Acelity 10-Q 4 May 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document Information [Line Items]
Entity Registrant Name	ACELITY L.P. INC.
Entity Central Index Key	1,557,939
Current Fiscal Year End Date	--12-31
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	2,016
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Class A-1 Partnership Units [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		341,410,891.610
Class A-2 Partnership Units [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		717,038.800

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 223,616	$ 88,409
Accounts receivable, net	419,883	413,531
Inventories, net	188,800	181,309
Deferred income taxes	43,781	74,521
Prepaid expenses and other	29,864	34,985
Total current assets	905,944	792,755
Net property, plant and equipment	266,008	273,076
Deferred income taxes	24,262	29,909
Goodwill	3,406,475	3,405,823
Identifiable intangible assets, net	2,178,864	2,219,088
Other non-current assets	4,647	6,104
Total assets	6,786,200	6,726,755
Current liabilities:
Accounts payable	52,666	57,910
Accrued expenses and other	420,204	373,440
Current installments of long-term debt	22,258	22,130
Income taxes payable	8,837	3,561
Deferred income taxes	113,595	113,595
Total current liabilities	617,560	570,636
Long-term debt, net of current installments, discount and debt issuance costs	4,820,113	4,720,363
Non-current tax liabilities	33,694	34,833
Deferred income taxes	698,471	760,737
Other non-current liabilities	34,609	37,021
Total liabilities	6,204,447	6,123,590
Equity:
General partner’s capital	0	0
Limited partners’ capital	597,389	622,899
Accumulated other comprehensive loss, net	(15,636)	(19,734)
Total equity	581,753	603,165
Total liabilities and shareholders' equity	$ 6,786,200	$ 6,726,755

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue:
Rental	$ 170,099	$ 172,839
Sales	281,267	271,211
Total revenue	451,366	444,050
Rental expenses	74,895	78,178
Cost of sales	78,579	73,414
Gross profit (loss)	297,892	292,458
Selling, general and administrative expenses	164,444	147,763
Research and development expenses	13,978	14,678
Acquired intangible asset amortization	42,202	45,877
Operating earnings (loss)	77,268	84,140
Interest income and other	107	147
Interest expense	(108,552)	(104,726)
Loss on extinguishment of debt	(3,609)	0
Foreign currency gain (loss)	(4,330)	19,400
Derivative instruments loss	(682)	(3,348)
Earnings (loss) before income tax expense (benefit)	(39,798)	(4,387)
Income tax expense (benefit)	(13,823)	144
Net earnings (loss)	$ (25,975)	$ (4,531)

Condensed Consolidated Stateme4

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net loss	$ (25,975)	$ (4,531)
Foreign currency translation adjustment, net of tax benefit (expense) of $755 in 2016 and ($635) in 2015	4,098	(7,071)
Total comprehensive income (loss)	$ (21,877)	$ (11,602)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Foreign currency translation adjustment, net of tax benefit (expense) of $755 in 2016 and ($635) in 2015	$ 755	$ (635)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net loss	$ (25,975)	$ (4,531)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of debt issuance costs and discount	10,107	9,968
Depreciation and other amortization	64,734	66,331
Loss on disposition of assets	576	678
Amortization of fair value step-up in inventory	164	0
Provision for bad debt	2,183	1,827
Loss on extinguishment of debt	3,609	0
Equity-based compensation expense	768	535
Deferred income tax benefit	(24,076)	(11,971)
Unrealized gain on derivative instruments	(2,812)	(315)
Unrealized loss (gain) on foreign currency	5,327	(32,429)
Change in assets and liabilities:
Decrease (increase) in accounts receivable, net	(7,694)	5,362
Increase in inventories, net	(416)	(3,666)
Decrease (increase) in prepaid expenses and other	5,121	(774)
Increase (decrease) in accounts payable	(5,183)	4,363
Increase in accrued expenses and other	49,438	56,048
Increase (decrease) in tax liabilities, net	2,314	11,525
Net cash provided (used) by operating activities	78,185	102,951
Cash flows from investing activities
Additions to property, plant and equipment	(17,467)	(10,491)
Increase in inventory to be converted into equipment for short-term rental	(983)	(3,356)
Dispositions of property, plant and equipment	2	0
Increase in identifiable intangible assets and other non-current assets	(1,129)	(1,821)
Net cash provided (used) by investing activities	(19,577)	(15,668)
Cash flows from financing activities:
Distribution to limited partners	0	(55)
Settlement of profits interest units	(217)	(517)
Proceeds from first lien senior secured notes	400,000	0
Repayments of long-term debt and capital lease obligations	(317,731)	(6,415)
Debt issuance costs	(8,407)	(6,256)
Net cash provided (used) by financing activities	73,645	(13,243)
Effect of exchange rate changes on cash and cash equivalents	2,954	(7,072)
Net increase (decrease) in cash and cash equivalents	135,207	66,968
Cash and cash equivalents, beginning of period	88,409	183,541
Cash and cash equivalents, end of period	$ 223,616	$ 250,509

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies (a) Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “the Codification”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, financial position and cash flows in conformity with GAAP. Operating results from interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our results for the interim periods presented. Certain prior period amounts have been reclassified to conform to the 2016 presentation. The Company has two reportable operating segments: Advanced Wound Therapeutics and Regenerative Medicine. We also have other revenue which consists of contract manufacturing operations performed at our manufacturing facility in Gargrave, England. The condensed consolidated financial statements appearing in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 . (b) 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. As of March 31, 2016 , 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. We also periodically 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; 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. Although we use master netting agreements with our derivative counterparties, we do not offset derivative asset and liability positions in the condensed consolidated balance sheets. All derivative instruments are recorded on the balance sheets 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. (c) Concentration of Credit Risk We have a concentration of credit risk with financial institutions related to our derivative instruments. As of March 31, 2016 , Morgan Stanley, UBS and HSBC were the counterparties on our interest rate protection agreements consisting of interest rate swap agreements in notional amounts totaling $459.3 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. (d) Recently Adopted Accounting Standards In January 2015, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-01, "Income Statement -Extraordinary and Unusual Items (Subtopic 225-20)." The objective of this ASU is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. The Company adopted this ASU effective January 1, 2016. The adoption of this update did not have a material impact on our results of operations, financial position or disclosures. On February 18, 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." This update provides a revised consolidation model for all reporting entities to use in evaluating whether they should consolidate certain legal entities. All legal entities will be subject to reevaluation under this revised consolidation model. The revised consolidation model, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The Company adopted this ASU effective January 1, 2016. The adoption of this update did not have a material impact on our results of operations, financial position or disclosures. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30)." The objective of this ASU was to simplify the presentation of debt issuance costs in the balance sheet by requiring the presentation of debt issuance costs as a deduction from the carrying amount of the related debt liability instead of a deferred charge. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as an asset in the balance sheet. The Company adopted this ASU effective January 1, 2016, resulting in a $54.7 million retrospective reduction of both our non-current assets and long-term debt, net of current installments, discount and debt issuance costs, as of December 31, 2015 . In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.” The amendments in this ASU require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this ASU also require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Additionally, the amendments in this ASU require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this ASU effective January 1, 2016. The adoption of this update did not have a material impact on our results of operations, financial position or disclosures. (e) Recently Issued Accounting Standards 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, 2017, including interim periods within that reporting period. The standard may be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company has not selected a transition method and we are evaluating ASU No. 2014-09 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. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The amendments in this ASU do not apply to inventory that is measured using last-in, first-out or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out or average cost. An entity should measure inventory within the scope of this ASU at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. 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 ASU, 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. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” which changes how deferred taxes are classified on organizations’ balance sheets. The ASU eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments apply to all organizations that present a classified balance sheet. The standard will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU amends existing guidance related to the recognition, measurement, presentation, and disclosure of financial instruments. The ASU eliminates the existing requirement to disclose the methods and significant assumptions used to estimate the fair value required to be disclosed for financial instruments measured at amortized cost on the balance sheet, instead requiring entities to disclose the fair value of these financial instruments using the exit price. This ASU also requires an entity that elects to measure a liability at fair value to present separately in other comprehensive income the portion of the total change in the liability’s fair value that is due to a change in credit risk specifically related to the financial instrument. Additionally, this ASU requires that financial assets and financial liabilities be presented separately by measurement category and form of financial asset on the balance sheet or in the notes to the financial statements. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2017. Early adoption is only permitted for separate presentation in other comprehensive income as of the beginning of the fiscal year of adoption. The standard should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. 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. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The objective of this ASU is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and increasing disclosure requirements to include key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. When measuring assets and liabilities arising from a lease, a lessee should include payments to be made in optional periods, and optional payments to purchase, only if the lessee is reasonably certain to exercise the option. This new guidance continues to differentiate between finance leases and operating leases; there have been no significant changes in the recognition, measurement, and presentation of expenses and cash flows. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard must be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is evaluating this update. In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments,” which applies to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. This amendment requires an entity to assess the embedded call (put) options solely in accordance with the four-step decision sequence. Additionally, this ASU clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts, which is one of the criteria for bifurcating an embedded derivative. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted, including in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The standard should be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective. 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. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” When another party is involved in providing goods or services to a customer, this ASU provides additional guidance for entities in determining whether the nature of its promise is to provide that good or service to the customer (i.e. the entity is the principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is the agent). This amendment clarifies that an entity determine whether it is a principal or an agent for each specified good or service promised to a customer and determine the nature of each specified good or service. The effective date and transition for this ASU is the same as ASU 2014-09. 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. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The amendment in this ASU affects all organizations that issue share-based payment awards to employees and is intended to simplify several aspects of the accounting for these awards, including income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and allowing an accounting policy election to account for forfeitures as they occur. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted, however an entity must adopt all of the amendments in the same period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. Transition guidance is dependent on the individual amendment within the update. 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. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” This standard clarifies the guidance in ASU 2014-09 for entities in identifying performance obligations, and the licensing implementation guidance. The ASU clarifies that an entity is not required to assess whether promised goods or services are performance obligations if they are immaterial to the contract. This update also allows entities to make a policy election to account for shipping and handling occurring after the customer has obtained control of a good as an activity to fulfill the promise to transfer the good rather than an additional promise. Additionally, the update includes clarification on whether an entity’s promise to grant a customer a license to intellectual property that has a significant standalone functionality or symbolic intellectual property, that does not have significant standalone functionality, include support during the license period. The effective date and transition for this ASU is the same as ASU 2014-09. 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. (f) Other Significant Accounting Policies For further information on our significant accounting policies, see Note 1 of the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 .

Acquisitions and Divestitures A

Acquisitions and Divestitures Acquisitions and Divestitures	3 Months Ended
	Mar. 31, 2016
Business Combinations and Discontinued Operations [Abstract]
Acquisitions and Divestitures	Acquisitions and Divestitures Acquisitions Spiracur Inc. On December 1, 2015 , we closed the acquisition of the SNaP business from Spiracur Inc., expanding our offering in disposable, portable, mechanical negative pressure wound therapy ("NPWT") technology, and allowing our sales and service channels to accelerate the expansion of the SNaP Therapy System to patients and their care teams around the world who need access to NPWT devices. The aggregate purchase price of this acquisition was $42.5 million , all of which was paid in cash. The allocation of the purchase price to the tangible and identifiable intangible assets was based on their estimated fair values as of the acquisition date using the income approach. The excess of the purchase price over the identifiable intangible and net tangible assets was allocated to goodwill, which is not deductible for tax purposes. Goodwill recognized was primarily attributable to potential operational synergies related to overhead cost reductions. The purchase price allocation is preliminary, pending the final determination of the fair value of certain assumed assets and liabilities. As these issues are identified, modified or resolved, resulting increases or decreases to the preliminary value of assets and liabilities are offset by a change to goodwill. Adjustments to these estimates will be included in the final allocation of the purchase price. The consolidated financial statements include the results of operations from this business combination from the date of the acquisition. Had the transaction occurred at the beginning of fiscal 2015, consolidated results of operations would not have differed materially from reported results. The following table represents the preliminary allocation of the purchase price ($ in thousands): December 31, Adjustments March 31, Goodwill $ 27,525 $ 652 $ 28,177 Identifiable intangible assets: Customer relationships 5,800 5,800 Developed technology 6,400 6,400 Tradenames 2,400 2,400 Tangible assets acquired and liabilities assumed: Inventories 1,741 1,741 Other current assets 125 125 Property, plant and equipment 250 250 Current liabilities (713 ) (1,639 ) (2,352 ) Other non-current liabilities (987 ) 987 — Total purchase price $ 42,541 $ — $ 42,541 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. Divestitures There were no divestitures during the three months ended March 31, 2016 .

