Financial Information For The Company And Its Subsidiaries | Note 15 Financial Information for the Company and its Subsidiaries The Company's 2023 Senior Notes are fully and unconditionally and jointly and severally guaranteed by all of its existing and future subsidiaries that are guarantors under the Credit Agreement, as further discussed in Note 4 to the condensed consolidated financial statements. The following tables present the condensed consolidating financial information for each of Caleres, Inc. (“Parent”), the Guarantors, and subsidiaries of the Parent that are not Guarantors (the “Non-Guarantors”), together with consolidating eliminations, as of and for the periods indicated. Guarantors are 100% owned by the Parent. The condensed consolidating financial statements have been prepared using the equity method of accounting in accordance with the requirements for presentation of such information. Management believes that the information, presented in lieu of complete financial statements for each of the Guarantors, provides meaningful information to allow investors to determine the nature of the assets held by, and operations and cash flows of, each of the consolidated groups. UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET AS OF APRIL 30, 2016 Non- ($ thousands) Parent Guarantors Guarantors Eliminations Total Assets Current assets Cash and cash equivalents $ 47,611 $ 4,104 $ 97,819 $ — $ 149,534 Receivables, net 99,021 761 17,179 — 116,961 Inventories, net 96,450 370,114 21,312 — 487,876 Prepaid expenses and other current assets 12,950 21,546 5,313 — 39,809 Intercompany receivable – current 571 185 10,084 (10,840 ) — Total current assets 256,603 396,710 151,707 (10,840 ) 794,180 Other assets 95,244 13,253 7,850 — 116,347 Goodwill and intangible assets, net 115,002 2,800 12,177 — 129,979 Property and equipment, net 31,473 144,427 9,686 — 185,586 Investment in subsidiaries 1,040,178 — (20,061 ) (1,020,117 ) — Intercompany receivable – noncurrent 462,382 375,975 561,419 (1,399,776 ) — Total assets $ 2,000,882 $ 933,165 $ 722,778 $ (2,430,733 ) $ 1,226,092 Liabilities and Equity Current liabilities Trade accounts payable $ 42,121 $ 131,783 $ 15,250 $ — $ 189,154 Other accrued expenses 41,347 69,268 14,790 — 125,405 Intercompany payable – current 2,228 — 8,612 (10,840 ) — Total current liabilities 85,696 201,051 38,652 (10,840 ) 314,559 Other liabilities Long-term debt 196,659 — — — 196,659 Other liabilities 36,925 66,321 3,651 — 106,897 Intercompany payable – noncurrent 1,074,723 38,518 286,535 (1,399,776 ) — Total other liabilities 1,308,307 104,839 290,186 (1,399,776 ) 303,556 Equity Caleres, Inc. shareholders’ equity 606,879 627,275 392,842 (1,020,117 ) 606,879 Noncontrolling interests — — 1,098 — 1,098 Total equity 606,879 627,275 393,940 (1,020,117 ) 607,977 Total liabilities and equity $ 2,000,882 $ 933,165 $ 722,778 $ (2,430,733 ) $ 1,226,092 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME FOR THE THIRTEEN WEEKS ENDED APRIL 30, 2016 Non- ($ thousands) Parent Guarantors Guarantors Eliminations Total Net sales $ 187,187 $ 383,046 $ 38,796 $ (24,296 ) $ 584,733 Cost of goods sold 129,909 204,627 22,894 (20,490 ) 336,940 Gross profit 57,278 178,419 15,902 (3,806 ) 247,793 Selling and administrative expenses 49,542 157,103 16,211 (3,806 ) 219,050 Operating earnings (loss) 7,736 21,316 (309 ) — 28,743 Interest expense (3,608 ) (2 ) — — (3,610 ) Interest income 157 — 90 — 247 Intercompany interest income (expense) 2,254 (2,301 ) 47 — — Earnings (loss) before income taxes 6,539 19,013 (172 ) — 25,380 Income tax provision (866 ) (6,304 ) (332 ) — (7,502 ) Equity in earnings (loss) of subsidiaries, net of tax 12,109 — (537 ) (11,572 ) — Net earnings (loss) 17,782 12,709 (1,041 ) (11,572 ) 17,878 Less: Net earnings attributable to noncontrolling interests — — 96 — 96 Net earnings (loss) attributable to Caleres, Inc. $ 17,782 $ 12,709 $ (1,137 ) $ (11,572 ) $ 17,782 Comprehensive income $ 19,578 $ 12,709 $ 228 $ (12,827 ) $ 19,688 Less: Comprehensive income attributable to noncontrolling interests — — 110 — 110 Comprehensive income attributable to Caleres, Inc. $ 19,578 $ 12,709 $ 118 $ (12,827 ) $ 19,578 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE THIRTEEN WEEKS ENDED APRIL 30, 2016 Non- ($ thousands) Parent Guarantors Guarantors Eliminations Total Net cash provided by operating activities $ 14,658 $ 42,360 $ 8,142 $ — $ 65,160 Investing activities Purchases of property and equipment (590 ) (15,434 ) (343 ) — (16,367 ) Capitalized software (1,097 ) (723 ) — — (1,820 ) Intercompany investing (2,815 ) 2,815 — — — Net cash used for investing activities (4,502 ) (13,342 ) (343 ) — (18,187 ) Financing activities Borrowings under revolving credit agreement 103,000 — — — 103,000 Repayments under revolving credit agreement (103,000 ) — — — (103,000 ) Dividends paid (3,068 ) — — — (3,068 ) Acquisition of treasury stock (12,130 ) — — — (12,130 ) Issuance of common stock under share-based plans, net (4,149 ) — — — (4,149 ) Tax benefit related to share-based plans 3,163 — — — 3,163 Intercompany financing 22,639 (24,914 ) 2,275 — — Net cash provided by (used for) financing activities 6,455 (24,914 ) 2,275 — (16,184 ) Effect of exchange rate changes on cash and cash equivalents — — 594 — 594 Increase in cash and cash equivalents 16,611 4,104 10,668 — 31,383 Cash and cash equivalents at beginning of period 31,000 — 87,151 — 118,151 Cash and cash equivalents at end of period $ 47,611 $ 4,104 $ 97,819 $ — $ 149,534 CONDENSED CONSOLIDATING BALANCE SHEET AS OF JANUARY 30, 2016 Non- ($ thousands) Parent Guarantors Guarantors Eliminations Total Assets Current assets Cash and cash equivalents $ 31,000 $ — $ 87,151 $ — $ 118,151 Receivables, net 110,235 2,290 41,139 — 153,664 Inventories, net 151,704 371,538 23,503 — 546,745 Prepaid expenses and other current assets 29,765 24,597 8,109 (5,966 ) 56,505 Intercompany receivable – current 650 176 6,877 (7,703 ) — Total current assets 323,354 398,601 166,779 (13,669 ) 875,065 Other assets 94,767 15,772 7,810 — 118,349 Goodwill and intangible assets, net 115,558 2,800 12,541 — 130,899 Property and equipment, net 32,538 136,223 10,249 — 179,010 Investment in subsidiaries 1,028,143 — (19,524 ) (1,008,619 ) — Intercompany receivable – noncurrent 431,523 354,038 556,259 (1,341,820 ) — Total assets $ 2,025,883 $ 907,434 $ 734,114 $ (2,364,108 ) $ 1,303,323 Liabilities and Equity Current liabilities Trade accounts payable $ 78,332 $ 123,274 $ 36,196 $ — $ 237,802 Other accrued expenses 80,053 62,729 15,681 (5,966 ) 152,497 Intercompany payable – current 4,394 — 3,309 (7,703 ) — Total current liabilities 162,779 186,003 55,186 (13,669 ) 390,299 Other liabilities Long-term debt 196,544 — — — 196,544 Other liabilities 44,011 66,302 3,695 — 114,008 Intercompany payable – noncurrent 1,021,065 39,175 281,580 (1,341,820 ) — Total other liabilities 1,261,620 105,477 285,275 (1,341,820 ) 310,552 Equity Caleres, Inc. shareholders’ equity 601,484 615,954 392,665 (1,008,619 ) 601,484 Noncontrolling interests — — 988 — 988 Total equity 601,484 615,954 393,653 (1,008,619 ) 602,472 Total liabilities and equity $ 2,025,883 $ 907,434 $ 734,114 $ (2,364,108 ) $ 1,303,323 UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET AS OF MAY 2, 2015 Non- ($ thousands) Parent Guarantors Guarantors Eliminations Total Assets Current assets Cash and cash equivalents $ 3,564 $ — $ 62,766 $ — $ 66,330 Receivables, net 101,968 1,570 22,974 — 126,512 Inventories, net 95,948 380,104 22,461 — 498,513 Prepaid expenses and other current assets 12,519 22,119 6,365 — 41,003 Intercompany receivable – current 1,082 432 15,800 (17,314 ) — Total current assets 215,081 404,225 130,366 (17,314 ) 732,358 Other assets 121,441 13,551 6,977 — 141,969 Goodwill and intangible assets, net 117,226 2,800 13,631 — 133,657 Property and equipment, net 34,186 108,866 10,298 — 153,350 Investment in subsidiaries 955,609 — (18,924 ) (936,685 ) — Intercompany receivable – noncurrent 431,964 353,117 517,634 (1,302,715 ) — Total assets $ 1,875,507 $ 882,559 $ 659,982 $ (2,256,714 ) $ 1,161,334 Liabilities and Equity Current liabilities Trade accounts payable $ 3,417 $ 145,328 $ 23,371 $ — $ 172,116 Other accrued expenses 66,847 59,140 11,745 — 137,732 Intercompany payable – current 2,034 — 15,280 (17,314 ) — Total current liabilities 72,298 204,468 50,396 (17,314 ) 309,848 Other liabilities Long-term debt 196,904 — — — 196,904 Other liabilities 34,689 61,678 3,895 — 100,262 Intercompany payable – noncurrent 1,018,142 37,477 247,096 (1,302,715 ) — Total other liabilities 1,249,735 99,155 250,991 (1,302,715 ) 297,166 Equity Caleres, Inc. shareholders’ equity 553,474 578,936 357,749 (936,685 ) 553,474 Noncontrolling interests — — 846 — 846 Total equity 553,474 578,936 358,595 (936,685 ) 554,320 Total liabilities and equity $ 1,875,507 $ 882,559 $ 659,982 $ (2,256,714 ) $ 1,161,334 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME FOR THE THIRTEEN WEEKS ENDED MAY 2, 2015 Non- ($ thousands) Parent Guarantors Guarantors Eliminations Total Net sales $ 192,351 $ 380,189 $ 54,981 $ (25,238 ) $ 602,283 Cost of goods sold 137,594 201,583 36,962 (22,382 ) 353,757 Gross profit 54,757 178,606 18,019 (2,856 ) 248,526 Selling and administrative expenses 52,936 152,246 15,864 (2,856 ) 218,190 Operating earnings 1,821 26,360 2,155 — 30,336 Interest expense (4,462 ) (1 ) — — (4,463 ) Interest income 251 — 53 — 304 Intercompany interest income (expense) 3,678 (3,722 ) 44 — — Earnings before income taxes 1,288 22,637 2,252 — 26,177 Income tax benefit (provision) 1,300 (7,724 ) (362 ) — (6,786 ) Equity in earnings (loss) of subsidiaries, net of tax 16,673 — (15 ) (16,658 ) — Net earnings 19,261 14,913 1,875 (16,658 ) 19,391 Less: Net earnings attributable to noncontrolling interests — — 130 — 130 Net earnings attributable to Caleres, Inc. $ 19,261 $ 14,913 $ 1,745 $ (16,658 ) $ 19,261 Comprehensive income $ 20,217 $ 14,913 $ 2,604 $ (17,383 ) $ 20,351 Less: Comprehensive income attributable to noncontrolling interests — — 134 — 134 Comprehensive income attributable to Caleres, Inc. $ 20,217 $ 14,913 $ 2,470 $ (17,383 ) $ 20,217 UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE THIRTEEN WEEKS ENDED MAY 2, 2015 Non- ($ thousands) Parent Guarantors Guarantors Eliminations Total Net cash (used for) provided by operating activities $ (41,223 ) $ 46,835 $ 16,302 $ — $ 21,914 Investing activities Purchases of property and equipment (6,328 ) (6,302 ) (275 ) — (12,905 ) Capitalized software (750 ) (205 ) — — (955 ) Intercompany investing (151 ) 151 — — — Net cash used for investing activities (7,229 ) (6,356 ) (275 ) — (13,860 ) Financing activities Borrowings under revolving credit agreement 86,000 — — — 86,000 Repayments under revolving credit agreement (86,000 ) — — — (86,000 ) Dividends paid (3,073 ) — — — (3,073 ) Acquisition of treasury stock (4,921 ) — — — (4,921 ) Issuance of common stock under share-based plans, net (3,751 ) — — — (3,751 ) Tax benefit related to share-based plans 2,401 — — — 2,401 Intercompany financing 47,469 (40,479 ) (6,990 ) — — Net cash provided by (used for) financing activities 38,125 (40,479 ) (6,990 ) — (9,344 ) Effect of exchange rate changes on cash and cash equivalents — — 217 — 217 (Decrease) increase in cash and cash equivalents (10,327 ) — 9,254 — (1,073 ) Cash and cash equivalents at beginning of period 13,891 — 53,512 — 67,403 Cash and cash equivalents at end of period $ 3,564 $ — $ 62,766 $ — $ 66,330 |