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 June 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	2,279,725		$	178,844		$	(36,402	)	$	2,422,167
Cost of goods sold	—			2,064,515			95,570			(36,255		)	2,123,830
Gross margin	—			215,210			83,274			(147		)	298,337
Selling, general and administrative expenses	626			160,348			70,524			—			231,498
Acquisition-related and exit and realignment charges	—			256			5,451			—			5,707
Depreciation and amortization	—			8,910			6,550			—			15,460
Other operating income, net	—			(1,354		)	(834		)	—			(2,188		)
Operating earnings (loss)	(626		)	47,050			1,583			(147		)	47,860
Interest expense (income), net	6,938			(233		)	(25		)	—			6,680
Income (loss) before income taxes	(7,564		)	47,283			1,608			(147		)	41,180
Income tax (benefit) provision	—			16,973			(19		)	—			16,954
Equity in earnings of subsidiaries	31,790			—			—			(31,790		)	—
Net income (loss)	24,226			30,310			1,627			(31,937		)	24,226
Other comprehensive income (loss)	6,858			(21,839		)	28,696			(6,857		)	6,858
Comprehensive income (loss)	$	31,084		$	8,471		$	30,323		$	(38,794	)	$	31,084



Three Months Ended June 30, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	2,187,130		$	137,683		$	(18,955	)	$	2,305,858
Cost of goods sold	—			1,978,815			63,299			(18,528		)	2,023,586
Gross margin	—			208,315			74,384			(427		)	282,272
Selling, general and administrative expenses	61			152,122			73,655			—			225,838
Acquisition-related and exit and realignment charges	—			3,886			3,707			—			7,593
Depreciation and amortization	2			8,790			5,100			—			13,892
Other operating income, net	—			(814		)	(1,338		)	—			(2,152		)
Operating earnings (loss)	(63		)	44,331			(6,740		)	(427		)	37,101
Interest expense (income), net	2,924			791			(373		)	—			3,342
Income (loss) before income taxes	(2,987		)	43,540			(6,367		)	(427		)	33,759
Income tax (benefit) provision	(1,200		)	17,808			(2,725		)	—			13,883
Equity in earnings of subsidiaries	21,663			—			—			(21,663		)	—
Net income (loss)	19,876			25,732			(3,642		)	(22,090		)	19,876
Other comprehensive income (loss)	(443		)	111			(570		)	459			(443		)
Comprehensive income (loss)	$	19,433		$	25,843		$	(4,212	)	$	(21,631	)	$	19,433



Six Months Ended June 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	4,529,430		$	360,204		$	(76,271	)	$	4,813,363
Cost of goods sold	—			4,098,327			195,608			(76,510		)	4,217,425
Gross margin	—			431,103			164,596			239			595,938
Selling, general and administrative expenses	665			320,925			143,733			—			465,323
Acquisition-related and exit and realignment charges	—			3,833			11,790			—			15,623
Depreciation and amortization	—			18,014			13,315			—			31,329
Other operating income, net	—			(2,331		)	(2,841		)	—			(5,172		)
Operating earnings (loss)	(665		)	90,662			(1,401		)	239			88,835
Interest expense (income), net	12,885			581			94			—			13,560
Income (loss) before income taxes	(13,550		)	90,081			(1,495		)	239			75,275
Income tax (benefit) provision	(773		)	31,759			1,123			—			32,109
Equity in earnings of subsidiaries	55,943			—			—			(55,943		)	—
Net income (loss)	43,166			58,322			(2,618		)	(55,704		)	43,166
Other comprehensive income (loss)	(20,787		)	(21,335		)	548			20,787			(20,787		)
Comprehensive income (loss)	$	22,379		$	36,987		$	(2,070	)	$	(34,917	)	$	22,379



Six Months Ended June 30, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	4,335,495		$	257,558		$	(30,814	)	$	4,562,239
Cost of goods sold	—			3,918,280			110,897			(30,406		)	3,998,771
Gross margin	—			417,215			146,661			(408		)	563,468
Selling, general and administrative expenses	14			306,372			145,062			—			451,448
Acquisition-related and exit and realignment charges	—			5,180			5,675			—			10,855
Depreciation and amortization	1			17,741			10,014			—			27,756
Other operating income, net	—			(7,877		)	(2,101		)	—			(9,978		)
Operating earnings (loss)	(15		)	95,799			(11,989		)	(408		)	83,387
Interest expense (income), net	5,399			2,034			(844		)	—			6,589
Income (loss) before income taxes	(5,414		)	93,765			(11,145		)	(408		)	76,798
Income tax (benefit) provision	(2,155		)	37,994			(4,403		)	—			31,436
Equity in earnings of subsidiaries	48,621			—			—			(48,621		)	—
Net income (loss)	45,362			55,771			(6,742		)	(49,029		)	45,362
Other comprehensive income (loss)	122			218			(103		)	(115		)	122
Comprehensive income (loss)	$	45,484		$	55,989		$	(6,845	)	$	(49,144	)	$	45,484



