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 ~~October~~April 2928, ~~2011~~2012

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 ~~December~~June 1312, ~~2011~~2012, 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 October 29, 2011 and January 29, 2011	1
Condensed Consolidated Balance Sheets as of April 28, 2012 and January 28, 2012	1
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 Operations for the thirteen weeks ended April 28, 2012 and April 30, 2011	2
Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended October 29, 2011 and October 30, 2010	3
Condensed Consolidated Statements of Cash Flows for the thirteen weeks ended April 28, 2012 and April 30, 2011	3
Condensed Consolidated Statements of Changes in Member’s Capital for the thirty-nine weeks ended October 29, 2011 and October 30, 2010	4
Condensed Consolidated Statements of Changes in Member’s Capital for the thirteen weeks ended April 28, 2012 and April 30, 2011	4
Notes to the Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	98
Item 3. Quantitative and Qualitative Disclosures About Market Risk	1211
Item 4. Controls and Procedures	1211
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 4. Mine Safety Disclosures	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)	~~October~~April 2928, ~~2011~~2012		January 2928, ~~2011~~2012
ASSETS
Current Assets:
Cash	$	80112,~~308~~982	$	3972,~~708~~111
Due from affiliate, net	103,~~528~~817		69,~~649~~882
Prepaid expenses and other current assets	7,020		6,151
Lease allowance receivable	4,680		—
Net properties held for sale	4,000		6,675
Prepaid expenses	6,730		2,202
Total current assets	~~101~~128,~~856~~209		5984,~~183~~195
Real Estate, Net:
Land	277,001		~~279~~277,~~325~~001
Buildings, net	~~497~~489,~~822~~117		~~512~~493,~~510~~883
Leasehold improvements, net	~~112~~105,~~126~~752		~~125~~109,~~281~~683
Total real estate, net	~~886~~871,~~949~~870		~~917~~880,~~116~~567
Straight-line rent receivable from affiliate	~~120~~140,~~297~~375		97129,~~930~~411
Debt issuance costs	1615,~~740~~275		1816,~~938~~007
Other assets	~~287~~279		~~273~~283
Total Assets	$	1,~~126~~156,~~129~~008	$	1,~~093~~110,~~440~~463
LIABILITIES AND MEMBER’S CAPITAL
Current Liabilities:
Accrued interest	$	29,~~694~~459	$	43,~~232~~928
Real estate taxes payable	1612,~~281~~215		1011,~~383~~075
Deferred third party rent liabilities	~~813~~1,508		~~846~~1,175
Deferred related party revenue	~~914~~940		~~925~~1,365
Other current liabilities	~~944~~1,136		~~923~~1,422
Total current liabilities	4845,~~646~~258		1718,~~309~~965
Long-term debt	~~931~~934,~~467~~166		~~928~~933,~~597~~516
Deferred third party rent liabilities	~~106~~114,~~848~~152		~~104~~110,~~421~~159
Other non-current liabilities	281,512		281,537
Member's capital	3960,~~140~~920		4346,~~085~~286
Total Liabilities and Member's Capital	$	1,~~126~~156,~~129~~008	$	1,~~093~~110,~~440~~463

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

~~39 Weeks Ended~~

(In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

~~October 29, 2011~~

~~October 30, 2010~~

Rental revenues:

Base rents

6261,~~676~~375

6061,~~444~~445

~~184,808~~

~~184,763~~

Tenant reimbursements

10,~~694~~024

910,~~604~~390

~~31,482~~

~~30,502~~

Total revenues

7371,~~370~~399

7071,~~048~~835

~~216,290~~

~~215,265~~

Depreciation

8,~~071~~492

8,~~417~~246

~~24,621~~

~~27,719~~

Rental expense

12,~~263~~134

12,~~380~~094

~~36,971~~

~~38,798~~

Common area maintenance expenses

10,~~694~~024

910,~~604~~390

~~31,482~~

~~30,502~~

Other operating expenses

1,~~591~~192

1,~~478~~362

~~4,312~~

~~4,897~~

Total operating expenses

3231,~~619~~842

3132,~~879~~092

~~97,386~~

~~101,916~~

Operating earnings

4039,~~751~~557

3839,~~169~~743

~~118,904~~

~~113,349~~

Interest expense

26,~~687~~999

26,~~528~~991

~~80,600~~

~~80,283~~

Earnings from continuing operations

1412,~~064~~558

1112,~~641~~752

~~38,304~~

~~33,066~~

Earnings (loss) from discontinued operations

2,945

(277

)

