Sears Holdings Reports Fourth Quarter and Full Year 2009 Results
HOFFMAN ESTATES, Ill., Feb. 23 /PRNewswire-FirstCall/ -- Sears Holdings Corporation ("Holdings," "we," "us," "our" or the "Company") (Nasdaq: SHLD) today reported its fourth quarter and full year 2009 results. Highlights for the quarter and full year include:
- Net income attributable to Holdings' shareholders for the quarter of $430 million ($3.74 per diluted share) in 2009 and $190 million ($1.55 per diluted share) in 2008 and for the year of $235 million ($1.99 per diluted share) in 2009 and $53 million ($0.42 per diluted share) in 2008;
- Adjusted earnings per diluted share for the fourth quarter of $3.69 in 2009 and $2.94 in 2008 and for the full year of $3.19 in 2009 and $1.69 in 2008;
- Adjusted EBITDA of $1.034 billion for the fourth quarter of 2009 and $1.822 billion for fiscal 2009;
- Fourth quarter EPS of $3.99, relative to the range of $3.36-$4.06 projected in the outlook of January 7, 2010; The outlook expressly excluded any store closing costs and hedge gains or losses which amounted to $0.25 per share net;
- An increase in comparable store sales at Kmart of 1.7% in the fourth quarter 2009; and
- Cash balances at year end increased to $1.7 billion from $1.3 billion last year, while total debt was reduced by $414 million
"We continued to make progress in improving our performance in the fourth quarter, as Kmart comparable store sales increased for the second straight quarter and domestic Adjusted EBITDA increased over last year. Our improved performance is especially encouraging given the challenging economic environment, particularly related to big-ticket items," said W. Bruce Johnson, Sears Holdings' interim chief executive officer and president. "Further, our results indicate the success we can have by making a concerted effort to meet our customers' needs each and every day."
Fourth Quarter and Full Year Revenues and Comparable Store Sales
Total revenues decreased $33 million to $13.2 billion for the quarter ended January 30, 2010. Full year fiscal 2009 total revenues decreased $2.8 billion to $44.0 billion. The decreases were primarily due to lower comparable store sales and 62 fewer Kmart and Sears full-line stores. The decrease in revenues for the fourth quarter and full year in 2009 includes an increase of $219 million and a decline of $142 million, respectively, due to foreign currency exchange rates.
For the quarter, domestic comparable store sales declined 2.5%, and included an increase at Kmart of 1.7%, offset by a decline at Sears Domestic of 6.1%. For the year, domestic comparable store sales declined 5.1%, and included a slight decline at Kmart of 0.8% and a decline at Sears Domestic of 8.7%. The Kmart quarterly increase in comparable store sales was primarily driven by increases in the toys and home categories, partially offset by a decline in the apparel category. The quarter and the year also benefited from the impact of assuming the operations of its footwear business from a third party effective January 2009. Declines in sales for the quarter and year at Sears Domestic include decreases in the home appliance, lawn and garden, and home electronics categories.
Operating Income
Operating income was $749 million for the quarter ended January 30, 2010 and $325 million for the quarter ended January 31, 2009. Operating income increased $424 million and was the result of the significant items noted below and an increase in gross margin dollars due to the increase in gross margin rate. Operating income for the fourth quarter of 2009 includes expenses of $85 million related to domestic pension plans, store closings and severance, and a $32 million gain recorded in connection with the settlement of Visa/MasterCard antitrust litigation. Operating income for the fourth quarter of 2008 included a charge of $336 million related to asset impairments and costs associated with store closings and severance.
Operating income was $713 million for fiscal 2009 and $302 million for fiscal 2008. Operating income increased $411 million and was the result of reductions in selling and administrative expenses, partially offset by lower gross margin dollars given lower overall sales. Operating income for fiscal 2009 includes expenses of $301 million related to domestic pension plans, store closings and severance, a $44 million gain recognized by Sears Canada on the sale of its former headquarters, and a $32 million gain recorded in connection with the settlement of Visa/MasterCard antitrust litigation. Operating income for fiscal 2008 included a charge of $437 million related to costs associated with asset impairments and store closings and severance, as well as the positive impact of the reversal of a $62 million reserve because of a favorable verdict in connection with a legal settlement. See the attached schedule, "Significant Item Impact," for a reconciliation from GAAP to as adjusted amounts, including adjusted earnings per diluted share.
