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GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
 12 Months Ended
Dec. 29, 2018
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The Company’s senior notes constitute debt obligations of its wholly-owned subsidiary, The William Carter Company ("TWCC" or the "Subsidiary Issuer"), are unsecured and are fully and unconditionally guaranteed by Carter’s, Inc. (the "Parent"), by each of the Parent's current domestic subsidiaries (other than TWCC), and, subject to certain exceptions, future restricted subsidiaries that guarantee the Company’s amended revolving credit facility or certain other debt of the Company or the subsidiary guarantors.
The condensed consolidating financial information for the Parent, the Subsidiary Issuer, and the guarantor and non-guarantor subsidiaries has been prepared from the books and records maintained by the Company. The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10. The financial information may not necessarily be indicative of the financial position, results of operations, comprehensive income (loss), and cash flows, had the Parent, Subsidiary Issuer, guarantor or non-guarantor subsidiaries operated as independent entities.
Intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. The Company has accounted for investments in subsidiaries under the equity method. The guarantor subsidiaries are 100% owned directly or indirectly by the Parent and all guarantees are joint, several and unconditional.
CARTER’S, INC.
Condensed Consolidating Balance Sheet
As of December 29, 2018
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
118,600

 
$
14,735

 
$
36,742

 
$
—

 
$
170,077

Accounts receivable, net
—

 
203,546

 
38,753

 
15,960

 
—

 
258,259

Intercompany receivable
—

 
89,201

 
156,965

 
70,684

 
(316,850
)
 
—

Finished goods inventories
—

 
329,989

 
199,091

 
63,811

 
(18,665
)
 
574,226

Prepaid expenses and other current assets
—

 
8,483

 
23,987

 
7,926

 
—

 
40,396

Total current assets
—

 
749,819

 
433,531

 
195,123

 
(335,515
)
 
1,042,958

Property, plant, and equipment, net
—

 
133,765

 
180,914

 
35,758

 
—

 
350,437

Goodwill
—

 
136,570

 
45,368

 
45,163

 
—

 
227,101

Tradenames, net
—

 
223,073

 
142,619

 
—

 
—

 
365,692

Customer relationships, net
—

 
—

 
41,820

 
2,691

 
—

 
44,511

Other assets
—

 
24,399

 
1,321

 
2,439

 
—

 
28,159

Intercompany long-term receivable
—

 
—

 
541,629

 
—

 
(541,629
)
 
—

Intercompany long-term note receivable
—

 
100,000

 
—

 
—

 
(100,000
)
 
—

Investment in subsidiaries
869,433

 
1,173,415

 
303,368

 
—

 
(2,346,216
)
 
—

Total assets
$
869,433

 
$
2,541,041

 
$
1,690,570

 
$
281,174

 
$
(3,323,360
)
 
$
2,058,858

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
137,524

 
$
44,066

 
$
17,486

 
$
—

 
$
199,076

   Intercompany Liabilities
—

 
220,033

 
93,790

 
3,027

 
(316,850
)
 
—

Other current liabilities
—

 
35,311

 
78,595

 
14,439

 
—

 
128,345

Total current liabilities
—

 
392,868

 
216,451

 
34,952

 
(316,850
)
 
327,421

Long-term debt, net
—

 
593,264

 
—

 
—

 
—

 
593,264

Deferred income taxes
—

 
46,640

 
40,327

 
380

 
—

 
87,347

Intercompany long-term liability
—

 
541,629

 
—

 
—

 
(541,629
)
 
—

Intercompany long-term note payable
—

 
—

 
100,000

 
—

 
(100,000
)
 
—

Other long-term liabilities
—

 
78,542

 
91,218

 
11,633

 
—

 
181,393

Stockholders' equity
869,433

 
888,098

 
1,242,574

 
234,209

 
(2,364,881
)
 
869,433

Total liabilities and stockholders' equity
$
869,433

 
$
2,541,041

 
$
1,690,570

 
$
281,174

 
$
(3,323,360
)
 
