Condensed Consolidating Financial Information (Tables)

6 Months Ended

Apr. 30, 2013

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Second Quarter Ended April 30, 2013

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	116		$	190,265		$	290,111		$	(21,744	)	$	458,748
Cost of goods sold		—			117,488			144,071			(13,947	)		247,612
Gross profit		116			72,777			146,040			(7,797	)		211,136
Selling, general and administrative expense		11,753			72,999			141,282			(7,830	)		218,204
Asset impairments		—			4,988			344			—			5,332
Operating (loss)/income		(11,637	)		(5,210	)		4,414			33			(12,400	)
Interest expense		7,269			1,386			6,634			—			15,289
Foreign currency (gain)/loss		(28	)		198			(2,788	)		—			(2,618	)
Equity in earnings and other income		13,517			(483	)		—			(13,034	)		—
(Loss)/income before provision for income taxes		(32,395	)		(6,311	)		568			13,067			(25,071	)
Provision for income taxes		—			1,654			5,493			—			7,147
Net loss		(32,395	)		(7,965	)		(4,925	)		13,067			(32,218	)
Less: net income attributable to non-controlling interest		—			—			(177	)		—			(177	)
Net loss attributable to Quiksilver, Inc.		(32,395	)		(7,965	)		(5,102	)		13,067			(32,395	)
Other comprehensive loss		(16,723	)		—			(16,723	)		16,723			(16,723	)
Comprehensive loss attributable to Quiksilver, Inc.	$	(49,118	)	$	(7,965	)	$	(21,825	)	$	29,790		$	(49,118	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Second Quarter Ended April 30, 2012

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	120		$	185,686		$	328,589		$	(22,182	)	$	492,213
Cost of goods sold		—			109,044			155,662			(14,642	)		250,064
Gross profit		120			76,642			172,927			(7,540	)		242,149
Selling, general and administrative expense		12,869			74,934			144,422			(8,215	)		224,010
Asset impairments		—			415			—			—			415
Operating (loss)/income		(12,749	)		1,293			28,505			675			17,724
Interest expense		7,239			1,391			6,955			—			15,585
Foreign currency loss/(gain)		13			212			(834	)		—			(609	)
Equity in earnings and other income		(14,881	)		482			—			14,399			—
(Loss)/income before provision for income taxes		(5,120	)		(792	)		22,384			(13,724	)		2,748
Provision for income taxes		—			216			6,939			—			7,155
Net (loss)/income		(5,120	)		(1,008	)		15,445			(13,724	)		(4,407	)
Less: net income attributable to non-controlling interest		—			—			(713	)		—			(713	)
Net (loss)/income attributable to Quiksilver, Inc.		(5,120	)		(1,008	)		14,732			(13,724	)		(5,120	)
Other comprehensive loss		(1,271	)		—			(1,271	)		1,271			(1,271	)
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$	(6,391	)	$	(1,008	)	$	13,461		$	(12,453	)	$	(6,391	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

First Half Ended April 30, 2013

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	232		$	356,011		$	587,455		$	(53,932	)	$	889,766
Cost of goods sold		—			221,220			277,756			(40,053	)		458,923
Gross profit		232			134,791			309,699			(13,879	)		430,843
Selling, general and administrative expense		27,728			147,187			283,436			(14,888	)		443,463
Asset impairments		—			6,323			2,177			—			8,500
Operating (loss)/income		(27,496	)		(18,719	)		24,086			1,009			(21,120	)
Interest expense		14,538			2,854			13,404			—			30,796
Foreign currency loss		126			363			66			—			555
Equity in earnings and other income		21,364			(687	)		—			(20,677	)		—
(Loss)/income before provision for income taxes		(63,524	)		(21,249	)		10,616			21,686			(52,471	)
Provision for income taxes		—			467			9,904			—			10,371
Net (loss)/income		(63,524	)		(21,716	)		712			21,686			(62,842	)
Less: net income attributable to non-controlling interest		—			—			(682	)		—			(682	)
Net (loss)/income attributable to Quiksilver, Inc.		(63,524	)		(21,716	)		30			21,686			(63,524	)
Other comprehensive loss		(8,613	)		—			(8,613	)		8,613			(8,613	)
Comprehensive loss attributable to Quiksilver, Inc.	$	(72,137	)	$	(21,716	)	$	(8,583	)	$	30,299		$	(72,137	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

