x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 29, 2016 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 20-1920798 |
(State of Incorporation) | (I.R.S. Employer Identification No.) |
3333 BEVERLY ROAD, HOFFMAN ESTATES, ILLINOIS | 60179 |
(Address of principal executive offices) | (Zip Code) |
Page | ||
PART I – FINANCIAL INFORMATION | ||
Item 1. | Financial Statements | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II – OTHER INFORMATION | ||
Item 1. | ||
Item 2. | ||
Item 6. |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions, except per share data | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
REVENUES | |||||||||||||||
Merchandise sales and services(1)(2) | $ | 5,029 | $ | 5,750 | $ | 16,086 | $ | 17,843 | |||||||
COSTS AND EXPENSES | |||||||||||||||
Cost of sales, buying and occupancy(1)(3) | 4,067 | 4,488 | 12,687 | 13,628 | |||||||||||
Selling and administrative | 1,543 | 1,630 | 4,530 | 5,005 | |||||||||||
Depreciation and amortization | 91 | 94 | 278 | 330 | |||||||||||
Impairment charges | 3 | 17 | 18 | 71 | |||||||||||
Gain on sales of assets | (51 | ) | (97 | ) | (166 | ) | (730 | ) | |||||||
Total costs and expenses | 5,653 | 6,132 | 17,347 | 18,304 | |||||||||||
Operating loss | (624 | ) | (382 | ) | (1,261 | ) | (461 | ) | |||||||
Interest expense | (105 | ) | (74 | ) | (289 | ) | (249 | ) | |||||||
Interest and investment income (loss) | (8 | ) | 17 | (25 | ) | (27 | ) | ||||||||
Loss before income taxes | (737 | ) | (439 | ) | (1,575 | ) | (737 | ) | |||||||
Income tax (expense) benefit | (11 | ) | (14 | ) | (39 | ) | 189 | ||||||||
Net loss | (748 | ) | (453 | ) | (1,614 | ) | (548 | ) | |||||||
Income attributable to noncontrolling interests | — | (1 | ) | — | (1 | ) | |||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (748 | ) | $ | (454 | ) | $ | (1,614 | ) | $ | (549 | ) | |||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | |||||||||||||||
Basic loss per share | $ | (6.99 | ) | $ | (4.26 | ) | $ | (15.10 | ) | $ | (5.15 | ) | |||
Diluted loss per share | $ | (6.99 | ) | $ | (4.26 | ) | $ | (15.10 | ) | $ | (5.15 | ) | |||
Basic weighted average common shares outstanding | 107.0 | 106.6 | 106.9 | 106.5 | |||||||||||
Diluted weighted average common shares outstanding | 107.0 | 106.6 | 106.9 | 106.5 |
(1) | Includes merchandise sales to Sears Hometown and Outlet Stores, Inc. ("SHO") of $271 million and $315 million for the 13 weeks ended October 29, 2016 and October 31, 2015, respectively, and $847 million and $1.0 billion for the 39 weeks ended October 29, 2016 and October 31, 2015, respectively. Pursuant to the terms of the separation, merchandise is sold to SHO at cost. |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Net loss | $ | (748 | ) | $ | (453 | ) | $ | (1,614 | ) | $ | (548 | ) | |||
Other comprehensive income | |||||||||||||||
Pension and postretirement adjustments, net of tax | 64 | 65 | 192 | 196 | |||||||||||
Total other comprehensive income | 64 | 65 | 192 | 196 | |||||||||||
Comprehensive loss | (684 | ) | (388 | ) | (1,422 | ) | (352 | ) | |||||||
Comprehensive loss attributable to noncontrolling interests | — | (1 | ) | — | (1 | ) | |||||||||
Comprehensive loss attributable to Holdings' shareholders | $ | (684 | ) | $ | (389 | ) | $ | (1,422 | ) | $ | (353 | ) |
millions | October 29, 2016 | October 31, 2015 | January 30, 2016 | ||||||||
ASSETS | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 258 | $ | 294 | $ | 238 | |||||
Accounts receivable(1) | 372 | 475 | 419 | ||||||||
Merchandise inventories | 5,032 | 6,208 | 5,172 | ||||||||
Prepaid expenses and other current assets(2) | 304 | 242 | 216 | ||||||||
Total current assets | 5,966 | 7,219 | 6,045 | ||||||||
Property and equipment (net of accumulated depreciation and amortization of $2,886, $2,925 and $2,960) | 2,392 | 2,668 | 2,631 | ||||||||
Goodwill | 269 | 269 | 269 | ||||||||
Trade names and other intangible assets | 1,904 | 2,090 | 1,909 | ||||||||
Other assets | 334 | 510 | 483 | ||||||||
TOTAL ASSETS | $ | 10,865 | $ | 12,756 | $ | 11,337 | |||||
LIABILITIES | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings(3) | $ | 618 | $ | 686 | $ | 797 | |||||
Current portion of long-term debt and capitalized lease obligations(4) | 594 | 71 | 71 | ||||||||
Merchandise payables | 1,556 | 2,295 | 1,574 | ||||||||
Other current liabilities(5) | 1,848 | 1,927 | 1,925 | ||||||||
Unearned revenues | 759 | 793 | 787 | ||||||||
Other taxes | 355 | 324 | 284 | ||||||||
Total current liabilities | 5,730 | 6,096 | 5,438 | ||||||||
Long-term debt and capitalized lease obligations(6) | 3,087 | 2,111 | 2,108 | ||||||||
Pension and postretirement benefits | 1,997 | 2,133 | 2,206 | ||||||||
Deferred gain on sale-leaseback | 656 | 775 | 753 | ||||||||
Sale-leaseback financing obligation | 164 | 164 | 164 | ||||||||
Other long-term liabilities | 1,716 | 1,811 | 1,731 | ||||||||
Long-term deferred tax liabilities | 890 | 959 | 893 | ||||||||
Total Liabilities | 14,240 | 14,049 | 13,293 | ||||||||
Commitments and contingencies | |||||||||||
DEFICIT | |||||||||||
Total Deficit | (3,375 | ) | (1,293 | ) | (1,956 | ) | |||||
TOTAL LIABILITIES AND DEFICIT | $ | 10,865 | $ | 12,756 | $ | 11,337 |
(1) | Includes $20 million, $85 million and $51 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively, of net amounts receivable from SHO, and $4 million of net amounts receivable from Lands' End at October 31, 2015. Also, includes $14 million, $8 million and $7 million of net amounts receivable from Seritage at October 29, 2016, October 31, 2015 and January 30, 2016, respectively. |
(6) | Includes balances held by related parties of $1.2 billion, $629 million and $603 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively, related to our Senior Secured Notes, Subsidiary Notes, Senior Unsecured Notes, Second Lien Term Loan and 2016 Term Loan. See Note 11 for further information. |
39 Weeks Ended | |||||||
millions | October 29, 2016 | October 31, 2015 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net loss | $ | (1,614 | ) | $ | (548 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Deferred tax valuation allowance | (37 | ) | (500 | ) | |||
Depreciation and amortization | 278 | 330 | |||||
Impairment charges | 18 | 71 | |||||
Gain on sales of assets | (166 | ) | (730 | ) | |||
Pension and postretirement plan contributions | (261 | ) | (246 | ) | |||
Mark-to-market adjustments of financial instruments | 22 | 33 | |||||
Amortization of deferred gain on sale-leaseback | (66 | ) | (30 | ) | |||
Change in operating assets and liabilities (net of acquisitions and dispositions): | |||||||
Deferred income taxes | 34 | 213 | |||||
Merchandise inventories | 140 | (1,265 | ) | ||||
Merchandise payables | (18 | ) | 674 | ||||
Income and other taxes | 97 | (40 | ) | ||||
Other operating assets | 3 | 7 | |||||
Other operating liabilities | 162 | (23 | ) | ||||
Net cash used in operating activities | (1,408 | ) | (2,054 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Proceeds from sales of property and investments(1) | 274 | 2,708 | |||||
Purchases of property and equipment | (115 | ) | (152 | ) | |||
Net cash provided by investing activities | 159 | 2,556 | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from debt issuances(2) | 1,528 | — | |||||
Repayments of debt(3) | (50 | ) | (1,387 | ) | |||
Increase (decrease) in short-term borrowings, primarily 90 days or less | (179 | ) | 471 | ||||
Proceeds from sale-leaseback financing(1) | — | 508 | |||||
Debt issuance costs | (30 | ) | (50 | ) | |||
Net cash provided by (used in) financing activities | 1,269 | (458 | ) | ||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 20 | 44 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 238 | 250 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 258 | $ | 294 | |||
Supplemental Cash Flow Data: | |||||||
Income taxes paid, net of refunds | $ | 18 | $ | 36 | |||
Cash interest paid(4) | 186 | 191 | |||||
Unpaid liability to acquire equipment and software | 15 | 11 |
Deficit Attributable to Holdings' Shareholders | |||||||||||||||||||||||
dollars and shares in millions | Number of Shares | Common Stock | Treasury Stock | Capital in Excess of Par Value | Retained Earnings (Deficit) | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total | |||||||||||||||
Balance at January 31, 2015 | 107 | $ | 1 | $ | (5,949 | ) | $ | 9,189 | $ | (2,162 | ) | $ | (2,030 | ) | $ | 6 | $ | (945 | ) | ||||
Comprehensive loss | |||||||||||||||||||||||
Net loss | — | — | — | — | (549 | ) | — | 1 | (548 | ) | |||||||||||||
Pension and postretirement adjustments, net of tax | — | — | — | — | — | 196 | — | 196 | |||||||||||||||
Total Comprehensive Loss | (352 | ) | |||||||||||||||||||||
Stock awards | — | — | 11 | (11 | ) | — | — | — | — | ||||||||||||||
Associate stock purchase | — | — | 4 | — | — | — | — | 4 | |||||||||||||||
Balance at October 31, 2015 | 107 | $ | 1 | $ | (5,934 | ) | $ | 9,178 | $ | (2,711 | ) | $ | (1,834 | ) | $ | 7 | $ | (1,293 | ) | ||||
Balance at January 30, 2016 | 107 | $ | 1 | $ | (5,928 | ) | $ | 9,173 | $ | (3,291 | ) | $ | (1,918 | ) | $ | 7 | $ | (1,956 | ) | ||||
Comprehensive loss | |||||||||||||||||||||||
Net loss | — | — | — | — | (1,614 | ) | — | — | (1,614 | ) | |||||||||||||
Pension and postretirement adjustments, net of tax | — | — | — | — | — | 192 | — | 192 | |||||||||||||||
Total Comprehensive Loss | (1,422 | ) | |||||||||||||||||||||
Stock awards | — | — | 19 | (20 | ) | — | — | — | (1 | ) | |||||||||||||
Associate stock purchase | — | — | 6 | — | — | — | 6 | ||||||||||||||||
Distribution to noncontrolling interest | — | — | — | — | — | — | (2 | ) | (2 | ) | |||||||||||||
Balance at October 29, 2016 | 107 | $ | 1 | $ | (5,903 | ) | $ | 9,153 | $ | (4,905 | ) | $ | (1,726 | ) | $ | 5 | $ | (3,375 | ) |
millions | October 29, 2016 | October 31, 2015 | January 30, 2016 | ||||||||
Short-term borrowings: | |||||||||||
Unsecured commercial paper | $ | 248 | $ | 9 | $ | — | |||||
Secured borrowings | 370 | 677 | 797 | ||||||||
Long-term debt, including current portion: | |||||||||||
Notes and debentures outstanding | 3,517 | 1,976 | 1,984 | ||||||||
Capitalized lease obligations | 164 | 206 | 195 | ||||||||
Total borrowings | $ | 4,299 | $ | 2,868 | $ | 2,976 |
millions | Markdowns(1) | Severance Costs(2) | Lease Termination Costs(2) | Other Charges(2) | Impairment and Accelerated Depreciation(3) | Total Store Closing Costs | |||||||||||||||||
Kmart | $ | 36 | $ | 5 | $ | 58 | $ | 8 | $ | 2 | $ | 109 | |||||||||||
Sears Domestic | 2 | 2 | 1 | 1 | — | 6 | |||||||||||||||||
Total for the 13 week period ended October 29, 2016 | $ | 38 | $ | 7 | $ | 59 | $ | 9 | $ | 2 | $ | 115 | |||||||||||
Kmart | $ | 5 | $ | — | $ | (5 | ) | $ | 1 | $ | — | $ | 1 | ||||||||||
Sears Domestic | 1 | — | (3 | ) | — | — | (2 | ) | |||||||||||||||
Total for the 13 week period ended October 31, 2015 | $ | 6 | $ | — | $ | (8 | ) | $ | 1 | $ | — | $ | (1 | ) | |||||||||
Kmart | $ | 90 | $ | 11 | $ | 39 | $ | 19 | $ | 6 | $ | 165 | |||||||||||
Sears Domestic | 12 | 4 | 3 | 4 | 1 | 24 | |||||||||||||||||
Total for the 39 week period ended October 29, 2016 | $ | 102 | $ | 15 | $ | 42 | $ | 23 | $ | 7 | $ | 189 | |||||||||||
Kmart | $ | 14 | $ | 2 | $ | 22 | $ | 4 | $ | — | $ | 42 | |||||||||||
Sears Domestic | 3 | 2 | (12 | ) | 1 | 2 | (4 | ) | |||||||||||||||
Total for the 39 week period ended October 31, 2015 | $ | 17 | $ | 4 | $ | 10 | $ | 5 | $ | 2 | $ | 38 |
(1) | Recorded within cost of sales, buying and occupancy on the Condensed Consolidated Statements of Operations. |
(2) | Recorded within selling and administrative on the Condensed Consolidated Statements of Operations. Lease termination costs are net of estimated sublease income, and include the reversal of closed store reserves for which the lease agreement has been terminated and the reversal of deferred rent balances related to closed stores. |
(3) | Costs for the 13- and 39- week periods ended October 29, 2016 and October 31, 2015 are recorded within depreciation and amortization on the Condensed Consolidated Statement of Operations. |
millions | Severance Costs | Lease Termination Costs | Other Charges | Total | |||||||||||
Balance at October 31, 2015 | $ | 28 | $ | 126 | $ | 4 | $ | 158 | |||||||
Store closing costs | 33 | (4 | ) | 6 | 35 | ||||||||||
Payments/utilizations | (3 | ) | (8 | ) | (2 | ) | (13 | ) | |||||||
Balance at January 30, 2016 | 58 | 114 | 8 | 180 | |||||||||||
Store closing costs | 15 | 42 | 23 | 80 | |||||||||||
Payments/utilizations | (36 | ) | (23 | ) | (23 | ) | (82 | ) | |||||||
Balance at October 29, 2016 | $ | 37 | $ | 133 | $ | 8 | $ | 178 |
13 Weeks Ended October 29, 2016 | 13 Weeks Ended October 31, 2015 | ||||||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | |||||||||||||||||
Straight-line rent expense | $ | 7 | $ | 37 | $ | 44 | $ | 9 | $ | 41 | $ | 50 | |||||||||||
Amortization of deferred gain on sale-leaseback | (4 | ) | (18 | ) | (22 | ) | (5 | ) | (18 | ) | (23 | ) | |||||||||||
Rent expense | $ | 3 | $ | 19 | $ | 22 | $ | 4 | $ | 23 | $ | 27 |
39 Weeks Ended October 29, 2016 | 39 Weeks Ended October 31, 2015 | ||||||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | |||||||||||||||||
Straight-line rent expense | $ | 24 | $ | 114 | $ | 138 | $ | 11 | $ | 62 | $ | 73 | |||||||||||
Amortization of deferred gain on sale-leaseback | (13 | ) | (53 | ) | (66 | ) | (6 | ) | (24 | ) | (30 | ) | |||||||||||
Rent expense | $ | 11 | $ | 61 | $ | 72 | $ | 5 | $ | 38 | $ | 43 |
2015 | |||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | ||||||||
Gain | $ | 154 | $ | 471 | $ | 625 | |||||
Loss | (17 | ) | (100 | ) | (117 | ) | |||||
Immediate Net Gain | $ | 137 | $ | 371 | $ | 508 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions, except earnings per share | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Basic weighted average shares | 107.0 | 106.6 | 106.9 | 106.5 | |||||||||||
Diluted weighted average shares | 107.0 | 106.6 | 106.9 | 106.5 | |||||||||||
Net loss attributable to Holdings' shareholders | $ | (748 | ) | $ | (454 | ) | $ | (1,614 | ) | $ | (549 | ) | |||
Loss per share attributable to Holdings' shareholders: | |||||||||||||||
Basic | $ | (6.99 | ) | $ | (4.26 | ) | $ | (15.10 | ) | $ | (5.15 | ) | |||
Diluted | $ | (6.99 | ) | $ | (4.26 | ) | $ | (15.10 | ) | $ | (5.15 | ) |
millions | October 29, 2016 | October 31, 2015 | January 30, 2016 | ||||||||
Pension and postretirement adjustments (net of tax of $(296) for all periods presented) | $ | (1,723 | ) | $ | (1,832 | ) | $ | (1,915 | ) | ||
Currency translation adjustments (net of tax of $0 for all periods presented) | (3 | ) | (2 | ) | (3 | ) | |||||
Accumulated other comprehensive loss | $ | (1,726 | ) | $ | (1,834 | ) | $ | (1,918 | ) |
13 Weeks Ended October 29, 2016 | 13 Weeks Ended October 31, 2015 | ||||||||||||||||||||||
millions | Before Tax Amount | Tax Expense | Net of Tax Amount | Before Tax Amount | Tax Expense | Net of Tax Amount | |||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Pension and postretirement adjustments(1) | $ | 64 | $ | — | $ | 64 | $ | 65 | $ | — | $ | 65 | |||||||||||
Total other comprehensive income | $ | 64 | $ | — | $ | 64 | $ | 65 | $ | — | $ | 65 |
39 Weeks Ended October 29, 2016 | 39 Weeks Ended October 31, 2015 | ||||||||||||||||||||||
millions | Before Tax Amount | Tax Expense | Net of Tax Amount | Before Tax Amount | Tax Expense | Net of Tax Amount | |||||||||||||||||
Other comprehensive income | |||||||||||||||||||||||
Pension and postretirement adjustments(1) | $ | 192 | $ | — | $ | 192 | $ | 196 | $ | — | $ | 196 | |||||||||||
Total other comprehensive income | $ | 192 | $ | — | $ | 192 | $ | 196 | $ | — | $ | 196 |
(1) | Included in the computation of net periodic benefit expense. See Note 5 to the Condensed Consolidated Financial Statements. |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Components of net periodic expense: | |||||||||||||||
Interest cost | $ | 58 | $ | 54 | $ | 174 | $ | 162 | |||||||
Expected return on plan assets | (51 | ) | (62 | ) | (152 | ) | (187 | ) | |||||||
Amortization of experience losses | 64 | 65 | 192 | 196 | |||||||||||
Net periodic expense | $ | 71 | $ | 57 | $ | 214 | $ | 171 |
(i) | Hardlines—consists of home appliances, consumer electronics, lawn & garden, tools & hardware, automotive parts, household goods, toys, housewares and sporting goods; |
(ii) | Apparel and Soft Home—includes women's, men's, kids', footwear, jewelry, accessories and soft home; |
(iii) | Food and Drug—consists of grocery & household, pharmacy and drugstore; |
(iv) | Service—includes repair, installation and automotive service and extended contract revenue; and |
(v) | Other—includes revenues earned in connection with our agreements with SHO and Lands' End, as well as credit revenues and licensed business revenues. |
13 Weeks Ended October 29, 2016 | |||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | ||||||||
Merchandise sales and services | |||||||||||
Hardlines | 496 | 1,651 | $ | 2,147 | |||||||
Apparel and Soft Home | 639 | 539 | 1,178 | ||||||||
Food and Drug | 735 | 1 | 736 | ||||||||
Service | 2 | 533 | 535 | ||||||||
Other | 16 | 417 | 433 | ||||||||
Total merchandise sales and services | 1,888 | 3,141 | 5,029 | ||||||||
Costs and expenses | |||||||||||
Cost of sales, buying and occupancy | 1,605 | 2,462 | 4,067 | ||||||||
Selling and administrative | 555 | 988 | 1,543 | ||||||||
Depreciation and amortization | 17 | 74 | 91 | ||||||||
Impairment charges | 3 | — | 3 | ||||||||
Gain on sales of assets | (30 | ) | (21 | ) | (51 | ) | |||||
Total costs and expenses | 2,150 | 3,503 | 5,653 | ||||||||
Operating loss | $ | (262 | ) | $ | (362 | ) | $ | (624 | ) | ||
Total assets | $ | 2,857 | $ | 8,008 | $ | 10,865 | |||||
Capital expenditures | $ | 11 | $ | 29 | $ | 40 |
13 Weeks Ended October 31, 2015 | |||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | ||||||||
Merchandise sales and services | |||||||||||
Hardlines | $ | 620 | $ | 1,832 | $ | 2,452 | |||||
Apparel and Soft Home | 701 | 639 | 1,340 | ||||||||
Food and Drug | 915 | 1 | 916 | ||||||||
Service | 3 | 538 | 541 | ||||||||
Other | 8 | 493 | 501 | ||||||||
Total merchandise sales and services | 2,247 | 3,503 | 5,750 | ||||||||
Costs and expenses | |||||||||||
Cost of sales, buying and occupancy | 1,774 | 2,714 | 4,488 | ||||||||
Selling and administrative | 585 | 1,045 | 1,630 | ||||||||
Depreciation and amortization | 17 | 77 | 94 | ||||||||
Impairment charges | 10 | 7 | 17 | ||||||||
Gain on sales of assets | (12 | ) | (85 | ) | (97 | ) | |||||
Total costs and expenses | 2,374 | 3,758 | 6,132 | ||||||||
Operating income | $ | (127 | ) | $ | (255 | ) | $ | (382 | ) | ||
Total assets | $ | 3,650 | $ | 9,106 | $ | 12,756 | |||||
Capital expenditures | $ | 10 | $ | 56 | $ | 66 |
39 Weeks Ended October 29, 2016 | |||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | ||||||||
Merchandise sales and services | |||||||||||
Hardlines | $ | 1,722 | $ | 5,228 | $ | 6,950 | |||||
Apparel and Soft Home | 2,127 | 1,681 | 3,808 | ||||||||
Food and Drug | 2,349 | 4 | 2,353 | ||||||||
Service | 7 | 1,610 | 1,617 | ||||||||
Other | 43 | 1,315 | 1,358 | ||||||||
Total merchandise sales and services | 6,248 | 9,838 | 16,086 | ||||||||
Costs and expenses | |||||||||||
Cost of sales, buying and occupancy | 5,100 | 7,587 | 12,687 | ||||||||
Selling and administrative | 1,597 | 2,933 | 4,530 | ||||||||
Depreciation and amortization | 51 | 227 | 278 | ||||||||
Impairment charges | 7 | 11 | 18 | ||||||||
Gain on sales of assets | (120 | ) | (46 | ) | (166 | ) | |||||
Total costs and expenses | 6,635 | 10,712 | 17,347 | ||||||||
Operating loss | $ | (387 | ) | $ | (874 | ) | $ | (1,261 | ) | ||
Total assets | $ | 2,857 | $ | 8,008 | $ | 10,865 | |||||
Capital expenditures | $ | 34 | $ | 81 | $ | 115 |
39 Weeks Ended October 31, 2015 | |||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | ||||||||
Merchandise sales and services | |||||||||||
Hardlines | $ | 1,986 | $ | 5,704 | $ | 7,690 | |||||
Apparel and Soft Home | 2,274 | 1,917 | 4,191 | ||||||||
Food and Drug | 2,749 | 5 | 2,754 | ||||||||
Service | 10 | 1,619 | 1,629 | ||||||||
Other | 43 | 1,536 | 1,579 | ||||||||
Total merchandise sales and services | 7,062 | 10,781 | 17,843 | ||||||||
Costs and expenses | |||||||||||
Cost of sales, buying and occupancy | 5,562 | 8,066 | 13,628 | ||||||||
Selling and administrative | 1,802 | 3,203 | 5,005 | ||||||||
Depreciation and amortization | 56 | 274 | 330 | ||||||||
Impairment charges | 12 | 59 | 71 | ||||||||
Gain on sales of assets | (173 | ) | (557 | ) | (730 | ) | |||||
Total costs and expenses | 7,259 | 11,045 | 18,304 | ||||||||
Operating loss | $ | (197 | ) | $ | (264 | ) | $ | (461 | ) | ||
Total assets | $ | 3,650 | $ | 9,106 | $ | 12,756 | |||||
Capital expenditures | $ | 21 | $ | 131 | $ | 152 |
millions | October 29, 2016 | October 31, 2015 | January 30, 2016 | ||||||||
Unearned revenues | $ | 669 | $ | 703 | $ | 694 | |||||
Self-insurance reserves | 574 | 604 | 567 | ||||||||
Other | 473 | 504 | 470 | ||||||||
Total | $ | 1,716 | $ | 1,811 | $ | 1,731 |
• | SHO obtains a significant amount of its merchandise from the Company. We have also entered into certain agreements with SHO to provide logistics, handling, warehouse and transportation services. SHO also pays a royalty related to the sale of Kenmore®, Craftsman® and DieHard® products and fees for participation in the Shop Your Way® program. |
• | SHO receives commissions from the Company for the sale of merchandise made through www.sears.com, extended service agreements, delivery and handling services and credit revenues. |
• | The Company provides SHO with shared corporate services. These services include accounting and finance, human resources and information technology. |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 226 | $ | 32 | $ | — | $ | 258 | |||||||||
Intercompany receivables | — | — | 27,564 | (27,564 | ) | — | |||||||||||||
Accounts receivable | — | 351 | 21 | — | 372 | ||||||||||||||
Merchandise inventories | — | 5,032 | — | — | 5,032 | ||||||||||||||
Prepaid expenses and other current assets | 114 | 505 | 246 | (561 | ) | 304 | |||||||||||||
Total current assets | 114 | 6,114 | 27,863 | (28,125 | ) | 5,966 | |||||||||||||
Total property and equipment, net | — | 1,638 | 754 | — | 2,392 | ||||||||||||||
Goodwill and intangible assets | — | 362 | 1,909 | (98 | ) | 2,173 | |||||||||||||
Other assets | — | 235 | 1,594 | (1,495 | ) | 334 | |||||||||||||
Investment in subsidiaries | 9,751 | 27,194 | — | (36,945 | ) | — | |||||||||||||
TOTAL ASSETS | $ | 9,865 | $ | 35,543 | $ | 32,120 | $ | (66,663 | ) | $ | 10,865 | ||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings | $ | — | $ | 618 | $ | — | $ | — | $ | 618 | |||||||||
Current portion of long-term debt and capitalized lease obligations | — | 594 | — | — | 594 | ||||||||||||||
Merchandise payables | — | 1,556 | — | — | 1,556 | ||||||||||||||
Intercompany payables | 12,431 | 15,133 | — | (27,564 | ) | — | |||||||||||||
Other current liabilities | 20 | 2,341 | 1,162 | (561 | ) | 2,962 | |||||||||||||
Total current liabilities | 12,451 | 20,242 | 1,162 | (28,125 | ) | 5,730 | |||||||||||||
Long-term debt and capitalized lease obligations | 718 | 3,770 | — | (1,401 | ) | 3,087 | |||||||||||||
Pension and postretirement benefits | — | 1,993 | 4 | — | 1,997 | ||||||||||||||
Deferred gain on sale-leaseback | — | 656 | — | — | 656 | ||||||||||||||
Sale-leaseback financing obligation | — | 164 | — | — | 164 | ||||||||||||||
Long-term deferred tax liabilities | 58 | 15 | 774 | 43 | 890 | ||||||||||||||
Other long-term liabilities | — | 826 | 1,107 | (217 | ) | 1,716 | |||||||||||||
Total Liabilities | 13,227 | 27,666 | 3,047 | (29,700 | ) | 14,240 | |||||||||||||
EQUITY (DEFICIT) | |||||||||||||||||||
Shareholder's equity (deficit) | (3,362 | ) | 7,877 | 29,073 | (36,968 | ) | (3,380 | ) | |||||||||||
Noncontrolling interest | — | — | — | 5 | 5 | ||||||||||||||
Total Equity (Deficit) | (3,362 | ) | 7,877 | 29,073 | (36,963 | ) | (3,375 | ) | |||||||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 9,865 | $ | 35,543 | $ | 32,120 | $ | (66,663 | ) | $ | 10,865 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 256 | $ | 38 | $ | — | $ | 294 | |||||||||
Intercompany receivables | — | — | 27,181 | (27,181 | ) | — | |||||||||||||
Accounts receivable | 9 | 441 | 25 | — | 475 | ||||||||||||||
Merchandise inventories | — | 6,208 | — | — | 6,208 | ||||||||||||||
Prepaid expenses and other current assets | 39 | 611 | 261 | (669 | ) | 242 | |||||||||||||
Total current assets | 48 | 7,516 | 27,505 | (27,850 | ) | 7,219 | |||||||||||||
Total property and equipment, net | — | 1,852 | 816 | — | 2,668 | ||||||||||||||
Goodwill and intangible assets | — | 270 | 2,089 | — | 2,359 | ||||||||||||||
Other assets | — | 268 | 2,129 | (1,887 | ) | 510 | |||||||||||||
Investment in subsidiaries | 11,328 | 25,701 | — | (37,029 | ) | — | |||||||||||||
TOTAL ASSETS | $ | 11,376 | $ | 35,607 | $ | 32,539 | $ | (66,766 | ) | $ | 12,756 | ||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings | $ | — | $ | 686 | $ | — | $ | — | $ | 686 | |||||||||
Current portion of long-term debt and capitalized lease obligations | — | 69 | 2 | — | 71 | ||||||||||||||
Merchandise payables | — | 2,295 | — | — | 2,295 | ||||||||||||||
Intercompany payables | 11,987 | 15,194 | — | (27,181 | ) | — | |||||||||||||
Other current liabilities | 28 | 2,215 | 1,470 | (669 | ) | 3,044 | |||||||||||||
Total current liabilities | 12,015 | 20,459 | 1,472 | (27,850 | ) | 6,096 | |||||||||||||
Long-term debt and capitalized lease obligations | 675 | 3,051 | 39 | (1,654 | ) | 2,111 | |||||||||||||
Pension and postretirement benefits | — | 2,128 | 5 | — | 2,133 | ||||||||||||||
Deferred gain on sale-leaseback | — | 775 | — | — | 775 | ||||||||||||||
Sale-leaseback financing obligation | — | 164 | — | — | 164 | ||||||||||||||
Long-term deferred tax liabilities | 59 | 2 | 968 | (70 | ) | 959 | |||||||||||||
Other long-term liabilities | — | 865 | 1,181 | (235 | ) | 1,811 | |||||||||||||
Total Liabilities | 12,749 | 27,444 | 3,665 | (29,809 | ) | 14,049 | |||||||||||||
EQUITY (DEFICIT) | |||||||||||||||||||
Shareholder's equity (deficit) | (1,373 | ) | 8,163 | 28,874 | (36,964 | ) | (1,300 | ) | |||||||||||
Noncontrolling interest | — | — | — | 7 | 7 | ||||||||||||||
Total Equity (Deficit) | (1,373 | ) | 8,163 | 28,874 | (36,957 | ) | (1,293 | ) | |||||||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 11,376 | $ | 35,607 | $ | 32,539 | $ | (66,766 | ) | $ | 12,756 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Current assets | |||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 200 | $ | 38 | $ | — | $ | 238 | |||||||||
Intercompany receivables | — | — | 26,935 | (26,935 | ) | — | |||||||||||||
Accounts receivable | 7 | 383 | 29 | — | 419 | ||||||||||||||
Merchandise inventories | — | 5,172 | — | — | 5,172 | ||||||||||||||
Prepaid expenses and other current assets | 114 | 453 | 257 | (608 | ) | 216 | |||||||||||||
Total current assets | 121 | 6,208 | 27,259 | (27,543 | ) | 6,045 | |||||||||||||
Total property and equipment, net | — | 1,829 | 802 | — | 2,631 | ||||||||||||||
Goodwill and intangible assets | — | 269 | 1,909 | — | 2,178 | ||||||||||||||
Other assets | — | 265 | 1,910 | (1,692 | ) | 483 | |||||||||||||
Investment in subsidiaries | 10,419 | 26,616 | — | (37,035 | ) | — | |||||||||||||
TOTAL ASSETS | $ | 10,540 | $ | 35,187 | $ | 31,880 | $ | (66,270 | ) | $ | 11,337 | ||||||||
Current liabilities | |||||||||||||||||||
Short-term borrowings | $ | — | $ | 797 | $ | — | $ | — | $ | 797 | |||||||||
Current portion of long-term debt and capitalized lease obligations | — | 70 | 1 | — | 71 | ||||||||||||||
Merchandise payables | — | 1,574 | — | — | 1,574 | ||||||||||||||
Intercompany payables | 11,892 | 15,043 | — | (26,935 | ) | — | |||||||||||||
Other current liabilities | 20 | 2,273 | 1,311 | (608 | ) | 2,996 | |||||||||||||
Total current liabilities | 11,912 | 19,757 | 1,312 | (27,543 | ) | 5,438 | |||||||||||||
Long-term debt and capitalized lease obligations | 685 | 2,998 | 1 | (1,576 | ) | 2,108 | |||||||||||||
Pension and postretirement benefits | — | 2,201 | 5 | — | 2,206 | ||||||||||||||
Deferred gain on sale-leaseback | — | 753 | — | — | 753 | ||||||||||||||
Sale-leaseback financing obligation | — | 164 | — | — | 164 | ||||||||||||||
Long-term deferred tax liabilities | 58 | — | 873 | (38 | ) | 893 | |||||||||||||
Other long-term liabilities | — | 832 | 1,128 | (229 | ) | 1,731 | |||||||||||||
Total Liabilities | 12,655 | 26,705 | 3,319 | (29,386 | ) | 13,293 | |||||||||||||
EQUITY (DEFICIT) | |||||||||||||||||||
Shareholder's equity (deficit) | (2,115 | ) | 8,482 | 28,561 | (36,891 | ) | (1,963 | ) | |||||||||||
Noncontrolling interest | — | — | — | 7 | 7 | ||||||||||||||
Total Equity (Deficit) | (2,115 | ) | 8,482 | 28,561 | (36,884 | ) | (1,956 | ) | |||||||||||
TOTAL LIABILITIES AND EQUITY (DEFICIT) | $ | 10,540 | $ | 35,187 | $ | 31,880 | $ | (66,270 | ) | $ | 11,337 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 5,045 | $ | 714 | $ | (730 | ) | $ | 5,029 | |||||||||
Cost of sales, buying and occupancy | — | 4,190 | 272 | (395 | ) | 4,067 | ||||||||||||||
Selling and administrative | 1 | 1,628 | 249 | (335 | ) | 1,543 | ||||||||||||||
Depreciation and amortization | — | 73 | 18 | — | 91 | |||||||||||||||
Impairment charges | — | 3 | — | — | 3 | |||||||||||||||
Gain on sales of assets | — | (51 | ) | — | — | (51 | ) | |||||||||||||
Total costs and expenses | 1 | 5,843 | 539 | (730 | ) | 5,653 | ||||||||||||||
Operating income (loss) | (1 | ) | (798 | ) | 175 | — | (624 | ) | ||||||||||||
Interest expense | (99 | ) | (160 | ) | (3 | ) | 157 | (105 | ) | |||||||||||
Interest and investment income (loss) | 4 | 42 | (15 | ) | (39 | ) | (8 | ) | ||||||||||||
Income (loss) before income taxes | (96 | ) | (916 | ) | 157 | 118 | (737 | ) | ||||||||||||
Income tax (expense) benefit | — | 38 | (8 | ) | (41 | ) | (11 | ) | ||||||||||||
