Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Aug. 03, 2013 | Aug. 26, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'MICHAELS STORES INC | ' |
Entity Central Index Key | '0000740670 | ' |
Document Type | '10-Q/A | ' |
Document Period End Date | 3-Aug-13 | ' |
Amendment Flag | 'true | ' |
Amendment Description | 'Michaels Stores, Inc. (“Company”) is filing this Amendment No. 1 (“Form 10-Q/A”) to its Quarterly Report on Form 10-Q for the quarter ended August 3, 2013, filed with the Securities and Exchange Commission (“SEC”) on August 30, 2013 (the “Form 10-Q”), for the purpose of correcting historical share-based compensation expense caused by the Company’s repurchase of shares that had not been held for at least six months following the exercise of stock options under its equity incentive plans. Since the participants held such shares for less than six months following exercise (“immature shares”), liability accounting applies to the plan. The Company has determined its previously issued unaudited interim consolidated financial statements for the three and six month periods ended August 3, 2013 and July 28, 2012, contained an error with respect to ASC 718, Compensation — Stock Compensation. Specifically, former participants in the Company’s Equity Incentive Plan and its successor Plan (The Michaels Companies, Inc. (“Parent”) Equity Incentive Plan, together the “Plan”) exercised stock options upon their termination from the Company, and the Company repurchased the immature shares. The Company consistently repurchased shares in this manner and therefore, under accounting rules, established a pattern of repurchasing immature shares during the third quarter of 2011. The Company determined all stock options should have been treated as liability awards in accordance with the rules of ASC 718-10-25- 9. Under liability accounting, the Company re-measures the fair value of stock compensation each period and recognizes changes in fair value as awards vest and until the award is settled. The Company originally recognized expense ratably over the vesting period based on the grant date fair value of the option in accordance with the fixed method of accounting. The Company determined the accounting error was material to fiscal 2011 and fiscal 2012 financial statements and those financial statements required restatement. As a result, the Company is also restating its financial statements for the three and six months ended August 3, 2013 and July 28, 2012. The impact to share-based compensation expense for the three and six months ended August 3, 2013 was $7 million ($5, Net of tax) and $12 million ($8, Net of tax), respectively. For the three and six months ended July 28, 2012 the impact was $6 million ($4, Net of tax) and $9 million ($5, Net of tax), respectively. As part of the restatement, the Company also recorded other adjustments related to merchandise inventories and closed store reserve which were previously determined to be immaterial to the respective periods. In total, the adjustments resulted in a decline of net income by $3 million and $4 million for the three and six month periods ended August 3, 2013, respectively, and by $4 million and $6 million for the three and six month periods ended July 28, 2012. | ' |
Current Fiscal Year End Date | '--02-01 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 100 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Aug. 03, 2013 | Feb. 02, 2013 | Jul. 28, 2012 |
In Millions, unless otherwise specified | |||
Current assets: | ' | ' | ' |
Cash and equivalents | $51 | $56 | $113 |
Merchandise inventories | 909 | 862 | 925 |
Prepaid expenses and other | 96 | 86 | 89 |
Deferred income taxes | 38 | 37 | 42 |
Income tax receivable | 36 | 3 | 27 |
Total current assets | 1,130 | 1,044 | 1,196 |
Property and equipment, at cost | 1,542 | 1,502 | 1,438 |
Less accumulated depreciation and amortization | -1,195 | -1,164 | -1,112 |
Property and equipment, net | 347 | 338 | 326 |
Goodwill | 94 | 94 | 95 |
Debt issuance costs, net of accumulated amortization of $54, $54, and $82, respectively | 40 | 46 | 51 |
Deferred income taxes | 29 | 30 | 32 |
Other assets | 5 | 3 | 3 |
Total non-current assets | 168 | 173 | 181 |
Total assets | 1,645 | 1,555 | 1,703 |
Current liabilities: | ' | ' | ' |
Accounts payable | 289 | 263 | 277 |
Accrued liabilities and other | 335 | 367 | 353 |
Share-based compensation liability | 19 | 35 | 29 |
Current portion of long-term debt | 238 | 150 | 1 |
Deferred income taxes | 4 | 4 | 1 |
Income taxes payable | ' | 37 | ' |
Total current liabilities | 885 | 856 | 661 |
Long-term debt | 2,882 | 2,891 | 3,363 |
Deferred income taxes | 2 | 2 | 11 |
Share-based compensation liability | 26 | 27 | 23 |
Other long-term liabilities | 81 | 83 | 86 |
Total long-term liabilities | 2,991 | 3,003 | 3,483 |
Total liabilities | 3,876 | 3,859 | 4,144 |
Commitments and contingencies | ' | ' | ' |
Stockholders' deficit: | ' | ' | ' |
Additional paid-in capital | 61 | 49 | 52 |
Accumulated deficit | -2,296 | -2,359 | -2,499 |
Accumulated other comprehensive income | 4 | 6 | 6 |
Total stockholders' deficit | -2,231 | -2,304 | -2,441 |
Total liabilities and stockholders' deficit | $1,645 | $1,555 | $1,703 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Aug. 03, 2013 | Feb. 02, 2013 | Jul. 28, 2012 |
In Millions, except Share data, unless otherwise specified | |||
CONSOLIDATED BALANCE SHEETS | ' | ' | ' |
Debt issuance costs, accumulated amortization (in dollars) | $54 | $54 | $82 |
Common Stock, par value (in dollars per share) | $0.10 | $0.10 | $0.10 |
Common Stock, shares authorized | 100 | 100 | 100 |
Common Stock, shares issued | 100 | 100 | 100 |
Common Stock, shares outstanding | 100 | 100 | 100 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' | ' |
Net sales | $904 | $892 | $1,897 | $1,870 |
Cost of sales and occupancy expense | 567 | 557 | 1,151 | 1,124 |
Gross profit | 337 | 335 | 746 | 746 |
Selling, general, and administrative expense | 254 | 251 | 526 | 510 |
Share-based compensation | 8 | 3 | 11 | 7 |
Related party expenses | 3 | 4 | 7 | 7 |
Store pre-opening costs | 1 | 1 | 3 | 2 |
Operating income | 71 | 76 | 199 | 220 |
Interest expense | 45 | 61 | 92 | 127 |
Refinancing costs and losses on early extinguishment of debt | ' | ' | 7 | ' |
Other (income) and expense, net | 1 | ' | 1 | -1 |
Income before income taxes | 25 | 15 | 99 | 94 |
Provision for income taxes | 8 | 6 | 36 | 34 |
Net income | 17 | 9 | 63 | 60 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustment and other | -1 | -2 | -2 | ' |
Comprehensive income | $16 | $7 | $61 | $60 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Aug. 03, 2013 | Jul. 28, 2012 |
Operating activities: | ' | ' |
Net income | $63 | $60 |
Adjustments: | ' | ' |
Depreciation and amortization | 50 | 46 |
Share-based compensation | 13 | 11 |
Debt issuance costs amortization | 4 | 8 |
Refinancing costs and losses on early extinguishment of debt | 7 | ' |
Changes in assets and liabilities: | ' | ' |
Merchandise inventories | -47 | -82 |
Prepaid expenses and other | -13 | -9 |
Accounts payable | 43 | -23 |
Accrued interest | -2 | -4 |
Accrued liabilities and other | -59 | -42 |
Income taxes | -71 | -46 |
Other long-term liabilities | -2 | 1 |
Net cash used in operating activities | -14 | -80 |
Investing activities: | ' | ' |
Additions to property and equipment | -50 | -45 |
Net cash used in investing activities | -50 | -45 |
Financing activities: | ' | ' |
Redemption of senior subordinated notes due 2016 | -142 | ' |
Repurchase of subordinated discount notes due 2016 | ' | -127 |
Repayments on senior secured term loan facility | -4 | ' |
Borrowings on asset-based revolving credit facility | 375 | ' |
Payments on asset-based revolving credit facility | -154 | ' |
Payment of capital leases | -2 | -1 |
Change in cash overdraft | -14 | -5 |
Net cash provided by (used in) financing activities | 59 | -133 |
Net decrease in cash and equivalents | -5 | -258 |
Cash and equivalents at beginning of period | 56 | 371 |
Cash and equivalents at end of period | 51 | 113 |
Supplemental Cash Flow Information: | ' | ' |
Cash paid for interest | 89 | 122 |
Cash paid for income taxes | $109 | $80 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Aug. 03, 2013 | |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | ' |
Note 1. Summary of Significant Accounting Policies | |
Basis of Presentation | |
The consolidated financial statements include the accounts of Michaels Stores, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. All expressions of the “Company”, “Michaels”, “us,” “we,” “our,” and all similar expressions are references to Michaels Stores, Inc. and its consolidated, wholly-owned subsidiaries, unless otherwise expressly stated or the context otherwise requires. | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 2, 2013. | |
The balance sheet at February 2, 2013 has been derived from the restated audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. | |
In the opinion of management, all adjustments (consisting of normal recurring accruals and other items) considered necessary for a fair presentation have been included. | |
Because of the seasonal nature of our business, the results of operations for the quarter ended August 3, 2013 are not indicative of the results to be expected for the entire year. | |
We report on the basis of a 52- or 53-week fiscal year, which ends on the Saturday closest to January 31. All references herein to “fiscal 2013” relate to the 52 weeks ending February 1, 2014, and all references to”fiscal 2012” relate to the 53 weeks ended February 2, 2013. In addition, all references herein to “the second quarter of fiscal 2013” relate to the 13 weeks ended August 3, 2013, and all references to “the second quarter of fiscal 2012” relate to the 13 weeks ended July 28, 2012. Finally, all references to “the six months ended August 3, 2013” relate to the 26 weeks ended August 3, 2013, and “the six months ended July 28, 2012” relate to the 26 weeks ended July 28, 2012. | |
Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss or a Tax Credit Carryforward Exists.” ASU 2013-11 requires unrecognized tax benefits to be presented as a decrease in a net operating loss, similar tax loss or tax credit carryforward if certain criteria are met. ASU 2013-11, which is prospective, is effective for reporting periods beginning after December 15, 2013, with earlier adoption permitted. Retrospective application is also permitted. We are still evaluating the standard to determine when we will adopt the standard but we do not believe the implementation of this standard will result in a material impact to our financial statements. |
Restatement_Sharebased_Compens
Restatement - Share-based Compensation | 6 Months Ended | ||||||||||||||||||||
Aug. 03, 2013 | |||||||||||||||||||||
Restatement - Share-based Compensation | ' | ||||||||||||||||||||
Restatement - Share-based Compensation | ' | ||||||||||||||||||||
Note 2. Restatement — Share-based Compensation | |||||||||||||||||||||
The Company has determined its previously issued unaudited interim consolidated financial statements for the three and six month periods ended August 3, 2013 and July 28, 2012, contained an error with respect to Accounting Standards Codification (“ASC”) 718, Compensation — Stock Compensation. Specifically, former participants in the Company’s Equity Incentive Plan and its successor Plan (The Michaels Companies, Inc. (“Parent”) Equity Incentive Plan, together the “Plan”) exercised stock options upon their termination from the Company, and the Company repurchased the immature shares. The Company consistently repurchased shares in this manner and therefore, under accounting rules, established a pattern of repurchasing immature shares during the third quarter of 2011. The Company determined all stock options should have been treated as liability awards in accordance with the rules of ASC 718-10-25-9. Under liability accounting, the Company re-measures the fair value of stock compensation each period and recognizes changes in fair value as awards vest and until the award is settled. The Company originally recognized expense ratably over the vesting period based on the grant date fair value of the option in accordance with the fixed method of accounting. The Company determined the accounting error was material to fiscal 2011 and fiscal 2012 financial statements and those financial statements required restatement. As a result, the Company is also restating its financial statements for the three and six months ended August 3, 2013 and July 28, 2012. The impact to share-based compensation expense for the three and six months ended August 3, 2013, was $7 million ($5, net of tax) and $12 million ($8, net of tax), respectively. The impact to share-based compensation expense for the three and six months ended July 28, 2012, was $6 million ($4, net of tax) and $9 million ($5, net of tax), respectively. As part of the restatement, the Company also recorded other adjustments related to merchandise inventories and the reserve for closed facilities which were previously determined to be immaterial to the respective periods. In total, the adjustments resulted in a decline of Net income by $3 and $4 million for the three and six months ended August 3, 2013, and $4 and $6 million for the three and six months ended July 28, 2012. | |||||||||||||||||||||
The following footnotes have been restated: | |||||||||||||||||||||
· Note 6 — Income Taxes | |||||||||||||||||||||
· Note 9 — Segments and Geographic Information | |||||||||||||||||||||
· Note 11 — Condensed Consolidating Financial Information | |||||||||||||||||||||
The following tables illustrate the correction as associated with certain line items in the unaudited interim consolidated financial statements (amounts in millions): | |||||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||||
As of August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Merchandise inventories | $ | 905 | $ | 4 | $ | — | $ | 909 | |||||||||||||
Deferred income taxes | 37 | 1 | — | 38 | |||||||||||||||||
Income tax receivable | 34 | 2 | — | 36 | |||||||||||||||||
