RELATED PARTIES	9 Months Ended
Oct. 30, 2011
RELATED PARTIES	NOTE 4 – RELATED PARTIES On August 30, 2007, investment funds associated with Clayton, Dubilier & Rice, Inc., The Carlyle Group and Bain Capital Partners, LLC (collectively the “Equity Sponsors”) formed HDS Investment Holding, Inc. (“HDS Holding”) and entered into a stock purchase agreement with The Home Depot, Inc. (“Home Depot” or “THD”) pursuant to which Home Depot agreed to sell to HDS Holding or to a wholly owned subsidiary of HDS Holding certain intellectual property and all the outstanding common stock of HD Supply, Inc. and the Canadian subsidiary CND Holdings, Inc. (collectively “HD Supply”). On August 30, 2007, through a series of transactions, HDS Holding’s direct wholly owned subsidiary, HDS Holding Corporation, acquired direct control of HD Supply through the merger of its wholly owned subsidiary, HDS Acquisition Corp., with and into HD Supply. Through these transactions (the “Transactions”), Home Depot was paid cash of $8.2 billion and 12.5% of HDS Holding’s common stock worth $325 million for certain intellectual property and all of the outstanding common stock of HD Supply, Inc. and CND Holdings, Inc. including all dividends and interest payable associated with those shares. Home Depot On the date of the Transactions, Home Depot entered into a strategic purchase agreement with Crown Bolt. This agreement provides a guaranteed revenue stream to Crown Bolt through January 31, 2015 by specifying minimum annual purchase requirements from Home Depot. HD Supply derived revenue from the sale of products to Home Depot of $66 million and $193 million in the three and nine months ended October 30, 2011, respectively, and $74 million and $221 million in the three and nine months ended October 31, 2010, respectively. The revenue was recorded at an amount that generally approximates fair value. Accounts receivable from the sale of products to Home Depot were approximately $25 million at October 30, 2011 and $27 million at January 30, 2011, and are included within Receivables in the accompanying Consolidated Balance Sheets. In addition to sales, HD Supply purchased product from Home Depot of less than $1 million in both the nine months ended October 30, 2011 and the nine months ended October 31, 2010. All purchases were recorded in Cost of sales when the inventory was sold. Equity Sponsors In conjunction with the closing of the Transactions, the Company entered into a management agreement whereby the Company pays the Equity Sponsors a $5 million annual aggregate management fee (“Sponsor Management Fee”) and related expenses through August 2017. The three and nine months ended October 30, 2011 include $1 million and $4 million, respectively, in Sponsor Management Fees and related expenses and the three and nine months ended October 31, 2010 include $1 million and $4 million, respectively, in Sponsor Management Fees and related expenses. These charges are included in Selling, general and administrative expense in the Consolidated Statements of Operations. Management of the Company has been informed that, as of October 30, 2011, affiliates of certain of the Equity Sponsors beneficially owned approximately $833 million aggregate principal amount, or 33%, of the Company’s 12.0% Senior Notes due 2014 and approximately $713 million aggregate principal amount, or 39%, of the Company’s 13.5% Senior Subordinated Notes due 2015. HD Supply purchased product from affiliates of the Equity Sponsors for approximately $13 million and $49 million in the three and nine months ended October 30, 2011, respectively, and approximately $7 million and $38 million in the three and nine months ended October 31, 2010, respectively. In addition, HD Supply sold product to affiliates of the Equity Sponsors for $1 million and $2 million in the three and nine months ended October 30, 2011, respectively, and $1 million and $3 million in the three and nine months ended October 31, 2010, respectively. Management believes these transactions were conducted at prices that an unrelated third party would pay.

NOTE 4 – RELATED PARTIES

On August 30, 2007, investment funds associated with Clayton, Dubilier & Rice, Inc., The Carlyle Group and Bain Capital Partners, LLC (collectively the “Equity Sponsors”) formed HDS Investment Holding, Inc. (“HDS Holding”) and entered into a stock purchase agreement with The Home Depot, Inc. (“Home Depot” or “THD”) pursuant to which Home Depot agreed to sell to HDS Holding or to a wholly owned subsidiary of HDS Holding certain intellectual property and all the outstanding common stock of HD Supply, Inc. and the Canadian subsidiary CND Holdings, Inc. (collectively “HD Supply”). On August 30, 2007, through a series of transactions, HDS Holding’s direct wholly owned subsidiary, HDS Holding Corporation, acquired direct control of HD Supply through the merger of its wholly owned subsidiary, HDS Acquisition Corp., with and into HD Supply. Through these transactions (the “Transactions”), Home Depot was paid cash of $8.2 billion and 12.5% of HDS Holding’s common stock worth $325 million for certain intellectual property and all of the outstanding common stock of HD Supply, Inc. and CND Holdings, Inc. including all dividends and interest payable associated with those shares.

Home Depot

On the date of the Transactions, Home Depot entered into a strategic purchase agreement with Crown Bolt. This agreement provides a guaranteed revenue stream to Crown Bolt through January 31, 2015 by specifying minimum annual purchase requirements from Home Depot.

HD Supply derived revenue from the sale of products to Home Depot of $66 million and $193 million in the three and nine months ended October 30, 2011, respectively, and $74 million and $221 million in the three and nine months ended October 31, 2010, respectively. The revenue was recorded at an amount that generally approximates fair value. Accounts receivable from the sale of products to Home Depot were approximately $25 million at October 30, 2011 and $27 million at January 30, 2011, and are included within Receivables in the accompanying Consolidated Balance Sheets. In addition to sales, HD Supply purchased product from Home Depot of less than $1 million in both the nine months ended October 30, 2011 and the nine months ended October 31, 2010. All purchases were recorded in Cost of sales when the inventory was sold.

Equity Sponsors

In conjunction with the closing of the Transactions, the Company entered into a management agreement whereby the Company pays the Equity Sponsors a $5 million annual aggregate management fee (“Sponsor Management Fee”) and related expenses through August 2017. The three and nine months ended October 30, 2011 include $1 million and $4 million, respectively, in Sponsor Management Fees and related expenses and the three and nine months ended October 31, 2010 include $1 million and $4 million, respectively, in Sponsor Management Fees and related expenses. These charges are included in Selling, general and administrative expense in the Consolidated Statements of Operations.

Management of the Company has been informed that, as of October 30, 2011, affiliates of certain of the Equity Sponsors beneficially owned approximately $833 million aggregate principal amount, or 33%, of the Company’s 12.0% Senior Notes due 2014 and approximately $713 million aggregate principal amount, or 39%, of the Company’s 13.5% Senior Subordinated Notes due 2015.

HD Supply purchased product from affiliates of the Equity Sponsors for approximately $13 million and $49 million in the three and nine months ended October 30, 2011, respectively, and approximately $7 million and $38 million in the three and nine months ended October 31, 2010, respectively. In addition, HD Supply sold product to affiliates of the Equity Sponsors for $1 million and $2 million in the three and nine months ended October 30, 2011, respectively, and $1 million and $3 million in the three and nine months ended October 31, 2010, respectively. Management believes these transactions were conducted at prices that an unrelated third party would pay.