Financial Position
We had cash balances of $1.7 billion at January 30, 2010 ($398 million domestic and $1.3 billion at Sears Canada) and $1.3 billion at January 31, 2009. Significant uses of our cash during fiscal 2009 include repayments of $452 million on total outstanding debt balances, $424 million for share repurchases, capital expenditures of $361 million, and contributions to our pension and post-retirement benefit plans of $209 million.
Total debt (consisting of short-term borrowings, long-term debt and capital lease obligations) was $2.5 billion at January 30, 2010 and $2.9 billion at January 31, 2009. Total short-term borrowings at January 30, 2010 of $325 million were $117 million lower than our level of borrowings at January 31, 2009. The decrease in outstanding debt includes a reduction in domestic long-term debt and capital lease obligations of $333 million. Long-term debt of the parent (which excludes the debt of our Sears Canada ($281 million) and Orchard Supply Hardware ($296 million) subsidiaries, which is non-recourse to the parent) is less than $1 billion, with no significant required repayments until 2011.
In addition to these debt repayments, we further reduced our financial commitments as the balance of our domestic letters of credit decreased by one-third to $646 million, from last year's balance of $968 million. The letters of credit are used primarily to provide collateral in support of our insurance programs.
Share Repurchase
During the 13- and 52- week periods ended January 30, 2010, we repurchased approximately 0.9 million and 7.1 million common shares at a total cost of $66 million and $424 million, respectively, under our share repurchase program. Our repurchases for the 13- and 52- week periods ended January 30, 2010 were made at average prices of $71.68 and $59.81 per share, respectively. As of January 30, 2010, we had remaining authorization to repurchase $581 million of common shares under the share repurchase program. The 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 will be dependent on prevailing market conditions, alternative uses of capital and other factors.
Other Matters
We made the decision to close 27 underperforming stores during the fourth quarter of 2009 and 62 stores during the fiscal year 2009. We made the decision to close 32 underperforming stores during the fourth quarter of 2008 and 46 underperforming stores during the fiscal year 2008. We expect to record an additional charge of approximately $7 million during the first half of 2010 as the stores we decided to close in the fourth quarter of 2009 complete operations. Similar to our previous store closings, we expect that these 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. The list of stores closed can be found at www.searsmedia.com. We continue to evaluate our business in an effort to improve the operating results of the Company.
As we noted in our first quarter 2009 earnings release, the Company has a legacy pension obligation for past service performed by Kmart and Sears, Roebuck and Co. associates. The annual pension expense included in our financial statements related to these legacy domestic pension plans was relatively minimal in recent years. However, due to the severe decline in the capital markets that occurred in the latter part of 2008 our domestic pension expense increased by approximately $170 million for the fiscal year 2009. As a result, we present pension expense as a significant item affecting earnings and as a separate line item in our Adjusted EBITDA reconciliation to promote operating performance comparability.
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 (loss) appearing on the statements of income excluding depreciation and amortization and gains/(losses) on sales of assets. In addition, it is adjusted to exclude certain significant 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.
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:
Quarters Ended Fiscal Years Ended
-------------- ------------------
January 30, January 31, January 30, January 31,
2010 2009 2010 2009
------ ------ ------ ------
Operating income per
statement of income $749 $325 $713 $302
Plus depreciation and
amortization 248 236 926 981
Less gain on sales of
assets (4) (12) (74) (51)
------ ------ ------ ------
Before excluded items 993 549 1,565 1,232
Closed store reserve
and severance 31 52 119 77
Domestic pension
expense 42 -- 170 --
Legal settlement -- -- -- (62)
Goodwill and asset
impairments -- 284 -- 360
Visa/MasterCard
settlement (32) -- (32) --
------ ------ ------ ------
Adjusted EBITDA as
defined $1,034 $885 $1,822 $1,607
====== ====== ====== ======
% to revenues 7.8% 6.7% 4.1% 3.4%
Adjusted EBITDA for our segments are as follows:
Quarters Ended
--------------
Adjusted EBITDA % To Revenues
--------------- -------------
January 30, January 31, January 30, January 31,
2010 2009 2010 2009
------ ------ ------ ------
Kmart $341 $321 6.9% 6.5%
Sears Domestic 491 424 7.1% 6.0%
Sears Canada (1) 202 140 14.1% 10.7%
------ ------ ------ ------
Total Adjusted EBITDA $1,034 $885 7.8% 6.7%
====== ====== ====== ======
(1) Fourth quarter EBITDA in Canadian dollars was $213 million in 2009 and
$172 million in 2008.
