GameStop Corp. (NYSE: GME) (the “Company”) today filed its
definitive proxy statement and issued a letter to stockholders
highlighting the successful results generated by its strategy of
effective execution and thoughtful capital allocation, as well as
the guidance of its comprehensively refreshed, independent Board of
Directors (the “Board”). This recently refreshed Board already
includes two directors proposed pursuant to the previous
cooperative agreement reached with Hestia Capital Partners, LP and
Permit Capital Enterprise Fund, LP (“Hestia Capital” and “Permit
Capital,” or collectively, “Hestia and Permit”). The letter urges
stockholders to use the
BLUE proxy card to vote
“
FOR ALL” of GameStop’s 10 highly qualified
director nominees in connection with the Company’s upcoming Annual
Meeting of Stockholders (the “Annual Meeting”) to be held at 8:00
a.m. CT on June 12, 2020.
- This proxy fight is unwarranted, as our Board has always
prioritized directly soliciting stockholder feedback and has
engaged constructively with Hestia and Permit – just last year, the
Board added two directors under a cooperation agreement we reached
with them to avoid a costly and distracting proxy battle
- GameStop is executing on its Reboot Strategy and the Company’s
prudent capital allocation has protected and enhanced stockholder
value in these unprecedented times of market volatility
- We have recently refreshed our Board, adding an additional
three new independent directors and comprehensively enhancing the
Company’s corporate governance structure
- Hestia and Permit have nominated two candidates whose skillsets
lack necessary expertise and who only represent the self-motivated
interests of Hestia and Permit, which are misaligned with the
long-term interests of other GameStop stockholders and prevent the
necessary knowledge transfer identified as a priority in our
discussions with our FULL stockholder network.
The full text of the letter from Kathy Vrabeck, the Lead
Independent Director to the Company’s stockholders follows:
Dear GameStop Stockholders,
Thank you for your investment in our Company. You are being
asked to make a critical decision at the Company’s 2020 Annual
Meeting of Stockholders scheduled for June 12, 2020 (the “Annual
Meeting”). Hestia Capital Partners, LP and Permit Capital
Enterprise Fund, LP (“Hestia Capital” and “Permit Capital,” or
collectively, “Hestia and Permit”) are running a costly and
distracting proxy fight in an attempt to remove your independent
and highly qualified directors. Your Board urges you to discard any
White proxy card you may receive from Hestia and Permit and to use
the BLUE proxy card to vote “FOR
ALL” of GameStop’s 10 director nominees.
This proxy fight is unwarranted and ill-timed,
as your Board has prioritized directly soliciting feedback from all
of its stockholders and, in particular, has engaged constructively
with Hestia and Permit. In April 2019, your Board added two new
directors as a result of a cooperation agreement we reached with
Hestia and Permit in order to avoid such a costly and distracting
proxy battle. Still more recently, on March 9, 2020, we
appointed an additional three new independent directors to your
Board after engaging with numerous stockholders, including Hestia
and Permit, to solicit input into the process to identify and name
these new directors this year.
Despite these thoughtful and extensive efforts to proactively
and comprehensively refresh your Board to support GameStop’s
turnaround strategy while ensuring Board representation for
stockholders, Hestia and Permit have refused to constructively
engage with us, and instead decided to pursue a damaging and
unnecessary proxy fight. Hestia and Permit have nominated two of
their own candidates, whose skillsets not only lack the expertise
that your Nominating and Corporate Governance Committee seeks in
new directors, but whose only claim to adding value is as a
“stockholder voice” on the board. These candidates thus only
represent Hestia and Permit’s self-motivated interests, which have
been and continue to be misaligned with the long-term interests of
other GameStop stockholders.
All evidence points to the conclusion that Hestia and Permit’s
fight is poorly framed and ill-timed, and could directly result in
stockholder value destruction.
To ensure the Company’s forward momentum continues
uninterrupted, we encourage you to elect ALL of the GameStop’s
Board nominees by voting on the enclosed BLUE proxy
card.
Executing on the GameStop
Reboot Strategy
Despite the near-term challenges presented by the COVID-19
pandemic, your Board and management team remain vigilant in
executing our multi-year transformation initiative – GameStop
Reboot – which we announced in September 2019 to fully capitalize
on our strong market position in gaming and deliver long-term
profitable growth for our stockholders. This initiative is centered
around the four tenets outlined below. GameStop management team’s
execution on these strategic priorities, and your Board’s oversight
of the strategy, have already yielded significant positive results,
none more evident than the progress made on inventory and payables
reduction, and the critical impact this has made as we navigate the
challenges of COVID-19.
