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, 2018	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income (Loss)
Net revenue	$	—		$	2,242,265		$	464,567		$	(241,955	)	$	2,464,877
Cost of goods sold	—			2,015,614			335,819			(239,130		)	2,112,303
Gross margin	—			226,651			128,748			(2,825		)	352,574
Distribution, selling and administrative expenses	92			191,831			133,089			—			325,012
Acquisition-related and exit and realignment charges	—			6,818			909			—			7,727
Other operating (income) expense, net	—			(1,156		)	(366		)	—			(1,522		)
Operating income (loss)	(92		)	29,158			(4,884		)	(2,825		)	21,357
Interest expense (income), net	6,554			15,717			1,555			—			23,826
Income (loss) before income taxes	(6,646		)	13,441			(6,439		)	(2,825		)	(2,469		)
Income tax provision (benefit)	(1,729		)	2,163			(2,338		)	—			(1,904		)
Equity in earnings of subsidiaries	4,352			(12,284		)	—			7,932			—
Net income (loss)	(565		)	(1,006		)	(4,101		)	5,107			(565		)
Other comprehensive income (loss)	3,032			3,674			3,032			(6,706		)	3,032
Comprehensive income (loss)	$	2,467		$	2,668		$	(1,069	)	$	(1,599	)	$	2,467



Three Months Ended September 30, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income (Loss)
Net revenue	$	—		$	2,113,450		$	264,765		$	(44,254	)	$	2,333,961
Cost of goods sold	—			1,919,049			157,439			(44,469		)	2,032,019
Gross margin	—			194,401			107,326			215			301,942
Distribution, selling and administrative expenses	(117		)	159,108			102,054			—			261,045
Acquisition-related and exit and realignment charges	—			6,960			2,339			—			9,299
Other operating (income) expense, net	—			448			1,479			—			1,927
Operating income (loss)	117			27,885			1,454			215			29,671
Interest expense (income), net	7,018			(1,184		)	2,903			—			8,737
Income (loss) before income taxes	(6,901		)	29,069			(1,449		)	215			20,934
Income tax provision (benefit)	—			7,881			2,182			—			10,063
Equity in earnings of subsidiaries	17,772			(4,105		)	—			(13,667		)	—
Net income (loss)	10,871			17,083			(3,631		)	(13,452		)	10,871
Other comprehensive income (loss)	12,584			12,905			12,254			(25,159		)	12,584
Comprehensive income (loss)	$	23,455		$	29,988		$	8,623		$	(38,611	)	$	23,455



Nine Months Ended September 30, 2018	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Income (Loss)
Net revenue	$	—		$	6,572,420		$	1,163,679		$	(440,372	)	$	7,295,727
Cost of goods sold	—			5,960,655			769,936			(437,117		)	6,293,474
Gross margin	—			611,765			393,743			(3,255		)	1,002,253
Distribution, selling and administrative expenses	853			531,665			385,629			—			918,147
Acquisition-related and exit and realignment charges	—			44,075			3,341			—			47,416
Goodwill and intangible asset impairment charges	—			—			165,447			—			165,447
Other operating (income) expense, net	—			2,447			(4,728		)	—			(2,281		)
Operating income (loss)	(853		)	33,578			(155,946		)	(3,255		)	(126,476		)
Interest expense (income), net	20,167			28,061			4,423			—			52,651
Income (loss) before income taxes	(21,020		)	5,517			(160,369		)	(3,255		)	(179,127		)
Income tax provision (benefit)	(5,465		)	(278		)	1,807			—			(3,936		)
Equity in earnings of subsidiaries	(159,636		)	(45,994		)	—			205,630			—
Net income (loss)	(175,191		)	(40,199		)	(162,176		)	202,375			(175,191		)
Other comprehensive income (loss)	(8,087		)	(7,619		)	(8,086		)	15,705			(8,087		)
Comprehensive income (loss)	$	(183,278	)	$	(47,818	)	$	(170,262	)	$	218,080		$	(183,278	)