June 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	105,427		$	46,639		$	48,903		$	—		$	200,969
Accounts and notes receivable, net	—			485,256			105,346			(9,863		)	580,739
Merchandise inventories	—			852,396			55,272			(4,167		)	903,501
Other current assets	299			94,214			179,717			1,251			275,481
Total current assets	105,726			1,478,505			389,238			(12,779		)	1,960,690
Property and equipment, net	—			108,373			110,999			—			219,372
Goodwill, net	—			247,271			174,489			—			421,760
Intangible assets, net	—			14,768			86,136			—			100,904
Due from O&M and subsidiaries	—			513,448			—			(513,448		)	—
Advances to and investment in consolidated subsidiaries	1,897,461			—			—			(1,897,461		)	—
Other assets, net	4,347			62,413			25,420			—			92,180
Total assets	$	2,007,534		$	2,424,778		$	786,282		$	(2,423,688	)	$	2,794,906
Liabilities and equity
Current liabilities
Accounts payable	$	—		$	713,907		$	48,470		$	(8,882	)	$	753,495
Accrued payroll and related liabilities	—			23,485			11,312			—			34,797
Deferred income taxes	—			43,160			(1,782		)	—			41,378
Other accrued liabilities	7,004			99,024			182,404			—			288,432
Total current liabilities	7,004			879,576			240,404			(8,882		)	1,118,102
Long-term debt, excluding current portion	547,905			5,395			21,323			—			574,623
Due to O&M and subsidiaries	475,498			—			77,464			(552,962		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			32,974			29,308			—			62,282
Other liabilities	—			55,155			7,617			—			62,772
Total liabilities	1,030,407			1,111,990			376,116			(700,734		)	1,817,779
Equity
Common stock	126,036			—			—			—			126,036
Paid-in capital	205,727			241,877			514,314			(756,191		)	205,727
Retained earnings (deficit)	690,152			1,080,701			(69,099		)	(1,011,602		)	690,152
Accumulated other comprehensive income (loss)	(44,788		)	(9,790		)	(35,049		)	44,839			(44,788		)
Total equity	977,127			1,312,788			410,166			(1,722,954		)	977,127
Total liabilities and equity	$	2,007,534		$	2,424,778		$	786,282		$	(2,423,688	)	$	2,794,906



December 31, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	22,013		$	3,912		$	30,847		$	—		$	56,772
Accounts and notes receivable, net	—			519,951			144,463			(38,222		)	626,192
Merchandise inventories	—			816,915			60,061			(4,519		)	872,457
Other current assets	(24,748		)	90,733			224,220			25,080			315,285
Total current assets	(2,735		)	1,431,511			459,591			(17,661		)	1,870,706
Property and equipment, net	—			110,076			122,903			—			232,979
Goodwill, net	—			247,271			176,005			—			423,276
Intangible assets, net	—			15,805			92,788			—			108,593
Due from O&M and subsidiaries	—			357,304			—			(357,304		)	—
Advances to and investments in consolidated subsidiaries	1,893,767			—			—			(1,893,767		)	—
Other assets, net	4,637			66,836			28,379			—			99,852
Total assets	$	1,895,669		$	2,228,803		$	879,666		$	(2,268,732	)	$	2,735,406
Liabilities and equity
Current liabilities
Accounts payable	$	—		$	567,285		$	54,898		$	(13,337	)	$	608,846
Accrued payroll and related liabilities	—			16,434			15,073			—			31,507
Deferred income taxes	—			39,667			(1,688		)	—			37,979
Other current liabilities	6,441			83,698			236,084			—			326,223
Total current liabilities	6,441			707,084			304,367			(13,337		)	1,004,555
Long-term debt, excluding current portion	547,763			39,915			20,873			—			608,551
Due to O&M and subsidiaries	350,627			—			77,788			(428,415		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			33,162			30,739			—			63,901
Other liabilities	—			55,794			11,767			—			67,561
Total liabilities	904,831			974,845			445,534			(580,642		)	1,744,568
Equity													—
Common stock	126,140			—			—			—			126,140
Paid-in capital	202,934			241,877			514,314			(756,191		)	202,934
Retained earnings (deficit)	685,765			1,022,379			(66,479		)	(955,900		)	685,765
Accumulated other comprehensive income (loss)	(24,001		)	(10,298		)	(13,703		)	24,001			(24,001		)
Total equity	990,838			1,253,958			434,132			(1,688,090		)	990,838
Total liabilities and equity	$	1,895,669		$	2,228,803		$	879,666		$	(2,268,732	)	$	2,735,406



