(16) Supplemental Guarantor Condensed Consolidating Financials

The Company’s Senior Notes are fully and unconditionally and jointly and severally guaranteed by Hologic, Inc. (“Parent/Issuer”) and certain of its domestic subsidiaries, which are 100% owned by Hologic, Inc. The following represents the supplemental condensed financial information of Hologic, Inc. and its guarantor and non-guarantor subsidiaries, as of March 29, 2014 and September 28, 2013 and for the three and six months ended March 29, 2014 and March 30, 2013, as applicable.

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended March 29, 2014


	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Product	$	122,938		$	385,989		$	121,579		$	(109,371	)	$	521,135
Service and other		88,608			17,068			12,342			(14,145	)		103,873

		211,546			403,057			133,921			(123,516	)		625,008

Costs of revenues:
Product		58,047			145,665			91,383			(109,371	)		185,724
Amortization of intangible assets		1,397			74,619			867			—			76,883
Impairment of intangible assets		—			—			26,567			—			26,567
Service and other		51,109			13,893			2,865			(14,145	)		53,722

Gross Profit		100,993			168,880			12,239			—			282,112
Operating expenses:
Research and development		7,695			39,997			2,223			—			49,915
Selling and marketing		17,857			40,532			20,268			—			78,657
General and administrative		15,137			35,530			11,442			—			62,109
Amortization of intangible assets		1,115			26,865			1,120			—			29,100
Impairment of intangible assets		—			—			522			—			522
Restructuring and divestiture charges		1,656			2,331			7,572			—			11,559

		43,460			145,255			43,147			—			231,862

Income (loss) from operations		57,533			23,625			(30,908	)		—			50,250
Interest income		103			901			297			(1,152	)		149
Interest expense		(54,692	)		(308	)		(601	)		1,152			(54,449	)
Debt extinguishment loss		(4,437	)		—			—			—			(4,437	)
Other expense, net		(2,938	)		(186	)		(139	)		—			(3,263	)

(Loss) income before income taxes		(4,431	)		24,032			(31,351	)		—			(11,750	)
Provision (benefit) for income taxes		(1,753	)		4,664			2,104			—			5,015
Equity in earnings (losses) of subsidiaries		(14,087	)		1,028			—			13,059			—

Net (loss) income	$	(16,765	)	$	20,396		$	(33,455	)	$	13,059		$	(16,765	)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended March 29, 2014


	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Product	$	228,394		$	767,557		$	247,982		$	(210,416	)	$	1,033,517
Service and other		174,554			32,941			24,086			(27,642	)		203,939

		402,948			800,498			272,068			(238,058	)		1,237,456

Costs of revenues:
Product		110,920			284,425			177,673			(210,416	)		362,602
Amortization of intangible assets		2,794			148,728			2,027			—			153,549
Impairment of intangible assets		—			—			26,567			—			26,567
Service and other		93,429			21,535			19,708			(27,642	)		107,030

Gross Profit		195,805			345,810			46,093			—			587,708
Operating expenses:
Research and development		15,212			78,848			4,524			—			98,584
Selling and marketing		35,783			83,307			42,824			—			161,914
General and administrative		29,793			77,024			23,111			—			129,928
Amortization of intangible assets		1,894			51,028			2,394			—			55,316
Impairment of intangible assets		—			—			522			—			522
Restructuring and divestiture charges		6,646			12,087			11,176			—			29,909

		89,328			302,294			84,551			—			476,173

Income (loss) from operations		106,477			43,516			(38,458	)		—			111,535
Interest income		202			1,206			491			(1,394	)		505
Interest expense		(115,346	)		(616	)		(1,171	)		1,394			(115,739	)
Debt extinguishment loss		(7,377	)		—			—			—			(7,377	)
Other (expense) income, net		6,627			(9,530	)		810			—			(2,093	)

(Loss) income before income taxes		(9,417	)		34,576			(38,328	)		—			(13,169	)
Provision (benefit) for income taxes		(1,812	)		6,224			4,535			—			8,947
Equity in earnings (losses) of subsidiaries		(14,511	)		11,116			—			3,395			—

Net (loss) income	$	(22,116	)	$	39,468		$	(42,863	)	$	3,395		$	(22,116	)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Three Months Ended March 30, 2013


	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Product	$	100,614		$	396,913		$	121,340		$	(102,751	)	$	516,116
Service and other		81,176			21,320			9,535			(15,484	)		96,547

		181,790			418,233			130,875			(118,235	)		612,663

Costs of revenues:
Product		52,488			169,259			88,231			(102,751	)		207,227
Amortization of intangible assets		1,309			73,374			1,050			—			75,733
Service and other		40,620			16,828			8,413			(15,484	)		50,377

