Guarantor Condensed Consolidating Financial Statements

9 Months Ended

12 Months Ended

Sep. 30, 2012

Dec. 31, 2011

Guarantor Condensed Consolidating Financial Statements [Abstract]

Guarantor Condensed Consolidating Financial Statements

Guarantor Condensed Consolidating Financial Statements

Our second lien notes and senior unsecured notes are fully and unconditionally guaranteed, jointly and severally, by us and each of our material 100% owned subsidiaries, other than the subsidiaries that are co-issuers of the notes, foreign subsidiaries and subsidiaries whose only assets are investments in foreign subsidiaries. The non-guarantor subsidiaries do not have any payment obligations under the second lien notes or the senior unsecured notes. Subject to the terms of the second lien notes and senior unsecured notes indentures, the guarantee of a subsidiary guarantor will terminate upon:

            (1) a sale or other disposition (including by way of consolidation or merger) of the capital stock of such guarantor or the sale or disposition of all or substantially all the assets of such subsidiary guarantor (other than to the Company or a restricted subsidiary) otherwise permitted by the second lien notes or senior unsecured notes indentures,

            (2) the designation in accordance with the second lien notes or senior unsecured notes indenture of the guarantor as an unrestricted subsidiary or the occurrence of any event after which the guarantor is no longer a restricted subsidiary,

            (3) defeasance or discharge of the second lien notes or the senior unsecured notes, or

            (4) upon the achievement of investment grade status by the second lien notes or senior unsecured notes; provided that such guarantee shall be reinstated upon the reversion date.

These termination events are considered customary by the Securities and Exchange Commission pursuant to Section 2510.5 of the Financial Reporting Manual of the Division of Corporation Finance.

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 second lien notes and senior unsecured notes indentures will not guarantee the second lien notes or the senior unsecured notes. As of September 30, 2012, 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

September 30, 2012

(in thousands)

(unaudited)

	Centaur Guernsey 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	$	246,645	$	—	$	59,884	$	—		$	306,927
Accounts receivable, net	—		202,358		54,272		124,992		—			381,622
Inventories, net	—		62,210		68,973		58,412		(65,978		)	123,617
Prepaid expenses and other	—		9,006		5,547		335,617		(310,836		)	39,334
Assets held for sale	—		65,723		9,070		49,133		(15,238		)	108,688
Intercompany receivables	166		1,176,918		2,088,503		837,017		(4,102,604		)	—
Total current assets	564		1,762,860		2,226,365		1,465,055		(4,494,656		)	960,188
Net property, plant and equipment	—		274,193		99,887		187,922		(148,691		)	413,311
Debt issuance costs, net	—		98,393		—		—		—			98,393
Deferred income taxes	—		—		—		22,086		—			22,086
Goodwill	—		2,475,372		996,535		—		—			3,471,907
Identifiable intangible assets, net	—		443,054		2,061,297		187,866		—			2,692,217
Other non-current assets	—		296		149		96,473		(90,900		)	6,018
Intercompany loan receivables	—		903,277		333,072		—		(1,236,349		)	—
Intercompany investments	1,411,758		257,641		445,578		—		(2,114,977		)	—
	$	1,412,322	$	6,215,086	$	6,162,883	$	1,959,402	$	(8,085,573	)	$	7,664,120
Liabilities and Equity:
Current liabilities:
Accounts payable	$	—	$	19,361	$	12,200	$	8,941	$	—		$	40,502
Accrued expenses and other	—		246,704		228,275		63,974		(187,445		)	351,508
Intercompany payables	2,130		485,326		2,365,375		1,249,773		(4,102,604		)	—
Current installments of long-term debt	—		23,464		—		—		—			23,464
Deferred income taxes	—		1,086		—		—		—			1,086
Liabilities related to assets held for sale	—		16,427		—		1,912		—			18,339
Total current liabilities	2,130		792,368		2,605,850		1,324,600		(4,290,049		)	434,899
Long-term debt, net of current installments and discount	—		4,630,818		—		—		—			4,630,818
Non-current tax liabilities	—		33,098		—		7,484		—			40,582
Deferred income taxes	—		109,148		930,130		70,266		—			1,109,544
Other non-current liabilities	54		36,199		371		1,515		—			38,139
Intercompany loan payables	—		333,072		903,277		—		(1,236,349		)	—
Total liabilities	2,184		5,934,703		4,439,628		1,403,865		(5,526,398		)	6,253,982
Shareholders' equity	1,410,138		280,383		1,723,255		555,537		(2,559,175		)	1,410,138
	$	1,412,322	$	6,215,086	$	6,162,883	$	1,959,402	$	(8,085,573	)	$	7,664,120

