<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended October 25, 2000
----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 1-327
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KMART CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
Michigan 38-0729500
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed, by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------- -------
As of October 25, 2000, 483,391,211 shares of Common Stock of the Registrant
were outstanding.
1
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
------ --------------------- ----
<S> <C> <C>
Item 1. Financial Statements
Consolidated Statements of Operations-- 3
13 and 39 weeks ended October 25, 2000 and
October 27,1999
Consolidated Balance Sheets-- 4
October 25, 2000, October 27, 1999 and
January 26, 2000
Consolidated Statements of Cash Flows-- 5
39 weeks ended October 25, 2000 and
October 27, 1999
Notes to Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Results of 9 - 13
Operations and Financial Condition
PART II OTHER INFORMATION
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Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
KMART CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
13 Weeks Ended 39 Weeks Ended
-------------------------------- --------------------------------
October 25, October 27, October 25, October 27,
2000 1999 2000 1999
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Sales $ 8,199 $ 7,962 $ 25,392 $ 24,820
Cost of sales, buying and occupancy 6,518 6,248 20,530 19,472
--------------- -------------- --------------- --------------
Gross margin 1,681 1,714 4,862 5,348
Selling, general and administrative expenses 1,697 1,579 5,379 4,756
--------------- -------------- --------------- --------------
Income (loss) before interest, income taxes and dividends
on convertible preferred securities of subsidiary trust (16) 135 (517) 592
Interest expense, net 71 76 205 206
Income tax provision (benefit) (31) 19 (263) 127
Dividends on convertible preferred securities of subsidiary
trust, net of income taxes of $6, $6, $18 and $20, respectively 11 13 34 38
--------------- -------------- --------------- --------------
Net income (loss) from continuing operations (67) 27 (493) 221
Discontinued operations, net of income taxes of $124 - - - (230)
--------------- -------------- --------------- --------------
Net income (loss) $ (67) $ 27 $ ( 493) $ (9)
=============== ============== =============== ==============
Basic/diluted earnings (loss) per common share:
Net income (loss) from continuing operations $ (0.14) $ 0.05 $ (1.00) $ 0.45
Discontinued operations - - - (0.46)
--------------- -------------- --------------- --------------
Net income (loss) $ (0.14) $ 0.05 $ (1.00) $ (0.01)
=============== ============== =============== ==============
Basic weighted average shares (millions) 482.1 492.1 481.9 493.8
Diluted weighted average shares (millions) 542.3 562.2 544.0 566.5
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE> 4
KMART CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
OCTOBER 25, OCTOBER 27, JANUARY 26,
2000 1999 2000
--------------- --------------- --------------
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 285 $ 345 $ 344
Merchandise inventories 7,878 8,486 7,101
Other current assets 1,066 865 715
--------------- --------------- --------------
Total current assets 9,229 9,696 8,160
Property and equipment, net 6,481 6,313 6,410
Other assets and deferred charges 431 489 534
--------------- --------------- --------------
Total Assets $ 16,141 $ 16,498 $ 15,104
=============== =============== ==============
Current Liabilities:
Long-term debt due within one year $ 495 $ 74 $ 66
Trade accounts payable 2,770 3,119 2,204
Accrued payroll and other liabilities 1,401 1,347 1,574
Taxes other than income taxes 267 252 232
--------------- --------------- --------------
Total current liabilities 4,933 4,792 4,076
Long-term debt and notes payable 2,635 2,730 1,759
Capital lease obligations 956 1,031 1,014
Other long-term liabilities 911 1,057 965
Company obligated mandatorily redeemable convertible preferred
securities of a subsidiary trust holding solely 7 3/4% convertible
junior subordinated debentures of Kmart (redemption value
$898, $1,000 and $1,000, respectively) 886 985 986
Common stock, $1 par value, 1,500,000,000 shares authorized;
483,391,211, 487,138,899 and 481,383,569 shares issued 483 487 481
Capital in excess of par value 1,567 1,607 1,555
Retained earnings 3,770 3,809 4,268
--------------- --------------- --------------
Total Liabilities and Shareholders' Equity $ 16,141 $ 16,498 $ 15,104
=============== =============== ==============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE> 5
KMART CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE>
<CAPTION>
39 WEEKS ENDED
--------------------------
OCTOBER 25, OCTOBER 27,
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) from continuing operations $ (493) $ 221
Adjustments to reconcile net income (loss) from continuing operations
to net cash used for operating activities:
One-time charge for strategic actions 728 -
Depreciation and amortization 584 568
Equity loss in BlueLight.com 37 -
