Guarantor Financial Information | (22) Guarantor Financial Information Our 7.25% senior notes due 2018, our 6.5% senior subordinated notes due 2020 and our 6.375% senior subordinated notes due 2023 are guaranteed, and before their redemption on October 1, 2015, our 8.625% senior subordinated notes due 2018 were guaranteed, by certain of our consolidated 100% owned subsidiaries, or the Guarantor Subsidiaries. The guarantees are full and unconditional and joint and several. The following supplemental financial information sets forth, on a consolidating basis, balance sheets as of June 30, 2016 and December 31, 2015, the related statements of operations and statements of comprehensive income (loss) for the three and six months ended June 30, 2016 and 2015, and statements of cash flows for the six months ended June 30, 2016 and 2015, respectively, for Alere Inc., the Guarantor Subsidiaries and our other subsidiaries, or the Non-Guarantor Subsidiaries. The supplemental financial information reflects the investments of Alere Inc. and the Guarantor Subsidiaries in the Guarantor and Non-Guarantor Subsidiaries using the equity method of accounting. We have extensive transactions and relationships between various members of the consolidated group. These transactions and relationships include intercompany pricing agreements, intellectual property royalty agreements and general and administrative and research and development cost sharing agreements. Because of these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties. Effective December 31, 2015, we adopted ASU 2015-03 and ASU 2015-15, and accordingly we have reclassified $49.6 million and $34.1 million of debt issuance costs from other non-current assets to long-term debt, net of current portion on our balance sheet as of June 30, 2016 and December 31, 2015, respectively, as described in Note 18 Recent Accounting Pronouncements As discussed in Note 2 Revision to Previously Reported Financial Statements The following schedules reconcile the amounts as previously reported in our consolidating financial statements to the corresponding revised amounts: Three Months Ended June 30, 2015 Revised Consolidating Statement of Operations- Guarantor Subsidiaries (in thousands) As Previously Revision As Net revenue $ 330,820 $ (1,011 ) $ 329,809 Cost of net revenue $ 199,233 $ 14 $ 199,247 Income from continuing operations before benefit for income taxes $ 55,133 $ (2,090 ) $ 53,043 Provision for income taxes $ 11,277 $ (447 ) $ 10,830 Income from continuing operations $ 43,856 $ (1,643 ) $ 42,213 Three Months Ended June 30, 2015 Revised Consolidating Statement of Operations- Non-Guarantor Subsidiaries (in thousands) As Previously Revision As Net revenue $ 367,418 $ (4,774 ) $ 362,644 Cost of net revenue $ 205,840 $ (559 ) $ 205,281 Income from continuing operations before benefit for income taxes $ 111,130 $ (5,415 ) $ 105,715 Provision for income taxes $ 22,768 $ (1,565 ) $ 21,203 Income from continuing operations $ 88,786 $ (3,850 ) $ 84,936 Six Months Ended June 30, 2015 Revised Consolidating Statement of Operations- Guarantor Subsidiaries (in thousands) As Previously Revision As Net revenue $ 659,282 $ (3,181 ) $ 656,101 Cost of net revenue $ 387,269 $ (882 ) $ 386,387 Income from continuing operations before benefit for income taxes $ 60,049 $ (4,461 ) $ 55,588 Provision for income taxes $ 13,097 $ (1,516 ) $ 11,581 Income from continuing operations $ 46,952 $ (2,945 ) $ 44,007 Six Months Ended June 30, 2015 Revised Consolidating Statement of Operations- Non-Guarantor Subsidiaries (in thousands) As Previously Revision As Net revenue $ 710,777 $ 2,135 $ 712,912 Cost of net revenue $ 398,325 $ 1,846 $ 400,171 