HD Supply 10-Q 6 Jun 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Apr. 30, 2017	Jun. 02, 2017
Document and Entity Information
Entity Registrant Name	HD Supply Holdings, Inc.
Entity Central Index Key	1,573,097
Document Type	10-Q
Document Period End Date	Apr. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--01-28
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		202,659,525
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (HD Supply Holdings, Inc.) - USD ($) shares in Thousands, $ in Millions		3 Months Ended
		Apr. 30, 2017	May 01, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales		$ 1,873	$ 1,781
Cost of sales		1,242	1,172
Gross Profit		631	609
Operating expenses:
Selling, general and administrative		431	401
Depreciation and amortization		24	23
Restructuring			7
Total operating expenses		455	431
Operating Income		176	178
Interest expense		49	85
Loss on extinguishment of debt		3	115
Other (Income) expense, net		2
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes		122	(22)
Provision (benefit) for income taxes		37	(8)
Income (Loss) from Continuing Operations		85	(14)
Net Income (Loss)		85	(14)
Other comprehensive income (loss)- foreign currency translation adjustment		1	4
Total Comprehensive Income (Loss)		$ 86	$ (10)
Weighted Average Common Shares Outstanding (thousands)
Basic (in shares)		200,708	198,808
Diluted (in shares)		203,017	198,808
Basic Earnings Per Share:
Income (Loss) from Continuing Operations (in dollars per share)	[1]	$ 0.42	$ (0.07)
Net Income (Loss) (in dollars per share)	[1]	0.42	(0.07)
Diluted Earnings Per Share:
Income (Loss) from Continuing Operations (in dollars per share)	[1]	0.42	(0.07)
Net Income (Loss) (in dollars per share)	[1]	$ 0.42	$ (0.07)
[1]	May not foot due to rounding.

CONSOLIDATED BALANCE SHEETS (HD

CONSOLIDATED BALANCE SHEETS (HD Supply Holdings, Inc.) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
Current assets:
Cash and cash equivalents	$ 70	$ 75
Receivables, less allowance for doubtful accounts of $14 and $13	1,015	904
Inventories	913	831
Other current assets	40	37
Total current assets	2,038	1,847
Property and equipment, net	309	303
Goodwill	2,869	2,869
Intangible assets, net	109	112
Deferred tax asset	579	556
Other assets	22	20
Total assets	5,926	5,707
Current liabilities:
Accounts payable	721	532
Accrued compensation and benefits	84	140
Current installments of long-term debt	14	14
Other current liabilities	156	157
Total current liabilities	975	843
Long-term debt, excluding current installments	3,716	3,798
Other liabilities	112	106
Total liabilities	4,803	4,747
Stockholders' equity:
Common stock, par value $0.01; 1 billion shares authorized; 202.9 million and 201.4 million shares issued and outstanding at April 30, 2017 and January 29, 2017, respectively	2	2
Paid-in capital	3,994	3,962
Accumulated deficit	(2,850)	(2,969)
Accumulated other comprehensive loss	(14)	(15)
Treasury stock, at cost, 0.2 and 0.6 million shares at April 30, 2017 and January 29, 2017, respectively	(9)	(20)
Total stockholders' equity	1,123	960
Total liabilities and stockholders' equity	$ 5,926	$ 5,707

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (HD Supply Holdings, Inc.) - USD ($) shares in Millions, $ in Millions	Apr. 30, 2017	Jan. 29, 2017
Receivables
Receivables, allowance for doubtful accounts (in dollars)	$ 14	$ 13
Common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000	1,000
Common stock, shares issued	202.9	201.4
Common stock, shares outstanding	202.9	201.4
Treasury stock
Treasury stock, shares	0.2	0.6

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (HD Supply Holdings, Inc.) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 85	$ (14)
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	25	25
Provision for uncollectibles	2	1
Non-cash interest expense	3	4
Payment of discounts upon extinguishment of debt	(4)
Loss on extinguishment of debt	3	115
Stock-based compensation expense	6	6
Deferred income taxes	34	(9)
Other	(1)
Changes in assets and liabilities, net of the effects of acquisitions & dispositions:
(Increase) decrease in receivables	(113)	(81)
(Increase) decrease in inventories	(83)	(91)
(Increase) decrease in other current assets	(3)	(20)
Increase (decrease) in accounts payable and accrued liabilities	129	140
Net cash provided by (used in) operating activities	83	76
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(24)	(17)
Proceeds from sales of property and equipment	2
Net cash provided by (used in) investing activities	(22)	(17)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under employee benefit plans	25	6
Purchase of treasury shares	(9)	(9)
Borrowings of long-term debt		1,000
Repayments of long-term debt	(100)	(1,108)
Borrowings on long-term revolver debt	75
Repayments on long-term revolver debt	(55)
Debt issuance costs	(5)	(14)
Other financing activities	3	(2)
Net cash provided by (used in) financing activities	(66)	(127)
Effect of exchange rates on cash and cash equivalents		2
Increase (decrease) in cash and cash equivalents	(5)	(66)
Cash and cash equivalents at beginning of period	75	269
Cash and cash equivalents at end of period	$ 70	$ 203

CONSOLIDATED STATEMENTS OF OPE6

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (HD Supply, Inc.) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales	$ 1,873	$ 1,781
Cost of sales	1,242	1,172
Gross Profit	631	609
Operating expenses:
Selling, general and administrative	431	401
Depreciation and amortization	24	23
Restructuring		7
Total operating expenses	455	431
Operating Income	176	178
Interest expense	49	85
Loss on extinguishment of debt	3	115
Other (Income) expense, net	2
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	122	(22)
Provision (benefit) for income taxes	37	(8)
Income (Loss) from Continuing Operations	85	(14)
Net Income (Loss)	85	(14)
Other comprehensive income (loss)- foreign currency translation adjustment	1	4
Total Comprehensive Income (Loss)	86	(10)
HD Supply, Inc. (Total HDS)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales	1,873	1,781
Cost of sales	1,242	1,172
Gross Profit	631	609
Operating expenses:
Selling, general and administrative	431	401
Depreciation and amortization	24	23
Restructuring		7
Total operating expenses	455	431
Operating Income	176	178
Interest expense	49	85
Loss on extinguishment of debt	3	115
Other (Income) expense, net	2
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	122	(22)
Provision (benefit) for income taxes	37	(8)
Income (Loss) from Continuing Operations	85	(14)
Net Income (Loss)	85	(14)
Other comprehensive income (loss)- foreign currency translation adjustment	1	4
Total Comprehensive Income (Loss)	$ 86	$ (10)

CONSOLIDATED BALANCE SHEETS (H7

CONSOLIDATED BALANCE SHEETS (HD Supply, Inc.) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
Current assets:
Cash and cash equivalents	$ 70	$ 75
Receivables, less allowance for doubtful accounts of $14 and $13	1,015	904
Inventories	913	831
Other current assets	40	37
Total current assets	2,038	1,847
Property and equipment, net	309	303
Goodwill	2,869	2,869
Intangible assets, net	109	112
Deferred tax asset	579	556
Other assets	22	20
Total assets	5,926	5,707
Current liabilities:
Accounts payable	721	532
Accrued compensation and benefits	84	140
Current installments of long-term debt	14	14
Other current liabilities	156	157
Total current liabilities	975	843
Long-term debt, excluding current installments	3,716	3,798
Other liabilities	112	106
Total liabilities	4,803	4,747
Stockholders' equity:
Common stock, par value $0.01; authorized 1,000 shares; issued and outstanding 1,000 shares at April 30, 2017 and January 29, 2017	2	2
Paid-in capital	3,994	3,962
Accumulated deficit	(2,850)	(2,969)
Accumulated other comprehensive loss	(14)	(15)
Total stockholders' equity	1,123	960
Total liabilities and stockholders' equity	5,926	5,707
HD Supply, Inc. (Total HDS)
Current assets:
Cash and cash equivalents	52	73
Receivables, less allowance for doubtful accounts of $14 and $13	1,015	904
Inventories	913	831
Other current assets	40	37
Total current assets	2,020	1,845
Property and equipment, net	309	303
Goodwill	2,869	2,869
Intangible assets, net	109	112
Deferred tax asset	579	556
Other assets	22	20
Total assets	5,908	5,705
Current liabilities:
Accounts payable	721	532
Accrued compensation and benefits	84	140
Current installments of long-term debt	14	14
Other current liabilities	154	157
Total current liabilities	973	843
Long-term debt, excluding current installments	3,716	3,798
Other liabilities	112	106
Total liabilities	4,801	4,747
Stockholders' equity:
Common stock, par value $0.01; authorized 1,000 shares; issued and outstanding 1,000 shares at April 30, 2017 and January 29, 2017
Paid-in capital	3,812	3,806
Accumulated deficit	(2,691)	(2,833)
Accumulated other comprehensive loss	(14)	(15)
Total stockholders' equity	1,107	958
Total liabilities and stockholders' equity	$ 5,908	$ 5,705

CONSOLIDATED BALANCE SHEETS (P8

CONSOLIDATED BALANCE SHEETS (Parenthetical) (HD Supply, Inc.) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
Receivables
Receivables, allowance for doubtful accounts (in dollars)	$ 14	$ 13
Common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	202,900,000	201,400,000
Common stock, shares outstanding	202,900,000	201,400,000
HD Supply, Inc. (Total HDS)
Receivables
Receivables, allowance for doubtful accounts (in dollars)	$ 14	$ 13
Common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000	1,000
Common stock, shares issued	1,000	1,000
Common stock, shares outstanding	1,000	1,000

CONSOLIDATED STATEMENTS OF CAS9

CONSOLIDATED STATEMENTS OF CASH FLOWS (HD Supply, Inc.) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 85	$ (14)
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	25	25
Provision for uncollectibles	2	1
Non-cash interest expense	3	4
Payment of discounts upon extinguishment of debt	(4)
Loss on extinguishment of debt	3	115
Stock-based compensation expense	6	6
Deferred income taxes	34	(9)
Other	(1)
Changes in assets and liabilities, net of the effects of acquisitions & dispositions:
(Increase) decrease in receivables	(113)	(81)
(Increase) decrease in inventories	(83)	(91)
(Increase) decrease in other current assets	(3)	(20)
Increase (decrease) in accounts payable and accrued liabilities	129	140
Net cash provided by (used in) operating activities	83	76
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(24)	(17)
Proceeds from sales of property and equipment	2
Net cash provided by (used in) investing activities	(22)	(17)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt		1,000
Repayments of long-term debt	(100)	(1,108)
Borrowings on long-term revolver debt	75
Repayments on long-term revolver debt	(55)
Debt issuance costs	(5)	(14)
Other financing activities	3	(2)
Net cash provided by (used in) financing activities	(66)	(127)
Effect of exchange rates on cash and cash equivalents		2
Increase (decrease) in cash and cash equivalents	(5)	(66)
Cash and cash equivalents at beginning of period	75	269
Cash and cash equivalents at end of period	70	203
HD Supply, Inc. (Total HDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	85	(14)
Reconciliation of net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	25	25
Provision for uncollectibles	2	1
Non-cash interest expense	3	4
Payment of discounts upon extinguishment of debt	(4)
Loss on extinguishment of debt	3	115
Stock-based compensation expense	6	6
Deferred income taxes	34	(9)
Other	(1)
Changes in assets and liabilities, net of the effects of acquisitions & dispositions:
(Increase) decrease in receivables	(113)	(81)
(Increase) decrease in inventories	(83)	(91)
(Increase) decrease in other current assets	(3)	(20)
Increase (decrease) in accounts payable and accrued liabilities	129	140
Net cash provided by (used in) operating activities	83	76
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(24)	(17)
Proceeds from sales of property and equipment	2
Net cash provided by (used in) investing activities	(22)	(17)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt		1,000
Repayments of long-term debt	(100)	(1,108)
Borrowings on long-term revolver debt	75
Repayments on long-term revolver debt	(55)
Debt issuance costs	(5)	(14)
Other financing activities	3	(2)
Net cash provided by (used in) financing activities	(82)	(124)
Effect of exchange rates on cash and cash equivalents		2
Increase (decrease) in cash and cash equivalents	(21)	(63)
Cash and cash equivalents at beginning of period	73	266
Cash and cash equivalents at end of period	$ 52	$ 203

