Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jan. 28, 2018 | Mar. 09, 2018 | Jul. 28, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | HD Supply Holdings, Inc. | ||
Entity Central Index Key | 1,573,097 | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 28, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --01-28 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 6,118,532,561 | ||
Entity Common Stock, Shares Outstanding | 185,567,372 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (HD Supply Holdings, Inc.) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | $ 1,183 | $ 1,370 | $ 1,352 | $ 1,216 | $ 1,085 | $ 1,275 | $ 1,283 | $ 1,176 | $ 5,121 | $ 4,819 | $ 4,615 |
Cost of sales | 3,088 | 2,894 | 2,801 | ||||||||
Gross Profit | 468 | 542 | 539 | 484 | 431 | 512 | 513 | 469 | 2,033 | 1,925 | 1,814 |
Operating expenses: | |||||||||||
Selling, general and administrative | 1,334 | 1,269 | 1,184 | ||||||||
Depreciation and amortization | 85 | 84 | 97 | ||||||||
Restructuring | 6 | 7 | 8 | ||||||||
Total operating expenses | 1,425 | 1,360 | 1,289 | ||||||||
Operating Income | 608 | 565 | 525 | ||||||||
Interest expense | 166 | 269 | 394 | ||||||||
Interest (income) | (1) | (1) | (2) | ||||||||
Loss on extinguishment & modification of debt | 84 | 179 | 100 | ||||||||
Other (income) expense, net | 1 | ||||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 360 | 117 | 30 | ||||||||
Provision (benefit) for income taxes | 193 | 51 | (1,170) | ||||||||
Income from Continuing Operations | (18) | 46 | 81 | 58 | 26 | 20 | 61 | (41) | 167 | 66 | 1,200 |
Income from discontinued operations, net of tax | 9 | 406 | 361 | 27 | 26 | 40 | 37 | 27 | 803 | 130 | 272 |
Net Income | $ (9) | $ 452 | $ 442 | $ 85 | $ 52 | $ 60 | $ 98 | $ (14) | 970 | 196 | 1,472 |
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | $ 968 | $ 197 | $ 1,484 | ||||||||
Weighted Average Common Shares Outstanding (thousands) | |||||||||||
Basic (in shares) | 192,236 | 199,385 | 197,011 | ||||||||
Diluted (in shares) | 193,668 | 202,000 | 201,308 | ||||||||
Basic Earnings Per Share: | |||||||||||
Income from Continuing Operations (in dollars per share) | $ (0.10) | $ 0.25 | $ 0.41 | $ 0.29 | $ 0.13 | $ 0.10 | $ 0.31 | $ (0.21) | $ 0.87 | $ 0.33 | $ 6.09 |
Income from Discontinued Operations (in dollars per share) | 0.05 | 2.19 | 1.83 | 0.13 | 0.13 | 0.20 | 0.19 | 0.14 | 4.18 | 0.65 | 1.38 |
Net Income (in dollars per share) | (0.05) | 2.43 | 2.24 | 0.42 | 0.26 | 0.30 | 0.49 | (0.07) | 5.05 | 0.98 | 7.47 |
Diluted Earnings Per Share: | |||||||||||
Income from Continuing Operations (in dollars per share) | (0.10) | 0.25 | 0.41 | 0.29 | 0.13 | 0.10 | 0.30 | (0.21) | 0.86 | 0.33 | 5.96 |
Income from Discontinued Operations (in dollars per share) | 0.05 | 2.18 | 1.81 | 0.13 | 0.13 | 0.20 | 0.18 | 0.14 | 4.15 | 0.64 | 1.35 |
Net Income (in dollars per share) | $ (0.05) | $ 2.42 | $ 2.22 | $ 0.42 | $ 0.26 | $ 0.30 | $ 0.49 | $ (0.07) | $ 5.01 | $ 0.97 | $ 7.31 |
CONSOLIDATED BALANCE SHEETS (HD
CONSOLIDATED BALANCE SHEETS (HD Supply Holdings, Inc.) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 558 | $ 75 |
Receivables, less allowance for doubtful accounts of $12 and $9 | 612 | 559 |
Inventories | 674 | 606 |
Current assets of discontinued operations | 575 | |
Other current assets | 31 | 32 |
Total current assets | 1,875 | 1,847 |
Property and equipment, net | 325 | 253 |
Goodwill | 1,807 | 1,807 |
Intangible assets, net | 91 | 102 |
Deferred tax asset | 205 | 556 |
Non-current assets of discontinued operations | 1,122 | |
Other assets | 15 | 20 |
Total assets | 4,318 | 5,707 |
Current liabilities: | ||
Accounts payable | 377 | 320 |
Accrued compensation and benefits | 95 | 98 |
Current installments of long-term debt | 11 | 14 |
Current liabilities of discontinued operations | 259 | |
Other current liabilities | 138 | 152 |
Total current liabilities | 621 | 843 |
Long-term debt, excluding current installments | 2,090 | 3,798 |
Non-current liabilities of discontinued operations | 20 | |
Other liabilities | 141 | 86 |
Total liabilities | 2,852 | 4,747 |
Stockholders' equity: | ||
Common stock, par value $0.01; 1 billion shares authorized; 185.7 million and 201.4 million shares issued and outstanding at January 28, 2018 and January 29, 2017, respectively | 2 | 2 |
Paid-in capital | 4,029 | 3,962 |
Accumulated deficit | (1,966) | (2,969) |
Accumulated other comprehensive loss | (17) | (15) |
Treasury stock, at cost, 18.2 million and 0.6 million shares at January 28, 2018 and January 29, 2017, respectively | (582) | (20) |
Total stockholders' equity | 1,466 | 960 |
Total liabilities and stockholders' equity | $ 4,318 | $ 5,707 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (HD Supply Holdings, Inc.) - USD ($) shares in Millions, $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Receivables | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 12 | $ 9 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 185.7 | 201.4 |
Common stock, shares outstanding | 185.7 | 201.4 |
Treasury stock | ||
Treasury stock, shares | 18.2 | 0.6 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) (HD Supply Holdings, Inc.) - USD ($) shares in Thousands, $ in Millions | Common Stock | Treasury | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | [1] | Total | |
Balance at Feb. 01, 2015 | $ 2 | $ (12) | $ 3,818 | $ (4,540) | $ (28) | $ (760) | ||
Balance (in shares) at Feb. 01, 2015 | 196,451 | (406) | ||||||
Increase (decrease) in stockholders' equity (deficit) | ||||||||
Net income | 1,472 | 1,472 | ||||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustment | 12 | 12 | ||||||
Purchase of common stock | $ (72) | (72) | ||||||
Purchase of common stock (in shares) | (2,282) | |||||||
Shares issued under employee benefit plans | 74 | 74 | ||||||
Shares issued under employee benefit plans (in shares) | 6,351 | |||||||
Stock-based compensation | 16 | 16 | ||||||
Share retirement | [2] | $ 82 | (82) | |||||
Share retirement (in shares) | [2] | (2,630) | 2,630 | |||||
Other | $ 1 | 1 | 2 | |||||
Balance at Jan. 31, 2016 | $ 2 | $ (1) | 3,909 | (3,150) | (16) | 744 | ||
Balance (in shares) at Jan. 31, 2016 | 200,172 | (58) | ||||||
Increase (decrease) in stockholders' equity (deficit) | ||||||||
Net income | 196 | 196 | ||||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustment | 1 | 1 | ||||||
Purchase of common stock | $ (33) | (33) | ||||||
Purchase of common stock (in shares) | (953) | |||||||
Shares issued under employee benefit plans | 33 | 33 | ||||||
Shares issued under employee benefit plans (in shares) | 2,232 | |||||||
Stock-based compensation | 20 | 20 | ||||||
Share retirement | [2] | $ 14 | (14) | |||||
Share retirement (in shares) | [2] | (450) | 450 | |||||
Other | (1) | (1) | ||||||
Balance at Jan. 29, 2017 | $ 2 | $ (20) | 3,962 | (2,969) | (15) | 960 | ||
Balance (in shares) at Jan. 29, 2017 | 201,954 | (561) | ||||||
Increase (decrease) in stockholders' equity (deficit) | ||||||||
Cumulative effect of accounting change | 56 | 56 | ||||||
Net income | 970 | 970 | ||||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustment | (2) | (2) | ||||||
Purchase of common stock | $ (584) | (584) | ||||||
Purchase of common stock (in shares) | (18,236) | |||||||
Shares issued under employee benefit plans | 41 | 41 | ||||||
Shares issued under employee benefit plans (in shares) | 2,571 | |||||||
Stock-based compensation | 26 | 26 | ||||||
Share retirement | [2] | $ 23 | (23) | |||||
Share retirement (in shares) | [2] | (611) | 611 | |||||
Shares withheld for taxes (in shares) | (4) | |||||||
Other | $ (1) | (1) | ||||||
Balance at Jan. 28, 2018 | $ 2 | $ (582) | $ 4,029 | $ (1,966) | $ (17) | $ 1,466 | ||
Balance (in shares) at Jan. 28, 2018 | 203,914 | (18,190) | ||||||
[1] | Accumulated Other Comprehensive Income (Loss) is comprised of cumulative foreign currency translation adjustments, net. | |||||||
[2] | The majority of these retired shares were re-acquired by Holdings, pursuant to its previously announced share repurchase program. Holdings reinstated the Retired Shares to the status of authorized but unissued shares of the Company’s common stock, par value $0.01 per share, effective as of the date of retirement. |
CONSOLIDATED STATEMENTS OF STO6
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) Parenthetical (HD Supply Holdings, Inc.) - $ / shares | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 |
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (HD Supply Holdings, Inc.) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 970 | $ 196 | $ 1,472 |
Reconciliation of net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 97 | 102 | 134 |
Provision for uncollectibles | 9 | 6 | 8 |
Non-cash interest expense | 16 | 17 | 23 |
Payment of discounts upon extinguishment of debt | (6) | (7) | (12) |
Loss on extinguishment & modification of debt | 84 | 179 | 100 |
Stock-based compensation expense | 26 | 20 | 16 |
Deferred income taxes | 407 | 129 | (839) |
(Gain) loss on sales of businesses, net | (934) | 6 | (186) |
Other | 2 | (11) | (4) |
Changes in assets and liabilities, net of the effects of acquisitions & dispositions: | |||
(Increase) decrease in receivables | (173) | (38) | (63) |
(Increase) decrease in inventories | (127) | (62) | (38) |
(Increase) decrease in other current assets | 6 | 3 | 11 |
(Increase) decrease in other assets | (2) | ||
Increase (decrease) in accounts payable and accrued liabilities | 125 | (16) | (14) |
Increase (decrease) in other long-term liabilities | (9) | (186) | |
Net cash provided by (used in) operating activities | 502 | 513 | 422 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (94) | (81) | (86) |
Proceeds from sales of property and equipment | 2 | 32 | 3 |
Proceeds from sales of businesses, net | 2,421 | 28 | 809 |
Net cash provided by (used in) investing activities | 2,329 | (21) | 726 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock under employee benefit plans | 41 | 33 | 74 |
Purchase of treasury shares | (584) | (34) | (71) |
Borrowings of long-term debt | 113 | 1,547 | 287 |
Repayments of long-term debt | (1,529) | (2,631) | (1,152) |
Borrowings on long-term revolver debt | 628 | 689 | 784 |
Repayments on long-term revolver debt | (995) | (269) | (880) |
Debt issuance and modification costs | (26) | (19) | (6) |
Other financing activities | 4 | (3) | 2 |
Net cash provided by (used in) financing activities | (2,348) | (687) | (962) |
Effect of exchange rates on cash and cash equivalents | 1 | (2) | |
Increase (decrease) in cash and cash equivalents | 483 | (194) | 184 |
Cash and cash equivalents at beginning of period | 75 | 269 | 85 |
Cash and cash equivalents at end of period | $ 558 | $ 75 | $ 269 |
CONSOLIDATED STATEMENTS OF OPE8
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (HD Supply, Inc.) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | $ 1,183 | $ 1,370 | $ 1,352 | $ 1,216 | $ 1,085 | $ 1,275 | $ 1,283 | $ 1,176 | $ 5,121 | $ 4,819 | $ 4,615 |
Cost of sales | 3,088 | 2,894 | 2,801 | ||||||||
Gross Profit | 468 | 542 | 539 | 484 | 431 | 512 | 513 | 469 | 2,033 | 1,925 | 1,814 |
Operating expenses: | |||||||||||
Selling, general and administrative | 1,334 | 1,269 | 1,184 | ||||||||
Depreciation and amortization | 85 | 84 | 97 | ||||||||
Restructuring | 6 | 7 | 8 | ||||||||
Total operating expenses | 1,425 | 1,360 | 1,289 | ||||||||
Operating Income | 608 | 565 | 525 | ||||||||
Interest expense | 166 | 269 | 394 | ||||||||
Interest (income) | (1) | (1) | (2) | ||||||||
Loss on extinguishment & modification of debt | 84 | 179 | 100 | ||||||||
Other (income) expense, net | 1 | ||||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 360 | 117 | 30 | ||||||||
Provision (benefit) for income taxes | 193 | 51 | (1,170) | ||||||||
Income from Continuing Operations | (18) | 46 | 81 | 58 | 26 | 20 | 61 | (41) | 167 | 66 | 1,200 |
Income from discontinued operations, net of tax | 9 | 406 | 361 | 27 | 26 | 40 | 37 | 27 | 803 | 130 | 272 |
Net Income | $ (9) | $ 452 | $ 442 | $ 85 | $ 52 | $ 60 | $ 98 | $ (14) | 970 | 196 | 1,472 |
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | 968 | 197 | 1,484 | ||||||||
HD Supply, Inc. (Total HDS) | |||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | 5,121 | 4,819 | 4,615 | ||||||||
Cost of sales | 3,088 | 2,894 | 2,801 | ||||||||
Gross Profit | 2,033 | 1,925 | 1,814 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 1,334 | 1,269 | 1,184 | ||||||||
Depreciation and amortization | 85 | 84 | 97 | ||||||||
Restructuring | 6 | 7 | 8 | ||||||||
Total operating expenses | 1,425 | 1,360 | 1,289 | ||||||||
Operating Income | 608 | 565 | 525 | ||||||||
Interest expense | 166 | 269 | 394 | ||||||||
Interest (income) | (2) | ||||||||||
Loss on extinguishment & modification of debt | 84 | 179 | 100 | ||||||||
Other (income) expense, net | 1 | ||||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 360 | 117 | 30 | ||||||||
Provision (benefit) for income taxes | 193 | 51 | (1,170) | ||||||||
Income from Continuing Operations | 167 | 66 | 1,200 | ||||||||
Income from discontinued operations, net of tax | 803 | 130 | 272 | ||||||||
Net Income | 970 | 196 | 1,472 | ||||||||
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | $ 968 | $ 197 | $ 1,484 |
CONSOLIDATED BALANCE SHEETS (H9
CONSOLIDATED BALANCE SHEETS (HD Supply, Inc.) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 558 | $ 75 |
Receivables, less allowance for doubtful accounts of $12 and $9 | 612 | 559 |
Inventories | 674 | 606 |
Current assets of discontinued operations | 575 | |
Other current assets | 31 | 32 |
Total current assets | 1,875 | 1,847 |
Property and equipment, net | 325 | 253 |
Goodwill | 1,807 | 1,807 |
Intangible assets, net | 91 | 102 |
Deferred tax asset | 205 | 556 |
Non-current assets of discontinued operations | 1,122 | |
Other assets | 15 | 20 |
Total assets | 4,318 | 5,707 |
Current liabilities: | ||
Accounts payable | 377 | 320 |
Accrued compensation and benefits | 95 | 98 |
Current installments of long-term debt | 11 | 14 |
Current liabilities of discontinued operations | 259 | |
Other current liabilities | 138 | 152 |
Total current liabilities | 621 | 843 |
Long-term debt, excluding current installments | 2,090 | 3,798 |
Non-current liabilities of discontinued operations | 20 | |
Other liabilities | 141 | 86 |
Total liabilities | 2,852 | 4,747 |
Stockholders' equity: | ||
Common stock, par value $0.01; authorized 1,000 shares; issued and outstanding 1,000 shares at January 28, 2018 and January 29, 2017 | 2 | 2 |
Paid-in capital | 4,029 | 3,962 |
Accumulated deficit | (1,966) | (2,969) |
Accumulated other comprehensive loss | (17) | (15) |
Total stockholders' equity | 1,466 | 960 |
Total liabilities and stockholders' equity | 4,318 | 5,707 |
HD Supply, Inc. (Total HDS) | ||
Current assets: | ||
Cash and cash equivalents | 558 | 73 |
Receivables, less allowance for doubtful accounts of $12 and $9 | 612 | 559 |
Inventories | 674 | 606 |
Current assets of discontinued operations | 575 | |
Other current assets | 31 | 32 |
Total current assets | 1,875 | 1,845 |
Property and equipment, net | 325 | 253 |
Goodwill | 1,807 | 1,807 |
Intangible assets, net | 91 | 102 |
Deferred tax asset | 205 | 556 |
Non-current assets of discontinued operations | 1,122 | |
Other assets | 15 | 20 |
Total assets | 4,318 | 5,705 |
Current liabilities: | ||
Accounts payable | 377 | 320 |
Accrued compensation and benefits | 95 | 98 |
Current installments of long-term debt | 11 | 14 |
Current liabilities of discontinued operations | 259 | |
Other current liabilities | 138 | 152 |
Total current liabilities | 621 | 843 |
Long-term debt, excluding current installments | 2,090 | 3,798 |
Non-current liabilities of discontinued operations | 20 | |
Other liabilities | 141 | 86 |
Total liabilities | 2,852 | 4,747 |
Stockholders' equity: | ||
Paid-in capital | 3,290 | 3,806 |
Accumulated deficit | (1,807) | (2,833) |
Accumulated other comprehensive loss | (17) | (15) |
Total stockholders' equity | 1,466 | 958 |
Total liabilities and stockholders' equity | $ 4,318 | $ 5,705 |
CONSOLIDATED BALANCE SHEETS (10
CONSOLIDATED BALANCE SHEETS (Parenthetical) (HD Supply, Inc.) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Receivables | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 12 | $ 9 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 185,700,000 | 201,400,000 |
Common stock, shares outstanding | 185,700,000 | 201,400,000 |
HD Supply, Inc. (Total HDS) | ||
Receivables | ||
Receivables, allowance for doubtful accounts (in dollars) | $ 12 | $ 9 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000 | 1,000 |
Common stock, shares issued | 1,000 | 1,000 |
Common stock, shares outstanding | 1,000 | 1,000 |
CONSOLIDATED STATEMENTS OF ST11
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT) (HD Supply, Inc.) - USD ($) $ in Millions | HD Supply, Inc. (Total HDS)Paid-in Capital | HD Supply, Inc. (Total HDS)Accumulated Deficit | HD Supply, Inc. (Total HDS)Accumulated Other Comprehensive Income (Loss) | [1] | HD Supply, Inc. (Total HDS) | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | [2] | Total |
Balance at Feb. 01, 2015 | $ 3,768 | $ (4,500) | $ (28) | $ (760) | $ 2 | $ 3,818 | $ (4,540) | $ (28) | $ (760) | ||
Increase (decrease) in stockholders' equity (deficit) | |||||||||||
Net income | 1,472 | 1,472 | 1,472 | 1,472 | |||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment | 12 | 12 | 12 | 12 | |||||||
Stock-based compensation | 16 | 16 | 16 | 16 | |||||||
Other | 2 | 2 | 1 | 2 | |||||||
Balance at Jan. 31, 2016 | 3,786 | (3,028) | (16) | 742 | 2 | 3,909 | (3,150) | (16) | 744 | ||
Increase (decrease) in stockholders' equity (deficit) | |||||||||||
Net income | 196 | 196 | 196 | 196 | |||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment | 1 | 1 | 1 | 1 | |||||||
Stock-based compensation | 20 | 20 | 20 | 20 | |||||||
Other | (1) | (1) | (1) | (1) | |||||||
Balance at Jan. 29, 2017 | 3,806 | (2,833) | (15) | 958 | 2 | 3,962 | (2,969) | (15) | 960 | ||
Increase (decrease) in stockholders' equity (deficit) | |||||||||||
Cumulative effect of accounting change | 56 | 56 | 56 | 56 | |||||||
Net income | 970 | 970 | 970 | 970 | |||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustment | (2) | (2) | (2) | (2) | |||||||
Equity distribution to Parent | (541) | (541) | |||||||||
Stock-based compensation | 26 | 26 | 26 | 26 | |||||||
Other | (1) | (1) | (1) | ||||||||
Balance at Jan. 28, 2018 | $ 3,290 | $ (1,807) | $ (17) | $ 1,466 | $ 2 | $ 4,029 | $ (1,966) | $ (17) | $ 1,466 | ||
[1] | Accumulated Other Comprehensive Income (Loss) is comprised of cumulative foreign currency translation adjustments, net. | ||||||||||
[2] | Accumulated Other Comprehensive Income (Loss) is comprised of cumulative foreign currency translation adjustments, net. |
CONSOLIDATED STATEMENTS OF CA12
CONSOLIDATED STATEMENTS OF CASH FLOWS (HD Supply, Inc.) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 970 | $ 196 | $ 1,472 |
Reconciliation of net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 97 | 102 | 134 |
Provision for uncollectibles | 9 | 6 | 8 |
Non-cash interest expense | 16 | 17 | 23 |
Payment of discounts upon extinguishment of debt | (6) | (7) | (12) |
Loss on extinguishment & modification of debt | 84 | 179 | 100 |
Stock-based compensation expense | 26 | 20 | 16 |
Deferred income taxes | 407 | 129 | (839) |
(Gain) loss on sales of businesses, net | (934) | 6 | (186) |
Other | 2 | (11) | (4) |
Changes in assets and liabilities, net of the effects of acquisitions & dispositions: | |||
(Increase) decrease in receivables | (173) | (38) | (63) |
(Increase) decrease in inventories | (127) | (62) | (38) |
(Increase) decrease in other current assets | 6 | 3 | 11 |
(Increase) decrease in other assets | (2) | ||
Increase (decrease) in accounts payable and accrued liabilities | 125 | (16) | (14) |
Increase (decrease) in other long-term liabilities | (9) | (186) | |
Net cash provided by (used in) operating activities | 502 | 513 | 422 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (94) | (81) | (86) |
Proceeds from sales of property and equipment | 2 | 32 | 3 |
Proceeds from sales of businesses, net | 2,421 | 28 | 809 |
Net cash provided by (used in) investing activities | 2,329 | (21) | 726 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings of long-term debt | 113 | 1,547 | 287 |
Repayments of long-term debt | (1,529) | (2,631) | (1,152) |
Borrowings on long-term revolver debt | 628 | 689 | 784 |
Repayments on long-term revolver debt | (995) | (269) | (880) |
Debt issuance and modification costs | (26) | (19) | (6) |
Other financing activities | 4 | (3) | 2 |
Net cash provided by (used in) financing activities | (2,348) | (687) | (962) |
Effect of exchange rates on cash and cash equivalents | 1 | (2) | |
Increase (decrease) in cash and cash equivalents | 483 | (194) | 184 |
Cash and cash equivalents at beginning of period | 75 | 269 | 85 |
Cash and cash equivalents at end of period | 558 | 75 | 269 |
HD Supply, Inc. (Total HDS) | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 970 | 196 | 1,472 |
Reconciliation of net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 97 | 102 | 134 |
Provision for uncollectibles | 9 | 6 | 8 |
Non-cash interest expense | 16 | 17 | 23 |
Payment of discounts upon extinguishment of debt | (6) | (7) | (12) |
Loss on extinguishment & modification of debt | 84 | 179 | 100 |
Stock-based compensation expense | 26 | 20 | 16 |
Deferred income taxes | 407 | 129 | (839) |
(Gain) loss on sales of businesses, net | (934) | 6 | (186) |
Other | 2 | (11) | (4) |
Changes in assets and liabilities, net of the effects of acquisitions & dispositions: | |||
(Increase) decrease in receivables | (173) | (38) | (63) |
(Increase) decrease in inventories | (127) | (62) | (38) |
(Increase) decrease in other current assets | 6 | 3 | 11 |
(Increase) decrease in other assets | (2) | ||
Increase (decrease) in accounts payable and accrued liabilities | 125 | (16) | (14) |
Increase (decrease) in other long-term liabilities | (9) | (186) | |
Net cash provided by (used in) operating activities | 502 | 513 | 422 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Capital expenditures | (94) | (81) | (86) |
Proceeds from sales of property and equipment | 2 | 32 | 3 |
Proceeds from sales of businesses, net | 2,421 | 28 | 809 |
Net cash provided by (used in) investing activities | 2,329 | (21) | 726 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Equity distribution to Parent | (541) | ||
Borrowings of long-term debt | 113 | 1,547 | 287 |
Repayments of long-term debt | (1,529) | (2,631) | (1,152) |
Borrowings on long-term revolver debt | 628 | 689 | 784 |
Repayments on long-term revolver debt | (995) | (269) | (880) |
Debt issuance and modification costs | (26) | (19) | (6) |
Other financing activities | 4 | (3) | 2 |
Net cash provided by (used in) financing activities | (2,346) | (686) | (965) |
Effect of exchange rates on cash and cash equivalents | 1 | (2) | |
Increase (decrease) in cash and cash equivalents | 485 | (193) | 181 |
Cash and cash equivalents at beginning of period | 73 | 266 | 85 |
Cash and cash equivalents at end of period | $ 558 | $ 73 | $ 266 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jan. 28, 2018 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business HD Supply Holdings, Inc. ("Holdings") indirectly owns all of the outstanding common stock of HD Supply, Inc. ("HDS"). Holdings, together with its direct and indirect subsidiaries, including HDS ("HD Supply" or the "Company"), is one of the largest industrial distribution companies in North America. The Company specializes in two distinct market sectors: Maintenance, Repair & Operations and Specialty Construction. Through approximately 220 branches and 44 distribution centers, in the U.S. and Canada, the Company serves these markets with an integrated go-to-market strategy. HD Supply has approximately 11,000 associates delivering localized, customer-tailored products, services and expertise. The Company serves approximately 500,000 customers, which include contractors, maintenance professionals, home builders, industrial businesses, and government entities. HD Supply's broad range of end-to-end product lines and services includes approximately 600,000 stock-keeping units ("SKUs") of quality, name-brand and proprietary-brand products as well as value-add services supporting the entire life-cycle of a project from construction to maintenance, repair and operations. HD Supply is managed primarily on a product line basis and reports results of operations in two reportable segments: Facilities Maintenance and Construction & Industrial. In addition, the consolidated financial statements include Corporate and Eliminations, which is comprised of enterprise-wide functional departments. Principles of Consolidation The consolidated financial statements of HD Supply Holdings, Inc. present the results of operations, financial position and cash flows of HD Supply Holdings, Inc. and its wholly-owned subsidiaries, including HD Supply, Inc. The consolidated financial statements of HD Supply, Inc. present the results of operations, financial position and cash flows of HD Supply, Inc. and its wholly-owned subsidiaries. All material intercompany balances and transactions are eliminated. Results of operations of businesses acquired are included from their respective dates of acquisition. The results of operations of all discontinued operations have been separately reported as discontinued operations for all periods presented. Fiscal Year HD Supply's fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31. Fiscal year ended January 28, 2018 ("fiscal 2017"), fiscal year ended January 29, 2017 ("fiscal 2016"), and fiscal year ended January 31, 2016 ("fiscal 2015") each included 52 weeks. Estimates Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Actual results could differ from these estimates. Cash and Cash Equivalents HD Supply considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Allowance for Doubtful Accounts Accounts receivable are evaluated for collectability based on numerous factors, including past transaction history with customers, their credit worthiness, and an assessment of lien and bond rights. An allowance for doubtful accounts is estimated as a percentage of aged receivables. This estimate is periodically adjusted when management becomes aware of specific customer's inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in historical collection patterns. Inventories Inventories consist primarily of finished goods and are carried at the lower of cost or net realizable value. The cost of substantially all inventories is determined by the moving or weighted average cost method. Inventory value is evaluated at each balance sheet date to ensure that it is carried at the lower of cost or net realizable value. This evaluation includes an analysis of historical physical inventory results, a review of excess and obsolete inventories based on inventory aging, and anticipated future demand. Periodically, perpetual inventory records are adjusted to reflect declines in net realizable value below inventory carrying cost. Consideration Received From Vendors HD Supply enters into agreements with many of its vendors providing for inventory purchase rebates ("vendor rebates") upon achievement of specified volume purchasing levels. Vendor rebates are accrued as part of cost of sales for products sold based on progress towards earning the vendor rebates, taking into consideration cumulative purchases of inventory to date and projected purchases through the end of the year. An estimate of unearned vendor rebates is included in the carrying value of inventory at each period end for vendor rebates recognized on products not yet sold. At January 28, 2018 and January 29, 2017, vendor rebates due to HD Supply were $58 million and $50 million, respectively. These receivables are included in Receivables in the accompanying Consolidated Balance Sheets. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method based on the following estimated useful lives of the assets: Buildings and improvements 5 - 45 years Transportation equipment 5 - 7 years Furniture, fixtures and equipment 3 - 10 years Capitalized Software Costs HD Supply capitalizes certain software costs, which are being amortized on a straight-line basis over the estimated useful lives of the software, generally three years. At January 28, 2018 and January 29, 2017, capitalized software costs totaled $27 million and $30 million, respectively, net of accumulated amortization of $209 million and $205 million, respectively. Amortization of capitalized software costs totaled $24 million, $25 million, and $37 million, in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Goodwill Goodwill represents the excess of purchase price over fair value of net assets acquired. HD Supply does not amortize goodwill, but does assess the recoverability of goodwill on an annual basis or whenever events or circumstances indicate that it is "more likely than not" that the fair value of a reporting unit has dropped below its carrying value. The Company determines the fair values of its identified reporting units using a discounted cash flow ("DCF") analysis and a market comparable method, with each method being equally weighted in the calculation. Determining fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market comparable approach. There were no goodwill impairment charges recorded in fiscal 2017, fiscal 2016, or fiscal 2015. Impairment of Long-Lived Assets Long-lived assets, including property and equipment, are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. To analyze recoverability, undiscounted future cash flows over the remaining life of the asset are projected. If these projected cash flows are less than the carrying amount, an impairment loss is recognized to the extent the fair value of the asset less any costs of disposition is less than the carrying amount of the asset. Judgments regarding the existence of impairment indicators are based on market and operational performance. Evaluating potential impairment also requires estimates of future operating results and cash flows. Self-Insurance HD Supply has a high deductible insurance program for most losses related to general liability, product liability, environmental liability, automobile liability, workers' compensation, and is self-insured for medical claims, while maintaining per employee stop loss coverage, and certain legal claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Self-insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. At January 28, 2018 and January 29, 2017, self-insurance reserves for continuing operations totaled approximately $51 million and $56 million, respectively. At January 29, 2017, self-insurance reserves classified as discontinued operations totaled approximately $23 million. See "Note 2, Discontinued Operations" for further information on the sale of the Waterworks business. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable, accrued compensation and benefits and other current liabilities approximate fair value due to the short-term nature of these financial instruments. The Company's long-term financial assets and liabilities are recorded at historical costs. See "Note 6, Fair Value Measurements," for information on the fair value of long-term financial instruments. Revenue Recognition HD Supply recognizes revenue when persuasive evidence of an agreement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed and determinable and collectability is reasonably assured. HD Supply ships products to customers by internal fleet and third party carriers. Revenues, net of sales tax and allowances for returns and discounts, are recognized from product sales when title to and risk of loss for the products is passed to the customer, which generally occurs at the point of destination. Revenues related to services are recognized in the period the services are performed and totaled $37 million, $25 million, and $24 million in fiscal 2017, fiscal 2016 and fiscal 2015, respectively. Shipping and Handling Fees and Costs HD Supply includes shipping and handling fees billed to customers in Net sales. Shipping and handling costs associated with inbound freight are capitalized to inventories and relieved through Cost of sales as inventories are sold. Shipping and handling costs associated with outbound freight are included in Selling, general and administrative expenses and totaled $99 million, $97 million, and $86 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Concentration of Credit Risk The majority of HD Supply's sales are credit sales which are made primarily to customers whose ability to pay is dependent, in part, upon the economic strength of industries and the areas where they operate. Concentration of credit risk with respect to trade accounts receivable is limited by the large number of customers comprising HD Supply's customer base. HD Supply performs ongoing credit evaluations of its customers. Leases Leases are reviewed for capital or operating classification at their inception under the guidance of Accounting Standards Codification ("ASC") 840, "Leases." The Company uses its incremental borrowing rate in the assessment of lease classification and assumes the initial lease term includes renewal options that are reasonably assured. HD Supply conducts operations primarily under operating leases. For leases classified as operating leases, the Company records rent expense on a straight-line basis, over the lease term beginning with the date the Company has access to the property which in some cases is prior to commencement of lease payments. Accordingly, the amount of rental expense recognized in excess of lease payments is recorded as a deferred rent liability and is amortized to rental expense over the remaining term of the lease. Advertising Advertising costs are charged to expense as incurred except for the costs of producing and distributing certain direct response sales catalogs, which are capitalized and charged to expense over the life of the related catalog. Advertising expenses were approximately $33 million, $32 million, and $32 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Capitalized advertising costs related to direct response advertising were not material. Income Taxes The Company provides for federal, state and foreign income taxes currently payable, as well as for those deferred due to temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. Federal, state and foreign tax benefits are recorded as a reduction of income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date. The Company consists of corporations, limited liability companies and partnerships. All income tax expense (benefit) of the Company is recorded in the accompanying Consolidated Statements of Operations and Comprehensive Income with the offset recorded through the Company's current tax accounts, deferred tax accounts, or stockholder's equity account as appropriate. Comprehensive Income Comprehensive income includes Net income adjusted for certain revenues, expenses, gains and losses that are excluded from net income under GAAP. Adjustments to net income are for foreign currency translation adjustments. Foreign Currency Translation Assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar, primarily Canadian dollars, are translated into U.S. dollars at the current rate of exchange on the last day of the reporting period. Revenues and expenses are translated at a monthly average exchange rate and equity transactions are translated using either the actual exchange rate on the day of the transaction or a monthly average exchange rate. Stock-Based Compensation The HD Supply Holdings, Inc. Omnibus Incentive Plan, approved by Holdings' stockholders on May 17, 2017, (the "Plan") provides for stock-based awards to employees, consultants and directors, including stock options, stock purchase rights, restricted stock, restricted stock units, deferred stock units, performance shares, performance units, stock appreciation rights, dividend equivalents and other stock-based awards. The Plan is an amendment and restatement of the HD Supply Holdings, Inc. 2013 Omnibus Incentive Plan, which replaced and succeeded the HDS Investment Holding, Inc. Stock Incentive Plan (the "Stock Incentive Plan"), and, from and after June 26, 2013, no further awards may be made under the Stock Incentive Plan. Both plans are accounted for under ASC 718, "Compensation—Stock Compensation," which requires the recognition of share-based compensation costs in the financial statements. The Company includes these costs in Selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Income (Loss). Recently Adopted Accounting Pronouncements Stock Compensation —In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). The new guidance identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. The Company adopted the guidance from this amendment on January 30, 2017 (the first day of fiscal 2017) recording a $56 million cumulative-effect adjustment to retained earnings in order to recognize a deferred tax asset on the excess deduction for stock option exercises over the expense recorded for book purposes. In fiscal 2017, the Company recognized a $16 million benefit in the tax provision reflecting the excess stock-based compensation expense deductible for tax purposes over the amount expensed for book purposes for options exercised. Inventory —In July 2015, the FASB issued ASU No. 2015-11, "Inventory, Simplifying the Measurement of Inventory" ("ASU 2015-11"). The amended guidance requires that inventory be measured at the lower of cost and net realizable value. The amended guidance is limited to inventory measured using the first-in, first-out ("FIFO") or average cost methods and excludes inventory measured using last-in, first-out ("LIFO") or retail inventory methods. ASU 2015-11 is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this guidance on January 30, 2017 (the first day of fiscal 2017) with no material impact on the Company's financial position, results of operations or cash flows. Recently Issued Accounting Pronouncements Not Yet Adopted Stock Compensation —In May 2017, the FASB issued ASU No. 