Sears 2013 Annual Report Download - page 47

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borrowings of $238 million, which were partially offset by Sears Canada dividends paid to noncontrolling interests
of $233 million. On October 2, 2013, the Company completed a new senior secured term loan facility of $1.0 billion
under the Company's existing Second Amended and Restated Credit agreement. The proceeds from the new term
loan facility were used to pay down existing revolver borrowings. During 2013, Sears Canada declared a cash
dividend of $5 Canadian per common share, or approximately $509 million Canadian ($476 million U.S.), which
was paid on December 6, 2013. Accordingly, the minority shareholders in Sears Canada received dividends of $233
million. For further information, see Note 2 of Notes to Consolidated Financial Statements.
During 2012, the Company reported net cash used in financing activities from continuing operations of $27
million which included gross cash proceeds of $446.5 million as a result of the separation of SHO, which consisted
of $346.5 million in cash proceeds received for the sale of SHO common shares and $100 million received through a
dividend from SHO prior to the separation. The proceeds received were used to fund repayments on our domestic
revolving credit facility. Repayments of long-term debt in 2012 were $335 million in 2012.
During 2011, the Company generated net cash from financing activities from continuing operations of $47
million, which reflects an increase in debt to fund operations, and common share repurchase activity. Repayments of
long-term debt were $611 million in 2011, and were offset by an increase of $815 million in total short-term
borrowings and proceeds of $104 million from Sears Canada's credit facility,
During 2013 and 2012, we did not repurchase any of our common shares under our share repurchase program.
We repurchased $183 million of our common stock pursuant to our common share repurchase program in 2011. The
common share repurchase program was initially announced in 2005 and had a total authorization since inception of
the program of $6.5 billion. At February 1, 2014, we had approximately $504 million of remaining authorization
under the program. The common share repurchase program has no stated expiration date and share repurchases may
be implemented using a variety of methods, which may include open market purchases, privately negotiated
transactions, block trades, accelerated share repurchase transactions, the purchase of call options, the sale of put
options or otherwise, or by any combination of such methods.
Uses and Source of Liquidity
Our primary need for liquidity is to fund working capital requirements of our businesses, capital expenditures
and for general corporate purposes, including debt repayment and pension plan contributions. We consider ourselves
to be an asset-rich enterprise with substantial liquidity and financial flexibility benefiting from multiple funding
resources such as our $3.275 billion domestic revolving credit facility through April 2016, an $800 million Canadian
revolving credit facility through September 2015, which is subject to potential reserves. Our $1.24 billion of senior
secured notes are due in 2018. In addition, as discussed in Note 3 of the Notes to Consolidated Financial Statements,
the Company completed a new senior secured term loan facility $1.0 billion under the Company's existing Second
Amended and Restated Credit agreement in the third quarter of 2013. Further, there is approximately $327 million
of remaining Sears debt from the Merger. These funding resources and obligations are described in more detail
below. In addition, at February 1, 2014, we had cash balances of $1.0 billion and $4.5 billion of inventory, net of
payables.
The domestic revolving credit facility and senior secured notes are firmly in place and are supported by an
asset base which includes $6.4 billion of domestic inventory, owned and leased real estate assets, market leading
proprietary brands such as Kenmore, Craftsman and DieHard, and well-established stand-alone businesses such as
Lands' End and Sears Canada. This asset base provides us flexibility as we continue to transform our business.
During 2013, we demonstrated our ability to monetize assets as we redeploy our capital in support of our
transformation to a member-centric model leveraging our Integrated Retail and Shop Your Way platforms. More
specifically, we generated approximately $2.0 billion of liquidity in 2013 as compared to our previously stated
objective of $500 million announced in November 2012, through the following actions:
• completed a new senior secured term loan facility of $1.0 billion under the Company's existing
Second Amended and Restated Credit Agreement;
• Sears Canada's termination of its leases with respect to five stores for a total consideration of
approximately $0.4 billion;