8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 5, 2017

Commission File Number	Exact name of Registrant as specified in its charter, Address of principal executive offices and Telephone number	State of incorporation	I.R.S. Employer Identification Number
001-35979	HD SUPPLY HOLDINGS, INC. 3100 Cumberland Boulevard, Suite 1480 Atlanta, Georgia 30339 (770) 852-9000	Delaware	26-0486780
333-159809	HD SUPPLY, INC. 3100 Cumberland Boulevard, Suite 1480 Atlanta, Georgia 30339 (770) 852-9000	Delaware	75-2007383

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02. Results of Operations and Financial Condition.

On December 5, 2017,  HD Supply Holdings, Inc. (the “Company” or “HD Supply”), HD Supply, Inc.’s parent company, issued a press release, filed as Exhibit 99.1 and incorporated herein by reference, announcing the Company’s financial results for the three months ended October 29, 2017 and certain other information.

The information contained in Item 7.01 concerning the presentation to HD Supply investors is hereby incorporated into this Item 2.02 by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 7.01.  Regulation FD Disclosure.

The slide presentation attached hereto as Exhibit 99.2, and incorporated herein by reference, will be presented to certain investors of HD Supply on December 5, 2017 and may be used by HD Supply in various other presentations to investors.

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description of Exhibit
99.1	Press Release “HD Supply Holdings, Inc. Announces 2017 Third-Quarter Results, Raises Full-Year Guidance” dated December 5, 2017.
99.2	HD Supply presentation to investors.

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press Release “HD Supply Holdings, Inc. Announces 2017 Third-Quarter Results, Raises Full-Year Guidance” dated December 5, 2017.
99.2	HD Supply presentation to investors.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 5, 2017	HD Supply Holdings, Inc.
	By:	/s/ Dan S. McDevitt
		Dan S. McDevitt
		General Counsel and Corporate Secretary

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 5, 2017	HD Supply, Inc.
	By:	/s/ Dan S. McDevitt
		Dan S. McDevitt
		General Counsel and Corporate Secretary

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EX-99.1

Exhibit 99.1

Investor Contact:

Charlotte McLaughlin

HD Supply Investor Relations

770-852-9100

InvestorRelations@hdsupply.com

Media Contact:

Quiana Pinckney

HD Supply Public Relations

770-852-9057

Quiana.Pinckney@hdsupply.com

HD Supply Holdings, Inc. Announces 2017 Third-Quarter Results,

Raises Full-Year Guidance

ATLANTA, GA — December 5, 2017 — HD Supply Holdings, Inc. (NASDAQ: HDS), one of the largest industrial distributors in North America, today reported Net sales of $1.4 billion for the third quarter of fiscal 2017 ended October 29, 2017, an increase of $95 million, or 7.5 percent, as compared to the third quarter of fiscal 2016.

“I am proud of the team’s performance in the third quarter.  We delivered strong overall results including 7.5 percent sales growth, which allowed us to raise our full year guidance. The team is committed to delivering long term profitable growth in excess of market and improved operating leverage,” stated Joe DeAngelo, Chairman, President & CEO of HD Supply.

Gross profit increased $30 million, or 5.9 percent, to $542 million for the third quarter of fiscal 2017 as compared to $512 million for the third quarter of fiscal 2016. Gross profit was 39.6 percent of Net sales for the third quarter of fiscal 2017, down approximately 60 basis points from 40.2 percent of Net sales for third quarter of fiscal 2016.

Operating income increased $23 million, or 14.5 percent, to $182 million for the third quarter of fiscal 2017 as compared to $159 million for the third quarter of fiscal 2016. Operating income as a percentage of Net sales was 13.3 percent for the third quarter of fiscal 2017, an increase of approximately 80 basis points from 12.5 percent for the third quarter of fiscal 2016.

Net income increased $392 million to $452 million for the third quarter of fiscal 2017 as compared to $60 million for the third quarter of fiscal 2016. The increase in Net income was primarily due to the gain on the sale of our Waterworks business. Net income per diluted share increased $2.12 to $2.42 for the third quarter of fiscal 2017 as compared to $0.30 for the third quarter of fiscal 2016.

Adjusted EBITDA increased $26 million, or 13.8 percent, to $214 million for the third quarter of fiscal 2017 as compared to $188 million for the third quarter of fiscal 2016. Adjusted EBITDA as a percentage of Net sales was 15.6 percent for the third quarter of fiscal 2017, increasing approximately 90 basis points from 14.7 percent for the third quarter of fiscal 2016.

Adjusted net income increased $55 million, or 58.5 percent, to $149 million for the third quarter of fiscal 2017 as compared to $94 million for the third quarter of fiscal 2016.  Adjusted net income per diluted share increased 70.2 percent to $0.80 for the third quarter of fiscal 2017, as compared to $0.47 for the third quarter of fiscal 2016.

