Sears 2006 Annual Report Download - page 92

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
Minimum lease obligations, excluding taxes, insurance and other expenses payable directly by the
Company, for leases in effect as of February 3, 2007, were as follows:
Minimum
Lease
Commitments
millions Capital Operating
As of February 3, 2007
2007 ............................................................ $ 148 $ 820
2008 ............................................................ 141 743
2009 ............................................................ 133 647
2010 ............................................................ 128 561
2011 ............................................................ 124 477
Later years ....................................................... 770 3,775
Total minimum lease payments(1) ..................................... 1,444 7,023
Less—minimum sublease income ..................................... (325)
Net minimum lease payments ........................................ $6,698
Less:
Estimated executory costs ....................................... (189)
Interest at a weighted average rate of 7.7% .......................... (455)
Capital lease obligations ............................................ 800
Less current portion of capital lease obligations .......................... (63)
Long-term capital lease obligations .................................... $ 737
(1) Sears Canada: Total operating minimum lease payments of $532 million.
NOTE 17—RELATED PARTY DISCLOSURE
The Company’s Board of Directors has delegated authority to direct investment of the Company’s surplus
cash to Edward S. Lampert, subject to various limitations that have been or may be from time to time adopted by
the Board of Directors and/or the Finance Committee of the Board of Directors. Mr. Lampert is Chairman of the
Company’s Board of Directors and Finance Committee and is the Chairman and Chief Executive Officer of ESL.
Neither Mr. Lampert nor ESL will receive compensation for any such investment activities undertaken on behalf
of the Company. ESL beneficially owned 42.5% of the Company’s outstanding common stock as of February 3,
2007.
Further, to clarify the expectations that the Board of Directors has with respect to the investment of the
Company’s surplus cash, the Board has renounced, in accordance with Delaware law, any interest or expectancy
of the Company associated with any investment opportunities in securities that may come to the attention of
Mr. Lampert or any employee, officer, director or advisor to ESL and its affiliated investment entities who also
serves as an officer or director of the Company (each, a “Covered Party”) other than (a) investment opportunities
that come to such Covered Party’s attention directly and exclusively in such Covered Party’s capacity as a
director, officer or employee of the Company, (b) control investments in companies in the mass merchandising,
retailing, commercial appliance distribution, product protection agreements, residential and commercial product
installation and repair services and automotive repair and maintenance industries and (c) investment
opportunities in companies or assets with a significant role in the Company’s retailing business, including
investment in real estate currently leased by the Company or in suppliers for which the Company is a substantial
customer representing over 10% of such companies’ revenues, but excluding investments of ESL as of May 23,
2005.
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