Redeemable preferred shares

On October 5, 2016, the Company issued 625,000 shares of Series A Convertible Preference Shares (“preferred shares”) to Green Equity Investors VI, L.P., Green Equity Investors Side VI, L.P., LGP Associates VI-A LLC and LGP Associates VI-B LLC, all affiliates of Leonard Green & Partners, L.P., (together, the “Investors”) for an aggregate purchase price of $625.0 million, or $1,000 per share (the “Stated Value”) pursuant to the investment agreement dated August 24, 2016. Preferred shareholders are entitled to a cumulative dividend at the rate of 5% per annum, payable quarterly in arrears. Refer to Note 9 for additional discussion of the Company’s dividends on preferred shares.



(in millions, except conversion rate and conversion price)	August 4, 2018		February 3, 2018		July 29, 2017
Conversion rate	11.1190		10.9409		10.7707
Conversion price	$	89.9361	$	91.4002	$	92.8445
Potential impact of preferred shares if-converted to common shares	6.9		6.8		6.7
Liquidation preference	$	632.8	$	632.8	$	632.8

In connection with the issuance of the preferred shares, the Company incurred direct and incremental expenses of $13.7 million. These direct and incremental expenses originally reduced the preferred shares carrying value, and will be accreted through retained earnings as a deemed dividend from the date of issuance through the first possible known redemption date, November 2024. Accumulated accretion recorded in the condensed consolidated balance sheets was $3.1 million as of August 4, 2018 (February 3, 2018 and July 29, 2017: $2.3 million and $1.4 million, respectively).

Accretion of $0.4 million and $0.8 million was recorded to preferred shares in the condensed consolidated balance sheets during the 13 and 26 weeks ended August 4, 2018, respectively ($0.4 million and $0.8 million for the 13 and 26 weeks ended July 29, 2017, respectively).