Condensed Consolidating Financial Information

The following tables present condensed consolidating financial information for: Owens & Minor, Inc. (O&M); the guarantors of Owens & Minor, Inc.’s 2021 Notes and 2024 Notes, on a combined basis; and the non-guarantor subsidiaries of the 2021 Notes and 2024 Notes, on a combined basis. The guarantor subsidiaries are 100% owned by Owens & Minor, Inc. Separate financial statements of the guarantor subsidiaries are not presented because the guarantees by our guarantor subsidiaries are full and unconditional, as well as joint and several, and we believe the condensed consolidating financial information is more meaningful in understanding the financial position, results of operations and cash flows of the guarantor subsidiaries.



Three Months Ended September 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	2,321,301		$	194,659		$	(44,291	)	$	2,471,669
Cost of goods sold	—			2,106,623			102,923			(44,231		)	2,165,315
Gross margin	—			214,678			91,736			(60		)	306,354
Selling, general and administrative expenses	27			162,697			69,123			—			231,847
Acquisition-related and exit and realignment charges	—			1,980			4,154			—			6,134
Depreciation and amortization	—			8,639			6,473			—			15,112
Other operating income, net	—			(28		)	(283		)	—			(311		)
Operating earnings (loss)	(27		)	41,390			12,269			(60		)	53,572
Interest expense (income), net	7,257			(1,235		)	722			—			6,744
Income (loss) before income taxes	(7,284		)	42,625			11,547			(60		)	46,828
Income tax (benefit) provision	—			10,927			7,725			—			18,652
Equity in earnings of subsidiaries	35,460			—			—			(35,460		)	—
Net income (loss)	28,176			31,698			3,822			(35,520		)	28,176
Other comprehensive income (loss)	2,233			179			2,054			(2,233		)	2,233
Comprehensive income (loss)	$	30,409		$	31,877		$	5,876		$	(37,753	)	$	30,409



Three Months Ended September 30, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	2,261,448		$	141,086		$	(16,408	)	$	2,386,126
Cost of goods sold	—			2,047,328			62,850			(16,535		)	2,093,643
Gross margin	—			214,120			78,236			127			292,483
Selling, general and administrative expenses	25			155,950			75,402			—			231,377
Acquisition-related and exit and realignment charges	—			7,893			6,064			—			13,957
Depreciation and amortization	—			8,966			4,875			—			13,841
Other operating income, net	—			(1,167		)	(1,235		)	333			(2,069		)
Operating earnings (loss)	(25		)	42,478			(6,870		)	(206		)	35,377
Interest expense (income), net	3,925			1,002			(623		)	—			4,304
Loss on early retirement of debt	14,890			—			—			—			14,890
Income (loss) before income taxes	(18,840		)	41,476			(6,247		)	(206		)	16,183
Income tax (benefit) provision	(7,144		)	16,463			(291		)	—			9,028
Equity in earnings of subsidiaries	18,851			—			—			(18,851		)	—
Net income (loss)	7,155			25,013			(5,956		)	(19,057		)	7,155
Other comprehensive income (loss)	(16,797		)	131			(16,795		)	16,664			(16,797		)
Comprehensive income (loss)	$	(9,642	)	$	25,144		$	(22,751	)	$	(2,393	)	$	(9,642	)



Nine Months Ended September 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	6,850,731		$	554,862		$	(120,561	)	$	7,285,032
Cost of goods sold	—			6,204,950			298,530			(120,740		)	6,382,740
Gross margin	—			645,781			256,332			179			902,292
Selling, general and administrative expenses	696			483,616			212,858			—			697,170
Acquisition-related and exit and realignment charges	—			5,813			15,944			—			21,757
Depreciation and amortization	—			26,653			19,788			—			46,441
Other operating income, net	—			(2,360		)	(3,124		)	—			(5,484		)
Operating earnings (loss)	(696		)	132,059			10,866			179			142,408
Interest expense (income), net	20,142			(654		)	817			—			20,305
Income (loss) before income taxes	(20,838		)	132,713			10,049			179			122,103
Income tax (benefit) provision	(773		)	42,683			8,851			—			50,761
Equity in earnings of subsidiaries	91,407			—			—			(91,407		)	—
Net income (loss)	71,342			90,030			1,198			(91,228		)	71,342
Other comprehensive income (loss)	(18,554		)	726			(19,280		)	18,554			(18,554		)
Comprehensive income (loss)	$	52,788		$	90,756		$	(18,082	)	$	(72,674	)	$	52,788



