Supplemental Balance Sheet Data

9 Months Ended

Sep. 30, 2011

Supplemental Balance Sheet Data [Abstract]

Supplemental Balance Sheet Data

NOTE 2.     Supplemental Balance Sheet Data

(a)     Accounts Receivable, net

Accounts receivable consist of the following (dollars in thousands):

	September 30,			December 31,
	2011			2010
Gross trade accounts receivable:
Americas:
AHS and TSS	$	307,940		$	341,874
LifeCell		42,898			39,251
Subtotal Americas		350,838			381,125
EMEA		111,387			106,174
APAC		13,877			11,583
Total trade accounts receivable		476,102			498,882
Less:  Allowance for revenue adjustments		(69,834	)		(87,035	)
Gross trade accounts receivable		406,268			411,847
Less:  Allowance for bad debt		(9,854	)		(9,970	)
Net trade accounts receivable		396,414			401,877
Other receivables		7,590			12,206
	$	404,004		$	414,083

Americas trade accounts receivable consist of amounts due directly from acute and extended care organizations; third-party payers (“TPP”), both governmental and non-governmental; and patient pay accounts.  Included within the TPP accounts receivable balances are amounts that have been or will be billed to patients once the primary payer portion of the claim has been settled by the TPP.  EMEA and APAC trade accounts receivable consist of amounts due primarily from acute care organizations.

The domestic TPP reimbursement process requires extensive documentation which has had the effect of slowing both the billing and cash collection cycles relative to the rest of the business and, therefore, could increase total accounts receivable.  Because of the extensive documentation required and the requirement to settle a claim with the primary payer prior to billing the secondary and/or patient portion of the claim, the collection period for a claim in our homecare business may, in some cases, extend beyond one year prior to full settlement of the claim.

We utilize a combination of factors in evaluating the collectibility of our accounts receivable.  For unbilled receivables, we establish reserves to allow for expected denied or uncollectible items.  In addition, items that remain unbilled for more than a specified period of time, or beyond an established billing window, are reserved against revenue.  For billed receivables, we generally establish reserves using a combination of factors including historic adjustment rates for credit memos and cancelled transactions, historical collection experience, and the length of time receivables have been outstanding.  The reserve rates vary by payer group.  In addition, we record specific reserves for bad debt when we become aware of a customer's inability or refusal to satisfy its debt obligations, such as in the event of a bankruptcy filing.

(b)     Inventories, net

Inventories are stated at the lower of cost (first-in, first-out) or market (net realizable value).  Inventories consist of the following (dollars in thousands):

	September 30,			December 31,
	2011			2010
Finished goods and tissue available for distribution	$	83,396		$	92,769
Goods and tissue in-process		24,925			9,507
Raw materials, supplies, parts and unprocessed tissue		83,071			96,197
		191,392			198,473
Less:  Amounts expected to be converted into equipment for short-term rental		(17,054	)		(10,008	)
Reserve for excess and obsolete inventory		(13,505	)		(15,913	)
	$	160,833		$	172,552