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)

	July 6, 2013												December 31, 2012
	Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others		Elim- inations			Cons- olidated
ASSETS
Current assets:
Cash and cash equivalents	$	39.9		$	41.1		$	-		$	81.0		$	82.6		$	67.0	$	-		$	149.6
Accounts receivable		155.1			157.2			-			312.3			191.0			190.0		-			381.0
Inventories, primarily finished goods		295.6			245.8			(0.8	)		540.6			261.7			226.2		(1.2	)		486.7
Prepaid and refundable income taxes		21.3			1.5			(8.7	)		14.1			18.6			0.3		(13.4	)		5.5
Deferred taxes		19.9			11.6			-			31.5			17.9			15.3		-			33.2
Prepaid expenses and other current assets		26.0			24.4			(0.9	)		49.5			23.6			18.2		(1.1	)		40.7
Total current assets		557.8			481.6			(10.4	)		1,029.0			595.4			517.0		(15.7	)		1,096.7
Property, plant and equipment		58.3			201.7			-			260.0			64.6			213.5		-			278.1
Due from affiliates		-			461.9			(461.9	)		-			-			319.0		(319.0	)		-
Goodwill		49.8			161.8			-			211.6			49.9			165.4		-			215.3
Other intangibles		5.6			842.1			-			847.7			6.0			863.7		-			869.7
Deferred taxes		93.3			-			(93.3	)		-			93.0			-		(93.0	)		-
Investments in subsidiaries		1,808.7			41.5			(1,808.7	)		41.5			1,745.6			38.9		(1,745.6	)		38.9
Other assets		70.0			24.4			-			94.4			67.7			29.1		-			96.8
Total assets	$	2,643.5		$	2,215.0		$	(2,374.3	)	$	2,484.2		$	2,622.2		$	2,146.6	$	(2,173.3	)	$	2,595.5
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt and capital lease obligations	$	-		$	2.2		$	-		$	2.2		$	-		$	2.2	$	-		$	2.2
Current portion of acquisition consideration payable		2.3			-			-			2.3			30.3			-		-			30.3
Accounts payable		142.5			107.1			-			249.6			156.2			101.3		-			257.5
Income taxes payable		-			29.1			(29.1	)		-			22.1			12.9		(33.6	)		1.4
Accrued expenses and other current liabilities		62.5			67.3			(0.9	)		128.9			79.1			82.8		(1.1	)		160.8
Total current liabilities		207.3			205.7			(30.0	)		383.0			287.7			199.2		(34.7	)		452.2
Long-term debt		929.9			-			-			929.9			934.4			-		-			934.4
Obligations under capital leases		-			20.2			-			20.2			-			21.3		-			21.3
Income taxes payable		0.3			-			-			0.3			0.5			-		-			0.5
Deferred taxes		-			159.0			(99.3	)		59.7			-			155.7		(99.0	)		56.7
Acquisition consideration payable		4.4			-			-			4.4			6.0			-		-			6.0
Due to affiliates		461.9			-			(461.9	)		-			319.0			-		(319.0	)		-
Other noncurrent liabilities		88.3			22.3			-			110.6			93.1			25.0		-			118.1
Total liabilities		1,692.1			407.2			(591.2	)		1,508.1			1,640.7			401.2		(452.7	)		1,589.2
Redeemable noncontrolling interest		-			0.6			-			0.6			-			0.6		-			0.6
Equity:
Common stock and additional paid-in capital		522.9			929.7			(929.7	)		522.9			521.6			948.0		(948.0	)		521.6
Retained earnings		458.9			886.4			(863.3	)		482.0			477.8			793.1		(769.8	)		501.1
Accumulated other comprehensive (loss) income		(30.4	)		(9.9	)		9.9			(30.4	)		(17.9	)		2.8		(2.8	)		(17.9	)
Total Jones stockholders' equity		951.4			1,806.2			(1,783.1	)		974.5			981.5			1,743.9		(1,720.6	)		1,004.8
Noncontrolling interests		-			1.0			-			1.0			-			0.9		-			0.9
Total equity		951.4			1,807.2			(1,783.1	)		975.5			981.5			1,744.8		(1,720.6	)		1,005.7
Total liabilities and equity	$	2,643.5		$	2,215.0		$	(2,374.3	)	$	2,484.2		$	2,622.2		$	2,146.6	$	(2,173.3	)	$	2,595.5

Condensed Consolidating Statements of Operations

(In millions)

