Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Nov. 03, 2019 | Dec. 06, 2019 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 3, 2019 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-35979 | |
Entity Registrant Name | HD SUPPLY HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-0486780 | |
Entity Address, Address Line One | 3400 Cumberland Boulevard SE | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339 | |
City Area Code | 770 | |
Local Phone Number | 852-9000 | |
Title of 12(b) Security | HD Supply Holdings, Inc. common stock, par value $0.01 per share | |
Trading Symbol | HDS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001573097 | |
Current Fiscal Year End Date | --02-02 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
HD Supply Holdings, Inc. | ||
Entity Common Stock, Shares Outstanding | 162,163,294 | |
HD Supply, Inc. (Total HDS) | ||
Entity File Number | 333-159809 | |
Entity Registrant Name | HD SUPPLY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2007383 | |
Entity Address, Address Line One | 3400 Cumberland Boulevard SE | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30339 | |
City Area Code | 770 | |
Local Phone Number | 852-9000 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,000 | |
Entity Central Index Key | 0001465264 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (HD Supply Holdings, Inc.) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
Net Sales | $ 1,644 | $ 1,612 | $ 4,761 | $ 4,601 |
Cost of sales | 1,004 | 983 | 2,903 | 2,798 |
Gross Profit | 640 | 629 | 1,858 | 1,803 |
Operating expenses: | ||||
Selling, general and administrative | 405 | 391 | 1,193 | 1,147 |
Depreciation and amortization | 26 | 25 | 77 | 72 |
Restructuring and separation | 4 | 2 | 9 | |
Total operating expenses | 435 | 416 | 1,272 | 1,228 |
Operating Income | 205 | 213 | 586 | 575 |
Interest expense | 27 | 32 | 83 | 101 |
Interest (income) | (1) | |||
Loss on extinguishment & modification of debt | 69 | 69 | ||
Income from Continuing Operations Before Provision for Income Taxes | 178 | 112 | 503 | 406 |
Provision for income taxes | 47 | 30 | 130 | 105 |
Income from Continuing Operations | 131 | 82 | 373 | 301 |
Income from discontinued operations, net of tax | 1 | 1 | 1 | |
Net Income | 132 | 82 | 374 | 302 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 2 | |||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (4) | (21) | (4) | |
Total Comprehensive Income | $ 132 | $ 78 | $ 353 | $ 300 |
Weighted Average Common Shares Outstanding (thousands) | ||||
Basic | 164,638 | 182,730 | 168,062 | 183,349 |
Diluted | 165,142 | 183,579 | 168,645 | 184,192 |
Basic Earnings Per Share(1): | ||||
Income from Continuing Operations (in dollars per share) | $ 0.80 | $ 0.45 | $ 2.22 | $ 1.64 |
Income from Discontinued Operations (in dollars per share) | 0.01 | 0.01 | 0.01 | |
Net Income | 0.80 | 0.45 | 2.23 | 1.65 |
Diluted Earnings Per Share(1): | ||||
Income from Continuing Operations (in dollars per share) | 0.79 | 0.45 | 2.21 | 1.63 |
Income from Discontinued Operations (in dollars per share) | 0.01 | 0.01 | 0.01 | |
Net Income | $ 0.80 | $ 0.45 | $ 2.22 | $ 1.64 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) (HD Supply Holdings, Inc.) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | |||
Unrealized loss on cash flow hedge, tax | $ 1 | $ 7 | $ 1 |
CONSOLIDATED BALANCE SHEETS (HD
CONSOLIDATED BALANCE SHEETS (HD Supply Holdings, Inc.) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 37 | $ 38 |
Receivables, less allowance for doubtful accounts of $19 and $18 | 863 | 732 |
Inventories | 802 | 766 |
Other current assets | 96 | 50 |
Total current assets | 1,798 | 1,586 |
Property and equipment, net | 397 | 370 |
Operating lease right of-use assets | 425 | |
Goodwill | 1,991 | 1,990 |
Intangible assets, net | 181 | 191 |
Net deferred tax asset | 2 | 78 |
Other assets | 13 | 18 |
Total assets | 4,807 | 4,233 |
Current liabilities: | ||
Accounts payable | 474 | 367 |
Accrued compensation and benefits | 87 | 109 |
Current installments of long-term debt | 11 | 11 |
Current lease liabilities | 115 | |
Other current liabilities | 220 | 259 |
Total current liabilities | 907 | 746 |
Long-term debt, excluding current installments | 2,138 | 2,129 |
Deferred tax liabilities | 15 | |
Long-term lease liabilities | 323 | |
Other liabilities | 96 | 77 |
Total liabilities | 3,479 | 2,952 |
Stockholders' equity: | ||
Common stock, par value $0.01; 1 billion shares authorized; 162.8 million and 170.7 million shares issued and outstanding at November 3, 2019 and February 3, 2019, respectively | 2 | 2 |
Paid-in capital | 4,092 | 4,067 |
Accumulated deficit | (1,201) | (1,572) |
Accumulated other comprehensive loss | (51) | (30) |
Treasury stock, at cost, 42.6 and 34.2 million shares at November 3, 2019 and February 3, 2019, respectively | (1,514) | (1,186) |
Total stockholders' equity | 1,328 | 1,281 |
Total liabilities and stockholders' equity | $ 4,807 | $ 4,233 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (HD Supply Holdings, Inc.) - USD ($) shares in Millions, $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
Receivables | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 19 | $ 18 |
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 | 162.8 | 170.7 |
Common stock, shares outstanding | 162.8 | 170.7 |
Treasury stock | ||
Treasury stock, shares | 42.6 | 34.2 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (HD Supply Holdings, Inc.) - USD ($) $ in Millions | 9 Months Ended | |
Nov. 03, 2019 | Oct. 28, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 374 | $ 302 |
Reconciliation of net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 83 | 78 |
Provision for uncollectibles | 7 | 9 |
Non-cash interest expense | 5 | 15 |
Payment of discounts upon extinguishment of debt | (4) | |
Loss on extinguishment & modification of debt | 69 | |
Stock-based compensation expense | 18 | 19 |
Deferred income taxes | 102 | 97 |
Other | 2 | (1) |
Changes in assets and liabilities, net of the effects of acquisitions & dispositions: | ||
(Increase) decrease in receivables | (134) | (204) |
(Increase) decrease in inventories | (34) | (94) |
(Increase) decrease in other current assets | (2) | (3) |
Increase (decrease) in accounts payable and accrued liabilities | 76 | 95 |
Increase (decrease) in other long-term liabilities | 1 | |
Net cash provided by (used in) operating activities | 497 | 379 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (89) | (79) |
Payments for businesses acquired, net of cash acquired | (9) | (362) |
Proceeds from sales of property and equipment | 2 | |
Net cash provided by (used in) investing activities | (96) | (441) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchase of treasury shares | (320) | (166) |
Borrowings of long-term debt | 930 | |
Repayments of long-term debt | (8) | (1,240) |
Repayments of financing liabilities | (88) | |
Borrowings on long-term revolver debt | 978 | 100 |
Repayments on long-term revolver debt | (964) | (49) |
Proceeds from issuance of common stock under employee benefit plans | 7 | 7 |
Tax withholdings on stock-based awards | (6) | (6) |
Debt issuance costs | (18) | |
Other financing activities | (1) | (2) |
Net cash provided by (used in) financing activities | (402) | (444) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | (1) | (506) |
Cash and cash equivalents at beginning of period | 38 | 558 |
Cash and cash equivalents at end of period | $ 37 | $ 52 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (HD Supply Holdings, Inc.) - USD ($) shares in Thousands, $ in Millions | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total |
Beginning balance at Jan. 28, 2018 | $ 2 | $ 4,029 | $ (1,966) | $ (17) | $ (582) | |
Beginning balance (in shares) at Jan. 28, 2018 | 203,914 | (18,190) | ||||
Increase (decrease) in stockholders' equity | ||||||
Stock-based compensation | 19 | |||||
Shares issued under employee benefit plans | 7 | |||||
Shares issued under employee benefit plans (in shares) | 671 | |||||
Other | 1 | |||||
Net income | 302 | $ 302 | ||||
Foreign currency translation adjustment | 2 | 2 | ||||
Other | (1) | |||||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (4) | (4) | ||||
Purchase of common stock | $ (185) | |||||
Purchase of common stock (in shares) | (4,849) | |||||
Shares withheld for taxes | $ (7) | |||||
Shares withheld for taxes (in shares) | (174) | |||||
Ending balance at Oct. 28, 2018 | $ 2 | 4,055 | (1,663) | (20) | $ (774) | $ 1,600 |
Ending balance (in shares) at Oct. 28, 2018 | 204,585 | (23,213) | 181,372 | |||
Beginning balance at Jul. 29, 2018 | $ 2 | 4,047 | (1,745) | (15) | $ (681) | |
Beginning balance (in shares) at Jul. 29, 2018 | 204,564 | (20,778) | ||||
Increase (decrease) in stockholders' equity | ||||||
Stock-based compensation | 7 | |||||
Shares issued under employee benefit plans (in shares) | 21 | |||||
Other | 1 | |||||
Net income | 82 | $ 82 | ||||
Other | (1) | |||||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (4) | (4) | ||||
Purchase of common stock | $ (92) | |||||
Purchase of common stock (in shares) | (2,422) | |||||
Shares withheld for taxes | $ (1) | |||||
Shares withheld for taxes (in shares) | (13) | |||||
Ending balance at Oct. 28, 2018 | $ 2 | 4,055 | (1,663) | (20) | $ (774) | $ 1,600 |
Ending balance (in shares) at Oct. 28, 2018 | 204,585 | (23,213) | 181,372 | |||
Beginning balance at Feb. 03, 2019 | $ 2 | 4,067 | (1,572) | (30) | $ (1,186) | $ 1,281 |
Beginning balance (in shares) at Feb. 03, 2019 | 204,806 | (34,153) | ||||
Increase (decrease) in stockholders' equity | ||||||
Cumulative effect of accounting change | (3) | |||||
Stock-based compensation | 18 | |||||
Shares issued under employee benefit plans | 7 | |||||
Shares issued under employee benefit plans (in shares) | 597 | |||||
Net income | 374 | 374 | ||||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (21) | (21) | ||||
Purchase of common stock | $ (323) | |||||
Purchase of common stock (in shares) | (8,320) | |||||
Shares withheld for taxes | $ (5) | |||||
Shares withheld for taxes (in shares) | (127) | |||||
Ending balance at Nov. 03, 2019 | $ 2 | 4,092 | (1,201) | (51) | $ (1,514) | $ 1,328 |
Ending balance (in shares) at Nov. 03, 2019 | 205,403 | (42,600) | 162,803 | |||
Beginning balance at Aug. 04, 2019 | $ 2 | 4,086 | (1,332) | (51) | $ (1,274) | |
Beginning balance (in shares) at Aug. 04, 2019 | 205,409 | (36,338) | ||||
Increase (decrease) in stockholders' equity | ||||||
Stock-based compensation | 6 | |||||
Shares issued under employee benefit plans (in shares) | (6) | |||||
Other | (1) | |||||
Net income | 132 | $ 132 | ||||
Purchase of common stock | $ (240) | |||||
Purchase of common stock (in shares) | (6,254) | |||||
Shares withheld for taxes (in shares) | (8) | |||||
Ending balance at Nov. 03, 2019 | $ 2 | $ 4,092 | $ (1,201) | $ (51) | $ (1,514) | $ 1,328 |
Ending balance (in shares) at Nov. 03, 2019 | 205,403 | (42,600) | 162,803 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY ( Parenthetical) (HD Supply Holdings,Inc) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY | |||
Unrealized loss on cash flow hedge, tax | $ 1 | $ 7 | $ 1 |
CONSOLIDATED STATEMENTS OF OP_3
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (HD Supply, Inc.) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
Net Sales | $ 1,644 | $ 1,612 | $ 4,761 | $ 4,601 |
Cost of sales | 1,004 | 983 | 2,903 | 2,798 |
Gross Profit | 640 | 629 | 1,858 | 1,803 |
Operating expenses: | ||||
Selling, general and administrative | 405 | 391 | 1,193 | 1,147 |
Depreciation and amortization | 26 | 25 | 77 | 72 |
Restructuring and separation | 4 | 2 | 9 | |
Total operating expenses | 435 | 416 | 1,272 | 1,228 |
Operating Income | 205 | 213 | 586 | 575 |
Interest expense | 27 | 32 | 83 | 101 |
Interest (income) | (1) | |||
Loss on extinguishment & modification of debt | 69 | 69 | ||
Income from Continuing Operations Before Provision for Income Taxes | 178 | 112 | 503 | 406 |
Provision for income taxes | 47 | 30 | 130 | 105 |
Income from Continuing Operations | 131 | 82 | 373 | 301 |
Income from discontinued operations, net of tax | 1 | 1 | 1 | |
Net Income | 132 | 82 | 374 | 302 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 2 | |||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (4) | (21) | (4) | |
Total Comprehensive Income | 132 | 78 | 353 | 300 |
