Sears 2014 Annual Report Download - page 42
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42
Depreciation and Amortization
Depreciation and amortization expense decreased $67 million in 2013 to $511 million and included charges of
$2 million and $13 million in 2013 and 2012, respectively, taken in connection with store closings. The decrease is
primarily attributable to having fewer assets available for depreciation.
Impairment Charges
Sears Domestic recorded impairment charges of $150 million and $25 million in 2013 and 2012, respectively,
related to the impairment of long-lived assets. Impairment charges recorded in both years are described further in
Notes 12 and 13 in Notes to Consolidated Financial Statements.
Gain on Sales of Assets
Sears Domestic recorded total gains on sales of assets of $63 million in 2013 and $261 million in 2012 which
were primarily attributable to several real estate transactions. The gain on sales of assets in 2013 included a gain of
$43 million related to the sale of a store previously operated under The Great Indoors format and two Sears Full-line
stores for which the Company received $74 million in proceeds. The gain on sales of assets in 2012 included a gain
of $223 million recognized on the sale of eleven (six owned and five leased) Sears Full-line store locations to
General Growth Properties for $270 million in cash proceeds. Gain on sales of assets recorded in 2012 also included
a gain of $22 million related to the sale of a store operated under The Great Indoors format and one Sears Full-line
store.
Operating Loss
Sears Domestic reported an operating loss of $940 million in 2013 compared to $656 million in 2012. Sears
Domestic’s operating loss in 2013 and 2012 included significant items which aggregated to operating expense of
$112 million and $296 million, respectively. Excluding these items, Sears Domestic would have reported an
operating loss of $828 million and $360 million in 2013 and 2012, respectively. The increase in operating loss in
2013 was driven by the above noted decline in sales and gross margin, partially offset by a decrease in selling and
administrative expenses.