Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2011

Condensed Consolidating Financial Information [Abstract]

Condensed Consolidating Financial Information

Note 15 — Condensed Consolidating Financial Information

     Amscan Holdings is the issuer of the senior subordinated notes due April 30, 2014. The senior subordinated notes are guaranteed jointly and severally, fully and unconditionally, by the following wholly-owned domestic subsidiaries (collectively, the “Guarantors”), which subsidiaries are 100% owned, directly or indirectly, by Amscan Holdings:

• 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.

• Party City Corporation

• PA Acquisition 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 Asia, Ltd.

• Christy’s By Design, Ltd.

• Christy Dress Up, Ltd.

• Christy Garments & Accessories Ltd.

• JCS Hong Kong Ltd.

• Riethmüller GmbH

     The following information presents condensed consolidating balance sheets at June 30, 2011 and December 31, 2010, the condensed consolidating statements of operations for the three months ended June 30, 2011 and 2010, and the related condensed consolidating statements of cash flows for the three months ended June 30, 2011 and 2010, for the combined Guarantors and the combined Non-guarantors, together with the elimination entries necessary to consolidate the entities comprising the combined companies.

CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2011

	Amscan
	Holdings,
	Inc. and			Combined
	Combined			Non-
	Guarantors			Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	10,868		$	4,711		$	—		$	15,579
Accounts receivable , net of allowances		72,250			45,234			—			117,484
Inventories, net of allowances		411,738			42,141			(1,226	)		452,653
Prepaid expenses and other current assets		58,632			7,448			—			66,080
Total current assets		553,488			99,534			(1,226	)		651,796
Property, plant and equipment, net		190,535			14,086			—			204,621
Goodwill		608,411			52,752			—			661,163
Trade names		129,954			3,180			—			133,134
Other intangible assets, net		50,267			—			—			50,267
Investment in and advances to unconsolidated subsidiaries		120,552			—			(120,552	)		—
Due from affiliates		72,444			70,502			(142,946	)		—
Other assets, net		27,700			900			—			28,600
Total assets	$	1,753,351		$	240,954		$	(264,724	)	$	1,729,581
LIABILITIES, REDEEMABLE COMMON SECURITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Loans and notes payable		182,285			—			—			182,285
Accounts payable		112,763			20,502			—			133,265
Accrued expenses		94,251			17,202			—			111,453
Income taxes payable		37,439			(658	)		(103	)		36,678
Due to affiliates		63,009			79,937			(142,946	)		—
Current portion of long-term obligations		9,073			43			—			9,116
Total current liabilities		498,820			117,026			(143,049	)		472,797
Long-term obligations, excluding current portion		836, 781			71			—			836,852
Deferred income tax liabilities		93,854			764			—			94,618
Other		17,818			47			—			17,865
Total liabilities		1,447,273			117,908			(143,049	)		1,422,132
Redeemable common securities		35,765			—			—			35,765
Commitments and contingencies
Stockholders’ equity:
Class A and Class B Common Stock		—			336			(336	)		—
Additional paid-in capital		285,950			82,069			(82,069	)		285,950
Retained (deficit) earnings		(14,466	)		39,798			(40,921	)		(15,589	)
Accumulated other comprehensive loss		(1,171	)		(1,651	)		1,651			(1,171	)
Amscan Holdings, Inc. stockholders’ equity		270,313			120,552			(121,675	)		269,190
Noncontrolling interests		—			2,494			—			2,494
Total stockholders’ equity		270,313			123,046			(121,675	)		271,684
Total liabilities, redeemable common securities and stockholders’ equity	$	1,753,351		$	240,954		$	(264,724	)	$	1,729,581

CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2010

	Amscan
	Holdings,
	Inc. and
	Combined			Combined
	Guarantors			Non-Guarantors			Eliminations			Consolidated
				(Amounts in thousands)
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			4,461			—			65,672
Total current assets		557,560			61,232			(1,018	)		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 unconsolidated 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		$	108,646		$	(100,649	)	$	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			(1,355	)		(26	)		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			41,206			(35,172	)		427,781
Long-term obligations, excluding current portion		841,023			89			—			841,112
Deferred income tax liabilities		94,427			554			—			94,981
Other		14,766			—			—			14,766
Total liabilities		1,371,963			41,849			(35,172	)		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) income		(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		$	108,646		$	(100,649	)	$	1,653,151

CONDENSED CONSOLIDATING INCOME STATEMENT
Three Months Ended June 30, 2011
(Amounts in thousands)

