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 27~~May 4, ~~2012~~2013 Commission file number 333-164018

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)

Delaware		04-3829291
(State or other jurisdiction ofincorporation or organization)		(IRS EmployerIdentification 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 ¨ No ¨

~~Indicate~~(Note: byAs ~~check~~a ~~mark~~voluntary ~~whether~~filer not subject to the ~~registrant~~filing requirements of Section 13 or 15(1d) of the Exchange Act, the registrant has filed all reports ~~required~~pursuant to ~~be filed by~~ Section 13 or 15(d) of the ~~Securities~~ Exchange Act ~~of 1934~~ during the preceding 12 months ~~(or~~as ~~for~~if ~~such shorter period that~~ the registrant ~~was~~were ~~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 1118, ~~2012~~2013, 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	1
Condensed Consolidated Statements of Operations	2
Condensed Consolidated Statements of Cash Flows	3
Condensed Consolidated Statements of Changes in Member’s Capital	4
Notes to the Condensed Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	8
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. 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~~May 274, ~~2012~~2013		~~January~~February 282, ~~2012~~2013
ASSETS
Current Assets:
Cash	$	96,725	$	72,111
Cash and cash equivalents	$	145,131	$	96,899
Due from affiliate, net	1410,~~768~~528		95,~~882~~326
Lease allowance receivable	21,~~727~~055		—1,393
Prepaid expenses	26,~~742~~824		26,~~202~~611
Total current assets	~~116~~163,~~962~~538		84110,~~195~~229
Real Estate, Net:
Land	~~274~~271,~~228~~246		~~277~~274,~~001~~228
Buildings, net	~~478~~467,~~848~~950		~~493~~474,~~883~~949
Property and leasehold improvements, net	9792,~~358~~762		~~109~~97,~~683~~296
Total real estate, net	~~850~~831,~~434~~958		~~880~~846,~~567~~473
Straight-line rent receivable from affiliate	~~153~~164,~~048~~381		~~129~~159,~~411~~164
Debt issuance costs	1312,~~809~~287		1613,~~007~~020
Other assets	~~296~~530		~~283~~310
Total Assets	$	1,~~134~~172,~~549~~694	$	1,~~110~~129,~~463~~196
LIABILITIES AND MEMBER’S CAPITAL
Current Liabilities:
Accrued interest	$	2931,~~139~~032	$	35,~~928~~360
Real estate taxes payable	1611,~~336~~505		11,~~075~~209
Deferred third party rent liabilities	12,~~508~~469		13,~~175~~181
Deferred related party revenue	112,~~812~~098		112,~~365~~990
Other current liabilities	1,~~198~~317		1,~~422~~404
Total current liabilities	4958,~~993~~421		1834,~~965~~144
Long-term debt	~~935~~939,~~501~~822		~~933~~939,~~516~~092
Deferred third party rent liabilities	~~114~~112,~~702~~971		~~110~~112,~~159~~626
Other non-current liabilities	13,~~462~~972		14,~~537~~007
Member's capital	32,891		46,286
Member’s capital	57,508		39,327
Total Liabilities and Member's Capital	$	1,134,549	$	1,110,463
Total Liabilities and Member’s Capital	$	1,172,694	$	1,129,196

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~~May 274, ~~2012~~2013

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

~~October 27, 2012~~

~~October 29, 2011~~

Rental revenues:

