Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
3-May-14 | 30-May-14 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'MICHAELS STORES INC | ' |
Entity Central Index Key | '0000740670 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 3-May-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--01-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 100 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | 3-May-14 | Feb. 01, 2014 | 4-May-13 |
In Millions, unless otherwise specified | |||
Current assets: | ' | ' | ' |
Cash and equivalents | $112 | $234 | $55 |
Merchandise inventories | 930 | 901 | 843 |
Prepaid expenses and other | 95 | 95 | 85 |
Receivable from Parent | ' | 2 | ' |
Deferred income taxes | 37 | 39 | 37 |
Income tax receivables | 8 | 2 | 8 |
Total current assets | 1,182 | 1,273 | 1,028 |
Property and equipment, at cost | 1,628 | 1,600 | 1,527 |
Less accumulated depreciation and amortization | -1,266 | -1,242 | -1,186 |
Property and equipment, net | 362 | 358 | 341 |
Goodwill | 94 | 94 | 94 |
Debt issuance costs, net of accumulated amortization of $56, $54, and $52, respectively | 36 | 37 | 42 |
Deferred income taxes | 22 | 28 | 28 |
Long-term receivable from parent | 5 | 8 | ' |
Other assets | 3 | 3 | 2 |
Total non-current assets | 160 | 170 | 166 |
Total assets | 1,704 | 1,801 | 1,535 |
Current liabilities: | ' | ' | ' |
Accounts payable | 313 | 368 | 232 |
Accrued liabilities and other | 315 | 377 | 300 |
Share-based compensation liability | ' | ' | 36 |
Current portion of long-term debt | 16 | 16 | 198 |
Dividend payable to Holdings | ' | 30 | ' |
Deferred income taxes | ' | 1 | 4 |
Income taxes payable | 47 | 42 | 27 |
Total current liabilities | 691 | 834 | 797 |
Long-term debt | 2,873 | 2,878 | 2,887 |
Deferred income taxes | 1 | 2 | 2 |
Share-based compensation liability | ' | ' | 28 |
Other long-term liabilities | 84 | 88 | 79 |
Total long-term liabilities | 2,958 | 2,968 | 2,996 |
Total liabilities | 3,649 | 3,802 | 3,793 |
Commitments and contingencies | ' | ' | ' |
Stockholders' deficit: | ' | ' | ' |
Common Stock, $0.10 par value, 100 shares authorized; 100 shares issued and outstanding at May 3, 2014, February 1, 2014, and May 4, 2013 | ' | ' | ' |
Additional paid-in capital | 125 | 124 | 50 |
Accumulated deficit | -2,069 | -2,125 | -2,313 |
Accumulated other comprehensive (loss) income | -1 | ' | 5 |
Total stockholders' deficit | -1,945 | -2,001 | -2,258 |
Total liabilities and stockholders' deficit | $1,704 | $1,801 | $1,535 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | 3-May-14 | Feb. 01, 2014 | 4-May-13 |
In Millions, except Share data, unless otherwise specified | |||
CONSOLIDATED BALANCE SHEETS | ' | ' | ' |
Debt issuance costs, accumulated amortization (in dollars) | $56 | $54 | $52 |
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 | |
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' |
Net sales | $1,052 | $993 |
Cost of sales and occupancy expense | 623 | 584 |
Gross profit | 429 | 409 |
Selling, general, and administrative expense | 282 | 272 |
Share-based compensation | 4 | 3 |
Related party expenses | 3 | 4 |
Store pre-opening costs | 1 | 2 |
Operating income | 139 | 128 |
Interest expense | 41 | 47 |
Refinancing costs and losses on early extinguishment of debt | ' | 7 |
Income before income taxes | 98 | 74 |
Provision for income taxes | 42 | 28 |
Net income | 56 | 46 |
Other comprehensive (loss), net of tax: | ' | ' |
Foreign currency translation adjustment and other | -1 | -1 |
Comprehensive income | $55 | $45 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 |
Operating activities: | ' | ' |
Net income | $56 | $46 |
Adjustments: | ' | ' |
Depreciation and amortization | 27 | 25 |
Share-based compensation | 4 | 4 |
Debt issuance costs amortization | 2 | 2 |
Refinancing costs expensed and losses on early extinguishment of debt | ' | 7 |
Changes in assets and liabilities: | ' | ' |
Merchandise inventories | -28 | 20 |
Prepaid expenses and other | 1 | 1 |
Deferred income taxes | 5 | ' |
Accounts payable | -45 | -14 |
Accrued interest | -16 | -30 |
Accrued liabilities and other | -45 | -41 |
Income taxes | ' | -14 |
Other long-term liabilities | -3 | -4 |
Net cash (used in) provided by operating activities | -42 | 2 |
Investing activities: | ' | ' |
Additions to property and equipment | -31 | -22 |
Net cash used in investing activities | -31 | -22 |
Financing activities: | ' | ' |
Redemption of senior subordinated notes due 2016 | ' | -142 |
Borrowings on asset-based revolving credit facility | ' | 306 |
Payments on asset-based revolving credit facility | ' | -125 |
Repayments on senior secured term loan facility | -4 | ' |
Payments of dividends to Holdings | -30 | ' |
Payment of capital leases | ' | -1 |
Change in cash overdraft | -12 | -19 |
Other | -3 | ' |
Net cash (used in) provided by financing activities | -49 | 19 |
Net decrease in cash and equivalents | -122 | -1 |
Cash and equivalents at beginning of period | 234 | 56 |
Cash and equivalents at end of period | 112 | 55 |
Supplemental Cash Flow Information: | ' | ' |
Cash paid for interest | 56 | 75 |
Cash paid for income taxes | $36 | $44 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended |
3-May-14 | |
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 our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. All expressions of the “Company”, “us,” “we,” “our,” and all similar expressions are references to Michaels Stores, Inc. and our 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 1, 2014. | |
The balance sheet at February 1, 2014, has been derived from the 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 May 3, 2014 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 2014” relate to the 52 weeks ending January 31, 2015 and all references to “fiscal 2013” relate to the 52 weeks ended February 1, 2014. In addition, all references herein to “the first quarter of fiscal 2014” relate to the 13 weeks ended May 3, 2014, and all references to “the first quarter of fiscal 2013” relate to the 13 weeks ended May 4, 2013. | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. We are evaluating the new standard, but do not, at this time, anticipate a material impact to the financial statements once implemented. | |
Debt
Debt | 3 Months Ended | ||||||||||||
3-May-14 | |||||||||||||
Debt | ' | ||||||||||||
Debt | ' | ||||||||||||
Note 2. 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. | |||||||||||||
May 3, | February 1, | May 4, | Interest | ||||||||||
2014 | 2014 | 2013 | Rate | ||||||||||
(in millions) | |||||||||||||
Senior secured term loan | $ | 1,623 | $ | 1,628 | $ | 1,640 | Variable | ||||||
Senior notes | 1,006 | 1,006 | 1,007 | 7.75% | |||||||||
Senior subordinated notes | 260 | 260 | — | 5.88% | |||||||||
Senior subordinated notes | — | — | 256 | 11.38% | |||||||||
Asset-based revolving credit facility | — | — | 182 | Variable | |||||||||
Total debt | 2,889 | 2,894 | 3,085 | ||||||||||
Less current portion | 16 | 16 | 198 | ||||||||||
Long-term debt | $ | 2,873 | $ | 2,878 | $ | 2,887 | |||||||
Restated Revolving Credit Facility | |||||||||||||
As of May 3, 2014, the borrowing base of our restated senior secured asset-based revolving credit facility (“Restated Revolving Credit Facility”) was $650 million, of which we had no borrowings, $61 million of outstanding letters of credit and the unused borrowing capacity was $589 million. |
Comprehensive_Loss