Income from continuing operations before benefit for income taxes $ 188,294 $ (911 ) $ 187,383 Provision for income taxes $ 32,483 $ 437 $ 32,920 Income from continuing operations $ 159,803 $ (1,348 ) $ 158,455 CONSOLIDATING STATEMENT OF OPERATIONS For the Three Months Ended June 30, 2016 (in thousands) Issuer Guarantor Non-Guarantor Eliminations Consolidated Net product sales $ — $ 222,954 $ 335,540 $ (74,748 ) $ 483,746 Services revenue — 112,698 12,111 — 124,809 Net product sales and services revenue — 335,652 347,651 (74,748 ) 608,555 License and royalty revenue — 3,448 2,008 (2,923 ) 2,533 Net revenue — 339,100 349,659 (77,671 ) 611,088 Cost of net product sales 220 126,795 188,478 (65,095 ) 250,398 Cost of services revenue 104 79,203 7,760 (8,773 ) 78,294 Cost of net product sales and services revenue 324 205,998 196,238 (73,868 ) 328,692 Cost of license and royalty revenue — (7 ) 3,466 (2,924 ) 535 Cost of net revenue 324 205,991 199,704 (76,792 ) 329,227 Gross profit (loss) (324 ) 133,109 149,955 (879 ) 281,861 Operating expenses: Research and development 2,997 16,194 9,255 — 28,446 Sales and marketing 1,568 53,155 47,793 — 102,516 General and administrative 57,740 30,460 40,154 — 128,354 Impairment and (gain) loss on dispositions, net — — — — — Operating income (loss) (62,629 ) 33,300 52,753 (879 ) 22,545 Interest expense, including amortization of original issue discounts and deferred financing costs (41,857 ) (2,223 ) (2,775 ) 4,526 (42,329 ) Other income (expense), net (8,144 ) 4,103 (5,544 ) (4,527 ) (14,112 ) Income (loss) before provision (benefit) for income taxes (112,630 ) 35,180 44,434 (880 ) (33,896 ) Provision (benefit) for income taxes 19,765 (6,759 ) (9,889 ) — 3,117 Income (loss) before equity in earnings of subsidiaries and unconsolidated entities, net of tax (132,395 ) 41,939 54,323 (880 ) (37,013 ) Equity in earnings of subsidiaries, net of tax 96,916 — — (96,916 ) — Equity earnings of unconsolidated entities, net of tax 588 — 1,557 (23 ) 2,122 Net income (loss) (34,891 ) 41,939 55,880 (97,819 ) (34,891 ) Less: Net income attributable to non-controlling interests — — 143 — 143 Net income (loss) attributable to Alere Inc. and Subsidiaries (34,891 ) 41,939 55,737 (97,819 ) (35,034 ) Preferred stock dividends (5,308 ) — — — (5,308 ) Net income (loss) available to common stockholders $ (40,199 ) $ 41,939 $ 55,737 $ (97,819 ) $ (40,342 ) CONSOLIDATING STATEMENT OF OPERATIONS For the Three Months Ended June 30, 2015 (in thousands) Issuer Guarantor Non-Guarantor Eliminations Consolidated Net product sales $ — $ 211,593 $ 345,289 $ (65,833 ) $ 491,049 Services revenue — 114,983 11,645 — 126,628 Net product sales and services revenue — 326,576 356,934 (65,833 ) 617,677 License and royalty revenue — 3,233 5,710 (3,249 ) 5,694 Net revenue — 329,809 362,644 (69,082 ) 623,371 Cost of net product sales 417 120,953 193,593 (57,070 ) 257,893 Cost of services revenue 80 77,884 7,524 (8,688 ) 76,800 Cost of net product sales and services revenue 497 198,837 201,117 (65,758 ) 334,693 Cost of license and royalty revenue 19 410 4,164 (3,249 ) 1,344 Cost of net revenue 516 199,247 205,281 (69,007 ) 336,037 Gross profit (loss) (516 ) 130,562 157,363 (75 ) 287,334 Operating expenses: Research and development 3,241 13,993 9,964 — 27,198 Sales and marketing 1,570 52,101 54,353 — 108,024 General and administrative 24,390 51,288 (14,505 ) — 61,173 Impairment and (gain) loss on dispositions, net 44,378 (39,412 ) 576 — 5,542 Operating income (loss) (74,095 ) 52,592 106,975 (75 ) 85,397 Interest expense, including amortization of original issue discounts and deferred financing costs (59,086 ) (3,060 ) (4,702 ) 7,354 (59,494 ) Other income (expense), net 3,596 3,511 3,442 (7,354 ) 3,195 Income (loss) from continuing operations before provision (benefit) for income taxes (129,585 ) 53,043 105,715 (75 ) 29,098 Provision (benefit) for income taxes (16,306 ) 10,830 21,203 (38 ) 15,689 Income (loss) from continuing operations before equity in earnings of subsidiaries and unconsolidated entities, net of tax (113,279 ) 42,213 84,512 (37 ) 13,409 Equity in earnings of subsidiaries, net of tax 127,127 — — (127,127 ) — Equity earnings of unconsolidated entities, net of tax 922 — 424 15 1,361 Net income 14,770 42,213 84,936 (127,149 ) 14,770 Less: Net income attributable to non-controlling interests — — 359 — 359 Net income attributable to Alere Inc. and Subsidiaries 14,770 42,213 84,577 (127,149 ) 14,411 Preferred stock dividends (5,308 ) — — — (5,308 ) Net income available to common stockholders $ 9,462 $ 42,213 $ 84,577 $ (127,149 ) $ 9,103 CONSOLIDATING STATEMENT OF OPERATIONS For the Six Months Ended June 30, 2016 (in thousands) Issuer Guarantor Non-Guarantor Eliminations Consolidated Net product sales $ — $ 447,334 $ 632,377 $ (136,194 ) $ 943,517 Services revenue — 217,182 23,336 — 240,518 Net product sales and services revenue — 664,516 655,713 (136,194 ) 1,184,035 License and royalty revenue — 6,368 4,566 (5,672 ) 5,262 Net revenue — 670,884 660,279 (141,866 ) 1,189,297 Cost of net product sales 334 251,553 354,460 (118,488 ) 487,859 Cost of services revenue 104 151,698 15,800 (16,208 ) 151,394 Cost of net product sales and services revenue 438 403,251 370,260 (134,696 ) 639,253 Cost of license and royalty revenue — 10 7,589 (5,673 ) 1,926 Cost of net revenue 438 403,261 377,849 (140,369 ) 641,179 Gross profit (loss) (438 ) 267,623 282,430 (1,497 ) 548,118 Operating expenses: Research and development 7,131 30,653 17,724 — 55,508 Sales and marketing 2,904 107,620 91,805 — 202,329 General and administrative 102,355 63,646 77,309 — 243,310 Impairment and (gain) loss on dispositions, net — — (3,810 ) — (3,810 ) Operating income (loss) (112,828 ) 65,704 99,402 (1,497 ) 50,781 Interest expense, including amortization of original issue discounts and deferred financing costs (82,944 ) (4,875 ) (5,842 ) 9,226 (84,435 ) Other income (expense), net (6,156 ) 6,605 (6,683 ) (9,227 ) (15,461 ) Income (loss) before provision (benefit) for income taxes (201,928 ) 67,434 86,877 (1,498 ) (49,115 ) Provision (benefit) for income taxes 19,711 (6,509 ) (10,293 ) — 2,909 Income (loss) before equity in earnings of subsidiaries and unconsolidated entities, net of tax (221,639 ) 73,943 97,170 (1,498 ) (52,024 ) Equity in earnings of subsidiaries, net of tax 175,502 — — (175,502 ) — Equity earnings of unconsolidated entities, net of tax 1,269 — 6,138 (251 ) 7,156 Net income (loss) (44,868 ) 73,943 103,308 (177,251 ) (44,868 ) Less: Net income attributable to non-controlling interests — — 246 — 246 Net income (loss) attributable to Alere Inc. and Subsidiaries (44,868 ) 73,943 103,062 (177,251 ) (45,114 ) Preferred stock dividends (10,617 ) — — — (10,617 ) Net income (loss) available to common stockholders $ (55,485 ) $ 73,943 $ 103,062 $ (177,251 ) $ (55,731 ) CONSOLIDATING STATEMENT OF OPERATIONS For the Six Months Ended June 30, 2015 (in thousands) Issuer Guarantor Non-Guarantor Eliminations Consolidated Net product sales $ — $ 426,631 $ 675,395 $ (126,639 ) $ 975,387 Services revenue — 223,040 27,444 — 250,484 Net product sales and services revenue — 649,671 702,839 (126,639 ) 1,225,871 License and royalty revenue — 6,430 10,073 (6,111 ) 10,392 Net revenue — 656,101 712,912 (132,750 ) 1,236,263 Cost of net product sales 833 233,248 375,999 (112,086 ) 497,994 Cost of services revenue 130 151,921 15,964 (15,589 ) 152,426 Cost of net product sales and services revenue 963 385,169 391,963 (127,675 ) 650,420 Cost of license and royalty revenue (21 ) 1,218 8,208 (6,111 ) 3,294 Cost of net revenue 942 386,387 400,171 (133,786 ) 653,714 Gross profit (loss) (942 ) 269,714 312,741 1,036 582,549 Operating expenses: Research and development 5,543 28,912 20,759 — 55,214 Sales and marketing 2,830 105,328 108,945 — 217,103 General and administrative 44,913 89,058 19,893 — 153,864 Impairment and (gain) loss on dispositions, net 80,901 (8,804 ) (31,763 ) — 40,334 Operating income (loss) (135,129 ) 55,220 194,907 1,036 116,034 Interest expense, including amortization of original issue discounts and deferred financing costs (105,184 ) (6,345 ) (8,745 ) 14,349 (105,925 ) Other income (expense), net 7,243 6,713 1,221 (14,349 ) 828 Income (loss) from continuing operations before provision (benefit) for income taxes (233,070 ) 55,588 187,383 1,036 10,937 Provision (benefit) for income taxes (36,973 ) 11,581 32,920 308 7,836 Income (loss) from continuing operations before equity in earnings of subsidiaries and unconsolidated entities, net of tax (196,097 ) 44,007 154,463 728 3,101 Equity in earnings of subsidiaries, net of tax 201,260 — — (201,260 ) — Equity earnings of unconsolidated entities, net of tax 1,346 — 3,992 (18 ) 5,320 Income from continuing operations 6,509 44,007 158,455 (200,550 ) 8,421 Income (loss) from discontinued operations, net of tax 218,689 (1,912 ) — — 216,777 Net income 225,198 42,095 158,455 (200,550 ) 225,198 Less: Net income attributable to non-controlling interests — — 447 — 447 Net income attributable to Alere Inc. and Subsidiaries 225,198 42,095 158,008 (200,550 ) 224,751 Preferred stock dividends (10,558 ) — — — (10,558 ) Net income available to common stockholders $ 214,640 $ 42,095 $ 158,008 $ (200,550 ) $ 214,193 CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) For the Three Months Ended June 30, 2016 (in thousands) Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ (34,891 ) $ 41,939 $ 55,880 $ (97,819 ) $ (34,891 ) Other comprehensive income (loss), before tax: Changes in cumulative translation adjustment 276 (699 ) (43,720 ) 8 (44,135 ) Minimum pension liability adjustment — — 531 — 531 Other comprehensive income (loss), before tax 276 (699 ) (43,189 ) 8 (43,604 ) Other comprehensive income (loss) 276 (699 ) (43,189 ) 8 (43,604 ) Comprehensive income (loss) (34,615 ) 41,240 12,691 (97,811 ) (78,495 ) Less: Comprehensive income attributable to non-controlling interests — — 143 — 143 Comprehensive income (loss) attributable to Alere Inc. and Subsidiaries $ (34,615 ) $ 41,240 $ 12,548 $ (97,811 ) $ (78,638 ) CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) For the Three Months Ended June 30, 2015 (in thousands) Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net income $ 14,770 $ 42,213 $ 84,936 $ (127,149 ) $ 14,770 Other comprehensive income, before tax: Changes in cumulative translation adjustment 197 689 45,840 — 46,726 Minimum pension liability adjustment — — (374 ) — (374 ) Other comprehensive income, before tax 197 689 45,466 — 46,352 Other comprehensive income 197 689 45,466 — 46,352 Comprehensive income 14,967 42,902 130,402 (127,149 ) 61,122 Less: Comprehensive income attributable to non-controlling interests — — 359 — 359 Comprehensive income attributable to Alere Inc. and Subsidiaries $ 14,967 $ 42,902 $ 130,043 $ (127,149 ) $ 60,763 CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) For the Six Months Ended June 30, 2016 (in thousands) Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net income (loss) $ (44,868 ) $ 73,943 $ 103,308 $ (177,251 ) $ (44,868 ) Other comprehensive income (loss), before