Condensed Consolidating Financial Information

6 Months Ended

12 Months Ended

Apr. 30, 2013

Oct. 31, 2012

Quiksilver, Inc. [Member]

Condensed Consolidating Financial Information

15. Condensed Consolidating Financial Information

The Company has $400 million in publicly registered U.S. senior notes. Obligations under the Company’s U.S. senior notes are fully and unconditionally guaranteed by certain of its existing domestic subsidiaries.

The Company is required to present condensed consolidating financial information for Quiksilver, Inc. and its domestic subsidiaries within the notes to the consolidated financial statements in accordance with the criteria established for parent companies in the SEC’s Regulation S-X, Rule 3-10(f). The following condensed consolidating financial information presents the results of operations for the second quarter and first half ended April 30, 2013 and 2012, the financial position as of April 30, 2013 and October 31, 2012, and cash flows for the first half ended April 30, 2013 and 2012, of Quiksilver Inc., its 100% owned guarantor subsidiaries, its non-guarantor subsidiaries and the eliminations necessary to arrive at the information for the Company on a consolidated basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Certain immaterial balances have been reclassified in the April 30, 2012 condensed consolidating financial information to conform to the current year presentation. The Company has applied the estimated consolidated annual effective income tax rate to both the guarantor and non-guarantor subsidiaries, adjusting for any discrete items, for interim reporting purposes. In the Company’s consolidated financial statements for fiscal 2013, management will apply the actual income tax rates to both the guarantor and non-guarantor subsidiaries. These interim tax rates may differ from the actual annual effective income tax rates for both the guarantor and non-guarantor subsidiaries.

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

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

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

Note 18—Condensed Consolidating Financial Information

In December 2005, the Company completed an exchange offer to exchange its Senior Notes for publicly registered notes with identical terms. Obligations under the Company’s Senior Notes are fully and unconditionally guaranteed by certain of its existing domestic subsidiaries.

The Company is required to present condensed consolidating financial information for Quiksilver, Inc. and its domestic subsidiaries within the notes to the consolidated financial statements in accordance with the criteria established for parent companies in the SEC’s Regulation S-X, Rule 3-10(f). The following condensed consolidating financial information presents the results of operations, financial position and cash flows of Quiksilver Inc., its 100% owned Guarantor subsidiaries, its non-Guarantor subsidiaries and the eliminations necessary to arrive at the information for the Company on a consolidated basis as of October 31, 2012 and 2011 and for each of fiscal 2012, 2011 and 2010. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Certain immaterial balances have been reclassified in the prior year financial statements to conform to the current year presentation. As a result of the adoption of ASU 2011-05, the Company has updated the following condensed consolidated statements of operations to include other comprehensive (loss)/income.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Year Ended October 31, 2012

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	469		$	854,754		$	1,262,757		$	(104,741	)	$	2,013,239
Cost of goods sold		—			505,420			602,115			(74,642	)		1,032,893
Gross profit		469			349,334			660,642			(30,099	)		980,346
Selling, general and administrative expense		56,983			311,886			577,868			(30,593	)		916,144
Asset impairments		—			5,162			2,072			—			7,234
Operating (loss)/income		(56,514	)		32,286			80,702			494			56,968
Interest expense		28,987			5,351			26,485			—			60,823
Foreign currency gain		(173	)		(35	)		(1,461	)		—			(1,669	)
Equity in earnings		(74,572	)		4,674			—			69,898			—
(Loss)/income before provision for income taxes		(10,756	)		22,296			55,678			(69,404	)		(2,186	)
Provision for income taxes		—			1,144			6,413			—			7,557
Net (loss)/income		(10,756	)		21,152			49,265			(69,404	)		(9,743	)
Less: net income attributable to non-controlling interest		—			—			(1,013	)		—			(1,013	)
Net (loss)/income attributable to Quiksilver, Inc.		(10,756	)		21,152			48,252			(69,404	)		(10,756	)
Other Comprehensive Loss	(29,715)			—			(29,715)			29,715			(29,715)
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$(40,471)			$21,152			$18,537			$(39,689)			$(40,471)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Year Ended October 31, 2011

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	464		$	736,110		$	1,270,320		$	(53,833	)	$	1,953,061
Cost of goods sold		—			399,493			554,593			(24,859	)		929,227
Gross profit		464			336,617			715,727			(28,974	)		1,023,834
Selling, general and administrative expense		43,045			311,840			566,703			(25,639	)		895,949
Asset impairments		—			3,399			82,974			—			86,373
Operating (loss)/income		(42,581	)		21,378			66,050			(3,335	)		41,512
Interest expense		28,871			3,785			41,152			—			73,808
Foreign currency loss/(gain)		30			(40	)		(101	)		—			(111	)
Equity in earnings		(50,224	)		(836	)		—			51,060			—
(Loss)/income before provision/(benefit) for income taxes		(21,258	)		18,469			24,999			(54,395	)		(32,185	)
Provision/(benefit) for income taxes		—			165			(14,480	)		—			(14,315	)
Net (loss)/income		(21,258	)		18,304			39,479			(54,395	)		(17,870	)
Less: net income attributable to non-controlling interest		—			—			(3,388	)		—			(3,388	)
Net (loss)/income attributable to Quiksilver, Inc.		(21,258	)		18,304			36,091			(54,395	)		(21,258	)
Other comprehensive income		2,445			—			2,445			(2,445	)		2,445
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$	(18,813	)	$	18,304		$	38,536		$	(56,840	)	$	(18,813	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

Year Ended October 31, 2010

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	376		$	683,767		$	1,195,536		$	(42,059	)	$	1,837,620
Cost of goods sold		—			373,740			511,777			(15,145	)		870,372
Gross profit		376			310,027			683,759			(26,914	)		967,248
Selling, general and administrative expense		36,867			283,347			537,153			(25,301	)		832,066
Asset impairments		—			7,585			4,072			—			11,657
Operating (loss)/income		(36,491	)		19,095			142,534			(1,613	)		123,525
Interest expense, net		28,721			55,070			30,318			—			114,109
Foreign currency gain		(285	)		(124	)		(5,508	)		—			(5,917	)
Equity in earnings and other (income)/expense		(50,399	)		(1,482	)		—			51,881			—
(Loss)/income before (benefit)/provision for income taxes		(14,528	)		(34,369	)		117,724			(53,494	)		15,333
(Benefit)/provision for income taxes		(4,844	)		522			27,755			—			23,433
(Loss)/income from continuing operations		(9,684	)		(34,891	)		89,969			(53,494	)		(8,100	)
Income from discontinued operations		—			1,485			345			—			1,830
Net (loss)/income		(9,684	)		(33,406	)		90,314			(53,494	)		(6,270	)
Less: net income attributable to non-controlling interest		—			—			(3,414	)		—			(3,414	)
Net (loss)/income attributable to Quiksilver, Inc.		(9,684	)		(33,406	)		86,900			(53,494	)		(9,684	)
Other comprehensive income		18,286			—			18,286			(18,286	)		18,286
Comprehensive income/(loss) attributable to Quiksilver, Inc.	$	8,602		$	(33,406	)	$	105,186		$	(71,780	)	$	8,602

