##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   Commission File Number:
    001-32407
    AMERICAN REPROGRAPHICS
    COMPANY
 (Exact name of Registrant as
    specified in its Charter)
  Delaware

20-1700361(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   700 North Central Avenue, Suite 550
 Glendale, California 91203
 (818) 500-0225
 (Address, including zip code,
    and telephone number,
 including area code, of
    Registrants principal executive offices)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, par value

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 NONE
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  þ o o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 



AMERICAN
    REPROGRAPHICS COMPANY
  ANNUAL
    REPORT ON
    FORM 10-K
    for the fiscal year ended December 31, 2006
  
 Table of Contents
  PagePART I


3Item 1.


Business


3Item 1A.


Risk
    Factors


10Item 1B.


Unresolved Staff
    Comments


14Item 2.


Properties


15Item 3.


Legal
    Proceedings


15Item 4.


Submission of
    Matters to a Vote of Security Holders


15PART II


16Item 5.


Market for
    Registrants Common Equity, Related Stockholder Matters and
    Issuer Purchases of Equity Securities


16Item 6.


Selected
    Consolidated Financial Data


19Item 7.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operation


20Item 7A.


Quantitative and
    Qualitative Disclosures About Market Risk


40Item 8.


Consolidated
    Financial Statements and Supplementary Data


41Item 9.


Changes in and
    Disagreements with Accountants On Accounting And Financial
    Disclosure


41Item 9A.


Controls and
    Procedures


41Item 9B.


Other
    Information


41PART III


42Item 10.


Directors and
    Executive Officers of the Registrant


42Item 11.


Executive
    Compensation


45Item 12.


Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


57Item 13.


Certain
    Relationships and Related Transactions


60Item 14.


Principal
    Accounting Fees and Services


64PART IV


65Item 15.


Exhibits, Financial
    Statement Schedules


65EXHIBIT 10.13EXHIBIT 10.24EXHIBIT 10.26EXHIBIT 10.48EXHIBIT 10.50EXHIBIT 10.61EXHIBIT 10.62EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY 2006 ANNUAL REPORT
  In this report, American Reprographics Company,
    ARC, the company, we,
    us, and our refer to American
    Reprographics Company and its consolidated subsidiaries, unless
    the context otherwise dictates.
  FORWARD-LOOKING
    STATEMENTS
        
    general economic conditions and a downturn in the architectural,
    engineering and construction industry;
    competition in our industry and innovation by our competitors;
    our failure to anticipate and adapt to future changes in our
    industry;
    uncertainty regarding our product and service innovations;
    the inability to charge for our value-added services to offset
    potential declines in print volumes;
    adverse developments affecting the State of California,
    including general and local economic conditions, macroeconomic
    trends, and natural disasters;
    our inability to successfully identify potential acquisitions,
    manage our acquisitions or open new branches;
    our inability to successfully monitor and manage the business
    operations of our subsidiaries and uncertainty regarding the
    effectiveness of financial and management policies and
    procedures we established to improve accounting controls;
    adverse developments concerning our relationships with certain
    key vendors;
    our inability to adequately protect our intellectual property
    and litigation regarding intellectual property;
    acts of terrorism, violence, war, natural disaster or other
    circumstances that cause damage or disruption to us, our
    facilities, our technology centers, our vendors or our customers;
    the loss of key personnel or qualified technical staff;
    the potential writedown of goodwill or other intangible assets
    we have recorded in connection with our acquisitions;
    the availability of cash to operate and expand our business as
    planned and to service our debt;
    failure to maintain an effective system of internal controls
    necessary to accurately report our financial results and prevent
    fraud; and
    potential environmental liabilities.   1




---



##### Table of Contents



Form 10-K, Form 10-Q, Form 8-K,
    TRADEMARKS
    AND TRADE NAMES
  SM SM TM SM SM TM SM SM ® ® SM Sub-Hub SM
 2




---



##### Table of Contents



PART I  Item 1.
    Business  Our
    Company
  business-to-business business-to-business print-on-demand, on-site
          (818) 500-0225.
 3




---



##### Table of Contents



Available
    Information
  1-800-SEC-0330 www.sec.gov.
  www.e-arc.com. www.e-arc.com Form 10-K, Form 10-Q, Form 8-K 925-945-5100
  Corporate
    Background and Reorganization
      Acquisitions
      Industry
    Overview
   4




---



##### Table of Contents



business-to-business point-of-purchase
  Our
    Competitive Strengths
    
    Leading Market Position in Fragmented
    Industry.  Our size and national footprint provide
    us with significant purchasing power, economies of scale, the
    ability to invest in industry-leading technologies, and the
    resources to service large, national customers.
    Leader in Technology and Innovation.  We
    believe our PlanWell online planrooms are well positioned to
    become the industry standard for managing and procuring
    reprographics services within the AEC industry. In addition, we
    have developed other proprietary software applications that
    complement PlanWell and have enabled us to improve the
    efficiency of our services, add services and increase our
    revenue.
    Extensive National Footprint with Regional
    Expertise.  Our national network of service
    centers maintains local customer relationships while benefiting
    from centralized corporate functions and national scale. Our
    service facilities are organized as hub and satellite structures
    within individual markets, allowing us to balance production
    capacity and minimize capital expenditures through
    technology-sharing among our service centers within each market.
    In addition, we serve our national and regional customers under
    a single contract through our Premier Accounts business unit,
    while offering centralized access to project specific services,
    billing, and tracking information.
    Flexible Operating Model.  By promoting
    regional decision making for marketing, pricing, and selling
    practices, we remain responsive to our customers while
    benefiting from the cost structure advantages of our centralized
    administrative functions. Our flexible operating model also
    allows us to capitalize on an improving business environment.
    Consistent, Strong Cash Flow.  Through
    management of our inventory and receivables and our low capital
    expenditure requirements, we have consistently generated strong
    cash flow from operations after capital expenditures regardless
    of industry and economic conditions.
    Low Cost Operator.  We believe we are one of
    the lowest cost operators in the reprographics industry, which
    we have accomplished by minimizing branch level expenses and
    capitalizing on our significant scale for purchasing
    efficiencies. 5




---



##### Table of Contents




    Experienced Management Team and Highly Trained
    Workforce.  Our senior management team has an
    average of over 20 years of industry experience and it is
    our preferred practice to maintain the senior management of the
    companies we acquire.  Our
    Services
  business-to-business print-on-demand.
  Document Management.
  Document Distribution and Logistics. pick-up
  Print-on-demand.
  On-site
    services. on-site
  print-on-demand
    
    PlanWell, our proprietary, internet-based planroom launched in
    June 2000, and our suite of other reprographics software
    products that enable the online purchase and fulfillment of
    document management services.
    Production services, including
    print-on-demand,
    document assembly, document finishing, mounting, laminating,
    binding, and kitting. Documents can be digitally transferred
    from one service facility to another to balance production
    capacity or take advantage of a distribute and print
    operating system.
    Document distribution and logistics, including the physical pick
    up, delivery, and shipping of time-sensitive, critical documents.
    Highly customized large and small format reprographics in color
    and black and white. This includes digital reproduction of
    posters, tradeshow displays, plans, banners, signage and maps.
    Facilities management, including recurring
    on-site
    document management services and staffing at our customers
    locations.
    Sales of reprographics equipment and supplies and licensing of
    software to other reprographics companies and end-users in the
    AEC industry. 6




---



##### Table of Contents




    The design and development of other document management and
    reprographics software, in addition to PlanWell, that supports
    ordering, tracking, job costing, and other customer specific
    accounting information for a variety of projects and services.
    These proprietary applications include:  
    Electronic Work Order (EWO), which offers our customers
    access to the services of all of our service centers through the
    internet.
    Abacus Print Cost Recovery (PCR) System, which provides a
    suite of software modules for reprographers and their customers
    to track documents produced from equipment installed as a part
    of a facilities management program.
    BidCaster
    Invitation-to-Bid
    (ITB), a data management internet application inside
    PlanWell Enterprise that issues customizable invitations
    to bid from a customers desktop using email and a
    hosted fax server.
    MetaPrint Print Automation and Device Manager, a
    universal print driver that facilitates the printing of
    documents with output devices manufactured by multiple vendors,
    and allows the reprographer to print multiple documents in
    various formats as a single print submission.
    OneView Document Access and Customer Administration
    System, an internet-based application that leverages the
    security attributes of PlanWell to provide a single point of
    access to all of a customers project documents inside
    PlanWell planrooms, regardless of which of our local production
    facilities stores the relevant documents.
    Sub-Hub,
    an internet-based application that notifies subscribers of
    upcoming construction jobs in their markets and allows them to
    view plans online and order paper copies from a reprographer.    
    License our suite of reprographics technology products,
    including our flagship online planroom, PlanWell, to independent
    reprographers.
    Operate PEiR (Profit and Education in Reprographics), a trade
    organization wholly owned by us, through which we charge
    membership fees and provide purchasing, technology and
    educational benefits to other reprographers. PEiR members are
    required to license PlanWell and may purchase equipment and
    supplies at a lower cost than they could obtain independently.
    We also distribute our educational programs to PEiR members to
    help establish and promote best practices within the
    reprographics industry.  Customers
    Operations
  Geographic Presence.
  Hub and Satellite Configuration.
 7




---



##### Table of Contents




    Central Hub Facilities.  In each of our major
    markets, we operate one or more large scale full service
    facilities that have high production capacity and sophisticated
    equipment. These larger facilities offer specialized services
    such as laser digital imaging on photographic material, large
    format color printing, and finishing services that may not be
    economically viable for smaller facilities to provide. Our
    central hub facilities also coordinate our facilities management
    programs.
    Satellite Facilities.  To supplement the
    capabilities of our central hub facilities, we operate satellite
    facilities that are typically located closer to our customers
    than the central hubs. Our satellite facilities have quick
    turnaround capabilities, responsive, localized service, and
    handle the majority of digital processes.
    Management Systems and Controls.  We operate
    our business under a dual operating structure of centralized
    administrative functions and regional decision making. Acquired
    companies typically retain their local business identities,
    managers, sales force, and marketing efforts in order to
    maintain strong local relationships. Our local management
    maintains autonomy over the
    day-to-day
    operations of their business units, including profitability,
    customer billing, receivables collection, and service mix
    decisions.    Suppliers
    and Vendors
      Sales and
    Marketing
  Divisional Sales Force.
  Premier Accounts. print-on-demand
 8




---



##### Table of Contents



PEiR Group.
  Competition
    Research
    and Development
    Proprietary
    Rights
       9




---



##### Table of Contents



Information
    Technology
      e-commerce
  Employees
    Item 1A.
    Risk
    Factors  and/or
  Future
    downturns in the architectural, engineering and construction
    industry, or AEC industry, could diminish demand for our
    products and services, which would impair our future revenue and
    profitability.
     10




---



##### Table of Contents



Competition
    in our industry and innovation by our competitors may hinder our
    ability to execute our business strategy and maintain our
    profitability.
      The
    reprographics industry has undergone vast changes in the last
    seven years and will continue to evolve, and our failure to
    anticipate and adapt to future changes in our industry could
    harm our competitive position.
  On-site
    If we
    fail to continue to develop and introduce new services
    successfully, our competitive positioning and our ability to
    grow our business could be harmed.
   11




---



##### Table of Contents



If we
    are unable to charge for our value-added services to offset
    potential declines in print volumes, our long term revenue could
    decline.
    We
    derive a significant percentage of net sales from within the
    State of California and our business could be disproportionately
    harmed by an economic downturn or natural disaster affecting
    California.
    Our
    growth strategy depends in part on our ability to successfully
    identify and manage our acquisitions and branch openings.
    Failure to do so could impede our future growth and adversely
    affect our competitive position.
     12




---



##### Table of Contents



If we
    are unable to successfully monitor and manage the business
    operations of our subsidiaries, our business and profitability
    could suffer.
    We
    depend on certain key vendors for reprographics equipment,
    maintenance services and supplies, making us vulnerable to
    supply shortages and price fluctuations.
    Our
    failure to adequately protect the proprietary aspects of our
    technology, including PlanWell, may cause us to lose market
    share.
    Damage
    or disruption to our facilities, our technology centers, our
    vendors or a majority of our customers could impair our ability
    to effectively provide our services and may have a significant
    impact on our revenues, expenses and financial
    condition.
   13




---



##### Table of Contents



and/or back-up
    If we
    lose key personnel or qualified technical staff, our ability to
    manage the
    day-to-day
    aspects of our business will be adversely
    affected.
  day-to-day
  Item 1B.
    Unresolved
    Staff Comments   14




---



##### Table of Contents



Item 2.
    Properties    Number of





ReprographicsAdmin & IT


Square


Service


SquareRegion

Facilities


Footage


Centers


FootageSouthern California(1)


3



28,003



46



309,918Northern California(2)


1



5,796



39



277,307Pacific Northwest(3)


0



0



14



102,115Northeast


2



11,297



35



169,918Southern


1



3,711



65



334,644Midwest(4)


0



0



32



240,357Total


7



48,807



231



1,434,259     (1)
    
    Includes one service center in Mexico City, Mexico.(2)
    
    Includes two technology centers in Fremont, California, and one
    in Calcutta, India.(3)
    
    Includes two service centers in the Vancouver, British Columbia
    area.(4)
    
    Includes three service centers in the Toronto metropolitan area.    Item 3.
    Legal
    Proceedings  Louis Frey Case.
    Environmental
    and Regulatory Considerations
    Item 4.
    Submission
    of Matters to a Vote of Security Holders   15




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    High


LowFiscal Year 2005First Quarter(1)

$
15.64


$
13.00Second Quarter


16.20



13.42Third Quarter


18.29



15.85Fourth Quarter


25.95



16.55Fiscal Year 2006First Quarter

$
35.80


$
25.00Second Quarter


38.98



30.06Third Quarter


38.51



28.45Fourth Quarter


36.27



29.16     (1)
    
    Beginning on February 4, 2005, the first day that our stock
    was listed on the NYSE. 16