Fiscal Years Ended
------------------
Adjusted EBITDA % To Revenues
--------------- -------------
January 30, January 31, January 30, January 31,
2010 2009 2010 2009
------ ------ ------ ------
Kmart $364 $349 2.3% 2.2%
Sears Domestic 1,003 803 4.2% 3.2%
Sears Canada (1) 455 455 9.8% 8.7%
------ ------ ------ ------
Total Adjusted EBITDA $1,822 $1,607 4.1% 3.4%
====== ====== ====== ======
(1) Full year EBITDA in Canadian dollars was $510 million in 2009 and
$491 million in 2008.
Annual Report on Form 10-K
We plan to file with the SEC our Annual Report on Form 10-K for the year ended January 30, 2010 on or before March 31, 2010.
Forward-Looking Statements
Results are preliminary and unaudited. This press release contains forward-looking statements about our expectations for fiscal year 2010. 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; worldwide economic conditions and business uncertainty, the availability of consumer and commercial credit, changes in consumer confidence, tastes, preferences and spending, and changes in vendor relationships; the impact of seasonal buying patterns, including seasonal fluctuations due to weather conditions, which are difficult to forecast with certainty; 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; impairment charges for goodwill and intangible assets or fixed-asset impairment for long-lived assets; our ability to attract, motivate and retain key executives and other associates; and the outcome of pending and/or future legal proceedings, including product liability claims, including proceedings with respect to which the parties have reached a preliminary settlement. 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 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. It also has the Country Living collection, which is offered by Sears and Kmart. We are the nation's largest provider of home services, with more than 12 million service calls made annually. Sears Holdings Corporation operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. For more information, visit Sears Holdings' website at www.searsholdings.com.
Sears Holdings Corporation
Consolidated Statements of Income
(Unaudited)
Amounts are Preliminary and Subject to Change
Quarters Ended Fiscal Years Ended
millions, except -------------- ------------------
per share data January 30, January 31, January 30, January 31,
2010 2009 2010 2009
---- ---- ---- ----
REVENUES
Merchandise sales
and services $13,247 $13,280 $44,043 $46,770
------- ------- ------- -------
COSTS AND EXPENSES
Cost of sales, buying
and occupancy 9,467 9,627 31,824 34,118
Gross margin dollars 3,780 3,653 12,219 12,652
Gross margin rate 28.5% 27.5% 27.7% 27.1%
Selling and
administrative 2,787 2,820 10,654 11,060
Selling and
administrative
expense as a
percentage of total
revenues 21.0% 21.2% 24.2% 23.6%
Depreciation and
amortization 248 236 926 981
Impairment charges - 284 - 360
Gain on sales of
assets (4) (12) (74) (51)
--- --- --- ---
Total costs and
expenses 12,498 12,955 43,330 46,468
------ ------ ------ ------
Operating income 749 325 713 302
Interest expense (71) (70) (265) (272)
Interest and
investment income 9 6 33 46
Other income (loss) (9) 30 (61) 108
--- --- --- ---
Income before income
taxes 678 291 420 184
Income tax expense (217) (130) (123) (85)
---- ---- ---- ---
Net income 461 161 297 99
(Income) loss
attributable to
noncontrolling
interest (31) 29 (62) (46)
--- --- --- ---
NET INCOME ATTRIBUTABLE TO
HOLDINGS' SHAREHOLDERS $430 $190 $235 $53
==== ==== ==== ===
INCOME PER COMMON
SHARE ATTRIBUTABLE TO
HOLDINGS' SHAREHOLDERS
Diluted income per
