SEGMENT INFORMATION

12 Months Ended

Jan. 31, 2016

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 14—SEGMENT INFORMATION

        HD Supply's operating segments are based on management structure and internal reporting. Each segment offers different products and services to the end customer, except for Corporate, which provides general corporate overhead support. The Company determines the reportable segments in accordance with the principles of segment reporting within ASC 280, Segment Reporting. For purposes of evaluation under these segment reporting principles, the Chief Operating Decision Maker for HD Supply assesses HD Supply's ongoing performance, based on the periodic review and evaluation of Net sales, Adjusted EBITDA, and certain other measures for each of the operating segments.

        HD Supply has three reportable segments, each of which is presented below:

•           Facilities Maintenance—Facilities Maintenance distributes maintenance, repair and operations ("MRO") products, provides value-add services and fabricates custom products to multifamily, hospitality, healthcare and institutional facilities.

•           Waterworks—Waterworks distributes complete lines of water and wastewater transmission products, serving contractors and municipalities in the water and wastewater industries for non-residential and residential uses.

•           Construction & Industrial—White Cap—Construction & Industrial distributes specialized hardware, tools, engineered materials and safety products to non-residential and residential contractors.

        In addition to the reportable segments, the Company's consolidated financial results include "Corporate & Other." Corporate & Other is comprised of the following operating segments: Interior Solutions and Home Improvement Solutions. Interior Solutions offers turnkey supply and installation services for multiple interior finish options, including flooring, cabinets, countertops, and window coverings, along with comprehensive design center services for residential, commercial and senior living projects. Home Improvement Solutions offers light remodeling and construction supplies, kitchen and bath cabinets, windows, plumbing materials, electrical equipment and other products, primarily to small remodeling contractors and trade professionals. Corporate & Other also includes costs related to our centralized support functions, which are comprised of finance, information technology, human resources, legal, supply chain and other support services, and removes inter-segment transactions.

        Beginning in the fourth quarter of fiscal 2015, management combined the HD Supply Canada business unit with the Construction & Industrial—White Cap business unit, reflecting the continued integration of the Canadian Brafasco business into Construction & Industrial—White Cap. All periods presented have been revised to reflect the combined business unit.

        The following tables present Net sales, Adjusted EBITDA, and certain other measures for each of the reportable segments and total continuing operations for the periods indicated (amounts in millions):

	Fiscal Year 2015
	Facilities Maintenance		Waterworks		Construction & Industrial— White Cap		Corporate & Other(2)			Total Continuing Operations
Net sales	$	2,690		2,510		1,733		455		$	7,388
Adjusted EBITDA	$	529		222		160		(33	)	$	878
Depreciation(1) & Software Amortization	$	43		11		26		21		$	101
Other Intangible Amortization	$	6		2		1		6		$	15
Total Assets	$	2,358		1,636		633		1,389		$	6,016
Capital Expenditures	$	20		10		28		28		$	86

	Fiscal Year 2014
	Facilities Maintenance		Waterworks		Construction & Industrial— White Cap		Corporate & Other(2)			Total Continuing Operations
Net sales	$	2,510		2,427		1,570		463		$	6,970
Adjusted EBITDA	$	491		198		116		(30	)	$	775
Depreciation(1) & Software Amortization	$	50		11		22		23		$	106
Other Intangible Amortization	$	57		3		14		6		$	80
Total Assets	$	2,390		1,640		617		1,330		$	5,977
Capital Expenditures	$	32		15		30		42		$	119

	Fiscal Year 2013
	Facilities Maintenance		Waterworks		Construction & Industrial— White Cap		Corporate & Other(2)			Total Continuing Operations
Net sales	$	2,331		2,227		1,381		448		$	6,387
Adjusted EBITDA	$	434		173		86		(35	)	$	658
Depreciation(1) & Software Amortization	$	45		10		17		25		$	97
Other Intangible Amortization	$	81		4		20		5		$	110
Total Assets	$	2,433		1,585		590		1,619		$	6,227
Capital Expenditures	$	42		12		25		52		$	131

(1)	Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations.
(2)	Total Assets and capital expenditures include amounts attributable to discontinued operations for the periods prior to the dispositions.

Reconciliation to Consolidated Financial Statements

	Fiscal 2015			Fiscal 2014			Fiscal 2013
Total Adjusted EBITDA	$	878		$	775		$	658
Depreciation and amortization		116			186			207
Stock-based compensation		16			17			16
Management fees and expenses		—			—			2
Restructuring		10			6			6
Other		—			(1	)		—
Operating income		736			567			427
Interest expense		394			462			528
Loss on extinguishment & modification of debt		100			108			87
Other (income) expense, net		1			(3	)		20
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes		241			—			(208	)
Provision (benefit) for income taxes		(1,085	)		42			44
Income (loss) from continuing operations	$	1,326		$	(42	)	$	(252	)

        Net sales for HD Supply outside the United States, primarily Canada, were $125 million, $130 million, and $133 million in fiscal 2015, fiscal 2014, and fiscal 2013, respectively. Long-lived assets of HD Supply outside the United States, primarily Canada, were $6 million and $13 million as of January 31, 2016 and February 1, 2015, respectively.