Comprehensive Loss | 3 Months Ended | ||||
3-May-14 | |||||
Comprehensive Loss | ' | ||||
Comprehensive Loss | ' | ||||
Note 3. Comprehensive Loss | |||||
Accumulated other comprehensive loss, net of tax, is reflected in the Consolidated Balance Sheets as follows: | |||||
Foreign Currency | |||||
Translation | |||||
and Other | |||||
(in millions) | |||||
Balance at February 1, 2014 | $ | — | |||
Foreign currency translation adjustment and other | (1 | ) | |||
Balance at May 3, 2014 | $ | (1 | ) |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||
3-May-14 | ||||||||
Fair Value Measurements | ' | |||||||
Fair Value Measurements | ' | |||||||
Note 4. Fair Value Measurements | ||||||||
As defined in Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”), 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. | ||||||||
The table below provides the carrying and fair values of our senior secured term loan facility (“Restated Term Loan Credit Facility”), our 73/4% Senior Notes that are due in 2018 (“2018 Senior Notes”) and our 57/8% Senior Subordinated Notes that are due in 2020 (the “2020 Senior Subordinated Notes”, and together, with our 2018 Senior Notes, (“our notes”)) as of May 3, 2014. 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 | Fair | |||||||
Value | Value | |||||||
(in millions) | ||||||||
Senior secured term loan | $ | 1,623 | $ | 1,626 | ||||
Senior notes | 1,006 | 1,060 | ||||||
Senior subordinated notes | 260 | 263 | ||||||
Income_Taxes
Income Taxes | 3 Months Ended |
3-May-14 | |
Income Taxes | ' |
Income Taxes | ' |
Note 5. Income Taxes | |
The effective tax rate was 42.9% for the first quarter of fiscal 2014. The effective rate was 37.8% for the first quarter of fiscal 2013. The current rate is higher than the prior year due to certain discrete items required to be recognized as a result of a change in tax status of our Canadian subsidiary. On February 2, 2014, the Company changed the corporate structure of our Canadian operations from a branch for U.S. tax purposes to a controlled foreign corporation of an indirect foreign subsidiary of Michaels Stores, Inc. As a result of the change in tax status, the net deferred tax assets related to U.S. temporary differences for the branch were written off. In addition, the Company recognized as discrete events, a tax gain on the contribution of certain assets to the new entity as part of the transaction, as well as previously unrecognized currency losses. The effects of the write-off, the gain on the contribution, and the currency losses were discrete charges to the income tax provision of $6 million, $1 million, and ($1) million respectively, during the first quarter. We currently estimate our effective tax rate for fiscal 2014 to be approximately 38.5%. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
3-May-14 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
Note 6. 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 1, 2014. | |
Employee claims | |
Rea claim | |
On September 15, 2011, the Company was served with a lawsuit filed in the California Superior Court in and for the County of Orange (“Superior Court”) by four former store managers as a class action proceeding on behalf of themselves and certain former and current store managers employed by Michaels in California. The lawsuit alleges that the Company stores improperly classified its store managers as exempt employees and as such failed to pay all wages, overtime, waiting time penalties and failed to provide accurate wage statements. The lawsuit also alleges that the foregoing conduct was in breach of various laws, including California’s unfair competition law. On December 3, 2013, the Superior Court entered an Order certifying a class of approximately 200 members. The Company subsequently successfully removed the case to the United States District Court for the Central District of California and on May 8, 2014, the class was de-certified. We believe we have meritorious defenses and intend to defend the lawsuits vigorously. We do not believe the resolution of the lawsuits will have a material effect on our Consolidated Financial Statements. | |
Consumer class action claims | |
Data security incident | |
Five putative class actions were filed relating to our recent Data Breach. The plaintiffs generally allege that the Company failed to secure and safeguard customers’ private information including credit and debit card information and as such, breached an implied contract, violated the Illinois Consumer Fraud Act (and other states’ similar laws) and are seeking damages including declaratory relief, actual damages, punitive damages, statutory damages, attorneys’ fees, litigation costs, remedial action, pre and post judgment interest, and other relief as available. The cases are as follows: Christina Moyer v. Michaels Stores, Inc. was filed on January 27, 2014; Michael and Jessica Gouwens v. Michaels Stores, Inc., was filed on January 29, 2014; Nancy Maize and Jessica Gordon v. Michaels Stores, Inc., was filed on February 21, 2014; and Daniel Ripes v. Michaels Stores, Inc. was filed on March 14, 2014. All four of these cases were filed in the United States District Court-Northern District of Illinois, Eastern Division. A case, Mary Jane Whalen v. Michaels Stores, Inc., was filed in the United States District Court for the Eastern District of New York on March 18, 2014, but was voluntarily dismissed by the plaintiff on April 11, 2014, without prejudice to her right to re-file a complaint. On April 16, 2014, an order was entered consolidating the current actions. We believe we have meritorious defenses and intend to defend the lawsuits vigorously. | |
In addition, payment card companies and associations may require us to reimburse them for unauthorized card charges and costs to replace cards and may also impose fines or penalties in connection with the Data Breach, and enforcement authorities may also impose fines or other remedies against us. We have also incurred other costs associated with the Data Breach, including legal fees, investigative fees, costs of communications with customers and credit monitoring services provided to our customers. In addition, state and federal agencies, including the State Attorneys General and the Federal Trade Commission may investigate events related to the Data Breach, including how it occurred, its consequences and our responses. Although we intend to cooperate in these investigations, we may be subject to fines or other obligations, which may have an adverse effect on how we operate our business and our results of operations. | |
While a loss from these matters is reasonably possible, we cannot reasonably estimate a range of possible losses because our investigation into the matter is ongoing, the proceedings remain in the early stages, alleged damages have not been specified, there is uncertainty as to the likelihood of a class or classes being certified or the ultimate size of any class if certified, and there are significant factual and legal issues to be resolved. | |
General | |
In addition to the litigation discussed above, we are now, and may be in the future, 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 $9 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. |
Segments_and_Geographic_Inform
Segments and Geographic Information | 3 Months Ended | ||||||||||
3-May-14 | |||||||||||
Segments and Geographic Information | ' | ||||||||||
