10-Q

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2014
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                             to

Commission File Number: 001-31788

NBTY, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 11-2228617
(I.R.S. Employer
Identification No.)

2100 Smithtown Avenue,
Ronkonkoma, New York 11779
(Address of principal executive offices) (Zip Code)

(631) 200-2000
(Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES o    NO ý

        Note: The registrant was subject to the reporting requirements of Section 15(d) of the Exchange Act from June 16, 2011 through September 30, 2011. As of October 1, 2011, the registrant is a voluntary filer not subject to these filing requirements. However, the registrant has filed all reports required pursuant to Section 13 or 15(d) as if the registrant was subject to such filing requirements since June 16, 2011.

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ý    NO o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer ý
(Do not check if a
smaller reporting company) Smaller reporting company o

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o    NO ý

        The number of shares of common stock outstanding as of February 2, 2015 was 1,000.

NBTY, Inc. and Subsidiaries
INDEX

		Page
PART I
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Income and Comprehensive Income	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45
PART II
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	48
Item 6.	Exhibits	49
Signatures		50
Exhibits

PART I

Item 1.    Financial Statements

NBTY, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)

	December 31, 2014			September 30, 2014
Assets
Current assets:
Cash and cash equivalents	$	212,047		$	139,488
Accounts receivable, net		185,416			175,701
Inventories		803,386			853,226
Deferred income taxes		26,955			28,915
Other current assets		69,259			78,824
Total current assets		1,297,063			1,276,154
Property, plant and equipment, net		593,793			597,202
Goodwill		1,146,470			1,163,282
Intangible assets, net		1,766,378			1,791,592
Other assets		47,142			49,492
Total assets	$	4,850,846		$	4,877,722
Liabilities and Stockholder's Equity
Current liabilities:
Current portion long-term debt	$	246		$	261
Accounts payable		265,732			227,877
Accrued expenses and other current liabilities		197,335			221,056
Total current liabilities		463,313			449,194
Long-term debt, net of current portion		2,158,002			2,158,087
Deferred income taxes		705,472			707,962
Other liabilities		44,378			53,386
Total liabilities		3,371,165			3,368,629
Commitments and contingencies
Stockholder's equity:
Common stock, successor, $0.01 par; one thousand shares authorized, issued and outstanding at December 31, 2014 and September 30, 2014		—			—
Capital in excess of par		1,561,746			1,561,014
Accumulated deficit		(23,277	)		(22,718	)
Accumulated other comprehensive loss		(58,788	)		(29,203	)
Total stockholder's equity		1,479,681			1,509,093
Total liabilities and stockholder's equity	$	4,850,846		$	4,877,722

The accompanying notes are an integral part of these consolidated financial statements.

3

NBTY, Inc. and Subsidiaries

Consolidated Statements of Income and Comprehensive Income

(Unaudited)

(in thousands)

	Three Months Ended December 31,
	2014			2013
Net sales	$	825,771		$	827,105
Costs and expenses:
Cost of sales		445,180			441,718
Advertising, promotion and catalog		46,894			38,522
Selling, general and administrative		238,172			232,684
		730,246			712,924
Income from operations		95,525			114,181
Other income (expense):
Interest		(34,747	)		(34,818	)
Miscellaneous, net		(1,355	)		990
		(36,102	)		(33,828	)
Income from operations before income taxes		59,423			80,353
Provision for income taxes		21,232			26,532
Net income		38,191			53,821
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of taxes of $396 and $2,388		(30,306	)		12,196
Change in fair value of interest rate swaps, net of taxes of $(442) and $(697)		721			1,085
Total other comprehensive (loss) income, net of tax:		(29,585	)		13,281
Comprehensive income	$	8,606		$	67,102

The accompanying notes are an integral part of these consolidated financial statements.

4

NBTY, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Three Months Ended December 31,
	2014			2013
Cash flows from operating activities:
Net income	$	38,191		$	53,821
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Impairments and disposals of assets		659			159
Depreciation of property, plant and equipment		16,707			13,963
Amortization of intangible assets		11,358			11,603
Foreign currency transaction (gain) loss		(87	)		144
Amortization and write-off of deferred financing fees		5,071			4,684
Stock-based compensation		732			1,620
Allowance for doubtful accounts		35			(7	)
Inventory reserves		5,369			1,801
Deferred income taxes		(256	)		(2,714	)
Changes in operating assets and liabilities:
Accounts receivable		(12,105	)		(31,117	)
Inventories		37,604			(96,549	)
Other assets		6,229			4,438
Accounts payable		38,953			32,225
Accrued expenses and other liabilities		(15,390	)		(34,160	)
Net cash provided by (used in) operating activities		133,070			(40,089	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(19,090	)		(21,247	)
Proceeds from sale of building and equipment		193			—
Net cash used in investing activities		(18,897	)		(21,247	)
Cash flows from financing activities:
Principal payments		(67	)		(132	)
Payments for financing fees		(611	)		—
Dividends paid		(38,750	)		(21,313	)
Net cash used in financing activities		(39,428	)		(21,445	)
Effect of exchange rate changes on cash		(2,186	)		970
Net increase (decrease) in cash		72,559			(81,811	)
Cash at beginning of period		139,488			198,561
Cash at end of period	$	212,047		$	116,750
Non-cash investing and financing information:
Property, plant and equipment additions included in total liabilities	$	11,748		$	7,676

The accompanying notes are an integral part of these consolidated financial statements.

5

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

(in thousands)

1. Basis of Presentation

        NBTY, Inc. ("NBTY"), together with its subsidiaries, (the "Company," "we," or "us"), is the leading global vertically integrated manufacturer, marketer, distributor and retailer of a broad line of high-quality vitamins, nutritional supplements and related products in the United States, with operations worldwide. We have prepared these financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") applicable to interim financial information and on a basis that is consistent with the accounting principles applied in our audited financial statements for the fiscal year ended September 30, 2014, including the notes thereto (our "2014 Financial Statements") included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2014 ("2014 Annual Report"). In our opinion, these financial statements reflect all adjustments (including normal recurring items) necessary for a fair presentation of our results for the interim periods presented. These financial statements do not include all information or notes necessary for a complete presentation in conformity with GAAP. Accordingly, these financial statements should be read in conjunction with the 2014 Financial Statements. Results for interim periods are not necessarily indicative of results which may be achieved for a full year.

Estimates

        The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. These judgments can be subjective and complex, and consequently actual results could differ materially from those estimates and assumptions. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets, including goodwill and intangible assets; stock-based compensation; income taxes and accruals for the outcome of current litigation.

Accounts Receivable Reserves

        Accounts receivable are presented net of the following reserves:

	December 31, 2014		September 30, 2014
Promotional program incentive allowances	$	107,852	$	83,768
Allowance for sales returns		13,990		15,409
Allowance for doubtful accounts		2,424		2,564
	$	124,266	$	101,741

6

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

1. Basis of Presentation (Continued)

Recent Accounting Developments

        In January 2015, the FASB issued guidance which eliminates from GAAP the concept of extraordinary items. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted, provided that adoption is applied from the beginning of the fiscal year of adoption. This guidance may be applied prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of this guidance is not expected to have an impact on our consolidated financial statements.

Revision

        See Note 12 for a revision that was made to the Condensed Consolidating Financial Statements of Guarantors.

2. Inventories

        The components of inventories are as follows:

	December 31, 2014		September 30, 2014
Raw materials	$	217,066	$	217,697
Work-in-process		20,196		20,898
Finished goods		566,124		614,631
Total	$	803,386	$	853,226

3. Goodwill and Intangible Assets

        The change in the carrying amount of goodwill by segment is as follows:

	Wholesale			European Retail			Direct Response / E-Commerce		Consolidated
Balance at September 30, 2014	$	638,630		$	321,257		$	203,395	$	1,163,282
Foreign currency translation		(3,854	)		(12,958	)		—		(16,812	)
Balance at December 31, 2014	$	634,776		$	308,299		$	203,395	$	1,146,470

7

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

3. Goodwill and Intangible Assets (Continued)

        The carrying amounts of acquired other intangible assets, which are subject to the impact of changes in foreign currency for the periods indicated are as follows:

	December 31, 2014				September 30, 2014
	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization		Amortization period (years)
Definite lived intangible assets:
Brands and customer relationships	$	910,563	$	165,412	$	912,200	$	155,776		17 - 25
Tradenames and other		174,726		23,894		175,872		22,644		20 - 30
		1,085,289		189,306		1,088,072		178,420
Indefinite lived intangible assets:
Tradenames		870,395		—		881,940		—
Total intangible assets	$	1,955,684	$	189,306	$	1,970,012	$	178,420

        Aggregate amortization expense of definite lived intangible assets included in the consolidated statements of income and comprehensive (loss) income in selling, general and administrative expenses for the three months ended December 31, 2014, and 2013 was $11,358 and $11,603, respectively.

        Assuming no changes in our intangible assets, estimated amortization expense for each of the five succeeding years will be approximately $45,000 per year.

4. Long-Term Debt

        The components of long-term debt are as follows:

	December 31, 2014			September 30, 2014
Senior Credit Facilities:
Term loan B-2	$	1,507,500		$	1,507,500
Notes		650,000			650,000
Other		748			848
		2,158,248			2,158,348
Less: current portion		(246	)		(261	)
Total	$	2,158,002		$	2,158,087

Senior credit facilities

        On October 1, 2010, NBTY entered into its senior secured credit facilities with Barclays Bank PLC, as administrative agent (the "Original Credit Agreement"). The Original Credit Agreement was amended pursuant to the First Amendment and Refinancing Agreement, dated as of March 1, 2011, and further amended pursuant to that Second Amendment Agreement, dated as of October 11, 2012.

8

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

4. Long-Term Debt (Continued)

        On March 21, 2013, NBTY, Alphabet Holding Company, Inc. ("Holdings"), Barclays Bank PLC, as administrative agent, and several other lenders entered into the Third Amendment and Second Refinancing Agreement (the "Second Refinancing") pursuant to which NBTY repriced its term loan B-1 under its then existing credit agreement. Under the terms of the Second Refinancing, the $1,750,000 term loan B-1 was replaced with a new $1,507,500 term loan B-2. Borrowings under term loan B-2 and the revolving credit facility bear interest at a floating rate which can be, at NBTY's option, either (i) Eurodollar (LIBOR) rate plus an applicable margin, or (ii) base rate plus an applicable margin, in each case, subject to a Eurodollar (LIBOR) rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for term loan B-2 is 2.50% per annum for Eurodollar (LIBOR) loans and 1.50% per annum for base rate loans. The applicable margin for the revolving credit facility remained at 3.25% per annum for Eurodollar (LIBOR) loans and 2.25% per annum for base rate loans, with a step-down of 25 basis points upon the achievement of a total senior secured leverage ratio as set forth in the senior secured credit facilities. Substantially all other terms are consistent with the original term loan B-1, including the maturity dates. As a result of the Second Refinancing, $4,232 of previously capitalized deferred financing costs, as well as $1,151 of the call premium on term loan B-1, were expensed and included in interest expense. In addition, costs incurred and recorded as deferred financing costs were approximately $15,190, including $13,924 of the call premium paid on term loan B-1, and are being amortized using the effective interest method. In accordance with the provisions of the credit agreement governing the senior secured credit facilities, future scheduled payments of principal will not be required until the final balloon payment at maturity in October 2017.

        On November 20, 2014, NBTY amended its senior secured revolving credit facility, extending its maturity to September 2017 and reducing the commitment from $200,000 to $175,000. In connection with this amendment, deferred financing costs of $611 were incurred and will be amortized over the remaining period and $359 of previously capitalized financing costs were written off.

        The following fees are applicable under the revolving credit facility: (i) an unused line fee of 0.50% per annum, based on the unused portion of the revolving credit facility; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit available to be drawn equal to the applicable margin for Eurodollar rate loans; (iii) a letter of credit fronting fee equal to 0.25% per annum on the daily amount of each letter of credit available to be drawn; and (iv) certain other customary fees and expenses of our letter of credit issuers.

        As of December 31, 2014, there were no borrowings drawn from our $175,000 revolving credit facility and there was a letter of credit totaling $4,400, reducing the net availability to $170,600.

        NBTY may voluntarily prepay loans or reduce commitments under its senior secured credit facilities, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.

        NBTY must make prepayments on the term loan B-2 facility with the net cash proceeds of certain asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under its senior secured credit facilities unless specifically incurred to refinance a portion of its senior secured credit facilities) and 50% of excess cash flow, as

9

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

4. Long-Term Debt (Continued)

defined in the credit agreement (such percentage subject to reduction based on achievement of total senior secured leverage ratios), in each case, subject to certain reinvestment rights and other exceptions. NBTY is also required to make prepayments under its revolving credit facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the revolving credit facility exceeds the aggregate amount of commitments in respect of the revolving credit facility.

        Obligations under the senior secured credit facilities are guaranteed by Holdings and each of NBTY's current and future direct and indirect subsidiaries other than (i) foreign subsidiaries, (ii) unrestricted subsidiaries, (iii) non-wholly owned subsidiaries, (iv) certain receivables financing subsidiaries, (v) certain immaterial subsidiaries and (vi) certain holding companies of foreign subsidiaries, and are secured by a first lien on substantially all of their assets, including capital stock of subsidiaries (subject to certain exceptions).

        The senior secured credit facilities contain customary negative covenants, including, but not limited to, restrictions on NBTY and its restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, amend organizational documents, or change our line of business or fiscal year. In addition, NBTY's senior secured credit facilities require the maintenance of a maximum total senior secured leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA, as defined therein, if at any time amounts are outstanding under the revolving credit facility, including swingline loans and letters of credit. NBTY was in compliance with all covenants under the senior secured credit facilities at December 31, 2014.

        The senior secured credit facilities provide that, upon the occurrence of certain events of default, the obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material ERISA/pension plan events, certain change of control events and other customary events of default.

Holdco Notes

        On October 17, 2012, Holdings issued $550,000 in aggregate principal amount of 7.75%/8.50% contingent cash pay senior notes ("Holdco Notes") that mature on November 1, 2017. Interest on the Holdco Notes accrues at the rate of 7.75% per annum with respect to cash interest and 8.50% per annum with respect to any paid-in-kind interest ("PIK Interest"). Interest on the Holdco Notes is payable semi-annually in arrears on May 1 and November 1 of each year. All interest payments made to date have been in cash. Holdings is a holding company with no operations and has no ability to service interest or principal on the Holdco Notes, other than through dividends it may receive from NBTY. NBTY is restricted, in certain circumstances, from paying dividends to Holdings by the terms of the indenture governing NBTY's 9.00% Senior Notes due 2018 ("Notes") and the senior secured credit facilities. NBTY has not guaranteed the indebtedness of Holdings, nor pledged any of its assets as

10

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

4. Long-Term Debt (Continued)

collateral, and the Holdco Notes are not reflected in NBTY's financial statements. The proceeds from the offering of the Holdco Notes, along with $200,000 of cash on hand from NBTY, as described below, were used to pay transaction fees and expenses, including a consent fee of $17,345 and a $721,682 cash dividend to Holdings' shareholders in October 2012.

        On December 12, 2013, Holdings issued an additional $450,000 in aggregate principal amount of Holdco Notes that mature on November 1, 2017. The additional $450,000 Holdco Notes and the $550,000 of original Holdco Notes previously issued on October 17, 2012 have identical terms and are treated as a single class for all purposes under the indenture governing the Holdco Notes. The gross proceeds from the offering of the $450,000 additional Holdco Notes was $460,125, inclusive of a $10,125 premium, which were used to pay transaction fees and expenses, including a consent fee, totaling $18,560 and a $445,537 dividend to Holdings' shareholders in December 2013.

        Interest on the Holdco Notes shall be payable entirely in cash ("Cash Interest") to the extent that it is less than the maximum amount of allowable dividends and distributions plus any cash at Holdings ("Applicable Amount") as defined by the indenture governing the Holdco Notes. For any interest period after May 1, 2013 (other than the final interest period ending at stated maturity), if the Applicable Amount for such interest period will:

          (i)  equal or exceed 75%, but be less than 100%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 25% of the then outstanding principal amount of the Holdco Notes by increasing the principal amount of the outstanding Holdco Notes or by issuing payment in kind notes ("PIK Notes") in a principal amount equal to such interest and (b) 75% of the then outstanding principal amount of the Holdco Notes as Cash Interest;

         (ii)  equal or exceed 50%, but be less than 75%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 50% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 50% of the then outstanding principal amount of the Holdco Notes as Cash Interest;

        (iii)  equal or exceed 25%, but be less than 50%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 75% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 25% of the then outstanding principal amount of the Holdco Notes as Cash Interest; or

        (iv)  be less than 25% of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on the Holdco Notes as PIK Interest.

        As described above, Holdings' ability to pay PIK Interest depends on the calculation of the Applicable Amount regardless of the availability of cash at Holdings.

        All interest payments to date have been in cash and were funded by dividends from NBTY.

11

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

4. Long-Term Debt (Continued)

        Holdings may redeem the Holdco Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on November 1 of the years set forth below:

Period	Redemption Price
2014		102.00	%
2015		101.00	%
2016 and thereafter		100.00	%

Notes

        On October 1, 2010, NBTY issued $650,000 in aggregate principal amount of senior notes bearing interest at 9% in a private placement. On August 2, 2011, these privately placed notes were exchanged for substantially identical notes that were registered under the Securities Act of 1933, as amended, and therefore are freely tradable (the privately placed notes and such registered notes exchanged therefor, the "Notes"). The Notes are senior unsecured obligations and mature on October 1, 2018. Interest on the Notes is paid on April 1 and October 1 of each year, and commenced on April 1, 2011.

        NBTY may redeem the Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on October 1 of the years set forth below:

Period	Redemption Price
2014		104.50	%
2015		102.25	%
2016 and thereafter		100.00	%

        The Notes are jointly and severally irrevocably and unconditionally guaranteed by each of NBTY's subsidiaries that is a guarantor under the credit agreement. The Notes are uncollateralized and rank senior in right of payment to existing and future indebtedness that is expressly subordinated to the Notes, rank equally in right of payment to NBTY and its subsidiary guarantors' senior unsecured debt, and are effectively junior to any of NBTY or its subsidiary guarantors' secured debt, to the extent of the value of the collateral securing such debt. The Notes contain certain customary covenants including, but not limited to, restrictions on NBTY and its restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, or pay dividends. NBTY was in compliance with all covenants under the Notes at December 31, 2014.

12

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

5. Fair Value of Financial Instruments

        Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

•

Level 1—Quoted prices in active markets for identical assets or liabilities.

•

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

        The following table summarizes liabilities measured at fair value on a recurring basis at December 31, 2014:

	Level 1		Level 2		Level 3
Current (included in accrued expenses and other current liabilities):
Cross currency swaps	$	—	$	—	$	3,156
Non-current (included in other liabilities):
Cross currency swaps	$	—	$	—	$	3,726

        The following table summarizes liabilities measured at fair value on a recurring basis at September 30, 2014:

	Level 1		Level 2		Level 3
Current (included in accrued expenses and other current liabilities):
Interest rate swaps	$	—	$	1,151	$	—
Cross currency swaps	$	—	$	—	$	3,857
Non-current (included in other liabilities):
Cross currency swaps	$	—	$	—	$	14,773

        The Company's swap contracts are measured at fair value based on a market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Although non-performance risk of the Company and the counterparty is present in all swap contracts and is a component of the estimated fair values, we did not view non-performance risk to be a significant input to the fair value for the interest rate swap contracts. However, with respect to our cross currency swap contracts, we believe that non-performance risk is higher; therefore, the Company classifies these swap contracts as "Level 3" in the fair value hierarchy and, accordingly, records estimated fair value

13

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

5. Fair Value of Financial Instruments (Continued)

adjustments based on internal projections and views of those contracts. The performance risk for the cross currency swap contracts as a percentage of the unadjusted liabilities ranged from 14.4% to 16.7% (15.0% weighted average) as of December 31, 2014 and 8.1% to 8.5% (8.3% weighted average) as of September 30, 2014.

        The following table shows the Level 3 activity related to our cross currency swaps for the three months ended December 31, 2014 and 2013:

	Three Months Ended December 31,
	2014			2013
Beginning balance:	$	(18,630	)	$	(22,254	)
Unrealized gain (loss) on cross currency swaps		11,748			(5,105	)
Ending balance:	$	(6,882	)	$	(27,359	)

Interest Rate Swaps

        During March 2011, we entered into three interest rate swap contracts to fix the LIBOR indexed interest rates on a portion of our senior secured credit facilities until the indicated expiration dates of these swap contracts. Each swap contract had a declining notional amount with a fixed interest rate of 1.92% for a four-year term and matured in December 2014. Under the terms of the swap contracts, variable interest payments for a portion of our senior secured credit facilities were swapped for fixed interest payments. These interest rate swap contracts were designated as a cash flow hedge of the variable interest payments on a portion of our term loan debt. Hedge effectiveness was assessed based on the overall changes in the fair value of the interest rate swap contracts. Hedge ineffectiveness from inception to December 31, 2014 was insignificant, and was recorded in Miscellaneous, net.

Cross Currency Swaps

        To manage the potential exposure from adverse changes in currency exchange rates, specifically the British pound sterling, arising from our net investment in British pound sterling denominated operations, we entered into three cross currency swap contracts in December 2010, to hedge a portion of the net investment in our British pound denominated foreign operations. The aggregate notional amount of the swap contracts is £194,200 British pounds sterling (approximately $300,000 U.S. dollars), with a forward rate of 1.565, and a termination date of September 30, 2017.

        These cross currency contracts were designated as a net investment hedge to the net investment in our British pound sterling denominated operations. Hedge effectiveness is assessed based on the overall changes in the fair value of the cross currency swap contracts. Any potential hedge ineffectiveness is measured using the hypothetical derivative method and is recognized in current earnings. Hedge ineffectiveness loss/(gain) for the three months ended December 31, 2014 and 2013 was $1,934 and ($1,010), respectively, and is recorded in Miscellaneous, net.

14

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

5. Fair Value of Financial Instruments (Continued)

        The following table shows the effect, net of tax impact, of the Company's derivative instruments designated as cash flow and net investment hedging instruments:

	Three Months Ended December 31,
	2014						2013
	Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Cash Flow Hedges:
Interest rate swaps	$	(438	)	$	(1,159	)	$	(783	)	$	(1,868	)
Net Investment Hedges:
Cross currency swaps		9,171			—			(4,154	)		—
Total	$	8,733		$	(1,159	)	$	(4,937	)	$	(1,868	)

Notes

        The fair value of the Notes, based on quoted market prices (Level 2), was approximately $646 as of December 31, 2014.

Term loan B-2

        The face amount of the term loan B-2 is $1,507,500, which approximates fair value based on Level 2 inputs, as this loan accrues interest at a variable interest rate.

6. Litigation Summary

Glucosamine-Based Dietary Supplements

        Beginning in June 2011, certain putative class actions have been filed in various jurisdictions against NBTY, its subsidiary Rexall Sundown, Inc. ("Rexall"), and/or other companies as to which there may be a duty to defend and indemnify, challenging the marketing of glucosamine- based dietary supplements, under various states' consumer protection statutes. The lawsuits against NBTY and its subsidiaries are: Cardenas v. NBTY, Inc. and Rexall Sundown, Inc. (filed June 14, 2011) in the United States District Court for the Eastern District of California, on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief; Jennings v. Rexall Sundown, Inc. (filed August 22, 2011) in the United States District Court for the District of Massachusetts, on behalf of a putative class of Massachusetts consumers seeking unspecified trebled compensatory damages; and Nunez v. NBTY, Inc. et al. (filed March 1, 2013) in the United States District Court for the Southern District of California (the "Nunez Case"), on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus injunctive

15

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

6. Litigation Summary (Continued)

relief, as well as other cases in California and Illinois against certain wholesale customers as to which we may have certain indemnification obligations.

        In March 2013, NBTY agreed upon a proposed settlement with the remaining plaintiffs, which includes all cases and resolved all pending claims without any admission of or concession of liability by NBTY, and which provided for a release of all claims in return for payments to the class, together with attorneys' fees, and notice and administrative costs. Fairness Hearings took place on October 4, 2013 and November 20, 2013. On January 3, 2014, the court issued an opinion and order approving the settlement as modified (the "Order"). The final judgment was issued on January 22, 2014 (the "Judgment"). Certain objectors filed a notice of appeal of the Order and the Judgment on January 29, 2014 and the plaintiffs filed a notice of appeal on February 3, 2014. On November 19, 2014, the appellate court issued a decision granting the objectors' appeal. The appellate court reversed and remanded the matter to the district court for further proceedings consistent with the appellate court's decision.

        In fiscal 2013, NBTY recorded a provision of $12,000, reflecting its best estimate of exposure for payments to the class together with attorney's fees and notice and administrative costs in connection with this class action settlement. As a result of the court's approval of the settlement and the closure of the claims period, NBTY reduced its estimate of exposure to $6,100. This reduction in the estimated exposure was reflected in the Company's first quarter results for fiscal 2014. Until the cases are resolved, no final determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY.

Telephone Consumer Protection Act Claim

        NBTY, and certain of its subsidiaries, are defendants in a class-action lawsuit, captioned John H. Lary Jr. v. Rexall Sundown, Inc.; Rexall Sundown 3001, LLC; Rexall, Inc.; NBTY, Inc.; Corporate Mailings, Inc. d/b/a CCG Marketing Solutions ("CCG") and John Does 1-10 (originally filed October 22, 2013), brought in the United States District Court, Eastern District of New York. The plaintiff alleges that the defendants faxed advertisements to plaintiff and others without invitation or permission, in violation of the Telephone Consumer Protection Act ("TCPA").

        On May 2, 2014, NBTY and its named subsidiary defendants cross-claimed against CCG, who was a third party vendor engaged by NBTY, and CCG cross-claimed against NBTY and named subsidiary defendants on June 13, 2014. CCG brought a third party complaint against an unrelated entity, Healthcare Data Experts, LLC, on June 27, 2014. On July 21, 2014, CCG filed a motion to dismiss the amended complaint and that motion is pending.

        At this time, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY, however, we do not believe the ultimate outcome will have a material adverse effect on our consolidated financial statements.

16

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

6. Litigation Summary (Continued)

Claims in the Ordinary Course

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability, intellectual property and Proposition 65 claims) arise from time to time in the ordinary course of our business. We currently believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial statements, if adversely determined against us.

        Over the past several years, we have been served with various false advertising putative class action cases in various U.S. jurisdictions, as have various other companies in the industry. Over the past few years, the number of these cases has increased, such that at any given time we are defending several suits concerning a variety of products. These cases challenge the marketing of the subject dietary supplements under various states' consumer protection statutes and generally seek unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief. Until these cases are resolved, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on our part.

7. Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2015 and 2029. Therefore, our overall effective income tax rate could vary.

        The effective income tax rate for the three months ended December 31, 2014 and 2013 was 35.7% and 33.0%, respectively. Our effective tax rate for the three months ended December 31, 2014 is higher than the federal statutory rate generally due to the impact of state and local taxes. Our effective tax rate for the three months ended December 31, 2013 was lower than the federal statutory rate generally due to the timing and mixture (foreign and domestic) of income and the partial reinvestment of foreign earnings in fiscal 2014.

        We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2014, we had accrued $448 and $174 for the potential payment of interest and penalties, respectively. As of December 31, 2014, we were subject to U.S. federal income tax examinations for the tax years 2011 through 2014, and to non-U.S. examinations for tax years 2009 through 2014. In addition, we are generally subject to state and local examinations for fiscal years 2011 through 2014.

        The Company is under an Internal Revenue Service ("IRS") examination for tax years 2011 through 2012. Among other issues, the IRS has questioned the values used by the Company to provide services to an international subsidiary. The Company believes it has appropriately valued such services and intends to continue to support this position as the IRS examination progresses.

17

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

8. Accumulated Other Comprehensive Income (Loss)

        Additions to and reclassifications out of accumulated other comprehensive income (loss) attributable to the Company for the three months ended December 31, 2014 and 2013 were as follows:

	Three Months Ended December 31, 2014(1)
	Foreign currency translation adjustments			Gains and losses on cash flow hedges			Total
Balance at September 30, 2014	$	(28,482	)	$	(721	)	$	(29,203	)
Other comprehensive income (loss) before reclassifications		(30,306	)		(438	)		(30,744	)
Amounts reclassified from accumulated other comprehensive income (loss)(2)		—			1,159			1,159
Balance at December 31, 2014	$	(58,788	)	$	—		$	(58,788	)

	Three Months Ended December 31, 2013(1)
	Foreign currency translation adjustments			Gains and losses on cash flow hedges			Total
Balance at September 30, 2013	$	(9,681	)	$	(3,902	)	$	(13,583	)
Other comprehensive income (loss) before reclassifications		12,196			(783	)		11,413
Amounts reclassified from accumulated other comprehensive income (loss)(2)		—			1,868			1,868
Balance at December 31, 2013	$	2,515		$	(2,817	)	$	(302	)

(1)

All amounts are net of tax, amounts in parentheses indicate debits.

(2)

These losses are reclassified into Interest expense. See Note 5, Fair Value of Financial Instruments.

