Sears Issues Q3 Update; Amends Pension Plan Protection Agreement - Quick Facts

(RTTNews) - Sears Holdings Corp. (SHLD) announced the company expects third-quarter net loss attributable to shareholders to improve by approximately $190 million, while adjusted EBITDA is expected to improve by approximately $100 million (using the mid-point estimate), compared to the third quarter of 2016. Sears expects a net loss attributable to shareholders of between $595 million and $525 million in the third quarter of 2017.

Total revenues were approximately $3.7 billion during the third quarter of 2017, compared with $5.0 billion in the prior year quarter, with store closures contributing to over half of the decline. Total comparable store sales declined 15.3% during the quarter.

Sears Holdings also announced the company and the Pension Benefit Guaranty Corporation, or PBGC, have entered into an amendment to their March 2016 Pension Plan Protection and Forbearance Agreement. The amendment, which is expected to close in approximately three months, provides for the release of approximately 140 Sears properties from a ring-fence arrangement created under the PPPFA upon, and in exchange for, the payment of approximately $407 million into the Sears pension plans.

Sears expects to raise the $407 million through a sale of properties and/or financing secured by the properties, with such financing to be repaid from the proceeds of sales of the properties over the next two years. Sears is also required to make the approximately $37 million quarterly payment due to the pension plans in December 2017. Following the making of the $407 million contribution, Sears will be relieved of the obligation to make further contributions to the pension plans for approximately two years.