Supplemental Balance Sheet Data

Supplemental Balance Sheet Data	3 Months Ended
	Mar. 31, 2016
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): March 31, December 31, Gross trade accounts receivable: Billed trade accounts receivable $ 440,710 $ 429,556 Unbilled receivables 42,032 48,795 Less: Allowance for revenue adjustments (62,767 ) (66,868 ) Gross trade accounts receivable 419,975 411,483 Less: Allowance for bad debt (12,425 ) (11,372 ) Net trade accounts receivable 407,550 400,111 Other receivables 12,333 13,420 $ 419,883 $ 413,531 (b) Inventories, net Inventories consist of the following (in thousands): March 31, December 31, Finished goods and tissue available for distribution $ 139,589 $ 133,293 Goods and tissue in-process 13,677 9,778 Raw materials, supplies, parts and unprocessed tissue 65,767 67,433 219,033 210,504 Less: Amounts expected to be converted into equipment for short-term rental (10,580 ) (9,597 ) Reserve for excess and obsolete inventory (19,653 ) (19,598 ) $ 188,800 $ 181,309

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Long-Term Debt	Long-Term Debt Long-term debt consists of the following (in thousands): March 31, December 31, Senior Dollar Term E-1 Credit Facility – due 2018 $ 1,902,907 $ 1,907,774 Senior Euro Term E-1 Credit Facility – due 2018 272,784 260,946 Senior Term E-2 Credit Facility – due 2016 (1) — 312,166 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 7.875% First Lien Senior Secured Notes due 2021 400,000 — Notional amount of debt 4,937,691 4,842,886 Senior Dollar Term E-1 Credit Facility Discount, net of accretion (18,670 ) (20,792 ) Senior Euro Term E-1 Credit Facility Discount, net of accretion (4,919 ) (5,224 ) Senior Term E-2 Credit Facility Discount, net of accretion — (1,770 ) Second Lien Senior Secured Notes Discount, net of accretion (14,533 ) (15,729 ) Senior Unsecured Notes Discount, net of accretion (2,113 ) (2,227 ) Net discount on debt (40,235 ) (45,742 ) Net debt issuance costs (55,085 ) (54,651 ) Total debt, net of discount and debt issuance costs 4,842,371 4,742,493 Less: Current installments (22,258 ) (22,130 ) $ 4,820,113 $ 4,720,363 (1) All amounts outstanding under the Senior Term E-2 Credit Facility were paid in full on February 9, 2016 with proceeds from the offering of the 7.875% First Lien Senior Secured Notes due 2021. Senior Secured Credit Facilities Our senior secured credit facilities (the “Senior Secured Credit Facilities”) includes a $200 million revolving credit facility (the “Revolving Credit Facility”). Amounts available under the Revolving Credit Facility are available for borrowing and reborrowing until maturity. At March 31, 2016 and December 31, 2015 , no revolving credit loans were outstanding and we had outstanding letters of credit issued by banks which are party to the Senior Secured Credit Facilities of $37.9 million and $38.2 million , respectively. In addition, we had $7.7 million and $8.5 million of letters of credit issued by a bank not party to the Senior Secured Credit Facilities as of March 31, 2016 and December 31, 2015 , respectively. The capacity of the Revolving Credit Facility is reduced for the $37.9 million and $38.2 million of letters of credit issued by banks which are party to the Senior Secured Credit Facilities as of March 31, 2016 and December 31, 2015 , respectively. The resulting availability under the Revolving Credit Facility was $162.1 million and $161.8 million at March 31, 2016 and December 31, 2015 , respectively. Commitment fees accrue at a rate of 0.50% on the amounts available under the Revolving Credit Facility. On February 9, 2016 , we entered into Amendment No. 7 to the Senior Secured Credit Facilities. Pursuant to Amendment No. 7, among other things, the maturity date of certain consenting lenders’ commitments under the Revolving Credit Facility was extended to November 4, 2017. Promptly after the effectiveness of Amendment No. 7, we permanently reduced, or the Permanent Reduction, a portion of the commitments under our Revolving Credit Facility of lenders that did not consent to extend the maturity date of their commitments under the Revolving Credit Facility pursuant to Amendment No. 7. On February 9, 2016 , we also entered into Amendment No. 8 to the Senior Secured Credit Facilities. In connection with Amendment No. 8, certain lenders agreed to provide incremental commitments under the Revolving Credit Facility in a principal amount equal to the principal amount of the commitments subject to the Permanent Reduction, and such incremental commitments also have a maturity date of November 4, 2017. After giving effect to Amendment No. 7 and Amendment No. 8, we have aggregate revolving loan commitments under our Revolving Credit Facility of $171.3 million maturing on November 4, 2017, with an additional $28.7 million in revolving loan commitments continuing to mature on November 4, 2016. 7.875% First Lien Senior Secured Notes On February 9, 2016, Kinetic Concepts, Inc. and KCI USA, Inc., each a wholly-owned subsidiary of Acelity L.P. Inc. (together, the "First Lien Notes Issuers") issued $400.0 million aggregate principal amount of 7.875% First Lien Senior Secured notes due 2021 (the "First Lien Notes"). Interest. Interest on the First Lien Notes accrues at the rate of 7.875% per annum and is payable semiannually in arrears on each February 15 and August 15, beginning on August 15, 2016. Interest is computed on the basis of a 360-day year consisting of twelve 30-day months. Collateral. The First Lien Notes are secured on a first priority basis by a perfected security interest in substantially all of the First Lien Notes Issuers' and the guarantors' tangible and intangible assets (subject to certain exceptions), including U.S. registered intellectual property and all of the capital stock of each of Acelity L.P. Inc.'s direct and indirect wholly-owned material restricted subsidiaries, including the First Lien Notes Issuers (limited, in the case of foreign subsidiaries and domestic foreign holding companies, to 65% of the voting capital stock of material foreign subsidiaries and domestic foreign holding companies). The liens securing the first lien notes are subject to permitted liens. Guarantors. Our obligations under the First Lien Notes are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis, by Acelity L.P. Inc., Chiron Topco, Inc., Chiron Holdings, Inc., LifeCell Corporation and each of Acelity L.P. Inc.’s other subsidiaries to the extent such entities guarantee indebtedness under the Senior Secured Credit Facilities or the 10.5% Second Lien Senior Secured Notes due 2018 (the "Second Lien Notes") and the 12.5% Senior Unsecured Notes due 2019 (together with the Second Lien Notes, the "Existing Notes"). Maturity. The First Lien Notes will mature on February 15, 2021. Covenants. The indenture governing the First Lien Notes contains 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. Optional Redemption. At any time prior to February 15, 2018, the First Lien Notes Issuers, at their option, may redeem up to 40% of the aggregate principal amount of the First Lien Notes with the net cash proceeds of certain equity offerings, at a redemption price equal to 107.875% of the aggregate principal amount of the First Lien Notes being redeemed plus accrued and unpaid interest, if any. At any time prior to February 15, 2018, the First Lien Notes Issuers, at their option, may redeem all or part of the First Lien Notes at a redemption price equal to 100% of the aggregate principal amount of the First Lien Notes to be redeemed, plus a make-whole premium plus accrued and unpaid interest, if any, to the date of redemption. At any time on or after February 15, 2018, the First Lien Notes Issuers may redeem the First Lien 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 February 15 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption: Year Price 2018 103.938% 2019 101.969% 2020 and thereafter 100.000% Change of Control. If First Lien Notes Issuers experience certain kinds of changes of control specified in the indenture governing the First Lien Notes, the First Lien Notes Issuers will be required to offer to repurchase the First Lien Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any. Events of Default. The indenture governing the First Lien Notes contains events of default (subject in certain cases to customary grace and cure periods) including, but not limited to, failure to pay principal or interest, breach of covenants, payment defaults or acceleration of 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. Registration. The First Lien Notes and related guarantees have not been and will not be registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction. Covenants As of March 31, 2016 , we were in compliance with the covenants under the credit agreement governing our Senior Secured Credit Facilities and indentures governing the First Lien Notes and the Existing Notes. For further information on our long-term debt, see Note 5 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 .

Derivative Financial Instrument

Derivative Financial Instruments and Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
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 sheets at fair value. We do not use financial instruments for speculative or trading purposes. Interest Rate Protection At March 31, 2016 and December 31, 2015 , we were party to three interest rate swap agreements which are used 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 receive rates based on the higher of three-month USD LIBOR or 1.25% and pay rates based on fixed rates. Quarterly payments under the interest rate swap agreements are 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 $1.8 million until maturity. The following table summarizes our interest rate swap agreements (dollars in thousands): Effective Dates Outstanding Notional Amount Fixed Interest Rate 12/31/13-12/31/16 $459,333 2.256% 12/31/13-12/31/16 $459,333 2.249% 12/31/13-12/31/16 $459,333 2.250% In April 2016, we entered into three additional interest rate swap agreements to convert $1.165 billion of our variable-rate debt to a fixed-rate basis, which become effective in December 2016. These agreements have been designated as cash flow hedge instruments. Quarterly payments under the interest rate swap agreements are due on the last day of March, June, September and December. The aggregate notional amount decreases quarterly by amounts ranging from $4.4 million to $84.5 million until maturity. Foreign Currency Exchange Rate Mitigation At March 31, 2016 and December 31, 2015 , we had no outstanding foreign currency exchange contracts. 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 sheets for cash and cash equivalents, accounts receivable, accounts payable and long-term obligations, excluding our borrowings under our Senior Secured Credit Facilities and fixed rate long-term debt, approximates fair value. The fair value of our borrowings under our Senior Secured Credit Facilities and fixed rate long-term debt was $2.164 billion and $2.700 billion , respectively, at March 31, 2016 . The fair value of our borrowings under our Senior Secured Credit Facilities and fixed rate long-term debt was $2.400 billion and $2.257 billion , respectively, at December 31, 2015 . 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 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 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 Location Fair Value Balance Location Fair Value March 31, December 31, March 31, December 31, Derivatives not designated as hedging instruments Interest rate swap agreements Prepaid expenses and other $ — $ — Accrued expenses and other $ 9,431 $ 12,243 Interest rate swap agreements Other non-current assets — — Other non-current liabilities — — Total derivatives $ — $ — $ 9,431 $ 12,243 The following table summarizes the amount of gain (loss) on derivatives not designated as hedging instruments (dollars in thousands): Three months ended March 31, 2016 2015 Interest rate swap agreements $ (682 ) $ (3,348 ) Foreign currency exchange contracts — — $ (682 ) $ (3,348 ) Certain of our derivative instruments contain provisions that require compliance with the restrictive covenants of our Senior Secured Credit Facilities. For further information regarding the restrictive covenants of credit facilities, see Note 5 of the notes to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 . If we default under our credit facilities, the lenders could require immediate repayment of the entire outstanding principal balance. 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 Facilities. 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 March 31, 2016 , we could be required to settle or post the full amount as collateral to the respective agreement counterparties. We did not have any measurements of financial assets or financial liabilities at fair value on a nonrecurring basis at March 31, 2016 or December 31, 2015 .

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)	3 Months Ended
	Mar. 31, 2016
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Comprehensive Income (Loss) Note	Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss are as follows (in thousands): Accumulated Accumulated Balances at December 31, 2015 $ (19,734 ) $ (19,734 ) Foreign currency translation adjustment, net of tax benefit of $755 4,098 4,098 Balances at March 31, 2016 $ (15,636 ) $ (15,636 ) During the three months ended March 31, 2016 , there were no reclassification adjustments out of accumulated other comprehensive loss to net loss.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
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 September 2013, LifeNet Health ("LifeNet") filed suit against LifeCell Corporation ("LifeCell") in the U.S. District Court for the Eastern District of Virginia, Norfolk Division. LifeNet alleged that two LifeCell products, Strattice and AlloDerm Ready to Use, infringe LifeNet’s U.S. Patent No. 6,569,200, or 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 appeal stages of this litigation and intends to defend any further claims by LifeNet. LifeCell has filed an appeal in the U.S. Federal Circuit Court of Appeals in Washington D.C. on multiple grounds. The hearing before the Federal Circuit Court of Appeals was held in March 2016. In September 2015, LifeCell filed suit against LifeNet in the U.S. District Court for the District of New Jersey seeking declaratory judgment that LifeCell’s products do not infringe U.S. Patent No. 9,125,971, or the ‘971 Patent, which was issued to LifeNet the same day. In February 2016, a magistrate judge ordered the case transferred to Virginia, which LifeCell is appealing. LifeCell also filed a petition with United States Patent and Trademark Office to invalidate the ‘971 Patent. The ‘971 Patent is a continuation of the ‘200 Patent. Products Liability Litigation LifeCell is a defendant in approximately 355 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. Discovery was completed in four bellwether cases. In August 2015, LifeCell was successful in obtaining a summary judgment resulting in the dismissal of two of the four bellwether cases, and the dismissal of the design defect claims in the remaining two bellwether cases. The plaintiffs have appealed these decisions. Trial of the first remaining bellwether case has been postponed and has not yet been rescheduled. 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. Because discovery of damages has been limited to the four bellwether cases, we do not know the damages allegedly suffered by the remaining plaintiffs. As such, it is impossible to predict or estimate potential losses if our defenses to these cases are unsuccessful. LifeCell has been named as a defendant in approximately 258 lawsuits in state and U.S. 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 254 LifeCell cases filed in two consolidated dockets in Middlesex County, Massachusetts. The cases are in the initial phase and no discovery has occurred. Two cases are pending in a multi-district U.S. federal case in West Virginia that is proceeding very slowly. LifeCell has been named, but not served, in 12 cases with multiple plaintiffs and defendants in St. Louis, Missouri State court. The St. Louis cases are aimed at the entire pelvic mesh industry and it is unknown at this time if Repliform was actually implanted in any of the plaintiffs. The two remaining cases are in Delaware and Minnesota. 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 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, or OIG, seeking records regarding our billing practices under the local coverage policies of the four regional Durable Medical Equipment Medicare Administrative Contractors, or 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 District Court granted KCI’s motions dismissing all of the claims under the False Claims Act. The cases were appealed to the U.S. Court of Appeals for the Ninth Circuit which reversed the District Court’s dismissal of the suits and remanded the cases back to the District Court for further proceedings. We believe that our defenses to the claims in the Hartpence and Godecke 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. 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. Over the twelve month period ended March 31, 2016 , these audits have averaged approximately 12% 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. 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 March 31, 2016 , the accompanying consolidated balance sheet included $83.8 million under the caption “accrued expenses and other” and $28.0 million under the caption “other non-current liabilities” representing the net present value of remaining payments under the settlement agreement discounted using our incremental borrowing rate as the discount rate.