Segments and Geographic Information | ' | ||||||||||
Note 7. Segments and Geographic Information | |||||||||||
We consider our Michaels - U.S., Michaels - Canada and Aaron Brothers to be our operating segments for purposes of determining reportable segments based on the criteria of ASC 280, Segment Reporting (“ASC 280”). 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. | |||||||||||
Our sales and assets by country are as follows: | |||||||||||
Quarter Ended | |||||||||||
May 3, | May 4, | ||||||||||
2014 | 2013 | ||||||||||
(in millions) | |||||||||||
Net Sales: | |||||||||||
United States | $ | 952 | $ | 899 | |||||||
Canada | 100 | 94 | |||||||||
Consolidated Total | $ | 1,052 | $ | 993 | |||||||
May 3, | February | May 4, | |||||||||
2014 | 1, | 2013 | |||||||||
2014 | |||||||||||
(in millions) | |||||||||||
Total Assets: | |||||||||||
United States | $ | 1,588 | $ | 1,678 | $ | 1,421 | |||||
Canada | 116 | 123 | 114 | ||||||||
Consolidated Total | $ | 1,704 | $ | 1,801 | $ | 1,535 | |||||
Our chief operating decision makers evaluate historical operating performance, plan and forecast future periods’ operating performance based on operating income and 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 these metrics more closely reflect the operating effectiveness of factors over which management has control. A reconciliation of Net income to EBITDA (excluding refinancing costs and losses on early extinguishment of debt) is presented below. | |||||||||||
Quarter Ended | |||||||||||
May 3, | May 4, | ||||||||||
2014 | 2013 | ||||||||||
(in millions) | |||||||||||
Net income | $ | 56 | $ | 46 | |||||||
Interest expense | 41 | 47 | |||||||||
Provision for income taxes | 42 | 28 | |||||||||
Refinancing costs and losses on early extinguishments of debt | — | 7 | |||||||||
Depreciation and amortization | 27 | 25 | |||||||||
EBITDA (excluding refinancing costs and losses on early extinguishments of debt) | $ | 166 | $ | 153 |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
3-May-14 | |
Related Party Transactions | ' |
Related Party Transactions | ' |
Note 8. 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 first quarters of fiscal 2014 and fiscal 2013, 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 each of the first quarters of fiscal 2014 and fiscal 2013 were $1 million each. 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 first quarters of fiscal 2014 and fiscal 2013 were $1 million. 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 first quarters of fiscal 2014 and fiscal 2013 were $2 million and $1 million, 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 Vistar, an external vendor we utilize for all of the candy-type items in our stores. Payments associated with this vendor during the first quarters of fiscal 2014 and fiscal 2013 were $7 million and $6 million, respectively. These expenses are recognized in Cost of sales as the sales are recorded. | |
Our current directors (other than Jill A. Greenthal, John J. Mahoney, James A. Quella, 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 May 3, 2014, affiliates of The Blackstone Group held approximately $38 million of our senior secured term loan. | |
Michaels Stores, Inc. is wholly owned by FinCo Holdings (“Holdings”). On July 29, 2013, FinCo Holdings co-issued $800 million aggregate principal amount of 7.50%/8.25% PIK Toggle Notes due 2018 (“PIK Notes”). The PIK Notes are not guaranteed by the Company, Holdings or any of their subsidiaries, but the indenture governing the PIK Notes contains restrictive covenants that apply to FinCo Holdings and its restricted subsidiaries, including the Company, Holdings and their subsidiaries, and a breach of such covenants would cause FinCo Holdings to be in default under the indenture governing the PIK Notes. In addition, the PIK Notes are not reflected in the financial statements of the Company. If interest on the PIK Notes for all interest periods is paid in cash, annual interest payments will total $60 million. The Company intends for any cash interest payments to be funded by the Company through a cash dividend to Holdings. In the first quarter of 2014, the Company paid a cash dividend of $30 million to Holdings. The dividend was declared during the fiscal year ended, February 1, 2014. | |
In the first fiscal quarter of 2014, the Company paid $8 million to repurchase common stock of The Michaels Companies, Inc. (the “Parent” of FinCo Holdings and Michaels Stores, Inc.) from former employees of Michaels Stores, Inc. The Company also received $5 million in proceeds from stock options exercised by former employees of Michaels Stores, Inc. The net proceeds of these transactions are recorded as a Long-term receivable from Parent on the Company’s Consolidated Balance Sheets. |
Condensed_Consolidating_Financ
Condensed Consolidating Financial Information | 3 Months Ended | |||||||||||||
3-May-14 | ||||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Note 9. Condensed Consolidating Financial Information | ||||||||||||||
All obligations of Michaels Stores, Inc. (“MSI”) under the 2018 Senior Notes, 2020 Senior Subordinated Notes, Restated Term Loan Credit Facility, and Restated Revolving Credit Facility are guaranteed by each of our subsidiaries other than Aaron Brothers Card Services, LLC, Artistree of Canada, ULC, Michaels Stores of Puerto Rico, LLC and certain foreign and domestic subsidiary holding companies. In addition, all obligations of Michaels Stores, Inc. under the Restated Term Loan Credit Facility and Restated Revolving Credit Facility are guaranteed by Holdings. As of May 3, 2014, the financial statements of Aaron Brothers Card Services, LLC, Artistree of Canada, ULC, Michaels Stores of Puerto Rico, LLC and certain foreign and domestic subsidiary holding companies were immaterial. Each subsidiary guarantor is 100% owned, directly or indirectly, by the Company and all guarantees are joint and several and full and unconditional. | ||||||||||||||
The following condensed consolidating financial information represents the financial information of MSI 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 | ||||||||||||||
May 3, 2014 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 79 | $ | 33 | $ | — | $ | 112 | ||||||
Merchandise inventories | 613 | 317 | — | 930 | ||||||||||
Intercompany receivables | — | 684 | (684 | ) | — | |||||||||
Other | 116 | 24 | — | 140 | ||||||||||
Total current assets | 808 | 1,058 | (684 | ) | 1,182 | |||||||||
Property and equipment, net | 283 | 79 | — | 362 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 656 | — | (656 | ) | — | |||||||||
Long-term receivable from Parent | 3 | 2 | — | 5 | ||||||||||
Other assets | 58 | 3 | — | 61 | ||||||||||
Total assets | $ | 1,902 | $ | 1,142 | $ | (1,340 | ) | $ | 1,704 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 8 | $ | 305 | $ | — | $ | 313 | ||||||
Accrued liabilities and other | 186 | 129 | — | 315 | ||||||||||
Current portion of long-term debt | 16 | — | — | 16 | ||||||||||
Intercompany payable | 684 | — | (684 | ) | — | |||||||||
Other | 47 | — | — | 47 | ||||||||||
Total current liabilities | 941 | 434 | (684 | ) | 691 | |||||||||
Long-term debt | 2,873 | — | — | 2,873 | ||||||||||
Other long-term liabilities | 73 | 12 | — | 85 | ||||||||||
Total stockholders’ deficit | (1,985 | ) | 696 | (656 | ) | (1,945 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,902 | $ | 1,142 | $ | (1,340 | ) | $ | 1,704 | |||||
Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||
February 1, 2014 | ||||||||||||||
Parent | Subsidiaries | Eliminations | Consolidated | |||||||||||
Company | ||||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 190 | $ | 44 | $ | — | $ | 234 | ||||||
Merchandise inventories | 607 | 294 | — | 901 | ||||||||||
Intercompany receivables | 2 | 645 | (645 | ) | 2 | |||||||||
Other | 114 | 22 | — | 136 | ||||||||||
Total current assets | 913 | 1,005 | (645 | ) | 1,273 | |||||||||
Property and equipment, net | 281 | 77 | — | 358 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 526 | — | (526 | ) | — | |||||||||
Long-term receivable from Parent | 5 | 3 | — | 8 | ||||||||||
Other assets | 66 | 2 | — | 68 | ||||||||||
Total assets | $ | 1,885 | $ | 1,087 | $ | (1,171 | ) | $ | 1,801 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 5 | $ | 363 | $ | — | $ | 368 | ||||||
Accrued liabilities and other | 229 | 148 | — | 377 | ||||||||||
Current portion of long-term debt | 16 | — | — | 16 | ||||||||||
Dividend payable to Holdings | 30 | — | — | 30 | ||||||||||
Intercompany payable | 645 | — | (645 | ) | — | |||||||||
Other | 43 | — | — | 43 | ||||||||||
Total current liabilities | 968 | 511 | (645 | ) | 834 | |||||||||
Long-term debt | 2,878 | — | — | 2,878 | ||||||||||
Other long-term liabilities | 77 | 13 | — | 90 | ||||||||||
Total stockholders’ deficit | (2,038 | ) | 563 | (526 | ) | (2,001 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,885 | $ | 1,087 | $ | (1,171 | ) | $ | 1,801 | |||||
Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||
May 4, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 32 | $ | 23 | $ | — | $ | 55 | ||||||
Merchandise inventories | 588 | 255 | — | 843 | ||||||||||
Intercompany receivables | — | 442 | (442 | ) | — | |||||||||
Other | 108 | 22 | — | 130 | ||||||||||
Total current assets | 728 | 742 | (442 | ) | 1,028 | |||||||||
Property and equipment, net | 272 | 69 | — | 341 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 430 | — | (430 | ) | — | |||||||||
Other assets | 69 | 3 | — | 72 | ||||||||||
Total assets | $ | 1,593 | $ | 814 | $ | (872 | ) | $ | 1,535 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 4 | $ | 228 | $ | — | $ | 232 | ||||||
Accrued liabilities and other | 177 | 123 | — | 300 | ||||||||||
Share-based compensation | 23 | 13 | — | 36 | ||||||||||
Current portion of long-term debt | 198 | — | — | 198 | ||||||||||
Intercompany payable | 442 | — | (442 | ) | — | |||||||||
Other | 31 | — | — | 31 | ||||||||||
Total current liabilities | 875 | 364 | (442 | ) | 797 | |||||||||
Long-term debt | 2,887 | — | — | 2,887 | ||||||||||
Share-based compensation | 19 | 9 | — | 28 | ||||||||||
Other long-term liabilities | 70 | 11 | — | 81 | ||||||||||
Total stockholders’ deficit | (2,258 | ) | 430 | (430 | ) | (2,258 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,593 | $ | 814 | $ | (872 | ) | $ | 1,535 | |||||
Supplemental Condensed Consolidating Statement of Comprehensive Income | ||||||||||||||
Quarter Ended May 3, 2014 | ||||||||||||||
Parent | Subsidiaries | Eliminations | Consolidated | |||||||||||
Company | ||||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 922 | $ | 587 | $ | (457 | ) | $ | 1,052 | |||||
Cost of sales and occupancy expense | 587 | 493 | (457 | ) | 623 | |||||||||
Gross profit | 335 | 94 | — | 429 | ||||||||||
Selling, general, and administrative expense | 245 | 37 | — | 282 | ||||||||||
Share-based compensation | 3 | 1 | — | 4 | ||||||||||
Related party expenses | 3 | — | — | 3 | ||||||||||
Store pre-opening costs | 1 | — | — | 1 | ||||||||||
Operating income | 83 | 56 | — | 139 | ||||||||||
Interest expense | 41 | — | — | 41 | ||||||||||
Intercompany charges (income) | 14 | (14 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 70 | — | (70 | ) | — | |||||||||
Income before income taxes | 98 | 70 | (70 | ) | 98 | |||||||||
Provision for income taxes | 42 | 30 | (30 | ) | 42 | |||||||||
Net income | 56 | 40 | (40 | ) | 56 | |||||||||
Other comprehensive loss, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (1 | ) | — | — | (1 | ) | ||||||||
Comprehensive income | $ | 55 | $ | 40 | $ | (40 | ) | $ | 55 | |||||
Supplemental Condensed Consolidating Statement of Comprehensive Income | ||||||||||||||
Quarter Ended May 4, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 869 | $ | 547 | $ | (423 | ) | $ | 993 | |||||
Cost of sales and occupancy expense | 555 | 452 | (423 | ) | 584 | |||||||||
Gross profit | 314 | 95 | — | 409 | ||||||||||
Selling, general, and administrative expense | 234 | 38 | — | 272 | ||||||||||
Share-based compensation | 2 | 1 | — | 3 | ||||||||||
Related party expenses | 4 | — | — | 4 | ||||||||||
Store pre-opening costs | 2 | — | — | 2 | ||||||||||
Operating income | 72 | 56 | — | 128 | ||||||||||
Interest expense | 47 | — | — | 47 | ||||||||||
Refinancing costs and losses on early extinguishment of debt | 7 | — | — | 7 | ||||||||||
Intercompany charges (income) | 13 | (13 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 69 | — | (69 | ) | — | |||||||||
Income before income taxes | 74 | 69 | (69 | ) | 74 | |||||||||
Provision for income taxes | 28 | 26 | (26 | ) | 28 | |||||||||
Net income | 46 | 43 | (43 | ) | 46 | |||||||||
Other comprehensive loss, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (1 | ) | — | — | (1 | ) | ||||||||
Comprehensive income | $ | 45 | $ | 43 | $ | (43 | ) | $ | 45 | |||||
Supplemental Condensed Consolidating Statement of Cash Flows | ||||||||||||||
Quarter Ended May 3, 2014 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash (used in) provided by operating activities | $ | (39 | ) | $ | 20 | $ | (23 | ) | $ | (42 | ) | |||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (24 | ) | (7 | ) | — | (31 | ) | |||||||
Net cash used in investing activities | (24 | ) | (7 | ) | — | (31 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayments of long-term debt | (4 | ) | — | — | (4 | ) | ||||||||
Payment of dividends to Holdings | (30 | ) | — | — | (30 | ) | ||||||||
Intercompany dividends | — | (23 | ) | 23 | — | |||||||||
Other financing activities | (14 | ) | (1 | ) | — | (15 | ) | |||||||
Net cash used in financing activities | (48 | ) | (24 | ) | 23 | (49 | ) | |||||||
Decrease in cash and equivalents | (111 | ) | (11 | ) | — | (122 | ) | |||||||
Beginning cash and equivalents | 190 | 44 | — | 234 | ||||||||||
Ending cash and equivalents | $ | 79 | $ | 33 | $ | — | $ | 112 | ||||||
Supplemental Condensed Consolidating Statement of Cash Flows | ||||||||||||||
Quarter Ended May 4, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash (used in) provided by operating activities | $ | (8 | ) | $ | 34 | $ | (24 | ) | $ | 2 | ||||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (16 | ) | (6 | ) | — | (22 | ) | |||||||
Net cash used in investing activities | (16 | ) | (6 | ) | — | (22 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayments of long-term debt | 39 | — | — | 39 | ||||||||||
Intercompany dividends | — | (24 | ) | 24 | — | |||||||||
Other financing activities | (20 | ) | — | — | (20 | ) | ||||||||
Net cash provided by (used in) financing activities | 19 | (24 | ) | 24 | 19 | |||||||||
(Decrease) increase in cash and equivalents | (5 | ) | 4 | — | (1 | ) | ||||||||
Beginning cash and equivalents | 37 | 19 | — | 56 | ||||||||||
Ending cash and equivalents | $ | 32 | $ | 23 | $ | — | $ | 55 |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
