Sears 2012 Annual Report Download - page 98

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
98
NOTE 13—STORE CLOSING CHARGES, SEVERANCE COSTS AND IMPAIRMENTS
Store Closings and Severance
We made the decision to close 48, 74 and 11 stores in our Kmart segment, and 12, 173 and 15 stores in our
Sears Domestic segment during 2012, 2011 and 2010, respectively, and changed the format of 22 Essentials/Grands
stores in our Sears Domestic segment during 2011. Store closing costs recorded during 2012, 2011 and 2010 were as
follows:
millions Markdowns(1) Severance
Costs(2)
Lease
Termination
Costs(2) Other
Charges(2)
Impairment
and
Accelerated
Depreciation(3)
Total
Store
Closing
Costs
Kmart . . . . . . . . . . . . . . . . . . . . . $ 21 $ 13 $ 34 $ 8 $ 9 $ 85
Sears Domestic . . . . . . . . . . . . . . 14 2 34 (6) 13 57
Sears Canada. . . . . . . . . . . . . . . . — 16 (1) 5 — 20
Total 2012 costs . . . . . . . . . . . . . $ 35 $ 31 $ 67 $ 7 $ 22 $ 162
Kmart . . . . . . . . . . . . . . . . . . . . . $ 46 $ 14 $ 1 $ 15 $ 5 $ 81
Sears Domestic . . . . . . . . . . . . . . 84 41 4 31 85 245
Sears Canada. . . . . . . . . . . . . . . . — 18 — — — 18
Total 2011 costs . . . . . . . . . . . . . $ 130 $ 73 $ 5 $ 46 $ 90 $ 344
Kmart . . . . . . . . . . . . . . . . . . . . . $ 6 $ 1 $ 4 $ 2 $ — $ 13
Sears Domestic . . . . . . . . . . . . . . 6 2 2 3 10 23
Total 2010 costs . . . . . . . . . . . . . $ 12 $ 3 $ 6 $ 5 $ 10 $ 36
_____________
(1) Recorded within Cost of sales, buying and occupancy on the Consolidated Statements of Operations.
(2) Recorded within Selling and administrative on the Consolidated Statements of Operations. Lease termination
costs are net of estimated sublease income, and include the reversal of closed store reserves for which the
lease agreement has been terminated and the reversal of deferred rent balances related to closed stores.
(3) 2011 costs include $82 million recorded within impairment charges and $8 million recorded within
Depreciation and amortization on the Consolidated Statements of Operations. 2012 and 2010 costs are
recorded within Depreciation and amortization on the Consolidated Statements of Operations.
In accordance with accounting standards governing costs associated with exit or disposal activities, expenses
related to future rent payments for which we no longer intend to receive any economic benefit are accrued for when
we cease to use the leased space and have been reduced for any income that we believe can be realized through sub-
leasing the leased space. We do not expect additional charges recorded during 2013 related to stores we made the
decision to close in 2012 to be material.