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As of October 29, 2017, HD Supply’s combined liquidity of approximately $1.2 billion was comprised of $461 million in cash and cash equivalents and $744 million of additional available borrowings under HD Supply, Inc.’s (“HDS”) senior asset-backed lending facility, based on qualifying inventory and receivables.

Business Unit Performance

Facilities Maintenance

Net sales increased $30 million, or 4.1 percent, to $754 million for the third quarter of fiscal 2017 as compared to $724 million for the third quarter of fiscal 2016.  Adjusted EBITDA increased $13 million, or 9.3 percent, to $153 million for the third quarter of fiscal 2017 as compared to $140 million for the third quarter of fiscal 2016.  This represents an operating leverage of 2.3x. Adjusted EBITDA as a percentage of Net sales was 20.3 percent for the third quarter of fiscal 2017, increasing approximately 100 basis points from 19.3 percent for the third quarter of fiscal 2016.

Construction & Industrial

Net sales increased $65 million, or 11.8 percent, to $617 million for the third quarter of fiscal 2017 as compared to $552 million for the third quarter of fiscal 2016.  Adjusted EBITDA increased $9 million, or 13.4 percent, to $76 million for the third quarter of fiscal 2017 as compared to $67 million for the third quarter of fiscal 2016. This represents an operating leverage of 1.1x.  Adjusted EBITDA as a percentage of Net sales was 12.3 percent for the third quarter of fiscal 2017, an increase of approximately 20 basis points from 12.1 percent for the third quarter of fiscal 2016.

Third-Quarter Monthly Sales Performance

Net sales for August, September and October of fiscal 2017 were $436 million, $403 million and $531 million, respectively.  There were 20 selling days in August, 19 selling days in September and 25 selling days in October.  Average year-over-year daily sales growth for August, September and October of fiscal 2017 was 6.7 percent, 5.2 percent and 10.0 percent, respectively.

Preliminary November Sales Results

Preliminary Net sales in November were approximately $372 million, which represents year-over-year average daily sales growth of approximately 9.8 percent. Preliminary November year-over-year average daily sales growth for Facilities Maintenance was approximately 4.3 percent and for Construction & Industrial was approximately 16.4 percent.  There were 18 selling days in both November 2017 and November 2016.

Fourth-Quarter 2017 Outlook

For the fourth quarter of fiscal 2017, Net sales are anticipated to be in the range of $1,142 million and $1,182 million, Adjusted EBITDA(1) in the range of $135 million and $147 million and Adjusted net income per diluted share(1) in the range of $0.41 and $0.47.  Adjusted net income per diluted share range assumes a fully diluted weighted average share count of approximately 186 million.  The company will provide further specifics on its outlook during the third-quarter fiscal 2017 earnings conference call and in the earnings call presentation materials.

For the full year fiscal 2017, Net sales are anticipated to be in the range of $5,080 million and $5,120 million, Adjusted EBITDA(1) in the range of $714 million and $726 million and Adjusted net income per diluted share(1) in the range of $2.23 and $2.29.  Adjusted net income per diluted share range assumes a fully diluted weighted average share count of approximately 194 million.

(1)  No reconciliation of the forecasted range for Adjusted EBITDA to Net income or Income from Continuing Operations and Adjusted net income per diluted share to Net income per diluted share or Income from Continuing Operations per diluted share for the fourth quarter of fiscal 2017 and the full year fiscal 2017 is included in this press release because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

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Fiscal 2017 Third-Quarter Conference Call

As previously announced, HD Supply will hold a conference call on Tuesday, December 5th, 2017 at 8:00 a.m. (Eastern Time) to discuss its third-quarter fiscal 2017 results.  The conference call and presentation materials can be accessed via webcast by logging on from the Investor Relations section of the company’s Web site at hdsupply.com. The online replay will remain available for a limited time following the call.

Non-GAAP Financial Measures

HD Supply supplements its reporting of Net income with non-GAAP measurements, including Adjusted EBITDA, Adjusted net income and Adjusted net income per diluted share and Net Debt. This supplemental information should not be considered in isolation or as a substitute for the GAAP measurements.  Additional information regarding Adjusted EBITDA, Adjusted net income and Adjusted net income per diluted share referred to in this press release is included below under “Reconciliation of Non-GAAP Measures.”

About HD Supply

HD Supply (www.hdsupply.com) is one of the largest industrial distributors in North America. The company provides a broad range of products and value-add services to approximately 500,000 customers with leadership positions in maintenance, repair and operations, and specialty construction sectors. Through approximately 220 branches and 44 distribution centers, in the U.S. and Canada, the company’s approximately 11,000 associates provide localized, customer-driven services including jobsite delivery, will call or direct-ship options, diversified logistics and innovative solutions that contribute to its customers’ success.

