Burlington Stores, Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Consolidated Financial Statements Report of Independent Registered Public Accounting Firm 41 Consolidated Statements of Income for the fiscal years ended February 3, 2024, January 28, 2023 and January 30, 2021 43 Consolidated Statements of Comprehensive Income for the fiscal years ended February 3, 2024, January 28, 2023 and January 30, 2021 44 Consolidated Balance Sheets as of February 3, 2024 and January 28, 2023 45 Consolidated Statements of Cash Flows for the fiscal years ended February 3, 2024, January 28, 2023 and January 30, 2021 46 Consolidated Statements of Stockholders’ Equity for the fiscal years ended February 3, 2024, January 28, 2023 and January 30, 2021 47 Notes to Consolidated Financial Statements for the fiscal years ended February 3, 2024, January 28, 2023 and January 30, 2021 48 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Burlington Stores, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Burlington Stores, Inc. and subsidiaries (the "Company") as of February 3, 2024 and January 28, 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended February 3, 2024, 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 February 3, 2024 and January 28, 2023, and the results of its operations and its cash flows for each of the three years in the period ended February 3, 2024, 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 February 3, 2024, 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 15, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting. Change in Accounting Principle As discussed in Note 7 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 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 41 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. 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 management’s 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. /s/ Deloitte & Touche LLP Morristown, New Jersey March 15, 2024 We have served as the Company’s auditor since 1983. 42 BURLING TON STORES, INC. CONSOLIDATED STATEMENTS OF INCOME (All amounts in thousands, except per share data) Fiscal Year Ended February 3, January 28, January 29, 2024 2023 2022 (53 Weeks) REVENUES: Net sales $ 9,708,973 $ 8,684,545 $ 9,306,549 Other revenue 18,494 18,059 15,707 Total revenue 9,727,467 8,702,604 9,322,256 COSTS AND EXPENSES: Cost of sales 5,584,060 5,171,715 5,436,155 Selling, general and administrative expenses 3,288,315 2,877,356 2,868,527 Costs related to debt amendments 97 — 3,419 Depreciation and amortization 307,064 270,398 249,217 Impairment charges - long-lived assets 6,367 21,402 7,748 Other income - net ( 40,882 ) ( 26,907 ) ( 11,630 ) Loss on extinguishment of debt 38,274 14,657 156,020 Interest expense 78,399 66,474 67,502 Total costs and expenses 9,261,694 8,395,095 8,776,958 Income before income tax expense 465,773 307,509 545,298 Income tax expense 126,124 77,386 136,459 Net income $ 339,649 $ 230,123 $ 408,839 Net income per common share: Common stock - basic $ 5.25 $ 3.51 $ 6.14 Common stock - diluted $ 5.23 $ 3.49 $ 6.00 Weighted average number of common shares: Common stock - basic 64,672 65,637 66,588 Common stock - diluted 64,917 65,901 68,126 See Notes to Consolidated Financial Statements. 43 BURLINGT ON STORES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (All amounts in thousands) Fiscal Year Ended February 3, January 28, January 29, 2024 2023 2022 (53 Weeks) Net income $ 339,649 $ 230,123 $ 408,839 Other comprehensive income, net of tax: Interest rate derivative contracts: Net unrealized gain arising during the period 10,460 27,726 7,931 Net reclassification into earnings during the period ( 5,675 ) 5,463 10,643 Other comprehensive income, net of tax 4,785 33,189 18,574 Total comprehensive income $ 344,434 $ 263,312 $ 427,413 See Notes to Consolidated Financial Statements. 44 BURLINGTON STORES, INC. CONSOLIDATED B ALANCE SHEETS (All amounts in thousands, except share and per share data) February 3, January 28, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 925,359 $ 872,623 Restricted cash and cash equivalents — 6,582 Accounts receivable—net of allowance for doubtful accounts of $ 2,313 and $ 1,252 , respectively 74,361 71,091 Merchandise inventories 1,087,841 1,181,982 Assets held for disposal 23,299 19,823 Prepaid and other current assets 216,164 131,691 Total current assets 2,327,024 2,283,792 Property and equipment—net 1,880,325 1,668,005 Operating lease assets 3,132,768 2,945,932 Tradenames 238,000 238,000 Goodwill 47,064 47,064 Deferred tax assets 2,436 3,205 Other assets 79,223 83,599 Total assets $ 7,706,840 $ 7,269,597 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 956,350 $ 955,793 Current operating lease liabilities 411,395 401,111 Other current liabilities 647,338 541,413 Current maturities of long term debt 13,703 13,634 Total current liabilities 2,028,786 1,911,951 Long term debt 1,394,942 1,462,072 Long term operating lease liabilities 2,984,794 2,825,292 Other liabilities 73,793 69,386 Deferred tax liabilities 227,593 205,991 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: 82,399,577 shares and 82,037,994 shares, respectively Outstanding: 63,964,371 shares and 65,019,713 shares, respectively 8 8 Additional paid-in-capital 2,118,356 2,015,625 Accumulated earnings 984,064 644,415 Accumulated other comprehensive income 33,533 28,748 Treasury stock, at cost ( 2,139,029 ) ( 1,893,891 ) Total stockholders' equity 996,932 794,905 Total liabilities and stockholders' equity $ 7,706,840 $ 7,269,597 See Notes to Consolidated Financial Statements. 45 BURLINGTON STORES, INC. CONSOLIDATED STATEM ENTS OF CASH FLOWS (All amounts in thousands) Fiscal Year Ended February 3, January 28, January 29, 2024 2023 2022 (53 Weeks) OPERATING ACTIVITIES Net income $ 339,649 $ 230,123 $ 408,839 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 307,064 270,398 249,217 Impairment charges — long-lived assets 6,367 21,402 7,748 Amortization of deferred financing costs 3,193 3,633 5,323 Accretion of long term debt instruments 958 949 889 Deferred income taxes 20,663 ( 25,431 ) 51,952 Loss on extinguishment of debt 38,274 14,657 156,020 Non-cash stock compensation expense 83,948 67,480 58,546 Non-cash lease expense ( 7,724 ) ( 523 ) ( 10,294 ) Cash received from landlord allowances 14,585 23,137 34,051 Changes in assets and liabilities: Accounts receivable ( 4,464 ) ( 13,012 ) 10,186 Merchandise inventories 94,141 ( 160,974 ) ( 280,220 ) Prepaid and other current assets ( 84,473 ) 244,852 ( 56,363 ) Accounts payable ( 21,953 ) ( 125,006 ) 214,792 Other current liabilities 80,774 44,830 ( 33,129 ) Other long term assets and long term liabilities 3,651 ( 360 ) ( 2,782 ) Other operating activities ( 5,918 ) 230 18,384 Net cash provided by operating activities 868,735 596,385 833,159 INVESTING ACTIVITIES Cash paid for property and equipment ( 492,644 ) ( 447,393 ) ( 352,467 ) Lease acquisition costs ( 24,640 ) ( 3,710 ) ( 576 ) Proceeds from sale of property and equipment and assets held for sale 13,539 27,961 8,654 Net cash used in investing activities ( 503,745 ) ( 423,142 ) ( 344,389 ) FINANCING ACTIVITIES Proceeds from long term debt—Term B-6 Loans — — 956,608 Principal payments on long term debt—Term B-6 Loans ( 9,614 ) ( 9,614 ) ( 4,807 ) Principal payments on long term debt—Term B-5 Loans — — ( 961,415 ) Proceeds from long term debt— 2027 Convertible Notes 297,069 — — Principal payment on long term debt— 2025 Convertible Notes ( 386,519 ) ( 78,240 ) ( 201,695 ) Principal payments on long term debt—Secured Notes — — ( 323,905 ) Purchase of treasury shares ( 243,188 ) ( 316,896 ) ( 266,628 ) Proceeds from stock option exercises 18,783 20,592 39,887 Deferred financing costs — — ( 2,143 ) Other financing activities 4,633 ( 7,553 ) ( 13,857 ) Net cash used in financing activities ( 318,836 ) ( 391,711 ) ( 777,955 ) Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents 46,154 ( 218,468 ) ( 289,185 ) Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period 879,205 1,097,673 1,386,858 Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 925,359 $ 879,205 $ 1,097,673 Supplemental disclosure of cash flow information: Interest paid $ 88,148 $ 51,445 $ 52,671 Income tax payments (refund) - net $ 86,237 $ ( 208,333 ) $ 130,247 Non-cash investing and financing activities: Shares issued to repurchase Convertible Notes $ — $ — $ 151,206 Finance lease modification $ — $ ( 6,042 ) $ — Accrued purchases of property and equipment $ 110,475 $ 66,007 $ 63,296 Exchange of noncash assets $ — $ 7,300 $ — See Notes to Consolidated Financial Statements. 