Guarantor Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2014

Guarantor Subsidiaries [Abstract]

Summary Consolidating Statements of Income (Guaranteed Senior Notes Payable)

Summary Consolidating

Statements of Comprehensive Income (Loss)

(in thousands)

	For the three months ended September 30,
2014:	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating /  Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
Net sales	$	—		$	1,576,811		$	31,244		$	—		$	1,608,055
Cost of sales	—			1,236,644			19,951			—			1,256,595
Gross profit	—			340,167			11,293			—			351,460
Selling, general and administrative expenses	1,053			172,857			5,030			—			178,940
Provision for doubtful accounts	—			19,570			341			—			19,911
Settlement, litigation and other related charges	—			12,868			—			—			12,868
Other charges	—			3,999			—			—			3,999
Operating income (loss)	(1,053		)	130,873			5,922			—			135,742
Interest expense, net of investment income	(28,456		)	(261		)	—			—			(28,717		)
Income (loss) before income taxes	(29,509		)	130,612			5,922			—			107,025
Income tax (benefit) expense	(11,503		)	48,139			2,312			—			38,948
Income (loss) from continuing operations	(18,006		)	82,473			3,610			—			68,077
Loss from discontinued operations	—			(526		)	(2,720		)	—			(3,246		)
Equity of net income of subsidiaries	82,837			—			—			(82,837		)	—
Net income	$	64,831		$	81,947		$	890		$	(82,837	)	$	64,831
Comprehensive income	$	65,170		$	81,947		$	890		$	(82,837	)	$	65,170
2013:
Net sales	$	—		$	1,485,545		$	29,623		$	—		$	1,515,168
Cost of sales	—			1,146,140			17,057			—			1,163,197
Gross profit	—			339,405			12,566			—			351,971
Selling, general and administrative expenses	1,504			176,970			4,194			—			182,668
Provision for doubtful accounts	—			24,487			476			—			24,963
Settlement, litigation and other related charges	—			143,484			—			—			143,484
Other charges	—			54,361			7,271			—			61,632
Operating income (loss)	(1,504		)	(59,897		)	625			—			(60,776		)
Interest expense, net of investment income	(34,583		)	(344		)	2			—			(34,925		)
Income (loss) before income taxes	(36,087		)	(60,241		)	627			—			(95,701		)
Income tax (benefit) expense	(14,190		)	(15,270		)	3,110			—			(26,350		)
Income (loss) from continuing operations	(21,897		)	(44,971		)	(2,483		)	—			(69,351		)
Income (loss) from discontinued operations	—			(2,100		)	5,142			—			3,042
Equity of net income of subsidiaries	(44,412		)	—			—			44,412			—
Net loss	$	(66,309	)	$	(47,071	)	$	2,659		$	44,412		$	(66,309	)
Comprehensive loss	$	(66,305	)	$	(47,071	)	$	2,659		$	44,412		$	(66,305	)

Note 9 - Guarantor Subsidiaries (Continued)

Summary Consolidating

Statements of Comprehensive Income (Loss)

(in thousands)