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
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
Total current assets		2,621		310,717			592,972			(441	)		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		—		(23,550	)		137,203			—			113,653
Investment in subsidiaries		1,087,924		5,028			—			(1,092,952	)		—
Total assets	$	1,115,328	$	519,330		$	1,176,975		$	(1,093,393	)	$	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		—		(117	)		1,476			—			1,359
Intercompany balances		118,834		(95,809	)		(23,025	)		—			—
Total current liabilities		132,018		36,366			188,232			—			356,616
Long-term debt, net of current portion		400,000		60,700			260,475			—			721,175
Other long-term liabilities		—		25,241			12,972			—			38,213
Total liabilities		532,018		122,307			461,679			—			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	$	519,330		$	1,176,975		$	(1,093,393	)	$	1,718,240

CONDENSED CONSOLIDATING BALANCE SHEET

At October 31, 2011

In thousands	Quiksilver, Inc.		Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	17	$	1,331		$	108,405		$	—		$	109,753
Trade accounts receivable, net		—		150,782			246,307			—			397,089
Other receivables		122		5,918			17,150			—			23,190
Income taxes receivable		—		21,338			(17,073	)		—			4,265
Inventories		—		115,456			234,266			(1,965	)		347,757
Deferred income taxes		—		(1,182	)		33,990			—			32,808
Prepaid expenses and other current assets		2,378		8,525			14,526			—			25,429
Total current assets		2,517		302,168			637,571			(1,965	)		940,291
Fixed assets, net		17,602		64,943			155,562			—			238,107
Intangible assets, net		3,007		48,743			86,393			—			138,143
Goodwill		—		112,216			156,373			—			268,589
Other assets		4,457		3,936			47,421			—			55,814
Deferred income taxes long-term		—		(16,682	)		139,961			—			123,279
Investment in subsidiaries		1,084,745		8,929			—			(1,093,674	)		—
Total assets	$	1,112,328	$	524,253		$	1,223,281		$	(1,095,639	)	$	1,764,223
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit	$	—	$	—		$	18,335		$	—		$	18,335
Accounts payable		2,510		88,280			112,233			—			203,023
Accrued liabilities		6,673		30,088			96,183			—			132,944
Current portion of long-term debt		—		3,000			1,628			—			4,628
Intercompany balances		93,047		(34,611	)		(58,436	)		—			—
Total current liabilities		102,230		86,757			169,943			—			358,930
Long-term debt, net of current portion		400,000		36,542			288,181			—			724,723
Other long-term liabilities		—		41,219			16,729			—			57,948
Total liabilities		502,230		164,518			474,853			—			1,141,601
Stockholders’/invested equity		610,098		359,735			735,904			(1,095,639	)		610,098
Non-controlling interest		—		—			12,524			—			12,524
Total liabilities and equity	$	1,112,328	$	524,253		$	1,223,281		$	(1,095,639	)	$	1,764,223

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Year Ended October 31, 2012

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(10,756	)	$	21,152		$	49,265		$	(69,404	)	$	(9,743	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and amortization		2,088			18,002			33,142			—			53,232
Stock-based compensation		22,552			—			—			—			22,552
Provision for doubtful accounts		—			(1,642	)		6,236			—			4,594
Asset impairments		—			5,162			2,072			—			7,234
Equity in earnings		(74,572	)		4,674			282			69,898			282
Non-cash interest expense		1,490			1,506			689			—			3,685
Deferred income taxes		—			474			(9,056	)		—			(8,582	)
Other adjustments to reconcile net (loss)/income		(443	)		36			(6,092	)		—			(6,499	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			(29,521	)		(23,884	)		—			(53,405	)
Inventories		—			7,195			(11,679	)		(494	)		(4,978	)
Other operating assets and liabilities		10,255			2,233			(34,399	)		—			(21,911	)
Net cash (used in)/provided by operating activities		(49,386	)		29,271			6,576			—			(13,539	)
Cash flows from investing activities:
Proceeds from the sale of properties and equipment		—			45			8,153			—			8,198
Capital expenditures		(4,388	)		(22,580	)		(39,113	)		—			(66,081	)
Business acquisitions, net of cash acquired		—			—			(9,117	)		—			(9,117	)
Net cash used in investing activities		(4,388	)		(22,535	)		(40,077	)		—			(67,000	)
Cash flows from financing activities:
Transactions with non-controlling interest owners		—			(11,000	)		—			—			(11,000	)
Borrowings on lines of credit		—			—			15,139			—			15,139
Payments on lines of credit		—			—			(12,641	)		—			(12,641	)
Borrowings on long-term debt		—			93,500			46,535			—			140,035
Payments on long-term debt		—			(70,800	)		(42,041	)		—			(112,841	)
Stock option exercises and employee stock purchases		2,241			—			—			—			2,241
Intercompany		51,840			(19,632	)		(32,208	)		—			—
Net cash provided by/(used in) financing activities		54,081			(7,932	)		(25,216	)		—			20,933
Effect of exchange rate changes on cash		—			—			(8,324	)		—			(8,324	)
Net increase/(decrease) in cash and cash equivalents		307			(1,196	)		(67,041	)		—			(67,930	)
Cash and cash equivalents, beginning of period		17			1,331			108,405			—			109,753
Cash and cash equivalents, end of period	$	324		$	135		$	41,364			—		$	41,823

