Condensed Consolidating Financial Information

12 Months Ended

Dec. 31, 2011

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Financial Information

Note 23 — Condensed Consolidating Financial Information

Borrowings under the New Term Loan Credit Agreement, the New ABL Facility and the Company’s $175,000 8.75% senior subordinated notes are guaranteed jointly and severally, fully and unconditionally, by the following domestic subsidiaries of the Company (collectively, the “Guarantors”):

• Amscan Inc.

• Am-Source, LLC

• Anagram Eden Prairie Property Holdings LLC

• Anagram International, Inc.

• Anagram International Holdings, Inc.

• Anagram International, LLC

• Factory Card & Party Outlet Corp.

• Gags & Games, Inc.

• JCS Packaging Inc.

• M&D Industries, Inc.

• PA Acquisition Corporation

• Party City Corporation

• Party City Franchise Group Holdings, LLC

• SSY Realty Corp.

• Trisar, Inc.

Non-guarantor subsidiaries (collectively, “Non-guarantors”) include the following:

• Amscan (Asia-Pacific) Pty. Ltd.

• Amscan de Mexico, S.A. de C.V.

• Amscan Distributors (Canada) Ltd.

• Amscan Holdings Limited

• Anagram International (Japan) Co., Ltd.

• Amscan Partyartikel GmbH

• Christy’s Asia, Ltd.

• Christy’s By Design, Ltd.

• Christy’s Dress Up, Ltd.

• Christy’s Garments & Accessories Ltd.

• JCS Hong Kong Ltd.

• Party Packagers

• Riethmüller GmbH

The following unaudited information presents condensed consolidating balance sheets at December 31, 2011 and December 31, 2010, condensed consolidating statements of operations for the years ended December 31, 2011, 2010 and 2009, and the related condensed consolidating statements of cash flows for the years ended December 31, 2011, 2010 and 2009, for the Combined Guarantors and the Combined Non-guarantors, together with the elimination entries necessary to consolidate the entities comprising the combined companies.

Certain amounts in the condensed consolidating balance sheet at December 31, 2010 have been reclassified. These reclassifications have no effect on the consolidated amounts.

As a result of the repayment of PCFG’s debt during the third quarter of 2010, PCFG became a Guarantor and is included under AHI and Combined Guarantors in the Consolidating Financial Statements for the year ended December 31, 2010. For the prior periods presented, PCFG was reflected under Combined Non-guarantors.

CONSOLIDATING BALANCE SHEET

December 31, 2011

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	14,012		$	8,041		$	—		$	22,053
Accounts receivable , net		84,322			42,800			—			127,122
Inventories, net		386,264			49,875			(1,156	)		434,983
Prepaid expenses and other current assets		64,882			10,073			(435	)		74,520
Total current assets		549,480			110,789			(1,591	)		658,678
Property, plant and equipment, net		186,999			17,330			—			204,329
Goodwill		610,285			71,475			—			681,760
Trade names		129,882			2,840			—			132,722
Other intangible assets, net		45,292			1,792			—			47,084
Investment in and advances to consolidated subsidiaries		250,799			—			(250,799	)		—
Due from affiliates		89,325			56,001			(145,326	)		—
Other assets, net		24,603			1,162			—			25,765
Total assets	$	1,886,665		$	261,389		$	(397,716	)	$	1,750,338
LIABILITIES, REDEEMABLE COMMON SECURITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Loans and notes payable		131,089			8,193			—			139,282
Accounts payable		103,774			15,531			—			119,305
Accrued expenses		113,531			12,344			—			125,875
Income taxes payable		39,758			—			(485	)		39,273
Due to affiliates		61,479			83,849			(145,328	)		—
Current portion of long-term obligations		8,625			41			—			8,666
Total current liabilities		458,256			119,958			(145,813	)		432,401
Long-term obligations, excluding current portion		834,262			48			—			834,310
Deferred income tax liabilities		98,782			1,401			—			100,183
Deferred rent and other long-term liabilities		20,273			141			—			20,414
Total liabilities		1,411,573			121,548			(145,813	)		1,387,308
Redeemable common securities		36,939			—			—			36,939
Commitments and contingencies
Stockholders’ equity:
Class A and Class B Common Stock		—			336			(336	)		—
Additional paid-in capital		399,686			113,893			(227,128	)		286,451
Retained earnings		49,821			33,958			(35,062	)		48,717
Accumulated other comprehensive loss		(11,354	)		(10,623	)		10,623			(11,354	)
Amscan Holdings, Inc. stockholders’ equity		438,153			137,564			(251,903	)		323,814
Noncontrolling interests		—			2,277			—			2,277
Total stockholders’ equity		438,153			139,841			(251,903	)		326,091
Total liabilities, redeemable common securities and stockholders’ equity	$	1,886,665		$	261,389		$	(397,716	)	$	1,750,338