	For the nine months ended September 30,
2014:	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating /  Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
Net sales	$	—		$	4,697,025		$	92,652		$	—		$	4,789,677
Cost of sales	—			3,669,163			56,370			—			3,725,533
Gross profit	—			1,027,862			36,282			—			1,064,144
Selling, general and administrative expenses	3,481			531,899			14,436			—			549,816
Provision for doubtful accounts	—			61,202			1,360			—			62,562
Settlement, litigation and other related charges	—			27,467			—			—			27,467
Other charges	—			25,559			—			—			25,559
Operating income (loss)	(3,481		)	381,735			20,486			—			398,740
Interest expense, net of investment income	(86,676		)	(1,462		)	—			—			(88,138		)
Income (loss) before income taxes	(90,157		)	380,273			20,486			—			310,602
Income tax (benefit) expense	(34,846		)	144,569			7,918			—			117,641
Income (loss) from continuing operations	(55,311		)	235,704			12,568			—			192,961
Loss from discontinued operations	—			(1,245		)	(41,140		)	—			(42,385		)
Equity of net income of subsidiaries	205,887			—			—			(205,887		)	—
Net income	$	150,576		$	234,459		$	(28,572	)	$	(205,887	)	$	150,576
Comprehensive income	$	151,182		$	234,459		$	(28,572	)	$	(205,887	)	$	151,182
2013:
Net sales	$	—		$	4,383,420		$	93,809		$	—		$	4,477,229
Cost of sales	—			3,362,356			53,683			—			3,416,039
Gross profit	—			1,021,064			40,126			—			1,061,190
Selling, general and administrative expenses	3,696			547,264			14,316			—			565,276
Provision for doubtful accounts	—			73,671			1,442			—			75,113
Settlement, litigation and other related charges	—			169,615			—			—			169,615
Other charges	—			89,635			7,271			—			96,906
Operating income (loss)	(3,696		)	140,879			17,097			—			154,280
Interest expense, net of investment income	(92,757		)	(890		)	(364		)	—			(94,011		)
Income (loss) before income taxes	(96,453		)	139,989			16,733			—			60,269
Income tax (benefit) expense	(37,395		)	62,093			9,306			—			34,004
Income (loss) from continuing operations	(59,058		)	77,896			7,427			—			26,265
Income (loss) from discontinued operations	—			(9,115		)	23,114			—			13,999
Equity of net income of subsidiaries	99,322			—			—			(99,322		)	—
Net income	$	40,264		$	68,781		$	30,541		$	(99,322	)	$	40,264
Comprehensive loss	$	40,170		$	68,781		$	30,541		$	(99,322	)	$	40,170

Condensed Consolidating Balance Sheets (Guaranteed Senior Notes Payable)

Condensed Consolidating Balance Sheets

(in thousands)