Equity (deficit) in earnings in subsidiaries | (729 | ) | 146 | — | 583 | — | ||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (825 | ) | $ | (732 | ) | $ | 149 | $ | 660 | $ | (748 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 5,766 | $ | 725 | $ | (741 | ) | $ | 5,750 | |||||||||
Cost of sales, buying and occupancy | — | 4,616 | 291 | (419 | ) | 4,488 | ||||||||||||||
Selling and administrative | 1 | 1,706 | 245 | (322 | ) | 1,630 | ||||||||||||||
Depreciation and amortization | — | 76 | 18 | — | 94 | |||||||||||||||
Impairment charges | — | 17 | — | — | 17 | |||||||||||||||
Gain on sales of assets | — | (97 | ) | — | — | (97 | ) | |||||||||||||
Total costs and expenses | 1 | 6,318 | 554 | (741 | ) | 6,132 | ||||||||||||||
Operating income (loss) | (1 | ) | (552 | ) | 171 | — | (382 | ) | ||||||||||||
Interest expense | (60 | ) | (117 | ) | (21 | ) | 124 | (74 | ) | |||||||||||
Interest and investment income (loss) | (3 | ) | 8 | 136 | (124 | ) | 17 | |||||||||||||
Income (loss) before income taxes | (64 | ) | (661 | ) | 286 | — | (439 | ) | ||||||||||||
Income tax (expense) benefit | — | 33 | (47 | ) | — | (14 | ) | |||||||||||||
Equity (deficit) in earnings in subsidiaries | (390 | ) | 138 | — | 252 | — | ||||||||||||||
Net income (loss) | (454 | ) | (490 | ) | 239 | 252 | (453 | ) | ||||||||||||
Income attributable to noncontrolling interests | — | — | (1 | ) | — | (1 | ) | |||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (454 | ) | $ | (490 | ) | $ | 238 | $ | 252 | $ | (454 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 16,173 | $ | 2,092 | $ | (2,179 | ) | $ | 16,086 | |||||||||
Cost of sales, buying and occupancy | — | 13,052 | 784 | (1,149 | ) | 12,687 | ||||||||||||||
Selling and administrative | 3 | 4,823 | 734 | (1,030 | ) | 4,530 | ||||||||||||||
Depreciation and amortization | — | 224 | 54 | — | 278 | |||||||||||||||
Impairment charges | — | 18 | — | — | 18 | |||||||||||||||
Gain on sales of assets | — | (262 | ) | (2 | ) | 98 | (166 | ) | ||||||||||||
Total costs and expenses | 3 | 17,855 | 1,570 | (2,081 | ) | 17,347 | ||||||||||||||
Operating income (loss) | (3 | ) | (1,682 | ) | 522 | (98 | ) | (1,261 | ) | |||||||||||
Interest expense | (288 | ) | (464 | ) | (9 | ) | 472 | (289 | ) | |||||||||||
Interest and investment income (loss) | 15 | 118 | 196 | (354 | ) | (25 | ) | |||||||||||||
Income (loss) before income taxes | (276 | ) | (2,028 | ) | 709 | 20 | (1,575 | ) | ||||||||||||
Income tax (expense) benefit | — | 108 | (106 | ) | (41 | ) | (39 | ) | ||||||||||||
Equity (deficit) in earnings in subsidiaries | (1,317 | ) | 432 | — | 885 | — | ||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (1,593 | ) | $ | (1,488 | ) | $ | 603 | $ | 864 | $ | (1,614 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Merchandise sales and services | $ | — | $ | 17,954 | $ | 2,160 | $ | (2,271 | ) | $ | 17,843 | |||||||||
Cost of sales, buying and occupancy | — | 13,997 | 838 | (1,207 | ) | 13,628 | ||||||||||||||
Selling and administrative | 2 | 5,326 | 741 | (1,064 | ) | 5,005 | ||||||||||||||
Depreciation and amortization | — | 276 | 54 | — | 330 | |||||||||||||||
Impairment charges | — | 71 | — | 71 | ||||||||||||||||
Gain on sales of assets | — | (722 | ) | (8 | ) | — | (730 | ) | ||||||||||||
Total costs and expenses | 2 | 18,948 | 1,625 | (2,271 | ) | 18,304 | ||||||||||||||
Operating income (loss) | (2 | ) | (994 | ) | 535 | — | (461 | ) | ||||||||||||
Interest expense | (204 | ) | (355 | ) | (63 | ) | 373 | (249 | ) | |||||||||||
Interest and investment income (loss) | (14 | ) | 28 | 332 | (373 | ) | (27 | ) | ||||||||||||
Income (loss) before income taxes | (220 | ) | (1,321 | ) | 804 | — | (737 | ) | ||||||||||||
Income tax (expense) benefit | — | 332 | (143 | ) | — | 189 | ||||||||||||||
Equity (deficit) in earnings in subsidiaries | (329 | ) | 342 | — | (13 | ) | — | |||||||||||||
Net income (loss) | (549 | ) | (647 | ) | 661 | (13 | ) | (548 | ) | |||||||||||
Income attributable to noncontrolling interests | — | — | (1 | ) | — | (1 | ) | |||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (549 | ) | $ | (647 | ) | $ | 660 | $ | (13 | ) | $ | (549 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | (825 | ) | $ | (732 | ) | $ | 149 | $ | 660 | $ | (748 | ) | |||||||
Other comprehensive income | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 64 | — | — | 64 | |||||||||||||||
Unrealized net gain, net of tax | — | — | 85 | (85 | ) | — | ||||||||||||||
Total other comprehensive income | — | 64 | 85 | (85 | ) | 64 | ||||||||||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | (825 | ) | $ | (668 | ) | $ | 234 | $ | 575 | $ | (684 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | (454 | ) | $ | (490 | ) | $ | 239 | $ | 252 | $ | (453 | ) | |||||||
Other comprehensive income | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 65 | — | — | 65 | |||||||||||||||
Unrealized net gain, net of tax | — | — | 27 | (27 | ) | — | ||||||||||||||
Total other comprehensive income | — | 65 | 27 | (27 | ) | 65 | ||||||||||||||
Comprehensive income (loss) | (454 | ) | (425 | ) | 266 | 225 | (388 | ) | ||||||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | — | (1 | ) | (1 | ) | |||||||||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | (454 | ) | $ | (425 | ) | $ | 266 | $ | 224 | $ | (389 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | (1,593 | ) | $ | (1,488 | ) | $ | 603 | $ | 864 | $ | (1,614 | ) | |||||||
Other comprehensive income | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 192 | — | — | 192 | |||||||||||||||
Unrealized net gain, net of tax | — | — | 148 | (148 | ) | — | ||||||||||||||
Total other comprehensive income | — | 192 | 148 | (148 | ) | 192 | ||||||||||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | (1,593 | ) | $ | (1,296 | ) | $ | 751 | $ | 716 | $ | (1,422 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net income (loss) | $ | (549 | ) | $ | (647 | ) | $ | 661 | $ | (13 | ) | $ | (548 | ) | ||||||
Other comprehensive income | ||||||||||||||||||||
Pension and postretirement adjustments, net of tax | — | 196 | — | — | 196 | |||||||||||||||
Unrealized net gain, net of tax | — | — | 11 | (11 | ) | — | ||||||||||||||
Total other comprehensive income | — | 196 | 11 | (11 | ) | 196 | ||||||||||||||
Comprehensive income (loss) | (549 | ) | (451 | ) | 672 | (24 | ) | (352 | ) | |||||||||||
Comprehensive loss attributable to noncontrolling interests | — | — | — | (1 | ) | (1 | ) | |||||||||||||
Comprehensive income (loss) attributable to Holdings' shareholders | $ | (549 | ) | $ | (451 | ) | $ | 672 | $ | (25 | ) | $ | (353 | ) |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Net cash provided by (used in) operating activities | $ | 209 | $ | (1,883 | ) | $ | 482 | $ | (216 | ) | $ | (1,408 | ) | ||||||
Proceeds from sales of property and investments | 161 | 113 | 274 | ||||||||||||||||
Purchases of property and equipment | (108 | ) | (7 | ) | (115 | ) | |||||||||||||
Net investing with Affiliates | (209 | ) | — | (377 | ) | 586 | — | ||||||||||||
Net cash provided by (used in) investing activities | (209 | ) | 53 | (271 | ) | 586 | 159 | ||||||||||||
Proceeds from debt issuances | — | 1,528 | — | — | 1,528 | ||||||||||||||
Repayments of long-term debt | — | (49 | ) | (1 | ) | — | (50 | ) | |||||||||||
Decrease in short-term borrowings, primarily 90 days or less | — | (179 | ) | — | — | (179 | ) | ||||||||||||
Debt issuance costs | — | (30 | ) | — | — | (30 | ) | ||||||||||||
Intercompany dividend | — | (216 | ) | 216 | — | ||||||||||||||
Net borrowing with Affiliates | — | 586 | — | (586 | ) | — | |||||||||||||
Net cash provided by (used in) financing activities | — | 1,856 | (217 | ) | (370 | ) | 1,269 | ||||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | — | 26 | (6 | ) | — | 20 | |||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 200 | 38 | — | 238 | ||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 226 | $ | 32 | $ | — | $ | 258 |
millions | Parent | Guarantor Subsidiaries | Non- Guarantor Subsidiaries | Eliminations | Consolidated | ||||||||||||||
Net cash provided by (used in) operating activities | $ | 249 | $ | (2,691 | ) | $ | 642 | $ | (254 | ) | $ | (2,054 | ) | ||||||
Proceeds from sales of property and investments | — | 2,703 | 5 | — | 2,708 | ||||||||||||||
Purchases of property and equipment | — | (146 | ) | (6 | ) | — | (152 | ) | |||||||||||
Net investing with Affiliates | (249 | ) | — | (378 | ) | 627 | — | ||||||||||||
Net cash provided by (used in) investing activities | (249 | ) | 2,557 | (379 | ) | 627 | 2,556 | ||||||||||||
Repayments of long-term debt | — | (1,385 | ) | (2 | ) | — | (1,387 | ) | |||||||||||
Increase in short-term borrowings, primarily 90 days or less | — | 471 | — | — | 471 | ||||||||||||||
Proceeds from sale-leaseback financing | — | 508 | — | — | 508 | ||||||||||||||
Debt issuance costs | — | (50 | ) | — | — | (50 | ) | ||||||||||||
Intercompany dividend | — | — | (254 | ) | 254 | — | |||||||||||||
Net borrowing with Affiliates | — | 627 | — | (627 | ) | — | |||||||||||||
Net cash provided by (used in) financing activities | — | 171 | (256 | ) | (373 | ) | (458 | ) | |||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | — | 37 | 7 | — | 44 | ||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | — | 219 | 31 | — | 250 | ||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | — | $ | 256 | $ | 38 | $ | — | $ | 294 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions, except per share data | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
REVENUES | |||||||||||||||
Merchandise sales and services | $ | 5,029 | $ | 5,750 | $ | 16,086 | $ | 17,843 | |||||||
COSTS AND EXPENSES | |||||||||||||||
Cost of sales, buying and occupancy | 4,067 | 4,488 | 12,687 | 13,628 | |||||||||||
Gross margin dollars | 962 | 1,262 | 3,399 | 4,215 | |||||||||||
Gross margin rate | 19.1 | % | 21.9 | % | 21.1 | % | 23.6 | % | |||||||
Selling and administrative | 1,543 | 1,630 | 4,530 | 5,005 | |||||||||||
Selling and administrative expense as a percentage of total revenues | 30.7 | % | 28.3 | % | 28.2 | % | 28.1 | % | |||||||
Depreciation and amortization | 91 | 94 | 278 | 330 | |||||||||||
Impairment charges | 3 | 17 | 18 | 71 | |||||||||||
Gain on sales of assets | (51 | ) | (97 | ) | (166 | ) | (730 | ) | |||||||
Total costs and expenses | 5,653 | 6,132 | 17,347 | 18,304 | |||||||||||
Operating loss | (624 | ) | (382 | ) | (1,261 | ) | (461 | ) | |||||||
Interest expense | (105 | ) | (74 | ) | (289 | ) | (249 | ) | |||||||
Interest and investment income (loss) | (8 | ) | 17 | (25 | ) | (27 | ) | ||||||||
Loss before income taxes | (737 | ) | (439 | ) | (1,575 | ) | (737 | ) | |||||||
Income tax (expense) benefit | (11 | ) | (14 | ) | (39 | ) | 189 | ||||||||
Net loss | (748 | ) | (453 | ) | (1,614 | ) | (548 | ) | |||||||
Income attributable to noncontrolling interests | — | (1 | ) | — | (1 | ) | |||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (748 | ) | $ | (454 | ) | $ | (1,614 | ) | $ | (549 | ) | |||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | |||||||||||||||
Basic loss per share | $ | (6.99 | ) | $ | (4.26 | ) | $ | (15.10 | ) | $ | (5.15 | ) | |||
Diluted loss per share | $ | (6.99 | ) | $ | (4.26 | ) | $ | (15.10 | ) | $ | (5.15 | ) | |||
Basic weighted average common shares outstanding | 107.0 | 106.6 | 106.9 | 106.5 | |||||||||||
Diluted weighted average common shares outstanding | 107.0 | 106.6 | 106.9 | 106.5 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Net loss attributable to Holdings per statement of operations | $ | (748 | ) | $ | (454 | ) | $ | (1,614 | ) | $ | (549 | ) | |||
Income attributable to noncontrolling interests | — | 1 | — | 1 | |||||||||||
Income tax expense (benefit) | 11 | 14 | 39 | (189 | ) | ||||||||||
Interest expense | 105 | 74 | 289 | 249 | |||||||||||
Interest and investment (income) loss | 8 | (17 | ) | 25 | 27 | ||||||||||
Operating loss | (624 | ) | (382 | ) | (1,261 | ) | (461 | ) | |||||||
Depreciation and amortization | 91 | 94 | 278 | 330 | |||||||||||
Gain on sales of assets | (51 | ) | (97 | ) | (166 | ) | (730 | ) | |||||||
Before excluded items | (584 | ) | (385 | ) | (1,149 | ) | (861 | ) | |||||||
Closed store reserve and severance | 113 | (1 | ) | 182 | 36 | ||||||||||
Pension expense | 72 | 58 | 216 | 172 | |||||||||||
Other(1) | 43 | 2 | 52 | (87 | ) | ||||||||||
Amortization of deferred Seritage gain | (22 | ) | (23 | ) | (66 | ) | (30 | ) | |||||||
Impairment charges | 3 | 17 | 18 | 71 | |||||||||||
Adjusted EBITDA | $ | (375 | ) | $ | (332 | ) | $ | (747 | ) | $ | (699 | ) |
13 Weeks Ended | |||||||||||||||||||
October 29, 2016 | October 31, 2015 | ||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | |||||||||||||
Operating loss per statement of operations | $ | (262 | ) | $ | (362 | ) | $ | (624 | ) | $ | (127 | ) | $ | (255 | ) | $ | (382 | ) | |
Depreciation and amortization | 17 | 74 | 91 | 17 | 77 | 94 | |||||||||||||
Gain on sales of assets | (30 | ) | (21 | ) | (51 | ) | (12 | ) | (85 | ) | (97 | ) | |||||||
Before excluded items | (275 | ) | (309 | ) | (584 | ) | (122 | ) | (263 | ) | (385 | ) | |||||||
Closed store reserve and severance | 107 | 6 | 113 | 1 | (2 | ) | (1 | ) | |||||||||||
Pension expense | — | 72 | 72 | — | 58 | 58 | |||||||||||||
Other(1) | — | 43 | 43 | 1 | 1 | 2 | |||||||||||||
Amortization of deferred Seritage gain | (4 | ) | (18 | ) | (22 | ) | (5 | ) | (18 | ) | (23 | ) | |||||||
Impairment charges | 3 | — | 3 | 10 | 7 | 17 | |||||||||||||
Adjusted EBITDA | $ | (169 | ) | $ | (206 | ) | $ | (375 | ) | $ | (115 | ) | $ | (217 | ) | $ | (332 | ) | |
% to revenues | (9.0 | )% | (6.6 | )% | (7.5 | )% | (5.1 | )% | (6.2 | )% | (5.8 | )% |
39 Weeks Ended | |||||||||||||||||||
October 29, 2016 | October 31, 2015 | ||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | |||||||||||||
Operating loss per statement of operations | $ | (387 | ) | $ | (874 | ) | $ | (1,261 | ) | $ | (197 | ) | $ | (264 | ) | $ | (461 | ) | |
Depreciation and amortization | 51 | 227 | 278 | 56 | 274 | 330 | |||||||||||||
Gain on sales of assets | (120 | ) | (46 | ) | (166 | ) | (173 | ) | (557 | ) | (730 | ) | |||||||
Before excluded items | (456 | ) | (693 | ) | (1,149 | ) | (314 | ) | (547 | ) | (861 | ) | |||||||
Closed store reserve and severance | 159 | 23 | 182 | 42 | (6 | ) | 36 | ||||||||||||
Pension expense | — | 216 | 216 | — | 172 | 172 | |||||||||||||
Other(1) | 8 | 44 | 52 | 9 | (96 | ) | (87 | ) | |||||||||||
Amortization of deferred Seritage gain | (13 | ) | (53 | ) | (66 | ) | (6 | ) | (24 | ) | (30 | ) | |||||||
Impairment charges | 7 | 11 | 18 | 12 | 59 | 71 | |||||||||||||
Adjusted EBITDA | $ | (295 | ) | $ | (452 | ) | $ | (747 | ) | $ | (257 | ) | $ | (442 | ) | $ | (699 | ) | |
% to revenues | (4.7 | )% | (4.6 | )% | (4.6 | )% | (3.6 | )% | (4.1 | )% | (3.9 | )% |
13 Weeks Ended October 29, 2016 | |||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Mark-to-Market Adjustments | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||||
Gross margin impact | $ | 962 | $ | — | $ | 38 | $ | — | $ | — | $ | (22 | ) | $ | — | $ | — | $ | 978 | ||||||||
Selling and administrative impact | 1,543 | (72 | ) | (75 | ) | — | — | — | (43 | ) | — | 1,353 | |||||||||||||||
Depreciation and amortization impact | 91 | — | (2 | ) | — | — | — | — | — | 89 | |||||||||||||||||
Impairment charges impact | 3 | — | (3 | ) | — | — | — | — | — | — | |||||||||||||||||
Gain on sales of assets impact | (51 | ) | — | — | 16 | — | — | — | — | (35 | ) | ||||||||||||||||
Operating loss impact | (624 | ) | 72 | 118 | (16 | ) | — | (22 | ) | 43 | — | (429 | ) | ||||||||||||||
Interest and investment loss impact | (8 | ) | — | — | — | 9 | — | — | — | 1 | |||||||||||||||||
Income tax expense impact | (11 | ) | (27 | ) | (44 | ) | 6 | (3 | ) | 8 | (16 | ) | 287 | 200 | |||||||||||||
After tax and noncontrolling interests impact | (748 | ) | 45 | 74 | (10 | ) | 6 | (14 | ) | 27 | 287 | (333 | ) | ||||||||||||||
Diluted loss per share impact | $ | (6.99 | ) | $ | 0.42 | $ | 0.69 | $ | (0.09 | ) | $ | 0.06 | $ | (0.13 | ) | $ | 0.25 | $ | 2.68 | $ | (3.11 | ) |
13 Weeks Ended October 31, 2015 | |||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Mark-to-Market Adjustments | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||||
Gross margin impact | $ | 1,262 | $ | — | $ | 6 | $ | — | $ | — | $ | (23 | ) | $ | — | $ | — | $ | 1,245 | ||||||||
Selling and administrative impact | 1,630 | (58 | ) | 7 | — | — | — | (2 | ) | — | 1,577 | ||||||||||||||||
Depreciation and amortization impact | 94 | — | — | — | — | — | — | — | 94 | ||||||||||||||||||
Impairment charges impact | 17 | — | (17 | ) | — | — | — | — | — | — | |||||||||||||||||
Gain on sales of assets impact | (97 | ) | — | — | 83 | — | — | — | — | (14 | ) | ||||||||||||||||
Operating loss impact | (382 | ) | 58 | 16 | (83 | ) | — | (23 | ) | 2 | — | (412 | ) | ||||||||||||||
Interest and investment income impact | 17 | — | — | — | (17 | ) | — | — | — | — | |||||||||||||||||
Income tax expense impact | (14 | ) | (22 | ) | (6 | ) | 31 | 6 | 9 | (1 | ) | 179 | 182 | ||||||||||||||
After tax and noncontrolling interests impact | (454 | ) | 36 | 10 | (52 | ) | (11 | ) | (14 | ) | 1 | 179 | (305 | ) | |||||||||||||
Diluted loss per share impact | $ | (4.26 | ) | $ | 0.34 | $ | 0.09 | $ | (0.49 | ) | $ | (0.10 | ) | $ | (0.13 | ) | $ | 0.01 | $ | 1.68 | $ | (2.86 | ) |
39 Weeks Ended October 29, 2016 | |||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Mark-to-Market Adjustments | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||||
Gross margin impact | $ | 3,399 | $ | — | $ | 102 | $ | — | $ | — | $ | (66 | ) | $ | — | $ | — | $ | 3,435 | ||||||||
Selling and administrative impact | 4,530 | (216 | ) | (80 | ) | — | — | — | (52 | ) | — | 4,182 | |||||||||||||||
Depreciation and amortization impact | 278 | — | (7 | ) | — | — | — | — | — | 271 | |||||||||||||||||
Impairment charges | 18 | — | (18 | ) | — | — | — | — | — | — | |||||||||||||||||
Gain on sales of assets impact | (166 | ) | — | — | 63 | — | — | — | — | (103 | ) | ||||||||||||||||
Operating loss impact | (1,261 | ) | 216 | 207 | (63 | ) | — | (66 | ) | 52 | — | (915 | ) | ||||||||||||||
Interest and investment loss impact | (25 | ) | — | — | — | 29 | — | — | — | 4 | |||||||||||||||||
Income tax expense impact | (39 | ) | (81 | ) | (78 | ) | 24 | (11 | ) | 25 | (20 | ) | 630 | 450 | |||||||||||||
After tax and noncontrolling interests impact | (1,614 | ) | 135 | 129 | (39 | ) | 18 | (41 | ) | 32 | 630 | (750 | ) | ||||||||||||||
Diluted loss per share impact | $ | (15.10 | ) | $ | 1.26 | $ | 1.21 | $ | (0.36 | ) | $ | 0.17 | $ | (0.39 | ) | $ | 0.30 | $ | 5.89 | $ | (7.02 | ) |
39 Weeks Ended October 31, 2015 | |||||||||||||||||||||||||||
. | Adjustments | ||||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Mark-to-Market Adjustments | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||||
Gross margin impact | $ | 4,215 | $ | — | $ | 17 | $ | — | $ | — | $ | (30 | ) | $ | (126 | ) | $ | — | $ | 4,076 | |||||||
Selling and administrative impact | 5,005 | (172 | ) | (19 | ) | — | — | — | (39 | ) | — | 4,775 | |||||||||||||||
Depreciation and amortization impact | 330 | — | (2 | ) | — | — | — | — | — | 328 | |||||||||||||||||
Impairment charges impact | 71 | — | (71 | ) | — | — | — | — | — | — | |||||||||||||||||
Gain on sales of assets impact | (730 | ) | — | — | 687 | — | — | — | — | (43 | ) | ||||||||||||||||
Operating loss impact | (461 | ) | 172 | 109 | (687 | ) | — | (30 | ) | (87 | ) | — | (984 | ) | |||||||||||||
Interest and investment loss impact | (27 | ) | — | — | — | 25 | — | — | — | (2 | ) | ||||||||||||||||
Income tax benefit impact | 189 | (65 | ) | (41 | ) | 258 | (9 | ) | 11 | 33 | 87 | 463 | |||||||||||||||
After tax and noncontrolling interests impact | (549 | ) | 107 | 68 | (429 | ) | 16 | (19 | ) | (54 | ) | 87 | (773 | ) | |||||||||||||
Diluted loss per share impact | $ | (5.15 | ) | $ | 1.00 | $ | 0.64 | $ | (4.03 | ) | $ | 0.15 | $ | (0.18 | ) | $ | (0.51 | ) | $ | 0.82 | $ | (7.26 | ) |
• | EBITDA excludes the effects of financings and investing activities by eliminating the effects of interest and depreciation costs; |
• | Management considers gains/losses on the sale of assets to result from investing decisions rather than ongoing operations; and |
• | Other significant items, while periodically affecting our results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of results. We have adjusted our results for these items to make our statements more comparable and therefore more useful to investors as the items are not representative of our ongoing operations and reflect past investment decisions. |
• | Pension expense – Contributions to our pension plans remain a significant use of our cash on an annual basis. Cash contributions to our pension and postretirement plans are separately disclosed on the cash flow statement. While the Company's pension plan is frozen, and thus associates do not currently earn pension benefits, we have a legacy pension obligation for past service performed by Kmart and Sears associates. The annual pension expense included in our statement of operations related to these legacy domestic pension plans was relatively minimal in years prior to 2009. However, due to the severe decline in the capital markets that occurred in the latter part of 2008, and the resulting abnormally low interest rates, which continue to persist, our domestic pension expense was $229 million in 2015, $89 million in 2014 and $162 million in 2013. Pension expense is comprised of interest cost, expected return on plan assets and recognized net loss and other. This adjustment eliminates the entire pension expense from the statement of operations to improve comparability. Pension expense is included in the determination of net income (loss). |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Components of net periodic expense: | |||||||||||||||
Interest cost | $ | 57 | $ | 53 | $ | 171 | $ | 158 | |||||||
Expected return on plan assets | (51 | ) | (62 | ) | (152 | ) | (187 | ) | |||||||
Recognized net loss and other | 66 | 67 | 197 | 201 | |||||||||||
Net periodic expense | $ | 72 | $ | 58 | $ | 216 | $ | 172 |
• | Closed store reserve and severance – We are transforming our Company to a less asset-intensive business model. Throughout this transformation, we continue to make choices related to our stores, which could result in sales, closures, lease terminations or a variety of other decisions. |
• | Impairment charges – Accounting standards require the Company to evaluate the carrying value of fixed assets, goodwill and intangible assets for impairment. As a result of the Company's analysis, we have recorded impairment charges related to certain fixed asset and indefinite-lived intangible asset balances. |
• | Gains on sales of assets – We have recorded significant gains on sales of assets, as well as gains on sales of joint venture interests, which were primarily attributable to several real estate transactions, including gains recognized due to recaptures by Seritage and the JVs. Management considers these gains on sale of assets to result from investing decisions rather than ongoing operations. |
• | Mark-to-market adjustments – We elected the fair value option for the equity method investment in Sears Canada, and the change in fair value is recorded in interest and investment income on the Condensed Consolidated Statement of Operations. Management considers activity related to our retained investment in Sears Canada to result from investing decisions rather than ongoing operations. Furthermore, we do not consider the short term fluctuations in Sears Canada's stock price useful in assessing our operating performance. |
• | Amortization of deferred Seritage gain – A portion of the gain on the Seritage transaction was deferred and will be recognized in proportion to the related rent expense, which is a component of cost of sales, buying and occupancy, on the Condensed Consolidated Statement of Operations, over the lease term. Management considers the amortization of the deferred Seritage gain to result from investing decisions rather than ongoing operations. |
• | Other – consists of one-time credits from vendors, transaction costs associated with strategic initiatives, expenses associated with legal matters and other expenses. |
• | Domestic tax matters – In 2011, we recorded a non-cash charge to establish a valuation allowance against substantially all of our domestic deferred tax assets. Accounting rules generally require that a valuation reserve be established when income has not been generated over a three-year cumulative period to support the deferred tax asset. While an accounting loss was recorded, we believe no economic loss has occurred as these net operating losses and tax benefits remain available to reduce future taxes as income is generated in |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions, except number of stores | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Merchandise sales and services | $ | 1,888 | $ | 2,247 | $ | 6,248 | $ | 7,062 | |||||||
Cost of sales, buying and occupancy | 1,605 | 1,774 | 5,100 | 5,562 | |||||||||||
Gross margin dollars | 283 | 473 | 1,148 | 1,500 | |||||||||||
Gross margin rate | 15.0 | % | 21.1 | % | 18.4 | % | 21.2 | % | |||||||
Selling and administrative | 555 | 585 | 1,597 | 1,802 | |||||||||||
Selling and administrative expense as a percentage of total revenues | 29.4 | % | 26.0 | % | 25.6 | % | 25.5 | % | |||||||
Depreciation and amortization | 17 | 17 | 51 | 56 | |||||||||||
Impairment charges | 3 | 10 | 7 | 12 | |||||||||||
Gain on sales of assets | (30 | ) | (12 | ) | (120 | ) | (173 | ) | |||||||
Total costs and expenses | 2,150 | 2,374 | 6,635 | 7,259 | |||||||||||
Operating loss | $ | (262 | ) | $ | (127 | ) | $ | (387 | ) | $ | (197 | ) | |||
Adjusted EBITDA | $ | (169 | ) | $ | (115 | ) | $ | (295 | ) | $ | (257 | ) | |||
Number of stores | 801 | 952 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions, except number of stores | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Merchandise sales and services | $ | 3,141 | $ | 3,503 | $ | 9,838 | $ | 10,781 | |||||||
Cost of sales, buying and occupancy | 2,462 | 2,714 | 7,587 | 8,066 | |||||||||||
Gross margin dollars | 679 | 789 | 2,251 | 2,715 | |||||||||||
Gross margin rate | 21.6 | % | 22.5 | % | 22.9 | % | 25.2 | % | |||||||
Selling and administrative | 988 | 1,045 | 2,933 | 3,203 | |||||||||||
Selling and administrative expense as a percentage of total revenues | 31.5 | % | 29.8 | % | 29.8 | % | 29.7 | % | |||||||
Depreciation and amortization | 74 | 77 | 227 | 274 | |||||||||||
Impairment charges | — | 7 | 11 | 59 | |||||||||||
Gain on sales of assets | (21 | ) | (85 | ) | (46 | ) | (557 | ) | |||||||
Total costs and expenses | 3,503 | 3,758 | 10,712 | 11,045 | |||||||||||
Operating loss | $ | (362 | ) | $ | (255 | ) | $ | (874 | ) | $ | (264 | ) | |||
Adjusted EBITDA | $ | (206 | ) | $ | (217 | ) | $ | (452 | ) | $ | (442 | ) | |||
Number of: | |||||||||||||||
Full-line stores | 676 | 708 | |||||||||||||
Specialty stores | 26 | 27 | |||||||||||||
Total Sears Domestic Stores | 702 | 735 |
millions | October 29, 2016 | October 31, 2015 | January 30, 2016 | ||||||||
Cash and equivalents | $ | 145 | $ | 159 | $ | 141 | |||||
Cash posted as collateral | 3 | 1 | 2 | ||||||||
Credit card deposits in transit | 110 | 134 | 95 | ||||||||
Total cash balances | $ | 258 | $ | 294 | $ | 238 |
millions | October 29, 2016 | October 31, 2015 | January 30, 2016 | ||||||||
Short-term borrowings: | |||||||||||
Unsecured commercial paper | $ | 248 | $ | 9 | $ | — | |||||
Secured borrowings | 370 | 677 | 797 | ||||||||
Long-term debt, including current portion: | |||||||||||
Notes and debentures outstanding | 3,517 | 1,976 | 1,984 | ||||||||
Capitalized lease obligations | 164 | 206 | 195 | ||||||||
Total borrowings | $ | 4,299 | $ | 2,868 | $ | 2,976 |
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions | October 29, 2016 | October 31, 2015 | October 29, 2016 | October 31, 2015 | |||||||||||
Secured borrowings: | |||||||||||||||
Maximum daily amount outstanding during the period | $ | 370 | $ | 677 | $ | 1,150 | $ | 799 | |||||||
Average amount outstanding during the period | 159 | 135 | 362 | 367 | |||||||||||
Amount outstanding at period-end | 370 | 677 | 370 | 677 | |||||||||||
Weighted average interest rate | 5.0 | % | 3.5 | % | 4.5 | % | 3.0 | % | |||||||
Unsecured commercial paper: | |||||||||||||||
Maximum daily amount outstanding during the period | $ | 250 | $ | 9 | $ | 250 | $ | 104 | |||||||
Average amount outstanding during the period | 152 | 5 | 93 | 18 | |||||||||||
Amount outstanding at period-end | 248 | 9 | 248 | 9 | |||||||||||
Weighted average interest rate | 7.8 | % | 4.3 | % | 7.8 | % | 4.1 | % | |||||||
Secured short-term loan: | |||||||||||||||
Maximum daily amount outstanding during the period | $ | — | $ | — | $ | — | $ | 400 | |||||||
Average amount outstanding during the period | — | — | — | 112 | |||||||||||
Amount outstanding at period-end | — | — | — | — | |||||||||||
Weighted average interest rate | — | % | — | % | — | % | 5.0 | % |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program(1) | Average Price Paid per Share for Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | |||||||||||||
July 31, 2016 to August 27, 2016 | — | $ | — | — | $ | — | |||||||||||
August 28, 2016 to October 1, 2016 | — | — | — | — | |||||||||||||
October 2, 2016 to October 29, 2016 | — | — | — | — | |||||||||||||
Total | — | $ | — | — | $ | — | $ | 503,907,832 |
(1) | Our common share repurchase program was initially announced on September 14, 2005 and has a total authorization since inception of the program of $6.5 billion, including the authorizations to purchase up to an additional $500 million of common stock on each of December 17, 2009 and May 2, 2011. The program has no stated expiration date. |
(b) | Exhibits |
SEARS HOLDINGS CORPORATION | ||
Date: December 8, 2016 | By: | /s/ ROBERT A. RIECKER |
Name: | Robert A. Riecker | |
Title: | Controller and Head of Capital Market Activities* |
