17. Condensed Consolidating Information

As discussed in Note 5, The Men’s Wearhouse (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.

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

April 29, 2017

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	2,162	$	2,335	$	62,083	$	—	$	66,580
Accounts receivable, net		7,358		28,480		437,481		149,697		(539,000)		84,016
Inventories		—		212,146		438,670		333,405		—		984,221
Other current assets		136		229,333		33,392		10,933		(204,506)		69,288
Total current assets		7,494		472,121		911,878		556,118		(743,506)		1,204,105
Property and equipment, net		—		224,274		208,719		34,668		—		467,661
Rental product, net		—		127,188		3,087		17,220		—		147,495
Goodwill		—		6,160		68,510		42,915		—		117,585
Intangible assets, net		—		52		156,741		14,173		—		170,966
Investments in subsidiaries		(89,379)		1,444,485		—		—		(1,355,106)		—
Other assets		—		5,200		949		7,174		(6,900)		6,423
Total assets	$	(81,885)	$	2,279,480	$	1,349,884	$	672,268	$	(2,105,512)	$	2,114,235
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable	$	21,606	$	553,773	$	82,517	$	52,990	$	(539,000)	$	171,886
Accrued expenses and other current liabilities		10,088		146,168		120,022		227,415		(197,230)		306,463
Current portion of long-term debt		—		13,379		—		—		—		13,379
Total current liabilities		31,694		713,320		202,539		280,405		(736,230)		491,728
Long-term debt, net		—		1,574,486		—		—		—		1,574,486
Deferred taxes and other liabilities		—		81,053		84,719		10,004		(14,176)		161,600
Shareholders' (deficit) equity		(113,579)		(89,379)		1,062,626		381,859		(1,355,106)		(113,579)
Total liabilities and shareholders' (deficit) equity	$	(81,885)	$	2,279,480	$	1,349,884	$	672,268	$	(2,105,512)	$	2,114,235

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

April 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	$	—	$	7,950	$	3,231	$	25,248	$	—	$	36,429
Accounts receivable, net		—		17,235		293,596		35,703		(263,201)		83,333
Inventories		—		211,358		714,712		150,663		—		1,076,733
Other current assets		9,769		41,038		18,629		8,467		—		77,903
Total current assets		9,769		277,581		1,030,168		220,081		(263,201)		1,274,398
Property and equipment, net		—		252,683		228,714		39,747		—		521,144
Rental product, net		—		141,427		13,990		18,823		—		174,240
Goodwill		—		6,160		68,510		46,828		—		121,498
Intangible assets, net		—		159		159,051		18,616		—		177,826
Investments in subsidiaries		(88,520)		1,447,307		—		—		(1,358,787)		—
Other assets		—		6,637		952		8,226		(8,100)		7,715
Total assets	$	(78,751)	$	2,131,954	$	1,501,385	$	352,321	$	(1,630,088)	$	2,276,821
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable	$	—	$	310,830	$	113,982	$	41,637	$	(263,201)	$	203,248
Accrued expenses and other current liabilities		9,129		184,955		90,879		26,081		—		311,044
Current portion of long-term debt		—		42,451		—		—		—		42,451
Total current liabilities		9,129		538,236		204,861		67,718		(263,201)		556,743
Long-term debt, net		—		1,613,192		—		—		—		1,613,192
Deferred taxes and other liabilities		2,350		69,046		122,428		11,392		(8,100)		197,116
Shareholders' (deficit) equity		(90,230)		(88,520)		1,174,096		273,211		(1,358,787)		(90,230)
Total liabilities and shareholders' (deficit) equity	$	(78,751)	$	2,131,954	$	1,501,385	$	352,321	$	(1,630,088)	$	2,276,821

Tailored Brands, Inc.

Condensed Consolidating Balance Sheet

January 28, 2017

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	1,002	$	1,881	$	68,006	$	—	$	70,889
Accounts receivable, net		7,376		15,499		476,742		56,777		(490,680)		65,714
Inventories		—		230,264		438,167		287,081		—		955,512
Other current assets		12,773		134,225		28,436		8,448		(110,280)		73,602
Total current assets		20,149		380,990		945,226		420,312		(600,960)		1,165,717
Property and equipment, net		—		232,090		216,248		35,827		—		484,165
Rental product, net		—		131,287		3,369		17,954		—		152,610
Goodwill		—		6,160		68,510		42,356		—		117,026
Intangible assets, net		—		78		157,270		14,311		—		171,659
Investments in subsidiaries		(109,788)		1,425,622		—		—		(1,315,834)		—
Other assets		—		5,615		959		7,321		(7,200)		6,695
Total assets	$	(89,639)	$	2,181,842	$	1,391,582	$	538,081	$	(1,923,994)	$	2,097,872
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable	$	15,352	$	509,572	$	82,337	$	60,799	$	(490,680)	$	177,380
Accrued expenses and other current liabilities		2,627		111,617		129,420		135,777		(110,280)		269,161
Current portion of long-term debt		—		13,379		—		—		—		13,379
Total current liabilities		17,979		634,568		211,757		196,576		(600,960)		459,920
Long-term debt, net		—		1,582,150		—		—		—		1,582,150
Deferred taxes and other liabilities		—		74,912		85,477		10,231		(7,200)		163,420
Shareholders' (deficit) equity		(107,618)		(109,788)		1,094,348		331,274		(1,315,834)		(107,618)
Total liabilities and shareholders' (deficit) equity	$	(89,639)	$	2,181,842	$	1,391,582	$	538,081	$	(1,923,994)	$	2,097,872

