CONTACT:
Sears Public Relations And Communications
(847) 286-8371
Sears Holdings Reports Third Quarter Results and Increased Share Repurchase Authorization
Company Highlights
- Net loss for the quarter of $1.16 per diluted share ($0.90 per diluted
share excluding certain one-time items) as compared to net income of $0.03
per diluted share in the third quarter of 2007
- Total sales of $10.7 billion in the third quarter of fiscal 2008, with a
decline in domestic comparable store sales of 9.0% as compared to the third
quarter of fiscal 2007
- Adjusted EBITDA of $148 million in the third quarter and $722 million
through the first three quarters of 2008
- Managing in a difficult economic environment
- Reduced domestic inventory by $575 million as of third quarter of 2008
- Reduced domestic selling and administrative expenses by $129 million in
the third quarter
- Closing select under-performing stores as part of our ongoing review
- Providing differentiated solutions for our customers, including our
layaway program
- Maintained strong balance sheet and liquidity position, including a $4
billion revolving credit facility, which matures in March 2010, secured by
approximately $10 billion of domestic inventory as of quarter end
- Increased share repurchase authorization of $500 million
HOFFMAN ESTATES, Ill., Dec. 2 /PRNewswire-FirstCall/ -- Sears Holdings
Corporation ("Holdings," "we," "us," "our" or the "Company") (Nasdaq: SHLD)
today reported a net loss of $146 million, or $1.16 per diluted share
compared with net income of $4 million, or $0.03 per diluted share, in the
prior year. Our third quarter 2008 results include a charge of $101 million
($61 million after tax or $0.49 per diluted share) related to costs
associated with the closure of 14 stores and asset impairments, of which
$76 million ($46 million after tax or $0.37 per diluted share) relates to
non-cash items. This charge was partially offset by mark-to-market gains on
Sears Canada hedge transactions of $67 million ($29 million after tax and
minority interest or $0.23 per diluted share). Excluding these items, the
net loss per diluted share was $0.90 for the third quarter of fiscal 2008.
The decline in our third quarter results from the same quarter last year
primarily reflects lower operating results at both Sears Domestic and
Kmart, partially offset by improved operating results at Sears Canada.
"We believe we have positioned ourselves well for a difficult holiday
shopping season. We have reduced our inventory levels, cut expenses, and
announced the closing of select underperforming stores as part of our
ongoing review. We are offering differentiated solutions for our customers
to help them meet their holiday needs, through programs like our successful
layaway program at Kmart, which we have recently expanded to Sears, and our
Heroes at Home Military Wish Registry, which enables Americans to help make
the wishes of military members and their families come true," said W. Bruce
Johnson, Sears Holdings' interim chief executive officer and president. "As
a result of severe conditions in the economy, our EBITDA forecast mentioned
in the August 28, 2008 press release is no longer relevant given its
assumption of flat to modest comparable store sales declines in the third
and fourth quarters."
In addition to the 14 store closings noted above, we are closing eight
additional underperforming stores. We expect to record a pre-tax charge of
up to $21 million related to these closures in the fourth quarter of 2008.
We expect that these store closings will be additive to earnings, given
that the closure of these stores eliminates negative cash flows incurred
from their operations, and will generate cash from the liquidation of
inventory and from other proceeds. Mr. Johnson further noted, "Given the
current economic and retail environment, we will carefully evaluate
alternatives that provide financial flexibility in the near-term, while
enhancing shareholder value in the long-term. These actions may include
additional store closings or divestitures, remodels or repositioning of
existing stores, acquisitions, and repurchases of our debt and common
stock."
Revenues and Comparable Store Sales
For the quarter, our total revenues declined approximately $0.9 billion
to $10.7 billion in fiscal 2008, as compared to $11.6 billion for the third
quarter of fiscal 2007. The decrease in revenue primarily reflects the
impact of lower domestic comparable store sales.
For the quarter, Sears Domestic's comparable store sales declined 10.6%
while Kmart's comparable store sales declined 7.0%. Total domestic
comparable store sales declined 9.0%. The comparable store sales declines
at Sears Domestic were more pronounced in the month of October as
conditions in the general economy deteriorated further. Comparable store
sales declined for the quarter across most major categories at both Kmart
and Sears Domestic. Comparable store sales declines continue to be driven
by categories directly impacted by housing market conditions (including
home appliances at Sears Domestic), a slowdown in consumers' discretionary
spending (including home and household goods and apparel at both Sears
Domestic and Kmart and lawn and garden at Sears Domestic), as well as a
shift in our promotional strategy for food and consumables at Kmart and
tools at Sears Domestic.
