Guarantor Subsidiaries (Tables)

6 Months Ended

Jun. 30, 2014

Summary Consolidating Statements of Income (Guaranteed Senior Notes Payable)

Summary Consolidating

Statements of Comprehensive Income (Loss)

(in thousands)



	For the three months ended June 30,
2014:	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating / Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
Net sales	$	—		$	1,580,208		$	30,376		$	—		$	1,610,584
Cost of sales	—			1,238,120			18,234			—			1,256,354
Gross profit	—			342,088			12,142			—			354,230
Selling, general and administrative expenses	1,441			176,922			5,700			—			184,063
Provision for doubtful accounts	—			20,585			505			—			21,090
Settlement, litigation and other related charges	—			7,547			—			—			7,547
Other charges	—			11,284			—			—			11,284
Operating income (loss)	(1,441		)	125,750			5,937			—			130,246
Interest expense, net of investment income	(29,064		)	(916		)	—			—			(29,980		)
Income (loss) before income taxes	(30,505		)	124,834			5,937			—			100,266
Income tax (benefit) expense	(11,672		)	48,427			2,265			—			39,020
Income (loss) from continuing operations	(18,833		)	76,407			3,672			—			61,246
Loss from discontinued operations	—			(39,261		)	(14		)	—			(39,275		)
Equity of net income of subsidiaries	40,804			—			—			(40,804		)	—
Net income	$	21,971		$	37,146		$	3,658		$	(40,804	)	$	21,971
Comprehensive income	$	22,015		$	37,146		$	3,658		$	(40,804	)	$	22,015
2013:
Net sales	$	—		$	1,470,746		$	32,370		$	—		$	1,503,116
Cost of sales	—			1,125,054			18,547			—			1,143,601
Gross profit	—			345,692			13,823			—			359,515
Selling, general and administrative expenses	1,186			185,317			5,412			—			191,915
Provision for doubtful accounts	—			25,652			488			—			26,140
Settlement, litigation and other related charges	—			3,512			—			—			3,512
Other charges	—			31,268			—			—			31,268
Operating income (loss)	(1,186		)	99,943			7,923			—			106,680
Interest expense, net of investment income	(29,183		)	(253		)	(188		)	—			(29,624		)
Income (loss) before income taxes	(30,369		)	99,690			7,735			—			77,056
Income tax (benefit) expense	(11,659		)	38,444			2,969			—			29,754
Income (loss) from continuing operations	(18,710		)	61,246			4,766			—			47,302
Income (loss) from discontinued operations	—			4,925			(8		)	—			4,917
Equity of net income of subsidiaries	70,929			—			—			(70,929		)	—
Net income	$	52,219		$	66,171		$	4,758		$	(70,929	)	$	52,219
Comprehensive income	$	52,145		$	66,171		$	4,758		$	(70,929	)	$	52,145

Note 10 - Guarantor Subsidiaries (Continued)

Summary Consolidating

Statements of Comprehensive Income (Loss)

(in thousands)



	For the six months ended June 30,
2014:	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating / Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
Net sales	$	—		$	3,120,214		$	61,408		$	—		$	3,181,622
Cost of sales	—			2,432,519			36,419			—			2,468,938
Gross profit	—			687,695			24,989			—			712,684
Selling, general and administrative expenses	2,428			359,042			9,406			—			370,876
Provision for doubtful accounts	—			41,632			1,019			—			42,651
Settlement, litigation and other related charges	—			14,599			—			—			14,599
Other charges	—			21,560			—			—			21,560
Operating income (loss)	(2,428		)	250,862			14,564			—			262,998
Interest expense, net of investment income	(58,220		)	(1,201		)	—			—			(59,421		)
Income (loss) before income taxes	(60,648		)	249,661			14,564			—			203,577
Income tax (benefit) expense	(23,343		)	96,430			5,606			—			78,693
Income (loss) from continuing operations	(37,305		)	153,231			8,958			—			124,884
Loss from discontinued operations	—			(39,090		)	(49		)	—			(39,139		)
Equity of net income of subsidiaries	123,050			—			—			(123,050		)	—
Net income	$	85,745		$	114,141		$	8,909		$	(123,050	)	$	85,745
Comprehensive income	$	86,012		$	114,141		$	8,909		$	(123,050	)	$	86,012
2013:
Net sales	$	—		$	2,897,875		$	64,186		$	—		$	2,962,061
Cost of sales	—			2,216,216			36,626			—			2,252,842
Gross profit	—			681,659			27,560			—			709,219
Selling, general and administrative expenses	2,192			370,295			10,121			—			382,608
Provision for doubtful accounts	—			49,184			966			—			50,150
Settlement, litigation and other related charges	—			26,131			—			—			26,131
Other charges	—			35,274			—			—			35,274
Operating income (loss)	(2,192		)	200,775			16,473			—			215,056
Interest expense, net of investment income	(58,174		)	(546		)	(366		)	—			(59,086		)
Income (loss) before income taxes	(60,366		)	200,229			16,107			—			155,970
Income tax (benefit) expense	(23,205		)	77,368			6,191			—			60,354
Income (loss) from continuing operations	(37,161		)	122,861			9,916			—			95,616
Income (loss) from discontinued operations	—			10,989			(32		)	—			10,957
Equity of net income of subsidiaries	143,734			—			—			(143,734		)	—
Net income	$	106,573		$	133,850		$	9,884		$	(143,734	)	$	106,573
Comprehensive income	$	106,475		$	133,850		$	9,884		$	(143,734	)	$	106,475