3.1 | Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K, dated March 24, 2005, filed on March 24, 2005 (File No. 000-51217)). | |||
3.2 | Amended and Restated By-Laws (incorporated by reference to Exhibit 3.2 to Registrant's Current Report on Form 8-K, dated January 22, 2014, filed on January 24, 2014 (File No. 000-51217)). | |||
10.1 | Second Lien Credit Agreement, dated as of September 1, 2016, between Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation, the lenders party thereto, and JPP, LLC, as administrative agent and collateral administrator (incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K, dated September 1, 2016, filed on September 2, 2016 (File No. 001-36693)). | |||
10.2 | First Amendment to Security Agreement, dated as of September 1, 2016, between Sears Holdings Corporation, the other Grantors party thereto and Wilmington Trust, National Association, as collateral agent (incorporated by reference to Exhibit 10.2 to Registrant's Current Report on Form 8-K, dated September 1, 2016, filed on September 2, 2016 (File No. 001-36693)). | |||
10.3 | Amended and Restated Intercreditor Agreement, dated as of September 1, 2016, by and among Bank of America, N.A. and Wells Fargo Bank, National Association as ABL Agents, and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 10.3 to Registrant’s Current Report on Form 8-K, dated September 1, 2016, filed on September 2, 2016 (File No. 001-36693)). | |||
*10.4 | Letter from Registrant to Jason M. Hollar, dated as of September 18, 2014 | |||
10.5 | Letter from Registrant to Jason M. Hollar, dated as of October 13, 2016 (incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K, dated October 13, 2016, filed on October 14, 2016 (File No. 001-36693)). | |||
31.1 | Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
31.2 | Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
101 | The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended October 29, 2016, formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Statements of Operations (Unaudited) for the 13 and 39 weeks ended October 29, 2016 and October 31, 2015; (ii) the Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the 13 and 39 weeks ended October 29, 2016 and October 31, 2015; (iii) the Condensed Consolidated Balance Sheets (Unaudited) as of October 29, 2016, October 31, 2015 and January 30, 2016; (iv) the Condensed Consolidated Statements of Cash Flows (Unaudited) for the 39 weeks ended October 29, 2016 and October 31, 2015; (v) the Condensed Consolidated Statements of Deficit (Unaudited) for the 39 weeks ended October 29, 2016 and October 31, 2015; and (vi) the Notes to the Condensed Consolidated Financial Statements (Unaudited). |
• | Annual base salary at a rate of $600,000. |
• | You will receive a one-time sign-on bonus of $750,000 (gross). This sign-on bonus will be payable within thirty (30) days following your start date. In the event you voluntarily terminate your employment with SHC or are terminated by SHC for misconduct or integrity issues within twenty-four (24) months of your start date, you will be required to repay the full amount of the payment paid to you, including any taxes withheld, unless prohibited by law, to SHC within thirty (30) days of your last day worked. |
• | Participation in the Sears Holdings Corporation Annual Incentive Plan (“AIP”) with an annual target incentive opportunity of 100% of your base salary. Your target incentive under the 2014 AIP will be prorated from your start date through January 31, 2015, the last day of SHC’s 2014 fiscal year. Any incentive payable with respect to a fiscal year will be paid by April 15th of the following fiscal year, provided that you are actively employed at the payment date. Further details regarding your 2014 AIP target award will be provided to you following your start date. |
• | You will be eligible to receive a Special Incentive Award with respect to each of SHC’s 2014, 2015 and 2016 fiscal years, payable by April 15th of the fiscal year following the applicable fiscal year, provided that you are actively employed at the applicable payment date, subject to the following terms: |
• | Fiscal Year 2014 – 100% of your target under the 2014 AIP, subject to reduction by any amount payable to you under the 2014 AIP; |
• | Fiscal Year 2015 – 50% of your target under the 2015 AIP, subject to reduction by any amount payable to you under the 2015 AIP; and |
• | Fiscal Year 2016 – 50% of your target under the 2016 AIP, subject to reduction by any amount payable to you under the 2016 AIP. |
• | Participation in the SHC long-term incentive program (“LTI”). Your target incentive opportunity under the 2014 SHC LTI will be 100% of your base salary. Your participation in the 2014 LTI will be prorated from your start date through January 28, 2017, the last day of SHC’s 2016 fiscal year. Further details regarding your 2014 SHC LTI target award will be provided to you following your start date. |
• | An additional long-term incentive award of $1,000,000 (gross) (“Special LTI Award”). This award will be payable on a graded basis, with one-third of the Special LTI Award being payable as of each of the first three (3) anniversaries of your start date. Payment will be made as soon as administratively feasible following the forgoing anniversary dates and not later than the fifteenth (15th) day of the third (3rd) month following each such date, in all events, provided you are actively employed on the applicable anniversary. Notwithstanding the above, you will receive any unpaid scheduled payment above if you are terminated by SHC (other than for misconduct or integrity issues) before the relevant anniversary date; any such payment will be paid as a one-time lump sum within thirty (30) days following your last day worked. Further, in the event you are terminated by SHC for misconduct or integrity issues within twelve (12) months following a payment date, you will be required to repay any such payment to SHC within thirty (30) days of your last day worked. |
• | You represent and warrant to SHC that (a) as of your start date with SHC, you are not subject to any obligation, written or oral, containing any non-competition provision or any other restriction (including, without limitation, any confidentiality provision) that would result in any restriction on your ability to accept and perform this or any other position with SHC or any of its affiliates and (b) you are not (i) a member of any board of directors, board of trustees or similar governing body of any for-profit, non-profit or not-for-profit entity, or (ii) a party to any agreement, written or oral, with any entity under which you would receive remuneration for your services, except as disclosed to and approved by SHC in advance of your start date. You agree that you will not (A) become a member of any board or body described in clause (b)(i) of the preceding sentence or (B) become a party to any agreement described in clause (b)(ii) of the preceding sentence, in each case without the prior written consent of SHC, such consent not to be unreasonably withheld. Further, you agree you will not disclose or use, in violation of an obligation of confidentiality, any information that you acquired as a result of any previous employment or otherwise. |
• | You will be required to sign an Executive Severance Agreement (“Agreement”). The terms are generally as follows: If your employment is terminated by SHC (other than for Cause, death or Disability) or by you for Good Reason (as such capitalized terms are defined in the Agreement), you will receive twelve (12) months of salary continuation, equal to your base salary at the time of termination, subject to mitigation. Under the Agreement, you agree, among other things, not to disclose confidential information and for twelve (12) months following termination of employment not to solicit employees. You also agree not to aid, assist or render services for any “Sears Competitor” or “Sears Vendor” (as such terms are defined in the Agreement) for twelve (12) months following termination of employment. The non-disclosure, non-solicitation, non-compete and non-affiliation provisions apply regardless of whether you receive severance benefits under this Agreement. This offer is contingent upon you signing the Agreement. Upon signing the Agreement, you agree that the consideration you are receiving for doing so includes not only your employment with SHC but also the other compensation and benefits you will be receiving (or are eligible to receive) from SHC as outlined herein and which you would not have been offered or received (or have been eligible to receive) without your signing the Agreement. |
• | You will be eligible for relocation assistance in accordance with company’s standard relocation policy. To receive relocation assistance, you must sign a Relocation Repayment Agreement which will be |
• | Home sale assistance and moving and storage of household goods (includes shipment of up to two ( 2) automobiles); and |
• | A relocation lump sum in the amount of $45,000 (net) to assist with your move to the new work location. The relocation vendor will process 50% of that amount no earlier than 30 days prior to your start date, upon receipt of your fully executed repayment agreement and banking instructions. The remaining 50% of the relocation lump sum will be paid by the relocation vendor upon (1) delivery of your household goods to within 50 miles of the new work location, (2) purchase a home within 50 miles of the new work location, or (3) sell your home in the departure location in conjunction with signing a long-term lease (at least one year) within 50 miles of the new work location. |
• | You will be covered under and subject to the terms and conditions of the Non-Accrual Vacation Policy. |
• | You will be eligible to participate in all retirement, health and welfare programs on a basis no less favorable than other executives at your level, in accordance with the applicable terms, conditions and availability of those programs. |
• | This offer also is contingent upon satisfactory completion of a background reference check, employment authorization verification and pre-employment drug test. |
1. | I have reviewed this quarterly report on Form 10-Q of Sears Holdings Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | I have reviewed this quarterly report on Form 10-Q of Sears Holdings Corporation; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Edward S. Lampert |
Edward S. Lampert |
Chairman of the Board and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jason M. Hollar |
Jason M. Hollar |
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Oct. 29, 2016 |
Dec. 05, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SEARS HOLDINGS CORP | |
Entity Central Index Key | 0001310067 | |
Current Fiscal Year End Date | --01-28 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 29, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Trading Symbol | SHLD | |
Entity Common Stock, Shares Outstanding | 107,033,252 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
||||||||
REVENUES | |||||||||||
Merchandise sales and services | [1],[2] | $ 5,029 | $ 5,750 | $ 16,086 | $ 17,843 | ||||||
COSTS AND EXPENSES | |||||||||||
Cost of sales, buying and occupancy | [1],[3] | 4,067 | 4,488 | 12,687 | 13,628 | ||||||
Selling and administrative | 1,543 | 1,630 | 4,530 | 5,005 | |||||||
Depreciation and amortization | 91 | 94 | 278 | 330 | |||||||
Impairment charges | 3 | 17 | 18 | 71 | |||||||
Gain on sales of assets | (51) | (97) | (166) | (730) | |||||||
Total costs and expenses | 5,653 | 6,132 | 17,347 | 18,304 | |||||||
Operating loss | (624) | (382) | (1,261) | (461) | |||||||
Interest expense | (105) | (74) | (289) | (249) | |||||||
Interest and investment income (loss) | (8) | 17 | (25) | (27) | |||||||
Loss before income taxes | (737) | (439) | (1,575) | (737) | |||||||
Income tax (expense) benefit | (11) | (14) | (39) | 189 | |||||||
Net income (loss) | (748) | (453) | (1,614) | (548) | |||||||
Income attributable to noncontrolling interests | 0 | (1) | 0 | (1) | |||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ (748) | $ (454) | $ (1,614) | $ (549) | |||||||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | |||||||||||
Basic loss per share (in USD per share) | $ (6.99) | $ (4.26) | $ (15.10) | $ (5.15) | |||||||
Diluted loss per share (in USD per share) | $ (6.99) | $ (4.26) | $ (15.10) | $ (5.15) | |||||||
Basic weighted average common shares outstanding (in shares) | 107.0 | 106.6 | 106.9 | 106.5 | |||||||
Diluted weighted average common shares outstanding (in shares) | 107.0 | 106.6 | 106.9 | 106.5 | |||||||
|
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Sale-leaseback transaction, rent expense | $ 22 | $ 27 | $ 72 | $ 43 |
Sears Hometown and Outlet Stores, Inc. | ||||
Proceeds from sale of inventory to affiliate | 271 | 315 | 847 | 1,000 |
Lands' End, Inc. | ||||
Revenue from related parties | 15 | 14 | 38 | 45 |
Seritage Growth Properties | ||||
Sale-leaseback transaction, rent expense | 22 | 22 | 64 | 27 |
Sale leaseback transaction, installment expense | $ 17 | $ 17 | $ 51 | $ 22 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (748) | $ (453) | $ (1,614) | $ (548) |
Other comprehensive income | ||||
Pension and postretirement adjustments, net of tax | 64 | 65 | 192 | 196 |
Total other comprehensive income | 64 | 65 | 192 | 196 |
Comprehensive income (loss) | (684) | (388) | (1,422) | (352) |
Comprehensive loss attributable to noncontrolling interests | 0 | (1) | 0 | (1) |
Comprehensive loss attributable to Holdings' shareholders | $ (684) | $ (389) | $ (1,422) | $ (353) |
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
|||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Current assets | ||||||||||||||||
Cash and cash equivalents | $ 258 | $ 238 | $ 294 | |||||||||||||
Accounts receivable | [1] | 372 | 419 | 475 | ||||||||||||
Merchandise inventories | 5,032 | 5,172 | 6,208 | |||||||||||||
Prepaid expenses and other current assets | [2] | 304 | 216 | 242 | ||||||||||||
Total current assets | 5,966 | 6,045 | 7,219 | |||||||||||||
Property and equipment (net of accumulated depreciation and amortization of $2,886, $2,925 and $2,960) | 2,392 | 2,631 | 2,668 | |||||||||||||
Goodwill | 269 | 269 | 269 | |||||||||||||
Trade names and other intangible assets | 1,904 | 1,909 | 2,090 | |||||||||||||
Other assets | 334 | 483 | 510 | |||||||||||||
TOTAL ASSETS | 10,865 | 11,337 | 12,756 | |||||||||||||
Current liabilities | ||||||||||||||||
Short-term borrowings | [3] | 618 | 797 | 686 | ||||||||||||
Current portion of long-term debt and capitalized lease obligations | [4] | 594 | 71 | 71 | ||||||||||||
Merchandise payables | 1,556 | 1,574 | 2,295 | |||||||||||||
Other current liabilities | [5] | 1,848 | 1,925 | 1,927 | ||||||||||||
Unearned revenues | 759 | 787 | 793 | |||||||||||||
Other taxes | 355 | 284 | 324 | |||||||||||||
Total current liabilities | 5,730 | 5,438 | 6,096 | |||||||||||||
Long-term debt and capitalized lease obligations | [6] | 3,087 | 2,108 | 2,111 | ||||||||||||
Pension and postretirement benefits | 1,997 | 2,206 | 2,133 | |||||||||||||
Deferred gain on sale-leaseback | 656 | 753 | 775 | |||||||||||||
Sale-leaseback financing obligation | 164 | 164 | 164 | |||||||||||||
Other long-term liabilities | 1,716 | 1,731 | 1,811 | |||||||||||||
Long-term deferred tax liabilities | 890 | 893 | 959 | |||||||||||||
Total Liabilities | 14,240 | 13,293 | 14,049 | |||||||||||||
Commitments and contingencies | ||||||||||||||||
DEFICIT | ||||||||||||||||
Total Deficit | (3,375) | (1,956) | (1,293) | |||||||||||||
TOTAL LIABILITIES AND DEFICIT | $ 10,865 | $ 11,337 | $ 12,756 | |||||||||||||
|
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Accumulated depreciation and amortization | $ 2,886,000,000 | $ 2,960,000,000 | $ 2,925,000,000 | |||||||
Prepaid expenses and other current assets | [1] | 304,000,000 | 216,000,000 | 242,000,000 | ||||||
Unsecured commercial paper, outstanding borrowings | 249,000,000 | 0 | 9,000,000 | |||||||
Long-term debt and capitalized lease obligations | [2] | 3,087,000,000 | 2,108,000,000 | 2,111,000,000 | ||||||
Sears Hometown and Outlet Stores, Inc. | ||||||||||
Due from affiliate, current | 20,000,000 | 51,000,000 | 85,000,000 | |||||||
Lands' End, Inc. | ||||||||||
Due from affiliate, current | 4,000,000 | |||||||||
Payable to related party | 1,000,000 | 1,000,000 | ||||||||
Seritage Growth Properties | ||||||||||
Due from affiliate, current | 14,000,000 | 7,000,000 | 8,000,000 | |||||||
Affiliated Entity | ||||||||||
Unsecured commercial paper, outstanding borrowings | 249,000,000 | |||||||||
Long-term debt and capitalized lease obligations | [3] | 1,200,000,000 | 603,000,000 | 629,000,000 | ||||||
Loan Facility, Maturity July 2017 | Secured Loan Facility | ||||||||||
Debt instrument, face amount | 500,000,000 | |||||||||
Loan Facility, Maturity July 2017 | Secured Loan Facility | Affiliated Entity | ||||||||||
Debt instrument, face amount | $ 216,000,000 | |||||||||
Prepaid Expenses and Other Current Assets | Seritage Growth Properties | ||||||||||
Prepaid expenses and other current assets | [1] | $ 9,000,000 | $ 9,000,000 | |||||||
|
Condensed Consolidated Statements of Deficit (Unaudited) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | $ (1,956) | $ (945) | ||
Comprehensive loss | ||||
Net loss | $ (748) | $ (453) | (1,614) | (548) |
Pension and postretirement adjustments, net of tax | 64 | 65 | 192 | 196 |
Comprehensive income (loss) | (684) | (388) | (1,422) | (352) |
Stock awards | (1) | 0 | ||
Associate stock purchase | 6 | 4 | ||
Distribution to noncontrolling interest | (2) | |||
Ending Balance | $ (3,375) | $ (1,293) | $ (3,375) | $ (1,293) |
Common Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 107 | 107 | ||
Beginning Balance | $ 1 | $ 1 | ||
Comprehensive loss | ||||
Ending Balance (in shares) | 107 | 107 | 107 | 107 |
Ending Balance | $ 1 | $ 1 | $ 1 | $ 1 |
Treasury Stock | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (5,928) | (5,949) | ||
Comprehensive loss | ||||
Stock awards | 19 | 11 | ||
Associate stock purchase | 6 | 4 | ||
Ending Balance | (5,903) | (5,934) | (5,903) | (5,934) |
Capital in Excess of Par Value | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 9,173 | 9,189 | ||
Comprehensive loss | ||||
Stock awards | (20) | (11) | ||
Ending Balance | 9,153 | 9,178 | 9,153 | 9,178 |
Retained Earnings (Deficit) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (3,291) | (2,162) | ||
Comprehensive loss | ||||
Net loss | (1,614) | (549) | ||
Ending Balance | (4,905) | (2,711) | (4,905) | (2,711) |
Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | (1,918) | (2,030) | ||
Comprehensive loss | ||||
Pension and postretirement adjustments, net of tax | 192 | 196 | ||
Ending Balance | (1,726) | (1,834) | (1,726) | (1,834) |
Noncontrolling Interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance | 7 | 6 | ||
Comprehensive loss | ||||
Net loss | 1 | |||
Distribution to noncontrolling interest | (2) | |||
Ending Balance | $ 5 | $ 7 | $ 5 | $ 7 |
BASIS OF PRESENTATION |
9 Months Ended |
---|---|
Oct. 29, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Sears Holdings Corporation ("Holdings") is the parent company of Kmart Holding Corporation ("Kmart") and Sears, Roebuck and Co. ("Sears"). Holdings (together with its subsidiaries, "we," "us," "our," or the "Company") was formed as a Delaware corporation in 2004 in connection with the merger of Kmart and Sears (the "Merger"), on March 24, 2005. We are an integrated retailer with 1,503 full-line and specialty retail stores in the United States, operating through Kmart and Sears. We operate under two reportable segments: Kmart and Sears Domestic. These interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the interim period are not necessarily indicative of the results that may be expected for the full fiscal year. The retail business is seasonal in nature, and we generate a high proportion of our revenues and operating cash flows during the fourth quarter of our fiscal year, which includes the holiday season. These interim financial statements and related notes should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2016. Depreciation Expense Depreciation expense included within depreciation and amortization reported on the Condensed Consolidated Statements of Operations was $90 million and $93 million for the 13 week periods ended October 29, 2016 and October 31, 2015, respectively, and $274 million and $325 million for the 39 week periods ended October 29, 2016 and October 31, 2015, respectively. Vendor Credits During the 39 week period ended October 31, 2015, the Company received $126 million related to one-time credits from vendors associated with prior supply arrangements, which have been reflected as a credit within cost of sales, buying and occupancy on the Condensed Consolidated Statement of Operations. 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 support its operations and meet its obligations. During 2016, the Company closed the $750 million Senior Secured Term Loan (the "2016 Term Loan") maturing in July 2020, as discussed in Note 2, and received approximately $722 million in net proceeds. The Company entered into a $500 million committed secured loan facility (the "Secured Loan Facility") maturing in July 2017, as also discussed in Note 2, and received net proceeds of approximately $485 million. The Company also entered into a $300 million Second Lien Credit Agreement (the “Second Lien Term Loan”) maturing in 2020 which generated net proceeds of approximately $291 million, as discussed in Note 2. Additionally, the Company generated over $270 million in cash proceeds from the sale of real estate and other asset sales. The funds received from these actions were used to reduce outstanding borrowings under the Company's asset-based revolving credit facility and for general corporate purposes. In addition to the previously described actions taken to date in 2016, we expect to pursue other near-term actions to support our operations, meet our obligations and improve liquidity. These additional actions may include further expense reductions, additional debt financing, generating liquidity through our previously announced intention to explore alternatives for our Kenmore®, Craftsman® and DieHard® brands and our Sears Home Services business by evaluating potential partnerships or other transactions that could expand distribution of our brands and service offerings to realize significant growth, or other asset sales. Our Amended Domestic Credit Agreement discussed in Note 2 provides us up to $500 million of "FILO" ("first in last out") loan capacity under the credit agreement and up to $2.0 billion of second lien loan capacity (of which $604 million is currently utilized) outside the credit agreement, all depending on the applicable and available borrowing base as defined in our applicable debt agreements, as well as our ability to secure commitments from lenders. We also have the ability to obtain longer-term secured or unsecured financing maturing outside of the credit facility maturity date which would not be subject to borrowing base limitations (see Note 2). We believe that our liquidity needs will be satisfied by the actions discussed above; however, we cannot predict the outcome of any actions to generate liquidity, whether such actions would generate the expected liquidity as currently planned, or the availability of additional debt financing. The specific actions taken or assets involved, the timing, and the overall amount will depend on a variety of factors, including market conditions, interest in specific assets, valuations of those assets and our underlying operating performance. If we continue to experience operating losses and we are not able to generate additional liquidity through the mechanisms described above or through some combination of other actions, we may not be able to access additional funds under our Amended Domestic Credit Agreement and we might need to secure additional sources of funds, which may or may not be available to us. Additionally, a failure to generate additional liquidity could negatively impact our access to inventory or services that are important to the operation of our business. Moreover, if the borrowing base (as calculated pursuant to the indenture) falls below the principal amount of the notes plus the principal amount of any other indebtedness for borrowed money that is secured by liens on the collateral for the notes on the last day of any two consecutive quarters, it could trigger an obligation to repurchase notes in an amount equal to such deficiency. Sears Canada At each of October 29, 2016, October 31, 2015 and January 30, 2016, the Company was the beneficial holder of approximately 12 million, or 12%, of the common shares of Sears Canada. Our equity method investment in Sears Canada was $23 million, $86 million and $52 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively, and is included within other assets on the Condensed Consolidated Balance Sheets. The fair value of our equity method investment in Sears Canada was determined based on quoted market prices for its common stock. Our equity method investment in Sears Canada is valued using Level 1 measurements as defined in Note 5 of our Annual Report on Form 10-K for the fiscal year ended January 30, 2016. |
BORROWINGS |
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BORROWINGS | BORROWINGS Total borrowings were as follows:
The fair value of long-term debt, excluding capitalized lease obligations, was $3.6 billion at October 29, 2016, $2.2 billion at October 31, 2015 and $1.9 billion at January 30, 2016. The fair value of our debt was estimated based on quoted market prices for the same or similar issues or on current rates offered to us for debt of the same remaining maturities. Our long-term debt instruments are valued using Level 2 measurements as defined in Note 5 of our Annual Report on Form 10-K for the fiscal year ended January 30, 2016. Unsecured Commercial Paper We borrow through the commercial paper markets. At October 29, 2016 and October 31, 2015, we had outstanding commercial paper borrowings of $249 million and $9 million, respectively, while at January 30, 2016, we had no commercial paper borrowings outstanding. The carrying value of commercial paper, net of remaining discount, was $248 million and $9 million at October 29, 2016 and October 31, 2015, respectively. Secured Short-Term Loan On September 15, 2014, the Company, through Sears, Sears Development Co. and Kmart Corporation ("Short-Term Borrowers"), entities wholly-owned and controlled, directly or indirectly by the Company, entered into a $400 million secured short-term loan (the "Short-Term Loan") with JPP II, LLC and JPP, LLC (together, the "Short-Term Lender"), entities affiliated with ESL. The first $200 million of the Short-Term Loan was funded at the closing on September 15, 2014 and the remaining $200 million was funded on September 30, 2014. Proceeds of the Short-Term Loan were used for general corporate purposes. The Short-Term Loan was originally scheduled to mature on December 31, 2014. As permitted by the Short-Term Loan agreement, the Company paid an extension fee equal to 0.5% of the principal amount to extend the maturity date to February 28, 2015. The Short-Term Loan had an annual base interest rate of 5%. The Short-Term Borrowers paid an upfront fee of 1.75% of the full principal amount. The Short-Term Loan was guaranteed by the Company and was secured by a first priority lien on certain real properties owned by the Short-Term Borrowers. On February 25, 2015, we entered into an agreement effective February 28, 2015, to amend and extend the $400 million secured short-term loan. Under the terms of the amendment, we repaid $200 million of the $400 million on March 2, 2015 and the remaining $200 million on June 1, 2015, resulting in no balance outstanding at October 29, 2016, October 31, 2015 or January 30, 2016. During the 39 week period ended October 31, 2015, the Short-Term Borrowers paid interest of $6 million to the Short-Term Lender. Secured Loan Facility On April 8, 2016, the Company, through Sears, Roebuck and Co., Sears Development Co., Innovel Solutions, Inc., Big Beaver of Florida Development, LLC and Kmart Corporation (collectively, "Secured Loan Borrowers"), entities wholly-owned and controlled, directly or indirectly by the Company, obtained a $500 million secured loan facility (the "Secured Loan Facility") from JPP, LLC, JPP II, LLC, and Cascade Investment, LLC (collectively, the "Secured Loan Lenders"). JPP, LLC and JPP II, LLC are entities affiliated with ESL. The first $250 million of the Secured Loan Facility was funded on April 8, 2016 and the remaining $250 million was funded on April 22, 2016. The Secured Loan Facility has a maturity date of July 7, 2017, and is included within current portion of long-term debt on the Condensed Consolidated Balance Sheets at October 29, 2016. The Company used the proceeds of the Secured Loan Facility to reduce outstanding borrowings under the Company's asset-based revolving credit facility and for general corporate purposes. The carrying value of the secured loan facility, net of the remaining debt issuance costs, was $492 million at October 29, 2016. The Secured Loan Facility has an annual base interest rate of 8%, with accrued interest payable monthly during the term of the Secured Loan Facility. The Secured Loan Borrowers paid an upfront commitment fee equal to 1.0% of the full principal amount of the Secured Loan Facility and also are required to pay a funding fee equal to 1.0% of the amounts drawn under the Secured Loan Facility at the time such amounts are drawn. If amounts remain outstanding or committed under the Secured Loan Facility after nine months, a delayed origination fee equal to 0.5% of such amounts becomes payable, and if amounts remain outstanding or committed under the Secured Loan Facility after 12 months, an additional delayed origination fee equal to 0.5% of such amounts becomes payable. The