UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________

FORM 10-Q

_________________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~July~~October 3029, 2011

Commission file number 333-164018

_________________________________

Toys “R” Us Property Company I, LLC

(Exact name of registrant as specified in its charter)

_________________________________



Delaware		04-3829291
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

One Geoffrey Way Wayne, New Jersey		07470
(Address of principal executive offices)		(Zip code)

(973) 617-3500

(Registrant’s telephone number, including area code)

_________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x (Do not check if a smaller reporting company) Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

As of ~~September~~December 13, 2011, all of our outstanding membership interests were privately held by our sole member, Wayne Real Estate Holding Company, LLC.

Table of Contents

TOYS “R” US PROPERTY COMPANY I, LLC

TABLE OF CONTENTS

	PAGE
PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of July 30, 2011 and January 29, 2011	1
Condensed Consolidated Balance Sheets as of October 29, 2011 and January 29, 2011	1
Condensed Consolidated Statements of Operations for the thirteen and twenty-six weeks ended July 30, 2011 and July 31, 2010	2
Condensed Consolidated Statements of Operations for the thirteen and thirty-nine weeks ended October 29, 2011 and October 30, 2010	2
Condensed Consolidated Statements of Cash Flows for the twenty-six weeks ended July 30, 2011 and July 31, 2010	3
Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended October 29, 2011 and October 30, 2010	3
Condensed Consolidated Statements of Changes in Member’s Capital for the twenty-six weeks ended July 30, 2011 and July 31, 2010	4
Condensed Consolidated Statements of Changes in Member’s Capital for the thirty-nine weeks ended October 29, 2011 and October 30, 2010	4
Notes to the Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk	1112
Item 4. Controls and Procedures	1112
PART II – OTHER INFORMATION
Item 1. Legal Proceedings	13
Item 1A. Risk Factors	13
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3. Defaults Upon Senior Securities	13
Item 4. (Removed and Reserved)	13
Item 5. Other Information	13
Item 6. Exhibits	13
SIGNATURE	14
INDEX TO EXHIBITS	15

Table of Contents

PART 1 – FINANCIAL INFORMATION


Item 1.	Financial Statements

TOYS “R” US PROPERTY COMPANY I, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)	~~July~~October 3029, 2011		January 29, 2011
ASSETS
Current Assets:
Cash	$	4380,~~664~~308	$	39,708
Due from affiliate, net	10,~~259~~528		6,649
Prepaid expenses	6,038		6,151
Prepaid expenses and other current assets	7,020		6,151
Net properties held for sale	4,000		6,675
Total current assets	63101,~~961~~856		59,183
Real Estate, Net:
Land	277,~~725~~001		279,325
Buildings, net	~~503~~497,~~299~~822		512,510
Leasehold improvements, net	~~115~~112,~~702~~126		125,281
Total real estate, net	~~896~~886,~~726~~949		917,116
Straight-line rent receivable from affiliate	~~111~~120,~~505~~297		97,930
Debt issuance costs	1716,~~473~~740		18,938
Other assets	~~254~~287		273
Total Assets	$	1,~~089~~126,~~919~~129	$	1,093,440
LIABILITIES AND MEMBER’S CAPITAL
Current Liabilities:
Accrued interest	$	429,~~440~~694	$	4,232
Real estate taxes payable	1416,~~708~~281		10,383
Deferred third party rent liabilities	~~818~~813		846
Deferred related party revenue	~~459~~914		925
Other current liabilities	~~787~~944		923
Total current liabilities	2148,~~212~~646		17,309
Long-term debt	~~930~~931,~~298~~467		928,597
Deferred third party rent liabilities	~~108~~106,~~176~~848		104,421
Other non-current liabilities	28		28
Member's capital	3039,~~205~~140		43,085
Total Liabilities and Member's Capital	$	1,~~089~~126,~~919~~129	$	1,093,440

See accompanying notes to the Condensed Consolidated Financial Statements.

TOYS “R” US PROPERTY COMPANY I, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

13 Weeks Ended

2639 Weeks Ended

(In thousands)

~~July~~October 3029, 2011

~~July~~October 3130, 2010

~~July~~October 3029, 2011

~~July~~October 3130, 2010

Rental revenues:

Base rents

6062,~~520~~676

6360,~~614~~444

~~122~~184,~~505~~808

~~124~~184,~~711~~763

Tenant reimbursements

10,~~337~~694

109,~~097~~604

2031,~~884~~482

2030,~~995~~502

Total revenues

7073,~~857~~370

7370,~~711~~048

~~143~~216,~~389~~290

~~145~~215,~~706~~265

Depreciation

8,~~446~~071

108,~~001~~417

1624,~~939~~621

1927,~~426~~719

Rental expense

12,~~365~~263

1412,~~505~~380

2436,~~687~~971

2638,~~552~~798

Common area maintenance expenses

10,~~337~~694

109,~~097~~604

2031,~~884~~482

2030,~~995~~502

Other operating expenses

1,~~359~~591

1,~~648~~478

24,~~721~~312

34,~~419~~897

Total operating expenses

32,~~507~~619

3631,~~251~~879

6597,~~231~~386

70101,~~392~~916

Operating earnings

3840,~~350~~751

3738,~~460~~169

78118,~~158~~904

75113,~~314~~349

Interest expense

26,~~922~~687

26,~~840~~528

5380,~~913~~600

5380,~~755~~283

Earnings from continuing operations

1114,~~428~~064

1011,~~620~~641

2438,~~245~~304

2133,~~559~~066

Earnings from discontinued operations

2,415

5,026

274

Earnings (loss) from discontinued operations

2,945

(277

)

7,976

131

Net earnings

1317,~~843~~009

1011,~~677~~364

2946,~~271~~280

2133,~~833~~197

See accompanying notes to the Condensed Consolidated Financial Statements.

