Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Mar. 09, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | ACELITY L.P. INC. | |
Entity Central Index Key | 1557939 | |
Current Fiscal Year End Date | -19 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | FY | |
Document Type | 10-K | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Dec-14 | |
Entity Public Float | $0 | |
Class A-1 Partnership Units [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 341,410,892 | |
Class A-2 Partnership Units [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 717,039 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $183,541 | $206,949 |
Accounts receivable, net | 370,483 | 407,578 |
Inventories, net | 178,222 | 181,567 |
Deferred income taxes | 63,025 | 23,621 |
Prepaid expenses and other | 27,563 | 53,161 |
Total current assets | 822,834 | 872,876 |
Net property, plant and equipment | 288,048 | 333,725 |
Debt issuance costs, net | 77,896 | 102,054 |
Deferred income taxes | 31,692 | 31,459 |
Goodwill | 3,378,298 | 3,378,661 |
Identifiable intangible assets, net | 2,397,251 | 2,549,201 |
Other non-current assets | 4,694 | 4,669 |
Total assets | 7,000,713 | 7,272,645 |
Current liabilities: | ||
Accounts payable | 51,827 | 50,316 |
Accrued expenses and other | 343,484 | 328,975 |
Current installments of long-term debt | 25,721 | 26,311 |
Income taxes payable | 1,305 | 3,368 |
Deferred income taxes | 113,658 | 2,199 |
Total current liabilities | 535,995 | 411,169 |
Long-term debt, net of current installments and discount | 4,815,290 | 4,865,503 |
Non-current tax liabilities | 33,300 | 53,682 |
Deferred income taxes | 792,157 | 1,003,784 |
Other non-current liabilities | 163,258 | 40,432 |
Total liabilities | 6,340,000 | 6,374,570 |
Equity: | ||
General partner’s capital | 0 | 0 |
Limited partners’ capital | 670,787 | 900,218 |
Accumulated other comprehensive income (loss), net | -10,074 | -2,143 |
Total equity | 660,713 | 898,075 |
Total liabilities and shareholders' equity | $7,000,713 | $7,272,645 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Revenue: | ||||||||||||
Rental | $719,864 | $743,818 | $815,560 | |||||||||
Sales | 1,146,475 | 989,083 | 913,943 | |||||||||
Total revenue | 482,733 | 481,793 | 459,178 | 442,635 | 462,382 | 432,960 | 426,193 | 411,366 | 1,866,339 | 1,732,901 | 1,729,503 | |
Rental expenses | 332,762 | 353,504 | 438,752 | |||||||||
Cost of sales | 323,363 | 251,842 | 244,372 | |||||||||
Gross profit (loss) | 325,998 | 314,413 | 293,207 | 276,596 | 301,873 | 285,082 | 280,060 | 260,540 | 1,210,214 | 1,127,555 | 1,046,379 | |
Selling, general and administrative expenses | 713,554 | 684,601 | 589,858 | |||||||||
Research and development expenses | 69,321 | 75,577 | 71,712 | |||||||||
Acquired intangible asset amortization | 194,433 | 188,571 | 220,984 | |||||||||
Wake Forest settlement | 198,578 | 0 | 0 | |||||||||
Impairment of goodwill and intangible assets | 0 | 443,400 | [1] | 0 | ||||||||
Operating earnings (loss) | 55,299 | 88,347 | -142,123 | 32,805 | 57,769 | -370,355 | 11,456 | 36,536 | 34,328 | -264,594 | 163,825 | |
Interest income and other | 3,667 | 1,602 | 829 | |||||||||
Interest expense | -412,733 | -419,877 | -466,622 | |||||||||
Loss on extinguishment of debt | 0 | -2,364 | -31,481 | |||||||||
Foreign currency gain (loss) | 17,844 | -22,226 | -13,001 | |||||||||
Derivative instruments gain (loss) | -5,183 | 1,576 | -31,433 | |||||||||
Earnings (loss) from continuing operations before income taxes (benefit) | -362,077 | -705,883 | -377,883 | |||||||||
Income tax expense (benefit) | -127,031 | -150,792 | -147,823 | |||||||||
Earnings (loss) from continuing operations | -30,928 | -3,235 | -153,823 | -47,060 | -51,984 | -398,607 | -61,747 | -42,753 | -235,046 | -555,091 | -230,060 | |
Earnings (loss) from discontinued operations, net of tax | 1,392 | 1,398 | 1,106 | 677 | -751 | 46 | -828 | -2,034 | 4,573 | -3,567 | 88,643 | |
Net earnings (loss) | ($29,536) | ($1,837) | ($152,717) | ($46,383) | ($52,735) | ($398,561) | ($62,575) | ($44,787) | ($230,473) | ($558,658) | ($141,417) | |
[1] | During 2013, we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. These amounts have been excluded from Regenerative Medicine operating earnings as management excludes these charges from operating earnings when making operating decisions about the business. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net loss | ($29,536) | ($1,837) | ($152,717) | ($46,383) | ($52,735) | ($398,561) | ($62,575) | ($44,787) | ($230,473) | ($558,658) | ($141,417) |
Foreign currency translation adjustment, net of tax benefit (expense) of $(753) in 2014, $233 in 2013, and $(369) in 2012 | -5,690 | -3,867 | 5,324 | ||||||||
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 0 | 2,241 | 0 | ||||||||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | -2,241 | 0 | 0 | ||||||||
Total comprehensive income (loss) | ($238,404) | ($560,284) | ($136,093) |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Foreign currency translation adjustment, taxes | ($753) | $233 | ($369) |
Unrealized investment gain, taxes | 0 | -1,403 | 0 |
Reclassification of realized investment gain included in net loss, taxes | $1,403 | $0 | $0 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | ||||
Net loss | ($230,473) | ($558,658) | ($141,417) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||
Amortization of debt issuance costs and discount | 38,966 | 35,838 | 29,155 | |
Depreciation and other amortization | 303,905 | 335,959 | 436,370 | |
Loss (gain) on disposition of assets | -900 | 4,423 | -152,701 | |
Amortization of fair value step-up in inventory | 6,680 | 3,162 | 25,021 | |
Fixed asset and inventory impairment | 0 | 30,580 | 22,116 | |
Impairment of goodwill and intangible assets | 0 | 443,400 | [1] | 0 |
Write-off of other intangible assets | 0 | 16,885 | 0 | |
Provision for bad debt | 14,032 | 7,308 | 8,984 | |
Loss on extinguishment of debt | 0 | 2,364 | 31,481 | |
Gain on sale of investment | -3,211 | 0 | 0 | |
Equity-based compensation expense | 4,033 | 2,925 | 2,069 | |
Deferred income tax benefit | -159,170 | -187,089 | -126,389 | |
Unrealized loss (gain) on derivative instruments | -10,670 | -4,645 | 30,002 | |
Unrealized loss (gain) on revaluation of cross currency debt | -39,756 | 14,450 | 6,272 | |
Change in assets and liabilities: | ||||
Decrease (increase) in accounts receivable, net | 26,596 | -10,924 | 37,574 | |
Increase in inventories, net | -3,096 | -17,171 | -18,797 | |
Decrease (increase) in prepaid expenses and other | 19,308 | -9,338 | 2,468 | |
Increase (decrease) in accounts payable | 1,608 | 1,137 | -8,815 | |
Increase (decrease) in accrued expenses and other | 125,677 | 20,449 | -24,537 | |
Increase (decrease) in tax liabilities, net | -1,734 | 5,724 | 3,837 | |
Net cash provided by operating activities | 91,795 | 136,779 | 162,693 | |
Cash flows from investing activities: | ||||
Additions to property, plant and equipment | -66,584 | -80,911 | -91,567 | |
Decrease (increase) in inventory to be converted into equipment for short-term rental | -3,563 | 1,286 | 5,269 | |
Dispositions of property, plant and equipment | 3,652 | 1,298 | 2,630 | |
Proceeds from disposition of assets | 5,212 | 0 | 244,317 | |
Proceeds from sale of investment | 4,211 | 0 | 0 | |
Business acquired in purchase transaction, net of cash acquired | -9,613 | -478,748 | -15,097 | |
Increase in identifiable intangible assets and other non-current assets | -11,587 | -6,747 | -1,017 | |
Net cash provided (used) by investing activities | -78,272 | -563,822 | 144,535 | |
Cash flows from financing activities: | ||||
Capital contributions from limited partners | 0 | 0 | 239 | |
Distribution to limited partners | 0 | -1,572 | -2,199 | |
Settlement of profits interest units | -2,332 | -176 | 0 | |
Repayments of long-term debt and capital lease obligations | -26,403 | -69,396 | -118,767 | |
Debt issuance costs | 0 | -20,477 | -18,410 | |
2013 and 2012 acquisition financing: | ||||
Proceeds from senior credit facility | 0 | 349,563 | 0 | |
Payment of debt issuance costs | 0 | -7,340 | -1,063 | |
Net cash provided (used) by financing activities | -28,735 | 250,602 | -140,200 | |
Effect of exchange rate changes on cash and cash equivalents | -8,196 | 240 | 696 | |
Net increase (decrease) in cash and cash equivalents | -23,408 | -176,201 | 167,724 | |
Cash and cash equivalents, beginning of period | 206,949 | 383,150 | 215,426 | |
Cash and cash equivalents, end of period | $183,541 | $206,949 | $383,150 | |
[1] | During 2013, we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. These amounts have been excluded from Regenerative Medicine operating earnings as management excludes these charges from operating earnings when making operating decisions about the business. |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | General Partner's Capital [Member] | Limited Partners' Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
In Thousands, unless otherwise specified | ||||
Equity, beginning balance at Dec. 31, 2011 | $1,593,444 | $0 | $1,599,285 | ($5,841) |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Net loss | -141,417 | -141,417 | ||
Capital contributions from limited partners | 239 | 239 | ||
Distribution to limited partners | -2,199 | -2,199 | ||
Equity-based compensation expense | 2,005 | 2,005 | ||
Foreign currency translation adjustment, net of tax benefit (expense) of $(753) in 2014, $233 in 2013, and $(369) in 2012 | 5,324 | 5,324 | ||
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 0 | |||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | 0 | |||
Equity, ending balance at Dec. 31, 2012 | 1,457,396 | 0 | 1,457,913 | -517 |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Net loss | -558,658 | -558,658 | ||
Capital contributions from limited partners | 0 | |||
Distribution to limited partners | -1,572 | -1,572 | ||
Equity-based compensation expense | 2,711 | 2,711 | ||
Settlement of profits interest units | -176 | -176 | ||
Foreign currency translation adjustment, net of tax benefit (expense) of $(753) in 2014, $233 in 2013, and $(369) in 2012 | -3,867 | -3,867 | ||
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 2,241 | 2,241 | ||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | 0 | |||
Equity, ending balance at Dec. 31, 2013 | 898,075 | 0 | 900,218 | -2,143 |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||
Net loss | -230,473 | -230,473 | ||
Capital contributions from limited partners | 0 | |||
Equity-based compensation expense | 3,619 | 3,619 | ||
Settlement of profits interest units | -2,577 | -2,577 | ||
Foreign currency translation adjustment, net of tax benefit (expense) of $(753) in 2014, $233 in 2013, and $(369) in 2012 | -5,690 | -5,690 | ||
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 0 | |||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | -2,241 | -2,241 | ||
Equity, ending balance at Dec. 31, 2014 | $660,713 | $0 | $670,787 | ($10,074) |
Consolidated_Statements_of_Equ1
Consolidated Statements of Equity (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Foreign currency translation adjustment, taxes | ($753) | $233 | ($369) |
Unrealized investment gain, taxes | 0 | -1,403 | 0 |
Reclassification of realized investment gain included in net loss, taxes | 1,403 | 0 | 0 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Foreign currency translation adjustment, taxes | -753 | 233 | -369 |
Unrealized investment gain, taxes | 0 | -1,403 | 0 |
Reclassification of realized investment gain included in net loss, taxes | $1,403 | $0 | $0 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Accounting Policies [Abstract] | ||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | |||||
(a) Basis of Presentation and Principles of Consolidation | ||||||
On November 4, 2011, Kinetic Concepts, Inc. (“KCI”) completed its merger (the “Merger”) with Chiron Merger Sub, Inc. (“Merger Sub”), a direct subsidiary of Chiron Holdings, Inc. (“Holdings”) and an indirect subsidiary of Acelity L.P. Inc. (“Acelity”), pursuant to the terms of the Agreement and Plan of Merger, dated as of July 12, 2011 (the “Merger Agreement”), by and among Holdings, Merger Sub and KCI. As a result of the Merger, KCI is a 100% owned subsidiary of Acelity. In connection with this transaction, LifeCell Corporation (“LifeCell”), formerly a 100% owned subsidiary of KCI, was promoted to be a sister corporation of KCI, such that each of KCI and LifeCell are now 100% owned subsidiaries of Acelity. Acelity is a non-operating holding company indirectly controlled by investment funds advised by Apax Partners (“Apax”) and controlled affiliates of Canada Pension Plan Investment Board (“CPPIB”) and the Public Sector Pension Investment Board (“PSP Investments” and with Apax and CPPIB, collectively, the “Sponsors”) and certain other co-investors. The consolidated financial statements presented herein include the accounts of Acelity L.P. Inc., together with its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unless otherwise noted in this report, the terms “we,” “us,” “our,” or the “Company” refers to Acelity L.P. Inc. and subsidiaries. The accompanying audited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “the Codification”). Certain prior period amounts have been reclassified to conform to the 2014 presentation. | ||||||
Net earnings (loss) per share information is not presented as such information is not meaningful. Chiron Guernsey Holdings L.P. Inc. owns over 99% of the limited partnership interests of Acelity, while Acelity’s Managing Limited Partner owns less than 1% of the limited partnership interests. Chiron Guernsey GP Co. Limited owns all of the general partnership interests in Acelity and has no economic interest in Acelity. We do not have any publicly traded common stock or potential common stock. | ||||||
On November 8, 2012, KCI closed on the divestiture of its Therapeutic Support Systems (“TSS”) business to Getinge AB. Under the terms of the sale agreement, we agreed to provide transition services to Getinge AB after the close of the transaction. Additionally, the results of the operations subject to the agreement, excluding the allocation of general corporate overhead, are presented as discontinued operations in the consolidated statements of operations for all periods presented. Discontinued operations amounts related to TSS also exclude incremental expenses related to our transition services agreement with Getinge AB and the service fee payable by Getinge AB under the transition services agreement. | ||||||
On October 29, 2014, LifeCell entered into an agreement with Novadaq® Technologies Inc. (“Novadaq”) to transfer all marketing and distribution rights to the SPY® Elite System from LifeCell to Novadaq, effective November 30, 2014. In connection with the transfer, the parties agreed to terminate various distribution agreements entered into between 2010 and 2011. The results of the operations subject to the agreement, excluding the allocation of general corporate overhead, are presented as discontinued operations in the consolidated statements of operations for all periods presented. | ||||||
The Company has two reportable operating segments: Advanced Wound Therapeutics and Regenerative Medicine. We have two primary geographic regions: the Americas, which is comprised principally of the United States and includes Canada, Puerto Rico and Latin America; and EMEA/APAC, which is comprised of Europe, the Middle East, Africa and the Asia Pacific region. | ||||||
(b) Nature of Operations and Customer Concentration | ||||||
We are a leading global medical technology company devoted to the development and commercialization of innovative products and therapies designed to improve clinical outcomes while helping to reduce the overall cost of patient care. We have an infrastructure designed to meet the specific needs of medical professionals and patients across all healthcare settings, including acute care hospitals, long-term care facilities and patients’ homes. We are engaged in the rental and sale of our products throughout the United States and in over 75 countries worldwide through direct sales and indirect operations. Our primary businesses serve the advanced wound therapeutics and regenerative medicine markets. Our advanced devices business is primarily engaged in commercializing several technology platforms, including negative pressure wound therapy (“NPWT”), negative pressure surgical management (“NPSM”) and epidermal harvesting. Our advanced wound dressings are used for the management of chronic and acute wounds. Our regenerative medicine business is primarily focused on the development and commercialization of regenerative and reconstructive acellular tissue matrices for use in general and reconstructive surgical procedures to repair soft tissue defects. In addition to our acellular tissue matrices, our regenerative medicine business markets autologous fat grafting solutions, such as Revolve, which is complementary to our tissue matrix business. | ||||||
We have direct operations in over 25 countries and indirect operations in an additional 50 countries. We have two reportable operating segments which correspond to our two businesses: Advanced Wound Therapeutics and Regenerative Medicine. Our AWT business is conducted by KCI and its subsidiaries, including Systagenix, while our Regenerative Medicine business is conducted by LifeCell and its subsidiaries. As defined by the Codification, we have three reporting units: KCI, Regenerative Medicine and Systagenix. We have operations in two primary geographic regions: the Americas, which is comprised principally of the United States and includes Canada, Puerto Rico and Latin America; and EMEA/APAC, which is comprised of Europe, the Middle East, Africa and the Asia Pacific region. | ||||||
Operations for our Americas geographic region accounted for approximately 75.6%, 80.3%, and 80.9% of our total revenue for the years ended December 31, 2014, 2013 and 2012, respectively. In the U.S. acute and extended care settings, which accounted for approximately 58.5%, 60.8%, and 59.2% of our Americas revenue for the years ended December 31, 2014, 2013 and 2012, respectively, we bill our customers directly for the rental and sale of our products. Also in the U.S. acute and extended care settings, we contract with both proprietary hospital groups and voluntary group purchasing organizations (“GPOs”). Proprietary hospital groups own all of the hospitals which they represent and, as a result, can ensure compliance with an executed national agreement. Voluntary GPOs negotiate contracts on behalf of member hospital organizations, but cannot ensure that their members will comply with the terms of an executed national agreement. During the years ended December 31, 2014, 2013 and 2012, we recorded approximately $106.7 million, $94.1 million, and $96.3 million, respectively, in Advanced Wound Therapeutics revenues under contracts with Novation, LLC, our largest single GPO relationship. | ||||||
In the U.S. home care setting, where our revenue comes predominantly from our NPWT products, we provide products and services to patients in the home and bill third-party payers directly, such as Medicare and private insurance. During the years ended December 31, 2014, 2013 and 2012, we recorded revenue related to Medicare claims of approximately $120.6 million, $142.5 million, and $167.1 million, respectively. | ||||||
In the EMEA/APAC region, most of our Advanced Wound Therapeutics revenue is generated in the acute care setting on a direct billing basis. | ||||||
(c) Use of Estimates | ||||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||
(d) Revenue Recognition | ||||||
We recognize revenue in accordance with the “Revenue Recognition” Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification when each of the following four criteria are met: | ||||||
1) | a contract or sales arrangement exists; | |||||
2) | products have been shipped, title has transferred or services have been rendered; | |||||
3) | the price of the products or services is fixed or determinable; and | |||||
4) | collectibility is reasonably assured. | |||||
We recognize rental revenue based on the number of days a product is used by the patient/organization, (i) at the contracted rental rate for contracted customers and (ii) generally, retail price for non-contracted customers. Sales revenue is recognized when products are shipped and title has transferred. In addition, we establish realization reserves against revenue to provide for adjustments including capitation agreements, estimated credit memos, volume discounts, pricing adjustments, utilization adjustments, product returns, cancellations, estimated uncollectible amounts and payer adjustments based on historical experience. In addition, revenue is recognized net of administrative fees paid to GPOs and state sales tax paid on post-acute rentals and sales. | ||||||
(e) Cash and Cash Equivalents | ||||||
We consider all highly liquid investments with an original maturity of ninety days or less to be cash equivalents. We maintain cash and cash equivalents with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits bear minimal credit risk as they are maintained at financial institutions of reputable credit and generally may be redeemed upon demand. | ||||||
(f) Accounts Receivable | ||||||
The Americas trade accounts receivable consist of amounts due directly from acute and extended care organizations, third-party payers (“TPP”), both governmental and non-governmental, third-party distributors and patient pay accounts. Included within the TPP accounts receivable balances are amounts that have been or will be billed to patients once the primary payer portion of the claim has been settled by the TPP. EMEA/APAC trade accounts receivable consist of amounts due primarily from acute care organizations and third-party distributors. | ||||||
Significant concentrations of accounts receivable include: | ||||||
2014 | 2013 | |||||
Acute and extended care organizations | 51 | % | 53 | % | ||
Managed care, insurance and other | 28 | % | 28 | % | ||
Medicare/Medicaid | 10 | % | 9 | % | ||
Other | 11 | % | 10 | % | ||
The TPP reimbursement process in the United States requires extensive documentation, which has had the effect of slowing both the billing and cash collection cycles relative to the rest of the business, and therefore, could increase total accounts receivable. Because of the extensive documentation required and the requirement to settle a claim with the primary payer prior to billing the secondary and/or patient portion of the claim, the collection period for a claim in our home care business may, in some cases, extend beyond one year prior to full settlement of the claim. | ||||||
We utilize a combination of factors in evaluating the collectibility of our accounts receivable. For unbilled receivables, we establish reserves to allow for expected denied or uncollectible items. In addition, items that remain unbilled for more than a specified period of time, or beyond an established billing window, are reserved against revenue. For billed receivables, we generally establish reserves using a combination of factors including historic adjustment rates for credit memos and canceled transactions, historical collection experience, and the length of time receivables have been outstanding. The reserve rates vary by payer group. In addition, we record specific reserves for bad debt when we become aware of a customer’s inability or refusal to satisfy its debt obligations, such as in the event of a bankruptcy filing. | ||||||
(g) Inventories | ||||||
Advanced Wound Therapeutics inventories | ||||||
Prior to the completion of the Merger on November 4, 2011, inventories were stated at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. On November 4, 2011, inventories were recorded at fair value with the application of preliminary purchase accounting adjustments, with subsequent additions to inventory recorded at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. On October 28, 2013, inventories purchased as part of our acquisition of Systagenix were recorded at fair value with the application of purchase accounting adjustments, with subsequent additions to inventory recorded at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. Costs include material, labor and manufacturing overhead costs. Inventory expected to be converted into equipment for short-term rental is reclassified to property, plant and equipment. We review our inventory balances monthly for excess sale products or obsolete inventory levels. Inventory quantities of sale-only products in excess of anticipated demand are considered excess and are reserved at 100%. For rental products, we review both product usage and product life cycle to classify inventory as active, discontinued or obsolete. Obsolescence reserve balances are established on an increasing basis from 0% for active, high-demand products to 100% for obsolete products. The reserve is reviewed and, if necessary, adjustments are made on a monthly basis. We rely on historical information and production planning forecasts to support our reserve and utilize management’s business judgment for “high risk” items, such as products that have a fixed shelf life. Once the value of inventory is reduced, we do not adjust the reserve balance until the inventory is sold or otherwise disposed. | ||||||
Regenerative Medicine inventories | ||||||
Prior to the completion of the Merger on November 4, 2011, inventories were stated at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. On November 4, 2011, inventories were recorded at fair value with the application of preliminary purchase accounting adjustments, with subsequent additions to inventory recorded at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. Inventories on hand include the cost of materials, freight, direct labor and manufacturing overhead. We record a provision for excess and obsolete inventory based primarily on inventory quantities on hand, the historical product sales and estimated forecast of future product demand and production requirements. In addition, we record a provision for tissue that will not meet tissue standards based on historic rejection rates. | ||||||
(h) Vendor Rebates | ||||||
We may receive consideration from vendors in the normal course of business in the form of rebates of purchase price paid. Our policy for accounting for these funds is in accordance with the “Revenue Recognition” Topic of the FASB Accounting Standards Codification. Funds are recognized as a reduction of cost of sales and inventory if the funds are a reduction of the price for the vendor’s products. | ||||||
(i) Long-Lived Assets | ||||||
Prior to the completion of the Merger on November 4, 2011, property, plant and equipment was stated at cost. On November 4, 2011, property, plant and equipment was recorded at fair value with the application of preliminary purchase accounting adjustments, with subsequent additions to property, plant and equipment recorded at cost. On October 28, 2013, property, plant and equipment purchased as part of our acquisition of Systagenix was recorded at fair value with the application of purchase accounting adjustments, with subsequent additions to property, plant and equipment recorded at cost. Betterments, which extend the useful life of the equipment, are capitalized. Debt issuance costs, which represent fees and other direct costs incurred in connection with our borrowings are capitalized and amortized using the effective interest method over the contractual term of the borrowing. Other assets consisted principally of other investments at December 31, 2014 and 2013. | ||||||
When an event occurs that indicates the carrying value of long-lived assets might not be recoverable, we review property, plant and equipment for impairment using an undiscounted cash flow analysis. If an impairment occurs on an undiscounted basis, we compute the fair market value of the applicable assets on a discounted cash flow basis and adjust the carrying value accordingly. During 2013, we recorded a $30.6 million fixed asset impairment charge. There were no impairments of fixed assets in 2014. | ||||||
Depreciation on property, plant and equipment is calculated on the straight-line method over the estimated useful lives (20 to 30 years for buildings and between 3 and 7 years for most of our other property and equipment) of the assets. Amortization for leasehold improvements is taken over the shorter of the estimated useful life of the asset or over the remaining lease term. Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $108.0 million, $145.7 million, and $178.4 million, respectively. During 2012, we recorded a $22.1 million impairment charge associated with certain production equipment at our manufacturing plant and inventory associated with our V.A.C.Via product. | ||||||
(j) Goodwill and Other Intangible Assets | ||||||
Business combinations are accounted for under the acquisition method. The total cost of an acquisition is allocated to the underlying identifiable net assets, based on their respective estimated fair values as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. | ||||||
Goodwill is tested for impairment by reporting unit annually as of October 31, or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition. | ||||||
Impairment of goodwill is tested by comparing the carrying value of the reporting unit to the reporting unit’s fair value. The carrying value of each reporting unit is determined by taking the reported net assets of the consolidated entity, identifying reporting unit specific assets (including goodwill) and liabilities and allocating shared operational and administrative assets and liabilities to the appropriate reporting unit. The fair value of each reporting unit is determined using current industry multiples as well as discounted cash flow models using certain performance assumptions and appropriate discount rates determined by our management. To ensure the reasonableness of the estimated fair value of our reporting units, we perform a reconciliation of the estimated fair value of our consolidated entity to the total estimated fair value of all our reporting units. When it is determined that the carrying value of goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, the measurement of any impairment is determined and the carrying value is reduced as appropriate. | ||||||
Identifiable intangible assets include developed technology, in-process research and development, customer relationships, tradenames and patents. For intangible assets that are subject to amortization, we amortize the assets over the estimated economic or contractual life of the individual asset. When an event occurs that indicates the carrying value of definite-lived intangible assets might not be recoverable, we review the assets for impairment using an undiscounted cash flow analysis. If an impairment occurs on an undiscounted basis, we compute the fair market value of the applicable assets on a discounted cash flow basis and adjust the carrying value accordingly. Indefinite-lived intangibles are tested for impairment annually as of October 31, or more frequently when events or changes in circumstances indicate that the assets might be impaired. If the carrying amount of the indefinite-lived intangible assets exceeds their fair value, an impairment is recognized in an amount equal to that excess. | ||||||
The Company performed an interim impairment test on goodwill of its Regenerative Medicine reporting unit during the third quarter of 2013. In our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, we disclosed that in the event of an approximate 6% and 4% drop in the fair value of our Regenerative Medicine reporting unit and the fair value of our Regenerative Medicine indefinite-lived identifiable intangible assets, respectively, the fair value of the Regenerative Medicine reporting unit and indefinite-lived identifiable intangible assets would still exceed their book values as of October 31, 2012. The Company continued to monitor the close proximity of the reporting unit’s carrying value compared to its fair value and, in the third quarter, determined it was required to complete the interim impairment test, as defined under GAAP. The results of the third quarter 2013 interim impairment test indicated that the estimated fair value of the Regenerative Medicine reporting unit was less than its carrying value; consequently, during the third quarter of 2013 we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. There were no impairments of goodwill or identifiable intangible assets during 2014 or 2012. | ||||||
During 2013, write-offs of $16.9 million of other intangible assets were recorded due primarily to the discontinuation of certain projects. | ||||||
Our estimates of discounted cash flows may differ from actual cash flows due to, among other things, economic conditions, changes to our business model or changes in operating performance. Significant differences between these estimates and actual cash flows could materially affect our future financial results. These factors increase the risk of differences between projected and actual performance that could impact future estimates of fair value of all reporting units. In the event of an approximate 27% and 10% drop in the fair value of our KCI reporting unit and the fair value of our KCI indefinite-lived identifiable intangible assets, respectively, the fair value of the KCI reporting unit and indefinite-lived identifiable intangible assets would still exceed their book values as of October 31, 2014. In the event of an approximate 21% drop in the fair value of our Systagenix reporting unit, the fair value of the Systagenix reporting unit would still exceed its book value as of October 31, 2014. Additionally, in the event of an approximate 11% drop in the fair value of our Regenerative Medicine reporting unit, the fair value of the Regenerative Medicine reporting unit would still exceed its book value as of October 31, 2014. Certain Regenerative Medicine indefinite-lived identifiable intangible assets approximated their fair value as of October 31, 2014. | ||||||
(k) Income Taxes | ||||||
Deferred income taxes are accounted for using the asset and liability method of accounting for income taxes, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the tax bases of assets and liabilities, as measured by current enacted tax rates. When appropriate, we evaluate the need for a valuation allowance to reduce our deferred tax assets. | ||||||
A liability is recorded for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | ||||||
We have established a valuation allowance to reduce deferred tax assets associated with foreign net operating losses, certain state net operating losses, and certain foreign deferred tax assets to an amount whose realization is more likely than not. We believe that the remaining deferred income tax assets will be realized based on reversals of existing taxable temporary differences and expected repatriation of foreign earnings. Accordingly, we believe that no additional valuation allowances are necessary. | ||||||
(l) Royalties | ||||||
We pay royalties for the right to market certain of our medical devices. Royalties are generally based on applicable revenue or the number of units sold and are recognized in the period that the related revenue is earned. Royalties related to rental revenue are included in rental expense. Royalties on sales revenue are included in cost of sales. | ||||||
(m) Self-Insurance | ||||||
We self-insure certain employee benefit and casualty insurance risks. Our group medical plan for U.S. employees is a qualified self-insured plan subject to specific stop loss insurance coverage. Our short-term disability plan for U.S. based employees is self-insured. The Texas Employee Injury Benefit Plan is self-insured subject to a $750,000 per occurrence retention. Our casualty insurance program has a $750,000 deductible for workers’ compensation, auto liability, and general liability. Our products liability program has a $1,000,000 self-insured retention. Our group life and accidental death and dismemberment plan and our long-term disability plan are all fully insured. We fully accrue our retained loss liabilities, including claims incurred but not reported. Based on historical trends, we believe our accruals for retained losses are adequate to cover future losses. | ||||||
(n) Derivative Financial Instruments and Fair Value Measurements | ||||||
We use derivative financial instruments to manage the economic impact of fluctuations in interest rates. We do not use financial instruments for speculative or trading purposes. Periodically, we enter into interest rate protection agreements to modify the interest characteristics of our outstanding debt. Our interest rate derivatives have not been designated as hedging instruments, and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. | ||||||
Periodically, we also use derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates on our intercompany balances and corresponding cash flows and to manage our transactional currency exposures when our foreign subsidiaries enter into transactions denominated in currencies other than their local currency. We enter into foreign currency exchange contracts to manage these economic risks. These contracts are not designated as hedges; as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. Although we use master netting agreements with our derivative counterparties, we do not offset derivative asset and liability positions in the consolidated balance sheet. | ||||||
All derivative instruments are recorded on the balance sheet at fair value. The fair values of our interest rate derivatives and foreign currency exchange contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets, which represent level 2 inputs as defined by the Codification. | ||||||
(o) Foreign Currency Translation and Transaction Gains and Losses | ||||||
The functional currency for the majority of our foreign operations is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. Gains and losses resulting from the foreign currency translations are included in accumulated other comprehensive income. Transaction gains and losses, such as those resulting from the settlement of nonfunctional currency receivables or payables, including intercompany balances, are included in foreign currency gain (loss) in our consolidated statements of operations. Additionally, payable and receivable balances and long-term debt denominated in nonfunctional currencies are marked-to-market at month-end, and the gain or loss is recognized in our consolidated statements of operations. | ||||||
(p) Concentration of Credit Risk | ||||||
We have a concentration of credit risk with financial institutions related to our derivative instruments. As of December 31, 2014, Morgan Stanley, UBS and HSBC were the counterparties on our interest rate protection agreements consisting of interest rate swap agreements in notional amounts totaling $487.7 million each. We use master netting agreements with our derivative counterparties to reduce our risk and use multiple counterparties to reduce our concentration of credit risk. | ||||||
We maintain cash and cash equivalents with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits bear minimal credit risk as they are maintained at financial institutions of reputable credit and generally may be redeemed upon demand. | ||||||
(q) Equity-based Compensation | ||||||
We account for equity-based payments to employees in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires that equity-based payments (to the extent they are compensatory) be recognized in our consolidated statements of operations based on their fair values. | ||||||
As required by ASC 718, we recognize equity-based compensation expense for equity-based payment awards that are expected to vest based on estimated fair values on the date of grant. For awards classified as liability awards, the fair value of these awards is reviewed on a regular basis and the expense associated with these awards is adjusted accordingly as the fair value changes. In determining whether an award is expected to vest, we use an estimated, forward-looking forfeiture rate based upon our historical forfeiture rates. To the extent our actual forfeitures are different than our estimates, we record a true-up for the differences in the period that the awards vest, and such true-ups could materially affect our operating results. We also consider whether there have been any significant changes in facts and circumstances that would affect our expected forfeiture rate. | ||||||
We are also required to determine the fair value of equity-based awards at the grant date. We estimate the fair values of employee incentive equity awards using a Black-Scholes-Merton valuation model. A discount for lack of marketability was applied to the per unit fair value to reflect increased risk arising from the inability to readily sell the Profits Interest Units and Appreciation Rights. These determinations require judgment, including estimating expected volatility. If actual results differ significantly from these estimates, equity-based compensation expense and our results of operations could be impacted. | ||||||
(r) Research and Development | ||||||
The focus of our research and development program has been to invest in clinical studies and the development of new advanced wound healing systems, products and dressings. This includes the development of new and synergistic technologies across the continuum of wound care including tissue regeneration, preservation and repair, new applications of negative pressure technology, and the leveraging of our core understanding of biological tissues in order to develop biosurgery products in our Regenerative Medicine business. The types of costs classified as research and development expense include salaries of technical staff, consultant costs, facilities and utilities costs related to offices occupied by technical staff, depreciation on equipment and facilities used by technical staff, supplies and materials for research and development and outside services such as prototype development and testing and third-party research and development costs. Expenditures for research and development, including expenses related to clinical studies, are expensed as incurred. | ||||||
(s) Shipping and Handling | ||||||
We include shipping and handling costs in rental expense and cost of sales, as appropriate. Shipping and handling costs on sales products recovered from customers of $5.1 million, $4.7 million and $4.8 million for the years ended December 31, 2014, 2013 and 2012, respectively, are included in sales revenue for these periods. | ||||||
(t) Taxes Collected from Customers and Remitted to Governmental Units | ||||||
Taxes assessed by a government authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes and value added taxes, are accounted for on a net (excluded from revenues and costs) basis. | ||||||
(u) Advertising Expenses | ||||||
Advertising costs are expensed as incurred. Advertising expenses were $10.9 million, $7.6 million and $8.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||
(v) Seasonality | ||||||
Historically, we have experienced a seasonal slowing of unit demand for our NPWT devices and related dressings beginning in the fourth quarter and continuing into the first quarter, which we believe has been caused by year-end clinical treatment patterns, such as the postponement of elective surgeries and increased discharges of individuals from the acute care setting around the winter holidays. We typically experience a slowing of demand for our AWT dressings in the fourth quarter. | ||||||