Total current assets | 1,123 | 7 | — | 1,130 | |||||||||||||||||
Deferred income taxes | 13 | 16 | — | 29 | |||||||||||||||||
Total non-current assets | 152 | 16 | — | 168 | |||||||||||||||||
Accrued liabilities and other | 338 | (3 | ) | — | 335 | ||||||||||||||||
Share-based compensation liability | — | 19 | — | 19 | |||||||||||||||||
Income taxes payable | 1 | (1 | ) | — | — | ||||||||||||||||
Total current liabilities | 870 | 15 | — | 885 | |||||||||||||||||
Share-based compensation liability | — | 26 | — | 26 | |||||||||||||||||
Total long-term liabilities | 2,965 | 26 | — | 2,991 | |||||||||||||||||
Additional paid-in capital | 60 | 1 | — | 61 | |||||||||||||||||
Accumulated deficit | (2,277 | ) | (19 | ) | — | (2,296 | ) | ||||||||||||||
Total stockholders’ deficit | (2,213 | ) | (18 | ) | — | (2,231 | ) | ||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||||
As of July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Merchandise inventories | $ | 922 | $ | 3 | $ | — | $ | 925 | |||||||||||||
Total current assets | 1,193 | 3 | — | 1,196 | |||||||||||||||||
Deferred income taxes | 18 | 14 | — | 32 | |||||||||||||||||
Total non-current assets | 167 | 14 | — | 181 | |||||||||||||||||
Accrued liabilities and other | 351 | 2 | — | 353 | |||||||||||||||||
Share-based compensation liability | — | 29 | — | 29 | |||||||||||||||||
Income taxes payable | 2 | (2 | ) | — | — | ||||||||||||||||
Total current liabilities | 632 | 29 | — | 661 | |||||||||||||||||
Share-based compensation liability | — | 23 | — | 23 | |||||||||||||||||
Total long-term liabilities | 3,460 | 23 | — | 3,483 | |||||||||||||||||
Additional paid-in capital | 62 | (10 | ) | — | 52 | ||||||||||||||||
Accumulated deficit | (2,474 | ) | (25 | ) | — | (2,499 | ) | ||||||||||||||
Total stockholders’ deficit | (2,406 | ) | (35 | ) | — | (2,441 | ) | ||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Quarter Ended August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 567 | $ | 1 | $ | (1 | ) | $ | 567 | ||||||||||||
Gross Profit | 337 | (1 | ) | 1 | 337 | ||||||||||||||||
Selling, general and administrative expense | 258 | (2 | ) | (2 | ) | 254 | |||||||||||||||
Share-based compensation | — | 8 | — | 8 | |||||||||||||||||
Operating income | 75 | (7 | ) | 3 | 71 | ||||||||||||||||
Income before income taxes | 29 | (7 | ) | 3 | 25 | ||||||||||||||||
Provision for income taxes | 9 | (2 | ) | 1 | 8 | ||||||||||||||||
Net income | 20 | (5 | ) | 2 | 17 | ||||||||||||||||
Comprehensive income | 19 | (5 | ) | 2 | 16 | ||||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Six Months Ended August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 1,153 | $ | 2 | $ | (4 | ) | $ | 1,151 | ||||||||||||
Gross Profit | 744 | (2 | ) | 4 | 746 | ||||||||||||||||
Selling, general and administrative expense | 529 | (1 | ) | (2 | ) | 526 | |||||||||||||||
Share-based compensation | — | 11 | — | 11 | |||||||||||||||||
Operating income | 205 | (12 | ) | 6 | 199 | ||||||||||||||||
Income before income taxes | 105 | (12 | ) | 6 | 99 | ||||||||||||||||
Provision for income taxes | 38 | (4 | ) | 2 | 36 | ||||||||||||||||
Net income | 67 | (8 | ) | 4 | 63 | ||||||||||||||||
Comprehensive income | 65 | (8 | ) | 4 | 61 | ||||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Quarter Ended July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 553 | $ | 4 | $ | — | $ | 557 | |||||||||||||
Gross Profit | 339 | (4 | ) | — | 335 | ||||||||||||||||
Selling, general and administrative expense | 252 | (1 | ) | — | 251 | ||||||||||||||||
Share-based compensation | — | 3 | — | 3 | |||||||||||||||||
Operating income | 82 | (6 | ) | — | 76 | ||||||||||||||||
Income before income taxes | 21 | (6 | ) | — | 15 | ||||||||||||||||
Provision for income taxes | 8 | (2 | ) | — | 6 | ||||||||||||||||
Net income | 13 | (4 | ) | — | 9 | ||||||||||||||||
Comprehensive income | 11 | (4 | ) | — | 7 | ||||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Six Months Ended July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 1,119 | $ | 4 | $ | 1 | $ | 1,124 | |||||||||||||
Gross Profit | 751 | (4 | ) | (1 | ) | 746 | |||||||||||||||
Selling, general and administrative expense | 512 | (2 | ) | — | 510 | ||||||||||||||||
Share-based compensation | — | 7 | — | 7 | |||||||||||||||||
Operating income | 230 | (9 | ) | (1 | ) | 220 | |||||||||||||||
Income before income taxes | 104 | (9 | ) | (1 | ) | 94 | |||||||||||||||
Provision for income taxes | 38 | (4 | ) | — | 34 | ||||||||||||||||
Net income | 66 | (5 | ) | (1 | ) | 60 | |||||||||||||||
Comprehensive income | 66 | (5 | ) | (1 | ) | 60 | |||||||||||||||
Cash Flow Data | |||||||||||||||||||||
Six Months Ended August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Operating Activities: | |||||||||||||||||||||
Net income | $ | 67 | (7 | ) | 3 | $ | 63 | ||||||||||||||
Share-based compensation | 1 | 12 | — | 13 | |||||||||||||||||
Merchandise inventories | (40 | ) | (2 | ) | (5 | ) | (47 | ) | |||||||||||||
Accrued liabilities and other | (38 | ) | (21 | ) | — | (59 | ) | ||||||||||||||
Income taxes | (71 | ) | (2 | ) | 2 | (71 | ) | ||||||||||||||
Net cash provided by (used in) operating activities | 6 | (20 | ) | — | (14 | ) | |||||||||||||||
Repurchase of common stock | (45 | ) | 45 | — | — | ||||||||||||||||
Proceeds from stock options exercised | 25 | (25 | ) | — | — | ||||||||||||||||
Net cash provided by financing activities | 39 | 20 | — | 59 | |||||||||||||||||
Cash Flow Data | |||||||||||||||||||||
Six Months Ended July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Operating Activities: | |||||||||||||||||||||
Net income | $ | 66 | (5 | ) | (1 | ) | $ | 60 | |||||||||||||
Share-based compensation | 3 | 8 | — | 11 | |||||||||||||||||
Merchandise inventories | (82 | ) | (1 | ) | 1 | (82 | ) | ||||||||||||||
Income taxes | (43 | ) | (3 | ) | — | (46 | ) | ||||||||||||||
Net cash used in operating activities | (79 | ) | (1 | ) | — | (80 | ) | ||||||||||||||
Repurchase of common stock | (3 | ) | 3 | — | — | ||||||||||||||||
Proceeds from stock options exercised | 2 | (2 | ) | — | — | ||||||||||||||||
Net cash provided by (used in) financing activities | (134 | ) | 1 | — | (133 | ) | |||||||||||||||
Debt
Debt | 6 Months Ended | ||||||||||||
Aug. 03, 2013 | |||||||||||||
Debt | ' | ||||||||||||
Debt | ' | ||||||||||||
Note 3. Debt | |||||||||||||
Our outstanding debt is detailed in the table below. We were in compliance with the terms and conditions of all debt agreements for all periods presented. | |||||||||||||
August 3, 2013 | February 2, 2013 | July 28, 2012 | Interest Rate | ||||||||||
(in millions) | |||||||||||||
Senior secured term loan | $ | 1,636 | $ | 1,640 | $ | 1,996 | Variable | ||||||
Senior notes | 1,007 | 1,007 | 795 | 7.75% | |||||||||
Senior subordinated notes | 255 | 393 | 393 | 11.38% | |||||||||
Subordinated discount notes | — | — | 180 | 13.00% | |||||||||
Asset-based revolving credit facility | 222 | 1 | — | Variable | |||||||||
Total debt | 3,120 | 3,041 | 3,364 | ||||||||||
Less current portion | 238 | 150 | 1 | ||||||||||
Long-term debt | $ | 2,882 | $ | 2,891 | $ | 3,363 | |||||||
113/8% Senior Subordinated Notes due 2016 | |||||||||||||
On January 28, 2013, we caused to be delivered to the holders of our outstanding 113/8% Senior Subordinated Notes due November 1, 2016 (the “Senior Subordinated Notes”) an irrevocable notice relating to the redemption of $137 million in aggregate principal amount of the Senior Subordinated Notes. On February 27, 2013, we redeemed the $137 million of Senior Subordinated Notes at a redemption price equal to 103.792%. In accordance with Accounting Standards Codification (“ASC”) 470 Debt, we recorded a loss on early extinguishment of debt of approximately $7 million related to the partial redemption of our Senior Subordinated Notes. The $7 million loss is comprised of a $5 million redemption premium and $2 million to write off related debt issuance costs. | |||||||||||||
Restated Revolving Credit Facility | |||||||||||||
As of August 3, 2013, the borrowing base of our restated senior secured asset-based revolving credit facility (“the Restated Revolving Credit Facility”) was $650 million, of which we had $222 million in borrowings, $61 million of outstanding letters of credit and the unused borrowing capacity was $367 million. | |||||||||||||
Restated Term Loan Credit Facility | |||||||||||||
The Company is required to make scheduled quarterly payments, each equal to 0.25% of the original principal amount of the term loans, subject to adjustments relating to the incurrence of additional term loans under the Restated Term Loan Credit Facility, for the first six years and three quarters, with the balance paid on January 28, 2020. The Company paid $4 million for the quarter ended August 3, 2013 and the current portion of debt includes $16 million that will be paid during the next four quarters. |
Comprehensive_Income
Comprehensive Income | 6 Months Ended | ||||
Aug. 03, 2013 | |||||
Comprehensive Income | ' | ||||
Comprehensive Income | ' | ||||
Note 4. Comprehensive Income | |||||
Accumulated other comprehensive income, net of tax, is reflected in the Consolidated Balance Sheets as follows: | |||||
Foreign Currency | |||||
Translation | |||||
and Other | |||||
(in millions) | |||||
Balance at February 2, 2013 | $ | 6 | |||
Foreign currency translation adjustment | (2 | ) | |||
Balance at August 3, 2013 | $ | 4 |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | |||||||
Aug. 03, 2013 | ||||||||
Fair Value Measurements | ' | |||||||
Fair Value Measurements | ' | |||||||
Note 5. Fair Value Measurements | ||||||||
As defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level valuation hierarchy for fair value measurements. These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect less transparent active market data, as well as internal assumptions. These two types of inputs create the following fair value hierarchy: | ||||||||
· Level 1 — Quoted prices for identical instruments in active markets; | ||||||||
· Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose significant inputs are observable; and | ||||||||
· Level 3 — Instruments with significant unobservable inputs. | ||||||||
We apply fair value techniques on a non-recurring basis for the establishment of potential impairment loss related to goodwill pursuant to ASC 350, Intangibles—Goodwill and Other and determining the fair value of long-lived assets pursuant to ASC 360, Property, Plant, and Equipment. During the quarter and six months ended August 3, 2013, there were no material events or changes in circumstances indicating the carrying amounts of our goodwill or long-lived assets may not be recoverable. | ||||||||
The table below provides the carrying and fair values of our senior secured term loan facility (“Restated Term Loan Credit Facility”), our 7 3/4% Senior Notes that mature in 2018 (“2018 Senior Notes”) and our Senior Subordinated Notes, (together, with our 2018 Senior Notes, “our notes”) as of August 3, 2013. The fair value of our Restated Term Loan Credit Facility was determined based on quoted market prices of similar instruments which are considered Level 2 inputs within the fair value hierarchy. The fair value of our notes was determined based on recent trades which are considered Level 1 inputs within the fair value hierarchy. | ||||||||
Carrying Value | Fair Value | |||||||
(in millions) | ||||||||
Senior secured term loan | $ | 1,636 | $ | 1,645 | ||||
Senior notes | 1,007 | 1,079 | ||||||
Senior subordinated notes | 255 | 267 | ||||||
Income_Taxes
Income Taxes | 6 Months Ended |
Aug. 03, 2013 | |
Income Taxes | ' |
Income Taxes | ' |
Note 6. Income Taxes | |
The effective tax rate was 32.0% for the second quarter of fiscal 2013. The effective tax rate was 40.0% for the second quarter of fiscal 2012. The current year tax rate is lower than the prior year tax rate due primarily to the realization of state tax credits this year. | |
The effective tax rate was 36.4% for the first six months of fiscal 2013. The effective tax rate was 36.2% for the first six months of fiscal 2012. The rate was higher than the prior year six month tax rate due primarily to the realization of state tax credits this year partly offset by the prior year favorable impact related to our reserve for uncertain tax positions. We currently estimate our annualized effective tax rate for fiscal 2013 to be 37.4%. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 03, 2013 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
Note 7. Commitments and Contingencies | |
We are involved in ongoing legal and regulatory proceedings. Other than those described in the following paragraphs, there were no material changes to our disclosures of commitments and contingencies from our Annual Report on Form 10-K for the fiscal year ended February 2, 2013 and our Quarterly Report on Form 10-Q for the quarterly period ended May 4, 2013. | |
Consumer Class Action Claims | |
Massachusetts Zip Code Claims | |
Relying in part on the California Supreme Court decision, an additional purported class action lawsuit was filed on May 20, 2011 against the Company: Melissa Tyler v. Michaels Stores, Inc. in the U.S. District Court-District of Massachusetts, alleging violation of a Massachusetts statute regarding the collection of personally identification information in connection with a credit card transaction. On March 11, 2013, the Massachusetts Supreme Judicial Court ruled on certified questions on the interpretation of the statute and remanded the case to the U.S. District Court for further proceedings. Following the Judicial Court’s decision, an additional purported class action lawsuit asserting the same allegations in Tyler was filed in the U.S. District Court-District of Massachusetts by Susan D’Esposito, and the two cases have been consolidated. On August 12, 2013, a tentative settlement that is subject to Court approval was reached for an amount that will not have a material effect on our Consolidated Financial Statements. | |
Governmental inquiries and related matters | |
Non-U.S. trust inquiry | |
