Note 16

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. The following table presents the 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 Guarantors are 100% owned by the Parent. On May 14, 2013, during the second quarter of 2013, ASG was sold and ceased to be a borrower under the Credit Agreement. ASG is included as a “Guarantor” in the financial statements through the sale date. The proceeds from the sale were utilized to pay down the Company’s revolving credit facility. See Note 3 to the condensed consolidated financial statements for further information on the sale of ASG.

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 MAY 3, 2014
						Non-
($ thousands)		Parent		Guarantors		Guarantors		Eliminations		Total
Assets
Current assets
Cash and cash equivalents	$	–	$	25,528	$	11,140	$	–	$	36,668
Receivables, net		83,713		1,412		20,621		–		105,746
Inventories, net		93,159		414,424		5,228		–		512,811
Prepaid expenses and other current assets		34,476		507		2,930		–		37,913
Intercompany receivable – current		981		368		10,655		(12,004)		–
Total current assets		212,329		442,239		50,574		(12,004)		693,138
Other assets		120,941		14,678		637		–		136,256
Goodwill and intangible assets, net		119,666		18,084		–		–		137,750
Property and equipment, net		27,303		112,630		1,885		–		141,818
Investment in subsidiaries		879,965		169,843		–		(1,049,808)		–
Intercompany receivable – noncurrent		450,481		500,580		242,150		(1,193,211)		–
Total assets	$	1,810,685	$	1,258,054	$	295,246	$	(2,255,023)	$	1,108,962

Liabilities and Equity
Current liabilities
Trade accounts payable	$	48,509	$	123,656	$	23,538	$	–	$	195,703
Other accrued expenses		69,665		64,082		7,971		–		141,718
Intercompany payable – current		2,367		59		9,578		(12,004)		–
Total current liabilities		120,541		187,797		41,087		(12,004)		337,421
Other liabilities
Long-term debt		199,057		–		–		–		199,057
Other liabilities		33,499		44,745		1,469		–		79,713
Intercompany payable – noncurrent		965,515		145,547		82,149		(1,193,211)		–
Total other liabilities		1,198,071		190,292		83,618		(1,193,211)		278,770
Equity
Brown Shoe Company, Inc. shareholders’ equity		492,073		879,965		169,843		(1,049,808)		492,073
Noncontrolling interests		–		–		698		–		698
Total equity		492,073		879,965		170,541		(1,049,808)		492,771
Total liabilities and equity	$	1,810,685	$	1,258,054	$	295,246	$	(2,255,023)	$	1,108,962



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED MAY 3, 2014
						Non-
($ thousands)		Parent		Guarantors		Guarantors		Eliminations		Total
Net sales	$	179,160	$	401,580	$	36,624	$	(26,202)	$	591,162
Cost of goods sold		127,466		218,366		29,191		(26,202)		348,821
Gross profit		51,694		183,214		7,433		–		242,341
Selling and administrative expenses		49,197		159,967		4,451		–		213,615
Operating earnings		2,497		23,247		2,982		–		28,726
Interest expense		(5,305)		(1)		–		–		(5,306)
Interest income		1		59		16		–		76
Intercompany interest income (expense)		3,974		(4,079)		105		–		–
Earnings before income taxes		1,167		19,226		3,103		–		23,496
Income tax benefit (provision)		464		(7,954)		(530)		–		(8,020)
Equity in earnings of subsidiaries, net of tax		13,798		2,526		–		(16,324)		–
Net earnings		15,429		13,798		2,573		(16,324)		15,476
Less: Net earnings attributable to noncontrolling interests		–		–		47		–		47
Net earnings attributable to Brown Shoe Company, Inc.	$	15,429	$	13,798	$	2,526	$	(16,324)	$	15,429

Comprehensive income	$	15,918	$	14,355	$	2,520	$	(16,840)	$	15,953
Less: Comprehensive income attributable to noncontrolling interests		–		–		35		–		35
Comprehensive income attributable to Brown Shoe Company, Inc.	$	15,918	$	14,355	$	2,485	$	(16,840)	$	15,918


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED MAY 3, 2014
						Non-
($ thousands)		Parent		Guarantors		Guarantors		Eliminations		Total
Net cash (used for) provided by operating activities	$	(3,343)	$	25,854	$	13,872	$	–	$	36,383

Investing activities
Purchases of property and equipment		(1,866)		(5,411)		(104)		–		(7,381)
Capitalized software		(1,171)		(43)		(31)		–		(1,245)
Acquisition of trademarks		(65,065)		–		–		–		(65,065)
Intercompany investing		(533)		533		–		–		–
Net cash used for investing activities		(68,635)		(4,921)		(135)		–		(73,691)