Nine Months Ended September 30, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income
Net revenue	$	—		$	6,596,941		$	398,646		$	(47,222	)	$	6,948,365
Cost of goods sold	—			5,965,607			173,747			(46,941		)	6,092,413
Gross margin	—			631,334			224,899			(281		)	855,952
Selling, general and administrative expenses	36			462,325			220,464			—			682,825
Acquisition-related and exit and realignment charges	—			13,074			11,739			—			24,813
Depreciation and amortization	2			26,703			14,892			—			41,597
Other operating income, net	—			(9,043		)	(3,336		)	333			(12,046		)
Operating earnings (loss)	(38		)	138,275			(18,860		)	(614		)	118,763
Interest expense (income), net	9,328			3,502			(1,937		)	—			10,893
Loss on early retirement of debt	14,890			—			—			—			14,890
Income (loss) before income taxes	(24,256		)	134,773			(16,923		)	(614		)	92,980
Income tax (benefit) provision	(9,299		)	53,989			(4,226		)	—			40,464
Equity in earnings of subsidiaries	67,473			—			—			(67,473		)	—
Net income (loss)	52,516			80,784			(12,697		)	(68,087		)	52,516
Other comprehensive income (loss)	(16,675		)	350			(16,898		)	16,548			(16,675		)
Comprehensive income (loss)	$	35,841		$	81,134		$	(29,595	)	$	(51,539	)	$	35,841



September 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	82,189		$	18,768		$	24,288		$	—		$	125,245
Accounts and notes receivable, net	—			506,406			142,912			(8,665		)	640,653
Merchandise inventories	—			839,533			61,416			(4,227		)	896,722
Other current assets	202			89,582			174,706			1,268			265,758
Total current assets	82,391			1,454,289			403,322			(11,624		)	1,928,378
Property and equipment, net	—			104,905			109,656			—			214,561
Goodwill	—			247,271			173,501			—			420,772
Intangible assets, net	—			14,249			83,835			—			98,084
Due from O&M and subsidiaries	—			509,462			—			(509,462		)	—
Advances to and investment in consolidated subsidiaries	1,965,108			—			—			(1,965,108		)	—
Other assets, net	4,226			59,846			25,793			—			89,865
Total assets	$	2,051,725		$	2,390,022		$	796,107		$	(2,486,194	)	$	2,751,660
Liabilities and equity
Current liabilities
Accounts payable	$	—		$	644,126		$	53,607		$	(7,599	)	$	690,134
Accrued payroll and related liabilities	—			26,541			12,293			—			38,834
Deferred income taxes	—			44,135			(2,372		)	—			41,763
Other accrued liabilities	7,203			98,719			190,976			—			296,898
Total current liabilities	7,203			813,521			254,504			(7,599		)	1,067,629
Long-term debt, excluding current portion	547,975			5,007			21,051			—			574,033
Due to O&M and subsidiaries	510,446			—			69,535			(579,981		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			32,580			28,457			—			61,037
Other liabilities	—			55,353			7,507			—			62,860
Total liabilities	1,065,624			1,045,351			381,054			(726,470		)	1,765,559
Equity
Common stock	125,863			—			—			—			125,863
Paid-in capital	208,216			241,877			513,300			(755,177		)	208,216
Retained earnings (deficit)	694,577			1,112,404			(65,278		)	(1,047,126		)	694,577
Accumulated other comprehensive income (loss)	(42,555		)	(9,610		)	(32,969		)	42,579			(42,555		)
Total equity	986,101			1,344,671			415,053			(1,759,724		)	986,101
Total liabilities and equity	$	2,051,725		$	2,390,022		$	796,107		$	(2,486,194	)	$	2,751,660



