GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

12 Months Ended

Jan. 28, 2012

GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

18. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

        The Senior Notes described in Note 9, which constitute debt obligations of the Company's wholly owned subsidiary, The Bon-Ton Department Stores, Inc. (the "Issuer"), are guaranteed on a senior unsecured basis by the Company and by each of the Company's subsidiaries, other than the Issuer, that is an Obligor under the Company's senior secured credit facility. Separate financial statements of the Company, the Issuer and such subsidiary guarantors are not presented because the guarantees by the Company and each wholly owned subsidiary guarantor are joint and several, full and unconditional, except for certain customary limitations. These customary limitations include releases of a guarantee (i) if the guarantor no longer guarantees other indebtedness of the Issuer; (ii) if there is a sale or other disposition of the capital stock of a guarantor and if such sale complies with the covenant regarding asset sales in the Indenture; and (iii) if the Company properly designates a subsidiary guarantor as an "unrestricted subsidiary" under the terms of the Indenture.

        The condensed consolidating financial information for the Company, the Issuer and the Company's guarantor and non-guarantor subsidiaries as of January 28, 2012 and January 29, 2011 and for 2011, 2010 and 2009 as presented below has been prepared from the books and records maintained by the Company, the Issuer and the guarantor and non-guarantor subsidiaries. The condensed financial information may not necessarily be indicative of the results of operations or financial position had the guarantor and non-guarantor subsidiaries operated as independent entities. Certain intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time.

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

January 28, 2012

	Bon-Ton (Parent Company)		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Eliminations			Company Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	3,741	$	10,530	$	—	$	—		$	14,272
Merchandise inventories		—		352,442		347,062		—		—			699,504
Prepaid expenses and other current assets		—		56,496		12,379		547		(390	)		69,032
Total current assets		1		412,679		369,971		547		(390	)		782,808
Property, fixtures and equipment at cost, net		—		181,002		228,965		267,166		—			677,133
Deferred income taxes		—		3,769		8,616		—		—			12,385
Intangible assets, net		—		40,358		78,807		—		—			119,165
Investment in and advances to affiliates		131,606		474,697		216,969		1,103		(824,375	)		—
Other long-term assets		—		22,168		1,189		3,355		—			26,712
Total assets	$	131,607	$	1,134,673	$	904,517	$	272,171	$	(824,765	)	$	1,618,203
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	—	$	205,492	$	—	$	—	$	—		$	205,492
Accrued payroll and benefits		—		22,743		8,893		—		—			31,636
Accrued expenses		—		75,503		85,736		2,006		(390	)		162,855
Current maturities of long-term debt and obligations under capital leases		—		1,568		2,797		8,066		—			12,431
Deferred income taxes		—		6,581		9,650		—		—			16,231
Total current liabilities		—		311,887		107,076		10,072		(390	)		428,645
Long-term debt and obligations under capital leases, less current maturities		—		590,557		49,555		230,836		—			870,948
Other long-term liabilities		—		130,082		55,444		1,477		—			187,003
Total liabilities		—		1,032,526		212,075		242,385		(390	)		1,486,596
Shareholders' equity		131,607		102,147		692,442		29,786		(824,375	)		131,607
Total liabilities and shareholders' equity	$	131,607	$	1,134,673	$	904,517	$	272,171	$	(824,765	)	$	1,618,203

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

January 29, 2011

	Bon-Ton (Parent Company)		Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Eliminations			Company Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	5,841	$	10,497	$	—	$	—		$	16,339
Merchandise inventories		—		340,649		341,675		—		—			682,324
Prepaid expenses and other current assets		—		65,500		12,752		628		(462	)		78,418
Total current assets		1		411,990		364,924		628		(462	)		777,081
Property, fixtures and equipment at cost, net		—		194,874		230,138		278,420		—			703,432
Deferred income taxes		—		3,705		5,882		—		—			9,587
Intangible assets, net		—		54,954		75,126		—		—			130,080
Investment in and advances to affiliates		183,351		480,419		208,096		316		(872,182	)		—
Other long-term assets		—		30,337		1,594		4,128		—			36,059
Total assets	$	183,352	$	1,176,279	$	885,760	$	283,492	$	(872,644	)	$	1,656,239
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	—	$	175,249	$	—	$	—	$	—		$	175,249
Accrued payroll and benefits		—		37,796		7,973		—		—			45,769
Accrued expenses		—		77,743		88,663		1,260		(462	)		167,204
Current maturities of long-term debt and obligations under capital leases		—		3,229		2,596		6,978		—			12,803
Deferred income taxes		—		5,748		6,961		—		—			12,709
Income taxes payable		—		46		91		—		—			137
Total current liabilities		—		299,811		106,284		8,238		(462	)		413,871
Long-term debt and obligations under capital leases, less current maturities		—		626,475		52,353		238,902		—			917,730
Other long-term liabilities		—		94,425		45,487		1,374		—			141,286
Total liabilities		—		1,020,711		204,124		248,514		(462	)		1,472,887
Shareholders' equity		183,352		155,568		681,636		34,978		(872,182	)		183,352
Total liabilities and shareholders' equity	$	183,352	$	1,176,279	$	885,760	$	283,492	$	(872,644	)	$	1,656,239

