Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION CONDENSED CONSOLIDATING FINANCIAL INFORMATION

v3.4.0.3
CONDENSED CONSOLIDATING FINANCIAL INFORMATION CONDENSED CONSOLIDATING FINANCIAL INFORMATION
3 Months Ended
Apr. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
At April 30, 2016, the Company had outstanding $750.0 million principal amount of 5.25% Acquisition Notes due March 1, 2020 and $2,500.0 million principal amount of 5.75% Acquisition Notes due March 1, 2023, which are unsecured obligations of the Company and are also jointly and severally guaranteed on an unsecured, unsubordinated basis, subject to certain exceptions, by certain of the Company's direct or indirect wholly-owned U.S. subsidiaries, including Family Dollar and certain of its subsidiaries. All of the subsidiaries, guarantor and non-guarantor are 100% owned by the parent. Supplemental condensed consolidated financial information of the Company, including such information for the Guarantors, is presented below. The information is presented in accordance with the requirements of Rule 3-10 under Regulation S-X of the Securities and Exchange Commission (the "SEC"). The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the guarantor or the non-guarantor subsidiaries operated as independent entities. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the condensed consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups. The Company filed a registration statement on Form S-4 with the SEC on May 5, 2016 relating to an offer to exchange the Acquisition Notes for registered notes with substantially identical terms.
Condensed Consolidating Statements of Comprehensive Income
 
 
13 Weeks ended April 30, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
5,033.4

 
$
184.8

 
$
(132.4
)
 
$
5,085.8

Cost of sales
 

 
3,489.8

 
160.6

 
(119.2
)
 
3,531.2

Gross profit
 

 
1,543.6

 
24.2

 
(13.2
)
 
1,554.6

Selling, general and administrative expenses
 
2.0

 
1,138.0

 
14.6

 
(18.7
)
 
1,135.9

Operating (loss) income
 
(2.0
)
 
405.6

 
9.6

 
5.5

 
418.7

Interest expense, net
 
72.9

 
16.3

 
(1.9
)
 

 
87.3

Other (income) expense, net
 
(5.7
)
 
(0.3
)
 
(0.1
)
 
5.9

 
(0.2
)
Income (loss) before income taxes
 
(69.2
)
 
389.6

 
11.6

 
(0.4
)
 
331.6

Provision for income taxes
 
(33.7
)
 
129.2

 
3.5

 
(0.1
)
 
98.9

Equity in earnings of subsidiaries
 
(268.5
)
 
(6.9
)
 

 
275.4

 

Net income
 
233.0

 
267.3

 
8.1

 
(275.7
)
 
232.7

Other comprehensive income
 
8.9

 
2.7

 
8.9

 
(11.6
)
 
8.9

Comprehensive income
 
$
241.9

 
$
270.0

 
$
17.0

 
$
(287.3
)
 
$
241.6


Condensed Consolidating Statements of Comprehensive Income (Continued)
 
 
13 Weeks ended May 2, 2015
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
2,134.5

 
$
42.4

 
$
(0.2
)
 
$
2,176.7

Cost of sales
 

 
1,392.2

 
35.8

 
(0.2
)
 
1,427.8

Gross profit
 

 
742.3

 
6.6

 

 
748.9

Selling, general and administrative expenses
 
12.0

 
490.2

 
13.9

 

 
516.1

Operating (loss) income
 
(12.0
)
 
252.1

 
(7.3
)
 

 
232.8

Interest expense, net
 
111.0

 
11.2

 
0.1

 
(0.1
)
 
122.2

Other (income) expense, net
 

 
(3.1
)
 
0.4

 
0.1

 
(2.6
)
Income (loss) before income taxes
 
(123.0
)
 
244.0

 
(7.8
)
 

 
113.2

Provision for income taxes
 
(49.7
)
 
95.5

 
(2.1
)
 

 
43.7

Equity in earnings of subsidiaries
 
(142.8
)
 

 

 
142.8

 

Net income (loss)
 
69.5

 
148.5

 
(5.7
)
 
(142.8
)
 
69.5

Other comprehensive income
 
5.5

 

 
5.5

 
(5.5
)
 
