16. Condensed Consolidating Information

As discussed in Note 4, The Men’s Wearhouse, Inc. (the “Issuer”) issued $600.0 million in aggregate principal amount of 7.00% Senior Notes. The Senior Notes are guaranteed jointly and severally, on an unsecured basis by Tailored Brands, Inc. (the "Parent") and certain of our U.S. subsidiaries (the “Guarantors”). Our Canadian and U.K. subsidiaries (collectively, the “Non-Guarantors”) are not guarantors of the Senior Notes. Each of the Guarantors is 100% owned and all guarantees are joint and several. In addition, the guarantees are full and unconditional except for certain automatic release provisions related to the Guarantors.

These automatic release provisions are considered customary and include the sale or other disposition of all or substantially all of the assets or all of the capital stock of any subsidiary guarantor, the release or discharge of a guarantor’s guarantee of the obligations under the Term Loan other than a release or discharge through payment thereon, the designation in accordance with the Indenture of a guarantor as an unrestricted subsidiary or the satisfaction of the requirements for defeasance or discharge of the Senior Notes as provided for in the Indenture.

The tables in the following pages present the condensed consolidating financial information for the Parent, the Issuer, the Guarantors and the Non-Guarantors, together with eliminations, as of and for the periods indicated. The consolidating financial information may not necessarily be indicative of the financial positions, results of operations or cash flows had the Issuer, Guarantors and Non-Guarantors operated as independent entities. Certain of our current Guarantor subsidiaries did not exist and were created as part of the Reorganization. As a result, prior periods presented have been retrospectively adjusted and contain certain allocations to reflect our current organizational structure.

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

October 29, 2016

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	5,435	$	1,984	$	27,529	$	—	$	34,948
Accounts receivable, net		7,373		17,112		455,368		31,140		(439,095)		71,898
Inventories		—		253,482		459,159		335,274		—		1,047,915
Other current assets		7,102		22,155		42,995		6,963		(19,025)		60,190
Total current assets		14,475		298,184		959,506		400,906		(458,120)		1,214,951
Property and equipment, net		—		249,797		217,156		34,438		—		501,391
Rental product, net		—		139,386		3,677		17,038		—		160,101
Goodwill		—		6,160		68,510		41,356		—		116,026
Intangible assets, net		—		105		157,788		14,444		—		172,337
Investments in subsidiaries		(67,257)		1,375,395		—		—		(1,308,138)		—
Other assets		3,257		6,004		939		7,623		(7,500)		10,323
Total assets	$	(49,525)	$	2,075,031	$	1,407,576	$	515,805	$	(1,773,758)	$	2,175,129
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable	$	16,216	$	337,499	$	99,597	$	185,982	$	(439,095)	$	200,199
Accrued expenses and other current liabilities		9,617		143,023		105,446		42,514		(19,025)		281,575
Current portion of long-term debt		—		7,000		—		—		—		7,000
Total current liabilities		25,833		487,522		205,043		228,496		(458,120)		488,774
Long-term debt, net		—		1,588,873		—		—		—		1,588,873
Deferred taxes and other liabilities		2,339		65,893		104,512		9,935		(7,500)		175,179
Shareholders' (deficit) equity		(77,697)		(67,257)		1,098,021		277,374		(1,308,138)		(77,697)
Total liabilities and shareholders' (deficit) equity	$	(49,525)	$	2,075,031	$	1,407,576	$	515,805	$	(1,773,758)	$	2,175,129