Base rents

6061,~~437~~316

6260,~~139~~601

~~182,095~~

~~183,327~~

Tenant reimbursements

910,~~676~~002

109,~~712~~834

~~29,359~~

~~31,218~~

Total revenues

7071,~~113~~318

7270,~~851~~435

~~211,454~~

~~214,545~~

Depreciation

78,~~314~~209

8,~~046~~065

~~23,985~~

~~24,471~~

Rental expense

11,~~859~~302

11,~~958~~980

~~35,828~~

~~36,101~~

Common area maintenance expenses

910,~~676~~002

109,~~712~~834

~~29,359~~

~~31,218~~

Other operating expenses

1,~~471~~188

1,~~583~~190

~~3,726~~

~~4,240~~

Total operating expenses

30,~~320~~701

3231,~~299~~069

~~92,898~~

~~96,030~~

Operating earnings

3940,~~793~~617

4039,~~552~~366

~~118,556~~

~~118,515~~

Interest expense

26,751

26,687

80,710

80,600

Interest expense, net

27,346

26,999

Earnings from continuing operations

13,~~042~~271

1312,~~865~~367

~~37,846~~

~~37,915~~

Earnings from discontinued operations

34,~~724~~910

32,~~144~~267

~~5,250~~

~~8,365~~

Net earnings

1618,~~766~~181

1714,~~009~~634

~~43,096~~

~~46,280~~

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~~May 274, ~~2012~~2013			~~October~~April 2928, ~~2011~~2012
Cash Flows from Operating Activities:
Net earnings	$	4318,~~096~~181		$	4614,~~280~~634
Adjustments to reconcile Net earnings to net cash provided by operating activities:
Depreciation	259,~~397~~013			278,~~189~~697
Amortization of debt issuance costs	~~2,198~~733			~~2,198~~732
Amortization of original issue discount	~~1,985~~730			~~1,785~~650
Loss (gain) on sale of real estate	662			(216		)
Gain on sale of real estate	(748		)	—
Other non-cash charges	(7535		)	64(25		)
Changes in operating assets and liabilities:
Due from affiliate, net and Lease allowance receivable	(74,~~613~~864		)	(41,~~703~~385		)
Prepaid expenses	(~~540~~213		)	(~~869~~4,528		)
Straight-line rent receivable from affiliate, Other assets and Deferred third party rent liabilities	(195,~~137~~804		)	(206,~~896~~634		)
Accrued interest, Real estate taxes payable and Other current liabilities	3025,~~248~~881			3126,~~381~~385
Deferred related party revenue	~~447~~(892		)	(11425		)
Net cash provided by operating activities	7641,~~668~~982			8240,~~202~~871
Cash Flows from Investing Activities:
Proceeds from the sale of real estate	4,437			8,588
Proceeds from sale of real estate	6,250			—
Capital expenditures	—			(1,050		)
Net cash provided by investing activities	6,250			—
Net cash provided by investing activities	4,437			7,538
Cash and cash equivalents:
Cash Flows from Financing Activities:
Net increase during period	48,232			40,871
Distributions	(56,491		)	(50,225		)
Cash and cash equivalents at beginning of period	96,899			72,111
Long-term debt borrowings	—			1,085
Cash and cash equivalents at end of period	$	145,131		$	112,982
Net cash used in financing activities	(56,491		)	(49,140		)
Cash:
Net increase during period	24,614			40,600
Cash at beginning of period	72,111			39,708
Cash at end of period	$	96,725		$	80,308

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 29, 2011	$	43,085
Net earnings	46,280
Distributions	(50,225		)
Balance, October 29, 2011	$	39,140
Balance, January 28, 2012	$	46,286
Net earnings	4314,~~096~~634
Distributions	(56,491		)
Balance, April 28, 2012	$	60,920
Balance, October 27, 2012	$	32,891
Balance, February 2, 2013	$	39,327
Net earnings	18,181
Balance, May 4, 2013	$	57,508

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 in September 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~~May 274, ~~2012~~2013 and ~~January~~February 282, ~~2012~~2013, the Condensed Consolidated Statements of Operations ~~for the thirteen and thirty-nine weeks ended October 27~~, ~~2012 and October 29, 2011,~~ 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~~May 274, ~~2012~~2013 and ~~October~~April 2928, ~~2011~~2012, 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~~February 282, ~~2012~~2013, 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~~February 282, ~~2012~~2013, 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~~February 282, ~~2012~~2013.

Prior Period Correction

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.

2. Real estate, net

(In thousands)	~~October~~May 274, ~~2012~~2013			~~January~~February 282, ~~2012~~2013
Land	$	~~274~~271,~~228~~246		$	~~277~~274,~~001~~228
Buildings	~~746~~741,~~120~~154			~~751~~745,~~744~~698
Property and leasehold improvements	~~402~~404,~~878~~335			407,~~060~~094
	1,423,226			1,435,805
	1,416,735			1,427,020
Less: accumulated depreciation	(~~572~~584,~~792~~777		)	(~~555~~580,~~238~~547		)
Total	$	~~850~~831,~~434~~958		$	~~880~~846,~~567~~473

Subsequent Event

Subsequent to the first quarter fiscal 2013, we sold an owned property to an unrelated third party for gross proceeds of approximately $8 million, resulting in a net gain of $4 million.

3. Discontinued operations

During the ~~thirty-nine~~thirteen weeks ended ~~October~~May 274, ~~2012~~2013, we sold ~~one~~two ~~property~~owned ~~and~~properties ~~a non-operating parcel, which were previously classified as held for sale,~~ to unrelated third parties for gross proceeds of approximately $45 million, resulting in a net ~~loss~~gain of less than $1 million. Additionally, we ~~had~~sold ana ~~early~~building ~~termination~~for gross proceeds of $1 million resulting in a ~~ground~~nominal ~~lease~~gain and ~~had~~assigned ~~two~~the ~~leases~~corresponding ~~expire~~ground ~~with~~lease to an unrelated third party. The ~~landlords~~Amended ~~for~~and ~~which~~Restated weMaster ~~opted~~Lease ~~not~~Agreement (the “TRU Propco I Master Lease”) requires Toys-Delaware to ~~exercise~~make a payment to us upon early termination of a lease, as set forth under the ~~renewal~~terms ~~options~~of the TRU Propco I Master Lease, or the successful execution of the sale of such properties by us 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. ~~The~~As ~~Amended~~per ~~and~~the ~~Restated~~terms of the TRU Propco I Master Lease, ~~Agreement~~we recorded termination payments of approximately $5 million during the thirteen weeks ended May 4, 2013 in Earnings from discontinued operations on the Condensed Consolidated Statement of Operations. Termination payments are included in Cash Flows from Operating Activities.