Secured Loan Facility is guaranteed by the Company and is secured by a first priority lien on 21 real properties owned by the Secured Loan Borrowers. The Secured Loan Facility includes customary representations and warranties, indemnities and covenants, including with respect to the condition and maintenance of the real property collateral. The Secured Loan Facility has customary events of default, including (subject to certain materiality thresholds and grace periods) payment default, failure to comply with covenants, material inaccuracy of representation or warranty, and bankruptcy or insolvency proceedings. If there is an event of default, the Secured Loan Lenders may declare all or any portion of the outstanding indebtedness to be immediately due and payable, exercise any rights they might have under any of the Secured Loan Facility documents (including against the collateral), and require the Secured Loan Borrowers to pay a default interest rate equal to the greater of (i) 2.5% in excess of the base interest rate and (ii) the prime rate plus 1%. The Loan Facility may be prepaid at any time in whole or in part, without penalty or premium. Domestic Credit Agreement During the first quarter of 2011, Sears Roebuck Acceptance Corporation ("SRAC"), Kmart Corporation (together with SRAC, the "Borrowers") and Holdings entered into an amended credit agreement (the "Domestic Credit Agreement"). On October 2, 2013, Holdings and the Borrowers entered into a First Amendment (the "Amendment") to the Domestic Credit Agreement with a syndicate of lenders. Pursuant to the Amendment, the Borrowers borrowed $1.0 billion under a new senior secured term loan facility (the "Term Loan"). On July 21, 2015, the Borrowers and Holdings entered into an amended and restated credit agreement (the "Amended Domestic Credit Agreement") with a syndicate of lenders that amended and restated the then-existing Domestic Credit Agreement, and on April 8, 2016, the Amended Domestic Credit Agreement was further amended in connection with the 2016 Term Loan as described below. The Amended Domestic Credit Agreement provides a $3.275 billion asset-based revolving credit facility (the "Revolving Facility") with a $1.0 billion letter of credit sub-facility. The maturity date for $1.971 billion of the Revolving Facility has been extended to July 20, 2020, while $1.304 billion expired on April 8, 2016. The Amended Domestic Credit Agreement also governs the Term Loan, which retains its maturity date of June 30, 2018. The Amended Domestic Credit Agreement includes an accordion feature that allows the Borrowers to use, subject to borrowing base requirements, existing collateral for the facility to obtain up to $1.0 billion of additional borrowing capacity, of which $750 million was utilized for the 2016 Term Loan (described below). The Amended Domestic Credit Agreement also includes a "FILO" ("first in last out") tranche feature that allows an additional $500 million of borrowing capacity and increased Holdings' ability to undertake short-term borrowings from $500 million to $750 million. Revolving advances under the Amended Domestic Credit Agreement bear interest at a rate equal to, at the election of the Borrowers, either the London Interbank Offered Rate ("LIBOR") or a base rate, in either case plus an applicable margin dependent on Holdings' consolidated leverage ratio (as measured under the Amended Domestic Credit Agreement). The margin with respect to borrowings under the extended commitments ranges from 3.25% to 3.75% for LIBOR loans and from 2.25% to 2.75% for base rate loans. The margin with respect to borrowings under the non-extended commitments remains 2.00% to 2.50% for LIBOR loans and 1.00% to 1.50% for base rate loans. The Amended Domestic Credit Agreement also provides for the payment of fees with respect to issued and undrawn letters of credit at a rate equal to the margin applicable to LIBOR loans and a commitment fee with respect to unused amounts of the Revolving Facility at a rate, depending on facility usage, between 0.375% to 0.625%, per annum, with a minimum of 0.50% applicable to commitments under the extended tranche. From and after April 8, 2016, such commitment fees with respect to the extended tranche are a flat 0.50%. The Revolving Facility is in place as a funding source for general corporate purposes and is secured by a first lien on substantially all of our domestic inventory and credit card and pharmacy receivables, and is subject to a borrowing base formula to determine availability. The Revolving Facility is guaranteed by all domestic subsidiaries of Holdings that own inventory or credit card or pharmacy receivables. The Revolving Facility also permits aggregate second lien indebtedness of up to $2.0 billion, of which $604 million in second lien notes were outstanding at October 29, 2016, resulting in $1.4 billion of permitted second lien indebtedness, subject to limitations imposed by a borrowing base requirement under the indenture that governs our 6 5/8% senior secured notes due 2018. The Term Loan bears interest at a rate equal to, at the election of the Borrowers, either (1) LIBOR (subject to a 1.00% LIBOR floor) or (2) the highest of (x) the prime rate of the bank acting as agent of the syndicate of lenders, (y) the federal funds rate plus 0.50% and (z) the one-month LIBOR rate plus 1.00% (the highest of (x), (y) and (z), the "Base Rate"), plus an applicable margin for LIBOR loans of 4.50% and for Base Rate loans of 3.50%. Currently, the Borrowers are required to repay the Term Loan in quarterly installments of $2.5 million, with the remainder of the Term Loan maturing June 30, 2018. Additionally, the Borrowers are required to make certain mandatory repayments of the Term Loan from excess cash flow (as defined in the Amended Domestic Credit Agreement). The Term Loan may be prepaid in whole or part without penalty. The Term Loan is secured by the same collateral as the Revolving Facility on a pari passu basis with the Revolving Facility, and is guaranteed by the same subsidiaries of the Company that guarantee the Revolving Facility. At October 29, 2016, October 31, 2015 and January 30, 2016, respectively, we had borrowings of $973 million, $983 million and $980 million under the Term Loan, and carrying value, net of the remaining discount and debt issuance costs, of $964 million, $969 million and $968 million. The Amended Domestic Credit Agreement limits our ability to make restricted payments, including dividends and share repurchases, subject to specified exceptions that are available if, in each case, no event of default under the credit facility exists immediately before or after giving effect to the restricted payment. These include exceptions that require that projected availability under the credit facility, as defined, is at least 15%, exceptions that may be subject to certain maximum amounts and an exception that requires that the restricted payment is funded from cash on hand and not from borrowings under the credit facility. Further, the Amended Domestic Credit Agreement includes customary covenants that restrict our ability to make dispositions, prepay debt and make investments, subject, in each case, to various exceptions. The Amended Domestic Credit Agreement also imposes various other requirements, which take effect if availability falls below designated thresholds, including a cash dominion requirement and a requirement that the fixed charge ratio at the last day of any quarter be not less than 1.0 to 1.0. At October 29, 2016, October 31, 2015 and January 30, 2016, we had $370 million, $677 million and $797 million, respectively, of Revolving Facility borrowings and $660 million, $654 million and $652 million, respectively, of letters of credit outstanding under the Revolving Facility. At October 29, 2016, October 31, 2015 and January 30, 2016, the amount available to borrow under the Revolving Facility was $174 million, $963 million and $316 million, respectively, which reflects the effect of the springing fixed charge coverage ratio covenant and the borrowing base limitation. The majority of the letters of credit outstanding are used to provide collateral for our insurance programs. Second Lien Term Loan On September 1, 2016, the Company, SRAC and Kmart Corporation (together with SRAC, the "Second Lien Borrowers") entered into a Second Lien Credit Agreement (the "Second Lien Credit Agreement") with JPP, LLC and JPP II, LLC (together, the "Second Lien Lenders"), entities affiliated with ESL, pursuant to which the Second Lien Borrowers borrowed $300 million under a term loan (the "Second Lien Term Loan"). The Company received net proceeds of $291 million, which were used for general corporate purposes. The maturity date for the Second Lien Term Loan is July 20, 2020 and the Second Lien Term Loan will not amortize. The Second Lien Credit Agreement includes an accordion feature that allows the Second Lien Borrowers to seek to obtain from third parties up to $200 million of additional loans under the Second Lien Credit Agreement on the same terms as the Second Lien Term Loan. The Second Lien Term Loan bears interest at a rate equal to, at the election of the Second Lien Borrowers, either LIBOR (subject to a 1.00% floor) or a specified prime rate ("Base Rate"), in either case plus an applicable margin. The margin with respect to the Second Lien Term Loan is 7.50% for LIBOR loans and 6.50% for Base Rate loans. The Company’s obligations under the Second Lien Credit Agreement are secured on a pari passu basis with the Company’s obligations under that certain Indenture, dated as of October 12, 2010, pursuant to which the Company issued its Senior Secured Notes (defined below). The collateral includes inventory, receivables and other related assets of the Company and its subsidiaries which are obligated on the Second Lien Term Loan and the Senior Secured Notes. The Second Lien Credit Agreement is guaranteed by all domestic subsidiaries of the Company that guarantee the Company’s obligations under its existing Revolving Facility. The Second Lien Credit Agreement includes representations and warranties, covenants and other undertakings, which representations and warranties, covenants and other undertakings and events of default that are substantially similar to those contained in the Amended Domestic Credit Agreement. The carrying value of the Second Lien Term Loan, net of the remaining discount and debt issuance costs, was $291 million at October 29, 2016. 2016 Term Loan On April 8, 2016, the Company, SRAC, and Kmart Corporation (together with SRAC, the "ABL Borrowers") entered into an amendment to the Amended Domestic Credit Agreement, with a syndicate of lenders, including Bank of America, N.A., as agent. The amendment to the Amended Domestic Credit Agreement was executed in connection with the closing of the Company’s previously announced $750 million Senior Secured Term Loan under the Amended Domestic Credit Agreement (the "2016 Term Loan"). Amounts borrowed pursuant to the 2016 Term Loan will bear interest at a rate equal to the London Interbank Offered Rate ("LIBOR") plus 750 basis points, subject to a 1.00% LIBOR floor. The Company received approximately $722 million in net proceeds from the 2016 Term Loan, which proceeds were used to reduce outstanding borrowings under its asset-based revolving credit facility. The 2016 Term Loan has a maturity date of July 20, 2020, which is the same maturity date as the Company’s $1.971 billion revolving credit facility commitments, and does not amortize. The amendment provides for a premium of 2% of the aggregate principal amount of the 2016 Term Loan prepaid on or prior to April 8, 2017 and 1% of the aggregate principal amount of the 2016 Term Loan prepaid after April 8, 2017 and on or prior to April 8, 2018. The obligations under the Amended Domestic Credit Agreement, including the 2016 Term Loan, are secured by a first lien on substantially all of the domestic inventory and credit card and pharmacy receivables of the Company and its subsidiaries and aggregate advances under the Amended Domestic Credit Agreement are subject to a borrowing base formula. The Amended Domestic Credit Agreement is guaranteed by all domestic subsidiaries of the Company that own inventory or credit card or pharmacy receivables. The other material terms of the Amended Domestic Credit Agreement were not modified by the amendment. The carrying value of the 2016 Term Loan, net of the remaining discount and debt issuance costs, was $725 million at October 29, 2016. Senior Secured Notes In October 2010, we sold $1.0 billion aggregate principal amount of senior secured notes (the "Senior Secured Notes"), which bear interest at 6 5/8% per annum and mature on October 15, 2018. Concurrent with the closing of the sale of the Senior Secured Notes, the Company sold $250 million aggregate principal amount of Senior Secured Notes to the Company's domestic pension plan in a private placement, none of which remain in the domestic pension plan as a result of the Tender Offer discussed below. The Senior Secured Notes are guaranteed by certain subsidiaries of the Company and are secured by a security interest in certain assets consisting primarily of domestic inventory and credit card receivables (the "Collateral"). The lien that secures the Senior Secured Notes is junior in priority to the lien on such assets that secures obligations under the Amended Domestic Credit Agreement, as well as certain other first priority lien obligations. The Company used the net proceeds of this offering to repay borrowings outstanding under a previous domestic credit agreement on the settlement date and to fund the working capital requirements of our retail businesses, capital expenditures and for general corporate purposes. The indenture under which the Senior Secured Notes were issued contains restrictive covenants that, among other things, (1) limit the ability of the Company and certain of its domestic subsidiaries to create liens and enter into sale and leaseback transactions and (2) limit the ability of the Company to consolidate with or merge into, or sell other than for cash or lease all or substantially all of its assets to, another person. The indenture also provides for certain events of default, which, if any were to occur, would permit or require the principal and accrued and unpaid interest on all the then outstanding Senior Secured Notes to be due and payable immediately. Generally, the Company is required to offer to repurchase all outstanding Senior Secured Notes at a purchase price equal to 101% of the principal amount if the borrowing base (as calculated pursuant to the indenture) falls below the principal value of the Senior Secured Notes plus any other indebtedness for borrowed money that is secured by liens on the Collateral for two consecutive quarters or upon the occurrence of certain change of control triggering events. The Company may call the Senior Secured Notes at a premium based on the "Treasury Rate" as defined in the indenture, plus 50 basis points. On September 6, 2011, we completed our offer to exchange the Senior Secured Notes held by nonaffiliates for a new issue of substantially identical notes registered under the Securities Act of 1933, as amended. On August 3, 2015, the Company commenced a tender offer (the "Tender Offer") to purchase for cash up to $1.0 billion principal amount of its Senior Secured Notes, which expired on August 28, 2015. Approximately $936 million principal amount of the Senior Secured Notes were validly tendered and not validly withdrawn in the Tender Offer. Holders who validly tendered and did not validly withdraw Senior Secured Notes at or prior to the early tender date of August 14, 2015 received total consideration of $990 per $1,000 principal amount of Senior Secured Notes that were accepted for purchase, which included an early tender payment of $30 per $1,000 principal amount of Senior Secured Notes accepted for purchase, plus accrued and unpaid interest up to, but excluding, the settlement date. Holders who validly tendered and did not validly withdraw Senior Secured Notes after the early tender date but at or prior to the expiration date of August 28, 2015 received total consideration of $960 per $1,000 principal amount of Senior Secured Notes accepted for purchase, plus accrued and unpaid interest up to, but excluding, the settlement date. We accounted for the Tender Offer in accordance with accounting standards applicable to extinguishment of liabilities and debt modifications and extinguishments. Accordingly, we de-recognized the net carrying amount of Senior Secured Notes of $929 million (comprised of the principal amount of $936 million, offset by unamortized debt issuance costs and discount of $7 million), and the reacquisition cost was $929 million. The carrying value of Senior Secured Notes, net of the remaining discount and debt issuance costs, was $302 million at each of October 29, 2016, October 31, 2015 and January 30, 2016, respectively. Senior Unsecured Notes On October 20, 2014, the Company announced its board of directors had approved a rights offering allowing its stockholders to purchase up to $625 million in aggregate principal amount of 8% senior unsecured notes due 2019 and warrants to purchase shares of its common stock. The subscription rights were distributed to all stockholders of the Company as of October 30, 2014, the record date for this rights offering, and every stockholder had the right to participate on the same terms in accordance with its pro rata ownership of the Company's common stock, except that holders of the Company's restricted stock that was unvested as of the record date received cash awards in lieu of subscription rights. This rights offering closed on November 18, 2014 and was oversubscribed. Accordingly, on November 21, 2014, the Company issued $625 million aggregate original principal amount of 8% senior unsecured notes due 2019 (the "Senior Unsecured Notes") and received proceeds of $625 million which were used for general corporate purposes. The Senior Unsecured Notes are the unsecured and unsubordinated obligations of the Company and rank equal in right of payment with the existing and future unsecured and unsubordinated indebtedness of the Company. The Senior Unsecured Notes bear interest at a rate of 8% per annum and the Company will pay interest semi-annually on June 15 and December 15 of each year. The Senior Unsecured Notes are not guaranteed. We accounted for the Senior Unsecured Notes in accordance with accounting standards applicable to distinguishing liabilities from equity and debt with conversion and other options. Accordingly, we allocated the proceeds received for the Senior Unsecured Notes based on the relative fair values of the Senior Unsecured Notes and warrants, which resulted in a discount to the notes of approximately $278 million. The fair value of the Senior Unsecured Notes and warrants was estimated based on quoted market prices for the same issues using Level 1 measurements as defined in Note 5 of our Annual Report on Form 10-K for the fiscal year ended January 30, 2016. The discount is being amortized over the life of the Senior Unsecured Notes using the effective interest method with an effective interest rate of 11.55%. Approximately $32 million and $25 million of the discount was amortized during the 39 week periods ended October 29, 2016 and October 31, 2015, respectively. The remaining discount was approximately $207 million, $248 million and $238 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively. The carrying value of the Senior Unsecured Notes, net of the remaining discount and debt issuance costs, was approximately $416 million, $373 million and $383 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively. Wholly owned Insurance Subsidiary and Intercompany Securities We have numerous types of insurable risks, including workers' compensation, product and general liability, automobile, warranty, asbestos and environmental claims and the extended service contracts we sell to our customers. In addition, we provide credit insurance to third party creditors of the Company to mitigate their credit risk with the Company. The associated risks are managed through Holdings' wholly owned insurance subsidiary, Sears Reinsurance Company Ltd. ("Sears Re"), a Bermuda Class 3 insurer. In accordance with applicable insurance regulations, Sears Re holds marketable securities to support the insurance coverage it provides. Sears has utilized two securitization structures to issue specific securities in which Sears Re has invested its capital to fund its insurance obligations. In November 2003, Sears formed a Real Estate Mortgage Investment Conduit ("REMIC"). The real estate associated with 125 Full-line stores was contributed to indirect wholly owned subsidiaries of Sears, and then leased back to Sears. The contributed stores were mortgaged and the REMIC issued to wholly owned subsidiaries of Sears (including Sears Re) $1.3 billion (par value) of securities (the "REMIC Securities") that are secured by the mortgages and collateral assignments of the store leases. Payments to the holders on the REMIC Securities are funded by the lease payments. In May 2006, a subsidiary of Holdings contributed the rights to use the Kenmore®, Craftsman® and DieHard® trademarks in the U.S. and its possessions and territories to KCD IP, LLC, an indirect wholly owned subsidiary of Holdings. KCD IP, LLC has licensed the use of the trademarks to subsidiaries of Holdings, including Sears and Kmart. Asset-backed securities with a par value of $1.8 billion (the "KCD Securities") were issued by KCD IP, LLC and subsequently purchased by Sears Re, the collateral for which includes the trademark rights and royalty income. Payments to the holders on the KCD Securities are funded by the royalty payments. The issuers of the REMIC Securities and KCD Securities and the owners of these real estate and trademark assets are bankruptcy remote, special purpose entities that are indirect wholly owned subsidiaries of Holdings. Cash flows received from rental streams and licensing fee streams paid by Sears, Kmart, other affiliates and third parties, are used for the payment of fees and interest on these securities. In the fourth quarter of fiscal 2013, Holdings contributed all of the outstanding capital stock of Sears Re to SRe Holding Corporation, a direct wholly owned subsidiary of Holdings. Sears Re thereafter reduced its excess statutory capital through the distribution of all REMIC Securities held by it to SRe Holding Corporation. Since the inception of the REMIC and KCD IP, LLC, the REMIC Securities and the KCD Securities have been entirely held by our wholly owned consolidated subsidiaries. At each of October 29, 2016, October 31, 2015 and January 30, 2016, the net book value of the securitized trademark rights was approximately $1.0 billion. The net book value of the securitized real estate assets was approximately $0.6 billion at each of October 29, 2016, October 31, 2015 and January 30, 2016. On March 18, 2016, the Company announced it and certain of its subsidiaries have entered into a five-year pension plan protection and forbearance agreement (the "Definitive Agreement") with the Pension Benefit Guaranty Corporation ("PBGC") implementing the terms of the previously announced term sheet, dated as of September 4, 2015, entered into by the Company and PBGC. Under the terms of the Definitive Agreement, the Company will continue to protect, or "ring-fence," pursuant to customary covenants, the assets of certain special purpose subsidiaries (the "Relevant Subsidiaries") holding real estate and/or intellectual property assets. Also under the Definitive Agreement, the Relevant Subsidiaries have granted PBGC a springing lien on the ring-fenced assets, which lien will be triggered only by (a) failure to make required contributions to the Company’s pension plan (the "Plan"), (b) prohibited transfers of ownership interests in the Relevant Subsidiaries, (c) termination events with respect to the Plan, and (d) bankruptcy events with respect to the Company or certain of its material subsidiaries. Trade Creditor Matters We have ongoing discussions concerning our liquidity and financial position with the vendor community and third parties that offer various credit protection services to our vendors. The topics discussed have included such areas as pricing, payment terms and ongoing business arrangements. As of the date of this report, we have not experienced any significant disruption in our access to merchandise or our operations. |
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS | STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS Store Closings and Severance We closed 82 stores in our Kmart segment and seven stores in our Sears Domestic segment we previously announced would close during the 13 week period ended October 29, 2016, and 140 stores in our Kmart segment and 30 stores in our Sears Domestic segment during the 39 week period ended October 29, 2016. We made the decision to close 65 stores in our Kmart segment and five stores in our Sears Domestic segment during the 13 week period ended October 29, 2016, and 160 stores in our Kmart segment and 31 stores in our Sears Domestic segment during the 39 week period ended October 29, 2016. We closed 11 stores in our Kmart segment and three stores in our Sears Domestic segment we previously announced would close during the 13 week period ended October 31, 2015, and 27 stores in our Kmart segment and nine stores in our Sears Domestic segment during the 39 week period ended October 31, 2015. We made the decision to close nine stores in our Kmart segment and two stores in our Sears Domestic segment during the 13 week period ended October 31, 2015, and 31 stores in our Kmart segment and nine stores in our Sears Domestic segment during the 39 week period ended October 31, 2015. In accordance with accounting standards governing costs associated with exit or disposal activities, expenses related to future rent payments for which we no longer intend to receive any economic benefit are accrued for when we cease to use the leased space and have been reduced for any income that we believe can be realized through sub-leasing the leased space. We expect to record additional charges of approximately $20 million during 2016 related to stores that we had previously made the decision to close, but have not yet closed. Store closing costs and severance recorded for the 13- and 39- week periods ended October 29, 2016 and October 31, 2015 were as follows:
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Store closing cost and severance accruals of $178 million, $158 million and $180 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively, were as follows:
Long-Lived Assets In accordance with accounting standards governing the impairment or disposal of long-lived assets, we performed an impairment test of certain of our long-lived assets due to events and changes in circumstances during the 13- and 39- week periods ended October 29, 2016 that indicated an impairment might have occurred. As a result of impairment testing, the Company recorded impairment charges of $3 million, which was recorded in our Kmart segment, during the 13 week period ended October 29, 2016, and $18 million, of which $11 million and $7 million were recorded within the Sears Domestic and Kmart segments, respectively, during the 39 week period ended October 29, 2016. As a result of impairment testing, the Company recorded impairment charges of $17 million, of which $7 million and $10 million were recorded within the Sears Domestic and Kmart segments, respectively, during the 13 week period ended October 31, 2015, and $71 million, of which $59 million and $12 million were recorded within the Sears Domestic and Kmart segments, respectively, during the 39 week period ended October 31, 2015. Real Estate Transactions On April 1, 2015, April 13, 2015 and April 30, 2015, Holdings and General Growth Properties, Inc. ("GGP"), Simon Property Group, Inc. ("Simon") and The Macerich Company ("Macerich"), respectively, announced that they entered into three distinct real estate joint ventures (collectively, the "JVs"). Holdings contributed 31 properties to the JVs where Holdings currently operates stores (the "JV properties"), in exchange for a 50% interest in the JVs and $429 million in cash ($426 million, net of closing costs) (the "JV transactions"). The JV transactions valued the JV properties at $858 million in the aggregate. On July 7, 2015, Holdings completed its rights offering and sale-leaseback transaction (the "Seritage transaction") with Seritage Growth Properties ("Seritage"), a recently formed, independent publicly traded real estate investment trust ("REIT"). As part of the Seritage transaction, Holdings sold 235 properties to Seritage (the "REIT properties") along with Holdings' 50% interest in the JVs. Holdings received aggregate gross proceeds from the Seritage transaction of $2.7 billion ($2.6 billion, net of closing costs). The Seritage transaction valued the REIT properties at $2.3 billion in the aggregate. In connection with the Seritage transaction and JV transactions, Holdings has entered into agreements with Seritage and the JVs under which Holdings leases 255 of the properties (the "Master Leases"), with the remaining properties being leased by Seritage to third parties. During the 39 week period ended October 29, 2016, Holdings closed three stores pursuant to recapture notices from Seritage. Holdings recorded rent expense of $22 million and $27 million in cost of sales, buying and occupancy for the 13 week periods ended October 29, 2016 and October 31, 2015, respectively, and $72 million and $43 million in cost of sales, buying and occupancy for the 39 week periods ended October 29, 2016 and October 31, 2015, respectively. Rent expense consisted of straight-line rent expense offset by amortization of deferred gain on sale-leaseback, as shown in the tables below.
