SUBSIDIARY GUARANTORS (Tables)

9 Months Ended

Oct. 29, 2017

SUBSIDIARY GUARANTORS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed consolidating statements of operations and comprehensive income (loss), the condensed consolidating balance sheets and the condensed consolidating cash flow statements for the Debt Issuer, for the Subsidiary Guarantors and the Non-guarantor Subsidiaries and total consolidated amount for the Debt Issuer and subsidiaries (amounts in millions).

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	Three Months Ended October 29, 2017
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Total HDS
Net Sales	$	—		$	1,333		$	37	$	—		$	1,370
Cost of sales	—			808			20		—			828
Gross Profit	—			525			17		—			542
Operating expenses:
Selling, general and administrative	22			303			11		—			336
Depreciation and amortization	4			17			—		—			21
Restructuring	2			1			—		—			3
Total operating expenses	28			321			11		—			360
Operating Income (Loss)	(28		)	204			6		—			182
Interest expense	43			33			—		(40		)	36
Interest income	(33		)	(8		)	—		40			(1		)
Loss on extinguishment & modification of debt	78			—			—		—			78
Net (earnings) loss of equity affiliates	(189		)	—			—		189			—
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	73			179			6		(189		)	69
Provision (Benefit) for income taxes	24			(2		)	1		—			23
Income (Loss) from Continuing Operations	49			181			5		(189		)	46
Income from discontinued operations, net of tax	403			—			3		—			406
Net Income (Loss)	$	452		$	181		$	8	$	(189	)	$	452
Other comprehensive income (loss)—foreign currency translation adjustment	1			—			1		(1		)	1
Total Comprehensive Income (Loss)	$	453		$	181		$	9	$	(190	)	$	453

	Three Months Ended October 30, 2016
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net Sales	$	—		$	1,244		$	31		$	—		$	1,275
Cost of sales	—			747			16			—			763
Gross Profit	—			497			15			—			512
Operating expenses:
Selling, general and administrative	20			298			11			—			329
Depreciation and amortization	4			17			—			—			21
Restructuring	1			2			—			—			3
Total operating expenses	25			317			11			—			353
Operating Income (Loss)	(25		)	180			4			—			159
Interest expense	70			34			1			(40		)	65
Interest income	(35		)	(5		)	—			40			—
Loss on extinguishment of debt	59			—			—			—			59
Net (earnings) loss of equity affiliates	(200		)	—			—			200			—
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	81			151			3			(200		)	35
Provision (Benefit) for income taxes	16			(1		)	—			—			15
Income (Loss) from Continuing Operations	65			152			3			(200		)	20
Income (loss) from discontinued operations, net of tax	(5		)	45			—			—			40
Net Income (Loss)	$	60		$	197		$	3		$	(200	)	$	60
Other comprehensive income (loss)—foreign currency translation adjustment	(1		)	—			(1		)	1			(1		)
Total Comprehensive Income (Loss)	$	59		$	197		$	2		$	(199	)	$	59

	Nine Months Ended October 29, 2017
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net Sales	$	—		$	3,834		$	105		$	(1	)	$	3,938
Cost of sales	—			2,317			57			(1		)	2,373
Gross Profit	—			1,517			48			—			1,565
Operating expenses:
Selling, general and administrative	64			908			36			—			1,008
Depreciation and amortization	11			51			1			—			63
Restructuring	2			1			—			—			3
Total operating expenses	77			960			37			—			1,074
Operating Income (Loss)	(77		)	557			11			—			491
Interest expense	155			99			1			(121		)	134
Interest income	(99		)	(23		)	—			121			(1		)
Net (earnings) loss of equity affiliates	(583		)	—			—			583			—
Loss on extinguishment & modification of debt	81			—			—			—			81
Income (Loss) from Continuing Operations Before Provision for Income Taxes	369			481			10			(583		)	277
Provision for income taxes	90			—			2			—			92
Income (Loss) from Continuing Operations	279			481			8			(583		)	185
Income from discontinued operations, net of tax	700			91			3			—			794
Net Income (Loss)	$	979		$	572		$	11		$	(583	)	$	979
Other comprehensive income (loss)—foreign currency translation adjustment	(1		)	—			(1		)	1			(1		)
Total Comprehensive Income (Loss)	$	978		$	572		$	10		$	(582	)	$	978