TOYS “R” US PROPERTY COMPANY I, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	26 Weeks Ended
	39 Weeks Ended
(In thousands)	~~July~~October 3029, 2011			~~July~~October 3130, 2010
Cash Flows from Operating Activities:
Net earnings	$	2946,~~271~~280		$	2133,~~833~~197
Adjustments to reconcile Net earnings to net cash provided by operating activities:
Depreciation	1627,~~976~~189			2029,~~389~~375
Amortization of debt issuance costs	12,~~465~~198			12,~~434~~161
Amortization of original issue discount	1,~~176~~785			1,~~055~~601
(Gain) loss on sale of real estate	(~~392~~216		)	333
Other non-cash charges	64			—461
Changes in operating assets and liabilities:
Due from affiliate, net	(34,~~817~~703		)	(5,~~355~~540		)
Prepaid expenses	113			798
Prepaid expenses and other current assets	(869		)	(416		)
Straight-line rent receivable from affiliate, Other assets and Deferred third party rent liabilities	(1020,~~563~~896		)	(1116,~~178~~061		)
Accrued interest, Real estate taxes payable and Other current liabilities	431,~~397~~381			531,~~116~~547
Deferred related party revenue	(~~466~~11		)	(~~465~~2		)
Net cash provided by operating activities	3882,~~224~~202			3376,~~960~~656
Cash Flows from Investing Activities:
Proceeds from the sale of real estate	78,~~883~~588			907
Capital expenditures	(~~525~~1,050		)	—
Net cash provided by investing activities	7,~~358~~538			907
Cash Flows from Financing Activities:
Distributions	(4250,~~151~~225		)	(4150,~~698~~006		)
Long-term debt borrowings	~~525~~1,085			—
Capitalized debt issuance/extension costs	—			(8366		)
Net cash used in financing activities	(4149,~~626~~140		)	(4150,~~706~~372		)
Cash:
Net increase (decrease) during period	3,956			(6,839		)
Net increase during period	40,600			27,191
Cash at beginning of period	39,708			25,037
Cash at end of period	$	4380,~~664~~308		$	1852,~~198~~228
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	51,063		$	51,063
Non-Cash Financing Information:
Adjustment to the carrying value of net assets previously acquired	$	—		$	(5,599	)

See accompanying notes to the Condensed Consolidated Financial Statements.

TOYS “R” US PROPERTY COMPANY I, LLC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER’S CAPITAL

(Unaudited)

(In thousands)	Member's Capital
Balance, January 30, 2010	$	62,293
Net earnings for the period	2133,~~833~~197
Adjustment to the carrying value of net assets previously acquired	(5,599		)
Distributions	(4150,~~698~~006		)
Balance, July 31, 2010	$	36,829
Balance, October 30, 2010	$	39,885
Balance, January 29, 2011	$	43,085
Net earnings for the period	2946,~~271~~280
Distributions	(4250,~~151~~225		)
Balance, July 30, 2011	$	30,205
Balance, October 29, 2011	$	39,140

See accompanying notes to the Condensed Consolidated Financial Statements.

Table of Contents

TOYS “R” US PROPERTY COMPANY I, LLC AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of presentation

As used herein, the “Company,” “we,” “us,” or “our” means Toys “R” Us Property Company I, LLC and its subsidiaries (“TRU Propco I”), except as expressly indicated or unless the context otherwise requires. TRU Propco I was formed on September 15, 2005 as part of a legal reorganization of the businesses of Toys “R” Us, Inc. (“TRU”). TRU, through various subsidiaries, operates or licenses Toys “R” Us and Babies “R” Us stores in the United States and foreign countries and jurisdictions. We are indirectly owned by TRU through our holding company, Wayne Real Estate Holding Company, LLC ("“Wayne Holdings"”), a direct wholly-owned subsidiary of TRU. We generate substantially all of our revenues, earnings and cash flows by leasing or subleasing properties primarily to our affiliate, Toys "“R"” Us-Delaware, Inc. ("“Toys-Delaware"”).

The Condensed Consolidated Balance Sheets as of ~~July~~October 3029, 2011 and January 29, 2011, the Condensed Consolidated Statements of Operations for the thirteen and ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010, the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Changes in Member’s Capital for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010, have been prepared by us in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim reporting, and in accordance with the requirements of this Quarterly Report on Form 10-Q. Our interim Condensed Consolidated Financial Statements are unaudited and are subject to year-end adjustments. In the opinion of management, the financial statements include all known adjustments (which consist primarily of normal, recurring accruals, estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations for the thirteen and ~~twenty~~thirty-~~six~~nine weeks then ended. The Condensed Consolidated Balance Sheet at January 29, 2011, presented herein, has been derived from our audited balance sheet included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011, but does not include all disclosures required by GAAP. These financial statements should be read in conjunction with the financial statements and footnotes thereto included within our Annual Report on Form 10-K for the fiscal year ended January 29, 2011. The results of operations for the thirteen and ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010 are not necessarily indicative of operating results for the full year.

