Sears Announces Intent To Appeal Texas Decision

Sears Holdings Corporation (NASDAQ: SHLD) today announced its intent to appeal a verdict reached by a state court jury in Dallas, Texas on February 2, 2007 that will require its subsidiary Sears Roebuck and Co. to pay a group of institutional bondholders approximately $73.5 million in a case relating to the 2004 redemption of certain bonds by Sears, Roebuck following the sale of its credit card business. The bondholder group includes J.P. Morgan Securities and subsidiaries of American International Group, Inc.

During the trial, the judge issued a directed verdict in Sears' favor on three of the four counts brought by the bondholder group challenging Sears' redemption of the bonds on various grounds. The judge rejected the bondholder group's claims that Sears made misrepresentations about the bonds in its public filings, that Sears was unjustly enriched by the redemption of the bonds and that Sears was estopped from redeeming the bonds.

The jury's verdict relates to the fourth count of the bondholder group's complaint -- that Sears' redemption of the bonds constituted a breach of contract.

The company continues to believe that it was fully entitled to redeem the bonds pursuant to the terms of the bond indenture and that summary judgment or a directed verdict should have been granted on this fourth count as well. The company will request that the trial court grant it judgment notwithstanding the verdict and, if necessary, will appeal the decision.

Sears will take a charge in the 4th quarter earnings to be released on or about March 1, 2007 relating to this decision. A pre-tax charge of $73.5 million (an amount that excludes interest that could be awarded) will reduce after tax earnings by approximately $44 million after tax or $0.29 per fully diluted share for the fourth quarter. This charge was not included in the guidance previously issued by Sears Holdings. This charge may be increased in the event interest or other amounts are awarded to the plaintiffs. Should the award be overturned or reduced, the amounts will be reversed into earnings at that time.

About Sears Holdings Corporation

Sears Holdings Corporation is the nation's third largest broadline retailer, with approximately $55 billion in annual revenues, and with approximately 3,800 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 Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. The company is 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 www.searsholdings.com.

SOURCE: Sears Holdings Corporation

CONTACT: Sears Holdings Public Relations, +1-847-286-8371

Web site: http://www.searsholdings.com/








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