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 April 29, 2017
Net sales	$	—		$	418,925	$	372,264	$	135,258	$	(143,541)	$	782,906
Cost of sales		—			212,499		278,631		102,877		(143,541)		450,466
Gross margin		—			206,426		93,633		32,381		—		332,440
Operating expenses		903			155,783		133,532		25,952		(14,732)		301,438
Operating (loss) income		(903)			50,643		(39,899)		6,429		14,732		31,002
Other income and expenses, net		—			—		14,732		—		(14,732)		—
Interest income		110			1,302		1,672		62		(3,079)		67
Interest expense		—			(27,194)		(114)		(1,392)		3,079		(25,621)
Gain on extinguishment of debt, net		—			715		—		—		—		715
(Loss) earnings before income taxes		(793)			25,466		(23,609)		5,099		—		6,163
Provision (benefit) for income taxes		1,945			8,469		(7,752)		1,662		—		4,324
(Loss) earnings before equity in net income of subsidiaries		(2,738)			16,997		(15,857)		3,437		—		1,839
Equity in earnings of subsidiaries		4,577			(12,420)		—		—		7,843		—
Net earnings (loss)	$	1,839		$	4,577	$	(15,857)	$	3,437	$	7,843	$	1,839
Comprehensive (loss) income	$	(286)		$	2,920	$	(15,857)	$	2,969	$	9,968	$	(286)

Three Months Ended April 30, 2016
Net sales	$	—		$	440,498	$	403,227	$	96,770	$	(111,673)	$	828,822
Cost of sales		—			220,547		305,394		62,713		(111,673)		476,981
Gross margin		—			219,951		97,833		34,057		—		351,841
Operating expenses		717			148,487		156,913		28,415		(13,686)		320,846
Operating (loss) income		(717)			71,464		(59,080)		5,642		13,686		30,995
Other income and expenses, net		—			—		13,686		—		(13,686)		—
Interest income		2			5		307		8		(309)		13
Interest expense		—			(26,688)		(11)		(112)		309		(26,502)
(Loss) earnings before income taxes		(715)			44,781		(45,098)		5,538		—		4,506
(Benefit) provision for income taxes		(203)			14,544		(13,045)		1,573		—		2,869
(Loss) earnings before equity in net income of subsidiaries		(512)			30,237		(32,053)		3,965		—		1,637
Equity in earnings (loss) of subsidiaries		2,149			(28,088)		—		—		25,939		—
Net earnings (loss)		1,637			2,149		(32,053)		3,965		25,939		1,637
Comprehensive income (loss)	$	18,306		$	2,389	$	(32,053)	$	20,394	$	9,270	$	18,306

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended April 29, 2017

(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	$	10,296	$	174,399	$	10,424	$	(152,637)	$	(9,131)	$	33,351

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—		(6,333)		(9,982)		(1,471)		—		(17,786)
Acquisition of business, net of cash		—		—		—		(457)		—		(457)
Intercompany activities		—		(149,424)		—		—		149,424		—
Proceeds from sale of property and equipment		—		—		12		—		—		12
Net cash used in investing activities		—		(155,757)		(9,970)		(1,928)		149,424		(18,231)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan		—		(1,750)		—		—		—		(1,750)
Proceeds from asset-based revolving credit facility		—		137,650		—		—		—		137,650
Payments on asset-based revolving credit facility		—		(137,650)		—		—		—		(137,650)
Repurchase and retirement of senior notes		—		(6,601)		—		—		—		(6,601)
Intercompany activities		—		(9,131)		—		149,424		(140,293)		—
Cash dividends paid		(9,131)		—		—		—		—		(9,131)
Proceeds from issuance of common stock		467		—		—		—		—		467
Tax payments related to vested deferred stock units		(1,632)		—		—		—		—		(1,632)
Net cash (used in) provided by financing activities		(10,296)		(17,482)		—		149,424		(140,293)		(18,647)
Effect of exchange rate changes		—		—		—		(782)		—		(782)
Increase (decrease) in cash and cash equivalents		—		1,160		454		(5,923)		—		(4,309)
Cash and cash equivalents at beginning of period		—		1,002		1,881		68,006		—		70,889
Cash and cash equivalents at end of period	$	—	$	2,162	$	2,335	$	62,083	$	—	$	66,580

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

For the Three Months Ended April 30, 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	$	9,734	$	34,076	$	13,365	$	(1,819)	$	(8,921)	$	46,435

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—		(16,179)		(12,878)		(1,268)		—		(30,325)
Proceeds from sale of property and equipment		—		—		501		—		—		501
Net cash used in investing activities		—		(16,179)		(12,377)		(1,268)		—		(29,824)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan		—		(1,750)		—		—		—		(1,750)
Proceeds from asset-based revolving credit facility		—		201,000		—		3,014		—		204,014
Payments on asset-based revolving credit facility		—		(201,000)		—		(3,014)		—		(204,014)
Intercompany activities		—		(8,921)		—		—		8,921		—
Cash dividends paid		(8,921)		—		—		—		—		(8,921)
Proceeds from issuance of common stock		434		—		—		—		—		434
Tax payments related to vested deferred stock units		(1,247)		—		—		—		—		(1,247)
Net cash used in financing activities		(9,734)		(10,671)		—		—		8,921		(11,484)
Effect of exchange rate changes		—		—		—		1,322		—		1,322
Increase (decrease) in cash and cash equivalents		—		7,226		988		(1,765)		—		6,449
Cash and cash equivalents at beginning of period		—		724		2,243		27,013		—		29,980
Cash and cash equivalents at end of period	$	—	$	7,950	$	3,231	$	25,248	$	—	$	36,429