-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FHdllTUKdXLwOHhKA0M5W1IrVvIkvjgAXSzUUr+ZnlmBlOhHSeMWmdWF0Ml+vAtI bgWIA6L44JqSccFF+4qXIg== 0000950124-02-002147.txt : 20020621 0000950124-02-002147.hdr.sgml : 20020621 20020621144939 ACCESSION NUMBER: 0000950124-02-002147 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020621 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020621 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KMART CORP CENTRAL INDEX KEY: 0000056824 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 380729500 STATE OF INCORPORATION: MI FISCAL YEAR END: 0129 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00327 FILM NUMBER: 02684271 BUSINESS ADDRESS: STREET 1: 3100 W BIG BEAVER RD CITY: TROY STATE: MI ZIP: 48084 BUSINESS PHONE: 2486431000 MAIL ADDRESS: STREET 1: 3100 W BIG BEAVER ROAD CITY: TROY STATE: MI ZIP: 48084 FORMER COMPANY: FORMER CONFORMED NAME: KRESGE S S CO DATE OF NAME CHANGE: 19770921 8-K 1 k70295e8vk.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JUNE 21, 2002 KMART CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) MICHIGAN 1-327 38-0729500 ----------------------------------------------------------------------- (STATE OR OTHER (COMMISSION (IRS EMPLOYER JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.) INCORPORATION) 3100 WEST BIG BEAVER ROAD, TROY, MICHIGAN 48084 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 248-463-1000 ------------ NOT APPLICABLE - -------------------------------------------------------------------------------- FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE Kmart Corporation (the "Company") has filed its monthly operating report for the period commencing May 2, 2002 and ended May 29, 2002 (the "Operating Report") with the United States Bankruptcy Court for the Northern District of Illinois, a copy of which is attached hereto as Exhibit 99, in connection with its voluntary petitions for reorganization under Chapter 11 of title 11 of the United States Bankruptcy Code in Case No. 02-B02474. The Company cautions readers not to place undue reliance upon the information contained therein. The Operating Report contains unaudited information, and is in a format, prescribed by the applicable bankruptcy laws. There can be no assurance that the Operating Report is complete. The Operating Report also contains information for periods which may be shorter or otherwise different from those contained in the Company's reports pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such information may not be indicative of the Company's financial condition or operating results for the periods reflected in the Company's financial statements or in its reports pursuant to the Exchange Act and readers are cautioned to refer to the Exchange Act filings. Moreover, the Operating Report and other communications from the Company may include forward-looking statements subject to various assumptions regarding the Company's operating performance that may not be realized and are subject to significant business, economic and competitive uncertainties and contingencies, including those described in this report, many of which are beyond the Company's control. Consequently such matters should not be regarded as a representation or warranty by the Company that such matters will be realized or are indicative of the Company's financial condition or operating results for future periods or the periods covered in the Company's reports pursuant to the Exchange Act. Actual results for such periods may differ materially from the information contained in the Operating Report and the Company undertakes no obligation to update or revise the Operating Report. The Operating Report, as well as other statements made by the Company, may contain forward-looking statements that reflect, when made, the Company's current views with respect to current events and financial performance. Such forward looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the DIP facility; the Company's ability to obtain court approval with respect to motions in the Chapter 11 proceeding prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the Chapter 11 cases on the Company's liquidity or results of operations; the ability of the Company to fund and execute its business plan; the ability of the Company to attract, motivate and/or retain key executives and associates; and the ability of the Company to attract and retain customers. Other risk factors are listed from time to time in the Company's SEC reports, including, but not limited to the annual report on Form 10-K for the year ended January 30, 2002. Kmart disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Company's various pre-petition liabilities, common stock and/or other equity securities. