UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarter ended October 31, 2009
    
    Commission File Number0-19517
 THE BON-TON STORES, INC.
 2801 East Market Street
 York, Pennsylvania 17402
  Incorporated in Pennsylvania
    
    IRS No. 23-2835229
 
 Yes þ No o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller 
reporting company)
 Yes o No þ




---



##### 



PART I: FINANCIAL INFORMATION
 ITEM 1.
    
    FINANCIAL STATEMENTS
 THE BON-TON STORES, INC.
CONSOLIDATED BALANCE SHEETS
 (In thousands except share and per share data)
    
    October 31,
    
    
    January 31,(Unaudited)
    
    2009
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    15,661
    
    
    $
    19,719Merchandise inventories
    
    
    900,669
    
    
    
    666,081Prepaid expenses and other current assets
    
    
    71,716
    
    
    
    113,441Total current assets
    
    
    988,046
    
    
    
    799,241Property, fixtures and equipment at cost, net of accumulated depreciation and amortization
of $578,211 and $498,556 at October 31, 2009 and January 31, 2009, respectively
    
    
    778,132
    
    
    
    832,763Deferred income taxes
    
    
    9,340
    
    
    
    9,994Intangible assets, net of accumulated amortization of $37,282 and $30,611 at October 31, 2009
and January 31, 2009, respectively
    
    
    141,249
    
    
    
    148,171Other long-term assets
    
    
    26,633
    
    
    
    31,152Total assets
    
    $
    1,943,400
    
    
    $
    1,821,321Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    297,717
    
    
    $
    143,423Accrued payroll and benefits
    
    
    34,833
    
    
    
    36,116Accrued expenses
    
    
    151,741
    
    
    
    179,073Current maturities of long-term debt
    
    
    6,396
    
    
    
    6,072Current maturities of obligations under capital leases
    
    
    4,949
    
    
    
    2,730Deferred income taxes
    
    
    10,132
    
    
    
    7,328Income taxes payable
    
    
    184
    
    
    
    62Total current liabilities
    
    
    505,952
    
    
    
    374,804Long-term debt, less current maturities
    
    
    1,149,456
    
    
    
    1,083,449Obligations under capital leases, less current maturities
    
    
    66,703
    
    
    
    65,319Other long-term liabilities
    
    
    165,539
    
    
    
    163,572Total liabilities
    
    
    1,887,650
    
    
    
    1,687,144Contingencies (Note 11)Shareholders equity:Preferred Stock  authorized 5,000,000 shares at $0.01 par value; no shares issued
    
    
    
    
    
    
    Common Stock  authorized 40,000,000 shares at $0.01 par value; issued shares of
15,944,866 and 14,880,173 at October 31, 2009 and January 31, 2009, respectively
    
    
    159
    
    
    
    149Class A Common Stock  authorized 20,000,000 shares at $0.01 par value; issued
and outstanding shares of 2,951,490 at October 31, 2009 and January 31, 2009
    
    
    30
    
    
    
    30Treasury stock, at cost  337,800 shares at October 31, 2009 and January 31, 2009
    
    
    (1,387
    )
    
    
    (1,387
    )Additional paid-in-capital
    
    
    148,052
    
    
    
    144,577Accumulated other comprehensive loss
    
    
    (57,020
    )
    
    
    (59,464
    )(Accumulated deficit) retained earnings
    
    
    (34,084
    )
    
    
    50,272Total shareholders equity
    
    
    55,750
    
    
    
    134,177Total liabilities and shareholders equity
    
    $
    1,943,400
    
    
    $
    1,821,321
   2




---



##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDED(In thousands except share and per share data)
    
    October 31,
    
    
    November 1,
    
    
    October 31,
    
    
    November 1,(Unaudited)
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    703,946
    
    
    $
    724,927
    
    
    $
    1,957,705
    
    
    $
    2,098,559Other income
    
    
    18,667
    
    
    
    22,742
    
    
    
    53,135
    
    
    
    67,030722,613
    
    
    
    747,669
    
    
    
    2,010,840
    
    
    
    2,165,589Costs and expenses:Costs of merchandise sold
    
    
    439,029
    
    
    
    466,791
    
    
    
    1,242,492
    
    
    
    1,361,253Selling, general and administrative
    
    
    234,798
    
    
    
    261,916
    
    
    
    694,548
    
    
    
    764,084Depreciation and amortization
    
    
    28,016
    
    
    
    29,770
    
    
    
    84,810
    
    
    
    88,680Amortization of lease-related interests
    
    
    1,216
    
    
    
    1,220
    
    
    
    3,660
    
    
    
    3,634Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,767Income (loss) from operations
    
    
    19,554
    
    
    
    (12,028
    )
    
    
    (14,670
    )
    
    
    (69,829
    )Interest expense, net
    
    
    23,201
    
    
    
    24,681
    
    
    
    69,321
    
    
    
    73,419Loss before income taxes
    
    
    (3,647
    )
    
    
    (36,709
    )
    
    
    (83,991
    )
    
    
    (143,248
    )Income tax provision (benefit)
    
    
    506
    
    
    
    (22,375
    )
    
    
    365
    
    
    
    (61,025
    )Net loss
    
    $
    (4,153
    )
    
    $
    (14,334
    )
    
    $
    (84,356
    )
    
    $
    (82,223
    )Per share amounts Basic:Net loss
    
    $
    (0.24
    )
    
    $
    (0.85
    )
    
    $
    (4.96
    )
    
    $
    (4.90
    )Basic weighted average shares outstanding
    
    
    17,008,132
    
    
    
    16,805,600
    
    
    
