18. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

Certain debt obligations of the Company, which constitute debt obligations of the Issuer, are guaranteed by the Parent and by each of its subsidiaries, other than the Issuer, that is an Obligor under the Company's Second Amended Revolving Credit Facility. Separate financial statements of the Parent, the Issuer and such subsidiary guarantors are not presented because the guarantees by the Parent and each 100% owned subsidiary guarantor are joint and several, full and unconditional, except for certain customary limitations which are applicable only to a subsidiary guarantor. These customary limitations include releases of a guarantee (1) if the subsidiary guarantor no longer guarantees other indebtedness of the Issuer; (2) if there is a sale or other disposition of the capital stock of a subsidiary guarantor and if such sale complies with the covenant regarding asset sales; and (3) if the subsidiary guarantor is properly designated as an "unrestricted subsidiary."

The condensed consolidating financial information for the Parent, the Issuer and the guarantor subsidiaries as of January 30, 2016 and January 31, 2015 and for 2015, 2014 and 2013 as presented below has been prepared from the books and records maintained by the Parent, the Issuer and the guarantor subsidiaries. The condensed financial information may not necessarily be indicative of the results of operations or financial position had the 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.

On January 15, 2016, the Obligors entered into a Consent and Third Amendment to the Second Amended Revolving Credit Facility, which among other changes, provided for the joinders of the SPEs that had previously participated in the Company's mortgage loan facility as Obligors under the Second Amended Revolving Credit Facility, and as "Restricted Subsidiaries" and guarantors under the indentures for both the 2017 Notes and the 2021 Notes. The SPEs and their assets were then added to the second lien security agreement. For comparative purposes, the condensed consolidating financial information as presented below has been retrospectively adjusted as if the activity described above occurred at the beginning of each period presented.

The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
January 30, 2016

	Parent		Issuer		Guarantor Subsidiaries		Consolidating Eliminations			Company Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	2,822	$	4,056	$	—		$	6,879
Merchandise inventories		—		467,262		244,437		—			711,699
Prepaid expenses and other current assets		—		88,346		9,088		(180	)		97,254

Total current assets		1		558,430		257,581		(180	)		815,832
Property, fixtures and equipment at cost, net		—		319,736		315,598		—			635,334
Intangible assets, net		—		20,964		61,098		—			82,062
Investment in and advances to affiliates		34,915		437,894		382,958		(855,767	)		—
Other long-term assets		—		26,426		863		(3,311	)		23,978

Total assets	$	34,916	$	1,363,450	$	1,018,098	$	(859,258	)	$	1,557,206


Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	—	$	162,831	$	—	$	—		$	162,831
Accrued payroll and benefits		—		23,154		5,373		—			28,527
Accrued expenses		—		70,386		77,172		(180	)		147,378
Current maturities of long-term debt and obligations under capital leases		—		1,395		3,999		—			5,394

Total current liabilities		—		257,766		86,544		(180	)		344,130
Long-term debt and obligations under capital leases, less current maturities		—		935,957		53,292		—			989,249
Other long-term liabilities		—		138,810		53,412		(3,311	)		188,911

Total liabilities		—		1,332,533		193,248		(3,491	)		1,522,290
Shareholders' equity		34,916		30,917		824,850		(855,767	)		34,916

Total liabilities and shareholders' equity	$	34,916	$	1,363,450	$	1,018,098	$	(859,258	)	$	1,557,206

The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
January 31, 2015

	Parent		Issuer		Guarantor Subsidiaries		Consolidating Eliminations			Company Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	4,209	$	4,543	$	—		$	8,753
Merchandise inventories		—		483,270		251,686		—			734,956
Prepaid expenses and other current assets		—		74,956		18,872		(434	)		93,394

Total current assets		1		562,435		275,101		(434	)		837,103
Property, fixtures and equipment at cost, net		—		268,224		373,772		—			641,996
Intangible assets, net		—		24,618		65,533		—			90,151
Investment in and advances to affiliates		87,647		324,668		435,870		(848,185	)		—
Other long-term assets		—		22,685		798		—			23,483

