Sears 2011 Annual Report Download - page 96

Download and view the complete annual report

Please find page 96 of the 2011 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 122

  • 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
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
Minimum lease obligations, excluding taxes, insurance and other expenses payable directly by us, for leases
in effect at January 28, 2012, were as follows:
Minimum
Lease
Commitments
millions Capital Operating
At January 28, 2012
2012 ............................................................. $112 $ 773
2013 ............................................................. 104 675
2014 ............................................................. 96 558
2015 ............................................................. 85 470
2016 ............................................................. 66 366
Later years ........................................................ 255 1,977
Total minimum lease payments(1) ...................................... 718 4,819
Less—minimum sublease income ..................................... (90)
Net minimum lease payments ......................................... $4,729
Less:
Estimated executory costs ........................................ (77)
Interest at a weighted average rate of 8.1% .......................... (186)
Capital lease obligations ............................................. 455
Less current portion of capital lease obligations ........................... (60)
Long-term capital lease obligations .................................... $395
(1) Sears Canada: Total operating minimum lease payments of $386 million.
NOTE 15—RELATED PARTY DISCLOSURE
Our Board has delegated authority to direct investment of our surplus cash to Edward S. Lampert, subject to
various limitations that have been or may be from time to time adopted by the Board of Directors and/or the
Finance Committee of the Board of Directors. Mr. Lampert is Chairman of our Board of Directors and its
Finance Committee and is the Chairman and Chief Executive Officer of ESL Investments, Inc. (together with its
affiliated funds, “ESL”). Neither Mr. Lampert nor ESL will receive compensation for any such investment
activities undertaken on our behalf. ESL beneficially owned approximately 62% of our outstanding common
stock as of January 28, 2012.
Further, to clarify the expectations that the Board of Directors has with respect to the investment of our
surplus cash, the Board has renounced, in accordance with Delaware law, any interest or expectancy of the
Company associated with any investment opportunities in securities that may come to the attention of
Mr. Lampert or any employee, officer, director or advisor to ESL and its affiliated investment entities (each, a
“Covered Party”) who also serves as an officer or director of the Company other than (a) investment
opportunities that come to such Covered Party’s attention directly and exclusively in such Covered Party’s
capacity as a director, officer or employee of the Company, (b) control investments in companies in the mass
merchandising, retailing, commercial appliance distribution, product protection agreements, residential and
commercial product installation and repair services and automotive repair and maintenance industries and
(c) investment opportunities in companies or assets with a significant role in our retailing business, including
investment in real estate currently leased by the Company or in suppliers for which the Company is a substantial
customer representing over 10% of such companies’ revenues, but excluding investments of ESL that were
existing as of as of May 23, 2005.
96