|
|
$
|
—
|
|
|
$
|
13,185
|
|
Capital expenditures
|
|
$
|
45
|
|
|
$
|
193
|
|
|
$
|
32
|
|
|
$
|
270
|
|
|
|
2013
|
||||||||||||||
millions
|
|
Kmart
|
|
Sears Domestic
|
|
Sears Canada
|
|
Sears Holdings
|
||||||||
Merchandise sales and services:
|
|
|
|
|
|
|
|
|
||||||||
Hardlines
|
|
$
|
4,037
|
|
|
$
|
9,355
|
|
|
$
|
1,866
|
|
|
$
|
15,258
|
|
Apparel and Soft Home
|
|
4,298
|
|
|
5,197
|
|
|
1,742
|
|
|
11,237
|
|
||||
Food and Drug
|
|
4,772
|
|
|
16
|
|
|
—
|
|
|
4,788
|
|
||||
Service
|
|
—
|
|
|
2,502
|
|
|
131
|
|
|
2,633
|
|
||||
Other
|
|
87
|
|
|
2,128
|
|
|
57
|
|
|
2,272
|
|
||||
Total merchandise sales and services
|
|
13,194
|
|
|
19,198
|
|
|
3,796
|
|
|
36,188
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales, buying and occupancy
|
|
10,329
|
|
|
14,324
|
|
|
2,780
|
|
|
27,433
|
|
||||
Selling and administrative
|
|
3,083
|
|
|
5,216
|
|
|
1,085
|
|
|
9,384
|
|
||||
Depreciation and amortization
|
|
129
|
|
|
511
|
|
|
92
|
|
|
732
|
|
||||
Impairment charges
|
|
70
|
|
|
150
|
|
|
13
|
|
|
233
|
|
||||
Gain on sales of assets
|
|
(66
|
)
|
|
(63
|
)
|
|
(538
|
)
|
|
(667
|
)
|
||||
Total costs and expenses
|
|
13,545
|
|
|
20,138
|
|
|
3,432
|
|
|
37,115
|
|
||||
Operating income (loss)
|
|
$
|
(351
|
)
|
|
$
|
(940
|
)
|
|
$
|
364
|
|
|
$
|
(927
|
)
|
Total assets
|
|
$
|
3,891
|
|
|
$
|
12,194
|
|
|
$
|
2,149
|
|
|
$
|
18,234
|
|
Capital expenditures
|
|
$
|
63
|
|
|
$
|
196
|
|
|
$
|
70
|
|
|
$
|
329
|
|
|
|
2015
|
||||||||||||||
millions, except per share data
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Revenues
|
|
$
|
5,882
|
|
|
$
|
6,211
|
|
|
$
|
5,750
|
|
|
$
|
7,303
|
|
Cost of sales, buying and occupancy
|
|
4,364
|
|
|
4,776
|
|
|
4,488
|
|
|
5,708
|
|
||||
Selling and administrative
|
|
1,681
|
|
|
1,694
|
|
|
1,630
|
|
|
1,852
|
|
||||
Net income (loss) attributable to Holdings' shareholders
|
|
(303
|
)
|
|
208
|
|
|
(454
|
)
|
|
(580
|
)
|
||||
Basic net income (loss) per share attributable to Holdings' shareholders
|
|
(2.85
|
)
|
|
1.95
|
|
|
(4.26
|
)
|
|
(5.44
|
)
|
||||
Diluted net income (loss) per share attributable to Holdings' shareholders
|
|
(2.85
|
)
|
|
1.84
|
|
|
(4.26
|
)
|
|
(5.44
|
)
|
|
|
2014
|
||||||||||||||
millions, except per share data
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
Revenues
|
|
$
|
7,879
|
|
|
$
|
8,013
|
|
|
$
|
7,207
|
|
|
$
|
8,099
|
|
Cost of sales, buying and occupancy
|
|
6,051
|
|
|
6,271
|
|
|
5,606
|
|
|
6,121
|
|
||||
Selling and administrative
|
|
2,089
|
|
|
2,118
|
|
|
2,011
|
|
|
2,002
|
|
||||
Net loss attributable to Holdings' shareholders
|
|
(402
|
)
|
|
(573
|
)
|
|
(548
|
)
|
|
(159
|
)
|
||||
Basic net loss per share attributable to Holdings' shareholders
|
|
(3.79
|
)
|
|
(5.39
|
)
|
|
(5.15
|
)
|
|
(1.50
|
)
|
||||
Diluted net loss per share attributable to Holdings' shareholders
|
|
(3.79
|
)
|
|
(5.39
|
)
|
|
(5.15
|
)
|
|
(1.50
|
)
|
millions
|
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
238
|
|
Intercompany receivables
|
|
—
|
|
|
—
|
|
|
26,935
|
|
|
(26,935
|
)
|
|
—
|
|
|||||
Accounts receivable
|
|
7
|
|
|
383
|
|
|
29
|
|
|
—
|
|
|
419
|
|
|||||
Merchandise inventories
|
|
—
|
|
|
5,172
|
|
|
—
|
|
|
—
|
|
|
5,172
|
|
|||||
Prepaid expenses and other current assets
|
|
114
|
|
|
453
|
|
|
257
|
|
|
(608
|
)
|
|
216
|
|
|||||
Total current assets
|
|
121
|
|
|
6,208
|
|
|
27,259
|
|
|
(27,543
|
)
|
|
6,045
|
|
|||||
Total property and equipment, net
|
|
—
|
|
|
1,829
|
|
|
802
|
|
|
—
|
|
|
2,631
|
|
|||||
Goodwill and intangible assets
|
|
—
|
|
|
269
|
|
|
1,909
|
|
|
—
|
|
|
2,178
|
|
|||||
Other assets
|
|
—
|
|
|
265
|
|
|
1,910
|
|
|
(1,692
|
)
|
|
483
|
|
|||||
Investment in subsidiaries
|
|
10,419
|
|
|
26,616
|
|
|
—
|
|
|
(37,035
|
)
|
|
—
|
|
|||||
TOTAL ASSETS
|
|
$
|
10,540
|
|
|
$
|
35,187
|
|
|
$
|
31,880
|
|
|
$
|
(66,270
|
)
|
|
$
|
11,337
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
$
|
—
|
|
|
$
|
797
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
797
|
|
Current portion of long-term debt and capitalized lease obligations
|
|
—
|
|
|
70
|
|
|
1
|
|
|
—
|
|
|
71
|
|
|||||
Merchandise payables
|
|
—
|
|
|
1,574
|
|
|
—
|
|
|
—
|
|
|
1,574
|
|
|||||
Intercompany payables
|
|
11,892
|
|
|
15,043
|
|
|
—
|
|
|
(26,935
|
)
|
|
—
|
|
|||||
Short-term deferred tax liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other current liabilities
|
|
20
|
|
|
2,273
|
|
|
1,311
|
|
|
(608
|
)
|
|
2,996
|
|
|||||
Total current liabilities
|
|
11,912
|
|
|
19,757
|
|
|
1,312
|
|
|
(27,543
|
)
|
|
5,438
|
|
|||||
Long-term debt and capitalized lease obligations
|
|
685
|
|
|
2,998
|
|
|
1
|
|
|
(1,576
|
)
|
|
2,108
|
|
|||||
Pension and postretirement benefits
|
|
—
|
|
|
2,201
|
|
|
5
|
|
|
—
|
|
|
2,206
|
|
|||||
Deferred gain on sale-leaseback
|
|
—
|
|
|
753
|
|
|
—
|
|
|
—
|
|
|
753
|
|
|||||
Sale-leaseback financing obligation
|
|
—
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|||||
Long-term deferred tax liabilities
|
|
58
|
|
|
—
|
|
|
873
|
|
|
(38
|
)
|
|
893
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
832
|
|
|
1,128
|
|
|
(229
|
)
|
|
1,731
|
|
|||||
Total Liabilities
|
|
12,655
|
|
|
26,705
|
|
|
3,319
|
|
|
(29,386
|
)
|
|
13,293
|
|
|||||
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholder's equity (deficit)
|
|
(2,115
|
)
|
|
8,482
|
|
|
28,561
|
|
|
(36,891
|
)
|
|
(1,963
|
)
|
|||||
Noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|||||
Total Equity (Deficit)
|
|
(2,115
|
)
|
|
8,482
|
|
|
28,561
|
|
|
(36,884
|
)
|
|
(1,956
|
)
|
|||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
|
$
|
10,540
|
|
|
$
|
35,187
|
|
|
$
|
31,880
|
|
|
$
|
(66,270
|
)
|
|
$
|
11,337
|
|
millions
|
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
219
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
250
|
|
Intercompany receivables
|
|
—
|
|
|
—
|
|
|
26,291
|
|
|
(26,291
|
)
|
|
—
|
|
|||||
Accounts receivable
|
|
—
|
|
|
390
|
|
|
39
|
|
|
—
|
|
|
429
|
|
|||||
Merchandise inventories
|
|
—
|
|
|
4,943
|
|
|
—
|
|
|
—
|
|
|
4,943
|
|
|||||
Prepaid expenses and other current assets
|
|
38
|
|
|
797
|
|
|
266
|
|
|
(860
|
)
|
|
241
|
|
|||||
Total current assets
|
|
38
|
|
|
6,349
|
|
|
26,627
|
|
|
(27,151
|
)
|
|
