The following condensed consolidating balance sheets, statements of operations, statements of consolidated comprehensive income and statements of cash flows for the "Issuers" (consisting of Jones and Jones USA, Jones Holdings, JAG Footwear, which are all our subsidiaries that act as co-issuers and co-obligors) and the "Others" (consisting of all of our other subsidiaries, excluding all obligor subsidiaries) have been prepared using the equity method of accounting in accordance with the requirements for presentation of such information. Separate financial statements and other disclosures concerning Jones are not presented as Jones has no independent operations or assets. There are no contractual restrictions on distributions from Jones USA, Jones Holdings or JAG Footwear to Jones.

Condensed Consolidating Balance Sheets

(In millions)

	September 29, 2012											December 31, 2011
	Issuers			Others		Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
ASSETS
Current assets:
Cash and cash equivalents	$	187.2		$	46.9	$	-		$	234.1		$	195.8		$	43.0		$	-		$	238.8
Accounts receivable		289.7			196.5		-			486.2			182.9			156.7			-			339.6
Inventories		283.2			241.9		(1.4	)		523.7			270.5			220.9			(0.3	)		491.1
Prepaid and refundable income taxes		18.0			3.9		(19.7	)		2.2			5.3			4.9			1.7			11.9
Deferred taxes		18.0			14.5		-			32.5			13.2			13.2			-			26.4
Prepaid expenses and other current assets		23.6			20.1		(1.3	)		42.4			21.5			26.2			-			47.7
Total current assets		819.7			523.8		(22.4	)		1,321.1			689.2			464.9			1.4			1,155.5
Property, plant and equipment		63.7			212.5		-			276.2			64.9			206.5			-			271.4
Due from affiliates		-			288.8		(288.8	)		-			-			1,604.4			(1,604.4	)		-
Goodwill		49.4			213.1		-			262.5			46.7			208.6			-			255.3
Other intangibles		6.2			895.3		-			901.5			6.9			890.5			-			897.4
Deferred taxes		93.2			-		(93.2	)		-			80.6			-			(80.6	)		-
Investments in subsidiaries		1,761.8			38.4		(1,761.8	)		38.4			3,047.9			35.6			(3,047.9	)		35.6
Other assets		70.1			29.7		-			99.8			79.3			20.8			-			100.1
Total assets	$	2,864.1		$	2,201.6	$	(2,166.2	)	$	2,899.5		$	4,015.5		$	3,431.3		$	(4,731.5	)	$	2,715.3
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	-		$	2.1	$	-		$	2.1		$	-		$	2.0		$	-		$	2.0
Current portion of acquisition consideration payable		230.2			-		-			230.2			192.7			1.4			-			194.1
Accounts payable		151.8			100.4		-			252.2			139.7			96.5			-			236.2
Income taxes payable		10.0			47.5		(40.0	)		17.5			11.2			8.3			(18.1	)		1.4
Accrued expenses and other current liabilities		74.6			78.7		(1.3	)		152.0			79.0			67.3			-			146.3
Total current liabilities		466.6			228.7		(41.3	)		654.0			422.6			175.5			(18.1	)		580.0
Long-term debt		936.3			-		-			936.3			831.3			0.1			-			831.4
Obligations under capital leases		-			21.8		-			21.8			-			23.3			-			23.3
Deferred taxes		-			165.7		(99.2	)		66.5			-			160.0			(86.6	)		73.4
Income taxes payable		0.3			-		-			0.3			6.7			-			-			6.7
Acquisition consideration payable		5.0			-		-			5.0			17.7			-			-			17.7
Due to affiliates		288.8			-		(288.8	)		-			1,604.4			-			(1,604.4	)		-
Other		93.9			23.5		-			117.4			67.7			25.7			-			93.4
Total liabilities		1,790.9			439.7		(429.3	)		1,801.3			2,950.4			384.6			(1,709.1	)		1,625.9
Redeemable noncontrolling interest		-			0.6		-			0.6			-			-			-			-
Equity:
Common stock and additional paid-in capital		523.0			948.1		(948.1	)		523.0			522.6			2,352.4			(2,352.4	)		522.6
Retained earnings		567.1			808.5		(785.1	)		590.5			572.1			704.3			(680.2	)		596.2
Accumulated other comprehensive (loss) income		(16.9	)		3.7		(3.7	)		(16.9	)		(29.6	)		(10.2	)		10.2			(29.6	)
Total Jones stockholders' equity		1,073.2			1,760.3		(1,736.9	)		1,096.6			1,065.1			3,046.5			(3,022.4	)		1,089.2
Noncontrolling interests		-			1.0		-			1.0			-			0.2			-			0.2
Total equity		1,073.2			1,761.3		(1,736.9	)		1,097.6			1,065.1			3,046.7			(3,022.4	)		1,089.4
Total liabilities and equity	$	2,864.1		$	2,201.6	$	(2,166.2	)	$	2,899.5		$	4,015.5		$	3,431.3		$	(4,731.5	)	$	2,715.3