7,976

131

Earnings from discontinued operations

2,076

2,676

Net earnings

1714,~~009~~634

1115,~~364~~428

~~46,280~~

~~33,197~~

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)

	39 Weeks Ended
	13 Weeks Ended
(In thousands)	~~October~~April 2928, ~~2011~~2012			~~October~~April 30, ~~2010~~2011
Cash Flows from Operating Activities:
Net earnings	$	4614,~~280~~634		$	3315,~~197~~428
Adjustments to reconcile Net earnings to net cash provided by operating activities:
Depreciation	278,~~189~~697			298,~~375~~530
Amortization of debt issuance costs	~~2,198~~732			~~2,161~~732
Amortization of original issue discount	~~1,785~~650			~~1,601~~586
(Gain) loss on sale of real estate	(216		)	333
Gain on sale of real estate	—			(418		)
Other non-cash charges	64(25		)	~~461~~64
Changes in operating assets and liabilities:
Due from affiliate, net	(4,703		)	(5,540		)
Due from affiliate, net and Lease allowance receivable	1,385			(2,719		)
Prepaid expenses and other current assets	(869		)	(416		)
Prepaid expenses	(4,528		)	(655		)
Straight-line rent receivable from affiliate, Other assets and Deferred third party rent liabilities	(206,~~896~~634		)	(165,~~061~~235		)
Accrued interest, Real estate taxes payable and Other current liabilities	3126,~~381~~385			3126,~~547~~620
Deferred related party revenue	(11425		)	(2925		)
Net cash provided by operating activities	8240,~~202~~871			7642,~~656~~008
Cash Flows from Investing Activities:
Proceeds from the sale of real estate	~~8,588~~—			~~907~~4,586
Capital expenditures	(1,050		)	—
Net cash provided by investing activities	—			4,586
Net cash provided by investing activities	7,538			907
Cash Flows from Financing Activities:
Distributions	~~(50,225~~—		)	(508,~~006~~266		)
Long-term debt borrowings	1,085			—
Net cash used in financing activities	—			(8,266		)
Capitalized debt issuance/extension costs	—			(366		)
Net cash used in financing activities	(49,140		)	(50,372		)
Cash:
Net increase during period	40,~~600~~871			2738,~~191~~328
Cash at beginning of period	3972,~~708~~111			2539,~~037~~708
Cash at end of period	$	80112,~~308~~982		$	5278,~~228~~036
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	33,197
Adjustment to the carrying value of net assets previously acquired	(5,599		)
Distributions	(50,006		)
Balance, October 30, 2010	$	39,885
Balance, January 29, 2011	$	43,085
Net earnings for the period	46,280
Net earnings	15,428
Distributions	(508,~~225~~266		)
Balance, October 29, 2011	$	39,140
Balance, April 30, 2011	$	50,247
Balance, January 28, 2012	$	46,286
Net earnings	14,634
Balance, April 28, 2012	$	60,920

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 Company is one reportable segment.

The Condensed Consolidated Balance Sheets as of ~~October~~April 2928, ~~2011~~2012 and January 2928, ~~2011~~2012, the Condensed Consolidated Statements of Operations ~~for the thirteen and thirty-nine weeks ended October 29~~, ~~2011 and October 30, 2010,~~ the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Changes in Member’s Capital for the ~~thirty-nine~~thirteen weeks ended ~~October~~April 2928, ~~2011~~2012 and ~~October~~April 30, ~~2010~~2011, 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 thirty-nine~~ weeks then ended. The Condensed Consolidated Balance Sheet at January 2928, ~~2011~~2012, 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 2928, ~~2011~~2012, 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 2928, ~~2011~~2012. ~~The results of operations for the thirteen and thirty-nine weeks ended October 29, 2011 and October 30, 2010 are not necessarily indicative of operating results for the full year.~~

Prior Period Corrections

In the third quarter of fiscal 2011, we recorded an approximate $2 million adjustment to increase Straight-line rent receivable from affiliate on our Condensed Consolidated Balance Sheet to correct a non-cash cumulative prior period straight-line lease accounting error. In addition, a corresponding adjustment was recorded of approximately $2 million to increase Base rents for the thirteen and thirty-nine weeks ended October 29, 2011 on the Condensed Consolidated Statement of Operations. Management concluded that this correction did not have a material impact on the financial statements for the thirteen and thirty-nine weeks ended October 29, 2011 or any previously reported financial statements.