Forward-Looking Statements and Preliminary Results

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements are based on management’s beliefs and assumptions and information currently available to management and are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future results, and that actual results may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. A number of important factors could cause actual events to differ materially from those contained in or implied by the forward-looking statements, including those “Risk factors” in our annual report on Form 10-K, for the fiscal year ended January 29, 2017, filed on March 14, 2017, our quarterly report on Form 10-Q, for the fiscal quarter ended October 29, 2017, filed on December 5, 2017 and those described from time to time in our, and HD Supply, Inc.’s, other filings with the U.S. Securities and Exchange Commission, which can be found at the SEC’s website www.sec.gov. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Estimates for Net sales, Adjusted EBITDA and Adjusted net income per diluted share are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end adjustments. Any variation between HD Supply’s actual results and the preliminary financial data set forth above may be material.

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HD SUPPLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Amounts in millions, except share and per share data, Unaudited

	Three Months Ended						Nine Months Ended
	October 29, 2017			October 30, 2016			October 29, 2017			October 30, 2016
Net Sales	$	1,370		$	1,275		$	3,938		$	3,734
Cost of sales	828			763			2,373			2,240
Gross Profit	542			512			1,565			1,494
Operating expenses:
Selling, general and administrative	336			329			1,008			954
Depreciation and amortization	21			21			63			63
Restructuring	3			3			3			14
Total operating expenses	360			353			1,074			1,031
Operating Income	182			159			491			463
Interest expense	36			65			134			219
Interest income	(1		)	—			(1		)	—
Loss on extinguishment & modification of debt	78			59			81			174
Income from Continuing Operations Before Provision for Income Taxes	69			35			277			70
Provision for income taxes	23			15			92			30
Income from Continuing Operations	46			20			185			40
Income from discontinued operations, net of tax	406			40			794			104
Net Income	$	452		$	60		$	979		$	144
Other comprehensive income (loss) — foreign currency translation adjustment	1			(1		)	(1		)	1
Total Comprehensive Income	$	453		$	59		$	978		$	145
Weighted Average Common Shares Outstanding (thousands)
Basic	185,651			199,593			194,704			199,217
Diluted	186,652			202,007			196,258			201,786
Basic Earnings Per Share(1):
Income from Continuing Operations	$	0.25		$	0.10		$	0.95		$	0.20
Income from Discontinued Operations	$	2.19		$	0.20		$	4.08		$	0.52
Net Income	$	2.43		$	0.30		$	5.03		$	0.72
Diluted Earnings Per Share(1):
Income from Continuing Operations	$	0.25		$	0.10		$	0.94		$	0.20
Income from Discontinued Operations	$	2.18		$	0.20		$	4.05		$	0.52
Net Income	$	2.42		$	0.30		$	4.99		$	0.71

(1 )May not foot due to rounding.

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HD SUPPLY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

Amounts in millions, except per share data, Unaudited

	October 29, 2017			January 29, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	461		$	75
Receivables, less allowance for doubtful accounts of $11 and $9	689			559
Inventories	662			606
Current assets of discontinued operations	—			575
Other current assets	38			32
Total current assets	1,850			1,847
Property and equipment, net	298			253
Goodwill	1,807			1,807
Intangible assets, net	93			102
Deferred tax asset	298			556
Non-current assets of discontinued operations	—			1,122
Other assets	19			20
Total assets	$	4,365		$	5,707
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	405		$	320
Accrued compensation and benefits	84			98
Current installments of long-term debt	11			14
Current liabilities of discontinued operations	—			259
Other current liabilities	161			152
Total current liabilities	661			843
Long-term debt, excluding current installments	2,087			3,798
Non-current liabilities of discontinued operations	—			20
Other liabilities	123			86
Total liabilities	2,871			4,747
Stockholders’ equity:
Common stock, par value $0.01; 1 billion shares authorized; 186.3 million and 201.4 million shares issued and outstanding at October 29, 2017 and January 29, 2017, respectively	2			2
Paid-in capital	4,018			3,962
Accumulated deficit	(1,956		)	(2,969		)
Accumulated other comprehensive loss	(16		)	(15		)
Treasury stock, at cost, 17.4 million and 0.6 million shares at October 29, 2017 and January 29, 2017, respectively	(554		)	(20		)
Total stockholders’ equity	1,494			960
Total liabilities and stockholders’ equity	$	4,365		$	5,707

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HD SUPPLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Amounts in millions, Unaudited