46 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 (Income) Shares Amount Total 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 — — ( 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 Net income — — — 230,123 — — — 230,123 Stock options exercised 168,720 1 20,591 — — — — 20,592 Shares used for tax withholding — — — — — ( 75,710 ) ( 14,238 ) ( 14,238 ) Shares purchased as part of publicly announced programs — — — — — ( 1,756,811 ) ( 302,658 ) ( 302,658 ) Vesting of restricted shares, net of forfeitures of 199 restricted shares 191,959 — — — — — — — Stock based compensation — — 67,480 — — — — 67,480 Unrealized gains on interest rate derivative contracts, net of related taxes of $ 10.1 million — — — — 27,726 — — 27,726 Amount reclassified into earnings, net of related taxes of $ 2.0 million — — — — 5,463 — — 5,463 Balance at January 28, 2023 82,037,994 8 2,015,625 644,415 28,748 ( 17,018,281 ) ( 1,893,891 ) 794,905 Net income — — — 339,649 — — — 339,649 Stock options exercised 157,003 — 18,783 — — — — 18,783 Shares used for tax withholding — — — — — ( 62,894 ) ( 11,255 ) ( 11,255 ) Shares purchased as part of publicly announced programs, inclusive of $ 1.9 million related to excise tax — — — — — ( 1,354,031 ) ( 233,883 ) ( 233,883 ) Vesting of restricted shares 204,580 — — — — — — — Stock based compensation — — 83,948 — — — — 83,948 Unrealized gains on interest rate derivative contracts, net of related taxes of $ 3.8 million — — — — 10,460 — — 10,460 Amount reclassified into earnings, net of related taxes of $ 2.1 million — — — — ( 5,675 ) — — ( 5,675 ) Balance at February 3, 2024 82,399,577 $ 8 $ 2,118,356 $ 984,064 $ 33,533 ( 18,435,206 ) $ ( 2,139,029 ) $ 996,932 See Notes to Consolidated Financial Statements. 47 BURLINGTON STORES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies Business As of February 3, 2024, Burlington Stores, Inc., a Delaware corporation (collectively with its subsidiaries, the Company), has expanded its store base to 1007 retail stores in 46 states, Washington D.C. 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 February 3, 2024 , the Company operated stores under the names “Burlington Stores” ( 1,006 stores), and “Cohoes Fashions” ( 1 store). Cohoes Fashions offers products similar to those offered by Burlington Stores. 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 year ended February 3, 2024 (Fiscal 2023) consisted of 53 weeks, and the fiscal years ended January 28, 2023 (Fiscal 2022 ) and January 29, 2022 (Fiscal 2021) 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. 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, interest 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. 48 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. Product sourcing costs included within the line item “Selling, general and administrative expenses” amounted to $ 780.3 million, $ 677.6 million and $ 618.3 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021 , respectively. Depreciation and amortization related to the distribution and purchasing functions for the same periods amounted to $ 68.8 million, $ 56.3 million and $ 45.0 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 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. 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 $ 33.9 million, $ 26.1 million, and $ 25.3 million relating to these costs during Fiscal 2023, Fiscal 2022, and Fiscal 2021 , 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: 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 2023, Fiscal 2022 or Fiscal 2021 related to indefinite-lived intangible 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 49 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 2023, Fiscal 2022 or Fiscal 2021 . Other Assets Other assets consist primarily of landlord-owned store assets that the Company has paid for as part of its lease, deferred financing costs associated with the Company’s senior secured asset-based revolving credit facility (the ABL Line of Credit), and the fair value of derivative contracts. 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. 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. 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 $ 37.0 million and $ 36.0 million as of February 3, 2024 and January 28, 2023, 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 February 3, 2024 and January 28, 2023 were: (in thousands) February 3, 2024 January 28, 2023 Short-term self-insurance reserve $ 38,295 $ 35,808 Long-term self-insurance reserve 56,530 50,368 Total $ 94,825 $ 86,176 Other Liabilities Other liabilities primarily consist of the long term portion of self-insurance reserves 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. 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. 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 within net sales at the time of the initial transaction. 50 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 February 3, 2024 January 28, 2023 January 29, 2022 Service fees $ 4,165 $ 4,131 $ 3,178 Subleased rental income and other 9,317 9,444 9,529 PLCC 5,012 4,484 3,000 Total $ 18,494 $ 18,059 $ 15,707 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. During Fiscal 2023, Fiscal 2022 and Fiscal 2021, advertising costs were $ 36.5 million, $ 33.8 million and $ 48.5 million, respectively. Income Taxes The Company accounts for income taxes in accordance with ASC Topic No. 740, “Income Taxes ” (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 interest income , gains and losses on insurance proceeds, net gains and losses on disposition of assets, gift card breakage, and other miscellaneous items . The Company recognized $ 3.0 million and $ 1.5 million of gain on insurance recoveries during Fiscal 2022 and Fiscal 2021 , respectively, and no ne during Fiscal 2023 . The Company also recognized $ 5.0 million and $ 3.7 million during Fiscal 2023 and Fiscal 2021, respectively, related to the sale of certain state tax credits. There were no sales of tax credits during Fiscal 2022. Comprehensive Income Comprehensive income is comprised of net income 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. Lease Accounting The Company leases store locations, distribution centers and office space used in its operations. 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 51 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, 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 Per Share Net income per share is calculated using the treasury stock method. Refer to Note 10, “Net Income 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, menswear, youth apparel, baby, beauty, footwear, accessories, home, toys, gifts and coats. Sales percentage by major product category is as follows: Category Fiscal 2023 Fiscal 2022 Fiscal 2021 Ladies apparel 21 % 22 % 23 % Accessories and shoes 27 % 24 % 23 % Home 20 % 21 % 20 % Mens apparel 17 % 17 % 16 % Kids apparel and baby 12 % 12 % 14 % Outerwear 3 % 4 % 4 % 2. Recent Accounting Pronouncements There were no new accounting standards that had a material impact on the Company’s Consolidated Financial Statements during Fiscal 2023. Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" (ASU 2023-09) to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently determining the impact that ASU 2023-09 will have on its consolidated financial statement disclosures. 52 3. Restricted Cash and Cash Equivalents At February 3, 2024 the Company had no restricted cash and cash equivalents. At January 28, 2023 , restricted cash and cash equivalents consisted of $ 6.6 million related to collateral for certain insurance contracts. 4. Property and Equipment Property and equipment consist of: (in thousands) Useful Lives February 3, 2024 January 28, 2023 Land N/A $ 105,645 $ 112,513 Buildings 20 to 40 Years 413,634 394,798 Store fixtures and equipment 3 to 15 Years 1,575,798 1,414,220 Software 3 to 10 Years 365,899 332,509 Leasehold improvements Shorter of lease term or useful life 996,994 881,695 Construction in progress N/A 375,305 250,160 Total property and equipment at cost 3,833,275 3,385,895 Less: accumulated depreciation and amortization ( 1,952,950 ) ( 1,717,890 ) Total property and equipment, net of accumulated depreciation and amortization $ 1,880,325 $ 1,668,005 As of February 3, 2024 and January 28, 2023 , assets, net of accumulated amortization of $ 17.1 million and $ 13.6 million, respectively, held under finance leases amounted to approximately $ 21.8 million and $ 25.3 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. The total amount of depreciation expense during Fiscal 2023, Fiscal 2022 and Fiscal 2021 was $ 273.5 million, $ 237.8 million and $ 218.1 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. Amortization of internally developed software amounted to $ 23.0 million, $ 21.2 million and $ 18.9 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, 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 $ 10.6 million, $ 11.4 million and $ 12.2 million, during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively, and was included in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income. During Fiscal 2023, Fiscal 2022 and Fiscal 2021 , the Company recorded impairment charges related to property and equipment of $ 3.7 million, $ 20.1 million and $ 7.5 million, respectively. These charges are recorded in the line item “Impairment charges—long-lived assets” in the Company’s Consolidated Statements of Income. Refer to Note 6, “Impairment Charges,” for further discussion. 