We have corrected the Condensed Consolidated Balance Sheet previously reported as of October 30, 2010 to reflect certain related party reimbursements and third party liabilities, since we are the primary obligor and no legal right of offset existed. As such, although not presented herein, we have increased Current assets and liabilities by approximately $17 million to correctly present these immaterial items. The items included primarily represent third party rent, property taxes and certain operating expenses which are paid directly by Toys-Delaware to the respective third parties. The correction had no effect on our previously reported Results of Operations, Member’s Capital and no net effect on Cash 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 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.

2. Real estate, net

(In thousands)	~~October~~April 2928, ~~2011~~2012			January 2928, ~~2011~~2012
Land	$	277,001		$	~~279~~277,~~325~~001
Buildings	~~752~~750,~~151~~894			~~755~~751,~~558~~744
Leasehold improvements	~~407~~404,~~578~~423			~~412~~407,~~582~~060
	1,436,730			1,447,465
	1,432,318			1,435,805
Less: accumulated depreciation	(~~549~~560,~~781~~448		)	(~~530~~555,~~349~~238		)
Total	$	~~886~~871,~~949~~870		$	~~917~~880,~~116~~567

During the thirty-nine weeks ended October 29, 2011, we sold three owned properties to third parties for gross proceeds of approximately $9 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 termination payments of approximately $6 million for the properties sold during the thirty-nine weeks ended October 29, 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)	October 29, 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 thirty-nine weeks ended October 29, 2011, we sold 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, resulting 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 the first quarter of fiscal ~~2010~~2012, we ~~classified~~had ~~three~~two ~~owned~~leases ~~properties~~expire aswith ~~assets~~unrelated ~~held~~third party landlords for ~~sale,~~which ~~one~~we ofopted ~~which~~not ~~was~~to ~~sold~~exercise inthe ~~fiscal~~renewal ~~2010,~~options. The ~~one~~Amended ofand ~~which~~Restated ~~was~~Master ~~sold~~Lease inAgreement (the ~~second~~“TRU ~~quarter~~Propco ofI ~~fiscal~~Master ~~2011~~Lease”) ~~and~~requires ~~one~~Toys-Delaware ~~which~~to ~~was~~make ~~sold~~a ~~subsequent~~payment to the ~~end~~Company upon early termination of the ~~third~~lease, ~~quarter~~as ofset ~~fiscal~~forth ~~2011. Additionally,~~under ~~during~~the terms of the ~~thirty-nine~~TRU ~~weeks~~Propco ~~ended~~I ~~October~~Master 29Lease, ~~2011,~~or wethe ~~sold~~successful ~~two~~execution ~~owned~~of the sale of such properties by the Company to a third party ~~not~~if ~~previously~~the ~~classified~~proceeds asfrom ~~assets~~the ~~held~~sale are less than the net present value of the base rent for ~~sale.~~such ~~Lastly,~~property weover ~~classified~~the aremaining term for such property, indiscounted ~~discontinued~~at ~~operations~~10% asper aannum. As ~~result~~per the terms of anthe TRU Propco I Master Lease, the two leases were terminated early and we recorded a termination payment of aapproximately ~~ground~~$1 ~~lease.~~million ~~Refer~~in toEarnings ~~Note~~from 2discontinued ~~entitled~~operations ~~“Real~~on ~~estate,~~the ~~net”~~Condensed ~~for~~Consolidated ~~further~~Statement ~~details~~of ~~regarding~~Operations. Termination ~~the~~payments ~~properties~~received ~~sold~~are included in ~~fiscal~~Cash ~~2011~~Flows ~~and~~from ~~corresponding~~Operating ~~termination payments~~Activities.

