SCHEDULE I - PARENT COMPANY INFORMATION

12 Months Ended

Jan. 31, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Shedule I - Parent Company Condensed Financial Statements and Notes to Condensed Financial Statements

Toys “R” Us, Inc.

Schedule I — Condensed Statements of Operations and Comprehensive Loss

	Fiscal Years Ended
(In millions)	January 31, 2015			February 1, 2014			February 2, 2013
Revenues	$	—		$	—		$	—
General and administrative expenses	25			21			18
Depreciation and amortization	1			3			3
Other expense, net	—			1			—
Total operating expenses	26			25			21
Other (expense) income:
Interest expense, net	(78		)	(76		)	(83		)
Intercompany interest expense, net	(54		)	(63		)	(47		)
(Deficit) equity in pre-tax (loss) earnings of consolidated subsidiaries	(102		)	(706		)	242
(Loss) earnings before income taxes	(260		)	(870		)	91
Income tax expense	32			169			53
Net (loss) earnings	$	(292	)	$	(1,039	)	$	38
Comprehensive loss	$	(452	)	$	(1,120	)	$	(9	)

See accompanying notes to Condensed Financial Statements.

Toys “R” Us, Inc.

Schedule I — Condensed Balance Sheets

(In millions)	January 31, 2015			February 1, 2014
ASSETS
Current Assets:
Cash and cash equivalents	$	11		$	79
Income taxes receivable	20			—
Prepaid expenses and other current assets	9			4
Due from subsidiary	376			316
Total current assets	416			399
Property and equipment, net	1			3
Deferred tax assets	2			2
Other assets	12			27
	$	431		$	431
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accrued expenses and other current liabilities	$	121		$	88
Income taxes payable	2			—
Total current liabilities	123			88
Long-term debt	872			872
Due to subsidiaries, net	461			46
Other non-current liabilities	70			73
Temporary equity	—			8
Stockholders’ deficit	(1,095		)	(656		)
	$	431		$	431

See accompanying notes to Condensed Financial Statements.

Toys “R” Us, Inc.

Schedule I — Condensed Statements of Cash Flows

	Fiscal Years Ended
(In millions)	January 31, 2015			February 1, 2014			February 2, 2013
Cash Flows from Operating Activities	$	(13	)	$	(21	)	$	114
Cash Flows from Investing Activities:
Investments in subsidiaries	5			(180		)	(33		)
Intercompany loan repayments by subsidiaries	2,056			1,956			2,107
Loans to subsidiaries	(2,116		)	(2,251		)	(2,005		)
Proceeds from redemption of debt securities	—			52			—
Net cash (used in) provided by investing activities	(55		)	(423		)	69
Cash Flows from Financing Activities:
Long-term debt borrowings	—			—			446
Long-term debt repayment	—			—			(400		)
Borrowings from subsidiaries	—			—			265
Other	—			(7		)	(17		)
Net cash (used in) provided by financing activities	—			(7		)	294
Cash and cash equivalents:
Net (decrease) increase during period	(68		)	(451		)	477
Cash and cash equivalents at beginning of period	79			530			53
Cash and cash equivalents at end of period	$	11		$	79		$	530
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	77		$	78		$	75

See accompanying notes to Condensed Financial Statements.

BASIS OF PRESENTATION

The Parent Company is a holding company that conducts substantially all of its business operations through its subsidiaries. As specified in certain of its subsidiaries’ debt agreements, there are restrictions on the Parent Company’s ability to obtain funds from certain of its subsidiaries through dividends, loans or advances (refer to Note 2 to our Consolidated Financial Statements entitled “SHORT-TERM BORROWINGS AND LONG-TERM DEBT”). Accordingly, these condensed financial statements have been presented on a “parent-only” basis. Under a parent-only presentation, the Parent Company’s investments in its consolidated subsidiaries are presented under the equity method of accounting. These parent-only financial statements should be read in conjunction with Toys “R” Us, Inc.’s audited Consolidated Financial Statements included elsewhere herein.