	Nine Months Ended October 30, 2016
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Total HDS
Net Sales	$	—		$	3,642		$	93	$	(1	)	$	3,734
Cost of sales	—			2,191			50		(1		)	2,240
Gross Profit	—			1,451			43		—			1,494
Operating expenses:
Selling, general and administrative	61			860			33		—			954
Depreciation and amortization	10			52			1		—			63
Restructuring	3			11			—		—			14
Total operating expenses	74			923			34		—			1,031
Operating Income (Loss)	(74		)	528			9		—			463
Interest expense	231			104			1		(117		)	219
Interest income	(104		)	(13		)	—		117			—
Net (earnings) loss of equity affiliates	(545		)	—			—		545			—
Loss on extinguishment of debt	174			—			—		—			174
Income (Loss) from Continuing Operations Before Provision for Income Taxes	170			437			8		(545		)	70
Provision for income taxes	28			—			2		—			30
Income (Loss) from Continuing Operations	142			437			6		(545		)	40
Income from discontinued operations, net of tax	2			102			—		—			104
Net Income (Loss)	$	144		$	539		$	6	$	(545	)	$	144
Other comprehensive income (loss)—foreign currency translation adjustment	1			—			1		(1		)	1
Total Comprehensive Income (Loss)	$	145		$	539		$	7	$	(546	)	$	145

CONDENSED CONSOLIDATING BALANCE SHEETS

The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed consolidating statements of operations and comprehensive income (loss), the condensed consolidating balance sheets and the condensed consolidating cash flow statements for the Debt Issuer, for the Subsidiary Guarantors and the Non-guarantor Subsidiaries and total consolidated amount for the Debt Issuer and subsidiaries (amounts in millions).

CONDENSED CONSOLIDATING BALANCE SHEETS

	As of October 29, 2017
	Debt Issuer		Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Total HDS
ASSETS
Current assets:
Cash and cash equivalents	$	441	$	15	$	5		$	—		$	461
Receivables, net	5		662		22			—			689
Inventories	—		643		19			—			662
Intercompany receivables	—		1		—			(1		)	—
Other current assets	18		18		1			—			37
Total current assets	464		1,339		47			(1		)	1,849
Property and equipment, net	122		173		3			—			298
Goodwill	—		1,807		—			—			1,807
Intangible assets, net	—		93		—			—			93
Deferred tax asset	423		—		2			(127		)	298
Investment in subsidiaries	2,801		—		—			(2,801		)	—
Intercompany notes receivable	1,005		1,083		—			(2,088		)	—
Other assets	16		3		—			—			19
Total assets	$	4,831	$	4,498	$	52		$	(5,017	)	$	4,364
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	9	$	382	$	14		$	—		$	405
Accrued compensation and benefits	36		45		3			—			84
Current installments of long-term debt	11		—		—			—			11
Intercompany payables	—		—		1			(1		)	—
Other current liabilities	61		91		7			—			159
Total current liabilities	117		518		25			(1		)	659
Long-term debt, excluding current installments	2,030		—		57			—			2,087
Deferred tax liabilities	—		127		—			(127		)	—
Intercompany notes payable	1,083		1,005		—			(2,088		)	—
Other liabilities	106		17		—			—			123
Total liabilities	3,336		1,667		82			(2,216		)	2,869
Stockholder’s equity (deficit)	1,495		2,831		(30		)	(2,801		)	1,495
Total liabilities and stockholder’s equity (deficit)	$	4,831	$	4,498	$	52		$	(5,017	)	$	4,364