~~(the~~During ~~“TRU Propco I Master Lease”) requires Toys-Delaware to make a payment to~~ the ~~Company~~thirteen ~~upon~~weeks ~~early~~ended ~~termination of a lease~~April 28, ~~as set forth under the terms of the TRU Propco I Master Lease~~2012, orwe ~~the~~had ~~successful~~two ~~execution~~leases ofexpire ~~the~~with ~~sale~~unrelated ~~of such properties by the Company to a~~ third party iflandlords ~~the~~for ~~proceeds~~which ~~from~~we ~~the~~opted ~~sale~~not ~~are~~to ~~less~~exercise ~~than~~ the ~~net~~renewal ~~present value of the base rent for such property over the remaining term for such property, discounted at 10% per annum~~options. AsWe ~~per the terms of the TRU Propco I Master Lease, we~~ recorded termination payments from Toys-Delaware of approximately $51 million ~~during the thirty-nine weeks ended October 27, 2012 in Earnings from discontinued operations on the Condensed Consolidated Statement of Operations~~.

~~During~~We reported the ~~thirty-nine~~operating ~~weeks~~results ~~ended~~for ~~October 29,~~these ~~2011,~~properties weas ~~sold~~Earnings ~~three~~from ~~owned~~discontinued ~~properties~~operations toon ~~unrelated~~the ~~third~~Condensed ~~parties~~Consolidated Statements of Operations for ~~gross~~the ~~proceeds~~thirteen ofweeks ~~approximately~~ended $9May 4, ~~million~~2013 and April 28, ~~resulting~~2012. The inoperating aresults ~~net~~for ~~gain~~these ofproperties ~~less~~classified ~~than~~as $1discontinued ~~million. Additionally,~~operations wewere ~~had~~derived anfrom ~~early~~our ~~termination~~historical offinancial ainformation ~~ground~~and ~~lease. We~~have ~~recorded~~been ~~termination~~segregated ~~payments~~from ofcontinuing ~~approximately~~operations $6and ~~million~~reported separately on the Condensed Consolidated Statements of Operations for the ~~thirty-nine~~thirteen weeks ended ~~October~~May 294, ~~2011~~2013 inand ~~Earnings~~April 28, ~~from~~2012, ~~discontinued~~respectively. These ~~operations~~amounts onhave ~~the~~been ~~Condensed~~summarized ~~Consolidated Statement of Operations.~~below:

We reported the operating results for these properties as Earnings from discontinued operations on the Condensed Consolidated Statements of Operations for the thirteen and thirty-nine weeks ended October 27, 2012 and October 29, 2011. The operating results for these properties classified as discontinued operations through October 27, 2012 were derived from our historical financial information and have been segregated from continuing operations and reported separately on the Condensed Consolidated Statements of Operations for the thirteen and thirty-nine weeks ended October 27, 2012 and October 29, 2011, respectively. These amounts have been summarized below:



	13 Weeks Ended
(In thousands)	May 4, 2013		April 28, 2012
Total revenues (1)	$	4,804	$	2,043
Earnings from discontinued operations	$	4,910	$	2,267

	13 Weeks Ended
(In thousands)	October 27, 2012		October 29, 2011
Total revenues	$	4,315	$	2,888
Earnings from discontinued operations	$	3,724	$	3,144
	39 Weeks Ended
(In thousands)	October 27, 2012		October 29, 2011
Total revenues	$	5,854	$	9,250
Earnings from discontinued operations	$	5,250	$	8,365

(1) Includes termination payments from Toys-Delaware.

4. Long-term debt

AsThe carrying value of ~~October~~long-term debt as of May 274, ~~2012~~2013 and ~~January~~February 282, ~~2012~~2013 consisted of $934 million, respectively, related to our $950 million aggregate principal amount of 10.75% senior secured notes due fiscal 2017 (the “Notes”) and $6 million and $5 million, respectively, related to lease financing obligations associated with capital projects. The fair values of the Notes as of May 4, 2013 and February 2, 2013, were $1,017 million and $1,024 million, respectively, and were estimated using Level 1 inputs, which represent quoted market prices as of the end of the respective periods. The carrying ~~value~~amounts of our ~~debt~~lease ~~was~~financing obligations, which approximate fair values as of May 4, 2013 and February 2, 2013, were $~~936~~6 million and $~~934~~5 million, respectively, and are classified as Level 3, as these are not publicly traded and therefore we are unable to obtain quoted market prices. These Level 3 instruments are valued using a cash flow analysis.