    17,000,824
    
    
    
    16,793,125Diluted:Net loss
    
    $
    (0.24
    )
    
    $
    (0.85
    )
    
    $
    (4.96
    )
    
    $
    (4.90
    )Diluted weighted average shares outstanding
    
    
    17,008,132
    
    
    
    16,805,600
    
    
    
    17,000,824
    
    
    
    16,793,125
   3




---



##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 THIRTY-NINEWEEKS ENDED(In thousands)
    
    October 31,
    
    
    November 1,(Unaudited)
    
    2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (84,356
    )
    
    $
    (82,223
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    84,810
    
    
    
    88,680Amortization of lease-related interests
    
    
    3,660
    
    
    
    3,634Goodwill impairment
    
    
    
    
    
    
    17,767Share-based compensation expense
    
    
    3,485
    
    
    
    4,021Loss on sale of property, fixtures and equipment
    
    
    103
    
    
    
    644Amortization of deferred financing costs
    
    
    3,054
    
    
    
    3,124Amortization of deferred gain on sale of proprietary credit card portfolio
    
    
    (1,810
    )
    
    
    (1,810
    )Deferred income taxes
    
    
    3,458
    
    
    
    (3,522
    )Changes in operating assets and liabilities:Increase in merchandise inventories
    
    
    (234,588
    )
    
    
    (223,887
    )Decrease (increase) in prepaid expenses and other current assets
    
    
    41,726
    
    
    
    (52,074
    )Decrease in other long-term assets
    
    
    1,786
    
    
    
    1,263Increase in accounts payable
    
    
    152,945
    
    
    
    149,440Decrease in accrued payroll and benefits and accrued expenses
    
    
    (24,101
    )
    
    
    (14,668
    )Increase (decrease) in income taxes payable
    
    
    122
    
    
    
    (899
    )Increase in other long-term liabilities
    
    
    7,678
    
    
    
    12,367Net cash used in operating activities
    
    
    (42,028
    )
    
    
    (98,143
    )Cash flows from investing activities:Capital expenditures
    
    
    (22,210
    )
    
    
    (76,639
    )Proceeds from sale of property, fixtures and equipment
    
    
    86
    
    
    
    322Net cash used in investing activities
    
    
    (22,124
    )
    
    
    (76,317
    )Cash flows from financing activities:Payments on long-term debt and capital lease obligations
    
    
    (476,142
    )
    
    
    (458,345
    )Proceeds from issuance of long-term debt
    
    
    539,531
    
    
    
    626,364Cash dividends paid
    
    
    (866
    )
    
    
    (1,882
    )Deferred financing costs paid
    
    
    (322
    )
    
    
    (268
    )(Decrease) increase in bank overdraft balances
    
    
    (2,107
    )
    
    
    4,148Net cash provided by financing activities
    
    
    60,094
    
    
    
    170,017Net decrease in cash and cash equivalents
    
    
    (4,058
    )
    
    
    (4,443
    )Cash and cash equivalents at beginning of period
    
    
    19,719
    
    
    
    21,238Cash and cash equivalents at end of period
    
    $
    15,661
    
    
    $
    16,795
   4




---



##### 



THE BON-TON STORES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY
 AccumulatedOther
    
    
    (AccumulatedClass A
    
    
    
    
    
    
    Additional
    
    
    Compre-
    
    
    Deficit)(In thousands)
    
    Common
    
    
    Common
    
    
    Treasury
    
    
    Paid-in
    
    
    hensive
    
    
    Retained(Unaudited)
    
    Stock
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Loss
    
    
    Earnings
    
    
    TotalBALANCE AT JANUARY 31, 2009
    
    $
    149
    
    
    $
    30
    
    
    $
    (1,387
    )
    
    $
    144,577
    
    
    $
    (59,464
    )
    
    $
    50,272
    
    
    $
    134,177Comprehensive loss (Note 12):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84,356
    )
    
    
    (84,356
    )Pension and postretirement benefit plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,589
    
    
    
    
    
    
    
    3,589Change in fair value of cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,145
    )
    
    
    
    
    
    
    (1,145
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (81,912
    )Share-based compensation expense
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    3,475
    
    
    
    
    
    
    
    
    
    
    
    3,485BALANCE AT OCTOBER 31, 2009
    
    $
    159
    
    
    $
    30
    
    
    $
    (1,387
    )
    
    $
    148,052
    
    
    $
    (57,020
    )
    
    $
    (34,084
    )
    
    $
    55,750
   5




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 1. BASIS OF PRESENTATION
   Subsequent Events
   Recently Issued Accounting Standards
 Fair Value
Measurements and Disclosures (Topic 820)  Measuring Liabilities at Fair Value Fair Value Measurements and Disclosures 
Overall
  6




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 Generally Accepted
Accounting Principles
 Compensation  Retirement Benefits  Defined Benefit Plans
 2. PER-SHARE AMOUNTS
 Earnings Per Share
    7




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 3. FAIR VALUE OF FINANCIAL INSTRUMENTS
 Fair Value Measurements and Disclosures
    SignificantQuoted Prices
    
    
    Other
    
    
    Significantin Active
    
    
    Observable
    
    
    UnobservableTotal Carrying
    
    
    Markets
    
    
    Inputs
    
    
    InputsValue
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)October 31, 2009
    
    $
    6,853
    
    
    $
    
    
    
    $
    6,853
    
    
    $
    January 31, 2009
    
    $
    5,708
    
    
    $
    
    
    
    $
    5,708
    
    
    $
    
 Financial Instruments
   8




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 4. INTEREST RATE DERIVATIVES
 Derivatives and Hedging
 .
    Interest rate swaps (notional amount)
    