Total assets	$	87,648	$	1,202,630	$	1,151,074	$	(848,619	)	$	1,592,733


Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	—	$	208,882	$	—	$	—		$	208,882
Accrued payroll and benefits		—		23,637		5,211		—			28,848
Accrued expenses		—		76,599		81,857		(434	)		158,022
Current maturities of long-term debt and obligations under capital leases		—		460		10,289		—			10,749

Total current liabilities		—		309,578		97,357		(434	)		406,501
Long-term debt and obligations under capital leases, less current maturities		—		651,436		244,543		—			895,979
Other long-term liabilities		—		155,344		47,261		—			202,605

Total liabilities		—		1,116,358		389,161		(434	)		1,505,085
Shareholders' equity		87,648		86,272		761,913		(848,185	)		87,648

Total liabilities and shareholders' equity	$	87,648	$	1,202,630	$	1,151,074	$	(848,619	)	$	1,592,733

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
2015

	Parent			Issuer			Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net sales	$	—		$	1,640,912		$	1,076,779		$	—		$	2,717,691
Other income		—			43,632			28,174			—			71,806

		—			1,684,544			1,104,953			—			2,789,497

Costs and expenses:
Costs of merchandise sold		—			1,081,054			694,661			—			1,775,715
Selling, general and administrative		—			560,726			369,464			(24,538	)		905,652
Gain on insurance recovery		—			—			(1,356	)		—			(1,356	)
Depreciation and amortization		—			49,590			42,193			—			91,783
Amortization of lease-related interests		—			1,928			2,317			—			4,245
Impairment charges		—			1,794			1,838			—			3,632

(Loss) income from operations		—			(10,548	)		(4,164	)		24,538			9,826
Other income (expense):
Intercompany income		—			2,511			43,997			(46,508	)		—
Equity in (losses) earnings of subsidiaries		(58,928	)		20,635			—			38,293			—
Interest expense, net		—			(71,526	)		(12,990	)		21,970			(62,546	)
Loss on extinguishment of debt		—			—			(6,208	)		—			(6,208	)

(Loss) income before income taxes		(58,928	)		(58,928	)		20,635			38,293			(58,928	)
Income tax (benefit) provision		(1,875	)		(1,875	)		539			1,336			(1,875	)

Net (loss) income	$	(57,053	)	$	(57,053	)	$	20,096		$	36,957		$	(57,053	)

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) Income
2015

	Parent			Issuer			Guarantor Subsidiaries		Consolidating Eliminations			Company Consolidated
Net (loss) income	$	(57,053	)	$	(57,053	)	$	20,096	$	36,957		$	(57,053	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans		4,283			4,283			—		(4,283	)		4,283

Comprehensive (loss) income	$	(52,770	)	$	(52,770	)	$	20,096	$	32,674		$	(52,770	)

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
2014

	Parent			Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net sales	$	—		$	1,643,073		$	1,113,164		$	—		$	—		$	2,756,237
Other income		—			39,507			27,152			—			—			66,659

		—			1,682,580			1,140,316			—			—			2,822,896

Costs and expenses:
Costs of merchandise sold		—			1,064,682			708,271			—			—			1,772,953
Selling, general and administrative		—			560,886			378,804			(2,404	)		(30,250	)		907,036
Gain on insurance recovery		—			—			(10,779	)		—			—			(10,779	)
Depreciation and amortization		—			45,476			44,581			61			—			90,118
Amortization of lease-related interests		—			2,117			2,425			—			—			4,542
Impairment charges		—			1,655			837			—			—			2,492

Income from operations		—			7,764			16,177			2,343			30,250			56,534
Other income (expense):
Intercompany income		—			2,700			43,887			—			(46,587	)		—
Equity in (losses) earnings of subsidiaries		(5,355	)		45,059			—			—			(39,704	)		—
Interest expense, net		—			(60,878	)		(17,195	)		—			16,337			(61,736	)
Loss on extinguishment of debt		—			—			—			(153	)		—			(153	)

