ARC Document Solutions, Inc.

Non-GAAP Measures

Reconciliation of net income (loss) attributable to ARC to unaudited adjusted net income attributable to ARC

(In thousands, except per share data)

(Unaudited)

 Three Months Ended

Nine Months Ended

September 30,

September 30,

2016

2015

2016

2015

Net income (loss) attributable to ARC Document Solutions, Inc.

$

2,841

$

80,286

$

(50,489)

$

93,979

Loss on extinguishment of debt

66

96

156

193

Goodwill impairment

—

—

73,920

—

Restructuring expense

—

4

7

89

Trade secret litigation costs

—

—

—

34

Income tax benefit related to above items

(26)

(41)

(13,395)

(125)

Deferred tax valuation allowance and other discrete tax items

138

(76,147)

341

(80,554)

Unaudited adjusted net income attributable to ARC Document Solutions, Inc.

$

3,019

$

4,198

$

10,540

$

13,616

Actual:

Earnings (loss) per share attributable to ARC Document Solutions, Inc. shareholders:

Basic

$

0.06

$

1.72

$

(1.10)

$

2.02

Diluted

$

0.06

$

1.69

$

(1.10)

$

1.98

Weighted average common shares outstanding:

Basic

45,599

46,698

46,055

46,601

Diluted

46,189

47,557

46,055

47,541

Adjusted:

Earnings per share attributable to ARC Document Solutions, Inc. shareholders:

Basic

$

0.07

$

0.09

$

0.23

$

0.29

Diluted

$

0.07

$

0.09

$

0.23

$

0.29

Weighted average common shares outstanding:

Basic

45,599

46,698

46,055

46,601

Diluted

46,189

47,557

46,655

47,541