Nine Months Ended September 30, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries		Eliminations			Consolidated
Statements of Income (Loss)
Net revenue	$	—		$	6,436,599		$	635,900	$	(144,058	)	$	6,928,441
Cost of goods sold	—			5,845,789			369,596		(143,598		)	6,071,787
Gross margin	—			590,810			266,304		(460		)	856,654
Distribution, selling and administrative expenses	434			480,765			254,154		—			735,353
Acquisition-related and exit and realignment charges	—			17,084			4,050		—			21,134
Other operating (income) expense, net	—			1,481			662		—			2,143
Operating income (loss)	(434		)	91,480			7,438		(460		)	98,024
Interest expense (income), net	20,756			(2,777		)	4,239		—			22,218
Income (loss) before income taxes	(21,190		)	94,257			3,199		(460		)	75,806
Income tax provision (benefit)	—			23,303			2,707		—			26,010
Equity in earnings of subsidiaries	70,986			(2,682		)	—		(68,304		)	—
Net income (loss)	49,796			68,272			492		(68,764		)	49,796
Other comprehensive income (loss)	41,141			41,910			40,151		(82,061		)	41,141
Comprehensive income (loss)	$	90,937		$	110,182		$	40,643	$	(150,825	)	$	90,937



September 30, 2018	Owens & Minor, Inc.			Guarantor Subsidiaries			Non- guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	67,240		$	—		$	57,650		$	—		$	124,890
Accounts receivable, net	—			742,145			410,172			(282,130		)	870,187
Merchandise inventories	—			1,012,385			196,286			(4,833		)	1,203,838
Other current assets	204			121,833			171,956						293,993
Total current assets	67,444			1,876,363			836,064			(286,963		)	2,492,908
Property and equipment, net	—			202,091			141,619			—			343,710
Goodwill, net	—			382,772			378,401			—			761,173
Intangible assets, net	—			191,547			140,625			—			332,172
Due from O&M and subsidiaries	—			633,839			—			(633,839		)	—
Advances to and investment in consolidated subsidiaries	1,955,218			489,349			—			(2,444,567		)	—
Other assets, net	—			63,071			39,247			—			102,318
Total assets	$	2,022,662		$	3,839,032		$	1,535,956		$	(3,365,369	)	$	4,032,281
Liabilities and equity
Current liabilities
Accounts payable	$	—		$	1,052,834		$	348,069		$	(293,362	)	$	1,107,541
Accrued payroll and related liabilities	—			19,980			27,424			—			47,404
Other current liabilities	22,797			128,488			150,515						301,800
Total current liabilities	22,797			1,201,302			526,008			(293,362		)	1,456,745
Long-term debt, excluding current portion	546,082			1,080,426			13,947			—			1,640,455
Due to O&M and subsidiaries	661,370			—			526,764			(1,188,134		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			19,361			47,084			—			66,445
Other liabilities	—			60,125			16,098			—			76,223
Total liabilities	1,230,249			2,500,104			1,129,901			(1,620,386		)	3,239,868
Equity
Common stock	124,538			—			—			—			124,538
Paid-in capital	233,920			174,614			643,031			(817,645		)	233,920
Retained earnings (deficit)	467,126			1,195,966			(215,591		)	(980,375		)	467,126
Accumulated other comprehensive income (loss)	(33,171		)	(31,652		)	(21,385		)	53,037			(33,171		)
Total equity	792,413			1,338,928			406,055			(1,744,983		)	792,413
Total liabilities and equity	$	2,022,662		$	3,839,032		$	1,535,956		$	(3,365,369	)	$	4,032,281