Segment Information

Segment Information	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Segment Reporting Disclosure	Segment Information The Company is engaged in the rental and sale of advanced wound therapeutics and regenerative medicine products in approximately 80 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). Information on segments and a reconciliation of consolidated totals are as follows (in thousands): Three months ended March 31, 2016 2015 Revenue: Advanced Wound Therapeutics $ 339,042 $ 337,259 Regenerative Medicine 109,874 104,169 Other operations (1) 2,450 2,622 Total revenue $ 451,366 $ 444,050 Operating earnings: Advanced Wound Therapeutics $ 99,664 $ 112,885 Regenerative Medicine 39,275 34,019 Other operations (1) 551 447 Non-allocated costs: General headquarter expense (2) (1,568 ) (1,423 ) Equity-based compensation (768 ) (535 ) Business optimization and transaction-related expenses (3) (17,685 ) (15,376 ) Acquired intangible asset amortization (4) (42,201 ) (45,877 ) Total non-allocated costs (62,222 ) (63,211 ) Total operating earnings $ 77,268 $ 84,140 (1) Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England. (2) Represents general headquarter expenses not allocated to the individual segments, including depreciation associated with our purchase accounting fixed asset step up to fair value. (3) Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities. (4) Represents amortization of acquired intangible assets related to our 2011 LBO, our acquisition of Systagenix in October 2013 and other technology acquisitions.

Guarantor Condensed Consolidati

Guarantor Condensed Consolidating Financial Statements	3 Months Ended
	Mar. 31, 2016
Guarantor Condensed Consolidating Financial Statements [Abstract]
Guarantor Condensed Consolidating Financial Statements	Guarantor Condensed Consolidating Financial Statements Our First Lien Notes and Existing 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 First Lien Notes or Existing Notes. Subject to the terms of the First Lien Notes and Existing 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 First Lien Notes or Existing Notes indentures, (2) the designation in accordance with the First Lien Notes or Existing 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 the First Lien Notes or Existing Notes, or (4) the achievement of investment grade status by the First Lien Notes or Existing 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 First Lien Notes and Existing Notes indentures will not guarantee the First Lien Notes or Existing Notes. As of March 31, 2016 , 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 March 31, 2016 (in thousands) (unaudited) 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 $ 66,900 $ 7,458 $ 148,860 $ — $ 223,616 Accounts receivable, net — 199,611 61,760 158,512 — 419,883 Inventories, net — 88,390 115,886 112,654 (128,130 ) 188,800 Deferred income taxes — 49,794 8,286 — (14,299 ) 43,781 Prepaid expenses and other — 12,504 3,771 244,835 (231,246 ) 29,864 Intercompany receivables 166 2,128,300 2,871,122 71,087 (5,070,675 ) — Total current assets 564 2,545,499 3,068,283 735,948 (5,444,350 ) 905,944 Net property, plant and equipment — 297,632 59,575 119,019 (210,218 ) 266,008 Deferred income taxes — — — 24,262 — 24,262 Goodwill — 2,511,417 732,138 162,920 — 3,406,475 Identifiable intangible assets, net — 239,052 1,686,938 252,874 — 2,178,864 Other non-current assets — 1,115 282 3,250 — 4,647 Intercompany loan receivables — 735,000 439,937 — (1,174,937 ) — Intercompany investments 592,430 428,232 — — (1,020,662 ) — $ 592,994 $ 6,757,947 $ 5,987,153 $ 1,298,273 $ (7,850,167 ) $ 6,786,200 Liabilities and Equity: Current liabilities: Accounts payable $ — $ 15,452 $ 13,680 $ 23,534 $ — $ 52,666 Accrued expenses and other — 287,448 253,676 66,391 (187,311 ) 420,204 Intercompany payables 10,332 1,801,863 2,745,691 512,789 (5,070,675 ) — Current installments of long-term debt — 22,258 — — — 22,258 Income taxes payable — — 5,159 4,284 (606 ) 8,837 Deferred income taxes — — 113,595 14,299 (14,299 ) 113,595 Total current liabilities 10,332 2,127,021 3,131,801 621,297 (5,272,891 ) 617,560 Long-term debt, net of current installments, discount and debt issuance costs — 4,820,113 — — — 4,820,113 Non-current tax liabilities — 15,259 15,287 3,148 — 33,694 Deferred income taxes — 55,359 603,250 39,862 — 698,471 Other non-current liabilities 909 28,451 2,459 2,790 — 34,609 Intercompany loan payables — 435,607 735,000 4,330 (1,174,937 ) — Intercompany advance — — 1,241 — (1,241 ) — Total liabilities 11,241 7,481,810 4,489,038 671,427 (6,449,069 ) 6,204,447 Total equity 581,753 (723,863 ) 1,498,115 626,846 (1,401,098 ) 581,753 $ 592,994 $ 6,757,947 $ 5,987,153 $ 1,298,273 $ (7,850,167 ) $ 6,786,200 Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Balance Sheet December 31, 2015 (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 $ 12,859 $ 4,919 $ 70,233 $ — $ 88,409 Accounts receivable, net — 202,377 58,080 153,074 — 413,531 Inventories, net — 89,929 87,519 104,904 (101,043 ) 181,309 Deferred income taxes — 66,235 8,286 — — 74,521 Prepaid expenses and other — 15,199 7,519 244,833 (232,566 ) 34,985 Intercompany receivables 166 2,098,061 2,828,639 16,279 (4,943,145 ) — Total current assets 564 2,484,660 2,994,962 589,323 (5,276,754 ) 792,755 Net property, plant and equipment — 294,855 59,833 127,858 (209,470 ) 273,076 Deferred income taxes — — — 29,909 — 29,909 Goodwill — 2,510,765 732,138 162,920 — 3,405,823 Identifiable intangible assets, net — 250,635 1,704,521 263,932 — 2,219,088 Other non-current assets — 1,029 282 4,793 — 6,104 Intercompany loan receivables — 740,000 436,432 — (1,176,432 ) — Intercompany investments 613,540 353,768 — — (967,308 ) — $ 614,104 $ 6,635,712 $ 5,928,168 $ 1,178,735 $ (7,629,964 ) $ 6,726,755 Liabilities and Equity: Current liabilities: Accounts payable $ — $ 18,013 $ 14,129 $ 25,768 $ — $ 57,910 Accrued expenses and other — 234,036 260,404 68,207 (189,207 ) 373,440 Intercompany payables 10,115 1,730,435 2,689,502 513,093 (4,943,145 ) — Current installments of long-term debt — 22,130 — — — 22,130 Income taxes payable — — — 3,561 — 3,561 Deferred income taxes — — 113,595 — — 113,595 Total current liabilities 10,115 2,004,614 3,077,630 610,629 (5,132,352 ) 570,636 Long-term debt, net of current installments, discount and debt issuance costs — 4,720,363 — — — 4,720,363 Non-current tax liabilities — 15,046 14,965 4,822 — 34,833 Deferred income taxes — 110,076 609,281 41,380 — 760,737 Other non-current liabilities 824 29,079 4,472 2,646 — 37,021 Intercompany loan payables — 432,545 740,000 3,887 (1,176,432 ) — Intercompany advance — — 70,045 — (70,045 ) — Total liabilities 10,939 7,311,723 4,516,393 663,364 (6,378,829 ) 6,123,590 Total equity 603,165 (676,011 ) 1,411,775 515,371 (1,251,135 ) 603,165 $ 614,104 $ 6,635,712 $ 5,928,168 $ 1,178,735 $ (7,629,964 ) $ 6,726,755 Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) (in thousands) (unaudited) For the three months ended March 31, 2016 Acelity L.P. Inc. Parent Company Kinetic Concepts, Inc. and KCI USA, Inc. Borrower Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenue: Rental $ — $ 150,420 $ — $ 19,679 $ — $ 170,099 Sales — 90,781 245,943 251,262 (306,719 ) 281,267 Total revenue — 241,201 245,943 270,941 (306,719 ) 451,366 Rental expenses 20 81,488 176 35,951 (42,740 ) 74,895 Cost of sales — 99,612 160,795 92,681 (274,509 ) 78,579 Gross profit (loss) (20 ) 60,101 84,972 142,309 10,530 297,892 Selling, general and administrative expenses 748 80,974 42,374 40,733 (385 ) 164,444 Research and development expenses — 5,764 5,019 3,195 — 13,978 Acquired intangible asset amortization — 11,584 19,364 11,254 — 42,202 Operating earnings (loss) (768 ) (38,221 ) 18,215 87,127 10,915 77,268 Non-operating intercompany transactions — (1,402 ) 6,713 (5,352 ) 41 — Interest income and other — 16,508 7,617 71 (24,089 ) 107 Interest expense — (116,088 ) (16,537 ) (16 ) 24,089 (108,552 ) Loss on extinguishment of debt — (3,609 ) — — — (3,609 ) Foreign currency gain (loss) — (13,044 ) 737 7,977 — (4,330 ) Derivative instruments loss — (682 ) — — — (682 ) Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries (768 ) (156,538 ) 16,745 89,807 10,956 (39,798 ) Income tax expense (benefit) — (33,980 ) (846 ) 21,003 — (13,823 ) Earnings (loss) before equity in earnings (loss) of subsidiaries (768 ) (122,558 ) 17,591 68,804 10,956 (25,975 ) Equity in earnings (loss) of subsidiaries (25,207 ) 74,464 68,804 — (118,061 ) — Net earnings (loss) $ (25,975 ) $ (48,094 ) $ 86,395 $ 68,804 $ (107,105 ) $ (25,975 ) Total comprehensive income (loss) $ (21,877 ) $ (43,996 ) $ 90,493 $ 72,902 $ (119,399 ) $ (21,877 ) Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) (in thousands) (unaudited) For the three months ended March 31, 2015 Acelity L.P. Inc. Parent Company Kinetic Concepts, Inc. and KCI USA, Inc. Borrower Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenue: Rental $ — $ 149,698 $ — $ 23,141 $ — $ 172,839 Sales — 83,737 239,691 229,663 (281,880 ) 271,211 Total revenue — 233,435 239,691 252,804 (281,880 ) 444,050 Rental expenses 21 75,873 3,467 41,365 (42,548 ) 78,178 Cost of sales 43 89,496 159,253 87,974 (263,352 ) 73,414 Gross profit (loss) (64 ) 68,066 76,971 123,465 24,020 292,458 Selling, general and administrative expenses 471 68,519 36,716 42,308 (251 ) 147,763 Research and development expenses — 5,617 4,896 4,165 — 14,678 Acquired intangible asset amortization — 13,880 19,456 12,541 — 45,877 Operating earnings (loss) (535 ) (19,950 ) 15,903 64,451 24,271 84,140 Non-operating intercompany transactions — (1,682 ) 30,849 (29,190 ) 23 — Interest income and other — 16,762 3,063 103 (19,781 ) 147 Interest expense — (107,782 ) (16,718 ) (7 ) 19,781 (104,726 ) Foreign currency gain (loss) — 35,006 (1,593 ) (14,013 ) — 19,400 Derivative instruments loss — (3,348 ) — — — (3,348 ) Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries (535 ) (80,994 ) 31,504 21,344 24,294 (4,387 ) Income tax expense (benefit) — 415 141 (412 ) — 144 Earnings (loss) before equity in earnings (loss) of subsidiaries (535 ) (81,409 ) 31,363 21,756 24,294 (4,531 ) Equity in earnings (loss) of subsidiaries (3,996 ) 48,953 21,756 — (66,713 ) — Net earnings (loss) $ (4,531 ) $ (32,456 ) $ 53,119 $ 21,756 $ (42,419 ) $ (4,531 ) Total comprehensive income (loss) $ (11,602 ) $ (39,527 ) $ 46,048 $ 14,685 $ (21,206 ) $ (11,602 ) Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Statement of Cash Flows (in thousands) (unaudited) For the three months ended March 31, 2016 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) $ (25,975 ) $ (48,094 ) $ 86,395 $ 68,804 $ (107,105 ) $ (25,975 ) Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities 985 144,348 (389 ) (23,268 ) (17,516 ) 104,160 Net cash provided (used) by operating activities (24,990 ) 96,254 86,006 45,536 (124,621 ) 78,185 Cash flows from investing activities: Net additions to property, plant and equipment — (49,827 ) (3,842 ) (10,099 ) 45,320 (18,448 ) Decrease (increase) in identifiable intangible assets and other non-current assets — (88 ) (2,260 ) 1,219 — (1,129 ) Net cash provided (used) by investing activities — (49,915 ) (6,102 ) (8,880 ) 45,320 (19,577 ) Cash flows from financing activities: Settlement of profits interest units (217 ) — — — — (217 ) Proceeds from first lien senior secured notes — 400,000 — — — 400,000 Repayments of long-term debt and capital lease obligations — (317,731 ) — — — (317,731 ) Debt issuance costs — (8,407 ) — — — (8,407 ) Proceeds (payments) on intercompany loans — 8,062 (8,505 ) 443 — — Proceeds (payments) on intercompany investments 25,207 (74,222 ) (68,860 ) 38,574 79,301 — Net cash provided (used) by financing activities 24,990 7,702 (77,365 ) 39,017 79,301 73,645 Effect of exchange rate changes on cash and cash equivalents — — — 2,954 — 2,954 Net increase (decrease) in cash and cash equivalents — 54,041 2,539 78,627 — 135,207 Cash and cash equivalents, beginning of period 398 12,859 4,919 70,233 — 88,409 Cash and cash equivalents, end of period $ 398 $ 66,900 $ 7,458 $ 148,860 $ — $ 223,616 Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Statement of Cash Flows (in thousands) (unaudited) For the three months ended March 31, 2015 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) $ (4,531 ) $ (32,456 ) $ 53,119 $ 21,756 $ (42,419 ) $ (4,531 ) Adjustments to reconcile net loss to net cash provided (used) by operating activities 1,107 48,156 52,609 15,657 (10,047 ) 107,482 Net cash provided (used) by operating activities (3,424 ) 15,700 105,728 37,413 (52,466 ) 102,951 Cash flows from investing activities: Net additions to property, plant and equipment — (26,027 ) (2,356 ) (1,082 ) 15,618 (13,847 ) Decrease (increase) in identifiable intangible assets and other non-current assets — (130 ) (1,820 ) 129 — (1,821 ) Net cash provided (used) by investing activities — (26,157 ) (4,176 ) (953 ) 15,618 (15,668 ) Cash flows from financing activities: Distribution to limited partners (55 ) — — — — (55 ) Settlement of profits interest units (517 ) — — — — (517 ) Repayments of long-term debt and capital lease obligations — (6,446 ) — 31 — (6,415 ) Payment of debt issuance costs — (6,256 ) — — — (6,256 ) Proceeds (payments) on intercompany loans — 8,063 (6,770 ) (1,293 ) — — Proceeds (payments) on intercompany investments 3,996 24,124 (96,281 ) 31,313 36,848 — Net cash provided (used) by financing activities 3,424 19,485 (103,051 ) 30,051 36,848 (13,243 ) Effect of exchange rate changes on cash and cash equivalents — — — (7,072 ) — (7,072 ) Net increase (decrease) in cash and cash equivalents — 9,028 (1,499 ) 59,439 — 66,968 Cash and cash equivalents, beginning of period 398 41,027 1,499 140,617 — 183,541 Cash and cash equivalents, end of period $ 398 $ 50,055 $ — $ 200,056 $ — $ 250,509