    $
    100,000Range of fixed pay rates
    
    
    5.48% - 5.49
    %
  9




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
  Balance Sheet Location
    
    Derivative Assets
    
    
    Derivative LiabilitiesOther Long-Term Liabilities
    
    $
    
    
    
    $
    6,853
  Location of
    
    Amount of
    
    
    Location of
    
    Amount ofLoss
    
    Loss
    
    
    Loss
    
    LossAmount of
    
    
    Reclassified
    
    Reclassified
    
    
    Recognized
    
    RecognizedLoss
    
    
    from AOCI to
    
    from AOCI to
    
    
    in the
    
    in theRecognized
    
    
    the Statement of
    
    the Statement of
    
    
    Statement of
    
    Statement ofin OCI
    
    
    Operations
    
    Operations
    
    
    Operations
    
    Operations(effective
    
    
    (effective
    
    (effective
    
    
    (ineffective
    
    (ineffectiveportion)
    
    
    portion)
    
    portion)
    
    
    portion)
    
    portion)Third Quarter of 2009
    
    $
    1,515
    
    
    Interest Expense, Net
    
    $
    1,270
    
    
    Interest Expense, Net
    
    $
    39 Weeks Ended October 31, 2009
    
    $
    4,641
    
    
    Interest Expense, Net
    
    $
    3,496
    
    
    InterestExpense, Net
    
    $
    
  5. SUPPLEMENTAL BALANCE SHEET INFORMATION
  October 31,
    
    
    January 31,2009
    
    
    2009Prepaid expenses
    
    $
    40,353
    
    
    $
    32,822Other receivables
    
    
    30,101
    
    
    
    49,473Income tax receivables
    
    
    1,262
    
    
    
    31,146Total
    
    $
    71,716
    
    
    $
    113,441
  10




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 6. SUPPLEMENTAL CASH FLOW INFORMATION
  THIRTY-NINEWEEKS ENDEDOctober 31,
    
    
    November 1,2009
    
    
    2008Cash paid for:Interest, net of amounts capitalized
    
    $
    79,452
    
    
    $
    82,134Income taxes, net of refunds received
    
    
    (32,088
    )
    
    
    5,516Non-cash investing activities:Decrease in accrued property, fixtures and equipment
included in accounts payable and accrued expenses
    
    $
    (194
    )
    
    $
    (4,087
    )Assets acquired under capital leases
    
    
    6,546
    
    
    
    
 7. EXIT OR DISPOSAL ACTIVITIES
  Termination
    
    
    OtherBenefits
    
    
    Costs
    
    
    TotalBalance as of January 31, 2009
    
    $
    2,324
    
    
    $
    70
    
    
    $
    2,394Provisions:Thirteen weeks ended May 2, 2009
    
    
    1,641
    
    
    
    
    
    
    
    1,641Thirteen weeks ended August 1, 2009
    
    
    294
    
    
    
    
    
    
    
    294Thirteen weeks ended October 31, 2009
    
    
    874
    
    
    
    104
    
    
    
    978Payments:Thirteen weeks ended May 2, 2009
    
    
    (3,845
    )
    
    
    
    
    
    
    (3,845
    )Thirteen weeks ended August 1, 2009
    
    
    (283
    )
    
    
    (70
    )
    
    
    (353
    )Thirteen weeks ended October 31, 2009
    
    
    (928
    )
    
    
    (35
    )
    
    
    (963
    )Balance as of October 31, 2009
    
    $
    77
    
    
    $
    69
    
    
    $
    146
    11




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 8. EMPLOYEE DEFINED AND POSTRETIREMENT BENEFIT PLANS
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDEDOctober 31,
    
    
    November 1,
    
    
    October 31,
    
    
    November 1,2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    
    
    
    $
    38
    
    
    $
    
    
    
    $
    116Interest cost
    
    
    2,822
    
    
    
    2,935
    
    
    
    8,464
    
    
    
    8,805Expected return on plan assets
    
    
    (1,764
    )
    
    
    (3,076
    )
    
    
    (5,294
    )
    
    
    (9,227
    )Recognition of prior service cost
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    3Recognition of net actuarial loss
    
    
    1,219
    
    
    
    127
    
    
    
    3,657
    
    
    
    379Net periodic benefit expense
    
    $
    2,277
    
    
    $
    25
    
    
    $
    6,827
    
    
    $
    76
   9. INCOME TAXES
 Income Taxes
   12




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
   10. GOODWILL IMPAIRMENT
 Intangibles  Goodwill and Other  Goodwill
 11. CONTINGENCIES
   12. COMPREHENSIVE LOSS
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDEDOctober 31,
    
    
    November 1,
    
    
    October 31,
    
    
    November 1,2009
    
    
    2008
    
    
    2009
    
    
    2008Net loss
    
    $
    (4,153
    )
    
    $
    (14,334
    )
    
    $
    (84,356
    )
    
    $
    (82,223
    )Other comprehensive income (loss):Amortization of pension and
postretirement benefit plans
    
    
    1,196
    
    
    
    79
    
    
    
    3,589
    
    
    
    238Cash flow hedge derivative (loss) income
    
    
    (245
    )
    
    
    679
    
    
    
    (1,145
    )
    
    
    2,220Comprehensive loss
    
    $
    (3,202
    )
    
    $
    (13,576
    )
    
    $
    (81,912
    )
    
    $
    (79,765
    )
  13




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
  13. GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
    14




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
October 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    8,076
    
    
    $
    7,584
    
    
    $
    
    
    
    $
    
    
    
