Sears 2014 Annual Report Download - page 54

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54
Contractual Obligations and Off-Balance Sheet Arrangements
Information concerning our obligations and commitments to make future payments under contracts such as
debt and lease agreements, and under contingent commitments, is aggregated in the following tables.
Total
Payments Due by Period
Contractual Obligations Within 1
Year 1-3 Years 3-5 Years After 5
Years Other
millions
Operating leases . . . . . . . . . . . . . . . . . . . . . $ 2,985 $ 573 $ 858 $ 478 $ 1,076 $ —
Short-term debt. . . . . . . . . . . . . . . . . . . . . . 615 615 — — — —
Capital lease obligations. . . . . . . . . . . . . . . 372 88 128 59 97 —
Royalty license fees(1) . . . . . . . . . . . . . . . . . 84 53 26 5 — —
Purchase obligations. . . . . . . . . . . . . . . . . . 41 14 27 — — —
Pension funding obligations . . . . . . . . . . . . 1,648 279 569 477 323 —
Long-term debt including current portion
and interest . . . . . . . . . . . . . . . . . . . . . . 4,336 209 488 3,066 573 —
Liability and interest related to uncertain
tax positions(2) . . . . . . . . . . . . . . . . . . . . 180 — — — — 180
Total contractual obligations. . . . . . . . . . . . $ 10,261 $ 1,831 $ 2,096 $ 4,085 $ 2,069 $ 180
__________________
(1) We pay royalties under various merchandise license agreements, which are generally based on sales of
products covered under these agreements. We currently have license agreements for which we pay royalties,
including those to use American Greetings and Joe Boxer. Royalty license fees represent the minimum the
Company is obligated to pay, regardless of sales, as guaranteed royalties under these license agreements.
(2) At January 31, 2015, our uncertain tax position liability and gross interest payable were $131 million and $49
million, respectively. We are unable to reasonably estimate the timing of liabilities and interest payments
arising from uncertain tax positions in individual years due to the uncertainties in the timing of the effective
settlement of tax positions.
Other Commercial Commitments
We issue various types of guarantees in the normal course of business. We had the following guarantees
outstanding at January 31, 2015:
millions Bank
Issued SRAC
Issued Other Total
Standby letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 667 $ 18 $ — $ 685
Commercial letters of credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 104 — 104
Secondary lease obligations and performance guarantee. . . . . . . . . . . . . . . . . — — 128 128
The secondary lease obligations related to certain store leases that have been assigned and previously divested
Sears businesses. The secondary lease obligations represent the maximum potential amount of future payments,
including renewal option periods pursuant to the lease agreements. We remain secondarily liable if the primary
obligor defaults.