(w) Legal Proceedings and Other Loss Contingencies | ||||||
We are subject to various legal proceedings, many involving routine litigation incidental to our business. The outcome of any legal proceeding is not within our complete control, is often difficult to predict and is resolved over very long periods of time. Estimating probable losses associated with any legal proceedings or other loss contingencies is very complex and requires the analysis of many factors including assumptions about potential actions by third parties. Loss contingencies are disclosed when there is at least a reasonable possibility that a loss has been incurred and are recorded as liabilities in the consolidated financial statements when it is both (1) probable or known that a liability has been incurred and (2) the amount of the loss is reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. If a loss contingency is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. | ||||||
(x) Concentrations in Available Sources of Materials | ||||||
For both of our businesses, we obtain some of our finished products and components from a limited group of suppliers, and we purchase certain supplies from single sources for reasons of quality assurance, cost-effectiveness, availability, or constraints resulting from regulatory requirements. | ||||||
Our manufacturing processes for Advanced Wound Therapeutics products involve producing final assemblies in accordance with a master production plan. Assembly of our products is accomplished using metal parts, plastics, electronics and other materials and component parts that are primarily purchased from outside suppliers. Component parts and materials are obtained from industrial distributors, original equipment manufacturers and contract manufacturers. The majority of parts and materials are readily available in the open market (steel, aluminum, plastics, fabrics, polymers, etc.) for which price volatility is reasonably low. Our manufacturing processes and quality systems are intended to comply with appropriate FDA and International Organization for Standardization (“ISO”) requirements. | ||||||
Our Ireland plant manufactures certain disposable supplies, on a high-volume automation line, which have historically been supplied by third-party contract manufacturers in Mexico. We plan to continue leveraging our existing infrastructure and manufacturing capabilities to expand internal production in the future. | ||||||
Many raw materials and contract manufacturing for our advanced wound dressings are sole source or conducted on a purchase order basis. Since the Systagenix acquisition, we have undertaken an effort to qualify a second source supplier for key materials. | ||||||
Our Regenerative Medicine business is dependent on the availability of sufficient quantities of raw materials, including donated human cadaveric tissue, porcine tissue and other materials required for tissue processing. We currently receive human tissue from multiple U.S. tissue banks and organ procurement organizations. | ||||||
Our Regenerative Medicine xenograft tissue matrix products are made from porcine skin tissue. We have two qualified porcine tissue suppliers. Our primary porcine tissue source is supplied by three separate breeding herd farms that are isolated for biosecurity. We also have qualified second sources for many of our specialized solutions that are essential to the processing of our xenograft tissue matrix products. | ||||||
While we work closely with suppliers to assure continuity of supply and maintain high quality and reliability, manufacturing disruptions experienced by our suppliers could jeopardize our supply of finished products and components. Additionally, a change in suppliers could require significant effort or investment in circumstances where the items supplied are integral to product performance or incorporate unique technology. Any casualty, natural disaster or other significant disruption of any of our sole-source suppliers’ operations, or any unexpected loss of any existing exclusive supply contract could have a material adverse effect on our business. | ||||||
(y) Recently Adopted Accounting Standards | ||||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11 “Income Taxes – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forwards Exists.” ASU 2013-11 clarifies guidance and eliminates diversity in practice on the presentation of unrecognized tax benefits when a net operating loss carry forward, similar tax loss, or a tax credit carry forward exists at the reporting date. This new guidance became effective for annual and interim period for fiscal years beginning on or after December 15, 2013. The Company has applied the requirements of ASU 2013-11 prospectively in preparing the December 31, 2014 consolidated balance sheet, which resulted in a decrease to non-current deferred tax assets of $14.9 million and a decrease to non-current reserves for uncertain tax positions of $14.9 million. Had the Company applied the requirements of ASU 2013-11 retrospectively to the December 31, 2013 consolidated balance sheet, there would not have been a material impact. | ||||||
(z) Recently Issued Accounting Standards | ||||||
In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU No. 2014-08 changes the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations - that is, a major effect on the organization’s operations and financial results should be presented as discontinued operations. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the ASU requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. The Company is evaluating this update, however we do not anticipate that it will have a material effect on our results of operations, financial position or disclosures. | ||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, “Property, Plant, and Equipment”, and intangible assets within the scope of Topic 350, “Intangibles-Goodwill and Other”) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is evaluating this update to determine if it will have a material effect on our results of operations, financial position or disclosures. | ||||||
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40).” The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Business Combinations and Discontinued Operations [Abstract] | ||||||||||||
Acquisitions and Divestitures | Acquisitions and Divestitures | |||||||||||
Acquisitions | ||||||||||||
Systagenix | ||||||||||||
On July 30, 2013, KCI announced that it had signed a definitive share purchase agreement to acquire Systagenix, an established provider of advanced wound care products. The transaction closed on October 28, 2013. The adjusted purchase price paid, net of cash and cash equivalents, was $478.7 million. The acquisition was accounted for as a business combination using the acquisition method and the purchase price was funded using $350.0 million of incremental borrowings under our existing senior secured credit facility along with cash on hand. The allocation of the purchase price to the Systagenix tangible and identifiable intangible assets was based on their estimated fair values as of the acquisition date using the income approach. The excess of the purchase price over the identifiable intangible and net tangible assets was allocated to goodwill, which is not deductible for tax purposes. | ||||||||||||
The following table represents the allocation of the purchase price (in thousands): | ||||||||||||
December 31, | Adjustment | December 31, | ||||||||||
2013 | 2014 | |||||||||||
Goodwill | $ | 171,086 | $ | 1,737 | $ | 172,823 | ||||||
Identifiable intangible assets: | ||||||||||||
Customer relationships | 103,301 | 103,301 | ||||||||||
Developed technology | 91,700 | 91,700 | ||||||||||
Tradenames | 56,800 | 56,800 | ||||||||||
In-process research and development | 1,766 | 1,766 | ||||||||||
Tangible assets acquired and liabilities assumed: | ||||||||||||
Accounts receivable | 50,807 | 50,807 | ||||||||||
Inventories | 27,450 | 27,450 | ||||||||||
Other current assets | 1,902 | 1,902 | ||||||||||
Property, plant and equipment | 44,016 | 44,016 | ||||||||||
Other non-current assets | 139 | 139 | ||||||||||
Current liabilities | (34,752 | ) | (1,737 | ) | (36,489 | ) | ||||||
Other non-current liabilities | (79 | ) | (79 | ) | ||||||||
Net deferred tax liability | (35,388 | ) | (35,388 | ) | ||||||||
Total purchase price | $ | 478,748 | $ | — | $ | 478,748 | ||||||
Purchase accounting rules require that as certain pre-acquisition issues are identified, modified or resolved, resulting increases or decreases to the preliminary value of assets and liabilities are offset by a change in goodwill. Modifications to goodwill reflected in the “Adjustments” column above were primarily the result of assumed liabilities. | ||||||||||||
The net deferred tax liability relates primarily to the tax impact of future amortization associated with the intangible assets acquired, which is not deductible for tax purposes. | ||||||||||||
The following table reflects the unaudited pro forma condensed consolidated results of operations, as though the acquisition had occurred as of the beginning of the period presented (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Pro forma revenue | $ | 1,931,683 | $ | 1,943,296 | ||||||||
Pro forma net loss | $ | (552,153 | ) | $ | (168,001 | ) | ||||||
Pro forma condensed consolidated results of operations for the year ended December 31, 2013 were adjusted to exclude nonrecurring charges of $16.2 million related to transaction costs recognized as selling, general and administrative expenses. Pro forma condensed consolidated results of operations for the year ended December 31, 2012 were adjusted to include these nonrecurring charges. Additionally, the pro forma condensed consolidated results of operations for the year ended December 31, 2012 were adjusted to include $9.8 million of additional nonrecurring cost of sales associated with the preliminary purchase accounting adjustments related to the step up in value of inventory. | ||||||||||||
The unaudited pro forma condensed consolidated results of operations presented above are for illustrative purposes only and are not necessarily indicative of what actually would have occurred had the acquisition been in effect for the periods presented, nor are they indicative of future operating results. | ||||||||||||
TauTona Injector, LLC | ||||||||||||
In January 2014, LifeCell entered into an asset purchase agreement with TauTona Injector, LLC to purchase certain assets, including patents, know-how, and inventory. Under the terms of the asset purchase agreement, LifeCell made an initial cash payment of $3.0 million at the closing of the transaction. The asset purchase agreement also calls for additional payments by LifeCell of up to $31.5 million upon the achievement of certain milestones. For the year ended December 31, 2014, LifeCell paid $1.5 million under the asset purchase agreement related to milestone achievement. As of December 31, 2014, the accompanying consolidated balance sheet included $7.1 million under the caption “accrued expenses and other” and $9.0 million under the caption “other non-current liabilities” related to future anticipated milestone payments. | ||||||||||||
GID Group | ||||||||||||
In November 2014, LifeCell entered into an asset purchase agreement with GID Group to purchase certain assets, including patents and know-how. Under the terms of the asset purchase agreement, LifeCell made an initial cash payment of $5.0 million at the closing of the transaction. The asset purchase agreement also calls for additional payments by LifeCell of up to $10.0 million upon the achievement of certain milestones. As of December 31, 2014, the accompanying consolidated balance sheet included $4.5 million under the caption “accrued expenses and other” and $3.7 million under the caption “other non-current liabilities” related to future anticipated milestone payments. | ||||||||||||
Divestitures | ||||||||||||
Therapeutic Support Systems | ||||||||||||
On November 8, 2012, KCI closed on the divestiture of its TSS business to Getinge AB. The final adjusted purchase price paid by Getinge to KCI was $241.5 million. Under the terms of the Agreement, we agreed to provide transition services to Getinge after the close of the transaction. The historical results of operations of the disposal group, excluding the allocation of general corporate overhead, are reported as discontinued operations in the consolidated statements of operations. Discontinued operations amounts related to TSS also exclude incremental expenses related to our transition services agreement with Getinge and the service fee payable by Getinge under the transition services agreement. | ||||||||||||
The Company utilized the net proceeds from the sale to fund the acquisition of Systagenix and internal investments, which satisfied our reinvestment requirement associated with our senior secured credit facility. | ||||||||||||
The operating results of the TSS product portfolio included in discontinued operations are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Revenue | $ | — | $ | 188,121 | ||||||||
Earnings (loss) before income taxes | $ | (5,371 | ) | $ | 149,916 | |||||||
Income tax expense (benefit) | $ | (2,068 | ) | $ | 57,718 | |||||||
Earnings (loss) from discontinued operations | $ | (3,303 | ) | $ | 92,198 | |||||||
SPY® Elite System | ||||||||||||
On October 29, 2014, LifeCell Corporation entered into an agreement with Novadaq® Technologies Inc. (“Novadaq”) | ||||||||||||
to transfer all marketing and distribution rights to the SPY® Elite System from LifeCell to Novadaq, effective November 30, 2014. In connection with the transfer, the parties agreed to terminate various distribution agreements entered into between 2010 and 2011. LifeCell received a one-time payment of $4.5 million and sold existing inventory back to Novadaq. Under the terms of the agreement, LifeCell has agreed to provide limited transition services to Novadaq through December 31, 2014. In connection with the transfer, the parties have also resolved all legal disputes between them. | ||||||||||||
The operating results of the SPY® Elite System product portfolio included in discontinued operations are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue | $ | 22,204 | $ | 26,010 | $ | 16,950 | ||||||
Earnings (loss) before income taxes | $ | 7,436 | $ | (429 | ) | $ | (5,780 | ) | ||||
Income tax expense (benefit) | $ | 2,863 | $ | (165 | ) | $ | (2,225 | ) | ||||
Earnings (loss) from discontinued operations | $ | 4,573 | $ | (264 | ) | $ | (3,555 | ) | ||||
Supplemental_Balance_Sheet_Dat
Supplemental Balance Sheet Data | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||
Supplemental Balance Sheet Data | Supplemental Balance Sheet Data | |||||||
(a) Accounts Receivable, net | ||||||||
Accounts receivable consist of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Gross trade accounts receivable: | ||||||||
Billed trade accounts receivable | $ | 396,329 | $ | 418,804 | ||||
Unbilled receivables | 39,293 | 50,841 | ||||||
Less: Allowance for revenue adjustments | (61,460 | ) | (67,631 | ) | ||||
Gross trade accounts receivable | 374,162 | 402,014 | ||||||
Less: Allowance for bad debt | (13,087 | ) | (8,483 | ) | ||||
Net trade accounts receivable | 361,075 | 393,531 | ||||||
Other receivables | 9,408 | 14,047 | ||||||
$ | 370,483 | $ | 407,578 | |||||
(b) Inventories, net | ||||||||
Inventories consist of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods and tissue available for distribution | $ | 127,253 | $ | 110,937 | ||||
Goods and tissue in-process | 6,887 | 12,994 | ||||||
Raw materials, supplies, parts and unprocessed tissue | 67,567 | 71,876 | ||||||
201,707 | 195,807 | |||||||
Less: Amounts expected to be converted into equipment for short-term rental | (7,515 | ) | (3,952 | ) | ||||
Reserve for excess and obsolete inventory | (15,970 | ) | (10,288 | ) | ||||
$ | 178,222 | $ | 181,567 | |||||
(c) Net property, plant and equipment | ||||||||
Net property, plant and equipment consists of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Land | $ | 13,121 | $ | 13,438 | ||||
Buildings | 46,561 | 46,092 | ||||||
Equipment for short-term rental | 313,025 | 297,896 | ||||||
Machinery, equipment and furniture | 320,498 | 294,916 | ||||||
Leasehold improvements | 77,810 | 76,224 | ||||||
Inventory to be converted to equipment | 7,515 | 3,952 | ||||||
778,530 | 732,518 | |||||||
Less: accumulated depreciation | (490,482 | ) | (398,793 | ) | ||||
$ | 288,048 | $ | 333,725 | |||||
(d) Accrued expenses and other | ||||||||
Accrued expenses and other consist of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Payroll, benefits, commissions, bonuses and related taxes | $ | 65,740 | $ | 89,190 | ||||
Wake Forest royalty settlement and other royalties | 85,275 | 66,446 | ||||||
Interest | 43,607 | 43,253 | ||||||
Sales and other taxes | 24,469 | 21,827 | ||||||
Insurance | 8,729 | 9,425 | ||||||
Derivative liability | 13,936 | 914 | ||||||
Other accrued expenses | 101,728 | 97,920 | ||||||
$ | 343,484 | $ | 328,975 | |||||
Accounting_for_Goodwill_and_Ot
Accounting for Goodwill and Other Non-current Assets | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accounting for Goodwill and Other Non-current Assets [Abstract] | ||||||||||||||||
Accounting for Goodwill and Other Non-current Assets | Accounting for Goodwill and Other Non-current Assets | |||||||||||||||
As defined by the Codification, we have three reporting units: KCI, Regenerative Medicine and Systagenix. We have two reportable operating segments which correspond to our two global businesses: Advanced Wound Therapeutics (“AWT”) and Regenerative Medicine. Our AWT business is conducted by KCI and its subsidiaries, including Systagenix, while our Regenerative Medicine business is conducted by LifeCell and its subsidiaries. | ||||||||||||||||
(a) Goodwill | ||||||||||||||||
Based on the purchase price allocation, the components of goodwill by reporting unit are listed below (in thousands): | ||||||||||||||||
KCI | Regenerative Medicine | Systagenix | Total | |||||||||||||
Balance at December 31, 2012 | $ | 2,483,240 | $ | 996,535 | $ | — | $ | 3,479,775 | ||||||||
Goodwill acquired, net of purchase price adjustments | — | — | 171,086 | 171,086 | ||||||||||||
Impairment of goodwill | — | (272,200 | ) | — | (272,200 | ) | ||||||||||
Balance at December 31, 2013 | 2,483,240 | 724,335 | 171,086 | 3,378,661 | ||||||||||||
Adjustment to prior year acquisition | — | — | 1,737 | 1,737 | ||||||||||||
Reduction for sale of business | — | (2,100 | ) | — | (2,100 | ) | ||||||||||
Balance at December 31, 2014 | $ | 2,483,240 | $ | 722,235 | $ | 172,823 | $ | 3,378,298 | ||||||||
There were no impairments of goodwill or identifiable intangible assets during 2014. As of December 31, 2013, cumulative impairments of goodwill totaled $272.2 million. | ||||||||||||||||
(b) Identifiable intangible assets | ||||||||||||||||
Identifiable intangible assets include the following (in thousands): | ||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Definite-lived intangible assets: | ||||||||||||||||
Customer relationships and non-compete agreements | $ | 947,638 | $ | (400,806 | ) | $ | 947,706 | $ | (291,812 | ) | ||||||
Developed technology | 761,464 | (206,355 | ) | 759,898 | (128,728 | ) | ||||||||||
Tradenames and patents | 129,726 | (16,582 | ) | 85,693 | (7,322 | ) | ||||||||||
Total definite-lived intangible assets | 1,838,828 | (623,743 | ) | 1,793,297 | (427,862 | ) | ||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||
Tradenames | 1,178,800 | — | 1,178,800 | — | ||||||||||||
In-process research and development | 3,366 | — | 4,966 | — | ||||||||||||
Total indefinite-lived intangible assets | 1,182,166 | — | 1,183,766 | — | ||||||||||||
$ | 3,020,994 | $ | (623,743 | ) | $ | 2,977,063 | $ | (427,862 | ) | |||||||
Amortization expense, related to definite‑lived intangibles, was approximately $195.9 million, $190.3 million and $221.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||
The following table presents the estimated amortization expense, in total, to be incurred over the next five years for all definite-lived intangible assets as of December 31, 2014 (in thousands): | ||||||||||||||||
Year ending December 31, | Estimated Amortization Expense | |||||||||||||||
2015 | $178,498 | |||||||||||||||
2016 | $162,717 | |||||||||||||||
2017 | $149,423 | |||||||||||||||
2018 | $136,083 | |||||||||||||||
2019 | $125,348 | |||||||||||||||
(c) Debt issuance costs | ||||||||||||||||
As of December 31, 2014 and 2013, unamortized debt issuance costs related to our current senior secured credit facility and our fixed rate long-term debt, including the 10.5% Second Lien Notes and the 12.5% Unsecured Notes were collectively $77.9 million and $102.1 million, respectively. Amortization of debt issuance costs recorded for the years ended December 31, 2014, 2013 and 2012 were $24.1 million, $21.8 million and $18.2 million, respectively. Additionally, in the year ended December 31, 2012, we recorded approximately $16.2 million of debt issuance costs write offs in connection with the repurchase of senior unsecured notes. There were no write-offs of debt issuance costs during the year ended December 31, 2014 and 2013. The remaining costs for the senior secured credit facility and fixed rate long-term debt are amortized on a straight-line basis or using the effective interest method, as appropriate, over the respective term of debt to which they specifically relate. |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Long-Term Debt | Long-Term Debt | |||||||
Long-term debt consists of the following (in thousands): | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Senior Dollar Term E-1 Credit Facility(1) – due 2018 | $ | 1,927,241 | $ | 1,946,708 | ||||
Senior Euro Term E-1 Credit Facility(1) – due 2018 | 293,746 | 337,820 | ||||||
Senior Term E-2 Credit Facility(1) – due 2016 | 315,351 | 318,537 | ||||||
10.5% Second Lien Senior Secured Notes due 2018 | 1,750,000 | 1,750,000 | ||||||
12.5% Senior Unsecured Notes due 2019 | 612,000 | 612,000 | ||||||
3.25% Convertible Senior Notes due 2015 | 101 | 101 | ||||||
Notional amount of debt | 4,898,439 | 4,965,166 | ||||||
Senior Dollar Term E-1 Credit Facility Discount, net of accretion | (24,241 | ) | (30,926 | ) | ||||
Senior Euro Term E-1 Credit Facility Discount, net of accretion | (7,376 | ) | (10,693 | ) | ||||
Senior Term E-2 Credit Facility Discount, net of accretion | (2,955 | ) | (4,486 | ) | ||||
Second Lien Senior Secured Notes Discount, net of accretion | (20,205 | ) | (24,222 | ) | ||||
Senior Unsecured Notes Discount, net of accretion | (2,651 | ) | (3,025 | ) | ||||
Net discount on debt | (57,428 | ) | (73,352 | ) | ||||
Total debt, net of discount | 4,841,011 | 4,891,814 | ||||||
Less: Current installments | (25,721 | ) | (26,311 | ) | ||||
$ | 4,815,290 | $ | 4,865,503 | |||||
(1) On January 22, 2014, we entered into Amendment No. 5 to our senior secured credit facility. As a result of the amendment we created new classes of Dollar Term E-1 Loans, Euro Term E-1 Loans and Term E-2 Loans, having the same rights and obligations as the Dollar Term D-1 Loans, Euro Term D-1 Loans and Term D-2 Loans as set forth in the credit agreement and loan documents, except as revised by the amendment. | ||||||||
Senior Secured Credit Facility | ||||||||
Our senior secured credit facility (the “Senior Secured Credit Facility”) includes a $200.0 million revolving credit facility (the “Revolving Credit Facility”). Amounts available under the Revolving Credit Facility are available for borrowing and reborrowing until maturity. At December 31, 2014 and 2013, no revolving credit loans were outstanding and we had outstanding letters of credit issued by banks which are party to the Senior Secured Credit Facility of $39.0 million and $21.2 million, respectively. In addition, we had $11.4 million and $12.6 million of letters of credit issued by a bank not party to the Senior Secured Credit Facility as of December 31, 2014 and 2013, respectively. The capacity of the Revolving Credit Facility is reduced for the $39.0 million and $21.2 million of letters of credit issued by banks which are party to the Senior Secured Credit Facility as of December 31, 2014 and 2013, respectively. The resulting availability under the Revolving Credit Facility was $161.0 million and $178.8 million at December 31, 2014 and 2013, respectively. Commitment fees accrue at a rate of 0.50% on the amounts available under the Revolving Credit Facility. | ||||||||
Interest. On January 22, 2014, we entered into Amendment No. 5 to our Senior Secured Credit Facility (“Amendment No. 5”). As a result of the amendment, we created new classes of Dollar Term E-1 Loans, Euro Term E-1 Loans and Term E-2 Loans, having the same rights and obligations as the Dollar Term D-1 Loans, Euro Term D-1 Loans and Term D-2 Loans as set forth in the Credit Agreement and Loan Documents, except as revised by the amendment. Dollar Term E-1 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.00% or an adjusted base rate plus 2.00%. Euro Term E-1 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.25% or an adjusted base rate plus 2.25%. Term E-2 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 2.50% or an adjusted base rate plus 1.50%. The Eurocurrency rate shall be subject to a floor of 1.00%, and the adjusted base rate shall be subject to a floor of 2.00%. We paid fees of $1.8 million as a result of this amendment. | ||||||||
On March 10, 2015, we entered into Amendment No. 6 to our Senior Secured Credit Facility (“Amendment No. 6”). In connection with Amendment No. 6, certain applicable rates were modified so that (i) Dollar Term E-1 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.50% or an adjusted base rate plus 2.50%, (ii) Euro Term E-1 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.75% or an adjusted base rate plus 2.75%, and (iii) Term E-2 Loans bear interest at a rate equal to, at KCI’s election, a Eurocurrency rate plus 3.00% or an adjusted base rate plus 2.00%. The Eurocurrency rate shall be subject to a floor of 1.00%, and the adjusted base rate shall be subject to a floor of 2.00%. | ||||||||
We may elect interest periods of one, two, three, or six months for the Eurocurrency borrowings. Interest on base rate borrowings is payable quarterly in arrears. Interest on Eurocurrency borrowings is payable at the end of each applicable interest period or every three months in the case of interest periods in excess of three months. Interest on all past due amounts will accrue at 2.00% over the applicable rate. | ||||||||
Collateral. The Senior Secured Credit Facility is secured by a first priority lien and security interest in (a) substantially all equity interests of each of our 100% owned U.S. and first-tier material foreign subsidiaries (limited in the case of certain subsidiaries to 65% of the voting equity interests of such subsidiary) and (b) subject to certain exceptions, substantially all of our (in this instance referring only to us and our subsidiaries that are or will be co-borrowers or guarantors under the Senior Secured Credit Facility) present and future real property (with a value in excess of $20 million individually) and present and future tangible and intangible assets. The liens securing the Senior Secured Credit Facility are subject to permitted liens. | ||||||||
Guarantors. Our obligations under the Senior Secured Credit Facility are guaranteed by us and each of our material 100% owned subsidiaries, other than the subsidiaries that are co-borrowers under the senior secured credit facility, foreign subsidiaries and subsidiaries whose only assets are investments in foreign subsidiaries. | ||||||||
Maturity. The Revolving Credit Facility and the Term E-2 Facility mature on November 4, 2016, and the Dollar Term E-1 Facility and the Euro Term E-1 Facility mature on May 4, 2018. The principal amount of each of the Dollar Term E-1 Facility, the Euro Term E-1 Facility and the Term E-2 Facility amortizes in quarterly installments equal to 1.0% of the original principal amount of each such facility per annum until the respective final maturity date. | ||||||||
Voluntary Prepayments. We may prepay, in full or in part, borrowings under the Revolving Credit Facility without premium or penalty, subject to minimum prepayment amount and increment limitations. We may prepay, in full or in part, borrowings under the Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility without premium or penalty, subject to minimum prepayment amount and increment limitations, except that repayments of Dollar Term E-1 Loans, Euro Term E-1 Loans or Term E-2 Loans within 12 months of the effective date of Amendment No. 6 in connection with a repricing transaction will be subject to a 1.0% prepayment premium. | ||||||||
Mandatory Prepayments. Subject to certain exceptions, we must make periodic prepayments of the Dollar Term E-1 Facility, the Euro Term E-1 Facility and the Term E-2 Facility equal to: (i) 100% of the net cash proceeds of certain dispositions of property, (ii) 100% of the net cash proceeds of the issuance or incurrence of certain indebtedness, and (iii) 50% (with step-downs to 25% and 0% based upon achievement of specified total leverage ratios) of annual excess cash flow. | ||||||||
Representations. The Senior Secured Credit Facility contains representations generally customary for similar facilities and transactions. | ||||||||
Covenants. The Senior Secured Credit Facility contains affirmative and negative covenants customary for similar facilities and transactions, including limitations or restrictions on our ability to: | ||||||||
• | incur additional indebtedness (including guarantee obligations); | |||||||
• | incur liens; | |||||||
• | engage in certain fundamental changes, including changes in the nature of our business; | |||||||
• | sell assets; | |||||||
• | pay dividends and make other payments in respect of capital stock; | |||||||
• | make acquisitions, investments, loans and advances; | |||||||
• | pay and modify the terms of certain indebtedness; | |||||||
• | engage in certain transactions with affiliates; and | |||||||
• | enter into negative pledge clauses and clauses restricting subsidiary distributions. | |||||||
The Senior Secured Credit Facility contains financial covenants requiring us to meet certain leverage and interest coverage ratios, subject to certain equity cure rights. Beginning March 31, 2012, it is an event of default if we permit any of the following: | ||||||||
• | as of the last day of any fiscal quarter, our leverage ratio of debt to EBITDA, as defined in the senior secured credit agreement, to be greater than a maximum leverage ratio, initially set at 8.50 to 1.00 and stepped down periodically; and | |||||||
• | as of the last day of any fiscal quarter, our ratio of EBITDA to interest expense, as defined in the senior secured credit agreement, to be less than a minimum interest coverage ratio, initially set at 1.10 to 1.00 and stepped up periodically. | |||||||
As of December 31, 2014, we were in compliance with the covenants under the Senior Secured Credit Facility. | ||||||||
As a result of Amendment No. 6, the financial covenants were amended to remove the interest coverage ratio in its entirety and to set the total leverage ratio for any test period to be no greater than 8.25:1.00. | ||||||||
Events of Default. The Senior Secured Credit Facility contains events of default including, but not limited to, failure to pay principal or interest, breaches of representations and warranties, violations of affirmative or negative covenants, cross-defaults to other indebtedness, a bankruptcy or similar proceeding being instituted by or against us, rendering of certain monetary judgments against us, impairments of loan documentation or security, changes of control, and defaults with respect to certain ERISA obligations. | ||||||||
10.5% Second Lien Senior Secured Notes | ||||||||
In November 2011, we issued $1.750 billion aggregate principal amount of second lien notes due 2018. | ||||||||
Interest. Interest on the 10.5 % Second Lien Notes accrues at the rate of 10.5% per annum and is payable semi-annually in cash on each May 1 and November 1 to the persons who are registered holders at the close of business on April 15 and October 15 immediately preceding the applicable interest payment date. Under the terms of the registration rights agreements entered into with respect to these notes, additional interest was accrued at a rate of 0.25% and 0.50% from November 4, 2012 to February 4, 2013 and February 5, 2013 to March 15, 2013, respectively. Interest on the 10.5 % Second Lien Notes accrues from and includes the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of issuance. Interest is computed on the basis of a 360-day year consisting of twelve 30-day months. | ||||||||
Collateral. The second lien senior secured notes are secured by a second priority lien and security interest in (a) substantially all equity interests of each of our 100% owned U.S. and first-tier material foreign subsidiaries (limited in the case of certain subsidiaries to 65% of the voting equity interests of such subsidiary) and (b) subject to certain exceptions, substantially all of our (in this instance referring only to us and our subsidiaries that are or will be co-issuers or guarantors of the second lien notes) present and future real property (with a value in excess of $20 million individually) and present and future tangible and intangible assets. The liens securing the second lien notes are subject to permitted liens. | ||||||||
Guarantors. Our obligations under the second lien senior secured notes are guaranteed by us and each of our material 100% owned subsidiaries, other than the subsidiaries that are co-issuers of the second lien notes, foreign subsidiaries and subsidiaries whose only assets are investments in foreign subsidiaries. | ||||||||
Maturity. The second lien senior secured notes will mature on November 1, 2018. | ||||||||
Covenants. The indenture governing the second lien senior secured notes contains affirmative and negative covenants customary for similar transactions, including limitations or restrictions on our ability to: | ||||||||
• | incur additional indebtedness and guarantee indebtedness; | |||||||
• | pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; | |||||||
• | prepay, redeem or repurchase certain debt; | |||||||
• | make loans and investments; | |||||||
• | sell or otherwise dispose of assets; | |||||||
• | incur liens; | |||||||
• | enter into transactions with affiliates; | |||||||
• | enter into agreements restricting our subsidiaries’ ability to pay dividends; and | |||||||
• | consolidate, merge or sell all or substantially all of our assets. | |||||||
As of December 31, 2014, we were in compliance with all covenants under the second lien senior secured notes indenture. | ||||||||
Optional Redemption. At any time prior to November 1, 2014, we may redeem up to 35% of the aggregate principal amount of the second lien senior secured notes with the net cash proceeds of certain equity offerings, at a redemption price equal to 110.500% of the aggregate principal amount of the second lien senior secured notes being redeemed plus accrued and unpaid interest. | ||||||||
At any time prior to November 1, 2015, we may redeem all or part of the second lien senior secured notes at a redemption price equal to 100% of the aggregate principal amount of the second lien senior secured notes to be redeemed, plus a make-whole premium and accrued and unpaid interest. | ||||||||
At any time on or after November 1, 2015, we may redeem the second lien senior secured notes, in whole or in part, at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the twelve‑month period commencing on November 1 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption: | ||||||||
Year | Price | |||||||
2015 | 105.25% | |||||||
2016 | 102.63% | |||||||
2017 and thereafter | 100.00% | |||||||
Change of Control. If we experience certain kinds of changes of control, we will be required to offer to purchase the second lien senior secured notes at a redemption price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. | ||||||||
Events of Default. The indenture governing the second lien senior secured notes contains events of default including, but not limited to, failure to pay principal or interest, violations of affirmative or negative covenants, cross-defaults to other indebtedness, a bankruptcy or similar proceeding being instituted by or against us, rendering of certain monetary judgments against us, and impairments of loan documentation or security. | ||||||||
12.5% Senior Unsecured Notes | ||||||||
In November 2011, we issued $750 million aggregate principal amount of senior unsecured notes due 2019; $612.0 million of which are still outstanding. | ||||||||
Interest. Interest on the senior unsecured notes accrues at the rate of 12.5% per annum and is payable semi-annually in cash on each May 1 and November 1 to the persons who are registered holders at the close of business on April 15 and October 15 immediately preceding the applicable interest payment date. Under the terms of the registration rights agreements entered into with respect to these notes, additional interest was accrued at a rate of 0.25% and 0.50% from November 4, 2012 to February 4, 2013 and February 5, 2013 to March 15, 2013, respectively. Interest on the senior unsecured notes accrues from and includes the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of issuance. Interest is computed on the basis of a 360-day year consisting of twelve 30-day months. | ||||||||
Collateral. The senior unsecured notes are senior unsecured obligations. | ||||||||
Guarantors. Our obligations under the senior unsecured notes are guaranteed by us and each of our material 100% owned subsidiaries, other than the subsidiaries that are co-issuers of the senior unsecured notes, foreign subsidiaries and subsidiaries whose only assets are investments in foreign subsidiaries. | ||||||||
Maturity. The senior unsecured notes will mature on November 1, 2019. | ||||||||
Covenants. The indenture governing the senior unsecured notes contains affirmative and negative covenants customary for similar transactions, including limitations or restrictions on our ability to: | ||||||||
• | incur additional indebtedness and guarantee indebtedness; | |||||||
• | pay dividends or make other distributions in respect of, or repurchase or redeem, capital stock; | |||||||
• | prepay, redeem or repurchase certain debt; | |||||||
• | make loans and investments; | |||||||
• | sell or otherwise dispose of assets; | |||||||
• | incur liens; | |||||||
• | enter into transactions with affiliates; | |||||||
• | enter into agreements restricting our subsidiaries’ ability to pay dividends; and | |||||||
• | consolidate, merge or sell all or substantially all of our assets. | |||||||
As of December 31, 2014, we were in compliance with all covenants under the senior unsecured notes indenture. | ||||||||
Optional Redemption. At any time prior to November 1, 2014, we may redeem up to 35% of the aggregate principal amount of the senior unsecured notes with the net cash proceeds of certain equity offerings, at a redemption price equal to 112.500% of the aggregate principal amount of the senior unsecured notes being redeemed plus accrued and unpaid interest. | ||||||||
At any time prior to November 1, 2015, we may redeem all or part of the senior unsecured notes at a redemption price equal to 100% of the aggregate principal amount of the senior unsecured notes to be redeemed, plus a make-whole premium and accrued and unpaid interest. | ||||||||
At any time on or after November 1, 2015, we may redeem the senior unsecured notes, in whole or in part, at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the twelve‑month period commencing on November 1 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption: | ||||||||
Year | Price | |||||||
2015 | 106.25% | |||||||
2016 | 103.13% | |||||||
2017 and thereafter | 100.00% | |||||||
Change of Control. If we experience certain kinds of changes of control, we will be required to offer to purchase the senior unsecured notes at a redemption price equal to 101% of the principal amount thereof, plus accrued and unpaid interest. | ||||||||
Events of Default. The indenture governing the senior unsecured notes contains events of default including, but not limited to, failure to pay principal or interest, violations of affirmative or negative covenants, cross-defaults to other indebtedness, a bankruptcy or similar proceeding being instituted by or against us, rendering of certain monetary judgments against us, and impairments of loan documentation or security. | ||||||||
3.25% Convertible Senior Notes | ||||||||
In 2008, we issued $690.0 million aggregate principal amount of 3.25% convertible senior notes due 2015 (the “Convertible Notes”). The Convertible Notes are governed by the terms of an indenture dated as of April 21, 2008 (the “Indenture”). | ||||||||
In connection with the Merger, the holders of the Convertible Notes had the right to require us to repurchase some or all of their Convertible Notes as provided in the Indenture. The repurchase date for any Convertible Notes tendered to us was November 30, 2011. The repurchase price was the principal amount of the Convertible Notes plus accrued interest. The holders of the Convertible Notes that did not elect to require us to repurchase their Convertible Notes maintained the right to convert their Convertible Notes into cash on or before November 29, 2011. As of December 31, 2014, $101,000 aggregate principal amount of the notes remained outstanding. | ||||||||
Interest and Future Maturities | ||||||||
Interest paid during the years ended December 31, 2014, 2013 and 2012 was $367.0 million, $385.7 million, and $432.2 million, respectively. | ||||||||
Future maturities of long-term debt at December 31, 2014 were (in thousands): | ||||||||
Year | Amount | |||||||
2015 | $ | 25,721 | ||||||
2016 | $ | 334,584 | ||||||
2017 | $ | 22,434 | ||||||
2018 | $ | 3,903,700 | ||||||
2019 | $ | 612,000 | ||||||
Thereafter | $ | — | ||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments and Fair Value Measurements | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Derivative Financial Instruments and Fair Value Measurements Disclosure [Abstract] | ||||||||||||||||||||
Derivative Financial Instruments and Fair Value Measurements | Derivative Financial Instruments and Fair Value Measurements | |||||||||||||||||||
We are exposed to credit loss in the event of nonperformance by counterparties to the extent of the fair values of the outstanding interest rate swap agreements, interest rate cap agreements and foreign currency exchange contracts, but we do not anticipate nonperformance by any of the counterparties. All derivative instruments are recorded on the balance sheet at fair value. We do not use financial instruments for speculative or trading purposes. | ||||||||||||||||||||
Derivatives Not Designated as Hedges | ||||||||||||||||||||
At December 31, 2014 and 2013, we had three interest rate swap agreements to convert a portion of our outstanding variable rate debt to a fixed rate basis. These agreements have not been designated as hedging instruments, and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. The interest rate swap agreements have quarterly interest payments, receive rates based on the higher of three-month USD LIBOR or 1.25% and pay rates based on fixed rates, due on the last day of March, June, September and December. The aggregate notional amount decreases quarterly by amounts ranging from $1.7 million to $56.4 million until maturity. | ||||||||||||||||||||