    $
    15,661Merchandise inventories
    
    
    
    
    
    
    470,532
    
    
    
    430,137
    
    
    
    
    
    
    
    
    
    
    
    900,669Prepaid expenses and other current assets
    
    
    
    
    
    
    58,088
    
    
    
    11,799
    
    
    
    2,435
    
    
    
    (606
    )
    
    
    71,716Total current assets
    
    
    1
    
    
    
    536,696
    
    
    
    449,520
    
    
    
    2,435
    
    
    
    (606
    )
    
    
    988,046Property, fixtures and equipment at cost, net
    
    
    
    
    
    
    236,884
    
    
    
    248,554
    
    
    
    292,694
    
    
    
    
    
    
    
    778,132Deferred income taxes
    
    
    
    
    
    
    1,531
    
    
    
    7,809
    
    
    
    
    
    
    
    
    
    
    
    9,340Intangible assets, net
    
    
    
    
    
    
    60,490
    
    
    
    80,759
    
    
    
    
    
    
    
    
    
    
    
    141,249Investment in and advances to (from) affiliates
    
    
    55,749
    
    
    
    614,992
    
    
    
    (23,415
    )
    
    
    316
    
    
    
    (647,642
    )
    
    
    Other long-term assets
    
    
    
    
    
    
    17,878
    
    
    
    4,223
    
    
    
    4,532
    
    
    
    
    
    
    
    26,633Total assets
    
    $
    55,750
    
    
    $
    1,468,471
    
    
    $
    767,450
    
    
    $
    299,977
    
    
    $
    (648,248
    )
    
    $
    1,943,400Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    297,717
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    297,717Accrued payroll and benefits
    
    
    
    
    
    
    24,429
    
    
    
    10,404
    
    
    
    
    
    
    
    
    
    
    
    34,833Accrued expenses
    
    
    
    
    
    
    71,698
    
    
    
    79,259
    
    
    
    1,390
    
    
    
    (606
    )
    
    
    151,741Current maturities of long-term debt and obligations
under capital leases
    
    
    
    
    
    
    2,585
    
    
    
    2,364
    
    
    
    6,396
    
    
    
    
    
    
    
    11,345Deferred income taxes
    
    
    
    
    
    
    2,174
    
    
    
    7,958
    
    
    
    
    
    
    
    
    
    
    
    10,132Income taxes payable
    
    
    
    
    
    
    110
    
    
    
    74
    
    
    
    
    
    
    
    
    
    
    
    184Total current liabilities
    
    
    
    
    
    
    398,713
    
    
    
    100,059
    
    
    
    7,786
    
    
    
    (606
    )
    
    
    505,952Long-term debt and obligations under capital leases,
less current maturities
    
    
    
    
    
    
    913,071
    
    
    
    55,569
    
    
    
    247,519
    
    
    
    
    
    
    
    1,216,159Other long-term liabilities
    
    
    
    
    
    
    123,435
    
    
    
    40,848
    
    
    
    1,256
    
    
    
    
    
    
    
    165,539Total liabilities
    
    
    
    
    
    
    1,435,219
    
    
    
    196,476
    
    
    
    256,561
    
    
    
    (606
    )
    
    
    1,887,650Shareholders equity
    
    
    55,750
    
    
    
    33,252
    
    
    
    570,974
    
    
    
    43,416
    
    
    
    (647,642
    )
    
    
    55,750Total liabilities and shareholders equity
    
    $
    55,750
    
    
    $
    1,468,471
    
    
    $
    767,450
    
    
    $
    299,977
    
    
    $
    (648,248
    )
    
    $
    1,943,400
  15




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Balance Sheet
January 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedAssetsCurrent assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    10,769
    
    
    $
    8,949
    
    
    $
    
    
    
    $
    
    
    
    $
    19,719Merchandise inventories
    
    
    
    
    
    
    329,808
    
    
    
    336,273
    
    
    
    
    
    
    
    
    
    
    
    666,081Prepaid expenses and other current assets
    
    
    
    
    
    
    91,644
    
    
    
    21,797
    
    
    
    606
    
    
    
    (606
    )
    
    
    113,441Total current assets
    
    
    1
    
    
    
    432,221
    
    
    
    367,019
    
    
    
    606
    
    
    
    (606
    )
    
    
    799,241Property, fixtures and equipment at cost, net
    
    
    
    
    
    
    261,922
    
    
    
    269,357
    
    
    
    301,484
    
    
    
    
    
    
    
    832,763Deferred income taxes
    
    
    
    
    
    
    5,214
    
    
    
    4,780
    
    
    
    
    
    
    
    
    
    
    
    9,994Intangible assets, net
    
    
    
    
    
    
    63,981
    
    
    
    84,190
    
    
    
    
    
    
    
    
    
    
    
    148,171Investment in and advances to (from) affiliates
    
    
    135,042
    
    
    
    558,968
    
    
    
    58,476
    
    
    
    317
    
    
    
    (752,803
    )
    
    
    Other long-term assets
    
    
    
    
    
    
    19,729
    
    
    
    6,714
    
    
    
    4,709
    
    
    
    
    
    
    
    31,152Total assets
    
    $
    135,043
    
    
    $
    1,342,035
    
    
    $
    790,536
    
    
    $
    307,116
    
    
    $
    (753,409
    )
    
    $
    1,821,321Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    
    
    
    $
    143,423
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    143,423Accrued payroll and benefits
    
    
    
    
    
    
    24,676
    
    
    
    11,440
    
    
    
    
    
    
    
    
    
    
    
    36,116Accrued expenses
    
    
    866
    
    
    
    93,342
    
    
    