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP” or “the Codification”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of results of operations, financial position and cash flows in conformity with GAAP. Operating results from interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. The condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation of our results for the interim periods presented. Certain prior period amounts have been reclassified to conform to the 2016 presentation. The Company has two reportable operating segments: Advanced Wound Therapeutics and Regenerative Medicine. We also have other revenue which consists of contract manufacturing operations performed at our manufacturing facility in Gargrave, England. The condensed consolidated financial statements appearing in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 .
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. As of March 31, 2016 , 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. We also periodically 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; 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. Although we use master netting agreements with our derivative counterparties, we do not offset derivative asset and liability positions in the condensed consolidated balance sheets. All derivative instruments are recorded on the balance sheets 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.
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 March 31, 2016 , Morgan Stanley, UBS and HSBC were the counterparties on our interest rate protection agreements consisting of interest rate swap agreements in notional amounts totaling $459.3 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.
Recently Adopted Accounting Standards	Recently Adopted Accounting Standards In January 2015, the Financial Accounting Standard Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-01, "Income Statement -Extraordinary and Unusual Items (Subtopic 225-20)." The objective of this ASU is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. The Company adopted this ASU effective January 1, 2016. The adoption of this update did not have a material impact on our results of operations, financial position or disclosures. On February 18, 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." This update provides a revised consolidation model for all reporting entities to use in evaluating whether they should consolidate certain legal entities. All legal entities will be subject to reevaluation under this revised consolidation model. The revised consolidation model, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The Company adopted this ASU effective January 1, 2016. The adoption of this update did not have a material impact on our results of operations, financial position or disclosures. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30)." The objective of this ASU was to simplify the presentation of debt issuance costs in the balance sheet by requiring the presentation of debt issuance costs as a deduction from the carrying amount of the related debt liability instead of a deferred charge. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as an asset in the balance sheet. The Company adopted this ASU effective January 1, 2016, resulting in a $54.7 million retrospective reduction of both our non-current assets and long-term debt, net of current installments, discount and debt issuance costs, as of December 31, 2015 . In September 2015, the FASB issued ASU 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.” The amendments in this ASU require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this ASU also require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. Additionally, the amendments in this ASU require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this ASU effective January 1, 2016. The adoption of this update did not have a material impact on our results of operations, financial position or disclosures.
Recently Issued Accounting Standards	Recently Issued Accounting Standards 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, 2017, including interim periods within that reporting period. The standard may be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company has not selected a transition method and we are evaluating ASU No. 2014-09 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. In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory.” The amendments in this ASU do not apply to inventory that is measured using last-in, first-out or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out or average cost. An entity should measure inventory within the scope of this ASU at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. 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 ASU, 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. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” which changes how deferred taxes are classified on organizations’ balance sheets. The ASU eliminates the current requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. The amendments apply to all organizations that present a classified balance sheet. The standard will be effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This ASU amends existing guidance related to the recognition, measurement, presentation, and disclosure of financial instruments. The ASU eliminates the existing requirement to disclose the methods and significant assumptions used to estimate the fair value required to be disclosed for financial instruments measured at amortized cost on the balance sheet, instead requiring entities to disclose the fair value of these financial instruments using the exit price. This ASU also requires an entity that elects to measure a liability at fair value to present separately in other comprehensive income the portion of the total change in the liability’s fair value that is due to a change in credit risk specifically related to the financial instrument. Additionally, this ASU requires that financial assets and financial liabilities be presented separately by measurement category and form of financial asset on the balance sheet or in the notes to the financial statements. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2017. Early adoption is only permitted for separate presentation in other comprehensive income as of the beginning of the fiscal year of adoption. The standard should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. 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. In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” The objective of this ASU is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and increasing disclosure requirements to include key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a lease liability and a right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. When measuring assets and liabilities arising from a lease, a lessee should include payments to be made in optional periods, and optional payments to purchase, only if the lessee is reasonably certain to exercise the option. This new guidance continues to differentiate between finance leases and operating leases; there have been no significant changes in the recognition, measurement, and presentation of expenses and cash flows. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The standard must be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is evaluating this update. In March 2016, the FASB issued ASU 2016-06, “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments,” which applies to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. This amendment requires an entity to assess the embedded call (put) options solely in accordance with the four-step decision sequence. Additionally, this ASU clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts, which is one of the criteria for bifurcating an embedded derivative. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted, including in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The standard should be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective. 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. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).” When another party is involved in providing goods or services to a customer, this ASU provides additional guidance for entities in determining whether the nature of its promise is to provide that good or service to the customer (i.e. the entity is the principal) or to arrange for the good or service to be provided to the customer by the other party (i.e., the entity is the agent). This amendment clarifies that an entity determine whether it is a principal or an agent for each specified good or service promised to a customer and determine the nature of each specified good or service. The effective date and transition for this ASU is the same as ASU 2014-09. 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. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The amendment in this ASU affects all organizations that issue share-based payment awards to employees and is intended to simplify several aspects of the accounting for these awards, including income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and allowing an accounting policy election to account for forfeitures as they occur. This standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted, however an entity must adopt all of the amendments in the same period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. Transition guidance is dependent on the individual amendment within the update. 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. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing.” This standard clarifies the guidance in ASU 2014-09 for entities in identifying performance obligations, and the licensing implementation guidance. The ASU clarifies that an entity is not required to assess whether promised goods or services are performance obligations if they are immaterial to the contract. This update also allows entities to make a policy election to account for shipping and handling occurring after the customer has obtained control of a good as an activity to fulfill the promise to transfer the good rather than an additional promise. Additionally, the update includes clarification on whether an entity’s promise to grant a customer a license to intellectual property that has a significant standalone functionality or symbolic intellectual property, that does not have significant standalone functionality, include support during the license period. The effective date and transition for this ASU is the same as ASU 2014-09. 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.
Other Significant Accounting Policies	Other Significant Accounting Policies For further information on our significant accounting policies, see Note 1 of the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 .

Acquisitions and Divestitures (

Acquisitions and Divestitures (Tables)	3 Months Ended
	Mar. 31, 2016
Business Combinations and Discontinued Operations [Abstract]
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]	The following table represents the preliminary allocation of the purchase price ($ in thousands): December 31, Adjustments March 31, Goodwill $ 27,525 $ 652 $ 28,177 Identifiable intangible assets: Customer relationships 5,800 5,800 Developed technology 6,400 6,400 Tradenames 2,400 2,400 Tangible assets acquired and liabilities assumed: Inventories 1,741 1,741 Other current assets 125 125 Property, plant and equipment 250 250 Current liabilities (713 ) (1,639 ) (2,352 ) Other non-current liabilities (987 ) 987 — Total purchase price $ 42,541 $ — $ 42,541

Supplemental Balance Sheet Da18

Supplemental Balance Sheet Data (Tables)	3 Months Ended
	Mar. 31, 2016
Balance Sheet Related Disclosures [Abstract]
Schedule of Accounts Receivable, Net	Accounts receivable consist of the following (in thousands): March 31, December 31, Gross trade accounts receivable: Billed trade accounts receivable $ 440,710 $ 429,556 Unbilled receivables 42,032 48,795 Less: Allowance for revenue adjustments (62,767 ) (66,868 ) Gross trade accounts receivable 419,975 411,483 Less: Allowance for bad debt (12,425 ) (11,372 ) Net trade accounts receivable 407,550 400,111 Other receivables 12,333 13,420 $ 419,883 $ 413,531
Schedule of Inventories, Net	Inventories consist of the following (in thousands): March 31, December 31, Finished goods and tissue available for distribution $ 139,589 $ 133,293 Goods and tissue in-process 13,677 9,778 Raw materials, supplies, parts and unprocessed tissue 65,767 67,433 219,033 210,504 Less: Amounts expected to be converted into equipment for short-term rental (10,580 ) (9,597 ) Reserve for excess and obsolete inventory (19,653 ) (19,598 ) $ 188,800 $ 181,309