The following chart summarizes these agreements (dollars in thousands): | ||||||||||||||||||||
Effective Dates | Outstanding Notional Amount | Fixed Interest Rate | ||||||||||||||||||
12/31/13-12/31/16 | $487,667 | 2.26% | ||||||||||||||||||
12/31/13-12/31/16 | $487,667 | 2.25% | ||||||||||||||||||
12/31/13-12/31/16 | $487,667 | 2.25% | ||||||||||||||||||
During the years ended December 31, 2013 and 2012, we had interest rate cap agreements with initial notional amounts of $1.600 billion at a cost of $2.2 million that effectively limited the interest rate to 2% on a portion of the borrowings under our Senior Secured Credit Facility. The interest rate cap agreements expired on December 31, 2013. | ||||||||||||||||||||
We also use derivative instruments to manage our transactional currency exposures when our foreign subsidiaries enter into transactions denominated in currencies other than their local currency. These nonfunctional currency exposures relate primarily to existing and forecasted intercompany receivables and payables arising from intercompany purchases of manufactured products. We enter into foreign currency exchange contracts to mitigate the impact of currency fluctuations on transactions denominated in nonfunctional currencies, thereby limiting risk that would otherwise result from changes in exchange rates. These contracts are not designated as hedges; as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. Although we use master netting agreements with our derivative counterparties, we do not offset derivative asset and liability positions in the consolidated balance sheet. The periods of the foreign currency exchange contracts generally do not exceed one year and correspond to the periods of the exposed transactions and related settlements. At December 31, 2014, we had no outstanding foreign currency exchange contracts. At December 31, 2013, we had foreign currency exchange contracts to sell or purchase $14.3 million of various currencies. | ||||||||||||||||||||
Fair Value Measurements | ||||||||||||||||||||
The Codification defines fair value as the exit price that would be received to sell an asset or paid to transfer a liability. The Fair Value Measurements and Disclosure topic of the Codification establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. | ||||||||||||||||||||
The carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, accounts payable and long-term obligations, excluding our borrowings under our senior secured credit facility and fixed rate long-term debt, including the 10.5% Second Lien Notes, the 12.5% Unsecured Notes and the Convertible Notes approximates fair value. The fair value of our borrowings under our Senior Secured Credit Facility and fixed rate long-term debt was $2.501 billion and $2.584 billion, respectively, at December 31, 2014. The fair value of our borrowings under our Senior Secured Credit Facility and fixed rate long-term debt was $2.615 billion and $2.694 billion, respectively, at December 31, 2013. The fair value of our long-term debt was estimated based upon open-market trades at or near year end. | ||||||||||||||||||||
All of our derivatives, as of the reporting date, use inputs considered as Level 2. The interest rate swap agreements and interest rate cap agreements are valued using a discounted cash flow model that takes into account the present value of the expected future cash flows under the terms of the agreements by using market information available as of the reporting date, including prevailing interest rates and related forward interest rate curves. The foreign currency exchange contracts are valued using a discounted cash flow model that takes into account the present value of the future cash flows under the terms of the agreements by using market information available as of the reporting date, including prevailing foreign currency exchange rates and related foreign currency exchange rate curves. | ||||||||||||||||||||
The following table sets forth the location and aggregate fair value amounts of all derivative instruments with credit-related contingent features (in thousands): | ||||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Balance | Fair Value | Balance | Fair Value | |||||||||||||||||
Sheet | Sheet | |||||||||||||||||||
Location | December 31, | December 31, | Location | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Interest rate swap agreements | Prepaid expenses and other | $ | — | $ | — | Accrued expenses and other | $ | 13,936 | $ | 345 | ||||||||||
Interest rate swap agreements | Other non-current assets | — | — | Other non-current liabilities | 8,067 | 31,906 | ||||||||||||||
Foreign currency exchange contracts | Prepaid expenses and other | — | 146 | Accrued expenses and other | — | 569 | ||||||||||||||
Total derivatives | $ | — | $ | 146 | $ | 22,003 | $ | 32,820 | ||||||||||||
The following table summarizes the amount of gain (loss) on derivative not designated as hedging instruments (in thousands): | ||||||||||||||||||||
Year ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Interest rate swap agreements | $ | (5,245 | ) | $ | 2,618 | $ | (25,486 | ) | ||||||||||||
Interest rate cap agreements | — | (9 | ) | (1,583 | ) | |||||||||||||||
Foreign currency exchange contracts | 62 | (1,033 | ) | (4,364 | ) | |||||||||||||||
$ | (5,183 | ) | $ | 1,576 | $ | (31,433 | ) | |||||||||||||
Certain of our derivative instruments contain provisions that require compliance with the restrictive covenants of our Senior Secured Credit Facility. See Note 5 for further discussion of the restrictive covenants of our Senior Secured Credit Facility. | ||||||||||||||||||||
If we default under our credit facilities, the lenders could require immediate repayment of the entire principal. If those lenders require immediate repayment, we may not be able to repay them which could result in the foreclosure of substantially all of our assets. In these circumstances, the counterparties to the derivative instruments could request immediate payment or full collateralization on derivative instruments in net liability positions. Certain of our derivative counterparties are also parties to our Senior Secured Credit Facility. | ||||||||||||||||||||
No collateral has been posted by us in the normal course of business. If the credit-related contingent features underlying these agreements were triggered on December 31, 2014, we could be required to settle or post the full amount as collateral to its counterparties. | ||||||||||||||||||||
We did not have any measurements of financial assets or financial liabilities at fair value on a nonrecurring basis at December 31, 2014 or 2013. |
Leasing_Obligations
Leasing Obligations | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Leases [Abstract] | ||||||||
Leasing Obligations | Leasing Obligations | |||||||
We are obligated for equipment under various capital leases, which expire at various dates during the next three years. At December 31, 2014 and 2013, the gross amount of equipment under capital leases totaled $2.6 million and $2.7 million and related accumulated depreciation was approximately $1.7 million and $1.2 million, respectively. | ||||||||
We lease computer and telecommunications equipment, service and sales vehicles, office space, various storage spaces and manufacturing facilities under non-cancelable operating leases, which expire at various dates over the next 20 years. Total rental expense for operating leases was $29.7 million, $27.8 million and $43.0 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||
Future minimum lease payments under capital and non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2014 are as follows (in thousands): | ||||||||
Capital | Operating | |||||||
Leases | Leases | |||||||
2015 | $ | 526 | $ | 22,387 | ||||
2016 | 394 | 14,947 | ||||||
2017 | — | 11,745 | ||||||
2018 | — | 8,918 | ||||||
2019 | — | 6,727 | ||||||
Thereafter | — | 28,587 | ||||||
Total minimum lease payments | $ | 920 | $ | 93,311 | ||||
Less amount representing interest | (66 | ) | ||||||
Present value of net minimum capital lease payments | 854 | |||||||
Less current portion | (488 | ) | ||||||
Obligations under capital leases, excluding current installments | $ | 366 | ||||||
Income_Taxes_Benefit
Income Taxes (Benefit) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes (Benefit) | Income Taxes (Benefit) | |||||||||||
The following table summarizes earnings (loss) before income taxes (benefit) of U.S. and non-U.S. operations (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. | $ | (515,976 | ) | $ | (845,261 | ) | $ | (492,869 | ) | |||
Non-U.S. | 161,335 | 133,578 | 259,122 | |||||||||
(354,641 | ) | (711,683 | ) | (233,747 | ) | |||||||
Earnings (loss) from discontinued operations before income taxes | 7,436 | (5,800 | ) | 144,136 | ||||||||
Earnings (loss) from continuing operations before income taxes | $ | (362,077 | ) | $ | (705,883 | ) | $ | (377,883 | ) | |||
The following table summarizes the composition of income tax expense (benefit) (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
U.S. Federal | $ | 18,149 | $ | 16,777 | $ | 17,693 | ||||||
U.S. State | 2,220 | 8,162 | 3,148 | |||||||||
Non-U.S. | 14,633 | 9,125 | 13,218 | |||||||||
Total current expense | 35,002 | 34,064 | 34,059 | |||||||||
Deferred: | ||||||||||||
U.S. Federal | (138,046 | ) | (158,735 | ) | (104,476 | ) | ||||||
U.S. State | (19,998 | ) | (26,383 | ) | (19,900 | ) | ||||||
Non-U.S. | (1,126 | ) | (1,971 | ) | (2,013 | ) | ||||||
Total deferred tax expense (benefit) | (159,170 | ) | (187,089 | ) | (126,389 | ) | ||||||
(124,168 | ) | (153,025 | ) | (92,330 | ) | |||||||
Income tax expense (benefit) related to discontinued operations | 2,863 | (2,233 | ) | 55,493 | ||||||||
Income tax expense (benefit) related to continuing operations | $ | (127,031 | ) | $ | (150,792 | ) | $ | (147,823 | ) | |||
The reconciliation of the U.S. federal statutory rate to the consolidated effective tax rate is as follows: | ||||||||||||
Year ended December 31, | ||||||||||||
2014(1) | 2013(1) | 2012(1) | ||||||||||
Computed “expected” tax rate | 35 | % | 35 | % | 35 | % | ||||||
State income taxes, net of federal benefit | 3.4 | 1.7 | 3.8 | |||||||||
Non-deductible items | (0.1 | ) | (0.9 | ) | (0.5 | ) | ||||||
Effect of international operations | (4.4 | ) | (1.5 | ) | 0.1 | |||||||
Section 199 production deduction | 0.8 | 0.2 | 0.5 | |||||||||
Research and development credit | 0.1 | 0.3 | — | |||||||||
Goodwill impairment | — | (13.4 | ) | — | ||||||||
Other, net | 0.2 | 0.1 | 0.6 | |||||||||
35 | 21.5 | 39.5 | ||||||||||
Change in rate related to discontinued operations | 0.1 | (0.1 | ) | (0.4 | ) | |||||||
Effective tax rate related to continuing operations | 35.1 | % | 21.4 | % | 39.1 | % | ||||||
(1) | The years ended December 31, 2014, 2013 and 2012 include a loss before income tax benefit. The consolidated effective income tax rates represent adjustments to the computed “expected” income tax benefit rate for the period. Therefore, negative percentages represent reductions to the income tax benefit rate. | |||||||||||
The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and liabilities consist of the following (in thousands): | ||||||||||||
December 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Deferred Tax Assets: | ||||||||||||
Non-U.S. tax credit | $ | 76,320 | $ | 67,765 | ||||||||
U.S. research and development tax credit | 978 | — | ||||||||||
Net operating loss | 100,772 | 67,229 | ||||||||||
Accounts receivable | (1,468 | ) | 9,377 | |||||||||
Non-U.S. net operating loss carry forwards | 36,904 | 23,259 | ||||||||||
Accrued liabilities | 87,412 | 12,156 | ||||||||||
Deferred non-U.S. tax asset | 43,864 | 48,223 | ||||||||||
Accrued interest | 14,686 | 20,296 | ||||||||||
Disallowed interest carry forward | 106,860 | 52,407 | ||||||||||
Unrealized foreign exchange currency loss, net | — | 371 | ||||||||||
Inventory | 9,717 | 2,124 | ||||||||||
Other | 891 | 618 | ||||||||||
Total gross deferred tax assets | 476,936 | 303,825 | ||||||||||
Less: valuation allowances | (82,299 | ) | (55,944 | ) | ||||||||
Net deferred tax assets | 394,637 | 247,881 | ||||||||||
Deferred Tax Liabilities: | ||||||||||||
Intangible assets, amortizable | (384,485 | ) | (447,286 | ) | ||||||||
Intangible assets, indefinite-lived | (454,779 | ) | (455,417 | ) | ||||||||
Loan fees | (30,751 | ) | (31,343 | ) | ||||||||
U.S. tax on non-U.S. earnings | (256,039 | ) | (190,665 | ) | ||||||||
Deferred U.S. state tax liability | 3,556 | (831 | ) | |||||||||
Unrealized foreign exchange currency gain, net | (19,883 | ) | — | |||||||||
Depreciation | (56,865 | ) | (70,870 | ) | ||||||||
Other | (6,489 | ) | (2,372 | ) | ||||||||
Total gross deferred tax liabilities | (1,205,735 | ) | (1,198,784 | ) | ||||||||
Net deferred tax liability | (811,098 | ) | (950,903 | ) | ||||||||
Less: current deferred tax asset | (63,025 | ) | (23,621 | ) | ||||||||
Less: non-current deferred tax asset | (31,692 | ) | (31,459 | ) | ||||||||
Less: current deferred tax liability | 113,658 | 2,199 | ||||||||||
Non-current deferred tax liability | $ | (792,157 | ) | $ | (1,003,784 | ) | ||||||
The change in the balance sheet deferred tax accounts reflect deferred income tax benefit, the deferred tax impact of other comprehensive income items and purchase accounting adjustments. | ||||||||||||
At December 31, 2014, $219.2 million of U.S. federal net operating losses, $545.9 million of U.S. state net operating losses and $154.9 million of non-U.S. net operating losses were available for carry forward. In addition, non-U.S. unrealized tax credits of $78.6 million were recorded relating to the anticipated tax credits that will be available when non-U.S. earnings will be repatriated to the U.S. These non-U.S. unrealized tax credits are netted against the deferred tax liability for U.S. tax on non-U.S. earnings. Additionally, for U.S. federal income tax purposes, non-U.S. tax credit carry forwards of $76.3 million are available to be utilized once sufficient non-U.S. source income is recognized. The losses generally expire within a period of three to 20 years, with some non-U.S. losses available indefinitely. The non-U.S. tax credit expiration period is 10 years which will begin when the credits become realized. At December 31, 2014, we had valuation allowances of $36.7 million associated with U.S. state net operating losses and $45.6 million associated with non-U.S. loss carry forwards. The net valuation allowance increased by $26.3 million in 2014 due primarily to uncertainty regarding the ability to utilize U.S. state net operating losses and non-U.S. operating losses. We believe that the remaining deferred income tax assets will be realized based on reversals of existing taxable temporary differences and expected repatriation of non-U.S. earnings to the U.S. Accordingly, we believe that no additional valuation allowances are necessary. | ||||||||||||
We provide tax reserves for U.S. federal, U.S. state, U.S. local and non-U.S. uncertain tax positions. The development of these tax positions requires subjective, critical estimates and judgments about tax matters, potential outcomes and timing. Although the outcome of open tax examinations is uncertain, in management’s opinion, adequate provisions for income taxes have been made for potential liabilities resulting from these reviews. If actual outcomes differ materially from these estimates, they could have a material impact on our financial condition and results of operations. Differences between actual results and assumptions, or changes in assumptions in future periods, are recorded in the period they become known. To the extent additional information becomes available prior to resolution, such accruals are adjusted to reflect probable outcomes. | ||||||||||||
At December 31, 2014 and 2013, we had $33.3 million and $53.7 million, respectively, of unrecognized tax benefits that were classified as long-term liabilities, of which $26.2 million and $30.5 million, respectively, would favorably impact our effective tax rate, if recognized. The reconciliation of the allowance for uncertain tax positions is as follows (in thousands): | ||||||||||||
December 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Balance at beginning of year | $ | 41,694 | $ | 33,634 | ||||||||
Gross additions for tax positions of prior years | 10,683 | 6,644 | ||||||||||
Gross reductions for tax positions of prior years | (18,331 | ) | (1,488 | ) | ||||||||
Gross additions on positions related to the current year | 6,494 | 5,056 | ||||||||||
Reductions resulting from a lapse of the applicable statute of limitation | (724 | ) | (2,152 | ) | ||||||||
Balance at end of year | 39,816 | 41,694 | ||||||||||
Accrued interest and penalties | 8,341 | 11,988 | ||||||||||
ASU 2013-11 reclassification | (14,857 | ) | — | |||||||||
Gross unrecognized income tax benefit | $ | 33,300 | $ | 53,682 | ||||||||
Our continuing practice is to recognize interest and penalties related to income tax matters in income tax expense. We recognized a decrease of net interest and penalties in the consolidated statement of operations of approximately $3.6 million in 2014 comprised of an increase of $0.9 million associated with ongoing accruals and a decrease of $4.5 million associated with releases. In 2013, we recognized an increase of net interest and penalties in the consolidated statement of operations of approximately $1.2 million, comprised of an increase of $1.8 million associated with ongoing accruals and a decrease of $0.6 million associated with releases. Additionally, $8.3 million and $12.0 million of interest and penalties were recorded in the consolidated balance sheets as of December 31, 2014 and 2013, respectively. | ||||||||||||
We operate in multiple tax jurisdictions, both inside and outside the United States and are routinely under audit by U.S. federal, U.S. state and non-U.S. tax authorities. These reviews can involve complex matters that may require an extended period of time for resolution. Our U.S. federal income tax returns have been examined and settled through tax year ending November 3, 2011. We have ongoing audits in various U.S. state and U.S. local jurisdictions, as well as audits in various non-U.S. jurisdictions. In general, the tax years 2009 through 2013 remain open in the major taxing jurisdictions, with some U.S. state and non-U.S. jurisdictions remaining open longer as a result of net operating losses and longer statute of limitation periods. | ||||||||||||
It is reasonably possible that the total amount of unrecognized tax benefits could decrease within the next twelve months by $0.5 million. This decrease would result from the expiration of the statute of limitations and the completion of tax examinations in multiple jurisdictions. | ||||||||||||
Income taxes paid, net of income tax refunds, were $24.9 million, $36.3 million, and $28.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Equity | Equity |
Under the terms of Acelity’s Third Amended and Restated Limited Partnership Agreement dated September 1, 2014, the limited partners contributed 100% of the capital to the partnership. No partner is required to make any additional capital contributions to the partnership. Net income (loss) and distributions are allocated to the general and limited partners in proportion to their respective capital contributions. |
Incentive_Compensation_Plans
Incentive Compensation Plans | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||
Incentive Compensation Plans | Incentive Compensation Plans | ||||||||||||||||||
Equity-based compensation expense was recognized in the consolidated statements of operations as follows (in thousands): | |||||||||||||||||||
Year ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Rental expenses | $ | 106 | $ | 52 | $ | 2 | |||||||||||||
Cost of sales | 105 | 113 | 88 | ||||||||||||||||
Selling, general and administrative expenses | 3,822 | 2,760 | 1,979 | ||||||||||||||||
Total equity-based compensation expense, net of tax | $ | 4,033 | $ | 2,925 | $ | 2,069 | |||||||||||||
There was no income tax impact associated with equity-based compensation during the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||
Investment Plan | |||||||||||||||||||
We have an Investment Plan intended to qualify as a deferred compensation plan under Section 401(k) of the Internal Revenue Code of 1986. The Investment Plan is available to all employees in the United States and we match employee contributions up to a specified limit. During the years ended December 31, 2014, 2013 and 2012 matching contributions charged to expense were approximately $13.3 million, $12.2 million, and $14.7 million, respectively. | |||||||||||||||||||
Equity Based Plans | |||||||||||||||||||
Profits Interest | |||||||||||||||||||
On November 11, 2011, the Board of Directors of Chiron Holdings GP, Inc. (“Holdings GP”), in its capacity as general partner of Chiron Guernsey Holdings L.P. Inc. (the “Limited Partnership”), approved the Chiron Guernsey Holdings L.P. Inc. Executive Equity Incentive Plan (the “Executive Plan”). The maximum aggregate number of interest units (“Profits Interest Units”) available for awards under the Executive Plan is 23,641,333, subject to adjustment as provided for in the plan. The vesting terms and expiration of each award shall be fixed by the general partner. The distribution threshold for awards granted under this plan is established by the general partner. | |||||||||||||||||||
For incentive equity awards granted during the years ended December 31, 2014, 2013 and 2012, a portion of the awards granted vests incrementally over a period of four years. The remaining portion of awards granted during the years ended December 31, 2014, 2013 and 2012 vest at graduated levels upon the attainment of certain performance conditions established by the general partner. The performance conditions are based on achieving certain levels of multiple of invested capital and subject to the satisfaction of market conditions based upon the occurrence of a major liquidity event in the future. Subject to certain limitations, the weighted average distribution threshold (i.e., the amount of distributions that need to be made by the Limited Partnership with respect to each limited partnership unit individually prior to such Profits Interest Unit participating in the distributions of the Limited Partnership) for awards granted during the years ended December 31, 2014, 2013 and 2012 is $8.11, $7.40 and $5.00, respectively. | |||||||||||||||||||
The weighted-average estimated fair value of time-based Profits Interest Units granted during the years ended December 31, 2014, 2013 and 2012, was $1.62, $2.30 and $1.33 per unit, respectively, using the Black-Scholes-Merton option pricing model. The weighted-average estimated fair value of performance-based Profits Interest Units granted during the years ended December 31, 2014, 2013 and 2012, was $1.42, $1.98 and $1.15 per unit, respectively, using the Black-Scholes-Merton option pricing model. A discount for lack of marketability was applied to the per unit fair value to reflect increased risk arising from the inability to readily sell the Profits Interest Units. The estimated fair values for these periods included the following weighted average assumptions for both the time-based and performance-based Profits Interest Units (annualized percentages): | |||||||||||||||||||
Year ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Expected stock volatility | 39.00% | 43.00% | 56.00% | ||||||||||||||||
Expected dividend yield | — | — | — | ||||||||||||||||
Risk-free interest rate | 0.50% | 0.60% | 0.90% | ||||||||||||||||
Expected life (years) | 2 | 3 | 4 | ||||||||||||||||
Post-Merger assumptions were determined as follows. The expected stock volatility is based on the Company’s historical volatility over the previous five year period, which is the expected holding period. This historical volatility was increased to incorporate the implied volatility associated with the Company’s increase in leverage from historical levels. The expected dividend yield is zero. The risk-free interest rate for the period was based on the U.S. Treasury yield curve in effect at the time of grant. The expected life is based on the estimated holding period until a major liquidity event. | |||||||||||||||||||
A summary of our Profits Interest Unit (“PIU”) activity, and related information is set forth in the table below (in thousands, except weighted average grant date fair value): | |||||||||||||||||||
Time-based | Performance-based | Total | Weighted | ||||||||||||||||
Average Grant | |||||||||||||||||||
Date Fair Value | |||||||||||||||||||
PIU outstanding – December 31, 2013 | 8,562 | 7,922 | 16,484 | $ | 1.5 | ||||||||||||||
Granted | 2,054 | 2,054 | 4,108 | $ | 1.52 | ||||||||||||||
Repurchased | (947 | ) | — | (947 | ) | $ | 1.45 | ||||||||||||
Forfeited/Expired | (1,698 | ) | (3,123 | ) | (4,821 | ) | $ | 1.75 | |||||||||||
PIU outstanding – December 31, 2014 | 7,971 | 6,853 | 14,824 | $ | 1.42 | ||||||||||||||
PIU exercisable as of December 31, 2014 | 4,583 | — | 4,583 | $ | 1.49 | ||||||||||||||
As of December 31, 2014, there was $4.1 million and $7.9 million of total unrecognized compensation cost, net of estimated forfeitures, related to non-vested time-based and performance-based Profits Interest Units, respectively, granted under our plan subsequent to the Merger. The unrecognized compensation cost for the time-based awards is expected to be recognized over a weighted average period of 2.4 years. The unrecognized compensation cost of the performance-based awards is expected to be recognized as it becomes probable the market condition will be satisfied. There is no contractual term for the PIU agreements, however, with certain consent of the Limited Partnership and plan participants, the general partner may amend, alter, suspend, discontinue, or terminate the Executive Plan or any portion thereof at any time. | |||||||||||||||||||
Appreciation Rights | |||||||||||||||||||
On December 14, 2011, the Board of Directors of Holdings GP, in its capacity as general partner of the Limited Partnership, approved the Chiron Guernsey Holdings L.P. Inc. Appreciation Rights Plan (as amended from time to time, the “Appreciation Rights Plan”). The maximum aggregate number of Class A-2 interests (“Appreciation Rights”) in respect of which awards can be issued under the Appreciation Rights Plan is 4,172,000, subject to adjustment as provided for in the plan. The base price of units granted under this plan is established by the administrator (the compensation committee of the board of the general partner, or any committee or subcommittee thereof to which the compensation committee of the board delegates authority to administer the Appreciation Rights Plan) as of the date of grant, which may not be less than the fair market value of a Class A-2 interest as of the date of grant. The vesting terms and expiration of each award shall be fixed by the administrator. | |||||||||||||||||||
For incentive equity awards granted during the years ended December 31, 2014, 2013 and 2012, a portion of the awards granted vest in full upon the earlier of a change in control of the Limited Partnership or the fourth anniversary of the date of grant. The remaining portion of awards granted in 2012 vest at graduated rates upon the attainment of certain performance metrics established by the administrator and subject to the satisfaction of certain market conditions based upon the occurrence of a major liquidity event in the future. Upon exercise or redemption of vested awards, employees generally receive a cash payment equal to the product of the excess, if any, of the fair market value of a Class A-2 interest at the time of exercise or redemption over the base price times the number of Class A-2 interests under the award. | |||||||||||||||||||
The weighted-average estimated grant-date fair value of time-based Appreciation Rights granted during the years ended December 31, 2014, 2013 and 2012, was $1.66, $1.37 and $0.81 per unit, respectively, using the Black-Scholes-Merton option pricing model. The weighted-average estimated grant-date fair value of performance-based Appreciation Rights granted during the years ended December 31, 2014, 2013 and 2012, was $1.46, $1.35 and $0.81 per unit, respectively, using the Black-Scholes-Merton option pricing model. A discount for lack of marketability was applied to the per unit fair value to reflect increased risk arising from the inability to readily sell the Appreciation Rights. The estimated fair values for the years ended December 31, 2014, 2013 and 2012 included the following weighted average assumptions for both the time-based and performance-based Appreciation Rights (annualized percentages): | |||||||||||||||||||
Year ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Expected stock volatility | 39.00% | 43.00% | 56.00% | ||||||||||||||||
Expected dividend yield | — | — | — | ||||||||||||||||
Risk-free interest rate | 0.50% | 0.60% | 0.90% | ||||||||||||||||
Expected life (years) | 2 | 3 | 4 | ||||||||||||||||
Post-Merger assumptions were determined as follows. The expected stock volatility is based on the Company’s historical volatility over the previous five year period, which is the expected holding period. This historical volatility was increased to incorporate the implied volatility associated with the Company’s increase in leverage from historical levels. The expected dividend yield is zero. The risk-free interest rate for the period was based on the U.S. Treasury yield curve in effect at the time of grant. The expected life is based on the estimated holding period until a major liquidity event. | |||||||||||||||||||
A summary of our Appreciation Rights activity, and related information, for the year ended December 31, 2014 is set forth in the table below (in thousands, except exercise price and contractual term): | |||||||||||||||||||
Time-based | Performance-based | Total | Weighted | Weighted | Aggregate | ||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||
Base | Remaining | Value | |||||||||||||||||
Price | Contractual | ||||||||||||||||||
Term | |||||||||||||||||||
(years) | |||||||||||||||||||
Appreciation Rights outstanding – December 31, 2013 | 787 | 787 | 1,574 | $ | 6.5 | 8.96 | |||||||||||||
Granted | 682 | 682 | 1,364 | $ | 7.95 | ||||||||||||||
Exercised | — | — | — | $ | — | ||||||||||||||
Forfeited/Expired | (345 | ) | (345 | ) | (690 | ) | $ | 6.69 | |||||||||||
Appreciation Rights outstanding – December 31, 2014 | 1,124 | 1,124 | 2,248 | $ | 7.32 | 8.56 | $ | — | |||||||||||
Appreciation rights exercisable - December 31, 2014 | — | — | — | $ | — | N/A | $ | — | |||||||||||
As of December 31, 2014, there was $1.4 million and $1.8 million of total unrecognized compensation costs, net of estimated forfeitures, related to each of the non-vested time-based and performance-based Appreciation Rights granted, respectively, under our plan subsequent to the Merger. The unrecognized compensation cost for the time-based awards is expected to be recognized over a weighted average period of 2.7 years. The unrecognized compensation cost of the performance-based awards is expected to be recognized as it becomes probable the market condition will be satisfied. |
Other_Comprehensive_Income_Los
Other Comprehensive Income (Loss) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (loss) | |||||||||||
The components of accumulated other comprehensive income are as follows (in thousands): | ||||||||||||
Accumulated | Unrealized Investment Gains (Losses) | Accumulated | ||||||||||
Foreign | Other | |||||||||||
Currency | Comprehensive | |||||||||||
Translation | Income (Loss) | |||||||||||
Adjustment | ||||||||||||
Balances at January 1, 2012 | $ | (5,841 | ) | $ | — | $ | (5,841 | ) | ||||
Foreign currency translation adjustment, net of tax expense of $369 | 5,324 | — | 5,324 | |||||||||
Balances at December 31, 2012 | (517 | ) | — | (517 | ) | |||||||
Foreign currency translation adjustment, net of tax benefit of $233 | (3,867 | ) | — | (3,867 | ) | |||||||
Unrealized investment gain, net of tax expense of $1,403 in 2013 | — | 2,241 | 2,241 | |||||||||
Balances at December 31, 2013 | (4,384 | ) | 2,241 | (2,143 | ) | |||||||
Foreign currency translation adjustment, net of tax expense of $753 | (5,690 | ) | — | (5,690 | ) | |||||||
Unrealized investment loss, net of tax benefit | — | — | — | |||||||||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | — | (2,241 | ) | (2,241 | ) | |||||||
Balances at December 31, 2014 | $ | (10,074 | ) | $ | — | $ | (10,074 | ) | ||||
During 2013 and 2012, there were no reclassification adjustments out of accumulated other comprehensive income (loss) to net earnings (loss). |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies |
Legal Proceedings | |
Intellectual Property Litigation | |
As the owner and exclusive licensee of patents, from time to time, we are a party to proceedings challenging these patents, including challenges in U.S. federal courts, foreign courts, foreign patent offices and the U.S. Patent and Trademark Office. Additionally, from time to time, we are a party to litigation we initiate against others we contend infringe these patents, which often results in counterclaims regarding the validity of such patents. At other times, we are party to litigation initiated by others who contend we infringe their patents. It is not possible to reliably predict the outcome of the proceedings described below. However, if we are unable to effectively enforce our intellectual property rights, third parties may become more aggressive in the marketing of competitive products around the world. | |
In August 2013, Vital Needs International, L.P. ("Vital Needs") filed a Demand for Arbitration with the American Arbitration Association seeking to recover in excess of $100 million in damages and legal fees against KCI entities based on a number of claims related to certain intellectual property rights sold by Vital Needs to KCI pursuant to a 2006 acquisition agreement. Vital Needs alleges, among other things, breach of the contract for failure to pay royalties on sales of KCI products. We do not believe any royalties are owed to Vital Needs for sales of KCI products, and we believe our defenses to Vital Needs’ claims are meritorious. The arbitration hearing took place in January 2015, and we are currently awaiting a decision from the panel, which is expected during the second quarter of 2015. It is not possible to predict the outcome of this arbitration, nor is it possible to estimate any damages that may be awarded if we are unsuccessful in the arbitration. | |
In September 2013, LifeNet Health (“LifeNet”) filed suit against LifeCell Corporation in the United States District Court for the Eastern District of Virginia, Norfolk Division. LifeNet alleges that two LifeCell products, Strattice and AlloDerm Ready to Use, infringe LifeNet’s U.S. Patent No. 6,569,200 (“the ‘200 Patent”). On November 18, 2014, a jury found that the ‘200 Patent was not invalid and was infringed and further awarded LifeNet a lump sum damages amount of $34.7 million As a result of this decision, we recorded a liability of $34.7 million in the fourth quarter of 2014. We disagree with the result at this stage in the litigation and believe that LifeCell’s defenses to the claims are meritorious. LifeCell will continue to vigorously assert its defenses during the post-trial and appeal stages of this litigation and intends to defend any further claims by LifeNet. If LifeCell’s post-verdict motions are denied, LifeCell plans to appeal to the U.S. Federal Circuit Court of Appeals in Washington D.C. on multiple grounds. | |
On June 30, 2014, KCI entered into a settlement agreement with Wake Forest University Health Sciences to fully and finally resolve the historical patent and royalty disputes between them relating to negative pressure wound therapy. As of December 31, 2014, the accompanying consolidated balance sheet included $82.7 million under the caption “accrued expenses and other” and $104.3 million under the caption “other non-current liabilities” representing the net present value of payments under the Settlement Agreement discounted using our incremental borrowing rate as the discount rate. As a result, we recorded patent settlement charges of $198.6 million in the second quarter of 2014 representing the net present value of payments under the Settlement Agreement, net of the $63.2 million previously existing accrual. | |
Products Liability Litigation | |
LifeCell Corporation is a defendant in approximately 335 lawsuits filed by individuals alleging personal injury and seeking monetary damages for failed hernia repair procedures using LifeCell’s AlloDerm products. These cases have been consolidated for case management purposes in Middlesex County, New Jersey. The trial court has issued a pre-trial order incorporating the bellwether practice of trying the claims of some plaintiffs to determine the likelihood of settlement or to avoid relitigating common issues in every case. Following limited discovery, the parties have each selected two bellwether cases from which one case to be tried will be selected. Further discovery is proceeding on each of the four bellwether cases. Trial of the first bellwether case is currently scheduled for January 2016. Although it is not possible to reliably predict the outcome of the litigation, we believe that our defenses to these claims are meritorious and we will defend against these suits vigorously. Based on our existing insurance coverage and our defenses to these cases, we do not expect them to have a material impact on our results of operations or our financial position. As further fact discovery is proceeding in these cases, the plaintiffs have yet to set forth their alleged damages. As such, it is impossible to predict or estimate potential losses if our defenses to these cases are unsuccessful. | |
LifeCell Corporation has been named as a defendant in approximately 180 lawsuits in state and federal courts alleging personal injury and seeking monetary damages for failed gynecological procedures using a human tissue product processed by LifeCell and sold by one of LifeCell’s distributors, Boston Scientific, under the name Repliform. There are approximately 175 LifeCell cases filed in a consolidated docket in Middlesex County, Massachusetts. The cases are in the initial phase and no discovery has occurred. Three cases are pending in a multi-district federal case in West Virginia that is proceeding very slowly. The remaining cases are in Massachusetts, Delaware, Minnesota, and New York. None of these cases are proceeding at this time. We intend to defend these suits vigorously, and do not expect them to have a material impact on our results of operations or our financial position. As these cases are in their early stages it is not possible to predict or estimate potential losses if our defenses to these cases are unsuccessful. | |
Other Litigation | |
In 2009, KCI received a subpoena from the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) seeking records regarding our billing practices under the local coverage policies of the four regional Durable Medical Equipment Medicare Administrative Contractors (“DME MACs”). KCI cooperated with the OIG’s inquiry and provided substantial documentation to the OIG and the U.S. Attorneys’ office in response to its request. The government’s inquiry stemmed from the filing under seal of two 2008 qui tam actions against KCI by two former employees in the U.S. District Court, Central District of California, Western Division. These cases are captioned United States of America, ex rel. Steven J. Hartpence v. Kinetic Concepts, Inc. et al, and United States of America, ex rel. Geraldine Godecke v. Kinetic Concepts, Inc., et al. The complaints contend that KCI violated the Federal False Claims Act by billing in a manner that was not consistent with the Local Coverage Determinations issued by the DME MACs and seek recovery of monetary damages. Following the completion of the government’s review and its decision declining to intervene in such suits, the live pleadings were ordered unsealed in 2011. After reviewing the allegations, KCI filed motions seeking the dismissal of the suits on multiple grounds. In 2012, the Court granted KCI’s motions dismissing all of the claims under the False Claims Act. The cases are on appeal in the U.S. Court of Appeals for the Ninth Circuit and oral argument was in July 2014 before a 3 member panel. On January 16, 2015, the Ninth Circuit entered an order scheduling oral argument en banc before the U.S. Court of Appeals for the Ninth Circuit which is currently scheduled for March 17, 2015. We believe that our defenses to the claims in the Hartpence and Goedecke cases are meritorious and that we have no liability under the False Claims Act for their allegations. However, it is not possible to predict the outcome of this litigation nor is it possible to estimate any damages that may be awarded if we are unsuccessful in the litigation. | |
We are a party to several additional lawsuits arising in the ordinary course of our business. Additionally, the manufacturing and marketing of medical products necessarily entails an inherent risk of product liability claims. We maintain multiple layers of product liability insurance coverage and we believe these policies and the amounts of coverage are appropriate and adequate. | |
Other Commitments and Contingencies | |
As a healthcare supplier, we are subject to extensive government regulation, including laws and regulations directed at ascertaining the appropriateness of reimbursement, preventing fraud and abuse and otherwise regulating reimbursement under various government programs. The marketing, billing, documenting and other practices are all subject to government oversight and review. To ensure compliance with Medicare and other regulations, regional carriers often conduct audits and request patient records and other documents to support claims submitted by us for payment of services rendered to customers. | |
We also are subject to routine pre-payment and post-payment audits of durable medical equipment (“DME”) claims submitted to Medicare Part B. These audits typically involve a complex medical review, by Medicare or its designated contractors and representatives, of documentation supporting the therapy provided by us. While Medicare requires us to obtain a comprehensive physician order prior to providing products and services, we are not required to obtain the written medical record in advance of therapy as long as the underlying medical records reported to us support the coverage criteria and medical necessity information included in such claim. Following a Medicare request for supporting documentation, we are obligated to procure and submit the underlying medical records retained by various clinical providers, medical facilities and prescribers. Obtaining these medical records in connection with a claims audit may be challenging and, in any event, all of these records are subject to further examination, interpretation and dispute by an auditing authority. Under standard Medicare procedures, we are entitled to demonstrate the sufficiency of documentation and the establishment of medical necessity, and we have the right to appeal any adverse determinations. If a determination is made that our records or the patients’ medical records are insufficient to meet medical necessity or Medicare reimbursement requirements for the claims, we could be subject to denial or overpayment demands for claims submitted for Medicare reimbursement. In the rare event that an audit results in major discrepancies of claims records which lacked proof of medical necessity, Medicare may be entitled to take additional corrective measures, including: extrapolation of the results of the audit across a wider population of claims, submitting recoupment demands for claims other than those examined in the audit, or placing the organization on a full prepayment review. These audits have increased over the last two years from being negligible to approximately 10% of our claims. While eventually receiving payment on a high percent of the claims subject to these audits, payment timeliness may range from a few months up to a year resulting in increasing Medicare accounts receivable balances. | |