The four pillars of the GameStop Reboot plan are (i)
Optimize the Core Business, (ii) Become
the Social / Cultural Hub for Gaming, (iii) Build
a Frictionless Digital Ecosystem, and (iv)
Transform Vendor Partnerships. The following
describes these four tenets of the GameStop Reboot plan and the
Company’s respective achievements towards executing each component
since announcing the strategy in September 2019:
Optimize the Core Business: Optimize the core
business by improving efficiency and effectiveness across the
organization, including cost restructuring, inventory management
optimization, adding and growing high margin product categories and
rationalizing the global store base.
- Delivered selling, general and administrative expense
(“SG&A”) reduction of $130.4 million, on an adjusted basis, for
the year;*
- Decreased inventory by 31% - helping to drive a 160 basis point
gross margin expansion - and reduced Accounts Payable and Other
Liabilities by 64%, all compared to fiscal year 2018, leading to
significant improvement in working capital and overall balance
sheet strength; and
- Launched and executed an optimization plan for the global store
base, de-densifying locations and delivering accretive profit
transfer, and began the wind-down of underperforming operations in
Denmark, Finland, Norway and Sweden.
Become the Social / Cultural Hub for Gaming:
Embed the social and cultural hub of gaming across the GameStop
platform by testing and improving existing core assets, including
the store experience, knowledgeable associates and the PowerUp
Rewards loyalty program.
- Successfully implemented and tested an experiential products
lab in the Tulsa market; and
- Enhanced the PowerUp loyalty program with new features, leading
to a 280 basis point improvement in the conversion rate of
transactions (including PowerUp enrollment).
Build a Frictionless Digital Ecosystem: Build
compelling digital capabilities – including the recent relaunch of
GameStop.com – to reach customers more broadly across the
omnichannel platform and give them the full spectrum of content and
access to products they desire.
- Provided access to the best digital content and products
through the launch of an improved website and the expansion of
omnichannel features such as “Buy Online, Pick Up In Store,” which
directly enabled significant sales plan recapture in U.S. stores
that remained open for curbside pick-up during the COVID-19
pandemic; and
- Appointed a Chief Digital Officer to further advance digital
transformation activities.
Transform Vendor Partnerships: Transform our
vendor and partner relationships to unlock additional high-margin
revenue streams and optimize the lifetime value of every
customer.
- Expanded product penetration in PC gaming and private label
product categories;
- Optimized supply chain and vendor base to leverage scale and
new categories; and
- Began testing and advancing digital revenue sharing with key
partners.
*See below for definitions of non-GAAP financial measures used
in this letter, including adjusted SG&A, reconciliations of
these non-GAAP financial measures to their most directly comparable
GAAP financial measure, and information about how our management
team uses such non-GAAP measures and why our management believes
such non-GAAP financial measures provide useful information to
investors.
In a short time, the Board and management team have made
significant progress in executing this business transformation
strategy.
Delivering Results to
Stockholders
The Board and management team’s execution of our strategic plan
is beginning to deliver tangible and material results to support
the long-term success of the business and improve operational
performance. The Company expects the continued execution of the
GameStop Reboot plan will continue to deliver long-term value to
stockholders. Fiscal year 2019 operational highlights include:
- Generated $62.3 million in adjusted operating income* while
exiting the year with approximately $500 million in cash, despite a
challenging sales environment.
- Significantly improved capital structure, deploying proceeds
from the sale of non-core business units to reduce debt by $401
million and repurchase 38.1 million shares for $199 million,
leveraging the Company’s market position as the pure-play,
omnichannel leader in gaming.
- Optimized operations by improving inventory, with a 31%
reduction at year-end; implemented initiatives to accelerate
GameStop’s transformation, including enhancing digital, online, and
experiential retail and improving its loyalty program; and
continued to de-densify the store base.
- Began fiscal 2020 with increased financial flexibility and a
continued focus on key priorities to optimize, stabilize and
transform GameStop to achieve sustainable and profitable long-term
growth.
- Completed the fiscal nine-week period ended April 4, 2020,
improving total cash and liquidity to $772 million, including cash
and available borrowings under the Company’s revolving line of
credit.