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Year Ended October 31, 2011

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(21,258	)	$	18,304		$	39,479		$	(54,395	)	$	(17,870	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and amortization		1,735			20,445			33,079			—			55,259
Stock-based compensation		14,414			—			—			—			14,414
Provision for doubtful accounts		—			1,363			7,369			—			8,732
Asset impairments		—			3,399			82,974			—			86,373
Equity in earnings		(50,224	)		(994	)		(197	)		51,060			(355	)
Non-cash interest expense		1,387			1,808			15,917			—			19,112
Deferred income taxes		—			3,703			(31,951	)		—			(28,248	)
Other adjustments to reconcile net (loss)/income		72			481			(6,219	)		—			(5,666	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			(22,106	)		(11,879	)		—			(33,985	)
Inventories		—			(23,322	)		(50,719	)		3,335			(70,706	)
Other operating assets and liabilities		1,090			(4,275	)		30,274			—			27,089
Net cash (used in)/provided by operating activities		(52,784	)		(1,194	)		108,127			—			54,149
Cash flows from investing activities:
Proceeds from the sale of properties and equipment		—			15			12,531			—			12,546
Capital expenditures		(12,570	)		(34,624	)		(42,396	)		—			(89,590	)
Business acquisitions, net of cash acquired		—			(528	)		(5,050	)		—			(5,578	)
Net cash used in investing activities		(12,570	)		(35,137	)		(34,915	)		—			(82,622	)
Cash flows from financing activities:
Borrowings on lines of credit		—			—			30,070			—			30,070
Payments on lines of credit		—			—			(35,303	)		—			(35,303	)
Borrowings on long-term debt		—			44,500			270,830			—			315,330
Payments on long-term debt		—			(25,524	)		(259,152	)		—			(284,676	)
Payments of debt issuance costs		—			—			(6,391	)		—			(6,391	)
Stock option exercises and employee stock purchases		4,129			—			—			—			4,129
Intercompany		61,078			(20,486	)		(40,592	)		—			—
Net cash provided by/(used in) financing activities		65,207			(1,510	)		(40,538	)		—			23,159
Effect of exchange rate changes on cash		—			—			(5,526	)		—			(5,526	)
Net (decrease)/increase in cash and cash equivalents		(147	)		(37,841	)		27,148			—			(10,840	)
Cash and cash equivalents, beginning of period		164			39,172			81,257			—			120,593
Cash and cash equivalents, end of period	$	17		$	1,331		$	108,405			—		$	109,753

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Year Ended October 31, 2010

In thousands	Quiksilver, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(9,684	)	$	(33,406	)	$	90,314		$	(53,494	)	$	(6,270	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Income from discontinued operations		—			(1,485	)		(345	)		—			(1,830	)
Depreciation and amortization		1,519			21,494			30,848			—			53,861
Stock-based compensation		12,831			—			—			—			12,831
Provision for doubtful accounts		—			4,360			10,947			—			15,307
Equity in earnings		(50,399	)		(1,482	)		(524	)		51,881			(524	)
Asset impairments		—			8,403			3,254			—			11,657
Non-cash interest expense		1,292			42,740			12,663			—			56,695
Deferred taxes		—			(5,652	)		13,681			—			8,029
Other adjustments to reconcile net (loss)/income		(195	)		(1,455	)		(1,892	)		—			(3,542	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			15,735			24,111			—			39,846
Inventories		—			(5,075	)		7,967			1,613			4,505
Other operating assets and liabilities		16,733			7,960			(15,561	)		—			9,132
Cash (used in)/provided by operating activities of continuing operations		(27,903	)		52,137			175,463			—			199,697
Cash provided by operating activities of discontinued operations		—			1,507			2,278			—			3,785
Net cash (used in)/provided by operating activities		(27,903	)		53,644			177,741			—			203,482
Cash flows from investing activities:
Proceeds from the sale of properties and equipment		34			4,519			109			—			4,662
Capital expenditures		(4,194	)		(10,730	)		(32,873	)		—			(47,797	)
Changes in restricted cash		—			—			52,706			—			52,706
Net cash (used in)/provided by investing activities		(4,160	)		(6,211	)		19,942			—			9,571
Cash flows from financing activities:
Borrowings on lines of credit		—			—			16,581			—			16,581
Payments on lines of credit		—			—			(27,021	)		—			(27,021	)
Borrowings on long-term debt		—			42,735			16,618			—			59,353
Payments on long-term debt		—			(51,489	)		(169,077	)		—			(220,566	)
Payments of debt and equity issuance costs		(7,750	)		—			(1,823	)		—			(9,573	)
Proceeds from stock option exercises		3,639			—			—			—			3,639
Transactions with non-controlling interests owners		—			(1,542	)		(3,632	)		—			(5,174	)
Intercompany		36,017			900			(36,917	)		—			—
Net cash provided by/(used in) financing activities		31,906			(9,396	)		(205,271	)		—			(182,761	)
Effect of exchange rate changes on cash		—			—			(9,215	)		—			(9,215	)
Net (decrease)/increase in cash and cash equivalents		(157	)		38,037			(16,803	)		—			21,077
Cash and cash equivalents, beginning of period		321			1,135			98,060			—			99,516
Cash and cash equivalents, end of period	$	164		$	39,172		$	81,257			—		$	120,593

Quiksilver, Inc. and QS Wholesale, Inc. [Member]

Condensed Consolidating Financial Information

Note 16—Condensed Consolidating Financial Information

Obligations under Quiksilver, Inc.’s and QS Wholesale, Inc.’s senior notes issued on July 16, 2013 (see Note 14—Subsequent Events) are fully and unconditionally guaranteed by certain of the Company’s existing 100% owned domestic subsidiaries. As a result of the subsequent registration of these notes, the Company is required to present condensed consolidating financial information for Quiksilver, Inc., QS Wholesale, Inc., and the Company’s subsidiaries within the notes to the consolidated financial statements in accordance with the criteria established for parent companies in the SEC’s Regulation S-X, Rule 3-10(f).

The following condensed consolidating financial information presents the results of operations for the second quarter and first half ended April 30, 2013 and 2012, the financial position as of April 30, 2013 and October 31, 2012, and cash flows for the first half ended April 30, 2013 and 2012, of Quiksilver, Inc., QS Wholesale, Inc., Quiksilver, Inc’s 100% owned guarantor subsidiaries, its non-guarantor subsidiaries and the eliminations necessary to arrive at the information for the Company on a consolidated basis. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Statement of Operations

Second Quarter Ended April 30, 2013

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	116		$	105,393		$	108,336		$	290,111		$	(45,208	)	$	458,748
Cost of goods sold		—			65,353			71,696			144,071			(33,508	)		247,612
Gross profit		116			40,040			36,640			146,040			(11,700	)		211,136
Selling, general and administrative expense		11,753			36,182			36,817			141,282			(7,830	)		218,204
Asset impairments		—			1,646			3,342			344			—			5,332
Operating (loss)/income		(11,637	)		2,212			(3,519	)		4,414			(3,870	)		(12,400	)
Interest expense, net		7,269			1,440			(54	)		6,634			—			15,289
Foreign currency (gain)/loss		(28	)		73			125			(2,788	)		—			(2,618	)
Equity in earnings		13,094			(483	)		—			—			(12,611	)		—
(Loss)/income before provision for income taxes		(31,972	)		1,182			(3,590	)		568			8,741			(25,071	)
Provision for income taxes		423			1,231			—			5,493			—			7,147
Net loss		(32,395	)		(49	)		(3,590	)		(4,925	)		8,741			(32,218	)
Less: Net income attributable to non-controlling interest		—			—			—			(177	)		—			(177	)
Net loss attributable to Quiksilver, Inc.		(32,395	)		(49	)		(3,590	)		(5,102	)		8,741			(32,395	)
Other comprehensive loss		(16,723	)		—			—			(16,723	)		16,723			(16,723	)
Comprehensive loss attributable to Quiksilver, Inc.	$	(49,118	)	$	(49	)	$	(3,590	)	$	(21,825	)	$	25,464		$	(49,118	)

