

Note 17	Financial Information for the Company and its Subsidiaries

The Company 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 our revolving credit facility ("Credit Agreement"). 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. On December 13, 2016, Allen Edmonds was joined to the Credit Agreement as a guarantor. After giving effect to the joinder, the Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC and Allen Edmonds are each co-borrowers and guarantors under the Credit Agreement.

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
OCTOBER 28, 2017
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	8,155	$	7,947	$	15,277		$	—		$	31,379
Receivables, net	116,974		3,987		11,981			—			132,942
Inventories, net	127,142		441,683		29,540			—			598,365
Prepaid expenses and other current assets	20,642		17,872		7,263			(4,795		)	40,982
Intercompany receivable – current	1,597		123		20,677			(22,397		)	—
Total current assets	274,510		471,612		84,738			(27,192		)	803,668
Other assets	50,565		16,877		874			—			68,316
Goodwill and intangible assets, net	111,665		40,937		187,580			—			340,182
Property and equipment, net	32,684		169,604		12,694			—			214,982
Investment in subsidiaries	1,288,128		—		(23,180		)	(1,264,948		)	—
Intercompany receivable – noncurrent	744,127		527,670		677,419			(1,949,216		)	—
Total assets	$	2,501,679	$	1,226,700	$	940,125		$	(3,241,356	)	$	1,427,148

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	20,000	$	—	$	—		$	—		$	20,000
Trade accounts payable	65,604		139,219		19,009			—			223,832
Other accrued expenses	64,525		95,817		17,940			(4,795		)	173,487
Intercompany payable – current	12,833		—		9,564			(22,397		)	—
Total current liabilities	162,962		235,036		46,513			(27,192		)	417,319
Other liabilities
Long-term debt	197,348		—		—			—			197,348
Other liabilities	93,029		39,150		5,215			—			137,394
Intercompany payable – noncurrent	1,374,695		121,683		452,838			(1,949,216		)	—
Total other liabilities	1,665,072		160,833		458,053			(1,949,216		)	334,742
Equity
Caleres, Inc. shareholders’ equity	673,645		830,831		434,117			(1,264,948		)	673,645
Noncontrolling interests	—		—		1,442			—			1,442
Total equity	673,645		830,831		435,559			(1,264,948		)	675,087
Total liabilities and equity	$	2,501,679	$	1,226,700	$	940,125		$	(3,241,356	)	$	1,427,148



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED OCTOBER 28, 2017
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	226,019		$	541,007		$	47,765		$	(40,135	)	$	774,656
Cost of goods sold	152,714			313,646			23,351			(31,940		)	457,771
Gross profit	73,305			227,361			24,414			(8,195		)	316,885
Selling and administrative expenses	59,335			197,481			15,394			(8,195		)	264,015
Operating earnings	13,970			29,880			9,020			—			52,870
Interest expense	(4,140		)	(1		)	—			—			(4,141		)
Interest income	47			—			48			—			95
Intercompany interest income (expense)	1,981			(2,003		)	22			—			—
Earnings before income taxes	11,858			27,876			9,090			—			48,824
Income tax provision	(3,963		)	(9,479		)	(1,009		)	—			(14,451		)
Equity in earnings (loss) of subsidiaries, net of tax	26,492			—			(457		)	(26,035		)	—
Net earnings	34,387			18,397			7,624			(26,035		)	34,373
Less: Net loss attributable to noncontrolling interests	—			—			(14		)	—			(14		)
Net earnings attributable to Caleres, Inc.	$	34,387		$	18,397		$	7,638		$	(26,035	)	$	34,387

Comprehensive income	$	34,305		$	18,397		$	7,457		$	(25,857	)	$	34,302
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(3		)	—			(3		)
Comprehensive income attributable to Caleres, Inc.	$	34,305		$	18,397		$	7,460		$	(25,857	)	$	34,305



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 28, 2017
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	614,764		$	1,451,191		$	148,985		$	(131,821	)	$	2,083,119
Cost of goods sold	423,224			815,980			74,424			(105,763		)	1,207,865
Gross profit	191,540			635,211			74,561			(26,058		)	875,254
Selling and administrative expenses	172,122			570,272			45,254			(26,058		)	761,590
Restructuring and other special charges, net	3,769			37			167			—			3,973
Operating earnings	15,649			64,902			29,140			—			109,691
Interest expense	(13,809		)	(13		)	—			—			(13,822		)
Interest income	220			—			372			—			592
Intercompany interest income (expense)	6,085			(6,516		)	431			—			—
Earnings before income taxes	8,145			58,373			29,943			—			96,461
Income tax provision	(2,124		)	(21,407		)	(5,999		)	—			(29,530		)
Equity in earnings (loss) of subsidiaries, net of tax	60,863			—			(1,234		)	(59,629		)	—
Net earnings	66,884			36,966			22,710			(59,629		)	66,931
Less: Net earnings attributable to noncontrolling interests	—			—			47			—			47
Net earnings attributable to Caleres, Inc.	$	66,884		$	36,966		$	22,663		$	(59,629	)	$	66,884