---



##### Table of Contents



23-month
  COMPARISON
    OF 23 MONTH CUMULATIVE TOTAL RETURN*
 Among American Reprographics Company, The Russell 2000
    Index
 And The S&P 600 Diversified
    Commercial &Professional Services
  
  *
    $100 invested on 2/4/05 in stock or index-including reinvestment
    of dividends. Fiscal year ending December 31.  ©
  2/05


2/05


3/05


4/05


5/05


6/05


7/05


8/05


9/05American Reprographic Company



100




105




104




102




108




117




129




124




124Russell 2000



100




100




97




91




97




101




107




105




106S&P 600 Diversified Commercial
    & Professional Services



100




101




99




92




98




103




108




110




109   10/05


11/05


12/05


1/06


2/06


3/06


4/06


5/06


6/06American Reprographic Company



123




156




185




199




209




252




258




252




264Russell 2000



102




107




107




116




116




122




122




115




116S&P 600 Diversified Commercial
    & Professional Services



97




102




101




103




105




112




114




108




101   7/06


8/06


9/06


10/06


11/06


12/06American Reprographic Company



233




222




223




258




227




242Russell 2000



112




115




116




123




126




126S&P 600 Diversified Commercial
    & Professional Services



101




104




108




117




113




116  17




---



##### Table of Contents



The stock price performance included in this graph is not
    necessarily indicative of future stock price performance.
    Holders
    Dividends
    Sales of
    Unregistered Securities
   18




---



##### Table of Contents



Item 6.
    Selected
    Consolidated Financial Data    Fiscal Year Ended December 31,2002


2003


2004


2005


2006(Dollars in thousands)Statement of Operations
    Data:Reprographics services

$
324,402


$
315,995


$
333,305


$
369,123


$
438,375Facilities management


52,290



59,311



72,360



83,125



100,158Equipment and supplies sales


42,232



40,654



38,199



41,956



53,305Total net sales


418,924



415,960



443,864



494,204



591,838Cost of sales


247,778



252,028



263,787



289,580



337,509Gross Profit


171,146



163,932



180,077



204,624



254,329Selling, general and
    administrative expenses


103,305



101,252



105,780



112,679



131,743Litigation Reserve


















11,262Provision for sales tax dispute
    settlement










1,389







Amortization of intangibles


1,498



1,709



1,695



2,120



5,055Income from operations


66,343



60,971



71,213



89,825



106,269Other income


541



1,024



420



381



299Interest expense, net


(39,917
)


(39,390
)


(33,565
)


(26,722
)


(23,192
)Loss on early extinguishment of
    debt






(14,921
)






(9,344
)


Income before income tax provision
    (benefit)


26,967



7,684



38,068



54,140



83,376Income tax provision (benefit)(1)


6,267



4,131



8,520



(6,336
)


31,982Net income


20,700



3,553



29,548



60,476



51,394Dividends and amortization of
    discount on preferred equity


(3,291
)


(1,730
)










Net income

$
17,409


$
1,823


$
29,548


$
60,476


$
51,394  19




---



##### Table of Contents



Fiscal Year Ended December 31,2002


2003


2004


2005


2006(In thousands, except per share amounts)Earnings per share:Basic

$
0.48


$
0.05


$
0.83


$
1.43


$
1.14Diluted

$
0.47


$
0.05


$
0.79


$
1.40


$
1.13Weighted average common shares
    outstanding:Basic


36,406



35,480



35,493



42,264



45,015Diluted


36,723



37,298



37,464



43,178



45,595   Fiscal Year Ended December 31,2002


2003


2004


2005


2006(Dollars in thousands)Other Financial Data:Depreciation and amortization

$
19,178


$
19,937


$
18,730


$
19,165


$
27,749Capital expenditures, net

$
5,209


$
4,992


$
5,898


$
5,237


$
7,391Interest expense, net

$
39,917


$
39,390


$
33,565


$
26,722


$
23,192   As of December 31,2002


2003


2004


2005


2006(Dollars in thousands)Balance Sheet Data:Cash and cash equivalents

$
24,995


$
17,315


$
13,826


$
22,643


$
11,642Total assets

$
395,128


$
374,716


$
377,334


$
442,362


$
547,581Long term obligations and
    mandatorily redeemable preferred and common stock(2)

$
378,102


$
360,008


$
338,371


$
253,371


$
252,097Total stockholders equity
    (deficit)

$
(61,082
)

$
(60,015
)

$
(35,009
)

$
113,569


$
184,244Working capital

$
24,371


$
16,809


$
22,387


$
35,797


$
19,828     (1)
    The Company was reorganized from a California limited liability
    company to a Delaware corporation immediately prior to the
    consummation of its initial public offering on February 9,
    2005. As a result of that reorganization, a deferred tax benefit
    of $27,701 was booked concurrent with the consummation of the
    IPO.(2)
    In July 2003, we adopted SFAS No. 150,
    Accounting for Certain Financial Instruments with
    Characteristics of both Liabilities and Equity. In
    accordance with SFAS No. 150, the redeemable preferred
    equity of Holdings has been reclassified in our financial
    statements as a component of our total debt upon our adoption of
    this new standard. The redeemable preferred equity amounted to
    $25.8 million as of December 31, 2003 and
    $27.8 million as of December 31, 2004.
    SFAS No. 150 does not permit the restatement of
    financial statements for periods prior to the adoption of this
    standard.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion should be read in conjunction with
    our consolidated financial statements and the related notes and
    other financial information appearing elsewhere in this Annual
    Report. This Annual Report contains forward-looking statements
    that involve risks and uncertainties. Our actual results may
    differ materially from those indicated in forward-looking
    statements. See Forward-Looking Statements and
    Risk Factors.
  Executive
    Summary
  business-to-business
 20




---



##### Table of Contents




    Document management;
    Document distribution & logistics;
    Print-on-demand; and
    On-site
    services, frequently referred to as facilities management, or
    FMs, (any combination of the above services supplied at a
    customers location).  on-site
          Evaluating our Performance.
  
    Creating consistent, profitable growth;
    Maintaining our industry leadership as measured by our
    geographical footprint, market share and revenue generation;
    Continuing to develop and invest in our products, services, and
    technology to meet the changing needs of our customers;
    Maintaining the lowest cost structure in the industry; and
    Maintaining a flexible capital structure that provides for both
    responsible debt service and pursuit of acquisitions and other
    high-return investments.  Primary Financial Measures.
 21




---



##### Table of Contents



Net Sales. print-on-demand
      print-on-demand
  On-site
          Costs and Expenses.
  three-to-five
 22




---



##### Table of Contents



Operating Cash.
  Other Common Financial Measures.
  
    Net income and earnings per share;
    EBIT;
    EBITDA;
    Material costs as a percentage of net sales; and
    Days Sales Outstanding/Days Sales Inventory/Days Accounts
    Payable.  location-by-location
      Acquisitions.
        Standalone
    Acquisitions.
 23




---



##### Table of Contents



Branch/Fold-in
    Acquisitions. (fold-in)
    Recent Developments.
    
    An increase in the aggregate purchase price limitation for
    business acquisitions commencing with fiscal year ending
    December 31, 2006;
    An increase in the threshold for capital expenditures during any
    trailing twelve-month period; and
    Permit the Company to issue certain shares of its common stock
    in connection with certain proposed acquisitions.  Form 10-K.
  Economic Factors Affecting Financial
    Performance.
  Non-GAAP Measures
     24




---



##### Table of Contents




    They do not reflect our cash expenditures, or future
    requirements for capital expenditures and contractual
    commitments;
    They do not reflect changes in, or cash requirements for, our
    working capital needs;
    They do not reflect the significant interest expense, or the
    cash requirements necessary to service interest or principal
    payments on our debt;
    Although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized will often have to be
    replaced in the future, and EBITDA does not reflect any cash
    requirements for such replacements; and
    Other companies, including companies in our industry, may
    calculate these measures differently than we do, limiting their
    usefulness as comparative measures.     25




---



##### Table of Contents



Fiscal Year Ended December 31,2004


2005


2006Cash flows provided by operating
    activities

$
60,858


$
56,648


$
98,354Changes in operating assets and
    liabilities


(3,830
)


8,859



(10,138
)Non-cash (expenses) income,
    including depreciation and amortization


(27,480
)


(5,031
)


(36,822
)Income tax provision (benefit)


8,520



(6,336
)


31,982Interest expense, net


33,565



26,722



23,192Loss on early extinguishment of
    debt






9,344



EBIT


71,633



90,206



106,568Depreciation and amortization


18,730



19,165



27,749EBITDA


90,363



109,371



134,317Interest expense


(33,565
)


(26,722
)


(23,192
)Loss on early extinguishment of
    debt






(9,344
)


Income tax provision (benefit)


(8,520
)


6,336



(31,982
)Depreciation and amortization


(18,730
)


(19,165
)


(27,749
)Net income

$
29,548


$
60,476


$
51,394     Fiscal Year Ended December 31,2004


2005


2006Net income

$
29,548


$
60,476


$
51,394Dividends and amortization of
    discount on preferred equity










Interest expense, net


33,565



26,722



23,192Loss on early extinguishment of
    debt






9,344



Income tax provision (benefit)


8,520



(6,336
)


31,982EBIT


71,633



90,206



106,568Depreciation and amortization


18,730



19,165



27,749EBITDA

$
90,363


$
109,371


$
134,317     Fiscal Year EndedDecember 31,2004


2005


2006Net income margin


6.7
%


12.2
%


8.7
%Interest expense, net


7.6
%


5.4
%


3.9
%Loss on early extinguishment of
    debt






1.9
%


Income tax provision (benefit)


1.9
%


(1.3
)%


5.4
%EBIT margin


16.2
%


18.2
%


18.0
%Depreciation and amortization


4.2
%


3.9
%


4.7
%EBITDA margin


20.4
%


22.1
%


22.7
%  26




---



##### Table of Contents



Fiscal Year Ended December 31,2004


2005


2006Net income

$
29,548


$
60,476


$
51,394Litigation reserve










11,262Interest expense due to litigation
    reserve










2,685Income tax benefit due to
    litigation reserve










(5,579
)Income tax benefit due to
    reorganization






(27,701
)


Loss on refinance of debt, net of
    tax






5,558



Unaudited adjusted incremental
    income tax provision


(9,196
)


(333
)


Unaudited adjusted net income

$
20,352


$
38,000


$
59,762Earning Per Share (Actual):Basic

$
0.83


$
1.43


$
1.14Diluted

$
0.79


$
1.40


$
1.13Earning Per Share (Adjusted):Basic

$
0.57


$
0.90


$
1.33Diluted

$
0.54


$
0.88


$
1.31Weighted average common shares
    outstanding:Basic


35,493,136



42,264,001



45,014,786Diluted


37,464,123



43,178,000



45,594,950  27




---



##### Table of Contents



Results
    of Operations
    As a Percentage of Net SalesFiscal Year Ended December 31,2004


2005


2006Net sales


100.0
%


100.0
%


100.0
%Cost of sales


59.4



58.6



57.0Gross profit


40.6



41.4



43.0Selling, general and
    administrative expenses


23.8



22.8



22.3Litigation Reserve










1.9Provision for sales tax dispute
    settlement


0.3







Amortization of intangibles


0.4



0.4



0.9Income from operations


16.1



18.2



18.0Other income


0.1



0.1



0.0Interest expense, net


(7.6
)


(5.4
)


(3.9
)Loss on early extinguishment of
    debt






(1.9
)


Income before income tax provision


8.6



11.0



14.1Income tax provision (benefit)


(1.9
)


1.2



(5.4
)Net income


6.7
%


12.2
%


8.7
%   Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Fiscal Year EndedDecember 31,


Increase (decrease)2005


2006


(In dollars)


(Percent)(In millions)Reprographics services

$
369.1


$
438.4


$
69.3



18.8
%Facilities management


83.1



100.1



17.0



20.5
%Equipment and supplies sales


42.0



53.3



11.3



26.9
%Total net sales

$
494.2


$
591.8


$
97.6



19.8
%Gross profit

$
204.6


$
254.3


$
49.7



24.3
%Selling, general and
    administrative expenses

$
112.7


$
131.7


$
19.0



16.9
%Litigation reserve





$
11.3


$
11.3



100.0
%Amortization of intangibles

$
2.1


$
5.1


$
3.0



142.9
%Interest expense, net

$
26.7


$
23.2


$
(3.5
)


(13.1
)%Income taxes provision (benefit)

$
(6.3
)

$
32.0


$
38.3



(607.9
)%Net Income

$
60.5


$
51.4


$
(9.1
)


(15.0
)%EBITDA

$
109.4


$
134.3


$
24.9



22.8
%   Net
    Sales.
    Reprographics services.
 28




---



##### Table of Contents



Facilities management. on-site on-site on-site
  Equipment and supplies sales.
  Gross
    Profit.
    on-site
    Selling, General and Administrative
    Expenses.
 29




---



##### Table of Contents



Amortization of Intangibles. not-to-compete
  Interest Expense. year-over-year.
  Income Taxes.
  Net Income.
  EBITDA.
 30




---



##### Table of Contents



Year
    Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
  Fiscal Year EndedDecember 31,


Increase (decrease)2004


2005


(In dollars)


(Percent)(In millions)Reprographics services

$
333.3


$
369.1


$
35.8



10.7
%Facilities management


72.4



83.1



10.7



14.8
%Equipment and supplies sales


38.2



42.0



3.8



10.0
%Total net sales

$
443.9


$
494.2


$
50.3



11.3
%Gross profit

$
180.1


$
204.6


$
24.5



13.6
%Selling, general and
    administrative expenses

$
105.8


$
112.7


$
6.9



6.5
%Provision for sales tax liability

$
1.4






$
(1.4
)


n/aAmortization of intangibles

$
1.7


$
2.1


$
0.4



23.5
%Interest expense, net

$
33.6


$
26.7


$
(6.9
)