9. Business and Credit Concentration

Financial Instruments

        Financial instruments that potentially subject us to credit risk consist primarily of cash and cash equivalents (the amounts of which may, at times, exceed Federal Deposit Insurance Corporation limits on insurable amounts), investments and trade accounts receivable. We mitigate our risk by investing in or through major financial institutions.

18

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

9. Business and Credit Concentration (Continued)

Customers

        We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customers' current creditworthiness, as determined by review of their current credit information. Customers' account activity is continuously monitored. As a result of this review process, we record bad debt expense, which is based upon historical experience as well as specific customer collection issues that have been identified, to adjust the carrying amount of the related receivable to its estimated realizable value. While such bad debt expenses historically have been within expectations and the allowances established, if the financial condition of one or more of our customers were to deteriorate, additional bad debt provisions may be required.

        The following customers accounted for the following percentages of net sales for the three months ended December 31, 2014 and 2013, respectively:

	Wholesale Segment Net Sales						Total Consolidated Net Sales
	Three Months Ended December 31,						Three Months Ended December 31,
	2014			2013			2014			2013
Customer A		17	%		18	%		10	%		11	%
Customer B		18	%		17	%		11	%		10	%
Customer C		11	%		8	%		6	%		5	%

        The following customers accounted for the following percentages of the Wholesale segment's gross accounts receivable:

	December 31, 2014			September 30, 2014
Customer A		13	%		13	%
Customer B		10	%		11	%
Customer C		13	%		9	%

        The loss of any of these customers, or any one of our other major customers, would have a material adverse effect on our consolidated financial statements if we were unable to replace that customer.

10. Related Party Transactions

Consulting Agreement—The Carlyle Group ("Carlyle")

        NBTY entered into a consulting agreement with Carlyle under which we pay Carlyle a fee for consulting services Carlyle provides to it and its subsidiaries. Under this agreement, subject to certain conditions, NBTY expects to pay an annual consulting fee to Carlyle of $3,000; NBTY reimburses Carlyle for out-of-pocket expenses, and may pay Carlyle additional fees associated with other future

19

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

10. Related Party Transactions (Continued)

transactions. For the three months ended December 31, 2014 and 2013, these fees totaled $750, in each period, and are recorded in selling, general and administrative expenses. Out of pocket expenditures paid to Carlyle were $334 and $0 for the three months ended December 31, 2014 and 2013, respectively.

Holdings

        Holdings does not have any operations or cash flow other than dividends from NBTY. Holdings has $1,000,000 of Holdco Notes and relies on dividends from NBTY to service the debt. See Note 4 Long-Term Debt for further information.

11. Segment Information

        We are organized by segments on a worldwide basis. We evaluate performance based on a number of factors; however, the primary measures of performance are the net sales and income or loss from operations (before corporate allocations) of each segment, as these are the key performance indicators that we review. Operating income or loss for each segment does not include the impact of any intercompany transfer pricing mark-up, corporate general and administrative expenses, interest expense and other miscellaneous income/expense items. Corporate general and administrative expenses include, but are not limited to, human resources, legal, finance, and various other corporate-level activity related expenses. Such unallocated expenses remain within Corporate/Manufacturing.

        All of our products fall into one or more of these four segments:

•

Wholesale—This segment sells products worldwide under various brand names and third-party private labels, each targeting specific market groups which include virtually all major mass merchandisers, club stores, drug store chains and supermarkets. This segment also sells products to independent pharmacies, health food stores, the military and other retailers.

•

European Retail—This segment generates revenue through its 766 Holland & Barrett stores (including franchised stores in the following countries: 31 in China, 30 in Singapore, 12 in United Arab Emirates,10 in Cyprus, five in Malta and one in each of Gibraltar, Iceland and Kuwait), 148 De Tuinen stores (including six franchised locations) in the Netherlands, 53 GNC branded UK stores, 48 Nature's Way stores in Ireland and 17 Essenza stores in Belgium, as well as internet-based sales from www.hollandandbarrett.com, www.hollandandbarrett.co.uk, www.hollandandbarrett.ie,www.detuinen.nl and www.gnc.co.uk. Such revenue consists of sales of proprietary brand and third-party products as well as franchise fees.

•

Direct Response/E-Commerce—This segment generates revenue through the sale of proprietary brand and third-party products primarily through mail order catalogs and the internet under the Puritan's Pride tradename. Catalogs are strategically mailed to customers who order by mail, internet, or phone.

•

North American Retail—This segment generates revenue through its 403 owned and operated Vitamin World stores selling proprietary brand and third-party products, as well as internet-based sales from www.vitaminworld.com.

20

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

11. Segment Information (Continued)

        The following table represents key financial information of our business segments:

	Total Reportable Business Segments
	Wholesale		European Retail		Direct Response/ E-Commerce		North American Retail		Total		Corporate/ Manufacturing			Consolidated
Three Months Ended December 31, 2014:
Net sales	$	495,126	$	213,597	$	63,143	$	53,905	$	825,771	$	—		$	825,771
Income (loss) from operations		64,829		46,315		6,060		1,304		118,508		(22,983	)		95,525
Depreciation and amortization		9,002		5,049		2,830		895		17,776		10,289			28,065
Capital expenditures		73		10,703		13		1,023		11,812		7,278			19,090
Three Months Ended December 31, 2013:
Net sales	$	505,275	$	204,912	$	60,362	$	56,556	$	827,105	$	—		$	827,105
Income (loss) from operations		82,728		43,960		6,975		2,792		136,455		(22,274	)		114,181
Depreciation and amortization		9,086		4,044		2,812		706		16,648		8,918			25,566
Capital expenditures		31		5,321		570		3,633		9,555		11,692			21,247

        Total assets by segment are as follows:

	December 31, 2014		September 30, 2014
Reportable Business Segments:
Wholesale	$	2,523,828	$	2,581,069
European Retail		918,555		948,010
Direct Response / E-Commerce		512,527		512,642
North American Retail		107,289		107,442
Total Reportable Business Segments:		4,062,199		4,149,163
Corporate / Manufacturing		788,647		728,559
Consolidated assets	$	4,850,846	$	4,877,722

12. Condensed Consolidating Financial Statements of Guarantors

        The Notes were issued by NBTY and are guaranteed by each of its current and future direct and indirect 100% owned subsidiaries, subject to certain exceptions. These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information presents:

1.

Condensed consolidating financial statements as of December 31, 2014 and September 30, 2014 and for the three months ended December 31, 2014 and 2013 of (a) NBTY, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) NBTY on a consolidated basis; and



2.

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

21

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

12. Condensed Consolidating Financial Statements of Guarantors (Continued)

        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, other comprehensive income, 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 financial statements and other notes related thereto.

        We revised the statement of operations with respect to equity in income of subsidiaries from the non-guarantor subsidiaries to the guarantor. This revision impacted the condensed consolidating statement of operations and comprehensive income (loss) for the three months ended December 31, 2013 increasing net income for the guarantors and decreasing the eliminations by $6,166. The revision to this supplemental information did not impact any amounts reported in our previously issued Consolidated Financial Statements. In accordance with SEC Staff Accounting Bulletin Nos. 99 and 108, we assessed the materiality of these revisions and concluded that the revisions were not material to any of our previously issued consolidating financial statements. As comparative prior period supplemental guarantor subsidiaries financial information is presented in future filings, we will similarly revise such prior period information.

22

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

12. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Balance Sheet
As of December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	136,850		$	3,674		$	71,523		$	—		$	212,047
Accounts receivable, net		—			142,566			42,850			—			185,416
Intercompany		14,634			—			41,677			(56,311	)		—
Inventories		—			600,305			203,081			—			803,386
Deferred income taxes		—			25,102			1,853			—			26,955
Other current assets		18,424			14,028			36,807			—			69,259
Total current assets		169,908			785,675			397,791			(56,311	)		1,297,063
Property, plant and equipment, net		105,957			293,901			193,935			—			593,793
Goodwill		—			726,354			420,116			—			1,146,470
Other intangible assets, net		—			1,428,727			337,651			—			1,766,378
Other assets		38,334			8,724			84			—			47,142
Intercompany loan receivable		2,484,368			1,188,662			—			(3,673,030	)		—
Investments in subsidiaries		2,071,071			140,782			—			(2,211,853	)		—
Total assets	$	4,869,638		$	4,572,825		$	1,349,577		$	(5,941,194	)	$	4,850,846
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	246		$	—		$	246
Accounts payable		—			176,725			89,007			—			265,732
Intercompany		—			56,311			—			(56,311	)		—
Accrued expenses and other current liabilities		17,791			126,197			53,347			—			197,335
Total current liabilities		17,791			359,233			142,600			(56,311	)		463,313
Intercompany loan payable		1,188,659			2,157,500			326,871			(3,673,030	)		—
Long-term debt, net of current portion		2,157,500			—			502			—			2,158,002
Deferred income taxes		22,281			583,925			99,266			—			705,472
Other liabilities		3,726			16,553			24,099			—			44,378
Total liabilities		3,389,957			3,117,211			593,338			(3,729,341	)		3,371,165
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—			—			—			—
Capital in excess of par		1,561,746			1,358,862			746,911			(2,105,773	)		1,561,746
(Accumulated deficit) retained earnings		(23,277	)		107,745			60,266			(168,011	)		(23,277	)
Accumulated other comprehensive income (loss)		(58,788	)		(10,993	)		(50,938	)		61,931			(58,788	)
Total stockholder's equity		1,479,681			1,455,614			756,239			(2,211,853	)		1,479,681
Total liabilities and stockholder's equity	$	4,869,638		$	4,572,825		$	1,349,577		$	(5,941,194	)	$	4,850,846

23

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

12. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Balance Sheet
As of September 30, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	77,550		$	751		$	61,187					$	139,488
Accounts receivable, net		—			130,749			44,952						175,701
Intercompany		30,425			—			32,102			(62,527	)		—
Inventories		—			650,484			202,742			—			853,226
Deferred income taxes		—			27,002			1,913			—			28,915
Other current assets		19,932			18,049			40,843			—			78,824
Total current assets		127,907			827,035			383,739			(62,527	)		1,276,154
Property, plant and equipment, net		95,022			304,274			197,906			—			597,202
Goodwill		—			726,354			436,928			—			1,163,282
Other intangible assets, net		—			1,439,374			352,218			—			1,791,592
Other assets		41,286			8,115			91			—			49,492
Intercompany loan receivable		2,497,343			1,060,793			—			(3,558,136	)		—
Investments in subsidiaries		2,037,163			148,921			—			(2,186,084	)		—
Total assets	$	4,798,721		$	4,514,866		$	1,370,882		$	(5,806,747	)	$	4,877,722
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	261		$	—		$	261
Accounts payable		—			140,761			87,116			—			227,877
Intercompany		—			62,527			—			(62,527	)		—
Accrued expenses and other current liabilities		34,282			112,136			74,638			—			221,056
Total current liabilities		34,282			315,424			162,015			(62,527	)		449,194
Intercompany loan payable		1,060,793			2,157,500			339,843			(3,558,136	)		—
Long-term debt, net of current portion		2,157,500			—			587			—			2,158,087
Deferred income taxes		22,280			586,116			99,566			—			707,962
Other liabilities		14,773			13,732			24,881			—			53,386
Total liabilities		3,289,628			3,072,772			626,892			(3,620,663	)		3,368,629
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—			—			—			—
Capital in excess of par		1,561,014			1,358,862			739,911			(2,098,773	)		1,561,014
(Accumulated deficit) retained earnings		(22,718	)		89,265			24,570			(113,835	)		(22,718	)
Accumulated other comprehensive income (loss)		(29,203	)		(6,033	)		(20,491	)		26,524			(29,203	)
Total stockholder's equity		1,509,093			1,442,094			743,990			(2,186,084	)		1,509,093
Total liabilities and stockholder's equity	$	4,798,721		$	4,514,866		$	1,370,882		$	(5,806,747	)	$	4,877,722

24

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

12. Condensed Consolidating Financial Statements of Guarantors (Continued)

Consolidated Statements of Operations and Comprehensive Income (Loss)
For three months ended December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	557,361		$	289,017		$	(20,607	)	$	825,771
Costs and expenses:
Cost of sales		—			338,946			126,841			(20,607	)		445,180
Advertising, promotion and catalog		—			34,947			11,947			—			46,894
Selling, general and administrative		22,890			114,937			100,345			—			238,172
		22,890			488,830			239,133			(20,607	)		730,246
Income (loss) from operations		(22,890	)		68,531			49,884			—			95,525
Other income (expense):
Intercompany interest		39,809			(34,781	)		(5,028	)		—			—
Interest		(34,781	)		65			(31	)		—			(34,747	)
Miscellaneous, net		(1,746	)		(843	)		1,234			—			(1,355	)
		3,282			(35,559	)		(3,825	)		—			(36,102	)
Income (loss) before income taxes		(19,608	)		32,972			46,059			—			59,423
Provision (benefit) for income taxes		(1,166	)		12,035			10,363			—			21,232
Equity in income of subsidiaries		56,633			6,333			—			(62,966	)		—
Net income (loss)		38,191			27,270			35,696			(62,966	)		38,191
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of taxes		(30,306	)		(5,681	)		(30,447	)		36,128			(30,306	)
Change in fair value of interest rate swaps, net of taxes		721			721			—			(721	)		721
Total other comprehensive income (loss), net of tax		(29,585	)		(4,960	)		(30,447	)		35,407			(29,585	)
Comprehensive income (loss)	$	8,606		$	22,310		$	5,249		$	(27,559	)	$	8,606

25

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

12. Condensed Consolidating Financial Statements of Guarantors (Continued)

Consolidated Statements of Operations and Comprehensive Income (Loss)
For three months ended December 31, 2013

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	571,066		$	285,141		$	(29,102	)	$	827,105
Costs and expenses:
Cost of sales		—			341,868			128,952			(29,102	)		441,718
Advertising, promotion and catalog		—			29,114			9,408			—			38,522
Selling, general and administrative		22,273			116,880			93,531			—			232,684
		22,273			487,862			231,891			(29,102	)		712,924
Income (loss) from operations		(22,273	)		83,204			53,250			—			114,181
Other income (expense):
Intercompany interest		39,708			(34,798	)		(4,910	)		—			—
Interest		(34,798	)		—			(20	)		—			(34,818	)
Miscellaneous, net		910			951			(871	)		—			990
		5,820			(33,847	)		(5,801	)		—			(33,828	)
Income (loss) before income taxes		(16,453	)		49,357			47,449			—			80,353
Provision (benefit) for income taxes		(5,369	)		18,615			13,286			—			26,532
Equity in income of subsidiaries		64,905			6,166			—			(71,071	)		—
Net income (loss)		53,821			36,908			34,163			(71,071	)		53,821
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of taxes		12,196			2,205			9,915			(12,120	)		12,196
Change in fair value of interest rate swaps, net of taxes		1,085			1,085			—			(1,085	)		1,085
Total other comprehensive income (loss), net of tax		13,281			3,290			9,915			(13,205	)		13,281
Comprehensive income (loss)	$	67,102		$	40,198		$	44,078		$	(84,276	)	$	67,102

26

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

12. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Cash Flows
Three Months Ended December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash (used in) provided by operating activities	$	(24,334	)	$	142,688		$	23,505		$	(8,789	)	$	133,070
Cash flows from investing activities:
Purchase of property, plant and equipment		(8,954	)		(1,009	)		(9,127	)					(19,090	)
Proceeds from sale of property, plant and equipment		—			193			—						193
Investment in subsidiary		(7,000	)		—			—			7,000			—
Net cash used in investing activities		(15,954	)		(816	)		(9,127	)		7,000			(18,897	)
Cash flows from financing activities:
Principal payments under long-term agreements		—			—			(67	)		—			(67	)
Payments for financing fees		(611	)		—			—			—			(611	)
Dividends paid		(38,750	)		—			(8,789	)		8,789			(38,750	)
Capital contribution		—			—			7,000			(7,000	)		—
Intercompany accounts		138,949			(138,949	)		—			—			—
Net cash used in financing activities		99,588			(138,949	)		(1,856	)		1,789			(39,428	)
Effect of exchange rate changes on cash		—			—			(2,186	)		—			(2,186	)
Net increase in cash		59,300			2,923			10,336			—			72,559
Cash at beginning of period		77,550			751			61,187			—			139,488
Cash end of period	$	136,850		$	3,674		$	71,523		$	—		$	212,047

27

NBTY, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

(Unaudited)

(in thousands)

12. Condensed Consolidating Financial Statements of Guarantors (Continued)

Condensed Consolidating Statement of Cash Flows
Three Months Ended December 31, 2013

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash (used in) provided by operating activities	$	(6,378	)	$	(54,362	)	$	23,876		$	(3,225	)	$	(40,089	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,127	)		(12,388	)		(7,732	)					(21,247	)
Net cash used in investing activities		(1,127	)		(12,388	)		(7,732	)		—			(21,247	)
Cash flows from financing activities:
Principal payments under long-term agreements		—			—			(132	)		—			(132	)
Dividends paid		(21,313	)		—			(3,225	)		3,225			(21,313	)
Intercompany accounts		(33,387	)		33,387			—			—			—
Net cash used in financing activities		(54,700	)		33,387			(3,357	)		3,225			(21,445	)
Effect of exchange rate changes on cash		—			—			970			—			970
Net (decrease) in cash		(62,205	)		(33,363	)		13,757			—			(81,811	)
Cash at beginning of period		81,356			35,357			81,848			—			198,561
Cash at end of period	$	19,151		$	1,994		$	95,605		$	—		$	116,750

28

NBTY, Inc. and Subsidiaries
Item 2.    Management's Discussion and Analysis of Financial Condition and
Results of Operations
(Dollar amounts in thousands)

Forward-Looking Statements

        This Quarterly Report (this "Report") contains "forward-looking statements" within the meaning of the securities laws. You should not place undue reliance on these statements. Forward-looking statements include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," or similar expressions. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate in these circumstances. As you read and consider this Report, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties and assumptions. Many factors could affect our actual financial results and could cause actual results to differ materially from those expressed in the forward-looking statements. Some important factors include:

•

consumer perception of our products due to adverse scientific research or findings, regulatory investigations, litigation, national media attention and other publicity regarding nutritional supplements;

•

potential slow or negative growth in the vitamin, mineral and supplement market;

•

increases in the cost of borrowings or unavailability of additional debt or equity capital, or both;

•

volatile conditions in the capital, credit and commodities markets and in the overall economy;

•

dependency on retail stores for sales;

•

the loss of significant customers;

•

compliance with new and existing federal, state, local or foreign legislation or regulation, or adverse determinations by regulators anywhere in the world (including the banning of products) and, in particular, Good Manufacturing Practices in the United States, the Food Supplements Directive and Traditional Herbal Medicinal Products Directive in Europe and greater enforcement by any such federal, state, local or foreign governmental entities;

•

material product liability claims and product recalls;

•

our inability to obtain or renew insurance, or to manage insurance costs;

•

international market exposure and compliance with anti-corruption laws in the U.S. and foreign jurisdictions;

•

difficulty entering new international markets;

•

legal proceedings initiated by regulators in the United States or abroad or lawsuits arising in the ordinary course of business;

•

unavailability of, or our inability to consummate, advantageous acquisitions in the future, or our inability to integrate acquisitions into the mainstream of our business;

•

loss of executive officers or other key personnel;

•

loss of certain third party suppliers;

•

the availability of raw materials;

29

•

disruptions in manufacturing operations that produce nutritional supplements and loss of manufacturing certifications;

•

increased competition and failure to compete effectively;

•

our inability to respond to changing consumer preferences;

•

interruption of business or negative impact on sales and earnings due to acts of God, acts of war, sabotage, terrorism, bio-terrorism, civil unrest or disruption of delivery service;

•

work stoppages at our facilities;

•

increased raw material, utility and fuel costs;

•

fluctuations in foreign currencies, including the British pound sterling, the euro, the Canadian dollar and the Chinese renminbi;

•

interruptions in information processing systems and management information technology, including system interruptions and security breaches;

•

failure to maintain and/or upgrade our information technology systems;

•

our inability to protect our intellectual property rights;

•

our exposure to, and the expense of defending and resolving, product liability claims, intellectual property claims and other litigation;

•

failure to maintain effective controls over financial reporting;

•

other factors disclosed in this Report; and

•

other factors beyond our control.

        In light of these risks, uncertainties and assumptions, the forward-looking statements contained in this Report might not prove accurate. You should not place undue reliance upon them. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this Report, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

The statements in the following discussion and analysis regarding industry outlook, our expectations regarding the performance of our business and the forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under the heading, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2014 (our "2014 Annual Report"). Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion together with the condensed consolidated financial statements, including the related notes, contained elsewhere herein and with the 2014 Annual Report. All references to years, unless otherwise noted, refer to our fiscal years, which end on September 30. All dollar values in this section, unless otherwise noted, are denoted in thousands. Numerical figures have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

Executive Summary

        NBTY is the leading vertically integrated manufacturer, marketer, distributor and retailer of high-quality vitamins, nutritional supplements and related products in the United States, with operations worldwide. We currently market over 25,000 SKUs under numerous owned and private-label brands, including Nature's Bounty®, Ester-C®, Solgar®, MET-Rx®, American Health®, Osteo Bi-Flex®, SISU®, Sundown®, Rexall®, Pure Protein®, Balance Bar®, Body Fortress®, Natural Wealth®, Puritan's

30

Pride®, Holland & Barrett®, GNC (UK)®, Physiologics®, De Tuinen®, Essenza® and Vitamin World®. Our vertical integration includes purchasing raw materials and formulating and manufacturing products, which we then market through the following four channels of distribution.

•

Wholesale—This segment sells products worldwide under various brand names and third-party private labels, each targeting specific market groups which include virtually all major mass merchandisers, club stores, drug store chains and supermarkets. This segment also sells products to independent pharmacies, health food stores, the military and other retailers.

•

European Retail—This segment generates revenue through its 766 Holland & Barrett stores (including franchised stores in the following countries: 31 in China, 30 in Singapore, 12 in United Arab Emirates,10 in Cyprus, five in Malta and one in each of Gibraltar, Iceland and Kuwait), 148 De Tuinen stores (including six franchised locations) in the Netherlands, 53 GNC branded UK stores, 48 Nature's Way stores in Ireland and 17 Essenza stores in Belgium, as well as internet-based sales from www.hollandandbarrett.com, www.hollandandbarrett.co.uk, www.hollandandbarrett.ie,www.detuinen.nl and www.gnc.co.uk. Such revenue consists of sales of proprietary brand and third-party products as well as franchise fees.

•

Direct Response/E-Commerce—This segment generates revenue through the sale of proprietary brand and third-party products primarily through mail order catalogs and the internet under the Puritan's Pride tradename. Catalogs are strategically mailed to customers who order by mail, internet, or phone.

•

North American Retail—This segment generates revenue through its 403 owned and operated Vitamin World stores selling proprietary brand and third-party products, as well as internet-based sales from www.vitaminworld.com.

        Operating data for each of the four distribution channels does not include the impact of any intercompany transfer pricing mark-up, corporate general and administrative expenses, interest expense and other miscellaneous income/expense items. Corporate general and administrative expenses include, but are not limited to, human resources, legal, finance and various other corporate-level activity related expenses. We attribute such unallocated expenses to Corporate/Manufacturing.

Results of Operations

Three Months Ended December 31, 2014 Compared to the Three Months Ended December 31, 2013:

Net Sales

        Net sales by segment were as follows:

	Three Months Ended December 31,
	2014					2013
	Net Sales		% of total			Net Sales		% of total			$ change			% change
Wholesale	$	495,126		60.0	%	$	505,275		61.1	%	$	(10,149	)		(2.0	)%
European Retail		213,597		25.9	%		204,912		24.8	%		8,685			4.2	%
Direct Response/E-Commerce		63,143		7.6	%		60,362		7.3	%		2,781			4.6	%
North American Retail		53,905		6.5	%		56,556		6.8	%		(2,651	)		(4.7	)%
Net sales	$	825,771		100.0	%	$	827,105		100.0	%	$	(1,334	)		(0.2	)%

Wholesale

        Net sales for the Wholesale segment decreased $10,149, or 2.0%, to $495,126 for the three months ended December 31, 2014, as compared to the prior comparable period. This decrease is due to

31

$13,954 lower net sales to certain contract manufacturing and private label accounts partially offset by $3,805 higher net sales of our branded products, both domestically and internationally, as there were increases in core brands with decreases in our joint care brands. Domestic branded net sales increased $1,029 and international branded net sales increased $2,776 for the three months ended December 31, 2014, as compared to the prior comparable period.

        We continue to adjust shelf space allocation among our numerous wholesale brands to provide the best overall product mix and to respond to changing market conditions. The Wholesale segment continues to leverage valuable consumer sales information obtained from our retail stores and Direct Response/E-Commerce operations to provide our mass market customers with data and analyses to drive mass market sales.

        We use targeted promotions to grow overall sales. Promotional programs and rebates were 16.8% of sales for the three months ended December 31, 2014, as compared to 15.9% of sales for the prior comparable period. We expect promotional programs and rebates as a percentage of sales to fluctuate on a quarterly basis.

        Product returns were 1.2% and 1.5% of Wholesale sales for each of the three months ended December 31, 2014 and 2013, respectively, and are primarily attributable to returns in the ordinary course of business. We expect product returns relating to normal operations to trend between 1% and 2% of Wholesale sales in future quarters.

        The following customers accounted for the following percentages of net sales for the three months ended December 31, 2014 and 2013, respectively:

	Wholesale Segment Net Sales						Total Consolidated Net Sales
	Three Months Ended December 31,						Three Months Ended December 31,
	2014			2013			2014			2013
Customer A		17	%		18	%		10	%		11	%
Customer B		18	%		17	%		11	%		10	%
Customer C		11	%		8	%		6	%		5	%

        The loss of any of these customers, or any one of our other major customers, would have a material adverse effect on our consolidated financial statements if we were unable to replace that customer.

European Retail

        Net sales for the European Retail segment increased $8,685, or 4.2%, to $213,597 for the three months ended December 31, 2014, as compared to the prior comparable period. This increase is attributable to more successful promotional activity and additional stores opened during the period. Offsetting the increase, the average exchange rate of the British pound sterling to the U.S. dollar decreased 2.2% and the euro to the U.S. dollar decreased 8.3% as compared to the prior comparable period. In local currency, net sales increased 8.1% and sales for stores open more than one year (same store sales which include online sales) increased 5.7% as compared to the prior comparable period.

32

        The following is a summary of European Retail store activity:

	Three Months Ended December 31,
	2014		2013
Company-owned stores
Open at beginning of the period		927		901
Opened during the period		8		4
Closed during the period		—		(3	)
Open at end of the period		935		902
Franchised stores
Open at beginning of the period		89		79
Opened during the period		8		9
Closed during the period		—		(2	)
Open at end of the period		97		86
Total company-owned and franchised stores
Open at beginning of the period		1,016		980
Opened during the period		16		13
Closed during the period		—		(5	)
Open at end of the period		1,032		988

Direct Response/E-Commerce

        Net sales for the Direct Response/E-Commerce segment increased by $2,781, or 4.6%, to $63,143 for the three months ended December 31, 2014, as compared to the prior comparable period. The total number of orders increased approximately 10%, while the average order size declined approximately 5% for the three months ended December 31, 2014, as compared to the prior comparable period. E-commerce orders comprised 76% of total Direct Response/E-Commerce orders for the three months ended December 31, 2014 as compared to 70% in the prior comparable period. We remain among the leaders for vitamin and nutritional supplements in the direct response and e-commerce sectors, and we continue to increase the number of products available via our catalog and websites.

        This segment continues to vary its promotional strategy throughout the fiscal year, utilizing highly promotional catalogs which are not offered in every quarter. Historical results reflect this pattern and therefore this division should be viewed on an annual, and not quarterly, basis.

North American Retail

        Net sales for the North American Retail segment decreased $2,651, or 4.7%, to $53,905 for the three months ended December 31, 2014, as compared to the prior comparable period. Same store sales (which include online sales) declined 3.0% due to a softer retail environment.

33

        The following is a summary of North American Retail store activity:

	Three Months Ended December 31,
	2014			2013
Open at beginning of the period		414			421
Opened during the period		2			8
Closed during the period		(13	)		(6	)
Open at end of the period		403			423

Cost of Sales

        Cost of sales was as follows:

	Three Months Ended December 31,
	2014			2013			$ change		% change
Cost of sales	$	445,180		$	441,718		$	3,462		0.8	%
Percentage of net sales		53.9	%		53.4	%

        Cost of sales as a percentage of net sales increased by 0.5 percentage points. The increase in the percentage of cost of sales was primarily due to lower margins earned on private label products and an increase in reserves on certain inventory in China due to regulatory uncertainty.

        Due to competitive pressure in the private label business, the cost of sales for our private label business as a percentage of net sales could fluctuate. This would adversely affect gross profits during the affected periods. To address these matters, we continuously seek to implement additional improvements in our supply chain and we are increasing our focus on our branded sales.

