Sears 2012 Annual Report Download - page 12

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12
Our pension and postretirement benefit plan obligations are currently underfunded, and we may have to
make significant cash payments to some or all of these plans, which would reduce the cash available for our
businesses.
We have unfunded obligations under our domestic and foreign pension and postretirement benefit plans. The
funded status of our pension plans is dependent upon many factors, including returns on invested assets, the level of
certain market interest rates and the discount rate used to determine pension obligations. Unfavorable returns on the
plan assets or unfavorable changes in applicable laws or regulations could materially change the timing and amount
of required plan funding, which would reduce the cash available for our businesses. In addition, a decrease in the
discount rate used to determine pension obligations could result in an increase in the valuation of pension
obligations, which could affect the reported funding status of our pension plans and future contributions, as well as
the periodic pension cost in subsequent years. Moreover, unfavorable regulatory action could materially change the
timing and amount of required plan funding and negatively impact our business operations and impair our business
strategy.
Item 1B. Unresolved Staff Comments
Not applicable.