Condensed Consolidating Balance Sheets (Guaranteed Senior Notes Payable)

Condensed Consolidating Balance Sheets

(in thousands)



As of June 30, 2014:	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating/Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
ASSETS
Cash and cash equivalents	$	287,925	$	14,533	$	12,268	$	—		$	314,726
Accounts receivable, net (including intercompany)	—		689,604		355,328		(351,719		)	693,213
Inventories	—		400,990		6,800		—			407,790
Deferred income tax benefits, net-current	—		108,237		—		(25		)	108,212
Other current assets	497		266,703		24,020		—			291,220
Current assets of discontinued operations	—		42,029		—		—			42,029
Total current assets	288,422		1,522,096		398,416		(351,744		)	1,857,190
Properties and equipment, net	—		320,119		5,134		—			325,253
Goodwill	—		4,031,878		28,805		—			4,060,683
Identifiable intangible assets, net	—		112,420		1,752		—			114,172
Other noncurrent assets	42,915		61,643		65		—			104,623
Noncurrent assets of discontinued operations	—		40,909		—		—			40,909
Investment in subsidiaries	4,884,240		—		—		(4,884,240		)	—
Total assets	$	5,215,577	$	6,089,065	$	434,172	$	(5,235,984	)	$	6,502,830
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities (including intercompany)	$	31,176	$	874,518	$	28,390	$	(351,719	)	$	582,365
Current portion of long-term debt	494,738		—		—		—			494,738
Current liabilities of discontinued operations	—		18,044		—		—			18,044
Long-term debt, notes and convertible debentures	1,407,435		10,184		—		—			1,417,619
Deferred income tax liabilities	371,905		648,665		2,152		(25		)	1,022,697
Other noncurrent liabilities	—		54,721		1,786		—			56,507
Noncurrent liabilities of discontinued operations	—		537		—		—			537
Convertible debt	310,299		—		—		—			310,299
Stockholders' equity	2,600,024		4,482,396		401,844		(4,884,240		)	2,600,024
Total liabilities and stockholders' equity	$	5,215,577	$	6,089,065	$	434,172	$	(5,235,984	)	$	6,502,830
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	—		49,128		867		—			49,995
Total current assets	277,899		1,693,788		356,463		(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	—		87,047		31		—			87,078
Investment in subsidiaries	5,131,280		—		—		(5,131,280		)	—
Total assets	$	5,451,004	$	6,293,318	$	392,226	$	(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	—		18,829		17		—			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	—		1,398		—		—			1,398
Convertible debt	331,101		—		—		—			331,101
Stockholders' equity	2,740,803		4,778,727		352,553		(5,131,280		)	2,740,803
Total liabilities and stockholders' equity	$	5,451,004	$	6,293,318	$	392,226	$	(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 six months ended June 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	$	(57,203	)	$	453,196		$	387		$	396,380
Cash flows from investing activities:
Divestiture of businesses, net	—			7,114			—			7,114
Capital expenditures	—			(47,473		)	(550		)	(48,023		)
Other	—			(690		)	—			(690		)
Net cash flows used in investing activities	—			(41,049		)	(550		)	(41,599		)
Cash flows from financing activities:
Payments on terms loans	(10,625		)	—			—			(10,625		)
Payments on long-term borrowings and obligations	(175,115		)	—			—			(175,115		)
Increase (decrease) in cash overdraft balance	314			(7,184		)	—			(6,870		)
Payments for Omnicare common stock repurchase	(160,438		)	—			—			(160,438		)
Dividends paid	(38,979		)	—			—			(38,979		)
Other	454,061			(452,660		)	—			1,401
Net cash flows from (used in) financing activities	69,218			(459,844		)	—			(390,626		)
Net increase (decrease) in cash and cash equivalents	12,015			(47,697		)	(163		)	(35,845		)
Increase (decrease) from discontinued operations	—			5,820			(390		)	5,430
Net increase (decrease) from continuing operations	12,015			(53,517		)	227			(41,275		)
Cash and cash equivalents at beginning of period	275,910			68,050			12,041			356,001
Cash and cash equivalents at end of period	$	287,925		$	14,533		$	12,268		$	314,726
2013:
Cash flows from operating activities:
Net cash flows (used in) from operating activities	$	(11,358	)	$	275,143		$	(1,116	)	$	262,669
Cash flows from investing activities:
Divestiture of business, net	—			675			—			675
Capital expenditures	—			(45,754		)	(548		)	(46,302		)
Other	(227		)	19			—			(208		)
Net cash flows used in investing activities	(227		)	(45,060		)	(548		)	(45,835		)
Cash flows from financing activities:
Payments on term loans	(10,626		)	—			—			(10,626		)
Payments on long-term borrowings and obligations	(3,434		)	—			—			(3,434		)
Increase (decrease) in cash overdraft balance	(10,324		)	91			—			(10,233		)
Payments for Omnicare common stock repurchases	(100,302		)	—			—			(100,302		)
Dividends paid	(28,766		)	—			—			(28,766		)
Other	260,823			(243,149		)	—			17,674
Net cash flows from (used in) financing activities	107,371			(243,058		)	—			(135,687		)
Net increase (decrease) in cash and cash equivalents	95,786			(12,975		)	(1,664		)	81,147
Decrease from discontinued operations	—			(5,030		)	—			(5,030		)
Net increase (decrease) from continuing operations	95,786			(7,945		)	(1,664		)	86,177
Cash and cash equivalents at beginning of period	383,674			49,108			11,838			444,620
Cash and cash equivalents at end of period	$	479,460		$	41,163		$	10,174		$	530,797

