SUBSIDIARY GUARANTORS (Tables)

6 Months Ended

Aug. 03, 2014

SUBSIDIARY GUARANTORS

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	Three Months Ended August 3, 2014
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net Sales	$	—		$	2,355		$	93		$	(1	)	$	2,447
Cost of sales	—			1,657			68			—			1,725
Gross Profit	—			698			25			(1		)	722
Operating expenses:	—			—			—			—
Selling, general and administrative	16			436			17			(1		)	468
Depreciation and amortization	3			60			1			—			64
Restructuring	1			3			—			—			4
Total operating expenses	20			499			18			(1		)	536
Operating Income (Loss)	(20		)	199			7			—			186
Interest expense	116			61			—			(61		)	116
Interest (income)	(60		)	(1		)	—			61			—
Net (earnings) loss of equity affiliates	(47		)	—			—			47			—
Loss on extinguishment & modification of debt	—			—			—			—			—
Other (income) expense, net	—			—			—			—			—
Income (Loss) From Continuing Operations Before Provision (Benefit) for Income Taxes	(29		)	139			7			(47		)	70
Provision (benefit) for income taxes	(77		)	97			2			—			22
Income (Loss) from Continuing Operations	48			42			5			(47		)	48
Income (loss) from discontinued operations, net of tax	—			2			(2		)	—			—
Net Income (Loss)	$	48		$	44		$	3		$	(47	)	$	48
Other comprehensive income (loss) — foreign currency translation adjustment	1			—			1			(1		)	1
Total Comprehensive Income (Loss)	$	49		$	44		$	4		$	(48	)	$	49

	Three Months Ended August 4, 2013
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net Sales	$	—		$	2,136		$	102		$	(1	)	$	2,237
Cost of sales	—			1,504			76			—			1,580
Gross Profit	—			632			26			(1		)	657
Operating expenses:
Selling, general and administrative	22			407			16			(1		)	444
Depreciation and amortization	4			56			1			—			61
Total operating expenses	26			463			17			(1		)	505
Operating Income (Loss)	(26		)	169			9			—			152
Interest expense	145			73			2			(75		)	145
Interest (income)	(75		)	—			—			75			—
Net (earnings) loss of equity affiliates	(127		)	—			—			127			—
Loss on extinguishment & Modification of debt	46			—			—			—			46
Other (income) expense, net	20			—			—			—			20
Income (Loss) From Continuing Operations Before Provision (Benefit) for Income Taxes	(35		)	96			7			(127		)	(59		)
Provision (benefit) for income taxes	37			(25		)	—			—			12
Income (Loss) from Continuing Operations	(72		)	121			7			(127		)	(71		)
Income (loss) from discontinued operations, net of tax	—			—			(1		)	—			(1		)
Net Income (Loss)	$	(72	)	$	121		$	6		$	(127	)	$	(72	)
Other comprehensive income (loss) — foreign currency translation adjustment	(3		)	—			(3		)	3			(3		)
Total Comprehensive Income (Loss)	$	(75	)	$	121		$	3		$	(124	)	$	(75	)

	Six Months Ended August 3, 2014
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net Sales	$	—		$	4,428		$	181		$	(1	)	$	4,608
Cost of sales	—			3,121			134			—			3,255
Gross Profit	—			1,307			47			(1		)	1,353
Operating expenses:
Selling, general and administrative	32			852			32			(1		)	915
Depreciation and amortization	8			117			1			—			126
Restructuring	1			5			1			—			7
Total operating expenses	41			974			34			(1		)	1,048
Operating Income (Loss)	(41		)	333			13			—			305
Interest expense	233			121			—			(122		)	232
Interest (income)	(120		)	(2		)	—			122			—
Net (earnings) loss of equity affiliates	(136		)	—			—			136			—
Loss on extinguishment & modification of debt	2			—			—			—			2
Other (income) expense, net	1			—			—			—			1
Income (Loss) From Continuing Operations Before Provision (Benefit) for Income Taxes	(21		)	214			13			(136		)	70
Provision (benefit) for income taxes	(57		)	78			2			—			23
Income (Loss) from Continuing Operations	36			136			11			(136		)	47
Income (loss) from discontinued operations, net of tax	—			2			(13		)	—			(11		)
Net Income (Loss)	$	36		$	138		$	(2	)	$	(136	)	$	36
Other comprehensive income (loss) — foreign currency translation adjustment	2			—			2			(2		)	2
Total Comprehensive Income (Loss)	$	38		$	138		$	—		$	(138	)	$	38