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. A plan of reorganization could result in holders of Kmart common stock receiving no value for their interests. Because of such possibilities, the value of the common stock is highly speculative. Accordingly, the Company urges that the appropriate caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits. Document Description 99 Monthly Operating Report for the Period May 2, 2002 to May 29, 2002. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Kmart Corporation (Registrant) Date: June 21, 2002 By: /s/ A. A. Koch ----------------------- A. A. Koch Chief Financial Officer 3 EXHIBIT INDEX Exhibit Number Document Description 99 Monthly Operating Report For The Period May 2, 2002 to May 29, 2002. 4 EX-99 3 k70295exv99.txt MONTHLY OPERATING REPORT FOR MAY 2, 2002 EXHIBIT 99 UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS - -------------------------------------------------------------------------------- Chapter 11 Case No.: 02 B 02474 Hon. Susan Pierson Sonderby In re Kmart Corporation, et al. Debtors. - -------------------------------------------------------------------------------- MONTHLY OPERATING REPORT FOR THE PERIOD MAY 2, 2002 TO MAY 29, 2002 DEBTORS' ADDRESS: Kmart Corporation, et al. 3100 West Big Beaver Road Troy, MI 48084 DEBTORS' ATTORNEYS: John Wm. Butler, Jr. J. Eric Ivester SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS) 333 West Wacker Drive Chicago, Illinois 60606-1285 REPORT PREPARER: Kmart Corporation, et al. The undersigned, having reviewed the attached report acting as the duly authorized agent for the Debtors in Possession declares under penalty of perjury under the laws of the United States that the figures, statements, disbursement itemizations, and account balances listed in this Monthly Report of the Debtors are true and correct as of the date of this report to the best of my knowledge, information and belief. Date: June 21, 2002 KMART CORPORATION, ET AL. /s/ A. A. Koch ----------------------------------- A. A. Koch, Chief Financial Officer KMART CORPORATION, ET AL. U.S. TRUSTEE MONTHLY OPERATING REPORT FOR THE FOUR-WEEK PERIOD ENDED MAY 29, 2002 I. Kmart Corporation Unaudited Consolidated Financial Statements A. Consolidated Statement of Operations for the four-week period ended May 29, 2002 B. Consolidated Balance Sheet as of May 29, 2002 C. Consolidated Statement of Cash Flows for the four-week period ended May 29, 2002 D. Cash Receipts and Disbursements for the four-week period ended May 29, 2002 E. Schedule of Professional Fees and Expenses for the period January 22, 2002 through May 31, 2002 F. Notes to Unaudited Consolidated Financial Statements II. Tax Questionnaire KMART CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - -------------------------------------------------------------------------------- ($ MILLIONS)
FOUR-WEEK PERIOD ENDED MAY 29, 2002 ------- SALES $ 2,586 Cost of sales, buying & occupancy 2,078 ------- GROSS MARGIN 508 Selling, general and administrative expenses 576 ------- LOSS BEFORE INTEREST, INCOME TAXES AND REORGANIZATION EXPENSE (68) Chapter 11 reorganization expense 17 ------- LOSS BEFORE INTEREST AND INCOME TAXES (85) Net interest expense 11 Income taxes -- ------- NET LOSS $ (96) =======
KMART CORPORATION CONSOLIDATED BALANCE SHEET (Unaudited) - -------------------------------------------------------------------------------- ($ MILLIONS)
