Note 17

Financial Information for the Company and its Subsidiaries

Brown Shoe Company, Inc. issued senior notes, which are fully and unconditionally and jointly and severally guaranteed by all of its existing and future subsidiaries that are guarantors under its existing agreement. See Note 11 for additional information related to the Company's long-term and short-term financing arrangements. The following table presents the condensed consolidating financial information for each of Brown Shoe Company, 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.

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.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF OCTOBER 29, 2011

($ thousands)	Parent		Guarantors			Non-Guarantors		Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	(1,209)	$	26,552		$	16,608	$	–		$	41,951
Receivables		107,959		21,391			26,404		–			155,754
Inventories		107,532		462,178			10,444		–			580,154
Prepaid expenses and other current assets		18,228		11,270			3,450		–			32,948
Total current assets		232,510		521,391			56,906		–			810,807
Other assets		112,099		24,592			899		–			137,590
Goodwill and intangible assets, net		49,143		16,440			76,961		–			142,544
Property and equipment, net		24,267		102,725			9,825		–			136,817
Investment in subsidiaries		646,443		66,317			–		(712,760	)		–
Total assets	$	1,064,462	$	731,465		$	144,591	$	(712,760	)	$	1,227,758

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	222,000	$	–		$	–	$	–		$	222,000
Trade accounts payable		36,591		116,548			24,382		–			177,521
Other accrued expenses		50,396		75,414			12,264		–			138,074
Total current liabilities		308,987		191,962			36,646		–			537,595
Other liabilities
Long-term debt		198,586		–			–		–			198,586
Other liabilities		16,668		41,168			14,148		–			71,984
Intercompany payable (receivable)		121,621		(148,108	)		26,487		–			–
Total other liabilities		336,875		(106,940	)		40,635		–			270,570
Equity
Brown Shoe Company, Inc. shareholders' equity		418,600		646,443			66,317		(712,760	)		418,600
Noncontrolling interests		–		–			993		–			993
Total equity		418,600		646,443			67,310		(712,760	)		419,593
Total liabilities and equity	$	1,064,462	$	731,465		$	144,591	$	(712,760	)	$	1,227,758

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS

FOR THE THIRTEEN WEEKS ENDED OCTOBER 29, 2011

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	206,628		$	517,443		$	42,107		$	(52,390	)	$	713,788
Cost of goods sold		157,993			298,120			33,567			(52,390	)		437,290
Gross profit		48,635			219,323			8,540			–			276,498
Selling and administrative expenses		40,435			167,977			31,010			–			239,422
Restructuring and other special charges, net		4,715			–			–			–			4,715
Equity in (earnings) loss of subsidiaries		(32,516	)		22,895			–			9,621			–
Operating earnings (loss)		36,001			28,451			(22,470	)		(9,621	)		32,361
Interest expense		(6,681	)		(8	)		4			–			(6,685	)
Loss on early extinguishment of debt		–			–			–			–			–
Interest income		–			89			9			–			98
Intercompany interest income (expense)		3,753			(3,859	)		106			–			–
Earnings (loss) before income taxes from continuing operations		33,073			24,673			(22,351	)		(9,621	)		25,774
Income tax benefit (provision)		659			(8,256	)		(583	)		–			(8,180	)
Net earnings (loss) from continuing operations		33,732			16,417			(22,934	)	$	(9,621	)		17,594
Discontinued operations:
Earnings from operations of subsidiary, net of tax		–			725			–			–			725
Gain on sale of subsidiary, net of tax		–			15,374			–			–			15,374
Net earnings from discontinued operations		–			16,099			–			–			16,099
Net earnings		33,732			32,516			(22,934	)		(9,621	)		33,693
Net loss attributable to noncontrolling interests		–			–			(39	)		–			(39	)
Net earnings (loss) attributable to Brown Shoe Company, Inc.	$	33,732		$	32,516		$	(22,895	)	$	(9,621	)	$	33,732