105.~~75%~~ ~~Senior~~Fair ~~Notes,~~value ~~due fiscal 2017 ($933 million at October 27, 2012)~~measurements

AsTo determine the fair value of ~~October 27,~~our ~~2012~~assets and ~~January 28~~liabilities, ~~2012,~~we utilize the ~~carrying~~established fair value ofhierarchy ~~our~~that ~~10.75%~~distinguishes ~~senior~~between ~~unsecured~~market ~~notes~~participant ~~due~~assumptions ~~fiscal~~based ~~2017~~on ~~(the~~market ~~“Notes”)~~data ~~was~~obtained ~~$933~~from ~~million~~sources ~~and~~independent ~~$931~~of ~~million,~~the ~~respectively,~~reporting ~~with~~entity ~~fair~~(observable ~~values~~inputs ofthat ~~approximately~~are ~~$1,026~~classified ~~million~~within ~~and~~Levels $1~~,064~~ ~~million,~~and ~~respectively. The~~2 ~~fair~~of ~~value~~the ofhierarchy) and the ~~Notes~~reporting ~~was~~entity’s ~~estimated~~own ~~using~~assumptions ~~Level~~about 2market ~~inputs,~~participant ~~which~~assumptions ~~represent~~(unobservable ~~quoted~~inputs ~~market~~classified ~~prices~~within ofLevel ~~our~~3 ~~debt~~of ~~instrument.~~the hierarchy).

InAssets ~~accordance~~and ~~with~~Liabilities ~~the~~Measured ~~indenture~~at ~~governing~~Fair ~~the~~Value ~~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 approximately $32 million in cash. The tender offer expired on June 13, 2012, with no holders opting to tender at that time. Therefore, as permitted by the indenture, we made a ~~cash~~Recurring ~~distribution of approximately $32 million to TRU on June 21, 2012.~~Basis

~~Lease~~Cash ~~Financing~~Equivalents ~~Obligation Associated with a Capital Project~~

~~During~~Cash ~~fiscal~~equivalents ~~2011,~~include wehighly ~~were~~liquid ~~significantly~~investments ~~involved~~with inan ~~the~~original ~~construction~~maturity of athree ~~leased~~months ~~store~~or ~~which~~less ~~included~~at ~~non-standard tenant improvements~~acquisition. As Due ato ~~result of our involvement, we are deemed~~ the ~~“owner”~~nature ~~for accounting purposes~~ and ~~are~~short ~~required~~maturity toof ~~capitalize~~these ~~the~~investments, ~~construction~~their ~~costs~~carrying onamount ~~our~~approximates ~~Condensed~~fair ~~Consolidated Balance Sheet~~value. ~~Upon completion of the project~~Therefore, we ~~performed~~have ~~a sale-leaseback analysis pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 840, “Leases”, and~~ determined that weour ~~were~~cash ~~unable~~equivalents ~~to derecognize the assets capitalized during construction. Therefore,~~ in ~~conjunction~~their ~~with~~entirety ~~this~~are ~~lease,~~classified as ofLevel ~~October 27,~~1 ~~2012~~within ~~and~~the ~~January 28,~~fair ~~2012,~~value wehierarchy. We had acash ~~financing~~equivalents ~~obligation~~ of approximately $3122 million, ~~respectively. The~~and ~~rental~~$6 ~~payments~~million toat ~~the~~May 4, ~~landlord~~2013 ~~are recognized as a reduction of the financing obligation~~ and ~~interest~~February 2, ~~expense. We~~2013, ~~also continue to recognize rent expense on the ground lease for the land on which this asset was constructed~~respectively.

6 . Member’s capital

~~Table~~Wayne Holdings, a direct wholly owned subsidiary of ~~Contents~~TRU, 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 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.

5During .the ~~Member’s~~thirteen ~~capital~~weeks ended May 4, 2013 and April 28, 2012, we did not make any cash distributions.

~~Wayne Holdings is the direct owner of 100% of our limited liability company interests~~7. We ~~evaluate~~Related ~~our~~party 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.transactions

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 approximately $32 million in cash. The tender offer expired on June 13, 2012, with no holders opting to tender at that time. Therefore, as permitted by the indenture, we made cash distributions of approximately $32 million to TRU on June 21, 2012.

During the thirty-nine weeks ended October 27, 2012, we made cash distributions of $43 million and $13 million in dividends and return of capital, respectively, which includes the cash distributions of approximately $32 million to TRU on June 21, 2012 related to the expired tender offer. During the thirty-nine weeks ended October 29, 2011, we made cash distributions of $46 million and $4 million in dividends and return of capital, respectively.

6. Related party transactions

Rental Revenues

Our ~~Rental~~rental revenues are primarily derived from payments received under the TRU Propco I Master Lease we ~~have~~ entered into with Toys-Delaware. The ~~TRU~~master ~~Propco~~lease Iagreement ~~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~~May 274, ~~2012~~2013 and ~~October~~April 2928, 2011, we earned related party Base rent revenues of approximately $60 million and $62 million, respectively, excluding termination payments from Toys-Delaware. During the thirty-nine weeks ended October 27, 2012 and October 29, 2011, we earned related party Base rent revenues of approximately $180 million and $183 million, respectively, excluding termination payments from Toys-Delaware. In addition, we recorded Tenant reimbursements of approximately $10 million and $11 million under our leasing arrangements with Toys-Delaware during the thirteen weeks ended October 27, 2012 and October 29, 2011, respectively. During the thirty-nine weeks ended October 27, 2012 and October 29, 2011, we recorded Tenant reimbursements of approximately $29 million and $32 million, respectively.

