Burlington Stores, Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Consolidated Financial Statements Report of Independent Registered Public Accounting Firm 46 Consolidated Statements of Income (Loss) for the fiscal years ended January 29, 2022, January 30, 2021 and February 2, 2019 49 Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended January 29, 2022, January 30, 2021 and February 2, 2019 50 Consolidated Balance Sheets as of January 29, 2022 and January 30, 2021 51 Consolidated Statements of Cash Flows for the fiscal years ended January 29, 2022, January 30, 2021 and February 2, 2019 52 Consolidated Statements of Stockholders’ Equity for the fiscal years ended January 29, 2022, January 30, 2021 and February 2, 2019 53 Notes to Consolidated Financial Statements for the fiscal years ended January 29, 2022, January 30, 2021 and February 2, 2019 54 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Burlington Stores, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Burlington Stores, Inc. and subsidiaries (the "Company") as of January 29, 2022 and January 30, 2021, the related consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity, and cash flows, for each of the three years in the period ended January 29, 2022, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of January 29, 2022 and January 30, 2021, and the results of its operations and its cash flows for each of the three years in the period ended January 29, 2022, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting. Change in Accounting Principle As discussed in Note 2 to the financial statements, on January 31, 2021, the Company adopted Financial Accounting Standards Board Accounting Standards Update (ASU) 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to 46 error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Retail Inventory Method—Impact of Markdowns—Refer to Note 1 to the financial statements Critical Audit Matter Description The Company values merchandise inventories at the lower of cost or market using the retail inventory method. Under this method, the valuation of inventories at cost and the resulting gross margins are determined by applying a calculated cost-to-retail ratio to the retail value of inventories. The retail inventory method is an averaging method that results in valuing inventory at the lower of cost or market provided markdowns are taken timely to reduce the retail value of inventory. Merchandise inventories as of January 29, 2022, were $1,021 million. The judgments involved in determining when to record markdowns can significantly impact the ending inventory valuation and the resulting gross profit. Given the significant judgments necessary to identify and record markdowns timely, performing audit procedures to evaluate the timeliness of markdowns involved a high degree of auditor judgment. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the timing of markdowns taken included the following, among others: • We tested the effectiveness of controls over inventory valuation, specifically those over the determination and execution of markdowns. • We made a selection of markdowns recorded throughout the year to test the accuracy and timeliness of markdowns taken. • We made a selection of markdowns recorded after year-end to determine if the selected markdowns should have been taken as of the year-end balance sheet date. • We made a selection of purchases made throughout the year; determined if those purchases were subsequently marked down; and, if marked down, that the markdown was recorded timely. • We analyzed trends in the aging of inventory to determine if there were any significant fluctuations in aged inventory that would indicate markdowns were not taken timely. • We developed an expectation of markdowns in ending inventory based on historical relationships between markdowns and inventory balances on hand and compared to recorded markdowns. 47 /s/ Deloitte & Touche LLP Parsippany, New Jersey March 16, 2022 We have served as the Company’s auditor since 1983. 48 BURLING TON STORES, INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS) (All amounts in thousands, except per share data) Fiscal Year Ended January 29, January 30, February 1, 2022 2021 2020 REVENUES: Net sales $ 9,306,549 $ 5,751,541 $ 7,261,243 Other revenue 15,707 12,439 25,155 Total revenue 9,322,256 5,763,980 7,286,398 COSTS AND EXPENSES: Cost of sales 5,436,155 3,555,024 4,228,740 Selling, general and administrative expenses 2,868,527 2,326,928 2,228,178 Costs related to debt issuances and amendments 3,419 3,633 ( 375 ) Depreciation and amortization 249,217 220,390 210,720 Impairment charges - long-lived assets 7,748 6,012 4,315 Other income - net ( 11,630 ) ( 8,353 ) ( 16,531 ) Loss on extinguishment of debt 156,020 202 — Interest expense 67,502 97,767 50,826 Total costs and expenses 8,776,958 6,201,603 6,705,873 Income (loss) before income tax expense (benefit) 545,298 ( 437,623 ) 580,525 Income tax expense (benefit) 136,459 ( 221,124 ) 115,409 Net income (loss) $ 408,839 $ ( 216,499 ) $ 465,116 Net income (loss) per common share: Common stock - basic $ 6.14 $ ( 3.28 ) $ 7.05 Common stock - diluted $ 6.00 $ ( 3.28 ) $ 6.91 Weighted average number of common shares: Common stock - basic 66,588 65,962 65,943 Common stock - diluted 68,126 65,962 67,293 See Notes to Consolidated Financial Statements. 49 BURLINGT ON STORES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (All amounts in thousands) Fiscal Year Ended January 29, January 30, February 1, 2022 2021 2020 Net income (loss) $ 408,839 $ ( 216,499 ) $ 465,116 Other comprehensive income (loss), net of tax: Interest rate derivative contracts: Net unrealized gains (losses) arising during the period 7,931 ( 11,458 ) ( 16,606 ) Net reclassification into earnings during the period 10,643 7,403 1,259 Other comprehensive income (loss), net of tax 18,574 ( 4,055 ) ( 15,347 ) Total comprehensive income (loss) $ 427,413 $ ( 220,554 ) $ 449,769 See Notes to Consolidated Financial Statements. 50 BURLINGTON STORES, INC. CONSOLIDATED B ALANCE SHEETS (All amounts in thousands, except share and per share data) January 29, January 30, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 1,091,091 $ 1,380,276 Restricted cash and cash equivalents 6,582 6,582 Accounts receivable — net of allowance for doubtful accounts of $ 3,305 and $ 4,855 , respectively 54,089 62,161 Merchandise inventories 1,021,009 740,788 Assets held for disposal 4,358 6,655 Prepaid and other current assets 370,515 314,154 Total current assets 2,547,644 2,510,616 Property and equipment—net 1,552,237 1,438,863 Operating lease assets 2,638,473 2,469,366 Tradenames 238,000 238,000 Goodwill 47,064 47,064 Deferred tax assets 3,959 4,422 Other assets 62,136 72,761 Total assets $ 7,089,513 $ 6,781,092 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,080,802 $ 862,638 Current operating lease liabilities 358,793 304,629 Other current liabilities 493,695 512,830 Current maturities of long term debt 14,357 3,899 Total current liabilities 1,947,647 1,683,996 Long term debt 1,541,102 1,927,770 Long term operating lease liabilities 2,539,420 2,400,782 Other liabilities 80,904 103,940 Deferred tax liabilities 220,023 199,850 Commitments and contingencies (Note 16) Stockholders’ equity: Preferred stock, $ 0.0001 par value: authorized: 50,000,000 shares; no shares issued and outstanding — — Common stock, $ 0.0001 par value: Authorized: 500,000,000 shares; Issued: 81,677,315 shares and 80,661,453 shares, respectively; Outstanding: 66,491,555 shares and 66,386,331 shares, respectively 7 7 Additional paid-in-capital 1,927,554 1,809,831 Accumulated earnings (deficit) 414,292 ( 11,702 ) Accumulated other comprehensive loss ( 4,441 ) ( 23,015 ) Treasury stock, at cost ( 1,576,995 ) ( 1,310,367 ) Total stockholders' equity 760,417 464,754 Total liabilities and stockholders' equity $ 7,089,513 $ 6,781,092 See Notes to Consolidated Financial Statements. 51 BURLINGTON STORES, INC. CONSOLIDATED STATEM ENTS OF CASH FLOWS (All amounts in thousands) Fiscal Year Ended January 29, January 30, February 1, 2022 2021 2020 OPERATING ACTIVITIES Net income (loss) $ 408,839 $ ( 216,499 ) $ 465,116 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization 249,217 220,390 210,720 Impairment charges — long-lived assets 7,748 6,012 4,315 Amortization of deferred financing costs 5,323 4,450 1,247 Accretion of long term debt instruments 889 24,775 813 Deferred income taxes 51,952 ( 24,959 ) 9,070 Loss on extinguishment of debt 156,020 202 — Non-cash stock compensation expense 58,546 55,845 43,928 Non-cash lease expense ( 10,294 ) ( 1,530 ) 12,599 Cash received from landlord allowances 34,051 40,663 56,280 Changes in assets and liabilities: Accounts receivable 10,186 26,858 ( 8,816 ) Merchandise inventories ( 280,220 ) 36,459 176,430 Prepaid and other current assets ( 56,363 ) ( 177,454 ) ( 13,598 ) Accounts payable 214,792 104,607 ( 90,899 ) Other current liabilities ( 33,129 ) 103,871 25,202 Other long term assets and long term liabilities ( 2,782 ) 562 3,176 Other operating activities 18,384 14,929 ( 3,858 ) Net cash provided by operating activities 833,159 219,181 891,725 INVESTING ACTIVITIES Cash paid for property and equipment ( 352,467 ) ( 273,282 ) ( 328,357 ) Lease acquisition costs ( 576 ) — ( 1,983 ) Proceeds from insurance recoveries related to property and equipment — 220 5,131 Proceeds from sale of property and equipment and assets held for sale 8,654 — — Other investing activities — ( 1,070 ) 611 Net cash (used in) investing activities ( 344,389 ) ( 274,132 ) ( 324,598 ) FINANCING ACTIVITIES Proceeds from long term debt—ABL Line of Credit — 400,000 1,294,400 Principal payments on long term debt—ABL Line of Credit — ( 400,000 ) ( 1,294,400 ) Proceeds from long term debt—Term B-6 Loans 956,608 — — Principal payments on long term debt—Term B-6 Loans ( 4,807 ) — — Principal payments on long term debt—Term B-5 Loans ( 961,415 ) — — Proceeds from long term debt—Convertible Note — 805,000 — Principal payment on long term debt—Convertible Notes ( 201,695 ) — — Proceeds from long term debt—Secured Note — 300,000 — Principal payments on long term debt—Secured Notes ( 323,905 ) — — Purchase of treasury shares ( 266,628 ) ( 65,526 ) ( 323,080 ) Proceeds from stock option exercises 39,887 34,924 34,222 Deferred financing costs ( 2,143 ) ( 28,815 ) — Other financing activities ( 13,857 ) ( 13,430 ) ( 2,769 ) Net cash (used in) provided by financing activities ( 777,955 ) 1,032,153 ( 291,627 ) (Decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents ( 289,185 ) 977,202 275,500 Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 1,386,858 409,656 134,156 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 1,097,673 $ 1,386,858 $ 409,656 Supplemental disclosure of cash flow information: Interest paid $ 52,671 $ 48,392 $ 47,071 Income tax payments - net $ 130,247 $ 44,993 $ 110,588 Non-cash investing and financing activities: Shares issued to repurchase Convertible Notes $ 151,206 — — Accrued purchases of property and equipment $ 63,296 $ 44,490 $ 62,814 Acquisition of finance leases $ — $ — $ 19,875 See Notes to Consolidated Financial Statements. 52 BURLINGTON STORES, INC. CONSOLIDATED STATEMENTS O F STOCKHOLDERS’ EQUITY (All dollar amounts in thousands) Common Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Treasury Stock Shares Amount Capital Deficit Loss Shares Amount Total Balance at February 2, 2019 79,224,669 $ 7 $ 1,508,996 $ ( 260,919 ) $ ( 3,613 ) ( 12,079,572 ) $ ( 921,761 ) $ 322,710 Net income — — — 465,116 — — — 465,116 Stock options exercised 710,964 — 34,222 — — — — 34,222 Shares used for tax withholding — — — — — ( 132,222 ) ( 23,200 ) ( 23,200 ) Shares purchased as part of publicly announced programs — — — — — ( 1,740,740 ) ( 299,880 ) ( 299,880 ) Forfeiture of restricted shares, net of issuances of 1,759 restricted shares ( 53,127 ) — — — — — — — Stock based compensation — — 43,928 — — — — 43,928 Unrealized losses on interest rate derivative contracts, net of related taxes of $ 6.4 million — — — — ( 16,606 ) — — ( 16,606 ) Amount reclassified into earnings, net of related taxes of $ 0.5 million — — — — 1,259 — — 1,259 Cumulative-effect adjustment — — — 600 — — — 600 Balance at February 1, 2020 79,882,506 7 1,587,146 204,797 ( 18,960 ) ( 13,952,534 ) ( 1,244,841 ) 528,149 Net loss — — — ( 216,499 ) — — — ( 216,499 ) Stock options exercised 731,954 — 34,924 — — — — 34,924 Shares used for tax withholding — — — — — ( 79,015 ) ( 15,368 ) ( 15,368 ) Shares purchased as part of publicly announced programs — — — — — ( 243,573 ) ( 50,158 ) ( 50,158 ) Vesting of restricted shares, net of forfeitures of 9,437 restricted shares 46,993 — — — — — — — Stock based compensation — — 55,845 — — — — 55,845 Equity component of convertible notes issuance, net of related taxes of $ 44.1 million — — 131,916 — — — — 131,916 Unrealized losses on interest rate derivative contracts, net of related taxes of $ 4.1 million — — — — ( 11,458 ) — — ( 11,458 ) Amount reclassified into earnings, net of related taxes of $ 2.8 million — — — — 7,403 — — 7,403 Balance at January 30, 2021 80,661,453 7 1,809,831 ( 11,702 ) ( 23,015 ) ( 14,275,122 ) ( 1,310,367 ) 464,754 Net income — — — 408,839 — — — 408,839 Stock options exercised 418,173 — 39,887 — — — — 39,887 Shares used for tax withholding — — — — — ( 53,783 ) ( 16,612 ) ( 16,612 ) Shares purchased as part of publicly announced programs — — — — — ( 856,855 ) ( 250,016 ) ( 250,016 ) Vesting of restricted shares, net of forfeitures of 2,886 restricted shares 83,698 — — — — — — — Stock based compensation — — 58,546 — — — — 58,546 Shares issued to redeem convertible notes 513,991 — 151,206 — — — — 151,206 Unrealized gains on interest rate derivative contracts, net of related taxes of $ 3.0 million — — — — 7,931 — — 7,931 Amount reclassified into earnings, net of related taxes of $ 4.0 million — — — — 10,643 — — 10,643 Adoption of ASU 2020-06 (Note 2) — — ( 131,916 ) 17,155 — — — ( 114,761 ) Balance at January 29, 2022 81,677,315 $ 7 $ 1,927,554 $ 414,292 $ ( 4,441 ) ( 15,185,760 ) $ ( 1,576,995 ) $ 760,417 See Notes to Consolidated Financial Statements. 53 BURLINGTON STORES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Business As of January 29, 2022, Burlington Stores, Inc., a Delaware corporation (collectively with its subsidiaries, the Company), has expanded its store base to 840 retail stores in 45 states and Puerto Rico. The Company sells in-season, fashion-focused merchandise at up to 60 % off other retailers’ prices, including: women’s ready-to-wear apparel, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. As of January 29, 2022 , the Company operated stores under the names “Burlington Stores” ( 837 stores), “Cohoes Fashions” ( 2 stores), and “MJM Designer Shoes” ( 1 store). Cohoes Fashions offers products similar to those offered by Burlington Stores. MJM Designer Shoes offers moderately priced designer and fashion shoes. Basis of Consolidation and Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The Consolidated Financial Statements include the accounts of Burlington Stores, Inc. and its subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Fiscal Years The Company defines its fiscal year as the 52 or 53-week period ending on the Saturday closest to January 31. The fiscal years ended January 29, 2022 (Fiscal 2021), January 30, 2021 (Fiscal 2020 ) and February 1, 2020 (Fiscal 2019) each consisted of 52 weeks. Use of Estimates Certain amounts included in the Consolidated Financial Statements are estimated based on historical experience, currently available information and management’s judgment as to the expected outcome of future conditions and circumstances. While every effort is made to ensure the integrity of such estimates, actual results could differ from these estimates, and such differences could have a material impact on the Company’s Consolidated Financial Statements. COVID-19 On March 11, 2020, the World Health Organization declared the novel coronavirus (known as COVID-19) outbreak to be a global pandemic. As a result, the Company began the temporary closing of some its stores, and effective March 22, 2020, the Company made the decision to temporarily close all of its stores, distribution centers (other than processing of received inventory) and corporate offices to combat the rapid spread of COVID-19. The Company began re-opening stores on May 11, 2020, with the majority of stores, as well as all distribution centers, re-opened by mid-June 2020, and substantially all stores re-opened by the end of the second quarter of Fiscal 2020. In response to the COVID-19 pandemic and the temporary closing of stores, the Company provided two weeks of financial support to associates impacted by these store closures and by the shutdown of distribution centers. The Company temporarily furloughed most store and distribution center associates, as well as some corporate associates, but continued to provide benefits to furloughed associates in accordance with its benefit plans. In addition, the Company paid 100 % of medical benefit premiums during the period they were furloughed. During the second quarter, the Company recalled all furloughed associates at re-opened stores, as well as corporate and distribution facilities. In order to maintain financial flexibility during these uncertain times, the Company completed several debt transactions in the first quarter of Fiscal 2020. Refer to Note 7, "Long Term Debt," for further discussion regarding these debt transactions. Additionally, the Company took the following steps to further enhance its financial flexibility: • Carefully managed operating expenses, working capital and capital expenditures, including ceasing substantially all buying activities while stores were closed. The Company subsequently resumed