HD Supply, Inc. (Total HDS) | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||||
Net Sales | 1,644 | 1,612 | 4,761 | 4,601 |
Cost of sales | 1,004 | 983 | 2,903 | 2,798 |
Gross Profit | 640 | 629 | 1,858 | 1,803 |
Operating expenses: | ||||
Selling, general and administrative | 405 | 391 | 1,193 | 1,147 |
Depreciation and amortization | 26 | 25 | 77 | 72 |
Restructuring and separation | 4 | 2 | 9 | |
Total operating expenses | 435 | 416 | 1,272 | 1,228 |
Operating Income | 205 | 213 | 586 | 575 |
Interest expense | 27 | 32 | 83 | 101 |
Interest (income) | (1) | |||
Loss on extinguishment & modification of debt | 69 | 69 | ||
Income from Continuing Operations Before Provision for Income Taxes | 178 | 112 | 503 | 406 |
Provision for income taxes | 47 | 30 | 130 | 105 |
Income from Continuing Operations | 131 | 82 | 373 | 301 |
Income from discontinued operations, net of tax | 1 | 1 | 1 | |
Net Income | 132 | 82 | 374 | 302 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 2 | |||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (4) | (21) | (4) | |
Total Comprehensive Income | $ 132 | $ 78 | $ 353 | $ 300 |
CONSOLIDATED STATEMENTS OF OP_4
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) (HD Supply, Inc.) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
Unrealized gain (loss) on cash flow hedge | $ 1 | $ 7 | $ 1 |
HD Supply, Inc. (Total HDS) | |||
Unrealized gain (loss) on cash flow hedge | $ 1 | $ 7 | $ 1 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (HD Supply, Inc.) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 37 | $ 38 |
Receivables, less allowance for doubtful accounts of $19 and $18 | 863 | 732 |
Inventories | 802 | 766 |
Other current assets | 96 | 50 |
Total current assets | 1,798 | 1,586 |
Property and equipment, net | 397 | 370 |
Operating lease right of-use assets | 425 | |
Goodwill | 1,991 | 1,990 |
Intangible assets, net | 181 | 191 |
Net deferred tax asset | 2 | 78 |
Other assets | 13 | 18 |
Total assets | 4,807 | 4,233 |
Current liabilities: | ||
Accounts payable | 474 | 367 |
Accrued compensation and benefits | 87 | 109 |
Current installments of long-term debt | 11 | 11 |
Current lease liabilities | 115 | |
Other current liabilities | 220 | 259 |
Total current liabilities | 907 | 746 |
Long-term debt, excluding current installments | 2,138 | 2,129 |
Deferred tax liabilities | 15 | |
Long-term lease liabilities | 323 | |
Other liabilities | 96 | 77 |
Total liabilities | 3,479 | 2,952 |
Stockholders' equity: | ||
Common stock, par value $0.01; authorized 1,000 shares; issued and outstanding 1,000 shares at November 3, 2019 and February 3, 2019 | 2 | 2 |
Paid-in capital | 4,092 | 4,067 |
Accumulated deficit | (1,201) | (1,572) |
Accumulated other comprehensive loss | (51) | (30) |
Total stockholders' equity | 1,328 | 1,281 |
Total liabilities and stockholders' equity | 4,807 | 4,233 |
HD Supply, Inc. (Total HDS) | ||
Current assets: | ||
Cash and cash equivalents | 37 | 38 |
Receivables, less allowance for doubtful accounts of $19 and $18 | 863 | 732 |
Inventories | 802 | 766 |
Other current assets | 96 | 50 |
Total current assets | 1,798 | 1,586 |
Property and equipment, net | 397 | 370 |
Operating lease right of-use assets | 425 | |
Goodwill | 1,991 | 1,990 |
Intangible assets, net | 181 | 191 |
Net deferred tax asset | 2 | 78 |
Other assets | 13 | 18 |
Total assets | 4,807 | 4,233 |
Current liabilities: | ||
Accounts payable | 474 | 367 |
Accrued compensation and benefits | 87 | 109 |
Current installments of long-term debt | 11 | 11 |
Current lease liabilities | 115 | |
Other current liabilities | 216 | 257 |
Total current liabilities | 903 | 744 |
Long-term debt, excluding current installments | 2,138 | 2,129 |
Deferred tax liabilities | 15 | |
Long-term lease liabilities | 323 | |
Other liabilities | 96 | 77 |
Total liabilities | 3,475 | 2,950 |
Stockholders' equity: | ||
Common stock, par value $0.01; authorized 1,000 shares; issued and outstanding 1,000 shares at November 3, 2019 and February 3, 2019 | 0 | 0 |
Paid-in capital | 2,425 | 2,726 |
Accumulated deficit | (1,042) | (1,413) |
Accumulated other comprehensive loss | (51) | (30) |
Total stockholders' equity | 1,332 | 1,283 |
Total liabilities and stockholders' equity | $ 4,807 | $ 4,233 |
CONSOLIDATED BALANCE SHEETS (_3
CONSOLIDATED BALANCE SHEETS (Parenthetical) (HD Supply, Inc.) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
Receivables | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 19 | $ 18 |
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 | 162,800,000 | 170,700,000 |
Common stock, shares outstanding | 162,800,000 | 170,700,000 |
HD Supply, Inc. (Total HDS) | ||
Receivables | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 19 | $ 18 |
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 CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (HD Supply, Inc.) - USD ($) $ in Millions | 9 Months Ended | |
Nov. 03, 2019 | Oct. 28, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 374 | $ 302 |
Reconciliation of net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 83 | 78 |
Provision for uncollectibles | 7 | 9 |
Non-cash interest expense | 5 | 15 |
Payment of discounts upon extinguishment of debt | (4) | |
Loss on extinguishment & modification of debt | 69 | |
Stock-based compensation expense | 18 | 19 |
Deferred income taxes | 102 | 97 |
Other | 2 | (1) |
Changes in assets and liabilities, net of the effects of acquisitions & dispositions: | ||
(Increase) decrease in receivables | (134) | (204) |
(Increase) decrease in inventories | (34) | (94) |
(Increase) decrease in other current assets | (2) | (3) |
Increase (decrease) in accounts payable and accrued liabilities | 76 | 95 |
Increase (decrease) in other long-term liabilities | 1 | |
Net cash provided by (used in) operating activities | 497 | 379 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (89) | (79) |
Payments for businesses acquired, net of cash acquired | (9) | (362) |
Proceeds from sales of property and equipment | 2 | |
Net cash provided by (used in) investing activities | (96) | (441) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings of long-term debt | 930 | |
Repayments of long-term debt | (8) | (1,240) |
Repayments of financing liabilities | (88) | |
Borrowings on long-term revolver debt | 978 | 100 |
Repayments on long-term revolver debt | (964) | (49) |
Debt issuance costs | (18) | |
Other financing activities | (1) | (2) |
Net cash provided by (used in) financing activities | (402) | (444) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | (1) | (506) |
Cash and cash equivalents at beginning of period | 38 | 558 |
Cash and cash equivalents at end of period | 37 | 52 |
HD Supply, Inc. (Total HDS) | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 374 | 302 |
Reconciliation of net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 83 | 78 |
Provision for uncollectibles | 7 | 9 |
Non-cash interest expense | 5 | 15 |
Payment of discounts upon extinguishment of debt | (4) | |
Loss on extinguishment & modification of debt | 69 | |
Stock-based compensation expense | 18 | 19 |
Deferred income taxes | 102 | 97 |
Other | 2 | (1) |
Changes in assets and liabilities, net of the effects of acquisitions & dispositions: | ||
(Increase) decrease in receivables | (134) | (204) |
(Increase) decrease in inventories | (34) | (94) |
(Increase) decrease in other current assets | (2) | (3) |
Increase (decrease) in accounts payable and accrued liabilities | 76 | 95 |
Increase (decrease) in other long-term liabilities | 1 | |
Net cash provided by (used in) operating activities | 497 | 379 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (89) | (79) |
Payments for businesses acquired, net of cash acquired | (9) | (362) |
Proceeds from sales of property and equipment | 2 | |
Net cash provided by (used in) investing activities | (96) | (441) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Equity distribution to Parent | (319) | (172) |
Borrowings of long-term debt | 930 | |
Repayments of long-term debt | (8) | (1,240) |
Repayments of financing liabilities | (88) | |
Borrowings on long-term revolver debt | 978 | 100 |
Repayments on long-term revolver debt | (964) | (49) |
Debt issuance costs | (18) | |
Other financing activities | (1) | (2) |
Net cash provided by (used in) financing activities | (402) | (451) |
Increase (decrease) in cash and cash equivalents | (1) | (513) |
Cash and cash equivalents at beginning of period | 38 | 558 |
Cash and cash equivalents at end of period | $ 37 | $ 45 |
CONSOLIDATED STATEMENTS OF ST_3
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (HD Supply, Inc.) - USD ($) shares in Thousands, $ in Millions | HD Supply, Inc. (Total HDS)Common Stock | HD Supply, Inc. (Total HDS)Paid-in Capital | HD Supply, Inc. (Total HDS)Accumulated Deficit | HD Supply, Inc. (Total HDS)Accumulated Other Comprehensive Income (Loss) | HD Supply, Inc. (Total HDS) | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning balance at Jan. 28, 2018 | $ 3,290 | $ (1,807) | $ (17) | $ 2 | $ 4,029 | $ (1,966) | $ (17) | |||
Beginning balance (in shares) at Jan. 28, 2018 | 1 | 203,914 | ||||||||
Increase (decrease) in stockholders' equity | ||||||||||
Equity distribution to Parent | (172) | |||||||||
Stock-based compensation | 19 | 19 | ||||||||
Other | 1 | 1 | ||||||||
Net income | 302 | $ 302 | 302 | $ 302 | ||||||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (4) | (4) | (4) | (4) | ||||||
Foreign currency translation adjustment | 2 | 2 | 2 | 2 | ||||||
Other | (1) | (1) | ||||||||
Ending balance at Oct. 28, 2018 | 3,137 | (1,504) | (20) | $ 1,613 | $ 2 | 4,055 | (1,663) | (20) | $ 1,600 | |
Ending balance (in shares) at Oct. 28, 2018 | 1 | 1 | 204,585 | 181,372 | ||||||
Beginning balance at Jul. 29, 2018 | 3,208 | (1,586) | (15) | $ 2 | 4,047 | (1,745) | (15) | |||
Beginning balance (in shares) at Jul. 29, 2018 | 1 | 204,564 | ||||||||
Increase (decrease) in stockholders' equity | ||||||||||
Equity distribution to Parent | (78) | |||||||||
Stock-based compensation | 7 | 7 | ||||||||
Other | 1 | |||||||||
Net income | 82 | $ 82 | 82 | $ 82 | ||||||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (4) | (4) | (4) | (4) | ||||||
Other | (1) | (1) | ||||||||
Ending balance at Oct. 28, 2018 | 3,137 | (1,504) | (20) | $ 1,613 | $ 2 | 4,055 | (1,663) | (20) | $ 1,600 | |
Ending balance (in shares) at Oct. 28, 2018 | 1 | 1 | 204,585 | 181,372 | ||||||
Beginning balance at Feb. 03, 2019 | 2,726 | (1,413) | (30) | $ 1,283 | $ 2 | 4,067 | (1,572) | (30) | $ 1,281 | |
Beginning balance (in shares) at Feb. 03, 2019 | 1 | 204,806 | ||||||||
Increase (decrease) in stockholders' equity | ||||||||||
Cumulative effect of accounting change | (3) | (3) | ||||||||
Equity distribution to Parent | (319) | |||||||||
Stock-based compensation | 18 | 18 | ||||||||
Net income | 374 | 374 | 374 | 374 | ||||||
Unrealized loss on cash flow hedge, net of tax of $-, $1, $7, and $1 | (21) | (21) | (21) | (21) | ||||||
Ending balance at Nov. 03, 2019 | 2,425 | (1,042) | (51) | $ 1,332 | $ 2 | 4,092 | (1,201) | (51) | $ 1,328 | |
Ending balance (in shares) at Nov. 03, 2019 | 1 | 1 | 205,403 | 162,803 | ||||||
Beginning balance at Aug. 04, 2019 | 2,662 | (1,173) | (51) | $ 2 | 4,086 | (1,332) | (51) | |||
Beginning balance (in shares) at Aug. 04, 2019 | 1 | 205,409 | ||||||||
Increase (decrease) in stockholders' equity | ||||||||||
Equity distribution to Parent | (243) | |||||||||
Stock-based compensation | 6 | 6 | ||||||||
Other | (1) | (1) | ||||||||
Net income | 132 | $ 132 | 132 | $ 132 | ||||||
Ending balance at Nov. 03, 2019 | $ 2,425 | $ (1,042) | $ (51) | $ 1,332 | $ 2 | $ 4,092 | $ (1,201) | $ (51) | $ 1,328 | |
Ending balance (in shares) at Nov. 03, 2019 | 1 | 1 | 205,403 | 162,803 |
CONSOLIDATED STATEMENTS OF ST_4
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY ( Parenthetical) (HD Supply,Inc) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
Unrealized loss on cash flow hedge, tax | $ 1 | $ 7 | $ 1 |
HD Supply, Inc. (Total HDS) | |||
Unrealized loss on cash flow hedge, tax | $ 1 | $ 7 | $ 1 |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Nov. 03, 2019 | |