share $3.74 $1.55 $1.99 $0.42
Diluted weighted
average common
shares outstanding 114.9 122.5 117.9 127.0
Sears Holdings Corporation
Condensed Consolidated Balance Sheets
Amounts are Preliminary and Subject to Change
(Unaudited)
-----------
millions January 30, January 31,
2010 2009
---- ----
ASSETS
Current assets
Cash and cash equivalents $1,689 $1,173
Restricted cash 11 124
Receivables 652 839
Merchandise inventories 8,705 8,795
Prepaid expenses and other current
assets 381 485
--- ---
Total current assets 11,438 11,416
Property and equipment, net 7,709 8,091
Goodwill 1,392 1,392
Trade names and other intangible assets 3,208 3,283
Other assets 1,061 1,160
----- -----
TOTAL ASSETS $24,808 $25,342
======= =======
LIABILITIES
Current liabilities
Short-term borrowings $325 $442
Current portion of long-term debt
and capitalized lease obligations 482 345
Merchandise payables 3,335 3,006
Unearned revenues 1,012 1,069
Accrued expenses and other current
liabilities 3,632 3,650
----- -----
Total current liabilities 8,786 8,512
Long-term debt and capitalized
lease obligations 1,698 2,132
Pension and post-retirement benefits 2,271 2,057
Other long-term liabilities 2,618 2,942
----- -----
Total Liabilities 15,373 15,643
------ ------
Total Equity 9,435 9,699
----- -----
TOTAL LIABILITIES AND EQUITY $24,808 $25,342
======= =======
Total common shares outstanding 114.8 122.0
Sears Holdings Corporation
Segment Results
(Unaudited)
Amounts are Preliminary and Subject to Change
Quarter Ended January 30, 2010
--------------------------------
millions, except store data Sears
----------------
Sears
Kmart Domestic Canada Holdings
------- -------- ------ --------
Merchandise sales and services $4,918 $6,892 $1,437 $13,247
------ ------ ------ -------
Cost of sales, buying and occupancy 3,686 4,832 949 9,467
Gross margin dollars 1,232 2,060 488 3,780
Gross margin rate 25.1% 29.9% 34.0% 28.5%
Selling and administrative 897 1,604 286 2,787
Selling and administrative expense
as a percentage of total revenues 18.2% 23.3% 19.9% 21.0%
Depreciation and amortization 43 177 28 248
Gain on sales of assets (4) - - (4)
--- --- --- --
Total costs and expenses 4,622 6,613 1,263 12,498
----- ----- ----- ------
Operating income $296 $279 $174 $749
==== ==== ==== ====
Number of:
Kmart Stores 1,327 - - 1,327
Full-Line Stores - 908 122 1,030
Specialty Stores - 1,284 280 1,564
--- ----- --- -----
Total Stores 1,327 2,192 402 3,921
===== ===== === =====
Quarter Ended January 31, 2009
--------------------------------
millions, except store data Sears
----------------
Sears
Kmart Domestic Canada Holdings
------- -------- ------ --------
Merchandise sales and services $4,949 $7,021 $1,310 $13,280
------ ------ ------ -------
Cost of sales, buying and occupancy 3,736 4,994 897 9,627
Gross margin dollars 1,213 2,027 413 3,653
Gross margin rate 24.5% 28.9% 31.5% 27.5%
Selling and administrative 909 1,638 273 2,820
Selling and administrative expense
as a percentage of total revenues 18.4% 23.3% 20.8% 21.2%
Depreciation and amortization 37 174 25 236
Impairment charges 1 283 - 284
Gain on sales of assets (8) (4) - (12)
--- --- --- ---
Total costs and expenses 4,675 7,085 1,195 12,955
----- ----- ----- ------
Operating income (loss) $274 $(64) $115 $325
==== ==== ==== ====
Number of:
Kmart Stores 1,368 - - 1,368
Full-Line Stores - 929 122 1,051
Specialty Stores - 1,233 266 1,499
--- ----- --- -----
Total Stores 1,368 2,162 388 3,918
===== ===== === =====
Fiscal Year Ended January 30, 2010
------------------------------------
millions, except store data Sears
----------------
Sears
Kmart Domestic Canada Holdings
