24. Condensed Consolidating Financial Statements of Guarantors of the Notes

The 9% senior notes due 2018 were issued by NBTY and are guaranteed by each of its current and future direct and indirect subsidiaries, subject to certain exceptions. These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information presents:

(1)

Condensed consolidating balance sheets as of September 30, 2013 and 2012, and statements of income and statements of cash flows for the fiscal years ended September 30, 2013, 2012 and 2011 of (a) NBTY, Inc., the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries, and (d) the Company on a consolidated basis, and

(2)

Elimination entries necessary to consolidate NBTY, Inc., the parent, with guarantor and non-guarantor subsidiaries.

The condensed consolidating financial statements are presented using the equity method of accounting for investments in wholly-owned subsidiaries. Under this method, the investments in subsidiaries are recorded at cost and adjusted for our share of the subsidiaries' cumulative results of operations, capital contributions, distributions and other equity changes. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. This financial information should be read in conjunction with the consolidated financial statements and other notes related thereto.

Condensed Consolidating Balance Sheet
As of September 30, 2013

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated

Assets
Current assets:
Cash and cash equivalents	$	81,356		$	35,357	$	81,848	$	—		$	198,561
Accounts receivable, net		—			127,894		43,776		—			171,670
Intercompany		857,690			—		264,063		(1,121,753	)		—
Inventories		—			561,276		178,676		—			739,952
Deferred income taxes		—			23,004		633		—			23,637
Other current assets		—			43,137		35,442		—			78,579

Total current assets		939,046			790,668		604,438		(1,121,753	)		1,212,399
Property, plant and equipment, net		88,612			308,852		174,065		—			571,529
Goodwill		—			813,688		447,114		—			1,260,802
Other intangible assets, net		—			1,601,964		358,388		—			1,960,352
Other assets		—			68,155		79		—			68,234
Intercompany loan receivable		323,260			—		—		(323,260	)		—
Investments in subsidiaries		3,211,121			—		—		(3,211,121	)		—

Total assets	$	4,562,039		$	3,583,327	$	1,584,084	$	(4,656,134	)	$	5,073,316

Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—	$	376	$	—		$	376
Accounts payable		—			195,712		63,348		—			259,060
Intercompany		—			1,121,753		—		(1,121,753	)		—
Accrued expenses and other current liabilities		38,407			109,865		71,494		—			219,766

Total current liabilities		38,407			1,427,330		135,218		(1,121,753	)		479,202
Intercompany loan payable		—			—		323,260		(323,260	)		—
Long-term debt, net of current portion		2,157,500			—		905		—			2,158,405
Deferred income taxes		721,830			22,045		7,544		—			751,419
Other liabilities		19,463			14,650		25,338		—			59,451

Total liabilities		2,937,200			1,464,025		492,265		(1,445,013	)		3,448,477
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—		—		—			—
Capital in excess of par		1,556,926			352,019		301,271		(653,290	)		1,556,926
Retained earnings		81,497			1,767,283		789,317		(2,556,600	)		81,497
Accumulated other comprehensive income (loss)		(13,584	)		—		1,231		(1,231	)		(13,584	)

Total stockholder's equity		1,624,839			2,119,302		1,091,819		(3,211,121	)		1,624,839

Total liabilities and stockholder's equity	$	4,562,039		$	3,583,327	$	1,584,084	$	(4,656,134	)	$	5,073,316

Condensed Consolidating Balance Sheet
As of September 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated

Assets
Current assets:
Cash and cash equivalents	$	183,661		$	14,589	$	116,886		$	—		$	315,136
Accounts receivable, net		—			130,281		29,814			—			160,095
Intercompany		1,106,055			—		257,151			(1,363,206	)		—
Inventories		—			546,032		173,564			—			719,596
Deferred income taxes		—			25,609		633			—			26,242
Other current assets		6,000			28,997		29,329			—			64,326