	Fiscal Quarter Ended July 6, 2013												Fiscal Quarter Ended June 30, 2012
	Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
Net sales	$	482.7		$	359.6		$	(7.1	)	$	835.2		$	516.6		$	333.7		$	(6.0	)	$	844.3
Licensing income		0.2			10.0			-			10.2			-			10.2			-			10.2
Other revenues		0.2			-			-			0.2			0.3			-			-			0.3
Total revenues		483.1			369.6			(7.1	)		845.6			516.9			343.9			(6.0	)		854.8
Cost of goods sold		326.6			223.7			(5.4	)		544.9			333.8			198.6			(3.8	)		528.6
Gross profit		156.5			145.9			(1.7	)		300.7			183.1			145.3			(2.2	)		326.2
Selling, general and administrative expenses		196.0			95.8			(1.9	)		289.9			216.2			90.3			(2.0	)		304.5
Operating (loss) income		(39.5	)		50.1			0.2			10.8			(33.1	)		55.0			(0.2	)		21.7
Net interest expense (income) and financing costs		14.1			1.3			-			15.4			9.2			(0.4	)		-			8.8
Equity in (loss) income of unconsolidated affiliate		-			(0.5	)		-			(0.5	)		-			0.4			-			0.4
(Loss) income before (benefit) provision for income taxes and equity in earnings of subsidiaries		(53.6	)		48.3			0.2			(5.1	)		(42.3	)		55.8			(0.2	)		13.3
(Benefit) provision for income taxes		(18.4	)		16.7			(0.2	)		(1.9	)		(12.2	)		17.1			-			4.9
Equity in earnings of subsidiaries		32.2			-			(32.2	)		-			38.4			-			(38.4	)		-
Net (loss) income		(3.0	)		31.6			(31.8	)		(3.2	)		8.3			38.7			(38.6	)		8.4
Less: income attributable to noncontrolling interest		-			0.2			-			0.2			-			0.3			-			0.3
(Loss) income attributable to Jones	$	(3.0	)	$	31.4		$	(31.8	)	$	(3.4	)	$	8.3		$	38.4		$	(38.6	)	$	8.1

	Fiscal Six Months Ended July 6, 2013											Fiscal Six Months Ended June 30, 2012
	Issuers			Others		Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
Net sales	$	1,060.5		$	784.4	$	(12.1	)	$	1,832.8		$	1,087.2		$	693.3		$	(12.8	)	$	1,767.7
Licensing income		0.3			20.6		-			20.9			-			22.5			-			22.5
Other revenues		0.6			-		-			0.6			0.5			-			-			0.5
Total revenues		1,061.4			805.0		(12.1	)		1,854.3			1,087.7			715.8			(12.8	)		1,790.7
Cost of goods sold		716.3			497.4		(8.4	)		1,205.3			711.1			417.5			(7.5	)		1,121.1
Gross profit		345.1			307.6		(3.7	)		649.0			376.6			298.3			(5.3	)		669.6
Selling, general and administrative expenses		423.6			201.9		(4.2	)		621.3			422.8			189.1			(4.2	)		607.7
Operating (loss) income		(78.5	)		105.7		0.5			27.7			(46.2	)		109.2			(1.1	)		61.9
Net interest expense (income) and financing costs		28.9			2.6		-			31.5			52.4			(0.9	)		-			51.5
Equity in income of unconsolidated affiliate		-			0.1		-			0.1			-			1.3			-			1.3
(Loss) income before (benefit) provision for income taxes and equity in earnings of subsidiaries		(107.4	)		103.2		0.5			(3.7	)		(98.6	)		111.4			(1.1	)		11.7
(Benefit) provision for income taxes		(38.6	)		37.3		(0.1	)		(1.4	)		(28.1	)		32.8			(0.4	)		4.3
Equity in earnings of subsidiaries		66.1			-		(66.1	)		-			78.3			-			(78.3	)		-
Net (loss) income		(2.7	)		65.9		(65.5	)		(2.3	)		7.8			78.6			(79.0	)		7.4
Less: income attributable to noncontrolling interest		-			0.6		-			0.6			-			0.5			-			0.5
(Loss) income attributable to Jones	$	(2.7	)	$	65.3	$	(65.5	)	$	(2.9	)	$	7.8		$	78.1		$	(79.0	)	$	6.9

Condensed Consolidating Statements of Other Comprehensive (Loss) Income

(In millions)