------- -------- ------ --------
Merchandise sales and services $15,743 $23,672 $4,628 $44,043
------- ------- ------ -------
Cost of sales, buying and occupancy 12,038 16,653 3,133 31,824
Gross margin dollars 3,705 7,019 1,495 12,219
Gross margin rate 23.5% 29.7% 32.3% 27.7%
Selling and administrative 3,386 6,220 1,048 10,654
Selling and administrative expense
as a percentage of total revenues 21.5% 26.3% 22.6% 24.2%
Depreciation and amortization 152 672 102 926
Gain on sales of assets (23) (6) (45) (74)
--- --- --- ---
Total costs and expenses 15,553 23,539 4,238 43,330
------ ------ ----- ------
Operating income $190 $133 $390 $713
==== ==== ==== ====
Number of:
Kmart Stores 1,327 - - 1,327
Full-Line Stores - 908 122 1,030
Specialty Stores - 1,284 280 1,564
--- ----- --- -----
Total Stores 1,327 2,192 402 3,921
===== ===== === =====
Fiscal Year Ended January 31, 2009
------------------------------------
millions, except store data Sears
----------------
Sears
Kmart Domestic Canada Holdings
------- -------- ------ --------
Merchandise sales and services $16,219 $25,315 $5,236 $46,770
------- ------- ------ -------
Cost of sales, buying and occupancy 12,442 18,084 3,592 34,118
Gross margin dollars 3,777 7,231 1,644 12,652
Gross margin rate 23.3% 28.6% 31.4% 27.1%
Selling and administrative 3,456 6,415 1,189 11,060
Selling and administrative expense
as a percentage of total revenues 21.3% 25.3% 22.7% 23.6%
Depreciation and amortization 138 724 119 981
Impairment charges 21 339 - 360
Gain on sales of assets (10) (10) (31) (51)
--- --- --- ---
Total costs and expenses 16,047 25,552 4,869 46,468
------ ------ ----- ------
Operating income (loss) $172 $(237) $367 $302
==== ===== ==== ====
Number of:
Kmart Stores 1,368 - - 1,368
Full-Line Stores - 929 122 1,051
Specialty Stores - 1,233 266 1,499
--- ----- --- -----
Total Stores 1,368 2,162 388 3,918
===== ===== === =====
Sears Holdings Corporation
Adjusted EBITDA
Amounts are Preliminary and Subject to Change
Quarters Ended
--------------
millions January 30, 2010
--------------------
Sears Sears Sears
Kmart Domestic Canada Holdings
----- -------- ------ --------
Operating income per
statement of operations $296 $279 $174 $749
Plus depreciation and
amortization 43 177 28 248
Less gain on sales of assets (4) - - (4)
--- --- --- ---
Before excluded items 335 456 202 993
Closed store reserve and
severance 23 8 - 31
Domestic pension expense - 42 - 42
Visa/MasterCard settlement (17) (15) (32)
--- --- --- ---
Adjusted EBITDA as defined $341 $491 $202 $1,034
==== ==== ==== ======
% to revenues 6.9% 7.1% 14.1% 7.8%
Quarters Ended
--------------
millions January 31, 2009
--------------------
Sears Sears Sears
Kmart Domestic Canada Holdings
----- -------- ------ --------
Operating income (loss) per
statement of operations $274 $(64) $115 $325
Plus depreciation and
amortization 37 174 25 236
Less gain on sales of assets (8) (4) - (12)
--- --- --- ---
Before excluded items 303 106 140 549
Closed store reserve and
severance 17 35 - 52
Goodwill and asset impairment 1 283 - 284
--- --- --- ---
Adjusted EBITDA as defined $321 $424 $140 $885
==== ==== ==== ====
% to revenues 6.5% 6.0% 10.7% 6.7%
Fiscal Years Ended
------------------
millions January 30, 2010
----------------
Sears Sears Sears
Kmart Domestic Canada Holdings
----- -------- ------ --------
Operating income per
statement of operations $190 $133 $390 $713
Plus depreciation and
amortization 152 672 102 926
Less gain on sales of assets (23) (6) (45) (74)
--- --- --- ---
Before excluded items 319 799 447 1,565
Closed store reserve and