CONSOLIDATING BALANCE SHEET

December 31, 2010

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	14,198		$	6,256		$	—		$	20,454
Accounts receivable , net		76,699			30,632			—			107,331
Inventories, net		405,452			19,883			(1,018	)		424,317
Prepaid expenses and other current assets		61,211			5,816			(1,355	)		65,672
Total current assets		557,560			62,587			(2,373	)		617,774
Property, plant and equipment, net		187,574			3,155			—			190,729
Goodwill		600,014			30,478			—			630,492
Trade names		129,954			—			—			129,954
Other intangible assets, net		55,362			—			—			55,362
Investment in and advances to consolidated subsidiaries		64,485			—			(64,485	)		—
Due from affiliates		22,148			12,998			(35,146	)		—
Other assets, net		28,057			783			—			28,840
Total assets	$	1,645,154		$	110,001		$	(102,004	)	$	1,653,151
LIABILITIES, REDEEMABLE COMMON SECURITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Loans and notes payable		150,098			—			—			150,098
Accounts payable		97,510			10,662			—			108,172
Accrued expenses		102,749			8,305			—			111,054
Income taxes payable		35,706			—			(1,381	)		34,325
Due to affiliates		11,593			23,553			(35,146	)		—
Redeemable warrants		15,086			—			—			15,086
Current portion of long-term obligations		9,005			41			—			9,046
Total current liabilities		421,747			42,561			(36,527	)		427,781
Long-term obligations, excluding current portion		841,023			89			—			841,112
Deferred income tax liabilities		94,427			554			—			94,981
Deferred rent and other long-term liabilities		14,766			—			—			14,766
Total liabilities		1,371,963			43,204			(36,527	)		1,378,640
Redeemable common securities		18,089			—			—			18,089
Commitments and contingencies
Stockholders’ equity:
Class A and Class B Common Stock		—			336			(336	)		—
Additional paid-in capital		287,583			31,025			(31,025	)		287,583
Retained (deficit)earnings		(26,566	)		37,535			(38,527	)		(27,558	)
Accumulated other comprehensive loss		(5,915	)		(4,411	)		4,411			(5,915	)
Amscan Holdings, Inc. stockholders’ equity		255,102			64,485			(65,477	)		254,110
Noncontrolling interests		—			2,312			—			2,312
Total stockholders’ equity		255,102			66,797			(65,477	)		256,422
Total liabilities, redeemable common securities and stockholders’ equity	$	1,645,154		$	110,001		$	(102,004	)	$	1,653,151

CONSOLIDATING STATEMENT OF INCOME

For The Year Ended December 31, 2011

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	1,647,894		$	245,601		$	(40,626	)	$	1,852,869
Royalties and franchise fees		19,106			—			—			19,106
Total revenues		1,667,000			245,601			(40,626	)		1,871,975
Expenses:
Cost of sales		978,197			181,264			(40,488	)		1,118,973
Wholesale selling expenses		33,260			24,645			—			57,905
Retail operating expenses		317,667			7,665			—			325,332
Franchise expenses		13,685			—			—			13,685
General and administrative expenses		115,388			22,819			(133	)		138,074
Art and development costs		16,311			325			—			16,636
Total expenses		1,474,508			236,718			(40,621	)		1,670,605
Income from operations		192,492			8,883			(5	)		201,370
Interest expense, net		76,805			938			—			77,743
Other (income) expense, net		(4,240	)		(509	)		6,225			1,476
Income before income taxes		119,927			8,454			(6,230	)		122,151
Income tax expense		43,565			2,226			(50	)		45,741
Net income		76,362			6,228			(6,180	)		76,410
Less net income attributable to noncontrolling interests		—			135			—			135
Net income attributable to Amscan Holdings, Inc.	$	76,362		$	6,093		$	(6,180	)	$	76,275

CONSOLIDATING STATEMENT OF INCOME

For The Year Ended December 31, 2010

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	1,493,103		$	110,144		$	(23,570	)	$	1,579,677
Royalties and franchise fees		19,417			—			—			19,417
Total revenues		1,512,520			110,144			(23,570	)		1,599,094
Expenses:
Cost of sales		884,957			81,600			(23,499	)		943,058
Wholesale selling expenses		31,379			11,346			—			42,725
Retail operating expenses		296,891			—			—			296,891
Franchise expenses		12,269			—			—			12,269
General and administrative expenses		124,542			11,170			(1,320	)		134,392
Art and development costs		15,024			(101	)		—			14,923
Impairment of trade name		27,400			—			—			27,400
Total expenses		1,392,462			104,015			(24,819	)		1,471,658
Income from operations		120,058			6,129			1,249			127,436
Interest expense, net		40,791			59			—			40,850
Other (income) expense, net		(1,312	)		1,159			4,361			4,208
Income before income taxes		80,579			4,911			(3,112	)		82,378
Income tax expense		31,215			1,756			(26	)		32,945
Net income		49,364			3,155			(3,086	)		49,433
Less net income attributable to noncontrolling interests		—			114			—			114
Net income attributable to Amscan Holdings, Inc.	$	49,364		$	3,041		$	(3,086	)	$	49,319