December 31, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Balance Sheets
Assets
Current assets
Cash and cash equivalents	$	13,700		$	865		$	89,957		$	—		$	104,522
Accounts receivable, net	—			559,269			206,410			(6,743		)	758,936
Merchandise inventories	—			902,190			89,580			(1,577		)	990,193
Other current assets	100			123,067			205,087			—			328,254
Total current assets	13,800			1,585,391			591,034			(8,320		)	2,181,905
Property and equipment, net	—			107,010			99,480			—			206,490
Goodwill, net	—			180,006			533,805			—			713,811
Intangible assets, net	—			9,582			174,886			—			184,468
Due from O&M and subsidiaries	—			439,654			—			(439,654		)	—
Advances to and investments in consolidated subsidiaries	2,114,853			558,429			—			(2,673,282		)	—
Other assets, net	—			57,724			31,895			—			89,619
Total assets	$	2,128,653		$	2,937,796		$	1,431,100		$	(3,121,256	)	$	3,376,293
Liabilities and equity
Current liabilities
Accounts payable	$	—		$	824,307		$	130,028		$	(6,763	)	$	947,572
Accrued payroll and related liabilities	—			15,504			14,912			—			30,416
Other current liabilities	5,822			140,048			185,875			—			331,745
Total current liabilities	5,822			979,859			330,815			(6,763		)	1,309,733
Long-term debt, excluding current portion	545,352			340,672			14,720			—			900,744
Due to O&M and subsidiaries	562,000			—			506,703			(1,068,703		)	—
Intercompany debt	—			138,890			—			(138,890		)	—
Deferred income taxes	—			25,493			48,754			—			74,247
Other liabilities	—			66,136			9,954			—			76,090
Total liabilities	1,113,174			1,551,050			910,946			(1,214,356		)	2,360,814
Equity
Common stock	122,952			—			—			—			122,952
Paid-in capital	226,937			174,614			583,869			(758,483		)	226,937
Retained earnings (deficit)	690,674			1,236,165			(50,416		)	(1,185,749		)	690,674
Accumulated other comprehensive income (loss)	(25,084		)	(24,033		)	(13,299		)	37,332			(25,084		)
Total equity	1,015,479			1,386,746			520,154			(1,906,900		)	1,015,479
Total liabilities and equity	$	2,128,653		$	2,937,796		$	1,431,100		$	(3,121,256	)	$	3,376,293



Nine Months Ended September 30, 2018	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Cash Flows
Operating activities:
Net income (loss)	$	(175,191	)	$	(40,199	)	$	(162,176	)	$	202,375		$	(175,191	)
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	159,636			45,994			—			(205,630		)	—
Intercompany dividend	—			15,000			—			(15,000		)	—
Depreciation and amortization	—			25,146			48,450			—			73,596
Share-based compensation expense	—			10,499			—			—			10,499
Goodwill and intangible asset impairment charges	—			—			165,447			—			165,447
Provision for losses on accounts receivable	—			(1,206		)	6,963			—			5,757
Deferred income tax (benefit) expense	—			(6,506		)	(248		)	—			(6,754		)
Changes in operating assets and liabilities:
Accounts receivable	—			(111,108		)	(215,882		)	275,387			(51,603		)
Merchandise inventories	—			124,822			(106,832		)	3,254			21,244
Accounts payable	—			154,987			219,805			(286,594		)	88,198
Net change in other assets and liabilities	16,959			(76,608		)	36,919			11,208			(11,522		)
Other, net	641			988			1,209			—			2,838
Cash provided by (used for) operating activities	2,045			141,809			(6,345		)	(15,000		)	122,509
Investing activities:
Acquisitions, net of cash acquired	—			(751,834		)	—						(751,834		)
Additions to property and equipment	—			(20,754		)	(11,735		)	—			(32,489		)
Additions to computer software and intangible assets	—			(12,351		)	(2,465		)	—			(14,816		)
Proceeds from the sale of property and equipment	—			—			258			—			258
Cash used for investing activities	—			(784,939		)	(13,942		)	—			(798,881		)
Financing activities:
Change in intercompany advances	85,643			(89,239		)	3,596			—			—
Intercompany dividend	—			—			(15,000		)	15,000			—
Proceeds from issuance of debt	—			695,750			—			—			695,750
Financing costs paid	—			(28,512		)	—			—			(28,512		)
Repayments of debt	—			(9,375		)	—			—			(9,375		)
Proceeds from revolving credit facility	—			74,762			—			—			74,762
Cash dividends paid	(32,151		)	—			—			—			(32,151		)
Other, net	(1,997		)	(1,121		)	(2,190		)	—			(5,308		)
Cash provided by (used for) financing activities	51,495			642,265			(13,594		)	15,000			695,166
Effect of exchange rate changes on cash and cash equivalents	—			—			1,574			—			1,574
Net increase (decrease) in cash and cash equivalents	53,540			(865		)	(32,307		)	—			20,368
Cash and cash equivalents at beginning of period	13,700			865			89,957			—			104,522
Cash and cash equivalents at end of period	$	67,240		$	—		$	57,650		$	—		$	124,890