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Balance Sheet

December 31, 2011

(in thousands)

	Centaur Guernsey 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	$	411	$	142,652	$	—	$	72,363	$	—		$	215,426
Accounts receivable, net	—		211,187		53,097		137,674		—			401,958
Inventories, net	—		79,302		87,171		81,797		(70,027		)	178,243
Deferred income taxes	—		98,062		—		2,853		(77,645		)	23,270
Prepaid expenses and other	—		30,663		7,257		354,633		(346,531		)	46,022
Intercompany receivables	—		998,244		1,891,483		50,787		(2,940,514		)	—
Total current assets	411		1,560,110		2,039,008		700,107		(3,434,717		)	864,919
Net property, plant and equipment	—		341,646		69,452		311,063		(176,814		)	545,347
Debt issuance costs, net	—		111,397		—		—		—			111,397
Deferred income taxes	—		—		—		18,322		—			18,322
Goodwill	—		2,499,690		997,842		—		—			3,497,532
Identifiable intangible assets, net	—		528,524		2,124,821		222,391		—			2,875,736
Other non-current assets	—		2,149		149		96,728		(90,900		)	8,126
Intercompany loan receivables	—		848,552		323,884		75,020		(1,247,456		)	—
Intercompany investments	1,593,033		332,987		775,147		—		(2,701,167		)	—
	$	1,593,444	$	6,225,055	$	6,330,303	$	1,423,631	$	(7,651,054	)	$	7,921,379
Liabilities and Equity:
Current liabilities:
Accounts payable	$	—	$	23,233	$	14,884	$	11,781	$	—		$	49,898
Accrued expenses and other	—		194,940		235,137		70,497		(188,957		)	311,617
Intercompany payables	—		163,543		2,314,174		462,799		(2,940,516		)	—
Current installments of long-term debt	—		23,491		—		—		—			23,491
Income taxes payable	—		—		662		14,050		(14,712		)	—
Deferred income taxes	—		—		77,645		—		(77,645		)	—
Total current liabilities	—		405,207		2,642,502		559,127		(3,221,830		)	385,006
Long-term debt, net of current installments and discount	—		4,639,728		—		—		—			4,639,728
Non-current tax liabilities	—		31,114		—		7,181		—			38,295
Deferred income taxes	—		244,517		911,417		97,410		—			1,253,344
Other non-current liabilities	—		9,837		802		923		—			11,562
Intercompany loan payables	—		398,904		848,552		—		(1,247,456		)	—
Total liabilities	—		5,729,307		4,403,273		664,641		(4,469,286		)	6,327,935
Shareholders' equity	1,593,444		495,748		1,927,030		758,990		(3,181,768		)	1,593,444
	$	1,593,444	$	6,225,055	$	6,330,303	$	1,423,631	$	(7,651,054	)	$	7,921,379

See accompanying notes to condensed consolidated financial statements.

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 September 30, 2012
	Successor
	Centaur Guernsey L.P. Inc. Parent Company			Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—		$	164,641		$	1,741		$	40,774		$	—		$	207,156
Sales	—			74,943			103,716			151,225			(101,167		)	228,717
Total revenue	—			239,584			105,457			191,999			(101,167		)	435,873
Rental expenses	—			62,877			1,526			61,744			(25,337		)	100,810
Cost of sales	18			89,027			34,023			58,201			(122,656		)	58,613
Gross profit	(18		)	87,680			69,908			72,054			46,826			276,450
Selling, general and administrative expenses	191			75,731			32,926			33,978			(48		)	142,778
Research and development expenses	—			6,268			8,977			2,131			—			17,376
Acquired intangible asset amortization	—			22,308			18,687			8,738			—			49,733
Operating earnings	(209		)	(16,627		)	9,318			27,207			46,874			66,563
Non-operating intercompany transactions	—			5,318			132,861			(131,367		)	(6,812		)	—
Interest income and other	—			18,532			3,063			18			(21,439		)	174
Interest expense	—			(127,395		)	(18,375		)	(20		)	21,439			(124,351		)
Foreign currency gain (loss)	—			(8,799		)	170			1,223			—			(7,406		)
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	(209		)	(128,971		)	127,037			(102,939		)	40,062			(65,020		)
Income tax expense (benefit)	—			(22,700		)	14,055			(18,531		)	—			(27,176		)
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	(209		)	(106,271		)	112,982			(84,408		)	40,062			(37,844		)
Equity in earnings (loss) of subsidiaries	(35,603		)	28,741			(83,578		)	—			90,440			—
Earnings from continuing operations	(35,812		)	(77,530		)	29,404			(84,408		)	130,502			(37,844		)
Earnings from discontinued operations, net of tax	—			(1,468		)	627			830			2,043			2,032
Net earnings (loss)	$	(35,812	)	$	(78,998	)	$	30,031		$	(83,578	)	$	132,545		$	(35,812	)
Total comprehensive income (loss)	$	(34,215	)	$	(77,401	)	$	31,628		$	(81,981	)	$	127,754		$	(34,215	)