Prior Period Corrections

WeIn ~~have~~the ~~corrected~~third ~~the~~quarter ~~Condensed~~of ~~Consolidated~~fiscal ~~Balance~~2011, ~~Sheet~~we ~~previously~~recorded ~~reported~~an asapproximate of$2 ~~July 31,~~million ~~2010~~adjustment to ~~reflect~~increase ~~certain~~Straight-line ~~related~~rent ~~party~~receivable ~~reimbursements~~from ~~and~~affiliate ~~third~~on ~~party~~our ~~liabilities,~~Condensed ~~since~~Consolidated weBalance ~~are~~Sheet ~~the~~to ~~primary~~correct ~~obligor~~a ~~and~~non-cash nocumulative ~~legal~~prior ~~right~~period ofstraight-line ~~offset~~lease ~~existed~~accounting error. As In ~~such~~addition, ~~although~~a ~~not~~corresponding ~~presented~~adjustment ~~herein,~~was werecorded ~~have~~of ~~increased Current assets and liabilities by~~ approximately $162 million to ~~correctly~~increase ~~present~~Base ~~these~~rents ~~immaterial~~for ~~items.~~the ~~The~~thirteen ~~items~~and ~~included~~thirty-nine ~~primarily~~weeks ~~represent~~ended ~~third~~October ~~party rent~~29, ~~property~~2011 ~~taxes~~on ~~and~~the ~~certain~~Condensed ~~operating~~Consolidated ~~expenses~~Statement ~~which~~of ~~are~~Operations. Management ~~paid~~concluded ~~directly~~that bythis ~~Toys-Delaware~~correction todid ~~the~~not ~~respective~~have ~~third~~a ~~party. The~~material ~~correction~~impact ~~had~~on nothe ~~effect~~financial onstatements ~~our~~for ~~previously~~the ~~reported~~thirteen ~~Results~~and ofthirty-nine ~~Operations,~~weeks ~~Member’s~~ended ~~Capital~~October ~~and~~29, no2011 ~~net~~or ~~effect~~any onpreviously ~~Cash~~reported ~~Flows~~financial statements.

InWe ~~addition,~~have incorrected the ~~second quarter of fiscal 2010, we recorded an approximate $8 million adjustment to increase Deferred third party rent liabilities on our~~ Condensed Consolidated Balance Sheet topreviously ~~correct~~reported aas ~~cumulative prior period straight-line lease accounting error. A portion~~ of ~~this~~October 30, ~~correction~~2010 ~~related~~ to ~~the~~reflect ~~understatement~~certain ofrelated ~~straight-line~~party ~~lease~~reimbursements ~~expense~~and ~~that~~third ~~occurred~~party ~~prior~~liabilities, tosince ~~the~~we ~~fiscal~~are ~~2005 reorganization transactions when~~ the ~~related~~primary ~~assets~~obligor ~~were~~and ~~sold~~no tolegal usright ~~from~~of ~~affiliates.~~offset existed. As ~~a result~~such, ~~the~~although ~~carrying~~not ~~value~~presented ofherein, ~~the~~we ~~net~~have ~~assets~~increased ~~sold~~Current toassets usand ~~during~~liabilities ~~these transactions was overstated~~ by approximately $617 million ~~and~~to ~~was~~correctly ~~recorded~~present asthese aimmaterial ~~reduction of Member’s Capital~~items. The ~~remaining~~items ~~portion~~included ofprimarily ~~the~~represent ~~correction~~third ofparty ~~approximately~~rent, $2property ~~million~~taxes ~~increased~~and ~~Rental~~certain ~~expense~~operating onexpenses ~~the~~which ~~Condensed~~are ~~Consolidated~~paid ~~Statement~~directly ofby ~~Operations.~~Toys-Delaware Into ~~addition,~~the inrespective ~~connection~~third ~~with~~parties. The ~~our~~correction ~~master~~had ~~lease~~no ~~agreement,~~effect aon ~~corresponding~~our ~~correcting~~previously ~~adjustment~~reported ~~was~~Results ~~recorded~~ of ~~approximately~~Operations, $2Member’s ~~million~~Capital toand ~~increase~~no ~~Base~~net ~~rents~~effect on ~~the~~Cash ~~Condensed~~Flows.

In addition, in the second quarter of fiscal 2010, we recorded an approximate $8 million adjustment to increase Deferred third party rent liabilities on our Condensed Consolidated Balance Sheet to correct a cumulative prior period straight-line lease accounting error. A portion of this correction related to the understatement of straight-line lease expense that occurred prior to the fiscal 2005 reorganization transactions when the related assets were sold to us from affiliates. As a result, the carrying value of the net assets sold to us during these transactions was overstated by approximately $6 million and was recorded as a reduction of Member’s capital. The remaining portion of this correction of approximately $2 million increased Rental expense on the Condensed Consolidated Statement of Operations for the thirty-nine weeks ended October 30, 2010. In addition, in connection with our master lease agreement, a corresponding correcting adjustment was recorded of approximately $2 million to increase Base rents for the thirty-nine weeks ended October 30, 2010 on the Condensed Consolidated Statement of Operations and Straight-line rent receivable from ~~affiliates~~affiliate on the Condensed Consolidated Balance Sheet for the period subsequent to the fiscal 2005 reorganization. Management concluded that this correction did not have a material impact on the financial statements for the thirty-nine weeks ended October 30, 2010 or any previously reported financial statements.

Balance Sheet for the period subsequent to the fiscal 2005 reorganization. Management concluded that this correction did not have a material impact for the thirteen or twenty-six weeks ended July 31, 2010 or any previously reported financial statements.

2. Real estate, net

(In thousands)	~~July~~October 3029, 2011			January 29, 2011
Land	$	277,~~725~~001		$	279,325
Buildings	~~753~~752,~~412~~151			755,558
Leasehold improvements	407,~~998~~578			412,582
	1,439,135			1,447,465
	1,436,730			1,447,465
Less: accumulated depreciation	(~~542~~549,~~409~~781		)	(530,349		)
Total	$	~~896~~886,~~726~~949		$	917,116

During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, we sold ~~two~~three owned properties to third parties for gross proceeds of approximately $89 million, resulting in a net gain of less than $1 million. Additionally, the master lease agreement requires Toys-Delaware to make a payment to the Company upon termination of the lease in conjunction with the successful execution of the sale of such properties by the Company to a third party if the proceeds from the sale are less than the net present value of the base rent for such property over the remaining term for such property, discounted at 10% per annum. We recorded a termination ~~payment~~payments of approximately $46 million for the properties sold during the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, in Earnings (loss) from discontinued operations on the Condensed Consolidated Statement of Operations. Termination payments are included in Cash Flows from Operating Activities.

