SUBSIDIARY GUARANTORS (Tables)

3 Months Ended

Apr. 29, 2018

SUBSIDIARY GUARANTORS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

	Three Months Ended April 29, 2018
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Total HDS
Net Sales	$	—		$	1,352		$	37	$	—		$	1,389
Cost of sales	—			818			19		—			837
Gross Profit	—			534			18		—			552
Operating expenses:
Selling, general and administrative	21			337			14		—			372
Depreciation and amortization	4			18			—		—			22
Restructuring	5			2			—		—			7
Total operating expenses	30			357			14		—			401
Operating Income (Loss)	(30		)	177			4		—			151
Interest expense	37			22			—		(25		)	34
Interest (income)	(22		)	(4		)	—		25			(1		)
Net (earnings) loss of equity affiliates	(161		)	—			—		161			—
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	116			159			4		(161		)	118
Provision (benefit) for income taxes	27			1			1		—			29
Income (Loss) from Continuing Operations	89			158			3		(161		)	89
Income (loss) from discontinued operations, net of tax	—			—			—		—			—
Net Income (Loss)	$	89		$	158		$	3	$	(161	)	$	89
Other comprehensive income (loss)—foreign currency translation adjustment	1			—			1		(1		)	1
Total Comprehensive Income (Loss)	$	90		$	158		$	4	$	(162	)	$	90

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (CONTINUED)

	Three Months Ended April 30, 2017
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries		Eliminations			Total HDS
Net Sales	$	—		$	1,185		$	32	$	(1	)	$	1,216
Cost of sales	—			716			17		(1		)	732
Gross Profit	—			469			15		—			484
Operating expenses:
Selling, general and administrative	21			301			12		—			334
Depreciation and amortization	4			17			—		—			21
Total operating expenses	25			318			12		—			355
Operating Income (Loss)	(25		)	151			3		—			129
Interest expense	56			34			1		(42		)	49
Interest (income)	(34		)	(8		)	—		42			—
Loss on extinguishment of debt	3			—			—		—			3
Net (earnings) loss of equity affiliates	(155		)	—			—		155			—
Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes	105			125			2		(155		)	77
Provision (benefit) for income taxes	18			1			—		—			19
Income (Loss) from Continuing Operations	87			124			2		(155		)	58
Income (loss) from discontinued operations, net of tax	(2		)	29			—		—			27
Net Income (Loss)	$	85		$	153		$	2	$	(155	)	$	85
Other comprehensive income (loss)—foreign currency translation adjustment	1			—			1		(1		)	1
Total Comprehensive Income (Loss)	$	86		$	153		$	3	$	(156	)	$	86

CONDENSED CONSOLIDATING BALANCE SHEETS

CONDENSED CONSOLIDATING BALANCE SHEETS

	As of April 29, 2018
	Debt Issuer		Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Total HDS
ASSETS
Current assets:
Cash and cash equivalents	$	126	$	17	$	4		$	—		$	147
Receivables, net	3		703		22			—			728
Inventories	—		772		20			—			792
Intercompany receivables	—		1		—			(1		)	—
Other current assets	17		37		1			—			55
Total current assets	146		1,530		47			(1		)	1,722
Property and equipment, net	159		183		2			—			344
Goodwill	—		1,984		—			—			1,984
Intangible assets, net	—		208		1			—			209
Deferred tax asset	238		—		2			(80		)	160
Investment in subsidiaries	4,162		—		—			(4,162		)	—
Intercompany notes receivable	189		1,165		—			(1,354		)	—
Other assets	14		4		—			—			18
Total assets	$	4,908	$	5,074	$	52		$	(5,597	)	$	4,437
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	11	$	447	$	17		$	—		$	475
Accrued compensation and benefits	29		43		2			—			74
Current installments of long-term debt	11		—		—			—			11
Intercompany payables	—		—		1			(1		)	—
Other current liabilities	120		112		6			—			238
Total current liabilities	171		602		26			(1		)	798
Long-term debt, excluding current installments	2,035		—		52			—			2,087
Deferred tax liabilities	—		80		—			(80		)	—
Intercompany notes payable (1)	1,165		189		—			(1,354		)	—
Other liabilities	45		15		—			—			60
Total liabilities	3,416		886		78			(1,435		)	2,945
Stockholder’s equity (deficit)	1,492		4,188		(26		)	(4,162		)	1,492
Total liabilities and stockholder’s equity (deficit)	$	4,908	$	5,074	$	52		$	(5,597	)	$	4,437

(1) During the three months ended April 29, 2018, the Parent completed a non-cash debt contribution to the Guarantor Subsidiaries of approximately $958 million.