Comprehensive income	$	69,170		$	36,966		$	23,212		$	(60,105	)	$	69,243
Less: Comprehensive income attributable to noncontrolling interests	—			—			73			—			73
Comprehensive income attributable to Caleres, Inc.	$	69,170		$	36,966		$	23,139		$	(60,105	)	$	69,170



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 28, 2017
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations		Total
Net cash (used for) provided by operating activities	$	(13,179	)	$	97,443		$	37,997		$	—	$	122,261

Investing activities
Purchases of property and equipment	(5,340		)	(25,377		)	(3,647		)	—		(34,364		)
Capitalized software	(4,079		)	(452		)	—			—		(4,531		)
Intercompany investing	(20,058		)	197,763			(177,705		)	—		—
Net cash (used for) provided by investing activities	(29,477		)	171,934			(181,352		)	—		(38,895		)

Financing activities
Borrowings under revolving credit agreement	450,000			—			—			—		450,000
Repayments under revolving credit agreement	(540,000		)	—			—			—		(540,000		)
Dividends paid	(9,033		)	—			—			—		(9,033		)
Acquisition of treasury stock	(5,993		)	—			—			—		(5,993		)
Issuance of common stock under share-based plans, net	(2,477		)	—			—			—		(2,477		)
Intercompany financing	134,315			(270,459		)	136,144			—		—
Net cash provided by (used for) financing activities	26,812			(270,459		)	136,144			—		(107,503		)
Effect of exchange rate changes on cash and cash equivalents	—			—			184			—		184
Decrease in cash and cash equivalents	(15,844		)	(1,082		)	(7,027		)	—		(23,953		)
Cash and cash equivalents at beginning of period	23,999			9,029			22,304			—		55,332
Cash and cash equivalents at end of period	$	8,155		$	7,947		$	15,277		$	—	$	31,379



UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
OCTOBER 29, 2016
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	50,463	$	5,897	$	117,075		$	—		$	173,435
Receivables, net	123,345		856		15,274			—			139,475
Inventories, net	114,180		387,688		22,955			—			524,823
Prepaid expenses and other current assets	12,766		13,649		5,301			—			31,716
Intercompany receivable – current	823		327		15,766			(16,916		)	—
Total current assets	301,577		408,417		176,371			(16,916		)	869,449
Other assets	92,895		14,106		7,850			—			114,851
Goodwill and intangible assets, net	113,889		2,800		11,452			—			128,141
Property and equipment, net	30,902		149,680		11,172			—			191,754
Investment in subsidiaries	1,076,592		—		(21,068		)	(1,055,524		)	—
Intercompany receivable – noncurrent	485,403		384,452		573,308			(1,443,163		)	—
Total assets	$	2,101,258	$	959,455	$	759,085		$	(2,515,603	)	$	1,304,195

Liabilities and Equity
Current liabilities
Trade accounts payable	$	70,501	$	123,003	$	18,584		$	—		$	212,088
Other accrued expenses	48,614		75,797		17,475			—			141,886
Intercompany payable – current	5,145		—		11,771			(16,916		)	—
Total current liabilities	124,260		198,800		47,830			(16,916		)	353,974
Other liabilities
Long-term debt	196,888		—		—			—			196,888
Other liabilities	34,463		68,146		3,661			—			106,270
Intercompany payable – noncurrent	1,099,537		41,933		301,693			(1,443,163		)	—
Total other liabilities	1,330,888		110,079		305,354			(1,443,163		)	303,158
Equity
Caleres, Inc. shareholders’ equity	646,110		650,576		404,948			(1,055,524		)	646,110
Noncontrolling interests	—		—		953			—			953
Total equity	646,110		650,576		405,901			(1,055,524		)	647,063
Total liabilities and equity	$	2,101,258	$	959,455	$	759,085		$	(2,515,603	)	$	1,304,195



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED OCTOBER 29, 2016
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	235,094		$	487,558		$	48,055		$	(38,477	)	$	732,230
Cost of goods sold	162,629			281,926			25,669			(31,765		)	438,459
Gross profit	72,465			205,632			22,386			(6,712		)	293,771
Selling and administrative expenses	53,225			177,466			14,340			(6,712		)	238,319
Operating earnings	19,240			28,166			8,046			—			55,452
Interest expense	(3,472		)	(3		)	—			—			(3,475		)
Interest income	200			—			150			—			350
Intercompany interest income (expense)	2,083			(2,107		)	24			—			—
Earnings before income taxes	18,051			26,056			8,220			—			52,327
Income tax provision	(6,193		)	(9,743		)	(1,665		)	—			(17,601		)
Equity in earnings (loss) of subsidiaries, net of tax	22,872			—			(499		)	(22,373		)	—
Net earnings	34,730			16,313			6,056			(22,373		)	34,726
Less: Net loss attributable to noncontrolling interests	—			—			(4		)	—			(4		)
Net earnings attributable to Caleres, Inc.	$	34,730		$	16,313		$	6,060		$	(22,373	)	$	34,730

Comprehensive income	$	33,816		$	16,313		$	5,661		$	(21,999	)	$	33,791
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(25		)	—			(25		)
Comprehensive income attributable to Caleres, Inc.	$	33,816		$	16,313		$	5,686		$	(21,999	)	$	33,816