NATURE OF BUSINESS AND BASIS OF

NATURE OF BUSINESS AND BASIS OF PRESENTATION	3 Months Ended
	Apr. 30, 2017
NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1 — NATURE OF BUSINESS AND BASIS OF PRESENTATION Nature of Business HD Supply Holdings, Inc. (‘‘Holdings’’) indirectly owns all of the outstanding common stock of HD Supply, Inc. (“HDS”). Holdings, together with its direct and indirect subsidiaries, including HDS (“HD Supply” or the “Company”), is one of the largest industrial distribution companies in North America. The Company specializes in three distinct market sectors: Maintenance, Repair & Operations; Infrastructure; and Specialty Construction. Through approximately 500 locations across 48 U.S. states and six Canadian provinces, the Company serves these markets with an integrated go-to-market strategy. HD Supply has approximately 14,000 associates delivering localized, customer-tailored products, services and expertise. The Company serves approximately 530,000 customers, which include contractors, maintenance professionals, industrial businesses, and government entities. HD Supply’s broad range of end-to-end product lines and services includes approximately 845,000 stock-keeping units (“SKUs”) of quality, name-brand and proprietary-brand products as well as value-add services supporting the entire life-cycle of a project from infrastructure and construction to maintenance, repair and operations. HD Supply is managed primarily on a product line basis and reports results of operations in three reportable segments. The reportable segments are Facilities Maintenance, Waterworks, and Construction & Industrial. In addition, the consolidated financial statements include Corporate, which is comprised of enterprise-wide functional departments. Basis of Presentation In management’s opinion, the unaudited financial information for the interim periods presented includes all adjustments necessary for a fair statement of the results of operations, financial position, and cash flows. All adjustments are of a normal recurring nature unless otherwise disclosed. Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year. For a more complete discussion of the Company’s significant accounting policies and other information, you should read this report in conjunction with the Company’s annual report on Form 10-K for the year ended January 29, 2017, which includes all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). F iscal Year HD Supply’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31. Fiscal years ending January 28, 2018 (“fiscal 2017”) and January 29, 2017 (“fiscal 2016”) both include 52 weeks. The three months ended April 30, 2017 (“first quarter 2017”) and May 1, 2016 (“first quarter 2016”) both include 13 weeks. Principles of Consolidation The consolidated financial statements of Holdings present the results of operations, financial position and cash flows of Holdings and its wholly-owned subsidiaries, including HDS. The consolidated financial statements of HDS present the results of operations, financial position and cash flows of HDS and its wholly-owned subsidiaries. All material intercompany balances and transactions are eliminated. Results of operations of businesses acquired are included from their respective dates of acquisition. The results of operations of all discontinued operations have been separately reported as discontinued operations for all periods presented. Estimates Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing these consolidated financial statements in conformity with GAAP. Actual results could differ from these estimates. Self-Insurance HD Supply has a high deductible insurance program for most losses related to general liability, product liability, environmental liability, automobile liability, workers’ compensation, and is self-insured for medical claims, while maintaining per employee stop loss coverage, and certain legal claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Self-insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. At April 30, 2017 and January 29, 2017, self-insurance reserves totaled approximately $78 million and $79 million, respectively.

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS	3 Months Ended
	Apr. 30, 2017
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS	NOTE 2 — DISCONTINUED OPERATIONS On May 31, 2016, the Company completed the sale of its Interior Solutions business. In accordance with Accounting Standards Codification (“ASC”) 205-20, “Discontinued Operations” and Accounting Standards Update (“ASU”) 2014-08, “Reporting discontinued operations and disclosure of disposals of components of an entity,” the results of Interior Solutions is classified as a discontinued operation. The presentation of discontinued operations includes revenues and expenses of the discontinued operations and gain/loss on the disposition of businesses, net of tax, as one line item on the Consolidated Statements of Operations and Comprehensive Income (Loss). All Consolidated Statements of Operations and Comprehensive Income (Loss) presented have been revised to reflect this presentation. The following table provides additional detail related to the results of operations of the discontinued operations (amounts in millions): Three Months Ended April 30, May 1, Net sales $ — $ Cost of sales — Gross Profit — Operating expenses: Selling, general and administrative — Depreciation and amortization — Total operating expenses — Operating Income — — (Gain) loss on disposal of discontinued operations — — Income (loss) before provision for income taxes — — Provision (benefit) for income taxes — — Income (loss) from discontinued operations, net of tax $ — $ — The following table provides additional detail related to the net cash provided by operating and investing activities of the discontinued operations (amounts in millions): Three Months Ended April 30, May 1, Net cash flows from operating activities $ — $ Capital expenditures — — Net cash flows provided by (used in) investing activities $ — $ —

DEBT

DEBT	3 Months Ended
	Apr. 30, 2017
DEBT
DEBT	NOTE 3 — DEBT HDS’s long-term debt as of April 30, 2017 and January 29, 2017 consisted of the following (dollars in millions): April 30, 2017 January 29, 2017 Outstanding Interest Outstanding Interest Senior ABL Facility due 2022 $ $ Term B-1 Loans due 2021 Term B-2 Loans due 2024 December 2014 First Priority Notes due 2021 April 2016 Senior Unsecured Notes due 2024 Total gross long-term debt $ $ Less unamortized discount ) ) Less unamortized deferred financing costs ) ) Total net long-term debt $ $ Less current installments ) ) Total net long-term debt, excluding current installments $ $ (1) Represents the stated rate of interest, without including the effect of discounts or premiums. On April 18, 2017, HDS used cash and available borrowings under its Senior ABL Facility, to repay $100 million aggregate principal of its approximately $842 million original aggregate principal tranche of term loans due 2021 (the “Term B-1 Loans”). As a result, the Company incurred a $2 million loss on extinguishment of debt, which included write-offs of unamortized original issue discount and unamortized deferred financing costs for $1 million each, in accordance with ASC 470-50, “Debt — Modifications and Extinguishments.” On April 5, 2017, HDS entered into a Third Amendment (the “Third Amendment”) to the credit agreement governing its existing Senior ABL Facility, as defined below. The Third Amendment, among other things, reduced the applicable margin for borrowings under the Senior ABL Facility, reduced the applicable commitment fee, and extended the maturity date of the Senior ABL Facility until April 5, 2022. As a result, the Company recorded a $1 million loss on extinguishment of debt, in accordance with ASC 470-50, “Debt — Modifications and Extinguishments,” for the write-off of $1 million of unamortized deferred financing costs. Senior Credit Facilities Senior ABL Facility HDS’s Senior Asset Based Lending Facility due 2022 (the “Senior ABL Facility”) provides for senior secured revolving loans and letters of credit of up to a maximum aggregate principal amount of $1,500 million (subject to availability under a borrowing base). Extensions of credit under the Senior ABL Facility are limited by a borrowing base calculated periodically based on specified percentages of the value of eligible inventory and eligible accounts receivable, subject to certain reserves and other adjustments. A portion of the Senior ABL Facility is available for letters of credit and swingline loans. As of April 30, 2017, HDS had $795 million of additional available borrowings under the Senior ABL Facility (after giving effect to the borrowing base limitations and approximately $30 million in letters of credit issued and including $123 million of borrowings available on qualifying cash balances). Of the approximately $439 million borrowed on the Senior ABL Facility as of April 30, 2017, approximately $58 million represents Canadian borrowings with the remainder in the U.S. At HDS’s option, the interest rates applicable to the loans under the Senior ABL Facility are based (i) in the case of U.S. dollar-denominated loans, either at London Interbank Offered Rate (“LIBOR”) plus an applicable margin, or Prime Rate plus an applicable margin and (ii) in the case of Canadian dollar-denominated loans, either the banker’s acceptance (“BA”) rate plus an applicable margin, or the Canadian Prime Rate plus an applicable margin. The margins applicable for each elected interest rate are subject to a pricing grid, as defined in the agreement governing the Senior ABL Facility, based on average excess availability for the previous fiscal quarter. The Senior ABL Facility also contains a letter of credit fee computed at a rate per annum equal to the Applicable Margin (as defined in the Senior ABL Facility agreement) then in effect for LIBOR Loans and an unused commitment fee subject to a pricing grid, included in the agreement governing the Senior ABL Facility, based on the Average Daily Used Percentage (as defined in the agreement). The Senior ABL Facility also permits HDS to add one or more incremental term loan facilities to be included in the Senior ABL Facility or one or more revolving credit facility commitments to be included in the Senior ABL Facility. Senior Term Loan Facility HDS’s Senior Term Facility consists of a senior secured term loan facility (the ‘‘Term Loan Facility,’’ and the term loans thereunder, the ‘‘Term Loans’’) providing for Term Loans in an original aggregate principal amount of $1,392 million. Term B-1 Loans will mature on August 13, 2021 and Term B-2 Loans will mature on October 17, 2023. Both Term B-1 Loans and Term B-2 Loans amortize in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Term Loans with the balances payable on their respective maturity dates. Both Term B-1 Loans and Term B-2 Loans bear interest at the applicable margin for borrowings of 2.75% for LIBOR borrowings and 1.75% for base rate borrowings. The Term Loan Facility allows for a reduction to the applicable margin on the Term B-2 Loans from 2.75% per annum to 2.50% per annum upon the Company reaching a consolidated total leverage ratio of 3.0x or less. For additional information on our Senior ABL Facility or Senior Term Facility (collectively, the “Senior Credit Facilities”), including guarantees and security, please refer to the Notes to the Consolidated Financial Statements of our Form 10-K for the fiscal year ended January 29, 2017. Secured Notes 5.25% Senior Secured First Priority Notes due 2021 HDS’s 5.25% Senior Secured First Priority Notes due 2021 (the “December 2014 First Priority Notes”) bear interest at 5.25% per annum and will mature on December 15, 2021. Interest is paid semi-annually in arrears on June 15 th and December 15 th of each year. Redemption HDS may redeem the December 2014 First Priority Notes, in whole or in part, at any time (1) prior to December 15, 2017, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus the applicable make-whole premium set forth in the indenture governing the December 2014 First Priority Notes and (2) on and after December 15, 2017, at the applicable redemption price set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, to the relevant redemption date, if redeemed during the 12-month period commencing on December 15 of the year set forth below. Year Percentage 2017 % 2018 % 2019 % 2020 and thereafter % In addition, at any time prior to December 15, 2017, HDS may redeem on one or more occasions up to 40% of the aggregate principal amount of the December 2014 First Priority Notes with the proceeds of certain equity offerings at a redemption price of 105.25% of the principal amount of the December 2014 First Priority Notes being redeemed, plus accrued and unpaid interest to the redemption date, provided, however, that if the December 2014 First Priority Notes are redeemed, an aggregate principal amount of December 2014 First Priority Notes equal to at least 50% of the original aggregate principal amount of December 2014 First Priority Notes must remain outstanding immediately after each such redemption of December 2014 First Priority Notes. Collateral The December 2014 First Priority Notes and the related guarantees are secured by a first-priority security interest in substantially all of the tangible and intangible assets of HDS and the Subsidiary Guarantors (other than the ABL Priority Collateral (as defined in the indenture governing the December 2014 First Priority Notes), in which the December 2014 First Priority Notes and the related guarantees have a second-priority security interest), including pledges of all capital stock of HDS’s restricted subsidiaries directly owned by HDS and the Subsidiary Guarantors (but only up to 65% of each series of capital stock of each direct Foreign Subsidiary owned by HDS or any Subsidiary Guarantor), subject to certain thresholds, exceptions and permitted liens, and excluding any Excluded Assets and Excluded Subsidiary Securities (each as defined in the indenture governing the December 2014 First Priority Notes) and together (the “Cash Flow Priority Collateral”). The indenture governing the December 2014 First Priority Notes and the applicable collateral documents provide that any capital stock and other securities of any of HDS’s subsidiaries will be excluded from the collateral to the extent the pledge of such capital stock or other securities to secure the December 2014 First Priority Notes would cause such subsidiary to be required to file separate financial statements with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 3-16 of Regulation S-X (as in effect from time to time). Unsecured Notes 5.75% Senior Unsecured Notes due 2024 HDS’s 5.25% Senior Unsecured Notes due 2024 (the “April 2016 Senior Unsecured Notes”) bear interest at a rate of 5.75% and will mature on April 15, 2024. Interest is paid semi-annually on April 15 th and October 15 th of each year. Redemption HDS may redeem the April 2016 Senior Unsecured Notes, in whole or in part, at any time (1) prior to April 15, 2019, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus the applicable make-whole premium set forth in the April 2016 Senior Unsecured Notes indenture and (2) on and after April 15, 2019, at the applicable redemption price set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, to the relevant redemption date, if redeemed during the 12-month period commencing on April 15 of the year set forth below. Year Percentage 2019 % 2020 % 2021 % 2022 and thereafter % In addition, at any time prior to April 15, 2019, HDS may redeem on one or more occasions up to 40% of the aggregate principal amount of the April 2016 Senior Unsecured Notes with the proceeds of certain equity offerings at a redemption price of 105.75% of the principal amount in respect of the April 2016 Senior Unsecured Notes being redeemed, plus accrued and unpaid interest to the redemption date, provided, however, that if the April 2016 Senior Unsecured Notes are redeemed, an aggregate principal amount of April 2016 Senior Unsecured Notes equal to at least 50% of the original aggregate principal amount of April 2016 Senior Unsecured Notes must remain outstanding immediately after each such redemption of April 2016 Senior Unsecured Notes. For additional information on the December 2014 First Priority Notes and the April 2016 Senior Unsecured Notes, including guarantees and security, please refer to the Notes to the Consolidated Financial Statements of our Form 10-K, for the fiscal year ended January 29, 2017. Debt covenants HDS’s outstanding debt agreements contain various restrictive covenants including, but not limited to, limitations on the incurrence of additional indebtedness and dividend payments and restrictions on the use of proceeds from asset dispositions. As of April 30, 2017, HDS was in compliance with all such covenants that were in effect on such date.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Apr. 30, 2017
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	NOTE 4 — FAIR VALUE MEASUREMENTS The fair value measurements and disclosure principles of GAAP (ASC 820, “Fair Value Measurements and Disclosures”) define fair value, establish a framework for measuring fair value and provide disclosure requirements about fair value measurements. These principles define a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly; Level 3 — Unobservable inputs in which little or no market activity exists. The Company’s financial instruments that are not reflected at fair value on the Consolidated Balance Sheets were as follows as of April 30, 2017 and January 29, 2017 (amounts in millions): As of April 30, 2017 As of January 29, 2017 Recorded Estimated Recorded Estimated Senior ABL Facility $ $ $ $ Term Loans and Notes Total $ $ $ $ (1) These amounts do not include accrued interest; accrued interest is classified as Other current liabilities in the accompanying Consolidated Balance Sheets. These amounts do not include any related discounts, premiums, or deferred financing costs. The Company utilized Level 2 inputs, as defined in the fair value hierarchy, to measure the fair value of the long-term debt. Management’s fair value estimates were based on quoted prices for recent trades of HDS’s long-term debt, recent similar credit facilities initiated by companies with like credit quality in similar industries, quoted prices for similar instruments, and inquiries with certain investment communities.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Apr. 30, 2017
INCOME TAXES
INCOME TAXES	NOTE 5 — INCOME TAXES For the three months ended April 30, 2017, the Company’s combined federal, state, and foreign effective tax rate for continuing operations was an expense of 30.3%. The effective rate for continuing operations for the three months ended May 1, 2016 was a benefit of 36.4%. The Company’s effective tax rate will vary based on a variety of factors, including overall profitability, the geographical mix of income before taxes and the related tax rates in the jurisdictions where it operates, restructuring and other one-time charges, as well as discrete events, such as settlements of audits. For the three months ended April 30, 2017, the application of ASU No. 2016-09 resulted in discrete tax benefits of $11 million from the exercise and vesting of stock based awards, which lowered the effective tax rate by 900 basis points. For additional information on the adoption of ASU 2016-09, see “Note 12, Recent Accounting Pronouncements.” As of January 29, 2017, the Company’s unrecognized tax benefits in accordance with the income taxes principles of GAAP (ASC 740, “Income Taxes”) were $10 million. As of April 30, 2017, the Company’s unrecognized tax benefits remained unchanged. The Company’s ending net accrual for interest and penalties related to unrecognized tax benefits as of January 29, 2017 was zero and remained unchanged as of April 30, 2017. As of January 29, 2017, the Company’s valuation allowance on its U.S. deferred tax assets was approximately $5 million and remained unchanged as of April 30, 2017. Each reporting period we assess available positive and negative evidence and estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets.