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

October 31, 2015

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	771	$	2,128	$	50,755	$	—	$	53,654
Accounts receivable, net		5,766		13,382		356,111		33,203		(341,560)		66,902
Inventories		—		252,520		652,080		155,647		—		1,060,247
Other current assets		15,727		49,061		95,210		8,073		—		168,071
Total current assets		21,493		315,734		1,105,529		247,678		(341,560)		1,348,874
Property and equipment, net		—		272,192		236,624		39,665		—		548,481
Rental product, net		—		121,983		7,150		18,211		—		147,344
Goodwill		—		6,159		837,532		47,300		—		890,991
Intangible assets, net		—		213		546,937		21,021		—		568,171
Investments in subsidiaries		983,834		2,570,579		—		—		(3,554,413)		—
Other assets		13,353		24,616		3,850		8,831		(42,132)		8,518
Total assets	$	1,018,680	$	3,311,476	$	2,737,622	$	382,706	$	(3,938,105)	$	3,512,379
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	18,891	$	393,176	$	116,028	$	46,985	$	(341,560)	$	233,520
Accrued expenses and other current liabilities		9,592		142,648		105,170		21,801		—		279,211
Current portion of long-term debt		—		7,000		—		—		—		7,000
Total current liabilities		28,483		542,824		221,198		68,786		(341,560)		519,731
Long-term debt, net		—		1,649,206		—		33,432		(33,432)		1,649,206
Deferred taxes and other liabilities		4,814		135,612		215,092		11,241		(8,700)		358,059
Shareholders' equity		985,383		983,834		2,301,332		269,247		(3,554,413)		985,383
Total liabilities and shareholders' equity	$	1,018,680	$	3,311,476	$	2,737,622	$	382,706	$	(3,938,105)	$	3,512,379

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

January 30, 2016

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	724	$	2,243	$	27,013	$	—	$	29,980
Accounts receivable, net		—		23,067		392,944		29,845		(381,966)		63,890
Inventories		—		253,472		630,407		138,625		—		1,022,504
Other current assets		19,037		79,964		36,308		8,237		—		143,546
Total current assets		19,037		357,227		1,061,902		203,720		(381,966)		1,259,920
Property and equipment, net		—		254,335		230,209		37,280		—		521,824
Rental product, net		—		124,468		16,224		16,768		—		157,460
Goodwill		—		6,160		68,510		43,916		—		118,586
Intangible assets, net		—		186		159,530		18,794		—		178,510
Investments in subsidiaries		(109,188)		1,439,187		-		-		(1,329,999)		—
Other assets		—		6,914		992		8,513		(8,400)		8,019
Total assets	$	(90,151)	$	2,188,477	$	1,537,367	$	328,991	$	(1,720,365)	$	2,244,319
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable	$	—	$	419,187	$	153,717	$	46,176	$	(381,966)	$	237,114
Accrued expenses and other current liabilities		7,602		154,014		75,676		19,470		—		256,762
Current portion of long-term debt		—		42,451		-		—		—		42,451
Total current liabilities		7,602		615,652		229,393		65,646		(381,966)		536,327
Long-term debt, net		—		1,613,473		-		—		—		1,613,473
Deferred taxes and other liabilities		2,333		68,540		121,531		10,601		(8,400)		194,605
Shareholders' (deficit) equity		(100,086)		(109,188)		1,186,443		252,744		(1,329,999)		(100,086)
Total liabilities and shareholders' (deficit) equity	$	(90,151)	$	2,188,477	$	1,537,367	$	328,991	$	(1,720,365)	$	2,244,319

Tailored Brands, Inc.

Condensed Consolidating Statement of Earnings (Loss)

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Three Months Ended October 29, 2016
Net sales	$	—	$	460,432	$	466,476	$	105,474	$	(185,448)	$	846,934
Cost of sales		—		230,110		361,117		63,949		(185,448)		469,728
Gross margin		—		230,322		105,359		41,525		—		377,206
Operating expenses		974		146,398		153,439		29,662		(14,323)		316,150
Operating (loss) income		(974)		83,924		(48,080)		11,863		14,323		61,056
Other income and expenses, net		—		—		14,323		—		(14,323)		—
Interest income		—		60		517		49		(574)		52
Interest expense		(8)		(25,890)		—		(152)		574		(25,476)
Gain on extinguishment of debt, net		—		1,808		—		—		—		1,808
(Loss) earnings before income taxes		(982)		59,902		(33,240)		11,760		—		37,440
(Benefit) provision for income taxes		(247)		14,763		(8,119)		2,610		—		9,007
(Loss) earnings before equity in net income of subsidiaries		(735)		45,139		(25,121)		9,150		—		28,433
Equity in earnings of subsidiaries		29,168		(15,971)		—		—		(13,197)		—
Net earnings (loss)	$	28,433	$	29,168	$	(25,121)	$	9,150	$	(13,197)	$	28,433
Comprehensive income (loss)	$	14,306	$	30,116	$	(25,121)	$	(5,925)	$	930	$	14,306