In early 2005, the District Attorney’s office of the County of New York and the SEC opened inquiries concerning non-U.S. trusts that directly or indirectly held shares of Michaels common stock and common stock options. On July 29, 2010, the SEC filed a civil enforcement action in federal district court for the Southern District of New York against Charles Wyly, Sam Wyly, the Wylys’ attorney—Michael French, and others alleging, among other things, violations of various federal securities laws, including those governing ownership reporting and trading of securities, in connection with the non-U.S. trusts and their subsidiaries. Additional information may be obtained at the SEC’s website. Sam Wyly, the estate of Charles Wyly and Mr. French, also a former director of the Company, have requested indemnification from the Company for certain legal costs with respect to these matters. The Company has resolved all claims with regards to Sam Wyly and the estate of Charles Wyly for an immaterial amount. | |
On April 12, 2012, Mr. French filed a lawsuit against the Company and the non-U.S. trusts in the District Court of Dallas County, Texas. The matter was dismissed as to the non-U.S. trusts. Mr. French seeks damages from the Company for breach of contract, attorneys’ fees and costs related to the Company’s alleged indemnification obligations to Mr. French and attorneys’ fees and costs related to the lawsuit. On August 9, 2013, the dispute was settled for an amount that will not have a material effect on our Consolidated Financial Statements. | |
General | |
In addition to the litigation discussed above, we are, and in the future, may be involved in various other lawsuits, claims and proceedings incident to the ordinary course of business. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. | |
ASC 450, Contingencies, governs the disclosure and recognition of loss contingencies, including potential losses from litigation and regulatory matters. It imposes different requirements for the recognition and disclosure of loss contingencies based on the likelihood of occurrence of the contingent future event or events. It distinguishes among degrees of likelihood using the following three terms: “probable”, meaning that “the future event or events are likely to occur”; “remote”, meaning that “the chance of the future event or events occurring is slight”; and “reasonably possible”, meaning that “the chance of the future event or events occurring is more than remote but less than likely”. In accordance with ASC 450, the Company accrues for a loss contingency when we conclude that the likelihood of a loss is probable and the amount of the loss can be reasonably estimated. When the loss cannot be reasonably estimated we estimate the range of amounts, and if no amount in the range constitutes a better estimate than any other amount, we accrue for the amount at the low end of the range. We adjust our accruals from time to time as we receive additional information, but the loss we incur may be significantly greater than or less than the amount we have accrued. We disclose loss contingencies if there is at least a reasonable possibility that a material loss has been incurred. No accrual or disclosure is required for losses that are remote. | |
For some of the matters disclosed above, as well as other matters previously disclosed in the Company’s filings with the Securities and Exchange Commission (“SEC”), the Company is currently able to estimate a reasonably possible loss or range of loss in excess of amounts accrued (if any). For some of the matters included within this estimation, an accrual has been made because a loss is believed to be both probable and reasonably estimable, but an exposure to loss exists in excess of the amount accrued; in these cases, the estimate reflects the reasonably possible range of loss in excess of the accrued amount. For other matters included within this estimation, no accrual has been made because a loss, although estimable, is believed to be reasonably possible, but not probable; in these cases the estimate reflects the reasonably possible loss or range of loss within the ranges identified. For the various ranges identified, the aggregate of these estimated amounts is approximately $10 million, which is also inclusive of amounts accrued by the Company. | |
For other matters disclosed above or as previously disclosed in the Company’s filings with the SEC, the Company is not currently able to estimate the reasonably possible loss or range of loss, and has indicated such. Many of these matters remain in preliminary stages (even in some cases where a substantial period of time has passed since the commencement of the matter), with few or no substantive legal decisions by the court defining the scope of the claims, the class (if any), or the potentially available damages, and fact discovery is still in progress or has not yet begun. For all these reasons, the Company cannot at this time estimate the reasonably possible loss or range of loss, if any, for these matters. | |
It is the opinion of the Company’s management, based on current knowledge and after taking into account its current legal accruals, the eventual outcome of all matters described in this Note would not be likely to have a material impact on the consolidated financial condition of the Company. Nonetheless, given the substantial or indeterminate amounts sought in certain of these matters, and the inherent unpredictability of such matters, an adverse outcome in certain of these matters could, from time to time, have a material effect on the Company’s consolidated results of operations or cash flows in particular quarterly or annual periods. |
The_Michaels_Companies_and_its
The Michaels Companies and its Subsidiaries | 6 Months Ended |
Aug. 03, 2013 | |
The Michaels Companies and its Subsidiaries | ' |
The Michaels Companies and its Subsidiaries | ' |
Note 8. The Michaels Companies and its Subsidiaries | |
In July 2013, Michaels was reorganized into a holding company structure (“Reorganization”). The Michaels Companies, Inc. (“Parent”), Michaels FinCo Holdings, LLC (“FinCo Holdings”), Michaels FinCo, Inc. (“ FinCo Inc”) and Michaels Funding, Inc. (“Holdings”) and Michaels Stores Merger Co, Inc. (“MergerCo”) were formed in connection with the Reorganization: (i) MergerCo was merged with and into Michaels with Michaels being the surviving corporation; (ii) each share of Michaels’ common stock was converted into the right to receive one share of Parent common stock, subject to the same vesting conditions, if any, as applied to the share so converted, and each such share of Michaels’ common stock was cancelled and retired and ceased to exist; and (iii) each option to purchase one or more shares of common stock of Michaels was assumed by Parent and converted into an option to purchase an equivalent number of shares of common stock of Parent with the remaining terms of each such option remaining unchanged except as was necessary to reflect the Reorganization. Approximately 118 million shares of Michaels’ common stock were converted into Parent common stock. The Michaels’ shares were then cancelled and retired and an amount equal to the par value of the original shares was transferred from the common stock account to paid-in capital. Michaels then issued 100 shares of stock with a $0.10 par value to Holdings. In addition, common stock issued and outstanding and additional paid-in capital for February 2, 2013 and July 28, 2012 on the Consolidated Balance Sheets have been adjusted to reflect this transaction as if it happened prior to those dates. | |
As a result of the Reorganization, FinCo Holdings is wholly owned by the Parent. FinCo Inc and Holdings are wholly owned by FinCo Holdings. Michaels is wholly owned by Holdings. | |
Subsequent to the Reorganization, on July 29, 2013, FinCo Holdings and FinCo Inc issued $800 million aggregate principal amount of 7.50%/8.25% PIK Toggle Notes due 2018 (“PIK Notes”). The PIK Notes were issued in a private transaction. Interest payments on the PIK Notes are due February 1 and August 1 of each year until maturity. The first two interest payments and the last interest payment are required to be paid entirely in cash. All other interest payments must be made in cash, except that all or a portion of the interest on the PIK Notes may be paid by increasing the principal amount of the outstanding PIK Notes or by issuing additional PIK Notes depending on the amount of cash dividends that can be paid by the Company under our credit agreements governing our Senior Secured Credit Facilities, the terms of the indentures governing our outstanding notes and the terms of our other indebtedness outstanding at the time. The proceeds from the debt issuance were about $782 million, after deducting the initial purchasers’ discount and estimated fees and expenses. FinCo Holdings distributed the net proceeds to Parent and the proceeds were used to fund a cash dividend to the Parent’s equity and equity-award holders and pay related fees and expenses. | |
The PIK Notes are senior unsecured obligations of FinCo Holdings and FinCo Inc and are not guaranteed by the Company or any of the Company’s subsidiaries. In addition, neither the PIK Notes nor the dividend transaction is reflected in the financial statements of the Company. If interest on the PIK Notes is paid in cash, annual interest payments will total $60 million or a total of approximately $301 million from July 29, 2013 until August, 1, 2018, the maturity date. Any cash interest payments will be funded by the Company through a cash dividend to Holdings. |
Segments_and_Geographic_Inform
Segments and Geographic Information | 6 Months Ended | |||||||||||||
Aug. 03, 2013 | ||||||||||||||
Segments and Geographic Information | ' | |||||||||||||
Segments and Geographic Information | ' | |||||||||||||
Note 9. Segments and Geographic Information | ||||||||||||||
We consider our Michaels — U.S., Michaels — Canada, Aaron Brothers and online scrapbooking business operations to be our operating segments for purposes of determining reportable segments based on the criteria of ASC 280, Segment Reporting. We determined that our Michaels — U.S., Michaels — Canada, and Aaron Brothers operating segments have similar economic characteristics and meet the aggregation criteria set forth in ASC 280. Therefore, we combine those operating segments into one reporting segment. During the second quarter of 2013, the online scrapbooking business was discontinued; as an operating segment, it is immaterial to the financial statements as a whole. | ||||||||||||||
Our sales and assets by country are as follows: | ||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||
August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
(in millions) | ||||||||||||||
Net Sales: | ||||||||||||||
United States | $ | 819 | $ | 812 | $ | 1,717 | $ | 1,703 | ||||||
Canada | 85 | 80 | 180 | 167 | ||||||||||
Consolidated Total | $ | 904 | $ | 892 | $ | 1,897 | $ | 1,870 | ||||||
August 3, 2013 | February 2, 2013 | July 28, 2012 | ||||||||||||
(in millions) | ||||||||||||||
(Restated) | (Restated) | (Restated) | ||||||||||||
Total Assets: | ||||||||||||||
United States | $ | 1,522 | $ | 1,446 | $ | 1,586 | ||||||||
Canada | 123 | 109 | 117 | |||||||||||
Consolidated Total | $ | 1,645 | $ | 1,555 | $ | 1,703 | ||||||||
Our chief operating decision makers evaluate historical operating performance, plan and forecast future periods’ operating performance based on earnings before interest, income taxes, depreciation, amortization, and refinancing costs and losses on early extinguishment of debt (“EBITDA (excluding refinancing costs and losses on early extinguishment of debt)”). We believe EBITDA (excluding refinancing costs and losses on early extinguishment of debt) represents the financial measure that more closely reflects the operating effectiveness of factors over which management has control. As such, an element of base incentive compensation targets for certain management personnel are based on EBITDA (excluding refinancing costs and losses on early extinguishment of debt). A reconciliation of EBITDA (excluding refinancing costs and losses on early extinguishment of debt) to Net income is presented below. | ||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||
August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net income | $ | 17 | $ | 9 | $ | 63 | $ | 60 | ||||||
Interest expense | 45 | 61 | 92 | 127 | ||||||||||
Refinancing costs and losses on early extinguishments of debt | — | — | 7 | — | ||||||||||
Provision for income taxes | 8 | 6 | 36 | 34 | ||||||||||
Depreciation and amortization | 25 | 22 | 50 | 46 | ||||||||||
EBITDA (excluding refinancing costs and losses on early extinguishments of debt) | $ | 95 | $ | 98 | $ | 248 | $ | 267 | ||||||
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Aug. 03, 2013 | |
Related Party Transactions | ' |
Related Party Transactions | ' |
Note 10. Related Party Transactions | |
We pay annual management fees to Bain Capital Partners, LLC (“Bain Capital”) and The Blackstone Group L.P. (“The Blackstone Group” and, together with Bain Capital, the “Sponsors”) and Highfields Capital Management LP in the amount of $12 million and $1 million, respectively. We recognized $3 million and $4 million of expense related to annual management fees during the second quarter of fiscal 2013 and fiscal 2012, respectively and $7 million during the six months ended August 3, 2013 and July 28, 2012, respectively. These expenses are included in related party expenses on the Consolidated Statements of Comprehensive Income. | |
Bain Capital owns a majority equity position in LogicSource, an external vendor we utilize for print procurement services. Payments associated with this vendor during the second quarters of fiscal 2013 and fiscal 2012 were $1 million and were $2 million and $3 million during the six months ended August 3, 2013 and July 28, 2012, respectively. These expenses are included in Selling, general and administrative expense on the Consolidated Statements of Comprehensive Income. | |