Gross profit		87,373			158,772			33,181			—			279,326
Operating expenses:
Research and development		7,234			39,973			2,414			—			49,621
Selling and marketing		20,484			45,237			22,893			—			88,614
General and administrative		16,716			38,631			8,886			—			64,233
Amortization of intangible assets		777			26,687			1,203			—			28,667
Contingent consideration – compensation expense		29,388			—			—			—			29,388
Contingent consideration – fair value adjustments		799			—			—			—			799
Restructuring and divestiture charges		164			10,600			3,092			(1,394	)		12,462

		75,562			161,128			38,488			(1,394	)		273,784

Income (loss) from operations		11,811			(2,356	)		(5,307	)		1,394			5,542
Interest income		99			36			72			—			207
Interest expense		(75,238	)		(309	)		(502	)		—			(76,049	)
Debt extinguishment loss		(3,247	)		—			—			—			(3,247	)
Other (expense) income, net		1,638			(3,073	)		1,247			(13	)		(201	)

(Loss) income before income taxes		(64,937	)		(5,702	)		(4,490	)		1,381			(73,748	)
(Benefit) provision for income taxes		(14,842	)		(8,081	)		279			—			(22,644	)
Equity in earnings (losses) of subsidiaries		(1,009	)		2,459			—			(1,450	)		—

Net (loss) income	$	(51,104	)	$	4,838		$	(4,769	)	$	(69	)	$	(51,104	)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

For the Six Months Ended March 30, 2013


	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenues:
Product	$	198,657		$	774,736		$	254,415		$	(178,438	)	$	1,049,370
Service and other		159,136			44,409			19,407			(28,297	)		194,655

		357,793			819,145			273,822			(206,735	)		1,244,025

Costs of revenues:
Product		106,008			331,988			169,996			(178,438	)		429,554
Amortization of intangible assets		2,615			146,291			2,114			—			151,020
Service and other		78,998			33,585			18,166			(28,297	)		102,452

Gross profit		170,172			307,281			83,546			—			560,999
Operating expenses:
Research and development		14,652			81,726			4,752			—			101,130
Selling and marketing		41,257			92,602			49,198			—			183,057
General and administrative		32,036			69,647			16,941			—			118,624
Amortization of intangible assets		1,455			53,336			2,402			—			57,193
Contingent consideration – compensation expense		58,874			—			—			—			58,874
Contingent consideration – fair value adjustments		10,839			—			—			—			10,839
Gain on sale of intellectual property		—			(53,884	)		—			—			(53,884	)
Restructuring and divestiture charges		385			13,886			3,518			(1,394	)		16,395

		159,498			257,313			76,811			(1,394	)		492,228

Income from operations		10,674			49,968			6,735			1,394			68,771
Interest income		230			78			159			—			467
Interest expense		(146,492	)		(623	)		(1,015	)		—			(148,130	)
Debt extinguishment loss		(3,247	)		—			—			—			(3,247	)
Other income (expense), net		1,757			(7,119	)		6,427			(27	)		1,038

(Loss) income before income taxes		(137,078	)		42,304			12,306			1,367			(81,101	)
(Benefit) provision for income taxes		(26,589	)		(11,195	)		4,669			—			(33,115	)
Equity in earnings (losses) of subsidiaries		62,503			13,393			—			(75,896	)		—

Net (loss) income	$	(47,986	)	$	66,892		$	7,637		$	(74,529	)	$	(47,986	)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

For the Three Months Ended March 29, 2014


	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net (loss) income	$	(16,765	)	$	20,396		$	(33,455	)	$	13,059	$	(16,765	)
Changes in foreign currency translation adjustment		—			26			(5,789	)		—		(5,763	)
Changes in unrealized holding gain on available-for-sale securities		—			(1,048	)		—			—		(1,048	)

Comprehensive (loss) income	$	(16,765	)	$	19,374		$	(39,244	)	$	13,059	$	(23,576	)

For the Six Months Ended March 29, 2014


	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net (loss) income	$	(22,116	)	$	39,468		$	(42,863	)	$	3,395	$	(22,116	)
Changes in foreign currency translation adjustment		—			115			(7,066	)		—		(6,951	)
Changes in unrealized holding gain on available-for-sale securities		—			(2,228	)		—			—		(2,228	)
Changes in pension plans, net of taxes		—			—			(615	)		—		(615	)

Comprehensive (loss) income	$	(22,116	)	$	37,355		$	(50,544	)	$	3,395	$	(31,910	)

For the Three Months Ended March 30, 2013


	Parent/Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net (loss) income	$	(51,104	)	$	4,838		$	(4,769	)	$	(69	)	$	(51,104	)
Changes in foreign currency translation adjustment		—			(341	)		(7,947	)		—			(8,288	)
Changes in unrealized holding gain on available-for-sale securities		—			2,687			—			—			2,687

