##### Table of Contents







UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q





QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended
April 30, 2011

Commission file number 333-168515





LOGO

Toys R Us Property Company II, LLC

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 37-1512919                          
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification Number)
|                                                               | 
|One Geoffrey Way Wayne, New Jersey                             |  | 07470                               
|(Address of principal executive offices)                       |  | (Zip code)                          

(973)
617-3500

(Registrants telephone number, including area code)





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

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

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



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

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

As of
June 14, 2011, all of our outstanding membership interests were privately held by our sole member, Giraffe Junior Holdings, LLC.









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##### Table of Contents

TOYS R US PROPERTY COMPANY II, LLC

TABLE OF CONTENTS



|                                                                                                                 |  |     
|---------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                                 |  | PAGE
|PART 1  FINANCIAL INFORMATION                                                                                   |  |     
|                                                                                                                 | 
|Item 1. Financial Statements (Unaudited)                                                                         |  |     
|                                                                                                                 | 
|Condensed Balance Sheets as of April 30, 2011 and January 29, 2011                                               |  | 1   
|                                                                                                                 | 
|Condensed Statements of Operations for the thirteen weeks ended April 30, 2011 and May 1,
2010                   |  | 2   
|                                                                                                                 | 
|Condensed Statements of Cash Flows for the thirteen weeks ended April 30, 2011 and May 1,
2010                   |  | 3   
|                                                                                                                 | 
|Condensed Statements of Changes in Members Deficit for the thirteen weeks ended April 
30, 2011 and May 1, 2010 |  | 4   
|                                                                                                                 | 
|Notes to Condensed Financial Statements                                                                          |  | 5   
|                                                                                                                 | 
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations                    |  | 7   
|                                                                                                                 | 
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                                               |  | 10  
|                                                                                                                 | 
|Item 4. Controls and Procedures                                                                                  |  | 10  
|                                                                                                                 | 
|PART II  OTHER INFORMATION                                                                                      |  |     
|                                                                                                                 | 
|Item 1. Legal Proceedings                                                                                        |  | 11  
|                                                                                                                 | 
|Item 1A. Risk Factors                                                                                            |  | 11  
|                                                                                                                 | 
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                              |  | 11  
|                                                                                                                 | 
|Item 3. Defaults Upon Senior Securities                                                                          |  | 11  
|                                                                                                                 | 
|Item 4. (Removed and Reserved)                                                                                   |  | 11  
|                                                                                                                 | 
|Item 5. Other Information                                                                                        |  | 11  
|                                                                                                                 | 
|Item 6. Exhibits                                                                                                 |  | 11  
|                                                                                                                 | 
|SIGNATURE                                                                                                        |  | 12  
|                                                                                                                 | 
|INDEX TO EXHIBITS                                                                                                |  | 13  



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##### Table of Contents

PART 1  FINANCIAL INFORMATION

|Item 1. | Financial Statements
|------- | --------------------

TOYS R  US PROPERTY COMPANY II, LLC

CONDENSED BALANCE SHEETS

(Unaudited)



