Voluntary Reorganization (Tables)

3 Months Ended

Oct. 31, 2020

Liabilities Subject to Compromise Components

The components of Liabilities subject to compromise are presented below:


	October 31, 2020		August 1, 2020
Liabilities subject to compromise:	(millions)
Accounts payable	$	375.6	$	395.3
Accrued expenses and other current liabilities	13.8		114.8
Current portion of long-term debt (a)	1,090.2		1,252.6
Current portion of lease liabilities	92.7		146.4
Lease-related liabilities	419.7		614.5
Other non-current liabilities	105.6		106.0
Liabilities subject to compromise	$	2,097.6	$	2,629.6

____________

(a) See Note 11 for more details of the prepetition debt reported as Liabilities subject to compromise.

Reorganization Items

The following table summarizes the components of the Reorganization items in the accompanying consolidated statement of operations:


	Three Months Ended
	October 31, 2020
	(millions)
Non-cash terminations of lease liabilities	$	196.1
Professional fees	(17.2)
Write-off of deferred financing fees	(1.9)
Other	0.4
Total reorganization items, net	$	177.4

Condensed Balance Sheet


CONDENSED BALANCE SHEET

	October 31, 2020		August 1, 2020
	(millions)
ASSETS
Current assets:
Cash and cash equivalents	$	368.2	$	548.2
Inventories	384.8		326.7
Prepaid expenses, and other current assets	185.3		143.2
Current assets related to discontinued operations	10.4		30.9
Total current assets	948.7		1,049.0
Property and equipment, net	404.1		453.8
Operating lease right-of-use assets	340.5		376.4
Goodwill	164.6		164.6
Other intangible assets, net	20.2		20.2
Equity method investment	52.4		45.2
Other assets	50.5		52.0
Non-current assets related to discontinued operations	—		1.1
Investment in non-debtor subsidiaries	177.3		177.3
Total assets	$	2,158.3	$	2,339.6
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	260.9	$	125.7
Accrued expenses and other current liabilities	170.2		57.9
Deferred income	108.4		111.7
Current portion of long-term debt	—		227.9
Current liabilities related to discontinued operations	38.4		75.7
Total current liabilities	577.9		598.9


Long-term debt	292.4		—
Other non-current liabilities	26.7		28.7
Non-current liabilities related to discontinued operations	13.4		21.2
Amounts due to non-debtor subsidiaries	105.3		99.9
Liabilities subject to compromise	2,097.6		2,629.6
Total liabilities	3,113.3		3,378.3
Total shareholders' deficit	(955.0)		(1,038.7)
Total liabilities and shareholders' deficit	$	2,158.3	$	2,339.6

Condensed Income Statement


CONDENSED STATEMENT OF OPERATIONS

	Three Months Ended
	October 31, 2020
	(millions)
Net sales	$	572.9
Cost of goods sold	(321.1)
Gross margin	251.8
Other operating expenses:
Buying, distribution and occupancy expenses	(150.8)
Selling, general and administrative expenses	(225.6)
Restructuring and other related charges	(1.0)


Depreciation and amortization expenses	(46.9)
Equity in losses of non-debtor subsidiaries	(4.1)
Total other operating expenses	(428.4)
Operating loss	(176.6)

Interest expense	(8.1)
Interest and other income, net	0.4

Reorganization items, net	177.4
Loss from continuing operations before provision for income taxes and income from equity method investment	(6.9)
Provision for income taxes from continuing operations	(2.9)
Income from equity method investment	7.2
Loss from continuing operations	(2.6)

Income from discontinued operations, net of taxes	40.0
Gain on disposal of discontinued operations, net of taxes	38.9
Net income	$	76.3

Condensed Cash Flow Statement


CONDENSED STATEMENT OF CASH FLOWS

	Three Months Ended
	October 31, 2020
	(millions)
Cash flows provided by operating activities	$	(122.2)
Cash flows from investing activities:
Capital expenditures	(2.9)
Proceeds from the sale of intangible assets	40.8
Cash flows used in investing activities	37.9
Cash flows from financing activities:
New term loan	312.3
Redemptions and repayments of term loan	(162.3)
Repayments of revolver borrowings	(230.0)
Payments of deferred financing fees	(20.6)
Cash flows provided by financing activities	(100.6)
Increase in cash and cash equivalents	(184.9)
Cash and cash equivalents, beginning of period	554.7
Cash and cash equivalents, end of period (a)	$	369.8

____________

(a) Difference of $1.6 million to the Cash and cash equivalents balance on the debtor-in-possession balance sheet above represents restricted cash included in other assets and cash included in discontinued operations.