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting" ("ASU 2017-09"). The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The ASU is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. Goodwill —In January 2017, the FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. The ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The amendments in this update should be applied on a prospective basis. The adoption of ASU 2017-04 is not expected to have a material impact on the Company's financial position, results of operations or cash flows. Statement of Cash Flows —In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash" ("ASU 2016-18"). The new guidance is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied retrospectively to all periods presented. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. On a prospective basis, the ASU will only impact the Company to the extent it has restricted cash. Income Taxes —In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes (Topic 740): Intra-entity Transfers of Assets Other than Inventory" ("ASU 2016-16"). The new guidance is intended to improve the accounting for intra-entity transfers of assets other than inventory by requiring recognition of income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. ASU 2016-16 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. Statement of Cash Flows —In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"). The new guidance is intended to reduce diversity in practice related to certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. Leases —In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), amended by ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)," and ASU 2018-01, "Leases (Topic 842)-Land Easement Practical Expedient for Transition to Topic 842." The amended guidance requires companies to recognize all leases as assets and liabilities for the rights and obligations created by leased assets on the consolidated balance sheet. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. It is to be adopted using a modified retrospective approach. The Company is currently evaluating the impact of adopting ASU 2016-02. Revenue recognition —In May 2014, the FASB issued ASU No. 2014-09, "Revenue from contracts with customers" ("ASU 2014-09"), amended by ASU 2016-10, "Revenue from contracts with customers (Topic 606): Identifying Performance Obligations and Licensing," ASU 2016-12, "Revenue from contracts with customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)," and ASU 2017-14, "Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606)." The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue arising from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." The update requires significant additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. Entities have the option of using either a full retrospective or modified approach to adopt the guidance. In July 2015, the FASB provided a one-year delay in the effective date of ASU 2014-09, to be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and a permission to early adopt for annual and interim periods beginning after December 15, 2016. The Company plans to adopt the provisions of ASU 2014-09 using the modified retrospective method. The Company completed its analysis of reviewing customer contracts and applying the five-step model of the new standard to each contract category identified to identify necessary adjustments to existing accounting policies and to quantify the ASU's impact. The Company has concluded that most of its contracts with customers consist of a single performance obligation to transfer promised goods or services and therefore will not be impacted by the adoption of ASU 2014-09. The adoption of ASU 2014-09 will impact the Company's method of recognizing certain installation income, which is generally recognized when the customer order is fully installed. ASU 2014-09 requires installation income to be recognized as each performance obligation within a contract is completed. The Company's installation contracts are typically completed in less than 90 days. Due to the seasonal nature of the Company's installation business, recognized revenue could shift between quarters within the year. While the Company will provide expanded disclosure requirements, such as disaggregation of revenue, to comply with ASU 2014-09, it does not expect the adoption of ASU 2014-09 to have a material impact on the Company's annual financial position, results of operations or cash flows. The Company will adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard on January 29, 2018 (the first day of fiscal 2018). The Company does not plan to make any adjustments to its financial position upon adoption of ASU 2014-09. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Jan. 28, 2018 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | NOTE 2—DISCONTINUED OPERATIONS In August 2017, the Company completed the sale of its Waterworks business and received cash proceeds of approximately $2.4 billion, net of transaction cost payments of approximately $38 million. Including the final working capital settlement of approximately $29 million in January 2018, the Company recognized a gain on the sale of the Waterworks business of approximately $732 million, net of tax of $197 million. In October 2017, the Company recognized a $3 million gain due to the expiration of indemnification for tax positions related to the Canadian operations of the Power Solutions business whose sale was completed by the Company in October 2015. In May 2016, the Company completed the sale of its Interior Solutions business. Including the final working capital settlement in September 2016, the Company received cash proceeds of approximately $26 million, net of $2 million of transaction costs. As a result of the sale, the Company recorded a $10 million pre-tax loss. In October 2015, the Company completed the sale of its Power Solutions business. Including the final working capital settlement in May 2016, the Company received cash proceeds of approximately $812 million, net of $16 million of transaction costs. As a result of the sale, the Company recorded a $189 million pre-tax gain. Summary Financial Information In accordance with ASC 205-20, "Discontinued Operations" and ASU 2014-08, "Reporting discontinued operations and disclosure of disposals of components of an entity," the results of Waterworks, Interior Solutions, and Power Solutions operations and the gains/losses on sales of the businesses are classified as discontinued operations. The presentation of discontinued operations includes revenues and expenses of the discontinued operations and gain/loss on the disposition of businesses, net of tax, as one line item on the Consolidated Statements of Operations and Comprehensive Income (Loss). All Consolidated Statements of Operations and Comprehensive Income (Loss) presented have been revised to reflect this presentation. The following table provides additional detail related to the results of operations of the discontinued operations (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Net sales $ $ $ Cost of sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit Operating expenses: Selling, general and administrative Depreciation and amortization Restructuring — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses Operating Income (Gain) loss on disposal of discontinued operations ) ) Other (income) expense, net — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before provision for income taxes Provision (benefit) for income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations, net of tax $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At January 28, 2018 and January 29, 2017, the carrying amounts of major classes of assets and liabilities of discontinued operations in the Consolidated Balance Sheets were as follows (amounts in millions): January 28, January 29, Current assets: Receivables, less allowance for doubtful accounts of $0 and $4 $ — $ Inventories — Other current assets — ​ ​ ​ ​ ​ ​ ​ ​ Total current assets — ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net — Goodwill — Intangible assets, net — ​ ​ ​ ​ ​ ​ ​ ​ Total non-current assets — ​ ​ ​ ​ ​ ​ ​ ​ Total assets of discontinued operations $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: Accounts payable $ — $ Accrued compensation and benefits — Other current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Other non-current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total non-current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities of discontinued operations $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table provides additional detail related to the net cash provided by (used in) operating and investing activities of the discontinued operations (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Net cash flows provided by (used in) operating activities $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Capital expenditures ) ) ) Proceeds from sales of businesses, net Proceeds from sales of property and equipment, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows provided by (used in) investing activities $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Jan. 28, 2018 | |
RELATED PARTIES | |
RELATED PARTIES | NOTE 3—RELATED PARTIES On August 30, 2007, investment funds associated with Clayton, Dubilier & Rice, LLC ("CD&R"), The Carlyle Group ("Carlyle") and Bain Capital Partners, LLC ("Bain", and together with CD&R and Carlyle the "Equity Sponsors") formed Holdings (previously named HDS Investment Holding, Inc.) and entered into a stock purchase agreement with The Home Depot Inc. ("Home Depot") pursuant to which Home Depot agreed to sell to Holdings, or to a wholly-owned subsidiary of Holdings, certain intellectual property and all the outstanding common stock of HDS and the Canadian subsidiary CND Holdings, Inc. On August 30, 2007, through a series of transactions, Holdings' direct wholly-owned subsidiary, HDS Holding Corporation, acquired direct control of HDS through the merger of its wholly-owned subsidiary, HDS Acquisition Corp., with and into HDS and CND Holdings, Inc. Through these transactions (the "2007 Transactions"), Home Depot was paid cash of $8.2 billion and 12.5% of Holdings' then outstanding common stock. Upon completion of Holdings' secondary public offering in fiscal 2015, Home Depot and the Equity Sponsors sold all of their remaining original investments in Holdings. Purchases —HD Supply purchased product from affiliates of Bain for $8 million in fiscal 2015. Management believes these transactions were conducted at prices that an unrelated third party would pay. Sales —In May 2015, an independent Board member of the Company acquired a minority interest in an HD Supply customer. HD Supply sold product to the customer totaling $3 million, $3 million, and $4 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Management believes these transactions were conducted at prices that an unrelated third party would pay. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Jan. 28, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 4—GOODWILL AND INTANGIBLE ASSETS Goodwill The carrying amount of goodwill by reporting unit is as follows (amounts in millions): As of January 28, 2018 As of January 29, 2017 Gross Accumulated Net Gross Accumulated Net Facilities Maintenance $ $ — $ $ $ — $ Construction & Industrial-WhiteCap ) ) Home Improvement Solutions ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total goodwill $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill represents the excess of purchase price over fair value of net assets acquired. HD Supply does not amortize goodwill, but does assess the recoverability of goodwill on an annual basis, in the fourth quarter of each fiscal year. If an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, an interim impairment test would be performed between annual tests. HD Supply performed the annual goodwill impairment testing during the fourth quarter of fiscal 2017 (as of October 29, 2017). There was no indication of impairment in any of the Company's reporting units in the fiscal 2017 annual test or in the fiscal 2016 and fiscal 2015 annual tests. The Company's analysis was based, in part, on HD Supply's expectation of future market conditions for each of the reporting units, as well as, discount rates that would be used by market participants in an arms-length transaction. Future events could cause the Company to conclude that market conditions have declined to the extent that the Company's goodwill could be impaired. Intangible Assets HD Supply's intangible assets as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): As of January 28, 2018 As of January 29, 2017 Gross Accumulated Net Gross Accumulated Net Customer relationships $ $ ) $ $ $ ) $ Trade names ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During fiscal 2017, the Company wrote-off approximately $3 million of gross, fully amortized intangible assets. Amortization expense for continuing operations related to intangible assets was $12 million in fiscal 2017, fiscal 2016, and fiscal 2015. Estimated future amortization expense for continuing operations for intangible assets recorded as of January 28, 2018 is $11 million each year for fiscal years 2018 through 2022. |
DEBT
DEBT | 12 Months Ended |
Jan. 28, 2018 | |
DEBT | |
DEBT | NOTE 5—DEBT 2017 Refinancing Transactions On December 28, 2017, HDS reduced its U.S. borrowing capacity under its Senior ABL Facility, as defined below, by $500 million. The total borrowing capacity under the Senior ABL Facility is now $1,000 million (subject to availability under a borrowing base). As a result, the Company incurred a $3 million loss on extinguishment of debt for the write-off of unamortized deferred financing costs, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On September 1, 2017, HDS used a portion of the net proceeds from the sale of the Waterworks business to redeem all of the outstanding $1,250 million in aggregate principal amount of 5.25% Senior Secured First Priority Notes due 2021 (the "December 2014 First Priority Notes") for an aggregate redemption price of approximately $1,325 million. The redemption price included an approximately $62 million make-whole premium calculated in accordance with terms of the indenture governing the December 2014 First Priority Notes ("the 2014 indenture") and $14 million of accrued but unpaid interest to the redemption date. In connection with the redemption, the 2014 indenture, was satisfied and discharged and the liens securing the December 2014 First Priority Notes were released in accordance with the terms of the 2014 indenture. As a result of the redemption, the Company incurred a $73 million loss on extinguishment of debt, which includes the $62 million make-whole premium and the write-off of $11 million of unamortized deferred financing costs, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On August 31, 2017, HDS entered into a Fifth Amendment (the "Fifth Amendment") to the credit agreement governing HDS's existing Term Loan Facility, as defined below. Pursuant to the Fifth Amendment, HDS amended its existing Term Loan Facility to, among other things, (i) refinance all the outstanding term loans in an original aggregate principal amount of $842 million (the "Term B-1 Loans") with a new tranche of term loans (the "Term B-3 Loans") in an aggregate principal amount of $535 million, (ii) refinance all the outstanding term loans in an original aggregate principal of $550 million (the "Term B-2 Loans") with a new tranche of term loans (the "Term B-4 Loans") in an aggregate principal amount of $546 million, and (iii) amend the definition of "Permitted Payments" contained in the credit agreement to permit an additional category of Permitted Payments permitting Restricted Payments (as defined in the credit agreement) at any time in an aggregate amount not to exceed (x) $500,000,000 and (y) thereafter, upon full use of such capacity set forth in clause (x), an additional amount, if any, such that, after giving pro forma effect to such Restricted Payment, the Company's Consolidated Total Leverage Ratio (as defined in the credit agreement) does not exceed 3.00 to 1.00. The Fifth Amendment also provides for a prepayment premium equal to 1.00% of the aggregate principal amount of the applicable Term Loans, as defined below, being prepaid if, on or prior to March 2, 2018, the Company enters into certain repricing transactions. In connection with the Fifth Amendment, the Company paid approximately $1 million in consent fees and incurred a modification and extinguishment charge of approximately $3 million, which includes financing fees and other costs of approximately $1 million and the write-off of approximately $2 million of a portion of the related unamortized original issue discount and deferred financing costs, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On August 25, 2017, HDS entered into the Second Supplemental Indenture (the "Second Supplemental Indenture") which amends and supplements the Indenture, dated as of April 11, 2016, as amended and supplemented by the First Supplemental Indenture, dated as of April 11, 2016 (together, the "2016 indenture"). Holders of a majority in aggregate principal amount of the outstanding April 2016 Senior Unsecured Notes consented to the proposed amendments included in the Second Supplemental Indenture. The Second Supplemental Indenture (a) amends the definition of "Permitted Payments" contained in the 2016 indenture to permit an additional category of Permitted Payments permitting Restricted Payments (as defined in the Indenture) at any time in an aggregate amount not to exceed (x) $500,000,000 and (y) thereafter, upon full use of such capacity set forth in clause (x), an additional amount, if any, such that, after giving pro forma effect to such Restricted Payment, the Company's Consolidated Total Leverage Ratio (as defined in the Indenture) does not exceed 3.00 to 1.00; (b) increase the interest rate for the April 2016 Senior Unsecured Notes to 7.00% per annum commencing April 15, 2019, to the extent the April 2016 Senior Unsecured Notes remain outstanding after April 15, 2019; (c) amend the definition of "Net Available Cash" contained in the Indenture to provide that proceeds from the sale of the Waterworks business unit consummated on August 1, 2017 (other than proceeds to be applied to redeem the December 2014 First Priority Notes) shall be excluded and accordingly, the Company will not be required to apply the remaining net proceeds in accordance with the provision of the "Sale of Assets" covenant of the Indenture, and (d) amend the definition of "Consolidated EBITDA" contained in the 2016 indenture to provide that while the Company may continue to include in the calculation thereof projected cost savings, it may only do so with respect those realized as a result of actions taken or to be taken in connection with a purchase of assets from, or a sale of assets to, a third party (excluding the Waterworks Sale (as defined in the Second Supplemental Indenture)). As a result of entering into the Second Supplemental Indenture, the Company paid approximately $15 million in consent fees to holders of the outstanding April 2016 Senior Unsecured Notes, which are capitalized as deferred financing costs and amortized over the expected life of the April 2016 Senior Unsecured Notes. Additionally, the Company incurred a modification charge of approximately $3 million for financing fees, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On April 18, 2017, HDS used cash and available borrowings under its Senior ABL Facility to repay $100 million aggregate principal of its Term B-1 Loans. As a result, the Company incurred a $2 million loss on extinguishment of debt, which included write-offs of unamortized original issue discount and unamortized deferred financing costs for $1 million each, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On April 5, 2017, HDS entered into a Third Amendment (the "Third Amendment") to the credit agreement governing its existing Senior ABL Facility. The Third Amendment, among other things, reduced the applicable margin for borrowings under the Senior ABL Facility, reduced the applicable commitment fee, and extended the maturity date of the Senior ABL Facility until April 5, 2022. As a result, the Company recorded a $1 million loss on extinguishment of debt, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments," for the write-off of $1 million of unamortized deferred financing costs. HDS's long-term debt as of January 28, 2018 and January 29, 2017 consisted of the following (dollars in millions): January 28, 2018 January 29, 2017 Outstanding Interest Outstanding Interest Senior ABL Facility due 2022 $ $ Term B-1 Loans due 2021 — — Term B-2 Loans due 2023 — — Term B-3 Loans due 2021 — — Term B-4 Loans due 2023 — — December 2014 First Priority Notes due 2021 — — April 2016 Senior Unsecured Notes due 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total gross long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less unamortized discount ) ) Less unamortized deferred financing costs ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net long-term debt $ $ Less current installments ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net long-term debt, excluding current installments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Represents the stated rate of interest, without including the effect of discounts or premiums. Senior Credit Facilities Asset Based Lending Facility The Senior ABL Facility provides for senior secured revolving loans and letters of credit of up to a maximum aggregate principal amount of $1,000 million (subject to availability under a borrowing base). Extensions of credit under the Senior ABL Facility will be limited by a borrowing base calculated periodically based on specified percentages of the value of eligible inventory and eligible accounts receivable, subject to certain reserves and other adjustments. As of January 28, 2018, HDS had $909 million of additional available borrowings under the Senior ABL Facility (after giving effect to the borrowing base limitations and approximately $27 million in letters of credit issued and including $235 million of borrowings available on qualifying cash balances). As of January 28, 2018, all outstanding borrowings on the Senior ABL Facility are Canadian borrowings. A portion of the Senior ABL Facility is available for letters of credit and swingline loans. The Senior ABL Facility also includes a sub-facility for loans and letters of credit in Canadian dollars. The Senior ABL Facility also permits HDS to add one or more incremental term loans, revolving or letter of credit facilities to be included in the Senior ABL Facility up to an aggregate maximum amount of $1,400 million for the total commitments under the Senior ABL Facility (including all incremental commitments). At HDS's option, the interest rates applicable to the loans under the Senior ABL Facility are based (i) in the case of U.S. dollar-denominated loans, either at London Interbank Offered Rate ("LIBOR") plus an applicable margin or Prime Rate plus an applicable margin and (ii) in the case of Canadian dollar-denominated loans, either the banker's acceptance ("BA") rate plus an applicable margin or the Canadian Prime Rate plus an applicable margin. The margins applicable for each elected interest rate are subject to a pricing grid, as defined in the Senior ABL Facility agreement, based on average excess availability for the previous fiscal quarter. The Senior ABL Facility also contains a letter of credit fee computed at a rate per annum equal to the Applicable Margin (as defined in the agreement) then in effect for LIBOR Loans and an unused commitment fee subject to a pricing grid, as included in the Senior ABL Facility agreement, based on the Average Daily Used Percentage (as defined in the agreement). The Senior ABL Facility will mature on April 5, 2022, unless the individual applicable lenders agree to extend the maturity of their respective loans under the Senior ABL Facility upon HDS's request and without the consent of any other applicable lender. Prepayments The Senior ABL Facility may be prepaid at HDS's option at any time without premium or penalty and will be subject to mandatory prepayment if the outstanding Senior ABL Facility exceeds either the aggregate commitments with respect thereto or the current borrowing base, in an amount equal to such excess. Mandatory prepayments do not result in a permanent reduction of the lenders' commitments under the Senior ABL Facility. Guarantees; Security The Senior ABL Facility is senior secured indebtedness of HDS and ranks equal in right of payment with all of HDS's existing and future senior indebtedness and senior in right of payment to all of HDS's existing and future subordinated indebtedness. HDS, and at HDS's option, certain of HDS's subsidiaries, including HD Supply Canada, Inc., a Canadian subsidiary (the "Canadian Borrower"), are the borrowers under the Senior ABL Facility. Each of HDS's existing and future direct and indirect wholly owned domestic subsidiaries, in each case to the extent permitted by applicable law, regulation and contractual provision and subject to certain exceptions (the "Subsidiary Guarantors") guarantees HDS's payment obligations under the Senior ABL Facility (and, in the case of Canadian obligations, each existing and future direct and indirect wholly owned Canadian subsidiary, in each case to the extent permitted by applicable law, regulation and contractual provision and subject to certain exceptions (the "Canadian Guarantors") guarantee the Canadian Borrower's payment obligations under the Senior ABL Facility). HDS's obligations under the Senior ABL Facility and the guarantees thereof are secured in favor of the U.S. ABL collateral agent (i) on a first-priority basis by substantially all accounts receivable, inventory and other related assets owned by HDS and each Subsidiary Guarantor and all proceeds thereof, in each case to the extent permitted by applicable law and subject to certain exceptions (the "ABL Priority Collateral"), subject to permitted liens, and (ii) (x) all of the capital stock of HDS, all capital stock of all domestic subsidiaries directly owned by HDS and the Subsidiary Guarantors and 65% of the capital stock of any foreign subsidiary held directly by HDS or any Subsidiary Guarantor (with foreign subsidiary holding companies being deemed foreign subsidiaries) and (y) substantially all tangible and intangible assets owned by HDS and each Subsidiary Guarantor, other than the ABL Priority Collateral, and all proceeds thereof, in each case to the extent permitted by applicable law and subject to certain exceptions (the "Cash Flow Priority Collateral" and, together with the ABL Priority Collateral, the "Collateral"); in each case, subject to the priority of liens among the Term Loan Facility (as defined below) and the Senior ABL Facility. The Canadian obligations under the Senior ABL Facility are also secured by liens on substantially all assets of the Canadian Borrower and the Canadian Guarantors, subject to certain exceptions. Covenants The Senior ABL Facility contains a number of covenants that, among other things, limit or restrict HDS's ability and, in certain cases, HDS's subsidiaries to make acquisitions, mergers, consolidations, dividends, and to prepay certain indebtedness, in each case to the extent any such transaction would reduce availability under the Senior ABL Facility below a specified amount. In addition, if HDS's specified excess availability (including an amount by which HDS's borrowing base exceeds the existing commitments) under the Senior ABL Facility falls below the greater of $100 million and 10% of the lesser of (A) the Borrowing Base and (B) the Total Facility Commitment (a "Liquidity Event")., HDS will be required to maintain a Fixed Charge Coverage Ratio of at least 1.0:1.0, as defined in the credit agreement governing the Senior ABL Facility. The Senior ABL Facility also contains certain affirmative covenants, including financial and other reporting requirements. HDS is in compliance with all such covenants. Senior Term Loan Facility HDS's Senior Term Facility (the "Senior Term Facility") consists of a senior secured term loan facility (the "Term Loan Facility," and the term loans thereunder, the "Term Loans") providing for Term Loans in an original aggregate principal amount of $1,081 million. Term B-3 Loans will mature on August 13, 2021 and Term B-4 Loans will mature on October 17, 2023. Both Term B-3 Loans and Term B-4 Loans amortize in equal quarterly installments in aggregate principal amounts equal to 1.00% of the original principal amount of the Term Loans with the balances payable on their respective maturity dates. Term B-3 Loans bear interest at the applicable margin for borrowings of 2.25% for LIBOR borrowings and 1.25% for base rate borrowings. Term B-4 Loans bear interest at the applicable margin for borrowings of 2.50% for LIBOR borrowings and 1.50% for base rate borrowings. In accordance with the Fifth Amendment, annual excess cash flow ("ECF") provisions are applicable beginning with the fiscal year ending on January 28, 2018 (fiscal 2017) and each fiscal year thereafter. No payment was required to be offered for fiscal 2017, in accordance with the ECF provisions. During the first quarter of fiscal 2015 and in accordance with the annual ECF provisions of the Term Loan Facility prior to the Fourth Amendment to the credit agreement governing its existing Term Loan Facility (the "Fourth Amendment"), the Company offered a prepayment of $34 million based on the ECF calculation for fiscal 2014. The lenders of the Term Loan Facility accepted $16 million, which the Company paid on March 30, 2015. The Term Loan Facility is senior secured indebtedness of HDS and ranks equal in right of payment with all of HDS's existing and future senior indebtedness and senior in right of payment to all of HDS's existing and future subordinated indebtedness. The Term Loan Facility is guaranteed, on a senior secured basis, by the Subsidiary Guarantors. These guarantees are subject to release under customary circumstances. The guarantee of each Subsidiary Guarantor is a senior secured obligation of that Subsidiary Guarantor and ranks equal in right of payment with all existing and future senior indebtedness of that Subsidiary Guarantor and senior in right of payment to all existing and future subordinated indebtedness of such Subsidiary Guarantor. Collateral The Term Loan Facility and the related guarantees are secured by a first-priority security interest in substantially all of the tangible and intangible assets of HDS and the Subsidiary Guarantors (other than the ABL Priority Collateral, in which the Term Loan Facility and the related guarantees have a second priority security interest), including pledges of all Capital Stock of the Restricted Subsidiaries directly owned by HDS and the Subsidiary Guarantors (but only up to 65% of each series of Capital Stock of each direct Foreign Subsidiary owned by HDS or any Subsidiary Guarantor), subject to certain thresholds, exceptions and permitted liens, and excluding any Excluded Assets (as defined in the credit agreement governing the Term Loan Facility (the "Term Loan Credit Agreement")) and Excluded Subsidiary Securities (as defined in the Term Loan Credit Agreement) (the "Cash Flow Priority Collateral"), subject to permitted liens. In