Subsidiary Guarantors of Senior Notes - Consolidating Financial Information

3 Months Ended

Apr. 30, 2011

Subsidiary Guarantors of Senior Notes - Consolidating Financial Information [Abstract]

Subsidiary Guarantors of Senior Notes - Consolidating Financial Information

Note 14 — Subsidiary Guarantors of Senior Notes — Condensed Consolidating Financial Information

The Company has issued Notes guaranteed by all of its domestic subsidiaries (the “Guarantor Subsidiaries”). The Guarantor Subsidiaries are direct or indirect wholly owned domestic subsidiaries of the Company. The guarantees are full and unconditional and joint and several.

The following supplemental financial information sets forth, on a consolidating basis, the Condensed Consolidating Statements of Earnings for the Company (the “Parent Company”), for the Guarantor Subsidiaries and for the Company’s Non-Guarantor Subsidiaries (the “Non-guarantor Subsidiaries”) and total Condensed Consolidated Collective Brands, Inc. and Subsidiaries for the thirteen week periods ended April 30, 2011, and May 1, 2010, Condensed Consolidating Balanced Sheets as of April 30, 2011, May 1, 2010, and January 29, 2011, and the Condensed Consolidating Statements of Cash Flows for the thirteen week periods ended April 30, 2011, and May 1, 2010. With the exception of operations in the Central and South American Regions in which the Company has a 60% ownership interest, the Non-guarantor Subsidiaries are direct or indirect wholly-owned subsidiaries of the Guarantor Subsidiaries. The equity investment for each subsidiary is recorded by its parent within other assets.

The Non-guarantor Subsidiaries are made up of the Company’s operations in the Central and South American Regions, Canada, Mexico, Germany, the Netherlands, the United Kingdom, Ireland, Australia, Bermuda, Saipan and Puerto Rico and the Company’s sourcing organization in Hong Kong, Taiwan, China, Vietnam, Indonesia and Brazil. The operations in the Central and South American Regions use a December 31 year-end. Operations in the Central and South American Regions are included in the Company’s results on a one-month lag relative to results from other regions. The effect of this one-month lag on the Company’s financial position and results of operations is not significant.

Under the indenture governing the Notes, the Company’s subsidiaries in Singapore are designated as unrestricted subsidiaries. The effect of these subsidiaries on the Company’s financial position and results of operations and cash flows is not significant. The Company’s subsidiaries in Singapore are included in the Non-guarantor Subsidiaries.

CONDENSED CONSOLIDATING STATEMENTS OF EARNINGS
(dollars in millions)

	13 Weeks Ended April 30, 2011
	Parent			Guarantor			Non-guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	772.6		$	388.6		$	(292.2	)	$	869.0
Cost of sales		—			522.7			302.8			(266.4	)		559.1
Gross margin		—			249.9			85.8			(25.8	)		309.9
Selling, general and administrative expenses		1.0			227.3			65.0			(25.8	)		267.5
Operating (loss) profit		(1.0	)		22.6			20.8			—			42.4
Interest expense		12.8			7.1			—			(9.0	)		10.9
Interest income		—			(9.1	)		—			9.0			(0.1	)
Equity in earnings of subsidiaries		(35.3	)		(16.1	)		—			51.4			—
Earnings before income taxes		21.5			40.7			20.8			(51.4	)		31.6
(Benefit) provision for income taxes		(4.9	)		5.4			2.9			—			3.4
Net earnings		26.4			35.3			17.9			(51.4	)		28.2
Net earnings attributable to noncontrolling interests		—			—			(1.8	)		—			(1.8	)
Net earnings attributable to Collective Brands, Inc.	$	26.4		$	35.3		$	16.1		$	(51.4	)	$	26.4

	13 Weeks Ended May 1, 2010
	Parent			Guarantor			Non-guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	777.9		$	363.1		$	(262.2	)	$	878.8
Cost of sales		—			501.8			281.2			(240.9	)		542.1
Gross margin		—			276.1			81.9			(21.3	)		336.7
Selling, general and administrative expenses		0.9			217.9			57.6			(21.3	)		255.1
Operating (loss) profit		(0.9	)		58.2			24.3			—			81.6
Interest expense		7.0			9.6			—			(3.2	)		13.4
Interest income		—			(3.4	)		—			3.2			(0.2	)
Loss on early extinguishment of debt		—			0.8			—			—			0.8
Equity in earnings of subsidiaries		(59.3	)		(22.7	)		—			82.0			—
Earnings before income taxes		51.4			73.9			24.3			(82.0	)		67.6
(Benefit) provision for income taxes		(2.8	)		14.6			(0.2	)		—			11.6
Net earnings		54.2			59.3			24.5			(82.0	)		56.0
Net earnings attributable to noncontrolling interests		—			—			(1.8	)		—			(1.8	)
Net earnings attributable to Collective Brands, Inc.	$	54.2		$	59.3		$	22.7		$	(82.0	)	$	54.2