	Nine Months Ended
	October 29, 2017			October 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	979		$	144
Reconciliation of net income to net cash provided by (used in) operating activities:
Depreciation and amortization	73			76
Provision for uncollectibles	6			5
Non-cash interest expense	11			13
Payment of discounts upon extinguishment of debt	(6		)	—
Loss on extinguishment & modification of debt	81			174
Stock-based compensation expense	19			15
Deferred income taxes	316			93
(Gain) loss on sales of businesses, net	(930		)	7
Other	—			(2		)
Changes in assets and liabilities, net of the effects of acquisitions & dispositions:
(Increase) decrease in receivables	(249		)	(236		)
(Increase) decrease in inventories	(116		)	(119		)
(Increase) decrease in other current assets	1			—
(Increase) decrease in other assets	1			—
Increase (decrease) in accounts payable and accrued liabilities	132			134
Increase (decrease) in other long-term liabilities	2			—
Net cash provided by (used in) operating activities	320			304
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(65		)	(59		)
Proceeds from sales of property and equipment	2			2
Proceeds from sales of businesses, net	2,450			28
Net cash provided by (used in) investing activities	2,387			(29		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under employee benefit plans	37			23
Purchase of treasury shares	(555		)	(24		)
Borrowings of long-term debt	113			1,547
Repayments of long-term debt	(1,526		)	(2,435		)
Borrowings on long-term revolver debt	624			510
Repayments on long-term revolver debt	(989		)	—
Debt issuance costs	(26		)	(19		)
Other financing activities	1			(1		)
Net cash provided by (used in) financing activities	(2,321		)	(399		)
Effect of exchange rates on cash and cash equivalents	—			1
Increase (decrease) in cash and cash equivalents	$	386		$	(123	)
Cash and cash equivalents at beginning of period	75			269
Cash and cash equivalents at end of period	$	461		$	146

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HD SUPPLY HOLDINGS, INC.

SEGMENT REPORTING

Amounts in millions, Unaudited

Three Months Ended October 29, 2017	Facilities Maintenance		Construction & Industrial		Corporate			Total Continuing Operations
Net sales	$	754	$	617	$	(1	)	$	1,370
Adjusted EBITDA	153		76		(15		)	214
Depreciation(1) & Software Amortization	7		9		3			19
Other Intangible Amortization	1		1		1			3
Three Months Ended October 30, 2016
Net sales	$	724	$	552	$	(1	)	$	1,275
Adjusted EBITDA	140		67		(19		)	188
Depreciation(1) & Software Amortization	8		7		4			19
Other Intangible Amortization	1		1		1			3
Nine Months Ended October 29, 2017
Net sales	$	2,205	$	1,737	$	(4	)	$	3,938
Adjusted EBITDA	426		200		(47		)	579
Depreciation(1) & Software Amortization	19		27		11			57
Other Intangible Amortization	4		1		4			9
Nine Months Ended October 30, 2016
Net sales	$	2,142	$	1,597	$	(5	)	$	3,734
Adjusted EBITDA	425		184		(51		)	558
Depreciation(1) & Software Amortization	23		24		10			57
Other Intangible Amortization	4		1		4			9

(1)Depreciation includes amounts recorded within Cost of sales in the Consolidated Statements of Operations.

Reconciliation of Non-GAAP Measures

Adjusted EBITDA and Adjusted net income are not recognized terms under GAAP and do not purport to be alternatives to Net income as a measure of operating performance. We present Adjusted EBITDA and Adjusted net income because each is a primary measure used by management to evaluate operating performance. In addition, we present Adjusted net income to measure our overall profitability as we believe it is an important measure of our performance. We believe the presentation of Adjusted EBITDA and Adjusted net income enhances investors’ overall understanding of the financial performance of our business.

Adjusted EBITDA is based on “Consolidated EBITDA,” a measure which is defined in our senior credit facilities and used in calculating financial ratios in several material debt covenants. Adjusted EBITDA is defined as Net income less Income from discontinued operations, net of tax, plus (i) Interest expense and Interest income, net, (ii) Provision for income taxes, (iii) depreciation and amortization and further adjusted to exclude loss on extinguishment of debt, non-cash items and certain other adjustments to Consolidated Net Income permitted in calculating Consolidated EBITDA under our senior credit facilities.

Adjusted net income is defined as Net income less Income from discontinued operations, net of tax, further adjusted for loss on extinguishment of debt, certain non-cash, non-recurring or unusual items, net of tax.

We compensate for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, our presentation of Adjusted EBITDA and Adjusted net income may not be comparable to other similarly titled measures of other companies.

Adjusted EBITDA and Adjusted net income have limitations as analytical tools and should not be considered in isolation or as substitutes for analyzing our results as reported under GAAP. Some of these limitations are:

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·Adjusted EBITDA and Adjusted net income do not reflect changes in, or cash requirements for, our working capital needs;

·Adjusted EBITDA does not reflect our interest expense, or the requirements necessary to service interest or principal payments on our debt;

·Adjusted EBITDA does not reflect our income tax expenses or the cash requirements to pay our taxes;

·Adjusted EBITDA and Adjusted net income do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; and although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

Adjusted EBITDA

The following table presents a reconciliation of Net income and Income from continuing operations, the most directly comparable financial measures under GAAP, to Adjusted EBITDA for the periods presented (amounts in millions):

	Three Months Ended				Nine Months Ended
	October 29, 2017		October 30, 2016		October 29, 2017		October 30, 2016
Net income	$	452	$	60	$	979	$	144
Less income from discontinued operations, net of tax	406		40		794		104
Income from continuing operations	46		20		185		40
Interest expense, net	35		65		133		219
Provision for income taxes	23		15		92		30
Depreciation and amortization (1)	22		22		66		66
Loss on extinguishment & modification of debt (2)	78		59		81		174
Restructuring charges (3)	3		3		3		14
Stock-based compensation	7		4		19		15
Adjusted EBITDA	$	214	$	188	$	579	$	558

(1)Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations and Comprehensive Income.