2012, we earned related party Base rent revenues of approximately $60 million, respectively, excluding termination payments from Toys-Delaware. In addition, we recorded Tenant reimbursements of approximately $10 million for the thirteen weeks ended May 4, 2013 and April 28, 2012, respectively, under the TRU Propco I Master Lease.

Termination Payments

As discussed in Note 3 entitled “Discontinued operations”,” the TRU Propco I Master Lease requires Toys-Delaware to make a payment to ~~the~~us ~~Company~~ upon early termination of a lease, as set forth under the terms of the TRU Propco I Master Lease, or the successful execution of the sale of such properties by ~~the~~us ~~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 $45 million and $21 million for the thirteen weeks ended ~~October~~May 274, ~~2012~~2013 and ~~October~~April 2928, ~~2011, respectively. We recorded termination payments of approximately $5 million and $6 million for the thirty-nine weeks ended October 27,~~ 2012 ~~and October 29~~, ~~2011,~~ respectively, in Earnings from discontinued operations on the Condensed Consolidated ~~Statement~~Statements of Operations.

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 in Other operating expenses on the Condensed Consolidated Statements of Operations. During each of the thirteen weeks ended ~~October~~May 274, ~~2012~~2013 and ~~October~~April 2928, ~~2011~~2012, the amounts charged to us for these services were approximately $1 million. ~~During each of the thirty-nine weeks ended October 27, 2012 and October 29, 2011, the amounts charged to us for these services were approximately $3 million.~~

Due from affiliate, net

As of ~~October~~May 274, ~~2012~~2013 and ~~January~~February 282, ~~2012~~2013, Due from affiliate, net of $1511 million and $105 million, respectively, primarily represents real estate taxes, certain property reimbursements and base rents owed to us by Toys-Delaware. The Due from affiliate, net balances as of May 4, 2013 and February 2, 2013 include termination payments due from Toys-Delaware of approximately $5 million and $2 million, respectively.

Subsequent Event

Subsequent to the first quarter fiscal 2013, we received $5 million from Toys-Delaware for the termination payments receivable recorded in Due from affiliate, net at May 4, 2013.

8. Recent accounting pronouncements

In April 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-07, “Presentation of Financial Statements (Topic 205): Liquidation Basis of Accounting” (“ASU 2013-07”). ASU 2013-07 clarifies when an entity should apply the liquidation basis of accounting and provides principles for the measurement of associated assets and liabilities, as well as required disclosures. The amendments in this standard are effective prospectively for entities that determine liquidation is imminent for reporting periods beginning after December 15, 2013, with early adoption permitted. The adoption of ASU 2013-07 is not expected to have a material impact on our Condensed Consolidated Financial Statements.

In February 2013, the FASB issued ASU No. 2013-04, “Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date” (“ASU 2013-04”). ASU 2013-04 provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The amendments in this ASU are effective for reporting periods beginning after December 15, 2013, with early adoption permitted. Retrospective application is required. The adoption of ASU 2013-04 is not expected to 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~~February 282, ~~2012~~2013 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 ~~347~~343 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~~May 274, ~~2012~~2013

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

$ Change

% Change

~~October 27, 2012~~

~~October 29, 2011~~

~~$ Change~~

~~% Change~~

Earnings from continuing operations

13,~~042~~271

1312,~~865~~367

~~(823~~904

)

(57.93

~~37,846~~

~~37,915~~

~~(69~~

)

~~(0.2~~

Earnings from continuing operations ~~decreased~~increased by $0.89 million, ~~and~~or a7.3%, ~~nominal~~to ~~amount~~$13.3 million for the thirteen ~~and thirty-nine~~ weeks ended ~~October~~May 274, ~~2012~~2013, ~~respectively,~~ compared to $12.4 million for the ~~same~~thirteen ~~periods~~weeks ~~last~~ended ~~year~~April 28, ~~due~~2012, primarily due to aan ~~reduction~~increase in Total revenues and a reduction in Rental expense.

Total Revenues

13 Weeks Ended

~~39 Weeks Ended~~

($ In thousands)

~~October~~May 274, ~~2012~~2013

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

$ Change

% Change

~~October 27, 2012~~

~~October 29, 2011~~

~~$ Change~~

~~% Change~~

Total revenues

7071,~~113~~318

7270,~~851~~435

~~(2,738~~883

)

(31.83

~~211,454~~

~~214,545~~

~~(3,091~~

)

~~(1.4~~

Total revenues ~~decreased~~increased by $20.89 million, or 31.83%, to $7071.13 million for the thirteen weeks ended ~~October~~May 274, ~~2012~~2013, compared to $7270.94 million for the thirteen weeks ended ~~October~~April 28, 292012, ~~2011. The~~primarily ~~decrease was~~ due to aan ~~decline~~increase in Base rents ~~predominantly as a result of a non-cash cumulative straight-line lease accounting correction recorded in the third quarter of fiscal 2011, as well as a decrease in Tenant reimbursements~~.