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 two distinct market sectors: Maintenance, Repair & Operations and Specialty Construction. Through approximately 270 branches and 44 distribution centers in the U.S. and Canada, the Company serves these markets with an integrated go-to-market strategy. HD Supply has approximately 11,500 associates delivering localized, customer-tailored products, services and expertise. The Company serves approximately 500,000 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 650,000 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 construction to maintenance, repair and operations. HD Supply is managed primarily on a product line basis and reports results of operations in two reportable segments. The reportable segments are Facilities Maintenance and Construction & Industrial. In addition, the consolidated financial statements include Corporate and Eliminations, 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 February 3, 2019, 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. The fiscal year ending February 2, 2020 (“fiscal 2019”) includes 52 weeks and the fiscal year ended February 3, 2019 (“fiscal 2018”) included 53 weeks. The three months ended November 3, 2019 (“third quarter 2019”) and October 28, 2018 (“third quarter 2018”) both include 13 weeks. The nine months ended November 3, 2019 and October 28, 2018 both include 39 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. 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 certain legal claims and medical claims, while maintaining per employee stop-loss coverage. 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 November 3, 2019 and February 3, 2019, self-insurance reserves totaled approximately $51 million and $49 million, respectively. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Nov. 03, 2019 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 2 — ACQUISITIONS HD Supply enters into strategic acquisitions from time to time to expand into new markets, new platforms, and new geographies in an effort to better service existing customers and attract new ones. In accordance with the acquisition method of accounting under Accounting Standards Codification (“ASC”) 805, “Business Combinations” (“ASC 805”), the results of acquisitions completed by HD Supply are reflected in the Company’s consolidated financial statements from the date of acquisition forward. On March 5, 2018, the Company completed the acquisition of A.H. Harris Construction Supplies (“A.H. Harris”) for a purchase price of approximately $359 million, net of cash acquired and the final working capital settlement. The Company received the final working capital settlement of approximately $3 million in second quarter 2019. A.H. Harris is a leading specialty construction distributor serving the northeast and mid-Atlantic regions. This acquisition expanded Construction & Industrial’s market presence in the northeastern United States. In accordance with ASC 805, the Company recorded the following assets and liabilities at fair value as of the date of the A.H. Harris acquisition: $182 million in goodwill, $123 million in definite-lived intangible assets, $12 million in property & equipment, $54 million in net working capital, and $10 million in deferred tax liabilities. The total amount of goodwill deductible for tax purposes is $19 million. The definite-lived intangible assets are comprised of $110 million in customer relationships and $13 million of trade names that will be amortized over a period of 12 years and 5 years, respectively. |
DEBT
DEBT | 9 Months Ended |
Nov. 03, 2019 | |
DEBT | |
DEBT | NOTE 3 — DEBT HDS’s long-term debt as of November 3, 2019 and February 3, 2019 consisted of the following (dollars in millions): November 3, 2019 February 3, 2019 Outstanding Interest Outstanding Interest Principal Rate % (1) Principal Rate % (1) Senior ABL Facility due 2022 $ 362 3.32 $ 348 3.83 Term B-5 Loans due 2023 1,059 3.54 1,067 4.25 October 2018 Senior Unsecured Notes due 2026 750 5.375 750 5.375 Total gross long-term debt $ 2,171 $ 2,165 Less unamortized discount (3) (4) Less unamortized deferred financing costs (19) (21) Total net long-term debt $ 2,149 $ 2,140 Less current installments (11) (11) Total net long-term debt, excluding current installments $ 2,138 $ 2,129 (1) Represents the stated rate of interest, without including the effect of discounts, premiums, or interest rate swap agreements. Senior Credit Facilities Senior ABL Facility The 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 $1,000 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 November 3, 2019, HDS had $614 million of Excess Availability (as defined in the Senior ABL Facility agreement) under the Senior ABL Facility (after giving effect to the borrowing base limitations and approximately $24 million in letters of credit issued and including $5 million of borrowings available on qualifying cash balances). As of November 3, 2019, approximately $48 million of the outstanding borrowings on the Senior ABL Facility are Canadian dollar-denominated borrowings. 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 (as defined in the Senior ABL Facility agreement) plus an applicable margin and (ii) in the case of Canadian dollar-denominated loans, either the Bankers’ 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 Excess Availability. 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 (the “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 $1,070 million (the “Term B-5 Loans”). The Term B-5 Loans will mature on October 17, 2023 and amortize in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the Term Loans with the balance payable at the maturity date. The Term B-5 Loans bear interest at the applicable margin for borrowings of 1.75% for LIBOR borrowings and 0.75% for base rate borrowings. For additional information on HDS’s Senior ABL Facility or Senior Term Facility (collectively, the “Senior Credit Facilities”), including guarantees and security, please refer to the Notes to Consolidated Financial Statements of our annual report on Form 10-K for the fiscal year ended February 3, 2019. Unsecured Notes 5.375% Senior Unsecured Notes due 2026 HDS issued $750 million aggregate principal amount of 5.375% Senior Unsecured Notes due 2026 (the “October 2018 Senior Unsecured Notes”) under an Indenture, dated as of October 11, 2018 (the “October 2018 Senior Unsecured Notes Indenture”) among HDS, certain subsidiaries of HDS as guarantors (the “Subsidiary Guarantors”) and the Trustee. The October 2018 Senior Unsecured Notes bear interest at a rate of 5.375% per annum and will mature on October 15, 2026. Interest is paid semi-annually on April 15 th th The October 2018 Senior Unsecured Notes are unsecured senior indebtedness of HDS and rank equal in right of payment with all of HDS’s existing and future senior indebtedness, senior in right of payment to all of HDS’s existing and future subordinated indebtedness, and effectively subordinated to all of HDS’s existing and future secured indebtedness, including, without limitation, indebtedness under the Senior Credit Facilities, to the extent of the value of the collateral securing each indebtedness. The October 2018 Senior Unsecured Notes are guaranteed, on a senior unsecured basis, by each of HDS’s direct and indirect existing and future subsidiaries that is a wholly owned domestic subsidiary (other than certain excluded subsidiaries), and by each other domestic subsidiary that is a borrower under the Senior ABL Facility or that guarantees HDS’s obligations under any credit facility or capital market securities. These guarantees are subject to release under customary circumstances as stipulated in the October 2018 Senior Unsecured Notes Indenture. The October 2018 Senior Unsecured Notes and related guarantees have not been, and are not required to be, registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction. Redemption HDS may redeem the October 2018 Senior Unsecured Notes, in whole or in part, at any time (1) prior to October 15, 2021, 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 October 2018 Senior Unsecured Notes Indenture and (2) on and after October 15, 2021, 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 October 15 of the year set forth below. Year Percentage 2021 102.688 % 2022 101.344 % 2023 and thereafter 100.000 % In addition, at any time prior to October 15, 2021, HDS may redeem on one or more occasions up to 40% of the aggregate principal amount of the October 2018 Senior Unsecured Notes with the proceeds of certain equity offerings at a redemption price of 105.375% of the principal amount in respect of the October 2018 Senior Unsecured Notes being redeemed, plus accrued and unpaid interest to the redemption date, provided, however, that if the October 2018 Senior Unsecured Notes are redeemed, an aggregate principal amount of the October 2018 Senior Unsecured Notes equal to at least 50% of the original aggregate principal amount of October 2018 Senior Unsecured Notes must remain outstanding immediately after each such redemption of October 2018 Senior Unsecured Notes. 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 November 3, 2019, HDS was in compliance with all such covenants that were in effect on such date. Furthermore, while these restrictions may, at times, limit the amount of dividends, distributions or intercompany transfers that HDS or a particular subsidiary guarantor may pay or make, as applicable, the Company believes that, as of November 3, 2019, it had no such limitations. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Nov. 03, 2019 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | NOTE 4 — DERIVATIVE INSTRUMENTS Hedge Strategy and Accounting Policy The Company enters into derivative financial instruments for hedging purposes. In hedging the exposure to variable cash flows on forecasted transactions, deferral accounting is applied when the derivative reduces the risk of the underlying hedged item effectively as a result of high inverse correlation with the value of the underlying exposure. If a derivative instrument either initially fails or later ceases to meet the criteria for deferral accounting, any subsequent gains or losses are recognized currently in income. Cash flows resulting from derivative financial instruments are classified in the same category as the cash flows from the items being hedged. Cash Flow Hedge On October 24, 2018, the Company entered into an interest rate swap agreement with a notional amount of $750 million, designated as a cash flow hedge in accordance with ASC 815, “Derivatives and Hedging ,” to hedge the variability of cash flows in interest payments associated with the Company’s variable-rate debt. The interest rate swap agreement swaps a LIBOR rate for a fixed rate of 3.07% and matures on October 17, 2023. The swap effectively converts a portion of the Company’s Term B-5 Loans from a rate of LIBOR plus 1.75% to a 4.82% fixed rate. As of November 3, 2019, the fair value of the Company’s interest rate swap in the Consolidated Balance Sheet was a liability of $48 million, which was reflected as $11 million in Other current liabilities and $37 million in Other liabilities in the Consolidated Balance Sheet. Changes in the fair value of interest rate swap agreements designated as cash flow hedges are recorded as a component of Accumulated Other Comprehensive Income (Loss) (“OCI”) within Stockholders’ Equity in the Consolidated Balance Sheets and are reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. See “Note 8 - Accumulated Other Comprehensive Income (Loss),” for further information. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Nov. 03, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 5 — 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. As of November 3, 2019 and February 3, 2019, the fair value measurement of the financial liability associated with the Company’s interest rate swap contract was $48 million and $20 million, respectively. The Company utilized Level 2 inputs, as defined in the fair value hierarchy, to measure the fair value of the interest rate swap. See “Note 4 – Derivative Instruments” for further information on the Company’s interest rate swap contract. The Company’s financial instruments that are not reflected at fair value on the Consolidated Balance Sheets were as follows as of November 3, 2019 and February 3, 2019 (amounts in millions): As of November 3, 2019 As of February 3, 2019 Recorded Estimated Recorded Estimated Amount (1) Fair Value Amount (1) Fair Value Senior ABL Facility $ 362 $ 361 $ 348 $ 346 Term Loans and Notes 1,809 1,861 1,817 1,815 Total $ 2,171 $ 2,222 $ 2,165 $ 2,161 (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. |