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments	Long-term debt consists of the following (in thousands): March 31, December 31, Senior Dollar Term E-1 Credit Facility – due 2018 $ 1,902,907 $ 1,907,774 Senior Euro Term E-1 Credit Facility – due 2018 272,784 260,946 Senior Term E-2 Credit Facility – due 2016 (1) — 312,166 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 7.875% First Lien Senior Secured Notes due 2021 400,000 — Notional amount of debt 4,937,691 4,842,886 Senior Dollar Term E-1 Credit Facility Discount, net of accretion (18,670 ) (20,792 ) Senior Euro Term E-1 Credit Facility Discount, net of accretion (4,919 ) (5,224 ) Senior Term E-2 Credit Facility Discount, net of accretion — (1,770 ) Second Lien Senior Secured Notes Discount, net of accretion (14,533 ) (15,729 ) Senior Unsecured Notes Discount, net of accretion (2,113 ) (2,227 ) Net discount on debt (40,235 ) (45,742 ) Net debt issuance costs (55,085 ) (54,651 ) Total debt, net of discount and debt issuance costs 4,842,371 4,742,493 Less: Current installments (22,258 ) (22,130 ) $ 4,820,113 $ 4,720,363
Schedule of Redemption Prices for First Lien Notes	At any time on or after February 15, 2018, the First Lien Notes Issuers may redeem the First Lien 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 February 15 of the year set forth below, plus, in each case, accrued and unpaid interest thereon, if any, to the date of redemption: Year Price 2018 103.938% 2019 101.969% 2020 and thereafter 100.000%

Derivative Financial Instrume20

Derivative Financial Instruments and Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2016
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 Location Fair Value Balance Location Fair Value March 31, December 31, March 31, December 31, Derivatives not designated as hedging instruments Interest rate swap agreements Prepaid expenses and other $ — $ — Accrued expenses and other $ 9,431 $ 12,243 Interest rate swap agreements Other non-current assets — — Other non-current liabilities — — Total derivatives $ — $ — $ 9,431 $ 12,243
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 derivatives not designated as hedging instruments (dollars in thousands): Three months ended March 31, 2016 2015 Interest rate swap agreements $ (682 ) $ (3,348 ) Foreign currency exchange contracts — — $ (682 ) $ (3,348 )
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Schedule of Notional Amounts of Outstanding Derivative Positions	The following table summarizes our interest rate swap agreements (dollars in thousands): Effective Dates Outstanding Notional Amount Fixed Interest Rate 12/31/13-12/31/16 $459,333 2.256% 12/31/13-12/31/16 $459,333 2.249% 12/31/13-12/31/16 $459,333 2.250%

Accumulated Other Comprehensi21

Accumulated Other Comprehensive Income (Loss) (Tables)	3 Months Ended
	Mar. 31, 2016
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss)	The components of accumulated other comprehensive loss are as follows (in thousands): Accumulated Accumulated Balances at December 31, 2015 $ (19,734 ) $ (19,734 ) Foreign currency translation adjustment, net of tax benefit of $755 4,098 4,098 Balances at March 31, 2016 $ (15,636 ) $ (15,636 )

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Mar. 31, 2016
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): Three months ended March 31, 2016 2015 Revenue: Advanced Wound Therapeutics $ 339,042 $ 337,259 Regenerative Medicine 109,874 104,169 Other operations (1) 2,450 2,622 Total revenue $ 451,366 $ 444,050 Operating earnings: Advanced Wound Therapeutics $ 99,664 $ 112,885 Regenerative Medicine 39,275 34,019 Other operations (1) 551 447 Non-allocated costs: General headquarter expense (2) (1,568 ) (1,423 ) Equity-based compensation (768 ) (535 ) Business optimization and transaction-related expenses (3) (17,685 ) (15,376 ) Acquired intangible asset amortization (4) (42,201 ) (45,877 ) Total non-allocated costs (62,222 ) (63,211 ) Total operating earnings $ 77,268 $ 84,140 (1) Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England. (2) Represents general headquarter expenses not allocated to the individual segments, including depreciation associated with our purchase accounting fixed asset step up to fair value. (3) Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities. (4) Represents amortization of acquired intangible assets related to our 2011 LBO, our acquisition of Systagenix in October 2013 and other technology acquisitions.

Guarantor Condensed Consolida23

Guarantor Condensed Consolidating Financial Statements (Tables)	3 Months Ended
	Mar. 31, 2016
Guarantor Condensed Consolidating Financial Statements [Abstract]
Guarantor and Non-Guarantor Balance Sheet	Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Balance Sheet March 31, 2016 (in thousands) (unaudited) 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 $ 66,900 $ 7,458 $ 148,860 $ — $ 223,616 Accounts receivable, net — 199,611 61,760 158,512 — 419,883 Inventories, net — 88,390 115,886 112,654 (128,130 ) 188,800 Deferred income taxes — 49,794 8,286 — (14,299 ) 43,781 Prepaid expenses and other — 12,504 3,771 244,835 (231,246 ) 29,864 Intercompany receivables 166 2,128,300 2,871,122 71,087 (5,070,675 ) — Total current assets 564 2,545,499 3,068,283 735,948 (5,444,350 ) 905,944 Net property, plant and equipment — 297,632 59,575 119,019 (210,218 ) 266,008 Deferred income taxes — — — 24,262 — 24,262 Goodwill — 2,511,417 732,138 162,920 — 3,406,475 Identifiable intangible assets, net — 239,052 1,686,938 252,874 — 2,178,864 Other non-current assets — 1,115 282 3,250 — 4,647 Intercompany loan receivables — 735,000 439,937 — (1,174,937 ) — Intercompany investments 592,430 428,232 — — (1,020,662 ) — $ 592,994 $ 6,757,947 $ 5,987,153 $ 1,298,273 $ (7,850,167 ) $ 6,786,200 Liabilities and Equity: Current liabilities: Accounts payable $ — $ 15,452 $ 13,680 $ 23,534 $ — $ 52,666 Accrued expenses and other — 287,448 253,676 66,391 (187,311 ) 420,204 Intercompany payables 10,332 1,801,863 2,745,691 512,789 (5,070,675 ) — Current installments of long-term debt — 22,258 — — — 22,258 Income taxes payable — — 5,159 4,284 (606 ) 8,837 Deferred income taxes — — 113,595 14,299 (14,299 ) 113,595 Total current liabilities 10,332 2,127,021 3,131,801 621,297 (5,272,891 ) 617,560 Long-term debt, net of current installments, discount and debt issuance costs — 4,820,113 — — — 4,820,113 Non-current tax liabilities — 15,259 15,287 3,148 — 33,694 Deferred income taxes — 55,359 603,250 39,862 — 698,471 Other non-current liabilities 909 28,451 2,459 2,790 — 34,609 Intercompany loan payables — 435,607 735,000 4,330 (1,174,937 ) — Intercompany advance — — 1,241 — (1,241 ) — Total liabilities 11,241 7,481,810 4,489,038 671,427 (6,449,069 ) 6,204,447 Total equity 581,753 (723,863 ) 1,498,115 626,846 (1,401,098 ) 581,753 $ 592,994 $ 6,757,947 $ 5,987,153 $ 1,298,273 $ (7,850,167 ) $ 6,786,200 Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Balance Sheet December 31, 2015 (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 $ 12,859 $ 4,919 $ 70,233 $ — $ 88,409 Accounts receivable, net — 202,377 58,080 153,074 — 413,531 Inventories, net — 89,929 87,519 104,904 (101,043 ) 181,309 Deferred income taxes — 66,235 8,286 — — 74,521 Prepaid expenses and other — 15,199 7,519 244,833 (232,566 ) 34,985 Intercompany receivables 166 2,098,061 2,828,639 16,279 (4,943,145 ) — Total current assets 564 2,484,660 2,994,962 589,323 (5,276,754 ) 792,755 Net property, plant and equipment — 294,855 59,833 127,858 (209,470 ) 273,076 Deferred income taxes — — — 29,909 — 29,909 Goodwill — 2,510,765 732,138 162,920 — 3,405,823 Identifiable intangible assets, net — 250,635 1,704,521 263,932 — 2,219,088 Other non-current assets — 1,029 282 4,793 — 6,104 Intercompany loan receivables — 740,000 436,432 — (1,176,432 ) — Intercompany investments 613,540 353,768 — — (967,308 ) — $ 614,104 $ 6,635,712 $ 5,928,168 $ 1,178,735 $ (7,629,964 ) $ 6,726,755 Liabilities and Equity: Current liabilities: Accounts payable $ — $ 18,013 $ 14,129 $ 25,768 $ — $ 57,910 Accrued expenses and other — 234,036 260,404 68,207 (189,207 ) 373,440 Intercompany payables 10,115 1,730,435 2,689,502 513,093 (4,943,145 ) — Current installments of long-term debt — 22,130 — — — 22,130 Income taxes payable — — — 3,561 — 3,561 Deferred income taxes — — 113,595 — — 113,595 Total current liabilities 10,115 2,004,614 3,077,630 610,629 (5,132,352 ) 570,636 Long-term debt, net of current installments, discount and debt issuance costs — 4,720,363 — — — 4,720,363 Non-current tax liabilities — 15,046 14,965 4,822 — 34,833 Deferred income taxes — 110,076 609,281 41,380 — 760,737 Other non-current liabilities 824 29,079 4,472 2,646 — 37,021 Intercompany loan payables — 432,545 740,000 3,887 (1,176,432 ) — Intercompany advance — — 70,045 — (70,045 ) — Total liabilities 10,939 7,311,723 4,516,393 663,364 (6,378,829 ) 6,123,590 Total equity 603,165 (676,011 ) 1,411,775 515,371 (1,251,135 ) 603,165 $ 614,104 $ 6,635,712 $ 5,928,168 $ 1,178,735 $ (7,629,964 ) $ 6,726,755
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) (unaudited) For the three months ended March 31, 2016 Acelity L.P. Inc. Parent Company Kinetic Concepts, Inc. and KCI USA, Inc. Borrower Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenue: Rental $ — $ 150,420 $ — $ 19,679 $ — $ 170,099 Sales — 90,781 245,943 251,262 (306,719 ) 281,267 Total revenue — 241,201 245,943 270,941 (306,719 ) 451,366 Rental expenses 20 81,488 176 35,951 (42,740 ) 74,895 Cost of sales — 99,612 160,795 92,681 (274,509 ) 78,579 Gross profit (loss) (20 ) 60,101 84,972 142,309 10,530 297,892 Selling, general and administrative expenses 748 80,974 42,374 40,733 (385 ) 164,444 Research and development expenses — 5,764 5,019 3,195 — 13,978 Acquired intangible asset amortization — 11,584 19,364 11,254 — 42,202 Operating earnings (loss) (768 ) (38,221 ) 18,215 87,127 10,915 77,268 Non-operating intercompany transactions — (1,402 ) 6,713 (5,352 ) 41 — Interest income and other — 16,508 7,617 71 (24,089 ) 107 Interest expense — (116,088 ) (16,537 ) (16 ) 24,089 (108,552 ) Loss on extinguishment of debt — (3,609 ) — — — (3,609 ) Foreign currency gain (loss) — (13,044 ) 737 7,977 — (4,330 ) Derivative instruments loss — (682 ) — — — (682 ) Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries (768 ) (156,538 ) 16,745 89,807 10,956 (39,798 ) Income tax expense (benefit) — (33,980 ) (846 ) 21,003 — (13,823 ) Earnings (loss) before equity in earnings (loss) of subsidiaries (768 ) (122,558 ) 17,591 68,804 10,956 (25,975 ) Equity in earnings (loss) of subsidiaries (25,207 ) 74,464 68,804 — (118,061 ) — Net earnings (loss) $ (25,975 ) $ (48,094 ) $ 86,395 $ 68,804 $ (107,105 ) $ (25,975 ) Total comprehensive income (loss) $ (21,877 ) $ (43,996 ) $ 90,493 $ 72,902 $ (119,399 ) $ (21,877 ) Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss) (in thousands) (unaudited) For the three months ended March 31, 2015 Acelity L.P. Inc. Parent Company Kinetic Concepts, Inc. and KCI USA, Inc. Borrower Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Revenue: Rental $ — $ 149,698 $ — $ 23,141 $ — $ 172,839 Sales — 83,737 239,691 229,663 (281,880 ) 271,211 Total revenue — 233,435 239,691 252,804 (281,880 ) 444,050 Rental expenses 21 75,873 3,467 41,365 (42,548 ) 78,178 Cost of sales 43 89,496 159,253 87,974 (263,352 ) 73,414 Gross profit (loss) (64 ) 68,066 76,971 123,465 24,020 292,458 Selling, general and administrative expenses 471 68,519 36,716 42,308 (251 ) 147,763 Research and development expenses — 5,617 4,896 4,165 — 14,678 Acquired intangible asset amortization — 13,880 19,456 12,541 — 45,877 Operating earnings (loss) (535 ) (19,950 ) 15,903 64,451 24,271 84,140 Non-operating intercompany transactions — (1,682 ) 30,849 (29,190 ) 23 — Interest income and other — 16,762 3,063 103 (19,781 ) 147 Interest expense — (107,782 ) (16,718 ) (7 ) 19,781 (104,726 ) Foreign currency gain (loss) — 35,006 (1,593 ) (14,013 ) — 19,400 Derivative instruments loss — (3,348 ) — — — (3,348 ) Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries (535 ) (80,994 ) 31,504 21,344 24,294 (4,387 ) Income tax expense (benefit) — 415 141 (412 ) — 144 Earnings (loss) before equity in earnings (loss) of subsidiaries (535 ) (81,409 ) 31,363 21,756 24,294 (4,531 ) Equity in earnings (loss) of subsidiaries (3,996 ) 48,953 21,756 — (66,713 ) — Net earnings (loss) $ (4,531 ) $ (32,456 ) $ 53,119 $ 21,756 $ (42,419 ) $ (4,531 ) Total comprehensive income (loss) $ (11,602 ) $ (39,527 ) $ 46,048 $ 14,685 $ (21,206 ) $ (11,602 )
Guarantor and Non-Guarantor Statement of Cash Flows	Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Statement of Cash Flows (in thousands) (unaudited) For the three months ended March 31, 2016 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) $ (25,975 ) $ (48,094 ) $ 86,395 $ 68,804 $ (107,105 ) $ (25,975 ) Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities 985 144,348 (389 ) (23,268 ) (17,516 ) 104,160 Net cash provided (used) by operating activities (24,990 ) 96,254 86,006 45,536 (124,621 ) 78,185 Cash flows from investing activities: Net additions to property, plant and equipment — (49,827 ) (3,842 ) (10,099 ) 45,320 (18,448 ) Decrease (increase) in identifiable intangible assets and other non-current assets — (88 ) (2,260 ) 1,219 — (1,129 ) Net cash provided (used) by investing activities — (49,915 ) (6,102 ) (8,880 ) 45,320 (19,577 ) Cash flows from financing activities: Settlement of profits interest units (217 ) — — — — (217 ) Proceeds from first lien senior secured notes — 400,000 — — — 400,000 Repayments of long-term debt and capital lease obligations — (317,731 ) — — — (317,731 ) Debt issuance costs — (8,407 ) — — — (8,407 ) Proceeds (payments) on intercompany loans — 8,062 (8,505 ) 443 — — Proceeds (payments) on intercompany investments 25,207 (74,222 ) (68,860 ) 38,574 79,301 — Net cash provided (used) by financing activities 24,990 7,702 (77,365 ) 39,017 79,301 73,645 Effect of exchange rate changes on cash and cash equivalents — — — 2,954 — 2,954 Net increase (decrease) in cash and cash equivalents — 54,041 2,539 78,627 — 135,207 Cash and cash equivalents, beginning of period 398 12,859 4,919 70,233 — 88,409 Cash and cash equivalents, end of period $ 398 $ 66,900 $ 7,458 $ 148,860 $ — $ 223,616 Condensed Consolidating Parent Company, Co-Issuers, Guarantor and Non-Guarantor Statement of Cash Flows (in thousands) (unaudited) For the three months ended March 31, 2015 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) $ (4,531 ) $ (32,456 ) $ 53,119 $ 21,756 $ (42,419 ) $ (4,531 ) Adjustments to reconcile net loss to net cash provided (used) by operating activities 1,107 48,156 52,609 15,657 (10,047 ) 107,482 Net cash provided (used) by operating activities (3,424 ) 15,700 105,728 37,413 (52,466 ) 102,951 Cash flows from investing activities: Net additions to property, plant and equipment — (26,027 ) (2,356 ) (1,082 ) 15,618 (13,847 ) Decrease (increase) in identifiable intangible assets and other non-current assets — (130 ) (1,820 ) 129 — (1,821 ) Net cash provided (used) by investing activities — (26,157 ) (4,176 ) (953 ) 15,618 (15,668 ) Cash flows from financing activities: Distribution to limited partners (55 ) — — — — (55 ) Settlement of profits interest units (517 ) — — — — (517 ) Repayments of long-term debt and capital lease obligations — (6,446 ) — 31 — (6,415 ) Payment of debt issuance costs — (6,256 ) — — — (6,256 ) Proceeds (payments) on intercompany loans — 8,063 (6,770 ) (1,293 ) — — Proceeds (payments) on intercompany investments 3,996 24,124 (96,281 ) 31,313 36,848 — Net cash provided (used) by financing activities 3,424 19,485 (103,051 ) 30,051 36,848 (13,243 ) Effect of exchange rate changes on cash and cash equivalents — — — (7,072 ) — (7,072 ) Net increase (decrease) in cash and cash equivalents — 9,028 (1,499 ) 59,439 — 66,968 Cash and cash equivalents, beginning of period 398 41,027 1,499 140,617 — 183,541 Cash and cash equivalents, end of period $ 398 $ 50,055 $ — $ 200,056 $ — $ 250,509