Advertising, Promotion and Catalog Expenses

        Total advertising, promotion and catalog expenses were as follows:

	Three Months Ended December 31,
	2014			2013			$ change		% change
Advertising, promotion and catalog	$	46,894		$	38,522		$	8,372		21.7	%
Percentage of net sales		5.7	%		4.7	%

        The $8,372 or 21.7% increase in advertising, promotion and catalog expense primarily related to increased advertising in our Wholesale segment, as we continue to increase our focus on branded products, as well as increased spending on media and loyalty program costs in our European Retail segment.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses ("SG&A") were as follows:

	Three Months Ended December 31,
	2014			2013			$ change		% change
Selling, general and administrative	$	238,172		$	232,684		$	5,488		2.4	%
Percentage of net sales		28.8	%		28.1	%

34

        The SG&A increase of $5,488, or 2.4%, for the three months ended December 31, 2014, as compared to the prior comparable period, is primarily due to (i) $2,803 of additional depreciation primarily due to the implementation of a POS system in our European Retail segment as well as the ongoing implementation and support of our ERP system in Corporate/Manufacturing, (ii) $2,668 of increased legal settlement costs primarily related to a reduction of an estimated settlement value in the prior comparable period, and (iii) $1,903 of increased professional fees relating to outsourcing services to support our IT environment, partially offset by the reduction of insurance costs of $1,489 due to lower rates.

Income from Operations

        Income from operations was as follows:

	Three Months Ended December 31,
	2014			2013			$ change			% change
Wholesale	$	64,829		$	82,728		$	(17,899	)		(21.6	)%
European Retail		46,315			43,960			2,355			5.4	%
Direct Response/E-Commerce		6,060			6,975			(915	)		(13.1	)%
North American Retail		1,304			2,792			(1,488	)		(53.3	)%
Corporate/Manufacturing		(22,983	)		(22,274	)		(709	)		(3.2	)%
Total	$	95,525		$	114,181		$	(18,656	)		(16.3	)%
Percentage of net sales		11.6	%		13.8	%

        The decrease in the Wholesale segment was primarily due to the decrease in net sales and increase in advertising expense. The increase in the European Retail segment was the result of higher sales volume offset by increased advertising and SG&A costs (primarily payroll costs and building costs associated with new stores). The decrease in the Direct Response/E-Commerce segment was primarily due to increased cost of sales as a percentage of net sales due to additional sales promotions. The decrease in the North American Retail segment was primarily due to the decrease in net sales from store closures and lower same store sales from the prior year as well as increased cost of sales as a percentage of net sales due to additional sales promotions. Corporate/Manufacturing increased due to increases in legal settlements as there was a reduction of an estimated settlement value in the prior period and increases in depreciation expense with the ongoing implementation of our ERP system, partially offset by decreases in building and salary costs.

Interest Expense

        Interest expense for the three months ended December 31, 2014 remained relatively consistent as compared to the prior comparable period.

Provision for Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2015 and 2029. Therefore, our overall effective income tax rate could vary as a result of these factors. The effective income tax rate for the three months ended December 31, 2014 and 2013 was 35.7% and 33.0%, respectively. Our effective tax rate for the three months ended December 31, 2014 is higher than the federal statutory rate generally due to the impact of state and local taxes. Our effective tax rate for the three months ended December 31, 2013 was lower than the federal statutory rate generally due to the timing and mixture (foreign and domestic) of income and the partial reinvestment of foreign earnings in fiscal 2014.

35

Liquidity and Capital Resources

        NBTY's primary sources of liquidity and capital resources are cash generated from operations and funds available under its revolving credit facility. We expect that ongoing requirements for debt service and capital expenditures will be funded from these sources.

        The following table sets forth, for the periods indicated, cash balances and working capital:

	As of December 31, 2014		As of September 30, 2014
Cash and cash equivalents	$	212,047	$	139,488
Working capital (including cash and cash equivalents)	$	833,750	$	826,960

        We monitor current and anticipated future levels of cash and cash equivalents in relation to anticipated operating, investing and financing requirements. As of December 31, 2014, cash and cash equivalents of $71,523 were held by our foreign subsidiaries and are generally subject to U.S. income taxes upon repatriation to the United States. We generally repatriate all earnings from our foreign subsidiaries where permitted under local law.

        The increase in cash and cash equivalents of $72,559 at December 31, 2014 as compared to September 30, 2014 was primarily due to lower inventories and the increase in accounts payable, partially offset by lower accrued expenses.

        The increase in working capital of $6,790 at December 31, 2014 as compared to September 30, 2014 was primarily due to the increase in cash, offset by the decrease in inventory.

        The following table sets forth, for the periods indicated, net cash flows provided by (used in) operating, investing and financing activities and other operating measures:

	Three Months Ended December 31,
	2014			2013
Net cash provided by (used in) operating activities	$	133,070		$	(40,089	)
Net cash used in investing activities	$	(18,897	)	$	(21,247	)
Net cash used in financing activities	$	(39,428	)	$	(21,445	)
Inventory turnover		2.1			2.3
Days sales (Wholesale) outstanding in accounts receivable		36			35

        Net cash provided by operating activities increased for the three months ended December 31, 2014 as compared to the prior comparable period, primarily due to i) inventory fluctuations whereby the inventory levels increased in the prior comparable period to increase order fulfillment rates and have decreased in the current period and, ii) the decrease in the accounts receivable outflow due to the increase in collections from customers in the current period.

        During the three months ended December 31, 2014 and 2013, net cash used in investing activities consisted primarily of purchases of property, plant and equipment.

        For the three months ended December 31, 2014 and 2013, net cash used in financing activities primarily related to dividends paid to Alphabet Holding Company, Inc. ("Holdings").

        We expect our fiscal 2015 capital expenditures to be higher than fiscal 2014 as a result of the continued investment in our ERP systems, as well as additional investments in stores of our European Retail segment.

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Senior Secured Credit Facilities, Holdco Notes and Notes

        On October 1, 2010, NBTY entered into its senior secured credit facilities with Barclays Bank PLC, as administrative agent (the "Original Credit Agreement"). The Original Credit Agreement was amended pursuant to the First Amendment and Refinancing Agreement, dated as of March 1, 2011, and further amended pursuant to that Second Amendment Agreement, dated as of October 11, 2012.

        On March 21, 2013, NBTY, Holdings, Barclays Bank PLC, as administrative agent, and several other lenders entered into the Third Amendment and Second Refinancing Agreement and completed the Second Refinancing, amending the credit agreement governing NBTY's senior secured credit facilities pursuant to which NBTY repriced its term loan B-1 under its then existing credit agreement. Under the terms of the Second Refinancing, the $1,750,000 term loan B-1 was replaced with a new $1,507,500 (the current principal amount outstanding) term loan B-2. Borrowings under term loan B-2 and the revolving credit facility bear interest at a floating rate which can be, at NBTY's option, either (i) eurodollar (LIBOR) rate plus an applicable margin, or (ii) base rate plus an applicable margin, in each case, subject to a eurodollar (LIBOR) rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for term loan B-2 is 2.50% per annum for eurodollar (LIBOR) loans and 1.50% per annum for base rate loans. The applicable margin for the revolving credit facility remained at 3.25% per annum for eurodollar (LIBOR) loans and 2.25% per annum for base rate loans, with a step-down of 25 basis points upon the achievement of a total senior secured leverage ratio as set forth in the senior secured credit facilities. Substantially all other terms are consistent with the original term loan B-1, including the maturity dates. As a result of the Second Refinancing, $4,232 of previously capitalized deferred financing costs as well as $1,151 of the call premium on term loan B-1 were expensed and costs incurred and recorded as deferred financing costs were approximately $15,190, including $13,924 of the call premium paid on term loan B-1, and will be amortized using the effective interest method. In accordance with the provisions of the credit agreement governing the senior secured credit facilities, future scheduled payments of principal will not be required until the final balloon payment at maturity in October 2017.

        On November 20, 2014, NBTY amended its senior secured revolving credit facility, extending its maturity to September 2017 and reducing the commitment from $200,000 to $175,000. In connection with this amendment, deferred financing costs of $611 were incurred and will be amortized over the remaining period.

        NBTY must make prepayments on the term loan B-2 facility with the net cash proceeds of asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under its senior secured credit facilities unless specifically incurred to refinance a portion of its senior secured credit facilities) and 50% of excess cash flow (such percentage subject to reduction based on achievement of specified total senior secured leverage ratios), in each case, subject to certain reinvestment rights and other exceptions. NBTY is also required to make prepayments under its revolving credit facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the revolving credit facility exceeds the aggregate amount of commitments in respect of the revolving credit facility.

        In addition, the credit agreement requires the maintenance of a maximum total senior secured leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA, as defined therein, if at any time amounts are outstanding under the revolving credit facility (including swingline loans and letters of credit). As of December 31, 2014, NBTY was in compliance with all covenants under the credit agreement.

        As of December 31, 2014, there were no borrowings drawn from our $175,000 revolving credit facility and there was a letter of credit totaling $4,400, reducing the net availability to $170,600.

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Original Holdco Notes

        On October 17, 2012, Holdings issued $550,000 of the original Holdco Notes. Interest on the original Holdco Notes accrues at the rate of 7.75% per annum with respect to Cash Interest and 8.50% per annum with respect to any paid- in-kind interest. The proceeds from the offering of the original Holdco Notes, along with the $200,000 from NBTY, were used to pay transaction fees and expenses and a dividend of approximately $721,682 to Holdings' shareholders.

Additional Holdco Notes

        On December 2, 2013, Holdings launched the Consent Solicitation. The purpose of the Consent Solicitation was to amend the restricted payment covenant in the indenture governing the Holdco Notes. Holdings sought consent to add a new "basket" in the restricted payment covenant (Section 3.4 of the indenture governing the Holdco Notes) for a dividend or distribution to Holdings' shareholders up to the net proceeds of the offering of additional Holdco Notes in the aggregate principal amount of $450,000 less the amount available as of September 30, 2013 for restricted payments under the "builder" basket in Section 3.4(a)(C) of the indenture governing the Holdco Notes.

        On December 10, 2013, the requisite holders of the original Holdco Notes had consented to the Proposed Amendments and Holdings entered into the First Supplemental Indenture to the indenture governing the Holdco Notes. The First Supplemental Indenture became operative upon the payment of the consent fee by Holdings to the paying agent on behalf of the holders of the original Holdco Notes, which was paid concurrently with the closing of the offering of the additional Holdco Notes.

        On December 12, 2013, Holdings issued $450,000 of additional Holdco Notes that mature on November 1, 2017. The $450,000 of additional Holdco Notes and the $550,000 of original Holdco Notes previously issued on October 17, 2012 have identical terms and are treated as a single class for all purposes under the indenture governing the Holdco Notes. The gross proceeds from the offering of the $450,000 of additional Holdco Notes was $460,125, inclusive of a $10,125 premium, which was used to pay transaction fees and expenses, including the consent fee, and a $445,537 dividend to Holdings' shareholders in December 2013.

        Interest on the Holdco Notes is payable semi-annually in arrears on May 1 and November 1 of each year. Holdings is a holding company with no operations of its own and has no ability to service interest or principal on the Holdco Notes, other than through dividends it may receive from NBTY. NBTY is restricted, in certain circumstances, from paying dividends to Holdings by the terms of the indenture governing the Notes and the senior secured credit facilities. NBTY has not guaranteed the indebtedness of Holdings, nor pledged any of its assets as collateral and the Holdco Notes are not reflected on NBTY's balance sheet.

        Interest on the Holdco Notes is payable entirely in cash ("Cash Interest") to the extent that it is less than the maximum amount of allowable dividends and distributions, plus cash at Holdings ("Applicable Amount") as defined by the indenture governing the Holdco Notes. For any interest period after May 1, 2013 (other than the final interest period ending at stated maturity), if the Applicable Amount for such interest period will:

          (i)  equal or exceed 75%, but be less than 100%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 25% of the then outstanding principal amount of the Holdco Notes by increasing the principal amount of the outstanding Holdco Notes or by issuing other PIK notes under the indenture governing the Holdco Notes, on the same terms and conditions of the Holdco Notes, in a principal amount equal to such interest ("PIK Interest") and (b) 75% of the then outstanding principal amount of the Holdco Notes as Cash Interest;

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         (ii)  equal or exceed 50%, but be less than 75%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 50% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 50% of the then outstanding principal amount of the Holdco Notes as Cash Interest;

        (iii)  equal or exceed 25%, but be less than 50%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 75% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 25% of the then outstanding principal amount of the Holdco Notes as Cash Interest; or

        (iv)  be less than 25% of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on the Holdco Notes as PIK Interest.

        As described above, Holdings' ability to pay PIK Interest depends on the calculation of the Applicable Amount regardless of the availability of cash at Holdings. All interest payments made to date have been in cash. As of December 31, 2014, NBTY currently anticipates that it will have sufficient restricted payment capacity to enable Holdings to pay cash interest on the Holdco Notes for the current interest period; however, this may change as a result of a variety of factors. To the extent Holdings makes such interest payments in cash, NBTY will be required to provide the necessary funding.

        The indenture governing the Notes, the credit agreement and the indenture governing the Holdco Notes contain a number of covenants imposing significant restrictions on our business. These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise. The restrictions these covenants place on us include limitations on our ability to:

•

incur or guarantee additional indebtedness;

•

make certain investments;

•

pay dividends or make distributions on our capital stock;

•

sell assets, including capital stock of restricted subsidiaries;

•

agree to payment restrictions affecting our restricted subsidiaries;

•

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

•

enter into transactions with our affiliates;

•

incur liens; and

•

designate any of our subsidiaries as unrestricted subsidiaries.

        Our ability to make payments on and to refinance our indebtedness, including the Notes and Holdco Notes, will depend on our ability to generate cash in the future. We believe that our cash on hand, together with dividends from NBTY generated by NBTY's cash from operations and, if required, available borrowing capacity under the revolving portion of our senior secured credit facilities, will be sufficient for our cash requirements for the next twelve months.

        We or our affiliates, at any time and from time to time, may purchase Notes, Holdco Notes, or other indebtedness. Any such purchases may be made through the open market or privately negotiated transactions with third parties or pursuant to one or more tender or exchange offers or otherwise, upon

39

such terms and at such prices, as well as with such consideration, as we, or any of our affiliates, may determine.

EBITDA and Consolidated EBITDA

        EBITDA consists of earnings before interest expense, taxes, depreciation and amortization. Consolidated EBITDA, as defined in our senior secured credit facilities, as amended, eliminates the impact of a number of items we do not consider indicative of our ongoing operating performance. You are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis. Consolidated EBITDA is a component of certain covenants under NBTY's senior secured credit facilities. We present Consolidated EBITDA because NBTY's senior secured credit facilities provide for certain total senior secured leverage ratio thresholds calculated on a period of four consecutive fiscal quarters, with respect to Consolidated EBITDA and the senior secured debt which can be reduced by unrestricted cash-on-hand up to a maximum of $150 million during any fiscal quarter end that revolving loans or letters of credit (to the extent not cash collateralized) are outstanding or at the time of incurrence of revolving loans. The maximum senior secured leverage ratio thresholds, to the extent then applicable, are as follows: 3.75 to 1.00 in fiscal 2015; 3.50 to 1.00 in fiscal 2016 and 3.25 to 1.00 in fiscal 2017. Furthermore, we present both EBITDA and Consolidated EBITDA because we consider these items to be important supplemental measures of our performance and believe these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry with similar capital structures. We believe issuers of debt securities also present EBITDA and Consolidated EBITDA because investors, analysts and rating agencies consider it useful in measuring the ability of those issuers to meet debt service obligations. We believe that these items are appropriate supplemental measures of debt service capacity, because cash expenditures for interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; and depreciation and amortization are non-cash charges.

        The computation of NBTY's senior secured leverage ratio, to the extent then applicable, is as follows:

		December 31, 2014			December 31, 2013
Senior secured debt		$	1,507,500		$	1,507,500
Less up to $150,000 unrestricted cash balance			(150,000	)		(105,277	)
	(a)	$	1,357,500		$	1,402,223
NBTY Consolidated EBITDA (Four consecutive quarters)	(b)	$	477,070		$	541,165
Senior Secured Leverage Ratio	(a/b)		2.85x			2.59x
Maximum Allowed (per the senior secured credit facilities to the extent then applicable)			3.75x			4.00x

        EBITDA and Consolidated EBITDA have limitations as analytical tools, and should not considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

•

EBITDA and Consolidated EBITDA:

•

exclude certain tax payments that may represent a reduction in cash available to us;

•

do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•

do not reflect changes in, or cash requirements for, our working capital needs; and

40

•

do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments on our debt, including the Notes and the Holdco Notes;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Consolidated EBITDA do not reflect any cash requirements for such replacements; and

•

other companies in our industry may calculate EBITDA and Consolidated EBITDA differently than we do, limiting their usefulness as comparative measures.

        Because of these limitations, EBITDA and Consolidated EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. As a result, we rely primarily on our GAAP results and use EBITDA and Consolidated EBITDA only supplementally.

        In addition, in calculating Consolidated EBITDA, we make certain adjustments that are based on assumptions and estimates that may prove to be inaccurate.

        In addition, in evaluating Consolidated EBITDA, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of Consolidated EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

        The following table reconciles net income (loss) to EBITDA and Consolidated EBITDA (as defined in our senior secured credit facilities) for the three months ended and four consecutive quarters ended December 31, 2014 and 2013:

	Three Months Ended December 31,						Four Consecutive quarters ended December 31,
	2014			2013			2014			2013
Net income (loss)	$	38,191		$	53,821		$	(59,782	)	$	138,131
Interest expense		34,747			34,818			135,968			144,786
Provision (benefit) for income taxes		21,232			26,532			4,845			58,139
Depreciation and amortization		28,065			25,566			109,056			112,811
EBITDA		122,235			140,737			190,087			453,867
Severance costs(a)		2,773			547			9,304			19,126
Stock-based compensation(b)		732			1,620			3,200			3,297
Management fee(c)		750			750			3,000			3,000
Inventory fair value adjustment(d)		—			—			—			1,294
Consulting fees(e)		5,420			7,315			21,691			28,122
Impairments and disposals(f)		635			99			215,219			1,575
Other items(g)		8,200			(1,529	)		26,930			34,336
Pro forma cost savings(h)		8,000			11,319			31,998			45,275
Limitation on certain EBITDA adjustments(i)		(6,090	)		(12,182	)		(24,359	)		(48,727	)
Consolidated EBITDA	$	142,655		$	148,676		$	477,070		$	541,165

(a)

Reflects the exclusion of severance costs incurred at various subsidiaries of the Company. Included in the four consecutive quarters ended December 31, 2013 are workforce reduction costs of $16,752 relating to the facility restructuring.

(b)

Reflects the exclusion of non-cash expenses related to stock options.

(c)

Reflects the exclusion of the Carlyle consulting fee.

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(d)

Reflects the exclusion of the sell-through of the increased fair value of opening inventory at time of acquisition required under acquisition accounting.

(e)

Reflects the exclusion of consulting fees, as permitted in our senior secured credit facilities, for items such as business optimization consulting.

(f)

Reflects the impairment of certain assets, including the impairment of $207,334 relating to goodwill and intangible assets in our Direct Response / E-commerce and North American Retail segments in the four consecutive quarters ended December 31, 2014.

(g)

Reflects the exclusion of various items, as permitted in our senior secured credit facilities, which among other items includes: restructuring charges, business optimization expenses, ineffectiveness on certain derivative instruments, gains and losses on dispositions.

(h)

Reflects three months and four consecutive quarters of prospective savings in accordance with NBTY's senior secured credit facilities; specifically, the amount of cost savings expected to be realized from operating expense reductions and other operating improvements as a result of specified actions taken or initiated, less the amount of any actual cost savings realized during the period.

(i)

In accordance with the definition of Consolidated EBITDA under NBTY's senior secured credit facilities, this represents the limitation of certain Consolidated EBITDA adjustments such as pro forma cost savings, restructuring charges, business optimization expenses and integration costs associated with acquisitions that exceed 10% of Consolidated EBITDA for the applicable period, without giving effect to these adjustments.

(j)

Consists of selling, general and administrative costs related solely to the parent company and differences in the amount of limitation on certain EBITDA adjustments, as dictated by the NBTY senior secured credit facilities.

Off-Balance Sheet Arrangements

        See description of the Holdco Notes in the Liquidity and Capital Resources section for the off-balance sheet arrangements.

Seasonality

        Although we believe that our business is not seasonal in nature, historically we have experienced, and expect to continue to experience, variations in our net sales and operating results from quarter to quarter. The factors that influence this variability of quarterly results include general economic and industry conditions affecting consumer spending, changing consumer demands and current news on nutritional supplements, the timing of our introduction of new products, promotional program incentives offered to customers, the timing of catalog promotions, the level of consumer acceptance of new products and actions of competitors. Accordingly, a comparison of our results of operations from consecutive periods is not necessarily meaningful, and our results of operations for any period are not necessarily indicative of future performance. Additionally, we may experience higher net sales in a quarter depending upon when we have engaged in significant promotional activities.

Foreign Currency

        Approximately 35% and 33%, respectively, of our net sales during the three months ended December 31, 2014 and 2013, were denominated in currencies other than U.S. dollars, principally British pounds sterling and to a lesser extent euros, Canadian dollars and Chinese renminbi. A significant weakening of such currencies versus the U.S. dollar could have a material adverse effect on us, as this would result in a decrease in our consolidated operating results.

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        Foreign subsidiaries accounted for the following percentages of total assets and total liabilities:

	December 31, 2014			September 30, 2014
Total Assets		27	%		27	%
Total Liabilities		5	%		5	%

        In preparing the consolidated financial statements, the financial statements of the foreign subsidiaries are translated from the functional currency, generally the local currency, into U.S. dollars. This process results in exchange rate gains and losses, which are included as a separate component of Stockholder's equity under the caption "Accumulated other comprehensive income (loss)."

        During the three months ended December 31, 2014 and 2013, translation (losses) gains of ($30,306) and $12,196, respectively, were included in determining other comprehensive income (loss). Accordingly cumulative translation losses of approximately ($58,788) and ($28,481) were included as part of accumulated other comprehensive loss within the consolidated balance sheets at December 31, 2014 and September 30, 2014, respectively.

        The magnitude of these gains or losses is dependent upon movements in the exchange rates of the foreign currencies against the U.S. dollar. These currencies include the British pound sterling, the euro, the Canadian dollar and the Chinese renminbi. Any future translation gains or losses could be significantly different than those noted in each of these years.

Recent Accounting Developments

        In January 2015, the FASB issued guidance which eliminates from GAAP the concept of extraordinary items. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted, provided that adoption is applied from the beginning of the fiscal year of adoption. This guidance may be applied prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of this guidance is not expected to have an impact on our consolidated financial statements.

Critical Accounting Policies and Estimates

        We describe our significant accounting policies in Note 2 of the Notes to Consolidated Financial Statements included in our 2014 Annual Report. We discuss our critical accounting estimates in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the 2014 Annual Report. There have been no significant changes in our significant accounting policies or critical accounting estimates since September 30, 2014. As noted in the Form 10-K, relatively small declines in the future performance and cash flows within the wholesale business may result in the recognition of asset impairment charges. Certain categories within the wholesale segment are performing below expectations which increases the risk of impairment for the indefinite-lived tradenames associated with those categories. The carrying value of the tradenames associated with the wholesale business as of December 31, 2014 was approximately $435,000.

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NBTY, Inc. and Subsidiaries
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
(in thousands)

Quantitative and Qualitative Disclosures About Market Risk

        We are subject to currency fluctuations, primarily with respect to the British pound sterling, the euro, the Canadian dollar and the Chinese renminbi, and interest rate risks that arise from normal business operations. We regularly assess these risks.

        We have subsidiaries whose operations are denominated in foreign currencies (primarily the British pound sterling, the euro, the Canadian dollar and the Chinese renminbi). We consolidate the earnings of our foreign subsidiaries by translating them into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar weakens against foreign currencies, the remeasurement of these foreign currency denominated transactions results in increased net sales, operating expenses and net income. Similarly, our net sales, operating expenses and net income will decrease when the U.S. dollar strengthens against foreign currencies.

        To manage the potential exposure from adverse changes in currency exchange rates, specifically the British pound sterling, arising from our net investment in British pound sterling denominated operations, on December 16, 2010, we entered into three cross currency swap contracts to hedge a portion of the net investment in our British pound sterling denominated foreign operations. The aggregate notional amount of the swap contracts is £194,200 (approximately $300,000), with a forward rate of 1.565, and a termination date of September 30, 2017.

        Net sales denominated in foreign currencies were approximately $284,990, or 34.5%, of total net sales for the three months ended December 31, 2014. A majority of our foreign currency exposure is denominated in British pounds sterling, the euro, Canadian dollars and the Chinese renminbi. For the three months ended December 31, 2014, as compared to the prior comparable period, the British pound sterling, the euro, and the Canadian dollars decreased 7.6%, 2.2% and 8.3%, respectively, as compared to the U.S. dollar and the Chinese renminbi remained consistent as compared to the U.S. dollar. The combined effect of the changes in these currency rates resulted in a decrease of $11,049 in net sales and a decrease of $2,168 in operating income.

        Assuming NBTY's senior secured credit facilities are fully drawn, each one eighth percentage point increase or decrease in the applicable interest rates would correspondingly change our interest expense on our senior secured credit facilities by approximately $2,103 per year.

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NBTY, Inc. and Subsidiaries
Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

        Our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. We designed our disclosure controls and procedures to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure. Our chief executive officer and chief financial officer, with assistance from other members of our management, have reviewed the effectiveness of our disclosure controls and procedures as of December 31, 2014, and, based on their evaluation, have concluded that our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

        There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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NBTY, Inc. and Subsidiaries
PART II.    OTHER INFORMATION
Item 1.    Legal Proceedings

Glucosamine-Based Dietary Supplements

        Beginning in June 2011, certain putative class actions have been filed in various jurisdictions against NBTY, its subsidiary Rexall Sundown, Inc. ("Rexall"), and/or other companies as to which there may be a duty to defend and indemnify, challenging the marketing of glucosamine-based dietary supplements, under various states' consumer protection statutes. The lawsuits against NBTY and its subsidiaries are: Cardenas v. NBTY, Inc. and Rexall Sundown, Inc. (filed June 14, 2011) in the United States District Court for the Eastern District of California, on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief; Jennings v. Rexall Sundown, Inc. (filed August 22, 2011) in the United States District Court for the District of Massachusetts, on behalf of a putative class of Massachusetts consumers seeking unspecified trebled compensatory damages; and Nunez v. NBTY, Inc. et al. (filed March 1, 2013) in the United States District Court for the Southern District of California (the "Nunez Case"), on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus injunctive relief, as well as other cases in California and Illinois against certain wholesale customers as to which we may have certain indemnification obligations.

        In March 2013, NBTY agreed upon a proposed settlement with the remaining plaintiffs, which includes all cases and resolved all pending claims without any admission of or concession of liability by NBTY, and which provided for a release of all claims in return for payments to the class, together with attorneys' fees, and notice and administrative costs. Fairness Hearings took place on October 4, 2013 and November 20, 2013. On January 3, 2014, the court issued an opinion and order approving the settlement as modified (the "Order"). The final judgment was issued on January 22, 2014 (the "Judgment"). Certain objectors filed a notice of appeal of the Order and the Judgment on January 29, 2014 and the plaintiffs filed a notice of appeal on February 3, 2014. On November 19, 2014, the appellate court issued a decision granting the objectors' appeal. The appellate court reversed and remanded the matter to the district court for further proceedings consistent with the appellate court's decision.

        In fiscal 2013, NBTY recorded a provision of $12 million reflecting its best estimate of exposure for payments to the class together with attorney's fees, and notice and administrative costs in connection with this class action settlement. As a result of the court's approval of the settlement and the closure of the claims period, NBTY reduced its estimate of exposure to $6 million. This reduction in the estimated exposure was reflected in the Company's first quarter results for fiscal 2014. Until the cases are resolved, no final determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY.

Telephone Consumer Protection Act Claim

        NBTY, and certain of its subsidiaries, are defendants in a class-action lawsuit, captioned John H. Lary Jr. v. Rexall Sundown, Inc.; Rexall Sundown 3001, LLC; Rexall, Inc.; NBTY, Inc.; Corporate Mailings, Inc. d/b/a CCG Marketing Solutions ("CCG") and John Does 1-10 (originally filed October 22, 2013), brought in the United States District Court, Eastern District of New York. The plaintiff alleges that the defendants faxed advertisements to plaintiff and others without invitation or permission, in violation of the Telephone Consumer Protection Act ("TCPA").

        On May 2, 2014, NBTY and its named subsidiary defendants cross-claimed against CCG, who was a third party vendor engaged by NBTY, and CCG cross-claimed against NBTY and named subsidiary defendants on June 13, 2014. CCG brought a third party complaint against an unrelated entity,

46

Healthcare Data Experts, LLC, on June 27, 2014. On July 21, 2014, CCG filed a motion to dismiss the amended complaint and that motion is pending.

        At this time, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY, however, we do not believe the ultimate outcome will have a material adverse effect on our consolidated financial statements.

Claims in the Ordinary Course

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability, intellectual property and Proposition 65 claims) arise from time to time in the ordinary course of our business. We currently believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on of our consolidated financial statements, if adversely determined against us.