MAY 29, 2002 -------- ASSETS Cash and cash equivalents $ 1,845 Merchandise inventories 5,210 Other current assets 542 -------- TOTAL CURRENT ASSETS 7,597 Property and equipment, net 6,015 Other assets and deferred charges 244 -------- TOTAL ASSETS $ 13,856 ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 1,728 Accrued payroll and other liabilities 623 Taxes other than income taxes 208 -------- TOTAL CURRENT LIABILITIES 2,559 Long-term debt -- Capital lease obligations 689 Other long-term liabilities 91 -------- TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE 3,339 LIABILITIES SUBJECT TO COMPROMISE 7,711 Company obligated mandatorily redeemable convertible preferred securities of a subsidiary trust holding solely 7-3/4% convertible junior subordinated debentures of Kmart (redemption value of $898) 889 Common stock, $1 par value, 1,500,000,000 shares authorized; 502,686,416 shares issued 503 Capital in excess of par value 1,698 Accumulated deficit (284) -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 13,856 ======== Memo: LIABILITIES SUBJECT TO COMPROMISE Accounts payable $ 2,520 Closed store reserves 843 General liability and workers compensation 301 Taxes payable 157 Debt and notes payable 3,329 Pension obligation 188 Other liabilities 373 -------- $ 7,711 ========
KMART CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - -------------------------------------------------------------------------------- ($ MILLIONS)
FOUR-WEEK PERIOD ENDED MAY 29, 2002 ------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (96) Adjustments to reconcile net loss to net cash provided by operating activities: Restructuring, impairment and other charges 2 Reorganization items, net 17 Depreciation and amortization 61 Equity income in unconsolidated subsidiaries (6) Changes in: Inventory 69 Accounts payable (10) Other assets 44 Other liabilities (28) Cash used for store closings and other charges (18) ------- Net cash provided by continuing operations 35 Net cash used for discontinued operations (1) ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 34 ------- NET CASH USED FOR REORGANIZATION ITEMS (6) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (12) ------- NET CASH USED FOR INVESTING ACTIVITIES (12) ------- NET CHANGE IN CASH AND CASH EQUIVALENTS 16 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,829 ------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,845 =======
KMART CORPORATION CASH RECEIPTS AND DISBURSEMENTS (Unaudited) - -------------------------------------------------------------------------------- ($ MILLIONS)
FOUR-WEEK PERIOD ENDED MAY 29, 2002 ------ Cash Receipts: Store $2,612 Other 187 ------ CASH INFLOWS 2,799 ------ Cash Disbursements: Accounts payable 1,920 Fleming 286 Payroll and benefits 364 Taxes 136 Lease departments 77 ------ CASH OUTFLOWS 2,783 ------ TOTAL CASH FLOWS BEFORE BORROWINGS 16 ------ DIP Loan Borrowings -- ------ NET CASH INFLOWS $ 16 ======
KMART CORPORATION SCHEDULE OF PROFESSIONAL FEES AND EXPENSES (Unaudited) - --------------------------------------------------------------------------------
FOR THE PERIOD JANUARY 22, 2002 THROUGH MAY 29, 2002 ------------------------------------------------------------------------------ BILLED NAME AMOUNT PAID UNPAID HOLDBACK ACCRUED TOTAL - ---- ------ ---- ------ -------- ------- ----- Abacus Advisory and Consulting Corporation, LLC $ 935,616 $ 717,258 $ 218,359 $ -- $ -- $ 935,616 Dredner Kleinwort Wasserstien 713,018 -- 713,018 -- -- 713,018 Ernst & Young, Corporate Finance LLC 1,204,238 122,180 1,082,058 109,429 -- 1,204,238 FTI Policano & Manzo 819,744 388,166 431,578 77,507 -- 819,744 Jones, Day, Reavis & Pogue 531,678 241,618 290,059 49,403 -- 531,678 Jones Day Committee Member Expenses 19,306 7,331 11,974 -- -- 19,306 KPMG, LLP 1,020,312 -- 1,020,312 96,268 -- 1,020,312 Morgan, Lewis & Bockius LLP 488,556 488,556 -- -- -- 488,556 Otterbourg, Steindler, Houston & Rosen, PC 837,115 389,277 447,838 41,315 -- 837,115 Otterbourg Committee Member Expenses 24,595 17,847 6,747 -- -- 24,595 PricewaterhouseCoopers LLP 6,274,238 -- 6,274,238 558,463 -- 6,274,238 Rockwood Gemini Advisors 585,735 218,893 366,842 45,000 -- 585,735 Skadden, Arps, Slate, Meagher & Flom (Illinois) 10,790,908 3,864,179 6,926,729 962,053 -- 10,790,908 Trumbull Services 3,670,967 -- 3,670,967 -- -- 3,670,967 U.S. Trustee 127,500 127,500 -- -- -- 127,500 Winston & Strawn 213,675 104,280 109,395 19,856 -- 213,675 Accrued -- -- -- -- 16,168,236 16,168,236 TOTAL $28,257,201 $ 6,687,086 $21,570,114 $ 1,959,296 $16,168,236 $44,425,437