As of December 31, 2014, our commitments for the purchase of new product inventory were $50.6 million. We expect the total inventory commitments at December 31, 2014 to occur in 2015. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions |
Services Agreements and Merger Related Fees | |
On November 4, 2011, in connection with the Merger, entities affiliated with the Sponsors (the “Managers”) entered into services agreements and material event services agreements with KCI and LifeCell or, in certain cases, their affiliates (the “Services Agreements”), pursuant to which the Managers will provide strategic and consulting services, including financing and strategic business planning and analysis services, to KCI, LifeCell and/or their subsidiaries, parent entities and controlled affiliates. Pursuant to the Services Agreements, the Managers are entitled to receive an annual consulting fee, as well as certain fees for specified material events, including sales of KCI or LifeCell and refinancings. The Managers will also receive reimbursement of reasonable out-of-pocket expenses incurred in connection with the provision of services pursuant to the Services Agreements. The Services Agreements will continue indefinitely unless terminated by the consent of all the parties thereto. However, the Services Agreements will terminate automatically upon an initial public offering of KCI, LifeCell or one of their subsidiaries, parent entities or controlled affiliates, unless KCI or LifeCell or, in certain cases, an affiliate of KCI or LifeCell, as applicable, elects by prior written notice to continue the Services Agreements. The Services Agreements may also terminate upon certain change of control events involving KCI or LifeCell. On November 4, 2011, the Managers also entered into an indemnification agreement with the Company and its parent entities (the “Indemnification Agreement”). The Indemnification Agreement contains customary exculpation and indemnification provisions in favor of the Managers and certain of their affiliates. During the years ended December 31, 2014, 2013 and 2012, we paid management fees of $5.1 million, $8.7 million and $5.1 million, respectively, to the Managers. We expect to pay approximately $5.1 million in management fees to the Managers during each of the years ended December 2015 through the term of the agreements. | |
Management Investment | |
Subsequent to the Merger, Messrs. Ball, Bibb, Busenlehner and Woody have each entered into subscription agreements with Guernsey Holdings and GP, pursuant to which each individual agreed to subscribe for and acquire from Guernsey Holdings Class A-2 Units of Guernsey Holdings (each, a “Subscription”). In connection with the Subscription, each individual became a party to the limited partnership agreement of Guernsey Holdings as a limited partner of Guernsey Holdings. | |
Indemnification Agreement | |
On November 4, 2011, the Managers also entered into an indemnification agreement with the Company and its parent entities (the “Indemnification Agreement”). The Indemnification Agreement contains customary exculpation and indemnification provisions in favor of the Managers and certain of their affiliates. |
Segment_and_Geographic_Informa
Segment and Geographic Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Segment and Geographic Information | Segment and Geographic Information | |||||||||||
The Company is engaged in the rental and sale of advanced wound therapeutics and regenerative medicine products in over 75 countries worldwide through direct sales and indirect operations. We have two reportable operating segments which correspond to our two businesses: Advanced Wound Therapeutics (“AWT”) and Regenerative Medicine. Our AWT business is conducted by KCI and its subsidiaries, including Systagenix, while our Regenerative Medicine business is conducted by LifeCell and its subsidiaries. In most countries where we operate, certain aspects of our two businesses are supported by the same administrative staff, systems and infrastructure and, as such, we have allocated these costs between the businesses based on allocation methods including headcount, revenue and other methods as deemed appropriate. We measure segment profit (loss) as operating earnings (loss), which is defined as income (loss) before interest and other income, interest expense, foreign currency gains and losses, derivative instruments gains and losses and income taxes. All intercompany transactions are eliminated in computing revenue and operating earnings (loss). | ||||||||||||
On November 8, 2012, Getinge purchased certain assets and assumed certain liabilities comprising KCI’s TSS business. The historical results of operations of the TSS business, excluding the allocation of general corporate overhead, are reported as discontinued operations in the consolidated statements of operations. Discontinued operations amounts related to TSS also exclude incremental expenses related to our transition services agreement with Getinge and the service fee payable by Getinge under the transition services agreement. | ||||||||||||
Information on segments and a reconciliation of consolidated totals are as follows (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
Advanced Wound Therapeutics | $ | 1,420,278 | $ | 1,287,387 | $ | 1,312,258 | ||||||
Regenerative Medicine | 428,089 | 442,174 | 417,245 | |||||||||
Other operations (1) | 17,972 | 3,340 | — | |||||||||
Total revenue | $ | 1,866,339 | $ | 1,732,901 | $ | 1,729,503 | ||||||
Operating earnings (loss): | ||||||||||||
Advanced Wound Therapeutics (2) | $ | 455,666 | $ | 443,850 | $ | 398,066 | ||||||
Regenerative Medicine | 132,904 | 125,112 | 109,931 | |||||||||
Other operations (1) | 2,443 | 637 | — | |||||||||
Non-allocated costs: | ||||||||||||
General headquarter expense (3) | (9,516 | ) | (55,044 | ) | (19,928 | ) | ||||||
Equity-based compensation | (4,033 | ) | (2,925 | ) | (2,069 | ) | ||||||
Business optimization and transaction-related expenses (4) | (150,125 | ) | (144,253 | ) | (101,191 | ) | ||||||
Acquired intangible asset amortization (5) | (194,433 | ) | (188,571 | ) | (220,984 | ) | ||||||
Wake Forest settlement | (198,578 | ) | — | — | ||||||||
Impairment of goodwill and intangible assets (6) | — | (443,400 | ) | — | ||||||||
Total non-allocated costs | (556,685 | ) | (834,193 | ) | (344,172 | ) | ||||||
Total operating earnings (loss) | $ | 34,328 | $ | (264,594 | ) | $ | 163,825 | |||||
-1 | Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England for the period subsequent to our acquisition of Systagenix as discussed in Note 2. | |||||||||||
-2 | 2013 includes write-offs of $16.7 million of other intangible assets due primarily to the discontinuation of certain AWT projects. 2012 includes $22.1 million of impairment charges associated with certain production equipment at our Athlone manufacturing plant and inventory associated with our V.A.C.Via product. | |||||||||||
-3 | 2013 includes a $30.6 million fixed asset impairment charge. | |||||||||||
-4 | Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities. | |||||||||||
-5 | Represents amortization of acquired intangible assets related to our Merger in November 2011 and our acquisition of Systagenix in October 2013. | |||||||||||
-6 | During 2013, we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. These amounts have been excluded from Regenerative Medicine operating earnings as management excludes these charges from operating earnings when making operating decisions about the business. | |||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation and other amortization: | ||||||||||||
Advanced Wound Therapeutics | $ | 231,296 | $ | 261,348 | $ | 324,945 | ||||||
Regenerative Medicine | 70,882 | 68,514 | 70,730 | |||||||||
Other | 1,727 | 6,097 | 40,695 | |||||||||
$ | 303,905 | $ | 335,959 | $ | 436,370 | |||||||
Significant non-cash expense other than depreciation and amortization expense includes the Merger and acquisition-related periodic recognition of cost of sales associated with the application of purchase accounting adjustments to step up the value of inventory. For the years ended December 31, 2014 and 2013, we recognized $6.7 million and $3.2 million, respectively, in related cost of sales for Advanced Wound Therapeutics related to our acquisition of Systagenix. For the year ended December 31, 2012, we recognized $5.7 million and $19.7 million, respectively, in Merger-related cost of sales for Advanced Wound Therapeutics and Regenerative Medicine. | ||||||||||||
Advanced Wound Therapeutics and Regenerative Medicine assets are primarily accounts receivable, inventories, goodwill, intangible assets and net property, plant and equipment generally identifiable by product. Other assets include assets related to our divestiture and assets not specifically identifiable to a product, such as cash, deferred income taxes, prepaid expenses, net debt issuance costs and other non-current assets. Information on segment assets are as follows (in thousands): | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Total assets: | ||||||||||||
Advanced Wound Therapeutics | $ | 5,070,845 | $ | 5,274,625 | $ | 4,966,687 | ||||||
Regenerative Medicine | 1,539,057 | 1,574,315 | 2,039,137 | |||||||||
Other | 390,811 | 423,705 | 568,940 | |||||||||
$ | 7,000,713 | $ | 7,272,645 | $ | 7,574,764 | |||||||
Advanced Wound Therapeutics and Regenerative Medicine gross capital expenditures primarily relate to manufactured rental assets, manufacturing equipment, and computer hardware and software identifiable by product. Other capital expenditures include those related to our TSS business which was sold in November 2012 and those not specifically identifiable to a product, such as the purchase of land and the construction of our global headquarters building, leasehold improvements, and computer hardware and software. The following table contains information on gross capital expenditures (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Gross capital expenditures: | ||||||||||||
Advanced Wound Therapeutics | $ | 21,517 | $ | 36,910 | $ | 15,731 | ||||||
Regenerative Medicine | 7,057 | 17,862 | 26,240 | |||||||||
Other | 38,010 | 26,139 | 49,596 | |||||||||
$ | 66,584 | $ | 80,911 | $ | 91,567 | |||||||
Revenues are attributed to countries based on the location of our entity providing the products or services. Information on the geographical location of select financial information is as follows (in thousands): | ||||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Geographic location of revenue: | ||||||||||||
Domestic | $ | — | $ | — | $ | — | ||||||
United States | 1,329,306 | 1,321,517 | 1,335,043 | |||||||||
Other foreign | 537,033 | 411,384 | 394,460 | |||||||||
Total revenue | $ | 1,866,339 | $ | 1,732,901 | $ | 1,729,503 | ||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Geographic location of long-lived assets (1): | ||||||||||||
Domestic | $ | — | $ | — | $ | — | ||||||
United States | 198,754 | 224,789 | 287,700 | |||||||||
Other foreign | 89,294 | 108,936 | 100,782 | |||||||||
Total long-lived assets | $ | 288,048 | $ | 333,725 | $ | 388,482 | ||||||
_____________________________ | ||||||||||||
(1)Long-lived assets exclude intangible assets. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||
Quarterly Financial Data (unaudited) | NOTE 15. Quarterly Financial Data (unaudited) | |||||||||||||||
The unaudited consolidated results of operations by quarter are summarized below (in thousands): | ||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenue | $ | 442,635 | $ | 459,178 | $ | 481,793 | $ | 482,733 | ||||||||
Gross profit | $ | 276,596 | $ | 293,207 | $ | 314,413 | $ | 325,998 | ||||||||
Operating earnings (loss) | $ | 32,805 | $ | (142,123 | ) | $ | 88,347 | $ | 55,299 | |||||||
Loss from continuing operations | $ | (47,060 | ) | $ | (153,823 | ) | $ | (3,235 | ) | $ | (30,928 | ) | ||||
Earnings from discontinued operations | $ | 677 | $ | 1,106 | $ | 1,398 | $ | 1,392 | ||||||||
Net loss | $ | (46,383 | ) | $ | (152,717 | ) | $ | (1,837 | ) | $ | (29,536 | ) | ||||
Year Ended December 31, 2013 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenue | $ | 411,366 | $ | 426,193 | $ | 432,960 | $ | 462,382 | ||||||||
Gross profit | $ | 260,540 | $ | 280,060 | $ | 285,082 | $ | 301,873 | ||||||||
Operating earnings (loss) | $ | 36,536 | $ | 11,456 | $ | (370,355 | ) | $ | 57,769 | |||||||
Loss from continuing operations | $ | (42,753 | ) | $ | (61,747 | ) | $ | (398,607 | ) | $ | (51,984 | ) | ||||
Earnings (loss) from discontinued operations | $ | (2,034 | ) | $ | (828 | ) | $ | 46 | $ | (751 | ) | |||||
Net loss | $ | (44,787 | ) | $ | (62,575 | ) | $ | (398,561 | ) | $ | (52,735 | ) |
Guarantor_Condensed_Consolidat
Guarantor Condensed Consolidating Financial Statements | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Guarantor Condensed Consolidating Financial Statements [Abstract] | ||||||||||||||||||||||||
Guarantor Condensed Consolidating Financial Statements | Guarantor Condensed Consolidating Financial Statements | |||||||||||||||||||||||
Our 10.5% Second Lien Notes and 12.5% Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, by us and each of our material 100% owned subsidiaries, other than the subsidiaries that are co-issuers of the notes, foreign subsidiaries and subsidiaries whose only assets are investments in foreign subsidiaries. The non-guarantor subsidiaries do not have any payment obligations under the 10.5% Second Lien Notes or 12.5% Unsecured Notes. Subject to the terms of the10.5% Second Lien Notes and 12.5% Unsecured Notes indentures, the guarantee of a subsidiary guarantor will terminate upon: | ||||||||||||||||||||||||
-1 | a sale or other disposition (including by way of consolidation or merger) of the capital stock of such guarantor or the sale or disposition of all or substantially all the assets of such subsidiary guarantor (other than to the Company or a restricted subsidiary) otherwise permitted by the 10.5% Second Lien Notes or 12.5% Unsecured Notes indentures, | |||||||||||||||||||||||
-2 | the designation in accordance with the10.5% Second Lien Notes or 12.5% Unsecured Notes indenture of the guarantor as an unrestricted subsidiary or the occurrence of any event after which the guarantor is no longer a restricted subsidiary, | |||||||||||||||||||||||
-3 | defeasance or discharge of the10.5% Second Lien Notes or 12.5% Unsecured Notes, or | |||||||||||||||||||||||
-4 | upon the achievement of investment grade status by the10.5% Second Lien Notes or 12.5% Unsecured Notes; provided that such guarantee shall be reinstated upon the reversion date. | |||||||||||||||||||||||
In the event of a bankruptcy, liquidation or reorganization of any non-guarantor subsidiary, such non-guarantor subsidiary will pay the holders of its debt and other liabilities, including its trade creditors, before it will be able to distribute any of its assets to us. In the future, any non-U.S. subsidiaries, immaterial subsidiaries and subsidiaries that we designate as unrestricted subsidiaries under the 10.5% Second Lien Notes and 12.5% Unsecured Notes indentures will not guarantee the 10.5% Second Lien Notes or 12.5% Unsecured Notes. As of December 31, 2014, there were no restrictions on the ability of subsidiary guarantors to transfer funds to the parent company. | ||||||||||||||||||||||||
As a result of the guarantee arrangements, we are presenting the following condensed consolidated balance sheets, statements of operations and comprehensive income (loss), and statements of cash flows of the issuer, the guarantor subsidiaries and the non-guarantor subsidiaries. | ||||||||||||||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 41,027 | $ | 1,499 | $ | 140,617 | $ | — | $ | 183,541 | ||||||||||||
Accounts receivable, net | — | 179,872 | 67,355 | 123,256 | — | 370,483 | ||||||||||||||||||
Inventories, net | — | 73,904 | 110,355 | 93,765 | (99,802 | ) | 178,222 | |||||||||||||||||
Deferred income taxes | — | 52,868 | 10,157 | — | — | 63,025 | ||||||||||||||||||
Prepaid expenses and other | — | 11,106 | 6,851 | 247,606 | (238,000 | ) | 27,563 | |||||||||||||||||
Intercompany receivables | 166 | 1,854,033 | 2,432,299 | 48,267 | (4,334,765 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,212,810 | 2,628,516 | 653,511 | (4,672,567 | ) | 822,834 | |||||||||||||||||
Net property, plant and equipment | — | 315,691 | 69,801 | 164,838 | (262,282 | ) | 288,048 | |||||||||||||||||
Debt issuance costs, net | — | 77,896 | — | — | — | 77,896 | ||||||||||||||||||
Deferred income taxes | — | — | — | 31,692 | — | 31,692 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,138 | 162,920 | — | 3,378,298 | ||||||||||||||||||
Identifiable intangible assets, net | — | 299,575 | 1,788,661 | 309,015 | — | 2,397,251 | ||||||||||||||||||
Other non-current assets | — | 1,161 | 186 | 94,247 | (90,900 | ) | 4,694 | |||||||||||||||||
Intercompany loan receivables | — | 760,000 | 429,856 | — | (1,189,856 | ) | — | |||||||||||||||||
Intercompany investments | 667,530 | 360,292 | 223,581 | — | (1,251,403 | ) | — | |||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 245 | $ | 16,298 | $ | 14,463 | $ | 20,821 | $ | — | $ | 51,827 | ||||||||||||
Accrued expenses and other | — | 218,793 | 244,829 | 74,380 | (194,518 | ) | 343,484 | |||||||||||||||||
Intercompany payables | 6,441 | 1,181,383 | 2,634,149 | 512,792 | (4,334,765 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 25,721 | — | — | — | 25,721 | ||||||||||||||||||
Income taxes payable | — | — | — | 1,305 | — | 1,305 | ||||||||||||||||||
Deferred income taxes | — | — | 113,658 | — | — | 113,658 | ||||||||||||||||||
Total current liabilities | 6,686 | 1,442,195 | 3,007,099 | 609,298 | (4,529,283 | ) | 535,995 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,815,290 | — | — | — | 4,815,290 | ||||||||||||||||||
Non-current tax liabilities | — | 9,404 | 6,203 | 17,693 | — | 33,300 | ||||||||||||||||||
Deferred income taxes | — | 106,440 | 637,777 | 47,940 | — | 792,157 | ||||||||||||||||||
Other non-current liabilities | 695 | 113,368 | 48,172 | 1,023 | — | 163,258 | ||||||||||||||||||
Intercompany loan payables | — | 420,294 | 760,000 | 9,562 | (1,189,856 | ) | — | |||||||||||||||||
Total liabilities | 7,381 | 6,906,991 | 4,459,251 | 685,516 | (5,719,139 | ) | 6,340,000 | |||||||||||||||||
Total equity | 660,713 | (396,326 | ) | 1,413,488 | 730,707 | (1,747,869 | ) | 660,713 | ||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 87,771 | $ | 118 | $ | 118,662 | $ | — | $ | 206,949 | ||||||||||||
Accounts receivable, net | — | 184,723 | 71,457 | 151,398 | — | 407,578 | ||||||||||||||||||
Inventories, net | — | 54,809 | 101,779 | 101,751 | (76,772 | ) | 181,567 | |||||||||||||||||
Deferred income taxes | — | 14,991 | 6,610 | 2,020 | — | 23,621 | ||||||||||||||||||
Prepaid expenses and other | — | 35,832 | 5,434 | 321,427 | (309,532 | ) | 53,161 | |||||||||||||||||
Intercompany receivables | 166 | 1,687,528 | 2,326,181 | 21,241 | (4,035,116 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,065,654 | 2,511,579 | 716,499 | (4,421,420 | ) | 872,876 | |||||||||||||||||
Net property, plant and equipment | — | 311,122 | 80,963 | 223,987 | (282,347 | ) | 333,725 | |||||||||||||||||
Debt issuance costs, net | — | 102,054 | — | — | — | 102,054 | ||||||||||||||||||
Deferred income taxes | — | — | — | 31,459 | — | 31,459 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,771 | 162,650 | — | 3,378,661 | ||||||||||||||||||
Identifiable intangible assets, net | — | 361,640 | 1,829,452 | 358,109 | — | 2,549,201 | ||||||||||||||||||
Other non-current assets | — | 715 | 192 | 94,662 | (90,900 | ) | 4,669 | |||||||||||||||||
Intercompany loan receivables | — | 990,972 | 404,688 | — | (1,395,660 | ) | — | |||||||||||||||||
Intercompany investments | 901,902 | 432,884 | 372,093 | — | (1,706,879 | ) | — | |||||||||||||||||
$ | 902,466 | $ | 6,748,281 | $ | 5,931,738 | $ | 1,587,366 | $ | (7,897,206 | ) | $ | 7,272,645 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | 15,266 | $ | 14,929 | $ | 20,121 | $ | — | $ | 50,316 | ||||||||||||
Accrued expenses and other | — | 185,790 | 246,977 | 77,843 | (181,635 | ) | 328,975 | |||||||||||||||||
Intercompany payables | 4,110 | 852,892 | 2,559,407 | 618,707 | (4,035,116 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 26,311 | — | — | — | 26,311 | ||||||||||||||||||
Income taxes payable | — | — | 3,368 | — | — | 3,368 | ||||||||||||||||||
Deferred income taxes | — | — | — | 2,199 | — | 2,199 | ||||||||||||||||||
Total current liabilities | 4,110 | 1,080,259 | 2,824,681 | 718,870 | (4,216,751 | ) | 411,169 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,865,503 | — | — | — | 4,865,503 | ||||||||||||||||||
Non-current tax liabilities | — | 28,850 | 4,284 | 20,548 | — | 53,682 | ||||||||||||||||||
Deferred income taxes | — | 231,713 | 718,930 | 53,141 | — | 1,003,784 | ||||||||||||||||||
Other non-current liabilities | 281 | 38,667 | 334 | 1,150 | — | 40,432 | ||||||||||||||||||
Intercompany loan payables | — | 399,690 | 780,000 | 215,970 | (1,395,660 | ) | — | |||||||||||||||||
Total liabilities | 4,391 | 6,644,682 | 4,328,229 | 1,009,679 | (5,612,411 | ) | 6,374,570 | |||||||||||||||||
Total equity | 898,075 | 103,599 | 1,603,509 | 577,687 | (2,284,795 | ) | 898,075 | |||||||||||||||||
$ | 902,466 | $ | 6,748,281 | $ | 5,931,738 | $ | 1,587,366 | $ | (7,897,206 | ) | $ | 7,272,645 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 606,031 | $ | — | $ | 113,833 | $ | — | $ | 719,864 | ||||||||||||
Sales | — | 292,573 | 919,988 | 862,689 | (928,775 | ) | 1,146,475 | |||||||||||||||||
Total revenue | — | 898,604 | 919,988 | 976,522 | (928,775 | ) | 1,866,339 | |||||||||||||||||
Rental expenses | 106 | 292,336 | 11,156 | 202,613 | (173,449 | ) | 332,762 | |||||||||||||||||
Cost of sales | 105 | 314,129 | 571,768 | 370,643 | (933,282 | ) | 323,363 | |||||||||||||||||
Gross profit (loss) | (211 | ) | 292,139 | 337,064 | 403,266 | 177,956 | 1,210,214 | |||||||||||||||||
Selling, general and administrative expenses | 3,822 | 295,324 | 211,865 | 203,110 | (567 | ) | 713,554 | |||||||||||||||||
Research and development expenses | — | 24,044 | 26,803 | 18,474 | — | 69,321 | ||||||||||||||||||
Acquired intangible asset amortization | — | 61,995 | 79,136 | 53,302 | — | 194,433 | ||||||||||||||||||
Wake Forest settlement | — | 198,578 | — | — | — | 198,578 | ||||||||||||||||||
Operating earnings (loss) | (4,033 | ) | (287,802 | ) | 19,260 | 128,380 | 178,523 | 34,328 | ||||||||||||||||
Non-operating intercompany transactions | — | 18,775 | 146,218 | (249,577 | ) | 84,584 | — | |||||||||||||||||
Interest income and other | — | 73,919 | 19,148 | 319 | (89,719 | ) | 3,667 | |||||||||||||||||
Interest expense | — | (431,670 | ) | (68,861 | ) | (1,921 | ) | 89,719 | (412,733 | ) | ||||||||||||||
Foreign currency gain (loss) | — | 44,515 | (924 | ) | (25,747 | ) | — | 17,844 | ||||||||||||||||
Derivative instruments loss | — | (5,183 | ) | — | — | — | (5,183 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (4,033 | ) | (587,446 | ) | 114,841 | (148,546 | ) | 263,107 | (362,077 | ) | ||||||||||||||
Income tax expense (benefit) | — | (165,662 | ) | 36,119 | 2,512 | — | (127,031 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (4,033 | ) | (421,784 | ) | 78,722 | (151,058 | ) | 263,107 | (235,046 | ) | ||||||||||||||
Equity in earnings (loss) of subsidiaries | (226,440 | ) | (72,592 | ) | (151,058 | ) | — | 450,090 | — | |||||||||||||||
Earnings (loss) from continuing operations | (230,473 | ) | (494,376 | ) | (72,336 | ) | (151,058 | ) | 713,197 | (235,046 | ) | |||||||||||||
Earnings (loss) from discontinued operations, net of tax | — | — | 4,573 | — | — | 4,573 | ||||||||||||||||||
Net earnings (loss) | $ | (230,473 | ) | $ | (494,376 | ) | $ | (67,763 | ) | $ | (151,058 | ) | $ | 713,197 | $ | (230,473 | ) | |||||||
Total comprehensive income (loss) | $ | (238,404 | ) | $ | (502,307 | ) | $ | (75,694 | ) | $ | (158,989 | ) | $ | 736,990 | $ | (238,404 | ) | |||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 608,256 | $ | — | $ | 135,562 | $ | — | $ | 743,818 | ||||||||||||
Sales | — | 295,530 | 855,607 | 679,340 | (841,394 | ) | 989,083 | |||||||||||||||||
Total revenue | — | 903,786 | 855,607 | 814,902 | (841,394 | ) | 1,732,901 | |||||||||||||||||
Rental expenses | 52 | 253,082 | 10,986 | 221,473 | (132,089 | ) | 353,504 | |||||||||||||||||
Cost of sales | 113 | 296,788 | 523,367 | 261,199 | (829,625 | ) | 251,842 | |||||||||||||||||
Gross profit (loss) | (165 | ) | 353,916 | 321,254 | 332,230 | 120,320 | 1,127,555 | |||||||||||||||||
Selling, general and administrative expenses | 2,759 | 346,731 | 173,772 | 161,678 | (339 | ) | 684,601 | |||||||||||||||||
Research and development expenses | — | 29,555 | 31,679 | 14,343 | — | 75,577 | ||||||||||||||||||
Acquired intangible asset amortization | — | 80,042 | 73,794 | 34,735 | — | 188,571 | ||||||||||||||||||
Impairment of goodwill and intangible assets | — | — | 443,400 | — | — | 443,400 | ||||||||||||||||||
Operating earnings (loss) | (2,924 | ) | (102,412 | ) | (401,391 | ) | 121,474 | 120,659 | (264,594 | ) | ||||||||||||||
Non-operating intercompany transactions | — | 58,867 | 123,951 | (153,998 | ) | (28,820 | ) | — | ||||||||||||||||
Interest income and other | — | 72,601 | 12,251 | 179 | (83,429 | ) | 1,602 | |||||||||||||||||
Interest expense | — | (431,882 | ) | (70,623 | ) | (801 | ) | 83,429 | (419,877 | ) | ||||||||||||||
Loss on extinguishment of debt | — | (2,364 | ) | — | — | — | (2,364 | ) | ||||||||||||||||
Foreign currency loss | — | (16,723 | ) | (179 | ) | (5,316 | ) | (8 | ) | (22,226 | ) | |||||||||||||
Derivative instruments gain | — | 1,576 | — | — | — | 1,576 | ||||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (2,924 | ) | (420,337 | ) | (335,991 | ) | (38,462 | ) | 91,831 | (705,883 | ) | |||||||||||||
Income tax expense (benefit) | — | (166,067 | ) | 8,120 | 7,155 | — | (150,792 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (2,924 | ) | (254,270 | ) | (344,111 | ) | (45,617 | ) | 91,831 | (555,091 | ) | |||||||||||||
Equity in earnings (loss) of subsidiaries | (555,734 | ) | 56,284 | (46,074 | ) | — | 545,524 | — | ||||||||||||||||
Earnings (loss) from continuing operations | (558,658 | ) | (197,986 | ) | (390,185 | ) | (45,617 | ) | 637,355 | (555,091 | ) | |||||||||||||
Earnings from discontinued operations, net of tax | — | (3,091 | ) | (309 | ) | (457 | ) | 290 | (3,567 | ) | ||||||||||||||
Net earnings (loss) | $ | (558,658 | ) | $ | (201,077 | ) | $ | (390,494 | ) | $ | (46,074 | ) | $ | 637,645 | $ | (558,658 | ) | |||||||
Total comprehensive income (loss) | $ | (560,284 | ) | $ | (202,703 | ) | $ | (392,120 | ) | $ | (47,700 | ) | $ | 642,523 | $ | (560,284 | ) | |||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 654,372 | $ | — | $ | 161,188 | $ | — | $ | 815,560 | ||||||||||||
Sales | — | 292,303 | 411,032 | 547,346 | (336,738 | ) | 913,943 | |||||||||||||||||
Total revenue | — | 946,675 | 411,032 | 708,534 | (336,738 | ) | 1,729,503 | |||||||||||||||||
Rental expenses | 2 | 288,143 | 1,195 | 259,308 | (109,896 | ) | 438,752 | |||||||||||||||||
Cost of sales | 88 | 240,146 | 136,556 | 236,766 | (369,184 | ) | 244,372 | |||||||||||||||||
Gross profit (loss) | (90 | ) | 418,386 | 273,281 | 212,460 | 142,342 | 1,046,379 | |||||||||||||||||
Selling, general and administrative expenses | 1,991 | 327,223 | 120,789 | 140,549 | (694 | ) | 589,858 | |||||||||||||||||
Research and development expenses | — | 26,310 | 36,213 | 9,189 | — | 71,712 | ||||||||||||||||||
Acquired intangible asset amortization | — | 102,954 | 77,752 | 40,278 | — | 220,984 | ||||||||||||||||||
Operating earnings (loss) | (2,081 | ) | (38,101 | ) | 38,527 | 22,444 | 143,036 | 163,825 | ||||||||||||||||
Non-operating intercompany transactions | — | 100,690 | 329,531 | (474,480 | ) | 44,259 | — | |||||||||||||||||
Interest income and other | — | 73,114 | 12,251 | 177 | (84,713 | ) | 829 | |||||||||||||||||
Interest expense | — | (478,756 | ) | (72,458 | ) | (121 | ) | 84,713 | (466,622 | ) | ||||||||||||||
Loss on debt extinguishment | — | (31,481 | ) | — | — | — | (31,481 | ) | ||||||||||||||||
Foreign currency gain (loss) | — | (7,822 | ) | 294 | (5,473 | ) | — | (13,001 | ) | |||||||||||||||
Derivative instruments loss | — | (31,433 | ) | — | — | — | (31,433 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (2,081 | ) | (413,789 | ) | 308,145 | (457,453 | ) | 187,295 | (377,883 | ) | ||||||||||||||
Income tax expense (benefit) | — | (140,681 | ) | 50,759 | (57,901 | ) | — | (147,823 | ) | |||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (2,081 | ) | (273,108 | ) | 257,386 | (399,552 | ) | 187,295 | (230,060 | ) | ||||||||||||||
Equity in earnings (loss) of subsidiaries | (139,336 | ) | (60,960 | ) | (375,553 | ) | — | 575,849 | — | |||||||||||||||
Earnings (loss) from continuing operations | (141,417 | ) | (334,068 | ) | (118,167 | ) | (399,552 | ) | 763,144 | (230,060 | ) | |||||||||||||
Earnings from discontinued operations, net of tax | — | 4,546 | 37,855 | 23,999 | 22,243 | 88,643 | ||||||||||||||||||
Net earnings (loss) | $ | (141,417 | ) | $ | (329,522 | ) | $ | (80,312 | ) | $ | (375,553 | ) | $ | 785,387 | $ | (141,417 | ) | |||||||
Total comprehensive income (loss) | $ | (136,093 | ) | $ | (324,198 | ) | $ | (74,988 | ) | $ | (370,229 | ) | $ | 769,415 | $ | (136,093 | ) | |||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (230,473 | ) | $ | (494,376 | ) | $ | (67,763 | ) | $ | (151,058 | ) | $ | 713,197 | $ | (230,473 | ) | |||||||
Adjustments to reconcile net earnings (loss) to net cash provided | 6,364 | 306,092 | 104,787 | 131,736 | (226,711 | ) | 322,268 | |||||||||||||||||
Net cash provided (used) by operating activities | (224,109 | ) | (188,284 | ) | 37,024 | (19,322 | ) | 486,486 | 91,795 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (156,810 | ) | (5,024 | ) | (49,922 | ) | 145,261 | (66,495 | ) | ||||||||||||||
Proceeds from disposition of assets held for sale | — | — | 5,212 | — | — | 5,212 | ||||||||||||||||||
Proceeds from sale of investment | — | 4,211 | — | — | — | 4,211 | ||||||||||||||||||
Business acquired in purchase transaction, net of cash acquired | — | — | (9,500 | ) | (113 | ) | — | (9,613 | ) | |||||||||||||||
Increase in identifiable intangible assets and other non-current assets | — | (376 | ) | (7,418 | ) | (3,793 | ) | — | (11,587 | ) | ||||||||||||||
Net cash provided (used) by investing activities | — | (152,975 | ) | (16,730 | ) | (53,828 | ) | 145,261 | (78,272 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Settlement of profits interest units | (2,332 | ) | — | — | — | — | (2,332 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (26,345 | ) | — | (58 | ) | — | (26,403 | ) | |||||||||||||||
Proceeds (payments) on intercompany loans | — | 251,576 | (45,168 | ) | (206,408 | ) | — | — | ||||||||||||||||
Proceeds (payments) on intercompany investments | 226,441 | 69,284 | 26,255 | 309,767 | (631,747 | ) | — | |||||||||||||||||
Net cash provided (used) by financing activities | 224,109 | 294,515 | (18,913 | ) | 103,301 | (631,747 | ) | (28,735 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (8,196 | ) | — | (8,196 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | (46,744 | ) | 1,381 | 21,955 | — | (23,408 | ) | ||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 87,771 | 118 | 118,662 | — | 206,949 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 41,027 | $ | 1,499 | $ | 140,617 | $ | — | $ | 183,541 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (558,658 | ) | $ | (201,077 | ) | $ | (390,494 | ) | $ | (46,074 | ) | $ | 637,645 | $ | (558,658 | ) | |||||||
Adjustments to reconcile net earnings (loss) to net cash provided | 4,673 | 244,257 | 263,245 | 292,384 | (109,122 | ) | 695,437 | |||||||||||||||||
Net cash provided (used) by operating activities | (553,985 | ) | 43,180 | (127,249 | ) | 246,310 | 528,523 | 136,779 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (196,988 | ) | (17,274 | ) | (111,118 | ) | 247,053 | (78,327 | ) | ||||||||||||||
Business acquired in purchase transaction, net of cash acquired | — | — | (64,938 | ) | (413,810 | ) | — | (478,748 | ) | |||||||||||||||
Increase in identifiable intangible assets and other non-current assets | — | (453 | ) | (6,419 | ) | 125 | — | (6,747 | ) | |||||||||||||||
Net cash provided (used) by investing activities | — | (197,441 | ) | (88,631 | ) | (524,803 | ) | 247,053 | (563,822 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Distribution to limited partners | (1,572 | ) | — | — | — | — | (1,572 | ) | ||||||||||||||||
Settlement of profits interest units | (176 | ) | — | — | — | — | (176 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (67,133 | ) | (2,257 | ) | (6 | ) | — | (69,396 | ) | ||||||||||||||
Debt issuance costs | — | (20,477 | ) | — | — | — | (20,477 | ) | ||||||||||||||||
Proceeds (payments) on intercompany loans | — | (157,416 | ) | (58,554 | ) | 215,970 | — | — | ||||||||||||||||
2013 acquisition financing | ||||||||||||||||||||||||
Proceeds from senior credit facility | — | 349,563 | — | — | — | 349,563 | ||||||||||||||||||
Payment of debt issuance costs | — | (7,340 | ) | — | — | — | (7,340 | ) | ||||||||||||||||
Proceeds (payments) on intercompany investments | 555,733 | (131,953 | ) | 276,809 | 74,987 | (775,576 | ) | — | ||||||||||||||||
Net cash provided (used) by financing activities | 553,985 | (34,756 | ) | 215,998 | 290,951 | (775,576 | ) | 250,602 | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 240 | — | 240 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | (189,017 | ) | 118 | 12,698 | — | (176,201 | ) | ||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 276,788 | — | 105,964 | — | 383,150 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 87,771 | $ | 118 | $ | 118,662 | $ | — | $ | 206,949 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (141,417 | ) | $ | (329,522 | ) | $ | (80,312 | ) | $ | (375,553 | ) | $ | 785,387 | $ | (141,417 | ) | |||||||
Adjustments to reconcile net earnings (loss) to net cash provided | 4,268 | 449,431 | (141,711 | ) | 141,795 | (149,673 | ) | 304,110 | ||||||||||||||||
Net cash provided (used) by operating activities | (137,149 | ) | 119,909 | (222,023 | ) | (233,758 | ) | 635,714 | 162,693 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (96,931 | ) | (25,244 | ) | (70,550 | ) | 109,057 | (83,668 | ) | ||||||||||||||
Proceeds from disposition of assets held for sale | — | 74,576 | 72,335 | 97,406 | — | 244,317 | ||||||||||||||||||
Business acquired in purchase transaction, net of cash acquired | — | (15,097 | ) | — | — | — | (15,097 | ) | ||||||||||||||||
Increase in identifiable intangible assets and other non-current assets | — | 5,881 | (7,795 | ) | 897 | — | (1,017 | ) | ||||||||||||||||
Net cash provided (used) by investing activities | — | (31,571 | ) | 39,296 | 27,753 | 109,057 | 144,535 | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Capital contributions from limited partners | 239 | — | — | — | — | 239 | ||||||||||||||||||
Distribution to limited partners | (2,199 | ) | — | — | — | — | (2,199 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (118,777 | ) | — | 10 | — | (118,767 | ) | ||||||||||||||||
Debt issuance costs | — | (18,410 | ) | — | — | — | (18,410 | ) | ||||||||||||||||
Proceeds (payments) on intercompany loans | — | 15,783 | (90,803 | ) | 75,020 | — | — | |||||||||||||||||
2012 refinancing of senior credit facility | ||||||||||||||||||||||||
Payment of debt issuance costs | — | (1,063 | ) | — | — | — | (1,063 | ) | ||||||||||||||||
Proceeds (payments) on intercompany investments | 139,096 | 168,265 | 273,530 | 163,880 | (744,771 | ) | — | |||||||||||||||||
Net cash provided (used) by financing activities | 137,136 | 45,798 | 182,727 | 238,910 | (744,771 | ) | (140,200 | ) | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 696 | — | 696 | ||||||||||||||||||
Net increase in cash and cash equivalents | (13 | ) | 134,136 | — | 33,601 | — | 167,724 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 411 | 142,652 | — | 72,363 | — | 215,426 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 276,788 | $ | — | $ | 105,964 | $ | — | $ | 383,150 | ||||||||||||
Schedule_II
Schedule II | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||
Schedule II: Valuation and Qualifying Accounts | |||||||||||||||||||||
ACELITY L.P. INC. AND SUBSIDIARIES | |||||||||||||||||||||
Valuation and Qualifying Accounts | |||||||||||||||||||||
Three Years ended December 31, 2014 | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Description | Balances at January 1, 2012 | Additions Charged to Costs and Expenses | Additions Charged to Other Accounts | Deductions | Balances at December 31, 2012 | ||||||||||||||||
Accounts receivable realization reserves | $ | 21,151 | $ | 5,318 | $ | 124,616 | (1) | $ | 74,547 | $ | 76,538 | ||||||||||
Inventory reserve | $ | 1,974 | $ | 22,287 | $ | — | $ | 14,361 | $ | 9,900 | |||||||||||
Deferred tax asset valuation allowance | $ | 18,247 | $ | 1,025 | $ | — | $ | — | $ | 19,272 | |||||||||||
Description | Balances at January 1, 2013 | Additions Charged to Costs and Expenses | Additions Charged to Other Accounts | Deductions | Balances at December 31, 2013 | ||||||||||||||||
Accounts receivable realization reserves | $ | 76,538 | $ | 3,968 | $ | 70,472 | (1) | $ | 74,864 | $ | 76,114 | ||||||||||
Inventory reserve | $ | 9,900 | $ | 11,662 | $ | — | $ | 11,274 | $ | 10,288 | |||||||||||
Deferred tax asset valuation allowance | $ | 19,272 | $ | 29,064 | $ | 7,608 | $ | — | $ | 55,944 | |||||||||||
Description | Balances at January 1, 2014 | Additions Charged to Costs and Expenses | Additions Charged to Other Accounts | Deductions | Balances at December 31, 2014 | ||||||||||||||||
Accounts receivable realization reserves | $ | 76,114 | $ | 10,801 | $ | 67,122 | (1) | $ | 79,490 | $ | 74,547 | ||||||||||
Inventory reserve | $ | 10,288 | $ | 25,484 | $ | — | $ | 19,802 | $ | 15,970 | |||||||||||
Deferred tax asset valuation allowance | $ | 55,944 | $ | 26,355 | $ | — | $ | — | $ | 82,299 | |||||||||||
(1) Additions to the accounts receivable realization reserves charged to other accounts reflect the net increase in revenue reserves to allow for expected credit memos, canceled transactions and uncollectible items where collectibility is not reasonably assured in accordance with the provisions of the “Revenue Recognition” Topic of the FASB Accounting Standards Codification. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Accounting Policies [Abstract] | ||||||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation | |||||
On November 4, 2011, Kinetic Concepts, Inc. (“KCI”) completed its merger (the “Merger”) with Chiron Merger Sub, Inc. (“Merger Sub”), a direct subsidiary of Chiron Holdings, Inc. (“Holdings”) and an indirect subsidiary of Acelity L.P. Inc. (“Acelity”), pursuant to the terms of the Agreement and Plan of Merger, dated as of July 12, 2011 (the “Merger Agreement”), by and among Holdings, Merger Sub and KCI. As a result of the Merger, KCI is a 100% owned subsidiary of Acelity. In connection with this transaction, LifeCell Corporation (“LifeCell”), formerly a 100% owned subsidiary of KCI, was promoted to be a sister corporation of KCI, such that each of KCI and LifeCell are now 100% owned subsidiaries of Acelity. Acelity is a non-operating holding company indirectly controlled by investment funds advised by Apax Partners (“Apax”) and controlled affiliates of Canada Pension Plan Investment Board (“CPPIB”) and the Public Sector Pension Investment Board (“PSP Investments” and with Apax and CPPIB, collectively, the “Sponsors”) and certain other co-investors. The consolidated financial statements presented herein include the accounts of Acelity L.P. Inc., together with its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Unless otherwise noted in this report, the terms “we,” “us,” “our,” or the “Company” refers to Acelity L.P. Inc. and subsidiaries. The accompanying audited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “the Codification”). Certain prior period amounts have been reclassified to conform to the 2014 presentation. | ||||||
Net earnings (loss) per share information is not presented as such information is not meaningful. Chiron Guernsey Holdings L.P. Inc. owns over 99% of the limited partnership interests of Acelity, while Acelity’s Managing Limited Partner owns less than 1% of the limited partnership interests. Chiron Guernsey GP Co. Limited owns all of the general partnership interests in Acelity and has no economic interest in Acelity. We do not have any publicly traded common stock or potential common stock. | ||||||
On November 8, 2012, KCI closed on the divestiture of its Therapeutic Support Systems (“TSS”) business to Getinge AB. Under the terms of the sale agreement, we agreed to provide transition services to Getinge AB after the close of the transaction. Additionally, the results of the operations subject to the agreement, excluding the allocation of general corporate overhead, are presented as discontinued operations in the consolidated statements of operations for all periods presented. Discontinued operations amounts related to TSS also exclude incremental expenses related to our transition services agreement with Getinge AB and the service fee payable by Getinge AB under the transition services agreement. | ||||||
On October 29, 2014, LifeCell entered into an agreement with Novadaq® Technologies Inc. (“Novadaq”) to transfer all marketing and distribution rights to the SPY® Elite System from LifeCell to Novadaq, effective November 30, 2014. In connection with the transfer, the parties agreed to terminate various distribution agreements entered into between 2010 and 2011. The results of the operations subject to the agreement, excluding the allocation of general corporate overhead, are presented as discontinued operations in the consolidated statements of operations for all periods presented. | ||||||
The Company has two reportable operating segments: Advanced Wound Therapeutics and Regenerative Medicine. We have two primary geographic regions: the Americas, which is comprised principally of the United States and includes Canada, Puerto Rico and Latin America; and EMEA/APAC, which is comprised of Europe, the Middle East, Africa and the Asia Pacific region. | ||||||
Use of Estimates | Use of Estimates | |||||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||||||
Revenue Recognition | Revenue Recognition | |||||
We recognize revenue in accordance with the “Revenue Recognition” Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification when each of the following four criteria are met: | ||||||
1) | a contract or sales arrangement exists; | |||||