	Six Months Ended August 4, 2013
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net Sales	$	—		$	4,102		$	184		$	(1	)	$	4,285
Cost of sales	—			2,900			135			—			3,035
Gross Profit	—			1,202			49			(1		)	1,250
Operating expenses:
Selling, general and administrative	41			805			32			(1		)	877
Depreciation and amortization	8			111			1			—			120
Total operating expenses	49			916			33			(1		)	997
Operating Income (Loss)	(49		)	286			16			—			253
Interest expense	292			148			2			(150		)	292
Interest (income)	(149		)	(1		)	—			150			—
Net (earnings) loss of equity affiliates	(196		)	—			—			196			—
Loss on extinguishment & modification of debt	87			—			—			—			87
Other (income) expense, net	20			—			—			—			20
Income (Loss) From Continuing Operations Before Provision (Benefit) for Income Taxes	(103		)	139			14			(196		)	(146		)
Provision (benefit) for income taxes	100			(46		)	1			—			55
Income (Loss) from Continuing Operations	(203		)	185			13			(196		)	(201		)
Income (loss) from discontinued operations, net of tax	—			—			(2		)	—			(2		)
Net Income (Loss)	$	(203	)	$	185		$	11		$	(196	)	$	(203	)
Other comprehensive income (loss) — foreign currency translation adjustment	(4		)	—			(4		)	4			(4		)
Total Comprehensive Income (Loss)	$	(207	)	$	185		$	7		$	(192	)	$	(207	)

Condensed Consolidating Balance Sheets

CONDENSED CONSOLIDATING BALANCE SHEETS

	As of August 3, 2014
	Debt Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total HDS
ASSETS
Current assets:
Cash and cash equivalents	$	161		$	21	$	25	$	—		$	207
Receivables, net	2			1,247		59		—			1,308
Inventories	—			1,132		49		—			1,181
Deferred tax asset	—			57		3		(53		)	7
Intercompany receivable	—			1		—		(1		)	—
Other current assets	8			36		6		—			50
Total current assets	171			2,494		142		(54		)	2,753
Property and equipment, net	56			343		4		—			403
Goodwill	—			3,132		5		—			3,137
Intangible assets, net	—			267		3		—			270
Deferred tax asset	25			—		3		(25		)	3
Investment in subsidiaries	3,467			—		—		(3,467		)	—
Intercompany notes receivable	2,192			549		—		(2,741		)	—
Other assets	119			7		—		—			126
Total assets	$	6,030		$	6,792	$	157	$	(6,287	)	$	6,692
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	11		$	829	$	37	$	—		$	877
Accrued compensation and benefits	43			89		4		—			136
Current installments of long-term debt	10			—		—		—			10
Deferred tax liabilities	53			—		—		(53		)	—
Intercompany payable	—			—		1		(1		)	—
Other current liabilities	175			122		16		—			313
Total current liabilities	292			1,040		58		(54		)	1,336
Long-term debt, excluding current installments	5,640			—		—		—			5,640
Deferred tax liabilities	—			154		—		(25		)	129
Intercompany notes payable	549			2,192		—		(2,741		)	—
Other liabilities	271			34		4		—			309
Total liabilities	6,752			3,420		62		(2,820		)	7,414
Stockholder’s equity (deficit)	(722		)	3,372		95		(3,467		)	(722		)
Total liabilities and stockholder’s equity (deficit)	$	6,030		$	6,792	$	157	$	(6,287	)	$	6,692