Condensed Consolidating Statement of Operations

Second Quarter Ended April 30, 2012

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	120		$	102,789	$	109,272	$	328,589		$	(48,557	)	$	492,213
Cost of goods sold		—			64,425		65,796		155,662			(35,819	)		250,064
Gross profit		120			38,364		43,476		172,927			(12,738	)		242,149
Selling, general and administrative expense		12,869			35,782		39,152		144,422			(8,215	)		224,010
Asset impairments		—			—		415		—			—			415
Operating (loss)/income		(12,749	)		2,582		3,909		28,505			(4,523	)		17,724
Interest expense, net		7,239			1,391		—		6,955			—			15,585
Foreign currency loss/(gain)		13			131		81		(834	)		—			(609	)
Equity in earnings		(14,881	)		482		—		—			14,399			—
(Loss)/income before provision for income taxes		(5,120	)		578		3,828		22,384			(18,922	)		2,748
Provision for income taxes		—			216		—		6,939			—			7,155
Net (loss)/income		(5,120	)		362		3,828		15,445			(18,922	)		(4,407	)
Less: Net income attributable to non-controlling interest		—			—		—		(713	)		—			(713	)
Net (loss)/income attributable to Quiksilver, Inc.		(5,120	)		362		3,828		14,732			(18,922	)		(5,120	)
Other comprehensive loss		(1,271	)		—		—		(1,271	)		1,271			(1,271	)
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$	(6,391	)	$	362	$	3,828	$	13,461		$	(17,651	)	$	(6,391	)

Condensed Consolidating Statement of Operations

First Half Ended April 30, 2013

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	232		$	193,912		$	222,717		$	587,455		$	(114,550	)	$	889,766
Cost of goods sold		—			117,959			159,945			277,756			(96,737	)		458,923
Gross profit		232			75,953			62,772			309,699			(17,813	)		430,843
Selling, general and administrative expense		27,728			72,129			75,058			283,436			(14,888	)		443,463
Asset impairments		—			1,646			4,677			2,177			—			8,500
Operating (loss)/income		(27,496	)		2,178			(16,963	)		24,086			(2,925	)		(21,120	)
Interest expense, net		14,538			2,909			(55	)		13,404			—			30,796
Foreign currency loss		126			86			277			66			—			555
Equity in earnings		20,941			(687	)		—			—			(20,254	)		—
(Loss)/income before provision for income taxes		(63,101	)		(130	)		(17,185	)		10,616			17,329			(52,471	)
Provision for income taxes		423			44			—			9,904			—			10,371
Net (loss)/income		(63,524	)		(174	)		(17,185	)		712			17,329			(62,842	)
Less: Net income attributable to non-controlling interest		—			—			—			(682	)		—			(682	)
Net (loss)/income attributable to Quiksilver, Inc		(63,524	)		(174	)		(17,185	)		30			17,329			(63,524	)
Other comprehensive loss		(8,613	)		—			—			(8,613	)		8,613			(8,613	)
Comprehensive loss attributable to Quiksilver, Inc.	$	(72,137	)	$	(174	)	$	(17,185	)	$	(8,583	)	$	25,942		$	(72,137	)

Condensed Consolidating Statement of Operations

First Half Ended April 30, 2012

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	236		$	232,949		$	226,151		$	633,616		$	(151,118	)	$	941,834
Cost of goods sold		—			146,286			150,591			291,845			(116,987	)		471,735
Gross profit		236			86,663			75,560			341,771			(34,131	)		470,099
Selling, general and administrative expense		29,785			73,689			78,742			287,467			(15,258	)		454,425
Asset impairments		—			—			415			—			—			415
Operating (loss)/income		(29,549	)		12,974			(3,597	)		54,304			(18,873	)		15,259
Interest expense, net		14,479			2,685			—			13,466			—			30,630
Foreign currency (gain)/loss		(113	)		(124	)		133			(2,355	)		—			(2,459	)
Equity in earnings		(16,190	)		1,733			—			—			14,457			—
(Loss)/income before provision for income taxes		(27,725	)		8,680			(3,730	)		43,193			(33,330	)		(12,912	)
Provision for income taxes		—			432			—			11,973			—			12,405
Net (loss)/income		(27,725	)		8,248			(3,730	)		31,220			(33,330	)		(25,317	)
Less: Net income attributable to non-controlling interest		—			—			—			(2,408	)		—			(2,408	)
Net (loss)/income attributable to Quiksilver, Inc		(27,725	)		8,248			(3,730	)		28,812			(33,330	)		(27,725	)
Other comprehensive loss		(21,031	)		—			—			(21,031	)		21,031			(21,031	)
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$	(48,756	)	$	8,248		$	(3,730	)	$	7,781		$	(12,299	)	$	(48,756	)

Condensed Consolidating Balance Sheet

April 30, 2013

In thousands	Quiksilver, Inc.		QS Wholesale, Inc.		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	108	$	2,186	$	(1,492	)	$	47,091	$	—		$	47,893
Trade accounts receivable, net		—		82,867		44,895			247,574		—			375,336
Other receivables		19		2,925		5,601			23,388		—			31,933
Income taxes receivable		—		232		—			—		(232	)		—
Inventories		—		46,391		103,330			234,160		(17,577	)		366,304
Deferred income taxes		—		26,617		—			20,487		(21,408	)		25,696
Prepaid expenses and other current assets		4,594		5,011		4,899			18,953		—			33,457
Intercompany balances		—		34,756		59,069			67,483		(161,308	)		—
Total current assets		4,721		200,985		216,302			659,136		(200,525	)		880,619
Fixed assets, net		19,454		35,349		22,425			155,727		—			232,955
Intangible assets, net		3,752		45,039		2,132			87,826		—			138,749
Goodwill		—		103,880		8,336			160,548		—			272,764
Other assets		1,902		1,396		586			39,875		—			43,759
Deferred income taxes long-term		20,387		—		—			139,240		(45,236	)		114,391
Investment in subsidiaries		1,066,983		161,231		—			—		(1,228,214	)		—
Total assets	$	1,117,199	$	547,880	$	249,781		$	1,242,352	$	(1,473,975	)	$	1,683,237
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	2,756	$	46,944	$	38,081		$	97,789	$	—		$	185,570
Accrued liabilities		6,049		13,345		9,313			73,773		—			102,480
Current portion of long-term debt		—		6,094		—			38,740		—			44,834
Income taxes payable		—		—		—			683		(232	)		451
Deferred income taxes		20,902		—		506			—		(21,408	)		—
Intercompany balances		161,308		—		—			—		(161,308	)		—
Total current liabilities		191,015		66,383		47,900			210,985		(182,948	)		333,335
Long-term debt		400,000		76,000		—			293,108		—			769,108
Deferred income taxes long-term		—		42,951		2,285			—		(45,236	)		—
Other long-term liabilities		—		5,108		8,474			21,376		—			34,958
Total liabilities		591,015		190,442		58,659			525,469		(228,184	)		1,137,401
Stockholders’/invested equity:		526,184		357,438		191,122			697,231		(1,245,791	)		526,184
Non-controlling interest		—		—		—			19,652		—			19,652
Total liabilities and equity	$	1,117,199	$	547,880	$	249,781		$	1,242,352	$	(1,473,975	)	$	1,683,237