(Loss) income before income taxes		(5,355	)		(5,355	)		42,869			2,190			(39,704	)		(5,355	)
Income tax provision		1,619			1,619			901			—			(2,520	)		1,619

Net (loss) income	$	(6,974	)	$	(6,974	)	$	41,968		$	2,190		$	(37,184	)	$	(6,974	)

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive (Loss) Income
2014

	Parent			Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Eliminations			Company Consolidated
Net (loss) income	$	(6,974	)	$	(6,974	)	$	41,968	$	2,190	$	(37,184	)	$	(6,974	)
Other comprehensive loss, net of tax:
Pension and postretirement benefit plans		(29,957	)		(29,957	)		—		—		29,957			(29,957	)

Comprehensive (loss) income	$	(36,931	)	$	(36,931	)	$	41,968	$	2,190	$	(7,227	)	$	(36,931	)

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
2013

	Parent			Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net sales	$	—		$	1,629,103		$	1,140,965		$	—		$	—		$	2,770,068
Other income		—			36,999			26,993			—			—			63,992

		—			1,666,102			1,167,958			—			—			2,834,060

Costs and expenses:
Costs of merchandise sold		—			1,048,047			720,625			—			—			1,768,672
Selling, general and administrative		—			549,064			381,005			—			(30,706	)		899,363
Depreciation and amortization		—			41,849			43,904			119			—			85,872
Amortization of lease-related interests		—			1,775			2,768			—			—			4,543
Impairment charges		—			2,268			3,962			—			—			6,230

Income (loss) from operations		—			23,099			15,694			(119	)		30,706			69,380
Other income (expense):
Intercompany income		—			2,656			45,977			504			(49,137	)		—
Equity in (losses) earnings of subsidiaries		(3,640	)		44,074			—			—			(40,434	)		—
Interest expense, net		—			(69,036	)		(17,842	)		(140	)		18,431			(68,587	)
Loss on extinguishment of debt		—			(4,433	)		—			—			—			(4,433	)

(Loss) income before income taxes		(3,640	)		(3,640	)		43,829			245			(40,434	)		(3,640	)
Income tax (benefit) provision		(84	)		(84	)		919			—			(835	)		(84	)

Net (loss) income	$	(3,556	)	$	(3,556	)	$	42,910		$	245		$	(39,599	)	$	(3,556	)

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Comprehensive Income
2013

	Parent			Issuer			Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidating Eliminations			Company Consolidated
Net (loss) income	$	(3,556	)	$	(3,556	)	$	42,910	$	245	$	(39,599	)	$	(3,556	)
Other comprehensive income, net of tax:
Pension and postretirement benefit plans		22,794			22,794			—		—		(22,794	)		22,794

Comprehensive income	$	19,238		$	19,238		$	42,910	$	245	$	(62,393	)	$	19,238

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
2015

	Parent			Issuer			Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net cash provided by (used in) operating activities	$	4,428		$	(111,827	)	$	133,997		$	(8,776	)	$	17,822

Cash flows from investing activities:
Capital expenditures		—			(59,249	)		(25,426	)		—			(84,675	)
Intercompany investing activity		(454	)		(47,136	)		—			47,590			—
Proceeds from insurance claim		—			—			1,700			—			1,700
Proceeds from sale of property, fixtures and equipment		—			17,632			67,722			—			85,354

Net cash (used in) provided by investing activities		(454	)		(88,753	)		43,996			47,590			2,379

Cash flows from financing activities:
Payments on long-term debt and capital lease obligations		—			(693,682	)		(221,323	)		—			(915,005	)
Proceeds from issuance of long-term debt		—			908,644			—			—			908,644
Intercompany financing activity		—			(4,029	)		42,843			(38,814	)		—
Deferred financing costs paid		—			(1,505	)		—			—			(1,505	)
Cash dividends paid		(4,029	)		—			—			—			(4,029	)
Restricted shares forfeited in lieu of payroll taxes		(399	)		—			—			—			(399	)
Proceeds from stock options exercised		454			—			—			—			454
Decrease in book overdraft balances		—			(10,235	)		—			—			(10,235	)