2) | products have been shipped, title has transferred or services have been rendered; | |||||
3) | the price of the products or services is fixed or determinable; and | |||||
4) | collectibility is reasonably assured. | |||||
We recognize rental revenue based on the number of days a product is used by the patient/organization, (i) at the contracted rental rate for contracted customers and (ii) generally, retail price for non-contracted customers. Sales revenue is recognized when products are shipped and title has transferred. In addition, we establish realization reserves against revenue to provide for adjustments including capitation agreements, estimated credit memos, volume discounts, pricing adjustments, utilization adjustments, product returns, cancellations, estimated uncollectible amounts and payer adjustments based on historical experience. In addition, revenue is recognized net of administrative fees paid to GPOs and state sales tax paid on post-acute rentals and sales. | ||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||||
We consider all highly liquid investments with an original maturity of ninety days or less to be cash equivalents. We maintain cash and cash equivalents with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits bear minimal credit risk as they are maintained at financial institutions of reputable credit and generally may be redeemed upon demand. | ||||||
Accounts Receivable | Accounts Receivable | |||||
The Americas trade accounts receivable consist of amounts due directly from acute and extended care organizations, third-party payers (“TPP”), both governmental and non-governmental, third-party distributors and patient pay accounts. Included within the TPP accounts receivable balances are amounts that have been or will be billed to patients once the primary payer portion of the claim has been settled by the TPP. EMEA/APAC trade accounts receivable consist of amounts due primarily from acute care organizations and third-party distributors. | ||||||
Significant concentrations of accounts receivable include: | ||||||
2014 | 2013 | |||||
Acute and extended care organizations | 51 | % | 53 | % | ||
Managed care, insurance and other | 28 | % | 28 | % | ||
Medicare/Medicaid | 10 | % | 9 | % | ||
Other | 11 | % | 10 | % | ||
The TPP reimbursement process in the United States requires extensive documentation, which has had the effect of slowing both the billing and cash collection cycles relative to the rest of the business, and therefore, could increase total accounts receivable. Because of the extensive documentation required and the requirement to settle a claim with the primary payer prior to billing the secondary and/or patient portion of the claim, the collection period for a claim in our home care business may, in some cases, extend beyond one year prior to full settlement of the claim. | ||||||
We utilize a combination of factors in evaluating the collectibility of our accounts receivable. For unbilled receivables, we establish reserves to allow for expected denied or uncollectible items. In addition, items that remain unbilled for more than a specified period of time, or beyond an established billing window, are reserved against revenue. For billed receivables, we generally establish reserves using a combination of factors including historic adjustment rates for credit memos and canceled transactions, historical collection experience, and the length of time receivables have been outstanding. The reserve rates vary by payer group. In addition, we record specific reserves for bad debt when we become aware of a customer’s inability or refusal to satisfy its debt obligations, such as in the event of a bankruptcy filing. | ||||||
Inventories | Inventories | |||||
Advanced Wound Therapeutics inventories | ||||||
Prior to the completion of the Merger on November 4, 2011, inventories were stated at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. On November 4, 2011, inventories were recorded at fair value with the application of preliminary purchase accounting adjustments, with subsequent additions to inventory recorded at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. On October 28, 2013, inventories purchased as part of our acquisition of Systagenix were recorded at fair value with the application of purchase accounting adjustments, with subsequent additions to inventory recorded at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. Costs include material, labor and manufacturing overhead costs. Inventory expected to be converted into equipment for short-term rental is reclassified to property, plant and equipment. We review our inventory balances monthly for excess sale products or obsolete inventory levels. Inventory quantities of sale-only products in excess of anticipated demand are considered excess and are reserved at 100%. For rental products, we review both product usage and product life cycle to classify inventory as active, discontinued or obsolete. Obsolescence reserve balances are established on an increasing basis from 0% for active, high-demand products to 100% for obsolete products. The reserve is reviewed and, if necessary, adjustments are made on a monthly basis. We rely on historical information and production planning forecasts to support our reserve and utilize management’s business judgment for “high risk” items, such as products that have a fixed shelf life. Once the value of inventory is reduced, we do not adjust the reserve balance until the inventory is sold or otherwise disposed. | ||||||
Regenerative Medicine inventories | ||||||
Prior to the completion of the Merger on November 4, 2011, inventories were stated at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. On November 4, 2011, inventories were recorded at fair value with the application of preliminary purchase accounting adjustments, with subsequent additions to inventory recorded at the lower of cost or market (net realizable value), with cost being determined on a first-in, first-out basis. Inventories on hand include the cost of materials, freight, direct labor and manufacturing overhead. We record a provision for excess and obsolete inventory based primarily on inventory quantities on hand, the historical product sales and estimated forecast of future product demand and production requirements. In addition, we record a provision for tissue that will not meet tissue standards based on historic rejection rates. | ||||||
Vendor Rebates | Vendor Rebates | |||||
We may receive consideration from vendors in the normal course of business in the form of rebates of purchase price paid. Our policy for accounting for these funds is in accordance with the “Revenue Recognition” Topic of the FASB Accounting Standards Codification. Funds are recognized as a reduction of cost of sales and inventory if the funds are a reduction of the price for the vendor’s products. | ||||||
Long-Lived Assets | Long-Lived Assets | |||||
Prior to the completion of the Merger on November 4, 2011, property, plant and equipment was stated at cost. On November 4, 2011, property, plant and equipment was recorded at fair value with the application of preliminary purchase accounting adjustments, with subsequent additions to property, plant and equipment recorded at cost. On October 28, 2013, property, plant and equipment purchased as part of our acquisition of Systagenix was recorded at fair value with the application of purchase accounting adjustments, with subsequent additions to property, plant and equipment recorded at cost. Betterments, which extend the useful life of the equipment, are capitalized. Debt issuance costs, which represent fees and other direct costs incurred in connection with our borrowings are capitalized and amortized using the effective interest method over the contractual term of the borrowing. Other assets consisted principally of other investments at December 31, 2014 and 2013. | ||||||
When an event occurs that indicates the carrying value of long-lived assets might not be recoverable, we review property, plant and equipment for impairment using an undiscounted cash flow analysis. If an impairment occurs on an undiscounted basis, we compute the fair market value of the applicable assets on a discounted cash flow basis and adjust the carrying value accordingly. During 2013, we recorded a $30.6 million fixed asset impairment charge. There were no impairments of fixed assets in 2014. | ||||||
Depreciation on property, plant and equipment is calculated on the straight-line method over the estimated useful lives (20 to 30 years for buildings and between 3 and 7 years for most of our other property and equipment) of the assets. Amortization for leasehold improvements is taken over the shorter of the estimated useful life of the asset or over the remaining lease term. | ||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | |||||
Business combinations are accounted for under the acquisition method. The total cost of an acquisition is allocated to the underlying identifiable net assets, based on their respective estimated fair values as of the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, discount rates, asset lives and market multiples, among other items. The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. | ||||||
Goodwill is tested for impairment by reporting unit annually as of October 31, or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition. | ||||||
Impairment of goodwill is tested by comparing the carrying value of the reporting unit to the reporting unit’s fair value. The carrying value of each reporting unit is determined by taking the reported net assets of the consolidated entity, identifying reporting unit specific assets (including goodwill) and liabilities and allocating shared operational and administrative assets and liabilities to the appropriate reporting unit. The fair value of each reporting unit is determined using current industry multiples as well as discounted cash flow models using certain performance assumptions and appropriate discount rates determined by our management. To ensure the reasonableness of the estimated fair value of our reporting units, we perform a reconciliation of the estimated fair value of our consolidated entity to the total estimated fair value of all our reporting units. When it is determined that the carrying value of goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, the measurement of any impairment is determined and the carrying value is reduced as appropriate. | ||||||
Identifiable intangible assets include developed technology, in-process research and development, customer relationships, tradenames and patents. For intangible assets that are subject to amortization, we amortize the assets over the estimated economic or contractual life of the individual asset. When an event occurs that indicates the carrying value of definite-lived intangible assets might not be recoverable, we review the assets for impairment using an undiscounted cash flow analysis. If an impairment occurs on an undiscounted basis, we compute the fair market value of the applicable assets on a discounted cash flow basis and adjust the carrying value accordingly. Indefinite-lived intangibles are tested for impairment annually as of October 31, or more frequently when events or changes in circumstances indicate that the assets might be impaired. If the carrying amount of the indefinite-lived intangible assets exceeds their fair value, an impairment is recognized in an amount equal to that excess. | ||||||
The Company performed an interim impairment test on goodwill of its Regenerative Medicine reporting unit during the third quarter of 2013. In our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, we disclosed that in the event of an approximate 6% and 4% drop in the fair value of our Regenerative Medicine reporting unit and the fair value of our Regenerative Medicine indefinite-lived identifiable intangible assets, respectively, the fair value of the Regenerative Medicine reporting unit and indefinite-lived identifiable intangible assets would still exceed their book values as of October 31, 2012. The Company continued to monitor the close proximity of the reporting unit’s carrying value compared to its fair value and, in the third quarter, determined it was required to complete the interim impairment test, as defined under GAAP. The results of the third quarter 2013 interim impairment test indicated that the estimated fair value of the Regenerative Medicine reporting unit was less than its carrying value; consequently, during the third quarter of 2013 we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. There were no impairments of goodwill or identifiable intangible assets during 2014 or 2012. | ||||||
During 2013, write-offs of $16.9 million of other intangible assets were recorded due primarily to the discontinuation of certain projects. | ||||||
Our estimates of discounted cash flows may differ from actual cash flows due to, among other things, economic conditions, changes to our business model or changes in operating performance. Significant differences between these estimates and actual cash flows could materially affect our future financial results. These factors increase the risk of differences between projected and actual performance that could impact future estimates of fair value of all reporting units. In the event of an approximate 27% and 10% drop in the fair value of our KCI reporting unit and the fair value of our KCI indefinite-lived identifiable intangible assets, respectively, the fair value of the KCI reporting unit and indefinite-lived identifiable intangible assets would still exceed their book values as of October 31, 2014. In the event of an approximate 21% drop in the fair value of our Systagenix reporting unit, the fair value of the Systagenix reporting unit would still exceed its book value as of October 31, 2014. Additionally, in the event of an approximate 11% drop in the fair value of our Regenerative Medicine reporting unit, the fair value of the Regenerative Medicine reporting unit would still exceed its book value as of October 31, 2014. Certain Regenerative Medicine indefinite-lived identifiable intangible assets approximated their fair value as of October 31, 2014. | ||||||
Income Taxes | Income Taxes | |||||
Deferred income taxes are accounted for using the asset and liability method of accounting for income taxes, whereby deferred tax assets and liabilities are recognized based on the tax effects of temporary differences between the financial statements and the tax bases of assets and liabilities, as measured by current enacted tax rates. When appropriate, we evaluate the need for a valuation allowance to reduce our deferred tax assets. | ||||||
A liability is recorded for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | ||||||
We have established a valuation allowance to reduce deferred tax assets associated with foreign net operating losses, certain state net operating losses, and certain foreign deferred tax assets to an amount whose realization is more likely than not. We believe that the remaining deferred income tax assets will be realized based on reversals of existing taxable temporary differences and expected repatriation of foreign earnings. Accordingly, we believe that no additional valuation allowances are necessary. | ||||||
Royalties | Royalties | |||||
We pay royalties for the right to market certain of our medical devices. Royalties are generally based on applicable revenue or the number of units sold and are recognized in the period that the related revenue is earned. Royalties related to rental revenue are included in rental expense. Royalties on sales revenue are included in cost of sales. | ||||||
Self-Insurance | Self-Insurance | |||||
We self-insure certain employee benefit and casualty insurance risks. Our group medical plan for U.S. employees is a qualified self-insured plan subject to specific stop loss insurance coverage. Our short-term disability plan for U.S. based employees is self-insured. The Texas Employee Injury Benefit Plan is self-insured subject to a $750,000 per occurrence retention. Our casualty insurance program has a $750,000 deductible for workers’ compensation, auto liability, and general liability. Our products liability program has a $1,000,000 self-insured retention. Our group life and accidental death and dismemberment plan and our long-term disability plan are all fully insured. We fully accrue our retained loss liabilities, including claims incurred but not reported. Based on historical trends, we believe our accruals for retained losses are adequate to cover future losses. | ||||||
Derivative Financial Instruments and Fair Value Measurements | Derivative Financial Instruments and Fair Value Measurements | |||||
We use derivative financial instruments to manage the economic impact of fluctuations in interest rates. We do not use financial instruments for speculative or trading purposes. Periodically, we enter into interest rate protection agreements to modify the interest characteristics of our outstanding debt. Our interest rate derivatives have not been designated as hedging instruments, and as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. | ||||||
Periodically, we also use derivative financial instruments to manage the economic impact of fluctuations in currency exchange rates on our intercompany balances and corresponding cash flows and to manage our transactional currency exposures when our foreign subsidiaries enter into transactions denominated in currencies other than their local currency. We enter into foreign currency exchange contracts to manage these economic risks. These contracts are not designated as hedges; as such, we recognize the fair value of these instruments as an asset or liability with income or expense recognized in the current period. Although we use master netting agreements with our derivative counterparties, we do not offset derivative asset and liability positions in the consolidated balance sheet. | ||||||
All derivative instruments are recorded on the balance sheet at fair value. The fair values of our interest rate derivatives and foreign currency exchange contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets, which represent level 2 inputs as defined by the Codification. | ||||||
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses | |||||
The functional currency for the majority of our foreign operations is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using the exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. Gains and losses resulting from the foreign currency translations are included in accumulated other comprehensive income. Transaction gains and losses, such as those resulting from the settlement of nonfunctional currency receivables or payables, including intercompany balances, are included in foreign currency gain (loss) in our consolidated statements of operations. Additionally, payable and receivable balances and long-term debt denominated in nonfunctional currencies are marked-to-market at month-end, and the gain or loss is recognized in our consolidated statements of operations. | ||||||
Concentration of Credit Risk | Concentration of Credit Risk | |||||
We have a concentration of credit risk with financial institutions related to our derivative instruments. As of December 31, 2014, Morgan Stanley, UBS and HSBC were the counterparties on our interest rate protection agreements consisting of interest rate swap agreements in notional amounts totaling $487.7 million each. We use master netting agreements with our derivative counterparties to reduce our risk and use multiple counterparties to reduce our concentration of credit risk. | ||||||
We maintain cash and cash equivalents with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. These deposits bear minimal credit risk as they are maintained at financial institutions of reputable credit and generally may be redeemed upon demand. | ||||||
Equity-based Compensation | Equity-based Compensation | |||||
We account for equity-based payments to employees in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires that equity-based payments (to the extent they are compensatory) be recognized in our consolidated statements of operations based on their fair values. | ||||||
As required by ASC 718, we recognize equity-based compensation expense for equity-based payment awards that are expected to vest based on estimated fair values on the date of grant. For awards classified as liability awards, the fair value of these awards is reviewed on a regular basis and the expense associated with these awards is adjusted accordingly as the fair value changes. In determining whether an award is expected to vest, we use an estimated, forward-looking forfeiture rate based upon our historical forfeiture rates. To the extent our actual forfeitures are different than our estimates, we record a true-up for the differences in the period that the awards vest, and such true-ups could materially affect our operating results. We also consider whether there have been any significant changes in facts and circumstances that would affect our expected forfeiture rate. | ||||||
We are also required to determine the fair value of equity-based awards at the grant date. We estimate the fair values of employee incentive equity awards using a Black-Scholes-Merton valuation model. A discount for lack of marketability was applied to the per unit fair value to reflect increased risk arising from the inability to readily sell the Profits Interest Units and Appreciation Rights. These determinations require judgment, including estimating expected volatility. If actual results differ significantly from these estimates, equity-based compensation expense and our results of operations could be impacted. | ||||||
Research and Development | Research and Development | |||||
The focus of our research and development program has been to invest in clinical studies and the development of new advanced wound healing systems, products and dressings. This includes the development of new and synergistic technologies across the continuum of wound care including tissue regeneration, preservation and repair, new applications of negative pressure technology, and the leveraging of our core understanding of biological tissues in order to develop biosurgery products in our Regenerative Medicine business. The types of costs classified as research and development expense include salaries of technical staff, consultant costs, facilities and utilities costs related to offices occupied by technical staff, depreciation on equipment and facilities used by technical staff, supplies and materials for research and development and outside services such as prototype development and testing and third-party research and development costs. Expenditures for research and development, including expenses related to clinical studies, are expensed as incurred. | ||||||
Shipping and Handling | Shipping and Handling | |||||
We include shipping and handling costs in rental expense and cost of sales, as appropriate. | ||||||
Taxes Collected from Customers and Remitted to Governmental Units | Taxes Collected from Customers and Remitted to Governmental Units | |||||
Taxes assessed by a government authority that are directly imposed on a revenue producing transaction between us and our customers, including but not limited to sales taxes, use taxes and value added taxes, are accounted for on a net (excluded from revenues and costs) basis. | ||||||
Advertising Expenses | Advertising Expenses | |||||
Advertising costs are expensed as incurred. | ||||||
Legal Proceedings and Other Loss Contingencies | Legal Proceedings and Other Loss Contingencies | |||||
We are subject to various legal proceedings, many involving routine litigation incidental to our business. The outcome of any legal proceeding is not within our complete control, is often difficult to predict and is resolved over very long periods of time. Estimating probable losses associated with any legal proceedings or other loss contingencies is very complex and requires the analysis of many factors including assumptions about potential actions by third parties. Loss contingencies are disclosed when there is at least a reasonable possibility that a loss has been incurred and are recorded as liabilities in the consolidated financial statements when it is both (1) probable or known that a liability has been incurred and (2) the amount of the loss is reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. If a loss contingency is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. | ||||||
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards | |||||
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11 “Income Taxes – Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forwards Exists.” ASU 2013-11 clarifies guidance and eliminates diversity in practice on the presentation of unrecognized tax benefits when a net operating loss carry forward, similar tax loss, or a tax credit carry forward exists at the reporting date. This new guidance became effective for annual and interim period for fiscal years beginning on or after December 15, 2013. The Company has applied the requirements of ASU 2013-11 prospectively in preparing the December 31, 2014 consolidated balance sheet, which resulted in a decrease to non-current deferred tax assets of $14.9 million and a decrease to non-current reserves for uncertain tax positions of $14.9 million. Had the Company applied the requirements of ASU 2013-11 retrospectively to the December 31, 2013 consolidated balance sheet, there would not have been a material impact. | ||||||
Recently Issued Accounting Standards | Recently Issued Accounting Standards | |||||
In April 2014, the FASB issued ASU No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU No. 2014-08 changes the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations - that is, a major effect on the organization’s operations and financial results should be presented as discontinued operations. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. Additionally, the ASU requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. The Company is evaluating this update, however we do not anticipate that it will have a material effect on our results of operations, financial position or disclosures. | ||||||
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts”. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (e.g., assets within the scope of Topic 360, “Property, Plant, and Equipment”, and intangible assets within the scope of Topic 350, “Intangibles-Goodwill and Other”) are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this ASU. For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is evaluating this update to determine if it will have a material effect on our results of operations, financial position or disclosures. | ||||||
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements — Going Concern (Subtopic 205-40).” The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating this update, however we do not anticipate that the adoption of this guidance will have a material impact on our results of operations, financial position or disclosures. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Accounting Policies [Abstract] | ||||||
Schedule of Concentrations of Accounts Receivable | Significant concentrations of accounts receivable include: | |||||
2014 | 2013 | |||||
Acute and extended care organizations | 51 | % | 53 | % | ||
Managed care, insurance and other | 28 | % | 28 | % | ||
Medicare/Medicaid | 10 | % | 9 | % | ||
Other | 11 | % | 10 | % |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures Acquisitions and Divestitures (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Business Combinations [Abstract] | ||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table represents the allocation of the purchase price (in thousands): | |||||||||||
December 31, | Adjustment | December 31, | ||||||||||
2013 | 2014 | |||||||||||
Goodwill | $ | 171,086 | $ | 1,737 | $ | 172,823 | ||||||
Identifiable intangible assets: | ||||||||||||
Customer relationships | 103,301 | 103,301 | ||||||||||
Developed technology | 91,700 | 91,700 | ||||||||||
Tradenames | 56,800 | 56,800 | ||||||||||
In-process research and development | 1,766 | 1,766 | ||||||||||
Tangible assets acquired and liabilities assumed: | ||||||||||||
Accounts receivable | 50,807 | 50,807 | ||||||||||
Inventories | 27,450 | 27,450 | ||||||||||
Other current assets | 1,902 | 1,902 | ||||||||||
Property, plant and equipment | 44,016 | 44,016 | ||||||||||
Other non-current assets | 139 | 139 | ||||||||||
Current liabilities | (34,752 | ) | (1,737 | ) | (36,489 | ) | ||||||
Other non-current liabilities | (79 | ) | (79 | ) | ||||||||
Net deferred tax liability | (35,388 | ) | (35,388 | ) | ||||||||
Total purchase price | $ | 478,748 | $ | — | $ | 478,748 | ||||||
Business Acquisition, Pro Forma Information [Table Text Block] | The following table reflects the unaudited pro forma condensed consolidated results of operations, as though the acquisition had occurred as of the beginning of the period presented (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Pro forma revenue | $ | 1,931,683 | $ | 1,943,296 | ||||||||
Pro forma net loss | $ | (552,153 | ) | $ | (168,001 | ) | ||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||
Operating results of product portfolios included in discontinued operations - TSS | The operating results of the TSS product portfolio included in discontinued operations are as follows (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Revenue | $ | — | $ | 188,121 | ||||||||
Earnings (loss) before income taxes | $ | (5,371 | ) | $ | 149,916 | |||||||
Income tax expense (benefit) | $ | (2,068 | ) | $ | 57,718 | |||||||
Earnings (loss) from discontinued operations | $ | (3,303 | ) | $ | 92,198 | |||||||
Operating results of product portfolios included in discontinued operations - SPY | The operating results of the SPY® Elite System product portfolio included in discontinued operations are as follows (in thousands): | |||||||||||
Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue | $ | 22,204 | $ | 26,010 | $ | 16,950 | ||||||
Earnings (loss) before income taxes | $ | 7,436 | $ | (429 | ) | $ | (5,780 | ) | ||||
Income tax expense (benefit) | $ | 2,863 | $ | (165 | ) | $ | (2,225 | ) | ||||
Earnings (loss) from discontinued operations | $ | 4,573 | $ | (264 | ) | $ | (3,555 | ) | ||||
Supplemental_Balance_Sheet_Dat1
Supplemental Balance Sheet Data (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Related Disclosures [Abstract] | ||||||||
Schedule of Accounts Receivable, Net | Accounts receivable consist of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Gross trade accounts receivable: | ||||||||
Billed trade accounts receivable | $ | 396,329 | $ | 418,804 | ||||
Unbilled receivables | 39,293 | 50,841 | ||||||
Less: Allowance for revenue adjustments | (61,460 | ) | (67,631 | ) | ||||
Gross trade accounts receivable | 374,162 | 402,014 | ||||||
Less: Allowance for bad debt | (13,087 | ) | (8,483 | ) | ||||
Net trade accounts receivable | 361,075 | 393,531 | ||||||
Other receivables | 9,408 | 14,047 | ||||||
$ | 370,483 | $ | 407,578 | |||||
Schedule of Inventories, Net | Inventories consist of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods and tissue available for distribution | $ | 127,253 | $ | 110,937 | ||||
Goods and tissue in-process | 6,887 | 12,994 | ||||||
Raw materials, supplies, parts and unprocessed tissue | 67,567 | 71,876 | ||||||
201,707 | 195,807 | |||||||
Less: Amounts expected to be converted into equipment for short-term rental | (7,515 | ) | (3,952 | ) | ||||
Reserve for excess and obsolete inventory | (15,970 | ) | (10,288 | ) | ||||
$ | 178,222 | $ | 181,567 | |||||
Schedule of Net Property, Plant and Equipment | Net property, plant and equipment consists of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Land | $ | 13,121 | $ | 13,438 | ||||
Buildings | 46,561 | 46,092 | ||||||
Equipment for short-term rental | 313,025 | 297,896 | ||||||
Machinery, equipment and furniture | 320,498 | 294,916 | ||||||
Leasehold improvements | 77,810 | 76,224 | ||||||
Inventory to be converted to equipment | 7,515 | 3,952 | ||||||
778,530 | 732,518 | |||||||
Less: accumulated depreciation | (490,482 | ) | (398,793 | ) | ||||
$ | 288,048 | $ | 333,725 | |||||
Schedule of Accrued Expenses and Other | Accrued expenses and other consist of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Payroll, benefits, commissions, bonuses and related taxes | $ | 65,740 | $ | 89,190 | ||||
Wake Forest royalty settlement and other royalties | 85,275 | 66,446 | ||||||
Interest | 43,607 | 43,253 | ||||||
Sales and other taxes | 24,469 | 21,827 | ||||||
Insurance | 8,729 | 9,425 | ||||||
Derivative liability | 13,936 | 914 | ||||||
Other accrued expenses | 101,728 | 97,920 | ||||||
$ | 343,484 | $ | 328,975 | |||||
Accounting_for_Goodwill_and_Ot1
Accounting for Goodwill and Other Non-current Assets (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accounting for Goodwill and Other Non-current Assets [Abstract] | ||||||||||||||||
Schedule of Goodwill | Based on the purchase price allocation, the components of goodwill by reporting unit are listed below (in thousands): | |||||||||||||||
KCI | Regenerative Medicine | Systagenix | Total | |||||||||||||
Balance at December 31, 2012 | $ | 2,483,240 | $ | 996,535 | $ | — | $ | 3,479,775 | ||||||||
Goodwill acquired, net of purchase price adjustments | — | — | 171,086 | 171,086 | ||||||||||||
Impairment of goodwill | — | (272,200 | ) | — | (272,200 | ) | ||||||||||
Balance at December 31, 2013 | 2,483,240 | 724,335 | 171,086 | 3,378,661 | ||||||||||||
Adjustment to prior year acquisition | — | — | 1,737 | 1,737 | ||||||||||||
Reduction for sale of business | — | (2,100 | ) | — | (2,100 | ) | ||||||||||
Balance at December 31, 2014 | $ | 2,483,240 | $ | 722,235 | $ | 172,823 | $ | 3,378,298 | ||||||||
Schedule of Definite-lived and Indefinite-lived Intangible Assets | Identifiable intangible assets include the following (in thousands): | |||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||||
Definite-lived intangible assets: | ||||||||||||||||
Customer relationships and non-compete agreements | $ | 947,638 | $ | (400,806 | ) | $ | 947,706 | $ | (291,812 | ) | ||||||
Developed technology | 761,464 | (206,355 | ) | 759,898 | (128,728 | ) | ||||||||||
Tradenames and patents | 129,726 | (16,582 | ) | 85,693 | (7,322 | ) | ||||||||||
Total definite-lived intangible assets | 1,838,828 | (623,743 | ) | 1,793,297 | (427,862 | ) | ||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||
Tradenames | 1,178,800 | — | 1,178,800 | — | ||||||||||||
In-process research and development | 3,366 | — | 4,966 | — | ||||||||||||
Total indefinite-lived intangible assets | 1,182,166 | — | 1,183,766 | — | ||||||||||||
$ | 3,020,994 | $ | (623,743 | ) | $ | 2,977,063 | $ | (427,862 | ) | |||||||
Schedule of Estimated Amortization Expense | The following table presents the estimated amortization expense, in total, to be incurred over the next five years for all definite-lived intangible assets as of December 31, 2014 (in thousands): | |||||||||||||||
Year ending December 31, | Estimated Amortization Expense | |||||||||||||||
2015 | $178,498 | |||||||||||||||
2016 | $162,717 | |||||||||||||||
2017 | $149,423 | |||||||||||||||
2018 | $136,083 | |||||||||||||||
2019 | $125,348 |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Disclosure [Abstract] | ||||||||
Schedule of Long-term Debt Instruments | Long-term debt consists of the following (in thousands): | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Senior Dollar Term E-1 Credit Facility(1) – due 2018 | $ | 1,927,241 | $ | 1,946,708 | ||||
Senior Euro Term E-1 Credit Facility(1) – due 2018 | 293,746 | 337,820 | ||||||
Senior Term E-2 Credit Facility(1) – due 2016 | 315,351 | 318,537 | ||||||
10.5% Second Lien Senior Secured Notes due 2018 | 1,750,000 | 1,750,000 | ||||||
12.5% Senior Unsecured Notes due 2019 | 612,000 | 612,000 | ||||||
3.25% Convertible Senior Notes due 2015 | 101 | 101 | ||||||
Notional amount of debt | 4,898,439 | 4,965,166 | ||||||
Senior Dollar Term E-1 Credit Facility Discount, net of accretion | (24,241 | ) | (30,926 | ) | ||||
Senior Euro Term E-1 Credit Facility Discount, net of accretion | (7,376 | ) | (10,693 | ) | ||||
Senior Term E-2 Credit Facility Discount, net of accretion | (2,955 | ) | (4,486 | ) | ||||
Second Lien Senior Secured Notes Discount, net of accretion | (20,205 | ) | (24,222 | ) | ||||
Senior Unsecured Notes Discount, net of accretion | (2,651 | ) | (3,025 | ) | ||||
Net discount on debt | (57,428 | ) | (73,352 | ) | ||||
Total debt, net of discount | 4,841,011 | 4,891,814 | ||||||
Less: Current installments | (25,721 | ) | (26,311 | ) | ||||
$ | 4,815,290 | $ | 4,865,503 | |||||
(1) On January 22, 2014, we entered into Amendment No. 5 to our senior secured credit facility. As a result of the amendment we created new classes of Dollar Term E-1 Loans, Euro Term E-1 Loans and Term E-2 Loans, having the same rights and obligations as the Dollar Term D-1 Loans, Euro Term D-1 Loans and Term D-2 Loans as set forth in the credit agreement and loan documents, except as revised by the amendment. | ||||||||
Schedule of Redemption Prices for Second Lien Notes | At any time on or after November 1, 2015, we may redeem the second lien senior secured notes, in whole or in part, at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the twelve‑month period commencing on November 1 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption: | |||||||
Year | Price | |||||||
2015 | 105.25% | |||||||
2016 | 102.63% | |||||||
2017 and thereafter | 100.00% | |||||||
Schedule of Redemption Prices for Senior Unsecured Notes | At any time on or after November 1, 2015, we may redeem the senior unsecured notes, in whole or in part, at the following redemption prices (expressed as percentages of the principal amount) if redeemed during the twelve‑month period commencing on November 1 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption: | |||||||
Year | Price | |||||||
2015 | 106.25% | |||||||
2016 | 103.13% | |||||||
2017 and thereafter | 100.00% | |||||||
Schedule of Maturities of Long-term Debt | Future maturities of long-term debt at December 31, 2014 were (in thousands): | |||||||
Year | Amount | |||||||
2015 | $ | 25,721 | ||||||
2016 | $ | 334,584 | ||||||
2017 | $ | 22,434 | ||||||
2018 | $ | 3,903,700 | ||||||
2019 | $ | 612,000 | ||||||
Thereafter | $ | — | ||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments and Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table sets forth the location and aggregate fair value amounts of all derivative instruments with credit-related contingent features (in thousands): | |||||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||||||
Balance | Fair Value | Balance | Fair Value | |||||||||||||||||
Sheet | Sheet | |||||||||||||||||||
Location | December 31, | December 31, | Location | December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Derivatives not designated as hedging instruments | ||||||||||||||||||||
Interest rate swap agreements | Prepaid expenses and other | $ | — | $ | — | Accrued expenses and other | $ | 13,936 | $ | 345 | ||||||||||
Interest rate swap agreements | Other non-current assets | — | — | Other non-current liabilities | 8,067 | 31,906 | ||||||||||||||
Foreign currency exchange contracts | Prepaid expenses and other | — | 146 | Accrued expenses and other | — | 569 | ||||||||||||||
Total derivatives | $ | — | $ | 146 | $ | 22,003 | $ | 32,820 | ||||||||||||
Not Designated as Hedging Instrument [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table summarizes the amount of gain (loss) on derivative not designated as hedging instruments (in thousands): | |||||||||||||||||||
Year ended December 31, | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
Interest rate swap agreements | $ | (5,245 | ) | $ | 2,618 | $ | (25,486 | ) | ||||||||||||
Interest rate cap agreements | — | (9 | ) | (1,583 | ) | |||||||||||||||
Foreign currency exchange contracts | 62 | (1,033 | ) | (4,364 | ) | |||||||||||||||
$ | (5,183 | ) | $ | 1,576 | $ | (31,433 | ) | |||||||||||||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | ||||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The following chart summarizes these agreements (dollars in thousands): | |||||||||||||||||||
Effective Dates | Outstanding Notional Amount | Fixed Interest Rate | ||||||||||||||||||
12/31/13-12/31/16 | $487,667 | 2.26% | ||||||||||||||||||
12/31/13-12/31/16 | $487,667 | 2.25% | ||||||||||||||||||
12/31/13-12/31/16 | $487,667 | 2.25% |
Leasing_Obligations_Tables
Leasing Obligations (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Leases [Abstract] | ||||||||
Future Minimum Lease Payments Under Capital and Operating Leases | Future minimum lease payments under capital and non-cancelable operating leases (with initial or remaining lease terms in excess of one year) as of December 31, 2014 are as follows (in thousands): | |||||||
Capital | Operating | |||||||
Leases | Leases | |||||||
2015 | $ | 526 | $ | 22,387 | ||||
2016 | 394 | 14,947 | ||||||
2017 | — | 11,745 | ||||||
2018 | — | 8,918 | ||||||
2019 | — | 6,727 | ||||||
Thereafter | — | 28,587 | ||||||
Total minimum lease payments | $ | 920 | $ | 93,311 | ||||
Less amount representing interest | (66 | ) | ||||||
Present value of net minimum capital lease payments | 854 | |||||||
Less current portion | (488 | ) | ||||||
Obligations under capital leases, excluding current installments | $ | 366 | ||||||
Income_Taxes_Benefit_Tables
Income Taxes (Benefit) (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | The following table summarizes earnings (loss) before income taxes (benefit) of U.S. and non-U.S. operations (in thousands): | |||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
U.S. | $ | (515,976 | ) | $ | (845,261 | ) | $ | (492,869 | ) | |||
Non-U.S. | 161,335 | 133,578 | 259,122 | |||||||||
(354,641 | ) | (711,683 | ) | (233,747 | ) | |||||||
Earnings (loss) from discontinued operations before income taxes | 7,436 | (5,800 | ) | 144,136 | ||||||||
Earnings (loss) from continuing operations before income taxes | $ | (362,077 | ) | $ | (705,883 | ) | $ | (377,883 | ) | |||
Schedule of Components of Income Tax Expense (Benefit) | The following table summarizes the composition of income tax expense (benefit) (in thousands): | |||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
U.S. Federal | $ | 18,149 | $ | 16,777 | $ | 17,693 | ||||||
U.S. State | 2,220 | 8,162 | 3,148 | |||||||||
Non-U.S. | 14,633 | 9,125 | 13,218 | |||||||||
Total current expense | 35,002 | 34,064 | 34,059 | |||||||||
Deferred: | ||||||||||||
U.S. Federal | (138,046 | ) | (158,735 | ) | (104,476 | ) | ||||||
U.S. State | (19,998 | ) | (26,383 | ) | (19,900 | ) | ||||||
Non-U.S. | (1,126 | ) | (1,971 | ) | (2,013 | ) | ||||||
Total deferred tax expense (benefit) | (159,170 | ) | (187,089 | ) | (126,389 | ) | ||||||
(124,168 | ) | (153,025 | ) | (92,330 | ) | |||||||
Income tax expense (benefit) related to discontinued operations | 2,863 | (2,233 | ) | 55,493 | ||||||||
Income tax expense (benefit) related to continuing operations | $ | (127,031 | ) | $ | (150,792 | ) | $ | (147,823 | ) | |||
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the U.S. federal statutory rate to the consolidated effective tax rate is as follows: | |||||||||||
Year ended December 31, | ||||||||||||
2014(1) | 2013(1) | 2012(1) | ||||||||||
Computed “expected” tax rate | 35 | % | 35 | % | 35 | % | ||||||
