| Condensed Consolidating Balance Sheets |
CONDENSED CONSOLIDATING BALANCE SHEETS | | | | | | | | | | | | | | | | | | | | | | February 28, 2014 | (in millions) | Biomet, Inc. | | Guarantors | | Non-Guarantors | | Eliminations | | Total | Assets | | | | | | | | | | Current assets: | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | 30.6 |
| | $ | 181.8 |
| | $ | — |
| | $ | 212.4 |
| Accounts receivable, net | — |
| | 298.9 |
| | 284.0 |
| | — |
| | 582.9 |
| Inventories, net | — |
| | 356.5 |
| | 327.9 |
| | — |
| | 684.4 |
| Deferred income taxes | — |
| | 114.5 |
| | 37.1 |
| | — |
| | 151.6 |
| Prepaid expenses and other | — |
| | 63.6 |
| | 71.4 |
| | — |
| | 135.0 |
| Total current assets | — |
| | 864.1 |
| | 902.2 |
| | — |
| | 1,766.3 |
| Property, plant and equipment, net | — |
| | 382.1 |
| | 308.8 |
| | — |
| | 690.9 |
| Investments | — |
| | 11.8 |
| | 15.2 |
| | — |
| | 27.0 |
| Investment in subsidiaries | 7,865.8 |
| | — |
| | — |
| | (7,865.8 | ) | | — |
| Intangible assets, net | — |
| | 2,754.6 |
| | 704.2 |
| | — |
| | 3,458.8 |
| Goodwill | — |
| | 3,178.1 |
| | 478.7 |
| | — |
| | 3,656.8 |
| Other assets | — |
| | 85.6 |
| | 11.4 |
| | — |
| | 97.0 |
| Total assets | $ | 7,865.8 |
| | $ | 7,276.3 |
| | $ | 2,420.5 |
| | $ | (7,865.8 | ) | | $ | 9,696.8 |
| Liabilities & Shareholder’s Equity | | | | | | | | | | Current liabilities: | | | | | | | | | | Current portion of long-term debt | $ | 31.0 |
| | $ | — |
| | $ | 2.2 |
| | $ | — |
| | $ | 33.2 |
| Accounts payable | — |
| | 60.3 |
| | 44.8 |
| | — |
| | 105.1 |
| Accrued interest | 35.4 |
| | — |
| | — |
| | — |
| | 35.4 |
| Accrued wages and commissions | — |
| | 82.7 |
| | 67.2 |
| | — |
| | 149.9 |
| Other accrued expenses | — |
| | 244.3 |
| | 76.5 |
| | — |
| | 320.8 |
| Total current liabilities | 66.4 |
| | 387.3 |
| | 190.7 |
| | — |
| | 644.4 |
| Long-term debt | 5,798.5 |
| | — |
| | — |
| | — |
| | 5,798.5 |
| Deferred income taxes | — |
| | 819.6 |
| | 238.8 |
| | — |
| | 1,058.4 |
| Other long-term liabilities | — |
| | 124.3 |
| | 70.3 |
| | — |
| | 194.6 |
| Total liabilities | 5,864.9 |
| | 1,331.2 |
| | 499.8 |
| | — |
| | 7,695.9 |
| Shareholder’s equity | 2,000.9 |
| | 5,945.1 |
| | 1,920.7 |
| | (7,865.8 | ) | | 2,000.9 |
| Total liabilities and shareholder’s equity | $ | 7,865.8 |
| | $ | 7,276.3 |
| | $ | 2,420.5 |
| | $ | (7,865.8 | ) | | $ | 9,696.8 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | May 31, 2013 | (in millions) | Biomet, Inc. | | Guarantors | | Non-Guarantors | | Eliminations | | Total | Assets | | | | | | | | | | Current assets: | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | 35.3 |
| | $ | 320.3 |
| | $ | — |
| | $ | 355.6 |
| Accounts receivable, net | — |
| | 254.1 |
| | 277.7 |
| | — |
| | 531.8 |
| Inventories | — |
| | 286.9 |
| | 337.1 |