6During the first quarter of fiscal 2011, we sold one owned property to a third party for gross proceeds of approximately $5 million, resulting in a gain of less than $1 million. We recorded a termination payment of approximately $2 million for the property sold. In addition, subsequent to the first quarter of fiscal 2011, we sold three more properties and terminated two leases with unrelated third party landlords prior to the expiration of the leases.

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 thirty-nine weeks ended October 29, 2011 and October 30, 2010. The operating results for these properties classified as discontinued operations through October 29, 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 thirty-nine weeks ended October 29, 2011 and October 30, 2010, respectively. These amounts have been summarized below:

	13 Weeks Ended
(In thousands)	October 29, 2011		October 30, 2010
Total revenues	$	158	$	953
Earnings (loss) from discontinued operations	$	2,945	$	(277	)
	39 Weeks Ended
(In thousands)	October 29, 2011		October 30, 2010
Total revenues	$	1,511	$	2,889
Earnings from discontinued operations	$	7,976	$	131

Statements of Operations for the thirteen weeks ended April 28, 2012 and April 30, 2011. The operating results for these properties classified as discontinued operations through April 28, 2012 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 weeks ended April 28, 2012 and April 30, 2011, respectively. These amounts have been summarized below:



	13 Weeks Ended
(In thousands)	April 28, 2012		April 30, 2011
Total revenues (1)	$	1,079	$	2,979
Earnings from discontinued operations	$	2,076	$	2,676


(1)	Includes termination payments from Toys-Delaware.

4. Long-term debt

As of ~~October~~April 2928, ~~2011~~2012 and January 2928, ~~2011~~2012, the carrying value of our debt was $~~931~~934 million ~~and $929 million~~, respectively~~, with fair values of approximately $1,058 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~~Senior ~~unsecured~~Notes, ~~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~~ $25932 ~~million~~at ofApril ~~the Notes for cash. The tender offer expired on June 13~~28, ~~2011, with no holders opting to tender at that time. Refer to the Annual Report on Form 10-K for further details on indebtedness.~~2012)

As of April 28, 2012 and January 28, 2012, the carrying value of our 10.75% senior unsecured notes due fiscal 2017 (the "Notes") was $932 million and $931 million, respectively, with fair values of approximately $1,043 million and $1,064 million, respectively. The fair value of the Notes was estimated using Level 2 inputs, which represent quoted market prices of our debt instrument.

Subsequent Event

In accordance with the indenture governing the Notes, we commenced a tender offer on May 14, 2012 to purchase up to an aggregate principal amount of approximately $33 million of the Notes for cash. The tender offer will expire on June 13, 2012. To the extent the tender offer is not accepted by holders, we will use such funds as permitted by the indenture governing the Notes, including paying dividends to TRU.

Lease Financing Obligation Associated with a Capital Project

During fiscal 2011, we were significantly involved in the construction of a leased store which included non-standard tenant improvements. As a result of our involvement, we are deemed the “owner” for accounting purposes and are required to capitalize the construction costs on our Condensed Consolidated Balance Sheet. Upon completion of the project, we performed a sale-leaseback analysis pursuant to ASC 840, “Leases”, and determined that we were unable to derecognize the assets capitalized during construction. Therefore, in conjunction with this lease, as of April 28, 2012 and January 28, 2012, we recorded a financing obligation of $2 million and $3 million, respectively. The rental payments to the landlord are recognized as a reduction of the financing obligation and interest expense. We also continue to recognize rent expense on the ground lease for the land on which this asset was constructed.

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 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. During the thirteen weeks ended April 30, 2011, we made cash distributions of $8 million in dividends.

InSubsequent 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.Events

~~During~~On ~~the~~May ~~thirty-nine weeks ended October 29~~3, ~~2011~~2012, we made ~~cash~~a ~~distributions of $46 million and $4 million in dividends and return of capital, respectively, which includes the~~ cash ~~distributions~~distribution of approximately $258 million to TRU onthrough ~~June~~our ~~20,~~direct ~~2011~~owner ~~related~~Wayne ~~to the expired tender offer~~Holdings. ~~During the thirty-nine weeks ended October 30, 2010, we made cash distributions of $33 million and $17 million in dividends and return of capital, respectively.~~