Summary Consolidating Statements of Income (Guaranteed Convertible Senior Debentures)

Summary Consolidating

Statements of Comprehensive Income (Loss)

(in thousands)



	For the three months ended June 30,
2014:	Parent			Guarantor Subsidiary			Non-Guarantor Subsidiaries			Consolidating / Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
Net sales	$	—		$	—		$	1,610,584		$	—		$	1,610,584
Cost of sales	—			—			1,256,354			—			1,256,354
Gross profit	—			—			354,230			—			354,230
Selling, general and administrative expenses	1,441			443			182,179			—			184,063
Provision for doubtful accounts	—			—			21,090			—			21,090
Settlement, litigation and other related charges	—			—			7,547			—			7,547
Other charges	—			—			11,284			—			11,284
Operating income (loss)	(1,441		)	(443		)	132,130			—			130,246
Interest expense, net of investment income	(29,064		)	—			(916		)	—			(29,980		)
Income (loss) before income taxes	(30,505		)	(443		)	131,214			—			100,266
Income tax (benefit) expense	(11,672		)	(170		)	50,862			—			39,020
Income (loss) from continuing operations	(18,833		)	(273		)	80,352			—			61,246
Loss from discontinued operations	—			—			(39,275		)	—			(39,275		)
Equity of net income of subsidiaries	40,804			—			—			(40,804		)	—
Net income (loss)	$	21,971		$	(273	)	$	41,077		$	(40,804	)	$	21,971
Comprehensive income (loss)	$	22,015		$	(273	)	$	41,077		$	(40,804	)	$	22,015
2013:
Net sales	$	—		$	—		$	1,503,116		$	—		$	1,503,116
Cost of sales	—			—			1,143,601			—			1,143,601
Gross profit	—			—			359,515			—			359,515
Selling, general and administrative expenses	1,186			417			190,312			—			191,915
Provision for doubtful accounts	—			—			26,140			—			26,140
Settlement, litigation and other related charges	—			—			3,512			—			3,512
Other charges	—			—			31,268			—			31,268
Operating income (loss)	(1,186		)	(417		)	108,283			—			106,680
Interest expense, net of investment income	(29,183		)	—			(441		)	—			(29,624		)
Income (loss) before income taxes	(30,369		)	(417		)	107,842			—			77,056
Income tax (benefit) expense	(11,659		)	(160		)	41,573			—			29,754
Income (loss) from continuing operations	(18,710		)	(257		)	66,269			—			47,302
Income from discontinued operations	—			—			4,917			—			4,917
Equity of net income of subsidiaries	70,929			—			—			(70,929		)	—
Net income (loss)	$	52,219		$	(257	)	$	71,186		$	(70,929	)	$	52,219
Comprehensive income (loss)	$	52,145		$	(257	)	$	71,186		$	(70,929	)	$	52,145

Condensed Consolidating Balance Sheets (Guaranteed Convertible Senior Debentures)

Condensed Consolidating Balance Sheets

(in thousands)