Comprehensive (loss) income	$	(51,104	)	$	7,184		$	(12,716	)	$	(69	)	$	(56,705	)

For the Six Months Ended March 30, 2013


	Parent/Issuer			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net (loss) income	$	(47,986	)	$	66,892	$	7,637		$	(74,529	)	$	(47,986	)
Changes in foreign currency translation adjustment		—			236		(6,555	)		—			(6,319	)
Changes in unrealized holding gain on available-for-sale securities		—			2,130		—			—			2,130

Comprehensive (loss) income	$	(47,986	)	$	69,258	$	1,082		$	(74,529	)	$	(52,175	)

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

March 29, 2014


	Parent/ Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	139,343	$	242,863	$	102,316	$	—		$	484,522
Restricted cash		—		—		5,857		—			5,857
Accounts receivable, net		108,850		177,540		101,243		—			387,633
Inventories		83,479		172,075		55,426		—			310,980
Deferred income tax assets		14,907		18,591		900		—			34,398
Prepaid income taxes		—		2,583		957		(3,540	)		—
Prepaid expenses and other current assets		19,252		13,445		8,473		—			41,170
Intercompany receivables		—		2,576,516		47,579		(2,624,095	)		—

Total current assets		365,831		3,203,613		322,751		(2,627,635	)		1,264,560
Property, plant and equipment, net		28,596		343,091		100,467		—			472,154
Intangible assets, net		16,011		3,585,729		65,857		—			3,667,597
Goodwill		282,448		2,391,294		136,072		—			2,809,814
Other assets		98,195		48,226		1,849		—			148,270
Long term intercompany receivables		—		144,000		—		(144,000	)		—
Investment in subsidiaries		8,648,043		199,081		280		(8,847,404	)		—

Total assets	$	9,439,124	$	9,915,034	$	627,276	$	(11,619,039	)	$	8,362,395


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	89,497	$	—	$	—	$	—		$	89,497
Accounts payable		27,969		29,867		10,361		—			68,197
Accrued expenses		136,690		67,889		47,515		(3,807	)		248,287
Deferred revenue		105,712		8,062		30,928		—			144,702
Intercompany payables		2,576,709		—		50,145		(2,626,854	)		—

Total current liabilities		2,936,577		105,818		138,949		(2,630,661	)		550,683
Long-term debt, net of current portion		4,183,958		—		—		—			4,183,958
Deferred income tax liabilities		78,567		1,361,467		10,308		—			1,450,342
Deferred service obligations – long-term		8,855		3,750		9,853		—			22,458
Long-term intercompany payables		144,000		—		—		(144,000	)		—
Other long-term liabilities		107,064		32,844		34,943		—			174,851
Total stockholders’ equity		1,980,103		8,411,155		433,223		(8,844,378	)		1,980,103

Total liabilities and stockholders’ equity	$	9,439,124	$	9,915,034	$	627,276	$	(11,619,039	)	$	8,362,395

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

September 28, 2013


	Parent/ Issuer		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	321,523	$	387,422	$	113,545	$	—		$	822,490
Restricted cash		—		—		6,914		—			6,914
Accounts receivable, net		126,036		174,433		108,804		—			409,273
Inventories		81,924		146,678		60,761		—			289,363
Deferred income tax assets		—		19,042		494		(19,536	)		—
Prepaid income taxes		47,131		2,303		—		(4,689	)		44,745
Prepaid expenses and other current assets		16,246		21,112		11,003		—			48,361
Intercompany receivables		—		2,442,502		31,949		(2,474,451	)		—
Other current assets – assets held-for-sale		—		—		2,997		—			2,997

Total current assets		592,860		3,193,492		336,467		(2,498,676	)		1,624,143
Property, plant and equipment, net		29,313		356,736		105,479		—			491,528
Intangible assets, net		19,925		3,784,987		101,810		—			3,906,722
Goodwill		283,038		2,390,939		140,551		—			2,814,528
Other assets		103,548		58,446		1,908		—			163,902
Investments in subsidiaries		8,667,620		129,016		2,296		(8,798,932	)		—

Total assets	$	9,696,304	$	9,913,616	$	688,511	$	(11,297,608	)	$	9,000,823


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	563,812	$	—	$	—	$	—		$	563,812
Accounts payable		27,865		42,661		10,008		—			80,534
Accrued expenses		152,950		79,629		44,319		(4,967	)		271,931
Deferred revenue		93,306		7,958		31,055		—			132,319
Deferred income tax liabilities		59,346		—		—		(19,536	)		39,810
Intercompany payables		2,418,089		—		64,411		(2,482,500	)		—

