ARC DOCUMENT SOLUTIONS, INC. - FORM 10-Q - XML - IDEA: XBRL DOCUMENT - November 7, 2011

11. Condensed Consolidating Financial Statements

The Notes are fully and unconditionally guaranteed, on a joint and several basis, by all of the Company’s domestic subsidiaries (the “Guarantor Subsidiaries”). The Company’s foreign subsidiaries have not guaranteed the Notes (the “Non-Guarantor Subsidiaries”). Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly, by the Company. There are no significant restrictions on the ability of the Company to obtain funds from any of the Guarantor Subsidiaries by dividends or loan. In lieu of providing separate audited financial statements for the Guarantor Subsidiaries, condensed consolidating financial information is presented below.

Condensed Consolidating Balance Sheet
September 30, 2011

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Assets
Current assets:
Cash and cash equivalents		$	—			$	14,331			$	11,623			$	—			$	25,954
Accounts receivable, net			—				53,564				7,392				—				60,956
Intercompany operations			295				4,461				(4,756	)			—				—
Inventories, net			—				7,841				3,039				—				10,880
Prepaid expenses			13				3,073				1,503				—				4,589
Other current assets			—				18,529				1,080				—				19,609
Total current assets			308				101,799				19,881				—				121,988
Property and equipment, net			—				48,077				7,330				—				55,407
Goodwill			—				229,315				—				—				229,315
Investment in subsidiaries			151,207				12,604				—				(163,811	)			—
Other intangible assets, net			—				47,245				2,456				—				49,701
Deferred financing costs, net			4,561				—				—				—				4,561
Deferred income taxes			—				—				1,347				—				1,347
Other assets			—				1,864				256				—				2,120
Total assets		$	156,076			$	440,904			$	31,270			$	(163,811	)		$	464,439
Liabilities and Equity
Current liabilities:
Accounts payable		$	—			$	20,458			$	2,473			$	—			$	22,931
Accrued payroll and payroll-related expenses			—				9,397				362				—				9,759
Accrued expenses			6,184				16,265				2,534				—				24,983
Intercompany loans			(188,751	)			186,975				1,776				—				—
Current portion of long-term debt and capital leases			9,800				14,954				1,894				—				26,648
Total current liabilities			(172,767	)			248,049				9,039				—				84,321
Long-term debt and capital leases			196,101				14,233				1,620				—				211,954
Deferred income taxes			—				26,070				—								26,070
Other long-term liabilities			—				1,345				1,728				—				3,073
Total liabilities			23,334				289,697				12,387				—				325,418
Commitments and contingencies
Total equity			132,742				151,207				18,883				(163,811	)			139,021
Total liabilities and equity		$	156,076			$	440,904			$	31,270			$	(163,811	)		$	464,439

Condensed Consolidating Balance Sheet
December 31, 2010

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Assets
Current assets:
Cash and cash equivalents		$	—			$	12,587			$	13,706			$	—			$	26,293
Accounts receivable, net			—				48,283				4,336				—				52,619
Intercompany operations			295				2,717				(3,012	)			—				—
Inventories, net			—				8,090				2,599				—				10,689
Deferred income taxes			—				7,157				—				—				7,157
Prepaid expenses			72				2,799				1,203				—				4,074
Other current assets			—				5,942				928				—				6,870
Total current assets			367				87,575				19,760				—				107,702
Property and equipment, net			—				52,376				6,660				—				59,036
Goodwill			—				294,759				—				—				294,759
Investment in subsidiaries			257,838				16,065				—				(273,903	)			—
Other intangible assets, net			—				60,585				2,058				—				62,643
Deferred financing costs, net			4,995				—				—				—				4,995
Deferred income taxes			708				34,453				2,674				—				37,835
Other assets			—				1,978				137				—				2,115
Total assets		$	263,908			$	547,791			$	31,289			$	(273,903	)		$	569,085
Liabilities and Equity
Current liabilities:
Accounts payable		$	—			$	21,137			$	2,456			$	—			$	23,593
Accrued payroll and payroll-related expenses			—				7,643				337				—				7,980
Accrued expenses			2,210				25,563				2,361				—				30,134
Intercompany loans			(190,500	)			190,241				259				—				—
Current portion of long-term debt and capital leases			—				22,787				821				—				23,608
Total current liabilities			(188,290	)			267,371				6,234				—				85,315
Long-term debt and capital leases			195,692				19,201				1,123				—				216,016
Other long-term liabilities			—				3,381				1,691				—				5,072
Total liabilities			7,402				289,953				9,048				—				306,403
Commitments and contingencies
Total equity			256,506				257,838				22,241				(273,903	)			262,682
Total liabilities and equity		$	263,908			$	547,791			$	31,289			$	(273,903	)		$	569,085

