Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

v3.7.0.1
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
3 Months Ended
Apr. 29, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
At April 29, 2017, 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 fully, unconditionally, 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 completed the exchange of the Acquisition Notes for registered notes with substantially identical terms on August 1, 2016.
Condensed Consolidating Statements of Comprehensive Income
 
 
13 Weeks Ended April 29, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
5,247.4

 
$
68.7

 
$
(29.0
)
 
$
5,287.1

Cost of sales
 

 
3,631.7

 
39.1

 
(10.8
)
 
3,660.0

Gross profit
 

 
1,615.7

 
29.6

 
(18.2
)
 
1,627.1

Selling, general and administrative
   expenses
 
1.4

 
1,222.0

 
33.0

 
(18.1
)
 
1,238.3

Operating income (loss)
 
(1.4
)
 
393.7

 
(3.4
)
 
(0.1
)
 
388.8

Interest expense (income), net
 
57.5

 
19.1

 
(1.9
)
 

 
74.7

Other (income) expense, net
 

 

 
0.3

 

 
0.3

Income (loss) before income taxes
 
(58.9
)
 
374.6

 
(1.8
)
 
(0.1
)
 
313.8

Income tax expense (benefit)
 
(27.4
)
 
140.2

 
0.5

 

 
113.3

Equity in earnings of subsidiaries
 
(232.0
)
 
0.1

 

 
231.9

 

Net income
 
200.5

 
234.3

 
(2.3
)
 
(232.0
)
 
200.5

Other comprehensive loss
 
(3.0
)
 
(0.9
)
 
(3.0
)
 
3.9

 
(3.0
)
Comprehensive income
 
$
197.5

 
$
233.4

 
$
(5.3
)
 
$
(228.1
)
 
$
197.5

 
 
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 income (loss)
 
(2.0
)
 
405.6

 
9.6

 
5.5

 
418.7

Interest expense (income), net
 
72.9

 
16.3

 
(1.9
)
 

 
87.3

Other income, 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

Income tax expense (benefit)
 
(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 Balance Sheets
 
 
April 29, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
468.4

 
$
519.1

 
$
167.4

 
$

 
$
1,154.9

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,838.8

 
41.2

 
(1.6
)
 
2,878.4

Current deferred tax assets, net
 

 
(8.2
)
 
8.2

 

 

Due from intercompany, net
 
90.2

 
1,081.6

 
18.2

 
(1,190.0
)
 

Other current assets
 
0.7

 
234.1

 
4.3

 
1.7

 
240.8

Total current assets
 
559.3

 
4,665.4

 
243.3

 
(1,189.9
)
 
4,278.1

Property, plant and equipment, net
 

 
3,066.6

 
27.3

 

 
3,093.9

Assets available for sale
 

 
10.6

 

 

 
10.6

Goodwill
 

 
4,993.1

 
29.3

 

 
5,022.4

Favorable lease rights, net
 

 
443.4

 

 

 
443.4

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.0

 

 

 
5.0

Investment in subsidiaries
 
8,873.4

 
105.4

 

 
(8,978.8
)
 

Intercompany note receivable
 
1,926.4

 

 
188.8

 
(2,115.2
)
 

Due from intercompany, net
 
1,215.9

 

 

 
(1,215.9
)
 

Other assets
 

 
41.1

 
3.2

 
(3.0
)
 
41.3

Total assets
 
$
12,575.0

 
$
16,430.6

 
$
491.9

 
$
(13,502.8
)
 
$
15,994.7

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
165.9

 
$

 
$

 
$

 
$
165.9

Accounts payable
 

 
1,213.9

 
10.0

 

 
1,223.9

Due to intercompany, net
 
878.7

 
277.6

 
33.7

 
(1,190.0
)
 

Other current liabilities
 
13.1

 
405.1

 
211.3

 

 
629.5

Income taxes payable
 
90.5

 
130.6

 
0.2

 

 
221.3

Total current liabilities
 
1,148.2

 
2,027.2

 
255.2

 
(1,190.0
)
 
2,240.6

Long-term debt, net, excluding
   current portion
 
5,815.9

 
315.8

 

 

 
6,131.7

Unfavorable lease rights, net
 

 
117.6

 

 

 
117.6

Deferred tax liabilities, net
 
1.9

 
1,431.7

 

 

 
1,433.6

Income taxes payable, long-term
 

 
71.8

 

 

 
71.8

Due to intercompany, net
 

 
1,215.9

 

 
(1,215.9
)
 

Intercompany note payable
 

 
2,115.2

 

 
(2,115.2
)
 

Other liabilities
 

 
385.5

 
7.8

 
(2.9
)
 
390.4

Total liabilities
 
6,966.0

 
7,680.7

 
263.0

 
(4,524.0
)
 
10,385.7

Shareholders' equity
 
5,609.0

 
8,749.9

 
228.9

 
(8,978.8
)
 
5,609.0

Total liabilities and equity
 
$
12,575.0

 
$
16,430.6

 
$
491.9

 
$
(13,502.8
)
 
