BIOMET INC

CIK:0000351346|SEC Filings

Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Feb. 28, 2015

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss).

Accumulated other comprehensive income (loss) includes currency translation adjustments, certain derivative-related activity, changes in the value of available-for-sale investments and changes in pension assets. The Company generally deems its foreign investments to be essentially permanent in nature and does not provide for taxes on currency translation adjustments arising from translating the investment in a foreign currency to U.S. dollars. When the Company determines that a foreign investment is no longer permanent in nature, estimated taxes are provided for the related deferred tax liability (asset), if any, resulting from currency translation adjustments.

Accumulated other comprehensive income (loss) and the related components, net of tax, are included in the table below:



(in millions)	Unrecognized actuarial gains (losses)			Foreign currency translation adjustments			Unrealized gain (loss) on interest rate swaps			Unrealized gain (loss) on available-for-sale securities		Accumulated other comprehensive income (loss)
May 31, 2014	$	(11.0	)	$	62.6		$	(12.3	)	$	—	$	39.3
OCI before reclassifications	2.9			(324.9		)	(2.9		)	0.1		(324.8		)
Reclassifications	—			—			8.3			—		8.3
February 28, 2015	$	(8.1	)	$	(262.3	)	$	(6.9	)	$	0.1	$	(277.2	)

Reclassification adjustments from OCI are included in the table below:



(in millions)	Three Months Ended February 28, 2015		Three Months Ended February 28, 2014		Nine Months Ended February 28, 2015		Nine Months Ended February 28, 2014		Location on Statement of Operations
Interest rate swaps	$	5.8	$	6.2	$	13.1	$	42.3	Interest expense

The tax effects in other comprehensive income (loss) are included in the tables below:



	Three Months Ended February 28, 2015									Three Months Ended February 28, 2014
(in millions)	Before Tax			Tax			Net of Tax			Before Tax			Tax			Net of Tax
Unrecognized actuarial gains (losses)	$	1.3		$	(0.3	)	$	1.0		$	(0.6	)	$	0.2		$	(0.4	)
Foreign currency translation adjustments	(148.9		)	9.5			(139.4		)	2.1			(13.5		)	(11.4		)
Unrealized gain (loss) on interest rate swaps	(4.4		)	2.9			(1.5		)	(0.7		)	0.4			(0.3		)
Reclassifications on interest rate swaps	5.8			(2.1		)	3.7			6.2			(2.5		)	3.7
Unrealized gain (loss) on available-for-sale securities	—			—			—			1.4			(0.3		)	1.1
Other comprehensive income (loss)	$	(146.2	)	$	10.0		$	(136.2	)	$	8.4		$	(15.7	)	$	(7.3	)



	Nine Months Ended February 28, 2015									Nine Months Ended February 28, 2014
(in millions)	Before Tax			Tax			Net of Tax			Before Tax			Tax			Net of Tax
Unrecognized actuarial gains (losses)	$	4.0		$	(1.1	)	$	2.9		$	(0.6	)	$	0.2		$	(0.4	)
Foreign currency translation adjustments	(352.7		)	27.8			(324.9		)	20.3			—			20.3
Unrealized gain (loss) on interest rate swaps	(10.1		)	7.2			(2.9		)	(10.6		)	10.8			0.2
Reclassifications on interest rate swaps	13.1			(4.8		)	8.3			42.3			(16.8		)	25.5
Unrealized gain (loss) on available-for-sale securities	0.1			—			0.1			4.1			(1.7		)	2.4
Other comprehensive income (loss)	$	(345.6	)	$	29.1		$	(316.5	)	$	55.5		$	(7.5	)	$	48.0

Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	9 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
Cash flows provided by (used in) operating activities:
Net income (loss)	$ 145.9us-gaap_NetIncomeLoss	$ (29.9)us-gaap_NetIncomeLoss
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	370.9	378.4
Amortization and write off of deferred financing costs	6.5us-gaap_AmortizationOfFinancingCosts	18.6us-gaap_AmortizationOfFinancingCosts
Stock-based compensation expense	10.8us-gaap_ShareBasedCompensation	13.6us-gaap_ShareBasedCompensation
Provision for (recovery of) doubtful accounts receivable	(3.1)	0
Litigation recoveries	(44.1)us-gaap_ProceedsFromLegalSettlements	0us-gaap_ProceedsFromLegalSettlements
Deferred income taxes	(50.2)us-gaap_DeferredIncomeTaxExpenseBenefit	(126.5)us-gaap_DeferredIncomeTaxExpenseBenefit
Other	(5.2)us-gaap_OtherNoncashIncomeExpense	(6.2)us-gaap_OtherNoncashIncomeExpense
Changes in operating assets and liabilities, net of acquired assets:
Accounts receivable	(10.0)	(30.9)
Inventories	(45.0)us-gaap_IncreaseDecreaseInInventories	(18.8)us-gaap_IncreaseDecreaseInInventories
Prepaid expenses	18.5	4.4
Accounts payable	(40.5)	(18.2)
Income taxes	105.5	18.8
Accrued interest	(20.4)	(20.9)
Accrued wages and commissions	(31.7)	(6.4)
Accrued expenses and other	(86.3)	149.6
Net cash provided by operating activities	321.6	325.6
Cash flows provided by (used in) investing activities:
Proceeds from sales/maturities of investments	24.4	19.0
Purchases of investments	(16.3)us-gaap_PaymentsToAcquireInvestments	(19.8)us-gaap_PaymentsToAcquireInvestments
Net proceeds from sale of assets	0.7	0.8
Capital expenditures	(179.3)	(158.8)
Acquisitions, net of cash acquired	(0.6)	(1.3)
Net cash used in investing activities	(171.1)	(308.9)
Debt:
Payments under European facilities	0us-gaap_RepaymentsOfLinesOfCredit	(2.3)us-gaap_RepaymentsOfLinesOfCredit
Payments under senior secured credit facilities	(8.3)	(22.6)
Proceeds under revolvers	205.0	159.3
Payments under revolvers	(20.0)	(63.0)
Proceeds from senior notes due 2020 and term loans	0us-gaap_ProceedsFromNotesPayable	870.5us-gaap_ProceedsFromNotesPayable
Retirement of term loans	(180.0)us-gaap_RepaymentsOfNotesPayable	(1,091.6)us-gaap_RepaymentsOfNotesPayable
Payment of fees related to refinancing activities	0	(15.5)
Equity:
Option exercises	1.3	0.6
Net cash used in financing activities	(2.0)	(164.6)
Effect of exchange rate changes on cash	(32.9)	4.7
Increase (decrease) in cash and cash equivalents	115.6	(143.2)
Cash and cash equivalents, beginning of period	247.6	355.6
Cash and cash equivalents, end of period	363.2	212.4
Supplemental disclosures of cash flow information:
Interest	248.2us-gaap_InterestPaid	287.0us-gaap_InterestPaid
Income taxes	(50.0)us-gaap_IncomeTaxesPaidNet	69.7us-gaap_IncomeTaxesPaidNet
Biomet, Inc.
Cash flows provided by (used in) operating activities:
Net income (loss)	145.9	(29.9)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	370.9	378.4
Amortization and write off of deferred financing costs	6.5	18.6
Stock-based compensation expense	10.8	13.6
Provision for (recovery of) doubtful accounts receivable	(3.1)	0
Litigation recoveries	(44.1)	0
Deferred income taxes	(50.2)	(126.5)
Other	(5.2)	(6.2)
Changes in operating assets and liabilities, net of acquired assets:
Accounts receivable	(10.0)	(30.9)
Inventories	(45.0)	(18.8)
Prepaid expenses	18.5	4.4
Accounts payable	(40.5)	(18.2)
Income taxes	105.5	18.8
Accrued interest	(20.4)	(20.9)
Accrued wages and commissions	(31.7)	(6.4)
Accrued expenses and other	(86.3)	149.6
Net cash provided by operating activities	321.6	325.6
Cash flows provided by (used in) investing activities:
Proceeds from sales/maturities of investments	24.4	19.0
Purchases of investments	(16.3)	(19.8)
Net proceeds from sale of assets	0.7	0.8
Capital expenditures	(179.3)	(158.8)
Acquisitions, net of cash acquired	(0.6)	(1.3)
Net cash used in investing activities	(171.1)	(308.9)
Debt:
Payments under European facilities	0	(2.3)
Payments under senior secured credit facilities	(8.3)	(22.6)
Proceeds under revolvers	205.0	159.3
Payments under revolvers	(20.0)	(63.0)
Proceeds from senior notes due 2020 and term loans	0	870.5
Retirement of term loans	(180.0)	(1,091.6)
Payment of fees related to refinancing activities	0	(15.5)
Equity:
Option exercises	1.3	0.6
Net cash used in financing activities	(2.0)	(164.6)
Effect of exchange rate changes on cash	(32.9)	4.7
Increase (decrease) in cash and cash equivalents	115.6	(143.2)
Cash and cash equivalents, beginning of period	247.6	355.6
Cash and cash equivalents, end of period	363.2	212.4
Supplemental disclosures of cash flow information:
Interest	248.2	287.0
Income taxes	(50.0)	69.7
Lanx, Inc.
Cash flows provided by (used in) investing activities:
Acquisitions, net of cash acquired	0	(148.8)
Lanx, Inc. \| Biomet, Inc.
Cash flows provided by (used in) investing activities:
Acquisitions, net of cash acquired	$ 0	$ (148.8)

Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Feb. 28, 2015	May 31, 2014
Current assets:
Cash and cash equivalents	$ 363.2	$ 247.6
Accounts receivable, less allowance for doubtful accounts receivables of $34.8 ($31.9 at May 31, 2014)	548.4us-gaap_AccountsReceivableNetCurrent	577.3us-gaap_AccountsReceivableNetCurrent
Inventories	710.1us-gaap_InventoryNet	693.4us-gaap_InventoryNet
Deferred income taxes	143.3us-gaap_DeferredTaxAssetsNetCurrent	149.9us-gaap_DeferredTaxAssetsNetCurrent
Prepaid expenses and other	122.4	202.9
Total current assets	1,887.4us-gaap_AssetsCurrent	1,871.1us-gaap_AssetsCurrent
Property, plant and equipment, net	702.3us-gaap_PropertyPlantAndEquipmentNet	716.0us-gaap_PropertyPlantAndEquipmentNet
Investments	4.2us-gaap_LongTermInvestments	12.5us-gaap_LongTermInvestments
Intangible assets, net	3,101.3	3,439.6
Goodwill	3,554.6us-gaap_Goodwill	3,634.4us-gaap_Goodwill
Other assets	121.9us-gaap_OtherAssetsNoncurrent	93.0us-gaap_OtherAssetsNoncurrent
Total assets	9,371.7us-gaap_Assets	9,766.6us-gaap_Assets
Current liabilities:
Current portion of long-term debt	132.8us-gaap_LongTermDebtCurrent	133.1us-gaap_LongTermDebtCurrent
Accounts payable	90.0us-gaap_AccountsPayableCurrent	135.3us-gaap_AccountsPayableCurrent
Accrued interest	33.0us-gaap_AccruedLiabilitiesCurrent	53.4us-gaap_AccruedLiabilitiesCurrent
Accrued wages and commissions	126.7	168.7
Other accrued expenses	282.8us-gaap_OtherAccruedLiabilitiesCurrent	354.7us-gaap_OtherAccruedLiabilitiesCurrent
Total current liabilities	665.3us-gaap_LiabilitiesCurrent	845.2us-gaap_LiabilitiesCurrent
Long-term liabilities:
Long-term debt, net of current portion	5,580.6us-gaap_LongTermDebtNoncurrent	5,587.3us-gaap_LongTermDebtNoncurrent
Deferred income taxes	913.1	968.6
Other long-term liabilities	262.0us-gaap_OtherLiabilitiesNoncurrent	256.3us-gaap_OtherLiabilitiesNoncurrent
Total liabilities	7,421.0us-gaap_Liabilities	7,657.4us-gaap_Liabilities
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $0.01 per share; 740,000,000 shares authorized; 552,647,934 and 552,484,996 shares issued and outstanding	5.5us-gaap_CommonStockValue	5.5us-gaap_CommonStockValue
Contributed and additional paid-in capital	5,693.6	5,681.5
Accumulated deficit	(3,471.2)	(3,617.1)
Accumulated other comprehensive income (loss)	(277.2)	39.3
Total shareholders’ equity	1,950.7us-gaap_StockholdersEquity	2,109.2us-gaap_StockholdersEquity
Total liabilities and shareholders’ equity	9,371.7	9,766.6
Biomet, Inc.
Current assets:
Cash and cash equivalents	363.2	247.6
Accounts receivable, less allowance for doubtful accounts receivables of $34.8 ($31.9 at May 31, 2014)	548.4	577.3
Inventories	710.1	693.4
Deferred income taxes	143.3	149.9
Prepaid expenses and other	122.4	202.9
Total current assets	1,887.4	1,871.1
Property, plant and equipment, net	702.3	716.0
Investments	4.2	12.5
Intangible assets, net	3,101.3	3,439.6
Goodwill	3,554.6	3,634.4
Other assets	121.9	93.0
Total assets	9,371.7	9,766.6
Current liabilities:
Current portion of long-term debt	132.8	133.1
Accounts payable	90.0	135.3
Accrued interest	33.0	53.4
Accrued wages and commissions	126.7	168.7
Other accrued expenses	282.8	354.7
Total current liabilities	665.3	845.2
Long-term liabilities:
Long-term debt, net of current portion	5,580.6	5,587.3
Deferred income taxes	913.1	968.6
Other long-term liabilities	262.0	256.3
Total liabilities	7,421.0	7,657.4
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $0.01 per share; 740,000,000 shares authorized; 552,647,934 and 552,484,996 shares issued and outstanding	0	0
Contributed and additional paid-in capital	5,699.1	5,687.0
Accumulated deficit	(3,471.2)	(3,617.1)
Accumulated other comprehensive income (loss)	(277.2)	39.3
Total shareholders’ equity	1,950.7	2,109.2
Total liabilities and shareholders’ equity	$ 9,371.7	$ 9,766.6