5. Intangible Assets Intangible assets at February 3, 2024 and January 28, 2023 consist primarily of tradenames. (in thousands) February 3, 2024 January 28, 2023 Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount Tradenames $ 238,000 $ — $ 238,000 $ 238,000 $ — $ 238,000 6. Impairment Charges Impairment charges recorded during Fiscal 2023, Fiscal 2022 and Fiscal 2021 amounted to $ 6.4 million, $ 21.4 million and $ 7.7 million, respectively. Impairment charges are primarily related to declines in revenues and operating results of certain stores in Fiscal 53 2023, Fiscal 2022, and Fiscal 2021, as well as sales of owned properties in Fiscal 2022. Impairment charges during these periods related to the following: (in thousands) Fiscal Years Ended Asset Categories February 3, 2024 January 28, 2023 January 29, 2022 Store fixtures and equipment $ 2,471 $ 2,981 $ 3,163 Leasehold improvements 1,272 2,097 3,330 Operating lease assets 2,623 1,286 202 Buildings — 8,687 970 Land — 4,968 — Other assets 1 1,383 83 Total $ 6,367 $ 21,402 $ 7,748 The Company recorded impairment charges related to store-level assets for 11 stores during Fiscal 2023 , 16 stores during Fiscal 2022 , and nine stores during Fiscal 2021. 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. The assets impaired had a remaining carrying value after impairments of $ 73.0 million, $ 99.0 million, and $ 63.4 million during Fiscal 2023, Fiscal 2022, and Fiscal 2021, respectively, primarily related to the right-of-use assets. 7. Long Term Debt Long term debt consists of: (in thousands) February 3, January 28, 2024 2023 Senior secured term loan facility (Term B-6 Loans), adjusted SOFR (with a floor of 0.00 %) plus 2.00 %, matures on June 24, 2028 $ 933,355 $ 942,012 Convertible senior notes, 2.25 %, mature on April 15, 2025 156,155 507,687 Convertible senior notes, 1.25 %, mature on December 15, 2027 297,069 — ABL senior secured revolving facility, SOFR plus spread based on average outstanding balance, matures on December 22, 2026 — — Finance lease obl igations 29,069 33,447 Unamortized deferred financing costs ( 7,003 ) ( 7,440 ) Total debt 1,408,645 1,475,706 Less: current maturities ( 13,703 ) ( 13,634 ) Long term debt, net of current maturities $ 1,394,942 $ 1,462,072 Term Loan Facility 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. 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. 54 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. On May 11, 2023, the Company amended the Term Loan Credit Agreement to, effective as of June 30, 2023, change one of the reference interest rates for borrowings under the Term Loan Facility from the Term Loan Adjusted LIBOR Rate to the Adjusted Term SOFR Rate (as defined in the Term Loan Credit Agreement). The Adjusted Term SOFR Rate includes a credit spread adjustment of 0.11 % for an interest period of one-month’s duration, 0.26 % for an interest period of three-months’ duration and 0.43 % for an interest period of six-months’ duration, with a floor of 0.00 %. In connection with the execution of this amendment, the Company incurred fees of $ 0.1 million, primarily related to legal fees, which were recorded in the line item “Costs related to debt amendments” in the Company’s Consolidated Statement of Income. Interest rates for the Term Loan Facility are based on: (i) for SOFR rate loans, a rate per annum equal to the Adjusted Term SOFR Rate for the applicable interest period, 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 Adjusted Term SOFR Rate for the applicable class of term loans for one-month plus 1.00 %, plus, in each case, an applicable margin. As of February 3, 2024 and January 28, 2023, the Company’s borrowing rate related to the Term Loan Facility was 7.4 % and 6.4 %, respectively. 2025 Convertible Notes On April 16, 2020, the Company issued $ 805.0 million of its 2.25 % Convertible Senior Notes due 2025 (2025 Convertible Notes). The 2025 Convertible Notes are general unsecured obligations of the Company. The 2025 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. The 2025 Convertible Notes will mature on April 15, 2025 , unless earlier converted, redeemed or repurchased. On August 5, 2020, the FASB issued 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 Company elected to early adopt this ASU as of the beginning of Fiscal 2021, using the modified retrospective method of transition. 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. Prior periods have not been restated. During the second half of Fiscal 2021, the Company entered into separate, privately negotiated exchange agreements with certain holders of the 2025 Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 232.7 million in aggregate principal amount of 2025 Convertible Notes held by them for a combination of an aggregate of $ 199.8 million in cash and 513,991 shares of the Company's common stock. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 124.6 million. During the first quarter of Fiscal 2022, the Company entered into separate, privately negotiated exchange agreements with certain holders of the 2025 Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 64.6 million in aggregate principal amount of 2025 Convertible Notes held by them for $ 78.2 million in cash. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 14.7 million. During the first quarter of Fiscal 2023, the Company entered into separate, privately negotiated exchange agreements with certain holders of the 2025 Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 110.3 million in aggregate principal amount of 2025 Convertible Notes held by them for $ 133.3 million in cash. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 24.6 million. Prior to the close of business on the business day immediately preceding January 15, 2025, the 2025 Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the 2025 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 2025 Convertible Notes have an initial conversion rate of 4.5418 shares per $ 1,000 principal amount of 2025 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 2025 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 was not permitted to redeem the 2025 Convertible Notes prior to April 15, 2023. From and after April 15, 2023, the Company is able to redeem for cash all or any portion of the 2025 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 55 100 % of the principal aggregate amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders of the 2025 Convertible Notes may require the Company to repurchase their 2025 Convertible Notes upon the occurrence of certain events that constitute a fundamental change under the indenture governing the 2025 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 2025 Convertible Notes in connection with such corporate event or during the relevant redemption period for such 2025 Convertible Notes. The effective interest rate is 2.8 %. 2027 Convertible Notes On September 12, 2023, the Company closed the issuance of approximately $ 297.1 million aggregate principal amount of its 1.25 % Convertible Senior Notes due 2027 (2027 Convertible Notes) pursuant to separate, privately negotiated exchange and subscription agreements with a limited number of holders of its 2025 Convertible Notes and certain investors, in each case pursuant to exemptions from registration under the Securities Act of 1933. The Company exchanged approximately $ 241.2 million in aggregate principal amount of the 2025 Convertible Notes for approximately $ 255.0 million in aggregate principal amount of the 2027 Convertible Notes. This exchange resulted in aggregate pre-tax debt extinguishment charges of $ 13.6 million. The Company also issued approximately $ 42.1 million in aggregate principal amount of 2027 Convertible Notes in a private placement to certain investors. An aggregate of up to 1,422,568 shares of common stock may be issued upon conversion of the 2027 Convertible Notes, which number is subject to adjustment up to an aggregate of 1,911,372 shares following certain corporate events that occur prior to the maturity date or if the Company issues a notice of redemption, and which is also subject to certain anti-dilution adjustments. The 2027 Convertible Notes bear interest at a rate of 1.25 % per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023. The 2027 Convertible Notes will mature on December 15, 2027, unless earlier converted, redeemed or repurchased. Prior to the close of business on the business day immediately preceding September 15, 2027, the 2027 Convertible Notes will be convertible at the option of the holders only upon the occurrence of certain events and during certain periods. Thereafter, the 2027 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 2027 Convertible Notes have an initial conversion rate of 4.8560 shares per $ 1,000 principal amount of 2027 Convertible Notes (equivalent to an initial conversion price of approximately $ 205.93 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 $ 155.42 per share, the last reported sale price of the Company’s common stock on September 7, 2023 on The New York Stock Exchange. Upon conversion, the Company will pay cash up to the aggregate principal amount of 2027 Convertible Notes being converted, and pay (and deliver, if applicable) cash, shares of the Company’s common stock or a combination thereof, at its election, in respect of the remainder (if any) of the Company’s conversion obligation in excess of such aggregate principal amount. The Company will not be able to redeem the 2027 Convertible Notes prior to December 20, 2025. On or after December 20, 2025 and prior to the 21st scheduled trading day immediately preceding December 15, 2027, the Company will be able to redeem for cash all or any portion of the 2027 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 aggregate principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If the Company undergoes a fundamental change, subject to certain conditions, holders of the 2027 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2027 New Convertible Notes. The fundamental change repurchase price will be 100 % of the aggregate principal amount of the 2027 Convertible Notes to be repurchased plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The effective interest rate is 1.7 %. 