	Fiscal Quarter Ended July 6, 2013												Fiscal Quarter Ended June 30, 2012
	Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
Net (loss) income	$	(3.0	)	$	31.6		$	(31.8	)	$	(3.2	)	$	8.3		$	38.7		$	(38.6	)	$	8.4
Other comprehensive (loss) income:
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
Pension and postretirement liability adjustments, net of tax		0.1			-			-			0.1			-			-			-			-
Foreign currency translation adjustments		(4.0	)		(4.0	)		4.0			(4.0	)		(8.2	)		(8.2	)		8.2			(8.2	)
Total other comprehensive (loss) income		(3.6	)		(3.7	)		3.7			(3.6	)		(8.0	)		(8.0	)		8.0			(8.0	)
Comprehensive (loss) income	$	(6.6	)	$	27.9		$	(28.1	)	$	(6.8	)	$	0.3		$	30.7		$	(30.6	)	$	0.4

Condensed Consolidating Statements of Other Comprehensive (Loss) Income (continued)

(In millions)

	Fiscal Six Months Ended July 6, 2013												Fiscal Six Months Ended June 30, 2012
	Issuers			Others			Elim- inations			Cons- olidated			Issuers		Others		Elim- inations			Cons- olidated
Net (loss) income	$	(2.7	)	$	65.9		$	(65.5	)	$	(2.3	)	$	7.8	$	78.6	$	(79.0	)	$	7.4
Other comprehensive (loss) income:
Change in fair value of cash flow hedges, net of tax		0.5			0.5			(0.5	)		0.5			0.1		0.1		(0.1	)		0.1
Reclassification adjustment for hedge gains and losses included in net income, net of tax		(0.1	)		(0.1	)		0.1			(0.1	)		0.1		0.1		(0.1	)		0.1
Pension and postretirement liability adjustments, net of tax		0.3			-			-			0.3			-		-		-			-
Foreign currency translation adjustments		(13.2	)		(13.2	)		13.2			(13.2	)		1.1		1.1		(1.1	)		1.1
Total other comprehensive (loss) income		(12.5	)		(12.8	)		12.8			(12.5	)		1.3		1.3		(1.3	)		1.3
Comprehensive (loss) income	$	(15.2	)	$	53.1		$	(52.7	)	$	(14.8	)	$	9.1	$	79.9	$	(80.3	)	$	8.7

Condensed Consolidating Statements of Cash Flows

(In millions)

	Fiscal Six Months Ended July 6, 2013												Fiscal Six Months Ended June 30, 2012
	Issuers			Others			Elim- inations			Cons- olidated			Issuers			Others			Elim- inations			Cons- olidated
Net cash (used in) provided by operating activities	$	(4.0	)	$	12.4		$	(6.6	)	$	1.8		$	58.7		$	71.2		$	(5.9	)	$	124.0
Cash flows from investing activities:
Capital expenditures		(7.1	)		(22.2	)		-			(29.3	)		(9.0	)		(29.2	)		-			(38.2	)
Notes receivable issued		(6.1	)		(0.4	)		-			(6.5	)		-			-			-			-
Payments related to acquisition of Brian Atwood		(0.5	)		-			-			(0.5	)		-			-			-			-
Contingent consideration paid related to investment in GRI		-			-			-			-			-			(3.5	)		-			(3.5	)
Other		-			0.4			-			0.4			-			(0.1	)		-			(0.1	)
Net cash used in investing activities		(13.7	)		(22.2	)		-			(35.9	)		(9.0	)		(32.8	)		-			(41.8	)
Cash flows from financing activities:
Costs related to revolving credit agreement		(0.3	)		-			-			(0.3	)		(0.3	)		-			-			(0.3	)
Dividends paid		(7.8	)		(6.6	)		6.6			(7.8	)		(7.9	)		(5.9	)		5.9			(7.9	)
Repurchase of common shares		(14.5	)		-			-			(14.5	)		(29.0	)		-			-			(29.0	)
Payments of acquisition consideration payable		(2.5	)		(6.9	)		-			(9.4	)		-			(7.5	)		-			(7.5	)
Other items, net		0.1			(1.6	)		-			(1.5	)		2.3			(1.3	)		-			1.0
Net cash used in financing activities		(25.0	)		(15.1	)		6.6			(33.5	)		(34.9	)		(14.7	)		5.9			(43.7	)
Effect of exchange rates on cash		-			(1.0	)		-			(1.0	)		-			(0.2	)		-			(0.2	)
Net (decrease) increase in cash and cash equivalents		(42.7	)		(25.9	)		-			(68.6	)		14.8			23.5			-			38.3
Cash and cash equivalents, beginning		82.6			67.0			-			149.6			195.8			43.0			-			238.8
Cash and cash equivalents, ending	$	39.9		$	41.1		$	-		$	81.0		$	210.6		$	66.5		$	-		$	277.1