RE:RE:RE:I think the original Sears comment wasI hear you loud and clear! I suffered significant losses with Nortel as I thought it was "too big and too much of an institution" to fail. I also suffered losses when Suncor took over Canadian Oil Sands. So indeed, I take all of these comments seriously. But HBC is not Sears. The bottom line for Sears is captured quite well in this report:
Yet just because the inclusion was based off a legal requirement doesn't mean investors should turn a blind eye. So far, its financial maneuvers haven't been enough to reverse declines at the company's core business.
Sears revenue fell 12 percent last year, to $22.1 billion. Its sales have tumbled 44 percent since 2012, when the company generated $39.9 billion in revenue. And despite Sears reporting a narrower loss in the fiscal fourth quarter than a year earlier, it lost an adjusted $1.28 per share.
In addition to its declining sales and tired stores, Sears' pension plan could jeopardize its future.
The retailer has already contributed some $4 billion to the plan over the past 12 years. It's been particularly burdensome since 2009, following the "severe decline in the capital markets that occurred in the latter part of 2008."
That resulted in "abnormally low interest rates, which continue to persist." The company's domestic pension expense was $288 million in 2016, $229 million in 2015 and $89 million in 2014. Back in 2008, it was $1 million, according to that year's SEC filing.
Sears is obligated to pay $250 million from Stanley Black & Decker's purchase of Craftsman to the plan in three years. The plan also has a 15-year lien on future sales of those products.
Sears has $13.2 billion in total liabilities, according to the SEC report. It has no short-term borrowings. The company should be able to fund its operating losses through the year, Boni said. Sears will face its first meaningful debt maturities in 2018.