Net cash (used in) provided by financing activities		(3,974	)		199,193			(178,480	)		(38,814	)		(22,075	)

Net decrease in cash and cash equivalents		—			(1,387	)		(487	)		—			(1,874	)
Cash and cash equivalents at beginning of period		1			4,209			4,543			—			8,753

Cash and cash equivalents at end of period	$	1		$	2,822		$	4,056		$	—		$	6,879

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
2014

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net cash provided by (used in) operating activities	$	5,893		$	25,364		$	30,453		$	(3,802	)	$	(11,279	)	$	46,629

Cash flows from investing activities:
Capital expenditures		—			(77,042	)		(13,665	)		—			—			(90,707	)
Intercompany investing activity		(22	)		(785	)		—			—			807			—
Proceeds from sale of property, fixtures and equipment		—			46			303			5,000			—			5,349

Net cash (used in) provided by investing activities		(22	)		(77,781	)		(13,362	)		5,000			807			(85,358	)

Cash flows from financing activities:
Payments on long-term debt and capital lease obligations		—			(716,768	)		(10,200	)		(1,198	)		—			(728,166	)
Proceeds from issuance of long-term debt		—			770,259			—			—			—			770,259
Intercompany financing activity		—			(3,956	)		(6,516	)		—			10,472			—
Deferred financing costs paid		—			(69	)		—			—			—			(69	)
Cash dividends paid		(3,956	)		—			—			—			—			(3,956	)
Restricted shares forfeited in lieu of payroll taxes		(1,937	)		—			—			—			—			(1,937	)
Proceeds from stock options exercised		22			—			—			—			—			22
Increase in book overdraft balances		—			4,271			—			—			—			4,271

Net cash (used in) provided by financing activities		(5,871	)		53,737			(16,716	)		(1,198	)		10,472			40,424

Net increase in cash and cash equivalents		—			1,320			375			—			—			1,695
Cash and cash equivalents at beginning of period		1			2,889			4,168			—			—			7,058

Cash and cash equivalents at end of period	$	1		$	4,209		$	4,543		$	—		$	—		$	8,753

The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
2013

	Parent			Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Eliminations			Company Consolidated
Net cash provided by operating activities	$	5,086		$	92,921		$	30,860		$	342		$	(9,142	)	$	120,067

Cash flows from investing activities:
Capital expenditures		—			(60,458	)		(16,878	)		—			—			(77,336	)
Intercompany investing activity		(595	)		(567	)		—			—			1,162			—
Proceeds from sale of property, fixtures and equipment		—			1,332			3			—			—			1,335

Net cash used in investing activities		(595	)		(59,693	)		(16,875	)		—			1,162			(76,001	)

Cash flows from financing activities:
Payments on long-term debt and capital lease obligations		—			(1,257,776	)		(9,300	)		(342	)		—			(1,267,418	)
Proceeds from issuance of long-term debt		—			1,229,418			—			—			—			1,229,418
Intercompany financing activity		—			(2,952	)		(5,028	)		—			7,980			—
Deferred financing costs paid		—			(11,133	)		—			—			—			(11,133	)
Cash dividends paid		(2,952	)		—			—			—			—			(2,952	)
Restricted shares forfeited in lieu of payroll taxes		(2,134	)		—			—			—			—			(2,134	)
Proceeds from stock options exercised		595			—			—			—			—			595
Increase in book overdraft balances		—			8,690			—			—			—			8,690

Net cash used in financing activities		(4,491	)		(33,753	)		(14,328	)		(342	)		7,980			(44,934	)

Net decrease in cash and cash equivalents		—			(525	)		(343	)		—			—			(868	)
Cash and cash equivalents at beginning of period		1			3,414			4,511			—			—			7,926

Cash and cash equivalents at end of period	$	1		$	2,889		$	4,168		$	—		$	—		$	7,058