December 31, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	22,013		$	3,912		$	30,847		$	—		$	56,772
Accounts and notes receivable, net	—			519,951			144,463			(38,222		)	626,192
Merchandise inventories	—			816,915			60,061			(4,519		)	872,457
Other current assets	(24,748		)	90,733			224,220			25,080			315,285
Total current assets	(2,735		)	1,431,511			459,591			(17,661		)	1,870,706
Property and equipment, net	—			110,076			122,903			—			232,979
Goodwill, net	—			247,271			176,005			—			423,276
Intangible assets, net	—			15,805			92,788			—			108,593
Due from O&M and subsidiaries	—			357,304			—			(357,304		)	—
Advances to and investments in consolidated subsidiaries	1,893,767			—			—			(1,893,767		)	—
Other assets, net	4,637			66,836			28,379			—			99,852
Total assets	$	1,895,669		$	2,228,803		$	879,666		$	(2,268,732	)	$	2,735,406
Liabilities and equity
Current liabilities
Accounts payable	$	—		$	567,285		$	54,898		$	(13,337	)	$	608,846
Accrued payroll and related liabilities	—			16,434			15,073			—			31,507
Deferred income taxes	—			39,667			(1,688		)	—			37,979
Other current liabilities	6,441			83,698			236,084			—			326,223
Total current liabilities	6,441			707,084			304,367			(13,337		)	1,004,555
Long-term debt, excluding current portion	547,763			39,915			20,873			—			608,551
Due to O&M and subsidiaries	350,627			—			77,788			(428,415		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			33,162			30,739			—			63,901
Other liabilities	—			55,794			11,767			—			67,561
Total liabilities	904,831			974,845			445,534			(580,642		)	1,744,568
Equity													—
Common stock	126,140			—			—			—			126,140
Paid-in capital	202,934			241,877			514,314			(756,191		)	202,934
Retained earnings (deficit)	685,765			1,022,379			(66,479		)	(955,900		)	685,765
Accumulated other comprehensive income (loss)	(24,001		)	(10,298		)	(13,703		)	24,001			(24,001		)
Total equity	990,838			1,253,958			434,132			(1,688,090		)	990,838
Total liabilities and equity	$	1,895,669		$	2,228,803		$	879,666		$	(2,268,732	)	$	2,735,406



Nine Months Ended September 30, 2015	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Cash Flows
Operating activities:
Net income (loss)	$	71,342		$	90,030		$	1,198		$	(91,228	)	$	71,342
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	(91,407		)	—			—			91,407			—
Depreciation and amortization	—			26,653			25,218			—			51,871
Share-based compensation expense	—			7,611			—			—			7,611
Provision for losses on accounts and notes receivable	—			(36		)	(146		)	—			(182		)
Deferred income tax expense (benefit)	—			2,957			686			—			3,643
Changes in operating assets and liabilities:
Accounts and notes receivable	—			14,416			(33,212		)	5,038			(13,758		)
Merchandise inventories	—			(22,618		)	(5,203		)	2,482			(25,339		)
Accounts payable	—			76,841			12,046			(5,453		)	83,434
Net change in other assets and liabilities	847			26,282			1,007			(2,246		)	25,890
Other, net	641			740			145			—			1,526
Cash provided by (used for) operating activities	(18,577		)	222,876			1,739			—			206,038
Investing activities:
Additions to property and equipment	—			(10,728		)	(4,593		)	—			(15,321		)
Additions to computer software and intangible assets	—			(1,670		)	(15,206		)	—			(16,876		)
Proceeds from the sale of property and equipment	—			82			37			—			119
Cash used for investing activities	—			(12,316		)	(19,762		)	—			(32,078		)
Financing activities:
Repayment of revolving credit facility	—			(33,700		)	—			—			(33,700		)
Change in intercompany advances	143,872			(160,123		)	16,251			—			—
Cash dividends paid	(47,780		)	—			—			—			(47,780		)
Repurchases of common stock	(15,821		)	—			—			—			(15,821		)
Excess tax benefits related to share-based compensation	521			—			—			—			521
Other, net	(2,039		)	(1,881		)	(2,376		)	—			(6,296		)
Cash provided by (used for) financing activities	78,753			(195,704		)	13,875			—			(103,076		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(2,411		)	—			(2,411		)
Net increase (decrease) in cash and cash equivalents	60,176			14,856			(6,559		)	—			68,473
Cash and cash equivalents at beginning of period	22,013			3,912			30,847			—			56,772
Cash and cash equivalents at end of period	$	82,189		$	18,768		$	24,288		$	—		$	125,245



