Sears 2014 Annual Report Download - page 47

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activities included cash proceeds from the sales of properties of $532 million and $37 million from changes in
investments and restricted cash, which were partially offset by cash used for capital expenditures of $378 million.
We spent $270 million, $329 million and $378 million during 2014, 2013 and 2012, respectively, for capital
expenditures. Capital expenditures during all three years primarily included investments in online and mobile
shopping capabilities, enhancements to the Shop Your Way® platform, information technology infrastructure and
store maintenance.
We anticipate 2015 capital expenditure levels to be similar to 2014 domestic levels. It should be noted that in
the normal course of business, we consider opportunities to purchase leased operating properties, as well as offers to
sell owned, or assign leased, operating and non-operating properties. These transactions may, individually or in the
aggregate, result in material proceeds or outlays of cash and cause our capital expenditure levels to vary from period
to period. In addition, we review leases that will expire in the short term in order to determine the appropriate action
to take with respect to them.
Financing Activities
During 2014, the Company generated net cash from financing activities of $285 million, which primarily
consisted of Lands' End pre-separation funding of $515 million and proceeds from debt issuances of $1.0 billion,
consisting of $400 million from the secured short-term loan entered into in September 2014, and $625 million from
the 8% senior unsecured notes due 2019 issued in November 2014. For further information, see Note 3 of Notes to
Consolidated Financial Statements. The cash generated from financing activities were primarily used to pay down
existing revolver borrowings.
During 2013, the Company generated net cash from financing activities of $902 million, primarily due to
proceeds from debt issuances of $994 million, as well as an increase in short-term 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.
During 2014, 2013 and 2012, we did not repurchase any of our common shares under our share repurchase
program. 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 January 31, 2015, 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 have incurred
losses and experienced negative operating cash flows for the past several years, accordingly the Company has taken
a number of actions to enhance its financial flexibility and fund its continued transformation, support its operations
and meet its obligations. During 2014, the Company raised approximately $2.3 billion in cash, which included the
$500 million dividend the Company received in connection with the Lands' End separation, $400 million from the
secured short-term loan, $380 million from the Sears Canada rights offering, $625 million from the rights offering