See accompanying notes to condensed consolidated financial statements.

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 September 30, 2011
	Predecessor
	Centaur Guernsey L.P. Inc. Parent Company		Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—	$	182,284		$	535	$	44,818		$	—		$	227,637
Sales	—		85,076			96,409		138,377			(78,958		)	240,904
Total revenue	—		267,360			96,944		183,195			(78,958		)	468,541
Rental expenses	—		77,906			474		59,489			(37,968		)	99,901
Cost of sales	—		71,105			27,585		65,765			(106,422		)	58,033
Gross profit	—		118,349			68,885		57,941			65,432			310,607
Selling, general and administrative expenses	—		86,916			28,621		30,125			(3		)	145,659
Research and development expenses	—		10,222			8,196		2,388			—			20,806
Acquired intangible asset amortization	—		—			8,855		—			—			8,855
Operating earnings	—		21,211			23,213		25,428			65,435			135,287
Non-operating intercompany transactions	—		20,542			13,221		(16,806		)	(16,957		)	—
Interest income and other	—		233			3,098		64			(3,098		)	297
Interest expense	—		(20,190		)	9		(231		)	3,098			(17,314		)
Foreign currency gain (loss)	—		891			30		(3,038		)	—			(2,117		)
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	—		22,687			39,571		5,417			48,478			116,153
Income tax expense (benefit)	—		18,653			11,978		1,723			—			32,354
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	—		4,034			27,593		3,694			48,478			83,799
Equity in earnings (loss) of subsidiaries	—		37,260			9,017		—			(46,277		)	—
Earnings from continuing operations	—		41,294			36,610		3,694			2,201			83,799
Earnings from discontinued operations, net of tax	—		(1,835		)	650		5,323			2,789			6,927
Net earnings (loss)	$	—	$	39,459		$	37,260	$	9,017		$	4,990		$	90,726
Total comprehensive income (loss)	$	—	$	23,523		$	20,980	$	(7,263	)	$	37,550		$	74,790

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss)

(in thousands)

(unaudited)

	For the nine months ended September 30, 2012
	Successor
	Centaur Guernsey L.P. Inc. Parent Company			Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—		$	495,299		$	4,507		$	122,544		$	—		$	622,350
Sales	—			218,950			312,106			388,453			(235,338		)	684,171
Total revenue	—			714,249			316,613			510,997			(235,338		)	1,306,521
Rental expenses	2			227,119			4,088			201,240			(84,062		)	348,387
Cost of sales	54			196,056			108,774			174,747			(289,177		)	190,454
Gross profit	(56		)	291,074			203,751			135,010			137,901			767,680
Selling, general and administrative expenses	1,142			244,705			96,903			103,765			(734		)	445,781
Research and development expenses	—			20,222			26,676			6,788			—			53,686
Acquired intangible asset amortization	—			81,085			59,273			31,902			—			172,260
Operating earnings	(1,198		)	(54,938		)	20,899			(7,445		)	138,635			95,953
Non-operating intercompany transactions	—			71,692			261,173			(352,936		)	20,071			—
Interest income and other	—			55,260			9,188			100			(63,918		)	630
Interest expense	—			(388,388		)	(54,725		)	(85		)	63,918			(379,280		)
Foreign currency gain (loss)	—			170			318			(2,360		)	—			(1,872		)
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	(1,198		)	(316,204		)	236,853			(362,726		)	158,706			(284,569		)
Income tax expense (benefit)	—			(61,959		)	(16,897		)	(28,269		)	—			(107,125		)
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	(1,198		)	(254,245		)	253,750			(334,457		)	158,706			(177,444		)
Equity in earnings (loss) of subsidiaries	(179,926		)	(73,757		)	(338,090		)	—			591,773			—
Earnings from continuing operations	(181,124		)	(328,002		)	(84,340		)	(334,457		)	750,479			(177,444		)
Earnings from discontinued operations, net of tax	—			(8,761		)	4,100			(3,633		)	4,614			(3,680		)
Net earnings (loss)	$	(181,124	)	$	(336,763	)	$	(80,240	)	$	(338,090	)	$	755,093		$	(181,124	)
Total comprehensive income (loss)	$	(182,711	)	$	(338,350	)	$	(81,827	)	$	(339,677	)	$	759,854		$	(182,711	)

