SUBSIDIARY GUARANTORS (Tables)

6 Months Ended

Jul. 29, 2018

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME


	Three Months Ended July 29, 2018
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		HDS

Net Sales	$	—	$	1,560	$	41	$	(1)	$	1,600
Cost of sales		—		956		23		(1)		978
Gross Profit		—		604		18		—		622
Operating expenses:
Selling, general and administrative		17		353		14		—		384
Depreciation and amortization		5		20		—		—		25
Restructuring		1		1		—		—		2
Total operating expenses		23		374		14		—		411
Operating Income (Loss)		(23)		230		4		—		211
Interest expense		34		—		1		—		35
Interest (income)		—		—		—		—		—
Net (earnings) of equity affiliates		(229)		—		—		229		—
Income from Continuing Operations Before Provision for Income Taxes		172		230		3		(229)		176
Provision for income taxes		42		4		—		—		46
Income from Continuing Operations		130		226		3		(229)		130
Income from discontinued operations, net of tax		1		—		—		—		1
Net Income	$	131	$	226	$	3	$	(229)	$	131
Other comprehensive income—foreign currency translation adjustment		1		—		1		(1)		1
Total Comprehensive Income	$	132	$	226	$	4	$	(230)	$	132


	Three Months Ended July 30, 2017
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		HDS

Net Sales	$	—	$	1,316	$	36	$	—	$	1,352
Cost of sales		—		793		20		—		813
Gross Profit		—		523		16		—		539
Operating expenses:
Selling, general and administrative		21		304		13		—		338
Depreciation and amortization		3		17		1		—		21
Total operating expenses		24		321		14		—		359
Operating Income (Loss)		(24)		202		2		—		180
Interest expense		56		31		1		(39)		49
Interest (income)		(32)		(7)		—		39		—
Net (earnings) of equity affiliates		(239)		—		—		239		—
Income from Continuing Operations Before Provision for Income Taxes		191		178		1		(239)		131
Provision for income taxes		48		1		1		—		50
Income from Continuing Operations		143		177		—		(239)		81
Income from discontinued operations, net of tax		299		61		1		—		361
Net Income	$	442	$	238	$	1	$	(239)	$	442
Other comprehensive income (loss)-foreign currency translation adjustment		(3)		—		(3)		3		(3)
Total Comprehensive Income	$	439	$	238	$	(2)	$	(236)	$	439


	Six Months Ended July 29, 2018
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		HDS
Net Sales	$	—	$	2,912	$	78	$	(1)	$	2,989
Cost of sales		—		1,774		42		(1)		1,815
Gross Profit		—		1,138		36		—		1,174
Operating expenses:
Selling, general and administrative		38		690		28		—		756
Depreciation and amortization		9		38		—		—		47
Restructuring		6		3		—		—		9
Total operating expenses		53		731		28		—		812
Operating Income (Loss)		(53)		407		8		—		362
Interest expense		71		22		1		(25)		69
Interest (income)		(22)		(4)		—		25		(1)
Net (earnings) of equity affiliates		(390)		—		—		390		—
Income from Continuing Operations Before Provision for Income Taxes		288		389		7		(390)		294
Provision for income taxes		69		5		1		—		75
Income from Continuing Operations		219		384		6		(390)		219
Income from discontinued operations, net of tax		1		—		—		—		1
Net Income	$	220	$	384	$	6	$	(390)	$	220
Other comprehensive income-foreign currency translation adjustment		2		—		2		(2)		2
Total Comprehensive Income	$	222	$	384	$	8	$	(392)	$	222


	Six Months Ended July 30, 2017
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		HDS
Net Sales	$	—	$	2,501	$	68	$	(1)	$	2,568
Cost of sales		—		1,509		37		(1)		1,545
Gross Profit		—		992		31		—		1,023
Operating expenses:
Selling, general and administrative		42		605		25		—		672
Depreciation and amortization		7		34		1		—		42
Total operating expenses		49		639		26		—		714
Operating Income (Loss)		(49)		353		5		—		309
Interest expense		112		66		1		(81)		98
Interest (income)		(66)		(15)		—		81		—
Net (earnings) of equity affiliates		(394)		—		—		394		—
Loss on extinguishment of debt		3		—		—		—		3
Income from Continuing Operations Before Provision for Income Taxes		296		302		4		(394)		208
Provision for income taxes		66		2		1		—		69
Income from Continuing Operations		230		300		3		(394)		139
Income from discontinued operations, net of tax		297		91		—		—		388
Net Income	$	527	$	391	$	3	$	(394)	$	527
Other comprehensive income (loss)-foreign currency translation adjustment		(2)		—		(2)		2		(2)
Total Comprehensive Income	$	525	$	391	$	1	$	(392)	$	525

