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

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%

First Call Analyst:
FCMN Contact: kfreely@searshc.com

SOURCE: Sears Holdings Corporation

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

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








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