(20.5
)%Income taxes provision (benefit)

$
8.5


$
(6.3
)

$
(14.8
)


(174.1
)%Net Income

$
29.5


$
60.5


$
31.0



105.1
%EBITDA

$
90.4


$
109.0


$
18.6



20.6
%   Reprographics Services.
  Facilities management. on-site year-over-year on-site on-site on-site
  Equipment and supplies sales. on-site
 31




---



##### Table of Contents



Gross
    Profit.
    on-site
    Selling, General and Administrative
    Expenses.
  Amortization of Intangibles. not-to-compete
  Interest Expense, Net. year-over-year.
  Income Taxes.
  Net Income.
 32




---



##### Table of Contents



EBITDA.
  Quarterly
    Results of Operations
    Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2005


2006Reprographics services


87,695



94,708



94,730



91,990



104,817



114,658



111,176



107,724Facilities management


19,172



21,076



21,577



21,300



22,932



24,691



25,814



26,721Equipment and supplies sales


9,599



9,776



11,180



11,401



13,053



12,178



15,548



12,526Total net sales

$
116,466


$
125,560


$
127,487


$
124,691


$
140,802


$
151,527


$
152,538


$
146,971Quarterly sales as a % of annual
    sales


23.6
%


25.4
%


25.8
%


25.2
%


23.8
%


25.6
%


25.8
%


24.8
%Gross profit

$
48,325


$
53,654


$
52,522


$
50,124


$
60,359


$
65,814


$
67,007


$
61,149Income from operations

$
21,060


$
25,083


$
23,604


$
20,078


$
28,088


$
20,573


$
30,917


$
26,691EBITDA

$
25,608


$
29,648


$
28,685


$
25,431


$
34,052


$
27,416


$
38,020


$
34,829Net Income

$
35,563


$
11,383


$
10,518


$
3,012


$
14,375


$
8,427


$
15,756


$
12,836     Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2005


2006EBITDA

$
25,608


$
29,648


$
28,685


$
25,431


$
34,052


$
27,416


$
38,020


$
34,829Interest expense


(8,324
)


(6,194
)


(6,131
)


(6,074
)


(4,459
)


(7,001
)


(5,810
)


(5,922
)Loss on early extinguishment of
    debt














(9,344
)














Income tax benefit (provision)


22,709



(7,612
)


(7,018
)


(1,743
)


(9,583
)


(5,617
)


(8,993
)


(7,789
)Depreciation and amortization


(4,430
)


(4,459
)


(5,018
)


(5,258
)


(5,635
)


(6,371
)


(7,461
)


(8,282
)Net income

$
35,563


$
11,383


$
10,518


$
3,012


$
14,375


$
8,427


$
15,756


$
12,836   quarter-to-quarter
  Impact of
    Inflation
   33




---



##### Table of Contents



Liquidity
    and Capital Resources
    Year Ended December 31,2004


2005


2006Net cash provided by operating
    activities

$
60,858


$
56,648


$
98,354Net cash used in investing
    activities

$
(10,586
)

$
(27,547
)

$
(77,488
)Net cash used in financing
    activities

$
(53,761
)

$
(20,284
)

$
(31,867
)   Operating
    Activities
        Investing
    Activities
   34




---



##### Table of Contents



Financing
    Activities
      December 31,2004


2005


2006Cash and cash equivalents

$
13,826


$
22,643


$
11,642Working capital

$
22,387


$
35,797


$
19,828Mandatorily redeemable preferred
    and common membership units

$
27,814







Borrowings from senior secured
    credit facilities

$
320,833


$
230,423


$
215,651Other debt obligations and capital
    leases






43,389



57,494Total debt obligations

$
348,647


$
273,812


$
273,145           Debt
    Obligations
  Senior Secured Credit Facilities.
 35




---



##### Table of Contents




    An increase in the aggregate purchase price limitation for
    business acquisitions commencing with fiscal year ending
    December 31, 2006;
    An increase in the threshold for capital expenditures during any
    trailing twelve-month period; and
    Permit the company to issue certain shares of its common stock
    in connection with certain proposed acquisitions.          As of December 31, 2005


As of December 31, 2006Available








AvailableBorrowing


Interest





Borrowing


InterestBalance


Capacity


Rate


Balance


Capacity


Rate(Dollars in thousands)Term facility

$
230,423


$
50,000



6.20
%

$
215,651


$
50,000



7.10
%Revolving facility


5,000



20,722



8.25
%






25,945



9.00
%$
235,423


$
70,722






$
215,651


$
75,945     Redeemable Preferred Units.
 36




---



##### Table of Contents



Seller Notes.
  Off-Balance
    Sheet Arrangements
    Contractual
    Obligations and Other Commitments
    Years Ending December 31,2007


2008


2009


2010


2011


Thereafter(Dollars in thousands)Debt obligations

$
6,731


$
112,175


$
111,326


$
4,284


$
1,211


$
27Capital lease obligations


14,317



11,518



6,496



2,872



1,818



370Operating lease


29,807



21,495



15,607



10,501



6,182



12,801Total

$
50,855


$
145,188


$
133,429


$
17,657


$
9,211


$
13,198   Operating Leases.
  Contingent Transaction Consideration.
  Impact of
    Conversion from an LLC to a Corporation
   37




---



##### Table of Contents



Income
    Taxes
      Fiscal Year Ended December 31,2002


2003


2004


2005


2006(In thousands, except per unit/share amounts)Net income (loss) attributable to
    common members/stockholders

$
17,409


$
1,823


$
29,548


$
60,476


$
51,394Unaudited pro forma incremental
    income tax provision


6,211



673



9,196



333



Unaudited pro forma net income
    attributable to common members/stockholders

$
11,198


$
1,150


$
20,352


$
60,143


$
51,394Unaudited pro forma net income
    attributable to common members/stockholders per common
    unit/share:Basic

$
0.31


$
0.03


$
0.57


$
1.42


$
1.14Diluted

$
0.30


$
0.03


$
0.54


$
1.39


$
1.13   Stockholders
    Equity
    Critical Accounting Policies.
 38




---



##### Table of Contents



Goodwill
    and Other Intangible Assets
  and/or
        not-to-compete not-to-compete
  Allowance
    for Doubtful Accounts
    Commitments
    and Contingencies
    Stock-Based
    Compensation
   39




---



##### Table of Contents



Recent
    Accounting Pronouncements
    Considering the Effects of Prior Year
    Misstatements when Quantifying Misstatements in Current Year
    Financial Statements
  Fair Value Measurements
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk     40




---



##### Table of Contents



Item 8.
    Consolidated
    Financial Statements and Supplementary Data  page F-1
  Item 9.
    Changes
    in and Disagreements with Accountants On Accounting And
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure
    Controls and Procedures
  Rule 13a-15(e) 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rule 13a-15(f) 15(d)-15(f) Internal Control  Integrated
    Framework Form 10-K.
  Form 10-K.
  Changes
    in Internal Control Over Financial Reporting
    Item 9B.
    Other
    Information   41




---



##### Table of Contents



PART III  Item 10.
    Directors
    and Executive Officers of the Registrant  Board of
    Directors
    Year FirstName

Elected


AgeSathiyamurthy Chandramohan


1998
(1)


48Kumarakulasingam Suriyakumar


1998
(1)


53Thomas J. Formolo


2000
(2)


42Dewitt Kerry McCluggage


2006



52Mark W. Mealy


2005



49Manuel Perez de la Mesa


2002
(3)


49Eriberto R. Scocimara


2006



71     (1)
    
    Served as an advisor of Holdings since 1998 and as a director of
    ARC since October 2004.(2)
    
    Served as an advisor of Holdings since 2000 and as a director of
    ARC since October 2004.(3)
    
    Functioned as a director of Holdings since 2002 and served as a
    director of ARC since October 2004.    Sathiyamurthy (Mohan) Chandramohan
  Kumarakulasingam (Suri) Suriyakumar
  Thomas J. Formolo
  Dewitt Kerry McCluggage
 42




---



##### Table of Contents



Mark W. Mealy
  Manuel Perez de la Mesa
  Eriberto R. Scocimara Hungarian-American
  Executive
    Officers of the Registrant
    Name

Age

PositionSathiyamurthy Chandramohan


48


Chief Executive Officer; Chairman
    of the Board of DirectorsKumarakulasingam Suriyakumar


53


President; Chief Operating
    Officer; DirectorJonathan R. Mather


56


Chief Financial Officer; SecretaryRahul K. Roy


47


Chief Technology Officer     Jonathan R. Mather
  Rahul K. Roy
 43




---



##### Table of Contents



Audit
    Committee
      Section 16(a)
    Beneficial Ownership Reporting Compliance
  greater-than-ten-percent
   44




---



##### Table of Contents



Code of
    Ethics
  Regulation S-K
  Regulation S-K,
  Certain
    Executive Officer Certifications
  Form 10-K
    Item 11.
    Executive
    Compensation  Compensation
    Discussion and Analysis
    Executive
    Compensation Philosophy
     45




---



##### Table of Contents



Objectives
    
    To establish pay levels that attract, retain and motivate highly
    qualified executive officers while considering the overall
    market competitiveness for such executive talent and balancing
    the relationship between total stockholder return and direct
    compensation;
    To align executive officer remuneration with the interests of
    the stockholders;
    To recognize superior individual performance;
    To balance base and incentive compensation to complement the
    companys annual and longer term business objectives and
    strategies and encourage the fulfillment of those objectives and
    strategies through executive officer performance;
    To provide compensation opportunities based on the
    companys performance; and
    To encourage equity participation by executive officers.    Elements
    of Executive Compensation
    Base Salary.
       46




---



##### Table of Contents



Annual Incentive Bonus.
  year-over-year
          2005 Stock Plan.
   47




---



##### Table of Contents



Restricted Stock Awards.
  Sub-Hub
  Employee Stock Purchase Plan.
  Other Compensation.
    Change in Control and Severance
    Arrangements.
  Summary.
 48




---



##### Table of Contents



Compensation
    Committee Report
    THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
  Manuel Perez de la Mesa
    Dewitt Kerry McCluggage
    Thomas J. Formolo
 49




---



##### Table of Contents



Executive
    Compensation
    Summary
    Compensation Table
  Change inPensionValue andNon-QualifiedNon-Equity


DeferredStock


Option


Incentive Plan


Compensation

All OtherName and Principal



Salary


Bonus


Awards


Awards(2)


Compensation


Earnings

Compensation


TotalPosition(1)

Year

($)


($)


($)


($)


($)


($)

($)


($)Sathiyamurthy Chandramohan,

2006


650,000



(3
)




















650,000Chief Executive OfficerJonathan R. Mather,

2006


27,692
(5)










1,888,500
(6)












1,916,192Chief Financial Officer(4)Kumarakulasingam Suriyakumar,

2006


650,000



(7
)




















650,000President & Chief
    Operating OfficerRahul K. Roy,

2006


400,000







1,000,000
(8)


147,150



300,000
(9)




18,291
(10)


1,865,441Chief Technology OfficerMark W. Legg,

2006


250,000











147,150



100,000
(12)




22,924
(13)


520,074former Chief Financial Officer(11)     (1)
    
    In addition to our principal executive officer, our principal
    financial officer, and our former principal financial officer,
    our only other executive officers (as defined in
    Rule 3b-7
    of the Exchange Act) were our President/Chief Operating Officer,
    Mr. Suriyakumar, and our Chief Technology Officer,
    Mr. Roy.(2)
    
    The amounts were computed in accordance with FAS 123R.(3)
    
    Given the significant expected savings to the company resulting
    from the financial restructuring of our debt in December 2005,
    the company and Mr. Chandramohan agreed that the annual
    incentive bonus that would have been earned by him for the year
    ended December 31, 2006 based on
    year-over-year
    growth of our EPS will be waived because our reduced interest
    costs would have resulted in an incentive bonus to
    Mr. Chandramohan greater than originally contemplated.(4)
    
    Mr. Mather commenced employment with us December 4,
    2006.(5)
    
    Mr. Mathers annual base salary is $360,000.(6)
    
    Mr. Mather was granted an option to purchase
    150,000 shares of our common stock under the 2005 Stock
    Plan, at an exercise price equal to $33.10  the
    closing price of our common stock on the NYSE on his first day
    of employment.(7)
    
    Given the significant expected savings to the company resulting
    from the financial restructuring of our debt in December 2005,
    the company and Mr. Suriyakumar agreed that the annual
    incentive bonus that would have been earned by him for the year
    ended December 31, 2006 based on
    year-over-year
    growth of our EPS will be waived because our reduced interest
    costs would have resulted in an incentive bonus to
    Mr. Suriyakumar greater than originally contemplated.(8)
    
    Pursuant to a December 7, 2004 Agreement to Grant Stock
    with Mr. Roy, we granted him 28,253 restricted shares of
    our common stock with an aggregate value of $1,000,000 upon
    successful completion of software for our
    Sub-Hub
    product. As of November 10, 2006, such software had been
    completed pursuant to our specifications, and Mr. Roy was
    granted 28,253 shares (determined by the average NYSE
    closing price for the 10 days immediately preceding the
    fifth day prior to grant). Such shares remain subject to a
    reacquisition option in favor of the company for failure to
    satisfactorily maintain and enhance our
    Sub-Hub
    software product, which reacquisition option lapses on
    November 10, 2011.(9)
    
    Annual incentive bonus earned by Mr. Roy for completing
    specific deliverables related to our suite of reprographics
    technology during the year ended December 31, 2006. 50




---



##### Table of Contents



(10)
    
    Consists of club membership dues of $2,448, auto lease payments
    of $13,308, $1,632 401(k) matching contribution, and life
    insurance premiums of $903.(11)
    
    Mr. Legg resigned as our Chief Financial Officer effective
    December 4, 2006.(12)
    
    Includes $100,000 incentive bonus for meeting objectives during
    the year ended December 31, 2006, pursuant to
    Mr. Leggs employment agreement related to
    Sarbanes-Oxley Section 404 compliance, completion of an
    internal audit plan, and the companys cash flow from
    operations.(13)
    
