Sears 2014 Annual Report Download - page 45

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Impairment Charges
We recorded impairment charges of $13 million in 2013 related to long-lived assets and $295 million in 2012
related to goodwill. Impairment charges recorded are further described in Notes 12 and 13 of Notes to Consolidated
Financial Statements.
Gain on Sales of Assets
We recorded total gains on sales of assets of $538 million in 2013 and $170 million in 2012. During 2013, we
recorded gains on sales of assets of $357 million recognized on the surrender and early termination of the leases of
five properties operated by Sears Canada, for which Sears Canada received $381 million ($400 million Canadian) in
cash proceeds, and $180 million recognized on the amendment and early termination of the leases on two properties
operated by Sears Canada for which Sears Canada received $184 million ($191 million Canadian) in cash proceeds.
During 2012, we recorded a gain of $163 million recognized on the surrender and early termination of the
leases on three properties under an agreement with The Cadillac Fairview Corporation Limited for which Sears
Canada received $171 million ($170 million Canadian) in cash proceeds.
Operating Income (Loss)
Sears Canada recorded operating income of $364 million and an operating loss of $187 million in 2013 and
2012, respectively. Operating income in 2013 included expenses related to store closings, severance and impairment
charges, as well as gains on sales of assets which aggregated to operating income of $452 million. Operating loss in
2012 included expenses related to store closings, severance and pension settlements, transaction costs associated
with strategic initiatives and goodwill impairment charges, as well as a gain on sales of assets which aggregated to
an operating loss of $158 million. Excluding these items, Sears Canada would have recorded an operating loss of
$88 million in 2013 compared to an operating loss of $29 million in 2012. Operating loss increased in 2013 due to
the decline in margin, partially offset by a decline in selling and administrative expenses.
ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION
Cash Balances
Our cash and cash equivalents include all highly liquid investments with original maturities of three months or
less at the date of purchase. Our cash balances as of January 31, 2015 and February 1, 2014 are detailed in the
following table.
millions January 31,
2015 February 1, 2014
Domestic
Cash and equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 143 $ 428
Cash posted as collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 18
Credit card deposits in transit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 131
Total domestic cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 577
Sears Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 451
Total cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 1,028
Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 10
Total cash balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 250 $ 1,038
We had total cash balances of $250 million at January 31, 2015 and domestic cash of $577 million at
February 1, 2014. During 2014, the Company received a $500 million dividend from Lands' End immediately prior
to the completion of the spin-off, $400 million from the secured short-term loan, $380 million in connection with the
Sears Canada rights offering, $625 million in connection with the Senior Unsecured Notes and $358 million of
proceeds from domestic real estate transactions. These proceeds were offset by increased operating losses. Other