Sears 2011 Annual Report Download - page 5

At January 28, 2012, January 29, 2011, and January 30, 2010, Sears Holdings was the beneficial holder of
approximately 97 million, or 95%, 97 million, or 92% and 79 million or 73%, respectively, of the common
shares of Sears Canada.
Real Estate Transactions
In the normal course of business, we consider opportunities to purchase leased operating properties, as well
as offers to sell owned, or assign leased, operating and non-operating properties. These transactions may,
individually or in the aggregate, result in material proceeds or outlays of cash. In addition, we review leases that
will expire in the short term in order to determine the appropriate action to take with respect to them.
As noted on February 23, 2012, the Company entered into an agreement with General Growth Properties to
sell eleven properties (6 owned and 5 leased) for $270 million in net cash proceeds. We expect to close this
transaction in April 2012.
As noted on March 2, 2012, Sears Canada, a consolidated, 95%-owned subsidiary of Sears, entered into an
agreement with The Cadillac Fairview Corporation Limited to surrender and early terminate the leases on three
properties for $170 million Canadian in cash proceeds. The transaction is expected to close in April 2012.
Further information concerning our real estate transactions is contained in Notes 11 and 21 of Notes to
Consolidated Financial Statements.
Trademarks, Trade Names and Licenses
The KMART®and SEARS®trade names, service marks and trademarks, used by us both in the United
States and internationally, are material to our retail and other related businesses.
We sell proprietary branded merchandise under a number of brand names that are important to our
operations. Our KENMORE®, CRAFTSMAN®, DIEHARD®and LANDS’ END®brands are among the most
recognized proprietary brands in retailing. These marks are the subject of numerous United States and foreign
trademark registrations. Other well recognized Company trademarks and service marks include
APOSTROPHE®, CANYON RIVER BLUES®, COVINGTON®, BASIC EDITIONS®, SHOPYOURWAY®and
SMART SENSE™, which also are registered or are the subject of pending registration applications in the United
States. We have the right to sell an exclusive line of Jaclyn Smith®products through July 2014 (with an option to
extend for an additional three-year term, subject to certain conditions). We also have the right to sell an exclusive
line of Joe Boxer®products through December 2015 (with an option to extend for up to two additional five-year
terms, subject to certain conditions). Generally, our right to use our trade names and marks continues so long as
we use them.
Seasonality
The retail business is seasonal in nature, and we generate a high proportion of our revenues, operating
income and operating cash flows during the fourth quarter of our year, which includes the holiday season. As a
result, our overall profitability is heavily impacted by our fourth quarter operating results. Additionally, in
preparation for the fourth quarter holiday season, we significantly increase our merchandise inventory levels,
which are financed from operating cash flows, credit terms received from vendors and borrowings under our
amended credit agreement (described in the “Uses and Sources of Liquidity” section below). Fourth quarter
reported revenues accounted for 30% of total reported revenues in each of the years 2011, 2010 and 2009. See
Note 19 of Notes to Consolidated Financial Statements for further information on revenues earned by quarter in
2011 and 2010.
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