tax: Changes in cumulative translation adjustment 391 (828 ) (21,513 ) 8 (21,942 ) Minimum pension liability adjustment — — 686 — 686 Other comprehensive income (loss), before tax 391 (828 ) (20,827 ) 8 (21,256 ) Other comprehensive income (loss) 391 (828 ) (20,827 ) 8 (21,256 ) Comprehensive income (loss) (44,477 ) 73,115 82,481 (177,243 ) (66,124 ) Less: Comprehensive income attributable to non-controlling interests — — 246 — 246 Comprehensive income (loss) attributable to Alere Inc. and Subsidiaries $ (44,477 ) $ 73,115 $ 82,235 $ (177,243 ) $ (66,370 ) CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS) For the Six Months Ended June 30, 2015 (in thousands) Issuer Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net income $ 225,198 $ 42,095 $ 158,455 $ (200,550 ) $ 225,198 Other comprehensive income (loss), before tax: Changes in cumulative translation adjustment (460 ) 117 (33,273 ) — (33,616 ) Minimum pension liability adjustment — — (1,756 ) — (1,756 ) Other comprehensive income (loss), before tax (460 ) 117 (35,029 ) — (35,372 ) Other comprehensive income (loss) (460 ) 117 (35,029 ) — (35,372 ) Comprehensive income 224,738 42,212 123,426 (200,550 ) 189,826 Less: Comprehensive income attributable to non-controlling interests — — 447 — 447 Comprehensive income attributable to Alere Inc. and Subsidiaries $ 224,738 $ 42,212 $ 122,979 $ (200,550 ) $ 189,379 CONSOLIDATING BALANCE SHEET June 30, 2016 (in thousands) Issuer Guarantor Subsidiaries Non-Guarantor Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 49,465 $ 6,881 $ 449,818 $ — $ 506,164 Restricted cash 1,415 — 4,247 — 5,662 Marketable securities — 74 — — 74 Accounts receivable, net of allowances — 190,438 236,784 — 427,222 Inventories, net — 168,413 188,448 (23,015 ) 333,846 Deferred tax assets (455 ) 6,513 (6,058 ) — — Prepaid expenses and other current assets 12,194 33,489 110,122 6,534 162,339 Intercompany receivables 360,548 827,927 158,858 (1,347,333 ) — Total current assets 423,167 1,233,735 1,142,219 (1,363,814 ) 1,435,307 Property, plant and equipment, net 29,742 224,796 187,337 (3,088 ) 438,787 Goodwill — 1,823,018 988,527 — 2,811,545 Other intangible assets with indefinite lives — 7,538 20,800 (59 ) 28,279 Finite-lived intangible assets, net 2,745 566,973 342,690 (3,200 ) 909,208 Restricted cash — — 42,589 — 42,589 Other non-current assets 570 2,052 14,317 (649 ) 16,290 Investments in subsidiaries 3,455,642 158,195 57,650 (3,671,487 ) — Investments in unconsolidated entities 687 14,765 44,654 14,405 74,511 Deferred tax assets (66,034 ) 24,785 62,006 (2,119 ) 18,638 Non-current income tax receivable 3,517 — — — 3,517 Assets held for sale — non-current 12,223 — — — 12,223 Intercompany notes receivables 1,887,589 708,708 2,901 (2,599,198 ) — Total assets $ 5,749,848 $ 4,764,565 $ 2,905,690 $ (7,629,209 ) $ 5,790,894 LIABILITIES AND EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 40,073 $ — $ 3,608 $ — $ 43,681 Current portion of capital lease obligations — 1,654 1,846 — 3,500 Accounts payable 23,789 77,283 93,163 — 194,235 Accrued expenses and other current liabilities (514,898 ) 635,590 197,663 2,171 320,526 Intercompany payables 965,315 178,406 203,621 (1,347,342 ) — Total current liabilities 514,279 892,933 499,901 (1,345,171 ) 561,942 Long-term liabilities: Long-term debt, net of current portion 2,874,825 — 45,964 — 2,920,789 Capital lease obligations, net of current portion — 1,466 5,506 — 6,972 Deferred tax liabilities (158,407 ) 250,292 48,897 82 140,864 Other long-term liabilities 14,741 56,618 77,455 (649 ) 148,165 Intercompany notes payables 496,756 1,162,748 939,694 (2,599,198 ) — Total long-term liabilities 3,227,915 1,471,124 1,117,516 (2,599,765 ) 3,216,790 Total stockholders’ equity 2,007,654 2,400,508 1,283,765 (3,684,273 ) 2,007,654 Non-controlling interests — — 4,508 — 4,508 Total equity 2,007,654 2,400,508 1,288,273 (3,684,273 ) 2,012,162 Total liabilities and equity $ 5,749,848 $ 4,764,565 $ 2,905,690 $ (7,629,209 ) $ 5,790,894 CONSOLIDATING BALANCE SHEET December 31, 2015 (in thousands) Issuer Guarantor Non-Guarantor Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 139,153 $ 21,150 $ 341,897 $ — $ 502,200 Restricted cash 1,250 — 4,444 — 5,694 Marketable securities — 164 — — 164 Accounts receivable, net of allowances — 192,591 253,242 — 445,833 Inventories, net — 173,383 194,192 (20,574 ) 347,001 Deferred tax assets (52,410 ) 31,285 23,244 (2,119 ) — Prepaid expenses and other current assets 7,575 27,095 110,961 6,602 152,233 Assets held for sale — current — — 4,165 — 4,165 Intercompany receivables 620,838 812,957 50,691 (1,484,486 ) — Total current assets 716,406 1,258,625 982,836 (1,500,577 ) 1,457,290 Property, plant and equipment, net 31,384 228,065 188,084 (1,494 ) 446,039 Goodwill — 1,823,919 1,012,996 — 2,836,915 Other intangible assets with indefinite lives — 7,638 20,531 (59 ) 28,110 Finite-lived intangible assets, net 2,951 627,269 370,261 (3,200 ) 997,281 Restricted cash — — 43,228 — 43,228 Other non-current assets 804 2,340 15,380 (446 ) 18,078 Investments in subsidiaries 3,294,857 158,195 57,650 (3,510,702 ) — Investments in unconsolidated entities 502 14,764 37,947 12,120 65,333 Deferred tax assets (14,078 ) (14 ) 28,085 — 13,993 Non-current income tax receivable 3,517 — — — 3,517 Assets held for sale — non-current 13,337 — — — 13,337 Intercompany notes receivables 1,905,188 672,032 6,900 (2,584,120 ) — Total assets $ 5,954,868 $ 4,792,833 $ 2,763,898 $ (7,588,478 ) $ 5,923,121 LIABILITIES AND EQUITY Current liabilities: Short-term debt and current portion of long-term debt $ 197,084 $ — $ 2,908 $ — $ 199,992 Current portion of capital lease obligations — 2,018 1,944 — 3,962 Accounts payable 15,981 76,890 102,881 — 195,752 Accrued expenses and other current liabilities (554,350 ) 650,632 225,944 2,239 324,465 Liabilities related to assets held for sale — current — — 363 — 363 Intercompany payables 1,122,042 249,553 112,891 (1,484,486 ) — Total current liabilities 780,757 979,093 446,931 (1,482,247 ) 724,534 Long-term liabilities: Long-term debt, net of current portion 2,784,913 — 46,253 — 2,831,166 Capital lease obligations, net of current portion — 840 6,341 — 7,181 Deferred tax liabilities (157,708 ) 250,495 54,749 82 147,618 Other long-term liabilities 14,962 59,309 80,369 (447 ) 154,193 Intercompany notes payables 477,779 1,181,168 925,173 (2,584,120 ) — Total long-term liabilities 3,119,946 1,491,812 1,112,885 (2,584,485 ) 3,140,158 Total stockholders’ equity 2,054,165 2,321,928 1,199,818 (3,521,746 ) 2,054,165 Non-controlling interests — — 4,264 — 4,264 Total equity 2,054,165 2,321,928 1,204,082 (3,521,746 ) 2,058,429 Total liabilities and equity $ 5,954,868 $ 4,792,833 $ 2,763,898 $ (7,588,478 ) $ 5,923,121 CONSOLIDATING STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 2016 (in thousands) Issuer Guarantor Non-Guarantor Eliminations Consolidated Cash Flows from Operating Activities: Net income (loss) $ (44,868 ) $ 73,943 $ 103,308 $ (177,251 ) $ (44,868 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Equity in earnings of subsidiaries, net of tax (175,502 ) — — 175,502 — Non-cash interest expense, including amortization of original issue discounts and deferred financing costs 5,175 7 79 — 5,261 Depreciation and amortization 4,484 88,973 48,109 839 142,405 Non-cash stock-based compensation expense 10,541 5,462 4,604 — 20,607 Impairment