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss)

(in thousands)

(unaudited)

	For the nine months ended September 30, 2011
	Predecessor
	Centaur Guernsey L.P. Inc. Parent Company		Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—	$	534,589		$	1,229		$	136,142		$	—		$	671,960
Sales	—		229,936			282,594			375,990			(206,091		)	682,429
Total revenue	—		764,525			283,823			512,132			(206,091		)	1,354,389
Rental expenses	—		271,675			1,164			185,682			(141,107		)	317,414
Cost of sales	—		187,082			83,046			184,186			(282,491		)	171,823
Gross profit	—		305,768			199,613			142,264			217,507			865,152
Selling, general and administrative expenses	—		248,185			82,562			92,721			(22		)	423,446
Research and development expenses	—		33,681			21,440			7,290			—			62,411
Acquired intangible asset amortization	—		—			26,567			—			—			26,567
Operating earnings	—		23,902			69,044			42,253			217,529			352,728
Non-operating intercompany transactions	—		97,083			113,319			(224,635		)	14,233			—
Interest income and other	—		567			9,224			206			(9,231		)	766
Interest expense	—		(64,297		)	9			(254		)	9,231			(55,311		)
Foreign currency gain (loss)	—		(2,200		)	218			(160		)	—			(2,142		)
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	—		55,055			191,814			(182,590		)	231,762			296,041
Income tax expense (benefit)	—		1,071			76,574			4,714			—			82,359
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	—		53,984			115,240			(187,304		)	231,762			213,682
Equity in earnings (loss) of subsidiaries	—		(52,130		)	(169,291		)	—			221,421			—
Earnings from continuing operations	—		1,854			(54,051		)	(187,304		)	453,183			213,682
Earnings from discontinued operations, net of tax	—		(566		)	1,921			18,013			7,519			26,887
Net earnings (loss)	$	—	$	1,288		$	(52,130	)	$	(169,291	)	$	460,702		$	240,569
Total comprehensive income (loss)	$	—	$	(5,217	)	$	(58,632	)	$	(175,793	)	$	473,706		$	234,064

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Cash Flows

(in thousands)

(unaudited)

	For the nine months ended September 30, 2012
	Successor
	Centaur Guernsey 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)	$	(181,124	)	$	(336,763	)	$	(80,240	)	$	(338,090	)	$	755,093		$	(181,124	)
Adjustments to reconcile net earnings (loss) to net cash provided	3,154			439,770			(123,522		)	153,344			(105,747		)	366,999
Net cash provided by operating activities	(177,970		)	103,007			(203,762		)	(184,746		)	649,346			185,875
Cash flows from investing activities:
Net additions to property, plant and equipment	—			(57,203		)	(42,323		)	(39,328		)	69,344			(69,510		)
Increase in identifiable intangible assets and other non-current assets	—			87			(5,486		)	19			—			(5,380		)
Net cash used by investing activities	—			(57,116		)	(47,809		)	(39,309		)	69,344			(74,890		)
Cash flows from financing activities:
Capital contributions from limited partners	239			—			—			—			—			239
Repurchase of equity from limited partners	(1,970		)	—			—			—			—			(1,970		)
Repayments of long-term debt and capital lease obligations	—			(17,508		)	—			25			—			(17,483		)
Debt issuance costs	—			(578		)	—			—			—			(578		)
Proceeds (payments) on intercompany loans	—			(120,557		)	45,537			75,020			—			—
Proceeds (payments) on intercompany investments	179,688			196,745			206,034			136,223			(718,690		)	—
Net cash provided (used) by financing activities	177,957			58,102			251,571			211,268			(718,690		)	(19,792		)
Effect of exchange rate changes on cash and cash equivalents	—			—			—			308			—			308
Net increase in cash and cash equivalents	(13		)	103,993			—			(12,479		)	—			91,501
Cash and cash equivalents, beginning of period	411			142,652			—			72,363			—			215,426
Cash and cash equivalents, end of period	$	398		$	246,645		$	—		$	59,884		$	—		$	306,927

