Related party transactions

9 Months Ended

Oct. 29, 2011

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

6. Related party transactions

Rental Revenues

Our rental revenues are derived from payments received under the leasing arrangements we have entered into with Toys-Delaware. The master lease agreement provides for Toys-Delaware to reimburse us for property related costs including, among others, real estate taxes and common area maintenance charges. Some of these costs are directly paid by Toys-Delaware and are recorded as both an expense and a tenant reimbursement. During the thirteen weeks ended October 29, 2011 and October 30, 2010, we earned related party Base rent revenues of approximately $62 million and $60 million, respectively. During the thirty-nine weeks ended October 29, 2011 and October 30, 2010, we earned related party Base rent revenues of approximately $183 million and $185 million, respectively. In addition, we recorded Tenant reimbursements of approximately $11 million and $10 million under our leasing arrangements with Toys-Delaware during the thirteen weeks ended October 29, 2011 and October 30, 2010, respectively. During the thirty-nine weeks ended October 29, 2011 and October 30, 2010, we recorded Tenant reimbursements of approximately $32 million and $31 million, respectively.

Termination Payments

As discussed in Note 2 entitled “Real estate, net”, the master lease agreement requires Toys-Delaware to make a payment to the Company upon termination of a lease in conjunction with the successful execution of the sale of such properties by the Company to a third party if the proceeds from the sale are less than the net present value of the base rent for such property over the remaining term for such property, discounted at 10% per annum. We recorded termination payments of approximately $2 million and $6million for the thirteen weeks and thirty-nine weeks ended October 29, 2011, respectively, in Earnings (loss) from discontinued operations on the Condensed Consolidated Statement of Operations. Additionally, subsequent to the third quarter of fiscal 2011, we sold a property and recorded a termination payment of approximately $2 million. 

Management Service Fees

Toys-Delaware provides a majority of the centralized corporate functions, including accounting, human resources, legal, tax and treasury services to TRU, other affiliates and us under a Domestic Services Agreement (“Agreement”). The costs are based on a formula for each affiliate, as defined in the Agreement, and are recorded on Other operating expenses in the Condensed Consolidated Statements of Operations. During each of the thirteen weeks ended October 29, 2011 and October 30, 2010, the amounts charged to us for these services were approximately $1 million. During the thirty-nine weeks ended October 29, 2011 and October 30, 2010, the amounts charged to us for these services were approximately $3 million and $4 million, respectively.