Sears 2009 Annual Report Download - page 37

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Operating Income
Sears Canada’s operating income decreased $33 million to $367 million in fiscal 2008. The decrease in
operating income includes a $6 million decline due to the negative impact of foreign currency exchange rates and
reflects the above noted decreases in sales, gross margin and selling and administrative expenses. In addition,
Sears Canada benefited from a $32 million gain on the sale of its Calgary downtown full-line store during fiscal
2008.
ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION
Cash Balances
Cash and cash equivalents include all highly liquid investments with original maturities of three months or
less at the date of purchase. Our cash and cash equivalents balances as of the fiscal years ended January 30, 2010
and January 31, 2009 are detailed in the following table.
millions
January 30,
2010
January 31,
2009
Domestic
Cash and equivalents ............................................ $ 221 $ 337
Cash posted as collateral ......................................... 9 14
Credit card deposits in transit ..................................... 168 159
Total domestic cash and cash equivalents ........................... 398 510
Sears Canada .................................................. 1,291 663
Total cash and cash equivalents ................................... 1,689 1,173
Restricted cash ................................................ 11 124
Total cash balances ............................................. $1,700 $1,297
We had total cash balances of $1.7 billion at January 30, 2010 and $1.3 billion at January 31, 2009. The
increase in cash and cash equivalents from January 31, 2009 primarily reflects an increase in net operating cash
flows generated during fiscal 2009 due to increased income and increased cash generated from working capital
balances. Primary uses of cash for fiscal 2009 included repayments of $452 million on total outstanding debt
balances, $424 million for share repurchases, capital expenditures of $361 million, and contributions to our
pension and post-retirement benefit plans of $209 million.
Our invested cash may include, from time to time, investments in, but not limited to, commercial paper,
U.S. federal, state and municipal government securities, floating-rate notes, repurchase agreements and money
market funds. Cash amounts held in these short-term investments are readily available to us and included
$1 million and $7 million as of fiscal year end 2009 and fiscal year end 2008, respectively, invested in support of
our wholly owned insurance subsidiary.
Credit card deposits in transit include deposits in-transit from banks for payments related to third-party
credit card and debit card transactions.
Restricted cash consists of cash related to Sears Canada’s cash balances, which have been pledged as
collateral for letters of credit obligations issued under its offshore merchandise purchasing program and with
counterparties related to outstanding derivative contracts, as well as funds held in trust in accordance with
regulatory requirements governing advance ticket sales related to Sears Canada’s travel business.
Our January 31, 2009 cash balance excluded $38 million on deposit with The Reserve Primary Fund, a
money market fund that temporarily suspended withdrawals while it liquidated its holdings to generate cash to
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