3-May-14 | |
Summary of Significant Accounting Policies | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The consolidated financial statements include the accounts of Michaels Stores, Inc. and our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. All expressions of the “Company”, “us,” “we,” “our,” and all similar expressions are references to Michaels Stores, Inc. and our 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 1, 2014. | |
The balance sheet at February 1, 2014, has been derived from the 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 May 3, 2014 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 2014” relate to the 52 weeks ending January 31, 2015 and all references to “fiscal 2013” relate to the 52 weeks ended February 1, 2014. In addition, all references herein to “the first quarter of fiscal 2014” relate to the 13 weeks ended May 3, 2014, and all references to “the first quarter of fiscal 2013” relate to the 13 weeks ended May 4, 2013. | |
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. We are evaluating the new standard, but do not, at this time, anticipate a material impact to the financial statements once implemented. |
Debt_Tables
Debt (Tables) | 3 Months Ended | ||||||||||||
3-May-14 | |||||||||||||
Debt | ' | ||||||||||||
Schedule of outstanding debt | ' | ||||||||||||
May 3, | February 1, | May 4, | Interest | ||||||||||
2014 | 2014 | 2013 | Rate | ||||||||||
(in millions) | |||||||||||||
Senior secured term loan | $ | 1,623 | $ | 1,628 | $ | 1,640 | Variable | ||||||
Senior notes | 1,006 | 1,006 | 1,007 | 7.75% | |||||||||
Senior subordinated notes | 260 | 260 | — | 5.88% | |||||||||
Senior subordinated notes | — | — | 256 | 11.38% | |||||||||
Asset-based revolving credit facility | — | — | 182 | Variable | |||||||||
Total debt | 2,889 | 2,894 | 3,085 | ||||||||||
Less current portion | 16 | 16 | 198 | ||||||||||
Long-term debt | $ | 2,873 | $ | 2,878 | $ | 2,887 |
Comprehensive_Loss_Tables
Comprehensive Loss (Tables) | 3 Months Ended | ||||
3-May-14 | |||||
Comprehensive Loss | ' | ||||
Schedule of accumulated other comprehensive loss, net of tax | ' | ||||
Foreign Currency | |||||
Translation | |||||
and Other | |||||
(in millions) | |||||
Balance at February 1, 2014 | $ | — | |||
Foreign currency translation adjustment and other | (1 | ) | |||
Balance at May 3, 2014 | $ | (1 | ) |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||
3-May-14 | ||||||||
Fair Value Measurements | ' | |||||||
Schedule of carrying and fair values of loan and notes | ' | |||||||
Carrying | Fair | |||||||
Value | Value | |||||||
(in millions) | ||||||||
Senior secured term loan | $ | 1,623 | $ | 1,626 | ||||
Senior notes | 1,006 | 1,060 | ||||||
Senior subordinated notes | 260 | 263 | ||||||
Segments_and_Geographic_Inform1
Segments and Geographic Information (Tables) | 3 Months Ended | ||||||||||
3-May-14 | |||||||||||
Segments and Geographic Information | ' | ||||||||||
Schedule of sales and assets by country | ' | ||||||||||
Quarter Ended | |||||||||||
May 3, | May 4, | ||||||||||
2014 | 2013 | ||||||||||
(in millions) | |||||||||||
Net Sales: | |||||||||||
United States | $ | 952 | $ | 899 | |||||||
Canada | 100 | 94 | |||||||||
Consolidated Total | $ | 1,052 | $ | 993 | |||||||
May 3, | February | May 4, | |||||||||
2014 | 1, | 2013 | |||||||||
2014 | |||||||||||
(in millions) | |||||||||||
Total Assets: | |||||||||||
United States | $ | 1,588 | $ | 1,678 | $ | 1,421 | |||||
Canada | 116 | 123 | 114 | ||||||||
Consolidated Total | $ | 1,704 | $ | 1,801 | $ | 1,535 | |||||
Schedule of reconciliation of EBITDA (excluding refinancing costs and losses on early extinguishment of debt) | ' | ||||||||||
Quarter Ended | |||||||||||
May 3, | May 4, | ||||||||||
2014 | 2013 | ||||||||||
(in millions) | |||||||||||
Net income | $ | 56 | $ | 46 | |||||||
Interest expense | 41 | 47 | |||||||||
Provision for income taxes | 42 | 28 | |||||||||
Refinancing costs and losses on early extinguishments of debt | — | 7 | |||||||||
Depreciation and amortization | 27 | 25 | |||||||||
EBITDA (excluding refinancing costs and losses on early extinguishments of debt) | $ | 166 | $ | 153 |
Condensed_Consolidating_Financ1
Condensed Consolidating Financial Information (Tables) | 3 Months Ended | |||||||||||||
3-May-14 | ||||||||||||||
Condensed Consolidating Financial Information | ' | |||||||||||||
Schedule of Supplemental Condensed Consolidating Balance Sheet | ' | |||||||||||||
Supplemental Condensed Consolidating Balance Sheet | ||||||||||||||
May 3, 2014 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 79 | $ | 33 | $ | — | $ | 112 | ||||||
Merchandise inventories | 613 | 317 | — | 930 | ||||||||||
Intercompany receivables | — | 684 | (684 | ) | — | |||||||||
Other | 116 | 24 | — | 140 | ||||||||||
Total current assets | 808 | 1,058 | (684 | ) | 1,182 | |||||||||
Property and equipment, net | 283 | 79 | — | 362 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 656 | — | (656 | ) | — | |||||||||
Long-term receivable from Parent | 3 | 2 | — | 5 | ||||||||||
Other assets | 58 | 3 | — | 61 | ||||||||||
Total assets | $ | 1,902 | $ | 1,142 | $ | (1,340 | ) | $ | 1,704 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 8 | $ | 305 | $ | — | $ | 313 | ||||||
Accrued liabilities and other | 186 | 129 | — | 315 | ||||||||||
Current portion of long-term debt | 16 | — | — | 16 | ||||||||||
Intercompany payable | 684 | — | (684 | ) | — | |||||||||
Other | 47 | — | — | 47 | ||||||||||
Total current liabilities | 941 | 434 | (684 | ) | 691 | |||||||||
Long-term debt | 2,873 | — | — | 2,873 | ||||||||||
Other long-term liabilities | 73 | 12 | — | 85 | ||||||||||
Total stockholders’ deficit | (1,985 | ) | 696 | (656 | ) | (1,945 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,902 | $ | 1,142 | $ | (1,340 | ) | $ | 1,704 | |||||
February 1, 2014 | ||||||||||||||
Parent | Subsidiaries | Eliminations | Consolidated | |||||||||||
Company | ||||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 190 | $ | 44 | $ | — | $ | 234 | ||||||
Merchandise inventories | 607 | 294 | — | 901 | ||||||||||
Intercompany receivables | 2 | 645 | (645 | ) | 2 | |||||||||
Other | 114 | 22 | — | 136 | ||||||||||
Total current assets | 913 | 1,005 | (645 | ) | 1,273 | |||||||||
Property and equipment, net | 281 | 77 | — | 358 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 526 | — | (526 | ) | — | |||||||||
Long-term receivable from Parent | 5 | 3 | — | 8 | ||||||||||
Other assets | 66 | 2 | — | 68 | ||||||||||
Total assets | $ | 1,885 | $ | 1,087 | $ | (1,171 | ) | $ | 1,801 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 5 | $ | 363 | $ | — | $ | 368 | ||||||
Accrued liabilities and other | 229 | 148 | — | 377 | ||||||||||
Current portion of long-term debt | 16 | — | — | 16 | ||||||||||
Dividend payable to Holdings | 30 | — | — | 30 | ||||||||||
Intercompany payable | 645 | — | (645 | ) | — | |||||||||
Other | 43 | — | — | 43 | ||||||||||
Total current liabilities | 968 | 511 | (645 | ) | 834 | |||||||||
Long-term debt | 2,878 | — | — | 2,878 | ||||||||||
Other long-term liabilities | 77 | 13 | — | 90 | ||||||||||
Total stockholders’ deficit | (2,038 | ) | 563 | (526 | ) | (2,001 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,885 | $ | 1,087 | $ | (1,171 | ) | $ | 1,801 | |||||
May 4, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and equivalents | $ | 32 | $ | 23 | $ | — | $ | 55 | ||||||