addition, the Term Loan Facility and the related guarantees are secured by a second-priority security interest in the ABL Priority Collateral, subject to permitted liens. Prepayment The Fifth Amendment provides for a prepayment premium equal to 1.00% of the aggregate principal amount of the applicable term loans being prepaid if, on or prior to March 2, 2018, the Company enters into certain repricing transactions. Under certain circumstances and subject to certain exceptions, the Term Loan Facility will be subject to mandatory prepayment in an amount equal to: · 100% of the net proceeds (other than those that are used to purchase certain assets or to repay certain other indebtedness) of certain asset sales and certain insurance recovery events; and · 50% of annual excess cash flow for any fiscal year, such percentage to decrease to 0% depending on the attainment of certain secured leverage ratio targets. Guarantee HDS is the borrower under the Term Loan Facility. The Subsidiary Guarantors guarantee HDS's payment obligations under the Term Loan Facility. HDS's obligations under the Term Loan Facility and the guarantees thereof are secured in favor of the collateral agent by (i) all of the capital stock of HDS, all capital stock of all domestic subsidiaries directly owned by HDS and the Subsidiary Guarantors and 65% of the capital stock of any foreign subsidiary owned directly by HDS or any Subsidiary Guarantors (it being understood that a foreign subsidiary holding company will be deemed a foreign subsidiary) and (ii) substantially all other tangible and intangible assets owned by HDS and each Subsidiary Guarantor, in each case to the extent permitted by applicable law and subject to certain exceptions and subject to the priority of liens between the Term Loan Facility and the Senior ABL Facility. Covenants The Term Loan Facility contains a number of covenants that, among other things, limit the ability of HDS and its restricted subsidiaries, as described in the Term Loan Credit Agreement, to: incur more indebtedness; pay dividends, redeem stock or make other distributions; make investments; create restrictions on the ability of HDS's restricted subsidiaries to pay dividends to HDS or make other intercompany transfers; create liens securing indebtedness; transfer or sell assets; merge or consolidate; enter into certain transactions with HDS's affiliates; and prepay or amend the terms of certain indebtedness. The Term Loan Facility also contains certain affirmative covenants, including financial and other reporting requirements. HDS is in compliance with all such covenants. Events of Default under the Senior ABL Facility and Term Loan Facility The Senior ABL Facility and Term Loan Facility also provide for customary events of default, including non-payment of principal, interest or fees, violation of covenants, material inaccuracy of representations or warranties, specified cross default and cross acceleration to other material indebtedness, certain bankruptcy events, certain ERISA events, material invalidity of guarantees or security interest, material judgments and changes of control. Secured Notes 5.25% Senior Secured First Priority Notes due 2021 HDS's December 2014 First Priority Notes bore interest at 5.25% per annum with a maturity date of December 15, 2021. Interest was paid semi-annually, in arrears, on June 15 th and December 15 th of each year, prior to the September 1, 2017 redemption described above under "2017 Refinancing Transactions." Unsecured Notes 5.75% Senior Unsecured Notes due 2024 HDS issued $1,000 aggregate principal amount of April 2016 Senior Unsecured Notes under an Indenture, dated as of April 11, 2016 (the "April 2016 Senior Unsecured Notes Indenture") among HDS, certain subsidiaries of HDS as guarantors and the Trustee. The April 2016 Senior Unsecured Notes bear interest at a rate of 5.75% per annum until April 15, 2019 and 7.00% per annum from April 15, 2019 until maturity on April 15, 2024. Interest is paid semi-annually, in arrears, on April 15 th and October 15 th of each year. The April 2016 Senior Unsecured Notes are unsecured senior indebtedness of HDS and rank equal in right of payment with all of HDS's existing and future senior indebtedness, senior in right of payment to all of HDS's existing and future subordinated indebtedness, and effectively subordinated to all of HDS's existing and future indebtedness, including, without limitation, indebtedness under the Senior Credit Facilities, to the extent of the value of the collateral securing each indebtedness. The April 2016 Senior Unsecured Notes are guaranteed, on a senior unsecured basis, by each of HDS's direct and indirect domestic existing and future subsidiaries that is a wholly owned domestic subsidiary (other than certain excluded subsidiaries), and by each other domestic subsidiary that is a borrower under the Senior ABL Facility or that guarantees HDS's obligations under any credit facility or capital markets securities. These guarantees are subject to release under customary circumstances as stipulated in the April 2016 Senior Unsecured Notes Indenture. Redemption HDS may redeem the April 2016 Senior Unsecured Notes, in whole or in part, at any time (1) prior to April 15, 2019, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, plus the applicable make-whole premium set forth in the April 2016 Senior Unsecured Notes Indenture and (2) on or after April 15, 2019, at the applicable redemption price set forth below (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, to the relevant redemption date, if redeemed during the 12-month period commencing on April 15 of the year set forth below. Year Percentage 2019 % 2020 % 2021 % 2022 and thereafter % In addition, at any time prior to April 15, 2019, HDS may redeem on one or more occasions up to 40% of the aggregate principal amount of the April 2016 Senior Unsecured Notes with the proceeds of certain equity offerings at a redemption price of 105.75% of the principal amount in respect of the April 2016 Senior Unsecured Notes being redeemed, plus accrued and unpaid interest to the redemption date, provided, however, that if the April 2016 Senior Unsecured Notes are redeemed, an aggregate principal amount of April 2016 Senior Unsecured Notes equal to at least 50% of the original aggregate principal amount of April 2016 Senior Unsecured Notes must remain outstanding immediately after each such redemption of April 2016 Senior Unsecured Notes. Debt Maturities Maturities of long-term debt outstanding, in principal amounts, at January 28, 2018 are summarized below (amounts in millions): Fiscal Year 2018 2019 2020 2021 2022 Thereafter Total Principal maturities $ $ $ $ $ $ $ Fiscal 2016 and Fiscal 2015 Transactions On January 26, 2017, HDS used cash and available borrowings under its Senior ABL Facility, to repay $200 million aggregate principal of its Term B-1 Loans. As a result, the Company incurred a $5 million loss on extinguishment of debt, which includes write-offs of $2 million and $3 million of unamortized original issue discount and unamortized deferred financing costs, respectively, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On October 14, 2016, HDS entered into the Fourth Amendment to the credit agreement governing its existing Term Loan Facility. Pursuant to the Fourth Amendment, HDS amended its existing Term Loan Facility to, among other things, (i) eliminate its LIBOR floor by means of a replacement tranche that replaced all of the Company's outstanding term loans in an aggregate principal amount of approximately $842 million (the "Term B-1 Loans") and (ii) issue a new tranche of term loans in an aggregate principal amount of $550 million (the "Term B-2 Loans"). Pursuant to the Fourth Amendment, the Term B-1 Loans bore interest at the applicable margin for borrowings of 2.75% for LIBOR borrowings and 1.75% for base rate borrowings, with no LIBOR floor. The Term B-1 Loans amortized in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of the replaced tranche with the balance payable on the maturity date, August 13, 2021. The Term B-2 Loans bore interest at the applicable margin for borrowings of 2.75% for LIBOR borrowings and 1.75% for base rate borrowings, with no LIBOR floor. The Term Loan Facility allowed for a reduction in the applicable margin on the Term B-2 Loans from 2.75% per annum to 2.50% per annum upon the Company reaching a consolidated total leverage ratio, as defined in the agreement, of 3.0x or less. The Term B-2 Loans amortized in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount and had a maturity date of October 17, 2023. On October 17, 2016, HDS used the proceeds from the Term B-2 Loans, together with available cash and available borrowings under its Senior ABL Facility, to redeem all of the outstanding $1,275 million aggregate principal of its 7.5% Senior Unsecured Notes due 2020 (the "February 2013 Senior Unsecured Notes"), and pay a $48 million premium in accordance with the terms of the indenture governing such notes. As a result, the Company incurred a $59 million loss on extinguishment of debt, which includes the $48 million premium and write-off of $11 million of unamortized deferred financing costs, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On April 11, 2016, HDS issued $1,000 million of 5.75% Senior Unsecured Notes due 2024 (the "April 2016 Senior Unsecured Notes") at par. HDS received approximately $985 million, net of transaction fees. The transaction fees of $15 million are reflected as deferred financing costs on the Consolidated Balance Sheets and will be amortized into interest expense over the term of the notes. On April 27, 2016, HDS used the net proceeds from the April 2016 Senior Unsecured Notes issuance, together with available cash, to redeem all of the outstanding $1,000 million aggregate principal of its 11.5% Senior Unsecured Notes due 2020 (the "October 2012 Senior Unsecured Notes"), and pay a $106 million make-whole premium calculated in accordance with the terms of the indenture governing such notes and pay $4 million of accrued but unpaid interest to the redemption date. As a result, the Company incurred a $115 million loss on extinguishment of debt, which includes the $106 million make-whole premium and the write-off of $9 million of unamortized deferred financing costs, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On October 13, 2015, HDS used proceeds from the sale of the Power Solutions business unit to redeem all of the outstanding $675 million aggregate principal amount of its 11% Senior Secured Second Priority Notes due 2020 (the "April 2012 Second Priority Notes") and paid a $72 million make-whole premium calculated in accordance with the terms of the indenture governing such notes and $37 million of accrued but unpaid interest to the redemption date. As a result, the Company recorded an $80 million loss on extinguishment of debt, which includes the $72 million make-whole premium and the write-off of $8 million of unamortized deferred financing costs, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." On August 13, 2015, HDS entered into an incremental amendment (the "Incremental Agreement") to the credit agreement governing its Term Loan Facility, as defined above, pursuant to which HDS requested a borrowing of a new $850 million tranche of senior secured term loans, the proceeds of which, together with cash on hand and available borrowings under HDS's Senior ABL Facility, were used to prepay in full the tranche of senior secured term loans outstanding under the Term Loan Facility as of the date of the Incremental Agreement. Pursuant to the Incremental Agreement, the Term Loans were set to mature on August 13, 2021 and bore interest at the reduced applicable margin for borrowings of 2.75% for LIBOR borrowings and 1.75% for base rate borrowings (down from, respectively, 3.00% and 2.00% applicable to the redeemed term loans), with the LIBOR floor remaining at 1.00%. The Term Loans amortized in equal quarterly installments in aggregate annual amounts equal to 1.00% of the original principal amount of such Term Loans, beginning in December 2015 with the balance payable on such Term Loans' maturity date. In connection with the amendment, the Company recorded a modification and extinguishment charge of $20 million, which includes financing fees of $5 million and $15 million to write off a portion of the related unamortized original issue discount and unamortized deferred financing costs, in accordance with ASC 470-50, "Debt—Modifications and Extinguishments." |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jan. 28, 2018 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 6—FAIR VALUE MEASUREMENTS The fair value measurements and disclosure principles of GAAP (ASC 820, "Fair Value Measurements Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly; Level 3 — Unobservable inputs in which little or no market activity exists. The Company's financial instruments that are not reflected at fair value on the balance sheet were as follows as of January 28, 2018 and January 29, 2017 (amounts in millions): As of January 28, As of January 29, Recorded Estimated Recorded Estimated Senior ABL Facility $ $ $ $ Term Loans and Notes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These amounts do not include accrued interest; accrued interest is classified as Other current liabilities in the accompanying Consolidated Balance Sheets. These amounts do not include any related discounts or deferred financing costs. The Company utilized Level 2 inputs, as defined in the fair value hierarchy, to measure the fair value of the long-term debt. Management's fair value estimates were based on quoted prices for recent trades of HDS's long-term debt, recent similar credit facilities initiated by companies with like credit quality in similar industries, quoted prices for similar instruments, and inquiries with certain investment communities. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jan. 28, 2018 | |
INCOME TAXES | |
INCOME TAXES | NOTE 7—INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Tax Act") was signed into law making significant changes to the Internal Revenue Code. The changes include, but are not limited to, a federal statutory rate reduction from 35% to 21%, the elimination of U.S. federal alternative minimum tax, the transition of U.S. international taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings. As a result of the Tax Act's effective date for the change in tax rate of January 1, 2018, the Company's federal statutory rate for fiscal 2017 was 33.9%. The Tax Act requires the Company, and other fiscal year taxpayers, to compute a blended statutory tax rate based on the ratio of the number of fiscal year days in calendar year 2017 at the 35% statutory rate versus the number of fiscal year days in calendar year 2018 at the new 21% statutory rate. The Company's deferred tax assets and liabilities are measured at the enacted tax rate expected to apply when these temporary items are expected to be realized or settled. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Act, the Company remeasured its U.S. deferred tax assets and liabilities and recognized a non-cash $72 million tax expense. The components of Income (Loss) from Continuing Operations before Provision (Benefit) for Income Taxes are as follows (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, United States $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Provision (Benefit) for Income Taxes consisted of the following (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Current: Federal $ $ ) $ ) State ) Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Deferred: Federal ) State ) ) Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's combined federal, state and foreign effective tax rate for continuing operations for fiscal 2017, fiscal 2016, and fiscal 2015 was approximately 53.6%, 43.6%, and not meaningful since income tax expense (benefit) was significantly impacted by the reversal of substantially all of the valuation allowance and the decrease in the Company's unrecognized tax positions, respectively. The Company's effective tax rate will vary based on a variety of factors, including overall profitability, the geographical mix of income before taxes and the related tax rates in the jurisdictions where it operates, restructuring and other one-time charges, as well as discrete events, such as settlements of future audits. The Company's fiscal 2017 effective rate was impacted by the Tax Act, excess tax benefits related to stock-based compensation, and by the geographical mix of where income was generated. The Company's fiscal 2016 effective rate was impacted by the repatriation of $72 million of cash from Canada to the U.S., which, to the extent of current earnings and profits, and foreign withholding taxes, resulted in $4 million of tax expense and was also impacted by the geographical mix of where income was generated. The Company's fiscal 2015 effective rate was impacted by reversing substantially all of the valuation allowance on its net U.S. deferred income taxes and a decrease in the Company's unrecognized tax position. The reconciliation of the provision (benefit) for income taxes from continuing operations at the federal statutory rate of 33.9% to the actual tax provision (benefit) for fiscal 2017, at the federal statutory rate of 35% to the actual tax provision (benefit) for both fiscal 2016 and fiscal 2015 is as follows (amounts in millions): Fiscal year Ended January 28, January 29, January 31, Income taxes at federal statutory rate $ $ $ State income taxes, net of federal income tax benefit Foreign rate differential ) ) ) Legal entity restructuring — Valuation allowance ) ) Adjustments to tax reserves ) ) Tax Cuts and Jobs Act of 2017 — — Excess tax benefits related to stock-based compensation(1) ) — — Other, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision (benefit) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The adoption of ASU 2016-09 in fiscal 2017 requires excess tax benefits from share-based awards activity to be reflected as a reduction of the provision for income taxes, whereas they were previously recognized in Stockholders' Equity. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of January 28, 2018 and January 29, 2017 were as follows (amounts in millions): January 28, January 29, Deferred Tax Assets: Accrued compensation $ $ Accrued self-insurance liabilities Other accrued liabilities Restructuring liabilities Net operating loss carryforward Fixed assets Allowance for doubtful accounts Inventory Tax credit carryforward Other Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent deferred tax assets Deferred Tax Liabilities: Prepaid expense $ ) $ ) Deferred financing costs ) ) Software costs ) ) Intangible assets ) ) Income from discharge of indebtedness ) ) ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets (liabilities), net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Tax Act includes a mandatory one-time tax on accumulated earnings of foreign subsidiaries, and as a result all previously unremitted earnings for which no U.S. deferred liability has been accrued is now subject to U.S. tax. As a result, the Company recorded a $1 million charge related to the one-time mandatory tax of previously deferred foreign earnings which is payable over an 8-year period. Beginning in fiscal 2017 and prior to the Tax Act, the Company anticipated that all of its Canadian earnings would be permanently reinvested until such time the Canadian borrowings under the Senior ABL Facility, which was initially drawn on during fiscal 2016, are paid off. On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. SAB 118 allows companies to record provisional amounts, during a measurement period, in situations where accounting for the Tax Act is incomplete. As a result of the Tax Act, the Company is still evaluating its indefinite reinvestment assertion with respect to its Canadian earnings and anticipates completing its analysis during fiscal 2018. In fiscal 2016, the Company repatriated $72 million of cash to the U.S., which, to the extent of current earnings and profits, and foreign withholding taxes resulted in $4 million of tax expense. In fiscal 2015, the Company repatriated $92 million of cash and property to the U.S., which, to the extent of current earnings and profits, resulted in $10 million income tax expense in the U.S. As of January 28, 2018 the Company had tax-effected U.S. federal net operating loss carryforwards of $166 million which expire beginning in fiscal 2033. The Company also had $85 million of tax effected state net operating loss carryforwards which expire in various years between fiscal 2018 and fiscal 2037. The Company also had $30 million of U.S. federal alternative minimum tax credits. As a result of the Tax Act, the federal alternative minimum tax credit is 50% refundable for any tax year beginning after 2017 and before 2021. It becomes 100% refundable for tax years beginning in 2021. The Company also had $4 million of U.S. federal research and development credits which expire between fiscal 2031 and fiscal 2037, and $5 million of tax-effected state tax credits which expire in various years between fiscal 2019 and fiscal 2028. At January 31, 2016, the Company's U.S. operations were in a position of cumulative consolidated pre-tax income for the most recent three-year period. Management concluded that as a consequence of the Company's three-year cumulative consolidated pre-tax income, generation of taxable income in fiscal 2014 and 2015, long net operating loss carryforward periods, a significant reduction in recent interest expense, a projected further reduction in future interest expense, and the business plan for fiscal 2016 and beyond showing continued profitability, that it is more likely than not that substantially all of the Company's U.S. deferred tax assets would be realized. Accordingly, in the fourth quarter of fiscal 2015, the Company reversed substantially all of its valuation allowance on its net U.S. deferred tax assets, resulting in a $1,007 million benefit in its provision for income taxes. The benefit from reversing the valuation allowance was partially offset by the utilization of $20 million of such deferred tax assets to offset current year income. In fiscal 2015, after the reversal of the valuation allowance, the Company's remaining valuation allowance on its U.S. deferred tax assets was approximately $6 million. In fiscal 2016, the Company reduced its valuation allowance related to its U.S. continuing operations by $1 million as it determined it is "more likely than not" certain deferred income tax assets would be realized. In fiscal 2017, the Company increased its valuation allowance related to its state continuing operations by $1 million as it determined it is "more likely than not" certain deferred income tax assets would not be realized. The future utilization of the Company's net operating loss carryforwards could be limited if the Company experiences an "ownership change," as defined in Section 382 of the Internal Revenue Code of 1986, as amended. In general, an ownership change may result from transactions increasing the aggregate direct or indirect ownership of certain persons (or groups of persons) in the Company's stock by more than 50 percentage points over a testing period (generally 3 years). Future direct or indirect changes in the ownership of the Company's common stock, including sales or acquisitions of the Company's common stock by stockholders and purchases and issuances of the Company's common stock by the Company, some of which are not in our control, could result in an ownership change. Any resulting limitation on the use of the Company's net operating loss carryforwards could result in the payment of taxes above the amounts currently anticipated and have a negative effect on the Company's future results of operations and financial position. Upon adoption of ASU 2016-09 at the beginning of fiscal 2017, the Company recorded a $56 million cumulative-effect adjustment to retained earnings in order to recognize a deferred tax asset on the excess deduction for stock option exercises over the expense recorded for book purposes. In fiscal 2017, the application of stock-based compensation guidance in ASU 2016-09 resulted in discrete tax benefits of $16 million from the exercise and vesting of stock based awards. For additional information on the adoption of ASU No. 2016-09, see "Note 1—Nature of Business and Summary of Significant Accounting Policies". Prior to ASU No. 2016-09, deferred tax assets relating to tax benefits of employee stock option grants were reduced to reflect exercises in fiscal 2016 and fiscal 2015. Some exercises resulted in tax deductions in excess of previously recorded benefits based on the option value at the time of grant ("windfalls"). Although these additional tax benefits, or windfalls, are reflected in the Company's net operating loss carryforwards, pursuant to ASC 718, the additional tax benefit associated with the windfall is not recognized until the deduction reduces taxes payable. Accordingly, since the tax benefit did not reduce the Company's current taxes payable in fiscal 2016 or fiscal 2015 due to net operating loss carryforwards, these windfall tax benefits are not reflected in the Company's net operating losses in deferred tax assets for fiscal 2016 or fiscal 2015. Windfalls included in net operating loss carryforwards but not reflected in deferred tax assets for fiscal 2016 and fiscal 2015 were $56 million and $48 million, respectively. For fiscal 2017, the Company recorded a $240 million net income tax expense related to discontinued operations mainly from the operations and sale of the Waterworks business. For fiscal 2016, the Company recorded an $87 million net income tax expense related to discontinued operations mainly from the operations of its Waterworks business. For fiscal 2015, the Company recorded a $159 million net income tax expense in discontinued operations of which $86 million related to the operations of the Waterworks business and $73 million related to the operations and sale of the Power Solutions business. Federal, state and foreign income taxes net current receivable total $8 million and $7 million as of fiscal 2017 and fiscal 2016, respectively. Accounting for uncertain tax positions The Company follows the GAAP guidance for uncertain tax positions within ASC 740, "Income Taxes." ASC 740 requires application of a "more likely than not" threshold to the recognition and de-recognition of tax positions. It further requires that a change in judgment related to prior years' tax positions be recognized in the quarter of such change. A reconciliation of the beginning and ending amount of unrecognized tax benefits for continuing operations for fiscal 2017, fiscal 2016, and fiscal 2015 is as follows (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Unrecognized Tax Benefits beginning of period $ $ $ Gross increases for tax positions in current period — Gross increases for tax positions in prior period — Gross decreases for tax positions in prior period — — ) Settlements — — ) Lapse of statutes — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized Tax Benefits end of period $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The resolution of the unrecognized tax benefits could affect the annual effective income tax rate. The Company did not change its accrual for net interest and penalties related to unrecognized tax benefits in fiscal 2017 or fiscal 2016. For fiscal 2015, the Company decreased its accrual for net interest and penalties related to unrecognized tax benefits by $29 million. The Company's ending net accrual for interest and penalties related to unrecognized tax benefits at fiscal 2017, fiscal 2016, and fiscal 2015, was zero for each of the three periods respectively. The Company's accounting policy is to classify interest and penalties as components of income tax expense. Accrued interest and penalties from unrecognized tax benefits are included as a component of other liabilities on the Consolidated Balance Sheet. The Company is subject to audits and examinations of its tax returns by tax authorities in various jurisdictions, including the Internal Revenue Service ("IRS"). Management regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of provisions for income taxes. Certain of the Company's tax years from 2007 and forward remain open for audit by the IRS and various state governments. The decrease in the Company's fiscal 2015 unrecognized U.S. federal and state tax benefits including gross interest accrual was driven by an income tax benefit of approximately $189 million from the settlement of an IRS audit. |
STOCK-BASED COMPENSATION AND EM
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Jan. 28, 2018 | |
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | |
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | NOTE 8—STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS Stock-Based Compensation Plans The HD Supply Holdings, Inc. Omnibus Incentive Plan, approved by Holdings' stockholders on May 17, 2017, (the "Plan") provides for stock-based awards to employees, consultants and directors, including stock options, stock purchase rights, restricted stock, restricted stock units, deferred stock units, performance shares, performance units, stock appreciation rights, dividend equivalents and other stock-based awards. The Plan is an amendment and restatement of the HD Supply Holdings, Inc. 2013 Omnibus Incentive Plan, which replaced and succeeded the HDS Investment Holding, Inc. Stock Incentive Plan (the "Stock Incentive Plan"), and, from and after June 26, 2013, no further awards may be made under the Stock Incentive Plan. As of January 28, 2018, approximately 15.3 million shares (6.9 million of which were registered) were available for issuance under the Plan. The ratio at which awards are counted against the Plan's authorized share pool is 2.30 to 1 for full value awards and 1 to 1 for option awards, and any shares returned to the pool are returned at the same ratio. The HD Supply Holdings, Inc. Employee Stock Purchase Plan (the "ESPP") permits HD Supply's eligible associates to purchase Holdings common stock at a 5% discount on the closing stock price at the end of each offering period. There are two six-month offering periods during a calendar year beginning each January and July. During fiscal 2017, fiscal 2016, and fiscal 2015, eligible associates purchased approximately 105,000 shares, 96,000 shares, and 117,000 shares, respectively, under the ESPP. As of January 28, 2018, approximately 1.6 million registered shares were available for issuance under the ESPP. Stock Options Under the terms of the Plan and the Stock Incentive Plan (collectively, the "HDS Plans"), non-qualified stock options are to carry exercise prices at, or above, the fair market value of Holdings' stock on the date of the grant. The non-qualified stock options under the HDS Plans generally vest at the rate of 25% per year commencing on the first anniversary date of the grant or 100% on the third anniversary of the grant and expire on the tenth anniversary date of the grant. A summary of option activity under the HDS Plans is presented below (shares in thousands): Number of Weighted Average Outstanding at February 1, 2015 $ Granted — — Exercised ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 29, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 28, 2018 $ ​ ​ ​ ​ ​ ​ ​ ​ The total intrinsic value of options exercised was approximately $51 million, $33 million, and $110 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. As of January 28, 2018, there were approximately 2.4 million stock options outstanding with a weighted-average remaining life of 7.0 years and an aggregate intrinsic value of approximately $29 million. As of January 28, 2018, there were approximately 0.9 million options exercisable with a weighted-average exercise price of $17.99, a weighted-average remaining life of 4.6 years and an aggregate intrinsic value of approximately $20 million. As of January 28, 2018, there were approximately 2.1 million options vested or expected to ultimately vest with a weighted-average exercise price of $27.57, a weighted-average remaining life of 6.8 years and an aggregate intrinsic value of approximately $27 million. The estimated fair value of the options when granted is amortized to expense over the options' vesting or required service period. The fair value for these options was estimated by management, after considering a third-party valuation specialist's assessment, at the date of grant based on the expected life of the option and historical exercise experience, using a Black-Scholes option pricing model with the following weighted-average assumptions: Fiscal Year Ended January 28, January 29, January 31, Risk-free interest rate % % — Dividend yield % % — Expected volatility factor % % — Expected option life in years — The risk free interest rate was determined based on an analysis of U.S. Treasury zero-coupon market yields as of the date of the option grant for issues having expiration lives similar to the expected option life. The expected volatility was based on an analysis of the historical volatility of Holdings and HD Supply's competitors over the expected life of the HD Supply options. These competitors' volatilities were adjusted to reflect the leverage of HD Supply. As insufficient data exists to determine the historical life of options issued under the HDS Plans, the expected option life was determined based on the vesting schedule of the options and their contractual life taking into consideration the expected time in which the share price of Holdings would exceed the exercise price of the option. No options were granted during fiscal 2015. The weighted-average fair value of each option granted during fiscal 2017 was $14.30. HD Supply recognized $5 million, $5 million, and $5 million of stock-based compensation expense related to stock options during fiscal 2017, fiscal 2016, and fiscal 2015, respectively. As of January 28, 2018 the unamortized compensation expense related to stock options was $14 million, which is expected to be recognized over a weighted-average period of 2.6 years. Restricted Stock and Restricted Stock Units Restricted stock awards ("RSAs") and restricted stock unit awards ("RSUs") granted under the Plan are settled by issuing shares of common stock at the vesting date. Generally, the RSAs and RSUs granted to employees vest on a pro rata basis on each of the first four or five anniversaries of the grant, except in the case of death or disability, in which case the RSAs and RSUs vest as of the date of the event. Generally, the RSAs granted to members of the Company's Board of Directors vest on the earliest of the one-year anniversary of the grant date, the next annual meeting after the grant date, or a change in control. The grant date fair value of the RSAs and RSUs is expensed over the vesting period. The shares represented by restricted stock awards are considered outstanding at the grant date, as the recipients are entitled to dividends and voting rights, which are subject to the same restrictions (including the risk of forfeiture) as the restricted stock awards. A summary of RSA and RSU activity under the HDS Plans is presented below (shares in thousands): Number of Weighted Average Non-vested at February 1, 2015 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Non-vested at January 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Non-vested at January 29, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Non-vested at January 28, 2018 $ ​ ​ ​ ​ ​ ​ ​ ​ The total fair value of RSAs and RSUs vested during the year was $18 million, $16 million, and $13 million for fiscal 2017, fiscal 2016, and fiscal 2015, respectively. HD Supply recognized $20 million, $15 million, and $11 million of stock-based compensation expense related to RSAs and RSUs during fiscal 2017, fiscal 2016, and fiscal 2015, respectively. As of January 28, 2018 the unamortized compensation expense related to RSAs and RSUs was $19 million, which is expected to be recognized over a weighted-average period of 1.5 years. Employee Benefit Plans HD Supply offers a comprehensive Health & Welfare Benefits Program which allows employees who satisfy certain eligibility requirements to choose among different levels and types of coverage. The Health & Welfare Benefits program provides employees healthcare coverage in which the employer and employee share costs. In addition, the program offers employees the opportunity to participate in various voluntary coverages, including flexible spending accounts. HD Supply maintains a 401(k) defined contribution plan that is qualified under Sections 401(a) and 501(a) of the Internal Revenue Code. Employees who satisfy the plan's eligibility requirements may elect to contribute a portion of their compensation to the plan on a pre-tax basis. HD Supply may match a percentage of the employees' contributions to the plan. A portion of the matching contributions are generally made shortly after the end of each pay period with the remaining portion made after the Company's fiscal year-end if an additional annual matching contribution based on the Company's fiscal-year financial results is approved. HD Supply paid matching contributions of $17 million, $17 million, and $19 million during fiscal 2017, fiscal 2016, and fiscal 2015, respectively. |