    Consists of club membership dues of $6,924, auto lease payments
    of $13,269, $1,975 401(k) matching contribution, and life
    insurance premiums of $756.  Grants of
    Plan-Based Awards
        Grants of
    Plan-Based Awards
  All Other


All OtherStock


OptionAwards;


Awards;


ExerciseNumber


Number of


or Baseof Shares


Securities


Price of


Marketof Stock


underlying


Option


Price onGrant


Estimated Future Payouts under


Estimated Future Payouts under


or Units


Options


Awards


GrantName

Date


Non-Equity Incentive Plan Awards


Equity Incentive Plan Awards


(#)


(#)


($/Sh)


Date(1)Threshold


Target


Maximum


Threshold


Target


Maximum($)


($)


($)


(#)


(#)


(#)Sathiuamurthy
    ChandramohanJonathan R. Mather


12/4/06
(2)






























150,000



33.10



33.10Kumarakulasingam
    SuriyakumarRahul K. Roy


2/21/06































15,000
(3)


25.95



26.0011/10/06



























28,253
(4)










32.25
(5)Mark W. Legg


2/21/06































15,000
(3)


25.95



26.00     (1)
    
    Under the 2005 Stock Plan in effect on December 31, 2006,
    the exercise price for an option grant is the NYSE closing price
    of our common stock on the last market trading day before the
    grant date.(2)
    
    Pursuant to Mr. Mathers December 4, 2006
    employment agreement, we granted him an option to purchase
    150,000 shares of our common stock under the 2005 Stock
    Plan, at an exercise price equal to $33.10. The option vests at
    the rate of 25% upon the first anniversary of his employment and
    1/48th each month thereafter.(3)
    
    Option vests 20% annually over 5 years.(4)
    
    Pursuant to a December 7, 2004 Agreement to Grant Stock
    with Mr. Roy, we granted him 28,253 restricted shares of
    our common stock with an aggregate value of $1,000,000 upon
    successful completion of software for our
    Sub-Hub
    product. As of November 10, 2006, such software had been
    completed pursuant to our specifications. Based on average NYSE
    closing price for the 10 days immediately preceding the
    fifth day prior to grant, pursuant to the December 7, 2004
    Agreement to Grant Stock with Mr. Roy. Such shares remain 51




---



##### Table of Contents



subject to a reacquisition option in favor of the company for
    failure to satisfactorily maintain and enhance our
    Sub-Hub
    software product, which reacquisition option lapses on
    November 10, 2011.(5)
    
    Granted November 10, 2006  Outstanding
    Equity Awards at Fiscal Year-End
    Outstanding
    Equity Awards at Fiscal Year-End
  Name

Option Awards


Stock AwardsEquityIncentiveEquity


PlanIncentive


Awards:Plan


Market orEquity














Awards;


PayoutIncentive














Number of


Value ofPlan Awards;











Market


Unearned


UnearnedNumber of


Number of


Number of








Number of


Value of


Shares,


Shares,Securities


Securities


Securities








Shares or


Shares or


Units or


Units orunderlying


underlying


underlying








Units of


Units of


Other


OtherUnexercised


Unexercised


Unexercised


Option





Stock that


Stock that


Rights that


Rights thatOptions


Options


Unearned


Exercise


Option


Have Not


Have Not


Have Not


Have Not(#)


(#)


Options


Price


Expiration


Vested


Vested


Vested


VestedExercisable


Unexercisable


(#)


($)


Date


(#)


($)


(#)


($)Sathiyamurthy ChandramohanJonathan R. Mather






150,000
(1)






33.10



12/4/2016Kumarakulasingam SuriyakumarRahul K. Roy


24,000











4.88



1/2/2011



28,253
(2)


941,10780,000



20,000
(3)






5.25



5/10/2012300,000











5.25



5/10/201240,000



60,000
(3)






5.85



5/30/201415,000
(3)






25.95



2/21/2016Mark W. Legg






15,000
(3)






25.95



2/21/2016     (1)
    
    The option vests at the rate of 25% upon the first anniversary
    of his employment and 1/48th each month thereafter.(2)
    
    Restricted shares remain subject to a reacquisition option in
    favor of the company for failure to satisfactorily maintain and
    enhance our
    Sub-Hub
    software product, which reacquisition option lapses on
    November 10, 2011.(3)
    
    Option vests 20% annually over 5 years.  Option
    Exercises and Stock Vested at Fiscal Year-End
   52




---



##### Table of Contents



Option
    Exercises and Stock Vested
  Option Awards


Stock AwardsNumber of Shares


Value


Number of Shares


ValueAcquired on


Realized on


Acquired on


Realized onExercise


Exercise


Vesting


VestingName

(#)


($)


(#)


($)Sathiyamurthy ChandramohanJonathan R. MatherKumarakulasingam SuriyakumarRahul K. Roy


200,000



5,924,540Mark W. Legg


15,000



370,098   Pension
    Benefits
    Nonqualified
    Deferred Compensation
    Employment
    Contracts, Termination of Employment and Change in Control
    Arrangements
  year-to-year
    Change in Control and Severance
    Arrangements.
  
    For each of Messrs. Chandramohan and Suriyakumar, if
    terminated without cause or employment terminates for good
    reason (as discussed below), each is entitled to receive:
    (a) his base salary through the February 3, 2008
    expiration of the employment agreement term; (b) continued
    payment of premiums for him and his eligible dependants to
    remain covered by our group medical insurance programs, until
    the earlier of (i) medical insurance coverage being
    available through another employer, (ii) termination of
    eligibility for his children under our policies and applicable
    laws, or (iii) qualification of him and his spouse, in each
    instance, for Medicare coverage; (c) continued payment of
    employer-paid benefits, including without limitation, the lease
    of automobiles, through the February 3, 2008 expiration of
    the employment agreement term; and (d) immediate vesting of
    any unvested stock options, restricted stock or similar rights
    granted to him as of the effective date of termination. As of
    December 31, 2006, payment of all the foregoing in
    connection with termination of Mr. Chandramohan employment
    without cause or for good reason would have totaled
    approximately $729,426, and payment of all of the foregoing in
    connection with termination of Mr. Suriyakumars
    employment without cause or for good reason would have totaled
    approximately 53




---



##### Table of Contents



$724,486. Neither Mr. Chandramohan nor Mr. Suriyakumar
    had any unvested stock options, restricted stock or similar
    rights as of December 31, 2006.  
    For Mr. Roy, if terminated without cause or employment
    terminates for good reason (as discussed below), he
    is entitled to receive: (a) his then base salary through
    the February 3, 2008 expiration of the employment agreement
    term, provided that in the event such termination occurs for
    good reason because of a change of control, such payment of base
    salary shall continue for the greater of (i) the then
    remaining term of the agreement, or (ii) twelve months;
    (b) continued payment of premiums for him and his eligible
    dependants to remain covered by our group medical insurance
    programs for the period in which he is entitled to continue to
    receive his base salary; (c) continued payment of
    employer-paid benefits, including without limitation, automobile
    leasing, for the period in which he is entitled to continue to
    receive his base salary; and (d) immediate vesting of all
    unvested stock options, restricted stock or similar rights
    granted to him as of the effective date of termination. As of
    December 31, 2006, payment of all the foregoing in
    connection with termination of Mr. Roys employment
    without cause or for good reason would have totaled
    approximately $470,857. Accelerated vesting of
    Mr. Roys outstanding stock options would have
    resulted in vesting of 123,253 shares of common stock
    subject to unvested options as of December 31, 2006, with
    an aggregate fair market value of $4,105,557 based on the NYSE
    closing price on the last trading day most recently preceding
    that date.
    For Mr. Mather, if terminated without cause or employment
    terminates for good reason (as discussed below), he
    is entitled to receive: (a) his base salary for nine months
    following the effective date of termination; (b) continued
    payment of premiums for Mr. Mather and his eligible
    dependants to remain covered by our group medical insurance
    programs for nine months following the effective date of
    termination; (c) in the event the effective date of
    termination occurs before the December 4, 2007 first
    anniversary of Mr. Mathers commencement of employment
    with us, accelerated vesting of all stock options, restricted
    stock or similar rights granted to Mr. Mather that would
    have vested as of the first anniversary of his employment;
    (d) in the event the effective date of termination occurs
    after December 4, 2007, immediate vesting of all unvested
    stock options, restricted stock or similar rights granted to him
    as of the effective date of termination; and (e) a
    pro-rated incentive bonus based on the number of days
    Mr. Mather is employed with us during the fiscal year in
    which his employment is terminated. As of December 31,
    2006, payment of all of the foregoing in connection with
    termination of Mr. Mathers employment without cause
    or for good reason would have totaled approximately $300,051.
    Accelerated vesting of outstanding stock options that would have
    been vested as of the December 4, 2007 first anniversary of
    Mr. Mathers employment with us but for his
    termination without cause or for good reason before that date
    would result in vesting of 37,500 shares of common stock
    subject to unvested options as of December 31, 2006, with
    an aggregate fair market value of $1,249,125 based on the NYSE
    closing price on the last trading day most recently preceding
    that date.    30-day
   54




---



##### Table of Contents



Proprietary Information and Invention Assignment
    Agreements.
  Director
    Compensation
         55




---



##### Table of Contents



Director
    Compensation
  Change inPensionFees







Value andEarned or





Non-Equity

NonqualifiedPaid in

Stock

Option

Incentive Plan

Deferred

All OtherCash

Awards

Awards(1)

Compensation

Compensation

Compensation

Total(2)Name

($)

($)

($)

($)

Earnings

($)

($)Sathiyamurthy Chandramohan(3)Kumarakulasingam Suriyakumar(3)Andrew W. Code(4)Thomas J. Formolo(5)


40,000







50,000
(14)














90,000Edward D. Horowitz(6)Dewitt Kerry McCluggage(7)


45,000
(11)






50,000
(14)














95,000Mark W. Mealy(8)


45,000
(12)






50,000
(14)














95,000Manuel Perez de la Mesa(9)


45,000
(13)






50,000
(14)














95,000Eriberto R. Scocimara(10)


40,000







50,000
(14)














90,000     (1)
    
    Reflects options granted under the 2005 Stock Plan, as described
    above. One-twelfth of the shares included in the options granted
    to non-employee directors vest monthly from the date of grant.(2)
    
    Table does not include reimbursement for travel expenses to
    attend board meetings.(3)
    
    Except for reimbursement for travel expenses to attend board
    meetings, Messrs. Chandramohan and Suriyakumar were not
    compensated for their services as directors.(4)
    
    Mr. Code resigned from our board effective January 20,
    2006. As of December 31, 2006, no options to purchase
    shares of stock under the 2005 Stock Plan awarded to
    Mr. Code were outstanding.(5)
    
    As of December 31, 2006, options to purchase
    13,851 shares of stock under the 2005 Stock Plan awarded to
    Mr. Formolo were outstanding.(6)
    
    Mr. Horowitz did not stand for re-election to our board at
    our May 2006 annual meeting of stockholders. As of
    December 31, 2006, no options to purchase shares of stock
    under the 2005 Stock Plan awarded to Mr. Horowitz were
    outstanding.(7)
    
    As of December 31, 2006, options to purchase
    3,997 shares of stock under the 2005 Stock Plan awarded to
    Mr. McCluggage were outstanding.(8)
    
    As of December 31, 2006, options to purchase
    13,851 shares of stock under the 2005 Stock Plan awarded to
    Mr. Mealy were outstanding.(9)
    
    As of December 31, 2006, options to purchase
    39,351 shares of stock under the 2005 Stock Plan awarded to
    Mr. Perez de la Mesa were outstanding.(10)
    
    As of December 31, 2006, options to purchase
    3,997 shares of stock under the 2005 Stock Plan awarded to
    Mr. Scocimara were outstanding.(11)
    
    Includes cash compensation of $5,000 for serving as chair of the
    nominating and corporate governance committee.(12)
    
    Includes cash compensation of $5,000 for serving as chair of the
    audit committee.(13)
    
    Includes cash compensation of $5,000 for serving as chair of the
    compensation committee.(14)
    
    Aggregate grant date fair value computed in accordance with
    FAS 123R.  Indemnification Agreements.
 56




---



##### Table of Contents



Compensation
    Committee Interlocks and Insider Participation
      Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Security
    Ownership of Certain Beneficial Owners and Management
    
    each person who is known to us to own beneficially more than 5%
    of our common stock;
    all directors and named executive officers as a group; and
    each of our directors and each of our executive officers named
    in the Summary Compensation Table on page 49 of this report.    Shares BeneficiallyOwnedName and Address of Beneficial Owner

Number

PercentPrincipal
    Stockholders:ARC Acquisition Co., L.L.C.(1)


6,150,643



13.6%10 S. Wacker Drive,
    Suite 3175
    Chicago, IL 60606Micro Device, Inc.