BASIC AND DILUTED WEIGHTED AVER

BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES	3 Months Ended
	Apr. 30, 2017
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES	NOTE 6—BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES The following basic and diluted weighted average common shares information is provided for Holdings. The reconciliation of basic to diluted weighted average common shares for the three months ended April 30, 2017 and May 1, 2016 was as follows (in thousands): Three Months Ended April 30, 2017 May 1, 2016 Weighted-average common shares Effect of potentially dilutive stock plan securities — Diluted weighted-average common shares Stock plan securities excluded from dilution (1) (1) Represents securities not included in the computation of diluted earnings per share because their effect would have been anti-dilutive. Stock plan securities consist of securities (stock options, restricted stock and restricted stock units) granted under Holdings’ stock-based compensation plans. Diluted weighted average common shares outstanding equals basic weighted average common shares outstanding for the three months ended May 1, 2016, as the effect of securities are anti-dilutive because the Company incurred net losses.

SUPPLEMENTAL BALANCE SHEET AND

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION	3 Months Ended
	Apr. 30, 2017
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION	NOTE 7 — SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION Receivables Receivables as of April 30, 2017 and January 29, 2017 consisted of the following (amounts in millions): April 30, January 29, Trade receivables, net of allowance for doubtful accounts $ $ Vendor rebate receivables Other receivables Total receivables, net $ $ Other Current Liabilities Other current liabilities as of April 30, 2017 and January 29, 2017 consisted of the following (amounts in millions): HD Supply Holdings, Inc. HD Supply, Inc. April 30, January 29, April 30, January Accrued interest $ $ $ $ Accrued non-income taxes Other Total other current liabilities $ $ $ $ Supplemental Cash Flow Information Cash paid for interest in the three months ended April 30, 2017 and May 1, 2016 was $44 million and $119 million, respectively. During the three months ended April 30, 2017, the Company paid $4 million of original issue discounts related to the $100 million payment on Term B-1 Loans. Cash paid for income taxes, net of refunds, in the three months ended April 30, 2017 and May 1, 2016 was approximately $3 million and $1 million, respectively. Significant Non-Cash Transactions During the three months ended April 30, 2017, Holdings retired 611,433 shares of its common stock (“Retired Shares”) held as treasury shares by Holdings in the amount of $23 million. All of these shares were repurchased by Holdings pursuant to the publicly announced share repurchase program previously authorized by Holdings’ board of directors. Holdings reinstated the Retired Shares to the status of authorized but unissued shares of common stock, par value $0.01 per share, effective as of the date of retirement. In accordance with ASC 505-30, “Equity-Treasury Stock,” Holdings reversed the $0.01 par value of the Retired Shares and the excess of the cost of the Retired Shares over par value to Retained Earnings. Build-to-Suit Lease On February 4, 2016, the Company entered into a build-to-suit arrangement for a leadership development and headquarters facility in Atlanta, Georgia, which began construction in 2016. The lease commences upon completion of construction which is anticipated to be early 2018. In accordance with ASC 850, “Leases,” for build-to-suit arrangements where the Company is involved in the construction of structural improvements prior to the commencement of the lease or takes some level of construction risk, the Company is considered the owner of the assets and land during the construction period. Accordingly, during construction activities, the Company recorded a Construction in progress asset within Property and equipment and a corresponding financing liability on the Consolidated Balance Sheet for contributions by the landlord toward construction. Once the construction is completed, if the lease meets certain “sales-leaseback” criteria, the Company will remove the asset and related financial obligation from the Consolidated Balance Sheet and treat the building lease as an operating lease. If upon completion of construction, the lease does not meet the “sales-leaseback” criteria, the leased property will be treated as a capital lease and included in Property and equipment on the Consolidated Balance Sheet. As of April 30, 2017, the Consolidated Balance Sheet includes $26 million of build-to-suit assets in Construction in progress, and the corresponding financial obligation of $26 million in Other long-term liabilities in the Consolidated Balance Sheet.

RESTRUCTURING ACTIVITIES

RESTRUCTURING ACTIVITIES	3 Months Ended
	Apr. 30, 2017
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES	NOTE 8—RESTRUCTURING ACTIVITIES As a result of the sale of the Power Solutions business unit in fiscal 2015, management evaluated the Company’s talent alignment and functional support strategies. Consequently, during fiscal 2015, the Company initiated a restructuring plan to strategically align its leadership and functional support teams. During the three months ended May 1, 2016, the Company incurred $7 million of restructuring charges under this plan. The Company completed the activities under this plan in fiscal 2016 and does not expect to incur any additional charges. As of April 30, 2017 and January 29, 2017, the Company’s liability balance for these restructuring activities was $4 million and $5 million respectively, and is included in Other current liabilities in the Consolidated Balance Sheets. Payments for these charges are expected to be substantially complete by the end of fiscal 2017.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Apr. 30, 2017
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 9 — COMMITMENTS AND CONTINGENCIES Legal Matters HD Supply is involved in various legal proceedings arising in the normal course of its business. The Company establishes reserves for litigation and similar matters when those matters present loss contingencies that it determines to be both probable and reasonably estimable in accordance with ASC 450, “Contingencies.” In the opinion of management, based on current knowledge, all reasonably estimable and probable matters are believed to be adequately reserved for or covered by insurance and are not expected to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows. For all other matters management believes the possibility of losses from such matters is not probable, the potential loss from such matters is not reasonably estimable, or such matters, if disposed of unfavorably to the Company, are of such kind or involve such amounts that would not have a material adverse effect on the financial position, results of operations or cash flows of the Company. For material matters that are reasonably possible and reasonably estimable, including matters that are probable and estimable but for which the amount that is reasonably possible is in excess of the amount that the Company has accrued for, management has estimated the aggregate range of potential loss as $0 to $10 million. If a material loss is probable or reasonably possible, and in either case estimable, the Company has considered it in the analysis and it is included in the discussion set forth above.

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Apr. 30, 2017
SEGMENT INFORMATION
SEGMENT INFORMATION	NOTE 10 — SEGMENT INFORMATION HD Supply’s operating segments are based on management structure and internal reporting. Each segment offers different products and services to the end customer, except for Corporate, which provides general corporate overhead support. The Company determines its reportable segments in accordance with the principles of segment reporting within ASC 280, “Segment Reporting.” For purposes of evaluation under these segment reporting principles, the Chief Operating Decision Maker for HD Supply assesses HD Supply’s ongoing performance, based on the periodic review and evaluation of Net sales, Adjusted EBITDA and certain other measures for each of the operating segments. HD Supply has three reportable segments, each of which is presented below: · Facilities Maintenance —Facilities Maintenance distributes maintenance, repair and operations (‘‘MRO’’) products, provides value-add services and fabricates custom products to multifamily, hospitality, healthcare and institutional facilities. · Waterworks —Waterworks distributes complete lines of water and wastewater transmission products, serving contractors and municipalities in the water and wastewater industries for non-residential and residential uses. · Construction & Industrial —Construction & Industrial distributes specialized hardware, tools, engineered materials and safety products to non-residential and residential contractors. Construction & Industrial also offers light remodeling and construction supplies, kitchen and bath cabinets, windows, plumbing materials, electrical equipment and other products, primarily to small remodeling contractors and trade professionals. In addition to the reportable segments, the Company’s consolidated financial results include ‘‘Corporate.’’ Corporate includes costs related to our centralized support functions, which are comprised of finance, information technology, human resources, legal, supply chain and other support services, and removes inter-segment transactions. The following tables present Net sales, Adjusted EBITDA, and other measures for each of the reportable segments and total continuing operations for the periods indicated (amounts in millions): Facilities Waterworks Construction Corporate Total Three Months Ended April 30, 2017 Net sales $ $ $ $ ) $ Adjusted EBITDA ) Depreciation(1) & Software Amortization Other Intangible Amortization — — Three Months Ended May 1, 2016 Net sales $ $ $ $ ) $ Adjusted EBITDA ) Depreciation(1) & Software Amortization Other Intangible Amortization — (1) Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. Reconciliation to Consolidated Financial Statements Three Months Ended April 30, 2017 May 1, 2016 Total Adjusted EBITDA $ $ Depreciation and amortization(1) Stock-based compensation Restructuring — Other — ) Operating income Interest expense, net Loss on extinguishment of debt(2) Other (income) expense, net — Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) Provision (benefit) for income taxes ) Income (loss) from continuing operations ) Less Income from discontinued operations, net of tax — — Net income (loss) $ $ ) (1) Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. (2) Represents the loss on extinguishment of debt including the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt.