5.5

Comprehensive income
 
$
75.0

 
$
148.5

 
$
(0.2
)
 
$
(148.3
)
 
$
75.0


Condensed Consolidated Balance Sheets
 
 
April 30, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
783.6

 
$
151.0

 
$
(4.9
)
 
$
929.7

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,872.0

 
49.9

 
7.6

 
2,929.5

Current deferred tax assets, net
 

 

 
8.1

 
(8.1
)
 

Due from intercompany, net
 
38.8

 
505.3

 
102.8

 
(646.9
)
 

Other current assets
 
0.4

 
313.2

 

 
(4.7
)
 
308.9

Total current assets
 
39.2

 
4,474.1

 
315.8

 
(657.0
)
 
4,172.1

Property, plant and equipment, net
 

 
3,114.9

 
38.3

 

 
3,153.2

Assets available for sale
 

 
11.7

 

 

 
11.7

Goodwill
 

 
4,993.1

 
31.8

 

 
5,024.9

Deferred tax assets, net
 
0.6

 

 

 
(0.6
)
 

Favorable lease rights, net
 

 
543.9

 

 

 
543.9

Tradename
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.4

 
0.2

 

 
5.6

Investment in subsidiaries
 
8,667.9

 
104.0

 

 
(8,771.9
)
 

Intercompany note receivable
 
1,526.4

 

 
188.8

 
(1,715.2
)
 

Due from intercompany, net
 
1,923.4

 

 

 
(1,923.4
)
 

Other assets
 

 
49.3

 
4.5

 
(4.3
)
 
49.5

Total assets
 
$
12,157.5

 
$
16,396.4

 
$
579.4

 
$
(13,072.4
)
 
$
16,060.9

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
120.5

 
$

 
$

 
$

 
$
120.5

Accounts payable
 
4.8

 
1,180.4

 
72.2

 
2.9

 
1,260.3

Due to intercompany, net
 
402.7

 
207.7

 
36.5

 
(646.9
)
 

Other current liabilities
 
34.6

 
387.9

 
204.7

 
(5.1
)
 
622.1

Income taxes payable
 
32.7

 
4.4

 
9.1

 

 
46.2

Total current liabilities
 
595.3

 
1,780.4

 
322.5

 
(649.1
)
 
2,049.1

Long-term debt, net, excluding current portion
 
6,892.6

 
317.2

 

 

 
7,209.8

Unfavorable lease rights, net
 

 
142.9

 

 

 
142.9

Deferred tax liabilities, net
 

 
1,574.8

 

 
(8.6
)
 
1,566.2

Income taxes payable, long-term
 

 
71.1

 

 

 
71.1

Due to intercompany, net
 

 
1,923.4

 

 
(1,923.4
)
 

Intercompany note payable
 

 
1,715.2

 

 
(1,715.2
)
 

Other liabilities
 

 
347.5

 
8.9

 
(4.2
)
 
352.2

Total liabilities
 
7,487.9

 
7,872.5

 
331.4

 
(4,300.5
)
 
11,391.3

Shareholders' equity
 
4,669.6

 
8,523.9

 
248.0

 
(8,771.9
)
 
4,669.6

Total liabilities and equity
 
$
12,157.5

 
$
16,396.4

 
$
579.4

 
$
(13,072.4
)
 
$
16,060.9


Condensed Consolidating Balance Sheets (Continued)
 
 
January 30, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
636.9

 
$
116.5

 
$
(17.3
)
 
$
736.1

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,850.0

 
51.4

 
(15.9
)
 
2,885.5

Due from intercompany, net
 
262.2

 
548.3

 
186.4

 
(996.9
)
 

Other current assets
 
1.0

 
308.7

 
0.6

 

 
310.3

Total current assets
 
263.2

 
4,343.9

 
358.9

 
(1,030.1
)
 
3,935.9

Property, plant and equipment, net
 

 
3,089.5

 
36.0

 

 
3,125.5

Assets available for sale
 

 
12.1

 

 

 
12.1

Goodwill
 

 
4,993.2

 
28.5

 

 
5,021.7

Deferred tax assets, net
 
0.5

 