Three Months Ended October 31, 2015
Net sales	$	—	$	464,380	$	448,712	$	109,306	$	(156,952)	$	865,446
Cost of sales		—		241,412		340,652		67,343		(156,952)		492,455
Gross margin		—		222,968		108,060		41,963		—		372,991
Operating expenses		783		182,912		200,671		29,487		(4,461)		409,392
Operating (loss) income		(783)		40,056		(92,611)		12,476		4,461		(36,401)
Other income and expenses, net		—		4,461		—		—		(4,461)		—
Interest income		—		682		1,003		40		(1,675)		50
Interest expense		—		(27,278)		(579)		(275)		1,675		(26,457)
(Loss) earnings before income taxes		(783)		17,921		(92,187)		12,241		—		(62,808)
(Benefit) provision for income taxes		(254)		5,654		(41,735)		681		—		(35,654)
(Loss) earnings before equity in net income of subsidiaries		(529)		12,267		(50,452)		11,560		—		(27,154)
Equity in earnings of subsidiaries		(26,625)		(38,892)		—		—		65,517		—
Net (loss) earnings	$	(27,154)	$	(26,625)	$	(50,452)	$	11,560	$	65,517	$	(27,154)
Comprehensive (loss) income	$	(29,400)	$	(26,847)	$	(50,452)	$	9,536	$	67,763	$	(29,400)

Tailored Brands, Inc.

Condensed Consolidating Statement of Earnings (Loss)

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Nine Months Ended October 29, 2016
Net sales	$	—	$	1,382,515	$	1,300,852	$	315,060	$	(412,987)	$	2,585,440
Cost of sales		—		676,761		992,265		190,050		(412,987)		1,446,089
Gross margin		—		705,754		308,587		125,010		—		1,139,351
Operating expenses		2,554		452,661		486,419		88,958		(42,923)		987,669
Operating (loss) income		(2,554)		253,093		(177,832)		36,052		42,923		151,682
Other income and expenses, net		—		—		42,923		—		(42,923)		—
Interest income		2		70		1,393		89		(1,452)		102
Interest expense		(13)		(78,932)		—		(360)		1,452		(77,853)
Gain on extinguishment of debt, net		—		1,737		—		—		—		1,737
(Loss) earnings before income taxes		(2,565)		175,968		(133,516)		35,781		—		75,668
(Benefit) provision for income taxes		(671)		46,915		(34,900)		9,279		—		20,623
(Loss) earnings before equity in net income of subsidiaries		(1,894)		129,053		(98,616)		26,502		—		55,045
Equity in earnings of subsidiaries		56,939		(72,114)		—		—		15,175		—
Net earnings (loss)	$	55,045	$	56,939	$	(98,616)	$	26,502	$	15,175	$	55,045
Comprehensive income (loss)	$	38,193	$	58,333	$	(98,616)	$	8,256	$	32,027	$	38,193