LEASES
LEASES | 9 Months Ended |
Nov. 03, 2019 | |
LEASES | |
LEASES | NOTE 6 – LEASES The Company adopted ASU No. 2016-02, “Leases (Topic 842),” and its related amendments (collectively “ASC 842”) on February 4, 2019 (the first day of fiscal 2019) using the cumulative adjustment transition method. The standard requires lessees to recognize a right-of-use (“ROU”) asset and lease liability for all leases. At adoption of ASC 842, the Company recognized ROU assets for operating leases of approximately $430 million and operating lease liabilities of approximately $447 million, the difference attributable to the reclassification of prepaid rent and accrued rent balances outstanding at adoption into the ROU assets and the cumulative adjustment recorded to the opening balance of retained earnings. The cumulative adjustment, net of tax, recorded to the opening balance of retained earnings was $3 million. The Company’s finance leases are immaterial. The adoption of ASC 842 did not have a material impact on the Company’s income statement. The Company’s consolidated financial statements for the three and nine months ended November 3, 2019 are presented under ASC 842, while comparative periods presented have not been adjusted and continue to be reported in accordance with the previous standard, ASC 840, “Leases.” The Company elected the package of practical expedients for existing contracts permitted under the transition guidance within ASC 842, which includes not reassessing lease classification of existing leases, the historical assessment of whether contracts are or contain leases, and the determination of initial direct costs. The Company did not elect the hindsight practical expedient. Lease Accounting Policies and Disclosures The Company determines if an agreement is a lease upon inception. An agreement is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the underlying asset and the right to direct how and for what purpose the asset is used. The Company has operating leases for distribution centers, warehouses, office space, and transportation vehicles. The Company has an immaterial amount of financing leases for other equipment. Certain leases for real estate contain options to extend or terminate the lease. Determining the lease term and amount of lease payments to include in the calculation of the ROU asset and lease liability for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain, and if the option period and payments should be included in the calculation of the associated ROU asset and liability. In making this determination, the Company considers all relevant economic factors that would compel the Company to exercise or not exercise an option. Many of the Company’s real estate leases contain charges for common area maintenance or other miscellaneous expenses that are updated based on landlord estimates. The Company determined these charges are variable non-lease components and did not elect the practical expedient to combine with lease components. Additionally, many of the Company’s transportation equipment leases require additional payments based on the underlying usage of the assets. Certain lease agreements include rental payments adjusted annually based on changes in an inflation index. Due to the variable nature of these costs, the cash flows associated with these charges are expensed as incurred and not included in the lease payments used to determine the ROU asset and associated lease liability. Lease ROU assets and associated liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The Company’s leases generally do not provide a readily determinable implicit borrowing rate. As such, the discount rate used to calculate present value is the Company’s collateralized incremental borrowing rate. The collateralized incremental borrowing rate for each lease varies in accordance with the lease term. Lease expense is recognized on a straight-line basis over the lease term. The following components of lease expense are included in Selling, general, and administrative expenses on the Consolidated Statement of Operations for the three and nine months ended November 3, 2019 (dollars in millions): Three Months Ended Nine Months Ended November 3, 2019 November 3, 2019 Operating Lease Cost $ 35 $ 106 Short-term Lease Cost 2 4 Variable Lease Cost 2 4 Sublease Income (1) (3) Total Lease Cost $ 38 $ 111 Lease costs associated with finance leases are immaterial for the Company. As of November 3, 2019, the weighted average remaining lease term for operating leases is 5.1 years and the weighted average discount rate is 4.66%. During the nine months ended November 3, 2019, the Company’s cash flows from operating activities included $116 million of cash payments for amounts included in the measurement of operating lease liabilities. During the nine months ended November 3, 2019, the Company obtained ROU assets of $83 million in exchange for operating lease liabilities. As of November 3, 2019, maturities of operating lease liabilities were as follows (amounts in millions): Fiscal Year Remainder of 2019 2020 2021 2022 2023 Thereafter Total Operating Lease Payments $ 35 118 108 80 59 97 $ 497 Less imputed interest 59 Total Discounted Lease Liability $ 438 As of November 3, 2019, the Company has additional leases which have not yet commenced, but are anticipated to commence in fiscal 2019. Commencement occurs when the Company is granted access to the property, such as when leasehold improvements are completed by the lessor or a certificate of occupancy is obtained. The Company anticipates these leases will result in approximately $40 million of ROU assets obtained in exchange for lease liabilities. Disclosure related to periods prior to adoption of ASC 842: Rental expense under operating leases was $142 million, $127 million, and $118 million in fiscal 2018, fiscal 2017, and fiscal 2016, respectively. Rental expense under operating leases for the three and nine months ended October 28, 2018 was $36 million and $104 million, respectively. As of February 3, 2019, future minimum aggregate rental payments under non-cancelable leases were as follows (amounts in millions): Fiscal Year 2019 2020 2021 2022 2023 Thereafter Total Operating Leases $ 140 104 88 61 42 78 $ 513 Corporate headquarters In February 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. In accordance with ASC 840, 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 was 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 construction costs incurred by the landlord. The lease commenced in February 2018, with the leased asset and corresponding financing liability valued at $87 million each. In accordance with the sale and leaseback criteria of GAAP, the build-to-suit arrangement and subsequent lease failed to qualify as a sale. Therefore, the transaction was accounted for as a financing arrangement, whereby both the leased asset and the financing liability remained on the Company’s Consolidated Balance Sheet. The asset was depreciated as if the Company was the legal owner and rental payments were allocated between interest expense and principal repayment of the financing liability. The Company exercised its option to purchase the leased asset, completing the purchase on February 4, 2019 for a total purchase price of $88 million. As the purchase option was executed on the first day of fiscal 2019, the Company did not recognize an ROU asset for the finance lease and a corresponding lease liability as part of the adoption of ASC 842 and excluded the future minimum rental payments from the commitment tables disclosed above. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Nov. 03, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 7 — INCOME TAXES For the nine months ended November 3, 2019, the Company’s combined federal, state, and foreign effective tax rate for continuing operations was 25.8% and 25.9% for the nine months ended October 28, 2018. 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 audit settlements. As of November 3, 2019 and February 3, 2019, the Company’s unrecognized tax benefits in accordance with the income taxes principles of GAAP (ASC 740, “Income Taxes”) were $17 million. The Company’s ending net accrual for interest and penalties related to unrecognized tax benefits as of November 3, 2019 and February 3, 2019 was zero. As of November 3, 2019 and February 3, 2019, the Company’s valuation allowance on its U.S. deferred tax assets was approximately $7 million. Each reporting period, the Company assesses available positive and negative evidence and estimates if sufficient future taxable income will be generated to utilize the existing deferred tax assets. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Nov. 03, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 8 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Accumulated OCI ("AOCI") consists of accumulated net unrealized gains or losses associated with foreign currency translation adjustments and the changes in the fair value of derivatives designated as cash flow hedges. The balances and changes in AOCI, net of tax by component for the three and nine months ended November 3, 2019 and October 28, 2018 was as follows (amounts in millions): Three Months Ended Nine Months Ended November 3, October 28, November 3, October 28, 2019 2018 2019 2018 Foreign currency translation adjustment: Beginning balance $ (15) $ (15) $ (15) $ (17) Other comprehensive income (loss) before reclassifications — — — 2 Amounts reclassified from accumulated OCI into earnings — — — — Ending balance $ (15) $ (15) $ (15) $ (15) Cash flow hedge, net of tax: Beginning balance $ (36) $ — $ (15) $ — Other comprehensive income (loss) before reclassifications (2) (5) (25) (5) Amounts reclassified from accumulated OCI into earnings (1) 2 1 4 1 Other — (1) — (1) Ending balance, net of tax of $12, $1 , $12, and $1 $ (36) $ (5) $ (36) $ (5) Total ending balance of AOCI $ (51) $ (20) $ (51) $ (20) (1) Unrealized loss reclassified into Interest expense. |
BASIC AND DILUTED WEIGHTED AVER
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES | 9 Months Ended |
Nov. 03, 2019 | |
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES | |
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES | NOTE 9 - 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 and nine months ended November 3, 2019 and October 28, 2018 was as follows (in thousands): Three Months Ended Nine Months Ended November 3, 2019 October 28, 2018 November 3, 2019 October 28, 2018 Weighted-average common shares 164,638 182,730 168,062 183,349 Effect of potentially dilutive stock plan securities 504 849 583 843 Diluted weighted-average common shares 165,142 183,579 168,645 184,192 Stock plan securities excluded from dilution (1) 2,025 1,460 2,741 1,900 (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, restricted stock units, and performance share units) granted under Holdings’ stock-based compensation plans. |
SUPPLEMENTAL BALANCE SHEET AND
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | 9 Months Ended |
Nov. 03, 2019 | |
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | |
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | NOTE 10 — SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION Receivables Receivables as of November 3, 2019 and February 3, 2019 consisted of the following (amounts in millions): November 3, 2019 February 3, 2019 Trade receivables, net of allowance for doubtful accounts $ 779 $ 657 Vendor rebate receivables 61 57 Other receivables 23 18 Total receivables, net $ 863 $ 732 Other Current Liabilities Other current liabilities as of November 3, 2019 and February 3, 2019 consisted of the following (amounts in millions): HD Supply Holdings, Inc. HD Supply, Inc. November 3, 2019 February 3, 2019 November 3, 2019 February 3, 2019 Corporate headquarters financing liability (1) $ — $ 87 $ — $ 87 Accrued legal 51 1 51 1 Accrued non-income taxes 42 35 42 35 Accrued interest 3 14 3 14 Unsettled share repurchases 4 2 — — Other 120 120 120 120 Total other current liabilities $ 220 $ 259 $ 216 $ 257 (1) This amount represented the financing liability for the Company’s corporate headquarters that was purchased on February 4, 2019. Please see “Note 6 – Leases” for further information on the purchase of the Company’s corporate headquarters. During the three months ended November 3, 2019, the Company recorded a $50 million legal accrual related to litigation activities, offset by the recognition of a $50 million insurance recovery included in Other current assets. For further information, see “Note 12 – Commitments and Contingencies.” Supplemental Cash Flow Information Cash paid for interest in the nine months ended November 3, 2019 and October 28, 2018 was $89 million and $103 million, respectively. During the nine months ended October 28, 2018, the Company paid $4 million of original issue discounts related to the extinguishment of debt. Cash paid for income taxes, net of refunds, in the nine months ended November 3, 2019 and October 28, 2018 was approximately $35 million and $9 million, respectively. During the nine months ended November 3, 2019 and October 28, 2018, HDS executed equity cash distributions of $319 million and $172 million, respectively, to Holdings, via HDS’s direct parent, HDS Holding Corporation. The equity distribution from HDS and return of capital recognized by Holdings were eliminated in consolidation of Holdings and its wholly-owned subsidiaries, including HDS. Share Repurchases During fiscal 2014, Holdings’ Board of Directors authorized a share repurchase program to be funded from cash proceeds received from exercises of employee stock options (“April 2014 Plan”). This share repurchase program does not obligate Holdings to acquire any particular amount of common stock, and it may be terminated at any time at Holdings’ discretion. During August 2017 and November 2018, Holdings’ Board of Directors authorized two additional share repurchase programs for up to an aggregate amount of $500 million each of Holdings’ common stock (“August 2017 Plan” and “November 2018 Plan,” respectively). Holdings completed the repurchase of all $500 million of common stock authorized under the August 2017 Plan in December 2018. Holdings’ share repurchases under these plans for the nine months ended November 3, 2019 and October 28, 2018 were as follows (dollars in millions): Nine Months Ended November 3, 2019 October 28, 2018 Number of Cost of Number of Cost of Shares Shares Shares Shares November 2018 Plan 8,161,079 $ 316 — $ — August 2017 Plan — — 4,682,396 178 April 2014 Plan 158,734 7 165,537 7 Total share repurchases 8,319,813 $ 323 4,847,933 $ 185 |
RESTRUCTURING AND SEPARATION AC
RESTRUCTURING AND SEPARATION ACTIVITIES | 9 Months Ended |
Nov. 03, 2019 | |
RESTRUCTURING AND SEPARATION ACTIVITIES | |
RESTRUCTURING AND SEPARATION ACTIVITIES | NOTE 11 — RESTRUCTURING AND SEPARATION ACTIVITIES On September 24, 2019, the Company announced its intention to separate its Facilities Maintenance and Construction & Industrial businesses into two independent publicly traded companies with the separation expected to be completed by the middle of the fiscal year ended January 31, 2021 (" fiscal 2020 “). In light of the current business environment and in order to begin the establishment of two separate standalone businesses, the Company made personnel changes and began assessing the separation process, resulting in the recognition of $4 million in restructuring and separation charges in the three months ended November 3, 2019. These charges were primarily related to severance and other employee-related costs as well as costs incurred to execute the separation. The Company is in the early stages of estimating total costs for the separation of the businesses. Restructuring and separation charges in the nine months ended November 3, 2019 of $2 million, reflect the favorable termination of the lease for the Company’s former corporate headquarters in the first quarter of fiscal 2019. As of November 3, 2019, remaining unpaid costs associated with these activities are immaterial. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Nov. 03, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 — COMMITMENTS AND CONTINGENCIES Legal Matters On July 10, 2017 and August 8, 2017, shareholders filed putative class action complaints in the U.S. District Court for the Northern District of Georgia, alleging that HD Supply and certain senior members of its management (collectively, the “securities litigation defendants”) made certain false or misleading public statements in violation of the federal securities laws between November 9, 2016 and June 5, 2017, inclusive (the “original securities complaints”). Subsequently, the two securities cases were consolidated, and, on November 16, 2017, the lead plaintiffs appointed by the Court filed a Consolidated Amended Class Action Complaint (the “Amended Complaint”) against the securities litigation defendants on behalf of all persons other than the securities litigation defendants who purchased or otherwise acquired the Company’s common stock between November 9, 2016 and June 5, 2017, inclusive. The Amended Complaint alleges that the securities litigation defendants made certain false or misleading public statements, primarily relating to the Company’s progress in addressing certain supply chain disruption issues encountered in the Company’s Facilities Maintenance business unit. The Amended Complaint asserts claims against the securities litigation defendants under Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5, and seeks class certification under the Federal Rules of Civil Procedure, as well as unspecified monetary damages, pre-judgment and post-judgment interest, and attorneys’ fees and other costs. On September 19, 2018, the Court granted in part and denied in part the securities litigation defendants’ motion to dismiss. The parties have reached an agreement in principle to settle the litigation for a payment of $50 million, subject to negotiation of definitive settlement documentation and court approval. The full settlement amount is covered under the Company’s insurance policies. The Company and individual defendants continue to dispute the allegations in the complaints, and the settlement is without any admission of the allegations in the complaints. On August 8, 2017, two shareholder derivative complaints were filed in the U.S. District Court for the Northern District of Georgia, naming the Company as a “nominal defendant” and certain members of its senior management and board of directors as individual defendants. The complaints generally allege that the individual defendants caused the Company to issue false and misleading statements concerning the Company’s business, operations, and financial prospects, including misrepresentations regarding operating leverage and supply chain corrective actions. The complaints assert claims against the individual defendants under Section 14(a) of the Exchange Act, and allege breaches of fiduciary duties, unjust enrichment, corporate waste, and insider selling. The complaints assert a claim to recover any damages sustained by the Company as a result of the individual defendants’ allegedly wrongful actions, seek certain actions by the Company to modify its corporate governance and internal procedures, and seek to recover attorneys’ fees and other costs. On October 22, 2018, upon joint motion of the parties, the Court entered an order conditionally staying the proceedings and administratively closing the matter until after any summary judgment motion filed relating to the Amended Complaint is adjudicated. On August 29, 2018, a shareholder derivative complaint was filed in Delaware Chancery Court naming the Company as a “nominal defendant” and certain members of its senior management and board of directors as individual defendants. The complaint generally alleges that the individual defendants caused the Company to issue false and misleading statements concerning the Company’s business, operations, and financial prospects, including misrepresentations regarding supply chain corrective actions. The complaint asserts various common law breach of fiduciary duty claims against the individual defendants and claims of unjust enrichment and insider selling. The complaint seeks to recover any damages sustained by the Company as a result of the individual defendants’ allegedly wrongful actions, seeks certain actions by the Company to modify its corporate governance and internal procedures, and seeks to recover attorneys’ fees and other costs. The individual defendants moved to dismiss the complaint on November 2, 2018. On January 14, 2019, upon joint motion of the parties, the Court entered an order conditionally staying the proceedings until after any summary judgment motions filed relating to the Amended Complaint is adjudicated. The Company intends to defend the derivative lawsuits vigorously. Given the stage of the complaints and the claims and issues presented, the Company cannot reasonably estimate at this time the possible loss or range of loss, if any, that may arise from these unresolved lawsuits. In March 2019, the Company received a subpoena from the U.S. Securities and Exchange Commission (“SEC”) requesting information and documents from calendar years 2016 and 2017 relating to, among other things, the Company’s Facilities Maintenance business unit and the allegations of the Amended Complaint described above. The Company is in the process of responding to the subpoena and intends to cooperate with the SEC’s investigation. We cannot currently predict the timing or outcome of this ongoing investigation. 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 are of such kind or involve such amounts that would not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company if disposed of unfavorably. For material matters with loss contingencies that are reasonably possible and reasonably estimable, including matters with loss contingencies 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 | 9 Months Ended |
Nov. 03, 2019 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 13 — 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 two reportable segments, each of which is presented below: ● Facilities Maintenance —Facilities Maintenance distributes maintenance, repair and operations products, provides value-add services and fabricates custom products to multifamily, hospitality, healthcare and institutional facilities. ● 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 incurs costs related to the Company’s centralized support functions, which are comprised of finance, information technology, human resources, legal, supply chain and other support services. All Corporate overhead costs are allocated to the reportable segments. Eliminations include the adjustments necessary to eliminate intercompany transactions. The following tables present Net sales, Adjusted EBITDA, and other measures for both of the reportable segments and total operations for the periods indicated (amounts in millions): Total Facilities Construction Continuing Maintenance & Industrial Eliminations Operations Three Months Ended November 3, 2019 Net sales $ 826 $ 818 $ — $ 1,644 Adjusted EBITDA 149 98 — 247 Depreciation (1) 11 13 — 24 Other Intangible Amortization 2 3 — 5 Three Months Ended October 28, 2018 Net sales $ 810 $ 803 $ (1) $ 1,612 Adjusted EBITDA 149 99 — 248 Depreciation (1) 10 12 — 22 Other Intangible Amortization 2 3 — 5 Nine Months Ended November 3, 2019 Net sales $ 2,428 $ 2,334 $ (1) $ 4,761 Adjusted EBITDA 432 262 — 694 Depreciation (1) 32 34 — 66 Other Intangible Amortization 6 11 — 17 Nine Months Ended October 28, 2018 Net sales $ 2,353 $ 2,250 $ (2) $ 4,601 Adjusted EBITDA 422 262 — 684 Depreciation (1) 28 34 — 62 Other Intangible Amortization 6 10 — 16 (1) Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. Reconciliation to Consolidated Financial Statements Three Months Ended Nine Months Ended November 3, 2019 October 28, 2018 November 3, 2019 October 28, 2018 Total Adjusted EBITDA $ 247 $ 248 $ 694 $ 684 Depreciation and amortization (1) 29 27 83 78 Stock-based compensation 6 7 18 19 Restructuring and separation (2) 4 — 2 9 Acquisition and integration costs (3) 4 2 5 5 Other (1) (1) — (2) Operating income 205 213 586 575 Interest expense 27 32 83 101 Interest (income) — — — (1) Loss on extinguishment & modification of debt (4) — 69 — 69 Income from Continuing Operations Before Provision for Income Taxes 178 112 503 406 Provision for income taxes 47 30 130 105 Income from continuing operations 131 82 373 301 Income from discontinued operations, net of tax 1 — 1 1 Net income $ 132 $ 82 $ 374 $ 302 (1) Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. (2) Represents the costs related to separation activities and personnel changes, primarily severance and other employee-related costs. During the nine months ended November 3, 2019, the costs include a favorable termination of the lease for the Company’s former corporate headquarters. (3) Represents the cost incurred in the acquisition and integration of business acquisitions, including A.H. Harris Construction Supplies. (4) Represents the loss on extinguishment of debt including premium paid to repurchase or call the debt as well as the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modifications . |