November 2008 Comparable Store Sales
Our domestic comparable store sales declined 8.7% during the month of
November 2008. This decline includes a decline in comparable store sales of
7.8% at Sears Domestic and 10.0% at Kmart. The month of November 2008
includes two days of the holiday shopping season compared to the month of
November 2007 which included nine days due to a one-week shift in the
Thanksgiving holiday.
The November Kmart comparable store sales also do not reflect sales
made through our layaway program. Initial usage of the program has been
encouraging, and these sales are not recognized until after merchandise is
both paid for and picked up by customers using the program, which will be
predominantly in December 2008.
Comparable store sales declines not attributed to the holiday shift are
mainly the result of external economic factors discussed previously.
November comparable store sales declines continue to be driven by
categories directly impacted by a slowdown in consumers' discretionary
spending (including home and household goods at both Sears Domestic and
Kmart and apparel and lawn and garden at Sears Domestic). Declines at Sears
Domestic were partially offset by increases in home appliances.
Operating Income
For the third quarter 2008, we reported an operating loss of $202
million, as compared to operating income of $51 million in the third
quarter of fiscal 2007. Our operating loss of $202 million was mainly due
to the $101 million of above-noted charges, as well as lower gross margin
generated at both Kmart and Sears Domestic. We generated $2.9 billion in
total gross margin in the third quarter as compared to $3.2 billion in the
third quarter last year. The above-noted $101 million charge included a
charge to cost of goods sold of $10 million for inventory reserves recorded
in connection with store closings. Our gross margin rate decreased by
approximately 60 basis points to 26.8% and mainly reflects a rate decline
of 150 basis points at Sears Domestic due to increased markdown activity.
The decline at Sears Domestic was partially offset by increases of 40 basis
points at both Kmart and Sears Canada. If the overall retail environment
continues to be impacted by unfavorable economic factors, our sales and
gross margin would likely continue to be pressured for the balance of
fiscal 2008.
Declines in sales and gross margin were partially offset by a decline
of $153 million in selling and administrative expenses for the quarter. The
decline includes decreases in domestic expenses of $129 million as compared
to the third quarter of fiscal 2007. Depreciation expense increased $71
million and includes a non-cash fixed asset impairment charge of $76
million.
Financial Position
We had cash and cash equivalents of $1.2 billion at November 1, 2008
(of which $502 million was domestic and $670 million was at Sears Canada)
as compared to $1.5 billion at November 3, 2007 and $1.6 billion at
February 2, 2008. The November 1, 2008 cash balance excludes $94 million on
deposit with The Reserve Primary Fund, a money market fund which has
temporarily suspended withdrawals while it liquidates its holdings to
generate cash to distribute. As a result, we reclassified $94 million from
cash to the prepaid expenses and other current assets line within our
Condensed Consolidated Balance Sheet at November 1, 2008. We recorded a $3
million loss ($2 million after tax or $0.01 per diluted share) during the
third quarter of 2008 in connection with our investment in The Reserve
Primary Fund. Subsequently on November 21, 2008, we received notice from
The Reserve Primary Fund that it expects to make an additional distribution
on or about December 5, 2008 and we estimate our pro rata share to be
approximately $54 million.
During the first three quarters of 2008, significant uses of cash
included share repurchases of $558 million (as discussed further below),
capital expenditures of $395 million, pension contributions of $204
million, net long-term debt repayments of $196 million and payments on
commercial paper borrowings of $129 million. These amounts were offset by a
$1.9 billion increase in short-term borrowings, primarily through borrowing
on our $4 billion credit facility. Had $94 million of our short-term
investment in The Reserve Primary Fund been available short-term borrowings
would have increased by $1.8 billion.
Merchandise inventories at November 1, 2008 were $11.4 billion, as
compared to $12.1 billion at November 3, 2007. Domestic inventory declined
$575 million from $11.0 billion at November 3, 2007 to approximately $10.5
billion at November 1, 2008, reflecting the effectiveness of our efforts to
control inventory levels. Sears Canada's inventory levels decreased
approximately $189 million from November 3, 2007 to $898 million at
November 1, 2008. The decrease in Sears Canada's inventory is primarily due
to the change in exchange rates. As we expect difficult economic conditions
to persist in the near term, we intend to tightly manage inventory levels
with the goal of reducing domestic inventory levels below last year's in
the fourth quarter.
