GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

3 Months Ended

Apr. 28, 2012

GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

12.GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

On March 6, 2006, The Bon-Ton Department Stores, Inc. (the “Issuer”), a wholly owned subsidiary of the Company, entered into an Indenture with The Bank of New York, as trustee, under which the Issuer issued $510,000 aggregate principal amount of its 10¼% Senior Notes due 2014 (the “Senior Notes”), of which $464,000 aggregate principal amount was outstanding as of April 28, 2012.  The Senior Notes 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 April 28, 2012 and January 28, 2012 and for the first quarter in each of 2012 and 2011 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

April 28, 2012

	Bon-Ton
	(Parent				Guarantor		Non-Guarantor		Consolidating			Company
	Company)		Issuer		Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	1	$	3,706	$	10,588	$	—	$	—		$	14,295
Merchandise inventories	—		345,563		372,732		—		—			718,295
Prepaid expenses and other current assets	—		66,953		8,281		416		(259		)	75,391
Total current assets	1		416,222		391,601		416		(259		)	807,981
Property, fixtures and equipment at cost, net	—		178,475		223,640		259,673		—			661,788
Deferred income taxes	—		3,956		8,915		—		—			12,871
Intangible assets, net	—		39,426		77,767		—		—			117,193
Investment in and advances to affiliates	91,771		495,761		202,122		2,274		(791,928		)	—
Other long-term assets	—		20,238		1,209		3,546		—			24,993
Total assets	$	91,772	$	1,154,078	$	905,254	$	265,909	$	(792,187	)	$	1,624,826
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	—	$	218,375	$	—	$	—	$	—		$	218,375
Accrued payroll and benefits	—		24,514		11,566		—		—			36,080
Accrued expenses	—		59,787		78,929		1,127		(259		)	139,584
Current maturities of long-term debt and obligations under capital leases	—		1,129		2,850		7,118		—			11,097
Deferred income taxes	—		6,964		10,182		—		—			17,146
Total current liabilities	—		310,769		103,527		8,245		(259		)	422,282
Long-term debt and obligations under capital leases, less current maturities	—		654,977		48,823		224,663		—			928,463
Other long-term liabilities	—		126,323		54,481		1,505		—			182,309
Total liabilities	—		1,092,069		206,831		234,413		(259		)	1,533,054
Shareholders’ equity	91,772		62,009		698,423		31,496		(791,928		)	91,772
Total liabilities and shareholders’ equity	$	91,772	$	1,154,078	$	905,254	$	265,909	$	(792,187	)	$	1,624,826

The Bon-Ton Stores, Inc.

Condensed Consolidating Balance Sheet

January 28, 2012

	Bon-Ton
	(Parent				Guarantor		Non-Guarantor		Consolidating			Company
	Company)		Issuer		Subsidiaries		Subsidiaries		Eliminations			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 Statement of Operations

Thirteen Weeks Ended April 28, 2012

	Bon-Ton
	(Parent						Guarantor			Non-Guarantor			Consolidating			Company
	Company)			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	278,398		$	362,373		$	—		$	—		$	640,771
Other income	—			4,941			8,585			—			—			13,526
	—			283,339			370,958			—			—			654,297
Costs and expenses:
Costs of merchandise sold	—			183,847			237,369			—			—			421,216
Selling, general and administrative	—			103,736			135,030			(3,541		)	(6,985		)	228,240
Depreciation and amortization	—			8,315			11,042			2,830			—			22,187
Amortization of lease-related interests	—			529			654			—			—			1,183
(Loss) income from operations	—			(13,088		)	(13,137		)	711			6,985			(18,529		)
Other income (expense):
Intercompany rental and royalty income	—			—			—			6,985			(6,985		)	—
Equity in losses of subsidiaries	(40,271		)	(13,088		)	—			—			53,359			—
Interest expense, net	—			(14,095		)	(2,640		)	(3,838		)	—			(20,573		)
Loss on extinguishment of debt	—			—			—			(1,169		)	—			(1,169		)
(Loss) income before income taxes	(40,271		)	(40,271		)	(15,777		)	2,689			53,359			(40,271		)
Income tax provision	509			509			242			—			(751		)	509
Net (loss) income	$	(40,780	)	$	(40,780	)	$	(16,019	)	$	2,689		$	54,110		$	(40,780	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended April 28, 2012

	Bon-Ton
	(Parent						Guarantor			Non-Guarantor		Consolidating			Company
	Company)			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(40,780	)	$	(40,780	)	$	(16,019	)	$	2,689	$	54,110		$	(40,780	)
Other comprehensive income, net of tax:
Amortization of pension and postretirement benefit plans	1,596			1,596			—			—		(1,596		)	1,596
Other comprehensive income	1,596			1,596			—			—		(1,596		)	1,596
Comprehensive (loss) income	$	(39,184	)	$	(39,184	)	$	(16,019	)	$	2,689	$	52,514		$	(39,184	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Operations