|                                               |  |               |                  |  |                 |  |                    | 
|---------------------------------------------- |  | ------------- | ---------------- |  | --------------- |  | ------------------ | 
|(In thousands)                                 |  | April 30,2011 |                  |  | January 29,2011 | 
|ASSETS                                         |  |               |                  |  |                 |  |                    | 
|Current Assets:                                |  |               |                  |  |                 |  |                    | 
|Cash                                           |  |               | $        25,995  |  |                 |  | $        10,419    | 
|Prepaid expenses                               |  |               | 1,472            |  |                 |  | 1,446              | 
|Due from affiliate, net                        |  |               | 4,474            |  |                 |  | 4,091              | 
|                                               |  |               |                  |  |                 |  |                    | 
|Total current assets                           |  |               | 31,941           |  |                 |  | 15,956             | 
|Real Estate, Net:                              |  |               |                  |  |                 |  |                    | 
|Land                                           |  |               | 169,937          |  |                 |  | 169,937            | 
|Buildings, net                                 |  |               | 170,576          |  |                 |  | 171,935            | 
|Leasehold improvements, net                    |  |               | 51,165           |  |                 |  | 52,827             | 
|                                               |  |               |                  |  |                 |  |                    | 
|Total real estate, net                         |  |               | 391,678          |  |                 |  | 394,699            | 
|Straight-line rent receivable from affiliate   |  |               | 47,814           |  |                 |  | 44,493             | 
|Debt issuance costs                            |  |               | 23,765           |  |                 |  | 24,674             | 
|                                               |  |               |                  |  |                 |  |                    | 
|                                               |  |               | $        495,198 |  |                 |  | $        479,822   | 
|                                               |  |               |                  |  |                 |  |                    | 
|LIABILITIES AND MEMBERS DEFICIT               |  |               |                  |  |                 |  |                    | 
|Current Liabilities:                           |  |               |                  |  |                 |  |                    | 
|Real estate taxes payable                      |  |               | $5,629           |  |                 |  | $            5,425 | 
|Accrued interest and other current liabilities |  |               | 25,845           |  |                 |  | 10,300             | 
|Deferred related party revenue                 |  |               | -                |  |                 |  | 486                | 
|                                               |  |               |                  |  |                 |  |                    | 
|Total current liabilities                      |  |               | 31,474           |  |                 |  | 16,211             | 
|Deferred third party rent liabilities          |  |               | 13,958           |  |                 |  | 13,800             | 
|Long-term debt                                 |  |               | 716,070          |  |                 |  | 715,821            | 
|Member's deficit                               |  |               | (266,304)        |  |                 |  | (266,010)          | 
|                                               |  |               |                  |  |                 |  |                    | 
|                                               |  |               | $        495,198 |  |                 |  | $        479,822   | 
|                                               |  |               |                  |  |                 |  |                    | 

See accompanying notes to Condensed Financial Statements.



1



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TOYS R  US PROPERTY COMPANY II, LLC

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)



|                                 |  |                |                  |  |            |  |                  | 
|-------------------------------- |  | -------------- | ---------------- |  | ---------- |  | ---------------- | 
|                                 |  | 13 Weeks Ended |                 
|(In thousands)                   |  | April 30,2011  |                  |  | May 1,2010 | 
|Rental revenues:                 |  |                |                  |  |            |  |                  | 
|Base rents                       |  |                | $        27,174  |  |            |  | $        26,562  | 
|Tenant reimbursements            |  |                | 3,402            |  |            |  | 3,332            | 
|                                 |  |                |                  |  |            |  |                  | 
|Total revenues                   |  |                | 30,576           |  |            |  | 29,894           | 
|                                 |  |               
|Depreciation                     |  |                | 3,021            |  |            |  | 3,062            | 
|Common area maintenance expenses |  |                | 3,402            |  |            |  | 3,332            | 
|Rental expense                   |  |                | 816              |  |            |  | 761              | 
|Other operating expenses         |  |                | 416              |  |            |  | 419              | 
|                                 |  |                |                  |  |            |  |                  | 
|Total operating expenses         |  |                | 7,655            |  |            |  | 7,574            | 
|                                 |  |                |                  |  |            |  |                  | 
|                                 |  |               
|Operating earnings               |  |                | 22,921           |  |            |  | 22,320           | 
|                                 |  |               
|Interest expense                 |  |                | 16,564           |  |            |  | 16,554           | 
|                                 |  |                |                  |  |            |  |                  | 
|                                 |  |               
|Net earnings                     |  |                | $          6,357 |  |            |  | $          5,766 | 
|                                 |  |                |                  |  |            |  |                  | 

See accompanying notes to Condensed Financial Statements.



2



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TOYS R US PROPERTY COMPANY II, LLC