5,684,842



12.5%Wellington Management Company,
    LLP(14)


2,976,830



6.6%75 State Street
    Boston, MA 02109Times Square Capital Management,
    LLC(15)


2,899,714



6.4%1177 Avenue of the
    Americas  39th Floor
    New York, NY 10036 57




---



##### Table of Contents



Shares BeneficiallyOwnedName and Address of Beneficial Owner

Number

PercentFMR Corp.(16)


2,728,700



6.0%82 Devonshire Street
    Boston, MA 02109Eagle Asset Management, Inc.(17)


2,409,843



5.3%880 Carillon Parkway
    St. Petersburg, FL 33716Directors and Named Executive
    Officers:Sathiyamurthy
    Chandramohan(2)(4)(5)(6)


9,877,448



21.8%Kumarakulasingam
    Suriyakumar(2)(4)(5)(6)(7)


9,676,351



21.3%1981 N. Broadway,
    Suite 202
    Walnut Creek, CA 94596Thomas J. Formolo(3)(8)


6,181,927



13.6%Mark W. Legg(9)


329,482



**Jonathan Mather


0



**Dewitt Kerry McCluggage(10)


3,330



**Mark W. Mealy(8)(11)


63,184



**Manuel Perez de la Mesa(12)


58,684



**Rahul K. Roy(13)


475,253



1.0%Eriberto R. Scocimara(10)


3,330



**All directors and Named Executive
    Officers as a group (ten persons)


17,770,055



38.7%     *
    
    Except as otherwise noted, the address of each person listed in
    the table is c/o American Reprographics Company, 700 North
    Central Avenue, Suite 550, Glendale, California 91203.**
    
    Less than one percent of the outstanding shares of common stock.(1)
    
    The sole member of ARC Acquisition Co., L.L.C. is Code
    Hennessey & Simmons IV LP. The general partner of
    Code Hennessy & Simmons IV LP is CHS
    Management IV LP. The general partner of CHS
    Management IV LP is Code Hennessy & Simmons LLC.
    Code Hennessy & Simmons LLC, CHS Management IV LP
    and Code Hennessy & Simmons IV LP may be deemed to
    beneficially own these shares, but disclaim beneficial ownership
    of shares in which they do not have a pecuniary interest. The
    investment committee of Code Hennessy & Simmons LLC is
    composed of Andrew W. Code, Daniel J. Hennessy, Brian P.
    Simmons, Thomas J. Formolo, Peter M. Gotsch, Steven R. Brown,
    David O. Hawkins and Richard A. Lobo. Messrs. Code,
    Hennessy, Simmons, Formolo, Gotsch, Brown, Hawkins and Lobo may
    be deemed to beneficially own these shares due to the fact that
    they share investment and voting control over shares held by ARC
    Acquisition Co., L.L.C., but disclaim beneficial ownership of
    shares in which they do not have a pecuniary interest(2)
    
    Includes 1,857,474 shares held by OCB Reprographics, Inc.
    As Messrs. Chandramohan and Suriyakumar have ownership
    interests of 22.4% and 17.6%, respectively, in OCB
    Reprographics, Inc. and serve on its board of directors, each
    could be deemed to have beneficial ownership of all these
    shares. Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.(3)
    
    Includes 6,150,643 shares held by ARC Acquisition Co.,
    L.L.C. and 10,100 shares held by CHS Associates IV. Thomas
    J. Formolo is a member of the investment committee of Code
    Hennessy & Simmons LLC, the general partner of CHS
    Management IV LP, which in turn is the general partner of
    Code Hennessy & Simmons IV LP, which is the sole
    member of ARC Acquisition Co., L.L.C. Code Hennessy &
    Simmons LLC is also the general partner of CHS Associates IV.
    Mr. Formolo may be deemed to beneficially own the shares
    owned by ARC Acquisition Co., L.L.C. and CHS Associates IV, but
    disclaims beneficial ownership of shares in which he does not
    have a pecuniary interest. 58




---



##### Table of Contents



(4)
    
    Includes 5,684,842 shares held by Micro Device, Inc. As
    Messrs. Chandramohan and Suriyakumar have ownership
    interests of 56% and 44%, respectively, in Micro Device, Inc.
    and serve on its board of directors, each could be deemed to
    have beneficial ownership of all these shares.
    Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.(5)
    
    Includes 666,181 shares held by Brownies Blueprint, Inc. As
    Messrs. Chandramohan and Suriyakumar have ownership
    interests of 42% and 33%, respectively, in Brownies Blueprint,
    Inc. and serve on its board of directors, each could be deemed
    to have beneficial ownership of all these shares.
    Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.(6)
    
    Includes 690,437 shares held by Dieterich Post Company. As
    Messrs. Chandramohan and Suriyakumar have ownership
    interests of 47.6% and 37.4%, respectively, in Dieterich Post
    Company and serve on its board of directors, each could be
    deemed to have beneficial ownership of all these shares.
    Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.(7)
    
    Includes 701,693 shares held by the Suriyakumar Family
    Trust. Mr. Suriyakumar and his spouse, as trustees of the
    Suriyakumar Family Trust, share voting and investment power over
    these shares.(8)
    
    Includes 13,184 shares issuable upon exercise of
    outstanding stock options exercisable within 60 days of
    February 15, 2007.(9)
    
    Includes 3,000 shares issuable upon exercise of outstanding
    stock options exercisable within 60 days of
    February 15, 2007. Includes 326,482 shares held by the
    Legg Family Trust. Mr. Legg and his spouse, as trustees of
    the Legg Family Trust, share voting and investment power over
    these shares.(10)
    
    Includes 3,330 shares issuable upon exercise of outstanding
    stock options exercisable within 60 days of
    February 15, 2007.(11)
    
    Includes 50,000 shares held by Eastover Group LLC.
    Mr. Mealy has controlling voting and investment power over
    these shares.(12)
    
    Includes 38,684 shares issuable upon exercise of
    outstanding stock options exercisable within 60 days of
    February 15, 2007. Also includes 6,000 shares held by
    Mr. Perezs children.(13)
    
    Includes 447,000 shares issuable upon exercise of
    outstanding stock options exercisable within 60 days of
    February 15, 2007. Includes 28,253 shares which remain
    subject to a reacquisition option in favor of the company for
    failure to satisfactorily maintain and enhance our
    Sub-Hub
    software product, which reacquisition option lapses on
    November 10, 2011.(14)
    
    We have obtained this information concerning the common stock
    beneficially owned by Wellington Management Company, LLP as of
    December 31, 2006 based solely on a Schedule 13G filed
    by Wellington Management Company, LLP on February 14, 2007.
    According to the Schedule 13G, Wellington Management
    Company, LLP has shared voting power with respect to
    2,632,450 shares and shared dispositive power with respect
    to 2,976,830.(15)
    
    We have obtained this information concerning the common stock
    beneficially owned by Times Square Capital Management, LLC as of
    December 31, 2006 based solely on a Schedule 13G filed
    by Times Square Capital Management, LLC on February 9,
    2007. According to the Schedule 13G, Times Square Capital
    Management, LLC has sole voting power with respect to
    2,488,814 shares and sole dispositive power with respect to
    2,899,714 shares.(16)
    
    We have obtained this information concerning the common stock
    beneficially owned by FMR Corp. as of December 31, 2006
    based solely on a Schedule 13G filed by FMR Corp. on
    February 14, 2007. According to the Schedule 13G, FMR
    Corp. has sole dispositive power with respect to
    2,728,700 shares.(17)
    
    We have obtained this information concerning the common stock
    beneficially owned by Eagle Asset Management, Inc. as of
    December 31, 2006 based solely on a Schedule 13G filed
    by Eagle Asset Management, Inc. on February 8, 2007 under
    the CIK for American Reprographics Company, L.L.C. but stating
    in the Schedule 13G that it was reporting ownership of our
    common stock. According to the Schedule 13G, Eagle Asset
    Management, Inc. has sole voting power and sole dispositive
    power with respect to 2,409,843 shares. 59




---



##### Table of Contents



Changes
    in Control
    Equity
    Compensation Plan Information
    (a)

(b)

(c)Number of SecuritiesRemaining Available for FutureNumber of Securities to

Weighted-Average

Issuance Under Equitybe Issued Upon Exercise

Exercise Price of

Compensation Plansof Outstanding Options,

Outstanding Options,

(Excluding SecuritiesPlan Category

Warrants and Rights

Warrants and Rights

Reflected in Column (a))Equity compensation plans approved
    by stockholders2005 Stock Plan


1,683,600
(1)

$
14.69



2,903,230
(2)2005 Employee Stock
    Purchase Plan


9,032


$
32.06



378,907Equity compensation plans  not
    approved by  stockholders





$




Total


1,692,632


$




3,282,137     (1)
    
    Represents outstanding options granted under the 2005 Stock Plan
    to acquire common stock.(2)
    
    The total shares of common stock currently reserved and
    authorized for issuance under the 2005 Stock Plan equals
    5,000,000 shares of common stock. This authorization
    automatically increases annually on the first day of our fiscal
    year, from 2006 through and including 2010, by the lesser of
    (i) 1.0% of the outstanding shares on the date of the
    increase; (ii) 300,000 shares; or (iii) such
    smaller number of shares determined by our board of directors.
    The board may elect to increase, with stockholder approval, or
    reduce the number of additional shares authorized in any given
    year.  Item 13.
    Certain
    Relationships and Related Transactions    Related
    Party Leases and Purchases
     60




---



##### Table of Contents



Consulting
    Agreement
      Policies
    and Procedures Regarding Related Persons Transactions
      Indemnification
    Agreements
    Registration
    Rights Agreement
   61




---



##### Table of Contents



Demand Registrations. Form S-1 Form S-2, S-3
  Piggyback Rights.
  Piggyback Registrations. Form S-4 Form S-8)
  Conditions and Limitations;
    Expenses.
  Director
    Independence
      
    The director is not and has not been an employee of the company,
    and no member of the directors immediate family is or has
    served as an executive officer of the company or any of its
    consolidated subsidiaries, during the last three years.
    Neither the director nor any member of the directors
    immediate family has received more than $100,000 in direct
    compensation from the company or any of its consolidated
    subsidiaries (excluding director and committee fees, pensions or
    deferred compensation for prior service) during any
    12-month
    period within the last three years.
    The director: (i) is not, and does not have an
    immediate family member that is a current partner of a firm that
    is the companys, or any of its consolidated
    subsidiaries, internal or external auditor; (ii) is
    not a current employee of such external audit firm;
    (iii) does not have an immediate family member who is a
    current employee of such external audit firm who participates in
    such firms audit, assurance or tax compliance (but not tax
    planning) practice; and (iv) was not, and does not have an
    immediate family member that was, within the last three years
    (but is no longer) a partner or employee of such external audit
    firm who personally worked on the companys, or any of its
    consolidated subsidiaries, audit within that time.
    Neither the director nor any member of the directors
    immediate family is or has been employed within the last three
    years as an executive officer of any company whose compensation
    committee, or the compensation committee of any of its
    consolidated subsidiaries, includes or included an executive
    officer of the company. 62




---



##### Table of Contents




    The director is not a current employee of, and does not have an
    immediate family member who is a current executive officer of,
    another company that has made payments to, or has received
    payments from, the company or any of its consolidated
    subsidiaries, for property or services in an amount which, in
    any of the last three fiscal years, exceeds the greater of
    $1 million or 2% of the consolidated gross revenues of such
    other company.    
    the nature of any relationships with the company.
    the significance of the relationship to the company, the other
    organization and the individual director.
    whether or not the relationship is solely a business
    relationship in the ordinary course of the companys and
    the other organizations businesses and does not afford the
    director any special benefits.
    any commercial, industrial, banking, consulting, legal,
    accounting, charitable and familial relationships, and such
    other criteria as the board may determine from time to time.
    If a proposed director serves as an executive officer, director
    or trustee of a tax exempt organization, whether contributions
    from the company, or any of its consolidated subsidiaries, to
    such tax exempt organization in any of the last three fiscal
    years are less than the greater of (i) $1 million or
    (ii) 2% of the consolidated gross revenues of such tax
    exempt organization for its last completed fiscal year.    
    Directors fees are the only compensation that members of
    the Audit Committee may receive from the company or any of its
    consolidated subsidiaries. Audit Committee members may not
    receive, directly or indirectly, any consulting, advisory or
    other compensatory fees from the company or any of its
    consolidated subsidiaries (other than in his or her capacity as
    a member of the audit committee, the Board, or any other
    committee of the Board).
    No member of the audit committee may be an affiliated
    person of the company, or any of its consolidated
    subsidiaries, as such term is defined by the Securities and
    Exchange Commission.  925-949-5100
     63




---



##### Table of Contents



Item 14.
    Principal
    Accounting Fees and Services    2005

2006Audit fees(a)

$
780


$
1,690Audit related fees(b)


43



203Tax fees(c)


56



All other fees(d)






2$
879


$
1,895     (a)
    
    Consists of aggregate fees billed or expected to be billed for
    professional services rendered for the audit of our annual
    consolidated financial statements for each of the fiscal years
    ended December 31, 2006 and December 31, 2005, reviews
    of financial statements in the companys quarterly reports
    on
    Form 10-Q
    for each of the fiscal years ended December 31, 2005 and
    December 31, 2006.(b)
    
    Consists of aggregate fees billed or expected to be billed for
    assurance and related services reasonably related to the
    performance of the audit or review of the companys
    financial statements for the fiscal years ended
    December 31, 2005 and December 31, 2006 and are not
    included in the audit fees listed above. This category includes
    fees related to accounting consultations, consultations
    concerning financial accounting and reporting standards, and
    audit services not required by statute or regulation.(c)
    
    Consists of aggregate fees billed or expected to be billed for
    tax compliance, tax advice, and tax planning for each of the
    fiscal years ended December 31, 2005, and December 31,
    2006.(d)
    
    Consists of aggregate fees billed or expected to be billed for
    all other services not included in the three categories set
    forth above for each of the fiscal years ended December 31,
    2005 and December 31, 2006.    and/or contribution-in-kind
 64




---



##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules    Financial Statements
                  Financial Statement Schedule
          Index
    to Exhibits
  Number

Description3
.1

Amended and Restated Certificate
    of Incorporation, filed February 2, 2005 (incorporated by
    reference to Exhibit 3.1 to the Registrants
    Form 10-K
    filed on March 31, 2005).3
.2

Amended and Restated Bylaws,
    adopted by Board January 28, 2005 (incorporated by
    reference to Exhibit 3.2 to the Registrants
    Form 10-K
    filed on March 31, 2005).4
.1

Specimen Stock Certificate
    (incorporated by reference to Exhibit 4.1 to the
    Registrants Registration Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).10
.1

Second Amended and Restated Credit
    and Guaranty Agreement dated as of December 21, 2005 by and
    among American Reprographics Company; American Reprographics
    Company, L.L.C., American Reprographics Holdings, L.L.C.,
    certain subsidiaries of American Reprographics Company, L.L.C.,
    or guarantors, and the lenders named therein (incorporated by
    reference to Exhibit 10.1 of the
    Form 8-K
    filed on December 21, 2005).10
.2