severance 62 49 8 119
Domestic pension expense - 170 - 170
Visa/MasterCard settlement (17) (15) (32)
--- --- --- ---
Adjusted EBITDA as defined $364 $1,003 $455 $1,822
==== ====== ==== ======
% to revenues 2.3% 4.2% 9.8% 4.1%
Fiscal Years Ended
------------------
millions January 31, 2009
----------------
Sears Sears Sears
Kmart Domestic Canada Holdings
----- -------- ------ --------
Operating income (loss) per
statement of operations $172 $(237) $367 $302
Plus depreciation and
amortization 138 724 119 981
Less gain on sales of assets (10) (10) (31) (51)
--- --- --- ---
Before excluded items 300 477 455 1,232
Closed store reserve and
severance 28 49 - 77
Legal settlement - (62) - (62)
Goodwill and asset impairments 21 339 - 360
--- --- --- ---
Adjusted EBITDA as defined $349 $803 $455 $1,607
==== ==== ==== ======
% to revenues 2.2% 3.2% 8.7% 3.4%
Sears Holdings Corporation
Significant Item Impact
Amounts are Preliminary and Subject to Change
Quarter ended January 30, 2010
------------------------------
Domestic Mark-to- Closed Store
millions, except Pension Market Reserve and
per share data GAAP Expense Gains Severance
---- --------- -------- ------------
Cost of sales,
buying and
occupancy impact $9,467 $- $- $(16)
Selling and
administrative
impact 2,787 (42) - (15)
Depreciation and
amortization impact 248 - - (12)
Operating income
impact 749 42 - 43
Other loss impact (9) - (1) -
Income tax expense
impact (217) (13) - (13)
After tax and
noncontrolling
interest impact 430 29 (1) 30
Diluted income per
share impact $3.74 $0.25 $(0.01) (1) $0.26 (1)
Quarter ended January 30, 2010
------------------------------
Visa/
millions, except MasterCard Tax As
per share data Settlement Matters Adjusted
----------- ------- --------
Cost of sales,
buying and
occupancy impact $- $- $9,451
Selling and
administrative
impact 32 - 2,762
Depreciation and
amortization impact - - 236
Operating income
impact (32) - 802
Other loss impact - - (10)
Income tax expense
impact 10 (41) (274)
After tax and
noncontrolling
interest impact (22) (41) 425
Diluted income per
share impact $(0.19) $(0.36) $3.69
Quarter ended January 31, 2009
------------------------------
Mark-to- Closed Store
millions, except Market Reserve and
per share data GAAP Impairments Gains Severance
---- ----------- -------- ------------
Cost of sales,
buying and
occupancy impact $9,627 $- $- $(26)
Selling and
administrative
impact 2,820 - - (26)
Impairment charges
impact 284 (284) - -
Operating income
impact 325 284 - 52
Interest expense
impact (70) - - -
Other income impact 30 - (9) -
Income tax expense
impact (130) (77) 3 (20)
Noncontrolling
interest impact 29 (52) 2 -
After tax and
noncontrolling
interest impact 190 155 (4) 32
Diluted income per
share impact $1.55 $1.27 $(0.03) $0.26
Quarter ended January 31, 2009
------------------------------
Repurchase
millions, except of Debt Tax As
per share data Securities Matters Adjusted
----------- ------- --------
Cost of sales,
buying and
occupancy impact $- $- $9,601
Selling and
administrative
impact - - 2,794
Impairment charges
impact - - -
Operating income
impact - - 661
Interest expense
impact (9) - (79)
Other income impact - - 21
Income tax expense
impact 4 (8) (228)
Noncontrolling
interest impact - - (21)
After tax and
noncontrolling
interest impact (5) (8) 360
Diluted income per
share impact $(0.04) $(0.07) $2.94
Year ended January 30, 2010
---------------------------
Domestic Mark-to- Closed Store
millions, except Pension Market Reserve and
per share data GAAP Expense Gains Severance
---- --------- -------- ------------
Cost of sales,
buying and