Total current assets		1,295,716			745,508		607,377			(1,363,206	)		1,285,395
Property, plant and equipment, net		61,640			297,009		154,030			—			512,679
Goodwill		—			813,187		407,128			—			1,220,315
Other intangible assets, net		—			1,605,290		346,514			—			1,951,804
Other assets		—			85,860		1,194			—			87,054
Intercompany loan receivable		355,141			40,734		—			(395,875	)		—
Investments in subsidiaries		2,913,403			—		—			(2,913,403	)		—

Total assets	$	4,625,900		$	3,587,588	$	1,516,243		$	(4,672,484	)	$	5,057,247

Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—	$	—		$	—		$	—
Accounts payable		—			154,374		58,174			—			212,548
Intercompany		—			1,363,211		—			(1,363,211	)		—
Accrued expenses and other current liabilities		13,751			111,489		65,112			—			190,352

Total current liabilities		13,751			1,629,074		123,286			(1,363,211	)		402,900
Intercompany loan payable		—			—		395,870			(395,870	)		—
Long-term debt, net of current portion		2,157,500			—		—			—			2,157,500
Deferred income taxes		717,959			—		8,447			—			726,406
Other liabilities		31,458			9,576		24,175			—			65,209

Total liabilities		2,920,668			1,638,650		551,778			(1,759,081	)		3,352,015
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—		—			—			—
Capital in excess of par		1,554,883			352,019		301,271			(653,290	)		1,554,883
Retained earnings		168,943			1,596,919		664,157			(2,261,076	)		168,943
Accumulated other comprehensive income (loss)		(18,594	)		—		(963	)		963			(18,594	)

Total stockholder's equity		1,705,232			1,948,938		964,465			(2,913,403	)		1,705,232

Total liabilities and stockholder's equity	$	4,625,900		$	3,587,588	$	1,516,243		$	(4,672,484	)	$	5,057,247

Condensed Consolidating Statement of Income
Year Ended September 30, 2013

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated

Net sales	$	—		$	2,226,010	$	1,040,601		$	(103,570	)	$	3,163,041

Costs and expenses:
Cost of sales		—			1,343,613		460,866			(103,570	)		1,700,909
Advertising, promotion and catalog		—			153,418		36,067			—			189,485
Selling, general and administrative		103,625			458,065		348,497			—			910,187
Facility restructuring charge		—			32,695		—						32,695

Total costs and expenses		103,625			1,987,791		845,430			(103,570	)		2,833,276

Income (loss) from operations		(103,625	)		238,219		195,171			—			329,765

Other income (expense):
Intercompany interest		14,415			—		(14,415	)		—			—
Interest		(147,676	)		—		576			—			(147,100	)
Miscellaneous, net		(341	)		9,532		(7,498	)		—			1,693

Total other expense		(133,602	)		9,532		(21,337	)		—			(145,407	)

(Loss) income before income taxes		(237,227	)		247,751		173,834			—			184,358
(Benefit) provision for income taxes		(71,183	)		77,387		48,674			—			54,878
Equity in income of subsidiaries		295,524			—		—			(295,524	)		—

Net income		129,480			170,364		125,160			(295,524	)		129,480

Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment, net of taxes		(682	)		—		2,191			(2,191	)		(682	)
Change in fair value of interest rate and cross currency swaps, net of taxes		5,692			—		—			—			5,692

Comprehensive income (loss)	$	134,490		$	170,364	$	127,351		$	(297,715	)	$	134,490

Condensed Consolidating Statement of Income
Year Ended September 30, 2012

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated

Net sales	$	—		$	2,173,443	$	947,941		$	(121,651	)	$	2,999,733

Costs and expenses:
Cost of sales		—			1,303,122		426,965			(121,651	)		1,608,436
Advertising, promotion and catalog		—			134,076		30,222			—			164,298
Selling, general and administrative		77,156			431,047		324,426			—			832,629

		77,156			1,868,245		781,613			(121,651	)		2,605,363

Income (loss) from operations		(77,156	)		305,198		166,328			—			394,370

Other income (expense):
Intercompany interest		4,769			—		(4,769	)		—			—
Interest		(158,584	)		—		—			—			(158,584	)
Miscellaneous, net		365			1,564		(2,932	)		—			(1,003	)