First Amendment to Second Amended
    and Restated Credit and Guaranty Agreement dated effective as of
    July 17, 2006, by and among American Reprographics Company
    L.L.C., a California limited liability company, American
    Reprographics Company, a Delaware corporation, certain financial
    institutions listed in the signature pages thereto, Goldman
    Sachs Credit Partners L.P., as Sole Lead Arranger and Joint
    Bookrunner, JPMorgan Securities, Inc., as Joint Bookrunner,
    General Electric Capital Corporation, as Administrative Agent
    and as Collateral Agent and the Credit Support Parties listed on
    the signature pages thereto (incorporated by reference to
    Exhibit 10.1 of the
    Form 10-Q
    filed on August 14, 2006). 65




---



##### Table of Contents



Number

Description10
.3

Intercreditor Agreement, dated as
    of December 18, 2003, between American Reprographics
    Company, L.L.C. and General Electric Capital Corporation and
    Goldman Sachs Credit Partners L.P., as collateral agents
    (incorporated by reference to Exhibit 10.3 to the
    Registrants Registration Statement on
    Form S-1
    (Reg. No.
    333-119788),
    as filed on October 15, 2004).10
.4

2004 Bonus Plan, dated
    March 24, 2004, between American Reprographics Company and
    Mr. Legg (incorporated by reference to Exhibit 10.4 to
    the Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).^10
.5

2005 Bonus Plan between American
    Reprographics Company and Mr. Legg (incorporated by
    reference to Exhibit 10.4 to the Registrants
    Form 10-K
    filed on March 16, 2006).^10
.6

American Reprographics Holdings,
    L.L.C. Unit Option Plan II, adopted effective as of
    January 1, 2001 (incorporated by reference to
    Exhibit 10.5 to the Registrants Registration
    Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).^10
.7

Amendment No. 1 dated as of
    July 1, 2003 to American Reprographics Holdings, L.L.C.
    Unit Option Plan II (incorporated by reference to
    Exhibit 10.6 to the Registrants Registration
    Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).^10
.8

American Reprographics Company
    2005 Stock Plan (incorporated by reference to Exhibit 10.7 to
    the Registrants Registration Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).^10
.9

Forms of Stock Option Agreements
    under the 2005 Stock Plan (incorporated by reference to
    Exhibit 10.8 to the Registrants Registration
    Statement on
    Form S-1
    (Reg. No.
    333-119788),
    as filed on October 15, 2004).^10
.10

Form of American Reprographics
    Company Stock Option Grant Notice   Non-employee
    Directors (Discretionary Non-statutory Stock Options)
    (incorporated by reference to Exhibit 10.1 to the
    Form 8-K
    filed on December 16, 2005).^10
.11

Form of American Reprographics
    Company Non-employee Directors   Stock Option
    Agreement (Discretionary Grants) (incorporated by reference to
    Exhibit 10.2 to the
    Form 8-K
    filed on December 16, 2005).^10
.12

American Reprographics Company
    2005 Employee Stock Purchase Plan (incorporated by reference to
    Exhibit 10.9 to the Registrants Registration
    Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).^10
.13

Amendment to American
    Reprographics Company 2005 Employee Stock Purchase Plan dated
    September 29, 2006.*^10
.14

Lease Agreement, dated
    November 19, 1997, between American Reprographics Company,
    L.L.C. (formerly Ford Graphics Group, L.L.C.) and Sumo Holdings
    LA, LLC (incorporated by reference to Exhibit 10.10 to the
    Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.15

Amendment to Lease for the
    premises commonly known as 934 and 940 Venice Boulevard, Los
    Angeles, CA, effective as of August 2, 2005, by and between
    Sumo Holdings LA, LLC, Landlord and American Reprographics
    Company, L.L.C. (formerly known as FORD GRAPHICS GROUP, L.L.C.)
    Tenant (incorporated by reference to Exhibit 10.2 to the
    Form 10-Q
    filed on November 14, 2005).10
.16

Lease Agreement between American
    Reprographics Company, L.L.C. and Sumo Holdings San Jose,
    LLC (incorporated by reference to Exhibit 10.11 to the
    Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.17

Lease Agreement between American
    Reprographics Company, L.L.C. and Sumo Holdings Irvine, LLC
    (incorporated by reference to Exhibit 10.12 to the
    Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.18

Amendment to Lease for the
    premises commonly known as 17721 Mitchell North, Irvine, CA,
    effective as of August 2, 2005, by and between Sumo
    Holdings Irvine, LLC, Lessor and American Reprographics Company,
    L.L.C., Lessee (incorporated by reference to Exhibit 10.1
    to the
    Form 10-Q
    filed on November 14, 2005).10
.19

Lease Agreement, dated
    December 1, 1997, between American Reprographics Company,
    L.L.C. and Sumo Holdings Sacramento, LLC (Oakland Property)
    (incorporated by reference to Exhibit 10.13 to the
    Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004). 66




---



##### Table of Contents



Number

Description10
.20

Lease Agreement between American
    Reprographics Company, L.L.C. (formerly Ford Graphics Group,
    L.L.C.) and Sumo Holdings Sacramento, LLC (Sacramento Property)
    (incorporated by reference to Exhibit 10.14 to the
    Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.21

Amendment to Lease for the
    premises commonly known as 1322 V Street, Sacramento, CA,
    effective as of August 2, 2005, by and between Sumo
    Holdings Sacramento, LLC, Landlord and American Reprographics
    Company, L.L.C. (formerly known as Ford Graphics Group, L.L.C.)
    Tenant (incorporated by reference to Exhibit 10.4 to the
    Form 10-Q
    filed on November 14, 2005).10
.22

Lease Agreement, dated
    December 7, 1995, between Leet-Melbrook, Inc. and Sumo
    Holdings Maryland, LLC (as successor lessor) (incorporated by
    reference to Exhibit 10.15 to the Registrants Registration
    Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.23

Amendment to Lease for the
    premises commonly known as 18810 Woodfield Road, Gaithersburg,
    MD, effective as of August 2, 2005, by and between Sumo
    Holdings Maryland, LLC, Landlord and Leet-Melbrook, Inc., Tenant
    (incorporated by reference to Exhibit 10.3 to the
    Form 10-Q
    filed on November 14, 2005).10
.24

Second Amendment to Lease for the
    premises commonly known as 18810 Woodfield Road, Gaithersburg,
    MD, effective as of August 1, 2006 by and between Sumo
    Holdings Maryland, LLC, Landlord and Leet-Melbrook Inc., Tenant.*10
.25

Lease Agreement, dated
    September 23, 2003, between American Reprographics Company
    (dba Consolidated Reprographics) and Sumo Holdings Costa
    Mesa, LLC (incorporated by reference to Exhibit 10.16 to
    the Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.26

Lease agreement dated
    November 19, 1997, between Dieterich-Post Company and Ford
    Graphics Group, L.L.C.*10
.27

Management Agreement, dated
    April 10, 2000, between American Reprographics Company,
    L.L.C. and CHS Management IV LP (incorporated by reference
    to Exhibit 10.17 to the Registrants Registration
    Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.28

Termination Agreement to
    Management Agreement, dated November 29, 2004, between
    American Reprographics Company, L.L.C. and CHS
    Management IV LP (incorporated by reference to
    Exhibit 10.18 to the Registrants Registration
    Statement on
    Form S-1
    A(Reg.
    No. 333-119788),
    as amended on December 6, 2004).10
.29

Indemnification Agreement, dated
    April 10, 2000, among American Reprographics Company,
    L.L.C., American Reprographics Holdings, L.L.C., ARC Acquisition
    Co., L.L.C., Mr. Chandramohan, Mr. Suriyakumar, Micro
    Device, Inc., Dietrich-Post Company, ZS Ford L.P., and ZS Ford
    L.L.C. (incorporated by reference to Exhibit 10.19 to the
    Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.30

Investor Registration Rights
    Agreement, dated April 10, 2000, among American
    Reprographics Holdings, L.L.C., ARC Acquisition Co., L.L.C.,
    Mr. Chandramohan, Mr. Suriyakumar, GS Mezzanine
    Partners II, L.P. and GS Mezzanine Partners II
    Offshore, L.P. (incorporated by reference to Exhibit 10.20
    to the Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.31

First Amendment to Investor
    Registration Rights Agreement, among American Reprographics
    Holdings, L.L.C., American Reprographics Company, ARC
    Acquisition Co., L.L.C., CHS Associates IV, Ms. Paige
    Walsh, Mr. Chandramohan, Mr. Suriyakumar, GS Mezzanine
    Partners II, L.P., GS Mezzanine Partners II Offshore,
    L.P., Stone Street Fund 2000, L.P. and Bridge Street
    Special Opportunities Fund, 2000, L.P. (incorporated by
    reference to Exhibit 10.21 to the Registrants
    Registration Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).10
.32

Warrant Agreement, dated
    April 10, 2000, between American Reprographics Holdings,
    L.L.C. and each of GS Mezzanine Partners II, L.P. and GS
    Mezzanine Partners II Offshore, L.P. (incorporated by
    reference to Exhibit 10.22 to the Registrants
    Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.33

First Amendment to Warrant
    Agreement, dated September 8, 2000, between American
    Reprographics Holdings, L.L.C. and each of GS Mezzanine
    Partners II, L.P. and GS Mezzanine Partners II
    Offshore, L.P. (incorporated by reference to Exhibit 10.23
    to the Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004). 67




---



##### Table of Contents



Number

Description10
.34

Investor Unitholders Agreement,
    dated April 10, 2000, among American Reprographics
    Holdings, L.L.C., ARC Acquisition Co., L.L.C., GS Mezzanine
    Partners II, L.P. and GS Mezzanine Partners II
    Offshore, L.P. (incorporated by reference to Exhibit 10.24
    to the Registrants Registration Statement on
    Form S-1
    (Reg.
    No. 333-119788),
    as filed on October 15, 2004).10
.35

Termination Agreement of Investor
    Unitholders Agreement, dated November 29, 2004, among
    American Reprographics Holdings, L.L.C., ARC Acquisition Co.,
    L.L.C., GS Mezzanine Partners II, L.P., GS Mezzanine
    Partners II Offshore, L.P., Stone Street Fund 2000,
    L.P. and Bridge Street Special Opportunities Fund, 2000, L.P.
    (incorporated by reference to Exhibit 10.25 to the
    Registrants Registration Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on December 6, 2004).10
.36

Forms of Restricted Stock Award
    Agreements under 2005 Stock Plan (incorporated by reference to
    Exhibit 10.27 to the Registrants Registration
    Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on December 6, 2004).^10
.37

Form of Restricted Stock Unit
    Award Agreement under 2005 Stock Plan (incorporated by reference
    to Exhibit 10.28 to the Registrants Registration
    Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on December 6, 2004).^10
.38

Form of Stock Appreciation Right
    Agreement under 2005 Stock Plan (incorporated by reference to
    Exhibit 10.29 to the Registrants Registration
    Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).^10
.39

Employment Agreement, dated
    January 7, 2005, between American Reprographics Company and
    Mr. Sathiyamurthy Chandramohan (incorporated by reference
    to Exhibit 10.30 to the Registrants Registration
    Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).^10
.40

First Amendment to Employment
    Agreement between American Reprographics Company and
    Mr. Sathiyamurthy Chandramohan, effective November 18,
    2005 (incorporated by reference to Exhibit 10.36 to the
    Registrants
    Form 10-K
    filed on March 16, 2006).^10
.41

Second Amendment to Employment
    Agreement between American Reprographics Company and
    Mr. Sathiyamurthy Chandramohan, effective March 17,
    2006 (incorporated by reference to Exhibit 99.1 to the
    Registrants
    Form 8-K
    filed on March 23, 2006).^10
.42

Employment Agreement, dated
    January 7, 2005, between American Reprographics Company and
    Mr. Kumarakulasingam Suriyakumar (incorporated by reference
    to Exhibit 10.31 to the Registrants Registration
    Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).^10
.43

First Amendment to Employment
    Agreement between American Reprographics Company and
    Mr. Kumarakulasingam Suriyakumar, effective
    November 18, 2005 (incorporated by reference to
    Exhibit 10.38 to the Registrants
    Form 10-K
    filed on March 16, 2006).^10
.44

Second Amendment to Employment
    Agreement between American Reprographics Company and
    Mr. Kumarakulasingam Suriyakumar, effective March 17,
    2006 (incorporated by reference to Exhibit 99.2 to the
    Registrants
    Form 8-K
    filed on March 23, 2006).^10
.45

Employment Agreement, dated
    January 7, 2005, between American Reprographics Company and
    Mr. Mark W. Legg (incorporated by reference to
    Exhibit 10.32 to the Registrants Registration
    Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).^10
.46

Employment Agreement, dated
    January 7, 2005, between American Reprographics Company and
    Mr. Rahul K. Roy (incorporated by reference to
    Exhibit 10.33 to the Registrants Registration
    Statement on
    Form S-1
    A (Reg.
    No. 333-119788),
    as amended on January 13, 2005).^10
.47

Agreement to Grant Stock dated
    effective December 7, 2004, between American Reprographics
    Company and Rahul K. Roy (incorporated by reference to
    Exhibit 10.36 to the Registrants
    Form 10-K
    filed on March 31, 2005).^10
.48

First Amendment to Agreement to
    Grant Stock dated May 17, 2006 between American
    Reprographics Company and Rahul K. Roy.*^10
.49

Executive Employment Agreement
    between American Reprographics Company and Jonathan Mather dated
    November 29, 2006 (incorporated by reference to
    Exhibit 99.2 to the
    Form 8-K
    filed on November 30, 2006).^10
.50

Indemnification Agreement made as
    of December 4, 2006 between American Reprographics Company
    and Jonathan Mather.* 68




---



##### Table of Contents



Number

Description10
.51

Indemnification Agreement made as
    of September 30, 2004 between American Reprographics
    Company and Sathiyamurthy Chandramohan (incorporated by
    reference to Exhibit 10.37 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.52