CONDENSED CONSOLIDATING BALANCE SHEET
(dollars in millions)

	As of April 30, 2011
	Parent		Guarantor			Non-guarantor
	Company		Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	113.7		$	156.7		$	—		$	270.4
Accounts receivable, net		—		133.9			30.1			(17.6	)		146.4
Inventories		—		457.6			131.5			(13.2	)		575.9
Current deferred income taxes		—		22.7			7.6			—			30.3
Prepaid expenses		33.3		15.0			12.8			—			61.1
Other current assets		—		276.6			172.9			(429.4	)		20.1
Total current assets		33.3		1,019.5			511.6			(460.2	)		1,104.2
Property and Equipment:
Land		—		6.7			—			—			6.7
Property, buildings and equipment		—		1,238.0			220.8			—			1,458.8
Accumulated depreciation and amortization		—		(894.8	)		(147.2	)		—			(1,042.0	)
Property and equipment, net		—		349.9			73.6			—			423.5
Intangible assets, net		—		396.8			28.2			—			425.0
Goodwill		—		143.0			136.8			—			279.8
Deferred income taxes		—		—			10.5			—			10.5
Other assets		1,578.7		933.9			12.1			(2,484.1	)		40.6
Total Assets	$	1,612.0	$	2,843.1		$	772.8		$	(2,944.3	)	$	2,283.6
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt	$	—	$	5.1		$	—		$	—		$	5.1
Accounts payable		—		138.1			237.0			(79.9	)		295.2
Accrued expenses		112.9		384.2			35.0			(373.9	)		158.2
Total current liabilities		112.9		527.4			272.0			(453.8	)		458.5
Long-term debt		637.1		483.0			37.1			(499.0	)		658.2
Deferred income taxes		—		64.1			1.3			—			65.4
Other liabilities		3.0		192.2			16.7			—			211.9
Commitments and contingencies
Equity:
Collective Brands, Inc. shareowners’ equity		859.0		1,576.4			415.1			(1,991.5	)		859.0
Noncontrolling interests		—		—			30.6			—			30.6
Total equity		859.0		1,576.4			445.7			(1,991.5	)		889.6
Total Liabilities and Equity	$	1,612.0	$	2,843.1		$	772.8		$	(2,944.3	)		$2,283.6

CONDENSED CONSOLIDATING BALANCE SHEET
(dollars in millions)

	As of May 1, 2010
	Parent		Guarantor			Non-guarantor
	Company		Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	196.5		$	155.9		$	—		$	352.4
Accounts receivable, net		—		102.5			23.1			(9.0	)		116.6
Inventories		—		376.7			99.9			(9.2	)		467.4
Current deferred income taxes		—		31.0			7.3			—			38.3
Prepaid expenses		13.6		35.2			12.5			—			61.3
Other current assets		—		252.8			205.7			(438.7	)		19.8
Total current assets		13.6		994.7			504.4			(456.9	)		1,055.8
Property and Equipment:
Land		—		6.9			—			—			6.9
Property, buildings and equipment		—		1,218.4			202.6			—			1,421.0
Accumulated depreciation and amortization		—		(843.2	)		(132.4	)		—			(975.6	)
Property and equipment, net		—		382.1			70.2			—			452.3
Intangible assets, net		—		406.1			35.1			—			441.2
Goodwill		—		141.8			138.0			—			279.8
Deferred income taxes		—		—			7.2			—			7.2
Other assets		1,436.5		995.9			2.8			(2,391.3	)		43.9
Total Assets	$	1,450.1	$	2,920.6		$	757.7		$	(2,848.2	)	$	2,280.2
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt	$	—	$	6.1		$	—		$	—		$	6.1
Accounts payable		—		156.0			164.3			(95.0	)		225.3
Accrued expenses		7.5		470.9			40.2			(357.6	)		161.0
Current liabilities of discontinued operations		—		—			—			—			—
Total current liabilities		7.5		633.0			204.5			(452.6	)		392.4
Long-term debt		636.7		587.6			88.3			(549.0	)		763.6
Deferred income taxes		—		63.3			1.9			—			65.2
Other liabilities		3.0		207.0			16.7			(0.5	)		226.2
Noncurrent liabilities of discontinued operations		—		—			—			—			—
Commitments and contingencies
Equity:
Collective Brands, Inc. shareowners’ equity		802.9		1,429.7			416.4			(1,846.1	)		802.9
Noncontrolling interests		—		—			29.9			—			29.9
Total equity		802.9		1,429.7			446.3			(1,846.1	)		832.8
Total Liabilities and Equity	$	1,450.1	$	2,920.6		$	757.7		$	(2,848.2	)	$	2,280.2

CONDENSED CONSOLIDATING BALANCE SHEET
(dollars in millions)