$
2,058,858







CARTER’S, INC.
Condensed Consolidating Balance Sheet
As of December 30, 2017
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
—

 
$
129,463

 
$
10,030

 
$
39,001

 
$
—

 
$
178,494

Accounts receivable, net
—

 
182,944

 
40,286

 
17,331

 
—

 
240,561

Intercompany receivable
—

 
87,702

 
162,007

 
58,980

 
(308,689
)
 
—

Finished goods inventories
—

 
296,065

 
206,556

 
66,569

 
(20,468
)
 
548,722

Prepaid expenses and other current assets
—

 
17,012

 
21,354

 
14,569

 
—

 
52,935

Total current assets
—

 
713,186

 
440,233

 
196,450

 
(329,157
)
 
1,020,712

Property, plant, and equipment, net
—

 
147,858

 
189,511

 
40,555

 
—

 
377,924

Goodwill
—

 
136,570

 
45,368

 
48,486

 
—

 
230,424

Tradenames, net
—

 
223,251

 
142,300

 
—

 
—

 
365,551

Customer relationships, net
—

 
—

 
44,996

 
3,000

 
—

 
47,996

Other assets
—

 
23,884

 
2,392

 
2,159

 
—

 
28,435

Intercompany long-term receivable
—

 
—

 
441,294

 
—

 
(441,294
)
 
—

Intercompany long-term note receivable
—

 
100,000

 
—

 
—

 
(100,000
)
 
—

Investment in subsidiaries
857,416

 
1,053,224

 
231,994

 
—

 
(2,142,634
)
 
—

Total assets
$
857,416

 
$
2,397,973

 
$
1,538,088

 
$
290,650

 
$
(3,013,085
)
 
$
2,071,042

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Accounts payable
$
—

 
$
115,658

 
$
49,313

 
$
17,143

 
$
—

 
$
182,114

Intercompany payables
—

 
215,573

 
91,697

 
1,419

 
(308,689
)
 
—

Other current liabilities
—

 
11,805

 
122,989

 
14,340

 
—

 
149,134

Total current liabilities
—

 
343,036

 
263,999

 
32,902

 
(308,689
)
 
331,248

 
 
 
 
 
 
 
 
 
 
 

Long-term debt
—

 
617,306

 
—

 
—

 
—

 
617,306

Deferred income taxes
—

 
46,619

 
37,647

 
678

 
—

 
84,944

Intercompany long-term liability
—

 
441,294

 
—

 
—

 
(441,294
)
 
—

Intercompany long-term note payable
—

 
—

 
100,000

 
—

 
(100,000
)
 
—

Other long-term liabilities
—

 
71,834

 
92,570

 
15,724

 
—

 
180,128

Stockholders' equity
857,416

 
877,884

 
1,043,872

 
241,346

 
(2,163,102
)
 
857,416

Total liabilities and stockholders' equity
$
857,416

 
$
2,397,973

 
$
1,538,088

 
$
290,650

 
$
(3,013,085
)
 
$
2,071,042

 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Net sales
$
—

 
$
1,936,576

 
$
2,039,889

 
$
431,745

 
$
(945,941
)
 
$
3,462,269

Cost of goods sold
—

 
1,458,934

 
1,217,110

 
213,462

 
(924,720
)
 
1,964,786

Gross profit
—

 
477,642

 
822,779

 
218,283

 
(21,221
)
 
1,497,483

Royalty income, net
—

 
32,958

 
18,652

 
—

 
(12,680
)
 
38,930

Selling, general, and administrative expenses
—

 
191,068

 
856,665

 
132,951

 
(35,704
)
 
1,144,980

Operating income (loss)
—

 
319,532

 
(15,234
)
 
85,332

 
1,803

 
391,433

Interest expense
—

 
34,523

 
5,310

 
44

 
(5,308
)
 
34,569

Interest income
—

 
(5,329
)
 
(2
)
 
(504
)
 
5,308

 
(527
)
(Income) loss in subsidiaries
(282,068
)
 
(38,528
)
 
(71,671
)
 
—

 
392,267

 
—

Other expense (income), net
—

 
495

 
(189
)
 
