10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 2, 2014

Commission file number 1-11609

TOYS “R” US, INC.

(Exact name of registrant as specified in its charter)

_________________________________________________________________ 

Delaware	22-3260693
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)
One Geoffrey Way Wayne, New Jersey	07470
(Address of principal executive offices)	(Zip code)

(973) 617-3500

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ¨    No  ¨

(Note: As a voluntary filer not subject to the filing requirements of Section 13(a) or 15(d) of the Exchange Act, the registrant has filed all reports pursuant to Section 13(a) or 15(d) of the Exchange Act during the preceding 12 months as if the registrant were subject to such filing requirements.)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes  ¨    No  x

As of September 3, 2014, there were 49,093,117 outstanding shares of common stock of Toys “R” Us, Inc., none of which were publicly traded.

TOYS “R” US, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	PAGE
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets	1
Condensed Consolidated Statements of Operations	2
Condensed Consolidated Statements of Comprehensive Loss	3
Condensed Consolidated Statements of Cash Flows	4
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity	5
Notes to the Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
Item 4. Controls and Procedures	35
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	36
Item 1A. Risk Factors	36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3. Defaults Upon Senior Securities	36
Item 4. Mine Safety Disclosures	36
Item 5. Other Information	36
Item 6. Exhibits	37
SIGNATURE	38
INDEX TO EXHIBITS	39

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TOYS “R” US, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)	August 2, 2014			February 1, 2014			August 3, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	353		$	644		$	464
Accounts and other receivables	245			249			341
Merchandise inventories	2,344			2,171			2,353
Current deferred tax assets	22			31			102
Prepaid expenses and other current assets	164			125			163
Total current assets	3,128			3,220			3,423
Property and equipment, net	3,514			3,638			3,740
Goodwill	64			64			443
Deferred tax assets	153			152			233
Restricted cash	55			53			44
Other assets	416			422			430
Total Assets	$	7,330		$	7,549		$	8,313
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current Liabilities:
Accounts payable	$	1,228		$	1,488		$	1,235
Accrued expenses and other current liabilities	903			920			811
Income taxes payable	24			19			29
Current portion of long-term debt	165			89			149
Total current liabilities	2,320			2,516			2,224
Long-term debt	5,247			4,918			5,133
Deferred tax liabilities	88			96			123
Deferred rent liabilities	359			362			356
Other non-current liabilities	229			235			226
Temporary equity	83			78			72
Total stockholders’ (deficit) equity	(996		)	(656		)	179
Total Liabilities, Temporary Equity and Stockholders’ (Deficit) Equity	$	7,330		$	7,549		$	8,313

See Notes to the Condensed Consolidated Financial Statements.

1

TOYS “R” US, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Net sales	$	2,440		$	2,377		$	4,919		$	4,785
Cost of sales	1,524			1,457			3,085			2,965
Gross margin	916			920			1,834			1,820
Selling, general and administrative expenses	878			890			1,795			1,776
Depreciation and amortization	95			95			199			195
Other income, net	(15		)	(19		)	(27		)	(32		)
Total operating expenses	958			966			1,967			1,939
Operating loss	(42		)	(46		)	(133		)	(119		)
Interest expense	(102		)	(116		)	(210		)	(230		)
Interest income	1			1			2			4
Loss before income taxes	(143		)	(161		)	(341		)	(345		)
Income tax expense (benefit)	4			(48		)	2			(121		)
Net loss	(147		)	(113		)	(343		)	(224		)
Less: Net earnings attributable to noncontrolling interest	1			—			1			—
Net loss attributable to Toys “R” Us, Inc.	$	(148	)	$	(113	)	$	(344	)	$	(224	)

See Notes to the Condensed Consolidated Financial Statements.

2

TOYS “R” US, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Net loss	$	(147	)	$	(113	)	$	(343	)	$	(224	)
Other comprehensive loss, net of tax
Foreign currency translation adjustments	(21		)	(10		)	1			(56		)
Total other comprehensive loss, net of tax	(21		)	(10		)	1			(56		)
Comprehensive loss, net of tax	(168		)	(123		)	(342		)	(280		)
Less: Comprehensive income attributable to noncontrolling interest	1			—			1			—
Comprehensive loss attributable to Toys "R" Us, Inc.	$	(169	)	$	(123	)	$	(343	)	$	(280	)

See Notes to the Condensed Consolidated Financial Statements.

3

TOYS “R” US, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013
Cash Flows from Operating Activities:
Net loss	$	(343	)	$	(224	)
Adjustments to reconcile Net loss to Net cash used in operating activities:
Depreciation and amortization	199			195
Amortization and write-off of debt issuance costs and debt discount	23			24
Deferred income taxes	4			(11		)
Other	10			1
Changes in operating assets and liabilities:
Accounts and other receivables	27			41
Merchandise inventories	(166		)	(163		)
Prepaid expenses and other operating assets	(22		)	(20		)
Accounts payable, Accrued expenses and other liabilities	(304		)	(199		)
Income taxes payable and receivable	(25		)	(157		)
Net cash used in operating activities	(597		)	(513		)
Cash Flows from Investing Activities:
Capital expenditures	(86		)	(110		)
Proceeds from sales of fixed assets	9			23
Increase in restricted cash	(1		)	(28		)
Proceeds from redemption of debt securities	—			52
Purchases of debt securities	—			(20		)
Net cash used in investing activities	(78		)	(83		)
Cash Flows from Financing Activities:
Long-term debt borrowings	735			1,237
Long-term debt repayments	(341		)	(1,252		)
Capitalized debt issuance costs	(13		)	(26		)
Short-term debt borrowings, net	—			3
Repurchase of common stock	—			(7		)
Net cash provided by (used in) financing activities	381			(45		)
Effect of exchange rate changes on Cash and cash equivalents	3			(13		)
Cash and cash equivalents:
Net decrease during period	(291		)	(654		)
Cash and cash equivalents at beginning of period	644			1,118
Cash and cash equivalents at end of period	$	353		$	464

See Notes to the Condensed Consolidated Financial Statements.

4

TOYS “R” US, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(Unaudited)

	Toys “R” Us, Inc. Stockholders
	Common Stock (1)				Additional Paid-in Capital			Total (Accumulated Deficit) Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders’ (Deficit) Equity
(In millions)	Issued Shares	Treasury Amount
Balance, February 2, 2013	49	$	(4	)	$	47		$	445		$	(3	)	$	485
Net loss attributable to Toys "R" Us, Inc.	—	—			—			(224		)	—			(224		)
Total other comprehensive loss, net of tax	—	—			—			—			(56		)	(56		)
Restricted stock forfeitures	—	(1		)	1			—			—			—
Repurchase of common stock	—	(36		)	—			—			—			(36		)
Issuance of common stock	—	34			(7		)	—			—			27
Stock compensation expense	—	—			6			—			—			6
Redemption value of redeemable shares to temporary equity	—	—			(12		)	—			—			(12		)
Adjustment of noncontrolling interest to redemption value	—	—			—			(11		)	—			(11		)
Balance, August 3, 2013	49	$	(7	)	$	35		$	210		$	(59	)	$	179
Balance, February 1, 2014	49	$	(9	)	$	49		$	(612	)	$	(84	)	$	(656	)
Net loss attributable to Toys "R" Us, Inc.	—	—			—			(344		)	—			(344		)
Total other comprehensive income, net of tax	—	—			—			—			1			1
Issuance of restricted stock	—	2			(2		)	—			—			—
Stock compensation expense	—	—			8			—			—			8
Adjustment of redeemable shares to redemption value	—	—			5			—			—			5
Adjustment of noncontrolling interest to redemption value	—	—			—			(10		)	—			(10		)
Balance, August 2, 2014	49	$	(7	)	$	60		$	(966	)	$	(83	)	$	(996	)

(1) For all periods presented, the par value amount of Common Stock issued is less than $1 million. The number of Common Stock shares in treasury is also less than 1 million.

See Notes to the Condensed Consolidated Financial Statements.

5

TOYS “R” US, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of presentation

As used herein, the “Company,” “we,” “us,” or “our” means Toys “R” Us, Inc., and its consolidated subsidiaries, except as expressly indicated or unless the context otherwise requires. The Condensed Consolidated Balance Sheets as of August 2, 2014, February 1, 2014 and August 3, 2013, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Loss for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013 and the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the twenty-six weeks ended August 2, 2014 and August 3, 2013, have been prepared by us in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting, and in accordance with the requirements of this Quarterly Report on Form 10-Q. Our interim Condensed Consolidated Financial Statements are unaudited and are subject to year-end adjustments. In the opinion of management, the financial statements include all known adjustments (which consist primarily of normal, recurring accruals, estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations for the thirteen and twenty-six weeks then ended. The Condensed Consolidated Balance Sheet at February 1, 2014, presented herein, has been derived from our audited balance sheet included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014, but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included within our Annual Report on Form 10-K for the fiscal year ended February 1, 2014. The results of operations for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013 are not necessarily indicative of operating results for the full year.

6

2. Short-term borrowings and long-term debt

A summary of the Company’s consolidated Short-term borrowings and Long-term debt as of August 2, 2014, February 1, 2014 and August 3, 2013 is outlined in the table below:

(In millions)	August 2, 2014		February 1, 2014		August 3, 2013
Short-term borrowings
Labuan uncommitted lines of credit	$	12	$	12	$	17
Long-term debt
Spanish real estate credit facility, due fiscal 2015	66		71		96
Toys-Japan unsecured credit lines, expire fiscals 2015-2016 (1)	111		5		120
European and Australian asset-based revolving credit facility, expires fiscal 2016	61		—		39
Secured term loan facility, due fiscal 2016 (2)	643		646		649
7.375% senior secured notes, due fiscal 2016 (2)	355		357		358
10.750% senior notes, due fiscal 2017 (3)	—		—		935
10.375% senior notes, due fiscal 2017 (4)	447		447		446
8.500% senior secured notes, due fiscal 2017 (5)	720		719		719
French real estate credit facility, due fiscal 2018	63		64		63
Incremental secured term loan facility, due fiscal 2018 (2)	371		372		374
Second incremental secured term loan facility, due fiscal 2018 (2)	209		210		210
7.375% senior notes, due fiscal 2018 (4)	403		403		403
Secured revolving credit facility, expires fiscal 2019 (2)(6)	250		—		128
Senior unsecured term loan facility, due fiscal 2019 (3)	969		973		—
UK real estate credit facility, due fiscal 2020	443		433		402
Toys-Japan 1.85%-2.85% loans, due fiscals 2014-2021	86		91		115
8.750% debentures, due fiscal 2021 (7)	22		22		22
Finance obligations associated with capital projects	175		174		175
Capital lease obligations	18		20		28
	5,412		5,007		5,282
Less current portion	165		89		149
Total Long-term debt (8)	$	5,247	$	4,918	$	5,133

(1) Toys “R” Us - Japan, Ltd. (“Toys-Japan”) currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit (“Tranche 1” due fiscal 2015 and “Tranche 2” due fiscal 2016). On July 15, 2014, Toys-Japan entered into an agreement to refinance Tranche 2 of its committed lines of credit.

(2) Represents obligations of Toys “R” Us-Delaware, Inc. (“Toys-Delaware”).

(3) Represents obligations of Toys “R” Us Property Company I, LLC and its subsidiaries (“TRU Propco I”).

(4) Represents obligations of Toys “R” Us, Inc. (the “Parent Company”).

(5) Represents obligations of Toys “R” Us Property Company II, LLC (“TRU Propco II”).

(6) On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its $1.85 billion secured revolving credit facility (“ABL Facility”) in order to extend the maturity date of the facility and amend certain other provisions.

(7) Represents obligations of the Parent Company and Toys-Delaware.

(8) We maintain derivative instruments on certain of our long-term debt, which impact our effective interest rates. Refer to Note 3 entitled “Derivative instruments and hedging activities” for further details.

Toys “R” Us, Inc. is a holding company and conducts its operations through its subsidiaries, certain of which have incurred their own indebtedness. Our credit facilities, loan agreements and indentures contain customary covenants, including, among other things, covenants that restrict our ability to:

• incur certain additional indebtedness;

7

• transfer money between the Parent Company and our various subsidiaries;

• pay dividends on, repurchase or make distributions with respect to our or our subsidiaries’ capital stock or make other restricted payments;

• issue stock of subsidiaries;

• make certain investments, loans or advances;

• transfer and sell certain assets;

• create or permit liens on assets;

• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

• enter into certain transactions with our affiliates; and

• amend certain documents.

The amount of total net assets that were subject to such restrictions was $638 million as of August 2, 2014. Our agreements also contain various and customary events of default with respect to the indebtedness, including, without limitation, the failure to pay interest or principal when the same is due under the agreements, cross default and cross acceleration provisions, the failure of representations and warranties contained in the agreements to be true and certain insolvency events. If an event of default occurs and is continuing, the principal amounts outstanding thereunder, together with all accrued and unpaid interest and other amounts owed thereunder, may be declared immediately due and payable by the lenders.

We are dependent on the borrowings provided by the lenders to support our working capital needs, capital expenditures and to service debt. As of August 2, 2014, we have funds available to finance our operations under our ABL Facility through March 2019, subject to an earlier springing maturity, our European and Australian asset-based revolving credit facility (“European ABL Facility”) through March 2016 and our Toys-Japan unsecured credit lines with a tranche maturing June 2015 and a tranche maturing June 2016. In addition, Toys (Labuan) Holding Limited (“Labuan”) and Toys-Japan have uncommitted lines of credit due on demand.

The total fair values of our Long-term debt, with carrying values of $5.4 billion, $5.0 billion and $5.3 billion at August 2, 2014, February 1, 2014 and August 3, 2013, respectively, were $5.1 billion, $4.6 billion and $5.4 billion, respectively. The fair values of our Long-term debt are estimated using the quoted market prices for the same or similar issues and other pertinent information available to management as of the end of the respective periods. A portion of these instruments are classified as Level 3, as these are not publicly traded and therefore we are unable to obtain quoted market prices. The fair value of these Level 3 debt instruments totaled $1.3 billion, $0.8 billion and $1.2 billion at August 2, 2014, February 1, 2014 and August 3, 2013, respectively.

Labuan uncommitted lines of credit, due on demand ($12 million at August 2, 2014)

Labuan has several uncommitted unsecured lines of credit with various financial institutions with total availability of HK$302 million ($39 million at August 2, 2014). As of August 2, 2014, we had $12 million of borrowings, which has been included in Accrued expenses and other current liabilities on our Condensed Consolidated Balance Sheet, and $3 million of bank guarantees issued under these facilities. The remaining availability under these facilities was $24 million. The average interest rate on the drawn borrowings was 2.39% and 2.27% at August 2, 2014 and August 3, 2013, respectively.

Toys-Japan unsecured credit lines, expire fiscals 2015-2016 ($111 million at August 2, 2014)

Toys-Japan currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit. Tranche 1 is available in amounts up to ¥13.0 billion ($127 million at August 2, 2014), expiring on June 30, 2015, and bears an interest rate of Tokyo Interbank Offered Rate (“TIBOR”) plus 0.80% per annum. At August 2, 2014, we had outstanding borrowings of $77 million under Tranche 1, with $50 million of remaining availability.

On July 15, 2014, Toys-Japan entered into an agreement with a syndicate of financial institutions to refinance Tranche 2. As a result, Tranche 2 is available in amounts up to ¥3.5 billion ($34 million at August 2, 2014), expiring on June 30, 2016, and bears an interest rate of TIBOR plus 0.80% per annum. We paid fees of $1 million to refinance Tranche 2, which are capitalized as deferred debt issuance costs and amortized over the term of the agreement. At August 2, 2014, we had outstanding borrowings of $34 million under Tranche 2, with no remaining availability.

These agreements contain covenants that require, among other things, Toys-Japan to maintain a certain level of net assets and profitability during the agreement terms, including provisions that require Toys-Japan to not incur two consecutive years of ordinary loss in accordance with accounting principles generally accepted in Japan, as defined in the credit agreement. The agreement also restricts Toys-Japan from paying dividends or making loans to affiliates without lender consent.

Additionally on July 15, 2014, Toys-Japan amended its uncommitted line of credit resulting in total availability of ¥1.5 billion ($15 million at August 2, 2014), which will renew August 1 of each year unless otherwise canceled. The uncommitted line of

8

credit bears an interest rate of TIBOR plus 0.50%. As of August 2, 2014, we had no outstanding borrowings under the uncommitted line of credit.

European ABL Facility, expires fiscal 2016 ($61 million at August 2, 2014)

The European ABL Facility, as amended, provides for a five-year £138 million ($232 million at August 2, 2014) asset-based senior secured revolving credit facility which will expire on March 8, 2016. At August 2, 2014, we had outstanding borrowings of $61 million, with $70 million of remaining availability under the European ABL Facility.

$1.85 billion ABL Facility, expires fiscal 2019 ($250 million at August 2, 2014)

On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its ABL Facility in order to extend the maturity date of the facility and amend certain other provisions. The ABL Facility as amended will continue to provide for $1.85 billion of revolving commitments, and permits Toys-Delaware to request an increase in commitments by up to $1.15 billion, subject to certain conditions, including obtaining new or increased commitments from new or existing lenders. The ABL Facility has a final maturity date of March 21, 2019, with a springing maturity date if the Toys-Delaware term loans due fiscal 2016 and fiscal 2018 and the Toys-Delaware secured notes due fiscal 2016 are not repaid 30 days prior to maturity. The ABL Facility as amended bears a tiered floating interest rate of London Interbank Offered Rate (“LIBOR”) plus a margin of between 1.50% and 1.75% depending on usage (or, at the election of the borrower, a tiered floating interest rate based on the agent’s prime rate plus a margin of between 0.50% and 0.75% depending on usage). A commitment fee is payable on the undrawn portion of the ABL Facility in an amount equal to 0.25% per annum of the average daily balance of unused commitments during each calendar quarter. In connection with the amended and restated credit agreement, we incurred transaction fees of $31 million, which are capitalized as deferred debt issuance costs, amortized over the term of the agreement and included in Other assets on our Condensed Consolidated Balance Sheet. Prior to the amended ABL Facility, unamortized debt issuance costs were $17 million, of which $1 million has been expensed, and the remaining $16 million amortized over the term of the amended and restated credit agreement.

The ABL facility will continue to be available for general corporate purposes and the issuance of letters of credit. Borrowings under this credit facility are secured by tangible and intangible assets of Toys-Delaware and certain of its subsidiaries, subject to specific exclusions stated in the credit agreement. The credit agreement contains covenants that, among other things, restrict Toys-Delaware’s ability to incur certain additional indebtedness, create or permit liens on assets, engage in mergers or consolidations, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, repurchase capital stock or make other restricted payments, repay or prepay certain debt, engage in transactions with affiliates, amend material documents and change fiscal year. The ABL Facility, as amended pursuant to the amended and restated credit agreement, requires Toys-Delaware to maintain excess availability at all times of no less than $125 million and to sweep cash toward prepayment of the loans if excess availability falls below $150 million for any three days in a 30-day period (or if certain specified defaults are continuing or if excess availability falls below $130 million at any time). Availability is determined pursuant to a borrowing base, consisting of specified percentages of eligible inventory and eligible credit card receivables and certain real estate less any applicable availability reserves.

At August 2, 2014, under our ABL Facility we had outstanding borrowings of $250 million, a total of $92 million of outstanding letters of credit and excess availability of $828 million. We are also subject to a minimum excess availability covenant, which was $125 million at August 2, 2014, with remaining availability of $703 million in excess of the covenant.

3. Derivative instruments and hedging activities

We are exposed to market risk from potential changes in interest rates and foreign currency exchange rates. We regularly evaluate our exposure and enter into derivative financial instruments to economically manage these risks. We record all derivatives as either assets or liabilities on the Condensed Consolidated Balance Sheets measured at estimated fair value and we do not offset assets and liabilities with the same counterparty. We recognize the changes in fair value as unrealized gains and losses. The recognition of these gains or losses depends on our intended use of the derivatives and the resulting designation. In certain defined conditions, we may designate a derivative as a hedge for a particular exposure.

Interest Rate Contracts

We and our subsidiaries have a variety of fixed and variable rate debt instruments and are exposed to market risks resulting from interest rate fluctuations. We enter into interest rate swaps and/or caps to reduce our exposure to variability in expected future cash outflows and changes in the fair value of certain Long-term debt, attributable to the changes in LIBOR, Euro Interbank Offered Rate and TIBOR. Some of our interest rate contracts contain credit-risk related contingent features and are subject to master netting arrangements. As of August 2, 2014, our interest rate contracts have various maturity dates through February 2018. A portion of our interest rate swaps and caps as of August 2, 2014 are designated as cash flow hedges in accordance with Accounting Standards Codification Topic 815, “Derivatives and Hedging.”

9

The hedge accounting for a designated cash flow hedge requires that the effective portion be recorded to Accumulated other comprehensive loss; the ineffective portion of a cash flow hedge is recorded to Interest expense. We evaluate the effectiveness of our cash flow hedging relationships on an ongoing basis. For our derivatives that are designated as cash flow hedges, no material ineffectiveness was recorded for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively. Reclassifications from Accumulated other comprehensive loss to Interest expense primarily relate to realized Interest expense on interest rate swaps and caps and the amortization of gains recorded on de-designated caps. We expect to reclassify a net loss of $2 million over the next 12 months to Interest expense from Accumulated other comprehensive loss.

The hedge accounting for a designated fair value hedge requires that the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk be recognized in Interest expense. We evaluate the effectiveness of our fair value hedging relationship on an ongoing basis and recalculate the change in the fair value of the derivative and the underlying hedged item separately. As of August 2, 2014, the derivative we designated as a fair value hedge failed to meet the effectiveness assessment thresholds required to qualify for hedge accounting. However, we continue to hold the derivative as it provides an economic hedge of our fixed rate debt. Accordingly, changes in the fair value of the derivative continue to be recorded in Interest expense. However, in conjunction with the dedesignation of the fair value hedge, commencing in the second quarter of fiscal 2014, we no longer adjust the hedged debt for changes in fair value attributable to changes in the benchmark interest rate. We recorded the residual basis adjustment to the hedged debt from the application of hedge accounting to Interest expense for the thirteen weeks ended August 2, 2014, and will continue to amortize the residual adjustment to maturity. We recorded a $2 million and $1 million net loss in earnings related to ineffectiveness for the thirteen and twenty-six weeks ended August 3, 2013.

Certain of our agreements with credit-risk related contingent features contain cross-default provisions which provide that we could be declared in default on our derivative obligations if we default on certain specified indebtedness. At August 2, 2014, February 1, 2014 and August 3, 2013, there were no derivative liabilities related to agreements that contain credit-risk related contingent features. As of August 2, 2014, February 1, 2014 and August 3, 2013, we were not required to post collateral for any of these derivatives.

Foreign Exchange Contracts

We enter into foreign currency forward contracts to economically hedge the USD merchandise purchases of our foreign subsidiaries and our short-term, cross-currency intercompany loans with and between our foreign subsidiaries. We enter into these contracts in order to reduce our exposure to the variability in expected cash outflows attributable to changes in foreign currency rates. These derivative contracts are not designated as hedges and are recorded on our Condensed Consolidated Balance Sheets at fair value with a gain or loss recorded on the Condensed Consolidated Statements of Operations in Interest expense.

Our foreign exchange contracts typically mature within 12 months. Some of these contracts contain credit-risk related contingent features and are subject to master netting arrangements. Some of these agreements contain provisions which provide that we could be declared in default on our derivative obligations if we default on certain specified indebtedness. At August 2, 2014, February 1, 2014 and August 3, 2013, derivative liabilities related to agreements that contain credit-risk related contingent features had a fair value of $1 million, less than $1 million and $1 million, respectively. As of August 2, 2014, February 1, 2014 and August 3, 2013, we were not required to post collateral for any of these derivatives.

The following table sets forth the net impact of the effective portion of derivatives designated as cash flow hedges on Accumulated other comprehensive loss on our Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the twenty-six weeks ended August 2, 2014 and August 3, 2013:

	26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013
Derivatives designated as cash flow hedges:
Beginning balance	$	(1	)	$	(2	)
Change in fair value recognized in Accumulated other comprehensive loss - Interest Rate Contracts (1)	—			—
Ending balance	$	(1	)	$	(2	)

(1) Reclassifications from Accumulated other comprehensive loss to Interest expense were nominal for the twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively.

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The following table sets forth the impact of derivatives on Interest expense on our Condensed Consolidated Statements of Operations for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Derivatives not designated for hedge accounting:
(Loss) gain on the change in fair value - Intercompany Loan Foreign Exchange Contracts (1)	$	(8	)	$	13		$	(15	)	$	5
Loss on the change in fair value - Interest Rate Contract	(1		)	—			(1		)	—
Gain (loss) on the change in fair value - Merchandise Purchases Program Foreign Exchange Contracts	1			3			(1		)	5
	(8		)	16			(17		)	10
Derivatives designated as cash flow hedges:
Amortization of hedged caps	(1		)	(1		)	(1		)	(1		)
	(1		)	(1		)	(1		)	(1		)
Derivative designated as a fair value hedge:
Loss on the change in fair value - Interest Rate Contract	—			(5		)	(2		)	(4		)
Gain recognized in Interest expense on hedged item	—			3			2			3
	—			(2		)	—			(1		)
Total Interest expense	$	(9	)	$	13		$	(18	)	$	8

(1) Gains and losses related to our short-term intercompany loan foreign exchange contracts are recorded in Interest expense, in addition to the corresponding foreign exchange gains and losses related to our short-term, cross-currency intercompany loans.

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The following table contains the notional amounts and related fair values of our derivatives included within our Condensed Consolidated Balance Sheets as of August 2, 2014, February 1, 2014 and August 3, 2013:

	August 2, 2014					February 1, 2014					August 3, 2013
(In millions)	Notional Amount		Fair Value Assets/ (Liabilities)			Notional Amount		Fair Value Assets/ (Liabilities)			Notional Amount		Fair Value Assets/ (Liabilities)
Interest Rate Contracts designated as cash flow hedges:
Prepaid expenses and other current assets (1)	$	700	$	—		$	—	$	—		$	—	$	—
Other assets	129		—			835		—			859		1
Other non-current liabilities	64		(1		)	65		(1		)	83		(1		)
Interest Rate Contract designated as a fair value hedge:
Other assets	—		—			350		13			350		14
Interest Rate Contracts not designated for hedge accounting:
Prepaid expenses and other current assets (1)	1,611		—			—		—			—		—
Other assets	350		9			1,611		—			1,611		—
Foreign Currency Contracts not designated for hedge accounting:
Prepaid expenses and other current assets	261		3			26		—			285		3
Accrued expenses and other current liabilities	$	78	$	(1	)	$	78	$	—		$	143	$	(1	)
Total derivative contracts outstanding:
Prepaid expenses and other current assets	$	2,572	$	3		$	26	$	—		$	285	$	3
Other assets	479		9			2,796		13			2,820		15
Total derivative assets (2)	$	3,051	$	12		$	2,822	$	13		$	3,105	$	18
Accrued expenses and other current liabilities	$	78	$	(1	)	$	78	$	—		$	143	$	(1	)
Other non-current liabilities	64		(1		)	65		(1		)	83		(1		)
Total derivative liabilities (2)	$	142	$	(2	)	$	143	$	(1	)	$	226	$	(2	)

(1) Amount as of August 2, 2014 includes reclassification of contracts scheduled to mature within the next 12 months, which were previously included within Other assets as of February 1, 2014 and August 3, 2013.

(2) Refer to Note 4 entitled “Fair value measurements” for the fair value of our derivative instruments classified within the fair value hierarchy.