        Over the past several years, we have been served with various false advertising putative class action cases in various U.S. jurisdictions, as have various other companies in the industry. Over the past few years, the number of these cases has increased, such that at any given time we are defending several suits concerning a variety of products. These cases challenge the marketing of the subject dietary supplements under various states' consumer protection statutes and generally seek unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief. Until these cases are resolved, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on our part.

47

NBTY, Inc. and Subsidiaries
Item 1A.    Risk Factors

Risk Factors

        In addition to the other information set forth in this Report, you should carefully consider the risk factors disclosed under the caption "Risk Factors" in the 2014 Annual Report and the additional risk factors set forth below. These factors could materially adversely affect our business, financial condition, operating results and cash flows. The risks and uncertainties described in the 2014 Annual Reportand below are not the only ones we face. Risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, operating results or cash flows. Except as set forth below, there have been no significant changes relating to the risk factors described in the 2014 Annual Report.

We may be exposed to legal proceedings or actions initiated by regulators in the United States or abroad that could increase our costs and adversely affect our reputation, revenues and operating income.

        In all jurisdictions in which we operate, non-compliance with relevant legislation can result in regulators bringing administrative, civil or, in some cases, criminal proceedings. In the United States, the FTC has brought and considered bringing actions against us in the past. In China regulators have strengthened administration of regulations on dietary supplements products pending the enactment of the Food Safety Law Amendment. In the United Kingdom, it is common for regulators to prosecute retailers and manufacturers for non-compliance with legislation governing foodstuffs and medicines. In the United States, we are undergoing an audit of our compliance of unclaimed or abandoned property (escheat) laws currently for nineteen states for the years 1986 through the present. On February 2, 2015, the State of New York Office of the Attorney General sent letters to several major retailers demanding that they cease and desist selling their store brands for specific manufacturing lots of a select number of popular herbal supplements that the Attorney General alleges were inaccurately labeled. While NBTY was not a recipient of any of these cease and desist letters, we do manufacture on behalf of certain retail customers several of the private label products named in the letters. We do not believe these allegations are accurate, however, these allegations may lead to further legal proceedings or actions by regulators or third party claimants, which could have a material adverse impact on the industry overall and us in particular. Our failure to comply with applicable legislation could occur from time to time, and prosecution for any such violations could have a material adverse effect on our business, results of operations, financial condition and cash flows. See "Item 1. Business—Government Regulation" of the 2014 Annual Report for additional information.

48

NBTY, Inc. and Subsidiaries
Item 6.    Exhibits

Exhibit No.		Description
	3.1	Amended and Restated Certificate of Incorporation of NBTY, Inc. (Incorporated by reference to Exhibit 3.1 to NBTY's Registration Statement on Form S-4 (No. 333-172973) (the "Registration Statement").
	3.2	Second Amended and Restated By-Laws of NBTY, Inc. (Incorporated by reference to Exhibit 3.2 to the Registration Statement).
	10.1	Employment Agreement, dated December 5, 2014, by and among NBTY, Inc., Alphabet Holding Company, Inc. and Brian Wynne.*
	10.2	Letter Agreement, dated January 7, 2015, by and between NBTY, Inc. and Harvey Kamil*
	31.1	Rule 13a-14(a) Certification of Principal Financial Officer.*
	31.2	Rule 13a-14(a) Certification of Principal Financial Officer.*
	32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
	32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
	101.INS	XBRL Instance Document***
	101.SCH	XBRL Taxonomy Extension Schema Document***
	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document***
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document***
	101.LAB	XBRL Taxonomy Extension Label Linkbase Document***
	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document***

*

Filed herewith

**

Furnished, not filed

***

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

49

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NBTY, Inc. (Registrant)
Date: February 10, 2015	By:	/s/ STEVEN CAHILLANE Steven Cahillane Chief Executive Officer, President and Director
Date: February 10, 2015	By:	/s/ DIPAK GOLECHHA Dipak Golechha Chief Financial Officer

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EX-10.1

Exhibit 10.1

Employment Agreement

This Employment Agreement (this “Agreement”), dated as of December 5, 2014, is made by and among Alphabet Holding Company, Inc., a Delaware corporation (“Parent”), Parent’s wholly-owned subsidiary, NBTY, Inc., a Delaware corporation (together with any successor thereto, the “Company”), and Brian Wynne (“Executive”) (collectively referred to herein as the “Parties”).

RECITALS

A.It is the desire of the Company to assure itself of the services of Executive to the Company by entering into this Agreement.

B.Executive and the Company mutually desire that Executive provide services to the Company on the terms herein provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below, the Parties hereto agree as follows:

1.Employment.

(a)General.  The Company shall employ Executive and Executive shall enter the employ of the Company, for the period and in the position set forth in this Section 1, and upon the other terms and conditions herein provided.

(b)Employment Term.  The initial term of employment under this Agreement (the “Term”) shall be for the period beginning on January 1st , 2015 (the “Start Date”) and ending on the fifth anniversary thereof, subject to earlier termination as provided in Section 3.  The Term shall automatically renew for additional one (1) year periods unless no later than sixty (60) days prior to the end of the otherwise applicable Term, either party gives written notice of non-renewal (“Notice of Non-Renewal”) to the other, in which case Executive’s employment will terminate at the end of the then-applicable Term or any earlier date set by the Company in accordance with Section 3 and subject to earlier termination as provided in Section 3.

(c)Position and Duties.

(i)Executive shall serve as President NBTY, Americas and CEO of US Nutrition  of the Company and Parent with the responsibilities, duties and authority customarily associated with such position in a company the size and nature of the Company and such other responsibilities, duties and authority commensurate with such position, as may from time to time be assigned to Executive by the Chief Executive Officer of the Company (“CEO”) or the Board of Directors of Parent (the “Board”).  Executive shall report to the CEO, the Board, the Board of Directors of the Company or any committee of any such board.  Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company, and Executive shall not serve

on any corporate, industry or civic boards or committees without the prior consent of the Board; provided that Executive shall be permitted to serve on charitable boards, be involved in charitable activities and manage his passive personal and family investments so long as such activities do not materially interfere with Executive’s duties hereunder or violate any covenant contained in Section 5, 6 or 7.

(ii)Executive’s principal place of employment shall be the offices of the Company in Ronkonkoma, New York.

2.Compensation and Related Matters.

(a)Annual Base Salary.  During the Term, Executive shall receive a base salary at a rate of $550,000 per annum (as increased from time to time, the “Annual Base Salary”), which shall be paid in accordance with the customary payroll practices of the Company.  Such Annual Base Salary shall be reviewed (and may be increased, but not decreased) from time to time by the Board or an authorized committee of the Board.

(b)Annual Bonus Opportunity. For the fiscal year ending September 30, 2015 and for each full fiscal year of the Company that begins thereafter during the Term, Executive will be eligible to participate in an annual bonus program established by the Board (the “Annual Bonus”).  Executive’s Annual Bonus compensation under such bonus program shall be targeted at 75% of his Annual Base Salary, subject to adjustments between the range of 50% to 200% for under or over performance, as determined by the Board (or an authorized committee of the Board).  Unless determined otherwise by the Board (or another committee of the Board), the bonus awards payable under the incentive program shall be based on the achievement of EBITDA based performance goals to be determined by the Board (or an authorized committee of the Board).  The Annual Bonus shall be paid as soon as reasonably practicable following the end of the applicable fiscal year, but in no event shall it be paid after March 15th of the calendar year following the calendar year in which the fiscal year to which the Annual Bonus relates.

(c)Stock Option Award. Within the 60-day period following the Start Date, Executive will receive an award of stock options to purchase Common Stock (the “Options”).  The terms and conditions of the Options will be governed by Parent’s 2010 Equity Incentive Plan and the Stock Option Agreement in substantially the form attached hereto as Exhibit A.  The number of shares covered by such Options shall equal 8,500.  The Options shall have a per share exercise price equal to the fair market value per share of such Option on the date of grant, as determined by the Board.

(d)Benefits.  During the Term, Executive (and his eligible dependents) shall be eligible to participate in employee benefit plans, programs and arrangements of the Company applicable to senior-level executives (including, without limitation, profit sharing, retirement, health insurance, sick leave and other benefits) and consistent with the terms thereof, as in effect from time to time, excluding severance programs.

2

(e)Vacation.  During the Term, Executive shall be entitled to paid vacation in accordance with the Company’s vacation policies applicable to senior executives of the Company, as it may be amended from time to time; provided, however, that, in no event shall Executive be entitled to more than four (4) weeks of paid vacation annually.  Any vacation shall be taken at the reasonable and mutual convenience of the Company and Executive.

(f)Expenses.  During the Term, the Company shall reimburse Executive for all reasonable travel and other business expenses incurred by Executive in the performance of Executive’s duties to the Company in accordance with the Company’s expense reimbursement policy.

(g)Sign-On Bonus.  Executive shall receive a one-time sign-on bonus of $1,000,000 in cash (the “Sign-on Bonus”), payable within 15 days following the Start Date.  Executive agrees to reimburse the Company for the Sign-on Bonus if the Company terminates Executive’s employment for Cause or Executive resigns without Good Reason within the 12-month period following the Start Date.

(h)Key Person Insurance.  At any time during the Term, the Company shall have the right (but not the obligation) to insure the life of Executive for the Company’s sole benefit.   The Company shall have the right to determine the amount of insurance and the type of policy.  Executive shall reasonably cooperate with the Company in obtaining such insurance by submitting to reasonable physical examinations, by supplying all information reasonably required by any insurance carrier, and by executing all necessary documents reasonably required by any insurance carrier.  Executive shall incur no financial obligation by executing any required document, and shall have no interest in any such policy.

(i)Housing.  For twenty four (24) months following the Start Date, the Company agrees to provide Executive with a $3,000 per month allowance to be used towards housing expenses associated with renting a residence in Long Island, NY.  Executive agrees and understands that he shall be responsible for any imputed income or other tax liabilities associated with his receipt of this benefit. Notwithstanding the foregoing, the housing allowance will cease to be paid upon Executive’s relocation and reimbursement of relocation expenses pursuant to Section 2(j) below.

(j)Reimbursement for Relocation Expenses.  Executive shall be entitled to reimbursement for reasonable and necessary expenses incurred during the Term in connection with Executive’s relocation from Atlanta, Georgia to Long Island, New York, which reasonable and necessary expenses shall be subject to the terms of the Company’s relocation policy, attached hereto as Exhibit E.  The expenses under this Section 2(j) must be incurred by Executive during the Term, but in no event later than December 31, 2016].

(k)Transportation.  Until Executive relocates to Long Island, New York, and he is reimbursed for relocation expenses as set forth in Section 2(j) above, Executive will be entitled to (i) the use of Company’s corporate jet; or, to the extent Company’s corporate jet is not

3

available, (ii) be reimbursed for the cost of commercial air transportation, to commute from Atlanta, Georgia to Ronkonkoma, New York on a weekly basis.

3.Termination.

Executive’s employment hereunder may be terminated by the Company or Executive, as applicable, without any breach of this Agreement under the following circumstances:

(a)Circumstances.

(i)Death.  Executive’s employment hereunder shall terminate upon Executive’s death.

(ii)Disability.  If Executive has incurred a Disability, as defined below, the Company may terminate Executive’s employment while the Executive remains Disabled, provided that a Disability termination shall occur automatically in the event of a Disability pursuant to the second sentence of the definition thereof.

(iii)Termination for Cause.  The Company may terminate Executive’s employment for Cause, as defined below.

(iv)Termination without Cause.  The Company may terminate Executive’s employment without Cause.

(v)Resignation from the Company for Good Reason.  Executive may resign Executive’s employment with the Company for Good Reason, as defined below.

(vi)Resignation from the Company Without Good Reason.  Executive may resign Executive’s employment with the Company for any reason other than Good Reason or for no reason.

(vii)Non-extension of Term by the Company.  The Company may give notice of non-extension to Executive pursuant to Section 1.

(viii)Non-extension of Term by Executive.  Executive may give notice of non-extension to the Company pursuant to Section 1.

(b)Notice of Termination.  Any termination of Executive’s employment by the Company or by Executive under this Section 3 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto (i) indicating the specific termination provision in this Agreement relied upon, (ii) setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by Executive, shall be at least thirty (30) days following the date of such notice (a “Notice of Termination”); provided, however, that in the event that Executive delivers a Notice of Termination to the Company, the Company may, in its sole discretion, change the Date of Termination to any date that occurs following the date of Company’s receipt of such

4

Notice of Termination and is prior to the date specified in such Notice of Termination.  A Notice of Termination submitted by the Company may provide for a Date of Termination on the date Executive receives the Notice of Termination, or any date thereafter elected by the Company in its sole discretion, but not more than thirty (30) days after the giving of the notice without the Executive’s prior written consent.  The failure by either Party hereunder to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason (as applicable) shall not waive any right of such Party or preclude such Party from asserting such fact or circumstance in enforcing such Party’s rights hereunder.

(c)Company Obligations upon Termination (including due to death and Disability).  Upon termination of Executive’s employment pursuant to any of the circumstances listed in Section 3, Executive (or Executive’s estate) shall be entitled to receive the sum of:  (i) the portion of Executive’s Annual Base Salary earned through the Date of Termination, but not yet paid to Executive within thirty (30) days of termination; (ii) any accrued vacation owed to Executive under the Company’s vacation policy within thirty (30) days of termination; (iii) any expenses owed to Executive pursuant to Section 2(f) in accordance with such section; (iv) except in the case of a termination by the Company for Cause, the bonus earned for any completed fiscal year at the time it would otherwise have been paid if Executive continued to be employed (including as to any deferrals); and (v) any amount accrued and arising from Executive’s participation in, or benefits accrued under any employee benefit plans, programs or arrangements, which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements (collectively, the “Company Arrangements”).  Except as otherwise expressly required by law (e.g., COBRA) or as specifically provided herein, all of Executive’s rights to salary, severance, benefits, bonuses and other amounts hereunder (if any) shall cease upon the termination of Executive’s employment hereunder.  In the event that Executive’s employment is terminated by the Company for any reason, Executive’s sole and exclusive remedy with regard to the nonequity compensation for services shall be to receive the severance payments and benefits described in this Section 3(c) or Section 4, as applicable.  The foregoing shall not limit any of Executive’s rights with regard to equity (which shall be controlled by the relevant plan and grants) or any rights to indemnification, advancement of legal fees, and coverage under directors and officers liability insurance.

(d)Deemed Resignation.  Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all offices and directorships, if any, then held with the Company or any of its Affiliates.

4.Severance Payments.

(a)Termination for Cause, or Termination Upon Death, Disability, Resignation from the Company Without Good Reason, or Non-extension of Term by Executive.  If Executive’s employment shall terminate as a result of Executive’s death pursuant to Section 3(a)(i) or Disability pursuant to Section 3(a)(ii), pursuant to Section 3(a)(iii) for Cause, pursuant to Section 3(a)(vi) for Executive’s resignation

5

from the Company without Good Reason, or for no reason, or pursuant to Section 3(a)(viii) due to non-extension of the Term by Executive, Executive shall not be entitled to any severance payments or benefits, except as provided in Section 3(c).

(b)Termination without Cause, Resignation from the Company With Good Reason or Termination upon Non-Extension of the Term by the Company.  If Executive’s employment shall terminate without Cause pursuant to Section 3(a)(iv), pursuant to Section 3(a)(v) due to Executive’s resignation for Good Reason, or pursuant to Section 3(a)(vii) due to non-extension of the Term by the Company, then, subject to Executive signing on or before the 50th day following Executive’s Separation from Service (as defined below), and not revoking, a release of claims in the form attached as Exhibit B to this Agreement, and Executive’s continued compliance with Sections 5 and 6 up to the date of any such payment, subject to Section 11(l) hereof, Executive shall receive, in addition to payments and benefits set forth in Section 3(c), (1) an amount in cash equal to one times the Annual Base Salary of Executive as of the Date of Termination, payable in the form of salary continuation payments in regular installments over the twelve month period following the date of Executive’s Date of Termination in accordance with the Company’s normal payroll practices, and (2) provided that any termination of Executive’s employment occurs on or after April 1st of the fiscal year of employment termination, a pro rata bonus for such fiscal year of employment termination based on the terms of the management bonus plan for such fiscal year and paid when it would otherwise have been paid if the Executive continued to be employed (including as to any deferrals) but in no event shall it be paid later than March 15th of the fiscal year immediately following such fiscal year of employment termination.

(c)Survival.  Notwithstanding anything to the contrary in this Agreement, the provisions of Sections 5 through 9 and Section 11 will survive the termination of Executive’s employment and the expiration or termination of the Term.

5.Competition.  Executive acknowledges that the Company will provide Executive with access to its Confidential Information (as defined below). In consideration for the rights provided to Executive as set forth in this Agreement and the Company’s provision of Confidential Information to Executive, the Company and Executive agree to the following provisions against unfair competition, which Executive acknowledges represent a fair balance of the Company’s rights to protect its business and Executive’s right to pursue employment:

(a)Executive shall not, at any time during the Restriction Period, directly or indirectly engage in, have any equity interest in or manage or operate any person, firm, corporation, partnership or business (whether as director, officer, employee, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes with any part of any material portion of the Business (as defined below) of the Company.  Nothing herein shall prohibit Executive from being a passive owner of not more than 2% of the outstanding equity interest in any entity that is publicly traded, so long as Executive has no active participation in the business of such entity.  The parties acknowledge that retail outlet companies shall not be deemed competitive with the Company unless their primary business is selling products

6

competitive with those of the Company.  “Materiality” for purposes of this paragraph will be measured only at the time of Executive’s Date of Termination, provided that, if it is intended at such time for the Company to (i) acquire another entity, such target entity shall also be considered in the determination, or (ii) to enter into any other business, such other business shall also be considered in the determination so long as the Company has taken any substantial steps in furtherance of such business during the Term.

(b)Executive shall not, at any time during the Restriction Period, except in the good faith performance of his duties with the Company, directly or indirectly, recruit or otherwise solicit or induce any employee, customer, other than a customer with regard to matters that are not competitive under Section 5(a), or supplier of the Company (i) to terminate its employment or arrangement with the Company, or (ii) to otherwise change its relationship with the Company. Executive shall not, at any time during the Restriction Period, directly or indirectly, either for Executive or for any other person or entity, (x) solicit any employee of the Company to terminate his or her employment with the Company, (y) employ any such individual during his or her employment with the Company and for a period of six months after such individual terminates his or her employment with the Company or (z) solicit any vendor or business affiliate of the Company to cease to do business with the Company.  The foregoing shall not be violated by general advertising not specifically targeted at the prohibited group or by providing upon request of an employee or a former employee a reference to any entity with which Executive is not affiliated so long as Executive is not initially identifying the individual to said entity.

(c)In the event the terms of this Section 5 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.

(d)As used in this Section 5, (i) the term “Company” shall include the Parent, the Company and the Company’s direct and indirect subsidiaries, (ii) the term “Business” shall mean the business of the Company and shall include, without limitation, the manufacturing, marketing and/or retailing of vitamins, minerals and health supplements throughout the world as such business may be expanded or altered by the Company during the Term, provided, however, that the term “Business” shall not include any business of the Company materially entered into after the Executive’s termination of employment so long as the Company has not taken any substantial steps in furtherance of such business during the Term; and (iii) the term “Restriction Period” shall mean the period beginning on the Start Date and ending on the date that is twelve (12) months following the Date of Termination.

(e)Each of the Parties hereto agrees that at no time during Executive’s employment by the Company or at any time within the twelve-month period thereafter

7

shall such Party (which, in the case of the Company and Parent, shall mean their officers and the members of the Board and Board of Directors of the Company) make, or cause or assist any other person to make, with intent to damage, any public statement or other public communication which impugns or attacks, or is otherwise critical, in any material respect, of, the reputation, business or character of the other party (including, in the case of Parent, any of its directors or officers).  Notwithstanding the foregoing, nothing in this paragraph shall prevent the Company, Parent, Executive or any other person from (i) responding to incorrect, disparaging or derogatory public statements to the extent necessary to correct or refute such public statements, or (ii) making any truthful statement (A) to the extent necessary in connection with any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, (B) to the extent required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction or authority to order or require such person to disclose or make accessible such information, or (C) that is a normal comparative statement in the context of advertising, promotion or solicitation of customers, without reference to Executive’s prior relationship with the Company or Parent.

(f)Executive represents that Executive’s employment by the Company does not and will not breach any agreement with any former employer, including any non-compete agreement or any agreement to keep in confidence or refrain from using information acquired by Executive prior to Executive’s employment by the Company.  During Executive’s employment by the Company, Executive agrees that Executive will not violate any non-solicitation agreements Executive entered into with any former employer or improperly make use of, or disclose, any information or trade secrets of any former employer or other third party, nor will Executive bring onto the premises of the Company or use any unpublished documents or any property belonging to any former employer or other third party, in violation of any lawful agreements with that former employer or third party.  The Company represents that it will not require or request Executive to breach any agreement with any former employer as to non-competition, non-solicitation, confidentiality or restrictions of similar nature that it is made aware of by Executive.

6.Nondisclosure of Proprietary Information.

(a)Except in connection with the good faith performance of Executive’s duties hereunder or pursuant to Sections 6(c) and (e), Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for Executive’s benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets of or relating to the Company (including, without limitation, business plans, business strategies and methods, acquisition targets, intellectual property in the form of patents, trademarks and copyrights and applications therefor, ideas, inventions, works, discoveries, improvements, information, documents, formulae, practices, processes, methods, developments, source code, modifications, technology, techniques, data, programs, other know-how or materials, owned, developed or possessed by the

8

Company, whether in tangible or intangible form, information with respect to the Company’s operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, prospects and compensation paid to employees or other terms of employment) (collectively, the “Confidential Information”), or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such Confidential Information.  The Parties hereby stipulate and agree that, as between them, any item of Confidential Information is important, material and confidential and affects the successful conduct of the businesses of the Company (and any successor or assignee of the Company).  Notwithstanding the foregoing, Confidential Information shall not include any information that has been published in a form generally available to the public prior to the date Executive proposes to disclose or use such information, provided, that such publishing of the Confidential Information shall not have resulted from Executive directly or indirectly breaching Executive’s obligations under this Section 6(a) or any other similar provision by which Executive is bound.  For the purposes of the previous sentence, Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination.

(b)Upon termination of Executive’s employment with the Company for any reason, Executive will promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents or property of the Company or concerning the Company’s customers, business plans, marketing strategies, products, property or processes.  Executive may retain and utilize his rolodex and similar address books (hard copy or electronic) containing only contact information.

(c)Executive may respond to a lawful and valid subpoena or other legal process but (i) shall give the Company prompt notice thereof, (ii) upon request of the Company, shall make available to the Company and its counsel the documents and other information sought, as much in advance of the due date thereof as reasonably possible, and (iii) shall reasonably assist such counsel at the Company’s expense in resisting or otherwise responding to such process.

(d)As used in this Section 6 and Section 7, the term “Company” shall include the Company and its direct and indirect subsidiaries and the Parent.

(e)Nothing in this Agreement shall prohibit Executive from (i) disclosing information and documents when required by law, subpoena or court order (subject to the requirements of Section 6(c) above), (ii) disclosing information and documents to Executive’s attorney or tax adviser for the purpose of securing legal or tax advice or to governmental taxing authorities, (iii) disclosing Executive’s post-employment restrictions in this Agreement or elsewhere in confidence to any potential new employer, or (iv) retaining, at any time, Executive’s personal correspondence,

9

Executive’s personal contacts and documents related to Executive’s own personal benefits, entitlements and obligations.

(f)No equity plan or grant or other arrangement shall have any restrictive covenants or forfeiture provisions applicable to Executive that relate to the same type of limitations that are covered by Sections 5 and 6 hereof that are any broader than the related provisions in Sections 5 and 6.

7.Inventions.

All rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) related to the business of the Company, whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that Executive may discover, invent or originate during the Term, either alone or with others and whether or not during working hours or by the use of the facilities of the Company (“Inventions”), shall be the exclusive property of the Company.  Executive shall promptly disclose all Inventions to the Company, shall execute at the request of the Company, and at its expense, any assignments or other documents the Company may deem reasonably necessary to protect or perfect its rights therein, and shall reasonably assist the Company, upon reasonable request and at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein. Executive hereby appoints the Company as Executive’s attorney-in-fact to execute on Executive’s behalf any assignments or other documents reasonably deemed necessary by the Company to protect or perfect its rights to any Inventions.

8.Injunctive Relief.

It is recognized and acknowledged by Executive that a breach of the covenants contained in Sections 5, 6 and 7 will cause irreparable damage to the Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate.  Accordingly, Executive agrees that in the event of a breach of any of the covenants contained in Sections 5, 6 and 7, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief.

9.Assignment and Successors.

The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise), and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Company and its Affiliates, provided that the assignee delivers to Executive a written assumption of the obligations hereunder.  The Company’s rights and obligations may not otherwise be assigned hereunder.  This Agreement shall be binding upon and inure to the benefit of the Company, Parent, Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.  None of Executive’s rights or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only by will or operation of law.  Notwithstanding the foregoing, Executive shall be entitled, to the

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extent permitted under applicable law and applicable Company Arrangements, to select and change a beneficiary or beneficiaries to receive compensation hereunder following Executive’s death by giving written notice thereof to the Company.

10.Certain Definitions.

(a)Affiliate.  “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended; provided, that, with respect to the Company, “Affiliate” shall not include any Principal Stockholder or any portfolio companies of the relevant Principal Stockholder.

(b)Cause.  The Company shall have “Cause” to terminate Executive’s employment hereunder upon:

(i)The Executive’s willful misconduct with regard to the Company that results in a significant adverse impact on the Company; provided that no act or failure to act on Executive’s part will be considered “willful” unless done, or omitted to be done, by Executive not in good faith or without reasonable belief that his action or omission was in the best interests of the Company;

(ii)The Executive being indicted for, convicted of, or pleading nolo contendere to, a felony or intentional crime involving material dishonesty other than, in any case, vicarious liability or traffic violations;

(iii)The Executive’s conduct involving the use of illegal drugs;

(iv)The Executive’s failure to attempt in good faith (other than when absent because of physical or mental incapacity) to follow a lawful directive of the Board within ten (10) days after written notice of such failure; and/or

(v)The Executive’s breach of any provision contained in Sections 5 through 7, which continues beyond ten (10) days after written demand for substantial performance is delivered to Executive by the Company (to the extent that, in the reasonable judgment of the Board, such breach can be cured by Executive), so long as the breach (which shall be deemed to refer to all breaches in this paragraph) is (A) material and (B) results in a significant adverse impact on the Company.

The Executive shall not be terminated for “Cause” unless reasonable notice is provided to Executive and Executive is given an opportunity, together with counsel, to be heard before the Board, and thereafter whether or not an event giving rise to “Cause” has occurred will be determined by the Board reasonably and in good faith; provided that any such determination by the Board shall be subject to de novo review by the arbitrator pursuant to Section 11(i) based on the facts thereof.

(b)Common Stock.  “Common Stock” shall mean the non-voting common stock of Parent.

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(c)Date of Termination.  “Date of Termination” shall mean (i) if Executive’s employment is terminated by Executive’s death, the date of Executive’s death; (ii) if Executive’s employment is terminated pursuant to Section 3(a)(ii) — (vi) either the date indicated in the Notice of Termination or the date specified by the Company pursuant to Section 3(b), whichever is earlier; (iii) if Executive’s employment is terminated pursuant to Section 3(a)(vii) or Section 3(a)(viii), the expiration of the then-applicable Term.

(d)Disability.  “Disability” shall have occurred when the Executive has been unable to perform his material duties because of physical or mental incapacity for a period of at least 180 days in any 365 day period, as determined by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative, with such agreement as to acceptability not to be unreasonably withheld or delayed.  Notwithstanding the foregoing, a Disability termination shall be deemed to occur earlier if, as a result of physical or mental incapacity, Executive experiences a “separation from service” within the meaning of Section 409A.

(e)Good Reason.  Executive shall have “Good Reason” to resign his employment within ninety (90) days after the occurrence of any of the following without his prior written consent:

(i)A material diminution in the nature or scope of Executive’s responsibilities, duties or authority;

(ii)The Company’s or Parent’s material breach of this Agreement or other agreements with Executive which results in a significant adverse impact upon Executive;

(iii)The relocation by the Company of Executive’s primary place of employment with the Company by more than 50 miles from Ronkonkoma, New York;

(iv)The failure of the Company to obtain the assumption in writing delivered to Executive of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company; or

(v)The failure of the Company to timely pay to Executive any significant amounts due under the terms of this Agreement;

in any case of the foregoing, that remains uncured after ten (10) business days after Executive has provided the Company written notice that Executive believes in good faith that such event giving rise to such claim of Good Reason has occurred.

(f)Person.  “Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature.

(g)Principal Stockholders.  “Principal Stockholders” shall mean (i) Carlyle Partners V, L.P., a Delaware limited partnership, Carlyle Partners V-A, L.P., a Delaware limited partnership, CP V Coinvestment A, L.P., a Delaware limited

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partnership, CP V Coinvestment B, L.P., a Delaware limited partnership, and CEP III Participations, SARL SICAR, and (ii) any of their Affiliates to which (a) any of the Principal Stockholders transfers Common Stock or (b) Parent issues Common Stock.

