Sears 2012 Annual Report Download - page 70

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
70
Disclosures about Fair Value Measurements
In May 2011, the FASB issued an accounting standards update which amends the definition of fair value
measurement principles and disclosure requirements to eliminate differences between U.S. GAAP and International
Financial Reporting Standards. The update requires new quantitative and qualitative disclosures about the sensitivity
of recurring Level 3 measurement disclosures, as well as disclosures of transfers between Level 1 and Level 2 of the
fair value hierarchy. This update was effective and adopted by the Company in the first quarter of 2012 and
impacted the Company’s disclosures, but otherwise did not have a material impact on the Company’s condensed
consolidated financial position, results of operations or cash flows.
NOTE 2—SEARS CANADA
Sears Canada Share Repurchases
During the second quarter of 2011, Sears Canada renewed its Normal Course Issuer Bid with the Toronto
Stock Exchange that permits it to purchase for cancellation up to 5% of its issued and outstanding common shares,
representing approximately 5.3 million common shares. The purchase authorization expired on May 24, 2012. Prior
to the expiration, Sears Canada purchased and canceled approximately 0.9 million common shares for $10 million,
approximately 2.7 million common shares for $43 million and approximately 2.2 million common shares for $43
million during 2012, 2011 and 2010, respectively.
Sears Holdings Ownership of Sears Canada
At February 2, 2013 and January 28, 2012, Sears Holdings was the beneficial holder of approximately 52
million, or 51% and 97 million, or 95%, respectively, of the common shares of Sears Canada.
Partial Spin-Off
On November 13, 2012, we completed a partial spin-off (the “spin-off”) of our interest in Sears Canada. Prior
to the spin-off, Holdings beneficially owned approximately 96% of the issued and outstanding common shares of
Sears Canada. In connection with the spin-off, we distributed approximately 45 million common shares of Sears
Canada held by Holdings on a pro rata basis to holders of Holdings' common stock. Following the spin-off,
Holdings was the beneficial holder of approximately 51% of the issued and outstanding common shares of Sears
Canada, and as such, Holdings has maintained control of Sears Canada and will continue to consolidate the results
of Sears Canada. We accounted for the spin-off as an equity transaction in accordance with accounting standards
applicable to noncontrolling interests. Accordingly, we reclassified a portion of our ownership interest in Sears
Canada and accumulated other comprehensive loss to noncontrolling interest in the Consolidated Statement of
Equity for the period ended February 2, 2013.
Acquisition of Noncontrolling Interest
During the first quarter of 2010, we acquired approximately 19 million additional common shares of Sears
Canada. We paid a total of $560 million for the additional shares and accounted for the acquisition of additional
interest in Sears Canada as an equity transaction in accordance with accounting standards applicable to
noncontrolling interests. Accordingly, we reclassified an accumulated other comprehensive loss from noncontrolling
interest to controlling interest in the Consolidated Statement of Equity for the period ended January 29, 2011.
Dividends
On December 12, 2012, Sears Canada announced that its Board of Directors declared a cash dividend of $1
Canadian per common share, or approximately $102 million Canadian ($102 million U.S.) which was paid on
December 31, 2012 to shareholders of record at the close of business on December 24, 2012. Accordingly, the
Company received dividends of $52 million and minority shareholders in Sears Canada received dividends of $50
million during the fourth quarter of 2012.
On May 18, 2010, Sears Canada announced that its Board of Directors declared a cash dividend of $3.50
Canadian per common share, or approximately $377 million Canadian ($352 million U.S.), which was paid on