Condensed Consolidating Financial Information

The following tables present condensed consolidating financial information for: Owens & Minor, Inc. (O&M); the guarantors of Owens & Minor, Inc.’s 2021 Notes and 2024 Notes, on a combined basis; and the non-guarantor subsidiaries of the 2021 Notes and 2024 Notes, on a combined basis. The guarantor subsidiaries are 100% owned by Owens & Minor, Inc. Separate financial statements of the guarantor subsidiaries are not presented because the guarantees by our guarantor subsidiaries are full and unconditional, as well as joint and several, and we believe the condensed consolidating financial information is more meaningful in understanding the financial position, results of operations and cash flows of the guarantor subsidiaries.



Three Months Ended March 31, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	2,193,285		$	186,854		$	(51,566	)	$	2,328,573
Cost of goods sold	—			1,990,186			108,185			(50,978		)	2,047,393
Gross margin	—			203,099			78,669			(588		)	281,180
Distribution, selling and administrative expenses	156			161,235			76,302			—			237,693
Acquisition-related and exit and realignment charges	—			7,799			1,143			—			8,942
Other operating income, net	—			(374		)	(598		)	—			(972		)
Operating earnings (loss)	(156		)	34,439			1,822			(588		)	35,517
Interest expense (income), net	6,848			(790		)	686			—			6,744
Income (loss) before income taxes	(7,004		)	35,229			1,136			(588		)	28,773
Income tax (benefit) provision	—			8,013			1,975			—			9,988
Equity in earnings of subsidiaries	25,789			—			—			(25,789		)	—
Net income (loss)	18,785			27,216			(839		)	(26,377		)	18,785
Other comprehensive income (loss)	5,838			346			5,492			(5,838		)	5,838
Comprehensive income (loss)	$	24,623		$	27,562		$	4,653		$	(32,215	)	$	24,623



Three Months Ended March 31, 2016	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	2,321,708		$	172,101		$	(38,016	)	$	2,455,793
Cost of goods sold	—			2,105,264			92,075			(38,182		)	2,159,157
Gross margin	—			216,444			80,026			166			296,636
Distribution, selling and administrative expenses	534			169,310			72,881			—			242,725
Acquisition-related and exit and realignment charges	—			8,402			2,081			—			10,483
Other operating income, net	—			(1,384		)	(158		)	—			(1,542		)
Operating earnings (loss)	(534		)	40,116			5,222			166			44,970
Interest expense (income), net	6,840			(629		)	579			—			6,790
Income (loss) before income taxes	(7,374		)	40,745			4,643			166			38,180
Income tax (benefit) provision	—			11,547			2,498			—			14,045
Equity in earnings of subsidiaries	31,509			—			—			(31,509		)	—
Net income (loss)	24,135			29,198			2,145			(31,343		)	24,135
Other comprehensive income (loss)	8,419			257			8,162			(8,419		)	8,419
Comprehensive income (loss)	$	32,554		$	29,455		$	10,307		$	(39,762	)	$	32,554