REVENUE
REVENUE | 9 Months Ended |
Nov. 03, 2019 | |
REVENUE | |
REVENUE | NOTE 14 — REVENUE The Company’s revenues are earned from contracts with customers. Contracts include written agreements, as well as arrangements that are implied by customary practices or law. Nature of Products and Services Both Facilities Maintenance and Construction & Industrial serve unique end markets. Facilities Maintenance offers products that serve the maintenance, repair and operations (“MRO”) end market as well as value-added services. Construction & Industrial offers products used broadly across both the residential and non-residential construction end markets as well as light remodeling supplies for small remodeling contractors and trade professionals. For additional information regarding the nature of products and services offered by the Company’s reportable segments, see “Description of segments” within Item 2 of this quarterly report on Form 10-Q. Revenue Recognition The Company recognizes revenue, net of allowances for returns and discounts and any taxes collected from the customer, when an identified performance obligation is satisfied by the transfer of control of promised products or services to the customer. The Company ships products to customers by internal fleet and third-party carriers. Transfer of control to the customer for products generally occurs at the point of destination (i.e., upon transfer of title and risk of loss of product). Transfer of control to the customer for services occurs when the customer has the right to direct the use of and obtain substantially all the remaining benefits of the asset that is created or enhanced from the service. The Company accounts for shipping and handling costs associated with outbound freight as a fulfillment cost. Such costs are included in Selling, general, and administrative expenses. Disaggregation of Revenue The Company elected to disaggregate the revenue of Facilities Maintenance by its demand types: MRO and Property Improvement, and Construction & Industrial by its end markets: Non-Residential Construction, Residential Construction, and Other. The Company believes this disaggregation appropriately meets the objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The prior periods’ revenue disaggregation for Construction & Industrial has been revised by an immaterial amount. The table below represents disaggregated revenue for Facilities Maintenance and Construction & Industrial with Inter-segment eliminations (amounts in millions): Three Months Ended Nine Months Ended November 3, 2019 October 28, 2018 November 3, 2019 October 28, 2018 Facilities Maintenance Maintenance, Repair, and Operations $ 727 $ 718 $ 2,151 $ 2,076 Property Improvement 99 92 277 277 Total Facilities Maintenance Net Sales 826 810 2,428 2,353 Construction & Industrial Non-Residential Construction 572 559 1,614 1,542 Residential Construction 194 196 572 569 Other 52 48 148 139 Total Construction & Industrial Net Sales 818 803 2,334 2,250 Inter-segment Eliminations — (1) (1) (2) Total HD Supply Net Sales $ 1,644 $ 1,612 $ 4,761 $ 4,601 |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Nov. 03, 2019 | |
RECENT ACCOUNTING PRONOUNCEMENTS | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 15 - RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements Leases – In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, “Leases (Topic 842),” amended by ASU No. 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842),” ASU No. 2018-01, “Leases (Topic 842) – Land Easement Practical Expedient for Transition to Topic 842,” ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Leases (Topic 842) – Targeted Improvements.” The amended 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 No. 2016-02 also requires enhanced disclosures that provide more transparency and information to financial statement users about lease portfolios. ASU No. 2018-11 allows entities an additional transition method to the existing requirements whereby an entity could adopt the provisions of ASU No. 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. The Company adopted this guidance on February 4, 2019 (the first day of fiscal 2019) using the cumulative adjustment transition method. See “Note 6 – Leases” for the Company’s lease accounting policies and disclosures. Recently Issued Accounting Pronouncements Not Yet Adopted Cloud Computing Arrangements – In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (a consensus of the FASB Emerging Issues Task Force)” (“ASU 2018-15”). The new guidance aligns the requirements for capitalizing implementation costs in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update also provides for additional disclosure requirements regarding the nature of an entity’s hosting arrangements that are service contracts. The ASU is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted in any interim period. The Company anticipates adopting the ASU in fiscal 2020. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of adopting ASU 2018-15. 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 Company anticipates adopting the ASU in fiscal 2020. 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. Financial Instruments |
NATURE OF BUSINESS AND BASIS _2
NATURE OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Nov. 03, 2019 | |
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 two distinct market sectors: Maintenance, Repair & Operations and Specialty Construction. Through approximately 270 branches and 44 distribution centers in the U.S. and Canada, the Company serves these markets with an integrated go-to-market strategy. HD Supply has approximately 11,500 associates delivering localized, customer-tailored products, services and expertise. The Company serves approximately 500,000 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 650,000 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 construction to maintenance, repair and operations. HD Supply is managed primarily on a product line basis and reports results of operations in two reportable segments. The reportable segments are Facilities Maintenance and Construction & Industrial. In addition, the consolidated financial statements include Corporate and Eliminations, 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 February 3, 2019, 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. The fiscal year ending February 2, 2020 (“fiscal 2019”) includes 52 weeks and the fiscal year ended February 3, 2019 (“fiscal 2018”) included 53 weeks. The three months ended November 3, 2019 (“third quarter 2019”) and October 28, 2018 (“third quarter 2018”) both include 13 weeks. The nine months ended November 3, 2019 and October 28, 2018 both include 39 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. |
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 certain legal claims and medical claims, while maintaining per employee stop-loss coverage. 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 November 3, 2019 and February 3, 2019, self-insurance reserves totaled approximately $51 million and $49 million, respectively. |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
DEBT | |
Schedule of long-term debt | HDS’s long-term debt as of November 3, 2019 and February 3, 2019 consisted of the following (dollars in millions): November 3, 2019 February 3, 2019 Outstanding Interest Outstanding Interest Principal Rate % (1) Principal Rate % (1) Senior ABL Facility due 2022 $ 362 3.32 $ 348 3.83 Term B-5 Loans due 2023 1,059 3.54 1,067 4.25 October 2018 Senior Unsecured Notes due 2026 750 5.375 750 5.375 Total gross long-term debt $ 2,171 $ 2,165 Less unamortized discount (3) (4) Less unamortized deferred financing costs (19) (21) Total net long-term debt $ 2,149 $ 2,140 Less current installments (11) (11) Total net long-term debt, excluding current installments $ 2,138 $ 2,129 (1) Represents the stated rate of interest, without including the effect of discounts, premiums, or interest rate swap agreements. |
October 2018 Senior Unsecured Notes due 2026 | |
DEBT | |
Schedule of notes redemption on and after October 15, 2021, at the applicable redemption price set forth below (expressed as a percentage of principal amount) | Year Percentage 2021 102.688 % 2022 101.344 % 2023 and thereafter 100.000 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
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 November 3, 2019 and February 3, 2019 (amounts in millions): As of November 3, 2019 As of February 3, 2019 Recorded Estimated Recorded Estimated Amount (1) Fair Value Amount (1) Fair Value Senior ABL Facility $ 362 $ 361 $ 348 $ 346 Term Loans and Notes 1,809 1,861 1,817 1,815 Total $ 2,171 $ 2,222 $ 2,165 $ 2,161 (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. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
LEASES | |
Schedule of components of lease expense | The following components of lease expense are included in Selling, general, and administrative expenses on the Consolidated Statement of Operations for the three and nine months ended November 3, 2019 (dollars in millions): Three Months Ended Nine Months Ended November 3, 2019 November 3, 2019 Operating Lease Cost $ 35 $ 106 Short-term Lease Cost 2 4 Variable Lease Cost 2 4 Sublease Income (1) (3) Total Lease Cost $ 38 $ 111 |
Schedule of maturities of operating lease liabilities | As of November 3, 2019, maturities of operating lease liabilities were as follows (amounts in millions): Fiscal Year Remainder of 2019 2020 2021 2022 2023 Thereafter Total Operating Lease Payments $ 35 118 108 80 59 97 $ 497 Less imputed interest 59 Total Discounted Lease Liability $ 438 |
Schedule of future minimum rental payments under non-cancelable leases | As of February 3, 2019, future minimum aggregate rental payments under non-cancelable leases were as follows (amounts in millions): Fiscal Year 2019 2020 2021 2022 2023 Thereafter Total Operating Leases $ 140 104 88 61 42 78 $ 513 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
Schedule of changes in AOCI | Three Months Ended Nine Months Ended November 3, October 28, November 3, October 28, 2019 2018 2019 2018 Foreign currency translation adjustment: Beginning balance $ (15) $ (15) $ (15) $ (17) Other comprehensive income (loss) before reclassifications — — — 2 Amounts reclassified from accumulated OCI into earnings — — — — Ending balance $ (15) $ (15) $ (15) $ (15) Cash flow hedge, net of tax: Beginning balance $ (36) $ — $ (15) $ — Other comprehensive income (loss) before reclassifications (2) (5) (25) (5) Amounts reclassified from accumulated OCI into earnings (1) 2 1 4 1 Other — (1) — (1) Ending balance, net of tax of $12, $1 , $12, and $1 $ (36) $ (5) $ (36) $ (5) Total ending balance of AOCI $ (51) $ (20) $ (51) $ (20) (1) Unrealized loss reclassified into Interest expense. |
BASIC AND DILUTED WEIGHTED AV_2
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
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 and nine months ended November 3, 2019 and October 28, 2018 was as follows (in thousands): Three Months Ended Nine Months Ended November 3, 2019 October 28, 2018 November 3, 2019 October 28, 2018 Weighted-average common shares 164,638 182,730 168,062 183,349 Effect of potentially dilutive stock plan securities 504 849 583 843 Diluted weighted-average common shares 165,142 183,579 168,645 184,192 Stock plan securities excluded from dilution (1) 2,025 1,460 2,741 1,900 (1) Represents securities not included in the computation of diluted earnings per share because their effect would have been anti-dilutive. |