First Half Ended April 30, 2012

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	236		$	357,063		$	633,616		$	(49,081	)	$	941,834
Cost of goods sold		—			214,250			291,845			(34,360	)		471,735
Gross profit		236			142,813			341,771			(14,721	)		470,099
Selling, general and administrative expense		29,785			152,431			287,467			(15,258	)		454,425
Asset impairments		—			415			—			—			415
Operating (loss)/income		(29,549	)		(10,033	)		54,304			537			15,259
Interest expense		14,479			2,685			13,466			—			30,630
Foreign currency (gain)/loss		(113	)		9			(2,355	)		—			(2,459	)
Equity in earnings and other income		(16,190	)		1,733			—			14,457			—
(Loss)/income before provision for income taxes		(27,725	)		(14,460	)		43,193			(13,920	)		(12,912	)
Provision for income taxes		—			432			11,973			—			12,405
Net (loss)/income		(27,725	)		(14,892	)		31,220			(13,920	)		(25,317	)
Less: net income attributable to non-controlling interest		—			—			(2,408	)		—			(2,408	)
Net (loss)/income attributable to Quiksilver, Inc.		(27,725	)		(14,892	)		28,812			(13,920	)		(27,725	)
Other comprehensive loss		(21,031	)		—			(21,031	)		21,031			(21,031	)
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$	(48,756	)	$	(14,892	)	$	7,781		$	7,111		$	(48,756	)

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

At April 30, 2013

In thousands	Quiksilver, Inc.		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	108	$	694	$	47,091	$	—		$	47,893
Trade accounts receivable, net		—		127,762		247,574		—			375,336
Other receivables		19		8,526		23,388		—			31,933
Income taxes receivable		—		—		4,917		(4,917	)		—
Inventories		—		131,136		234,160		1,008			366,304
Deferred income taxes, short-term		—		5,209		20,487		—			25,696
Prepaid expenses and other current assets		4,594		9,910		18,953		—			33,457
Intercompany balances		—		108,623		52,777		(161,400	)		—
Total current assets		4,721		391,860		649,347		(165,309	)		880,619
Fixed assets, net		19,454		57,774		155,727		—			232,955
Intangible assets, net		3,752		47,171		87,826		—			138,749
Goodwill		—		112,216		160,548		—			272,764
Other assets		1,902		1,982		39,875		—			43,759
Deferred income taxes, long-term		—		—		137,941		(23,550	)		114,391
Investment in subsidiaries		1,066,560		6,986		—		(1,073,546	)		—
Total assets	$	1,096,389	$	617,989	$	1,231,264	$	(1,262,405	)	$	1,683,237
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	2,756	$	85,025	$	97,789	$	—		$	185,570
Accrued liabilities		6,049		22,658		73,773		—			102,480
Long-term debt, current portion		—		6,094		38,740		—			44,834
Income taxes payable		—		5,368		—		(4,917	)		451
Intercompany balances		161,400		—		—		(161,400	)		—
Total current liabilities		170,205		119,145		210,302		(166,317	)		333,335
Long-term debt, net of current portion		400,000		76,000		293,108		—			769,108
Deferred income taxes, long-term		—		23,550		—		(23,550	)		—
Other long-term liabilities		—		23,987		10,971		—			34,958
Total liabilities		570,205		242,682		514,381		(189,867	)		1,137,401
Stockholders’/invested equity		526,184		375,307		697,231		(1,072,538	)		526,184
Non-controlling interest		—		—		19,652		—			19,652
Total liabilities and equity	$	1,096,389	$	617,989	$	1,231,264	$	(1,262,405	)	$	1,683,237

CONDENSED CONSOLIDATING BALANCE SHEET

At October 31, 2012

In thousands	Quiksilver, Inc.		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	324	$	135	$	41,364	$	—		$	41,823
Trade accounts receivable, net		—		181,945		251,798		—			433,743
Other receivables		20		6,158		26,640		—			32,818
Income taxes receivable		—		117		—		(117	)		—
Inventories		—		107,722		237,465		(441	)		344,746
Deferred income taxes		—		5,209		21,159		—			26,368
Prepaid expenses and other current assets		2,277		9,548		14,546		—			26,371
Intercompany balances		—		95,809		23,025		(118,834	)		—
Total current assets		2,621		406,643		615,997		(119,392	)		905,869
Fixed assets, net		18,802		64,496		155,015		—			238,313
Intangible assets, net		3,228		47,746		88,475		—			139,449
Goodwill		—		112,216		160,951		—			273,167
Other assets		2,753		2,677		42,359		—			47,789
Deferred income taxes long-term		—		—		137,203		(23,550	)		113,653
Investment in subsidiaries		1,087,924		5,028		—		(1,092,952	)		—
Total assets	$	1,115,328	$	638,806	$	1,200,000	$	(1,235,894	)	$	1,718,240
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit	$	—	$	—	$	18,147	$	—		$	18,147
Accounts payable		6,995		95,355		101,222		—			203,572
Accrued liabilities		6,189		28,343		80,359		—			114,891
Current portion of long-term debt		—		8,594		10,053		—			18,647
Income taxes payable		—		—		1,476		(117	)		1,359
Intercompany balances		118,834		—		—		(118,834	)		—
Total current liabilities		132,018		132,292		211,257		(118,951	)		356,616
Long-term debt, net of current portion		400,000		60,700		260,475		—			721,175
Deferred income taxes long-term		—		23,550		—		(23,550	)		—
Other long-term liabilities		—		25,241		12,972		—			38,213
Total liabilities		532,018		241,783		484,704		(142,501	)		1,116,004
Stockholders’/invested equity		583,310		397,023		696,370		(1,093,393	)		583,310
Non-controlling interest		—		—		18,926		—			18,926
Total liabilities and equity	$	1,115,328	$	638,806	$	1,200,000	$	(1,235,894	)	$	1,718,240

