CONDENSED CONSOLIDATING FINANCIAL INFORMATION | CONDENSED CONSOLIDATING FINANCIAL INFORMATION At April 29, 2017 , the Company had outstanding $750.0 million principal amount of 5.25% Acquisition Notes due March 1, 2020 and $2,500.0 million principal amount of 5.75% Acquisition Notes due March 1, 2023, which are unsecured obligations of the Company and are also fully, unconditionally, jointly and severally guaranteed on an unsecured, unsubordinated basis, subject to certain exceptions, by certain of the Company's direct or indirect wholly-owned U.S. subsidiaries, including Family Dollar and certain of its subsidiaries. All of the subsidiaries, guarantor and non-guarantor are 100% owned by the parent. Supplemental condensed consolidated financial information of the Company, including such information for the Guarantors, is presented below. The information is presented in accordance with the requirements of Rule 3-10 under Regulation S-X of the Securities and Exchange Commission (the "SEC"). The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the guarantor or the non-guarantor subsidiaries operated as independent entities. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the condensed consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups. The Company completed the exchange of the Acquisition Notes for registered notes with substantially identical terms on August 1, 2016. Condensed Consolidating Statements of Comprehensive Income 13 Weeks Ended April 29, 2017 Guarantor Non-Guarantor Consolidation Consolidated (in millions) Parent Subsidiaries Subsidiaries Adjustments Company Net sales $ — $ 5,247.4 $ 68.7 $ (29.0 ) $ 5,287.1 Cost of sales — 3,631.7 39.1 (10.8 ) 3,660.0 Gross profit — 1,615.7 29.6 (18.2 ) 1,627.1 Selling, general and administrative expenses 1.4 1,222.0 33.0 (18.1 ) 1,238.3 Operating income (loss) (1.4 ) 393.7 (3.4 ) (0.1 ) 388.8 Interest expense (income), net 57.5 19.1 (1.9 ) — 74.7 Other (income) expense, net — — 0.3 — 0.3 Income (loss) before income taxes (58.9 ) 374.6 (1.8 ) (0.1 ) 313.8 Income tax expense (benefit) (27.4 ) 140.2 0.5 — 113.3 Equity in earnings of subsidiaries (232.0 ) 0.1 — 231.9 — Net income 200.5 234.3 (2.3 ) (232.0 ) 200.5 Other comprehensive loss (3.0 ) (0.9 ) (3.0 ) 3.9 (3.0 ) Comprehensive income $ 197.5 $ 233.4 $ (5.3 ) $ (228.1 ) $ 197.5 13 Weeks Ended April 30, 2016 Guarantor Non-Guarantor Consolidation Consolidated (in millions) Parent Subsidiaries Subsidiaries Adjustments Company Net sales $ — $ 5,033.4 $ 184.8 $ (132.4 ) $ 5,085.8 Cost of sales — 3,489.8 160.6 (119.2 ) 3,531.2 Gross profit — 1,543.6 24.2 (13.2 ) 1,554.6 Selling, general and administrative expenses 2.0 1,138.0 14.6 (18.7 ) 1,135.9 Operating income (loss) (2.0 ) 405.6 9.6 5.5 418.7 Interest expense (income), net 72.9 16.3 (1.9 ) — 87.3 Other income, net (5.7 ) (0.3 ) (0.1 ) 5.9 (0.2 ) Income (loss) before income taxes (69.2 ) 389.6 11.6 (0.4 ) 331.6 Income tax expense (benefit) (33.7 ) 129.2 3.5 (0.1 ) 98.9 Equity in earnings of subsidiaries (268.5 ) (6.9 ) — 275.4 — Net income 233.0 267.3 8.1 (275.7 ) 232.7 Other comprehensive income 8.9 2.7 8.9 (11.6 ) 8.9 Comprehensive income $ 241.9 $ 270.0 $ 17.0 $ (287.3 ) $ 241.6 Condensed Consolidating Balance Sheets April 29, 2017 Guarantor Non-Guarantor Consolidating Consolidated (in millions) Parent Subsidiaries Subsidiaries Adjustments Company ASSETS Current assets: Cash and cash equivalents $ 468.4 $ 519.1 $ 167.4 $ — $ 1,154.9 Short-term investments — — 4.0 — 4.0 Merchandise inventories, net — 2,838.8 41.2 (1.6 ) 2,878.4 Current deferred tax assets, net — (8.2 ) 8.2 — — Due from intercompany, net 90.2 1,081.6 18.2 (1,190.0 ) — Other current assets 0.7 234.1 4.3 1.7 240.8 Total current assets 559.3 4,665.4 243.3 (1,189.9 ) 4,278.1 Property, plant and equipment, net — 3,066.6 27.3 — 3,093.9 Assets available for sale — 10.6 — — 