    84,921
    
    
    
    1,416
    
    
    
    (1,472
    )
    
    
    179,073Current maturities of long-term debt and obligations
under capital leases
    
    
    
    
    
    
    495
    
    
    
    2,236
    
    
    
    6,071
    
    
    
    
    
    
    
    8,802Deferred income taxes
    
    
    
    
    
    
    2,548
    
    
    
    4,780
    
    
    
    
    
    
    
    
    
    
    
    7,328Income taxes payable
    
    
    
    
    
    
    16
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    62Total current liabilities
    
    
    866
    
    
    
    264,500
    
    
    
    103,423
    
    
    
    7,487
    
    
    
    (1,472
    )
    
    
    374,804Long-term debt and obligations under capital leases,
less current maturities
    
    
    
    
    
    
    839,020
    
    
    
    57,358
    
    
    
    252,390
    
    
    
    
    
    
    
    1,148,768Other long-term liabilities
    
    
    
    
    
    
    123,351
    
    
    
    39,032
    
    
    
    1,189
    
    
    
    
    
    
    
    163,572Total liabilities
    
    
    866
    
    
    
    1,226,871
    
    
    
    199,813
    
    
    
    261,066
    
    
    
    (1,472
    )
    
    
    1,687,144Shareholders equity
    
    
    134,177
    
    
    
    115,164
    
    
    
    590,723
    
    
    
    46,050
    
    
    
    (751,937
    )
    
    
    134,177Total liabilities and shareholders equity
    
    $
    135,043
    
    
    $
    1,342,035
    
    
    $
    790,536
    
    
    $
    307,116
    
    
    $
    (753,409
    )
    
    $
    1,821,321
  16




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirteen Weeks Ended October 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    307,443
    
    
    $
    396,503
    
    
    $
    
    
    
    $
    
    
    
    $
    703,946Other income
    
    
    
    
    
    
    7,780
    
    
    
    10,887
    
    
    
    
    
    
    
    
    
    
    
    18,667
    
    
    
    315,223
    
    
    
    407,390
    
    
    
    
    
    
    
    
    
    
    
    722,613Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    192,046
    
    
    
    246,983
    
    
    
    
    
    
    
    
    
    
    
    439,029Selling, general and administrative
    
    
    
    
    
    
    106,786
    
    
    
    136,826
    
    
    
    22
    
    
    
    (8,836
    )
    
    
    234,798Depreciation and amortization
    
    
    
    
    
    
    11,222
    
    
    
    13,924
    
    
    
    2,870
    
    
    
    
    
    
    
    28,016Amortization of lease-related interests
    
    
    
    
    
    
    698
    
    
    
    518
    
    
    
    
    
    
    
    
    
    
    
    1,216Income (loss) from operations
    
    
    
    
    
    
    4,471
    
    
    
    9,139
    
    
    
    (2,892
    )
    
    
    8,836
    
    
    
    19,554Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,793
    
    
    
    7,043
    
    
    
    (8,836
    )
    
    
    Equity in (losses) earnings of subsidiaries
    
    
    (3,647
    )
    
    
    9,725
    
    
    
    
    
    
    
    
    
    
    
    (6,078
    )
    
    
    Interest expense, net
    
    
    
    
    
    
    (17,843
    )
    
    
    (1,187
    )
    
    
    (4,171
    )
    
    
    
    
    
    
    (23,201
    )(Loss) income before income taxes
    
    
    (3,647
    )
    
    
    (3,647
    )
    
    
    9,745
    
    
    
    (20
    )
    
    
    (6,078
    )
    
    
    (3,647
    )Income tax provision
    
    
    506
    
    
    
    506
    
    
    
    153
    
    
    
    
    
    
    
    (659
    )
    
    
    506Net (loss) income
    
    $
    (4,153
    )
    
    $
    (4,153
    )
    
    $
    9,592
    
    
    $
    (20
    )
    
    $
    (5,419
    )
    
    $
    (4,153
    )
  17




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirteen Weeks Ended November 1, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    312,593
    
    
    $
    412,334
    
    
    $
    
    
    
    $
    
    
    
    $
    724,927Other income
    
    
    
    
    
    
    9,399
    
    
    
    13,343
    
    
    
    
    
    
    
    
    
    
    
    22,742
    
    
    
    321,992
    
    
    
    425,677
    
    
    
    
    
    
    
    
    
    
    
    747,669Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    203,747
    
    
    
    263,044
    
    
    
    
    
    
    
    
    
    
    
    466,791Selling, general and administrative
    
    
    
    
    
    
    120,760
    
    
    
    149,975
    
    
    
    21
    
    
    
    (8,840
    )
    
    
    261,916Depreciation and amortization
    
    
    
    
    
    
    14,270
    
    
    
    12,563
    
    
    
    2,937
    
    
    
    
    
    
    
    29,770Amortization of lease-related interests
    
    
    
    
    
    
    750
    
    
    
    470
    
    
    
    
    
    
    
    
    
    
    
    1,220Loss from operations
    
    
    
    
    
    
    (17,535
    )
    
    
    (375
    )
    
    
    (2,958
    )
    
    
    8,840
    
    
    
    (12,028
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    1,797
    
    
    
    7,043
    
    
    
    (8,840
    )
    
    
    Equity in losses of subsidiaries
    
    
    (36,709
    )
    
    
    (627
    )
    
    
    
    
    
    
    
    
    
    
    37,336
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (18,547
    )
    
    
    (1,863
    )
    
    
    (4,271
    )
    
    
    
    
    
    
    (24,681
    )Loss before income taxes
    
    
    (36,709
    )
    