 
9.6

 
(10.1
)
 

Favorable lease rights, net
 

 
569.4

 

 

 
569.4

Tradename
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.5

 
0.3

 

 
5.8

Investment in subsidiaries
 
8,403.9

 
74.4

 

 
(8,478.3
)
 

Intercompany note receivable
 
1,526.4

 

 
188.8

 
(1,715.2
)
 

Due from intercompany, net
 
1,930.3

 

 

 
(1,930.3
)
 

Other assets
 

 
130.6

 
4.6

 
(4.4
)
 
130.8

Total assets
 
$
12,124.3

 
$
16,318.6

 
$
626.7

 
$
(13,168.4
)
 
$
15,901.2

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
108.0

 
$

 
$

 
$

 
$
108.0

Accounts payable
 
17.5

 
1,136.3

 
131.2

 
(33.1
)
 
1,251.9

Due to intercompany, net
 
582.5

 
369.2

 
45.2

 
(996.9
)
 

Other current liabilities
 
84.9

 
433.5

 
204.2

 

 
722.6

Income taxes payable
 
3.8

 
1.9

 
7.2

 

 
12.9

Total current liabilities
 
796.7

 
1,940.9

 
387.8

 
(1,030.0
)
 
2,095.4

Long-term debt, net, excluding current portion
 
6,920.7

 
317.7

 

 

 
7,238.4

Unfavorable lease rights, net
 

 
149.3

 

 

 
149.3

Deferred tax liabilities, net
 

 
1,596.7

 

 
(10.1
)
 
1,586.6

Due to intercompany, net
 

 
1,930.3

 

 
(1,930.3
)
 

Intercompany note payable
 

 
1,715.2

 

 
(1,715.2
)
 

Other liabilities
 

 
421.0

 
8.0

 
(4.4
)
 
424.6

Total liabilities
 
7,717.4

 
8,071.1

 
395.8

 
(4,690.0
)
 
11,494.3

Shareholders' equity
 
4,406.9

 
8,247.5

 
230.9

 
(8,478.4
)
 
4,406.9

Total liabilities and equity
 
$
12,124.3

 
$
16,318.6

 
$
626.7

 
$
(13,168.4
)
 
$
15,901.2


Condensed Consolidating Balance Sheets (Continued)
 
 
May 2, 2015
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
56.9

 
$
809.8

 
$
3.7

 
$

 
$
870.4

Restricted cash
 
7,244.1

 

 

 

 
7,244.1

Merchandise inventories, net
 

 
1,056.1

 
37.4

 

 
1,093.5

Current deferred tax assets, net
 
4.1

 
15.6

 
0.1

 

 
19.8

Due from intercompany, net
 
134.8

 
7.2

 

 
(142.0
)
 

Intercompany note receivable
 
5.0

 

 

 
(5.0
)
 

Other current assets
 
0.4

 
103.3

 
5.2

 
(1.1
)
 
107.8

Total current assets
 
7,445.3

 
1,992.0

 
46.4

 
(148.1
)
 
9,335.6

Property, plant and equipment, net
 

 
1,182.6

 
43.4

 

 
1,226.0

Goodwill
 

 
133.3

 
32.8

 

 
166.1

Deferred tax assets, net
 
0.7

 
19.9

 
18.0

 

 
38.6

Favorable lease rights, net
 

 
0.2

 

 

 
0.2

Other intangible assets, net
 

 
0.2

 
0.9

 

 
1.1

Investment in subsidiaries
 
1,362.8

 

 

 
(1,362.8
)
 

Intercompany note receivable
 
416.8

 

 

 
(416.8
)
 

Other assets
 

 
101.4

 
0.2

 

 
101.6

Total assets
 
$
9,225.6

 
$
3,429.6

 
$
141.7

 
$
(1,927.7
)
 
$
10,869.2

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Intercompany note payable, current
 
$

 
$

 
$
5.0

 
$
(5.0
)
 
$

Accounts payable
 
2.2

 
504.9

 
9.6

 
(1.1
)
 
515.6

Due to intercompany, net
 
7.2

 
134.8

 

 
(142.0
)
 

Other current liabilities
 
256.3

 
214.3

 
3.7

 