State income taxes, net of federal benefit | 3.4 | 1.7 | 3.8 | |||||||||
Non-deductible items | (0.1 | ) | (0.9 | ) | (0.5 | ) | ||||||
Effect of international operations | (4.4 | ) | (1.5 | ) | 0.1 | |||||||
Section 199 production deduction | 0.8 | 0.2 | 0.5 | |||||||||
Research and development credit | 0.1 | 0.3 | — | |||||||||
Goodwill impairment | — | (13.4 | ) | — | ||||||||
Other, net | 0.2 | 0.1 | 0.6 | |||||||||
35 | 21.5 | 39.5 | ||||||||||
Change in rate related to discontinued operations | 0.1 | (0.1 | ) | (0.4 | ) | |||||||
Effective tax rate related to continuing operations | 35.1 | % | 21.4 | % | 39.1 | % | ||||||
(1) | The years ended December 31, 2014, 2013 and 2012 include a loss before income tax benefit. The consolidated effective income tax rates represent adjustments to the computed “expected” income tax benefit rate for the period. Therefore, negative percentages represent reductions to the income tax benefit rate. | |||||||||||
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences which give rise to significant portions of the deferred tax assets and liabilities consist of the following (in thousands): | |||||||||||
December 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Deferred Tax Assets: | ||||||||||||
Non-U.S. tax credit | $ | 76,320 | $ | 67,765 | ||||||||
U.S. research and development tax credit | 978 | — | ||||||||||
Net operating loss | 100,772 | 67,229 | ||||||||||
Accounts receivable | (1,468 | ) | 9,377 | |||||||||
Non-U.S. net operating loss carry forwards | 36,904 | 23,259 | ||||||||||
Accrued liabilities | 87,412 | 12,156 | ||||||||||
Deferred non-U.S. tax asset | 43,864 | 48,223 | ||||||||||
Accrued interest | 14,686 | 20,296 | ||||||||||
Disallowed interest carry forward | 106,860 | 52,407 | ||||||||||
Unrealized foreign exchange currency loss, net | — | 371 | ||||||||||
Inventory | 9,717 | 2,124 | ||||||||||
Other | 891 | 618 | ||||||||||
Total gross deferred tax assets | 476,936 | 303,825 | ||||||||||
Less: valuation allowances | (82,299 | ) | (55,944 | ) | ||||||||
Net deferred tax assets | 394,637 | 247,881 | ||||||||||
Deferred Tax Liabilities: | ||||||||||||
Intangible assets, amortizable | (384,485 | ) | (447,286 | ) | ||||||||
Intangible assets, indefinite-lived | (454,779 | ) | (455,417 | ) | ||||||||
Loan fees | (30,751 | ) | (31,343 | ) | ||||||||
U.S. tax on non-U.S. earnings | (256,039 | ) | (190,665 | ) | ||||||||
Deferred U.S. state tax liability | 3,556 | (831 | ) | |||||||||
Unrealized foreign exchange currency gain, net | (19,883 | ) | — | |||||||||
Depreciation | (56,865 | ) | (70,870 | ) | ||||||||
Other | (6,489 | ) | (2,372 | ) | ||||||||
Total gross deferred tax liabilities | (1,205,735 | ) | (1,198,784 | ) | ||||||||
Net deferred tax liability | (811,098 | ) | (950,903 | ) | ||||||||
Less: current deferred tax asset | (63,025 | ) | (23,621 | ) | ||||||||
Less: non-current deferred tax asset | (31,692 | ) | (31,459 | ) | ||||||||
Less: current deferred tax liability | 113,658 | 2,199 | ||||||||||
Non-current deferred tax liability | $ | (792,157 | ) | $ | (1,003,784 | ) | ||||||
Reconciliation of the Allowance for Uncertain Tax Positions | The reconciliation of the allowance for uncertain tax positions is as follows (in thousands): | |||||||||||
December 31, | December 31, | |||||||||||
2014 | 2013 | |||||||||||
Balance at beginning of year | $ | 41,694 | $ | 33,634 | ||||||||
Gross additions for tax positions of prior years | 10,683 | 6,644 | ||||||||||
Gross reductions for tax positions of prior years | (18,331 | ) | (1,488 | ) | ||||||||
Gross additions on positions related to the current year | 6,494 | 5,056 | ||||||||||
Reductions resulting from a lapse of the applicable statute of limitation | (724 | ) | (2,152 | ) | ||||||||
Balance at end of year | 39,816 | 41,694 | ||||||||||
Accrued interest and penalties | 8,341 | 11,988 | ||||||||||
ASU 2013-11 reclassification | (14,857 | ) | — | |||||||||
Gross unrecognized income tax benefit | $ | 33,300 | $ | 53,682 | ||||||||
Incentive_Compensation_Plans_I
Incentive Compensation Plans Incentive Compensation Plans (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||
Equity-Based Compensation Expense | Equity-based compensation expense was recognized in the consolidated statements of operations as follows (in thousands): | ||||||||||||||||||
Year ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Rental expenses | $ | 106 | $ | 52 | $ | 2 | |||||||||||||
Cost of sales | 105 | 113 | 88 | ||||||||||||||||
Selling, general and administrative expenses | 3,822 | 2,760 | 1,979 | ||||||||||||||||
Total equity-based compensation expense, net of tax | $ | 4,033 | $ | 2,925 | $ | 2,069 | |||||||||||||
Weighted Average Assumptions, Profits Interest Units | The estimated fair values for these periods included the following weighted average assumptions for both the time-based and performance-based Profits Interest Units (annualized percentages): | ||||||||||||||||||
Year ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Expected stock volatility | 39.00% | 43.00% | 56.00% | ||||||||||||||||
Expected dividend yield | — | — | — | ||||||||||||||||
Risk-free interest rate | 0.50% | 0.60% | 0.90% | ||||||||||||||||
Expected life (years) | 2 | 3 | 4 | ||||||||||||||||
Profits Interest Unit Activity | A summary of our Profits Interest Unit (“PIU”) activity, and related information is set forth in the table below (in thousands, except weighted average grant date fair value): | ||||||||||||||||||
Time-based | Performance-based | Total | Weighted | ||||||||||||||||
Average Grant | |||||||||||||||||||
Date Fair Value | |||||||||||||||||||
PIU outstanding – December 31, 2013 | 8,562 | 7,922 | 16,484 | $ | 1.5 | ||||||||||||||
Granted | 2,054 | 2,054 | 4,108 | $ | 1.52 | ||||||||||||||
Repurchased | (947 | ) | — | (947 | ) | $ | 1.45 | ||||||||||||
Forfeited/Expired | (1,698 | ) | (3,123 | ) | (4,821 | ) | $ | 1.75 | |||||||||||
PIU outstanding – December 31, 2014 | 7,971 | 6,853 | 14,824 | $ | 1.42 | ||||||||||||||
PIU exercisable as of December 31, 2014 | 4,583 | — | 4,583 | $ | 1.49 | ||||||||||||||
Weighted Average Assumptions, Appreciation Rights | The estimated fair values for the years ended December 31, 2014, 2013 and 2012 included the following weighted average assumptions for both the time-based and performance-based Appreciation Rights (annualized percentages): | ||||||||||||||||||
Year ended December 31, | |||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||
Expected stock volatility | 39.00% | 43.00% | 56.00% | ||||||||||||||||
Expected dividend yield | — | — | — | ||||||||||||||||
Risk-free interest rate | 0.50% | 0.60% | 0.90% | ||||||||||||||||
Expected life (years) | 2 | 3 | 4 | ||||||||||||||||
Appreciation Rights Activity | A summary of our Appreciation Rights activity, and related information, for the year ended December 31, 2014 is set forth in the table below (in thousands, except exercise price and contractual term): | ||||||||||||||||||
Time-based | Performance-based | Total | Weighted | Weighted | Aggregate | ||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||
Base | Remaining | Value | |||||||||||||||||
Price | Contractual | ||||||||||||||||||
Term | |||||||||||||||||||
(years) | |||||||||||||||||||
Appreciation Rights outstanding – December 31, 2013 | 787 | 787 | 1,574 | $ | 6.5 | 8.96 | |||||||||||||
Granted | 682 | 682 | 1,364 | $ | 7.95 | ||||||||||||||
Exercised | — | — | — | $ | — | ||||||||||||||
Forfeited/Expired | (345 | ) | (345 | ) | (690 | ) | $ | 6.69 | |||||||||||
Appreciation Rights outstanding – December 31, 2014 | 1,124 | 1,124 | 2,248 | $ | 7.32 | 8.56 | $ | — | |||||||||||
Appreciation rights exercisable - December 31, 2014 | — | — | — | $ | — | N/A | $ | — | |||||||||||
Other_Comprehensive_Income_Los1
Other Comprehensive Income (Loss) (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||
Other Comprehensive Income (loss) | The components of accumulated other comprehensive income are as follows (in thousands): | |||||||||||
Accumulated | Unrealized Investment Gains (Losses) | Accumulated | ||||||||||
Foreign | Other | |||||||||||
Currency | Comprehensive | |||||||||||
Translation | Income (Loss) | |||||||||||
Adjustment | ||||||||||||
Balances at January 1, 2012 | $ | (5,841 | ) | $ | — | $ | (5,841 | ) | ||||
Foreign currency translation adjustment, net of tax expense of $369 | 5,324 | — | 5,324 | |||||||||
Balances at December 31, 2012 | (517 | ) | — | (517 | ) | |||||||
Foreign currency translation adjustment, net of tax benefit of $233 | (3,867 | ) | — | (3,867 | ) | |||||||
Unrealized investment gain, net of tax expense of $1,403 in 2013 | — | 2,241 | 2,241 | |||||||||
Balances at December 31, 2013 | (4,384 | ) | 2,241 | (2,143 | ) | |||||||
Foreign currency translation adjustment, net of tax expense of $753 | (5,690 | ) | — | (5,690 | ) | |||||||
Unrealized investment loss, net of tax benefit | — | — | — | |||||||||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | — | (2,241 | ) | (2,241 | ) | |||||||
Balances at December 31, 2014 | $ | (10,074 | ) | $ | — | $ | (10,074 | ) | ||||
Segment_and_Geographic_Informa1
Segment and Geographic Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Reconciliation of Revenue and Operating Earnings (Loss) from Segments to Consolidated | Information on segments and a reconciliation of consolidated totals are as follows (in thousands): | |||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Revenue: | ||||||||||||
Advanced Wound Therapeutics | $ | 1,420,278 | $ | 1,287,387 | $ | 1,312,258 | ||||||
Regenerative Medicine | 428,089 | 442,174 | 417,245 | |||||||||
Other operations (1) | 17,972 | 3,340 | — | |||||||||
Total revenue | $ | 1,866,339 | $ | 1,732,901 | $ | 1,729,503 | ||||||
Operating earnings (loss): | ||||||||||||
Advanced Wound Therapeutics (2) | $ | 455,666 | $ | 443,850 | $ | 398,066 | ||||||
Regenerative Medicine | 132,904 | 125,112 | 109,931 | |||||||||
Other operations (1) | 2,443 | 637 | — | |||||||||
Non-allocated costs: | ||||||||||||
General headquarter expense (3) | (9,516 | ) | (55,044 | ) | (19,928 | ) | ||||||
Equity-based compensation | (4,033 | ) | (2,925 | ) | (2,069 | ) | ||||||
Business optimization and transaction-related expenses (4) | (150,125 | ) | (144,253 | ) | (101,191 | ) | ||||||
Acquired intangible asset amortization (5) | (194,433 | ) | (188,571 | ) | (220,984 | ) | ||||||
Wake Forest settlement | (198,578 | ) | — | — | ||||||||
Impairment of goodwill and intangible assets (6) | — | (443,400 | ) | — | ||||||||
Total non-allocated costs | (556,685 | ) | (834,193 | ) | (344,172 | ) | ||||||
Total operating earnings (loss) | $ | 34,328 | $ | (264,594 | ) | $ | 163,825 | |||||
-1 | Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England for the period subsequent to our acquisition of Systagenix as discussed in Note 2. | |||||||||||
-2 | 2013 includes write-offs of $16.7 million of other intangible assets due primarily to the discontinuation of certain AWT projects. 2012 includes $22.1 million of impairment charges associated with certain production equipment at our Athlone manufacturing plant and inventory associated with our V.A.C.Via product. | |||||||||||
-3 | 2013 includes a $30.6 million fixed asset impairment charge. | |||||||||||
-4 | Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities. | |||||||||||
-5 | Represents amortization of acquired intangible assets related to our Merger in November 2011 and our acquisition of Systagenix in October 2013. | |||||||||||
-6 | During 2013, we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. These amounts have been excluded from Regenerative Medicine operating earnings as management excludes these charges from operating earnings when making operating decisions about the business. | |||||||||||
Schedule of Depreciation and Other Amortization Schedule of Depreciation and Other Amortization by Segment | ||||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation and other amortization: | ||||||||||||
Advanced Wound Therapeutics | $ | 231,296 | $ | 261,348 | $ | 324,945 | ||||||
Regenerative Medicine | 70,882 | 68,514 | 70,730 | |||||||||
Other | 1,727 | 6,097 | 40,695 | |||||||||
$ | 303,905 | $ | 335,959 | $ | 436,370 | |||||||
Information on Segment Assets | Information on segment assets are as follows (in thousands): | |||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Total assets: | ||||||||||||
Advanced Wound Therapeutics | $ | 5,070,845 | $ | 5,274,625 | $ | 4,966,687 | ||||||
Regenerative Medicine | 1,539,057 | 1,574,315 | 2,039,137 | |||||||||
Other | 390,811 | 423,705 | 568,940 | |||||||||
$ | 7,000,713 | $ | 7,272,645 | $ | 7,574,764 | |||||||
Gross Capital Expenditures | The following table contains information on gross capital expenditures (in thousands): | |||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Gross capital expenditures: | ||||||||||||
Advanced Wound Therapeutics | $ | 21,517 | $ | 36,910 | $ | 15,731 | ||||||
Regenerative Medicine | 7,057 | 17,862 | 26,240 | |||||||||
Other | 38,010 | 26,139 | 49,596 | |||||||||
$ | 66,584 | $ | 80,911 | $ | 91,567 | |||||||
Schedule of Information on the Geographical Location of Select Financial Information | Information on the geographical location of select financial information is as follows (in thousands): | |||||||||||
Year ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Geographic location of revenue: | ||||||||||||
Domestic | $ | — | $ | — | $ | — | ||||||
United States | 1,329,306 | 1,321,517 | 1,335,043 | |||||||||
Other foreign | 537,033 | 411,384 | 394,460 | |||||||||
Total revenue | $ | 1,866,339 | $ | 1,732,901 | $ | 1,729,503 | ||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Geographic location of long-lived assets (1): | ||||||||||||
Domestic | $ | — | $ | — | $ | — | ||||||
United States | 198,754 | 224,789 | 287,700 | |||||||||
Other foreign | 89,294 | 108,936 | 100,782 | |||||||||
Total long-lived assets | $ | 288,048 | $ | 333,725 | $ | 388,482 | ||||||
_____________________________ | ||||||||||||
(1)Long-lived assets exclude intangible assets. |
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||
Unaudited Consolidated Results of Operations by Quarter | Quarterly Financial Data (unaudited) | |||||||||||||||
The unaudited consolidated results of operations by quarter are summarized below (in thousands): | ||||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenue | $ | 442,635 | $ | 459,178 | $ | 481,793 | $ | 482,733 | ||||||||
Gross profit | $ | 276,596 | $ | 293,207 | $ | 314,413 | $ | 325,998 | ||||||||
Operating earnings (loss) | $ | 32,805 | $ | (142,123 | ) | $ | 88,347 | $ | 55,299 | |||||||
Loss from continuing operations | $ | (47,060 | ) | $ | (153,823 | ) | $ | (3,235 | ) | $ | (30,928 | ) | ||||
Earnings from discontinued operations | $ | 677 | $ | 1,106 | $ | 1,398 | $ | 1,392 | ||||||||
Net loss | $ | (46,383 | ) | $ | (152,717 | ) | $ | (1,837 | ) | $ | (29,536 | ) | ||||
Year Ended December 31, 2013 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
Revenue | $ | 411,366 | $ | 426,193 | $ | 432,960 | $ | 462,382 | ||||||||
Gross profit | $ | 260,540 | $ | 280,060 | $ | 285,082 | $ | 301,873 | ||||||||
Operating earnings (loss) | $ | 36,536 | $ | 11,456 | $ | (370,355 | ) | $ | 57,769 | |||||||
Loss from continuing operations | $ | (42,753 | ) | $ | (61,747 | ) | $ | (398,607 | ) | $ | (51,984 | ) | ||||
Earnings (loss) from discontinued operations | $ | (2,034 | ) | $ | (828 | ) | $ | 46 | $ | (751 | ) | |||||
Net loss | $ | (44,787 | ) | $ | (62,575 | ) | $ | (398,561 | ) | $ | (52,735 | ) |
Guarantor_Condensed_Consolidat1
Guarantor Condensed Consolidating Financial Statements (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Guarantor Condensed Consolidating Financial Statements [Abstract] | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | Condensed Consolidating Parent Company, Co-Issuers, | |||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
31-Dec-14 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 41,027 | $ | 1,499 | $ | 140,617 | $ | — | $ | 183,541 | ||||||||||||
Accounts receivable, net | — | 179,872 | 67,355 | 123,256 | — | 370,483 | ||||||||||||||||||
Inventories, net | — | 73,904 | 110,355 | 93,765 | (99,802 | ) | 178,222 | |||||||||||||||||
Deferred income taxes | — | 52,868 | 10,157 | — | — | 63,025 | ||||||||||||||||||
Prepaid expenses and other | — | 11,106 | 6,851 | 247,606 | (238,000 | ) | 27,563 | |||||||||||||||||
Intercompany receivables | 166 | 1,854,033 | 2,432,299 | 48,267 | (4,334,765 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,212,810 | 2,628,516 | 653,511 | (4,672,567 | ) | 822,834 | |||||||||||||||||
Net property, plant and equipment | — | 315,691 | 69,801 | 164,838 | (262,282 | ) | 288,048 | |||||||||||||||||
Debt issuance costs, net | — | 77,896 | — | — | — | 77,896 | ||||||||||||||||||
Deferred income taxes | — | — | — | 31,692 | — | 31,692 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,138 | 162,920 | — | 3,378,298 | ||||||||||||||||||
Identifiable intangible assets, net | — | 299,575 | 1,788,661 | 309,015 | — | 2,397,251 | ||||||||||||||||||
Other non-current assets | — | 1,161 | 186 | 94,247 | (90,900 | ) | 4,694 | |||||||||||||||||
Intercompany loan receivables | — | 760,000 | 429,856 | — | (1,189,856 | ) | — | |||||||||||||||||
Intercompany investments | 667,530 | 360,292 | 223,581 | — | (1,251,403 | ) | — | |||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | 245 | $ | 16,298 | $ | 14,463 | $ | 20,821 | $ | — | $ | 51,827 | ||||||||||||
Accrued expenses and other | — | 218,793 | 244,829 | 74,380 | (194,518 | ) | 343,484 | |||||||||||||||||
Intercompany payables | 6,441 | 1,181,383 | 2,634,149 | 512,792 | (4,334,765 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 25,721 | — | — | — | 25,721 | ||||||||||||||||||
Income taxes payable | — | — | — | 1,305 | — | 1,305 | ||||||||||||||||||
Deferred income taxes | — | — | 113,658 | — | — | 113,658 | ||||||||||||||||||
Total current liabilities | 6,686 | 1,442,195 | 3,007,099 | 609,298 | (4,529,283 | ) | 535,995 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,815,290 | — | — | — | 4,815,290 | ||||||||||||||||||
Non-current tax liabilities | — | 9,404 | 6,203 | 17,693 | — | 33,300 | ||||||||||||||||||
Deferred income taxes | — | 106,440 | 637,777 | 47,940 | — | 792,157 | ||||||||||||||||||
Other non-current liabilities | 695 | 113,368 | 48,172 | 1,023 | — | 163,258 | ||||||||||||||||||
Intercompany loan payables | — | 420,294 | 760,000 | 9,562 | (1,189,856 | ) | — | |||||||||||||||||
Total liabilities | 7,381 | 6,906,991 | 4,459,251 | 685,516 | (5,719,139 | ) | 6,340,000 | |||||||||||||||||
Total equity | 660,713 | (396,326 | ) | 1,413,488 | 730,707 | (1,747,869 | ) | 660,713 | ||||||||||||||||
$ | 668,094 | $ | 6,510,665 | $ | 5,872,739 | $ | 1,416,223 | $ | (7,467,008 | ) | $ | 7,000,713 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Balance Sheet | ||||||||||||||||||||||||
31-Dec-13 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Assets: | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 398 | $ | 87,771 | $ | 118 | $ | 118,662 | $ | — | $ | 206,949 | ||||||||||||
Accounts receivable, net | — | 184,723 | 71,457 | 151,398 | — | 407,578 | ||||||||||||||||||
Inventories, net | — | 54,809 | 101,779 | 101,751 | (76,772 | ) | 181,567 | |||||||||||||||||
Deferred income taxes | — | 14,991 | 6,610 | 2,020 | — | 23,621 | ||||||||||||||||||
Prepaid expenses and other | — | 35,832 | 5,434 | 321,427 | (309,532 | ) | 53,161 | |||||||||||||||||
Intercompany receivables | 166 | 1,687,528 | 2,326,181 | 21,241 | (4,035,116 | ) | — | |||||||||||||||||
Total current assets | 564 | 2,065,654 | 2,511,579 | 716,499 | (4,421,420 | ) | 872,876 | |||||||||||||||||
Net property, plant and equipment | — | 311,122 | 80,963 | 223,987 | (282,347 | ) | 333,725 | |||||||||||||||||
Debt issuance costs, net | — | 102,054 | — | — | — | 102,054 | ||||||||||||||||||
Deferred income taxes | — | — | — | 31,459 | — | 31,459 | ||||||||||||||||||
Goodwill | — | 2,483,240 | 732,771 | 162,650 | — | 3,378,661 | ||||||||||||||||||
Identifiable intangible assets, net | — | 361,640 | 1,829,452 | 358,109 | — | 2,549,201 | ||||||||||||||||||
Other non-current assets | — | 715 | 192 | 94,662 | (90,900 | ) | 4,669 | |||||||||||||||||
Intercompany loan receivables | — | 990,972 | 404,688 | — | (1,395,660 | ) | — | |||||||||||||||||
Intercompany investments | 901,902 | 432,884 | 372,093 | — | (1,706,879 | ) | — | |||||||||||||||||
$ | 902,466 | $ | 6,748,281 | $ | 5,931,738 | $ | 1,587,366 | $ | (7,897,206 | ) | $ | 7,272,645 | ||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | 15,266 | $ | 14,929 | $ | 20,121 | $ | — | $ | 50,316 | ||||||||||||
Accrued expenses and other | — | 185,790 | 246,977 | 77,843 | (181,635 | ) | 328,975 | |||||||||||||||||
Intercompany payables | 4,110 | 852,892 | 2,559,407 | 618,707 | (4,035,116 | ) | — | |||||||||||||||||
Current installments of long-term debt | — | 26,311 | — | — | — | 26,311 | ||||||||||||||||||
Income taxes payable | — | — | 3,368 | — | — | 3,368 | ||||||||||||||||||
Deferred income taxes | — | — | — | 2,199 | — | 2,199 | ||||||||||||||||||
Total current liabilities | 4,110 | 1,080,259 | 2,824,681 | 718,870 | (4,216,751 | ) | 411,169 | |||||||||||||||||
Long-term debt, net of current installments and discount | — | 4,865,503 | — | — | — | 4,865,503 | ||||||||||||||||||
Non-current tax liabilities | — | 28,850 | 4,284 | 20,548 | — | 53,682 | ||||||||||||||||||
Deferred income taxes | — | 231,713 | 718,930 | 53,141 | — | 1,003,784 | ||||||||||||||||||
Other non-current liabilities | 281 | 38,667 | 334 | 1,150 | — | 40,432 | ||||||||||||||||||
Intercompany loan payables | — | 399,690 | 780,000 | 215,970 | (1,395,660 | ) | — | |||||||||||||||||
Total liabilities | 4,391 | 6,644,682 | 4,328,229 | 1,009,679 | (5,612,411 | ) | 6,374,570 | |||||||||||||||||
Total equity | 898,075 | 103,599 | 1,603,509 | 577,687 | (2,284,795 | ) | 898,075 | |||||||||||||||||
$ | 902,466 | $ | 6,748,281 | $ | 5,931,738 | $ | 1,587,366 | $ | (7,897,206 | ) | $ | 7,272,645 | ||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | Condensed Consolidating Parent Company, Co-Issuers, | |||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 606,031 | $ | — | $ | 113,833 | $ | — | $ | 719,864 | ||||||||||||
Sales | — | 292,573 | 919,988 | 862,689 | (928,775 | ) | 1,146,475 | |||||||||||||||||
Total revenue | — | 898,604 | 919,988 | 976,522 | (928,775 | ) | 1,866,339 | |||||||||||||||||
Rental expenses | 106 | 292,336 | 11,156 | 202,613 | (173,449 | ) | 332,762 | |||||||||||||||||
Cost of sales | 105 | 314,129 | 571,768 | 370,643 | (933,282 | ) | 323,363 | |||||||||||||||||
Gross profit (loss) | (211 | ) | 292,139 | 337,064 | 403,266 | 177,956 | 1,210,214 | |||||||||||||||||
Selling, general and administrative expenses | 3,822 | 295,324 | 211,865 | 203,110 | (567 | ) | 713,554 | |||||||||||||||||
Research and development expenses | — | 24,044 | 26,803 | 18,474 | — | 69,321 | ||||||||||||||||||
Acquired intangible asset amortization | — | 61,995 | 79,136 | 53,302 | — | 194,433 | ||||||||||||||||||
Wake Forest settlement | — | 198,578 | — | — | — | 198,578 | ||||||||||||||||||
Operating earnings (loss) | (4,033 | ) | (287,802 | ) | 19,260 | 128,380 | 178,523 | 34,328 | ||||||||||||||||
Non-operating intercompany transactions | — | 18,775 | 146,218 | (249,577 | ) | 84,584 | — | |||||||||||||||||
Interest income and other | — | 73,919 | 19,148 | 319 | (89,719 | ) | 3,667 | |||||||||||||||||
Interest expense | — | (431,670 | ) | (68,861 | ) | (1,921 | ) | 89,719 | (412,733 | ) | ||||||||||||||
Foreign currency gain (loss) | — | 44,515 | (924 | ) | (25,747 | ) | — | 17,844 | ||||||||||||||||
Derivative instruments loss | — | (5,183 | ) | — | — | — | (5,183 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (4,033 | ) | (587,446 | ) | 114,841 | (148,546 | ) | 263,107 | (362,077 | ) | ||||||||||||||
Income tax expense (benefit) | — | (165,662 | ) | 36,119 | 2,512 | — | (127,031 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (4,033 | ) | (421,784 | ) | 78,722 | (151,058 | ) | 263,107 | (235,046 | ) | ||||||||||||||
Equity in earnings (loss) of subsidiaries | (226,440 | ) | (72,592 | ) | (151,058 | ) | — | 450,090 | — | |||||||||||||||
Earnings (loss) from continuing operations | (230,473 | ) | (494,376 | ) | (72,336 | ) | (151,058 | ) | 713,197 | (235,046 | ) | |||||||||||||
Earnings (loss) from discontinued operations, net of tax | — | — | 4,573 | — | — | 4,573 | ||||||||||||||||||
Net earnings (loss) | $ | (230,473 | ) | $ | (494,376 | ) | $ | (67,763 | ) | $ | (151,058 | ) | $ | 713,197 | $ | (230,473 | ) | |||||||
Total comprehensive income (loss) | $ | (238,404 | ) | $ | (502,307 | ) | $ | (75,694 | ) | $ | (158,989 | ) | $ | 736,990 | $ | (238,404 | ) | |||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 608,256 | $ | — | $ | 135,562 | $ | — | $ | 743,818 | ||||||||||||
Sales | — | 295,530 | 855,607 | 679,340 | (841,394 | ) | 989,083 | |||||||||||||||||
Total revenue | — | 903,786 | 855,607 | 814,902 | (841,394 | ) | 1,732,901 | |||||||||||||||||
Rental expenses | 52 | 253,082 | 10,986 | 221,473 | (132,089 | ) | 353,504 | |||||||||||||||||
Cost of sales | 113 | 296,788 | 523,367 | 261,199 | (829,625 | ) | 251,842 | |||||||||||||||||
Gross profit (loss) | (165 | ) | 353,916 | 321,254 | 332,230 | 120,320 | 1,127,555 | |||||||||||||||||
Selling, general and administrative expenses | 2,759 | 346,731 | 173,772 | 161,678 | (339 | ) | 684,601 | |||||||||||||||||
Research and development expenses | — | 29,555 | 31,679 | 14,343 | — | 75,577 | ||||||||||||||||||
Acquired intangible asset amortization | — | 80,042 | 73,794 | 34,735 | — | 188,571 | ||||||||||||||||||
Impairment of goodwill and intangible assets | — | — | 443,400 | — | — | 443,400 | ||||||||||||||||||
Operating earnings (loss) | (2,924 | ) | (102,412 | ) | (401,391 | ) | 121,474 | 120,659 | (264,594 | ) | ||||||||||||||
Non-operating intercompany transactions | — | 58,867 | 123,951 | (153,998 | ) | (28,820 | ) | — | ||||||||||||||||
Interest income and other | — | 72,601 | 12,251 | 179 | (83,429 | ) | 1,602 | |||||||||||||||||
Interest expense | — | (431,882 | ) | (70,623 | ) | (801 | ) | 83,429 | (419,877 | ) | ||||||||||||||
Loss on extinguishment of debt | — | (2,364 | ) | — | — | — | (2,364 | ) | ||||||||||||||||
Foreign currency loss | — | (16,723 | ) | (179 | ) | (5,316 | ) | (8 | ) | (22,226 | ) | |||||||||||||
Derivative instruments gain | — | 1,576 | — | — | — | 1,576 | ||||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (2,924 | ) | (420,337 | ) | (335,991 | ) | (38,462 | ) | 91,831 | (705,883 | ) | |||||||||||||
Income tax expense (benefit) | — | (166,067 | ) | 8,120 | 7,155 | — | (150,792 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (2,924 | ) | (254,270 | ) | (344,111 | ) | (45,617 | ) | 91,831 | (555,091 | ) | |||||||||||||
Equity in earnings (loss) of subsidiaries | (555,734 | ) | 56,284 | (46,074 | ) | — | 545,524 | — | ||||||||||||||||
Earnings (loss) from continuing operations | (558,658 | ) | (197,986 | ) | (390,185 | ) | (45,617 | ) | 637,355 | (555,091 | ) | |||||||||||||
Earnings from discontinued operations, net of tax | — | (3,091 | ) | (309 | ) | (457 | ) | 290 | (3,567 | ) | ||||||||||||||
Net earnings (loss) | $ | (558,658 | ) | $ | (201,077 | ) | $ | (390,494 | ) | $ | (46,074 | ) | $ | 637,645 | $ | (558,658 | ) | |||||||
Total comprehensive income (loss) | $ | (560,284 | ) | $ | (202,703 | ) | $ | (392,120 | ) | $ | (47,700 | ) | $ | 642,523 | $ | (560,284 | ) | |||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Rental | $ | — | $ | 654,372 | $ | — | $ | 161,188 | $ | — | $ | 815,560 | ||||||||||||
Sales | — | 292,303 | 411,032 | 547,346 | (336,738 | ) | 913,943 | |||||||||||||||||
Total revenue | — | 946,675 | 411,032 | 708,534 | (336,738 | ) | 1,729,503 | |||||||||||||||||
Rental expenses | 2 | 288,143 | 1,195 | 259,308 | (109,896 | ) | 438,752 | |||||||||||||||||
Cost of sales | 88 | 240,146 | 136,556 | 236,766 | (369,184 | ) | 244,372 | |||||||||||||||||
Gross profit (loss) | (90 | ) | 418,386 | 273,281 | 212,460 | 142,342 | 1,046,379 | |||||||||||||||||
Selling, general and administrative expenses | 1,991 | 327,223 | 120,789 | 140,549 | (694 | ) | 589,858 | |||||||||||||||||
Research and development expenses | — | 26,310 | 36,213 | 9,189 | — | 71,712 | ||||||||||||||||||
Acquired intangible asset amortization | — | 102,954 | 77,752 | 40,278 | — | 220,984 | ||||||||||||||||||
Operating earnings (loss) | (2,081 | ) | (38,101 | ) | 38,527 | 22,444 | 143,036 | 163,825 | ||||||||||||||||
Non-operating intercompany transactions | — | 100,690 | 329,531 | (474,480 | ) | 44,259 | — | |||||||||||||||||
Interest income and other | — | 73,114 | 12,251 | 177 | (84,713 | ) | 829 | |||||||||||||||||
Interest expense | — | (478,756 | ) | (72,458 | ) | (121 | ) | 84,713 | (466,622 | ) | ||||||||||||||
Loss on debt extinguishment | — | (31,481 | ) | — | — | — | (31,481 | ) | ||||||||||||||||
Foreign currency gain (loss) | — | (7,822 | ) | 294 | (5,473 | ) | — | (13,001 | ) | |||||||||||||||
Derivative instruments loss | — | (31,433 | ) | — | — | — | (31,433 | ) | ||||||||||||||||
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries | (2,081 | ) | (413,789 | ) | 308,145 | (457,453 | ) | 187,295 | (377,883 | ) | ||||||||||||||
Income tax expense (benefit) | — | (140,681 | ) | 50,759 | (57,901 | ) | — | (147,823 | ) | |||||||||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | (2,081 | ) | (273,108 | ) | 257,386 | (399,552 | ) | 187,295 | (230,060 | ) | ||||||||||||||
Equity in earnings (loss) of subsidiaries | (139,336 | ) | (60,960 | ) | (375,553 | ) | — | 575,849 | — | |||||||||||||||
Earnings (loss) from continuing operations | (141,417 | ) | (334,068 | ) | (118,167 | ) | (399,552 | ) | 763,144 | (230,060 | ) | |||||||||||||
Earnings from discontinued operations, net of tax | — | 4,546 | 37,855 | 23,999 | 22,243 | 88,643 | ||||||||||||||||||
Net earnings (loss) | $ | (141,417 | ) | $ | (329,522 | ) | $ | (80,312 | ) | $ | (375,553 | ) | $ | 785,387 | $ | (141,417 | ) | |||||||
Total comprehensive income (loss) | $ | (136,093 | ) | $ | (324,198 | ) | $ | (74,988 | ) | $ | (370,229 | ) | $ | 769,415 | $ | (136,093 | ) | |||||||
Guarantor and Non-Guarantor Statement of Cash Flows | Condensed Consolidating Parent Company, Co-Issuers, | |||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2014 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (230,473 | ) | $ | (494,376 | ) | $ | (67,763 | ) | $ | (151,058 | ) | $ | 713,197 | $ | (230,473 | ) | |||||||
Adjustments to reconcile net earnings (loss) to net cash provided | 6,364 | 306,092 | 104,787 | 131,736 | (226,711 | ) | 322,268 | |||||||||||||||||
Net cash provided (used) by operating activities | (224,109 | ) | (188,284 | ) | 37,024 | (19,322 | ) | 486,486 | 91,795 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (156,810 | ) | (5,024 | ) | (49,922 | ) | 145,261 | (66,495 | ) | ||||||||||||||
Proceeds from disposition of assets held for sale | — | — | 5,212 | — | — | 5,212 | ||||||||||||||||||
Proceeds from sale of investment | — | 4,211 | — | — | — | 4,211 | ||||||||||||||||||
Business acquired in purchase transaction, net of cash acquired | — | — | (9,500 | ) | (113 | ) | — | (9,613 | ) | |||||||||||||||
Increase in identifiable intangible assets and other non-current assets | — | (376 | ) | (7,418 | ) | (3,793 | ) | — | (11,587 | ) | ||||||||||||||
Net cash provided (used) by investing activities | — | (152,975 | ) | (16,730 | ) | (53,828 | ) | 145,261 | (78,272 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Settlement of profits interest units | (2,332 | ) | — | — | — | — | (2,332 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (26,345 | ) | — | (58 | ) | — | (26,403 | ) | |||||||||||||||
Proceeds (payments) on intercompany loans | — | 251,576 | (45,168 | ) | (206,408 | ) | — | — | ||||||||||||||||
Proceeds (payments) on intercompany investments | 226,441 | 69,284 | 26,255 | 309,767 | (631,747 | ) | — | |||||||||||||||||
Net cash provided (used) by financing activities | 224,109 | 294,515 | (18,913 | ) | 103,301 | (631,747 | ) | (28,735 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (8,196 | ) | — | (8,196 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | (46,744 | ) | 1,381 | 21,955 | — | (23,408 | ) | ||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 87,771 | 118 | 118,662 | — | 206,949 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 41,027 | $ | 1,499 | $ | 140,617 | $ | — | $ | 183,541 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2013 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (558,658 | ) | $ | (201,077 | ) | $ | (390,494 | ) | $ | (46,074 | ) | $ | 637,645 | $ | (558,658 | ) | |||||||
Adjustments to reconcile net earnings (loss) to net cash provided | 4,673 | 244,257 | 263,245 | 292,384 | (109,122 | ) | 695,437 | |||||||||||||||||
Net cash provided (used) by operating activities | (553,985 | ) | 43,180 | (127,249 | ) | 246,310 | 528,523 | 136,779 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (196,988 | ) | (17,274 | ) | (111,118 | ) | 247,053 | (78,327 | ) | ||||||||||||||
Business acquired in purchase transaction, net of cash acquired | — | — | (64,938 | ) | (413,810 | ) | — | (478,748 | ) | |||||||||||||||
Increase in identifiable intangible assets and other non-current assets | — | (453 | ) | (6,419 | ) | 125 | — | (6,747 | ) | |||||||||||||||
Net cash provided (used) by investing activities | — | (197,441 | ) | (88,631 | ) | (524,803 | ) | 247,053 | (563,822 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Distribution to limited partners | (1,572 | ) | — | — | — | — | (1,572 | ) | ||||||||||||||||
Settlement of profits interest units | (176 | ) | — | — | — | — | (176 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (67,133 | ) | (2,257 | ) | (6 | ) | — | (69,396 | ) | ||||||||||||||
Debt issuance costs | — | (20,477 | ) | — | — | — | (20,477 | ) | ||||||||||||||||
Proceeds (payments) on intercompany loans | — | (157,416 | ) | (58,554 | ) | 215,970 | — | — | ||||||||||||||||
2013 acquisition financing | ||||||||||||||||||||||||
Proceeds from senior credit facility | — | 349,563 | — | — | — | 349,563 | ||||||||||||||||||
Payment of debt issuance costs | — | (7,340 | ) | — | — | — | (7,340 | ) | ||||||||||||||||
Proceeds (payments) on intercompany investments | 555,733 | (131,953 | ) | 276,809 | 74,987 | (775,576 | ) | — | ||||||||||||||||
Net cash provided (used) by financing activities | 553,985 | (34,756 | ) | 215,998 | 290,951 | (775,576 | ) | 250,602 | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 240 | — | 240 | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | (189,017 | ) | 118 | 12,698 | — | (176,201 | ) | ||||||||||||||||
Cash and cash equivalents, beginning of period | 398 | 276,788 | — | 105,964 | — | 383,150 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 87,771 | $ | 118 | $ | 118,662 | $ | — | $ | 206,949 | ||||||||||||
Condensed Consolidating Parent Company, Co-Issuers, | ||||||||||||||||||||||||
Guarantor and Non-Guarantor Statement of Cash Flows | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
For the year ended December 31, 2012 | ||||||||||||||||||||||||
Acelity L.P. Inc. Parent Company | Kinetic Concepts, Inc. and KCI USA, Inc. Borrower | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (141,417 | ) | $ | (329,522 | ) | $ | (80,312 | ) | $ | (375,553 | ) | $ | 785,387 | $ | (141,417 | ) | |||||||
Adjustments to reconcile net earnings (loss) to net cash provided | 4,268 | 449,431 | (141,711 | ) | 141,795 | (149,673 | ) | 304,110 | ||||||||||||||||
Net cash provided (used) by operating activities | (137,149 | ) | 119,909 | (222,023 | ) | (233,758 | ) | 635,714 | 162,693 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Net additions to property, plant and equipment | — | (96,931 | ) | (25,244 | ) | (70,550 | ) | 109,057 | (83,668 | ) | ||||||||||||||
Proceeds from disposition of assets held for sale | — | 74,576 | 72,335 | 97,406 | — | 244,317 | ||||||||||||||||||
Business acquired in purchase transaction, net of cash acquired | — | (15,097 | ) | — | — | — | (15,097 | ) | ||||||||||||||||
Increase in identifiable intangible assets and other non-current assets | — | 5,881 | (7,795 | ) | 897 | — | (1,017 | ) | ||||||||||||||||
Net cash provided (used) by investing activities | — | (31,571 | ) | 39,296 | 27,753 | 109,057 | 144,535 | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Capital contributions from limited partners | 239 | — | — | — | — | 239 | ||||||||||||||||||
Distribution to limited partners | (2,199 | ) | — | — | — | — | (2,199 | ) | ||||||||||||||||
Repayments of long-term debt and capital lease obligations | — | (118,777 | ) | — | 10 | — | (118,767 | ) | ||||||||||||||||
Debt issuance costs | — | (18,410 | ) | — | — | — | (18,410 | ) | ||||||||||||||||
Proceeds (payments) on intercompany loans | — | 15,783 | (90,803 | ) | 75,020 | — | — | |||||||||||||||||
2012 refinancing of senior credit facility | ||||||||||||||||||||||||
Payment of debt issuance costs | — | (1,063 | ) | — | — | — | (1,063 | ) | ||||||||||||||||
Proceeds (payments) on intercompany investments | 139,096 | 168,265 | 273,530 | 163,880 | (744,771 | ) | — | |||||||||||||||||
Net cash provided (used) by financing activities | 137,136 | 45,798 | 182,727 | 238,910 | (744,771 | ) | (140,200 | ) | ||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 696 | — | 696 | ||||||||||||||||||
Net increase in cash and cash equivalents | (13 | ) | 134,136 | — | 33,601 | — | 167,724 | |||||||||||||||||
Cash and cash equivalents, beginning of period | 411 | 142,652 | — | 72,363 | — | 215,426 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 398 | $ | 276,788 | $ | — | $ | 105,964 | $ | — | $ | 383,150 | ||||||||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
farm | farm | ||||||||||
supplier | supplier | ||||||||||
Countries | Countries | ||||||||||
segment | segment | ||||||||||
Basis of Presentation and Principles of Consolidation [Abstract] | |||||||||||
Number of Reportable Operating Segments | 2 | 2 | |||||||||
Number of primary geographic regions | 2 | 2 | |||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Number of countries in which entity rents or sales products | 75 | 75 | |||||||||
Number of Reporting Units | 3 | 3 | |||||||||
Total revenue | $482,733,000 | $481,793,000 | $459,178,000 | $442,635,000 | $462,382,000 | $432,960,000 | $426,193,000 | $411,366,000 | $1,866,339,000 | $1,732,901,000 | $1,729,503,000 |
Inventories [Abstract] | |||||||||||
Sale-only products in excess of anticipated demand, reserve percentage | 100.00% | 100.00% | |||||||||
Long-Lived Assets [Abstract] | |||||||||||
Depreciation expense | 108,000,000 | 145,700,000 | 178,400,000 | ||||||||
Asset impairment charges | 0 | 30,580,000 | 22,116,000 | ||||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||||||
Goodwill, Impairment Loss | 272,200,000 | ||||||||||
Write off of in process research and development costs | 0 | 16,885,000 | 0 | ||||||||
Self-Insurance [Abstract] | |||||||||||
Casualty insurance deductible | 750,000 | 750,000 | |||||||||
Shipping and Handling [Abstract] | |||||||||||
Shipping and handling | 5,100,000 | 4,700,000 | 4,800,000 | ||||||||
Advertising Expenses [Abstract] | |||||||||||
Advertising expense | 10,900,000 | 7,600,000 | 8,800,000 | ||||||||
Concentrations In Available Sources Of Materials [Abstract] | |||||||||||
Number of qualified porcine tissue suppliers | 2 | 2 | |||||||||
Number of separate breeding herd farms supplying porcine tissue | 3 | 3 | |||||||||
Recently Adopted Accounting Standards [Abstract] | |||||||||||
Decrease in non-current deferred tax assets | 14,900,000 | 14,900,000 | |||||||||
ASU 2013-11 reclass | 14,900,000 | 14,900,000 | |||||||||
Product Liability [Member] | |||||||||||
Self-Insurance [Abstract] | |||||||||||
Self Insurance, Retention Amount | 1,000,000 | 1,000,000 | |||||||||
Employee Injury Benefit Plan [Member] | |||||||||||
Self-Insurance [Abstract] | |||||||||||
Self Insurance, Retention Amount | 750,000 | 750,000 | |||||||||
Minimum [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Number of Countries in which Entity Operates | 25 | 25 | |||||||||
Number of Countries in which company has sales through indirect operations | 50 | 50 | |||||||||
Inventories [Abstract] | |||||||||||
Obsolescence reserve balance percentage | 0.00% | 0.00% | |||||||||
Minimum [Member] | Buildings [Member] | |||||||||||
Long-Lived Assets [Abstract] | |||||||||||
Useful life | 20 years | ||||||||||
Minimum [Member] | Property, Plant and Equipment, Other Types [Member] | |||||||||||
Long-Lived Assets [Abstract] | |||||||||||
Useful life | 3 years | ||||||||||
Maximum [Member] | |||||||||||
Inventories [Abstract] | |||||||||||
Obsolescence reserve balance percentage | 100.00% | 100.00% | |||||||||
Maximum [Member] | Buildings [Member] | |||||||||||
Long-Lived Assets [Abstract] | |||||||||||
Useful life | 30 years | ||||||||||
Maximum [Member] | Property, Plant and Equipment, Other Types [Member] | |||||||||||
Long-Lived Assets [Abstract] | |||||||||||
Useful life | 7 years | ||||||||||
United States [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Total revenue | 1,329,306,000 | 1,321,517,000 | 1,335,043,000 | ||||||||
Sales [Member] | Americas [Member] | Geographic Concentration Risk [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Concentration risk, percentage | 75.60% | 80.30% | 80.90% | ||||||||
Chiron Guernsey Holdings LP [Member] | Minimum [Member] | |||||||||||
Basis of Presentation and Principles of Consolidation [Abstract] | |||||||||||
Ownership percentage | 99.00% | 99.00% | 99.00% | ||||||||
Acelity Managing Limited Partner [Member] | Maximum [Member] | |||||||||||
Basis of Presentation and Principles of Consolidation [Abstract] | |||||||||||
Ownership percentage | 1.00% | 1.00% | 1.00% | ||||||||
Chiron Guernsey GP Co. Limited [Member] | |||||||||||
Basis of Presentation and Principles of Consolidation [Abstract] | |||||||||||
Percentage of general partnership owned | 100.00% | 100.00% | 100.00% | ||||||||
Acute and Extended Care Organizations [Member] | Sales [Member] | United States [Member] | Geographic Concentration Risk [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Concentration risk, percentage | 58.50% | 60.80% | 59.20% | ||||||||
Medicare [Member] | United States [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Total revenue | 120,600,000 | 142,500,000 | 167,100,000 | ||||||||
Novation, LLC [Member] | United States [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Total revenue | 106,700,000 | 94,100,000 | 96,300,000 | ||||||||
Interest Rate Swap [Member] | Concentration of Credit Risk [Member] | |||||||||||
Concentration of Credit Risk [Abstract] | |||||||||||
Derivative, Notional Amount | 487,700,000 | 487,700,000 | |||||||||
Regenerative Medicine [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Total revenue | 428,089,000 | 442,174,000 | 417,245,000 | ||||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||||||
Change in fair value of reporting unit | 11.00% | 6.00% | |||||||||
Change in fair value of identifiable intangible assets | 4.00% | ||||||||||
Goodwill, Impairment Loss | 272,200,000 | ||||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 171,200,000 | ||||||||||
Advanced Wound Therapeutics [Member] | |||||||||||
Nature of Operations and Customer Concentration [Abstract] | |||||||||||
Total revenue | 1,420,278,000 | 1,287,387,000 | 1,312,258,000 | ||||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||||||
Change in fair value of reporting unit | 27.00% | ||||||||||
Change in fair value of identifiable intangible assets | 10.00% | ||||||||||
Write off of in process research and development costs | 16,700,000 | ||||||||||