(2)Represents the loss on extinguishment of debt including the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modification.

(3)Represents the costs incurred for strategic alignment of our workforce. These costs include severance, relocation costs and other related costs.

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Adjusted Net Income

The following table presents a reconciliation of Net income and Income from continuing operations, the most directly comparable financial measures under U.S. GAAP, to Adjusted net income for the periods presented (amounts in millions):

	Three Months Ended						Nine Months Ended
	October 29, 2017			October 30, 2016			October 29, 2017			October 30, 2016
Net income	$	452		$	60		$	979		$	144
Less income from discontinued operations, net of tax	406			40			794			104
Income from continuing operations	46			20			185			40
Plus: Provision for income taxes	23			15			92			30
Less: Cash income taxes (1)	(4		)	(6		)	(14		)	(12		)
Plus: Amortization of acquisition-related intangible assets (other than software)	3			3			9			9
Plus: Loss on extinguishment & modification of debt (2)	78			59			81			174
Plus: Restructuring charges (3)	3			3			3			14
Adjusted Net Income	$	149		$	94		$	356		$	255
Diluted weighted average common shares outstanding	186,652			202,007			196,258			201,786
Adjusted net income per share — diluted	$	0.80		$	0.47		$	1.81		$	1.26

(1)Cash paid for income taxes for the three and nine months ended October 29, 2017 excludes $13 million in tax payments related to the sale of the Waterworks business unit.

(2)Represents the loss on extinguishment of debt including the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the costs of debt modification.

(3)Represents the costs incurred for strategic alignment of our workforce. These costs include severance, relocation costs and other related costs.

No reconciliation of the forecasted range for Adjusted EBITDA to Net income and Adjusted net income per diluted share to Net income per diluted share for the fourth quarter of fiscal 2017 and the full year fiscal 2017 is included in this press release because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

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EX-99.2

Exhibit 99.2

FINANCIAL RESULTS AND COMPANY OVERVIEW 2017 Third-Quarter Performance December 5th, 2017

Disclaimer Forward-Looking Statements and Preliminary Results This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements are based on management’s beliefs and assumptions and information currently available to management and are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this presentation is not a guarantee of future results, and that actual results may differ materially from those made in or suggested by the forward-looking information contained in this presentation. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. A number of important factors could cause actual events to differ materially from those contained in or implied by the forward-looking statements, including those “Risk factors” in our annual report on Form 10-K, for the fiscal year ended January 29, 2017, filed on March 14, 2017, our quarterly report on Form 10-Q, for the fiscal year ended October 29, 2017, filed on December 5, 2017 and those described from time to time in our, and HD Supply, Inc.’s, other filings with the U.S. Securities and Exchange Commission, which can be found at the SEC’s website www.sec.gov. Any forward-looking information presented herein is made only as of the date of this presentation, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise. Estimates for Net sales, Adjusted EBITDA and Adjusted Net income per diluted share are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end adjustments. Any variation between HD Supply’s actual results and the preliminary financial data set forth herein may be material. Non-GAAP Financial Measures HD Supply supplements its financial results that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”) with non-GAAP measurements, including Adjusted EBITDA, Adjusted net income, Adjusted net income per diluted share, Net Debt and Free Cash Flow. This supplemental information should not be considered in isolation or as a substitute for the GAAP measurements. Additional information regarding Adjusted EBITDA, Adjusted net income and Adjusted net income per diluted share referred to in this presentation is included at the end of this presentation under “Reconciliation of Non-GAAP Measures.”

Q3’17 Execution Highlights Focused on Controllable Execution 1 See appendix slides 20 and 21 for a reconciliation of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per Diluted Share to Net Income and Net Income per Diluted Share 2 Operating Leverage is defined as Adjusted EBITDA growth divided by total Net sales growth 3 Free Cash Flow is defined as Operating Cash Flow $529M, Less Capital Expenditures $87M (including Cash Flow from Discontinued Operations) Note: “VPY” denotes Versus Prior Year, “LTM” denotes Last Twelve Months +7% Net Sales Growth Versus Prior Year (“VPY”) +14% Operating Income Growth VPY +130% Net Income from Continuing Operations VPY +14% Adjusted EBITDA1 Growth VPY Operating Leverage2 of 1.8x +70% Adjusted Net Income per Diluted Share1 Growth VPY $442M LTM Free Cash Flow3 Talent and One Team Culture

Enhance Leading Market Positions Continue to Purchase Through 10b5-1 Plan Expected $10-15M to Restructure Support Functions Full Tax Payer around the End of Fiscal 2018 Topics of Recent Investor Interest Free Cash Flow is defined as Operating Cash Flow – Capital Expenditures (including Cash Flow from Discontinued Operations) Topic Consideration Non-Residential End Market Share Repurchases Restructuring Costs Acquisitions No Change to Guidance, Third-Party Data Caution Taxes Increased Rebar Costs Expected into 2018 Rebar Pricing ($3M) Impact in FM, +$1M Impact in C&I Hurricane Impact