    
    (36,709
    )
    
    
    (441
    )
    
    
    (186
    )
    
    
    37,336
    
    
    
    (36,709
    )Income tax benefit
    
    
    (22,375
    )
    
    
    (22,375
    )
    
    
    (5,799
    )
    
    
    
    
    
    
    28,174
    
    
    
    (22,375
    )Net (loss) income
    
    $
    (14,334
    )
    
    $
    (14,334
    )
    
    $
    5,358
    
    
    $
    (186
    )
    
    $
    9,162
    
    
    $
    (14,334
    )
  18




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirty-Nine Weeks Ended October 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    848,178
    
    
    $
    1,109,527
    
    
    $
    
    
    
    $
    
    
    
    $
    1,957,705Other income
    
    
    
    
    
    
    25,257
    
    
    
    27,878
    
    
    
    
    
    
    
    
    
    
    
    53,135
    
    
    
    873,435
    
    
    
    1,137,405
    
    
    
    
    
    
    
    
    
    
    
    2,010,840Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    539,241
    
    
    
    703,251
    
    
    
    
    
    
    
    
    
    
    
    1,242,492Selling, general and administrative
    
    
    
    
    
    
    315,885
    
    
    
    404,886
    
    
    
    67
    
    
    
    (26,290
    )
    
    
    694,548Depreciation and amortization
    
    
    
    
    
    
    34,011
    
    
    
    42,009
    
    
    
    8,790
    
    
    
    
    
    
    
    84,810Amortization of lease-related interests
    
    
    
    
    
    
    2,106
    
    
    
    1,554
    
    
    
    
    
    
    
    
    
    
    
    3,660Loss from operations
    
    
    
    
    
    
    (17,808
    )
    
    
    (14,295
    )
    
    
    (8,857
    )
    
    
    26,290
    
    
    
    (14,670
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    4,944
    
    
    
    21,346
    
    
    
    (26,290
    )
    
    
    Equity in losses of subsidiaries
    
    
    (83,991
    )
    
    
    (12,874
    )
    
    
    
    
    
    
    
    
    
    
    96,865
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (53,309
    )
    
    
    (3,422
    )
    
    
    (12,590
    )
    
    
    
    
    
    
    (69,321
    )Loss before income taxes
    
    
    (83,991
    )
    
    
    (83,991
    )
    
    
    (12,773
    )
    
    
    (101
    )
    
    
    96,865
    
    
    
    (83,991
    )Income tax provision
    
    
    365
    
    
    
    365
    
    
    
    965
    
    
    
    
    
    
    
    (1,330
    )
    
    
    365Net loss
    
    $
    (84,356
    )
    
    $
    (84,356
    )
    
    $
    (13,738
    )
    
    $
    (101
    )
    
    $
    98,195
    
    
    $
    (84,356
    )
  19




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Operations
Thirty-Nine Weeks Ended November 1, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    
    
    
    $
    897,209
    
    
    $
    1,201,350
    
    
    $
    
    
    
    $
    
    
    
    $
    2,098,559Other income
    
    
    
    
    
    
    28,478
    
    
    
    38,552
    
    
    
    
    
    
    
    
    
    
    
    67,030
    
    
    
    925,687
    
    
    
    1,239,902
    
    
    
    
    
    
    
    
    
    
    
    2,165,589Costs and expenses:Costs of merchandise sold
    
    
    
    
    
    
    584,596
    
    
    
    776,657
    
    
    
    
    
    
    
    
    
    
    
    1,361,253Selling, general and administrative
    
    
    
    
    
    
    350,888
    
    
    
    439,690
    
    
    
    62
    
    
    
    (26,556
    )
    
    
    764,084Depreciation and amortization
    
    
    
    
    
    
    41,518
    
    
    
    38,351
    
    
    
    8,811
    
    
    
    
    
    
    
    88,680Amortization of lease-related interests
    
    
    
    
    
    
    2,255
    
    
    
    1,379
    
    
    
    
    
    
    
    
    
    
    
    3,634Goodwill impairment
    
    
    
    
    
    
    8,488
    
    
    
    9,279
    
    
    
    
    
    
    
    
    
    
    
    17,767Loss from operations
    
    
    
    
    
    
    (62,058
    )
    
    
    (25,454
    )
    
    
    (8,873
    )
    
    
    26,556
    
    
    
    (69,829
    )Other income (expense):Intercompany rental and royalty income
    
    
    
    
    
    
    
    
    
    
    5,283
    
    
    
    21,273
    
    
    
    (26,556
    )
    
    
    Equity in losses of subsidiaries
    
    
    (143,248
    )
    
    
    (26,762
    )
    
    
    
    
    
    
    
    
    
    
    170,010
    
    
    
    Interest expense, net
    
    
    
    
    
    
    (54,428
    )
    
    
    (6,104
    )
    
    
    (12,887
    )
    
    
    
    
    
    
    (73,419
    )Loss before income taxes
    
    
    (143,248
    )
    
    
    (143,248
    )
    
    
    (26,275
    )
    
    
    (487
    )
    
    
    170,010
    
    
    
    (143,248
    )Income tax benefit
    
    
    (61,025
    )
    
    
    (61,025
    )
    
    
    (16,773
    )
    
    
    
    
    
    
    77,798
    
    
    
    (61,025
    )Net loss
    
    $
    (82,223
    )
    
    $
    (82,223
    )
    
    $
    (9,502
    )
    
    $
    (487
    )
    
    $
    92,212
    
    
    $
    (82,223
    )
  20




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Thirty-Nine Weeks Ended October 31, 2009
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:
    
