19. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

As discussed in Note 6, 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 foreign 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 Parent, 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

February 3, 2018

(in thousands)


	Tailored		The Men’s		Guarantor		Non-Guarantor
	Brands, Inc.		Wearhouse, Inc.		Subsidiaries		Subsidiaries		Eliminations		Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	—	$	51,818	$	2,180	$	49,609	$	—	$	103,607
Accounts receivable, net		—		23,712		368,328		58,573		(370,830)		79,783
Inventories		—		207,504		445,126		199,301		—		851,931
Other current assets		3,666		26,951		38,217		9,418		—		78,252
Total current assets		3,666		309,985		853,851		316,901		(370,830)		1,113,573
Property and equipment, net		—		203,204		220,979		36,491		—		460,674
Rental product, net		—		103,664		3,658		16,408		—		123,730
Goodwill		—		6,160		67,010		47,122		—		120,292
Intangible assets, net		—		—		155,438		13,549		—		168,987
Investments in subsidiaries		128,458		1,424,647		—		—		(1,553,105)		—
Other assets		—		11,183		805		81,846		(81,135)		12,699
Total assets	$	132,124	$	2,058,843	$	1,301,741	$	512,317	$	(2,005,070)	$	1,999,955
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	110,326	$	281,838	$	57,756	$	66,016	$	(370,830)	$	145,106
Accrued expenses and other current liabilities		14,061		87,597		155,813		34,187		—		291,658
Current portion of long-term debt		—		7,000		—		—		—		7,000
Total current liabilities		124,387		376,435		213,569		100,203		(370,830)		443,764
Long-term debt, net		—		1,389,808		—		—		—		1,389,808
Deferred taxes, net and other liabilities		5,545		164,142		46,641		28,998		(81,135)		164,191
Shareholders' equity		2,192		128,458		1,041,531		383,116		(1,553,105)		2,192
Total liabilities and shareholders' equity	$	132,124	$	2,058,843	$	1,301,741	$	512,317	$	(2,005,070)	$	1,999,955

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, net 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
Year Ended February 3, 2018
Net sales	$	—	$	1,737,651	$	1,653,188	$	737,848	$	(824,341)	$	3,304,346
Cost of sales		—		897,429		1,255,046		567,446		(824,341)		1,895,580
Gross margin		—		840,222		398,142		170,402		—		1,408,766
Operating expenses		3,453		648,569		557,404		116,587		(146,663)		1,179,350
Operating (loss) income		(3,453)		191,653		(159,262)		53,815		146,663		229,416
Other income and expenses, net		—		—		145,002		1,661		(146,663)		—
Interest expense, net		(442)		(105,009)		6,606		(1,062)		—		(99,907)
Gain on extinguishment of debt, net		—		5,445		—		—		—		5,445
(Loss) earnings before income taxes		(3,895)		92,089		(7,654)		54,414		—		134,954
Provision (benefit) for income taxes		(3,444)		54,744		(41,719)		28,670		—		38,251
(Loss) earnings before equity in net income of subsidiaries		(451)		37,345		34,065		25,744		—		96,703
Equity in earnings (loss) of subsidiaries		97,154		59,809		—		—		(156,963)		—
Net earnings (loss)	$	96,703	$	97,154	$	34,065	$	25,744	$	(156,963)	$	96,703
Comprehensive income (loss)	$	126,004	$	100,186	$	34,050	$	52,028	$	(186,264)	$	126,004

Year Ended January 28, 2017
Net sales	$	—	$	1,765,793	$	1,730,505	$	405,526	$	(523,121)	$	3,378,703
Cost of sales		—		897,564		1,308,576		254,216		(523,121)		1,937,235
Gross margin		—		868,229		421,929		151,310		—		1,441,468
Operating expenses		3,374		636,507		649,177		115,017		(95,433)		1,308,642
Operating (loss) income		(3,374)		231,722		(227,248)		36,293		95,433		132,826
Other income and expenses, net		—		—		89,433		6,000		(95,433)		—
Interest expense, net		(23)		(104,636)		2,404		(727)		—		(102,982)
Gain on extinguishment of debt, net		—		1,737		—		—		—		1,737
(Loss) earnings before income taxes		(3,397)		128,823		(135,411)		41,566		—		31,581
(Benefit) provision for income taxes		(1,249)		25,063		(27,492)		10,303		—		6,625
(Loss) earnings before equity in net income of subsidiaries		(2,148)		103,760		(107,919)		31,263		—		24,956
Equity in earnings (loss) of subsidiaries		27,104		(76,656)		—		—		49,552		—
Net earnings (loss)		24,956		27,104		(107,919)		31,263		49,552		24,956
Comprehensive income (loss)	$	13,359	$	28,427	$	(107,895)	$	18,319	$	61,149	$	13,359

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
Year Ended January 30, 2016
Net sales	$	—	$	1,787,295	$	1,852,876	$	427,770	$	(571,670)	$	3,496,271
Cost of sales		—		943,897		1,374,272		265,349		(571,670)		2,011,848
Gross margin		—		843,398		478,604		162,421		—		1,484,423
Operating expenses		2,801		1,218,061		1,238,599		120,667		(18,409)		2,561,719
Operating (loss) income		(2,801)		(374,663)		(759,995)		41,754		18,409		(1,077,296)
Other income and expenses, net		—		16,450		1,959		—		(18,409)		—
Interest expense, net		—		(106,613)		1,776		(953)		—		(105,790)
Loss on extinguishment of debt, net		—		(12,675)		—		—		—		(12,675)
(Loss) earnings before income taxes		(2,801)		(477,501)		(756,260)		40,801		—		(1,195,761)
(Benefit) provision for income taxes		(403)		(65,534)		(112,010)		8,905		—		(169,042)
(Loss) earnings before equity in net income of subsidiaries		(2,398)		(411,967)		(644,250)		31,896		—		(1,026,719)
Equity in (loss) earnings of subsidiaries		(1,024,321)		(612,354)		—		—		1,636,675		—
Net (loss) earnings	$	(1,026,719)	$	(1,024,321)	$	(644,250)	$	31,896	$	1,636,675	$	(1,026,719)
Comprehensive (loss) income	$	(1,049,534)	$	(1,024,663)	$	(644,296)	$	9,469	$	1,659,490	$	(1,049,534)

