Sears 2012 Annual Report Download - page 78

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
78
NOTE 6—INTEREST AND INVESTMENT INCOME
The following table sets forth the components of interest and investment income as reported in our
Consolidated Statements of Operations:
millions 2012 2011 2010
Interest income on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7 $ 4 $ 4
Other investment income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 37 32
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 94 $ 41 $ 36
Interest Income on Cash and Cash Equivalents
We recorded interest income of $7 million in 2012, $4 million in 2011, and $4 million in 2010, primarily
related to interest earned on cash and cash equivalents. These cash and cash equivalents consist of highly liquid
investments with original maturities of three months or less at the date of purchase. Our invested cash may include,
from time to time, investments in, but not limited to, commercial paper, federal, state and municipal government
securities, floating-rate notes, repurchase agreements and money market funds. All invested cash amounts are
readily available to us.
Other Investment Income
Other investment income primarily includes income generated by (and sales of investments in) certain real
estate joint ventures and other equity investments in which we do not have a controlling interest. Investment income
from equity investments was $47 million, $27 million and $17 million in 2012, 2011 and 2010, respectively. During
2012, the investment income from equity investments included a gain of $25 million related to the sale of a real
estate joint venture held by Sears Canada. Other investment income also included a $30 million, $4 million and $6
million dividend received on our cost method investment in Sears Mexico for 2012, 2011 and 2010, respectively.
NOTE 7—BENEFIT PLANS
We sponsor a number of pension and postretirement benefit plans. Expenses for retirement and savings-related
benefit plans were as follows:
millions 2012 2011 2010
Retirement/401(k) Savings Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10 $ 11 $ 11
Pension plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630 78 119
Postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 24 27
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 664 $ 113 $ 157
Retirement Savings Plans
We sponsor Sears and Kmart 401(k) retirement savings plans for employees meeting service eligibility
requirements. The Company does not match employee contributions.
Other Benefit Plans
Certain domestic full-time and part-time employees of Sears are eligible to participate in noncontributory
defined benefit plans after meeting age and service requirements. Effective January 1, 2006, the Sears domestic
pension plan was frozen and domestic associates no longer earn additional benefits under the plan.
Substantially all full-time Canadian employees, as well as some part-time employees, are eligible to
participate in contributory defined benefit plans. Effective July 1, 2008, the Sears Canada defined pension plan was
amended and a defined contribution component was added. The defined benefit service accrual ceased and all plan