Indemnification Agreement made as
    of September 30, 2004 between American Reprographics
    Company and Andrew W. Code (incorporated by reference to
    Exhibit 10.38 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.53

Indemnification Agreement made as
    of September 30, 2004 between American Reprographics
    Company and Thomas J. Formolo (incorporated by reference to
    Exhibit 10.39 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.54

Indemnification Agreement made as
    of October 7, 2004 between American Reprographics Company
    and Mark W. Legg (incorporated by reference to
    Exhibit 10.40 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.55

Indemnification Agreement made as
    of September 30, 2004 between American Reprographics
    Company and Manuel Perez de la Mesa (incorporated by reference
    to Exhibit 10.41 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.56

Indemnification Agreement made as
    of January 11, 2005 between American Reprographics Company
    and Edward D. Horowitz (incorporated by reference to
    Exhibit 10.42 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.57

Indemnification Agreement made as
    of March 3, 2005 between American Reprographics Company and
    Mark W. Mealy (incorporated by reference to Exhibit 10.43
    to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.58

Indemnification Agreement made as
    of September 30, 2004 between American Reprographics
    Company and Kumarakulasingam Suriyakumar (incorporated by
    reference to Exhibit 10.44 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.59

Indemnification Agreement made as
    of October 7, 2004 between American Reprographics Company
    and Rahul K. Roy (incorporated by reference to
    Exhibit 10.45 to the Registrants
    Form 10-K
    filed on March 31, 2005).10
.60

Indemnification Agreement made as
    of February 2, 2006 between American Reprographics Company
    and Dewitt Kerry McCluggage (incorporated by reference to
    Exhibit 10.51 to the Registrants
    Form 10-K
    filed on March 16, 2006).10
.61

Indemnification Agreement made as
    of May 22, 2006, between American Reprographics Company and
    Eriberto R. Scocimara.*10
.62

Consulting Agreement dated
    February 28, 2007 between American Reprographics Company,
    L.L.C. and Legg Consulting L.L.C.*21
.1

List of Subsidiaries.*23
.1

Consent of PricewaterhouseCoopers
    LLP, Independent Registered Public Accounting Firm.*31
.1

Certification by the Chief
    Executive Officer pursuant to
    Rules 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934.*31
.2

Certification by the Chief
    Financial Officer pursuant to
    Rules 13a-14(a)/15d-14(a)
    of the Securities Exchange Act of 1934.*32
.1

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.*     *
    
    Filed herewith^
    
    Indicates management contract or compensatory plan or agreement 69




---



##### Table of Contents



SIGNATURES
      By:
    /s/  SATHIYAMURTHY
    CHANDRAMOHAN         Signature

Title/s/  SATHIYAMURTHY
    CHANDRAMOHANSathiyamurthy
    Chandramohan

Chairman of the Board of Directors
    and
    Chief Executive Officer
    (Principal Executive Officer)/s/  KUMARAKULASINGAM
    SURIYAKUMARKumarakulasingam
    Suriyakumar

President, Chief Operating
    Officer, and Director/s/  JONATHAN
    R. MATHERJonathan
    R. Mather

Chief Financial Officer and
    Secretary/s/  THOMAS
    J. FORMOLOThomas
    J. Formolo

Director/s/  ERIBERTO
    SCOCIMARAEriberto
    Scocimara

Director/s/  DEWITT
    KERRY
    MCCLUGGAGEDewitt
    Kerry McCluggage

Director/s/  MARK
    W. MEALYMark
    W. Mealy

Director/s/  MANUEL
    PEREZ DE LA
    MESAManuel
    Perez de la Mesa

Director  70




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Managements
    Report on Internal Controls Over Financial Reporting


F-2Report of
    Independent Registered Public Accounting Firm


F-3Consolidated
    Balance Sheets as of December 31, 2005 and 2006


F-5Consolidated
    Statements of Income for the years ended December 31, 2004,
    2005 and 2006


F-6Consolidated
    Statements of Stockholders Equity and Comprehensive Income
    for the years ended December 31, 2004, 2005 and
    2006


F-7Consolidated
    Statements of Cash Flows for the years ended December 31,
    2004, 2005 and 2006


F-8Notes to
    Consolidated Financial Statements


F-9Financial Statement Schedule:Schedule II 
    Valuation and Qualifying Accounts


F-34   F-1




---



##### Table of Contents



STATEMENT
    OF MANAGEMENT RESPONSIBILITY FOR FINANCIAL STATEMENTS
     MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  Rule 13a-15(f). Internal Control  Integrated
    Framework Internal
    Control  Integrated Framework
 F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      Consolidated
    financial statements and financial statement schedule
      Internal
    control over financial reporting
  Internal Control  Integrated Framework Internal Control 
    Integrated Framework
   F-3




---



##### Table of Contents



F-4




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES



CONSOLIDATED
    BALANCE SHEETS  December 31,2005


2006(In thousands, exceptper share data)ASSETSCurrent assets:Cash and cash equivalents

$
22,643


$
11,642Restricted cash






8,491Accounts receivable, net


71,062



85,277Inventories, net


6,817



7,899Deferred income taxes


4,272



10,963Prepaid expenses and other current
    assets


6,425



6,796Total current assets


111,219



131,068Property and equipment, net


45,773



60,138Goodwill


245,271



291,290Other intangible assets, net


21,387



50,971Deferred financing costs, net


923



895Deferred income taxes


16,216



11,245Other assets


1,573



1,974Total assets

$
442,362


$
547,581LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
29,585


$
33,447Accrued payroll and
    payroll-related expenses


15,486



15,666Accrued expenses


9,910



27,132Accrued litigation charge






13,947Current portion of long-term debt
    and capital leases


20,441



21,048Total current liabilities


75,422



111,240Long-term debt and capital leases


253,371



252,097Total liabilities


328,793



363,337Commitments and contingenciesStockholders equity:Preferred stock, $.001 par
    value, 25,000,000 shares authorized; zero and zero shares
    issued and outstanding






Common stock, $.001 par
    value, 150,000,000 shares authorized; 44,598,815 and
    45,346,099, shares issued and outstanding


44



45Additional paid-in capital


56,825



75,465Deferred stock-based compensation


(1,903
)


(1,224
)Retained earnings


58,561



109,955Accumulated other comprehensive
    income


42



3Total stockholders equity


113,569



184,244Total liabilities and
    stockholders equity

$
442,362


$
547,581    F-5




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF INCOME  Year Ended December 31,2004


2005


2006(In thousands, except per share data)Reprographics services

$
333,305


$
369,123


$
438,375Facilities management


72,360



83,125



100,158Equipment and supplies sales


38,199



41,956



53,305Total net sales


443,864



494,204



591,838Cost of sales


263,787



289,580



337,509Gross profit


180,077



204,624



254,329Selling, general and
    administrative expenses


105,780



112,679



131,743Litigation reserve










11,262Provision for sales tax dispute
    settlement


1,389







Amortization of intangible assets


1,695



2,120



5,055Income from operations


71,213



89,825



106,269Other income, net


420



381



299Interest expense, net


(33,565
)


(26,722
)


(23,192
)Loss on early extinguishment of
    debt






(9,344
)


Income before income tax provision
    (benefit)


38,068



54,140



83,376Income tax provision (benefit)


8,520



(6,336
)


31,982Net income


29,548



60,476



51,394Earnings per share:Basic

$
0.83


$
1.43


$
1.14Diluted

$
0.79


$
1.40


$
1.13Weighted average common shares
    outstanding:Basic


35,493,136



42,264,001



45,014,786Diluted


37,464,123



43,178,001



45,594,950    F-6




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE
    INCOME  AccumulatedCommon Stock


Additional








Other


TotalMembers





Par


Paid-In


Deferred


Retained


Comprehensive


StockholdersDeficit


Shares


Value


Capital


Compensation


Earnings


Income


Equity(Dollars in thousands)Balance at December 31, 2003

$
(59,193
)





$



$



$



$



$
(822
)

$
(60,015
)Deferred stock-based compensation
    charge for options issued to employees


3,074















(3,074
)










Amortization of stock-based
    compensation


















547











547Comprehensive income:Net Income


29,548



























29,548Fair value adjustment of
    derivatives, net of tax


























1,028



1,028Comprehensive income






























30,576Issuance of common membership units


118



























118Write-off of notes receivable from
    members related to common membership units issued in 1998


(111
)


























(111
)Distribution to members


(6,124
)


























(6,124
)Balance at December 31, 2004


(32,688
)














(2,527
)






206



(35,009
)Amortization of deferred
    stock-based compensation for the period from January 1 to
    February 9, 2005


















61











61Comprehensive income for the period
    January 1 to February 9, 2005:Net Income


1,914



























1,914Fair value adjustment of derivatives


























195



195Comprehensive income






























2,109Distributions to members


(8,244
)


























(8,244
)Reorganization from LLC to
    C Corporation


39,018



35,510,011



35



(39,053
)














Issuance of common stock in initial
    public offering, net of underwriting discounts






7,666,667



8



92,682















92,690Issuance of common stock in
    exchange for warrants exercised upon initial public offering






754,476



1



















1Direct costs of initial public
    offering














(3,916
)














(3,916
)Amortization of deferred
    stock-based compensation for the period from February 10 to
    December 31, 2005


















563











563Issuance of common stock under
    Employee Stock Purchase Plan






362,061







4,000















4,000Stock options exercised






305,600







1,536















1,536Tax benefit from exercise of stock
    options














1,576















1,576Comprehensive income for the period
    from February 10, to December 31, 2005:Net income






















58,561







58,561Fair value adjustment of
    derivatives, net of tax effects


























(359
)


(359
)Comprehensive income






























58,202Balance at December 31, 2005






44,598,815



44



56,825



(1,903
)


58,561



42



113,569Stock-based compensation






28,253







1,536



679











2,215Issuance of common stock under
    Employee Stock Purchase Plan






9,032







290















290Issuance of common stock in
    connection with accrued bonuses






80,652







2,160















2,160Issuance of common stock in
    connection with acquisitions






246,277







8,500















8,500Stock options exercised






383,070



1



2,103















2,104Excess tax benefit from exercise of
    stock options














4,051















4,051Comprehensive incomeNet income






















51,394







51,394Foreign Currency Translation


























62



62Fair value adjustment of


























(101
)


(101
)derivatives, net of tax effectsComprehensive income






























51,355Balance at December 31, 2006

$




45,346,099


$
45


$
75,465


$
(1,224
)

$
109,955


$
3


$
184,244    F-7




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2004


2005


2006(Dollars in thousands)Cash flows from operating
    activitiesNet income

$
29,548


$
60,476


$
51,394Adjustments to reconcile net income
    to net cash provided by operating activities:Accretion of yield on redeemable
    preferred member units


2,023



449



Reserve for sales tax liability


1,389







Depreciation


17,035



17,045



22,694Amortization of intangible assets


1,695



2,120



5,055Amortization of deferred financing
    costs


1,964



1,660



364Stock-based compensation


547



624



2,215Litigation charge










13,947Excess tax benefit related to stock
    options exercised










(4,051
)Deferred income taxes


867



(24,815
)


(3,934
)Write-off of deferred financing
    costs


590



7,089



208Other non-cash items, net


1,370



859



324Changes in operating assets and
    liabilities, net of effect of business acquisitions:Accounts receivable


(5,780
)


(3,964
)


(5,769
)Inventory


386



754



949Prepaid expenses and other assets


(3,133
)


433



(5
)Accounts payable and accrued
    expenses


12,357



(6,082
)


14,963Net cash provided by operating
    activities


60,858



56,648



98,354Cash flows from investing
    activitiesCapital expenditures


(5,898
)


(5,237
)


(7,391
)Payments for businesses acquired,
    net of cash acquired and including other cash payments
    associated with the acquisitions


(4,654
)


(22,380
)


(62,225
)Restricted cash










(8,360
)Other


(34
)


70



488Net cash used in investing
    activities


(10,586
)


(27,547
)


(77,488
)Cash flows from financing
    activitiesProceeds from initial public
    offering, net of underwriting discounts






92,690



Proceeds from stock option exercises






1,536



2,103Proceeds from issuance of common
    stock under Employee Stock Purchase Plan






4,000



290Direct costs of initial public
    offering






(1,487
)


Excess tax benefit related to stock
    options exercised










4,051Redemption of preferred member units






(28,263
)


Proceeds from borrowings under debt
    agreements


1,000



18,000



44,000Payments on debt agreements and
    capital leases


(48,400
)


(97,212
)


(81,767
)Payment of loan fees


(355
)


(1,304
)


(544
)Proceeds from issuance of common
    membership units


118







Member distributions and redemptions


(6,124
)


(8,244
)


Net cash used in financing
    activities


(53,761
)


(20,284
)


(31,867
)Net change in cash and cash
    equivalents


(3,489
)


8,817



(11,001
)Cash and cash equivalents at
    beginning of period


17,315



13,826



22,643Cash and cash equivalents at end of
    period

$
13,826


$
22,643


$
11,642Supplemental disclosure of cash
    flow informationCash paid for:Interest

$
25,165


$
28,508


$
19,581Income taxes

$
5,720


$
21,323


$
22,571Noncash investing and financing
    activities:Capital lease obligations incurred

$
7,413


$
19,403


$
22,477Issuance of subordinated notes in
    connection with the acquisition of businesses

$
915


$
10,293


$
13,086Accrued Liabilities in connection
    with the acquisition of businesses

$



$



$
4,300Stock issued for acquisition

$



$



$
8,500Change in fair value of derivatives

$
1,028


$
(164
)

$
(101
)Issuance of common stock in
    connection with settlement of accrued bonuses

$



$



$
2,160    F-8




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 (Dollars
    in thousands, except dollars per share)
  1.
    DESCRIPTION
    OF BUSINESS AND BASIS OF PRESENTATION  business-to-business
  Reorganization
    and Initial Public Offering
        Basis
    of Presentation
    Reclassifications
   F-9