Condensed Consolidating Statement of Operations
Three Months Ended
September 30, 2011

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	93,365			$	11,427			$	—			$	104,792
Cost of sales			—				61,895				8,973				—				70,868
Gross profit			—				31,470				2,454				—				33,924
Selling, general and administrative expenses			—				21,513				2,020				—				23,533
Amortization of intangible assets			—				4,581				73				—				4,654
Goodwill impairment			—				42,109				—				—				42,109
Loss from operations			—				(36,733	)			361				—				(36,372	)
Other income			—				(27	)			—				—				(27	)
Interest expense (income), net			5,788				1,999				(44	)			—				7,743
(Loss) income before equity earnings of subsidiaries and income tax benefit			(5,788	)			(38,705	)			405				—				(44,088	)
Equity in earnings of subsidiaries			36,675				(527	)			—				(36,148	)			—
Income tax benefit			(706	)			(1,503	)			(183	)			—				(2,392	)
Net (loss) income			(41,757	)			(36,675	)			588				36,148				(41,696	)
Loss attributable to noncontrolling interest			—				—				(61	)			—				(61	)
Net (loss) income attributable to American Reprographics Company		$	(41,757	)		$	(36,675	)		$	527			$	36,148			$	(41,757	)

Consolidating Condensed Statement of Operations
Three Months Ended
September 30, 2010

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	100,004			$	9,417			$	—			$	109,421
Cost of sales			—				66,678				7,725				—				74,403
Gross profit			—				33,326				1,692				—				35,018
Selling, general and administrative expenses			—				24,764				1,848				—				26,612
Amortization of intangible assets			—				2,394				72				—				2,466
Goodwill impairment			—				36,697				1,566				—				38,263
Loss from operations			—				(30,529	)			(1,794	)			—				(32,323	)
Other income			—				(52	)			—				—				(52	)
Interest expense (income), net			—				5,621				(7	)			—				5,614
Loss before equity earnings of subsidiaries and income tax benefit			—				(36,098	)			(1,787	)			—				(37,885	)
Equity in earnings of subsidiaries			25,144				1,670				—				(26,814	)			—
Income tax benefit			—				(12,624	)			(44	)			—				(12,668	)
Net (loss) income			(25,144	)			(25,144	)			(1,743	)			26,814				(25,217	)
Loss attributable to noncontrolling interest			—				—				73				—				73
Net (loss) income attributable to American Reprographics Company		$	(25,144	)		$	(25,144	)		$	(1,670	)		$	26,814			$	(25,144	)

Consolidating Condensed Statement of Operations
Nine Months Ended
September 30, 2011

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	290,461			$	30,425			$	—			$	320,886
Cost of sales			—				193,825				24,056				—				217,881
Gross profit			—				96,636				6,369				—				103,005
Selling, general and administrative expenses			—				72,086				6,083				—				78,169
Amortization of intangible assets			—				13,914				205				—				14,119
Goodwill impairment			—				65,444				—				—				65,444
(Loss) income from operations			—				(54,808	)			81				—				(54,727	)
Other income			—				(88	)			—				—				(88	)
Interest expense (income), net			17,130				6,555				(76	)			—				23,609
(Loss) income before equity earnings of subsidiaries and income tax provision			(17,130	)			(61,275	)			157				—				(78,248	)
Equity in earnings of subsidiaries			112,900				917				—				(113,817	)			—
Income tax provision			—				50,708				1,164				—				51,872
Net (loss) income			(130,030	)			(112,900	)			(1,007	)			113,817				(130,120	)
Loss attributable to noncontrolling interest			—				—				90				—				90
Net (loss) income attributable to American Reprographics Company		$	(130,030	)		$	(112,900	)		$	(917	)		$	113,817			$	(130,030	)

Consolidating Condensed Statement of Operations
Nine Months Ended
September 30, 2010