Six Months Ended June 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Cash Flows
Operating activities:
Net income (loss)	$	43,166		$	58,322		$	(2,618	)	$	(55,704	)	$	43,166
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	(55,943		)	—			—			55,943			—
Depreciation and amortization	—			17,741			18,397			—			36,138
Share-based compensation expense	—			5,048			—			—			5,048
Provision for losses on accounts and notes receivable	—			(36		)	77			—			41
Deferred income tax expense (benefit)	—			2,376			616			—			2,992
Changes in operating assets and liabilities:
Accounts and notes receivable	—			35,566			(180		)	6,236			41,622
Merchandise inventories	—			(35,481		)	1,193			2,422			(31,866		)
Accounts payable	—			146,622			5,798			(6,738		)	145,682
Net change in other assets and liabilities	(148		)	14,338			(9,260		)	(2,159		)	2,771
Other, net	429			726			41			—			1,196
Cash provided by (used for) operating activities	(12,496		)	245,222			14,064			—			246,790
Investing activities:
Additions to property and equipment	—			(9,292		)	(2,717		)	—			(12,009		)
Additions to computer software and intangible assets	—			(2,068		)	(8,748		)	—			(10,816		)
Proceeds from the sale of property and equipment	—			60			777			—			837
Cash used for investing activities	—			(11,300		)	(10,688		)	—			(21,988		)
Financing activities:
Change in intercompany advances	135,627			(155,951		)	20,324			—			—
Repayment of revolving credit facility	—			(33,700		)	—			—			(33,700		)
Change in bank overdraft	—			—			1,530			—			1,530
Cash dividends paid	(31,867		)	—			—			—			(31,867		)
Repurchases of common stock	(7,440		)	—			—			—			(7,440		)
Excess tax benefits related to share-based compensation	457			—			—			—			457
Other, net	(867		)	(1,544		)	(2,701		)	—			(5,112		)
Cash provided by (used for) financing activities	95,910			(191,195		)	19,153			—			(76,132		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(4,473		)	—			(4,473		)
Net increase (decrease) in cash and cash equivalents	83,414			42,727			18,056			—			144,197
Cash and cash equivalents at beginning of period	22,013			3,912			30,847			—			56,772
Cash and cash equivalents at end of period	$	105,427		$	46,639		$	48,903		$	—		$	200,969



Six months ended June 30, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Cash Flows
Operating activities:
Net income (loss)	$	45,362		$	55,771		$	(6,742	)	$	(49,029	)	$	45,362
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	(48,621		)	—			—			48,621			—
Depreciation and amortization	1			17,741			10,014			—			27,756
Share-based compensation expense	—			4,190			—			—			4,190
Provision for losses on accounts and notes receivable	—			146			188			—			334
Deferred income tax expense (benefit)	—			(4,117		)	(1,034		)	—			(5,151		)
Changes in operating assets and liabilities:
Accounts and notes receivable	—			28,286			428			(237		)	28,477
Merchandise inventories	—			(38,733		)	(10,248		)	406			(48,575		)
Accounts payable	—			54,860			(177		)	239			54,922
Net change in other assets and liabilities	(952		)	(15,272		)	(16,541		)	—			(32,765		)
Other, net	(776		)	(280		)	(22		)	—			(1,078		)
Cash provided by (used for) operating activities	(4,986		)	102,592			(24,134		)	—			73,472
Investing activities:
Proceeds from the sale of investment				1,937									1,937
Additions to property and equipment	—			(16,777		)	(8,880		)	—			(25,657		)
Additions to computer software and intangible assets	—			(12,256		)	(910		)	—			(13,166		)
Proceeds from the sale of property and equipment	—			35			10			—			45
Cash used for investing activities	—			(27,061		)	(9,780		)	—			(36,841		)
Financing activities:
Change in intercompany advances	28,847			(62,995		)	34,148			—			—
Cash dividends paid	(31,564		)	—			—			—			(31,564		)
Repurchases of common stock	(9,448		)	—			—			—			(9,448		)
Excess tax benefits related to share-based compensation	444			—			—			—			444
Proceeds from exercise of stock options	1,180			—			—			—			1,180
Purchase of noncontrolling interest	—			—			(1,500		)	—			(1,500		)
Other, net	(2,072		)	(1,450		)	(919		)	—			(4,441		)
Cash provided by (used for) financing activities	(12,613		)	(64,445		)	31,729			—			(45,329		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(1,180		)	—			(1,180		)
Net increase (decrease) in cash and cash equivalents	(17,599		)	11,086			(3,365		)	—			(9,878		)
Cash and cash equivalents at beginning of period	74,391			2,012			25,502			—			101,905
Cash and cash equivalents at end of period	$	56,792		$	13,098		$	22,137		$	—		$	92,027