$1,275M $1,370M +7% Gross Profit Gross Margin % Operating Income Adj. EBITDA % Op. Income % $512M $542M 40.2% 39.6% $188M $214M $159M $182M 14.7% 15.6% 13.3% +6% -60 BPs +90 BPs +$26M ($ in millions, except per share data) $94M $149M +14% Net Sales 1 The increase in Net income and Net income per Diluted share was primarily due to the Completion of the Sale of the Waterworks business 2 See appendix slides 20 and 21 for a reconciliation of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per Diluted Share to Net Income and Net Income per Diluted Share Q3’16 Adj. EBITDA2 VPY Adj. Net Income2 12.5% Q3’17 $0.47 $0.80 +70% Per Diluted Share2 +$95M +59% Net Income1 $60M $452M +$392M $0.30 $2.42 +$2.12 Per Diluted Share1 +7.5% Sales Growth VPY Q3’17 Financial Results +80 BPs

Organic Growth Across Business Units Q3’17 Segment Performance Q3’17 $754M $617M Adj. EBITDA $153M $76M Net Sales ($ in millions) Q3’16 $724M $552M $140M VPY +4% +9% VPY +12% +13% $67M Q3’17 Q3’16

Q3’17 Taxes and Cash Flow at Quarter End Favorable Tax Asset with Significant Gross Federal Net Operating Loss Carryforwards of Approximately $780 Million ~$338M Tax-affected Amount of Federal and State NOLs Cash Taxes $17M in Q3’17 (Including $13M Related to the sale of Waterworks) $3M Estimated in Q4’17 $30M Estimated for FY’17 GAAP Taxes (Including $13M Related to the sale of Waterworks) Effective Rate ~33% for Q3’17 Expected to be ~34% to 35% for FY’17 for Continuing Operations $1.7B Net Debt1 at the End of Q3’17 2.4x Net Debt to Adj. EBITDA $442M LTM Free Cash Flow3 $22M of Capital Expenditures in Q3’17 Note: Contains forward-looking information; please see Disclaimer on slide 2 1 Reconciled on slide 16 2 Free Cash Flow is defined as Operating Cash Flow $529M, Less Capital Expenditures $87M (including Cash Flow from Discontinued Operations) Taxes Cash Flow Capital Structure Execution

+7.5% Q3’17 Average Daily Sales Growth Q3’17 Monthly Average Daily Sales (%) 6.1% 14.5% 9.8% Nov. 4.3% 16.4% 1.3% ’16 Selling Days 25 18 19 10.3% Facilities Maintenance Construction & Industrial (Preliminary) 6.7% 5.2% 10.0% 4.3% 9.8% 20 2.7% 2.0% Aug. Sep. Oct. Prior Year $531M $372M $403M HD Supply Net Sales $436M 3.3% 3.0% ’15 Selling Days Q3’17 0.9% 3.4% $338M 1.0% 5.7% $483M 2.4% 4.4% $384M 0.2% 6.2% $408M HD Supply Average Daily Sales Growth VPY ’17 Selling Days 25 18 19 20 Current Year 25 18 19 20 Note: Contains forward-looking information; please see Disclaimer on slide 2

+20% +11% +9% +5% Q4’17 Guidance +7% Sales Growth VPY at Midpoint $1,182M $1,142M $122M $1,085M $147M $135M VPY Q4’16 Q4’17 Q4’16 Q4’17 Q4’17 Net Sales Adj. EBITDA Adj. Net Income Per Diluted Share1 VPY 1 Q4’17 Adjusted Net Income per Diluted Share range assumes a fully diluted weighted average share count of ~186 million Note: Contains forward looking information; please see Disclaimer on slide 2. No reconciliation of the forecasted range for Adjusted EBITDA to Net income or Income from Continuing Operations for the fourth quarter of fiscal 2017 is included in this presentation because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors $0.47 $0.41 VPY ($ in millions, except per share amounts) $0.23 . . . . Q4’16 +104% +78% Midpoint $1,162M +7% $141M +16% $0.44 +91%

~2 to 3% End Market Growth for FY’18 FY’18 End Market Preliminary Outlook Residential Construction “Living Space” MRO Primary End Market Non-Residential Construction ~2 to 3% FY’18 End Market Estimates1 1% to 2% Current View as of December ’17 Mid-Single Digit 1 Management estimate; market estimate is management estimate of the growth of our end markets based on multiple quantitative and qualitative inputs Note: Contains forward looking information; please see Disclaimer on slide 2 Low Single Digits to Mid-Single Digit