5,863
|
|
|||||
Total property and equipment, net
|
|
—
|
|
|
3,524
|
|
|
925
|
|
|
—
|
|
|
4,449
|
|
|||||
Goodwill and intangible assets
|
|
—
|
|
|
277
|
|
|
2,089
|
|
|
—
|
|
|
2,366
|
|
|||||
Other assets
|
|
—
|
|
|
236
|
|
|
2,765
|
|
|
(2,494
|
)
|
|
507
|
|
|||||
Investment in subsidiaries
|
|
11,700
|
|
|
25,350
|
|
|
—
|
|
|
(37,050
|
)
|
|
—
|
|
|||||
TOTAL ASSETS
|
|
$
|
11,738
|
|
|
$
|
35,736
|
|
|
$
|
32,406
|
|
|
$
|
(66,695
|
)
|
|
$
|
13,185
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term borrowings
|
|
$
|
—
|
|
|
$
|
614
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
614
|
|
Current portion of long-term debt and capitalized lease obligations
|
|
—
|
|
|
72
|
|
|
3
|
|
|
—
|
|
|
75
|
|
|||||
Merchandise payables
|
|
—
|
|
|
1,621
|
|
|
—
|
|
|
—
|
|
|
1,621
|
|
|||||
Intercompany payables
|
|
11,103
|
|
|
15,188
|
|
|
—
|
|
|
(26,291
|
)
|
|
—
|
|
|||||
Short-term deferred tax liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other current liabilities
|
|
34
|
|
|
2,395
|
|
|
1,716
|
|
|
(860
|
)
|
|
3,285
|
|
|||||
Total current liabilities
|
|
11,137
|
|
|
19,890
|
|
|
1,719
|
|
|
(27,151
|
)
|
|
5,595
|
|
|||||
Long-term debt and capitalized lease obligations
|
|
1,577
|
|
|
3,726
|
|
|
40
|
|
|
(2,256
|
)
|
|
3,087
|
|
|||||
Pension and postretirement benefits
|
|
—
|
|
|
2,400
|
|
|
4
|
|
|
—
|
|
|
2,404
|
|
|||||
Long-term deferred tax liabilities
|
|
59
|
|
|
238
|
|
|
974
|
|
|
(76
|
)
|
|
1,195
|
|
|||||
Other long-term liabilities
|
|
—
|
|
|
889
|
|
|
1,205
|
|
|
(245
|
)
|
|
1,849
|
|
|||||
Total Liabilities
|
|
12,773
|
|
|
27,143
|
|
|
3,942
|
|
|
(29,728
|
)
|
|
14,130
|
|
|||||
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholder's equity (deficit)
|
|
(1,035
|
)
|
|
8,593
|
|
|
28,463
|
|
|
(36,972
|
)
|
|
(951
|
)
|
|||||
Noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||
Total Equity (Deficit)
|
|
(1,035
|
)
|
|
8,593
|
|
|
28,463
|
|
|
(36,966
|
)
|
|
(945
|
)
|
|||||
TOTAL LIABILITIES AND EQUITY (DEFICIT)
|
|
$
|
11,738
|
|
|
$
|
35,736
|
|
|
$
|
32,405
|
|
|
$
|
(66,694
|
)
|
|
$
|
13,185
|
|
millions
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Merchandise sales and services
|
$
|
—
|
|
|
$
|
25,264
|
|
|
$
|
2,861
|
|
|
$
|
(2,979
|
)
|
|
$
|
25,146
|
|
Cost of sales, buying and occupancy
|
—
|
|
|
19,819
|
|
|
1,131
|
|
|
(1,614
|
)
|
|
19,336
|
|
|||||
Selling and administrative
|
3
|
|
|
7,322
|
|
|
897
|
|
|
(1,365
|
)
|
|
6,857
|
|
|||||
Depreciation and amortization
|
—
|
|
|
350
|
|
|
72
|
|
|
—
|
|
|
422
|
|
|||||
Impairment charges
|
—
|
|
|
94
|
|
|
180
|
|
|
—
|
|
|
274
|
|
|||||
Gain on sales of assets
|
—
|
|
|
(735
|
)
|
|
(8
|
)
|
|
—
|
|
|
(743
|
)
|
|||||
Total costs and expenses
|
3
|
|
|
26,850
|
|
|
2,272
|
|
|
(2,979
|
)
|
|
26,146
|
|
|||||
Operating income (loss)
|
(3
|
)
|
|
(1,586
|
)
|
|
589
|
|
|
—
|
|
|
(1,000
|
)
|
|||||
Interest expense
|
(265
|
)
|
|
(481
|
)
|
|
(83
|
)
|
|
506
|
|
|
(323
|
)
|
|||||
Interest and investment income (loss)
|
(19
|
)
|
|
44
|
|
|
419
|
|
|
(506
|
)
|
|
(62
|
)
|
|||||
Income (loss) before income taxes
|
(287
|
)
|
|
(2,023
|
)
|
|
925
|
|
|
—
|
|
|
(1,385
|
)
|
|||||
Income tax (expense) benefit
|
115
|
|
|
480
|
|
|
(338
|
)
|
|
—
|
|
|
257
|
|
|||||
Equity (deficit) in earnings in subsidiaries
|
(956
|
)
|
|
158
|
|
|
—
|
|
|
798
|
|
|
—
|
|
|||||
Net income (loss)
|
(1,128
|
)
|
|
(1,385
|
)
|
|
587
|
|
|
798
|
|
|
(1,128
|
)
|
|||||
Income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
$
|
(1,128
|
)
|
|
$
|
(1,385
|
)
|
|
$
|
587
|
|
|
$
|
797
|
|
|
$
|
(1,129
|
)
|
millions
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Merchandise sales and services
|
$
|
—
|
|
|
$
|
29,277
|
|
|
$
|
5,187
|
|
|
$
|
(3,266
|
)
|
|
$
|
31,198
|
|
Cost of sales, buying and occupancy
|
—
|
|
|
22,917
|
|
|
2,820
|
|
|
(1,688
|
)
|
|
24,049
|
|
|||||
Selling and administrative
|
2
|
|
|
8,283
|
|
|
1,513
|
|
|
(1,578
|
)
|
|
8,220
|
|
|||||
Depreciation and amortization
|
—
|
|
|
454
|
|
|
127
|
|
|
—
|
|
|
581
|
|
|||||
Impairment charges
|
—
|
|
|
48
|
|
|
15
|
|
|
—
|
|
|
63
|
|
|||||
Gain on sales of assets
|
—
|
|
|
(180
|
)
|
|
(27
|
)
|
|
—
|
|
|
(207
|
)
|
|||||
Total costs and expenses
|
2
|
|
|
31,522
|
|
|
4,448
|
|
|
(3,266
|
)
|
|
32,706
|
|
|||||
Operating income (loss)
|
(2
|
)
|
|
(2,245
|
)
|
|
739
|
|
|
—
|
|
|
(1,508
|
)
|
|||||
Interest expense
|
(223
|
)
|
|
(469
|
)
|
|
(92
|
)
|
|
471
|
|
|
(313
|
)
|
|||||
Interest and investment income
|
92
|
|
|
28
|
|
|
483
|
|
|
(471
|
)
|
|
132
|
|
|||||
Other income
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Income (loss) before income taxes
|
(133
|
)
|
|
(2,686
|
)
|
|
1,134
|
|
|
—
|
|
|
(1,685
|
)
|
|||||
Income tax (expense) benefit
|
40
|
|
|
489
|
|
|
(654
|
)
|
|
—
|
|
|
(125
|
)
|
|||||
Deficit in earnings in subsidiaries
|
(1,717
|
)
|
|
(53
|
)
|
|
—
|
|
|
1,770
|
|
|
—
|
|
|||||
Net income (loss)
|
(1,810
|
)
|
|
(2,250
|
)
|
|
480
|
|
|
1,770
|
|
|
(1,810
|
)
|
|||||
Loss attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|
128
|
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
$
|
(1,810
|
)
|
|
$
|
(2,250
|
)
|
|
$
|
480
|
|
|
$
|
1,898
|
|
|
$
|
(1,682
|
)
|
millions
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Merchandise sales and services
|
$
|
—
|
|
|
$
|
32,391
|
|
|
$
|
7,202
|
|
|
$
|
(3,405
|
)
|
|
$
|
36,188
|
|
Cost of sales, buying and occupancy
|
—
|
|
|
25,035
|
|
|
4,128
|
|
|
(1,730
|
)
|
|
27,433
|
|
|||||
Selling and administrative
|
2
|
|
|
8,865
|
|
|
2,192
|
|
|
(1,675
|
)
|
|
9,384
|
|
|||||
Depreciation and amortization
|
—
|
|
|
557
|
|
|
175
|
|
|
—
|
|
|
732
|
|
|||||
Impairment charges
|
—
|
|
|
220
|
|
|
13
|
|
|
—
|
|
|
233
|
|
|||||
Gain on sales of assets
|
—
|
|
|
(129
|
)
|
|
(538
|
)
|
|
—
|
|
|
(667
|
)
|
|||||
Total costs and expenses
|
2
|
|
|
34,548
|
|
|
5,970
|
|
|
(3,405
|
)
|
|
37,115
|
|
|||||
Operating income (loss)
|
(2
|
)
|
|
(2,157
|
)
|
|
1,232
|
|
|
—
|
|
|
(927
|
)
|
|||||
Interest expense
|
(217
|
)
|
|
(394
|
)
|
|
(85
|
)
|
|
442
|
|
|
(254
|
)
|
|||||
Interest and investment income
|
—
|
|
|
43
|
|
|
606
|
|
|
(442
|
)
|
|
207
|
|
|||||
Other income
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Income (loss) before income taxes