BASIC AND DILUTED WEIGHTED-AVER
BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES | 12 Months Ended |
Jan. 28, 2018 | |
BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES | |
BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES | NOTE 9—BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted-average common shares outstanding during the respective periods. Diluted earnings (loss) per common share is computed by dividing net income (loss) by the sum of the weighted-average common shares outstanding and all dilutive potential common shares outstanding during the respective periods. Diluted earnings (loss) per common share equals basic earnings (loss) per common share for certain periods, as the effect of stock options, restricted stock, and restricted stock units (collectively "stock plan securities") are anti-dilutive because the Company incurred losses from continuing operations in those periods. The following basic and diluted weighted-average common shares information is provided for Holdings. The reconciliation of basic to diluted weighted-average common shares for fiscal 2017, fiscal 2016, and fiscal 2015 is as follows (in thousands): Fiscal Year Ended January 28, January 29, January 31, Weighted-average common shares outstanding Effect of potentially dilutive stock plan securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted weighted-average common shares outstanding Stock plan securities excluded from dilution(1) (1) Represents securities not included in the computation of diluted earnings per share because their effect would have been anti-dilutive. |
SUPPLEMENTAL BALANCE SHEET AND
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | 12 Months Ended |
Jan. 28, 2018 | |
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | |
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | NOTE 10—SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION Receivables Receivables as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): January 28, January 29, Trade receivables, net of allowance for doubtful accounts $ $ Vendor rebate receivables Other receivables ​ ​ ​ ​ ​ ​ ​ ​ Total receivables, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and Equipment Property and equipment as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): January 28, January 29, Land $ $ Buildings and improvements Transportation equipment Furniture, fixtures and equipment Capitalized software Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment Less accumulated depreciation & amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Build-to-Suit Lease On February 4, 2016, the Company entered into a build-to-suit arrangement for a leadership development and headquarters facility in Atlanta, Georgia, which began construction in 2016. The lease commenced in February 2018. The Company has an option to purchase the facility which expires on April 30, 2018. In accordance with ASC 840, "Leases," for build-to-suit arrangements where the Company is involved in the construction of structural improvements prior to the commencement of the lease or takes some level of construction risk, the Company is considered the owner of the assets and land during the construction period. Accordingly, during construction activities, the Company recorded a Construction in progress asset within Property and equipment and a corresponding financing liability on the Consolidated Balance Sheet for contributions by the landlord toward construction. Once the construction is completed, if the lease meets certain "sales-leaseback" criteria, the Company will remove the asset and related financial obligation from the Consolidated Balance Sheet and treat the building lease as an operating lease. If upon completion of construction, the lease does not meet the "sales-leaseback" criteria, the leased property will be treated as a capital lease and included in Property and equipment on the Consolidated Balance Sheet. As of January 28, 2018, the Consolidated Balance Sheet includes $86 million of build-to-suit assets in Construction in progress, and the corresponding financial obligation of $86 million in Other long-term liabilities in the Consolidated Balance Sheet. Other Current Liabilities Other current liabilities as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): January 28, January 29, Accrued interest $ $ Accrued non-income taxes Other ​ ​ ​ ​ ​ ​ ​ ​ Total other current liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental Cash Flow Information Cash paid for interest in fiscal 2017, fiscal 2016, and fiscal 2015 was approximately $159 million, $296 million, and $397 million, respectively. During fiscal 2017, the Company paid $6 million of original issue discounts related to the $100 million payment on the Term B-1 Loans and the Fifth Amendment to the Term Loan Facility. During fiscal 2016, the Company paid $7 million of original issue discounts related to the portion of the $200 million payment on Term Loans B-1 considered an extinguishment under ASC 470-50, "Debt—Modifications and Extinguishments." During fiscal 2015, the Company paid $12 million of original issue discounts related to the portion of the Incremental Agreement considered an extinguishment under ASC 470-50. Cash paid for income taxes, net of refunds, in fiscal 2017, fiscal 2016, and fiscal 2015 was approximately $29 million, $13 million, and $16 million, respectively. Cash paid for income taxes in fiscal 2017 includes $13 million in taxes paid related to the sale of the Waterworks business. During fiscal 2017, HDS executed an equity cash distribution of $541 million to Holdings, via HDS's direct parent, HDS Holding Corporation. The equity distribution from HDS and return of capital recognized by Holdings were eliminated in consolidation of Holdings and its wholly-owned subsidiaries, including HDS. On June 3, 2017, Holdings' Board of Directors authorized the Company to enter into a share repurchase program for the repurchase of up to an aggregate amount of $500 million of Holdings' common stock. As of January 28, 2018, under this plan, Holdings has completed the repurchase of all $500 million of common stock authorized, purchasing 15,940,337 shares of its common stock. On August 25, 2017, Holdings' Board of Directors authorized the Company to enter into a new share repurchase program for the repurchase of up to an aggregate amount of $500 million of Holdings' common stock. As of January 28, 2018, under this plan, Holdings has repurchased 1,150,699 shares of its common stock for approximately $41 million. In combination with the 2014 authorized share repurchase plan (utilizing proceeds from employee option exercises), Holdings repurchased a total of 18,236,626 shares of its common stock during fiscal 2017 for approximately $584 million. |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 12 Months Ended |
Jan. 28, 2018 | |
RESTRUCTURING ACTIVITIES | |
RESTRUCTURING ACTIVITIES | NOTE 11—RESTRUCTURING ACTIVITIES Fiscal 2017 Plan As a result of the sale of the Waterworks business in August 2017, management evaluated the Company's talent alignment and functional support strategies. During fiscal 2017, management initiated a restructuring plan that included reducing workforce personnel, realigning talent, and closing a C&I branch, resulting in the recognition of $6 million of restructuring charges, primarily related to severance and other employee-related costs. In addition to actions already taken, management expects to further realign talent and relocate the Company's headquarters in early 2018. Management expects to incur a total of $10 million to $15 million under this plan, and expects a payback of the employee-related costs via a reduction in personnel costs over the next one to two years. The expected charges include approximately $6 million related to property lease obligations upon exiting the Company's current headquarters location. The Company will actively pursue buyout options or subleasing opportunities for the leased property prior to its lease expiration in October 2020. Payments for the charges incurred in fiscal 2017 are expected to be substantially complete in the next twelve months. As of January 28, 2018, the Company's liability balance for these restructuring activities was $4 million and is included in Other current liabilities in the Consolidated Balance Sheets. The following table presents the activity for the liability balance (amounts in millions): Severance Relocation & Total Balance—January 29, 2017 $ — $ — $ — Charges Cash payments ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance—January 28, 2018 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2015 Plan As a result of the sale of the Power Solutions business unit in October 2015, management evaluated the Company's talent alignment and functional support strategies. Consequently, during fiscal 2015, the Company initiated a restructuring plan to strategically align its leadership and functional support teams. During fiscal 2016 and fiscal 2015, the Company incurred $7 million and $8 million, respectively, of restructuring charges under this plan. The Company completed the activities under the plan in fiscal 2016 and does not expect to incur additional charges. Payments for these charges were substantially complete as of January 28, 2018. As of January 28, 2018 and January 29, 2017, the Company's liability balance for these restructuring activities were $1 million and $4 million, respectively and is included in Other current liabilities in the Consolidated Balance Sheet. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jan. 28, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12—COMMITMENTS AND CONTINGENCIES Lease Commitments HD Supply occupies certain facilities and operates certain equipment and vehicles under leases that expire at various dates through the year 2037. In addition to minimum rentals, there are certain executory costs such as real estate taxes, insurance, and common area maintenance on most of its facility leases. Expense under these leases totaled $127 million, $118 million, and $107 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Future minimum aggregate rental payments under non-cancelable leases as of January 28, 2018 are as follows (amounts in millions): Fiscal Year 2018 2019 2020 2021 2022 Thereafter Total Operating Leases $ $ Build-to-Suit Lease(i) $ $ (i) Represents the future lease payments for the leadership development and headquarters facility currently under construction in Atlanta, Georgia. See "Note 10, Supplemental Balance Sheet and Cash Flow Information" for further information. The Company subleases certain leased facilities to third parties. In addition, the Company leases certain owned facilities to third parties. Total future minimum rentals to be received under non-cancelable subleases and leases as of January 28, 2018 are approximately $30 million. These subleases and leases expire at various dates through the year 2026. Purchase Obligations As of January 28, 2018, the Company has agreements in place with various vendors to purchase goods and services, primarily inventory, in the aggregate amount of $286 million. These purchase obligations are generally cancelable, but the Company has no intent to cancel. Payment of $281 million is due during fiscal 2018 for these obligations. The Company has IT service contracts that extend through fiscal 2022. Legal Matters On July 10, 2017 and August 8, 2017, shareholders filed putative class action complaints in the U.S. District Court for the Northern District of Georgia, alleging that HD Supply and certain senior members of its management (collectively, the "defendants") made certain false or misleading public statements in violation of the federal securities laws between November 9, 2016 and June 5, 2017, inclusive (the "original securities complaints"). Subsequently, the two securities cases were consolidated, and, on November 16, 2017, the lead plaintiffs appointed by the Court filed a Consolidated Amended Class Action Complaint (the "Amended Complaint") against the defendants on behalf of all persons other than defendants who purchased or otherwise acquired the Company's common stock between November 9, 2016 and June 5, 2017, inclusive. The Amended Complaint alleges that defendants made certain false or misleading public statements, primarily relating to the Company's progress in addressing certain supply chain disruption issues encountered in the Company's Facilities Maintenance business unit. The Amended Complaint asserts claims against the defendants under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, and seeks class certification under the Federal Rules of Civil Procedure, as well as unspecified monetary damages, pre-judgment and post-judgment interest, and attorneys' fees and other costs. Defendants moved to dismiss the Consolidated Amended Complaint in December 2017. That motion is pending. On August 8, 2017, two shareholder derivative complaints were filed naming the Company as a "nominal defendant" and certain members of its senior management and board of directors (collectively, the "individual defendants") as defendants. The complaints generally allege that the individual defendants caused the Company to issue false and misleading statements concerning the Company's business, operations, and financial prospects, including misrepresentations regarding operating leverage and supply chain corrective actions. The complaints assert claims against the individual defendants under Section 14(a) of the Securities Exchange Act of 1934, and allege breaches of fiduciary duties, unjust enrichment, corporate waste, and insider selling. The complaints assert a claim to recover any damages sustained by the Company as a result of the individual defendants' allegedly wrongful actions, seek certain actions by the Company to modify its corporate governance and internal procedures, and seek to recover attorneys' fees and other costs. In October 2017, the Court consolidated the two derivative actions and granted the parties' joint scheduling order request. On December 5, 2017, the Court entered an order staying all activity in the case until a ruling is issued on the motion to dismiss filed in the consolidated securities litigation described above. The Company intends to defend these lawsuits vigorously. Given the stage of the complaints and the claims and issues presented in the above matters, the Company cannot reasonably estimate at this time the possible loss or range of loss, if any, that may arise from these unresolved lawsuits. HD Supply is involved in various legal proceedings arising in the normal course of its business. The Company establishes reserves for litigation and similar matters when those matters present loss contingencies that it determines to be both probable and reasonably estimable in accordance with ASC 450, "Contingencies." In the opinion of management, based on current knowledge, all reasonably estimable and probable matters are believed to be adequately reserved for or covered by insurance and are not expected to have a material adverse effect on the Company's consolidated financial condition, results of operations or cash flows. For all other matters management believes the possibility of losses from such matters is not probable, the potential loss from such matters is not reasonably estimable, or such matters are of such kind or involve such amounts that would not have a material adverse effect on the financial position, results of operations or cash flows of the Company if disposed of unfavorably. For material matters that are reasonably possible and reasonably estimable, including matters that are probable and estimable but for which the amount that is reasonably possible is in excess of the amount that the Company has accrued for, management has estimated the aggregate range of potential loss as $0 to $10 million. If a material loss is probable or reasonably possible, and in either case estimable, the Company has considered it in the analysis and it is included in the discussion set forth above. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jan. 28, 2018 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 13—SEGMENT INFORMATION HD Supply's operating segments are based on management structure and internal reporting. Each segment offers different products and services to the end customer, except for Corporate, which provides general corporate overhead support. The Company determines the reportable segments in accordance with the principles of segment reporting within ASC 280, "Segment Reporting." For purposes of evaluation under these segment reporting principles, the Chief Operating Decision Maker for HD Supply assesses HD Supply's ongoing performance, based on the periodic review and evaluation of Net sales, Adjusted EBITDA, and certain other measures for each of the operating segments. HD Supply has two reportable segments, each of which is presented below: · Facilities Maintenance —Facilities Maintenance distributes maintenance, repair and operations ("MRO") products, provides value-add services and fabricates custom products to multifamily, hospitality, healthcare and institutional facilities. · Construction & Industrial —Construction & Industrial distributes specialized hardware, tools, engineered materials and safety products to non-residential and residential contractors. Construction & Industrial also offers light remodeling and construction supplies, kitchen and bath cabinets, windows, plumbing materials, electrical equipment and other products, primarily to small remodeling contractors and trade professionals. In addition to the reportable segments, the Company's consolidated financial results include "Corporate and Eliminations." Corporate incurs costs related to the Company's centralized support functions, which are comprised of finance, information technology, human resources, legal, supply chain and other support services, and removes inter-segment transactions. As a result of the sale of the Waterworks business, the Company began sharing resources between centralized support functions and the reportable segments. As a result, and to provide better comparability to the Company's industry peers, beginning in fiscal 2017, all Corporate overhead costs are allocated to the reportable segments. Prior periods presented were revised to reflect the allocation of all the Corporate overhead costs. Interest expense, interest income, other non-operating income and expenses, and provision for income taxes are not allocated to the Company's reportable segments. The Company does not allocate Corporate assets to its reportable segments. Eliminations include the adjustments necessary to eliminate intercompany transactions. See "Note 2—Discontinued Operations" for further information on the sale of the Waterworks business, a previous HD Supply reportable segment. The following tables present Net sales, Adjusted EBITDA, and certain other measures for each of the reportable segments and total continuing operations for the periods indicated (amounts in millions): Fiscal Year 2017 Facilities Construction & Corporate & Total Net sales $ $ $ ) $ Adjusted EBITDA — Depreciation(1) & Software Amortization — Other Intangible Amortization — Total Assets(2) Capital Expenditures(2) Fiscal Year 2016 Facilities Construction & Corporate & Total Net sales $ $ $ ) $ Adjusted EBITDA — Depreciation(1) & Software Amortization — Other Intangible Amortization — Total Assets(2) Capital Expenditures(2) Fiscal Year 2015 Facilities Construction & Corporate & Total Net sales $ $ $ ) $ Adjusted EBITDA — Depreciation(1) & Software Amortization — Other Intangible Amortization — Total Assets(2) Capital Expenditures(2) (1) Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. (2) Total Assets and capital expenditures include amounts attributable to discontinued operations for the periods prior to the dispositions. Reconciliation to Consolidated Financial Statements Fiscal 2017 Fiscal 2016 Fiscal 2015 Total Adjusted EBITDA $ $ $ Depreciation and amortization Stock-based compensation Restructuring Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income Interest expense Interest income ) — — Loss on extinguishment & modification of debt Other (income) expense, net — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from Continuing Operations Before Provision (Benefit) for Income Taxes Provision (benefit) for income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net sales for HD Supply outside the United States, primarily Canada, were $146 million, $124 million, and $124 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Long-lived assets of HD Supply outside the United States, primarily Canada, were $6 million and $5 million as of January 28, 2018 and January 29, 2017, respectively. |
GUARANTOR SUBSIDIARIES
GUARANTOR SUBSIDIARIES | 12 Months Ended |
Jan. 28, 2018 | |
GUARANTOR SUBSIDIARIES | |
GUARANTOR SUBSIDIARIES | NOTE 14—GUARANTOR SUBSIDIARIES As of January 28, 2018, HDS (the "Debt Issuer") had outstanding April 2016 Senior Unsecured Notes guaranteed by certain of its subsidiaries (the "Subsidiary Guarantors"). The Subsidiary Guarantors are direct or indirect wholly-owned domestic subsidiaries of HDS. The subsidiaries of HDS that do not guarantee the April 2016 Senior Unsecured Notes ("Non-guarantor Subsidiaries") are direct or indirect wholly-owned subsidiaries of HDS and primarily include HDS's operations in Canada. The Debt Issuer's payment obligations under the April 2016 Senior Unsecured Notes are jointly and severally guaranteed by the guarantors and all guarantees are full and unconditional. These guarantees are subject to release under the circumstances as described below: (i) concurrently with any direct or indirect sale or disposition (by merger or otherwise) of any Subsidiary Guarantor or any interest therein in accordance with the terms of the applicable indebtedness by HDS or a restricted subsidiary, following which such Subsidiary Guarantor is no longer a restricted subsidiary of HDS; (ii) at any time that such Subsidiary Guarantor is released from all of its obligations under all of its guarantees of payment of any indebtedness of HDS or any Subsidiary Guarantor under all other indebtedness and is not a borrower under the Senior ABL Facility; (iii) upon the merger or consolidation of any Subsidiary Guarantor with and into HDS or another Subsidiary Guarantor that is the surviving entity in such merger or consolidation, or upon the liquidation of such Subsidiary Guarantor following the transfer of all of its assets to HDS or another Subsidiary Guarantor; (iv) concurrently with any Subsidiary Guarantor becoming an unrestricted subsidiary; (v) during the period when the rating on the notes is changed to investment grade and certain covenants cease to apply while such investment grade rating is maintained, upon the merger or consolidation of any Subsidiary Guarantor with and into another subsidiary that is not a Subsidiary Guarantor with such other subsidiary being the surviving entity in such merger or consolidation, or upon liquidation of such Subsidiary Guarantor following the transfer of all of its assets to a subsidiary that is not a Subsidiary Guarantor; (vi) upon legal or covenant defeasance of HDS's obligations under the applicable indebtedness, or satisfaction and discharge of the indenture governing the applicable indebtedness; or (vii) subject to customary contingent reinstatement provisions, upon payment in full of the aggregate principal amount of all applicable indebtedness then outstanding and all other obligations guaranteed by a Subsidiary Guarantor then due and owing. In addition, HDS has the right, upon 30 days' notice to the applicable trustee, to cause any Subsidiary Guarantor that has not guaranteed payment of any indebtedness of HDS or any Subsidiary Guarantor under all other indebtedness and is not a borrower under the Senior ABL Facility to be unconditionally released from all obligations under its Subsidiary Guarantee, and such Subsidiary Guarantee shall thereupon terminate and be discharged and of no further force or effect. In connection with the issuance of the April 2016 Senior Unsecured Notes, HDS determined the need for compliance with Rule 3-10 of SEC Regulation S-X. In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, HDS has included the accompanying Condensed Consolidating Financial Statements in accordance with Rule 3-10(f) of SEC Regulation S-X. The following supplemental financial information sets forth, on a consolidating basis under the equity method of accounting, the condensed statements of operations and comprehensive income (loss), the condensed balance sheets, and the condensed statements of cash flows for the parent company issuer of the April 2016 Senior Unsecured Notes, HDS, for the Subsidiary Guarantors and for the Non-guarantor Subsidiaries and total consolidated HDS and subsidiaries. Holdings Under the terms of the agreements governing the April 2016 Senior Unsecured Notes issued by HDS, the Term Loan Facility entered into by HDS, and the Senior ABL Facility entered into by HDS and certain of its subsidiaries, HDS and substantially all of its existing and future 100%-owned U.S. subsidiaries are significantly restricted from making dividend payments, loans or advances to Holdings. These restrictions result in substantially all of the net assets of Holdings' 100%-owned U.S. subsidiaries being restricted (as defined in Rule 4-08(e)(3) of Regulation S-X). In lieu of Schedule I, the condensed statements of operations and comprehensive income (loss), the condensed balance sheets, and the condensed statements of cash flows of Holdings are included in the tables below. The condensed parent company financial information of Holdings has been provided in accordance with the rules and regulations of the SEC and should be read in conjunction with the Consolidated Financial Statements of Holdings and its subsidiaries. Pursuant to the SEC rules and regulations, the condensed parent company financial information does not include all of the financial information and notes normally included with financial statements prepared in accordance with GAAP. The condensed parent company financial information has been prepared using the same accounting policies as described in Note 1 of Notes to Consolidated Financial Statements of Holdings and subsidiaries included herein, except for the investment in subsidiary. For the purposes of this schedule, Holdings' investment in HDS, its indirect wholly-owned subsidiary, is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. Holdings' share of net income of its unconsolidated subsidiaries is included in consolidated income using the equity method. Holdings received distributions of $541 million from HDS during fiscal 2017. Holdings did not receive any dividends or distributions from subsidiaries during fiscal 2016 or fiscal 2015. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Amounts in millions Fiscal Year 2017 Debt Subsidiary Non- Elim- Total Holdings Net Sales $ — $ $ $ ) $ $ — Cost of sales — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit — — — Operating expenses: Selling, general and administrative — — Depreciation and amortization — — Restructuring — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — — Operating Income (Loss) ) — — Interest expense ) — Interest (income) ) ) — ) — Net (earnings) loss of equity affiliates ) — — — ) Loss on extinguishment & modification of debt — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) Provision (benefit) for income taxes ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations ) Income from discontinued operations, net of tax — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income (Loss) $ $ $ $ ) $ $ Other comprehensive income—foreign currency translation adjustment ) — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Comprehensive Income (Loss) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2016 Debt Subsidiary Non- Elim- Total Holdings Net Sales $ — $ $ $ ) $ $ — Cost of sales — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit — ) — Operating expenses: Selling, general and administrative ) — Depreciation and amortization — Restructuring charge — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ) — Operating Income (Loss) ) — — Interest expense ) — Interest (income) ) ) — — — Net (earnings) loss of equity affiliates ) — — — ) Loss on extinguishment & modification of debt — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) ) Provision (benefit) for income taxes ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations ) Income (loss) from discontinued operations, net of tax — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income (Loss) $ $ $ $ ) $ $ Other comprehensive income—foreign currency translation adjustment — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Comprehensive Income (Loss) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2015 Debt Subsidiary Non- Elim- Total Holdings Net Sales $ — $ $ $ ) $ $ — Cost of sales — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit — ) — Operating expenses: Selling, general and administrative ) — Depreciation and amortization — — Restructuring — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ) — Operating Income (Loss) ) — — Interest expense ) — Interest (income) ) ) — — — Net (earnings) loss of equity affiliates ) — — — ) Loss on extinguishment & modification of debt — — — — Other (income) expense, net — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) ) Provision (benefit) for income taxes ) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations ) Income (loss) from discontinued operations, net of tax — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income (Loss) $ $ $ $ ) $ $ Other comprehensive income—foreign currency translation adjustment — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Comprehensive Income (Loss) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING BALANCE SHEETS Amounts in millions As of January 28, 2018 Debt Subsidiary Non- Eliminations Total HDS Holdings ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ $ — Receivables, net — — Inventories — — — Intercompany receivables — — ) — — Other current assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net — — Goodwill — — — — Intangible assets, net — — — Deferred tax asset — ) — Investment in subsidiaries — — ) — Intercompany notes receivable — ) — — Other assets — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ $ — Accrued compensation and benefits — — Current installments of long-term debt — — — — Intercompany payables — — ) — — Other current liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, excluding current installments — — — Deferred tax liabilities — — ) — — Intercompany notes payable — ) — — Other liabilities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity (deficit) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity (deficit) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions As of January 29, 2017 Debt Issuer Subsidiary Non- Eliminations Total Holdings ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ $ Receivables, net — — Inventories — — — Intercompany receivables — — ) — — Current assets of discontinued operations — — — — Other current assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net — — Goodwill — — — — Intangible assets, net — — — Deferred tax asset — ) — Non-current assets of discontinued operations — — — — Investment in subsidiaries — — ) — Intercompany notes receivable — ) — — Other assets — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ $ — Accrued compensation and benefits — — Current installments of long-term debt — — — — Intercompany payables — — ) — — Current liabilities of discontinued operations — — — Other current liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, excluding current installments — — — Deferred tax liabilities — — ) — — Non-current liabilities of discontinued operations — — — — Intercompany notes payable — ) — — Other liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity (deficit) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity (deficit) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Amounts in millions Fiscal Year 2017 Debt Subsidiary Non- Elim- Total Holdings Net cash flows from operating