Offsetting of Derivatives

We present our derivatives at gross fair values in the Condensed Consolidated Balance Sheets. However, some of our interest rate and foreign exchange contracts are subject to master netting arrangements which allow net settlements under certain conditions. As of August 2, 2014, February 1, 2014 and August 3, 2013, the aggregate gross fair value of derivative liabilities which could be net settled against our derivative assets were nominal, respectively, and the aggregate gross fair value of derivative assets which could be net settled against our derivative liabilities were nominal, respectively. As of August 2, 2014, February 1, 2014 and August 3, 2013, none of the master netting arrangements involved collateral.

4. Fair value measurements

To determine the fair value of our assets and liabilities, we utilize the established fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Derivative Financial Instruments

Currently, we use derivative financial arrangements to manage a variety of risk exposures, including interest rate risk associated with our Long-term debt and foreign currency risk relating to cross-currency intercompany lending and merchandise purchases.

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The valuation of our foreign currency contracts is determined using market-based foreign exchange rates, which are classified as Level 2 inputs.

The valuation of our interest rate contracts is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates and implied volatilities. We evaluate the inputs used to value our derivatives at the end of each reporting period.

For our interest rate contracts, we primarily use Level 2 inputs mentioned above to arrive at fair value. Additionally, for interest rate contracts we also incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements taking into account the impact of any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. We measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The portfolio-level adjustments are then allocated each period to the individual assets or liabilities within the portfolio.

The credit valuation adjustments are calculated by determining the total expected exposure of the derivatives (which incorporates both the current and potential future exposure) and then applying each counterparty’s credit spread to the applicable exposure. The total expected exposure of a derivative is derived using market-observable inputs, such as yield curves and volatilities. The inputs utilized for our own credit spread are based on implied spreads from our debt, which are considered unobservable inputs. These credit valuation adjustments fall within Level 3 of the fair value hierarchy and include estimates of current credit spreads to evaluate the likelihood of default. For counterparties with publicly available credit information, the credit spreads over LIBOR used in the calculations represent implied credit default swap spreads obtained from a third party credit data provider. Generally, significant increases (decreases) in our own credit spread in isolation would result in significantly lower (higher) fair value measurement for these derivatives. Based on the mixed input valuation, we classify these derivatives based on the lowest level in the fair value hierarchy that is significant to the overall fair value of the instrument.

Any transfer into or out of a level of the fair value hierarchy is recognized based on the value of the instruments at the end of the reporting period.

Cash Equivalents

Cash equivalents include highly liquid investments with an original maturity of three months or less at acquisition. Due to the nature and short-term maturity of these investments, their carrying amount approximates fair value. Therefore, we have determined that our cash equivalents in their entirety are classified as Level 1 within the fair value hierarchy.

The table below presents our assets and liabilities measured at fair value on a recurring basis as of August 2, 2014, February 1, 2014 and August 3, 2013, aggregated by level in the fair value hierarchy within which those measurements fall.

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at August 2, 2014
Assets
Cash equivalents	$	111	$	—	$	—	$	111
Derivative financial instruments:
Interest rate contracts	—		9		—		9
Foreign exchange contracts	—		3		—		3
Total assets	$	111	$	12	$	—	$	123
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		1		—		1
Total liabilities	$	—	$	2	$	—	$	2

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(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at February 1, 2014
Assets
Cash equivalents	$	164	$	—	$	—	$	164
Derivative financial instruments:
Interest rate contracts	—		13		—		13
Foreign exchange contracts	—		—		—		—
Total assets	$	164	$	13	$	—	$	177
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		—		—		—
Total liabilities	$	—	$	1	$	—	$	1

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at August 3, 2013
Assets
Cash equivalents	$	178	$	—	$	—	$	178
Derivative financial instruments:
Interest rate contracts	—		15		—		15
Foreign exchange contracts	—		3		—		3
Total assets	$	178	$	18	$	—	$	196
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		1		—		1
Total liabilities	$	—	$	2	$	—	$	2

For the twenty-six weeks ended August 2, 2014 and August 3, 2013, we had no derivative financial instruments within Level 3 of the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain of our assets and liabilities are measured at fair value on a nonrecurring basis. We evaluate the carrying value of all long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The fair value measurements related to long-lived assets held and used classified as Level 3 were determined using a discounted cash flow valuation method. For those assets classified as Level 2 a relative, market-based approach based on offers was utilized. For the twenty-six weeks ended August 2, 2014 and August 3, 2013, we had no impairments to long-lived assets held for sale.

There have been no changes in valuation technique or related inputs for long-lived assets for the twenty-six weeks ended August 2, 2014 and August 3, 2013.

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The table below presents our long-lived assets evaluated for impairment measured at fair value on a nonrecurring basis for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, aggregated by level in the fair value hierarchy within which those measurements fall. Because these assets are not measured at fair value on a recurring basis, certain carrying amounts and fair value measurements presented in the table may reflect values at earlier measurement dates and may no longer represent their fair values at August 2, 2014 and August 3, 2013. As of August 2, 2014 and August 3, 2013, we did not have any long-lived assets classified as Level 1 within the fair value hierarchy.

(In millions)	Carrying Value Prior to Impairment		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Losses
Long-lived assets held and used	$	4	$	—	$	1	$	3
Balance, May 3, 2014	4		—		1		3
Long-lived assets held and used	8		4		—		4
Balance, August 2, 2014	$	12	$	4	$	1	$	7

(In millions)	Carrying Value Prior to Impairment		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Losses
Long-lived assets held and used	$	9	$	6	$	1	$	2
Balance, May 4, 2013	9		6		1		2
Long-lived assets held and used	5		4		—		1
Balance, August 3, 2013	$	14	$	10	$	1	$	3

5. Income taxes

The following table summarizes our income tax expense (benefit) and effective tax rates for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
($ In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Loss before income taxes	$	(143	)	$	(161	)	$	(341	)	$	(345	)
Income tax expense (benefit)	4			(48		)	2			(121		)
Effective tax rate	(2.8		)%	29.8		%	(0.6		)%	35.1		%

The effective tax rates for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013 were based on our forecasted annualized effective tax rates, adjusted for discrete items that occurred within the periods presented. Our forecasted annualized effective tax rate is (0.5)% for the twenty-six weeks ended August 2, 2014 compared to 37.1% for the same period last year. The difference between our forecasted annualized effective tax rates is primarily due to our not being able to take a benefit for current year losses in the US and certain foreign jurisdictions, as the Company concluded in the third quarter of fiscal 2013 that it is more likely than not that a benefit for losses in these jurisdictions will not be realized in the foreseeable future.

There were no significant discrete items that impacted our effective tax rate for the thirteen weeks ended August 2, 2014. For the thirteen weeks ended August 3, 2013, our effective tax rate was impacted by a tax expense of $5 millionrelated to adjustments to deferred taxes resulting from a change in statutory tax rate.

There were no significant discrete items that impacted our effective tax rate for the twenty-six weeks ended August 2, 2014. For the twenty-six weeks ended August 3, 2013, our effective tax rate was impacted by a tax expense of$5 million related to adjustments to deferred taxes resulting from a change in statutory tax rate and$1 millionrelated to state income taxes. This tax expense was partially offset by a tax benefit of$2 millionrelated to adjustments to taxes payable.

6. Segments

Our reportable segments are Toys “R” Us – Domestic (“Domestic”), which provides toy and baby product offerings in 49 states and Puerto Rico, and Toys “R” Us – International (“International”), which operates or licenses “R” Us branded retail stores in 35 foreign countries and jurisdictions with operated stores in Australia, Austria, Brunei, Canada, China, France, Germany, Hong Kong, Japan, Malaysia, Poland, Portugal, Singapore, Spain, Switzerland, Taiwan, Thailand and the United Kingdom.

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Domestic and International segments also include their respective Internet operations. Segment operating (loss) earnings excludes corporate related charges and income. All intercompany transactions between the segments have been eliminated. Income tax information by segment has not been included as taxes are calculated at a company-wide level and are not allocated to each segment. Revenues from external customers are derived primarily from merchandise sales and we do not generate material sales from any single customer.

The following tables show our percentage of Net sales by product category:

	13 Weeks Ended				26 Weeks Ended
Domestic:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	47.6	%	48.6	%	48.8	%	49.9	%
Core Toy	13.2	%	11.9	%	12.6	%	11.8	%
Entertainment	6.3	%	5.7	%	7.1	%	6.5	%
Learning	17.6	%	16.8	%	17.5	%	16.6	%
Seasonal	15.0	%	15.3	%	13.7	%	14.1	%
Other (1)	0.3	%	1.7	%	0.3	%	1.1	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of non-product related revenues.

	13 Weeks Ended				26 Weeks Ended
International:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	25.0	%	26.4	%	26.0	%	26.6	%
Core Toy	19.7	%	19.0	%	19.6	%	19.2	%
Entertainment	7.1	%	7.1	%	7.3	%	8.1	%
Learning	25.8	%	25.1	%	26.1	%	25.7	%
Seasonal	21.5	%	21.5	%	20.1	%	19.5	%
Other (1)	0.9	%	0.9	%	0.9	%	0.9	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of licensing fees from unaffiliated third parties and other non-product related revenues.

From time to time, we may make revisions to our prior period Net sales by product category to conform to the current period allocation. These revisions did not have a significant impact to our prior year disclosure.

A summary of financial results by reportable segment is as follows:

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Net sales
Domestic	$	1,460		$	1,450		$	2,999		$	2,930
International	980			927			1,920			1,855
Total Net sales	$	2,440		$	2,377		$	4,919		$	4,785
Operating earnings (loss)
Domestic	$	20		$	45		$	36		$	85
International	28			14			9			(14		)
Corporate and other	(90		)	(105		)	(178		)	(190		)
Operating loss	(42		)	(46		)	(133		)	(119		)
Interest expense	(102		)	(116		)	(210		)	(230		)
Interest income	1			1			2			4
Loss before income taxes	$	(143	)	$	(161	)	$	(341	)	$	(345	)

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(In millions)	August 2, 2014		February 1, 2014		August 3, 2013
Merchandise inventories
Domestic	$	1,442	$	1,375	$	1,459
International	902		796		894
Total Merchandise inventories	$	2,344	$	2,171	$	2,353

7. Litigation and legal proceedings

We are, and in the future may be, involved in various 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. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages, and until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these proceedings involve matters of which the outcomes are inherently difficult to predict. However, based upon our historical experience with similar matters, we do not expect that any such additional losses would be material to our consolidated financial position, results of operations or cash flows.

8. Related party transactions

We are owned by an investment group led by entities advised by or affiliated with Bain Capital Partners, LLC, Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “KKR”) and Vornado Realty Trust (“Vornado”) (collectively, the “Sponsors”). The Sponsors provide management and advisory services to us pursuant to an advisory agreement executed at the closing of the merger transaction effective as of July 21, 2005 and amended June 10, 2008 and February 1, 2009 (“Advisory Agreement”). The initial term of the Advisory Agreement is ten years. After ten years, it extends annually for one year unless we or the Sponsors provide notice of termination to the other. Prior to an amendment in August 2014, described below, the management and advisory fees paid to the Sponsors (the “Advisory Fees”) increased 5% per year during the ten-year term of the agreement with the exception of fiscal 2009. We recorded Advisory Fees of $6 million and $12 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively. We recorded Advisory Fees of $5 million and $11 million for the thirteen and twenty-six weeks ended August 3, 2013, respectively. During the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, we also paid the Sponsors fees of less than $1 million, respectively, for out-of-pocket expenses.

Additionally, the Advisory Agreement provides that affiliates of the Sponsors will be entitled to receive a fee equal to 1% of the aggregate transaction value in connection with certain financing, acquisition, disposition and change of control transactions (“Transaction Fees”). The Advisory Agreement includes customary exculpation and indemnification provisions in favor of the Sponsors and their affiliates. In the event that the Advisory Agreement is terminated by the Sponsors or us, the Sponsors will receive all unpaid Advisory Fees, all unpaid Transaction Fees and expenses due under the Advisory Agreement with respect to periods prior to the termination date plus the net present value of the Advisory Fees that would have been payable for the remainder of the applicable term of the Advisory Agreement.

In August 2014, the Advisory Agreement was amended in order to reduce the Advisory Fees to $17 million for fiscal year 2014 and each year thereafter.  If in the future we successfully complete an initial public offering (“IPO”), the Sponsors may elect to receive from the proceeds of such IPO, an amount equal to the aggregate difference between: (x) the Advisory Fees that we would have paid in fiscal year 2014 and each fiscal year thereafter had such amounts not been fixed and (y) the Advisory Fees that were actually paid by us for fiscal year 2014 and each fiscal year thereafter.

In connection with the amendment and restatement of the ABL Facility on March 21, 2014, we incurred Transaction Fees of $19 million pursuant to the terms of the Advisory Agreement, which are capitalized as deferred debt issuance costs, amortized over the term of the agreement and included in Other assets on our Condensed Consolidated Balance Sheet.

From time to time, we and our subsidiaries, as well as the Sponsors or their affiliates, may acquire debt or debt securities issued by us or our subsidiaries in open market transactions, tender offers, exchange offers, privately negotiated transactions or otherwise. During the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, investment funds or accounts advised by KKR held debt and debt securities issued by the Company and its subsidiaries.  The interest amounts paid on such debt and debt securities held by related parties was $2 million and $5 million during the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively.

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Additionally, under lease agreements with affiliates of Vornado, we paid an aggregate amount of $2 million and $4 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively, with respect to 0.7% of our operated stores, which include Toys “R” Us Express stores. Of the aggregate amount paid, less than $1 million and $1 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively, were allocable to joint-venture parties not otherwise affiliated with Vornado. For the thirteen and twenty-six weeks ended August 3, 2013, we or our affiliates paid an aggregate of $3 million and $5 million, respectively, with respect to 0.8% of our operated stores, which include Toys “R” Us Express stores. Of these amounts, less than $1 million and $1 million, respectively, were allocable to joint-venture parties not otherwise affiliated with Vornado.

Each of the Sponsors, either directly or through affiliates, has ownership interests in a broad range of companies (“Portfolio Companies”) with whom we may from time to time enter into commercial transactions in the ordinary course of business, primarily for the purchase of goods and services. We believe that none of our transactions or arrangements with Portfolio Companies are significant enough to be considered material to the Sponsors or to our business.

9. Dispositions

During the thirteen and twenty-six weeks ended August 2, 2014, we sold certain properties and assets for proceeds of $6 million and $9 million, respectively, resulting in net gains of $3 million, respectively, which are included in Other income, net.

10. Stock-based compensation

Award Exchange

Commencing in September 2014, certain employees were offered an opportunity to exchange certain of their outstanding stock options that were granted prior to fiscal 2014 (“Old Options”) under the Company’s Amended and Restated 2005 Management Equity Plan, as amended (the “Management Equity Plan”), or the Company’s 2010 Incentive Plan, as amended (the “2010 Incentive Plan”), for new stock options granted under the 2010 Incentive Plan (“New Options”) on a one-for-one basis. The New Options will have an exercise price equal to the most recent determination of fair market value of a share of the Company’s common stock at the time of the commencement of the exchange offer as determined by the Board of Directors of the Company and will vest as follows: (i) New Options granted in exchange for Old Options originally granted during the period commencing on January 1, 2005 and ending on December 31, 2012 will vest 50% on the award exchange date and 25% on each of the first and second anniversaries of the award exchange date and (ii) New Options granted in exchange for Old Options originally granted in 2013 will vest in equal annual installments over the subsequent four years from the anniversary of the award exchange date. Management is currently evaluating the impact of the award exchange and does not expect the exchange to have a material impact on our Condensed Consolidated Financial Statements.

Amendment to the 2010 Incentive Plan

Effective September 2014, we adopted Amendment No. 2 (“Amendment No. 2”) to the 2010 Incentive Plan. This amendment provides that no further awards would be granted under the Management Equity Plan and the number of shares of common stock of the Company available for issuance under the 2010 Incentive Plan was increased by the number of shares available for issuance under the Management Equity Plan as of July 17, 2014 and any shares that after July 17, 2014 would have otherwise been available for issuance thereunder. This amendment did not have an impact on our Condensed Consolidated Financial Statements.

Refer to Item 5 entitled “OTHER INFORMATION” for further details.

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11. Accumulated other comprehensive loss

Total other comprehensive loss is included in the Condensed Consolidated Statements of Comprehensive Loss and Condensed Consolidated Statements of Stockholders’ (Deficit) Equity. Accumulated other comprehensive loss is reflected in Total stockholders’ (deficit) equity on the Condensed Consolidated Balance Sheets, as follows:

(In millions)	Foreign currency translation adjustments, net of tax			Unrealized loss on hedged transactions, net of tax			Unrecognized actuarial losses, net of tax			Accumulated other comprehensive loss
Balance, February 2, 2013	$	8		$	(2	)	$	(9	)	$	(3	)
Current period change	(46		)	—			—			(46		)
Balance, May 4, 2013	(38		)	(2		)	(9		)	(49		)
Current period change	(10		)	—			—			(10		)
Balance, August 3, 2013	$	(48	)	$	(2	)	$	(9	)	$	(59	)
(In millions)	Foreign currency translation adjustments, net of tax			Unrealized loss on hedged transactions, net of tax			Unrecognized actuarial losses, net of tax			Accumulated other comprehensive loss
Balance, February 1, 2014	$	(74	)	$	(1	)	$	(9	)	$	(84	)
Current period change	22			—			—			22
Balance, May 3, 2014	$	(52	)	$	(1	)	$	(9	)	$	(62	)
Current period change	(21		)	—			—			(21		)
Balance, August 2, 2014	$	(73	)	$	(1	)	$	(9	)	$	(83	)

12. Recent accounting pronouncements

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management is currently assessing the impact the adoption of ASU 2014-15 will have on our Condensed Consolidated Financial Statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”).  ASU 2014-12 provides specific guidance on this Topic, requiring that performance targets that affect vesting and that could be achieved after the requisite service period be treated as a performance condition.  A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards.  This varies from the previous practice, as such provisions were also accounted for as non-vesting restrictions which affect the determination of grant-date fair value and required expense recognition over the requisite service period regardless of whether the performance condition is met.  The amendments in this ASU are effective for reporting periods beginning after December 15, 2015, with early adoption permitted.  An entity may apply the standards (1) prospectively to all share-based payment awards that are granted or modified on or after the effective date, or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter.  The adoption of ASU 2014-12 is not expected to have an impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either

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retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 will have on our Condensed Consolidated Financial Statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used herein, the “Company,” “we,” “us,” or “our” means Toys “R” Us, Inc. and its consolidated subsidiaries, except as expressly indicated or unless the context otherwise requires. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help facilitate an understanding of our historical results of operations during the periods presented and our financial condition. This MD&A should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended February 1, 2014 and the Condensed Consolidated Financial Statements and the accompanying notes thereto, and contains forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements” below.

Our Business

We generate sales, earnings and cash flows by retailing merchandise in our baby, core toy, entertainment, learning and seasonal product categories worldwide. Our reportable segments are Toys “R” Us – Domestic (“Domestic”), which provides toy and baby product offerings in 49 states and Puerto Rico, and Toys “R” Us – International (“International”), which operates or licenses stores in 35 foreign countries and jurisdictions. As of August 2, 2014, there were 1,591 operated and 196 licensed “R” Us branded retail stores worldwide. In addition, as of August 2, 2014, we operated 132 Toys “R” Us Express stores (“Express stores”), including 65 Express stores with a cumulative lease term of at least two years (“Permanent Express”). Domestic and International segments also include their respective Internet operations.

Financial Performance

As discussed in more detail in this MD&A, the following financial data represents an overview of our financial performance for the thirteen and twenty-six weeks ended August 2, 2014 compared to the thirteen and twenty-six weeks ended August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
($ In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Net sales	$	2,440		$	2,377		$	4,919		$	4,785
Gross margin	916			920			1,834			1,820
Gross margin as a percentage of Net sales	37.5		%	38.7		%	37.3		%	38.0		%
Selling, general and administrative expenses	$	878		$	890		$	1,795		$	1,776
Selling, general and administrative expenses as a percentage of Net sales	36.0		%	37.4		%	36.5		%	37.1		%
Net loss attributable to Toys “R” Us, Inc.	$	(148	)	$	(113	)	$	(344	)	$	(224	)
Non-GAAP Financial Measure:
Adjusted EBITDA (1)	$	81		$	74		$	102		$	115

(1) For an explanation of Adjusted EBITDA as a measure of the Company’s operating performance and a reconciliation to Net loss attributable to Toys “R” Us, Inc., see “Non-GAAP Financial Measure - Adjusted EBITDA” below.

Net sales increased by $63 million and $134 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively, compared to the same periods last year. Foreign currency translation increased Net sales by $7 million for the thirteen weeks ended August 2, 2014 and decreased Net sales by $12 million for the twenty-six weeks ended August 2, 2014. Excluding the impact of foreign currency translation, the increase in Net sales for both periods was primarily due to an increase in our Domestic and International comparable store net sales and an increase in net sales from new locations within our International segment.

Gross margin, as a percentage of Net sales for the thirteen and twenty-six weeks ended August 2, 2014decreased by 1.2 and 0.7 percentage points, respectively, compared to the same periods last year. The decrease for both periods was primarily caused by margin rate declines in our Domestic segment mainly as a result of a $19 million and $8 million net loss on previously identified clearance inventory written down in the fourth quarter of fiscal 2013 for the thirteen and twenty-six weeks ended August 2, 2014, respectively.

Selling, general and administrative expenses (“SG&A”) for the thirteen weeks ended August 2, 2014decreased by $12 million, compared to the same period last year. Foreign currency translation increased SG&A by $4 million for the thirteen weeks ended August 2, 2014. Excluding the impact of foreign currency translation, the decrease in SG&A was primarily due to a decrease in legal expenses and favorable current year settlements of insurance claims related to property losses. These decreases were partially offset by an increase in occupancy costs. SG&A for the twenty-six weeks ended August 2, 2014increased by $19 million, compared to the same period last year. Foreign currency translation decreased SG&A by $1 million

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for the twenty-six weeks ended August 2, 2014. Excluding the impact of foreign currency translation, the increase in SG&A was primarily due to increases in occupancy costs, professional fees and payroll expenses. These increases were partially offset by decreases in legal expenses and advertising expenses.

Net loss attributable to Toys “R” Us, Inc. for the thirteen weeks ended August 2, 2014 increased by $35 million compared to the same period last year. The increase for the period was primarily due to a net increase in Income tax, partially offset by decreases in Interest expense and SG&A. Net loss attributable to Toys “R” Us, Inc. for the twenty-six weeks ended August 2, 2014 increased by $120 million compared to the same period last year. The increase for the period was primarily due to a net increase in Income tax and an increase in SG&A, partially offset by a decrease in Interest expense.

Comparable Store Net Sales

In computing comparable store net sales, we include stores that have been open for at least 56 weeks (1 year and 4 weeks) from their “soft” opening date. A soft opening is typically two weeks prior to the grand opening. Permanent Express stores that have been open for at least 56 weeks from their “soft” opening date are also included in our comparable store net sales computation.

Comparable stores include the following:

• stores that have been remodeled (including conversions) while remaining open;

• stores that have been relocated and/or expanded to new buildings within the same trade area, in which the new store opens at about the same time as the old store closes;

• stores that have expanded within their current locations; and

• sales from our Internet businesses.

By measuring the year-over-year sales of merchandise in the stores that have been open for a full comparable 56 weeks or more and on-line, we can better gauge how the core store base and e-commerce businesses are performing since comparable store net sales excludes the impact of store openings and closings.

Various factors affect comparable store net sales, including the number of and timing of stores we open, close, convert, relocate or expand, the number of transactions, the average transaction amount, the general retail sales environment, current local and global economic conditions, consumer preferences and buying trends, changes in sales mix among distribution channels, our ability to efficiently source and distribute products, changes in our merchandise mix, competition, the timing of the release of new merchandise and our promotional events, the success of marketing programs and the cannibalization of existing store net sales by new stores. Among other things, weather conditions can affect comparable store net sales because inclement weather may discourage travel or require temporary store closures, thereby reducing customer traffic. These factors have caused our comparable store net sales to fluctuate significantly in the past on a monthly, quarterly and annual basis and, as a result, we expect that comparable store net sales will continue to fluctuate in the future.

The following table discloses the change in our comparable store net sales for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended					26 Weeks Ended
	August 2, 2014 vs. 2013		August 3, 2013 vs. 2012			August 2, 2014 vs. 2013		August 3, 2013 vs. 2012
Domestic	1.5	%	(4.1	)%	(1)	2.7	%	(6.2	)%	(1)
International	2.5	%	(3.8	)%		1.7	%	(4.8	)%

(1) Excludes the effect of an immaterial out of period adjustment. Previously reported comparable store net sales were (3.5)% and (6.0)% for the thirteen and twenty-six weeks ended August 3, 2013, respectively.

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Percentage of Net Sales by Product Category

	13 Weeks Ended				26 Weeks Ended
Domestic:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	47.6	%	48.6	%	48.8	%	49.9	%
Core Toy	13.2	%	11.9	%	12.6	%	11.8	%
Entertainment	6.3	%	5.7	%	7.1	%	6.5	%
Learning	17.6	%	16.8	%	17.5	%	16.6	%
Seasonal	15.0	%	15.3	%	13.7	%	14.1	%
Other (1)	0.3	%	1.7	%	0.3	%	1.1	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of non-product related revenues.

	13 Weeks Ended				26 Weeks Ended
International:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	25.0	%	26.4	%	26.0	%	26.6	%
Core Toy	19.7	%	19.0	%	19.6	%	19.2	%
Entertainment	7.1	%	7.1	%	7.3	%	8.1	%
Learning	25.8	%	25.1	%	26.1	%	25.7	%
Seasonal	21.5	%	21.5	%	20.1	%	19.5	%
Other (1)	0.9	%	0.9	%	0.9	%	0.9	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of licensing fees from unaffiliated third parties and other non-product related revenues.

From time to time, we may make revisions to our prior period Net sales by product category to conform to the current period allocation. These revisions did not have a significant impact to our prior year disclosure.

Store Count by Segment

	August 2, 2014	August 3, 2013	Change
Domestic (1)	878	878	—
International - Operated (2)	713	688	25
International - Licensed (3)	196	169	27
Total (4)	1,787	1,735	52

(1) Store count as of August 2, 2014 includes 302 Toys “R” Us (“TRU”) stores, 230 Babies “R” Us (“BRU”) stores, 214 side-by-side (“SBS”) stores, 59 Juvenile Expansions, 20 Babies “R” Us Express (“BRU Express”) stores and 53 Permanent Express stores. Store count as of August 3, 2013 included 310 TRU stores, 235 BRU stores, 211 SBS stores, 60 Juvenile Expansions, 20 BRU Express stores and 42 Permanent Express stores.

(2) Store count as of August 2, 2014 includes 475 TRU stores, 193 SBS stores, 18 BRU Express stores,15 BRU stores and 12 Permanent Express stores. Store count as of August 3, 2013 included 455 TRU stores, 177 SBS stores, 17 BRU Express stores, 14 BRU stores and 25 Permanent Express stores. The net increase in store count from prior year is predominantly due to 24 stores in China and Southeast Asia.

(3) The net increase in store count from prior year is predominantly due to 14 stores in South Africa and 4 stores in South Korea.

(4) There were 57 Domestic and 10 International Express stores open as of August 2, 2014 and 59 Domestic and 12 International Express stores open as of August 3, 2013. These stores were not included in our overall store count within our Domestic and International segments and are considered temporary as they have a cumulative lease term of less than two years.

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Net Loss Attributable to Toys “R” Us, Inc.