We accounted for the Seritage transaction and JV transactions in accordance with accounting standards applicable to real estate sales and sale-leaseback transactions. We determined that the Seritage transaction qualifies for sales recognition and sale-leaseback accounting. Because of our initial ownership interest in the JVs and continuing involvement in the properties, we determined that the JV transactions, which occurred in the first quarter of 2015, did not initially qualify for sale-leaseback accounting and, therefore, accounted for the JV transactions as financing transactions and, accordingly, recorded a sale-leaseback financing obligation of $426 million and continued to report the real property assets on our Condensed Consolidated Balance Sheets at May 2, 2015. Upon the sale of our 50% interest in the JVs to Seritage, the continuing involvement through an ownership interest in the buyer-lessor no longer existed, and Holdings determined that the JV transactions then qualified for sales recognition and sale-leaseback accounting, with the exception of four properties for which we still have continuing involvement as a result of an obligation to redevelop the stores for a third-party tenant and pay rent on behalf of the third-party tenant until it commences rent payments to the JVs. With the exception of the four properties that have continuing involvement, in accordance with accounting standards related to sale-leaseback transactions, Holdings recognized any loss on sale immediately, any gain on sale in excess of the present value of minimum lease payments immediately, and any remaining gain was deferred and will be recognized in proportion to the related rent expense, which is a component of cost of sales, buying and occupancy, on the Condensed Consolidated Statement of Operations, over the lease term. Holdings received aggregate net proceeds of $3.1 billion for the Seritage transaction and JV transactions. The carrying amount of property and equipment, net and lease balances related to third-party leases that were assigned to Seritage and the JVs was $1.5 billion at July 7, 2015, of which $1.3 billion was recorded in our Sears Domestic segment and $175 million in our Kmart segment. Accordingly, during the 13- and 39- week periods ended October 31, 2015, Holdings recognized an immediate net gain of $508 million within gain on sales of assets on the Consolidated Statement of Operations for 2015, comprised of a gain for the amount of gain on sale in excess of the present value of minimum lease payments, offset by a loss for properties where the fair value was less than the carrying value and the write-off of lease balances related to third-party leases that were assigned to Seritage and the JVs, as shown in the table below.
The remaining gain of $894 million was deferred and will be recognized in proportion to the related rent expense over the lease term. At October 29, 2016, $97 million of the deferred gain on sale-leaseback is classified as current within other current liabilities. At both October 31, 2015 and January 30, 2016, $89 million of the deferred gain on sale-leaseback is classified as current within other current liabilities on the Condensed Consolidated Balance Sheets. At October 29, 2016, October 31, 2015 and January 30, 2016, $656 million, $775 million and $753 million is classified as long-term deferred gain on sale-leaseback on the Condensed Consolidated Balance Sheets. During the 39 week period ended October 29, 2016, Holdings recorded gains of $26 million related to the 100% recapture of three stores that closed pursuant to recapture notices from Seritage, of which $13 million related to the gain that had previously been deferred as we no longer have continuing involvement in those properties, and $13 million related to lease termination proceeds. In addition, the Master Leases provide Seritage and the JVs a recapture right with respect to approximately 50% of the space within the stores at the REIT properties and JV properties (subject to certain exceptions), in addition to all of the automotive care centers, and all outparcels or outlots, as well as certain portions of parking areas and common areas, except as set forth in the Master Leases, for no additional consideration. As space is recaptured pursuant to the recapture right, Holdings' obligation to pay rent is reduced proportionately. Accordingly, Holdings recognizes gains equal to the unamortized portion of the gain that had previously been deferred which exceeds the present value of minimum lease payments, as reduced due to recapture activity. During the 13- and 39- week periods ended October 29, 2016, respectively, Holdings recorded gains as a result of recapture activity of $1 million and $10 million that had previously been deferred. Holdings accounted for the four properties that have continuing involvement as a financing transaction in accordance with accounting standards related to sale-leaseback transactions. Accordingly, Holdings recorded a sale-leaseback financing obligation of $164 million, which is classified as a long-term as sale-leaseback financing obligation on the Condensed Consolidated Balance Sheets at October 29, 2016, October 31, 2015 and January 30, 2016. We continued to report the real property assets of $61 million, $51 million and $56 million at October 29, 2016, October 31, 2015 and January 30, 2016 respectively, on our Condensed Consolidated Balance Sheets, which are included in our Sears Domestic segment. During the 13 week period ended October 29, 2016, we recorded gains of $15 million on the sale of two Sears Full-line stores for which we received $27 million cash proceeds. In connection with the sales of the Sears Full-line stores, we entered into leaseback agreements for up to nine months. During the 39 week period ended October 29, 2016, we also recorded gains on the sales of assets of $12 million recognized on the sale of one distribution center for which we received $23 million of cash proceeds. During the 13 week period ended October 31, 2015, we recorded gains on the sales of assets of $83 million recognized on the sale of one Sears Full-line store for which we received $102 million of cash proceeds, $90 million of which was received during the third quarter of 2014. As the leaseback ended and the remaining cash proceeds of $12 million were received during the 13 week period ended October 31, 2015, we recognized the gain that had previously been deferred. During the 39 week period ended October 31, 2015, we also recorded gains on the sales of assets of $86 million recognized on the sale of two Sears Full-line stores for which we received $96 million of cash proceeds, and $10 million recognized on the surrender and early termination of one Kmart store lease. In connection with one of the Sears Full-line stores, we entered into a leaseback agreement for up to six months. We determined that we have surrendered substantially all of our rights and obligations, and, therefore, immediate gain recognition is appropriate on all of these transactions. |
EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY Earnings per Share The following table sets forth the components used to calculate basic and diluted loss per share attributable to Holdings' shareholders. During the 13- and 39- week periods ended October 31, 2015, warrants, restricted stock awards and restricted stock units, totaling 1.4 million and 6.7 million shares, respectively, were not included in the computation of diluted loss per share attributable to Holdings' shareholders because the effect of their inclusion would have been antidilutive.
Accumulated Other Comprehensive Loss The following table displays the components of accumulated other comprehensive loss:
Pension and postretirement adjustments relate to the net actuarial loss on our pension and postretirement plans recognized as a component of accumulated other comprehensive loss. Income Tax Expense Allocated to Each Component of Other Comprehensive Income Income tax expense allocated to each component of other comprehensive income was as follows:
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BENEFIT PLANS |
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Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFIT PLANS | BENEFIT PLANS Pension and Postretirement Benefit Plans We provide benefits to certain associates who are eligible under various defined benefit pension plans, contributory defined benefit pension plans and other postretirement plans, primarily retiree medical benefits. For purposes of determining the periodic expense of our defined benefit plans, we use the fair value of plan assets as the market related value. The following table summarizes the components of total net periodic benefit expense, recorded within Selling and administrative on the Condensed Consolidated Statements of Operations, for our retirement plans:
Contributions During the 13- and 39- week periods ended October 29, 2016, we made total contributions of $113 million and $261 million, respectively, to our pension and postretirement plans. During the 13- and 39- week periods ended October 31, 2015, we made total contributions of $117 million and $246 million, respectively, to our pension and postretirement plans. We anticipate making aggregate contributions to our defined benefit and postretirement plans of approximately $72 million over the remainder of 2016. Pension Plan Amendment Effective December 1, 2016, the Sears Holdings Pension Plan ("SHC Pension Plan") was amended and split into two separate plans, the SHC Pension Plan No. 1 ("Plan No. 1") and the SHC Pension Plan No. 2 ("Plan No. 2"). In conjunction with the SHC Pension Plan split, the Company has changed the plan year for both Plan No. 1 and Plan No. 2 from a calendar year end to a November 30th year end. |
INCOME TAXES |
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Oct. 29, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES We had gross unrecognized tax benefits of $148 million at October 29, 2016, $142 million at October 31, 2015 and $137 million at January 30, 2016. Of the amount at October 29, 2016, $96 million, would, if recognized, impact our effective tax rate, with the remaining amount being comprised of unrecognized tax benefits related to gross temporary differences or any other indirect benefits. During the 13- and 39- week periods ended October 29, 2016, gross unrecognized tax benefits increased by $4 million and $11 million, respectively, due to state activity. During the 13- and 39- week periods ended October 31, 2015, gross unrecognized tax benefits increased by $4 million and $11 million, respectively, due to state activity. We expect that our unrecognized tax benefits could decrease by as much as $6 million over the next 12 months for tax audit settlements and the expiration of the statute of limitations for certain jurisdictions. We classify interest expense and penalties related to unrecognized tax benefits and interest income on tax overpayments as components of income tax expense. At October 29, 2016, October 31, 2015 and January 30, 2016, the total amount of interest and penalties included in our tax accounts in our Condensed Consolidated Balance Sheet was $62 million ($41 million net of federal benefit), $56 million ($37 million net of federal benefit) and $56 million ($36 million net of federal benefit), respectively. The total amount of net interest expense (net of federal benefit) recognized as part of income tax expense in our Condensed Consolidated Statements of Operations was $1 million and $2 million, respectively, for the 13 week periods ended October 29, 2016 and October 31, 2015, and $4 million and $5 million, respectively, for the 39 week periods ended October 29, 2016 and October 31, 2015. We file income tax returns in both the United States and various foreign jurisdictions. The U.S. Internal Revenue Service ("IRS") has completed its examination of all federal tax returns of Holdings through the 2009 return, and all matters arising from such examinations have been resolved. In addition, Holdings and Sears are under examination by various state, local and foreign income tax jurisdictions for the years 2003 through 2014, and Kmart is under examination by such jurisdictions for the years 2006 through 2014. At the end of 2015, we had a federal and state net operating loss ("NOL") deferred tax asset of $1.6 billion, which will expire predominately between 2019 and 2036. We have credit carryforwards of $832 million, which will expire between 2016 and 2036. In July, 2016, the Company sold shares of an investment for $106 million. The sale resulted in a U.S. taxable gain of $105 million, but no current income tax is payable due to the utilization of NOL attributes of $37 million with a valuation allowance release of the same amount. In connection with the sale-leaseback transaction with Seritage in the second quarter of 2015, along with the JV transactions in the first quarter of 2015, the Company realized a tax benefit of $229 million on the deferred taxes related to the indefinite-life assets associated with the properties sold in the transaction with Seritage and the JV transactions. In addition, the Company incurred a taxable gain of approximately $2.2 billion, taking into account any related party loss disallowance, on these transactions. There was no federal income tax payable resulting from the taxable gain due to the utilization of NOL tax attributes of approximately $863 million with a valuation allowance release of the same amount. However, there was a minor amount of state and city income tax payable of $5 million after the utilization of state and city tax attributes. As a result of all the effects from these transactions, the net valuation allowance release was approximately $500 million. At January 30, 2016, we had a valuation allowance of $4.8 billion to record only the portion of the deferred tax asset that more likely than not will be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted in the future if estimates of future taxable income during the carryforward period are increased, or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth. We will continue to evaluate our valuation allowance as the year progresses for any change in circumstances that causes a change in judgment about the realizability of the deferred tax asset. The application of the requirements for accounting for income taxes in interim periods, after consideration of our valuation allowance, causes a significant variation in the typical relationship between income tax expense and pretax accounting income. As such, for the 13- and 39- week periods ended October 29, 2016, our effective income tax rates were an expense of 1.5% and 2.5%, respectively. Our tax rate continues to reflect the effect of not recognizing the benefit of current period losses in certain domestic jurisdictions where it is not more likely than not that such benefits would be realized. In addition, the 13- and 39- week periods ended October 29, 2016 were negatively impacted by foreign branch taxes and state income taxes. |
SUMMARY OF SEGMENT DATA |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SEGMENT DATA | SUMMARY OF SEGMENT DATA These reportable segment classifications are based on our business formats, as described in Note 1. The Kmart format represents both an operating and reportable segment. The Sears Domestic reportable segment consists of the aggregation of several business formats. These formats are evaluated by our Chief Operating Decision Maker ("CODM") to make decisions about resource allocation and to assess performance. Each of these segments derives its revenues from the sale of merchandise and related services to customers, primarily in the United States. The merchandise and service categories are as follows:
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SUPPLEMENTAL FINANCIAL INFORMATION |
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Supplemental Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Other long-term liabilities at October 29, 2016, October 31, 2015 and January 30, 2016 consisted of the following:
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LEGAL PROCEEDINGS |
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Oct. 29, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS | LEGAL PROCEEDINGS We are a defendant in several lawsuits containing class or collective action allegations in which the plaintiffs are current and former hourly and salaried associates who allege violations of various wage and hour laws, rules and regulations pertaining to alleged misclassification of certain of our employees, the failure to pay overtime and/or the failure to pay for missed meal and rest periods and other payroll violations. The complaints generally seek unspecified monetary damages, injunctive relief, or both. Further, certain of these proceedings are in jurisdictions with reputations for aggressive application of laws and procedures against corporate defendants. We also are a defendant in several putative or certified class action lawsuits in California relating to alleged failure to comply with California laws pertaining to certain operational, marketing and pricing practices. The California laws alleged to have been violated in each of these lawsuits provide the potential for significant statutory penalties. At this time, the Company is not able to either predict the outcome of these lawsuits or reasonably estimate a potential range of loss with respect to the lawsuits. We are subject to various other legal and governmental proceedings and investigations, including some involving the practices and procedures in our more highly regulated businesses. Some matters contain class action allegations, environmental and asbestos exposure allegations and other consumer-based, regulatory or qui tam claims, each of which may seek compensatory, punitive or treble damage claims (potentially in large amounts), as well as other types of relief. Additionally, some of these claims or actions, such as the qui tam claims, have the potential for significant statutory penalties. At this time, the Company is not able to either predict the outcome of these lawsuits or reasonably estimate a potential range of loss with respect to these lawsuits. In May and June of 2015, four shareholder lawsuits were filed in the Delaware Chancery Court, which have since been consolidated into a single action. A consolidated complaint then was filed, naming Holdings, the members of our Board of Directors, ESL Investments, Inc., Seritage, our CEO, and Fairholme, alleging, among other things, breaches of fiduciary duties in connection with the Seritage transaction. Among other forms of relief, the plaintiffs are seeking damages in unspecified amounts. As the plaintiffs are suing derivatively, Holdings is only a nominal defendant in the complaint. The Company believes that the Seritage transaction has provided substantial benefits to Holdings and its shareholders and believes further that the plaintiffs' claims are legally without merit. In October 2016, a settlement in principle was reached with plaintiffs, subject to the negotiation and execution of settlement documentation and court approval. Given Holdings was only a nominal defendant in the complaint, Holdings will not be obligated to fund any portion of the settlement. In accordance with accounting standards regarding loss contingencies, we accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be misleading. We do not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. Because litigation outcomes are inherently unpredictable, our evaluation of legal proceedings often involves a series of complex assessments by management about future events and can rely heavily on estimates and assumptions. If the assessments indicate that loss contingencies that could be material to any one of our financial statements are not probable, but are reasonably possible, or are probable, but cannot be estimated, then we disclose the nature of the loss contingencies, together with an estimate of the range of possible loss or a statement that such loss is not reasonably estimable. While the consequences of certain unresolved proceedings are not presently determinable, and an estimate of the probable and reasonably possible loss or range of loss in excess of amounts accrued for such proceedings cannot be reasonably made, an adverse outcome from such proceedings could have a material effect on our earnings in any given reporting period. However, in the opinion of our management, after consulting with legal counsel, and taking into account insurance and reserves, the ultimate liability related to current outstanding matters is not expected to have a material effect on our financial position, liquidity or capital resources. |
RECENT ACCOUNTING PRONOUNCEMENTS |
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Oct. 29, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Consolidation - Interests held through related parties that are under common control In October 2016, the Financial Accounting Standards Board ("FASB") issued an accounting standards update to amend the accounting standards on how a reporting entity that is the single decision maker of a variable interest entity ("VIE") should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE. Under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. The update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the effect the update will have on our consolidated financial statements. Income Taxes - Intra-entity transfers of assets other than inventory In October 2016, the FASB issued an accounting standards update to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current accounting standards prohibit the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. In addition, interpretations of this guidance have developed in practice for transfers of certain intangible and tangible assets. This prohibition on recognition is an exception to the principle of comprehensive recognition of current and deferred income taxes in accounting standards. To more faithfully represent the economics of intra-entity asset transfers, the amendments in this update require that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this update do not change accounting standards for the pre-tax effects of an intra-entity asset transfer under accounting standards applicable to consolidation, or for an intra-entity transfer of inventory. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted as of the beginning of an annual reporting period. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently evaluating the effect the update will have on our consolidated financial statements. Statement of Cash Flows In August 2016, the FASB issued an accounting standards update which addresses diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments in the update must be applied using a retrospective transition method to each period presented. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We are currently evaluating the effect the update will have on our consolidated financial statements. Recognition of Breakage for Certain Prepaid Store-Value Products In March 2016, the FASB issued an accounting standards update which amends the guidance on extinguishing financial liabilities for certain prepaid store-value products. If an entity selling prepaid store-value products expects to be entitled to an amount that will not be redeemed, the entity will recognize the expected breakage in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable that a significant reversal of the breakage amount will not subsequently occur. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption before the effective date of Revenue from Contracts with Customers. We are currently evaluating the effect the update will have on our consolidated financial statements. Leases In February 2016, the FASB issued an accounting standards update which replaces the current lease accounting standard. The update will require, among other items, lessees to recognize a right-of-use asset and a lease liability for most leases. Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect the update will have on our consolidated financial statements. Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued an accounting standards update which simplifies the presentation of deferred income taxes by requiring that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. As permitted, the Company early adopted the update beginning in the fourth quarter of fiscal 2015 utilizing retrospective application. The impact of this update was a reclassification of deferred income tax liabilities from short-term deferred tax liabilities to long-term deferred tax liabilities of $422 million at October 31, 2015. Presentation of Debt Issuance Costs In April 2015, the FASB issued an accounting standards update which simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with discounts or premiums. In August 2015, the FASB issued an accounting standards update which adds paragraphs about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements, and allows for the presentation of debt issuance costs as an asset regardless of whether or not there is an outstanding balance on the line-of-credit arrangement. As permitted, the Company early adopted the update beginning in the fourth quarter of fiscal 2015. The impact of this update was a reclassification of unamortized debt issuance costs from other assets to long-term debt and capitalized lease obligations of $13 million at October 31, 2015. The Company continued to report unamortized debt issuance costs related to the Revolving Facility of $40 million, $53 million and $49 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively, within other assets. Presentation of Financial Statements - Going Concern In August 2014, the FASB issued an accounting standards update which requires management to assess whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. If substantial doubt exists, additional disclosures are required. This update will be effective for the Company's annual period ending January 28, 2017. The adoption of the new standard is not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures. Revenue from Contracts with Customers In May 2014, the FASB issued an accounting standards update which replaces the current revenue recognition standards. Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard was initially released as effective for fiscal years beginning after December 15, 2016, however, the FASB has decided to defer the effective date of this accounting standard update for one year. Early adoption of the update is permitted, but not before the original date for fiscal years beginning after December 15, 2016. The update may be applied retrospectively for each period presented or as a cumulative-effect adjustment at the date of adoption. The Company is evaluating the effect of adopting this new standard. |
RELATED PARTY DISCLOSURE |
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Related Party Transactions [Abstract] | |||||||||||||
RELATED PARTY DISCLOSURE | RELATED PARTY DISCLOSURE Mr. Lampert is Chairman of our Board of Directors and its Finance Committee and is the Chairman and Chief Executive Officer of ESL. Additionally, on February 1, 2013, Mr. Lampert became our Chief Executive Officer, in addition to his role as Chairman of the Board. ESL owned approximately 50% of our outstanding common stock at October 29, 2016 (excluding shares of common stock that ESL may acquire within 60 days upon the exercise of warrants to purchase shares of our common stock). On February 25, 2016, Holdings announced the election of Bruce R. Berkowitz to membership on our Board of Directors. Mr. Berkowitz serves as the Chief Investment Officer of Fairholme Capital Management, LLC, an investment adviser registered with the U.S. Securities and Exchange Commission ("SEC"), and is the President and a Director of Fairholme Funds, Inc., a SEC-registered investment company providing investment management services to three mutual funds (together with Fairholme Capital Management, LLC and other affiliates, "Fairholme"). Fairholme owned approximately 26% of our outstanding common stock at October 29, 2016 (excluding shares of common stock that Fairholme may acquire within 60 days upon the exercise of warrants to purchase shares of our common stock). Unsecured Commercial Paper During the 39 week periods ended October 29, 2016 and October 31, 2015, ESL and its affiliates held unsecured commercial paper issued by SRAC, an indirect wholly owned subsidiary of Holdings. For the commercial paper outstanding to ESL, the weighted average of each of maturity, annual interest rate and principal amount outstanding was 25.7 days, 7.9% and $87.2 million and 32.0 days, 4.55% and $12 million, respectively, during the 39 week periods ended October 29, 2016 and October 31, 2015. The largest aggregate amount of principal outstanding to ESL at any time since the beginning of 2016 was $244 million and $4 million of interest was paid by SRAC to ESL during the 39 week period ended October 29, 2016. ESL held $244 million of our commercial paper at October 29, 2016, which included $154 million held by Mr. Lampert. During the 39 week period ended October 29, 2016, Fairholme and its affiliates held unsecured commercial paper issued by SRAC. For the commercial paper outstanding to Fairholme, the weighted average of each maturity, annual interest rate and principal amount outstanding was 62.5 days, 7.42% and $1 million during the 39 week period ended October 29, 2016. The largest aggregate amount of principal outstanding to Fairholme at any time since the beginning of 2016 was $5 million and the aggregate amount of interest paid by SRAC to Fairholme was $76 thousand during the 39 week period ended October 29, 2016. Fairholme held $5 million of our commercial paper at October 29, 2016. The commercial paper sales were made in accordance with guidelines reviewed and approved by the Company’s audit committee. Secured Short-Term Loan In September 2014, the Company, through the Short-Term Borrowers, entities wholly-owned and controlled, directly or indirectly by the Company, entered into the $400 million Short-Term Loan with the Short-Term Lender, entities affiliated with ESL. The Company repaid the Short-Term Loan during 2015. See Note 2 for additional information regarding the Short-Term Loan. Secured Loan Facility In April 2016, the Company, through the Secured Loan Borrowers, entities wholly-owned and controlled, directly or indirectly by the Company, obtained a $500 million secured short-term loan facility with the Secured Loan Lenders, some of which are entities affiliated with ESL. At October 29, 2016, entities affiliated with ESL held $216 million of principal amount of the Secured Loan Facility. See Note 2 for additional information regarding the Secured Loan Facility. 