of inventory — — 870 — 870 Impairment of long-lived assets — 548 85 — 633 Loss on disposition of fixed assets 1 3,522 712 — 4,235 Equity earnings of unconsolidated entities, net of tax (1,269 ) — (6,138 ) 251 (7,156 ) Deferred income taxes — (200 ) (13,010 ) — (13,210 ) (Gain) loss related to impairment and net (gain) loss on dispositions — — (3,810 ) — (3,810 ) Other non-cash items (66 ) 459 9,323 4 9,720 Non-cash change in fair value of contingent purchase price consideration (800 ) (823 ) (157 ) — (1,780 ) Changes in assets and liabilities, net of acquisitions: Accounts receivable, net — 2,141 17,882 — 20,023 Inventories, net — (11,723 ) 5,243 660 (5,820 ) Prepaid expenses and other current assets (4,283 ) (7,408 ) (13,258 ) 68 (24,881 ) Accounts payable 7,807 396 (8,204 ) — (1 ) Accrued expenses and other current liabilities 40,481 (13,721 ) (28,367 ) (69 ) (1,676 ) Other non-current liabilities (1,054 ) (1,561 ) (3,491 ) — (6,106 ) Cash paid for contingent consideration (321 ) — (3 ) — (324 ) Intercompany payable (receivable) 145,358 (141,518 ) (3,836 ) (4 ) — Net cash provided by (used in) operating activities (14,316 ) (1,503 ) 109,941 — 94,122 Cash Flows from Investing Activities: Increase in restricted cash (165 ) — (284 ) — (449 ) Purchases of property, plant and equipment (2,680 ) (11,750 ) (18,972 ) 1,084 (32,318 ) Proceeds from sale of property, plant and equipment 92 45 1,839 (1,084 ) 892 Cash received from (used in) dispositions, net of cash divested (1,337 ) — 22,807 — 21,470 Cash paid for business acquisitions, net of cash acquired — — (5,958 ) — (5,958 ) Cash received from equity method investments 2,383 — — — 2,383 Cash received from sales of marketable securities. — 90 — — 90 Cash paid for investments (184 ) — — — (184 ) (Increase) decrease in other assets (50 ) 13 532 — 495 Net cash used in investing activities (1,941 ) (11,602 ) (36 ) — (13,579 ) Cash Flows from Financing Activities: Cash paid for financing costs (19,564 ) — — — (19,564 ) Cash paid for contingent purchase price consideration — — (485 ) — (485 ) Proceeds from issuance of common stock, net of issuance costs 11,124 — — — 11,124 Proceeds from issuance of long-term debt — — 381 — 381 Payments on short-term debt — — (791 ) — (791 ) Payments on long-term debt (176,861 ) — (776 ) — (177,637 ) Net proceeds under revolving credit facilities 125,000 — 1,213 — 126,213 Cash paid for dividends (10,646 ) — — — (10,646 ) Principal payments on capital lease obligations — (1,324 ) (886 ) — (2,210 ) Net cash used in financing activities (70,947 ) (1,324 ) (1,344 ) — (73,615 ) Foreign exchange effect on cash and cash equivalents (2,484 ) 160 (640 ) — (2,964 ) Net increase (decrease) in cash and cash equivalents (89,688 ) (14,269 ) 107,921 — 3,964 Cash and cash equivalents, beginning of period 139,153 21,150 341,897 — 502,200 Cash and cash equivalents, end of period $ 49,465 $ 6,881 $ 449,818 $ — $ 506,164 CONSOLIDATING STATEMENT OF CASH FLOWS For the Six Months Ended June 30, 2015 (in thousands) Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Cash Flows from Operating Activities: Net income $ 225,198 $ 42,095 $ 158,455 $ (200,550 ) $ 225,198 Income (loss) from discontinued operations, net of tax 218,689 (1,912 ) — — 216,777 Income from continuing operations 6,509 44,007 158,455 (200,550 ) 8,421 Adjustments to reconcile net income from continuing operations to net cash provided by (used in) operating activities: Equity in earnings of subsidiaries, net of tax (201,260 ) — — 201,260 — Non-cash interest expense, including amortization of original issue discounts and deferred financing costs 7,728 13 43 — 7,784 Depreciation and amortization 3,840 82,576 60,652 35 147,103 