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. 56 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 Fiscal 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 $ 900.0 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 $ 1,200 million. The interest rate margin applicable under the Amended ABL Credit Agreement in the case of loans drawn at the Secured Overnight Financing Rate (SOFR) is 1.125 % to 1.375 % in the case of a daily SOFR rate or a term SOFR rate (in each case, plus a credit spread adjustment of 0.10 %), and 0.125 % to 0.375 % in the case of a prime rate, depending on the average daily availability of the lesser of (a) the total commitments or (b) the borrowing base. 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 (other than real estate and 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 (i) August 1st through November 30th of each year or (ii) after 2023, a 120 day period selected by the Company commencing after February 15 of the applicable year and ending on or before December 15 of such year. On July 20, 2022, BCFWC entered into a Fourth Amendment to the Second Amended and Restated Credit Agreement (the Amendment). The Amendment increased the aggregate principal amount of the commitments of its current asset-based lending facility (the ABL Line of Credit) from $ 650.0 million to $ 900.0 million and replaced the LIBOR-based interest rate benchmark provisions with interest rate benchmark provisions based on a term secured overnight financing rate (SOFR) or a daily SOFR rate (in the case of daily SOFR, available for borrowings up to $ 100 million, or up to the full amount of the commitments if the term SOFR rate is not available). The applicable SOFR rate includes a credit spread adjustment of 0.10 %. On June 26, 2023, BCFWC entered into a Fifth Amendment to the Second Amended and Restated Credit Agreement, which increased the sublimit for letters of credit thereunder from $ 150 million to $ 250 million. The letter of credit sublimit will automatically be reduced to (i) $ 237.5 million on April 1, 2024, (ii) $ 225 million on July 1, 2024, (iii) $ 212.5 million on October 1, 2024, and (iv) $ 200 million on January 1, 2025. BCFWC and the agent may extend the foregoing dates under clauses (i) through (iii), as long as the sublimit is reduced to $ 200 million no later than January 1, 2025. At January 28, 2023 , the Company had $ 795.7 million available under the ABL Line of Credit. The Company did not have any borrowings during Fiscal 2022. At February 3, 2024 , the Company had $ 708.8 million available under the ABL Line of Credit. The Company did no t have any borrowings during Fiscal 2023. Deferred Financing Costs The Company had $ 2.1 million and $ 2.8 million in deferred financing costs associated with its ABL Line of Credit as of February 3, 2024 and January 28, 2023 , respectively, which are recorded in the line item “Other assets” in the Company’s Consolidated Balance Sheets. In addition, the Company had $ 7.0 million and $ 7.4 million of deferred financing costs associated with its Term Loan Facility and Convertible Notes, recorded in the line item “Long term debt” in the Company’s Consolidated Balance Sheets as of February 3, 2024 and January 28, 2023, respectively. Amortization of deferred financing costs amounted to $ 3.2 million, $ 3.6 million and $ 5.3 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively, which was included in the line item “Interest expense” in the Company’s Consolidated Statements of Income. 57 Amortization expense related to deferred financing costs as of February 3, 2024 for each of the next five fiscal years and thereafter is estimated to be as follows: Fiscal Years (in thousands) 2024 $ 3,034 2025 2,387 2026 2,160 2027 1,384 2028 105 Thereafter — Total $ 9,070 Deferred financing costs have a weighted average amortization period of approximately 3.4 years. Scheduled Maturities Scheduled maturities of the Company’s long term debt obligations, as they exist as of February 3, 2024, in each of the next five fiscal years and thereafter are as follows: (in thousands) Total Debt Fiscal Years: 2024 $ 9,614 2025 165,769 2026 9,614 2027 306,683 2028 898,923 Thereafter — Total 1,390,603 Less: unamortized discount ( 4,024 ) Less: unamortized deferred financing costs ( 7,003 ) Finance lease liabilities 29,069 Total debt $ 1,408,645 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 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. 58 The Company has used 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 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 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 only has the one derivative mentioned above. Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivative 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 February 3, 2024 and January 28, 2023, 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 June 24, 2021, the Company terminated its 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 %. This derivative contract was designated as a cash flow hedge. During the second quarter of Fiscal 2023, the Company amended its interest rate swap to be based on SOFR rather than LIBOR, which resulted in an updated swap rate of 2.16 %. This amendment was covered under the guidance in ASU 2020-04, Reference Rate Reform (“ASC 848”) and did not impact the hedge accounting relationship. The amount of loss deferred for the previous interest rate swap was $ 26.9 million. The Company amortized this amount from accumulated other comprehensive income into interest expense over the original life of the previous interest rate swap, which had an original maturity date of December 29, 2023 . The current interest rate swap had a liability fair value at inception of $ 26.9 million. The Company is accreting this amount into accumulated other comprehensive income 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 2023, the Company’s derivative was 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 income” on the Company’s Consolidated Balance Sheets and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income 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 February 3, 2024 , the Company estimates that $ 15.4 million will be reclassified as a reduction to interest expense during the next twelve months. 59 As of February 3, 2024, the Company had the following outstanding interest rate derivative that was designated as a cash flow hedge 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 2.16 % 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 February 3, 2024 January 28, 2023 Derivatives Designated as Hedging Instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest rate swap contracts Other assets $ 29,075 Other assets $ 29,152 The following table presents the unrealized gains deferred to accumulated other comprehensive income 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: February 3, 2024 January 28, 2023 January 29, 2022 Unrealized gains, before taxes $ 14,243 $ 37,864 $ 10,914 Income tax expense ( 3,783 ) ( 10,138 ) ( 2,983 ) Unrealized gains, net of taxes $ 10,460 $ 27,726 $ 7,931 The following table presents information about the reclassification of losses from accumulated other comprehensive income 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: February 3, 2024 January 28, 2023 January 29, 2022 Interest (benefit) expense $ ( 7,749 ) $ 7,479 $ 14,608 Income tax expense (benefit) 2,074 ( 2,016 ) ( 3,965 ) Net reclassification into earnings $ ( 5,675 ) $ 5,463 $ 10,643 9. Capital Stock Common Stock As of February 3, 2024 , 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. 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 60 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 2023 , the Company acquired 62,894 shares of common stock from employees for approximately $ 11.3 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 February 16, 2022, the Company's Board of Directors authorized the repurchase of up to $ 500.0 million of common stock, which was authorized to be executed through February 2024 . As of the end of Fiscal 2023, the Company had $ 115.4 million remaining under this share repurchase authorization. On August 15, 2023, the Company's Board of Directors authorized the repurchase of up to an additional $ 500.0 million of common stock, which is authorized to be executed through August 2025 . As of the end of Fiscal 2023, the Company had $ 500.0 million remaining under this share repurchase authorization. These repurchase programs are funded using the Company’s available cash and borrowings under the ABL Line of Credit. During Fiscal 2023 , the Company repurchased 1,354,031 shares of common stock for $ 231.9 million under its share repurchase program. 