- Despite having closed our U.S. stores to the public on March
22nd due to the COVID-19 pandemic, have retained over 90%** of our
planned sales volumes in the stores that are conducting curbside
operations only, testifying to the strength of our enhanced
omnichannel capabilities implemented as a part of our GameStop
Reboot launched last fall.
*See below for definitions of non-GAAP financial measures used
in this letter, including adjusted operating income,
reconciliations of these non-GAAP financial measures to their most
directly comparable GAAP financial measure, and information about
how our management team uses such non-GAAP measures and why our
management believes such non-GAAP financial measures provide useful
information to investors.
**All references to sales within this letter are calculated
based on the Company’s internal data, which the Company uses to
estimate revenue performance on a daily or weekly interval. Sales
growth percentages represent the amount of absolute sales recovered
relative the Company’s planned sales volumes during this period.
The sales percentages in this letter are estimated, unaudited and
subject to the closing of the fiscal quarter ending May 2, 2020 and
to quarter-end financial and accounting procedures that have yet to
be performed.
Despite the significant results delivered so far, Hestia and
Permit have recklessly chosen to run an unwarranted,
costly and distracting proxy fight that,
rather than improve the Company’s long-term prospects, will only
distract the Company from its continued excellent execution of its
strategic plan. Further, Hestia and Permit’s fight is poorly framed
and ill-timed, testifying to the continued bad judgment of these
two stockholders, which could directly result in stockholder value
destruction.
Hestia and Permit’s unwarranted and costly proxy fight
risks GameStop’s ability to continue to deliver quantifiable,
progressive results to stockholders and presents real obstacles to
stockholder value creation.
GameStop’s Prudent Capital
Allocation Strategy vs. Hestia and Permit’s Short-Term Financial
Engineering
Following the Company’s February 2019 sale of Spring Mobile,
Hestia Capital sent a letter to your Board, recommending a
short-term strategy of using virtually all of the proceeds to buy
back stock. In the letter, Hestia Capital stated, “the Board should
immediately pursue a tender offer of between $500M and $700M, and
continue to buy back as much as $100M in stock per year.”
Had GameStop assented to Hestia Capital’s irrationally
aggressive call to buy back $700 million of its shares in 2019, the
recent market volatility would have placed the Company and the
balance sheet in a precarious and unsustainable position. Rather
than pursue this ill-advised short-term financial engineering
tactic, your Board took a balanced and long-term approach to
GameStop’s capital allocation, returning excess capital to
stockholders as appropriate, managing judicious debt levels, and
strengthening our balance sheet to continue to provide for the
business’ successful transformation as we look toward the pivotal
launch of the next generation of video game consoles later in 2020.
Our actions have included:
- A Dutch auction tender offer and a series of open market
purchases totaling approximately 38.1 million shares, at a weighted
average cost of $5.21 per share, totaling a return of approximately
$200 million to stockholders throughout 2019
- Redemption of the Company’s $350 million unsecured bonds in
early 2019
- Reduction of its current outstanding unsecured debt by $51.8
million, bringing the 2019 fiscal year reduction in debt to just
over $400 million.
Our capital allocation strategy has directly translated to
GameStop’s present capacity to weather this unprecedented market
disruption caused by the COVID-19 pandemic, serving our customers
with progressively innovative capabilities as they adjust to
increased time at home. Hestia and Permit’s approach would have
proved ruinous and catastrophic for the Company and all of its
stockholders.
In contrast, with our prescient capital allocation strategy, we
have increased GameStop’s financial flexibility and strengthened
our balance sheet, building sufficient cash and liquidity to
navigate the COVID-19 pandemic and emerge as a strong and vibrant
company.
Hestia and Permit’s short-sighted buyback demand demonstrates
their lack of operational skills, insights and understanding of
what it takes to operate a global business that supports the
long-term interests of all GameStop stockholders. Protecting and
enhancing sustainable stockholder value requires more than myopic
short-term financial engineering – it requires the foresight and
adept understanding of all aspects of operational and financial
execution, as well as a strong sense of business ethics and
fiduciary duty to stockholders, that GameStop’s Board and new
management team possess and continue to deliver.
GameStop’s Proactive Board
Refreshment and Management Succession
Hestia and Permit have commenced this proxy fight despite the
Company’s effective execution of its strategic plan and capital
allocation and its prior efforts to collaborate constructively with
them. In April 2019, the Company appointed Lizabeth Dunn and Raul
Fernandez as part of a settlement with Hestia and Permit. Yet Ms.