2016 Term Loan In April 2016, the Company, through the ABL Borrowers, obtained a $750 million Senior Secured Term Loan under the Amended Domestic Credit Agreement with a syndicate of lenders, including $146 million (net of original issue discount) from JPP, LLC and JPP II, LLC, entities affiliated with ESL, and $100 million from the Company's domestic pension plan. See Note 2 for additional information regarding the 2016 Term Loan. At October 29, 2016, JPP LLC and JPP II, LLC, and the Company's domestic pension plan held $150 million and $100 million, respectively, of principal of the 2016 Term Loan. Second Lien Term Loan In September 2016, the Company, through the Second Lien Borrowers, obtained the $300 million Second Lien Term Loan from the Second Lien Lenders, entities affiliated with ESL. See Note 2 for additional information regarding the Second Lien Term Loan. At October 29, 2016, JPP LLC and JPP II, LLC held $300 million of principal of the Second Lien Term Loan. Senior Secured Notes At October 29, 2016, October 31, 2015 and January 30, 2016, Mr. Lampert and ESL held an aggregate of approximately $11 million of principal of the Company's Senior Secured Notes. At October 29, 2016, October 31, 2015 and January 30, 2016, respectively, Fairholme held an aggregate of approximately $46 million, $43 million and $22 million of principal of the Company's Senior Secured Notes. Mr. Lampert and ESL, Fairholme and the Company's domestic pension plan, respectively, tendered approximately $165 million, $207 million and $110 million in the Tender Offer, which is further discussed in Note 2. Subsidiary Notes At each of October 29, 2016, October 31, 2015 and January 30, 2016, Mr. Lampert and ESL held an aggregate of $3 million of principal amount of unsecured notes issued by SRAC (the "Subsidiary Notes"). At each of October 29, 2016, October 31, 2015 and January 30, 2016, Fairholme held an aggregate of $14 million of principal amount of Subsidiary Notes. Senior Unsecured Notes and Warrants At both October 29, 2016 and January 30, 2016, Mr. Lampert and ESL held an aggregate of approximately $193 million of principal amount of the Company's Senior Unsecured Notes, and 10,033,472 warrants to purchase shares of Holdings common stock. At October 31, 2015, Mr. Lampert and ESL held an aggregate of approximately $201 million of principal amount of the Company's Senior Unsecured Notes, and 10,529,740 warrants to purchase shares of Holdings common stock. At October 29, 2016, October 31, 2015 and January 30, 2016, respectively, Fairholme held an aggregate of approximately $357 million, $358 million and $360 million of principal amount of the Company's Senior Unsecured Notes, and 6,722,805, 6,857,130 and 6,839,379 warrants to purchase shares of Holdings common stock. Sears Canada ESL owns approximately 45% of the outstanding common shares of Sears Canada (based on publicly available information as of January 5, 2016). Fairholme owns approximately 20% of the outstanding common shares of Sears Canada (based on publicly available information as of November 30, 2016). Lands' End ESL owns approximately 60% of the outstanding common stock of Lands' End (based on publicly available information as of October 12, 2016). Fairholme owns approximately 11% of the outstanding common shares of Lands' End (based on publicly available information as of October 11, 2016). Holdings and certain of its subsidiaries entered into a transition services agreement in connection with the spin-off pursuant to which Lands' End and Holdings agreed to provide, on an interim, transitional basis, various services, including but not limited to, tax services, logistics services, auditing and compliance services, inventory management services, information technology services and continued participation in certain contracts shared with Holdings and its subsidiaries, as well as agreements related to Lands' End Shops at Sears and participation in the Shop Your Way® program. The majority of the services under the transition services agreement with Lands' End have expired or been terminated. In July 2016, the Company and Lands' End executed an agreement pursuant to which the Company will provide foreign buying office support and sourcing services to Lands' End. The agreement expires on March 31, 2017 and has three one-year renewal options. Amounts due to or from Lands' End are non-interest bearing, and generally settled on a net basis. Holdings invoices Lands' End on at least a monthly basis. At October 29, 2016, Holdings reported a net amount payable to Lands' End of $1 million in other current liabilities on the Condensed Consolidated Balance Sheet. At January 30, 2016, Holdings reported a net amount payable to Lands' End of $1 million in other current liabilities on the Condensed Consolidated Balance Sheet. At October 31, 2015, Holdings reported a net amount receivable from Lands' End of $4 million in accounts receivable on the Condensed Consolidated Balance Sheet. Amounts related to revenue from retail services and rent for Lands' End Shops at Sears, participation in the Shop Your Way® program and corporate shared services were $18 million and $18 million, respectively, for the 13 week periods ended October 29, 2016 and October 31, 2015, and $48 million and $52 million, respectively, for the 39 week periods ended October 29, 2016 and October 31, 2015. The amounts Lands' End earned related to call center services and commissions were $2 million and $2 million, respectively, for the 13 week periods ended October 29, 2016 and October 31, 2015, and $7 million and $6 million, respectively, for the 39 week periods ended October 29, 2016 and October 31, 2015. SHO ESL owns approximately 57% of the outstanding common stock of SHO (based on publicly available information as of November 7, 2016). Holdings and certain of its subsidiaries engage in transactions with SHO pursuant to various agreements with SHO which, among other things, (1) govern the principal transactions relating to the rights offering and certain aspects of our relationship with SHO following the separation, (2) establish terms under which Holdings and certain of its subsidiaries will provide SHO with services, and (3) establish terms pursuant to which Holdings and certain of its subsidiaries will obtain merchandise for SHO. These agreements were originally made in the context of a parent-subsidiary relationship and were negotiated in the overall context of the separation. In May 2016, the Company and SHO agreed to changes to a number of their related agreements, including extending the merchandise and services agreement until February 1, 2020. A summary of the nature of related party transactions involving SHO is as follows:
Amounts due to or from SHO are non-interest bearing, settled on a net basis, and have payment terms of 10 days after the invoice date. The Company invoices SHO on a weekly basis. At October 29, 2016, October 31, 2015 and January 30, 2016, Holdings reported a net amount receivable from SHO of $20 million, $85 million and $51 million, respectively, in accounts receivable on the Condensed Consolidated Balance Sheets. Amounts related to the sale of inventory and related services, royalties, and corporate shared services were $302 million and $359 million, respectively, for the 13 week periods ended October 29, 2016 and October 31, 2015, and $958 million and $1.1 billion, respectively, for the 39 week periods ended October 29, 2016 and October 31, 2015. The net amounts SHO earned related to commissions were $21 million and $22 million, respectively, for the 13 week periods ended October 29, 2016 and October 31, 2015, and $65 million and $71 million, respectively, for the 39 week periods ended October 29, 2016 and October 31, 2015. Additionally, the Company has guaranteed lease obligations for certain SHO store leases that were assigned as a result of the separation. See Note 4 of our Annual Report on Form 10-K for the fiscal year ended January 30, 2016 for further information related to these guarantees. Also in connection with the separation, the Company entered into an agreement with SHO and the agent under SHO's secured credit facility, whereby the Company committed to continue to provide services to SHO in connection with a realization on the lender's collateral after default under the secured credit facility, notwithstanding SHO's default under the underlying agreement with us, and to provide certain notices and services to the agent, for so long as any obligations remain outstanding under the secured credit facility. Seritage ESL owns approximately 9.8% of the total voting power of Seritage, and approximately 43.5% of the limited partnership units of Seritage Growth Properties, L.P. (the "Operating Partnership"), the entity that now owns the properties sold by the Company in the Seritage transaction and through which Seritage conducts its operations (based on publicly available information as of August 14, 2015). Mr. Lampert is also currently the Chairman of the Board of Trustees of Seritage. Fairholme owns approximately 14% of the outstanding Class A common shares of Seritage and 100% of the outstanding Class C non-voting common shares of Seritage (based on publicly available information as of February 16, 2016). In connection with the Seritage transaction as described in Note 3, Holdings entered into a master lease agreement with Seritage. The initial amount of aggregate annual base rent under the master lease is $134 million for the REIT properties, with increases of 2% per year beginning in the second lease year. At October 31, 2015 and January 30, 2016, Holdings reported prepaid rent of $9 million in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheet. Holdings recorded rent expense of $22 million and $22 million, respectively, in cost of sales, buying and occupancy for the 13 week periods ended October 29, 2016 and October 31, 2015. Rent expense consists of straight-line rent expense of $36 million and $37 million, respectively, offset by amortization of a deferred gain recognized pursuant to the sale and leaseback of properties from Seritage of $14 million and $15 million, respectively, for the 13 week periods ended October 29, 2016 and October 31, 2015. Holdings recorded rent expense of $64 million and $27 million, respectively, in cost of sales, buying and occupancy for the 39 week periods ended October 29, 2016 and October 31, 2015. Rent expense consists of straight-line rent expense of $108 million and $47 million, respectively, offset by amortization of a deferred gain recognized pursuant to the sale and leaseback of properties from Seritage of $44 million and $20 million, respectively, for the 39 week periods ended October 29, 2016 and October 31, 2015. In addition to base rent under the Master Lease, Holdings pays monthly installment expenses for property taxes and insurance at all REIT properties where Holdings is a tenant and installment expenses for common area maintenance, utilities and other operating expenses at REIT properties that are multi-tenant locations where Holdings and other third parties are tenants. The initial amount of aggregate installment expenses under the Master Lease is $70 million, based on estimated installment expenses, and will be reconciled annually based on actual installment expenses. The Company is in the process of reconciling installment expenses with Seritage. Holdings paid $17 million and $17 million, respectively, for the 13 week periods ended October 29, 2016 and October 31, 2015, and $51 million and $22 million, respectively, for the 39 week periods ended October 29, 2016 and October 31, 2015, recorded in cost of sales, buying and occupancy. At October 29, 2016, October 31, 2015 and January 30, 2016, respectively, Holdings reported a net amount receivable from Seritage, primarily related to installment expenses, of $14 million, $8 million and $7 million in accounts receivable on the Condensed Consolidated Balance Sheets. Holdings and Seritage entered into a transition services agreement pursuant to which Holdings will provide certain limited services to Seritage for up to 18 months. The services include specified facilities management, accounting, treasury, tax, information technology, risk management, human resources, and related support services. Under the terms of the transition services agreement, the scope and level of the facilities management services will be substantially consistent with the scope and level of the services provided in connection with the operation of the transferred properties held by Holdings prior to the closing of the Seritage transaction. The majority of the services under the transition services agreement with Seritage have expired or have been terminated. Amounts due from Seritage are generally settled on a net basis. Holdings invoices Seritage on at least a monthly basis. Revenues recognized related to the transition services agreement were not material for the 13- and 39- week periods ended October 29, 2016 or October 31, 2015. |
GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION |
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GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION | GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION At October 29, 2016, the principal amount outstanding of the Company's 6 5/8% Senior Secured Notes due 2018 was $302 million. The Senior Secured Notes were issued in 2010 by Sears Holdings Corporation ("Parent"). The Senior Secured Notes are guaranteed by certain of our 100% owned domestic subsidiaries that own the collateral for the notes, as well as by SRAC (the "guarantor subsidiaries"). The following condensed consolidated financial information presents the Condensed Consolidating Balance Sheets at October 29, 2016, October 31, 2015 and January 30, 2016, the Condensed Consolidating Statements of Operations and the Condensed Consolidating Statements of Comprehensive Loss for the 13- and 39- week periods ended October 29, 2016 and October 31, 2015, and the Condensed Consolidating Statements of Cash flows for the 39 week periods ended October 29, 2016 and October 31, 2015 of (i) Parent; (ii) the guarantor subsidiaries; (iii) the non-guarantor subsidiaries; (iv) eliminations and (v) the Company on a consolidated basis. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions including transactions with our wholly-owned non-guarantor insurance subsidiary. The Company has accounted for investments in subsidiaries under the equity method. The guarantor subsidiaries are 100% owned directly or indirectly by the Parent and all guarantees are joint, several and unconditional. Additionally, the notes are secured by a security interest in certain assets consisting primarily of domestic inventory and credit card receivables of the guarantor subsidiaries, and consequently may not be available to satisfy the claims of the Company's general creditors. Certain investments primarily held by non-guarantor subsidiaries are recorded by the issuers at historical cost and are recorded at fair value by the holder. Condensed Consolidating Balance Sheet October 29, 2016
Condensed Consolidating Balance Sheet October 31, 2015
Condensed Consolidating Balance Sheet January 30, 2016
Condensed Consolidating Statement of Operations For the 13 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Operations For the 13 Weeks Ended October 31, 2015
Condensed Consolidating Statement of Operations For the 39 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Operations For the 39 Weeks Ended October 31, 2015
Condensed Consolidating Statement of Comprehensive Income (Loss) For the 13 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Comprehensive Income (Loss) For the 13 Weeks Ended October 31, 2015
Condensed Consolidating Statement of Comprehensive Income (Loss) For the 39 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Comprehensive Income (Loss) For the 39 Weeks Ended October 31, 2015
Condensed Consolidating Statement of Cash Flows For the 39 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Cash Flows For the 39 Weeks Ended October 31, 2015
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RECENT ACCOUNTING PRONOUNCEMENTS (Policies) |
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Oct. 29, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | Consolidation - Interests held through related parties that are under common control In October 2016, the Financial Accounting Standards Board ("FASB") issued an accounting standards update to amend the accounting standards on how a reporting entity that is the single decision maker of a variable interest entity ("VIE") should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE. Under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. The update is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the effect the update will have on our consolidated financial statements. Income Taxes - Intra-entity transfers of assets other than inventory In October 2016, the FASB issued an accounting standards update to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current accounting standards prohibit the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. In addition, interpretations of this guidance have developed in practice for transfers of certain intangible and tangible assets. This prohibition on recognition is an exception to the principle of comprehensive recognition of current and deferred income taxes in accounting standards. To more faithfully represent the economics of intra-entity asset transfers, the amendments in this update require that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this update do not change accounting standards for the pre-tax effects of an intra-entity asset transfer under accounting standards applicable to consolidation, or for an intra-entity transfer of inventory. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted as of the beginning of an annual reporting period. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently evaluating the effect the update will have on our consolidated financial statements. Statement of Cash Flows In August 2016, the FASB issued an accounting standards update which addresses diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The amendments in the update must be applied using a retrospective transition method to each period presented. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. We are currently evaluating the effect the update will have on our consolidated financial statements. Recognition of Breakage for Certain Prepaid Store-Value Products In March 2016, the FASB issued an accounting standards update which amends the guidance on extinguishing financial liabilities for certain prepaid store-value products. If an entity selling prepaid store-value products expects to be entitled to an amount that will not be redeemed, the entity will recognize the expected breakage in proportion to the pattern of rights expected to be exercised by the product holder to the extent that it is probable that a significant reversal of the breakage amount will not subsequently occur. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, including adoption before the effective date of Revenue from Contracts with Customers. We are currently evaluating the effect the update will have on our consolidated financial statements. Leases In February 2016, the FASB issued an accounting standards update which replaces the current lease accounting standard. The update will require, among other items, lessees to recognize a right-of-use asset and a lease liability for most leases. Extensive quantitative and qualitative disclosures, including significant judgments made by management, will be required to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing contracts. The update is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect the update will have on our consolidated financial statements. Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued an accounting standards update which simplifies the presentation of deferred income taxes by requiring that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. As permitted, the Company early adopted the update beginning in the fourth quarter of fiscal 2015 utilizing retrospective application. The impact of this update was a reclassification of deferred income tax liabilities from short-term deferred tax liabilities to long-term deferred tax liabilities of $422 million at October 31, 2015. Presentation of Debt Issuance Costs In April 2015, the FASB issued an accounting standards update which simplifies the presentation of debt issuance costs by requiring that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with discounts or premiums. In August 2015, the FASB issued an accounting standards update which adds paragraphs about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements, and allows for the presentation of debt issuance costs as an asset regardless of whether or not there is an outstanding balance on the line-of-credit arrangement. As permitted, the Company early adopted the update beginning in the fourth quarter of fiscal 2015. The impact of this update was a reclassification of unamortized debt issuance costs from other assets to long-term debt and capitalized lease obligations of $13 million at October 31, 2015. The Company continued to report unamortized debt issuance costs related to the Revolving Facility of $40 million, $53 million and $49 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively, within other assets. Presentation of Financial Statements - Going Concern In August 2014, the FASB issued an accounting standards update which requires management to assess whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. If substantial doubt exists, additional disclosures are required. This update will be effective for the Company's annual period ending January 28, 2017. The adoption of the new standard is not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows or disclosures. Revenue from Contracts with Customers In May 2014, the FASB issued an accounting standards update which replaces the current revenue recognition standards. Subsequently, the FASB has also issued accounting standards updates which clarify the guidance. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard was initially released as effective for fiscal years beginning after December 15, 2016, however, the FASB has decided to defer the effective date of this accounting standard update for one year. Early adoption of the update is permitted, but not before the original date for fiscal years beginning after December 15, 2016. The update may be applied retrospectively for each period presented or as a cumulative-effect adjustment at the date of adoption. The Company is evaluating the effect of adopting this new standard. |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Borrowings | Total borrowings were as follows:
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STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 29, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Store closing costs and severance recorded for the 13- and 39- week periods ended October 29, 2016 and October 31, 2015 were as follows:
_____________
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Schedule of Restructuring Reserve by Type of Cost | Store closing cost and severance accruals of $178 million, $158 million and $180 million at October 29, 2016, October 31, 2015 and January 30, 2016, respectively, were as follows:
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Schedule of Rent Expense | Rent expense consisted of straight-line rent expense offset by amortization of deferred gain on sale-leaseback, as shown in the tables below.
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Schedule of Immediate Net Gain on Sale Leaseback | Accordingly, during the 13- and 39- week periods ended October 31, 2015, Holdings recognized an immediate net gain of $508 million within gain on sales of assets on the Consolidated Statement of Operations for 2015, comprised of a gain for the amount of gain on sale in excess of the present value of minimum lease payments, offset by a loss for properties where the fair value was less than the carrying value and the write-off of lease balances related to third-party leases that were assigned to Seritage and the JVs, as shown in the table below.
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EQUITY (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 29, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the components used to calculate basic and diluted loss per share attributable to Holdings' shareholders. During the 13- and 39- week periods ended October 31, 2015, warrants, restricted stock awards and restricted stock units, totaling 1.4 million and 6.7 million shares, respectively, were not included in the computation of diluted loss per share attributable to Holdings' shareholders because the effect of their inclusion would have been antidilutive.
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Components of Accumulated Other Comprehensive Loss | The following table displays the components of accumulated other comprehensive loss:
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Income Tax Expense Allocated to Each Component of Other Comprehensive Income (Loss) | Income tax expense allocated to each component of other comprehensive income was as follows:
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BENEFIT PLANS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 29, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Components of Total Net Periodic Benefit Expense for Retirement Plans | The following table summarizes the components of total net periodic benefit expense, recorded within Selling and administrative on the Condensed Consolidated Statements of Operations, for our retirement plans:
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SUMMARY OF SEGMENT DATA (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 29, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data |
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SUPPLEMENTAL FINANCIAL INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 29, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-Term Liabilities | Other long-term liabilities at October 29, 2016, October 31, 2015 and January 30, 2016 consisted of the following:
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GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet October 29, 2016
Condensed Consolidating Balance Sheet October 31, 2015
Condensed Consolidating Balance Sheet January 30, 2016
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Condensed Consolidating Statement of Operations | Condensed Consolidating Statement of Operations For the 13 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Operations For the 13 Weeks Ended October 31, 2015
Condensed Consolidating Statement of Operations For the 39 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Operations For the 39 Weeks Ended October 31, 2015
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Condensed Consolidating Statement of Comprehensive Income | Condensed Consolidating Statement of Comprehensive Income (Loss) For the 13 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Comprehensive Income (Loss) For the 13 Weeks Ended October 31, 2015
Condensed Consolidating Statement of Comprehensive Income (Loss) For the 39 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Comprehensive Income (Loss) For the 39 Weeks Ended October 31, 2015
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Condensed Consolidating Statement of Cash Flows | Condensed Consolidating Statement of Cash Flows For the 39 Weeks Ended October 29, 2016
Condensed Consolidating Statement of Cash Flows For the 39 Weeks Ended October 31, 2015
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BASIS OF PRESENTATION (Narrative) (Details) shares in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 01, 2016
USD ($)
|
Oct. 29, 2016
USD ($)
Store
shares
|
Oct. 31, 2015
USD ($)
shares
|
Oct. 29, 2016
USD ($)
Store
Segment
shares
|
Oct. 31, 2015
USD ($)
shares
|
Apr. 08, 2016
USD ($)
|
Jan. 30, 2016
USD ($)
shares
|
Jul. 21, 2015
USD ($)
|
|
Significant Accounting Policies [Line Items] | ||||||||
Number of reportable segments | Segment | 2 | |||||||
Depreciation | $ 90,000,000 | $ 93,000,000 | $ 274,000,000 | $ 325,000,000 | ||||
One time credits from vendors associated with prior supply arrangements | 126,000,000 | |||||||
Proceeds from debt issuances | 1,528,000,000 | |||||||
Proceeds from sale of real estate and other assets | 270,000,000 | |||||||
Line of credit facility, additional borrowing capacity under FILO Tranche feature | $ 500,000,000 | |||||||
Line of credit facility, maximum borrowing capacity | 3,275,000,000.000 | |||||||
Secured borrowings | 370,000,000 | 677,000,000 | 370,000,000 | 677,000,000 | $ 797,000,000 | |||
Sears Canada | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Equity method investments | $ 23,000,000 | $ 86,000,000 | $ 23,000,000 | $ 86,000,000 | $ 52,000,000 | |||
Sears Canada | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Investment owned, balance, shares | shares | 12 | 12 | 12 | 12 | 12 | |||
Percentage of ownership interests | 12.00% | 12.00% | 12.00% | 12.00% | 12.00% | |||
Domestic Credit Agreement | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000,000.0 | $ 2,000,000,000.0 | $ 2,000,000,000.0 | |||||
Secured borrowings | 604,000,000 | 604,000,000 | ||||||
2016 Term Loan | Senior Secured Note | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt instrument, face amount | 750,000,000 | 750,000,000 | $ 750,000,000 | |||||
Proceeds from debt issuances | 722,000,000 | |||||||
2016 Term Loan | Domestic Credit Agreement | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Secured borrowings | 750,000,000 | 750,000,000 | ||||||
Loan Facility, Maturity July 2017 | Secured Loan Facility | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt instrument, face amount | $ 500,000,000 | 500,000,000 | $ 500,000,000 | |||||
Proceeds from debt issuances | $ 485,000,000 | |||||||
Second Lien Term Loan | Secured Debt | Esl Investments Inc | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Debt instrument, face amount | $ 300,000,000 | |||||||
Proceeds from debt issuances | $ 291,000,000 | |||||||
UNITED STATES | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Number of stores | Store | 1,503 | 1,503 |
BORROWINGS (Total Borrowings) (Details) - USD ($) $ in Millions |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
---|---|---|---|
Short-term borrowings: | |||
Unsecured commercial paper | $ 248 | $ 0 | $ 9 |
Secured borrowings | 370 | 797 | 677 |
Long-term debt, including current portion: | |||
Notes and debentures outstanding | 3,517 | 1,984 | 1,976 |
Capitalized lease obligations | 164 | 195 | 206 |
Total borrowings | 4,299 | 2,976 | 2,868 |
Fair value of long-term debt | $ 3,600 | $ 1,900 | $ 2,200 |
BORROWINGS (Unsecured Commercial Paper) (Details) - USD ($) |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
---|---|---|---|
Debt Disclosure [Abstract] | |||
Unsecured commercial paper, outstanding borrowings | $ 249,000,000 | $ 0 | $ 9,000,000 |
Commercial paper at carrying value, net of remaining discount | $ 248,000,000 | $ 0 | $ 9,000,000 |
BORROWINGS (Secured Short-Term Loan) (Details) - USD ($) |
9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 01, 2015 |
Mar. 02, 2015 |
Sep. 30, 2014 |
Sep. 15, 2014 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
|||
Short-term Debt [Line Items] | |||||||||
Repayments of debt | [1] | $ 50,000,000 | $ 1,387,000,000 | ||||||
Esl Investments Inc | |||||||||
Short-term Debt [Line Items] | |||||||||
Secured short-term loan | $ 400,000,000 | $ 0 | 0 | $ 0 | |||||
Proceeds from short-term debt | $ 200,000,000 | $ 200,000,000 | |||||||
Debt instrument, extension fee | 0.50% | ||||||||
Upfront fee, percentage of principal amount | 1.75% | ||||||||
Debt Instrument, interest rate, stated percentage | 5.00% | ||||||||
Interest expense, related party | $ 6,000,000 | ||||||||
Esl Investments Inc | Short-term Debt | |||||||||
Short-term Debt [Line Items] | |||||||||
Repayments of debt | $ 200,000,000 | $ 200,000,000 | |||||||
|
BORROWINGS (Secured Loan Facility) (Details) |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Apr. 22, 2016
USD ($)
|
Apr. 08, 2016
USD ($)
Property
|
Oct. 29, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
|||
Line of Credit Facility [Line Items] | ||||||
Proceeds from debt issuances | [1] | $ 1,528,000,000 | $ 0 | |||
Secured Loan Facility | Loan Facility, Maturity July 2017 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, face amount | $ 500,000,000 | 500,000,000 | ||||
Proceeds from debt issuances | $ 250,000,000 | $ 250,000,000 | ||||
Carrying amount of long-term debt | $ 492,000,000 | |||||
Commitment fees, percentage of full principal amount | 1.00% | |||||
Funding fee, percentage of amounts drawn | 1.00% | |||||
Delayed origination fee, percentage of outstanding balance or committed after 9 months | 0.50% | |||||
Delayed origination fee, percentage of outstanding balance or committed after 12 months | 0.50% | |||||
Number of real properties under first priority lien | Property | 21 | |||||
Default interest rate in excess of the base interest rate | 2.50% | |||||
Secured Loan Facility | Loan Facility, Maturity July 2017 | Base Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 8.00% | |||||
Secured Loan Facility | Loan Facility, Maturity July 2017 | Prime Rate | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on prime rate for debt default interest rate | 1.00% | |||||
|
BORROWINGS (Domestic Credit Agreement) (Details) |
1 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jul. 21, 2015
USD ($)
|
Oct. 31, 2010 |
Oct. 29, 2016
USD ($)
|
Jan. 30, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Aug. 28, 2015
USD ($)
|
Oct. 02, 2013
USD ($)
|
|
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 3,275,000,000.000 | ||||||
Line of credit facility, additional borrowing capacity under Accordion feature | 1,000,000,000 | ||||||