Non-cash stock-based compensation expense 6,458 2,633 3,188 — 12,279 Impairment of inventory — 133 (65 ) — 68 Impairment of long-lived assets — 64 323 — 387 Loss on disposition of fixed assets — 2,764 554 — 3,318 Equity earnings of unconsolidated entities, net of tax (1,346 ) — (3,992 ) 18 (5,320 ) Gain on sales of marketable securities — (8 ) — — (8 ) Deferred income taxes (8,686 ) (32,097 ) (1,826 ) 438 (42,171 ) (Gain) loss related to impairment and net (gain) loss on dispositions 80,901 (8,804 ) (31,763 ) — 40,334 Loss on extinguishment of debt 3,480 — — — 3,480 Other non-cash items (159 ) (1,497 ) (676 ) — (2,332 ) Non-cash change in fair value of contingent purchase price consideration (30,895 ) 15,748 (37,720 ) — (52,867 ) Changes in assets and liabilities, net of acquisitions: Accounts receivable, net — (2,599 ) (15,417 ) — (18,016 ) Inventories, net — (27,824 ) (15,984 ) (1,411 ) (45,219 ) Prepaid expenses and other current assets (3,052 ) (19,127 ) 810 (5,708 ) (27,077 ) Accounts payable (7,499 ) (11,331 ) (4,421 ) — (23,251 ) Accrued expenses and other current liabilities (8,944 ) 61,472 (33,374 ) 3,898 23,052 Other non-current liabilities 2,226 6,171 (1,476 ) 1,615 8,536 Cash paid for contingent purchase price consideration (3,768 ) — (13 ) — (3,781 ) Intercompany payable (receivable) 127,569 (101,515 ) (26,054 ) — — Net cash provided by (used in) continuing operations (26,898 ) 10,779 51,244 (405 ) 34,720 Net cash provided by discontinued operations — 318 — — 318 Net cash provided by (used in) operating activities (26,898 ) 11,097 51,244 (405 ) 35,038 Cash Flows from Investing Activities: Increase in restricted cash (422,169 ) — (1,856 ) — (424,025 ) Purchases of property, plant and equipment (5,147 ) (19,386 ) (23,907 ) 1,156 (47,284 ) Proceeds from sale of property, plant and equipment — 738 1,199 (817 ) 1,120 Cash received from (used in) disposition, net of cash divested 593,217 (8,723 ) 2,131 — 586,625 Cash received from equity method investments 2,205 — 12,092 — 14,297 Cash received from sales of marketable securities — 93 — — 93 Decrease in other assets 348 409 927 66 1,750 Net cash provided by (used in) continuing operations 168,454 (26,869 ) (9,414 ) 405 132,576 Net cash used in discontinued operations — (209 ) — — (209 ) Net cash provided by (used in) investing activities 168,454 (27,078 ) (9,414 ) 405 132,367 Cash Flows from Financing Activities: Cash paid for financing costs (15,731 ) — — — (15,731 ) Cash paid for contingent purchase price consideration (5,503 ) — (870 ) — (6,373 ) Proceeds from issuance of common stock, net of issuance costs 56,332 — — — 56,332 Proceeds from issuance of long-term debt 2,119,125 — 2,726 — 2,121,851 Payments on short-term debt — — (584 ) — (584 ) Payments on long-term debt (2,117,875 ) — (389 ) — (2,118,264 ) Net payments under revolving credit facilities (127,000 ) — 680 — (126,320 ) Cash paid for dividends (10,646 ) — — — (10,646 ) Principal payments on capital lease obligations — (1,263 ) (1,647 ) — (2,910 ) Net cash used in continuing operations (101,298 ) (1,263 ) (84 ) — (102,645 ) Net cash used in discontinued operations — (76 ) — — (76 ) Net cash used in financing activities (101,298 ) (1,339 ) (84 ) — (102,721 ) Foreign exchange effect on cash and cash equivalents — (129 ) (1,445 ) — (1,574 ) Net increase (decrease) in cash and cash equivalents 40,258 (17,449 ) 40,301 — 63,110 Cash and cash equivalents, beginning of period — continuing operations 2,149 69,154 307,158 — 378,461 Cash and cash equivalents, beginning of period — discontinued operations — 23,300 — — 23,300 Cash and cash equivalents of continuing operations, end of period $ 42,407 $ 75,005 $ 347,459 $ — $ 464,871 |