Deferred income taxes and taxes payable (357) 61
Cash used for store restructuring and other charges (46) (58)
Increase in inventories (1,142) (1,950)
Increase in accounts payable 566 1,097
Increase in accounts receivable (174) (181)
Decrease in other long-term liabilities (89) (27)
Changes in other assets and liabilities 6 (21)
------------ ------------
Net cash used for continuing operations (380) (290)
Net cash used for discontinued operations (75) (48)
------------ ------------
Net cash used for operating activities (455) (338)
------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures (697) (997)
Acquisition of Caldor leases - (86)
Investment in Bluelight.com (55) -
------------ ------------
Net cash used for investing activities (752) (1,083)
------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of debt 1,366 1,250
Purchase of convertible preferred securities (84) -
Purchase of common shares (56) (117)
Issuance of common shares 41 44
Payments on debt (61) (61)
Payments on capital lease obligations (58) (60)
------------ ------------
Net cash provided by financing activities 1,148 1,056
------------ ------------
Net decrease in cash and cash equivalents (59) (365)
Cash and cash equivalents, beginning of year 344 710
------------ ------------
Cash and cash equivalents, end of period $ 285 $ 345
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE> 6
KMART CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
These interim unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission ("SEC"), and, in the opinion of management, reflect all
adjustments (which include normal recurring adjustments) necessary for a fair
statement of the results for the interim periods. These consolidated
financial statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's 1999 Annual Report
on Form 10-K filed for the fiscal year ended January 26, 2000.
The quarterly consolidated financial statements for the fiscal year
ended January 26, 2000 have been restated to reflect the change in the
Company's method of accounting for layaway sales adopted in consideration of
SEC Staff Accounting Bulletin No. 101.
Certain reclassifications of the January 26, 2000 and October 27, 1999
financial statements have been made to conform to the current year
presentation.
2. EARNINGS PER SHARE
For the thirteen week period ended October 25, 2000 and the thirty-nine
week periods ended October 25, 2000 and October 27, 1999, diluted earnings
per share is reported as basic earnings per share due to the anti-dilutive
impact of convertible preferred securities.
3. ONE-TIME CHARGE FOR STRATEGIC ACTIONS
On July 25, 2000, the Company announced a series of strategic actions
aimed at strengthening financial performance by enhancing the productivity of
its store base, inventory and information systems. These initiatives included
deciding to close certain stores, accelerating certain inventory reductions
and redefining Kmart's information technology strategy. As a result of these
initiatives, the Company recorded a pretax charge totaling $740 million.
During the third quarter, this charge was reduced by $12 million (pre-tax)
due to a reduction in the number of scheduled store closings from 72 to 69,
thus reducing the reserve for closed stores from $300 million to $288
million. There were no other reductions in the reserve for closed stores
during the third quarter.
4. INVENTORIES AND COST OF MERCHANDISE SOLD
A substantial portion of the Company's inventory is accounted for using
the last-in, first-out (LIFO) method. Since LIFO costs can only be determined
at the end of each fiscal year when inflation rates and inventory levels are
finalized, estimates are used for LIFO purposes in the interim consolidated
financial statements. Inventories valued on LIFO at October 25, 2000, October
27, 1999 and January 26, 2000 were $360 million, $397 million and $360
million lower, respectively, than the amounts that would have been reported
under the first-in, first-out (FIFO) method.
5. LONG TERM DEBT
On December 4, 2000, the 364-day $600 million revolving credit facility
piece of the existing Revolving Credit Agreement ("Revolver") was rolled over
into a new 364-day $465 million revolving credit facility. The pricing and
covenants under this facility are unchanged.
6
<PAGE> 7
KMART CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
6. SHARE REPURCHASE PROGRAMS
In February 2000, the Company extended its existing stock
repurchase program to include up to $200 million of trust convertible
preferred securities. Through the third quarter of fiscal year 2000, the
Company repurchased approximately 2 million shares of convertible
preferred securities at a cost of approximately $83.8 million. For
purposes of computing earnings per share, the discount on the repurchase,
net of tax, was added to net income to arrive at income available to
common shareholders. In addition, during the first three quarters of
fiscal year 2000, the Company repurchased approximately 5 million shares
of its common stock at a cost of approximately $55.2 million pursuant to
the exercise of previously outstanding put options. There were no
outstanding put options remaining as of October 25, 2000.