The Blackstone Group owns a majority equity position in Brixmor Properties Group, a vendor we utilize to lease certain properties. Payments associated with this vendor during each of the second quarters of fiscal 2013 and fiscal 2012 were $1 million and were $2 million during the six months ended August 3, 2013 and July 28, 2012. These expenses are included in Cost of sales and occupancy expense in the Consolidated Statements of Comprehensive Income. | |
The Blackstone Group owns a majority equity position in RGIS, an external vendor we utilize to count our store inventory. Payments associated with this vendor during the second quarters of fiscal 2013 and fiscal 2012 were $2 million and $1 million, respectively and were $3 million during the six months ended August 3, 2013 and July 28, 2012. These expenses are included in Selling, general and administrative expense on the Consolidated Statements of Comprehensive Income. | |
The Blackstone Group owns a majority equity position in Vistar, an external vendor we utilize for all of the candy-type items in our stores. Payments associated with this vendor during the second quarter of fiscal 2013 and fiscal 2012 were $6 million and were $12 million and $11 million during the six months ended August 3, 2013 and July 28, 2012, respectively. These expenses are recognized in cost of sales as the sales are recorded. | |
Our current directors (other than Jill A. Greenthal and Carl S. Rubin) are affiliates of Bain Capital or The Blackstone Group. As such, some or all of such directors may have an indirect material interest in payments with respect to debt securities of the Company that have been purchased by affiliates of Bain Capital and The Blackstone Group. As of August 3, 2013, affiliates of The Blackstone Group held $38 million of our Restated Term Loan Credit Facility. | |
As a result of the Reorganization discussed in Note 8, at August 3, 2013, the Company has recorded a receivable from Parent of $4 million for payments made by the Company related to the repurchase of stock issued by Parent as a result of a stock option exercise by an employee of the Company. Amounts paid by the Company on Parent’s behalf related to the dividend payment discussed in Note 8 and the stock option exercise discussed above were $20 million for the six months ended August 3, 2013. |
Condensed_Consolidating_Financ
Condensed Consolidating Financial Information | 6 Months Ended | |||||||||||||
Aug. 03, 2013 | ||||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Note 11. Condensed Consolidating Financial Information | ||||||||||||||
All obligations of the Company under its notes, the Restated Revolving Credit Facility and the Restated Term Loan Credit Facility are guaranteed by each of its subsidiaries other than Aaron Brothers Card Services, LLC, Artistree of Canada, ULC and Michaels Stores of Puerto Rico, LLC and will be guaranteed by its direct parent, Holdings. As of August 3, 2013, the financial statements of Aaron Brothers Card Services, LLC, Artistree of Canada, ULC and Michaels Stores of Puerto Rico, LLC were immaterial. Each subsidiary guarantor is 100% owned, directly or indirectly, by the Company and such guarantees of each subsidiary guarantor are (and the guarantee of Holdings will be) joint and several and full and unconditional. | ||||||||||||||
The following condensed consolidating financial information represents the financial information of Michaels Stores, Inc. and its wholly-owned subsidiary guarantors, prepared on the equity basis of accounting. The information is presented in accordance with the requirements of Rule 3-10 under the SEC’s Regulation S-X. The financial information may not necessarily be indicative of results of operations, cash flows, or financial position had the subsidiary guarantors operated as independent entities. | ||||||||||||||
Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||
August 3, 2013 | ||||||||||||||
Parent Company | Guarantor | Eliminations | Consolidated | |||||||||||
Subsidiaries | ||||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 28 | $ | 23 | $ | — | $ | 51 | ||||||
Merchandise inventories | 619 | 290 | — | 909 | ||||||||||
Intercompany receivables | — | 484 | (484 | ) | — | |||||||||
Other | 142 | 28 | — | 170 | ||||||||||
Total current assets | 789 | 825 | (484 | ) | 1,130 | |||||||||
Property and equipment, net | 274 | 73 | — | 347 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 453 | — | (453 | ) | — | |||||||||
Other assets | 72 | 2 | — | 74 | ||||||||||
Total assets | $ | 1,682 | $ | 900 | $ | (937 | ) | $ | 1,645 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 5 | $ | 284 | $ | — | $ | 289 | ||||||
Accrued liabilities and other | 205 | 130 | — | 335 | ||||||||||
Share-based compensation liability | 6 | 13 | — | 19 | ||||||||||
Current portion of long-term debt | 238 | — | — | 238 | ||||||||||
Intercompany payable | 484 | — | (484 | ) | — | |||||||||
Other | 4 | — | — | 4 | ||||||||||
Total current liabilities | 942 | 427 | (484 | ) | 885 | |||||||||
Long-term debt | 2,882 | — | — | 2,882 | ||||||||||
Share-based compensation liability | 17 | 9 | — | 26 | ||||||||||
Other long-term liabilities | 72 | 11 | — | 83 | ||||||||||
Total stockholders’ deficit | (2,231 | ) | 453 | (453 | ) | (2,231 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,682 | $ | 900 | $ | (937 | ) | $ | 1,645 | |||||
Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||
February 2, 2013 | ||||||||||||||
Parent Company | Guarantor | Eliminations | Consolidated | |||||||||||
Subsidiaries | ||||||||||||||
(Restated) | ||||||||||||||
(In millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 37 | $ | 19 | $ | — | $ | 56 | ||||||
Merchandise inventories | 591 | 271 | — | 862 | ||||||||||
Intercompany receivables | — | 329 | (329 | ) | — | |||||||||
Other | 105 | 21 | — | 126 | ||||||||||
Total current assets | 733 | 640 | (329 | ) | 1,044 | |||||||||
Property and equipment, net | 271 | 67 | — | 338 | ||||||||||
Goodwill, net | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 284 | — | (284 | ) | — | |||||||||
Other assets | 76 | 3 | — | 79 | ||||||||||
Total assets | $ | 1,458 | $ | 710 | $ | (613 | ) | $ | 1,555 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | 5 | 258 | — | 263 | ||||||||||
Accrued liabilities and other | 235 | 132 | — | 367 | ||||||||||
Share-based Compensation | 22 | 13 | — | 35 | ||||||||||
Current portion of long-term debt | 150 | — | — | 150 | ||||||||||
Intercompany payable | 329 | — | (329 | ) | — | |||||||||
Other | 36 | 5 | — | 41 | ||||||||||
Total current liabilities | 777 | 408 | (329 | ) | 856 | |||||||||
Long-term debt | 2,891 | — | — | 2,891 | ||||||||||
Other long-term liabilities | 73 | 12 | — | 85 | ||||||||||
Share based Compensation | 21 | 6 | — | 27 | ||||||||||
Total stockholders’ deficit | (2,304 | ) | 284 | (284 | ) | (2,304 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,458 | $ | 710 | $ | (613 | ) | $ | 1,555 | |||||
Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||
July 28, 2012 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 93 | $ | 20 | $ | — | $ | 113 | ||||||
Merchandise inventories | 603 | 322 | — | 925 | ||||||||||
Intercompany receivables | — | 556 | (556 | ) | — | |||||||||
Other | 135 | 23 | — | 158 | ||||||||||
Total current assets | 831 | 921 | (556 | ) | 1,196 | |||||||||
Property and equipment, net | 265 | 61 | — | 326 | ||||||||||
Goodwill | 95 | — | — | 95 | ||||||||||
Investment in subsidiaries | 569 | — | (569 | ) | — | |||||||||
Other assets | 83 | 3 | — | 86 | ||||||||||
Total assets | $ | 1,843 | $ | 985 | $ | (1,125 | ) | $ | 1,703 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 8 | $ | 269 | $ | — | $ | 277 | ||||||
Accrued liabilities and other | 234 | 119 | — | 353 | ||||||||||
Share-based compensation liability | 19 | 10 | — | 29 | ||||||||||
Current portion of long-term debt | 1 | — | — | 1 | ||||||||||
Intercompany payable | 556 | — | (556 | ) | — | |||||||||
Other | 1 | — | — | 1 | ||||||||||
Total current liabilities | 819 | 398 | (556 | ) | 661 | |||||||||
Long-term debt | 3,363 | — | — | 3,363 | ||||||||||
Share-based compensation liability | 16 | 7 | — | 23 | ||||||||||
Other long-term liabilities | 86 | 11 | — | 97 | ||||||||||
Total stockholders’ deficit | (2,441 | ) | 569 | (569 | ) | (2,441 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,843 | $ | 985 | $ | (1,125 | ) | $ | 1,703 | |||||
Supplemental Condensed Consolidating Statement of Comprehensive Income | ||||||||||||||
Quarter Ended August 3, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 783 | $ | 534 | $ | (413 | ) | $ | 904 | |||||
Cost of sales and occupancy expense | 522 | 458 | (413 | ) | 567 | |||||||||
Gross profit | 261 | 76 | — | 337 | ||||||||||
Selling, general, and administrative expense | 221 | 33 | — | 254 | ||||||||||
Share-based compensation | 6 | 2 | — | 8 | ||||||||||
Related party expenses | 3 | — | — | 3 | ||||||||||
Store pre-opening costs | 1 | — | — | 1 | ||||||||||
Operating income | 30 | 41 | — | 71 | ||||||||||
Interest expense | 45 | — | — | 45 | ||||||||||
Refinancing costs and losses on early extinguishment of debt | — | — | — | — | ||||||||||
Other (income) and expense, net | — | 1 | — | 1 | ||||||||||
Intercompany charges (income) | 12 | (12 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 52 | — | (52 | ) | — | |||||||||
Income before income taxes | 25 | 52 | (52 | ) | 25 | |||||||||
Provision for income taxes | 8 | 13 | (13 | ) | 8 | |||||||||
Net income | 17 | 39 | (39 | ) | 17 | |||||||||
Other comprehensive income, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (1 | ) | — | — | (1 | ) | ||||||||
Comprehensive income | $ | 16 | $ | 39 | $ | (39 | ) | $ | 16 | |||||
Supplemental Condensed Consolidating Statement of Comprehensive Income | ||||||||||||||
Quarter Ended July 28, 2012 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 777 | $ | 521 | $ | (406 | ) | $ | 892 | |||||
Cost of sales and occupancy expense | 519 | 444 | (406 | ) | 557 | |||||||||
Gross profit | 258 | 77 | — | 335 | ||||||||||
Selling, general, and administrative expense | 218 | 33 | — | 251 | ||||||||||
Share-based compensation | 2 | 1 | — | 3 | ||||||||||
Related party expenses | 4 | — | — | 4 | ||||||||||
Store pre-opening costs | 1 | — | — | 1 | ||||||||||
Operating income | 33 | 43 | — | 76 | ||||||||||
Interest expense | 61 | — | — | 61 | ||||||||||
Other (income) and expense, net | — | — | — | — | ||||||||||
Intercompany charges (income) | 15 | (15 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 58 | — | (58 | ) | — | |||||||||
Income before income taxes | 15 | 58 | (58 | ) | 15 | |||||||||
Provision for income taxes | 6 | 22 | (22 | ) | 6 | |||||||||
Net income | 9 | 36 | (36 | ) | 9 | |||||||||
Other comprehensive income, net of tax: | ||||||||||||||
Foreign currency translation adjustment | (2 | ) | — | — | (2 | ) | ||||||||
Comprehensive income | $ | 7 | $ | 36 | $ | (36 | ) | $ | 7 | |||||
Supplemental Condensed Consolidating Statement of Comprehensive Income | ||||||||||||||
Six Months Ended August 3, 2013 | ||||||||||||||
Guarantor | ||||||||||||||
Parent Company | Subsidiaries | Eliminations | Consolidated | |||||||||||
(Restated) | ||||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 1,652 | $ | 1,081 | $ | (836 | ) | $ | 1,897 | |||||
Cost of sales and occupancy expense | 1,077 | 910 | (836 | ) | 1,151 | |||||||||
Gross profit | 575 | 171 | — | 746 | ||||||||||
Selling, general, and administrative expense | 455 | 71 | — | 526 | ||||||||||
Share-based compensation | 9 | 2 | — | 11 | ||||||||||
Related party expenses | 7 | — | — | 7 | ||||||||||
Store pre-opening costs | 3 | — | — | 3 | ||||||||||
Operating income | 101 | 98 | — | 199 | ||||||||||
Interest expense | 92 | — | — | 92 | ||||||||||
Refinancing costs and losses on early extinguishment of debt | 7 | — | — | 7 | ||||||||||
Other (income) and expense, net | — | 1 | — | 1 | ||||||||||
Intercompany charges (income) | 25 | (25 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 122 | — | (122 | ) | — | |||||||||
Income before income taxes | 99 | 122 | (122 | ) | 99 | |||||||||
Provision for income taxes | 36 | 44 | (44 | ) | 36 | |||||||||
Net income | 63 | 78 | (78 | ) | 63 | |||||||||
Other comprehensive income, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (2 | ) | — | — | (2 | ) | ||||||||
Comprehensive income | $ | 61 | $ | 78 | $ | (78 | ) | $ | 61 | |||||
Supplemental Condensed Consolidating Statement of Comprehensive Income | ||||||||||||||
Six Months Ended July 28, 2012 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 1,638 | $ | 1,070 | $ | (838 | ) | $ | 1,870 | |||||
Cost of sales and occupancy expense | 1,056 | 906 | (838 | ) | 1,124 | |||||||||
Gross profit | 582 | 164 | — | 746 | ||||||||||
Selling, general, and administrative expense | 442 | 68 | — | 510 | ||||||||||
Share-based compensation | 6 | 1 | — | 7 | ||||||||||
Related party expenses | 7 | — | — | 7 | ||||||||||
Store pre-opening costs | 2 | — | — | 2 | ||||||||||
Operating income | 125 | 95 | — | 220 | ||||||||||
Interest expense | 127 | — | — | 127 | ||||||||||
Other (income) and expense, net | — | (1 | ) | — | (1 | ) | ||||||||
Intercompany charges (income) | 32 | (32 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 128 | — | (128 | ) | — | |||||||||
Income before income taxes | 94 | 128 | (128 | ) | 94 | |||||||||
Provision for income taxes | 34 | 46 | (46 | ) | 34 | |||||||||
Net income | 60 | (82 | ) | (82 | ) | 60 | ||||||||
Comprehensive income | $ | 60 | $ | 82 | $ | (82 | ) | $ | 60 | |||||
Supplemental Condensed Consolidating Statement of Cash Flows | ||||||||||||||
Six Months Ended August 3, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash (used in) provided by operating activities | $ | (33 | ) | $ | 66 | $ | (47 | ) | $ | (14 | ) | |||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (35 | ) | (15 | ) | — | (50 | ) | |||||||
Net cash used in investing activities | (35 | ) | (15 | ) | — | (50 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayments of short-term debt | 75 | — | — | 75 | ||||||||||
Intercompany dividends | — | (47 | ) | 47 | — | |||||||||
Other financing activities | (16 | ) | — | — | (16 | ) | ||||||||
Net cash provided by (used in) financing activities | 59 | (47 | ) | 47 | 59 | |||||||||
Decrease in cash and equivalents | (9 | ) | 4 | — | (5 | ) | ||||||||