Line of credit facility, additional borrowing capacity under FILO Tranche feature | 500,000,000 | ||||||
Line of credit facility, permitted short-term borrowings under prior agreement | 500,000,000 | ||||||
Line of credit facility, permitted short-term borrowings under amended agreement | 750,000,000 | ||||||
Line of credit facility, amount outstanding | $ 370,000,000 | $ 797,000,000 | $ 677,000,000 | ||||
Fixed charge coverage ratio, minimum | 1.0 | ||||||
Domestic Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000,000.0 | $ 2,000,000,000.0 | |||||
Line of credit facility, amount outstanding | $ 604,000,000 | ||||||
Domestic Credit Agreement | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fees | 0.375% | ||||||
Limit of availability under the credit facility to make restricted payments | 15.00% | ||||||
Domestic Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fees | 0.625% | ||||||
Domestic Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 2.00% | ||||||
Domestic Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 2.50% | ||||||
Domestic Credit Agreement | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
Domestic Credit Agreement | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.50% | ||||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, maturity date | Jun. 30, 2018 | ||||||
Term Loan | Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 1,000,000,000.0 | ||||||
Debt instrument, periodic payment | $ 2,500,000 | ||||||
Carrying amount of long-term debt | $ 973,000,000 | 980,000,000 | 983,000,000 | ||||
Remaining discount on debt | 964,000,000 | 968,000,000 | 969,000,000 | ||||
Term Loan | Secured Debt | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, floor interest rate | 1.00% | ||||||
Term Loan | Secured Debt | London Interbank Offered Rate (LIBOR) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 1.00% | ||||||
Debt instrument, applicable margin on variable rate | 4.50% | ||||||
Term Loan | Secured Debt | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, applicable margin on variable rate | 3.50% | ||||||
Term Loan | Secured Debt | Federal Funds Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 0.50% | ||||||
Domestic Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 1,304,000,000.000 | ||||||
Debt instrument, maturity date | Jul. 20, 2020 | ||||||
Line of credit facility, remaining borrowing capacity | $ 174,000,000 | 316,000,000 | 963,000,000 | ||||
Credit agreement, covenant terms | The Amended Domestic Credit Agreement limits our ability to make restricted payments, including dividends and share repurchases, subject to specified exceptions that are available if, in each case, no event of default under the credit facility exists immediately before or after giving effect to the restricted payment. These include exceptions that require that projected availability under the credit facility, as defined, is at least 15%, exceptions that may be subject to certain maximum amounts and an exception that requires that the restricted payment is funded from cash on hand and not from borrowings under the credit facility. Further, the Amended Domestic Credit Agreement includes customary covenants that restrict our ability to make dispositions, prepay debt, and make investments, subject, in each case, to various exceptions. The Amended Domestic Credit Agreement also imposes various other requirements, which take effect if availability falls below designated thresholds, including a cash dominion requirement and a requirement that the fixed charge ratio at the last day of any quarter be not less than 1.0 to 1.0. | ||||||
Letters of credit outstanding, amount | $ 660,000,000 | 652,000,000 | 654,000,000 | ||||
Domestic Credit Agreement | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 1,000,000,000.0 | ||||||
Domestic Credit Agreement | Second Lien | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, remaining borrowing capacity | $ 1,400,000,000 | ||||||
Extended Maturity | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 1,971,000,000.000 | ||||||
Extended Maturity | Domestic Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fees | 0.50% | ||||||
Extended Maturity | Domestic Credit Agreement | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fees | 0.50% | ||||||
Extended Maturity | Domestic Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.25% | ||||||
Extended Maturity | Domestic Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 3.75% | ||||||
Extended Maturity | Domestic Credit Agreement | Base Rate | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 2.25% | ||||||
Extended Maturity | Domestic Credit Agreement | Base Rate | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 2.75% | ||||||
2016 Term Loan | Domestic Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, amount outstanding | $ 750,000,000 | ||||||
Senior Secured Note | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 1,000 | ||||||
Debt instrument, maturity date | Oct. 15, 2018 | ||||||
Senior secured note, interest rate | 6.625% | ||||||
Carrying amount of long-term debt | $ 302,000,000 | $ 302,000,000 | $ 302,000,000 |
BORROWINGS (Second Lien Term Loan) (Details) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 01, 2016 |
Jul. 21, 2015 |
Oct. 29, 2016 |
|
Debt Instrument [Line Items] | |||
Proceeds from debt issuances | $ 1,528,000,000 | ||
Esl Investments Inc | Secured Debt | Second Lien Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 300,000,000 | ||
Proceeds from debt issuances | 291,000,000 | ||
Additional borrowing capacity under accordion feature | $ 200,000,000 | ||
Carrying amount of long-term debt | $ 291,000,000 | ||
London Interbank Offered Rate (LIBOR) | Esl Investments Inc | Secured Debt | Second Lien Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, floor interest rate | 1.00% | ||
Debt instrument, basis spread on variable rate | 7.50% | ||
Base Rate | Esl Investments Inc | Secured Debt | Second Lien Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 6.50% |
BORROWINGS (2016 Term Loan) (Details) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Apr. 08, 2016 |
Oct. 29, 2016 |
Jul. 21, 2015 |
|
Debt Instrument [Line Items] | |||
Proceeds from debt issuances | $ 1,528,000,000 | ||
Line of credit facility, maximum borrowing capacity | $ 3,275,000,000.000 | ||
Extended Maturity | |||
Debt Instrument [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 1,971,000,000.000 | ||
Senior Secured Note | 2016 Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 750,000,000 | 750,000,000 | |
Proceeds from debt issuances | 722,000,000 | ||
Premium percentage of aggregate principal amount if prepaid on or prior to April 8, 2017 | 2.00% | ||
Premium percentage of aggregate principal amount if prepaid after April 8, 2017 and prior to April 8, 2018 | 1.00% | ||
Long-term debt | $ 725,000,000 | ||
Senior Secured Note | 2016 Term Loan | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 0.75% | ||
LIBOR floor percentage | 1.00% |
BORROWINGS (Senior Secured Notes) (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2010 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
Aug. 28, 2015 |
Aug. 03, 2015 |
Sep. 06, 2011 |
|||
Debt Instrument [Line Items] | ||||||||||
Debt repurchase authorized amount | $ 1,000,000,000.0 | |||||||||
Repayments of debt | [1] | $ 50,000,000 | $ 1,387,000,000 | |||||||
Senior Secured Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 1,000,000,000 | |||||||||
Senior secured note, interest rate | 6.625% | |||||||||
Debt instrument, maturity date | Oct. 15, 2018 | |||||||||
Debt redemption, percentage of principal amount | 101.00% | |||||||||
Repayments of debt | $ 936,000,000 | |||||||||
Early tender repurchase amount per tender offer | $ 990 | |||||||||
Principal amount of debt | 1,000 | |||||||||
Early tender payment per $1000 | 30 | |||||||||
Repurchase amount per tender offer | 960 | |||||||||
Repurchase amount on debt instrument | 929,000,000 | |||||||||
Repurchase on debt | 936,000,000 | |||||||||
Unamortized debt sssue costs and discount | $ 7,000,000 | |||||||||
Carrying amount of long-term debt | $ 302,000,000 | $ 302,000,000 | $ 302,000,000 | $ 302,000,000 | ||||||
Treasury Rate | Senior Secured Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||||||
United States Pension Plan of US Entity | Senior Secured Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Long-term debt | $ 250,000,000 | $ 0 | ||||||||
|
BORROWINGS (Senior Unsecured Notes) (Details) - USD ($) $ in Millions |
9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Nov. 21, 2014 |
Oct. 20, 2014 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
|||
Debt Instrument [Line Items] | |||||||
Proceeds from debt issuances | [1] | $ 1,528 | $ 0 | ||||
Unsecured Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Maximum amount of common stock stockholders can purchase with notes and warrants | $ 625 | ||||||
Debt Instrument, interest rate, stated percentage | 8.00% | 8.00% | |||||
Debt instrument, maturity year | 2019 | 2019 | |||||
Long-term debt | $ 625 | ||||||
Proceeds from debt issuances | 625 | ||||||
Remaining discount on debt | $ 278 | 207 | 248 | $ 238 | |||
Effective interest rate on debt | 11.55% | ||||||
Amortization of debt discount | 32 | 25 | |||||
Carrying amount of long-term debt | $ 416 | $ 373 | $ 383 | ||||
|
BORROWINGS (Wholly owned Insurance Subsidiary and Intercompany Securities) (Details) $ in Billions |
Oct. 29, 2016
USD ($)
|
Jan. 30, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
May 31, 2006
USD ($)
|
Nov. 30, 2003
USD ($)
Store
|
---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||
Mortgage-backed securities owned | $ 1.3 | ||||
Asset-backed securities issued | $ 1.8 | ||||
Subsidiaries | |||||
Debt Instrument [Line Items] | |||||
Number of stores | Store | 125 | ||||
Securitized trademark rights | |||||
Debt Instrument [Line Items] | |||||
Carrying amount of assets securitized | $ 1.0 | $ 1.0 | $ 1.0 | ||
Securitized real estate assets | |||||
Debt Instrument [Line Items] | |||||
Carrying amount of assets securitized | $ 0.6 | $ 0.6 | $ 0.6 |
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Store Closings and Severance) (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016
USD ($)
Store
|
Oct. 31, 2015
Store
|
Oct. 29, 2016
USD ($)
Store
|
Oct. 31, 2015
Store
|
|
Restructuring Cost and Reserve [Line Items] | ||||
Expected additional charges during 2016 related to stores closure | $ | $ 20 | $ 20 | ||
Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of stores closed | 82 | 11 | 140 | 27 |
Number of stores closed during period | 65 | 9 | 160 | 31 |
Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of stores closed | 7 | 3 | 30 | 9 |
Number of stores closed during period | 5 | 2 | 31 | 9 |
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Schedule of Store Closing Costs and Severance Recorded) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | $ 115 | $ (1) | $ 189 | $ 38 |
Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 109 | 1 | 165 | 42 |
Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 6 | (2) | 24 | (4) |
Markdowns | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 38 | 6 | 102 | 17 |
Markdowns | Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 36 | 5 | 90 | 14 |
Markdowns | Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 2 | 1 | 12 | 3 |
Severance Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 7 | 0 | 15 | 4 |
Severance Costs | Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 5 | 0 | 11 | 2 |
Severance Costs | Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 2 | 0 | 4 | 2 |
Lease Termination Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 59 | (8) | 42 | 10 |
Lease Termination Costs | Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 58 | (5) | 39 | 22 |
Lease Termination Costs | Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 1 | (3) | 3 | (12) |
Other Charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 9 | 1 | 23 | 5 |
Other Charges | Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 8 | 1 | 19 | 4 |
Other Charges | Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 1 | 0 | 4 | 1 |
Impairment And Accelerated Depreciation | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 2 | 0 | 7 | 2 |
Impairment And Accelerated Depreciation | Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | 2 | 0 | 6 | 0 |
Impairment And Accelerated Depreciation | Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Store closing costs | $ 0 | $ 0 | $ 1 | $ 2 |
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Store Closing Cost Accruals) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Jan. 30, 2016 |
Oct. 29, 2016 |
|
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | $ 158 | $ 180 |
Store closing costs | 35 | 80 |
Payments/utilizations | (13) | (82) |
Restructuring reserve, ending balance | 180 | 178 |
Severance Costs | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 28 | 58 |
Store closing costs | 33 | 15 |
Payments/utilizations | (3) | (36) |
Restructuring reserve, ending balance | 58 | 37 |
Lease Termination Costs | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 126 | 114 |
Store closing costs | (4) | 42 |
Payments/utilizations | (8) | (23) |
Restructuring reserve, ending balance | 114 | 133 |
Other Charges | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring reserve, beginning balance | 4 | 8 |
Store closing costs | 6 | 23 |
Payments/utilizations | (2) | (23) |
Restructuring reserve, ending balance | $ 8 | $ 8 |
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Long-Lived Assets) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Impairment charges | $ 3 | $ 17 | $ 18 | $ 71 |
Sears Domestic | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment charges | 0 | 7 | 11 | 59 |
Kmart | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Impairment charges | $ 3 | $ 10 | $ 7 | $ 12 |
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Real Estate Transactions) (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|
Jul. 07, 2015
USD ($)
Property
|
Apr. 30, 2015
USD ($)
Joint_venture
Property
|
Oct. 29, 2016
USD ($)
Store
|
Oct. 31, 2015
USD ($)
Store
|
Nov. 01, 2014
USD ($)
|
Oct. 29, 2016
USD ($)
Store
Property
|
Oct. 31, 2015
USD ($)
Store
|
Jan. 30, 2016
USD ($)
|
|||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Number of distinct real estate joint ventures | Joint_venture | 3 | |||||||||
Number of properties contributed to joint venture | Property | 31 | |||||||||
Proceeds from sale-leaseback financing | [1] | $ 0 | $ 508 | |||||||
Real estate investments, joint ventures | $ 858 | |||||||||
Leaseback transaction, number of stores | Property | 255 | |||||||||
Number of stores recaptured | Store | 3 | |||||||||
Sale-leaseback transaction, rent expense | $ 22 | $ 27 | 72 | 43 | ||||||
Sale-leaseback financing obligation | 164 | 164 | 164 | 164 | $ 164 | |||||
Aggregate net proceeds from sale-leaseback transaction and joint venture agreements | $ 3,100 | |||||||||
Net book value | 1,500 | |||||||||
Sale-leaseback transaction, current period gain recognized | 508 | 508 | ||||||||
Deferred gain | 894 | 894 | ||||||||
Sale-leaseback transaction, current portion of deferred gain, net | 97 | 89 | 97 | 89 | 89 | |||||
Deferred gain on sale-leaseback | 656 | 775 | 656 | 775 | 753 | |||||
Gain on sales of assets | $ 51 | 97 | $ 166 | 730 | ||||||
Master Leases | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Number of stores recaptured | Store | 3 | |||||||||
Sale-leaseback transaction, current period gain recognized | $ 13 | |||||||||
Gain on sales of assets | $ 26 | |||||||||
Percentage of space under lease recapture right | 100.00% | 100.00% | ||||||||
Gain (loss) on contract termination | $ 13 | |||||||||
Deferred Gain | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Gain on sales of assets | $ 1 | 10 | ||||||||
Kmart | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Sale-leaseback transaction, rent expense | 3 | 4 | 11 | 5 | ||||||
Net book value | 175 | |||||||||
Sale-leaseback transaction, current period gain recognized | 137 | 137 | ||||||||
Gain on sales of assets | 30 | 12 | 120 | 173 | ||||||
Kmart | Lease Surrender and Early Termination | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Gains (losses) on sales of other real estate | $ 10 | |||||||||
Number of properties sold | Store | 1 | |||||||||
Sears Domestic | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Leaseback transaction, number of stores | Store | 1 | |||||||||
Sale-leaseback transaction, rent expense | 19 | 23 | 61 | $ 38 | ||||||
Net book value | 1,300 | |||||||||
Sale-leaseback transaction, current period gain recognized | 371 | 371 | ||||||||
Gain on sales of assets | 21 | 85 | 46 | 557 | ||||||
Sale-leaseback transaction, real property assets of properties with continuing involvement | 61 | 51 | 61 | 51 | $ 56 | |||||
Gains (losses) on sales of other real estate | $ 15 | $ 83 | $ 86 | |||||||
Number of properties sold | Store | 2 | 1 | 2 | |||||||
Proceeds from sale of real estate | $ 27 | $ 102 | $ 90 | $ 96 | ||||||
Sale Leaseback Transaction, Net Proceeds, Investing Activities | 12 | |||||||||
Sale-leaseback transaction, lease period | 6 months | |||||||||
Sears Domestic | Distribution Center | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Gains (losses) on sales of other real estate | $ 12 | |||||||||
Number of properties sold | Property | 1 | |||||||||
Proceeds from sale of real estate | $ 23 | |||||||||
Seritage Growth Properties | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Proceeds from sale-leaseback financing | $ 82 | |||||||||
Aggregate proceeds from sale-leaseback transaction and rights offering of common stock and limited partnership units | 2,700 | 2,700 | ||||||||
Net proceeds from sale-leaseback transaction and rights offering of common stock and limited partnership units | 2,600 | 2,600 | ||||||||
Sale-leaseback transaction, aggregate value | $ 2,300 | |||||||||
Number of properties that have continuing involvement | Property | 4 | 4 | ||||||||
Number of properties sold | Property | 235 | |||||||||
Seritage Growth Properties | Master Leases | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Percentage of space under lease recapture right | 50.00% | 50.00% | ||||||||
Corporate Joint Venture | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Percentage of ownership interests | 50.00% | 50.00% | ||||||||
Sale leaseback transaction, gross proceeds, financing activities | $ 429 | 429 | ||||||||
Proceeds from sale-leaseback financing | $ 426 | 426 | ||||||||
Sale-leaseback financing obligation | $ 426 | $ 426 | ||||||||
|
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Sale-lease Rent Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Sale Leaseback Transaction [Line Items] | ||||
Straight-line rent expense | $ 44 | $ 50 | $ 138 | $ 73 |
Amortization of deferred gain on sale-leaseback | (22) | (23) | (66) | (30) |
Rent expense | 22 | 27 | 72 | 43 |
Kmart | ||||
Sale Leaseback Transaction [Line Items] | ||||
Straight-line rent expense | 7 | 9 | 24 | 11 |
Amortization of deferred gain on sale-leaseback | (4) | (5) | (13) | (6) |
Rent expense | 3 | 4 | 11 | 5 |
Sears Domestic | ||||
Sale Leaseback Transaction [Line Items] | ||||
Straight-line rent expense | 37 | 41 | 114 | 62 |
Amortization of deferred gain on sale-leaseback | (18) | (18) | (53) | (24) |
Rent expense | $ 19 | $ 23 | $ 61 | $ 38 |
STORE CLOSING CHARGES, SEVERANCE COSTS, IMPAIRMENTS AND REAL ESTATE TRANSACTIONS (Schedule of Immediate Net Gain) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Oct. 31, 2015 |
Oct. 31, 2015 |
|
Sale Leaseback Transaction [Line Items] | ||
Gain | $ 625 | $ 625 |
Loss | (117) | (117) |
Immediate Net Gain | 508 | 508 |
Kmart | ||
Sale Leaseback Transaction [Line Items] | ||
Gain | 154 | 154 |
Loss | (17) | (17) |
Immediate Net Gain | 137 | 137 |
Sears Domestic | ||
Sale Leaseback Transaction [Line Items] | ||
Gain | 471 | 471 |
Loss | (100) | (100) |
Immediate Net Gain | $ 371 | $ 371 |
EQUITY (Earnings per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Equity [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share | 1.4 | 6.7 | ||
Basic weighted average shares (in shares) | 107.0 | 106.6 | 106.9 | 106.5 |
Diluted weighted average shares (in shares) | 107.0 | 106.6 | 106.9 | 106.5 |
Net loss attributable to Holdings' shareholders | $ (748) | $ (454) | $ (1,614) | $ (549) |
Basic loss per share (in USD per share) | $ (6.99) | $ (4.26) | $ (15.10) | $ (5.15) |
Diluted loss per share (in USD per share) | $ (6.99) | $ (4.26) | $ (15.10) | $ (5.15) |
EQUITY (Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Millions |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
---|---|---|---|
Equity [Abstract] | |||
Pension and postretirement adjustments (net of tax of $(296) for all periods presented) | $ (1,723) | $ (1,915) | $ (1,832) |
Currency translation adjustments (net of tax of $0 for all periods presented) | (3) | (3) | (2) |
Accumulated other comprehensive loss | (1,726) | (1,918) | (1,834) |
Pension and postretirement adjustments, tax | (296) | (296) | (296) |
Currency translation adjustments, tax | $ 0 | $ 0 | $ 0 |
EQUITY (Income Tax Expense Allocated to Each Component of Other Comprehensive Income) (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Other comprehensive income | ||||
Before Tax Amount | $ 64 | $ 65 | $ 192 | $ 196 |
Tax Expense | 0 | 0 | 0 | 0 |
Net of Tax Amount | 64 | 65 | 192 | 196 |
Pension and postretirement adjustments(1) | ||||
Other comprehensive income | ||||
Before Tax Amount | 64 | 65 | 192 | 196 |
Tax Expense | 0 | 0 | 0 | 0 |
Net of Tax Amount | $ 64 | $ 65 | $ 192 | $ 196 |
BENEFIT PLANS (Summary of Components of Total Net Periodic Benefit Expense for Retirement Plans) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Components of net periodic expense: | ||||
Interest cost | $ 58 | $ 54 | $ 174 | $ 162 |
Expected return on plan assets | (51) | (62) | (152) | (187) |
Amortization of experience losses | 64 | 65 | 192 | 196 |
Net periodic expense | $ 71 | $ 57 | $ 214 | $ 171 |
BENEFIT PLANS (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||||
Contributions to pension and post-retirement plans | $ 113 | $ 117 | $ 261 | $ 246 |
Estimated future employer contributions in current fiscal year | $ 72 |
INCOME TAXES (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Jul. 30, 2016 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
|
Income Taxes [Line Items] | ||||||
Gross unrecognized tax benefits | $ 148,000,000 | $ 142,000,000 | $ 148,000,000 | $ 142,000,000 | $ 137,000,000 | |
Unrecognized tax benefits that would, if recognized, impact effective tax rate | 96,000,000 | 96,000,000 | ||||
Increase (decrease) in unrecognized tax benefits | 4,000,000 | 4,000,000 | 11,000,000 | 11,000,000 | ||
Expected decrease in unrecognized tax benefits over the next 12 months | 6,000,000 | 6,000,000 | ||||
Interest and penalties recognized on balance sheet | 62,000,000 | 56,000,000 | 62,000,000 | 56,000,000 | 56,000,000 | |
Interest and penalties recognized, net of federal benefit | 41,000,000 | 37,000,000 | 41,000,000 | 37,000,000 | 36,000,000 | |
Net interest expense recognized in statement of income | $ 1,000,000 | $ 2,000,000 | $ 4,000,000 | 5,000,000 | ||
Description of income tax examination | The U.S. Internal Revenue Service ("IRS") has completed its examination of all federal tax returns of Holdings through the 2009 return, and all matters arising from such examinations have been resolved. In addition, Holdings and Sears are under examination by various state, local and foreign income tax jurisdictions for the years 2003 through 2014, and Kmart is under examination by such jurisdictions for the years 2006 through 2014. | |||||
Deferred tax asset operating loss ("NOL") carryforwards | 1,600,000,000 | |||||
Credit carryforwards | 832,000,000 | |||||
Increase (decrease) deferred tax assets valuation allowance | $ (37,000,000) | (500,000,000) | ||||
Tax benefit realized related to indefinite-life assets | 229,000,000 | |||||
Taxable gain on sales of properties to Seritage and JVs | 2,200,000,000 | |||||
Income taxes payable on sale of properties to Seritage and JVs | 0 | |||||
Utilization of net operating loss attributes and corresponding release of valuation allowance | 863,000,000 | |||||
State and city income taxes payable | 5,000,000 | |||||
Deferred tax asset valuation allowance | $ 4,800,000,000 | |||||
Effective income tax rate | 1.50% | 2.50% | ||||
Valuation Allowance, Operating Loss Carryforwards | ||||||
Income Taxes [Line Items] | ||||||
Increase (decrease) deferred tax assets valuation allowance | $ 37,000,000 | $ 500,000,000 | ||||
Sears Mexico | ||||||
Income Taxes [Line Items] | ||||||
Proceeds from divestiture of businesses | 106,000,000 | |||||
Gain on sale of investments | $ 105,000,000 | |||||
Current taxes payable | $ 0 | $ 0 | ||||
Minimum | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards expiration year | 2019 | |||||
Credit carryforwards expiration year | 2016 | |||||
Maximum | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards expiration year | 2036 | |||||
Credit carryforwards expiration year | 2036 |
SUMMARY OF SEGMENT DATA (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | [1],[2] | $ 5,029 | $ 5,750 | $ 16,086 | $ 17,843 | |||||||
COSTS AND EXPENSES | ||||||||||||
Cost of sales, buying and occupancy | [1],[3] | 4,067 | 4,488 | 12,687 | 13,628 | |||||||
Selling and administrative | 1,543 | 1,630 | 4,530 | 5,005 | ||||||||
Depreciation and amortization | 91 | 94 | 278 | 330 | ||||||||
Impairment charges | 3 | 17 | 18 | 71 | ||||||||
Gain on sales of assets | (51) | (97) | (166) | (730) | ||||||||
Total costs and expenses | 5,653 | 6,132 | 17,347 | 18,304 | ||||||||
Operating loss | (624) | (382) | (1,261) | (461) | ||||||||
Total assets | 10,865 | 12,756 | 10,865 | 12,756 | $ 11,337 | |||||||
Capital expenditures | 40 | 66 | 115 | 152 | ||||||||
Hardlines | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 2,147 | 2,452 | 6,950 | 7,690 | ||||||||
Apparel and Soft Home | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 1,178 | 1,340 | 3,808 | 4,191 | ||||||||
Food and Drug | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 736 | 916 | 2,353 | 2,754 | ||||||||
Service | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 535 | 541 | 1,617 | 1,629 | ||||||||
Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 433 | 501 | 1,358 | 1,579 | ||||||||
Kmart | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 1,888 | 2,247 | 6,248 | 7,062 | ||||||||
COSTS AND EXPENSES | ||||||||||||
Cost of sales, buying and occupancy | 1,605 | 1,774 | 5,100 | 5,562 | ||||||||
Selling and administrative | 555 | 585 | 1,597 | 1,802 | ||||||||
Depreciation and amortization | 17 | 17 | 51 | 56 | ||||||||
Impairment charges | 3 | 10 | 7 | 12 | ||||||||
Gain on sales of assets | (30) | (12) | (120) | (173) | ||||||||
Total costs and expenses | 2,150 | 2,374 | 6,635 | 7,259 | ||||||||
Operating loss | (262) | (127) | (387) | (197) | ||||||||
Total assets | 2,857 | 3,650 | 2,857 | 3,650 | ||||||||
Capital expenditures | 11 | 10 | 34 | 21 | ||||||||
Kmart | Hardlines | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 496 | 620 | 1,722 | 1,986 | ||||||||
Kmart | Apparel and Soft Home | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 639 | 701 | 2,127 | 2,274 | ||||||||
Kmart | Food and Drug | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 735 | 915 | 2,349 | 2,749 | ||||||||
Kmart | Service | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 2 | 3 | 7 | 10 | ||||||||
Kmart | Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 16 | 8 | 43 | 43 | ||||||||
Sears Domestic | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 3,141 | 3,503 | 9,838 | 10,781 | ||||||||
COSTS AND EXPENSES | ||||||||||||
Cost of sales, buying and occupancy | 2,462 | 2,714 | 7,587 | 8,066 | ||||||||
Selling and administrative | 988 | 1,045 | 2,933 | 3,203 | ||||||||
Depreciation and amortization | 74 | 77 | 227 | 274 | ||||||||
Impairment charges | 0 | 7 | 11 | 59 | ||||||||
Gain on sales of assets | (21) | (85) | (46) | (557) | ||||||||
Total costs and expenses | 3,503 | 3,758 | 10,712 | 11,045 | ||||||||
Operating loss | (362) | (255) | (874) | (264) | ||||||||
Total assets | 8,008 | 9,106 | 8,008 | 9,106 | ||||||||
Capital expenditures | 29 | 56 | 81 | 131 | ||||||||
Sears Domestic | Hardlines | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 1,651 | 1,832 | 5,228 | 5,704 | ||||||||
Sears Domestic | Apparel and Soft Home | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 539 | 639 | 1,681 | 1,917 | ||||||||
Sears Domestic | Food and Drug | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 1 | 1 | 4 | 5 | ||||||||
Sears Domestic | Service | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | 533 | 538 | 1,610 | 1,619 | ||||||||
Sears Domestic | Other | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Merchandise sales and services | $ 417 | $ 493 | $ 1,315 | $ 1,536 | ||||||||
|
SUPPLEMENTAL FINANCIAL INFORMATION (Other Long-Term Liabilities) (Detail) - USD ($) $ in Millions |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
---|---|---|---|
Supplemental Financial Information Disclosure [Abstract] | |||
Unearned revenues | $ 669 | $ 694 | $ 703 |
Self-insurance reserves | 574 | 567 | 604 |
Other | 473 | 470 | 504 |
Total | $ 1,716 | $ 1,731 | $ 1,811 |
LEGAL PROCEEDINGS (Legal Proceedings) (Details) |
3 Months Ended |
---|---|
Oct. 31, 2015
lawsuit
| |
Commitments and Contingencies Disclosure [Abstract] | |
Number of claims filed | 4 |
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
---|---|---|---|
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Long-term deferred tax liabilities | $ 890 | $ 893 | $ 959 |
Revolving Credit Facility | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Unamortized debt issuance expense | $ 40 | $ 49 | 53 |
New Accounting Pronouncement, Early Adoption, Effect | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Long-term deferred tax liabilities | 422 | ||
New Accounting Pronouncement, Early Adoption, Effect | Long-term Debt and Capitalized Lease Obligations | |||
New Accounting Pronouncement, Early Adoption [Line Items] | |||
Deferred finance costs | $ 13 |
RELATED PARTY DISCLOSURE (Details) |
9 Months Ended |
---|---|
Oct. 29, 2016
mutual_fund
| |
Fairholme | |
Related Party Transaction [Line Items] | |
Number of mutual funds the company provides investment management services to | 3 |
Sears Holdings Corporation | Esl Investments Inc | |
Related Party Transaction [Line Items] | |
Beneficial interest acquired by related party, percentage | 50.00% |
Days in which common stock are subject to be acquired by related party upon the exercise of warrants | 60 days |
Sears Holdings Corporation | Fairholme | |
Related Party Transaction [Line Items] | |
Beneficial interest acquired by related party, percentage | 26.00% |
Days in which common stock are subject to be acquired by related party upon the exercise of warrants | 60 days |
RELATED PARTY DISCLOSURE (Unsecured Commercial Paper) (Details) $ in Thousands |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Oct. 29, 2016
USD ($)
Day
|
Oct. 31, 2015
USD ($)
Day
|
Jan. 30, 2016
USD ($)
|
Sep. 15, 2014 |
|||
Related Party Transaction [Line Items] | ||||||
Unsecured commercial paper | $ 248,000 | $ 9,000 | $ 0 | |||
Cash interest paid | [1] | 186,000 | $ 191,000 | |||
Esl Investments Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Debt Instrument, interest rate, stated percentage | 5.00% | |||||
Unsecured commercial paper | 244,000 | |||||
Esl Investments Inc | Chief Executive Officer | ||||||
Related Party Transaction [Line Items] | ||||||
Unsecured commercial paper | 154,000 | |||||
Esl Investments Inc | SRAC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Unsecured commercial paper | $ 244,000 | |||||
Esl Investments Inc | SRAC | Commercial Paper | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, weighted average maturity period | Day | 25.7 | 32.0 | ||||
Debt Instrument, interest rate, stated percentage | 7.90% | 4.55% | ||||
Commercial paper, weighted average principal amount outstanding | $ 87,200 | $ 12,000 | ||||
Cash interest paid | $ 4,000 | |||||
Fairholme | SRAC | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, weighted average maturity period | Day | 62.5 | |||||
Debt Instrument, interest rate, stated percentage | 7.42% | |||||
Commercial paper, weighted average principal amount outstanding | $ 1,000 | |||||
Unsecured commercial paper | 5,000 | |||||
Interest expense on commercial paper | 76 | |||||