Financing activities
Borrowings under revolving credit agreement		251,000		–		–		–		251,000
Repayments under revolving credit agreement		(258,000)		–		–		–		(258,000)
Dividends paid		(3,053)		–		–		–		(3,053)
Issuance of common stock under share-based plans, net		(803)		–		–		–		(803)
Tax benefit related to share-based plans		1,769		–		–		–		1,769
Intercompany financing		81,065		(25,924)		(55,141)		–		–
Net cash provided by (used for) financing activities		71,978		(25,924)		(55,141)		–		(9,087)
Effect of exchange rate changes on cash and cash equivalents		–		517		–		–		517
Decrease in cash and cash equivalents		–		(4,474)		(41,404)		–		(45,878)
Cash and cash equivalents at beginning of period		–		30,002		52,544		–		82,546
Cash and cash equivalents at end of period	$	–	$	25,528	$	11,140	$	–	$	36,668


CONDENSED CONSOLIDATING BALANCE SHEET
AS OF FEBRUARY 1, 2014
						Non-
($ thousands)		Parent		Guarantors		Guarantors		Eliminations		Total
Assets
Current assets
Cash and cash equivalents	$	–	$	30,002	$	52,544	$	–	$	82,546
Receivables, net		84,428		2,349		42,440		–		129,217
Inventories, net		119,131		421,101		7,299		–		547,531
Prepaid expenses and other current assets		38,069		16,024		3,984		(24,941)		33,136
Current assets – discontinued operations		119		–		–		–		119
Intercompany receivable – current		602		191		8,860		(9,653)		–
Total current assets		242,349		469,667		115,127		(34,594)		792,549
Other assets		123,066		15,864		691		–		139,621
Goodwill and intangible assets, net		55,225		18,448		–		–		73,673
Property and equipment, net		27,201		114,359		2,000		–		143,560
Investment in subsidiaries		865,700		165,970		–		(1,031,670)		–
Intercompany receivable – noncurrent		457,507		482,180		230,572		(1,170,259)		–
Total assets	$	1,771,048	$	1,266,488	$	348,390	$	(2,236,523)	$	1,149,403

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	7,000	$	–	$	–	$	–	$	7,000
Trade accounts payable		72,349		116,604		37,649		–		226,602
Other accrued expenses		81,902		87,045		8,539		(24,941)		152,545
Current liabilities – discontinued operations		708		–		–		–		708
Intercompany payable – current		4,689		766		4,198		(9,653)		–
Total current liabilities		166,648		204,415		50,386		(34,594)		386,855
Other liabilities
Long-term debt		199,010		–		–		–		199,010
Other liabilities		38,657		46,055		1,464		–		86,176
Intercompany payable – noncurrent		890,034		150,318		129,907		(1,170,259)		–
Total other liabilities		1,127,701		196,373		131,371		(1,170,259)		285,186
Equity
Brown Shoe Company, Inc. shareholders’ equity		476,699		865,700		165,970		(1,031,670)		476,699
Noncontrolling interests		–		–		663		–		663
Total equity		476,699		865,700		166,633		(1,031,670)		477,362
Total liabilities and equity	$	1,771,048	$	1,266,488	$	348,390	$	(2,236,523)	$	1,149,403


UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
AS OF MAY 4, 2013
						Non-
($ thousands)		Parent		Guarantors		Guarantors		Eliminations		Total
Assets
Current assets
Cash and cash equivalents	$	–	$	29,202	$	15,467	$	–	$	44,669
Receivables, net		67,017		6,079		23,638		–		96,734
Inventories, net		79,768		400,139		6,016		–		485,923
Prepaid expenses and other current assets		41,977		1,251		(61)		–		43,167
Current assets – held for sale		–		–		12,496		–		12,496
Current assets – discontinued operations		2,542		36,605		12		–		39,159
Intercompany receivable – current		786		246		19,236		(20,268)		–
Total current assets		192,090		473,522		76,804		(20,268)		722,148
Other assets		98,431		16,562		598		–		115,591
Goodwill and intangible assets, net		36,203		19,538		25,255		–		80,996
Noncurrent assets – discontinued operations		–		1,321		37,352		–		38,673
Property and equipment, net		26,484		108,416		2,399		–		137,299
Investment in subsidiaries		759,545		(28,096)		(3,597)		(727,852)		–
Intercompany receivable – noncurrent		343,110		546,265		180,056		(1,069,431)		–
Total assets	$	1,455,863	$	1,137,528	$	318,867	$	(1,817,551)	$	1,094,707