In connection with the July 21, 2005 Merger and subsequent reorganization, the Parent Company borrowed $770 million and received a promissory note of $887 million (£509 million) as a dividend from its indirect wholly-owned subsidiary, Toys “R” Us (UK) Limited (“Toys Limited”). On January 25, 2012 the $770 million intercompany note payable to Toys Limited was amended to translate the outstanding principal and accrued interest on that date to pounds sterling. As of January 31, 2015 and February 1, 2014, Due to subsidiaries, net included the outstanding net intercompany receivable balance from Toys Limited of $175 million and $179 million, respectively.

Additionally included within Due to subsidiaries, net, as of January 31, 2015 and February 1, 2014 is an intercompany payable to Toys-Delaware of $755 million and $697 million, respectively, which includes accrued interest. The intercompany payable to Toys-Delaware includes long-term notes payable by Parent to Toys-Delaware as of January 31, 2015 and February 1, 2014 for which the amounts are listed in the table below. All of the notes are documented, unsecured, and include a market rate of interest. For fiscals 2014 and 2013, the long-term notes payable by Parent to Toys-Delaware were offset by $89 million and $90 million, respectively, of third party insurance liabilities for which Toys-Delaware is the primary obligor. The remaining intercompany payable balance includes $4 million of other payables to Toys-Delaware for fiscals 2014 and 2013, respectively.

(In millions)	Fiscal 2014		Fiscal 2013
Note issued by Parent in FY 2005	$	299	$	286
Note issued by Parent in FY 2009	222		201
Note issued by Parent in FY 2012 (1)	229		206
Note issued by Parent in FY 2012	90		90
Long-term notes payable by Parent to Toys-Delaware (2)	$	840	$	783

(1) Note is expressly subordinated in right of payment to the senior obligations of the Parent.

(2) Includes accrued and unpaid interest.

As of January 31, 2015 and February 1, 2014, an outstanding short-term loan of $376 million and $316 million, respectively, to Toys-Delaware was recorded in Due from subsidiary.

For fiscals 2014, 2013 and 2012, the income tax expense of $32 million, $169 million and $53 million, respectively, represents the Parent Company’s consolidated income tax expense. Such amounts include income tax expense of $91 million, $127 million and $105 million, respectively, related to our subsidiaries, which have not been consolidated for this presentation. The Parent Company is responsible for cash income tax payments on the separate company income of such subsidiaries for United States Federal and certain state filings.

DEBT

A summary of the Parent Company’s Long-term debt as of January 31, 2015 and February 1, 2014 is outlined in the table below:

(In millions)	January 31, 2015		February 1, 2014
10.375% senior notes, due fiscal 2017	448		447
7.375% senior notes, due fiscal 2018	402		403
8.750% debentures, due fiscal 2021 (1)	22		22
Total Long-term debt	$	872	$	872

(1) Represents obligations of Toys “R” Us, Inc. and Toys–Delaware.

The total fair values of the Parent Company’s Long-term debt, with carrying values of $872 million at January 31, 2015 and February 1, 2014, respectively, were $639 million and $687 million, respectively. The fair values of the Parent Company’s 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.

The annual maturities of the Parent Company’s Long-term debt at January 31, 2015 are as follows:

(In millions)	Annual Maturities
2015	$	—
2016	—
2017	450
2018	400
2019	—
2020 and subsequent	22
Total	$	872

The Parent Company is a co-obligor of the outstanding debentures due fiscal 2021, and these debt securities are included in Long-term debt within the Parent Company Condensed Balance Sheets for stand-alone reporting purposes. However, it is expected all future principal and interest payments will be funded through the operating cash flows of Toys-Delaware. During fiscals 2014, 2013 and 2012, Toys-Delaware recorded interest expense related to the outstanding debentures due fiscal 2021 of $2 million, respectively, which is reflected as part of (Deficit) equity in pre-tax (loss) earnings of consolidated subsidiaries in the Parent Company Condensed Statements of Operations and Comprehensive Loss.