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                       |  |                |                 |  |            |  |                 | 
|-------------------------------------------------------------------------------------- |  | -------------- | --------------- |  | ---------- |  | --------------- | 
|                                                                                       |  | 13 Weeks Ended |                
|(In thousands)                                                                         |  | April 30,2011  |                 |  | May 1,2010 | 
|Cash Flows from Operating Activities:                                                  |  |                |                 |  |            |  |                 | 
|Net earnings                                                                           |  |                | $        6,357  |  |            |  | $        5,766  | 
|Adjustments to reconcile Net earnings to net cash provided by operating activities:    |  |                |                 |  |            |  |                 | 
|Depreciation                                                                           |  |                | 3,021           |  |            |  | 3,062           | 
|Amortization of debt issuance costs                                                    |  |                | 909             |  |            |  | 882             | 
|Amortization of original issue discount                                                |  |                | 249             |  |            |  | 249             | 
|Changes in operating assets and liabilities:                                           |  |                |                 |  |            |  |                 | 
|Prepaid expenses and due from affiliate, net                                           |  |                | (409)           |  |            |  | (754)           | 
|Straight-line rent receivable from affiliate and deferred third party rent liabilities |  |                | (3,163)         |  |            |  | (3,173)         | 
|Real estate taxes payable and accrued interest and other current liabilities           |  |                | 15,749          |  |            |  | 14,474          | 
|Deferred related party revenue                                                         |  |                | (486)           |  |            |  | (243)           | 
|                                                                                       |  |                |                 |  |            |  |                 | 
|Net cash provided by operating activities                                              |  |                | 22,227          |  |            |  | 20,263          | 
|                                                                                       |  |                |                 |  |            |  |                 | 
|                                                                                       |  |               
|Cash Flows from Financing Activities:                                                  |  |                |                 |  |            |  |                 | 
|Distributions                                                                          |  |                | (6,651)         |  |            |  |                | 
|Capital contributions                                                                  |  |                |                |  |            |  | 1,203           | 
|Capitalized debt issuance/extension costs                                              |  |                |                |  |            |  | (80)            | 
|                                                                                       |  |                |                 |  |            |  |                 | 
|Net cash (used in) provided by financing activities                                    |  |                | (6,651)         |  |            |  | 1,123           | 
|                                                                                       |  |                |                 |  |            |  |                 | 
|                                                                                       |  |               
|Cash:                                                                                  |  |                |                 |  |            |  |                 | 
|Net increase during period                                                             |  |                | 15,576          |  |            |  | 21,386          | 
|Cash at beginning of period                                                            |  |                | 10,419          |  |            |  | 13,741          | 
|                                                                                       |  |                |                 |  |            |  |                 | 
|Cash at end of period                                                                  |  |                | $        25,995 |  |            |  | $        35,127 | 
|                                                                                       |  |                |                 |  |            |  |                 | 

See accompanying notes to Condensed Financial Statements.



3



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TOYS R US PROPERTY COMPANY II, LLC

CONDENSED STATEMENTS OF CHANGES IN MEMBERS DEFICIT

(Unaudited)



|                            |  |                  |                    | 
|--------------------------- |  | ---------------- | ------------------ | 
|(In thousands)              |  | Member's Deficit |                   
|                            | 
|Balance, January 30, 2010   |  |                  | $        (260,666) | 
|                            | 
|Net earnings for the period |  |                  | 5,766              | 
|                            | 
|Capital contributions       |  |                  | 1,203              | 
|                            |  |                  |                    | 
|Balance, May 1, 2010        |  |                  | $        (253,697) | 
|                            |  |                  |                    | 
|                            | 
|Balance, January 29, 2011   |  |                  | $        (266,010) | 
|                            | 
|Net earnings for the period |  |                  | 6,357              | 
|                            | 
|Distributions               |  |                  | (6,651)            | 
|                            |  |                  |                    | 
|Balance, April 30, 2011     |  |                  | $        (266,304) | 
|                            |  |                  |                    | 

See accompanying notes to Condensed Financial Statements.



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TOYS R US PROPERTY COMPANY II, LLC

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of presentation

As used herein, the Company, we, us, or our means Toys R Us Property Company II, LLC
(TRU Propco II), except as expressly indicated or unless the context otherwise requires. TRU Propco II was formed on July 21, 2005 as part of a legal reorganization of the businesses of Toys R Us, Inc. (TRU).
TRU owns or licenses Toys R Us and Babies R Us stores in the United States and foreign countries and jurisdictions. We are ultimately owned by TRU through our indirect parent, Toys R Us-Delaware, Inc.
(Toys-Delaware), to whom we lease or sublease substantially all of our properties and from whom we derive substantially all of our revenues and cash flows.

As a result of the reorganization, the Company received, as contributions from Toys-Delaware and other affiliates, certain properties which we now lease to Toys-Delaware. As the reorganization was between
entities under common control, the net assets transferred were recorded at their carrying value.