11.Miscellaneous Provisions.

(a)Governing Law.  This Agreement shall be governed, construed, interpreted and enforced in accordance with its express terms, and otherwise in accordance with the substantive laws of the State of New York without reference to the principles of conflicts of law of the State of New York or any other jurisdiction, and where applicable, the laws of the United States.

(b)Validity.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

(c)Notices.  Any notice, request, claim, demand, document and other communication hereunder to any Party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile or certified or registered mail, postage prepaid, as follows:

(i)If to the Company:

NBTY, Inc.
2100 Smithtown Avenue
Ronkonkoma, NY 11779
Attention:  General Counsel
Facsimile: (631) 567-7148

and copies to:

The Carlyle Group

520 Madison Avenue

New York, NY 10022

Attention: Sandra Horbach

Elliot Wagner

Facsimile: (212) 813-4901

(ii)If to Executive, at the last address that the Company has in its personnel records for Executive.

or at any other address as any Party shall have specified by notice in writing to the other Parties hereto.

(d)Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together

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will constitute one and the same Agreement.  Signatures delivered by facsimile shall be deemed effective for all purposes.

(e)Entire Agreement.  This Agreement shall become effective as of the Start Date, subject to Executive’s commencement of employment on such date.  As of the Start Date, the terms of this Agreement are intended by the Parties to be the final expression of their agreement with respect to the employment of Executive by the Company and supersede all prior understandings and agreements, whether written or oral.  The Parties further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

(f)Amendments; Waivers.  This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by Executive, a duly authorized officer of the Company and a duly authorized officer of Parent.  By an instrument in writing similarly executed, Executive, a duly authorized officer of the Company, or a duly authorized officer of Parent may waive compliance by the other Parties hereto with any specifically identified provision of this Agreement that each such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure.  No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

(g)No Inconsistent Actions.  The Parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement.  Furthermore, it is the intent of the Parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.

(h)Construction.  This Agreement shall be deemed drafted equally by all the Parties. Its language shall be construed as a whole and according to its fair meaning.  Any presumption or principle that the language is to be construed against any Party shall not apply.  The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation.  Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary.  Also, unless the context clearly indicates to the contrary, (a) the plural includes the singular and the singular includes the plural; (b) “and” and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”; (d) “includes” and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require.

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(i)Arbitration.  Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before an arbitrator in New York, New York, in accordance with the rules of the American Arbitration Association then in effect.  Judgment may be entered on the arbitration award in any court having jurisdiction; provided, however, that the Company or Executive shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Section 5, 6 or 7 of the Agreement, as applicable, and the Company, Parent and Executive hereby consent that such restraining order or injunction may be granted without requiring the Company to post a bond.  Only individuals who are (a) lawyers engaged full-time in the practice of law, as in-house counsel, as a judge or as a professor of law; and (b) on the AAA register of arbitrators shall be selected as an arbitrator.  Within twenty (20) days of the conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law.  It is mutually agreed that the written decision of the arbitrator shall be valid, binding, final and non-appealable; provided however, that the Parties hereto agree that the arbitrator shall not be empowered to award punitive damages against any party to such arbitration.  In the event that an action is brought to enforce the provisions of this Agreement pursuant to this paragraph, (x) if the arbitrator determines that Executive is the prevailing party in such action, the Company shall be required to pay the arbitrator’s full fees and expenses (but not the Executive’s legal fees), (y) if the Company (or Parent) prevails in such action, Executive shall be required to pay the arbitrator’s full fees and expenses (but not the Company’s or the Parent’s legal fees) and (z) if, in the opinion of the arbitrator deciding such action, there is no prevailing party, each party shall pay his or its own attorney’s fees and expenses and the arbitrator’s fees and expenses will be borne equally by the Parties thereto.

(j)Enforcement.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the Term, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

(k)Withholding.  The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges which the Company is required to withhold. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

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(l)Section 409A.

(i)General.  The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.

(ii)Separation from Service.  Notwithstanding anything in this Agreement to the contrary, any compensation or benefits payable under this Agreement that is designated under this Agreement as payable upon Executive’s termination of employment shall be payable only upon Executive’s “separation from service” with the Company within the meaning of Section 409A (a “Separation from Service”) and, except as provided below, any such compensation or benefits shall not be paid, or, in the case of installments, shall not commence payment, until the sixtieth (60th) day following Executive’s Separation from Service.  Any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s Separation from Service but for the preceding sentence shall be paid to Executive on the sixtieth (60th) day following Executive’s Separation from Service and the remaining payments shall be made as provided in this Agreement.

(iii)Specified Employee.  Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation from Service with the Company or (ii) the date of Executive’s death.  Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or to Executive’s estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.  Any tax gross up payment, within the meaning of Section 409A, provided for in this Agreement shall be made by the end of the Executive’s taxable year next following the Executive’s taxable year in which the Executive remits the related taxes, provided that, Executive provides the Company with a reimbursement request reasonably promptly following the date such tax is due.

(iii)Expense Reimbursements.  To the extent that any reimbursements under this Agreement are subject to Section 409A, any such reimbursements payable to Executive shall be paid to Executive no later than December 31 of the year following the year in which the expense was incurred; provided, that Executive submits Executive’s reimbursement request reasonably promptly following the date the expense is incurred, the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during one taxable year shall not affect the amount eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; provided however, that the foregoing shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related

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to the period the arrangement is in effect.  Executive’s right to reimbursement, or in-kind benefits, under this Agreement will not be subject to liquidation or exchange for another benefit.

(v)Installments.  Executive’s right to receive any installment payments under this Agreement, including without limitation any salary continuation payments that are payable on Company payroll dates, shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment as permitted under Section 409A.  To the extent any deferred compensation is intended to comply with and be subject to Section 409A (as opposed to any exception thereto), the Company may accelerate any such deferred compensation as long as such acceleration would not result in additional tax or interest pursuant to Section 409A and as long as such acceleration is permitted by Section 409A.  The decision as to when to make any payment within any specified time period shall solely be that of the Company.

(m)Indemnification.  Executive shall receive indemnification protection pursuant to the indemnification agreements attached hereto as Exhibits C and D.

(n)No Mitigation; No Offset.  The Executive shall not be required to seek other employment or otherwise mitigate the amount of any payments to be made by the Company pursuant to this Agreement. The payments provided pursuant to this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer after the Date of Termination or otherwise. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others.

(o)Joint and Several Liability.  The Company and the Parent shall be jointly and severally liable for all obligations of each hereunder.

12.Section 280G

(a)So long as the Company is described in Section 280G(b)(5)(A)(ii)(I) of the Code, if any payment or benefit (within the meaning of Section 280G(b)(2) of the Code), to the Executive or for the Executive’s benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, the Executive’s employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, to the extent, if any, Executive elects to waive the right to receive such payments or benefits unless shareholder approval is obtained in accordance with Section 280G(b)(5)(B) of the Code, the Company shall use its commercially reasonable best efforts to prepare and deliver to its stockholders the disclosure required by Section 280G(b)(5)(B) of the Code with respect to the Payments and to

17

obtain the approval of the Company’s stockholders in accordance with Section 280G(b)(5)(B) of the Code and the regulation codified at 26 C.F.R. §1.280G-1.

(b)In the event that (i) the Executive is entitled to receive any payments or benefits, whether payable, distributed or distributable pursuant to the terms of this Agreement or otherwise, that constitute “excess parachute payments” within the meaning of Section 280G of the Code, and (ii) the net after tax amount of such payments, after the Executive has paid all taxes due thereon (including, without limitation, taxes due under Section 4999 of the Code) is less than the net after-tax amount of all such payments and benefits otherwise due to the Executive in the aggregate, if such aggregate payments and benefits were reduced to an amount equal to 2.99 times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code), then the aggregate amount of such payments and benefits payable to Executive shall be reduced to an amount that will equal 2.99 times the Executive’s base amount.  To the extent such aggregate parachute payment amounts are required to be so reduced, the parachute payment amounts due to the Executive (but no non -parachute payment amounts) shall be reduced in the following order: (i) payments and benefits due under Section 4 of this Agreement shall be reduced (if necessary, to zero) with amounts that are payable last reduced first; (ii) payments and benefits due in respect of any equity fully valued (or only reduced by a present value factor) for purpose of the calculation to be made under Section 280G calculation of the Code for purposes of this Section 12 (the “280G Calculation”) in reverse order of when payable; and (iii) payments and benefits due in respect of any options or stock appreciation rights with regard to Common Stock or equity securities valued under the 280G Calculation based on time of vesting shall be reduced in an order that is most beneficial to the Executive.

(c)The determinations to be made with respect to this Section 12 shall be made by a certified public accounting firm designated by the Company and reasonably acceptable to the Executive.  The Company shall be responsible for all charges of the Accountant.

(d)In the event that the Internal Revenue Service or court ultimately makes a determination that the excess parachute payments or the base amount is an amount other than as determined initially, an appropriate adjustment shall be made with regard to Section 12(a) or (b) above, as applicable to reflect the final determination and the resulting impact.

(e)The provisions of Sections 12(b), (c) and (d) shall override provisions as to cutback below the 2.99 level in any equity plan or grant or any other arrangement.

13.Employee Acknowledgement.

Executive acknowledges that Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.

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[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date and year first above written.

COMPANY
By:	/s/ Karla Packer
	Name:	Karla Packer
	Title:	SVP Human Resources
PARENT
By:	/s/ Karla Packer
	Name:	Karla Packer
	Title:	SVP Human Resources
EXECUTIVE
By:	/s/ Brian Wynne
	Brian Wynne

[Signature Page to Brian Wynne Employment Agreement]

EXHIBIT A

Form of Stock Option Agreement

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EXHIBIT B

Form of Release

This Agreement and Release (“Agreement”) is made by and among Alphabet Holding Company, Inc., a Delaware corporation (“Parent”), Parent’s wholly-owned subsidiary, NBTY, Inc., a Delaware corporation (together with any successor thereto, the “Company”), and Brian Wynne (the “Employee”) (collectively, referred to as the “Parties” or individually referred to as a “Party”).  Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Employment Agreement (as defined below).

WHEREAS, the Parties have previously entered into that certain Employment Agreement, dated as of                             , 2014 (the “Employment Agreement”); and

WHEREAS, in connection with Employee’s termination of employment with the Company or a subsidiary or affiliate of the Company effective                 , 20    , the Parties wish to resolve any and all disputes, claims, complaints, grievances, charges, actions, petitions, and demands that Employee may have against the Company, Parent, and any of the Releasees as defined below, including, but not limited to, any and all claims arising out of or in any way related to Employee’s employment with or separation from the Company or its subsidiaries or affiliates.

NOW, THEREFORE, in consideration of the Severance Payments described in Section 4 of the Employment Agreement, which, pursuant to the Employment Agreement, are conditioned on Employee’s execution and non-revocation of this Agreement, and in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

1.             Severance Payments; Salary and Benefits.  The Company agrees to provide Employee with the severance payments and benefits described in Section 4(b) of the Employment Agreement, payable at the times set forth in, and subject to the terms and conditions of, the Employment Agreement. In addition, to the extent not already paid, and subject to the terms and conditions of the Employment Agreement, the Company shall pay or provide to Employee all other payments or benefits described in Section 3(c) of the Employment Agreement, subject to and in accordance with the terms thereof.

2.             Release of Claims.  Employee agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Employee by the Company, Parent, any of their direct or indirect subsidiaries and affiliates (including, without limitation, TC Group, L.L.C. and its affiliated entities), and, in their capacities related to the foregoing, any of their current and former officers, directors, equity holders, managers, employees, agents, investors, attorneys, shareholders, administrators, affiliates, benefit plans, plan administrators, insurers, trustees, divisions, and subsidiaries and predecessor and successor corporations and assigns (collectively, the “Releasees”).  Employee, on his own behalf and on behalf of any of Employee’s affiliated companies or entities and any of their respective heirs, family members, executors, agents, and assigns, hereby and forever releases the Releasees from, and agrees not to sue concerning, or in any manner to institute, prosecute, or pursue, any claim, complaint, charge, duty, obligation, or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that Employee may possess against any of the Releasees

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arising from any omissions, acts, facts, or damages that have occurred up until and including the Effective Date of this Agreement (as defined in Section 7 below), including, without limitation:

(a)           any and all claims relating to or arising from Employee’s employment  or service relationship with the Company or any of its direct or indirect subsidiaries or affiliates and the termination of that relationship;

(b)           any and all claims relating to, or arising from, Employee’s right to purchase, or actual purchase of any shares of stock or other equity interests of the Company or any of its affiliates, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

(c)           any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination; harassment; retaliation; breach of contract, both express and implied; breach of covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; fraud; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; conversion; and disability benefits;

(d)           any and all claims for violation of any federal, state, or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act; the Fair Credit Reporting Act; the Age Discrimination in Employment Act of 1967; the Older Workers Benefit Protection Act; the Employee Retirement Income Security Act of 1974; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the New York City Human Rights Law;

(e)           any and all claims for violation of the federal or any state constitution;

(f)            any and all claims arising out of any other laws and regulations relating to employment or employment discrimination;

(g)           any claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Employee as a result of this Agreement; and

(h)           any and all claims for attorneys’ fees and costs.

Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released.  This release does not release claims that cannot be released as a matter of law, including, but not limited to, Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment, against the Company (with

23

the understanding that Employee’s release of claims herein bars Employee from recovering such monetary relief from the Company or any Releasee), claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law, claims to continued participation in certain of the Company’s group benefit plans pursuant to the terms and conditions of COBRA, claims to any benefit entitlements vested as the date of separation of Employee’s employment, rights with regard to any vested equity (including under any stockholders agreement governing such equity and any side letter relating thereto), and any rights to indemnity and coverage under the Company’s directors and officers insurance policies.

3.             Acknowledgment of Waiver of Claims under ADEA.  Employee understands and acknowledges that he is waiving and releasing any rights he may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and release is knowing and voluntary.  Employee understands and agrees that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement.  Employee understands and acknowledges that the consideration given for this waiver and release is in addition to anything of value to which Employee was already entitled.  Employee further understands and acknowledges that he has been advised by this writing that:  (a) he should consult with an attorney prior to executing this Agreement; (b) he has at least 21 days within which to consider this Agreement; (c) he has 7 days following his execution of this Agreement to revoke this Agreement; (d) this Agreement shall not be effective until after the revocation period has expired; and (e) nothing in this Agreement prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law.  In the event Employee signs this Agreement and returns it to the Company in less than the 21-day period identified above, Employee hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement.

4.             Severability.  In the event that any provision or any portion of any provision hereof or any surviving agreement made a part hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement shall continue in full force and effect without said provision or portion of provision.

5.             No Oral Modification.  This Agreement may only be amended in a writing signed by Employee, a duly authorized officer of the Company and a duly authorized officer of Parent.

6.             Governing Law; Dispute Resolution.  This Agreement shall be subject to the provisions of Sections 11(a) and 11(i) of the Employment Agreement.

7.             Effective Date.  If Employee has attained or is over the age of 40 as of the date of Employee’s termination of employment, then the Employee has seven days after he signs this Agreement to revoke it and this Agreement will become effective on the eighth day after Employee signed this Agreement, so long as it has been signed by the Parties and has not been revoked by the Employee before that date (the “Effective Date”).

8.             Voluntary Execution of Agreement.  Employee understands and agrees that he executed this Agreement voluntarily, without any duress or undue influence on the part or behalf

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of the Company, Parent or any third party, with the full intent of releasing all of his claims against the Company, Parent and any of the other Releasees.  Employee acknowledges that:  (a) he has read this Agreement; (b) he has not relied upon any representations or statements made by the Company or Parent that are not specifically set forth in this Agreement; (c) he has been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of his own choice or has elected not to retain legal counsel; (d) he understands the terms and consequences of this Agreement and of the releases it contains; and (e) he is fully aware of the legal and binding effect of this Agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

Dated:	COMPANY (or any successor thereto)
	By:
	Name:
	Title:

Dated:	PARENT (or any successor thereto)
	By:
	Name:
	Title:

Dated:	EXECUTIVE
	By:
	Name:	Brian Wynne

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EXHIBIT C

Form of Company Indemnification Agreement

26

EXHIBIT D

Form of Parent Indemnification Agreement

27

EXHIBIT E

Relocation Policy for NBTY

28

EX-10.2

Exhibit 10.2

Amendment to

Letter Agreement

This Amendment, dated January 7, 2015 (this “Amendment”), amends and supplements the Letter Agreement, dated May 11, 2011 (the “Original Agreement”), by and between NBTY, Inc., a Delaware corporation with principal offices at 2100 Smithtown Avenue, Ronkonkoma, New York 11779 (“NBTY”), and Harvey Kamil, residing at 2500 S Ocean Blvd. Boca Raton FL 33432.   Capitalized terms used herein and not otherwise defined have the meanings set forth in the Original Agreement.

In consideration of the above premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged the parties agree that:

1.               Amendment. Mr. Kamil’s total annual compensation of $624,600 for performing the Services under the Original Agreement shall be reduced to $500,000 effective December 1, 2014; it being understood and agreed that Mr. Kamil would not be eligible to receive any bonus compensation for performing the Services.

2.              Ratification.  Except as expressly stated in this Amendment, the parties hereby ratify all terms and conditions of the Original Agreement, which will remain unchanged and in full force and effect.

3.              Counterparts.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered will be an original, but such counterparts will constitute one and the same instrument.

In Witness Whereof, the parties hereto have executed this Amendment as of the date and year first above written.

NBTY, Inc.
By:	/s/ Karla Packer
Name: Karla Packer
Title: SVP Human Resources
Harvey Kamil
	/s/ Harvey Kamil

EX-31.1

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Exhibit 31.1

CERTIFICATIONS

I, Steven Cahillane, certify that:

1.

I have reviewed this report on Form 10-Q of NBTY, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and to the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: February 10, 2015

/s/ STEVEN CAHILLANE

Steven Cahillane

Principal Executive Officer

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Exhibit 31.1

CERTIFICATIONS

EX-31.2

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Exhibit 31.2

CERTIFICATIONS

I, Dipak Golechha, certify that:

1.

I have reviewed this report on Form 10-Q of NBTY, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and to the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: February 10, 2015

/s/ DIPAK GOLECHHA
Dipak Golechha
Principal Financial Officer

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Exhibit 31.2

CERTIFICATIONS

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of NBTY, Inc. (the "Company") on Form 10-Q for the quarter ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven Cahillane, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

        (1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

        (2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 10, 2015

Signature:

/s/ STEVEN CAHILLANE

Steven Cahillane

Chief Executive Officer

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

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Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Quarterly Report of NBTY, Inc. (the "Company") on Form 10-Q for the quarter ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Dipak Golechha, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge and belief:

        (1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

        (2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: February 10, 2015

Signature:

/s/ DIPAK GOLECHHA

Dipak Golechha

Chief Financial Officer

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Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

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Fair Value of Financial Instruments (Details 5) (USD $) In Thousands, unless otherwise specified	Mar. 21, 2013	Oct. 01, 2010	Oct. 17, 2012	Dec. 12, 2013	Dec. 31, 2014
Term loan B-2
Fair value measurements
Face value of debt instrument	$ 1,507,500
Notes
Fair value measurements
Face value of debt instrument		650,000
Holdco Notes
Fair value measurements
Face value of debt instrument			550,000
Parent Company | Holdco Notes
Fair value measurements
Face value of debt instrument			550,000	450,000
Level 2 | Term loan B-2
Fair value measurements
Face value of debt instrument					1,507,500
Level 2 | Notes
Fair value measurements
Fair value of Notes					$ 646

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Condensed Consolidating Financial Statements of Guarantors (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss)
Net sales	$ 825,771	$ 827,105
Costs and expenses:
Cost of sales	445,180	441,718
Advertising, promotion and catalog	46,894	38,522
Selling, general and administrative	238,172	232,684
Total costs and expenses	730,246	712,924
Income from operations	95,525	114,181
Other income (expense):
Interest	(34,747)	(34,818)
Miscellaneous, net	(1,355)	990
Total other income (expense)	(36,102)	(33,828)
Income from operations before income taxes	59,423	80,353
Provision for income taxes	21,232	26,532
Net income	38,191	53,821
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax	(30,306)	12,196
Change in fair value of interest rate swaps, net of tax	721	1,085
Total other comprehensive (loss) income, net of tax	(29,585)	13,281
Comprehensive income	8,606	67,102
Reportable Legal Entities | Parent Company
Costs and expenses:
Selling, general and administrative	22,890	22,273
Total costs and expenses	22,890	22,273
Income from operations	(22,890)	(22,273)
Other income (expense):
Intercompany interest	39,809	39,708
Interest	(34,781)	(34,798)
Miscellaneous, net	(1,746)	910
Total other income (expense)	3,282	5,820
Income from operations before income taxes	(19,608)	(16,453)
Provision for income taxes	(1,166)	(5,369)
Equity in income of subsidiaries	56,633	64,905
Net income	38,191	53,821
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax	(30,306)	12,196
Change in fair value of interest rate swaps, net of tax	721	1,085
Total other comprehensive (loss) income, net of tax	(29,585)	13,281
Comprehensive income	8,606	67,102
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss)
Net sales	557,361	571,066
Costs and expenses:
Cost of sales	338,946	341,868
Advertising, promotion and catalog	34,947	29,114
Selling, general and administrative	114,937	116,880
Total costs and expenses	488,830	487,862
Income from operations	68,531	83,204
Other income (expense):
Intercompany interest	(34,781)	(34,798)
Interest	65
Miscellaneous, net	(843)	951
Total other income (expense)	(35,559)	(33,847)
Income from operations before income taxes	32,972	49,357
Provision for income taxes	12,035	18,615
Equity in income of subsidiaries	6,333	6,166
Net income	27,270	36,908
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax	(5,681)	2,205
Change in fair value of interest rate swaps, net of tax	721	1,085
Total other comprehensive (loss) income, net of tax	(4,960)	3,290
Comprehensive income	22,310	40,198
Reportable Legal Entities | Guarantor Subsidiaries | Adjustments
Other income (expense):
Net income		6,166
Reportable Legal Entities | Non-Guarantor Subsidiaries
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss)
Net sales	289,017	285,141
Costs and expenses:
Cost of sales	126,841	128,952
Advertising, promotion and catalog	11,947	9,408
Selling, general and administrative	100,345	93,531
Total costs and expenses	239,133	231,891
Income from operations	49,884	53,250
Other income (expense):
Intercompany interest	(5,028)	(4,910)
Interest	(31)	(20)
Miscellaneous, net	1,234	(871)
Total other income (expense)	(3,825)	(5,801)
Income from operations before income taxes	46,059	47,449
Provision for income taxes	10,363	13,286
Net income	35,696	34,163
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax	(30,447)	9,915
Total other comprehensive (loss) income, net of tax	(30,447)	9,915
Comprehensive income	5,249	44,078
Eliminations
Condensed Parent Company Statements of Operations and Comprehensive Income (Loss)
Net sales	(20,607)	(29,102)
Costs and expenses:
Cost of sales	(20,607)	(29,102)
Total costs and expenses	(20,607)	(29,102)
Other income (expense):
Equity in income of subsidiaries	(62,966)	(71,071)
Net income	(62,966)	(71,071)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax	36,128	(12,120)
Change in fair value of interest rate swaps, net of tax	(721)	(1,085)
Total other comprehensive (loss) income, net of tax	35,407	(13,205)
Comprehensive income	(27,559)	(84,276)
Eliminations | Adjustments
Other income (expense):
Net income		$ (6,166)

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Segment Information (Details 2) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014
Total assets by segment
Consolidated assets	$ 4,850,846	$ 4,877,722
Reportable Business Segments
Total assets by segment
Consolidated assets	4,062,199	4,149,163
Corporate/Manufacturing
Total assets by segment
Consolidated assets	788,647	728,559
Wholesale segment | Reportable Business Segments
Total assets by segment
Consolidated assets	2,523,828	2,581,069
European Retail | Reportable Business Segments
Total assets by segment
Consolidated assets	918,555	948,010
Direct Response / E-Commerce | Reportable Business Segments
Total assets by segment
Consolidated assets	512,527	512,642
North American Retail | Reportable Business Segments
Total assets by segment
Consolidated assets	$ 107,289	$ 107,442

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Goodwill and Intangible Assets (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Goodwill and Intangible Assets
Aggregate amortization expense of definite lived intangible assets	$ 11,358	$ 11,603
Estimated amortization expense
2015	45,000
2016	45,000
2017	45,000
2018	45,000
2019	$ 45,000

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Income (Loss).

Schedule of additions to and reclassifications out of accumulated other comprehensive income (loss)

	Three Months Ended December 31, 2014(1)
	Foreign currency translation adjustments			Gains and losses on cash flow hedges			Total
Balance at September 30, 2014	$	(28,482	)	$	(721	)	$	(29,203	)
Other comprehensive income (loss) before reclassifications		(30,306	)		(438	)		(30,744	)
Amounts reclassified from accumulated other comprehensive income (loss)(2)		—			1,159			1,159
Balance at December 31, 2014	$	(58,788	)	$	—		$	(58,788	)

	Three Months Ended December 31, 2013(1)
	Foreign currency translation adjustments			Gains and losses on cash flow hedges			Total
Balance at September 30, 2013	$	(9,681	)	$	(3,902	)	$	(13,583	)
Other comprehensive income (loss) before reclassifications		12,196			(783	)		11,413
Amounts reclassified from accumulated other comprehensive income (loss)(2)		—			1,868			1,868
Balance at December 31, 2013	$	2,515		$	(2,817	)	$	(302	)

(1)	All amounts are net of tax, amounts in parentheses indicate debits.
(2)	These losses are reclassified into Interest expense. See Note 5, Fair Value of Financial Instruments.