	Amscan
	Holdings, Inc.
	and Combined			Combined Non-
	Guarantors			Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	366,993		$	57,051		$	(12,542	)	$	411,502
Royalties and franchise fees		4,550			—			—			4,550
Total revenues		371,543			57,051			(12,542	)		416,052
Expenses:
Cost of sales		217,691			42,491			(12,395	)		247,787
Selling expenses		8,177			6,290			—			14,467
Retail operating expenses		72,368			—			—			72,368
Franchise expenses		3,370			—			—			3,370
General and administrative expenses		26,787			4,259			(90	)		30,956
Art and development costs		4,001			81			—			4,082
Total expenses		332,394			53,121			(12,485	)		373,030
Income from operations		39,149			3,930			(57	)		43,022
Interest expense, net		20,100			212			—			20,312
Other (income) expense , net		(3,280	)		(358	)		3,823			185
Income before income taxes		22,329			4,076			(3,880	)		22,525
Income tax expense		7,704			297			(54	)		7,947
Net income		14,625			3,779			(3,826	)		14,578
Less net income attributable to noncontrolling interests		—			46			—			46
Net income attributable to Amscan Holdings, Inc.	$	14,625		$	3,733		$	(3,826	)	$	14,532

CONDENSED CONSOLIDATING INCOME STATEMENT
Six Months Ended June 30, 2011
(Amounts in thousands)

	Amscan
	Holdings, Inc.
	and Combined			Combined Non-
	Guarantors			Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	683,736		$	98,359		$	(18,092	)	$	764,003
Royalties and franchise fees		8,231			—			—			8,231
Total revenues		691,967			98,359			(18,092	)		772,234
Expenses:
Cost of sales		415,832			74,853			(17,884	)		472,801
Selling expenses		16,490			11,829			—			28,319
Retail operating expenses		134,216			—			—			134,216
Franchise expenses		6,736			—			—			6,736
General and administrative expenses		53,832			9,088			(420	)		62,500
Art and development costs		7,890			142			—			8,032
Total expenses		634,996			95,912			(18,304	)		712,604
Income from operations		56,971			2,447			212			59,630
Interest expense, net		40,229			451			—			40,680
Other (income) expense, net		(1,440	)		(996	)		2,683			247
Income before income taxes		18,182			2,992			(2,471	)		18,703
Income tax expense		6,082			612			(77	)		6,617
Net income		12,100			2,380			(2,394	)		12,086
Less net income attributable to noncontrolling interests		—			117			—			117
Net income attributable to Amscan Holdings, Inc.	$	12,100		$	2,263		$	(2,394	)	$	11,969

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Three Months Ended June 30, 2010
(Amounts in thousands)

	Amscan Holdings,
	Inc. and Combined			Combined Non-
	Guarantors			Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	313,882		$	54,042		$	(15,219	)	$	352,705
Royalties and franchise fees		5,716			—			(1,263	)		4,453
Total revenues		319,598			54,042			(16,482	)		357,158
Expenses:
Cost of sales		188,513			37,395			(15,043	)		210,865
Wholesale selling expenses		8,415			2,430			—			10,845
Retail operating expenses		56,763			8,916			(1,263	)		64,416
Franchise expenses		3,149			—			—			3,149
General and administrative expenses		26,066			3,146			(330	)		28,882
Art and development costs		3,656			(22	)		—			3,634
Total expenses		286,562			51,865			(16,636	)		321,791
Income from operations		33,036			2,177			154			35,367
Interest expense, net		8,528			598			—			9,126
Other (income) expense, net		(1,786	)		214			1,694			122
Income before income taxes		26,294			1,365			(1,540	)		26,119
Income tax expense		10,150			266			(828	)		9,588
Net income		16,144			1,099			(712	)		16,531
Less net income attributable to noncontrolling interests		—			71			—			71
Net income attributable to Amscan Holdings, Inc.	$	16,144		$	1,028		$	(712	)	$	16,460

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Six Months Ended June 30, 2010
(Amounts in thousands)

	Amscan
	Holdings, Inc.
	and Combined			Combined Non-
	Guarantors			Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	578,401		$	107,650		$	(28,967	)	$	657,084
Royalties and franchise fees		10,785			—			(2,488	)		8,297
Total revenues		589,186			107,650			(31,455	)		665,381
Expenses:
Cost of sales		363,425			75,437			(28,097	)		410,765
Wholesale selling expenses		16,172			5,063			—			21,235
Retail operating expenses		102,647			17,217			(2,488	)		117,376
Franchise expenses		6,273			—			—			6,273
General and administrative expenses		53,176			6,291			(660	)		58,807
Art and development costs		7,315			(46	)		—			7,269
Total expenses		549,008			103,962			(31,245	)		621,725
Income from operations		40,178			3,688			(210	)		43,656
Interest expense, net		17,181			1,246			—			18,427
Other (income) expense, net		(3,049	)		536			2,566			53
Income before income taxes		26,046			1,906			(2,776	)		25,176
Income tax expense		9,335			355			(677	)		9,013
Net income	$	16,711		$	1,551		$	(2,099	)	$	16,163
Less net income attributable to noncontrolling interests		—			114			—			114
Net income attributable to Amscan Holdings, Inc.	$	16,711		$	1,437		$	(2,099	)	$	16,049