10. Net Income Per Share Basic net income per share is calculated by dividing net income by the weighted-average number of common shares outstanding. Dilutive net income per share is calculated by dividing net income by the weighted-average number of common shares and potentially dilutive securities outstanding during the period using the treasury stock method for the Company’s stock option, 61 restricted stock and restricted stock unit awards, and the if-converted method for the 2025 Convertible Notes and 2027 Convertible Notes. (in thousands, except per share data) Fiscal Year Ended February 3, January 28, January 29, 2024 2023 2022 Basic net income per share Net income $ 339,649 $ 230,123 $ 408,839 Weighted average number of common shares – basic 64,672 65,637 66,588 Net income per common share – basic $ 5.25 $ 3.51 $ 6.14 Diluted net income per share Net income $ 339,649 $ 230,123 $ 408,839 Shares for basic and diluted net income per share: Weighted average number of common shares – basic 64,672 65,637 66,588 Assumed exercise of stock options and vesting of restricted stock 245 264 685 Assumed conversion of convertible debt — — 853 Weighted average number of common shares – diluted 64,917 65,901 68,126 Net income per common share – diluted $ 5.23 $ 3.49 $ 6.00 Approximately 1,524,000 shares, 1,068,000 shares and 177,000 shares were excluded from diluted net income per share for Fiscal 2023, Fiscal 2022 and Fiscal 2021 , respectively, since their effect was anti-dilutive. 11. Stock-Based Compensation On May 18, 2022, the Company's stockholders approved the Company's 2022 Omnibus Incentive Plan (the 2022 Plan). The 2022 Plan provides 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 February 3, 2024 , there were 5,214,963 shares of common stock available for issuance under the Company's 2022 Omnibus Incentive Plan. Non-cash stock compensation expense is as follows: (in thousands) Fiscal Year Ended February 3, January 28, January 29, Type of Non-Cash Stock Compensation 2024 2023 2022 Restricted stock unit grants (a) $ 43,037 $ 37,749 $ 30,525 Stock option grants (a) 19,502 19,274 18,909 Performance stock unit grants (a) 21,409 10,457 9,112 Total (b) $ 83,948 $ 67,480 $ 58,546 (a) Included in the line item “Selling, general and administrative expenses” in the Company’s Consolidated Statements of Income. (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 $ 15.5 million, $ 12.5 million and $ 10.3 million during Fiscal 2023, Fiscal 2022 and Fiscal 2021 , respectively. 62 Stock Options Options granted during Fiscal 2023, Fiscal 2022 and Fiscal 2021, were all service-based awards granted under the Plans at the following exercise prices: Exercise Price Ranges From To Fiscal 2023 $ 118.58 $ 234.15 Fiscal 2022 $ 115.65 $ 236.93 Fiscal 2021 $ 219.08 $ 342.03 All awards granted during Fiscal 2023, Fiscal 2022 and Fiscal 2021 generally 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 2023, Fiscal 2022 and Fiscal 2021 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 February 3, 2024, the Company had 1,356,258 options outstanding to purchase shares of common stock, and there was $ 37.3 million of unearned non-cash stock-based option compensation that the Company expects to recognize as expense over a weighted average period of 2.6 years. The awards are expensed on a straight-line basis over the requisite service period. Stock option transactions during Fiscal 2023 are summarized as follows: Number of Shares Weighted Average Exercise Price Per Share Options outstanding, January 28, 2023 1,218,101 $ 193.31 Options granted 372,885 184.75 Options exercised (a) ( 157,003 ) 119.64 Options forfeited ( 77,725 ) 220.99 Options outstanding, February 3, 2024 1,356,258 $ 197.90 (a) Options exercised during Fiscal 2023 had a total intrinsic value of $ 11.7 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 1,356,258 7.1 $ 197.90 $ 22.8 Options exercisable 676,270 5.7 $ 191.08 $ 16.0 63 During Fiscal 2023, 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 2023 was estimated using the following assumptions on a weighted average basis: Fiscal Year Ended February 3, 2024 Risk-free interest rate 3.5 % Expected volatility 41.9 % Expected life (years) 4.0 Contractual life (years) 10.0 Expected dividend yield 0 % Grant date fair value of options issued $ 68.72 The expected dividend yield was based on the Company’s expectation of not paying dividends in the near term. To evaluate its volatility factor, the Company uses the historical volatility of its stock price over the expected life of the options. 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. The expected life of the options was estimated using historical exercise rates. Restricted Stock Awards Restricted stock awards granted during Fiscal 2023 were all service-based awards. The fair value of each unit of restricted stock granted during Fiscal 2023 was based upon the closing price of the Company’s common stock on the grant date. Most of the awards outstanding as of February 3, 2024 have graded vesting provisions that generally vest in one-fourth annual increments (subject to continued employment through the applicable vesting date). Certain awards outstanding as of February 3, 2024 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. 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 February 3, 2024 , there was approximately $ 74.8 million of unearned non-cash stock-based compensation related to restricted stock awards that the Company expects to recognize as expense over a weighted average period of 2.4 years. The awards are expensed on a straight-line basis over the requisite service periods. Award grant, vesting and forfeiture transactions during Fiscal 2023 are summarized as follows: Number of Shares Weighted Average Grant Date Fair Value Per Award Non-vested awards outstanding, January 28, 2023 477,441 $ 222.90 Awards granted 306,405 183.25 Awards vested (a) ( 176,004 ) 212.14 Awards forfeited ( 36,890 ) 222.43 Non-vested awards outstanding, February 3, 2024 570,952 $ 204.97 (a) Restricted stock awards vested during Fiscal 2023 had a total intrinsic value of $ 30.8 million. Performance Share Units The Company grants performance-based restricted stock units to its senior executives. Vesting of the performance stock units granted in Fiscal 2021 is based on continued service and the achievement of pre-established adjusted EBIT margin expansion and sales compounded annual growth rate (CAGR) goals (each weighted equally) over a three-year performance period. Vesting of the performance stock units granted in Fiscal 2022 and Fiscal 2023 are based on continued service and the achievement of specified pre-established adjusted net income per share growth over a three-year performance period, as applicable for each grant. Based on the Company’s achievement of these goals, each award may be earned up to 200 % of the target award. In the event that actual 64 performance is below threshold, no award will be made. Compensation costs recognized on the performance stock units are adjusted, as applicable, for performance above or below the target specified in the award. As of February 3, 2024 , there was approximately $ 32.9 million of unearned non-cash stock-based compensation related to performance share units that the Company expects to recognize as expense over a weighted average period of 1.9 years. The awards are expensed on a straight-line basis over the requisite service periods. Performance share unit transactions during Fiscal 2023 are summarized as follows: Number of Shares Weighted Average Grant Date Fair Value Per Award Non-vested awards outstanding, January 28, 2023 196,300 $ 226.05 Awards granted 116,080 185.27 Awards vested (a) ( 29,017 ) 186.50 Awards forfeited ( 56,446 ) 197.72 Non-vested awards outstanding, February 3, 2024 226,917 $ 217.29 (a) Performance-based stock awards vested during Fiscal 2023 had a total intrinsic value of $ 5.9 million. 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. The following is a schedule of the Company’s future lease payments: (in thousands) Fiscal Year Operating Leases Finance Leases 2024 $ 586,885 $ 5,733 2025 593,102 3,604 2026 553,462 3,640 2027 512,571 3,640 2028 464,877 3,447 Thereafter 1,505,185 20,787 Total future minimum lease payments 4,216,082 40,851 Amount representing interest ( 819,893 ) ( 11,782 ) Total lease liabilities 3,396,189 29,069 Less: current portion of lease liabilities ( 411,395 ) ( 4,089 ) Total long term lease liabilities $ 2,984,794 $ 24,980 Weighted average discount rate 5.6 % 5.8 % Weighted average remaining lease term (years) 7.9 11.8 The above schedule excludes approximately $ 696.3 million for 84 stores and one warehouse that the Company has committed to open or relocate but has not yet taken possession of the space. 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. The Company has entered into a lease agreement for a new distribution center in Ellabell, GA, which is expected to commence in May 2025. The Company does not have control of the asset during construction, but it is involved in the design and construction of the related asset. Additionally, the lease agreement has a purchase option, which can be exercised beginning after the earlier of (a) substantial completion of construction or (b) the date the Company commences business operations in the premises. 