Sears 2008 Annual Report Download - page 64

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
NOTE 3—ACQUISITION OF MINORITY INTEREST IN SEARS CANADA
During fiscal 2008, we increased our majority interest in Sears Canada from 70% to 73% by acquiring approximately
2.6 million common shares in open market transactions. We paid a total of $37 million for the additional shares acquired and
accounted for the acquisition of additional interest in Sears Canada as a purchase business combination. Total consideration for the
additional interest acquired exceeded the associated proportionate pre-acquisition carrying value for Sears Canada by
approximately $9 million, approximately all of which was allocated to goodwill.
During fiscal 2006, we increased our majority interest in Sears Canada from 54% to 70% by acquiring 17.8 million common
shares of Sears Canada pursuant to our take-over bid for Sears Canada, first announced in December 2005. We paid a total of $282
million for the additional 17.8 million common shares acquired and accounted for the acquisition of additional interest in Sears
Canada as a purchase business combination for accounting purposes. The total amount paid for shares acquired was allocated to the
assets acquired and liabilities assumed based on their estimated fair values as of the respective acquisition dates. Total
consideration for the additional interest acquired exceeded the associated proportionate pre-acquisition carrying value for Sears
Canada by $188 million. We allocated the excess to real property ($5 million), trademarks and other identifiable intangible assets
($55 million), goodwill ($167 million) and other assets and liabilities (-$39 million).
NOTE 4—BORROWINGS
Total borrowings outstanding at January 31, 2009 and February 2, 2008 were $2.9 billion and $3.0 billion, respectively. At
January 31, 2009, total short-term borrowings were $442 million, consisting of $435 million of secured borrowings and $7 million
of unsecured commercial paper. At February 2, 2008, total short-term borrowings were $162 million, consisting of $17 million of
secured borrowings and $145 million of unsecured commercial paper. The weighted-average annual interest rate paid on short-term
debt was 3.5% in fiscal 2008 and 5.5% in fiscal 2007.
Long-term debt is as follows:
ISSUE
January 31,
2009
February 2,
2008
millions
SEARS ROEBUCK ACCEPTANCE CORP.
6.25% to 7.50% Notes, due 2009 to 2043 ................................................ $1,070 $1,123
5.20% to 7.50% Medium-Term Notes, due 2009 to 2013 .................................... 106 256
SEARS DC CORP.
9.07% to 9.20% Medium-Term Notes, due 2012 .......................................... 24 25
ORCHARD SUPPLY HARDWARE STORES CORPORATION
Commercial Mortgage-Backed Loan, variable interest rate above LIBOR, due 2009(1) ............ 120 120
Senior Secured Term Loan, variable rate of interest above LIBOR, due 2013(2) .................. 189 198
SEARS CANADA INC.
6.55% to 7.45% Debentures and Medium-Term Notes, due 2009 to 2010 ....................... 250 312
CAPITALIZED LEASE OBLIGATIONS ................................................... 664 749
OTHER NOTES AND MORTGAGES ...................................................... 54 65
Total long-term borrowings ............................................................... 2,477 2,848
Current maturities ...................................................................... (345) (242)
Long-term debt and capitalized lease obligations .............................................. $2,132 $2,606
Weighted-average annual interest rate on long-term debt ........................................ 6.9% 6.8%
(1) The Commercial Mortgage-Backed Loan is collateralized by certain real properties of our OSH wholly-owned subsidiary with
a total carrying value of approximately $173 million as of January 31, 2009. The term of the loan may be extended for up to
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