Sears 2011 Annual Report Download - page 95

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
Store closing cost accruals of $256 million and $79 million at January 28, 2012 and January 29, 2011,
respectively, were as follows:
millions Markdowns
Severance
Costs
Lease
Termination
Costs
Other
Charges Total
Balance at January 30, 2010 ......................... $ 17 $ 3 $74 $ 3 $ 97
Store closing costs ................................ 12 3 6 5 26
Payments/utilizations .............................. (22) (4) (12) (6) (44)
Balance at January 29, 2011 ......................... 7 2 68 2 79
Store closing costs ................................ 130 73 5 46 254
Payments/utilizations .............................. (40) (16) (9) (12) (77)
Balance at January 28, 2012 ......................... $ 97 $59 $64 $36 $256
Goodwill
See Note 12 for further information regarding our goodwill impairment charges recorded in 2011.
Long-Lived Assets
In accordance with accounting standards governing the impairment or disposal of long-lived assets, we
performed an impairment test of certain of our long-lived assets (principally the value of buildings and other
fixed assets associated with our stores) due to events and changes in circumstances during 2011 that indicated an
impairment might have occurred. The impairment review was triggered by the non-cash charges related to
impairment of goodwill balances and establishing a valuation allowance against certain deferred income tax
assets as well as a decline in operating performance at certain locations. As a result of this impairment testing,
the Company recorded a $16 million impairment charge during 2011. This impairment charge was made up of a
$10 million charge at Kmart and a $6 million charge at Sears Domestic.
NOTE 14—LEASES
We lease certain stores, office facilities, warehouses, computers and transportation equipment.
Operating and capital lease obligations are based upon contractual minimum rents and, for certain stores,
amounts in excess of these minimum rents are payable based upon specified percentages of sales. Contingent rent
is accrued over the lease term, provided that the achievement of the specified sales level that triggers the
contingent rental is probable. Certain leases include renewal or purchase options.
Rental expense for operating leases was as follows:
millions 2011 2010 2009
Minimum rentals ................................................ $837 $844 $865
Percentage rentals ............................................... 19 21 22
Less—Sublease rentals ........................................... (30) (52) (51)
Total ......................................................... $826 $813 $836
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