65 The following is a schedule of net lease costs for the years indicated: (in thousands) Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Finance lease cost: Amortization of finance lease asset (a) $ 3,506 $ 4,210 $ 4,554 Interest on lease liabilities (b) 1,858 2,561 3,111 Operating lease cost (c) 587,214 523,980 468,349 Variable lease cost (c) 235,223 205,876 188,035 Total lease cost 827,801 736,627 664,049 Less all rental income (d) ( 5,733 ) ( 5,650 ) ( 5,771 ) Total net rent expense (e) $ 822,068 $ 730,977 $ 658,278 (a) Included in the line item “Depreciation and amortization” in the Company’s Consolidated Statements of Income. (b) Included in the line item “Interest expense” in the Company’s Consolidated Statements of Income. (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. (d) Included in the line item “Other revenue” in the Company’s Consolidated Statements of Income. (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 February 3, 2024 January 28, 2023 January 29, 2022 Cash paid for amounts included in the measurement of lease liabilities: Cash payments arising from operating lease liabilities (a) $ 595,028 $ 525,098 $ 509,971 Cash payments for the principal portion of finance lease liabilities (b) $ 4,378 $ 4,455 $ 4,073 Cash payments for the interest portion of finance lease liabilities (a) $ 1,858 $ 2,561 $ 3,111 Supplemental non-cash information: Operating lease liabilities arising from obtaining right-of-use assets $ 611,569 $ 712,688 $ 516,545 (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 $ 15.6 million, $ 15.6 million and $ 11.4 million of 401(k) Plan match expense during Fiscal 2023, Fiscal 2022 and Fiscal 2021 respectively, which is included in the line item “Selling, general and administrative expenses” on the Company’s Consolidated Statements of Income. 14. Income Taxes Income before income taxes was as follows for Fiscal 2023, Fiscal 2022 and Fiscal 2021: (in thousands) Year Ended February 3 2024 January 28, 2023 January 29, 2022 Domestic $ 454,491 $ 297,440 $ 533,906 Foreign 11,282 10,069 11,392 Total income (loss) before income taxes $ 465,773 $ 307,509 $ 545,298 66 Income tax expense (benefit) was as follows for Fiscal 2023, Fiscal 2022 and Fiscal 2021: (in thousands) Year Ended February 3 2024 January 28, 2023 January 29, 2022 Current: Federal $ 85,834 $ 86,299 $ 69,146 State 16,150 13,494 11,546 Foreign 3,477 3,024 3,815 Subtotal 105,461 102,817 84,507 Deferred: Federal 12,583 ( 28,980 ) 32,217 State 7,311 2,796 19,272 Foreign 769 753 463 Subtotal 20,663 ( 25,431 ) 51,952 Total income tax expense (benefit) $ 126,124 $ 77,386 $ 136,459 The tax rate reconciliations were as follows for Fiscal 2023, Fiscal 2022 and Fiscal 2021: Fiscal Year Ended February 3 2024 January 28, 2023 January 29, 2022 Tax at statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 4.5 5.3 4.0 Excess tax benefit from stock compensation 0.2 ( 0.2 ) ( 4.8 ) Tax credits ( 1.2 ) ( 2.2 ) ( 1.6 ) Non-deductible expenses 1.7 2.1 2.0 Loss from extinguishment of convertible debt 1.8 0.9 4.4 Other ( 0.9 ) ( 1.7 ) — Effective tax rate 27.1 % 25.2 % 25.0 % The tax effects of temporary differences are included in deferred tax accounts as follows: (in thousands) February 3, 2024 January 28, 2023 Tax Assets Tax Liabilities Tax Assets Tax Liabilities Non-current deferred tax assets and liabilities: Property and equipment basis adjustments $ — $ 236,711 $ — $ 231,426 Operating lease liability 872,903 — 830,029 — Operating lease asset — 805,610 — 764,446 Intangibles—indefinite-lived — 63,892 — 63,871 Employee benefit compensation 27,194 — 21,303 — State net operating losses (net of federal benefit) 5,726 — 11,323 — Tax credits 10,774 — 11,132 — Other — 24,116 — 3,770 Valuation allowance ( 11,425 ) — ( 13,060 ) — Total non-current deferred tax assets and liabilities $ 905,172 $ 1,130,329 $ 860,727 $ 1,063,513 Net deferred tax liability $ 225,157 $ 202,786 As of February 3, 2024 , the Company has a deferred tax asset related to net operating losses of $ 5.7 million, inclusive of $ 5.4 million of state net operating losses which will expire at various dates between 2024 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 February 3, 2024 , the Company had tax credit carry-forwards of $ 10.8 million, inclusive of state tax credit carry-forwards of $ 10.4 million that will begin to expire in 2024 and $ 0.4 million of Puerto Rico alternative minimum tax (AMT) credits that have an indefinite life . 67 As of January 28, 2023 , the Company had a deferred tax asset related to net operating losses of $ 11.3 million, inclusive of $ 11.0 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 28, 2023 , the Company had tax credit carry-forwards of $ 11.1 million, inclusive of state tax credit carry-forwards of $ 10.4 million, and $ 0.7 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 $ 1.3 million on state net operating losses and $ 9.8 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 February 3, 2024 will be recorded to the Company’s Consolidated Statement of Income. As of January 28, 2023 , the Company provided a total valuation allowance of $ 13.1 million, inclusive of $ 3.3 million of valuation allowance related to state net operating losses, $ 9.5 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 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 Additions for tax positions of the current year — Additions for tax positions of prior years — Reduction for tax positions of prior years ( 782 ) Settlements — Lapse of statute of limitations ( 72 ) Balance at January 28, 2023 3,933 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 ( 18 ) Balance at February 3, 2024 $ 3,132 As of February 3, 2024 , the Company reported total unrecognized benefits of $ 3.1 million, of which $ 2.5 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 $ 0.8 million of interest and penalties during Fiscal 2023 in the line item “Income tax expense” in the Company’s Consolidated Statements of Income. Cumulative interest and penalties of $ 7.0 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheet as of February 3, 2024. 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. As of January 28, 2023 , the Company reported total unrecognized benefits of $ 3.9 million, of which $ 3.1 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 $ 0.9 million of interest and penalties during Fiscal 2022 in the line item “Income tax expense” in the Company’s Consolidated Statements of Income. Cumulative interest and penalties of $ 8.0 million are recorded in the line item “Other liabilities” in the Company’s Consolidated Balance Sheets as of January 28, 2023. 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 2020 through 2023 . The Company or its 68 subsidiaries’ state and Puerto Rico income tax returns are open to audit for Fiscal Years 2019 through 2023 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 swap contract. Refer to Note 6, “Impairment Charges,” for further discussion regarding the fair value of the Company's long-lived assets after impairment. Financial Assets The fair values of the Company’s financial assets and the hierarchy of the level of inputs as of February 3, 2024 and January 28, 2023 are summarized below: (in thousands) Fair Value Measurements at February 3, January 28, 2024 2023 Level 1 Cash equivalents (including restricted cash equivalents) $ 657,292 $ 548,986 Financial Liabilities The fair values of the Company’s financial liabilities are summarized below: (in thousands) February 3, 2024 January 28, 2023 Principal Amount Fair Value Principal Amount Fair Value Term B-6 Loans $ 937,379 $ 934,450 $ 946,994 $ 938,708 2025 Convertible Notes 156,155 169,384 507,687 619,409 2027 Convertible Notes 297,069 342,384 — — ABL Line of Credit (a) — — — — Total debt (b) $ 1,390,603 $ 1,446,218 $ 1,454,681 $ 1,558,117 69 (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 its short term nature. (b) The table above excludes finance lease obligations, debt discount and deferred debt 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 In the course of business, the Company is party to class or collective actions alleging violations of federal and state wage and hour and other labor statutes, representative claims under the California Private Attorneys’ General Act and various other lawsuits and regulatory proceedings from time to time including, among others, commercial, product, 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 $ 75.8 million and $ 51.1 million as of February 3, 2024 and January 28, 2023, respectively. Letters of credit outstanding as of February 3, 2024 and January 28, 2023 amounted to $ 75.8 million and $ 47.4 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 $ 3.7 million at January 28, 2023 , related to certain merchandising agreements, and none at February 3, 2024 . Based on the terms of the agreement governing the ABL Line of Credit, the Company had the ability to enter into letters of credit up to $ 174.2 million and $ 98.9 million as of February 3, 2024 and January 28, 2023, respectively. Inventory Purchase Commitments The Company had $ 1,304.5 million of purchase commitments related to goods that were not received as of February 3, 2024. 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. 