NOTES OFFERING, GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

6 Months Ended

Jun. 30, 2011

NOTES OFFERING, GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

NOTES OFFERING, GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

(7) NOTES OFFERING, GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

In November 2010, the Company completed an offering of $333.0 million Senior Secured Notes due in 2016.  Interest is payable on the Senior Secured Notes twice a year on June 1 and December 1, beginning June 1, 2011.  The Company’s present and future restricted subsidiaries guarantee the Senior Secured Notes with unconditional guarantees of payment.

All of the Company’s restricted subsidiaries have jointly and severally guaranteed the indebtedness under the Senior Secured Notes.  Full financial statements of the Guarantors have not been included because, pursuant to their respective guarantees, the Guarantors are jointly and severally liable with respect to the Senior Secured Notes.  The Company’s unrestricted subsidiary, CWFR is a not a guarantor of the Senior Secured Notes.

The following are summarized statements setting forth certain financial information concerning the Guarantor Subsidiaries as of and for the six months ended June 30, 2011 (in thousands).

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Cash & cash equivalents	$	12,014		$	7,536		$	—	$	—		$	19,550
Accounts receivable - net of allowance for doubtful accounts	470			185,811					(159,094		)	27,187
Inventories	—			63,292			—		—			63,292
Other current assets	3,349			13,948			—		—			17,297
Total current assets	15,833			270,587			—		(159,094		)	127,326
Property and equipment, net	3,125			22,059			—		—			25,184
Intangible assets	11,797			6,027			—		—			17,824
Goodwill	49,944			—			—		—			49,944
Investment in subsidiaries	739,050			—			—		(739,050		)	—
Affiliate note and investments	40,000			4,617			—		(40,000		)	4,617
Other assets	4,411			2,790			—		—			7,201
Total assets	$	864,160		$	306,080		$	—	$	(938,144	)	$	232,096
Accounts payable	$	3,321		$	15,413		$	—	$	—		$	18,734
Accrued and other liabilities	14,043			20,457			—		—			34,500
Current portion of long-term debt	171,594			40,000			—		(199,094		)	12,500
Current portion of deferred revenue	1,833			57,403			—		—			59,236
Total current liabilities	190,791			133,273					(199,094		)	124,970
Deferred revenue	2,107			30,916			—		—			33,023
Long-term debt	314,001			6,409			—		—			320,410
Other long-term liabilities	606,837			(603,568		)	—		—			3,269
Total liabilities	1,113,736			(432,970		)			(199,094		)	481,672
Interdivisional equity	—			739,050			—		(739,050		)	—
Stockholders’ deficit	(249,576		)	—			—		—			(249,576		)
Total liabilities & stockholders’ deficit	$	864,160		$	306,080		$	—	$	(938,144	)	$	232,096
Revenue	$	2,613		$	231,044		$	—	$	—		$	233,657
Costs applicable to revenues	(3,887		)	(135,557		)	—		—			(139,444		)
Operating expenses	(7,797		)	(63,308		)	—		—			(71,105		)
Interest expense, net	(22,669		)	293			—		—			(22,376		)
Income from investment in consolidated subsidiaries	30,422			—			—		(30,422		)	—
Other non operating income (expenses)	4,035			(2,050		)	—		—			1,985
Income tax expense	(120		)	—			—		—			(120		)
Net income	$	2,597		$	30,422		$	—	$	(30,422	)	$	2,597
Cash flows from operations	$	(25,369	)	$	32,407		$	—	$	—		$	7,038
Cash flows provided by (used in) investing activities	(89		)	(2,555		)	—		—			(2,644		)
Cash flows provided by (used in) financing activities	35,401			(35,608		)	—		—			(207		)
Cash at beginning of year	2,071			13,292			—		—			15,363
Cash at end of period	$	12,014		$	7,536		$	—	$	—		$	19,550

The following are summarized statements setting forth certain financial information concerning the Guarantor Subsidiaries as of and for the three months ended June 30, 2011 (in thousands).