		(153,450	)		1,564		(7,701	)		—			(159,587	)

Income from continuing operations before income taxes		(230,606	)		306,762		158,627			—			234,783
(Benefit) provision for income taxes		(86,518	)		107,367		44,415			—			65,264
Equity in income of subsidiaries		290,559			—		—			(290,559	)		—

Income from continuing operations		146,471			199,395		114,212			(290,559	)		169,519

Loss from discontinued operations, net of income taxes		—			—		(23,048	)		—			(23,048	)

Net income		146,471			199,395		91,164			(290,559	)		146,471

Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment, net of taxes		23,107			—		13,193			(13,193	)		23,107
Change in fair value of interest rate and cross currency swaps, net of taxes		(3,936	)		—		—			—			(3,936	)

Comprehensive income	$	165,642		$	199,395	$	104,357		$	(303,752	)	$	165,642

Condensed Consolidating Statement of Income
Year Ended September 30, 2011

	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated

Net sales	$	—		$	2,129,211	$	867,339		$	(132,123	)	$	2,864,427

Costs and expenses:
Cost of sales		—			1,349,302		424,708			(132,123	)		1,641,887
Advertising, promotion and catalog		—			120,882		31,139			—			152,021
Selling, general and administrative		73,315			404,659		310,745			—			788,719
Merger expenses		43,857			—		622			—			44,479

		117,172			1,874,843		767,214			(132,123	)		2,627,106

Income (loss) from operations		(117,172	)		254,368		100,125			—			237,321

Other income (expense):
Intercompany interest		10,608					(10,608	)					—
Interest		(195,527	)				(39	)					(195,566	)
Miscellaneous, net		(33	)		4,977		(3,011	)					1,933

		(184,952	)		4,977		(13,658	)		—			(193,633	)

Income (loss) from continuing operations before income taxes		(302,124	)		259,345		86,467			—			43,688
(Benefit) provision for income taxes		(104,989	)		90,769		25,209			—			10,989
Equity in income of subsidiaries		227,054								(227,054	)		—

Income from continuing operations		29,919			168,576		61,258			(227,054	)		32,699

Loss from discontinued operations, net of income taxes		—			—		(2,780	)		—			(2,780	)

Net income		29,919			168,576		58,478			(227,054	)		29,919

Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustment, net of taxes		(20,196	)		—		(14,156	)		14,156			(20,196	)
Change in fair value of interest rate and cross currency swaps, net of taxes		(17,569	)		—		—			—			(17,569	)

Comprehensive income (loss)	$	(7,846	)	$	168,576	$	44,322		$	(212,898	)	$	(7,846	)

Condensed Consolidating Statement of Cash Flows
Fiscal Year Ended September 30, 2013

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Cash flows from operating activities:
Net income	$	129,480		$	170,364		$	125,160		$	(295,524	)	$	129,480
Adjustments to reconcile net income to net cash and cash equivalents provided by (used for) operating activities:
Equity in earnings of subsidiaries		(295,524	)								295,524			—
Impairments and disposals of assets, net					5,014			255			—			5,269
Depreciation of property, plant and equipment		8,213			40,124			16,546			—			64,883
Amortization of intangible assets		—			42,341			3,412			—			45,753
Foreign currency transaction gain		(745	)		—			(201	)		—			(946	)
Amortization of financing fees		17,121						—			—			17,121
Write-off of financing fees		4,232						—			—			4,232
Stock-based compensation		1,845			72			126			—			2,043
Allowance for doubtful accounts		—			(2,587	)		—			—			(2,587	)
Amortization of incremental inventory fair value		—			2,417			—			—			2,417
Inventory reserves		—			2,042			—			—			2,042
Deferred income taxes		—			5,293			—			—			5,293
Call premium on term loan		(15,075	)		—			—						(15,075	)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		—			9,126			(13,822	)		—			(4,696	)
Inventories		—			185			(3,053	)		—			(2,868	)
Other assets		—			2,872			(5,454	)		—			(2,582	)
Accounts payable		—			42,331			3,422			—			45,753
Accrued expenses and other liabilities		—			9,062			6,982			—			16,044
Intercompany accounts		378,035			(243,709	)		(134,326	)		—			—