Dunn, a Board member nominated by Hestia and Permit last year, has
refused to join Hestia and Permit’s slate, but has elected instead
to join with and support your Board’s nominees named on the
BLUE proxy card.
This year, after a thoughtful, comprehensive and professionally
conducted search and assessment process, we announced the next
phase of proactive Board refreshment process with the appointment
on March 9, 2020 of three new independent directors: Reginald
“Reggie” Fils-Aimé, William “Bill” Simon and James “J.K.” Symancyk.
The appointments of Messrs. Fils-Aimé, Simon and Symancyk to the
GameStop Board resulted from a comprehensive process led by the
Board that involved numerous inquiries with stockholders to
understand their interests and objectives. The Nominating and
Corporate Governance Committee capitalized on the insights
generated by this process, deliberately seeking, through an
extensive search, the skillsets necessary to further complement
GameStop’s transformation strategy. These new directors
collectively bring retail, gaming, turnaround, digital and
omnichannel expertise, as represented in their distinguished
careers – exactly the skillsets required to help your Board oversee
GameStop’s transformation strategy.
Following the 2020 Annual Meeting, your Board will be comprised
of ten directors:
- 9 out of 10 directors will be independent
- 7 out of 10 directors will have Board tenures of 2 years of
less
We heard directly from our stockholders that they would
appreciate a thorough onboarding and transfer of institutional
knowledge from the longer-tenured directors to our new directors.
Two current directors, Jerome Davis and Tom Kelly, have decided to
retire from the Board in June 2021 to ensure comprehensive and
smooth onboarding, knowledge transfer, and transition for the
recently appointed directors amidst a great amount of change to the
Board. Yet Hestia and Permit are directly targeting Messrs. Davis
and Kelly at the Annual Meeting. Not only do Hestia and Permit
nominees lack the experience or skillsets to support GameStop’s
corporate strategy, their election and displacement of Messrs.
Davis and Kelly would deprive the Board of these directors’
institutional knowledge, which our stockholders have told us is
vitally important to transfer to our new directors.
In addition to adding new talent and necessary expertise, your
Board oversaw a comprehensive and rigorous management succession
plan and refreshed GameStop’s executive team in 2019 with the
following appointments:
- George Sherman, Chief Executive Officer
- Jim Bell, Chief Financial Officer
- Chris Homeister, Chief Merchandising Officer
- Frank Hamlin, Chief Customer Officer
GameStop’s fresh and reinvigorated leadership team brings
together a strong group of individuals with complementary
experiences, broad and deep industry and operational expertise and
proven records of successful execution. As demonstrated in a short
period since their appointments, your new management team has
delivered the positive operational results discussed above,
including material improvement in working capital and balance sheet
management. These accomplishments have provided the cash and
liquidity sufficient, we believe, to enable us to navigate the
COVID-19 related challenges successfully.
Conclusion
Over the last two years, GameStop has attempted to cooperate and
engage productively with Hestia and Permit, demonstrating its
willingness to enhance its Board through five additional
appointments, appointing an entirely new management team within the
last year, and electing the activist group’s proposed and approved
candidates in 2019. Unfortunately, Hestia and Permit are now
pushing forward two additional candidates whose experience is
severely limited and whose election would deprive the Board of a
wealth of institutional knowledge and expertise.
Hestia and Permit have neither proposed a compelling alternative
turnaround strategy nor a plan to protect the long-term growth and
value of the Company, and their choice to proceed with this proxy
fight risks the Company’s ability to continue executing its
turnaround strategy. All GameStop stockholders should be skeptical
of the activist group’s self-interested aims, which appear
significantly misaligned with all other GameStop stockholders’
interests.
Your Board is committed to acting in the best interests of
ALL GameStop stockholders.
The Choice is Clear- Please
VOTE on the BLUE Proxy Card
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU
VOTE “FOR ALL” OF THE BOARD’S 10 NOMINEES USING THE ENCLOSED BLUE
PROXY CARD.
Vote your shares FOR ALL of the 10 director
nominees proposed by our Board, via the Internet or telephone or by
mail by promptly marking, signing and dating the enclosed
BLUE proxy card and returning it in the enclosed
postage-paid envelope.