its buying activities, while continuing its conservative approach toward operating expenses and capital expenditures; • Negotiated rent deferral agreements with landlords, which were substantially complete as of the end of Fiscal 2021; 54 • Temporarily suspended the Company’s share repurchase program, which resumed during the third quarter of Fiscal 2021; • The Company’s CEO voluntarily agreed to not take a salary; the Company’s Board of Directors voluntarily forfeited their cash compensation; the Company’s executive leadership team voluntarily agreed to decrease their salary by 50 %; and smaller salary reductions were temporarily put in place for all associates through a certain level. This compensation was reinstated once substantially all of the Company’s stores re-opened; and • The annual incentive bonus payments related to Fiscal 2019 performance were delayed to the second quarter of Fiscal 2020, and merit pay increases for Fiscal 2020 were delayed to the third quarter of Fiscal 2020. Due to the aging of inventory related to the temporary store closures discussed above, as well as the impact of seasonality on the Company’s merchandise, the Company recognized inventory markdown reserves of $ 271.9 million during the three month period ended May 2, 2020. These reserves covered markdowns taken during the second quarter of Fiscal 2020. These charges were included in “Cost of sales” on the Company’s Consolidated Statement of Income (Loss). On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) was signed into law, which provided emergency economic assistance for American workers, families and businesses affected by the COVID-19 pandemic. As a result of amending prior returns to carry back the federal net operating loss generated on the Fiscal 2020 tax return, the Company expects to obtain a one-time tax refund of $ 245.5 million, which is included in the line item “Prepaid and other current assets” on the Company's Consolidated Balance Sheet. Cash and Cash Equivalents Cash and cash equivalents represent cash and short-term, highly liquid investments with maturities of three months or less at the time of purchase. Book cash overdrafts are included in the line item “Accounts payable” on the Company’s Consolidated Balance Sheets. Accounts Receivable Accounts receivable consist of credit card receivables, insurance receivables and other receivables. Accounts receivable are recorded at net realizable value, which approximates fair value. The Company provides an allowance for doubtful accounts for amounts deemed uncollectible. Inventories Merchandise inventories are valued at the lower of cost or market, as determined by the retail inventory method. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are calculated by applying a calculated cost to retail ratio to the retail value of inventories. The Company regularly records a provision for estimated shortage, thereby reducing the carrying value of merchandise inventory. Complete physical inventories of all of the Company’s stores and warehouses are performed no less frequently than annually, with the recorded amount of merchandise inventory being adjusted to coincide with these physical counts. The Company records its cost of merchandise (net of purchase discounts and certain vendor allowances), certain merchandise acquisition costs (primarily commissions and import fees), inbound freight, outbound freight from distribution centers, and freight on internally transferred merchandise in the line item “Cost of sales” in the Company’s Consolidated Statements of Income (Loss). Costs associated with the Company’s distribution, buying, and store receiving functions (product sourcing costs) are included in the line items “Selling, general and administrative expenses” and “Depreciation and amortization” in the Company’s Consolidated Statements of Income (Loss). Product sourcing costs included within the line item “Selling, general and administrative expenses” amounted to $ 618.3 million, $ 433.8 million and $ 339.1 million during Fiscal 2021, Fiscal 2020 and Fiscal 2019 , respectively. Depreciation and amortization related to the distribution and purchasing functions for the same periods amounted to $ 45.0 million, $ 30.8 million and $ 31.9 million, respectively. Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 20 to 40 years for buildings, depending upon the expected useful life of the facility, and 3 to 15 55 years for store fixtures and equipment. Leasehold improvements are amortized over the lease term, including any reasonably assured renewal options or the expected economic life of the improvement, whichever is less. Repairs and maintenance expenditures are expensed as incurred. Renewals and betterments, which significantly extend the useful lives of existing property and equipment, are capitalized. Assets recorded under capital leases are recorded at the present value of minimum lease payments and are amortized over the lease term. Amortization of assets recorded as capital leases is included in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income (Loss). The carrying value of all long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, in accordance with ASC Topic No. 360 “ Property, Plant, and Equipment” (Topic No. 360). Refer to Note 6, “Impairment Charges,” for further discussion of the Company’s measurement of impairment of long-lived assets. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset to undiscounted pre-tax future net cash flows expected to be generated by that asset. If the undiscounted future cash flows are not adequate to recover the carrying value of the asset, an impairment charge is recognized for the amount by which the carrying amount of the assets exceeds the fair value of such assets. Refer to Note 6, “Impairment Charges,” for further discussion of the Company’s measurement of impairment of long-lived assets. Capitalized Computer Software Costs The Company accounts for capitalized software in accordance with ASC Topic No. 350 “Intangibles—Goodwill and Other” (Topic No. 350) which requires the capitalization of certain costs incurred in connection with developing or obtaining software for internal use. The Company capitalized $ 25.3 million, $ 12.2 million, and $ 18.0 million relating to these costs during Fiscal 2021, Fiscal 2020, and Fiscal 2019 , respectively. Intangible Assets The Company accounts for intangible assets in accordance with Topic No. 350. The Company’s intangible assets represent tradenames. The tradename asset “Burlington” is expected to generate cash flows indefinitely and, therefore, is accounted for as an indefinite-lived asset not subject to amortization. The Company evaluates its intangible assets for possible impairment as follows: Indefinite-lived intangible assets: The Company tests identifiable intangible assets with an indefinite life for impairment on an annual basis, or when a triggering event occurs, relying on a number of factors that include operating results, business plans and projected future cash flows. The impairment test consists of a comparison of the fair value of the indefinite-lived intangible asset with its carrying amount. The Company determines fair value through the relief of royalty method which is a widely accepted valuation technique. On the first business day of the second quarter, the Company’s annual assessment date, the Company performed a quantitative analysis and determined that the fair values of each of the Company’s identifiable intangible assets are greater than their respective carrying values. There were no impairment charges recorded during Fiscal 2021, Fiscal 2020 or Fiscal 2019 related to indefinite-lived intangible assets. Finite-lived intangible assets: Identifiable intangible assets that are subject to amortization are evaluated for impairment in accordance with Topic No. 360 using a process similar to that used to evaluate other long-lived assets as described in Note 6, “Impairment Charges.” An impairment charge is recognized for the amount by which the carrying value exceeds the fair value of the asset. There were no impairment charges related to finite-lived intangible assets during Fiscal 2021, Fiscal 2020, and Fiscal 2019 . Refer to Note 6, “Impairment Charges,” for further discussion of the Company’s measurement of impairment of long-lived assets. Goodwill Goodwill represents the excess of the acquisition cost over the estimated fair value of tangible assets and other identifiable intangible assets acquired less liabilities assumed. Topic No. 350 requires a comparison, at least annually, of the carrying value of the assets and liabilities associated with a reporting unit, including goodwill, with the fair value of the reporting unit. The Company determines fair value through multiple widely accepted valuation techniques. These techniques use a variety of assumptions including projected market conditions, discount rates and future cash flows. If the carrying value of the assets and liabilities exceeds the fair value of the reporting unit, the Company would calculate the implied fair value of its reporting unit goodwill as compared with the carrying value of its reporting unit goodwill to determine the appropriate impairment charge. On the first business day of the second fiscal quarter, the Company’s annual assessment date, the Company performed a quantitative analysis and determined that the fair value of the Company’s reporting unit was greater than its carrying value. There were no impairment charges related to goodwill during Fiscal 2021, Fiscal 2020 or Fiscal 2019 . 56 Other Assets Other assets consist primarily of landlord-owned store assets that the Company has paid for as part of its lease and deferred financing costs associated with the Company’s senior secured asset-based revolving credit facility (the ABL Line of Credit). Landlord-owned assets represent leasehold improvements at certain stores for which the Company has paid and derives a benefit, but the landlord has retained title. These assets are amortized over the lease term inclusive of reasonably assured renewal options, and are included in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income (Loss). Deferred financing costs are amortized over the life of the ABL Line of Credit using the interest method of amortization. Amortization of deferred financing costs is recorded in the line item “Interest expense” in the Company’s Consolidated Statements of Income (Loss). Other Current Liabilities Other current liabilities primarily consist of accrued payroll costs, self-insurance reserves, customer liabilities, accrued operating expenses, sales tax payable, payroll taxes payable and other miscellaneous items. Customer liabilities totaled $ 35.5 million and $ 30.2 million as of January 29, 2022 and January 30, 2021, respectively. The Company has risk participation agreements with insurance carriers with respect to workers’ compensation, general liability insurance and health insurance. Pursuant to these arrangements, the Company is responsible for paying individual claims up to designated dollar limits. The amounts related to these claims are estimated and can vary based on changes in assumptions or claims experience included in the associated insurance programs. An increase in workers’ compensation claims, health insurance claims or general liability claims may result in a corresponding increase in costs related to these claims. Self-insurance reserves as of January 29, 2022 and January 30, 2021 were: (in thousands) January 29, 2022 January 30, 2021 Short-term self-insurance reserve(a) $ 33,734 $ 33,191 Long-term self-insurance reserve(b) 47,841 47,721 Total $ 81,575 $ 80,912 (a) Represents the portions of the self-insurance reserve expected to be paid in the next twelve months, which were recorded in the line item “Other current liabilities” in the Company’s Consolidated Balance Sheets. (b) Represents the portions of the self-insurance reserve expected to be paid in excess of twelve months, which was recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheets. Other Liabilities Other liabilities primarily consist of the long term portion of self-insurance reserves, the fair value of derivative contracts and tax liabilities associated with the uncertain tax positions recognized by the Company in accordance with ASC Topic No. 740 “Income Taxes” (Topic No. 740). Revenue Recognition The Company records revenue at the time control of the goods are transferred to the customer, which the Company determines to be at point of sale and delivery of merchandise, net of allowances for estimated future returns, which is estimated based on historical return rates. The Company presents sales, net of sales taxes, in its Consolidated Statements of Income (Loss). The Company accounts for layaway sales in compliance with ASC Topic No. 606 “Revenue from Contracts with Customers” (Topic No. 606). Layaway sales are recognized upon delivery of merchandise to the customer. The amount of cash received upon initiation of the layaway is recorded as a deposit liability in the line item “Other current liabilities” in the Company’s Consolidated Balance Sheets. Stored value cards (gift cards and store credits issued for merchandise returns) are recorded as a liability at the time of issuance, and the related sale is recorded upon redemption. The Company determines an estimated stored value card breakage rate by continuously evaluating historical redemption data. Breakage income is recognized monthly in proportion to the historical redemption patterns for those stored value cards for which the likelihood of redemption is remote. 57 Other Revenue Other revenue consists of service fees (layaway and other miscellaneous service charges), subleased rental income and revenue from the Company's private label credit card (PLCC) as shown in the table below: (in thousands) Fiscal Years Ended January 29, 2022 January 30, 2021 February 1, 2020 Service fees $ 3,178 $ 3,186 $ 16,051 Subleased rental income, PLCC and other 12,529 9,253 9,104 Total $ 15,707 $ 12,439 $ 25,155 Private Label Credit Card The Company has a private label credit card program, in which customers earn reward points for purchases made using the card. The Company reduces net sales for the dollar value of any points earned at the time of the initial transaction, and subsequently recognizes net sales at the time the points are redeemed or expired. The Company receives royalty revenue based on a percentage of all purchases made on the card, which is recognized at the time of the initial transaction. The Company also receives a fee for each card activated. Revenue from activation fees are deferred and amortized over the period the Company performs its obligations under the card to the customer. Advertising Costs The Company’s advertising costs consist primarily of video, audio and digital marketing. Advertising costs are expensed the first time the advertising takes place, and are included in the line item “Selling, general and administrative expenses” on the Company’s Consolidated Statements of Income (Loss). During Fiscal 2021, Fiscal 2020 and Fiscal 2019, advertising costs were $ 48.5 million, $ 43.8 million and $ 73.1 million, respectively. Income Taxes The Company accounts for income taxes in accordance with Topic No. 740. Deferred income taxes reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. A valuation allowance against the Company’s deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In determining the need for a valuation allowance, management is required to make assumptions and to apply judgment, including forecasting future earnings, taxable income, and the mix of earnings in the jurisdictions in which the Company operates. Management periodically assesses the need for a valuation allowance based on the Company’s current and anticipated results of operations. The need for and the amount of a valuation allowance can change in the near term if operating results and projections change significantly. Topic No. 740 requires the recognition in the Company’s Consolidated Financial Statements of the impact of a tax position taken or expected to be taken in a tax return, if that position is “more likely than not” to be sustained upon examination by the relevant taxing authority, based on the technical merits of the position. The tax benefits recognized in the Company’s Consolidated Financial Statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. The Company records interest and penalties related to unrecognized tax benefits as part of income taxes. Other Income, Net Other income, net, consists of gains and losses on insurance proceeds, interest income, net gains and losses on disposition of assets, gift card breakage, and other miscellaneous items . The Company recognized $ 1.5 million, $ 3.2 million and $ 8.1 million of gain on insurance recoveries during Fiscal 2021, Fiscal 2020 and Fiscal 2019 , respectively. The Company also recognized $ 3.7 million during Fiscal 2021, related to the sale of certain state tax credits. There were no sales of tax credits during Fiscal 2020 or Fiscal 2019. Comprehensive Income (Loss) Comprehensive income (loss) is comprised of net income (loss) and the effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges, less amounts reclassified into earnings. 