As of September 30, 2014:	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating/Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
ASSETS
Cash and cash equivalents	$	248,786	$	26,183	$	11,974	$	—		$	286,943
Accounts receivable, net (including intercompany)	—		648,877		94,673		(92,326		)	651,224
Inventories	—		486,761		7,802		—			494,563
Deferred income tax benefits, net-current	—		56,135		374		(425		)	56,084
Other current assets	30,506		257,138		27,521		—			315,165
Current assets of discontinued operations	—		—		—		—			—
Total current assets	279,292		1,475,094		142,344		(92,751		)	1,803,979
Properties and equipment, net	—		325,405		5,196		—			330,601
Goodwill	—		4,031,878		28,805		—			4,060,683
Identifiable intangible assets, net	—		104,884		1,541		—			106,425
Other noncurrent assets	38,039		57,571		39		—			95,649
Noncurrent assets of discontinued operations	—		—		—		—			—
Investment in subsidiaries	4,952,869		—		—		(4,952,869		)	—
Total assets	$	5,270,200	$	5,994,832	$	177,925	$	(5,045,620	)	$	6,397,337
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities (including intercompany)	$	30,230	$	472,964	$	32,138	$	(92,326	)	$	443,006
Current portion of long-term debt	495,713		—		—		—			495,713
Current liabilities of discontinued operations	—		—		—		—			—
Long-term debt, notes and convertible debentures	1,402,712		8,758		—		—			1,411,470
Deferred income tax liabilities	377,955		645,327		—		(425		)	1,022,857
Other noncurrent liabilities	—		58,891		1,810		—			60,701
Noncurrent liabilities of discontinued operations	—		—		—		—			—
Convertible debt	308,787		—		—		—			308,787
Stockholders’ equity	2,654,803		4,808,892		143,977		(4,952,869		)	2,654,803
Total liabilities and stockholders’ equity	$	5,270,200	$	5,994,832	$	177,925	$	(5,045,620	)	$	6,397,337
As of December 31, 2013:
ASSETS
Cash and cash equivalents	$	275,910	$	68,050	$	12,041	$	—		$	356,001
Accounts receivable, net (including intercompany)	—		693,729		315,323		(313,368		)	695,684
Inventories	—		505,567		6,851		—			512,418
Deferred income tax benefits, net-current	—		135,148		—		(54		)	135,094
Other current assets	1,989		242,166		21,381		—			265,536
Current assets of discontinued operations	—		12,305		37,690		—			49,995
Total current assets	277,899		1,656,965		393,286		(313,422		)	2,014,728
Properties and equipment, net	—		301,200		4,688		—			305,888
Goodwill	—		4,028,651		28,805		—			4,057,456
Identifiable intangible assets, net	—		127,798		2,176		—			129,974
Other noncurrent assets	41,825		54,834		63		—			96,722
Noncurrent assets of discontinued operations	—		3,762		83,316		—			87,078
Investment in subsidiaries	5,131,280		—		—		(5,131,280		)	—
Total assets	$	5,451,004	$	6,173,210	$	512,334	$	(5,444,702	)	$	6,691,846
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities (including intercompany)	$	83,028	$	793,461	$	23,986	$	(313,368	)	$	587,107
Current portion of long-term debt	527,204		—		—		—			527,204
Current liabilities of discontinued operations	—		1,894		16,952		—			18,846
Long-term debt, notes and convertible debentures	1,405,628		13,191		—		—			1,418,819
Deferred income tax liabilities	363,240		635,640		13,907		(54		)	1,012,733
Other noncurrent liabilities	—		52,072		1,763		—			53,835
Noncurrent liabilities of discontinued operations	—		176		1,222		—			1,398
Convertible debt	331,101		—		—		—			331,101
Stockholders’ equity	2,740,803		4,676,776		454,504		(5,131,280		)	2,740,803
Total liabilities and stockholders’ equity	$	5,451,004	$	6,173,210	$	512,334	$	(5,444,702	)	$	6,691,846

Condensed Consolidating Statements of Cash Flows (Guaranteed Senior Notes Payable)

Condensed Consolidating Statements of Cash Flows

(in thousands)

	For the nine months ended September 30,
2014:	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Omnicare, Inc. and Subsidiaries
Cash flows from operating activities:
Net cash flows (used in) from operating activities	$	(68,865	)	$	425,119		$	(837	)	$	355,417
Cash flows from investing activities:
Divestiture of businesses, net	—			71,194			—			71,194
Capital expenditures	—			(67,217		)	(654		)	(67,871		)
Other	—			(881		)	—			(881		)
Net cash flows from (used in) investing activities	—			3,096			(654		)	2,442
Cash flows from financing activities:
Payments on terms loans	(15,938		)	—			—			(15,938		)
Payments on long-term borrowings and obligations	(176,983		)	—			—			(176,983		)
Decrease in cash overdraft balance	(10,036		)	(9,750		)	—			(19,786		)
Payments for Omnicare common stock repurchase	(160,438		)	—			—			(160,438		)
Dividends paid	(58,419		)	—			—			(58,419		)
Other	463,555			(458,908		)	—			4,647
Net cash flows from (used in) financing activities	41,741			(468,658		)	—			(426,917		)
Net increase (decrease) in cash and cash equivalents	(27,124		)	(40,443		)	(1,491		)	(69,058		)
Increase (decrease) from discontinued operations	—			1,424			(1,424		)	—
Net increase (decrease) from continuing operations	(27,124		)	(41,867		)	(67		)	(69,058		)
Cash and cash equivalents at beginning of period	275,910			68,050			12,041			356,001
Cash and cash equivalents at end of period	$	248,786		$	26,183		$	11,974		$	286,943
2013:
Cash flows from operating activities:
Net cash flows (used in) from operating activities	$	(42,519	)	$	507,984		$	(10,800	)	$	454,665
Cash flows from investing activities:
Acquisition of businesses, net of cash received	—			(3,798		)	—			(3,798		)
Divestiture of business, net	—			675			10,408			11,083
Capital expenditures	—			(71,984		)	(1,295		)	(73,279		)
Other	(227		)	(180		)	—			(407		)
Net cash flows used in investing activities	(227		)	(75,287		)	9,113			(66,401		)
Cash flows from financing activities:
Payments on term loans	(15,938		)	—			—			(15,938		)
Payments on long-term borrowings and obligations	(190,403		)	—			—			(190,403		)
Fees paid for financing activities	(4,851		)	—			—			(4,851		)
Decrease in cash overdraft balance	(10,232		)	(1,258		)	—			(11,490		)
Payments for Omnicare common stock repurchases	(91,259		)	—			—			(91,259		)
Dividends paid	(43,011		)	—			—			(43,011		)
Other	442,769			(422,607		)	—			20,162
Net cash flows from (used in) financing activities	87,075			(423,865		)	—			(336,790		)
Net increase in cash and cash equivalents	44,329			8,832			(1,687		)	51,474
Decrease from discontinued operations	—			—			(2,169		)	(2,169		)
Net increase (decrease) from continuing operations	44,329			8,832			482			53,643
Cash and cash equivalents at beginning of period	383,674			49,108			11,838			444,620
Cash and cash equivalents at end of period	$	428,003		$	57,940		$	12,320		$	498,263