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

2011

	Bon-Ton (Parent Company)			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net sales	$	—		$	1,264,020		$	1,620,641		$	—		$	—		$	2,884,661
Other income		—			26,960			41,909			—			—			68,869
		—			1,290,980			1,662,550			—			—			2,953,530
Costs and expenses:
Costs of merchandise sold		—			809,656			1,037,713			—			—			1,847,369
Selling, general and administrative		—			425,696			545,516			80			(35,232	)		936,060
Depreciation and amortization		—			34,756			49,109			11,168			—			95,033
Amortization of lease-related interests		—			2,436			2,311			—			—			4,747
Impairment charges		—			643			3,047			—			—			3,690
Income (loss) from operations		—			17,793			24,854			(11,248	)		35,232			66,631
Other income (expense):
Intercompany rental and royalty income		—			—			6,844			28,388			(35,232	)		—
Equity in (losses) earnings of subsidiaries		(14,147	)		21,538			—			—			(7,391	)		—
Interest expense, net		—			(62,207	)		(11,445	)		(15,855	)		—			(89,507	)
Gain on extinguishment of debt		—			8,729			—			—			—			8,729
(Loss) income before income taxes		(14,147	)		(14,147	)		20,253			1,285			(7,391	)		(14,147	)
Income tax benefit		(2,019	)		(2,019	)		(293	)		—			2,312			(2,019	)
Net (loss) income	$	(12,128	)	$	(12,128	)	$	20,546		$	1,285		$	(9,703	)	$	(12,128	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

2010

	Bon-Ton (Parent Company)		Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net sales	$	—	$	1,300,475		$	1,680,004		$	—		$	—		$	2,980,479
Other income		—		27,323			38,683			—			—			66,006
		—		1,327,798			1,718,687			—			—			3,046,485
Costs and expenses:
Costs of merchandise sold		—		812,014			1,048,168			—			—			1,860,182
Selling, general and administrative		—		434,323			544,323			96			(36,082	)		942,660
Depreciation and amortization		—		39,944			50,824			11,434			—			102,202
Amortization of lease-related interests		—		2,616			1,939			—			—			4,555
Impairment charges		—		1,062			676			—			—			1,738
Income (loss) from operations		—		37,839			72,757			(11,530	)		36,082			135,148
Other income (expense):
Intercompany rental and royalty income		—		—			7,694			28,388			(36,082	)		—
Equity in earnings of subsidiaries		22,847		66,526			—			—			(89,373	)		—
Interest expense, net		—		(81,518	)		(14,459	)		(16,324	)		—			(112,301	)
Income before income taxes		22,847		22,847			65,992			534			(89,373	)		22,847
Income tax provision		1,353		1,353			1,301			—			(2,654	)		1,353
Net income	$	21,494	$	21,494		$	64,691		$	534		$	(86,719	)	$	21,494

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

2009

	Bon-Ton (Parent Company)			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net sales	$	—		$	1,288,825		$	1,670,999		$	—		$	—		$	2,959,824
Other income		—			34,395			40,718			—			—			75,113
		—			1,323,220			1,711,717			—			—			3,034,937
Costs and expenses:
Costs of merchandise sold		—			810,479			1,051,713			—			—			1,862,192
Selling, general and administrative		—			439,870			559,811			95			(36,137	)		963,639
Depreciation and amortization		—			45,021			54,984			11,630			—			111,635
Amortization of lease-related interests		—			2,805			2,061			—			—			4,866
Impairment charges		—			1,359			4,524			—			—			5,883
Income (loss) from operations		—			23,686			38,624			(11,725	)		36,137			86,722
Other income (expense):
Intercompany rental and royalty income		—			—			7,749			28,388			(36,137	)		—
Equity in (losses) earnings of subsidiaries		(12,086	)		41,830			—			—			(29,744	)		—
Interest expense, net		—			(76,924	)		(4,460	)		(16,746	)		—			(98,130	)
Loss on extinguishment of debt					(678	)											(678	)
(Loss) income before income taxes		(12,086	)		(12,086	)		41,913			(83	)		(29,744	)		(12,086	)
Income tax benefit		(8,031	)		(8,031	)		(55	)		—			8,086			(8,031	)
Net (loss) income	$	(4,055	)	$	(4,055	)	$	41,968		$	(83	)	$	(37,830	)	$	(4,055	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

