Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

September 30, 2014

(Amounts in thousands)

	PCHI			Combined Guarantors		Combined Non- Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	0		$	13,819	$	15,213		$	0		$	29,032
Accounts receivable, net		0			112,840		69,799			0			182,639
Inventories, net		0			616,350		78,046			0			694,396
Prepaid expenses and other current assets		0			77,831		9,539			0			87,370
Total current assets		0			820,840		172,597			0			993,437
Property, plant and equipment, net		0			217,053		23,846			0			240,899
Goodwill		0			1,486,652		73,863			0			1,560,515
Trade names		0			556,000		13,929			0			569,929
Other intangible assets, net		0			111,048		1,570			0			112,618
Investment in and advances to consolidated subsidiaries		695,009			0		387			(695,396	)		0
Due from affiliates		1,655,380			132,218		79,971			(1,867,569	)		0
Other assets, net		34,748			13,827		115			1,792			50,482
Total assets	$	2,385,137		$	3,337,638	$	366,278		$	(2,561,173	)	$	3,527,880
LIABILITIES, REDEEMABLE COMMON SECURITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Loans and notes payable	$	215,285		$	0	$	720		$	0		$	216,005
Accounts payable		0			164,673		50,046			0			214,719
Accrued expenses		15,247			119,411		24,787			0			159,445
Income taxes payable		(30,169	)		29,870		299			0			0
Due to affiliates		0			1,749,814		116,351			(1,866,165	)		0
Current portion of long-term obligations		7,250			5,123		0			0			12,373
Total current liabilities		207,613			2,068,891		192,203			(1,866,165	)		602,542
Long-term obligations, excluding current portion		1,396,127			386,924		31			0			1,783,082
Deferred income tax liabilities		0			310,698		1			0			310,699
Deferred rent and other long-term liabilities		0			46,915		3,245			0			50,160
Total liabilities		1,603,740			2,813,428		195,480			(1,866,165	)		2,746,483
Redeemable common securities		34,312			0		0			0			34,312
Commitments and contingencies
Stockholder’s equity:
Common Stock		0			0		335			(335	)		0
Additional paid-in capital		750,684			374,473		163,401			(537,874	)		750,684
(Accumulated deficit) retained earnings		(914	)		149,737		9,747			(159,484	)		(914	)
Accumulated other comprehensive loss		(2,685	)		0		(2,685	)		2,685			(2,685	)
Total stockholder’s equity		747,085			524,210		170,798			(695,008	)		747,085
Total liabilities, redeemable common securities and Stockholder’s equity	$	2,385,137		$	3,337,638	$	366,278		$	(2,561,173	)	$	3,527,880

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2013

(Amounts in thousands)

	PCHI			Combined Guarantors		Combined Non- Guarantors		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	0		$	16,182	$	9,305	$	0		$	25,487
Accounts receivable, net		0			92,015		47,524		0			139,539
Inventories, net		0			459,313		65,048		0			524,361
Prepaid expenses and other current assets		0			63,719		12,989		0			76,708
Total current assets		0			631,229		134,866		0			766,095
Property, plant and equipment, net		0			212,696		22,450		0			235,146
Goodwill		0			1,484,980		76,727		0			1,561,707
Trade names		0			556,000		14,141		0			570,141
Other intangible assets, net		0			127,553		1,855		0			129,408
Investment in and advances to consolidated subsidiaries		658,325			0		387		(658,712	)		0
Due from affiliates		1,555,471			118,831		68,060		(1,742,362	)		0
Other assets, net		40,937			15,264		485		391			57,077
Total assets	$	2,254,733		$	3,146,553	$	318,971	$	(2,400,683	)	$	3,319,574
LIABILITIES, REDEEMABLE COMMON SECURITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Loans and notes payable	$	34,800		$	0	$	1,247	$	0		$	36,047
Accounts payable		0			128,964		21,818		0			150,782
Accrued expenses		31,290			99,425		14,962		0			145,677
Income taxes payable		(44,946	)		61,054		762		0			16,870
Due to affiliates		0			1,637,377		104,981		(1,742,358	)		0
Current portion of long-term obligations		7,250			6,055		147		0			13,452
Total current liabilities		28,394			1,932,875		143,917		(1,742,358	)		362,828
Long-term obligations, excluding current portion		1,399,454			388,724		68		0			1,788,246
Deferred income tax liabilities		0			317,942		231		0			318,173
Deferred rent and other long-term liabilities		3			21,869		1,573		0			23,445
Total liabilities		1,427,851			2,661,410		145,789		(1,742,358	)		2,492,692
Redeemable common securities		23,555			0		0		0			23,555
Commitments and contingencies
Stockholder’s equity:
Common Stock		0			0		336		(336	)		0
Additional paid-in capital		790,989			374,474		162,400		(536,874	)		790,989
Retained earnings		6,930			110,669		5,118		(115,787	)		6,930
Accumulated other comprehensive income		5,408			0		5,328		(5,328	)		5,408
Total stockholder’s equity		803,327			485,143		173,182		(658,325	)		803,327
Total liabilities, redeemable common securities and Stockholder’s equity	$	2,254,733		$	3,146,553	$	318,971	$	(2,400,683	)	$	3,319,574