58 Lease Accounting The Company leases store locations, distribution centers and office space used in its operations. Beginning in Fiscal 2019, as a result of adopting Accounting Standards Update (ASU) 2016-02, “Leases” (ASU 2016-02) , the Company accounts for these types of leases in accordance with ASC Topic No. 842, “Leases” (Topic No. 842), which requires that leases be evaluated and classified as operating or finance leases for financial reporting purposes. The lease liability is calculated as the present value of the remaining future lease payments over the lease term, including reasonably assured renewal options. The discount rates used in valuing the Company’s leases are not readily determinable, and are based on the Company’s incremental borrowing rate on a fully collateralized basis. In calculating its incremental borrowing rate, the Company uses a retail industry yield curve, adjusted for the Company’s credit profile. The right-of-use asset for operating leases is based on the lease liability plus initial direct costs and prepaid lease payments, less landlord incentives received. The Company’s operating lease cost, included in the line item “Selling, general and administrative expenses” on its Consolidated Statements of Income (Loss), includes amortization of right-of-use assets, interest on lease liabilities, as well as any variable and short-term lease cost. The Company commences recording operating lease cost when the underlying asset is made available for use. Assets held under finance leases are included in the line item “Property and equipment—net of accumulated depreciation and amortization” in the Company’s Consolidated Balance Sheets. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic No. 718, “Stock Compensation” (Topic No. 718), which requires companies to record stock compensation expense for all non-vested and new awards beginning as of the grant date and through the end of the vesting period. Refer to Note 11, “Stock-Based Compensation,” for further details. Net Income (Loss) Per Share Net income (loss) per share is calculated using the treasury stock method. Refer to Note 10, “Net Income (Loss) Per Share,” for further details. Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents and investments. The Company manages the credit risk associated with cash equivalents and investments by investing with high-quality institutions and, by policy, limiting investments only to those which meet prescribed investment guidelines. The Company maintains cash accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses from maintaining cash accounts in excess of such limits. Management believes that it is not exposed to any significant risks on its cash and cash equivalent accounts. Segment Information The Company reports segment information in accordance with ASC Topic No. 280 “Segment Reporting.” The Company has one reportable segment. The Company is an off-price retailer that offers customers a complete line of value-priced apparel, including: women’s ready-to-wear apparel, accessories, footwear, menswear, youth apparel, baby, home, coats, beauty, toys and gifts. Sales percentage by major product category is as follows: Category Fiscal 2021 Fiscal 2020 Fiscal 2019 Ladies apparel 23 % 20 % 21 % Accessories and shoes 23 % 24 % 26 % Home 20 % 21 % 17 % Mens apparel 16 % 16 % 17 % Kids apparel and baby 14 % 15 % 15 % Outerwear 4 % 4 % 4 % Certain classifications have been updated in the above table compared to prior years in order to conform to the manner in which the Company manages its operations. These updates include a shift in certain cold weather categories from apparel to accessories and 59 shoes, as well as in certain gifts, electronics, automotive and other miscellaneous categories from men's to home. Prior year amounts have been reclassified to conform to the current period presentation. 2. Recent Accounting Pronouncements Convertible Debt On August 5, 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (ASU 2020-06), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments. The new guidance removes from GAAP the separation models for convertible debt with a cash conversion feature. The Company elected to early adopt this ASU as of the beginning of Fiscal 2021, using the modified retrospective method of transition. Prior periods have not been restated. In April 2020, the Company issued $ 805.0 million of 2.25 % Convertible Senior Notes due 2025 (Convertible Notes). As a result of adopting the guidance, the Company is no longer separating the Convertible Notes into debt and equity components, and is instead accounting for it wholly as debt. As of the beginning of Fiscal 2021, this ASU resulted in a reduction in the line item “Additional paid-in capital” of $ 176.0 million, net of deferred financing costs, and an increase in the line item “Long term debt” of $ 153.0 million, which eliminated the debt discount and reallocated deferred financing costs that were previously allocated to the equity component. The changes noted above caused a decrease in the effective interest rate on the Convertible Notes from 8.2 % to 2.8 %, resulting in a cumulative-effect adjustment to retained earnings of $ 23.0 million related to Fiscal 2020 interest expense, as well as a $ 31.3 million reduction in interest expense for Fiscal 2021. As of the beginning of Fiscal 2021, the tax effect of adopting this guidance resulted in a $ 44.1 million increase in the line item “Additional paid-in-capital,” a $ 38.3 million reduction in the line item “Deferred tax liabilities” and a $ 5.9 million reduction to retained earnings. The new guidance also requires use of the if-converted method when calculating the dilutive impact of the Convertible Notes on earnings per share. The Company used the treasury stock method prior to adoption of the ASU. This ASU resulted in an increase in net income as a result of the reduction of interest expense, as well as an increase in diluted shares caused by the application of the if-converted method, resulting in an increase to diluted net income per share of $ 0.29 during Fiscal 2021. There were no other new a ccounting standards that had a material impact on the Company’s Consolidated Financial Statements and notes thereto during Fiscal 2021, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of January 29, 2022 that the Company expects to have a material impact on its financial position or results of operations upon becoming effective. Income Taxes On December 18, 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes." The purpose of this ASU is to reduce cost and complexity associated with the accounting for income taxes by removing specific exceptions to the general principles in Topic 740, Income Taxes, and by clarifying and amending certain aspects of income-tax-related guidance. The ASU also improves financial statement preparers’ application of income tax-related guidance and simplifies GAAP for franchise taxes that are partially based on income and enacted changes in tax laws in interim periods. This ASU became effective as of the beginning of Fiscal 2021. Adoption of this ASU did not have a significant impact on the Company’s Consolidated Financial Statements. 3. Restricted Cash and Cash Equivalents At both January 29, 2022 and January 30, 2021, restricted cash and cash equivalents consisted of $ 6.6 million related to collateral for certain insurance contracts. The Company has the ability to convert the restricted cash to a letter of credit at any time, which would reduce available borrowings on the ABL Line of Credit by a like amount. 60 4. Property and Equipment Property and equipment consist of: (in thousands) Useful Lives January 29, 2022 January 30, 2021 Land N/A $ 148,144 $ 148,973 Buildings 20 to 40 Years 490,698 492,289 Store fixtures and equipment 3 to 15 Years 1,300,997 1,074,584 Software 3 to 10 Years 307,077 278,786 Leasehold improvements Shorter of lease term or useful life 828,095 772,825 Construction in progress N/A 128,673 170,061 Total property and equipment at cost 3,203,684 2,937,518 Less: accumulated depreciation and amortization ( 1,651,447 ) ( 1,498,655 ) Total property and equipment, net of accumulated depreciation and amortization $ 1,552,237 $ 1,438,863 As of January 29, 2022 and January 30, 2021 , assets, net of accumulated amortization of $ 13.3 million and $ 8.7 million, respectively, held under finance leases amounted to approximately $ 34.2 million and $ 38.9 million, respectively, and are included in the line item “Buildings” in the foregoing table. Amortization expense related to finance leases is included in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income (Loss). The total amount of depreciation expense during Fiscal 2021, Fiscal 2020 and Fiscal 2019 was $ 218.1 million, $ 189.5 million and $ 178.2 million, respectively. Internally developed software is amortized on a straight line basis over three to ten years and is recorded in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income (Loss). Amortization of internally developed software amounted to $ 18.9 million, $ 16.9 million and $ 17.9 million during Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. Landlord-owned assets represent leasehold improvements at certain stores for which the Company has paid and derives a benefit, but the landlord has retained title. These assets are amortized over the lease term inclusive of reasonably assured renewal options. Amortization of landlord-owned assets was $ 12.2 million, $ 14.0 million and $ 14.6 million, during Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively, and was included in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income (Loss). During Fiscal 2021, Fiscal 2020 and Fiscal 2019, the Company recorded impairment charges related to property and equipment of $ 7.5 million, $ 4.6 million and $ 3.4 million, respectively. These charges are recorded in the line item “Impairment charges—long-lived assets” in the Company’s Consolidated Statements of Income (Loss). Refer to Note 6, “Impairment Charges,” for further discussion. 5. Intangible Assets Intangible assets at January 29, 2022 and January 30, 2021 consist primarily of tradenames. (in thousands) January 29, 2022 January 30, 2021 Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount Tradenames $ 238,000 $ — $ 238,000 $ 238,000 $ — $ 238,000 61 6. Impairment Charges Impairment charges recorded during Fiscal 2021, Fiscal 2020 and Fiscal 2019 amounted to $ 7.7 million, $ 6.0 million and $ 4.3 million, respectively. Impairment charges are primarily related to declines in revenues and operating results of the respective stores. Impairment charges during these periods related to the following: (in thousands) Fiscal Years Ended Asset Categories January 29, 2022 January 30, 2021 February 1, 2020 Store fixtures and equipment 3,163 $ 2,811 $ 809 Leasehold improvements 3,330 1,665 52 Operating lease assets 202 1,373 921 Buildings 970 43 921 Land — — 1,604 Other assets 83 120 8 Total $ 7,748 $ 6,012 $ 4,315 The Company recorded impairment charges related to store-level assets for nine stores during Fiscal 2021 , 14 stores during Fiscal 2020 , and two stores, as well as the online store, during Fiscal 2019. Long-lived assets are measured at fair value on a non-recurring basis for purposes of calculating impairment using the fair value hierarchy of ASC Topic No. 820 “Fair Value Measurements” (Topic No. 820). Refer to Note 15, “Fair Value of Financial Instruments,” for further discussion of the Company’s fair value hierarchy. The fair value of the Company’s long-lived assets is calculated us ing a discounted cash-flow model that used level 3 inputs. In calculating future cash flows, the Company makes estimates regarding future operating results and market rent rates, based on its experience and knowledge of market factors in which the retail location is located. During Fiscal 2021 and Fiscal 2020, the assets impaired had a remaining carrying value after impairments of $ 63.4 million and $ 30.5 million, respectively, primarily related to the right-of-use assets. 7. Long Term Debt Long term debt consists of: (in thousands) January 29, January 30, 2022 2021 Senior secured term loan facility (Term B-6 Loans), LIBOR (with a floor of 0.00 %) plus 2.00 %, matures on June 24, 2028 $ 950,676 $ — Senior secured term loan facility (Term B-5 Loans), LIBOR (with a floor of 0.00 %) plus 1.75 %, repaid in full on June 24, 2021 — 958,418 $ 805,000 convertible senior notes, 2.25 %, matures on April 15, 2025 572,322 648,311 $ 300,000 senior secured notes, 6.25 %, redeemed in full on June 11, 2021 — 300,000 $ 650,000 ABL senior secured revolving facility, LIBOR plus spread based on average outstanding balance, matures on December 22, 2026 — — Finance lease obl igations 43,945 47,664 Unamortized deferred financing costs ( 11,484 ) ( 22,724 ) Total debt 1,555,459 1,931,669 Less: current maturities ( 14,357 ) ( 3,899 ) Long term debt, net of current maturities $ 1,541,102 $ 1,927,770 Term Loan Facility On February 24, 2011, the Company entered into a senior secured term loan facility (the Term Loan Facility). The Term Loan Facility was issued pursuant to a credit agreement (Term Loan Credit Agreement), dated February 24, 2011, among Burlington Coat Factory Warehouse Corporation, an indirect subsidiary of the Company (BCFWC), the guarantors signatory thereto, and JPMorgan 62 Chase Bank, N.A., as administrative agent and as collateral agent, the lenders party thereto, J.P. Morgan Securities LLC and Goldman Sachs Lending Partners LLC, as joint bookrunners, and J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as joint arrangers, governing the terms of the Term Loan Facility. On February 26, 2020, the Company entered into Amendment No. 8 (the Eighth Amendment) to the Term Loan Credit Agreement governing its Term Loan Facility. The Eighth Amendment, among other things, reduced the interest rate margins applicable to the Term Loan Facility from 1.00 % to 0.75 %, in the case of prime rate loans, and from 2.00 % to 1.75 %, in the case of LIBOR loans, with the LIBOR floor remaining at 0.00 %. In connection with the execution of the Eighth Amendment, the Company incurred fees of $ 1.1 million, primarily related to legal and placement fees, which were recorded in the line item “Costs related to debt issuances and amendments” in the Company’s Consolidated Statement of Income (Loss). Additionally, the Company recognized a non-cash loss on the extinguishment of debt of $ 0.2 million, representing the write-off of unamortized deferred financing costs and original issue discount, which was recorded in the line item “Loss on extinguishment of debt” in the Company’s Consolidated Statement of Income (Loss). On June 24, 2021, BCFWC entered into Amendment No. 9 (the Ninth Amendment) to the Term Loan Credit Agreement governing the Term Loan Facility. The Ninth Amendment, among other things, extended the maturity date from November 17, 2024 to June 24, 2028 , and changed the interest rate margins applicable to the Term Loan Facility from 0.75 % to 1.00 %, in the case of prime rate loans, and from 1.75 % to 2.00 %, in the case of LIBOR loans, with a 0.00 % LIBOR floor. This amendment also requires quarterly principal payments of $ 2.4 million. In connection with the execution of the Ninth Amendment, the Company incurred fees of $ 3.3 million, primarily related to legal and placement fees, which were recorded in the line item “Costs related to debt issuances and amendments” in the Company’s Consolidated Statement of Income (Loss). Additionally, the Company recognized a loss on the extinguishment of debt of $ 1.2 million, representing the write-off of unamortized deferred financing costs and original issue discount, which was recorded in the line item “Loss on extinguishment of debt” in the Company’s Consolidated Statement of Income (Loss). The Term Loan Facility is collateralized by a first lien on the Company's favorable leases, real estate and property & equipment and a second lien on the Company's inventory and receivables. Interest rates for the Term Loan Facility are based on: (i) for LIBOR rate loans for any interest period, at a rate per annum equal to the greater of (x) the LIBOR rate, as determined by the Term Loan Facility Administrative Agent, for such interest period multiplied by the Statutory Reserve Rate (as defined in the Term Loan Credit Agreement), and (y) 0.00 % (the Term Loan Adjusted LIBOR Rate), plus an applicable margin; and (ii) for prime rate loans, a rate per annum equal to the highest of (a) the variable annual rate of interest then announced by JPMorgan Chase Bank, N.A. at its head office as its “prime rate,” (b) the federal reserve bank of New York rate in effect on such date plus 0.50 % per annum, and (c) the Term Loan Adjusted LIBOR Rate for the applicable class of term loans for one-month plus 1.00 %, plus, in each case, an applicable margin. As of January 29, 2022 , the Company’s borrowing rate related to the Term Loan Facility was 2.1 %. Convertible Notes On April 16, 2020, the Company issued $ 805.0 million of Convertible Notes. The Convertible Notes are general unsecured obligations of the Company. The Convertible Notes bear interest at a rate of 2.25 % per year, payable semi-annually in cash, in arrears, on April 15 and October 15 of each year, beginning on October 15, 2020 . The Convertible Notes will mature on April 15, 2025 , unless earlier converted, redeemed or repurchased. During the third quarter of Fiscal 2021, the Company entered into separate, privately negotiated exchange agreements with certain holders of the Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 160.4 million in aggregate principal amount of Convertible Notes held by them for a combination of an aggregate of $ 90.8 million in cash and 513,991 shares of the Company's common stock. During the fourth quarter of Fiscal 2021, the Company entered into separate, privately negotiated exchange agreements with certain holders of the Convertible Notes. Under the terms of these exchange agreements, the holders exchanged $ 72.3 million in aggregate principal amount of Convertible Notes held by them for $ 109.0 million in cash. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 124.6 million in Fiscal 2021. Subsequent to January 29, 2022 (March 15, 2022), the Company entered into separate, privately negotiated exchange agreements with certain holders of the Convertible Notes. Under the terms of the exchange agreements, the holders have agreed to exchange $ 55.6 million in aggregate principal amount of Convertible Notes held by them for an amount in cash to be calculated based on the volume-weighted average price of the Company’s common stock over a two-day measurement period beginning on March 16, 2022. These exchange transactions are expected to close on March 21, 2022, subject to the satisfaction of customary closing conditions. Prior to the close of business on the business day immediately preceding January 15, 2025, the Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the 63 Convertible Notes will be convertible at the option of the holders at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The Convertible Notes have an initial conversion rate of 4.5418 shares per $ 1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $ 220.18 per share of the Company’s common stock), subject to adjustment if certain events occur. The initial conversion price represents a conversion premium of approximately 32.50 % over $ 166.17 per share, the last reported sale price of the Company’s common stock on April 13, 2020 (the pricing date of the offering) on the New York Stock Exchange. During the first quarter of Fiscal 2021, the Company made an irrevocable settlement election for any conversions of the Convertible Notes. Upon conversion, the Company will pay cash for the principal amount. For any excess above principal, the Company will deliver shares of its common stock. The Company may not redeem the Convertible Notes prior to April 15, 2023. On or after April 15, 2023, the Company will be able to redeem for cash all or any portion of the Convertible Notes, at its option, if the last reported sale price of the Company’s common stock is equal to or greater than 130 % of the conversion price for a specified period of time, at a redemption price equal to 100 % of the principal aggregate amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders of the Convertible Notes may require the Company to repurchase their Convertible Notes upon the occurrence of certain events that constitute a fundamental change under the indenture governing the Convertible Notes at a purchase price equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the date of repurchase. In connection with certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their Convertible Notes in connection with such corporate event or during the relevant redemption period for such Convertible Notes. The Convertible Notes contain a cash conversion feature, and as a result, the Company initially separated it into liability and equity components. The Company valued the liability component based on its borrowing rate for a similar debt instrument that does not contain a conversion feature. The equity component, which was recognized as a debt discount, was valued as the difference between the face value of the Convertible Notes and the fair value of the liability component. As a result of adopting ASU 2020-06, the Company is no longer separating the Convertible Notes into debt and equity components, and is instead accounting for it wholly as debt. In connection with the Convertible Notes issuance, the Company incurred deferred financing costs of $ 21.0 million, primarily related to fees paid to the bookrunners of the offering, as well as legal, accounting and rating agency fees. These costs were initially allocated on a pro rata basis, with $ 16.4 million allocated to the debt component and $ 4.6 million allocated to the equity component. As a result of adopting ASU 2020-06, all unamortized deferred financing costs related to the Convertible Notes are now allocated to debt. Prior to adoption of ASU 2020-06, the debt discount and the debt portion of the deferred costs were being amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 8.2 %. The effective interest rate after adoption of ASU 2020-06 is 2.8 %. The Convertible Notes consist of the following components as of the dates indicated: (in thousands) January 29, January 30, 2022 2021 Liability component: Principal $ 572,322 $ 805,000 Unamortized debt discount — ( 156,689 ) Unamortized deferred debt costs ( 9,761 ) ( 14,191 ) Net carrying amount $ 562,561 $ 634,120 Equity component, net $ — $ 131,916 64 Interest expense related to the Convertible Notes consists of the following as of the periods indicated: (in thousands) Fiscal Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Coupon interest $ 16,313 $ 14,375 $ — Amortization of debt discount — 23,988 — Amortization of deferred debt costs 3,742 2,173 — Convertible Notes interest expense $ 20,055 $ 40,536 $ — Secured Notes On April 16, 2020, BCFWC issued $ 300.0 million of 6.25 % Senior Secured Notes due 2025 (Secured Notes). The Secured Notes were senior, secured obligations of BCFWC, and interest was payable semiannually in cash, in arrears, at a rate of 6.25 % per annum on April 15 and October 15 of each year, beginning on October 15, 2020 . The Secured Notes were guaranteed on a senior secured basis by Burlington Coat Factory Holdings, LLC, Burlington Coat Factory Investments Holdings, Inc. and BCFWC’s subsidiaries that guarantee the loans under the Term Loan Facility. In connection with the Secured Notes issuance, the Company incurred deferred financing costs of $ 7.9 million, primarily related to fees paid to the bookrunners of the offering, as well as legal fees. These costs are being amortized to interest expense over the term of the Secured Notes. The Company incurred additional costs of $ 2.5 million, primarily related to legal fees, which are recorded in the line item, “Costs related to debt issuances and amendments” in the Company’s Consolidated Statement of Income (Loss). On June 11, 2021, BCFWC redeemed the full $ 300.0 million aggregate principal amount of the Secured Notes. The redemption price of the Secured Notes was $ 323.7 million, plus accrued and unpaid interest to, but not including, the date of redemption. This redemption resulted in a pre-tax debt extinguishment charge of $ 30.2 million in the three month period ended July 31, 2021. ABL Line of Credit The aggregate amount of commitments under the Second Amended and Restated Credit Agreement (as amended, supplemented and otherwise modified, the Amended ABL Credit Agreement) is $ 650.0 million (subject to a borrowing base limitation) and, subject to the satisfaction of certain conditions, the Company can increase the aggregate amount of commitments up to $ 950.0 million. The interest rate margin applicable under the Amended ABL Credit Agreement in the case of loans drawn at LIBOR is 1.125 % - 1.375 % (based on total commitments or borrowing base availability), and the fee on the average daily balance of unused loan commitments is 0.20%. The ABL Line of Credit is collateralized by a first priority lien on the Company’s and each guarantor's inventory, receivables, bank accounts, and certain related assets and proceeds thereof (subject to certain exceptions), and a second priority lien on the Company's and each guarantor's other assets and proceeds thereof, including certain owned real estate (subject to certain exceptions). The Company believes that the Amended ABL Credit Agreement provides the liquidity and flexibility to meet its operating and capital requirements over the remaining term of the ABL Line of Credit. Further, the calculation of the borrowing base under the Amended ABL Credit Agreement allows for increased availability with respect to inventory during the period from August 1st through November 30th of each year. On March 17, 2020, the Company borrowed $ 400.0 million under the ABL Line of Credit as a precautionary measure in order to increase the Company’s cash position and facilitate financial flexibility in light of the uncertainty resulting from COVID-19. The Company repaid $ 150.0 million of this amount during the second quarter of Fiscal 2020, and the remaining $ 250.0 million during the fourth quarter of Fiscal 2020. On December 22, 2021, the Company finalized an extension of its current ABL line of credit. This extension increased the aggregate principal amount of the commitments from $ 600 million to $ 650 million, extended the maturity date to December 22, 2026 , and reduced the interest rate margins applicable to the Company’s ABL facility. At January 29, 2022 , the Company had $ 594.6 million available under the ABL Line of Credit. The Company did not have any borrowings during Fiscal 2021. At January 30, 2021 , the Company had $ 476.8 million available under the ABL Line of Credit. The maximum borrowings under the facility during Fiscal 2020 amounted to $ 400.0 million. Average borrowings during Fiscal 2020 amounted to $ 256.6 million at an average interest rate of 1.9 %. 65 Deferred Financing Costs The Company had $ 2.8 million and $ 1.8 million in deferred financing costs associated with its ABL Line of Credit, which are recorded in the line item “Other assets” in the Company’s Consolidated Balance Sheets as of January 29, 2022 and January 30, 2021 , respectively. In addition, the Company had $ 11.5 million and $ 22.7 million of deferred financing costs associated with its Term Loan Facility, Convertible Notes and Secured Notes, recorded in the line item “Long term debt” in the Company’s Consolidated Balance Sheets as of January 29, 2022 and January 30, 2021, respectively. Amortization of deferred financing costs amounted to $ 5.3 million, $ 4.5 million and $ 1.2 million during Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively, which was included in the line item “Interest expense” in the Company’s Consolidated Statements of Income (Loss). Amortization expense related to the deferred financing costs as of January 29, 2022 for each of the next five fiscal years and thereafter is estimated to be as follows: Fiscal Years (in thousands) 2022 $ 3,784 2023 3,938 2024 3,935 2025 1,458 2026 763 Thereafter 367 Total $ 14,245 Deferred financing costs have a weighted average amortization period of approximately 3.9 years. Scheduled Maturities Scheduled maturities of the Company’s long term debt obligations, as they exist as of January 29, 2022, in each of the next five fiscal years and thereafter are as follows: (in thousands) Total Debt Fiscal Years: 2022 $ 9,614 2023 9,614 2024 9,614 2025 581,936 2026 9,614 Thereafter 908,537 Total 1,528,929 Less: unamortized discount ( 5,931 ) Less: unamortized deferred financing costs ( 11,484 ) Finance lease liabilities 43,945 Total debt $ 1,555,459 8. Derivative Instruments and Hedging Activities The Company accounts for derivatives and hedging activities in accordance with ASC Topic No. 815 “Derivatives and Hedging” (Topic No. 815). Topic No. 815 provides the disclosure requirements for derivatives and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (i) how and why an entity uses derivative instruments, (ii) how the entity accounts for derivative instruments and related hedged items, and (iii) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Further, qualitative disclosures are required that explain the Company’s objectives and strategies for using derivatives, as well as quantitative disclosures about the fair value of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments. As required by Topic No. 815, the Company records all derivatives on the balance sheet at fair value and adjusts them to market on a quarterly basis. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging 66 relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. The Company has used interest rate cap contracts and interest rate swap contracts to add stability to interest expense and to manage its exposure to interest rate movements. The fair value of these contracts are determined using the market standard methodology of discounted future variable cash flows. The variable cash flows of the interest rate cap contracts are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps in conjunction with the cash payments related to financing the premium of the interest rate caps. The variable cash flows of the interest rate swap contract are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise or fall compared to current levels in conjunction with the fixed cash payments. The variable interest rates used in the calculation of projected receipts on the cap and swap contracts are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. In addition, to comply with the provisions of Topic No. 820, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered any applicable credit enhancements such as collateral postings, thresholds, mutual puts, and guarantees. In accordance with Topic No. 820, the Company made an accounting policy election to measure the credit risk of its derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. There is no impact of netting because the Company’s only derivatives are interest rate cap contracts and interest rate swap contracts that are with separate counterparties and are under separate master netting agreements. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. However, as of January 29, 2022 and January 30, 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation of its derivative portfolios. As a result, the Company classifies its derivative valuations in Level 2 of the fair value hierarchy. The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company uses derivative financial instruments to manage differences in the amount, timing, and duration of the Company’s known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk On April 24, 2015, the Company entered into two interest rate cap contracts, which expired in May of 2019. On December 17, 2018, the Company entered into an interest rate swap contract, which hedged $ 450 million of the variable rate exposure under the Term Loan Facility at a rate of 2.72 %. On June 24, 2021, the Company terminated this previous interest rate swap, and entered into a new interest rate swap, which hedges $ 450 million of the variable rate exposure on the Term Loan Facility at a blended rate of 2.19 %,. All of these derivative contracts were designated as cash flow hedges. The amount of loss deferred for the previous interest rate swap was $ 26.9 million. The Company is amortizing this amount from accumulated other comprehensive loss into interest expense over the original life of the previous interest rate swap, which had an original maturity date of December 29, 2023 . The new interest rate swap had a liability fair value at inception of $ 26.9 million. The Company will accrete this amount into accumulated other comprehensive loss as a benefit to interest expense over the life of the new interest rate swap, which has a maturity date of June 24, 2028 . During Fiscal 2021, the Company’s derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in the line item “Accumulated other comprehensive loss” on the Company’s Consolidated Balance Sheets and are subsequently 67 reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive loss related to the Company’s derivative contracts will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of January 29, 2022 , the Company estimates that $ 6.7 million will be reclassified into interest expense during the next twelve months. As of January 29, 2022, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk: Interest Rate Derivative Number of Instruments Notional Aggregate Principal Amount Interest Swap Rate Maturity Date Interest rate swap contract One $ 450.0 million 2.19 % June 24, 2028 Tabular Disclosure The tables below present the fair value of the Company’s derivative financial instruments on a gross basis, as well as their classification on the Company’s Consolidated Balance Sheets: (in thousands) Fair Values of Derivative Instruments January 29, 2022 January 30, 2021 Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest rate swap contracts Other liabilities $ 10,968 Other liabilities $ 31,665 The following table presents the unrealized losses deferred to accumulated other comprehensive loss resulting from the Company’s derivative instruments designated as cash flow hedging instruments for each of the reporting periods. (in thousands) Fiscal Year Ended Interest Rate Derivatives: January 29, 2022 January 30, 2021 February 1, 2020 Unrealized gains (losses), before taxes $ 10,914 $ ( 15,606 ) $ ( 22,959 ) Income tax (expense) benefit ( 2,983 ) 4,148 6,353 Unrealized gains (losses), net of taxes $ 7,931 $ ( 11,458 ) $ ( 16,606 ) The following table presents information about the reclassification of losses from accumulated other comprehensive loss into earnings related to the Company’s derivative instruments designated as cash flow hedging instruments for each of the reporting periods. (in thousands) Fiscal Year Ended Component of Earnings: January 29, 2022 January 30, 2021 February 1, 2020 Interest expense $ 14,608 $ 10,198 $ 1,733 Income tax benefit ( 3,965 ) ( 2,795 ) ( 474 ) Net reclassification into earnings $ 10,643 $ 7,403 $ 1,259 9 . Capital Stock Common Stock As of January 29, 2022 , the total amount of the Company’s authorized capital stock consisted of 500,000,000 shares of common stock, par value $ 0.0001 per share, and 50,000,000 shares of undesignated preferred stock, par value of $ 0.0001 per share. The Company’s common stock is not entitled to preemptive or other similar subscription rights to purchase any of the Company’s securities. The Company’s common stock is neither convertible nor redeemable. Unless the Company’s Board of Directors determines otherwise, the Company will issue all of the Company’s capital stock in uncertificated form. 68 Preferred Stock The Company does not have any shares of preferred stock issued or outstanding. The Company’s Board of Directors has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the General Corporation Law of the State of Delaware. The issuance of the Company’s preferred stock could have the effect of decreasing the trading price of the Company’s common stock, restricting dividends on the Company’s capital stock, diluting the voting power of the Company’s common stock, impairing the liquidation rights of the Company’s capital stock, or delaying or preventing a change in control of the Company. Dividend Rights Each holder of shares of the Company’s capital stock will be entitled to receive such dividends and other distributions in cash, stock or property as may be declared by the Company’s Board of Directors from time to time out of the Company’s assets or funds legally available for dividends or other distributions. These rights are subject to the preferential rights of any other class or series of the Company’s preferred stock. Treasury Stock The Company accounts for treasury stock under the cost method. During Fiscal 2021, the Company acquired 53,783 shares of common stock from employees for approximately $ 16.6 million to satisfy their minimum statutory tax withholdings related to the vesting of restricted stock awards, which was recorded in the line item “Treasury stock” on the Company’s Consolidated Balance Sheets, and the line item “Purchase of treasury shares” on the Company’s Consolidated Statements of Cash Flows. Share Repurchase Program On August 14, 2019, the Company’s Board of Directors authorized the repurchase of up to $ 400.0 million of common stock, which expired in August 2021 . On August 18, 2021, the Company’s Board of Directors authorized the repurchase of up to $ 400.0 million of common stock, which is authorized to be executed through August 2023 . During Fiscal 2021, the Company repurchased 856,855 shares of common stock for $ 250.0 million under its share repurchase program. As of January 29, 2022, the Company had $ 150.0 million remaining under its share repurchase authorization. Subsequent to January 29, 2022 (February 16, 2022), the Company's Board of Directors authorized the repurchase of up to $ 500.0 million of common stock, which is authorized to be executed through February 2024 . This repurchase program is funded using the Company’s available cash and borrowings under the ABL Line of Credit. 10. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding. Dilutive net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of 69 common shares and potentially dilutive securities outstanding during the period using the treasury stock method for the Company’s stock option, restricted stock and restricted stock unit awards, and the if-converted method for the Convertible Notes. (in thousands, except per share data) Fiscal Year Ended January 29, January 30, February 1, 2022 2021 2020 Basic net income (loss) per share Net income (loss) $ 408,839 $ ( 216,499 ) $ 465,116 Weighted average number of common shares – basic 66,588 65,962 65,943 Net income (loss) per common share – basic $ 6.14 $ ( 3.28 ) $ 7.05 Diluted net income (loss) per share Net income (loss) $ 408,839 $ ( 216,499 ) $ 465,116 Shares for basic and diluted net income (loss) per share: Weighted average number of common shares – basic 66,588 65,962 65,943 Assumed exercise of stock options and vesting of restricted stock 685 — 1,350 Assumed conversion of convertible debt 853 — — Weighted average number of common shares – diluted 68,126 65,962 67,293 Net income (loss) per common share – diluted $ 6.00 $ ( 3.28 ) $ 6.91 All of the Company’s stock option, restricted stock and restricted stock unit awards have an anti-dilutive effect while in a net loss position. Approximately 177,000 shares, 1,960,000 shares and 405,000 shares were excluded from diluted net income (loss) per share for Fiscal 2021, Fiscal 2020 and Fiscal 2019 , respectively, since their effect was anti-dilutive. 11. Stock-Based Compensation On May 1, 2013, the Company’s Board of Directors approved the Company’s assumption and adoption of the 2006 Management Incentive Plan (the 2006 Plan) that was previously sponsored by Burlington Coat Factory Holdings, LLC. The 2006 Plan terminated on April 12, 2016 . The Company’s 2013 Omnibus Incentive Plan (the 2013 Plan and, together with the 2006 Plan, the Plans), originally adopted effective prior to and in connection with the Company’s initial public offering, was amended and restated effective May 17, 2017. The 2006 Plan, prior to its termination, and the 2013 Plan provide for the granting of stock options, restricted stock and other forms of awards to key employees and directors of the Company or its affiliates. The Company accounts for awards issued under the Plans in accordance with Topic No. 718. As of January 29, 2022 , there were 1,906,220 shares of common stock available for issuance under the 2013 Plan. Non-cash stock compensation expense is as follows: (in thousands) Fiscal Year Ended January 29, January 30, February 1, Type of Non-Cash Stock Compensation 2022 2021 2020 Restricted stock and restricted stock unit grants (a) $ 30,525 $ 25,258 $ 20,454 Stock option grants (a) 18,909 20,038 19,222 Performance stock unit grants (a) 9,112 10,549 4,252 Total (b) $ 58,546 $ 55,845 $ 43,928 (a) Included in the line item “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Income (Loss). (b) The amounts presented in the table above exclude the effect of income taxes. The tax benefit related to the Company’s non-cash stock compensation was $ 10.3 million, $ 9.1 million and $ 9.0 million during Fiscal 2021, Fiscal 2020 and Fiscal 2019 , respectively. 70 Stock Options Options granted during Fiscal 2021, Fiscal 2020 and Fiscal 2019, were all service-based awards granted under the Plans at the following exercise prices: Exercise Price Ranges From To Fiscal 2021 $ 219.08 $ 342.03 Fiscal 2020 $ 179.46 $ 246.97 Fiscal 2019 $ 145.08 $ 231.86 All awards granted during Fiscal 2021, Fiscal 2020 and Fiscal 2019 vest in either one-fourth annual increments or one-third annual increments (subject to continued employment through the applicable vesting date). The final exercise date for any option granted is the tenth anniversary of the grant date. Options granted during Fiscal 2021, Fiscal 2020 and Fiscal 2019 become exercisable if the grantee’s employment is terminated without cause or, in some instances, the recipient resigns with good reason, within a certain period of time following a change in control. Unless determined otherwise by the plan administrator, upon cessation of employment other than for cause, the majority of options that have not vested will terminate immediately, and unexercised vested options will be exercisable for a period of 60 to 180 days . As of January 29, 2022, the Company had 1,097,558 options outstanding to purchase shares of common stock, and there was $ 33.3 million of unearned non-cash stock-based option compensation that the Company expects to recognize as expense over a weighted average period of 2.5 years. The awards are expensed on a straight-line basis over the requisite service period. Stock option transactions during Fiscal 2021 are summarized as follows: Number of Shares Weighted Average Exercise Price Per Share Options outstanding, January 30, 2021 1,346,775 $ 133.86 Options granted 212,397 315.21 Options exercised (a) ( 418,173 ) 95.38 Options forfeited ( 43,441 ) 195.49 Options outstanding, January 29, 2022 1,097,558 $ 181.17 (a) Options exercised during Fiscal 2021 had a total intrinsic value of $ 87.4 million. The following table summarizes information about the stock options vested and expected to vest during the contractual term, as well as options exercisable: Options Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Aggregate Intrinsic Value (in millions) Options vested and expected to vest 1,097,558 6.7 $ 181.17 $ 71.1 Options exercisable 504,737 5.1 $ 139.20 $ 46.0 71 During Fiscal 2021, the fair value of each stock option granted was estimated on the date of grant using the Black Scholes option pricing model. The fair value of each stock option granted during Fiscal 2021 was estimated using the following assumptions: Fiscal Year Ended January 29, 2022 Risk-free interest rate 0.45 % - 1.13 % Expected volatility 34 % - 35 % Expected life (years) 6.00 - 6.25 Contractual life (years) 10.0 Expected dividend yield 0 % Weighted average grant date fair value of options issued $ 109.91 The expected dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. Since the Company completed its initial public offering in October 2013, it does not have sufficient history as a publicly traded company to evaluate its volatility factor. As such, the expected stock price volatility is based upon the historical volatility of the stock price over the expected life of the options of peer companies that are publicly traded. The risk free interest rate was based on the U.S. Treasury rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the expected term of the awards being valued. For grants issued during Fiscal 2021, Fiscal 2020 and Fiscal 2019, the expected life of the options was calculated using the simplified method, which defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches. This methodology was utilized due to the short length of time the Company's common stock has been publicly traded. Restricted Stock Awards Restricted stock awards granted during Fiscal 2021 were all service-based awards. The fair value of each unit of restricted stock granted during Fiscal 2021 was based upon the closing price of the Company’s common stock on the grant date. Certain awards outstanding as of January 29, 2022 cliff vest at the end of a designated service period, ranging from two years to four years from the grant date. Awards granted to non-employee members of the Company’s Board of Directors vest 100 % on the first anniversary of the grant date. The remaining awards outstanding as of January 29, 2022 have graded vesting provisions that generally vest in one-fourth annual increments or one-third annual increments (subject to continued employment through the applicable vesting date). Following a change of control, all unvested restricted stock awards shall remain unvested, provided, however, that 100 % of such shares shall vest if, following such change of control, the employment of the recipient is terminated without cause or, in some instances, the recipient resigns with good reason, within a certain period of time following a change in control. As of January 29, 2022 , there was approximately $ 59.8 million of unearned non-cash stock-based compensation related to restricted stock awards that the Company expects to recognize as an expense over the next 2.4 years. The awards are expensed on a straight-line basis over the requisite service periods. Prior to May 1, 2019, the Company granted shares of restricted stock. Grants made on and after May 1, 2019 are in the form of restricted stock units. Award grant, vesting and forfeiture transactions during Fiscal 2021 are summarized as follows: Number of Shares Weighted Average Grant Date Fair Value Per Award Non-vested awards outstanding, January 30, 2021 396,555 $ 168.87 Awards granted 147,677 317.54 Awards vested (a) ( 154,501 ) 152.73 Awards forfeited ( 21,573 ) 207.80 Non-vested awards outstanding, January 29, 2022 368,158 233.00 (a) Restricted stock awards vested during Fiscal 2021 had a total intrinsic value of $ 48.1 million. Performance Share Units The Company grants performance share units to its senior executives. Vesting of these performance share units is based on pre-established EBIT margin expansion and sales compound annual growth rate (CAGR) goals (each weighted equally) over a three-year performance period. Based on the Company’s achievement of these goals, each award may range from 50 % (at threshold 72 performance) to no more than 200 % of the target award. In the event that actual performance is below threshold, no award will be made. In addition to the performance conditions, each performance share unit cliff vests at the end of a three-year service period. Following a change of control, all unvested performance share units shall remain unvested, provided, however, that 100 % of such shares shall vest if, following such change of control, the employment of the recipient is terminated without cause or, in some instances, the recipient resigns with good reason, within a certain period of time following a change in control. As of January 29, 2022 , there was approximately $ 16.3 million of unearned non-cash stock-based compensation related to performance share units that the Company expects to recognize as an expense over the next 1.7 years. The awards are expensed on a straight-line basis over the requisite service periods. Performance share unit transactions during Fiscal 2021 are summarized as follows: Number of Shares Weighted Average Grant Date Fair Value Per Award Non-vested units outstanding, January 30, 2021 148,668 $ 176.70 Units granted 55,361 321.04 Awards forfeited ( 17,593 ) 215.49 Non-vested units outstanding, January 29, 2022 186,436 215.90 12. Lease Commitments The Company’s leases primarily consist of stores, distribution facilities and office space under operating and finance leases that will expire principally during the next 30 years . The leases typically include renewal options at five year intervals and escalation clauses. Lease renewals are only included in the lease liability to the extent that they are reasonably assured of being exercised. The Company’s leases typically provide for contingent rentals based on a percentage of gross sales. Contingent rentals are not included in the lease liability, and they are recognized as variable lease cost when incurred. As a result of the COVID-19 pandemic and the associated temporary store closures, the Company worked with its landlords to modify payment terms for certain leases. The FASB has provided relief under ASC 842, “Leases,” related to the COVID-19 pandemic. Under this relief, companies can make a policy election on how to treat lease concessions resulting directly from COVID-19, provided that the modified contracts result in total cash flows that are substantially the same or less than the cash flows in the original contract. The Company has made the policy election to account for lease concessions that result from the COVID-19 pandemic as if they were made as enforceable rights under the original contract. Additionally, the Company has elected to account for these concessions outside of the lease modification framework described under ASC 842. As a result, deferred payments related to these leases of $ 1.5 million are included in the line item “Other current liabilities” on the Company’s Consolidated Balance Sheet. The following is a schedule of the Company’s future lease payments: (in thousands) Fiscal Year Operating Leases Finance Leases 2022 $ 494,529 $ 7,513 2023 484,061 7,589 2024 448,842 7,417 2025 414,697 5,287 2026 377,819 5,324 Thereafter 1,306,520 28,013 Total future minimum lease payments 3,526,468 61,143 Amount representing interest ( 628,255 ) ( 17,198 ) Total lease liabilities 2,898,213 43,945 Less: current portion of lease liabilities ( 358,793 ) ( 4,743 ) Total long term lease liabilities $ 2,539,420 $ 39,202 Weighted average discount rate 5.0 % 6.7 % Weighted average remaining lease term (years) 8.2 11.1 The above schedule excludes approximately $ 567.2 million for 82 stores and one warehouse that the Company has committed to open or relocate but has not yet taken possession of the space. 73 The following is a schedule of net lease costs for the years indicated: (in thousands) Fiscal Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Finance lease cost: Amortization of finance lease asset (a) $ 4,554 $ 5,907 $ 4,027 Interest on lease liabilities (b) 3,111 3,394 2,770 Operating lease cost (c) 468,349 441,089 414,174 Variable lease cost (c) 188,035 180,270 155,210 Total lease cost 664,049 630,660 576,181 Less all rental income (d) ( 5,771 ) ( 5,010 ) ( 5,029 ) Total net rent expense (e) $ 658,278 $ 625,650 $ 571,152 (a) Included in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income (Loss). (b) Included in the line item “Interest expense” in the Company’s Consolidated Statements of Income (Loss). (c) Includes real estate taxes, common area maintenance, insurance and percentage rent. Included in the line item “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Income (Loss). (d) Included in the line item “Other revenue” in the Company’s Consolidated Statements of Income (Loss). (e) Excludes an immaterial amount of short-term lease cost. Supplemental cash flow disclosures related to leases are as follows: (in thousands) Fiscal Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Cash paid for amounts included in the measurement of lease liabilities: Cash payments arising from operating lease liabilities (a) $ 509,971 $ 409,750 $ 401,575 Cash payments for the principal portion of finance lease liabilities (b) $ 4,073 $ 3,269 $ 2,932 Cash payments for the interest portion of finance lease liabilities (a) $ 3,111 $ 3,394 $ 2,770 Supplemental non-cash information: Operating lease liabilities arising from obtaining right-of-use assets $ 516,545 $ 413,068 $ 690,827 (a) Included within operating activities in the Company’s Consolidated Statements of Cash Flows. (b) Included within financing activities in the Company’s Consolidated Statements of Cash Flows. 