|
(219
|
)
|
|
(2,508
|
)
|
|
1,755
|
|
|
—
|
|
|
(972
|
)
|
|||||
Income tax (expense) benefit
|
37
|
|
|
469
|
|
|
(650
|
)
|
|
—
|
|
|
(144
|
)
|
|||||
Equity (deficit) in earnings in subsidiaries
|
(934
|
)
|
|
894
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|||||
Net income (loss)
|
(1,116
|
)
|
|
(1,145
|
)
|
|
1,105
|
|
|
40
|
|
|
(1,116
|
)
|
|||||
Income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(249
|
)
|
|
(249
|
)
|
|||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
$
|
(1,116
|
)
|
|
$
|
(1,145
|
)
|
|
$
|
1,105
|
|
|
$
|
(209
|
)
|
|
$
|
(1,365
|
)
|
millions
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
(1,128
|
)
|
|
$
|
(1,385
|
)
|
|
$
|
587
|
|
|
$
|
798
|
|
|
$
|
(1,128
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Pension and postretirement adjustments, net of tax
|
—
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|||||
Currency translation adjustments, net of tax
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Unrealized net loss, net of tax
|
—
|
|
|
(3
|
)
|
|
(65
|
)
|
|
68
|
|
|
—
|
|
|||||
Total other comprehensive income
|
—
|
|
|
110
|
|
|
(66
|
)
|
|
68
|
|
|
112
|
|
|||||
Comprehensive income (loss)
|
(1,128
|
)
|
|
(1,275
|
)
|
|
521
|
|
|
866
|
|
|
(1,016
|
)
|
|||||
Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Comprehensive income (loss) attributable to Holdings' shareholders
|
$
|
(1,128
|
)
|
|
$
|
(1,275
|
)
|
|
$
|
521
|
|
|
$
|
865
|
|
|
$
|
(1,017
|
)
|
millions
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
(1,810
|
)
|
|
$
|
(2,250
|
)
|
|
$
|
480
|
|
|
$
|
1,770
|
|
|
$
|
(1,810
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Pension and postretirement adjustments, net of tax
|
—
|
|
|
(1,050
|
)
|
|
10
|
|
|
—
|
|
|
(1,040
|
)
|
|||||
Deferred gain on derivatives, net of tax
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Currency translation adjustments, net of tax
|
5
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
3
|
|
|||||
Sears Canada de-consolidation
|
54
|
|
|
10
|
|
|
(250
|
)
|
|
|
|
(186
|
)
|
||||||
Unrealized net loss, net of tax
|
—
|
|
|
2
|
|
|
222
|
|
|
(224
|
)
|
|
—
|
|
|||||
Total other comprehensive income (loss)
|
57
|
|
|
(1,038
|
)
|
|
(20
|
)
|
|
(224
|
)
|
|
(1,225
|
)
|
|||||
Comprehensive income (loss)
|
(1,753
|
)
|
|
(3,288
|
)
|
|
460
|
|
|
1,546
|
|
|
(3,035
|
)
|
|||||
Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
438
|
|
|
438
|
|
|||||
Comprehensive income (loss) attributable to Holdings' shareholders
|
$
|
(1,753
|
)
|
|
$
|
(3,288
|
)
|
|
$
|
460
|
|
|
$
|
1,984
|
|
|
$
|
(2,597
|
)
|
millions
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income (loss)
|
$
|
(1,116
|
)
|
|
$
|
(1,145
|
)
|
|
$
|
1,105
|
|
|
$
|
40
|
|
|
$
|
(1,116
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Pension and postretirement adjustments, net of tax
|
—
|
|
|
320
|
|
|
102
|
|
|
—
|
|
|
422
|
|
|||||
Deferred gain on derivatives, net of tax
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Currency translation adjustments, net of tax
|
9
|
|
|
—
|
|
|
(80
|
)
|
|
—
|
|
|
(71
|
)
|
|||||
Unrealized net loss, net of tax
|
—
|
|
|
(2
|
)
|
|
(213
|
)
|
|
215
|
|
|
—
|
|
|||||
Total other comprehensive income (loss)
|
11
|
|
|
318
|
|
|
(191
|
)
|
|
215
|
|
|
353
|
|
|||||
Comprehensive income (loss)
|
(1,105
|
)
|
|
(827
|
)
|
|
914
|
|
|
255
|
|
|
(763
|
)
|
|||||
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(260
|
)
|
|
(260
|
)
|
|||||
Comprehensive income (loss) attributable to Holdings' shareholders
|
$
|
(1,105
|
)
|
|
$
|
(827
|
)
|
|
$
|
914
|
|
|
$
|
(5
|
)
|
|
$
|
(1,023
|
)
|
millions
|
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
395
|
|
|
$
|
(3,021
|
)
|
|
$
|
938
|
|
|
$
|
(479
|
)
|
|
$
|
(2,167
|
)
|
Proceeds from sales of property and investments
|
|
—
|
|
|
2,725
|
|
|
5
|
|
|
—
|
|
|
2,730
|
|
|||||
Purchases of property and equipment
|
|
—
|
|
|
(202
|
)
|
|
(9
|
)
|
|
—
|
|
|
(211
|
)
|
|||||
Net investing with Affiliates
|
|
(395
|
)
|
|
—
|
|
|
(446
|
)
|
|
841
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
|
(395
|
)
|
|
2,523
|
|
|
(450
|
)
|
|
841
|
|
|
2,519
|
|
|||||
Repayments of long-term debt
|
|
—
|
|
|
(1,403
|
)
|
|
(2
|
)
|
|
—
|
|
|
(1,405
|
)
|
|||||
Increase in short-term borrowings, primarily 90 days or less
|
|
—
|
|
|
583
|
|
|
—
|
|
|
—
|
|
|
583
|
|
|||||
Proceeds from sale-leaseback financing
|
|
—
|
|
|
508
|
|
|
—
|
|
|
—
|
|
|
508
|
|
|||||
Debt issuance costs
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||
Intercompany dividend
|
|
—
|
|
|
|
|
|
(479
|
)
|
|
479
|
|
|
—
|
|
|||||
Net borrowing with Affiliates
|
|
—
|
|
|
841
|
|
|
—
|
|
|
(841
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
—
|
|
|
479
|
|
|
(481
|
)
|
|
(362
|
)
|
|
(364
|
)
|
|||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
—
|
|
|
(19
|
)
|
|
7
|
|
|
—
|
|
|
(12
|
)
|
|||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
—
|
|
|
219
|
|
|
31
|
|
|
—
|
|
|
250
|
|
|||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
238
|
|
millions
|
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
386
|
|
|
$
|
(2,229
|
)
|
|
$
|
897
|
|
|
$
|
(441
|
)
|
|
$
|
(1,387
|
)
|
Proceeds from sales of property and investments
|
|
—
|
|
|
358
|
|
|
66
|
|
|
—
|
|
|
424
|
|
|||||
Purchases of property and equipment
|
|
—
|
|
|
(229
|
)
|
|
(41
|
)
|
|
—
|
|
|
(270
|
)
|
|||||
Sears Canada de-consolidation
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
|
—
|
|
|
(207
|
)
|
|||||
Proceeds from Sears Canada rights offering
|
|
380
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
380
|
|
|||||
Net investing with Affiliates
|
|
(1,391
|
)
|
|
—
|
|
|
(720
|
)
|
|
2,111
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
|
(1,011
|
)
|
|
129
|
|
|
(902
|
)
|
|
2,111
|
|
|
327
|
|
|||||
Proceeds from debt issuances
|
|
625
|
|
|
400
|
|
|
—
|
|
|
—
|
|
|
1,025
|
|
|||||
Repayments of long-term debt
|
|
—
|
|
|
(69
|
)
|
|
(11
|
)
|
|
—
|
|
|
(80
|
)
|
|||||
Increase in short-term borrowings, primarily 90 days or less
|
|
—
|
|
|
(1,117
|
)
|
|
—
|
|
|
—
|
|
|
(1,117
|
)
|
|||||
Lands' End pre-separation funding
|
|
—
|
|
|
515
|
|
|
—
|
|
|
—
|
|
|
515
|
|
|||||
Separation of Lands' End, Inc.