Total revenues decreased by $3.0 million, or 1.4%, to $211.5 million for the thirty-nine weeks ended October 27, 2012, compared to $214.5 million for the thirty-nine weeks ended October 29, 2011. The decrease was due to a decline in Tenant reimbursements and Base rents predominantly as a result of a non-cash cumulative straight-line lease accounting correction recorded in the third quarter of fiscal 2011.

Depreciation

13 Weeks Ended

~~39 Weeks Ended~~

($ In thousands)

~~October~~May 274, ~~2012~~2013

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

$ Change

% Change

~~October 27, 2012~~

~~October 29, 2011~~

~~$ Change~~

~~% Change~~

Depreciation

78,~~314~~209

8,~~046~~065

~~(732~~144

)

~~(9.~~1.8

~~23,985~~

~~24,471~~

~~(486~~

)

~~(2.0~~

Depreciation ~~decreased~~increased by ~~$0.7~~a ~~million~~nominal ~~and~~amount ~~$0.5 million~~ for the thirteen ~~and thirty-nine~~ weeks ended ~~October~~May 274, ~~2012~~2013, ~~respectively,~~ compared to the same ~~periods~~period last year.

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Rental Expense

	13 Weeks Ended									~~39 Weeks Ended~~
($ In thousands)	~~October~~May 274, ~~2012~~2013		~~October~~April 2928, ~~2011~~2012		$ Change			% Change		~~October 27, 2012~~		~~October 29, 2011~~		~~$ Change~~			~~% Change~~
Rental expense	$	11,~~859~~302	$	11,~~958~~980	$	(99678	)	(05.87	)%	$	~~35,828~~	$	~~36,101~~	$	~~(273~~	)	~~(0.8~~	)%

Rental expense decreased by a$0.7 ~~nominal~~million, ~~amount~~or 5.7% to $11.3 million for the thirteen ~~and thirty-nine~~ weeks ended ~~October~~May 274, ~~2012~~2013, compared to $12.0 million for the same ~~periods~~period last year. The decrease was primarily due to an adjustment to non-cash straight-line third party rent amounts related to a change in estimated lease terms, as we have committed to exit certain properties early.

Common Area Maintenance Expenses

13 Weeks Ended

~~39 Weeks Ended~~

($ In thousands)

~~October~~May 274, ~~2012~~2013

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

$ Change

% Change

~~October 27, 2012~~

~~October 29, 2011~~

~~$ Change~~

~~% Change~~

Common area maintenance expenses

910,~~676~~002

109,~~712~~834

~~(1,036~~168

)

(91.7

~~29,359~~

~~31,218~~

~~(1,859~~

)

~~(6.0~~

Common area maintenance expenses ~~decreased~~increased by ~~$1.0~~a ~~million,~~nominal oramount ~~9.7%, to $9.7 million~~ for the thirteen weeks ended ~~October~~May ~~27, 2012, compared to $10.7 million for the thirteen weeks ended October 29, 2011, and decreased by $1.8 million, or 6.0%, to $29.~~4 ~~million for the thirty-nine weeks ended October 27~~, ~~2012~~2013, compared to ~~$31.2 million for~~ the ~~thirty-nine~~same ~~weeks~~period ~~ended~~last ~~October 29, 2011~~year. These expenses are fully reimbursed by our tenant under the TRU Propco I Master Lease, and are reflected in Tenant reimbursements, which is a component of Total revenues.

Other Operating Expenses

13 Weeks Ended

~~39 Weeks Ended~~

($ In thousands)

~~October~~May 274, ~~2012~~2013

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

$ Change

% Change

~~October 27, 2012~~

~~October 29, 2011~~

~~$ Change~~

~~% Change~~

Other operating expenses

1,~~471~~188

1,~~583~~190

(~~112~~2

)

(70.12

~~3,726~~

~~4,240~~

~~(514~~

)

~~(12.1~~

Other operating expenses decreased by a nominal amount for the thirteen ~~and thirty-nine~~ weeks ended ~~October~~May 274, ~~2012~~2013, compared to the same ~~periods~~period last year.

Interest Expense, Net

	13 Weeks Ended								~~39 Weeks Ended~~
($ In thousands)	~~October~~May 274, ~~2012~~2013		~~October~~April 2928, ~~2011~~2012		$ Change		% Change		~~October 27, 2012~~		~~October 29, 2011~~		~~$ Change~~		~~% Change~~
Interest expense	$	26,751	$	26,687	$	64	0.2	%	$	80,710	$	80,600	$	110	0.1	%
Interest expense, net	$	27,346	$	26,999	$	347	1.3	%

Interest expense, net increased by a nominal amount for the thirteen ~~and thirty-nine~~ weeks ended ~~October~~May 274, ~~2012~~2013, compared to the same ~~periods~~period last year.