13. Employee Retirement Plans The Company maintains separate defined contribution 401(k) retirement savings and profit-sharing plans covering employees in the United States and Puerto Rico who meet specified age and service requirements. The discretionary profit sharing component (which the Company has not utilized since 2005 and has no current plans to utilize) is entirely funded by the Company, and the Company also makes additional matching contributions to the 401(k) component of the plans. Participating employees can voluntarily elect to contribute a percentage of their earnings to the 401(k) component of the plans (up to certain prescribed limits) through a cash or deferred (salary deferral) feature qualifying under Section 401(k) of the Internal Revenue Code (401(k) Plan). The Company recorded $ 11.4 million, $ 10.2 million and $ 10.0 million of 401(k) Plan match expense during Fiscal 2021, Fiscal 2020 and Fiscal 2019 respectively, which is included in the line item “Selling, general and administrative expenses” on the Company’s Consolidated Statements of Income (Loss). 14. Income Taxes Income (loss) before income taxes was as follows for Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Domestic $ 533,906 $ ( 441,473 ) $ 573,399 Foreign 11,392 3,850 7,126 Total income (loss) before income taxes $ 545,298 $ ( 437,623 ) $ 580,525 74 Income tax expense (benefit) was as follows for Fiscal 2021, Fiscal 2020 and Fiscal 2019: (in thousands) Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Current: Federal $ 69,146 $ ( 210,304 ) $ 83,521 State 11,546 12,964 20,778 Foreign 3,815 1,175 2,040 Subtotal 84,507 ( 196,165 ) 106,339 Deferred: Federal 32,217 13,600 8,375 State 19,272 ( 38,816 ) 1,012 Foreign 463 257 ( 317 ) Subtotal 51,952 ( 24,959 ) 9,070 Total income tax expense (benefit) $ 136,459 $ ( 221,124 ) $ 115,409 The tax rate reconciliations were as follows for Fiscal 2021, Fiscal 2020 and Fiscal 2019: Fiscal Year Ended January 29, 2022 January 30, 2021 February 1, 2020 Tax at statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 4.0 3.0 4.0 Excess tax benefit from stock compensation ( 4.8 ) 7.2 ( 5.3 ) Tax credits ( 1.6 ) 1.8 ( 1.0 ) Carryback tax rate differential — 19.8 — Non-deductible expenses 2.0 ( 1.8 ) 0.8 Loss from extinguishment of convertible debt 4.4 — — Other — ( 0.5 ) 0.4 Effective tax rate 25.0 % 50.5 % 19.9 % The income tax benefit in the prior year is a result of the pre-tax loss and the carry-back of net operating losses arising in Fiscal 2020 to the five prior tax years, as permitted under the CARES Act. The higher effective tax rate in the prior year is a function of losses facilitating a refund receivable upon amending previously filed returns at a 35% tax rate. Additionally, excess tax benefit from stock compensation drove an increase in the tax rate related to pre-tax loss in Fiscal 2020, compared to a decrease in the tax rate related to pre-tax income in Fiscal 2021. The tax effects of temporary differences are included in deferred tax accounts as follows: (in thousands) January 29, 2022 January 30, 2021 Tax Assets Tax Liabilities Tax Assets Tax Liabilities Non-current deferred tax assets and liabilities: Property and equipment basis adjustments $ — $ 253,097 $ — $ 225,203 Operating lease liability 745,300 — 705,968 — Operating lease asset — 687,128 — 656,193 Intangibles—indefinite-lived — 64,093 — 64,459 Financing 1,378 — — 30,860 Employee benefit compensation 17,703 — 21,015 — State net operating losses (net of federal benefit) 25,450 — 42,991 — Tax credits 8,562 — 13,883 — Other 2,725 — 10,386 — Valuation allowance ( 12,864 ) — ( 12,957 ) — Total non-current deferred tax assets and liabilities $ 788,254 $ 1,004,318 $ 781,286 $ 976,715 Net deferred tax liability $ 216,064 $ 195,429 75 As of January 29, 2022 , the Company has a deferred tax asset related to net operating losses of $ 25.5 million, inclusive of $ 25.2 million of state net operating losses which will expire at various dates between 2022 and 2041 and $ 0.3 million of deferred tax assets recorded for Puerto Rico net operating loss carry-forwards that will expire in 2025 . As of January 29, 2022 , the Company had tax credit carry-forwards of $ 8.6 million, inclusive of state tax credit carry-forwards of $ 7.7 million that will begin to expire in 2023 and $ 0.9 million of Puerto Rico alternative minimum tax (AMT) credits that have an indefinite life . As of January 30, 2021 , the Company had a deferred tax asset related to net operating losses of $ 43.0 million, inclusive of $ 42.7 million of state net operating losses, and $ 0.3 million of deferred tax assets recorded for Puerto Rico net operating loss carry-forwards. As of January 30, 2021 , the Company had tax credit carry-forwards of $ 13.9 million, inclusive of federal tax credit carry-forwards of $ 4.8 million, state tax credit carry-forwards of $ 7.9 million, and $ 1.2 million of Puerto Rico AMT credits. The Company believes that it is more likely than not that the benefit from certain state net operating loss carry forwards and credits will not be realized. In recognition of this risk, the Company has provided a valuation allowance of $ 5.3 million on state net operating losses and $ 7.2 million on state tax credit carry forwards. In addition, the Company believes that it is more likely than not that the benefit from Puerto Rico net operating loss carry-forwards will not be realized. As a result, it has provided for a full valuation allowance of $ 0.3 million. If the Company's assumptions change and it determines it will be able to realize these net operating losses or credits, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets as of January 29, 2022 will be recorded to the Company’s Consolidated Statement of Income (Loss). As of January 30, 2021 , the Company provided a total valuation allowance of $ 13.0 million, inclusive of $ 5.3 of valuation allowance related to state net operating losses, $ 7.4 million related to tax credit carry-forwards and $ 0.3 million related to Puerto Rico. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (exclusive of interest and penalties) is as follows: (in thousands) Gross Unrecognized Tax Benefits, Exclusive of Interest and Penalties Balance at February 2, 2019 $ 8,927 Additions for tax positions of the current year — Additions for tax positions of prior years — Reduction for tax positions of prior years ( 783 ) Settlements — Lapse of statute of limitations ( 67 ) Balance at February 1, 2020 $ 8,077 Additions for tax positions of the current year — Additions for tax positions of prior years — Reduction for tax positions of prior years ( 1,269 ) Settlements ( 396 ) Lapse of statute of limitations ( 72 ) Balance at January 30, 2021 $ 6,340 Additions for tax positions of the current year — Additions for tax positions of prior years — Reduction for tax positions of prior years ( 783 ) Settlements — Lapse of statute of limitations ( 770 ) Balance at January 29, 2022 $ 4,787 As of January 29, 2022 , the Company reported total unrecognized benefits of $ 4.8 million, of which $ 3.8 million would affect the Company’s effective tax rate if recognized. As a result of previous positions taken and current period activity, the Company recorded a net benefit of $ 1.2 million of interest and penalties during Fiscal 2021 in the line item “Income tax expense (benefit)” in the Company’s Consolidated Statements of Income (Loss). Cumulative interest and penalties of $ 9.1 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheet as of January 29, 2022. The Company recognizes interest and penalties related to unrecognized tax benefits as part of income taxes. Within the next twelve months, the Company does not expect any significant changes in its unrecognized tax benefits. 76 As of January 30, 2021 , the Company reported total unrecognized benefits of $ 6.3 million, of which $ 5.0 million would affect the Company’s effective tax rate if recognized. As a result of previous positions taken, the Company recorded a net benefit of $ 1.1 million of interest and penalties during Fiscal 2020 in the line item “Income tax expense (benefit)” in the Company’s Consolidated Statements of Income (Loss). Cumulative interest and penalties of $ 10.6 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheets as of January 30, 2021. The Company files tax returns in the U.S. federal jurisdiction, Puerto Rico, and various state jurisdictions. The Company is open to examination by the IRS under the applicable statutes of limitations for Fiscal Years 2018 through 2021 . The Company or its subsidiaries’ state and Puerto Rico income tax returns are open to audit for Fiscal Years 2017 through 2021 , with a few exceptions, under the applicable statutes of limitations. There are ongoing state audits in several jurisdictions, and the Company has accrued for possible exposures as required under Topic No. 740. The Company does not expect the settlement of these audits to have a material impact to its financial results. 15. Fair Value of Financial Instruments The Company accounts for fair value measurements in accordance with Topic No. 820 which defines fair value, establishes a framework for measurement and expands disclosure about fair value measurements. Topic No. 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price), and classifies the inputs used to measure fair value into the following hierarchy: Level 1: Quoted prices for identical assets or liabilities in active markets. Level 2: Quoted market prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3: Pricing inputs that are unobservable for the assets and liabilities, and include situations where there is little, if any, market activity for the assets and liabilities. The inputs into the determination of fair value require significant management judgment or estimation. The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. Refer to Note 8, “Derivative Instruments and Hedging Activities,” for further discussion regarding the fair value of the Company’s interest rate cap contracts. Financial Assets The fair values of the Company’s financial assets and the hierarchy of the level of inputs as of January 29, 2022 and January 30, 2021 are summarized below: (in thousands) Fair Value Measurements at January 29, January 30, 2022 2021 Level 1 Cash equivalents (including restricted cash) $ 701,638 $ 1,001,475 77 Financial Liabilities The fair values of the Company’s financial liabilities are summarized below: (in thousands) January 29, 2022 January 30, 2021 Principal Amount Fair Value Principal Amount Fair Value Term B-6 Loans $ 956,608 $ 955,412 $ — $ — Term B-5 Loans — — 961,415 955,406 Convertible Notes 572,322 724,703 805,000 1,080,713 Secured Notes — — 300,000 320,625 ABL Line of Credit (a) — — — — Total debt (b) $ 1,528,930 $ 1,680,115 $ 2,066,415 $ 2,356,744 (a) To the extent the Company has any outstanding borrowings under the ABL Line of Credit, the fair value would approximate its reported value, because the interest rate is variable and reflects current market rates, due to short term nature. (b) Excludes finance lease obligations, original-issue discount and deferred financing costs. The fair values presented herein are based on pertinent information available to management as of the respective year end dates. The estimated fair values of the Company’s debt are classified as Level 2 in the fair value hierarchy, and are based on current market quotes received from inactive markets. Although management is not aware of any factors that could significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date, and current estimates of fair value may differ from amounts presented herein. 16. Commitments and Contingencies Legal Like many retailers, the Company has been named in potential class or collective actions on behalf of groups alleging violations of federal and state wage and hour and other labor statutes, and alleged violations of state consumer and/or privacy protection and other statutes. In the normal course of business, the Company is also party to representative claims under the California Private Attorneys’ General Act and various other lawsuits and regulatory proceedings including, among others, commercial, product, product safety, employee, customer, intellectual property and other claims. Actions against us are in various procedural stages. Many of these proceedings raise factual and legal issues and are subject to uncertainties. While no assurance can be given as to the ultimate outcome of these matters, the Company believes that the final resolution of these actions will not have a material adverse effect on the Company’s results of operations, financial position, liquidity or capital resources. Letters of Credit The Company had irrevocable letters of credit in the amounts of $ 55.4 million and $ 54.9 million as of January 29, 2022 and January 30, 2021, respectively. Letters of credit outstanding as of January 29, 2022 and January 30, 2021 amounted to $ 48.4 million and $ 46.8 million, respectively, guaranteeing performance under various lease agreements, insurance contracts, and utility agreements. The Company also had outstanding letters of credit arrangements in the aggregate amount of $ 7.1 million and $ 8.2 million at January 29, 2022 and January 30, 2021 , respectively, related to certain merchandising agreements. The Company had $ 594.6 million and $ 476.8 million available under the ABL Line of Credit as of January 29, 2022 and January 30, 2021, respectively. Inventory Purchase Commitments The Company had $ 1,396.4 million of purchase commitments related to goods that were not received as of January 29, 2022. Death Benefits In November 2005, the Company entered into agreements with three of the Company’s former executives whereby, upon each of their deaths, the Company will pay $ 1.0 million to each respective designated beneficiary. 78 17. Related Party Transactions The brother-in-law of one of the Company’s former Executive Vice Presidents is an independent sales representative of one of the Company’s suppliers of merchandise inventory. This relationship predated the commencement of the former Executive Vice President’s employment with the Company. The Company has determined that the dollar amount of purchases through such supplier represents an insignificant amount of its inventory purchases. The Executive Vice President retired from the Company during the second quarter of Fiscal 2021. 79 Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT Parent Company Information Burlington Stores, Inc. Condensed Balance Sheets As of January 29, 2022 January 30, 2021 (in thousands) ASSETS: Cash and cash equivalents $ 503 $ 51 Total current assets 503 51 Investment in subsidiaries 1,322,475 1,098,823 Total assets $ 1,322,978 $ 1,098,874 LIABILITIES AND STOCKHOLDERS’ EQUITY: Current liabilities $ — $ — Long term debt 562,561 634,120 Commitments and contingencies Total stockholders’ equity 760,417 464,754 Total liabilities and stockholders’ equity $ 1,322,978 $ 1,098,874 See Notes to Condensed Financial Statements 80 CONDENSED FINANCIAL INFORMATION OF REGISTRANT Parent Company Information Burlington Stores, Inc. Condensed Statements of Income (Loss) and Comprehensive Income (Loss) Fiscal Years Ended January 29, 2022 January 30, 2021 February 1, 2020 (in thousands) REVENUES: Total revenue $ — $ — $ — COSTS AND EXPENSES: Income from equity investment — — — Total costs and expenses — — — Income before provision for income tax — — — Provision for income tax — — — Earnings from equity investment, net of income taxes $ 408,839 $ ( 216,499 ) $ 465,116 Net income (loss) $ 408,839 $ ( 216,499 ) $ 465,116 Other comprehensive income (loss), net of tax: Interest rate derivative contracts: Net unrealized gains (losses) arising during the period 7,931 ( 11,458 ) ( 16,606 ) Net reclassification into earnings during the period 10,643 7,403 1,259 Total comprehensive income (loss) $ 427,413 $ ( 220,554 ) (1) $ 449,769 (1) See Notes to Condensed Financial Statements (1) During the current year financial reporting process, management determined that the previously reported Total comprehensive income (loss) of the Parent Company did not include the components of Other comprehensive income (loss) of the Parent Company. As a result, the accompanying Condensed Statements of Income and Comprehensive Income (Loss) for the years ended January 30, 2021 and February 1, 2020 have been revised to correct the presentation of Total comprehensive income (loss) to include the components of Other comprehensive income (loss) of the Parent Company. The correction of this presentation had no impact on previously reported Net income (loss) of the Parent Company and resulted in an increase in previously reported Total comprehensive loss from $ 216.5 million to $ 220.6 million for the year ended January 30, 2021 and a decrease in previously reported Total comprehensive income from $ 465.1 million to $ 449.8 million for the year ended February 1, 2020. 81 CONDENSED FINANCIAL INFORMATION OF REGISTRANT Parent Company Information Burlington Stores, Inc. Condensed Statements of Cash Flows Fiscal Years Ended January 29, 2022 January 30, 2021 February 1, 2020 (in thousands) OPERATING ACTIVITIES: Net cash provided by operations $ — $ — $ — INVESTING ACTIVITIES: Net contribution from (payment to) subsidiaries 428,888 ( 753,404 ) (1) 288,871 (1) Net cash provided by (used in) investing activities 428,888 ( 753,404 ) 288,871 FINANCING ACTIVITIES: Proceeds from long term debt - Convertible Notes — 805,000 — Principal payment on long term debt—Convertible Notes ( 201,695 ) — — Purchase of treasury shares ( 266,628 ) ( 65,526 ) ( 323,080 ) Proceeds from stock option exercises 39,887 34,924 34,222 Deferred financing costs — ( 20,994 ) — Net cash provided by (used in) financing activities ( 428,436 ) 753,404 (1) ( 288,858 ) (1) Increase (Decrease) in cash and cash equivalents 452 — 13 Cash and cash equivalents at beginning of period 51 51 38 Cash and cash equivalents at end of period $ 503 $ 51 $ 51 See Notes to Condensed Financial Statements (1) During the current year financial reporting process, management determined that the Parent Company’s net investment activities in its subsidiary were incorrectly classified as Financing activities rather than Investing activities in the Company’s previously reported Condensed Statements of Cash Flows for the years ended January 30, 2021 and February 1, 2020. As a result, the accompanying Condensed Statements of Cash Flows have been revised to reclassify Intercompany financing transactions previously classified within Financing activities as a net payment to subsidiary of $ 753.4 million and a net contribution from subsidiary of $ 288.9 million to Net contribution from (payment to) subsidiaries within Investing activities for the years ended January 30, 2021 and February 1, 2020, respectively. 