Net properties held for sale

Assets held for sale represent assets owned by us that our management has committed to sell in the near term. The following assets are classified as held for sale:

(In thousands)	~~July~~October 3029, 2011			January 29, 2011
Land	$	2,232		$	3,649
Buildings	2,111			4,166
Leasehold improvements	738			1,359
	5,081			9,174
Less: accumulated depreciation	(1,081		)	(2,499		)
Total	$	4,000		$	6,675

During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, we sold ~~two~~three properties, one of which was classified as held for sale in fiscal 2010. The property which was previously classified as held for sale, was sold to an unrelated third party for gross proceeds of approximately $3 million, ~~which~~resulting ~~resulted~~ in a nominal loss.

Subsequent to the third quarter of fiscal 2011, the property classified as held for sale as of October 29, 2011, was sold for gross proceeds of approximately $3 million. Additionally, we recorded a termination payment of approximately $2 million in the fourth quarter of fiscal 2011.

3. Discontinued operations

During fiscal 2010, we classified three owned properties as assets held for sale, one of which was sold in fiscal 2010, ~~and~~ one of which was sold in the second quarter of fiscal 2011 and one which was sold subsequent to the end of the third quarter of fiscal 2011. Additionally, during the ~~first~~thirty-nine ~~quarter~~weeks ofended ~~fiscal~~October 29, 2011, we sold ~~one~~two owned ~~property~~properties to a third party not previously classified as assets held for sale. ~~during~~Lastly, ~~fiscal~~we ~~2010~~classified a property in discontinued operations as a result of an early termination of a ground lease. Refer to Note 2 entitled "“Real estate, net"” for further details regarding the properties sold in fiscal 2011 and corresponding termination payments.

We reported the operating results for these properties as Earnings (loss) from discontinued operations in the Condensed Consolidated Statements of Operations for the thirteen and ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010. The operating results for these properties classified as discontinued operations through ~~July~~October 3029, 2011 were derived from our historical financial information and have been segregated from continuing operations and reported separately in the Condensed Consolidated Statements of Operations for the thirteen and ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010, respectively. These amounts have been summarized below:

	13 Weeks Ended
(In thousands)	~~July~~October 3029, 2011		~~July~~October 3130, 2010
Total revenues	$	~~353~~158	$	~~722~~953
Earnings from discontinued operations	$	2,415	$	57
Earnings (loss) from discontinued operations	$	2,945	$	(277	)
	26 Weeks Ended
	39 Weeks Ended
(In thousands)	~~July~~October 3029, 2011		~~July~~October 3130, 2010
Total revenues	$	~~886~~1,511	$	12,~~447~~889
Earnings from discontinued operations	$	57,~~026~~976	$	~~274~~131

4. Long-term debt

As of ~~July~~October 3029, 2011 and January 29, 2011, the carrying value of our debt was $~~930~~931 million and $929 million, respectively, with fair values of approximately $1,~~076~~058 million and $1,090 million, respectively. The fair value of our long-term debt was estimated based on a quoted market price and other pertinent information available to management as of the end of the respective periods.

In accordance with the indenture governing the 10.75% senior unsecured notes due fiscal 2017 (the "“Notes"”), we commenced a tender offer on May 13, 2011 to purchase up to an aggregate principal amount of approximately $25 million of the Notes for cash. The tender offer expired on June 13, 2011, with no holders opting to tender at that time. Refer to the Annual Report on Form 10-K for further details on indebtedness.

Refer to the Annual Report on Form 10-K for further details on indebtedness.

5 . Member’s capital

Wayne Holdings, is the direct owner of 100% of our limited liability company interests. We evaluate our cash balances on an ongoing basis and periodically distribute cash to our ultimate parent ~~companies~~company, TRU. From time to time, a portion of our cash may also be used to tender for a portion of the outstanding Notes as permitted by the indenture governing the Notes. If holders of the Notes elect not to tender their Notes, we may, at such time, in accordance with the indenture governing the Notes, make certain restricted payments, including distributing cash to TRU.

In accordance with the indenture governing the Notes, we commenced a tender offer on May 13, 2011 to purchase up to an aggregate principal amount of approximately $25 million of the Notes for cash. The tender offer expired on June 13, 2011, with no holders opting to tender at that time. Therefore, as permitted by the indenture, we made cash distributions of dividends of approximately $25 million to TRU on June 20, 2011.

During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, we made cash distributions of $2946 million and $134 million in dividends and return of capital, respectively, which includes the cash distributions of approximately $25 million to TRU on June 20, 2011 related to the expired tender offer. During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3130, 2010, we made cash distributions of $2233 million and $2017 million in dividends and return of capital, respectively.

During the thirty-nine weeks ended October 30, 2010, we recorded an approximate $6 million Adjustment to the carrying value of net assets previously acquired on the Condensed Statement of Changes in Member's Capital to correct the initial carrying value of net assets contributed to us as part of the fiscal 2005 reorganization transactions. Refer to Note 1 entitled “Basis of Presentation” for further details.

6. Related party transactions

Rental Revenues

Our rental ~~revenue~~revenues isare derived from payments received under the leasing arrangements we have entered into with Toys-Delaware. The master lease agreement provides for Toys-Delaware to reimburse us for property related costs including, among others, real estate taxes and common area maintenance charges. Some of these costs are directly paid by Toys-Delaware and are recorded as both an expense and a tenant reimbursement. During the thirteen weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010, we earned related party Base rent revenues of approximately $6062 million and $6460 million, respectively. During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010, we earned related party Base rent revenues of approximately $~~121~~183 million and $~~126~~185 million, respectively. In addition, we recorded Tenant reimbursements of approximately $11 million and $10 million under our leasing arrangements with Toys-Delaware during the thirteen weeks ended October 29, 2011 and October 30, 2010, respectively. During the thirty-nine weeks ended October 29, 2011 and October 30, 2010, we recorded Tenant reimbursements of approximately $32 million and $31 million, respectively.