Merchandise inventories | 588 | 255 | — | 843 | ||||||||||
Intercompany receivables | — | 442 | (442 | ) | — | |||||||||
Other | 108 | 22 | — | 130 | ||||||||||
Total current assets | 728 | 742 | (442 | ) | 1,028 | |||||||||
Property and equipment, net | 272 | 69 | — | 341 | ||||||||||
Goodwill | 94 | — | — | 94 | ||||||||||
Investment in subsidiaries | 430 | — | (430 | ) | — | |||||||||
Other assets | 69 | 3 | — | 72 | ||||||||||
Total assets | $ | 1,593 | $ | 814 | $ | (872 | ) | $ | 1,535 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 4 | $ | 228 | $ | — | $ | 232 | ||||||
Accrued liabilities and other | 177 | 123 | — | 300 | ||||||||||
Share-based compensation | 23 | 13 | — | 36 | ||||||||||
Current portion of long-term debt | 198 | — | — | 198 | ||||||||||
Intercompany payable | 442 | — | (442 | ) | — | |||||||||
Other | 31 | — | — | 31 | ||||||||||
Total current liabilities | 875 | 364 | (442 | ) | 797 | |||||||||
Long-term debt | 2,887 | — | — | 2,887 | ||||||||||
Share-based compensation | 19 | 9 | — | 28 | ||||||||||
Other long-term liabilities | 70 | 11 | — | 81 | ||||||||||
Total stockholders’ deficit | (2,258 | ) | 430 | (430 | ) | (2,258 | ) | |||||||
Total liabilities and stockholders’ deficit | $ | 1,593 | $ | 814 | $ | (872 | ) | $ | 1,535 | |||||
Schedule of Supplemental Condensed Consolidating Statement of Comprehensive Income | ' | |||||||||||||
Supplemental Condensed Consolidating Statement of Comprehensive Income | ||||||||||||||
Quarter Ended May 3, 2014 | ||||||||||||||
Parent | Subsidiaries | Eliminations | Consolidated | |||||||||||
Company | ||||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 922 | $ | 587 | $ | (457 | ) | $ | 1,052 | |||||
Cost of sales and occupancy expense | 587 | 493 | (457 | ) | 623 | |||||||||
Gross profit | 335 | 94 | — | 429 | ||||||||||
Selling, general, and administrative expense | 245 | 37 | — | 282 | ||||||||||
Share-based compensation | 3 | 1 | — | 4 | ||||||||||
Related party expenses | 3 | — | — | 3 | ||||||||||
Store pre-opening costs | 1 | — | — | 1 | ||||||||||
Operating income | 83 | 56 | — | 139 | ||||||||||
Interest expense | 41 | — | — | 41 | ||||||||||
Intercompany charges (income) | 14 | (14 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 70 | — | (70 | ) | — | |||||||||
Income before income taxes | 98 | 70 | (70 | ) | 98 | |||||||||
Provision for income taxes | 42 | 30 | (30 | ) | 42 | |||||||||
Net income | 56 | 40 | (40 | ) | 56 | |||||||||
Other comprehensive loss, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (1 | ) | — | — | (1 | ) | ||||||||
Comprehensive income | $ | 55 | $ | 40 | $ | (40 | ) | $ | 55 | |||||
Quarter Ended May 4, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
Net sales | $ | 869 | $ | 547 | $ | (423 | ) | $ | 993 | |||||
Cost of sales and occupancy expense | 555 | 452 | (423 | ) | 584 | |||||||||
Gross profit | 314 | 95 | — | 409 | ||||||||||
Selling, general, and administrative expense | 234 | 38 | — | 272 | ||||||||||
Share-based compensation | 2 | 1 | — | 3 | ||||||||||
Related party expenses | 4 | — | — | 4 | ||||||||||
Store pre-opening costs | 2 | — | — | 2 | ||||||||||
Operating income | 72 | 56 | — | 128 | ||||||||||
Interest expense | 47 | — | — | 47 | ||||||||||
Refinancing costs and losses on early extinguishment of debt | 7 | — | — | 7 | ||||||||||
Intercompany charges (income) | 13 | (13 | ) | — | — | |||||||||
Equity in earnings of subsidiaries | 69 | — | (69 | ) | — | |||||||||
Income before income taxes | 74 | 69 | (69 | ) | 74 | |||||||||
Provision for income taxes | 28 | 26 | (26 | ) | 28 | |||||||||
Net income | 46 | 43 | (43 | ) | 46 | |||||||||
Other comprehensive loss, net of tax: | ||||||||||||||
Foreign currency translation adjustment and other | (1 | ) | — | — | (1 | ) | ||||||||
Comprehensive income | $ | 45 | $ | 43 | $ | (43 | ) | $ | 45 | |||||
Schedule of Supplemental Condensed Consolidating Statement of Cash Flows | ' | |||||||||||||
Supplemental Condensed Consolidating Statement of Cash Flows | ||||||||||||||
Quarter Ended May 3, 2014 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash (used in) provided by operating activities | $ | (39 | ) | $ | 20 | $ | (23 | ) | $ | (42 | ) | |||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (24 | ) | (7 | ) | — | (31 | ) | |||||||
Net cash used in investing activities | (24 | ) | (7 | ) | — | (31 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayments of long-term debt | (4 | ) | — | — | (4 | ) | ||||||||
Payment of dividends to Holdings | (30 | ) | — | — | (30 | ) | ||||||||
Intercompany dividends | — | (23 | ) | 23 | — | |||||||||
Other financing activities | (14 | ) | (1 | ) | — | (15 | ) | |||||||
Net cash used in financing activities | (48 | ) | (24 | ) | 23 | (49 | ) | |||||||
Decrease in cash and equivalents | (111 | ) | (11 | ) | — | (122 | ) | |||||||
Beginning cash and equivalents | 190 | 44 | — | 234 | ||||||||||
Ending cash and equivalents | $ | 79 | $ | 33 | $ | — | $ | 112 | ||||||
Quarter Ended May 4, 2013 | ||||||||||||||
Parent | Guarantor | Eliminations | Consolidated | |||||||||||
Company | Subsidiaries | |||||||||||||
(in millions) | ||||||||||||||
Operating activities: | ||||||||||||||
Net cash (used in) provided by operating activities | $ | (8 | ) | $ | 34 | $ | (24 | ) | $ | 2 | ||||
Investing activities: | ||||||||||||||
Cash paid for property and equipment | (16 | ) | (6 | ) | — | (22 | ) | |||||||
Net cash used in investing activities | (16 | ) | (6 | ) | — | (22 | ) | |||||||
Financing activities: | ||||||||||||||
Net repayments of long-term debt | 39 | — | — | 39 | ||||||||||
Intercompany dividends | — | (24 | ) | 24 | — | |||||||||
Other financing activities | (20 | ) | — | — | (20 | ) | ||||||||
Net cash provided by (used in) financing activities | 19 | (24 | ) | 24 | 19 | |||||||||
(Decrease) increase in cash and equivalents | (5 | ) | 4 | — | (1 | ) | ||||||||
Beginning cash and equivalents | 37 | 19 | — | 56 | ||||||||||
Ending cash and equivalents | $ | 32 | $ | 23 | $ | — | $ | 55 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 12 Months Ended | ||
3-May-14 | 4-May-13 | Jan. 31, 2015 | Feb. 01, 2014 | |
item | item | item | item | |
Fiscal year | ' | ' | ' | ' |
Number of weeks in a fiscal year | 13 | 13 | 52 | 52 |
Debt_Details
Debt (Details) (USD $) | 3-May-14 | Feb. 01, 2014 | 4-May-13 |
In Millions, unless otherwise specified | |||
Debt | ' | ' | ' |
Total debt | $2,889 | $2,894 | $3,085 |
Less current portion | 16 | 16 | 198 |
Long-term debt | 2,873 | 2,878 | 2,887 |
Senior secured term loan | ' | ' | ' |
Debt | ' | ' | ' |
Total debt | 1,623 | 1,628 | 1,640 |
Senior notes | ' | ' | ' |
Debt | ' | ' | ' |
Total debt | 1,006 | 1,006 | 1,007 |
Interest rate (as a percent) | 7.75% | ' | ' |
5.875% senior subordinated notes | ' | ' | ' |
Debt | ' | ' | ' |
Total debt | 260 | 260 | ' |
Interest rate (as a percent) | 5.88% | ' | ' |
11.375% senior subordinated notes | ' | ' | ' |
Debt | ' | ' | ' |
Total debt | ' | ' | 256 |
Interest rate (as a percent) | 11.38% | ' | ' |
Asset-based revolving credit facility | ' | ' | ' |
Debt | ' | ' | ' |
Total debt | ' | ' | $182 |
Debt_Details_2
Debt (Details 2) (Restated Revolving Credit Facility, USD $) | 3-May-14 |
In Millions, unless otherwise specified | |
Restated Revolving Credit Facility | ' |
Asset-based Revolving Credit Facility | ' |
Borrowing base amount | $650 |
