Toys R Us Investor Conference Presentation Deck
December 2015, 23 slides
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exhibit bank of lynch leveraged finance conference toys | Toys R Us
this presentation contains forward looking statements within the meaning of the federal securities laws and such statements are intended to be covered by the safe harbors created thereby these forward looking statements reflect our current views with respect to among other things our operations and financial performance all statements herein or therein that are not historical facts including statements about our beliefs or expectations are forward looking statements we generally identify these statements by words or phrases such as anticipate estimate plan project expect believe intend foresee forecast will may outlook or the negative version of these words or other similar words or phrases these statements discuss among other things our strategy store openings integration and remodeling the development implementation and integration of our business future financial or operational performance projected sales for certain periods same store sales from one period to another cost savings results of store closings and outcome or impact of pending or threatened litigation domestic or international developments amount and allocation of future capital expenditures growth initiatives inventory levels cost of goods selection and type of merchandise marketing positions implementation of safety standards future financings estimates regarding future effective tax rates and other goals and targets and statements of the assumptions underlying or relating to any such statements these statements are subject to risks uncertainties and other factors including among the seasonality of our business competition in the retail industry changes in our product distribution mix and distribution channels general economic factors in the united states and other countries in which we conduct our business consumer spending patterns birth rates our ability to implement our strategy including implementing initiatives for season our ability to recognize cost savings implementation and operation of our new platform marketing strategies the availability of adequate financing access to trade credit changes in consumer preferences changes in employment legislation our dependence on key vendors for our merchandise political and other developments associated with our international operations potential savings in connection with any store closings costs of goods that we sell labor costs transportation costs domestic and international events affecting the delivery of toys and other products to our stores product safety issues including product recalls the existence of adverse litigation changes in laws that impact our business our substantial level of indebtedness and related debt service obligations restrictions imposed by covenants in our debt agreements and other risks uncertainties and factors set forth under item a entitled risk factors of toys us annual report on form for the fiscal year ended and its other reports and documents filed with the securities and exchange commission in addition we typically earn a disproportionate part of our annual operating earnings in the fourth quarter as a result of seasonal buying patterns and these buying patterns are difficult to forecast with certainty these factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in those reports and documents we believe that all forward looking statements are based on reasonable assumptions when made however we caution that it is impossible to predict actual results or outcomes or the effects of risks uncertainties or other factors on anticipated results or outcomes and that accordingly one should not place undue reliance on these statements forward looking statements speak only as of the date they were made and we undertake no obligation to update these statements in light of subsequent events or developments unless required by the securities and exchange commission rules and regulations actual results and outcomes may differ materially from anticipated results or outcomes discussed in any forward looking statement | Toys R Us
preliminary estimates the presentation includes estimates for the third quarter of fiscal and which are based on preliminary internal financial reports and are subject to revision based on the completion of the third fiscal quarter accounting and financial reporting processes accordingly our actual results may differ from these estimates and such difference may be material forward looking statements | Toys R Us
update in millions adjusted a increase of adjusted seven consecutive quarters of international growth generated an additional in savings during taking total achieved savings to or of target additional in pro cost reduction when excluding expense and consultant fees global liquidity of over adjusted net see appendix for reconciliation of adjusted to operating earnings note denotes same store sales denotes fit for growth laine | Toys R Us
key financial metrics through adjusted gross margin adjusted a of sales canada domestic and consolidated segments exclude million and million of adjustments related to obsolete inventory clearance in and respectively adjusted a is presented as net of other income see appendix for summary of adjustments reconciliations and numbers adjusted in millions | Toys R Us
adjusted momentum continues net debt reduction in leverage of net debt is total debt outstanding less cash and cash equivalents and restricted cash attributed to debt see appendix for summary of adjustments reconciliations and numbers in millions ase i | Toys R Us
update fit for growth in millions of target achieved progress initiatives dom con marketing end to end private label sub total margin in store operations supply chain organizational procurement other sub total a fit for growth target fit for growth achieved balance remaining margin a | Toys R Us
our passion is to help families on their journey to raise happy healthy thriving children toys | Toys R Us
grow and build the and brands throughout the world invest in stores become birthday celebration destination grow private label smaller concept stores faster international expansion create a world class experience for our customers develop empowered in store teams successfully complete the commerce project fix leaky bucket customer attrition redefine customer complaints handling system create a strong financial foundation continue to drive savings from fit for growth transition to growth phase create global centers of excellence around key functions joint business planning with key partners make talent and culture a competitive advantage create opportunities for sharing best practices enhance career development programs improve succession planning process launch a new variable pay program strategic pillars | Toys R Us
deliver authority through deep assortment of key brands and categories implement new marketing campaign to build engagement ensure full shelves with improved approach to in stocks drive continuous improvement in customer experience and execution focus for holiday season free shipping destination star wars | Toys R Us
total liquidity global liquidity in millions liquidity in line with prior year note total borrowing capacity is reduced by the million excess availability covenant at toys does not include uncommitted lines | Toys R Us
supported by healthy borrowing capacity impact of inventory excluded from borrowing base in in millions bead era | Toys R Us
debt maturities maturity profile note excludes million north borrowings million borrowings million japan unsecured credit line borrowings million capital lease and other obligations and million of finance obligations associated with capital projects debt presented at face value maturity profile no significant debt maturities until august provides a clear path for business plan execution in millions as of | Toys R Us
strong inventory positions note includes impact total liquidity yoy increase in domestic inventory reflects improved in stocks and depth of assortment in millions | Toys R Us
appendix | Toys R Us
net sales gross margin toys us summary adjusted a adjusted a margin margin in millions international includes canada adjusted a is presented as net of other income see appendix for summary of adjustments reconciliations and numbers note denotes same store sales and is presented in local currency domestic international canada consolidated domestic international canada consolidated adjusted | Toys R Us
toys us adjusted reconciliation the impact of these adjustments are excluded from the gross margin balances in this presentation the impact of these adjustments are excluded from the a balances in this presentation the impact of these adjustments are excluded from the other income net balances in this presentation | Toys R Us
supplemental adjusted in millions japan other canada domestic corp other includes fees from licensed operations intercompany includes royalties shared service fees and other intercompany items does not include intercompany rent see appendix for summary of adjustments reconciliations and numbers and consolidate intercompany rents of million and million respectively domestic consolidates million and million of net intercompany rent for and respectively the table above was provided for informational purposes only and is not representative of how the company manages the business post intercompany intercompany toys us less intercompany | Toys R Us
supplemental adjusted reconciliation the impact of these adjustments are excluded from the a balances in this presentation the impact of these adjustments are excluded from other income net balances in this presentation note intercompany includes royalties shared service fees and other intercompany items | Toys R Us
the impact of these adjustments are excluded from the a balances in this presentation the impact of these adjustments are excluded from other income net balances in this presentation note intercompany includes royalties shared service fees and other intercompany items supplemental adjusted reconciliation | Toys R Us
the impact of these adjustments are excluded from the a balances in this presentation the impact of these adjustments are excluded from other income net balances in this presentation note intercompany includes royalties shared service fees and other intercompany items supplemental adjusted reconciliation | Toys R Us
simplified capital structure toys us toys us property company term loan properties senior notes note chart has been simplified and does not include all entities debt balances presented at face value and excludes capital leases and other and finance obligations associated with capital projects toys us property company i i toys us toys toys us toys us japan joint venture credit lines bank loans short term borrowings secured notes properties loans properties term loan loans and notes real estate parent company guaranty of term loan in millions as of | Toys R Us
| Toys R Us
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