7Termination Payments

~~arrangements~~As ~~with~~discussed in Note 2 entitled “Real estate, net”, the master lease agreement requires Toys-Delaware ~~during~~to ~~each~~make a payment to the Company upon termination of a lease in conjunction with the ~~thirteen~~successful ~~weeks~~execution ~~ended~~of ~~July 30,~~the ~~2011~~sale ~~and~~of ~~July 31~~such properties by the Company to a third party if the proceeds from the sale are less than the net present value of the base rent for such property over the remaining term for such property, ~~2010~~discounted at 10% per annum. ~~During~~We recorded termination payments of approximately $2 million and $6 million for the ~~twenty~~thirteen weeks and thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, ~~and~~respectively, ~~July 31~~in Earnings (loss) from discontinued operations on the Condensed Consolidated Statement of Operations. Additionally, ~~2010~~subsequent to the third quarter of fiscal 2011, we sold a property and recorded ~~Tenant~~a ~~reimbursements~~termination payment of approximately $212 million~~, respectively~~.

Management Service Fees

Toys-Delaware provides a majority of the centralized corporate functions, including accounting, human resources, legal, tax and treasury services to TRU, other affiliates and us under a Domestic Services Agreement (“Agreement”). The costs are based on a formula for each affiliate, as defined in the Agreement, and are recorded inon Other operating expenses in the Condensed Consolidated Statements of Operations. During each of the thirteen weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010, the amounts charged to us for these services were approximately $1 million~~, respectively~~. During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 and ~~July~~October 3130, 2010, the amounts charged to us for these services were approximately $23 million and $4 million, respectively.

7. Due from affiliate, net

As of ~~July~~October 3029, 2011 and January 29, 2011, Due from affiliate, net of $1011 million and $7 million, respectively, primarily represents ~~Base~~real ~~rents~~estate ~~and~~taxes, certain property reimbursements and base rents owed to us by Toys-Delaware.

8. Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs” (“ASU 2011-04”). The amendments in this ASU generally represent clarification of Topic 820, but also include instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This update results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and International Financial Reporting Standards (“IFRS”). The amendments are effective for interim and annual periods beginning after December 15, 2011 and are to be applied prospectively. Early application is not permitted. We do not expect the adoption of ASU 2011-04 will have a material impact on our Condensed Consolidated Financial Statements.


Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations

As used herein the “Company,” “we,” “us,” or “our” means Toys “R” Us Property Company I, LLC and its subsidiaries (“TRU Propco I”), except as expressly indicated or unless the content otherwise requires. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help facilitate an understanding of our financial condition and our historical results of operations for the periods presented. This MD&A should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended January 29, 2011 and Condensed Consolidated Financial Statements and the accompanying notes thereto, and contains forward-looking statements that involve risks and uncertainties. See “Forward-Looking Statements” below.

Our Business

We are a special purpose entity, owned indirectly by Toys “R” Us, Inc. (“TRU”). Certain of our wholly-owned special purpose subsidiaries own fee and leasehold interests in ~~354~~353 properties in various retail markets throughout the United States. Under an operating company/property company structure, we lease these properties on a triple-net basis, to Toys “R” Us – Delaware, Inc. (“Toys-Delaware”) ~~on a triple-net basis~~, the operating entity for all of TRU’s North American businesses. Substantially all of our revenues and cash flows are derived from payments from Toys-Delaware under the Amended and Restated Master Lease Agreement (the “TRU Propco I Master Lease”). For quarterly financial statements and other information about our master tenant, Toys-Delaware, see Exhibit 99.1 to this report.

Results of Operations

Earnings from Continuing Operations

13 Weeks Ended

2639 Weeks Ended

($ In thousands)

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

Earnings from continuing operations

1114,~~428~~064

1011,~~620~~641

~~808~~2,423

720.68

2438,~~245~~304

2133,~~559~~066

25,~~686~~238

1215.58

Earnings from continuing operations increased by $02.84 million, or 720.68%, to $1114.41 million for the thirteen weeks ended ~~July~~October 3029, 2011, compared to $1011.67 million for the thirteen weeks ended ~~July~~October 3130, 2010. Earnings from continuing operations increased primarily ~~due~~as to a ~~decrease~~result of ~~$3.7~~an ~~million~~increase in ~~Total~~Base ~~operating~~rents ~~expenses~~of ~~primarily~~$2.2 million predominantly due to ~~decreases~~a inprior ~~Depreciation~~period ~~and~~non-cash ~~Rental~~cumulative ~~expense,~~straight-line ~~partially~~lease ~~offset~~accounting bycorrection arecorded ~~decrease of $2.9 million~~ in ~~Total~~the ~~revenues~~third ~~primarily~~quarter ~~as a result~~ of afiscal ~~decrease in Base rents~~2011.

Earnings from continuing operations increased by $25.72 million, or 1215.58%, to $2438.3 million for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, compared to $2133.61 million for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3130, 2010. Earnings from continuing operations increased primarily due to a decrease in Depreciation expense of $53.21 million inpredominantly ~~Total operating expenses primarily~~ due to ~~decreases~~assets inthat ~~Depreciation~~became ~~and~~fully ~~Rental~~depreciated ~~expense,~~in ~~partially~~fiscal ~~offset~~2010 byand a decrease in Rental expense of $21.38 million inprimarily ~~Total~~due ~~revenues~~to ~~primarily~~a asnon-cash acumulative ~~result~~straight-line oflease aaccounting ~~decrease~~correction recorded in ~~Base~~the ~~rents~~second quarter of fiscal 2010.