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

First half Ended April 30, 2013

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(63,524	)	$	(21,716	)	$	712		$	21,686		$	(62,842	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and amortization		1,124			9,014			14,889			—			25,027
Stock-based compensation		11,223			—			—			—			11,223
Provision for doubtful accounts		—			(1,056	)		4,584			—			3,528
Asset impairments		—			6,323			2,177			—			8,500
Equity in earnings		21,364			(687	)		1,058			(20,677	)		1,058
Non-cash interest expense		785			675			378			—			1,838
Deferred income taxes		—			—			184			—			184
Other adjustments to reconcile net (loss)/income		126			(17	)		(377	)		—			(268	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			55,239			1,346			—			56,585
Inventories		—			(23,280	)		2,186			(1,009	)		(22,103	)
Other operating assets and liabilities		(582	)		(20,416	)		(20,126	)		—			(41,124	)
Net cash (used in)/provided by operating activities		(29,484	)		4,079			7,011			—			(18,394	)
Cash flows from investing activities:
Capital expenditures		(3,971	)		(7,601	)		(17,072	)		—			(28,644	)
Net cash used in investing activities		(3,971	)		(7,601	)		(17,072	)		—			(28,644	)
Cash flows from financing activities:
Borrowings on lines of credit		—			—			6,157			—			6,157
Payments on lines of credit		—			—			(8,860	)		—			(8,860	)
Borrowings on long-term debt		—			49,000			54,134			—			103,134
Payments on long-term debt		—			(36,200	)		(9,502	)		—			(45,702	)
Stock option exercises and employee stock purchases		3,832			—			—			—			3,832
Intercompany		29,407			(8,719	)		(20,688	)		—			—
Net cash provided by financing activities		33,239			4,081			21,241			—			58,561
Effect of exchange rate changes on cash		—			—			(5,453	)		—			(5,453	)
Net (decrease)/increase in cash and cash equivalents		(216	)		559			5,727			—			6,070
Cash and cash equivalents, beginning of period		324			135			41,364			—			41,823
Cash and cash equivalents, end of period	$	108		$	694		$	47,091		$	—		$	47,893

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

First Half Ended April 30, 2012

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(27,725	)	$	(14,892	)	$	31,220		$	(13,920	)	$	(25,317	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and amortization		1,138			9,082			16,905			—			27,125
Stock-based compensation		12,400			—			—			—			12,400
Provision for doubtful accounts		—			(1,416	)		1,835			—			419
Asset impairments		—			415			—			—			415
Equity in earnings		(16,190	)		1,733			501			14,457			501
Non-cash interest expense		732			888			344			—			1,964
Deferred income taxes		—			—			9,295			—			9,295
Other adjustments to reconcile net (loss)/income		(138	)		12			(586	)		—			(712	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			25,895			(8,184	)		—			17,711
Inventories		—			(14,290	)		(3,695	)		(537	)		(18,522	)
Other operating assets and liabilities		(1,825	)		(11,645	)		(29,491	)		—			(42,961	)
Net cash (used in)/provided by operating activities		(31,608	)		(4,218	)		18,144			—			(17,682	)
Cash flows from investing activities:
Capital expenditures		(1,559	)		(14,094	)		(18,676	)		—			(34,329	)
Business acquisitions, net of cash acquired		—			—			(9,117	)		—			(9,117	)
Net cash used in investing activities		(1,559	)		(14,094	)		(27,793	)		—			(43,446	)
Cash flows from financing activities:
Borrowings on lines of credit		—			—			8,464			—			8,464
Payments on lines of credit		—			—			(12,326	)		—			(12,326	)
Borrowings on long-term debt		—			62,500			29,477			—			91,977
Payments on long-term debt		—			(35,256	)		(12,100	)		—			(47,356	)
Stock option exercises and employee stock purchases		779			—			—			—			779
Intercompany		32,394			(8,330	)		(24,064	)		—			—
Net cash provided by/(used in) financing activities		33,173			18,914			(10,549	)		—			41,538
Effect of exchange rate changes on cash		—			—			(10,986	)		—			(10,986	)
Net increase/(decrease) in cash and cash equivalents		6			602			(31,184	)		—			(30,576	)
Cash and cash equivalents, beginning of period		17			1,331			108,405			—			109,753
Cash and cash equivalents, end of period	$	23		$	1,933		$	77,221		$	—		$	79,177