	As of January 29, 2017
	Debt Issuer		Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Total HDS
ASSETS
Current assets:
Cash and cash equivalents	$	51	$	17	$	5		$	—		$	73
Receivables, net	3		540		16			—			559
Inventories	—		588		18			—			606
Intercompany receivables	—		1		—			(1		)	—
Current assets of discontinued operations	—		575		—			—			575
Other current assets	13		17		2			—			32
Total current assets	67		1,738		41			(1		)	1,845
Property and equipment, net	76		175		2			—			253
Goodwill	—		1,807		—			—			1,807
Intangible assets, net	—		101		1			—			102
Deferred tax asset	681		—		2			(127		)	556
Non-current assets of discontinued operations	—		1,122		—			—			1,122
Investment in subsidiaries	2,451		—		—			(2,451		)	—
Intercompany notes receivable	2,192		584		—			(2,776		)	—
Other assets	16		4		—			—			20
Total assets	$	5,483	$	5,531	$	46		$	(5,355	)	$	5,705
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	13	$	296	$	11		$	—		$	320
Accrued compensation and benefits	36		60		2			—			98
Current installments of long-term debt	14		—		—			—			14
Intercompany payables	—		—		1			(1		)	—
Current liabilities of discontinued operations	2		257		—			—			259
Other current liabilities	52		94		6			—			152
Total current liabilities	117		707		20			(1		)	843
Long-term debt, excluding current installments	3,737		—		61			—			3,798
Deferred tax liabilities	—		127		—			(127		)	—
Non-current liabilities of discontinued operations	20		—		—			—			20
Intercompany notes payable	584		2,192		—			(2,776		)	—
Other liabilities	67		17		2			—			86
Total liabilities	4,525		3,043		83			(2,904		)	4,747
Stockholder’s equity (deficit)	958		2,488		(37		)	(2,451		)	958
Total liabilities and stockholder’s equity (deficit)	$	5,483	$	5,531	$	46		$	(5,355	)	$	5,705

CONDENSED CONSOLIDATING CASH FLOW STATEMENTS

The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed consolidating statements of operations and comprehensive income (loss), the condensed consolidating balance sheets and the condensed consolidating cash flow statements for the Debt Issuer, for the Subsidiary Guarantors and the Non-guarantor Subsidiaries and total consolidated amount for the Debt Issuer and subsidiaries (amounts in millions).

CONDENSED CONSOLIDATING CASH FLOW STATEMENTS

	Nine Months Ended October 29, 2017
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net cash flows from operating activities	$	260		$	55		$	5		$	—		$	320
Cash flows from investing activities
Capital expenditures	(18		)	(47		)	—			—			(65		)
Proceeds from sales of property and equipment	—			2			—			—			2
Proceeds from sales of businesses, net	2,450			—			—			—			2,450
Proceeds from (payments of) intercompany notes	—			(12		)	—			12			—
Net cash flows from investing activities	$	2,432		$	(57	)	$	—		$	12		$	2,387
Cash flows from financing activities
Equity distribution	(516		)	—			—			—			(516		)
Borrowings of (repayments of) intercompany notes	12			—			—			(12		)	—
Borrowings of long-term debt	113			—			—			—			113
Repayments of long-term debt	(1,526		)	—			—			—			(1,526		)
Borrowings on long-term revolver debt	621			—			3			—			624
Repayments on long-term revolver debt	(981		)	—			(8		)	—			(989		)
Debt issuance costs	(26		)	—			—			—			(26		)
Other financing activities	1			—			—			—			1
Net cash flows from financing activities	(2,302		)	—			(5		)	(12		)	(2,319		)
Effect of exchange rates on cash	—			—			—			—			—
Net increase (decrease) in cash & cash equivalents	$	390		$	(2	)	$	—		$	—		$	388
Cash and cash equivalents at beginning of period	51			17			5			—			73
Cash and cash equivalents at end of period	$	441		$	15		$	5		$	—		$	461

	Nine Months Ended October 30, 2016
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Total HDS
Net cash flows from operating activities	$	355		$	(54	)	$	3	$	—		$	304
Cash flows from investing activities
Capital expenditures	(14		)	(45		)	—		—			(59		)
Proceeds from sale of property and equipment	—			2			—		—			2
Proceeds from sales of businesses, net	28			—			—		—			28
Proceeds from (payments of) intercompany notes	—			101			—		(101		)	—
Net cash flows from investing activities	$	14		$	58		$	—	$	(101	)	$	(29	)
Cash flows from financing activities
Borrowings of (repayments of) intercompany notes	(101		)	—			—		101			—
Borrowings of long-term debt	1,547			—			—		—			1,547
Repayments of long-term debt	(2,435		)	—			—		—			(2,435		)
Borrowings of long-term revolver debt	510			—			—		—			510
Debt issuance costs	(19		)	—			—		—			(19		)
Other financing activities	—			(1		)	—		—			(1		)
Net cash flows from financing activities	(498		)	(1		)	—		101			(398		)
Effect of exchange rates on cash	—			—			1		—			1
Net increase (decrease) in cash & cash equivalents	$	(129	)	$	3		$	4	$	—		$	(122	)
Cash and cash equivalents at beginning of period	233			18			15		—			266
Cash and cash equivalents at end of period	$	104		$	21		$	19	$	—		$	144