82 CONDENSED FINANCIAL INFORMATION OF REGISTRANT Parent Company Information Burlington Stores, Inc. Note 1. Basis of Presentation Burlington Stores, Inc. (the Parent Company) is a holding company that conducts substantially all of its business operations through its subsidiaries. The Parent Company’s ability to pay dividends on Parent Company’s common stock will be limited by restrictions on the ability of Parent Company and its subsidiaries to pay dividends or make distributions under the terms of current and future agreements governing the indebtedness of Parent Company’s subsidiaries. In addition to other baskets under the agreements governing its indebtedness, the Parent Company and its subsidiaries are permitted to make dividends and distributions under the Term Loan Facility so long as there is no event of default and the pro forma consolidated leverage ratio of the Parent Company and its subsidiaries does not exceed 3.50 to 1.00, and under the ABL Line of Credit as long as certain restricted payment conditions are satisfied. The accompanying Condensed Financial Statements include the accounts of the Parent Company and, on an equity basis, its consolidated subsidiaries and affiliates. Accordingly, these Condensed Financial Statements have been presented on a “parent-only” basis. Under a parent-only presentation, the Parent Company’s investments in its consolidated subsidiaries are presented under the equity method of accounting. These parent-only financial statements should be read in conjunction with Burlington Stores, Inc.’s audited Consolidated Financial Statements included elsewhere herein. Note 2. Dividends As discussed above, the terms of current and future agreements governing the indebtedness of the Parent Company and its subsidiaries include, or may include, limitations on the ability of such subsidiaries and the Parent Company to pay dividends, subject to certain exceptions set forth in such agreements. Note 3. Stock-Based Compensation Non-cash stock compensation expense of $ 58.5 million, $ 55.8 million and $ 43.9 million has been pushed down to Parent Company’s subsidiaries for Fiscal 2021, Fiscal 2020 and Fiscal 2019, respectively. Note 4. Long Term Debt On April 16, 2020, the Parent Company issued $ 805.0 million of Convertible Notes. The Convertible Notes are general unsecured obligations of the Parent Company. The Convertible Notes bear interest at a rate of 2.25 % per year, payable semi-annually in cash, in arrears, on April 15 and October 15 of each year, beginning on October 15, 2020 . The Convertible Notes will mature on April 15, 2025 , unless earlier converted, redeemed or repurchased. During the third quarter of Fiscal 2021, the Parent Company entered into separate, privately negotiated exchange agreements with certain holders of the Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 160.4 million in aggregate principal amount of Convertible Notes held by them for a combination of an aggregate of $ 90.8 million in cash and 513,991 shares of the Parent Company's common stock. During the fourth quarter of Fiscal 2021, the Parent Company entered into separate, privately negotiated exchange agreements with certain holders of the Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 72.3 million in aggregate principal amount of Convertible Notes held by them for $ 109.0 million in cash. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 124.6 million that have been pushed down to Parent Company's subsidiaries for Fiscal 2021. Subsequent to January 29, 2022 (March 15, 2022), the Parent Company entered into separate, privately negotiated exchange agreements with certain holders of the Convertible Notes. Under the terms of the exchange agreements, the holders have agreed to exchange $ 55.6 million in aggregate principal amount of Convertible Notes held by them for an amount in cash to be calculated based on the volume-weighted average price of the Parent Company’s common stock over a two-day measurement period beginning on March 16, 2022. These exchange transactions are expected to close on March 21, 2022, subject to the satisfaction of customary closing conditions. 83 The Convertible Notes contain a cash conversion feature, and as a result, the Company initially separated it into liability and equity components. The Parent Company valued the liability component based on its borrowing rate for a similar debt instrument that does not contain a conversion feature. The equity component, which was recognized as a debt discount, was valued as the difference between the face value of the Convertible Notes and the fair value of the liability component. As a result of adopting ASU 2020-06, the Parent Company is no longer separating the Convertible Notes into debt and equity components, and is instead accounting for it wholly as debt. In connection with the Convertible Notes issuance, the Parent Company incurred deferred financing costs of $ 21.0 million, primarily related to fees paid to the bookrunners of the offering, as well as legal, accounting and rating agency fees. These costs were initially allocated on a pro rata basis, with $ 16.4 million allocated to the debt component and $ 4.6 million allocated to the equity component. As a result of adopting ASU 2020-06, all unamortized deferred financing costs related to the Convertible Notes are now allocated to debt. Prior to adoption of ASU 2020-06, the debt discount and the debt portion of the deferred costs were being amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 8.2 %. The effective interest rate after adoption of ASU 2020-06 is 2.8 %. Interest expense on the Convertible Notes of $ 20.1 million and $ 40.5 million have been pushed down to Parent Company’s subsidiaries for Fiscal 2021 and Fiscal 2020, respectively. There was a $ 572.3 million and $ 805.0 million intercompany note receivable as of January 29, 2022 and January 30, 2021, respectively, related to the cash transferred to Parent subsidiaries for the Convertible Notes, which is included in Investment in subsidiaries in the Condensed Balance Sheets. The Convertible Notes consist of the following components as of the dates indicated: (in thousands) January 29, January 30, 2022 2021 Liability component: Principal $ 572,322 $ 805,000 Unamortized debt discount — ( 156,689 ) Unamortized deferred debt costs ( 9,761 ) ( 14,191 ) Net carrying amount $ 562,561 $ 634,120 Equity component, net $ — $ 131,916 Note 5. Capital Stock Treasury Stock The Parent Company accounts for treasury stock under the cost method. During Fiscal 2021, the Parent Company acquired 53,783 shares of common stock from employees for approximately $ 16.6 million to satisfy their minimum statutory tax withholdings related to the vesting of restricted stock awards, which was recorded in the line item “Purchase of treasury shares” on the Parent Company’s Condensed Statements of Cash Flows. Share Repurchase Program On August 14, 2019, the Parent Company’s Board of Directors authorized the repurchase of up to $ 400.0 million of common stock, which expired in August 2021 . On August 18, 2021, the Parent Company’s Board of Directors authorized the repurchase of up to $ 400.0 million of common stock, which is authorized to be executed through August 2023 . During Fiscal 2021, the Parent Company repurchased 856,855 shares of common stock for $ 250.0 million under its share repurchase program. As of January 29, 2022, the Parent Company had $ 150.0 million remaining under its share repurchase authorization. 84 Subsequent to January 29, 2022 (February 16, 2022), the Parent Company's Board of Directors authorized the repurchase of up to $ 500.0 million of common stock, which is authorized to be executed through February 2024 . This repurchase program is funded using the Parent Company’s available cash and borrowings under the ABL Line of Credit. 85 BURLINGTON STORES, INC. Schedule II—Valuation and Qualifying Accounts and Reserves (All amounts in thousands) Description Balance at Beginning of Period Charged to Costs & Expenses Charged to Other Accounts(1) Accounts Written Off or Deductions(2) Balance at End of Period Year ended January 29, 2022 Allowance for doubtful accounts $ 4,855 $ 185 $ — $ 1,735 $ 3,305 Valuation allowances on deferred tax assets $ 12,957 $ — $ ( 93 ) $ — $ 12,864 Year ended January 30, 2021 Allowance for doubtful accounts $ 795 $ 4,069 $ — $ 9 $ 4,855 Valuation allowances on deferred tax assets $ 9,842 $ — $ 3,115 $ — $ 12,957 Year ended February 1, 2020 Allowance for doubtful accounts $ 78 $ 992 $ — $ 275 $ 795 Valuation allowances on deferred tax assets $ 10,268 $ — $ ( 426 ) $ — $ 9,842 Notes: (1) Amounts related to valuation allowances on deferred taxes are charged to income tax expense. (2) Actual allowances. 86 Item 9. Changes in and Disagreements with Acc ountants on Accounting and Financial Disclosure None. Item 9A. Contro ls and Procedures Evaluation of Disclosure Controls and Procedures Our management team, under the supervision and with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act, as of the last day of the fiscal period covered by this Annual Report, January 29, 2022. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of January 29, 2022. Management’s Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that: • pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In accordance with the internal control reporting requirement of the SEC, management completed an assessment of the adequacy of our internal control over financial reporting as of January 29, 2022. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013) . Based on this assessment and the criteria in the COSO framework, management has concluded that, as of January 29, 2022, our internal control over financial reporting was effective. Deloitte & Touche LLP, the independent registered public accounting firm that audited and reported on our consolidated financial statements contained herein, has audited the effectiveness of our internal control over financial reporting as of January 29, 2022, and has issued an attestation report on the effectiveness of our internal control over financial reporting included herein. Changes in Internal Control Over Financial Reporting During the fourth quarter of Fiscal 2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 87 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Burlington Stores, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Burlington Stores, Inc. and subsidiaries (the “Company”) as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 29, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended January 29, 2022, of the Company and our report dated March 16, 2022 expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of (ASU) 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP Parsippany, New Jersey 88 March 16, 2022 89 Item 9B. Other Information. None. 90 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. Part III Item 10. Directors, Executive Off icers and Corporate Governance For the information required by this Item 10, see “Election of Directors,” “Information About Our Executive Officers,” “Corporate Governance,” and “Board Committees,” in the Proxy Statement for our 2022 Annual Meeting of Stockholders (the “Proxy Statement”), which information is incorporated herein by reference. The Proxy Statement will be filed within 120 days of the close of our 2021 fiscal year. Item 11. Executi ve Compensation For the information required by this Item 11, see “Executive Compensation” and “Director Compensation” in the Proxy Statement, which information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Ow ners and Management and Related Stockholder Matters For the information required by this Item 12, see “Ownership of Securities” and “Securities Authorized for Issuance Under Equity Compensation Plans” in the Proxy Statement, which information is incorporated herein by reference. Item 13. Certain Relationships and Relate d Transactions, and Director Independence For the information required by this Item 13, see “Certain Relationships and Related Party Transactions” and “Corporate Governance” in the Proxy Statement, which information is incorporated herein by reference. Item 14. Principal Accou ntant Fees and Services For the information required by this Item 14, see “Principal Accountant Fees and Services” and “Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Certified Public Accounting Firm” in the Proxy Statement, which information is incorporated herein by reference. 91 PART IV Item 15. Exhibits and Finan cial Statement Schedules (a) Documents Filed as Part of this Report (1) Financial Statements . The Consolidated Financial Statements filed as part of this Annual Report are listed on the Index to Consolidated Financial Statements on page 46 of this Annual Report. (2) Financial Statement Schedules . Schedule I—Condensed Financial Information of Registrant filed as part of this Annual Report is starting on page 80 . Schedule II—Valuation and Qualifying Accounts filed as part of this Annual Report is set forth on page 86 of this Annual Report. All other financial statement schedules have been omitted here because they are not applicable, not required, or the information is shown in the Consolidated Financial Statements or notes thereto. (3) Exhibits Required by Item 601 of Regulation S-K . The following is a list of exhibits required by Item 601 of Regulation S-K and filed as part of this Annual Report. Exhibits that previously have been filed are incorporated herein by reference. Exhibits filed prior to June 2013 are incorporated herein by reference to filings of Burlington Coat Factory Investments Holdings, Inc. (File No. 333-137916-110). Incorporated by Reference Exhibit Number Exhibit Description Form Filing Date 3.1 Amended and Restated Certificate of Incorporation of Burlington Stores, Inc. Registration Statement on Form S-1/A September 10, 2013 3.2 Amended and Restated Bylaws of Burlington Stores, Inc. Current Report on Form 8-K February 27, 2018 4.1 Description of the Registrant’s Securities. Annual Report on Form 10-K March 13, 2020 4.2 Indenture (including the form of Convertible Note), dated as of April 16, 2020, between Burlington Stores, Inc. and Wilmington Trust, National Association Current Report on Form 8-K April 16, 2020 10.1 Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, as borrower, the facility guarantors signatory thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, Goldman Sachs Lending Partners LLC, the lenders party thereto, and J.P. Morgan Securities LLC, Goldman Sachs Lending Partners LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners. Current Report on Form 8-K February 24, 2011 10.1.1 Amendment No. 1, dated May 16, 2012, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the other parties thereto. Current Report on Form 8-K May 17, 2012 10.1.2 Amendment No. 2, dated February 15, 2013, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lender parties thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the other parties thereto. Current Report on Form 8-K February 21, 2013 92 10.1.3 Amendment No. 3, dated May 17, 2013, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent. Current Report on Form 8-K May 22, 2013 10.1.4 Amendment No. 4, dated August 13, 2014, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent. Current Report on Form 8-K August 18, 2014 10.1.5 Amendment No. 5, dated July 29, 2016, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent. Current Report on Form 8-K July 29, 2016 10.1.6 Amendment No. 6 to the Credit Agreement, dated November 17, 2017, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent. Current Report on Form 8-K November 21, 2017 10.1.7 Amendment No. 7 to the Credit Agreement, dated November 2, 2018, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent. Current Report on Form 8-K November 8, 2018 10.1.8 Amendment No. 8 to the Credit Agreement, dated February 26, 2020, to the Credit Agreement, dated February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent. Current Report on Form 8-K March 3, 2020 10.1.9 Amendment No. 9, dated as of June 24, 2021, to the Credit Agreement dated as of February 24, 2011, by and among Burlington Coat Factory Warehouse Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders and facility guarantors party thereto. Current Report on Form 8-K June 25, 2021 10.2 Second Amended and Restated Credit Agreement, dated September 2, 2011, among Burlington Coat Factory Warehouse Corporation, as lead borrower, the borrowers named therein and the facility guarantors party thereto, Bank of America, N.A., as administrative agent and as collateral agent, Wells Fargo Capital Finance, LLC and JPMorgan Chase Bank, N.A., as co-syndication agents, and Suntrust Bank and U.S. Bank, National Association, as co-documentation agents, the lenders named therein, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Capital Finance, LLC, as joint lead arrangers, and Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Capital Finance, LLC, as joint bookrunners. Current Report on Form 8-K September 9, 2011 93 10.2.1 First Amendment to Second Amended