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES  Cash
    Equivalents
      Restricted
    Cash
    Concentrations
    of Credit Risk and Significant Vendors
          Inventories
  first-in,
 F-10




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Property
    and Equipment
    Buildings

10-20 yearsLeasehold improvements

10-20 years or lease term, if
    shorterMachinery and equipment

3-7 yearsFurniture and fixtures

3-7 years     Position 98-1 (SOP 98-1),
  SOP 98-1,
  Impairment
    of Long-Lived Assets
   F-11




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Goodwill
    and Other Intangible Assets
  and/or
        GoodwillBalance at December 31, 2005

$
245,271Additions

$
46,019Balance at December 31, 2006

$
291,290     not-to-compete not-to-compete
    December 31, 2005


December 31, 2006Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


AmountAmortizable other intangible
    assets:Customer relationships

$
25,588


$
6,241


$
19,347


$
55,685


$
10,799


$
44,886Trade names and trademarks

$
2,369


$
329


$
2,040


$
5,886


$
566


$
5,320Non-Compete Agreements













$
1,025


$
260


$
765$
27,957


$
6,570


$
21,387


$
62,596


$
11,625


$
50,971  F-12




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2007

$
6,3612008


5,8572009


5,0952010


4,5052011


4,000Thereafter


25,153$
50,971   Deferred
    Financing Costs
    Derivative
    Financial Instruments
           F-13




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Adoption
    of Statement of Financial Accounting Standard
    No. 150
    Fair
    Values of Financial Instruments
    Cash and cash equivalents:
  Restricted Cash:
  Short- and long-term debt:
 F-14




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Interest rate collar agreements:
  Self-Insurance
    Liability
    Revenue
    Recognition
             F-15




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Comprehensive
    Income
    Year EndedDecember 31,2005


2006Net income

$
60,476


$
51,394Foreign currency translation
    adjustments






62Decrease in fair value of
    financial derivative instruments, net of tax effects


(164
)


(101
)Comprehensive income

$
60,312


$
51,355     Segment
    and Geographic Reporting
        Year Ended December 31,2004


2005


2006Reprographics services

$
332,004


$
367,517


$
436,140Facilities management


72,360



83,125



100,158Equipment and supplies sales


38,199



41,956



53,305Software licenses and membership
    fees


1,301



1,606



2,235Total

$
443,864


$
494,204


$
591,838   Advertising
    and Shipping and Handling Costs
    Income
    Taxes
   F-16




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Stock-Based
    Compensation
    FAS 123(R-3)
   F-17




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedDecember 31,2004


2005Net income attributed to common
    sharesAs reported

$
29,548


$
60,476Equity-based employee compensation
    cost included in as reported net income


547



624Equity-based employee compensation
    cost that would have been included in the determination of net
    income attributed to common shares if the fair value method had
    been applied


(727
)


(953
)Adjusted

$
29,368


$
60,147Basic earnings per common share:As reported

$
0.83


$
1.43Equity-based employee compensation
    cost, net of related tax effects, included in as reported net
    income attributed to common shares


0.02



0.01Equity-based employee compensation
    cost, net of related tax effects, that would have been included
    in the determination of net income attributed to common shares
    if the fair value method had been applied


(0.02
)


(0.02
)Adjusted

$
0.83


$
1.42Diluted earnings per common share:As reported

$
0.79


$
1.40Equity-based employee compensation
    cost, net of related tax effects, included in as reported net
    income attributed to common shares


0.02



0.01Equity-based employee compensation
    cost, net of related tax effects, that would have been included
    in the determination of net income attributed to common shares
    if the fair value method had been applied


(0.02
)


(0.02
)Adjusted

$
0.79


$
1.39        F-18




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedDecember 31, 2006Weighted average assumptions used:Risk free interest rate


4.77
%Expected volatility


25.99
%Expected dividend yield


0.00
%       Research
    and Development Expenses
  SOP 98-1
  Use of
    Estimates
    Earnings
    Per Share
   F-19




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2004


2005


2006Weighted average common shares
    outstanding during the period  basic


35,493,136



42,264,001



45,014,786Effect of dilutive stock options


1,138,918



833,579



580,164Effect of dilutive warrants


832,069



80,421



Weighted average common shares
    outstanding during the period  diluted


37,464,123



43,178,001



45,594,950   Recent
    Accounting Pronouncements
    Considering the Effects of Prior Year
    Misstatements when Quantifying Misstatements in Current Year
    Financial Statements,
  Fair Value
    Measurements.
  3.
    ACQUISITIONS       F-20




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    15-year
    December 31,2005


2006Purchase price

$
32,080


$
87,680Cash and cash equivalents


1,235



841Accounts receivable


5,767



9,466Property and equipment


2,735



7,638Inventories


1,729



2,173Other assets


821



1,459Total assets


12,287



21,577Accounts payable and other
    liabilities


4,162



9,766Debt and capital leases


853



1,552Net assets acquired


7,272



10,259Excess purchase price over net
    tangible assets acquired

$
24,808


$
77,421Intangible assets:Customer relationships

$
10,780


$
29,603Trade names


630



3,005Non-compete agreements






1,025Goodwill


13,398



43,788$
24,808


$
77,421    F-21




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2004


2005


2006Net sales

$
450,906


$
524,630


$
628,503Net income attributable to common
    stock

$
29,813


$
69,022


$
55,690Earnings per share:Basic

$
0.84


$
1.63


$
1.24Diluted

$
0.80


$
1.60


$
1.22           4.
    PROPERTY
    AND EQUIPMENT    December 31,2005


2006Machinery and equipment

$
119,335


$
148,825Buildings and leasehold
    improvements


17,700



21,168Furniture and fixtures


4,998



5,676142,033



175,669Less accumulated depreciation and
    amortization


(96,260
)


(115,531
)$
45,773


$
60,138    F-22




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    LONG-TERM
    DEBT    December 31,2005


2006Borrowings from senior secured
    First Priority  Revolving Credit Facility; variable
    interest payable quarterly (8.25% and 9.0% interest rate at
    December 31, 2005 and December 31, 2006); any unpaid
    principal and interest due December 18, 2008

$
5,000



Borrowings from senior secured
    First Priority  Term Loan Credit Facility;
    variable interest payable quarterly (6.2% and 7.1% interest rate
    at December 31, 2005 and December 31, 2006,
    respectively); principal payable in varying quarterly
    installments; any unpaid principal and interest due
    June 18, 2009


230,423


$
215,651Various subordinated notes
    payable; interest ranging from 5.0% to 7.1%; principal and
    interest payable monthly through January 2012


11,262



20,103Various capital leases; interest
    rates ranging to 24.5%; principal and interest payable monthly
    through February 2013


27,127



37,391273,812



273,145Less current portion


(20,441
)


(21,048
)$
253,371


$
252,097          F-23




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          
    An increase in the aggregate purchase price limitation for
    business acquisitions commencing with fiscal year ending
    December 31, 2006;
    An increase in the threshold for capital expenditures during any
    trailing twelve-month period; and
    Permit the company to issue certain shares of its common stock
    in connection with certain proposed acquisitions.           F-24




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Long-Term


Capital LeaseDebt


ObligationsYear ending December 31:2007

$
6,731


$
14,3172008


112,175



11,5182009


111,326



6,4962010


4,284



2,8722011


1,211



1,818Thereafter


27



370$
235,754


$
37,391   6.
    INCOME
    TAXES        Year Ended December 31,2004


2005


2006Current:Federal

$
6,079


$
14,401


$
29,318State


1,574



4,078



6,5987,653



18,479



35,916Deferred:Federal


310



(21,713
)


(3,059
)State


557



(3,102
)


(875
)867



(24,815
)


(3,934
)Income tax provision (benefit)


8,520



(6,336
)


31,982Deferred income tax benefit as a
    result of the Reorganization






27,701



Income tax provision excluding
    effects of Reorganization

$
8,520


$
21,365


$
31,982  F-25




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2005


2006Current portion of deferred tax
    assets (liabilities):Financial statement accruals not
    currently deductible

$
3,538


$
9,518State taxes


734



1,445Net current deferred tax assets


4,272



10,963Non-current portion of deferred
    tax assets and (liabilities):Excess of income tax basis over
    net book value of intangible assets


31,612



27,223Excess of income tax basis over
    net book value of property, plant and equipment


1,993



4,747Stock-based compensation


364



836Excess of net book value over
    income tax basis of intangible assets


(17,753
)


(21,561
)Net non-current deferred tax assets


16,216



11,245Net deferred tax assets

$
20,488


$
22,208     Year Ended December 31,2004


2005


2006Statutory federal income tax rate


35
%


35
%


35
%State taxes


4



5



4Non-deductible expenses and other






(1
)


Income of the LLC not taxed at the
    LLC level


(17
)






Non-recurring income tax benefit
    due to reorganization






(51
)


Discrete item










(1
)Effective income tax rate


22
%


(12
)%


38
%     7.
    COMMITMENTS
    AND CONTINGENCIES   F-26




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Third


RelatedParty


Party


TotalYear ending December 31:2007

$
25,839


$
3,968


$
29,8072008


17,535



3,960



21,4952009


11,909



3,698



15,6072010


7,272



3,229



10,5012011


4,087



2,095



6,182Thereafter


7,751



5,050



12,801$
74,393


$
22,000


$
96,393   month-to-month
         F-27




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     8.
    RELATED
    PARTY TRANSACTIONS        9.
    RETIREMENT
    PLANS    10.
    EMPLOYEE
    STOCK PURCHASE PLAN AND STOCK OPTION PLAN  Employee
    Stock Purchase Plan
     F-28




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      American
    Reprographics Holdings, L.L.C. Unit Option
    Plan II        Year EndedDecember 31,2004WeightedNumber


Averageof


ExerciseShares


PriceOutstanding at beginning of the
    period


1,446,000


$
5.09Granted


307,915


$
5.91Exercised


(22,500
)

$
(5.25
)Expired





$
Forfeited


(41,000
)

$
(5.52
)Outstanding at end of the period


1,690,415


$
5.22      F-29




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Employee
    Stock Plan
           F-30




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2006WeightedWeighted


Average


AggregateAverage


Contractual


IntrinsicExercise


Life


ValueShares


Price


(In years)


(In thousands)Outstanding at December 31,
    2004


1,690,415


$
5.22Granted


49,270


$
23.85Exercised


(305,600
)

$
(5.03
)Forfeited


(11,500
)

$
(5.82
)Outstanding at December 31,
    2005


1,422,585


$
5.90Granted


682,485


$
27.99Exercised


(383,070
)

$
5.49Forfeited


(38,400
)

$
17.55Outstanding at December 31,
    2006


1,683,600


$
14.69



7.0


$
31,407Exercisable at December 31,
    2006


844,364


$
6.54



5.3


$
22,628   in-the-money
    Weighted AverageGrant DateNon-vested Options

Shares


Fair Market ValueNon-vested at December 31,
    2005


390,402


$
6.83Granted


682,485


$
10.56Vested


(196,751
)

$
5.77Forfeited


(36,900
)

$
9.83Non-vested at December 31,
    2006


839,236


$
9.87    F-31




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Outstanding atRange of Exercise Price

December 31, 2006$ 4.75 - $ 6.85


984,199$23.85 - $25.95


511,916$31.95 - $35.42


187,485$ 4.75 - $35.42


1,683,600   Restricted
    Stock  Sub-Hub
  11.
    MEMBERS
    EQUITY AND REDEEMABLE PREFERRED UNITS  Mandatorily
    Redeemable Preferred Membership Units      Distributions
    to Members   F-32




---



##### Table of Contents



AMERICAN
    REPROGRAPHICS COMPANY AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    12.
    QUARTERLY
    FINANCIAL DATA (Unaudited)    Quarter EndedMarch 31,


June 30,


September 30,


December 31,2005


2005


2005


2005Net sales

$
116,466


$
125,560


$
127,487


$
124,691Gross profit

$
48,325


$
53,654


$
52,522


$
50,124Net income

$
35,563


$
11,383


$
10,518


$
3,012Net income per share:Basic

$
0.87


$
0.26


$
0.24


$
0.07Diluted

$
0.85


$
0.25


$
0.23


$
0.07   Quarter EndedMarch 31,


June 30,


September 30,


December 31,2006


2006


2006


2006Net sales

$
140,802


$
151,527


$
152,538


$
146,971Gross profit

$
60,359


$
65,814


$
67,007


$
61,149Net income

$
14,375


$
8,427


$
15,756


$
12,836Net income per share:Basic

$
0.32


$
0.19


$
0.35


$
0.28Diluted

$
0.32


$
0.18


$
0.35


$
0.28  F-33




---



##### Table of Contents



Schedule II
    AMERICAN REPROGRAPHICS COMPANY AND SUBSIDIARIES
    VALUATION AND QUALIFYING ACCOUNTS(Dollars in
    thousands) Balance at


Charges to


Charged to





Balance atBeginning


Cost and


Other





End ofof Period


Expenses


Accounts(1)


Deductions(2)


PeriodYear ended December 31, 2004Allowance for doubtful accounts

$
2,790


$
1,281


$
43


$
(1,061
)

$
3,053Allowance for inventory
    obsolescence


278



89







(46
)


321$
3,068


$
1,370


$
43


$
(1,107
)

$
3,374Year ended December 31, 2005Allowance for doubtful accounts

$
3,053


$
1,241


$
333


$
(1,455
)

$
3,172Allowance for inventory
    obsolescence


321



109











430$
3,374


$
1,350


$
333


$
(1,455
)

$
3,602Year ended December 31, 2006Allowance for doubtful accounts

$
3,172


$
599


$
1,442


$
(869
)

$
4,344Allowance for inventory
    obsolescence


430



68



115



(86
)


527$
3,602


$
667


$
1,557


$
(955
)

$
4,871     (1)
    
    Acquisition of businesses.(2)
    
    Deductions represent uncollectible accounts written-off net of
    recoveries and inventory adjustments. F-34