Total current liabilities		3,315,368		130,248		149,793		(2,507,003	)		1,088,406
Long-term debt, net of current portion		4,242,098		—		—		—			4,242,098
Deferred income tax liabilities		89,085		1,435,522		10,699		—			1,535,306
Deferred service obligations – long-term		11,251		3,511		12,864		(2,170	)		25,456
Other long-term liabilities		96,990		37,598		33,456		—			168,044
Total stockholders’ equity		1,941,512		8,306,737		481,699		(8,788,435	)		1,941,513

Total liabilities and stockholders’ equity	$	9,696,304	$	9,913,616	$	688,511	$	(11,297,608	)	$	9,000,823

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended March 29, 2014


	Parent/ Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
OPERATING ACTIVITIES
Net cash provided by (used in) operating activities	$	343,410		$	(122,511	)	$	(2,584	)	$	—	$	218,315

INVESTING ACTIVITIES
Proceeds from sale of business, net		—			—			2,431			—		2,431
Purchase of property and equipment		(5,643	)		(9,635	)		(4,499	)		—		(19,777	)
Increase in equipment under customer usage agreements		(453	)		(10,546	)		(6,965	)		—		(17,964	)
Net sales of insurance contracts		13,841			—			—			—		13,841
Purchases of mutual funds		(29,732	)		—			—			—		(29,732	)
Sales of mutual funds		18,564			—			—			—		18,564
(Increase) decrease in other assets		(945	)		(1,981	)		994			—		(1,932	)

Net cash used in investing activities		(4,368	)		(22,162	)		(8,039	)		—		(34,569	)

FINANCING ACTIVITIES
Repayment of long-term debt		(562,500	)		—			—			—		(562,500	)
Payment of debt issuance costs		(2,446	)		—			—			—		(2,446	)
Payment of deferred acquisition consideration		(4,965	)		—			—			—		(4,965	)
Net proceeds from issuance of common stock pursuant to employee stock plans		53,718			—			—			—		53,718
Excess tax benefit related to equity awards		4,134			—			—			—		4,134
Payment of minimum tax withholdings on net share settlement of equity awards		(9,163	)		—			—			—		(9,163	)

Net cash used in financing activities		(521,222	)		—			—			—		(521,222	)
Effect of exchange rate changes on cash and cash equivalents		—			114			(606	)		—		(492	)

Net decrease in cash and cash equivalents		(182,180	)		(144,559	)		(11,229	)		—		(337,968	)
Cash and cash equivalents, beginning of period		321,523			387,422			113,545			—		822,490

Cash and cash equivalents, end of period	$	139,343		$	242,863		$	102,316		$	—	$	484,522

CONSOLIDATING STATEMENT OF CASH FLOWS

For the Six Months Ended March 30, 2013


	Parent/ Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
OPERATING ACTIVITIES
Net cash provided by operating activities	$	65,009		$	72,387		$	32,132		$	—	$	169,528

INVESTING ACTIVITIES
Acquisition of a business		(3,698	)		—			(220	)		—		(3,918	)
Payment of additional acquisition consideration		(16,808	)		—			—			—		(16,808	)
Proceeds from sale of business, net of cash transferred		—			84,762			1,488			—		86,250
Purchase of property and equipment		(6,397	)		(14,335	)		(5,156	)		—		(25,888	)
Increase in equipment under customer usage agreements		(335	)		(13,031	)		(7,589	)		—		(20,955	)
Purchase of insurance contracts		(4,000	)		—			—			—		(4,000	)
Proceeds from sale of intellectual property		—			60,000			—			—		60,000
Purchase of cost-method investments		(3,400	)		(225	)		—			—		(3,625	)
Increase in other assets		(1,984	)		(1,520	)		(1,447	)		—		(4,951	)

Net cash provided by (used in) investing activities		(36,622	)		115,651			(12,924	)		—		66,105

FINANCING ACTIVITIES
Repayment of long-term debt		(32,500	)		—			—			—		(32,500	)
Payment of debt issuance cost		(7,019	)										(7,019	)
Payment of contingent consideration		(42,433	)		—			—			—		(42,433	)
Net proceeds from issuance of common stock pursuant to employee stock plans		37,623			—			—			—		37,623
Excess tax benefit related to equity awards		4,437			—			—			—		4,437
Payment of minimum tax withholdings on net share settlements of equity awards		(9,972	)		—			—			—		(9,972	)

Net cash used in financing activities		(49,864	)		—			—			—		(49,864	)
Effect of exchange rate changes on cash and cash equivalents		—			(1,782	)		579			—		(1,203	)

Net increase (decrease) in cash and cash equivalents		(21,477	)		186,256			19,787			—		184,566
Cash and cash equivalents, beginning of period		210,028			269,416			80,986			—		560,430

Cash and cash equivalents, end of period	$	188,551		$	455,672		$	100,773		$	—	$	744,996