	13 Weeks Ended									26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			Change			August 2, 2014			August 3, 2013			Change
Toys “R” Us - Consolidated	$	(148	)	$	(113	)	$	(35	)	$	(344	)	$	(224	)	$	(120	)

Net loss attributable to Toys “R” Us, Inc.increased by $35 million to $148 million for the thirteen weeks ended August 2, 2014, compared to $113 million for the same period last year. The increase in Net loss attributable to Toys “R” Us, Inc. was primarily due to a net increase in Income tax of $52 million, partially offset by decreases in Interest expense of $14 million and SG&A of $12 million.

Net loss attributable to Toys “R” Us, Inc.increased by $120 million to $344 million for the twenty-six weeks ended August 2, 2014, compared to $224 million for the same period last year. The increase in Net loss attributable to Toys “R” Us, Inc. was primarily due to a net increase in Income tax of $123 million and an increase in SG&A of $19 million, partially offset by a decrease in Interest expense of $20 million.

Net Sales

	13 Weeks Ended
									Percentage of Net Sales
($ In millions)	August 2, 2014		August 3, 2013		$ Change		% Change		August 2, 2014		August 3, 2013
Domestic	$	1,460	$	1,450	$	10	0.7	%	59.8	%	61.0	%
International	980		927		53		5.7	%	40.2	%	39.0	%
Toys “R” Us - Consolidated	$	2,440	$	2,377	$	63	2.7	%	100.0	%	100.0	%

Net sales increased by $63 million or 2.7%, to $2,440 million for the thirteen weeks ended August 2, 2014, compared to $2,377 million for the same period last year. Net sales for the thirteen weeks ended August 2, 2014 included the impact of foreign currency translation, which increased Net sales by $7 million.

Excluding the impact of foreign currency translation, the increase in Net sales for the thirteen weeks ended August 2, 2014 was primarily due to an increase in our Domestic and International comparable store net sales. The increase in comparable store net sales was primarily driven by an increase in the number of transactions. Additionally contributing to the increase in Net sales was an increase in net sales from new locations within our International segment.

	26 Weeks Ended
									Percentage of Net Sales
($ In millions)	August 2, 2014		August 3, 2013		$ Change		% Change		August 2, 2014		August 3, 2013
Domestic	$	2,999	$	2,930	$	69	2.4	%	61.0	%	61.2	%
International	1,920		1,855		65		3.5	%	39.0	%	38.8	%
Toys “R” Us - Consolidated	$	4,919	$	4,785	$	134	2.8	%	100.0	%	100.0	%

Net sales increased by $134 million or 2.8%, to $4,919 million for the twenty-six weeks ended August 2, 2014, compared to $4,785 million for the same period last year. Net sales for the twenty-six weeks ended August 2, 2014 included the impact of foreign currency translation, which decreased Net sales by $12 million.

Excluding the impact of foreign currency translation, the increase in Net sales for the twenty-six weeks ended August 2, 2014 was primarily due to an increase in our Domestic and International comparable store net sales. The increase in comparable store net sales was primarily driven by an increase in the number of transactions. Additionally contributing to the increase in Net sales was an increase in net sales from new locations within our International segment.

Domestic

Net sales for the Domestic segment increased by $10 million or 0.7%, to $1,460 million for the thirteen weeks ended August 2, 2014, compared to $1,450 million for the same period last year. The increase in Net sales was primarily a result of an increase in comparable store net sales of 1.5%.

The increase in comparable store net sales resulted primarily from increases in our core toy, learning and entertainment categories. The increase in our core toy category was primarily due to increased sales of girls’ role play products and accessories. The increase in our learning category was primarily due to increased sales of construction toys. The increase in

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our entertainment category was primarily due to increased sales of video game systems. Partially offsetting these increases was a decrease in our baby product category primarily as a result of decreased sales of apparel.

Net sales for the Domestic segment increased by $69 million or 2.4%, to $2,999 million for the twenty-six weeks ended August 2, 2014, compared to $2,930 million for the same period last year. The increase in Net sales was primarily a result of an increase in comparable store net sales of 2.7%.

The increase in comparable store net sales resulted primarily from increases in our learning, core toy and entertainment categories. The increase in our learning category was primarily due to increased sales of construction toys. The increase in our core toy category was primarily due to increased sales of girls’ role play products and accessories. The increase in our entertainment category was primarily due to increased sales of interactive video game figurines and video game systems.

International

Net sales for the International segment increased by $53 million or 5.7%, to $980 million for the thirteen weeks ended August 2, 2014, compared to $927 million for the same period last year. Excluding a $7 million increase in Net sales due to foreign currency translation, International Net sales increased primarily as a result of an increase in net sales from new locations and an increase in comparable store net sales of 2.5%.

The increase in comparable store net sales resulted primarily from increases in our core toy, learning and seasonal categories. The increase in our core toy category was primarily due to increased sales of action figures. The increase in our learning category was primarily due to increased sales of construction toys. The increase in our seasonal category was primarily due to increased sales of outdoor products. Partially offsetting these increases was a decrease in our baby product category primarily as a result of decreased sales of consumables.

Net sales for the International segment increased by $65 million or 3.5%, to $1,920 million for the twenty-six weeks ended August 2, 2014, compared to $1,855 million for the same period last year. Excluding a $12 million decrease in Net sales due to foreign currency translation, International Net sales increased primarily as a result of an increase in net sales from new locations and an increase in comparable store net sales of 1.7%.

The increase in comparable store net sales resulted primarily from increases in our seasonal and core toy categories. The increase in our seasonal category was primarily due to increased sales of outdoor products. The increase in our core toy category was primarily due to increased sales of action figures.

Cost of Sales and Gross Margin

We record the costs associated with operating our distribution networks as a part of SG&A, including those costs that primarily relate to transporting merchandise from distribution centers to stores. Therefore, our consolidated Gross margin may not be comparable to the gross margins of other retailers that include similar costs in their cost of sales.

The following are reflected in “Cost of sales”:

• the cost of merchandise acquired from vendors;

• freight in;

• provision for excess and obsolete inventory;

• shipping costs to consumers;

• provision for inventory shortages; and

• credits and allowances from our merchandise vendors.

Gross Margin

	13 Weeks Ended
								Percentage of Net Sales
($ In millions)	August 2, 2014		August 3, 2013		$ Change			August 2, 2014		August 3, 2013		Change
Domestic	$	506	$	531	$	(25	)	34.7	%	36.6	%	(1.9	)%
International	410		389		21			41.8	%	42.0	%	(0.2	)%
Toys “R” Us - Consolidated	$	916	$	920	$	(4	)	37.5	%	38.7	%	(1.2	)%

Gross margin decreased by $4 million to $916 million for the thirteen weeks ended August 2, 2014, compared to $920 million for the same period last year. Foreign currency translation increased Gross margin by $4 million.

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Gross margin, as a percentage of Net sales, decreased by 1.2 percentage points for the thirteen weeks ended August 2, 2014 compared to the same period last year. The decrease in Gross margin, as a percentage of Net sales, was primarily caused by margin rate declines in our Domestic segment within certain categories due in part to our promotional and clearance efforts.

	26 Weeks Ended
								Percentage of Net Sales
($ In millions)	August 2, 2014		August 3, 2013		$ Change			August 2, 2014		August 3, 2013		Change
Domestic	$	1,055	$	1,069	$	(14	)	35.2	%	36.5	%	(1.3	)%
International	779		751		28			40.6	%	40.5	%	0.1	%
Toys “R” Us - Consolidated	$	1,834	$	1,820	$	14		37.3	%	38.0	%	(0.7	)%

Gross margin increased by $14 million to $1,834 million for the twenty-six weeks ended August 2, 2014, compared to $1,820 million for the same period last year. Foreign currency translation decreased Gross margin by $1 million.

Gross margin, as a percentage of Net sales, decreased by 0.7 percentage points for the twenty-six weeks ended August 2, 2014 compared to the same period last year. The decrease in Gross margin, as a percentage of Net sales, was primarily caused by margin rate declines in our Domestic segment within certain categories due in part to our promotional and clearance efforts.

Domestic

Gross margin decreased by $25 million to $506 million for the thirteen weeks ended August 2, 2014, compared to $531 million for the same period last year. Gross margin, as a percentage of Net sales, decreased by 1.9 percentage points for the thirteen weeks ended August 2, 2014 compared to the same period last year.

The decrease in Gross margin, as a percentage of Net sales, resulted primarily from margin rate declines predominantly in our learning and seasonal categories. The decline is largely due to our promotional and clearance efforts, primarily resulting from an incremental $19 million net loss on previously identified clearance inventory written down in the fourth quarter of fiscal 2013.

Gross margin decreased by $14 million to $1,055 million for the twenty-six weeks ended August 2, 2014, compared to $1,069 million for the same period last year. Gross margin, as a percentage of Net sales, decreased by 1.3 percentage points for the twenty-six weeks ended August 2, 2014 compared to the same period last year.

The decrease in Gross margin, as a percentage of Net sales, resulted primarily from margin rate declines predominantly in our learning and seasonal categories. The decline is largely due to our promotional and clearance efforts, primarily resulting from an incremental $8 million net loss on previously identified clearance inventory written down in the fourth quarter of fiscal 2013.

International

Gross margin increased by $21 million to $410 million for the thirteen weeks ended August 2, 2014, compared to $389 million for the same period last year. Foreign currency translation increased Gross margin by $4 million. Gross margin, as a percentage of Net sales, remained relatively consistent for the thirteen weeks ended August 2, 2014.

Gross margin increased by $28 million to $779 million for the twenty-six weeks ended August 2, 2014, compared to $751 million for the same period last year. Foreign currency translation decreased Gross margin by $1 million. Gross margin, as a percentage of Net sales, remained relatively consistent for the twenty-six weeks ended August 2, 2014, compared to the same period last year.

Selling, General and Administrative Expenses

The following are the types of costs included in SG&A:

• store payroll and related payroll benefits;

• rent and other store operating expenses;

• advertising and promotional expenses;

• costs associated with operating our distribution network, including costs related to transporting merchandise from distribution centers to stores;

• restructuring charges; and

• other corporate-related expenses.

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	13 Weeks Ended
								Percentage of Net Sales
($ In millions)	August 2, 2014		August 3, 2013		$ Change			August 2, 2014		August 3, 2013		Change
Toys “R” Us - Consolidated	$	878	$	890	$	(12	)	36.0	%	37.4	%	(1.4	)%

SG&A decreased by $12 million to $878 million for the thirteen weeks ended August 2, 2014, compared to $890 million for the same period last year. Foreign currency translation increased SG&A by $4 million. As a percentage of Net sales, SG&A decreased by 1.4 percentage points.

Excluding the impact of foreign currency translation, the decrease in SG&A was primarily due to a $20 million decrease in legal expenses related to the prior year judgment in the Aleo v. SLB Toys USA, Inc. (“Aleo”) case and $7 million in favorable insurance claim settlements in the current year related to property losses. These decreases were partially offset by a $6 million increase in occupancy costs, predominantly as a result of an increase in new stores and an increase in common area maintenance expenses.

	26 Weeks Ended
							Percentage of Net Sales
($ In millions)	August 2, 2014		August 3, 2013		$ Change		August 2, 2014		August 3, 2013		Change
Toys “R” Us - Consolidated	$	1,795	$	1,776	$	19	36.5	%	37.1	%	(0.6	)%

SG&A increased by $19 million to $1,795 million for the twenty-six weeks ended August 2, 2014, compared to $1,776 million for the same period last year. Foreign currency translation decreased SG&A by $1 million. As a percentage of Net sales, SG&A decreased by 0.6 percentage points.

Excluding the impact of foreign currency translation, the increase in SG&A was primarily due to a $25 million increase in occupancy costs, predominantly as a result of an increase in new stores, an increase in utility expenses and closure costs mainly associated with a distribution center. Also contributing to the increase in SG&A was a $12 million increase in professional fees and an $11 million increase in payroll expenses. These increases were partially offset by a $20 million decrease in legal expenses related to the prior year judgment in the Aleo case and a $9 million decrease in advertising expenses.

Depreciation and Amortization

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014		August 3, 2013		Change		August 2, 2014		August 3, 2013		Change
Toys “R” Us - Consolidated	$	95	$	95	$	—	$	199	$	195	$	4

Depreciation and amortization remained consistent for the thirteen weeks ended August 2, 2014, compared to the same period last year.

Depreciation and amortization increased by $4 million for the twenty-six weeks ended August 2, 2014, compared to the same period last year. The increase was primarily due to accelerated depreciation of certain assets, which we committed to dispose of prior to the end of their useful lives, partially offset by fully depreciated assets.

Other Income, Net

Other income, net includes the following:

• credit card program income;

• gift card breakage income;

• net gains on sales of properties;

• impairment of long-lived assets;

• foreign exchange gains and losses; and

• other operating income and expenses.

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	13 Weeks Ended							26 Weeks Ended
(In millions)	August 2, 2014		August 3, 2013		Change			August 2, 2014		August 3, 2013		Change
Toys “R” Us - Consolidated	$	15	$	19	$	(4	)	$	27	$	32	$	(5	)

Other income, net decreased by $4 million to $15 million for the thirteen weeks ended August 2, 2014, compared to $19 million for the same period last year. The decrease was primarily due to a $3 million increase in impairment of long-lived assets.

Other income, net decreased by $5 million to $27 million for the twenty-six weeks ended August 2, 2014, compared to $32 million for the same period last year. The decrease was primarily due to a $4 million increase in impairment of long-lived assets.

Interest Expense

	13 Weeks Ended							26 Weeks Ended
(In millions)	August 2, 2014		August 3, 2013		Change			August 2, 2014		August 3, 2013		Change
Toys “R” Us - Consolidated	$	102	$	116	$	(14	)	$	210	$	230	$	(20	)

Interest expense decreased by $14 million and $20 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively, compared to the same periods last year. The decrease for both periods was primarily due to savings associated with refinancing the $950 million 10.750% senior unsecured notes due fiscal 2017 to a $985 million senior unsecured term loan facility due fiscal 2019 at a lower rate of interest.

Interest Income

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014		August 3, 2013		Change		August 2, 2014		August 3, 2013		Change
Toys “R” Us - Consolidated	$	1	$	1	$	—	$	2	$	4	$	(2	)

Interest income remained consistent for the thirteen weeks ended August 2, 2014, compared to the same period last year.

Interest income decreasedby $2 million to $2 million for the twenty-six weeks ended August 2, 2014, compared to $4 million for the same period last year. The decrease was primarily due to the April 2013 maturity of our Vanwall Finance PLC debt security holdings.

Income Tax Expense (Benefit)

The following table summarizes our income tax expense (benefit) and effective tax rates for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
($ In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Loss before income taxes	$	(143	)	$	(161	)	$	(341	)	$	(345	)
Income tax expense (benefit)	4			(48		)	2			(121		)
Effective tax rate	(2.8		)%	29.8		%	(0.6		)%	35.1		%

The effective tax rates for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013 were based on our forecasted annualized effective tax rates, adjusted for discrete items that occurred within the periods presented. Our forecasted annualized effective tax rate is (0.5)% for the twenty-six weeks ended August 2, 2014 compared to 37.1% for the same period last year. The difference between our forecasted annualized effective tax rates is primarily due to our not being able to take a benefit for current year losses in the US and certain foreign jurisdictions, as the Company concluded in the third quarter of fiscal 2013 that it is more likely than not that a benefit for losses in these jurisdictions will not be realized in the foreseeable future.

There were no significant discrete items that impacted our effective tax rate for the thirteen weeks ended August 2, 2014. For the thirteen weeks ended August 3, 2013, our effective tax rate was impacted by a tax expense of $5 millionrelated to adjustments to deferred taxes resulting from a change in statutory tax rate.

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There were no significant discrete items that impacted our effective tax rate for the twenty-six weeks ended August 2, 2014. For the twenty-six weeks ended August 3, 2013, our effective tax rate was impacted by a tax expense of$5 million related to adjustments to deferred taxes resulting from a change in statutory tax rate and$1 millionrelated to state income taxes. This tax expense was partially offset by a tax benefit of$2 millionrelated to adjustments to taxes payable.

Non-GAAP Financial Measure - Adjusted EBITDA

We believe Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Investors of the Company regularly request Adjusted EBITDA as a supplemental analytical measure to, and in conjunction with, the Company’s GAAP financial data. We understand that investors use Adjusted EBITDA, among other things, to assess our period-to-period operating performance and to gain insight into the manner in which management analyzes operating performance.

In addition, we believe that Adjusted EBITDA is useful in evaluating our operating performance compared to that of other companies in our industry because the calculation of EBITDA and Adjusted EBITDA generally eliminates the effects of financing and income taxes and the accounting effects of capital spending and acquisitions, which items may vary for different companies for reasons unrelated to overall operating performance. We use the non-GAAP financial measures for planning and forecasting and measuring results against the forecast and in certain cases we use similar measures for bonus targets for certain of our employees. Using several measures to evaluate the business allows us and investors to assess our relative performance against our competitors.

Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that do not reflect our core operations, other companies, even in the same industry, may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. The Company does not, and investors should not, place undue reliance on EBITDA or Adjusted EBITDA as measures of operating performance.

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A reconciliation of Net loss attributable to Toys “R” Us, Inc. to EBITDA and Adjusted EBITDA is as follows:

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Net loss attributable to Toys “R” Us, Inc.	$	(148	)	$	(113	)	$	(344	)	$	(224	)
Add:
Income tax expense (benefit)	4			(48		)	2			(121		)
Interest expense, net	101			115			208			226
Depreciation and amortization	95			95			199			195
EBITDA	52			49			65			76
Adjustments:
Sponsors’ management and advisory fees (a)	6			5			12			11
Litigation expense (b)	—			20			—			20
Severance	4			9			9			13
Store closure costs	(1		)	—			4			—
Impairment of long-lived assets (c)	4			1			7			3
Net gains on sales of properties	(3		)	(5		)	(3		)	(7		)
Compensation expense (d)	5			(2		)	5			(1		)
Property losses, net of insurance recoveries (e)	(7		)	—			(7		)	—
Obsolete inventory clearance (f)	19			—			8			—
Other (g)	2			(3		)	2			—
Adjusted EBITDA (h)	$	81		$	74		$	102		$	115

(a) Represents the fees expensed to Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. L.P., and Vornado Realty Trust (collectively, the “Sponsors”) in accordance with the advisory agreement.

(b) Represents litigation expenses recognized in fiscal 2013 related to the judgment in the Aleo case.

(c) Asset impairments primarily due to the identification of underperforming stores and the relocation of certain stores.

(d) Represents the incremental compensation expense related to certain one-time awards, net of forfeitures of certain officers' awards. Commencing in the second quarter of fiscal 2014, we have revised our definition of Adjusted EBITDA to include the impact of forfeitures of certain officers' awards and have therefore revised our prior year's Adjusted EBITDA.

(e) Represents property losses and insurance claims recognized.

(f) Represents an incremental loss on previously identified clearance inventory.

(g) Represents miscellaneous other charges which were not individually significant for separate disclosure.

(h) Adjusted EBITDA is defined as EBITDA (earnings before net interest income (expense), income tax expense (benefit), depreciation and amortization), as further adjusted to exclude the effects of certain income and expense items that management believes make it more difficult to assess the Company’s actual operating performance including certain items which are generally non-recurring. We have historically excluded the impact of such items from internal performance assessments. We believe that excluding items such as Sponsors’ management and advisory fees, asset impairment charges, restructuring charges, impact of litigation, noncontrolling interest, net gains on sales of properties and other charges, helps investors compare our operating performance with our results in prior periods. We believe it is appropriate to exclude these items as they are not related to ongoing operating performance and, therefore, limit comparability between periods and between us and similar companies.

Liquidity and Capital Resources

Overview

As of August 2, 2014, we were in compliance with all of the covenants related to our outstanding debt. On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its $1.85 billion secured revolving credit facility (“ABL Facility”) in order to extend the maturity date of the facility and amend certain other provisions. The ABL Facility as amended will continue to provide for $1.85 billion of revolving commitments. At August 2, 2014, under the ABL

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Facility, we had outstanding borrowings of $250 million, a total of $92 million of outstanding letters of credit and excess availability of $828 million. We are also subject to a minimum excess availability covenant, which was $125 million at August 2, 2014, with remaining availability of $703 million in excess of the covenant.

Toys “R” Us-Japan, Ltd. (“Toys-Japan”) currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit (“Tranche 1” and “Tranche 2”). Tranche 1 is available in amounts of up to ¥13.0 billion ($127 million at August 2, 2014), expiring on June 30, 2015. At August 2, 2014, we had outstanding borrowings of $77 million under Tranche 1, with $50 million of remaining borrowing availability.

On July 15, 2014, Toys-Japan entered into an agreement with a syndicate of financial institutions to refinance Tranche 2. As a result, Tranche 2 is available in amounts of up to ¥3.5 billion ($34 million at August 2, 2014), expiring on June 30, 2016. At August 2, 2014, we had outstanding borrowings of $34 million under Tranche 2, with no remaining borrowing availability.

Additionally on July 15, 2014, Toys-Japan amended its uncommitted line of credit resulting in total availability of ¥1.5 billion ($15 million at August 2, 2014), which will renew August 1 of each year unless otherwise canceled. As of August 2, 2014, we had no outstanding borrowings under the uncommitted line of credit.

Our European and Australian asset-based revolving credit facility as amended (the “European ABL Facility”) provides for a five-year £138 million ($232 million at August 2, 2014) asset-based senior secured revolving credit facility which will expire on March 8, 2016. At August 2, 2014, we had outstanding borrowings of $61 million, with $70 million of remaining availability under the European ABL Facility.

Toys (Labuan) Holding Limited (“Labuan”) has several uncommitted unsecured lines of credit with various financial institutions with total availability of HK$302 million ($39 million at August 2, 2014). As of August 2, 2014, we had $12 million of borrowings and $3 million of bank guarantees issued under these facilities. The remaining availability under these facilities was $24 million.

We are dependent on the borrowings provided by our lenders to support our working capital needs, capital expenditures and to service debt. As of August 2, 2014, we have funds available to finance our operations under our ABL Facility through March 2019, subject to an earlier springing maturity, our European ABL Facility through March 2016 and our Toys-Japan unsecured credit lines with a tranche maturing June 2015 and a tranche maturing June 2016. In addition, Labuan and Toys-Japan have uncommitted lines of credit, which are due on demand. If our cash flow and capital resources do not provide the necessary liquidity, it could have a significant negative effect on our results of operations.

In general, our primary uses of cash are providing for working capital purposes (which principally represents the purchase of inventory), servicing debt, remodeling existing stores, financing construction of new stores and paying expenses, such as payroll costs and rental expense, to operate our stores. Our working capital needs follow a seasonal pattern, peaking in the third quarter of the year when inventory is purchased for the fourth quarter holiday selling season. Our largest source of operating cash flows is cash collections from our customers. We have been able to meet our cash needs principally by using cash on hand, cash flows from operations and borrowings under our revolving credit facilities and credit lines.

Although we believe that cash generated from operations, along with our existing cash, revolving credit facilities and credit lines will be sufficient to fund our expected cash flow requirements and planned capital expenditures for at least the next 12 months, any world-wide financial market disruption could have a negative impact on our ability to refinance our maturing debt and available resources in the future.

Capital Expenditures

A component of our long-term strategy is our capital expenditure program. Our capital expenditures are primarily for financing construction of new stores and remodeling existing stores, as well as improving and enhancing our e-commerce and other information technology and logistics systems. Capital expenditures are funded primarily through cash provided by operating activities, as well as available cash.

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The following table presents our capital expenditures for the twenty-six weeks ended August 2, 2014 and August 3, 2013:

	26 Weeks Ended
(In millions)	August 2, 2014		August 3, 2013
Information technology	$	30	$	26
Other store-related projects (1)	22		45
New stores (2)	17		34
Distribution centers	17		5
Total capital expenditures	$	86	$	110

(1) Includes store updates and other projects including conversions.

(2) Includes single format stores (including Express stores) as well as SBS relocations.

Cash Flows

	26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			Change
Net cash used in operating activities	$	(597	)	$	(513	)	$	(84	)
Net cash used in investing activities	(78		)	(83		)	5
Net cash provided by (used in) financing activities	381			(45		)	426
Effect of exchange rate changes on Cash and cash equivalents	3			(13		)	16
Net decrease during period in Cash and cash equivalents	$	(291	)	$	(654	)	$	363

Cash Flows Used in Operating Activities

Net cash used in operating activities increased$84 million to $597 million for the twenty-six weeks ended August 2, 2014, compared to $513 million for the twenty-six weeks ended August 3, 2013. The increase in Net cash used in operating activities was principally the result of an increase in vendor payments due to timing, partially offset by a decrease in income taxes paid compared to prior year.

Cash Flows Used in Investing Activities

Net cash used in investing activities decreased$5 million to $78 million for the twenty-six weeks ended August 2, 2014, compared to $83 million for the twenty-six weeks ended August 3, 2013. The decrease in Net cash used in investing activities was due to $27 million in restricted cash primarily required to be held in the prior year in conjunction with the terms of the New UK Propco Facility Agreement, a $24 million reduction in capital expenditures and a prior year purchase of $20 million in debt securities of Debussy DTC Plc. The decrease in Net cash used in investing activities was partially offset by a prior year repayment of $52 million for the Vanwall Finance Plc. debt securities held by us and a $14 million decrease in proceeds received from sales of fixed assets compared to prior year.

Cash Flows Provided by (Used In) Financing Activities

Net cash provided by financing activities was $381 million for the twenty-six weeks ended August 2, 2014, compared to Net cash used in financing activities of $45 million for the twenty-six weeks ended August 3, 2013. The change in Net cash provided by financing activities was primarily attributable to a $409 millionincrease in net debt borrowings.

Debt

Refer to Note 2 to the Condensed Consolidated Financial Statements entitled “Short-term borrowings and long-term debt” for further details regarding our debt and any of the transactions described below.

As of August 2, 2014, we had total indebtedness of $5.4 billion, of which $3.2 billion was secured indebtedness.

During the twenty-six weeks ended August 2, 2014, the following events occurred with respect to our debt structure:

• On July 15, 2014, Toys-Japan entered into an agreement with a syndicate of financial institutions to refinance Tranche 2. As a result, Tranche 2 is available in amounts of up to ¥3.5 billion, expiring on June 30, 2016.

• On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its ABL Facility in order to extend the maturity date of the facility and amend certain other provisions. The ABL Facility

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as amended will continue to provide for $1.85 billion of revolving commitments, and permits Toys-Delaware to request an increase in commitments by up to $1.15 billion, subject to certain conditions, including obtaining new or increased commitments from new or existing lenders. The ABL Facility has a final maturity date of March 21, 2019, with a springing maturity date if the Toys-Delaware term loans due fiscal 2016 and fiscal 2018 and the Toys-Delaware secured notes due fiscal 2016 are not repaid 30 days prior to maturity.

We and our subsidiaries, as well as the Sponsors or their affiliates, may from time to time acquire debt or debt securities issued by us or our subsidiaries in open market transactions, tender offers, exchange offers, privately negotiated transactions or otherwise. Any such transactions, and the amounts involved, will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Refer to Note 8 to our Condensed Consolidated Financial Statements entitled “Related party transactions” and Note 16 to our Consolidated Financial Statements entitled “RELATED PARTY TRANSACTIONS” in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

Contractual Obligations

Our contractual obligations consist mainly of payments related to Long-term debt and related interest, operating leases related to real estate used in the operation of our business and product purchase obligations. Refer to the “CONTRACTUAL OBLIGATIONS” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report for the fiscal year ended February 1, 2014 included in our Form 10-K filed on March 31, 2014, for details on our contractual obligations.

Critical Accounting Policies

Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities as of the date of the financial statements and during the applicable periods. We base these estimates on historical experience and on other factors that we believe are reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions and could have a material impact on our Condensed Consolidated Financial Statements. Refer to the Annual Report on Form 10-K for the fiscal year ended February 1, 2014 for a discussion of critical accounting policies.