7. OTHER COMMITMENTS AND CONTINGENCIES
Lease Guarantees
As of October 25, 2000, Kmart had outstanding guarantees for real
property leases of certain former subsidiaries as follows:
<TABLE>
<CAPTION>
Present Value of Gross
Future Lease Future
Obligations @ 7% Lease Obligations
-------------------- ---------------------
($ Millions)
<S> <C> <C>
The Sports Authority $ 206 $ 349
Borders Group 98 166
OfficeMax 88 130
---------- -----------
Total $ 392 $ 645
========== ===========
</TABLE>
The possibility of the Company having to honor its contingent
obligations is dependent upon the future operating results of the former
subsidiaries. Should a reserve be required, it would be recorded at the
time the obligation was determined to be both probable and estimable.
The Sports Authority
For its third quarter ended October 28, 2000, The Sports
Authority (TSA) reported an increase in same store sales of 5.0% and
operating income of $0.4 million, as compared to an operating loss of
$13.7 million for the third quarter of 1999. Year to date October 28,
2000, TSA reported an increase in same store sales of 2.5% and operating
income of $8.5 million, as compared to an operating loss of $10.6 million
for the same period in 1999.
Kmart's rights and obligations with respect to its guarantee of
TSA leases are governed by a Lease Guaranty, Indemnification and
Reimbursement Agreement dated as of November 23, 1994.
OfficeMax
For its third quarter ended October 21, 2000, OfficeMax reported
a decrease in comparable store sales of 1.7% and an operating loss of
$28.2 million, as compared to an operating loss of $54.5 million for the
third quarter of 1999. Year to date October 21, 2000, OfficeMax reported
an increase in comparable store sales of 1.6% and an operating loss of
$61.3 million, as compared to an operating loss of $9.8 million for the
same period in 1999. OfficeMax recorded an approximate $19.5 million
pre-tax charge in the third quarter, of which $14.4 million was non-cash,
resulting from a lawsuit settlement with Ryder Integrated Logistics, Inc.
Kmart's rights and obligations with respect to its guarantee of
OfficeMax leases are governed by a Lease Guaranty, Indemnification and
Reimbursement Agreement dated as of November 9, 1994.
7
<PAGE> 8
KMART CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
7. OTHER COMMITMENTS AND CONTINGENCIES (CONTINUED)
Other
There are various claims, lawsuits and pending actions against
Kmart incident to its operations. It is the opinion of the Company's
management that the ultimate resolution of these matters will not have a
material adverse effect on Kmart's liquidity, financial position or
results of operations.
8
<PAGE> 9
ITEM 2.
KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS
13 WEEKS % CHANGE
------------------------------ ---------------------------------------
OCTOBER 25, OCTOBER 27, ALL STORES COMPARABLE
2000 1999 STORES
------------ ------------ ---------------- -------------------
($ Millions)
<S> <C> <C> <C> <C>
SALES $ 8,199 $ 7,962 3.0 1.4
============ ===========
OPERATING INCOME (LOSS) $ (16) $ 135
============ ===========
</TABLE>
SALES increased 3.0% for the 13 weeks ended October 25, 2000. Divisions
showing strength during the third quarter included prescription drugs,
cosmetics/fragrances, home fashions and housewares, jewelry, sporting goods and
consumables. We opened 3 stores and closed 5 stores during the third quarter.
GROSS MARGIN, as a percentage of sales, was 20.5% and 21.5% for the 13
weeks ended October 25, 2000 and October 27, 1999, respectively. The gross
margin percentage is lower than prior year due to fees incurred in connection
with the distribution of grocery-related goods, as well as inventory clearance
activities that caused a shift in customer purchases from regular priced
merchandise to clearance merchandise.
SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") EXPENSES, as a percentage
of sales, were 20.7% and 19.8% for the 13 weeks ended October 25, 2000 and
October 27, 1999, respectively. The SG&A percentage is higher than prior year
due to increased expenses resulting from new stores, increased payroll,
depreciation and other expenses as a result of prior year Big Kmart conversions
and our share of the operating losses of BlueLight.com.
OPERATING INCOME (LOSS) for the 13 weeks ended October 25, 2000 was
$(16) million, or (0.2)% of sales, as compared to operating income of $135
million, or 1.7% of sales, for the same period of the prior year.
NET INTEREST EXPENSE for the 13 weeks ended October 25, 2000 and
October 27, 1999 was $71 million and $76 million, respectively. The decrease in
net interest expense is attributable to an increase in other interest income,
offset by higher borrowings in the current year. See "Liquidity and Financial
Condition."
