Schedule I - Condensed Financial Information of Registrant

12 Months Ended

Jan. 25, 2020

Condensed Financial Information of Registrant

Condensed Financial Information of Registrant

Schedule I – Condensed Financial Information of Registrant

AT HOME GROUP INC. (parent company only)

Condensed Balance Sheets

(in thousands, except share and per share data)

	January 25, 2020		January 26, 2019
Assets
Current assets:
Receivable from subsidiaries	$	—	$	—
Other current assets		1,672		3,529
Total current assets		1,672		3,529
Investment in subsidiaries		608,611		711,086
Total assets	$	610,283	$	714,615
Liabilities and Shareholders' Equity
Current liabilities:
Income taxes payable	$	—	$	—
Payable to subsidiaries		1,672		3,529
Total current liabilities		1,672		3,529
Noncurrent liabilities		—		—
Total liabilities		1,672		3,529
Shareholders' Equity
Common stock; $0.01 par value; 500,000,000 shares authorized; 64,106,061 and 63,609,684 shares issued and outstanding, respectively		641		636
Additional paid-in capital		657,038		643,677
(Accumulated deficit) retained earnings		(49,068)		66,773
Total shareholders' equity		608,611		711,086
Total liabilities and shareholders' equity	$	610,283	$	714,615

See Notes to Condensed Financial Statements.

Schedule I – Condensed Financial Information of Registrant

AT HOME GROUP INC. (parent company only)

Condensed Statements of Operations

(in thousands)

	Fiscal Year Ended
	January 25, 2020		January 26, 2019		January 27, 2018
Net sales	$	—	$	—	$	—
Cost of sales		—		—		—
Gross profit		—		—		—
Operating expenses
Selling, general and administrative expenses		—		—		—
Depreciation and amortization		—		—		—
Total operating expenses		—		—		—
Operating income		—		—		—
Interest expense, net		—		—		—
Income before income taxes		—		—		—
Income tax provision		—		—		—
Income before equity in net income of subsidiaries		—		—		—
Net (loss) income from subsidiaries		(214,435)		48,996		31,812
Net (loss) income	$	(214,435)	$	48,996	$	31,812

See Notes to Condensed Financial Statements.

1.    Basis of Presentation

In the parent-company-only financial statements, At Home Group Inc.'s (“Parent”) investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The parent-company-only financial statements should be read in conjunction with the Company's consolidated financial statements. A condensed statement of cash flows was not presented because At Home Group Inc.'s net operating activities have no cash impact and there were no investing or financing cash flow activities during the fiscal years ended January 25, 2020, January 26, 2019 and January 27, 2018.

2.    Guarantees and Restrictions

At Home Holding III Inc. (“At Home III”), a subsidiary of the Parent, and its indirect wholly-owned subsidiary, At Home Stores LLC, are co-borrowers (in such capacities, the “ABL Borrowers”) under the ABL Facility. As of January 25, 2020, we had $12.1 million of cash and cash equivalents and $150.7 million in borrowing availability under our ABL Facility, which provides commitments of up to $425.0 million for revolving loans and letters of credit, as of January 25, 2020. At Home Holding II Inc. (“Holdings”), the direct parent of At Home III, and its direct and indirect domestic subsidiaries (other than the ABL Borrowers and certain immaterial subsidiaries)(the “ABL Subsidiary Guarantors” and, together with Holdings, the “ABL Guarantors”) have guaranteed all obligations of the ABL Borrowers under the ABL Facility. In the event of a default under the ABL Facility, the ABL Borrowers and the Guarantors will be directly liable to the lenders under the ABL Facility. The ABL Facility, which matures on the earlier of July 27, 2022 and the date that is 91 days prior to the maturity date (as such date may be extended) of the term loan entered into on June 5, 2015 under a first lien credit agreement, includes restrictions on the ability of ABL Borrowers and ABL Subsidiary Guarantors to incur additional liens and indebtedness, make investments and dispositions, pay dividends to Holdings or enter into other transactions, among other restrictions, in each case subject to certain exceptions. Under the ABL Facility, the ABL Borrowers and the ABL Subsidiary Guarantors are permitted to pay dividends to Holdings, (a) so long as after giving effect to such payment, (i) availability is equal to or greater than 15% of the loan cap (i.e., the lesser of (x) the aggregate lender commitments under the ABL Facility and (y) the borrowing base) and (ii) if availability is less than 20% of the loan cap, the consolidated fixed charge coverage ratio is equal to or greater than 1.0 to 1.0, and (b) pursuant to certain other limited exceptions. As of January 25, 2020 and January 26, 2019, we were in compliance with all covenants under the ABL Facility.

On June 5, 2015, our indirect wholly owned subsidiary, At Home Holding III Inc. (the “Borrower”), entered into a first lien credit agreement (the “First Lien Agreement”), by and among the Borrower, At Home Holding II Inc. (“At Home II”), a direct wholly owned subsidiary of ours, as guarantor, certain indirect subsidiaries of At Home II, various lenders and Bank of America, N.A., as administrative agent and collateral agent. We have subsequently amended our First Lien Agreement from time to time. After giving effect to such amendments, the First Lien Agreement provides for a term loan in an aggregate principal amount of $350.0 million (the “Term Loan”). The Term Loan will mature on June 3, 2022 and is repayable in equal quarterly installments of approximately $0.9 million for an annual aggregate amount equal to 1% of the original principal amount. The Borrower has the option of paying interest on a 1-month, 2-month or quarterly basis on the Term Loan at an annual rate of LIBOR (subject to a 1% floor) plus 4.00%, subject to a 0.50% reduction if the Borrower achieves a specified secured net leverage ratio level, which was met during the fiscal year ended January 28, 2017 and for which the Borrower has continued to qualify during the fiscal year ended January 25, 2020. The Term Loan is prepayable, in whole or in part, without premium at our option.

The Term Loan includes restrictions on the ability of the Borrower and its restricted subsidiaries to incur additional liens and indebtedness, make investments and dispositions, pay dividends to Holdings or enter into other transactions, among other restrictions, in each case subject to certain exceptions. Under the First Lien Agreement, the Borrower is permitted to pay dividends to Holdings (a) up to an amount equal to, so long as immediately after giving effect thereto, no default or event of default has occurred and is continuing, (i) $10 million, plus (ii) a basket that builds based on $30 million, plus 50% of the Borrower's and its restricted subsidiaries' Consolidated Net Income (as defined in

the First Lien Agreement) and certain other amounts, subject to various conditions including compliance with a minimum cash interest coverage ratio of 2.0 to 1.0, plus (iii) an unlimited amount, subject to pro forma compliance with a 3.0 to 1.0 total leverage ratio and (b) in certain additional limited amounts, subject to certain limited exceptions. As of January 25, 2020 and January 26, 2019, we were in compliance with all covenants prescribed under the Term Loan.

On November 27, 2018, At Home II and the Borrower entered into the Second Amendment (the “Term Loan Amendment”) with the lenders party thereto and Bank of America, N.A., as administrative agent and as collateral agent, which amended the First Lien Agreement, as amended by the First Amendment dated July 27, 2017. Pursuant to the Term Loan Amendment, among other things, the Borrower borrowed an additional $50.0 million in incremental term loans, increasing the principal amount outstanding under the First Lien Agreement on such date to $339.5 million.