 
474.3

Income taxes payable
 
22.4

 
2.9

 

 

 
25.3

Total current liabilities
 
288.1

 
856.9

 
18.3

 
(148.1
)
 
1,015.2

Long-term debt, net, excluding current portion
 
7,066.7

 
753.0

 

 

 
7,819.7

Intercompany note payable
 

 
416.8

 

 
(416.8
)
 

Other liabilities
 

 
154.4

 
9.1

 

 
163.5

Total liabilities
 
7,354.8

 
2,181.1

 
27.4

 
(564.9
)
 
8,998.4

Shareholders' equity
 
1,870.8

 
1,248.5

 
114.3

 
(1,362.8
)
 
1,870.8

Total liabilities and equity
 
$
9,225.6

 
$
3,429.6

 
$
141.7

 
$
(1,927.7
)
 
$
10,869.2


Condensed Consolidating Statements of Cash Flows
 
 
13 Weeks ended April 30, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net cash provided by operating activities
 
$
24.8

 
$
238.9

 
$
34.9

 
$
12.4

 
$
311.0

Cash flows from investing activities:
 
 

 
 

 
 
 
 
 
 
Capital expenditures
 

 
(175.3
)
 
(0.6
)
 

 
(175.9
)
Purchase of restricted investments
 

 
(36.1
)
 

 

 
(36.1
)
Proceeds from sale of restricted investments
 

 
118.1

 

 

 
118.1

Other
 

 
1.1

 

 

 
1.1

Net cash used in investing activities
 

 
(92.2
)
 
(0.6
)
 

 
(92.8
)
Cash flows from financing activities:
 
 

 
 

 
 
 
 
 
 
Principal payments for long-term debt
 
(20.8
)
 

 

 

 
(20.8
)
Other
 
(4.0
)
 

 

 

 
(4.0
)
Net cash used in financing activities
 
(24.8
)
 

 

 

 
(24.8
)
Effect of exchange rate changes on cash and cash equivalents
 

 

 
0.2

 

 
0.2

Net increase in cash and cash equivalents
 

 
146.7

 
34.5

 
12.4

 
193.6

Cash and cash equivalents at beginning of period
 

 
636.9

 
116.5

 
(17.3
)
 
736.1

Cash and cash equivalents at end of period
 
$

 
$
783.6

 
$
151.0

 
$
(4.9
)
 
$
929.7


Condensed Consolidating Statements of Cash Flows (continued)
 
 
13 Weeks ended May 2, 2015
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net cash provided by (used in) operating activities
 
$
(54.1
)
 
$
210.6

 
$
(6.1
)
 
$

 
$
150.4

Cash flows from investing activities:
 
 

 
 

 
 
 
 
 
 
Capital expenditures
 

 
(65.1
)
 
(1.8
)
 

 
(66.9
)
Increase in restricted cash
 
(7,244.1
)
 

 

 

 
(7,244.1
)
Net cash used in investing activities
 
(7,244.1
)
 
(65.1
)
 
(1.8
)
 

 
(7,311.0
)
Cash flows from financing activities:
 
 

 
 

 
 
 
 
 
 
Proceeds from long-term debt, net of discount
 
7,180.2

 

 

 

 
7,180.2

Net intercompany note activity
 
(5.0
)
 

 
5.0

 

 

Debt-issuance costs
 
(5.2
)
 

 

 

 
(5.2
)
Cash paid for taxes on exercises/vesting of stock-based compensation
 
(20.6
)
 

 

 

 
(20.6
)
Other
 
12.2

 

 

 

 
12.2

Net cash provided by financing activities
 
7,161.6

 

 
5.0

 

 
7,166.6

Effect of exchange rate changes on cash and cash equivalents
 

 

 
0.3

 

 
0.3

Net (decrease) increase in cash and cash equivalents
 
(136.6
)
 
145.5

 
(2.6
)
 

 
6.3

Cash and cash equivalents at beginning of period
 
193.5

 
664.3

 
6.3

 

 
864.1

Cash and cash equivalents at end of period
 
$
56.9

 
$
809.8

 
$
3.7

 
$

 
$
870.4