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Net sales		$	—			$	310,596			$	26,074			$	—			$	336,670
Cost of sales			—				204,840				20,506				—				225,346
Gross profit			—				105,756				5,568				—				111,324
Selling, general and administrative expenses			—				76,595				5,317				—				81,912
Amortization of intangible assets			—				7,443				216				—				7,659
Goodwill impairment			—				36,697				1,566				—				38,263
Loss from operations			—				(14,979	)			(1,531	)			—				(16,510	)
Other income			—				(129	)			—				—				(129	)
Interest expense (income), net			—				17,258				(2	)			—				17,256
Loss before equity earnings of subsidiaries and income tax (benefit) provision			—				(32,108	)			(1,529	)			—				(33,637	)
Equity in earnings of subsidiaries			22,748				1,527				—				(24,275	)			—
Income tax (benefit) provision			—				(10,887	)			25				—				(10,862	)
Net (loss) income			(22,748	)			(22,748	)			(1,554	)			24,275				(22,775	)
Loss attributable to noncontrolling interest			—				—				27				—				27
Net (loss) income attributable to American Reprographics Company		$	(22,748	)		$	(22,748	)		$	(1,527	)		$	24,275			$	(22,748	)

Consolidating Condensed Statement of Cash Flows
Nine Months Ended
September 30, 2011

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Cash flows from operating activities
Net cash (used in) provided by operating activities		$	(10,881	)		$	41,255			$	(884	)		$	—			$	29,490
Cash flows from investing activities
Capital expenditures			—				(10,766	)			(1,172	)			—				(11,938	)
Payment for swap transaction			—				(9,729	)			—				—				(9,729	)
Other			—				1,054				(129	)			—				925
Net cash used in investing activities			—				(19,441	)			(1,301	)			—				(20,742	)
Cash flows from financing activities
Proceeds from stock option exercises			—				108				—				—				108
Proceeds from issuance of common stock under Employee Stock Purchase Plan			—				31				—				—				31
Excess tax benefit related to stock-based compensation			—				31				—				—				31
Payments on long-term debt agreements and capital leases			—				(18,718	)			(1,001	)			—				(19,719	)
Net borrowings under revolving credit facilities			9,800				—				1,022				—				10,822
Payment of deferred loan fees			(668	)			—				—				—				(668	)
Advances to/from subsidiaries			1,749				(1,522	)			(227	)			—				—
Net cash provided by (used in) financing activities			10,881				(20,070	)			(206	)			—				(9,395	)
Effect of foreign currency translation on cash balances			—				—				308				—				308
Net change in cash and cash equivalents			—				1,744				(2,083	)			—				(339	)
Cash and cash equivalents at beginning of period			—				12,587				13,706				—				26,293
Cash and cash equivalents at end of period		$	—			$	14,331			$	11,623			$	—			$	25,954

Consolidating Condensed Statement of Cash Flows
Nine Months Ended
September 30, 2010

		American
		Reprographics				Guarantor				Non-Guarantor
(In thousands) (Unaudited)		Company				Subsidiaries				Subsidiaries				Eliminations				Total
Cash flows from operating activities
Net cash provided by operating activities		$	—			$	35,358			$	2,650			$	—			$	38,008
Cash flows from investing activities
Capital expenditures			—				(4,900	)			(796	)			—				(5,696	)
Payments for businesses acquired, net of cash acquired and including other cash payments associated with the acquisitions			—				(500	)			—				—				(500	)
Other			—				892				(138	)			—				754
Net cash used in investing activities			—				(4,508	)			(934	)			—				(5,442	)
Cash flows from financing activities
Proceeds from stock option exercises			—				125				—				—				125
Proceeds from issuance of common stock under Employee Stock Purchase Plan			—				37				—				—				37
Excess tax benefit related to stock-based compensation			—				38				—				—				38
Payments on long-term debt agreements and capital leases			—				(31,284	)			(919	)			—				(32,203	)
Net repayments under revolving credit facility			—				—				(450	)			—				(450	)
Advances to/from subsidiaries			—				1,140				(1,140	)			—				—
Net cash used in financing activities			—				(29,944	)			(2,509	)			—				(32,453	)
Effect of foreign currency translation on cash balances			—				—				265				—				265
Net change in cash and cash equivalents			—				906				(528	)			—				378
Cash and cash equivalents at beginning of period			—				15,319				14,058				—				29,377
Cash and cash equivalents at end of period		$	—			$	16,225			$	13,530			$	—			$	29,755