Systagenix [Member] | |||||||||||
Goodwill and Other Intangible Assets [Abstract] | |||||||||||
Change in fair value of reporting unit | 21.00% | ||||||||||
Goodwill, Impairment Loss | $0 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Schedule of Concentrations of Accounts Receivable (Details) (Americas [Member], Accounts Receivable [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Acute and Extended Care Organizations [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 51.00% | 53.00% |
Managed Care, Insurance and Other [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 28.00% | 28.00% |
Medicare/Medicaid [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 10.00% | 9.00% |
Other [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 11.00% | 10.00% |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures Acquisitions (Details) (USD $) | 12 Months Ended | 3 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Oct. 28, 2013 | |
Business Acquisition [Line Items] | |||||
Business acquired in purchase transaction, net of cash acquired | $9,613,000 | $478,748,000 | $15,097,000 | ||
Goodwill | 3,378,298,000 | 3,378,661,000 | 3,479,775,000 | 3,378,661,000 | |
Goodwill, Purchase Accounting Adjustments | 1,737,000 | ||||
Accrued expense and other | 343,484,000 | 328,975,000 | 328,975,000 | ||
Other non-current liabilities | 163,258,000 | 40,432,000 | 40,432,000 | ||
Systagenix [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquired in purchase transaction, net of cash acquired | 478,748,000 | 478,748,000 | 478,700,000 | ||
Business Acquisition Incremental Borrowing | 350,000,000 | ||||
Goodwill | 172,823,000 | 171,086,000 | 171,086,000 | ||
Goodwill, Purchase Accounting Adjustments | 1,737,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Accounts Receivable | 50,807,000 | 50,807,000 | 50,807,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 27,450,000 | 27,450,000 | 27,450,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 1,902,000 | 1,902,000 | 1,902,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 44,016,000 | 44,016,000 | 44,016,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 139,000 | 139,000 | 139,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | -36,489,000 | -34,752,000 | -34,752,000 | ||
Assumed Liability Purchase Accounting Adjustment | -1,737,000 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | -79,000 | -79,000 | -79,000 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liability, Net | -35,388,000 | -35,388,000 | -35,388,000 | ||
Systagenix [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 103,301,000 | 103,301,000 | 103,301,000 | ||
Systagenix [Member] | Developed Technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 91,700,000 | 91,700,000 | 91,700,000 | ||
Systagenix [Member] | Tradenames [Members] | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 56,800,000 | 56,800,000 | 56,800,000 | ||
Systagenix [Member] | In-process Research and Development [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 1,766,000 | 1,766,000 | 1,766,000 | ||
Attenuate [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquired in purchase transaction, net of cash acquired | 3,000,000 | ||||
Milestone Achievement Payment | 1,500,000 | ||||
Accrued expense and other | 7,100,000 | ||||
Other non-current liabilities | 9,000,000 | ||||
Revolve [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquired in purchase transaction, net of cash acquired | 5,000,000 | ||||
Accrued expense and other | 4,500,000 | ||||
Other non-current liabilities | 3,700,000 | ||||
Maximum [Member] | Attenuate [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional Future Milestone Payments | 31,500,000 | ||||
Maximum [Member] | Revolve [Member] | |||||
Business Acquisition [Line Items] | |||||
Additional Future Milestone Payments | $10,000,000 |
Acquisitions_and_Divestitures_2
Acquisitions and Divestitures Business Acquisition, Pro Forma (Details) (Systagenix [Member], USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Systagenix [Member] | ||
Business Acquisition [Line Items] | ||
Business Acquisition, Pro Forma Revenue | $1,931,683,000 | $1,943,296,000 |
Business Acquisition, Pro Forma Net Income (Loss) | -552,153,000 | -168,001,000 |
Business Combination, Acquisition Related Costs | 16,200,000 | |
Amortization Of Fair Value Step Up In Inventory | $9,800,000 |
Acquisitions_and_Divestitures_3
Acquisitions and Divestitures Divestitures (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 08, 2012 | |
Operating results of product portfolios included in discontinued operations | ||||||||||||
Earnings (loss) before income taxes | $7,436,000 | ($5,800,000) | $144,136,000 | |||||||||
Income tax expense (benefit) | -2,863,000 | 2,233,000 | -55,493,000 | |||||||||
Earnings (loss) from discontinued operations, net of tax | 1,392,000 | 1,398,000 | 1,106,000 | 677,000 | -751,000 | 46,000 | -828,000 | -2,034,000 | 4,573,000 | -3,567,000 | 88,643,000 | |
Therapeutic Support Systems [Member] | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from Divestiture of Businesses | 241,500,000 | |||||||||||
Operating results of product portfolios included in discontinued operations | ||||||||||||
Revenue | 0 | 188,121,000 | ||||||||||
Earnings (loss) before income taxes | -5,371,000 | 149,916,000 | ||||||||||
Income tax expense (benefit) | -2,068,000 | 57,718,000 | ||||||||||
Earnings (loss) from discontinued operations, net of tax | -3,303,000 | 92,198,000 | ||||||||||
SPY Elite System [Member] | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Proceeds from Divestiture of Businesses | 4,500,000 | |||||||||||
Operating results of product portfolios included in discontinued operations | ||||||||||||
Revenue | 22,204,000 | 26,010,000 | 16,950,000 | |||||||||
Earnings (loss) before income taxes | 7,436,000 | -429,000 | -5,780,000 | |||||||||
Income tax expense (benefit) | 2,863,000 | -165,000 | -2,225,000 | |||||||||
Earnings (loss) from discontinued operations, net of tax | $4,573,000 | ($264,000) | ($3,555,000) |
Supplemental_Balance_Sheet_Dat2
Supplemental Balance Sheet Data - Accounts Receivable, Net (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed trade accounts receivable | $396,329 | $418,804 |
Unbilled receivables | 39,293 | 50,841 |
Less: Allowance for revenue adjustments | -61,460 | -67,631 |
Gross trade accounts receivable | 374,162 | 402,014 |
Less: Allowance for bad debt | -13,087 | -8,483 |
Net trade accounts receivable | 361,075 | 393,531 |
Other receivables | 9,408 | 14,047 |
Accounts receivable, net | $370,483 | $407,578 |
Supplemental_Balance_Sheet_Dat3
Supplemental Balance Sheet Data - Inventories, Net (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Finished goods and tissue available for distribution | $127,253 | $110,937 |
Goods and tissue in-process | 6,887 | 12,994 |
Raw materials, supplies, parts and unprocessed tissue | 67,567 | 71,876 |
Inventories, gross | 201,707 | 195,807 |
Less: Amounts expected to be converted into equipment for short-term rental | -7,515 | -3,952 |
Reserve for excess and obsolete inventory | -15,970 | -10,288 |
Inventories, net | $178,222 | $181,567 |
Supplemental_Balance_Sheet_Dat4
Supplemental Balance Sheet Data - Net Property, Plant, and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $778,530 | $732,518 |
Less accumulated depreciation | -490,482 | -398,793 |
Net property, plant and equipment | 288,048 | 333,725 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 13,121 | 13,438 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 46,561 | 46,092 |
Equipment for Short-Term Rental [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 313,025 | 297,896 |
Machinery, Equipment and Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 320,498 | 294,916 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 77,810 | 76,224 |
Inventory To Be Converted To Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $7,515 | $3,952 |
Supplemental_Balance_Sheet_Dat5
Supplemental Balance Sheet Data - Accrued Expenses and Other (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses and Other [Line Items] | ||
Payroll, benefits, commissions, bonuses and related taxes | $65,740 | $89,190 |
Wake Forest royalty settlement and other royalties | 85,275 | 66,446 |
Interest | 43,607 | 43,253 |
Sales and other taxes | 24,469 | 21,827 |
Insurance | 8,729 | 9,425 |
Derivative liability | 13,936 | 914 |
Other accrued expenses | 101,728 | 97,920 |
Accrued expenses and other | $343,484 | $328,975 |
Accounting_for_Goodwill_and_Ot2
Accounting for Goodwill and Other Non-current Assets Schedule of Goodwill (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
segment | |||
Goodwill [Line Items] | |||
Number of Reportable Operating Segments | 2 | ||
Number of Reporting Units | 3 | ||
Goodwill | $3,378,298 | $3,378,661 | $3,479,775 |
Goodwill, Acquired During Period | 171,086 | ||
Goodwill, Impairment Loss | -272,200 | ||
Goodwill, Purchase Accounting Adjustments | 1,737 | ||
Goodwill, Other Changes | -2,100 | ||
KCI [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 2,483,240 | 2,483,240 | 2,483,240 |
Goodwill, Acquired During Period | 0 | ||
Goodwill, Impairment Loss | 0 | ||
Goodwill, Purchase Accounting Adjustments | 0 | ||
Goodwill, Other Changes | 0 | ||
Regenerative Medicine [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 722,235 | 724,335 | 996,535 |
Goodwill, Acquired During Period | 0 | ||
Goodwill, Impairment Loss | -272,200 | ||
Goodwill, Purchase Accounting Adjustments | 0 | ||
Goodwill, Other Changes | -2,100 | ||
Systagenix [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 172,823 | 171,086 | 0 |
Goodwill, Acquired During Period | 171,086 | ||
Goodwill, Impairment Loss | 0 | ||
Goodwill, Purchase Accounting Adjustments | 1,737 | ||
Goodwill, Other Changes | $0 |
Accounting_for_Goodwill_and_Ot3
Accounting for Goodwill and Other Non-current Assets Schedule of Definite-lived and Indefinite-lived Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Definite-Lived Intangible Assets, Gross [Abstract] | |||
Gross Carrying Amount | $1,838,828,000 | $1,793,297,000 | |
Accumulated Amortization | -623,743,000 | -427,862,000 | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 1,182,166,000 | 1,183,766,000 | |
Total Gross Carrying Amount | 3,020,994,000 | 2,977,063,000 | |
Amortization expense for definite-lived assets | 195,900,000 | 190,300,000 | 221,300,000 |
Tradenames [Members] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 1,178,800,000 | 1,178,800,000 | |
In-process Research and Development [Member] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Gross Carrying Amount | 3,366,000 | 4,966,000 | |
Customer Relationships and Non-compete Agreements [Member] | |||
Definite-Lived Intangible Assets, Gross [Abstract] | |||
Gross Carrying Amount | 947,638,000 | 947,706,000 | |
Accumulated Amortization | -400,806,000 | -291,812,000 | |
Developed Technology [Member] | |||
Definite-Lived Intangible Assets, Gross [Abstract] | |||
Gross Carrying Amount | 761,464,000 | 759,898,000 | |
Accumulated Amortization | -206,355,000 | -128,728,000 | |
Tradenames and Patents [Member] | |||
Definite-Lived Intangible Assets, Gross [Abstract] | |||
Gross Carrying Amount | 129,726,000 | 85,693,000 | |
Accumulated Amortization | ($16,582,000) | ($7,322,000) |
Accounting_for_Goodwill_and_Ot4
Accounting for Goodwill and Other Non-current Assets Schedule of Estimated Amortization Expense (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Accounting for Goodwill and Other Non-current Assets [Abstract] | |
2015 | $178,498 |
2016 | 162,717 |
2017 | 149,423 |
2018 | 136,083 |
2019 | $125,348 |
Accounting_for_Goodwill_and_Ot5
Accounting for Goodwill and Other Non-current Assets Debt Issuance Costs (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Debt Instrument [Line Items] | |||
Debt issuance costs, net | $77,896,000 | $102,054,000 | |
Amortization of financing costs | 24,100,000 | 21,800,000 | 18,200,000 |
Write-off of deferred debt issuance costs | $0 | $0 | $16,200,000 |
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate | 10.50% | ||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate | 12.50% |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 11 Months Ended | 0 Months Ended | ||||
Mar. 15, 2013 | Feb. 04, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Mar. 10, 2015 | Nov. 30, 2011 | Dec. 31, 2008 | |
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | $4,898,439,000 | $4,965,166,000 | 4,898,439,000 | ||||||
Less: Discount, net of accretion | -57,428,000 | -73,352,000 | -57,428,000 | ||||||
Long-term Debt | 4,841,011,000 | 4,891,814,000 | 4,841,011,000 | ||||||
Less: Current installments | -25,721,000 | -26,311,000 | -25,721,000 | ||||||
Long-term debt, net of current installments and discount | 4,815,290,000 | 4,865,503,000 | 4,815,290,000 | ||||||
Interest [Abstract] | |||||||||
Interest rate added on past due amounts | 2.00% | 2.00% | |||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Additional interest accrual rate | 0.50% | 0.25% | |||||||
Interest and Future Maturities [Abstract] | |||||||||
Interest paid, net of cash received from interest rate derivatives | 367,000,000 | 385,700,000 | 432,200,000 | ||||||
Maturities of Long-term Debt [Abstract] | |||||||||
2015 | 25,721,000 | 25,721,000 | |||||||
2016 | 334,584,000 | 334,584,000 | |||||||
2017 | 22,434,000 | 22,434,000 | |||||||
2018 | 3,903,700,000 | 3,903,700,000 | |||||||
2019 | 612,000,000 | 612,000,000 | |||||||
Thereafter | 0 | 0 | |||||||
Dollar Term E-1 Facility [Member] | Eurocurrency Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 3.00% | ||||||||
Dollar Term E-1 Facility [Member] | Base Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.00% | ||||||||
Euro Term E-1 Facility [Member] | Eurocurrency Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 3.25% | ||||||||
Euro Term E-1 Facility [Member] | Base Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.25% | ||||||||
Dollar Term E-2 Facility [Member] | Eurocurrency Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.50% | ||||||||
Dollar Term E-2 Facility [Member] | Base Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 1.50% | ||||||||
Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility [Member] | |||||||||
Maturity [Abstract] | |||||||||
Quarterly installments as percentage of original principal amount | 1.00% | ||||||||
Mandatory Repayments [Abstract] | |||||||||
Mandatory repayments due to disposition of certain property, percentage of proceeds | 100.00% | ||||||||
Mandatory repayments due to issuance or incurrence of debt, percentage of proceeds | 100.00% | ||||||||
Mandatory repayments, percentage of excess annual cash flow | 50.00% | ||||||||
Mandatory repayments, percentage of excess annual cash flow, first stepdown | 25.00% | ||||||||
Mandatory repayments, percentage of excess annual cash flow, second stepdown | 0.00% | ||||||||
Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility [Member] | Eurocurrency Rate [Member] | Minimum [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 1.00% | ||||||||
Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility [Member] | Base Rate [Member] | Minimum [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.00% | ||||||||
Revolving Credit Facility [Member] | Senior Revolving Credit Facility - due 2016 [Member] | |||||||||
Senior Secured Credit Facilities [Abstract] | |||||||||
Credit facility, maximum borrowing capacity | 200,000,000 | ||||||||
Line of Credit Facility, Amount Outstanding | 0 | ||||||||
Letters of credit, amount outstanding | 39,000,000 | 21,200,000 | 39,000,000 | ||||||
Credit facility, remaining borrowing capacity | 161,000,000 | 178,800,000 | 161,000,000 | ||||||
Credit facility, unused capacity, commitment fee percentage | 0.50% | ||||||||
Senior Secured Credit Facility [Member] | |||||||||
Interest [Abstract] | |||||||||
Payments of Financing Costs | 1,800,000 | ||||||||
Collateral [Abstract] | |||||||||
Maximum percentage of voting stock (in hundredths) | 65.00% | 65.00% | |||||||
Present and future real property pledged as collateral | 20,000,000 | 20,000,000 | |||||||
Term Credit Facilities [Member] | Dollar Term D-1 Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 1,946,708,000 | ||||||||
Less: Discount, net of accretion | -30,926,000 | ||||||||
Term Credit Facilities [Member] | Euro Term D-1 Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 337,820,000 | ||||||||
Less: Discount, net of accretion | -10,693,000 | ||||||||
Term Credit Facilities [Member] | Dollar Term D-2 Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 318,537,000 | ||||||||
Less: Discount, net of accretion | -4,486,000 | ||||||||
Term Credit Facilities [Member] | Dollar Term E-1 Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 1,927,241,000 | 1,927,241,000 | |||||||
Less: Discount, net of accretion | -24,241,000 | -24,241,000 | |||||||
Term Credit Facilities [Member] | Euro Term E-1 Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 293,746,000 | 293,746,000 | |||||||
Less: Discount, net of accretion | -7,376,000 | -7,376,000 | |||||||
Term Credit Facilities [Member] | Dollar Term E-2 Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 315,351,000 | 315,351,000 | |||||||
Less: Discount, net of accretion | -2,955,000 | -2,955,000 | |||||||
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 1,750,000,000 | 1,750,000,000 | 1,750,000,000 | ||||||
Less: Discount, net of accretion | -20,205,000 | -24,222,000 | -20,205,000 | ||||||
Collateral [Abstract] | |||||||||
Maximum percentage of voting stock (in hundredths) | 65.00% | 65.00% | |||||||
Present and future real property pledged as collateral | 20,000,000 | 20,000,000 | |||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, face amount | 1,750,000,000 | ||||||||
Interest rate on senior long-term debt | 10.50% | 10.50% | |||||||
Redemption price of notes as percentage of principal plus accrued interest in event of change of control | 101.00% | 101.00% | |||||||
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | Prior to November 1, 2014 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Aggregate principal amount of notes redeemable prior to November 1, 2014 | 35.00% | 35.00% | |||||||
Debt instrument, redemption price, percentage | 110.50% | ||||||||
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | Prior to November 1, 2015 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 100.00% | ||||||||
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | On or after November 1, 2015 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 105.25% | ||||||||
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | On or after November 1, 2016 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 102.63% | ||||||||
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | On or after November 1, 2017 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 100.00% | ||||||||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 612,000,000 | 612,000,000 | 612,000,000 | ||||||
Less: Discount, net of accretion | -2,651,000 | -3,025,000 | -2,651,000 | ||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, face amount | 750,000,000 | ||||||||
Interest rate on senior long-term debt | 12.50% | 12.50% | |||||||
Redemption price of notes as percentage of principal plus accrued interest in event of change of control | 101.00% | 101.00% | |||||||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | Prior to November 1, 2014 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Aggregate principal amount of notes redeemable prior to November 1, 2014 | 35.00% | 35.00% | |||||||
Debt instrument, redemption price, percentage | 112.50% | ||||||||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | Prior to November 1, 2015 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 100.00% | ||||||||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | On or after November 1, 2015 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 106.25% | ||||||||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | On or after November 1, 2016 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 103.13% | ||||||||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | On or after November 1, 2017 [Member] | |||||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, redemption price, percentage | 100.00% | ||||||||
Convertible Senior Notes [Member] | 3.25% Convertible Senior Notes due 2015 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | 101,000 | 101,000 | 101,000 | ||||||
10.5% Second Lien Senior Secured Notes, 12.5% Senior Unsecured Notes and 3.25% Convertible Senior Notes [Abstract] | |||||||||
Debt instrument, face amount | 690,000,000 | ||||||||
Interest rate on senior long-term debt | 3.25% | ||||||||
Beginning March 31, 2012 [Member] | Senior Secured Credit Facility [Member] | |||||||||
Covenants [Abstract] | |||||||||
Leverage ratio of debt to EBITDA | 8.5 | 8.5 | |||||||
Ratio of EBITDA to interest expense | 1.1 | 1.1 | |||||||
Banks Which Are Not Party To Senior Secured Credit Facility [Member] | Senior Secured Credit Facility [Member] | Senior Revolving Credit Facility - due 2016 [Member] | |||||||||
Senior Secured Credit Facilities [Abstract] | |||||||||
Letters of credit, amount outstanding | 11,400,000 | 12,600,000 | 11,400,000 | ||||||
Internal Revenue Service (IRS) [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Operating loss carryforwards | $219,200,000 | 219,200,000 | |||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Dollar Term E-1 Facility [Member] | Eurocurrency Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 3.50% | ||||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Dollar Term E-1 Facility [Member] | Base Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.50% | ||||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Euro Term E-1 Facility [Member] | Eurocurrency Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 3.75% | ||||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Euro Term E-1 Facility [Member] | Base Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.75% | ||||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Dollar Term E-2 Facility [Member] | Eurocurrency Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 3.00% | ||||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Dollar Term E-2 Facility [Member] | Base Rate [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.00% | ||||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility [Member] | Eurocurrency Rate [Member] | Minimum [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 1.00% | ||||||||
Debt Instrument Basis Spread on Variable Rate [Member] | Dollar Term E-1 Facility, Euro Term E-1 Facility and Dollar Term E-2 Facility [Member] | Base Rate [Member] | Minimum [Member] | |||||||||
Interest [Abstract] | |||||||||
Credit facility, basis spread on variable rate | 2.00% |
Derivative_Financial_Instrumen2
Derivative Financial Instruments and Fair Value Measurements - Derivative Financial Instruments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest Rate Protection [Abstract] | |||
Colalteral posted | $0 | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Cap [Member] | |||
Interest Rate Protection [Abstract] | |||
Derivative, Notional Amount | 1,600,000,000 | 1,600,000,000 | |
Cost of derivative | 2,200,000 | 2,200,000 | |
Derivative, Cap Interest Rate | 2.00% | 2.00% | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | |||
Interest Rate Protection [Abstract] | |||
Number of interest rate agreements held | 3 | 3 | |
Derivative, quarterly interest payments, receive rates, maximum | 1.25% | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Interest Rate Swap - 2.256%, effective December 31, 2013 [Member] | |||
Interest Rate Protection [Abstract] | |||
Derivative, Notional Amount | 487,667,000 | ||
Fixed Interest Rate | 2.26% | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Interest Rate Swap - 2.249%, effective December 31, 2013 [Member] | |||
Interest Rate Protection [Abstract] | |||
Derivative, Notional Amount | 487,667,000 | ||
Fixed Interest Rate | 2.25% | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Interest Rate Swap - 2.250%, effective December 31, 2013 [Member] | |||
Interest Rate Protection [Abstract] | |||
Derivative, Notional Amount | 487,667,000 | ||
Fixed Interest Rate | 2.25% | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Minimum [Member] | |||
Interest Rate Protection [Abstract] | |||
Notional amount decreases by quarter | 1,700,000 | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Maximum [Member] | |||
Interest Rate Protection [Abstract] | |||
Notional amount decreases by quarter | 56,400,000 | ||
Not Designated as Hedging Instrument [Member] | Foreign Currency Exchange Contracts [Member] | |||
Interest Rate Protection [Abstract] | |||
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Notional Amount | $0 | $14,300,000 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments and Fair Value Measurements - Fair Value and Balance Sheet Locations (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2008 |
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | $0 | $146,000 | |
Derivative liability, fair value | 22,003,000 | 32,820,000 | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other non-current assets [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | 0 | 0 | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Prepaid expenses and other [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | 0 | 0 | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other non-current liabilities [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability, fair value | 8,067,000 | 31,906,000 | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Accrued expenses and other [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability, fair value | 13,936,000 | 345,000 | |
Not Designated as Hedging Instrument [Member] | Foreign Currency Exchange Contracts [Member] | Prepaid expenses and other [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative asset, fair value | 0 | 146,000 | |
Not Designated as Hedging Instrument [Member] | Foreign Currency Exchange Contracts [Member] | Accrued expenses and other [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative liability, fair value | 0 | 569,000 | |
Senior Secured Notes [Member] | 10.5% Second Lien Senior Secured Notes due 2018 [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Interest rate on senior long-term debt | 10.50% | ||
Convertible Senior Notes [Member] | 3.25% Convertible Senior Notes due 2015 [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Interest rate on senior long-term debt | 3.25% | ||
Senior Unsecured Notes [Member] | 12.5% Senior Unsecured Notes due 2019 [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Interest rate on senior long-term debt | 12.50% | ||
Senior Secured Credit Facility [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Long-term Debt, Fair Value | 2,501,000,000 | 2,615,000,000 | |
Fixed Rate Long-Term Debt [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Long-term Debt, Fair Value | $2,584,000,000 | $2,694,000,000 |
Derivative_Financial_Instrumen4
Derivative Financial Instruments and Fair Value Measurements - Gain (Loss) on Derivatives (Details) (Not Designated as Hedging Instrument [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative not designated as hedging instruments | ($5,183) | $1,576 | ($31,433) |
Interest Rate Swap [Member] | Interest Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative not designated as hedging instruments | -5,245 | 2,618 | -25,486 |
Interest Rate Cap [Member] | Interest Expense [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative not designated as hedging instruments | 0 | -9 | -1,583 |
Foreign Currency Exchange Contracts [Member] | Foreign Currency Gain (Loss) [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative not designated as hedging instruments | $62 | ($1,033) | ($4,364) |
Leasing_Obligations_Narrative_
Leasing Obligations - Narrative (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Leases, Operating [Abstract] | |||
Rental expense for operating leases | $29.70 | $27.80 | $43 |
Equipment [Member] | |||
Leases, Capital [Abstract] | |||
Capital leases, expiration period | 3 years | ||
Gross amount of equipment under capital leases | 2.6 | 2.7 | |
Accumulated depreciation of equipment under capital leases | $1.70 | $1.20 | |
Leases, Operating [Abstract] | |||
Operating Leases, Expiration Period | 20 years |
Leasing_Obligations_Schedule_o
Leasing Obligations - Schedule of Future Minimum Lease Payments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Capital Leases | |
2015 | $526 |
2016 | 394 |
2017 | 0 |
2018 | 0 |
2019 | 0 |
Thereafter | 0 |
Total minimum lease payments | 920 |
Less amount representing interest | -66 |
Present value of net minimum capital lease payments | 854 |
Less current portion | -488 |
Obligations under capital leases, excluding current installments | 366 |
Operating Leases | |
2015 | 22,387 |
2016 | 14,947 |
2017 | 11,745 |
2018 | 8,918 |
2019 | 6,727 |
Thereafter | 28,587 |
Total minimum lease payments | $93,311 |
Income_Taxes_Benefit_Schedule_
Income Taxes (Benefit) - Schedule of Income before Income Tax, Domestic and Foreign (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes [Line Items] | |||
U.S. | ($515,976) | ($845,261) | ($492,869) |
Non-U.S. | 161,335 | 133,578 | 259,122 |
Earnings (loss) before income taxes, total | -354,641 | -711,683 | -233,747 |
Earnings (loss) from discontinued operations before income taxes | 7,436 | -5,800 | 144,136 |
Earnings (loss) from continuing operations before income taxes (benefit) | ($362,077) | ($705,883) | ($377,883) |
Income_Taxes_Benefit_Schedule_1
Income Taxes (Benefit) - Schedule of Components of Income Tax Expense (Benefit) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes [Line Items] | |||
Current, U.S. Federal | $18,149 | $16,777 | $17,693 |
Current, U.S. State | 2,220 | 8,162 | 3,148 |
Current, Non-U.S. | 14,633 | 9,125 | 13,218 |
Total current expense | 35,002 | 34,064 | 34,059 |
Deferred, U.S. Federal | -138,046 | -158,735 | -104,476 |
Deferred, U.S. State | -19,998 | -26,383 | -19,900 |
Deferred, Non-U.S. | -1,126 | -1,971 | -2,013 |
Total deferred tax expense (benefit) | -159,170 | -187,089 | -126,389 |
Income tax expense (benefit) | -124,168 | -153,025 | -92,330 |
Income tax expense (benefit) related to discontinued operations | 2,863 | -2,233 | 55,493 |
Income tax expense (benefit) related to continuing operations | ($127,031) | ($150,792) | ($147,823) |
Income_Taxes_Benefit_Schedule_2
Income Taxes (Benefit) - Schedule of Effective Inome Tax Rate Reconciliation (Details) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Income Taxes [Line Items] | ||||||
Computed expected tax rate | 35.00% | [1] | 35.00% | [1] | 35.00% | [1] |
State income taxes, net of federal benefit | 3.40% | [1] | 1.70% | [1] | 3.80% | [1] |
Non-deductible items | -0.10% | [1] | -0.90% | [1] | -0.50% | [1] |
Effect of international operations | -4.40% | [1] | -1.50% | [1] | 0.10% | [1] |
Section 199 production deduction | 0.80% | [1] | 0.20% | [1] | 0.50% | [1] |
Research and development credit | 0.10% | [1] | 0.30% | [1] | 0.00% | [1] |
Goodwill Impairment | 0.00% | [1] | -13.40% | [1] | 0.00% | [1] |
Other, net | 0.20% | [1] | 0.10% | [1] | 0.60% | [1] |
Effective income tax rate, before discontinued operations | 35.00% | [1] | 21.50% | [1] | 39.50% | [1] |
Change in rate related to discontinued operations | 0.10% | -0.10% | -0.40% | |||
Effective tax rate related to continuing operations | 35.10% | [1] | 21.40% | [1] | 39.10% | [1] |
[1] | The years ended December 31, 2014, 2013 and 2012 include a loss before income tax benefit. The consolidated effective income tax rates represent adjustments to the computed “expected†income tax benefit rate for the period. Therefore, negative percentages represent reductions to the income tax benefit rate. |
Income_Taxes_Benefit_Schedule_3
Income Taxes (Benefit) - Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Tax Assets [Abstract] | ||
Non-U.S. tax credit | $76,320,000 | $67,765,000 |
U.S. research and development tax credit | 978,000 | 0 |
Net operating loss | 100,772,000 | 67,229,000 |
Accounts receivable | -1,468,000 | 9,377,000 |
Non-U.S. net operating loss carry forwards | 36,904,000 | 23,259,000 |
Accrued liabilities | 87,412,000 | 12,156,000 |
Deferred non-U.S. tax asset | 43,864,000 | 48,223,000 |
Accrued interest | 14,686,000 | 20,296,000 |
Disallowed Interest carry forward | 106,860,000 | 52,407,000 |
Unrealized foreign exchange currency loss, net | 0 | 371,000 |
Inventory | 9,717,000 | 2,124,000 |
Other | 891,000 | 618,000 |
Total gross deferred tax assets | 476,936,000 | 303,825,000 |
Less: valuation allowances | -82,299,000 | -55,944,000 |
Net deferred tax assets | 394,637,000 | 247,881,000 |
Deferred Tax Liabilities [Abstract] | ||
Intangible assets, amortizable | -384,485,000 | -447,286,000 |
Intangible assets, indefinite-lived | -454,779,000 | -455,417,000 |
Loan Fees | -30,751,000 | -31,343,000 |
U.S tax on non-U.S. earnings | -256,039,000 | -190,665,000 |
Deferred U.S.state tax liability | 3,556,000 | -831,000 |
Unrealized foreign exchange currency gain, net | -19,883,000 | 0 |
Depreciation | -56,865,000 | -70,870,000 |
Other | -6,489,000 | -2,372,000 |
Total gross deferred tax liabilities | -1,205,735,000 | -1,198,784,000 |
Net deferred tax liability | -811,098,000 | -950,903,000 |
Less: current deferred tax asset | -63,025,000 | -23,621,000 |
Less: non-current deferred tax asset | -31,692,000 | -31,459,000 |
Less: current deferred tax liability | 113,658,000 | 2,199,000 |
Non-current deferred tax liability | -792,157,000 | -1,003,784,000 |
Deferred Tax Assets, Unrealized Tax Credit Carryforwards, Foreign | 78,600,000 | |
Internal Revenue Service (IRS) [Member] | ||
Deferred Tax Liabilities [Abstract] | ||
Operating loss carryforwards | 219,200,000 | |
State [Member] | ||
Deferred Tax Liabilities [Abstract] | ||
Operating loss carryforwards | 545,900,000 | |
Operating loss carryforwards, valuation allowance | 36,700,000 | |
Net increase in valuation allowance | 26,300,000 | |
Foreign [Member] | ||
Deferred Tax Liabilities [Abstract] | ||
Operating loss carryforwards | 154,900,000 | |
Operating loss carryforwards, expiration period | 10 years | |
Operating loss carryforwards, valuation allowance | $45,600,000 | |
Minimum [Member] | ||
Deferred Tax Liabilities [Abstract] | ||
Operating loss carryforwards, expiration period | 3 years | |
Maximum [Member] | ||
Deferred Tax Liabilities [Abstract] | ||
Operating loss carryforwards, expiration period | 20 years |
Income_Taxes_Benefit_Reconcili
Income Taxes (Benefit) - Reconciliation of the allowance for uncertain tax positions (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $41,694,000 | $33,634,000 | |
Net additions for tax positions of prior years | 10,683,000 | 6,644,000 | |
Net reductions for tax positions of prior years | -18,331,000 | -1,488,000 | |
Net additions on positions related to the current year | 6,494,000 | 5,056,000 | |
Reductions resulting from a lapse of the applicable statute of limitation | -724,000 | -2,152,000 | |
Balance at end of year | 39,816,000 | 41,694,000 | 33,634,000 |
Accrued interest and penalties | 8,341,000 | 11,988,000 | |
Unrecognized tax benefit, ASU 2013-11 reclass | -14,857,000 | 0 | |
Gross unrecognized income tax benefit | 33,300,000 | 53,682,000 | |
Unrecognized tax benefits that would favorably impact effective tax rate | 26,200,000 | 30,500,000 | |
Recognized increase of net interest and penalties | -3,600,000 | 1,200,000 | |
Increase associated with with ongoing accruals | 900,000 | 1,800,000 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Decrease Resulting from Release of Accruals | 4,500,000 | 600,000 | |
Lower bound that unrecognized tax benefits could decrease by | 500,000 | ||
Income taxes paid | $24,900,000 | $36,300,000 | $28,100,000 |
Equity_Details
Equity (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Line Items] | |
Limited partners' percentage of ownership | 100.00% |
Incentive_Compensation_Plans_E
Incentive Compensation Plans - Equity-Based Compensation Expense and 401(k) Recognized Costs (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Pre-tax equity-based compensation expense | $4,033,000 | $2,925,000 | $2,069,000 |
Total equity-based compensation expense, net of tax | 4,033,000 | 2,925,000 | 2,069,000 |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | 0 | 0 | 0 |
401(k) recognized costs | 13,300,000 | 12,200,000 | 14,700,000 |
Rental Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Pre-tax equity-based compensation expense | 106,000 | 52,000 | 2,000 |
Cost of Sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Pre-tax equity-based compensation expense | 105,000 | 113,000 | 88,000 |
Selling, General and Adminstrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Pre-tax equity-based compensation expense | $3,822,000 | $2,760,000 | $1,979,000 |
Incentive_Compensation_Plans_E1
Incentive Compensation Plans - Equity-Based Plans (Details) (USD $) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 14, 2011 | Nov. 11, 2011 | |
Weighted Average Exercise Price [Roll Forward] | |||||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $0 | $0 | $0 | ||
Appreciation Rights [Member] | Appreciation Rights Plan [Member] | |||||
Equity-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards authorized | 4,172,000 | ||||
Weighted average assumptions: | |||||
Expected stock volatility | 39.00% | 43.00% | 56.00% | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% | ||
Risk-free interest rate | 0.50% | 0.60% | 0.90% | ||
Expected life (years) | 2 years | 3 years | 4 years | ||
Profits Interest Unit and Appreciation Rights Activity [Roll Forward] | |||||
Outstanding, beginning of period | 1,574,000 | ||||
Granted | 1,364,000 | ||||
Exercised | 0 | ||||
Forfeited/Expired | -690,000 | ||||
Outstanding, end of period | 2,248,000 | 1,574,000 | |||
Exercisable | 0 | ||||
Weighted Average Exercise Price [Roll Forward] | |||||
Weighted average exercise price, outstanding, beginning of period (in usd per unit) | $6.50 | ||||
Weighted average exercise price, granted (in usd per unit) | $7.95 | ||||
Weighted average exercise price, exercised (in usd per unit) | $0 | ||||
Weighted average exercise price, forfeited/expired (in usd per unit) | $6.69 | ||||
Weighted average exercise price, outstanding, end of period (in usd per unit) | $7.32 | $6.50 | |||
Weighted average exercise price, exercisable (in usd per unit) | $0 | ||||
Weighted Average Remaining Contractual Term (years) | 8 years 6 months 22 days | 8 years 11 months 15 days | |||
Aggregate Intrinsic Value, exercisable | 0 | ||||
Appreciation Rights - Service-Based [Member] | Appreciation Rights Plan [Member] | |||||
Profits Interest Unit and Appreciation Rights Activity [Roll Forward] | |||||
Outstanding, beginning of period | 787,000 | ||||
Granted | 682,000 | ||||
Exercised | 0 | ||||
Forfeited/Expired | -345,000 | ||||
Outstanding, end of period | 1,124,000 | 787,000 | |||
Exercisable | 0 | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||
Weighted average grant date fair value, granted (in usd per unit) | $1.66 | $1.37 | $0.81 | ||
Weighted Average Exercise Price [Roll Forward] | |||||
Total unrecognized compensation cost, net of estimated forfeitures | 1,400,000 | ||||
Unrecognized compensation cost, recognition period (in years) | 2 years 7 months 25 days | ||||
Profits Interest Units - Service-Based [Member] | Executive Plan [Member] | |||||
Equity-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | 4 years | 4 years | ||
Profits interest distribution threshold | 8.11 | 7.4 | 5 | ||
Profits Interest Unit and Appreciation Rights Activity [Roll Forward] | |||||
Outstanding, beginning of period | 8,562,000 | ||||
Granted | 2,054,000 | ||||
Exercised | -947,000 | ||||
Forfeited/Expired | -1,698,000 | ||||
Outstanding, end of period | 7,971,000 | 8,562,000 | |||
Exercisable | 4,583,000 | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||
Weighted average grant date fair value, granted (in usd per unit) | $1.62 | $2.30 | $1.33 | ||
Weighted Average Exercise Price [Roll Forward] | |||||
Total unrecognized compensation cost, net of estimated forfeitures | 4,100,000 | ||||
Unrecognized compensation cost, recognition period (in years) | 2 years 4 months 13 days | ||||
Profits Interest Units - Performance-Based [Member] | Executive Plan [Member] | |||||
Profits Interest Unit and Appreciation Rights Activity [Roll Forward] | |||||
Outstanding, beginning of period | 7,922,000 | ||||
Granted | 2,054,000 | ||||
Exercised | 0 | ||||
Forfeited/Expired | -3,123,000 | ||||
Outstanding, end of period | 6,853,000 | 7,922,000 | |||
Exercisable | 0 | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||
Weighted average grant date fair value, granted (in usd per unit) | $1.42 | $1.98 | $1.15 | ||
Weighted Average Exercise Price [Roll Forward] | |||||
Total unrecognized compensation cost, net of estimated forfeitures | 7,900,000 | ||||
Profits Interest Units [Member] | Executive Plan [Member] | |||||
Equity-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of awards authorized | 23,641,333.33 | ||||
Weighted average assumptions: | |||||
Expected stock volatility | 39.00% | 43.00% | 56.00% | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% | ||
Risk-free interest rate | 0.50% | 0.60% | 0.90% | ||
Expected life (years) | 2 years | 3 years | 4 years | ||
Profits Interest Unit and Appreciation Rights Activity [Roll Forward] | |||||
Outstanding, beginning of period | 16,484,000 | ||||
Granted | 4,108,000 | ||||
Exercised | -947,000 | ||||
Forfeited/Expired | -4,821,000 | ||||
Outstanding, end of period | 14,824,000 | 16,484,000 | |||
Exercisable | 4,583,000 | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||
Weighted average grant date fair value, outstanding, beginning of period (in usd per unit) | $1.50 | ||||
Weighted average grant date fair value, granted (in usd per unit) | $1.52 | ||||
Weighted average grant date fair value, exercised (in usd per unit) | $1.45 | ||||
Weighted average grant date fair value, forfeited/expired (in usd per unit) | $1.75 | ||||
Weighted average grant date fair value, outstanding, end of period (in usd per unit) | $1.42 | $1.50 | |||
Weighted average grant date fair value, exercisable (in usd per unit) | $1.49 | ||||
Appreciation Rights - Performance-Based [Member] | Appreciation Rights Plan [Member] | |||||
Profits Interest Unit and Appreciation Rights Activity [Roll Forward] | |||||
Outstanding, beginning of period | 787,000 | ||||
Granted | 682,000 | ||||
Exercised | 0 | ||||
Forfeited/Expired | -345,000 | ||||
Outstanding, end of period | 1,124,000 | 787,000 | |||
Exercisable | 0 | ||||
Weighted Average Grant Date Fair Value [Roll Forward] | |||||
Weighted average grant date fair value, granted (in usd per unit) | $1.46 | $1.35 | $0.81 | ||
Weighted Average Exercise Price [Roll Forward] | |||||
Total unrecognized compensation cost, net of estimated forfeitures | $1,800,000 |
Other_Comprehensive_Income_Los2
Other Comprehensive Income (Loss) (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Other Comprehenisve Income Loss, Net of Tax [Roll Forward] | ||||
Balances, Beginning | ($2,143) | |||
Foreign currency translation adjustment, net of tax benefit (expense) of $(753) in 2014, $233 in 2013, and $(369) in 2012 | -5,690 | -3,867 | 5,324 | |
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 0 | 2,241 | 0 | |
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | -2,241 | 0 | 0 | |
Reclassification adjustment out of accumulated other comprehensive income (loss) | 0 | 0 | ||
