Sears 2011 Annual Report Download - page 4

• Our Appliance Builder/Distributor business offers premium appliance and plumbing fixtures
to architects, designers, and new construction or remodeling customers, and is currently
operating in 6 markets with 20 facilities.
• Home Services—Product Repair Services, the nation’s largest product repair service provider, is a key
element in our active relationship with more than 48 million households. With over 8,800 service
technicians making over 15 million service and installation calls annually, this business delivers a
broad range of retail-related residential and commercial services across all 50 states, Puerto Rico,
Guam and the Virgin Islands under either the Sears Parts & Repair Services or A&E Factory Service
brand names. Commercial and residential customers can obtain parts and repair services for all major
brands of products within the appliances, lawn and garden equipment, consumer electronics, floor care
products, and heating and cooling systems categories. We also provide repair parts with supporting
instructions for “do-it-yourself” customers through our searspartsdirect.com website. Smaller items for
repair can be brought into Sears Parts & Repair Centers located throughout the United States or into
many Sears Full-line, hometown and hardware stores. This business also offers protection agreements,
product installation services and Kenmore and Carrier brand residential heating and cooling systems.
Home Services also includes home improvement services (primarily siding, windows, cabinet refacing,
kitchen remodeling, roofing, carpet and upholstery cleaning, air duct cleaning, and garage door
installation and repair) provided through Sears Home Improvement Services.
Sears Canada
Sears Canada, a consolidated, 95%-owned subsidiary of Sears, conducts retail operations in Canada similar
to those conducted by Sears Domestic, with a greater emphasis on apparel and other softlines than in the U.S.
stores.
At January 28, 2012, Sears Canada operated a total of 122 full-line stores, 378 specialty stores (including 48
furniture and appliance stores, 285 dealer stores operated under independent local ownership, 4 appliance and
mattress stores, 30 Corbeil stores, and 11 outlet stores), 17 floor covering stores, 1,734 catalog pick-up locations
and 108 travel offices. Sears Canada also sells its products through its sears.ca website.
Spin-Off of Orchard Supply Hardware Stores Corporation
On December 30, 2011, we completed the spin-off to our shareholders of all of the capital stock of Orchard
Supply Hardware Stores Corporation (“Orchard”) that was owned by Holdings immediately prior to the spin-off,
consisting of common stock that represented approximately 80% of the voting power of Orchard’s outstanding
capital stock and preferred stock that represented 100% of Orchard’s outstanding nonvoting capital stock. We
expect that the spin-off will be tax-free to Holdings’ shareholders for U.S. federal income tax purposes, except
for any cash received in lieu of shares. In connection with the spin-off, Holdings and certain of its subsidiaries
entered into various agreements with Orchard, including a distribution agreement, a transition services
agreement, an appliance sale and consignment agreement and brand license agreements. In addition, certain tax
matters between Holdings and Orchard are governed by a tax sharing agreement entered into in 2005.
Acquisition of Noncontrolling Interest in Sears Canada
During 2010 and 2009, we acquired approximately 19 million and 0.5 million, respectively, of Sears
Canada’s common shares in open market transactions. We paid a total of $560 million and $7 million,
respectively, for the additional shares and accounted for the acquisitions of additional interest in Sears Canada as
an equity transaction in accordance with accounting standards on noncontrolling interests. Accordingly, we
reclassified an accumulated other comprehensive loss from noncontrolling interest to controlling interest in the
Consolidated Statement of Equity.
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