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2011
(Amounts in thousands)

	Amscan
	Holdings, Inc.
	and			Combined
	Combined			Non-
	Guarantors			Guarantors			Eliminations			Consolidated
Cash flows used in operating activities:
Net income		12,100			2,380			(2,394	)		12,086
Net income attributable to noncontrolling interest		—			117			—			117
Net income attributable to Amscan Holdings, Inc.	$	12,100		$	2,263		$	(2,394	)	$	11,969
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization expense		26,040			1,199			—			27,239
Amortization of deferred financing costs		2,394			—			—			2,394
Provision for doubtful accounts		508			196			—			704
Deferred income tax expense (benefit)		(255	)		—			—			(255	)
Deferred rent		4,550			—			—			4,550
Undistributed loss (gain) in unconsolidated joint venture		(596	)		—			—			(596	)
(Gain) Loss on disposal of equipment		79			2			—			81
Equity based compensation		809			—			—			809
Changes in operating assets and liabilities, net of effects of acquisitions:
Decrease (increase) in accounts receivable		3,805			(6,220	)		—			(2,415	)
(Increase) in inventories		(5,432	)		(7,430	)		208			(12,654	)
Decrease (increase) in prepaid expenses and other current assets		455			(2,334	)		—			(1,879	)
Increase in accounts payable, accrued expenses and income taxes payable		8,223			9,141			2,186			19,550
Net cash provided by (used) in operating activities		52,680			(3,183	)		—			49,497
Cash flows used in investing activities:
Cash paid in connection with acquisitions, net of cash acquired		(60,500	)		—			—			(60,500	)
Capital expenditures		(23,406	)		(666	)		—			(24,072	)
Proceeds from disposal of property and equipment		6			16			—			22
Net cash used in investing activities		(83,900	)		(650	)		—			(84,550	)
Cash flows provided by financing activities:
Repayments of loans, notes payable and long-term obligations		(5,012	)		(21	)		—			(5,033	)
Proceeds from loans, notes payable and long-term obligations		32,187			—			—			32,187
Capital contributions and proceeds from issuance of common stock and exercise of options, net of retirements		148			—			—			148
Net cash provided by (used in) financing activities		27,323			(21	)		—			27,302
Effect of exchange rate changes on cash and cash equivalents		567			2,309			—			2,876
Net decrease in cash and cash equivalents		(3,330	)		(1,545	)		—			(4,875	)
Cash and cash equivalents at beginning of period		14,198			6,256						20,454
Cash and cash equivalents at end of period	$	10,868		$	4,711		$	—		$	15,579

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Six Months Ended June 30, 2010
(Amounts in thousands)

	Amscan Holding, Inc.			Combined
	and Combined			Non-
	Guarantors			Guarantors			Eliminations			Consolidated
Cash flows provided by operating activities:
Net income		16,711			1,551			(2,099	)		16,163
Net income attributable to noncontrolling interest		—			114			—			114
Net income attributable to Amscan Holdings, Inc.	$	16,711		$	1,437		$	(2,099	)	$	16,049
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		21,680			2,026			—			23,706
Amortization of deferred financing costs		928			132			—			1,060
Provision for doubtful accounts		729			116			—			845
Deferred income tax expense		595			—			—			595
Deferred rent		641			170			—			811
Undistributed income in unconsolidated joint venture		(364	)		—			—			(364	)
Loss on disposal of equipment		100			137			—			237
Equity based compensation		276			—			—			276
Changes in operating assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable		(5,189	)		(14	)		—			(5,203	)
Increase in inventories		(10,386	)		(122	)		938			(9,570	)
Increase in prepaid expenses and other current assets		(3,629	)		(2,027	)		(285	)		(5,941	)
Decrease increase in accounts payable, accrued expenses and income taxes payable		(18,966	)		1,681			1,446			(15,839	)
Net cash provided by operating activities		3,126			3,536			—			6,662
Cash flows used in investing activities:
Cash paid in connection with acquisitions, net of cash acquired		(5,263	)		2			—			(5,261	)
Capital expenditures		(22,447	)		(723	)		—			(23,170	)
Proceeds from disposal of property and equipment		104			30			—			134
Net cash used in investing activities		(27,606	)		(691	)		—			(28,297	)
Cash flows provided by (used in) financing activities:
Repayments of loans, notes payable and long-term obligations		(25,345	)		(3,897	)		—			(29,242	)
Proceeds from loans, notes payable and long-term obligations		53,245			39			—			53,284
Net cash provided by (used in) financing activities		27,900			(3,858	)		—			24,042
Effect of exchange rate changes on cash and cash equivalents		(5	)		(1,776	)		—			(1,781	)
Net increase (decrease) in cash and cash equivalents		3,415			(2,789	)		—			626
Cash and cash equivalents at beginning of period		8,239			7,181						15,420
Cash and cash equivalents at end of period	$	11,654		$	4,392		$	—		$	16,046