FY’18 Operating Leverage Framework HDS Market Growth1 ~2-3% + Above Market Growth2 ~300 BPs = End Market Growth Controllable Execution Annual Net Sales Growth1,2 Illustrative Adj. EBITDA Growth Adjusted EBITDA Growth HDS Market Growth 7.5% 5-6% Operating Leverage Target2,3 1 Management estimate; market estimate is management estimate of the growth of our markets based on multiple quantitative and qualitative inputs 2 Long-term average growth target based on management estimates and projections 3 Operating Leverage is defined as Adjusted EBITDA growth divided by Total Net sales growth; target based on management estimates and projections. Note: Contains forward looking information; please see Disclaimer on slide 2. No reconciliation of the forecasted range for Adjusted EBITDA to Net income or Income from Continuing Operations and Adjusted Net Income per Diluted Share to Net income per diluted share or Income from Continuing Operations per Diluted Share for the full year of fiscal 2018 is included in this presentation because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. Above Market Growth 300 Basis Points Above Market Growth and 1.5x Operating Leverage Target in 2018 9.0% 1.5x Illustrative

Current Outlook Summary HD Supply Current Outlook Summary +7% Net Sales VPY at Midpoint $1,142M to $1,182M Net Sales +16% Adj. EBITDA VPY at Midpoint $135M to $147M Adj. EBITDA +91% Adj. Net Income per Diluted Share Increase VPY at Midpoint $0.41 to $0.47 Adj. Net Income per Diluted Share Assumes ~186M Diluted Share Count 1 Management estimate; market estimate is management estimate of the growth of our markets based on multiple quantitative and long-term average growth target based on management estimates and projections +2% to +3% End Market VPY1 +5% to +6% Net Sales VPY $5,080M to $5,120M Net Sales +5% to +7% Adj. EBITDA VPY $714M to $726M Adj. EBITDA +49% to +53% Adj. Net Income per Diluted Share VPY $2.23 to $2.29 Adj. Net Income per Diluted Share Assumes ~194M Diluted Share Count Q4’17 FY’17 Note: Contains forward looking information; please see Disclaimer on slide 2. No reconciliation of the forecasted range for Adjusted EBITDA to Net income or Income from Continuing Operations and Adjusted net income per diluted share to Net income per diluted share or Income from Continuing Operations per diluted share for the fourth quarter of fiscal 2017 and full year fiscal 2017 is included in this presentation because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

Q&A Q&A

Concluding Remarks One Team, Driving Customer Success and Value Creation Continual Operational Improvement +7% Net Sales Growth in Q3’17 VPY +14% Adjusted EBITDA Growth in Q3’17 VPY 1.8x Operating Leverage1 +70% Adjusted Net Income per Diluted Share Growth in Q3’17 VPY Enabling Focus, Growth Investment and Innovation Disciplined People, Thought and Action 1 Operating Leverage is defined as Adjusted EBITDA growth divided by total Net sales growth Note: “VPY” denotes Versus Prior Year, “LTM” denotes Last Twelve Months

Q&A APPENDIX

~$1.7B Net Debt Capital Structure Overview Q3’17 Debt Balances Sec. ABL Sec. Term B-3 Sr. Unsecured Notes $57 1,000 4/5/22 8/13/21 Outstanding Debt3 Less Cash and Cash Equivalents Net Debt $1,704 (461) $2,138 Balance Maturity 1 Represents the stated rate of interest, without including the effect of discounts or premiums 2 Subject to applicable redemption price terms 3 Excludes Unamortized Discounts of $6M and Unamortized Deferred Financing costs of $34M ($ in millions, unless otherwise noted) 2.57% 3.58% Interest Rate1 535 n/a 3/2/18 Soft Call Date2 5.75% 4/15/24 4/15/19 Sec. Term B-4 10/17/23 3.83% 546 3/2/18 Plus Letters of Credit 27

Illustrative Adjusted EPS Calculation Adjusted EBITDA Adjusted Net Income per Diluted Share Illustrative Adjusted EPS Calculation Adjusted Net Income2 = = Diluted Shares Outstanding ÷ TBD TBD TBD ~194M FY’17 $122M $0.23 $47M ~203M Q4’16 ($ in millions, except per share data) Q1’17 TBD TBD TBD ~186M Q4’17 Estimates ~199M Q2’17 $214M $0.80 $149M ~187M Q3’17 Depreciation and Amortization1 ( – ) ($22M) (~$23M) (~$89M) ($22M) Amortization of Acquired Intangibles ( + ) ~$12M $3M ~$3M $3M $3M Interest Expense, Net (GAAP) ( – ) ($50M) (~$164M) Cash Income Taxes3 ( – ) (~$17M) ($1M) Stock-based Compensation ( – ) ($5M) (~$31M) ($35M) (~$3M) ($4M) 1 Includes Amounts Recorded within Cost of Sales 2 May not foot due to rounding 3 Q3’17 and FY’17 exclude $13 million of taxes paid in relation to the sale of Waterworks Note: Contains forward looking information; please see Disclaimer on slide 2. No reconciliation of the forecasted range for Adjusted EBITDA to Net income or Income from Continuing Operations and Adjusted net income per diluted share to Net income per diluted share or Income from Continuing Operations per diluted share for the fourth quarter of fiscal 2017 and full year fiscal 2017 is included in this presentation because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. Actual (~$7M) ($6M) ($7M) (~$26M) $208M ($22M) ($49M) $127M $0.64 ($7M) $157M ($22M) $3M ($49M) ($3M) ($6M) $0.39 $80M ~203M Illustrative

