

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
AUGUST 4, 2018
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	14,182	$	30,730	$	57,972		$	—		$	102,884
Receivables, net	127,466		3,788		22,167			—			153,421
Inventories, net	164,595		518,024		33,086			—			715,705
Prepaid expenses and other current assets	38,183		29,274		7,240			(12,538		)	62,159
Intercompany receivable – current	170		94		17,656			(17,920		)	—
Total current assets	344,596		581,910		138,121			(30,458		)	1,034,169
Other assets	75,790		12,621		1,290			—			89,701
Goodwill and intangible assets, net	111,728		40,937		209,384			—			362,049
Property and equipment, net	35,682		160,223		11,821			—			207,726
Investment in subsidiaries	1,375,185		—		(24,159		)	(1,351,026		)	—
Intercompany receivable – noncurrent	797,184		527,462		720,698			(2,045,344		)	—
Total assets	$	2,740,165	$	1,323,153	$	1,057,155		$	(3,426,828	)	$	1,693,645

Liabilities and Equity
Current liabilities
Trade accounts payable	$	165,241	$	202,310	$	32,840		$	—		$	400,391
Other accrued expenses	83,094		100,567		24,864			(12,538		)	195,987
Intercompany payable – current	10,852		—		7,068			(17,920		)	—
Total current liabilities	259,187		302,877		64,772			(30,458		)	596,378
Other liabilities
Long-term debt	197,702		—		—			—			197,702
Other liabilities	118,125		39,124		5,122			—			162,371
Intercompany payable – noncurrent	1,429,298		93,335		522,711			(2,045,344		)	—
Total other liabilities	1,745,125		132,459		527,833			(2,045,344		)	360,073
Equity
Caleres, Inc. shareholders’ equity	735,853		887,817		463,209			(1,351,026		)	735,853
Noncontrolling interests	—		—		1,341			—			1,341
Total equity	735,853		887,817		464,550			(1,351,026		)	737,194
Total liabilities and equity	$	2,740,165	$	1,323,153	$	1,057,155		$	(3,426,828	)	$	1,693,645



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED AUGUST 4, 2018
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	212,252		$	501,803		$	64,765		$	(72,208	)	$	706,612
Cost of goods sold	150,630			288,580			33,409			(59,108		)	413,511
Gross profit	61,622			213,223			31,356			(13,100		)	293,101
Selling and administrative expenses	73,587			185,510			12,838			(13,100		)	258,835
Restructuring and other special charges, net	324			1,799			—			—			2,123
Operating (loss) earnings	(12,289		)	25,914			18,518			—			32,143
Interest (expense) income	(3,805		)	(13		)	216			—			(3,602		)
Other income (expense)	3,084			—			(6		)	—			3,078
Intercompany interest income (expense)	2,873			(2,900		)	27			—			—
(Loss) earnings before income taxes	(10,137		)	23,001			18,755			—			31,619
Income tax benefit (provision)	1,900			(6,833		)	(3,075		)	—			(8,008		)
Equity in earnings (loss) of subsidiaries, net of tax	31,883			—			(116		)	(31,767		)	—
Net earnings	23,646			16,168			15,564			(31,767		)	23,611
Less: Net loss attributable to noncontrolling interests	—			—			(35		)	—			(35		)
Net earnings attributable to Caleres, Inc.	$	23,646		$	16,168		$	15,599		$	(31,767	)	$	23,646

Comprehensive income	$	22,999		$	16,158		$	15,467		$	(31,717	)	$	22,907
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(92		)	—			(92		)
Comprehensive income attributable to Caleres, Inc.	$	22,999		$	16,158		$	15,559		$	(31,717	)	$	22,999




UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE TWENTY-SIX WEEKS ENDED AUGUST 4, 2018
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	411,512		$	947,498		$	102,157		$	(122,413	)	$	1,338,754
Cost of goods sold	285,223			536,379			51,276			(102,147		)	770,731
Gross profit	126,289			411,119			50,881			(20,266		)	568,023
Selling and administrative expenses	139,930			363,396			25,973			(20,266		)	509,033
Restructuring and other special charges, net	848			3,052			—			—			3,900
Operating (loss) earnings	(14,489		)	44,671			24,908			—			55,090
Interest (expense) income	(7,624		)	(25		)	364			—			(7,285		)
Other income (expense)	6,204			—			(35		)	—			6,169
Intercompany interest income (expense)	5,641			(5,699		)	58			—			—
(Loss) earnings before income taxes	(10,268		)	38,947			25,295			—			53,974
Income tax benefit (provision)	947			(10,135		)	(3,995		)	—			(13,183		)
Equity in earnings (loss) of subsidiaries, net of tax	50,179			—			(594		)	(49,585		)	—
Net earnings	40,858			28,812			20,706			(49,585		)	40,791
Less: Net loss attributable to noncontrolling interests	—			—			(67		)	—			(67		)
Net earnings attributable to Caleres, Inc.	$	40,858		$	28,812		$	20,773		$	(49,585	)	$	40,858

Comprehensive income	$	39,324		$	28,784		$	20,462		$	(49,378	)	$	39,192
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(132		)	—			(132		)
Comprehensive income attributable to Caleres, Inc.	$	39,324		$	28,784		$	20,594		$	(49,378	)	$	39,324



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED AUGUST 4, 2018
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations		Total
Net cash provided by operating activities	$	11,317		$	53,920		$	25,770		$	—	$	91,007

Investing activities
Purchases of property and equipment	(4,339		)	(13,044		)	(1,176		)	—		(18,559		)
Capitalized software	(2,665		)	(286		)	—			—		(2,951		)
Acquisition cost, net of cash received	9,141			—			(25,934		)	—		(16,793		)
Intercompany investing	141			(141		)	—			—		—
Net cash provided by (used for) investing activities	2,278			(13,471		)	(27,110		)	—		(38,303		)

Financing activities
Dividends paid	(6,053		)	—			—			—		(6,053		)
Acquisition of treasury stock	(3,288		)	—			—			—		(3,288		)
Issuance of common stock under share-based plans, net	(4,365		)	—			—			—		(4,365		)
Intercompany financing	(11,796		)	(9,719		)	21,515			—		—
Net cash (used for) provided by financing activities	(25,502		)	(9,719		)	21,515			—		(13,706		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(161		)	—		(161		)
(Decrease) increase in cash and cash equivalents	(11,907		)	30,730			20,014			—		38,837
Cash and cash equivalents at beginning of period	26,089			—			37,958			—		64,047
Cash and cash equivalents at end of period	$	14,182		$	30,730		$	57,972		$	—	$	102,884



UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
JULY 29, 2017
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	12,712	$	20,638	$	19,592		$	—		$	52,942
Receivables, net	117,672		5,670		20,274			—			143,616
Inventories, net	174,839		516,704		30,462			—			722,005
Prepaid expenses and other current assets	23,944		14,463		7,466			(8,901		)	36,972
Intercompany receivable – current	845		134		25,056			(26,035		)	—
Total current assets	330,012		557,609		102,850			(34,936		)	955,535
Other assets	51,273		17,432		884			—			69,589
Goodwill and intangible assets, net	112,221		40,937		188,037			—			341,195
Property and equipment, net	32,428		172,802		12,608			—			217,838
Investment in subsidiaries	1,263,829		—		(22,724		)	(1,241,105		)	—
Intercompany receivable – noncurrent	745,812		519,304		669,176			(1,934,292		)	—
Total assets	$	2,535,575	$	1,308,084	$	950,831		$	(3,210,333	)	$	1,584,157