CONDENSED CONSOLIDATING BALANCE SHEETS


	As of July 29, 2018
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		HDS
ASSETS
Current assets:
Cash and cash equivalents	$	204	$	20	$	3	$	—	$	227
Receivables, net		4		815		24		—		843
Inventories		—		793		20		—		813
Intercompany receivables		—		1		—		(1)		—
Other current assets		13		31		1		—		45
Total current assets		221		1,660		48		(1)		1,928
Property and equipment, net		156		186		3		—		345
Goodwill		—		1,992		—		—		1,992
Intangible assets, net		—		202		1		—		203
Deferred tax asset		198		—		2		(81)		119
Investment in subsidiaries		4,268		—		—		(4,268)		—
Intercompany notes receivable		189		1,181		—		(1,370)		—
Other assets		13		5		—		—		18
Total assets	$	5,045	$	5,226	$	54	$	(5,720)	$	4,605
LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	8	$	464	$	16	$	—	$	488
Accrued compensation and benefits		32		69		3		—		104
Current installments of long-term debt		11		—		—		—		11
Intercompany payables		—		—		1		(1)		—
Other current liabilities		124		117		6		—		247
Total current liabilities		175		650		26		(1)		850
Long-term debt, excluding current installments		2,038		—		49		—		2,087
Deferred tax liabilities		—		81		—		(81)		—
Intercompany notes payable (1)		1,181		189		—		(1,370)		—
Other liabilities		44		16		1		—		61
Total liabilities		3,438		936		76		(1,452)		2,998
Stockholder’s equity (deficit)		1,607		4,290		(22)		(4,268)		1,607
Total liabilities and stockholder’s equity (deficit)	$	5,045	$	5,226	$	54	$	(5,720)	$	4,605

(1)

During the six months ended July 29, 2018, the Parent completed a non-cash debt contribution to the Guarantor Subsidiaries of approximately $958 million.


	As of January 28, 2018
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		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


	Six Months Ended July 29, 2018
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		HDS
Net cash flows from operating activities	$	208	$	(27)	$	5	$	—	$	186
Cash flows from investing activities
Capital expenditures		(17)		(29)		(1)		—		(47)
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		—		58		—		(58)		—
Net cash flows from investing activities	$	(382)	$	29	$	(366)	$	310	$	(409)
Cash flows from financing activities
Equity contribution (distribution) (1)		(94)		3		365		(368)		(94)
Borrowings of (repayments of) intercompany notes		(58)		—		—		58		—
Repayments of long-term debt		(5)		—		—		—		(5)
Borrowings on long-term revolver debt		—		—		10		—		10
Repayments on long-term revolver debt		—		—		(16)		—		(16)
Other financing activities		(4)		—		1		—		(3)
Net cash flows from financing activities		(161)		3		360		(310)		(108)
Effect of exchange rates on cash		—		—		—		—		—
Net increase (decrease) in cash & cash equivalents	$	(335)	$	5	$	(1)	$	—	$	(331)
Cash and cash equivalents at beginning of period		539		15		4		—		558
Cash and cash equivalents at end of period	$	204	$	20	$	3	$	—	$	227

(1)

During the six months ended July 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.


	Six Months Ended July 30, 2017
					Non-
	Debt		Subsidiary		Guarantor				Total
	Issuer		Guarantors		Subsidiaries		Eliminations		HDS
Net cash flows from operating activities	$	227	$	(41)	$	3	$	—	$	189
Cash flows from investing activities
Capital expenditures		(9)		(34)		—		—		(43)
Proceeds from sale of property and equipment		—		2		—		—		2
Proceeds from (payments of) intercompany notes		—		73		—		(73)		—
Net cash flows from investing activities	$	(9)	$	41	$	—	$	(73)	$	(41)
Cash flows from financing activities
Equity contribution		(395)		—		—		—		(395)
Borrowings of (repayments of) intercompany notes		(73)		—		—		73		—
Repayments of long-term debt		(103)		—		—		—		(103)
Borrowings on long-term revolver debt		596		—		3		—		599
Repayments on long-term revolver debt		(256)		—		(5)		—		(261)
Debt issuance costs		(6)		—		—		—		(6)
Net cash flows from financing activities		(237)		—		(2)		73		(166)
Effect of exchange rates on cash		—		—		—		—		—
Net increase (decrease) in cash & cash equivalents	$	(19)	$	—	$	1	$	—	$	(18)
Cash and cash equivalents at beginning of period		51		17		5		—		73
Cash and cash equivalents at end of period	$	32	$	17	$	6	$	—	$	55