Condensed consolidating guarantor financial information | Condensed consolidating guarantor financial information The 2024 Notes, 2026 Notes and 2027 Notes (collectively, the "Senior Notes") are issued by Teleflex Incorporated (the “Parent Company”), and payment of the Parent Company's obligations under the Senior Notes are guaranteed, jointly and severally, by certain of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The 2024 Notes, 2026 Notes and 2027 Notes are guaranteed by the same Guarantor Subsidiaries. The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. The Company’s condensed consolidating statements of income and comprehensive income and condensed consolidating statements of cash flows for the years ended December 31, 2018, 2017 and 2016 and condensed consolidating balance sheets as of December 31, 2018 and 2017 provide consolidated information for: a. Parent Company, the issuer of the guaranteed obligations; b. Guarantor Subsidiaries, on a combined basis; c. Non-Guarantor Subsidiaries (i.e., those subsidiaries of the Parent Company that have not guaranteed payment of the Senior Notes), on a combined basis; and d. Parent Company and its subsidiaries on a consolidated basis. The same accounting policies as described in Note 1 are used by the Parent Company and each of its subsidiaries in connection with the condensed consolidating financial information, except for the use of the equity method of accounting to reflect ownership interests in subsidiaries, which are eliminated upon consolidation. Consolidating entries and eliminations in the following condensed consolidated financial statements represent adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, (b) eliminate the investments in subsidiaries and (c) record consolidating entries. In 2018, a Guarantor Subsidiary merged with and into Parent; the transaction is reflected as of the beginning of the earliest period presented in the condensed consolidating financial statements. TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year Ended December 31, 2018 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Condensed Consolidated (Dollars in thousands) Net revenues $ — $ 1,584,650 $ 1,287,944 $ (424,211 ) $ 2,448,383 Cost of goods sold — 886,161 596,985 (419,205 ) 1,063,941 Gross profit — 698,489 690,959 (5,006 ) 1,384,442 Selling, general and administrative expenses 50,866 514,598 313,895 (671 ) 878,688 Research and development expenses 1,482 73,067 31,659 — 106,208 Restructuring and impairment charges — 20,639 58,591 — 79,230 Gain on sale of assets — (1,388 ) — — (1,388 ) (Loss) income from continuing operations before interest and taxes (52,348 ) 91,573 286,814 (4,335 ) 321,704 Interest, net 95,173 4,796 2,107 — 102,076 (Loss) income from continuing operations before taxes (147,521 ) 86,777 284,707 (4,335 ) 219,628 (Benefit) taxes on (loss) income from continuing operations (53,401 ) 34,591 42,241 (235 ) 23,196 Equity in net income of consolidated subsidiaries 291,572 220,718 637 (512,927 ) — Income from continuing operations 197,452 272,904 243,103 (517,027 ) 196,432 Operating income from discontinued operations 4,363 — 1,280 — 5,643 Tax on income from discontinued operations 1,013 — 260 — 1,273 Income from discontinued operations 3,350 — 1,020 — 4,370 Net income 200,802 272,904 244,123 (517,027 ) 200,802 Other comprehensive loss (75,994 ) (80,030 ) (80,512 ) 160,542 (75,994 ) Comprehensive income $ 124,808 $ 192,874 $ 163,611 $ (356,485 ) $ 124,808 Year Ended December 31, 2017 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Condensed Consolidated (Dollars in