Condensed Consolidating Statements of Operations

(In millions)

	Fiscal Quarter Ended September 29, 2012										Fiscal Quarter Ended October 1, 2011
	Issuers			Others		Elim- inations			Cons- olidated		Issuers			Others		Elim- inations			Cons- olidated
Net sales	$	633.2		$	399.1	$	(7.7	)	$	1,024.6	$	665.0		$	371.1	$	(6.0	)	$	1,030.1
Licensing income		-			10.5		-			10.5		-			12.7		-			12.7
Other revenues		0.3			-		-			0.3		0.2			-		-			0.2
Total revenues		633.5			409.6		(7.7	)		1,035.4		665.2			383.8		(6.0	)		1,043.0
Cost of goods sold		430.3			246.1		(5.6	)		670.8		443.9			230.3		(3.1	)		671.1
Gross profit		203.2			163.5		(2.1	)		364.6		221.3			153.5		(2.9	)		371.9
Selling, general and administrative expenses		214.2			89.8		(2.1	)		301.9		227.2			86.9		(2.6	)		311.5
Operating (loss) income		(11.0	)		73.7		-			62.7		(5.9	)		66.6		(0.3	)		60.4
Net interest expense and financing costs		36.3			1.4		-			37.7		0.7			-		-			0.7
Equity in income of unconsolidated affiliate		-			-		-			-		-			0.5		-			0.5
(Loss) income before (benefit) provision for income taxes and equity in earnings of subsidiaries		(47.3	)		72.3		-			25.0		(6.6	)		67.1		(0.3	)		60.2
(Benefit) provision for income taxes		(10.3	)		17.5		-			7.2		3.6			33.9		(18.5	)		19.0
Equity in earnings of subsidiaries		54.3			-		(54.3	)		-		33.1			-		(33.1	)		-
Net income		17.3			54.8		(54.3	)		17.8		22.9			33.2		(14.9	)		41.2
Less: income attributable to noncontrolling interest		-			0.4		-			0.4		-			0.2		-			0.2
Income attributable to Jones	$	17.3		$	54.4	$	(54.3	)	$	17.4	$	22.9		$	33.0	$	(14.9	)	$	41.0

	Fiscal Nine Months Ended September 29, 2012										Fiscal Nine Months Ended October 1, 2011
	Issuers			Others		Elim- inations			Cons- olidated		Issuers			Others			Elim- inations			Cons- olidated
Net sales	$	1,720.4		$	1,092.4	$	(20.5	)	$	2,792.3	$	1,840.0		$	1,031.4		$	(15.5	)	$	2,855.9
Licensing income		-			33.0		-			33.0		0.1			35.0			-			35.1
Other revenues		0.9			-		-			0.9		0.7			-			-			0.7
Total revenues		1,721.3			1,125.4		(20.5	)		2,826.2		1,840.8			1,066.4			(15.5	)		2,891.7
Cost of goods sold		1,141.5			663.6		(13.1	)		1,792.0		1,208.5			664.4			(6.8	)		1,866.1
Gross profit		579.8			461.8		(7.4	)		1,034.2		632.3			402.0			(8.7	)		1,025.6
Selling, general and administrative expenses		637.0			278.9		(6.3	)		909.6		675.1			192.3			(8.2	)		859.2
Operating (loss) income		(57.2	)		182.9		(1.1	)		124.6		(42.8	)		209.7			(0.5	)		166.4
Net interest expense (income) and financing costs		88.7			0.5		-			89.2		61.3			(2.5	)		-			58.8
Equity in income of unconsolidated affiliate		-			1.4		-			1.4		-			2.6			-			2.6
(Loss) income before (benefit) provision for income taxes and equity in earnings of subsidiaries		(145.9	)		183.8		(1.1	)		36.8		(104.1	)		214.8			(0.5	)		110.2
(Benefit) provision for income taxes		(38.4	)		50.4		(0.4	)		11.6		(19.8	)		76.1			(18.5	)		37.8
Equity in earnings of subsidiaries		132.6			-		(132.6	)		-		138.1			-			(138.1	)		-
Net income		25.1			133.4		(133.3	)		25.2		53.8			138.7			(120.1	)		72.4
Less: income attributable to noncontrolling interest		-			0.9		-			0.9		-			0.6			-			0.6
Income attributable to Jones	$	25.1		$	132.5	$	(133.3	)	$	24.3	$	53.8		$	138.1		$	(120.1	)	$	71.8

Condensed Consolidating Statements of Other Comprehensive Income

(In millions)