Summary Consolidating Statements of Income (Guaranteed Convertible Senior Debentures)

Summary Consolidating

Statements of Comprehensive Income (Loss)

(in thousands)

	For the three months ended September 30,
2014:	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Consolidating /  Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
Net sales	$	—		$	—		$	1,608,055		$	—		$	1,608,055
Cost of sales	—			—			1,256,595			—			1,256,595
Gross profit	—			—			351,460			—			351,460
Selling, general and administrative expenses	1,053			430			177,457			—			178,940
Provision for doubtful accounts	—			—			19,911			—			19,911
Settlement, litigation and other related charges	—			—			12,868			—			12,868
Other charges	—			—			3,999			—			3,999
Operating income (loss)	(1,053		)	(430		)	137,225			—			135,742
Interest expense, net of investment income	(28,456		)	—			(261		)	—			(28,717		)
Income (loss) before income taxes	(29,509		)	(430		)	136,964			—			107,025
Income tax (benefit) expense	(11,503		)	(168		)	50,619			—			38,948
Income (loss) from continuing operations	(18,006		)	(262		)	86,345			—			68,077
Loss from discontinued operations	—			—			(3,246		)	—			(3,246		)
Equity of net income of subsidiaries	82,837			—			—			(82,837		)	—
Net income (loss)	$	64,831		$	(262	)	$	83,099		$	(82,837	)	$	64,831
Comprehensive income (loss)	$	65,170		$	(262	)	$	83,099		$	(82,837	)	$	65,170
2013:
Net sales	$	—		$	—		$	1,515,168		$	—		$	1,515,168
Cost of sales	—			—			1,163,197			—			1,163,197
Gross profit	—			—			351,971			—			351,971
Selling, general and administrative expenses	1,504			417			180,747			—			182,668
Provision for doubtful accounts	—			—			24,963			—			24,963
Settlement, litigation and other related charges	—			—			143,484			—			143,484
Other charges	—			—			61,632			—			61,632
Operating loss	(1,504		)	(417		)	(58,855		)	—			(60,776		)
Interest expense, net of investment income	(34,583		)	—			(342		)	—			(34,925		)
Loss before income taxes	(36,087		)	(417		)	(59,197		)	—			(95,701		)
Income tax benefit	(14,190		)	(164		)	(11,996		)	—			(26,350		)
Loss from continuing operations	(21,897		)	(253		)	(47,201		)	—			(69,351		)
Income from discontinued operations	—			—			3,042			—			3,042
Equity of net income of subsidiaries	(44,412		)	—			—			44,412			—
Net income (loss)	$	(66,309	)	$	(253	)	$	(44,159	)	$	44,412		$	(66,309	)
Comprehensive income (loss)	$	(66,305	)	$	(253	)	$	(44,159	)	$	44,412		$	(66,305	)