Condensed Consolidating Balance Sheet

October 31, 2012

In thousands	Quiksilver, Inc.		QS Wholesale, Inc.		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	324	$	1,966	$	(1,831	)	$	41,364	$	—		$	41,823
Trade accounts receivable, net		—		80,522		101,423			251,798		—			433,743
Other receivables		20		2,767		3,391			26,640		—			32,818
Income taxes receivable		—		117		—			—		(117	)		—
Inventories		—		32,156		97,522			237,465		(22,397	)		344,746
Deferred income taxes		—		26,617		—			21,159		(21,408	)		26,368
Prepaid expenses and other current assets		2,277		4,463		5,085			14,546		—			26,371
Intercompany balances		—		40,248		45,565			32,506		(118,319	)		—
Total current assets		2,621		188,856		251,155			625,478		(162,241	)		905,869
Fixed assets, net		18,802		39,175		25,321			155,015		—			238,313
Intangible assets, net		3,228		45,547		2,199			88,475		—			139,449
Goodwill		—		103,880		8,336			160,951		—			273,167
Other assets		2,753		2,083		594			42,359		—			47,789
Deferred income taxes long-term		20,387		—		—			138,502		(45,236	)		113,653
Investment in subsidiaries		1,087,924		159,273		—			—		(1,247,197	)		—
Total assets	$	1,135,715	$	538,814	$	287,605		$	1,210,780	$	(1,454,674	)	$	1,718,240
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit		—		—		—			18,147		—			18,147
Accounts payable		6,995		39,542		55,813			101,222		—			203,572
Accrued liabilities		6,189		15,699		12,644			80,359		—			114,891
Current portion of long-term debt		—		8,594		—			10,053		—			18,647
Income taxes payable		—		—		—			1,476		(117	)		1,359
Deferred income taxes		20,902		—		506			—		(21,408	)		—
Intercompany balances		118,319		—		—			—		(118,319	)		—
Total current liabilities		152,405		63,835		68,963			211,257		(139,844	)		356,616
Long-term debt		400,000		60,700		—			260,475		—			721,175
Deferred income taxes long-term		—		42,951		2,285			—		(45,236	)		—
Other long-term liabilities		—		5,413		9,048			23,752		—			38,213
Total liabilities		552,405		172,899		80,296			495,484		(185,080	)		1,116,004
Stockholders’/invested equity:		583,310		365,915		207,309			696,370		(1,269,594	)		583,310
Non-controlling interest		—		—		—			18,926		—			18,926
Total liabilities and equity	$	1,135,715	$	538,814	$	287,605		$	1,210,780	$	(1,454,674	)	$	1,718,240

Condensed Consolidating Statement of Cash Flows

First Half Ended April 30, 2013

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(63,524	)	$	(174	)	$	(17,185	)	$	712		$	17,329		$	(62,842	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and Amortization		1,124			5,921			3,093			14,889			—			25,027
Stock based compensation		11,223			—			—			—			—			11,223
Provision for doubtful accounts		—			325			(1,381	)		4,584			—			3,528
Asset impairments		—			1,646			4,677			2,177			—			8,500
Equity in earnings		20,941			(687	)		—			1,058			(20,254	)		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		—			(2,670	)		57,909			1,346			—			56,585
Inventories		—			(18,169	)		(9,045	)		2,186			2,925			(22,103	)
Other operating assets and liabilities		(582	)		4,377			(24,793	)		(20,126	)		—			(41,124	)
Net cash (used in)/provided by operating activities		(29,907	)		(8,756	)		13,258			7,011			—			(18,394	)
Cash flows from investing activities:
Capital expenditures		(3,971	)		(3,562	)		(4,039	)		(17,072	)		—			(28,644	)
Net cash used in investing activities		(3,971	)		(3,562	)		(4,039	)		(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		29,830			(262	)		(8,880	)		(20,688	)		—			—
Net cash provided by/(used in) financing activities		33,662			12,538			(8,880	)		21,241			—			58,561
Effect of exchange rate changes on cash		—			—			—			(5,453	)		—			(5,453	)
Net (decrease)/increase in cash and cash equivalents		(216	)		220			339			5,727			—			6,070
Cash and cash equivalents, beginning of period		324			1,966			(1,831	)		41,364			—			41,823
Cash and cash equivalents, end of period	$	108		$	2,186		$	(1,492	)	$	47,091		$	—		$	47,893

Condensed Consolidating Statement of Cash Flows

First Half Ended April 30, 2012

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(27,725	)	$	8,248		$	(3,730	)	$	31,220		$	(33,330	)	$	(25,317	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and Amortization		1,138			5,722			3,360			16,905			—			27,125
Stock based compensation		12,400			—			—			—			—			12,400
Provision for doubtful accounts		—			(661	)		(755	)		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	)		7			5			(586	)		—			(712	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			(4,562	)		30,457			(8,184	)		—			17,711
Inventories		—			22,831			(56,531	)		(3,695	)		18,873			(18,522	)
Other operating assets and liabilities		(4,781	)		(11,202	)		2,513			(29,491	)		—			(42,961	)
Net cash (used in)/provided by operating activities		(34,564	)		23,004			(24,266	)		18,144			—			(17,682	)
Cash flows from investing activities:
Capital expenditures		(1,559	)		(9,084	)		(5,010	)		(18,676	)		—			(34,329	)
Business acquisitions, net of cash acquired		—			—			—			(9,117	)		—			(9,117	)
Net cash used in investing activities		(1,559	)		(9,084	)		(5,010	)		(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		35,350			(42,151	)		30,865			(24,064	)		—			—
Net cash provided by/(used in) financing activities		36,129			(14,907	)		30,865			(10,549	)		—			41,538
Effect of exchange rate changes on cash		—			—			—			(10,986	)		—			(10,986	)
Net increase/(decrease) in cash and cash equivalents		6			(987	)		1,589			(31,184	)		—			(30,576	)
Cash and cash equivalents, beginning of period		17			4,972			(3,641	)		108,405			—			109,753
Cash and cash equivalents, end of period	$	23		$	3,985		$	(2,052	)	$	77,221		$	—		$	79,177

Note 19—Condensed Consolidating Financial Information

Obligations under Quiksilver, Inc.’s and QS Wholesale, Inc.’s senior notes issued on July 16, 2013 (see Note 20—Subsequent Events) are fully and unconditionally guaranteed by certain of the Company’s existing 100% owned domestic subsidiaries. As a result of the subsequent registration of these notes, the Company is required to present condensed consolidating financial information for Quiksilver, Inc., QS Wholesale, Inc., and the Company’s subsidiaries within the notes to the consolidated financial statements in accordance with the criteria established for parent companies in the SEC’s Regulation S-X, Rule 3-10(f).