Earnings from Discontinued Operations

13 Weeks Ended

~~39 Weeks Ended~~

($ In thousands)

~~October~~May 274, ~~2012~~2013

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

$ Change

% Change

~~October 27, 2012~~

~~October 29, 2011~~

~~$ Change~~

~~% Change~~

Earnings from discontinued operations

34,~~724~~910

32,~~144~~267

~~580~~2,643

18116.46

~~5,250~~

~~8,365~~

~~(3,115~~

)

~~(37.2~~

Earnings from discontinued operations increased by $02.6 million to $34.79 million for the thirteen weeks ended ~~October~~May 274, ~~2012~~2013, compared to earnings of $32.13 million for the thirteen weeks ended ~~October~~April 2928, ~~2011~~2012. The increase was primarily due to an increase in termination payments ofrecognized ~~approximately $1.9 million~~ from Toys-Delaware as required under the TRU Propco I Master Lease of approximately $3.9 million, as compared to the same period last year. See Note 63 to the Condensed Financial Statements entitled “~~Related~~Discontinued ~~party transactions~~operations” for further details.

Earnings from discontinued operations decreased by $3.1 million to $5.3 million for the thirty-nine weeks ended October 27, 2012, compared to earnings of $8.4 million for the thirty-nine weeks ended October 29, 2011. The decrease was primarily due

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to a reduction in Base rents and a decrease in termination payments of $0.9 million compared to the same period last year. See Note 3 to the Condensed Financial Statements entitled “Discontinued operations” for further details.

Liquidity and Capital Resources

Overview

As of ~~October~~May 274, ~~2012~~2013, we were in compliance with all of ~~our~~the 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. 9

~~Additionally,~~Our ~~the~~largest ~~indenture~~source ~~governing~~of ~~the~~operating ~~Notes~~cash ~~allows~~flows usis ~~to re-invest the net~~ cash ~~proceeds~~collections from ~~the~~our ~~sale~~lessees. In ofgeneral, ~~properties~~we ~~within~~utilize ~~720~~our ~~days~~cash ~~subsequent~~ to ~~the~~service ~~receipt~~debt, ofpay ~~the~~normal ~~proceeds. If~~operating ~~net~~costs ~~cash~~and ~~proceeds~~at ~~are~~the ~~not~~discretion ~~reinvested~~of ~~within~~our ~~720~~sole ~~days of receipt~~member, ~~the~~based ~~net~~on ~~cash proceeds are deemed to be excess proceeds (“Excess Proceeds”). When~~ the ~~aggregate~~recommendation ~~amount~~ of ~~Excess~~our ~~Proceeds exceeds $10.0 million~~management, weand ~~are~~as ~~required~~permitted toby ~~make~~the anindenture ~~offer~~governing ~~to all holders of~~ the Notes, ~~within~~declare 30and ~~days~~pay todividends ~~purchase~~or ~~Notes~~make ~~with the Excess Proceeds~~distributions. ~~Although~~From wetime ~~have~~to ~~recognized~~time, ~~sales~~a ~~proceeds~~portion ~~in excess~~ of ~~$10.0~~our ~~million~~cash asmay ofalso ~~October 27,~~be ~~2012,~~used ~~these~~to ~~are~~tender ~~not~~a ~~classified~~portion asof ~~Excess Proceeds given~~ the ~~time~~outstanding ~~that~~Notes ~~has~~as ~~elapsed~~permitted ~~from~~by the ~~sale~~indenture ofgoverning the ~~properties~~Notes.

WeAdditionally, ~~have~~the ~~been~~indenture ~~able~~governing the Notes allows us to ~~meet~~re-invest ~~our~~the net cash ~~needs~~proceeds ~~principally~~from bythe ~~using~~sale ~~cash~~of onproperties ~~hand~~(“Asset ~~and~~Sales” ~~cash~~as ~~flows~~defined ~~from~~in ~~operations~~the ~~and~~indenture) wewithin ~~believe~~720 ~~that~~days subsequent to the receipt of the proceeds. If net cash ~~from~~proceeds ~~operations~~are ~~along~~not ~~with~~reinvested ~~existing~~within 720 days of receipt, the net cash ~~will~~proceeds are deemed to be ~~sufficient~~excess proceeds (“Excess Proceeds”). When the aggregate amount of Excess Proceeds exceeds $10.0 million, we are required to ~~fund~~make ~~expected~~an ~~cash~~offer ~~flow~~to ~~requirements~~all ~~for~~holders of the ~~next~~Notes ~~twelve~~within ~~months~~30 days to purchase Notes with the Excess Proceeds. We have not recognized cumulative Asset Sales, as defined in the indenture, in excess of $10.0 million as of May 4, 2013.