Recently Adopted Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”). ASU 2014-08 limits the requirement to report discontinued operations to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. The amendments also require expanded disclosures concerning discontinued operations, disclosures of certain financial results attributable to a disposal of a significant component of an entity that does not qualify for discontinued operations reporting and expanded disclosures for long-lived assets classified as held for sale or disposed of. Early adoption is permitted, but only for disposals (or assets classified as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company early adopted the amendments in ASU 2014-08, effective February 2, 2014. The adoption did not have a material impact on our Condensed Consolidated Financial Statements.

In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): 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”). ASU 2013-11 addresses the diversity in practice regarding financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance requires an unrecognized tax benefit, or a portion of, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. To the extent the deferred tax asset is not available at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position; the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with the deferred tax asset. The Company has been using the method prescribed by ASU 2013-11 since the fiscal year ended February 3, 2007. Therefore, the issuance of ASU 2013-11 did not have an impact on our Condensed Consolidated Financial Statements.

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In April 2013, the FASB issued ASU No. 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting” (“ASU 2013-07”). ASU 2013-07 clarifies when an entity should apply the liquidation basis of accounting and provides principles for the measurement of associated assets and liabilities, as well as required disclosures. The Company adopted the amendments in ASU 2013-07, effective February 2, 2014. The adoption did not have an impact on our Condensed Consolidated Financial Statements.

In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity” (“ASU 2013-05”). ASU 2013-05 provides clarification regarding whether Subtopic 810-10, Consolidation - Overall, or Subtopic 830-30, Foreign Currency Matters - Translation of Financial Statements, applies to the release of cumulative translation adjustments into net income when a reporting entity either sells a part or all of its investment in a foreign entity or ceases to have a controlling financial interest in a subsidiary or group of assets that constitute a business within a foreign entity. The Company adopted the amendments in ASU 2013-05, effective February 2, 2014. The adoption did not have an impact on our Condensed Consolidated Financial Statements.

In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date” (“ASU 2013-04”). ASU 2013-04 provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The Company adopted the amendments in ASU 2013-04, effective February 2, 2014. Other than additional disclosures regarding obligations resulting from joint and several liability arrangements disclosed above, the adoption did not have an impact on our Condensed Consolidated Financial Statements.

Forward-Looking Statements

This Quarterly Report on Form 10-Q, the other reports and documents that we have filed or may in the future file with the Securities and Exchange Commission and other publicly released materials and statements, both oral and written, that we have made or may make in the future, may contain “forward looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such disclosures are intended to be covered by the safe harbors created thereby. These forward looking statements reflect our current views with respect to, among other things, our operations and financial performance. All statements herein or therein that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. We generally identify these statements by words or phrases, such as “anticipate,” “estimate,” “plan,” “project,” “expect,” “believe,” “intend,” “foresee,” “forecast,” “will,” “may,” “outlook” or the negative version of these words or other similar words or phrases. These statements discuss, among other things, our strategy, store openings, integration and remodeling, the development, implementation and integration of our Internet business, future financial or operational performance, projected sales for certain periods, comparable store net sales from one period to another, cost savings, results of store closings and restructurings, outcome or impact of pending or threatened litigation, domestic or international developments, amount and allocation of future capital expenditures, growth initiatives, inventory levels, cost of goods, selection and type of merchandise, marketing positions, implementation of safety standards, future financings, estimates regarding future effective tax rates, and other goals and targets and statements of the assumptions underlying or relating to any such statements.

These statements are subject to risks, uncertainties and other factors, including, among others, the seasonality of our business, competition in the retail industry, changes in our product distribution mix and distribution channels, general economic factors in the United States and other countries in which we conduct our business, consumer spending patterns, our ability to implement our strategy including implementing initiatives for season, the availability of adequate financing, access to trade credit, changes in consumer preferences, changes in employment legislation, our dependence on key vendors for our merchandise, political and other developments associated with our international operations, costs of goods that we sell, labor costs, transportation costs, domestic and international events affecting the delivery of toys and other products to our stores, product safety issues including product recalls, the existence of adverse litigation, changes in laws that impact our business, our substantial level of indebtedness and related debt-service obligations, restrictions imposed by covenants in our debt agreements and other risks, uncertainties and factors set forth under Item 1A entitled “RISK FACTORS” of our Annual Report on Form 10-K filed on March 31, 2014, and in our other reports and documents filed with the Securities and Exchange Commission. In addition, we typically earn a disproportionate part of our annual operating earnings in the fourth quarter as a result of seasonal buying patterns and these buying patterns are difficult to forecast with certainty. These factors should not be construed as exhaustive, and should be read in conjunction with the other cautionary statements that are included in this report. We believe that all forward-looking statements are based on reasonable assumptions when made; however, we caution that it is impossible

34

to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that, accordingly, one should not place undue reliance on these statements. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update these statements in light of subsequent events or developments unless required by the Securities and Exchange Commission’s rules and regulations. Actual results and outcomes may differ materially from anticipated results or outcomes discussed in any forward-looking statement.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no significant change in our exposure to market risk during the twenty-six weeks ended August 2, 2014. For a discussion of our exposure to market risk, refer to Item 7A entitled “QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK” in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the principal executive and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

We have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our second quarter of fiscal 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are, and in the future may be, involved in various 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. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages, and until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these proceedings involve matters of which the outcomes are inherently difficult to predict. However, based upon our historical experience with similar matters, we do not expect that any such additional losses would be material to our consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors

As of the date of this report, there have been no material changes to the information related to Item 1A entitled “RISK FACTORS” disclosed in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

Award Exchange

On September 5, 2014, the Company, in order to ensure focus on transforming the business and to create alignment and further retention for employees, commenced a private offer (the “Award Exchange”), to certain employees, including Antonio Urcelay, Deborah Derby and Monika Merz, to exchange certain of their outstanding stock options that were granted prior to 2014 (“Old Options”) under the Company’s Amended and Restated 2005 Management Equity Plan, as amended (the “2005 Plan”), or the Company’s 2010 Incentive Plan, as amended (the “2010 Incentive Plan”), for new stock options granted under the 2010 Incentive Plan (“New Options”) on a one-for-one basis. If an employee participates in the Award Exchange, the employee must tender all but not less than all of the employee’s Old Options. The New Options will be subject to the following key terms:

The New Options will have an exercise price equal to the most recent determination of fair market value of a share of the Company’s common stock at the time of the commencement of the exchange offer as determined by the Board of Directors of the Company (the “Board”) and will vest as follows: (i) New Options granted in exchange for Old Options originally granted during the period commencing on January 1, 2005 and ending on December 31, 2012 will vest 50% on the award exchange date and 25% on each of the first and second anniversaries of the award exchange date, subject to the employee’s continued employment on each such anniversary and (ii) New Options granted in exchange for Old Options originally granted in 2013 will vest 25% on each of the first, second, third and fourth anniversaries of the award exchange date, subject to the employee’s continued employment on each such anniversary. Similarly to the Old Options, the vesting of the New Options will be accelerated upon a change in control of the Company or upon the employee’s earlier termination due to death, disability or retirement.

The New Options, to the extent vested, will be exercisable at any time prior to the earliest to occur of: (i) the later to occur of (A) the fifth anniversary of the last date on which the New Option becomes fully vested and (B) the original expiration date of the respective Old Option, (ii) if, following both the occurrence of either a public offering or a change in control of the Company and the termination of the employee’s employment for any reason other than for cause, the Company provides the employee with written notice that the employee may sell any shares acquired upon exercise of the vested portion of the New Option without any restrictions, the date that is 30 days following the date of such notice, or (iii) immediately prior to the effective time of the employee’s termination of employment by the Company for cause, provided, in each case, any unvested portion will be unexercisable and immediately forfeited.

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Shares of common stock issuable upon exercise of the New Options will be subject to a Company call right, but will not be subject to any put rights by the holder. In addition, prior written approval of the executive committee of the Board is required for any cashless exercise of the New Options or any right of the employee to cover taxes due upon the vesting of certain awards granted under the 2010 Incentive Plan through net settlement.

Amendment to 2010 Incentive Plan

On September 4, 2014, the Board and the stockholders of the Company approved Amendment No. 2 (“Amendment No. 2”) to the 2010 Incentive Plan, which provided that (i) no further awards would be granted under the 2005 Plan, as of July 17, 2014, and (ii) the number of shares of common stock of the Company available for issuance under the 2010 Incentive Plan was increased by the sum of the number of shares available for issuance under the 2005 Plan as of July 17, 2014, and any shares that, after July 17, 2014, would have otherwise reverted back to the 2005 Plan and again have become available for issuance thereunder.

The foregoing summary is qualified in its entirety by reference to the full text of Amendment No. 2, a copy of which is attached hereto as an Exhibit 10.1 and is incorporated by reference herein.

Item 6. Exhibits

See the Index to Exhibits immediately following the signature page hereto, which Index to Exhibits is incorporated herein by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TOYS “R” US, INC.
	(Registrant)
Date: September 10, 2014	/s/  Michael J. Short
	Michael J. Short
	Executive Vice President – Chief Financial Officer

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INDEX TO EXHIBITS

Exhibit No.	Description
3.1	Amended and Restated Certificate of Incorporation of the Registrant filed with the Secretary of State of the State of Delaware on June 10, 2008 (filed as Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q, filed on June 10, 2008 and incorporated herein by reference).
3.2	Amended and Restated By-Laws of the Registrant, dated June 10, 2008 (filed as Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q, filed on June 10, 2008 and incorporated herein by reference).
10.1	Employment Agreement between Toys “R” Us, Inc. and Michael J. Short, dated as of June 19, 2014.
10.2	Amendment No. 2 to the Toys “R” Us, Inc. 2010 Incentive Plan.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a - 14(a) and Rule 15d - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a - 14(a) and Rule 15d - 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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EX-10.1

Execution Copy

EMPLOYMENT AGREEMENT

MICHAEL J. SHORT

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of June 19th, 2014 (the “Execution Date”) by and between Toys “R” Us, Inc. (the “Company”) and Michael J. Short (the “Executive”).

WHEREAS, as of the Execution Date, the Company desires to employ Executive and to enter into an agreement embodying the terms of such employment and Executive desires to accept such employment and enter into such an agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1.Term of Employment. Subject to the provisions of Section 7 of this Agreement, Executive shall be employed by the Company and designated indirect subsidiaries of the Company (each, a “Subsidiary”), for a period commencing on June 23, 2014 (the “Commencement Date”) and ending on the second anniversaryof the Commencement Date(the “Initial Term”),on the terms and subject to the conditions set forth in this Agreement.Following the Initial Term, the term of Executive’s employment hereunder shall automatically be renewed on the terms and conditions hereunder for additional one year periods commencing on each anniversary of the last day of the Initial Term (the Initial Term and any annual extensions of the term of this Agreement, subject to the provisions of Section 7 hereof, together, the “Employment Term”), unless either partygives written notice of non-renewal at least 60 daysprior to such anniversary.

2.Position.

a.During the Employment Term, Executive shall serve as the Executive Vice President - Chief Financial Officer of each of the Company, Toys “R” Us – Delaware, Inc. and any other indirect Subsidiaries that the board of directors of the Company(the “Board”) designates (such entities collectively referred to as the “TRU Group”). In such positions, Executive shall have such duties and authority as determined by the Board and the board of directors of each Subsidiary, as applicable (each, a “Subsidiary Board”) and commensurate with the position of the Chief Financial Officer of a company of similar size and nature to that of the TRU Group. During the Employment Term, the Executive shall report to the Chief Executive Officer.

b.During the Employment Term, Executive will devote Executive’s full business time and reasonable best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere in any material respect with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that nothing

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herein shall preclude Executive from continuing to serve on any board of directors or trustees, advisory board or government commission which is listed on Exhibit A attached hereto, or, subject to the prior approval of the Board, from accepting appointment to serve on any board of directors or trustees of any business corporation or any charitable organization; provided in each case in the aggregate, that such activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Section 8. Except as specifically authorized with respect to the entities identified on Exhibit A, Executive shall terminate any participation in any other business entities, including but not limited to Better Boating Partners, LLC, within three (3) months of the Commencement Date.

3.Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $700,000.00, payable in substantially equal periodic payments in accordance with the Company’s practices for other executive employees, as such practices may be determined from time to time. Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole discretion of the Board, which shall at least annually review Executive’s rate of base salary to determine if any such increase shall be made. Executive’s annual base salary, as in effect from time to time hereunder, is hereinafter referred to as the “Base Salary.”

4.Bonus.

a.Annual Bonus. During the Employment Term, Executive shall be eligible to earn an annual bonus award in respect of each fiscal year of the Company (an “Annual Bonus”), in a target amount of up to 100% of Executive’s Base Salary (the “Target Bonus”), payable upon the Company’s achievement of certain performance targets established by the Board or any appropriate committee or delegee thereof and pursuant to the terms of the Company’s incentive plan, as in effect from time to time. Notwithstanding the foregoing, in the event the Company’s performance exceeds such performance targets, Executive shall be eligible to earn an Annual Bonus in an amount in excess of the Target Bonus, as determined by the Board or any appropriate committee or delegee thereof in accordance with the Company’s incentive plan, as in effect from time to time. The Annual Bonus, if any, shall be paid to Executive not later than two and one-half (2½) months after the end of the applicable fiscal year of the Company. For 2014 only, Executive shall he eligible to earn an Annual Bonus pro-rated for the period he was employed during Fiscal Year 2014.

5.Employee Benefits; Perquisites; Business and Relocation Expenses.

a.Employee Benefits. During the Employment Term, Executive and his spouse and dependents, as applicable, shall be entitled to participate in the Company’s welfare benefit plans and retirement plans, including, without limitation, the Company’s 401(k) and supplemental executive retirement plans and medical, dental and life insurance plans, as in effect from time to time (collectively, the “Employee Benefits”), on the same basis as those benefits are or may be made available to the other senior executives of the Company (other than benefits which have been terminated or for which participation has been frozen). The Company shall be permitted to modify such benefits from time to time consistent with any modifications that impact other senior executives of the Company.

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b.Perquisites. During the Employment Term, Executive shall be entitled to receive such perquisites as are made available to other senior executives of the Company in accordance with the Company’s policies, as in effect from time to time. Executive shall be entitled to not less than four (4) weeks of paid vacation per year, which vacation shall be taken at such times as are reasonably acceptable to the Company in light of the Company’s operations, Executive’s performance of his duties, and in accordance with the terms of the Company’s vacation policy, as in effect from time to time, applicable to Executive.

c.Business Expenses. During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with the Company’s policies, as in effect from time to time, applicable to senior executive officers of the Company.

d.Relocation Expenses. During the Employment Term, Executive shall maintain a primary residence within 40 miles of the Company’s Wayne, NJ headquarters. Provided that Executive initiates the relocation of his primary residence within 40 miles of the Company’s headquarters within eighteen (18) months of the Commencement Date, the Company will provide relocation benefits to Executive including moving expenses and a guaranteed buy-out of Executive’s home located in Florida, consistent with the Company’s current relocation policies (“Relocation Expenses”). The Relocation Expenses shall be subject to repayment as follows:

(i)If Executive resigns without Good Reason (as defined in Section 7) or Executive is terminated by the Company for Cause (as defined in Section 7) on or before the second anniversary of the Commencement Date, he shall reimburse the Company 100% of the Relocation Expenses within five business days of Executive’s last date of employment with the Company.

(ii)If Executive resigns without Good Reason (as defined in Section 7) or Executive is terminated by the Company for Cause (as defined in Section 7) after the second anniversary of the Commencement Date but before the third anniversary of the Commencement Date, he shall reimburse the Company 50% of the Relocation Expenses within five business days of Executive’s last date of employment with the Company.

To the extent permitted by applicable law, the Company may offset any amounts owed pursuant to this Section 5(d) against any amounts payable to Executive by the Company at the time that any such repayment is due and owing.

6.Equity.

a.Sign-On Equity Award. Executive shall receive a one-time sign-on equity award as set forth on Exhibit B (the “Sign-On Equity Award”).

b.Additional One-Time Equity Award. Executive shall receive an additional one-time equity award as set forth on Exhibit B (the “One-Time Equity Award”).

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c.Annual Equity Award. Beginning on or after April 1, 2018, Executive shall participate in the Toys “R” Us, Inc. 2010 Incentive Plan (the “Incentive Plan”) in accordance with the policies and procedures of the Incentive Plan and any subsequent plans.

7.Termination. The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least 60 days’advance written notice of any resignation of Executive’s employment without Good Reason (as defined in Section 7(c) below) (other than due to Executive’s death or Disability). Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the TRU Group; provided, however, that nothing contained in this Section 7 shall alter Executive’s or the Company’s rights with respect to the Incentive Plan, which shall continue to govern Executive’s equity holdings following any termination in accordance herewith.

a.By the Company For Cause or By Executive Without Good Reason.

(i)The Employment Term and Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) and shall terminate automatically upon Executive’s resignation without Good Reason (other than due to Executive’s death or Disability); provided that Executive will be required to give the Company at least 60 days’ advance written notice of such resignation.

(ii) For purposes of this Agreement, “Cause” shall mean any of the following, as determined by the Board: (A) Executive’s willful failure to perform any material portion of his duties; (B) the commission of any fraud, misappropriation or misconduct by Executive that causes demonstrable injury, monetarily or otherwise, to the Company or an affiliate; (C) the conviction of, or pleading guilty or nolo contendere to, a felony involving moral turpitude; (D) an act resulting or intended to result, directly or indirectly, in material gain or personal enrichment to the Executive at the expense of the Company or an affiliate; (E) any material breach of Executive’s fiduciary duties to the Company or an affiliate as an employee or officer; (F) a material violation of the Company’s Code of Ethical Standards, Business Practices and Conduct or any other violation of a TRU Group policy; (G) the failure by the Executive to comply, in any material respect, with the provisions of Sections 8 and 9 of this Agreement; or (H) the failure by the Executive to comply with any other undertaking set forth in this Agreement or any other agreement Executive has with the Company or any affiliate or any breach by Executive hereof or thereof if such failure or breach is reasonably likely to result in a material injury to the Company or an affiliate.

(iii)If Executive’s employment is terminated by the Company for Cause, or if Executive resigns without Good Reason, Executive shall be entitled to receive:

(A)    a lump sum payment of the Base Salary that is earned by Executive but unpaid as of the date of Executive’s termination of employment, paid in accordance with the Company’s payroll practices, but in no event later than thirty (30) days following Executive’s termination of employment;

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(B)    a lump sum payment of any Annual Bonus that is earned by Executive but unpaid as of the date of termination for the immediately preceding fiscal year, paid in accordance with Section 4 (except to the extent payment is otherwise deferred pursuant to any applicable deferred compensation arrangement with the Company);

(C)    reimbursement, within 30 days following submission by Executive to the Company of appropriate supporting documentation, for any unreimbursed business expenses properly incurred by Executive in accordance with the Company policy referenced in Section 5(c) above prior to the date of Executive’s termination; provided claims for such reimbursement (accompanied by appropriate supporting documentation) are submitted to the Company within ninety (90) days following the date of Executive’s termination of employment; and

(D)    such Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (A) through (D) hereof being referred to as the “Accrued Rights”).

Following such termination of Executive’s employment by the Company for Cause or resignation by Executive without Good Reason, except as set forth in this Section 7(a)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

b.Disability or Death.

(i)The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company upon the Executive’s Disability. For purposes of this Agreement, “Disability” shall mean the determination that the Executive is disabled pursuant to the terms of the Company’s long term disability plan.

(ii)Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive:

(A)    the Accrued Rights; and

(B)    a pro rata portion of the Annual Bonus, if any, that Executive would have been entitled to receive pursuant to Section 4 hereof for such year based upon the Company’s actual results for the year of termination and the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment, payable to Executive pursuant to Section 4 had Executive’s employment not terminated.

Following Executive’s termination of employment due to Executive’s death or Disability, except as set forth in this Section 7(b)(ii), Executive or his estate, as applicable, shall have no further rights to any compensation or any other benefits under this Agreement.

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c.By the Company Without Cause or by Executive for Good Reason.

(i)Executive’s employment hereunder may be terminated (A) by the Company without Cause (which shall not include Executive’s termination of employment due to his death or Disability) or (B) by Executive for Good Reason (as defined below).

(ii)For purposes of this Agreement, “Good Reason” shall mean, without the consent of the Executive and other than in connection with a termination of the Executive’s employment by the Company for Cause or due to Executive’s death or Disability, (A) the failure of the Company to pay any undisputed amount due under this Agreement; (B) a substantial reduction in Executive’s targeted compensation level (other than a general reduction in base salary or annual incentive compensation opportunities that affects all members of senior management of the Company proportionally); (C) notice by the Company pursuant to Section 1 that it is not extending the Employment Term; (D) a change in reporting structure such that Executive no longer reports directly either to the CEO of the Company (irrespective of who maintains the role of CEO) or the Board; or (E) the Company’s headquarters are relocated to a location that is greater than 50 miles away from the current headquarters location in Wayne, NJ. Notwithstanding the foregoing, any termination by Executive for Good Reason may only occur if Executive provides a Notice of Termination (as defined in Section 7(d)) for Good Reason within 45 days after Executive learns (or reasonably should have learned) about the occurrence of the event giving rise to the claim of Good Reason. Notwithstanding the foregoing, resignation by Executive shall not be deemed for “Good Reason” if the basis for such Good Reason is cured within a reasonable period of time (determined in light of the cure appropriate to the basis of such Good Reason), but in no event more than thirty (30) business days after the Company receives the Notice of Termination specifying the basis of such Good Reason.

(iii)If Executive’s employment is terminated by the Company without Cause (excluding by reason of Executive’s death or Disability) or by Executive for Good Reason, Executive shall be entitled to receive:

(A)    the Accrued Rights;

(B)    a pro rata portion of the Annual Bonus, if any, that Executive would have been entitled to receive pursuant to Section 4 hereof for such year based upon the Company’s actual results for the year of termination and the percentage of the fiscal year that shall have elapsed through the date of Executive’s termination of employment, payable to Executive pursuant to Section 4 had Executive’s employment not terminated;

(C)subject to Executive’s continued compliance with the provisions of Sections 8 and 9 and Executive’s execution (and non-revocation) of a release of all claims against the TRU Group in a form substantially similar to the Separation and Release Agreement attached hereto as Exhibit C,

(i) if the termination occurs prior to the second anniversary of the Commencement Date, an amount equal to two (2) times the Base Salary at

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the rate in effect immediately prior to the date of Executive’s termination of employment, payable in twenty-four (24) equal monthly installments following Executive’s termination;

(ii) if the termination occurs on or after the second anniversary of the Commencement Date, an amount equal to two (2) times the sum of (x) the Base Salary at the rate in effect immediately prior to the date of Executive’s termination of employment and (y) the target Annual Bonus, payable in twenty-four (24) equal monthly installments following Executive’s termination;    

provided, however, that the aggregate amount described in this subsection (C) shall be in lieu of notice or any other severance amounts to which Executive may otherwise be entitled and shall be reduced by any amounts owed by Executive to the Company or any affiliate; andprovidedfurther, that if Executive’s termination of employment under this Section 7(c) occurs within two (2) years after a Change in Control, Executive shall be entitled to receive the foregoing payments and benefits as set forth in this Section 7(c)(iii)(C) in a lump sum payment within sixty (60) days following Executive’s termination of employment. For the foregoing purpose, “Change in Control” has the meaning ascribed to it in the Toys “R” Us, Inc. 2010 Incentive Plan; and

(D)continuation of medical, dental and life insurance benefits (pursuant to the same benefit plans as in effect for active employees of the Company), with Executive paying a portion of such costs as if Executive’s employment had not terminated, until the earlier to occur of (x) 18 months from the date of termination and (y) the date on which Executive commences to be eligible for coverage under substantially comparable medical, dental and life insurance benefit plans from any subsequent employer (the “Benefit Continuation Period”); provided if such continued coverage is not possible under the general terms and provisions of such plan(s) during such period, the Company shall pay an amount to Executive equal to the Company’s cost of providing such benefits to Executive as if Executive’s employment had not terminated (the “Company Subsidy”). In order to facilitate such coverage, Executive and his spouse and dependents, as applicable, in accordance with the Company’s policies in effect at the time of Executive’s termination, shall agree to elect continuation coverage in accordance with the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA Coverage”) and the Company may satisfy its obligations hereunder by paying a portion of the premiums required for such COBRA Coverage. In the event that the Company, in its sole and absolute discretion, determines at any time that the continued payment of Executive’s COBRA premiums is in violation of the nondiscrimination rules set forth in Section 105(h) of the Code, which will result in a detrimental tax result for Executive (taxability of Executive’s health benefits), the Company reserves the right to discontinue such practice to the extent necessary, and to thereafter pay to Executive the taxable Company Subsidy each month for the remainder of the Benefit

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Continuation Period, less applicable withholding. The medical, dental and life insurance coverage under this Section 7(c)(iii)(D) provided in any one calendar year shall not affect the amount of benefits to be provided in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights pursuant to this Section 7(c)(iii)(D) shall not be subject to liquidation or exchange for another benefit.

Following Executive’s termination of employment by the Company without Cause (excluding by reason of Executive’s death or Disability) or by Executive for Good Reason, except as set forth in this Section 7(c)(iii), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

d.Notice of Termination. Any purported termination of employment by the Company or by Executive (other than due to Executive’s death or Disability) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 13(g) hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

e.Board/Committee Resignation. Upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board and any Subsidiary Boards (and any committees thereof).

8.Non-Competition.

a.Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows:

(i)During the Employment Term and a twenty-four (24) month period commencing on Executive’s termination of employment (the “Restricted Period”), Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”), directly or indirectly:

(A)    engage in any business that directly or indirectly is a “Competitive Business.” For purposes of this subsection (A) a “Competitive Business” means, with respect to the Executive at any time, any Person engaged wholly or in part (directly or through one or more subsidiaries) in the retail sale or distribution (including in stores or via mail order, e-commerce, or similar means) of “Competing Products,” if more than one-third (1/3) of such Person's gross sales for the twelve (12) month period preceding such time (or with respect to the period after Executive’s termination date, as of such termination date) are generated by engaging in such sale or distribution of Competing Products. Without limiting the foregoing, the term “Competitive Business” shall in any event include Wal-Mart, K-Mart/Sears, Target, Amazon.com,

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Buy Buy Baby, Mattel, Hasbro, Tesco, Carrefour and any of their respective parents, subsidiaries, affiliates or commonly controlled entities. For purposes of this subsection (A) “Competing Products” means, with respect to the Executive at any time, (1) toys and games, (2) video games, computer software for children, and electronic toys or games, (3) juvenile or baby products, apparel, equipment, furniture, or consumables, (4) wheeled goods for children, and (5) any other product or group of related products that represents more than twenty (20) percent of the gross sales of the Company and its subsidiaries for the twelve (12) month period preceding such time (or with respect to the period after the Executive’s termination date, as of such termination date);

(B)    enter the employ of, or render any services to, any Person (or any division or controlled or controlling affiliate of any Person) who or which engages in a Competitive Business;

(C)    acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; or

(D)    interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between the Company or any of its affiliates and customers, clients, suppliers, partners, members or investors of the Company or its affiliates.

(E)    Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as a passive investment, securities of any Person engaged in a Competitive Business which are publicly traded on a national or regional stock exchange or on the over-the-counter market or privately held if Executive (x) is not a controlling Person of, or a member of a group which controls, such Person and (y) does not, directly or indirectly, own 3% or more of any class of securities of such Person who is publicly traded or privately held.

