Sears 2010 Annual Report Download - page 70

Download and view the complete annual report

Please find page 70 of the 2010 Sears annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 112

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
Interest Income on Cash and Cash Equivalents
We recorded interest income of $4 million, $5 million, and $25 million for 2010, 2009 and 2008,
respectively, primarily related to interest earned on cash and cash equivalents. These cash and cash equivalents
consist of highly liquid investments with original maturities of three months or less at the date of purchase. 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.
All invested cash amounts are readily available to us.
Other Investment Income
Other investment income primarily includes income generated by (and sales of investments in) certain real
estate joint ventures and other equity investments in which we do not have a controlling interest. Investment
income from equity investments was $17 million, $11 million and $11 million in 2010, 2009 and 2008,
respectively. Other investment income also included a $6 million, $9 million and $10 million dividend received
on our cost method investment in Sears Mexico for 2010, 2009 and 2008, respectively.
NOTE 7—BENEFIT PLANS
We sponsor a number of pension and postretirement benefit plans. Expenses for retirement and savings-
related benefit plans were as follows:
millions 2010 2009 2008
Retirement/401(k) Savings Plans ................................... $ 11 $ 13 $ 97
Pension plans ................................................... 119 172 —
Postretirement benefits ........................................... 27 27 28
Total ......................................................... $157 $212 $125
Retirement Savings Plans
We sponsor Sears and Kmart 401(k) retirement savings plans for employees meeting service eligibility
requirements. Prior to 2009, we matched a portion of employee contributions made to the plans. The Company
announced during 2008 that it would suspend matching contributions on employee deferrals to 401(k) plans with
respect to eligible compensation earned for payroll periods that end after January 30, 2009. Total expense related
to the Retirement Savings Plans was $84 million in 2008.
Effective July 1, 2008, the Sears Canada defined pension plan was amended and a defined contribution
component was added. The defined benefit service accrual ceased and all plan members earn pensionable service
under the defined contribution component of the Sears Registered Retirement Plan. The defined contribution
expense was $11 million during 2010 and $13 million during each of 2009 and 2008.
Domestic Benefit Plans
The Kmart tax-qualified defined benefit pension plan was merged with and into the Sears domestic pension
plan effective at January 30, 2008. The merged plan was renamed as the Sears Holdings Pension Plan (“SHC
domestic plan”) and Holdings accepted sponsorship of the SHC domestic plan effective at that date. The pension
plans were frozen, and associates no longer earn additional benefits under the plans.
Certain domestic full-time and part-time employees of Sears are eligible to participate in noncontributory
defined benefit plans after meeting age and service requirements. Substantially all full-time Canadian employees,
70