	Fiscal Quarter Ended September 29, 2012												Fiscal Quarter Ended October 1, 2011
	Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
Net income	$	17.3		$	54.8		$	(54.3	)	$	17.8		$	22.9		$	33.2		$	(14.9	)	$	41.2
Other comprehensive income (loss):
Change in fair value of cash flow hedges, net of tax		(0.3	)		(0.3	)		0.3			(0.3	)		0.2			0.2			(0.2	)		0.2
Reclassification adjustment for hedge gains and losses included in net income, net of tax		-			-			-			-			0.2			0.2			(0.2	)		0.2
Foreign currency translation adjustments		11.6			11.4			(11.4	)		11.6			(12.3	)		(12.3	)		12.3			(12.3	)
Total other comprehensive income (loss)		11.3			11.1			(11.1	)		11.3			(11.9	)		(11.9	)		11.9			(11.9	)
Comprehensive income	$	28.6		$	65.9		$	(65.4	)	$	29.1		$	11.0		$	21.3		$	(3.0	)	$	29.3

	Fiscal Nine Months Ended September 29, 2012												Fiscal Nine Months Ended October 1, 2011
	Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
Net income	$	25.1		$	133.4		$	(133.3	)	$	25.2		$	53.8		$	138.7		$	(120.1	)	$	72.4
Other comprehensive income (loss):
Change in fair value of cash flow hedges, net of tax		(0.1	)		(0.1	)		0.1			(0.1	)		(0.2	)		(0.2	)		0.2			(0.2	)
Reclassification adjustment for hedge gains and losses included in net income, net of tax		0.1			0.1			(0.1	)		0.1			0.6			0.6			(0.6	)		0.6
Foreign currency translation adjustments		12.7			12.5			(12.5	)		12.7			(13.8	)		(13.8	)		13.8			(13.8	)
Total other comprehensive income (loss)		12.7			12.5			(12.5	)		12.7			(13.4	)		(13.4	)		13.4			(13.4	)
Comprehensive income	$	37.8		$	145.9		$	(145.8	)	$	37.9		$	40.4		$	125.3		$	(106.7	)	$	59.0

Condensed Consolidating Statements of Cash Flows

(In millions)

	Fiscal Nine Months Ended September 29, 2012												Fiscal Nine Months Ended October 1, 2011
	Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
Net cash (used in) provided by operating activities	$	(46.5	)	$	72.2		$	(12.6	)	$	13.1		$	(31.1	)	$	53.7		$	(16.2	)	$	6.4
Cash flows from investing activities:
Capital expenditures		(14.6	)		(42.5	)		-			(57.1	)		(32.7	)		(40.0	)		-			(72.7	)
Acquisition of Brian Atwood, net of cash acquired		(5.0	)		0.6			-			(4.4	)		-			-			-			-
Contingent consideration paid related to investment in GRI		-			(3.5	)		-			(3.5	)		-			-			-			-
Acquisition of KG Group Holdings Limited, net of cash acquired		-			-			-			-			(150.0	)		6.9			-			(143.1	)
Payments related to acquisition of Moda Nicola International, LLC		-			-			-			-			(2.5	)		-			-			(2.5	)
Proceeds from sale of trademark		-			5.0			-			5.0			-			-			-			-
Other		-			(0.1	)		-			(0.1	)		-			0.1			-			0.1
Net cash used in investing activities		(19.6	)		(40.5	)		-			(60.1	)		(185.2	)		(33.0	)		-			(218.2	)
Cash flows from financing activities:
Issuance of 6.875% Senior Notes due 2019		103.5			-			-			103.5			300.0			-			-			300.0
Debt issuance costs		(2.3	)		-			-			(2.3	)		(6.6	)		-			-			(6.6	)
Costs related to revolving credit agreement		(0.3	)		-			-			(0.3	)		(3.0	)		-			-			(3.0	)
Net increase in short-term borrowings		-			-			-			-			55.0			-			-			55.0
Repayment of acquired debt of KG Group Holdings Limited		-			-			-			-			(174.1	)		-			-			(174.1	)
Dividends paid		(11.7	)		(12.6	)		12.6			(11.7	)		(12.7	)		(16.2	)		16.2			(12.7	)
Repurchase of common shares		(34.0	)		-			-			(34.0	)		(78.0	)		-			-			(78.0	)
Payments of acquisition consideration payable		-			(14.6	)		-			(14.6	)		-			(8.2	)		-			(8.2	)
Other items, net		2.3			(2.1	)		-			0.2			1.7			(1.9	)		-			(0.2	)
Net cash provided by (used in) financing activities		57.5			(29.3	)		12.6			40.8			82.3			(26.3	)		16.2			72.2
Effect of exchange rates on cash		-			1.5			-			1.5			-			-			-			-
Net (decrease) increase in cash and cash equivalents		(8.6	)		3.9			-			(4.7	)		(134.0	)		(5.6	)		-			(139.6	)
Cash and cash equivalents, beginning		195.8			43.0			-			238.8			163.0			37.8			-			200.8
Cash and cash equivalents, ending	$	187.2		$	46.9		$	-		$	234.1		$	29.0		$	32.2		$	-		$	61.2