9
<PAGE> 10
KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
<TABLE>
<CAPTION>
RESULTS OF OPERATIONS
39 WEEKS % CHANGE
----------------------------- -----------------------------
OCTOBER 25, OCTOBER 27, COMPARABLE
2000 1999 ALL STORES STORES
------------- -------------- ------------- -------------
($ Millions)
<S> <C> <C> <C> <C>
SALES $ 25,392 $ 24,820 2.3 0.7
============= =============
OPERATING INCOME (LOSS) $ (517) $ 592
============= =============
</TABLE>
SALES increased 2.3% for the 39 weeks ended October 25, 2000. Divisions
showing strength on a year-to-date basis included prescription drugs, kidswear,
home electronics, housewares and consumables. We opened 10 stores and closed 18
stores during the 39 week period ended October 25, 2000.
GROSS MARGIN, as a percentage of sales, was 19.1% and 21.5% for the 39
weeks ended October 25, 2000 and October 27, 1999, respectively. The decrease in
gross margin on a year-to-date basis is attributable to the one-time charge for
strategic actions recorded during the second quarter fees incurred in
connection with the distribution of grocery-related goods, as well as inventory
clearance activities that caused a shift in customer purchases from regular
priced merchandise to clearance merchandise.
SELLING, GENERAL AND ADMINISTRATIVE ("SG&A") EXPENSES, as a percentage
of sales, were 21.1% and 19.1% for the 39 weeks ended October 25, 2000 and
October 27, 1999, respectively. The increase is attributable to the one-time
charge for strategic actions recorded during the second quarter, increased
expenses resulting from new stores, increased payroll, depreciation and other
expenses as a result of prior year Big Kmart conversions and our share of the
operating losses of BlueLight.com.
OPERATING INCOME (LOSS) for the 39 weeks ended October 25, 2000 was
$(517) million, or (2.0)% of sales, as compared to operating income of $592
million, or 2.4% of sales, for the same period of the prior year. The decrease
in operating income is due primarily to the one-time charge for strategic
actions of $728 million.
NET INTEREST EXPENSE for the 39 weeks ended October 25, 2000 and
October 27, 1999 was $205 million and $206 million, respectively. See "Liquidity
and Financial Condition".
10
<PAGE> 11
KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
LIQUIDITY AND FINANCIAL CONDITION
Our primary sources of working capital are cash flows from operations
and borrowings under credit facilities. We had working capital of $4,296, $4,904
and $4,084 million at October 25, 2000, October 27, 1999 and January 26, 2000,
respectively. Working capital fluctuates in relation to profitability, seasonal
inventory levels net of trade accounts payable (net inventory) and the level of
store openings and closings.
On December 4, 2000, the 364-day $600 million revolving credit facility
piece of our existing Revolving Credit Agreement ("Revolver") was rolled over
into a new 364-day $465 million revolving credit facility. The pricing and
covenants under this facility are unchanged. Borrowings outstanding under our
Revolver totaled $1.4 billion at the end of the third quarter of fiscal 2000
compared to $1.25 billion at the end of the third quarter of fiscal 1999.
Net cash used for operating activities for the 39 weeks ended October
25, 2000 was $455 million as compared to $338 million net cash used for the same
period of 1999. The increase in cash used for operating activities was due
primarily to a reduction in net income from continuing operations, offset by a
smaller increase in net inventory from year-end in the current year (excluding
the impact of the one-time charge for strategic actions) as compared to net
inventory for the same period one year ago.
Net cash used for investing activities was $752 million for the 39
weeks ended October 25, 2000, compared to $1,083 million for the same period of
1999. The decrease in cash used for investing activities was primarily the
result of completing the Big Kmart rollout in early 2000.
Net cash provided by financing activities was $1,148 million for the 39
weeks ended October 25, 2000 compared to $1,056 million for the same period of
1999. The increase in cash provided by financing activities was primarily a
result of borrowings under the Revolver, offset by the repurchase of convertible
preferred securities and common stock and normal payments on long-term debt.
We believe that current financing arrangements will be sufficient to
meet liquidity needs for operations and capital demands.
OTHER MATTERS
Implementation of Strategic Actions
During the second quarter, we announced a series of strategic actions
aimed at strengthening our financial performance by achieving improvements in
return on invested capital. These actions included deciding to close certain
traditional Kmart and Super Kmart stores, accelerating certain inventory
reductions and redefining our information technology strategy. As a result of
these actions, we recorded a pretax charge of $740 million during the second
quarter of 2000. During the third quarter, we reduced this charge by $12 million
(pre-tax) due to reducing the number of scheduled store closings from 72 to 69,
thus reducing the reserve for closed stores from $300 million to $288 million.
There were no other reductions in the reserve for closed stores during the third
quarter.