10.6 Goodwill — 4,993.1 29.3 — 5,022.4 Favorable lease rights, net — 443.4 — — 443.4 Tradename intangible asset — 3,100.0 — — 3,100.0 Other intangible assets, net — 5.0 — — 5.0 Investment in subsidiaries 8,873.4 105.4 — (8,978.8 ) — Intercompany note receivable 1,926.4 — 188.8 (2,115.2 ) — Due from intercompany, net 1,215.9 — — (1,215.9 ) — Other assets — 41.1 3.2 (3.0 ) 41.3 Total assets $ 12,575.0 $ 16,430.6 $ 491.9 $ (13,502.8 ) $ 15,994.7 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 165.9 $ — $ — $ — $ 165.9 Accounts payable — 1,213.9 10.0 — 1,223.9 Due to intercompany, net 878.7 277.6 33.7 (1,190.0 ) — Other current liabilities 13.1 405.1 211.3 — 629.5 Income taxes payable 90.5 130.6 0.2 — 221.3 Total current liabilities 1,148.2 2,027.2 255.2 (1,190.0 ) 2,240.6 Long-term debt, net, excluding current portion 5,815.9 315.8 — — 6,131.7 Unfavorable lease rights, net — 117.6 — — 117.6 Deferred tax liabilities, net 1.9 1,431.7 — — 1,433.6 Income taxes payable, long-term — 71.8 — — 71.8 Due to intercompany, net — 1,215.9 — (1,215.9 ) — Intercompany note payable — 2,115.2 — (2,115.2 ) — Other liabilities — 385.5 7.8 (2.9 ) 390.4 Total liabilities 6,966.0 7,680.7 263.0 (4,524.0 ) 10,385.7 Shareholders' equity 5,609.0 8,749.9 228.9 (8,978.8 ) 5,609.0 Total liabilities and equity $ 12,575.0 $ 16,430.6 $ 491.9 $ (13,502.8 ) $ 15,994.7 Condensed Consolidating Balance Sheets (Continued) January 28, 2017 Guarantor Non-Guarantor Consolidating Consolidated (in millions) Parent Subsidiaries Subsidiaries Adjustments Company ASSETS Current assets: Cash and cash equivalents $ 562.4 $ 139.2 $ 164.8 $ — $ 866.4 Short-term investments — — 4.0 — 4.0 Merchandise inventories, net — 2,826.3 41.2 (1.7 ) 2,865.8 Current deferred tax assets, net — (9.3 ) 9.3 — — Due from intercompany, net 58.7 1,041.5 42.8 (1,143.0 ) — Other current assets 0.5 198.7 2.3 0.3 201.8 Total current assets 621.6 4,196.4 264.4 (1,144.4 ) 3,938.0 Property, plant and equipment, net — 3,085.3 30.5 — 3,115.8 Assets available for sale — 9.0 — — 9.0 Goodwill — 4,993.1 30.4 — 5,023.5 Favorable lease rights, net — 468.6 — — 468.6 Tradename intangible asset — 3,100.0 — — 3,100.0 Other intangible assets, net — 5.1 — — 5.1 Investment in subsidiaries 8,640.1 106.6 — (8,746.7 ) — Intercompany note receivable 1,926.4 — 188.8 (2,115.2 ) — Due from intercompany, net 1,243.8 — — (1,243.8 ) — Other assets — 41.3 3.3 (3.0 ) 41.6 Total assets $ 12,431.9 $ 16,005.4 $ 517.4 $ (13,253.1 ) $ 15,701.6 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 152.1 $ — $ — $ — $ 152.1 Accounts payable — 1,105.9 14.7 (1.0 ) 1,119.6 Due to intercompany, net 969.6 121.5 51.9 (1,143.0 ) — Other current liabilities 66.4 470.5 207.3 — 744.2 Income taxes payable (1.9 ) 91.0 0.9 — 90.0 Total current liabilities 1,186.2 1,788.9 274.8 (1,144.0 ) 2,105.9 Long-term debt, net, excluding current portion 5,853.9 315.8 — — 6,169.7 Unfavorable lease rights, net — 124.0 — — 124.0 Deferred tax liabilities, net 2.0 1,456.9 — — 1,458.9 Income taxes payable, long-term — 71.2 — — 71.2 Due to intercompany, net — 1,243.8 — (1,243.8 ) — Intercompany note payable — 2,115.2 — (2,115.2 ) — Other liabilities — 377.5 8.1 (3.2 ) 382.4 Total liabilities 7,042.1 7,493.3 282.9 (4,506.2 ) 10,312.1 Shareholders' equity 5,389.8 8,512.1 234.5 (8,746.9 ) 5,389.5 Total liabilities and equity $ 12,431.9 $ 16,005.4 $ 517.4 $ (13,253.1 ) $ 15,701.6 Condensed Consolidating Balance Sheets (Continued) April 30, 2016 Guarantor Non-Guarantor Consolidating Consolidated (in millions) Parent Subsidiaries Subsidiaries Adjustments Company ASSETS Current assets: Cash and cash equivalents $ — $ 783.6 $ 151.0 $ (4.9 ) $ 929.7 Short-term investments — — 4.0 — 4.0 Merchandise inventories, net — 2,872.0 49.9 7.6 2,929.5 Current deferred tax assets, net — — 8.1 (8.1 ) — Due from intercompany, net 38.8 505.3 102.8 (646.9 ) — Other