Guarantor and Non-Guarantor Financial Statements (Tables)

9 Months Ended

Feb. 28, 2014

CONDENSED CONSOLIDATING BALANCE SHEETS



	February 28, 2014
(in millions)	Biomet, Inc.		Guarantors		Non-Guarantors		Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	—	$	30.6	$	181.8	$	—		$	212.4
Accounts receivable, net	—		298.9		284.0		—			582.9
Inventories, net	—		356.5		327.9		—			684.4
Deferred income taxes	—		114.5		37.1		—			151.6
Prepaid expenses and other	—		63.6		71.4		—			135.0
Total current assets	—		864.1		902.2		—			1,766.3
Property, plant and equipment, net	—		382.1		308.8		—			690.9
Investments	—		11.8		15.2		—			27.0
Investment in subsidiaries	7,865.8		—		—		(7,865.8		)	—
Intangible assets, net	—		2,754.6		704.2		—			3,458.8
Goodwill	—		3,178.1		478.7		—			3,656.8
Other assets	—		85.6		11.4		—			97.0
Total assets	$	7,865.8	$	7,276.3	$	2,420.5	$	(7,865.8	)	$	9,696.8
Liabilities & Shareholder’s Equity
Current liabilities:
Current portion of long-term debt	$	31.0	$	—	$	2.2	$	—		$	33.2
Accounts payable	—		60.3		44.8		—			105.1
Accrued interest	35.4		—		—		—			35.4
Accrued wages and commissions	—		82.7		67.2		—			149.9
Other accrued expenses	—		244.3		76.5		—			320.8
Total current liabilities	66.4		387.3		190.7		—			644.4
Long-term debt	5,798.5		—		—		—			5,798.5
Deferred income taxes	—		819.6		238.8		—			1,058.4
Other long-term liabilities	—		124.3		70.3		—			194.6
Total liabilities	5,864.9		1,331.2		499.8		—			7,695.9
Shareholder’s equity	2,000.9		5,945.1		1,920.7		(7,865.8		)	2,000.9
Total liabilities and shareholder’s equity	$	7,865.8	$	7,276.3	$	2,420.5	$	(7,865.8	)	$	9,696.8



	May 31, 2013
(in millions)	Biomet, Inc.		Guarantors		Non-Guarantors		Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	—	$	35.3	$	320.3	$	—		$	355.6
Accounts receivable, net	—		254.1		277.7		—			531.8
Inventories	—		286.9		337.1		—			624.0
Deferred income taxes	—		78.3		41.6		—			119.9
Prepaid expenses and other	—		73.7		67.6		—			141.3
Total current assets	—		728.3		1,044.3		—			1,772.6
Property, plant and equipment, net	—		350.1		315.1		—			665.2
Investments	—		10.9		12.1		—			23.0
Investment in subsidiaries	7,982.8		—		—		(7,982.8		)	—
Intangible assets, net	—		2,890.4		739.8		—			3,630.2
Goodwill	—		3,104.0		496.9		—			3,600.9
Other assets	—		88.9		13.9		—			102.8
Total assets	$	7,982.8	$	7,172.6	$	2,622.1	$	(7,982.8	)	$	9,794.7
Liabilities & Shareholder’s Equity
Current liabilities:
Current portion of long-term debt	$	33.3	$	—	$	7.0	$	—		$	40.3
Accounts payable	—		63.8		47.7		—			111.5
Accrued interest	56.1		—		0.1		—			56.2
Accrued wages and commissions	—		82.1		68.0		—			150.1
Other accrued expenses	—		141.7		64.3		—			206.0
Total current liabilities	89.4		287.6		187.1		—			564.1
Long-term debt	5,924.8		—		1.3		—			5,926.1
Deferred income taxes	—		942.0		187.8		—			1,129.8
Other long-term liabilities	—		142.9		63.2		—			206.1
Total liabilities	6,014.2		1,372.5		439.4		—			7,826.1
Shareholder’s equity	1,968.6		5,800.1		2,182.7		(7,982.8		)	1,968.6
Total liabilities and shareholder’s equity	$	7,982.8	$	7,172.6	$	2,622.1	$	(7,982.8	)	$	9,794.7

Condensed Consolidating Statements of Operations and Comprehensive Income (Loss)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)