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 29, 2016
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	617,177		$	1,279,080		$	156,649		$	(113,006	)	$	1,939,900
Cost of goods sold	434,833			707,584			87,688			(91,324		)	1,138,781
Gross profit	182,344			571,496			68,961			(21,682		)	801,119
Selling and administrative expenses	155,608			505,032			45,708			(21,682		)	684,666
Operating earnings	26,736			66,464			23,253			—			116,453
Interest expense	(10,561		)	(3		)	—			—			(10,564		)
Interest income	531			—			376			—			907
Intercompany interest income (expense)	6,590			(6,685		)	95			—			—
Earnings before income taxes	23,296			59,776			23,724			—			106,796
Income tax provision	(7,369		)	(22,483		)	(4,662		)	—			(34,514		)
Equity in earnings (loss) of subsidiaries, net of tax	56,353			—			(1,545		)	(54,808		)	—
Net earnings	72,280			37,293			17,517			(54,808		)	72,282
Less: Net earnings attributable to noncontrolling interests	—			—			2			—			2
Net earnings attributable to Caleres, Inc.	$	72,280		$	37,293		$	17,515		$	(54,808	)	$	72,280

Comprehensive income	$	71,871		$	37,293		$	17,692		$	(55,020	)	$	71,836
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(35		)	—			(35		)
Comprehensive income attributable to Caleres, Inc.	$	71,871		$	37,293		$	17,727		$	(55,020	)	$	71,871



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED OCTOBER 29, 2016
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations		Total
Net cash provided by operating activities	$	23,770		$	83,584		$	29,649		$	—	$	137,003

Investing activities
Purchases of property and equipment	(2,748		)	(37,154		)	(3,117		)	—		(43,019		)
Capitalized software	(3,859		)	(1,783		)	(30		)	—		(5,672		)
Intercompany investing	(3,129		)	3,129			—			—		—
Net cash used for investing activities	(9,736		)	(35,808		)	(3,147		)	—		(48,691		)

Financing activities
Borrowings under revolving credit agreement	103,000			—			—			—		103,000
Repayments under revolving credit agreement	(103,000		)	—			—			—		(103,000		)
Dividends paid	(9,094		)	—			—			—		(9,094		)
Acquisition of treasury stock	(23,139		)	—			—			—		(23,139		)
Issuance of common stock under share-based plans, net	(4,205		)	—			—			—		(4,205		)
Excess tax benefit related to share-based plans	3,264			—			—			—		3,264
Intercompany financing	38,603			(41,879		)	3,276			—		—
Net cash provided by (used for) financing activities	5,429			(41,879		)	3,276			—		(33,174		)
Effect of exchange rate changes on cash and cash equivalents	—			—			146			—		146
Increase in cash and cash equivalents	19,463			5,897			29,924			—		55,284
Cash and cash equivalents at beginning of period	31,000			—			87,151			—		118,151
Cash and cash equivalents at end of period	$	50,463		$	5,897		$	117,075		$	—	$	173,435



CONDENSED CONSOLIDATING BALANCE SHEET
JANUARY 28, 2017
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	23,999	$	9,029	$	22,304		$	—		$	55,332
Receivables, net	118,746		5,414		28,961			—			153,121
Inventories, net	150,098		410,867		24,799			—			585,764
Prepaid expenses and other current assets	24,293		23,040		8,058			(5,863		)	49,528
Intercompany receivable – current	695		263		22,091			(23,049		)	—
Total current assets	317,831		448,613		106,213			(28,912		)	843,745
Other assets	51,181		16,567		826			—			68,574
Goodwill and intangible assets, net	113,333		219,337		11,088			—			343,758
Property and equipment, net	31,424		176,358		11,414			—			219,196
Investment in subsidiaries	1,343,954		—		(21,946		)	(1,322,008		)	—
Intercompany receivable – noncurrent	568,541		366,902		581,624			(1,517,067		)	—
Total assets	$	2,426,264	$	1,227,777	$	689,219		$	(2,867,987	)	$	1,475,273

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	110,000	$	—	$	—		$	—		$	110,000
Trade accounts payable	116,783		112,434		37,153			—			266,370
Other accrued expenses	74,941		65,228		16,919			(5,863		)	151,225
Intercompany payable – current	12,794		—		10,255			(23,049		)	—
Total current liabilities	314,518		177,662		64,327			(28,912		)	527,595
Other liabilities
Long-term debt	197,003		—		—			—			197,003
Other liabilities	91,683		40,507		3,999			—			136,189
Intercompany payable – noncurrent	1,209,943		98,982		208,142			(1,517,067		)	—
Total other liabilities	1,498,629		139,489		212,141			(1,517,067		)	333,192
Equity
Caleres, Inc. shareholders’ equity	613,117		910,626		411,382			(1,322,008		)	613,117
Noncontrolling interests	—		—		1,369			—			1,369
Total equity	613,117		910,626		412,751			(1,322,008		)	614,486
Total liabilities and equity	$	2,426,264	$	1,227,777	$	689,219		$	(2,867,987	)	$	1,475,273