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Revenue	$	1,218		$	127,872		$	—	$	—		$	129,090
Costs applicable to revenues	(1,862		)	(74,701		)	—		—			(76,563		)
Operating expenses	(3,974		)	(33,051		)	—		—			(37,025		)
Interest expense, net	(11,338		)	135			—		—			(11,203		)
Income from investment in consolidated subsidiaries	19,294			—			—		(19,294		)	—
Other non operating income (expenses)	1,878			(961		)	—		—			917
Income tax expense	(26		)	—			—		—			(26		)
Net income	$	5,190		$	19,294		$	—	$	(19,294	)	$	5,190

The following are summarized balance sheet statements setting forth certain financial information concerning the Guarantor Subsidiaries as of December 31, 2010 (in thousands).

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Cash & cash equivalents	$	2,071		$	13,292		$	—	$	—		$	15,363
Accounts receivable - net of allowance for doubtful accounts	1,721			189,037					(160,543		)	30,215
Inventories	—			52,673			—		—			52,673
Other current assets	2,233			12,361			—		—			14,594
Total current assets	6,025			267,363			—		(160,543		)	112,845
Property and equipment, net	3,375			23,856			—		—			27,231
Intangible assets	12,409			8,443			—		—			20,852
Goodwill	49,944			—			—		—			49,944
Investment in subsidiaries	711,298			—			—		(711,298		)	—
Affiliate note and investments	40,000			4,508			—		(40,000		)	4,508
Other assets	4,506			2,132			—		—			6,638
Total assets	$	827,557		$	306,302		$	—	$	(911,841	)	$	222,018
Accounts payable	$	1,289		$	9,752		$	—	$	—		$	11,041
Accrued and other liabilities	14,170			20,294			—		—			34,464
Current portion of long-term debt	160,544			40,106			—		(200,543		)	107
Current portion of deferred revenue	507			56,082			—		—			56,589
Total current liabilities	176,510			126,234					(200,543		)	102,201
Deferred revenue	2,168			31,632			—		—			33,800
Long-term debt	326,083			6,041			—		—			332,124
Other long-term liabilities	574,969			(568,903		)	—		—			6,066
Total liabilities	1,079,730			(404,996		)			(200,543		)	474,191
Interdivisional equity	—			711,298			—		(711,298		)	—
Stockholders’ deficit	(252,173		)	—			—		—			(252,173		)
Total liabilities & stockholders’ deficit	$	827,557		$	306,302		$	—	$	(911,841	)	$	222,018

The following are summarized statements setting forth certain financial information concerning the Guarantor Subsidiaries for the six months ended June 30, 2010 (in thousands).

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Revenue	$	925		$	236,091		$	—	$	—		$	237,016
Costs applicable to revenues	(3,967		)	(139,010		)	—		—			(142,977		)
Operating expenses	(17,181		)	(65,359		)	—		—			(82,540		)
Interest expense, net	(19,290		)	485			—		—			(18,805		)
Income from investment in consolidated subsidiaries	29,347			—			—		(29,347		)	—
Other non operating income (expenses)	2,304			(2,802		)	—		—			(498		)
Income tax expense	(144		)	(58		)	—		—			(202		)
Net income	$	(8,006	)	$	29,347		$	—	$	(29,347	)	$	(8,006	)
Cash flows from operations	$	(30,159	)	$	26,458		$	—	$	—		$	(3,701	)
Cash flows provided by (used in) investing activities	(906		)	137			—		—			(769		)
Cash flows provided (used in) by financing activities	39,567			(31,148		)	—		—			8,419
Cash at beginning of year	402			8,238			—		—			8,640
Cash at end of year	$	8,904		$	3,685		$	—	$	—		$	12,589

The following are summarized statements setting forth certain financial information concerning the Guarantor Subsidiaries for the three months ended June 30, 2010 (in thousands).

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Revenue	$	372		$	130,710		$	—	$	—		$	131,082
Costs applicable to revenues	(1,913		)	(77,133		)	—		—			(79,046		)
Operating expenses	(5,883		)	(34,576		)	—		—			(40,459		)
Interest expense, net	(9,871		)	221			—		—			(9,650		)
Income from investment in consolidated subsidiaries	17,795			—			—		(17,795		)	—
Other non operating income (expenses)	1,251			(1,398		)	—		—			(147		)
Income tax expense	(30		)	(29		)	—		—			(59		)
Net income	$	1,721		$	17,795		$	—	$	(17,795	)	$	1,721