$
15,994.7

Condensed Consolidating Balance Sheets (Continued)
 
 
January 28, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
562.4

 
$
139.2

 
$
164.8

 
$

 
$
866.4

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,826.3

 
41.2

 
(1.7
)
 
2,865.8

Current deferred tax assets, net
 

 
(9.3
)
 
9.3

 

 

Due from intercompany, net
 
58.7

 
1,041.5

 
42.8

 
(1,143.0
)
 

Other current assets
 
0.5

 
198.7

 
2.3

 
0.3

 
201.8

Total current assets
 
621.6

 
4,196.4

 
264.4

 
(1,144.4
)
 
3,938.0

Property, plant and equipment, net
 

 
3,085.3

 
30.5

 

 
3,115.8

Assets available for sale
 

 
9.0

 

 

 
9.0

Goodwill
 

 
4,993.1

 
30.4

 

 
5,023.5

Favorable lease rights, net
 

 
468.6

 

 

 
468.6

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.1

 

 

 
5.1

Investment in subsidiaries
 
8,640.1

 
106.6

 

 
(8,746.7
)
 

Intercompany note receivable
 
1,926.4

 

 
188.8

 
(2,115.2
)
 

Due from intercompany, net
 
1,243.8

 

 

 
(1,243.8
)
 

Other assets
 

 
41.3

 
3.3

 
(3.0
)
 
41.6

Total assets
 
$
12,431.9

 
$
16,005.4

 
$
517.4

 
$
(13,253.1
)
 
$
15,701.6

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
152.1

 
$

 
$

 
$

 
$
152.1

Accounts payable
 

 
1,105.9

 
14.7

 
(1.0
)
 
1,119.6

Due to intercompany, net
 
969.6

 
121.5

 
51.9

 
(1,143.0
)
 

Other current liabilities
 
66.4

 
470.5

 
207.3

 

 
744.2

Income taxes payable
 
(1.9
)
 
91.0

 
0.9

 

 
90.0

Total current liabilities
 
1,186.2

 
1,788.9

 
274.8

 
(1,144.0
)
 
2,105.9

Long-term debt, net, excluding
   current portion
 
5,853.9

 
315.8

 

 

 
6,169.7

Unfavorable lease rights, net
 

 
124.0

 

 

 
124.0

Deferred tax liabilities, net
 
2.0

 
1,456.9

 

 

 
1,458.9

Income taxes payable, long-term
 

 
71.2

 

 

 
71.2

Due to intercompany, net
 

 
1,243.8

 

 
(1,243.8
)
 

Intercompany note payable
 

 
2,115.2

 

 
(2,115.2
)
 

Other liabilities
 

 
377.5

 
8.1

 
(3.2
)
 
382.4

Total liabilities
 
7,042.1

 
7,493.3

 
282.9

 
(4,506.2
)
 
10,312.1

Shareholders' equity
 
5,389.8

 
8,512.1

 
234.5

 
(8,746.9
)
 
5,389.5

Total liabilities and equity
 
$
12,431.9

 
$
16,005.4

 
$
517.4

 
$
(13,253.1
)
 
$
15,701.6

Condensed Consolidating Balance Sheets (Continued)
 
 
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 intangible asset
 

 
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 Statements of Cash Flows
 
 
13 Weeks Ended April 29, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net cash provided by (used in) operating
   activities
 
$
(60.4
)
 
$
515.5

 
$
3.4

 
$
(27.8
)
 
$
430.7

Cash flows from investing activities:
 
 

 
 

 
 
 
 
 
 
Capital expenditures
 

 
(110.0
)
 
(0.3
)
 

 
(110.3
)
Other
 

 
2.2

 

 

 
2.2

Net cash used in investing activities
 

 
(107.8
)
 
(0.3
)
 

 
(108.1
)
Cash flows from financing activities:
 
 

 
 

 
 
 
 
 
 
Principal payments for long-term debt
 
(27.8
)
 

 

 

 
(27.8
)
Dividends paid
 

 
(27.8
)
 

 
27.8

 

Proceeds from stock issued pursuant to
   stock-based compensation plans
 
11.8

 

 

 

 
11.8

Cash paid for taxes on exercises/vesting of
   stock-based compensation
 
(17.6
)
 

 

 

 
(17.6
)
Net cash provided by (used in)
   financing activities
 
(33.6
)
 
(27.8
)
 

 
27.8

 
(33.6
)
Effect of exchange rate changes on cash and
   cash equivalents
 

 

 
(0.5
)
 


 
(0.5
)
Net (decrease) increase in cash and cash
   equivalents
 
(94.0
)
 
379.9

 
2.6

 

 
288.5

Cash and cash equivalents at beginning of
   period
 
562.4

 
139.2

 
164.8

 

 
866.4

Cash and cash equivalents at end of period
 
$
468.4

 
$
519.1

 
$
167.4

 
$

 
$
1,154.9

Condensed Consolidating Statements of Cash Flows (continued)
 
 
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