	Three Months Ended February 28, 2014
(in millions)	Biomet, Inc.			Guarantors			Non-Guarantors			Eliminations		Total
Net sales	$	—		$	527.6		$	294.9		$	—	$	822.5
Cost of sales	—			272.4			54.5			—		326.9
Gross profit	—			255.2			240.4			—		495.6
Selling, general and administrative expense	—			238.3			128.1			—		366.4
Research and development expense	—			31.3			11.2			—		42.5
Amortization	—			73.0			13.5			—		86.5
Operating income	—			(87.4		)	87.6			—		0.2
Other (income) expense, net	78.5			(0.6		)	2.7			—		80.6
Income (loss) before income taxes	(78.5		)	(86.8		)	84.9			—		(80.4		)
Tax expense (benefit)	(29.8		)	(33.1		)	48.4			—		(14.5		)
Equity in earnings of subsidiaries	(17.2		)	—			—			17.2		—
Net income (loss)	$	(65.9	)	$	(53.7	)	$	36.5		$	17.2	$	(65.9	)
Other comprehensive income (loss)	$	3.4		$	—		$	(10.7	)	$	—	$	(7.3	)
Total comprehensive income (loss)	$	(62.5	)	$	(53.7	)	$	25.8		$	17.2	$	(73.2	)


	Three Months Ended February 28, 2013
(in millions)	Biomet, Inc.			Guarantors			Non-Guarantors			Eliminations		Total
Net sales	$	—		$	487.3		$	284.2		$	—	$	771.5
Cost of sales	—			191.0			47.5			—		238.5
Gross profit	—			296.3			236.7			—		533.0
Selling, general and administrative expense	—			205.2			122.0			—		327.2
Research and development expense	—			25.5			9.5			—		35.0
Amortization	—			66.0			8.1			—		74.1
Goodwill impairment charge	—			167.9			65.1			—		233.0
Intangible assets impairment charge	—			101.1			—			—		101.1
Operating income (loss)	—			(269.4		)	32.0			—		(237.4		)
Other (income) expense, net	90.7			4.3			4.7			—		99.7
Income (loss) before income taxes	(90.7		)	(273.7		)	27.3			—		(337.1		)
Tax expense (benefit)	(34.5		)	(127.3		)	129.2			—		(32.6		)
Equity in earnings of subsidiaries	(248.3		)	—			—			248.3		—
Net income (loss)	$	(304.5	)	$	(146.4	)	$	(101.9	)	$	248.3	$	(304.5	)
Other comprehensive income (loss)	$	6.6		$	—		$	(62.1	)	$	—	$	(55.5	)
Total comprehensive income (loss)	$	(297.9	)	$	(146.4	)	$	(164.0	)	$	248.3	$	(360.0	)



	Nine Months Ended February 28, 2014
(in millions)	Biomet, Inc.			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	—		$	1,519.6		$	859.3		$	—		$	2,378.9
Cost of sales	—			671.4			118.6			—			790.0
Gross profit	—			848.2			740.7			—			1,588.9
Selling, general and administrative expense	—			645.0			375.1			—			1,020.1
Research and development expense	—			89.5			31.9			—			121.4
Amortization	—			196.1			41.1			—			237.2
Operating income (loss)	—			(82.4		)	292.6			—			210.2
Other (income) expense, net	276.4			(4.1		)	7.5			—			279.8
Income (loss) before income taxes	(276.4		)	(78.3		)	285.1			—			(69.6		)
Tax expense (benefit)	(105.0		)	(29.8		)	95.1			—			(39.7		)
Equity in earnings of subsidiaries	141.5			—			—			(141.5		)	—
Net income (loss)	$	(29.9	)	$	(48.5	)	$	190.0		$	(141.5	)	$	(29.9	)
Other comprehensive income (loss)	$	25.7		$	—		$	22.3		$	—		$	48.0
Total comprehensive income (loss)	$	(4.2	)	$	(48.5	)	$	212.3		$	(141.5	)	$	18.1