CONSOLIDATING STATEMENT OF INCOME

For The Year Ended December 31, 2009

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	1,291,848		$	199,723		$	(24,247	)	$	1,467,324
Royalties and franchise fees		19,494			—			—			19,494
Total revenues		1,311,342			199,723			(24,247	)		1,486,818
Expenses:
Cost of sales		794,363			128,677			(23,999	)		899,041
Wholesale selling expenses		29,580			10,206			—			39,786
Retail operating expenses		226,159			35,532			—			261,691
Franchise expenses		11,991			—			—			11,991
General and administrative expenses		104,072			16,441			(1,320	)		119,193
Art and development costs		13,324			(81	)		—			13,243
Total expenses		1,179,489			190,775			(25,319	)		1,344,945
Income from operations		131,853			8,948			1,072			141,873
Interest expense, net		38,785			2,696			—			41,481
Other (income) expense, net		(7,818	)		1,346			6,440			(32	)
Income before income taxes		100,886			4,906			(5,368	)		100,424
Income tax expense		36,631			1,133			(91	)		37,673
Net income		64,255			3,773			(5,277	)		62,751
Less net income attributable to noncontrolling interests		—			198			—			198
Net income attributable to Amscan Holdings Inc.	$	64,255		$	3,575		$	(5,277	)	$	62,553

CONSOLIDATING STATEMENT OF CASH FLOWS

For The Year Ended December 31, 2011

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
Cash flows used in operating activities:
Net income		76,362			6,228			(6,180	)		76,410
Less: net income attributable to noncontrolling interest		—			135			—			135
Net income attributable to Amscan Holdings, Inc.	$	76,362		$	6,093		$	(6,180	)	$	76,275
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		55,487			4,144			—			59,631
Amortization of deferred financing costs		4,500			—			—			4,500
Provision for doubtful accounts		707			1,066			—			1,773
Deferred income tax expense (benefit)		5,217			(9	)		—			5,208
Deferred rent		7,374			93			—			7,467
Undistributed income in unconsolidated joint venture		(463	)		—			—			(463	)
Impairment of fixed assets		87			—			—			87
Loss (gain) on disposal of equipment		205			(376	)		—			(171	)
Equity based compensation		1,397			—			—			1,397
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(8,467	)		461			—			(8,006	)
Decrease (increase) in inventories		20,703			(5,861	)		137			14,979
Increase in prepaid expenses and other current assets		(5,773	)		(4,103	)		—			(9,876	)
(Decrease) increase in accounts payable, accrued expenses and income taxes payable		(2,043	)		4,463			6,043			8,463
Net cash provided by operating activities		155,293			5,971			—			161,264
Cash flows used in investing activities:
Cash paid in connection with acquisitions		(95,624	)		—			—			(95,624	)
Capital expenditures		(41,633	)		(2,850	)		—			(44,483	)
Proceeds from disposal of property and equipment		47			1,151			—			1,198
Net cash used in investing activities		(137,210	)		(1,699	)		—			(138,909	)
Cash flows used in financing activities:
Repayments of loans, notes payable and long-term obligations		(29,173	)		(42	)		—			(29,215	)
Proceeds from loans, notes payable and long-term obligations		—			8,197			—			8,197
Dividend distribution		9,670			(9,670	)		—			—
Proceeds from exercise of options, net of retirements		1,234			—			—			1,234
Net cash used in financing activities		(18,269	)		(1,515	)		—			(19,784	)
Effect of exchange rate changes on cash and cash equivalents		—			(972	)		—			(972	)
Net (decrease) increase in cash and cash equivalents		(186	)		1,785			—			1,599
Cash and cash equivalents at beginning of period		14,198			6,256			—			20,454
Cash and cash equivalents at end of period	$	14,012		$	8,041		$	—		$	22,053