Total Revenues

	13 Weeks Ended									2639 Weeks Ended
($ In thousands)	~~July~~October 3029, 2011		~~July~~October 3130, 2010		$ Change			% Change		~~July~~October 3029, 2011		~~July~~October 3130, 2010		$ Change			% Change
Total revenues	$	7073,~~857~~370	$	7370,~~711~~048	$	(23,~~854~~322	)	(34.97	)%	$	~~143~~216,~~389~~290	$	~~145~~215,~~706~~265	$	(21,~~317~~025	)	(10.65	)%

Total revenues ~~decreased~~increased by $23.83 million, or 34.97%, to $7073.94 million for the thirteen weeks ended ~~July~~October 3029, 2011, compared to $7370.71 million for the thirteen weeks ended ~~July~~October ~~31, 2010, and decreased by $2.3 million, or 1.6%, to $143.4 million for the twenty-six weeks ended July~~ 30, ~~2011, compared to $145.7 million for the twenty-six weeks ended July 31,~~ 2010. The ~~decrease~~increase ~~for both periods~~ was ~~predominantly~~primarily due to aan ~~decrease~~increase in Base rents, ~~which~~of ~~was~~$2.2 ~~primarily~~million predominantly due to a non-cash cumulative straight-line lease accounting correction ~~of $2.5 million~~ recorded in the ~~second~~third quarter of fiscal ~~2010~~2011, as well as an increase in Tenant reimbursements of $1.1 million.

Total revenues increased by $1.0 million, or 0.5%, to $216.3 million for the thirty-nine weeks ended October 29, 2011, compared to $215.3 million for the thirty-nine weeks ended October 30, 2010. The increase was primarily due to an increase in Tenant reimbursements of $1.0 million.

Depreciation

	13 Weeks Ended									2639 Weeks Ended
($ In thousands)	~~July~~October 3029, 2011		~~July~~October 3130, 2010		$ Change			% Change		~~July~~October 3029, 2011		~~July~~October 3130, 2010		$ Change			% Change
Depreciation	$	8,~~446~~071	$	108,~~001~~417	$	(~~1,555~~346	)	(154.51	)%	$	1624,~~939~~621	$	1927,~~426~~719	$	(23,~~487~~098	)	(1211.82	)%

Depreciation decreased by $10.63 million, or 154.51%, to $8.41 million for the thirteen weeks ended ~~July~~October 3029, 2011, compared to $108.04 million for the thirteen weeks ended ~~July~~October ~~31, 2010, and decreased by $2.5 million, or 12.8%, to $16.9 million for the twenty-six weeks ended July~~ 30, ~~2011, compared to $19.4 million for the twenty-six weeks ended July 31,~~ 2010. ~~The decrease for both periods was primarily due to assets that became fully depreciated in fiscal 2010.~~

Depreciation decreased by $3.1 million, or 11.2%, to $24.6 million for the thirty-nine weeks ended October 29, 2011, compared to $27.7 million for the thirty-nine weeks ended October 30, 2010. The decrease was primarily due to assets that became fully depreciated in fiscal 2010.

Rental Expense

	13 Weeks Ended									2639 Weeks Ended
($ In thousands)	~~July~~October 3029, 2011		~~July~~October 3130, 2010		$ Change			% Change		~~July~~October 3029, 2011		~~July~~October 3130, 2010		$ Change			% Change
Rental expense	$	12,~~365~~263	$	1412,~~505~~380	$	(~~2,140~~117	)	(140.89	)%	$	2436,~~687~~971	$	2638,~~552~~798	$	(1,~~865~~827	)	(74.07	)%

Rental expense ~~decreased~~had bya ~~$2.1~~nominal ~~million,~~decrease ~~or 14.8%, to $12.4 million~~ for the thirteen weeks ended ~~July~~October 3029, 2011, compared to ~~$14.5 million for~~ the ~~thirteen~~same ~~weeks~~period ~~ended~~last ~~July 31, 2010, and decreased by $1~~year.9 million, or 7.0%, to $24.7 million for the twenty-six weeks ended July 30, 2011, compared to $26.6 million for the twenty-six weeks ended July 31, 2010. The decrease for both periods was primarily due to a non-cash cumulative straight-line lease accounting correction of $2.5 million recorded during the second quarter of fiscal 2010.

Rental expense decreased by $1.8 million, or 4.7%, to $37.0 million for the thirty-nine weeks ended October 29, 2011, compared to $38.8 million for the thirty-nine weeks ended October 30, 2010. The decrease was primarily due to a $2.5 million non-cash cumulative straight-line lease accounting correction recorded in the second quarter of fiscal 2010.

Common Area Maintenance Expenses

13 Weeks Ended

2639 Weeks Ended

($ In thousands)

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

Common area maintenance expenses

10,~~337~~694

109,~~097~~604

~~240~~1,090

211.43

2031,~~884~~482

2030,~~995~~502

~~(111~~980

)

(03.52

Common area maintenance expenses increased by $01.21 million, or 211.43%, to $10.37 million for the thirteen weeks ended ~~July~~October 3029, 2011, compared to $109.16 million for the thirteen weeks ended ~~July~~October 3130, 2010, and ~~decreased~~increased by $0.1.0 million, or 03.52%, to $2031.95 million for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, compared to $2130.05 million for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3130, 2010. These expenses are fully reimbursed by our tenant under the TRU Propco I Master Lease, and are reflected in Base rents, which is a component of Total revenues.

Other Operating Expenses

13 Weeks Ended

2639 Weeks Ended

($ In thousands)

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

Other operating expenses

1,~~359~~591

1,~~648~~478

~~(289~~113

)

~~(17~~7.56

24,~~721~~312

34,~~419~~897

(~~698~~585

)

(2011.49

Other operating expenses ~~decreased~~had bya ~~$0.3~~nominal ~~million,~~increase ~~or 17.5%, to $1.3 million~~ for the thirteen weeks ended ~~July~~October 3029, 2011, compared to ~~$1.6 million for~~ the ~~thirteen~~same ~~weeks~~period ~~ended~~last ~~July 31, 2010, and decreased by $0~~year.7 million, or 20.4%, to $2.7 million for the twenty-six weeks ended July 30, 2011, compared to $3.4 million for the twenty-six weeks ended July 31, 2010. The decrease in both periods was primarily due to a decrease in management service fees based on a decrease in the fee allocation as determined by management. See Note 6 to the Condensed Financial Statements entitled “Related party transactions” for further details.