	Nine Months Ended February 28, 2013
(in millions)	Biomet, Inc.			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	—		$	1,438.6		$	830.4		$	—		$	2,269.0
Cost of sales	—			509.1			137.6			—			646.7
Gross profit	—			929.5			692.8			—			1,622.3
Selling, general and administrative expense	—			610.2			365.8			—			976.0
Research and development expense	—			80.0			27.2			—			107.2
Amortization	—			198.6			31.6			—			230.2
Goodwill impairment charge	—			167.9			65.1			—			233.0
Intangible assets impairment charge	—			101.1			—			—			101.1
Operating income (loss)	—			(228.3		)	203.1			—			(25.2		)
Other (income) expense, net	479.0			5.1			(0.9		)	—			483.2
Income (loss) before income taxes	(479.0		)	(233.4		)	204.0			—			(508.4		)
Tax expense (benefit)	(182.0		)	(112.1		)	187.9			—			(106.2		)
Equity in earnings of subsidiaries	(105.2		)	—			—			105.2			—
Net income (loss)	$	(402.2	)	$	(121.3	)	$	16.1		$	105.2		$	(402.2	)
Other comprehensive income (loss)	$	5.9		$	—		$	(52.6	)	$	—		$	(46.7	)
Total comprehensive income (loss)	$	(396.3	)	$	(121.3	)	$	(36.5	)	$	105.2		$	(448.9	)

Condensed Consolidating Statements of Cash Flows

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW



	Nine Months Ended February 28, 2014
(in millions)	Biomet, Inc.			Guarantor			Non-Guarantors			Eliminations		Total
Cash flows provided by (used in) operating activities	$	159.2		$	236.6		$	(70.2	)	$	—	$	325.6
Capital expenditures	—			(91.7		)	(67.1		)	—		(158.8		)
Acquisitions, net of cash acquired - 2013 Spine Acquisition	—			(148.8		)	—			—		(148.8		)
Other	—			(1.4		)	0.1			—		(1.3		)
Cash flows provided by (used in) investing activities	—			(241.9		)	(67.0		)	—		(308.9		)
Proceeds under revolvers	155.0			—			4.3			—		159.3
Payments under revolver	(55.0		)	—			(8.0		)	—		(63.0		)
Proceeds from senior notes due 2020 and term loans	870.5			—			—			—		870.5
Tender/retirement of senior notes due 2017 and term loans	(1,091.6		)	—			—			—		(1,091.6		)
Other	(38.1		)	0.6			(2.3		)	—		(39.8		)
Cash flows used in financing activities	(159.2		)	0.6			(6.0		)	—		(164.6		)
Effect of exchange rate changes on cash	—			—			4.7			—		4.7
Increase (decrease) in cash and cash equivalents	—			(4.7		)	(138.5		)	—		(143.2		)
Cash and cash equivalents, beginning of period	—			35.3			320.3			—		355.6
Cash and cash equivalents, end of period	$	—		$	30.6		$	181.8		$	—	$	212.4

	Nine Months Ended February 28, 2013
(in millions)	Biomet, Inc.			Guarantor			Non-Guarantors			Eliminations		Total
Cash flows provided by (used in) operating activities	$	121.8		$	198.0		$	(46.0	)	$	—	$	273.8
Capital expenditures	—			(69.4		)	(80.3		)	—		(149.7		)
Acquisitions, net of cash acquired - 2012 Trauma Acquisition	—			(277.5		)	(2.5		)	—		(280.0		)
Other	—			(2.0		)	(2.1		)	—		(4.1		)
Cash flows provided by (used in) investing activities	—			(348.9		)	(84.9		)	—		(433.8		)
Proceeds under revolvers	80.0			—			—			—		80.0
Payments under revolver	(80.0		)	—			—			—		(80.0		)
Proceeds from senior notes due 2020 and term loans	3,396.2			—			—			—		3,396.2
Tender/retirement of senior notes due 2017 and term loans	(3,423.0		)	—			—			—		(3,423.0		)
Payment of fees related to refinancing activities	(77.8		)	—			—			—		(77.8		)
Other	(17.2		)	(0.1		)	(9.0		)	—		(26.3		)
Cash flows used in financing activities	(121.8		)	(0.1		)	(9.0		)	—		(130.9		)
Effect of exchange rate changes on cash	—			—			15.9			—		15.9
Decrease in cash and cash equivalents	—			(151.0		)	(124.0		)	—		(275.0		)
Cash and cash equivalents, beginning of period	—			190.1			302.3			—		492.4
Cash and cash equivalents, end of period	$	—		$	39.1		$	178.3		$	—	$	217.4