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	66,000	$	–	$	–	$	–	$	66,000
Trade accounts payable		31,065		129,630		28,253		–		188,948
Other accrued expenses		55,497		59,651		3,484		–		118,632
Current liabilities – held for sale		–		–		5,306		–		5,306
Current liabilities – discontinued operations		11,343		4,796		44		–		16,183
Intercompany payable – current		5,231		37		15,000		(20,268)		–
Total current liabilities		169,136		194,114		52,087		(20,268)		395,069
Other liabilities
Long-term debt		198,870		–		–		–		198,870
Other liabilities		26,685		50,003		4,378		–		81,066
Noncurrent liabilities – discontinued operations		(1,105)		(2,535)		10,408		–		6,768
Intercompany payable – noncurrent		650,087		136,401		282,943		(1,069,431)		–
Total other liabilities		874,537		183,869		297,729		(1,069,431)		286,704
Equity
Brown Shoe Company, Inc. shareholders’ equity		412,190		759,545		(31,693)		(727,852)		412,190
Noncontrolling interests		–		–		744		–		744
Total equity		412,190		759,545		(30,949)		(727,852)		412,934
Total liabilities and equity	$	1,455,863	$	1,137,528	$	318,867	$	(1,817,551)	$	1,094,707


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED MAY 4, 2013
						Non-
($ thousands)		Parent		Guarantors		Guarantors		Eliminations		Total
Net sales	$	158,781	$	418,538	$	42,604	$	(31,267)	$	588,656
Cost of goods sold		116,330		229,956		33,621		(31,267)		348,640
Gross profit		42,451		188,582		8,983		–		240,016
Selling and administrative expenses		50,000		159,852		4,027		–		213,879
Restructuring and other special charges, net		519		–		–		–		519
Impairment of assets held for sale		–		–		4,660		–		4,660
Operating (loss) earnings		(8,068)		28,730		296		–		20,958
Interest expense		(5,630)		(91)		–		–		(5,721)
Interest income		3		64		1		–		68
Intercompany interest income (expense)		3,454		(3,579)		125		–		–
(Loss) earnings before income taxes from continuing operations		(10,241)		25,124		422		–		15,305
Income tax benefit (provision)		3,382		(10,566)		(762)		–		(7,946)
Equity in earnings (loss) from continuing operations of subsidiaries, net of tax		14,288		(270)		225		(14,243)		–
Net earnings (loss) from continuing operations		7,429		14,288		(115)		(14,243)		7,359
Discontinued operations:
(Loss) earnings from discontinued operations, net of tax		(6,948)		1,591		(280)		–		(5,637)
Disposition/impairment of discontinued operations, net of tax		–		–		(12,554)		–		(12,554)
Equity in loss from discontinued operations of subsidiaries, net of tax		(11,243)		(12,834)		–		24,077		–
Net (loss) earnings from discontinued operations		(18,191)		(11,243)		(12,834)		24,077		(18,191)
Net (loss) earnings		(10,762)		3,045		(12,949)		9,834		(10,832)
Less: Net loss attributable to noncontrolling interests		–		–		(70)		–		(70)
Net (loss) earnings attributable to Brown Shoe Company, Inc.	$	(10,762)	$	3,045	$	(12,879)	$	9,834	$	(10,762)

Comprehensive (loss) income	$	(11,463)		2,445		(12,920)		10,447		(11,491)
Less: Comprehensive loss attributable to noncontrolling interests		–		–		(28)		–		(28)
Comprehensive (loss) income attributable to Brown Shoe Company, Inc.	$	(11,463)	$	2,445	$	(12,892)	$	10,447	$	(11,463)


UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED MAY 4, 2013
						Non-
($ thousands)		Parent		Guarantors		Guarantors		Eliminations		Total
Net cash (used for) provided by operating activities	$	(27,728)	$	44,941	$	8,748	$	–	$	25,961

Investing activities
Purchases of property and equipment		(778)		(6,406)		(183)		–		(7,367)
Capitalized software		(1,040)		–		–		–		(1,040)
Net proceeds from sale of subsidiaries		1,500		–		–		–		1,500
Net cash used for investing activities		(318)		(6,406)		(183)		–		(6,907)

Financing activities
Borrowings under revolving credit agreement		383,000		–		–		–		383,000
Repayments under revolving credit agreement		(422,000)		–		–		–		(422,000)
Dividends paid		(3,027)		–		–		–		(3,027)
Issuance of common stock under share-based plans, net		(2,070)		–		–		–		(2,070)
Tax benefit related to share-based plans		1,962		–		–		–		1,962
Intercompany financing		70,181		(40,920)		(29,261)		–		–
Net cash provided by (used for) financing activities		28,046		(40,920)		(29,261)		–		(42,135)
Effect of exchange rate changes on cash and cash equivalents		–		(473)		–		–		(473)
Decrease in cash and cash equivalents		–		(2,858)		(20,696)		–		(23,554)
Cash and cash equivalents at beginning of period		–		32,060		36,163		–		68,223
Cash and cash equivalents at end of period	$	–	$	29,202	$	15,467	$	–	$	44,669