Net cash provided by (used for) operating activities		227,582			84,947			(953	)		—			311,576

Cash flows from investing activities:
Purchase of property, plant and equipment		(35,186	)		(59,039	)		(34,995	)		—			(129,220	)
Proceeds from sale of building		7,548			—			—			—			7,548
Cash paid for acquisitions, net of cash acquired		(77,936	)		(4,537	)		—			—			(82,473	)

Net cash used in investing activities		(105,574	)		(63,576	)		(34,995	)		—			(204,145	)

Cash flows from financing activities:
Principal payments under long-term debt agreements and capital leases		—			(603	)		—			—			(603	)
Payment of financing fees		(7,387	)		—			—			—			(7,387	)
Proceeds from borrowings under the revolver		80,000			—			—			—			80,000
Paydowns of borrowings under the revolver		(80,000	)		—			—			—			(80,000	)
Dividends paid		(216,926	)		—			—			—			(216,926	)

Net cash used in financing activities		(224,313	)		(603	)		—			—			(224,916	)

Effect of exchange rate changes on cash and cash equivalents		—			—			910			—			910

Net (decrease) increase in cash and cash equivalents		(102,305	)		20,768			(35,038	)		—			(116,575	)
Cash and cash equivalents at beginning of year		183,661			14,589			116,886			—			315,136

Cash and cash equivalents at end of year	$	81,356		$	35,357		$	81,848		$	—		$	198,561

Condensed Consolidating Statement of Cash Flows
Fiscal Year Ended September 30, 2012

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Cash flows from operating activities:
Net income	$	146,471		$	199,395		$	91,164		$	(290,559	)	$	146,471
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Equity in earnings of subsidiaries		(290,559	)		—			—			290,559			—
Impairments and disposals of assets, net		—			266			498			—			764
Loss from discontinued operations		—			—			23,048			—			23,048
Depreciation of property, plant and equipment		5,275			37,603			15,433			—			58,311
Amortization of intangible assets		—			40,680			3,280			—			43,960
Foreign currency transaction gain		(12	)		—			(277	)		—			(289	)
Stock-based compensation		2,482			72			126			—			2,680
Amortization of deferred charges		14,411			—			—			—			14,411
Write off of financing fees		9,289			—			—			—			9,289
Allowance for doubtful accounts		—			297			—			—			297
Inventory reserves		—			(2,652	)		—			—			(2,652	)
Deferred income taxes		—			(23,852	)		6,795			—			(17,057	)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		—			(18,843	)		(3,537	)		—			(22,380	)
Inventories		—			(28,139	)		(16,651	)		—			(44,790	)
Other assets		—			2,066			(4,213	)		—			(2,147	)
Accounts payable		—			14,220			1,877			—			16,097
Accrued expenses and other liabilities		—			(14,924	)		20,415			—			5,491
Intercompany accounts		279,288			(153,706	)		(125,582	)		—			—

Cash provided by operating activities of continuing operations		166,645			52,483			12,376			—			231,504

Cash provided by operating activities of discontinued operations		—			—			2,546			—			2,546

Net cash provided by operating activities		166,645			52,483			14,922			—			234,050

Cash flows from investing activities:
Purchase of property, plant and equipment		(20,287	)		(41,182	)		(24,845	)		—			(86,314	)
Net proceeds from sale of discontinued operations		515			—			—			—			515

Net cash used in investing activities of continuing operations		(19,772	)		(41,182	)		(24,845	)		—			(85,799	)

Cash flows from financing activities:
Principal payments under long-term debt agreements and capital leases		(224,325	)		—			(5,050	)		—			(229,375	)
Capital contribution		15			—			—			—			15