| | — |
| | 624.0 |
| Deferred income taxes | — |
| | 78.3 |
| | 41.6 |
| | — |
| | 119.9 |
| Prepaid expenses and other | — |
| | 73.7 |
| | 67.6 |
| | — |
| | 141.3 |
| Total current assets | — |
| | 728.3 |
| | 1,044.3 |
| | — |
| | 1,772.6 |
| Property, plant and equipment, net | — |
| | 350.1 |
| | 315.1 |
| | — |
| | 665.2 |
| Investments | — |
| | 10.9 |
| | 12.1 |
| | — |
| | 23.0 |
| Investment in subsidiaries | 7,982.8 |
| | — |
| | — |
| | (7,982.8 | ) | | — |
| Intangible assets, net | — |
| | 2,890.4 |
| | 739.8 |
| | — |
| | 3,630.2 |
| Goodwill | — |
| | 3,104.0 |
| | 496.9 |
| | — |
| | 3,600.9 |
| Other assets | — |
| | 88.9 |
| | 13.9 |
| | — |
| | 102.8 |
| Total assets | $ | 7,982.8 |
| | $ | 7,172.6 |
| | $ | 2,622.1 |
| | $ | (7,982.8 | ) | | $ | 9,794.7 |
| Liabilities & Shareholder’s Equity | | | | | | | | | | Current liabilities: | | | | | | | | | | Current portion of long-term debt | $ | 33.3 |
| | $ | — |
| | $ | 7.0 |
| | $ | — |
| | $ | 40.3 |
| Accounts payable | — |
| | 63.8 |
| | 47.7 |
| | — |
| | 111.5 |
| Accrued interest | 56.1 |
| | — |
| | 0.1 |
| | — |
| | 56.2 |
| Accrued wages and commissions | — |
| | 82.1 |
| | 68.0 |
| | — |
| | 150.1 |
| Other accrued expenses | — |
| | 141.7 |
| | 64.3 |
| | — |
| | 206.0 |
| Total current liabilities | 89.4 |
| | 287.6 |
| | 187.1 |
| | — |
| | 564.1 |
| Long-term debt | 5,924.8 |
| | — |
| | 1.3 |
| | — |
| | 5,926.1 |
| Deferred income taxes | — |
| | 942.0 |
| | 187.8 |
| | — |
| | 1,129.8 |
| Other long-term liabilities | — |
| | 142.9 |
| | 63.2 |
| | — |
| | 206.1 |
| Total liabilities | 6,014.2 |
| | 1,372.5 |
| | 439.4 |
| | — |
| | 7,826.1 |
| Shareholder’s equity | 1,968.6 |
| | 5,800.1 |
| | 2,182.7 |
| | (7,982.8 | ) | | 1,968.6 |
| Total liabilities and shareholder’s equity | $ | 7,982.8 |
| | $ | 7,172.6 |
| | $ | 2,622.1 |
| | $ | (7,982.8 | ) | | $ | 9,794.7 |
|
|
| Condensed Consolidating Statements of Operations and Comprehensive Income (Loss) |
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | | | | | | | | | | | | | | | | | | | | | | Three Months Ended February 28, 2014 | (in millions) | Biomet, Inc. | | Guarantors | | Non-Guarantors | | Eliminations | | Total | Net sales | $ | — |
| | $ | 527.6 |
| | $ | 294.9 |
| | $ | — |
| | $ | 822.5 |
| Cost of sales | — |
| | 272.4 |
| | 54.5 |
| | — |
| | 326.9 |
| Gross profit | — |
| | 255.2 |
| | 240.4 |
| | — |
| | 495.6 |
| Selling, general and administrative expense | — |
| | 238.3 |
| | 128.1 |
| | — |
| | 366.4 |
| Research and development expense | — |
| | 31.3 |
| | 11.2 |
| | — |
| | 42.5 |
| Amortization | — |
| | 73.0 |
| | 13.5 |
| | — |
| | 86.5 |
| Operating income | — |
| | (87.4 | ) | | 87.6 |
| | — |
| | 0.2 |
| Other (income) expense, net | 78.5 |
| | (0.6 | ) | | 2.7 |
| | — |
| | 80.6 |