Other operating expenses decreased by $0.6 million, or 11.9%, to $4.3 million for the thirty-nine weeks ended October 29, 2011, compared to $4.9 million for the thirty-nine weeks ended October 30, 2010. The decrease was primarily due to a decrease in management service fees based on a decrease in the fee allocation as determined by management in accordance with the Domestic Services Agreement.

Interest Expense

13 Weeks Ended

2639 Weeks Ended

($ In thousands)

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

~~July~~October 3029, 2011

~~July~~October 3130, 2010

$ Change

% Change

Interest expense

26,~~922~~687

26,~~840~~528

82159

0.36

5380,~~913~~600

5380,~~755~~283

~~158~~317

0.34

Interest expense had a nominal increase for the thirteen and twenty-six weeks ended July 30, 2011, compared to the same periods last year.

Earnings from Discontinued Operations

	13 Weeks Ended								26 Weeks Ended
($ In thousands)	July 30, 2011		July 31, 2010		$ Change		% Change		July 30, 2011		July 31, 2010		$ Change		% Change
Earnings from discontinued operations	$	2,415	$	57	$	2,358	4,136.8	%	$	5,026	$	274	$	4,752	1,734.3	%

Earnings from discontinued operations increased by $2.3 million to $2.4 million for the thirteen weeks ended July 30, 2011,

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~~compared~~Interest toexpense ~~earnings~~had ofa ~~$0.1~~nominal ~~million~~increase for the thirteen and thirty-nine weeks ended ~~July~~October 3129, 2010. The increase was primarily due to a termination payment of approximately $2.2 million from Toys-Delaware as required under the TRU Propco I Master Lease for a property sold in the second quarter of fiscal 2011., ~~See~~compared ~~Note 3~~ to the ~~Condensed~~same ~~Consolidated~~periods ~~Financial~~last ~~Statements entitled “Discontinued operations” for further details~~year.

Earnings ~~from~~(loss) discontinued operations increased by $4.7 million to $5.0 million for the twenty-six weeks ended July 30, 2011, compared to earnings of $0.3 million for the twenty-six weeks ended July 31, 2010. The increase was primarily due to termination payments of approximately $3.9 million from Toys-Delaware as required under the TRU Propco I Master Lease for two properties sold during the twenty-six weeks ended July 30, 2011. In addition, we recorded a net gain of approximately $0.4 million from the sale of these two properties during the same period. See Note 3 to the Condensed Consolidated Financial Statements entitled “Discontinued ~~operations” for further details.~~ Operations



	13 Weeks Ended									39 Weeks Ended
($ In thousands)	October 29, 2011		October 30, 2010			$ Change		% Change		October 29, 2011		October 30, 2010		$ Change		% Change
Earnings (loss) from discontinued operations	$	2,945	$	(277	)	$	3,222	(1,163.2	)%	$	7,976	$	131	$	7,845	5,988.5	%

Earnings (loss) from discontinued operations increased by $3.2 million to $2.9 million for the thirteen weeks ended October 29, 2011, compared to a loss of $0.3 million for the thirteen weeks ended October 30, 2010. The increase was primarily due to a $2.4 million straight-line adjustment due to an early termination of a ground lease in the fourth quarter of fiscal 2011 as well as a termination payment of approximately $2.3 million from Toys-Delaware as required under the TRU Propco I Master Lease for a property sold in the third quarter of fiscal 2011. These increases were partially offset by accelerated depreciation associated with the termination of a ground lease in the fourth quarter of fiscal 2011.

Earnings (loss) from discontinued operations increased by $7.8 million to $7.9 million for the thirty-nine weeks ended October 29, 2011, compared to earnings of $0.1 million for the thirty-nine weeks ended October 30, 2010. The increase was primarily due to termination payments of approximately $6.2 million from Toys-Delaware as required under the TRU Propco I Master Lease for three properties sold during the thirty-nine weeks ended October 29, 2011 as well as a $2.4 million straight-line adjustment due to an early termination of a ground lease in the fourth quarter of fiscal 2011. These increases were partially offset by accelerated depreciation associated with the termination of a ground lease in the fourth quarter of fiscal 2011. See Note 3 to the Condensed Consolidated Financial Statements entitled “Discontinued operations” for further details.

Liquidity and Capital Resources

Overview

As of ~~July~~October 3029, 2011, we were in compliance with all of our covenants related to the 10.75% senior unsecured notes due fiscal 2017 (the “Notes”).

Our largest source of operating cash flows is cash collections from our lessees. In general, we utilize our cash to service debt, pay normal operating costs and at the discretion of our sole member, based on the recommendation of our management, and as permitted by the indenture governing the Notes, declare and pay dividends or make distributions. From time to time, a portion of our cash may also be used to tender for a portion of the outstanding Notes as permitted by the indenture governing the Notes. Refer to Note 4 to the Condensed Consolidated Financial Statements entitled “Long-term debt” for further details regarding the tender offor the Notes. We have been able to meet our cash needs principally by using cash on hand and cash flows from operations and we believe that cash from operations along with existing cash will be sufficient to fund expected cash flow requirements for the next twelve months.

Cash Flows

	26 Weeks Ended
	39 Weeks Ended
(In thousands)	~~July~~October 3029, 2011			~~July~~October 3130, 2010			Change
Net cash provided by operating activities	$	3882,~~224~~202		$	3376,~~960~~656		$	45,~~264~~546
Net cash provided by investing activities	7,~~358~~538			907			6,~~451~~631
Net cash used in financing activities	(4149,~~626~~140		)	(4150,~~706~~372		)	801,232
Net increase (decrease) during period in cash	$	3,956		$	(6,839	)	$	10,795
Net increase during period in cash	$	40,600		$	27,191		$	13,409

Cash Flows Provided by Operating Activities

During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, net cash provided by operating activities was $3882.2 million compared to $3476.07 million for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3130, 2010. The increase in net cash provided by operating activities was primarily due to termination payments received of approximately $36.92 million from Toys-Delaware as required under the TRU Propco I Master Lease for the properties sold during the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011.