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Details) $ in Thousands	Mar. 31, 2016USD ($)segment	Dec. 31, 2015USD ($)
Basis of Presentation and Principles of Consolidation [Abstract]
Number of reportable operating segments | segment	2
Recently Adopted Accounting Standards [Abstract]
Debt Issuance Costs, Net	$ 55,085	$ 54,651
Credit Concentration Risk [Member] | Interest Rate Swap [Member]
Concentration of Credit Risk [Abstract]
Derivative, Notional Amount	$ 459,300

Acquisitions and Divestitures25

Acquisitions and Divestitures Acquisitions (Details) - USD ($) $ in Thousands	Dec. 01, 2015	Mar. 31, 2016	Dec. 31, 2015
Business Acquisition [Line Items]
Goodwill		$ 3,406,475	$ 3,405,823
SNap Business [Member]
Business Acquisition [Line Items]
Goodwill		28,177	27,525
Goodwill, Purchase Accounting Adjustments		652
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory		1,741	1,741
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables		125	125
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment		250	250
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable		(2,352)	(713)
Assumed Current Liability Purchase Accounting Adjustment		(1,639)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other		0	(987)
Assumed Non-current Liability Purchase Accounting Adjustment		987
Businesses acquired in purchase transaction, net of cash acquired	$ 42,500	42,541
Customer Relationships [Member] | SNap Business [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		5,800	5,800
Developed Technology [Member] | SNap Business [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		6,400	6,400
Tradenames [Member] | SNap Business [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		$ 2,400	$ 2,400

Supplemental Balance Sheet Da26

Supplemental Balance Sheet Data - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Billed trade accounts receivable	$ 440,710	$ 429,556
Unbilled receivables	42,032	48,795
Less: Allowance for revenue adjustments	(62,767)	(66,868)
Gross trade accounts receivable	419,975	411,483
Less: Allowance for bad debt	(12,425)	(11,372)
Net trade accounts receivable	407,550	400,111
Other receivables	12,333	13,420
Accounts receivable, net	$ 419,883	$ 413,531

Supplemental Balance Sheet Da27

Supplemental Balance Sheet Data - Inventories, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory [Line Items]
Finished goods and tissue available for distribution	$ 139,589	$ 133,293
Goods and tissue in-process	13,677	9,778
Raw materials, supplies, parts and unprocessed tissue	65,767	67,433
Inventories, gross	219,033	210,504
Less: Amounts expected to be converted into equipment for short-term rental	(10,580)	(9,597)
Reserve for excess and obsolete inventory	(19,653)	(19,598)
Inventories, net	$ 188,800	$ 181,309

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($)		3 Months Ended
		Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Long-term debt, gross		$ 4,937,691,000	$ 4,842,886,000
Less: Discount, net of accretion		(40,235,000)	(45,742,000)
Less: Debt issuance costs, net of amortization		(55,085,000)	(54,651,000)
Long-term Debt		4,842,371,000	4,742,493,000
Less: Current installments		(22,258,000)	(22,130,000)
Long-term debt, net of current installments, discount and debt issuance costs		4,820,113,000	4,720,363,000
Revolving Credit Facility [Member] | Senior Revolving Credit Facility [Member]
Senior Secured Credit Facilities [Abstract]
Credit facility, maximum borrowing capacity		200,000,000
Line of Credit Facility, Amount Outstanding		0	0
Letters of credit, amount outstanding		37,900,000	38,200,000
Credit facility, remaining borrowing capacity		$ 162,100,000	161,800,000
Credit facility, unused capacity, commitment fee percentage		0.50%
Term Credit Facilities [Member] | Senior Dollar Term E-1 Credit Facility Due 2018 [Member]
Debt Instrument [Line Items]
Long-term debt, gross		$ 1,902,907,000	1,907,774,000
Less: Discount, net of accretion		(18,670,000)	(20,792,000)
Term Credit Facilities [Member] | Senior Euro Term E-1 Credit Facility Due 2018 [Member]
Debt Instrument [Line Items]
Long-term debt, gross		272,784,000	260,946,000
Less: Discount, net of accretion		(4,919,000)	(5,224,000)
Term Credit Facilities [Member] | Senior Term E-2 Credit Facility Due 2016 [Member] [Member]
Debt Instrument [Line Items]
Long-term debt, gross	[1]	0	312,166,000
Less: Discount, net of accretion		0	(1,770,000)
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
Less: Discount, net of accretion		(14,533,000)	(15,729,000)
Senior Secured Notes [Member] | 7.875 First Lien Senior Secured Notes due 2021 [Member]
Debt Instrument [Line Items]
Long-term debt, gross		400,000,000	0
7.875% First Lien Senior Secured Notes [Abstract]
Debt Instrument, Face Amount		$ 400,000,000
Debt Instrument, Interest Rate, Stated Percentage		7.875%
Redemption price of notes as percentage of principal plus accrued interest in event of change of control		101.00%
Debt Instrument, Collateral, Maximum Percentage of Voting Stock of Certain Subsidiaries		65.00%
Senior Secured Notes [Member] | 7.875 First Lien Senior Secured Notes due 2021 [Member] | Debt Instrument, Redemption, Period One [Member]
7.875% First Lien Senior Secured Notes [Abstract]
Debt Instrument, Subject to Early Redemption, Percentage of Aggregate Principal		40.00%
Debt Instrument, Redemption Price, Percentage		107.875%
Debt Instrument, Optional Redemption Percentage with Make Whole Premium		100.00%
Debt Instrument, Redemption Price, Percentage		103.938%
Senior Secured Notes [Member] | 7.875 First Lien Senior Secured Notes due 2021 [Member] | Debt Instrument, Redemption, Period Two [Member]
7.875% First Lien Senior Secured Notes [Abstract]
Debt Instrument, Redemption Price, Percentage		101.969%
Senior Secured Notes [Member] | 7.875 First Lien Senior Secured Notes due 2021 [Member] | Debt Instrument, Redemption, Period Three [Member]
7.875% First Lien Senior Secured 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
Less: Discount, net of accretion		(2,113,000)	(2,227,000)
Banks Which Are Not Party To Senior Secured Credit Facility [Member] | Senior Revolving Credit Facility [Member]
Senior Secured Credit Facilities [Abstract]
Letters of credit, amount outstanding		7,700,000	$ 8,500,000
Maturing on November 4, 2017 [Member] | Revolving Credit Facility [Member] | Senior Revolving Credit Facility [Member]
Senior Secured Credit Facilities [Abstract]
Credit facility, remaining borrowing capacity		171,300,000
Maturing on November 4, 2016 [Member] | Revolving Credit Facility [Member] | Senior Revolving Credit Facility [Member]
Senior Secured Credit Facilities [Abstract]
Credit facility, remaining borrowing capacity		$ 28,700,000
[1]	All amounts outstanding under the Senior Term E-2 Credit Facility were paid in full on February 9, 2016 with proceeds from the offering of the 7.875% First Lien Senior Secured Notes due 2021.