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|||||
Debt issuance costs
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
|||||
Intercompany dividend
|
|
—
|
|
|
—
|
|
|
(441
|
)
|
|
441
|
|
|
—
|
|
|||||
Net borrowing with Affiliates
|
|
—
|
|
|
2,111
|
|
|
—
|
|
|
(2,111
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
625
|
|
|
1,782
|
|
|
(452
|
)
|
|
(1,670
|
)
|
|
285
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
NET DECREASE IN CASH AND CASH EQUIVALENTS
|
|
—
|
|
|
(318
|
)
|
|
(460
|
)
|
|
—
|
|
|
(778
|
)
|
|||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
—
|
|
|
537
|
|
|
491
|
|
|
—
|
|
|
1,028
|
|
|||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
—
|
|
|
$
|
219
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
250
|
|
millions
|
|
Parent
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
—
|
|
|
$
|
(2,344
|
)
|
|
$
|
1,235
|
|
|
$
|
—
|
|
|
$
|
(1,109
|
)
|
Proceeds from sales of property and investments
|
|
—
|
|
|
155
|
|
|
840
|
|
|
—
|
|
|
995
|
|
|||||
Net increase in investments and restricted cash
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Purchases of property and equipment
|
|
—
|
|
|
(258
|
)
|
|
(71
|
)
|
|
—
|
|
|
(329
|
)
|
|||||
Net investing with Affiliates
|
|
—
|
|
|
—
|
|
|
245
|
|
|
(245
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
|
—
|
|
|
(103
|
)
|
|
1,012
|
|
|
(245
|
)
|
|
664
|
|
|||||
Proceeds from debt issuances
|
|
—
|
|
|
990
|
|
|
4
|
|
|
—
|
|
|
994
|
|
|||||
Repayments of long-term debt
|
|
—
|
|
|
(65
|
)
|
|
(18
|
)
|
|
—
|
|
|
(83
|
)
|
|||||
Increase in short-term borrowings, primarily 90 days or less
|
|
—
|
|
|
238
|
|
|
—
|
|
|
—
|
|
|
238
|
|
|||||
Debt issuance costs
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||||
Sears Canada dividend paid to noncontrolling shareholders
|
|
—
|
|
|
243
|
|
|
(476
|
)
|
|
—
|
|
|
(233
|
)
|
|||||
Intercompany dividend
|
|
604
|
|
|
92
|
|
|
(696
|
)
|
|
|
|
—
|
|
||||||
Net borrowing with Affiliates
|
|
(604
|
)
|
|
1,180
|
|
|
(821
|
)
|
|
245
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
—
|
|
|
2,664
|
|
|
(2,007
|
)
|
|
245
|
|
|
902
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
|||||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
|
—
|
|
|
217
|
|
|
202
|
|
|
—
|
|
|
419
|
|
|||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
|
—
|
|
|
320
|
|
|
289
|
|
|
—
|
|
|
609
|
|
|||||
CASH AND CASH EQUIVALENTS, END OF YEAR
|
|
$
|
—
|
|
|
$
|
537
|
|
|
$
|
491
|
|
|
$
|
—
|
|
|
$
|
1,028
|
|
millions
|
|
Balance at
beginning
of period
|
|
Additions
charged to
costs and
expenses
|
|
(Deductions)
|
|
Balance at
end of period
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Allowance for Doubtful Accounts
(1)
:
|
|
|
|
|
|
|
|
|
||||||||
2015
|
|
$
|
25
|
|
|
$
|
10
|
|
|
$
|
(1
|
)
|
|
$
|
34
|
|
2014
|
|
32
|
|
|
2
|
|
|
(9
|
)
|
|
25
|
|
||||
2013
|
|
28
|
|
|
6
|
|
|
(2
|
)
|
|
32
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allowance for Deferred Tax Assets
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2015
|
|
4,478
|
|
|
603
|
|
|
(324
|
)
|
|
4,757
|
|
||||
2014
|
|
3,366
|
|
|
1,392
|
|
|
(280
|
)
|
|
4,478
|
|
||||
2013
|
|
2,743
|
|
|
726
|
|
|
(103
|
)
|
|
3,366
|
|
(1)
|
Charges to the account are for the purposes for which the reserves were created.
|
(2)
|
The valuation allowance increased primarily due to the increase in other federal and state deferred tax assets and decreased primarily due to the utilization of federal and state NOL's against 2015 taxable income and state NOL expirations.
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
|
/s/ DELOITTE & TOUCHE LLP
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
(a)
|
The following documents are filed as part of this report:
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedule
|
(b)
|
Exhibits
|
S
EARS
H
OLDINGS
C
ORPORATION
|
|
|
|
By:
|
/S/
R
OBERT
A. R
IECKER
|
Name:
|
Robert A. Riecker
|
Title:
|
Vice President, Controller and
Chief Accounting Officer
|
Date: March 16, 2016
|
/S/
E
DWARD
S. L
AMPERT
|
Director, Chairman of the Board of Directors, and Chief Executive Officer (principal executive officer)
|
March 16, 2016
|
|
Edward S. Lampert
|
|
||
|
|
|
|
/S/
R
OBERT
A. S
CHRIESHEIM
|
Executive Vice President and Chief Financial Officer (principal financial officer)
|
March 16, 2016
|
|
Robert A. Schriesheim
|
|
||
|
|
|
|
/S/
R
OBERT
A. R
IECKER
|
Vice President, Controller and Chief Accounting Officer (principal accounting officer)
|
March 16, 2016
|
|
Robert A. Riecker
|
|
||
|
|
|
|
|
Director
|
March 16, 2016
|
|
Bruce R. Berkowitz
|
|
|
|
|
|
|
|
/S/
CESAR L. ALVAREZ
|
Director
|
March 16, 2016
|
|
Cesar L. Alvarez
|
|
|
|
|
|
|
|
/S/
P
AUL
G. D
E
P
ODESTA
|
Director
|
March 16, 2016
|
|
Paul G. DePodesta
|
|
|
|
|
|
|
|
|
Director
|
March 16, 2016
|
|
Alesia J. Haas
|
|
|
|
|
|
|
|
/S/
KUNAL S. KAMLANI
|
Director
|
March 16, 2016
|
|
Kunal S. Kamlani
|
|
|
|
|
|
|
|
/S/
W
ILLIAM
C. K
UNKLER
, III
|
Director
|
March 16, 2016
|
|
William C. Kunkler, III
|
|
|
|
|
|
|
|
/S/
S
TEVEN
T. M
NUCHIN
|
Director
|
March 16, 2016
|
|
Steven T. Mnuchin
|
|
|
|
|
|
|
|
/S/
A
NN
N. R
EESE
|
Director
|
March 16, 2016
|
|
Ann N. Reese
|
|
|
|
|
|
|
|
/S/
T
HOMAS
J. T
ISCH
|
Director
|
March 16, 2016
|
|
Thomas J. Tisch
|
|
|
|
|
|
|
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 January 22, 2014, filed on January 24, 2014 (File No. 000-51217)).