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS

FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 29, 2011

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	538,093		$	1,400,822		$	153,353		$	(138,335	)	$	1,953,933
Cost of goods sold		411,314			795,161			127,726			(138,335	)		1,195,866
Gross profit		126,779			605,661			25,627			–			758,067
Selling and administrative expenses		128,312			532,958			46,206			–			707,476
Restructuring and other special charges, net		7,148			–			–			–			7,148
Equity in (earnings) loss of subsidiaries		(44,245	)		19,907			–			24,338			–
Operating earnings (loss)		35,564			52,796			(20,579	)		(24,338	)		43,443
Interest expense		(19,886	)		(20	)		3			–			(19,903	)
Loss on early extinguishment of debt		(1,003	)		–			–			–			(1,003	)
Interest income		–			187			61			–			248
Intercompany interest income (expense)		12,007			(12,380	)		373			–			–
Earnings (loss) before income taxes from continuing operations		26,682			40,583			(20,142	)		(24,338	)		22,785
Income tax benefit (provision)		6,129			(13,413	)		(10	)		–			(7,294	)
Net earnings (loss) from continuing operations		32,811			27,170			(20,152	)		(24,338	)		15,491
Discontinued operations:
Earnings from operations of subsidiary, net of tax		–			1,701			–			–			1,701
Gain on sale of subsidiary, net of tax		–			15,374			–			–			15,374
Net earnings from discontinued operations		–			17,075			–			–			17,075
Net earnings		32,811			44,245			(20,152	)		(24,338	)		32,566
Net loss attributable to noncontrolling interests		–			–			(245	)		–			(245	)
Net earnings (loss) attributable to Brown Shoe Company, Inc.	$	32,811		$	44,245		$	(19,907	)	$	(24,338	)	$	32,811

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE TWENTY-NINE WEEKS ENDED OCTOBER 29, 2011

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net cash (used for) provided by operating activities	$	(59,675	)	$	56,020		$	16,218		$	55		$	12,618

Investing activities
Purchases of property and equipment		(2,211	)		(18,064	)		(2,000	)		–			(22,275	)
Capitalized software		(8,419	)		(288	)		–			–			(8,707	)
Acquisition cost		–			–			(156,636	)		–			(156,636	)
Cash recognized on initial consolidation		–			3,121			–			–			3,121
Net proceeds from sale of subsidiary		–			55,350			–			–			55,350
Net cash (used for) provided by investing activities		(10,630	)		40,119			(158,636	)		–			(129,147	)

Financing activities
Borrowings under revolving credit agreement		1,410,500			–			–			–			1,410,500
Repayments under revolving credit agreement		(1,386,500	)		–			–			–			(1,386,500	)
Proceeds from issuance of 2019 Senior Notes		198,586			–			–			–			198,586
Redemption of 2012 Senior Notes		(150,000	)		–			–			–			(150,000	)
Dividends paid		(9,135	)		–			–			–			(9,135	)
Debt issuance costs		(6,428	)		–			–			–			(6,428	)
Acquisition of treasury stock		(25,484	)		–			–			–			(25,484	)
Proceeds from stock options exercised		734			–			–			–			734
Tax deficiency related to share-based plans		(371	)		–			–			–			(371	)
Intercompany financing		37,194			(96,712	)		59,573			(55	)		–
Net cash provided by (used for) financing activities		69,096			(96,712	)		59,573			(55	)		31,902
Effect of exchange rate changes on cash and cash equivalents		–			30			–			–			30
Decrease in cash and cash equivalents		(1,209	)		(543	)		(82,845	)		–			(84,597	)
Cash and cash equivalents at beginning of period		–			27,095			99,453			–			126,548
Cash and cash equivalents at end of period	$	(1,209	)	$	26,552		$	16,608		$	–		$

