Macy's, Inc. Estimate of 2008 Goodwill Impairment Charge is within Previously Announced Range
CINCINNATI, Mar 31, 2009 (BUSINESS WIRE) -- Macy's, Inc. (NYSE:M) today announced that it has recorded an estimated pre-tax goodwill impairment charge of approximately $5.4 billion ($5.1 billion after tax or $12.07 per diluted share) in 2008. This is within the range of $4.5 billion to $5.5 billion that Macy's, Inc. had previously reported (in its February 24 fourth quarter earnings news release) it expected to take as a result of a review of goodwill as of Jan. 31, 2009, including that recorded in connection with its August 2005 acquisition of The May Department Stores Company. The goodwill impairment estimate is subject to further adjustment in the first quarter of 2009.
The non-cash write-down of goodwill is expected to have no impact on the company's business, bank credit agreement or bond indentures. The primary causes for the goodwill impairments are the deterioration in the general economic environment and the resulting decline in the company's share price and market capitalization.
Giving effect to these charges, Macy's, Inc.'s operating loss for fiscal 2008 was $4.4 billion. The net loss for fiscal 2008 was $4.8 billion or $11.40 per diluted share.
A description of Macy's, Inc. goodwill impairment testing as of Jan. 31, 2009 and the related charges will be included in the company's Form 10-K to be filed with the Securities and Exchange Commission tomorrow (April 1, 2009).
Macy's, Inc., with corporate offices in Cincinnati and New York, is one of the nation's premier retailers, with fiscal 2008 sales of $24.9 billion. The company operates more than 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. The company also operates macys.com and bloomingdales.com. Prior to June 1, 2007, Macy's, Inc. was known as Federated Department Stores, Inc.
All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy's management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including conditions to, or changes in the timing of, proposed transactions, prevailing interest rates, changes in expected synergies, cost savings and non-recurring charges, competitive pressures from specialty stores, general merchandise stores, manufacturers' outlets, off-price and discount stores, new and established forms of home shopping (including the Internet, mail-order catalogs and television) and general consumer spending levels, including the impact of the availability and level of consumer debt, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission.
(NOTE: Additional information on Macy's, Inc., including past news releases, is available at www.macysinc.com/pressroom).
SOURCE: Macy's, Inc.
Media - Jim Sluzewski, 513-579-7764
Investor - Susan Robinson, 513-579-7780
Released March 31, 2009