occupancy impact $31,824 $- $- $(37)
Selling and
administrative
impact 10,654 (170) - (82)
Depreciation and
amortization impact 926 - - (12)
Gain on sales of
assets impact (74) - - -
Operating income
impact 713 170 - 131
Other loss impact (61) - 33 -
Income tax expense
impact (123) (50) (8) (38)
Noncontrolling
interest impact (62) - (9) (3)
After tax and
noncontrolling
interest impact 235 120 16 90
Diluted income per
share impact $1.99 $1.02 $0.14 $0.77
Year ended January 30, 2010
---------------------------
Gain on Sale
of Sears Visa/
millions, except Canada MasterCard Tax As
per share data Headquarters Settlement Matters Adjusted
------------ ----------- ------- --------
Cost of sales,
buying and
occupancy impact $- $- $- $31,787
Selling and
administrative
impact - 32 - 10,434
Depreciation and
amortization impact - - - 914
Gain on sales of
assets impact 44 - - (30)
Operating income
impact (44) (32) - 938
Other loss impact - - - (28)
Income tax expense
impact 10 10 (41) (240)
Noncontrolling
interest impact 12 - - (62)
After tax and
noncontrolling
interest impact (22) (22) (41) 376
Diluted income per
share impact $(0.19) $(0.19) $(0.35) $3.19
Year ended January 31, 2009
---------------------------
Mark-to- Closed Store
millions, except Market Reserve and
per share data GAAP Impairments Gains Severance
---- ----------- -------- - -----------
Cost of sales,
buying and
occupancy impact $34,118 $- $- $(36)
Selling and
administrative
impact 11,060 - - (41)
Impairment charges
impact 360 (360) - -
Gain on sales of
assets impact (51) - - -
Operating income
impact 302 360 - 77
Interest expense
impact (272) - - -
Other income impact 108 - (81) -
Income tax expense
impact (85) (107) 26 (30)
Noncontrolling
interest impact (46) (52) 22 -
After tax and
noncontrolling
interest impact 53 201 (33) 47
Diluted income per
share impact $0.42 $1.57 $(0.26) $0.37
Year ended January 31, 2009
---------------------------
Repurchase
millions, except Legal of Debt Tax As
per share data Settlement Securities Matters Adjusted
---------- ----------- ------- --------
Cost of sales,
buying and
occupancy impact $- $- $- $34,082
Selling and
administrative
impact 62 - - 11,081
Impairment charges
impact - - - -
Gain on sales of
assets impact - - - (51)
Operating income
impact (62) - - 677
Interest expense
impact - (13) - (285)
Other income impact - - - 27
Income tax expense
impact 25 5 (8) (174)
Noncontrolling
interest impact - - - (76)
After tax and
noncontrolling
interest impact (37) (8) (8) 215
Diluted income per
share impact $(0.29) $(0.06) $(0.06) $1.69
(1) In our January 7, 2010 press release, we provided an expected range of
net income attributable to Holdings' shareholders for the fourth quarter
ending January 30, 2010 to be between $385 million and $465 million, or
between $3.36 and $4.06 per diluted share. Those net income and earnings
per share ranges excluded the impact related to store closings and
impairment charges, restructuring activities including severance, and
mark-to-market gains and losses on hedge transactions executed by Sears
Canada as those amounts were not available at that time. On a comparable
basis with the outlook provided, our fourth quarter net income was $459
million, or $3.99 per diluted share determined as follows:
Net Income
(in millions) EPS
------------- -----
Results per Consolidated Statement of Income $430 $3.74
Closed store reserve and severance 30 0.26
Mark-to-market gains (1) (0.01)
--- -----
Results on comparable basis with outlook provided $459 $3.99
==== =====
SOURCE Sears Holdings Corporation
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