* Billed amounts include fees and expenses KMART CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. On January 22, 2002 ("Petition Date"), Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy code ("Bankruptcy Code" or "Chapter 11") in the United States Bankruptcy Court for the Northern District of Illinois ("Court"). The reorganization is being jointly administered under the caption "In re Kmart Corporation, et al., Case No. 02 B 02474." Included in the consolidated financial statements are subsidiaries operating outside of the United States, which have not commenced Chapter 11 cases or other similar proceedings elsewhere, and are not debtors ("non-filing subsidiaries"). The assets and liabilities of such non-filing subsidiaries are not considered material to the consolidated financial statements. Kmart Corporation and all of its consolidated subsidiaries, whether or not considered filing or non-filing subsidiaries, are collectively referred to herein as "the Company." 2. To supplement operating cash flow during the reorganization process, the Company secured a $2 billion senior secured debtor-in-possession financing facility ("DIP Credit Facility") from JP Morgan Chase Bank, Fleet Retail Finance, Inc., General Electric Capital Corporation, and Credit Suisse First Boston. On the Petition Date, the Court gave interim approval authorizing borrowings up to $1.15 billion of the DIP Credit Facility for the payment of certain pre-petition claims and the funding of working capital and other general operating needs. On March 6, 2002, the Court approved the full amount of the $2 billion DIP Credit Facility. The DIP Credit Facility requires that we restrict future liens, indebtedness, capital expenditures, dividend payments and sales of assets, and that we maintain certain financial covenants, one of which includes cumulative EBITDA (earnings before interest, taxes, depreciation and amortization), of varying minimum amounts throughout the year. As of May 29, 2002 the Company had utilized $372 million of the DIP Credit Facility for letters of credit issued for ongoing import purchasing operations, contractual and regulatory purposes. Outlined below is a summary of availability under the DIP Credit Facility: ($ millions) DIP Credit Facility capacity $ 2,000 5% Holdback (100) DIP loans outstanding -- Letters of credit outstanding (372) ------- Total Available as of May 29, 2002 $ 1,528 =======
3. Comparable store sales for the four-week period ended May 29, 2002, excluding the 283 stores that were closed on or before June 2, 2002, were 11.4% lower than the same month last year. 4. Chapter 11 reorganization expenses include $11 million of accrued professional fees and $6 million of accrued stay bonus expense for the Key Employee Retention Program previously approved by the Court. 5. Cash Receipts and Disbursements for the four-week period ended May 29, 2002 are summarized as actual receipts and disbursements during the period, as compiled from the Company's daily cash records. IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION CASE NAME: Kmart Corporation, et al. CASE NO.: 02 B 02474 For Month Ending May 29, 2002 TAX QUESTIONNAIRE Debtors in possession and trustees are required to pay all taxes incurred after the filing of their Chapter 11 petition on an as due basis. Please indicate whether the following post petition taxes or withholdings have been paid currently. 1. Federal Income Taxes Yes (x) No ( ) 2. FICA withholdings Yes (x) No ( ) 3. Employee's withholdings Yes (x) No ( ) 4. Employer's FICA Yes (x) No ( ) 5. Federal Unemployment Taxes Yes (x) No ( ) 6. State Income Tax Yes (x) No ( ) 7. State Employee withholdings Yes (x) No ( ) 8. All other state taxes Yes (x) No ( ) If any of the above have not been paid, state below the tax not paid, the amount past due and the date of last payment. -----END PRIVACY-ENHANCED MESSAGE-----