Guarantor and Non-Guarantor Financial Information | 24. GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION The Company’s 2022 Notes are guaranteed fully and unconditionally, as well as jointly and severally, by its Guarantor Subsidiaries. As described in Note 11, Associated Brands, Inc.; Cains Foods, Inc.; Cains Foods L.P.; Cains GP, LLC; and Flagstone Foods, Inc. (formerly known as Snacks Holding Corporation) were added as Guarantor Subsidiaries in the fourth quarter of 2015. In the fourth quarter of 2014, EDS Holdings, LLC was removed as a Guarantor Subsidiary. There are no significant restrictions on the ability of the parent company or any guarantor to obtain funds from its subsidiaries by dividend or loan. The following supplemental consolidating financial information presents the results of operations, financial position, and cash flows of the parent company, its guarantor subsidiaries, its non-guarantor subsidiaries and the eliminations necessary to arrive at the information for the Company on a consolidated basis as of December 31, 2015 and 2014 and for the years ended December 31, 2015, 2014, and 2013. The equity method has been used with respect to investments in subsidiaries. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. As a result of the addition of the guarantors noted above, the following supplemental consolidating financial information has been recast for prior periods as if the new guarantor structure existed for all periods presented, as of the acquisition dates of the respective guarantors. As a result of the removal of EDS Holdings, LLC as a guarantor in 2014, all prior period supplemental consolidating financial information has been revised to remove it as a guarantor for all periods presented. Condensed Supplemental Consolidating Balance Sheet December 31, 2015 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 10,384 $ 37 $ 24,498 $ — $ 34,919 Investments — — 8,388 — 8,388 Accounts receivable, net 17 181,231 21,950 — 203,198 Inventories, net — 500,308 83,807 — 584,115 Prepaid expenses and other current assets 17,625 6,580 8,996 (16,618 ) 16,583 Total current assets 28,026 688,156 147,639 (16,618 ) 847,203 Property, plant, and equipment, net 26,294 448,708 66,526 — 541,528 Goodwill — 1,496,484 153,310 — 1,649,794 Investment in subsidiaries 2,411,533 380,955 — (2,792,488 ) — Intercompany accounts receivable (payable), net 582,266 (543,738 ) (38,528 ) — — Deferred income taxes 18,092 — — (18,092 ) — Intangible and other assets, net 46,041 504,114 114,116 — 664,271 Total assets $ 3,112,252 $ 2,974,679 $ 443,063 $ (2,827,198 ) $ 3,702,796 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 16,526 $ 232,938 $ 27,734 $ (16,618 ) $ 260,580 Current portion of long-term debt 11,621 1,050 2,222 — 14,893 Total current liabilities 28,147 233,988 29,956 (16,618 ) 275,473 Long-term debt 1,219,011 1,062 1,668 — 1,221,741 Deferred income taxes — 273,588 23,612 (18,092 ) 279,108 Other long-term liabilities 10,235 54,508 6,872 — 71,615 Stockholders’ equity 1,854,859 2,411,533 380,955 (2,792,488 ) 1,854,859 Total liabilities and stockholders’ equity $ 3,112,252 $ 2,974,679 $ 443,063 $ (2,827,198 ) $ 3,702,796 Condensed Supplemental Consolidating Balance Sheet December 31, 2014 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 18,706 $ 1,592 $ 31,683 $ — $ 51,981 Investments — — 9,148 — 9,148 Accounts receivable, net 46 186,155 47,455 — 233,656 Inventories, net — 497,513 96,585 — 594,098 Prepaid expenses and other current