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	35,000	$	—	$	—		$	—		$	35,000
Trade accounts payable	124,675		247,169		30,968			—			402,812
Other accrued expenses	72,364		87,425		19,611			(8,901		)	170,499
Intercompany payable – current	14,523		—		11,512			(26,035		)	—
Total current liabilities	246,562		334,594		62,091			(34,936		)	608,311
Other liabilities
Long-term debt	197,233		—		—			—			197,233
Other liabilities	91,645		40,810		4,984			—			137,439
Intercompany payable – noncurrent	1,360,406		119,152		454,734			(1,934,292		)	—
Total other liabilities	1,649,284		159,962		459,718			(1,934,292		)	334,672
Equity
Caleres, Inc. shareholders’ equity	639,729		813,528		427,577			(1,241,105		)	639,729
Noncontrolling interests	—		—		1,445			—			1,445
Total equity	639,729		813,528		429,022			(1,241,105		)	641,174
Total liabilities and equity	$	2,535,575	$	1,308,084	$	950,831		$	(3,210,333	)	$	1,584,157



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED JULY 29, 2017
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	194,305		$	482,645		$	63,175		$	(63,171	)	$	676,954
Cost of goods sold	137,659			270,548			32,543			(51,257		)	389,493
Gross profit	56,646			212,097			30,632			(11,914		)	287,461
Selling and administrative expenses	63,042			190,444			14,598			(11,914		)	256,170
Restructuring and other special charges, net	2,661			37			167			—			2,865
Operating (loss) earnings	(9,057		)	21,616			15,867			—			28,426
Interest (expense) income	(4,549		)	(3		)	177			—			(4,375		)
Other income (expense)	2,679			—			(9		)	—			2,670
Intercompany interest income (expense)	2,021			(2,189		)	168			—			—
(Loss) earnings before income taxes	(8,906		)	19,424			16,203			—			26,721
Income tax benefit (provision)	2,926			(8,053		)	(3,920		)	—			(9,047		)
Equity in earnings of subsidiaries, net of tax	23,575			—			271			(23,846		)	—
Net earnings	17,595			11,371			12,554			(23,846		)	17,674
Less: Net earnings attributable to noncontrolling interests	—			—			79			—			79
Net earnings attributable to Caleres, Inc.	$	17,595		$	11,371		$	12,475		$	(23,846	)	$	17,595

Comprehensive income	$	19,302		$	11,371		$	13,302		$	(24,574	)	$	19,401
Less: Comprehensive income attributable to noncontrolling interests	—			—			99			—			99
Comprehensive income attributable to Caleres, Inc.	$	19,302		$	11,371		$	13,203		$	(24,574	)	$	19,302




UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE TWENTY-SIX WEEKS ENDED JULY 29, 2017
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	388,745		$	910,184		$	101,220		$	(91,686	)	$	1,308,463
Cost of goods sold	270,510			502,334			51,073			(73,823		)	750,094
Gross profit	118,235			407,850			50,147			(17,863		)	558,369
Selling and administrative expenses	117,911			372,791			29,842			(17,863		)	502,681
Restructuring and other special charges, net	3,769			37			167			—			3,973
Operating (loss) earnings	(3,445		)	35,022			20,138			—			51,715
Interest (expense) income	(9,496		)	(12		)	324			—			(9,184		)
Other income (expense)	5,124			—			(18		)	—			5,106
Intercompany interest income (expense)	4,104			(4,513		)	409			—			—
(Loss) earnings before income taxes	(3,713		)	30,497			20,853			—			47,637
Income tax benefit (provision)	1,839			(11,928		)	(4,990		)	—			(15,079		)
Equity in earnings (loss) of subsidiaries, net of tax	34,371			—			(777		)	(33,594		)	—
Net earnings	32,497			18,569			15,086			(33,594		)	32,558
Less: Net earnings attributable to noncontrolling interests	—			—			61			—			61
Net earnings attributable to Caleres, Inc.	$	32,497		$	18,569		$	15,025		$	(33,594	)	$	32,497