70 Schedule I CONDENSED FINANCIAL INFORMATION OF REGISTRANT Parent Company Information Burlington Stores, Inc. Condensed Statements of Income and Comprehensive Income Fiscal Years Ended February 3, 2024 January 28, 2023 January 29, 2022 (in thousands) REVENUES: Total revenue $ — $ — $ — COSTS AND EXPENSES: Interest expense, net — — — Total costs and expenses — — — Income before provision for income tax — — — Provision for income tax — — — Earnings from equity investment, net of income taxes $ 339,649 $ 230,123 $ 408,839 Net income $ 339,649 $ 230,123 $ 408,839 Other comprehensive income, net of tax: Interest rate derivative contracts: Net unrealized gains arising during the period 10,460 27,726 7,931 Net reclassification into earnings during the period ( 5,675 ) 5,463 10,643 Total comprehensive income $ 344,434 $ 263,312 $ 427,413 See Notes to Condensed Financial Statements 71 CONDENSED FINANCIAL INFORMATION OF REGISTRANT Parent Company Information Burlington Stores, Inc. Condensed Balance Sheets As of February 3, 2024 January 28, 2023 (in thousands) ASSETS: Cash and cash equivalents $ 50 $ 192 Total current assets 50 192 Investment in subsidiaries 1,444,273 1,296,408 Total assets $ 1,444,323 $ 1,296,600 LIABILITIES AND STOCKHOLDERS’ EQUITY: Current liabilities $ — $ — Long term debt 447,391 501,695 Commitments and contingencies Total stockholders’ equity 996,932 794,905 Total liabilities and stockholders’ equity $ 1,444,323 $ 1,296,600 See Notes to Condensed Financial Statements 72 CONDENSED FINANCIAL INFORMATION OF REGISTRANT Parent Company Information Burlington Stores, Inc. Condensed Statements of Cash Flows Fiscal Years Ended February 3, 2024 January 28, 2023 January 29, 2022 (in thousands) OPERATING ACTIVITIES: Net cash provided by operating activities $ — $ — $ — INVESTING ACTIVITIES: Net contribution from subsidiaries 313,713 374,233 428,888 Net cash provided by investing activities 313,713 374,233 428,888 FINANCING ACTIVITIES: Proceeds from long term debt - 2027 Convertible Notes 297,069 — — Principal payment on long term debt— 2025 Convertible Notes ( 386,519 ) ( 78,240 ) ( 201,695 ) Purchase of treasury shares ( 243,188 ) ( 316,896 ) ( 266,628 ) Proceeds from stock option exercises 18,783 20,592 39,887 Net cash used in financing activities ( 313,855 ) ( 374,544 ) ( 428,436 ) (Decrease) increase in cash and cash equivalents ( 142 ) ( 311 ) 452 Cash and cash equivalents at beginning of period 192 503 51 Cash and cash equivalents at end of period $ 50 $ 192 $ 503 See Notes to Condensed Financial Statements 73 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. Capitalized terms not otherwise defined in this Schedule I shall have the meanings ascribed to them in the Notes to Consolidated Financial Statements. 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's 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 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. Other than debt related costs, the Parent Company incurs certain corporate costs which are borne by the Parent Company’s subsidiaries. Such costs are not significant. These parent-only financials statements are not the general-purpose financial statements of Burlington Stores, Inc., and they 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 $ 83.9 million, $ 67.5 million and $ 58.5 million has been pushed down to Parent Company’s subsidiaries for Fiscal 2023, Fiscal 2022 and Fiscal 2021, respectively. Note 4. Long Term Debt On April 16, 2020, the Parent Company issued $ 805.0 million of 2025 Convertible Notes. The 2025 Convertible Notes have an initial conversion rate of 4.5418 shares per $ 1,000 principal amount of 2025 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 2025 Convertible Notes are general unsecured obligations of the Parent Company. The 2025 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 2025 Convertible Notes will mature on April 15, 2025 , unless earlier converted, redeemed or repurchased. During the second half of Fiscal 2021, the Parent Company entered into separate, privately negotiated exchange agreements with certain holders of the 2025 Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 232.7 million in aggregate principal amount of 2025 Convertible Notes held by them for a combination of an aggregate of $ 199.8 million in cash and 513,991 shares of the Company's common stock. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 124.6 million. During the first quarter of Fiscal 2022, the Parent Company entered into separate, privately negotiated exchange agreements with certain holders of the 2025 Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 64.6 million in aggregate principal amount of 2025 Convertible Notes held by them for $ 78.2 million in cash. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 14.7 million. 74 During the first quarter of Fiscal 2023, the Parent Company entered into separate, privately negotiated exchange agreements with certain holders of the 2025 Convertible Notes. Under the terms of the exchange agreements, the holders exchanged $ 110.3 million in aggregate principal amount of 2025 Convertible Notes held by them for $ 133.3 million in cash. These exchanges resulted in aggregate pre-tax debt extinguishment charges of $ 24.6 million. On September 12, 2023, the Parent Company closed the issuance of approximately $ 297.1 million aggregate principal amount of our 2027 Convertible Notes pursuant to separate, privately negotiated exchange and subscription agreements with a limited number of holders of our 2025 Convertible Notes and certain investors, in each case pursuant to exemptions from registration under the Securities Act of 1933. The Parent Company exchanged approximately $ 241.2 million in aggregate principal amount of the 2025 Convertible Notes for approximately $ 255.0 million in aggregate principal amount of the 2027 Convertible Notes. The Parent Company also issued approximately $ 42.1 million in aggregate principal amount of 2027 Convertible Notes in a private placement to certain investors. An aggregate of up to 1,422,568 shares of common stock may be issued upon conversion of the 2027 Convertible Notes, which number is subject to adjustment up to an aggregate of 1,911,372 shares following certain corporate events that occur prior to the maturity date or if we issue a notice of redemption, and which is also subject to certain anti-dilution adjustments. The 2027 Convertible Notes bear interest at a rate of 1.25 % per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023 . The 2027 Convertible Notes will mature on December 15, 2027 , unless earlier converted, redeemed or repurchased. BCFWC and Burlington Merchandising Corporation, a Delaware corporation, wholly owned subsidiaries of the Company, have entered into a promissory note, in which they jointly and severally have promised to pay to the Parent an amount equal to the principal of the 2025 Convertible Notes and 2027 Convertible Notes. In connection with the promissory note, there was a $ 453.2 million and $ 507.7 million intercompany note receivable as of February 3, 2024 and January 28, 2023, respectively, related to the cash transferred to Parent subsidiaries for the Convertible Notes, which is included in the line item "Investment in subsidiaries" in the Condensed Balance Sheets. The interest rate and repayment terms of the intercompany note receivable are consistent with that of the 2025 Convertible Notes and 2027 Convertible Notes. Included in the Condensed Statements of Income and Comprehensive Income is the following for each of the periods indicated: (in thousands) Fiscal Year Ended February 3, 2024 January 28, 2023 January 29, 2022 Convertible notes interest expense $ ( 10,875 ) $ ( 14,281 ) $ ( 20,055 ) Intercompany note receivable interest expense 10,875 14,281 20,055 Loss on extinguishment of convertible notes ( 38,274 ) ( 14,657 ) ( 124,639 ) Gain on extinguishment of intercompany note receivable 38,274 14,657 124,639 Interest expense, net $ — $ — $ — Refer also to Note 7 to the Consolidated financial statements. Note 5. Capital Stock Treasury Stock The Parent Company accounts for treasury stock under the cost method. During Fiscal 2023 , the Parent Company acquired 62,894 shares of common stock from employees for approximately $ 11.3 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 February 16, 2022, the Parent Company's Board of Directors authorized the repurchase of up to an additional $ 500.0 million of common stock, which was authorized to be executed through February 2024. As of the end of Fiscal 2023, the Parent Company had $ 115.4 million remaining under this share repurchase authorization. 75 On August 15, 2023, the Parent Company's Board of Directors authorized the repurchase of up to an additional $ 500 million of common stock, which is authorized to be executed through August 2025. As of the end of Fiscal 2023, the Parent Company had $ 500.0 million remaining under this share repurchase authorization. During Fiscal 2023 , the Parent Company repurchased 1,354,031 shares of common stock for $ 231.9 million under its share repurchase program. 