~~During~~In ~~the~~accordance ~~thirty-nine~~with ~~weeks~~the ~~ended~~indenture ~~October~~governing ~~30,~~the ~~2010~~Notes, we ~~recorded~~commenced ana ~~approximate~~tender $6offer ~~million~~on ~~Adjustment~~May 14, 2012 to ~~the~~purchase ~~carrying~~up ~~value~~to ofan ~~net~~aggregate ~~assets~~principal ~~previously~~amount ~~acquired~~of onapproximately $33 million of the ~~Condensed~~Notes ~~Statement~~for ofcash. ~~Changes~~The intender ~~Member's~~offer ~~Capital~~will toexpire ~~correct~~on June 13, 2012. To the ~~initial~~extent ~~carrying~~the ~~value~~tender ofoffer ~~net~~is ~~assets~~not ~~contributed~~accepted toby usholders, aswe ~~part~~will ofuse ~~the~~such ~~fiscal~~funds ~~2005~~as ~~reorganization~~permitted ~~transactions. Refer~~by tothe ~~Note~~indenture 1governing ~~entitled~~the ~~“Basis~~Notes, ofincluding ~~Presentation”~~paying ~~for~~dividends ~~further~~to ~~details~~TRU.

6. Related party transactions

Rental Revenues

Our rental revenues are derived from payments received under the ~~leasing~~TRU ~~arrangements~~Propco I Master Lease we have entered into with Toys-Delaware. The ~~master~~TRU ~~lease~~Propco ~~agreement~~I Master Lease 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 ~~October~~April 2928, ~~2011~~2012 and ~~October~~April 30, ~~2010~~2011, we earned related party Base rent revenues of approximately $6260 million and $6061 million, respectively~~. During the thirty-nine weeks ended October 29~~, ~~2011~~excluding ~~and~~termination ~~October 30,~~payments ~~2010,~~from ~~we earned related party Base rent revenues of approximately $183 million and $185 million, respectively~~Toys-Delaware. In addition, we recorded Tenant reimbursements of approximately $1110 million and $1011 million under our leasing arrangements with Toys-Delaware during the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012 and ~~October~~April 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.

Termination Payments

As discussed in Note 23 entitled “~~Real~~Discontinued ~~estate, net~~operations”, the ~~master~~TRU ~~lease~~Propco ~~agreement~~I Master Lease requires Toys-Delaware to make a payment to the Company upon early termination of a lease, inas ~~conjunction~~set ~~with~~forth under the terms of the TRU Propco I Master Lease, or 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 termination payments of approximately $21 million and $62 million for the thirteen weeks ~~and~~ended ~~thirty-nine~~April 28, ~~weeks~~2012 ~~ended~~and ~~October~~April 2930, 2011, respectively, in Earnings ~~(loss)~~ from discontinued operations on the Condensed Consolidated ~~Statement~~Statements of Operations. ~~Additionally, subsequent to the third quarter of fiscal 2011, we sold a property and recorded a termination payment of approximately $2 million.~~

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 on Other operating expenses in the Condensed Consolidated Statements of Operations~~. During each of the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012 and ~~October~~April 30, ~~2010~~2011, the amounts charged to us for these services were approximately $1 million., ~~During the thirty-nine weeks ended October 29~~respectively, ~~2011~~ and ~~October 30,~~are ~~2010,~~recorded ~~the~~on ~~amounts~~Other ~~charged~~operating toexpenses usin ~~for~~the ~~these~~Condensed ~~services~~Consolidated ~~were~~Statements ~~approximately~~of ~~$3 million and $4 million, respectively~~Operations.

7. Due from affiliate, net

As of ~~October~~April 2928, ~~2011~~2012 and January 2928, ~~2011~~2012, Due from affiliate, net of $114 million and $710 million, respectively, primarily represents real estate taxes, certain property reimbursements and base rents owed to us by Toys-Delaware.