thousands) Net revenues $ — $ 1,368,149 $ 1,177,247 $ (399,093 ) $ 2,146,303 Cost of goods sold — 778,153 594,527 (398,179 ) 974,501 Gross profit — 589,996 582,720 (914 ) 1,171,802 Selling, general and administrative expenses 47,412 408,811 243,544 196 699,963 Research and development expenses 1,009 57,614 26,147 — 84,770 Restructuring charges — 8,971 5,819 — 14,790 (Loss) income from continuing operations before interest, loss on extinguishment of debt and taxes (48,421 ) 114,600 307,210 (1,110 ) 372,279 Interest, net 99,371 (21,153 ) 3,557 — 81,775 Loss on extinguishment of debt 5,593 — — — 5,593 (Loss) income from continuing operations before taxes (153,385 ) 135,753 303,653 (1,110 ) 284,911 (Benefit) taxes on (loss) income from continuing operations (110,921 ) (20,333 ) 261,386 (484 ) 129,648 Equity in net income of consolidated subsidiaries 197,727 25,500 (3,135 ) (220,092 ) — Income from continuing operations 155,263 181,586 39,132 (220,718 ) 155,263 Operating loss from discontinued operations (4,534 ) — — — (4,534 ) Benefit on loss from discontinued operations (1,801 ) — — — (1,801 ) Loss from discontinued operations (2,733 ) — — — (2,733 ) Net income 152,530 181,586 39,132 (220,718 ) 152,530 Other comprehensive income 173,626 158,490 198,453 (356,943 ) 173,626 Comprehensive income $ 326,156 $ 340,076 $ 237,585 $ (577,661 ) $ 326,156 Year Ended December 31, 2016 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Condensed Consolidated (Dollars in thousands) Net revenues $ — $ 1,112,464 $ 1,124,958 $ (369,395 ) $ 1,868,027 Cost of goods sold — 652,442 588,110 (368,725 ) 871,827 Gross profit — 460,022 536,848 (670 ) 996,200 Selling, general and administrative expenses 43,602 328,263 191,916 (473 ) 563,308 Research and development expenses 547 33,080 24,952 — 58,579 Restructuring and impairment charges 173 50,183 8,871 — 59,227 Gain on sale of assets (2,707 ) (155 ) (1,505 ) — (4,367 ) (Loss) income from continuing operations before interest, loss on extinguishment of debt and taxes (41,615 ) 48,651 312,614 (197 ) 319,453 Interest, net 61,374 (11,009 ) 4,102 — 54,467 Loss on extinguishment of debt 19,261 — — — 19,261 (Loss) income from continuing operations before taxes (122,250 ) 59,660 308,512 (197 ) 245,725 (Benefit) taxes on (loss) income from continuing operations (44,674 ) 12,954 39,875 (81 ) 8,074 Equity in net income of consolidated subsidiaries 315,396 243,987 528 (559,911 ) — Income from continuing operations 237,820 290,693 269,165 (560,027 ) 237,651 Operating (loss) income from discontinued operations (1,300 ) — 378 — (922 ) Tax benefit on (loss) income from discontinued operations (857 ) — (255 ) — (1,112 ) (Loss) income from discontinued operations (443 ) — 633 — 190 Net income 237,377 290,693 269,798 (560,027 ) 237,841 Less: Income from continuing operations attributable to noncontrolling interests — — 464 — 464 Net income attributable to common shareholders 237,377 290,693 269,334 (560,027 ) 237,377 Other comprehensive loss attributable to common shareholders (66,761 ) (76,098 ) (80,700 ) 156,798 (66,761 ) Comprehensive income attributable to common shareholders $ 170,616 $ 214,595 $ 188,634 $ (403,229 ) $ 170,616 TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS December 31, 2018 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Condensed Consolidated (Dollars in thousands) ASSETS Current assets Cash and cash equivalents $ 49,523 $ 1,757 $ 305,881 $ — $ 357,161 Accounts receivable, net 5,885 54,013 301,054 5,334 366,286 Accounts receivable from consolidated subsidiaries 32,036 1,043,573 350,162 (1,425,771 ) — Inventories, net — 266,073 192,659 (30,954 ) 427,778 Prepaid expenses and other current assets 30,458 9,673 28,237 4,113 72,481 Prepaid taxes 7,029 — 5,434 — 12,463 Total current assets 124,931 1,375,089 1,183,427 (1,447,278 ) 1,236,169 Property, plant and equipment, net 3,385 253,037 176,344 — 432,766 Goodwill — 1,254,848 991,731 — 2,246,579 Intangibles assets, net 90 1,277,462 1,047,500 — 2,325,052 Investments in affiliates 5,984,566 1,672,908 20,257 (7,677,731 ) — Deferred tax assets — — 4,822 (2,376 ) 2,446 Notes receivable and other amounts due from consolidated subsidiaries 2,337,737 2,523,156 13,242 (4,874,135 ) — Other assets 17,180 5,776 12,023 — 34,979 Total assets $ 8,467,889 $ 8,362,276 $ 3,449,346 $ (14,001,520 ) $ 6,277,991 LIABILITIES AND EQUITY Current liabilities Current borrowings $ 36,625 $ — $ 50,000 $ — $ 86,625 Accounts payable 3,448 62,764 40,497 — 106,709 Accounts payable to consolidated subsidiaries 1,058,008 278,715 89,048 (1,425,771 ) — Accrued expenses 5,659 41,883 50,009 — 97,551 Current portion of contingent consideration — 106,514 30,363 — 136,877 Payroll and benefit-related liabilities 17,156 44,982 42,532 — 104,670 Accrued interest 5,995 — 36 — 6,031 Income taxes payable — — 5,943 — 5,943 Other current liabilities 843 34,916 2,291 — 38,050 Total current liabilities 1,127,734 569,774 310,719 (1,425,771 ) 582,456 Long-term borrowings 2,072,200 — — — 2,072,200 Deferred tax liabilities 87,671 257,522 265,404 (2,376 ) 608,221 Pension and postretirement benefit liabilities 49,290 27,454 16,170 — 92,914 Noncurrent liability for uncertain tax positions 801 7,212 2,705 — 10,718 Notes payable and other amounts due to consolidated subsidiaries 2,451,784 2,222,580 199,771 (4,874,135 ) — Noncurrent contingent consideration — 131,563 35,807 — 167,370 Other liabilities 138,431 8,204 57,499 204,134 Total liabilities 5,927,911 3,224,309 888,075 (6,302,282 ) 3,738,013 Total shareholders' equity 2,539,978 5,137,967 2,561,271 (7,699,238 ) 2,539,978 Total liabilities and shareholders' equity $ 8,467,889 $ 8,362,276 $ 3,449,346 $ (14,001,520 ) $ 6,277,991 December 31, 2017 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Condensed Consolidated (Dollars in thousands) ASSETS Current assets Cash and cash equivalents $ 37,803 $ 8,933 $ 286,822 $ — $ 333,558 Accounts receivable, net 2,414 57,818 280,980 4,663 345,875 Accounts receivable from consolidated subsidiaries 14,478 1,177,246 343,115 (1,534,839 ) — Inventories, net — 245,533 176,490 (26,279 ) 395,744 Prepaid expenses and other current assets 14,874 9,236 19,790 3,982 47,882 Prepaid taxes — — 5,748 — 5,748 Total current assets 69,569 1,498,766 1,112,945 (1,552,473 ) 1,128,807 Property, plant and equipment, net 2,088 213,663 167,248 — 382,999 Goodwill — 1,246,144 989,448 — 2,235,592 Intangibles assets, net — 1,355,275 1,028,473 — 2,383,748 Investments in affiliates 5,806,244 1,674,077 19,620 (7,499,941 ) — Deferred tax assets — — 6,071 (2,261 ) 3,810 Notes receivable and other amounts due from consolidated subsidiaries 2,452,101 2,231,832 — (4,683,933 ) — Other assets 31,173 6,397 8,966 — 46,536 Total assets $ 8,361,175 $ 8,226,154 $ 3,332,771 $ (13,738,608 ) $ 6,181,492 LIABILITIES AND EQUITY Current liabilities Current borrowings $ 36,625 $ — $ 50,000 $ — $ 86,625 Accounts payable 4,269 46,992 40,766 — 92,027 Accounts payable to consolidated subsidiaries 1,211,568 261,121 62,150 (1,534,839 ) — Accrued expenses 17,957 31,827 47,069 — 96,853 Current portion of contingent consideration — 74,224 — — 74,224 Payroll and benefit-related liabilities 21,145 44,009 42,261 — 107,415 Accrued interest 