(ii)During the Restricted Period, Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any Person, directly or indirectly:

(A)    solicit to leave the employment of, or encourage any employee of the Company or its affiliates to leave the employment of, the Company or its affiliates; or

(B)    hire any such employee (other than clerical or administrative support personnel) who was employed by the Company or its affiliates as of the date of Executive’s termination of employment with the Company or who left the employment of the Company or its affiliates coincident with, or within one year prior to, the termination of Executive’s employment with the Company.

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(iii)During the Restricted Period, Executive will not, directly or indirectly, solicit to leave the employment of, or encourage to cease to work with, as applicable, the Company or its affiliates any consultant, supplier or service provider then under contract with the Company or its affiliates.

(A) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

9.Confidentiality.

a.Executive will not at any time (whether during or after Executive’s employment with the Company), except when required to perform his or her duties to the TRU Group, (x) retain or use for the benefit, purposes or account of Executive or any other Person; or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the TRU Group (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information --including without limitation rates, trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals -- concerning the past, current or future business, activities and operations of the Company and its subsidiaries and/or any third party that has disclosed or provided any of same to the Company and its subsidiaries on a confidential basis (“Confidential Information”) without the prior written authorization of the Board.

b.“Confidential Information” shall not include any information that is (x) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties; (y) required by law or judicial process to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment; or (z) disclosed in connection with a litigation or arbitration proceeding between the parties.

c.Except as required by law or judicial process, Executive will not disclose to anyone, other than Executive’s immediate family, legal and/or financial advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective

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future employer the provisions of Sections 8 and 9 of this Agreement, provided they agree to maintain the confidentiality of such terms.

d.Upon termination of Executive’s employment with the TRU Group for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not the Company’s property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates or subsidiaries (whether or not the retention or use thereof would reasonably be expected to result in a demonstrable injury to the Company, its affiliates or subsidiaries), except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.

e.Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the TRU Group any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive hereby indemnifies, holds harmless and agrees to defend the TRU Group and its respective officers, directors, partners, employees, agents and representatives from any actual breach of the foregoing covenant. During the Employment Term, Executive shall comply with all relevant written policies and guidelines of the Company and its subsidiaries and affiliates which have been made available or disclosed to him, including regarding the protection of Confidential Information and intellectual property and potential conflicts of interest. Executive acknowledges that the Company and its subsidiaries and affiliates may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version; provided, however, that Executive shall not be bound by any such amendments unless and until Executive receives notice of such amendments and copies thereof are made available or disclosed to him.

f.The provisions of this Section 9 shall survive the termination of Executive’s employment for any reason.

10.Specific Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Sections 8 or 9 would be inadequate and the Company and its subsidiaries and affiliates would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any

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payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

11.Arbitration. Except as provided in Section 10, any other dispute arising out of or asserting breach of this Agreement, or any statutory or common law claim by Executive relating to his employment under this Agreement or the termination thereof (including any tort or discrimination claim), shall be exclusively resolved by binding statutory arbitration in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association. Such arbitration process shall take place in New York, New York. A court of competent jurisdiction may enter judgment upon the arbitrator’s award. Each party shall pay the costs and expenses of arbitration (including fees and disbursements of counsel) incurred by such party in connection with any dispute arising out of or asserting breach of this Agreement.

12.Code Section 409A.

a.General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (and any applicable transition relief under Section 409A of the Code). Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers (other than Executive) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Executive as a result of the application of Section 409A of the Code.

b.Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable hereunder, or a different form of payment of such Non-Exempt Deferred Compensation would be effected, by reason of a Change in Control or Executive’s Disability or termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to Executive, and/or such different form of payment will not be effected, by reason of such circumstance unless the circumstances giving rise to such Change in Control, Disability or termination of employment, as the case may be, meet any description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Non-Exempt Deferred Compensation upon a Change in Control, Disability or termination of employment, however defined. If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, or the application of a different form of payment, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.

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c.Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Agreement by reason of Executive’s separation from service during a period in which he is a “specified employee” (as defined in Section 409A of the Code and applicable regulations), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Executive’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Executive’s separation from service (or, if Executive dies during such period, within 30 days after Executive’s death) (in either case, the “Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

d.Treatment of Installment Payments. Each payment of termination benefits under Section 7 of this Agreement, including, without limitation, each installment payment and each payment or reimbursement of premiums for continued medical, dental or life insurance coverage under Section 7(c)(iii)(D), shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

e.Timing of Release of Claims. Whenever in this Agreement the provision of a payment or benefit is conditioned on Executive’s execution and non-revocation of a release of claims, such release must be executed, and all revocation periods shall have expired, within 60 days after the date of termination of Executive’s employment, failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes non-exempt deferred compensation, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year.

f.Permitted Acceleration. The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. Section 1.409A-3(j)(4) to Executive of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A-3(j)(4).

13.Miscellaneous.

a.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey,without regard to conflicts of laws principles thereof.

b.Entire Agreement/Amendments. This Agreement and the Incentive Plan contain the entire understanding of the parties with respect to the employment of Executive by the TRU Group. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those

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expressly set forth herein and therein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

c.No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

d.Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

e.Assignment. This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive; provided, however, that if Executive shall die, all amounts then payable to Executive hereunder shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or other designee or, if there be no such devisee, legatee or designee, to Executive’s estate. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a person or entity which is an affiliate, and shall be assigned to any successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity.Further, the Company will require any successor (whether, direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets which is required by this Section 13(e) to assume and agree to perform this Agreement or which otherwise assumes and agrees to perform this Agreement; provided, however, in the event that any successor, as described above, agrees to assume this Agreement in accordance with the preceding sentence, as of the date such successor so assumes this Agreement, the Company shall cease to be liable for any of the obligations contained in this Agreement.

f.Set Off; Mitigation. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall not be subject to set-off, counterclaim or recoupment, other than amounts loaned or advanced to Executive by the Company or its affiliates, [amounts provided to Executive pursuant to Section 5(b) as per the terms thereof.] amounts owed by Executive under the Incentive Plan, or otherwise as provided in Section 7(c) hereof. Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment or otherwise and the amount of any payment provided for pursuant to this Agreement shall not be reduced by any compensation earned as a result of Executive’s other employment or otherwise.

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g.Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

If to the Company:

Toys “R” Us, Inc.

One Geoffrey Way

Wayne, New Jersey 07470
Attention: General Counsel

If to Executive:

To the most recent address of Executive set forth in the personnel records of the Company.

h.Executive Representation. Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

i.Prior Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates (including, without limitation, the Prior Agreement); provided, however, that the Incentive Plan shall govern the terms and conditions of Executive’s equity holdings in the Company.

j.Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment hereunder, but only to the extent the Company requests such cooperation with reasonable advance notice to Executive and in respect of such periods of time as shall not unreasonably interfere with Executive’s ability to perform his duties with any subsequent employer; provided, however, that the Company shall pay any reasonable travel, lodging and related expenses that Executive may incur in connection with providing all such cooperation, to the extent approved by the Company prior to incurring such expenses.Executive is entitled to be paid or reimbursed for any expenses under this Section 13(j), the amount reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. Executive’s rights to payment or reimbursement of expenses pursuant to this Section

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13(j) shall expire at the end of 20 years after the Execution Date and shall not be subject to liquidation or exchange for another benefit.

k.Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

l.Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this amended and restated Agreement as of the day and year first above written.

TOYS “R” US, INC.

By: /s/ Deborah Derby

     Name: DEBORAH DERBY

     Title: Vice Chair & Executive Vice President

EXECUTIVE

/s/ Michael J. Short

MICHAEL J. SHORT

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EXHIBIT A

Give Kids the World

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EXHIBIT B

Equity Award. Executive shall receive a one-time Sign-On Equity Award of stock options and an Additional One-Time Equity Award of stock options under the Toys “R” Us, Inc. 2010 Incentive Plan (the “Incentive Plan”) as soon as is practicable following the Commencement Date, based upon the valuation of Toys “R” Us, Inc. common stock anticipated to be approved by the Board in June 2014 (“June 2014 Valuation”) which in no event shall exceed $10 per share, as follows:

• Sign-On Equity Award. Executive shall receive 30,000 stock options to acquire Toys “R” Us, Inc. common stock with an exercise price per share equal to the June 2014 Valuation (the “Sign –On Options”). The Sign-On Options shall have a ten-year term and shall be subject to the following vesting conditions:

▪ 7,500 Sign-On Options shall vest on the first anniversary of the grant date;

▪ 7,500 Sign-On Options shall vest on the second anniversary of the grant date;

▪ 7,500 Sign-On Options shall vest on the third anniversary of the grant date; and

▪ 7,500 Sign-On Options shall vest on the fourth anniversary of the grant date.

• Additional One-Time Equity Award. Executive shall receive 450,000 stock options to acquire Toys “R” Us, Inc. common stock with an exercise price per share equal to the June 2014 Valuation (the “Additional Options”). The Additional Options shall have a ten-year term and shall be subject to the following vesting conditions:

◦ Time Vesting Options. One half of the Additional Options (i.e., 225,000) shall vest over time as follows, provided that Executive remains employed on the applicable vesting date:

§ 56,250 Additional Options shall vest on the first anniversary of the grant date;

§ 56,250 Additional Options shall vest on the second anniversary of the grant date;

§ 56,250 Additional Options shall vest on the third anniversary of the grant date; and

§ 56,250 Additional Options shall vest on the fourth anniversary of the grant date.

◦ Time and Performance Vesting Options. One half of the Additional Options (i.e., 225,000) shall be subject to both time and performance vesting, and will only be deemed full vested when they have time vested and performance vested in accordance with the terms hereof.

§ 112,500 of the Additional Options will satisfy the performance-vesting contingency upon the occurrence, on or before the 10th anniversary of the grant date, of a Measurement Event (as defined below) in which the consideration received by the Sponsors reflects a price of Toys “R” Us, Inc. common stock of at least $26.75 per share.

§ An additional 112,500 of the Additional Options (i.e, a total of 225,000) will satisfy the performance-vesting contingency upon the occurrence, on or before the 10th anniversary of the grant date, of a Measurement Event in which the consideration received by the Sponsors reflects a price of Toys “R” Us, Inc. common stock of at least $33.50 per share.

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§ Of the Additional Options that meet the performance contingency, the time-vesting contingency will be met as follows, depending on Executive’s continued employment as of the applicable date:

• 25% shall time-vest on the first anniversary of the grant date;

• Another 25% shall time-vest on the second anniversary of the grant date at which time a total of 50% shall be time-vested;

• Another 25% shall time-vest on the third anniversary of the grant date at which time a total of 75% shall be time-vested; and

• The remaining 25% shall time-vest on the fourth anniversary of the grant date at which time a total of 100% shall be time-vested.

For example, if a Measurement Event occurred shortly after the first anniversary of the grant date in which the consideration received by the Sponsors reflected a price of Toys “R” Us, Inc. common stock of $30.00 per share, 112,500 Additional Options would meet the performance condition. If Executive then resigned between the second and third anniversaries of the grant date, he would have vested in 56,250 Additional Options (50% of the 112,500 that met the performance condition) and the remaining 168,750 Additional Options would be forfeited.

For purposes of these Options:

“Measurement Event” means (i) prior to an Initial Public Offering (as defined below) andon or before the 10th anniversary of the grant date, any transaction or series of related transactions which result in the KKR, Bain and Vornado (hereinafter collectively, the “Sponsors”) ceasing collectively to own securities which represent at least 50% of the total voting power or economic interest in Toys “R” Us, Inc., (ii) at any timeon or before the 10th anniversary of the grant date, any transaction or series of related transactions which result in an independent third party acquiring securities which represent more than 50% of the total voting power or economic interest in Toys “R” Us, Inc., (iii) at any time on or before the 10^th anniversary of the grant date, a sale or disposition of all or substantially all of the assets of Toys “R” Us, Inc. and its subsidiaries on a consolidated basis; provided that, in the case of clauses (i) and (ii) above, such transactions shall only constitute a Measurement Event if they result in the Sponsors ceasing to have the power (whether by ownership of voting securities, contractual right, or otherwise) collectively to elect a majority of the Board, and (iv) after an Initial Public Offering, any equity securities (including securities which are convertible into equity securities) held by the Sponsors which will be deemed to have been sold for a price per share equal to the weighted average (by dollar volume) of the closing trading price for each of the 90 consecutive trading days ending on such measurement date, and for purposes of calculating the target price points for the performance-vesting condition such sale will be deemed to occur on the first day of such 90 trading day period.

“Initial Public Offering” means an initial public offering, after the Commencement Date, of Toys “R” Us, Inc.’s common stock pursuant to an offering registered under the Securities Act of 1933 as amended from time to time, other than any such offerings which are registered on Forms S-4 or S-8.

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EXHIBIT C

SEPARATION AND RELEASE AGREEMENT

This Separation and Release Agreement (“Agreement”) is entered into as of this ___ day of __________________________, 20__, between TOYS “R” US, INC. and any successor thereto (collectively, the “Company”) and _______________ (the “Executive”).

The Executive and the Company agree as follows:

1.The employment relationship between the Executive and the Company and its subsidiaries and affiliates, as applicable, terminated on _________________________________ (the “Termination Date”).

2.In accordance with the Executive’s Employment Agreement, Executive is entitled to receive certain payments and benefits after the Termination Date.

3.In consideration of the above, the sufficiency of which the Executive hereby acknowledges, the Executive, on behalf of the Executive and the Executive’s heirs, executors and assigns, hereby releases and forever discharges the Company and its members, parents, affiliates, subsidiaries, divisions, any and all current and former directors, officers, employees, agents, and contractors and their heirs and assigns, and any and all employee pension benefit or welfare benefit plans of the Company, including current and former trustees and administrators of such employee pension benefit and welfare benefit plans, from all claims, charges, or demands, in law or in equity, whether known or unknown, which may have existed or which may now exist from the beginning of time to the date of this Agreement, including, without limitation, any claims the Executive may have arising from or relating to the Executive’s employment or termination from employment with the Company and its subsidiaries and affiliates, as applicable, including a release of any rights or claims the Executive may have under Title VII of the Civil Rights Act of 1964, as amended, and the Civil Rights Act of 1991 (which prohibit discrimination in employment based upon race, color, sex, religion, and national origin); the Americans with Disabilities Act of 1990, as amended, and the Rehabilitation Act of 1973 (which prohibit discrimination based upon disability); the Family and Medical Leave Act of 1993 (which prohibits discrimination based on requesting or taking a family or medical leave); Section 1981 of the Civil Rights Act of 1866 (which prohibits discrimination based upon race); Section 1985(3) of the Civil Rights Act of 1871 (which prohibits conspiracies to discriminate); the Employee Retirement Income Security Act of 1974, as amended (which prohibits discrimination with regard to benefits); any other federal, state or local laws against discrimination; or any other federal, state, or local statute, or common law relating to employment, wages, hours, or any other terms and conditions of employment. This includes a release by the Executive of any claims for wrongful discharge, breach of contract, torts or any other claims in any way related to the Executive’s employment with or resignation or termination from the Company and its subsidiaries and affiliates, as applicable. This release also includes a release of any claims for age discrimination under the Age Discrimination in Employment Act, as amended (“ADEA”). The ADEA requires that the Executive be advised to consult with an attorney before the Executive waives any claim under ADEA. In addition, the ADEA provides the Executive with at least 21

4

days to decide whether to waive claims under ADEA and seven days after the Executive signs the Agreement to revoke that waiver. This release does not release the Company from any obligations due to the Executive under the Executive’s Employment Agreement or under this Agreement, any rights Executive has to indemnification by the Company and any vested rights Executive has under the Company’s employee pension benefit and welfare benefit plans.

Additionally, in consideration of the foregoing, the Company agrees to release and forever discharge the Executive and the Executive’s heirs, executors and assigns from any claims, charges or demands, and/or causes of action whatsoever, in law or in equity, whether known or unknown, which may have existed or which may now exist from the beginning of time to the date of this Agreement, including, but not limited to, any claim, matter or action related to the Executive’s employment and/or affiliation with, or termination and separation from the Company and its subsidiaries and affiliates; provided that such release shall not release the Executive from any loan or advance by the Company or its subsidiaries or affiliates, as applicable, a breach of Executive’s fiduciary obligations under New Jersey state law or a breach under Section 8 or 9 of the Executive’s Employment Agreement.

4.This Agreement is not an admission by either the Executive or the Company or its subsidiaries or affiliates of any wrongdoing or liability.

5.The Executive waives any right to reinstatement or future employment with the Company and its subsidiaries and affiliates following the Executive’s separation from the Company and its subsidiaries and affiliates on the Termination Date.

6.As a material condition of this Agreement, Executive agrees not to engage in any act – direct, indirect, verbal, written, or otherwise – that does or may reasonably be expected to disparage or harm the reputation, name, business, prospects, or operations of the Company or its subsidiaries or affiliates or their respective officers, directors, stockholders or employees. The Company agrees that it will undertake reasonable efforts to ensure that the CEO and other members of the Company’s executive management team do not engage in any act which is intended, or may reasonably be expected to harm the reputation, business or prospects of the Executive.

7.The Executive shall continue to be bound by Sections 8 and 9 of the Executive’s Employment Agreement.

8.The Executive shall promptly return all Company and subsidiary and affiliate property in the Executive’s possession, including, but not limited to, Company or subsidiary or affiliate keys, credit cards, cellular phones, computer equipment, software and peripherals and originals or copies of books, records, or other information pertaining to the Company or subsidiary or affiliate business.

9.This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey, without reference to the principles of conflict of laws. Exclusive jurisdiction with respect to any legal proceeding brought concerning any subject matter

5

contained in this Agreement shall be settled by arbitration as provided in the Executive’s Employment Agreement.

10.This Agreement represents the complete agreement between the Executive and the Company concerning the subject matter in this Agreement and supersedes all prior agreements or understandings, written or oral. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

11.Each of the sections contained in this Agreement shall be enforceable independently of every other section in this Agreement, and the invalidity or unenforceability of any section shall not invalidate or render unenforceable any other section contained in this Agreement.

12.It is further understood that for a period of 7 days following the execution of this Agreement in duplicate originals, the Executive may revoke this Agreement, and this Agreement shall not become effective or enforceable until the revocation period has expired. No revocation of this Agreement by the Executive shall be effective unless the Company has received within the 7 day revocation period, written notice of any revocation, all monies received by the Executive under this Agreement and the Executive’s Employment Agreement and all originals and copies of this Agreement.

13.This Agreement has been entered into voluntarily and not as a result of coercion, duress, or undue influence. The Executive acknowledges that the Executive has read and fully understands the terms of this Agreement and has been advised to consult with an attorney before executing this Agreement. Additionally, the Executive acknowledges that the Executive has been afforded the opportunity of at least 21 days to consider this Agreement.

The parties to this Agreement have executed this Agreement as of the day and year first written above.

TOYS “R” US, INC.

By: _________________________

Name:

Title:

EXECUTIVE

____________________________

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EX-10.2

AMENDMENT NO. 2 TO THE

TOYS “R” US, INC.

2010 INCENTIVE PLAN

This Amendment No. 2 (this “Amendment”) to the Toys “R” Us, Inc. 2010 Incentive Plan, as previously amended effective as of November 14, 2013 (the “Plan”), shall become effective as of September 4, 2014. Capitalized terms used but not otherwise defined in this Amendment shall have the meaning given to such terms in the Plan.

1. The following definition of “2005 Plan” is added to the end of Section 2.1 of the Plan:

“(qq) ‘2005 Plan’ means the Company’s Amended and Restated 2005 Management Equity Plan, as last amended on March 12, 2013.”

2. The first sentence of Section 5.1 of the Plan is hereby deleted and replaced with the following:

“Subject to adjustment as provided in Sections 5.2 and 14.1, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the Plan shall be equal to the sum of the below clauses (i) through (iii):

(i) 3,750,000 Shares; plus

(ii) the number of Shares available for issuance under the 2005 Plan as of July 17, 2014; plus

(iii) any Shares that, after July 17, 2014, would otherwise have reverted back to the 2005 Plan and again become available for issuance under the 2005 Plan pursuant to Section 3.2 thereof.”

3. The following sentence is hereby added to the end of Section 3.2 of the Plan:

“The Plan will not in any way affect outstanding awards that were granted under the 2005 Plan and no new awards may be granted under the 2005 Plan as of July 17, 2014.”

4. Continuing Force and Effect. The Plan, as modified by the terms of this Amendment, shall continue in full force and effect from and after the date of the adoption of this Amendment set forth above.

I hereby certify that the foregoing Amendment was duly adopted by the Board of Directors of Toys “R” Us, Inc. as of July 17, 2014.

Executed on this 4^th day of September, 2014.

/s/ David J. Schwartz        

David J. Schwartz    

Corporate Secretary

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Antonio Urcelay, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Toys “R” Us, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 10, 2014

/s/ Antonio Urcelay

Antonio Urcelay

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael J. Short, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Toys “R” Us, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting, to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 10, 2014

/s/ Michael J. Short

Michael J. Short

Executive Vice President -

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant To 18 U.S.C. Section 1350 By The Chief Executive Officer,

As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002.

I, Antonio Urcelay, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of Toys “R” Us, Inc. (the “Company”) for the quarterly period ended August 2, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

September 10, 2014

/s/ Antonio Urcelay

Antonio Urcelay

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification Pursuant To 18 U.S.C. Section 1350 By The Chief Financial Officer,

As Adopted Pursuant To Section 906 Of The Sarbanes-Oxley Act Of 2002.

I, Michael J. Short, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of Toys “R” Us, Inc. (the “Company”) for the quarterly period ended August 2, 2014 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

September 10, 2014

/s/ Michael J. Short

Michael J. Short

Executive Vice President -

Chief Financial Officer

(Principal Financial Officer)

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Segments - Reconciliation of operating profit (loss) from Segments to Consolidated (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Segment Reporting Information [Line Items]
Net sales	$ 2,440	$ 2,377	$ 4,919	$ 4,785
Operating earnings (loss)	(42)	(46)	(133)	(119)
Interest expense	(102)	(116)	(210)	(230)
Interest income	1	1	2	4
Loss before income taxes	(143)	(161)	(341)	(345)
Toys R Us - Domestic
Segment Reporting Information [Line Items]
Net sales	1,460	1,450	2,999	2,930
Operating earnings (loss)	20	45	36	85
Toys R Us - International
Segment Reporting Information [Line Items]
Net sales	980	927	1,920	1,855
Operating earnings (loss)	28	14	9	(14)
Corporate and Other
Segment Reporting Information [Line Items]
Operating earnings (loss)	$ (90)	$ (105)	$ (178)	$ (190)

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Fair value measurements - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) (Recurring, USD $) In Millions, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013
Assets
Cash equivalents	$ 111	$ 164	$ 178
Derivative financial instruments:
Interest rate contracts	9	13	15
Foreign exchange contracts	3	0	3
Total assets	123	177	196
Derivative financial instruments:
Interest rate contracts	1	1	1
Foreign exchange contracts	1	0	1
Total liabilities	2	1	2
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)
Assets
Cash equivalents	111	164	178
Derivative financial instruments:
Interest rate contracts	0	0	0
Foreign exchange contracts	0	0	0
Total assets	111	164	178
Derivative financial instruments:
Interest rate contracts	0	0	0
Foreign exchange contracts	0	0	0
Total liabilities	0	0	0
Significant Other Observable Inputs (Level 2)
Assets
Cash equivalents	0	0	0
Derivative financial instruments:
Interest rate contracts	9	13	15
Foreign exchange contracts	3	0	3
Total assets	12	13	18
Derivative financial instruments:
Interest rate contracts	1	1	1
Foreign exchange contracts	1	0	1
Total liabilities	2	1	2
Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	0	0	0
Derivative financial instruments:
Interest rate contracts	0	0	0
Foreign exchange contracts	0	0	0
Total assets	0	0	0
Derivative financial instruments:
Interest rate contracts	0	0	0
Foreign exchange contracts	0	0	0
Total liabilities	$ 0	$ 0	$ 0

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Accumulated other comprehensive loss (Tables)

6 Months Ended

Aug. 02, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated other comprehensive loss is reflected in Total stockholders’ (deficit) equity on the Condensed Consolidated Balance Sheets, as follows:

(In millions)	Foreign currency translation adjustments, net of tax			Unrealized loss on hedged transactions, net of tax			Unrecognized actuarial losses, net of tax			Accumulated other comprehensive loss
Balance, February 2, 2013	$	8		$	(2	)	$	(9	)	$	(3	)
Current period change	(46		)	—			—			(46		)
Balance, May 4, 2013	(38		)	(2		)	(9		)	(49		)
Current period change	(10		)	—			—			(10		)
Balance, August 3, 2013	$	(48	)	$	(2	)	$	(9	)	$	(59	)
(In millions)	Foreign currency translation adjustments, net of tax			Unrealized loss on hedged transactions, net of tax			Unrecognized actuarial losses, net of tax			Accumulated other comprehensive loss
Balance, February 1, 2014	$	(74	)	$	(1	)	$	(9	)	$	(84	)
Current period change	22			—			—			22
Balance, May 3, 2014	$	(52	)	$	(1	)	$	(9	)	$	(62	)
Current period change	(21		)	—			—			(21		)
Balance, August 2, 2014	$	(73	)	$	(1	)	$	(9	)	$	(83	)

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Dispositions - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Aug. 02, 2014	Aug. 02, 2014	Aug. 03, 2013
Discontinued Operations and Disposal Groups [Abstract]
Proceeds from sales of fixed assets	$ 6	$ 9	$ 23
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal	$ 3	$ 3

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Segments - Narrative (Details)	Aug. 02, 2014 states
Toys R Us - Domestic
Segment Reporting Information [Line Items]
Number of states in reportable segment which provide toy and juvenile products	49
Toys R Us - International
Segment Reporting Information [Line Items]
Number of countries in which reportable segment operates or licenses R Us branded retail stores	35

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Short-term borrowings and long-term debt

6 Months Ended

Aug. 02, 2014

Debt Disclosure [Abstract]

Short-term Borrowings and Long-term debt

Short-term borrowings and long-term debt

A summary of the Company’s consolidated Short-term borrowings and Long-term debt as of August 2, 2014, February 1, 2014 and August 3, 2013 is outlined in the table below:

(In millions)	August 2, 2014		February 1, 2014		August 3, 2013
Short-term borrowings
Labuan uncommitted lines of credit	$	12	$	12	$	17
Long-term debt
Spanish real estate credit facility, due fiscal 2015	66		71		96
Toys-Japan unsecured credit lines, expire fiscals 2015-2016 (1)	111		5		120
European and Australian asset-based revolving credit facility, expires fiscal 2016	61		—		39
Secured term loan facility, due fiscal 2016 (2)	643		646		649
7.375% senior secured notes, due fiscal 2016 (2)	355		357		358
10.750% senior notes, due fiscal 2017 (3)	—		—		935
10.375% senior notes, due fiscal 2017 (4)	447		447		446
8.500% senior secured notes, due fiscal 2017 (5)	720		719		719
French real estate credit facility, due fiscal 2018	63		64		63
Incremental secured term loan facility, due fiscal 2018 (2)	371		372		374
Second incremental secured term loan facility, due fiscal 2018 (2)	209		210		210
7.375% senior notes, due fiscal 2018 (4)	403		403		403
Secured revolving credit facility, expires fiscal 2019 (2)(6)	250		—		128
Senior unsecured term loan facility, due fiscal 2019 (3)	969		973		—
UK real estate credit facility, due fiscal 2020	443		433		402
Toys-Japan 1.85%-2.85% loans, due fiscals 2014-2021	86		91		115
8.750% debentures, due fiscal 2021 (7)	22		22		22
Finance obligations associated with capital projects	175		174		175
Capital lease obligations	18		20		28
	5,412		5,007		5,282
Less current portion	165		89		149
Total Long-term debt (8)	$	5,247	$	4,918	$	5,133

(1) Toys “R” Us - Japan, Ltd. (“Toys-Japan”) currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit (“Tranche 1” due fiscal 2015 and “Tranche 2” due fiscal 2016). On July 15, 2014, Toys-Japan entered into an agreement to refinance Tranche 2 of its committed lines of credit.