~~8. Recent Accounting Pronouncements~~7

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 2928, ~~2011~~2012 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”) and formed in September 2005. Certain of our wholly-owned special purpose subsidiaries own fee and leasehold interests in ~~353~~349 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”), the operating entity for all of TRU’s North American businesses., which operates the properties as Toys “R” Us stores, Babies “R” Us stores or side-by-side stores, or subleases them to alternative retailers. 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

~~39 Weeks Ended~~

($ In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

$ Change

% Change

~~October 29, 2011~~

~~October 30, 2010~~

~~$ Change~~

~~% Change~~

Earnings from continuing operations

1412,~~064~~558

1112,~~641~~752

~~2,423~~(194

)

20(1.85

~~38,304~~

~~33,066~~

~~5,238~~

~~15.8~~

Earnings from continuing operations ~~increased~~decreased by ~~$2.4~~a ~~million,~~nominal oramount ~~20.8%, to $14.1 million~~ for the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, compared to ~~$11.7 million for~~ the ~~thirteen~~same ~~weeks ended October 30, 2010. Earnings from continuing operations increased primarily as a result of an increase in Base rents of $2.2 million predominantly due to a prior~~ period ~~non-cash~~last ~~cumulative straight-line lease accounting correction recorded in the third quarter of fiscal 2011~~year.

Earnings from continuing operations increased by $5.2 million, or 15.8%, to $38.3 million for the thirty-nine weeks ended October 29, 2011, compared to $33.1 million for the thirty-nine weeks ended October 30, 2010. Earnings from continuing operations increased primarily due to a decrease in Depreciation expense of $3.1 million predominantly due to assets that became fully depreciated in fiscal 2010 and a decrease in Rental expense of $1.8 million primarily due to a non-cash cumulative straight-line lease accounting correction recorded in the second quarter of fiscal 2010.

Total Revenues

13 Weeks Ended

~~39 Weeks Ended~~

($ In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

$ Change

% Change

~~October 29, 2011~~

~~October 30, 2010~~

~~$ Change~~

~~% Change~~

Total revenues

7371,~~370~~399

7071,~~048~~835

~~3,322~~(436

)

4(0.76

~~216,290~~

~~215,265~~

~~1,025~~

~~0.5~~

Total revenues ~~increased~~decreased by $30.34 million, or 40.76%, to $7371.4 million for the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, compared to $7071.18 million for the thirteen weeks ended ~~October~~ April 30, ~~2010.~~2011, ~~The increase was~~ primarily due to ~~an increase in Base rents of $2.2 million predominantly due to~~ a ~~non-cash~~decrease ~~cumulative straight-line lease accounting correction recorded~~ in ~~the third quarter of fiscal 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

~~39 Weeks Ended~~

($ In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

$ Change

% Change

~~October 29, 2011~~

~~October 30, 2010~~

~~$ Change~~

~~% Change~~

Depreciation

8,~~071~~492

8,~~417~~246

~~(346~~246

)

(43.10

~~24,621~~

~~27,719~~

~~(3,098~~

)

~~(11.2~~

Depreciation ~~decreased~~increased by ~~$0.3~~a ~~million,~~nominal oramount ~~4.1%, to $8.1 million~~ for the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, compared to ~~$8.4 million for~~ the ~~thirteen~~same ~~weeks~~period ~~ended~~last ~~October 30, 2010~~year.

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

~~39 Weeks Ended~~

($ In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

$ Change

% Change

~~October 29, 2011~~

~~October 30, 2010~~

~~$ Change~~

~~% Change~~

Rental expense

12,~~263~~134

12,~~380~~094

~~(117~~40

)

(0.93

~~36,971~~

~~38,798~~

~~(1,827~~

)

~~(4.7~~

~~Rental expense had a nominal decrease for the thirteen weeks ended October 29, 2011, compared to the same period last year.~~8

~~Rental~~Table 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.~~Contents

Rental expense increased by a nominal amount for the thirteen weeks ended April 28, 2012, compared to the same period last year.

Common Area Maintenance Expenses

13 Weeks Ended

~~39 Weeks Ended~~

($ In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

$ Change

% Change

~~October 29, 2011~~

~~October 30, 2010~~

~~$ Change~~

~~% Change~~

Common area maintenance expenses

10,~~694~~024

910,~~604~~390

~~1,090~~(366

)

~~11.~~(3.5

~~31,482~~

~~30,502~~

~~980~~

~~3.2~~

Common area maintenance expenses ~~increased~~decreased by ~~$1.1~~a ~~million,~~nominal oramount ~~11.3%, to $10.7 million~~ for the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, compared to ~~$9.6 million for~~ the ~~thirteen~~same ~~weeks~~period ~~ended~~last ~~October 30, 2010, and increased by $1~~year.0 ~~million, or 3.2%, to $31.5 million for the thirty-nine weeks ended October 29, 2011, compared to $30.5 million for the thirty-nine weeks ended October 30, 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