Resources and Liquidity
Holdings has significant assets, including cash of $1.2 billion, a
large number of owned real estate properties, a stable of nationally
recognized proprietary brands including Kenmore, Craftsman, Lands' End and
DieHard, our wholly-owned Lands' End subsidiary and a 72% equity interest
in Sears Canada. In addition, on a consolidated basis Holdings has $11.4
billion of inventory, or $7 billion of inventory net of $4.4 billion of
accounts payable.
Since the merger of Kmart and Sears created Holdings in 2005, we have
consistently generated cash flow from operations. In its first three years
(from 2005 to 2007) Holdings generated $5.2 billion of operating cash, and
we expect to generate significant cash from operations in fiscal 2008 as
well. This strong cash flow has enabled us to reduce our obligations, as we
have we paid down approximately $2 billion of the debt assumed in the
merger and made contributions of approximately $1 billion to fund the
frozen pension plans of our predecessor companies.
Holdings has consistently maintained a strong capital structure with
excess liquidity even during the holiday peak. Our revolving credit
facility, which matures in March of 2010, is used to issue standby letters
of credit to support our insurance programs (currently approximately $1
billion outstanding) and to fund seasonal working capital needs (currently
approximately $2 billion in borrowings outstanding excluding our standby
letters of credit). As we reach our peak working capital need early in the
fourth quarter, we expect to repay the entire $2 billion of borrowings in
December (although we do expect to borrow on the revolver again in the
month of January 2009). An affiliate of Lehman Brothers has a $207 million
total commitment in the $4 billion revolving credit facility, but since
September 17, 2008 has not funded its proportionate share of our borrowings
under the facility.
Share Repurchase
The Company also announced today that its Board of Directors has
approved the repurchase of up to an additional $500 million of the
Company's common shares. This authorization is in addition to the $72
million worth of shares that currently remain available for repurchase
under the Company's existing repurchase program. Share repurchases may be
implemented using a variety of methods, which may include open market
purchases, privately negotiated transactions, block trades, accelerated
share repurchase transactions, the purchase of call options, the sale of
put options or otherwise, or by any combination of such methods. Timing of
repurchases is dependent on prevailing market conditions, alternative uses
of capital and other factors.
Bruce Johnson commented, "After careful consideration and a review of
the company's valuation, prospects, cash flow and liquidity, we believe
that our shares represent an attractive investment for our shareholders.
Given the difficult retail environment and its effect on our free cash
flow, we have reduced our rate of repurchases throughout 2008 as we worked
to retain flexibility to pursue opportunities and address contingencies.
With significant assets and cash flow, we believe Sears Holdings has the
flexibility to continue to invest in our business, repay debt, and consider
acquisitions opportunities as well."
During the 13- and 39- week periods ended November 1, 2008, we
repurchased 1.4 million and 7.4 million of our common shares at a total
cost of $81 million and $558 million, respectively, under our share
repurchase program. During the 4-week period from November 2, 2008 to
November 29, 2008 the Company repurchased 1.2 million common shares at a
total cost of $53 million. Since the third quarter of fiscal 2005, when our
repurchase plan was first approved, we have repurchased approximately 41.4
million of our common shares at a total cost of $4.9 billion pursuant to
the program. As of November 28, 2008, we had approximately 123.6 million
common shares outstanding.
Adjusted EBITDA
For purposes of evaluating operating performance, we use an Adjusted
Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted
EBITDA") measurement computed as operating income appearing on the
statement of operations less depreciation and amortization and
gains/(losses) on sales of assets. In addition, it is adjusted to exclude
certain nonrecurring gains/(losses). Adjusted EBITDA is used by management
to evaluate the operating performance of our businesses for comparable
periods. Adjusted EBITDA should not be used by investors or other third
parties as the sole basis for formulating investment decisions as it
excludes a number of important cash and non-cash recurring items.
Management compensates for this limitation by using GAAP financial measures
as well in managing our businesses.
While Adjusted EBITDA is a non-GAAP measurement, management believes
that it is an important indicator of operating performance because:
>
-- EBITDA excludes the effects of financing 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 the comparability of results.