Condensed Consolidating Balance Sheets (Guaranteed Convertible Senior Debentures)

Condensed Consolidating Balance Sheets

(in thousands)

As of September 30, 2014:	Parent		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Consolidating/Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
ASSETS
Cash and cash equivalents	$	248,786	$	—	$	38,157	$	—		$	286,943
Accounts receivable, net (including intercompany)	—		192		651,224		(192		)	651,224
Inventories	—		—		494,563		—			494,563
Deferred income tax benefits, net-current	—		—		56,084		—			56,084
Other current assets	30,506		—		284,659		—			315,165
Current assets of discontinued operations	—		—		—		—			—
Total current assets	279,292		192		1,524,687		(192		)	1,803,979
Properties and equipment, net	—		13		330,588		—			330,601
Goodwill	—		—		4,060,683		—			4,060,683
Identifiable intangible assets, net	—		—		106,425		—			106,425
Other noncurrent assets	38,039		19		57,591		—			95,649
Noncurrent assets of discontinued operations	—		—		—		—			—
Investment in subsidiaries	4,952,869		—		—		(4,952,869		)	—
Total assets	$	5,270,200	$	224	$	6,079,974	$	(4,953,061	)	$	6,397,337
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities (including intercompany)	$	30,230	$	—	$	412,968	$	(192	)	$	443,006
Current portion of long-term debt	495,713		—		—		—			495,713
Current liabilities of discontinued operations	—		—		—		—			—
Long-term debt, notes and convertible debentures	1,402,712		—		8,758		—			1,411,470
Deferred income tax liabilities	377,955		—		644,902		—			1,022,857
Other noncurrent liabilities	—		—		60,701		—			60,701
Noncurrent liabilities of discontinued operations	—		—		—		—			—
Convertible debt	308,787		—		—		—			308,787
Stockholders’ equity	2,654,803		224		4,952,645		(4,952,869		)	2,654,803
Total liabilities and stockholders’ equity	$	5,270,200	$	224	$	6,079,974	$	(4,953,061	)	$	6,397,337
As of December 31, 2013:
ASSETS
Cash and cash equivalents	$	275,910	$	—	$	80,091	$	—		$	356,001
Accounts receivable, net (including intercompany)	—		210		695,684		(210		)	695,684
Inventories	—		—		512,418		—			512,418
Deferred income tax benefits, net-current	—		—		135,094		—			135,094
Other current assets	1,989		—		263,547		—			265,536
Current assets of discontinued operations	—		—		49,995		—			49,995
Total current assets	277,899		210		1,736,829		(210		)	2,014,728
Properties and equipment, net	—		19		305,869		—			305,888
Goodwill	—		—		4,057,456		—			4,057,456
Identifiable intangible assets, net	—		—		129,974		—			129,974
Other noncurrent assets	41,825		19		54,878		—			96,722
Noncurrent assets of discontinued operations	—		—		87,078		—			87,078
Investment in subsidiaries	5,131,280		—		—		(5,131,280		)	—
Total assets	$	5,451,004	$	248	$	6,372,084	$	(5,131,490	)	$	6,691,846
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities (including intercompany)	$	83,028	$	—	$	504,289	$	(210	)	$	587,107
Current portion of long-term debt	527,204		—		—		—			527,204
Current liabilities of discontinued operations	—		—		18,846		—			18,846
Long-term debt, notes and convertible debentures	1,405,628		—		13,191		—			1,418,819
Deferred income tax liabilities	363,240		—		649,493		—			1,012,733
Other noncurrent liabilities	—		—		53,835		—			53,835
Noncurrent liabilities of discontinued operations	—		—		1,398		—			1,398
Convertible debt	331,101		—		—		—			331,101
Stockholders’ equity	2,740,803		248		5,131,032		(5,131,280		)	2,740,803
Total liabilities and stockholders’ equity	$	5,451,004	$	248	$	6,372,084	$	(5,131,490	)	$	6,691,846