Fairholme | SRAC | Maximum | ||||||
Related Party Transaction [Line Items] | ||||||
Unsecured commercial paper | $ 5,000 | |||||
|
RELATED PARTY DISCLOSURE (Term Loan and Loan Facility) (Details) - USD ($) |
9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Apr. 22, 2016 |
Apr. 08, 2016 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Sep. 01, 2016 |
Jan. 30, 2016 |
Sep. 15, 2014 |
|||
Related Party Transaction [Line Items] | |||||||||
Proceeds from debt issuances | [1] | $ 1,528,000,000 | $ 0 | ||||||
Secured Loan Facility | Loan Facility, Maturity July 2017 | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | $ 500,000,000 | 500,000,000 | |||||||
Proceeds from debt issuances | $ 250,000,000 | 250,000,000 | |||||||
Senior Secured Note | 2016 Term Loan | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | 750,000,000 | 750,000,000 | |||||||
Proceeds from debt issuances | 246,000,000 | ||||||||
Esl Investments Inc | |||||||||
Related Party Transaction [Line Items] | |||||||||
Secured short-term loan | 0 | $ 0 | $ 0 | $ 400,000,000 | |||||
Esl Investments Inc | Secured Debt | Second Lien Term Loan | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | $ 300,000,000 | ||||||||
Affiliated Entity | Secured Loan Facility | Loan Facility, Maturity July 2017 | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | 216,000,000 | ||||||||
Proceeds from debt issuances | 250,000,000 | ||||||||
Affiliated Entity | Senior Secured Note | 2016 Term Loan | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | $ 750,000,000 | ||||||||
Proceeds from debt issuances | 146,000,000 | ||||||||
Company's Domestic Pension Plan | Senior Secured Note | 2016 Term Loan | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | 100,000,000 | ||||||||
Proceeds from debt issuances | 100,000,000 | ||||||||
JPPLLC and JPP II, LLC | Senior Secured Note | 2016 Term Loan | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | $ 150,000,000 | ||||||||
JPPLLC and JPP II, LLC | Secured Debt | Second Lien Term Loan | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt instrument, face amount | $ 300,000,000 | ||||||||
|
RELATED PARTY DISCLOSURE (Senior Secured and Subsidiary Notes) (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Aug. 28, 2015 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
|||
Related Party Transaction [Line Items] | |||||||
Repayments of debt | [1] | $ 50 | $ 1,387 | ||||
Senior Secured Note | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of debt | $ 936 | ||||||
Senior Secured Note | Pension Plan | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of debt | $ 110 | ||||||
Esl Investments Inc | |||||||
Related Party Transaction [Line Items] | |||||||
Senior secured notes | 11 | 11 | 11 | $ 11 | |||
Esl Investments Inc | Senior Secured Note | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of debt | 165 | ||||||
Esl Investments Inc | Unsecured Senior Notes | |||||||
Related Party Transaction [Line Items] | |||||||
Subsidiary notes | 3 | 3 | 3 | 3 | |||
Fairholme | |||||||
Related Party Transaction [Line Items] | |||||||
Senior secured notes | 43 | 46 | 43 | 22 | |||
Subsidiary notes | $ 14 | $ 14 | $ 14 | $ 14 | |||
Fairholme | Senior Secured Note | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of debt | $ 207 | ||||||
|
RELATED PARTY DISCLOSURE (Senior Unsecured Notes and Warrants) (Details) - USD ($) $ in Millions |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
---|---|---|---|
Esl Investments Inc | |||
Related Party Transaction [Line Items] | |||
Senior unsecured notes | $ 193 | $ 193 | $ 201 |
Class of warrant or right, outstanding (in shares) | 10,033,472 | 10,033,472 | 10,529,740 |
Fairholme | |||
Related Party Transaction [Line Items] | |||
Senior unsecured notes | $ 357 | $ 360 | $ 358 |
Class of warrant or right, outstanding (in shares) | 6,722,805 | 6,839,379 | 6,857,130 |
RELATED PARTY DISCLOSURE (Sears Canada and Lands' End) (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 29, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Oct. 29, 2016
USD ($)
|
Oct. 31, 2015
USD ($)
|
Jul. 31, 2016
renewal_option
|
Jan. 30, 2016
USD ($)
|
|
Lands' End, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Payable to related party | $ 1 | $ 1 | $ 1 | |||
Due from affiliate, current | $ 4 | $ 4 | ||||
Related party transaction, other revenues from transactions with related party | 18 | 18 | 48 | 52 | ||
Related party transaction, expenses from transactions with related party | $ 2 | $ 2 | $ 7 | $ 6 | ||
Lands' End, Inc. | Transition Services Agreement | ||||||
Related Party Transaction [Line Items] | ||||||
Number of one-year renewal options | renewal_option | 3 | |||||
Sears Canada | Esl Investments Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Beneficial interest acquired by related party, percentage | 45.00% | |||||
Sears Canada | Fairholme | ||||||
Related Party Transaction [Line Items] | ||||||
Beneficial interest acquired by related party, percentage | 20.00% | |||||
Lands' End, Inc. | Esl Investments Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Beneficial interest acquired by related party, percentage | 60.00% | |||||
Lands' End, Inc. | Fairholme | ||||||
Related Party Transaction [Line Items] | ||||||
Beneficial interest acquired by related party, percentage | 11.00% |
RELATED PARTY DISCLOSURE (SHO) (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
May 26, 2016 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
|
Sears Hometown and Outlet Stores, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Related party receivables, repayment term | 10 days | |||||
Due from affiliate, current | $ 20 | $ 85 | $ 20 | $ 85 | $ 51 | |
Proceeds from sale of inventory and shared corporate services to affiliate | 302 | 359 | 958 | 1,100 | ||
Payments for commissions to affiliate | $ 21 | $ 22 | $ 65 | $ 71 | ||
Merchandise and Services Agreement | Sears Hometown and Outlet Stores, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Related party agreement expiration date | Feb. 01, 2020 | |||||
Sears Hometown and Outlet Stores, Inc. | Esl Investments Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Beneficial interest acquired by related party, percentage | 57.00% |
RELATED PARTY DISCLOSURE (Seritage) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
Jan. 30, 2016 |
||||
Related Party Transaction [Line Items] | ||||||||
Prepaid expenses and other current assets | [1] | $ 304 | $ 242 | $ 304 | $ 242 | $ 216 | ||
Sale-leaseback transaction, rent expense | 22 | 27 | 72 | 43 | ||||
Amortization of deferred gain on sale-leaseback | 22 | 23 | $ 66 | 30 | ||||
Duration of transition services agreement | 18 months | |||||||
Seritage Growth Properties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Annual aggregate base rent under master lease | $ 134 | |||||||
Sale-leaseback transaction, minimum lease payment annual increase, percentage | 2.00% | |||||||
Sale-leaseback transaction, rent expense | 22 | 22 | $ 64 | 27 | ||||
Amortization of deferred gain on sale-leaseback | 14 | 15 | 44 | 20 | ||||
Straight line rent | 36 | 37 | 108 | 47 | ||||
Annual aggregate installment expenses under Master Lease | 70 | |||||||
Sale leaseback transaction, installment expense | 17 | 17 | 51 | 22 | ||||
Due from affiliate, current | 14 | 8 | 14 | 8 | 7 | |||
Prepaid Expenses and Other Current Assets | ||||||||
Related Party Transaction [Line Items] | ||||||||
Prepaid rent expense | $ 9 | $ 9 | ||||||
Prepaid Expenses and Other Current Assets | Seritage Growth Properties | ||||||||
Related Party Transaction [Line Items] | ||||||||
Prepaid expenses and other current assets | [1] | $ 9 | $ 9 | $ 9 | ||||
Seritage Growth Properties | Esl Investments Inc | ||||||||
Related Party Transaction [Line Items] | ||||||||
Beneficial interest acquired by related party, percentage | 9.80% | |||||||
Beneficial interest acquired by related party, limited partnership percentage | 43.50% | |||||||
Seritage Growth Properties | Common Class A | Fairholme | ||||||||
Related Party Transaction [Line Items] | ||||||||
Beneficial interest acquired by related party, percentage | 14.00% | |||||||
Seritage Growth Properties | Common Class C | Fairholme | ||||||||
Related Party Transaction [Line Items] | ||||||||
Beneficial interest acquired by related party, percentage | 100.00% | |||||||
|
GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION (Narrative) (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
|
Guarantor Subsidiaries | |||
Condensed Financial Statements, Captions [Line Items] | |||
Debt instrument collateral percentage of outstanding common stock | 100.00% | ||
Senior Secured Note | |||
Condensed Financial Statements, Captions [Line Items] | |||
Debt Instrument, interest rate, stated percentage | 6.625% | ||
Debt instrument, maturity year | 2018 | ||
Long-term debt | $ 302 | $ 302 | $ 302 |
GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION (Condensed Consolidating Balance Sheet) (Details) - USD ($) $ in Millions |
Oct. 29, 2016 |
Jan. 30, 2016 |
Oct. 31, 2015 |
Jan. 31, 2015 |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Current assets | |||||||||||||||
Cash and cash equivalents | $ 258 | $ 238 | $ 294 | $ 250 | |||||||||||
Intercompany receivables | 0 | 0 | 0 | ||||||||||||
Accounts receivable | [1] | 372 | 419 | 475 | |||||||||||
Merchandise inventories | 5,032 | 5,172 | 6,208 | ||||||||||||
Prepaid expenses and other current assets | [2] | 304 | 216 | 242 | |||||||||||
Total current assets | 5,966 | 6,045 | 7,219 | ||||||||||||
Total property and equipment, net | 2,392 | 2,631 | 2,668 | ||||||||||||
Goodwill and intangible assets | 2,173 | 2,178 | 2,359 | ||||||||||||
Other assets | 334 | 483 | 510 | ||||||||||||
Investment in subsidiaries | 0 | 0 | 0 | ||||||||||||
TOTAL ASSETS | 10,865 | 11,337 | 12,756 | ||||||||||||
Current liabilities | |||||||||||||||
Short-term borrowings | [3] | 618 | 797 | 686 | |||||||||||
Current portion of long-term debt and capitalized lease obligations | [4] | 594 | 71 | 71 | |||||||||||
Merchandise payables | 1,556 | 1,574 | 2,295 | ||||||||||||
Intercompany payables | 0 | 0 | 0 | ||||||||||||
Other current liabilities | 2,962 | 2,996 | 3,044 | ||||||||||||
Total current liabilities | 5,730 | 5,438 | 6,096 | ||||||||||||
Long-term debt and capitalized lease obligations | [5] | 3,087 | 2,108 | 2,111 | |||||||||||
Pension and postretirement benefits | 1,997 | 2,206 | 2,133 | ||||||||||||
Deferred gain on sale-leaseback | 656 | 753 | 775 | ||||||||||||
Sale-leaseback financing obligation | 164 | 164 | 164 | ||||||||||||
Long-term deferred tax liabilities | 890 | 893 | 959 | ||||||||||||
Other long-term liabilities | 1,716 | 1,731 | 1,811 | ||||||||||||
Total Liabilities | 14,240 | 13,293 | 14,049 | ||||||||||||
DEFICIT | |||||||||||||||
Shareholder's equity (deficit) | (3,380) | (1,963) | (1,300) | ||||||||||||
Noncontrolling interest | 5 | 7 | 7 | ||||||||||||
Total Equity (Deficit) | (3,375) | (1,956) | (1,293) | (945) | |||||||||||
TOTAL LIABILITIES AND DEFICIT | 10,865 | 11,337 | 12,756 | ||||||||||||
Reportable Legal Entities | Parent | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |||||||||||
Intercompany receivables | 0 | 0 | 0 | ||||||||||||
Accounts receivable | 0 | 7 | 9 | ||||||||||||
Merchandise inventories | 0 | 0 | 0 | ||||||||||||
Prepaid expenses and other current assets | 114 | 114 | 39 | ||||||||||||
Total current assets | 114 | 121 | 48 | ||||||||||||
Total property and equipment, net | 0 | 0 | 0 | ||||||||||||
Goodwill and intangible assets | 0 | 0 | 0 | ||||||||||||
Other assets | 0 | 0 | 0 | ||||||||||||
Investment in subsidiaries | 9,751 | 10,419 | 11,328 | ||||||||||||
TOTAL ASSETS | 9,865 | 10,540 | 11,376 | ||||||||||||
Current liabilities | |||||||||||||||
Short-term borrowings | 0 | 0 | 0 | ||||||||||||
Current portion of long-term debt and capitalized lease obligations | 0 | 0 | 0 | ||||||||||||
Merchandise payables | 0 | 0 | 0 | ||||||||||||
Intercompany payables | 12,431 | 11,892 | 11,987 | ||||||||||||
Other current liabilities | 20 | 20 | 28 | ||||||||||||
Total current liabilities | 12,451 | 11,912 | 12,015 | ||||||||||||
Long-term debt and capitalized lease obligations | 718 | 685 | 675 | ||||||||||||
Pension and postretirement benefits | 0 | 0 | 0 | ||||||||||||
Deferred gain on sale-leaseback | 0 | 0 | 0 | ||||||||||||
Sale-leaseback financing obligation | 0 | 0 | 0 | ||||||||||||
Long-term deferred tax liabilities | 58 | 58 | 59 | ||||||||||||
Other long-term liabilities | 0 | 0 | 0 | ||||||||||||
Total Liabilities | 13,227 | 12,655 | 12,749 | ||||||||||||
DEFICIT | |||||||||||||||
Shareholder's equity (deficit) | (3,362) | (2,115) | (1,373) | ||||||||||||
Noncontrolling interest | 0 | 0 | 0 | ||||||||||||
Total Equity (Deficit) | (3,362) | (2,115) | (1,373) | ||||||||||||
TOTAL LIABILITIES AND DEFICIT | 9,865 | 10,540 | 11,376 | ||||||||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | 226 | 200 | 256 | 219 | |||||||||||
Intercompany receivables | 0 | 0 | 0 | ||||||||||||
Accounts receivable | 351 | 383 | 441 | ||||||||||||
Merchandise inventories | 5,032 | 5,172 | 6,208 | ||||||||||||
Prepaid expenses and other current assets | 505 | 453 | 611 | ||||||||||||
Total current assets | 6,114 | 6,208 | 7,516 | ||||||||||||
Total property and equipment, net | 1,638 | 1,829 | 1,852 | ||||||||||||
Goodwill and intangible assets | 362 | 269 | 270 | ||||||||||||
Other assets | 235 | 265 | 268 | ||||||||||||
Investment in subsidiaries | 27,194 | 26,616 | 25,701 | ||||||||||||
TOTAL ASSETS | 35,543 | 35,187 | 35,607 | ||||||||||||
Current liabilities | |||||||||||||||
Short-term borrowings | 618 | 797 | 686 | ||||||||||||
Current portion of long-term debt and capitalized lease obligations | 594 | 70 | 69 | ||||||||||||
Merchandise payables | 1,556 | 1,574 | 2,295 | ||||||||||||
Intercompany payables | 15,133 | 15,043 | 15,194 | ||||||||||||
Other current liabilities | 2,341 | 2,273 | 2,215 | ||||||||||||
Total current liabilities | 20,242 | 19,757 | 20,459 | ||||||||||||
Long-term debt and capitalized lease obligations | 3,770 | 2,998 | 3,051 | ||||||||||||
Pension and postretirement benefits | 1,993 | 2,201 | 2,128 | ||||||||||||
Deferred gain on sale-leaseback | 656 | 753 | 775 | ||||||||||||
Sale-leaseback financing obligation | 164 | 164 | 164 | ||||||||||||
Long-term deferred tax liabilities | 15 | 0 | 2 | ||||||||||||
Other long-term liabilities | 826 | 832 | 865 | ||||||||||||
Total Liabilities | 27,666 | 26,705 | 27,444 | ||||||||||||
DEFICIT | |||||||||||||||
Shareholder's equity (deficit) | 7,877 | 8,482 | 8,163 | ||||||||||||
Noncontrolling interest | 0 | 0 | 0 | ||||||||||||
Total Equity (Deficit) | 7,877 | 8,482 | 8,163 | ||||||||||||
TOTAL LIABILITIES AND DEFICIT | 35,543 | 35,187 | 35,607 | ||||||||||||
Reportable Legal Entities | Non- Guarantor Subsidiaries | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | 32 | 38 | 38 | 31 | |||||||||||
Intercompany receivables | 27,564 | 26,935 | 27,181 | ||||||||||||
Accounts receivable | 21 | 29 | 25 | ||||||||||||
Merchandise inventories | 0 | 0 | 0 | ||||||||||||
Prepaid expenses and other current assets | 246 | 257 | 261 | ||||||||||||
Total current assets | 27,863 | 27,259 | 27,505 | ||||||||||||
Total property and equipment, net | 754 | 802 | 816 | ||||||||||||
Goodwill and intangible assets | 1,909 | 1,909 | 2,089 | ||||||||||||
Other assets | 1,594 | 1,910 | 2,129 | ||||||||||||
Investment in subsidiaries | 0 | 0 | 0 | ||||||||||||
TOTAL ASSETS | 32,120 | 31,880 | 32,539 | ||||||||||||
Current liabilities | |||||||||||||||
Short-term borrowings | 0 | 0 | 0 | ||||||||||||
Current portion of long-term debt and capitalized lease obligations | 0 | 1 | 2 | ||||||||||||
Merchandise payables | 0 | 0 | 0 | ||||||||||||
Intercompany payables | 0 | 0 | 0 | ||||||||||||
Other current liabilities | 1,162 | 1,311 | 1,470 | ||||||||||||
Total current liabilities | 1,162 | 1,312 | 1,472 | ||||||||||||
Long-term debt and capitalized lease obligations | 0 | 1 | 39 | ||||||||||||
Pension and postretirement benefits | 4 | 5 | 5 | ||||||||||||
Deferred gain on sale-leaseback | 0 | 0 | 0 | ||||||||||||
Sale-leaseback financing obligation | 0 | 0 | 0 | ||||||||||||
Long-term deferred tax liabilities | 774 | 873 | 968 | ||||||||||||
Other long-term liabilities | 1,107 | 1,128 | 1,181 | ||||||||||||
Total Liabilities | 3,047 | 3,319 | 3,665 | ||||||||||||
DEFICIT | |||||||||||||||
Shareholder's equity (deficit) | 29,073 | 28,561 | 28,874 | ||||||||||||
Noncontrolling interest | 0 | 0 | 0 | ||||||||||||
Total Equity (Deficit) | 29,073 | 28,561 | 28,874 | ||||||||||||
TOTAL LIABILITIES AND DEFICIT | 32,120 | 31,880 | 32,539 | ||||||||||||
Eliminations | |||||||||||||||
Current assets | |||||||||||||||
Cash and cash equivalents | 0 | 0 | 0 | $ 0 | |||||||||||
Intercompany receivables | (27,564) | (26,935) | (27,181) | ||||||||||||
Accounts receivable | 0 | 0 | 0 | ||||||||||||
Merchandise inventories | 0 | 0 | 0 | ||||||||||||
Prepaid expenses and other current assets | (561) | (608) | (669) | ||||||||||||
Total current assets | (28,125) | (27,543) | (27,850) | ||||||||||||
Total property and equipment, net | 0 | 0 | 0 | ||||||||||||
Goodwill and intangible assets | (98) | 0 | 0 | ||||||||||||
Other assets | (1,495) | (1,692) | (1,887) | ||||||||||||
Investment in subsidiaries | (36,945) | (37,035) | (37,029) | ||||||||||||
TOTAL ASSETS | (66,663) | (66,270) | (66,766) | ||||||||||||
Current liabilities | |||||||||||||||
Short-term borrowings | 0 | 0 | 0 | ||||||||||||
Current portion of long-term debt and capitalized lease obligations | 0 | 0 | 0 | ||||||||||||
Merchandise payables | 0 | 0 | 0 | ||||||||||||
Intercompany payables | (27,564) | (26,935) | (27,181) | ||||||||||||
Other current liabilities | (561) | (608) | (669) | ||||||||||||
Total current liabilities | (28,125) | (27,543) | (27,850) | ||||||||||||
Long-term debt and capitalized lease obligations | (1,401) | (1,576) | (1,654) | ||||||||||||
Pension and postretirement benefits | 0 | 0 | 0 | ||||||||||||
Deferred gain on sale-leaseback | 0 | 0 | 0 | ||||||||||||
Sale-leaseback financing obligation | 0 | 0 | 0 | ||||||||||||
Long-term deferred tax liabilities | 43 | (38) | (70) | ||||||||||||
Other long-term liabilities | (217) | (229) | (235) | ||||||||||||
Total Liabilities | (29,700) | (29,386) | (29,809) | ||||||||||||
DEFICIT | |||||||||||||||
Shareholder's equity (deficit) | (36,968) | (36,891) | (36,964) | ||||||||||||
Noncontrolling interest | 5 | 7 | 7 | ||||||||||||
Total Equity (Deficit) | (36,963) | (36,884) | (36,957) | ||||||||||||
TOTAL LIABILITIES AND DEFICIT | $ (66,663) | $ (66,270) | $ (66,766) | ||||||||||||
|
GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION (Condensed Consolidating Statement of Operations) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Merchandise sales and services | [1],[2] | $ 5,029 | $ 5,750 | $ 16,086 | $ 17,843 | ||||||
Cost of sales, buying and occupancy | [1],[3] | 4,067 | 4,488 | 12,687 | 13,628 | ||||||
Selling and administrative | 1,543 | 1,630 | 4,530 | 5,005 | |||||||
Depreciation and amortization | 91 | 94 | 278 | 330 | |||||||
Impairment charges | 3 | 17 | 18 | 71 | |||||||
Gain on sales of assets | (51) | (97) | (166) | (730) | |||||||
Total costs and expenses | 5,653 | 6,132 | 17,347 | 18,304 | |||||||
Operating income (loss) | (624) | (382) | (1,261) | (461) | |||||||
Interest expense | (105) | (74) | (289) | (249) | |||||||
Interest and investment income (loss) | (8) | 17 | (25) | (27) | |||||||
Loss before income taxes | (737) | (439) | (1,575) | (737) | |||||||
Income tax (expense) benefit | (11) | (14) | (39) | 189 | |||||||
Equity (deficit) in earnings in subsidiaries | 0 | 0 | 0 | 0 | |||||||
Net income (loss) | (748) | (453) | (1,614) | (548) | |||||||
Income attributable to noncontrolling interests | 0 | (1) | 0 | (1) | |||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | (748) | (454) | (1,614) | (549) | |||||||
Reportable Legal Entities | Parent | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Merchandise sales and services | 0 | 0 | 0 | 0 | |||||||
Cost of sales, buying and occupancy | 0 | 0 | 0 | 0 | |||||||
Selling and administrative | 1 | 1 | 3 | 2 | |||||||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||||||
Impairment charges | 0 | 0 | 0 | 0 | |||||||
Gain on sales of assets | 0 | 0 | 0 | 0 | |||||||
Total costs and expenses | 1 | 1 | 3 | 2 | |||||||
Operating income (loss) | (1) | (1) | (3) | (2) | |||||||
Interest expense | (99) | (60) | (288) | (204) | |||||||
Interest and investment income (loss) | 4 | (3) | 15 | (14) | |||||||
Loss before income taxes | (96) | (64) | (276) | (220) | |||||||
Income tax (expense) benefit | 0 | 0 | 0 | 0 | |||||||
Equity (deficit) in earnings in subsidiaries | (729) | (390) | (1,317) | (329) | |||||||
Net income (loss) | (825) | (454) | (1,593) | (549) | |||||||
Income attributable to noncontrolling interests | 0 | 0 | |||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | (454) | (549) | |||||||||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Merchandise sales and services | 5,045 | 5,766 | 16,173 | 17,954 | |||||||
Cost of sales, buying and occupancy | 4,190 | 4,616 | 13,052 | 13,997 | |||||||
Selling and administrative | 1,628 | 1,706 | 4,823 | 5,326 | |||||||
Depreciation and amortization | 73 | 76 | 224 | 276 | |||||||
Impairment charges | 3 | 17 | 18 | 71 | |||||||
Gain on sales of assets | (51) | (97) | (262) | (722) | |||||||
Total costs and expenses | 5,843 | 6,318 | 17,855 | 18,948 | |||||||
Operating income (loss) | (798) | (552) | (1,682) | (994) | |||||||
Interest expense | (160) | (117) | (464) | (355) | |||||||
Interest and investment income (loss) | 42 | 8 | 118 | 28 | |||||||
Loss before income taxes | (916) | (661) | (2,028) | (1,321) | |||||||
Income tax (expense) benefit | 38 | 33 | 108 | 332 | |||||||
Equity (deficit) in earnings in subsidiaries | 146 | 138 | 432 | 342 | |||||||
Net income (loss) | (732) | (490) | (1,488) | (647) | |||||||
Income attributable to noncontrolling interests | 0 | 0 | |||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | (490) | (647) | |||||||||
Reportable Legal Entities | Non- Guarantor Subsidiaries | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Merchandise sales and services | 714 | 725 | 2,092 | 2,160 | |||||||
Cost of sales, buying and occupancy | 272 | 291 | 784 | 838 | |||||||
Selling and administrative | 249 | 245 | 734 | 741 | |||||||
Depreciation and amortization | 18 | 18 | 54 | 54 | |||||||
Impairment charges | 0 | 0 | 0 | 0 | |||||||
Gain on sales of assets | 0 | 0 | (2) | (8) | |||||||
Total costs and expenses | 539 | 554 | 1,570 | 1,625 | |||||||
Operating income (loss) | 175 | 171 | 522 | 535 | |||||||
Interest expense | (3) | (21) | (9) | (63) | |||||||
Interest and investment income (loss) | (15) | 136 | 196 | 332 | |||||||
Loss before income taxes | 157 | 286 | 709 | 804 | |||||||
Income tax (expense) benefit | (8) | (47) | (106) | (143) | |||||||
Equity (deficit) in earnings in subsidiaries | 0 | 0 | 0 | 0 | |||||||
Net income (loss) | 149 | 239 | 603 | 661 | |||||||
Income attributable to noncontrolling interests | (1) | (1) | |||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | 238 | 660 | |||||||||
Eliminations | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Merchandise sales and services | (730) | (741) | (2,179) | (2,271) | |||||||
Cost of sales, buying and occupancy | (395) | (419) | (1,149) | (1,207) | |||||||
Selling and administrative | (335) | (322) | (1,030) | (1,064) | |||||||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||||||
Impairment charges | 0 | 0 | 0 | ||||||||
Gain on sales of assets | 0 | 0 | 98 | 0 | |||||||
Total costs and expenses | (730) | (741) | (2,081) | (2,271) | |||||||
Operating income (loss) | 0 | 0 | (98) | 0 | |||||||
Interest expense | 157 | 124 | 472 | 373 | |||||||
Interest and investment income (loss) | (39) | (124) | (354) | (373) | |||||||
Loss before income taxes | 118 | 0 | 20 | 0 | |||||||
Income tax (expense) benefit | (41) | 0 | (41) | 0 | |||||||
Equity (deficit) in earnings in subsidiaries | 583 | 252 | 885 | (13) | |||||||
Net income (loss) | $ 660 | 252 | $ 864 | (13) | |||||||
Income attributable to noncontrolling interests | 0 | 0 | |||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ 252 | $ (13) | |||||||||
|
GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION (Condensed Consolidating Statement of Comprehensive Income) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
|
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | $ (748) | $ (453) | $ (1,614) | $ (548) |
Other comprehensive income | ||||
Pension and postretirement adjustments, net of tax | 64 | 65 | 192 | 196 |
Unrealized net gain, net of tax | 0 | 0 | 0 | 0 |
Total other comprehensive income | 64 | 65 | 192 | 196 |
Comprehensive income (loss) | (684) | (388) | (1,422) | (352) |
Comprehensive loss attributable to noncontrolling interests | 0 | (1) | 0 | (1) |
Comprehensive loss attributable to Holdings' shareholders | (684) | (389) | (1,422) | (353) |
Reportable Legal Entities | Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | (825) | (454) | (1,593) | (549) |
Other comprehensive income | ||||
Pension and postretirement adjustments, net of tax | 0 | 0 | 0 | 0 |
Unrealized net gain, net of tax | 0 | 0 | 0 | 0 |
Total other comprehensive income | 0 | 0 | 0 | 0 |
Comprehensive income (loss) | (825) | (454) | (1,593) | (549) |
Comprehensive loss attributable to noncontrolling interests | 0 | 0 | ||
Comprehensive loss attributable to Holdings' shareholders | (454) | (549) | ||
Reportable Legal Entities | Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | (732) | (490) | (1,488) | (647) |
Other comprehensive income | ||||
Pension and postretirement adjustments, net of tax | 64 | 65 | 192 | 196 |
Unrealized net gain, net of tax | 0 | 0 | 0 | 0 |
Total other comprehensive income | 64 | 65 | 192 | 196 |
Comprehensive income (loss) | (668) | (425) | (1,296) | (451) |
Comprehensive loss attributable to noncontrolling interests | 0 | 0 | ||
Comprehensive loss attributable to Holdings' shareholders | (425) | (451) | ||
Reportable Legal Entities | Non- Guarantor Subsidiaries | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 149 | 239 | 603 | 661 |
Other comprehensive income | ||||
Pension and postretirement adjustments, net of tax | 0 | 0 | 0 | 0 |
Unrealized net gain, net of tax | 85 | 27 | 148 | 11 |
Total other comprehensive income | 85 | 27 | 148 | 11 |
Comprehensive income (loss) | 234 | 266 | 751 | 672 |
Comprehensive loss attributable to noncontrolling interests | 0 | 0 | ||
Comprehensive loss attributable to Holdings' shareholders | 266 | 672 | ||
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income (loss) | 660 | 252 | 864 | (13) |
Other comprehensive income | ||||
Pension and postretirement adjustments, net of tax | 0 | 0 | 0 | 0 |
Unrealized net gain, net of tax | (85) | (27) | (148) | (11) |
Total other comprehensive income | (85) | (27) | (148) | (11) |
Comprehensive income (loss) | $ 575 | 225 | $ 716 | (24) |
Comprehensive loss attributable to noncontrolling interests | (1) | (1) | ||
Comprehensive loss attributable to Holdings' shareholders | $ 224 | $ (25) |
GUARANTOR/NON-GUARANTOR SUBSIDIARY FINANCIAL INFORMATION (Condensed Consolidating Statement of Cash Flows) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 29, 2016 |
Oct. 31, 2015 |
Oct. 29, 2016 |
Oct. 31, 2015 |
||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Net cash provided by (used in) operating activities | $ (1,408) | $ (2,054) | |||||
Proceeds from sales of property and investments | [1] | 274 | 2,708 | ||||
Purchases of property and equipment | $ (40) | $ (66) | (115) | (152) | |||
Net investing with Affiliates | 0 | 0 | |||||
Net cash provided by investing activities | 159 | 2,556 | |||||
Proceeds from debt issuances | 1,528 | ||||||
Repayments of long-term debt | (50) | (1,387) | |||||
Increase (decrease) in short-term borrowings, primarily 90 days or less | (179) | 471 | |||||
Proceeds from sale-leaseback financing | [1] | 0 | 508 | ||||
Debt issuance costs | (30) | (50) | |||||
Intercompany dividend | 0 | 0 | |||||
Net borrowing with Affiliates | 0 | 0 | |||||
Net cash provided by (used in) financing activities | 1,269 | (458) | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 20 | 44 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 238 | 250 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 258 | 294 | 258 | 294 | |||
Reportable Legal Entities | Parent | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Net cash provided by (used in) operating activities | 209 | 249 | |||||
Proceeds from sales of property and investments | 0 | ||||||
Purchases of property and equipment | 0 | ||||||
Net investing with Affiliates | (209) | (249) | |||||
Net cash provided by investing activities | (209) | (249) | |||||
Proceeds from debt issuances | 0 | ||||||
Repayments of long-term debt | 0 | 0 | |||||
Increase (decrease) in short-term borrowings, primarily 90 days or less | 0 | 0 | |||||
Proceeds from sale-leaseback financing | 0 | ||||||
Debt issuance costs | 0 | 0 | |||||
Intercompany dividend | 0 | 0 | |||||
Net borrowing with Affiliates | 0 | 0 | |||||
Net cash provided by (used in) financing activities | 0 | 0 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 0 | 0 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 0 | 0 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 0 | 0 | 0 | 0 | |||
Reportable Legal Entities | Guarantor Subsidiaries | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Net cash provided by (used in) operating activities | (1,883) | (2,691) | |||||
Proceeds from sales of property and investments | 161 | 2,703 | |||||
Purchases of property and equipment | (108) | (146) | |||||
Net investing with Affiliates | 0 | 0 | |||||
Net cash provided by investing activities | 53 | 2,557 | |||||
Proceeds from debt issuances | 1,528 | ||||||
Repayments of long-term debt | (49) | (1,385) | |||||
Increase (decrease) in short-term borrowings, primarily 90 days or less | (179) | 471 | |||||
Proceeds from sale-leaseback financing | 508 | ||||||
Debt issuance costs | (30) | (50) | |||||
Intercompany dividend | 0 | ||||||
Net borrowing with Affiliates | 586 | 627 | |||||
Net cash provided by (used in) financing activities | 1,856 | 171 | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 26 | 37 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 200 | 219 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 226 | 256 | 226 | 256 | |||
Reportable Legal Entities | Non- Guarantor Subsidiaries | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Net cash provided by (used in) operating activities | 482 | 642 | |||||
Proceeds from sales of property and investments | 113 | 5 | |||||
Purchases of property and equipment | (7) | (6) | |||||
Net investing with Affiliates | (377) | (378) | |||||
Net cash provided by investing activities | (271) | (379) | |||||
Proceeds from debt issuances | 0 | ||||||
Repayments of long-term debt | (1) | (2) | |||||
Increase (decrease) in short-term borrowings, primarily 90 days or less | 0 | 0 | |||||
Proceeds from sale-leaseback financing | 0 | ||||||
Debt issuance costs | 0 | 0 | |||||
Intercompany dividend | (216) | (254) | |||||
Net borrowing with Affiliates | 0 | 0 | |||||
Net cash provided by (used in) financing activities | (217) | (256) | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | (6) | 7 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 38 | 31 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | 32 | 38 | 32 | 38 | |||
Eliminations | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Net cash provided by (used in) operating activities | (216) | (254) | |||||
Proceeds from sales of property and investments | 0 | ||||||
Purchases of property and equipment | 0 | ||||||
Net investing with Affiliates | 586 | 627 | |||||
Net cash provided by investing activities | 586 | 627 | |||||
Proceeds from debt issuances | 0 | ||||||
Repayments of long-term debt | 0 | 0 | |||||
Increase (decrease) in short-term borrowings, primarily 90 days or less | 0 | 0 | |||||
Proceeds from sale-leaseback financing | 0 | ||||||
Debt issuance costs | 0 | 0 | |||||
Intercompany dividend | 216 | 254 | |||||
Net borrowing with Affiliates | (586) | (627) | |||||
Net cash provided by (used in) financing activities | (370) | (373) | |||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 0 | 0 | |||||
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 0 | 0 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 0 | $ 0 | $ 0 | $ 0 | |||
|
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