2011

	Bon-Ton (Parent Company)			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net cash provided by operating activities	$	6,456		$	55,119		$	41,977		$	13,347		$	(17,102	)	$	99,797
Cash flows from investing activities:
Capital expenditures		—			(32,910	)		(34,325	)		—			—			(67,235	)
Intercompany investing activity		(398	)		(13	)		—			—			411			—
Proceeds from sale of property, fixtures and equipment		—			354			2,319			108			—			2,781
Net cash (used in) provided by investing activities		(398	)		(32,569	)		(32,006	)		108			411			(64,454	)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations		—			(796,564	)		(2,596	)		(6,978	)		—			(806,138	)
Proceeds from issuance of long-term debt		—			773,906			—			—			—			773,906
Intercompany financing activity		—			(2,872	)		(7,342	)		(6,477	)		16,691			—
Cash dividends paid		(2,872	)		—			—			—			—			(2,872	)
Restricted shares forfeited in lieu of payroll taxes		(3,584	)		—			—			—			—			(3,584	)
Proceeds from stock options exercised		398			—			—			—			—			398
Deferred financing costs paid		—			(5,931	)		—			—			—			(5,931	)
Increase in book overdraft balances		—			6,811			—			—			—			6,811
Net cash (used in) provided by financing activities		(6,058	)		(24,650	)		(9,938	)		(13,455	)		16,691			(37,410	)
Net (decrease) increase in cash and cash equivalents		—			(2,100	)		33			—			—			(2,067	)
Cash and cash equivalents at beginning of period		1			5,841			10,497			—			—			16,339
Cash and cash equivalents at end of period	$	1		$	3,741		$	10,530		$	—		$	—		$	14,272

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

2010

	Bon-Ton (Parent Company)			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net cash provided by operating activities	$	4,107		$	106,612		$	31,681		$	14,720		$	(15,985	)	$	141,135
Cash flows from investing activities:
Capital expenditures		—			(23,729	)		(22,539	)		—			—			(46,268	)
Intercompany investing activity		—			(35	)		—			—			35			—
Proceeds from sale of property, fixtures and equipment		—			59			2,544			—			—			2,603
Net cash used in investing activities		—			(23,705	)		(19,995	)		—			35			(43,665	)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations		—			(701,953	)		(2,409	)		(6,509	)		—			(710,871	)
Proceeds from issuance of long-term debt		—			610,375			—			—			—			610,375
Intercompany financing activity		—			—			(7,739	)		(8,211	)		15,950			—
Restricted shares forfeited in lieu of payroll taxes		(4,107	)		—			—			—			—			(4,107	)
Deferred financing costs paid		—			(717	)		—			—			—			(717	)
Increase in book overdraft balances		—			5,267			—			—			—			5,267
Net cash used in financing activities		(4,107	)		(87,028	)		(10,148	)		(14,720	)		15,950			(100,053	)
Net (decrease) increase in cash and cash equivalents		—			(4,121	)		1,538			—			—			(2,583	)
Cash and cash equivalents at beginning of period		1			9,962			8,959			—			—			18,922
Cash and cash equivalents at end of period	$	1		$	5,841		$	10,497		$	—		$	—		$	16,339

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

2009

	Bon-Ton (Parent Company)			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net cash provided by operating activities	$	866		$	176,908		$	20,823		$	9,385		$	(13,948	)	$	194,034
Cash flows from investing activities:
Capital expenditures		—			(21,471	)		(10,875	)		—			—			(32,346	)
Intercompany investing activity		—			(1,982	)		—			—			1,982			—
Proceeds from sale of property, fixtures and equipment		—			25			85			—			—			110
Net cash used in investing activities		—			(23,428	)		(10,790	)		—			1,982			(32,236	)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations		—			(891,586	)		(2,236	)		(6,072	)		—			(899,894	)
Proceeds from issuance of long-term debt		—			765,051			—			—			—			765,051
Intercompany financing activity		—			(866	)		(7,787	)		(3,313	)		11,966			—
Cash dividends paid		(866	)		—			—			—			—			(866	)
Deferred financing costs paid		—			(24,013	)		—			—			—			(24,013	)
Decrease in book overdraft balances		—			(2,873	)		—			—			—			(2,873	)
Net cash used in financing activities		(866	)		(154,287	)		(10,023	)		(9,385	)		11,966			(162,595	)
Net (decrease) increase in cash and cash equivalents		—			(807	)		10			—			—			(797	)
Cash and cash equivalents at beginning of period		1			10,769			8,949			—			—			19,719
Cash and cash equivalents at end of period	$	1		$	9,962		$	8,959		$	—		$	—		$	18,922