~~39 Weeks Ended~~

($ In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

$ Change

% Change

~~October 29, 2011~~

~~October 30, 2010~~

~~$ Change~~

~~% Change~~

Other operating expenses

1,~~591~~192

1,~~478~~362

~~113~~(170

)

7(12.65

~~4,312~~

~~4,897~~

~~(585~~

)

~~(11.9~~

Other operating expenses ~~had~~decreased by a nominal ~~increase~~amount for the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, compared to the same period last year.

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

~~39 Weeks Ended~~

($ In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

$ Change

% Change

~~October 29, 2011~~

~~October 30, 2010~~

~~$ Change~~

~~% Change~~

Interest expense

26,~~687~~999

26,~~528~~991

~~159~~8

~~0.6~~—

~~80,600~~

~~80,283~~

~~317~~

~~0.4~~

9Interest expense increased by a nominal amount for the thirteen weeks ended April 28, 2012, compared to the same period last year.

~~Table~~Earnings offrom ~~Contents~~Discontinued Operations

Interest expense had a nominal increase for the thirteen and thirty-nine weeks ended October 29, 2011, compared to the same periods last year.



	13 Weeks Ended
($ In thousands)	April 28, 2012		April 30, 2011		$ Change			% Change
Earnings from discontinued operations	$	2,076	$	2,676	$	(600	)	(22.4	)%

Earnings ~~(loss)~~from discontinued operations decreased by $0.6 million to $2.1 million for the thirteen weeks ended April 28, 2012, compared to earnings of $2.7 million for the thirteen weeks ended April 30, 2011. The decrease was primarily due to a gain of approximately $0.4 million recognized from a sale of a property during the thirteen weeks ended April 30, 2011. Refer to Note 3 to the Condensed Consolidated Financial Statements entitled “Discontinued ~~Operations~~operations” for further details.

	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 ~~October~~April 2928, ~~2011~~2012, 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 for 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.

Additionally, the indenture governing the Notes allows us to re-invest the net cash proceeds from the sale of properties within 720 days subsequent to the receipt of the proceeds. If net cash proceeds are not reinvested within 720 days of receipt, the net

cash proceeds are deemed to be excess proceeds (“Excess Proceeds”). When the aggregate amount of Excess Proceeds exceeds $10.0 million, we are required to make an offer to all holders of the Notes within 30 days to purchase Notes with the Excess Proceeds. Although we have recognized sales proceeds in excess of $10.0 million as of April 28, 2012, these are not classified as Excess Proceeds given the time that has elapsed from the sale of the properties.

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

39 Weeks Ended

13 Weeks Ended

(In thousands)

~~October~~April 2928, ~~2011~~2012

~~October~~April 30, ~~2010~~2011

Change

Net cash provided by operating activities

8240,~~202~~871

7642,~~656~~008

5(1,~~546~~137

)

Net cash provided by investing activities

~~7,538~~—

~~907~~4,586

6(4,~~631~~586

)

Net cash used in financing activities

~~(49,140~~—

)

(508,~~372~~266

)

18,~~232~~266

Net increase during period in cash

40,~~600~~871

2738,~~191~~328

132,~~409~~543

Cash Flows Provided by Operating Activities

During the ~~thirty-nine~~thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, net cash provided by operating activities was $8240.29 million compared to $7642.70 million for the ~~thirty-nine~~thirteen weeks ended ~~October~~April 30, ~~2010~~2011. The ~~increase~~decrease in net cash provided by operating activities was primarily due to ~~termination~~an ~~payments~~increase ~~received~~in ofthird ~~approximately~~party ~~$6.2~~prepaid ~~million~~expenses, ~~from~~partially offset by an increase in amounts due to Toys-Delaware. asThese ~~required~~are ~~under~~due to the ~~TRU~~timing ~~Propco~~of Ipayments ~~Master~~made ~~Lease~~in ~~for~~ the ~~properties~~first ~~sold~~quarter ~~during~~of fiscal 2012, as compared to the ~~thirty-nine~~first ~~weeks~~quarter ~~ended~~of ~~October 29,~~fiscal 2011.