Please do not return or otherwise vote any
White proxy card sent to you by Hestia Capital and Permit
Capital.
No matter how many or how few shares you own, your vote is
extremely important to ensuring that GameStop can carry out its
go-forward plan of creating near-term value and driving even higher
returns over the long-term for all of our stockholders. Please act
today and make your voice heard regarding the future of the
Company.
We believe that GameStop’s highly qualified and experienced
Board of Directors is best-positioned to oversee the continued
successful execution of GameStop’s Reboot plan and deliver
substantial value to all of our stockholders. On behalf of the
Board of Directors and our management team, thank you for your
continued support, interest and investment in GameStop.
Sincerely,
Kathy Vrabeck, Lead Independent Director
Media Contact:
Phil Denning, ICR Inc. (646) 677-1258Phil.Denning@icrinc.com
Investor Contact:
GameStop Corp. Investor Relations (817) 424-2001
investorrelations@gamestop.com
If you have questions about how to vote your shares or need
additional copies of the proxy materials, please call the firm
assisting us with the solicitation of proxies:INNISFREE
M&A INCORPORATEDStockholders may call:1(877)
750-9501 (toll-free from the U.S. and Canada),
or+1(412) 232-3651 (from other
countries)IMPORTANT NOTE: Please simply discard any White
proxy cards sent to you by Hestia Capital Partners LP. If you have
already voted using a White proxy card, you can change your vote by
using the enclosed BLUE proxy card to vote by
telephone, Internet or by mail.Only your latest-dated vote will
count. |
About GameStop
GameStop Corp., a Fortune 500 company headquartered in
Grapevine, Texas, is the world’s largest video game retailer,
operates approximately 5,500 stores across 14 countries, and offers
the best selection of new and pre-owned video gaming consoles,
accessories and video game titles, in both physical and digital
formats. GameStop also offers fans a wide variety of POP!
vinyl figures, collectibles, board games and more. Through
GameStop’s unique buy-sell-trade program, gamers can trade in video
game consoles, games, and accessories, as well as consumer
electronics for cash or in-store credit. The company's
consumer product network also includes www.gamestop.com and Game
Informer® magazine, the world's leading print and digital video
game publication. General information about GameStop Corp. can be
obtained at the Company’s corporate website. Follow @GameStop and
@GameStopCorp on Twitter and find GameStop on Facebook at
www.facebook.com/GameStop.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are based upon management’s current beliefs,
views, estimates and expectations, including as to the Company’s
industry, business strategy, goals and expectations concerning its
market position, future operations, margins, profitability, capital
expenditures, liquidity and capital resources and other financial
and operating information, including expectations as to future
operating profit improvement. Such statements include without
limitation those about the Company’s expectations for fiscal 2020,
future financial and operating results, projections, expectations
and other statements that are not historical facts. All statements
regarding targeted and expected benefits of our transformation, the
GameStop Reboot plan, capital allocation, profit improvement and
cost-savings initiatives, and expected fiscal 2020 results, are
forward-looking statements. Forward-looking statements are
subject to significant risks and uncertainties and actual
developments, business decisions and results may differ materially
from those reflected or described in the forward-looking
statements. The following factors, among others, could cause
actual results to differ materially from those reflected or
described in the forward-looking statements: the uncertain impact,
effects and results of pursuit of operating, strategic, financial
and structural initiatives, including the GameStop Reboot strategic
plan; volatility in capital and credit markets, including changes
that reduce availability, and increase costs, of capital and
credit; the impact of the COVID-19 outbreak on capital markets and
our business; our inability to obtain sufficient quantities of
product to meet consumer demand, including due to supply chain
disruptions on account of trade restrictions, political
instability, COVID-19, labor disturbances and product recalls; the
timing of release and consumer demand for new and pre-owned
products; our ability to continue to expand, and successfully open
and operate new stores for our collectibles business; risks
associated with achievement of anticipated financial and operating
results from acquisitions; our ability to sustain and grow our
console digital video game sales; our ability to establish and
profitably maintain the appropriate mix of digital and physical
presence in the markets we serve; our ability to assess and
implement technologies in support of our omnichannel capabilities;
the impact of goodwill and intangible asset impairments; cost
reduction initiatives, including store closing costs; risks related
to changes in, and our continued retention of, executives and other
key personnel and our ability to attract and retain qualified
employees in all areas of the organization; changes in consumer
preferences and economic conditions; increased operating costs,
including wages; disruptions to our information technology systems
including but not limited to security breaches of systems
protecting consumer and employee information or other types of
cybercrimes or cybersecurity attacks; risks associated with
international operations; increased competition and changing
technology in the video game industry; changes in domestic or
foreign laws and regulations that reduce consumer demand for, or
increase prices of, our products or otherwise adversely affect our
business; our effective tax rate and the factors affecting our
effective tax rate, including changes in international, federal or
state tax, trade and other laws and regulations; the costs and
outcomes of legal proceedings and tax audits; our use of proceeds
from the sale of our Spring Mobile business; and unexpected changes
in the assumptions underlying our outlook for fiscal 2020.