$372M Preliminary November Sales Monthly Net Sales ($) Facil. Maint. Const. & Ind. ’17 Selling Days ’16 Selling Days ($ in millions) HD Supply Net Sales (Preliminary) FY’17 Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Nov. $338M $352M $395M $350M $378M $488M $403M $412M $408M $531M $532M $436M $372M $198 $233 $198 $212 $272 $232 $231 $306 $248 $223 $283 $197 $153 $163 $153 $166 $217 $180 $178 $226 $188 $180 $249 $175 $189 $150 18 20 23 20 20 25 20 19 24 20 19 25 18 18 20 23 20 20 25 20 19 24 20 19 25 18 Note: Contains forward-looking information; please see Disclaimer on slide 2 FY’16

+9.8% Preliminary Average Daily Sales Growth in November Average Daily Sales – Organic1 (VPY%) HD Supply Organic Average Daily Sales Growth VPY1 (VPY%) 1 Adjusted for Acquisitions, Divestitures, and Selling Days Note: “VPY” denotes Versus Prior Year; Contains forward-looking information; please see Disclaimer on slide 2 Facil. Maint. Const. & Ind. ’17 Selling Days ’16 Selling Days ’15 Selling Days 2.5% 2.8% 0.2% 1.1% 0.8% 5.2% 2.6% 3.7% 4.3% 1.3% 6.1% 4.3% 0.9% 6.4% 3.7% 5.3% 7.9% 7.7% 9.3% 4.5% 8.2% 9.8% 10.3% 14.5% 16.4% 3.4% 2.0% 4.2% 3.2% 2.4% 3.9% 3.8% 5.2% 6.9% 3.4% 10.0% 5.6% 6.7% 9.8% FY’16 (Preliminary) FY’17 Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Nov. 18 20 23 20 20 25 20 19 24 20 19 25 18 18 20 23 20 20 25 20 19 24 20 19 25 18 18 19 24 20 20 25 19 20 24 20 19 25 18

Reconciliation of Non-GAAP Measures: Net Income to Adjusted EBITDA ($ in millions) 1 Depreciation and amortization includes amounts recorded within Cost of sales in the Consolidated Statements of Operations 2 Represents the loss on extinguishment of debt including the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the cost of debt modification. 3 Represents the costs incurred for strategic alignment of our workforce. These costs include severance, relocation costs and other related costs October 29, 2017 October 30, 2016 Net income $452 $ 60 Less income from discontinued operations, net of tax 406 40 Income from continuing operations 46 20 Interest expense, net 35 65 Provision for income taxes 15 Depreciation and amortization 1 22 22 Loss on extinguishment & modification of debt 78 Restructuring charges 2 3 3 Stock-based compensation 3 7 4 Adjusted EBITDA $ 214 $ 188 23 59 Three Months Ended October 29, 2017 October 30, 2016 $979 $ 144 794 104 185 40 133 219 30 66 66 81 3 14 19 15 $ 579 $ 558 92 174 Nine Months Ended

Reconciliation of Non-GAAP Measures: Net Income to Adjusted Net Income and Adjusted Net Income Per Share ($ in millions, except share and per share amounts) 1 Cash paid for income taxes for the three and nine months ended October 29, 2017 excludes $13 million in payments related to the sale of the Waterworks business unit. 2 Represents the loss on extinguishment of debt including the write-off of unamortized deferred financing costs, original issue discount, and other assets or liabilities associated with such debt. Also includes the cost of debt modification. 3 Represents the costs incurred for strategic alignment of our workforce. These costs include severance, relocation costs and other related costs Weighted average common shares outstanding (in thousands) Basic Diluted Adjusted Net Income Per Share - Basic Adjusted Net Income Per Share - Diluted Net income $ 452 $ 60 Less income from discontinued operations, net of tax 40 Income from continuing operations 46 20 Provision for income taxes 23 15 Cash paid for income taxes1 (4) (6) Amortization of acquisition related intangible assets (other than - software) Restructuring charges3 3 3 Loss on extinguishment & modification of debt2 78 Adjusted Net Income $ 149 $ 94 185,651 199,593 186,652 202,007 $0.80 $0.47 $0.80 $0.47 406 59 3 3 $ 979 $ 144 104 185 40 92 30 (14) (12) 14 3 81 $ 356 $ 255 194,704 199,217 196,258 201,786 $1.83 $1.28 $1.81 $1.26 794 174 9 9 October 29, 2017 October 30, 2016 Three Months Ended October 29, 2017 October 30, 2016 Nine Months Ended