    $
    866
    
    
    $
    (51,174
    )
    
    $
    12,323
    
    
    $
    7,079
    
    
    $
    (11,122
    )
    
    $
    (42,028
    )Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (16,131
    )
    
    
    (6,079
    )
    
    
    
    
    
    
    
    
    
    
    (22,210
    )Intercompany Investing activity
    
    
    
    
    
    
    (1,713
    )
    
    
    
    
    
    
    
    
    
    
    1,713
    
    
    
    Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    24
    
    
    
    62
    
    
    
    
    
    
    
    
    
    
    
    86Net cash used in investing activities
    
    
    
    
    
    
    (17,820
    )
    
    
    (6,017
    )
    
    
    
    
    
    
    1,713
    
    
    
    (22,124
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (469,935
    )
    
    
    (1,661
    )
    
    
    (4,546
    )
    
    
    
    
    
    
    (476,142
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    539,531
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    539,531Intercompany financing activity
    
    
    
    
    
    
    (866
    )
    
    
    (6,010
    )
    
    
    (2,533
    )
    
    
    9,409
    
    
    
    Cash dividends paid
    
    
    (866
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (866
    )Deferred financing costs paid
    
    
    
    
    
    
    (322
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (322
    )Decrease in bank overdraft balances
    
    
    
    
    
    
    (2,107
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,107
    )Net cash (used in) provided by financing activities
    
    
    (866
    )
    
    
    66,301
    
    
    
    (7,671
    )
    
    
    (7,079
    )
    
    
    9,409
    
    
    
    60,094Net decrease in cash and cash
equivalents
    
    
    
    
    
    
    (2,693
    )
    
    
    (1,365
    )
    
    
    
    
    
    
    
    
    
    
    (4,058
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    10,769
    
    
    
    8,949
    
    
    
    
    
    
    
    
    
    
    
    19,719Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    8,076
    
    
    $
    7,584
    
    
    $
    
    
    
    $
    
    
    
    $
    15,661
  21




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
 The Bon-Ton Stores, Inc.
Condensed Consolidating Statement of Cash Flows
Thirty-Nine Weeks Ended November 1, 2008
 Bon-Ton(Parent
    
    
    
    
    
    
    Guarantor
    
    
    Non-Guarantor
    
    
    Consolidating
    
    
    CompanyCompany)
    
    
    Issuer
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:
    
    $
    1,882
    
    
    $
    (131,173
    )
    
    $
    36,104
    
    
    $
    7,693
    
    
    $
    (12,649
    )
    
    $
    (98,143
    )Cash flows from investing activities:Capital expenditures
    
    
    
    
    
    
    (44,982
    )
    
    
    (31,657
    )
    
    
    
    
    
    
    
    
    
    
    (76,639
    )Proceeds from sale of property, fixtures
and equipment
    
    
    
    
    
    
    251
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    322Net cash used in investing activities
    
    
    
    
    
    
    (44,731
    )
    
    
    (31,586
    )
    
    
    
    
    
    
    
    
    
    
    (76,317
    )Cash flows from financing activities:Payments on long-term debt and capital
lease obligations
    
    
    
    
    
    
    (453,310
    )
    
    
    (1,265
    )
    
    
    (3,770
    )
    
    
    
    
    
    
    (458,345
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    626,364
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    626,364Intercompany financing activity
    
    
    
    
    
    
    (1,882
    )
    
    
    (6,850
    )
    
    
    (3,917
    )
    
    
    12,649
    
    
    
    Cash dividends paid
    
    
    (1,882
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,882
    )Deferred financing costs paid
    
    
    
    
    
    
    (262
    )
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (268
    )Increase in bank overdraft balances
    
    
    
    
    
    
    4,148
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,148Net cash (used in) provided by financing activities
    
    
    (1,882
    )
    
    
    175,058
    
    
    
    (8,115
    )
    
    
    (7,693
    )
    
    
    12,649
    
    
    
    170,017Net decrease in cash and cash
equivalents
    
    
    
    
    
    
    (846
    )
    
    
    (3,597
    )
    
    
    
    
    
    
    
    
    
    
    (4,443
    )Cash and cash equivalents at beginning
of period
    
    
    1
    
    
    
    9,604
    
    
    
    11,633
    
    
    
    
    
    
    
    
    
    
    
    21,238Cash and cash equivalents at end of period
    
    $
    1
    
    
    $
    8,758
    
    
    $
    8,036
    
    
    $
    
    
    
    $
    
    
    
    $
    16,795
 14. THIRD AMENDMENT TO THE CREDIT CARD PROGRAM AGREEMENT
  15. SUBSEQUENT EVENTS
 The Worker, Homeownership, and Business Assistance Act of 2009
  22




---



##### 



THE BON-TON STORES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands except share data)
          23




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  Overview
    
    
    a comparable store sales decrease in the range of 5.0% to 6.5%;
 
    
    a gross margin rate of 36.5%;
 
    
    a reduction of approximately $70.0 million to $75.0 million in our selling, general and
administrative (SG&A) expenses; and
 
    
    an effective tax rate of 0% (exclusive of the potential favorable impact in
the fourth quarter of 2009 of recently enacted income tax legislation as discussed in Note
15 in the Notes to Consolidated Financial Statements).
   24




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  Results of Operations
  THIRTEEN
    
    
    THIRTY-NINEWEEKS ENDED
    
    
    WEEKS ENDEDOctober 31,
    
    
    November 1,
    
    
    October 31,
    
    
    November 1,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Other income
    
    
    2.7
    
    
    
    3.1
    
    
    
    2.7
    
    
    
    3.2102.7
    
    
    