Beginning cash and equivalents | 37 | 19 | — | 56 | ||||||||||
Ending cash and equivalents | $ | 28 | $ | 23 | $ | — | $ | 51 | ||||||
Supplemental Condensed Consolidating Statement of Cash Flows | ||||||||||||||
Six Months Ended July 28, 2012 | ||||||||||||||
Parent | Guarantor | |||||||||||||
Company | Subsidiaries | Eliminations | Consolidated | |||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash used in operating activities | $ | (99 | ) | $ | 68 | $ | (49 | ) | $ | (80 | ) | |||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (38 | ) | (7 | ) | — | (45 | ) | |||||||
Net cash used in investing activities | (38 | ) | (7 | ) | — | (45 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayment of long term debt | (127 | ) | — | — | (127 | ) | ||||||||
Intercompany dividends | — | (49 | ) | 49 | — | |||||||||
Other financing activities | (6 | ) | — | — | (6 | ) | ||||||||
Net cash used in financing activities | (133 | ) | (49 | ) | 49 | (133 | ) | |||||||
Decrease in cash and equivalents | (270 | ) | 12 | — | (258 | ) | ||||||||
Beginning cash and equivalents | 363 | 8 | — | 371 | ||||||||||
Ending cash and equivalents | $ | 93 | $ | 20 | $ | — | $ | 113 | ||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Aug. 03, 2013 | |
Summary of Significant Accounting Policies | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The consolidated financial statements include the accounts of Michaels Stores, Inc. and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. All expressions of the “Company”, “Michaels”, “us,” “we,” “our,” and all similar expressions are references to Michaels Stores, Inc. and its consolidated, wholly-owned subsidiaries, unless otherwise expressly stated or the context otherwise requires. | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 2, 2013. | |
The balance sheet at February 2, 2013 has been derived from the restated audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. | |
In the opinion of management, all adjustments (consisting of normal recurring accruals and other items) considered necessary for a fair presentation have been included. | |
Because of the seasonal nature of our business, the results of operations for the quarter ended August 3, 2013 are not indicative of the results to be expected for the entire year. | |
We report on the basis of a 52- or 53-week fiscal year, which ends on the Saturday closest to January 31. All references herein to “fiscal 2013” relate to the 52 weeks ending February 1, 2014, and all references to”fiscal 2012” relate to the 53 weeks ended February 2, 2013. In addition, all references herein to “the second quarter of fiscal 2013” relate to the 13 weeks ended August 3, 2013, and all references to “the second quarter of fiscal 2012” relate to the 13 weeks ended July 28, 2012. Finally, all references to “the six months ended August 3, 2013” relate to the 26 weeks ended August 3, 2013, and “the six months ended July 28, 2012” relate to the 26 weeks ended July 28, 2012. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss or a Tax Credit Carryforward Exists.” ASU 2013-11 requires unrecognized tax benefits to be presented as a decrease in a net operating loss, similar tax loss or tax credit carryforward if certain criteria are met. ASU 2013-11, which is prospective, is effective for reporting periods beginning after December 15, 2013, with earlier adoption permitted. Retrospective application is also permitted. We are still evaluating the standard to determine when we will adopt the standard but we do not believe the implementation of this standard will result in a material impact to our financial statements. |
Restatement_Sharebased_Compens1
Restatement - Share-based Compensation (Tables) | 6 Months Ended | ||||||||||||||||||||
Aug. 03, 2013 | |||||||||||||||||||||
Restatement - Share-based Compensation | ' | ||||||||||||||||||||
Schedule of correction associated with certain line items in the unaudited interim consolidated financial statements | ' | ||||||||||||||||||||
The following tables illustrate the correction as associated with certain line items in the unaudited interim consolidated financial statements (amounts in millions): | |||||||||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||||
As of August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Merchandise inventories | $ | 905 | $ | 4 | $ | — | $ | 909 | |||||||||||||
Deferred income taxes | 37 | 1 | — | 38 | |||||||||||||||||
Income tax receivable | 34 | 2 | — | 36 | |||||||||||||||||
Total current assets | 1,123 | 7 | — | 1,130 | |||||||||||||||||
Deferred income taxes | 13 | 16 | — | 29 | |||||||||||||||||
Total non-current assets | 152 | 16 | — | 168 | |||||||||||||||||
Accrued liabilities and other | 338 | (3 | ) | — | 335 | ||||||||||||||||
Share-based compensation liability | — | 19 | — | 19 | |||||||||||||||||
Income taxes payable | 1 | (1 | ) | — | — | ||||||||||||||||
Total current liabilities | 870 | 15 | — | 885 | |||||||||||||||||
Share-based compensation liability | — | 26 | — | 26 | |||||||||||||||||
Total long-term liabilities | 2,965 | 26 | — | 2,991 | |||||||||||||||||
Additional paid-in capital | 60 | 1 | — | 61 | |||||||||||||||||
Accumulated deficit | (2,277 | ) | (19 | ) | — | (2,296 | ) | ||||||||||||||
Total stockholders’ deficit | (2,213 | ) | (18 | ) | — | (2,231 | ) | ||||||||||||||
Consolidated Balance Sheet | |||||||||||||||||||||
As of July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Merchandise inventories | $ | 922 | $ | 3 | $ | — | $ | 925 | |||||||||||||
Total current assets | 1,193 | 3 | — | 1,196 | |||||||||||||||||
Deferred income taxes | 18 | 14 | — | 32 | |||||||||||||||||
Total non-current assets | 167 | 14 | — | 181 | |||||||||||||||||
Accrued liabilities and other | 351 | 2 | — | 353 | |||||||||||||||||
Share-based compensation liability | — | 29 | — | 29 | |||||||||||||||||
Income taxes payable | 2 | (2 | ) | — | — | ||||||||||||||||
Total current liabilities | 632 | 29 | — | 661 | |||||||||||||||||
Share-based compensation liability | — | 23 | — | 23 | |||||||||||||||||
Total long-term liabilities | 3,460 | 23 | — | 3,483 | |||||||||||||||||
Additional paid-in capital | 62 | (10 | ) | — | 52 | ||||||||||||||||
Accumulated deficit | (2,474 | ) | (25 | ) | — | (2,499 | ) | ||||||||||||||
Total stockholders’ deficit | (2,406 | ) | (35 | ) | — | (2,441 | ) | ||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Quarter Ended August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 567 | $ | 1 | $ | (1 | ) | $ | 567 | ||||||||||||
Gross Profit | 337 | (1 | ) | 1 | 337 | ||||||||||||||||
Selling, general and administrative expense | 258 | (2 | ) | (2 | ) | 254 | |||||||||||||||
Share-based compensation | — | 8 | — | 8 | |||||||||||||||||
Operating income | 75 | (7 | ) | 3 | 71 | ||||||||||||||||
Income before income taxes | 29 | (7 | ) | 3 | 25 | ||||||||||||||||
Provision for income taxes | 9 | (2 | ) | 1 | 8 | ||||||||||||||||
Net income | 20 | (5 | ) | 2 | 17 | ||||||||||||||||
Comprehensive income | 19 | (5 | ) | 2 | 16 | ||||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Six Months Ended August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 1,153 | $ | 2 | $ | (4 | ) | $ | 1,151 | ||||||||||||
Gross Profit | 744 | (2 | ) | 4 | 746 | ||||||||||||||||
Selling, general and administrative expense | 529 | (1 | ) | (2 | ) | 526 | |||||||||||||||
Share-based compensation | — | 11 | — | 11 | |||||||||||||||||
Operating income | 205 | (12 | ) | 6 | 199 | ||||||||||||||||
Income before income taxes | 105 | (12 | ) | 6 | 99 | ||||||||||||||||
Provision for income taxes | 38 | (4 | ) | 2 | 36 | ||||||||||||||||
Net income | 67 | (8 | ) | 4 | 63 | ||||||||||||||||
Comprehensive income | 65 | (8 | ) | 4 | 61 | ||||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Quarter Ended July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 553 | $ | 4 | $ | — | $ | 557 | |||||||||||||
Gross Profit | 339 | (4 | ) | — | 335 | ||||||||||||||||
Selling, general and administrative expense | 252 | (1 | ) | — | 251 | ||||||||||||||||
Share-based compensation | — | 3 | — | 3 | |||||||||||||||||
Operating income | 82 | (6 | ) | — | 76 | ||||||||||||||||
Income before income taxes | 21 | (6 | ) | — | 15 | ||||||||||||||||
Provision for income taxes | 8 | (2 | ) | — | 6 | ||||||||||||||||
Net income | 13 | (4 | ) | — | 9 | ||||||||||||||||
Comprehensive income | 11 | (4 | ) | — | 7 | ||||||||||||||||
Consolidated Statements of Comprehensive Income | |||||||||||||||||||||
Six Months Ended July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Cost of sales and occupancy expense | $ | 1,119 | $ | 4 | $ | 1 | $ | 1,124 | |||||||||||||
Gross Profit | 751 | (4 | ) | (1 | ) | 746 | |||||||||||||||
Selling, general and administrative expense | 512 | (2 | ) | — | 510 | ||||||||||||||||
Share-based compensation | — | 7 | — | 7 | |||||||||||||||||
Operating income | 230 | (9 | ) | (1 | ) | 220 | |||||||||||||||
Income before income taxes | 104 | (9 | ) | (1 | ) | 94 | |||||||||||||||
Provision for income taxes | 38 | (4 | ) | — | 34 | ||||||||||||||||
Net income | 66 | (5 | ) | (1 | ) | 60 | |||||||||||||||
Comprehensive income | 66 | (5 | ) | (1 | ) | 60 | |||||||||||||||
Cash Flow Data | |||||||||||||||||||||
Six Months Ended August 3, 2013 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Operating Activities: | |||||||||||||||||||||
Net income | $ | 67 | (7 | ) | 3 | $ | 63 | ||||||||||||||
Share-based compensation | 1 | 12 | — | 13 | |||||||||||||||||
Merchandise inventories | (40 | ) | (2 | ) | (5 | ) | (47 | ) | |||||||||||||
Accrued liabilities and other | (38 | ) | (21 | ) | — | (59 | ) | ||||||||||||||
Income taxes | (71 | ) | (2 | ) | 2 | (71 | ) | ||||||||||||||
Net cash provided by (used in) operating activities | 6 | (20 | ) | — | (14 | ) | |||||||||||||||
Repurchase of common stock | (45 | ) | 45 | — | — | ||||||||||||||||
Proceeds from stock options exercised | 25 | (25 | ) | — | — | ||||||||||||||||
Net cash provided by financing activities | 39 | 20 | — | 59 | |||||||||||||||||
Cash Flow Data | |||||||||||||||||||||
Six Months Ended July 28, 2012 | |||||||||||||||||||||
As | Share-based | Other | As | ||||||||||||||||||
Reported | compensation | Adjustments | Restated | ||||||||||||||||||
Adjustment | |||||||||||||||||||||
Operating Activities: | |||||||||||||||||||||
Net income | $ | 66 | (5 | ) | (1 | ) | $ | 60 | |||||||||||||
Share-based compensation | 3 | 8 | — | 11 | |||||||||||||||||
Merchandise inventories | (82 | ) | (1 | ) | 1 | (82 | ) | ||||||||||||||
Income taxes | (43 | ) | (3 | ) | — | (46 | ) | ||||||||||||||
Net cash used in operating activities | (79 | ) | (1 | ) | — | (80 | ) | ||||||||||||||
Repurchase of common stock | (3 | ) | 3 | — | — | ||||||||||||||||
Proceeds from stock options exercised | 2 | (2 | ) | — | — | ||||||||||||||||
Net cash provided by (used in) financing activities | (134 | ) | 1 | — | (133 | ) | |||||||||||||||
Debt_Tables
Debt (Tables) | 6 Months Ended | ||||||||||||
Aug. 03, 2013 | |||||||||||||
Debt | ' | ||||||||||||
Schedule of outstanding debt | ' | ||||||||||||
August 3, 2013 | February 2, 2013 | July 28, 2012 | Interest Rate | ||||||||||
(in millions) | |||||||||||||
Senior secured term loan | $ | 1,636 | $ | 1,640 | $ | 1,996 | Variable | ||||||
Senior notes | 1,007 | 1,007 | 795 | 7.75% | |||||||||
Senior subordinated notes | 255 | 393 | 393 | 11.38% | |||||||||
Subordinated discount notes | — | — | 180 | 13.00% | |||||||||
Asset-based revolving credit facility | 222 | 1 | — | Variable | |||||||||
Total debt | 3,120 | 3,041 | 3,364 | ||||||||||
Less current portion | 238 | 150 | 1 | ||||||||||
Long-term debt | $ | 2,882 | $ | 2,891 | $ | 3,363 |
Comprehensive_Income_Tables
Comprehensive Income (Tables) | 6 Months Ended | ||||
Aug. 03, 2013 | |||||
Comprehensive Income | ' | ||||
Schedule of accumulated other comprehensive income, net of tax | ' | ||||
Foreign Currency | |||||
Translation | |||||
and Other | |||||
(in millions) | |||||
Balance at February 2, 2013 | $ | 6 | |||
Foreign currency translation adjustment | (2 | ) | |||
Balance at August 3, 2013 | $ | 4 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | |||||||
Aug. 03, 2013 | ||||||||
Fair Value Measurements | ' | |||||||
Schedule of carrying and fair values of debt | ' | |||||||
Carrying Value | Fair Value | |||||||
(in millions) | ||||||||
Senior secured term loan | $ | 1,636 | $ | 1,645 | ||||
Senior notes | 1,007 | 1,079 | ||||||
Senior subordinated notes | 255 | 267 | ||||||
Segments_and_Geographic_Inform1
Segments and Geographic Information (Tables) | 6 Months Ended | |||||||||||||
Aug. 03, 2013 | ||||||||||||||
Segments and Geographic Information | ' | |||||||||||||
Schedule of sales and assets by country | ' | |||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||
August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
(in millions) | ||||||||||||||
Net Sales: | ||||||||||||||
United States | $ | 819 | $ | 812 | $ | 1,717 | $ | 1,703 | ||||||
Canada | 85 | 80 | 180 | 167 | ||||||||||
Consolidated Total | $ | 904 | $ | 892 | $ | 1,897 | $ | 1,870 | ||||||
August 3, 2013 | February 2, 2013 | July 28, 2012 | ||||||||||||
(in millions) | ||||||||||||||
(Restated) | (Restated) | (Restated) | ||||||||||||
Total Assets: | ||||||||||||||
United States | $ | 1,522 | $ | 1,446 | $ | 1,586 | ||||||||
Canada | 123 | 109 | 117 | |||||||||||
Consolidated Total | $ | 1,645 | $ | 1,555 | $ | 1,703 | ||||||||
Schedule of reconciliation of EBITDA (excluding refinancing costs and losses on early extinguishment of debt) to Net income | ' | |||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||
August 3, 2013 | July 28, 2012 | August 3, 2013 | July 28, 2012 | |||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net income | $ | 17 | $ | 9 | $ | 63 | $ | 60 | ||||||
Interest expense | 45 | 61 | 92 | 127 | ||||||||||
Refinancing costs and losses on early extinguishments of debt | — | — | 7 | — | ||||||||||
Provision for income taxes | 8 | 6 | 36 | 34 | ||||||||||
Depreciation and amortization | 25 | 22 | 50 | 46 | ||||||||||
EBITDA (excluding refinancing costs and losses on early extinguishments of debt) | $ | 95 | $ | 98 | $ | 248 | $ | 267 | ||||||