| Income (loss) before income taxes | (78.5 | ) | | (86.8 | ) | | 84.9 |
| | — |
| | (80.4 | ) | Tax expense (benefit) | (29.8 | ) | | (33.1 | ) | | 48.4 |
| | — |
| | (14.5 | ) | Equity in earnings of subsidiaries | (17.2 | ) | | — |
| | — |
| | 17.2 |
| | — |
| Net income (loss) | $ | (65.9 | ) | | $ | (53.7 | ) | | $ | 36.5 |
| | $ | 17.2 |
| | $ | (65.9 | ) | Other comprehensive income (loss) | $ | 3.4 |
| | $ | — |
| | $ | (10.7 | ) | | $ | — |
| | $ | (7.3 | ) | Total comprehensive income (loss) | $ | (62.5 | ) | | $ | (53.7 | ) | | $ | 25.8 |
| | $ | 17.2 |
| | $ | (73.2 | ) | | | | | | | | | | | | | | | | | | | | | | Three Months Ended February 28, 2013 | (in millions) | Biomet, Inc. | | Guarantors | | Non-Guarantors | | Eliminations | | Total | Net sales | $ | — |
| | $ | 487.3 |
| | $ | 284.2 |
| | $ | — |
| | $ | 771.5 |
| Cost of sales | — |
| | 191.0 |
| | 47.5 |
| | — |
| | 238.5 |
| Gross profit | — |
| | 296.3 |
| | 236.7 |
| | — |
| | 533.0 |
| Selling, general and administrative expense | — |
| | 205.2 |
| | 122.0 |
| | — |
| | 327.2 |
| Research and development expense | — |
| | 25.5 |
| | 9.5 |
| | — |
| | 35.0 |
| Amortization | — |
| | 66.0 |
| | 8.1 |
| | — |
| | 74.1 |
| Goodwill impairment charge | — |
| | 167.9 |
| | 65.1 |
| | — |
| | 233.0 |
| Intangible assets impairment charge | — |
| | 101.1 |
| | — |
| | — |
| | 101.1 |
| Operating income (loss) | — |
| | (269.4 | ) | | 32.0 |
| | — |
| | (237.4 | ) | Other (income) expense, net | 90.7 |
| | 4.3 |
| | 4.7 |
| | — |
| | 99.7 |
| Income (loss) before income taxes | (90.7 | ) | | (273.7 | ) | | 27.3 |
| | — |
| | (337.1 | ) | Tax expense (benefit) | (34.5 | ) | | (127.3 | ) | | 129.2 |
| | — |
| | (32.6 | ) | Equity in earnings of subsidiaries | (248.3 | ) | | — |
| | — |
| | 248.3 |
| | — |
| Net income (loss) | $ | (304.5 | ) | | $ | (146.4 | ) | | $ | (101.9 | ) | | $ | 248.3 |
| | $ | (304.5 | ) | Other comprehensive income (loss) | $ | 6.6 |
| | $ | — |
| | $ | (62.1 | ) | | $ | — |
| | $ | (55.5 | ) | Total comprehensive income (loss) | $ | (297.9 | ) | | $ | (146.4 | ) | | $ | (164.0 | ) | | $ | 248.3 |
| | $ | (360.0 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended February 28, 2014 | (in millions) | Biomet, Inc. | | Guarantors | | Non-Guarantors | | Eliminations | | Total | Net sales | $ | — |
| | $ | 1,519.6 |
| | $ | 859.3 |
| | $ | — |
| | $ | 2,378.9 |
| Cost of sales | — |
| | 671.4 |
| | 118.6 |
| | — |
| | 790.0 |
| Gross profit | — |
| | 848.2 |
| | 740.7 |
| | — |
| | 1,588.9 |
| Selling, general and administrative expense | — |
| | 645.0 |
| | 375.1 |
| | — |
| | 1,020.1 |
| Research and development expense | — |
| | 89.5 |
| | 31.9 |
| | — |
| | 121.4 |
| Amortization | — |
| | 196.1 |
| | 41.1 |
| | — |
| | 237.2 |
| Operating income (loss) | — |
| | (82.4 | ) | | 292.6 |
| | — |
| | 210.2 |