SUBSIDIARY GUARANTORS

SUBSIDIARY GUARANTORS	3 Months Ended
	Apr. 30, 2017
SUBSIDIARY GUARANTORS
SUBSIDIARY GUARANTORS	NOTE 11—SUBSIDIARY GUARANTORS HDS (the “Debt Issuer”) has outstanding December 2014 First Priority Notes and April 2016 Senior Unsecured Notes (collectively the “Notes”), which are guaranteed by certain of its subsidiaries (the “Subsidiary Guarantors”). The Subsidiary Guarantors are direct or indirect wholly-owned domestic subsidiaries of HDS. The subsidiaries of HDS that do not guarantee the Notes (the “Non-guarantor Subsidiaries”) are direct or indirect wholly-owned subsidiaries of HDS and primarily include HDS’s operations in Canada. The Debt Issuer’s payment obligations under the Notes are jointly and severally guaranteed by the guarantors and all guarantees are full and unconditional. These guarantees are subject to release under the circumstances as described below: (i) concurrently with any direct or indirect sale or disposition (by merger or otherwise) of any Subsidiary Guarantor or any interest therein in accordance with the terms of the applicable indebtedness by HDS or a restricted subsidiary, following which such Subsidiary Guarantor is no longer a restricted subsidiary of HDS; (ii) at any time that such Subsidiary Guarantor is released from all of its obligations under all of its guarantees of payment of any indebtedness of HDS or any Subsidiary Guarantor under all other indebtedness and is not a borrower under the Senior ABL Facility; (iii) upon the merger or consolidation of any Subsidiary Guarantor with and into HDS or another Subsidiary Guarantor that is the surviving entity in such merger or consolidation, or upon the liquidation of such Subsidiary Guarantor following the transfer of all of its assets to HDS or another Subsidiary Guarantor; (iv) concurrently with any Subsidiary Guarantor becoming an unrestricted subsidiary; (v) during the period when the rating on the notes is changed to investment grade and certain covenants cease to apply while such investment grade rating is maintained, upon the merger or consolidation of any Subsidiary Guarantor with and into another subsidiary that is not a Subsidiary Guarantor with such other subsidiary being the surviving entity in such merger or consolidation, or upon liquidation of such Subsidiary Guarantor following the transfer of all of its assets to a subsidiary that is not a Subsidiary Guarantor; (vi) upon legal or covenant defeasance of HDS’s obligations under the applicable indebtedness, or satisfaction and discharge of the indenture governing the applicable indebtedness; or (vii) subject to customary contingent reinstatement provisions, upon payment in full of the aggregate principal amount of all applicable indebtedness then outstanding and all other obligations guaranteed by a Subsidiary Guarantor then due and owing. In addition, HDS has the right, upon 30 days’ notice to the applicable trustee, to cause any Subsidiary Guarantor that has not guaranteed payment of any indebtedness of HDS or any Subsidiary Guarantor under all other indebtedness and is not a borrower under the Senior ABL Facility to be unconditionally released from all obligations under its Subsidiary Guarantee, and such Subsidiary Guarantee shall thereupon terminate and be discharged and of no further force or effect. In connection with the issuance of the Notes, HDS determined the need for compliance with Rule 3-10 of SEC Regulation S-X. In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, HDS has included the accompanying Condensed Consolidating Financial Statements in accordance with Rule 3-10(f) of SEC Regulation S-X. The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed statements of operations and comprehensive income, the condensed balance sheets and the condensed statements of cash flows for the Debt Issuer, for the Subsidiary Guarantors and the Non-guarantor Subsidiaries and total consolidated Debt Issuer and subsidiaries (amounts in millions). CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Three Months Ended April 30, 2017 Debt Subsidiary Non-Guarantor Elim- Total Net Sales $ — $ $ $ ) $ Cost of sales — ) Gross Profit — — Operating expenses: Selling, general and administrative — Depreciation and amortization — — Restructuring — — — — — Total operating expenses — Operating Income (Loss) ) — Interest expense ) Interest (income) ) ) — — Net (earnings) loss of equity affiliates ) — — — Loss on extinguishment of debt — — — Other (income) expense, net — — — Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) Provision (benefit) for income taxes — — Income (Loss) from Continuing Operations ) Income (loss) from discontinued operations, net of tax — — — — — Net Income (Loss) $ $ $ $ ) $ Other comprehensive income—foreign currency translation adjustment — ) Total Comprehensive Income (Loss) $ $ $ $ ) $ Three Months Ended May 1, 2016 Debt Subsidiary Non- Elim- Total Net Sales $ — $ $ $ — $ Cost of sales — — Gross Profit — — Operating expenses: Selling, general and administrative — Depreciation and amortization — — Restructuring — — Total operating expenses — Operating Income (Loss) ) — Interest expense — ) Interest (income) ) ) — — Net (earnings) loss of equity affiliates ) — — — Loss on extinguishment of debt — — — Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) ) ) Provision (benefit) for income taxes ) — — — ) Income (Loss) from Continuing Operations ) ) ) Income (loss) from discontinued operations, net of tax — — — — — Net Income (Loss) $ ) $ $ $ ) $ ) Other comprehensive income—foreign currency translation adjustment — ) Total Comprehensive Income (Loss) $ ) $ $ $ ) $ ) CONDENSED CONSOLIDATING BALANCE SHEETS As of April 30, 2017 Debt Subsidiary Non- Elim- Total ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Receivables, net — Inventories — — Intercompany receivables — — ) — Other current assets — Total current assets ) Property and equipment, net — Goodwill — — — Intangible assets, net — — Deferred tax asset — ) Investment in subsidiaries — — ) — Intercompany notes receivable — ) — Other assets — — Total assets $ $ $ $ ) $ LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ Accrued compensation and benefits — Current installments of long-term debt — — — Intercompany payables — — ) — Other current liabilities — Total current liabilities ) Long-term debt, excluding current installments — — Deferred tax liabilities — — ) — Intercompany notes payable — ) — Other liabilities — Total liabilities ) Stockholder’s equity (deficit) ) ) Total liabilities and stockholder’s equity (deficit) $ $ $ $ ) $ As of January 29, 2017 Debt Subsidiary Non- Elim- Total ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Receivables, net — Inventories — — Intercompany receivables — — ) — Other current assets — Total current assets ) Property and equipment, net — Goodwill — — — Intangible assets, net — — Deferred tax asset — ) Investment in subsidiaries — — ) — Intercompany notes receivable — ) — Other assets — — Total assets $ $ $ $ ) $ LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ Accrued compensation and benefits — Current installments of long-term debt — — — Intercompany payables — — ) — Other current liabilities — Total current liabilities ) Long-term debt, excluding current installments — — Deferred tax liabilities — — ) — Intercompany notes payable — ) — Other liabilities — Total liabilities ) Stockholder’s equity (deficit) ) ) Total liabilities and stockholder’s equity (deficit) $ $ $ $ ) $ CONDENSED CONSOLIDATING CASH FLOW STATEMENTS Three Months Ended April 30, 2017 Debt Subsidiary Non- Elim- Total Net cash flows from operating activities $ $ ) $ — $ — $ Cash flows from investing activities Capital expenditures ) ) — — ) Proceeds from sales of property and equipment Proceeds from (payments of) intercompany notes — — ) — Net cash flows from investing activities $ ) $ $ — $ ) $ ) Cash flows from financing activities Borrowings of (repayments of) intercompany notes ) — — — Repayments of long-term debt ) — — — ) Borrowings on long-term revolver debt — — — Repayments on long-term revolver debt ) — ) — ) Debt issuance costs ) — — — ) Other financing activities — — — Net cash flows from financing activities ) — ) ) Effect of exchange rates on cash — — — — — Net increase (decrease) in cash & cash equivalents $ ) $ $ ) $ — $ ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ Three Months Ended May 1, 2016 Debt Subsidiary Non- Elim- Total Net cash flows from operating activities $ $ ) $ — $ — $ Cash flows from investing activities Capital expenditures ) ) — — ) Proceeds from (payments of) intercompany notes — — ) — Other investing activities ) — — — Net cash flows from investing activities $ ) $ $ — $ ) $ ) Cash flows from financing activities Borrowings of (repayments of) intercompany notes ) — — — Borrowings of long-term debt — — — Repayments of long-term debt ) — — — ) Debt issuance costs ) — — — ) Other financing activities ) ) — — ) Net cash flows from financing activities ) ) — ) Effect of exchange rates on cash — — — Net increase (decrease) in cash & cash equivalents $ ) $ ) $ $ — $ ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	3 Months Ended
	Apr. 30, 2017
RECENT ACCOUNTING PRONOUNCEMENTS
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 12—RECENT ACCOUNTING PRONOUNCEMENTS Stock Compensation — In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-09, “Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”). The amendments in this Update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The ASU is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of adopting of ASU 2017-09. Goodwill — In January 2017, the FASB issued ASU No. 2017-04, “Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”). The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The amendments in this update should be applied on a prospective basis. The adoption of ASU 2017-04 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. Statement of Cash Flows — In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ASU 2016-18”). The new guidance is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied retrospectively to all periods presented. On a prospective basis, the ASU will only impact the Company to the extent it has restricted cash. Income Taxes — In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-entity Transfers of Assets Other than Inventory” (“ASU 2016-16”). The new guidance is intended to improve the accounting for intra-entity transfers of assets other than inventory by requiring recognition of income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. ASU 2016-16 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The adoption of ASU 2016-16 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. Statement of Cash Flows — In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The new guidance is intended to reduce diversity in practice related to certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The adoption of ASU 2016-15 is not expected to have a material impact on the Company’s financial position, results of operations or cash flows. Stock Compensation — In March 2016, the FASB issued ASU No. 2016-09, “Compensation —Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The new guidance identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. The Company adopted the guidance from this amendment on January 30, 2017 (the first day of fiscal 2017) recording a $56 million cumulative-effect adjustment to retained earnings in order to recognize a deferred tax asset on the excess deduction for stock option exercises over the expense recorded for book purposes. Beginning in the first quarter of fiscal 2017, the impact to the Company will be through a credit or charge to the tax provision reflecting the difference between the amount deductible for tax purposes and the amount expensed for book purposes as options are exercised. Leases — In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The new guidance requires companies to recognize all leases as assets and liabilities for the rights and obligations created by leased assets on the consolidated balance sheet. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. It is to be adopted using a modified retrospective approach. The Company is currently evaluating the impact of adopting ASU 2016-02. Inventory — In July 2015, the FASB issued ASU No. 2015-11, “Inventory, Simplifying the Measurement of Inventory” (“ASU 2015-11”). The amended guidance requires that inventory be measured at the lower of cost and net realizable value. The amended guidance is limited to inventory measured using the first-in, first-out (“FIFO”) or average cost methods and excludes inventory measured using last-in, first-out (“LIFO”) or retail inventory methods. ASU 2015-11 is effective for fiscal years, and interim periods, beginning after December 15, 2016. The Company adopted this guidance on January 30, 2017 (the first day of fiscal 2017) with no material impact on the Company’s financial position, results of operations or cash flows. Revenue recognition — In May 2014, the FASB issued ASU No. 2014-09, “Revenue from contracts with customers” (“ASU 2014-09”), amended by ASU 2016-10, “Revenue from contracts with customers (Topic 606): Identifying Performance Obligations and Licensing,” ASU 2016-12, “Revenue from contracts with customers (Topic 606): Narrow-Scope Improvements and Practical Expedients,” and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers.” The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue arising from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” The update requires significant additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgements. Entities have the option of using either a full retrospective or modified approach to adopt the guidance. In July 2015, the FASB provided a one-year delay in the effective date of ASU 2014-09, to be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and a permission to early adopt for interim and annual periods beginning after December 15, 2016. The Company has performed a review of the new revenue standard and is monitoring the activity of the FASB and the transition resource group as it relates to specific interpretative guidance. The Company is reviewing customer contracts and is in the process of applying the five-step model of the new standard to each contract category identified and will compare the results to current accounting practice. The Company plans to adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard on January 29, 2018 (the first day of fiscal 2018). The Company has not yet determined whether it will adopt the provisions of ASU 2014-09 on a retrospective basis or through a cumulative adjustment to equity. The new standard could change the amount and timing of revenue and costs under certain arrangement types and could increase the administrative burden on Company operations to properly account for customer contracts and provide the more expansive required disclosures. The Company is currently evaluating the impact of adopting ASU 2014-09, but has not yet determined what effect, if any, the new guidance will have on its financial position, results of operations or cash flows.

