Annual report pursuant to Section 13 and 15(d)

Condensed Consolidated Financial Information

v2.4.1.9
Condensed Consolidated Financial Information
12 Months Ended
Jan. 31, 2015
Condensed Consolidated Financial Information  
Condensed Consolidated Financial Information

14. CONDENSED CONSOLIDATED FINANCIAL INFORMATION

 

Our debt covenants restrict MSI, and certain subsidiaries of MSI, from various activities including the incurrence of additional debt, payment of dividends and the repurchase of MSI’s capital stock (subject to certain exceptions), among other things.  The following condensed consolidated financial information represents the financial information of MSI and its wholly-owned subsidiaries.  The information is presented in accordance with the requirements of Rule 12-04 under the SEC’s Regulation S-X. In addition, disclosure requirements of Rule 12-04 of Regulation S-X regarding material contingencies and long-term obligations are included in Note 5. Debt, Note 6. Leases, Note 7. Income Taxes and Note 11. Contingencies, where applicable.

 

Michaels Stores, Inc.

Condensed Consolidated Balance Sheets

(in millions)

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

    

2014

    

2013

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and equivalents

 

$

374 

 

$

234 

 

Merchandise inventories

 

 

958 

 

 

901 

 

Prepaid expense and other

 

 

85 

 

 

95 

 

Receivable from parent

 

 

 —

 

 

 

Deferred income taxes

 

 

38 

 

 

39 

 

Income tax receivables

 

 

 

 

 

Total current assets

 

 

1,457 

 

 

1,273 

 

Property and equipment, net

 

 

386 

 

 

358 

 

Goodwill

 

 

94 

 

 

94 

 

Debt issuance costs, net

 

 

38 

 

 

37 

 

Deferred income taxes

 

 

20 

 

 

28 

 

Long-term receivable from Parent

 

 

 

 

 

Other assets

 

 

 

 

 

Total assets

 

$

2,002 

 

$

1,801 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

447 

 

$

368 

 

Accrued liabilities and other

 

 

389 

 

 

377 

 

Current portion of long-term debt

 

 

25 

 

 

16 

 

Dividend payable to Holdings

 

 

 —

 

 

30 

 

Deferred income taxes

 

 

 —

 

 

 

Income taxes payable

 

 

60 

 

 

42 

 

Total current liabilities

 

 

921 

 

 

834 

 

Long-term debt

 

 

2,943 

 

 

2,878 

 

Deferred income taxes

 

 

 

 

 

Other liabilities

 

 

93 

 

 

88 

 

Total stockholders’ deficit

 

 

(1,964)

 

 

(2,001)

 

Total liabilities and stockholders’ deficit

 

$

2,002 

 

$

1,801 

 

 

Michaels Stores, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

 

2014

    

2013

    

2012

 

Net sales

 

$

4,738 

 

$

4,570 

 

$

4,408 

 

Cost of sales and occupancy expense

 

 

2,837 

 

 

2,748 

 

 

2,643 

 

Gross profit

 

 

1,901 

 

 

1,822 

 

 

1,765 

 

Selling, general and administrative

 

 

1,217 

 

 

1,169 

 

 

1,132 

 

Share-based compensation

 

 

14 

 

 

23 

 

 

15 

 

Related party expenses

 

 

35 

 

 

14 

 

 

13 

 

Store pre-opening costs

 

 

 

 

 

 

 

Impairment of intangible assets

 

 

 —

 

 

 —

 

 

 

Operating income

 

 

630 

 

 

611 

 

 

592 

 

Interest expense

 

 

155 

 

 

183 

 

 

245 

 

Losses on early extinguishments of debt and refinancing costs

 

 

56 

 

 

14 

 

 

33 

 

Other expense and (income), net

 

 

 

 

 

 

(1)

 

Income before income taxes

 

 

416 

 

 

412 

 

 

315 

 

Provision for income taxes

 

 

157 

 

 

148 

 

 

115 

 

Net income

 

$

259 

 

$

264 

 

$

200 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment and other

 

 

(12)

 

 

(6)

 

 

 —

 

Comprehensive income

 

$

247 

 

$

258 

 

$

200 

 

 

Michaels Stores, Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fiscal Year

 

 

 

2014

    

2013

    

2012

 

Cash flows provided by operating activities:

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

521 

 

$

468 

 

$

299 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows used in investing activities:

 

 

 

 

 

 

 

 

 

 

Additions to property and equipment

 

 

(138)

 

 

(112)

 

 

(124)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

Net repayments of debt

 

 

(1,101)

 

 

(805)

 

 

(2,632)

 

Net borrowings of debt

 

 

1,124 

 

 

649 

 

 

2,175 

 

Payment of dividend to Holdings

 

 

(256)

 

 

 —

 

 

 —

 

Other financing activities

 

 

(10)

 

 

(22)

 

 

(33)

 

Net cash used in financing activities

 

 

(243)

 

 

(178)

 

 

(490)

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and equivalents

 

 

140 

 

 

178 

 

 

(315)

 

Cash and equivalents at beginning of period

 

 

234 

 

 

56 

 

 

371 

 

Cash and equivalents at end of period

 

$

374 

 

$

234 

 

$

56