	As of January 29, 2011
	Parent		Guarantor			Non-guarantor
	Company		Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	—	$	122.4		$	201.7		$	—		$	324.1
Accounts receivable, net		—		103.4			21.2			(10.2	)		114.4
Inventories		—		418.5			122.5			(9.3	)		531.7
Current deferred income taxes		—		23.1			7.6			—			30.7
Prepaid expenses		28.4		15.8			10.9			—			55.1
Other current assets		—		276.9			150.9			(405.6	)		22.2
Total current assets		28.4		960.1			514.8			(425.1	)		1,078.2
Property and Equipment:
Land		—		6.7			—			—			6.7
Property, buildings and equipment		—		1,233.1			211.5			—			1,444.6
Accumulated depreciation and amortization		—		(878.5	)		(140.5	)		—			(1,019.0	)
Property and equipment, net		—		361.3			71.0			—			432.3
Intangible assets, net		—		399.4			29.0			—			428.4
Goodwill		—		142.9			136.9			—			279.8
Deferred income taxes		—		—			10.1			—			10.1
Other assets		1,538.6		916.4			22.1			(2,437.4	)		39.7
Total Assets	$	1,567.0	$	2,780.1		$	783.9		$	(2,862.5	)	$	2,268.5
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt	$	—	$	5.1		$	—		$	—		$	5.1
Accounts payable		—		140.0			237.1			(89.7	)		287.4
Accrued expenses		103.8		376.4			32.9			(328.7	)		184.4
Total current liabilities		103.8		521.5			270.0			(418.4	)		476.9
Long-term debt		637.0		484.3			67.1			(529.0	)		659.4
Deferred income taxes		—		64.0			1.4			—			65.4
Other liabilities		3.3		191.9			17.2			—			212.4
Commitments and contingencies
Equity:
Collective Brands, Inc. shareowners’ equity		822.9		1,518.4			396.7			(1,915.1	)		822.9
Noncontrolling interests		—		—			31.5			—			31.5
Total equity		822.9		1,518.4			428.2			(1,915.1	)		854.4
Total Liabilities and Equity	$	1,567.0	$	2,780.1		$	783.9		$	(2,862.5	)	$	2,268.5

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(dollars in millions)

	13 Weeks Ended April 30, 2011
	Parent			Guarantor			Non-guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Operating Activities:
Net earnings	$	26.4		$	35.3		$	17.9		$	(51.4	)	$	28.2
Adjustments for non-cash items included in net earnings		0.1			32.5			5.8			—			38.4
Changes in working capital		4.2			(70.0	)		(38.2	)		(0.3	)		(104.3	)
Other, net		(28.0	)		(27.8	)		0.5			51.7			(3.6	)
Cash flow provided by (used in) operating activities		2.7			(30.0	)		(14.0	)		—			(41.3	)
Investing Activities:
Capital expenditures		—			(7.4	)		(3.4	)		—			(10.8	)
Cash flow used in investing activities		—			(7.4	)		(3.4	)		—			(10.8	)
Financing Activities:
Net proceeds (repayments) of debt		—			28.7			(30.0	)		—			(1.3	)
Net purchases of common stock		(2.7	)		—			—			—			(2.7	)
Net distributions to noncontrolling interests		—			—			(3.0	)		—			(3.0	)
Cash flow (used in) provided by financing activities		(2.7	)		28.7			(33.0	)		—			(7.0	)
Effect of exchange rate changes on cash		—			—			5.4			—			5.4
Decrease in cash and cash equivalents		—			(8.7	)		(45.0	)		—			(53.7	)
Cash and cash equivalents, beginning of year		—			122.4			201.7			—			324.1
Cash and cash equivalents, end of quarter	$	—		$	113.7		$	156.7		$	—		$	270.4

	13 Weeks Ended May 1, 2010
	Parent			Guarantor			Non-guarantor
	Company			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Operating Activities:
Net earnings	$	54.2		$	59.3		$	24.5		$	(82.0	)	$	56.0
Adjustments for non-cash items included in net earnings		0.1			38.3			5.0			—			43.4
Changes in working capital		(9.0	)		3.8			(37.9	)		(0.3	)		(43.4	)
Other, net		(48.6	)		(87.8	)		51.3			82.3			(2.8	)
Cash flow (used in) provided by operating activities		(3.3	)		13.6			42.9			—			53.2
Investing Activities:
Capital expenditures		—			(17.2	)		(2.6	)		—			(19.8	)
Cash flow used in investing activities		—			(17.2	)		(2.6	)		—			(19.8	)
Financing Activities:
Net repayment of debt or notes		—			(79.7	)		—			—			(79.7	)
Net issuances of common stock		3.3			—			—			—			3.3
Net distributions to noncontrolling interests		—			—			(1.3	)		—			(1.3	)
Cash flow provided by (used in) financing activities		3.3			(79.7	)		(1.3	)		—			(77.7	)
Effect of exchange rate changes on cash		—			—			3.2			—			3.2
(Decrease) increase in cash and cash equivalents		—			(83.3	)		42.2			—			(41.1	)
Cash and cash equivalents, beginning of year		—			279.8			113.7			—			393.5
Cash and cash equivalents, end of quarter	$	—		$	196.5		$	155.9		$	—		$	352.4