Sears 2009 Annual Report Download - page 66

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
new standard). The acquisition of the additional interest in Sears Canada was not material to our financial
position. Our majority interest in Sears Canada remains at 73%.
During fiscal 2008, we increased our controlling 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.
NOTE 3—BORROWINGS
Total borrowings outstanding at January 30, 2010 and January 31, 2009 were $2.5 billion and $2.9 billion,
respectively. At January 30, 2010, total short-term borrowings were $325 million, consisting of $119 million of
secured borrowings and $206 million of unsecured commercial paper. 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. The weighted-average annual interest rate paid on short-term debt was 3.0% in fiscal 2009
and 3.5% in fiscal 2008.
Long-term debt is as follows:
ISSUE
January 30,
2010
January 31,
2009
millions
SEARS ROEBUCK ACCEPTANCE CORP.
6.25% to 7.50% Notes, due 2010 to 2043.................................. $ 823 $1,070
5.20% to 7.50% Medium-Term Notes, due 2010 to 2013 ..................... 83 106
SEARS DC CORP.
9.07% to 9.20% Medium-Term Notes, due 2012 ............................ 23 24
ORCHARD SUPPLY HARDWARE STORES CORPORATION
Commercial Mortgage-Backed Loan, variable interest rate above LIBOR, due
2010(1) ........................................................... 120 120
Senior Secured Term Loan, variable rate of interest above LIBOR, due 2013(2) .... 176 189
SEARS CANADA INC.
7.05% to 7.45% Medium-Term Notes, due 2010 ............................ 281 250
CAPITALIZED LEASE OBLIGATIONS ..................................... 635 664
OTHER NOTES AND MORTGAGES ....................................... 39 54
Total long-term borrowings ................................................ 2,180 2,477
Current maturities ........................................................ (482) (345)
Long-term debt and capitalized lease obligations ................................ $1,698 $2,132
Weighted-average annual interest rate on long-term debt ......................... 6.6% 6.9%
(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 $169 million as of January 30, 2010. The
Commercial Mortgage-Backed Loan had an interest rate of LIBOR plus 1.625% at January 30, 2010.
(2) The Senior Secured Term Loan is non-recourse to Holdings. The Senior Secured Term Loan is
collateralized by a priority interest in all non-real estate assets of OSH and a second lien on OSH’s
inventory, and requires quarterly repayments equal to 0.25% of the then outstanding principal balance. The
Senior Secured Term Loan had an interest rate of LIBOR plus 2.75% at January 30, 2010.
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