Nine Months Ended September 30, 2014	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Cash Flows
Operating activities:
Net income (loss)	$	52,516		$	80,784		$	(12,697	)	$	(68,087	)	$	52,516
Adjustments to reconcile net income to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	(67,473		)	—			—			67,473			—
Depreciation and amortization	2			26,703			14,892			—			41,597
Loss on early retirement of debt	14,890			—			—			—			14,890
Share-based compensation expense	—			6,136			—			—			6,136
Provision for losses on accounts and notes receivable	—			146			(502		)	—			(356		)
Deferred income tax expense (benefit)	—			(3,470		)	(3,917		)	—			(7,387		)
Changes in operating assets and liabilities:
Accounts and notes receivable	—			(280		)	(21,628		)	452			(21,456		)
Merchandise inventories	—			(53,410		)	(10,752		)	279			(63,883		)
Accounts payable	6			53,409			174			1,045			54,634
Net change in other assets and liabilities	2,562			(1,907		)	3,638			(1,162		)	3,131
Other, net	(1,162		)	(98		)	2,582			—			1,322
Cash provided by (used for) operating activities	1,341			108,013			(28,210		)	—			81,144
Investing activities:
Additions to property and equipment	—			(24,662		)	(11,507		)	—			(36,169		)
Additions to computer software and intangible assets	—			(15,448		)	(2,540		)	—			(17,988		)
Proceeds from the sale of investment	—			1,937			—			—			1,937
Proceeds from the sale of property and equipment	—			137			14			—			151
Cash used for investing activities	—			(38,036		)	(14,033		)	—			(52,069		)
Financing activities:
Long-term borrowings	547,693			—			—			—			547,693
Change in intercompany advances	2,024			(36,874		)	34,850			—			—
Cash dividends paid	(47,335		)	—			—			—			(47,335		)
Repurchases of common stock	(9,934		)	—			—			—			(9,934		)
Excess tax benefits related to share-based compensation	514			—			—			—			514
Proceeds from exercise of stock options	1,180			—			—			—			1,180
Purchase of noncontrolling interest	—			—			(1,500		)	—			(1,500		)
Debt issuance costs	(4,178		)	—			—			—			(4,178		)
Other, net	(2,137		)	(2,191		)	(1,343		)	—			(5,671		)
Cash provided by (used for) financing activities	487,827			(39,065		)	32,007			—			480,769
Effect of exchange rate changes on cash and cash equivalents	—			—			(1,602		)	—			(1,602		)
Net increase (decrease) in cash and cash equivalents	489,168			30,912			(11,838		)	—			508,242
Cash and cash equivalents at beginning of period	74,391			2,012			25,502			—			101,905
Cash and cash equivalents at end of period	$	563,559		$	32,924		$	13,664		$	—		$	610,147