6,133 — 32 — 6,165 Income taxes payable 4,352 — 7,162 — 11,514 Other current liabilities 1,461 3,775 3,817 — 9,053 Total current liabilities 1,303,510 461,948 253,257 (1,534,839 ) 483,876 Long-term borrowings 2,162,927 — — — 2,162,927 Deferred tax liabilities 88,512 265,426 251,999 (2,261 ) 603,676 Pension and postretirement benefit liabilities 70,860 32,750 17,800 — 121,410 Noncurrent liability for uncertain tax positions 1,117 8,196 2,983 — 12,296 Notes payable and other amounts due to consolidated subsidiaries 2,155,146 2,320,611 208,176 (4,683,933 ) — Noncurrent contingent consideration — 186,923 10,989 — 197,912 Other liabilities 148,572 7,850 12,442 — 168,864 Total liabilities 5,930,644 3,283,704 757,646 (6,221,033 ) 3,750,961 Total shareholders' equity 2,430,531 4,942,450 2,575,125 (7,517,575 ) 2,430,531 Total liabilities and shareholders' equity $ 8,361,175 $ 8,226,154 $ 3,332,771 $ (13,738,608 ) $ 6,181,492 TELEFLEX INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS Year Ended December 31, 2018 Parent Guarantor Non-Guarantor Eliminations Condensed (Dollars in thousands) Net cash (used in) provided by operating activities from continuing operations $ (196,727 ) $ 470,972 $ 319,693 $ (158,852 ) $ 435,086 Cash flows from investing activities of continuing operations: Expenditures for property, plant and equipment (1,881 ) (40,399 ) (38,515 ) — (80,795 ) Payments for businesses and intangibles acquired, net of cash acquired (100 ) (35,606 ) (85,319 ) — (121,025 ) Proceeds from sale of assets 28,239 3,878 — (28,239 ) 3,878 Net interest proceeds on swaps designated as net investment hedges 1,548 — — — 1,548 Investments in affiliates — (5,700 ) — 5,700 — Net cash provided by (used in) investing activities from continuing operations 27,806 (77,827 ) (123,834 ) (22,539 ) (196,394 ) Cash flows from financing activities of continuing operations: Proceeds from new borrowings 35,000 — — — 35,000 Reduction in borrowings (128,500 ) — — — (128,500 ) Debt extinguishment, issuance and amendment fees (188 ) — — — (188 ) Proceeds from share based compensation plans and the related tax impacts 22,655 — — — 22,655 Payments for contingent consideration — (73,235 ) — — (73,235 ) Proceeds from issuance of shares — — 5,700 (5,700 ) — Dividends (62,165 ) — — — (62,165 ) Intercompany transactions 314,386 (322,363 ) (20,262 ) 28,239 — Intercompany dividends paid — (4,723 ) (154,129 ) 158,852 — Net cash provided by (used in) financing activities from continuing operations 181,188 (400,321 ) (168,691 ) 181,391 (206,433 ) Cash flows from discontinued operations: Net cash provided by operating activities (547 ) — 2,839 — 2,292 Net cash provided by discontinued operations (547 ) — 2,839 — 2,292 Effect of exchange rate changes on cash and cash equivalents — — (10,948 ) — (10,948 ) Net increase (decrease) in cash and cash equivalents 11,720 (7,176 ) 19,059 — 23,603 Cash and cash equivalents at the beginning of the year 37,803 8,933 286,822 — 333,558 Cash and cash equivalents at the end of the year $ 49,523 $ 1,757 $ 305,881 $ — $ 357,161 Year Ended December 31, 2017 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Condensed Consolidated (Dollars in thousands) Net cash (used in) provided by operating activities from continuing operations $ (50,585 ) $ 223,373 $ 315,431 $ (61,918 ) $ 426,301 Cash flows from investing activities of continuing operations: Expenditures for property, plant and equipment (240 ) (34,912 ) (35,751 ) — (70,903 ) Payments for businesses and intangibles acquired, net of cash acquired (975,524 ) (725,554 ) (67,206 ) — (1,768,284 ) Proceeds from