Nine Months Ended September 30, 2017	Owens & Minor, Inc.			Guarantor Subsidiaries			Non-guarantor Subsidiaries			Eliminations			Consolidated
Statements of Cash Flows
Operating activities:
Net income (loss)	$	49,796		$	68,272		$	492		$	(68,764	)	$	49,796
Adjustments to reconcile net income (loss) to cash provided by (used for) operating activities:
Equity in earnings of subsidiaries	(70,986		)	2,682			—			68,304			—
Depreciation and amortization	—			23,281			17,779			—			41,060
Share-based compensation expense	—			8,592			—			—			8,592
Provision for losses on accounts receivable	—			(377		)	1,535			—			1,158
Deferred income tax (benefit) expense	—			(1,208		)	(3,377		)	—			(4,585		)
Changes in operating assets and liabilities:
Accounts receivable	—			(68,655		)	(8,047		)	(2,412		)	(79,114		)
Merchandise inventories	—			(52,840		)	(3,753		)	459			(56,134		)
Accounts payable	—			85,591			(8,217		)	2,413			79,787
Net change in other assets and liabilities	(65		)	(25,431		)	(15,138		)	—			(40,634		)
Other, net	(1		)	5,716			4			—			5,719
Cash provided by (used for) operating activities	(21,256		)	45,623			(18,722		)	—			5,645
Investing activities:
Acquisitions, net of cash acquired	—			—			(366,569		)	—			(366,569		)
Additions to property and equipment	—			(17,884		)	(7,079		)	—			(24,963		)
Additions to computer software and intangible assets	—			(5,333		)	(7,493		)	—			(12,826		)
Proceeds from the sale of property and equipment	—			198			582			—			780
Cash used for investing activities	—			(23,019		)	(380,559		)	—			(403,578		)
Financing activities:
Change in intercompany advances	50,452			(87,278		)	36,826			—			—
Proceeds from debt issuance	—			—			250,000			—			250,000
Borrowings from revolving credit facility	—			6,013			111,187			—			117,200
Financing costs paid	—			—			(1,798		)	—			(1,798		)
Cash dividends paid	(47,316		)	—			—			—			(47,316		)
Repurchases of common stock	(5,000		)	—			—			—			(5,000		)
Other, net	(3,439		)	(1,460		)	(2,464		)	—			(7,363		)
Cash provided by (used for) financing activities	(5,303		)	(82,725		)	393,751			—			305,723
Effect of exchange rate changes on cash and cash equivalents	—			—			5,137			—			5,137
Net increase (decrease) in cash and cash equivalents	(26,559		)	(60,121		)	(393		)	—			(87,073		)
Cash and cash equivalents at beginning of period	38,015			61,266			86,207			—			185,488
Cash and cash equivalents at end of period	$	11,456		$	1,145		$	85,814		$	—		$	98,415