(2) Represents obligations of Toys “R” Us-Delaware, Inc. (“Toys-Delaware”).

(3) Represents obligations of Toys “R” Us Property Company I, LLC and its subsidiaries (“TRU Propco I”).

(4) Represents obligations of Toys “R” Us, Inc. (the “Parent Company”).

(5) Represents obligations of Toys “R” Us Property Company II, LLC (“TRU Propco II”).

(6) On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its $1.85 billion secured revolving credit facility (“ABL Facility”) in order to extend the maturity date of the facility and amend certain other provisions.

(7) Represents obligations of the Parent Company and Toys-Delaware.

(8) We maintain derivative instruments on certain of our long-term debt, which impact our effective interest rates. Refer to Note 3 entitled “Derivative instruments and hedging activities” for further details.

Toys “R” Us, Inc. is a holding company and conducts its operations through its subsidiaries, certain of which have incurred their own indebtedness. Our credit facilities, loan agreements and indentures contain customary covenants, including, among other things, covenants that restrict our ability to:

• incur certain additional indebtedness;

• transfer money between the Parent Company and our various subsidiaries;

• pay dividends on, repurchase or make distributions with respect to our or our subsidiaries’ capital stock or make other restricted payments;

• issue stock of subsidiaries;

• make certain investments, loans or advances;

• transfer and sell certain assets;

• create or permit liens on assets;

• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

• enter into certain transactions with our affiliates; and

• amend certain documents.

The amount of total net assets that were subject to such restrictions was $638 million as of August 2, 2014. Our agreements also contain various and customary events of default with respect to the indebtedness, including, without limitation, the failure to pay interest or principal when the same is due under the agreements, cross default and cross acceleration provisions, the failure of representations and warranties contained in the agreements to be true and certain insolvency events. If an event of default occurs and is continuing, the principal amounts outstanding thereunder, together with all accrued and unpaid interest and other amounts owed thereunder, may be declared immediately due and payable by the lenders.

We are dependent on the borrowings provided by the lenders to support our working capital needs, capital expenditures and to service debt. As of August 2, 2014, we have funds available to finance our operations under our ABL Facility through March 2019, subject to an earlier springing maturity, our European and Australian asset-based revolving credit facility (“European ABL Facility”) through March 2016 and our Toys-Japan unsecured credit lines with a tranche maturing June 2015 and a tranche maturing June 2016. In addition, Toys (Labuan) Holding Limited (“Labuan”) and Toys-Japan have uncommitted lines of credit due on demand.

The total fair values of our Long-term debt, with carrying values of $5.4 billion, $5.0 billion and $5.3 billion at August 2, 2014, February 1, 2014 and August 3, 2013, respectively, were $5.1 billion, $4.6 billion and $5.4 billion, respectively. The fair values of our Long-term debt are estimated using the quoted market prices for the same or similar issues and other pertinent information available to management as of the end of the respective periods. A portion of these instruments are classified as Level 3, as these are not publicly traded and therefore we are unable to obtain quoted market prices. The fair value of these Level 3 debt instruments totaled $1.3 billion, $0.8 billion and $1.2 billion at August 2, 2014, February 1, 2014 and August 3, 2013, respectively.

Labuan uncommitted lines of credit, due on demand ($12 million at August 2, 2014)

Labuan has several uncommitted unsecured lines of credit with various financial institutions with total availability of HK$302 million ($39 million at August 2, 2014). As of August 2, 2014, we had $12 million of borrowings, which has been included in Accrued expenses and other current liabilities on our Condensed Consolidated Balance Sheet, and $3 million of bank guarantees issued under these facilities. The remaining availability under these facilities was $24 million. The average interest rate on the drawn borrowings was 2.39% and 2.27% at August 2, 2014 and August 3, 2013, respectively.

Toys-Japan unsecured credit lines, expire fiscals 2015-2016 ($111 million at August 2, 2014)

Toys-Japan currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit. Tranche 1 is available in amounts up to ¥13.0 billion ($127 million at August 2, 2014), expiring on June 30, 2015, and bears an interest rate of Tokyo Interbank Offered Rate (“TIBOR”) plus 0.80% per annum. At August 2, 2014, we had outstanding borrowings of $77 million under Tranche 1, with $50 million of remaining availability.

On July 15, 2014, Toys-Japan entered into an agreement with a syndicate of financial institutions to refinance Tranche 2. As a result, Tranche 2 is available in amounts up to ¥3.5 billion ($34 million at August 2, 2014), expiring on June 30, 2016, and bears an interest rate of TIBOR plus 0.80% per annum. We paid fees of $1 million to refinance Tranche 2, which are capitalized as deferred debt issuance costs and amortized over the term of the agreement. At August 2, 2014, we had outstanding borrowings of $34 million under Tranche 2, with no remaining availability.

These agreements contain covenants that require, among other things, Toys-Japan to maintain a certain level of net assets and profitability during the agreement terms, including provisions that require Toys-Japan to not incur two consecutive years of ordinary loss in accordance with accounting principles generally accepted in Japan, as defined in the credit agreement. The agreement also restricts Toys-Japan from paying dividends or making loans to affiliates without lender consent.

Additionally on July 15, 2014, Toys-Japan amended its uncommitted line of credit resulting in total availability of ¥1.5 billion ($15 million at August 2, 2014), which will renew August 1 of each year unless otherwise canceled. The uncommitted line of credit bears an interest rate of TIBOR plus 0.50%. As of August 2, 2014, we had no outstanding borrowings under the uncommitted line of credit.

European ABL Facility, expires fiscal 2016 ($61 million at August 2, 2014)

The European ABL Facility, as amended, provides for a five-year £138 million ($232 million at August 2, 2014) asset-based senior secured revolving credit facility which will expire on March 8, 2016. At August 2, 2014, we had outstanding borrowings of $61 million, with $70 million of remaining availability under the European ABL Facility.

$1.85 billion ABL Facility, expires fiscal 2019 ($250 million at August 2, 2014)

On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its ABL Facility in order to extend the maturity date of the facility and amend certain other provisions. The ABL Facility as amended will continue to provide for $1.85 billion of revolving commitments, and permits Toys-Delaware to request an increase in commitments by up to $1.15 billion, subject to certain conditions, including obtaining new or increased commitments from new or existing lenders. The ABL Facility has a final maturity date of March 21, 2019, with a springing maturity date if the Toys-Delaware term loans due fiscal 2016 and fiscal 2018 and the Toys-Delaware secured notes due fiscal 2016 are not repaid 30 days prior to maturity. The ABL Facility as amended bears a tiered floating interest rate of London Interbank Offered Rate (“LIBOR”) plus a margin of between 1.50% and 1.75% depending on usage (or, at the election of the borrower, a tiered floating interest rate based on the agent’s prime rate plus a margin of between 0.50% and 0.75% depending on usage). A commitment fee is payable on the undrawn portion of the ABL Facility in an amount equal to 0.25% per annum of the average daily balance of unused commitments during each calendar quarter. In connection with the amended and restated credit agreement, we incurred transaction fees of $31 million, which are capitalized as deferred debt issuance costs, amortized over the term of the agreement and included in Other assets on our Condensed Consolidated Balance Sheet. Prior to the amended ABL Facility, unamortized debt issuance costs were $17 million, of which $1 million has been expensed, and the remaining $16 million amortized over the term of the amended and restated credit agreement.

The ABL facility will continue to be available for general corporate purposes and the issuance of letters of credit. Borrowings under this credit facility are secured by tangible and intangible assets of Toys-Delaware and certain of its subsidiaries, subject to specific exclusions stated in the credit agreement. The credit agreement contains covenants that, among other things, restrict Toys-Delaware’s ability to incur certain additional indebtedness, create or permit liens on assets, engage in mergers or consolidations, make investments, loans or advances, sell or transfer assets, pay dividends or distributions, repurchase capital stock or make other restricted payments, repay or prepay certain debt, engage in transactions with affiliates, amend material documents and change fiscal year. The ABL Facility, as amended pursuant to the amended and restated credit agreement, requires Toys-Delaware to maintain excess availability at all times of no less than $125 million and to sweep cash toward prepayment of the loans if excess availability falls below $150 million for any three days in a 30-day period (or if certain specified defaults are continuing or if excess availability falls below $130 million at any time). Availability is determined pursuant to a borrowing base, consisting of specified percentages of eligible inventory and eligible credit card receivables and certain real estate less any applicable availability reserves.

At August 2, 2014, under our ABL Facility we had outstanding borrowings of $250 million, a total of $92 million of outstanding letters of credit and excess availability of $828 million. We are also subject to a minimum excess availability covenant, which was $125 million at August 2, 2014, with remaining availability of $703 million in excess of the covenant.

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Stock-based compensation (Details) (Employee Stock Option [Member])	6 Months Ended
	Aug. 02, 2014
2005 Management Equity Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exchange Ratio	1
2010 Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exchange Ratio	1
2010 Incentive Plan [Member] | 2005 to 2012 [Member] | Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Vesting Percentage	50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
2010 Incentive Plan [Member] | 2005 to 2012 [Member] | Tranches Two and Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Vesting Percentage	25.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	2 years
2010 Incentive Plan [Member] | 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years

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Derivative instruments and hedging activities - Net impact of the effective portion of derivatives designated as cash flow hedges on Accumulated other comprehensive income (loss) (Details) (USD $) In Millions, unless otherwise specified							6 Months Ended
	Aug. 02, 2014	May 03, 2014	Feb. 01, 2014	Aug. 03, 2013	May 04, 2013	Feb. 02, 2013	Aug. 02, 2014 Interest Rate Contract Cash Flow Hedging		Aug. 03, 2013 Interest Rate Contract Cash Flow Hedging
Derivatives designated as cash flow hedges:
Beginning balance	$ (1)	$ (1)	$ (1)	$ (2)	$ (2)	$ (2)	$ (1)		$ (2)
Change in fair value recognized in Accumulated other comprehensive (loss) income - Interest Rate Contracts							0	[1]	0	[1]
Ending balance	$ (1)	$ (1)	$ (1)	$ (2)	$ (2)	$ (2)	$ (1)		$ (2)

[1] Reclassifications from Accumulated other comprehensive loss to Interest expense were nominal for the twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively.

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Derivative instruments and hedging activities - Narrative (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended			6 Months Ended	3 Months Ended	6 Months Ended
	Aug. 02, 2014 Foreign Exchange Contract	Aug. 03, 2013 Foreign Exchange Contract	Feb. 01, 2014 Foreign Exchange Contract Maximum	Aug. 02, 2014 Cash Flow Hedging Interest Rate Contract	Aug. 03, 2013 Fair Value Hedging Interest Rate Contract	Aug. 03, 2013 Fair Value Hedging Interest Rate Contract
Derivatives, Fair Value [Line Items]
Expected realized loss on trading securities				$ 2
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimate of Time to Transfer				12 months
Loss on Fair Value Hedge Ineffectiveness					2	1
Foreign exchange contracts maturity period	12 months
Fair value of derivative liabilites related to agreements that contain credit-risk related contingent features	$ 1	$ 1	$ 1

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Accumulated other comprehensive loss - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Aug. 02, 2014	May 03, 2014	Aug. 03, 2013	May 04, 2013	Aug. 02, 2014	Aug. 03, 2013	Feb. 01, 2014	Feb. 02, 2013
Accumulated other comprehensive (loss) income [Abstract]
Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax	$ (73)	$ (52)	$ (48)	$ (38)	$ (73)	$ (48)	$ (74)	$ 8
Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax	(1)	(1)	(2)	(2)	(1)	(2)	(1)	(2)
Accumulated Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net of Tax	(9)	(9)	(9)	(9)	(9)	(9)	(9)	(9)
Accumulated Other Comprehensive Income (Loss), Net of Tax	(83)	(62)	(59)	(49)	(83)	(59)	(84)	(3)
Foreign currency translation adjustments	(21)	22	(10)	(46)	1	(56)
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax	0	0	0	0
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax	0	0	0	0
Total other comprehensive loss, net of tax	$ (21)	$ 22	$ (10)	$ (46)	$ 1	$ (56)

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Derivative instruments and hedging activities - Impact of derivatives on interest expense (Details) (Interest Expense, USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Aug. 02, 2014		Aug. 03, 2013		Aug. 02, 2014		Aug. 03, 2013
Derivative designated as a fair value hedge:
Total Interest expense	$ (9)		$ 13		$ (18)		$ 8
Not Designated as Hedging Instrument
Derivative designated as a fair value hedge:
Total Interest expense	(8)		16		(17)		10
Not Designated as Hedging Instrument | Intercompany Loan
Derivatives not designated for hedge accounting:
(Loss) gain on the change in fair value	(8)	[1]	13	[1]	(15)	[1]	5	[1]
Not Designated as Hedging Instrument | Merchandise Purchases Program
Derivatives not designated for hedge accounting:
(Loss) gain on the change in fair value	1		3		(1)		5
Not Designated as Hedging Instrument | Interest Rate Contract
Derivatives not designated for hedge accounting:
Loss on the change in fair value - Interest Rate Contract	(1)		0		(1)		0
Derivative designated as a fair value hedge:
Loss on the change in fair value - Interest Rate Contract	(1)		0		(1)		0
Designated as Hedging Instrument [Member] | Cash Flow Hedging
Derivative designated as a fair value hedge:
Total Interest expense	(1)		(1)		(1)		(1)
Designated as Hedging Instrument [Member] | Fair Value Hedging
Derivative designated as a fair value hedge:
Gain recognized in Interest expense on hedged item	0		3		2		3
Total Interest expense	0		(2)		0		(1)
Designated as Hedging Instrument [Member] | Interest Rate Contract | Cash Flow Hedging
Derivatives designated as cash flow hedges:
Amortization of hedged caps	(1)		(1)		(1)		(1)
Designated as Hedging Instrument [Member] | Interest Rate Contract | Fair Value Hedging
Derivatives not designated for hedge accounting:
Loss on the change in fair value - Interest Rate Contract	0		(5)		(2)		(4)
Derivative designated as a fair value hedge:
Loss on the change in fair value - Interest Rate Contract	$ 0		$ (5)		$ (2)		$ (4)

[1] Gains and losses related to our short-term intercompany loan foreign exchange contracts are recorded in Interest expense, in addition to the corresponding foreign exchange gains and losses related to our short-term, cross-currency intercompany loans.

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Derivative instruments and hedging activities - Notional amounts and fair values of derivatives (Details) (USD $) In Millions, unless otherwise specified	Aug. 02, 2014		Feb. 01, 2014		Aug. 03, 2013
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	$ 3,051	[1]	$ 2,822	[1]	$ 3,105	[1]
Fair Value, Assets	12	[1]	13	[1]	18	[1]
Notional Amount, Liabilities	142	[1]	143	[1]	226	[1]
Fair Value, Liabilities	(2)	[1]	(1)	[1]	(2)	[1]
Prepaid expenses and other current assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	2,572		26		285
Fair Value, Assets	3		0		3
Other assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	479		2,796		2,820
Fair Value, Assets	9		13		15
Other non-current liabilities
Derivative instruments and hedging activities [Line Items]
Notional Amount, Liabilities	64		65		83
Fair Value, Liabilities	(1)		(1)		(1)
Accrued expenses and other current liabilities
Derivative instruments and hedging activities [Line Items]
Notional Amount, Liabilities	78		78		143
Fair Value, Liabilities	(1)		0		(1)
Not Designated as Hedging Instrument | Interest Rate Contract | Prepaid expenses and other current assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	1,611		0		0
Fair Value, Assets	0		0		0
Not Designated as Hedging Instrument | Interest Rate Contract | Other assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	350		1,611		1,611
Fair Value, Assets	9		0		0
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid expenses and other current assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	261		26		285
Fair Value, Assets	3		0		3
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued expenses and other current liabilities
Derivative instruments and hedging activities [Line Items]
Notional Amount, Liabilities	78		78		143
Fair Value, Liabilities	(1)		0		(1)
Cash Flow Hedging | Designated as Hedging Instrument [Member] | Interest Rate Contract | Prepaid expenses and other current assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	700		0		0
Fair Value, Assets	0		0		0
Cash Flow Hedging | Designated as Hedging Instrument [Member] | Interest Rate Contract | Other assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	129		835		859
Fair Value, Assets	0		0		1
Cash Flow Hedging | Designated as Hedging Instrument [Member] | Interest Rate Contract | Other non-current liabilities
Derivative instruments and hedging activities [Line Items]
Notional Amount, Liabilities	64		65		83
Fair Value, Liabilities	(1)		(1)		(1)
Fair Value Hedging | Designated as Hedging Instrument [Member] | Interest Rate Contract | Other assets
Derivative instruments and hedging activities [Line Items]
Notional Amount, Assets	0		350		350
Fair Value, Assets	$ 0		$ 13		$ 14

[1] Refer to Note 4 entitled “Fair value measurements” for the fair value of our derivative instruments classified within the fair value hierarchy.

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Basis of presentation

6 Months Ended

Aug. 02, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation

Basis of presentation

As used herein, the “Company,” “we,” “us,” or “our” means Toys “R” Us, Inc., and its consolidated subsidiaries, except as expressly indicated or unless the context otherwise requires. The Condensed Consolidated Balance Sheets as of August 2, 2014, February 1, 2014 and August 3, 2013, the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Loss for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013 and the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the twenty-six weeks ended August 2, 2014 and August 3, 2013, have been prepared by us in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting, and in accordance with the requirements of this Quarterly Report on Form 10-Q. Our interim Condensed Consolidated Financial Statements are unaudited and are subject to year-end adjustments. In the opinion of management, the financial statements include all known adjustments (which consist primarily of normal, recurring accruals, estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations for the thirteen and twenty-six weeks then ended. The Condensed Consolidated Balance Sheet at February 1, 2014, presented herein, has been derived from our audited balance sheet included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2014, but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included within our Annual Report on Form 10-K for the fiscal year ended February 1, 2014. The results of operations for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013 are not necessarily indicative of operating results for the full year.

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Fair value measurements - Narrative (Details)	6 Months Ended
	Aug. 02, 2014
Fair Value Disclosures [Abstract]
Cash Equivalents, Original Maturity	3 months

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Segments - Summary of Total Merchandise Inventories (Details) (USD $) In Millions, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013
Segment Reporting Information [Line Items]
Merchandise inventories	$ 2,344	$ 2,171	$ 2,353
Toys R Us - Domestic
Segment Reporting Information [Line Items]
Merchandise inventories	1,442	1,375	1,459
Toys R Us - International
Segment Reporting Information [Line Items]
Merchandise inventories	$ 902	$ 796	$ 894

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Millions, unless otherwise specified	Aug. 02, 2014		Feb. 01, 2014		Aug. 03, 2013
ASSETS
Cash and cash equivalents	$ 353		$ 644		$ 464
Accounts and other receivables	245		249		341
Merchandise inventories	2,344		2,171		2,353
Current deferred tax assets	22		31		102
Prepaid expenses and other current assets	164		125		163
Total current assets	3,128		3,220		3,423
Property and equipment, net	3,514		3,638		3,740
Goodwill	64		64		443
Deferred tax assets	153		152		233
Restricted cash	55		53		44
Other assets	416		422		430
Total Assets	7,330		7,549		8,313
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ (DEFICIT) EQUITY
Accounts payable	1,228		1,488		1,235
Accrued expenses and other current liabilities	903		920		811
Income taxes payable	24		19		29
Current portion of long-term debt	165		89		149
Total current liabilities	2,320		2,516		2,224
Long-term debt	5,247	[1]	4,918	[1]	5,133	[1]
Deferred tax liabilities	88		96		123
Deferred rent liabilities	359		362		356
Other non-current liabilities	229		235		226
Temporary equity	83		78		72
Total stockholders’ (deficit) equity	(996)		(656)		179
Total Liabilities, Temporary Equity and Stockholders’ (Deficit) Equity	$ 7,330		$ 7,549		$ 8,313

[1] We maintain derivative instruments on certain of our long-term debt, which impact our effective interest rates. Refer to Note 3 entitled “Derivative instruments and hedging activities” for further details.

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Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (USD $) In Millions		Total USD ($)	Common Stock Issued Shares	Common Stock Treasury Amount USD ($)		Additional Paid-in Capital USD ($)	Total Retained Earnings USD ($)	Accumulated Other Comprehensive Income (Loss) USD ($)
Balance at Feb. 02, 2013		$ 485		$ (4)	[1]	$ 47	$ 445	$ (3)
Balance (shares) at Feb. 02, 2013	[1]		49
Net loss attributable to Toys R Us, Inc.		(224)					(224)
Total other comprehensive income, net of tax		(56)						(56)
Restricted stock forfeitures				(1)		1
Repurchase of common stock		36		36
Issuance of common stock		27		34		(7)
Stock compensation expense		6				6
Redemption value of redeemable shares to temporary equity		(12)				(12)
Adjustment of noncontrolling interest to redemption value		(11)					(11)
Balance at Aug. 03, 2013		179		(7)	[1]	35	210	(59)
Balance (shares) at Aug. 03, 2013	[1]		49
Balance at Feb. 01, 2014		(656)		(9)	[1]	49	(612)	(84)
Balance (shares) at Feb. 01, 2014	[1]		49
Net loss attributable to Toys R Us, Inc.		(344)					(344)
Total other comprehensive income, net of tax		1						1
Stock compensation expense		8				8
Adjustment of noncontrolling interest to redemption value		(10)					(10)
Issuance of restricted stock				2		(2)
Adjustment of redeemable shares to redemption value		5				5
Balance at Aug. 02, 2014		$ (996)		$ (7)	[1]	$ 60	$ (966)	$ (83)
Balance (shares) at Aug. 02, 2014	[1]		49

[1] For all periods presented, the par value amount of Common Stock issued is less than $1 million. The number of Common Stock shares in treasury is also less than 1 million.

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Income taxes - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended	6 Months Ended
	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Income Tax Disclosure [Abstract]
Forecasted annualized effective tax rate		(0.50%)	37.10%
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability	$ 5		$ 5
Current State and Local Tax Expense (Benefit)			1
Income Tax Expense (Benefit), Adjustments to Taxes Receivable (Payable)			$ 2

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Fair value measurements (Tables)

6 Months Ended

Aug. 02, 2014

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The table below presents our assets and liabilities measured at fair value on a recurring basis as of August 2, 2014, February 1, 2014 and August 3, 2013, aggregated by level in the fair value hierarchy within which those measurements fall.

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at August 2, 2014
Assets
Cash equivalents	$	111	$	—	$	—	$	111
Derivative financial instruments:
Interest rate contracts	—		9		—		9
Foreign exchange contracts	—		3		—		3
Total assets	$	111	$	12	$	—	$	123
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		1		—		1
Total liabilities	$	—	$	2	$	—	$	2

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at February 1, 2014
Assets
Cash equivalents	$	164	$	—	$	—	$	164
Derivative financial instruments:
Interest rate contracts	—		13		—		13
Foreign exchange contracts	—		—		—		—
Total assets	$	164	$	13	$	—	$	177
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		—		—		—
Total liabilities	$	—	$	1	$	—	$	1

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at August 3, 2013
Assets
Cash equivalents	$	178	$	—	$	—	$	178
Derivative financial instruments:
Interest rate contracts	—		15		—		15
Foreign exchange contracts	—		3		—		3
Total assets	$	178	$	18	$	—	$	196
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		1		—		1
Total liabilities	$	—	$	2	$	—	$	2

Schedule of Fair Value Measurements, Nonrecurring

The table below presents our long-lived assets evaluated for impairment measured at fair value on a nonrecurring basis for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, aggregated by level in the fair value hierarchy within which those measurements fall. Because these assets are not measured at fair value on a recurring basis, certain carrying amounts and fair value measurements presented in the table may reflect values at earlier measurement dates and may no longer represent their fair values at August 2, 2014 and August 3, 2013. As of August 2, 2014 and August 3, 2013, we did not have any long-lived assets classified as Level 1 within the fair value hierarchy.

(In millions)	Carrying Value Prior to Impairment		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Losses
Long-lived assets held and used	$	4	$	—	$	1	$	3
Balance, May 3, 2014	4		—		1		3
Long-lived assets held and used	8		4		—		4
Balance, August 2, 2014	$	12	$	4	$	1	$	7

(In millions)	Carrying Value Prior to Impairment		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Losses
Long-lived assets held and used	$	9	$	6	$	1	$	2
Balance, May 4, 2013	9		6		1		2
Long-lived assets held and used	5		4		—		1
Balance, August 3, 2013	$	14	$	10	$	1	$	3

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Income taxes - Summary of Income Tax Benefit and Effective Tax Rates (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Income Tax Disclosure [Abstract]
Loss before income taxes	$ (143)	$ (161)	$ (341)	$ (345)
Income tax expense (benefit)	$ (4)	$ 48	$ (2)	$ 121
Effective tax rate	(2.7972%)	29.81366%	(0.58651%)	35.07246%

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Segments (Tables)

6 Months Ended

Aug. 02, 2014

Segment Reporting [Abstract]

Percentages of consolidated Net sales by product category

The following tables show our percentage of Net sales by product category:

	13 Weeks Ended				26 Weeks Ended
Domestic:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	47.6	%	48.6	%	48.8	%	49.9	%
Core Toy	13.2	%	11.9	%	12.6	%	11.8	%
Entertainment	6.3	%	5.7	%	7.1	%	6.5	%
Learning	17.6	%	16.8	%	17.5	%	16.6	%
Seasonal	15.0	%	15.3	%	13.7	%	14.1	%
Other (1)	0.3	%	1.7	%	0.3	%	1.1	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of non-product related revenues.

	13 Weeks Ended				26 Weeks Ended
International:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	25.0	%	26.4	%	26.0	%	26.6	%
Core Toy	19.7	%	19.0	%	19.6	%	19.2	%
Entertainment	7.1	%	7.1	%	7.3	%	8.1	%
Learning	25.8	%	25.1	%	26.1	%	25.7	%
Seasonal	21.5	%	21.5	%	20.1	%	19.5	%
Other (1)	0.9	%	0.9	%	0.9	%	0.9	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of licensing fees from unaffiliated third parties and other non-product related revenues.

From time to time, we may make revisions to our prior period Net sales by product category to conform to the current period allocation. These revisions did not have a significant impact to our prior year disclosure.