As of June 30, 2014:	Parent		Guarantor Subsidiary		Non-Guarantor Subsidiaries		Consolidating/Eliminating Adjustments			Omnicare, Inc. and Subsidiaries
ASSETS
Cash and cash equivalents	$	287,925	$	—	$	26,801	$	—		$	314,726
Accounts receivable, net (including intercompany)	—		187		693,213		(187		)	693,213
Inventories	—		—		407,790		—			407,790
Deferred income tax benefits, net-current	—		—		108,212		—			108,212
Other current assets	497		—		290,723		—			291,220
Current assets of discontinued operations	—		—		42,029		—			42,029
Total current assets	288,422		187		1,568,768		(187		)	1,857,190
Properties and equipment, net	—		15		325,238		—			325,253
Goodwill	—		—		4,060,683		—			4,060,683
Identifiable intangible assets, net	—		—		114,172		—			114,172
Other noncurrent assets	42,915		19		61,689		—			104,623
Noncurrent assets of discontinued operations	—		—		40,909		—			40,909
Investment in subsidiaries	4,884,240		—		—		(4,884,240		)	—
Total assets	$	5,215,577	$	221	$	6,171,459	$	(4,884,427	)	$	6,502,830
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities (including intercompany)	$	31,176	$	—	$	551,376	$	(187	)	$	582,365
Current portion of long-term debt	494,738		—		—		—			494,738
Current liabilities of discontinued operations	—		—		18,044		—			18,044
Long-term debt, notes and convertible debentures	1,407,435		—		10,184		—			1,417,619
Deferred income tax liabilities	371,905		—		650,792		—			1,022,697
Other noncurrent liabilities	—		—		56,507		—			56,507
Noncurrent liabilities of discontinued operations	—		—		537		—			537
Convertible debt	310,299		—		—		—			310,299
Stockholders' equity	2,600,024		221		4,884,019		(4,884,240		)	2,600,024
Total liabilities and stockholders' equity	$	5,215,577	$	221	$	6,171,459	$	(4,884,427	)	$	6,502,830
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 six months ended June 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	$	(57,203	)	$	—	$	453,583		$	396,380
Cash flows from investing activities:
Disposition of businesses	—			—		7,114			7,114
Capital expenditures	—			—		(48,023		)	(48,023		)
Other	—			—		(690		)	(690		)
Net cash flows used in investing activities	—			—		(41,599		)	(41,599		)
Cash flows from financing activities:
Payments on terms loans	(10,625		)	—		—			(10,625		)
Payments on long-term borrowings and obligations	(175,115		)	—		—			(175,115		)
Increase (decrease) in cash overdraft balance	314			—		(7,184		)	(6,870		)
Payments for Omnicare common stock repurchase	(160,438		)	—		—			(160,438		)
Dividends paid	(38,979		)	—		—			(38,979		)
Other	454,061			—		(452,660		)	1,401
Net cash flows from (used in) financing activities	69,218			—		(459,844		)	(390,626		)
Net increase (decrease) in cash and cash equivalents	12,015			—		(47,860		)	(35,845		)
Less increase in cash and cash equivalents of discontinued operations	—			—		5,430			5,430
Increase (decrease) in cash and cash equivalents of continuing operations	12,015			—		(53,290		)	(41,275		)
Cash and cash equivalents at beginning of period	275,910			—		80,091			356,001
Cash and cash equivalents at end of period	$	287,925		$	—	$	26,801		$	314,726
2013:
Cash flows from operating activities:
Net cash flows (used in) from operating activities	$	(11,358	)	$	—	$	274,027		$	262,669
Cash flows from investing activities:
Divestiture of business, net	—			—		675			675
Capital expenditures	—			—		(46,302		)	(46,302		)
Other	(227		)	—		19			(208		)
Net cash flows used in investing activities	(227		)	—		(45,608		)	(45,835		)
Cash flows from financing activities:
Payments on term loans	(10,626		)	—		—			(10,626		)
Payments on long-term borrowings and obligations	(3,434		)	—		—			(3,434		)
Increase (decrease) in cash overdraft balance	(10,324		)	—		91			(10,233		)
Payments for Omnicare common stock repurchases	(100,302		)	—		—			(100,302		)
Dividends paid	(28,766		)	—		—			(28,766		)
Other	260,823			—		(243,149		)	17,674
Net cash flows from (used in) financing activities	107,371			—		(243,058		)	(135,687		)
Net increase (decrease) in cash and cash equivalents	95,786			—		(14,639		)	81,147
Less decrease in cash and cash equivalents of discontinued operations	—			—		(5,030		)	(5,030		)
Increase (decrease) in cash and cash equivalents of continuing operations	95,786			—		(9,609		)	86,177
Cash and cash equivalents at beginning of period	383,674			—		60,946			444,620
Cash and cash equivalents at end of period	$	479,460		$	—	$	51,337		$	530,797