76 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 February 3, 2024 Allowance for doubtful accounts $ 1,252 $ 1,209 $ — $ 148 $ 2,313 Valuation allowances on deferred tax assets $ 13,060 $ — $ ( 1,635 ) $ — $ 11,425 Year ended January 28, 2023 Allowance for doubtful accounts $ 3,305 $ 291 $ — $ 2,344 $ 1,252 Valuation allowances on deferred tax assets $ 12,864 $ — $ 196 $ — $ 13,060 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 Notes: (1) Amounts related to valuation allowances on deferred taxes are charged to income tax expense. (2) Actual allowances. 77 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, February 3, 2024. 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 February 3, 2024. 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 February 3, 2024. 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 February 3, 2024, 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 February 3, 2024, 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 2023, 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. 78 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 February 3, 2024 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 February 3, 2024, 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 February 3, 2024, of the Company and our report dated March 15, 2024 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 Morristown, New Jersey March 15, 2024 79 80 Item 9B. Other Information. During the fiscal quarter ended February 3, 2024, no director or officer of the Company adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K. 81 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 2024 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 2023 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 (excluding the information under the subheading "Pay Versus Performance") 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 Person 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” in the Proxy Statement, which information is incorporated herein by reference. 82 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 41 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 71 . Schedule II—Valuation and Qualifying Accounts filed as part of this Annual Report is set forth on page 77 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. Quarterly Report on Form 10-Q November 22, 2022 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 4.3 Indenture, dated as of September 12, 2023, between the Company and Wilmington Trust, National Association, as trustee (including form of 1.25% Convertible Senior Notes due 2027) Current Report on Form 8-K September 18, 2023 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 83 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 10.1.10 Amendment No. 10, dated as of May 11, 2023, 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. Quarterly Report on Form 10-Q May 25, 2023 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 10.2.1 First Amendment to Second Amended and Restated Credit Agreement, dated August 13, 2014, by and among Current Report on Form 8-K August 18, 2014 84 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. 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 10.2.6 Fourth Amendment to Second Amended and Restated Credit Agreement, dated as of July 20, 2022, 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 July 22, 2022 10.2.7 Fifth Amendment to Second Amended and Restated Credit Agreement, dated as of June 26, 2023, 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. Quarterly Report on Form 10-Q August 24, 2023 10.3 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 10.4 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 10.5 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 10.6 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 Registration Statement on Form S-4 October 10, 2006 85 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. 10.7+ 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 10.7.1+ 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 10.7.2+ 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 10.8+ 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 10.9+ Employment Agreement dated May 24, 2022 by and between Burlington Stores, Inc. and Kristin Wolfe. Current Report on Form 8-K May 26, 2022 10.10+ Form of Directors and Officers Indemnification Agreement. Registration Statement on Form S-1/A September 10, 2013 10.11+ Burlington Stores, Inc. 2013 Omnibus Incentive Plan, as amended and restated May 17, 2017. Current Report on Form 8-K May 22, 2017 10.12+ Burlington Stores, Inc. 2022 Omnibus Incentive Plan Current Report on Form 8-K May 24, 2022 10.13+ 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 10.14+ 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 10.15+ 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 2019). Quarterly Report on Form 10-Q June 3, 2019 10.16+ 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 10.17+ 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 86 10.18+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and Kristin Wolfe pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for Make-Whole RSU Award). Current Report on Form 8-K May 26, 2022 10.19+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and Kristin Wolfe pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for Make-Whole Option Award). Current Report on Form 8-K May 26, 2022 10.20+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan. Quarterly Report on Form 10-Q August 25, 2022 10.21+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for grants made to certain merchandising and planning associates). Quarterly Report on Form 10-Q August 25, 2022 10.22+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan. Quarterly Report on Form 10-Q August 25, 2022 10.23+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for grants made to certain merchandising and planning associates). Quarterly Report on Form 10-Q August 25, 2022 10.24+ Form of Performance-Based Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan. Quarterly Report on Form 10-Q August 25, 2022 10.25+ Form of Performance-Based Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for grants made to certain merchandising and planning associates). Quarterly Report on Form 10-Q August 25, 2022 10.26+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for special grants made to certain merchandising and planning associates). Quarterly Report on Form 10-Q August 25, 2022 10.27+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for special grants made to certain merchandising and planning associates). Quarterly Report on Form 10-Q August 25, 2022 10.28+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for special grants made to all other associates). Quarterly Report on Form 10-Q August 25, 2022 10.29+ Form of Stock Option Award Notice and Agreement between Burlington Stores, Inc. and award recipients pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan (for special grants made to all other associates). Quarterly Report on Form 10-Q August 25, 2022 10.30+ Form of Restricted Stock Unit Award Notice and Agreement between Burlington Stores, Inc. and Quarterly Report on Form 10-Q August 25, 2022 87 non-employee directors pursuant to the Burlington Stores, Inc. 2022 Omnibus Incentive Plan. 10.31 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 10.32 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 10.33 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 10.34 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 10.35+ 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 10.36+ 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 10.37+ 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 10.38+ 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 10.39+ Burlington Stores, Inc. Executive Severance Plan (Merchandising & Planning) (Effective March 26, 2021). Quarterly Report on Form 10-Q May 27, 2021 10.40+ Burlington Stores, Inc. Executive Severance Plan (Amended and Restated Effective March 26, 2021). Quarterly Report on Form 10-Q May 27, 2021 10.41+ Employment Agreement dated July 12, 2021 by and between Burlington Stores, Inc. and Travis Marquette. Current Report on Form 8-K July 15, 2021 88 10.42+ 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 10.43+ 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 10.44+ Offer Letter with Michael Allison dated March 9, 2021. Annual Report on Form 10-K March 16, 2022 10.45+ 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). Annual Report on Form 10-K March 16, 2022 10.46+ 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). Annual Report on Form 10-K March 16, 2022 10.47+ 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). Annual Report on Form 10-K March 16, 2022 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. 97.1† Burlington Stores, Inc. Policy on Recoupment of Incentive Compensation 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 101.DEF† Inline XBRL Taxonomy Extension Definition Linkbase Document 89 101.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. 90 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 15, 2024 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 15 th day of March 2024. Signature Title /s/ Michael O’Sullivan Chief Executive Officer and Director (Principal Executive Officer) Michael O’Sullivan /s/ Kristin Wolfe Chief Financial Officer (Principal Financial Officer) Kristin Wolfe /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 91