Additional factors that could cause our results to differ
materially from those reflected or described in the forward-looking
statements can be found in GameStop's Annual Report on Form 10-K
for the fiscal year ended February 1, 2020 (the “10-K”) filed with
the SEC and available at the SEC's Internet site at
http://www.sec.gov or http://investor.GameStop.com. Forward-looking
statements contained in this press release speak only as of the
date of this release. The Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by any applicable securities laws.
Additional Information
On April 28, 2020, the Company filed a definitive proxy
statement on Schedule 14A and form of associated
BLUE proxy card with the SEC in connection with
its solicitation of proxies for its 2020 Annual Meeting of
Stockholders (the “Annual Meeting”). The definitive proxy statement
is also being mailed to the Company’s stockholders beginning on or
about April 28, 2020. INVESTORS AND SECURITY HOLDERS
OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ACCOMPANYING
BLUE PROXY CARD AS THEY CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain free copies of the proxy
statement (including any amendments or supplements thereto) and
other documents filed with the SEC through the website maintained
by the SEC at www.sec.gov. Copies will also be available at no
charge in the “Investor Relations” section of the Company’s
website, http://news.gamestop.com/home.
Participants in the Solicitation
The directors, executive officers and certain other members of
management and employees of the Company may be deemed
“participants” in the solicitation of proxies from stockholders in
connection with the matters to be considered at the Annual Meeting.
Information regarding the persons who may, under the rules of the
SEC, be considered participants in the solicitation of the
Company’s stockholders in connection with the Annual Meeting can be
found in the definitive proxy statement filed on April 28, 2020 and
the 10-K, each of which is available at the SEC's Internet site at
http://www.sec.gov or http://investor.GameStop.com.
Non-GAAP Reconciliation
As a supplement to our financial results presented in accordance
with U.S. generally accepted accounting principles (GAAP), we may
use certain non-GAAP measures, such as adjusted selling, general
and administrative expenses (“SG&A”) and adjusted operating
income. We believe these non-GAAP financial measures provide useful
information to investors in evaluating our core operating
performance. The following table reconciles the Company’s adjusted
SG&A and adjusted operating income to its nearest GAAP measure
(in millions):
|
|
|
|
Fiscal Year |
|
|
|
2019 |
|
|
|
|
2018 |
|
|
|
|
|
Adjusted SG&A |
|
|
|
|
|
|
|
|
|
|
SG&A |
|
$ |
1,922.7 |
|
|
|
|
$ |
1,994.2 |
|
Transformation costs |
|
|
(37.9 |
) |
|
|
|
|
— |
|
Business divestitures |
|
|
(10.8 |
) |
|
|
|
|
— |
|
Severance and other |
|
|
(27.6 |
) |
|
|
|
|
(17.4 |
) |
Adjusted SG&A |
|
$ |
1,846.4 |
|
|
|
|
$ |
1,976.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income |
|
|
|
|
|
|
|
|
|
|
Operating earnings (loss) |
|
$ |
(399.6 |
) |
|
|
|
$ |
(702.0 |
) |
Transformation costs |
|
|
37.9 |
|
|
|
|
|
— |
|
Business divestitures |
|
|
10.8 |
|
|
|
|
|
— |
|
Goodwill impairments |
|
|
363.9 |
|
|
|
|
|
970.7 |
|
Property, equipment and other asset impairments |
|
|
19.4 |
|
|
|
|
|
2.1 |
|
Intangible impairments |
|
|
2.3 |
|
|
|
|
|
43.1 |
|
Severance and other |
|
|
27.6 |
|
|
|
|
|
17.4 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
|
$ |
62.3 |
|
|
|
|
$ |
331.3 |
|
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