	As of February 2, 2014
	Debt Issuer			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Total HDS
ASSETS
Current assets:
Cash and cash equivalents	$	53		$	17	$	41	$	—		$	111
Receivables, net	2			984		60		—			1,046
Inventories	—			1,024		48		—			1,072
Deferred tax asset	—			58		1		(52		)	7
Other current assets	15			26		22		—			63
Total current assets	70			2,109		172		(52		)	2,299
Property and equipment, net	60			341		4		—			405
Goodwill	—			3,132		5		—			3,137
Intangible assets, net	—			335		3		—			338
Deferred tax asset	40			—		5		(40		)	5
Investment in subsidiaries	3,452			—		—		(3,452		)	—
Intercompany notes receivable	2,192			605		—		(2,797		)	—
Other assets	128			6		2		—			136
Total assets	$	5,942		$	6,528	$	191	$	(6,341	)	$	6,320
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	11		$	618	$	35	$	—		$	664
Accrued compensation and benefits	45			98		6		—			149
Current installments of long-term debt	10			—		—		—			10
Deferred tax liabilities	50			—		—		(50		)	—
Other current liabilities	148			103		19		—			270
Total current liabilities	264			819		60		(50		)	1,093
Long-term debt, excluding current installments	5,534			—		—		—			5,534
Deferred tax liabilities	—			156		—		(42		)	114
Intercompany notes payable	605			2,192		—		(2,797		)	—
Other liabilities	307			34		6		—			347
Total liabilities	6,710			3,201		66		(2,889		)	7,088
Stockholder’s equity (deficit)	(768		)	3,327		125		(3,452		)	(768		)
Total liabilities and stockholder’s equity (deficit)	$	5,942		$	6,528	$	191	$	(6,341	)	$	6,320

Condensed Consolidating Cash Flow Statements

CONDENSED CONSOLIDATING CASH FLOW STATEMENTS

	Six Months Ended August 3, 2014
	Debt Issuer			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Total HDS
Net cash flows from operating activities	$	44		$	—		$	10		$	—		$	54
Cash flows from investing activities
Capital expenditures	(8		)	(53		)	—			—			(61		)
Investments in equity affiliates - Return of capital	27			—			—			(27		)	—
Proceeds from sale of property and equipment	—			1			—			—			1
Proceeds from (payments of) intercompany notes	—			56			—			(56		)	—
Net cash flows from investing activities	19			4			—			(83		)	(60		)
Cash flows from financing activities
Equity contribution (return of capital)	—			—			(27		)	27			—
Borrowings (repayments) of intercompany notes	(56		)	—			—			56			—
Borrowings of long-term debt	20			—			—			—			20
Repayments of long-term debt	(24		)	—			—			—			(24		)
Borrowings on long-term revolver	306			—			—			—			306
Repayments of long-term revolver	(196		)	—			—			—			(196		)
Debt issuance and modification fees	(3		)	—			—			—			(3		)
Other financing activities	(2		)				—			—			(2		)
Net cash flows from financing activities	45			—			(27		)	83			101
Effect of exchange rates on cash	—			—			1			—			1
Net increase (decrease) in cash & cash equivalents	$	108		$	4		$	(16	)	$	—		$	96
Cash and cash equivalents at beginning of period	53			17			41			—			111
Cash and cash equivalents at end of period	$	161		$	21		$	25		$	—		$	207

	Six Months Ended August 4, 2013
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net cash flows from operating activities	$	(550	)	$	(26	)	$	(1	)	$	—		$	(577	)
Cash flows from investing activities
Capital expenditures	(11		)	(52		)	(1		)	—			(64		)
Proceeds from sale of property and equipment	—			5			—			—			5
Settlement of acquisition of a business	—			2			—			—			2
Proceeds from sale of investments	936			—			—			—			936
(Investment in) return of capital of equity affiliates	2			—			—			(2		)	—
Proceeds from (payments of) intercompany notes	—			76			—			(76		)	—
Net cash flows from investing activities	$	927		$	31		$	(1	)	$	(78	)	$	879
Cash flows from financing activities
Equity contribution (return of capital)	$	1,038		$	(2	)	$	—		$	2		$	1,038
Borrowings (repayments) of intercompany notes	(76		)	—			—			76			—
Borrowings of long-term debt	79			—			—			—			79
Repayments of long-term debt	(1,619		)	—			—			—			(1,619		)
Borrowings on long-term revolver	520			—			—			—			520
Repayments of long-term revolver	(320		)	—			—			—			(320		)
Debt issuance and modification fees	(34		)	—			—			—			(34		)
Other financing activities	3			—			—			—			3
Net cash flows from financing activities	$	(409	)	$	(2	)	$	—		$	78		$	(333	)
Effect of exchange rates on cash	—			—			(1		)	—			(1		)
Net increase (decrease) in cash & cash equivalents	$	(32	)	$	3		$	(3	)	$	—		$	(32	)
Cash and cash equivalents at beginning of period	91			15			35			—			141
Cash and cash equivalents at end of period	$	59		$	18		$	32		$	—		$	109