Thirteen Weeks Ended April 30, 2011

	Bon-Ton
	(Parent						Guarantor			Non-Guarantor			Consolidating			Company
	Company)			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	282,229		$	367,652		$	—		$	—		$	649,881
Other income	—			6,030			8,570			—			—			14,600
	—			288,259			376,222			—			—			664,481
Costs and expenses:
Costs of merchandise sold	—			181,973			237,294			—			—			419,267
Selling, general and administrative	—			100,977			129,809			25			(8,772		)	222,039
Depreciation and amortization	—			9,286			12,287			2,940			—			24,513
Amortization of lease-related interests	—			617			578			—			—			1,195
Loss from operations	—			(4,594		)	(3,746		)	(2,965		)	8,772			(2,533		)
Other income (expense):
Intercompany rental and royalty income	—			—			1,585			7,187			(8,772		)	—
Equity in losses of subsidiaries	(35,288		)	(4,918		)	—			—			40,206			—
Interest expense, net	—			(16,326		)	(2,975		)	(4,004		)	—			(23,305		)
Loss on extinguishment of debt	—			(9,450		)	—			—			—			(9,450		)
(Loss) income before income taxes	(35,288		)	(35,288		)	(5,136		)	218			40,206			(35,288		)
Income tax provision	700			700			365			—			(1,065		)	700
Net (loss) income	$	(35,988	)	$	(35,988	)	$	(5,501	)	$	218		$	41,271		$	(35,988	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Comprehensive (Loss) Income

Thirteen Weeks Ended April 30, 2011

	Bon-Ton
	(Parent						Guarantor			Non-Guarantor		Consolidating			Company
	Company)			Issuer			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net (loss) income	$	(35,988	)	$	(35,988	)	$	(5,501	)	$	218	$	41,271		$	(35,988	)
Other comprehensive income, net of tax:
Amortization of pension and postretirement benefit plans	503			503			—			—		(503		)	503
Amortization of cash flow derivatives	452			452			—			—		(452		)	452
Other comprehensive income	955			955			—			—		(955		)	955
Comprehensive (loss) income	$	(35,033	)	$	(35,033	)	$	(5,501	)	$	218	$	40,316		$	(35,033	)

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Thirteen Weeks Ended April 28, 2012

	Bon-Ton
	(Parent						Guarantor			Non-Guarantor			Consolidating			Company
	Company)			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	2,028		$	(39,340	)	$	4,911		$	891		$	(1,959	)	$	(33,469	)
Cash flows from investing activities:
Capital expenditures	—			(10,106		)	(4,182		)	—			—			(14,288		)
Intercompany investing activity	(18		)	(1		)	—			—			19			—
Proceeds from sale of property, fixtures and equipment	—			14			9			8,234			—			8,257
Net cash (used in) provided by investing activities	(18		)	(10,093		)	(4,173		)	8,234			19			(6,031		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(97,235		)	(680		)	(8,146		)	—			(106,061		)
Proceeds from issuance of long-term debt	—			161,216			—			—			—			161,216
Intercompany financing activity	—			(961		)	—			(979		)	1,940			—
Cash dividends paid	(961		)	—			—			—			—			(961		)
Restricted shares forfeited in lieu of payroll taxes	(1,067		)	—			—			—			—			(1,067		)
Proceeds from stock options exercised	18			—			—			—			—			18
Decrease in book overdraft balances	—			(13,622		)	—			—			—			(13,622		)
Net cash (used in) provided by financing activities	(2,010		)	49,398			(680		)	(9,125		)	1,940			39,523
Net (decrease) increase in cash and cash equivalents	—			(35		)	58			—			—			23
Cash and cash equivalents at beginning of period	1			3,741			10,530			—			—			14,272
Cash and cash equivalents at end of period	$	1		$	3,706		$	10,588		$	—		$	—		$	14,295

The Bon-Ton Stores, Inc.

Condensed Consolidating Statement of Cash Flows

Thirteen Weeks Ended April 30, 2011

	Bon-Ton
	(Parent						Guarantor			Non-Guarantor			Consolidating			Company
	Company)			Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	3,555		$	(20,267	)	$	5,170		$	3,831		$	(5,116	)	$	(12,827	)
Cash flows from investing activities:
Capital expenditures	—			(5,605		)	(2,238		)	—			—			(7,843		)
Intercompany investing activity	(324		)	—			—			—			324			—
Proceeds from sale of property, fixtures and equipment	—			4			11			—			—			15
Net cash used in investing activities	(324		)	(5,601		)	(2,227		)	—			324			(7,828		)
Cash flows from financing activities:
Payments on long-term debt and capital lease obligations	—			(212,308		)	(631		)	(1,750		)	—			(214,689		)
Proceeds from issuance of long-term debt	—			244,684			—			—			—			244,684
Intercompany financing activity	—			—			(2,711		)	(2,081		)	4,792			—
Restricted shares forfeited in lieu of payroll taxes	(3,555		)	—			—			—			—			(3,555		)
Proceeds from stock options exercised	324			—			—			—			—			324
Deferred financing costs paid	—			(5,861		)	—			—			—			(5,861		)
Decrease in book overdraft balances	—			(2,991		)	—			—			—			(2,991		)
Net cash (used in) provided by financing activities	(3,231		)	23,524			(3,342		)	(3,831		)	4,792			17,912
Net decrease in cash and cash equivalents	—			(2,344		)	(399		)	—			—			(2,743		)
Cash and cash equivalents at beginning of period	1			5,841			10,497			—			—			16,339
Cash and cash equivalents at end of period	$	1		$	3,497		$	10,098		$	—		$	—		$	13,596