|
|
|
|
|
|
4.1
|
|
|
|
Registrant hereby agrees to furnish to the Commission, upon request, the instruments defining the rights of holders of each issue of long-term debt of Registrant and its consolidated subsidiaries.
|
|
|
|
|
|
4.2
|
|
|
|
Indenture, dated as of October 12, 2010, among Sears Holdings Corporation, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee and Collateral Agent (incorporated by reference to Exhibit 4.1 to Registrant's Current Report on Form 8-K, dated October 12, 2010, filed on October 15, 2010 (File No. 000-51217)).
|
|
|
|
|
|
4.3
|
|
|
|
Security Agreement, dated as of October 12, 2010, among Sears Holdings Corporation, the guarantors party thereto and Wells Fargo Bank, National Association, as Collateral Agent (incorporated by reference to Exhibit 4.2 to Registrant's Current Report on Form 8-K, dated October 12, 2010, filed on October 15, 2010 (File No. 000-51217)).
|
|
|
|
|
|
4.4
|
|
|
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Intercreditor Agreement, dated as of October 12, 2010, among Bank of America, N.A., Wells Fargo Retail Finance, LLC and General Electric Capital Corporation, as ABL Agents, and Wells Fargo Bank, National Association, as Second Lien Agent (incorporated by reference to Exhibit 4.3 to Registrant's Current Report on Form 8-K, dated October 12, 2010, filed on October 15, 2010 (File No. 000-51217)).
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4.5
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Registration Rights Agreement, dated as of October 12, 2010, by and among Sears Holdings Corporation and the guarantors party thereto and Banc of America Securities LLC (incorporated by reference to Exhibit 4.4 to Registrant's Current Report on Form 8-K, dated October 12, 2010, filed on October 15, 2010 (File No. 000-51217)).
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4.6
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Registration Rights Agreement, dated as of October 12, 2010, by and among Sears Holdings Corporation and the guarantors party thereto, Sears Holdings Corporation Investment Committee on behalf of the Sears Holdings Pension Plan and Sears Holdings Pension Trust (incorporated by reference to Exhibit 4.5 to Registrant's Current Report on Form 8-K, dated October 12, 2010, filed on October 15, 2010 (File No. 000-51217)).
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4.7
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Indenture, dated as of November 21, 2014, by and between Sears Holdings Corporation and Computershare Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K, dated November 21, 2014, filed on November 21, 2014 (File No. 001-36693)).
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4.8
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First Supplemental Indenture, dated as of November 21, 2014, by and between Sears Holdings Corporation and Computershare Trust Company, N.A., as Trustee (including form of note) (incorporated by reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K, dated November 21, 2014, filed on November 21, 2014 (File No. 001-36693)).
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4.9
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Warrant Agreement, dated as of November 21, 2014, by and between Sears Holdings Corporation, Computershare Inc. and Computershare Trust Company, N.A., as Warrant Agent (including form of warrant certificate) (incorporated by reference to Exhibit 4.3 to Registrant’s Current Report on Form 8-K, dated November 21, 2014, filed on November 21, 2014 (File No. 001-36693)).
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10.1
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Guarantee executed by Sears, Roebuck and Co. under the Indenture, dated as of May 15, 1995, between Sears Roebuck Acceptance Corp. and JP Morgan Chase Bank (successor to The Chase Manhattan Bank, N.A.), as supplemented by the First Supplemental Indenture, dated as of November 3, 2003 (incorporated by reference to Exhibit 4(g) to Sears Roebuck Acceptance Corp.'s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2003 (File No. 001-04040)).
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10.2
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Guarantee executed by Sears, Roebuck and Co. under the Indenture, dated as of October 1, 2002, between Sears Roebuck Acceptance Corp. and BNY Midwest Trust Company, as supplemented by the First Supplemental Indenture, dated as of November 3, 2003 (incorporated by reference to Exhibit 4(h) to Sears Roebuck Acceptance Corp.'s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2003 (File No. 001-04040)).
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10.3
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Guarantee, dated as of November 3, 2003, by Sears, Roebuck and Co. of the commercial paper master notes of Sears Roebuck Acceptance Corp. (incorporated by reference to Exhibit 10.38 to Sears, Roebuck and Co.'s Annual Report on Form 10-K for the fiscal year ended January 3, 2004 (File No. 001-00416)).
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10.4
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Third Amended and Restated Credit Agreement, dated as of July 21, 2015, between Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation, the lenders party thereto, and Bank of America, N.A., as agent (incorporated by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form10-Q for the fiscal quarter ended August 1, 2015 (File No. 001-36693))
(1)
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10.5
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Third Amended and Restated Guarantee and Collateral Agreement, dated as of July 21, 2015, among Sears Holdings Corporation, Sears, Roebuck and Co., Sears Roebuck Acceptance Corp., Kmart Holding Corporation, Kmart Corporation and certain of their respective subsidiaries, as Grantors, and Bank of America, N.A., Wells Fargo Bank, National Association and General Electric Capital Corporation, as Co-Collateral Agents (incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form10-Q for the fiscal quarter ended August 1, 2015 (File No. 001-36693)).
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10.6
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Loan Agreement, dated as of September 15, 2014, by and between Sears, Roebuck and Co., Sears Development Co., Kmart Corporation, JPP II, LLC and JPP, LLC (incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form10-Q for the fiscal quarter ended November 1, 2014 (File No. 000-51217)).
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10.7
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Guaranty, dated as of September 15, 2014, by and between Sears Holdings Corporation, JPP II, LLC and JPP, LLC (incorporated by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 1, 2014 (File No. 000-51217)).
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10.8
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Amendment to Loan Agreement, dated as of February 25, 2015, by and between JPP II, LLC, JPP, LLC, Sears Roebuck and Co., Sears Development Co. and Kmart Corporation (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K, dated February 26, 2015, filed on February 26, 2015 (File No. 001-36693)).
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10.9
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Purchase, Sale and Servicing Transfer Agreement, dated as of July 15, 2003, by and among Sears, Roebuck and Co., Sears Financial Holding Corporation, Sears National Bank, Sears Roebuck de Puerto Rico, Inc., Sears Life Holding Corp., SRFG, Inc., Sears Intellectual Property Management Company and Citicorp (incorporated by reference to Exhibit 10.1 to Sears, Roebuck and Co.'s Current Report on Form 8-K, dated July 15, 2003, filed on July 17, 2003 (File No. 001-00416)).
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10.10
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Amendment No. 1, dated as of November 3, 2003, to the Purchase, Sale and Servicing Transfer Agreement, by and among Sears, Roebuck and Co., certain subsidiaries of Sears, Roebuck and Co. and Citicorp (incorporated by reference to Exhibit 2(b) to Sears, Roebuck and Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2003 (File No. 001-00416)).
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10.11
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Amended and Restated Program Agreement, dated as of July 15, 2003, amended and restated as of November 3, 2003, by and between Sears, Roebuck and Co., Sears Intellectual Property Management Company and Citibank (USA) N.A. (incorporated by reference to Exhibit 10(a) to Sears, Roebuck and Co.'s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2003 (File No. 001-00416)).
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10.12
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Terms Sheet For Revision of Program Agreement Between Sears, Roebuck and Co. and Citibank USA, N.A., dated April 29, 2005 (incorporated by reference to Exhibit 10.40 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2005 (File No. 000-51217)).