assets 32,849 5,065 7,900 (20,825 ) 24,989 Total current assets 51,601 690,325 192,771 (20,825 ) 913,872 Property, plant, and equipment, net 28,411 440,613 74,754 — 543,778 Goodwill — 1,490,768 177,217 — 1,667,985 Investment in subsidiaries 2,269,325 430,650 — (2,699,975 ) — Intercompany accounts receivable (payable), net 840,606 (759,593 ) (81,013 ) — — Deferred income taxes 20,578 — — (20,578 ) — Intangible and other assets, net 46,708 539,236 146,743 — 732,687 Total assets $ 3,257,229 $ 2,831,999 $ 510,472 $ (2,741,378 ) $ 3,858,322 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses $ 48,002 $ 232,257 $ 37,426 $ (20,825 ) $ 296,860 Current portion of long-term debt 9,121 1,595 2,278 — 12,994 Total current liabilities 57,123 233,852 39,704 (20,825 ) 309,854 Long-term debt 1,431,761 2,027 3,961 — 1,437,749 Deferred income taxes — 278,295 26,173 (20,578 ) 283,890 Other long-term liabilities 9,088 48,500 9,984 — 67,572 Stockholders’ equity 1,759,257 2,269,325 430,650 (2,699,975 ) 1,759,257 Total liabilities and stockholders’ equity $ 3,257,229 $ 2,831,999 $ 510,472 $ (2,741,378 ) $ 3,858,322 Condensed Supplemental Consolidating Statement of Income Year Ended December 31, 2015 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net sales $ — $ 2,994,438 $ 467,687 $ (255,720 ) $ 3,206,405 Cost of sales — 2,405,134 412,688 (255,720 ) 2,562,102 Gross profit — 589,304 54,999 — 644,303 Selling, general, and administrative expense 73,201 233,041 35,910 — 342,152 Amortization 8,097 42,332 10,169 — 60,598 Other operating expense, net — 1,817 — — 1,817 Operating (loss) income (81,298 ) 312,114 8,920 — 239,736 Interest expense 43,808 207 7,123 (5,664 ) 45,474 Interest income (1,450 ) (5,664 ) (1,517 ) 5,664 (2,967 ) Other (income) expense, net (7 ) 20,311 5,661 — 25,965 (Loss) income from continuing operations, before income taxes (123,649 ) 297,260 (2,347 ) — 171,264 Income taxes (benefit) (47,215 ) 106,288 (2,719 ) — 56,354 Equity in net income (loss) of subsidiaries 191,344 372 — (191,716 ) — Net income (loss) $ 114,910 $ 191,344 $ 372 $ (191,716 ) $ 114,910 Condensed Supplemental Consolidating Statement of Income Year Ended December 31, 2014 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net sales $ — $ 2,596,451 $ 493,460 $ (143,809 ) $ 2,946,102 Cost of sales — 2,061,598 421,709 (143,809 ) 2,339,498 Gross profit — 534,853 71,751 — 606,604 Selling, general, and administrative expense 68,632 221,106 43,657 — 333,395 Amortization 6,521 35,409 10,704 — 52,634 Other operating expense, net — 2,365 56 — 2,421 Operating (loss) income (75,153 ) 275,973 17,334 — 218,154 Interest expense 41,316 520 4,071 (3,871 ) 42,036 Interest income (2 ) (3,900 ) (959 ) 3,871 (990 ) Loss on extinguishment of debt 22,019 — — — 22,019 Other expense, net 22 10,329 8,168 — 18,519 (Loss) income from continuing operations, before income taxes (138,508 ) 269,024 6,054 — 136,570 Income taxes (benefit) (51,761 ) 99,896 (1,445 ) — 46,690 Equity in net income (loss) of subsidiaries 176,627 7,499 — (184,126 ) — Net income (loss) $ 89,880 $ 176,627 $ 7,499 $ (184,126 ) $ 89,880 Condensed Supplemental Consolidating Statement of Income Year Ended December 31, 2013 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net sales $ — $ 2,069,073 $ 320,313 $ (95,459 ) $ 2,293,927 Cost of sales — 1,644,614 269,223 (95,459 ) 1,818,378 Gross profit — 424,459 51,090 — 475,549 Selling, general, and administrative expense 52,951 173,073 30,039 — 256,063 Amortization 5,445 24,351 5,579 — 35,375 