DISCONTINUED OPERATIONS

9 Months Ended

Nov. 01, 2015

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 3 — DISCONTINUED OPERATIONS

In October 2015, the Company completed the sale of its Power Solutions business. The Company received cash proceeds of approximately $810 million, net of $15 million of transaction costs. The Company realized approximately $20 million in cumulative currency translation losses related to the Canadian operations of the Power Solutions business unit. As a result of the sale, the Company recorded a $186 million pre-tax gain.

In January 2015, the Company completed the sale of substantially all of the assets of its Hardware Solutions business. The Company received cash proceeds of approximately $198 million, net of $2 million of transaction costs. As a result of the sale, the Company recorded an $8 million pre-tax gain in fiscal 2014.

In January 2014, the Company approved the disposal of Litemor, a specialty lighting distributor within the Company’s HD Supply Canada business. During fiscal 2014, the Company finalized the disposal process of Litemor through liquidation and branch sales, resulting in a pre-tax loss on disposal of $15 million, which includes cash and non-cash charges.

Summary Financial Information

In accordance with Accounting Standards Codification (“ASC”) 205-20, “Discontinued Operations” and Accounting Standards Update (“ASU”) 2014-08, “Reporting discontinued operations and disclosure of disposals of components of an entity,” the results of Power Solutions are classified as a discontinued operation. The results of the Hardware Solutions and Litemor operations and the gains/losses on sales of the businesses are also classified as discontinued operations. The presentation of discontinued operations includes revenues and expenses of the discontinued operations and gain/loss on the disposition of businesses, net of tax, as one line item on the Consolidated Statements of Operations and Comprehensive Income. All Consolidated Statements of Operations and Comprehensive Income presented have been revised to reflect this presentation.

The following table provides additional detail related to the results of operations of the discontinued operations (amounts in millions):

	Three Months Ended				Nine Months Ended
	November 1, 2015		November 2, 2014		November 1, 2015		November 2, 2014
Net Sales	$	367	$	574	$	1,391	$	1,686
Cost of sales		313		463		1,185		1,364
Gross Profit		54		111		206		322
Operating expenses:
Selling, general and administrative		39		77		155		245
Depreciation and amortization		5		10		18		32
Restructuring		—		—		—		1
Total operating expenses		44		87		173		278
Gain on sale of business		186		—		186		—
Other (income) expense, net		3		—		3		—
Income before provision for income taxes	$	193	$	24	$	216	$	44
Provision (benefit) for income taxes		(42)		4		(36)		8
Income from discontinued operations, net of tax	$	235	$	20	$	252	$	36

At November 1, 2015 and February 1, 2015, the carrying amounts of major classes of assets and liabilities of discontinued operations included in the Consolidated Balance Sheets were as follows (amounts in millions):

		November 1, 2015	February 1, 2015
Current assets:
Receivables, less allowance for doubtful accounts of $0 and $1	$	—	$	221
Inventories		—		284
Other current assets		—		4
Total current assets		—		509
Goodwill		—		202
Intangible assets, net		—		55
Other non-current assets		—		38
Total assets of discontinued operations	$	—	$	804
Current liabilities:
Accounts payable	$	—	$	178
Accrued compensation and benefits		—		18
Other current liabilities		—		21
Total liabilities of discontinued operations	$	—	$	217

For the nine months ended November 1, 2015, net cash provided by operating and investing activities, related to discontinued operations, were approximately $30 million and $808 million, respectively. Fiscal 2015 investing activities are inclusive of $810 million of net sales proceeds related to the Power Solutions transaction. For the nine months ended November 2, 2014, net cash provided by operating activities and used in investing activities, related to discontinued operations, were approximately $101 million and $16 million, respectively.