current assets 0.4 313.2 — (4.7 ) 308.9 Total current assets 39.2 4,474.1 315.8 (657.0 ) 4,172.1 Property, plant and equipment, net — 3,114.9 38.3 — 3,153.2 Assets available for sale — 11.7 — — 11.7 Goodwill — 4,993.1 31.8 — 5,024.9 Deferred tax assets, net 0.6 — — (0.6 ) — Favorable lease rights, net — 543.9 — — 543.9 Tradename intangible asset — 3,100.0 — — 3,100.0 Other intangible assets, net — 5.4 0.2 — 5.6 Investment in subsidiaries 8,667.9 104.0 — (8,771.9 ) — Intercompany note receivable 1,526.4 — 188.8 (1,715.2 ) — Due from intercompany, net 1,923.4 — — (1,923.4 ) — Other assets — 49.3 4.5 (4.3 ) 49.5 Total assets $ 12,157.5 $ 16,396.4 $ 579.4 $ (13,072.4 ) $ 16,060.9 LIABILITIES AND EQUITY Current liabilities: Current portion of long-term debt $ 120.5 $ — $ — $ — $ 120.5 Accounts payable 4.8 1,180.4 72.2 2.9 1,260.3 Due to intercompany, net 402.7 207.7 36.5 (646.9 ) — Other current liabilities 34.6 387.9 204.7 (5.1 ) 622.1 Income taxes payable 32.7 4.4 9.1 — 46.2 Total current liabilities 595.3 1,780.4 322.5 (649.1 ) 2,049.1 Long-term debt, net, excluding current portion 6,892.6 317.2 — — 7,209.8 Unfavorable lease rights, net — 142.9 — — 142.9 Deferred tax liabilities, net — 1,574.8 — (8.6 ) 1,566.2 Income taxes payable, long-term — 71.1 — — 71.1 Due to intercompany, net — 1,923.4 — (1,923.4 ) — Intercompany note payable — 1,715.2 — (1,715.2 ) — Other liabilities — 347.5 8.9 (4.2 ) 352.2 Total liabilities 7,487.9 7,872.5 331.4 (4,300.5 ) 11,391.3 Shareholders' equity 4,669.6 8,523.9 248.0 (8,771.9 ) 4,669.6 Total liabilities and equity $ 12,157.5 $ 16,396.4 $ 579.4 $ (13,072.4 ) $ 16,060.9 Condensed Consolidating Statements of Cash Flows 13 Weeks Ended April 29, 2017 Guarantor Non-Guarantor Consolidating Consolidated (in millions) Parent Subsidiaries Subsidiaries Adjustments Company Net cash provided by (used in) operating activities $ (60.4 ) $ 515.5 $ 3.4 $ (27.8 ) $ 430.7 Cash flows from investing activities: Capital expenditures — (110.0 ) (0.3 ) — (110.3 ) Other — 2.2 — — 2.2 Net cash used in investing activities — (107.8 ) (0.3 ) — (108.1 ) Cash flows from financing activities: Principal payments for long-term debt (27.8 ) — — — (27.8 ) Dividends paid — (27.8 ) — 27.8 — Proceeds from stock issued pursuant to stock-based compensation plans 11.8 — — — 11.8 Cash paid for taxes on exercises/vesting of stock-based compensation (17.6 ) — — — (17.6 ) Net cash provided by (used in) financing activities (33.6 ) (27.8 ) — 27.8 (33.6 ) Effect of exchange rate changes on cash and cash equivalents — — (0.5 ) (0.5 ) Net (decrease) increase in cash and cash equivalents (94.0 ) 379.9 2.6 — 288.5 Cash and cash equivalents at beginning of period 562.4 139.2 164.8 — 866.4 Cash and cash equivalents at end of period $ 468.4 $ 519.1 $ 167.4 $ — $ 1,154.9 Condensed Consolidating Statements of Cash Flows (continued) 13 Weeks Ended April 30, 2016 Guarantor Non-Guarantor Consolidating Consolidated (in millions) Parent Subsidiaries Subsidiaries Adjustments Company Net cash provided by operating activities $ 24.8 $ 238.9 $ 34.9 $ 12.4 $ 311.0 Cash flows from investing activities: Capital expenditures — (175.3 ) (0.6 ) — (175.9 ) Purchase of restricted investments — (36.1 ) — — (36.1 ) Proceeds from sale of restricted investments — 118.1 — — 118.1 Other — 1.1 — — 1.1 Net cash used in investing activities — (92.2 ) (0.6 ) — (92.8 ) Cash flows from financing activities: Principal payments for long-term debt (20.8 ) — — — (20.8 ) Other (4.0 ) — — — (4.0 ) Net cash used in financing activities (24.8 ) — — — (24.8 ) Effect of exchange rate changes on cash and cash equivalents — — 0.2 — 0.2 Net increase in cash and cash equivalents — 146.7 34.5 12.4 193.6 Cash and cash equivalents at beginning of period — 636.9 116.5 (17.3 ) 736.1 Cash and cash equivalents at end of period $ — $ 783.6 $ 151.0 $ (4.9 ) $ 929.7 |