The Condensed Balance Sheets as of
April 30, 2011 and January 29, 2011, the Condensed Statements of Operations, the Condensed Statements of Cash Flows and the Condensed Statements of Changes in Members Deficit for the thirteen weeks ended April 30, 2011 and
May 1, 2010, have been prepared by us in conformity with accounting principles generally accepted in the United States of America (GAAP) for interim reporting, and in accordance with the requirements of this Quarterly Report on Form
10-Q. Our interim Condensed Financial Statements are unaudited and are subject to year-end adjustments. In the opinion of management, the financial statements include all known adjustments (which consist primarily of normal, recurring accruals,
estimates and assumptions that impact the financial statements) necessary to present fairly the financial position at the balance sheet dates and the results of operations for the thirteen weeks then ended. The Condensed Balance Sheet at
January 29, 2011, presented herein, has been derived from our audited balance sheet included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011, but does not include all disclosures required by GAAP. These
financial statements should be read in conjunction with the financial statements and footnotes thereto included within our Annual Report on Form 10-K for the fiscal year ended January 29, 2011. The results of operations for the thirteen weeks
ended April 30, 2011 and May 1, 2010 are not necessarily indicative of operating results for the full year.

Prior Period
Correction

We have corrected the Condensed Balance Sheet previously reported as of May 1, 2010 to reflect certain related party
reimbursements and third party liabilities, since we are the primary obligor and no legal right of offset existed. As such, although not presented herein, we have increased Current assets and liabilities by approximately $5 million to correctly
present these immaterial items. The items included primarily represent third party rent, property taxes and certain operating expenses which are paid directly by Toys-Delaware to the respective third party. The correction had no effect on our
previously reported Results of Operations, Members Capital and no net effect on Cash Flows.

2. Real estate, net



|                               |  |               |                  |  |                 |  |                  | 
|------------------------------ |  | ------------- | ---------------- |  | --------------- |  | ---------------- | 
|(In thousands)                 |  | April 30,2011 |                  |  | January 29,2011 | 
|Land                           |  |               | $        169,937 |  |                 |  | $        169,937 | 
|Buildings                      |  |               | 273,285          |  |                 |  | 273,285          | 
|Leasehold improvements         |  |               | 132,173          |  |                 |  | 132,173          | 
|                               |  |               |                  |  |                 |  |                  | 
|                               |  |               | 575,395          |  |                 |  | 575,395          | 
|Less: accumulated depreciation |  |               | (183,717)        |  |                 |  | (180,696)        | 
|                               |  |               |                  |  |                 |  |                  | 
|Total                          |  |               | $        391,678 |  |                 |  | $        394,699 | 
|                               |  |               |                  |  |                 |  |                  | 

3. Long-term debt

As of April 30, 2011 and January 29, 2011, the carrying value of our debt was $716 million, respectively, with fair values of approximately $782 million and $791 million, respectively. The fair
value of our long-term debt was estimated based on a quoted market price and other pertinent information available to management as of the end of the respective periods.



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

4 . Members deficit

Giraffe Junior Holdings, LLC, an indirect wholly-owned subsidiary of TRU, is the direct owner of 100% of our limited liability company interests. We
evaluate our cash balances on an ongoing basis and periodically distribute cash to our parent companies. During the thirteen weeks ended April 30, 2011, we made cash distributions of $6 million and less than $1 million in dividends and return
of capital, respectively.

During the thirteen weeks ended May 1, 2010, we received a capital contribution of approximately $1 million
from Giraffe Junior Holdings, LLC.

5. Related party transactions

Rental Revenues

Our rental revenue is derived from payments received under the leasing
agreements we have entered into with Toys-Delaware. The master lease agreement provides for Toys-Delaware to reimburse us for property related costs including, among others, real estate taxes and common area maintenance charges. Some of these costs
are directly paid by Toys-Delaware and are recorded as both an expense and a tenant reimbursement. During each of the thirteen weeks ended April 30, 2011 and May 1, 2010, we earned related party Base rent revenues of approximately $27
million. In addition, we recorded Tenant reimbursements of approximately $3 million under our leasing arrangements with Toys-Delaware during each of the thirteen weeks ended April 30, 2011 and May 1, 2010.

Management Service Fees

Toys-Delaware
provides a majority of the centralized corporate functions, including accounting, human resources, legal, tax and treasury services to TRU, other affiliates and us under a Domestic Services Agreement (Agreement). The costs are based on a
formula for each affiliate, as defined in the Agreement. During each of the thirteen weeks ended April 30, 2011 and May 1, 2010, the amounts charged to us for these services were less than $1 million and are recorded in Other operating
expenses in the Condensed Statements of Operations.