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Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Additions to and reclassifications out of accumulated other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications	$ (30,744)	$ 11,413
Amount reclassified from accumulated other comprehensive income (loss)	1,159	1,868
Balance at beginning of period	(29,203)	(13,583)
Balance at end of period	(58,788)	(302)
Foreign currency translation adjustment
Additions to and reclassifications out of accumulated other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications	(30,306)	12,196
Balance at beginning of period	(28,482)	(9,681)
Balance at end of period	(58,788)	2,515
Gains and losses on cash flow hedges
Additions to and reclassifications out of accumulated other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications	(438)	(783)
Amount reclassified from accumulated other comprehensive income (loss)	1,159	1,868
Balance at beginning of period	(721)	(3,902)
Balance at end of period		$ (2,817)

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Fair Value of Financial Instruments (Details 3) In Thousands, unless otherwise specified	0 Months Ended		3 Months Ended
	Mar. 01, 2011 Interest rate swaps	Mar. 31, 2011 Interest rate swaps contract	Dec. 31, 2014 Cross currency swaps USD ($)	Dec. 31, 2014 Cross currency swaps GBP (£)	Dec. 31, 2013 Cross currency swaps USD ($)	Mar. 31, 2014 Cross currency swaps	Dec. 31, 2010 Cross currency swaps contract
Derivative information
Number of derivative contracts entered into by the entity		3					3
Notional amount of each derivative contract			$ 300,000	£ 194,200
Fixed interest rate (as a percent)		1.92%
Derivative term	4 years
Forward rate (as a percent)						1.565
Hedge ineffectiveness (gain) / loss			$ 1,934		$ (1,010)

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Condensed Consolidating Financial Statements of Guarantors (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Current assets:
Cash and cash equivalents	$ 212,047	$ 139,488	$ 116,750	$ 198,561
Accounts receivable, net	185,416	175,701
Inventories	803,386	853,226
Deferred income taxes	26,955	28,915
Other current assets	69,259	78,824
Total current assets	1,297,063	1,276,154
Property, plant and equipment, net	593,793	597,202
Goodwill	1,146,470	1,163,282
Other intangible assets, net	1,766,378	1,791,592
Other assets	47,142	49,492
Total assets	4,850,846	4,877,722
Current liabilities:
Current portion long-term debt	246	261
Accounts payable	265,732	227,877
Accrued expenses and other current liabilities	197,335	221,056
Total current liabilities	463,313	449,194
Long-term debt, net of current portion	2,158,002	2,158,087
Deferred income taxes	705,472	707,962
Other liabilities	44,378	53,386
Total liabilities	3,371,165	3,368,629
Commitments and contingencies
Stockholder's equity:
Common stock
Capital in excess of par	1,561,746	1,561,014
(Accumulated deficit) retained earnings	(23,277)	(22,718)
Accumulated other comprehensive income (loss)	(58,788)	(29,203)	(302)	(13,583)
Total stockholder's equity	1,479,681	1,509,093
Total liabilities and stockholder's equity	4,850,846	4,877,722
Noncontrolling Interest, Ownership Percentage by Parent	100.00%
Reportable Legal Entities | Parent Company
Current assets:
Cash and cash equivalents	136,850	77,550	19,151	81,356
Intercompany	14,634	30,425
Other current assets	18,424	19,932
Total current assets	169,908	127,907
Property, plant and equipment, net	105,957	95,022
Other assets	38,334	41,286
Intercompany loan receivable	2,484,368	2,497,343
Investments in subsidiaries	2,071,071	2,037,163
Total assets	4,869,638	4,798,721
Current liabilities:
Accrued expenses and other current liabilities	17,791	34,282
Total current liabilities	17,791	34,282
Intercompany loan payable	1,188,659	1,060,793
Long-term debt, net of current portion	2,157,500	2,157,500
Deferred income taxes	22,281	22,280
Other liabilities	3,726	14,773
Total liabilities	3,389,957	3,289,628
Stockholder's equity:
Capital in excess of par	1,561,746	1,561,014
(Accumulated deficit) retained earnings	(23,277)	(22,718)
Accumulated other comprehensive income (loss)	(58,788)	(29,203)
Total stockholder's equity	1,479,681	1,509,093
Total liabilities and stockholder's equity	4,869,638	4,798,721
Reportable Legal Entities | Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	3,674	751	1,994	35,357
Accounts receivable, net	142,566	130,749
Inventories	600,305	650,484
Deferred income taxes	25,102	27,002
Other current assets	14,028	18,049
Total current assets	785,675	827,035
Property, plant and equipment, net	293,901	304,274
Goodwill	726,354	726,354
Other intangible assets, net	1,428,727	1,439,374
Other assets	8,724	8,115
Intercompany loan receivable	1,188,662	1,060,793
Investments in subsidiaries	140,782	148,921
Total assets	4,572,825	4,514,866
Current liabilities:
Accounts payable	176,725	140,761
Intercompany	56,311	62,527
Accrued expenses and other current liabilities	126,197	112,136
Total current liabilities	359,233	315,424
Intercompany loan payable	2,157,500	2,157,500
Deferred income taxes	583,925	586,116
Other liabilities	16,553	13,732
Total liabilities	3,117,211	3,072,772
Stockholder's equity:
Capital in excess of par	1,358,862	1,358,862
(Accumulated deficit) retained earnings	107,745	89,265
Accumulated other comprehensive income (loss)	(10,993)	(6,033)
Total stockholder's equity	1,455,614	1,442,094
Total liabilities and stockholder's equity	4,572,825	4,514,866
Reportable Legal Entities | Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	71,523	61,187	95,605	81,848
Accounts receivable, net	42,850	44,952
Intercompany	41,677	32,102
Inventories	203,081	202,742
Deferred income taxes	1,853	1,913
Other current assets	36,807	40,843
Total current assets	397,791	383,739
Property, plant and equipment, net	193,935	197,906
Goodwill	420,116	436,928
Other intangible assets, net	337,651	352,218
Other assets	84	91
Total assets	1,349,577	1,370,882
Current liabilities:
Current portion long-term debt	246	261
Accounts payable	89,007	87,116
Accrued expenses and other current liabilities	53,347	74,638
Total current liabilities	142,600	162,015
Intercompany loan payable	326,871	339,843
Long-term debt, net of current portion	502	587
Deferred income taxes	99,266	99,566
Other liabilities	24,099	24,881
Total liabilities	593,338	626,892
Stockholder's equity:
Capital in excess of par	746,911	739,911
(Accumulated deficit) retained earnings	60,266	24,570
Accumulated other comprehensive income (loss)	(50,938)	(20,491)
Total stockholder's equity	756,239	743,990
Total liabilities and stockholder's equity	1,349,577	1,370,882
Eliminations
Current assets:
Intercompany	(56,311)	(62,527)
Total current assets	(56,311)	(62,527)
Intercompany loan receivable	(3,673,030)	(3,558,136)
Investments in subsidiaries	(2,211,853)	(2,186,084)
Total assets	(5,941,194)	(5,806,747)
Current liabilities:
Intercompany	(56,311)	(62,527)
Total current liabilities	(56,311)	(62,527)
Intercompany loan payable	(3,673,030)	(3,558,136)
Total liabilities	(3,729,341)	(3,620,663)
Stockholder's equity:
Capital in excess of par	(2,105,773)	(2,098,773)
(Accumulated deficit) retained earnings	(168,011)	(113,835)
Accumulated other comprehensive income (loss)	61,931	26,524
Total stockholder's equity	(2,211,853)	(2,186,084)
Total liabilities and stockholder's equity	$ (5,941,194)	$ (5,806,747)

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Goodwill and Intangible Assets

3 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3. Goodwill and Intangible Assets

        The change in the carrying amount of goodwill by segment is as follows:

	Wholesale			European Retail			Direct Response / E-Commerce		Consolidated
Balance at September 30, 2014	$	638,630		$	321,257		$	203,395	$	1,163,282
Foreign currency translation		(3,854	)		(12,958	)		—		(16,812	)
Balance at December 31, 2014	$	634,776		$	308,299		$	203,395	$	1,146,470

        The carrying amounts of acquired other intangible assets, which are subject to the impact of changes in foreign currency for the periods indicated are as follows:

	December 31, 2014				September 30, 2014
	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization		Amortization period (years)
Definite lived intangible assets:
Brands and customer relationships	$	910,563	$	165,412	$	912,200	$	155,776		17 - 25
Tradenames and other		174,726		23,894		175,872		22,644		20 - 30
		1,085,289		189,306		1,088,072		178,420
Indefinite lived intangible assets:
Tradenames		870,395		—		881,940		—
Total intangible assets	$	1,955,684	$	189,306	$	1,970,012	$	178,420

        Aggregate amortization expense of definite lived intangible assets included in the consolidated statements of income and comprehensive (loss) income in selling, general and administrative expenses for the three months ended December 31, 2014, and 2013 was $11,358 and $11,603, respectively.

        Assuming no changes in our intangible assets, estimated amortization expense for each of the five succeeding years will be approximately $45,000 per year.

XML

Business and Credit Concentration (Details)	3 Months Ended		12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2014
Customer B
Business and Credit Concentration
Percentage of concentration risk	11.00%	10.00%
Customer concentration risk | Customer A
Business and Credit Concentration
Percentage of concentration risk	10.00%	11.00%
Customer concentration risk | Customer C
Business and Credit Concentration
Percentage of concentration risk	6.00%	5.00%
Net sales | Customer B | Wholesale segment
Business and Credit Concentration
Percentage of concentration risk	18.00%	17.00%
Net sales | Customer concentration risk | Customer A | Wholesale segment
Business and Credit Concentration
Percentage of concentration risk	17.00%	18.00%
Net sales | Customer concentration risk | Customer C | Wholesale segment
Business and Credit Concentration
Percentage of concentration risk	11.00%	8.00%
Gross accounts receivable | Customer concentration risk | Customer A | Wholesale segment
Business and Credit Concentration
Percentage of concentration risk	13.00%		13.00%
Gross accounts receivable | Customer concentration risk | Customer B | Wholesale segment
Business and Credit Concentration
Percentage of concentration risk	10.00%		11.00%
Gross accounts receivable | Customer concentration risk | Customer C | Wholesale segment
Business and Credit Concentration
Percentage of concentration risk	13.00%		9.00%

XML

Basis of Presentation (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014
Accounts receivable reserves
Total accounts receivable reserves	$ 124,266	$ 101,741
Promotional program incentive allowances
Accounts receivable reserves
Total accounts receivable reserves	107,852	83,768
Allowance for sales returns
Accounts receivable reserves
Total accounts receivable reserves	13,990	15,409
Allowance for doubtful accounts
Accounts receivable reserves
Total accounts receivable reserves	$ 2,424	$ 2,564

XML

Condensed Consolidating Financial Statements of Guarantors (Tables)

3 Months Ended

Dec. 31, 2014

Condensed Consolidating Financial Statements of Guarantors

Schedule of condensed consolidating balance sheet

Condensed Consolidating Balance Sheet
As of December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	136,850		$	3,674		$	71,523		$	—		$	212,047
Accounts receivable, net		—			142,566			42,850			—			185,416
Intercompany		14,634			—			41,677			(56,311	)		—
Inventories		—			600,305			203,081			—			803,386
Deferred income taxes		—			25,102			1,853			—			26,955
Other current assets		18,424			14,028			36,807			—			69,259
Total current assets		169,908			785,675			397,791			(56,311	)		1,297,063
Property, plant and equipment, net		105,957			293,901			193,935			—			593,793
Goodwill		—			726,354			420,116			—			1,146,470
Other intangible assets, net		—			1,428,727			337,651			—			1,766,378
Other assets		38,334			8,724			84			—			47,142
Intercompany loan receivable		2,484,368			1,188,662			—			(3,673,030	)		—
Investments in subsidiaries		2,071,071			140,782			—			(2,211,853	)		—
Total assets	$	4,869,638		$	4,572,825		$	1,349,577		$	(5,941,194	)	$	4,850,846
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	246		$	—		$	246
Accounts payable		—			176,725			89,007			—			265,732
Intercompany		—			56,311			—			(56,311	)		—
Accrued expenses and other current liabilities		17,791			126,197			53,347			—			197,335
Total current liabilities		17,791			359,233			142,600			(56,311	)		463,313
Intercompany loan payable		1,188,659			2,157,500			326,871			(3,673,030	)		—
Long-term debt, net of current portion		2,157,500			—			502			—			2,158,002
Deferred income taxes		22,281			583,925			99,266			—			705,472
Other liabilities		3,726			16,553			24,099			—			44,378
Total liabilities		3,389,957			3,117,211			593,338			(3,729,341	)		3,371,165
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—			—			—			—
Capital in excess of par		1,561,746			1,358,862			746,911			(2,105,773	)		1,561,746
(Accumulated deficit) retained earnings		(23,277	)		107,745			60,266			(168,011	)		(23,277	)
Accumulated other comprehensive income (loss)		(58,788	)		(10,993	)		(50,938	)		61,931			(58,788	)
Total stockholder's equity		1,479,681			1,455,614			756,239			(2,211,853	)		1,479,681
Total liabilities and stockholder's equity	$	4,869,638		$	4,572,825		$	1,349,577		$	(5,941,194	)	$	4,850,846

Condensed Consolidating Balance Sheet
As of September 30, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	77,550		$	751		$	61,187					$	139,488
Accounts receivable, net		—			130,749			44,952						175,701
Intercompany		30,425			—			32,102			(62,527	)		—
Inventories		—			650,484			202,742			—			853,226
Deferred income taxes		—			27,002			1,913			—			28,915
Other current assets		19,932			18,049			40,843			—			78,824
Total current assets		127,907			827,035			383,739			(62,527	)		1,276,154
Property, plant and equipment, net		95,022			304,274			197,906			—			597,202
Goodwill		—			726,354			436,928			—			1,163,282
Other intangible assets, net		—			1,439,374			352,218			—			1,791,592
Other assets		41,286			8,115			91			—			49,492
Intercompany loan receivable		2,497,343			1,060,793			—			(3,558,136	)		—
Investments in subsidiaries		2,037,163			148,921			—			(2,186,084	)		—
Total assets	$	4,798,721		$	4,514,866		$	1,370,882		$	(5,806,747	)	$	4,877,722
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	261		$	—		$	261
Accounts payable		—			140,761			87,116			—			227,877
Intercompany		—			62,527			—			(62,527	)		—
Accrued expenses and other current liabilities		34,282			112,136			74,638			—			221,056
Total current liabilities		34,282			315,424			162,015			(62,527	)		449,194
Intercompany loan payable		1,060,793			2,157,500			339,843			(3,558,136	)		—
Long-term debt, net of current portion		2,157,500			—			587			—			2,158,087
Deferred income taxes		22,280			586,116			99,566			—			707,962
Other liabilities		14,773			13,732			24,881			—			53,386
Total liabilities		3,289,628			3,072,772			626,892			(3,620,663	)		3,368,629
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—			—			—			—
Capital in excess of par		1,561,014			1,358,862			739,911			(2,098,773	)		1,561,014
(Accumulated deficit) retained earnings		(22,718	)		89,265			24,570			(113,835	)		(22,718	)
Accumulated other comprehensive income (loss)		(29,203	)		(6,033	)		(20,491	)		26,524			(29,203	)
Total stockholder's equity		1,509,093			1,442,094			743,990			(2,186,084	)		1,509,093
Total liabilities and stockholder's equity	$	4,798,721		$	4,514,866		$	1,370,882		$	(5,806,747	)	$	4,877,722

Schedule of condensed consolidating statement of operations and comprehensive income (loss)

Consolidated Statements of Operations and Comprehensive Income (Loss)
For three months ended December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	557,361		$	289,017		$	(20,607	)	$	825,771
Costs and expenses:
Cost of sales		—			338,946			126,841			(20,607	)		445,180
Advertising, promotion and catalog		—			34,947			11,947			—			46,894
Selling, general and administrative		22,890			114,937			100,345			—			238,172
		22,890			488,830			239,133			(20,607	)		730,246
Income (loss) from operations		(22,890	)		68,531			49,884			—			95,525
Other income (expense):
Intercompany interest		39,809			(34,781	)		(5,028	)		—			—
Interest		(34,781	)		65			(31	)		—			(34,747	)
Miscellaneous, net		(1,746	)		(843	)		1,234			—			(1,355	)
		3,282			(35,559	)		(3,825	)		—			(36,102	)
Income (loss) before income taxes		(19,608	)		32,972			46,059			—			59,423
Provision (benefit) for income taxes		(1,166	)		12,035			10,363			—			21,232
Equity in income of subsidiaries		56,633			6,333			—			(62,966	)		—
Net income (loss)		38,191			27,270			35,696			(62,966	)		38,191
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of taxes		(30,306	)		(5,681	)		(30,447	)		36,128			(30,306	)
Change in fair value of interest rate swaps, net of taxes		721			721			—			(721	)		721
Total other comprehensive income (loss), net of tax		(29,585	)		(4,960	)		(30,447	)		35,407			(29,585	)
Comprehensive income (loss)	$	8,606		$	22,310		$	5,249		$	(27,559	)	$	8,606

Consolidated Statements of Operations and Comprehensive Income (Loss)
For three months ended December 31, 2013

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	571,066		$	285,141		$	(29,102	)	$	827,105
Costs and expenses:
Cost of sales		—			341,868			128,952			(29,102	)		441,718
Advertising, promotion and catalog		—			29,114			9,408			—			38,522
Selling, general and administrative		22,273			116,880			93,531			—			232,684
		22,273			487,862			231,891			(29,102	)		712,924
Income (loss) from operations		(22,273	)		83,204			53,250			—			114,181
Other income (expense):
Intercompany interest		39,708			(34,798	)		(4,910	)		—			—
Interest		(34,798	)		—			(20	)		—			(34,818	)
Miscellaneous, net		910			951			(871	)		—			990
		5,820			(33,847	)		(5,801	)		—			(33,828	)
Income (loss) before income taxes		(16,453	)		49,357			47,449			—			80,353
Provision (benefit) for income taxes		(5,369	)		18,615			13,286			—			26,532
Equity in income of subsidiaries		64,905			6,166			—			(71,071	)		—
Net income (loss)		53,821			36,908			34,163			(71,071	)		53,821
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of taxes		12,196			2,205			9,915			(12,120	)		12,196
Change in fair value of interest rate swaps, net of taxes		1,085			1,085			—			(1,085	)		1,085
Total other comprehensive income (loss), net of tax		13,281			3,290			9,915			(13,205	)		13,281
Comprehensive income (loss)	$	67,102		$	40,198		$	44,078		$	(84,276	)	$	67,102

Schedule of condensed consolidating statement of cash flows

Condensed Consolidating Statement of Cash Flows
Three Months Ended December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash (used in) provided by operating activities	$	(24,334	)	$	142,688		$	23,505		$	(8,789	)	$	133,070
Cash flows from investing activities:
Purchase of property, plant and equipment		(8,954	)		(1,009	)		(9,127	)					(19,090	)
Proceeds from sale of property, plant and equipment		—			193			—						193
Investment in subsidiary		(7,000	)		—			—			7,000			—
Net cash used in investing activities		(15,954	)		(816	)		(9,127	)		7,000			(18,897	)
Cash flows from financing activities:
Principal payments under long-term agreements		—			—			(67	)		—			(67	)
Payments for financing fees		(611	)		—			—			—			(611	)
Dividends paid		(38,750	)		—			(8,789	)		8,789			(38,750	)
Capital contribution		—			—			7,000			(7,000	)		—
Intercompany accounts		138,949			(138,949	)		—			—			—
Net cash used in financing activities		99,588			(138,949	)		(1,856	)		1,789			(39,428	)
Effect of exchange rate changes on cash		—			—			(2,186	)		—			(2,186	)
Net increase in cash		59,300			2,923			10,336			—			72,559
Cash at beginning of period		77,550			751			61,187			—			139,488
Cash end of period	$	136,850		$	3,674		$	71,523		$	—		$	212,047

Condensed Consolidating Statement of Cash Flows
Three Months Ended December 31, 2013

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash (used in) provided by operating activities	$	(6,378	)	$	(54,362	)	$	23,876		$	(3,225	)	$	(40,089	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,127	)		(12,388	)		(7,732	)					(21,247	)
Net cash used in investing activities		(1,127	)		(12,388	)		(7,732	)		—			(21,247	)
Cash flows from financing activities:
Principal payments under long-term agreements		—			—			(132	)		—			(132	)
Dividends paid		(21,313	)		—			(3,225	)		3,225			(21,313	)
Intercompany accounts		(33,387	)		33,387			—			—			—
Net cash used in financing activities		(54,700	)		33,387			(3,357	)		3,225			(21,445	)
Effect of exchange rate changes on cash		—			—			970			—			970
Net (decrease) in cash		(62,205	)		(33,363	)		13,757			—			(81,811	)
Cash at beginning of period		81,356			35,357			81,848			—			198,561
Cash at end of period	$	19,151		$	1,994		$	95,605		$	—		$	116,750

XML

Related Party Transactions (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2014
Related party transactions
Debt issued	$ 2,158,248		$ 2,158,348
Holdings | Holdco Notes
Related party transactions
Debt issued	1,000,000
Carlyle
Related party transactions
Expected annual consulting fee	3,000
Expenses incurred from transactions with related party	750	750
Out of pocket expenditures paid to related party	$ 334	$ 0

XML

Inventories (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014
Inventories
Raw materials	$ 217,066	$ 217,697
Work-in-process	20,196	20,898
Finished goods	566,124	614,631
Total inventories	$ 803,386	$ 853,226

XML

Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Sep. 30, 2014
Changes in goodwill
Balance at the beginning of the period	$ 1,163,282
Foreign currency translation	(16,812)
Balance at the end of the period	1,146,470
European Retail
Changes in goodwill
Balance at the beginning of the period	321,257
Foreign currency translation	(12,958)
Balance at the end of the period	308,299
Direct Response / E-Commerce
Changes in goodwill
Balance at the beginning of the period		203,395
Balance at the end of the period	203,395	203,395
Wholesale segment
Changes in goodwill
Balance at the beginning of the period	638,630
Foreign currency translation	(3,854)
Balance at the end of the period	$ 634,776

XML

Inventories

3 Months Ended

Dec. 31, 2014

Inventories

Inventories

2. Inventories

        The components of inventories are as follows:

	December 31, 2014		September 30, 2014
Raw materials	$	217,066	$	217,697
Work-in-process		20,196		20,898
Finished goods		566,124		614,631
Total	$	803,386	$	853,226

XML

Goodwill and Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Sep. 30, 2014
Definite lived intangible assets:
Gross carrying amount	1,085,289	$ 1,088,072
Accumulated amortization	189,306	178,420
Indefinite lived intangible asset:
Tradenames	870,395	881,940
Total intangible assets	1,955,684	1,970,012
Brands and customer relationships
Definite lived intangible assets:
Gross carrying amount	910,563	912,200
Accumulated amortization	165,412	155,776
Brands and customer relationships | Minimum
Definite lived intangible assets:
Amortization period	17 years
Brands and customer relationships | Maximum
Definite lived intangible assets:
Amortization period	25 years
Tradenames and other
Definite lived intangible assets:
Gross carrying amount	174,726	175,872
Accumulated amortization	23,894	$ 22,644
Tradenames and other | Minimum
Definite lived intangible assets:
Amortization period	20 years
Tradenames and other | Maximum
Definite lived intangible assets:
Amortization period	30 years

XML

Litigation Summary (Details) (Glucosamine-Based Dietary Supplements, USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Sep. 30, 2013
Glucosamine-Based Dietary Supplements
Employment class Actions
Provision as per best estimate	$ 6,100	$ 12,000

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013
Current assets:
Cash and cash equivalents	$ 212,047	$ 139,488	$ 116,750	$ 198,561
Accounts receivable, net	185,416	175,701
Inventories	803,386	853,226
Deferred income taxes	26,955	28,915
Other current assets	69,259	78,824
Total current assets	1,297,063	1,276,154
Property, plant and equipment, net	593,793	597,202
Goodwill	1,146,470	1,163,282
Intangible assets, net	1,766,378	1,791,592
Other assets	47,142	49,492
Total assets	4,850,846	4,877,722
Current liabilities:
Current portion long-term debt	246	261
Accounts payable	265,732	227,877
Accrued expenses and other current liabilities	197,335	221,056
Total current liabilities	463,313	449,194
Long-term debt, net of current portion	2,158,002	2,158,087
Deferred income taxes	705,472	707,962
Other liabilities	44,378	53,386
Total liabilities	3,371,165	3,368,629
Commitments and contingencies
Stockholder's equity:
Common stock, successor, $0.01 par; one thousand shares authorized, issued and outstanding
Capital in excess of par	1,561,746	1,561,014
Accumulated deficit	(23,277)	(22,718)
Accumulated other comprehensive loss	(58,788)	(29,203)	(302)	(13,583)
Total stockholder's equity	1,479,681	1,509,093
Total liabilities and stockholder's equity	$ 4,850,846	$ 4,877,722

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014 segment	Dec. 31, 2013
Segment Information
Number of business segments	4
Segment Information
Net sales	$ 825,771	$ 827,105
Income (loss) from operations	95,525	114,181
Depreciation and amortization	28,065	25,566
Capital expenditures	19,090	21,247
Reportable Business Segments
Segment Information
Net sales	825,771	827,105
Income (loss) from operations	118,508	136,455
Depreciation and amortization	17,776	16,648
Capital expenditures	11,812	9,555
Corporate/Manufacturing
Segment Information
Income (loss) from operations	(22,983)	(22,274)
Depreciation and amortization	10,289	8,918
Capital expenditures	7,278	11,692
Wholesale segment | Reportable Business Segments
Segment Information
Net sales	495,126	505,275
Income (loss) from operations	64,829	82,728
Depreciation and amortization	9,002	9,086
Capital expenditures	73	31
European Retail | Reportable Business Segments
Segment Information
Net sales	213,597	204,912
Income (loss) from operations	46,315	43,960
Depreciation and amortization	5,049	4,044
Capital expenditures	10,703	5,321
European Retail | Reportable Business Segments | Holland & Barrett
Segment Information
Number of stores	766
European Retail | Reportable Business Segments | Holland & Barrett | China
Segment Information
Number of franchised stores	31
European Retail | Reportable Business Segments | Holland & Barrett | Singapore
Segment Information
Number of franchised stores	30
European Retail | Reportable Business Segments | Holland & Barrett | United Arab Emirates
Segment Information
Number of franchised stores	12
European Retail | Reportable Business Segments | Holland & Barrett | Cyprus
Segment Information
Number of franchised stores	10
European Retail | Reportable Business Segments | Holland & Barrett | Malta
Segment Information
Number of franchised stores	5
European Retail | Reportable Business Segments | Holland & Barrett | Gibraltar
Segment Information
Number of franchised stores	1
European Retail | Reportable Business Segments | Holland & Barrett | Iceland
Segment Information
Number of franchised stores	1
European Retail | Reportable Business Segments | Holland & Barrett | Kuwait
Segment Information
Number of franchised stores	1
European Retail | Reportable Business Segments | De Tuinen | Netherlands
Segment Information
Number of stores	148
Number of franchised stores	6
European Retail | Reportable Business Segments | GNC (UK) stores | U.K.
Segment Information
Number of stores	53
European Retail | Reportable Business Segments | GNC (UK) stores | Ireland
Segment Information
Number of stores	48
European Retail | Reportable Business Segments | GNC (UK) stores | Belgium
Segment Information
Number of stores	17
Direct Response / E-Commerce | Reportable Business Segments
Segment Information
Net sales	63,143	60,362
Income (loss) from operations	6,060	6,975
Depreciation and amortization	2,830	2,812
Capital expenditures	13	570
North American Retail | Reportable Business Segments
Segment Information
Net sales	53,905	56,556
Income (loss) from operations	1,304	2,792
Depreciation and amortization	895	706
Capital expenditures	$ 1,023	$ 3,633
North American Retail | Reportable Business Segments | Vitamin World
Segment Information
Number of stores	403

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income	$ 38,191	$ 53,821
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Impairments and disposals of assets	659	159
Depreciation of property, plant and equipment	16,707	13,963
Amortization of intangible assets	11,358	11,603
Foreign currency transaction (gain) loss	(87)	144
Amortization and write-off of deferred financing fees	5,071	4,684
Stock-based compensation	732	1,620
Allowance for doubtful accounts	35	(7)
Inventory reserves	5,369	1,801
Deferred income taxes	(256)	(2,714)
Changes in operating assets and liabilities:
Accounts receivable	(12,105)	(31,117)
Inventories	37,604	(96,549)
Other assets	6,229	4,438
Accounts payable	38,953	32,225
Accrued expenses and other liabilities	(15,390)	(34,160)
Net cash provided by (used in) operating activities	133,070	(40,089)
Cash flows from investing activities:
Purchases of property, plant and equipment	(19,090)	(21,247)
Proceeds from sale of property, plant and equipment	193
Net cash used in investing activities	(18,897)	(21,247)
Cash flows from financing activities:
Principal payments	(67)	(132)
Payments for financing fees	(611)
Dividends paid	(38,750)	(21,313)
Net cash used in financing activities	(39,428)	(21,445)
Effect of exchange rate changes on cash	(2,186)	970
Net increase (decrease) in cash	72,559	(81,811)
Cash at beginning of period	139,488	198,561
Cash at end of period	212,047	116,750
Property, plant and equipment additions included in total liabilities	$ 11,748	$ 7,676

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Fair Value of Financial Instruments (Details) (Recurring, USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014
Level 2 | Interest rate swaps
Fair value measurements
Derivative liabilities (included in accrued expenses and other current liabilities)		$ 1,151
Level 3 | Cross currency swaps
Fair value measurements
Derivative liabilities (included in accrued expenses and other current liabilities)	3,156	3,857
Derivative liabilites (included in other liabilities)	$ 3,726	$ 14,773

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets

Schedule of change in carrying amount of goodwill by segment

:  

	Wholesale			European Retail			Direct Response / E-Commerce		Consolidated
Balance at September 30, 2014	$	638,630		$	321,257		$	203,395	$	1,163,282
Foreign currency translation		(3,854	)		(12,958	)		—		(16,812	)
Balance at December 31, 2014	$	634,776		$	308,299		$	203,395	$	1,146,470

Schedule of carrying amounts of acquired other intangible assets

	December 31, 2014				September 30, 2014
	Gross carrying amount		Accumulated amortization		Gross carrying amount		Accumulated amortization		Amortization period (years)
Definite lived intangible assets:
Brands and customer relationships	$	910,563	$	165,412	$	912,200	$	155,776		17 - 25
Tradenames and other		174,726		23,894		175,872		22,644		20 - 30
		1,085,289		189,306		1,088,072		178,420
Indefinite lived intangible assets:
Tradenames		870,395		—		881,940		—
Total intangible assets	$	1,955,684	$	189,306	$	1,970,012	$	178,420

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Fair Value of Financial Instruments (Details 2) (Cross currency swaps, Level 3, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2014
Level 3 activity
Beginning balance:	$ (18,630)	$ (22,254)
Unrealized gain (loss) on cross currency swaps	11,748	(5,105)
Ending balance:	$ (6,882)	$ (27,359)
Minimum
Fair Value Measurements
Performance risk for derivative contracts as a percentage of unadjusted liabilities	14.40%		8.10%
Maximum
Fair Value Measurements
Performance risk for derivative contracts as a percentage of unadjusted liabilities	16.70%		8.50%
Weighted average
Fair Value Measurements
Performance risk for derivative contracts as a percentage of unadjusted liabilities	15.00%		8.30%

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Dec. 31, 2014

Fair Value of Financial Instruments

Summary of the assets and liabilities measured at fair value on a recurring basis

        The following table summarizes liabilities measured at fair value on a recurring basis at December 31, 2014:

	Level 1		Level 2		Level 3
Current (included in accrued expenses and other current liabilities):
Cross currency swaps	$	—	$	—	$	3,156
Non-current (included in other liabilities):
Cross currency swaps	$	—	$	—	$	3,726

        The following table summarizes liabilities measured at fair value on a recurring basis at September 30, 2014:

	Level 1		Level 2		Level 3
Current (included in accrued expenses and other current liabilities):
Interest rate swaps	$	—	$	1,151	$	—
Cross currency swaps	$	—	$	—	$	3,857
Non-current (included in other liabilities):
Cross currency swaps	$	—	$	—	$	14,773

Schedule of the Level 3 activity related to cross currency swaps

	Three Months Ended December 31,
	2014			2013
Beginning balance:	$	(18,630	)	$	(22,254	)
Unrealized gain (loss) on cross currency swaps		11,748			(5,105	)
Ending balance:	$	(6,882	)	$	(27,359	)

Schedule of effect of derivative instruments designated as cash flow and net investment hedging instruments

	Three Months Ended December 31,
	2014						2013
	Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Cash Flow Hedges:
Interest rate swaps	$	(438	)	$	(1,159	)	$	(783	)	$	(1,868	)
Net Investment Hedges:
Cross currency swaps		9,171			—			(4,154	)		—
Total	$	8,733		$	(1,159	)	$	(4,937	)	$	(1,868	)

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Basis of Presentation

3 Months Ended

Dec. 31, 2014

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

        NBTY, Inc. ("NBTY"), together with its subsidiaries, (the "Company," "we," or "us"), is the leading global vertically integrated manufacturer, marketer, distributor and retailer of a broad line of high-quality vitamins, nutritional supplements and related products in the United States, with operations worldwide. We have prepared these financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") applicable to interim financial information and on a basis that is consistent with the accounting principles applied in our audited financial statements for the fiscal year ended September 30, 2014, including the notes thereto (our "2014 Financial Statements") included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2014 ("2014 Annual Report"). In our opinion, these financial statements reflect all adjustments (including normal recurring items) necessary for a fair presentation of our results for the interim periods presented. These financial statements do not include all information or notes necessary for a complete presentation in conformity with GAAP. Accordingly, these financial statements should be read in conjunction with the 2014 Financial Statements. Results for interim periods are not necessarily indicative of results which may be achieved for a full year.