Condensed Consolidating Statement of Operations and Comprehensive Loss

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended September 30, 2014

(Amounts in thousands)

	PCHI			Combined Guarantors		Combined Non- Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	0		$	450,924	$	135,955		$	(48,208	)	$	538,671
Royalties and franchise fees		0			3,990		0			0			3,990
Total revenues		0			454,914		135,955			(48,208	)		542,661
Expenses:
Cost of sales		0			290,984		111,749			(48,208	)		354,525
Wholesale selling expenses		0			10,371		7,873			0			18,244
Retail operating expenses		0			90,093		5,478			0			95,571
Franchise expenses		0			3,537		0			0			3,537
General and administrative expenses		0			30,807		6,328			0			37,135
Art and development costs		0			4,871		0			0			4,871
Total expenses		0			430,663		131,428			(48,208	)		513,883
Income from operations		0			24,251		4,527			0			28,778
Interest expense, net		26,506			4,528		(11	)		0			31,023
Other (income) expense, net		(283	)		3,594		(3,427	)		0			(116	)
(Loss) income before income taxes		(26,223	)		16,129		7,965			0			(2,129	)
Income tax (benefit) expense		(9,703	)		7,496		725			0			(1,482	)
Equity based income from subsidiaries		15,873			0		0			(15,873	)		0
Net (loss) income	$	(647	)	$	8,633	$	7,240		$	(15,873	)	$	(647	)
Comprehensive (loss) income	$	(12,773	)	$	8,633	$	(4,886	)	$	(3,747	)	$	(12,773	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended September 30, 2013

(Amounts in thousands)

	PCHI			Combined Guarantors		Combined Non- Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	0		$	414,615	$	109,911		$	(40,941	)	$	483,585
Royalties and franchise fees		0			3,815		0			0			3,815
Total revenues		0			418,430		109,911			(40,941	)		487,400
Expenses:
Cost of sales		0			274,835		88,789			(40,941	)		322,683
Wholesale selling expenses		0			10,265		6,773			0			17,038
Retail operating expenses		0			85,908		4,495			0			90,403
Franchise expenses		0			3,368		0			0			3,368
General and administrative expenses		0			32,287		6,102			0			38,389
Art and development costs		0			4,649		133			0			4,782
Total expenses		0			411,312		106,292			(40,941	)		476,663
Income from operations		0			7,118		3,619			0			10,737
Interest expense, net		27,464			4,869		122			0			32,455
Other expense (income), net		3,081			1,564		(3,135	)		0			1,510
(Loss) income before income taxes		(30,545	)		685		6,632			0			(23,228	)
Income tax (benefit) expense		(16,612	)		606		3,330			0			(12,676	)
Equity based income from subsidiaries		3,381			0		0			(3,381	)		0
Net (loss) income		(10,552	)		79		3,302			(3,381	)		(10,552	)
Less: net income attributable to noncontrolling interests		45			0		45			(45	)		45
Net (loss) income attributable to PCHI	$	(10,597	)	$	79	$	3,257		$	(3,336	)	$	(10,597	)
Comprehensive (loss) income	$	(1,728	)	$	79	$	12,023		$	(12,102	)	$	(1,728	)
Less: comprehensive income attributable to noncontrolling interests		18			0		18			(18	)		18
Comprehensive (loss) income attributable to PCHI	$	(1,746	)	$	79	$	12,005		$	(12,084	)	$	(1,746	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

Nine Months Ended September 30, 2014

(Amounts in thousands)