1,110

 
—

 
1,416

Income (loss) before income taxes
282,068

 
328,371

 
51,318

 
84,682

 
(390,464
)
 
355,975

Provision for income taxes
—

 
48,106

 
12,790

 
13,011

 
—

 
73,907

Net income (loss)
$
282,068

 
$
280,265

 
$
38,528

 
$
71,671

 
$
(390,464
)
 
$
282,068


For the fiscal year ended December 30, 2017
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Net sales
$
—

 
$
1,922,930

 
$
1,955,703

 
$
372,314

 
$
(850,443
)
 
$
3,400,504

Cost of goods sold
—

 
1,406,517

 
1,143,867

 
196,391

 
(829,625
)
 
1,917,150

Gross profit
—

 
516,413

 
811,836

 
175,923

 
(20,818
)
 
1,483,354

Royalty income, net
—

 
34,816

 
19,725

 
—

 
(11,360
)
 
43,181

Selling, general, and administrative expenses
—

 
181,129

 
837,252

 
126,057

 
(37,510
)
 
1,106,928

Operating income (loss)
—

 
370,100

 
(5,691
)
 
49,866

 
5,332

 
419,607

Interest expense
—

 
29,758

 
5,498

 
96

 
(5,308
)
 
30,044

Interest income
—

 
(5,497
)
 
—

 
(156
)
 
5,308

 
(345
)
(Income) loss in subsidiaries
(302,848
)
 
(25,426
)
 
(38,948
)
 
—

 
367,222

 
—

Other (income) expense, net
—

 
(1,154
)
 
1,281

 
(1,291
)
 
—

 
(1,164
)
Income (loss) before income taxes
302,848

 
372,419

 
26,478

 
51,217

 
(361,890
)
 
391,072

Provision for income taxes
—

 
74,903

 
1,052

 
12,269

 
—

 
88,224

Net income (loss)
$
302,848

 
$
297,516

 
$
25,426

 
$
38,948

 
$
(361,890
)
 
$
302,848

CARTER’S, INC.
Condensed Consolidating Statement of Operations
For the fiscal year ended December 31, 2016
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Net sales
$
—

 
$
1,881,918

 
$
1,762,252

 
$
300,523

 
$
(746,150
)
 
$
3,198,543

Cost of goods sold
—

 
1,358,209

 
1,033,403

 
155,560

 
(727,148
)
 
1,820,024

Gross profit
—

 
523,709

 
728,849

 
144,963

 
(19,002
)
 
1,378,519

Royalty income, net
—

 
32,728

 
19,660

 
—

 
(9,573
)
 
42,815

Selling, general, and administrative expenses
—

 
177,605

 
753,874

 
101,494

 
(37,567
)
 
995,406

Operating income (loss)
—

 
378,832

 
(5,365
)
 
43,469

 
8,992

 
425,928

Interest expense
—

 
26,475

 
5,435

 
442

 
(5,308
)
 
27,044

Interest income
—

 
(5,756
)
 
—

 
(115
)
 
5,308

 
(563
)
(Income) loss in subsidiaries
(257,709
)
 
4,808

 
(29,308
)
 
—

 
282,209

 
—

Other (income) expense, net
—

 
(382
)
 
482

 
3,907

 
—

 
4,007

Income (loss) before income taxes
257,709

 
353,687

 
18,026

 
39,235

 
(273,217
)
 
395,440

Provision for income taxes
—

 
104,970

 
22,834

 
9,927

 
—

 
137,731

Net income (loss)
$
257,709

 
$
248,717

 
$
(4,808
)
 
$
29,308

 
$
(273,217
)
 
$
257,709

fiscal year ended December 30, 2017
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Net income (loss)
$
302,848

 
$
297,516

 
$
25,426

 
$
38,948

 
$
(361,890
)
 
$
302,848

Post-retirement benefit plans
(692
)
 
(692
)
 
(430
)
 
—

 
1,122

 
(692
)
Foreign currency translation adjustments
6,339

 
6,339

 
6,339

 
6,339

 
(19,017
)
 