CONSOLIDATING STATEMENT OF CASH FLOWS

For The Year Ended December 31, 2010

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
Cash flows used in operating activities:
Net income		49,364			3,155			(3,086	)		49,433
Less: net income attributable to noncontrolling interest		—			114			—			114
Net income attributable to Amscan Holdings, Inc.	$	49,364		$	3,041		$	(3,086	)	$	49,319
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		48,427			991			—			49,418
Amortization of deferred financing costs		2,475			—			—			2,475
Provision for doubtful accounts		695			(58	)		—			637
Deferred income tax expense		(8,942	)		—			—			(8,942	)
Deferred rent		4,500			—			—			4,500
Undistributed gain in unconsolidated joint venture		(678	)		—			—			(678	)
Impairment of trade name		27,400			—			—			27,400
Impairment of fixed assets		597			—			—			597
Loss (gain) on disposal of equipment		206			(15	)		—			191
Equity based compensation		6,018			—			—			6,018
Write-off of deferred financing costs		2,448			—			—			2,448
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(14,428	)		7,921			—			(6,507	)
Increase in inventories		(84,538	)		(1,300	)		71			(85,767	)
Increase in prepaid expenses and other current assets		(21,711	)		(1,282	)		—			(22,993	)
Increase (decrease) in accounts payable, accrued expenses and income taxes payable		44,254			(4,217	)		3,015			43,052
Net cash provided by operating activities		56,087			5,081			—			61,168
Cash flows used in investing activities:
Cash paid in connection with acquisitions		(53,350	)		2			—			(53,348	)
Capital expenditures		(48,558	)		(1,065	)		—			(49,623	)
Proceeds from disposal of property and equipment		159			46			—			205
Net cash used in investing activities		(101,749	)		(1,017	)		—			(102,766	)
Cash flows provided by financing activities:
Repayments of loans, notes payable and long-term obligations		(393,259	)		(30	)		—			(393,289	)
Proceeds from loans, notes payable and long-term obligations		742,112			41			—			742,153
Dividend distribution		(301,829	)		—			—			(301,829	)
Payments related to redeemable common stock and rollover options		(572	)		—			—			(572	)
Proceeds from exercise of options, net of retirements		52			—			—			52
Net cash provided by financing activities		46,504			11			—			46,515
Effect of exchange rate changes on cash and cash equivalents		(243	)		360			—			117
Net increase in cash and cash equivalents		599			4,435			—			5,034
Cash and cash equivalents at beginning of period		13,599			1,821			—			15,420
Cash and cash equivalents at end of period	$	14,198		$	6,256		$	—		$	20,454

CONSOLIDATING STATEMENT OF CASH FLOWS

For The Year Ended December 31, 2009

	AHI and Combined Guarantors			Combined Non-Guarantors			Eliminations			Consolidated
Cash flows provided by operating activities:
Net income		64,255			3,773			(5,277	)		62,751
Less: net income attributable to noncontrolling interest		—			198			—			198
Net income attributable to Amscan Holdings, Inc.	$	64,255		$	3,575		$	(5,277	)	$	62,553
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		39,885			4,497			—			44,382
Amortization of deferred financing costs		1,888			275			—			2,163
Provision for doubtful accounts		2,444			1,538			—			3,982
Deferred income tax expense		8,803			—			—			8,803
Deferred rent		977			786			—			1,763
Undistributed gain in unconsolidated joint venture		(632	)		—			—			(632	)
Loss on disposal of equipment		61			217			—			278
Equity based compensation		876			—			—			876
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		11,498			(5,161	)		—			6,337
Decrease (increase) in inventories		35,824			(5,139	)		248			30,933
Increase in prepaid expenses and other assets		(20,408	)		(765	)		—			(21,173	)
(Decrease) increase in accounts payable, accrued expenses and income taxes payable		(30,528	)		9,176			5,029			(16,323	)
Net cash provided by operating activities		114,943			8,999			—			123,942
Cash flows used in investing activities:
Cash paid in connection with acquisitions		(726	)		(2,652	)		—			(3,378	)
Cash in escrow in connection with acquisitions		(24,881	)		—			—			(24,881	)
Capital expenditures		(23,860	)		(2,335	)		—			(26,195	)
Proceeds from disposal of property and equipment		77			19			—			96
Net cash used in investing activities		(49,390	)		(4,968	)		—			(54,358	)
Cash flows used in financing activities
Repayments of loans, notes payable and long-term obligations		(66,392	)		(3,855	)		—			(70,247	)
Proceeds from exercise of options, net of retirements		90			—			—			90
Net cash used in financing activities		(66,302	)		(3,855	)		—			(70,157	)
Effect of exchange rate changes on cash and cash equivalents		488			2,447			—			2,935
Net (decrease) increase in cash and cash equivalents		(261	)		2,623			—			2,362
Cash and cash equivalents at beginning of period		8,501			4,557			—			13,058
Cash and cash equivalents at end of period	$	8,240		$	7,180		$	—		$	15,420