activities $ $ $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities Capital expenditures ) ) — — ) — Proceeds from sale of property and equipment — — — — Proceeds from sale of businesses, net — — — — Proceeds from (payments of) intercompany notes — ) — — — Other investing activities — ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from investing activities $ $ ) $ ) $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities Proceeds from stock options exercised — — — — — Purchase of treasury shares — — — — — ) Equity contribution (return of capital) ) — — — ) Borrowings from (repayments to) intercompany notes — — ) — — Borrowings of long-term debt — — — — Repayments of long-term debt ) — — — ) — Borrowings on long-term revolver — — — Repayments on long-term revolver ) — ) — ) — Debt issuance and modification fees ) — — — ) — Other financing activities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from financing activities ) — ) ) ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rates on cash — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash & cash equivalents $ $ ) $ ) $ — $ $ ) Cash and cash equivalents at beginning of period — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ $ $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2016 Debt Subsidiary Non- Elim- Total Holdings Net cash flows from operating activities $ $ ) $ $ — $ $ — Cash flows from investing activities Capital expenditures ) ) ) — ) — Proceeds from sale of property and equipment — — — — Proceeds from sale of a business, net — — — — (Investments in) return of capital in equity affiliates — — ) — — Proceeds from (payments of) intercompany notes — — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from investing activities $ $ $ ) $ ) $ ) $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities Proceeds from stock options exercised — — — — — Purchase of treasury shares — — — — — ) Equity contribution (return of capital) — — ) — — Borrowings (repayments) of intercompany notes ) — — — — Borrowings of long-term debt — — — — Repayments of long-term debt ) — — — ) — Borrowings on long-term revolver — — — Repayments of long-term revolver ) — — — ) — Debt issuance and modification fees ) — — — ) — Other financing activities ) ) — — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from financing activities ) ) ) ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rates on cash — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash & cash equivalents $ ) $ ) $ ) $ — $ ) $ ) Cash and cash equivalents at beginning of period — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ $ $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2015 Debt Subsidiary Non- Elim- Total Holdings Net cash flows from operating activities $ $ $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities Capital expenditures ) ) ) — ) — Proceeds from sale of property and equipment — — — — Proceeds from sale of a business, net — — — — (Investments in) return of capital of equity affiliates — — ) — — Proceeds from (payments of) intercompany notes — ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from investing activities $ $ ) $ ) $ ) $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities Proceeds from stock options exercised — — — — — Purchase of treasury shares — — — — — ) Equity contribution (return of capital) — ) ) — — Borrowings (repayments) of intercompany notes — — ) — — Borrowings of long-term debt — — — — Repayments of long-term debt ) — — — ) — Borrowings on long-term revolver — — — — Repayments of long-term revolver ) — — — ) — Debt issuance and modification fees ) — — — ) — Other financing activities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from financing activities $ ) $ ) $ ) $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rates on cash — — ) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash & cash equivalents $ $ ) $ ) $ — $ $ Cash and cash equivalents at beginning of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ $ $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Jan. 28, 2018 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | NOTE 15—QUARTERLY FINANCIAL DATA (UNAUDITED) The following is a summary of the quarterly consolidated results of operations for the fiscal years ended January 28, 2018 and January 29, 2017 (amounts in millions): First Second Third Fourth TOTAL Fiscal Year 2017 Net sales $ $ $ $ $ Gross profit Income (loss) from continuing operations ) Income from discontinued operations Net income (loss) ) Basic earnings per share(1) Income (loss) from continuing operations $ $ $ $ ) $ Income from discontinued operations Net income (loss) ) Diluted earnings per share(1) Income (loss) from continuing operations $ $ $ $ ) $ Income from discontinued operations Net income (loss) ) Fiscal Year 2016 Net sales $ $ $ $ $ Gross profit Income (loss) from continuing operations ) Income (loss) from discontinued operations Net income (loss) ) Basic earnings (loss) per share(1) Income (loss) from continuing operations $ ) $ $ $ $ Income (loss) from discontinued operations Net income (loss) ) Diluted earnings (loss) per share(1) Income (loss) from continuing operations $ ) $ $ $ $ Income (loss) from discontinued operations Net income (loss) ) (1) Basic and Diluted earnings (loss) per share are based on shares outstanding for Holdings. Quarterly earnings per share amounts may not foot due to rounding. In addition, quarterly earnings per share amounts may not add to full-year earnings per share amounts due to the difference in weighted-average common shares for the quarters versus the weighted-average common shares for the year. Income (loss) from continuing operations and Net income (loss) in the first quarter of fiscal 2017 includes a loss on extinguishment of debt of $3 million. Income (loss) from continuing operations and Net income (loss) in the second quarter of fiscal 2017 includes a loss on extinguishment of debt of $49 million. Income (loss) from continuing operations and Net income (loss) in the third quarter of fiscal 2017 includes a loss on extinguishment and modification of debt of $78 million and $1 million in interest income. Income (loss) from continuing operations and Net income (loss) in the fourth quarter of fiscal 2017 includes a loss on extinguishment and modification of debt of $3 million and interest income of $1 million. Income (loss) from continuing operations and Net income (loss) in the first quarter of fiscal 2016 includes a loss on extinguishment of debt of $115 million. Income (loss) from continuing operations and Net income (loss) in the third quarter of fiscal 2016 includes a loss on extinguishment of debt of $59 million. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Jan. 28, 2018 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | NOTE 16—SUBSEQUENT EVENT Business Acquisition On March 5, 2018, the Company completed the acquisition of A.H. Harris Construction Supply, a leading specialty construction distributor serving the northeast and mid-Atlantic regions, for a purchase price of $380 million. The acquisition is subject to a post-closing working capital adjustment |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Jan. 28, 2018 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS (Amounts in millions) Accounts Receivable Allowance for Doubtful Accounts: Balance at Acquisition or Charges to Doubtful Other Balance at Fiscal Year ended: January 31, 2016 $ ) ) — $ January 29, 2017 $ ) ) — $ January 28, 2018 $ ) ) — $ Deferred Tax Valuation Allowances: Balance at Charges to Balance at Fiscal Year ended: January 31, 2016 $ ) $ January 29, 2017 $ ) $ January 28, 2018 $ $ |
NATURE OF BUSINESS AND SUMMAR30
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jan. 28, 2018 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Business | Nature of Business HD Supply Holdings, Inc. ("Holdings") indirectly owns all of the outstanding common stock of HD Supply, Inc. ("HDS"). Holdings, together with its direct and indirect subsidiaries, including HDS ("HD Supply" or the "Company"), is one of the largest industrial distribution companies in North America. The Company specializes in two distinct market sectors: Maintenance, Repair & Operations and Specialty Construction. Through approximately 220 branches and 44 distribution centers, in the U.S. and Canada, the Company serves these markets with an integrated go-to-market strategy. HD Supply has approximately 11,000 associates delivering localized, customer-tailored products, services and expertise. The Company serves approximately 500,000 customers, which include contractors, maintenance professionals, home builders, industrial businesses, and government entities. HD Supply's broad range of end-to-end product lines and services includes approximately 600,000 stock-keeping units ("SKUs") of quality, name-brand and proprietary-brand products as well as value-add services supporting the entire life-cycle of a project from construction to maintenance, repair and operations. HD Supply is managed primarily on a product line basis and reports results of operations in two reportable segments: Facilities Maintenance and Construction & Industrial. In addition, the consolidated financial statements include Corporate and Eliminations, which is comprised of enterprise-wide functional departments. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of HD Supply Holdings, Inc. present the results of operations, financial position and cash flows of HD Supply Holdings, Inc. and its wholly-owned subsidiaries, including HD Supply, Inc. The consolidated financial statements of HD Supply, Inc. present the results of operations, financial position and cash flows of HD Supply, Inc. and its wholly-owned subsidiaries. All material intercompany balances and transactions are eliminated. Results of operations of businesses acquired are included from their respective dates of acquisition. The results of operations of all discontinued operations have been separately reported as discontinued operations for all periods presented. |
Fiscal Year | Fiscal Year HD Supply's fiscal year is a 52- or 53-week period ending on the Sunday nearest to January 31. Fiscal year ended January 28, 2018 ("fiscal 2017"), fiscal year ended January 29, 2017 ("fiscal 2016"), and fiscal year ended January 31, 2016 ("fiscal 2015") each included 52 weeks. |
Estimates | Estimates Management has made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities, and reported amounts of revenues and expenses in preparing these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Actual results could differ from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents HD Supply considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Accounts receivable are evaluated for collectability based on numerous factors, including past transaction history with customers, their credit worthiness, and an assessment of lien and bond rights. An allowance for doubtful accounts is estimated as a percentage of aged receivables. This estimate is periodically adjusted when management becomes aware of specific customer's inability to meet its financial obligations (e.g., bankruptcy filing) or as a result of changes in historical collection patterns. |
Inventories | Inventories Inventories consist primarily of finished goods and are carried at the lower of cost or net realizable value. The cost of substantially all inventories is determined by the moving or weighted average cost method. Inventory value is evaluated at each balance sheet date to ensure that it is carried at the lower of cost or net realizable value. This evaluation includes an analysis of historical physical inventory results, a review of excess and obsolete inventories based on inventory aging, and anticipated future demand. Periodically, perpetual inventory records are adjusted to reflect declines in net realizable value below inventory carrying cost. |
Consideration Received From Vendors | Consideration Received From Vendors HD Supply enters into agreements with many of its vendors providing for inventory purchase rebates ("vendor rebates") upon achievement of specified volume purchasing levels. Vendor rebates are accrued as part of cost of sales for products sold based on progress towards earning the vendor rebates, taking into consideration cumulative purchases of inventory to date and projected purchases through the end of the year. An estimate of unearned vendor rebates is included in the carrying value of inventory at each period end for vendor rebates recognized on products not yet sold. At January 28, 2018 and January 29, 2017, vendor rebates due to HD Supply were $58 million and $50 million, respectively. These receivables are included in Receivables in the accompanying Consolidated Balance Sheets. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method based on the following estimated useful lives of the assets: Buildings and improvements 5 - 45 years Transportation equipment 5 - 7 years Furniture, fixtures and equipment 3 - 10 years |
Capitalized Software Costs | Capitalized Software Costs HD Supply capitalizes certain software costs, which are being amortized on a straight-line basis over the estimated useful lives of the software, generally three years. At January 28, 2018 and January 29, 2017, capitalized software costs totaled $27 million and $30 million, respectively, net of accumulated amortization of $209 million and $205 million, respectively. Amortization of capitalized software costs totaled $24 million, $25 million, and $37 million, in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. |
Goodwill | Goodwill Goodwill represents the excess of purchase price over fair value of net assets acquired. HD Supply does not amortize goodwill, but does assess the recoverability of goodwill on an annual basis or whenever events or circumstances indicate that it is "more likely than not" that the fair value of a reporting unit has dropped below its carrying value. The Company determines the fair values of its identified reporting units using a discounted cash flow ("DCF") analysis and a market comparable method, with each method being equally weighted in the calculation. Determining fair value requires the exercise of significant judgment, including judgment about appropriate discount rates, the amount and timing of expected future cash flows, as well as relevant comparable company earnings multiples for the market comparable approach. There were no goodwill impairment charges recorded in fiscal 2017, fiscal 2016, or fiscal 2015. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including property and equipment, are reviewed for possible impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. To analyze recoverability, undiscounted future cash flows over the remaining life of the asset are projected. If these projected cash flows are less than the carrying amount, an impairment loss is recognized to the extent the fair value of the asset less any costs of disposition is less than the carrying amount of the asset. Judgments regarding the existence of impairment indicators are based on market and operational performance. Evaluating potential impairment also requires estimates of future operating results and cash flows. |
Self-Insurance | Self-Insurance HD Supply has a high deductible insurance program for most losses related to general liability, product liability, environmental liability, automobile liability, workers' compensation, and is self-insured for medical claims, while maintaining per employee stop loss coverage, and certain legal claims. The expected ultimate cost for claims incurred as of the balance sheet date is not discounted and is recognized as a liability. Self-insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using loss development factors and actuarial assumptions followed in the insurance industry and historical loss development experience. At January 28, 2018 and January 29, 2017, self-insurance reserves for continuing operations totaled approximately $51 million and $56 million, respectively. At January 29, 2017, self-insurance reserves classified as discontinued operations totaled approximately $23 million. See "Note 2, Discontinued Operations" for further information on the sale of the Waterworks business. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable, accrued compensation and benefits and other current liabilities approximate fair value due to the short-term nature of these financial instruments. The Company's long-term financial assets and liabilities are recorded at historical costs. See "Note 6, Fair Value Measurements," for information on the fair value of long-term financial instruments. |
Revenue Recognition | Revenue Recognition HD Supply recognizes revenue when persuasive evidence of an agreement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed and determinable and collectability is reasonably assured. HD Supply ships products to customers by internal fleet and third party carriers. Revenues, net of sales tax and allowances for returns and discounts, are recognized from product sales when title to and risk of loss for the products is passed to the customer, which generally occurs at the point of destination. Revenues related to services are recognized in the period the services are performed and totaled $37 million, $25 million, and $24 million in fiscal 2017, fiscal 2016 and fiscal 2015, respectively. |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs HD Supply includes shipping and handling fees billed to customers in Net sales. Shipping and handling costs associated with inbound freight are capitalized to inventories and relieved through Cost of sales as inventories are sold. Shipping and handling costs associated with outbound freight are included in Selling, general and administrative expenses and totaled $99 million, $97 million, and $86 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk The majority of HD Supply's sales are credit sales which are made primarily to customers whose ability to pay is dependent, in part, upon the economic strength of industries and the areas where they operate. Concentration of credit risk with respect to trade accounts receivable is limited by the large number of customers comprising HD Supply's customer base. HD Supply performs ongoing credit evaluations of its customers. |
Leases | Leases Leases are reviewed for capital or operating classification at their inception under the guidance of Accounting Standards Codification ("ASC") 840, "Leases." The Company uses its incremental borrowing rate in the assessment of lease classification and assumes the initial lease term includes renewal options that are reasonably assured. HD Supply conducts operations primarily under operating leases. For leases classified as operating leases, the Company records rent expense on a straight-line basis, over the lease term beginning with the date the Company has access to the property which in some cases is prior to commencement of lease payments. Accordingly, the amount of rental expense recognized in excess of lease payments is recorded as a deferred rent liability and is amortized to rental expense over the remaining term of the lease. |
Advertising | Advertising Advertising costs are charged to expense as incurred except for the costs of producing and distributing certain direct response sales catalogs, which are capitalized and charged to expense over the life of the related catalog. Advertising expenses were approximately $33 million, $32 million, and $32 million in fiscal 2017, fiscal 2016, and fiscal 2015, respectively. Capitalized advertising costs related to direct response advertising were not material. |
Income Taxes | Income Taxes The Company provides for federal, state and foreign income taxes currently payable, as well as for those deferred due to temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. Federal, state and foreign tax benefits are recorded as a reduction of income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date. The Company consists of corporations, limited liability companies and partnerships. All income tax expense (benefit) of the Company is recorded in the accompanying Consolidated Statements of Operations and Comprehensive Income with the offset recorded through the Company's current tax accounts, deferred tax accounts, or stockholder's equity account as appropriate. |
Comprehensive Income | Comprehensive Income Comprehensive income includes Net income adjusted for certain revenues, expenses, gains and losses that are excluded from net income under GAAP. Adjustments to net income are for foreign currency translation adjustments. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar, primarily Canadian dollars, are translated into U.S. dollars at the current rate of exchange on the last day of the reporting period. Revenues and expenses are translated at a monthly average exchange rate and equity transactions are translated using either the actual exchange rate on the day of the transaction or a monthly average exchange rate. |
Stock-Based Compensation | Stock-Based Compensation The HD Supply Holdings, Inc. Omnibus Incentive Plan, approved by Holdings' stockholders on May 17, 2017, (the "Plan") provides for stock-based awards to employees, consultants and directors, including stock options, stock purchase rights, restricted stock, restricted stock units, deferred stock units, performance shares, performance units, stock appreciation rights, dividend equivalents and other stock-based awards. The Plan is an amendment and restatement of the HD Supply Holdings, Inc. 2013 Omnibus Incentive Plan, which replaced and succeeded the HDS Investment Holding, Inc. Stock Incentive Plan (the "Stock Incentive Plan"), and, from and after June 26, 2013, no further awards may be made under the Stock Incentive Plan. Both plans are accounted for under ASC 718, "Compensation—Stock Compensation," which requires the recognition of share-based compensation costs in the financial statements. The Company includes these costs in Selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Income (Loss). |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Stock Compensation —In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). The new guidance identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities as well as certain classifications on the statement of cash flows. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. The Company adopted the guidance from this amendment on January 30, 2017 (the first day of fiscal 2017) recording a $56 million cumulative-effect adjustment to retained earnings in order to recognize a deferred tax asset on the excess deduction for stock option exercises over the expense recorded for book purposes. In fiscal 2017, the Company recognized a $16 million benefit in the tax provision reflecting the excess stock-based compensation expense deductible for tax purposes over the amount expensed for book purposes for options exercised. Inventory —In July 2015, the FASB issued ASU No. 2015-11, "Inventory, Simplifying the Measurement of Inventory" ("ASU 2015-11"). The amended guidance requires that inventory be measured at the lower of cost and net realizable value. The amended guidance is limited to inventory measured using the first-in, first-out ("FIFO") or average cost methods and excludes inventory measured using last-in, first-out ("LIFO") or retail inventory methods. ASU 2015-11 is effective for annual and interim periods beginning after December 15, 2016. The Company adopted this guidance on January 30, 2017 (the first day of fiscal 2017) with no material impact on the Company's financial position, results of operations or cash flows. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted Stock Compensation —In May 2017, the FASB issued ASU No. 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting" ("ASU 2017-09"). The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The ASU is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied prospectively to an award modified on or after the adoption date. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. Goodwill —In January 2017, the FASB issued ASU No. 2017-04, "Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). The new guidance eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value. The ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The amendments in this update should be applied on a prospective basis. The adoption of ASU 2017-04 is not expected to have a material impact on the Company's financial position, results of operations or cash flows. Statement of Cash Flows —In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash" ("ASU 2016-18"). The new guidance is intended to reduce diversity in practice by adding or clarifying guidance on classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied retrospectively to all periods presented. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. On a prospective basis, the ASU will only impact the Company to the extent it has restricted cash. Income Taxes —In October 2016, the FASB issued ASU No. 2016-16, "Income Taxes (Topic 740): Intra-entity Transfers of Assets Other than Inventory" ("ASU 2016-16"). The new guidance is intended to improve the accounting for intra-entity transfers of assets other than inventory by requiring recognition of income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. ASU 2016-16 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. Statement of Cash Flows —In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Clarification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"). The new guidance is intended to reduce diversity in practice related to certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. The Company will adopt this guidance on January 29, 2018 (the first day of fiscal 2018) and expects no material impact to the Company's financial position, results of operations or cash flows. Leases —In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), amended by ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)," and ASU 2018-01, "Leases (Topic 842)-Land Easement Practical Expedient for Transition to Topic 842." The amended guidance requires companies to recognize all leases as assets and liabilities for the rights and obligations created by leased assets on the consolidated balance sheet. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. It is to be adopted using a modified retrospective approach. The Company is currently evaluating the impact of adopting ASU 2016-02. Revenue recognition —In May 2014, the FASB issued ASU No. 2014-09, "Revenue from contracts with customers" ("ASU 2014-09"), amended by ASU 2016-10, "Revenue from contracts with customers (Topic 606): Identifying Performance Obligations and Licensing," ASU 2016-12, "Revenue from contracts with customers (Topic 606): Narrow-Scope Improvements and Practical Expedients," ASU 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," ASU 2017-13, "Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)," and ASU 2017-14, "Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606)." The amended guidance outlines a single comprehensive revenue model for entities to use in accounting for revenue arising from contracts with customers. The guidance supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that "an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services." The update requires significant additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. Entities have the option of using either a full retrospective or modified approach to adopt the guidance. In July 2015, the FASB provided a one-year delay in the effective date of ASU 2014-09, to be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, and a permission to early adopt for annual and interim periods beginning after December 15, 2016. The Company plans to adopt the provisions of ASU 2014-09 using the modified retrospective method. The Company completed its analysis of reviewing customer contracts and applying the five-step model of the new standard to each contract category identified to identify necessary adjustments to existing accounting policies and to quantify the ASU's impact. The Company has concluded that most of its contracts with customers consist of a single performance obligation to transfer promised goods or services and therefore will not be impacted by the adoption of ASU 2014-09. The adoption of ASU 2014-09 will impact the Company's method of recognizing certain installation income, which is generally recognized when the customer order is fully installed. ASU 2014-09 requires installation income to be recognized as each performance obligation within a contract is completed. The Company's installation contracts are typically completed in less than 90 days. Due to the seasonal nature of the Company's installation business, recognized revenue could shift between quarters within the year. While the Company will provide expanded disclosure requirements, such as disaggregation of revenue, to comply with ASU 2014-09, it does not expect the adoption of ASU 2014-09 to have a material impact on the Company's annual financial position, results of operations or cash flows. The Company will adopt ASU 2014-09, as well as other clarifications and technical guidance issued by the FASB related to this new revenue standard on January 29, 2018 (the first day of fiscal 2018). The Company does not plan to make any adjustments to its financial position upon adoption of ASU 2014-09. |
NATURE OF BUSINESS AND SUMMAR31
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property and equipment estimated useful lives | Buildings and improvements 5 - 45 years Transportation equipment 5 - 7 years Furniture, fixtures and equipment 3 - 10 years |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
DISCONTINUED OPERATIONS | |
Schedule of results of operations of discontinued operations | The following table provides additional detail related to the results of operations of the discontinued operations (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Net sales $ $ $ Cost of sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit Operating expenses: Selling, general and administrative Depreciation and amortization Restructuring — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses Operating Income (Gain) loss on disposal of discontinued operations ) ) Other (income) expense, net — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before provision for income taxes Provision (benefit) for income taxes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from discontinued operations, net of tax $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At January 28, 2018 and January 29, 2017, the carrying amounts of major classes of assets and liabilities of discontinued operations in the Consolidated Balance Sheets were as follows (amounts in millions): January 28, January 29, Current assets: Receivables, less allowance for doubtful accounts of $0 and $4 $ — $ Inventories — Other current assets — ​ ​ ​ ​ ​ ​ ​ ​ Total current assets — ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net — Goodwill — Intangible assets, net — ​ ​ ​ ​ ​ ​ ​ ​ Total non-current assets — ​ ​ ​ ​ ​ ​ ​ ​ Total assets of discontinued operations $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current Liabilities: Accounts payable $ — $ Accrued compensation and benefits — Other current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Other non-current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total non-current liabilities — ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities of discontinued operations $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table provides additional detail related to the net cash provided by (used in) operating and investing activities of the discontinued operations (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Net cash flows provided by (used in) operating activities $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: Capital expenditures ) ) ) Proceeds from sales of businesses, net Proceeds from sales of property and equipment, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows provided by (used in) investing activities $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of carrying amount of goodwill by reporting unit | The carrying amount of goodwill by reporting unit is as follows (amounts in millions): As of January 28, 2018 As of January 29, 2017 Gross Accumulated Net Gross Accumulated Net Facilities Maintenance $ $ — $ $ $ — $ Construction & Industrial-WhiteCap ) ) Home Improvement Solutions ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total goodwill $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of components of Intangible Assets | HD Supply's intangible assets as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): As of January 28, 2018 As of January 29, 2017 Gross Accumulated Net Gross Accumulated Net Customer relationships $ $ ) $ $ $ ) $ Trade names ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
DEBT | |
Schedule of long-term debt | HDS's long-term debt as of January 28, 2018 and January 29, 2017 consisted of the following (dollars in millions): January 28, 2018 January 29, 2017 Outstanding Interest Outstanding Interest Senior ABL Facility due 2022 $ $ Term B-1 Loans due 2021 — — Term B-2 Loans due 2023 — — Term B-3 Loans due 2021 — — Term B-4 Loans due 2023 — — December 2014 First Priority Notes due 2021 — — April 2016 Senior Unsecured Notes due 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total gross long-term debt $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less unamortized discount ) ) Less unamortized deferred financing costs ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net long-term debt $ $ Less current installments ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total net long-term debt, excluding current installments $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Represents the stated rate of interest, without including the effect of discounts or premiums. |
Schedule of notes redemption | Year Percentage 2019 % 2020 % 2021 % 2022 and thereafter % |
Maturities of long-term debt outstanding | Maturities of long-term debt outstanding, in principal amounts, at January 28, 2018 are summarized below (amounts in millions): Fiscal Year 2018 2019 2020 2021 2022 Thereafter Total Principal maturities $ $ $ $ $ $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial instruments that are not reflected at fair value on the balance sheet | The Company's financial instruments that are not reflected at fair value on the balance sheet were as follows as of January 28, 2018 and January 29, 2017 (amounts in millions): As of January 28, As of January 29, Recorded Estimated Recorded Estimated Senior ABL Facility $ $ $ $ Term Loans and Notes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) These amounts do not include accrued interest; accrued interest is classified as Other current liabilities in the accompanying Consolidated Balance Sheets. These amounts do not include any related discounts or deferred financing costs. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