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 generated 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~~May 274, ~~2012~~2013			~~October~~April 2928, ~~2011~~2012			Change
Net cash provided by operating activities	$	7641,~~668~~982		$	8240,~~202~~871		$	(51,~~534~~111	)
Net cash provided by investing activities	46,~~437~~250			~~7,538~~—			(36,~~101~~250		)
Net cash used in financing activities	(56,491		)	(49,140		)	(7,351		)
Net increase during period in cash and cash equivalents	$	48,232		$	40,871		$	7,361
Net increase during period in cash	$	24,614		$	40,600		$	(15,986	)

Cash Flows Provided by Operating Activities

During the ~~thirty-nine~~thirteen weeks ended ~~October~~May 274, ~~2012~~2013, net cash provided by operating activities was $7642.70 million, compared to $8240.29 million for the ~~thirty-nine~~thirteen weeks ended ~~October~~April 2928, ~~2011~~2012. The ~~decrease~~increase in net cash provided by operating activities was primarily due to a ~~decline~~decrease in ~~termination~~third ~~payments~~party ~~received~~prepaid ~~from~~expenses, ~~Toys-Delaware~~partially asoffset ~~required~~by ~~under~~an ~~the~~increase ~~TRU~~in ~~Propco~~amounts Idue ~~Master~~from ~~Lease of approximately $3.7 million for early lease terminations and properties sold during the thirty~~Toys-~~nine~~Delaware, ~~weeks~~both ~~ended~~of ~~October 27,~~which ~~2012,~~were as ~~compared~~a toresult of the ~~same~~timing ~~period~~of ~~last~~payments ~~year~~made.

Cash Flows Provided by Investing Activities

During the ~~thirty-nine~~thirteen weeks ended ~~October~~May 274, ~~2012~~2013, net cash provided by investing activities was $46.43 million ~~compared to $7~~.~~5 million for the thirty-nine weeks ended October 29, 2011.~~ The ~~decrease in~~ net cash provided by investing activities was ~~primarily~~ due to ~~a reduction in~~ proceeds received from the sale of real estate of $46.23 million.

Cash Flows Used in Financing Activities

During the thirty-nine weeks ended October 27, 2012, net cash used in financing activities was $56.5 million compared to $49.1 million for the thirty-nine weeks ended October 29, 2011. The increase in net cash used in financing activities was primarily due to a $6.3 million increase in Distributions, as compared to the thirty-nine weeks ended October 29, 2011.

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~~February 282, ~~2012~~2013, 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~~February 282, ~~2012~~2013, for a discussion of critical accounting policies.

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Recently Adopted Accounting Pronouncements

~~In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No~~None. 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. As of January 29, 2012, the Company adopted ASU 2011-04 and 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 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, and such disclosures are intended to be covered by the safe harbors created thereby. These forward looking statements reflect our current views with respect to, among other things, our operations and financial performance. 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, the seasonality of Toys-Delaware’s business, competition in the retail industry, changes in Toys-Delaware's product distribution mix and distribution channels, general economic factors in the United States and other countries in which Toys-Delaware conducts its business, consumer spending patterns, Toys-Delaware's ability to implement its strategy, the availability of adequate financing to us, Toys-Delaware and TRU, access to trade credit, changes in consumer preferences, Toys-Delaware's dependence on key vendors for its merchandise, political and other developments associated with Toys-Delaware's international operations, costs of goods that Toys-Delaware sells, labor costs, transportation costs, domestic and international events affecting the delivery of toys and other products to Toys-Delaware's stores, product safety issues including product recalls, the existence of adverse litigation, changes in laws that impact Toys-Delaware's business, Toys-Delaware's and TRU's respective substantial level of indebtedness and related debt-service obligations, restrictions imposed by covenants in their and our respective debt agreements and other risks, uncertainties and factors set forth under Item 1A entitled “RISK FACTORS” of our Annual Report on Form 10-K filed on May 3, 2013 and in our reports and documents filed with the Securities and Exchange Commission. In addition, Toys-Delaware typically earns a disproportionate part of its annual operating earnings in the fourth quarter as a result of seasonal buying patterns and ~~other~~these ~~publicly~~buying ~~released~~patterns ~~materials~~are difficult to forecast with certainty. These factors should not be construed as exhaustive, and should be read in conjunction with the other cautionary statements that are included in this report. We believe that all forward-looking statements are based on reasonable assumptions when made; however, ~~both~~we ~~oral~~caution ~~and~~that ~~written~~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 ~~have~~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.

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.

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Item 3.	Quantitative and Qualitative Disclosures About Market Risk

There has been no ~~material~~ change in our exposure to market risk during the ~~thirty-nine~~thirteen weeks ended ~~October~~May 274, ~~2012~~2013. 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~~February 282, ~~2012~~2013.


Item 4.	Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures are the controls and other procedures that are designed to ~~provide~~ensure ~~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 our 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 ~~third~~first quarter of fiscal ~~2012~~2013 that have materially affected, or are reasonably likely to materially affect, our 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~~February 282, ~~2012~~2013.


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

None.


Item 3.	Defaults Upon Senior Securities

None.


Item 4.	Mine Safety 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 11, 2012		/s/ F. Clay Creasey, Jr.
Date: June 18, 2013		/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~~May 274, ~~2012~~2013 (filed as Exhibit 99.1 to the Form 8-K filed by Toys “R” Us, Inc. on ~~December~~June 1118, ~~2012~~2013 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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