	PCHI			Combined Guarantors		Combined Non- Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	0		$	1,261,015	$	296,831		$	(102,773	)	$	1,455,073
Royalties and franchise fees		0			12,149		0			0			12,149
Total revenues		0			1,273,164		296,831			(102,773	)		1,467,222
Expenses:
Cost of sales		0			794,761		241,436			(102,773	)		933,424
Wholesale selling expenses		0			31,246		23,624			0			54,870
Retail operating expenses		0			247,200		14,324			0			261,524
Franchise expenses		0			10,333		0			0			10,333
General and administrative expenses		0			88,734		18,856			0			107,590
Art and development costs		0			14,495		0			0			14,495
Total expenses		0			1,186,769		298,240			(102,773	)		1,382,236
Income (loss) from operations		0			86,395		(1,409	)		0			84,986
Interest expense, net		78,723			13,842		58			0			92,623
Other expense (income), net		2,814			8,889		(7,268	)		0			4,435
(Loss) income before income taxes		(81,537	)		63,664		5,801			0			(12,072	)
Income tax (benefit) expense		(30,169	)		24,592		1,349			0			(4,228	)
Equity based income from subsidiaries		43,524			0		0			(43,524	)		0
Net (loss) income	$	(7,844	)	$	39,072	$	4,452		$	(43,524	)	$	(7,844	)
Comprehensive (loss) income	$	(15,937	)	$	39,072	$	(3,641	)	$	(35,431	)	$	(15,937	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

Nine Months Ended September 30, 2013

(Amounts in thousands)

	PCHI			Combined Guarantors		Combined Non- Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	0		$	1,161,207	$	238,001		$	(75,992	)	$	1,323,216
Royalties and franchise fees		0			11,961		0			0			11,961
Total revenues		0			1,173,168		238,001			(75,992	)		1,335,177
Expenses:
Cost of sales		0			763,782		189,468			(75,992	)		877,258
Wholesale selling expenses		0			31,086		20,005			0			51,091
Retail operating expenses		0			233,942		11,310			0			245,252
Franchise expenses		0			9,872		0			0			9,872
General and administrative expenses		0			89,581		18,137			0			107,718
Art and development costs		0			14,033		447			0			14,480
Total expenses		0			1,142,296		239,367			(75,992	)		1,305,671
Income (loss) from operations		0			30,872		(1,366	)		0			29,506
Interest expense, net		82,294			15,421		414			0			98,129
Other expense (income), net		12,631			9,723		(6,363	)		0			15,991
(Loss) income before income taxes		(94,925	)		5,728		4,583			0			(84,614	)
Income tax (benefit) expense		(38,633	)		2,331		1,865			0			(34,437	)
Equity based income from subsidiaries		6,115			0		0			(6,115	)		0
Net (loss) income		(50,177	)		3,397		2,718			(6,115	)		(50,177	)
Less: net income attributable to noncontrolling interests		224			0		224			(224	)		224
Net (loss) income attributable to PCHI	$	(50,401	)	$	3,397	$	2,494		$	(5,891	)	$	(50,401	)
Comprehensive (loss) income	$	(51,232	)	$	3,397	$	1,663		$	(5,060	)	$	(51,232	)
Less: comprehensive income attributable to noncontrolling interests		201			0		201			(201	)		201
Comprehensive (loss) income attributable to PCHI	$	(51,433	)	$	3,397	$	1,462		$	(4,859	)	$	(51,433	)

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2014

(Amounts in thousands)