    103.1
    
    
    
    102.7
    
    
    
    103.2Costs and expenses:Costs of merchandise sold
    
    
    62.4
    
    
    
    64.4
    
    
    
    63.5
    
    
    
    64.9Selling, general and administrative
    
    
    33.4
    
    
    
    36.1
    
    
    
    35.5
    
    
    
    36.4Depreciation and amortization
    
    
    4.0
    
    
    
    4.1
    
    
    
    4.3
    
    
    
    4.2Amortization of lease-related interests
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2
    
    
    
    0.2Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.8Income (loss) from operations
    
    
    2.8
    
    
    
    (1.7
    )
    
    
    (0.7
    )
    
    
    (3.3
    )Interest expense, net
    
    
    3.3
    
    
    
    3.4
    
    
    
    3.5
    
    
    
    3.5Loss before income taxes
    
    
    (0.5
    )
    
    
    (5.1
    )
    
    
    (4.3
    )
    
    
    (6.8
    )Income tax provision (benefit)
    
    
    0.1
    
    
    
    (3.1
    )
    
    
    
    
    
    
    (2.9
    )Net loss
    
    
    (0.6
    )%
    
    
    (2.0
    )%
    
    
    (4.3
    )%
    
    
    (3.9
    )%
 Third Quarter of 2009 Compared with Third Quarter of 2008
 Net sales
   25




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  Other income
 Costs and expenses
   Income (loss) from operations
 Interest expense, net
 Income tax provision (benefit
 Net loss
  26




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 2009 Compared with 2008
 Net sales
   Other income
 Costs and expenses
    Loss from operations
  27




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 Interest expense, net
 Income tax provision (benefit)
 Net loss
 Seasonality
   Liquidity and Capital Resources
    28




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  October 31,
    
    
    November 1,(Dollars in millions)
    
    2009
    
    
    2008Working capital
    
    $
    482.1
    
    
    $
    555.0Current ratio
    
    
    1.95:1
    
    
    
    1.96:1Debt to total capitalization (1)
    
    
    0.96:1
    
    
    
    0.82:1Unused availability under lines of credit (2)
    
    $
    245.6
    
    
    $
    213.7
 (1)
    
    Debt includes obligations under capital leases. Total capitalization includes
shareholders equity, debt and obligations under capital leases.(2)
    
    Subject to a minimum borrowing availability covenant of $75.         29




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
     THIRTY-NINEWEEKS ENDEDOctober 31,
    
    
    November 1,(Dollars in millions)
    
    2009
    
    
    2008Operating activities
    
    $
    (42.0
    )
    
    $
    (98.1
    )Investing activities
    
    
    (22.1
    )
    
    
    (76.3
    )Financing activities
    
    
    60.1
    
    
    
    170.0
    30




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
   Critical Accounting Policies
   Inventory Valuation
    31




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
   Vendor Allowances
   Income Taxes
   32




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
     Long-lived Assets
   33




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  
    
    Significant underperformance of stores relative to historical or projected future
operating results,
    
    Significant changes in the manner of our use of assets or overall business
strategy, and
    
    Significant negative industry or economic trends for a sustained period.
   Intangible Assets
   Insurance Reserve Estimates
  Pension and Supplementary Retirement Plans
   34




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
    Recently Issued Accounting Standards
 Fair Value Measurements and Disclosures (Topic 820)  Measuring Liabilities at
Fair Value Fair Value Measurements and Disclosures  Overall
 Generally Accepted
Accounting Principles
  35




---



##### 



THE BON-TON STORES, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 Compensation  Retirement Benefits  Defined Benefit Plans
 Forward-Looking Statements
   36




---



##### 



THE BON-TON STORES, INC.
 ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Market Risk and Financial Instruments
  ITEM 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
   37




---



##### 



THE BON-TON STORES, INC.
 PART II:
    
    OTHER INFORMATION
 ITEM 6.
    
    EXHIBITS
  Exhibit
    
    Description
    
    Document Location10.1
    
    Third Amendment to the Credit Card
Program Agreement
    
    Incorporated by
reference to Exhibit
10.1 to the Current
Report on Form 8-K
filed on August 10,
200910.2
    
    Second Lien Loan and Security Agreement
    
    Incorporated by
reference to Exhibit
10.1 to the Current
Report on Form 8-K
filed on November
24, 2009 (11/24/09
Form 8-K)10.3
    
    Intercreditor Agreement
    
    Incorporated by
reference to Exhibit
10.2 to the 11/24/09
Form 8-K10.4
    
    Amendment No. 2 to Loan and Security
Agreement
    
    Incorporated by
reference to Exhibit
10.3 to the 11/24/09
Form 8-K10.5
    
    Amended and Restated Loan and Security
Agreement
    
    Incorporated by
reference to Exhibit
10.1 to the Current
Report on Form 8-K
filed on December 9,
200931.1
    
    Certification of Byron L. Bergren
    
    Filed herewith.31.2
    
    Certification of Keith E. Plowman
    
    Filed herewith.32.1
    
    Certification Pursuant to Rules
13a-14(b) and 15d-14(b) of the
Securities Exchange Act of 1934
    
    Furnished herewith.
  38




---



##### 



THE BON-TON STORES, INC.
 SIGNATURES
  THE BON-TON STORES, INC.DATE: December 10, 2009
    BY:
    /s/  Byron L. BergrenByron L. BergrenPresident and
Chief Executive OfficerDATE: December 10, 2009
    BY:
    /s/  Keith E. PlowmanKeith E. PlowmanExecutive Vice President,
Chief Financial Officer and
Principal Accounting Officer  39