Balances, Ending | -10,074 | -2,143 | ||
Accumulated Foreign Currency Translation Adjustment [Member] | ||||
Other Comprehenisve Income Loss, Net of Tax [Roll Forward] | ||||
Balances, Beginning | -4,384 | -517 | -5,841 | |
Foreign currency translation adjustment, net of tax benefit (expense) of $(753) in 2014, $233 in 2013, and $(369) in 2012 | -5,690 | -3,867 | 5,324 | |
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 0 | |||
Balances, Ending | -10,074 | -4,384 | -517 | |
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Other Comprehenisve Income Loss, Net of Tax [Roll Forward] | ||||
Balances, Beginning | -2,143 | -517 | -5,841 | |
Foreign currency translation adjustment, net of tax benefit (expense) of $(753) in 2014, $233 in 2013, and $(369) in 2012 | -5,690 | -3,867 | 5,324 | |
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 0 | 2,241 | ||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | -2,241 | |||
Balances, Ending | -10,074 | -2,143 | -517 | |
Accumulated Net Unrealized Investment Gain (Loss) [Member] | ||||
Other Comprehenisve Income Loss, Net of Tax [Roll Forward] | ||||
Balances, Beginning | 2,241 | 0 | 0 | |
Unrealized investment gain, net of tax expense of $1,403 in 2013 | 2,241 | |||
Reclassification of realized investment gain included in net loss, net of tax expense of $1,403 in 2014 | -2,241 | |||
Balances, Ending | $0 | $2,241 | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 01, 2013 | |
Loss Contingencies [Line Items] | ||||
Demand for Arbitration Requested Damages | $100,000,000 | |||
Other non-current liabilities | 163,258,000 | 40,432,000 | ||
Accrued expenses and other | 343,484,000 | 328,975,000 | ||
Wake Forest settlement | 198,578,000 | 0 | 0 | |
Unrecorded Unconditional Purchase Obligation | 50,600,000 | |||
LifeNet [Member] | ||||
Loss Contingencies [Line Items] | ||||
Litigation Settlement, Expense | 34,700,000 | |||
Other non-current liabilities | 34,700,000 | |||
Wake Forest Settlement [Member] | ||||
Loss Contingencies [Line Items] | ||||
Other non-current liabilities | 104,300,000 | |||
Accrued expenses and other | $82,700,000 | $63,200,000 | ||
Alloderm [Member] | LifeCell [Member] | Damages from Product Defects [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of pending lawsuits | 335 | |||
Repliform [Member] | LifeCell [Member] | Damages from Product Defects [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of pending lawsuits | 180 | |||
Cases Filed in Consolidated Docket [Member] | Repliform [Member] | LifeCell [Member] | Damages from Product Defects [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of pending lawsuits | 175 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (Managers [Member], USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Managers [Member] | |||
Related Party Transaction [Line Items] | |||
Management fees paid | $5.10 | $8.70 | $5.10 |
Expected management fees | $5.10 |
Segment_and_Geographic_Informa2
Segment and Geographic Information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Countries | Countries | |||||||||||||
segment | segment | |||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Number of countries in which entity rents or sales products | 75 | 75 | ||||||||||||
Number of Reportable Operating Segments | 2 | 2 | ||||||||||||
Number of Global Business Units | 2 | 2 | ||||||||||||
Total revenue | $482,733,000 | $481,793,000 | $459,178,000 | $442,635,000 | $462,382,000 | $432,960,000 | $426,193,000 | $411,366,000 | $1,866,339,000 | $1,732,901,000 | $1,729,503,000 | |||
Operating earnings (loss) | 55,299,000 | 88,347,000 | -142,123,000 | 32,805,000 | 57,769,000 | -370,355,000 | 11,456,000 | 36,536,000 | 34,328,000 | -264,594,000 | 163,825,000 | |||
Non-allocated costs: | ||||||||||||||
General headquarter expense | -9,516,000 | [1] | -55,044,000 | [1] | -19,928,000 | [1] | ||||||||
Equity-based compensation | -4,033,000 | -2,925,000 | -2,069,000 | |||||||||||
Business optimization and transaction-related expenses | -150,125,000 | [2] | -144,253,000 | [2] | -101,191,000 | [2] | ||||||||
Acquired intangible asset amortization | -194,433,000 | [3] | -188,571,000 | [3] | -220,984,000 | [3] | ||||||||
Wake Forest settlement | -198,578,000 | 0 | 0 | |||||||||||
Impairment of goodwill and intangible assets | 0 | -443,400,000 | [4] | 0 | ||||||||||
Total non-allocated costs | -556,685,000 | -834,193,000 | -344,172,000 | |||||||||||
Write off of in process research and development costs | 0 | 16,885,000 | 0 | |||||||||||
Fixed asset and inventory impairment | 0 | 30,580,000 | 22,116,000 | |||||||||||
Goodwill, Impairment Loss | 272,200,000 | |||||||||||||
Advanced Wound Therapeutics [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 1,420,278,000 | 1,287,387,000 | 1,312,258,000 | |||||||||||
Operating earnings (loss) | 455,666,000 | [5] | 443,850,000 | [5] | 398,066,000 | [5] | ||||||||
Non-allocated costs: | ||||||||||||||
Write off of in process research and development costs | 16,700,000 | |||||||||||||
Regenerative Medicine [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 428,089,000 | 442,174,000 | 417,245,000 | |||||||||||
Operating earnings (loss) | 132,904,000 | 125,112,000 | 109,931,000 | |||||||||||
Non-allocated costs: | ||||||||||||||
Goodwill, Impairment Loss | 272,200,000 | |||||||||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 171,200,000 | |||||||||||||
Other [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 17,972,000 | [6] | 3,340,000 | [6] | 0 | [6] | ||||||||
Operating earnings (loss) | 2,443,000 | [6] | 637,000 | [6] | 0 | |||||||||
Domestic [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 0 | 0 | 0 | |||||||||||
United States [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | 1,329,306,000 | 1,321,517,000 | 1,335,043,000 | |||||||||||
Other Foreign Country [Member] | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Total revenue | $537,033,000 | $411,384,000 | $394,460,000 | |||||||||||
[1] | 2013 includes a $30.6 million fixed asset impairment charge. | |||||||||||||
[2] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOmExMDg3M2UyNjgwYzQ0NDE5ZWUxMzYyYTk3YWYxMmVlfFRleHRTZWxlY3Rpb246RDFGQzlDQTAzMkNENDc2NjlDMkZCQzY4QUI3MjczMkUM} | |||||||||||||
[3] | Represents amortization of acquired intangible assets related to our Merger in November 2011 and our acquisition of Systagenix in October 2013. | |||||||||||||
[4] | During 2013, we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. These amounts have been excluded from Regenerative Medicine operating earnings as management excludes these charges from operating earnings when making operating decisions about the business. | |||||||||||||
[5] | 2013 includes write-offs of $16.7 million of other intangible assets due primarily to the discontinuation of certain AWT projects. 2012 includes $22.1 million of impairment charges associated with certain production equipment at our Athlone manufacturing plant and inventory associated with our V.A.C.Via product. | |||||||||||||
[6] | Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England for the period subsequent to our acquisition of Systagenix as discussed in Note 2. |
Segment_and_Geographic_Informa3
Segment and Geographic Information Schedule of depreciation and other amortization (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | |||
Depreciation and other amortization | $303,905,000 | $335,959,000 | $436,370,000 |
Advanced Wound Therapeutics [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and other amortization | 231,296,000 | 261,348,000 | 324,945,000 |
Cost of sales associated with the preliminary purchase accounting adjustments related to the step up in value of inventory | 6,700,000 | 3,200,000 | 5,700,000 |
Regenerative Medicine [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and other amortization | 70,882,000 | 68,514,000 | 70,730,000 |
Cost of sales associated with the preliminary purchase accounting adjustments related to the step up in value of inventory | 19,700,000 | ||
Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and other amortization | $1,727,000 | $6,097,000 | $40,695,000 |
Segment_and_Geographic_Informa4
Segment and Geographic Information Information on segment assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $7,000,713 | $7,272,645 | $7,574,764 |
Advanced Wound Therapeutics [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 5,070,845 | 5,274,625 | 4,966,687 |
Regenerative Medicine [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 1,539,057 | 1,574,315 | 2,039,137 |
Other [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $390,811 | $423,705 | $568,940 |
Segment_and_Geographic_Informa5
Segment and Geographic Information Schedule of gross capital expenditures (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||
Gross capital expenditures | $66,584 | $80,911 | $91,567 |
Advanced Wound Therapeutics [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross capital expenditures | 21,517 | 36,910 | 15,731 |
Regenerative Medicine [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross capital expenditures | 7,057 | 17,862 | 26,240 |
Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Gross capital expenditures | $38,010 | $26,139 | $49,596 |
Segment_and_Geographic_Informa6
Segment and Geographic Information Schedule of information on the geographical location of select financial information (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Total revenue | $482,733 | $481,793 | $459,178 | $442,635 | $462,382 | $432,960 | $426,193 | $411,366 | $1,866,339 | $1,732,901 | $1,729,503 | |||||
Long-Lived Assets | 288,048 | [1] | 333,725 | [1] | 288,048 | [1] | 333,725 | [1] | 388,482 | [1] | ||||||
Domestic [Member] | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Total revenue | 0 | 0 | 0 | |||||||||||||
Long-Lived Assets | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | 0 | [1] | ||||||
United States [Member] | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Total revenue | 1,329,306 | 1,321,517 | 1,335,043 | |||||||||||||
Long-Lived Assets | 198,754 | [1] | 224,789 | [1] | 198,754 | [1] | 224,789 | [1] | 287,700 | [1] | ||||||
Other Foreign Country [Member] | ||||||||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||||||||||
Total revenue | 537,033 | 411,384 | 394,460 | |||||||||||||
Long-Lived Assets | $89,294 | [1] | $108,936 | [1] | $89,294 | [1] | $108,936 | [1] | $100,782 | [1] | ||||||
[1] | Long-lived assets exclude intangible assets. |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Data [Line Items] | |||||||||||
Revenue | $482,733 | $481,793 | $459,178 | $442,635 | $462,382 | $432,960 | $426,193 | $411,366 | $1,866,339 | $1,732,901 | $1,729,503 |
Gross profit (loss) | 325,998 | 314,413 | 293,207 | 276,596 | 301,873 | 285,082 | 280,060 | 260,540 | 1,210,214 | 1,127,555 | 1,046,379 |
Operating earnings (loss) | 55,299 | 88,347 | -142,123 | 32,805 | 57,769 | -370,355 | 11,456 | 36,536 | 34,328 | -264,594 | 163,825 |
Earnings (loss) from continuing operations | -30,928 | -3,235 | -153,823 | -47,060 | -51,984 | -398,607 | -61,747 | -42,753 | -235,046 | -555,091 | -230,060 |
Earnings (loss) from discontinued operations, net of tax | 1,392 | 1,398 | 1,106 | 677 | -751 | 46 | -828 | -2,034 | 4,573 | -3,567 | 88,643 |
Net loss | ($29,536) | ($1,837) | ($152,717) | ($46,383) | ($52,735) | ($398,561) | ($62,575) | ($44,787) | ($230,473) | ($558,658) | ($141,417) |
Guarantor_Condensed_Consolidat2
Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Balance Sheet (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Current assets: | ||||
Cash and cash equivalents | $183,541 | $206,949 | $383,150 | $215,426 |
Accounts receivable, net | 370,483 | 407,578 | ||
Inventories, net | 178,222 | 181,567 | ||
Deferred income taxes | 63,025 | 23,621 | ||
Prepaid expenses and other | 27,563 | 53,161 | ||
Intercompany receivables | 0 | 0 | ||
Total current assets | 822,834 | 872,876 | ||
Net property, plant and equipment | 288,048 | 333,725 | ||
Debt issuance costs, net | 77,896 | 102,054 | ||
Deferred income taxes | 31,692 | 31,459 | ||
Goodwill | 3,378,298 | 3,378,661 | 3,479,775 | |
Identifiable intangible assets, net | 2,397,251 | 2,549,201 | ||
Other non-current assets | 4,694 | 4,669 | ||
Intercompany loan receivables | 0 | 0 | ||
Intercompany investments | 0 | 0 | ||
Total assets | 7,000,713 | 7,272,645 | 7,574,764 | |
Current liabilities: | ||||
Accounts payable | 51,827 | 50,316 | ||
Accrued expenses and other | 343,484 | 328,975 | ||
Intercompany payables | 0 | 0 | ||
Current installments of long-term debt | 25,721 | 26,311 | ||
Income taxes payable | 1,305 | 3,368 | ||
Deferred income taxes | 113,658 | 2,199 | ||
Total current liabilities | 535,995 | 411,169 | ||
Long-term debt, net of current installments and discount | 4,815,290 | 4,865,503 | ||
Non-current tax liabilities | 33,300 | 53,682 | ||
Deferred income taxes | 792,157 | 1,003,784 | ||
Other non-current liabilities | 163,258 | 40,432 | ||
Intercompany loan payables | 0 | 0 | ||
Total liabilities | 6,340,000 | 6,374,570 | ||
Equity: | ||||
Total equity | 660,713 | 898,075 | 1,457,396 | 1,593,444 |
Total liabilities and shareholders' equity | 7,000,713 | 7,272,645 | ||
Parent Company [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 398 | 398 | 398 | 411 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Prepaid expenses and other | 0 | 0 | ||
Intercompany receivables | 166 | 166 | ||
Total current assets | 564 | 564 | ||
Net property, plant and equipment | 0 | 0 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Identifiable intangible assets, net | 0 | 0 | ||
Other non-current assets | 0 | 0 | ||
Intercompany loan receivables | 0 | 0 | ||
Intercompany investments | 667,530 | 901,902 | ||
Total assets | 668,094 | 902,466 | ||
Current liabilities: | ||||
Accounts payable | 245 | 0 | ||
Accrued expenses and other | 0 | 0 | ||
Intercompany payables | 6,441 | 4,110 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Total current liabilities | 6,686 | 4,110 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 695 | 281 | ||
Intercompany loan payables | 0 | 0 | ||
Total liabilities | 7,381 | 4,391 | ||
Equity: | ||||
Total equity | 660,713 | 898,075 | ||
Total liabilities and shareholders' equity | 668,094 | 902,466 | ||
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 41,027 | 87,771 | 276,788 | 142,652 |
Accounts receivable, net | 179,872 | 184,723 | ||
Inventories, net | 73,904 | 54,809 | ||
Deferred income taxes | 52,868 | 14,991 | ||
Prepaid expenses and other | 11,106 | 35,832 | ||
Intercompany receivables | 1,854,033 | 1,687,528 | ||
Total current assets | 2,212,810 | 2,065,654 | ||
Net property, plant and equipment | 315,691 | 311,122 | ||
Debt issuance costs, net | 77,896 | 102,054 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 2,483,240 | 2,483,240 | ||
Identifiable intangible assets, net | 299,575 | 361,640 | ||
Other non-current assets | 1,161 | 715 | ||
Intercompany loan receivables | 760,000 | 990,972 | ||
Intercompany investments | 360,292 | 432,884 | ||
Total assets | 6,510,665 | 6,748,281 | ||
Current liabilities: | ||||
Accounts payable | 16,298 | 15,266 | ||
Accrued expenses and other | 218,793 | 185,790 | ||
Intercompany payables | 1,181,383 | 852,892 | ||
Current installments of long-term debt | 25,721 | 26,311 | ||
Income taxes payable | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Total current liabilities | 1,442,195 | 1,080,259 | ||
Long-term debt, net of current installments and discount | 4,815,290 | 4,865,503 | ||
Non-current tax liabilities | 9,404 | 28,850 | ||
Deferred income taxes | 106,440 | 231,713 | ||
Other non-current liabilities | 113,368 | 38,667 | ||
Intercompany loan payables | 420,294 | 399,690 | ||
Total liabilities | 6,906,991 | 6,644,682 | ||
Equity: | ||||
Total equity | -396,326 | 103,599 | ||
Total liabilities and shareholders' equity | 6,510,665 | 6,748,281 | ||
Guarantor Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 1,499 | 118 | 0 | 0 |
Accounts receivable, net | 67,355 | 71,457 | ||
Inventories, net | 110,355 | 101,779 | ||
Deferred income taxes | 10,157 | 6,610 | ||
Prepaid expenses and other | 6,851 | 5,434 | ||
Intercompany receivables | 2,432,299 | 2,326,181 | ||
Total current assets | 2,628,516 | 2,511,579 | ||
Net property, plant and equipment | 69,801 | 80,963 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 732,138 | 732,771 | ||
Identifiable intangible assets, net | 1,788,661 | 1,829,452 | ||
Other non-current assets | 186 | 192 | ||
Intercompany loan receivables | 429,856 | 404,688 | ||
Intercompany investments | 223,581 | 372,093 | ||
Total assets | 5,872,739 | 5,931,738 | ||
Current liabilities: | ||||
Accounts payable | 14,463 | 14,929 | ||
Accrued expenses and other | 244,829 | 246,977 | ||
Intercompany payables | 2,634,149 | 2,559,407 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | 3,368 | ||
Deferred income taxes | 113,658 | 0 | ||
Total current liabilities | 3,007,099 | 2,824,681 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 6,203 | 4,284 | ||
Deferred income taxes | 637,777 | 718,930 | ||
Other non-current liabilities | 48,172 | 334 | ||
Intercompany loan payables | 760,000 | 780,000 | ||
Total liabilities | 4,459,251 | 4,328,229 | ||
Equity: | ||||
Total equity | 1,413,488 | 1,603,509 | ||
Total liabilities and shareholders' equity | 5,872,739 | 5,931,738 | ||
Non-Guarantor Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 140,617 | 118,662 | 105,964 | 72,363 |
Accounts receivable, net | 123,256 | 151,398 | ||
Inventories, net | 93,765 | 101,751 | ||
Deferred income taxes | 0 | 2,020 | ||
Prepaid expenses and other | 247,606 | 321,427 | ||
Intercompany receivables | 48,267 | 21,241 | ||
Total current assets | 653,511 | 716,499 | ||
Net property, plant and equipment | 164,838 | 223,987 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 31,692 | 31,459 | ||
Goodwill | 162,920 | 162,650 | ||
Identifiable intangible assets, net | 309,015 | 358,109 | ||
Other non-current assets | 94,247 | 94,662 | ||
Intercompany loan receivables | 0 | 0 | ||
Intercompany investments | 0 | 0 | ||
Total assets | 1,416,223 | 1,587,366 | ||
Current liabilities: | ||||
Accounts payable | 20,821 | 20,121 | ||
Accrued expenses and other | 74,380 | 77,843 | ||
Intercompany payables | 512,792 | 618,707 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 1,305 | 0 | ||
Deferred income taxes | 0 | 2,199 | ||
Total current liabilities | 609,298 | 718,870 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 17,693 | 20,548 | ||
Deferred income taxes | 47,940 | 53,141 | ||
Other non-current liabilities | 1,023 | 1,150 | ||
Intercompany loan payables | 9,562 | 215,970 | ||
Total liabilities | 685,516 | 1,009,679 | ||
Equity: | ||||
Total equity | 730,707 | 577,687 | ||
Total liabilities and shareholders' equity | 1,416,223 | 1,587,366 | ||
Eliminations [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | ||
Inventories, net | -99,802 | -76,772 | ||
Deferred income taxes | 0 | 0 | ||
Prepaid expenses and other | -238,000 | -309,532 | ||
Intercompany receivables | -4,334,765 | -4,035,116 | ||
Total current assets | -4,672,567 | -4,421,420 | ||
Net property, plant and equipment | -262,282 | -282,347 | ||
Debt issuance costs, net | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Identifiable intangible assets, net | 0 | 0 | ||
Other non-current assets | -90,900 | -90,900 | ||
Intercompany loan receivables | -1,189,856 | -1,395,660 | ||
Intercompany investments | -1,251,403 | -1,706,879 | ||
Total assets | -7,467,008 | -7,897,206 | ||
Current liabilities: | ||||
Accounts payable | 0 | 0 | ||
Accrued expenses and other | -194,518 | -181,635 | ||
Intercompany payables | -4,334,765 | -4,035,116 | ||
Current installments of long-term debt | 0 | 0 | ||
Income taxes payable | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Total current liabilities | -4,529,283 | -4,216,751 | ||
Long-term debt, net of current installments and discount | 0 | 0 | ||
Non-current tax liabilities | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other non-current liabilities | 0 | 0 | ||
Intercompany loan payables | -1,189,856 | -1,395,660 | ||
Total liabilities | -5,719,139 | -5,612,411 | ||
Equity: | ||||
Total equity | -1,747,869 | -2,284,795 | ||
Total liabilities and shareholders' equity | ($7,467,008) | ($7,897,206) |
Guarantor_Condensed_Consolidat3
Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Condensed Income Statements, Captions [Line Items] | ||||||||||||
Rental | $719,864 | $743,818 | $815,560 | |||||||||
Sales | 1,146,475 | 989,083 | 913,943 | |||||||||
Total revenue | 482,733 | 481,793 | 459,178 | 442,635 | 462,382 | 432,960 | 426,193 | 411,366 | 1,866,339 | 1,732,901 | 1,729,503 | |
Rental expenses | 332,762 | 353,504 | 438,752 | |||||||||
Cost of sales | 323,363 | 251,842 | 244,372 | |||||||||
Gross profit (loss) | 325,998 | 314,413 | 293,207 | 276,596 | 301,873 | 285,082 | 280,060 | 260,540 | 1,210,214 | 1,127,555 | 1,046,379 | |
Selling, general and administrative expenses | 713,554 | 684,601 | 589,858 | |||||||||
Research and development expenses | 69,321 | 75,577 | 71,712 | |||||||||
Acquired intangible asset amortization | 194,433 | 188,571 | 220,984 | |||||||||
Wake Forest settlement | 198,578 | 0 | 0 | |||||||||
Impairment of goodwill and intangible assets | 0 | 443,400 | [1] | 0 | ||||||||
Operating earnings (loss) | 55,299 | 88,347 | -142,123 | 32,805 | 57,769 | -370,355 | 11,456 | 36,536 | 34,328 | -264,594 | 163,825 | |
Non-operating intercompany transactions | 0 | 0 | 0 | |||||||||
Interest income and other | 3,667 | 1,602 | 829 | |||||||||
Interest expense | -412,733 | -419,877 | -466,622 | |||||||||
Loss on extinguishment of debt | 0 | -2,364 | -31,481 | |||||||||
Foreign currency gain (loss) | 17,844 | -22,226 | -13,001 | |||||||||
Derivative instruments gain (loss) | -5,183 | 1,576 | -31,433 | |||||||||
Earnings (loss) from continuing operations before income taxes (benefit) | -362,077 | -705,883 | -377,883 | |||||||||
Income tax expense (benefit) | -127,031 | -150,792 | -147,823 | |||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | -235,046 | -555,091 | -230,060 | |||||||||
Equity in earnings (loss) of subsidiaries | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations | -30,928 | -3,235 | -153,823 | -47,060 | -51,984 | -398,607 | -61,747 | -42,753 | -235,046 | -555,091 | -230,060 | |
Earnings (loss) from discontinued operations, net of tax | 1,392 | 1,398 | 1,106 | 677 | -751 | 46 | -828 | -2,034 | 4,573 | -3,567 | 88,643 | |
Net earnings (loss) | -29,536 | -1,837 | -152,717 | -46,383 | -52,735 | -398,561 | -62,575 | -44,787 | -230,473 | -558,658 | -141,417 | |
Total comprehensive income (loss) | -238,404 | -560,284 | -136,093 | |||||||||
Parent Company [Member] | ||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||
Rental | 0 | 0 | 0 | |||||||||
Sales | 0 | 0 | 0 | |||||||||
Total revenue | 0 | 0 | 0 | |||||||||
Rental expenses | 106 | 52 | 2 | |||||||||
Cost of sales | 105 | 113 | 88 | |||||||||
Gross profit (loss) | -211 | -165 | -90 | |||||||||
Selling, general and administrative expenses | 3,822 | 2,759 | 1,991 | |||||||||
Research and development expenses | 0 | 0 | 0 | |||||||||
Acquired intangible asset amortization | 0 | 0 | 0 | |||||||||
Wake Forest settlement | 0 | |||||||||||
Impairment of goodwill and intangible assets | 0 | |||||||||||
Operating earnings (loss) | -4,033 | -2,924 | -2,081 | |||||||||
Non-operating intercompany transactions | 0 | 0 | 0 | |||||||||
Interest income and other | 0 | 0 | 0 | |||||||||
Interest expense | 0 | 0 | 0 | |||||||||
Loss on extinguishment of debt | 0 | 0 | ||||||||||
Foreign currency gain (loss) | 0 | 0 | 0 | |||||||||
Derivative instruments gain (loss) | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations before income taxes (benefit) | -4,033 | -2,924 | -2,081 | |||||||||
Income tax expense (benefit) | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | -4,033 | -2,924 | -2,081 | |||||||||
Equity in earnings (loss) of subsidiaries | -226,440 | -555,734 | -139,336 | |||||||||
Earnings (loss) from continuing operations | -230,473 | -558,658 | -141,417 | |||||||||
Earnings (loss) from discontinued operations, net of tax | 0 | 0 | 0 | |||||||||
Net earnings (loss) | -230,473 | -558,658 | -141,417 | |||||||||
Total comprehensive income (loss) | -238,404 | -560,284 | -136,093 | |||||||||
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member] | ||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||
Rental | 606,031 | 608,256 | 654,372 | |||||||||
Sales | 292,573 | 295,530 | 292,303 | |||||||||
Total revenue | 898,604 | 903,786 | 946,675 | |||||||||
Rental expenses | 292,336 | 253,082 | 288,143 | |||||||||
Cost of sales | 314,129 | 296,788 | 240,146 | |||||||||
Gross profit (loss) | 292,139 | 353,916 | 418,386 | |||||||||
Selling, general and administrative expenses | 295,324 | 346,731 | 327,223 | |||||||||
Research and development expenses | 24,044 | 29,555 | 26,310 | |||||||||
Acquired intangible asset amortization | 61,995 | 80,042 | 102,954 | |||||||||
Wake Forest settlement | 198,578 | |||||||||||
Impairment of goodwill and intangible assets | 0 | |||||||||||
Operating earnings (loss) | -287,802 | -102,412 | -38,101 | |||||||||
Non-operating intercompany transactions | 18,775 | 58,867 | 100,690 | |||||||||
Interest income and other | 73,919 | 72,601 | 73,114 | |||||||||
Interest expense | -431,670 | -431,882 | -478,756 | |||||||||
Loss on extinguishment of debt | -2,364 | -31,481 | ||||||||||
Foreign currency gain (loss) | 44,515 | -16,723 | -7,822 | |||||||||
Derivative instruments gain (loss) | -5,183 | 1,576 | -31,433 | |||||||||
Earnings (loss) from continuing operations before income taxes (benefit) | -587,446 | -420,337 | -413,789 | |||||||||
Income tax expense (benefit) | -165,662 | -166,067 | -140,681 | |||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | -421,784 | -254,270 | -273,108 | |||||||||
Equity in earnings (loss) of subsidiaries | -72,592 | 56,284 | -60,960 | |||||||||
Earnings (loss) from continuing operations | -494,376 | -197,986 | -334,068 | |||||||||
Earnings (loss) from discontinued operations, net of tax | 0 | -3,091 | 4,546 | |||||||||
Net earnings (loss) | -494,376 | -201,077 | -329,522 | |||||||||
Total comprehensive income (loss) | -502,307 | -202,703 | -324,198 | |||||||||
Guarantor Subsidiaries [Member] | ||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||
Rental | 0 | 0 | 0 | |||||||||
Sales | 919,988 | 855,607 | 411,032 | |||||||||
Total revenue | 919,988 | 855,607 | 411,032 | |||||||||
Rental expenses | 11,156 | 10,986 | 1,195 | |||||||||
Cost of sales | 571,768 | 523,367 | 136,556 | |||||||||
Gross profit (loss) | 337,064 | 321,254 | 273,281 | |||||||||
Selling, general and administrative expenses | 211,865 | 173,772 | 120,789 | |||||||||
Research and development expenses | 26,803 | 31,679 | 36,213 | |||||||||
Acquired intangible asset amortization | 79,136 | 73,794 | 77,752 | |||||||||
Wake Forest settlement | 0 | |||||||||||
Impairment of goodwill and intangible assets | 443,400 | |||||||||||
Operating earnings (loss) | 19,260 | -401,391 | 38,527 | |||||||||
Non-operating intercompany transactions | 146,218 | 123,951 | 329,531 | |||||||||
Interest income and other | 19,148 | 12,251 | 12,251 | |||||||||
Interest expense | -68,861 | -70,623 | -72,458 | |||||||||
Loss on extinguishment of debt | 0 | 0 | ||||||||||
Foreign currency gain (loss) | -924 | -179 | 294 | |||||||||
Derivative instruments gain (loss) | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations before income taxes (benefit) | 114,841 | -335,991 | 308,145 | |||||||||
Income tax expense (benefit) | 36,119 | 8,120 | 50,759 | |||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | 78,722 | -344,111 | 257,386 | |||||||||
Equity in earnings (loss) of subsidiaries | -151,058 | -46,074 | -375,553 | |||||||||
Earnings (loss) from continuing operations | -72,336 | -390,185 | -118,167 | |||||||||
Earnings (loss) from discontinued operations, net of tax | 4,573 | -309 | 37,855 | |||||||||
Net earnings (loss) | -67,763 | -390,494 | -80,312 | |||||||||
Total comprehensive income (loss) | -75,694 | -392,120 | -74,988 | |||||||||
Non-Guarantor Subsidiaries [Member] | ||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||
Rental | 113,833 | 135,562 | 161,188 | |||||||||
Sales | 862,689 | 679,340 | 547,346 | |||||||||
Total revenue | 976,522 | 814,902 | 708,534 | |||||||||
Rental expenses | 202,613 | 221,473 | 259,308 | |||||||||
Cost of sales | 370,643 | 261,199 | 236,766 | |||||||||
Gross profit (loss) | 403,266 | 332,230 | 212,460 | |||||||||
Selling, general and administrative expenses | 203,110 | 161,678 | 140,549 | |||||||||
Research and development expenses | 18,474 | 14,343 | 9,189 | |||||||||
Acquired intangible asset amortization | 53,302 | 34,735 | 40,278 | |||||||||
Wake Forest settlement | 0 | |||||||||||
Impairment of goodwill and intangible assets | 0 | |||||||||||
Operating earnings (loss) | 128,380 | 121,474 | 22,444 | |||||||||
Non-operating intercompany transactions | -249,577 | -153,998 | -474,480 | |||||||||
Interest income and other | 319 | 179 | 177 | |||||||||
Interest expense | -1,921 | -801 | -121 | |||||||||
Loss on extinguishment of debt | 0 | 0 | ||||||||||
Foreign currency gain (loss) | -25,747 | -5,316 | -5,473 | |||||||||
Derivative instruments gain (loss) | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations before income taxes (benefit) | -148,546 | -38,462 | -457,453 | |||||||||
Income tax expense (benefit) | 2,512 | 7,155 | -57,901 | |||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | -151,058 | -45,617 | -399,552 | |||||||||
Equity in earnings (loss) of subsidiaries | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations | -151,058 | -45,617 | -399,552 | |||||||||
Earnings (loss) from discontinued operations, net of tax | 0 | -457 | 23,999 | |||||||||
Net earnings (loss) | -151,058 | -46,074 | -375,553 | |||||||||
Total comprehensive income (loss) | -158,989 | -47,700 | -370,229 | |||||||||
Eliminations [Member] | ||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||
Rental | 0 | 0 | 0 | |||||||||
Sales | -928,775 | -841,394 | -336,738 | |||||||||
Total revenue | -928,775 | -841,394 | -336,738 | |||||||||
Rental expenses | -173,449 | -132,089 | -109,896 | |||||||||
Cost of sales | -933,282 | -829,625 | -369,184 | |||||||||
Gross profit (loss) | 177,956 | 120,320 | 142,342 | |||||||||
Selling, general and administrative expenses | -567 | -339 | -694 | |||||||||
Research and development expenses | 0 | 0 | 0 | |||||||||
Acquired intangible asset amortization | 0 | 0 | 0 | |||||||||
Wake Forest settlement | 0 | |||||||||||
Impairment of goodwill and intangible assets | 0 | |||||||||||
Operating earnings (loss) | 178,523 | 120,659 | 143,036 | |||||||||
Non-operating intercompany transactions | 84,584 | -28,820 | 44,259 | |||||||||
Interest income and other | -89,719 | -83,429 | -84,713 | |||||||||
Interest expense | 89,719 | 83,429 | 84,713 | |||||||||
Loss on extinguishment of debt | 0 | 0 | ||||||||||
Foreign currency gain (loss) | 0 | -8 | 0 | |||||||||
Derivative instruments gain (loss) | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations before income taxes (benefit) | 263,107 | 91,831 | 187,295 | |||||||||
Income tax expense (benefit) | 0 | 0 | 0 | |||||||||
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries | 263,107 | 91,831 | 187,295 | |||||||||
Equity in earnings (loss) of subsidiaries | 450,090 | 545,524 | 575,849 | |||||||||
Earnings (loss) from continuing operations | 713,197 | 637,355 | 763,144 | |||||||||
Earnings (loss) from discontinued operations, net of tax | 0 | 290 | 22,243 | |||||||||
Net earnings (loss) | 713,197 | 637,645 | 785,387 | |||||||||
Total comprehensive income (loss) | $736,990 | $642,523 | $769,415 | |||||||||
[1] | During 2013, we recorded a $272.2 million impairment of goodwill and a $171.2 million impairment of indefinite-lived intangible assets related to our Regenerative Medicine reporting unit. These amounts have been excluded from Regenerative Medicine operating earnings as management excludes these charges from operating earnings when making operating decisions about the business. |
Guarantor_Condensed_Consolidat4
Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Cash Flow (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net loss | ($230,473) | ($558,658) | ($141,417) |
Adjustments to reconcile net earnings (loss) to net cash provided | 322,268 | 695,437 | 304,110 |
Net cash provided (used) by operating activities | 91,795 | 136,779 | 162,693 |
Cash flows from investing activities: | |||
Net additions to property, plant and equipment | -66,495 | -78,327 | -83,668 |
Proceeds from disposition of assets | 5,212 | 0 | 244,317 |
Proceeds from sale of investment | 4,211 | 0 | 0 |
Business acquired in purchase transaction, net of cash acquired | -9,613 | -478,748 | -15,097 |
Increase in identifiable intangible assets and other non-current assets | -11,587 | -6,747 | -1,017 |
Net cash provided (used) by investing activities | -78,272 | -563,822 | 144,535 |
Cash flows from financing activities: | |||
Capital contributions from limited partners | 239 | ||
Distribution to limited partners | 0 | -1,572 | -2,199 |
Settlement of profits interest units | -2,332 | -176 | 0 |
Repayments of long-term debt and capital lease obligations | -26,403 | -69,396 | -118,767 |
Debt issuance costs | 0 | -20,477 | -18,410 |
Proceeds (payments) on intercompany loans | 0 | 0 | 0 |
KCI acquisition financing: | |||
Proceeds from senior credit facility | 0 | 349,563 | 0 |
Payment of debt issuance costs | 0 | -7,340 | -1,063 |
Proceeds (payments) on intercompany investments | 0 | 0 | 0 |
Net cash provided (used) by financing activities | -28,735 | 250,602 | -140,200 |
Effect of exchange rate changes on cash and cash equivalents | -8,196 | 240 | 696 |
Net increase (decrease) in cash and cash equivalents | -23,408 | -176,201 | 167,724 |
Cash and cash equivalents, beginning of period | 206,949 | 383,150 | 215,426 |
Cash and cash equivalents, end of period | 183,541 | 206,949 | 383,150 |
Parent Company [Member] | |||
Cash flows from operating activities: | |||
Net loss | -230,473 | -558,658 | -141,417 |
Adjustments to reconcile net earnings (loss) to net cash provided | 6,364 | 4,673 | 4,268 |
Net cash provided (used) by operating activities | -224,109 | -553,985 | -137,149 |
Cash flows from investing activities: | |||
Net additions to property, plant and equipment | 0 | 0 | 0 |
Proceeds from disposition of assets | 0 | 0 | |
Proceeds from sale of investment | 0 | ||
Business acquired in purchase transaction, net of cash acquired | 0 | 0 | 0 |
Increase in identifiable intangible assets and other non-current assets | 0 | 0 | 0 |
Net cash provided (used) by investing activities | 0 | 0 | 0 |
Cash flows from financing activities: | |||
Capital contributions from limited partners | 239 | ||
Distribution to limited partners | -1,572 | -2,199 | |
Settlement of profits interest units | -2,332 | -176 | |
Repayments of long-term debt and capital lease obligations | 0 | 0 | 0 |
Debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany loans | 0 | 0 | 0 |
KCI acquisition financing: | |||
Proceeds from senior credit facility | 0 | ||
Payment of debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany investments | 226,441 | 555,733 | 139,096 |
Net cash provided (used) by financing activities | 224,109 | 553,985 | 137,136 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | -13 |
Cash and cash equivalents, beginning of period | 398 | 398 | 411 |
Cash and cash equivalents, end of period | 398 | 398 | 398 |
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member] | |||
Cash flows from operating activities: | |||
Net loss | -494,376 | -201,077 | -329,522 |
Adjustments to reconcile net earnings (loss) to net cash provided | 306,092 | 244,257 | 449,431 |
Net cash provided (used) by operating activities | -188,284 | 43,180 | 119,909 |
Cash flows from investing activities: | |||
Net additions to property, plant and equipment | -156,810 | -196,988 | -96,931 |
Proceeds from disposition of assets | 0 | 74,576 | |
Proceeds from sale of investment | 4,211 | ||
Business acquired in purchase transaction, net of cash acquired | 0 | 0 | -15,097 |
Increase in identifiable intangible assets and other non-current assets | -376 | -453 | 5,881 |
Net cash provided (used) by investing activities | -152,975 | -197,441 | -31,571 |
Cash flows from financing activities: | |||
Capital contributions from limited partners | 0 | ||
Distribution to limited partners | 0 | 0 | |
Settlement of profits interest units | 0 | 0 | |
Repayments of long-term debt and capital lease obligations | -26,345 | -67,133 | -118,777 |
Debt issuance costs | -20,477 | -18,410 | |
Proceeds (payments) on intercompany loans | 251,576 | -157,416 | 15,783 |
KCI acquisition financing: | |||
Proceeds from senior credit facility | 349,563 | ||
Payment of debt issuance costs | -7,340 | -1,063 | |
Proceeds (payments) on intercompany investments | 69,284 | -131,953 | 168,265 |
Net cash provided (used) by financing activities | 294,515 | -34,756 | 45,798 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | -46,744 | -189,017 | 134,136 |
Cash and cash equivalents, beginning of period | 87,771 | 276,788 | 142,652 |
Cash and cash equivalents, end of period | 41,027 | 87,771 | 276,788 |
Guarantor Subsidiaries [Member] | |||
Cash flows from operating activities: | |||
Net loss | -67,763 | -390,494 | -80,312 |
Adjustments to reconcile net earnings (loss) to net cash provided | 104,787 | 263,245 | -141,711 |
Net cash provided (used) by operating activities | 37,024 | -127,249 | -222,023 |
Cash flows from investing activities: | |||
Net additions to property, plant and equipment | -5,024 | -17,274 | -25,244 |
Proceeds from disposition of assets | 5,212 | 72,335 | |
Proceeds from sale of investment | 0 | ||
Business acquired in purchase transaction, net of cash acquired | -9,500 | -64,938 | 0 |
Increase in identifiable intangible assets and other non-current assets | -7,418 | -6,419 | -7,795 |
Net cash provided (used) by investing activities | -16,730 | -88,631 | 39,296 |
Cash flows from financing activities: | |||
Capital contributions from limited partners | 0 | ||
Distribution to limited partners | 0 | 0 | |
Settlement of profits interest units | 0 | 0 | |
Repayments of long-term debt and capital lease obligations | 0 | -2,257 | 0 |
Debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany loans | -45,168 | -58,554 | -90,803 |
KCI acquisition financing: | |||
Proceeds from senior credit facility | 0 | ||
Payment of debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany investments | 26,255 | 276,809 | 273,530 |
Net cash provided (used) by financing activities | -18,913 | 215,998 | 182,727 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 1,381 | 118 | 0 |
Cash and cash equivalents, beginning of period | 118 | 0 | 0 |
Cash and cash equivalents, end of period | 1,499 | 118 | 0 |
Non-Guarantor Subsidiaries [Member] | |||
Cash flows from operating activities: | |||
Net loss | -151,058 | -46,074 | -375,553 |
Adjustments to reconcile net earnings (loss) to net cash provided | 131,736 | 292,384 | 141,795 |
Net cash provided (used) by operating activities | -19,322 | 246,310 | -233,758 |
Cash flows from investing activities: | |||
Net additions to property, plant and equipment | -49,922 | -111,118 | -70,550 |
Proceeds from disposition of assets | 0 | 97,406 | |
Proceeds from sale of investment | 0 | ||
Business acquired in purchase transaction, net of cash acquired | -113 | -413,810 | 0 |
Increase in identifiable intangible assets and other non-current assets | -3,793 | 125 | 897 |
Net cash provided (used) by investing activities | -53,828 | -524,803 | 27,753 |
Cash flows from financing activities: | |||
Capital contributions from limited partners | 0 | ||
Distribution to limited partners | 0 | 0 | |
Settlement of profits interest units | 0 | 0 | |
Repayments of long-term debt and capital lease obligations | -58 | -6 | 10 |
Debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany loans | -206,408 | 215,970 | 75,020 |
KCI acquisition financing: | |||
Proceeds from senior credit facility | 0 | ||
Payment of debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany investments | 309,767 | 74,987 | 163,880 |
Net cash provided (used) by financing activities | 103,301 | 290,951 | 238,910 |
Effect of exchange rate changes on cash and cash equivalents | -8,196 | 240 | 696 |
Net increase (decrease) in cash and cash equivalents | 21,955 | 12,698 | 33,601 |
Cash and cash equivalents, beginning of period | 118,662 | 105,964 | 72,363 |
Cash and cash equivalents, end of period | 140,617 | 118,662 | 105,964 |
Eliminations [Member] | |||
Cash flows from operating activities: | |||
Net loss | 713,197 | 637,645 | 785,387 |
Adjustments to reconcile net earnings (loss) to net cash provided | -226,711 | -109,122 | -149,673 |
Net cash provided (used) by operating activities | 486,486 | 528,523 | 635,714 |
Cash flows from investing activities: | |||
Net additions to property, plant and equipment | 145,261 | 247,053 | 109,057 |
Proceeds from disposition of assets | 0 | 0 | |
Proceeds from sale of investment | 0 | ||
Business acquired in purchase transaction, net of cash acquired | 0 | 0 | 0 |
Increase in identifiable intangible assets and other non-current assets | 0 | 0 | 0 |
Net cash provided (used) by investing activities | 145,261 | 247,053 | 109,057 |
Cash flows from financing activities: | |||
Capital contributions from limited partners | 0 | ||
Distribution to limited partners | 0 | 0 | |
Settlement of profits interest units | 0 | 0 | |
Repayments of long-term debt and capital lease obligations | 0 | 0 | 0 |
Debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany loans | 0 | 0 | 0 |
KCI acquisition financing: | |||
Proceeds from senior credit facility | 0 | ||
Payment of debt issuance costs | 0 | 0 | |
Proceeds (payments) on intercompany investments | -631,747 | -775,576 | -744,771 |
Net cash provided (used) by financing activities | -631,747 | -775,576 | -744,771 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents, beginning of period | 0 | 0 | 0 |
Cash and cash equivalents, end of period | $0 | $0 | $0 |
Schedule_II_Details
Schedule II (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Accounts receivable realization reserves | ||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Beginning balance | $76,114 | $76,538 | $21,151 | |||
Additions Charged to Costs and Expenses | 10,801 | 3,968 | 5,318 | |||
Additions Charged to Other Accounts | 67,122 | [1] | 70,472 | [1] | 124,616 | [1] |
Deductions | 79,490 | 74,864 | 74,547 | |||
Ending balance | 74,547 | 76,114 | 76,538 | |||
Inventory reserve | ||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Beginning balance | 10,288 | 9,900 | 1,974 | |||
Additions Charged to Costs and Expenses | 25,484 | 11,662 | 22,287 | |||
Additions Charged to Other Accounts | 0 | 0 | 0 | |||
Deductions | 19,802 | 11,274 | 14,361 | |||
Ending balance | 15,970 | 10,288 | 9,900 | |||
Deferred tax asset valuation allowance | ||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Beginning balance | 55,944 | 19,272 | 18,247 | |||
Additions Charged to Costs and Expenses | 26,355 | 29,064 | 1,025 | |||
Additions Charged to Other Accounts | 0 | 7,608 | 0 | |||
Deductions | 0 | 0 | 0 | |||
Ending balance | $82,299 | $55,944 | $19,272 | |||
[1] | Additions to the accounts receivable realization reserves charged to other accounts reflect the net increase in revenue reserves to allow for expected credit memos, canceled transactions and uncollectible items where collectibility is not reasonably assured in accordance with the provisions of the “Revenue Recognition†Topic of the FASB Accounting Standards Codification. |