Derivative Financial Instrume29

Derivative Financial Instruments and Fair Value Measurements - Derivative Financial Instruments (Details)	Apr. 06, 2016USD ($)agreement	Mar. 31, 2016USD ($)agreement	Dec. 31, 2015USD ($)
Interest Rate Protection [Abstract]
Collateral posted		$ 0
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, minimum		1.25%
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		1,800,000
Not Designated as Hedging Instrument [Member] | Foreign Currency Exchange Contracts [Member]
Foreign Currency Exchange Risk Mitigation [Abstract]
Foreign Currency Derivative Instruments Not Designated as Hedging Instruments, Notional Amount		0	$ 0
Senior Secured Credit Facility [Member]
Derivative [Line Items]
Long-term Debt, Fair Value		2,164,000,000	2,400,000,000
Fixed Rate Long-Term Debt [Member]
Derivative [Line Items]
Long-term Debt, Fair Value		2,700,000,000	$ 2,257,000,000
Interest Rate Swap - 2.256%, effective December 31, 2013 [Member] | Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Derivative, Notional Amount		$ 459,333,000
Interest Rate Protection [Abstract]
Fixed Interest Rate		2.256%
Interest Rate Swap - 2.249%, effective December 31, 2013 [Member] | Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Derivative, Notional Amount		$ 459,333,000
Interest Rate Protection [Abstract]
Fixed Interest Rate		2.249%
Interest Rate Swap - 2.250%, effective December 31, 2013 [Member] | Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Derivative, Notional Amount		$ 459,333,000
Interest Rate Protection [Abstract]
Fixed Interest Rate		2.25%
Subsequent Event [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Derivative, Notional Amount	$ 1,165,000,000
Interest Rate Protection [Abstract]
Number of interest rate agreements held | agreement	3
Subsequent Event [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Minimum [Member]
Interest Rate Protection [Abstract]
Notional amount decreases by quarter	$ 4,400,000
Subsequent Event [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Maximum [Member]
Interest Rate Protection [Abstract]
Notional amount decreases by quarter	$ 84,500,000

Derivative Financial Instrume30

Derivative Financial Instruments and Fair Value Measurements - Fair Value and Balance Sheet Locations (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Derivative asset, fair value	$ 0	$ 0
Derivative liability, fair value	9,431	12,243
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 assets [Member]
Derivatives, Fair Value [Line Items]
Derivative asset, fair value	0	0
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Accrued expenses and other [Member]
Derivatives, Fair Value [Line Items]
Derivative liability, fair value	9,431	12,243
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | Other non-current liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative liability, fair value	$ 0	$ 0

Derivative Financial Instrume31

Derivative Financial Instruments and Fair Value Measurements - Gain (Loss) on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments gain (loss)	$ (682)	$ (3,348)
Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments gain (loss)	(682)	(3,348)
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments gain (loss)	(682)	(3,348)
Not Designated as Hedging Instrument [Member] | Foreign Currency Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative instruments gain (loss)	$ 0	$ 0

Accumulated Other Comprehensi32

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Other Comprehenisve Income Loss, Net of Tax [Line Items]
Accumulated other comprehensive income (loss), net	$ (15,636)		$ (19,734)
Foreign currency translation adjustment, net of tax benefit of $755	4,098	$ (7,071)
Accumulated Translation Adjustment [Member]
Other Comprehenisve Income Loss, Net of Tax [Line Items]
Accumulated other comprehensive income (loss), net	(15,636)		(19,734)
Foreign currency translation adjustment, net of tax benefit of $755	4,098
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, before Tax	0
Accumulated Other Comprehensive Income (Loss) [Member]
Other Comprehenisve Income Loss, Net of Tax [Line Items]
Accumulated other comprehensive income (loss), net	(15,636)		$ (19,734)
Foreign currency translation adjustment, net of tax benefit of $755	$ 4,098

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2014USD ($)	Mar. 31, 2016USD ($)suit	Dec. 31, 2015USD ($)
Loss Contingencies [Line Items]
Other non-current liabilities		$ 34,609	$ 37,021
LifeNet [Member]
Loss Contingencies [Line Items]
Litigation Settlement, Expense	$ 34,700
Other non-current liabilities	$ 34,700
Wake Forest Settlement [Member]
Loss Contingencies [Line Items]
Other non-current liabilities		28,000
Accrued Liabilities and Other Liabilities		$ 83,800
Alloderm [Member] | LifeCell Corporation [Member] | Damages from Product Defects [Member]
Loss Contingencies [Line Items]
Number of pending lawsuits | suit		355
Repliform [Member] | LifeCell Corporation [Member] | Damages from Product Defects [Member]
Loss Contingencies [Line Items]
Number of pending lawsuits | suit		258
Cases Filed in Consolidated Docket [Member] | Repliform [Member] | LifeCell Corporation [Member] | Damages from Product Defects [Member]
Loss Contingencies [Line Items]
Number of pending lawsuits | suit		254

Segment Information (Details)

Segment Information (Details) $ in Thousands		3 Months Ended
		Mar. 31, 2016USD ($)segmentCountries	Mar. 31, 2015USD ($)
Segment Reporting Information [Line Items]
Approximate number of countries in which the entity has operations | Countries		80
Number of reportable operating segments | segment		2
Number of Global Business Units | segment		2
Total revenue		$ 451,366	$ 444,050
Operating earnings (loss)		77,268	84,140
Non-allocated costs:
General headquarter expense	[1]	(1,568)	(1,423)
Equity-based compensation		(768)	(535)
Business optimization and transaction-related expenses	[2]	(17,685)	(15,376)
Acquired intangible asset amortization	[3]	(42,201)	(45,877)
Total non-allocated costs		(62,222)	(63,211)
Advanced Wound Therapeutics [Member]
Segment Reporting Information [Line Items]
Total revenue		339,042	337,259
Operating earnings (loss)		99,664	112,885
Regenerative Medicine [Member]
Segment Reporting Information [Line Items]
Total revenue		109,874	104,169
Operating earnings (loss)		39,275	34,019
Other Segments [Member]
Segment Reporting Information [Line Items]
Total revenue	[4]	2,450	2,622
Operating earnings (loss)	[4]	$ 551	$ 447
[1]	Represents general headquarter expenses not allocated to the individual segments, including depreciation associated with our purchase accounting fixed asset step up to fair value.
[2]	Represents restructuring-related expenses associated with our business optimization initiatives as well as management fees and costs associated with acquisition, disposition and financing activities.
[3]	Represents amortization of acquired intangible assets related to our 2011 LBO, our acquisition of Systagenix in October 2013 and other technology acquisitions.
[4]	Represents contract manufacturing operations conducted at our manufacturing facility in Gargrave, England.

Guarantor Condensed Consolida35

Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 223,616	$ 88,409	$ 250,509	$ 183,541
Accounts receivable, net	419,883	413,531
Inventories, net	188,800	181,309
Deferred income taxes	43,781	74,521
Prepaid expenses and other	29,864	34,985
Intercompany receivables	0	0
Total current assets	905,944	792,755
Net property, plant and equipment	266,008	273,076
Deferred income taxes	24,262	29,909
Goodwill	3,406,475	3,405,823
Identifiable intangible assets, net	2,178,864	2,219,088
Other non-current assets	4,647	6,104
Intercompany loan receivables	0	0
Intercompany investments	0	0
Total assets	6,786,200	6,726,755
Current liabilities:
Accounts payable	52,666	57,910
Accrued expenses and other	420,204	373,440
Intercompany payables	0	0
Current installments of long-term debt	22,258	22,130
Income taxes payable	8,837	3,561
Deferred income taxes	113,595	113,595
Total current liabilities	617,560	570,636
Long-term debt, net of current installments, discount and debt issuance costs	4,820,113	4,720,363
Non-current tax liabilities	33,694	34,833
Deferred income taxes	698,471	760,737
Other non-current liabilities	34,609	37,021
Intercompany loan payables	0	0
intercompany advance	0	0
Total liabilities	6,204,447	6,123,590
Equity:
Total equity	581,753	603,165
Total liabilities and shareholders' equity	6,786,200	6,726,755
Parent Company [Member]
Current assets:
Cash and cash equivalents	398	398	398	398
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
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	592,430	613,540
Total assets	592,994	614,104
Current liabilities:
Accounts payable	0	0
Accrued expenses and other	0	0
Intercompany payables	10,332	10,115
Current installments of long-term debt	0	0
Income taxes payable	0	0
Deferred income taxes	0	0
Total current liabilities	10,332	10,115
Long-term debt, net of current installments, discount and debt issuance costs	0	0
Non-current tax liabilities	0	0
Deferred income taxes	0	0
Other non-current liabilities	909	824
Intercompany loan payables	0	0
intercompany advance	0	0
Total liabilities	11,241	10,939
Equity:
Total equity	581,753	603,165
Total liabilities and shareholders' equity	592,994	614,104
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member]
Current assets:
Cash and cash equivalents	66,900	12,859	50,055	41,027
Accounts receivable, net	199,611	202,377
Inventories, net	88,390	89,929
Deferred income taxes	49,794	66,235
Prepaid expenses and other	12,504	15,199
Intercompany receivables	2,128,300	2,098,061
Total current assets	2,545,499	2,484,660
Net property, plant and equipment	297,632	294,855
Deferred income taxes	0	0
Goodwill	2,511,417	2,510,765
Identifiable intangible assets, net	239,052	250,635
Other non-current assets	1,115	1,029
Intercompany loan receivables	735,000	740,000
Intercompany investments	428,232	353,768
Total assets	6,757,947	6,635,712
Current liabilities:
Accounts payable	15,452	18,013
Accrued expenses and other	287,448	234,036
Intercompany payables	1,801,863	1,730,435
Current installments of long-term debt	22,258	22,130
Income taxes payable	0	0
Deferred income taxes	0	0
Total current liabilities	2,127,021	2,004,614
Long-term debt, net of current installments, discount and debt issuance costs	4,820,113	4,720,363
Non-current tax liabilities	15,259	15,046
Deferred income taxes	55,359	110,076
Other non-current liabilities	28,451	29,079
Intercompany loan payables	435,607	432,545
intercompany advance	0	0
Total liabilities	7,481,810	7,311,723
Equity:
Total equity	(723,863)	(676,011)
Total liabilities and shareholders' equity	6,757,947	6,635,712
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	7,458	4,919	0	1,499
Accounts receivable, net	61,760	58,080
Inventories, net	115,886	87,519
Deferred income taxes	8,286	8,286
Prepaid expenses and other	3,771	7,519
Intercompany receivables	2,871,122	2,828,639
Total current assets	3,068,283	2,994,962
Net property, plant and equipment	59,575	59,833
Deferred income taxes	0	0
Goodwill	732,138	732,138
Identifiable intangible assets, net	1,686,938	1,704,521
Other non-current assets	282	282
Intercompany loan receivables	439,937	436,432
Intercompany investments	0	0
Total assets	5,987,153	5,928,168
Current liabilities:
Accounts payable	13,680	14,129
Accrued expenses and other	253,676	260,404
Intercompany payables	2,745,691	2,689,502
Current installments of long-term debt	0	0
Income taxes payable	5,159	0
Deferred income taxes	113,595	113,595
Total current liabilities	3,131,801	3,077,630
Long-term debt, net of current installments, discount and debt issuance costs	0	0
Non-current tax liabilities	15,287	14,965
Deferred income taxes	603,250	609,281
Other non-current liabilities	2,459	4,472
Intercompany loan payables	735,000	740,000
intercompany advance	1,241	70,045
Total liabilities	4,489,038	4,516,393
Equity:
Total equity	1,498,115	1,411,775
Total liabilities and shareholders' equity	5,987,153	5,928,168
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	148,860	70,233	200,056	140,617
Accounts receivable, net	158,512	153,074
Inventories, net	112,654	104,904
Deferred income taxes	0	0
Prepaid expenses and other	244,835	244,833
Intercompany receivables	71,087	16,279
Total current assets	735,948	589,323
Net property, plant and equipment	119,019	127,858
Deferred income taxes	24,262	29,909
Goodwill	162,920	162,920
Identifiable intangible assets, net	252,874	263,932
Other non-current assets	3,250	4,793
Intercompany loan receivables	0	0
Intercompany investments	0	0
Total assets	1,298,273	1,178,735
Current liabilities:
Accounts payable	23,534	25,768
Accrued expenses and other	66,391	68,207
Intercompany payables	512,789	513,093
Current installments of long-term debt	0	0
Income taxes payable	4,284	3,561
Deferred income taxes	14,299	0
Total current liabilities	621,297	610,629
Long-term debt, net of current installments, discount and debt issuance costs	0	0
Non-current tax liabilities	3,148	4,822
Deferred income taxes	39,862	41,380
Other non-current liabilities	2,790	2,646
Intercompany loan payables	4,330	3,887
intercompany advance	0	0
Total liabilities	671,427	663,364
Equity:
Total equity	626,846	515,371
Total liabilities and shareholders' equity	1,298,273	1,178,735
Eliminations [Member]
Current assets:
Cash and cash equivalents	0	0	$ 0	$ 0
Accounts receivable, net	0	0
Inventories, net	(128,130)	(101,043)
Deferred income taxes	(14,299)	0
Prepaid expenses and other	(231,246)	(232,566)
Intercompany receivables	(5,070,675)	(4,943,145)
Total current assets	(5,444,350)	(5,276,754)
Net property, plant and equipment	(210,218)	(209,470)
Deferred income taxes	0	0
Goodwill	0	0
Identifiable intangible assets, net	0	0
Other non-current assets	0	0
Intercompany loan receivables	(1,174,937)	(1,176,432)
Intercompany investments	(1,020,662)	(967,308)
Total assets	(7,850,167)	(7,629,964)
Current liabilities:
Accounts payable	0	0
Accrued expenses and other	(187,311)	(189,207)
Intercompany payables	(5,070,675)	(4,943,145)
Current installments of long-term debt	0	0
Income taxes payable	(606)	0
Deferred income taxes	(14,299)	0
Total current liabilities	(5,272,891)	(5,132,352)
Long-term debt, net of current installments, discount and debt issuance costs	0	0
Non-current tax liabilities	0	0
Deferred income taxes	0	0
Other non-current liabilities	0	0
Intercompany loan payables	(1,174,937)	(1,176,432)
intercompany advance	(1,241)	(70,045)
Total liabilities	(6,449,069)	(6,378,829)
Equity:
Total equity	(1,401,098)	(1,251,135)
Total liabilities and shareholders' equity	$ (7,850,167)	$ (7,629,964)