Condensed Consolidating Statements of Cash Flows (Guaranteed Convertible Senior Debentures)

Condensed Consolidating Statements of Cash Flows - Unaudited

(in thousands)

	For the nine months ended September 30,
2014:	Parent			Guarantor Subsidiary		Non-Guarantor Subsidiaries			Omnicare, Inc. and Subsidiaries
Cash flows from operating activities:
Net cash flows (used in) from operating activities	$	(68,865	)	$	—	$	424,282		$	355,417
Cash flows from investing activities:
Disposition of businesses	—			—		71,194			71,194
Capital expenditures	—			—		(67,871		)	(67,871		)
Other	—			—		(881		)	(881		)
Net cash flows from investing activities	—			—		2,442			2,442
Cash flows from financing activities:
Payments on terms loans	(15,938		)	—		—			(15,938		)
Payments on long-term borrowings and obligations	(176,983		)	—		—			(176,983		)
Decrease in cash overdraft balance	(10,036		)	—		(9,750		)	(19,786		)
Payments for Omnicare common stock repurchase	(160,438		)	—		—			(160,438		)
Dividends paid	(58,419		)	—		—			(58,419		)
Other	463,555			—		(458,908		)	4,647
Net cash flows from (used in) financing activities	41,741			—		(468,658		)	(426,917		)
Net increase (decrease) in cash and cash equivalents	(27,124		)	—		(41,934		)	(69,058		)
Less increase in cash and cash equivalents of discontinued operations	—			—		—			—
Increase (decrease) in cash and cash equivalents of continuing operations	(27,124		)	—		(41,934		)	(69,058		)
Cash and cash equivalents at beginning of period	275,910			—		80,091			356,001
Cash and cash equivalents at end of period	$	248,786		$	—	$	38,157		$	286,943
2013:
Cash flows from operating activities:
Net cash flows (used in) from operating activities	$	(42,519	)	$	—	$	497,184		$	454,665
Cash flows from investing activities:
Acquisition of businesses, net of cash received	—			—		(3,798		)	(3,798		)
Divestiture of business, net	—			—		11,083			11,083
Capital expenditures	—			—		(73,279		)	(73,279		)
Other	(227		)	—		(180		)	(407		)
Net cash flows used in investing activities	(227		)	—		(66,174		)	(66,401		)
Cash flows from financing activities:
Payments on term loans	(15,938		)	—		—			(15,938		)
Payments on long-term borrowings and obligations	(190,403		)	—		—			(190,403		)
Fees paid for financing activities	(4,851		)	—		—			(4,851		)
Decrease in cash overdraft balance	(10,232		)	—		(1,258		)	(11,490		)
Payments for Omnicare common stock repurchases	(91,259		)	—		—			(91,259		)
Dividends paid	(43,011		)	—		—			(43,011		)
Other	442,769			—		(422,607		)	20,162
Net cash flows from (used in) financing activities	87,075			—		(423,865		)	(336,790		)
Net increase in cash and cash equivalents	44,329			—		7,145			51,474
Less decrease in cash and cash equivalents of discontinued operations	—			—		(2,169		)	(2,169		)
Increase (decrease) in cash and cash equivalents of continuing operations	44,329			—		9,314			53,643
Cash and cash equivalents at beginning of period	383,674			—		60,946			444,620
Cash and cash equivalents at end of period	$	428,003		$	—	$	70,260		$	498,263