Sears 2013 Annual Report Download - page 48

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48
• Sears Canada's sale of its 50% joint venture interests in eight properties it owned with The Westcliff
Group of Companies for consideration of approximately $0.3 billion; and
• proceeds of approximately $0.3 billion generated for other real estate transactions completed
throughout the year.
We believe that we are executing on a clear plan to increase financial flexibility, further de-risk our balance
sheet and create shareholder value. We expect to continue with these types of activities during 2014. We currently
anticipate generating approximately $500 million from an exit dividend in connection with the previously
announced separation of Lands' End through a pro rata distribution to our shareholders, with the separation being
subject to certain conditions. We currently expect that the combination of (1) the Lands' End transaction, (2) our
continuing to work with the board and management of Sears Canada to increase the value of our investment, which
has a market value as of March 14, 2014 of about $760 million, and realize significant cash proceeds and (3) our
evaluation of opportunities with respect to a potential separation of our Sears Auto Centers when taken together will
result in cash proceeds to the Company in excess of $1.0 billion in 2014, which will help fund our transformation
and create value. We also continue to reduce unprofitable stores as leases expire and, in some cases, accelerate
closings when circumstances dictate.
Our outstanding borrowings at February 1, 2014 and February 2, 2013 were as follows:
millions February 1,
2014 February 2,
2013
Short-term borrowings:
Unsecured commercial paper. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $ 345
Secured borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,323 749
Long-term debt, including current portion:
Notes, term loan and debentures outstanding. . . . . . . . . . . . . . . . . . . . . . . . . 2,571 1,593
Capitalized lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346 433
Total borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,249 $ 3,120
We fund our peak sales season working capital needs through our domestic revolving credit facility and
commercial paper markets.
millions 2013 2012
Secured borrowings:
Maximum daily amount outstanding during the year . . . . . . . . . . . . . . . . . . $ 2,029 $ 1,862
Average amount outstanding during the year. . . . . . . . . . . . . . . . . . . . . . . . . 1,276 972
Amount outstanding at year-end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,323 749
Weighted average interest rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8% 2.9%
Unsecured commercial paper:
Maximum daily amount outstanding during the year . . . . . . . . . . . . . . . . . . $ 384 $ 377
Average amount outstanding during the year. . . . . . . . . . . . . . . . . . . . . . . . . 225 302
Amount outstanding at year-end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 345
Weighted average interest rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6% 2.2%
Domestic Credit Agreement
During the first quarter of 2011, Sears Roebuck Acceptance Corp. ("SRAC"), Kmart Corporation (together
with SRAC, the "Borrowers") and Holdings entered into an amended credit agreement (the “Domestic Credit
Agreement”). The Domestic Credit Agreement provides for a $3.275 billion asset-based revolving credit facility (the
"Revolving Facility") with a $1.5 billion letter of credit sub-limit. On October 2, 2013, Holdings and the Borrowers
entered into a First Amendment (the "Amendment") to the Domestic Credit Agreement with a syndicate of lenders.