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Information (Tables) | 6 Months Ended | |||||||||||||
Aug. 03, 2013 | ||||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Schedule of Supplemental Condensed Consolidating Balance Sheet | ' | |||||||||||||
August 3, 2013 | ||||||||||||||
Parent Company | Guarantor | Eliminations | Consolidated | |||||||||||
Subsidiaries | ||||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 28 | $ | 23 | $ | — | $ | 51 | ||||||
Merchandise inventories | 619 | 290 | — | 909 | ||||||||||
Intercompany receivables | — | 484 | (484 | ) | — | |||||||||
Other | 142 | 28 | — | 170 | ||||||||||
Total current assets | 789 | 825 | (484 | ) | 1,130 | |||||||||
Property and equipment, net | 274 | 73 | — | 347 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 453 | — | (453 | ) | — | |||||||||
Other assets | 72 | 2 | — | 74 | ||||||||||
Total assets | $ | 1,682 | $ | 900 | $ | (937 | ) | $ | 1,645 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 5 | $ | 284 | $ | — | $ | 289 | ||||||
Accrued liabilities and other | 205 | 130 | — | 335 | ||||||||||
Share-based compensation liability | 6 | 13 | — | 19 | ||||||||||
Current portion of long-term debt | 238 | — | — | 238 | ||||||||||
Intercompany payable | 484 | — | (484 | ) | — | |||||||||
Other | 4 | — | — | 4 | ||||||||||
Total current liabilities | 942 | 427 | (484 | ) | 885 | |||||||||
Long-term debt | 2,882 | — | — | 2,882 | ||||||||||
Share-based compensation liability | 17 | 9 | — | 26 | ||||||||||
Other long-term liabilities | 72 | 11 | — | 83 | ||||||||||
Total stockholders’ deficit | (2,231 | ) | 453 | (453 | ) | (2,231 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,682 | $ | 900 | $ | (937 | ) | $ | 1,645 | |||||
February 2, 2013 | ||||||||||||||
Parent Company | Guarantor | Eliminations | Consolidated | |||||||||||
Subsidiaries | ||||||||||||||
(Restated) | ||||||||||||||
(In millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 37 | $ | 19 | $ | — | $ | 56 | ||||||
Merchandise inventories | 591 | 271 | — | 862 | ||||||||||
Intercompany receivables | — | 329 | (329 | ) | — | |||||||||
Other | 105 | 21 | — | 126 | ||||||||||
Total current assets | 733 | 640 | (329 | ) | 1,044 | |||||||||
Property and equipment, net | 271 | 67 | — | 338 | ||||||||||
Goodwill, net | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 284 | — | (284 | ) | — | |||||||||
Other assets | 76 | 3 | — | 79 | ||||||||||
Total assets | $ | 1,458 | $ | 710 | $ | (613 | ) | $ | 1,555 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | 5 | 258 | — | 263 | ||||||||||
Accrued liabilities and other | 235 | 132 | — | 367 | ||||||||||
Share-based Compensation | 22 | 13 | — | 35 | ||||||||||
Current portion of long-term debt | 150 | — | — | 150 | ||||||||||
Intercompany payable | 329 | — | (329 | ) | — | |||||||||
Other | 36 | 5 | — | 41 | ||||||||||
Total current liabilities | 777 | 408 | (329 | ) | 856 | |||||||||
Long-term debt | 2,891 | — | — | 2,891 | ||||||||||
Other long-term liabilities | 73 | 12 | — | 85 | ||||||||||
Share based Compensation | 21 | 6 | — | 27 | ||||||||||
Total stockholders’ deficit | (2,304 | ) | 284 | (284 | ) | (2,304 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,458 | $ | 710 | $ | (613 | ) | $ | 1,555 | |||||
July 28, 2012 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 93 | $ | 20 | $ | — | $ | 113 | ||||||
Merchandise inventories | 603 | 322 | — | 925 | ||||||||||
Intercompany receivables | — | 556 | (556 | ) | — | |||||||||
Other | 135 | 23 | — | 158 | ||||||||||
Total current assets | 831 | 921 | (556 | ) | 1,196 | |||||||||
Property and equipment, net | 265 | 61 | — | 326 | ||||||||||
Goodwill | 95 | — | — | 95 | ||||||||||
Investment in subsidiaries | 569 | — | (569 | ) | — | |||||||||
Other assets | 83 | 3 | — | 86 | ||||||||||
Total assets | $ | 1,843 | $ | 985 | $ | (1,125 | ) | $ | 1,703 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 8 | $ | 269 | $ | — | $ | 277 | ||||||
Accrued liabilities and other | 234 | 119 | — | 353 | ||||||||||
Share-based compensation liability | 19 | 10 | — | 29 | ||||||||||
Current portion of long-term debt | 1 | — | — | 1 | ||||||||||
Intercompany payable | 556 | — | (556 | ) | — | |||||||||
Other | 1 | — | — | 1 | ||||||||||
Total current liabilities | 819 | 398 | (556 | ) | 661 | |||||||||
Long-term debt | 3,363 | — | — | 3,363 | ||||||||||
Share-based compensation liability | 16 | 7 | — | 23 | ||||||||||
Other long-term liabilities | 86 | 11 | — | 97 | ||||||||||
Total stockholders’ deficit | (2,441 | ) | 569 | (569 | ) | (2,441 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,843 | $ | 985 | $ | (1,125 | ) | $ | 1,703 | |||||
Schedule of Supplemental Condensed Consolidating Statement of Comprehensive Income | ' | |||||||||||||
Quarter Ended August 3, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 783 | $ | 534 | $ | (413 | ) | $ | 904 | |||||
Cost of sales and occupancy expense | 522 | 458 | (413 | ) | 567 | |||||||||
Gross profit | 261 | 76 | — | 337 | ||||||||||
Selling, general, and administrative expense | 221 | 33 | — | 254 | ||||||||||
Share-based compensation | 6 | 2 | — | 8 | ||||||||||
Related party expenses | 3 | — | — | 3 | ||||||||||
Store pre-opening costs | 1 | — | — | 1 | ||||||||||
Operating income | 30 | 41 | — | 71 | ||||||||||
Interest expense | 45 | — | — | 45 | ||||||||||
Refinancing costs and losses on early extinguishment of debt | — | — | — | — | ||||||||||
Other (income) and expense, net | — | 1 | — | 1 | ||||||||||
Intercompany charges (income) | 12 | (12 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 52 | — | (52 | ) | — | |||||||||
Income before income taxes | 25 | 52 | (52 | ) | 25 | |||||||||
Provision for income taxes | 8 | 13 | (13 | ) | 8 | |||||||||
Net income | 17 | 39 | (39 | ) | 17 | |||||||||
Other comprehensive income, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (1 | ) | — | — | (1 | ) | ||||||||
Comprehensive income | $ | 16 | $ | 39 | $ | (39 | ) | $ | 16 | |||||
Quarter Ended July 28, 2012 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 777 | $ | 521 | $ | (406 | ) | $ | 892 | |||||
Cost of sales and occupancy expense | 519 | 444 | (406 | ) | 557 | |||||||||
Gross profit | 258 | 77 | — | 335 | ||||||||||
Selling, general, and administrative expense | 218 | 33 | — | 251 | ||||||||||
Share-based compensation | 2 | 1 | — | 3 | ||||||||||
Related party expenses | 4 | — | — | 4 | ||||||||||
Store pre-opening costs | 1 | — | — | 1 | ||||||||||
Operating income | 33 | 43 | — | 76 | ||||||||||
Interest expense | 61 | — | — | 61 | ||||||||||
Other (income) and expense, net | — | — | — | — | ||||||||||
Intercompany charges (income) | 15 | (15 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 58 | — | (58 | ) | — | |||||||||
Income before income taxes | 15 | 58 | (58 | ) | 15 | |||||||||
Provision for income taxes | 6 | 22 | (22 | ) | 6 | |||||||||
Net income | 9 | 36 | (36 | ) | 9 | |||||||||
Other comprehensive income, net of tax: | ||||||||||||||
Foreign currency translation adjustment | (2 | ) | — | — | (2 | ) | ||||||||
Comprehensive income | $ | 7 | $ | 36 | $ | (36 | ) | $ | 7 | |||||
Six Months Ended August 3, 2013 | ||||||||||||||
Guarantor | ||||||||||||||
Parent Company | Subsidiaries | Eliminations | Consolidated | |||||||||||
(Restated) | ||||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 1,652 | $ | 1,081 | $ | (836 | ) | $ | 1,897 | |||||
Cost of sales and occupancy expense | 1,077 | 910 | (836 | ) | 1,151 | |||||||||
Gross profit | 575 | 171 | — | 746 | ||||||||||
Selling, general, and administrative expense | 455 | 71 | — | 526 | ||||||||||
Share-based compensation | 9 | 2 | — | 11 | ||||||||||
Related party expenses | 7 | — | — | 7 | ||||||||||
Store pre-opening costs | 3 | — | — | 3 | ||||||||||
Operating income | 101 | 98 | — | 199 | ||||||||||
Interest expense | 92 | — | — | 92 | ||||||||||
Refinancing costs and losses on early extinguishment of debt | 7 | — | — | 7 | ||||||||||
Other (income) and expense, net | — | 1 | — | 1 | ||||||||||
Intercompany charges (income) | 25 | (25 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 122 | — | (122 | ) | — | |||||||||
Income before income taxes | 99 | 122 | (122 | ) | 99 | |||||||||
Provision for income taxes | 36 | 44 | (44 | ) | 36 | |||||||||
Net income | 63 | 78 | (78 | ) | 63 | |||||||||
Other comprehensive income, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (2 | ) | — | — | (2 | ) | ||||||||
Comprehensive income | $ | 61 | $ | 78 | $ | (78 | ) | $ | 61 | |||||
Six Months Ended July 28, 2012 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 1,638 | $ | 1,070 | $ | (838 | ) | $ | 1,870 | |||||
Cost of sales and occupancy expense | 1,056 | 906 | (838 | ) | 1,124 | |||||||||
Gross profit | 582 | 164 | — | 746 | ||||||||||
Selling, general, and administrative expense | 442 | 68 | — | 510 | ||||||||||
Share-based compensation | 6 | 1 | — | 7 | ||||||||||
Related party expenses | 7 | — | — | 7 | ||||||||||
Store pre-opening costs | 2 | — | — | 2 | ||||||||||
Operating income | 125 | 95 | — | 220 | ||||||||||
Interest expense | 127 | — | — | 127 | ||||||||||
Other (income) and expense, net | — | (1 | ) | — | (1 | ) | ||||||||
Intercompany charges (income) | 32 | (32 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 128 | — | (128 | ) | — | |||||||||
Income before income taxes | 94 | 128 | (128 | ) | 94 | |||||||||
Provision for income taxes | 34 | 46 | (46 | ) | 34 | |||||||||
Net income | 60 | (82 | ) | (82 | ) | 60 | ||||||||
Comprehensive income | $ | 60 | $ | 82 | $ | (82 | ) | $ | 60 | |||||
Schedule of Supplemental Condensed Consolidating Statement of Cash Flows | ' | |||||||||||||
Six Months Ended August 3, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash (used in) provided by operating activities | $ | (33 | ) | $ | 66 | $ | (47 | ) | $ | (14 | ) | |||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (35 | ) | (15 | ) | — | (50 | ) | |||||||
Net cash used in investing activities | (35 | ) | (15 | ) | — | (50 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayments of short-term debt | 75 | — | — | 75 | ||||||||||
Intercompany dividends | — | (47 | ) | 47 | — | |||||||||
Other financing activities | (16 | ) | — | — | (16 | ) | ||||||||
Net cash provided by (used in) financing activities | 59 | (47 | ) | 47 | 59 | |||||||||
Decrease in cash and equivalents | (9 | ) | 4 | — | (5 | ) | ||||||||
Beginning cash and equivalents | 37 | 19 | — | 56 | ||||||||||
Ending cash and equivalents | $ | 28 | $ | 23 | $ | — | $ | 51 | ||||||
Six Months Ended July 28, 2012 | ||||||||||||||
Parent | Guarantor | |||||||||||||
Company | Subsidiaries | Eliminations | Consolidated | |||||||||||
(Restated) | (Restated) | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash used in operating activities | $ | (99 | ) | $ | 68 | $ | (49 | ) | $ | (80 | ) | |||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (38 | ) | (7 | ) | — | (45 | ) | |||||||
Net cash used in investing activities | (38 | ) | (7 | ) | — | (45 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayment of long term debt | (127 | ) | — | — | (127 | ) | ||||||||
Intercompany dividends | — | (49 | ) | 49 | — | |||||||||
Other financing activities | (6 | ) | — | — | (6 | ) | ||||||||
Net cash used in financing activities | (133 | ) | (49 | ) | 49 | (133 | ) | |||||||
Decrease in cash and equivalents | (270 | ) | 12 | — | (258 | ) | ||||||||
Beginning cash and equivalents | 363 | 8 | — | 371 | ||||||||||
Ending cash and equivalents | $ | 93 | $ | 20 | $ | — | $ | 113 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 | Feb. 01, 2014 | Feb. 02, 2013 | |
item | item | item | item | item | item | |
Fiscal year | ' | ' | ' | ' | ' | ' |
Number of weeks in a fiscal year | 13 | 13 | 26 | 26 | 52 | 53 |
Restatement_Sharebased_Compens2
Restatement - Share-based Compensation (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 | Feb. 02, 2013 | |
Consolidated Balance Sheet (unaudited) | ' | ' | ' | ' | ' |
Merchandise inventories | $909,000,000 | $925,000,000 | $909,000,000 | $925,000,000 | $862,000,000 |
Deferred income taxes | 38,000,000 | 42,000,000 | 38,000,000 | 42,000,000 | 37,000,000 |
Income tax receivable | 36,000,000 | 27,000,000 | 36,000,000 | 27,000,000 | 3,000,000 |
Total current assets | 1,130,000,000 | 1,196,000,000 | 1,130,000,000 | 1,196,000,000 | 1,044,000,000 |
Deferred income taxes | 29,000,000 | 32,000,000 | 29,000,000 | 32,000,000 | 30,000,000 |
Total non-current assets | 168,000,000 | 181,000,000 | 168,000,000 | 181,000,000 | 173,000,000 |
Accrued liabilities and other | 335,000,000 | 353,000,000 | 335,000,000 | 353,000,000 | 367,000,000 |
Share-based compensation liability | 19,000,000 | 29,000,000 | 19,000,000 | 29,000,000 | 35,000,000 |
Income taxes payable | ' | ' | ' | ' | 37,000,000 |
Total current liabilities | 885,000,000 | 661,000,000 | 885,000,000 | 661,000,000 | 856,000,000 |
Share-based compensation liability | 26,000,000 | 23,000,000 | 26,000,000 | 23,000,000 | 27,000,000 |
Total long-term liabilities | 2,991,000,000 | 3,483,000,000 | 2,991,000,000 | 3,483,000,000 | 3,003,000,000 |
Additional paid-in capital | 61,000,000 | 52,000,000 | 61,000,000 | 52,000,000 | 49,000,000 |
Accumulated deficit | -2,296,000,000 | -2,499,000,000 | -2,296,000,000 | -2,499,000,000 | -2,359,000,000 |
Total stockholders' deficit | -2,231,000,000 | -2,441,000,000 | -2,231,000,000 | -2,441,000,000 | -2,304,000,000 |
Consolidated Statements of Comprehensive Income (unaudited) | ' | ' | ' | ' | ' |
Cost of sales and occupancy expense | 567,000,000 | 557,000,000 | 1,151,000,000 | 1,124,000,000 | ' |
Gross Profit | 337,000,000 | 335,000,000 | 746,000,000 | 746,000,000 | ' |
Selling, general, and administrative expense | 254,000,000 | 251,000,000 | 526,000,000 | 510,000,000 | ' |
Share-based compensation | 8,000,000 | 3,000,000 | 11,000,000 | 7,000,000 | ' |
Operating income | 71,000,000 | 76,000,000 | 199,000,000 | 220,000,000 | ' |
Income before income taxes | 25,000,000 | 15,000,000 | 99,000,000 | 94,000,000 | ' |
Provision for income taxes | 8,000,000 | 6,000,000 | 36,000,000 | 34,000,000 | ' |
Net income | 17,000,000 | 9,000,000 | 63,000,000 | 60,000,000 | ' |