The Parent Company provides guarantees related to the uncommitted credit lines of Labuan in an aggregate amount up to HK$257 million ($33 million at January 31, 2015) for future borrowings. During fiscal 2012, the Parent Company provided the lenders of the Spain Propco Facility Agreement entered into on January 29, 2013 with a deficiency guarantee with respect to certain losses the lenders may suffer in certain circumstances.

For a discussion of the debt obligations of the Parent Company and its subsidiaries, see Note 2 to the Consolidated Financial Statements entitled “SHORT-TERM BORROWINGS AND LONG-TERM DEBT.”

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 Parent Company Condensed 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 and losses depends on our intended use of the derivatives and the resulting designation. In certain defined conditions, a derivative may be specifically designated 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 attributable to the changes in LIBOR rates. Some of our interest rate contracts may contain credit-risk related contingent features and are subject to master netting arrangements. As of January 31, 2015, our interest rate contracts have maturity dates through April 2015.

At January 31, 2015 and February 1, 2014, we had no derivative liabilities related to agreements that contain credit-risk related contingent features. As of January 31, 2015 and February 1, 2014, we were not required to post collateral with any derivative counterparties.

The following table presents our outstanding interest rate contracts as of January 31, 2015 and February 1, 2014:

			January 31, 2015		February 1, 2014
(In millions)	Effective Date	Maturity Date	Notional  Amount		Notional  Amount
Interest Rate Caps
1 Month USD LIBOR Interest Rate Cap (1)	January 2011	April 2015	$	500	$	500
1 Month USD LIBOR Interest Rate Cap (1)	January 2012	April 2015	500		500
1 Month USD LIBOR Interest Rate Cap (1)	January 2014	April 2015	311		311

(1) These interest rate caps are not designated as cash flow hedges in accordance with ASC 815.

Foreign Exchange Contracts

We occasionally enter into foreign currency forward contracts to economically hedge our short-term, cross-currency intercompany loans with 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 the Parent Company Condensed Balance Sheets at fair value with a gain or loss recorded on the Parent Company Condensed Statements of Operations and Comprehensive Loss in Interest expense, net. At January 31, 2015 and February 1, 2014, we had no outstanding foreign exchange contracts.

Our foreign exchange contracts typically mature within 12 months. Some of these contracts may contain credit-risk related contingent features and are subject to master netting arrangements. Some of these agreements contain provisions where we could be declared in default on our derivative obligations if we default on certain specified indebtedness. At January 31, 2015 and February 1, 2014, derivative liabilities related to agreements that contain credit-risk related contingent features had a fair value of $2 million and less than $1 million, respectively. We are not required to post collateral for these contracts.

The following table sets forth the net impact of the effective portion of Parent Company’s derivatives on Accumulated other comprehensive (loss) income for the fiscal years ended January 31, 2015, February 1, 2014 and February 2, 2013:

	Fiscal Years Ended
(In millions)	January 31, 2015			February 1, 2014		February 2, 2013
Derivatives previously designated as cash flow hedges:
Beginning balance	$	1		$	1	$	1
Reclassifications from Accumulated other comprehensive      (loss) income - Interest Rate Contracts	(1		)	—		—
	(1		)	—		—
Ending balance	$	—		$	1	$	1

The following table sets forth the impact of derivatives on Interest expense, net on the Parent Company Condensed Statements of Operations and Comprehensive Loss for the fiscal years ended January 31, 2015, February 1, 2014 and February 2, 2013:

	Fiscal Years Ended
(In millions)	January 31, 2015		February 1, 2014			February 2, 2013
Derivatives not designated for hedge accounting:
Loss on the change in fair value - Intercompany Loan Foreign Exchange Contracts (1)	$	—	$	(1	)	$	—
	—		(1		)	—
Derivatives previously designated as cash flow hedges:
Amortization of hedged caps	1		—			—
	1		—			—
Total Interest expense, net	$	1	$	(1	)	$	—

(1) Gains and losses related to our short-term, intercompany loan foreign exchange contracts are recorded in Interest expense, net, in addition to the corresponding foreign exchange gains and losses related to our short-term, cross-currency intercompany loans. For further details related to gains and losses resulting from foreign currency transactions, refer to Note 1 to our Consolidated Financial Statements entitled “SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.”