Adjusted EBITDA was determined as follows:
13 Weeks Ended 39 Weeks Ended
November November November November
1, 2008 3, 2007 1, 2008 3, 2007
Operating income (loss)
per statement of
operations $(202) $51 $(23) $792
Plus depreciation and
amortization(1) 326 255 821 779
Less gain on sales of
assets (1) -- (39) (10)
Before excluded items 123 306 759 1,561
Closed store reserve 25 -- 25 --
Legal matter reserve -- -- (62) --
Sears Canada post-retirement
benefit plans curtailment
gain -- -- -- (27)
Hurricane related recoveries -- (1) -- (19)
Adjusted EBITDA as defined $148 $305 $722 $1,515
% to revenues 1.4% 2.6% 2.2% 4.3%
(1) Depreciation and amortization for the 13- and 39-week periods ended
November 1, 2008 includes the $76 million of above-noted fixed asset
impairment charges recorded during the third quarter of fiscal 2008.
Adjusted EBITDA for our domestic (United States operations) and Sears
Canada operations are as follows:
>
13 Weeks Ended
Adjusted EBITDA % To Revenues
November 1, November 3, November 1, November 3,
2008 2007 2008 2007
Domestic operations $33 $197 0.4% 1.9%
Sears Canada 115 108 8.8% 7.9%
Total Adjusted EBITDA $148 $305 1.4% 2.6%
39 Weeks Ended
Adjusted EBITDA % To Revenues
November 1, November 3, November 1, November 3,
2008 2007 2008 2007
Domestic operations $407 $1,244 1.4% 3.9%
Sears Canada 315 271 8.0% 7.2%
Total Adjusted EBITDA $722 $1,515 2.2% 4.3%
Quarterly Report on Form 10-Q
For a detailed discussion of the Company's financial results, please
see the Company's Quarterly Report on Form 10-Q, which will be filed with
the Securities and Exchange Commission and posted to the Company's website
at http://www.searsholdings.com on December 2, 2008.
Forward-Looking Statements
Results are unaudited. This press release contains forward-looking
statements about our expectations regarding our performance, resources and
financial position. Forward-looking statements are subject to risks and
uncertainties that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by these forward-looking
statements. Such statements are based upon the current beliefs and
expectations of our management and are subject to significant risks and
uncertainties. The following factors, among others, could cause actual
results to differ from those set forth in the forward-looking statements:
our ability to offer merchandise and services that our customers want,
including our proprietary brand products; our ability to successfully
implement initiatives to improve inventory management and other
capabilities; competitive conditions in the retail and related services
industries; the impact of seasonal buying patterns, including seasonal
fluctuations due to weather conditions, which are difficult to forecast
with certainty; general economic conditions and normal business
uncertainty, changes in consumer confidence, tastes, preferences and
spending, including the impact of fuel costs and spending patterns, the
availability and level of consumer debt, and unanticipated increases in our
costs; our dependence on sources outside the United States for significant
amounts of our merchandise; our extensive reliance on computer systems to
process transactions, summarize results and manage our business; our
reliance on third parties to provide us with services in connection with
the administration of certain aspects of our business; our ability to
properly implement and realize the expected benefits from our new
organizational structure and operating model; our ability to attract,
motivate and retain key executives and other associates; the outcome of
pending and/or future legal proceedings, including product liability claims
and bankruptcy claims, including proceedings with respect to which the
parties have reached a preliminary settlement; and our ability to
successfully invest available capital. We intend the forward-looking
statements to speak only as of the time made and do not undertake to update
or revise them as more information becomes available.
About Sears Holdings Corporation
Sears Holdings Corporation is the nation's fourth largest broadline
retailer, with over $50 billion in annual revenues, and approximately 3,900
full-line and specialty retail stores in the United States and Canada.
Sears Holdings is the leading home appliance retailer as well as a leader
in tools, lawn and garden, home electronics and automotive repair and
maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard,
and a broad apparel offering, including such well-known labels as Lands'
End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington
brands. We also have Martha Stewart Everyday products, which are offered
exclusively in the U.S. by Kmart and in Canada by Sears Canada. We are the
nation's largest provider of home services, with more than 13 million
service calls made annually. For more information, visit Sears Holdings'
website at http://www.searsholdings.com.
* * * * *
During the fourth quarter of fiscal 2007, Sears Canada changed its
fiscal year end from the Saturday nearest December 31st to the Saturday
nearest January 31st. Prior to this change, Sears Canada's results were
consolidated into Holdings' results on a one-month lag. With the change,
Sears Canada's fiscal year end is now aligned with the fiscal year end of
Holdings. As required by accounting standards, this change has been
retrospectively applied to all prior year amounts included in the following
Condensed Consolidated Statements of Operations, Condensed Consolidated
Balance Sheets, Segment Results and Adjusted EBITDA.