6. Due from affiliate, net

As of April 30, 2011 and January 29, 2011, Due from affiliate, net of $4 million, respectively, represented balances owed to us by Toys-Delaware
primarily related to real estate taxes and certain property reimbursements.

7. Recent Accounting Pronouncements

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



6



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

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

Our Business

We are a special purpose
entity, owned indirectly by Toys R Us, Inc. (TRU) through Toys R Us  Delaware, Inc. (Toys-Delaware). We own fee and ground leasehold interests in 129 properties in various retail markets
throughout the United States. Under an operating company/property company structure, we lease these properties to Toys-Delaware on a triple-net basis, the operating entity for all of TRUs North American businesses. Substantially all of our
revenues and cash flows are derived from payments from Toys-Delaware under the Amended and Restated Master Lease Agreement (the TRU Propco II Master Lease). For quarterly financial statements and other information about our master
tenant, Toys-Delaware, see Exhibit 99.1 to this report.

Results of Operations

Net Earnings



|                 |  |                |                 |  |            |  |              |          |  |  |                  |  |  |  |       | 
|---------------- |  | -------------- | --------------- |  | ---------- |  | ------------ | -------- |  |  | ---------------- |  |  |  | ----- | 
|                 |  | 13 Weeks Ended |                
|($ In thousands) |  | April 30,2011  |                 |  | May 1,2010 |  |              | $ Change |  |  | % Change         | 
|Net earnings     |  |                | $         6,357 |  |            |  | $      5,766 |          |  |  | $            591 |  |  |  | 10.2% | 

Net earnings increased by $0.6
million, or 10.2%, to $6.4 million for the thirteen weeks ended April 30, 2011, compared to $5.8 million for the thirteen weeks ended May 1, 2010. Net earnings increased primarily due to an increase of $0.7 million in Total revenues as a
result of an increase in Base rents.

Total revenues



|                 |  |                |               |  |            |  |             |          |  |  |                  |  |  |  |      | 
|---------------- |  | -------------- | ------------- |  | ---------- |  | ----------- | -------- |  |  | ---------------- |  |  |  | ---- | 
|                 |  | 13 Weeks Ended |              
|($ In thousands) |  | April 30,2011  |               |  | May 1,2010 |  |             | $ Change |  |  | % Change         | 
|Total revenues   |  |                | $      30,576 |  |            |  | $    29,894 |          |  |  | $            682 |  |  |  | 2.3% | 

Total revenues increased by $0.7
million, or 2.3% to $30.6 million for the thirteen weeks ended April 30, 2011, compared to $29.9 million for the thirteen weeks ended May 1, 2010. The increase was primarily due to an increase in Base rents.

Depreciation



|                 |  |                |                 |  |            |  |              |          |  |  |                 |  |  |  |        | 
|---------------- |  | -------------- | --------------- |  | ---------- |  | ------------ | -------- |  |  | --------------- |  |  |  | ------ | 
|                 |  | 13 Weeks Ended |                
|($ In thousands) |  | April 30,2011  |                 |  | May 1,2010 |  |              | $ Change |  |  | % Change        | 
|Depreciation     |  |                | $         3,021 |  |            |  | $      3,062 |          |  |  | $          (41) |  |  |  | (1.3)% | 

Depreciation had a nominal decrease
for the thirteen weeks ended April 30, 2011, compared to the thirteen weeks ended May 1, 2010.



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Common Area Maintenance Expenses



|                                 |  |                |                |  |            |  |                |          |  |  |                   |  |  |  |      | 
|-------------------------------- |  | -------------- | -------------- |  | ---------- |  | -------------- | -------- |  |  | ----------------- |  |  |  | ---- | 
|                                 |  | 13 Weeks Ended |               
|($ In thousands)                 |  | April 30,2011  |                |  | May 1,2010 |  |                | $ Change |  |  | % Change          | 
|Common area maintenance expenses |  |                | $        3,402 |  |            |  | $        3,332 |          |  |  | $              70 |  |  |  | 2.1% | 

Common area maintenance expenses had
a nominal increase for the thirteen weeks ended April 30, 2011, compared to the thirteen weeks ended May 1, 2010. These expenses are fully reimbursed by our tenant under the TRU Propco II Master Lease, and are reflected in Tenant
reimbursements, which is a component of Total revenues.

