Schedule 1-Condensed Financial Information of Registrant Orthofix International N.V.

12 Months Ended

Dec. 31, 2011

Schedule 1-Condensed Financial Information of Registrant Orthofix International N.V.

Schedule 1-Condensed Financial Information of Registrant Orthofix International N.V.

Schedule 1—Condensed Financial Information of Registrant Orthofix International N.V.

Condensed Balance Sheets (unaudited)

(US$ in thousands)	December 31, 2011		December 31, 2010
Assets
Current assets:
Cash and cash equivalents	$	19,433	$	2,882
Prepaid expenses and other current assets	487		489
Total current assets	19,920		3,371
Other long term assets	61		113
Investments in and amounts due from subsidiaries and affiliates	307,202		307,397
Total assets	$	327,183	$	310,881
Liabilities and shareholder’s equity
Current liabilities	$	3,900	$	1,879
Long-term liabilities	8,112		8,111
Shareholder’s equity:
Common stock	1,846		1,772
Additional paid in capital	214,310		195,402
Accumulated earnings	97,254		98,327
Accumulated other comprehensive income	1,761		5,390
	315,171		300,891
Total liabilities and shareholder’s equity	$	327,183	$	310,881

See accompanying notes to condensed financial statements.

Condensed Statements of Operations (unaudited)

(US$ in thousands)	Year Ended December 31, 2011			Year Ended December 31, 2010			Year Ended December 31, 2009
(Expenses) income:
General and administrative	$	(11,503	)	$	(13,146	)	$	(10,444	)
Equity in earnings of investments in subsidiaries and affiliates	11,111			59,620			36,592
Other, net	7			(390		)	301
Income (loss) before income taxes	(385		)	46,084			26,449
Income tax expense	(688		)	(1,876		)	(1,977		)
Net income (loss)	$	(1,073	)	$	44,208		$	24,472

See accompanying notes to condensed financial statements.

Condensed Statement of Cash Flows

(US$ in thousands)	Year Ended December 31, 2011			Year Ended December 31, 2010			Year Ended December 31, 2009
Net income (loss)	$	(1,073	)	$	44,208		$	24,472
Equity in earnings of investments in subsidiaries and affiliates	(11,111		)	(59,620		)	(36,592		)
Cash used in other operating activities	(1,779		)	7,497			3,574
Net cash used in operating activities	(13,963		)	(7,915		)	(8,546		)
Cash flows from investing activities:
Distributions and amounts received from subsidiaries	5,875			21,597			13,237
Capital expenditures	—			(5		)	(114		)
Net cash provided by investing activities	5,875			21,592			13,123
Cash flows from financing activities:
Net proceeds from issuance of common stock	20,113			7,854			70
Contributions to subsidiaries and affiliates	2,789			(21,274		)	(4,672		)
Repurchase of equity	—			—			(220		)
Tax benefit on exercise of stock options	1,737			2,222			25
Net cash provided by financing activities	24,639			(11,198		)	(4,797		)
Net increase (decrease) in cash and cash equivalents	16,551			2,479			(220		)
Cash and cash equivalents at the beginning of the year	2,882			403			623
Cash and cash equivalents at the end of the year	$	19,433		$	2,882		$	403

See accompanying notes to condensed financial statements.

Notes to Condensed Financial Statements (unaudited)

1.       Background and basis of presentation

These condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted net assets of Orthofix Holdings, Inc. and its subsidiaries exceed 25% of the consolidated net assets of Orthofix International N.V. and its subsidiaries (the “Company”). This information should be read in conjunction with the Company’s consolidated financial statements included elsewhere in this filing.

2.       Restricted net assets of subsidiaries

Certain of the Company’s subsidiaries have restrictions, with an effective date of August 30, 2010, on their ability to pay dividends or make intercompany loans and advances pursuant to their financing arrangements. The amount of restricted net assets the Company’s subsidiaries held at December 31, 2011 and 2010 was approximately $186.0 million and $178.5 million, respectively. Such restrictions are on net assets of Orthofix Holdings, Inc. and its subsidiaries.

3.       Commitments, contingencies and long-term obligations

For a discussion of the Company’s commitments, contingencies and long term obligations under its senior secured credit facility, see Note 8, Note 11 and Note 15 of the Company’s consolidated financial statements.

4.       Dividends from subsidiaries

Cash dividends received by Orthofix International N.V. from its consolidated subsidiaries accounted for by the equity method were $5.9 million, $21.6 million and $13.2 million for the years ended December 31, 2011, 2010 and 2009, respectively.