SUBSEQUENT EVENT

SUBSEQUENT EVENT	3 Months Ended
	Apr. 30, 2017
SUBSEQUENT EVENT
SUBSEQUENT EVENT	NOTE 13 — SUBSEQUENT EVENT On June 4, 2017, the Company entered into a definitive agreement to sell its Waterworks business unit to Clayton, Dubilier & Rice, LLC. The purchase price of $2.5 billion is payable in cash at closing and may be adjusted for certain working capital calculations. The transaction is expected to close in the third quarter of fiscal 2017 subject to customary regulatory approvals. The Company expects to record an estimated pre-tax gain of approximately $1.0 billion upon closing. At April 30, 2017 and January 29, 2017, the carrying amounts of major classes of assets and liabilities of the Waterworks business unit were as follows (amounts in millions): April 30, January 29, Assets: Receivables, less allowance for doubtful accounts of $4 and $4 $ $ Inventories Property and equipment, net Goodwill and intangible assets, net Liabilities: Accounts payable $ $ Other current liabilities

NATURE OF BUSINESS AND BASIS 23

NATURE OF BUSINESS AND BASIS OF PRESENTATION (Policies)	3 Months Ended
	Apr. 30, 2017
NATURE OF BUSINESS AND BASIS OF PRESENTATION
Nature of Business	Nature of Business HD Supply Holdings, Inc. (‘‘Holdings’’) indirectly owns all of the outstanding common stock of HD Supply, Inc. (“HDS”). Holdings, together with its direct and indirect subsidiaries, including HDS (“HD Supply” or the “Company”), is one of the largest industrial distribution companies in North America. The Company specializes in three distinct market sectors: Maintenance, Repair & Operations; Infrastructure; and Specialty Construction. Through approximately 500 locations across 48 U.S. states and six Canadian provinces, the Company serves these markets with an integrated go-to-market strategy. HD Supply has approximately 14,000 associates delivering localized, customer-tailored products, services and expertise. The Company serves approximately 530,000 customers, which include contractors, maintenance professionals, industrial businesses, and government entities. HD Supply’s broad range of end-to-end product lines and services includes approximately 845,000 stock-keeping units (“SKUs”) of quality, name-brand and proprietary-brand products as well as value-add services supporting the entire life-cycle of a project from infrastructure and construction to maintenance, repair and operations. HD Supply is managed primarily on a product line basis and reports results of operations in three reportable segments. The reportable segments are Facilities Maintenance, Waterworks, and Construction & Industrial. In addition, the consolidated financial statements include Corporate, which is comprised of enterprise-wide functional departments.
Basis of Presentation	Basis of Presentation In management’s opinion, the unaudited financial information for the interim periods presented includes all adjustments necessary for a fair statement of the results of operations, financial position, and cash flows. All adjustments are of a normal recurring nature unless otherwise disclosed. Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year. For a more complete discussion of the Company’s significant accounting policies and other information, you should read this report in conjunction with the Company’s annual report on Form 10-K for the year ended January 29, 2017, which includes all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”).
Fiscal Year	F iscal Year HD Supply’s fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31. Fiscal years ending January 28, 2018 (“fiscal 2017”) and January 29, 2017 (“fiscal 2016”) both include 52 weeks. The three months ended April 30, 2017 (“first quarter 2017”) and May 1, 2016 (“first quarter 2016”) both include 13 weeks.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements of Holdings present the results of operations, financial position and cash flows of Holdings and its wholly-owned subsidiaries, including HDS. The consolidated financial statements of HDS present the results of operations, financial position and cash flows of HDS and its wholly-owned subsidiaries. All material intercompany balances and transactions are eliminated. Results of operations of businesses acquired are included from their respective dates of acquisition. The results of operations of all discontinued operations have been separately reported as discontinued operations for all periods presented.
Estimates	Estimates Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing these consolidated financial statements in conformity with GAAP. Actual results could differ from these estimates.
Self-Insurance	Self-Insurance HD Supply has a high deductible insurance program for most losses related to general liability, product liability, environmental liability, automobile liability, workers’ compensation, and is self-insured for medical claims, while maintaining per employee stop loss coverage, and certain legal claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Self-insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. At April 30, 2017 and January 29, 2017, self-insurance reserves totaled approximately $78 million and $79 million, respectively.

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)	3 Months Ended
	Apr. 30, 2017
DISCONTINUED OPERATIONS
Schedule of results of operations of discontinued operations	The following table provides additional detail related to the results of operations of the discontinued operations (amounts in millions): Three Months Ended April 30, May 1, Net sales $ — $ Cost of sales — Gross Profit — Operating expenses: Selling, general and administrative — Depreciation and amortization — Total operating expenses — Operating Income — — (Gain) loss on disposal of discontinued operations — — Income (loss) before provision for income taxes — — Provision (benefit) for income taxes — — Income (loss) from discontinued operations, net of tax $ — $ — The following table provides additional detail related to the net cash provided by operating and investing activities of the discontinued operations (amounts in millions): Three Months Ended April 30, May 1, Net cash flows from operating activities $ — $ Capital expenditures — — Net cash flows provided by (used in) investing activities $ — $ —

DEBT (Tables)

DEBT (Tables)	3 Months Ended
	Apr. 30, 2017
DEBT
Schedule of long-term debt	HDS’s long-term debt as of April 30, 2017 and January 29, 2017 consisted of the following (dollars in millions): April 30, 2017 January 29, 2017 Outstanding Interest Outstanding Interest Senior ABL Facility due 2022 $ $ Term B-1 Loans due 2021 Term B-2 Loans due 2024 December 2014 First Priority Notes due 2021 April 2016 Senior Unsecured Notes due 2024 Total gross long-term debt $ $ Less unamortized discount ) ) Less unamortized deferred financing costs ) ) Total net long-term debt $ $ Less current installments ) ) Total net long-term debt, excluding current installments $ $ (1) Represents the stated rate of interest, without including the effect of discounts or premiums.
5.25% December 2014 Secured First Priority Notes due 2021
DEBT
Schedule of notes redemption	Year Percentage 2017 % 2018 % 2019 % 2020 and thereafter %
5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Schedule of notes redemption	Year Percentage 2019 % 2020 % 2021 % 2022 and thereafter %

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Apr. 30, 2017
FAIR VALUE MEASUREMENTS
Schedule of financial instruments that are not reflected at fair value on the balance sheet	The Company’s financial instruments that are not reflected at fair value on the Consolidated Balance Sheets were as follows as of April 30, 2017 and January 29, 2017 (amounts in millions): As of April 30, 2017 As of January 29, 2017 Recorded Estimated Recorded Estimated Senior ABL Facility $ $ $ $ Term Loans and Notes Total $ $ $ $ (1) These amounts do not include accrued interest; accrued interest is classified as Other current liabilities in the accompanying Consolidated Balance Sheets. These amounts do not include any related discounts, premiums, or deferred financing costs.

BASIC AND DILUTED WEIGHTED AV27

BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES (Tables)	3 Months Ended
	Apr. 30, 2017
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES
Schedule of reconciliation of basic to diluted weighted-average common shares	The reconciliation of basic to diluted weighted average common shares for the three months ended April 30, 2017 and May 1, 2016 was as follows (in thousands): Three Months Ended April 30, 2017 May 1, 2016 Weighted-average common shares Effect of potentially dilutive stock plan securities — Diluted weighted-average common shares Stock plan securities excluded from dilution (1) (1) Represents securities not included in the computation of diluted earnings per share because their effect would have been anti-dilutive.

SUPPLEMENTAL BALANCE SHEET AN28

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION (Tables)	3 Months Ended
	Apr. 30, 2017
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION
Schedule of receivables	Receivables as of April 30, 2017 and January 29, 2017 consisted of the following (amounts in millions): April 30, January 29, Trade receivables, net of allowance for doubtful accounts $ $ Vendor rebate receivables Other receivables Total receivables, net $ $
Schedule of other current liabilities	Other current liabilities as of April 30, 2017 and January 29, 2017 consisted of the following (amounts in millions): HD Supply Holdings, Inc. HD Supply, Inc. April 30, January 29, April 30, January Accrued interest $ $ $ $ Accrued non-income taxes Other Total other current liabilities $ $ $ $

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Apr. 30, 2017
SEGMENT INFORMATION
Schedule of net sales, Adjusted EBITDA, and other measures for each of the reportable segments and total continuing operations	The following tables present Net sales, Adjusted EBITDA, and other measures for each of the reportable segments and total continuing operations for the periods indicated (amounts in millions): Facilities Waterworks Construction Corporate Total Three Months Ended April 30, 2017 Net sales $ $ $ $ ) $ Adjusted EBITDA ) Depreciation(1) & Software Amortization Other Intangible Amortization — — Three Months Ended May 1, 2016 Net sales $ $ $ $ ) $ Adjusted EBITDA ) Depreciation(1) & Software Amortization Other Intangible Amortization — (1) Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations.
Schedule of reconciliation of adjusted EBITDA to income (loss) from continuing operations	Three Months Ended April 30, 2017 May 1, 2016 Total Adjusted EBITDA $ $ Depreciation and amortization(1) Stock-based compensation Restructuring — Other — ) Operating income Interest expense, net Loss on extinguishment of debt(2) Other (income) expense, net — Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) Provision (benefit) for income taxes ) Income (loss) from continuing operations ) Less Income from discontinued operations, net of tax — — Net income (loss) $ $ ) (1) Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. (2) Represents the loss on extinguishment of debt including the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt.