Comprehensive income | 16,000,000 | 7,000,000 | 61,000,000 | 60,000,000 | ' |
Operating activities: | ' | ' | ' | ' | ' |
Net income | 17,000,000 | 9,000,000 | 63,000,000 | 60,000,000 | ' |
Share-based compensation | ' | ' | 13,000,000 | 11,000,000 | ' |
Merchandise inventories | ' | ' | -47,000,000 | -82,000,000 | ' |
Accrued liabilities and other | ' | ' | -59,000,000 | -42,000,000 | ' |
Income taxes | ' | ' | -71,000,000 | -46,000,000 | ' |
Net cash provided by (used in) operating activities | ' | ' | -14,000,000 | -80,000,000 | ' |
Net cash provided by financing activities | ' | ' | 59,000,000 | -133,000,000 | ' |
As Reported | ' | ' | ' | ' | ' |
Consolidated Balance Sheet (unaudited) | ' | ' | ' | ' | ' |
Merchandise inventories | 905,000,000 | 922,000,000 | 905,000,000 | 922,000,000 | ' |
Deferred income taxes | 37,000,000 | ' | 37,000,000 | ' | ' |
Income tax receivable | 34,000,000 | ' | 34,000,000 | ' | ' |
Total current assets | 1,123,000,000 | 1,193,000,000 | 1,123,000,000 | 1,193,000,000 | ' |
Deferred income taxes | 13,000,000 | 18,000,000 | 13,000,000 | 18,000,000 | ' |
Total non-current assets | 152,000,000 | 167,000,000 | 152,000,000 | 167,000,000 | ' |
Accrued liabilities and other | 338,000,000 | 351,000,000 | 338,000,000 | 351,000,000 | ' |
Income taxes payable | 1,000,000 | 2,000,000 | 1,000,000 | 2,000,000 | ' |
Total current liabilities | 870,000,000 | 632,000,000 | 870,000,000 | 632,000,000 | ' |
Total long-term liabilities | 2,965,000,000 | 3,460,000,000 | 2,965,000,000 | 3,460,000,000 | ' |
Additional paid-in capital | 60,000,000 | 62,000,000 | 60,000,000 | 62,000,000 | ' |
Accumulated deficit | -2,277,000,000 | -2,474,000,000 | -2,277,000,000 | -2,474,000,000 | ' |
Total stockholders' deficit | -2,213,000,000 | -2,406,000,000 | -2,213,000,000 | -2,406,000,000 | ' |
Consolidated Statements of Comprehensive Income (unaudited) | ' | ' | ' | ' | ' |
Cost of sales and occupancy expense | 567,000,000 | 553,000,000 | 1,153,000,000 | 1,119,000,000 | ' |
Gross Profit | 337,000,000 | 339,000,000 | 744,000,000 | 751,000,000 | ' |
Selling, general, and administrative expense | 258,000,000 | 252,000,000 | 529,000,000 | 512,000,000 | ' |
Operating income | 75,000,000 | 82,000,000 | 205,000,000 | 230,000,000 | ' |
Income before income taxes | 29,000,000 | 21,000,000 | 105,000,000 | 104,000,000 | ' |
Provision for income taxes | 9,000,000 | 8,000,000 | 38,000,000 | 38,000,000 | ' |
Net income | 20,000,000 | 13,000,000 | 67,000,000 | 66,000,000 | ' |
Comprehensive income | 19,000,000 | 11,000,000 | 65,000,000 | 66,000,000 | ' |
Operating activities: | ' | ' | ' | ' | ' |
Net income | 20,000,000 | 13,000,000 | 67,000,000 | 66,000,000 | ' |
Share-based compensation | ' | ' | 1,000,000 | 3,000,000 | ' |
Merchandise inventories | ' | ' | -40,000,000 | -82,000,000 | ' |
Accrued liabilities and other | ' | ' | -38,000,000 | ' | ' |
Income taxes | ' | ' | -71,000,000 | -43,000,000 | ' |
Net cash provided by (used in) operating activities | ' | ' | 6,000,000 | -79,000,000 | ' |
Repurchase of common stock | ' | ' | -45,000,000 | -3,000,000 | ' |
Proceeds from stock options exercised | ' | ' | 25,000,000 | 2,000,000 | ' |
Net cash provided by financing activities | ' | ' | 39,000,000 | -134,000,000 | ' |
Restatement Adjustment | ' | ' | ' | ' | ' |
Consolidated Statements of Comprehensive Income (unaudited) | ' | ' | ' | ' | ' |
Net income | -3,000,000 | -4,000,000 | -4,000,000 | -6,000,000 | ' |
Operating activities: | ' | ' | ' | ' | ' |
Net income | -3,000,000 | -4,000,000 | -4,000,000 | -6,000,000 | ' |
Restatement Adjustment | Share-based compensation Adjustment | ' | ' | ' | ' | ' |
Consolidated Balance Sheet (unaudited) | ' | ' | ' | ' | ' |
Merchandise inventories | 4,000,000 | 3,000,000 | 4,000,000 | 3,000,000 | ' |
Deferred income taxes | 1,000,000 | ' | 1,000,000 | ' | ' |
Income tax receivable | 2,000,000 | ' | 2,000,000 | ' | ' |
Total current assets | 7,000,000 | 3,000,000 | 7,000,000 | 3,000,000 | ' |
Deferred income taxes | 16,000,000 | 14,000,000 | 16,000,000 | 14,000,000 | ' |
Total non-current assets | 16,000,000 | 14,000,000 | 16,000,000 | 14,000,000 | ' |
Accrued liabilities and other | -3,000,000 | 2,000,000 | -3,000,000 | 2,000,000 | ' |
Share-based compensation liability | 19,000,000 | 29,000,000 | 19,000,000 | 29,000,000 | ' |
Income taxes payable | -1,000,000 | -2,000,000 | -1,000,000 | -2,000,000 | ' |
Total current liabilities | 15,000,000 | 29,000,000 | 15,000,000 | 29,000,000 | ' |
Share-based compensation liability | 26,000,000 | 23,000,000 | 26,000,000 | 23,000,000 | ' |
Total long-term liabilities | 26,000,000 | 23,000,000 | 26,000,000 | 23,000,000 | ' |
Additional paid-in capital | 1,000,000 | -10,000,000 | 1,000,000 | -10,000,000 | ' |
Accumulated deficit | -19,000,000 | -25,000,000 | -19,000,000 | -25,000,000 | ' |
Total stockholders' deficit | -18,000,000 | -35,000,000 | -18,000,000 | -35,000,000 | ' |
Consolidated Statements of Comprehensive Income (unaudited) | ' | ' | ' | ' | ' |
Cost of sales and occupancy expense | 1,000,000 | 4,000,000 | 2,000,000 | 4,000,000 | ' |
Gross Profit | -1,000,000 | -4,000,000 | -2,000,000 | -4,000,000 | ' |
Selling, general, and administrative expense | -2,000,000 | -1,000,000 | -1,000,000 | -2,000,000 | ' |
Share-based compensation | 8,000,000 | 3,000,000 | 11,000,000 | 7,000,000 | ' |
Operating income | -7,000,000 | -6,000,000 | -12,000,000 | -9,000,000 | ' |
Income before income taxes | -7,000,000 | -6,000,000 | -12,000,000 | -9,000,000 | ' |
Provision for income taxes | -2,000,000 | -2,000,000 | -4,000,000 | -4,000,000 | ' |
Net income | -5,000,000 | -4,000,000 | -8,000,000 | -5,000,000 | ' |
Comprehensive income | -5,000,000 | -4,000,000 | -8,000,000 | -5,000,000 | ' |
Operating activities: | ' | ' | ' | ' | ' |
Net income | -5,000,000 | -4,000,000 | -8,000,000 | -5,000,000 | ' |
Share-based compensation | ' | ' | 12,000,000 | 8,000,000 | ' |
Merchandise inventories | ' | ' | -2,000,000 | -1,000,000 | ' |
Accrued liabilities and other | ' | ' | -21,000,000 | ' | ' |
Income taxes | ' | ' | -2,000,000 | -3,000,000 | ' |
Net cash provided by (used in) operating activities | ' | ' | -20,000,000 | -1,000,000 | ' |
Repurchase of common stock | ' | ' | 45,000,000 | 3,000,000 | ' |
Proceeds from stock options exercised | ' | ' | -25,000,000 | -2,000,000 | ' |
Net cash provided by financing activities | ' | ' | 20,000,000 | 1,000,000 | ' |
Restatement Adjustment | Other Adjustments | ' | ' | ' | ' | ' |
Consolidated Statements of Comprehensive Income (unaudited) | ' | ' | ' | ' | ' |
Cost of sales and occupancy expense | -1,000,000 | ' | -4,000,000 | 1,000,000 | ' |
Gross Profit | 1,000,000 | ' | 4,000,000 | -1,000,000 | ' |
Selling, general, and administrative expense | -2,000,000 | ' | -2,000,000 | ' | ' |
Operating income | 3,000,000 | ' | 6,000,000 | -1,000,000 | ' |
Income before income taxes | 3,000,000 | ' | 6,000,000 | -1,000,000 | ' |
Provision for income taxes | -1,000,000 | ' | 2,000,000 | ' | ' |
Net income | 2,000,000 | ' | 4,000,000 | -1,000,000 | ' |
Comprehensive income | 2,000,000 | ' | 4,000,000 | -1,000,000 | ' |
Operating activities: | ' | ' | ' | ' | ' |
Net income | 2,000,000 | ' | 4,000,000 | -1,000,000 | ' |
Merchandise inventories | ' | ' | -5,000,000 | 1,000,000 | ' |
Income taxes | ' | ' | $2,000,000 | ' | ' |
Debt_Details
Debt (Details) (USD $) | Aug. 03, 2013 | Feb. 02, 2013 | Jan. 28, 2013 | Jul. 28, 2012 |
In Millions, unless otherwise specified | ||||
Debt | ' | ' | ' | ' |
Total debt | $3,120 | $3,041 | ' | $3,364 |
Less current portion | 238 | 150 | ' | 1 |
Long-term debt | 2,882 | 2,891 | ' | 3,363 |
Senior secured term loan | ' | ' | ' | ' |
Debt | ' | ' | ' | ' |
Total debt | 1,636 | 1,640 | ' | 1,996 |
Senior notes | ' | ' | ' | ' |
Debt | ' | ' | ' | ' |
Total debt | 1,007 | 1,007 | ' | 795 |
Interest rate (as a percent) | 7.75% | ' | ' | ' |
Senior subordinated notes | ' | ' | ' | ' |
Debt | ' | ' | ' | ' |
Total debt | 255 | 393 | ' | 393 |
Interest rate (as a percent) | 11.38% | ' | 11.38% | ' |
Subordinated discount notes | ' | ' | ' | ' |
Debt | ' | ' | ' | ' |
Total debt | ' | ' | ' | 180 |
Interest rate (as a percent) | ' | ' | ' | 13.00% |
Asset-based revolving credit facility | ' | ' | ' | ' |
Debt | ' | ' | ' | ' |
Total debt | $222 | $1 | ' | ' |
Debt_Details_2
Debt (Details 2) (USD $) | 6 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Aug. 03, 2013 | Feb. 27, 2013 | Aug. 03, 2013 | Jan. 28, 2013 |
11 3/8% Senior Subordinated Notes due 2016 | 11 3/8% Senior Subordinated Notes due 2016 | 11 3/8% Senior Subordinated Notes due 2016 | ||
Debt | ' | ' | ' | ' |
Stated interest rate (as a percent) | ' | ' | 11.38% | 11.38% |
Aggregate principal amount of debt instrument for which the entity delivered an irrevocable notice relating to the redemption | ' | ' | ' | $137 |
Principal amount of notes repurchased | ' | 137 | ' | ' |
Redemption price of debt instrument as a percentage of principal amount | ' | 103.79% | ' | ' |
Loss related to the early extinguishment of the repurchased notes | 7 | 7 | ' | ' |
Redemption premiums included in loss on extinguishment of debt | ' | 5 | ' | ' |
Unamortized debt issuance costs written-off related to loss on early extinguishment of debt | ' | $2 | ' | ' |
Debt_Details_3
Debt (Details 3) (USD $) | Aug. 03, 2013 | Feb. 02, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Aug. 03, 2013 | Aug. 03, 2013 |
In Millions, unless otherwise specified | Restated Revolving Credit Facility | Restated Term Loan Credit Facility | Restated Term Loan Credit Facility | |||
Asset-based Revolving Credit Facility | ' | ' | ' | ' | ' | ' |
Borrowing base amount | ' | ' | ' | $650 | ' | ' |
Outstanding borrowings | ' | ' | ' | 222 | ' | ' |
Outstanding letters of credit | ' | ' | ' | 61 | ' | ' |
Unused borrowing capacity | ' | ' | ' | 367 | ' | ' |
Scheduled quarterly payments as a percentage of the original principal amount of the term loans | ' | ' | ' | ' | ' | 0.25% |
Period of incurrence of additional term loans to make scheduled quarterly payments | ' | ' | ' | ' | ' | '6 years 9 months |
Scheduled quarterly payments of the original principal amount of the term loans | ' | ' | ' | ' | 4 | ' |
Current portion of long-term debt | $238 | $150 | $1 | ' | $16 | $16 |
Period of scheduled quarterly payments | ' | ' | ' | ' | '12 months | ' |
Comprehensive_Income_Details
Comprehensive Income (Details) (USD $) | 3 Months Ended | 6 Months Ended | |
In Millions, unless otherwise specified | Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 |
Comprehensive Income | ' | ' | ' |
Balance at the beginning of the period | ' | ' | $6 |
Foreign currency translation adjustment | -1 | -2 | -2 |
Balance at the end of the period | $4 | $6 | $4 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Aug. 03, 2013 |
In Millions, unless otherwise specified | |
Senior notes | ' |
Fair Value Measurements | ' |
Interest rate (as a percent) | 7.75% |
Carrying Value | Senior secured term loan | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,636 |
Carrying Value | Senior notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,007 |
Carrying Value | Senior subordinated notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 255 |
Fair Value | Senior secured term loan | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,645 |
Fair Value | Senior notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,079 |
Fair Value | Senior subordinated notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 267 |
Income_Taxes_Details
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 | Feb. 01, 2014 | |
Annualized Estimate | |||||
Effective tax rate from continuing operations | ' | ' | ' | ' | ' |
Effective tax rate (as a percent) | 32.00% | 40.00% | 36.40% | 36.20% | 37.40% |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 6 Months Ended |
In Millions, unless otherwise specified | Aug. 03, 2013 |
Commitments and Contingencies | ' |
Amount of accrual for estimable and reasonably possible loss | $0 |
Aggregate estimate of possible loss | $10 |
Consumer Class Action Claims | Zip Code Claims | ' |
Commitments and Contingencies | ' |
Number of cases subject to the consolidation order | 2 |
The_Michaels_Companies_and_its1
The Michaels Companies and its Subsidiaries (Details) (USD $) | Aug. 03, 2013 | Feb. 02, 2013 | Jul. 28, 2012 | Jul. 31, 2013 | Jul. 29, 2013 |
In Millions, except Share data, unless otherwise specified | Michaels Companies, Inc. | PIK Notes | |||
item | |||||
Reorganization | ' | ' | ' | ' | ' |
Number of shares of common stock for which rights to receive available | ' | ' | ' | 1 | ' |
Number of shares of common stock of which options assumed | ' | ' | ' | 1 | ' |
Number of shares of common stock converted into Parent common stock | ' | ' | ' | 118,000,000 | ' |
Shares issued | 100 | 100 | 100 | 100 | ' |
Common Stock, par value (in dollars per share) | $0.10 | $0.10 | $0.10 | $0.10 | ' |
Principal amount of notes issued | ' | ' | ' | ' | $800 |
PIK interest rate one (as a percent) | ' | ' | ' | ' | 7.50% |
PIK interest rate two (as a percent) | ' | ' | ' | ' | 8.25% |
Number of interest payments to be paid entirely in cash | ' | ' | ' | ' | 2 |
Proceeds from debt after discount, fees and expenses | ' | ' | ' | ' | 782 |
Annual interest payments | ' | ' | ' | ' | 60 |
Total interest payments | ' | ' | ' | ' | $301 |
Segments_and_Geographic_Inform2
Segments and Geographic Information (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 | Feb. 02, 2013 |
item | |||||
Segments and Geographic Information | ' | ' | ' | ' | ' |
Number of reportable segments | ' | ' | 1 | ' | ' |
Sales and assets by country | ' | ' | ' | ' | ' |
Net sales | $904 | $892 | $1,897 | $1,870 | ' |
Total Assets | 1,645 | 1,703 | 1,645 | 1,703 | 1,555 |
United States | ' | ' | ' | ' | ' |
Sales and assets by country | ' | ' | ' | ' | ' |
Net sales | 819 | 812 | 1,717 | 1,703 | ' |
Total Assets | 1,522 | 1,586 | 1,522 | 1,586 | 1,446 |
Canada | ' | ' | ' | ' | ' |
Sales and assets by country | ' | ' | ' | ' | ' |
Net sales | 85 | 80 | 180 | 167 | ' |
Total Assets | $123 | $117 | $123 | $117 | $109 |
Segments_and_Geographic_Inform3
Segments and Geographic Information (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 |
