Sears 2015 Annual Report Download - page 44

For 2015, net cash flows from investing activities primarily consisted of cash proceeds from the sale of
properties and investments of $2.7 billion, partially offset by cash used for capital expenditures of $211 million.
Proceeds from the sales of properties and investments included approximately $2.6 billion of net proceeds from the
Seritage transaction. For 2014, net cash flows generated from investing activities primarily consisted of cash
proceeds from the sale of properties and investments of $424 million, partially offset by cash used for capital
expenditures of $270 million. Additionally, 2014 included proceeds from the Sears Canada rights offering of $380
million, partially offset by $207 million resulting from the de-consolidation of Sears Canada cash. For 2013, net
cash flows generated from investing activities included cash proceeds from the sales of properties and investments
of $995 million, which were partially offset by cash used for capital expenditures of $329 million.
We spent $211 million, $270 million and $329 million during 2015, 2014 and 2013, respectively, for capital
expenditures. Capital expenditures during 2014 and 2013 included expenditures by Sears Canada of $32 million and
$70 million, respectively. 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 2016 capital expenditure levels to be similar to 2015 levels. 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 2015, we used net cash flows in financing activities of $364 million, which consisted of debt
repayments of $1.4 billion, of which $927 million was the purchase of Senior Secured Notes pursuant to the tender
offer and $400 million was the repayment of the secured short-term loan, the payment of debt issuance costs of $50
million related to the amendment and extension of our Domestic Credit Facility and fees related to the tender offer
related to our Senior Secured Notes. These uses of cash were partially offset by an increase in short-term borrowings
of $583 million and $508 million of net cash proceeds from sale-leaseback financing, which consists of $426 million
of proceeds from the JV transactions received during the first quarter of 2015 and $82 million of proceeds from the
four joint venture properties that have continuing involvement received during the second quarter of 2015.
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 2015, 2014 and 2013, 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€30, 2016, 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
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