The following condensed consolidating financial information presents the results of operations, financial position and cash flows of Quiksilver, Inc., QS Wholesale, Inc., Quiksilver, Inc’s 100% owned guarantor subsidiaries, its non-guarantor subsidiaries and the eliminations necessary to arrive at the information for the Company on a consolidated basis as of October 31, 2012 and 2011 and for each of fiscal 2012, 2011 and 2010. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.

Condensed Consolidating Statement of Operations

Year Ended October 31, 2012

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	469		$	453,532		$	573,826		$	1,262,757		$	(277,345	)	$	2,013,239
Cost of goods sold		—			275,179			373,016			602,115			(217,417	)		1,032,893
Gross profit		469			178,353			200,810			660,642			(59,928	)		980,346
Selling, general and administrative expense		56,983			147,684			164,202			577,868			(30,593	)		916,144
Asset impairments		—			11			5,151			2,072			—			7,234
Operating (loss)/income		(56,514	)		30,658			31,457			80,702			(29,335	)		56,968
Interest expense, net		28,987			5,352			(1	)		26,485			—			60,823
Foreign currency (gain)/loss		(173	)		(148	)		113			(1,461	)		—			(1,669	)
Equity in earnings		(74,572	)		4,674			—			—			69,898			—
(Loss)/income before provision for income taxes		(10,756	)		20,780			31,345			55,678			(99,233	)		(2,186	)
Provision for income taxes		—			1,144			—			6,413			—			7,557
Net (loss)/income		(10,756	)		19,636			31,345			49,265			(99,233	)		(9,743	)
Less: Net income attributable to non-controlling interest		—			—			—			(1,013	)		—			(1,013	)
Net (loss)/income attributable to Quiksilver, Inc		(10,756	)		19,636			31,345			48,252			(99,233	)		(10,756	)
Other comprehensive loss		(29,715	)		—			—			(29,715	)		29,715			(29,715	)
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$	(40,471	)	$	19,636		$	31,345		$	18,537		$	(69,518	)	$	(40,471	)

Condensed Consolidating Statement of Operations

Year Ended October 31, 2011

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	464		$	440,088		$	479,559		$	1,270,320		$	(237,370	)	$	1,953,061
Cost of goods sold		—			268,361			291,972			554,593			(185,699	)		929,227
Gross profit		464			171,727			187,587			715,727			(51,671	)		1,023,834
Selling, general and administrative expense		43,045			139,530			172,310			566,703			(25,639	)		895,949
Asset impairments		—			1,778			1,621			82,974			—			86,373
Operating (loss)/income		(42,581	)		30,419			13,656			66,050			(26,032	)		41,512
Interest expense, net		28,871			3,795			(10	)		41,152			—			73,808
Foreign currency loss/(gain)		30			(229	)		189			(101	)		—			(111	)
Equity in earnings		(50,224	)		(836	)		—			—			51,060			—
(Loss)/income before provision/(benefit) for income taxes		(21,258	)		27,689			13,477			24,999			(77,092	)		(32,185	)
Provision/(benefit) for income taxes		—			165			—			(14,480	)		—			(14,315	)
Net (loss)/income		(21,258	)		27,524			13,477			39,479			(77,092	)		(17,870	)
Less: Net income attributable to non-controlling interest		—			—			—			(3,388	)		—			(3,388	)
Net (loss)/income attributable to Quiksilver, Inc		(21,258	)		27,524			13,477			36,091			(77,092	)		(21,258	)
Other comprehensive income		2,445			—			—			2,445			(2,445	)		2,445
Comprehensive (loss)/income attributable to Quiksilver, Inc.	$	(18,813	)	$	27,524		$	13,477		$	38,536		$	(79,537	)	$	(18,813	)

Condensed Consolidating Statement of Operations

Year Ended October 31, 2010

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	376		$	418,623		$	421,759		$	1,195,536		$	(198,674	)	$	1,837,620
Cost of goods sold		—			261,491			240,660			511,777			(143,556	)		870,372
Gross profit		376			157,132			181,099			683,759			(55,118	)		967,248
Selling, general and administrative expense		36,867			133,730			149,617			537,153			(29,817	)		832,066
Asset impairments		—			667			6,918			4,072			—			11,657
Operating (loss)/income		(36,491	)		22,735			24,564			142,534			(29,817	)		123,525
Interest expense, net		28,721			55,070			—			30,318			—			114,109
Foreign currency gain		(285	)		(113	)		(11	)		(5,508	)		—			(5,917	)
Equity in earnings and other (income)/expense		(50,399	)		(1,482	)		—			—			51,881			—
(Loss)/income before (benefit)/provision for income taxes		(14,528	)		(30,740	)		24,575			117,724			(81,698	)		15,333
(Benefit)/provision for income taxes		(4,844	)		522			—			27,755			—			23,433
(Loss)/income from continuing operations		(9,684	)		(31,262	)		24,575			89,969			(81,698	)		(8,100	)
Income from discontinued operations		—			—			1,485			345			—			1,830
Net (loss)/income		(9,684	)		(31,262	)		26,060			90,314			(81,698	)		(6,270	)
Less: Net income attributable to non-controlling interest		—			—			—			(3,414	)		—			(3,414	)
Net (loss) income attributable to Quiksilver, Inc		(9,684	)		(31,262	)		26,060			86,900			(81,698	)		(9,684	)
Other comprehensive income		18,286			—			—			18,286			(18,286	)		18,286
Comprehensive income/(loss) attributable to Quiksilver, Inc.	$	8,602		$	(31,262	)	$	26,060		$	105,186		$	(99,984	)	$	8,602