SUPPLEMENTAL BALANCE SHEET AN_2
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | |
Schedule of receivables | Receivables as of November 3, 2019 and February 3, 2019 consisted of the following (amounts in millions): November 3, 2019 February 3, 2019 Trade receivables, net of allowance for doubtful accounts $ 779 $ 657 Vendor rebate receivables 61 57 Other receivables 23 18 Total receivables, net $ 863 $ 732 |
Schedule of other current liabilities | Other current liabilities as of November 3, 2019 and February 3, 2019 consisted of the following (amounts in millions): HD Supply Holdings, Inc. HD Supply, Inc. November 3, 2019 February 3, 2019 November 3, 2019 February 3, 2019 Corporate headquarters financing liability (1) $ — $ 87 $ — $ 87 Accrued legal 51 1 51 1 Accrued non-income taxes 42 35 42 35 Accrued interest 3 14 3 14 Unsettled share repurchases 4 2 — — Other 120 120 120 120 Total other current liabilities $ 220 $ 259 $ 216 $ 257 (1) This amount represented the financing liability for the Company’s corporate headquarters that was purchased on February 4, 2019. Please see “Note 6 – Leases” for further information on the purchase of the Company’s corporate headquarters. |
Schedule of share repurchases | Holdings’ share repurchases under these plans for the nine months ended November 3, 2019 and October 28, 2018 were as follows (dollars in millions): Nine Months Ended November 3, 2019 October 28, 2018 Number of Cost of Number of Cost of Shares Shares Shares Shares November 2018 Plan 8,161,079 $ 316 — $ — August 2017 Plan — — 4,682,396 178 April 2014 Plan 158,734 7 165,537 7 Total share repurchases 8,319,813 $ 323 4,847,933 $ 185 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
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 both of the reportable segments and total operations for the periods indicated (amounts in millions): Total Facilities Construction Continuing Maintenance & Industrial Eliminations Operations Three Months Ended November 3, 2019 Net sales $ 826 $ 818 $ — $ 1,644 Adjusted EBITDA 149 98 — 247 Depreciation (1) 11 13 — 24 Other Intangible Amortization 2 3 — 5 Three Months Ended October 28, 2018 Net sales $ 810 $ 803 $ (1) $ 1,612 Adjusted EBITDA 149 99 — 248 Depreciation (1) 10 12 — 22 Other Intangible Amortization 2 3 — 5 Nine Months Ended November 3, 2019 Net sales $ 2,428 $ 2,334 $ (1) $ 4,761 Adjusted EBITDA 432 262 — 694 Depreciation (1) 32 34 — 66 Other Intangible Amortization 6 11 — 17 Nine Months Ended October 28, 2018 Net sales $ 2,353 $ 2,250 $ (2) $ 4,601 Adjusted EBITDA 422 262 — 684 Depreciation (1) 28 34 — 62 Other Intangible Amortization 6 10 — 16 (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 Nine Months Ended November 3, 2019 October 28, 2018 November 3, 2019 October 28, 2018 Total Adjusted EBITDA $ 247 $ 248 $ 694 $ 684 Depreciation and amortization (1) 29 27 83 78 Stock-based compensation 6 7 18 19 Restructuring and separation (2) 4 — 2 9 Acquisition and integration costs (3) 4 2 5 5 Other (1) (1) — (2) Operating income 205 213 586 575 Interest expense 27 32 83 101 Interest (income) — — — (1) Loss on extinguishment & modification of debt (4) — 69 — 69 Income from Continuing Operations Before Provision for Income Taxes 178 112 503 406 Provision for income taxes 47 30 130 105 Income from continuing operations 131 82 373 301 Income from discontinued operations, net of tax 1 — 1 1 Net income $ 132 $ 82 $ 374 $ 302 (1) Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. (2) Represents the costs related to separation activities and personnel changes, primarily severance and other employee-related costs. During the nine months ended November 3, 2019, the costs include a favorable termination of the lease for the Company’s former corporate headquarters. (3) Represents the cost incurred in the acquisition and integration of business acquisitions, including A.H. Harris Construction Supplies. (4) Represents the loss on extinguishment of debt including premium paid to repurchase or call the debt as well as the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modifications . |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Nov. 03, 2019 | |
REVENUE | |
Schedule of Facilities Maintenance and Construction & Industrial with Inter-segment eliminations | The table below represents disaggregated revenue for Facilities Maintenance and Construction & Industrial with Inter-segment eliminations (amounts in millions): Three Months Ended Nine Months Ended November 3, 2019 October 28, 2018 November 3, 2019 October 28, 2018 Facilities Maintenance Maintenance, Repair, and Operations $ 727 $ 718 $ 2,151 $ 2,076 Property Improvement 99 92 277 277 Total Facilities Maintenance Net Sales 826 810 2,428 2,353 Construction & Industrial Non-Residential Construction 572 559 1,614 1,542 Residential Construction 194 196 572 569 Other 52 48 148 139 Total Construction & Industrial Net Sales 818 803 2,334 2,250 Inter-segment Eliminations — (1) (1) (2) Total HD Supply Net Sales $ 1,644 $ 1,612 $ 4,761 $ 4,601 |
NATURE OF BUSINESS AND BASIS _3
NATURE OF BUSINESS AND BASIS OF PRESENTATION - Nature of Business (Details) | 9 Months Ended |
Nov. 03, 2019customersegmentcategoryproductitememployee | |
Nature of Business | |
Number of distinct market sectors in which entity specializes | category | 2 |
Number of associates | employee | 11,500 |
Number of customers | customer | 500,000 |
Number of SKUs offered | product | 650,000 |
Number of reportable segments | segment | 2 |
U.S. and Canada | |
Nature of Business | |
Number of branches | 270 |
Number of distribution centers | 44 |
NATURE OF BUSINESS AND BASIS _4
NATURE OF BUSINESS AND BASIS OF PRESENTATION - Fiscal Year (Details) | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
Length of fiscal year (in days) | 364 days | 371 days | ||
Length of fiscal quarter (in days) | 91 days | 91 days | 273 days | 273 days |
Minimum | ||||
Length of fiscal year (in days) | 364 days | |||
Maximum | ||||
Length of fiscal year (in days) | 371 days |
NATURE OF BUSINESS AND BASIS _5
NATURE OF BUSINESS AND BASIS OF PRESENTATION - Self-Insurance (Details) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | ||
Self-insurance reserves | $ 51 | $ 49 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Millions | Mar. 05, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | Feb. 03, 2019 |
ACQUISITIONS | ||||||
Goodwill | $ 1,991 | $ 1,991 | $ 1,990 | |||
Net Sales | 1,644 | $ 1,612 | $ 4,761 | $ 4,601 | ||
A.H. Harris | ||||||
ACQUISITIONS | ||||||
Purchase price, net of cash acquired | $ 359 | |||||
Proceeds from working capital | $ 3 | |||||
Goodwill | 182 | |||||
Definite-lived intangible assets | 123 | |||||
Property & equipment | 12 | |||||
Net working capital | 54 | |||||
Deferred tax liabilities | 10 | |||||
Goodwill expected to be deductible for tax purposes | 19 | |||||
A.H. Harris | Customer relationships | ||||||
ACQUISITIONS | ||||||
Definite-lived intangible assets | $ 110 | |||||
Estimated amortization periods | 12 years | |||||
A.H. Harris | Trade names | ||||||
ACQUISITIONS | ||||||
Definite-lived intangible assets | $ 13 | |||||
Estimated amortization periods | 5 years |
DEBT - Gross Long-term Debt - O
DEBT - Gross Long-term Debt - Outstanding Principal - Tabular Disclosure (Details) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
DEBT | ||
Total gross long-term debt | $ 2,171 | $ 2,165 |
HDS | Secured debt | Credit facility | Senior ABL Facility due 2022 | ||
DEBT | ||
Total gross long-term debt | 362 | 348 |
HDS | Secured debt | Credit facility | Term B-5 Loans due 2023 | ||
DEBT | ||
Total gross long-term debt | 1,059 | 1,067 |
HDS | Unsecured debt | October 2018 Senior Unsecured Notes due 2026 | ||
DEBT | ||
Total gross long-term debt | $ 750 | $ 750 |
DEBT - Gross Long-term Debt - I
DEBT - Gross Long-term Debt - Interest Rate - Tabular Disclosure (Details) - HDS | Nov. 03, 2019 | Feb. 03, 2019 | Oct. 11, 2018 |
Secured debt | Credit facility | Senior ABL Facility due 2022 | |||
DEBT | |||
Interest rate, rate at end of period (as a percent) | 3.32% | 3.83% | |
Secured debt | Credit facility | Term B-5 Loans due 2023 | |||
DEBT | |||
Interest rate, rate at end of period (as a percent) | 3.54% | 4.25% | |
Unsecured debt | October 2018 Senior Unsecured Notes due 2026 | |||
DEBT | |||
Interest rate, stated rate (as a percent) | 5.375% | 5.375% | 5.375% |
DEBT - Total Net Long-term Debt
DEBT - Total Net Long-term Debt - Tabular Disclosure (Details) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
DEBT | ||
Total gross long-term debt | $ 2,171 | $ 2,165 |
Less unamortized discount | (3) | (4) |
Less unamortized deferred financing costs | (19) | (21) |
Total net long-term debt | $ 2,149 | $ 2,140 |
DEBT - Total Long-term Debt, Ex
DEBT - Total Long-term Debt, Excluding Current Installments - Tabular Disclosure (Details) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
DEBT | ||
Total net long-term debt | $ 2,149 | $ 2,140 |
Less current installments | (11) | (11) |
Total net long-term debt, excluding current installments | $ 2,138 | $ 2,129 |
DEBT - Senior ABL Facility (Det
DEBT - Senior ABL Facility (Details) $ in Millions | 9 Months Ended | |
Nov. 03, 2019USD ($)facility | Feb. 03, 2019USD ($) | |
DEBT | ||
Outstanding borrowings | $ 2,171 | $ 2,165 |
Secured debt | HDS | Credit facility | Senior ABL Facility | ||
DEBT | ||
Aggregate principal amount | 1,000 | |
Line of credit facility, Excess Availability for borrowing | 614 | |
Letter of credit facility outstanding | 24 | |
Line of credit facility, available for borrowing on qualifying cash balances | $ 5 | |
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 | Secured debt | HDS | Credit facility | Senior ABL Facility | ||
DEBT | ||
Outstanding borrowings | $ 48 |
DEBT - Senior Term Loan Facilit
DEBT - Senior Term Loan Facility (Details) - HDS - Secured debt - Credit facility $ in Millions | 9 Months Ended |
Nov. 03, 2019USD ($) | |
Term Loan Facility | |
DEBT | |
Aggregate principal amount | $ 1,070 |
Term B-5 Loans due 2023 | |
DEBT | |
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% |
LIBOR | Term B-5 Loans due 2023 | |
DEBT | |
Percentage added to reference rate (as a percent) | 1.75% |
Base | Term B-5 Loans due 2023 | |
DEBT | |
Percentage added to reference rate (as a percent) | 0.75% |
DEBT - 5.375% Senior Unsecured
DEBT - 5.375% Senior Unsecured Notes due 2026 (Details) - Unsecured debt - October 2018 Senior Unsecured Notes due 2026 - USD ($) $ in Millions | 9 Months Ended | ||
Nov. 03, 2019 | Feb. 03, 2019 | Oct. 11, 2018 | |
Prior to October 15, 2021 | |||
DEBT | |||
Threshold percentage for debt that must remain after each redemption | 50.00% | ||
HDS | |||
DEBT | |||
Aggregate principal amount | $ 750 | ||
Note issued, interest rate | 5.375% | 5.375% | 5.375% |
HDS | Prior to October 15, 2021 | |||
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 | 105.375% | ||
HDS | 2021 | |||
DEBT | |||
Optional prepayment price percentage | 102.688% | ||
HDS | 2022 | |||
DEBT | |||
Optional prepayment price percentage | 101.344% | ||
HDS | 2023 and thereafter | |||
DEBT | |||
Optional prepayment price percentage | 100.00% |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) - Derivatives designated as hedging instruments - Interest rate swap - Cash flow hedges - USD ($) $ in Millions | Oct. 23, 2018 | Nov. 03, 2019 | Oct. 24, 2018 |
DERIVATIVE INSTRUMENTS | |||
Notional amount of derivative liability | $ 750 | ||
Fixed interest rate percentage | 3.07% | ||
Cash flow hedge liabilities at fair value | $ 48 | ||
Other current liabilities | |||
DERIVATIVE INSTRUMENTS | |||
Cash flow hedge liabilities at fair value | 11 | ||
Other liabilities | |||
DERIVATIVE INSTRUMENTS | |||
Cash flow hedge liabilities at fair value | $ 37 | ||
LIBOR | Term B-5 Loans due 2023 | |||
DERIVATIVE INSTRUMENTS | |||
Effective interest rate percentage | 4.82% | ||
Percentage added to reference rate (as a percent) | 1.75% |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value on consolidated balance sheets (Details) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
Recorded Amount | ||
Financial instruments not reflected at fair value on the balance sheet | ||
Senior ABL Facility | $ 362 | $ 348 |
Term Loans and Notes | 1,809 | 1,817 |
Total | 2,171 | 2,165 |