and Restated Credit Agreement, dated August 13, 2014, by and among Burlington Coat Factory Warehouse Corporation, as lead borrower, the other borrowers party thereto, the facility guarantors thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent. Current Report on Form 8-K August 18, 2014 10.2.2 Second Amendment to Second Amended and Restated Credit Agreement, dated June 29, 2018, by and among Burlington Coat Factory Warehouse Corporation, as lead borrower, the other borrowers party thereto, the facility guarantors thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent. Current Report on Form 8-K July 2, 2018 10.2.3 Consent and Technical Modification Agreement, dated December 3, 2018, by and between Burlington Coat Factory Warehouse Corporation, as lead borrower, and Bank of America, N.A., as administrative agent Annual Report on Form 10-K March 20, 2019 10.2.4 Consent and Technical Modification Agreement, dated as of April 7, 2020, by and between Burlington Coat Factory Warehouse Corporation and Bank of America, N.A. Quarterly Report on Form 10-Q May 29, 2020 10.2.5 Third Amendment to Second Amended and Restated Credit Agreement, dated as of December 22, 2021, by and among Burlington Coat Factory Warehouse Corporation, as lead borrower, the other borrowers party thereto, the facility guarantors party thereto, each lender party thereto, and Bank of America, N.A., as administrative agent and collateral agent. Current Report on Form 8-K December 22, 2021 10.3 Revolving Credit Note, dated April 13, 2006, by the borrowers party thereto in favor of PNC Bank, National Association. Registration Statement on Form S-4 October 10, 2006 10.4 Revolving Credit Note, dated April 13, 2006, by the borrowers party thereto in favor of Siemens Financial Services, Inc. Registration Statement on Form S-4 October 10, 2006 10.5 Amended and Restated Revolving Credit Note, dated January 15, 2010, by the borrowers party thereto in favor of Wells Fargo Retail Finance, LLC. Transition Report on Form 10-K/T April 30, 2010 10.6 Revolving Credit Note, dated April 13, 2006, by the borrowers party thereto in favor of National City Business Credit, Inc. Registration Statement on Form S-4 October 10, 2006 10.7 Revolving Credit Note, dated April 13, 2006, by the borrowers party thereto in favor of Citizens Bank of Pennsylvania. Registration Statement on Form S-4 October 10, 2006 10.8 Revolving Credit Note, dated April 13, 2006, by the borrowers party thereto in favor of HSBC Business Credit (USA), Inc. Registration Statement on Form S-4 October 10, 2006 10.9 Revolving Credit Note, dated April 13, 2006, by the borrowers party thereto in favor of Sovereign Bank. Registration Statement on Form S-4 October 10, 2006 94 10.10 Amended and Restated Revolving Credit Note, dated January 15, 2010, by the borrowers party thereto in favor of Capital One Leverage Finance Corp. Transition Report on Form 10-K/T April 30, 2010 10.11 Form of Swingline Note. Registration Statement on Form S-4 October 10, 2006 10.12 Guaranty, dated April 13, 2006, by the facility guarantors party thereto in favor of Bank of America, N.A., as administrative Agent and Bank of America, N.A., as Collateral Agent. Registration Statement on Form S-4 October 10, 2006 10.13 Security Agreement, dated April 13, 2006, by and among each of the borrowers party thereto, each of the facility guarantors party thereto, and Bank of America, N.A., as collateral agent. Registration Statement on Form S-4 October 10, 2006 10.14 Intellectual Property Security Agreement, dated April 13, 2006, by and among each of the borrowers party thereto, each of the facility guarantors party thereto, and Bank of America, N.A., as collateral agent. Registration Statement on Form S-4 October 10, 2006 10.15 Pledge Agreement, dated April 13, 2006, by and between Burlington Coat Factory Holdings, Inc., Burlington Coat Factory Investments Holdings, Inc., Burlington Coat Factory Warehouse Corporation, Burlington Coat Factory Realty Corp., Burlington Coat Factory Purchasing, Inc., K&T Acquisition Corp., Burlington Coat Factory of New York, LLC, Burlington Coat Factory Warehouse of Baytown, Inc., Burlington Coat Factory of Texas, Inc., as the pledgors, and Bank of America, N.A., as collateral agent. Registration Statement on Form S-4 October 10, 2006 10.16+ Employment Agreement, dated October 13, 2009, by and between Burlington Coat Factory Warehouse Corporation and Joyce Manning Magrini. Transition Report on Form 10-K/T April 30, 2010 10.16.1+ Amendment to Employment Agreement, dated February 26, 2010, by and between Burlington Coat Factory Warehouse Corporation and Joyce Manning Magrini. Transition Report on Form 10-K/T April 30, 2010 10.16.2+ Amendment No. 2 to Employment Agreement, dated October 18, 2012, by and between Burlington Coat Factory Warehouse Corporation and Joyce Manning Magrini. Quarterly Report on Form 10-Q December 11, 2012 10.16.3+ Amendment No. 3 to Employment Agreement, dated July 22, 2020, by and between Burlington Coat Factory Warehouse Corporation and Joyce Manning Magrini. Current Report on Form 8-K July 24, 2020 10.17+ Employment Agreement, dated January 28, 2008, by and between Burlington Coat Factory Warehouse Corporation and Fred Hand. Quarterly Report on Form 10-Q April 15, 2008 10.17.1+ Amendment No. 1 to Employment Agreement, dated October 31, 2012, by and between Burlington Coat Factory Warehouse Corporation and Fred Hand. Registration Statement on Form S-1/A September 6, 2013 95 10.18+ Amended and Restated Employment Agreement, dated July 28, 2015, by and among Burlington Coat Factory Warehouse Corporation and Jennifer Vecchio. Quarterly Report on Form 10-Q August 31, 2015 10.18.1+ Amendment, dated May 19, 2017, to the Amended and Restated Employment Agreement, dated July 28, 2015, by and among Burlington Coat Factory Warehouse Corporation and Jennifer Vecchio. Current Report on Form 8-K May 22, 2017 10.18.2+ Amendment No. 2, dated March 12, 2021, to the Amended and Restated Employment Agreement, dated July 28, 2015, by and among Burlington Coat Factory Warehouse Corporation and Jennifer Vecchio. Annual Report on Form 10-K March 15, 2021 10.19+ Employment Agreement, dated as of April 23, 2019, by and between Burlington Stores, Inc. and Michael O’Sullivan. Current Report on Form 8-K April 23, 2019 10.20+ Employment Agreement, dated as of March 23, 2011, by and between Burlington Coat Factory Warehouse Corporation and John Crimmins Annual Report on Form 10-K March 13, 2020 10.21+ Form of Non-Qualified Stock Option Agreement between Burlington Coat Factory Holdings, Inc. and Employees with Employment Agreements (for grants made after March 2009 and prior to 2014 (other than 2013 special one-time grants)) pursuant to 2006 Management Incentive Plan. Current Report on Form 8-K April 30, 2009 10.22+ Form of Non-Qualified Stock Option Agreement between Burlington Coat Factory Holdings, Inc. and Employees without Employment Agreements (for grants made after March 2009 and prior to 2014 (other than 2013 special one-time grants)) pursuant to 2006 Management Incentive Plan. Current Report on Form 8-K April 30, 2009 10.23+ Burlington Coat Factory Holdings, Inc. 2006 Management Incentive Plan (Amended and Restated June 15, 2013). Registration Statement on Form S-1/A September 6, 2013 10.24+ Form of Directors and Officers Indemnification Agreement. Registration Statement on Form S-1/A September 10, 2013 10.25+ Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017. Current Report on Form 8-K May 22, 2017 10.26+ Form of Non-Qualified Stock Option Agreement, pursuant to Burlington Holdings, Inc. 2006 Management Incentive Plan (Amended and Restated June 15, 2013), between Burlington Holdings, Inc. and Employees with Employment Agreements (for 2013 special one-time grants). Registration Statement on Form S-1/A September 6, 2013 10.27+ Form of Non-Qualified Stock Option Agreement, pursuant to Burlington Holdings, Inc. 2006 Management Incentive Plan (Amended and Restated June 15, 2013), between Burlington Holdings, Inc. and Employees without Employment Agreements (for 2013 special one-time grants). Registration Statement on Form S-1/A September 6, 2013 10.28+ Form of Non-Qualified Stock Option Agreement between Burlington Stores, Inc. and Employees with Employment Agreements pursuant to Burlington Holdings, Inc. 2006 Management Incentive Plan (Amended and Restated June 15, 2013) (for grants made from and after December 2015 and prior to November 2016). Annual Report on Form 10-K March 15, 2016 96 10.29+ Form of Non-Qualified Stock Option Agreement between Burlington Stores, Inc. and Employees without Employment Agreements pursuant to Burlington Holdings, Inc. 2006 Management Incentive Plan (Amended and Restated June 15, 2013) (for grants made from and after December 2015 and prior to November 2016). Annual Report on Form 10-K March 15, 2016 10.30+ Form of Non-Qualified Stock Option Agreement between Burlington Stores, Inc. and Employees with Employment Agreements pursuant to Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after November 2016 and prior to May 2017). Quarterly Report on Form 10-Q November 23, 2016 10.31+ Form of Non-Qualified Stock Option Agreement between Burlington Stores, Inc. and Employees without Employment Agreements pursuant to Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after November 2016 and prior to May 2017). Quarterly Report on Form 10-Q November 23, 2016 10.32+ Form of Non-Qualified Stock Option Agreement between Burlington Stores, Inc. and Employees with Employment Agreements or Subject to the Executive Severance Plan pursuant to Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2017 and prior to May 2019). Current Report on Form 8-K May 22, 2017 10.33+ Form of Non-Qualified Stock Option Agreement between Burlington Stores, Inc. and Employees without Employment Agreements pursuant to Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2017 and prior to May 2019). Current Report on Form 8-K May 22, 2017 10.34+ Form of Restricted Stock Grant Agreement between Burlington Stores, Inc. and Employees with Employment Agreements or Subject to the Executive Severance Plan pursuant to Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2017 and prior to May 2019). Current Report on Form 8-K May 22, 2017 10.35+ Form of Restricted Stock Grant Agreement between Burlington Stores, Inc. and Employees without Employment Agreements pursuant to Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2017 and prior to May 2019). Current Report on Form 8-K May 22, 2017 10.36+ Form of Performance-Based Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 1, 2019). Quarterly Report on Form 10-Q June 3, 2019 97 10.37+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2019). Quarterly Report on Form 10-Q June 3, 2019 10.38+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2019). Quarterly Report on Form 10-Q June 3, 2019 10.39+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and Thomas A. Kingsbury pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2019). Quarterly Report on Form 10-Q June 3, 2019 10.40+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and Non-Employee Directors pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after May 2019). Quarterly Report on Form 10-Q August 29, 2019 10.41 Security Agreement, dated as of April 16, 2020, among Burlington Coat Factory Warehouse Corporation, the Grantors party thereto and Wilmington Trust, National Association, in its capacity as collateral agent under the Indenture Current Report on Form 8-K April 16, 2020 10.42 Intellectual Property Security Agreement, dated as of April 16, 2020, among Burlington Coat Factory Warehouse Corporation, the Grantors party thereto and Wilmington Trust, National Association, in its capacity as collateral agent under the Indenture Current Report on Form 8-K April 16, 2020 10.43 Pledge Agreement, dated as of April 16, 2020, among Burlington Coat Factory Warehouse Corporation, the Grantors party thereto and Wilmington Trust, National Association, in its capacity as collateral agent under the Indenture Current Report on Form 8-K April 16, 2020 10.44 ABL Intercreditor Agreement, dated as of April 16, 2020, among Burlington Coat Factory Warehouse Corporation, the Guarantors party thereto, the Bank of America, N.A., in its capacity as administrative agent and collateral agent under the ABL Facility, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent under the Term Loan Facility, and Wilmington Trust, National Association, in its capacity as collateral agent and trustee under the Indenture Current Report on Form 8-K April 16, 2020 10.45 Pari Passu Intercreditor Agreement, dated as of April 16, 2020, among Burlington Coat Factory Warehouse Corporation, the Guarantors party thereto, JPMorgan Chase Bank, N.A., as collateral agent under the Term Loan Facility, and Wilmington Trust, National Association, in its capacity as collateral agent under the Indenture Current Report on Form 8-K April 16, 2020 98 10.46+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for special grants made from and after May 20, 2020). Quarterly Report on Form 10-Q August 27, 2020 10.47+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for special grants made from and after May 20, 2020). Quarterly Report on Form 10-Q August 27, 2020 10.48+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made to certain merchandising and planning associates from and after May 3, 2021). Quarterly Report on Form 10-Q May 27, 2021 10.49+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made to certain merchandising and planning associates from and after May 3, 2021). Quarterly Report on Form 10-Q May 27, 2021 10.50+ Form of Performance-Based Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made to certain merchandising and planning associates from and after May 3, 2021). Quarterly Report on Form 10-Q May 27, 2021 10.51+ Burlington Stores, Inc. Executive Severance Plan (Merchandising & Planning) (Effective March 26, 2021). Quarterly Report on Form 10-Q May 27, 2021 10.52+ Burlington Stores, Inc. Executive Severance Plan (Amended and Restated Effective March 26, 2021). Quarterly Report on Form 10-Q May 27, 2021 10.53+ Employment Agreement dated July 12, 2021 by and between Burlington Stores, Inc. and Travis Marquette. Current Report on Form 8-K July 15, 2021 10.54+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and Travis Marquette pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for Make-Whole RSU Award). Current Report on Form 8-K July 15, 2021 10.55+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and Travis Marquette pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for Make-Whole Option Award). Current Report on Form 8-K July 15, 2021 10.56+ Employment Agreement, dated as of November 16, 2009, by and between Burlington Coat Factory Warehouse Corporation and Michael Metheny. Annual Report on Form 10-K April 26, 2013 99 10.57+ Amendment No. 1 to Employment Agreement, dated as of August 20, 2012, by and between Burlington Coat Factory Warehouse Corporation and Michael Metheny. Annual Report on Form 10-K April 26, 2013 10.58+† Offer Letter with Michael Allison dated March 9, 2021. 10.59+† Form of Performance-Based Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made from and after November 9, 2021). 10.60+† Form of Performance-Based Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for grants made to certain merchandising and planning associates from and after November 9, 2021). 10.61+† Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for special grants made to certain merchandising and planning associates). 10.62+† Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017 (for special grants made to certain merchandising and planning associates). 21.1† List of Subsidiaries of Burlington Stores, Inc. 23.1† Consent of Deloitte & Touche LLP. 31.1† Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2† Certification of Principal Financial Officer required by Rule 13a-14(a) or 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 pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2† Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS† Inline XBRL Instance Document – the instance document does not appear in Interactive Data File, because its XBRL tags are embedded within the Inline XBRL document. 101.SCH† Inline XBRL Taxonomy Extension Schema Document 101.CAL† Inline Taxonomy Extension Calculation Linkbase Document 100 101.DEF† Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB† Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE† Inline XBRL Taxonomy Extension Presentation Linkbase Document 104† Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) + Indicates management contract or compensatory plan or arrangement. † Filed or furnished herewith. Item 16. Form 10-K Summary None. 101 SIGNA TURES Pursuant to the requirements of Section 13 or 15(d) 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. BURLINGTON STORES, INC. By: /s/ Michael O’Sullivan Michael O’Sullivan Chief Executive Officer Date: March 16, 2022 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 16 th day of March 2022. Signature Title /s/ Michael O’Sullivan Chief Executive Officer and Director (Principal Executive Officer) Michael O’Sullivan /s/ John Crimmins Chief Financial Officer (Principal Financial Officer) John Crimmins /s/ Jeffrey Laub Chief Accounting Officer (Principal Accounting Officer) Jeffrey Laub /s/ Ted English Director Ted English /s/ Michael Goodwin Director Michael Goodwin /s/ Jordan Hitch Director Jordan Hitch /s/ John Mahoney Director John Mahoney /s/ William McNamara Director William McNamara /s/ Jessica Rodriguez Director Jessica Rodriguez /s/ Laura Sen Director Laura Sen /s/ Paul Sullivan Director Paul Sullivan /s/ Mary Ann Tocio Director Mary Ann Tocio 102