Express 2014 Annual Report Download - page 51

Notes to Consolidated Financial Statements
1. Description of Business and Basis of Presentation
Business Description
Express, Inc., together with its subsidiaries (“Express” or the “Company”), is a specialty apparel and accessories
retailer of women’s and men’s merchandise, targeting the 20 to 30 year old customer. Express merchandise is
sold through retail stores and the Company’s website, www.express.com. As of January 31, 2015, Express
operated 641 primarily mall-based stores in the United States, Canada, and Puerto Rico, including 41 factory
outlet stores. Additionally, the Company earned revenue from 34 franchise locations. These franchise locations
are operated by franchisees pursuant to franchise agreements covering the Middle East, Mexico, certain other
Latin American countries, and South Africa. Under the franchise agreements, the franchisees operate stores and
shop-in-shops that sell Express-branded apparel and accessories purchased directly from the Company.
Fiscal Year
The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are referred to by the
calendar year in which the fiscal year commences. References herein to “2014,” “2013,” and “2012” represent
the 52-week period ended January 31, 2015, the 52-week period ended February 1, 2014, and the 53-week period
ended February 2, 2013.
Basis of Presentation
Express, Inc., a holding company, owns all of the outstanding equity interests in Express Topco LLC, a holding
company, which owns all of the outstanding equity interests in Express Holding, LLC (“Express Holding”).
Express Holding owns all of the outstanding equity interests in Express, LLC and Express Finance Corp.
(“Express Finance”). Express, LLC, together with its subsidiaries, including Express Fashion Operations, LLC,
conducts the operations of the Company. Express, LLC was a division of L Brands, Inc. (“L Brands”) until it was
acquired by an affiliate of Golden Gate Private Equity, Inc. (“Golden Gate”) in 2007 (the “Golden Gate
Acquisition”). Express Finance was formed on January 28, 2010, solely for the purpose of serving as co-issuer of
the 8
3
⁄ 4 % Senior Notes (“Senior Notes”) issued on March 5, 2010 and described in Note 8.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries.
All intercompany transactions and balances have been eliminated in consolidation.
2. Summary of Significant Accounting Policies
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles in the United
States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of
revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and
liabilities as of the date of the Consolidated Financial Statements. Actual results may differ from those estimates.
The Company revises its estimates and assumptions as new information becomes available.
Cash and Cash Equivalents
Cash and cash equivalents include investments in U.S. treasury money market funds, payments due from banks
for third-party credit and debit card transactions for up to 5 days of sales, cash on hand, and deposits with
financial institutions. As of January 31, 2015 and February 1, 2014, amounts due from banks for credit and debit
card transactions totaled approximately $11.9 million and $10.3 million, respectively.
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