Cash Flows Provided by Investing Activities

During the ~~thirty-nine~~thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, ~~net~~no cash was provided by investing activities ~~was~~as ~~$7.5 million~~ compared to $04.96 million for the ~~thirty-nine~~same ~~weeks~~period ~~ended~~last ~~October 30, 2010~~year. ~~The~~Net ~~increase in net~~ cash provided by investing activities ~~was~~in ~~primarily~~the ~~due~~first toquarter anof ~~increase~~fiscal of2011 ~~$7.7~~was ~~million~~due ofto proceeds from the sale of real estate, ~~partially offset by capital expenditures~~ of $14.16 million ~~incurred in the current year~~.

Cash Flows Used in Financing Activities

During the ~~thirty-nine~~thirteen weeks ended ~~October~~April 2928, ~~2011~~2012, ~~net~~no cash was used in financing activities ~~was~~as ~~$49.1 million~~ compared to $508.43 million for the ~~thirty-nine~~same ~~weeks~~period ~~ended~~last ~~October 30, 2010~~year. ~~The~~Net ~~decrease in net~~ cash used in financing activities ~~was~~in ~~primarily due to~~ the ~~Long-term~~first ~~debt~~quarter ~~borrowings~~of in fiscal 2011 ~~associated~~was ~~with~~due ~~capital~~to ~~project~~Distributions ~~finance~~of ~~obligations and capitalized debt issuance costs incurred in fiscal 2010~~$8.3 million.

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.

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 2928, ~~2011~~2012, 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 (“GAAP”). 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 28, ~~2011~~2012, for a discussion of critical accounting policies.

Recently Adopted Accounting Pronouncements

~~None~~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

~~Forward-Looking Statements~~10

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

Table of Contents

~~these~~Requirements ~~statements~~in U.S. GAAP and IFRSs” (“ASU 2011-04”). The amendments in ~~light~~this ASU generally represent clarification of ~~subsequent~~Topic ~~events~~820, but also include instances where a particular principle or ~~developments~~requirement for measuring fair value or disclosing information about fair value measurements has changed. ~~Actual~~This update results in common principles and ~~outcomes~~requirements ~~may~~for ~~differ~~measuring ~~materially~~fair ~~from~~value ~~anticipated~~and ~~results~~for ordisclosing ~~outcomes~~information ~~discussed~~about fair value measurements in ~~any~~accordance ~~forward~~with GAAP and International Financial Reporting Standards (“IFRS”). As of January 29, 2012, the Company has adopted ASU 2011-~~looking~~04 ~~statement~~and has applied this guidance prospectively. The adoption of ASU 2011-04 did not have an impact on our Condensed Consolidated Financial Statements.

Forward-Looking Statements

This Quarterly Report on Form 10-Q, the other reports and documents that we have filed or may file in the future file with the Securities and Exchange Commission and other publicly released materials and statements, both oral and written, that we have made or may make in the future, may contain “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,” “project,” “expect,” “believe,” “intend,” “foresee,” “forecast,” “will,” “may,” “outlook,” 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 27, 2012 and in our reports and documents filed with the 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, unless required by the Securities and Exchange Commission's rules and regulations. 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 thirty-nine~~ weeks ended ~~October~~April 2928, ~~2011~~2012. 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 2928, ~~2011~~2012.


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.

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~~our ~~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.~~

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 ~~third~~first quarter of fiscal ~~2011~~2012 that have materially affected, or are reasonably likely to materially affect, ~~the~~our ~~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 2928, ~~2011~~2012.


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

None.


Item 3.	Defaults Upon Senior Securities

None.

Item 4. ~~(Removed~~Mine ~~and~~Safety ~~Reserved)~~Disclosures

None.


Item 5.	Other Information

None.


Item 6.	Exhibits

See the Index to Exhibits immediately following the signature page hereto, which Index to Exhibits is 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: December 13, 2011		/s/ F. Clay Creasey, Jr.
Date: June 12, 2012		/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 thirty-nine~~ weeks ended ~~October~~April 2928, ~~2011~~2012 (filed as Exhibit 99.1 to the Form 8-K filed by Toys “R” Us, Inc. on ~~December~~June 1312, ~~2011~~2012 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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