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10.13
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Sears Holdings Corporation Director Compensation Program, as amended (incorporated by reference to Exhibit 10.5 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended May 1, 2010 (File No. 000-51217)).**
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10.14
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Sears Holdings Corporation 2006 Stock Plan, as amended (incorporated by reference to Appendix C to Registrant's Proxy Statement dated March 15, 2006 (File No. 000-51217)).**
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10.15
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Sears Holdings Corporation 2013 Stock Plan (incorporated by reference to Appendix A to Registrant's Proxy Statement dated March 28, 2013 (File No. 000-51217)).**
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10.16
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Sears Holdings Corporation Amended and Restated Umbrella Incentive Program (incorporated by reference to Appendix C to Registrant's Proxy Statement dated March 28, 2013 (File No. 000-51217)).**
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10.17
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Amendment to the Performance Measures under the Amended and Restated Sears Holdings Corporation Umbrella Incentive Program (incorporated by reference to Appendix B to Registrant's Proxy Statement dated March 28, 2013 (File No. 000-51217)).**
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10.18
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Form of Sears Holdings Corporation Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2011(File No. 000-51217)).**
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10.19
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Form of Sears Holdings Corporation Restricted Stock Award Agreement: Terms and Conditions (incorporated by reference to Exhibit 10.17 to Registrant’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014 (File No. 000-51217)).**
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10.20
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Form of Sears Holdings Corporation Restricted Stock Unit Award Agreement: Terms and Conditions (incorporated by reference to Exhibit 10.18 to Registrant’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014 (File No. 000-51217)).**
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10.21
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Form of Cash Right - Addendum to Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.17 to Registrant's Annual Report on Form 10-K for the fiscal year ended January 28, 2012 (File No. 000-51217)).**
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10.22
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Form of Cash Award - Addendum to Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K, dated September 28, 2012, filed on September 28, 2012 (File No. 000-51217)).**
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10.23
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Form of Cash Award - Addendum to Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K, dated November 30, 2012, filed on November 30, 2012 (File No. 000-51217)).**
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10.24
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Sears Holdings Corporation Long-Term Incentive Program, effective April 27, 2011 (incorporated by reference to Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011 (File No. 000-51217)).**
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10.25
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Sears Holdings Corporation Cash Long-Term Incentive Plan (Amended and Restated Effective April 10, 2015) (incorporated by reference to Exhibit 10.3 to Registrant's Quarterly Report on Form10-Q for the fiscal quarter ended May 2, 2015 (File No. 001-36693)).**
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10.26
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Sears Holdings Corporation Annual Incentive Plan (Amended and Restated Effective April 10, 2015) (incorporated by reference to Exhibit 10.1 to Registrant's Quarterly Report on Form10-Q for the fiscal quarter ended May 2, 2015 (File No. 001-36693)).**
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10.27
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2015 Additional Definitions under Sears Holdings Corporation Annual Incentive Plan (incorporated by reference to Exhibit 10.2 to Registrant's Quarterly Report on Form10-Q for the fiscal quarter ended May 2, 2015 (File No. 001-36693)).**
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10.28
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2013 Additional Definitions under Sears Holdings Corporation Long-Term Incentive Program (incorporated by reference to Exhibit 10.3 to Registrant's Current Report on Form 8-K, dated February 12, 2013, filed on February 19, 2013 (File No. 000-51217)).**
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10.29
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2014 Additional Definitions under Sears Holdings Corporation Long-Term Incentive Program (incorporated by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2014 (File No. 000-51217)).**
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10.30
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2015 Additional Definitions under Sears Holdings Corporation Long-Term Incentive Program (incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2015 (File No. 001-36693)).**
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10.31
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Form of LTIP Award Agreement (incorporated by reference to Exhibit 10.32 to Registrant's Annual Report on Form 10-K for the fiscal year ended January 31, 2015 (File No. 001-36693).**
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10.32
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Form of Cash Award - Addendum to Restricted Stock Award(s) (Lands’ End Make-Whole) (incorporated by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2014 (File No. 000-51217)).**
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10.33
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Form of Cash Award - Addendum to Restricted Stock Unit Award(s) (Lands’ End Make-Whole) (incorporated by reference to Exhibit 10.5 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2014 (File No. 000-51217)).**
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10.34
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Form of Cash Award - Addendum to Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K, dated October 22, 2014, filed on October 22, 2014 (File No. 001-36693)).**
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10.35
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Form of Cash Right - Addendum to Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K, dated November 7, 2014, filed on November 7, 2014 (File No. 001-36693)).**
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*10.36
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Form of Cash Right - Addendum to Restricted Stock Award(s) and Restricted Stock Unit Awards (Seritage Make-Whole).**
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10.37
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Form of Executive Severance Agreement (incorporated by reference to Exhibit 10.29 to Registrant’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014 (File No. 000-51217)).**
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10.38
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Form of letter from Registrant to Edward S. Lampert relating to employment dated March 18, 2013 (incorporated by reference to Exhibit 10.30 to Registrant's Annual Report on Form 10-K for the fiscal year ended February 2, 2013 (File No. 000-51217)).**
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10.39
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Addendum, dated as of April 21, 2014, to letter from Registrant to Edward S. Lampert relating to employment dated March 18, 2013 (Lands’ End Make-Whole) (incorporated by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 3, 2014 (File No. 000-51217)).**
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10.40
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Letter Agreement, dated January 28, 2016, by and between the Company and Edward S. Lampert (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K, dated January 28, 2016, filed on February 3, 2016 (File No. 001-36693)).**
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10.41
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Letter from Registrant to Jeffrey A. Balagna relating to employment dated April 26, 2013 (incorporated by reference to Exhibit 10.31 to Registrant’s Annual Report on Form 10-K for the fiscal year ended February 1, 2014 (File No. 000-51217)).**
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*10.42
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Letter from Registrant to Girish Lakshman relating to employment dated June 11, 2015**
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*10.43
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Letter from Registrant to Leena Munjal relating to employment dated June 2, 2011, as supplemented October 17, 2012 and May 5, 2015.**
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10.44
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Letter from Registrant to Robert A. Schriesheim relating to employment dated August 15, 2011 (incorporated by reference to Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2011(File No. 000-51217)).**
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10.45
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Executive Severance Agreement, dated and effective as of August 16, 2011, between Sears Holdings Corporation and its affiliates and subsidiaries and Robert A. Schriesheim (incorporated by reference to Exhibit 10.3 to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended July 30, 2011(File No. 000-51217)).**
(1)
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10.46
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Summary of Proposed Terms Regarding the Pension Plan Protection and Forbearance Agreement Between PBGC and Sears, dated September 4, 2015, by and between Sears Holdings Corporation and the Pension Benefit Guaranty Corporation (incorporated by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2015 (File No. 001-36693)).
(2)
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10.47
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Master Lease by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, Kmart Operations, LLC, and Sears Operations, LLC, dated as of July 7, 2015Master Lease by and among Seritage SRC Finance LLC, Seritage KMT Finance LLC, Kmart Operations, LLC, and Sears Operations, LLC, dated as of July 7, 2015 (incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K, dated July 7, 2015, filed on July 13, 2015 (File No. 001-36693)).
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*12
|
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Computation of ratio of earnings to fixed charges for Registrant and consolidated subsidiaries.
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*21
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Subsidiaries of the Registrant.
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*23
|
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Consent of Deloitte & Touche LLP.
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*31.1
|
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Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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*31.2
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Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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*32.1
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Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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*32.2
|
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Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
|
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|
The following financial information from the Annual Report on Form 10-K for the fiscal year ended January 30, 2016, formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) the Consolidated Statements of Operations for the fiscal years ended January 30, 2016, January 31, 2015 and February 1, 2014; (ii) the Consolidated Statements of Comprehensive Loss for the fiscal years ended January 30, 2016, January 31, 2015 and February 1, 2014; (iii) the Consolidated Balance Sheets at January 30, 2016 and January 31, 2015; (iv) the Consolidated Statements of Cash Flows for the fiscal years ended January 30, 2016, January 31, 2015 and February 1, 2014; (v) the Consolidated Statements of Equity (Deficit) for the fiscal years ended January 30, 2016, January 31, 2015 and February 1, 2014; and (vi) the Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
|
*
|
Filed herewith
|
**
|
A management contract or compensatory plan or arrangement required to be filed as an exhibit to this report pursuant to Item 15(b) of Form 10-K.
|
(1)
|
Confidential treatment was granted as to omitted portions of this Exhibit. The omitted material has been filed separately with the Securities and Exchange Commission.
|
(2)
|
Portions omitted pursuant to a request for confidential treatment. The omitted material has been filed separately with the Securities and Exchange Commission.
|
•
|
Annual base salary at a rate of $800,000
|
•
|
You will receive a one-time sign-on bonus of $500,000. This sign-on bonus will be payable within thirty (30) days following your start date. In the event your employment with SHC is terminated, you will be required to repay all or a portion of the sign-on bonus, including taxes withheld, unless prohibited by law, to SHC within thirty (30) days of your last day worked in accordance with the following schedule:
|
•
|
100% if terminated by SHC for misconduct or integrity issues within twenty-four (24) months of your start date; or
|
•
|
100% if you voluntarily terminate your employment with SHC within twelve (12) months of your start date
|
•
|
Participation in the Sears Holdings Corporation Annual Incentive Plan (“AIP”) with an annual target incentive opportunity of 150% of your base salary. Your target incentive under the 2015 AIP will be prorated from your start date through January 30, 2016, the last day of SHC’s 2015 fiscal year. Any incentive payable with respect to a fiscal year will be paid by April 15
th
of the following fiscal year, provided that you are actively employed at the payment date. Further details regarding your 2015 AIP target award will be provided to you following your start date.