Net cash used in financing activities		(224,310	)		—			(5,050	)		—			(229,360	)

Effect of exchange rate changes on cash and cash equivalents		—			—			1,839			—			1,839

Net (decrease) increase in cash and cash equivalents		(77,437	)		11,301			(13,134	)		—			(79,270	)
Change in cash for discontinued operations		—			—			1,071			—			1,071
Cash and cash equivalents at beginning of year		261,098			3,288			128,949			—			393,335

Cash and cash equivalents at end of year	$	183,661		$	14,589		$	116,886		$	—		$	315,136

Condensed Consolidating Statement of Cash Flows
Fiscal Year Ended September 30, 2011

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated

Cash flows from operating activities:
Net income	$	29,919		$	168,576		$	58,478		$	(227,054	)	$	29,919
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Equity in earnings of subsidiaries		(227,054	)		—			—			227,054			—
Impairments and disposals of assets, net		—			1,555			549			—			2,104
Loss from discontinued operations		—			—			2,780			—			2,780
Depreciation of property, plant and equipment		4,840			36,211			14,538			—			55,589
Amortization of intangible assets		—			40,405			3,681			—			44,086
Foreign currency transaction loss		(331	)		—			395			—			64
Stock-based compensation		1,506			179			103			—			1,788
Amortization of deferred charges		15,076			—			—			—			15,076
Write off of financing fees		20,824			—			—			—			20,824
Allowance for doubtful accounts		—			5,468			—			—			5,468
Amortization of incremental inventory fair value		—			83,952			38,152			—			122,104
Inventory reserves		—			22,364			—			—			22,364
Deferred income taxes		—			(30,934	)		—			—			(30,934	)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		—			(10,132	)		440			—			(9,692	)
Inventories		—			(10,887	)		(28,047	)		—			(38,934	)
Other assets		—			4,303			4,640			—			8,943
Accounts payable		—			25,261			2,840			—			28,101
Accrued expenses and other liabilities		—			(14,936	)		18,018			—			3,082
Intercompany accounts		321,271			(297,364	)		(23,907	)		—			—

Cash provided by operating activities of continuing operations		166,051			24,021			92,660			—			282,732

Cash provided by operating activities of discontinued operations		—			—			1,905			—			1,905

Net cash provided by operating activities		166,051			24,021			94,565			—			284,637

Cash flows from investing activities:
Purchase of property, plant and equipment		(1,652	)		(17,443	)		(24,904	)		—			(43,999	)
Cash paid for acquisitions		(3,983,806	)		(3,196	)		(807	)		—			(3,987,809	)

Cash used in investing activities of continuing operations		(3,985,458	)		(20,639	)		(25,711	)		—			(4,031,808	)

Cash used in investing activities of discontinued operations		—			—			(235	)		—			(235	)

Net cash used in investing activities		(3,985,458	)		(20,639	)		(25,946	)		—			(4,032,043	)

Cash flows from financing activities:
Principal payments under long-term debt agreements and capital leases		(13,125	)		(429	)		—			—			(13,554	)
Payments for financing fees		(138,227	)		—			—			—			(138,227	)
Proceeds from borrowings		2,400,000			—			—			—			2,400,000
Capital contribution		1,550,400			—			—			—			1,550,400

Cash provided by (used in) financing activities of continuing operations		3,799,048			(429	)		—			—			3,798,619

Cash used in financing activities of disontinued operations		—			—			(381	)		—			(381	)

Net cash provided by (used in) financing activities		3,799,048			(429	)		(381	)		—			3,798,238

Effect of exchange rate changes on cash and cash equivalents		—			335			(3,244	)		—			(2,909	)

Net (decrease) increase in cash and cash equivalents		(20,359	)		3,288			64,994			—			47,923
Change in cash for discontinued operations		—			—			3,734			—			3,734
Cash and cash equivalents at beginning of year		281,457			—			60,221			—			341,678

Cash and cash equivalents at end of year	$	261,098		$	3,288		$	128,949		$	—		$	393,335