NOTES OFFERING, GUARANTOR AND NON-GUARANTOR FINANCIAL INFORMATION

9 Months Ended

Sep. 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 nine months ended September 30, 2011 (in thousands).

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Cash & cash equivalents	$	17,140		$	8,585		$	—	$	—		$	25,725
Accounts receivable - net of allowance for doubtful accounts	9,457			177,105					(158,345		)	28,217
Inventories	—			59,290			—		—			59,290
Other current assets	2,262			17,300			—		—			19,562
Total current assets	28,859			262,280			—		(158,345		)	132,794
Property and equipment, net	3,095			20,327			—		—			23,422
Intangible assets	11,415			4,913			—		—			16,328
Goodwill	49,944			—			—		—			49,944
Investment in subsidiaries	740,390			—			—		(740,390		)	—
Affiliate note and investments	40,000			4,464			—		(40,000		)	4,464
Other assets	4,376			2,641			—		—			7,017
Total assets	$	878,079		$	294,625		$	—	$	(938,735	)	$	233,969
Accounts payable	$	2,234		$	15,866		$	—	$	—		$	18,100
Accrued and other liabilities	23,675			18,618			—		—			42,293
Current portion of long-term debt	170,845			40,000			—		(198,345		)	12,500
Current portion of deferred revenue	646			64,884			—		—			65,530
Total current liabilities	197,400			139,368					(198,345		)	138,423
Deferred revenue	2,076			30,289			—		—			32,365
Long-term debt	314,220			—			—		—			314,220
Other long-term liabilities	617,510			(615,422		)	—		—			2,088
Total liabilities	1,131,206			(445,765		)			(198,345		)	487,096
Interdivisional equity	—			740,390			—		(740,390		)	—
Member’s deficit	(253,127		)	—			—		—			(253,127		)
Total liabilities & member’s deficit	$	878,079		$	294,625		$	—	$	(938,735	)	$	233,969
							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Revenue	$	5,571		$	356,691		$	—	$	—		$	362,262
Costs applicable to revenues	(7,156		)	(210,103		)	—		—			(217,259		)
Operating expenses	(12,576		)	(97,298		)	—		—			(109,874		)
Interest expense, net	(34,053		)	480			—		—			(33,573		)
Income from investment in consolidated subsidiaries	31,762			—			—		(31,762		)	—
Other non operating income (expenses)	21,186			(18,003		)	—		—			3,183
Income tax expense	(158		)	(5		)	—		—			(163		)
Net income	$	4,576		$	31,762		$	—	$	(31,762	)	$	4,576
Cash flows from operations	$	(25,159	)	$	51,117		$	—	$	—		$	25,958
Cash flows provided by (used in) investing activities	(560		)	(2,702		)	—		—			(3,262		)
Cash flows provided by (used in) financing activities	40,788			(53,122		)	—		—			(12,334		)
Cash at beginning of year	2,071			13,292			—		—			15,363
Cash at end of period	$	17,140		$	8,585		$	—	$	—		$	25,725

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

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Revenue	$	2,958		$	125,647		$	—	$	—		$	128,605
Costs applicable to revenues	(3,269		)	(74,546		)	—		—			(77,815		)
Operating expenses	(4,779		)	(33,990		)	—		—			(38,769		)
Interest expense, net	(11,384		)	187			—		—			(11,197		)
Income from investment in consolidated subsidiaries	1,340			—			—		(1,340		)	—
Other non operating income (expenses)	17,151			(15,953		)	—		—			1,198
Income tax expense	(38		)	(5		)	—		—			(43		)
Net income	$	1,979		$	1,340		$	—	$	(1,340	)	$	1,979

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	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 nine months ended September 30, 2010 (in thousands).

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Revenue	$	3,258		$	358,398		$	—	$	—		$	361,656
Costs applicable to revenues	(7,507		)	(211,565		)	—		—			(219,072		)
Operating expenses	(22,432		)	(96,896		)	—		—			(119,328		)
Interest expense, net	(29,179		)	603			—		—			(28,576		)
Income from investment in consolidated subsidiaries	46,270			—			—		(46,270		)	—
Other non operating income (expenses)	3,517			(4,185		)	—		—			(668		)
Income tax expense	(174		)	(85		)	—		—			(259		)
Net income	$	(6,247	)	$	46,270		$	—	$	(46,270	)	$	(6,247	)
Cash flows from operations	$	(45,904	)	$	42,208		$	—	$	—		$	(3,696	)
Cash flows provided by (used in) investing activities	(1,250		)	(1,149		)	—		—			(2,399		)
Cash flows provided (used in) by financing activities	56,670			(48,469		)	—		—			8,201
Cash at beginning of year	402			8,238			—		—			8,640
Cash at end of period	$	9,918		$	828		$	—	$	—		$	10,746

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

							NON-					GSE
	GSE			GUARANTORS			GUARANTOR		ELIMINATIONS			CONSOLIDATED
Revenue	$	2,333		$	122,307		$	—	$	—		$	124,640
Costs applicable to revenues	(3,540		)	(72,555		)	—		—			(76,095		)
Operating expenses	(5,251		)	(31,537		)	—		—			(36,788		)
Interest expense, net	(9,889		)	118			—		—			(9,771		)
Income from investment in consolidated subsidiaries	16,923			—			—		(16,923		)	—
Other non operating income (expenses)	1,213			(1,383		)	—		—			(170		)
Income tax expense	(30		)	(27		)	—		—			(57		)
Net income	$	1,759		$	16,923		$	—	$	(16,923	)	$	1,759