Guarantor Condensed Consolida36

Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Condensed Income Statements, Captions [Line Items]
Rental	$ 170,099	$ 172,839
Sales	281,267	271,211
Total revenue	451,366	444,050
Rental expenses	74,895	78,178
Cost of sales	78,579	73,414
Gross profit (loss)	297,892	292,458
Selling, general and administrative expenses	164,444	147,763
Research and development expenses	13,978	14,678
Acquired intangible asset amortization	42,202	45,877
Operating earnings (loss)	77,268	84,140
Non-operating intercompany transactions	0	0
Interest income and other	107	147
Interest expense	(108,552)	(104,726)
Loss on extinguishment of debt	(3,609)	0
Foreign currency gain (loss)	(4,330)	19,400
Derivative instruments loss	(682)	(3,348)
Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries	(39,798)	(4,387)
Income tax expense (benefit)	(13,823)	144
Earnings (loss) before equity in earnings (loss) of subsidiaries	(25,975)	(4,531)
Equity in earnings (loss) of subsidiaries	0	0
Net earnings (loss)	(25,975)	(4,531)
Total comprehensive income (loss)	(21,877)	(11,602)
Parent Company [Member]
Condensed Income Statements, Captions [Line Items]
Rental	0	0
Sales	0	0
Total revenue	0	0
Rental expenses	20	21
Cost of sales	0	43
Gross profit (loss)	(20)	(64)
Selling, general and administrative expenses	748	471
Research and development expenses	0	0
Acquired intangible asset amortization	0	0
Operating earnings (loss)	(768)	(535)
Non-operating intercompany transactions	0	0
Interest income and other	0	0
Interest expense	0	0
Loss on extinguishment of debt	0
Foreign currency gain (loss)	0	0
Derivative instruments loss	0	0
Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries	(768)	(535)
Income tax expense (benefit)	0	0
Earnings (loss) before equity in earnings (loss) of subsidiaries	(768)	(535)
Equity in earnings (loss) of subsidiaries	(25,207)	(3,996)
Net earnings (loss)	(25,975)	(4,531)
Total comprehensive income (loss)	(21,877)	(11,602)
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member]
Condensed Income Statements, Captions [Line Items]
Rental	150,420	149,698
Sales	90,781	83,737
Total revenue	241,201	233,435
Rental expenses	81,488	75,873
Cost of sales	99,612	89,496
Gross profit (loss)	60,101	68,066
Selling, general and administrative expenses	80,974	68,519
Research and development expenses	5,764	5,617
Acquired intangible asset amortization	11,584	13,880
Operating earnings (loss)	(38,221)	(19,950)
Non-operating intercompany transactions	(1,402)	(1,682)
Interest income and other	16,508	16,762
Interest expense	(116,088)	(107,782)
Loss on extinguishment of debt	(3,609)
Foreign currency gain (loss)	(13,044)	35,006
Derivative instruments loss	(682)	(3,348)
Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries	(156,538)	(80,994)
Income tax expense (benefit)	(33,980)	415
Earnings (loss) before equity in earnings (loss) of subsidiaries	(122,558)	(81,409)
Equity in earnings (loss) of subsidiaries	74,464	48,953
Net earnings (loss)	(48,094)	(32,456)
Total comprehensive income (loss)	(43,996)	(39,527)
Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Rental	0	0
Sales	245,943	239,691
Total revenue	245,943	239,691
Rental expenses	176	3,467
Cost of sales	160,795	159,253
Gross profit (loss)	84,972	76,971
Selling, general and administrative expenses	42,374	36,716
Research and development expenses	5,019	4,896
Acquired intangible asset amortization	19,364	19,456
Operating earnings (loss)	18,215	15,903
Non-operating intercompany transactions	6,713	30,849
Interest income and other	7,617	3,063
Interest expense	(16,537)	(16,718)
Loss on extinguishment of debt	0
Foreign currency gain (loss)	737	(1,593)
Derivative instruments loss	0	0
Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries	16,745	31,504
Income tax expense (benefit)	(846)	141
Earnings (loss) before equity in earnings (loss) of subsidiaries	17,591	31,363
Equity in earnings (loss) of subsidiaries	68,804	21,756
Net earnings (loss)	86,395	53,119
Total comprehensive income (loss)	90,493	46,048
Non-Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Rental	19,679	23,141
Sales	251,262	229,663
Total revenue	270,941	252,804
Rental expenses	35,951	41,365
Cost of sales	92,681	87,974
Gross profit (loss)	142,309	123,465
Selling, general and administrative expenses	40,733	42,308
Research and development expenses	3,195	4,165
Acquired intangible asset amortization	11,254	12,541
Operating earnings (loss)	87,127	64,451
Non-operating intercompany transactions	(5,352)	(29,190)
Interest income and other	71	103
Interest expense	(16)	(7)
Loss on extinguishment of debt	0
Foreign currency gain (loss)	7,977	(14,013)
Derivative instruments loss	0	0
Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries	89,807	21,344
Income tax expense (benefit)	21,003	(412)
Earnings (loss) before equity in earnings (loss) of subsidiaries	68,804	21,756
Equity in earnings (loss) of subsidiaries	0	0
Net earnings (loss)	68,804	21,756
Total comprehensive income (loss)	72,902	14,685
Eliminations [Member]
Condensed Income Statements, Captions [Line Items]
Rental	0	0
Sales	(306,719)	(281,880)
Total revenue	(306,719)	(281,880)
Rental expenses	(42,740)	(42,548)
Cost of sales	(274,509)	(263,352)
Gross profit (loss)	10,530	24,020
Selling, general and administrative expenses	(385)	(251)
Research and development expenses	0	0
Acquired intangible asset amortization	0	0
Operating earnings (loss)	10,915	24,271
Non-operating intercompany transactions	41	23
Interest income and other	(24,089)	(19,781)
Interest expense	24,089	19,781
Loss on extinguishment of debt	0
Foreign currency gain (loss)	0	0
Derivative instruments loss	0	0
Earnings (loss) before income taxes (benefit) and equity in earnings (loss) of subsidiaries	10,956	24,294
Income tax expense (benefit)	0	0
Earnings (loss) before equity in earnings (loss) of subsidiaries	10,956	24,294
Equity in earnings (loss) of subsidiaries	(118,061)	(66,713)
Net earnings (loss)	(107,105)	(42,419)
Total comprehensive income (loss)	$ (119,399)	$ (21,206)

Guarantor Condensed Consolida37

Guarantor Condensed Consolidating Financial Statements - Condensed Consolidated Cash Flow (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net earnings (loss)	$ (25,975)	$ (4,531)
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities	104,160	107,482
Net cash provided (used) by operating activities	78,185	102,951
Cash flows from investing activities
Net additions to property, plant and equipment	(18,448)	(13,847)
Decrease (increase) in identifiable intangible assets and other non-current assets	(1,129)	(1,821)
Net cash provided (used) by investing activities	(19,577)	(15,668)
Cash flows from financing activities:
Distribution to limited partners	0	(55)
Settlement of profits interest units	(217)	(517)
Proceeds from first lien senior secured notes	400,000	0
Repayments of long-term debt and capital lease obligations	(317,731)	(6,415)
Debt issuance costs	(8,407)	(6,256)
Proceeds (payments) on intercompany loans	0	0
Proceeds (payments) on intercompany investments	0	0
Net cash provided (used) by financing activities	73,645	(13,243)
Effect of exchange rate changes on cash and cash equivalents	2,954	(7,072)
Net increase (decrease) in cash and cash equivalents	135,207	66,968
Cash and cash equivalents, beginning of period	88,409	183,541
Cash and cash equivalents, end of period	223,616	250,509
Parent Company [Member]
Cash flows from operating activities:
Net earnings (loss)	(25,975)	(4,531)
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities	985	1,107
Net cash provided (used) by operating activities	(24,990)	(3,424)
Cash flows from investing activities
Net additions to property, plant and equipment	0	0
Decrease (increase) in identifiable intangible assets and other non-current assets	0	0
Net cash provided (used) by investing activities	0	0
Cash flows from financing activities:
Distribution to limited partners		(55)
Settlement of profits interest units	(217)	(517)
Proceeds from first lien senior secured notes	0
Repayments of long-term debt and capital lease obligations	0	0
Debt issuance costs	0	0
Proceeds (payments) on intercompany loans	0	0
Proceeds (payments) on intercompany investments	25,207	3,996
Net cash provided (used) by financing activities	24,990	3,424
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of period	398	398
Cash and cash equivalents, end of period	398	398
Kinetic Concepts, Inc. and KCI USA, Inc. Borrower [Member]
Cash flows from operating activities:
Net earnings (loss)	(48,094)	(32,456)
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities	144,348	48,156
Net cash provided (used) by operating activities	96,254	15,700
Cash flows from investing activities
Net additions to property, plant and equipment	(49,827)	(26,027)
Decrease (increase) in identifiable intangible assets and other non-current assets	(88)	(130)
Net cash provided (used) by investing activities	(49,915)	(26,157)
Cash flows from financing activities:
Distribution to limited partners		0
Settlement of profits interest units	0	0
Proceeds from first lien senior secured notes	400,000
Repayments of long-term debt and capital lease obligations	(317,731)	(6,446)
Debt issuance costs	(8,407)	(6,256)
Proceeds (payments) on intercompany loans	8,062	8,063
Proceeds (payments) on intercompany investments	(74,222)	24,124
Net cash provided (used) by financing activities	7,702	19,485
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	54,041	9,028
Cash and cash equivalents, beginning of period	12,859	41,027
Cash and cash equivalents, end of period	66,900	50,055
Guarantor Subsidiaries [Member]
Cash flows from operating activities:
Net earnings (loss)	86,395	53,119
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities	(389)	52,609
Net cash provided (used) by operating activities	86,006	105,728
Cash flows from investing activities
Net additions to property, plant and equipment	(3,842)	(2,356)
Decrease (increase) in identifiable intangible assets and other non-current assets	(2,260)	(1,820)
Net cash provided (used) by investing activities	(6,102)	(4,176)
Cash flows from financing activities:
Distribution to limited partners		0
Settlement of profits interest units	0	0
Proceeds from first lien senior secured notes	0
Repayments of long-term debt and capital lease obligations	0	0
Debt issuance costs	0	0
Proceeds (payments) on intercompany loans	(8,505)	(6,770)
Proceeds (payments) on intercompany investments	(68,860)	(96,281)
Net cash provided (used) by financing activities	(77,365)	(103,051)
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	2,539	(1,499)
Cash and cash equivalents, beginning of period	4,919	1,499
Cash and cash equivalents, end of period	7,458	0
Non-Guarantor Subsidiaries [Member]
Cash flows from operating activities:
Net earnings (loss)	68,804	21,756
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities	(23,268)	15,657
Net cash provided (used) by operating activities	45,536	37,413
Cash flows from investing activities
Net additions to property, plant and equipment	(10,099)	(1,082)
Decrease (increase) in identifiable intangible assets and other non-current assets	1,219	129
Net cash provided (used) by investing activities	(8,880)	(953)
Cash flows from financing activities:
Distribution to limited partners		0
Settlement of profits interest units	0	0
Proceeds from first lien senior secured notes	0
Repayments of long-term debt and capital lease obligations	0	31
Debt issuance costs	0	0
Proceeds (payments) on intercompany loans	443	(1,293)
Proceeds (payments) on intercompany investments	38,574	31,313
Net cash provided (used) by financing activities	39,017	30,051
Effect of exchange rate changes on cash and cash equivalents	2,954	(7,072)
Net increase (decrease) in cash and cash equivalents	78,627	59,439
Cash and cash equivalents, beginning of period	70,233	140,617
Cash and cash equivalents, end of period	148,860	200,056
Eliminations [Member]
Cash flows from operating activities:
Net earnings (loss)	(107,105)	(42,419)
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities	(17,516)	(10,047)
Net cash provided (used) by operating activities	(124,621)	(52,466)
Cash flows from investing activities
Net additions to property, plant and equipment	45,320	15,618
Decrease (increase) in identifiable intangible assets and other non-current assets	0	0
Net cash provided (used) by investing activities	45,320	15,618
Cash flows from financing activities:
Distribution to limited partners		0
Settlement of profits interest units	0	0
Proceeds from first lien senior secured notes	0
Repayments of long-term debt and capital lease obligations	0	0
Debt issuance costs	0	0
Proceeds (payments) on intercompany loans	0	0
Proceeds (payments) on intercompany investments	79,301	36,848
Net cash provided (used) by financing activities	79,301	36,848
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents, beginning of period	0	0
Cash and cash equivalents, end of period	$ 0	$ 0