

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 the Company's 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 October 31, 2018, Vionic 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, Allen Edmonds and Vionic 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
NOVEMBER 3, 2018
					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	4,012	$	11,817	$	74,662		$	—		$	90,491
Receivables, net	145,363		30,040		16,843			—			192,246
Inventories, net	154,706		513,448		30,111			—			698,265
Prepaid expenses and other current assets	34,621		33,869		6,020			(11,344		)	63,166
Intercompany receivable – current	291		137		8,038			(8,466		)	—
Total current assets	338,993		589,311		135,674			(19,810		)	1,044,168
Other assets	78,640		12,330		1,309			—			92,279
Goodwill and intangible assets, net	109,441		335,419		208,992			—			653,852
Property and equipment, net	43,761		163,019		11,323			—			218,103
Investment in subsidiaries	1,576,825		—		(24,821		)	(1,552,004		)	—
Intercompany receivable – noncurrent	583,048		560,563		745,589			(1,889,200		)	—
Total assets	$	2,730,708	$	1,660,642	$	1,078,066		$	(3,461,014	)	$	2,008,402

Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	350,000	$	—	$	—		$	—		$	350,000
Trade accounts payable	141,012		151,127		25,360			—			317,499
Other accrued expenses	85,253		111,490		24,080			(11,344		)	209,479
Intercompany payable – current	3,363		—		5,103			(8,466		)	—
Total current liabilities	579,628		262,617		54,543			(19,810		)	876,978
Other liabilities
Long-term debt	197,817		—		—			—			197,817
Other liabilities	119,291		42,185		5,046			—			166,522
Intercompany payable – noncurrent	1,068,219		95,440		725,541			(1,889,200		)	—
Total other liabilities	1,385,327		137,625		730,587			(1,889,200		)	364,339
Equity
Caleres, Inc. shareholders’ equity	765,753		1,260,400		291,604			(1,552,004		)	765,753
Noncontrolling interests	—		—		1,332			—			1,332
Total equity	765,753		1,260,400		292,936			(1,552,004		)	767,085
Total liabilities and equity	$	2,730,708	$	1,660,642	$	1,078,066		$	(3,461,014	)	$	2,008,402



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 3, 2018
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	240,295		$	540,379		$	62,672		$	(67,517	)	$	775,829
Cost of goods sold	163,609			325,966			32,262			(56,618		)	465,219
Gross profit	76,686			214,413			30,410			(10,899		)	310,610
Selling and administrative expenses	64,766			195,318			16,337			(10,899		)	265,522
Restructuring and other special charges, net	4,831			509			—			—			5,340
Operating earnings	7,089			18,586			14,073			—			39,748
Interest (expense) income	(4,484		)	—			274			—			(4,210		)
Other income (expense)	3,101			—			(16		)	—			3,085
Intercompany interest income (expense)	2,976			(2,951		)	(25		)	—			—
Earnings before income taxes	8,682			15,635			14,306			—			38,623
Income tax provision	(3,012		)	(4,122		)	(2,334		)	—			(9,468		)
Equity in earnings (loss) of subsidiaries, net of tax	23,483			—			(662		)	(22,821		)	—
Net earnings	29,153			11,513			11,310			(22,821		)	29,155
Less: Net earnings attributable to noncontrolling interests	—			—			2			—			2
Net earnings attributable to Caleres, Inc.	$	29,153		$	11,513		$	11,308		$	(22,821	)	$	29,153

Comprehensive income	$	29,309		$	11,451		$	11,362		$	(22,822	)	$	29,300
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(9		)	—			(9		)
Comprehensive income attributable to Caleres, Inc.	$	29,309		$	11,451		$	11,371		$	(22,822	)	$	29,309




UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE THIRTY-NINE WEEKS ENDED NOVEMBER 3, 2018
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	651,807		$	1,487,877		$	164,829		$	(189,930	)	$	2,114,583
Cost of goods sold	448,832			862,345			83,538			(158,765		)	1,235,950
Gross profit	202,975			625,532			81,291			(31,165		)	878,633
Selling and administrative expenses	204,696			558,714			42,310			(31,165		)	774,555
Restructuring and other special charges, net	5,679			3,561			—			—			9,240
Operating (loss) earnings	(7,400		)	63,257			38,981			—			94,838
Interest (expense) income	(12,108		)	(25		)	638			—			(11,495		)
Other income (expense)	9,305			—			(51		)	—			9,254
Intercompany interest income (expense)	8,617			(8,650		)	33			—			—
(Loss) earnings before income taxes	(1,586		)	54,582			39,601			—			92,597
Income tax provision	(2,065		)	(14,257		)	(6,329		)	—			(22,651		)
Equity in earnings (loss) of subsidiaries, net of tax	73,662			—			(1,256		)	(72,406		)	—
Net earnings	70,011			40,325			32,016			(72,406		)	69,946
Less: Net loss attributable to noncontrolling interests	—			—			(65		)	—			(65		)
Net earnings attributable to Caleres, Inc.	$	70,011		$	40,325		$	32,081		$	(72,406	)	$	70,011

Comprehensive income	$	68,633		$	40,235		$	31,824		$	(72,200	)	$	68,492
Less: Comprehensive loss attributable to noncontrolling interests	—			—			(141		)	—			(141		)
Comprehensive income attributable to Caleres, Inc.	$	68,633		$	40,235		$	31,965		$	(72,200	)	$	68,633



UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE THIRTY-NINE WEEKS ENDED NOVEMBER 3, 2018
							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations		Total
Net cash provided by operating activities	$	2,739		$	76,601		$	15,070		$	—	$	94,410

Investing activities
Purchases of property and equipment	(14,094		)	(19,571		)	(1,579		)	—		(35,244		)
Capitalized software	(3,077		)	(428		)	—			—		(3,505		)
Acquisition of Blowfish Malibu, net of cash received	(17,284		)	—			—			—		(17,284		)
Acquisition of Vionic, net of cash received	(344,942		)	—			—			—		(344,942		)
Intercompany investing	2			(2		)	—			—		—
Net cash used for investing activities	(379,395		)	(20,001		)	(1,579		)	—		(400,975		)

Financing activities
Borrowings under revolving credit agreement	360,000			—			—			—		360,000
Repayments under revolving credit agreement	(10,000		)	—			—			—		(10,000		)
Repayments of capital lease obligation	—			(114		)	—			—		(114		)
Dividends paid	(9,059		)	—			—			—		(9,059		)
Acquisition of treasury stock	(3,288		)	—			—			—		(3,288		)
Issuance of common stock under share-based plans, net	(4,318		)	—			—			—		(4,318		)
Intercompany financing	21,244			(44,669		)	23,425			—		—
Net cash provided by (used for) financing activities	354,579			(44,783		)	23,425			—		333,221
Effect of exchange rate changes on cash and cash equivalents	—			—			(212		)	—		(212		)
(Decrease) increase in cash and cash equivalents	(22,077		)	11,817			36,704			—		26,444
Cash and cash equivalents at beginning of period	26,089			—			37,958			—		64,047
Cash and cash equivalents at end of period	$	4,012		$	11,817		$	74,662		$	—	$	90,491



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	61,827			197,481			15,394			(8,195		)	266,507
Operating earnings	11,478			29,880			9,020			—			50,378
Interest (expense) income	(4,093		)	(1		)	48			—			(4,046		)
Other income (expense)	2,492			—			—			—			2,492
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	179,720			570,272			45,254			(26,058		)	769,188
Restructuring and other special charges, net	3,769			37			167			—			3,973
Operating earnings	8,051			64,902			29,140			—			102,093
Interest (expense) income	(13,589		)	(13		)	372			—			(13,230		)
Other income (expense)	7,598			—			—			—			7,598
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



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