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

Year Ended February 3, 2018

(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	$	35,545	$	520,678	$	61,823	$	(231,517)		(35,761)	$	350,768

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—		(25,729)		(63,681)		(5,548)		—		(94,958)
Acquisition of business, net of cash		—		—		—		(457)		—		(457)
Intercompany activities		—		(285,500)		—		(75,135)		360,635		—
Proceeds from sale of property and equipment		—		3,323		2,157		—		—		5,480
Net cash used in investing activities		—		(307,906)		(61,524)		(81,140)		360,635		(89,935)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan		—		(53,379)		—		—		—		(53,379)
Proceeds from asset-based revolving credit facility		—		276,300		—		—		—		276,300
Payments on asset-based revolving credit facility		—		(276,300)		—		—		—		(276,300)
Repurchase and retirement of senior notes		—		(145,371)		—		—		—		(145,371)
Deferred financing costs		—		(2,580)		—		—		—		(2,580)
Intercompany activities		—		39,374		—		285,500		(324,874)		—
Cash dividends paid		(35,761)		—		—		—		—		(35,761)
Proceeds from issuance of common stock		1,903		—		—		—		—		1,903
Tax payments related to vested deferred stock units		(1,687)		—		—		—		—		(1,687)
Net cash (used in) provided by financing activities		(35,545)		(161,956)		—		285,500		(324,874)		(236,875)
Effect of exchange rate changes		—		—		—		8,760		—		8,760
Increase (decrease) in cash and cash equivalents		—		50,816		299		(18,397)		—		32,718
Cash and cash equivalents at beginning of period		—		1,002		1,881		68,006		—		70,889
Cash and cash equivalents at end of period	$	—	$	51,818	$	2,180	$	49,609	$	—	$	103,607

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

Year Ended January 28, 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	$	34,402	$	257,133	$	47,038	$	(60,705)	$	(35,240)	$	242,628

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—		(46,960)		(47,998)		(4,736)		—		(99,694)
Intercompany activities		—		(110,280)		—		—		110,280		—
Proceeds from sale of property and equipment		—		—		598		19		—		617
Net cash used in investing activities		—		(157,240)		(47,400)		(4,717)		110,280		(99,077)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan		—		(42,451)		—		—		—		(42,451)
Proceeds from asset-based revolving credit facility		—		606,500		—		3,037		—		609,537
Payments on asset-based revolving credit facility		—		(606,500)		—		(3,037)		—		(609,537)
Repurchase and retirement of senior notes		—		(21,924)		—		—		—		(21,924)
Intercompany activities		—		(35,240)		—		110,280		(75,040)		—
Cash dividends paid		(35,240)		—		—		—		—		(35,240)
Proceeds from issuance of common stock		2,189		—		—		—		—		2,189
Tax payments related to vested deferred stock units		(1,362)		—		—		—		—		(1,362)
Excess tax benefits from share-based plans		11		—		—		—		—		11
Net cash (used in) provided by financing activities		(34,402)		(99,615)		—		110,280		(75,040)		(98,777)
Effect of exchange rate changes		—		—		—		(3,865)		—		(3,865)
Increase (decrease) in cash and cash equivalents		—		278		(362)		40,993		—		40,909
Cash and cash equivalents at beginning of period		—		724		2,243		27,013		—		29,980
Cash and cash equivalents at end of period	$	—	$	1,002	$	1,881	$	68,006	$	—	$	70,889

Tailored Brands, Inc.

Condensed Consolidating Statement of Cash Flows

Year Ended January 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	$	35,404	$	47,515	$	47,880	$	35,878	$	(34,980)	$	131,697

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		—		(54,525)		(50,692)		(10,281)		—		(115,498)
Intercompany activities		—		33,432		—		—		(33,432)		—
Proceeds from sale of property and equipment		—		2,586		31		—		—		2,617
Net cash used in investing activities		—		(18,507)		(50,661)		(10,281)		(33,432)		(112,881)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on term loan		—		(8,000)		—		—		—		(8,000)
Proceeds from asset-based revolving credit facility		—		180,500		—		—		—		180,500
Payments on asset-based revolving credit facility		—		(180,500)		—		—		—		(180,500)
Intercompany activities		—		(34,980)		—		(33,432)		68,412		—
Cash dividends paid		(34,980)		—		—		—		—		(34,980)
Proceeds from issuance of common stock		2,974		—		—		—		—		2,974
Deferred financing costs		—		(3,566)		—		—		—		(3,566)
Tax payments related to vested deferred stock units		(4,538)		—		—		—		—		(4,538)
Excess tax benefits from share-based plans		1,417		—		167		—		—		1,584
Repurchases of common stock		(277)		—		—		—		—		(277)
Net cash (used in) provided by financing activities		(35,404)		(46,546)		167		(33,432)		68,412		(46,803)
Effect of exchange rate changes		—		—		—		(4,294)		—		(4,294)
Increase (decrease) in cash and cash equivalents		—		(17,538)		(2,614)		(12,129)		—		(32,281)
Cash and cash equivalents at beginning of period		—		18,262		4,857		39,142		—		62,261
Cash and cash equivalents at end of period	$	—	$	724	$	2,243	$	27,013	$	—	$	29,980