| Other (income) expense, net | 276.4 |
| | (4.1 | ) | | 7.5 |
| | — |
| | 279.8 |
| Income (loss) before income taxes | (276.4 | ) | | (78.3 | ) | | 285.1 |
| | — |
| | (69.6 | ) | Tax expense (benefit) | (105.0 | ) | | (29.8 | ) | | 95.1 |
| | — |
| | (39.7 | ) | Equity in earnings of subsidiaries | 141.5 |
| | — |
| | — |
| | (141.5 | ) | | — |
| Net income (loss) | $ | (29.9 | ) | | $ | (48.5 | ) | | $ | 190.0 |
| | $ | (141.5 | ) | | $ | (29.9 | ) | Other comprehensive income (loss) | $ | 25.7 |
| | $ | — |
| | $ | 22.3 |
| | $ | — |
| | $ | 48.0 |
| Total comprehensive income (loss) | $ | (4.2 | ) | | $ | (48.5 | ) | | $ | 212.3 |
| | $ | (141.5 | ) | | $ | 18.1 |
| | | | | | | | | | | | | | | | | | | | | | Nine Months Ended February 28, 2013 | (in millions) | Biomet, Inc. | | Guarantors | | Non-Guarantors | | Eliminations | | Total | Net sales | $ | — |
| | $ | 1,438.6 |
| | $ | 830.4 |
| | $ | — |
| | $ | 2,269.0 |
| Cost of sales | — |
| | 509.1 |
| | 137.6 |
| | — |
| | 646.7 |
| Gross profit | — |
| | 929.5 |
| | 692.8 |
| | — |
| | 1,622.3 |
| Selling, general and administrative expense | — |
| | 610.2 |
| | 365.8 |
| | — |
| | 976.0 |
| Research and development expense | — |
| | 80.0 |
| | 27.2 |
| | — |
| | 107.2 |
| Amortization | — |
| | 198.6 |
| | 31.6 |
| | — |
| | 230.2 |
| Goodwill impairment charge | — |
| | 167.9 |
| | 65.1 |
| | — |
| | 233.0 |
| Intangible assets impairment charge | — |
| | 101.1 |
| | — |
| | — |
| | 101.1 |
| Operating income (loss) | — |
| | (228.3 | ) | | 203.1 |
| | — |
| | (25.2 | ) | Other (income) expense, net | 479.0 |
| | 5.1 |
| | (0.9 | ) | | — |
| | 483.2 |
| Income (loss) before income taxes | (479.0 | ) | | (233.4 | ) | | 204.0 |
| | — |
| | (508.4 | ) | Tax expense (benefit) | (182.0 | ) | | (112.1 | ) | | 187.9 |
| | — |
| | (106.2 | ) | Equity in earnings of subsidiaries | (105.2 | ) | | — |
| | — |
| | 105.2 |
| | — |
| Net income (loss) | $ | (402.2 | ) | | $ | (121.3 | ) | | $ | 16.1 |
| | $ | 105.2 |
| | $ | (402.2 | ) | Other comprehensive income (loss) | $ | 5.9 |
| | $ | — |
| | $ | (52.6 | ) | | $ | — |
| | $ | (46.7 | ) | Total comprehensive income (loss) | $ | (396.3 | ) | | $ | (121.3 | ) | | $ | (36.5 | ) | | $ | 105.2 |
| | $ | (448.9 | ) |
|
| Condensed Consolidating Statements of Cash Flows |
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOW | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended February 28, 2014 | (in millions) | Biomet, Inc. | | Guarantor | | Non-Guarantors | | Eliminations | | Total | Cash flows provided by (used in) operating activities | $ | 159.2 |
| | $ | 236.6 |
| | $ | (70.2 | ) | | $ | — |
| | $ | 325.6 |
| Capital expenditures | — |
| | (91.7 | ) | | (67.1 | ) | | — |
| | (158.8 | ) | Acquisitions, net of cash acquired - 2013 Spine Acquisition | — |
| | (148.8 | ) | | — |