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JANUARY 29, 2011

($ thousands)	Parent		Guarantors			Non-Guarantors			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	–	$	27,095		$	99,453		$	–		$	126,548
Receivables		64,742		5,201			43,994			–			113,937
Inventories		119,855		400,578			3,817			–			524,250
Prepaid expenses and other current assets		26,979		15,868			699			–			43,546
Total current assets		211,576		448,742			147,963			–			808,281
Other assets		113,193		19,667			678			–			133,538
Intangible assets, net		53,279		17,280			33			–			70,592
Property and equipment, net		25,850		106,475			3,307			–			135,632
Investment in subsidiaries		598,106		139,601			–			(737,707	)		–
Total assets	$	1,002,004	$	731,765		$	151,981		$	(737,707	)	$	1,148,043

Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	198,000	$	–		$	–		$	–		$	198,000
Trade accounts payable		52,616		75,764			38,810			–			167,190
Other accrued expenses		82,201		58,702			5,812			–			146,715
Total current liabilities		332,817		134,466			44,622			–			511,905
Other liabilities:
Long-term debt		150,000		–			–			–			150,000
Other liabilities		23,228		46,661			340			–			70,229
Intercompany payable (receivable)		80,879		(47,468	)		(33,411	)		–			–
Total other liabilities		254,107		(807	)		(33,071	)		–			220,229
Equity:
Brown Shoe Company, Inc. shareholders' equity		415,080		598,106			139,601			(737,707	)		415,080
Noncontrolling interests		–		–			829			–			829
Total equity		415,080		598,106			140,430			(737,707	)		415,909
Total liabilities and equity	$	1,002,004	$	731,765		$	151,981		$	(737,707	)	$	1,148,043

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF OCTOBER 30, 2010

($ thousands)	Parent		Guarantors			Non-Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	–	$	7,839		$	21,868		$	–		$	29,707
Receivables		103,086		4,252			24,014			–			131,352
Inventories		93,007		443,794			3,080			–			539,881
Prepaid expenses and other current assets		27,889		4,571			(550	)		–			31,910
Total current assets		223,982		460,456			48,412			–			732,850
Other assets		100,367		21,942			687			–			122,996
Intangible assets, net		54,658		17,560			–			–			72,218
Property and equipment, net		25,885		107,491			3,157			–			136,533
Investment in subsidiaries		694,374		85,156			–			(779,530	)		–
Total assets	$	1,099,266	$	692,605		$	52,256		$	(779,530	)	$	1,064,597

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	113,000	$	–		$	–		$	–		$	113,000
Trade accounts payable		44,774		103,701			24,314			–			172,789
Other accrued expenses		75,108		73,516			6,271			–			154,895
Total current liabilities		232,882		177,217			30,585			–			440,684
Other liabilities
Long-term debt		150,000		–			–			–			150,000
Other liabilities		27,540		36,339			306			–			64,185
Intercompany payable (receivable)		280,040		(215,325	)		(64,715	)		–			–
Total other liabilities		457,580		(178,986	)		(64,409	)		–			214,185
Equity
Brown Shoe Company, Inc. shareholders' equity		408,804		694,374			85,156			(779,530	)		408,804
Noncontrolling interests		–		–			924			–			924
Total equity		408,804		694,374			86,080			(779,530	)		409,728
Total liabilities and equity	$	1,099,266	$	692,605		$	52,256		$	(779,530	)	$	1,064,597