Estimates

        The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. These judgments can be subjective and complex, and consequently actual results could differ materially from those estimates and assumptions. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets, including goodwill and intangible assets; stock-based compensation; income taxes and accruals for the outcome of current litigation.

Accounts Receivable Reserves

        Accounts receivable are presented net of the following reserves:

	December 31, 2014		September 30, 2014
Promotional program incentive allowances	$	107,852	$	83,768
Allowance for sales returns		13,990		15,409
Allowance for doubtful accounts		2,424		2,564
	$	124,266	$	101,741

Recent Accounting Developments

        In January 2015, the FASB issued guidance which eliminates from GAAP the concept of extraordinary items. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted, provided that adoption is applied from the beginning of the fiscal year of adoption. This guidance may be applied prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of this guidance is not expected to have an impact on our consolidated financial statements.

Revision

        See Note 12 for a revision that was made to the Condensed Consolidating Financial Statements of Guarantors.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Sep. 30, 2014
Consolidated Balance Sheets
Common stock, par (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000	1,000
Common stock, shares issued (in shares)	1,000	1,000
Common stock, shares outstanding (in shares)	1,000	1,000

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Segment Information

3 Months Ended

Dec. 31, 2014

Segment Information

Segment Information

11. Segment Information

      We are organized by segments on a worldwide basis. We evaluate performance based on a number of factors; however, the primary measures of performance are the net sales and income or loss from operations (before corporate allocations) of each segment, as these are the key performance indicators that we review. Operating income or loss for each segment does not include the impact of any intercompany transfer pricing mark-up, corporate general and administrative expenses, interest expense and other miscellaneous income/expense items. Corporate general and administrative expenses include, but are not limited to, human resources, legal, finance, and various other corporate-level activity related expenses. Such unallocated expenses remain within Corporate/Manufacturing.

        All of our products fall into one or more of these four segments:

• Wholesale—This segment sells products worldwide under various brand names and third-party private labels, each targeting specific market groups which include virtually all major mass merchandisers, club stores, drug store chains and supermarkets. This segment also sells products to independent pharmacies, health food stores, the military and other retailers.

• European Retail—This segment generates revenue through its 766 Holland & Barrett stores (including franchised stores in the following countries: 31 in China, 30 in Singapore, 12 in United Arab Emirates,10 in Cyprus, five in Malta and one in each of Gibraltar, Iceland and Kuwait), 148 De Tuinen stores (including six franchised locations) in the Netherlands, 53 GNC branded UK stores, 48 Nature's Way stores in Ireland and 17 Essenza stores in Belgium, as well as internet-based sales from www.hollandandbarrett.com, www.hollandandbarrett.co.uk, www.hollandandbarrett.ie,www.detuinen.nl and www.gnc.co.uk. Such revenue consists of sales of proprietary brand and third-party products as well as franchise fees.

• Direct Response/E-Commerce—This segment generates revenue through the sale of proprietary brand and third-party products primarily through mail order catalogs and the internet under the Puritan's Pride tradename. Catalogs are strategically mailed to customers who order by mail, internet, or phone.

• North American Retail—This segment generates revenue through its 403 owned and operated Vitamin World stores selling proprietary brand and third-party products, as well as internet-based sales from www.vitaminworld.com.  

        The following table represents key financial information of our business segments:

	Total Reportable Business Segments
	Wholesale		European Retail		Direct Response/ E-Commerce		North American Retail		Total		Corporate/ Manufacturing			Consolidated
Three Months Ended December 31, 2014:
Net sales	$	495,126	$	213,597	$	63,143	$	53,905	$	825,771	$	—		$	825,771
Income (loss) from operations		64,829		46,315		6,060		1,304		118,508		(22,983	)		95,525
Depreciation and amortization		9,002		5,049		2,830		895		17,776		10,289			28,065
Capital expenditures		73		10,703		13		1,023		11,812		7,278			19,090
Three Months Ended December 31, 2013:
Net sales	$	505,275	$	204,912	$	60,362	$	56,556	$	827,105	$	—		$	827,105
Income (loss) from operations		82,728		43,960		6,975		2,792		136,455		(22,274	)		114,181
Depreciation and amortization		9,086		4,044		2,812		706		16,648		8,918			25,566
Capital expenditures		31		5,321		570		3,633		9,555		11,692			21,247

        Total assets by segment are as follows:

	December 31, 2014		September 30, 2014
Reportable Business Segments:
Wholesale	$	2,523,828	$	2,581,069
European Retail		918,555		948,010
Direct Response / E-Commerce		512,527		512,642
North American Retail		107,289		107,442
Total Reportable Business Segments:		4,062,199		4,149,163
Corporate / Manufacturing		788,647		728,559
Consolidated assets	$	4,850,846	$	4,877,722

XML

Document and Entity Information	3 Months Ended
	Dec. 31, 2014	Feb. 02, 2015
Document and Entity Information
Entity Registrant Name	NBTY INC
Entity Central Index Key	0000070793
Document Type	10-Q
Document Period End Date	Dec. 31, 2014
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Voluntary Filers	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,000
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Condensed Consolidating Financial Statements of Guarantors

3 Months Ended

Dec. 31, 2014

Condensed Consolidating Financial Statements of Guarantors

Condensed Consolidating Financial Statements of Guarantors

12. Condensed Consolidating Financial Statements of Guarantors

        The Notes were issued by NBTY and are guaranteed by each of its current and future direct and indirect 100% owned subsidiaries, subject to certain exceptions. These guarantees are full, unconditional and joint and several. The following condensed consolidating financial information presents:

1.	Condensed consolidating financial statements as of December 31, 2014 and September 30, 2014 and for the three months ended December 31, 2014 and 2013 of (a) NBTY, the parent and issuer, (b) the guarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) NBTY on a consolidated basis; and
2.	Elimination entries necessary to consolidate NBTY, 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, other comprehensive income, 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 financial statements and other notes related thereto.

        We revised the statement of operations with respect to equity in income of subsidiaries from the non-guarantor subsidiaries to the guarantor. This revision impacted the condensed consolidating statement of operations and comprehensive income (loss) for the three months ended December 31, 2013 increasing net income for the guarantors and decreasing the eliminations by $6,166. The revision to this supplemental information did not impact any amounts reported in our previously issued Consolidated Financial Statements. In accordance with SEC Staff Accounting Bulletin Nos. 99 and 108, we assessed the materiality of these revisions and concluded that the revisions were not material to any of our previously issued consolidating financial statements. As comparative prior period supplemental guarantor subsidiaries financial information is presented in future filings, we will similarly revise such prior period information.

Condensed Consolidating Balance Sheet
As of December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	136,850		$	3,674		$	71,523		$	—		$	212,047
Accounts receivable, net		—			142,566			42,850			—			185,416
Intercompany		14,634			—			41,677			(56,311	)		—
Inventories		—			600,305			203,081			—			803,386
Deferred income taxes		—			25,102			1,853			—			26,955
Other current assets		18,424			14,028			36,807			—			69,259
Total current assets		169,908			785,675			397,791			(56,311	)		1,297,063
Property, plant and equipment, net		105,957			293,901			193,935			—			593,793
Goodwill		—			726,354			420,116			—			1,146,470
Other intangible assets, net		—			1,428,727			337,651			—			1,766,378
Other assets		38,334			8,724			84			—			47,142
Intercompany loan receivable		2,484,368			1,188,662			—			(3,673,030	)		—
Investments in subsidiaries		2,071,071			140,782			—			(2,211,853	)		—
Total assets	$	4,869,638		$	4,572,825		$	1,349,577		$	(5,941,194	)	$	4,850,846
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	246		$	—		$	246
Accounts payable		—			176,725			89,007			—			265,732
Intercompany		—			56,311			—			(56,311	)		—
Accrued expenses and other current liabilities		17,791			126,197			53,347			—			197,335
Total current liabilities		17,791			359,233			142,600			(56,311	)		463,313
Intercompany loan payable		1,188,659			2,157,500			326,871			(3,673,030	)		—
Long-term debt, net of current portion		2,157,500			—			502			—			2,158,002
Deferred income taxes		22,281			583,925			99,266			—			705,472
Other liabilities		3,726			16,553			24,099			—			44,378
Total liabilities		3,389,957			3,117,211			593,338			(3,729,341	)		3,371,165
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—			—			—			—
Capital in excess of par		1,561,746			1,358,862			746,911			(2,105,773	)		1,561,746
(Accumulated deficit) retained earnings		(23,277	)		107,745			60,266			(168,011	)		(23,277	)
Accumulated other comprehensive income (loss)		(58,788	)		(10,993	)		(50,938	)		61,931			(58,788	)
Total stockholder's equity		1,479,681			1,455,614			756,239			(2,211,853	)		1,479,681
Total liabilities and stockholder's equity	$	4,869,638		$	4,572,825		$	1,349,577		$	(5,941,194	)	$	4,850,846

Condensed Consolidating Balance Sheet
As of September 30, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	77,550		$	751		$	61,187					$	139,488
Accounts receivable, net		—			130,749			44,952						175,701
Intercompany		30,425			—			32,102			(62,527	)		—
Inventories		—			650,484			202,742			—			853,226
Deferred income taxes		—			27,002			1,913			—			28,915
Other current assets		19,932			18,049			40,843			—			78,824
Total current assets		127,907			827,035			383,739			(62,527	)		1,276,154
Property, plant and equipment, net		95,022			304,274			197,906			—			597,202
Goodwill		—			726,354			436,928			—			1,163,282
Other intangible assets, net		—			1,439,374			352,218			—			1,791,592
Other assets		41,286			8,115			91			—			49,492
Intercompany loan receivable		2,497,343			1,060,793			—			(3,558,136	)		—
Investments in subsidiaries		2,037,163			148,921			—			(2,186,084	)		—
Total assets	$	4,798,721		$	4,514,866		$	1,370,882		$	(5,806,747	)	$	4,877,722
Liabilities and Stockholder's Equity
Current liabilities:
Current portion of long-term debt	$	—		$	—		$	261		$	—		$	261
Accounts payable		—			140,761			87,116			—			227,877
Intercompany		—			62,527			—			(62,527	)		—
Accrued expenses and other current liabilities		34,282			112,136			74,638			—			221,056
Total current liabilities		34,282			315,424			162,015			(62,527	)		449,194
Intercompany loan payable		1,060,793			2,157,500			339,843			(3,558,136	)		—
Long-term debt, net of current portion		2,157,500			—			587			—			2,158,087
Deferred income taxes		22,280			586,116			99,566			—			707,962
Other liabilities		14,773			13,732			24,881			—			53,386
Total liabilities		3,289,628			3,072,772			626,892			(3,620,663	)		3,368,629
Commitments and contingencies
Stockholder's Equity:
Common stock		—			—			—			—			—
Capital in excess of par		1,561,014			1,358,862			739,911			(2,098,773	)		1,561,014
(Accumulated deficit) retained earnings		(22,718	)		89,265			24,570			(113,835	)		(22,718	)
Accumulated other comprehensive income (loss)		(29,203	)		(6,033	)		(20,491	)		26,524			(29,203	)
Total stockholder's equity		1,509,093			1,442,094			743,990			(2,186,084	)		1,509,093
Total liabilities and stockholder's equity	$	4,798,721		$	4,514,866		$	1,370,882		$	(5,806,747	)	$	4,877,722

Consolidated Statements of Operations and Comprehensive Income (Loss)
For three months ended December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	557,361		$	289,017		$	(20,607	)	$	825,771
Costs and expenses:
Cost of sales		—			338,946			126,841			(20,607	)		445,180
Advertising, promotion and catalog		—			34,947			11,947			—			46,894
Selling, general and administrative		22,890			114,937			100,345			—			238,172
		22,890			488,830			239,133			(20,607	)		730,246
Income (loss) from operations		(22,890	)		68,531			49,884			—			95,525
Other income (expense):
Intercompany interest		39,809			(34,781	)		(5,028	)		—			—
Interest		(34,781	)		65			(31	)		—			(34,747	)
Miscellaneous, net		(1,746	)		(843	)		1,234			—			(1,355	)
		3,282			(35,559	)		(3,825	)		—			(36,102	)
Income (loss) before income taxes		(19,608	)		32,972			46,059			—			59,423
Provision (benefit) for income taxes		(1,166	)		12,035			10,363			—			21,232
Equity in income of subsidiaries		56,633			6,333			—			(62,966	)		—
Net income (loss)		38,191			27,270			35,696			(62,966	)		38,191
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of taxes		(30,306	)		(5,681	)		(30,447	)		36,128			(30,306	)
Change in fair value of interest rate swaps, net of taxes		721			721			—			(721	)		721
Total other comprehensive income (loss), net of tax		(29,585	)		(4,960	)		(30,447	)		35,407			(29,585	)
Comprehensive income (loss)	$	8,606		$	22,310		$	5,249		$	(27,559	)	$	8,606

Consolidated Statements of Operations and Comprehensive Income (Loss)
For three months ended December 31, 2013

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	571,066		$	285,141		$	(29,102	)	$	827,105
Costs and expenses:
Cost of sales		—			341,868			128,952			(29,102	)		441,718
Advertising, promotion and catalog		—			29,114			9,408			—			38,522
Selling, general and administrative		22,273			116,880			93,531			—			232,684
		22,273			487,862			231,891			(29,102	)		712,924
Income (loss) from operations		(22,273	)		83,204			53,250			—			114,181
Other income (expense):
Intercompany interest		39,708			(34,798	)		(4,910	)		—			—
Interest		(34,798	)		—			(20	)		—			(34,818	)
Miscellaneous, net		910			951			(871	)		—			990
		5,820			(33,847	)		(5,801	)		—			(33,828	)
Income (loss) before income taxes		(16,453	)		49,357			47,449			—			80,353
Provision (benefit) for income taxes		(5,369	)		18,615			13,286			—			26,532
Equity in income of subsidiaries		64,905			6,166			—			(71,071	)		—
Net income (loss)		53,821			36,908			34,163			(71,071	)		53,821
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment, net of taxes		12,196			2,205			9,915			(12,120	)		12,196
Change in fair value of interest rate swaps, net of taxes		1,085			1,085			—			(1,085	)		1,085
Total other comprehensive income (loss), net of tax		13,281			3,290			9,915			(13,205	)		13,281
Comprehensive income (loss)	$	67,102		$	40,198		$	44,078		$	(84,276	)	$	67,102

Condensed Consolidating Statement of Cash Flows
Three Months Ended December 31, 2014

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash (used in) provided by operating activities	$	(24,334	)	$	142,688		$	23,505		$	(8,789	)	$	133,070
Cash flows from investing activities:
Purchase of property, plant and equipment		(8,954	)		(1,009	)		(9,127	)					(19,090	)
Proceeds from sale of property, plant and equipment		—			193			—						193
Investment in subsidiary		(7,000	)		—			—			7,000			—
Net cash used in investing activities		(15,954	)		(816	)		(9,127	)		7,000			(18,897	)
Cash flows from financing activities:
Principal payments under long-term agreements		—			—			(67	)		—			(67	)
Payments for financing fees		(611	)		—			—			—			(611	)
Dividends paid		(38,750	)		—			(8,789	)		8,789			(38,750	)
Capital contribution		—			—			7,000			(7,000	)		—
Intercompany accounts		138,949			(138,949	)		—			—			—
Net cash used in financing activities		99,588			(138,949	)		(1,856	)		1,789			(39,428	)
Effect of exchange rate changes on cash		—			—			(2,186	)		—			(2,186	)
Net increase in cash		59,300			2,923			10,336			—			72,559
Cash at beginning of period		77,550			751			61,187			—			139,488
Cash end of period	$	136,850		$	3,674		$	71,523		$	—		$	212,047

Condensed Consolidating Statement of Cash Flows
Three Months Ended December 31, 2013

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash (used in) provided by operating activities	$	(6,378	)	$	(54,362	)	$	23,876		$	(3,225	)	$	(40,089	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(1,127	)		(12,388	)		(7,732	)					(21,247	)
Net cash used in investing activities		(1,127	)		(12,388	)		(7,732	)		—			(21,247	)
Cash flows from financing activities:
Principal payments under long-term agreements		—			—			(132	)		—			(132	)
Dividends paid		(21,313	)		—			(3,225	)		3,225			(21,313	)
Intercompany accounts		(33,387	)		33,387			—			—			—
Net cash used in financing activities		(54,700	)		33,387			(3,357	)		3,225			(21,445	)
Effect of exchange rate changes on cash		—			—			970			—			970
Net (decrease) in cash		(62,205	)		(33,363	)		13,757			—			(81,811	)
Cash at beginning of period		81,356			35,357			81,848			—			198,561
Cash at end of period	$	19,151		$	1,994		$	95,605		$	—		$	116,750

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Consolidated Statements of Income and Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements of Operations and Comprehensive Income (Loss)
Net sales	$ 825,771	$ 827,105
Costs and expenses:
Cost of sales	445,180	441,718
Advertising, promotion and catalog	46,894	38,522
Selling, general and administrative	238,172	232,684
Total costs and expenses	730,246	712,924
Income from operations	95,525	114,181
Other income (expense):
Interest	(34,747)	(34,818)
Miscellaneous, net	(1,355)	990
Total other income (expense)	(36,102)	(33,828)
Income from operations before income taxes	59,423	80,353
Provision for income taxes	21,232	26,532
Net income	38,191	53,821
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of taxes of $396, and $2,388	(30,306)	12,196
Change in fair value of interest rate swaps, net of taxes of $(442), and $(697)	721	1,085
Total other comprehensive (loss) income, net of tax	(29,585)	13,281
Comprehensive income	$ 8,606	$ 67,102

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Litigation Summary

3 Months Ended

Dec. 31, 2014

Litigation Summary

Litigation Summary

6. Litigation Summary

Glucosamine-Based Dietary Supplements

        Beginning in June 2011, certain putative class actions have been filed in various jurisdictions against NBTY, its subsidiary Rexall Sundown, Inc. ("Rexall"), and/or other companies as to which there may be a duty to defend and indemnify, challenging the marketing of glucosamine- based dietary supplements, under various states' consumer protection statutes. The lawsuits against NBTY and its subsidiaries are: Cardenas v. NBTY, Inc. and Rexall Sundown, Inc. (filed June 14, 2011) in the United States District Court for the Eastern District of California, on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief; Jennings v. Rexall Sundown, Inc. (filed August 22, 2011) in the United States District Court for the District of Massachusetts, on behalf of a putative class of Massachusetts consumers seeking unspecified trebled compensatory damages; and Nunez v. NBTY, Inc. et al. (filed March 1, 2013) in the United States District Court for the Southern District of California (the "Nunez Case"), on behalf of a putative class of California consumers seeking unspecified compensatory damages based on theories of restitution and disgorgement, plus injunctive relief, as well as other cases in California and Illinois against certain wholesale customers as to which we may have certain indemnification obligations.

        In March 2013, NBTY agreed upon a proposed settlement with the remaining plaintiffs, which includes all cases and resolved all pending claims without any admission of or concession of liability by NBTY, and which provided for a release of all claims in return for payments to the class, together with attorneys' fees, and notice and administrative costs. Fairness Hearings took place on October 4, 2013 and November 20, 2013. On January 3, 2014, the court issued an opinion and order approving the settlement as modified (the "Order"). The final judgment was issued on January 22, 2014 (the "Judgment"). Certain objectors filed a notice of appeal of the Order and the Judgment on January 29, 2014 and the plaintiffs filed a notice of appeal on February 3, 2014. On November 19, 2014, the appellate court issued a decision granting the objectors' appeal. The appellate court reversed and remanded the matter to the district court for further proceedings consistent with the appellate court's decision.

        In fiscal 2013, NBTY recorded a provision of $12,000, reflecting its best estimate of exposure for payments to the class together with attorney's fees and notice and administrative costs in connection with this class action settlement. As a result of the court's approval of the settlement and the closure of the claims period, NBTY reduced its estimate of exposure to $6,100. This reduction in the estimated exposure was reflected in the Company's first quarter results for fiscal 2014. Until the cases are resolved, no final determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY.

Telephone Consumer Protection Act Claim

        NBTY, and certain of its subsidiaries, are defendants in a class-action lawsuit, captioned John H. Lary Jr. v. Rexall Sundown, Inc.; Rexall Sundown 3001, LLC; Rexall, Inc.; NBTY, Inc.; Corporate Mailings, Inc. d/b/a CCG Marketing Solutions ("CCG") and John Does 1-10 (originally filed October 22, 2013), brought in the United States District Court, Eastern District of New York. The plaintiff alleges that the defendants faxed advertisements to plaintiff and others without invitation or permission, in violation of the Telephone Consumer Protection Act ("TCPA").

        On May 2, 2014, NBTY and its named subsidiary defendants cross-claimed against CCG, who was a third party vendor engaged by NBTY, and CCG cross-claimed against NBTY and named subsidiary defendants on June 13, 2014. CCG brought a third party complaint against an unrelated entity, Healthcare Data Experts, LLC, on June 27, 2014. On July 21, 2014, CCG filed a motion to dismiss the amended complaint and that motion is pending.

        At this time, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on the part of NBTY, however, we do not believe the ultimate outcome will have a material adverse effect on our consolidated financial statements.

Claims in the Ordinary Course

        In addition to the foregoing, other regulatory inquiries, claims, suits and complaints (including product liability, intellectual property and Proposition 65 claims) arise from time to time in the ordinary course of our business. We currently believe that such other inquiries, claims, suits and complaints would not have a material adverse effect on our consolidated financial statements, if adversely determined against us.

        Over the past several years, we have been served with various false advertising putative class action cases in various U.S. jurisdictions, as have various other companies in the industry. Over the past few years, the number of these cases has increased, such that at any given time we are defending several suits concerning a variety of products. These cases challenge the marketing of the subject dietary supplements under various states' consumer protection statutes and generally seek unspecified compensatory damages based on theories of restitution and disgorgement, plus punitive damages and injunctive relief. Until these cases are resolved, no determination can be made as to the ultimate outcome of the litigation or the amount of liability on our part.

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Fair Value of Financial Instruments

3 Months Ended

Dec. 31, 2014

Fair Value of Financial Instruments

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

        Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

        The following table summarizes liabilities measured at fair value on a recurring basis at December 31, 2014:

	Level 1		Level 2		Level 3
Current (included in accrued expenses and other current liabilities):
Cross currency swaps	$	—	$	—	$	3,156
Non-current (included in other liabilities):
Cross currency swaps	$	—	$	—	$	3,726

        The following table summarizes liabilities measured at fair value on a recurring basis at September 30, 2014:

	Level 1		Level 2		Level 3
Current (included in accrued expenses and other current liabilities):
Interest rate swaps	$	—	$	1,151	$	—
Cross currency swaps	$	—	$	—	$	3,857
Non-current (included in other liabilities):
Cross currency swaps	$	—	$	—	$	14,773

        The Company's swap contracts are measured at fair value based on a market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Although non-performance risk of the Company and the counterparty is present in all swap contracts and is a component of the estimated fair values, we did not view non-performance risk to be a significant input to the fair value for the interest rate swap contracts. However, with respect to our cross currency swap contracts, we believe that non-performance risk is higher; therefore, the Company classifies these swap contracts as "Level 3" in the fair value hierarchy and, accordingly, records estimated fair value adjustments based on internal projections and views of those contracts. The performance risk for the cross currency swap contracts as a percentage of the unadjusted liabilities ranged from 14.4% to 16.7% (15.0% weighted average) as of December 31, 2014 and 8.1% to 8.5% (8.3% weighted average) as of September 30, 2014.

        The following table shows the Level 3 activity related to our cross currency swaps for the three months ended December 31, 2014 and 2013:

	Three Months Ended December 31,
	2014			2013
Beginning balance:	$	(18,630	)	$	(22,254	)
Unrealized gain (loss) on cross currency swaps		11,748			(5,105	)
Ending balance:	$	(6,882	)	$	(27,359	)

Interest Rate Swaps

        During March 2011, we entered into three interest rate swap contracts to fix the LIBOR indexed interest rates on a portion of our senior secured credit facilities until the indicated expiration dates of these swap contracts. Each swap contract had a declining notional amount with a fixed interest rate of 1.92% for a four-year term and matured in December 2014. Under the terms of the swap contracts, variable interest payments for a portion of our senior secured credit facilities were swapped for fixed interest payments. These interest rate swap contracts were designated as a cash flow hedge of the variable interest payments on a portion of our term loan debt. Hedge effectiveness was assessed based on the overall changes in the fair value of the interest rate swap contracts. Hedge ineffectiveness from inception to December 31, 2014 was insignificant, and was recorded in Miscellaneous, net.

Cross Currency Swaps

        To manage the potential exposure from adverse changes in currency exchange rates, specifically the British pound sterling, arising from our net investment in British pound sterling denominated operations, we entered into three cross currency swap contracts in December 2010, to hedge a portion of the net investment in our British pound denominated foreign operations. The aggregate notional amount of the swap contracts is £194,200 British pounds sterling (approximately $300,000 U.S. dollars), with a forward rate of 1.565, and a termination date of September 30, 2017.

        These cross currency contracts were designated as a net investment hedge to the net investment in our British pound sterling denominated operations. Hedge effectiveness is assessed based on the overall changes in the fair value of the cross currency swap contracts. Any potential hedge ineffectiveness is measured using the hypothetical derivative method and is recognized in current earnings. Hedge ineffectiveness loss/(gain) for the three months ended December 31, 2014 and 2013 was $1,934 and ($1,010), respectively, and is recorded in Miscellaneous, net.

        The following table shows the effect, net of tax impact, of the Company's derivative instruments designated as cash flow and net investment hedging instruments:

	Three Months Ended December 31,
	2014						2013
	Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Cash Flow Hedges:
Interest rate swaps	$	(438	)	$	(1,159	)	$	(783	)	$	(1,868	)
Net Investment Hedges:
Cross currency swaps		9,171			—			(4,154	)		—
Total	$	8,733		$	(1,159	)	$	(4,937	)	$	(1,868	)

Notes

        The fair value of the Notes, based on quoted market prices (Level 2), was approximately $646 as of December 31, 2014.

Term loan B-2

        The face amount of the term loan B-2 is $1,507,500, which approximates fair value based on Level 2 inputs, as this loan accrues interest at a variable interest rate.

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Long-Term Debt (Tables)

3 Months Ended

Dec. 31, 2014

Schedule of components of long-term debt

	December 31, 2014			September 30, 2014
Senior Credit Facilities:
Term loan B-2	$	1,507,500		$	1,507,500
Notes		650,000			650,000
Other		748			848
		2,158,248			2,158,348
Less: current portion		(246	)		(261	)
Total	$	2,158,002		$	2,158,087

Holdco Notes

Schedule of redemption prices of Holdo Notes

Period	Redemption Price
2014		102.00	%
2015		101.00	%
2016 and thereafter		100.00	%

Notes

Schedule of redemption prices of Notes

Period	Redemption Price
2014		104.50	%
2015		102.25	%
2016 and thereafter		100.00	%

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Basis of Presentation (Policies)

3 Months Ended

Dec. 31, 2014

Basis of Presentation

Estimates

Estimates

        The preparation of financial statements in conformity with GAAP requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenues and expenses during the reporting periods. These judgments can be subjective and complex, and consequently actual results could differ materially from those estimates and assumptions. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our most significant estimates include: sales returns, promotions and other allowances; inventory valuation and obsolescence; valuation and recoverability of long-lived assets, including goodwill and intangible assets; stock-based compensation; income taxes and accruals for the outcome of current litigation.