March 31, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
March 31, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	63,170		$	15,885		$	48,112		$	—		$	127,167
Accounts receivable, net	—			524,418			89,020			(8,189		)	605,249
Merchandise inventories	—			884,995			66,800			(2,449		)	949,346
Other current assets	17			93,060			168,155			—			261,232
Total current assets	63,187			1,518,358			372,087			(10,638		)	1,942,994
Property and equipment, net	—			102,030			93,282			—			195,312
Goodwill, net	—			180,006			236,691			—			416,697
Intangible assets, net	—			11,137			69,599			—			80,736
Due from O&M and subsidiaries	—			626,667			—			(626,667		)	—
Advances to and investment in consolidated subsidiaries	2,063,747			—			—			(2,063,747		)	—
Other assets, net	—			44,042			20,768			—			64,810
Total assets	$	2,126,934		$	2,482,240		$	792,427		$	(2,701,052	)	$	2,700,549
Liabilities and equity
Current liabilities
Accounts payable	$	37		$	693,256		$	60,127		$	(8,255	)	$	745,165
Accrued payroll and related liabilities	—			18,761			9,864			—			28,625
Other accrued liabilities	7,181			110,398			116,326			—			233,905
Total current liabilities	7,218			822,415			186,317			(8,255		)	1,007,695
Long-term debt, excluding current portion	545,053			2,865			16,227			—			564,145
Due to O&M and subsidiaries	604,706			—			71,673			(676,379		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			69,678			20,437			—			90,115
Other liabilities	—			60,911			7,726			—			68,637
Total liabilities	1,156,977			1,094,759			302,380			(823,524		)	1,730,592
Equity
Common stock	122,403			—			—			—			122,403
Paid-in capital	220,608			174,614			583,872			(758,486		)	220,608
Retained earnings (deficit)	688,591			1,223,558			(42,871		)	(1,180,687		)	688,591
Accumulated other comprehensive income (loss)	(61,645		)	(10,691		)	(50,954		)	61,645			(61,645		)
Total equity	969,957			1,387,481			490,047			(1,877,528		)	969,957
Total liabilities and equity	$	2,126,934		$	2,482,240		$	792,427		$	(2,701,052	)	$	2,700,549



December 31, 2016	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	38,015		$	61,266		$	86,207		$	—		$	185,488
Accounts receivable, net	—			526,170			90,016			(10,102		)	606,084
Merchandise inventories	—			856,566			61,505			(1,760		)	916,311
Other current assets	106			86,907			167,143			—			254,156
Total current assets	38,121			1,530,909			404,871			(11,862		)	1,962,039
Property and equipment, net	—			97,725			93,993			—			191,718
Goodwill, net	—			180,006			234,930			—			414,936
Intangible assets, net	—			11,655			70,856			—			82,511
Due from O&M and subsidiaries	—			573,395			—			(573,395		)	—
Advances to and investments in consolidated subsidiaries	2,044,963			—			—			(2,044,963		)	—
Other assets, net	—			49,887			16,661			—			66,548
Total assets	$	2,083,084		$	2,443,577		$	821,311		$	(2,630,220	)	$	2,717,752
Liabilities and equity
Current liabilities
Accounts payable	$	—		$	683,189		$	75,512		$	(7,951	)	$	750,750
Accrued payroll and related liabilities	—			32,814			12,237			—			45,051
Other current liabilities	7,106			93,327			138,404			—			238,837
Total current liabilities	7,106			809,330			226,153			(7,951		)	1,034,638
Long-term debt, excluding current portion	544,838			3,219			16,526			—			564,583
Due to O&M and subsidiaries	571,102			—			48,044			(619,146		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			70,280			20,103			—			90,383
Other liabilities	—			60,578			7,532			—			68,110
Total liabilities	1,123,046			1,082,297			318,358			(765,987		)	1,757,714
Equity													—
Common stock	122,062			—			—			—			122,062
Paid-in capital	219,955			174,614			583,872			(758,486		)	219,955
Retained earnings (deficit)	685,504			1,196,341			(42,032		)	(1,154,309		)	685,504
Accumulated other comprehensive income (loss)	(67,483		)	(9,675		)	(38,887		)	48,562			(67,483		)
Total equity	960,038			1,361,280			502,953			(1,864,233		)	960,038
Total liabilities and equity	$	2,083,084		$	2,443,577		$	821,311		$	(2,630,220	)	$	2,717,752



Three Months Ended March 31, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated

Statements of Cash Flows
Operating activities:
Net income (loss)	$	18,785		$	27,216		$	(839	)	$	(26,377	)	$	18,785
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	(25,789		)	—			—			25,789			—
Depreciation and amortization	—			6,876			5,682			—			12,558
Share-based compensation expense	—			2,511			—			—			2,511
Provision for losses on accounts receivable	—			(707		)	104			—			(603		)
Deferred income tax expense (benefit)	—			(825		)	—			—			(825		)
Changes in operating assets and liabilities:
Accounts receivable	—			2,459			(131		)	(774		)	1,554
Merchandise inventories	—			(3,311		)	(30,154		)	688			(32,777		)
Accounts payable	37			(15,051		)	6,999			674			(7,341		)
Net change in other assets and liabilities	164			(3,434		)	(21,695		)	—			(24,965		)
Other, net	214			4,549			(20		)	—			4,743
Cash provided by (used for) operating activities	(6,589		)	20,283			(40,054		)	—			(26,360		)
Investing activities:
Additions to property and equipment	—			(8,141		)	(2,005		)	—			(10,146		)
Additions to computer software and intangible assets	—			(677		)	(3,945		)	—			(4,622		)
Proceeds from the sale of property and equipment	—			45			270			—			315
Cash provided by (used for) investing activities	—			(8,773		)	(5,680		)	—			(14,453		)
Financing activities:
Change in intercompany advances	49,025			(56,375		)	7,350			—			—
Cash dividends paid	(15,740		)	—			—			—			(15,740		)
Other, net	(1,541		)	(516		)	(702		)	—			(2,759		)
Cash provided by (used for) financing activities	31,744			(56,891		)	6,648			—			(18,499		)
Effect of exchange rate changes on cash and cash equivalents	—			—			991			—			991
Net increase (decrease) in cash and cash equivalents	25,155			(45,381		)	(38,095		)	—			(58,321		)
Cash and cash equivalents at beginning of period	38,015			61,266			86,207			—			185,488
Cash and cash equivalents at end of period	$	63,170		$	15,885		$	48,112		$	—		$	127,167



Three Months Ended March 31, 2016	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated

Statements of Cash Flows
Operating activities:
Net income (loss)	$	24,135		$	29,198		$	2,145		$	(31,343	)	$	24,135
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	(31,509		)	—			—			31,509			—
Depreciation and amortization	—			7,569			6,649			—			14,218
Share-based compensation expense	—			2,603			—			—			2,603
Provision for losses on accounts receivable	—			128			(13		)	—			115
Deferred income tax expense (benefit)	—			3,922			2,985			—			6,907
Changes in operating assets and liabilities:
Accounts receivable	—			(23,002		)	(4,569		)	756			(26,815		)
Merchandise inventories	—			10,856			4,490			(168		)	15,178
Accounts payable	—			44,449			3,056			(754		)	46,751
Net change in other assets and liabilities	661			(15,780		)	(22,981		)	—			(38,100		)
Other, net	464			123			(434		)	—			153
Cash provided by (used for) operating activities	(6,249		)	60,066			(8,672		)	—			45,145
Investing activities:
Additions to property and equipment	—			(3,928		)	(1,355		)	—			(5,283		)
Additions to computer software and intangible assets	—			(615		)	(1,162		)	—			(1,777		)
Proceeds from the sale of property and equipment	—			3			4,596			—			4,599
Cash provided by (used for) investing activities	—			(4,540		)	2,079			—			(2,461		)
Financing activities:
Change in bank overdraft	—			—			8,359			—			8,359
Change in intercompany advances	58,435			(51,009		)	(7,426		)	—			—
Cash dividends paid	(16,029		)	—			—			—			(16,029		)
Repurchases of common stock	(5,630		)	—			—			—			(5,630		)
Other, net	(1,632		)	(617		)	(767		)	—			(3,016		)
Cash provided by (used for) financing activities	35,144			(51,626		)	166			—			(16,316		)
Effect of exchange rate changes on cash and cash equivalents	—			—			2,935			—			2,935
Net increase (decrease) in cash and cash equivalents	28,895			3,900			(3,492		)	—			29,303
Cash and cash equivalents at beginning of period	103,284			5,614			52,122			—			161,020
Cash and cash equivalents at end of period	$	132,179		$	9,514		$	48,630		$	—		$	190,323