sale of assets 464,982 — 6,332 (464,982 ) 6,332 Investments in affiliates — (5,900 ) — 5,900 — Net cash used in investing activities from continuing operations (510,782 ) (766,366 ) (96,625 ) (459,082 ) (1,832,855 ) Cash flows from financing activities of continuing operations: Proceeds from new borrowings 2,463,500 — — — 2,463,500 Reduction in borrowings (1,239,576 ) — — — (1,239,576 ) Debt extinguishment, issuance and amendment fees (26,664 ) — — — (26,664 ) Proceeds from share based compensation plans and related tax impacts 5,571 — — — 5,571 Payments for contingent consideration — (335 ) — — (335 ) Proceeds from issuance of shares — — 5,900 (5,900 ) — Dividends (61,237 ) — — — (61,237 ) Intercompany transactions (550,579 ) 551,230 (465,633 ) 464,982 — Intercompany dividends paid — — (61,918 ) 61,918 — Net cash provided by (used in) financing activities from continuing operations 591,015 550,895 (521,651 ) 521,000 1,141,259 Cash flows from discontinued operations: Net cash used in operating activities (6,416 ) — — — (6,416 ) Net cash used in discontinued operations (6,416 ) — — — (6,416 ) Effect of exchange rate changes on cash and cash equivalents — — 61,480 — 61,480 Net increase (decrease) in cash and cash equivalents 23,232 7,902 (241,365 ) — (210,231 ) Cash and cash equivalents at the beginning of the year 14,571 1,031 528,187 — 543,789 Cash and cash equivalents at the end of the year $ 37,803 $ 8,933 $ 286,822 $ — $ 333,558 Year Ended December 31, 2016 Parent Company Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Condensed Consolidated (Dollars in thousands) Net cash (used in) provided by operating activities from continuing operations $ (85,088 ) $ 169,400 $ 328,553 $ (2,275 ) $ 410,590 Cash flows from investing activities of continuing operations: Expenditures for property, plant and equipment (279 ) (24,753 ) (28,103 ) — (53,135 ) Payments for businesses and intangibles acquired, net of cash acquired — (10,305 ) (50,572 ) 46,837 (14,040 ) Proceeds from sale of businesses and assets 5,607 49,571 1,860 (46,837 ) 10,201 Investments in affiliates — (5,600 ) — 5,600 — Net cash provided by (used in) investing activities from continuing operations 5,328 8,913 (76,815 ) 5,600 (56,974 ) Cash flows from financing activities of continuing operations: Proceeds from new borrowings 665,000 — 6,700 — 671,700 Reduction in borrowings (714,565 ) — — — (714,565 ) Debt extinguishment, issuance and amendment fees (8,958 ) — — — (8,958 ) Proceeds from share based compensation plans and the related tax impacts 9,068 — — — 9,068 Payments to noncontrolling interest shareholders — — (464 ) — (464 ) Payments for acquisition of noncontrolling interest — — (9,231 ) — (9,231 ) Payments for contingent consideration — (7,282 ) — — (7,282 ) Proceeds from issuance of shares — — 5,600 (5,600 ) — Dividends (58,960 ) — — — (58,960 ) Intercompany transactions 183,244 (170,000 ) (13,244 ) — — Intercompany dividends paid — — (2,275 ) 2,275 — Net cash provided by (used in) financing activities from continuing operations 74,829 (177,282 ) (12,914 ) (3,325 ) (118,692 ) Cash flows from discontinued operations: Net cash used in operating activities (2,110 ) — — — (2,110 ) Net cash used in discontinued operations (2,110 ) — — — (2,110 ) Effect of exchange rate changes on cash and cash equivalents — — (27,391 ) — (27,391 ) Net (decrease) increase in cash and cash equivalents (7,041 ) 1,031 211,433 — 205,423 Cash and cash equivalents at the beginning of the year 21,612 — 316,754 — 338,366 Cash and cash equivalents at the end of the year $ 14,571 $ 1,031 $ 528,187 $ — $ 543,789 |