11
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KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
Implementation of Strategic Actions (continued)
The impact of the charge for strategic actions on our statements of
operations and effective tax rate for the thirty-nine week period ended October
25, 2000 is summarized in the following table (in millions):
<TABLE>
<CAPTION>
Charge Excluding
For Charge For
As Strategic Strategic
Reported Actions Actions
-------- ------- -------
<S> <C> <C> <C>
Sales $ 25,392 $ - $ 25,392
Cost of sales, buying and occupancy 20,530 (365) 20,165
----------------------------------
Gross margin 4,862 365 5,227
Selling, general and administrative expense 5,379 (363) 5,016
----------------------------------
Income (loss) before interest, income
taxes and dividends on convertible
preferred securities of subsidiary trust (517) 728 211
Interest expense -- net 205 - 205
Income taxes (263) 265 2
Preferred dividends of subsidiary,
net of income taxes 34 - 34
----------------------------------
Net income (loss) $ (493) $ 463 $ (30)
==================================
Effective income tax rate (36.4%) 36.4% (35.0%)
Basic and diluted earnings (loss) per share $ (1.00) $ 0.96 $ (0.04)
==================================
</TABLE>
12
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KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION (CONTINUED)
Implementation of Strategic Actions (continued)
As a result of the store closings discussed above, we expect earnings
before income taxes to benefit by approximately $10 million annually.
Specifically, these stores had combined annual revenues of $770 million in
fiscal year 1999, the loss of which will be offset by expense savings of $780
million, comprised of costs of sales, buying and occupancy expenses, selling,
general and administrative expenses and interest expense.
Proceeds from the liquidation of inventories during the third quarter
related to the store closings and inventory reduction were approximately $325
million. Cash expenditures related to the store closings will be funded through
operating cash flows over the terms of the underlying leases, which are expected
to be approximately $200 million on a discounted basis.
Lease Guarantees
We have guaranteed leases for properties operated by certain former
subsidiaries including Borders Group, Inc., OfficeMax, Inc., and The Sports
Authority, Inc. The present value of the lease obligations guaranteed by Kmart
is approximately $392 million. The possibility of the Company having to honor
its contingent obligations is dependent upon the future operating results of the
former subsidiaries. (See Note 7 of the Notes to Consolidated Financial
Statements)
Other
There are various claims, lawsuits and pending actions against Kmart
incident to its operations. It is the opinion of management that the ultimate
resolution of these matters will not have a material adverse effect on our
liquidity, financial position or results of operations.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This quarterly report includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Statements,
other than those based on historical facts, which address activities, events or
developments that the Company expects or anticipates may occur in the future are
forward-looking statements which are based upon a number of assumptions
concerning future conditions that may ultimately prove to be inaccurate. Actual
events and results may materially differ from anticipated results described in
such statements. The Company's ability to achieve such results is subject to
certain risks and uncertainties, including, but not limited to, economic and
weather conditions which affect buying patterns of the Company's customers,
changes in consumer spending and the Company's ability to anticipate buying
patterns and implement appropriate inventory strategies, continued availability
of capital and financing, competitive factors and other factors affecting
business beyond the Company's control. Consequently, all of the forward-looking
statements are qualified by these cautionary statements and there can be no
assurance that the results or developments anticipated by the Company will be
realized or that they will have the expected effects on the Company or its
business or operations.
13
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as a part of this report:
Exhibit 11 -- Statement re: Computation of Per Share Earnings
Exhibit 27 -- Financial Data Schedule
(b) Reports on Form 8-K: The following reports were filed on Form 8-K by
the Registrant during the 13 weeks ended October 25, 2000.
<TABLE>
<CAPTION>
Date Filed Date of Report
<S> <C> <C>
July 27, 2000 July 27, 2000 On July 25, 2000 Kmart Corporation issued a press release
announcing a pretax charge of $740 million as a result of strategic
actions taken during the second quarter.
On July 26, 2000 Kmart corporation issued a press release
announcing organizational restructuring and executive moves.
August 14, 2000 August 10, 2000 On August 10, 2000 Kmart Corporation issued a press release
announcing 2000 second quarter earnings.
</TABLE>
14
<PAGE> 15
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, thereunto duly authorized.
The signatory hereby acknowledges and adopts the typed form of his/her name in
the electronic filing of this document with the Securities and Exchange
Commission.
Date: December 6, 2000
Kmart Corporation
----------------------------------
(Registrant)
By: M.E. Welch, III
----------------------------------
M.E. Welch, III
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(Principal Financial Officer)
By: Matthew F. Hilzinger
----------------------------------
Matthew F. Hilzinger
VICE PRESIDENT, CONTROLLER
(Principal Accounting Officer)
15
<PAGE> 16
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
11 Information on Computation of Earnings
Per Share
27 Financial Data Schedule
</TABLE>