Outstanding borrowings | 0 |
Outstanding letters of credit | 61 |
Unused borrowing capacity | $589 |
Comprehensive_Loss_Details
Comprehensive Loss (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 |
Other comprehensive (loss) income | ' | ' |
Foreign currency translation adjustment and other | ($1) | ($1) |
Balance at the end of the period | -1 | 5 |
Foreign Currency Translation and Other | ' | ' |
Other comprehensive (loss) income | ' | ' |
Foreign currency translation adjustment and other | ($1) | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 3-May-14 |
In Millions, unless otherwise specified | |
Senior notes | ' |
Fair Value Measurements | ' |
Interest rate (as a percent) | 7.75% |
2020 Senior Subordinated Notes | ' |
Fair Value Measurements | ' |
Interest rate (as a percent) | 5.88% |
Carrying Value | Senior secured term loan | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,623 |
Carrying Value | Senior notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,006 |
Carrying Value | 2020 Senior Subordinated Notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 260 |
Fair Value | Senior secured term loan | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,626 |
Fair Value | Senior notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 1,060 |
Fair Value | 2020 Senior Subordinated Notes | ' |
Fair Value Measurements | ' |
Long-term loans and notes | 263 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 |
Effective tax rate from continuing operations | ' | ' |
Effective tax rate (as a percent) | 42.90% | 37.80% |
Effects of the write-off to the income tax provision | $6 | ' |
Gain on the contribution were discrete charges to the income tax provision | 1 | ' |
Discrete charges to the income tax provision, currency losses | ($1) | ' |
Annualized Estimate | ' | ' |
Effective tax rate from continuing operations | ' | ' |
Effective tax rate (as a percent) | 38.50% | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 3 Months Ended | 0 Months Ended | 2 Months Ended | |
In Millions, unless otherwise specified | 3-May-14 | Sep. 15, 2011 | Dec. 03, 2013 | Mar. 18, 2014 |
Employee claims | Employee claims | Consumer Class Action Claims | ||
Rea claim | Rea claim | Data security incident | ||
item | item | item | ||
Commitments and Contingencies | ' | ' | ' | ' |
Amount of accrual for estimable and reasonably possible loss | $0 | ' | ' | ' |
Aggregate estimate of possible loss | $9 | ' | ' | ' |
Commitments and Contingencies | ' | ' | ' | ' |
Number of plaintiffs | ' | 4 | ' | ' |
Number of certified members | ' | ' | 200 | ' |
Number of class actions filed | ' | ' | ' | 5 |
Segments_and_Geographic_Inform2
Segments and Geographic Information (Details) (USD $) | 3 Months Ended | ||
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 | Feb. 01, 2014 |
item | |||
Segments and Geographic Information | ' | ' | ' |
Number of reportable segments | 1 | ' | ' |
Sales and assets by country | ' | ' | ' |
Net sales | $1,052 | $993 | ' |
Total Assets | 1,704 | 1,535 | 1,801 |
United States | ' | ' | ' |
Sales and assets by country | ' | ' | ' |
Net sales | 952 | 899 | ' |
Total Assets | 1,588 | 1,421 | 1,678 |
Canada | ' | ' | ' |
Sales and assets by country | ' | ' | ' |
Net sales | 100 | 94 | ' |
Total Assets | $116 | $114 | $123 |
Segments_and_Geographic_Inform3
Segments and Geographic Information (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 |
Segments and Geographic Information | ' | ' |
Net income | $56 | $46 |
Interest expense | 41 | 47 |
Provision for income taxes | 42 | 28 |
Refinancing costs expensed and losses on early extinguishment of debt | ' | 7 |
Depreciation and amortization | 27 | 25 |
EBITDA (excluding refinancing costs and losses on early extinguishments of debt) | $166 | $153 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 3 Months Ended | 3 Months Ended | 0 Months Ended | |||||||||||||
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 | Feb. 01, 2014 | 3-May-14 | 4-May-13 | 3-May-14 | 3-May-14 | 4-May-13 | 3-May-14 | 4-May-13 | 3-May-14 | 4-May-13 | 3-May-14 | 3-May-14 | 3-May-14 | Jul. 29, 2013 | 3-May-14 |
Bain Capital Partners, LLC | Bain Capital Partners, LLC | The Blackstone Group | The Blackstone Group | The Blackstone Group | The Blackstone Group | The Blackstone Group | The Blackstone Group | The Blackstone Group | The Sponsors | Highfields Capital Management LP | Parent Company | Parent Company | Parent Company | ||||
Print procurement services received from an external vendor | Print procurement services received from an external vendor | Senior secured term loan | Store inventory counting services received from an external vendor | Store inventory counting services received from an external vendor | Candy-type items in stores received from an external vendor | Candy-type items in stores received from an external vendor | Lease services of certain properties from a vendor | Lease services of certain properties from a vendor | PIK Notes | PIK Notes | |||||||
Related Party Transactions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual management fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $12 | $1 | ' | ' | ' |
Expenses recognized | 3 | 4 | ' | 1 | 1 | ' | 2 | 1 | 7 | 6 | 1 | 1 | ' | ' | ' | ' | ' |
Long-term debt held | 2,889 | 3,085 | 2,894 | ' | ' | 38 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800 | ' |
PIK interest rate one (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7.50% | ' |
PIK interest rate two (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.25% | ' |
Annual interest payments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 60 |
Cash dividend paid | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30 | ' | ' |
Amount paid for repurchase of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' | ' |
Proceeds from stock options exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5 | ' | ' |
Condensed_Consolidating_Financ2
Condensed Consolidating Financial Information (Details) (USD $) | 3-May-14 | Feb. 01, 2014 | 4-May-13 | Feb. 02, 2013 |
In Millions, unless otherwise specified | ||||
Current assets: | ' | ' | ' | ' |
Cash and equivalents | $112 | $234 | $55 | $56 |
Merchandise inventories | 930 | 901 | 843 | ' |
Intercompany receivables | ' | 2 | ' | ' |
Other | 140 | 136 | 130 | ' |
Total current assets | 1,182 | 1,273 | 1,028 | ' |
Property and equipment, net | 362 | 358 | 341 | ' |
Goodwill | 94 | 94 | 94 | ' |
Long-term receivable from Parent | 5 | 8 | ' | ' |
Other assets | 61 | 68 | 72 | ' |
Total assets | 1,704 | 1,801 | 1,535 | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 313 | 368 | 232 | ' |
Accrued liabilities and other | 315 | 377 | 300 | ' |
Share-based compensation | ' | ' | 36 | ' |
Current portion of long-term debt | 16 | 16 | 198 | ' |
Dividend payable to Holdings | ' | 30 | ' | ' |
Other | 47 | 43 | 31 | ' |
Total current liabilities | 691 | 834 | 797 | ' |
Long-term debt | 2,873 | 2,878 | 2,887 | ' |
Share-based compensation | ' | ' | 28 | ' |
Other long-term liabilities | 85 | 90 | 81 | ' |
Total stockholders' deficit | -1,945 | -2,001 | -2,258 | ' |
Total liabilities and stockholders' deficit | 1,704 | 1,801 | 1,535 | ' |
Parent Company | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | 79 | 190 | 32 | 37 |
Merchandise inventories | 613 | 607 | 588 | ' |
Intercompany receivables | ' | 2 | ' | ' |
Other | 116 | 114 | 108 | ' |
Total current assets | 808 | 913 | 728 | ' |