Condensed Consolidating Balance Sheet

October 31, 2012

In thousands	Quiksilver, Inc.		QS Wholesale, Inc.		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	324	$	1,966	$	(1,831	)	$	41,364	$	—		$	41,823
Trade accounts receivable, net		—		80,522		101,423			251,798		—			433,743
Other receivables		20		2,767		3,391			26,640		—			32,818
Income taxes receivable		—		117		—			—		(117	)		—
Inventories		—		32,156		97,522			237,465		(22,397	)		344,746
Deferred income taxes		—		26,617		—			21,159		(21,408	)		26,368
Prepaid expenses and other current assets		2,277		4,463		5,085			14,546		—			26,371
Intercompany balances				40,248		45,565			32,506		(118,319	)		—
Total current assets		2,621		188,856		251,155			625,478		(162,241	)		905,869
Fixed assets, net		18,802		39,175		25,321			155,015		—			238,313
Intangible assets, net		3,228		45,547		2,199			88,475		—			139,449
Goodwill		—		103,880		8,336			160,951		—			273,167
Other assets		2,753		2,083		594			42,359		—			47,789
Deferred income taxes long-term		20,387		—		—			138,502		(45,236	)		113,653
Investment in subsidiaries		1,087,924		159,273					—		(1,247,197	)		—
Total assets	$	1,135,715	$	538,814	$	287,605		$	1,210,780	$	(1,454,674	)	$	1,718,240
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit		—		—		—			18,147		—			18,147
Accounts payable		6,995		39,542		55,813			101,222		—			203,572
Accrued liabilities		6,189		15,699		12,644			80,359		—			114,891
Current portion of long-term debt		—		8,594		—			10,053		—			18,647
Income taxes payable				—		—			1,476		(117	)		1,359
Deferred income taxes		20,902		—		506			—		(21,408	)		0
Intercompany balances		118,319		—		—			—		(118,319	)		—
Total current liabilities		152,405		63,835		68,963			211,257		(139,844	)		356,616
Long-term debt		400,000		60,700		—			260,475		—			721,175
Deferred income taxes long-term		—		42,951		2,285			—		(45,236	)		0
Other long-term liabilities		—		5,413		9,048			23,752		—			38,213
Total liabilities		552,405		172,899		80,296			495,484		(185,080	)		1,116,004
Stockholders’/invested equity:		583,310		365,915		207,309			696,370		(1,269,594	)		583,310
Non-controlling interest		—		—		—			18,926		—			18,926
Total liabilities and equity	$	1,135,715	$	538,814	$	287,605		$	1,210,780	$	(1,454,674	)	$	1,718,240

Condensed Consolidating Balance Sheet

October 31, 2011

In thousands	Quiksilver, Inc.		QS Wholesale, Inc.		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	17	$	4,972	$	(3,641	)	$	108,405	$	—		$	109,753
Trade accounts receivable, net		—		72,533		78,249			246,307		—			397,089
Other receivables		122		3,024		2,894			17,150		—			23,190
Income taxes receivable		—		390		—			3,875		—			4,265
Inventories		—		57,862		74,754			234,266		(19,125	)		347,757
Deferred income taxes		—		15,111		—			33,990		(16,293	)		32,808
Prepaid expenses and other current assets		2,378		3,507		5,018			14,526		—			25,429
Intercompany balances		—		—		67,075			65,631		(132,706	)		—
Total current assets		2,517		157,399		224,349			724,150		(168,124	)		940,291
Fixed assets, net		17,602		36,493		28,450			155,562		—			238,107
Intangible assets, net		3,007		46,510		2,233			86,393		—			138,143
Goodwill		—		103,880		8,336			156,373		—			268,589
Other assets		4,457		3,377		559			47,421		—			55,814
Deferred income taxes long-term		11,531		—		1,577			141,554		(31,383	)		123,279
Investment in subsidiaries		1,084,745		163,174		—			—		(1,247,919	)		—
Total assets	$	1,123,859	$	510,833	$	265,504		$	1,311,453	$	(1,447,426	)	$	1,764,223
LIABILITIES AND EQUITY
Current liabilities:
Lines of credit		—		—		—			18,335		—			18,335
Accounts payable		2,510		50,858		37,422			112,233		—			203,023
Accrued liabilities		6,673		12,666		17,422			96,183		—			132,944
Current portion of long-term debt		—		3,000		—			1,628		—			4,628
Income taxes payable		—		—		—			—		—			—
Deferred income taxes		11,998		—		4,295			—		(16,293	)		0
Intercompany balances		92,580		40,126		—			—		(132,706	)		—
Total current liabilities		113,761		106,650		59,139			228,379		(148,999	)		358,930
Long-term debt		400,000		36,542		—			288,181		—			724,723
Deferred income taxes long-term		—		31,383		—			—		(31,383	)		0
Other long-term liabilities		—		6,546		4,937			46,465		—			57,948
Total liabilities		513,761		181,121		64,076			563,025		(180,882	)		1,141,601
Stockholders’/invested equity:		610,098		329,712		201,428			735,904		(1,267,044	)		610,098
Non-controlling interest		—		—		—			12,524		—			12,524
Total liabilities and equity	$	1,123,859	$	510,833	$	265,504		$	1,311,453	$	(1,447,426	)	$	1,764,223

Condensed Consolidating Statement of Cash Flows

Year Ended October 31, 2012

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(10,756	)	$	19,636		$	31,345		$	49,265		$	(99,233	)	$	(9,743	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and Amortization		2,088			11,314			6,688			33,142			—			53,232
Stock based compensation		22,552						—			—			—			22,552
Provision for doubtful accounts		—			(763	)		(879	)		6,236			—			4,594
Asset impairments		—			11			5,151			2,072			—			7,234
Equity in earnings		(74,572	)		4,674						282			69,898			282
Non-cash interest expense		1,490			1,506			—			689			—			3,685
Deferred income taxes		—			62			412			(9,056	)		—			(8,582	)
Other adjustments to reconcile net (loss)/income		(443	)		(94	)		130			(6,092	)		—			(6,499	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			(7,227	)		(22,294	)		(23,884	)		—			(53,405	)
Inventories		—			23,444			(46,078	)		(11,679	)		29,335			(4,978	)
Other operating assets and liabilities		5,918			(9,589	)		16,159			(34,399	)		—			(21,911	)
Net cash (used in)/provided by operating activities		(53,723	)		42,974			(9,366	)		6,576			—			(13,539	)
Cash flows from investing activities:
Proceeds from the sale of properties and equipment		—			43			2			8,153			—			8,198
Capital expenditures		(4,388	)		(13,744	)		(8,836	)		(39,113	)		—			(66,081	)
Business acquisitions, net of cash acquired		—			—			—			(9,117	)		—			(9,117	)
Net cash used in investing activities		(4,388	)		(13,701	)		(8,834	)		(40,077	)		—			(67,000	)
Cash flows from financing activities:
Borrowings on lines of credit		—			—			—			15,139			—			15,139
Payments on lines of credit		—			—			—			(12,641	)		—			(12,641	)
Borrowings on long-term debt		—			93,500			—			46,535			—			140,035
Payments on long-term debt		—			(70,800	)		—			(42,041	)		—			(112,841	)
Stock option exercises and employee stock purchases		2,241			—			—			—			—			2,241
Transactions with non-controlling interest owners		—			(11,000	)		—			—			—			(11,000	)
Intercompany		56,177			(43,979	)		20,010			(32,208	)		—			—
Net cash provided by/(used in) financing activities		58,418			(32,279	)		20,010			(25,216	)		—			20,933
Effect of exchange rate changes on cash		—			—			—			(8,324	)		—			(8,324	)
Net increase/(decrease) in cash and cash equivalents		307			(3,006	)		1,810			(67,041	)		—			(67,930	)
Cash and cash equivalents, beginning of period		17			4,972			(3,641	)		108,405			—			109,753
Cash and cash equivalents, end of period	$	324		$	1,966		$	(1,831	)	$	41,364		$	—		$	41,823