SUBSIDIARY GUARANTORS (Tables)

SUBSIDIARY GUARANTORS (Tables)	3 Months Ended
	Apr. 30, 2017
SUBSIDIARY GUARANTORS
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)	The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed statements of operations and comprehensive income, the condensed balance sheets and the condensed statements of cash flows for the Debt Issuer, for the Subsidiary Guarantors and the Non-guarantor Subsidiaries and total consolidated Debt Issuer and subsidiaries (amounts in millions). CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Three Months Ended April 30, 2017 Debt Subsidiary Non-Guarantor Elim- Total Net Sales $ — $ $ $ ) $ Cost of sales — ) Gross Profit — — Operating expenses: Selling, general and administrative — Depreciation and amortization — — Restructuring — — — — — Total operating expenses — Operating Income (Loss) ) — Interest expense ) Interest (income) ) ) — — Net (earnings) loss of equity affiliates ) — — — Loss on extinguishment of debt — — — Other (income) expense, net — — — Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) Provision (benefit) for income taxes — — Income (Loss) from Continuing Operations ) Income (loss) from discontinued operations, net of tax — — — — — Net Income (Loss) $ $ $ $ ) $ Other comprehensive income—foreign currency translation adjustment — ) Total Comprehensive Income (Loss) $ $ $ $ ) $ Three Months Ended May 1, 2016 Debt Subsidiary Non- Elim- Total Net Sales $ — $ $ $ — $ Cost of sales — — Gross Profit — — Operating expenses: Selling, general and administrative — Depreciation and amortization — — Restructuring — — Total operating expenses — Operating Income (Loss) ) — Interest expense — ) Interest (income) ) ) — — Net (earnings) loss of equity affiliates ) — — — Loss on extinguishment of debt — — — Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) ) ) Provision (benefit) for income taxes ) — — — ) Income (Loss) from Continuing Operations ) ) ) Income (loss) from discontinued operations, net of tax — — — — — Net Income (Loss) $ ) $ $ $ ) $ ) Other comprehensive income—foreign currency translation adjustment — ) Total Comprehensive Income (Loss) $ ) $ $ $ ) $ )
CONDENSED CONSOLIDATING BALANCE SHEETS	The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed statements of operations and comprehensive income, the condensed balance sheets and the condensed statements of cash flows for the Debt Issuer, for the Subsidiary Guarantors and the Non-guarantor Subsidiaries and total consolidated Debt Issuer and subsidiaries (amounts in millions). CONDENSED CONSOLIDATING BALANCE SHEETS As of April 30, 2017 Debt Subsidiary Non- Elim- Total ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Receivables, net — Inventories — — Intercompany receivables — — ) — Other current assets — Total current assets ) Property and equipment, net — Goodwill — — — Intangible assets, net — — Deferred tax asset — ) Investment in subsidiaries — — ) — Intercompany notes receivable — ) — Other assets — — Total assets $ $ $ $ ) $ LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ Accrued compensation and benefits — Current installments of long-term debt — — — Intercompany payables — — ) — Other current liabilities — Total current liabilities ) Long-term debt, excluding current installments — — Deferred tax liabilities — — ) — Intercompany notes payable — ) — Other liabilities — Total liabilities ) Stockholder’s equity (deficit) ) ) Total liabilities and stockholder’s equity (deficit) $ $ $ $ ) $ As of January 29, 2017 Debt Subsidiary Non- Elim- Total ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ Receivables, net — Inventories — — Intercompany receivables — — ) — Other current assets — Total current assets ) Property and equipment, net — Goodwill — — — Intangible assets, net — — Deferred tax asset — ) Investment in subsidiaries — — ) — Intercompany notes receivable — ) — Other assets — — Total assets $ $ $ $ ) $ LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ Accrued compensation and benefits — Current installments of long-term debt — — — Intercompany payables — — ) — Other current liabilities — Total current liabilities ) Long-term debt, excluding current installments — — Deferred tax liabilities — — ) — Intercompany notes payable — ) — Other liabilities — Total liabilities ) Stockholder’s equity (deficit) ) ) Total liabilities and stockholder’s equity (deficit) $ $ $ $ ) $
CONDENSED CONSOLIDATING CASH FLOW STATEMENTS	The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed statements of operations and comprehensive income, the condensed balance sheets and the condensed statements of cash flows for the Debt Issuer, for the Subsidiary Guarantors and the Non-guarantor Subsidiaries and total consolidated Debt Issuer and subsidiaries (amounts in millions). CONDENSED CONSOLIDATING CASH FLOW STATEMENTS Three Months Ended April 30, 2017 Debt Subsidiary Non- Elim- Total Net cash flows from operating activities $ $ ) $ — $ — $ Cash flows from investing activities Capital expenditures ) ) — — ) Proceeds from sales of property and equipment Proceeds from (payments of) intercompany notes — — ) — Net cash flows from investing activities $ ) $ $ — $ ) $ ) Cash flows from financing activities Borrowings of (repayments of) intercompany notes ) — — — Repayments of long-term debt ) — — — ) Borrowings on long-term revolver debt — — — Repayments on long-term revolver debt ) — ) — ) Debt issuance costs ) — — — ) Other financing activities — — — Net cash flows from financing activities ) — ) ) Effect of exchange rates on cash — — — — — Net increase (decrease) in cash & cash equivalents $ ) $ $ ) $ — $ ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $ Three Months Ended May 1, 2016 Debt Subsidiary Non- Elim- Total Net cash flows from operating activities $ $ ) $ — $ — $ Cash flows from investing activities Capital expenditures ) ) — — ) Proceeds from (payments of) intercompany notes — — ) — Other investing activities ) — — — Net cash flows from investing activities $ ) $ $ — $ ) $ ) Cash flows from financing activities Borrowings of (repayments of) intercompany notes ) — — — Borrowings of long-term debt — — — Repayments of long-term debt ) — — — ) Debt issuance costs ) — — — ) Other financing activities ) ) — — ) Net cash flows from financing activities ) ) — ) Effect of exchange rates on cash — — — Net increase (decrease) in cash & cash equivalents $ ) $ ) $ $ — $ ) Cash and cash equivalents at beginning of period — Cash and cash equivalents at end of period $ $ $ $ — $

SUBSEQUENT EVENT (Tables)

SUBSEQUENT EVENT (Tables)	3 Months Ended
	Apr. 30, 2017
Subsequent Event
Schedule of carrying amounts of major classes of assets and liabilities	The following table provides additional detail related to the results of operations of the discontinued operations (amounts in millions): Three Months Ended April 30, May 1, Net sales $ — $ Cost of sales — Gross Profit — Operating expenses: Selling, general and administrative — Depreciation and amortization — Total operating expenses — Operating Income — — (Gain) loss on disposal of discontinued operations — — Income (loss) before provision for income taxes — — Provision (benefit) for income taxes — — Income (loss) from discontinued operations, net of tax $ — $ — The following table provides additional detail related to the net cash provided by operating and investing activities of the discontinued operations (amounts in millions): Three Months Ended April 30, May 1, Net cash flows from operating activities $ — $ Capital expenditures — — Net cash flows provided by (used in) investing activities $ — $ —
Waterworks business
Subsequent Event
Schedule of carrying amounts of major classes of assets and liabilities	April 30, January 29, Assets: Receivables, less allowance for doubtful accounts of $4 and $4 $ $ Inventories Property and equipment, net Goodwill and intangible assets, net Liabilities: Accounts payable $ $ Other current liabilities

NATURE OF BUSINESS AND BASIS 32

NATURE OF BUSINESS AND BASIS OF PRESENTATION - Nature of Business (Details)	3 Months Ended
	Apr. 30, 2017segmentproductlocationitemcustomeremployee
Nature of Business
Number of distinct market sectors in which entity specializes | item	3
Number of operating locations	500
Number of associates | employee	14,000
Number of customers | customer	530,000
Number of SKUs offered | product	845,000
Number of reportable segments | segment	3
U.S.
Nature of Business
Number of states or provinces	48
Canada
Nature of Business
Number of states or provinces	6

NATURE OF BUSINESS AND BASIS 33

NATURE OF BUSINESS AND BASIS OF PRESENTATION - Fiscal Year (Details)	3 Months Ended		12 Months Ended
	Apr. 30, 2017	May 01, 2016	Jan. 28, 2018	Jan. 29, 2017
NATURE OF BUSINESS AND BASIS OF PRESENTATION
Length of some fiscal years, minimum (in days)	364 days
Length of some fiscal years, maximum (in days)	371 days
Length of fiscal year (in days)			364 days	364 days
Length of fiscal quarter (in days)	91 days	91 days

NATURE OF BUSINESS AND BASIS 34

NATURE OF BUSINESS AND BASIS OF PRESENTATION - Self-Insurance (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
NATURE OF BUSINESS AND BASIS OF PRESENTATION
Self-insurance reserves	$ 78	$ 79

DISCONTINUED OPERATIONS - Resul

DISCONTINUED OPERATIONS - Results of Operations (Details) - Discontinued Operations, Held-for-sale or Disposed of by Sale $ in Millions	3 Months Ended
	May 01, 2016USD ($)
Results of operations of the discontinued operations
Net Sales	$ 63
Cost of sales	47
Gross Profit	16
Operating expenses:
Selling, general and administrative	15
Depreciation and amortization	1
Total operating expenses	$ 16

DISCONTINUED OPERATIONS - Net C

DISCONTINUED OPERATIONS - Net Cash Provided by Operating Activities and Investing Activities (Details) $ in Millions	3 Months Ended
	May 01, 2016USD ($)
Discontinued Operations, Held-for-sale or Disposed of by Sale
Net cash provided by operating and investing activities of the discontinued operations
Net cash flows from operating activities	$ 1

DEBT - Gross Long-term Debt - O

DEBT - Gross Long-term Debt - Outstanding Principal - Tabular Disclosure (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
DEBT
Total gross long-term debt	$ 3,773	$ 3,859
Secured debt | HDS (Debt Issuer) | 5.25% December 2014 Secured First Priority Notes due 2021
DEBT
Total gross long-term debt	1,250	1,250
Secured debt | HDS (Debt Issuer) | Credit facility | Senior ABL Facility due 2022
DEBT
Total gross long-term debt	439	421
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-1 Loan Facility due 2021
DEBT
Total gross long-term debt	537	639
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-2 Loan Facility due 2024
DEBT
Total gross long-term debt	547	549
Unsecured debt | HDS (Debt Issuer) | 5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Total gross long-term debt	$ 1,000	$ 1,000

DEBT - Gross Long-term Debt - I

DEBT - Gross Long-term Debt - Interest Rate - Tabular Disclosure (Details) - HDS (Debt Issuer)	Apr. 30, 2017	Jan. 29, 2017
Secured debt | 5.25% December 2014 Secured First Priority Notes due 2021
DEBT
Interest rate, stated rate (as a percent)	5.25%	5.25%
Secured debt | Credit facility | Senior ABL Facility due 2022
DEBT
Interest rate, rate at end of period (as a percent)	2.65%	2.38%
Secured debt | Credit facility | Term B-1 Loan Facility due 2021
DEBT
Interest rate, rate at end of period (as a percent)	3.90%	3.75%
Secured debt | Credit facility | Term B-2 Loan Facility due 2024
DEBT
Interest rate, rate at end of period (as a percent)	3.90%	3.75%
Unsecured debt | 5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Interest rate, stated rate (as a percent)	5.75%	5.75%

DEBT - Total Net Long-term Debt

DEBT - Total Net Long-term Debt - Tabular Disclosure (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
DEBT
Total gross long-term debt	$ 3,773	$ 3,859
Less unamortized discount	(8)	(9)
Less unamortized deferred financing costs	(35)	(38)
Total net long-term debt	$ 3,730	$ 3,812

DEBT - Total Long-term Debt, Ex

DEBT - Total Long-term Debt, Excluding Current Installments - Tabular Disclosure (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
DEBT
Total net long-term debt	$ 3,730	$ 3,812
Less current installments	(14)	(14)
Total net long-term debt, excluding current installments	$ 3,716	$ 3,798

DEBT - Term Loan Facility (Deta

DEBT - Term Loan Facility (Details) - Secured debt - HDS (Debt Issuer) - Credit facility - USD ($) $ in Millions	Apr. 18, 2017	Apr. 05, 2017	Apr. 30, 2017
Term B-1 Loan Facility due 2021
DEBT
Payment of debt	$ 100		$ 100
Aggregate principal amount	842
Loss on extinguishment & modification of debt	2
Write-off of unamortized deferred financing cost	$ 1
Senior ABL Facility due 2022
DEBT
Aggregate principal amount			$ 1,500
Loss on extinguishment & modification of debt		$ 1
Write-off of unamortized deferred financing cost		$ 1

DEBT - Senior ABL Facility (Det

DEBT - Senior ABL Facility (Details) - Secured debt - HDS (Debt Issuer) - Credit facility - Senior ABL Facility due 2022 $ in Millions	Apr. 30, 2017USD ($)	Apr. 30, 2017USD ($)facility
DEBT
Aggregate principal amount	$ 1,500	$ 1,500
Line of credit facility, additional available for borrowing	795	795
Letter of credit facility outstanding	30	30
Line of credit facility, available for borrowing on qualifying cash balances	123	$ 123
Proceeds from Senior ABL Facility	439
The minimum number of incremental term loan facilities permitted to be included in the Senior ABL Facility | facility		1
The minimum number of revolving credit facility commitments permitted to be included in the Senior ABL Facility | facility		1
Canada
DEBT
Proceeds from Senior ABL Facility	$ 58