6,339

Comprehensive income (loss)
$
308,495

 
$
303,163

 
$
31,335

 
$
45,287

 
$
(379,785
)
 
$
308,495

 
For the fiscal year ended December 31, 2016
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Net income (loss)
$
257,709

 
$
248,717

 
$
(4,808
)
 
$
29,308

 
$
(273,217
)
 
$
257,709

Post-retirement benefit plans
(335
)
 
(335
)
 
(666
)
 
—

 
1,001

 
(335
)
Foreign currency translation adjustments
1,962

 
1,962

 
1,962

 
1,962

 
(5,886
)
 
1,962

Comprehensive income (loss)
$
259,336

 
$
250,344

 
$
(3,512
)
 
$
31,270

 
$
(278,102
)
 
$
259,336

Condensed Consolidating Statement of Cash Flows
For the fiscal year ended December 29, 2018
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Cash flows provided by operating activities:
$
—

 
$
202,214

 
$
60,391

 
$
93,593

 
$
—

 
$
356,198

 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(17,589
)
 
(39,657
)
 
(6,537
)
 
—

 
(63,783
)
Acquisitions of businesses, net of cash acquired
—

 
—

 
—

 
96

 
—

 
96

Intercompany investing activity
272,978

 
(815
)
 
3,024

 
1,558

 
(276,745
)
 
—

Disposals and recoveries from property, plant, and equipment
—

 
—

 
370

 
10

 
—

 
380

Net cash provided by (used in) investing activities
$
272,978

 
$
(18,404
)
 
$
(36,263
)
 
$
(4,873
)
 
$
(276,745
)
 
$
(63,307
)
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Intercompany financing activity
—

 
(168,705
)
 
(97,945
)
 
(10,095
)
 
276,745

 
—

Borrowings under secured revolving credit facility
—

 
290,000

 
—

 
—

 
—

 
290,000

Payments on secured revolving credit facility
—

 
(315,000
)
 
—

 
—

 
—

 
(315,000
)
Payment of debt issuance costs
—

 
(968
)
 
—

 
—

 
—

 
(968
)
Dividends paid
(83,717
)
 
—

 
78,522

 
(78,522
)
 
—

 
(83,717
)
Repurchases of common stock
(193,028
)
 
—

 
—

 
—

 
—

 
(193,028
)
Withholdings from vesting of restricted stock
(6,830
)
 
—

 
—

 
—

 
—

 
(6,830
)
Proceeds from exercises of stock options
10,597

 
—

 
—

 
—

 
—

 
10,597

Net cash (used in) provided by financing activities
(272,978
)
 
(194,673
)
 
(19,423
)
 
(88,617
)
 
276,745

 
(298,946
)
Effect of exchange rate changes on cash
—

 
—

 
—

 
(2,362
)
 
—

 
(2,362
)
Net increase (decrease) in cash and cash equivalents
—

 
(10,863
)
 
4,705

 
(2,259
)
 
—

 
(8,417
)
Cash and cash equivalents, beginning of fiscal year
—

 
129,463

 
10,030

 
39,001

 
—

 
178,494

Cash and cash equivalents, end of fiscal year
$
—

 
$
118,600

 
$
14,735

 
$
36,742

 
$
—

 
$
170,077









CARTER’S, INC.
Condensed Consolidating Statement of Cash Flows
For the fiscal year ended December 30, 2017
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Cash flows provided by operating activities:
$
—

 
$
167,000

 
$
118,814

 
$
43,807

 
$
—

 
$
329,621

 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(21,690
)
 
(38,899
)
 
(8,884
)
 
—

 
(69,473
)
Acquisitions of businesses, net of cash acquired
—

 
(143,270
)
 
746

 
(15,933
)
 
—

 
(158,457
)
Intercompany investing activity
256,991

 
(25,606
)
 
894

 
27,397

 
(259,676
)
 
—

Disposals and recoveries from property, plant, and equipment
—

 
—

 
15

 
—

 
—

 
15

Net cash provided by (used in) investing activities
$
256,991

 
$
(190,566
)
 
