Sears 2009 Annual Report Download - page 67

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
The fair value of long-term debt was $1.4 billion at both January 30, 2010 and January 31, 2009. The fair
value of our debt was estimated based on quoted market prices for the same or similar issues or on current rates
offered to us for debt of the same remaining maturities.
As of January 30, 2010, long-term debt maturities for the next five years and thereafter were as follows:
millions
2010 .............................................................. $ 482
2011 .............................................................. 490
2012 .............................................................. 228
2013 .............................................................. 68
2014 .............................................................. 219
Thereafter .......................................................... 693
$2,180
Interest
Interest expense for fiscal years 2009, 2008, and 2007 was as follows:
millions 2009 2008 2007
COMPONENTS OF INTEREST EXPENSE
Interest expense ................................................. $219 $243 $253
Accretion of obligations at net present value .......................... 22 24 26
Amortization of debt issuance costs ................................. 24 5 7
Interest expense ................................................. $265 $272 $286
Debt Repurchase Authorization
In fiscal 2005, our Finance Committee of the Board of Directors authorized the repurchase, subject to
market conditions and other factors, of up to $500 million of our outstanding indebtedness in open market or
privately negotiated transactions. Our wholly owned finance subsidiary, Sears Roebuck Acceptance Corp.
(“SRAC”), has repurchased $215 million of its outstanding notes, including $6 million repurchased during fiscal
2009, $49 million repurchased during fiscal 2008 and $2 million repurchased during fiscal 2007, thereby
reducing the unused balance of this authorization to $285 million. We recognized a gain of $13 million on the
repurchases made during fiscal 2008.
Credit Agreement
During the second quarter of 2009, we extended the maturity date of our credit agreement (“Original Credit
Agreement”) by entering into an amended credit agreement (the “Amended Credit Agreement”) which has an
expiration date of June 22, 2012. The Amended Credit Agreement is an asset based revolving credit facility
under which SRAC and Kmart Corporation are the borrowers. Our Original Credit Agreement, which was to
expire on March 24, 2010, provided $4.0 billion of borrowing capacity, however only approximately $3.8 billion
had been available since September 2008 when an affiliate of Lehman Brothers notified us it would no longer
fund its proportionate share of commitments under the Original Agreement. Also during the second quarter of
fiscal 2009, we agreed, for a fee, to allow one of the lenders in our Amended Credit Agreement to exit its
commitment, which decreased our total borrowing capacity by $65 million. As a result of the amendment and
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