Collective Brands (PSS) 8-K Results of Operations and Financial Condition

PAYLESS SHOESOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

				As Restated
	January 29,			January 31,
(dollars in millions)	2005			2004
ASSETS:
Current assets:
Cash and cash equivalents	$	289.6		$	136.7
Marketable securities, available for sale		5.0			10.0
Restricted cash		3.0			33.5
Inventories		345.3			375.2
Current deferred income taxes		21.9			17.1
Other current assets		56.6			64.9
Current assets of discontinued operations		8.5			24.2
Total current assets		729.9			661.6
Property and Equipment:
Land		8.0			8.0
Buildings and leasehold improvements		673.3			679.8
Furniture, fixtures and equipment		509.8			494.6
Property under capital lease		3.8			4.6
Total property and equipment		1,194.9			1,187.0
Accumulated depreciation and amortization		(772.6	)		(763.5	)
Property and equipment, net		422.3			423.5
Favorable leases, net		21.7			28.8
Deferred income taxes		36.4			34.2
Goodwill, net		5.9			5.9
Other assets		23.5			22.7
Noncurrent assets of discontinued operations		0.1			27.6
TOTAL ASSETS	$	1,239.8		$	1,204.3
LIABILITIES AND EQUITY:
Current liabilities:
Current maturities of long-term debt	$	0.3		$	0.9
Notes payable		3.0			33.5
Accounts payable		160.3			129.6
Accrued expenses		159.7			123.9
Current liabilities of discontinued operations		15.0			5.8
Total current liabilities		338.3			293.7
Long-term debt		204.3			202.8
Other liabilities		93.6			85.6
Noncurrent liabilities of discontinued operations		—			2.1
Minority interest		8.6			15.7
Equity		595.0			604.4
TOTAL LIABILITIES AND EQUITY	$	1,239.8		$	1,204.3

PAYLESS SHOESOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

				As Restated
	January 29,			January 31,
(dollars in millions)	2005			2004
OPERATING ACTIVITIES:
Net loss	$	(2.0	)	$	(0.1	)
Loss from discontinued operations, net of income taxes and minority interest		(37.1	)		(17.0	)
Net earnings from continuing operations		35.1			16.9
Adjustments for non-cash items included in net earnings from continuing operations:
Non-cash component of restructuring charges		10.8			—
Loss on impairment and disposal of assets		7.0			10.9
Depreciation and amortization		94.6			96.2
Amortization of deferred financing costs		0.9			4.0
Amortization of unearned restricted stock		0.7			0.8
Deferred income taxes		(6.4	)		1.3
Minority interest, net of income taxes		(3.6	)		(3.7	)
Changes in working capital:
Inventories		31.0			60.8
Other current assets		8.4			(8.7	)
Accounts payable		30.7			27.7
Accrued expenses		35.3			4.2
Other assets and liabilities, net		6.1			14.5
Cash flow provided by operating activities from continuing operations		250.6			224.9
Net cash provided by (used in) discontinued operations		6.6			(14.9	)
INVESTING ACTIVITIES:
Capital expenditures		(104.9	)		(116.3	)
Dispositions of property and equipment		3.0			1.0
Purchases of marketable securities		(13.0	)		(10.0	)
Sales of marketable securities		18.0			—
Cash flow used in investing activities from continuing operations		(96.9	)		(125.3	)
FINANCING ACTIVITIES:
(Payment) issuance of notes payable		(30.5	)		5.0
Restricted cash		30.5			(5.0	)
Issuance of debt		2.4			196.7
Payment of deferred financing costs		(0.2	)		(7.1	)
Repayments of debt		(1.5	)		(216.9	)
Issuances of common stock		1.6			0.6
Purchases of common stock		(11.4	)		(1.7	)
Contributions by minority owners		3.7			4.4
Cash flow used in financing activities from continuing operations		(5.4	)		(24.0	)
Effect of exchange rate changes on cash		(2.0	)		4.3
Increase in cash and cash equivalents		152.9			65.0
Cash and cash equivalents, beginning of period		136.7			71.7
Cash and cash equivalents, end of period	$	289.6		$	136.7