Other operating expense, net — 3,741 2,206 — 5,947 Operating (loss) income (58,396 ) 223,294 13,266 — 178,164 Interest expense 48,358 967 60 (81 ) 49,304 Interest income — (12 ) (2,254 ) 81 (2,185 ) Other (income) expense, net (3 ) (22,007 ) 28,145 — 6,135 (Loss) income from continuing operations, before income taxes (106,751 ) 244,346 (12,685 ) — 124,910 Income taxes (benefit) (42,438 ) 78,460 1,900 — 37,922 Equity in net income (loss) of subsidiaries 151,301 (14,585 ) — (136,716 ) — Net income (loss) $ 86,988 $ 151,301 $ (14,585 ) $ (136,716 ) $ 86,988 Condensed Supplemental Consolidating Statement of Comprehensive Income Year Ended December 31, 2015 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net income $ 114,910 $ 191,344 $ 372 $ (191,716 ) $ 114,910 Other comprehensive income (loss): Foreign currency translation adjustments — — (49,186 ) — (49,186 ) Pension and postretirement reclassification adjustment, net of tax — 49 — — 49 Other comprehensive income (loss) — 49 (49,186 ) — (49,137 ) Equity in other comprehensive (loss) income of subsidiaries (49,137 ) (49,186 ) — 98,323 — Comprehensive income (loss) $ 65,773 $ 142,207 $ (48,814 ) $ (93,393 ) $ 65,773 Condensed Supplemental Consolidating Statement of Comprehensive Income Year Ended December 31, 2014 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net income $ 89,880 $ 176,627 $ 7,499 $ (184,126 ) $ 89,880 Other comprehensive (loss): Foreign currency translation adjustments — — (26,637 ) — (26,637 ) Pension and postretirement reclassification adjustment, net of tax — (5,931 ) — — (5,931 ) Other comprehensive (loss) — (5,931 ) (26,637 ) — (32,568 ) Equity in other comprehensive (loss) income of subsidiaries (32,568 ) (26,637 ) — 59,205 — Comprehensive income (loss) $ 57,312 $ 144,059 $ (19,138 ) $ (124,921 ) $ 57,312 Condensed Supplemental Consolidating Statement of Comprehensive Income Year Ended December 31, 2013 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net income (loss) $ 86,988 $ 151,301 $ (14,585 ) $ (136,716 ) $ 86,988 Other comprehensive income (loss): Foreign currency translation adjustments — — (22,682 ) — (22,682 ) Pension and postretirement reclassification adjustment, net of tax — 7,451 — — 7,451 Derivative reclassification adjustment, net of tax 108 — — — 108 Other comprehensive income (loss) 108 7,451 (22,682 ) — (15,123 ) Equity in other comprehensive (loss) income of subsidiaries (15,231 ) (22,682 ) — 37,913 — Comprehensive income (loss) $ 71,865 $ 136,070 $ (37,267 ) $ (98,803 ) $ 71,865 Condensed Supplemental Consolidating Statement of Cash Flows Fiscal Year Ended December 31, 2015 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net cash provided by (used in) operating activities $ 99,954 $ 356,395 $ 19,669 $ (190,700 ) $ 285,318 Cash flows from investing activities: Additions to property, plant, and equipment (874 ) (61,079 ) (10,781 ) — (72,734 ) Additions to intangible assets (11,830 ) (1,406 ) (126 ) — (13,362 ) Intercompany transfer (11,421 ) (114,063 ) 142 125,342 — Purchase of investments — — (831 ) — (831 ) Proceeds from sale of fixed assets — 465 141 — 606 Net cash (used in) provided by investing activities (24,125 ) (176,083 ) (11,455 ) 125,342 (86,321 ) Cash flows from financing activities: Net borrowing (repayment) of debt (211,742 ) (1,510 ) (2,252 ) — (215,504 ) Intercompany transfer 120,643 (180,357 ) (5,644 ) 65,358 — Net receipts related to stock-based award activities 1,834 — — — 1,834 Excess tax benefits from stock-based payment