Condensed Consolidating Statement of Cash Flows

Year Ended October 31, 2011

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(21,258	)	$	27,524		$	13,477		$	39,479		$	(77,092	)	$	(17,870	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Depreciation and Amortization		1,735			13,191			7,254			33,079			—			55,259
Stock based compensation		14,414			—			—			—			—			14,414
Provision for doubtful accounts		—			225			1,138			7,369			—			8,732
Asset impairments		—			1,778			1,621			82,974			—			86,373
Equity in earnings		(50,224	)		(994	)		—			(197	)		51,060			(355	)
Non-cash interest expense		1,387			1,808			—			15,917			—			19,112
Deferred income taxes		—			93			3,610			(31,951	)		—			(28,248	)
Other adjustments to reconcile net (loss)/income		72			351			130			(6,219	)		—			(5,666	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			(8,811	)		(13,295	)		(11,879	)		—			(33,985	)
Inventories		—			(49,448	)		3,429			(50,719	)		26,032			(70,706	)
Other operating assets and liabilities		(17,134	)		5,146			8,803			30,274			—			27,089
Net cash (used in)/provided by operating activities		(71,008	)		(9,137	)		26,167			108,127			—			54,149
Cash flows from investing activities:
Proceeds from the sale of properties and equipment		—			5			10			12,531			—			12,546
Capital expenditures		(12,570	)		(21,726	)		(12,898	)		(42,396	)		—			(89,590	)
Business acquisitions, net of cash acquired		—			—			(528	)		(5,050	)		—			(5,578	)
Net cash used in investing activities		(12,570	)		(21,721	)		(13,416	)		(34,915	)		—			(82,622	)
Cash flows from financing activities:
Borrowings on lines of credit		—			—			—			30,070			—			30,070
Payments on lines of credit		—			—			—			(35,303	)		—			(35,303	)
Borrowings on long-term debt		—			44,500			—			270,830			—			315,330
Payments on long-term debt		—			(25,524	)		—			(259,152	)		—			(284,676	)
Payments of debt issuance costs		—			—			—			(6,391	)		—			(6,391	)
Stock option exercises and employee stock purchases		4,129			—			—			—			—			4,129
Intercompany		79,302			(21,853	)		(16,857	)		(40,592	)		—			—
Net cash provided by/(used in) financing activities		83,431			(2,877	)		(16,857	)		(40,538	)		—			23,159
Effect of exchange rate changes on cash		—			—			—			(5,526	)		—			(5,526	)
Net (decrease)/increase in cash and cash equivalents		(147	)		(33,735	)		(4,106	)		27,148			—			(10,840	)
Cash and cash equivalents, beginning of period		164			38,707			465			81,257			—			120,593
Cash and cash equivalents, end of period	$	17		$	4,972		$	(3,641	)	$	108,405		$	—		$	109,753

Condensed Consolidating Statement of Cash Flows

Year Ended October 31, 2010

In thousands	Quiksilver, Inc.			QS Wholesale, Inc.			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net (loss)/income	$	(9,684	)	$	(31,262	)	$	26,060		$	90,314		$	(81,698	)	$	(6,270	)
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:
Income from discontinued operations		—			—			(1,485	)		(345	)		—			(1,830	)
Depreciation and Amortization		1,519			12,134			9,360			30,848			—			53,861
Stock based compensation		12,831			—			—			—			—			12,831
Provision for doubtful accounts		—			2,982			1,378			10,947			—			15,307
Equity in earnings		(50,399	)		(1,482	)		—			(524	)		51,881			(524	)
Asset impairments		—			667			6,918			4,072			—			11,657
Non-Cash interest expense		1,292			42,740			—			12,663			—			56,695
Deferred taxes		—			(2,203	)		(3,449	)		13,681			—			8,029
Other adjustments to reconcile net (loss)/income		(195	)		(1,225	)		(230	)		(1,892	)		—			(3,542	)
Changes in operating assets and liabilities:
Trade accounts receivable		—			10,464			5,271			24,111			—			39,846
Inventories		—			(27,021	)		(6,258	)		7,967			29,817			4,505
Other operating assets and liabilities		8,350			7,975			8,368			(15,561	)		—			9,132
Cash (used in)/provided by operating activities of continuing operations		(36,286	)		13,769			45,933			176,281			—			199,697
Cash provided by operating activities of discontinued operations		—			—			1,507			2,278			—			3,785
Net cash (used in)/provided by operating activities		(36,286	)		13,769			47,440			178,559			—			203,482
Cash flows from investing activities:
Proceeds from the sale of properties and equipment		34			4,500			19			109			—			4,662
Capital expenditures		(4,194	)		(6,901	)		(3,829	)		(32,873	)		—			(47,797	)
Changes in restricted cash		—			—			—			52,706			—			52,706
Net cash (used in)/provided by investing activities		(4,160	)		(2,401	)		(3,810	)		19,942			—			9,571
Cash flows from financing activities:
Borrowings on lines of credit		—			—			—			16,581			—			16,581
Payments on lines of credit		—			—			—			(27,021	)		—			(27,021	)
Borrowings on long-term debt		—			42,735			—			16,618			—			59,353
Payments on long-term debt		—			(51,489	)		—			(169,077	)		—			(220,566	)
Payments of debt and equity issuance costs		(7,750	)		—			—			(1,823	)		—			(9,573	)
Proceeds from stock option exercises		3,639			—			—			—			—			3,639
Transactions with non-controlling interest owners		—			(1,542	)		—			(3,632	)		—			(5,174	)
Intercompany		44,400			36,553			(43,218	)		(37,735	)		—			—
Net cash provided by/(used in) financing activities		40,289			26,257			(43,218	)		(206,089	)		—			(182,761	)
Effect of exchange rate changes on cash		—			—			—			(9,215	)		—			(9,215	)
Net (decrease)/increase in cash and cash equivalents		(157	)		37,625			412			(16,803	)		—			21,077
Cash and cash equivalents, beginning of period		321			1,082			53			98,060			—			99,516
Cash and cash equivalents, end of period	$	164		$	38,707		$	465		$	81,257		$	—		$	120,593

Note 20