Rental Expense



|                 |  |                |                 |  |            |  |                 |          |  |  |                  |  |  |  |      | 
|---------------- |  | -------------- | --------------- |  | ---------- |  | --------------- | -------- |  |  | ---------------- |  |  |  | ---- | 
|                 |  | 13 Weeks Ended |                
|($ In thousands) |  | April 30,2011  |                 |  | May 1,2010 |  |                 | $ Change |  |  | % Change         | 
|Rental expense   |  |                | $           816 |  |            |  | $           761 |          |  |  | $             55 |  |  |  | 7.2% | 

Rental expense had a nominal increase
for the thirteen weeks ended April 30, 2011, compared to the thirteen weeks ended May 1, 2010.

Other Operating Expenses



|                         |  |                |                 |  |            |  |                 |          |  |  |                  |  |  |  |        | 
|------------------------ |  | -------------- | --------------- |  | ---------- |  | --------------- | -------- |  |  | ---------------- |  |  |  | ------ | 
|                         |  | 13 Weeks Ended |                
|($ In thousands)         |  | April 30,2011  |                 |  | May 1,2010 |  |                 | $ Change |  |  | % Change         | 
|Other operating expenses |  |                | $           416 |  |            |  | $           419 |          |  |  | $            (3) |  |  |  | (0.7)% | 

Other operating expenses had a
nominal decrease for the thirteen weeks ended April 30, 2011, compared to the thirteen weeks ended May 1, 2010.

Interest Expense



|                 |  |                |               |  |            |  |               |          |  |  |                  |  |  |  |      | 
|---------------- |  | -------------- | ------------- |  | ---------- |  | ------------- | -------- |  |  | ---------------- |  |  |  | ---- | 
|                 |  | 13 Weeks Ended |              
|($ In thousands) |  | April 30,2011  |               |  | May 1,2010 |  |               | $ Change |  |  | % Change         | 
|Interest expense |  |                | $      16,564 |  |            |  | $      16,554 |          |  |  | $             10 |  |  |  | 0.1% | 

Interest expense had a nominal
increase for the thirteen weeks ended April 30, 2011, compared to the thirteen weeks ended May 1, 2010.

Liquidity and Capital
Resources

Overview

As of April 30, 2011, we were in compliance with all of our covenants related to the senior secured 8.50% notes due fiscal 2017 (the Secured
Notes).

Our largest source of operating cash flows is cash collections from our lessee, Toys-Delaware. In general, we utilize our cash
to service debt, pay normal operating costs and at the discretion of our sole member, based on the recommendation of our management, and as permitted by the indenture governing the Secured Notes, declare and pay dividends. We have been able to meet
our operating cash needs principally by using cash on hand and cash flows from operations and we believe that cash generated from operations along with existing cash will be sufficient to fund expected cash flow requirements for the next twelve
months.



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Cash Flows



|                                                    |  |                |         |  |            |   |        |        |  |   |         | 
|--------------------------------------------------- |  | -------------- | ------- |  | ---------- | - | ------ | ------ |  | - | ------- | 
|                                                    |  | 13 Weeks Ended |        
|(In thousands)                                      |  | April 30,2011  |         |  | May 1,2010 |   |        | Change | 
|Net cash provided by operating activities           |  | $              | 22,227  |  |            | $ | 20,263 |        |  | $ | 1,964   | 
|Net cash (used in) provided by financing activities |  |                | (6,651) |  |            |   | 1,123  |        |  |   | (7,774) | 
|                                                    |  |                |         |  |            |   |        |        |  |   |         | 
|Net increase during period in cash                  |  | $              | 15,576  |  |            | $ | 21,386 |        |  | $ | (5,810) | 
|                                                    |  |                |         |  |            |   |        |        |  |   |         | 

Cash Flows Provided by Operating Activities

During the thirteen weeks ended April 30, 2011, net cash provided by operating activities was $22.2 million compared to $20.3 million the same period last year. The increase in net cash provided by
operating activities was primarily due to a decrease of $1.3 million in payments related to the filing of a registration statement in fiscal 2010 in connection with the refinancing in fiscal 2009. Additionally contributing to the increase in net
cash provided by operating activities was an increase in rental payments received in the first quarter of fiscal 2011 as compared to the prior year.