arrangements 5,329 — — — 5,329 Other (215 ) — — — (215 ) Net cash (used in) provided by financing activities (84,151 ) (181,867 ) (7,896 ) 65,358 (208,556 ) Effect of exchange rate changes on cash and cash equivalents — — (7,503 ) — (7,503 ) Decrease in cash and cash equivalents (8,322 ) (1,555 ) (7,185 ) — (17,062 ) Cash and cash equivalents, beginning of year 18,706 1,592 31,683 — 51,981 Cash and cash equivalents, end of year $ 10,384 $ 37 $ 24,498 $ — $ 34,919 Condensed Supplemental Consolidating Statement of Cash Flows Fiscal Year Ended December 31, 2014 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net cash provided by (used in) operating activities $ 149,103 $ 216,848 $ 29,144 $ (183,138 ) $ 211,957 Cash flows from investing activities: Additions to property, plant, and equipment (16,201 ) (63,843 ) (8,531 ) — (88,575 ) Additions to intangible assets (9,012 ) (2,516 ) 885 — (10,643 ) Intercompany transfer (1,055,537 ) 919,876 (47,477 ) 183,138 — Acquisitions, net of cash acquired — (1,034,894 ) 41,885 — (993,009 ) Purchase of investments — — (584 ) — (584 ) Proceeds from sale of investments — — 63 — 63 Proceeds from sale of fixed assets — 2,457 385 — 2,842 Net cash (used in) provided by investing activities (1,080,750 ) (178,920 ) (13,374 ) 183,138 (1,089,906 ) Cash flows from financing activities: Net borrowing (repayment) of debt 484,595 (1,504 ) (1,691 ) — 481,400 Intercompany transfer 38,577 (38,577 ) — — — Net proceeds from issuance of stock 358,364 — — — 358,364 Net receipts related to stock-based award activities 27,812 20 — — 27,832 Excess tax benefits from stock-based payment arrangements 17,737 (144 ) — — 17,593 Net cash provided by (used in) financing activities 927,085 (40,205 ) (1,691 ) — 885,189 Effect of exchange rate changes on cash and cash equivalents — — (1,734 ) — (1,734 ) (Decrease) increase in cash and cash equivalents (4,562 ) (2,277 ) 12,345 — 5,506 Cash and cash equivalents, beginning of year 23,268 3,869 19,338 — 46,475 Cash and cash equivalents, end of year $ 18,706 $ 1,592 $ 31,683 $ — $ 51,981 Condensed Supplemental Consolidating Statement of Cash Flows Fiscal Year Ended December 31, 2013 (In thousands) Parent Guarantor Non-Guarantor Eliminations Consolidated Net cash (used in) provided by operating activities $ (45,540 ) $ 225,857 $ 36,373 $ — $ 216,690 Cash flows from investing activities: Additions to property, plant, and equipment (48 ) (68,530 ) (6,202 ) — (74,780 ) Additions to intangible assets (4,923 ) (1,480 ) — — (6,403 ) Acquisitions, net of cash acquired — (125,158 ) (93,494 ) — (218,652 ) Purchase of investments — — (8,140 ) — (8,140 ) Proceeds from sale of investments — — 165 — 165 Proceeds from sale of fixed assets — 966 (6 ) — 960 Net cash used in investing activities (4,971 ) (194,202 ) (107,677 ) — (306,850 ) Cash flows from financing activities: Net borrowing (repayment) of debt 42,000 (1,939 ) (6 ) — 40,055 Intercompany transfer 26,116 (26,116 ) — — — Net receipts related to stock-based award activities 1,291 — — — 1,291 Excess tax benefits from stock-based payment arrangements 4,372 — — — 4,372 Net cash provided by (used in) financing activities 73,779 (28,055 ) (6 ) — 45,718 Effect of exchange rate changes on cash and cash equivalents — — (3,490 ) — (3,490 ) Increase (decrease) in cash and cash equivalents 23,268 3,600 (74,800 ) — (47,932 ) Cash and cash equivalents, beginning of year — 269 94,138 — 94,407 Cash and cash equivalents, end of year $ 23,268 $ 3,869 $ 19,338 $ — $ 46,475 |