Cash Flows Provided by Investing Activities

During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, net cash provided by investing activities was $7.45 million compared to $0.9 million for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3130, 2010. The increase in net cash provided by investing activities was primarily due to an increase of $7.07 million of proceeds from the sale of real estate, partially offset by ~~an increase in~~ capital expenditures of $01.51 million incurred in the current year.

Cash Flows Used in Financing Activities

During the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011, net cash used in financing activities was $4149.61 million compared to $4150.74 million for the ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3130, 2010. The decrease in net cash used in financing activities was primarily due to anthe ~~increase~~Long-term debt borrowings in ~~debt,~~fiscal ~~partially~~2011 ~~offset~~associated bywith ancapital ~~increase~~project finance obligations and capitalized debt issuance costs incurred in ~~distributions~~fiscal 2010.

Debt

Refer to the Annual Report on Form 10-K and Note 4 to the Condensed Consolidated Financial Statements entitled “Long-term debt” for further details regarding our debt.

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Contractual Obligations and Commitments

Our contractual obligations consist mainly of payments related to Long-term debt and related interest and operating leases related to real estate used in the operation of our business. Refer to the “Contractual Obligations and Commitments” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011, for details on our contractual obligations and commitments.

Critical Accounting Policies

Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures of contingent assets and liabilities as of the date of the financial statements and during the applicable periods. We base these estimates on historical experience and on other factors that we believe are reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions and could have a material impact on our Condensed Consolidated Financial Statements. Refer to the Annual Report on Form 10-K for the fiscal year ended January 29, 2011, for a discussion of critical accounting policies.

Recently Adopted Accounting Pronouncements

None.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. 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,” “expect,” “believe,” “intend,” “foresee,” “will,” “may,” and similar words or phrases. These statements discuss, among other things, our strategy, future financial or operational performance, anticipated cost savings, results of restructurings, cash flows generated from operating activities, anticipated developments, future financings, targets and future occurrences and trends.

These statements are subject to risks, uncertainties, and other factors, including, among others, competition in the retail industry, seasonality of Toys-Delaware’s business, changes in consumer preferences and consumer spending patterns, general economic conditions in the United States and other countries in which Toys-Delaware conducts its business, Toys-Delaware’s ability to implement its strategy, our, Toys-Delaware’s and TRU’s respective substantial levels of indebtedness and related debt-service obligations and the covenants in their and our respective debt agreements, availability of adequate financing to us, Toys-Delaware and TRU, Toys-Delaware’s dependence on key vendors of merchandise, international events affecting the delivery of toys and other products to Toys-Delaware’s stores, and such risks, uncertainties and factors set forth under Item 1A entitled “RISK FACTORS” of our Annual Report on Form 10-K filed on April 29, 2011 and in our reports and documents filed with the United States Securities and Exchange Commission (which reports and documents should be read in conjunction with this Quarterly Report on Form 10-Q). 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. Actual results and outcomes may differ materially from anticipated results or outcomes discussed in any forward-looking statement.~~

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these statements in light of subsequent events or developments. Actual results and outcomes may differ materially from anticipated results or outcomes discussed in any forward-looking statement.


Item 3.	Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in our exposure to market risk during the thirteen and ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011. For a discussion of our exposure to market risk, refer to Item 7A entitled “QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK” in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011.


Item 4.	Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures that are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the principal executive and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the principal executive and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

We have evaluated, under the supervision and with the participation of our management, including our principal executive and principal financial officer, the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report.

Based on that evaluation, our principal executive and principal financial officer has concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to accomplish their objectives at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the ~~second~~third quarter of fiscal 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION


Item 1.	Legal Proceedings

Although we do not currently have material legal proceedings pending against us, in the future, we may be involved in various lawsuits, claims and proceedings incident to the ordinary course of business. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. The results of these lawsuits, claims and proceedings cannot be predicted with certainty.


Item 1A.	Risk Factors

As of the date of this report, there have been no material changes to the information related to Item 1A entitled “RISK FACTORS” disclosed in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011.


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

None.


Item 3.	Defaults Upon Senior Securities

None.


Item 4.	(Removed and Reserved)


Item 5.	Other Information

None.


Item 6.	Exhibits

~~Required~~See ~~exhibits~~the ~~are~~Index ~~listed~~to inExhibits immediately following the signature page hereto, which Index to Exhibits ~~and~~is ~~are~~ incorporated herein by reference.

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SIGNATURE

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

		TOYS “R” US PROPERTY COMPANY I, LLC
		(Registrant)
Date: September 13, 2011		/s/ F. Clay Creasey, Jr.
Date: December 13, 2011		/s/ F. Clay Creasey, Jr.
		F. Clay Creasey, Jr.
		Executive Vice President and Chief Financial Officer

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INDEX TO EXHIBITS

The following is a list of all exhibits filed or furnished as part of this report:

Exhibit No.		Description
3.1		Amended and Restated Certificate of Formation of TRU 2005 RE Holding Co., I, LLC, changing its name from TRU 2005 RE Holding Co. I, LLC to Toys “R” Us Property Company I, LLC (filed as Exhibit 3.1 to Registrant’s Form S-4 registration statement, filed on December 24, 2009 and incorporated herein by reference).
3.2		Second Amended and Restated Limited Liability Company Agreement of Toys “R” Us Property Company I, LLC (filed as Exhibit 3.2 to the Registrant’s Form S-4 registration statement, filed on December 24, 2009 and incorporated herein by reference).
31.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a – 14(a) and Rule 15d – 14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1		Toys “R” Us – Delaware, Inc. financial statements for the thirteen and ~~twenty~~thirty-~~six~~nine weeks ended ~~July~~October 3029, 2011 (filed as Exhibit 99.1 to the Form 8-K filed by Toys “R” Us, Inc. on ~~September~~December 13, 2011 and incorporated herein by reference).
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

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