Reconciliation Schedule of Operating Profit (Loss) from Segments to Consolidated

A summary of financial results by reportable segment is as follows:

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Net sales
Domestic	$	1,460		$	1,450		$	2,999		$	2,930
International	980			927			1,920			1,855
Total Net sales	$	2,440		$	2,377		$	4,919		$	4,785
Operating earnings (loss)
Domestic	$	20		$	45		$	36		$	85
International	28			14			9			(14		)
Corporate and other	(90		)	(105		)	(178		)	(190		)
Operating loss	(42		)	(46		)	(133		)	(119		)
Interest expense	(102		)	(116		)	(210		)	(230		)
Interest income	1			1			2			4
Loss before income taxes	$	(143	)	$	(161	)	$	(341	)	$	(345	)

Summary Schedule of Merchandise Inventories by Segment

(In millions)	August 2, 2014		February 1, 2014		August 3, 2013
Merchandise inventories
Domestic	$	1,442	$	1,375	$	1,459
International	902		796		894
Total Merchandise inventories	$	2,344	$	2,171	$	2,353

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Condensed Consolidated Statements of Stockholders' Equity (Footnote) (Maximum, USD $) In Millions, unless otherwise specified	Aug. 02, 2014	Feb. 01, 2014	Aug. 03, 2013	Feb. 02, 2013
Maximum
Par value amount of Common Stock issued (dollars)	$ 1	$ 1	$ 1	$ 1
Number of Common Stock shares in treasury (shares)	1	1	1	1

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Income Statement [Abstract]
Net sales	$ 2,440	$ 2,377	$ 4,919	$ 4,785
Cost of sales	1,524	1,457	3,085	2,965
Gross margin	916	920	1,834	1,820
Selling, general and administrative expenses	878	890	1,795	1,776
Depreciation and amortization	95	95	199	195
Other income, net	(15)	(19)	(27)	(32)
Total operating expenses	958	966	1,967	1,939
Operating loss	(42)	(46)	(133)	(119)
Interest expense	(102)	(116)	(210)	(230)
Interest income	1	1	2	4
Loss before income taxes	(143)	(161)	(341)	(345)
Income tax expense (benefit)	(4)	48	(2)	121
Net loss	(147)	(113)	(343)	(224)
Less: Net earnings attributable to noncontrolling interest	1	0	1	0
Net loss attributable to Toys “R” Us, Inc.	$ (148)	$ (113)	$ (344)	$ (224)

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Stock-based compensation (Notes)

6 Months Ended

Aug. 02, 2014

Stock-based compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-based compensation

Award Exchange

Commencing in September 2014, certain employees were offered an opportunity to exchange certain of their outstanding stock options that were granted prior to fiscal 2014 (“Old Options”) under the Company’s Amended and Restated 2005 Management Equity Plan, as amended (the “Management Equity Plan”), or the Company’s 2010 Incentive Plan, as amended (the “2010 Incentive Plan”), for new stock options granted under the 2010 Incentive Plan (“New Options”) on a one-for-one basis. The New Options will have an exercise price equal to the most recent determination of fair market value of a share of the Company’s common stock at the time of the commencement of the exchange offer as determined by the Board of Directors of the Company and will vest as follows: (i) New Options granted in exchange for Old Options originally granted during the period commencing on January 1, 2005 and ending on December 31, 2012 will vest 50% on the award exchange date and 25% on each of the first and second anniversaries of the award exchange date and (ii) New Options granted in exchange for Old Options originally granted in 2013 will vest in equal annual installments over the subsequent four years from the anniversary of the award exchange date. Management is currently evaluating the impact of the award exchange and does not expect the exchange to have a material impact on our Condensed Consolidated Financial Statements.

Amendment to the 2010 Incentive Plan

Effective September 2014, we adopted Amendment No. 2 (“Amendment No. 2”) to the 2010 Incentive Plan. This amendment provides that no further awards would be granted under the Management Equity Plan and the number of shares of common stock of the Company available for issuance under the 2010 Incentive Plan was increased by the number of shares available for issuance under the Management Equity Plan as of July 17, 2014 and any shares that after July 17, 2014 would have otherwise been available for issuance thereunder. This amendment did not have an impact on our Condensed Consolidated Financial Statements.

Refer to Item 5 entitled “OTHER INFORMATION” for further details.

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Document and Entity Information	6 Months Ended
	Aug. 02, 2014	Sep. 03, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	TOYS R US INC
Entity Central Index Key	0001005414
Current Fiscal Year End Date	--01-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Aug. 02, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		49,093,117

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Accumulated other comprehensive loss (Notes)

6 Months Ended

Aug. 02, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Total other comprehensive loss is included in the Condensed Consolidated Statements of Comprehensive Loss and Condensed Consolidated Statements of Stockholders’ (Deficit) Equity. Accumulated other comprehensive loss is reflected in Total stockholders’ (deficit) equity on the Condensed Consolidated Balance Sheets, as follows:

(In millions)	Foreign currency translation adjustments, net of tax			Unrealized loss on hedged transactions, net of tax			Unrecognized actuarial losses, net of tax			Accumulated other comprehensive loss
Balance, February 2, 2013	$	8		$	(2	)	$	(9	)	$	(3	)
Current period change	(46		)	—			—			(46		)
Balance, May 4, 2013	(38		)	(2		)	(9		)	(49		)
Current period change	(10		)	—			—			(10		)
Balance, August 3, 2013	$	(48	)	$	(2	)	$	(9	)	$	(59	)
(In millions)	Foreign currency translation adjustments, net of tax			Unrealized loss on hedged transactions, net of tax			Unrecognized actuarial losses, net of tax			Accumulated other comprehensive loss
Balance, February 1, 2014	$	(74	)	$	(1	)	$	(9	)	$	(84	)
Current period change	22			—			—			22
Balance, May 3, 2014	$	(52	)	$	(1	)	$	(9	)	$	(62	)
Current period change	(21		)	—			—			(21		)
Balance, August 2, 2014	$	(73	)	$	(1	)	$	(9	)	$	(83	)

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Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Aug. 02, 2014	Aug. 03, 2013
Statement of Comprehensive Income [Abstract]
Net loss	$ (147)	$ (113)	$ (343)	$ (224)
Other comprehensive loss, net of tax
Foreign currency translation adjustments	(21)	(10)	1	(56)
Total other comprehensive loss, net of tax	(21)	(10)	1	(56)
Comprehensive loss, net of tax	(168)	(123)	(342)	(280)
Less: Comprehensive income attributable to noncontrolling interest	1	0	1	0
Comprehensive loss attributable to Toys R Us, Inc.	$ (169)	$ (123)	$ (343)	$ (280)

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Income taxes

6 Months Ended

Aug. 02, 2014

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

The following table summarizes our income tax expense (benefit) and effective tax rates for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
($ In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Loss before income taxes	$	(143	)	$	(161	)	$	(341	)	$	(345	)
Income tax expense (benefit)	4			(48		)	2			(121		)
Effective tax rate	(2.8		)%	29.8		%	(0.6		)%	35.1		%

The effective tax rates for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013 were based on our forecasted annualized effective tax rates, adjusted for discrete items that occurred within the periods presented. Our forecasted annualized effective tax rate is (0.5)% for the twenty-six weeks ended August 2, 2014 compared to 37.1% for the same period last year. The difference between our forecasted annualized effective tax rates is primarily due to our not being able to take a benefit for current year losses in the US and certain foreign jurisdictions, as the Company concluded in the third quarter of fiscal 2013 that it is more likely than not that a benefit for losses in these jurisdictions will not be realized in the foreseeable future.

There were no significant discrete items that impacted our effective tax rate for the thirteen weeks ended August 2, 2014. For the thirteen weeks ended August 3, 2013, our effective tax rate was impacted by a tax expense of $5 millionrelated to adjustments to deferred taxes resulting from a change in statutory tax rate.

There were no significant discrete items that impacted our effective tax rate for the twenty-six weeks ended August 2, 2014. For the twenty-six weeks ended August 3, 2013, our effective tax rate was impacted by a tax expense of$5 million related to adjustments to deferred taxes resulting from a change in statutory tax rate and$1 millionrelated to state income taxes. This tax expense was partially offset by a tax benefit of$2 millionrelated to adjustments to taxes payable.

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Fair value measurements

6 Months Ended

Aug. 02, 2014

Fair Value Disclosures [Abstract]

Fair value measurements

Fair value measurements

To determine the fair value of our assets and liabilities, we utilize the established fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Derivative Financial Instruments

Currently, we use derivative financial arrangements to manage a variety of risk exposures, including interest rate risk associated with our Long-term debt and foreign currency risk relating to cross-currency intercompany lending and merchandise purchases. The valuation of our foreign currency contracts is determined using market-based foreign exchange rates, which are classified as Level 2 inputs.

The valuation of our interest rate contracts is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates and implied volatilities. We evaluate the inputs used to value our derivatives at the end of each reporting period.

For our interest rate contracts, we primarily use Level 2 inputs mentioned above to arrive at fair value. Additionally, for interest rate contracts we also incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements taking into account the impact of any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. We measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. The portfolio-level adjustments are then allocated each period to the individual assets or liabilities within the portfolio.

The credit valuation adjustments are calculated by determining the total expected exposure of the derivatives (which incorporates both the current and potential future exposure) and then applying each counterparty’s credit spread to the applicable exposure. The total expected exposure of a derivative is derived using market-observable inputs, such as yield curves and volatilities. The inputs utilized for our own credit spread are based on implied spreads from our debt, which are considered unobservable inputs. These credit valuation adjustments fall within Level 3 of the fair value hierarchy and include estimates of current credit spreads to evaluate the likelihood of default. For counterparties with publicly available credit information, the credit spreads over LIBOR used in the calculations represent implied credit default swap spreads obtained from a third party credit data provider. Generally, significant increases (decreases) in our own credit spread in isolation would result in significantly lower (higher) fair value measurement for these derivatives. Based on the mixed input valuation, we classify these derivatives based on the lowest level in the fair value hierarchy that is significant to the overall fair value of the instrument.

Any transfer into or out of a level of the fair value hierarchy is recognized based on the value of the instruments at the end of the reporting period.

Cash Equivalents

Cash equivalents include highly liquid investments with an original maturity of three months or less at acquisition. Due to the nature and short-term maturity of these investments, their carrying amount approximates fair value. Therefore, we have determined that our cash equivalents in their entirety are classified as Level 1 within the fair value hierarchy.

The table below presents our assets and liabilities measured at fair value on a recurring basis as of August 2, 2014, February 1, 2014 and August 3, 2013, aggregated by level in the fair value hierarchy within which those measurements fall.

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at August 2, 2014
Assets
Cash equivalents	$	111	$	—	$	—	$	111
Derivative financial instruments:
Interest rate contracts	—		9		—		9
Foreign exchange contracts	—		3		—		3
Total assets	$	111	$	12	$	—	$	123
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		1		—		1
Total liabilities	$	—	$	2	$	—	$	2

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at February 1, 2014
Assets
Cash equivalents	$	164	$	—	$	—	$	164
Derivative financial instruments:
Interest rate contracts	—		13		—		13
Foreign exchange contracts	—		—		—		—
Total assets	$	164	$	13	$	—	$	177
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		—		—		—
Total liabilities	$	—	$	1	$	—	$	1

(In millions)	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at August 3, 2013
Assets
Cash equivalents	$	178	$	—	$	—	$	178
Derivative financial instruments:
Interest rate contracts	—		15		—		15
Foreign exchange contracts	—		3		—		3
Total assets	$	178	$	18	$	—	$	196
Liabilities
Derivative financial instruments:
Interest rate contracts	$	—	$	1	$	—	$	1
Foreign exchange contracts	—		1		—		1
Total liabilities	$	—	$	2	$	—	$	2

For the twenty-six weeks ended August 2, 2014 and August 3, 2013, we had no derivative financial instruments within Level 3 of the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain of our assets and liabilities are measured at fair value on a nonrecurring basis. We evaluate the carrying value of all long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The fair value measurements related to long-lived assets held and used classified as Level 3 were determined using a discounted cash flow valuation method. For those assets classified as Level 2 a relative, market-based approach based on offers was utilized. For the twenty-six weeks ended August 2, 2014 and August 3, 2013, we had no impairments to long-lived assets held for sale.

There have been no changes in valuation technique or related inputs for long-lived assets for the twenty-six weeks ended August 2, 2014 and August 3, 2013.

The table below presents our long-lived assets evaluated for impairment measured at fair value on a nonrecurring basis for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, aggregated by level in the fair value hierarchy within which those measurements fall. Because these assets are not measured at fair value on a recurring basis, certain carrying amounts and fair value measurements presented in the table may reflect values at earlier measurement dates and may no longer represent their fair values at August 2, 2014 and August 3, 2013. As of August 2, 2014 and August 3, 2013, we did not have any long-lived assets classified as Level 1 within the fair value hierarchy.

(In millions)	Carrying Value Prior to Impairment		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Losses
Long-lived assets held and used	$	4	$	—	$	1	$	3
Balance, May 3, 2014	4		—		1		3
Long-lived assets held and used	8		4		—		4
Balance, August 2, 2014	$	12	$	4	$	1	$	7

(In millions)	Carrying Value Prior to Impairment		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Losses
Long-lived assets held and used	$	9	$	6	$	1	$	2
Balance, May 4, 2013	9		6		1		2
Long-lived assets held and used	5		4		—		1
Balance, August 3, 2013	$	14	$	10	$	1	$	3

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Income taxes (Tables)

6 Months Ended

Aug. 02, 2014

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

The following table summarizes our income tax expense (benefit) and effective tax rates for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
($ In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Loss before income taxes	$	(143	)	$	(161	)	$	(341	)	$	(345	)
Income tax expense (benefit)	4			(48		)	2			(121		)
Effective tax rate	(2.8		)%	29.8		%	(0.6		)%	35.1		%

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Recent accounting pronouncements (Notes)

6 Months Ended

Aug. 02, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent accounting pronouncements

Recent accounting pronouncements

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management is currently assessing the impact the adoption of ASU 2014-15 will have on our Condensed Consolidated Financial Statements.

In June 2014, the FASB issued ASU No. 2014-12, “Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”).  ASU 2014-12 provides specific guidance on this Topic, requiring that performance targets that affect vesting and that could be achieved after the requisite service period be treated as a performance condition.  A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards.  This varies from the previous practice, as such provisions were also accounted for as non-vesting restrictions which affect the determination of grant-date fair value and required expense recognition over the requisite service period regardless of whether the performance condition is met.  The amendments in this ASU are effective for reporting periods beginning after December 15, 2015, with early adoption permitted.  An entity may apply the standards (1) prospectively to all share-based payment awards that are granted or modified on or after the effective date, or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter.  The adoption of ASU 2014-12 is not expected to have an impact on our Condensed Consolidated Financial Statements.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 amends the guidance for revenue recognition to replace numerous, industry-specific requirements and converges areas under this topic with those of the International Financial Reporting Standards. The ASU implements a five-step process for customer contract revenue recognition that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances. The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 will have on our Condensed Consolidated Financial Statements.

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Related party transactions

6 Months Ended

Aug. 02, 2014

Related Party Transactions [Abstract]

Related party transactions

Related party transactions

We are owned by an investment group led by entities advised by or affiliated with Bain Capital Partners, LLC, Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “KKR”) and Vornado Realty Trust (“Vornado”) (collectively, the “Sponsors”). The Sponsors provide management and advisory services to us pursuant to an advisory agreement executed at the closing of the merger transaction effective as of July 21, 2005 and amended June 10, 2008 and February 1, 2009 (“Advisory Agreement”). The initial term of the Advisory Agreement is ten years. After ten years, it extends annually for one year unless we or the Sponsors provide notice of termination to the other. Prior to an amendment in August 2014, described below, the management and advisory fees paid to the Sponsors (the “Advisory Fees”) increased 5% per year during the ten-year term of the agreement with the exception of fiscal 2009. We recorded Advisory Fees of $6 million and $12 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively. We recorded Advisory Fees of $5 million and $11 million for the thirteen and twenty-six weeks ended August 3, 2013, respectively. During the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, we also paid the Sponsors fees of less than $1 million, respectively, for out-of-pocket expenses.

Additionally, the Advisory Agreement provides that affiliates of the Sponsors will be entitled to receive a fee equal to 1% of the aggregate transaction value in connection with certain financing, acquisition, disposition and change of control transactions (“Transaction Fees”). The Advisory Agreement includes customary exculpation and indemnification provisions in favor of the Sponsors and their affiliates. In the event that the Advisory Agreement is terminated by the Sponsors or us, the Sponsors will receive all unpaid Advisory Fees, all unpaid Transaction Fees and expenses due under the Advisory Agreement with respect to periods prior to the termination date plus the net present value of the Advisory Fees that would have been payable for the remainder of the applicable term of the Advisory Agreement.

In August 2014, the Advisory Agreement was amended in order to reduce the Advisory Fees to $17 million for fiscal year 2014 and each year thereafter.  If in the future we successfully complete an initial public offering (“IPO”), the Sponsors may elect to receive from the proceeds of such IPO, an amount equal to the aggregate difference between: (x) the Advisory Fees that we would have paid in fiscal year 2014 and each fiscal year thereafter had such amounts not been fixed and (y) the Advisory Fees that were actually paid by us for fiscal year 2014 and each fiscal year thereafter.

In connection with the amendment and restatement of the ABL Facility on March 21, 2014, we incurred Transaction Fees of $19 million pursuant to the terms of the Advisory Agreement, which are capitalized as deferred debt issuance costs, amortized over the term of the agreement and included in Other assets on our Condensed Consolidated Balance Sheet.

From time to time, we and our subsidiaries, as well as the Sponsors or their affiliates, may acquire debt or debt securities issued by us or our subsidiaries in open market transactions, tender offers, exchange offers, privately negotiated transactions or otherwise. During the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, investment funds or accounts advised by KKR held debt and debt securities issued by the Company and its subsidiaries.  The interest amounts paid on such debt and debt securities held by related parties was $2 million and $5 million during the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively.

Additionally, under lease agreements with affiliates of Vornado, we paid an aggregate amount of $2 million and $4 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively, with respect to 0.7% of our operated stores, which include Toys “R” Us Express stores. Of the aggregate amount paid, less than $1 million and $1 million for the thirteen and twenty-six weeks ended August 2, 2014, respectively, were allocable to joint-venture parties not otherwise affiliated with Vornado. For the thirteen and twenty-six weeks ended August 3, 2013, we or our affiliates paid an aggregate of $3 million and $5 million, respectively, with respect to 0.8% of our operated stores, which include Toys “R” Us Express stores. Of these amounts, less than $1 million and $1 million, respectively, were allocable to joint-venture parties not otherwise affiliated with Vornado.

Each of the Sponsors, either directly or through affiliates, has ownership interests in a broad range of companies (“Portfolio Companies”) with whom we may from time to time enter into commercial transactions in the ordinary course of business, primarily for the purchase of goods and services. We believe that none of our transactions or arrangements with Portfolio Companies are significant enough to be considered material to the Sponsors or to our business.

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Segments

6 Months Ended

Aug. 02, 2014

Segment Reporting [Abstract]

Segments

Segments

Our reportable segments are Toys “R” Us – Domestic (“Domestic”), which provides toy and baby product offerings in 49 states and Puerto Rico, and Toys “R” Us – International (“International”), which operates or licenses “R” Us branded retail stores in 35 foreign countries and jurisdictions with operated stores in Australia, Austria, Brunei, Canada, China, France, Germany, Hong Kong, Japan, Malaysia, Poland, Portugal, Singapore, Spain, Switzerland, Taiwan, Thailand and the United Kingdom. Domestic and International segments also include their respective Internet operations. Segment operating (loss) earnings excludes corporate related charges and income. All intercompany transactions between the segments have been eliminated. Income tax information by segment has not been included as taxes are calculated at a company-wide level and are not allocated to each segment. Revenues from external customers are derived primarily from merchandise sales and we do not generate material sales from any single customer.

The following tables show our percentage of Net sales by product category:

	13 Weeks Ended				26 Weeks Ended
Domestic:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	47.6	%	48.6	%	48.8	%	49.9	%
Core Toy	13.2	%	11.9	%	12.6	%	11.8	%
Entertainment	6.3	%	5.7	%	7.1	%	6.5	%
Learning	17.6	%	16.8	%	17.5	%	16.6	%
Seasonal	15.0	%	15.3	%	13.7	%	14.1	%
Other (1)	0.3	%	1.7	%	0.3	%	1.1	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of non-product related revenues.

	13 Weeks Ended				26 Weeks Ended
International:	August 2, 2014		August 3, 2013		August 2, 2014		August 3, 2013
Baby	25.0	%	26.4	%	26.0	%	26.6	%
Core Toy	19.7	%	19.0	%	19.6	%	19.2	%
Entertainment	7.1	%	7.1	%	7.3	%	8.1	%
Learning	25.8	%	25.1	%	26.1	%	25.7	%
Seasonal	21.5	%	21.5	%	20.1	%	19.5	%
Other (1)	0.9	%	0.9	%	0.9	%	0.9	%
Total	100	%	100	%	100	%	100	%

(1) Consists primarily of licensing fees from unaffiliated third parties and other non-product related revenues.

From time to time, we may make revisions to our prior period Net sales by product category to conform to the current period allocation. These revisions did not have a significant impact to our prior year disclosure.

A summary of financial results by reportable segment is as follows:

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Net sales
Domestic	$	1,460		$	1,450		$	2,999		$	2,930
International	980			927			1,920			1,855
Total Net sales	$	2,440		$	2,377		$	4,919		$	4,785
Operating earnings (loss)
Domestic	$	20		$	45		$	36		$	85
International	28			14			9			(14		)
Corporate and other	(90		)	(105		)	(178		)	(190		)
Operating loss	(42		)	(46		)	(133		)	(119		)
Interest expense	(102		)	(116		)	(210		)	(230		)
Interest income	1			1			2			4
Loss before income taxes	$	(143	)	$	(161	)	$	(341	)	$	(345	)

(In millions)	August 2, 2014		February 1, 2014		August 3, 2013
Merchandise inventories
Domestic	$	1,442	$	1,375	$	1,459
International	902		796		894
Total Merchandise inventories	$	2,344	$	2,171	$	2,353

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Litigation and legal proceedings

6 Months Ended

Aug. 02, 2014

Commitments and Contingencies Disclosure [Abstract]

Litigation and legal proceedings

Litigation and legal proceedings

We are, and in the future may be, involved in various 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. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages, and until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these proceedings involve matters of which the outcomes are inherently difficult to predict. However, based upon our historical experience with similar matters, we do not expect that any such additional losses would be material to our consolidated financial position, results of operations or cash flows.

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Dispositions

6 Months Ended

Aug. 02, 2014

Discontinued Operations and Disposal Groups [Abstract]

Dispositions

Dispositions

During the thirteen and twenty-six weeks ended August 2, 2014, we sold certain properties and assets for proceeds of $6 million and $9 million, respectively, resulting in net gains of $3 million, respectively, which are included in Other income, net.

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Fair value measurements - Schedule of Fair Value Measurements, Nonrecurring (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Aug. 02, 2014	May 03, 2014	Aug. 03, 2013	May 04, 2013
Carrying Value Prior to Impairment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	$ 8	$ 4	$ 5	$ 9
Total assets	12	4	14	9
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	4	0	4	6
Total assets	4	0	10	6
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	0	1	0	1
Total assets	1	1	1	1
Impairment Losses
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-lived assets held and used	4	3	1	2
Total assets	$ 7	$ 3	$ 3	$ 2

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Derivative instruments and hedging activities (Tables)

6 Months Ended

Aug. 02, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Net Impact of the Effective Portion of Derivatives Designated as Cash Flow Hedges on Accumulated Other Comprehensive Income (Loss)

The following table sets forth the net impact of the effective portion of derivatives designated as cash flow hedges on Accumulated other comprehensive loss on our Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the twenty-six weeks ended August 2, 2014 and August 3, 2013:

	26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013
Derivatives designated as cash flow hedges:
Beginning balance	$	(1	)	$	(2	)
Change in fair value recognized in Accumulated other comprehensive loss - Interest Rate Contracts (1)	—			—
Ending balance	$	(1	)	$	(2	)

(1) Reclassifications from Accumulated other comprehensive loss to Interest expense were nominal for the twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively.

Impact of Derivatives on Interest Expense

The following table sets forth the impact of derivatives on Interest expense on our Condensed Consolidated Statements of Operations for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Derivatives not designated for hedge accounting:
(Loss) gain on the change in fair value - Intercompany Loan Foreign Exchange Contracts (1)	$	(8	)	$	13		$	(15	)	$	5
Loss on the change in fair value - Interest Rate Contract	(1		)	—			(1		)	—
Gain (loss) on the change in fair value - Merchandise Purchases Program Foreign Exchange Contracts	1			3			(1		)	5
	(8		)	16			(17		)	10
Derivatives designated as cash flow hedges:
Amortization of hedged caps	(1		)	(1		)	(1		)	(1		)
	(1		)	(1		)	(1		)	(1		)
Derivative designated as a fair value hedge:
Loss on the change in fair value - Interest Rate Contract	—			(5		)	(2		)	(4		)
Gain recognized in Interest expense on hedged item	—			3			2			3
	—			(2		)	—			(1		)
Total Interest expense	$	(9	)	$	13		$	(18	)	$	8

(1) Gains and losses related to our short-term intercompany loan foreign exchange contracts are recorded in Interest expense, in addition to the corresponding foreign exchange gains and losses related to our short-term, cross-currency intercompany loans.

Schedule of Notional Amounts and Related Fair Values of Derivatives

The following table contains the notional amounts and related fair values of our derivatives included within our Condensed Consolidated Balance Sheets as of August 2, 2014, February 1, 2014 and August 3, 2013:

	August 2, 2014					February 1, 2014					August 3, 2013
(In millions)	Notional Amount		Fair Value Assets/ (Liabilities)			Notional Amount		Fair Value Assets/ (Liabilities)			Notional Amount		Fair Value Assets/ (Liabilities)
Interest Rate Contracts designated as cash flow hedges:
Prepaid expenses and other current assets (1)	$	700	$	—		$	—	$	—		$	—	$	—
Other assets	129		—			835		—			859		1
Other non-current liabilities	64		(1		)	65		(1		)	83		(1		)
Interest Rate Contract designated as a fair value hedge:
Other assets	—		—			350		13			350		14
Interest Rate Contracts not designated for hedge accounting:
Prepaid expenses and other current assets (1)	1,611		—			—		—			—		—
Other assets	350		9			1,611		—			1,611		—
Foreign Currency Contracts not designated for hedge accounting:
Prepaid expenses and other current assets	261		3			26		—			285		3
Accrued expenses and other current liabilities	$	78	$	(1	)	$	78	$	—		$	143	$	(1	)
Total derivative contracts outstanding:
Prepaid expenses and other current assets	$	2,572	$	3		$	26	$	—		$	285	$	3
Other assets	479		9			2,796		13			2,820		15
Total derivative assets (2)	$	3,051	$	12		$	2,822	$	13		$	3,105	$	18
Accrued expenses and other current liabilities	$	78	$	(1	)	$	78	$	—		$	143	$	(1	)
Other non-current liabilities	64		(1		)	65		(1		)	83		(1		)
Total derivative liabilities (2)	$	142	$	(2	)	$	143	$	(1	)	$	226	$	(2	)

(1) Amount as of August 2, 2014 includes reclassification of contracts scheduled to mature within the next 12 months, which were previously included within Other assets as of February 1, 2014 and August 3, 2013.

(2) Refer to Note 4 entitled “Fair value measurements” for the fair value of our derivative instruments classified within the fair value hierarchy.