Property and equipment, net | 283 | 281 | 272 | ' |
Goodwill | 94 | 94 | 94 | ' |
Investment in subsidiaries | 656 | 526 | 430 | ' |
Long-term receivable from Parent | 3 | 5 | ' | ' |
Other assets | 58 | 66 | 69 | ' |
Total assets | 1,902 | 1,885 | 1,593 | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 8 | 5 | 4 | ' |
Accrued liabilities and other | 186 | 229 | 177 | ' |
Share-based compensation | ' | ' | 23 | ' |
Current portion of long-term debt | 16 | 16 | 198 | ' |
Dividend payable to Holdings | ' | 30 | ' | ' |
Intercompany payable | 684 | 645 | 442 | ' |
Other | 47 | 43 | 31 | ' |
Total current liabilities | 941 | 968 | 875 | ' |
Long-term debt | 2,873 | 2,878 | 2,887 | ' |
Share-based compensation | ' | ' | 19 | ' |
Other long-term liabilities | 73 | 77 | 70 | ' |
Total stockholders' deficit | -1,985 | -2,038 | -2,258 | ' |
Total liabilities and stockholders' deficit | 1,902 | 1,885 | 1,593 | ' |
Guarantor Subsidiaries | ' | ' | ' | ' |
Supplemental Condensed Consolidating Balance Sheet | ' | ' | ' | ' |
Percentage of equity ownership owned | 100.00% | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Cash and equivalents | 33 | 44 | 23 | 19 |
Merchandise inventories | 317 | 294 | 255 | ' |
Intercompany receivables | 684 | 645 | 442 | ' |
Other | 24 | 22 | 22 | ' |
Total current assets | 1,058 | 1,005 | 742 | ' |
Property and equipment, net | 79 | 77 | 69 | ' |
Long-term receivable from Parent | 2 | 3 | ' | ' |
Other assets | 3 | 2 | 3 | ' |
Total assets | 1,142 | 1,087 | 814 | ' |
Current liabilities: | ' | ' | ' | ' |
Accounts payable | 305 | 363 | 228 | ' |
Accrued liabilities and other | 129 | 148 | 123 | ' |
Share-based compensation | ' | ' | 13 | ' |
Total current liabilities | 434 | 511 | 364 | ' |
Share-based compensation | ' | ' | 9 | ' |
Other long-term liabilities | 12 | 13 | 11 | ' |
Total stockholders' deficit | 696 | 563 | 430 | ' |
Total liabilities and stockholders' deficit | 1,142 | 1,087 | 814 | ' |
Eliminations | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' |
Intercompany receivables | -684 | -645 | -442 | ' |
Total current assets | -684 | -645 | -442 | ' |
Investment in subsidiaries | -656 | -526 | -430 | ' |
Total assets | -1,340 | -1,171 | -872 | ' |
Current liabilities: | ' | ' | ' | ' |
Intercompany payable | -684 | -645 | -442 | ' |
Total current liabilities | -684 | -645 | -442 | ' |
Total stockholders' deficit | -656 | -526 | -430 | ' |
Total liabilities and stockholders' deficit | ($1,340) | ($1,171) | ($872) | ' |
Condensed_Consolidating_Financ3
Condensed Consolidating Financial Information (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 |
Supplemental Condensed Consolidating Statement of Comprehensive Income | ' | ' |
Net sales | $1,052 | $993 |
Cost of sales and occupancy expense | 623 | 584 |
Gross profit | 429 | 409 |
Selling, general and administrative expense | 282 | 272 |
Share-based compensation | 4 | 3 |
Related party expenses | 3 | 4 |
Store pre-opening costs | 1 | 2 |
Operating income | 139 | 128 |
Interest expense | 41 | 47 |
Refinancing costs and losses on early extinguishment of debt | ' | 7 |
Income before income taxes | 98 | 74 |
Provision for income taxes | 42 | 28 |
Net income | 56 | 46 |
Other comprehensive loss, net of tax: | ' | ' |
Foreign currency translation adjustment and other | -1 | -1 |
Comprehensive income | 55 | 45 |
Parent Company | ' | ' |
Supplemental Condensed Consolidating Statement of Comprehensive Income | ' | ' |
Net sales | 922 | 869 |
Cost of sales and occupancy expense | 587 | 555 |
Gross profit | 335 | 314 |
Selling, general and administrative expense | 245 | 234 |
Share-based compensation | 3 | 2 |
Related party expenses | 3 | 4 |
Store pre-opening costs | 1 | 2 |
Operating income | 83 | 72 |
Interest expense | 41 | 47 |
Refinancing costs and losses on early extinguishment of debt | ' | 7 |
Intercompany charges (income) | 14 | 13 |
Equity in earnings of subsidiaries | 70 | 69 |
Income before income taxes | 98 | 74 |
Provision for income taxes | 42 | 28 |
Net income | 56 | 46 |
Other comprehensive loss, net of tax: | ' | ' |
Foreign currency translation adjustment and other | -1 | -1 |
Comprehensive income | 55 | 45 |
Guarantor Subsidiaries | ' | ' |
Supplemental Condensed Consolidating Statement of Comprehensive Income | ' | ' |
Net sales | 587 | 547 |
Cost of sales and occupancy expense | 493 | 452 |
Gross profit | 94 | 95 |
Selling, general and administrative expense | 37 | 38 |
Share-based compensation | 1 | 1 |
Operating income | 56 | 56 |
Intercompany charges (income) | -14 | -13 |
Income before income taxes | 70 | 69 |
Provision for income taxes | 30 | 26 |
Net income | 40 | 43 |
Other comprehensive loss, net of tax: | ' | ' |
Comprehensive income | 40 | 43 |
Eliminations | ' | ' |
Supplemental Condensed Consolidating Statement of Comprehensive Income | ' | ' |
Net sales | -457 | -423 |
Cost of sales and occupancy expense | -457 | -423 |
Equity in earnings of subsidiaries | -70 | -69 |
Income before income taxes | -70 | -69 |
Provision for income taxes | -30 | -26 |
Net income | -40 | -43 |
Other comprehensive loss, net of tax: | ' | ' |
Comprehensive income | ($40) | ($43) |
Condensed_Consolidating_Financ4
Condensed Consolidating Financial Information (Details 3) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | 3-May-14 | 4-May-13 |
Operating activities: | ' | ' |
Net cash (used in) provided by operating activities | ($42) | $2 |
Investing activities: | ' | ' |
Cash paid for property and equipment | -31 | -22 |
Net cash used in investing activities | -31 | -22 |
Financing activities: | ' | ' |
Net repayments of long-term debt | -4 | 39 |
Payments of dividends to Holdings | -30 | ' |
Other financing activities | -15 | -20 |
Net cash (used in) provided by financing activities | -49 | 19 |
Net decrease in cash and equivalents | -122 | -1 |
Cash and equivalents at beginning of period | 234 | 56 |
Cash and equivalents at end of period | 112 | 55 |
Parent Company | ' | ' |
Operating activities: | ' | ' |
Net cash (used in) provided by operating activities | -39 | -8 |
Investing activities: | ' | ' |
Cash paid for property and equipment | -24 | -16 |
Net cash used in investing activities | -24 | -16 |
Financing activities: | ' | ' |
Net repayments of long-term debt | -4 | 39 |
Payments of dividends to Holdings | -30 | ' |
Other financing activities | -14 | -20 |
Net cash (used in) provided by financing activities | -48 | 19 |
Net decrease in cash and equivalents | -111 | -5 |
Cash and equivalents at beginning of period | 190 | 37 |
Cash and equivalents at end of period | 79 | 32 |
Guarantor Subsidiaries | ' | ' |
Operating activities: | ' | ' |
Net cash (used in) provided by operating activities | 20 | 34 |
Investing activities: | ' | ' |
Cash paid for property and equipment | -7 | -6 |
Net cash used in investing activities | -7 | -6 |
Financing activities: | ' | ' |
Intercompany dividends | -23 | -24 |
Other financing activities | -1 | ' |
Net cash (used in) provided by financing activities | -24 | -24 |
Net decrease in cash and equivalents | -11 | 4 |
Cash and equivalents at beginning of period | 44 | 19 |
Cash and equivalents at end of period | 33 | 23 |
Eliminations | ' | ' |
Operating activities: | ' | ' |
Net cash (used in) provided by operating activities | -23 | -24 |
Financing activities: | ' | ' |
Intercompany dividends | 23 | 24 |
Net cash (used in) provided by financing activities | $23 | $24 |