Sears 2011 Annual Report Download - page 97

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
Sears Holdings, through its subsidiaries, engages in commercial transactions with AutoZone, Inc.
(“AutoZone”) in the ordinary course of business. In 2011, we paid AutoZone and its controlled affiliates
approximately $26 million for automotive parts and accessories and $0.6 million for subscription-based auto
repair information. ESL owns 9.7% of the outstanding common stock of AutoZone (based on publicly available
data as of January 23, 2012).
During 2011, ESL and its affiliates purchased unsecured commercial paper issued by Sears Roebuck
Acceptance Corp. (“SRAC”), an indirect wholly owned subsidiary of Sears Holdings. For the commercial paper
outstanding to ESL, the weighted average of each of maturity, annual interest rate, and principal amount
outstanding for this commercial paper in 2011 was 29.2 days, 1.51% and $230 million, respectively. The largest
aggregate amount of principal outstanding to ESL at any time since the beginning of 2011 was $270 million and
the aggregate amount of interest paid by SRAC to ESL during 2011 was $2.6 million. As of January 28, 2012,
ESL held $250 million in principal amount of commercial paper, which includes $130 million held by
Mr. Lampert. The commercial paper purchases were made in the ordinary course of business on substantially the
same terms, including interest rates, as terms prevailing for comparable transactions with other persons, and did
not present features unfavorable to the Company.
In 2011, the Audit Committee approved the purchase from third parties from time to time by Mr. Lampert
and ESL of the Company’s 6 5/8% Senior Secured Notes due 2018 (the “6 5/8% Notes”) and unsecured notes
issued by SRAC and another indirect wholly owned subsidiary of Sears Holdings, Sears DC Corp. (the
“Subsidiary Notes”). In 2011, Mr. Lampert and ESL purchased an aggregate of $95 million of principal amount
of 6 5/8% Notes and $10 million of principal amount of Subsidiary Notes.
On January 26, 2012, ESL entered into an agreement with a financial institution to acquire from the
financial institution an undivided participating interest in a certain percentage of its rights and obligations under
trade receivable put agreements that were entered into with certain vendors of the Company. These agreements
generally provide that, in the event of a bankruptcy filing by the Company, the financial institution will purchase
such vendors’ accounts receivable arising from the sale of goods or services to the Company. ESL may from time
to time choose to purchase an 80% undivided participating interest in the rights and obligations arising under
future trade receivable put agreements that the financial institution enters into with our vendors during the term
of its agreement. The Company is neither a party nor will become a party to any of these agreements. As of
January 28, 2012, ESL held a participation interest totaling $93.3 million in the financial institution’s agreements
relating to the Company.
The Company employs certain employees of ESL. William R. Harker, a Senior Vice President of the
Company, serves as Executive Vice President and General Counsel of ESL and our Senior Vice President of Real
Estate is employed by ESL.
NOTE 16—SUPPLEMENTAL FINANCIAL INFORMATION
Other long-term liabilities at January 28, 2012 and January 29, 2011 consisted of the following:
millions
January 28,
2012
January 29,
2011
Unearned revenues ............................................. $ 778 $ 794
Self-insurance reserves .......................................... 743 753
Other ........................................................ 665 660
Total .................................................... $2,186 $2,207
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