CONDENSED CONSOLIDATING BALANCE SHEETS (CONTINUED)

	As of January 28, 2018
	Debt Issuer		Subsidiary Guarantors		Non- Guarantor Subsidiaries			Eliminations			Total HDS
ASSETS
Current assets:
Cash and cash equivalents	$	539	$	15	$	4		$	—		$	558
Receivables, net	7		584		21			—			612
Inventories	—		654		20			—			674
Intercompany receivables	—		2		—			(2		)	—
Other current assets	15		15		1			—			31
Total current assets	561		1,270		46			(2		)	1,875
Property and equipment, net	152		170		3			—			325
Goodwill	—		1,807		—			—			1,807
Intangible assets, net	—		90		1			—			91
Deferred tax asset	264		—		2			(61		)	205
Investment in subsidiaries	2,811		—		—			(2,811		)	—
Intercompany notes receivable	1,005		1,083		—			(2,088		)	—
Other assets	12		3		—			—			15
Total assets	$	4,805	$	4,423	$	52		$	(4,962	)	$	4,318
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	11	$	353	$	13		$	—		$	377
Accrued compensation and benefits	34		57		4			—			95
Current installments of long-term debt	11		—		—			—			11
Intercompany payables	—		—		2			(2		)	—
Other current liabilities	43		88		7			—			138
Total current liabilities	99		498		26			(2		)	621
Long-term debt, excluding current installments	2,032		—		58			—			2,090
Deferred tax liabilities	—		61		—			(61		)	—
Intercompany notes payable	1,083		1,005		—			(2,088		)	—
Other liabilities	125		16		—			—			141
Total liabilities	3,339		1,580		84			(2,151		)	2,852
Stockholder’s equity (deficit)	1,466		2,843		(32		)	(2,811		)	1,466
Total liabilities and stockholder’s equity (deficit)	$	4,805	$	4,423	$	52		$	(4,962	)	$	4,318

CONDENSED CONSOLIDATING CASH FLOW STATEMENTS

CONDENSED CONSOLIDATING CASH FLOW STATEMENTS

	Three Months Ended April 29, 2018
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net cash flows from operating activities	$	113		$	(66	)	$	3		$	—		$	50
Cash flows from investing activities
Capital expenditures	(9		)	(10		)	—			—			(19		)
Payments for businesses acquired, net	—			—			(362		)	—			(362		)
Proceeds from sales of property and equipment	—			—			—			—			—
Investments in equity affiliates (1)	(365		)	—			(3		)	368			—
Proceeds from (payments of) intercompany notes	—			75			—			(75		)	—
Net cash flows from investing activities	$	(374	)	$	65		$	(365	)	$	293		$	(381	)
Cash flows from financing activities
Equity contribution (distribution) (1)	(71		)	3			365			(368		)	(71		)
Borrowings of (repayments of) intercompany notes	(75		)	—			—			75			—
Repayments of long-term debt	(3		)	—			—			—			(3		)
Borrowings on long-term revolver debt	—			—			6			—			6
Repayments on long-term revolver debt	—			—			(9		)	—			(9		)
Other financing activities	(3		)	—			—			—			(3		)
Net cash flows from financing activities	(152		)	3			362			(293		)	(80		)
Effect of exchange rates on cash	—			—			—			—			—
Net increase (decrease) in cash & cash equivalents	$	(413	)	$	2		$	—		$	—		$	(411	)
Cash and cash equivalents at beginning of period	539			15			4			—			558
Cash and cash equivalents at end of period	$	126		$	17		$	4		$	—		$	147

(1) During the three months ended April 29, 2018, the Parent completed a cash contribution of approximately $365 million to a Non-Guarantor Subsidiary to execute the purchase of A.H. Harris. Subsequent to the acquisition, the A.H. Harris entities became Guarantor Subsidiaries.

	Three Months April 30, 2017
	Debt Issuer			Subsidiary Guarantors			Non- Guarantor Subsidiaries			Eliminations			Total HDS
Net cash flows from operating activities	$	139		$	(56	)	$	—		$	—		$	83
Cash flows from investing activities
Capital expenditures	(6		)	(18		)	—			—			(24		)
Proceeds from sales of property and equipment	—			2			—						2
Proceeds from (payments of) intercompany notes	—			73			—			(73		)	—
Net cash flows from investing activities	$	(6	)	$	57		$	—		$	(73	)	$	(22	)
Cash flows from financing activities
Borrowings of (repayments of) intercompany notes	(73		)	—			—			73			—
Repayments of long-term debt	(100		)	—			—			—			(100		)
Borrowings on long-term revolver debt	75			—			—			—			75
Repayments on long-term revolver debt	(54		)	—			(1		)	—			(55		)
Debt issuance costs	(5		)	—			—			—			(5		)
Other financing activities	3			—			—			—			3
Net cash flows from financing activities	(154		)	—			(1		)	73			(82		)
Effect of exchange rates on cash	—			—			—			—			—
Net increase (decrease) in cash & cash equivalents	$	(21	)	$	1		$	(1	)	$	—		$	(21	)
Cash and cash equivalents at beginning of period	51			17			5			—			73
Cash and cash equivalents at end of period	$	30		$	18		$	4		$	—		$	52