DEBT - Senior Term Loan Facilit

DEBT - Senior Term Loan Facility (Details) - Secured debt - HDS (Debt Issuer) - Credit facility $ in Millions	3 Months Ended
	Apr. 30, 2017USD ($)	Apr. 18, 2017USD ($)
Term Loan Facility
DEBT
Aggregate principal amount	$ 1,392
Term B-1 Loan Facility due 2021
DEBT
Aggregate principal amount		$ 842
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent)	1.00%
Term B-2 Loan Facility due 2023
DEBT
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent)	1.00%
LIBOR | Term B-1 Loan Facility due 2021
DEBT
Percentage added to reference rate (as a percent)	2.75%
LIBOR | Term B-2 Loan Facility due 2023
DEBT
Percentage added to reference rate (as a percent)	2.75%
Base | Term B-1 Loan Facility due 2021
DEBT
Percentage added to reference rate (as a percent)	1.75%
Base | Term B-2 Loan Facility due 2023
DEBT
Percentage added to reference rate (as a percent)	1.75%
Minimum | LIBOR | Term B-2 Loan Facility due 2023
DEBT
Percentage added to reference rate (as a percent)	2.50%
Maximum | Term B-2 Loan Facility due 2023
DEBT
Leverage ratio	3

DEBT - 5.25% Senior Secured Fir

DEBT - 5.25% Senior Secured First Priority Notes due 2021 (Details) - Secured debt - HDS (Debt Issuer) - 5.25% December 2014 Secured First Priority Notes due 2021	3 Months Ended
	Apr. 30, 2017	Jan. 29, 2017
DEBT
Note issued, interest rate	5.25%	5.25%
Collateral pledged, percentage outstanding capital of any foreign subsidiary	65.00%
Prior to December 15, 2017
DEBT
Optional prepayment price percentage	100.00%
Percentage limit on amount that can be redeemed	40.00%
Prepayment percentage price as a percent of the principal, with proceeds from certain equity offerings	105.25%
Threshold percentage for debt that must remain after each redemption	50.00%
2,017
DEBT
Optional prepayment price percentage	103.938%
2,018
DEBT
Optional prepayment price percentage	102.625%
2,019
DEBT
Optional prepayment price percentage	101.313%
2020 and thereafter
DEBT
Optional prepayment price percentage	100.00%

DEBT - 5.75% Senior Unsecured N

DEBT - 5.75% Senior Unsecured Notes due 2024 (Details) - Unsecured debt - HDS (Debt Issuer)	3 Months Ended
	Apr. 30, 2017	Jan. 29, 2017
5.25% April 2016 Senior Unsecured Notes due 2024
DEBT
Note issued, interest rate	5.25%
5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Note issued, interest rate	5.75%	5.75%
Prior to April 15, 2019 | 5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Optional prepayment price percentage	100.00%
Percentage limit on amount that can be redeemed	40.00%
Prepayment percentage price as a percent of the principal, with proceeds from certain equity offerings	105.75%
Threshold percentage for debt that must remain after each redemption	50.00%
2019 | 5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Optional prepayment price percentage	104.313%
2020 | 5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Optional prepayment price percentage	102.875%
2021 | 5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Optional prepayment price percentage	101.438%
2022 and thereafter | 5.75% April 2016 Senior Unsecured Notes due 2024
DEBT
Optional prepayment price percentage	100.00%

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
Recorded Amount
Financial instruments not reflected at fair value on the balance sheet
Senior ABL Facility	$ 439	$ 421
Term Loans and Notes	3,334	3,438
Total	3,773	3,859
Estimated Fair Value | Level 2
Financial instruments not reflected at fair value on the balance sheet
Senior ABL Facility	433	410
Term Loans and Notes	3,477	3,572
Total	$ 3,910	$ 3,982

INCOME TAXES - Tax items (Detai

INCOME TAXES - Tax items (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016	Jan. 29, 2017
INCOME TAXES
Combined federal, state and foreign effective tax rate for continuing operations (benefit)	30.30%	(36.40%)
Unrecognized tax benefits			$ 10
Net accrual for interest and penalties related to unrecognized tax benefits	$ 0		0
Deferred tax assets, valuation allowance	$ 5		$ 5

INCOME TAXES - ASU No. 2016-09

INCOME TAXES - ASU No. 2016-09 (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
New Accounting Pronouncements or Change in Accounting Principle
Net Income tax Expense (Benefit)	$ (37)	$ 8
ASU No. 2016-09
New Accounting Pronouncements or Change in Accounting Principle
Net Income tax Expense (Benefit)	$ 11
Change in effective tax rate	(9.00%)

BASIC AND DILUTED WEIGHTED-AVER

BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES - Reconciliation of Basic to Diluted Weighted Average Common Shares (Details) - shares shares in Thousands	3 Months Ended
	Apr. 30, 2017	May 01, 2016
Reconciliation of basic to diluted weighted-average common shares
Weighted-average common shares	200,708	198,808
Effect of potentially dilutive stock plan securities	2,309
Diluted weighted-average common shares	203,017	198,808

BASIC AND DILUTED WEIGHTED-AV50

BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES - Anti-dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Apr. 30, 2017	May 01, 2016
Anti-dilutive securities
Stock plan securities excluded from dilution	1,294	7,358

SUPPLEMENTAL BALANCE SHEET AN51

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Receivables (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
Receivables
Trade receivables, net of allowance for doubtful accounts	$ 940	$ 804
Vendor rebate receivables	66	89
Other receivables	9	11
Total receivables, net	$ 1,015	$ 904

SUPPLEMENTAL BALANCE SHEET AN52

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Other Current Liabilities (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017
Other Current Liabilities
Accrued interest	$ 32	$ 30
Accrued non-income taxes	41	31
Other	83	96
Total other current liabilities	156	157
HD Supply, Inc. (Total HDS)
Other Current Liabilities
Accrued interest	32	30
Accrued non-income taxes	41	31
Other	81	96
Total other current liabilities	$ 154	$ 157

SUPPLEMENTAL BALANCE SHEET AN53

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
Supplemental Cash Flow Information
Cash paid for interest	$ 44	$ 119
Cash paid for income taxes, net of refunds	$ 3	$ 1

SUPPLEMENTAL BALANCE SHEET AN54

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Supplemental Debt Information (Details) - USD ($) $ in Millions	Apr. 18, 2017	Apr. 30, 2017	May 01, 2016
Supplemental Cash Flow Information
Payment of debt issuance cost		$ 5	$ 14
HDS (Debt Issuer)
Supplemental Cash Flow Information
Payment of debt issuance cost		5	$ 14
Term B-1 Loan Facility due 2021 | HDS (Debt Issuer) | Secured debt | Credit facility
Supplemental Cash Flow Information
Payment of debt issuance cost		4
Payment of debt	$ 100	$ 100

SUPPLEMENTAL BALANCE SHEET AN55

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Significant Non-Cash Transactions (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Apr. 30, 2017	Jan. 29, 2017
Significant Non-Cash Transactions
Retired common stock (in shares)	611,433
Retired common stock	$ 23
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01

SUPPLEMENTAL BALANCE SHEET AN56

SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Build-to-Suit Lease (Details) $ in Millions	Apr. 30, 2017USD ($)
Construction in progress
Build-to-Suit Lease
Build-to-suit assets in construction in progress	$ 26
Other long-term liabilities
Build-to-Suit Lease
Financial obligation of construction in progress	$ 26

RESTRUCTURING ACTIVITIES - Rest

RESTRUCTURING ACTIVITIES - Restructuring Liability Activity (Details) - USD ($) $ in Millions	3 Months Ended
	May 01, 2016	Apr. 30, 2017	Jan. 29, 2017
Activity for the liability balances for restructuring
Restructuring charges	$ 7
Restructuring activities resulting from the sale of a business unit in October 2015
Activity for the liability balances for restructuring
Restructuring charges	$ 7
Restructuring activities resulting from the sale of a business unit in October 2015 | Other current liabilities
Activity for the liability balances for restructuring
Liability balance for restructuring activities		$ 4	$ 5

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	Apr. 30, 2017USD ($)
Minimum
Legal Matters
Estimated aggregate potential loss	$ 0
Maximum
Legal Matters
Estimated aggregate potential loss	$ 10

SEGMENT INFORMATION - General I

SEGMENT INFORMATION - General Information (Details)	3 Months Ended
	Apr. 30, 2017segment
SEGMENT INFORMATION
Number of reportable segments	3

SEGMENT INFORMATION - Net Sales

SEGMENT INFORMATION - Net Sales for Each Reportable Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
SEGMENT INFORMATION
Net Sales	$ 1,873	$ 1,781
Corporate
SEGMENT INFORMATION
Net Sales	(2)	(2)
Facilities Maintenance | Reportable segment
SEGMENT INFORMATION
Net Sales	682	677
Waterworks business | Reportable segment
SEGMENT INFORMATION
Net Sales	657	605
Construction & Industrial | Reportable segment
SEGMENT INFORMATION
Net Sales	$ 536	$ 501

SEGMENT INFORMATION - Adjusted

SEGMENT INFORMATION - Adjusted EBITDA, Depreciation & Software Amortization, Other Intangible Amortization for Each Reportable Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
SEGMENT INFORMATION
Adjusted EBITDA	$ 207	$ 215
Depreciation & Software Amortization	22	21
Other Intangible Amortization	3	4
Corporate
SEGMENT INFORMATION
Adjusted EBITDA	(16)	(16)
Depreciation & Software Amortization	3	3
Other Intangible Amortization	2	2
Facilities Maintenance | Reportable segment
SEGMENT INFORMATION
Adjusted EBITDA	117	134
Depreciation & Software Amortization	7	8
Other Intangible Amortization	1	1
Waterworks business | Reportable segment
SEGMENT INFORMATION
Adjusted EBITDA	51	48
Depreciation & Software Amortization	3	2
Other Intangible Amortization		1
Construction & Industrial | Reportable segment
SEGMENT INFORMATION
Adjusted EBITDA	55	49
Depreciation & Software Amortization	$ 9	$ 8

SEGMENT INFORMATION - Reconcili

SEGMENT INFORMATION - Reconciliation to Consolidated Financial Statements (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
SEGMENT INFORMATION
Total Adjusted EBITDA	$ 207	$ 215
Depreciation and amortization	25	25
Stock-based compensation	6	6
Restructuring		7
Other		(1)
Operating Income	176	178
Interest expense, net	49	85
Loss on extinguishment of debt	3	115
Other (income) expense, net	2
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	122	(22)
Provision (benefit) for income taxes	37	(8)
Income (Loss) from Continuing Operations	85	(14)
Net income (loss)	$ 85	$ (14)

SUBSIDIARY GUARANTORS - General

SUBSIDIARY GUARANTORS - General Information (Details)	3 Months Ended
	Apr. 30, 2017
HDS (Debt Issuer)
SUBSIDIARY GUARANTORS
Period of notice to the applicable trustee to cause subsidiary guarantor to be released from subsidiary guarantee	30 days