Segment and Geographic Information | ' | ' | ' | ' |
Net income | $17 | $9 | $63 | $60 |
Interest expense | 45 | 61 | 92 | 127 |
Refinancing costs and losses on early extinguishment of debt | ' | ' | 7 | ' |
Provision for income taxes | 8 | 6 | 36 | 34 |
Depreciation and amortization | ' | ' | 50 | 46 |
Reporting segment | ' | ' | ' | ' |
Segment and Geographic Information | ' | ' | ' | ' |
Net income | 17 | 9 | 63 | 60 |
Interest expense | 45 | 61 | 92 | 127 |
Refinancing costs and losses on early extinguishment of debt | ' | ' | 7 | ' |
Provision for income taxes | 8 | 6 | 36 | 34 |
Depreciation and amortization | 25 | 22 | 50 | 46 |
EBITDA (excluding refinancing costs and losses on early extinguishments of debt) | $95 | $98 | $248 | $267 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 | Feb. 02, 2013 |
Related Party Transactions | ' | ' | ' | ' | ' |
Expenses recognized | $3 | $4 | $7 | $7 | ' |
Long-term debt held | 3,120 | 3,364 | 3,120 | 3,364 | 3,041 |
Receivable from parent | 4 | ' | 4 | ' | ' |
Payments on behalf of parent | ' | ' | 20 | ' | ' |
The Sponsors | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Annual management fees | ' | ' | 12 | ' | ' |
Highfields Capital Management LP | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Annual management fees | ' | ' | 1 | ' | ' |
Bain Capital Partners, LLC | Print procurement services received from an external vendor | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Expenses recognized | 1 | 1 | 2 | 3 | ' |
The Blackstone Group | Restated Term Loan Credit Facility | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Long-term debt held | 38 | ' | 38 | ' | ' |
The Blackstone Group | Lease services of certain properties from a vendor | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Expenses recognized | 1 | 1 | 2 | 2 | ' |
The Blackstone Group | Store inventory counting services received from an external vendor | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Expenses recognized | 2 | 1 | 3 | 3 | ' |
The Blackstone Group | Candy-type items in stores received from an external vendor | ' | ' | ' | ' | ' |
Related Party Transactions | ' | ' | ' | ' | ' |
Expenses recognized | $6 | $6 | $12 | $11 | ' |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Information (Details) (USD $) | Aug. 03, 2013 | Feb. 02, 2013 | Jul. 28, 2012 | Jan. 28, 2012 |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | $51,000,000 | $56,000,000 | $113,000,000 | $371,000,000 |
Merchandise inventories | 909,000,000 | 862,000,000 | 925,000,000 | ' |
Other | 170,000,000 | 126,000,000 | 158,000,000 | ' |
Total current assets | 1,130,000,000 | 1,044,000,000 | 1,196,000,000 | ' |
Property and equipment, net | 347,000,000 | 338,000,000 | 326,000,000 | ' |
Goodwill | 94,000,000 | 94,000,000 | 95,000,000 | ' |
Other assets | 74,000,000 | 79,000,000 | 86,000,000 | ' |
Total assets | 1,645,000,000 | 1,555,000,000 | 1,703,000,000 | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 289,000,000 | 263,000,000 | 277,000,000 | ' |
Accrued liabilities and other | 335,000,000 | 367,000,000 | 353,000,000 | ' |
Share-based compensation liability | 19,000,000 | 35,000,000 | 29,000,000 | ' |
Current portion of long-term debt | 238,000,000 | 150,000,000 | 1,000,000 | ' |
Other | 4,000,000 | 41,000,000 | 1,000,000 | ' |
Total current liabilities | 885,000,000 | 856,000,000 | 661,000,000 | ' |
Long-term debt | 2,882,000,000 | 2,891,000,000 | 3,363,000,000 | ' |
Other long-term liabilities | 83,000,000 | 85,000,000 | 97,000,000 | ' |
Share-based compensation liability | 26,000,000 | 27,000,000 | 23,000,000 | ' |
Total stockholders' deficit | -2,231,000,000 | -2,304,000,000 | -2,441,000,000 | ' |
Total liabilities and stockholders' deficit | 1,645,000,000 | 1,555,000,000 | 1,703,000,000 | ' |
Parent Company | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | 28,000,000 | 37,000,000 | 93,000,000 | 363,000,000 |
Merchandise inventories | 619,000,000 | 591,000,000 | 603,000,000 | ' |
Other | 142,000,000 | 105,000,000 | 135,000,000 | ' |
Total current assets | 789,000,000 | 733,000,000 | 831,000,000 | ' |
Property and equipment, net | 274,000,000 | 271,000,000 | 265,000,000 | ' |
Goodwill | 94,000,000 | 94,000,000 | 95,000,000 | ' |
Investment in subsidiaries | 453,000,000 | 284,000,000 | 569,000,000 | ' |
Other assets | 72,000,000 | 76,000,000 | 83,000,000 | ' |
Total assets | 1,682,000,000 | 1,458,000,000 | 1,843,000,000 | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 5,000,000 | 5,000,000 | 8,000,000 | ' |
Accrued liabilities and other | 205,000,000 | 235,000,000 | 234,000,000 | ' |
Share-based compensation liability | 6,000,000 | 22,000,000 | 19,000,000 | ' |
Current portion of long-term debt | 238,000,000 | 150,000,000 | 1,000,000 | ' |
Intercompany payable | 484,000,000 | 329,000,000 | 556,000,000 | ' |
Other | 4,000,000 | 36,000,000 | 1,000,000 | ' |
Total current liabilities | 942,000,000 | 777,000,000 | 819,000,000 | ' |
Long-term debt | 2,882,000,000 | 2,891,000,000 | 3,363,000,000 | ' |
Other long-term liabilities | 72,000,000 | 73,000,000 | 86,000,000 | ' |
Share-based compensation liability | 17,000,000 | 21,000,000 | 16,000,000 | ' |
Total stockholders' deficit | -2,231,000,000 | -2,304,000,000 | -2,441,000,000 | ' |
Total liabilities and stockholders' deficit | 1,682,000,000 | 1,458,000,000 | 1,843,000,000 | ' |
Guarantor Subsidiaries | ' | ' | ' | ' |
Percentage of equity ownership owned | 100.00% | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | 23,000,000 | 19,000,000 | 20,000,000 | 8,000,000 |
Merchandise inventories | 290,000,000 | 271,000,000 | 322,000,000 | ' |
Intercompany receivables | 484,000,000 | 329,000,000 | 556,000,000 | ' |
Other | 28,000,000 | 21,000,000 | 23,000,000 | ' |
Total current assets | 825,000,000 | 640,000,000 | 921,000,000 | ' |
Property and equipment, net | 73,000,000 | 67,000,000 | 61,000,000 | ' |
Other assets | 2,000,000 | 3,000,000 | 3,000,000 | ' |
Total assets | 900,000,000 | 710,000,000 | 985,000,000 | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 284,000,000 | 258,000,000 | 269,000,000 | ' |
Accrued liabilities and other | 130,000,000 | 132,000,000 | 119,000,000 | ' |
Share-based compensation liability | 13,000,000 | 13,000,000 | 10,000,000 | ' |
Other | ' | 5,000,000 | ' | ' |
Total current liabilities | 427,000,000 | 408,000,000 | 398,000,000 | ' |
Other long-term liabilities | 11,000,000 | 12,000,000 | 11,000,000 | ' |
Share-based compensation liability | 9,000,000 | 6,000,000 | 7,000,000 | ' |
Total stockholders' deficit | 453,000,000 | 284,000,000 | 569,000,000 | ' |
Total liabilities and stockholders' deficit | 900,000,000 | 710,000,000 | 985,000,000 | ' |
Eliminations | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Intercompany receivables | -484,000,000 | -329,000,000 | -556,000,000 | ' |
Total current assets | -484,000,000 | -329,000,000 | -556,000,000 | ' |
Investment in subsidiaries | -453,000,000 | -284,000,000 | -569,000,000 | ' |
Total assets | -937,000,000 | -613,000,000 | -1,125,000,000 | ' |
Current liabilities: | ' | ' | ' | ' |
Intercompany payable | -484,000,000 | -329,000,000 | -556,000,000 | ' |
Total current liabilities | -484,000,000 | -329,000,000 | -556,000,000 | ' |
Total stockholders' deficit | -453,000,000 | -284,000,000 | -569,000,000 | ' |
Total liabilities and stockholders' deficit | ($937,000,000) | ($613,000,000) | ($1,125,000,000) | ' |
Condensed_Consolidating_Financ3
Condensed Consolidating Financial Information (Details 2) (USD $) | 3 Months Ended | 6 Months Ended | ||
Aug. 03, 2013 | Jul. 28, 2012 | Aug. 03, 2013 | Jul. 28, 2012 | |
Net sales | $904,000,000 | $892,000,000 | $1,897,000,000 | $1,870,000,000 |
Cost of sales and occupancy expense | 567,000,000 | 557,000,000 | 1,151,000,000 | 1,124,000,000 |
Gross profit | 337,000,000 | 335,000,000 | 746,000,000 | 746,000,000 |
Selling, general, and administrative expense | 254,000,000 | 251,000,000 | 526,000,000 | 510,000,000 |
Share-based compensation | 8,000,000 | 3,000,000 | 11,000,000 | 7,000,000 |
Related party expenses | 3,000,000 | 4,000,000 | 7,000,000 | 7,000,000 |
Store pre-opening costs | 1,000,000 | 1,000,000 | 3,000,000 | 2,000,000 |
Operating income | 71,000,000 | 76,000,000 | 199,000,000 | 220,000,000 |
Interest expense | 45,000,000 | 61,000,000 | 92,000,000 | 127,000,000 |
Refinancing costs and losses on early extinguishment of debt | ' | ' | 7,000,000 | ' |
Other (income) and expense, net | 1,000,000 | ' | 1,000,000 | -1,000,000 |
Income before income taxes | 25,000,000 | 15,000,000 | 99,000,000 | 94,000,000 |
Provision for income taxes | 8,000,000 | 6,000,000 | 36,000,000 | 34,000,000 |
Net income | 17,000,000 | 9,000,000 | 63,000,000 | 60,000,000 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustment and other | -1,000,000 | -2,000,000 | -2,000,000 | ' |
Comprehensive income | 16,000,000 | 7,000,000 | 61,000,000 | 60,000,000 |
Parent Company | ' | ' | ' | ' |
Net sales | 783,000,000 | 777,000,000 | 1,652,000,000 | 1,638,000,000 |
Cost of sales and occupancy expense | 522,000,000 | 519,000,000 | 1,077,000,000 | 1,056,000,000 |
Gross profit | 261,000,000 | 258,000,000 | 575,000,000 | 582,000,000 |
Selling, general, and administrative expense | 221,000,000 | 218,000,000 | 455,000,000 | 442,000,000 |
Share-based compensation | 6,000,000 | 2,000,000 | 9,000,000 | 6,000,000 |
Related party expenses | 3,000,000 | 4,000,000 | 7,000,000 | 7,000,000 |
Store pre-opening costs | 1,000,000 | 1,000,000 | 3,000,000 | 2,000,000 |
Operating income | 30,000,000 | 33,000,000 | 101,000,000 | 125,000,000 |
Interest expense | 45,000,000 | 61,000,000 | 92,000,000 | 127,000,000 |
Refinancing costs and losses on early extinguishment of debt | ' | ' | 7,000,000 | ' |
Intercompany charges (income) | 12,000,000 | 15,000,000 | 25,000,000 | 32,000,000 |
Equity in earnings of subsidiaries | 52,000,000 | 58,000,000 | 122,000,000 | 128,000,000 |
Income before income taxes | 25,000,000 | 15,000,000 | 99,000,000 | 94,000,000 |
Provision for income taxes | 8,000,000 | 6,000,000 | 36,000,000 | 34,000,000 |
Net income | 17,000,000 | 9,000,000 | 63,000,000 | 60,000,000 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustment and other | -1,000,000 | -2,000,000 | -2,000,000 | ' |
Comprehensive income | 16,000,000 | 7,000,000 | 61,000,000 | 60,000,000 |
Guarantor Subsidiaries | ' | ' | ' | ' |
Net sales | 534,000,000 | 521,000,000 | 1,081,000,000 | 1,070,000,000 |
Cost of sales and occupancy expense | 458,000,000 | 444,000,000 | 910,000,000 | 906,000,000 |
Gross profit | 76,000,000 | 77,000,000 | 171,000,000 | 164,000,000 |
Selling, general, and administrative expense | 33,000,000 | 33,000,000 | 71,000,000 | 68,000,000 |
Share-based compensation | 2,000,000 | 1,000,000 | 2,000,000 | 1,000,000 |
Operating income | 41,000,000 | 43,000,000 | 98,000,000 | 95,000,000 |
Other (income) and expense, net | 1,000,000 | ' | 1,000,000 | -1,000,000 |
Intercompany charges (income) | -12,000,000 | -15,000,000 | -25,000,000 | -32,000,000 |
Income before income taxes | 52,000,000 | 58,000,000 | 122,000,000 | 128,000,000 |
Provision for income taxes | 13,000,000 | 22,000,000 | 44,000,000 | 46,000,000 |
Net income | 39,000,000 | 36,000,000 | 78,000,000 | 82,000,000 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Comprehensive income | 39,000,000 | 36,000,000 | 78,000,000 | 82,000,000 |
Eliminations | ' | ' | ' | ' |
Net sales | -413,000,000 | -406,000,000 | -836,000,000 | -838,000,000 |
Cost of sales and occupancy expense | -413,000,000 | -406,000,000 | -836,000,000 | -838,000,000 |
Equity in earnings of subsidiaries | -52,000,000 | -58,000,000 | -122,000,000 | -128,000,000 |
Income before income taxes | -52,000,000 | -58,000,000 | -122,000,000 | -128,000,000 |
Provision for income taxes | -13,000,000 | -22,000,000 | -44,000,000 | -46,000,000 |
Net income | -39,000,000 | -36,000,000 | -78,000,000 | -82,000,000 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Comprehensive income | ($39,000,000) | ($36,000,000) | ($78,000,000) | ($82,000,000) |
Condensed_Consolidating_Financ4
Condensed Consolidating Financial Information (Details 3) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Aug. 03, 2013 | Jul. 28, 2012 |
Operating activities: | ' | ' |
Net cash provided by operating activities | ($14) | ($80) |
Investing activities: | ' | ' |
Cash paid for property and equipment | -50 | -45 |
Net cash used in investing activities | -50 | -45 |
Financing activities: | ' | ' |
Net repayments of short-term debt | 75 | ' |
Net repayments of long-term debt | ' | -127 |
Other financing activities | -16 | -6 |
Net cash provided by (used in) financing activities | 59 | -133 |
Net decrease in cash and equivalents | -5 | -258 |
Cash and equivalents at beginning of period | 56 | 371 |
Cash and equivalents at end of period | 51 | 113 |
Parent Company | ' | ' |
Operating activities: | ' | ' |
Net cash provided by operating activities | -33 | -99 |
Investing activities: | ' | ' |
Cash paid for property and equipment | -35 | -38 |
Net cash used in investing activities | -35 | -38 |
Financing activities: | ' | ' |
Net repayments of short-term debt | 75 | ' |
Net repayments of long-term debt | ' | -127 |
Other financing activities | -16 | -6 |
Net cash provided by (used in) financing activities | 59 | -133 |
Net decrease in cash and equivalents | -9 | -270 |
Cash and equivalents at beginning of period | 37 | 363 |
Cash and equivalents at end of period | 28 | 93 |
Guarantor Subsidiaries | ' | ' |
Operating activities: | ' | ' |
Net cash provided by operating activities | 66 | 68 |
Investing activities: | ' | ' |
Cash paid for property and equipment | -15 | -7 |
Net cash used in investing activities | -15 | -7 |
Financing activities: | ' | ' |
Intercompany dividends | -47 | -49 |
Net cash provided by (used in) financing activities | -47 | -49 |
Net decrease in cash and equivalents | 4 | 12 |
Cash and equivalents at beginning of period | 19 | 8 |
Cash and equivalents at end of period | 23 | 20 |
Eliminations | ' | ' |
Operating activities: | ' | ' |
Net cash provided by operating activities | -47 | -49 |
Financing activities: | ' | ' |
Intercompany dividends | 47 | 49 |
Net cash provided by (used in) financing activities | $47 | $49 |