| | — |
| | (148.8 | ) | Other | — |
| | (1.4 | ) | | 0.1 |
| | — |
| | (1.3 | ) | Cash flows provided by (used in) investing activities | — |
| | (241.9 | ) | | (67.0 | ) | | — |
| | (308.9 | ) | Proceeds under revolvers | 155.0 |
| | — |
| | 4.3 |
| | — |
| | 159.3 |
| Payments under revolver | (55.0 | ) | | — |
| | (8.0 | ) | | — |
| | (63.0 | ) | Proceeds from senior notes due 2020 and term loans | 870.5 |
| | — |
| | — |
| | — |
| | 870.5 |
| Tender/retirement of senior notes due 2017 and term loans | (1,091.6 | ) | | — |
| | — |
| | — |
| | (1,091.6 | ) | Other | (38.1 | ) | | 0.6 |
| | (2.3 | ) | | — |
| | (39.8 | ) | Cash flows used in financing activities | (159.2 | ) | | 0.6 |
| | (6.0 | ) | | — |
| | (164.6 | ) | Effect of exchange rate changes on cash | — |
| | — |
| | 4.7 |
| | — |
| | 4.7 |
| Increase (decrease) in cash and cash equivalents | — |
| | (4.7 | ) | | (138.5 | ) | | — |
| | (143.2 | ) | Cash and cash equivalents, beginning of period | — |
| | 35.3 |
| | 320.3 |
| | — |
| | 355.6 |
| Cash and cash equivalents, end of period | $ | — |
| | $ | 30.6 |
| | $ | 181.8 |
| | $ | — |
| | $ | 212.4 |
| | | | | | | | | |
| | Nine Months Ended February 28, 2013 | (in millions) | Biomet, Inc. | | Guarantor | | Non-Guarantors | | Eliminations | | Total | Cash flows provided by (used in) operating activities | $ | 121.8 |
| | $ | 198.0 |
| | $ | (46.0 | ) | | $ | — |
| | $ | 273.8 |
| Capital expenditures | — |
| | (69.4 | ) | | (80.3 | ) | | — |
| | (149.7 | ) | Acquisitions, net of cash acquired - 2012 Trauma Acquisition | — |
| | (277.5 | ) | | (2.5 | ) | | — |
| | (280.0 | ) | Other | — |
| | (2.0 | ) | | (2.1 | ) | | — |
| | (4.1 | ) | Cash flows provided by (used in) investing activities | — |
| | (348.9 | ) | | (84.9 | ) | | — |
| | (433.8 | ) | Proceeds under revolvers | 80.0 |
| | — |
| | — |
| | — |
| | 80.0 |
| Payments under revolver | (80.0 | ) | | — |
| | — |
| | — |
| | (80.0 | ) | Proceeds from senior notes due 2020 and term loans | 3,396.2 |
| | — |
| | — |
| | — |
| | 3,396.2 |
| Tender/retirement of senior notes due 2017 and term loans | (3,423.0 | ) | | — |
| | — |
| | — |
| | (3,423.0 | ) | Payment of fees related to refinancing activities | (77.8 | ) | | — |
| | — |
| | — |
| | (77.8 | ) | Other | (17.2 | ) | | (0.1 | ) | | (9.0 | ) | | — |
| | (26.3 | ) | Cash flows used in financing activities | (121.8 | ) | | (0.1 | ) | | (9.0 | ) | | — |
| | (130.9 | ) | Effect of exchange rate changes on cash | — |
| | — |
| | 15.9 |
| | — |
| | 15.9 |
| Decrease in cash and cash equivalents | — |
| | (151.0 | ) | | (124.0 | ) | | — |
| | (275.0 | ) | Cash and cash equivalents, beginning of period | — |
| | 190.1 |
| | 302.3 |
| | — |
| | 492.4 |
| Cash and cash equivalents, end of period | $ | — |
| | $ | 39.1 |
| | $ | 178.3 |
| | $ | — |
| | $ | 217.4 |
|
|