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS

FOR THE THIRTEEN WEEKS ENDED OCTOBER 30, 2010

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	228,927		$	494,351		$	50,193		$	(57,378	)	$	716,093
Cost of goods sold		175,908			272,498			42,846			(57,378	)		433,874
Gross profit		53,019			221,853			7,347			–			282,219
Selling and administrative expenses		50,835			192,788			3,466			–			247,089
Restructuring and other special charges, net		1,628			–			224			–			1,852
Equity in (earnings) loss of subsidiaries		(18,659	)		(3,066	)		–			21,725			–
Operating earnings (loss)		19,215			32,131			3,657			(21,725	)		33,278
Interest expense		(4,916	)		–			–			–			(4,916	)
Interest income		1			18			27			–			46
Intercompany interest income (expense)		3,545			(3,323	)		(222	)		–			–
Earnings (loss) from continuing operations before income taxes		17,845			28,826			3,462			(21,725	)		28,408
Income tax benefit (provision)		728			(10,167	)		(479	)		–			(9,918	)
Net earnings (loss) from continuing operations		18,573			18,659			2,983			(21,725	)		18,490
Discontinued operations:
Earnings from operations of subsidiary, net of tax		–			–			–			–			–
Gain on sale of subsidiary, net of tax		–			–			–			–			–
Net earnings from discontinued operations		–			–			–			–			–
Net earnings (loss)		18,573			18,659			2,983			(21,725	)		18,490
Net loss attributable to noncontrolling interests		–			–			(83	)		–			(83	)
Net earnings (loss) attributable to Brown Shoe Company, Inc.	$	18,573		$	18,659		$	3,066		$	(21,725	)	$	18,573

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS

FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 30, 2010

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	561,990		$	1,332,309		$	150,966		$	(145,698	)	$	1,899,567
Cost of goods sold		423,599			725,972			127,445			(145,698	)		1,131,318
Gross profit		138,391			606,337			23,521			–			768,249
Selling and administrative expenses		146,868			539,198			9,986			–			696,052
Restructuring and other special charges, net		4,901			–			559			–			5,460
Equity in (earnings) loss of subsidiaries		(45,026	)		(7,376	)		–			52,402			–
Operating earnings (loss)		31,648			74,515			12,976			(52,402	)		66,737
Interest expense		(14,234	)		(4	)		–			–			(14,238	)
Interest income		–			48			65			–			113
Intercompany interest income (expense)		10,623			(6,740	)		(3,883	)		–			–
Earnings (loss) before income taxes		28,037			67,819			9,158			(52,402	)		52,612
Income tax benefit (provision)		5,843			(22,483	)		(2,159	)		–			(18,799	)
Net earnings (loss) from continuing operations		33,880			45,336			6,999			(52,402	)		33,813
Discontinued operations:
Earnings from operations of subsidiary, net of tax		–			–			–			–			–
Gain on sale of subsidiary, net of tax		–			–			–			–			–
Net earnings from discontinued operations		–			–			–			–			–
Net earnings (loss)		33,880			45,336			6,999			(52,402	)		33,813
Net earnings (loss) attributable to noncontrolling interests		–			310			(377	)		–			(67	)
Net earnings (loss) attributable to Brown Shoe Company, Inc.	$	33,880		$	45,026		$	7,376		$	(52,402	)	$	33,880

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 30, 2010

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations		Total
Net cash (used for) provided by operating activities	$	(60,463	)	$	12,633		$	14,992		$	–	$	(32,838	)

Investing activities
Purchases of property and equipment		(3,747	)		(18,174	)		(361	)		–		(22,282	)
Capitalized software		(18,385	)		(247	)		–			–		(18,632	)
Net cash used for investing activities		(22,132	)		(18,421	)		(361	)		–		(40,914	)

Financing activities
Borrowings under revolving credit agreement		753,000			–			–			–		753,000
Repayments under revolving credit agreement		(734,500	)		–			–			–		(734,500	)
Acquisition of noncontrolling interests		65,620			39,222			(104,842	)		–		–
Dividends paid		7,309			(40,001	)		–			–		(32,692	)
Proceeds from stock options exercised		(9,183	)		5,010			(5,010	)		–		(9,183	)
Contributions by noncontrolling interests		561			–			–			–		561
Tax deficiency related to share-based plans		–			–			527			–		527
Intercompany financing		(212	)		–			–			–		(212	)
Net cash provided by (used for) financing activities		82,595			4,231			(109,325	)		–		(22,499	)
Effect of exchange rate changes on cash		–			125			–			–		125
Decrease in cash and cash equivalents		–			(1,432	)		(94,694	)		–		(96,126	)
Cash and cash equivalents at beginning of period		–			9,271			116,562			–		125,833
Cash and cash equivalents at end of period	$	–		$	7,839		$	21,868		$	–	$	29,707