>
Sears Holdings Corporation
Condensed Consolidated Statements of Operations
(Unaudited)
13 Weeks Ended 39 Weeks Ended
November November November November
millions, except per share data 1, 3, 1, 3,
2008 2007 2008 2007
REVENUES
Merchandise sales and services $10,660 $11,622 $33,490 $35,629
COSTS AND EXPENSES
Cost of sales, buying and occupancy 7,806 8,432 24,491 25,738
Gross margin dollars 2,854 3,190 8,999 9,891
Gross margin rate 26.8% 27.4% 26.9% 27.8%
Selling and administrative 2,731 2,884 8,240 8,330
Selling and administrative expense
as a percentage of total revenues 25.6% 24.8% 24.6% 23.4%
Depreciation and amortization 326 255 821 779
Gain on sales of assets (1) - (39) (10)
Total costs and expenses 10,862 11,571 33,513 34,837
Operating income (loss) (202) 51 (23) 792
Interest and investment income (9) (31) (40) (113)
Interest expense 71 67 202 211
Other income (80) - (78) (17)
Income (loss) before income taxes and
minority interest (184) 15 (107) 711
Income taxes expense (benefit) (73) (4) (45) 272
Minority interest 35 15 75 39
NET INCOME (LOSS) $(146) $4 $(137) $400
EARNINGS (LOSS) PER COMMON SHARE
Diluted earnings (loss) per share $(1.16) $0.03 $(1.07) $2.70
Diluted weighted average common
shares outstanding 125.5 139.9 128.5 148.2
Sears Holdings Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
millions November 1, November 3, February 2,
2008 2007 2008
ASSETS
Current assets
Cash and cash equivalents $1,172 $1,535 $1,622
Receivables 1,195 977 744
Merchandise inventories 11,364 12,128 9,963
Prepaid expenses and other current
assets 616 730 473
Total current assets 14,347 15,370 12,802
Property and equipment, net 8,265 8,873 8,863
Goodwill 1,658 1,691 1,686
Trade names and other intangible assets 3,302 3,370 3,353
Other assets 382 476 693
TOTAL ASSETS $27,954 $29,780 $27,397
LIABILITIES
Current liabilities
Short-term borrowings and current
portion of long-term debt $2,306 $1,379 $404
Merchandise payables 4,414 4,512 3,487
Unearned revenues 1,074 1,128 1,121
Accrued expenses and other current
liabilities 3,880 4,452 4,550
Total current liabilities 11,674 11,471 9,562
Long-term debt and capitalized lease
obligations 2,175 2,657 2,606
Pension and post-retirement benefits 1,014 1,420 1,258
Minority interest and other liabilities 3,221 3,489 3,304
Total Liabilities 18,084 19,037 16,730
Total Shareholders' Equity 9,870 10,743 10,667
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $27,954 $29,780 $27,397
Total common shares outstanding 124.9 137.7 132.4
Sears Holdings Corporation
Segment Results
(Unaudited)
13 Weeks Ended November 1, 2008
millions, except for number of stores Sears
Sears
Kmart Domestic Canada Holdings
Merchandise sales and services $3,532 $5,827 $1,301 $10,660
Cost of sales, buying and
occupancy 2,753 4,171 882 7,806
Gross margin dollars 779 1,656 419 2,854
Gross margin rate 22.1% 28.4% 32.2% 26.8%
Selling and administrative 828 1,599 304 2,731
Selling and administrative expense
as a percentage of total revenues 23.4% 27.4% 23.4% 25.6%
Depreciation and amortization 54 242 30 326
(Gain) loss on sales of assets - (2) 1 (1)
Total costs and expenses 3,635 6,010 1,217 10,862
Operating income (loss) $(103) $(183) $84 $(202)
Number of:
Kmart Stores 1,378 - - 1,378
Full-Line Stores - 933 122 1,055
Specialty Stores - 1,198 263 1,461
Total Stores 1,378 2,131 385 3,894
13 Weeks Ended November 3, 2007
millions, except for number of stores Sears
Sears
Kmart Domestic Canada Holdings
Merchandise sales and services $3,803 $6,449 $1,370 $11,622
Cost of sales, buying and