Accounts Receivable Reserves

Accounts Receivable Reserves

        Accounts receivable are presented net of the following reserves:

	December 31, 2014		September 30, 2014
Promotional program incentive allowances	$	107,852	$	83,768
Allowance for sales returns		13,990		15,409
Allowance for doubtful accounts		2,424		2,564
	$	124,266	$	101,741

Recent Accounting Developments

Recent Accounting Developments

        In January 2015, the FASB issued guidance which eliminates from GAAP the concept of extraordinary items. The guidance is effective for us beginning October 1, 2016, and early adoption is permitted, provided that adoption is applied from the beginning of the fiscal year of adoption. This guidance may be applied prospectively or retrospectively to all prior periods presented in the financial statements. The adoption of this guidance is not expected to have an impact on our consolidated financial statements.

Revision

Revision

We revised the statement of operations with respect to equity in income of subsidiaries from the non-guarantor subsidiaries to the guarantor. This revision impacted the condensed consolidating statement of operations and comprehensive income (loss) for the three months ended December 31, 2013 increasing net income for the guarantors and decreasing the eliminations by $6,166. The revision to this supplemental information did not impact any amounts reported in our previously issued Consolidated Financial Statements. In accordance with SEC Staff Accounting Bulletin Nos. 99 and 108, we assessed the materiality of these revisions and concluded that the revisions were not material to any of our previously issued consolidating financial statements. As comparative prior period supplemental guarantor subsidiaries financial information is presented in future filings, we will similarly revise such prior period information.

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Business and Credit Concentration

3 Months Ended

Dec. 31, 2014

Business and Credit Concentration

Business and Credit Concentration

9. Business and Credit Concentration

Financial Instruments

        Financial instruments that potentially subject us to credit risk consist primarily of cash and cash equivalents (the amounts of which may, at times, exceed Federal Deposit Insurance Corporation limits on insurable amounts), investments and trade accounts receivable. We mitigate our risk by investing in or through major financial institutions.

Customers

        We perform on-going credit evaluations of our customers and adjust credit limits based upon payment history and the customers' current creditworthiness, as determined by review of their current credit information. Customers' account activity is continuously monitored. As a result of this review process, we record bad debt expense, which is based upon historical experience as well as specific customer collection issues that have been identified, to adjust the carrying amount of the related receivable to its estimated realizable value. While such bad debt expenses historically have been within expectations and the allowances established, if the financial condition of one or more of our customers were to deteriorate, additional bad debt provisions may be required.

        The following customers accounted for the following percentages of net sales for the three months ended December 31, 2014 and 2013, respectively:

	Wholesale Segment Net Sales						Total Consolidated Net Sales
	Three Months Ended December 31,						Three Months Ended December 31,
	2014			2013			2014			2013
Customer A		17	%		18	%		10	%		11	%
Customer B		18	%		17	%		11	%		10	%
Customer C		11	%		8	%		6	%		5	%

        The following customers accounted for the following percentages of the Wholesale segment's gross accounts receivable:

	December 31, 2014			September 30, 2014
Customer A		13	%		13	%
Customer B		10	%		11	%
Customer C		13	%		9	%

        The loss of any of these customers, or any one of our other major customers, would have a material adverse effect on our consolidated financial statements if we were unable to replace that customer.

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Income Taxes

3 Months Ended

Dec. 31, 2014

Income Taxes

Income Taxes

7. Income Taxes

        Our provision for income taxes is impacted by a number of factors, including federal taxes, our international tax structure, state tax rates in the jurisdictions where we conduct business, and our ability to utilize state tax credits that expire between 2015 and 2029. Therefore, our overall effective income tax rate could vary.

        The effective income tax rate for the three months ended December 31, 2014 and 2013 was 35.7% and 33.0%, respectively. Our effective tax rate for the three months ended December 31, 2014 is higher than the federal statutory rate generally due to the impact of state and local taxes. Our effective tax rate for the three months ended December 31, 2013 was lower than the federal statutory rate generally due to the timing and mixture (foreign and domestic) of income and the partial reinvestment of foreign earnings in fiscal 2014.

        We accrue interest and penalties related to unrecognized tax benefits in the provision for income taxes. At December 31, 2014, we had accrued $448 and $174 for the potential payment of interest and penalties, respectively. As of December 31, 2014, we were subject to U.S. federal income tax examinations for the tax years 2011 through 2014, and to non-U.S. examinations for tax years 2009 through 2014. In addition, we are generally subject to state and local examinations for fiscal years 2011 through 2014.

        The Company is under an Internal Revenue Service ("IRS") examination for tax years 2011 through 2012. Among other issues, the IRS has questioned the values used by the Company to provide services to an international subsidiary. The Company believes it has appropriately valued such services and intends to continue to support this position as the IRS examination progresses.

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Income (Loss).

Accumulated Other Comprehensive Income (Loss)

8. Accumulated Other Comprehensive Income (Loss)

        Additions to and reclassifications out of accumulated other comprehensive income (loss) attributable to the Company for the three months ended December 31, 2014 and 2013 were as follows:

	Three Months Ended December 31, 2014(1)
	Foreign currency translation adjustments			Gains and losses on cash flow hedges			Total
Balance at September 30, 2014	$	(28,482	)	$	(721	)	$	(29,203	)
Other comprehensive income (loss) before reclassifications		(30,306	)		(438	)		(30,744	)
Amounts reclassified from accumulated other comprehensive income (loss)(2)		—			1,159			1,159
Balance at December 31, 2014	$	(58,788	)	$	—		$	(58,788	)

	Three Months Ended December 31, 2013(1)
	Foreign currency translation adjustments			Gains and losses on cash flow hedges			Total
Balance at September 30, 2013	$	(9,681	)	$	(3,902	)	$	(13,583	)
Other comprehensive income (loss) before reclassifications		12,196			(783	)		11,413
Amounts reclassified from accumulated other comprehensive income (loss)(2)		—			1,868			1,868
Balance at December 31, 2013	$	2,515		$	(2,817	)	$	(302	)

(1)	All amounts are net of tax, amounts in parentheses indicate debits.
(2)	These losses are reclassified into Interest expense. See Note 5, Fair Value of Financial Instruments.

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Related Party Transactions

3 Months Ended

Dec. 31, 2014

Related Party Transactions

Related Party Transactions

10. Related Party Transactions

Consulting Agreement—The Carlyle Group ("Carlyle")

        NBTY entered into a consulting agreement with Carlyle under which we pay Carlyle a fee for consulting services Carlyle provides to it and its subsidiaries. Under this agreement, subject to certain conditions, NBTY expects to pay an annual consulting fee to Carlyle of $3,000; NBTY reimburses Carlyle for out-of-pocket expenses, and may pay Carlyle additional fees associated with other future transactions. For the three months ended December 31, 2014 and 2013, these fees totaled $750, in each period, and are recorded in selling, general and administrative expenses. Out of pocket expenditures paid to Carlyle were $334 and $0 for the three months ended December 31, 2014 and 2013, respectively.

Holdings

        Holdings does not have any operations or cash flow other than dividends from NBTY. Holdings has $1,000,000 of Holdco Notes and relies on dividends from NBTY to service the debt. See Note 4 Long-Term Debt for further information.

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Long-Term Debt (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended		3 Months Ended	0 Months Ended
	Dec. 31, 2013	Oct. 31, 2012	Dec. 31, 2014	Nov. 20, 2014	Dec. 12, 2013	Mar. 21, 2013	Sep. 30, 2014	Oct. 17, 2012	Oct. 01, 2010
Long-Term Debt
Long-term Debt, Total			2,158,248				$ 2,158,348
Less: current portion			(246)				(261)
Long-term debt, net of current portion			2,158,002				2,158,087
Parent Company
Long-Term Debt
Consent fee	18,560							17,345
Dividend paid	445,537	721,682
Term loan B-2
Long-Term Debt
Long-term Debt, Total			1,507,500				1,507,500
Face amount of debt						1,507,500
Portion of excess cash flow (as defined) as part of additional prepayments on term loan (as a percent)			50.00%
Term loan B-2 | Eurodollar (LIBOR)
Long-Term Debt
Floor for reference rate (as a percent)			1.00%
Margin rate over reference rate (as a percent)			2.50%
Term loan B-2 | Base rate
Long-Term Debt
Floor for reference rate (as a percent)			2.00%
Margin rate over reference rate (as a percent)			1.50%
Notes
Long-Term Debt
Long-term Debt, Total			650,000				650,000
Face amount of debt									650,000
Interest rate on debt instrument (as a percent)									9.00%
Notes | On or after October 1, 2014
Long-Term Debt
Redemption price as a percentage of principal amount			104.50%
Notes | On or after October 1, 2015
Long-Term Debt
Redemption price as a percentage of principal amount			102.25%
Notes | On and after October 1, 2016 and thereafter
Long-Term Debt
Redemption price as a percentage of principal amount			100.00%
Other
Long-Term Debt
Long-term Debt, Total			748				848
Revolving credit facility
Long-Term Debt
Borrowing capacity			175,000	175,000			200,000
Outstanding balance			0
Letters of credit			4,400
Net availability			170,600
Step down percentage upon achievement of a total senior secured leverage ratio (as a percent)			0.25%
Write off deferred financing cost				359
Financing costs capitalized				611
Unused line fee percentage			0.50%
Fronting fee Percentage			0.25%
Revolving credit facility | Eurodollar (LIBOR)
Long-Term Debt
Margin rate over reference rate (as a percent)			3.25%
Revolving credit facility | Base rate
Long-Term Debt
Margin rate over reference rate (as a percent)			2.25%
Holdco Notes
Long-Term Debt
Face amount of debt								550,000
Holdco Notes | Parent Company
Long-Term Debt
Face amount of debt					450,000			550,000
Cash interest rate (as a percent)								7.75%
PIK interest (as a percent)								8.50%
Cash on hand from Company used to pay transaction fees and expenses and a dividend								200,000
Gross proceeds from issuance of debt					460,125
Premium on issuance of debt					10,125
Holdco Notes | Parent Company | Equal or exceed 75%, but less than 100%
Long-Term Debt
Percentage of outstanding principal amount in which interest is payable by increasing the principal amount of outstanding notes or by issuing PIK Notes equal to such interest			25.00%
Percentage of outstanding principal amount in which interest is payable in cash			75.00%
Holdco Notes | Parent Company | Equal or exceed 50%, but less than 75%
Long-Term Debt
Percentage of outstanding principal amount in which interest is payable in kind			50.00%
Percentage of outstanding principal amount in which interest is payable in cash			50.00%
Holdco Notes | Parent Company | Equal or exceed 25%, but less than 50%
Long-Term Debt
Percentage of outstanding principal amount in which interest is payable in kind			75.00%
Percentage of outstanding principal amount in which interest is payable in cash			25.00%
Holdco Notes | Minimum | Parent Company | Equal or exceed 75%, but less than 100%
Long-Term Debt
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest			75.00%
Holdco Notes | Minimum | Parent Company | Equal or exceed 50%, but less than 75%
Long-Term Debt
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest			50.00%
Holdco Notes | Minimum | Parent Company | Equal or exceed 25%, but less than 50%
Long-Term Debt
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest			25.00%
Holdco Notes | Maximum | Parent Company | Equal or exceed 75%, but less than 100%
Long-Term Debt
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest			100.00%
Holdco Notes | Maximum | Parent Company | Equal or exceed 50%, but less than 75%
Long-Term Debt
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest			75.00%
Holdco Notes | Maximum | Parent Company | Equal or exceed 25%, but less than 50%
Long-Term Debt
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest			50.00%
Holdco Notes | Maximum | Parent Company | Less than 25%
Long-Term Debt
Applicable amount for interest period expressed as a percentage of the aggregate amount of cash interest			25.00%
Holdco Notes | On or after November 1, 2014 | Holdings
Long-Term Debt
Redemption price as a percentage of principal amount			102.00%
Holdco Notes | On or after November 1, 2015 | Holdings
Long-Term Debt
Redemption price as a percentage of principal amount			101.00%
Holdco Notes | On or after November 1, 2016 and thereafter | Holdings
Long-Term Debt
Redemption price as a percentage of principal amount			100.00%
Term loan B-1
Long-Term Debt
Face amount of debt repurchased						1,750,000
Write off deferred financing cost						4,232
Call premium on term loan						1,151
Financing costs capitalized						15,190
Remaining portion of the call premium capitalized						$ 13,924

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Inventories (Tables)

3 Months Ended

Dec. 31, 2014

Inventories

Schedule of components of inventories

	December 31, 2014		September 30, 2014
Raw materials	$	217,066	$	217,697
Work-in-process		20,196		20,898
Finished goods		566,124		614,631
Total	$	803,386	$	853,226

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Business and Credit Concentration (Tables)

3 Months Ended

Dec. 31, 2014

Net sales

Business and Credit Concentration

Schedule of specified customers percentages accounted for

	Wholesale Segment Net Sales						Total Consolidated Net Sales
	Three Months Ended December 31,						Three Months Ended December 31,
	2014			2013			2014			2013
Customer A		17	%		18	%		10	%		11	%
Customer B		18	%		17	%		11	%		10	%
Customer C		11	%		8	%		6	%		5	%

Gross accounts receivable

Business and Credit Concentration

Schedule of specified customers percentages accounted for

	December 31, 2014			September 30, 2014
Customer A		13	%		13	%
Customer B		10	%		11	%
Customer C		13	%		9	%

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Condensed Consolidating Financial Statements of Guarantors (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Cash (used in) provided by operating activities	$ 133,070	$ (40,089)
Cash flows from investing activities:
Purchases of property, plant and equipment	(19,090)	(21,247)
Proceeds from sale of property, plant and equipment	193
Net cash used in investing activities	(18,897)	(21,247)
Cash flows from financing activities:
Principal payments under long-term agreements	(67)	(132)
Payments for financing fees	(611)
Dividends paid	(38,750)	(21,313)
Net cash used in financing activities	(39,428)	(21,445)
Effect of exchange rate changes on cash	(2,186)	970
Net increase (decrease) in cash	72,559	(81,811)
Cash at beginning of period	139,488	198,561
Cash at end of period	212,047	116,750
Reportable Legal Entities | Parent Company
Cash flows from operating activities:
Cash (used in) provided by operating activities	(24,334)	(6,378)
Cash flows from investing activities:
Purchases of property, plant and equipment	(8,954)	(1,127)
Investment in subsidiary	7,000
Net cash used in investing activities	(15,954)	(1,127)
Cash flows from financing activities:
Payments for financing fees	(611)
Dividends paid	(38,750)	(21,313)
Intercompany accounts	138,949	(33,387)
Net cash used in financing activities	99,588	(54,700)
Net increase (decrease) in cash	59,300	(62,205)
Cash at beginning of period	77,550	81,356
Cash at end of period	136,850	19,151
Reportable Legal Entities | Guarantor Subsidiaries
Cash flows from operating activities:
Cash (used in) provided by operating activities	142,688	(54,362)
Cash flows from investing activities:
Purchases of property, plant and equipment	(1,009)	(12,388)
Proceeds from sale of property, plant and equipment	193
Net cash used in investing activities	(816)	(12,388)
Cash flows from financing activities:
Intercompany accounts	(138,949)	33,387
Net cash used in financing activities	(138,949)	33,387
Net increase (decrease) in cash	2,923	(33,363)
Cash at beginning of period	751	35,357
Cash at end of period	3,674	1,994
Reportable Legal Entities | Non-Guarantor Subsidiaries
Cash flows from operating activities:
Cash (used in) provided by operating activities	23,505	23,876
Cash flows from investing activities:
Purchases of property, plant and equipment	(9,127)	(7,732)
Net cash used in investing activities	(9,127)	(7,732)
Cash flows from financing activities:
Principal payments under long-term agreements	(67)	(132)
Dividends paid	(8,789)	(3,225)
Capital contribution	7,000
Net cash used in financing activities	(1,856)	(3,357)
Effect of exchange rate changes on cash	(2,186)	970
Net increase (decrease) in cash	10,336	13,757
Cash at beginning of period	61,187	81,848
Cash at end of period	71,523	95,605
Eliminations
Cash flows from operating activities:
Cash (used in) provided by operating activities	(8,789)	(3,225)
Cash flows from investing activities:
Investment in subsidiary	(7,000)
Net cash used in investing activities	7,000
Cash flows from financing activities:
Dividends paid	8,789	3,225
Capital contribution	(7,000)
Net cash used in financing activities	$ 1,789	$ 3,225

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Income Taxes
Effective income tax rate (as a percent)	35.70%	33.00%
Accrued interest	$ 448
Accrued penalties	$ 174

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Consolidated Statements of Income and Comprehensive Income (Loss) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements of Operations and Comprehensive Income (Loss)
Foreign currency translation adjustment, net of taxes	$ 396	$ 2,388
Change in fair value of interest rate swaps, net of tax	$ (442)	$ (697)

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Long-Term Debt

3 Months Ended

Dec. 31, 2014

Long-Term Debt

Long-Term Debt

4. Long-Term Debt

        The components of long-term debt are as follows:

	December 31, 2014			September 30, 2014
Senior Credit Facilities:
Term loan B-2	$	1,507,500		$	1,507,500
Notes		650,000			650,000
Other		748			848
		2,158,248			2,158,348
Less: current portion		(246	)		(261	)
Total	$	2,158,002		$	2,158,087

Senior credit facilities

        On October 1, 2010, NBTY entered into its senior secured credit facilities with Barclays Bank PLC, as administrative agent (the "Original Credit Agreement"). The Original Credit Agreement was amended pursuant to the First Amendment and Refinancing Agreement, dated as of March 1, 2011, and further amended pursuant to that Second Amendment Agreement, dated as of October 11, 2012.

        On March 21, 2013, NBTY, Alphabet Holding Company, Inc. (“Holdings”), Barclays Bank PLC, as administrative agent, and several other lenders entered into the Third Amendment and Second Refinancing Agreement (the "Second Refinancing") pursuant to which NBTY repriced its term loan B-1 under its then existing credit agreement. Under the terms of the Second Refinancing, the $1,750,000 term loan B-1 was replaced with a new $1,507,500 term loan B-2. Borrowings under term loan B-2 and the revolving credit facility bear interest at a floating rate which can be, at NBTY's option, either (i) Eurodollar (LIBOR) rate plus an applicable margin, or (ii) base rate plus an applicable margin, in each case, subject to a Eurodollar (LIBOR) rate floor of 1.00% or a base rate floor of 2.00%, as applicable. The applicable margin for term loan B-2 is 2.50% per annum for Eurodollar (LIBOR) loans and 1.50% per annum for base rate loans. The applicable margin for the revolving credit facility remained at 3.25% per annum for Eurodollar (LIBOR) loans and 2.25% per annum for base rate loans, with a step-down of 25 basis points upon the achievement of a total senior secured leverage ratio as set forth in the senior secured credit facilities. Substantially all other terms are consistent with the original term loan B-1, including the maturity dates. As a result of the Second Refinancing, $4,232 of previously capitalized deferred financing costs, as well as $1,151 of the call premium on term loan B-1, were expensed and included in interest expense. In addition, costs incurred and recorded as deferred financing costs were approximately $15,190, including $13,924 of the call premium paid on term loan B-1, and are being amortized using the effective interest method. In accordance with the provisions of the credit agreement governing the senior secured credit facilities, future scheduled payments of principal will not be required until the final balloon payment at maturity in October 2017.

        On November 20, 2014, NBTY amended its senior secured revolving credit facility, extending its maturity to September 2017 and reducing the commitment from $200,000 to $175,000. In connection with this amendment, deferred financing costs of $611 were incurred and will be amortized over the remaining period and $359 of previously capitalized financing costs were written off.

        The following fees are applicable under the revolving credit facility: (i) an unused line fee of 0.50% per annum, based on the unused portion of the revolving credit facility; (ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit available to be drawn equal to the applicable margin for Eurodollar rate loans; (iii) a letter of credit fronting fee equal to 0.25% per annum on the daily amount of each letter of credit available to be drawn; and (iv) certain other customary fees and expenses of our letter of credit issuers.

        As of December 31, 2014, there were no borrowings drawn from our $175,000 revolving credit facility and there was a letter of credit totaling $4,400, reducing the net availability to $170,600.

        NBTY may voluntarily prepay loans or reduce commitments under its senior secured credit facilities, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.

        NBTY must make prepayments on the term loan B-2 facility with the net cash proceeds of certain asset sales, casualty and condemnation events, the incurrence or issuance of indebtedness (other than indebtedness permitted to be incurred under its senior secured credit facilities unless specifically incurred to refinance a portion of its senior secured credit facilities) and 50% of excess cash flow, as defined in the credit agreement (such percentage subject to reduction based on achievement of total senior secured leverage ratios), in each case, subject to certain reinvestment rights and other exceptions. NBTY is also required to make prepayments under its revolving credit facility at any time when, and to the extent that, the aggregate amount of the outstanding loans and letters of credit under the revolving credit facility exceeds the aggregate amount of commitments in respect of the revolving credit facility.

        Obligations under the senior secured credit facilities are guaranteed by Holdings and each of NBTY's current and future direct and indirect subsidiaries other than (i) foreign subsidiaries, (ii) unrestricted subsidiaries, (iii) non-wholly owned subsidiaries, (iv) certain receivables financing subsidiaries, (v) certain immaterial subsidiaries and (vi) certain holding companies of foreign subsidiaries, and are secured by a first lien on substantially all of their assets, including capital stock of subsidiaries (subject to certain exceptions).

        The senior secured credit facilities contain customary negative covenants, including, but not limited to, restrictions on NBTY and its restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, amend organizational documents, or change our line of business or fiscal year. In addition, NBTY's senior secured credit facilities require the maintenance of a maximum total senior secured leverage ratio on a quarterly basis, calculated with respect to Consolidated EBITDA, as defined therein, if at any time amounts are outstanding under the revolving credit facility, including swingline loans and letters of credit. NBTY was in compliance with all covenants under the senior secured credit facilities at December 31, 2014.

        The senior secured credit facilities provide that, upon the occurrence of certain events of default, the obligations thereunder may be accelerated and the lending commitments terminated. Such events of default include payment defaults to the lenders, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy proceedings, material money judgments, material ERISA/pension plan events, certain change of control events and other customary events of default.

Holdco Notes

        On October 17, 2012, Holdings issued $550,000 in aggregate principal amount of 7.75%/8.50% contingent cash pay senior notes ("Holdco Notes") that mature on November 1, 2017. Interest on the Holdco Notes accrues at the rate of 7.75% per annum with respect to cash interest and 8.50% per annum with respect to any paid-in-kind interest ("PIK Interest"). Interest on the Holdco Notes is payable semi-annually in arrears on May 1 and November 1 of each year. All interest payments made to date have been in cash. Holdings is a holding company with no operations and has no ability to service interest or principal on the Holdco Notes, other than through dividends it may receive from NBTY. NBTY is restricted, in certain circumstances, from paying dividends to Holdings by the terms of the indenture governing NBTY's 9.00% Senior Notes due 2018 ("Notes") and the senior secured credit facilities. NBTY has not guaranteed the indebtedness of Holdings, nor pledged any of its assets as collateral, and the Holdco Notes are not reflected in NBTY's financial statements. The proceeds from the offering of the Holdco Notes, along with $200,000 of cash on hand from NBTY, as described below, were used to pay transaction fees and expenses, including a consent fee of $17,345 and a $721,682 cash dividend to Holdings' shareholders in October 2012.

        On December 12, 2013, Holdings issued an additional $450,000 in aggregate principal amount of Holdco Notes that mature on November 1, 2017. The additional $450,000 Holdco Notes and the $550,000 of original Holdco Notes previously issued on October 17, 2012 have identical terms and are treated as a single class for all purposes under the indenture governing the Holdco Notes. The gross proceeds from the offering of the $450,000 additional Holdco Notes was $460,125, inclusive of a $10,125 premium, which were used to pay transaction fees and expenses, including a consent fee, totaling $18,560 and a $445,537 dividend to Holdings' shareholders in December 2013.

        Interest on the Holdco Notes shall be payable entirely in cash ("Cash Interest") to the extent that it is less than the maximum amount of allowable dividends and distributions plus any cash at Holdings ("Applicable Amount") as defined by the indenture governing the Holdco Notes. For any interest period after May 1, 2013 (other than the final interest period ending at stated maturity), if the Applicable Amount for such interest period will:

          (i)  equal or exceed 75%, but be less than 100%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 25% of the then outstanding principal amount of the Holdco Notes by increasing the principal amount of the outstanding Holdco Notes or by issuing payment in kind notes ("PIK Notes") in a principal amount equal to such interest and (b) 75% of the then outstanding principal amount of the Holdco Notes as Cash Interest;

         (ii)  equal or exceed 50%, but be less than 75%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 50% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 50% of the then outstanding principal amount of the Holdco Notes as Cash Interest;

        (iii)  equal or exceed 25%, but be less than 50%, of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on (a) 75% of the then outstanding principal amount of the Holdco Notes as PIK Interest and (b) 25% of the then outstanding principal amount of the Holdco Notes as Cash Interest; or

        (iv)  be less than 25% of the aggregate amount of Cash Interest that would otherwise be due on the relevant interest payment date, then Holdings may, at its option, elect to pay interest on the Holdco Notes as PIK Interest.

        As described above, Holdings' ability to pay PIK Interest depends on the calculation of the Applicable Amount regardless of the availability of cash at Holdings.

        All interest payments to date have been in cash and were funded by dividends from NBTY.

        Holdings may redeem the Holdco Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on November 1 of the years set forth below:

Period	Redemption Price
2014		102.00	%
2015		101.00	%
2016 and thereafter		100.00	%

Notes

        On October 1, 2010, NBTY issued $650,000 in aggregate principal amount of senior notes bearing interest at 9% in a private placement. On August 2, 2011, these privately placed notes were exchanged for substantially identical notes that were registered under the Securities Act of 1933, as amended, and therefore are freely tradable (the privately placed notes and such registered notes exchanged therefor, the "Notes"). The Notes are senior unsecured obligations and mature on October 1, 2018. Interest on the Notes is paid on April 1 and October 1 of each year, and commenced on April 1, 2011.

        NBTY may redeem the Notes, at its option, in whole at any time or in part from time to time, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on October 1 of the years set forth below:

Period	Redemption Price
2014		104.50	%
2015		102.25	%
2016 and thereafter		100.00	%

        The Notes are jointly and severally irrevocably and unconditionally guaranteed by each of NBTY's subsidiaries that is a guarantor under the credit agreement. The Notes are uncollateralized and rank senior in right of payment to existing and future indebtedness that is expressly subordinated to the Notes, rank equally in right of payment to NBTY and its subsidiary guarantors' senior unsecured debt, and are effectively junior to any of NBTY or its subsidiary guarantors' secured debt, to the extent of the value of the collateral securing such debt. The Notes contain certain customary covenants including, but not limited to, restrictions on NBTY and its restricted subsidiaries' ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, or pay dividends. NBTY was in compliance with all covenants under the Notes at December 31, 2014.

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Segment Information (Tables)

3 Months Ended

Dec. 31, 2014

Segment Information

Schedule of financial information of business segments

	Total Reportable Business Segments
	Wholesale		European Retail		Direct Response/ E-Commerce		North American Retail		Total		Corporate/ Manufacturing			Consolidated
Three Months Ended December 31, 2014:
Net sales	$	495,126	$	213,597	$	63,143	$	53,905	$	825,771	$	—		$	825,771
Income (loss) from operations		64,829		46,315		6,060		1,304		118,508		(22,983	)		95,525
Depreciation and amortization		9,002		5,049		2,830		895		17,776		10,289			28,065
Capital expenditures		73		10,703		13		1,023		11,812		7,278			19,090
Three Months Ended December 31, 2013:
Net sales	$	505,275	$	204,912	$	60,362	$	56,556	$	827,105	$	—		$	827,105
Income (loss) from operations		82,728		43,960		6,975		2,792		136,455		(22,274	)		114,181
Depreciation and amortization		9,086		4,044		2,812		706		16,648		8,918			25,566
Capital expenditures		31		5,321		570		3,633		9,555		11,692			21,247

Schedule of total assets by segment

	December 31, 2014		September 30, 2014
Reportable Business Segments:
Wholesale	$	2,523,828	$	2,581,069
European Retail		918,555		948,010
Direct Response / E-Commerce		512,527		512,642
North American Retail		107,289		107,442
Total Reportable Business Segments:		4,062,199		4,149,163
Corporate / Manufacturing		788,647		728,559
Consolidated assets	$	4,850,846	$	4,877,722

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Fair Value of Financial Instruments (Details 4) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)	$ 8,733	$ (4,937)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(1,159)	(1,868)
Interest rate swaps | Cash Flow Hedges:
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)	(438)	(783)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	(1,159)	(1,868)
Cross currency swaps | Net Investment Hedges:
Impact on income statement of derivative instruments designated as cash flow and net investment hedging instruments
Amount of Gain or (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)	$ 9,171	$ (4,154)

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Basis of Presentation (Tables)

3 Months Ended

Dec. 31, 2014

Basis of Presentation

Schedule of accounts receivable reserves

	December 31, 2014		September 30, 2014
Promotional program incentive allowances	$	107,852	$	83,768
Allowance for sales returns		13,990		15,409
Allowance for doubtful accounts		2,424		2,564
	$	124,266	$	101,741