$
(37,244
)
 
$
2,580

 
$
(259,676
)
 
$
(227,915
)
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Intercompany financing activity
—

 
(128,908
)
 
(83,357
)
 
(47,411
)
 
259,676

 
—

Borrowings under secured revolving credit facility
—

 
200,000

 
—

 
—

 
—

 
200,000

Payments on secured revolving credit facility
—

 
(145,000
)
 
—

 
(18,965
)
 
—

 
(163,965
)
Payment of debt issuance costs
—

 
(2,119
)
 
—

 
—

 
—

 
(2,119
)
   Dividends paid
(70,914
)
 
—

 
—

 
—

 
—

 
(70,914
)
Repurchases of common stock
(188,762
)
 
—

 
—

 
—

 
—

 
(188,762
)
Withholdings from vesting of restricted stock
(5,753
)
 
—

 
—

 
—

 
—

 
(5,753
)
Proceeds from exercises of stock options
8,438

 
—

 
—

 
—

 
—

 
8,438

Net cash (used in) provided by financing activities
(256,991
)
 
(76,027
)
 
(83,357
)
 
(66,376
)
 
259,676

 
(223,075
)
Effect of exchange rate changes on cash
—

 
—

 
—

 
505

 
—

 
505

Net (decrease) increase in cash and cash equivalents
—

 
(99,593
)
 
(1,787
)
 
(19,484
)
 
—

 
(120,864
)
Cash and cash equivalents, beginning of fiscal year
—

 
229,056

 
11,817

 
58,485

 
—

 
299,358

Cash and cash equivalents, end of fiscal year
$
—

 
$
129,463

 
$
10,030

 
$
39,001

 
$
—

 
$
178,494


CARTER’S, INC.
Condensed Consolidating Statement of Cash Flows
For the fiscal year ended December 31, 2016
(dollars in thousands)
 
Parent
 
Subsidiary Issuer
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Consolidating Adjustments
 
Consolidated
Cash flows provided by operating activities:
$
—

 
$
206,841

 
$
127,018

 
$
35,370

 
$
—

 
$
369,229

 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
—

 
(22,934
)
 
(55,072
)
 
(10,550
)
 
—

 
(88,556
)
Intercompany investing activity
368,307

 
480

 
(2,118
)
 
131

 
(366,800
)
 
—

Disposals and recoveries from property, plant, and equipment
—

 
23

 
—

 
193

 
—

 
216

Net cash provided by (used in) investing activities
$
368,307

 
$
(22,431
)
 
$
(57,190
)
 
$
(10,226
)
 
$
(366,800
)
 
(88,340
)
 
 
 
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
 
 
 
Intercompany financing activity
—

 
(283,907
)
 
(74,681
)
 
(8,212
)
 
366,800

 
—

Dividends paid
(66,355
)
 
—

 
—

 
—

 
—

 
(66,355
)
Repurchases of common stock
(300,445
)
 
—

 
—

 
—

 
—

 
(300,445
)
Income tax benefit from stock-based compensation
—

 
2,782

 
2,018

 
—

 
—

 
4,800

Withholdings from vesting of restricted stock
(8,673
)
 
—

 
—

 
—

 
—

 
(8,673
)
Proceeds from exercises of stock options
7,166

 
—

 
—

 
—

 
—

 
7,166

Net cash (used in) provided by financing activities
(368,307
)
 
(281,125
)
 
(72,663
)
 
(8,212
)
 
366,800

 
(363,507
)
Effect of exchange rate changes on cash
—

 
—

 
—

 
767

 
—

 
767

Net increase (decrease) in cash and cash equivalents
—

 
(96,715
)
 
(2,835
)
 
17,699

 
—

 
(81,851
)
Cash and cash equivalents, beginning of fiscal year
—

 
325,771

 
14,652

 
40,786

 
—

 
381,209

Cash and cash equivalents, end of fiscal year
$
—

 
$
229,056

 
$
11,817

 
$
58,485

 
$
—

 
$
299,358