	PCHI			Combined Guarantors			Combined Non- Guarantors			Eliminations			Consolidated
Cash flows (used in) provided by operating activities:
Net (loss) income	$	(7,844	)	$	39,072		$	4,452		$	(43,524	)	$	(7,844	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization expense		0			57,132			3,863			0			60,995
Amortization of deferred financing costs and original issuance discount		8,381			2,545			0			0			10,926
Provision for doubtful accounts		0			699			493			0			1,192
Deferred income tax benefit		0			(5,240	)		(941	)		0			(6,181	)
Deferred rent		0			10,551			1,125			0			11,676
Undistributed loss in unconsolidated joint venture		0			846			0			0			846
Loss (gain) on disposal of equipment		0			2,315			(10	)		0			2,305
Equity based income from subsidiaries		(43,524	)		0			0			43,524			0
Equity based compensation		0			1,187			0			0			1,187
Changes in operating assets and liabilities, net of effects of acquired businesses:
Increase in accounts receivable		0			(21,523	)		(25,967	)		0			(47,490	)
Increase in inventories		0			(155,963	)		(15,232	)		0			(171,195	)
(Increase) decrease in prepaid expenses and other current assets		0			(7,343	)		5,308			0			(2,035	)
(Decrease) increase in accounts payable, accrued expenses and income taxes payable		(101,244	)		125,933			39,855			0			64,544
Net cash (used in) provided by operating activities		(144,231	)		50,211			12,946			0			(81,074	)
Cash flows used in investing activities:
Cash paid in connection with acquisitions, net of cash acquired		0			(2,152	)		0			0			(2,152	)
Capital expenditures		0			(46,454	)		(6,490	)		0			(52,944	)
Proceeds from disposal of property and equipment		0			432			519			0			951
Net cash used in investing activities		0			(48,174	)		(5,971	)		0			(54,145	)
Cash flows provided by (used in) financing activities:
Repayments of loans, notes payable and long-term obligations		(740,041	)		(399,410	)		(502	)		0			(1,139,953	)
Proceeds from loans, notes payable and long-term obligations		915,156			395,010			0			0			1,310,166
Exercise of stock options of Party City Holdco Inc.		1,081			0			0			0			1,081
Distribution to Parent		(31,816	)		0			0			0			(31,816	)
Debt issuance costs		(149	)		0			0			0			(149	)
Net cash provided by (used in) financing activities		144,231			(4,400	)		(502	)		0			139,329
Effect of exchange rate changes on cash and cash equivalents		0			0			(565	)		0			(565	)
Net (decrease) increase in cash and cash equivalents		0			(2,363	)		5,908			0			3,545
Cash and cash equivalents at beginning of period		0			16,182			9,305			0			25,487
Cash and cash equivalents at end of period	$	0		$	13,819		$	15,213		$	0		$	29,032

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Nine Months Ended September 30, 2013

(Amounts in thousands)

	PCHI			Combined Guarantors			Combined Non- Guarantors			Elimination			Consolidated
Cash flows (used in) provided by operating activities:
Net (loss) income	$	(50,177	)	$	3,397		$	2,718		$	(6,115	)	$	(50,177	)
Net income attributable to noncontrolling interests		224			0			224			(224	)		224
Net (loss) income attributable to Party City Holdings Inc.		(50,401	)		3,397			2,494			(5,891	)		(50,401	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization expense		0			67,474			3,486			0			70,960
Amortization of deferred financing costs and original issuance discount		12,001			4,557			0			0			16,558
Provision for doubtful accounts		0			158			416			0			574
Deferred income tax benefit		0			(13,613	)		(136	)		0			(13,749	)
Deferred rent		0			10,807			899			0			11,706
Undistributed loss in unconsolidated joint venture		0			311			0			0			311
Loss on disposal of equipment		0			160			169			0			329
Equity based income from subsidiaries		(6,115	)		0			0			6,115			0
Equity based compensation		0			1,741			0			0			1,741
Changes in operating assets and liabilities, net of effects of acquired businesses:
Increase in accounts receivable		0			(23,370	)		(12,118	)		0			(35,488	)
Increase in inventories		0			(72,954	)		(9,425	)		0			(82,379	)
Increase in prepaid expenses and other current assets		0			(11,089	)		(1,764	)		0			(12,853	)
(Decrease) increase in accounts payable, accrued expenses and income taxes payable		(96,275	)		82,222			43,564			(224	)		29,287
Net cash (used in) provided by operating activities		(140,790	)		49,801			27,585			0			(63,404	)
Cash flows used in investing activities:
Cash paid in connection with acquisitions, net of cash acquired		(37,930	)		0			(10,714	)		0			(48,644	)
Capital expenditures		0			(36,814	)		(5,329	)		0			(42,143	)
Proceeds from disposal of property and equipment		0			192			23			0			215
Net cash used in investing activities		(37,930	)		(36,622	)		(16,020	)		0			(90,572	)
Cash flows provided by (used in) financing activities:
Repayments of loans, notes payable and long-term obligations		(734,171	)		(406,561	)		(8,413	)		0			(1,149,145	)
Proceeds from loans, notes payable and long-term obligations		913,603			399,000			0			0			1,312,603
Capital contributions		750			0			0			0			750
Debt issuance costs		(1,462	)		0			0			0			(1,462	)
Net cash provided by (used in) financing activities		178,720			(7,561	)		(8,413	)		0			162,746
Effect of exchange rate changes on cash and cash equivalents		0			0			28			0			28
Net increase in cash and cash equivalents		0			5,618			3,180			0			8,798
Cash and cash equivalents at beginning of period		0			11,368			9,531			0			20,899
Cash and cash equivalents at end of period	$	0		$	16,986		$	12,711		$	0		$	29,697