The following table contains the notional amounts and fair values of Parent Company’s outstanding derivative contracts as of January 31, 2015 and February 1, 2014:

	January 31, 2015				February 1, 2014
	Notional		Fair Value Assets/		Notional		Fair Value Assets/
(In millions)	Amount		(Liabilities)		Amount		(Liabilities)
Interest Rate Contracts not designated for hedge accounting:
Prepaid expenses and other current assets (1)	$	1,311	$	—	$	—	$	—
Other assets	$	—	$	—	$	1,311	$	—

(1) Amounts as of January 31, 2015 includes reclassifications of contracts scheduled to mature within the next 12 months, which were previously included within Other assets as of February 1, 2014.

Refer to Note 3 to our Consolidated Financial Statements entitled “DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES” for further details on derivative instruments.

Offsetting of Derivatives

We present our derivatives at gross fair values in the Parent Company Condensed 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 January 31, 2015 and February 1, 2014, 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 January 31, 2015 and February 1, 2014, none of the master netting arrangements involved collateral.

COMMITMENTS AND CONTINGENCIES

Although the Parent Company does not currently have material legal proceedings pending against it, it may be subject to various claims and contingencies related to lawsuits, as well as commitments under contractual and other obligations. Refer to Note 14 to our Consolidated Financial Statements entitled “LITIGATION AND LEGAL PROCEEDINGS” for further information. Additionally, the Parent Company is a guarantor on certain leases entered into by its subsidiaries. For a discussion of the lease obligations of the Parent Company and its subsidiaries, see Note 9 to our Consolidated Financial Statements entitled “LEASES.”

DISTRIBUTIONS AND CAPITAL CONTRIBUTIONS

Distributions

The Parent Company received cash distributions (inclusive of returns of capital) from certain of its subsidiaries of $93 million, $202 million and $203 million during fiscals 2014, 2013 and 2012, respectively. The cash distributions received included $79 million and $129 million in fiscals 2013 and 2012, respectively, from its subsidiary Toys-Delaware. No cash distributions were received from Toys-Delaware in fiscal 2014.

The cash distributions received also included $93 million, $123 million and $72 million, in fiscals 2014, 2013 and 2012, respectively, from certain of our property subsidiaries, which included no returns of capital in fiscal 2014 and returns of capital of $109 million and $10 million in fiscals 2013 and 2012, respectively. The cash distributions received during fiscals 2014, 2013 and 2012 from our property subsidiary TRU Propco I were $86 million, $115 million and $64 million, respectively.

Capital Contributions

During fiscal 2014, Parent Company made a capital contribution of $5 million to TRU Asia, Ltd., $1 million of which it used to pay contingent consideration related to the Labuan acquisition.

During fiscal 2013, Parent Company made a capital contribution of $274 million to Toys Europe, which it used in connection with the refinancing of the UK real estate credit facility. Additionally, during fiscal 2013, Parent Company made a capital contribution of $10 million to Toys Europe to assist in the funding of the Spain Propco Facility Agreement debt repayment for the fourth quarter of fiscal 2013. During fiscal 2012, Parent Company made a capital contribution of $30 million to Toys Europe, which it used in connection with the refinancing of the Spain Propco Facility. Refer to Note 2 to our Consolidated Financial Statements entitled “SHORT-TERM BORROWINGS AND LONG-TERM DEBT” for further details.

Additionally, during fiscal 2012, Parent Company made a capital contribution of $5 million to TRU Asia, Ltd., which it used to pay contingent consideration related to the Labuan acquisition.