|
•
|
You will be eligible to receive a Special Incentive Award with respect to each of SHC’s 2015 and 2016 fiscal years, payable by April 15
th
of the fiscal year following the applicable fiscal year, provided that you are actively employed at the applicable payment date, subject to the following terms:
|
•
|
100% of your target incentive opportunity under the 2015 AIP, subject to reduction by any amount payable to you under the 2015 AIP; and
|
•
|
100% of your target incentive opportunity under the 2016 AIP, subject to reduction by any amount payable to you under the 2016 AIP.
|
•
|
For the avoidance of doubt, you will not participate in the SHC long-term incentive program (“LTI”).
|
•
|
A long-term incentive award of $2,416,666 (“Special LTI Award”). This award will be earned progressively on the last day of the 2015, 2016 and 2017 SHC fiscal years as follows:
|
Earned Date
|
Amount
|
January 30, 2016
|
$416,666
|
January 28, 2017
|
$1,000,000
|
February 3, 2018
|
$1,000,000
|
•
|
Subject to approval of the Compensation Committee, during each of the first three (3) years of your service, you will be entitled to receive restricted stock units valued on an annualized basis at $1,500,000 under the Sears Holdings Corporation 2013 Stock Plan, which units represent a right to receive a payment in cash or shares based on the fair market value of the units granted, subject to the terms of the 2013 Stock Plan and restricted stock unit award agreement (the “Annual Stock Compensation”), provided that you remain employed by SHC on the applicable award date. The number of shares issued in respect of the Annual Stock Compensation each year will be determined using the NASDAQ regular market hours closing price of SHC common stock on the applicable Determination Date (rounded to the nearest whole share). For purposes hereof, the Determination Dates shall be your first (1st), second (2nd) and third (3rd) anniversaries of your start date. Shares paid in respect of the Annual Equity Compensation will be fully vested when issued
.
|
•
|
You represent and warrant to SHC that (a) as of your start date with SHC, you are not subject to any obligation, written or oral, containing any non-competition provision or any other restriction (including, without limitation, any confidentiality provision) that would result in any restriction on your ability to accept and perform this or any other position with SHC or any of its affiliates and (b) you are not (i) a member of any board of directors, board of trustees or similar governing body of any for-profit, non-profit or not-for-profit entity, or (ii) a party to any agreement, written or oral, with any entity under which you would receive remuneration for your services, except as disclosed to and approved by SHC in advance of your start date. You agree that you will not (A) become a member of any board or body described in clause (b)(i) of the preceding sentence or (B) become a party to any agreement described in clause (b)(ii) of the preceding sentence, in each case without the prior written consent of SHC, such consent not to be unreasonably withheld. Further, you agree you will not disclose or use, in violation of an obligation of confidentiality, any information that you acquired as a result of any previous employment or otherwise
.
As a condition of employment, prior to your start date with SHC, you are required to provide to SHC a copy of a fully executed release from your former employer, Amazon.com, Inc., by which Amazon.com, Inc. releases you
|
•
|
You will be required to sign an Executive Severance Agreement (“Agreement”). If your employment is terminated by SHC (other than for Cause, death or Disability) or by you for Good Reason (as such capitalized terms are defined in the Agreement), you will receive twelve (12) months of salary continuation, equal to your base salary rate at the time of termination, subject to mitigation. Under the Agreement, you agree, among other things, not to disclose confidential information and for twelve (12) months following termination of employment not to solicit employees. You also agree not to aid, assist or render services for any “Sears Competitor” or “Sears Vendor” (as such terms are defined in the Agreement) for twelve (12) months following termination of employment. The non-disclosure, non-solicitation, non-compete and non-affiliation provisions apply regardless of whether you receive severance benefits under this Agreement. This offer is contingent upon you signing this Agreement. Upon signing the Agreement, you agree that the consideration you are receiving for doing so includes not only your employment with SHC but also the other compensation and benefits you will be receiving (or are eligible to receive) from SHC as outlined herein and which you would not have been offered or received (or have been eligible to receive) without your signing the Agreement.
|
•
|
You will be covered under and subject to the terms and conditions of the Non-Accrual Vacation Policy.
|
•
|
You will be eligible to participate in all retirement, health and welfare programs on a basis no less favorable than other executives at your level, in accordance with the applicable terms, conditions and availability of those programs.
|
•
|
This offer also is contingent upon satisfactory completion of a background reference check, employment authorization verification and pre-employment drug test.
|
•
|
Annual base salary at a rate of $205,000.
|
•
|
Your annual incentive opportunity will increase to 35% of your base salary under Sears Holdings Annual Incentive Plan (“AIP”). Any incentive payable under the 2011 AIP will be prorated from January 30, 2011 through April 30, 2011 at a target of 30% of your then current base salary of $190,000 and from May 1, 2011 through January 28, 2012, the last day of Sears Holdings 2011 fiscal year, a target of 35% of your new base salary of $205,000. Any annual incentive payable with respect to a fiscal year will be paid by April 15
th
of the following fiscal year, provided that you are actively employed at the payment date.
|
•
|
Sears Holdings Corporation has historically provided annual Long-Term Incentive Program (“LTIP”) awards to its executives, with performance cycles of three years and award amounts established as a percentage of base salary. Your participation in the 2011 LTIP will be determined at the same time and in the same manner as other similarly positioned executives of the company.
|
|
Title
|
Base Salary
|
Annual Target Incentive
|
Target Total Cash
|
Current
|
Director, Chief of Staff – Office of the Chairman
|
$190,000
|
30%
|
$247,000
|
New
|
DVP, Chief of Staff – Office of the Chairman
|
$205,000
|
35%
|
$276,750
|
Increase
|
|
7.9%
|
|
12.0%
|
•
|
You will be required to sign a DVP Executive Severance Agreement (“Agreement”). If your employment with SHC is terminated by SHC other than for Cause, death or Disability or by you for Good Reason (as such capitalized terms are defined in the Executive Severance Agreement), you will receive four (4) months of salary continuation, equal to your base salary at the time of termination, subject to mitigation. Under this Agreement, you agree, among other things, not to disclose confidential information and for twelve (12) months following termination of employment not to solicit employees. You also agree not to aid, assist or render services for any “Sears Competitor” or “Sears Vendor” (as such terms are defined in the Agreement) for six (6) months following termination of employment. The non-disclosure, non-solicitation, non-compete and non-affiliation provisions apply regardless of whether you are eligible for severance benefits under this agreement. This promotion is conditioned upon you signing this Agreement.
|
•
|
Annual base salary at a rate of $375,000.
|
•
|
You will be eligible to receive a special cash retention bonus of $300,000 (gross). This special retention bonus will be scheduled to vest on a graded basis, with one-third of the bonus vesting and becoming payable as soon as administratively possible following each of the first three (3) anniversaries of the effective date (October 1, 2012), provided you are actively employed on the applicable payment date.
|
•
|
You will be required to sign a new Executive Severance Agreement (“Agreement”). If your employment with SHC is terminated by SHC other than for Cause, death or Disability or by you for Good Reason (as such capitalized terms are defined in the Agreement), you will receive twelve (12) months of salary continuation, equal to your base salary at the time of termination, subject to mitigation. Under this Agreement, you agree, among other things, not to disclose confidential information and for twelve (12) months following termination of employment not to solicit employees. You also agree not to aid, assist or render services for any “Sears Competitor” or “Sears Vendor” (as such terms are defined in the Agreement) for twelve (12) months following termination of employment. The non-disclosure, non-solicitation, non-compete and non-affiliation provisions apply regardless of whether you are eligible for severance benefits under this Agreement. Please note that upon execution, this Agreement will supersede all previous severance agreements between you and SHC.