Comprehensive income	$	34,865		$	18,569		$	15,755		$	(34,248	)	$	34,941
Less: Comprehensive income attributable to noncontrolling interests	—			—			76			—			76
Comprehensive income attributable to Caleres, Inc.	$	34,865		$	18,569		$	15,679		$	(34,248	)	$	34,865



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED JULY 29, 2017
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations		Total
Net cash (used for) provided by operating activities	$	(15,328	)	$	95,828		$	33,780		$	—	$	114,280

Investing activities
Purchases of property and equipment	(3,722		)	(17,762		)	(2,767		)	—		(24,251		)
Capitalized software	(2,686		)	(466		)	—			—		(3,152		)
Intercompany investing	(19,894		)	197,599			(177,705		)	—		—
Net cash (used for) provided by investing activities	(26,302		)	179,371			(180,472		)	—		(27,403		)

Financing activities
Borrowings under revolving credit agreement	400,000			—			—			—		400,000
Repayments under revolving credit agreement	(475,000		)	—			—			—		(475,000		)
Dividends paid	(6,030		)	—			—			—		(6,030		)
Acquisition of treasury stock	(5,993		)	—			—			—		(5,993		)
Issuance of common stock under share-based plans, net	(2,490		)	—			—			—		(2,490		)
Intercompany financing	119,856			(263,590		)	143,734			—		—
Net cash provided by (used for) financing activities	30,343			(263,590		)	143,734			—		(89,513		)
Effect of exchange rate changes on cash and cash equivalents	—			—			246			—		246
(Decrease) increase in cash and cash equivalents	(11,287		)	11,609			(2,712		)	—		(2,390		)
Cash and cash equivalents at beginning of period	23,999			9,029			22,304			—		55,332
Cash and cash equivalents at end of period	$	12,712		$	20,638		$	19,592		$	—	$	52,942



CONDENSED CONSOLIDATING BALANCE SHEET
FEBRUARY 3, 2018
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	26,089	$	—	$	37,958		$	—		$	64,047
Receivables, net	124,957		3,663		23,993			—			152,613
Inventories, net	146,068		394,438		28,873			—			569,379
Prepaid expenses and other current assets	26,284		30,456		8,394			(4,384		)	60,750
Intercompany receivable – current	521		74		9,250			(9,845		)	—
Total current assets	323,919		428,631		108,468			(14,229		)	846,789
Other assets	76,317		13,610		732			—			90,659
Goodwill and intangible assets, net	111,108		40,937		187,123			—			339,168
Property and equipment, net	35,474		165,227		12,098			—			212,799
Investment in subsidiaries	1,329,428		—		(23,565		)	(1,305,863		)	—
Intercompany receivable – noncurrent	774,588		520,362		704,810			(1,999,760		)	—
Total assets	$	2,650,834	$	1,168,767	$	989,666		$	(3,319,852	)	$	1,489,415

Liabilities and Equity
Current liabilities
Trade accounts payable	$	136,797	$	102,420	$	33,745		$	—		$	272,962
Other accrued expenses	65,817		74,006		21,758			(4,384		)	157,197
Intercompany payable – current	5,524		—		4,321			(9,845		)	—
Total current liabilities	208,138		176,426		59,824			(14,229		)	430,159
Other liabilities
Long-term debt	197,472		—		—			—			197,472
Other liabilities	101,784		35,574		5,464			—			142,822
Intercompany payable – noncurrent	1,425,951		98,610		475,199			(1,999,760		)	—
Total other liabilities	1,725,207		134,184		480,663			(1,999,760		)	340,294
Equity
Caleres, Inc. shareholders’ equity	717,489		858,157		447,706			(1,305,863		)	717,489
Noncontrolling interests	—		—		1,473			—			1,473
Total equity	717,489		858,157		449,179			(1,305,863		)	718,962
Total liabilities and equity	$	2,650,834	$	1,168,767	$	989,666		$	(3,319,852	)	$	1,489,415