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 ------------ ------------- Commission File No. 1-327 ----- 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 2 INDEX PART I FINANCIAL INFORMATION PAGE - ------ --------------------- ---- 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 - ------- ----------------- Item 6. Exhibits and Reports on Form 8-K 14 Signatures 15 2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS KMART CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) (UNAUDITED) 13 Weeks Ended 39 Weeks Ended -------------------------------- -------------------------------- October 25, October 27, October 25, October 27, 2000 1999 2000 1999 --------------- -------------- --------------- -------------- 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 See accompanying Notes to Consolidated Financial Statements. 3 4 KMART CORPORATION CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS) (UNAUDITED) OCTOBER 25, OCTOBER 27, JANUARY 26, 2000 1999 2000 --------------- --------------- -------------- 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 =============== =============== ============== See accompanying Notes to Consolidated Financial Statements. 4 5 KMART CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN MILLIONS) (UNAUDITED) 39 WEEKS ENDED -------------------------- OCTOBER 25, OCTOBER 27, 2000 1999 ------------ ------------ 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 ============ ============ See accompanying Notes to Consolidated Financial Statements. 5 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 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 $55.2 million pursuant to the exercise of previously outstanding put options. There were no outstanding put options remaining as of October 25, 2000. 7. OTHER COMMITMENTS AND CONTINGENCIES Lease Guarantees As of October 25, 2000, Kmart had outstanding guarantees for real property leases of certain former subsidiaries as follows: Present Value of Gross Future Lease Future Obligations @ 7% Lease Obligations -------------------- --------------------- ($ Millions) The Sports Authority $ 206 $ 349 Borders Group 98 166 OfficeMax 88 130 ---------- ----------- Total $ 392 $ 645 ========== =========== 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 $14.4 million was non-cash, resulting from a lawsuit settlement with Ryder Integrated Logistics, Inc. Kmart's rights and obligations with respect to its guarantee of OfficeMax leases are governed by a Lease Guaranty, Indemnification and Reimbursement Agreement dated as of November 9, 1994. 7 8 KMART CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 7. OTHER COMMITMENTS AND CONTINGENCIES (CONTINUED) Other There are various claims, lawsuits and pending actions against Kmart incident to its operations. It is the opinion of the Company's management that the ultimate resolution of these matters will not have a material adverse effect on Kmart's liquidity, financial position or results of operations. 8 9 ITEM 2. KMART CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS 13 WEEKS % CHANGE ------------------------------ --------------------------------------- OCTOBER 25, OCTOBER 27, ALL STORES COMPARABLE 2000 1999 STORES ------------ ------------ ---------------- ------------------- ($ Millions) SALES $ 8,199 $ 7,962 3.0 1.4 ============ =========== OPERATING INCOME (LOSS) $ (16) $ 135 ============ =========== 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 $76 million, respectively. The decrease in net interest expense is attributable to an increase in other interest income, offset by higher borrowings in the current year. See "Liquidity and Financial Condition." 9 10 KMART CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) RESULTS OF OPERATIONS 39 WEEKS % CHANGE ----------------------------- ----------------------------- OCTOBER 25, OCTOBER 27, COMPARABLE 2000 1999 ALL STORES STORES ------------- -------------- ------------- ------------- ($ Millions) SALES $ 25,392 $ 24,820 2.3 0.7 ============= ============= OPERATING INCOME (LOSS) $ (517) $ 592 ============= ============= 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 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 12 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): Charge Excluding For Charge For As Strategic Strategic Reported Actions Actions -------- ------- ------- 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) ================================== 12 13 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 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. Date Filed Date of Report 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. 14 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 16 Exhibit Index ------------- Exhibit No. Description - ----------- ----------- 11 Information on Computation of Earnings Per Share 27 Financial Data Schedule