Nine Months Ended October 31, 2015
Net sales	$	—	$	1,388,910	$	1,369,352	$	328,755	$	(416,408)	$	2,670,609
Cost of sales		—		701,191		1,010,107		202,495		(416,408)		1,497,385
Gross margin		—		687,719		359,245		126,260		—		1,173,224
Operating expenses		2,138		470,716		505,267		90,649		(12,557)		1,056,213
Operating (loss) income		(2,138)		217,003		(146,022)		35,611		12,557		117,011
Other income and expenses, net		—		11,543		1,014		—		(12,557)		—
Interest income		—		1,831		2,672		103		(4,466)		140
Interest expense		—		(81,579)		(1,535)		(827)		4,466		(79,475)
Loss on extinguishment of debt, net		—		(12,675)		—		—		—		(12,675)
(Loss) earnings before income taxes		(2,138)		136,123		(143,871)		34,887		—		25,001
(Benefit) provision for income taxes		(706)		44,778		(58,691)		8,626		—		(5,993)
(Loss) earnings before equity in net income of subsidiaries		(1,432)		91,345		(85,180)		26,261		—		30,994
Equity in earnings of subsidiaries		32,426		(58,919)		—		—		26,493		—
Net earnings (loss)		30,994		32,426		(85,180)		26,261		26,493		30,994
Comprehensive income (loss)	$	30,309	$	32,119	$	(85,180)	$	25,883	$	27,178	$	30,309

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended October 29, 2016

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	26,245	$	156,148	$	36,198	$	(15,269)	$	(26,438)	$	176,884

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—		(40,273)		(37,055)		(3,222)		—		(80,550)
Intercompany activities		—		(19,025)		—		—		19,025		—
Proceeds from sale of property and equipment		—		—		598		7		—		605
Net cash used in investing activities		—		(59,298)		(36,457)		(3,215)		19,025		(79,945)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan		—		(40,701)		—		—		—		(40,701)
Proceeds from asset-based revolving credit facility		—		517,500		—		3,050		—		520,550
Payments on asset-based revolving credit facility		—		(517,500)		—		(3,050)		—		(520,550)
Repurchase and retirement of senior notes		—		(25,000)		—		—		—		(25,000)
Intercompany activities		—		(26,438)		—		19,025		7,413		—
Cash dividends paid		(26,438)		—		—		—		—		(26,438)
Proceeds from issuance of common stock		1,451		—		—		—		—		1,451
Tax payments related to vested deferred stock units		(1,258)		—		—		—		—		(1,258)
Net cash (used in) provided by financing activities		(26,245)		(92,139)		—		19,025		7,413		(91,946)
Effect of exchange rate changes		—		—		—		(25)		—		(25)
Increase (decrease) in cash and cash equivalents		—		4,711		(259)		516		—		4,968
Cash and cash equivalents at beginning of period		—		724		2,243		27,013		—		29,980
Cash and cash equivalents at end of period	$	—	$	5,435	$	1,984	$	27,529	$	—	$	34,948

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

For the Nine Months Ended October 31, 2015

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
Net cash provided by operating activities	$	27,680	$	55,665	$	35,437	$	19,723	$	(26,269)	$	112,236

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—		(39,657)		(38,347)		(8,402)		—		(86,406)
Proceeds from sale of property and equipment		—		2,586		27		—		—		2,613
Net cash used in investing activities		—		(37,071)		(38,320)		(8,402)		—		(83,793)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan		—		(6,250)		—		—		—		(6,250)
Proceeds from asset-based revolving credit facility		—		5,500		—		—		—		5,500
Payments on asset-based revolving credit facility		—		(5,500)		—		—		—		(5,500)
Deferred financing costs		—		(3,566)		—		—		—		(3,566)
Intercompany activities		—		(26,269)		—		—		26,269		—
Cash dividends paid		(26,269)		—		—		—		—		(26,269)
Proceeds from issuance of common stock		2,454		—		—		—		—		2,454
Tax payments related to vested deferred stock units		(4,538)		—		—		—		—		(4,538)
Excess tax benefits from share-based plans		950		—		154		—		—		1,104
Repurchases of common stock		(277)		—		—		—		—		(277)
Net cash (used in) provided by financing activities		(27,680)		(36,085)		154		—		26,269		(37,342)
Effect of exchange rate changes		—		—		—		292		—		292
(Decrease) increase in cash and cash equivalents		—		(17,491)		(2,729)		11,613		—		(8,607)
Cash and cash equivalents at beginning of period		—		18,262		4,857		39,142		—		62,261
Cash and cash equivalents at end of period	$	—	$	771	$	2,128	$	50,755	$	—	$	53,654