Estimated Fair Value | Significant Other Observable Inputs (Level 2) | ||
Financial instruments not reflected at fair value on the balance sheet | ||
Senior ABL Facility | 361 | 346 |
Term Loans and Notes | 1,861 | 1,815 |
Total | 2,222 | 2,161 |
Interest rate swap | Significant Other Observable Inputs (Level 2) | ||
Financial instruments not reflected at fair value on the balance sheet | ||
Fair value measurement of the financial liability | $ 48 | $ 20 |
LEASES (Details)
LEASES (Details) $ in Millions | 9 Months Ended |
Nov. 03, 2019USD ($) | |
LEASES | |
ROU assets for operating leases | $ 425 |
Operating lease liabilities | $ 438 |
Package of practical expedients | true |
Weighted average remaining lease term, operating leases | 5 years 1 month 6 days |
Weighted average discount rate, operating leases | 4.66% |
Cash paid for amounts included in measurement of liabilities: | |
Operating cash flows from operating leases | $ 116 |
ROU assets obtained in exchange for lease liabilities | 83 |
ASU 2016-02 | |
LEASES | |
ROU assets for operating leases | 430 |
Operating lease liabilities | 447 |
Cumulative-effect adjustment to retained earnings | $ 3 |
LEASES - Components of lease ex
LEASES - Components of lease expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Nov. 03, 2019 | Nov. 03, 2019 | |
LEASES | ||
Operating Lease Cost | $ 35 | $ 106 |
Short-term Lease Cost | 2 | 4 |
Variable Lease Cost | 2 | 4 |
Sublease Income | (1) | (3) |
Total Lease Cost | $ 38 | $ 111 |
LEASES - Maturities of Lease Li
LEASES - Maturities of Lease Liabilities (Details) $ in Millions | 9 Months Ended |
Nov. 03, 2019USD ($) | |
Maturities of lease liabilities | |
Remainder of 2019 | $ 35 |
2020 | 118 |
2021 | 108 |
2022 | 80 |
2023 | 59 |
Thereafter | 97 |
Operating Lease Payments | 497 |
Less imputed interest | (59) |
Total Discounted Lease Liability | 438 |
ROU assets anticipated in exchange for lease liabilities | $ 40 |
LEASES - Corporate headquarters
LEASES - Corporate headquarters (Details) - USD ($) $ in Millions | Feb. 04, 2019 | Feb. 28, 2018 |
LEASES | ||
Leased asset | $ 87 | |
Financing liability | $ 87 | |
Building | ||
LEASES | ||
Total purchase price | $ 88 |
LEASES - Periods prior to adopt
LEASES - Periods prior to adoption of ASU 842 (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 28, 2018 | Oct. 28, 2018 | Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | |
LEASES | |||||
Rental expense | $ 36 | $ 104 | $ 142 | $ 127 | $ 118 |
Future minimum aggregate rental payments under non-cancelable operating leases | |||||
2019 | 140 | ||||
2020 | 104 | ||||
2021 | 88 | ||||
2022 | 61 | ||||
2023 | 42 | ||||
Thereafter | 78 | ||||
Total lease payments | $ 513 |
INCOME TAXES - Tax items (Detai
INCOME TAXES - Tax items (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Feb. 03, 2019 | |
INCOME TAXES | |||
Combined federal, state and foreign effective tax rate for continuing operations (benefit) | 25.80% | 25.90% | |
Unrecognized tax benefits | $ 17 | $ 17 | |
Net accrual for interest and penalties related to unrecognized tax benefits | 0 | 0 | |
Deferred tax assets, valuation allowance | $ 7 | $ 7 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | $ (30) | |||
Ending balance, net of tax of $12, $1 , $12, and $1 | $ (51) | (51) | ||
Accumulated OCI, tax | $ 1 | 7 | $ 1 | |
AOCI, net of tax | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Ending balance, net of tax of $12, $1 , $12, and $1 | (51) | (20) | (51) | (20) |
Foreign currency translation adjustment | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | (15) | (15) | (15) | (17) |
Other comprehensive income (loss) before reclassifications | 2 | |||
Ending balance, net of tax of $12, $1 , $12, and $1 | (15) | (15) | (15) | (15) |
Cash flow hedge, net of tax | ||||
Changes in accumulated other comprehensive income (loss) | ||||
Beginning balance | (36) | (15) | ||
Other comprehensive income (loss) before reclassifications | (2) | (5) | (25) | (5) |
Amounts reclassified from accumulated OCI into earnings | 2 | 1 | 4 | 1 |
Other | (1) | (1) | ||
Ending balance, net of tax of $12, $1 , $12, and $1 | (36) | (5) | (36) | (5) |
Accumulated OCI, tax | $ 12 | $ 1 | $ 12 | $ 1 |
BASIC AND DILUTED WEIGHTED AV_3
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES - Reconciliation of Basic to Diluted Weighted-Average Common Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
Reconciliation of basic to diluted weighted-average common shares | ||||
Weighted-average common shares | 164,638 | 182,730 | 168,062 | 183,349 |
Effect of potentially dilutive stock plan securities | 504 | 849 | 583 | 843 |
Diluted weighted-average common shares | 165,142 | 183,579 | 168,645 | 184,192 |
BASIC AND DILUTED WEIGHTED AV_4
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES - Anti-dilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
Anti-dilutive securities | ||||
Stock plan securities excluded from dilution | 2,025 | 1,460 | 2,741 | 1,900 |
SUPPLEMENTAL BALANCE SHEET AN_3
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Receivables (Details) - USD ($) $ in Millions | Nov. 03, 2019 | Feb. 03, 2019 |
Receivables | ||
Trade receivables, net of allowance for doubtful accounts | $ 779 | $ 657 |
Vendor rebate receivables | 61 | 57 |
Other receivables | 23 | 18 |
Total receivables, net | $ 863 | $ 732 |
SUPPLEMENTAL BALANCE SHEET AN_4
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Other Current Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Nov. 03, 2019 | Feb. 03, 2019 | |
Other Current Liabilities | ||
Corporate headquarters financing liability | $ 87 | |
Accrued legal | $ 51 | 1 |
Accrued non-income taxes | 42 | 35 |
Accrued interest | 3 | 14 |
Unsettled share repurchases | 4 | 2 |
Other | 120 | 120 |
Total other current liabilities | 220 | 259 |
Legal accrual related to litigation activities | 50 | |
Other current assets | ||
Other Current Liabilities | ||
Insurance recovery | 50 | |
HD Supply, Inc. (Total HDS) | ||
Other Current Liabilities | ||
Corporate headquarters financing liability | 87 | |
Accrued legal | 51 | 1 |
Accrued non-income taxes | 42 | 35 |
Accrued interest | 3 | 14 |
Other | 120 | 120 |
Total other current liabilities | $ 216 | $ 257 |
SUPPLEMENTAL BALANCE SHEET AN_5
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Nov. 03, 2019 | Oct. 28, 2018 | |
Supplemental Cash Flow Information | ||
Cash paid for interest | $ 89 | $ 103 |
Original issue discounts relating to extinguishment of debt | 4 | |
Cash paid for income taxes, net of refunds | 35 | 9 |
HD Supply, Inc. (Total HDS) | ||
Supplemental Cash Flow Information | ||
Original issue discounts relating to extinguishment of debt | 4 | |
Cash equity distribution | $ 319 | $ 172 |
SUPPLEMENTAL BALANCE SHEET AN_6
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Stock Repurchases (Details) - Common Stock $ in Millions | 9 Months Ended | ||||
Nov. 03, 2019USD ($)itemshares | Oct. 28, 2018USD ($)shares | Dec. 31, 2018USD ($) | Nov. 30, 2018USD ($) | Aug. 31, 2017USD ($) | |
Share repurchases | |||||
Number of share repurchase programs | item | 2 | ||||
Number of Shares | shares | 8,319,813 | 4,847,933 | |||
Cost of Shares | $ 323 | $ 185 | |||
Share Repurchase Program of November 2018 | |||||
Share repurchases | |||||
Number of Shares | shares | 8,161,079 | ||||
Cost of Shares | $ 316 | ||||
Share Repurchase Program of August 2017 | |||||
Share repurchases | |||||
Authorized share repurchase amount | $ 500 | ||||
Number of Shares | shares | 4,682,396 | ||||
Cost of Shares | $ 178 | ||||
Share Repurchase Program of April 2014 | |||||
Share repurchases | |||||
Number of Shares | shares | 158,734 | 165,537 | |||
Cost of Shares | $ 7 | $ 7 | |||
Share Repurchase Program of August 2017 and November 2018 | |||||
Share repurchases | |||||
Authorized share repurchase amount | $ 500 | $ 500 |
RESTRUCTURING AND SEPARATION _2
RESTRUCTURING AND SEPARATION ACTIVITIES (Details) $ in Millions | Sep. 24, 2019item | Nov. 03, 2019USD ($) | Nov. 03, 2019USD ($) | Oct. 28, 2018USD ($) |
Restructuring activities | ||||
Restructuring charges | $ 4 | $ 2 | $ 9 | |
Separation of Facilities Maintenance and Construction and Industrial businesses | Separation of business | ||||
Restructuring activities | ||||
Number of companies after separation | item | 2 | |||
Restructuring charges | $ 4 | |||
Separation of Facilities Maintenance and Construction and Industrial businesses | Lease termination | ||||
Restructuring activities | ||||
Restructuring charges | $ 2 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Legal Matters (Details) $ in Millions | 3 Months Ended | |
Nov. 03, 2019USD ($) | Aug. 08, 2017complaint | |
Legal Matters | ||
Legal accrual related to litigation activities | $ 50 | |
Number of shareholder derivative complaints | complaint | 2 | |
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) | 9 Months Ended |
Nov. 03, 2019segment | |
SEGMENT INFORMATION | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Net Sales
SEGMENT INFORMATION - Net Sales for Each Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
SEGMENT INFORMATION | ||||
Net sales | $ 1,644 | $ 1,612 | $ 4,761 | $ 4,601 |
Eliminations | ||||
SEGMENT INFORMATION | ||||
Net sales | (1) | (1) | (2) | |
Facilities Maintenance | Reportable segment | ||||
SEGMENT INFORMATION | ||||
Net sales | 826 | 810 | 2,428 | 2,353 |
Construction & Industrial | Reportable segment | ||||
SEGMENT INFORMATION | ||||
Net sales | $ 818 | $ 803 | $ 2,334 | $ 2,250 |
SEGMENT INFORMATION - Adjusted
SEGMENT INFORMATION - Adjusted EBITDA, Depreciation & Software Amortization, Other Intangible Amortization for Each Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
SEGMENT INFORMATION | ||||
Adjusted EBITDA | $ 247 | $ 248 | $ 694 | $ 684 |
Depreciation & Software Amortization | 24 | 22 | 66 | 62 |
Other Intangible Amortization | 5 | 5 | 17 | 16 |
Facilities Maintenance | Reportable segment | ||||
SEGMENT INFORMATION | ||||
Adjusted EBITDA | 149 | 149 | 432 | 422 |
Depreciation & Software Amortization | 11 | 10 | 32 | 28 |
Other Intangible Amortization | 2 | 2 | 6 | 6 |
Construction & Industrial | Reportable segment | ||||
SEGMENT INFORMATION | ||||
Adjusted EBITDA | 98 | 99 | 262 | 262 |
Depreciation & Software Amortization | 13 | 12 | 34 | 34 |
Other Intangible Amortization | $ 3 | $ 3 | $ 11 | $ 10 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation to Consolidated Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
SEGMENT INFORMATION | ||||
Total Adjusted EBITDA | $ 247 | $ 248 | $ 694 | $ 684 |
Depreciation and amortization | 29 | 27 | 83 | 78 |
Stock-based compensation | 6 | 7 | 18 | 19 |
Restructuring and separation | 4 | 2 | 9 | |
Acquisition and integration costs | 4 | 2 | 5 | 5 |
Other | (1) | (1) | (2) | |
Operating Income | 205 | 213 | 586 | 575 |
Interest expense | 27 | 32 | 83 | 101 |
Interest (income) | (1) | |||
Loss on extinguishment & modification of debt | 69 | 69 | ||
Income from Continuing Operations Before Provision for Income Taxes | 178 | 112 | 503 | 406 |
Provision for income taxes | 47 | 30 | 130 | 105 |
Income from continuing operations | 131 | 82 | 373 | 301 |
Income from discontinued operations, net of tax | 1 | 1 | 1 | |
Net income | $ 132 | $ 82 | $ 374 | $ 302 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Nov. 03, 2019 | Oct. 28, 2018 | Nov. 03, 2019 | Oct. 28, 2018 | |
Disaggregation of Revenue | ||||
Net sales | $ 1,644 | $ 1,612 | $ 4,761 | $ 4,601 |
Inter-segment Eliminations | ||||
Disaggregation of Revenue | ||||
Net sales | (1) | (1) | (2) | |
Facilities Maintenance | ||||
Disaggregation of Revenue | ||||
Net sales | 826 | 810 | 2,428 | 2,353 |
Facilities Maintenance | Maintenance, Repair, and Operations | ||||
Disaggregation of Revenue | ||||
Net sales | 727 | 718 | 2,151 | 2,076 |
Facilities Maintenance | Property Improvement | ||||
Disaggregation of Revenue | ||||
Net sales | 99 | 92 | 277 | 277 |
Construction & Industrial | ||||
Disaggregation of Revenue | ||||
Net sales | 818 | 803 | 2,334 | 2,250 |
Construction & Industrial | Non-Residential Construction | ||||
Disaggregation of Revenue | ||||
Net sales | 572 | 559 | 1,614 | 1,542 |
Construction & Industrial | Residential Construction | ||||
Disaggregation of Revenue | ||||
Net sales | 194 | 196 | 572 | 569 |
Construction & Industrial | Other | ||||
Disaggregation of Revenue | ||||
Net sales | $ 52 | $ 48 | $ 148 | $ 139 |