The promotion and increase in annual base pay are conditioned upon you signing this Agreement.
|
•
|
The remainder of your current compensation package will remain unchanged.
|
•
|
An increase to your annual base salary to $600,000, effective May 1, 2015.
|
•
|
A grant of restricted stock units valued at $500,000 under the Sears Holdings Corporation 2013 Stock Plan, which units represent a right to receive a payment in cash or shares based on the fair market value of the units granted, subject to the terms of the 2013 Stock Plan and restricted stock unit award agreement. The number of restricted stock units granted will be determined using the market closing price of Sears Holdings shares on the grant date (rounded to the nearest whole unit). The grant date will be the first business day of the month following the later of (a) the date upon which we receive both your signed acceptance of this offer (sign and date below) or (b) the approval of the Compensation Committee of this proposed grant. The restricted stock units granted will be scheduled to vest on a graded basis, with one-third of the units granted vesting on each of the next three (3) anniversaries of the grant date.
|
|
|
Year Ended
|
||||||||||||||||||
(millions, except ratios)
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Fixed Charges
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest and amortization of debt discount and expense on all indebtedness
|
|
|
$289
|
|
|
|
$276
|
|
|
|
$214
|
|
|
|
$216
|
|
|
|
$225
|
|
Add interest element implicit in rentals
|
|
240
|
|
|
241
|
|
|
259
|
|
|
280
|
|
|
285
|
|
|||||
|
|
529
|
|
|
517
|
|
|
473
|
|
|
496
|
|
|
510
|
|
|||||
Interest capitalized
|
|
2
|
|
|
2
|
|
|
2
|
|
|
1
|
|
|
1
|
|
|||||
Total fixed charges
|
|
|
$531
|
|
|
|
$519
|
|
|
|
$475
|
|
|
|
$497
|
|
|
|
$511
|
|
Income
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before income taxes, noncontrolling interest, and extraordinary loss
|
|
|
($1,385
|
)
|
|
|
($1,685
|
)
|
|
|
($972
|
)
|
|
|
($1,010
|
)
|
|
|
($1,751
|
)
|
Deduct undistributed net income of unconsolidated companies
|
|
—
|
|
|
37
|
|
|
185
|
|
|
47
|
|
|
27
|
|
|||||
|
|
(1,385
|
)
|
|
(1,722
|
)
|
|
(1,157
|
)
|
|
(1,057
|
)
|
|
(1,778
|
)
|
|||||
Add
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges (excluding interest capitalized)
|
|
529
|
|
|
517
|
|
|
473
|
|
|
496
|
|
|
510
|
|
|||||
Income before fixed charges and income taxes
|
|
|
($856
|
)
|
|
|
($1,205
|
)
|
|
|
($684
|
)
|
|
|
($561
|
)
|
|
|
($1,268
|
)
|
Ratio of income to fixed charges
|
|
(1.61
|
)
|
|
(2.32
|
)
|
|
(1.44
|
)
|
|
(1.13
|
)
|
|
(2.48
|
)
|
Names
|
|
State or Other Jurisdiction of Organization
|
|
Trade Name(s)
|
|||||
Consolidated Subsidiaries:
|
|
|
|
|
|||||
Kmart Holding Corporation
*
|
|
Delaware
|
|
|
|||||
|
Kmart Corporation
*
|
|
Michigan
|
|
|
||||
|
|
KBL Holding Inc.
|
|
Delaware
|
|
|
|||
|
|
|
BlueLight.com, Inc.
|
|
Delaware
|
|
|
||
|
|
|
|
Kmart.com LLC
*
|
|
Delaware
|
|
|
|
|
|
KLC, Inc.
*
|
|
Texas
|
|
|
|||
|
|
Kmart of Michigan, Inc.
*
|
|
Michigan
|
|
KMI, Inc.
|
|||
|
|
Kmart of Washington LLC
*
|
|
Washington
|
|
|
|||
|
|
Kmart Overseas Corporation
|
|
Nevada
|
|
|
|||
|
|
|
Sears Holdings Global Sourcing Limited
|
|
Hong Kong
|
|
|
||
|
|
Kmart Stores of Illinois LLC
*
|
|
Illinois
|
|
|
|||
|
|
Kmart Stores of Texas LLC
*
|
|
Texas
|
|
|
|||
|
|
MyGofer LLC
*
|
|
Delaware
|
|
|
|||
Kmart Operations LLC
*
|
|
Delaware
|
|
|
|||||
Sears Operations LLC
*
|
|
Delaware
|
|
Sears Auto Center
|
|||||
Sears, Roebuck and Co.
*
|
|
New York
|
|
Fit Studio by Sears
Sears Auto Centers
|
|||||
|
A&E Factory Service, LLC
*
|
|
Delaware
|
|
|
||||
|
A&E Home Delivery, LLC
*
|
|
Delaware
|
|
|
||||
|
A&E Lawn & Garden, LLC
*
|
|
Delaware
|
|
|
||||
|
A&E Signature Service, LLC
*
|
|
Delaware
|
|
|
||||
|
FBA Holdings Inc.
|
|
Delaware
|
|
|
||||
|
|
California Builder Appliances, Inc.
*
|
|
Delaware
|
|
Monark of California
Monark Premium Appliance Co. of California
|
|||
|
|
Florida Builder Appliances, Inc.
*
|
|
Delaware
|
|
Monark
|
|||
|
|
SOE, Inc.
*
|
|
Delaware
|
|
|
|||
|
|
StarWest, LLC
*
|
|
Delaware
|
|
Monark Premium Appliance Co. of Arizona
Westar Kitchen and Bath, LLC
|
|||
|
Innovel Solutions, Inc.
|
|
Delaware
|
|
|
||||
|
Private Brands, Ltd.
*
|
|
Delaware
|
|
|
||||
|
Sears Development Co.
|
|
Delaware
|
|
|
||||
|
Sears Financial Holding Corporation
|
|
Delaware
|
|
|
||||
|
Sears Holdings Management Corporation
*1
|
|
Delaware
|
|
Evoke Productions
|
||||
|
|
Sears Brands Business Unit Corporation
|
|
Illinois
|
|
|
|||
|
|
|
Sears Brands, L.L.C.
|
|
Illinois
|
|
|
||
|
|
|
|
KCD IP, LLC
2
|
|
Delaware
|
|
|
|
|
|
|
Sears Buying Services, Inc.
|
|
Delaware
|
|
|
||
|
|
|
|
Sears Brands Management Corporation
*
|
|
Delaware
|
|
|
|
|
Sears Home Improvement Products, Inc.
*
|
|
Pennsylvania
|
|
|
||||
|
Sears Insurance Services, L.L.C.
|
|
Illinois
|
|
|
Names
|
|
State or Other Jurisdiction of Organization
|
|
Trade Name(s)
|
|||||
|
Sears International Holdings Corp.
|
|
Delaware
|
|
|
||||
|
|
Sears Canada Holdings Corp.
|
|
Delaware
|
|
|
|||
|
|
Sears Mexico Holdings Corp.
|
|
Delaware
|
|
|
|||
|
Sears Protection Company
*
|
|
Illinois
|
|
|
||||
|
|
Sears Protection Company (Florida), L.L.C.
*
|
|
Florida
|
|
|
|||
|
Sears Roebuck Acceptance Corp.
*
|
|
Delaware
|
|
|
||||
|
Sears, Roebuck de Puerto Rico, Inc.
*
|
|
Delaware
|
|
|
||||
|
SHC Promotions LLC
|
|
Virginia
|
|
|
||||
|
SRC Depositor Corporation
3
|
|
Delaware
|
|
|
||||
|
SRC O.P. Corporation
3
|
|
Delaware
|
|
|
||||
|
|
SRC Facilities Statutory Trust No. 2003-A
3
|
|
Delaware
|
|
|
|||
|
|
|
SRC Real Estate Holdings (TX), LLC
3
|
|
Delaware
|
|
|
||
|
|
|
SRC Real Estate (TX), LP
3
|
|
Delaware
|
|
|
||
SRe Holding Corporation
|
|
Delaware
|
|
|
|||||
|
Sears Reinsurance Company Ltd.
|
|
Bermuda
|
|
|
|
|
*
|
Loan party under the Registrant's Third Amended and Restated Credit Agreement, dated as of July 21, 2015.
|
1
|
Shares are owned by Sears, Roebuck and Co. and Kmart Holding Corporation.
|
2
|
Bankruptcy remote, special purpose entity that owns the U.S. rights to the Kenmore, Craftsman and DieHard trademarks and issuer of intercompany securities backed by such trademark rights.
|
3
|
REMIC-related subsidiary.
|
1.
|
|
I have reviewed this annual report on Form 10-K of Sears Holdings Corporation;
|
2.
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
|
I have reviewed this annual report on Form 10-K of Sears Holdings Corporation;
|
2.
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Edward S. Lampert
|
Edward S. Lampert
|
Chairman of the Board and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Robert A. Schriesheim
|
Robert A. Schriesheim
|
Executive Vice President and
|
Chief Financial Officer
|