occupancy 2,979 4,519 934 8,432
Gross margin dollars 824 1,930 436 3,190
Gross margin rate 21.7% 29.9% 31.8% 27.4%
Selling and administrative 855 1,701 328 2,884
Selling and administrative expense
as a percentage of total revenues 22.5% 26.4% 23.9% 24.8%
Depreciation and amortization 28 193 34 255
Total costs and expenses 3,862 6,413 1,296 11,571
Operating income (loss) $(59) $36 $74 $51
Number of:
Kmart Stores 1,387 - - 1,387
Full-Line Stores - 934 123 1,057
Specialty Stores - 1,124 255 1,379
Total Stores 1,387 2,058 378 3,823
39 Weeks Ended November 1, 2008
millions, except for number of stores Sears
Sears
Kmart Domestic Canada Holdings
Merchandise sales and services $11,270 $18,294 $3,926 $33,490
Cost of sales, buying and
occupancy 8,706 13,090 2,695 24,491
Gross margin dollars 2,564 5,204 1,231 8,999
Gross margin rate 22.8% 28.4% 31.4% 26.9%
Selling and administrative 2,547 4,777 916 8,240
Selling and administrative expense
as a percentage of total revenues 22.6% 26.1% 23.3% 24.6%
Depreciation and amortization 121 606 94 821
Gain on sales of assets (2) (6) (31) (39)
Total costs and expenses 11,372 18,467 3,674 33,513
Operating income (loss) $(102) $(173) $252 $(23)
Number of:
Kmart Stores 1,378 - - 1,378
Full-Line Stores - 933 122 1,055
Specialty Stores - 1,198 263 1,461
Total Stores 1,378 2,131 385 3,894
39 Weeks Ended November 3, 2007
millions, except for number of stores Sears
Sears
Kmart Domestic Canada Holdings
Merchandise sales and services $12,046 $19,815 $3,768 $35,629
Cost of sales, buying and
occupancy 9,237 13,884 2,617 25,738
Gross margin dollars 2,809 5,931 1,151 9,891
Gross margin rate 23.3% 29.9% 30.5% 27.8%
Selling and administrative 2,564 4,913 853 8,330
Selling and administrative expense
as a percentage of total revenues 21.3% 24.8% 22.6% 23.4%
Depreciation and amortization 81 601 97 779
Gain on sales of assets (1) (1) (8) (10)
Total costs and expenses 11,881 19,397 3,559 34,837
Operating income $165 $418 $209 $792
Number of:
Kmart Stores 1,387 - - 1,387
Full-Line Stores - 934 123 1,057
Specialty Stores - 1,124 255 1,379
Total Stores 1,387 2,058 378 3,823
Sears Holdings Corporation
Adjusted EBITDA
13 Weeks Ended
millions November 1, 2008 November 3, 2007
Domestic Sears Domestic Sears
Operations Sears Holdings Operations Sears Holdings
Canada Canada
Operating income (loss)
per statement of
operations $(286) $84 $(202) $(23) $74 $51
Plus depreciation and
amortization 296 30 326 221 34 255
Less (gain) loss on
sales of assets (2) 1 (1) - - -
Before excluded items 8 115 123 198 108 306
Closed store reserve 25 - 25 - - -
Hurricane related
recoveries - - - (1) - (1)
Adjusted EBITDA as
defined $33 $115 $148 $197 $108 $305
% to revenues 0.4% 8.8% 1.4% 1.9% 7.9% 2.6%
39 Weeks Ended
millions November 1, 2008 November 3, 2007
Domestic Sears Domestic Sears
Operations Sears Holdings Operations Sears Holdings
Canada Canada
Operating income (loss)
per statement of
operations $(275) $252 $(23) $583 $209 $792
Plus depreciation and
amortization 727 94 821 682 97 779
Less gain on sales
of assets (8) (31) (39) (2) (8) (10)
Before excluded items 444 315 759 1,263 298 1,561
Closed store reserve 25 - 25 - - -
Legal matter (62) - (62) - - -
Hurricane related
recoveries - - - (19) - (19)
Sears Canada
post-retirement
benefit plans
curtailment gain - - - - (27) (27)
Adjusted EBITDA as
defined $407 $315 $722 $1,244 $271 $1,515
% to revenues 1.4% 8.0% 2.2% 3.9% 7.2% 4.3%
SOURCE Sears Holdings Corporation
Web site: http://www.searsholdings.com
CONTACT: Sears Holdings Public Relations, +1-847-286-8371