INCOME TAXES | |
Components of Income (Loss) from Continuing Operations before Provision (Benefit) for Income Taxes | The components of Income (Loss) from Continuing Operations before Provision (Benefit) for Income Taxes are as follows (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, United States $ $ $ Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Provision (Benefit) for Income Taxes | The Provision (Benefit) for Income Taxes consisted of the following (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Current: Federal $ $ ) $ ) State ) Foreign ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) Deferred: Federal ) State ) ) Foreign — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Reconciliation of the provision (benefit) for income taxes from continuing operations at the federal statutory rate of 35% to the actual tax provision (benefit) | The reconciliation of the provision (benefit) for income taxes from continuing operations at the federal statutory rate of 33.9% to the actual tax provision (benefit) for fiscal 2017, at the federal statutory rate of 35% to the actual tax provision (benefit) for both fiscal 2016 and fiscal 2015 is as follows (amounts in millions): Fiscal year Ended January 28, January 29, January 31, Income taxes at federal statutory rate $ $ $ State income taxes, net of federal income tax benefit Foreign rate differential ) ) ) Legal entity restructuring — Valuation allowance ) ) Adjustments to tax reserves ) ) Tax Cuts and Jobs Act of 2017 — — Excess tax benefits related to stock-based compensation(1) ) — — Other, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total provision (benefit) $ $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The adoption of ASU 2016-09 in fiscal 2017 requires excess tax benefits from share-based awards activity to be reflected as a reduction of the provision for income taxes, whereas they were previously recognized in Stockholders' Equity. |
Significant portions of the deferred tax assets and deferred tax liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of January 28, 2018 and January 29, 2017 were as follows (amounts in millions): January 28, January 29, Deferred Tax Assets: Accrued compensation $ $ Accrued self-insurance liabilities Other accrued liabilities Restructuring liabilities Net operating loss carryforward Fixed assets Allowance for doubtful accounts Inventory Tax credit carryforward Other Valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent deferred tax assets Deferred Tax Liabilities: Prepaid expense $ ) $ ) Deferred financing costs ) ) Software costs ) ) Intangible assets ) ) Income from discharge of indebtedness ) ) ​ ​ ​ ​ ​ ​ ​ ​ Noncurrent deferred tax liabilities ) ) ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax assets (liabilities), net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Reconciliation of the beginning and ending amount of unrecognized tax benefits for continuing operations | A reconciliation of the beginning and ending amount of unrecognized tax benefits for continuing operations for fiscal 2017, fiscal 2016, and fiscal 2015 is as follows (amounts in millions): Fiscal Year Ended January 28, January 29, January 31, Unrecognized Tax Benefits beginning of period $ $ $ Gross increases for tax positions in current period — Gross increases for tax positions in prior period — Gross decreases for tax positions in prior period — — ) Settlements — — ) Lapse of statutes — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized Tax Benefits end of period $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
STOCK-BASED COMPENSATION AND 37
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | |
Summary of option activity | A summary of option activity under the HDS Plans is presented below (shares in thousands): Number of Weighted Average Outstanding at February 1, 2015 $ Granted — — Exercised ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 29, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Exercised ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at January 28, 2018 $ ​ ​ ​ ​ ​ ​ ​ ​ |
Option pricing with weighted average assumptions | Fiscal Year Ended January 28, January 29, January 31, Risk-free interest rate % % — Dividend yield % % — Expected volatility factor % % — Expected option life in years — |
Summary of RSA and RSU activity | A summary of RSA and RSU activity under the HDS Plans is presented below (shares in thousands): Number of Weighted Average Non-vested at February 1, 2015 $ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Non-vested at January 31, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Non-vested at January 29, 2017 $ ​ ​ ​ ​ ​ ​ ​ ​ Granted Vested ) Forfeited ) ​ ​ ​ ​ ​ ​ ​ ​ Non-vested at January 28, 2018 $ ​ ​ ​ ​ ​ ​ ​ ​ |
BASIC AND DILUTED WEIGHTED AVER
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
BASIC AND DILUTED WEIGHTED-AVERAGE COMMON SHARES | |
Schedule of reconciliation of basic to diluted weighted average common shares | The reconciliation of basic to diluted weighted-average common shares for fiscal 2017, fiscal 2016, and fiscal 2015 is as follows (in thousands): Fiscal Year Ended January 28, January 29, January 31, Weighted-average common shares outstanding Effect of potentially dilutive stock plan securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted weighted-average common shares outstanding Stock plan securities excluded from dilution(1) (1) Represents securities not included in the computation of diluted earnings per share because their effect would have been anti-dilutive. |
SUPPLEMENTAL BALANCE SHEET AN39
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION | |
Schedule of receivables | Receivables as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): January 28, January 29, Trade receivables, net of allowance for doubtful accounts $ $ Vendor rebate receivables Other receivables ​ ​ ​ ​ ​ ​ ​ ​ Total receivables, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment | Property and equipment as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): January 28, January 29, Land $ $ Buildings and improvements Transportation equipment Furniture, fixtures and equipment Capitalized software Construction in progress ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment Less accumulated depreciation & amortization ) ) ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of other current liabilities | Other current liabilities as of January 28, 2018 and January 29, 2017 consisted of the following (amounts in millions): January 28, January 29, Accrued interest $ $ Accrued non-income taxes Other ​ ​ ​ ​ ​ ​ ​ ​ Total other current liabilities $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
RESTRUCTURING ACTIVITIES (Table
RESTRUCTURING ACTIVITIES (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
RESTRUCTURING ACTIVITIES | |
Schedule of restructuring activity for the liability balance | The following table presents the activity for the liability balance (amounts in millions): Severance Relocation & Total Balance—January 29, 2017 $ — $ — $ — Charges Cash payments ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance—January 28, 2018 $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
Future minimum aggregate rental payments under non-cancelable operating leases | Future minimum aggregate rental payments under non-cancelable leases as of January 28, 2018 are as follows (amounts in millions): Fiscal Year 2018 2019 2020 2021 2022 Thereafter Total Operating Leases $ $ Build-to-Suit Lease(i) $ $ (i) Represents the future lease payments for the leadership development and headquarters facility currently under construction in Atlanta, Georgia. See "Note 10, Supplemental Balance Sheet and Cash Flow Information" for further information. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
SEGMENT INFORMATION | |
Schedule of net sales, Adjusted EBITDA, and other measures for each of the reportable segments and total continuing operations | The following tables present Net sales, Adjusted EBITDA, and certain other measures for each of the reportable segments and total continuing operations for the periods indicated (amounts in millions): Fiscal Year 2017 Facilities Construction & Corporate & Total Net sales $ $ $ ) $ Adjusted EBITDA — Depreciation(1) & Software Amortization — Other Intangible Amortization — Total Assets(2) Capital Expenditures(2) Fiscal Year 2016 Facilities Construction & Corporate & Total Net sales $ $ $ ) $ Adjusted EBITDA — Depreciation(1) & Software Amortization — Other Intangible Amortization — Total Assets(2) Capital Expenditures(2) Fiscal Year 2015 Facilities Construction & Corporate & Total Net sales $ $ $ ) $ Adjusted EBITDA — Depreciation(1) & Software Amortization — Other Intangible Amortization — Total Assets(2) Capital Expenditures(2) (1) Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations. (2) Total Assets and capital expenditures include amounts attributable to discontinued operations for the periods prior to the dispositions. |
Schedule of reconciliation of adjusted EBITDA to income (loss) from continuing operations | Fiscal 2017 Fiscal 2016 Fiscal 2015 Total Adjusted EBITDA $ $ $ Depreciation and amortization Stock-based compensation Restructuring Other — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income Interest expense Interest income ) — — Loss on extinguishment & modification of debt Other (income) expense, net — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from Continuing Operations Before Provision (Benefit) for Income Taxes Provision (benefit) for income taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income from continuing operations $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
GUARANTOR SUBSIDIARIES (Tables)
GUARANTOR SUBSIDIARIES (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
GUARANTOR SUBSIDIARIES | |
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | Amounts in millions Fiscal Year 2017 Debt Subsidiary Non- Elim- Total Holdings Net Sales $ — $ $ $ ) $ $ — Cost of sales — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit — — — Operating expenses: Selling, general and administrative — — Depreciation and amortization — — Restructuring — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses — — Operating Income (Loss) ) — — Interest expense ) — Interest (income) ) ) — ) — Net (earnings) loss of equity affiliates ) — — — ) Loss on extinguishment & modification of debt — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) Provision (benefit) for income taxes ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations ) Income from discontinued operations, net of tax — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income (Loss) $ $ $ $ ) $ $ Other comprehensive income—foreign currency translation adjustment ) — ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Comprehensive Income (Loss) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2016 Debt Subsidiary Non- Elim- Total Holdings Net Sales $ — $ $ $ ) $ $ — Cost of sales — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit — ) — Operating expenses: Selling, general and administrative ) — Depreciation and amortization — Restructuring charge — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ) — Operating Income (Loss) ) — — Interest expense ) — Interest (income) ) ) — — — Net (earnings) loss of equity affiliates ) — — — ) Loss on extinguishment & modification of debt — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) ) Provision (benefit) for income taxes ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations ) Income (loss) from discontinued operations, net of tax — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income (Loss) $ $ $ $ ) $ $ Other comprehensive income—foreign currency translation adjustment — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Comprehensive Income (Loss) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2015 Debt Subsidiary Non- Elim- Total Holdings Net Sales $ — $ $ $ ) $ $ — Cost of sales — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Profit — ) — Operating expenses: Selling, general and administrative ) — Depreciation and amortization — — Restructuring — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total operating expenses ) — Operating Income (Loss) ) — — Interest expense ) — Interest (income) ) ) — — — Net (earnings) loss of equity affiliates ) — — — ) Loss on extinguishment & modification of debt — — — — Other (income) expense, net — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations Before Provision (Benefit) for Income Taxes ) ) Provision (benefit) for income taxes ) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (Loss) from Continuing Operations ) Income (loss) from discontinued operations, net of tax — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income (Loss) $ $ $ $ ) $ $ Other comprehensive income—foreign currency translation adjustment — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Comprehensive Income (Loss) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
CONDENSED CONSOLIDATING BALANCE SHEETS | Amounts in millions As of January 28, 2018 Debt Subsidiary Non- Eliminations Total HDS Holdings ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ $ — Receivables, net — — Inventories — — — Intercompany receivables — — ) — — Other current assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net — — Goodwill — — — — Intangible assets, net — — — Deferred tax asset — ) — Investment in subsidiaries — — ) — Intercompany notes receivable — ) — — Other assets — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ $ — Accrued compensation and benefits — — Current installments of long-term debt — — — — Intercompany payables — — ) — — Other current liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, excluding current installments — — — Deferred tax liabilities — — ) — — Intercompany notes payable — ) — — Other liabilities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity (deficit) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity (deficit) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions As of January 29, 2017 Debt Issuer Subsidiary Non- Eliminations Total Holdings ASSETS Current assets: Cash and cash equivalents $ $ $ $ — $ $ Receivables, net — — Inventories — — — Intercompany receivables — — ) — — Current assets of discontinued operations — — — — Other current assets — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current assets ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net — — Goodwill — — — — Intangible assets, net — — — Deferred tax asset — ) — Non-current assets of discontinued operations — — — — Investment in subsidiaries — — ) — Intercompany notes receivable — ) — — Other assets — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) Current liabilities: Accounts payable $ $ $ $ — $ $ — Accrued compensation and benefits — — Current installments of long-term debt — — — — Intercompany payables — — ) — — Current liabilities of discontinued operations — — — Other current liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt, excluding current installments — — — Deferred tax liabilities — — ) — — Non-current liabilities of discontinued operations — — — — Intercompany notes payable — ) — — Other liabilities — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders' equity (deficit) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity (deficit) $ $ $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS | Amounts in millions Fiscal Year 2017 Debt Subsidiary Non- Elim- Total Holdings Net cash flows from operating activities $ $ $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities Capital expenditures ) ) — — ) — Proceeds from sale of property and equipment — — — — Proceeds from sale of businesses, net — — — — Proceeds from (payments of) intercompany notes — ) — — — Other investing activities — ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from investing activities $ $ ) $ ) $ $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities Proceeds from stock options exercised — — — — — Purchase of treasury shares — — — — — ) Equity contribution (return of capital) ) — — — ) Borrowings from (repayments to) intercompany notes — — ) — — Borrowings of long-term debt — — — — Repayments of long-term debt ) — — — ) — Borrowings on long-term revolver — — — Repayments on long-term revolver ) — ) — ) — Debt issuance and modification fees ) — — — ) — Other financing activities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from financing activities ) — ) ) ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rates on cash — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash & cash equivalents $ $ ) $ ) $ — $ $ ) Cash and cash equivalents at beginning of period — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ $ $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2016 Debt Subsidiary Non- Elim- Total Holdings Net cash flows from operating activities $ $ ) $ $ — $ $ — Cash flows from investing activities Capital expenditures ) ) ) — ) — Proceeds from sale of property and equipment — — — — Proceeds from sale of a business, net — — — — (Investments in) return of capital in equity affiliates — — ) — — Proceeds from (payments of) intercompany notes — — ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from investing activities $ $ $ ) $ ) $ ) $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities Proceeds from stock options exercised — — — — — Purchase of treasury shares — — — — — ) Equity contribution (return of capital) — — ) — — Borrowings (repayments) of intercompany notes ) — — — — Borrowings of long-term debt — — — — Repayments of long-term debt ) — — — ) — Borrowings on long-term revolver — — — Repayments of long-term revolver ) — — — ) — Debt issuance and modification fees ) — — — ) — Other financing activities ) ) — — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from financing activities ) ) ) ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rates on cash — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash & cash equivalents $ ) $ ) $ ) $ — $ ) $ ) Cash and cash equivalents at beginning of period — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ $ $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts in millions Fiscal Year 2015 Debt Subsidiary Non- Elim- Total Holdings Net cash flows from operating activities $ $ $ $ — $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities Capital expenditures ) ) ) — ) — Proceeds from sale of property and equipment — — — — Proceeds from sale of a business, net — — — — (Investments in) return of capital of equity affiliates — — ) — — Proceeds from (payments of) intercompany notes — ) — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from investing activities $ $ ) $ ) $ ) $ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities Proceeds from stock options exercised — — — — — Purchase of treasury shares — — — — — ) Equity contribution (return of capital) — ) ) — — Borrowings (repayments) of intercompany notes — — ) — — Borrowings of long-term debt — — — — Repayments of long-term debt ) — — — ) — Borrowings on long-term revolver — — — — Repayments of long-term revolver ) — — — ) — Debt issuance and modification fees ) — — — ) — Other financing activities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net cash flows from financing activities $ ) $ ) $ ) $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rates on cash — — ) — ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash & cash equivalents $ $ ) $ ) $ — $ $ Cash and cash equivalents at beginning of period — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents at end of period $ $ $ $ — $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
QUARTERLY FINANCIAL DATA (UNA44
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Jan. 28, 2018 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |
Summary of the quarterly consolidated results of operations | The following is a summary of the quarterly consolidated results of operations for the fiscal years ended January 28, 2018 and January 29, 2017 (amounts in millions): First Second Third Fourth TOTAL Fiscal Year 2017 Net sales $ $ $ $ $ Gross profit Income (loss) from continuing operations ) Income from discontinued operations Net income (loss) ) Basic earnings per share(1) Income (loss) from continuing operations $ $ $ $ ) $ Income from discontinued operations Net income (loss) ) Diluted earnings per share(1) Income (loss) from continuing operations $ $ $ $ ) $ Income from discontinued operations Net income (loss) ) Fiscal Year 2016 Net sales $ $ $ $ $ Gross profit Income (loss) from continuing operations ) Income (loss) from discontinued operations Net income (loss) ) Basic earnings (loss) per share(1) Income (loss) from continuing operations $ ) $ $ $ $ Income (loss) from discontinued operations Net income (loss) ) Diluted earnings (loss) per share(1) Income (loss) from continuing operations $ ) $ $ $ $ Income (loss) from discontinued operations Net income (loss) ) (1) Basic and Diluted earnings (loss) per share are based on shares outstanding for Holdings. Quarterly earnings per share amounts may not foot due to rounding. In addition, quarterly earnings per share amounts may not add to full-year earnings per share amounts due to the difference in weighted-average common shares for the quarters versus the weighted-average common shares for the year. |
NATURE OF BUSINESS AND SUMMAR45
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Business (Details) | 12 Months Ended |
Jan. 28, 2018segmentproductcategorycustomeritememployee | |
Nature of Business | |
Number of distinct market sectors in which entity specializes | category | 2 |
Number of associates | employee | 11,000 |
Number of customers | customer | 500,000 |
Number of SKUs offered | product | 600,000 |
Number of reportable segments | segment | 2 |
U.S. and Canada | |
Nature of Business | |
Number of Branches | 220 |
Number of distribution centers | 44 |
NATURE OF BUSINESS AND SUMMAR46
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fiscal Year (Details) | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Length of fiscal year (in days) | 364 days | 364 days | 364 days |
Minimum | |||
Length of fiscal year (in days) | 364 days | ||
Maximum | |||
Length of fiscal year (in days) | 371 days |
NATURE OF BUSINESS AND SUMMAR47
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consideration Received from Vendors (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Vendor rebates receivables | $ 58 | $ 50 |
NATURE OF BUSINESS AND SUMMAR48
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) | 12 Months Ended |
Jan. 28, 2018 | |
Buildings and improvements | Minimum | |
Property and Equipment | |
Estimated useful life | 5 years |
Buildings and improvements | Maximum | |
Property and Equipment | |
Estimated useful life | 45 years |
Transportation equipment | Minimum | |
Property and Equipment | |
Estimated useful life | 5 years |
Transportation equipment | Maximum | |
Property and Equipment | |
Estimated useful life | 7 years |
Furniture, fixtures and equipment | Minimum | |
Property and Equipment | |
Estimated useful life | 3 years |
Furniture, fixtures and equipment | Maximum | |
Property and Equipment | |
Estimated useful life | 10 years |
NATURE OF BUSINESS AND SUMMAR49
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Capitalized Software Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Capitalized Software Costs | |||
Property and equipment, net | $ 325 | $ 253 | |
Accumulated amortization | 528 | 505 | |
Amortization cost | $ 97 | 102 | $ 134 |
Capitalized software | |||
Capitalized Software Costs | |||
Estimated useful life | 3 years | ||
Property and equipment, net | $ 27 | 30 | |
Accumulated amortization | 209 | 205 | |
Amortization cost | $ 24 | $ 25 | $ 37 |
NATURE OF BUSINESS AND SUMMAR50
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 |
NATURE OF BUSINESS AND SUMMAR51
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Self-Insurance (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Continuing Operations | ||
Nature of business and basis of presentation | ||
Self-insurance reserves | $ 51 | $ 56 |
Discontinued Operation | ||
Nature of business and basis of presentation | ||
Self-insurance reserves | $ 23 |
NATURE OF BUSINESS AND SUMMAR52
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Revenues from services | $ 37 | $ 25 | $ 24 |
NATURE OF BUSINESS AND SUMMAR53
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shipping and Handling Fees and Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Shipping and handling costs | $ 99 | $ 97 | $ 86 |
NATURE OF BUSINESS AND SUMMAR54
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising expenses | $ 33 | $ 32 | $ 32 |
NATURE OF BUSINESS AND SUMMAR55
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions | Jan. 30, 2017 | Jan. 28, 2018 |
Recently Adopted Accounting Pronouncements | ||
Cumulative-effect adjustment to retained earnings | $ 56 | |
Excess tax benefit on stock-based compensation expense | 16 | |
ASU No. 2016-09 | ||
Recently Adopted Accounting Pronouncements | ||
Cumulative-effect adjustment to retained earnings | $ 56 | 56 |
Excess tax benefit on stock-based compensation expense | $ 16 |
DISCONTINUED OPERATIONS - Gener
DISCONTINUED OPERATIONS - General Information (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Oct. 31, 2017 | Aug. 31, 2017 | May 29, 2016 | Oct. 31, 2015 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
DISCONTINUED OPERATIONS | |||||||
Cash consideration | $ 2,421 | $ 28 | $ 809 | ||||
Interior Solutions | Discontinued Operations, Disposed of by Sale | |||||||
DISCONTINUED OPERATIONS | |||||||
Cash consideration | $ 26 | ||||||
Transaction costs | 2 | ||||||
Pre-tax gain (loss) on disposal of discontinued operations | $ (10) | ||||||
Power Solutions | Discontinued Operations, Disposed of by Sale | |||||||
DISCONTINUED OPERATIONS | |||||||
Cash consideration | $ 812 | ||||||
Transaction costs | 16 | ||||||
Pre-tax gain (loss) on disposal of discontinued operations | $ 189 | ||||||
Amount of gain due to the expiration of indemnification for tax positions | $ 3 | ||||||
Waterworks business | Discontinued Operations, Disposed of by Sale | |||||||
DISCONTINUED OPERATIONS | |||||||
Cash consideration | $ 2,400 | ||||||
Transaction costs | 38 | ||||||
Working capital settlement | $ 29 | ||||||
Pre-tax gain (loss) on disposal of discontinued operations | 732 | ||||||
Tax effect of gain from disposal of discontinued operations | $ 197 |
DISCONTINUED OPERATIONS - Resul
DISCONTINUED OPERATIONS - Results of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Operating expenses: | |||||||||||
Income from discontinued operations, net of tax | $ 9 | $ 406 | $ 361 | $ 27 | $ 26 | $ 40 | $ 37 | $ 27 | $ 803 | $ 130 | $ 272 |
Discontinued Operations, Held-for-sale or Disposed of by Sale | |||||||||||
Results of operations of the discontinued operations | |||||||||||
Net sales | 1,413 | 2,706 | 4,164 | ||||||||
Cost of sales | 1,100 | 2,078 | 3,316 | ||||||||
Gross Profit | 313 | 628 | 848 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 197 | 391 | 569 | ||||||||
Depreciation and amortization | 6 | 12 | 32 | ||||||||
Restructuring | 2 | 1 | |||||||||
Total operating expenses | 203 | 405 | 602 | ||||||||
Operating Income | 110 | 223 | 246 | ||||||||
(Gain) loss on disposal of discontinued operations | (934) | 6 | (186) | ||||||||
Other (income) expense, net | 1 | 1 | |||||||||
Income before provision for income taxes | 1,043 | 217 | 431 | ||||||||
Provision (benefit) for income taxes | 240 | 87 | 159 | ||||||||
Income from discontinued operations, net of tax | $ 803 | $ 130 | $ 272 |
DISCONTINUED OPERATIONS - Carry
DISCONTINUED OPERATIONS - Carrying Amounts of Major Classes of Assets and Liabilities (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Current assets: | ||
Total current assets | $ 575 | |
Total non-current assets | 1,122 | |
Current Liabilities: | ||
Total current liabilities | 259 | |
Total non-current liabilities | 20 | |
Discontinued Operations, Held-for-sale or Disposed of by Sale | ||
Current assets: | ||
Receivables, less allowance for doubtful accounts of $0 and $4 | 346 | |
Inventories | 225 | |
Other current assets | 4 | |
Total current assets | 575 | |
Property and equipment, net | 51 | |
Goodwill | 1,061 | |
Intangible assets, net | 10 | |
Total non-current assets | 1,122 | |
Total assets of discontinued operations | 1,697 | |
Allowance for doubtful accounts | ||
Allowance for doubtful accounts | $ 0 | 4 |
Current Liabilities: | ||
Accounts payable | 212 | |
Accrued compensation and benefits | 42 | |
Other current liabilities | 5 | |
Total current liabilities | 259 | |
Other non-current liabilities | 20 | |
Total non-current liabilities | 20 | |
Total liabilities of discontinued operations | $ 279 |
DISCONTINUED OPERATIONS - Net C
DISCONTINUED OPERATIONS - Net Cash Provided by Operating Activities and Investing Activities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Cash flows from investing activities | |||
Proceeds from sales of businesses, net | $ 2,421 | $ 28 | $ 809 |
Proceeds from sales of property and equipment, net | 2 | 32 | 3 |
Discontinued Operations, Held-for-sale or Disposed of by Sale | |||
Net cash provided by operating and investing activities of the discontinued operations | |||
Net cash flows provided by (used in) operating activities | 27 | 217 | 215 |
Cash flows from investing activities | |||
Capital expenditures | (5) | (10) | (14) |
Proceeds from sales of businesses, net | 2,421 | 28 | 809 |
Proceeds from sales of property and equipment, net | 2 | 2 | 2 |
Net cash flows provided by (used in) investing activities | $ 2,418 | $ 20 | $ 797 |
RELATED PARTIES - Home Depot (D
RELATED PARTIES - Home Depot (Details) - HDS Holding Corporation - Affiliate - Home Depot Incorporated $ in Billions | Aug. 30, 2007USD ($) |
RELATED PARTIES | |
Payments to Home Depot | $ 8.2 |
Shareholder ownership percentage | 12.50% |
RELATED PARTIES - Purchases (De
RELATED PARTIES - Purchases (Details) $ in Millions | 12 Months Ended |
Jan. 31, 2016USD ($) | |
Affiliates of Bain | HD Supply, Inc. (Total HDS) | Investor | |
RELATED PARTIES | |
Purchases from related party | $ 8 |
RELATED PARTIES - Sales (Detail
RELATED PARTIES - Sales (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
HDS Customer | HD Supply, Inc. (Total HDS) | Board member | |||
RELATED PARTIES | |||
Products sold | $ 3 | $ 3 | $ 4 |
GOODWILL AND INTANGIBLE ASSET63
GOODWILL AND INTANGIBLE ASSETS - Goodwill - Carrying Amount by Reporting Unit (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Goodwill by reporting unit | ||
Gross Goodwill | $ 1,911 | $ 1,911 |
Accumulated Impairments | (104) | (104) |
Net Goodwill | 1,807 | 1,807 |
Reportable segment | Facilities Maintenance | ||
Goodwill by reporting unit | ||
Gross Goodwill | 1,603 | 1,603 |
Net Goodwill | 1,603 | 1,603 |
Reportable segment | Construction & Industrial - White Cap | ||
Goodwill by reporting unit | ||
Gross Goodwill | 183 | 183 |
Accumulated Impairments | (74) | (74) |
Net Goodwill | 109 | 109 |
Corporate & Eliminations | Home Improvement Solutions | ||
Goodwill by reporting unit | ||
Gross Goodwill | 125 | 125 |
Accumulated Impairments | (30) | (30) |
Net Goodwill | $ 95 | $ 95 |
GOODWILL AND INTANGIBLE ASSET64
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets - Tabular Disclosure (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Intangible Assets | ||
Gross Intangible | $ 188 | $ 191 |
Accumulated Amortization | (97) | (89) |
Net Intangible | 91 | 102 |
Customer relationships | ||
Intangible Assets | ||
Gross Intangible | 49 | 49 |
Accumulated Amortization | (25) | (21) |
Net Intangible | 24 | 28 |
Trade names | ||
Intangible Assets | ||
Gross Intangible | 139 | 142 |
Accumulated Amortization | (72) | (68) |
Net Intangible | $ 67 | $ 74 |
GOODWILL AND INTANGIBLE ASSET65
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets - Write-offs (Details) $ in Millions | 12 Months Ended |
Jan. 28, 2018USD ($) | |
Intangible assets | |
Write-off amount | $ 3 |
GOODWILL AND INTANGIBLE ASSET66
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets - Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
GOODWILL AND INTANGIBLE ASSETS | |||
Amortization expense of intangible assets | $ 12 | $ 12 | $ 12 |
GOODWILL AND INTANGIBLE ASSET67
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets - Estimated Future Amortization Expense (Details) $ in Millions | Jan. 28, 2018USD ($) |
Estimated future amortization expense for continuing operations | |
2,018 | $ 11 |
2,019 | 11 |
2,020 | 11 |
2,021 | 11 |
2,022 | $ 11 |
DEBT - Term Loan Facility (Deta
DEBT - Term Loan Facility (Details) | Dec. 28, 2017USD ($) | Sep. 01, 2017USD ($) | Aug. 31, 2017USD ($) | Aug. 25, 2017USD ($) | Apr. 18, 2017USD ($) | Apr. 05, 2017USD ($) | Jan. 26, 2017USD ($) | Oct. 14, 2016USD ($) | Jan. 28, 2018USD ($) | Oct. 29, 2017USD ($) | Jul. 30, 2017USD ($) | Apr. 30, 2017USD ($) | Oct. 30, 2016USD ($) | May 01, 2016USD ($) | May 03, 2015USD ($) | Jan. 28, 2018USD ($) | Jan. 29, 2017USD ($) | Jan. 31, 2016USD ($) | Apr. 11, 2016USD ($) |
DEBT | |||||||||||||||||||
Loss on extinguishment of debt | $ 3,000,000 | $ 78,000,000 | $ 49,000,000 | $ 3,000,000 | $ 59,000,000 | $ 115,000,000 | |||||||||||||
Cash paid for interest | $ 159,000,000 | $ 296,000,000 | $ 397,000,000 | ||||||||||||||||
Loss on extinguishment & modification of debt | $ 84,000,000 | $ 179,000,000 | $ 100,000,000 | ||||||||||||||||
HDS (Debt Issuer) | Senior ABL Facility due 2022 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Payment of debt | $ (500,000,000) | ||||||||||||||||||
Remaining borrowing capacity | 1,000,000,000 | ||||||||||||||||||
Loss on extinguishment of debt | $ 3,000,000 | ||||||||||||||||||
Secured debt | HDS (Debt Issuer) | 5.25% December 2014 Secured First Priority Notes due 2021 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Loss on extinguishment of debt | $ 73,000,000 | ||||||||||||||||||
Redemption of outstanding principal of long term debt | $ 1,250,000,000 | ||||||||||||||||||
Interest rate, stated rate (as a percent) | 5.25% | 5.25% | 5.25% | 5.25% | |||||||||||||||
Aggregate redemption price of long term debt | $ 1,325,000,000 | ||||||||||||||||||
Payment of make whole premium on debt | 62,000,000 | ||||||||||||||||||
Cash paid for interest | 14,000,000 | ||||||||||||||||||
Write-off of unamortized deferred financing cost | $ 11,000,000 | ||||||||||||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term Loan Facility | |||||||||||||||||||
DEBT | |||||||||||||||||||
Redemption of outstanding principal of long term debt | $ 16,000,000 | ||||||||||||||||||