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Short-term borrowings and long-term debt - Narrative (Details)	6 Months Ended			6 Months Ended				6 Months Ended						6 Months Ended				6 Months Ended						6 Months Ended								6 Months Ended
	Aug. 02, 2014 USD ($)	Aug. 03, 2013 USD ($)	Feb. 01, 2014 USD ($)	Aug. 02, 2014 Line of Credit [Member] Labuan uncommitted lines of credit [Member] USD ($)	Aug. 02, 2014 Line of Credit [Member] Labuan uncommitted lines of credit [Member] HKD	Aug. 03, 2013 Line of Credit [Member] Labuan uncommitted lines of credit [Member] USD ($)	Feb. 01, 2014 Line of Credit [Member] Labuan uncommitted lines of credit [Member] USD ($)	Aug. 02, 2014 Line of Credit [Member] Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member] USD ($)		Feb. 01, 2014 Line of Credit [Member] Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member] USD ($)		Aug. 03, 2013 Line of Credit [Member] Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member] USD ($)		Aug. 02, 2014 Line of Credit [Member] Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member] Tranche 1 USD ($)	Aug. 02, 2014 Line of Credit [Member] Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member] Tranche 1 JPY (¥)	Aug. 02, 2014 Line of Credit [Member] Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member] Tranche 2 USD ($)	Aug. 02, 2014 Line of Credit [Member] Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member] Tranche 2 JPY (¥)	Aug. 02, 2014 Line of Credit [Member] Toys-Japan Uncommitted Line of Credit [Member] USD ($)	Aug. 02, 2014 Line of Credit [Member] Toys-Japan Uncommitted Line of Credit [Member] JPY (¥)	Aug. 02, 2014 Line of Credit [Member] European and Australian asset-based revolving credit facility, expires fiscal two thousand and sixteen [Member] USD ($)	Aug. 02, 2014 Line of Credit [Member] European and Australian asset-based revolving credit facility, expires fiscal two thousand and sixteen [Member] GBP (£)	Feb. 01, 2014 Line of Credit [Member] European and Australian asset-based revolving credit facility, expires fiscal two thousand and sixteen [Member] USD ($)	Aug. 03, 2013 Line of Credit [Member] European and Australian asset-based revolving credit facility, expires fiscal two thousand and sixteen [Member] USD ($)	Aug. 02, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] USD ($)		Mar. 21, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] USD ($)	Feb. 01, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] USD ($)		Aug. 03, 2013 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] USD ($)		Aug. 02, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] Minimum USD ($)	Aug. 02, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] Maximum	Aug. 02, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] London Interbank Offered Rate (LIBOR) [Member] Minimum	Aug. 02, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] London Interbank Offered Rate (LIBOR) [Member] Maximum	Aug. 02, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] Prime Rate [Member] Minimum	Aug. 02, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand and nineteen [Member] Prime Rate [Member] Maximum	Mar. 21, 2014 Line of Credit [Member] Secured revolving credit facility, expires fiscal two thousand fifteen [Member] USD ($)	Aug. 02, 2014 Significant Unobservable Inputs (Level 3) USD ($)	Feb. 01, 2014 Significant Unobservable Inputs (Level 3) USD ($)	Aug. 03, 2013 Significant Unobservable Inputs (Level 3) USD ($)
Short-term Borrowings and Long-term debt [Line Items]
Credit amount available under agreement				$ 39,000,000	302,000,000									$ 127,000,000	¥ 13,000,000,000	$ 34,000,000	¥ 3,500,000,000	$ 15,000,000	¥ 1,500,000,000	$ 232,000,000	£ 138,000,000			$ 1,850,000,000
Net assets under debt restrictions	638,000,000
Debt and Capital Lease Obligations	5,412,000,000	5,282,000,000	5,007,000,000
Total fair values of long-term debt	5,100,000,000	5,400,000,000	4,600,000,000																																			1,300,000,000	800,000,000	1,200,000,000
Short-term borrowings				12,000,000		17,000,000	12,000,000
Bank guarantees issued under agreement				3,000,000
Remaining availability under line of credit agreement				24,000,000										0						70,000,000				703,000,000
Effective interest rate (percent)				2.39%	2.39%	2.27%
Long-term debt								111,000,000	[1]	5,000,000	[1]	120,000,000	[1]	77,000,000		34,000,000				61,000,000		0	39,000,000	250,000,000	[2],[3]		0	[2],[3]	128,000,000	[2],[3]
Number of Unsecured Loan Commitment Lines of Credit								2
Interest rate marginal spread														0.80%	0.80%	0.80%		0.50%	0.50%														1.50%	1.75%	0.50%	0.75%
Payments of Debt Issuance Costs	13,000,000	26,000,000														1,000,000								31,000,000
Credit Facility Expiration Period																				5 years	5 years
Line of Credit Facility, Potential Increase to Maximum Borrowing Capacity																								1,150,000,000
ABL Facility Excess Availability Period																								30 days
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage																								0.25%
Debt Instrument, Unamortized Discount																										16,000,000											17,000,000
Unamortized Debt Issuance Expense																																					1,000,000
Minimum excess availability covenant																															125,000,000
ABL Facility Excess Availability Days																																3 days
Line of Credit Facility, Current Borrowing Capacity																								828,000,000							150,000,000
Debt Instrument, Covenant Repayment, Minimum Excess Availability																															130,000,000
Letters of Credit Outstanding, Amount																								$ 92,000,000

[1] Toys “R” Us - Japan, Ltd. (“Toys-Japan”) currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit (“Tranche 1” due fiscal 2015 and “Tranche 2” due fiscal 2016). On July 15, 2014, Toys-Japan entered into an agreement to refinance Tranche 2 of its committed lines of credit.

[2] Represents obligations of Toys “R” Us-Delaware, Inc. (“Toys-Delaware”).

[3] On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its $1.85 billion secured revolving credit facility (“ABL Facility”) in order to extend the maturity date of the facility and amend certain other provisions.

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Related party transactions - Narrative (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		0 Months Ended	3 Months Ended		6 Months Ended			0 Months Ended	6 Months Ended	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended				3 Months Ended
	Aug. 02, 2014	Aug. 03, 2013	Feb. 02, 2009 The Sponsors	Aug. 02, 2014 The Sponsors	Aug. 03, 2013 The Sponsors	Aug. 02, 2014 The Sponsors	Aug. 03, 2013 The Sponsors	Feb. 01, 2009 The Sponsors	Mar. 22, 2014 The Sponsors Secured revolving credit facility, expires fiscal two thousand and nineteen [Member]	Aug. 02, 2014 The Sponsors Service Agreements [Member]	Aug. 02, 2014 The Sponsors Maximum	Aug. 03, 2013 The Sponsors Maximum	Aug. 02, 2014 The Sponsors Maximum	Aug. 03, 2013 The Sponsors Maximum	Aug. 02, 2014 Vornado	Aug. 03, 2013 Vornado	Aug. 02, 2014 Vornado	Aug. 03, 2013 Vornado	Aug. 02, 2014 Unaffiliated Joint-Venture Parties	Aug. 03, 2013 Unaffiliated Joint-Venture Parties	Aug. 02, 2014 Unaffiliated Joint-Venture Parties Maximum	Aug. 03, 2013 Unaffiliated Joint-Venture Parties Maximum
Related Party Transaction [Line Items]
Term of Advisory Agreement			10 years
Advisory Agreement Extension Period			1 year
Advisory fee annual increase (percent)								5.00%
Management and advisory fees expense				$ 6	$ 5	$ 12	$ 11			$ 17
Sponsors' out-of-pocket-expenses											1	1	1	1
Transaction fee, percentage of aggregate transaction value								1.00%
Payments of Debt Issuance Costs	13	26							19
Interest paid on debt and debt securities				2	2	5	5
Aggregate amount paid under lease agreements															$ 2	$ 3	$ 4	$ 5	$ 1	$ 1	$ 1	$ 1
Percentage of operated stores															0.70%	0.80%	0.70%	0.80%

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Aug. 02, 2014	Aug. 03, 2013
Cash Flows from Operating Activities:
Net loss	$ (343)	$ (224)
Adjustments to reconcile Net loss to Net cash used in operating activities:
Depreciation and amortization	199	195
Amortization and write-off of debt issuance costs and debt discount	23	24
Deferred income taxes	4	(11)
Other	10	1
Changes in operating assets and liabilities:
Accounts and other receivables	27	41
Merchandise inventories	(166)	(163)
Prepaid expenses and other operating assets	(22)	(20)
Accounts payable, Accrued expenses and other liabilities	(304)	(199)
Income taxes payable and receivable	(25)	(157)
Net cash used in operating activities	(597)	(513)
Cash Flows from Investing Activities:
Capital expenditures	(86)	(110)
Proceeds from sales of fixed assets	9	23
Increase in restricted cash	(1)	(28)
Proceeds from redemption of debt securities	0	52
Purchases of debt securities	0	(20)
Net cash used in investing activities	(78)	(83)
Cash Flows from Financing Activities:
Long-term debt borrowings	735	1,237
Long-term debt repayments	(341)	(1,252)
Capitalized debt issuance costs	(13)	(26)
Short-term debt borrowings, net	0	3
Repurchase of common stock	0	(7)
Net cash provided by (used in) financing activities	381	(45)
Effect of exchange rate changes on Cash and cash equivalents	3	(13)
Cash and cash equivalents:
Net decrease during period	(291)	(654)
Cash and cash equivalents at beginning of period	644	1,118
Cash and cash equivalents at end of period	$ 353	$ 464

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Derivative instruments and hedging activities

6 Months Ended

Aug. 02, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative instruments and hedging activities

Derivative instruments and hedging activities

We are exposed to market risk from potential changes in interest rates and foreign currency exchange rates. We regularly evaluate our exposure and enter into derivative financial instruments to economically manage these risks. We record all derivatives as either assets or liabilities on the Condensed Consolidated Balance Sheets measured at estimated fair value and we do not offset assets and liabilities with the same counterparty. We recognize the changes in fair value as unrealized gains and losses. The recognition of these gains or losses depends on our intended use of the derivatives and the resulting designation. In certain defined conditions, we may designate a derivative as a hedge for a particular exposure.

Interest Rate Contracts

We and our subsidiaries have a variety of fixed and variable rate debt instruments and are exposed to market risks resulting from interest rate fluctuations. We enter into interest rate swaps and/or caps to reduce our exposure to variability in expected future cash outflows and changes in the fair value of certain Long-term debt, attributable to the changes in LIBOR, Euro Interbank Offered Rate and TIBOR. Some of our interest rate contracts contain credit-risk related contingent features and are subject to master netting arrangements. As of August 2, 2014, our interest rate contracts have various maturity dates through February 2018. A portion of our interest rate swaps and caps as of August 2, 2014 are designated as cash flow hedges in accordance with Accounting Standards Codification Topic 815, “Derivatives and Hedging.”

The hedge accounting for a designated cash flow hedge requires that the effective portion be recorded to Accumulated other comprehensive loss; the ineffective portion of a cash flow hedge is recorded to Interest expense. We evaluate the effectiveness of our cash flow hedging relationships on an ongoing basis. For our derivatives that are designated as cash flow hedges, no material ineffectiveness was recorded for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively. Reclassifications from Accumulated other comprehensive loss to Interest expense primarily relate to realized Interest expense on interest rate swaps and caps and the amortization of gains recorded on de-designated caps. We expect to reclassify a net loss of $2 million over the next 12 months to Interest expense from Accumulated other comprehensive loss.

The hedge accounting for a designated fair value hedge requires that the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk be recognized in Interest expense. We evaluate the effectiveness of our fair value hedging relationship on an ongoing basis and recalculate the change in the fair value of the derivative and the underlying hedged item separately. As of August 2, 2014, the derivative we designated as a fair value hedge failed to meet the effectiveness assessment thresholds required to qualify for hedge accounting. However, we continue to hold the derivative as it provides an economic hedge of our fixed rate debt. Accordingly, changes in the fair value of the derivative continue to be recorded in Interest expense. However, in conjunction with the dedesignation of the fair value hedge, commencing in the second quarter of fiscal 2014, we no longer adjust the hedged debt for changes in fair value attributable to changes in the benchmark interest rate. We recorded the residual basis adjustment to the hedged debt from the application of hedge accounting to Interest expense for the thirteen weeks ended August 2, 2014, and will continue to amortize the residual adjustment to maturity. We recorded a $2 million and $1 million net loss in earnings related to ineffectiveness for the thirteen and twenty-six weeks ended August 3, 2013.

Certain of our agreements with credit-risk related contingent features contain cross-default provisions which provide that we could be declared in default on our derivative obligations if we default on certain specified indebtedness. At August 2, 2014, February 1, 2014 and August 3, 2013, there were no derivative liabilities related to agreements that contain credit-risk related contingent features. As of August 2, 2014, February 1, 2014 and August 3, 2013, we were not required to post collateral for any of these derivatives.

Foreign Exchange Contracts

We enter into foreign currency forward contracts to economically hedge the USD merchandise purchases of our foreign subsidiaries and our short-term, cross-currency intercompany loans with and between our foreign subsidiaries. We enter into these contracts in order to reduce our exposure to the variability in expected cash outflows attributable to changes in foreign currency rates. These derivative contracts are not designated as hedges and are recorded on our Condensed Consolidated Balance Sheets at fair value with a gain or loss recorded on the Condensed Consolidated Statements of Operations in Interest expense.

Our foreign exchange contracts typically mature within 12 months. Some of these contracts contain credit-risk related contingent features and are subject to master netting arrangements. Some of these agreements contain provisions which provide that we could be declared in default on our derivative obligations if we default on certain specified indebtedness. At August 2, 2014, February 1, 2014 and August 3, 2013, derivative liabilities related to agreements that contain credit-risk related contingent features had a fair value of $1 million, less than $1 million and $1 million, respectively. As of August 2, 2014, February 1, 2014 and August 3, 2013, we were not required to post collateral for any of these derivatives.

The following table sets forth the net impact of the effective portion of derivatives designated as cash flow hedges on Accumulated other comprehensive loss on our Condensed Consolidated Statements of Stockholders’ (Deficit) Equity for the twenty-six weeks ended August 2, 2014 and August 3, 2013:

	26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013
Derivatives designated as cash flow hedges:
Beginning balance	$	(1	)	$	(2	)
Change in fair value recognized in Accumulated other comprehensive loss - Interest Rate Contracts (1)	—			—
Ending balance	$	(1	)	$	(2	)

(1) Reclassifications from Accumulated other comprehensive loss to Interest expense were nominal for the twenty-six weeks ended August 2, 2014 and August 3, 2013, respectively.

The following table sets forth the impact of derivatives on Interest expense on our Condensed Consolidated Statements of Operations for the thirteen and twenty-six weeks ended August 2, 2014 and August 3, 2013:

	13 Weeks Ended						26 Weeks Ended
(In millions)	August 2, 2014			August 3, 2013			August 2, 2014			August 3, 2013
Derivatives not designated for hedge accounting:
(Loss) gain on the change in fair value - Intercompany Loan Foreign Exchange Contracts (1)	$	(8	)	$	13		$	(15	)	$	5
Loss on the change in fair value - Interest Rate Contract	(1		)	—			(1		)	—
Gain (loss) on the change in fair value - Merchandise Purchases Program Foreign Exchange Contracts	1			3			(1		)	5
	(8		)	16			(17		)	10
Derivatives designated as cash flow hedges:
Amortization of hedged caps	(1		)	(1		)	(1		)	(1		)
	(1		)	(1		)	(1		)	(1		)
Derivative designated as a fair value hedge:
Loss on the change in fair value - Interest Rate Contract	—			(5		)	(2		)	(4		)
Gain recognized in Interest expense on hedged item	—			3			2			3
	—			(2		)	—			(1		)
Total Interest expense	$	(9	)	$	13		$	(18	)	$	8

(1) Gains and losses related to our short-term intercompany loan foreign exchange contracts are recorded in Interest expense, in addition to the corresponding foreign exchange gains and losses related to our short-term, cross-currency intercompany loans.

The following table contains the notional amounts and related fair values of our derivatives included within our Condensed Consolidated Balance Sheets as of August 2, 2014, February 1, 2014 and August 3, 2013:

	August 2, 2014					February 1, 2014					August 3, 2013
(In millions)	Notional Amount		Fair Value Assets/ (Liabilities)			Notional Amount		Fair Value Assets/ (Liabilities)			Notional Amount		Fair Value Assets/ (Liabilities)
Interest Rate Contracts designated as cash flow hedges:
Prepaid expenses and other current assets (1)	$	700	$	—		$	—	$	—		$	—	$	—
Other assets	129		—			835		—			859		1
Other non-current liabilities	64		(1		)	65		(1		)	83		(1		)
Interest Rate Contract designated as a fair value hedge:
Other assets	—		—			350		13			350		14
Interest Rate Contracts not designated for hedge accounting:
Prepaid expenses and other current assets (1)	1,611		—			—		—			—		—
Other assets	350		9			1,611		—			1,611		—
Foreign Currency Contracts not designated for hedge accounting:
Prepaid expenses and other current assets	261		3			26		—			285		3
Accrued expenses and other current liabilities	$	78	$	(1	)	$	78	$	—		$	143	$	(1	)
Total derivative contracts outstanding:
Prepaid expenses and other current assets	$	2,572	$	3		$	26	$	—		$	285	$	3
Other assets	479		9			2,796		13			2,820		15
Total derivative assets (2)	$	3,051	$	12		$	2,822	$	13		$	3,105	$	18
Accrued expenses and other current liabilities	$	78	$	(1	)	$	78	$	—		$	143	$	(1	)
Other non-current liabilities	64		(1		)	65		(1		)	83		(1		)
Total derivative liabilities (2)	$	142	$	(2	)	$	143	$	(1	)	$	226	$	(2	)

(1) Amount as of August 2, 2014 includes reclassification of contracts scheduled to mature within the next 12 months, which were previously included within Other assets as of February 1, 2014 and August 3, 2013.

(2) Refer to Note 4 entitled “Fair value measurements” for the fair value of our derivative instruments classified within the fair value hierarchy.

Offsetting of Derivatives

We present our derivatives at gross fair values in the Condensed Consolidated Balance Sheets. However, some of our interest rate and foreign exchange contracts are subject to master netting arrangements which allow net settlements under certain conditions. As of August 2, 2014, February 1, 2014 and August 3, 2013, the aggregate gross fair value of derivative liabilities which could be net settled against our derivative assets were nominal, respectively, and the aggregate gross fair value of derivative assets which could be net settled against our derivative liabilities were nominal, respectively. As of August 2, 2014, February 1, 2014 and August 3, 2013, none of the master netting arrangements involved collateral.

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Short-term borrowings and long-term debt - Summary of the Company's consolidated Short-term borrowings and Long-term debt (Details) (USD $) In Millions, unless otherwise specified	Aug. 02, 2014		Feb. 01, 2014		Aug. 03, 2013
Short-term Borrowings and Long-term debt [Line Items]
Short-term borrowings and long-term debt	$ 5,412		$ 5,007		$ 5,282
Current portion of long-term debt	165		89		149
Total long-term debt	5,247	[1]	4,918	[1]	5,133	[1]
Secured term loan facility, due fiscal two thousand and sixteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	643	[2]	646	[2]	649	[2]
Seven point three seven five percent senior secured notes, due fiscal two thousand and sixteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	355	[2]	357	[2]	358	[2]
Debt, stated interest rate (percent)	7.375%		7.375%		7.375%
Ten point seven five percent senior notes, due fiscal two thousand and seventeen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	0	[3]	0	[3]	935	[3]
Debt, stated interest rate (percent)					10.75%
Ten point three seven five percent senior notes, due fiscal two thousand and seventeen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	447	[4]	447	[4]	446	[4]
Debt, stated interest rate (percent)	10.375%		10.375%		10.375%
Eight point five percent senior secured notes, due fiscal two thousand and seventeen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	720	[5]	719	[5]	719	[5]
Debt, stated interest rate (percent)	8.50%		8.50%		8.50%
Incremental secured term loan facility, due fiscal two thousand and eighteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	371	[2]	372	[2]	374	[2]
Second incremental secured term loan facility, due fiscal two thousand and eighteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	209	[2]	210	[2]	210	[2]
Seven point three seven five percent senior notes, due fiscal two thousand and eighteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	403	[4]	403	[4]	403	[4]
Debt, stated interest rate (percent)	7.375%		7.375%		7.375%
TRU Propco I senior unsecured term loan facility, due fiscal two thousand and nineteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	969	[3]	973	[3]	0	[3]
Toys-Japan one point eight five percent two point eight five percent loans due fiscals two thousand and thirteen two thousand and twenty one [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	86		91		115
Eight point seven five percent debentures, due fiscal two thousand and twenty one [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	22	[6]	22	[6]	22	[6]
Debt, stated interest rate (percent)	8.75%		8.75%		8.75%
Finance obligations associated with capital projects
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	175		174		175
Capital lease obligations
Short-term Borrowings and Long-term debt [Line Items]
Capital lease obligations	18		20		28
Minimum | Toys-Japan one point eight five percent two point eight five percent loans due fiscals two thousand and thirteen two thousand and twenty one [Member]
Short-term Borrowings and Long-term debt [Line Items]
Debt, stated interest rate (percent)	1.85%		1.85%		1.85%
Maximum | Toys-Japan one point eight five percent two point eight five percent loans due fiscals two thousand and thirteen two thousand and twenty one [Member]
Short-term Borrowings and Long-term debt [Line Items]
Debt, stated interest rate (percent)	2.85%		2.85%		2.85%
Line of Credit [Member] | Labuan uncommitted lines of credit [Member]
Short-term Borrowings and Long-term debt [Line Items]
Short-term borrowings	12		12		17
Line of Credit [Member] | Spanish real estate credit facility, due fiscal two thousand and fifteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	66		71		96
Line of Credit [Member] | Toys-Japan unsecured credit lines, expire fiscals two thousand fourteen two thousand and fifteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	111	[7]	5	[7]	120	[7]
Line of Credit [Member] | European and Australian asset-based revolving credit facility, expires fiscal two thousand and sixteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	61		0		39
Line of Credit [Member] | French real estate credit facility, due fiscal two thousand and eighteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	63		64		63
Line of Credit [Member] | Secured revolving credit facility, expires fiscal two thousand and nineteen [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	250	[2],[8]	0	[2],[8]	128	[2],[8]
Line of Credit [Member] | U.K. real estate credit facility, due fiscal two thousand and twenty [Member]
Short-term Borrowings and Long-term debt [Line Items]
Long-term debt	$ 443		$ 433		$ 402

[1] We maintain derivative instruments on certain of our long-term debt, which impact our effective interest rates. Refer to Note 3 entitled “Derivative instruments and hedging activities” for further details.

[2] Represents obligations of Toys “R” Us-Delaware, Inc. (“Toys-Delaware”).

[3] Represents obligations of Toys “R” Us Property Company I, LLC and its subsidiaries (“TRU Propco I”).

[4] Represents obligations of Toys “R” Us, Inc. (the “Parent Company”).

[5] Represents obligations of Toys “R” Us Property Company II, LLC (“TRU Propco II”).

[6] Represents obligations of the Parent Company and Toys-Delaware.

[7] Toys “R” Us - Japan, Ltd. (“Toys-Japan”) currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit (“Tranche 1” due fiscal 2015 and “Tranche 2” due fiscal 2016). On July 15, 2014, Toys-Japan entered into an agreement to refinance Tranche 2 of its committed lines of credit.

[8] On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its $1.85 billion secured revolving credit facility (“ABL Facility”) in order to extend the maturity date of the facility and amend certain other provisions.

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Segments - Percentages of consolidated Net sales by product category (Details)	3 Months Ended				6 Months Ended
	Aug. 02, 2014		Aug. 03, 2013		Aug. 02, 2014		Aug. 03, 2013
Toys R Us - Domestic
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	100.00%		100.00%		100.00%		100.00%
Toys R Us - Domestic | Baby
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	47.60%		48.60%		48.80%		49.90%
Toys R Us - Domestic | Core Toy
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	13.20%		11.90%		12.60%		11.80%
Toys R Us - Domestic | Entertainment
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	6.30%		5.70%		7.10%		6.50%
Toys R Us - Domestic | Learning
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	17.60%		16.80%		17.50%		16.60%
Toys R Us - Domestic | Seasonal
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	15.00%		15.30%		13.70%		14.10%
Toys R Us - Domestic | Other
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	0.30%	[1]	1.70%	[1]	0.30%	[1]	1.10%	[1]
Toys R Us - International
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	100.00%		100.00%		100.00%		100.00%
Toys R Us - International | Baby
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	25.00%		26.40%		26.00%		26.60%
Toys R Us - International | Core Toy
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	19.70%		19.00%		19.60%		19.20%
Toys R Us - International | Entertainment
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	7.10%		7.10%		7.30%		8.10%
Toys R Us - International | Learning
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	25.80%		25.10%		26.10%		25.70%
Toys R Us - International | Seasonal
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	21.50%		21.50%		20.10%		19.50%
Toys R Us - International | Other
Revenue from External Customer [Line Items]
Percentage of consolidated Net sales by product category	0.90%	[2]	0.90%	[2]	0.90%	[2]	0.90%	[2]

[1] Consists primarily of non-product related revenues. 13 Weeks Ended 26 Weeks EndedInternational: August 2, 2014 August 3, 2013 August 2, 2014 August 3, 2013Baby 25.0% 26.4% 26.0% 26.6%Core Toy 19.7% 19.0% 19.6% 19.2%Entertainment 7.1% 7.1% 7.3% 8.1%Learning 25.8% 25.1% 26.1% 25.7%Seasonal 21.5% 21.5% 20.1% 19.5%Other (1) 0.9% 0.9% 0.9% 0.9%Total 100% 100% 100% 100%

[2] Consists primarily of licensing fees from unaffiliated third parties and other non-product related revenues.From time to time, we may make revisions to our prior period Net sales by product category to conform to the current period allocation. These revisions did not have a significant impact to our prior year disclosure.

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Short-term borrowings and long-term debt (Tables)

6 Months Ended

Aug. 02, 2014

Debt Disclosure [Abstract]

Schedule of Debt

A summary of the Company’s consolidated Short-term borrowings and Long-term debt as of August 2, 2014, February 1, 2014 and August 3, 2013 is outlined in the table below:

(In millions)	August 2, 2014		February 1, 2014		August 3, 2013
Short-term borrowings
Labuan uncommitted lines of credit	$	12	$	12	$	17
Long-term debt
Spanish real estate credit facility, due fiscal 2015	66		71		96
Toys-Japan unsecured credit lines, expire fiscals 2015-2016 (1)	111		5		120
European and Australian asset-based revolving credit facility, expires fiscal 2016	61		—		39
Secured term loan facility, due fiscal 2016 (2)	643		646		649
7.375% senior secured notes, due fiscal 2016 (2)	355		357		358
10.750% senior notes, due fiscal 2017 (3)	—		—		935
10.375% senior notes, due fiscal 2017 (4)	447		447		446
8.500% senior secured notes, due fiscal 2017 (5)	720		719		719
French real estate credit facility, due fiscal 2018	63		64		63
Incremental secured term loan facility, due fiscal 2018 (2)	371		372		374
Second incremental secured term loan facility, due fiscal 2018 (2)	209		210		210
7.375% senior notes, due fiscal 2018 (4)	403		403		403
Secured revolving credit facility, expires fiscal 2019 (2)(6)	250		—		128
Senior unsecured term loan facility, due fiscal 2019 (3)	969		973		—
UK real estate credit facility, due fiscal 2020	443		433		402
Toys-Japan 1.85%-2.85% loans, due fiscals 2014-2021	86		91		115
8.750% debentures, due fiscal 2021 (7)	22		22		22
Finance obligations associated with capital projects	175		174		175
Capital lease obligations	18		20		28
	5,412		5,007		5,282
Less current portion	165		89		149
Total Long-term debt (8)	$	5,247	$	4,918	$	5,133

(1) Toys “R” Us - Japan, Ltd. (“Toys-Japan”) currently has an agreement with a syndicate of financial institutions, which includes two unsecured loan commitment lines of credit (“Tranche 1” due fiscal 2015 and “Tranche 2” due fiscal 2016). On July 15, 2014, Toys-Japan entered into an agreement to refinance Tranche 2 of its committed lines of credit.

(2) Represents obligations of Toys “R” Us-Delaware, Inc. (“Toys-Delaware”).

(3) Represents obligations of Toys “R” Us Property Company I, LLC and its subsidiaries (“TRU Propco I”).

(4) Represents obligations of Toys “R” Us, Inc. (the “Parent Company”).

(5) Represents obligations of Toys “R” Us Property Company II, LLC (“TRU Propco II”).

(6) On March 21, 2014, Toys-Delaware and certain of its subsidiaries amended and restated the credit agreement for its $1.85 billion secured revolving credit facility (“ABL Facility”) in order to extend the maturity date of the facility and amend certain other provisions.

(7) Represents obligations of the Parent Company and Toys-Delaware.

(8) We maintain derivative instruments on certain of our long-term debt, which impact our effective interest rates. Refer to Note 3 entitled “Derivative instruments and hedging activities” for further details.