SUBSIDIARY GUARANTORS - CONDENS

SUBSIDIARY GUARANTORS - CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales	$ 1,873	$ 1,781
Cost of sales	1,242	1,172
Gross Profit	631	609
Operating expenses:
Selling, general and administrative	431	401
Depreciation and amortization	24	23
Restructuring		7
Total operating expenses	455	431
Operating Income (Loss)	176	178
Interest expense	49	85
Loss on extinguishment of debt	3	115
Other (income) expense, net	2
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	122	(22)
Provision (benefit) for income taxes	37	(8)
Income (Loss) from Continuing Operations	85	(14)
Net Income (Loss)	85	(14)
Other comprehensive income (loss)- foreign currency translation adjustment	1	4
Total Comprehensive Income (Loss)	86	(10)
HDS (Debt Issuer)
Operating expenses:
Selling, general and administrative	21	20
Depreciation and amortization	4	3
Restructuring		1
Total operating expenses	25	24
Operating Income (Loss)	(25)	(24)
Interest expense	56	89
Interest (income)	(51)	(61)
Net (earnings) loss of equity affiliates	(155)	(145)
Loss on extinguishment of debt	3	115
Other (income) expense, net	2
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	120	(22)
Provision (benefit) for income taxes	35	(8)
Income (Loss) from Continuing Operations	85	(14)
Net Income (Loss)	85	(14)
Other comprehensive income (loss)- foreign currency translation adjustment	1	4
Total Comprehensive Income (Loss)	86	(10)
Subsidiary Guarantors.
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales	1,842	1,752
Cost of sales	1,226	1,156
Gross Profit	616	596
Operating expenses:
Selling, general and administrative	398	370
Depreciation and amortization	20	20
Restructuring		6
Total operating expenses	418	396
Operating Income (Loss)	198	200
Interest expense	51	61
Interest (income)	(8)	(4)
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	155	143
Provision (benefit) for income taxes	2
Income (Loss) from Continuing Operations	153	143
Net Income (Loss)	153	143
Total Comprehensive Income (Loss)	153	143
Non-Guarantor Subsidiaries
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales	32	29
Cost of sales	17	16
Gross Profit	15	13
Operating expenses:
Selling, general and administrative	12	11
Total operating expenses	12	11
Operating Income (Loss)	3	2
Interest expense	1
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	2	2
Income (Loss) from Continuing Operations	2	2
Net Income (Loss)	2	2
Other comprehensive income (loss)- foreign currency translation adjustment	1	4
Total Comprehensive Income (Loss)	3	6
HD Supply, Inc. (Total HDS)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales	1,873	1,781
Cost of sales	1,242	1,172
Gross Profit	631	609
Operating expenses:
Selling, general and administrative	431	401
Depreciation and amortization	24	23
Restructuring		7
Total operating expenses	455	431
Operating Income (Loss)	176	178
Interest expense	49	85
Loss on extinguishment of debt	3	115
Other (income) expense, net	2
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	122	(22)
Provision (benefit) for income taxes	37	(8)
Income (Loss) from Continuing Operations	85	(14)
Net Income (Loss)	85	(14)
Other comprehensive income (loss)- foreign currency translation adjustment	1	4
Total Comprehensive Income (Loss)	86	(10)
Eliminations
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Net Sales	(1)
Cost of sales	(1)
Operating expenses:
Interest expense	(59)	(65)
Interest (income)	59	65
Net (earnings) loss of equity affiliates	155	145
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	(155)	(145)
Income (Loss) from Continuing Operations	(155)	(145)
Net Income (Loss)	(155)	(145)
Other comprehensive income (loss)- foreign currency translation adjustment	(1)	(4)
Total Comprehensive Income (Loss)	$ (156)	$ (149)

SUBSIDIARY GUARANTORS - CONDE65

SUBSIDIARY GUARANTORS - CONDENSED CONSOLIDATING BALANCE SHEETS (Details) - USD ($) $ in Millions	Apr. 30, 2017	Jan. 29, 2017	May 01, 2016	Jan. 31, 2016
Current assets:
Cash and cash equivalents	$ 70	$ 75	$ 203	$ 269
Receivables, net	1,015	904
Inventories	913	831
Other current assets	40	37
Total current assets	2,038	1,847
Property and equipment, net	309	303
Goodwill	2,869	2,869
Intangible assets, net	109	112
Deferred tax asset	579	556
Other assets	22	20
Total assets	5,926	5,707
Current liabilities:
Accounts payable	721	532
Accrued compensation and benefits	84	140
Current installments of long-term debt	14	14
Other current liabilities	156	157
Total current liabilities	975	843
Long-term debt, excluding current installments	3,716	3,798
Other liabilities	112	106
Total liabilities	4,803	4,747
Stockholders' equity (deficit)	1,123	960
Total liabilities and stockholders' equity	5,926	5,707
Eliminations
Current assets:
Intercompany receivables	(1)	(1)
Total current assets	(1)	(1)
Deferred tax asset	(128)	(127)
Investment in subsidiaries	(3,624)	(2,451)
Intercompany notes receivable	(1,516)	(2,776)
Total assets	(5,269)	(5,355)
Current liabilities:
Intercompany payables	(1)	(1)
Total current liabilities	(1)	(1)
Deferred tax liabilities	(128)	(127)
Intercompany notes payable	(1,516)	(2,776)
Total liabilities	(1,645)	(2,904)
Stockholders' equity (deficit)	(3,624)	(2,451)
Total liabilities and stockholders' equity	(5,269)	(5,355)
HDS (Debt Issuer)
Current assets:
Cash and cash equivalents	30	51	169	233
Receivables, net	2	3
Other current assets	14	13
Total current assets	46	67
Property and equipment, net	81	76
Deferred tax asset	705	681
Investment in subsidiaries	3,624	2,451
Intercompany notes receivable	1,005	2,192
Other assets	18	16
Total assets	5,479	5,483
Current liabilities:
Accounts payable	12	13
Accrued compensation and benefits	29	38
Current installments of long-term debt	14	14
Other current liabilities	56	52
Total current liabilities	111	117
Long-term debt, excluding current installments	3,658	3,737
Intercompany notes payable	511	584
Other liabilities	92	87
Total liabilities	4,372	4,525
Stockholders' equity (deficit)	1,107	958
Total liabilities and stockholders' equity	5,479	5,483
Subsidiary Guarantors.
Current assets:
Cash and cash equivalents	18	17	17	18
Receivables, net	995	885
Inventories	895	813
Intercompany receivables	1	1
Other current assets	24	22
Total current assets	1,933	1,738
Property and equipment, net	225	225
Goodwill	2,869	2,869
Intangible assets, net	108	111
Intercompany notes receivable	511	584
Other assets	4	4
Total assets	5,650	5,531
Current liabilities:
Accounts payable	696	508
Accrued compensation and benefits	53	100
Other current liabilities	93	99
Total current liabilities	842	707
Deferred tax liabilities	128	127
Intercompany notes payable	1,005	2,192
Other liabilities	18	17
Total liabilities	1,993	3,043
Stockholders' equity (deficit)	3,657	2,488
Total liabilities and stockholders' equity	5,650	5,531
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	4	5	17	15
Receivables, net	18	16
Inventories	18	18
Other current assets	2	2
Total current assets	42	41
Property and equipment, net	3	2
Intangible assets, net	1	1
Deferred tax asset	2	2
Total assets	48	46
Current liabilities:
Accounts payable	13	11
Accrued compensation and benefits	2	2
Intercompany payables	1	1
Other current liabilities	5	6
Total current liabilities	21	20
Long-term debt, excluding current installments	58	61
Other liabilities	2	2
Total liabilities	81	83
Stockholders' equity (deficit)	(33)	(37)
Total liabilities and stockholders' equity	48	46
HD Supply, Inc. (Total HDS)
Current assets:
Cash and cash equivalents	52	73	$ 203	$ 266
Receivables, net	1,015	904
Inventories	913	831
Other current assets	40	37
Total current assets	2,020	1,845
Property and equipment, net	309	303
Goodwill	2,869	2,869
Intangible assets, net	109	112
Deferred tax asset	579	556
Other assets	22	20
Total assets	5,908	5,705
Current liabilities:
Accounts payable	721	532
Accrued compensation and benefits	84	140
Current installments of long-term debt	14	14
Other current liabilities	154	157
Total current liabilities	973	843
Long-term debt, excluding current installments	3,716	3,798
Other liabilities	112	106
Total liabilities	4,801	4,747
Stockholders' equity (deficit)	1,107	958
Total liabilities and stockholders' equity	$ 5,908	$ 5,705

SUBSIDIARY GUARANTORS - CONDE66

SUBSIDIARY GUARANTORS - CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Millions	3 Months Ended
	Apr. 30, 2017	May 01, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash flows from operating activities	$ 83	$ 76
Cash flows from investing activities
Capital expenditures	(24)	(17)
Proceeds from sales of property and equipment	2
Net cash provided by (used in) investing activities	(22)	(17)
Cash flows from financing activities
Borrowings of long-term debt		1,000
Repayments of long-term debt	(100)	(1,108)
Borrowings on long-term revolver debt	75
Repayments on long-term revolver debt	(55)
Debt issuance costs	(5)	(14)
Other financing activities	3	(2)
Net cash provided by (used in) financing activities	(66)	(127)
Effect of exchange rates on cash		2
Increase (decrease) in cash and cash equivalents	(5)	(66)
Cash and cash equivalents at beginning of period	75	269
Cash and cash equivalents at end of period	70	203
Eliminations
Cash flows from investing activities
Proceeds from (payments of) intercompany notes	(73)	(105)
Net cash provided by (used in) investing activities	(73)	(105)
Cash flows from financing activities
Borrowings from (repayments to) intercompany notes	73	105
Net cash provided by (used in) financing activities	73	105
HDS (Debt Issuer)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash flows from operating activities	139	169
Cash flows from investing activities
Capital expenditures	(6)	(4)
Other investing activities		(1)
Net cash provided by (used in) investing activities	(6)	(5)
Cash flows from financing activities
Borrowings from (repayments to) intercompany notes	(73)	(105)
Borrowings of long-term debt		1,000
Repayments of long-term debt	(100)	(1,108)
Borrowings on long-term revolver debt	75
Repayments on long-term revolver debt	(54)
Debt issuance costs	(5)	(14)
Other financing activities	3	(1)
Net cash provided by (used in) financing activities	(154)	(228)
Increase (decrease) in cash and cash equivalents	(21)	(64)
Cash and cash equivalents at beginning of period	51	233
Cash and cash equivalents at end of period	30	169
Subsidiary Guarantors.
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash flows from operating activities	(56)	(93)
Cash flows from investing activities
Capital expenditures	(18)	(13)
Proceeds from sales of property and equipment	2
Proceeds from (payments of) intercompany notes	73	105
Other investing activities		1
Net cash provided by (used in) investing activities	57	93
Cash flows from financing activities
Other financing activities		(1)
Net cash provided by (used in) financing activities		(1)
Increase (decrease) in cash and cash equivalents	1	(1)
Cash and cash equivalents at beginning of period	17	18
Cash and cash equivalents at end of period	18	17
Non-Guarantor Subsidiaries
Cash flows from financing activities
Repayments on long-term revolver debt	(1)
Net cash provided by (used in) financing activities	(1)
Effect of exchange rates on cash		2
Increase (decrease) in cash and cash equivalents	(1)	2
Cash and cash equivalents at beginning of period	5	15
Cash and cash equivalents at end of period	4	17
HD Supply, Inc. (Total HDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash flows from operating activities	83	76
Cash flows from investing activities
Capital expenditures	(24)	(17)
Proceeds from sales of property and equipment	2
Net cash provided by (used in) investing activities	(22)	(17)
Cash flows from financing activities
Borrowings of long-term debt		1,000
Repayments of long-term debt	(100)	(1,108)
Borrowings on long-term revolver debt	75
Repayments on long-term revolver debt	(55)
Debt issuance costs	(5)	(14)
Other financing activities	3	(2)
Net cash provided by (used in) financing activities	(82)	(124)
Effect of exchange rates on cash		2
Increase (decrease) in cash and cash equivalents	(21)	(63)
Cash and cash equivalents at beginning of period	73	266
Cash and cash equivalents at end of period	$ 52	$ 203

RECENT ACCOUNTING PRONOUNCEME67

RECENT ACCOUNTING PRONOUNCEMENTS (Details) $ in Millions	3 Months Ended
	Apr. 30, 2017USD ($)
ASU No. 2016-09
RECENT ACCOUNTING PRONOUNCEMENTS
Cumulative-effect adjustment to retained earnings	$ 56

SUBSEQUENT EVENT (Details)

SUBSEQUENT EVENT (Details) - Waterworks business - Discontinued Operations, Disposed of by Sale - USD ($) $ in Millions	Jun. 04, 2017	Apr. 30, 2017	Jan. 29, 2017
Assets:
Receivables, less allowance for doubtful accounts of $4 and $4		$ 404	$ 345
Inventories		274	226
Property and equipment, net		49	51
Goodwill and intangible assets, net		1,071	1,071
Allowance for doubtful accounts		4	4
Liabilities:
Accounts payable		319	212
Other current liabilities		$ 23	$ 46
Subsequent Event
Subsequent Event
Cash consideration	$ 2,500
Pre-tax gain on disposal of discontinued operations	$ 1,000