Write-off of unamortized deferred financing cost | $ 2,000,000 | ||||||||||||||||||
Maximum permitted debt payment allowed at a given time | $ 500,000,000 | ||||||||||||||||||
Prepayment premium (as a percent) | 1.00% | ||||||||||||||||||
Consent fees | $ 1,000,000 | ||||||||||||||||||
Loss on extinguishment & modification of debt | 3,000,000 | ||||||||||||||||||
Write-off of financing fees and other costs | $ 1,000,000 | ||||||||||||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term Loan Facility | Maximum | |||||||||||||||||||
DEBT | |||||||||||||||||||
Consolidated Total Leverage Ratio | 3 | ||||||||||||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-1 Loans due 2021 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Payment of debt | $ 100,000,000 | $ 200,000,000 | $ 100,000,000 | $ 200,000,000 | |||||||||||||||
Loss on extinguishment of debt | 2,000,000 | $ 5,000,000 | |||||||||||||||||
Write-off of unamortized deferred financing cost | $ 1,000,000 | ||||||||||||||||||
Aggregate principal amount | $ 842,000,000 | $ 842,000,000 | |||||||||||||||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | ||||||||||||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-2 Loans due 2023 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Aggregate principal amount | 550,000,000 | $ 550,000,000 | |||||||||||||||||
Consolidated Total Leverage Ratio | 3 | ||||||||||||||||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | ||||||||||||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-3 Loans due 2021 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Aggregate principal amount | 535,000,000 | ||||||||||||||||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | 1.00% | |||||||||||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-4 Loans due 2023 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Aggregate principal amount | $ 546,000,000 | ||||||||||||||||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | 1.00% | |||||||||||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Senior ABL Facility due 2022 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Remaining borrowing capacity | $ 909,000,000 | $ 909,000,000 | |||||||||||||||||
Loss on extinguishment of debt | $ 1,000,000 | ||||||||||||||||||
Write-off of unamortized deferred financing cost | $ 1,000,000 | ||||||||||||||||||
Aggregate principal amount | $ 1,000,000,000 | $ 1,000,000,000 | |||||||||||||||||
Unsecured debt | HDS (Debt Issuer) | 5.75% April 2016 Senior Unsecured Notes due 2024 | |||||||||||||||||||
DEBT | |||||||||||||||||||
Interest rate, stated rate (as a percent) | 7.00% | 5.75% | 5.75% | 5.75% | 5.75% | ||||||||||||||
Aggregate principal amount | $ 1,000,000,000 | ||||||||||||||||||
Maximum permitted debt payment allowed at a given time | $ 500,000,000 | ||||||||||||||||||
Consent fees | 15,000,000 | ||||||||||||||||||
Loss on extinguishment & modification of debt | $ 3,000,000 | ||||||||||||||||||
Unsecured debt | HDS (Debt Issuer) | 5.75% April 2016 Senior Unsecured Notes due 2024 | Maximum | |||||||||||||||||||
DEBT | |||||||||||||||||||
Consolidated Total Leverage Ratio | 3 |
DEBT - Gross Long-term Debt - O
DEBT - Gross Long-term Debt - Outstanding Principal - Tabular Disclosure (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
DEBT | ||
Total gross long-term debt | $ 2,136 | $ 3,859 |
Secured debt | HDS (Debt Issuer) | 5.25% December 2014 Secured First Priority Notes due 2021 | ||
DEBT | ||
Total gross long-term debt | 1,250 | |
Secured debt | HDS (Debt Issuer) | Credit facility | Senior ABL Facility due 2022 | ||
DEBT | ||
Total gross long-term debt | 58 | 421 |
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-1 Loans due 2021 | ||
DEBT | ||
Total gross long-term debt | 639 | |
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-2 Loans due 2023 | ||
DEBT | ||
Total gross long-term debt | 549 | |
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-3 Loans due 2021 | ||
DEBT | ||
Total gross long-term debt | 534 | |
Secured debt | HDS (Debt Issuer) | Credit facility | Term B-4 Loans due 2023 | ||
DEBT | ||
Total gross long-term debt | 544 | |
Unsecured debt | HDS (Debt Issuer) | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||
DEBT | ||
Total gross long-term debt | $ 1,000 | $ 1,000 |
DEBT - Gross Long-term Debt - I
DEBT - Gross Long-term Debt - Interest Rate - Tabular Disclosure (Details) - HDS (Debt Issuer) | Jan. 28, 2018 | Sep. 01, 2017 | Aug. 25, 2017 | Jan. 29, 2017 | Apr. 11, 2016 |
Secured debt | 5.25% December 2014 Secured First Priority Notes due 2021 | |||||
DEBT | |||||
Interest rate, stated rate (as a percent) | 5.25% | 5.25% | 5.25% | ||
Secured debt | Credit facility | Senior ABL Facility due 2022 | |||||
DEBT | |||||
Interest rate, rate at end of period (as a percent) | 2.86% | 2.38% | |||
Secured debt | Credit facility | Term B-1 Loans due 2021 | |||||
DEBT | |||||
Interest rate, rate at end of period (as a percent) | 3.75% | ||||
Secured debt | Credit facility | Term B-2 Loans due 2023 | |||||
DEBT | |||||
Interest rate, rate at end of period (as a percent) | 3.75% | ||||
Secured debt | Credit facility | Term B-3 Loans due 2021 | |||||
DEBT | |||||
Interest rate, rate at end of period (as a percent) | 3.94% | ||||
Secured debt | Credit facility | Term B-4 Loans due 2023 | |||||
DEBT | |||||
Interest rate, rate at end of period (as a percent) | 4.19% | ||||
Unsecured debt | 5.75% April 2016 Senior Unsecured Notes due 2024 | |||||
DEBT | |||||
Interest rate, stated rate (as a percent) | 5.75% | 7.00% | 5.75% | 5.75% |
DEBT - Total Net Long-term Debt
DEBT - Total Net Long-term Debt - Tabular Disclosure (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
DEBT | ||
Total gross long-term debt | $ 2,136 | $ 3,859 |
Less unamortized discount | (6) | (9) |
Less unamortized deferred financing costs | (29) | (38) |
Total net long-term debt | $ 2,101 | $ 3,812 |
DEBT - Total Long-term Debt, Ex
DEBT - Total Long-term Debt, Excluding Current Installments - Tabular Disclosure (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
DEBT | ||
Total net long-term debt | $ 2,101 | $ 3,812 |
Less current installments | (11) | (14) |
Total net long-term debt, excluding current installments | $ 2,090 | $ 3,798 |
DEBT - Asset Based Lending Faci
DEBT - Asset Based Lending Facility (Details) - HDS (Debt Issuer) - Senior ABL Facility due 2022 $ in Millions | 12 Months Ended | |
Jan. 28, 2018USD ($)facility | Dec. 28, 2017USD ($) | |
DEBT | ||
Line of credit facility, additional available for borrowing | $ 1,000 | |
Secured debt | Credit facility | ||
DEBT | ||
Aggregate principal amount | $ 1,000 | |
Line of credit facility, additional available for borrowing | 909 | |
Letter of credit facility outstanding | 27 | |
Line of credit facility, available for borrowing on qualifying cash balances | $ 235 | |
The minimum number of incremental term loan facilities permitted to be included in the Senior ABL Facility | facility | 1 | |
The minimum number of revolving credit facility commitments permitted to be included in the Senior ABL Facility | facility | 1 | |
Borrowing capacity including all incremental commitments | $ 1,400 | |
Collateral pledged, percentage outstanding capital of any foreign subsidiary | 65.00% | |
Excess availability amount that requires maintaining a fixed charge coverage ratio | $ 100 | |
Percentage of lower of the borrowings base and the total facility commitments that requires maintaining a fixed charge coverage ratio | 10.00% | |
Required fixed charge coverage ratio in event of Liquidity Event | 1 |
DEBT - Senior Secured Term Loan
DEBT - Senior Secured Term Loan Facility (Details) - HDS (Debt Issuer) - Secured debt - Credit facility - USD ($) $ in Millions | Aug. 13, 2015 | Aug. 12, 2015 | Jan. 28, 2018 | Aug. 31, 2017 | May 03, 2015 |
Term Loans Facility due 2021 | |||||
DEBT | |||||
Remaining aggregate principal amount | $ 1,081 | ||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | ||||
Collateral pledged, percentage outstanding capital of any foreign subsidiary | 65.00% | ||||
Term Loan Facility | |||||
DEBT | |||||
Excess cash flow provisions, prepayment offered | $ 0 | $ 34 | |||
Term B-3 Loans due 2021 | |||||
DEBT | |||||
Remaining aggregate principal amount | $ 535 | ||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | ||||
Percentage of prepayment premium | 1.00% | ||||
Mandatory principal prepayments from net proceeds from asset sales and insurance recovery, percentage | 100.00% | ||||
Term B-4 Loans due 2023 | |||||
DEBT | |||||
Remaining aggregate principal amount | $ 546 | ||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | ||||
Mandatory principal prepayments from net proceeds from asset sales and insurance recovery, percentage | 100.00% | ||||
LIBOR | Term Loans Facility due 2021 | |||||
DEBT | |||||
Percentage added to reference rate (as a percent) | 2.75% | 3.00% | |||
LIBOR | Term B-3 Loans due 2021 | |||||
DEBT | |||||
Percentage added to reference rate (as a percent) | 2.25% | ||||
LIBOR | Term B-4 Loans due 2023 | |||||
DEBT | |||||
Percentage added to reference rate (as a percent) | 2.50% | ||||
Base | Term Loans Facility due 2021 | |||||
DEBT | |||||
Percentage added to reference rate (as a percent) | 1.75% | 2.00% | |||
Base | Term B-3 Loans due 2021 | |||||
DEBT | |||||
Percentage added to reference rate (as a percent) | 1.25% | ||||
Base | Term B-4 Loans due 2023 | |||||
DEBT | |||||
Percentage added to reference rate (as a percent) | 1.50% | ||||
Minimum | Term B-3 Loans due 2021 | |||||
DEBT | |||||
Mandatory principal prepayment based on attainment of certain secured leverage ratio targets, target percentage | 0.00% | ||||
Minimum | Term B-4 Loans due 2023 | |||||
DEBT | |||||
Mandatory principal prepayment based on attainment of certain secured leverage ratio targets, target percentage | 0.00% | ||||
Maximum | Term B-3 Loans due 2021 | |||||
DEBT | |||||
Mandatory principal prepayment based on attainment of certain secured leverage ratio targets, target percentage | 50.00% | ||||
Maximum | Term B-4 Loans due 2023 | |||||
DEBT | |||||
Mandatory principal prepayment based on attainment of certain secured leverage ratio targets, target percentage | 50.00% |
DEBT - 5.25% Senior Secured Fir
DEBT - 5.25% Senior Secured First Priority Notes due 2021 (Details) | Jan. 28, 2018 | Sep. 01, 2017 | Jan. 29, 2017 |
Secured debt | HDS (Debt Issuer) | 5.25% December 2014 Secured First Priority Notes due 2021 | |||
DEBT | |||
Note issued, interest rate | 5.25% | 5.25% | 5.25% |
DEBT - 5.75% Senior Unsecured N
DEBT - 5.75% Senior Unsecured Notes due 2024 (Details) - Unsecured debt - USD ($) $ in Millions | 12 Months Ended | |||
Jan. 28, 2018 | Aug. 25, 2017 | Jan. 29, 2017 | Apr. 11, 2016 | |
Prior to April 15, 2019 | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Threshold percentage for debt that must remain after each redemption | 50.00% | |||
HDS (Debt Issuer) | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Remaining aggregate principal amount | $ 1,000 | |||
Interest rate, stated rate (as a percent) | 5.75% | 7.00% | 5.75% | 5.75% |
HDS (Debt Issuer) | 7.00% April 2019 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Interest rate, stated rate (as a percent) | 7.00% | |||
HDS (Debt Issuer) | Prior to April 15, 2019 | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Optional prepayment price percentage | 100.00% | |||
Percentage limit on amount that can be redeemed | 40.00% | |||
Prepayment percentage price as a percent of the principal, with proceeds from certain equity offerings | 105.75% | |||
HDS (Debt Issuer) | 2019 | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Optional prepayment price percentage | 104.313% | |||
HDS (Debt Issuer) | 2020 | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Optional prepayment price percentage | 102.875% | |||
HDS (Debt Issuer) | 2021 | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Optional prepayment price percentage | 101.438% | |||
HDS (Debt Issuer) | 2022 and thereafter | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||
DEBT | ||||
Optional prepayment price percentage | 100.00% |
DEBT - Maturities of Long-term
DEBT - Maturities of Long-term Debt Outstanding (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Maturities of long-term debt outstanding | ||
2,018 | $ 11 | |
2,019 | 11 | |
2,020 | 11 | |
2,021 | 523 | |
2,022 | 63 | |
Thereafter | 1,517 | |
Total | $ 2,136 | $ 3,859 |
DEBT - Fiscal 2016 Transactions
DEBT - Fiscal 2016 Transactions (Details) $ in Millions | Aug. 31, 2017USD ($) | Aug. 25, 2017 | Apr. 18, 2017USD ($) | Jan. 26, 2017USD ($) | Oct. 17, 2016USD ($) | Oct. 14, 2016USD ($) | Apr. 27, 2016USD ($) | Apr. 11, 2016USD ($) | Jan. 28, 2018USD ($) | Oct. 29, 2017USD ($) | Jul. 30, 2017USD ($) | Apr. 30, 2017USD ($) | Oct. 30, 2016USD ($) | May 01, 2016USD ($) | Jan. 28, 2018USD ($) | Jan. 29, 2017USD ($) |
DEBT | ||||||||||||||||
Loss on extinguishment of debt | $ 3 | $ 78 | $ 49 | $ 3 | $ 59 | $ 115 | ||||||||||
Unamortized original issue discount | 6 | $ 6 | $ 9 | |||||||||||||
Unamortized deferred financing costs | $ 29 | $ 29 | $ 38 | |||||||||||||
Unsecured debt | HDS (Debt Issuer) | 7.5% February 2013 Unsecured Notes due 2020 | ||||||||||||||||
DEBT | ||||||||||||||||
Loss on extinguishment of debt | $ 59 | |||||||||||||||
Debt redeemed | $ 1,275 | |||||||||||||||
Interest rate, stated rate (as a percent) | 7.50% | |||||||||||||||
Make-whole premium payment to redeem notes | $ 48 | |||||||||||||||
Make-whole premium | 48 | |||||||||||||||
Write-off of unamortized deferred financing cost | $ 11 | |||||||||||||||
Unsecured debt | HDS (Debt Issuer) | 5.75% April 2016 Senior Unsecured Notes due 2024 | ||||||||||||||||
DEBT | ||||||||||||||||
Aggregate principal amount | $ 1,000 | |||||||||||||||
Interest rate, stated rate (as a percent) | 7.00% | 5.75% | 5.75% | 5.75% | 5.75% | |||||||||||
Net proceeds | $ 985 | |||||||||||||||
Unamortized Debt issuance Expense | $ 15 | |||||||||||||||
Unsecured debt | HDS (Debt Issuer) | 5.75% April 2016 Senior Unsecured Notes due 2024 | Maximum | ||||||||||||||||
DEBT | ||||||||||||||||
Consolidated Total Leverage Ratio | 3 | |||||||||||||||
Unsecured debt | HDS (Debt Issuer) | 11.5% October 2012 Unsecured Notes due 2020 | ||||||||||||||||
DEBT | ||||||||||||||||
Loss on extinguishment of debt | $ 115 | |||||||||||||||
Debt redeemed | $ 1,000 | |||||||||||||||
Interest rate, stated rate (as a percent) | 11.50% | |||||||||||||||
Make-whole premium payment to redeem notes | $ 106 | |||||||||||||||
Accrued but unpaid interest | 4 | |||||||||||||||
Make-whole premium | 106 | |||||||||||||||
Write-off of unamortized deferred financing cost | $ 9 | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term Loan Facility | ||||||||||||||||
DEBT | ||||||||||||||||
Write-off of unamortized deferred financing cost | $ 2 | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term Loan Facility | Maximum | ||||||||||||||||
DEBT | ||||||||||||||||
Consolidated Total Leverage Ratio | 3 | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term B-1 Loans due 2021 | ||||||||||||||||
DEBT | ||||||||||||||||
Payment of debt | $ 100 | $ 200 | $ 100 | $ 200 | ||||||||||||
Loss on extinguishment of debt | 2 | 5 | ||||||||||||||
Unamortized original issue discount | 2 | |||||||||||||||
Unamortized deferred financing costs | $ 3 | |||||||||||||||
Aggregate principal amount | $ 842 | $ 842 | ||||||||||||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | |||||||||||||||
Write-off of unamortized deferred financing cost | $ 1 | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term B-1 Loans due 2021 | LIBOR | ||||||||||||||||
DEBT | ||||||||||||||||
Percentage added to reference rate (as a percent) | 2.75% | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term B-1 Loans due 2021 | Base | ||||||||||||||||
DEBT | ||||||||||||||||
Percentage added to reference rate (as a percent) | 1.75% | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term B-2 Loans due 2023 | ||||||||||||||||
DEBT | ||||||||||||||||
Aggregate principal amount | $ 550 | $ 550 | ||||||||||||||
Consolidated Total Leverage Ratio | 3 | |||||||||||||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term B-2 Loans due 2023 | LIBOR | ||||||||||||||||
DEBT | ||||||||||||||||
Percentage added to reference rate (as a percent) | 2.75% | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term B-2 Loans due 2023 | LIBOR | Minimum | ||||||||||||||||
DEBT | ||||||||||||||||
Percentage added to reference rate (as a percent) | 2.50% | |||||||||||||||
Credit facility | Secured debt | HDS (Debt Issuer) | Term B-2 Loans due 2023 | Base | ||||||||||||||||
DEBT | ||||||||||||||||
Percentage added to reference rate (as a percent) | 1.75% |
DEBT - Fiscal 2015 Transactions
DEBT - Fiscal 2015 Transactions - (Details) - USD ($) $ in Millions | Oct. 13, 2015 | Aug. 13, 2015 | Aug. 12, 2015 | Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Oct. 30, 2016 | May 01, 2016 | Jan. 29, 2017 |
DEBT | ||||||||||
Loss on extinguishment of debt | $ (3) | $ (78) | $ (49) | $ (3) | $ (59) | $ (115) | ||||
Unamortized deferred financing costs | $ 29 | $ 38 | ||||||||
Secured debt | HDS (Debt Issuer) | 11% April 2012 Senior Secured Second Priority Notes due 2020 | ||||||||||
DEBT | ||||||||||
Debt redeemed | $ 675 | |||||||||
Interest rate, stated rate (as a percent) | 11.00% | |||||||||
Make-whole premium payment to redeem notes | $ 72 | |||||||||
Accrued but unpaid interest | 37 | |||||||||
Loss on extinguishment of debt | (80) | |||||||||
Unamortized deferred financing costs | $ 8 | |||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term Loans Facility due 2021 | ||||||||||
DEBT | ||||||||||
Aggregate amount | $ 850 | |||||||||
Amortization of debt, aggregate annual amounts as a percentage of original principal amount (as a percent) | 1.00% | |||||||||
Modification and extinguishment charges | $ 20 | |||||||||
Financing and other costs | 5 | |||||||||
Write-off of unamortized discount and deferred financing costs | $ 15 | |||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term Loans Facility due 2021 | Base | ||||||||||
DEBT | ||||||||||
Percentage added to reference rate (as a percent) | 1.75% | 2.00% | ||||||||
Secured debt | HDS (Debt Issuer) | Credit facility | Term Loans Facility due 2021 | LIBOR | ||||||||||
DEBT | ||||||||||
Percentage added to reference rate (as a percent) | 2.75% | 3.00% | ||||||||
Floor rate (as a percent) | 1.00% | 1.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Recorded Amount | ||
Financial instruments not reflected at fair value on the balance sheet | ||
Senior ABL Facility | $ 58 | $ 421 |
Term Loans and Notes | 2,078 | 3,438 |
Total | 2,136 | 3,859 |
Estimated Fair Value | Level 2 | ||
Financial instruments not reflected at fair value on the balance sheet | ||
Senior ABL Facility | 57 | 410 |
Term Loans and Notes | 2,158 | 3,572 |
Total | $ 2,215 | $ 3,982 |
INCOME TAXES - Tax Cuts and Job
INCOME TAXES - Tax Cuts and Jobs (Details) - USD ($) $ in Millions | 12 Months Ended | 13 Months Ended | |||
Feb. 03, 2019 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | Jan. 28, 2018 | |
Federal statutory rate | 33.90% | 35.00% | 35.00% | 35.00% | |
Re-measurement of deferred tax assets and liabilities | $ 72 | ||||
Forecast | |||||
Federal statutory rate | 21.00% |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income (Loss) from Continuing Operations before Provision (Benefits) for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Components of Income (Loss) from Continuing Operations before Provision (Benefit) for Income Taxes | |||
United States | $ 352 | $ 112 | $ 21 |
Foreign | 8 | 5 | 9 |
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | $ 360 | $ 117 | $ 30 |
INCOME TAXES - Provision (Benef
INCOME TAXES - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Current: | |||
Federal | $ 5 | $ (1) | $ (165) |
State | 3 | 1 | (12) |
Foreign | 2 | 5 | 4 |
Current Income Tax Expense (Benefit), Total | 10 | 5 | (173) |
Deferred: | |||
Federal | 186 | 41 | (905) |
State | (3) | 5 | (93) |
Foreign | 1 | ||
Total | 183 | 46 | (997) |
Total provision (benefit) | $ 193 | $ 51 | $ (1,170) |
INCOME TAXES - Tax Rates (Detai
INCOME TAXES - Tax Rates (Details) - USD ($) $ in Millions | 12 Months Ended | 13 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | Jan. 28, 2018 | |
INCOME TAXES | ||||
Combined federal, state and foreign effective tax rate for continuing operations (benefit) | 53.60% | 43.60% | ||
Federal statutory rate | 33.90% | 35.00% | 35.00% | 35.00% |
Actual tax provision (benefit) | 33.90% | |||
Effective rate repatriation | $ 72 | |||
Current earnings and profits, and foreign withholding taxes | $ 4 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Reconciliation of the provision (benefit) for income taxes from continuing operations at the federal statutory rate | |||
Income taxes at federal statutory rate | $ 122 | $ 41 | $ 7 |
State income taxes, net of federal income tax benefit | 13 | 5 | 4 |
Foreign rate differential | (1) | (1) | (1) |
Legal entity restructuring | 1 | 14 | |
Valuation allowance | 1 | (1) | (1,007) |
Adjustments to tax reserves | (1) | 2 | (189) |
Tax Cuts and Jobs Act of 2017 | 72 | ||
Excess tax benefits related to stock-based compensation | (16) | ||
Other, net | 3 | 4 | 2 |
Total provision (benefit) | $ 193 | $ 51 | $ (1,170) |
INCOME TAXES - Tax Effects of T
INCOME TAXES - Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets, Net (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Deferred Tax Assets: | ||
Accrued compensation | $ 10 | $ 23 |
Accrued self-insurance liabilities | 9 | 18 |
Other accrued liabilities | 14 | 21 |
Restructuring liabilities | 6 | 18 |
Net operating loss carryforward | 239 | 660 |
Fixed assets | 2 | 10 |
Allowance for doubtful accounts | 3 | 6 |
Inventory | 22 | 35 |
Tax credit carryforward | 38 | 19 |
Other | 3 | 4 |
Valuation allowance | (7) | (5) |
Noncurrent deferred tax assets | 339 | 809 |
Deferred Tax Liabilities: | ||
Prepaid expense | (1) | (1) |
Deferred financing costs | (23) | (5) |
Software costs | (5) | (11) |
Intangible assets | (95) | (205) |
Income from discharge of indebtedness | (10) | (31) |
Noncurrent deferred tax liabilities | (134) | (253) |
Deferred tax assets (liabilities), net | $ 205 | $ 556 |
INCOME TAXES - Foreign Operatio
INCOME TAXES - Foreign Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
INCOME TAXES | |||
One-time mandatory tax | $ 1 | ||
Deferred foreign payable period | 8 years | ||
Cash and property repatriated | $ 72 | $ 92 | |
Income tax expense | $ 4 | $ 10 |
INCOME TAXES - Net Operating Lo
INCOME TAXES - Net Operating Loss Carryforwards (Details) $ in Millions | Jan. 29, 2017USD ($) |
Domestic tax authority | IRS | |
Net operating loss carryforwards | |
Tax-effected net operating loss carry forward | $ 166 |
State | |
Net operating loss carryforwards | |
Tax-effected net operating loss carry forward | $ 85 |
INCOME TAXES - Capital Loss Car
INCOME TAXES - Capital Loss Carryforward (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Tax Fiscal Year 2017 to 2021 | ||
Capital loss carryforward | ||
Federal alternative minimum tax credit refundable percentage | 50.00% | |
Tax Year Beginning In 2021 | ||
Capital loss carryforward | ||
Federal alternative minimum tax credit refundable percentage | 100.00% | |
State | ||
Capital loss carryforward | ||
Tax credit carry forward | $ 5 | |
IRS | Alternative minimum tax credits | Domestic tax authority | ||
Capital loss carryforward | ||
Tax credit carry forward | 30 | |
IRS | Research and development tax credit carryforward | Domestic tax authority | ||
Capital loss carryforward | ||
Tax credit carry forward | $ 4 |
INCOME TAXES - Valuation Allowa
INCOME TAXES - Valuation Allowance (Details) - USD ($) $ in Millions | Jan. 30, 2017 | Jan. 31, 2016 | Jan. 28, 2018 | Jan. 29, 2017 |
Valuation allowance | ||||
Deferred tax assets used to offset current year income | $ 20 | |||
Deferred tax assets, valuation allowance | $ 7 | $ 5 | ||
Cumulative-effect adjustment to retained earnings | 56 | |||
Excess tax benefit on stock-based compensation expense | 16 | |||
ASU No. 2016-09 | ||||
Valuation allowance | ||||
Cumulative-effect adjustment to retained earnings | $ 56 | 56 | ||
Excess tax benefit on stock-based compensation expense | 16 | |||
U.S. | ||||
Valuation allowance | ||||
Change in valuation allowance, expense (benefit) | (1,007) | |||
Deferred tax assets, valuation allowance | $ 6 | |||
U.S. | Continuing Operations | ||||
Valuation allowance | ||||
Change in valuation allowance, expense (benefit) | $ 1 |
INCOME TAXES - Windfall Tax Ben
INCOME TAXES - Windfall Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 29, 2017 | Jan. 31, 2016 | |
INCOME TAXES | ||
Windfall not reflected in deferred tax assets | $ 56 | $ 48 |
INCOME TAXES - Net Income Tax E
INCOME TAXES - Net Income Tax Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Net income tax expense (benefit) | |||
Net income tax expense (benefit) | $ 193 | $ 51 | $ (1,170) |
Discontinued Operation | |||
Net income tax expense (benefit) | |||
Net income tax expense (benefit) | $ 240 | 159 | |
Discontinued Operation | Waterworks business | |||
Net income tax expense (benefit) | |||
Net income tax expense (benefit) | $ 87 | 86 | |
Discontinued Operation | Power Solutions | |||
Net income tax expense (benefit) | |||
Net income tax expense (benefit) | $ 73 |
INCOME TAXES - Net Current Rece
INCOME TAXES - Net Current Receivable (Payable) (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
INCOME TAXES | ||
Federal, state and foreign income taxes net current receivable | $ 8 | $ 7 |
INCOME TAXES - Reconciliation94
INCOME TAXES - Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Reconciliation of beginning and ending amount of unrecognized tax benefits | |||
Unrecognized Tax Benefits beginning of period | $ 10 | $ 9 | $ 187 |
Gross increases for tax positions in current period | 6 | 1 | |
Gross increases for tax positions in prior period | 1 | 5 | |
Gross decreases for tax positions in prior period | (2) | ||
Settlements | (181) | ||
Lapse of statutes | (1) | ||
Unrecognized Tax Benefits end of period | $ 16 | $ 10 | $ 9 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefits and Interest and Penalties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 31, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | |
INCOME TAXES | |||
Accrued net interest and penalties related to unrecognized tax benefits | $ (29) | ||
Net accrual for interest and penalties related to unrecognized tax benefits | $ 0 | $ 0 | $ 0 |
INCOME TAXES - Resolution of Fe
INCOME TAXES - Resolution of Federal and State Tax Examinations (Details) $ in Millions | 12 Months Ended |
Jan. 31, 2016USD ($) | |
INCOME TAXES | |
Income tax benefit | $ 189 |
STOCK-BASED COMPENSATION AND 97
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Stock-Based Compensation Plans (Details) - Plan shares in Millions | 12 Months Ended |
Jan. 28, 2018shares | |
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | |
Number of shares available for issuance (in shares) | 15.3 |
Shares registered for issuance (in shares) | 6.9 |
Authorized share ratio | 2.30 |
Authorized share return ratio | 1 |
STOCK-BASED COMPENSATION AND 98
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Employee Stock Purchase Plan (Details) - ESPP | 12 Months Ended | ||
Jan. 28, 2018periodshares | Jan. 29, 2017shares | Jan. 31, 2016shares | |
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS | |||
Discount on the closing stock price (as a percent) | 5.00% | ||
Number of offering periods | period | 2 | ||
Offering period (in years) | 6 months | ||
Number of shares purchased by eligible associates (in shares) | 105,000 | 96,000 | 117,000 |
Number of shares available for issuance (in shares) | 1,600,000 |
STOCK-BASED COMPENSATION AND 99
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Stock Options - General Disclosures (Details) - Stock options | 12 Months Ended |
Jan. 28, 2018 | |
Stock Options | |
Expiration period (in years) | 10 years |
Options vesting at a rate of 25% per year commencing on the first anniversary date of the grant | |
Stock Options | |
Vesting rate (as a percent) | 25.00% |
Vesting period (in years) | 1 year |
Options vesting at a rate of 100% commencing on the third anniversary date of the grant | |
Stock Options | |
Vesting rate (as a percent) | 100.00% |
Vesting period (in years) | 3 years |
STOCK-BASED COMPENSATION AND100
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Stock Option Activity (Details) - Stock options - $ / shares shares in Thousands | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Number of Shares | |||
Outstanding, beginning balance (in shares) | 4,163 | 4,737 | 10,439 |
Granted (in shares) | 920 | 1,362 | 0 |
Exercised (in shares) | (2,308) | (1,782) | (5,647) |
Forfeited (in shares) | (356) | (154) | (55) |
Outstanding, ending balance (in shares) | 2,419 | 4,163 | 4,737 |
Weighted Average Option Price | |||
Outstanding, beginning balance (in dollars per share) | $ 19.42 | $ 15.95 | $ 14.08 |
Granted (in dollars per share) | 42.34 | 28.22 | |
Exercised (in dollars per share) | 16.45 | 16.44 | 12.50 |
Forfeited (in dollars per share) | 34.43 | 24.83 | 15.28 |
Outstanding, ending balance (in dollars per share) | $ 28.77 | $ 19.42 | $ 15.95 |
STOCK-BASED COMPENSATION AND101
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Stock Options - Additional Disclosures (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | Feb. 01, 2015 | |
Stock Options | ||||
Total intrinsic value of options exercised | $ 51 | $ 33 | $ 110 | |
Options outstanding (in shares) | 2,419 | 4,163 | 4,737 | 10,439 |
Options outstanding, weighted average remaining life (in years) | 7 years | |||
Options outstanding, aggregate intrinsic value | $ 29 | |||
Options exercisable (in shares) | 900 | |||
Options exercisable, weighted average exercise price (in dollars per share) | $ 17.99 | |||
Options exercisable, weighted average remaining life (in years) | 4 years 7 months 6 days | |||
Options exercisable, aggregate intrinsic value | $ 20 | |||
Options vested or expected to ultimately vest (in shares) | 2,100 | |||
Options vested or expected to ultimately vest, weighted average exercise price (in dollars per share) | $ 27.57 | |||
Options vested or expected to ultimately vest, weighted average remaining life (in years) | 6 years 9 months 18 days | |||
Options vested or expected to ultimately vest, aggregate intrinsic value | $ 27 |
STOCK-BASED COMPENSATION AND102
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Stock Options - Weighted Average Assumptions (Details) - Stock options | 12 Months Ended | |
Jan. 28, 2018 | Jan. 29, 2017 | |
Weighted-average assumptions | ||
Risk-free interest rate (as a percent) | 2.08% | 1.54% |
Dividend yield (as a percent) | 0.00% | 0.00% |
Expected volatility factor (as a percent) | 29.80% | 36.20% |
Expected option life in years | 6 years 3 months | 6 years 3 months |
STOCK-BASED COMPENSATION AND103
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Stock Options - Additional General Disclosures (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Stock Options | |||
Number of options granted (in shares) | 920 | 1,362 | 0 |
Option granted, weighted-average fair value (in dollars per share) | $ 14.30 | ||
Stock-based compensation expense | $ 5 | $ 5 | $ 5 |
Stock options, unamortized compensation expense | $ 14 | ||
Unamortized stock-based compensation expense, recognition period (in years) | 2 years 7 months 6 days |
STOCK-BASED COMPENSATION AND104
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Restricted Stock and Restricted Stock Units - General Disclosures (Details) | 12 Months Ended |
Jan. 28, 2018 | |
RSAs | Employees | |
Restricted Stock and Restricted Stock Units | |
Vesting period (in years) | 4 years |
RSAs | Board member | |
Restricted Stock and Restricted Stock Units | |
Vesting period (in years) | 1 year |
RSUs | Employees | |
Restricted Stock and Restricted Stock Units | |
Vesting period (in years) | 5 years |
STOCK-BASED COMPENSATION AND105
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Restricted Stock and Restricted Stock Units Activity (Details) - RSAs and RSUs - $ / shares shares in Thousands | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Number of Shares | |||
Non-vested, beginning balance (in shares) | 1,550 | 1,731 | 1,605 |
Granted (in shares) | 464 | 590 | 1,147 |
Vested (in shares) | (644) | (539) | (440) |
Forfeited (in shares) | (301) | (232) | (581) |
Non-vested, ending balance (in shares) | 1,069 | 1,550 | 1,731 |
Weighted Average Grant Date Fair Value | |||
Non-vested, beginning balance (in dollars per shares) | $ 27.07 | $ 26.08 | $ 23.32 |
Granted (in dollars per share) | 41.50 | 28.46 | 29.05 |
Vested (in dollars per share) | 27.51 | 26.03 | 23.59 |
Forfeited (in dollars per share) | 31.39 | 27.33 | 26.02 |
Non-vested, ending balance (in dollars per shares) | $ 32.02 | $ 27.07 | $ 26.08 |
STOCK-BASED COMPENSATION AND106
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Restricted Stock and Restricted Stock Units - Additional Disclosures (Details) - RSAs and RSUs - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Restricted Stock and Restricted Stock Units | |||
Fair value of RSAs and RSUs | $ 18 | $ 16 | $ 13 |
Stock-based compensation expense | 20 | $ 15 | $ 11 |
Stock-based compensation expense expected to be recorded over the vesting period | $ 19 | ||
Unamortized stock-based compensation expense, recognition period (in years) | 1 year 6 months |
STOCK-BASED COMPENSATION AND107
STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS - Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Employee Benefit Plans | |||
Defined contribution plan, annual matching contribution paid | $ 17 | $ 17 | $ 19 |
BASIC AND DILUTED WEIGHTED A108
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES - Reconciliation of Basic to Diluted Weighted Average Common Shares (Details) - shares shares in Thousands | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Reconciliation of basic to diluted weighted-average common shares | |||
Weighted-average common shares outstanding | 192,236 | 199,385 | 197,011 |
Effect of potentially dilutive stock plan securities | 1,432 | 2,615 | 4,297 |
Diluted weighted-average common shares outstanding | 193,668 | 202,000 | 201,308 |
BASIC AND DILUTED WEIGHTED A109
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES - Anti-dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Stock plan securities | |||
Anti-dilutive securities | |||
Stock plan securities excluded from dilution | 1,967 | 1,856 | 792 |
SUPPLEMENTAL BALANCE SHEET A110
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Receivables (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Receivables | ||
Trade receivables, net of allowance for doubtful accounts | $ 540 | $ 499 |
Vendor rebate receivables | 58 | 50 |
Other receivables | 14 | 10 |
Total receivables, net | $ 612 | $ 559 |