Cash Flows (Used in) Provided by Financing Activities

During the thirteen weeks
ended April 30, 2011, net cash used in financing activities was $6.7 million compared to net cash provided by financing activities of $1.1 million for the thirteen weeks ended May 1, 2010. The increase in net cash used in financing
activities was primarily due to an increase of $6.7 million in Distributions and a decrease in Capital contributions of $1.2 million.

Debt

Refer to the Annual Report on Form 10-K and Note 3 to the Condensed Financial Statements entitled Long-term debt for further
details regarding our debt.

Contractual Obligations and Commitments

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

Critical Accounting Policies

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

Recently Adopted Accounting Pronouncements

None

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. All statements herein or therein that are not historical facts, including statements about our beliefs or expectations, are forward-looking
statements. We generally identify these statements by words or phrases, such as anticipate, estimate, plan, expect, believe, intend, foresee, will,
may, and similar words or phrases. These statements discuss, among other things, our strategy, future financial or operational performance, anticipated cost savings, results of restructurings, cash flows generated from operating
activities, anticipated developments, future financings, targets and future occurrences and trends.





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These statements are subject to risks, uncertainties, and other factors, including, among others,
competition in the retail industry, seasonality of Toys-Delawares business, changes in consumer preferences and consumer spending patterns, general economic conditions in the United States and other countries in which Toys-Delaware conducts
its business, Toys-Delawares ability to implement its strategy, our, Toys-Delawares and TRUs respective substantial levels of indebtedness and related debt-service obligations and the covenants in their and our respective debt
agreements, availability of adequate financing to us, Toys-Delaware and TRU, Toys-Delawares dependence on key vendors of merchandise, international events affecting the delivery of toys and other products to Toys-Delawares stores, and
such risks, uncertainties and factors set forth under Item 1A entitled RISK FACTORS of our Annual Report on Form 10-K filed on April 29, 2011 and in our reports and documents filed with the United States Securities and Exchange
Commission (which reports and documents should be read in conjunction with this Quarterly Report on Form 10-Q). We believe that all forward-looking statements are based on reasonable assumptions when made; however, we caution that it is impossible
to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes and that, accordingly, one should not place undue reliance on these statements. Forward-looking statements speak only as
of the date they were made, and we undertake no obligation to update these statements in light of subsequent events or developments. Actual results and outcomes may differ materially from anticipated results or outcomes discussed in any
forward-looking statement.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

There has been no material change in our exposure to market risk during the thirteen weeks ended April 30, 2011. For a discussion of our exposure to market risk, refer to Item 7A entitled
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK in our Annual Report on Form 10-K for the fiscal year ended January 29, 2011.



|Item 4. | Controls and Procedures
|------- | -----------------------

Disclosure
Controls and Procedures

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

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

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

Changes in Internal
Control over Financial Reporting

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



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##### Table of Contents

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

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



|Item 1A. | Risk Factors
|-------- | ------------

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



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

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | (Removed and Reserved)
|------- | ----------------------



|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------

Required exhibits are listed in
the Index to Exhibits and are incorporated herein by reference.



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SIGNATURE

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



|                    |  |                                      
|------------------- |  | -------------------------------------
|                    |  | TOYS R US PROPERTY COMPANY II, LLC 
|                    |  | (Registrant)                         
|                    | 
|Date: June 14, 2011 |  | /s/ F. Clay Creasey, Jr.             
|                    |  | F. Clay Creasey, Jr.                 
|                    |  | President and Chief Financial Officer



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INDEX TO EXHIBITS

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



|            |  |                                                                                                                                                                                                                                                  
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                      
|            | 
|3.1         |  | Amended and Restated Certificate of Formation of Toys R Us Property Company II, LLC (filed as Exhibit 3.1 to Registrants Form S-4 registration statement, filed on
August 4, 2010 and incorporated herein by reference).                      
|            | 
|3.2         |  | Second Amended and Restated Limited Liability Company Agreement of Toys R Us Property Company II, LLC (filed as Exhibit 3.2 to the Registrants Form S-4
registration statement, filed on August 4, 2010 and incorporated herein by reference).
|            | 
|31.1        |  | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a  14(a) and Rule 15d  14(a) of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.     
|            | 
|32.1        |  | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.                                                           
|            | 
|99.1        |  | Toys R Us  Delaware, Inc. financial statements for the thirteen weeks ended April 30, 2011 (filed as Exhibit 99.1 to the Form 8-K filed by Toys R Us,
Inc. on June 14, 2011 and incorporated herein by reference).                          



13