SUPPLEMENTAL BALANCE SHEET A111
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Property and Equipment (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Property and Equipment | ||
Property and equipment | $ 853 | $ 758 |
Less accumulated depreciation & amortization | (528) | (505) |
Property and equipment, net | 325 | 253 |
Land | ||
Property and Equipment | ||
Property and equipment | 11 | 11 |
Buildings and improvements | ||
Property and Equipment | ||
Property and equipment | 195 | 178 |
Transportation equipment | ||
Property and Equipment | ||
Property and equipment | 62 | 59 |
Furniture, fixtures and equipment | ||
Property and Equipment | ||
Property and equipment | 226 | 228 |
Capitalized software | ||
Property and Equipment | ||
Property and equipment | 236 | 235 |
Less accumulated depreciation & amortization | (209) | (205) |
Property and equipment, net | 27 | 30 |
Construction in progress | ||
Property and Equipment | ||
Property and equipment | $ 123 | $ 47 |
SUPPLEMENTAL BALANCE SHEET A112
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Build-to-Suit Lease (Details) $ in Millions | Jan. 28, 2018USD ($) |
Construction in progress | |
Build-to-Suit Lease | |
Build-to-suit assets in construction in progress | $ 86 |
Other long-term liabilities | |
Build-to-Suit Lease | |
Financial obligation of construction in progress | $ 86 |
SUPPLEMENTAL BALANCE SHEET A113
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Other Current Liabilities (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Other Current Liabilities | ||
Accrued interest | $ 21 | $ 30 |
Accrued non-income taxes | 27 | 30 |
Other | 90 | 92 |
Total other current liabilities | $ 138 | $ 152 |
SUPPLEMENTAL BALANCE SHEET A114
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | Apr. 18, 2017 | Jan. 26, 2017 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 |
Supplemental Cash Flow Information | |||||
Cash paid for interest | $ 159 | $ 296 | $ 397 | ||
Payment of debt issuance cost | 26 | 19 | 6 | ||
Original issue discounts paid and PIK interest | 6 | 7 | 12 | ||
Cash paid for income taxes, net of refunds | 29 | 13 | $ 16 | ||
HDS (Debt Issuer) | Credit facility | Term B-1 Loans due 2021 | Secured debt | |||||
Supplemental Cash Flow Information | |||||
Payment of debt issuance cost | 6 | 7 | |||
Repayments of Debt | $ 100 | $ 200 | 100 | $ 200 | |
Waterworks | Sale of business | |||||
Supplemental Cash Flow Information | |||||
Amount paid in order to stop the accrual of interest on the Tentative Settlement amount | $ 13 |
SUPPLEMENTAL BALANCE SHEET A115
SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION - Stock Repurchase Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | Aug. 25, 2017 | Jun. 03, 2017 | |
Supplemental Cash Flow Information | |||||
Repurchase of common stock | $ 584 | $ 33 | $ 72 | ||
HD Supply, Inc. (Total HDS) | |||||
Supplemental Cash Flow Information | |||||
Equity cash distribution | $ 541 | ||||
Share Repurchase Program of June 2017 | Common Stock | |||||
Supplemental Cash Flow Information | |||||
Repurchase of common stock (in shares) | 15,940,337 | ||||
Repurchase of common stock | $ 500 | ||||
Share Repurchase Program of June 2017 | Common Stock | Maximum | |||||
Supplemental Cash Flow Information | |||||
Authorized share repurchase amount | $ 500 | ||||
Share Repurchase Program of August 2017 | Common Stock | |||||
Supplemental Cash Flow Information | |||||
Repurchase of common stock (in shares) | 1,150,699 | ||||
Repurchase of common stock | $ 41 | ||||
Share Repurchase Program of August 2017 | Common Stock | Maximum | |||||
Supplemental Cash Flow Information | |||||
Authorized share repurchase amount | $ 500 | ||||
Share Repurchase Program of 2017 and 2014 | Common Stock | |||||
Supplemental Cash Flow Information | |||||
Repurchase of common stock (in shares) | 18,236,626 | ||||
Repurchase of common stock | $ 584 |
RESTRUCTURING ACTIVITIES - Fisc
RESTRUCTURING ACTIVITIES - Fiscal 2017 Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Restructuring activities | |||
Restructuring charges | $ 6 | $ 7 | $ 8 |
Expected property lease obligations | 417 | ||
Sale of business | Fiscal 2017 Restructuring Plan | Waterworks | |||
Restructuring activities | |||
Restructuring charges | 6 | ||
Expected property lease obligations | 6 | ||
Sale of business | Fiscal 2017 Restructuring Plan | Waterworks | Other current liabilities | |||
Restructuring activities | |||
Liability balance for restructuring activities | 4 | ||
Sale of business | Fiscal 2017 Restructuring Plan | Waterworks | Minimum | |||
Restructuring activities | |||
Expected additional restructuring costs | $ 10 | ||
Payback period of the employee-related costs via a permanent reduction in personnel costs | 1 year | ||
Sale of business | Fiscal 2017 Restructuring Plan | Waterworks | Maximum | |||
Restructuring activities | |||
Expected additional restructuring costs | $ 15 | ||
Payback period of the employee-related costs via a permanent reduction in personnel costs | 2 years |
RESTRUCTURING ACTIVITIES - Rest
RESTRUCTURING ACTIVITIES - Restructuring Liability Activity (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Activity for the liability balances for restructuring | |||
Restructuring Charges | $ 6 | $ 7 | $ 8 |
Restructuring activities resulting from the sale of a business unit in October 2015 | |||
Activity for the liability balances for restructuring | |||
Restructuring Charges | 6 | ||
Cash payments | (2) | ||
Balance-January 28, 2018 | 4 | ||
Severance | Restructuring activities resulting from the sale of a business unit in October 2015 | |||
Activity for the liability balances for restructuring | |||
Restructuring Charges | 4 | ||
Cash payments | (1) | ||
Balance-January 28, 2018 | 3 | ||
Relocation & Other Costs | Restructuring activities resulting from the sale of a business unit in October 2015 | |||
Activity for the liability balances for restructuring | |||
Restructuring Charges | 2 | ||
Cash payments | (1) | ||
Balance-January 28, 2018 | $ 1 |
RESTRUCTURING ACTIVITIES - F118
RESTRUCTURING ACTIVITIES - Fiscal 2015 Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Restructuring activities | |||
Restructuring charges | $ 6 | $ 7 | $ 8 |
Power Solutions | Fiscal 2015 Restructuring Plan | Sale of business | |||
Restructuring activities | |||
Restructuring charges | 7 | $ 8 | |
Other current liabilities | Power Solutions | Fiscal 2015 Restructuring Plan | Sale of business | |||
Restructuring activities | |||
Liability balance for restructuring activities | $ 1 | $ 4 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Operating Lease Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Lease Commitments | |||
Operating lease expense | $ 127 | $ 118 | $ 107 |
COMMITMENTS AND CONTINGENCIE120
COMMITMENTS AND CONTINGENCIES - Future Minimum Aggregate Rental Payments (Details) $ in Millions | Jan. 28, 2018USD ($) |
Future minimum aggregate rental payments under non-cancelable operating leases | |
2,018 | $ 117 |
2,019 | 102 |
2,020 | 73 |
2,021 | 50 |
2,022 | 34 |
Thereafter | 41 |
Total | 417 |
Future minimum aggregate rental payments under non-cancelable build-to-suit leases | |
2,018 | 5 |
2,019 | 5 |
2,020 | 5 |
2,021 | 6 |
2,022 | 6 |
Thereafter | 100 |
Total | $ 127 |
COMMITMENTS AND CONTINGENCIE121
COMMITMENTS AND CONTINGENCIES - Subleases (Details) $ in Millions | Jan. 28, 2018USD ($) |
COMMITMENTS AND CONTINGENCIES | |
Future minimum rentals from subleases and leases to be received | $ 30 |
COMMITMENTS AND CONTINGENCIE122
COMMITMENTS AND CONTINGENCIES - Purchase Obligations (Details) $ in Millions | Jan. 28, 2018USD ($) |
Purchase obligations | |
Purchase obligations due during fiscal 2018 | $ 286 |
Purchase obligations due in fiscal 2018 | $ 281 |
COMMITMENTS AND CONTINGENCIE123
COMMITMENTS AND CONTINGENCIES - Legal Matters (Details) $ in Millions | Jan. 28, 2018USD ($) | Aug. 08, 2017complaint |
Legal Matters | ||
Number of shareholder derivative complaints | complaint | 2 | |
Minimum | ||
Legal Matters | ||
Estimated aggregate potential loss | $ 0 | |
Maximum | ||
Legal Matters | ||
Estimated aggregate potential loss | $ 10 |
SEGMENT INFORMATION - General I
SEGMENT INFORMATION - General Information (Details) | 12 Months Ended |
Jan. 28, 2018segment | |
SEGMENT INFORMATION | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Net Sales
SEGMENT INFORMATION - Net Sales for Each Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
SEGMENT INFORMATION | |||||||||||
Net sales | $ 1,183 | $ 1,370 | $ 1,352 | $ 1,216 | $ 1,085 | $ 1,275 | $ 1,283 | $ 1,176 | $ 5,121 | $ 4,819 | $ 4,615 |
Corporate & Eliminations | |||||||||||
SEGMENT INFORMATION | |||||||||||
Net sales | (5) | (6) | (7) | ||||||||
Facilities Maintenance | Reportable segment | |||||||||||
SEGMENT INFORMATION | |||||||||||
Net sales | 2,847 | 2,762 | 2,690 | ||||||||
Construction & Industrial | Reportable segment | |||||||||||
SEGMENT INFORMATION | |||||||||||
Net sales | $ 2,279 | $ 2,063 | $ 1,932 |
SEGMENT INFORMATION - Adjusted
SEGMENT INFORMATION - Adjusted EBITDA, Depreciation & Software Amortization, Other Intangible Amortization for Each Reportable Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
SEGMENT INFORMATION | |||
Adjusted EBITDA | $ 731 | $ 680 | $ 650 |
Depreciation & Software Amortization | 78 | 76 | 88 |
Other Intangible Amortization | 12 | 12 | 12 |
Facilities Maintenance | Reportable segment | |||
SEGMENT INFORMATION | |||
Adjusted EBITDA | 499 | 482 | 489 |
Depreciation & Software Amortization | 36 | 38 | 53 |
Other Intangible Amortization | 9 | 9 | 9 |
Construction & Industrial | Reportable segment | |||
SEGMENT INFORMATION | |||
Adjusted EBITDA | 232 | 198 | 161 |
Depreciation & Software Amortization | 42 | 38 | 35 |
Other Intangible Amortization | $ 3 | $ 3 | $ 3 |
SEGMENT INFORMATION - Total Ass
SEGMENT INFORMATION - Total Assets for Each Reportable Segment (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 |
SEGMENT INFORMATION | |||
Assets | $ 4,318 | $ 5,707 | $ 6,016 |
Corporate & Eliminations | |||
SEGMENT INFORMATION | |||
Assets | 1,051 | 2,541 | 2,870 |
Facilities Maintenance | Reportable segment | |||
SEGMENT INFORMATION | |||
Assets | 2,390 | 2,358 | 2,358 |
Construction & Industrial | Reportable segment | |||
SEGMENT INFORMATION | |||
Assets | $ 877 | $ 808 | $ 788 |
SEGMENT INFORMATION - Capital E
SEGMENT INFORMATION - Capital Expenditures for Each Reportable Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
SEGMENT INFORMATION | |||
Capital Expenditures | $ 94 | $ 81 | $ 86 |
Corporate & Eliminations | |||
SEGMENT INFORMATION | |||
Capital Expenditures | 38 | 27 | 32 |
Facilities Maintenance | Reportable segment | |||
SEGMENT INFORMATION | |||
Capital Expenditures | 22 | 22 | 20 |
Construction & Industrial | Reportable segment | |||
SEGMENT INFORMATION | |||
Capital Expenditures | $ 34 | $ 32 | $ 34 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation to Consolidated Financial Statements (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
SEGMENT INFORMATION | |||||||||||
Total Adjusted EBITDA | $ 731 | $ 680 | $ 650 | ||||||||
Depreciation and amortization | 90 | 88 | 100 | ||||||||
Stock-based compensation | 26 | 20 | 16 | ||||||||
Restructuring | 6 | 7 | 8 | ||||||||
Other | 1 | 1 | |||||||||
Operating Income | 608 | 565 | 525 | ||||||||
Interest expense | 166 | 269 | 394 | ||||||||
Interest (income) | $ (1) | $ (1) | (2) | ||||||||
Loss on extinguishment & modification of debt | 84 | 179 | 100 | ||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 360 | 117 | 30 | ||||||||
Provision (benefit) for income taxes | 193 | 51 | (1,170) | ||||||||
Income from Continuing Operations | $ (18) | $ 46 | $ 81 | $ 58 | $ 26 | $ 20 | $ 61 | $ (41) | $ 167 | $ 66 | $ 1,200 |
SEGMENT INFORMATION - Net Sa130
SEGMENT INFORMATION - Net Sales Outside the United States (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
Net sales | |||||||||||
Net sales | $ 1,183 | $ 1,370 | $ 1,352 | $ 1,216 | $ 1,085 | $ 1,275 | $ 1,283 | $ 1,176 | $ 5,121 | $ 4,819 | $ 4,615 |
Foreign | |||||||||||
Net sales | |||||||||||
Net sales | $ 146 | $ 124 | $ 124 |
SEGMENT INFORMATION - Long-live
SEGMENT INFORMATION - Long-lived Assets Outside the United States (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 |
Foreign | ||
Long-lived assets | ||
Long-lived assets | $ 6 | $ 5 |
GUARANTOR SUBSIDIARIES - Genera
GUARANTOR SUBSIDIARIES - General Information (Details) - HDS (Debt Issuer) $ in Millions | 12 Months Ended |
Jan. 28, 2018USD ($) | |
SUBSIDIARY GUARANTORS | |
Period of notice to the applicable trustee to cause subsidiary guarantor to be released from subsidiary guarantee | 30 days |
Equity distribution from subsidiaries | $ 541 |
GUARANTOR SUBSIDIARIES - CONDEN
GUARANTOR SUBSIDIARIES - CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | $ 1,183 | $ 1,370 | $ 1,352 | $ 1,216 | $ 1,085 | $ 1,275 | $ 1,283 | $ 1,176 | $ 5,121 | $ 4,819 | $ 4,615 |
Cost of sales | 3,088 | 2,894 | 2,801 | ||||||||
Gross Profit | 468 | 542 | 539 | 484 | 431 | 512 | 513 | 469 | 2,033 | 1,925 | 1,814 |
Operating expenses: | |||||||||||
Selling, general and administrative | 1,334 | 1,269 | 1,184 | ||||||||
Depreciation and amortization | 85 | 84 | 97 | ||||||||
Restructuring | 6 | 7 | 8 | ||||||||
Total operating expenses | 1,425 | 1,360 | 1,289 | ||||||||
Operating Income (Loss) | 608 | 565 | 525 | ||||||||
Interest expense | 166 | 269 | 394 | ||||||||
Interest (income) | (1) | (1) | (2) | ||||||||
Loss on extinguishment & modification of debt | 84 | 179 | 100 | ||||||||
Other (income) expense, net | 1 | ||||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 360 | 117 | 30 | ||||||||
Provision (benefit) for income taxes | 193 | 51 | (1,170) | ||||||||
Income from Continuing Operations | (18) | 46 | 81 | 58 | 26 | 20 | 61 | (41) | 167 | 66 | 1,200 |
Income from discontinued operations | 9 | 406 | 361 | 27 | 26 | 40 | 37 | 27 | 803 | 130 | 272 |
Net Income | $ (9) | $ 452 | $ 442 | $ 85 | $ 52 | $ 60 | $ 98 | $ (14) | 970 | 196 | 1,472 |
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | 968 | 197 | 1,484 | ||||||||
HD Supply, Inc. (Total HDS) | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | 5,121 | 4,819 | 4,615 | ||||||||
Cost of sales | 3,088 | 2,894 | 2,801 | ||||||||
Gross Profit | 2,033 | 1,925 | 1,814 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 1,334 | 1,269 | 1,184 | ||||||||
Depreciation and amortization | 85 | 84 | 97 | ||||||||
Restructuring | 6 | 7 | 8 | ||||||||
Total operating expenses | 1,425 | 1,360 | 1,289 | ||||||||
Operating Income (Loss) | 608 | 565 | 525 | ||||||||
Interest expense | 166 | 269 | 394 | ||||||||
Interest (income) | (2) | ||||||||||
Loss on extinguishment & modification of debt | 84 | 179 | 100 | ||||||||
Other (income) expense, net | 1 | ||||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 360 | 117 | 30 | ||||||||
Provision (benefit) for income taxes | 193 | 51 | (1,170) | ||||||||
Income from Continuing Operations | 167 | 66 | 1,200 | ||||||||
Income from discontinued operations | 803 | 130 | 272 | ||||||||
Net Income | 970 | 196 | 1,472 | ||||||||
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | 968 | 197 | 1,484 | ||||||||
Holdings | |||||||||||
Operating expenses: | |||||||||||
Net (earnings) loss of equity affiliates | (970) | (196) | (1,472) | ||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 970 | 196 | 1,472 | ||||||||
Income from Continuing Operations | 970 | 196 | 1,472 | ||||||||
Net Income | 970 | 196 | 1,472 | ||||||||
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | 968 | 197 | 1,484 | ||||||||
Reportable Legal Entities | HDS (Debt Issuer) | |||||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 78 | 78 | 76 | ||||||||
Depreciation and amortization | 16 | 13 | 15 | ||||||||
Restructuring | 3 | 6 | 2 | ||||||||
Total operating expenses | 97 | 97 | 93 | ||||||||
Operating Income (Loss) | (97) | (97) | (93) | ||||||||
Interest expense | 196 | 287 | 399 | ||||||||
Interest (income) | (133) | (140) | (139) | ||||||||
Net (earnings) loss of equity affiliates | (462) | (391) | (432) | ||||||||
Loss on extinguishment & modification of debt | 84 | 179 | 100 | ||||||||
Other (income) expense, net | 1 | ||||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 218 | (32) | (22) | ||||||||
Provision (benefit) for income taxes | (44) | (212) | (1,355) | ||||||||
Income from Continuing Operations | 262 | 180 | 1,333 | ||||||||
Income from discontinued operations | 708 | 16 | 139 | ||||||||
Net Income | 970 | 196 | 1,472 | ||||||||
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | 968 | 197 | 1,484 | ||||||||
Reportable Legal Entities | Subsidiary Guarantors | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | 4,982 | 4,699 | 4,496 | ||||||||
Cost of sales | 3,013 | 2,830 | 2,737 | ||||||||
Gross Profit | 1,969 | 1,869 | 1,759 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 1,202 | 1,143 | 1,064 | ||||||||
Depreciation and amortization | 68 | 69 | 81 | ||||||||
Restructuring | 3 | 1 | 6 | ||||||||
Total operating expenses | 1,273 | 1,213 | 1,151 | ||||||||
Operating Income (Loss) | 696 | 656 | 608 | ||||||||
Interest expense | 131 | 139 | 139 | ||||||||
Interest (income) | (32) | (18) | (6) | ||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 597 | 535 | 475 | ||||||||
Provision (benefit) for income taxes | 235 | 259 | 181 | ||||||||
Income from Continuing Operations | 362 | 276 | 294 | ||||||||
Income from discontinued operations | 92 | 114 | 125 | ||||||||
Net Income | 454 | 390 | 419 | ||||||||
Total Comprehensive Income | 454 | 390 | 419 | ||||||||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | 141 | 122 | 121 | ||||||||
Cost of sales | 77 | 65 | 65 | ||||||||
Gross Profit | 64 | 57 | 56 | ||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 54 | 49 | 45 | ||||||||
Depreciation and amortization | 1 | 2 | 1 | ||||||||
Total operating expenses | 55 | 51 | 46 | ||||||||
Operating Income (Loss) | 9 | 6 | 10 | ||||||||
Interest expense | 2 | 1 | 1 | ||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | 7 | 5 | 9 | ||||||||
Provision (benefit) for income taxes | 2 | 4 | 4 | ||||||||
Income from Continuing Operations | 5 | 1 | 5 | ||||||||
Income from discontinued operations | 3 | 8 | |||||||||
Net Income | 8 | 1 | 13 | ||||||||
Other comprehensive income (loss) - foreign currency translation adjustment | (2) | 1 | 12 | ||||||||
Total Comprehensive Income | 6 | 2 | 25 | ||||||||
Eliminations | |||||||||||
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net Sales | (2) | (2) | (2) | ||||||||
Cost of sales | (2) | (1) | (1) | ||||||||
Gross Profit | (1) | (1) | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | (1) | (1) | |||||||||
Total operating expenses | (1) | (1) | |||||||||
Interest expense | (163) | (158) | (145) | ||||||||
Interest (income) | 163 | 158 | 145 | ||||||||
Net (earnings) loss of equity affiliates | 462 | 391 | 432 | ||||||||
Income from Continuing Operations Before Provision (Benefit) for Income Taxes | (462) | (391) | (432) | ||||||||
Income from Continuing Operations | (462) | (391) | (432) | ||||||||
Net Income | (462) | (391) | (432) | ||||||||
Other comprehensive income (loss) - foreign currency translation adjustment | 2 | (1) | (12) | ||||||||
Total Comprehensive Income | $ (460) | $ (392) | $ (444) |
GUARANTOR SUBSIDIARIES - CON134
GUARANTOR SUBSIDIARIES - CONDENSED CONSOLIDATING BALANCE SHEETS (Details) - USD ($) $ in Millions | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | Feb. 01, 2015 | Feb. 02, 2014 |
Current assets: | |||||
Cash and cash equivalents | $ 558 | $ 75 | $ 269 | $ 85 | |
Receivables, net | 612 | 559 | |||
Inventories | 674 | 606 | |||
Current assets of discontinued operations | 575 | ||||
Other current assets | 31 | 32 | |||
Total current assets | 1,875 | 1,847 | |||
Property and equipment, net | 325 | 253 | |||
Goodwill | 1,807 | 1,807 | |||
Intangible assets, net | 91 | 102 | |||
Deferred tax asset | 205 | 556 | |||
Non-current assets of discontinued operations | 1,122 | ||||
Other assets | 15 | 20 | |||
Total assets | 4,318 | 5,707 | 6,016 | ||
Current liabilities: | |||||
Accounts payable | 377 | 320 | |||
Accrued compensation and benefits | 95 | 98 | |||
Current installments of long-term debt | 11 | 14 | |||
Current liabilities of discontinued operations | 259 | ||||
Other current liabilities | 138 | 152 | |||
Total current liabilities | 621 | 843 | |||
Long-term debt, excluding current installments | 2,090 | 3,798 | |||
Non-current liabilities of discontinued operations | 20 | ||||
Other liabilities | 141 | 86 | |||
Total liabilities | 2,852 | 4,747 | |||
Stockholders' equity (deficit) | 1,466 | 960 | 744 | (760) | |
Total liabilities and stockholders' equity | 4,318 | 5,707 | |||
HD Supply, Inc. (Total HDS) | |||||
Current assets: | |||||
Cash and cash equivalents | 558 | 73 | 266 | 85 | $ 85 |
Receivables, net | 612 | 559 | |||
Inventories | 674 | 606 | |||
Current assets of discontinued operations | 575 | ||||
Other current assets | 31 | 32 | |||
Total current assets | 1,875 | 1,845 | |||
Property and equipment, net | 325 | 253 | |||
Goodwill | 1,807 | 1,807 | |||
Intangible assets, net | 91 | 102 | |||
Deferred tax asset | 205 | 556 | |||
Non-current assets of discontinued operations | 1,122 | ||||
Other assets | 15 | 20 | |||
Total assets | 4,318 | 5,705 | |||
Current liabilities: | |||||
Accounts payable | 377 | 320 | |||
Accrued compensation and benefits | 95 | 98 | |||
Current installments of long-term debt | 11 | 14 | |||
Current liabilities of discontinued operations | 259 | ||||
Other current liabilities | 138 | 152 | |||
Total current liabilities | 621 | 843 | |||
Long-term debt, excluding current installments | 2,090 | 3,798 | |||
Non-current liabilities of discontinued operations | 20 | ||||
Other liabilities | 141 | 86 | |||
Total liabilities | 2,852 | 4,747 | |||
Stockholders' equity (deficit) | 1,466 | 958 | 742 | $ (760) | |
Total liabilities and stockholders' equity | 4,318 | 5,705 | |||
Holdings | |||||
Current assets: | |||||
Cash and cash equivalents | 2 | 3 | |||
Total current assets | 2 | ||||
Investment in subsidiaries | 1,466 | 958 | |||
Total assets | 1,466 | 960 | |||
Current liabilities: | |||||
Stockholders' equity (deficit) | 1,466 | 960 | |||
Total liabilities and stockholders' equity | 1,466 | 960 | |||
Reportable Legal Entities | HDS (Debt Issuer) | |||||
Current assets: | |||||
Cash and cash equivalents | 539 | 51 | 233 | 28 | |
Receivables, net | 7 | 3 | |||
Other current assets | 15 | 13 | |||
Total current assets | 561 | 67 | |||
Property and equipment, net | 152 | 76 | |||
Deferred tax asset | 264 | 681 | |||
Investment in subsidiaries | 2,811 | 2,451 | |||
Intercompany notes receivable | 1,005 | 2,192 | |||
Other assets | 12 | 16 | |||
Total assets | 4,805 | 5,483 | |||
Current liabilities: | |||||
Accounts payable | 11 | 13 | |||
Accrued compensation and benefits | 34 | 36 | |||
Current installments of long-term debt | 11 | 14 | |||
Current liabilities of discontinued operations | 2 | ||||
Other current liabilities | 43 | 52 | |||
Total current liabilities | 99 | 117 | |||
Long-term debt, excluding current installments | 2,032 | 3,737 | |||
Non-current liabilities of discontinued operations | 20 | ||||
Intercompany notes payable | 1,083 | 584 | |||
Other liabilities | 125 | 67 | |||
Total liabilities | 3,339 | 4,525 | |||
Stockholders' equity (deficit) | 1,466 | 958 | |||
Total liabilities and stockholders' equity | 4,805 | 5,483 | |||
Reportable Legal Entities | Subsidiary Guarantors | |||||
Current assets: | |||||
Cash and cash equivalents | 15 | 17 | 18 | 25 | |
Receivables, net | 584 | 540 | |||
Inventories | 654 | 588 | |||
Intercompany receivables | 2 | 1 | |||
Current assets of discontinued operations | 575 | ||||
Other current assets | 15 | 17 | |||
Total current assets | 1,270 | 1,738 | |||
Property and equipment, net | 170 | 175 | |||
Goodwill | 1,807 | 1,807 | |||
Intangible assets, net | 90 | 101 | |||
Non-current assets of discontinued operations | 1,122 | ||||
Intercompany notes receivable | 1,083 | 584 | |||
Other assets | 3 | 4 | |||
Total assets | 4,423 | 5,531 | |||
Current liabilities: | |||||
Accounts payable | 353 | 296 | |||
Accrued compensation and benefits | 57 | 60 | |||
Current liabilities of discontinued operations | 257 | ||||
Other current liabilities | 88 | 94 | |||
Total current liabilities | 498 | 707 | |||
Deferred tax liabilities | 61 | 127 | |||
Intercompany notes payable | 1,005 | 2,192 | |||
Other liabilities | 16 | 17 | |||
Total liabilities | 1,580 | 3,043 | |||
Stockholders' equity (deficit) | 2,843 | 2,488 | |||
Total liabilities and stockholders' equity | 4,423 | 5,531 | |||
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||||
Current assets: | |||||
Cash and cash equivalents | 4 | 5 | $ 15 | $ 32 | |
Receivables, net | 21 | 16 | |||
Inventories | 20 | 18 | |||
Other current assets | 1 | 2 | |||
Total current assets | 46 | 41 | |||
Property and equipment, net | 3 | 2 | |||
Intangible assets, net | 1 | 1 | |||
Deferred tax asset | 2 | 2 | |||
Total assets | 52 | 46 | |||
Current liabilities: | |||||
Accounts payable | 13 | 11 | |||
Accrued compensation and benefits | 4 | 2 | |||
Intercompany payables | 2 | 1 | |||
Other current liabilities | 7 | 6 | |||
Total current liabilities | 26 | 20 | |||
Long-term debt, excluding current installments | 58 | 61 | |||
Other liabilities | 2 | ||||
Total liabilities | 84 | 83 | |||
Stockholders' equity (deficit) | (32) | (37) | |||
Total liabilities and stockholders' equity | 52 | 46 | |||
Eliminations | |||||
Current assets: | |||||
Intercompany receivables | (2) | (1) | |||
Total current assets | (2) | (1) | |||
Deferred tax asset | (61) | (127) | |||
Investment in subsidiaries | (2,811) | (2,451) | |||
Intercompany notes receivable | (2,088) | (2,776) | |||
Total assets | (4,962) | (5,355) | |||
Current liabilities: | |||||
Intercompany payables | (2) | (1) | |||
Total current liabilities | (2) | (1) | |||
Deferred tax liabilities | (61) | (127) | |||
Intercompany notes payable | (2,088) | (2,776) | |||
Total liabilities | (2,151) | (2,904) | |||
Stockholders' equity (deficit) | (2,811) | (2,451) | |||
Total liabilities and stockholders' equity | $ (4,962) | $ (5,355) |
GUARANTOR SUBSIDIARIES - CON135
GUARANTOR SUBSIDIARIES - CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash flows from operating activities | $ 502 | $ 513 | $ 422 |
Cash flows from investing activities | |||
Capital expenditures | (94) | (81) | (86) |
Proceeds from sales of property and equipment | 2 | 32 | 3 |
Proceeds from sales of businesses, net | 2,421 | 28 | 809 |
Net cash provided by (used in) investing activities | 2,329 | (21) | 726 |
Cash flows from financing activities | |||
Proceeds from stock options exercised | 41 | 33 | 74 |
Purchase of treasury shares | (584) | (34) | (71) |
Borrowings of long-term debt | 113 | 1,547 | 287 |
Repayments of long-term debt | (1,529) | (2,631) | (1,152) |
Borrowings on long-term revolver | 628 | 689 | 784 |
Repayments on long-term revolver | (995) | (269) | (880) |
Debt issuance and modification fees | (26) | (19) | (6) |
Other financing activities | 4 | (3) | 2 |
Net cash provided by (used in) financing activities | (2,348) | (687) | (962) |
Effect of exchange rates on cash | 1 | (2) | |
Increase (decrease) in cash and cash equivalents | 483 | (194) | 184 |
Cash and cash equivalents at beginning of period | 75 | 269 | 85 |
Cash and cash equivalents at end of period | 558 | 75 | 269 |
HD Supply, Inc. (Total HDS) | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash flows from operating activities | 502 | 513 | 422 |
Cash flows from investing activities | |||
Capital expenditures | (94) | (81) | (86) |
Proceeds from sales of property and equipment | 2 | 32 | 3 |
Proceeds from sales of businesses, net | 2,421 | 28 | 809 |
Net cash provided by (used in) investing activities | 2,329 | (21) | 726 |
Cash flows from financing activities | |||
Equity contribution (return of capital) | 541 | ||
Borrowings of long-term debt | 113 | 1,547 | 287 |
Repayments of long-term debt | (1,529) | (2,631) | (1,152) |
Borrowings on long-term revolver | 628 | 689 | 784 |
Repayments on long-term revolver | (995) | (269) | (880) |
Debt issuance and modification fees | (26) | (19) | (6) |
Other financing activities | 4 | (3) | 2 |
Net cash provided by (used in) financing activities | (2,346) | (686) | (965) |
Effect of exchange rates on cash | 1 | (2) | |
Increase (decrease) in cash and cash equivalents | 485 | (193) | 181 |
Cash and cash equivalents at beginning of period | 73 | 266 | 85 |
Cash and cash equivalents at end of period | 558 | 73 | 266 |
Holdings | |||
Cash flows from financing activities | |||
Proceeds from stock options exercised | 41 | 33 | 74 |
Purchase of treasury shares | (584) | (34) | (71) |
Equity contribution (return of capital) | 541 | ||
Net cash provided by (used in) financing activities | (2) | (1) | 3 |
Increase (decrease) in cash and cash equivalents | (2) | (1) | 3 |
Cash and cash equivalents at beginning of period | 2 | 3 | |
Cash and cash equivalents at end of period | 2 | 3 | |
Reportable Legal Entities | HDS (Debt Issuer) | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash flows from operating activities | 429 | 524 | 329 |
Cash flows from investing activities | |||
Capital expenditures | (34) | (17) | (18) |
Proceeds from sales of businesses, net | 2,421 | 28 | 809 |
(Investments in) return of capital in equity affiliates | 71 | 34 | |
Net cash provided by (used in) investing activities | 2,387 | 82 | 825 |
Cash flows from financing activities | |||
Equity contribution (return of capital) | (541) | ||
Borrowings (repayments of) intercompany notes | 12 | (43) | 16 |
Borrowings of long-term debt | 113 | 1,547 | 287 |
Repayments of long-term debt | (1,529) | (2,631) | (1,152) |
Borrowings on long-term revolver | 621 | 629 | 784 |
Repayments on long-term revolver | (981) | (269) | (880) |
Debt issuance and modification fees | (26) | (19) | (6) |
Other financing activities | 3 | (2) | 2 |
Net cash provided by (used in) financing activities | (2,328) | (788) | (949) |
Increase (decrease) in cash and cash equivalents | 488 | (182) | 205 |
Cash and cash equivalents at beginning of period | 51 | 233 | |
Cash and cash equivalents at end of period | 539 | 51 | 233 |
Reportable Legal Entities | Subsidiary Guarantors | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash flows from operating activities | 67 | (12) | 75 |
Cash flows from investing activities | |||
Capital expenditures | (60) | (63) | (67) |
Proceeds from sales of property and equipment | 2 | 32 | 3 |
Proceeds from (payments of) intercompany notes | (12) | 43 | (16) |
Other investing activities | 1 | ||
Net cash provided by (used in) investing activities | (69) | 12 | (80) |
Cash flows from financing activities | |||
Equity contribution (return of capital) | (2) | ||
Other financing activities | (1) | ||
Net cash provided by (used in) financing activities | (1) | (2) | |
Increase (decrease) in cash and cash equivalents | (2) | (1) | (7) |
Cash and cash equivalents at beginning of period | 17 | 18 | |
Cash and cash equivalents at end of period | 15 | 17 | 18 |
Reportable Legal Entities | Non-Guarantor Subsidiaries | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net cash flows from operating activities | 6 | 1 | 18 |
Cash flows from investing activities | |||
Capital expenditures | (1) | (1) | |
Other investing activities | (1) | ||
Net cash provided by (used in) investing activities | (1) | (1) | (1) |
Cash flows from financing activities | |||
Equity contribution (return of capital) | (71) | (32) | |
Borrowings on long-term revolver | 7 | 60 | |
Repayments on long-term revolver | (14) | ||
Other financing activities | 1 | ||
Net cash provided by (used in) financing activities | (6) | (11) | (32) |
Effect of exchange rates on cash | 1 | (2) | |
Increase (decrease) in cash and cash equivalents | (1) | (10) | (17) |
Cash and cash equivalents at beginning of period | 5 | 15 | |
Cash and cash equivalents at end of period | 4 | 5 | 15 |
Eliminations | |||
Cash flows from investing activities | |||
(Investments in) return of capital in equity affiliates | (71) | (34) | |
Proceeds from (payments of) intercompany notes | 12 | (43) | 16 |
Net cash provided by (used in) investing activities | 12 | (114) | (18) |
Cash flows from financing activities | |||
Equity contribution (return of capital) | 71 | 34 | |
Borrowings (repayments of) intercompany notes | (12) | 43 | (16) |
Net cash provided by (used in) financing activities | $ (12) | $ 114 | $ 18 |
QUARTERLY FINANCIAL DATA (UN136
QUARTERLY FINANCIAL DATA (UNAUDITED) - Tabular Disclosure (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Jan. 29, 2017 | Oct. 30, 2016 | Jul. 31, 2016 | May 01, 2016 | Jan. 28, 2018 | Jan. 29, 2017 | Jan. 31, 2016 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||
Net sales | $ 1,183 | $ 1,370 | $ 1,352 | $ 1,216 | $ 1,085 | $ 1,275 | $ 1,283 | $ 1,176 | $ 5,121 | $ 4,819 | $ 4,615 |
Gross profit | 468 | 542 | 539 | 484 | 431 | 512 | 513 | 469 | 2,033 | 1,925 | 1,814 |
Income (loss) from continuing operations | (18) | 46 | 81 | 58 | 26 | 20 | 61 | (41) | 167 | 66 | 1,200 |
Income (loss) from discontinued operations | 9 | 406 | 361 | 27 | 26 | 40 | 37 | 27 | 803 | 130 | 272 |
Net income (loss) | $ (9) | $ 452 | $ 442 | $ 85 | $ 52 | $ 60 | $ 98 | $ (14) | $ 970 | $ 196 | $ 1,472 |
Basic earnings (loss) per share | |||||||||||
Income (loss) from continuing operations (in dollars per share) | $ (0.10) | $ 0.25 | $ 0.41 | $ 0.29 | $ 0.13 | $ 0.10 | $ 0.31 | $ (0.21) | $ 0.87 | $ 0.33 | $ 6.09 |
Income (loss) from discontinued operations(in dollar per share) | 0.05 | 2.19 | 1.83 | 0.13 | 0.13 | 0.20 | 0.19 | 0.14 | 4.18 | 0.65 | 1.38 |
Net income (loss) (in dollars per share) | (0.05) | 2.43 | 2.24 | 0.42 | 0.26 | 0.30 | 0.49 | (0.07) | 5.05 | 0.98 | 7.47 |
Diluted earnings (loss) per share | |||||||||||
Income (loss) from continuing operations (in dollars per share) | (0.10) | 0.25 | 0.41 | 0.29 | 0.13 | 0.10 | 0.30 | (0.21) | 0.86 | 0.33 | 5.96 |
Income (loss) from discontinued operations (in dollar per share) | 0.05 | 2.18 | 1.81 | 0.13 | 0.13 | 0.20 | 0.18 | 0.14 | 4.15 | 0.64 | 1.35 |
Net income (loss) (in dollars per share) | $ (0.05) | $ 2.42 | $ 2.22 | $ 0.42 | $ 0.26 | $ 0.30 | $ 0.49 | $ (0.07) | $ 5.01 | $ 0.97 | $ 7.31 |
QUARTERLY FINANCIAL DATA (UN137
QUARTERLY FINANCIAL DATA (UNAUDITED) - Extinguishment of Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Jan. 28, 2018 | Oct. 29, 2017 | Jul. 30, 2017 | Apr. 30, 2017 | Oct. 30, 2016 | May 01, 2016 | Jan. 28, 2018 | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||
Loss on extinguishment of debt | $ 3 | $ 78 | $ 49 | $ 3 | $ 59 | $ 115 | |
Interest income | $ 1 | $ 1 | $ 2 |
SUBSEQUENT EVENT (Details)
SUBSEQUENT EVENT (Details) $ in Millions | Mar. 05, 2018USD ($) |
A.H. Harris Construction Supply | Subsequent Event | |
SUBSEQUENT EVENT | |
Business acquisition, purchase price | $ 380 |