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Cash Flows

(in thousands)

(unaudited)

	For the nine months ended September 30, 2011
	Predecessor
	Centaur Guernsey 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)	$	—	$	1,288		$	(52,130	)	$	(169,291	)	$	460,702		$	240,569
Adjustments to reconcile net earnings (loss) to net cash provided	—		337,937			(114,905		)	60,337			(100,778		)	182,591
Net cash provided by operating activities	—		339,225			(167,035		)	(108,954		)	359,924			423,160
Cash flows from investing activities:
Net additions to property, plant and equipment	—		(74,773		)	(5,798		)	(63,957		)	49,638			(94,890		)
Increase in identifiable intangible assets and other non-current assets	—		4			(5,960		)	(13,137		)	—			(19,093		)
Net cash used by investing activities	—		(74,769		)	(11,758		)	(77,094		)	49,638			(113,983		)
Cash flows from financing activities:
Repayments of long-term debt and capital lease obligations	—		(20,625		)	—			(109		)	—			(20,734		)
Debt issuance costs	—		(827		)	—			—			—			(827		)
Proceeds (payments) on intercompany loans	—		(25,000		)	2,960			22,040			—			—
Proceeds from exercise of stock options and employee stock purchases	—		46,713			—			—			—			46,713
Excess tax benefit from equity-based payment arrangements	—		2,393			—			—			—			2,393
Purchase of immature shares for minimum tax withholdings	—		(3,797		)	—			—			—			(3,797		)
Refinancing of senior credit facility:
Proceeds from senior credit facility – due 2016	—		146,012			—			—			—			146,012
Repayments on senior credit facility – due 2013	—		(123,346		)	—			—			—			(123,346		)
Payment of debt issuance costs	—		(14,676		)	—			—			—			(14,676		)
Proceeds (payments) on intercompany investments	—		51,141			171,581			186,840			(409,562		)	—
Net cash provided (used) by financing activities	—		57,988			174,541			208,771			(409,562		)	31,738
Effect of exchange rate changes on cash and cash equivalents	—		—			—			(725		)	—			(725		)
Net increase in cash and cash equivalents	—		322,444			(4,252		)	21,998			—			340,190
Cash and cash equivalents, beginning of period	—		228,763			4,252			83,588			—			316,603
Cash and cash equivalents, end of period	$	—	$	551,207		$	—		$	105,586		$	—		$	656,793

See accompanying notes to condensed consolidated financial statements.

Guarantor Condensed Consolidating Financial Statements

Our second lien notes and senior unsecured notes are fully and unconditionally guaranteed, jointly and severally, by us and each of our material 100% owned subsidiaries, other than the subsidiaries that are co-issuers of the notes, foreign subsidiaries and subsidiaries whose only assets are investments in foreign subsidiaries. The non-guarantor subsidiaries do not have any payment obligations under the second lien notes or the senior unsecured notes. Subject to the terms of the second lien notes and senior unsecured notes indentures, the guarantee of a subsidiary guarantor will terminate upon:

            (1) a sale or other disposition (including by way of consolidation or merger) of the capital stock of such guarantor or the sale or disposition of all or substantially all the assets of such subsidiary guarantor (other than to the Company or a restricted subsidiary) otherwise permitted by the second lien notes or senior unsecured notes indentures,

            (2) the designation in accordance with the second lien notes or senior unsecured notes indenture of the guarantor as an unrestricted subsidiary or the occurrence of any event after which the guarantor is no longer a restricted subsidiary,

            (3) defeasance or discharge of the second lien notes or the senior unsecured notes, or

            (4) upon the achievement of investment grade status by the second lien notes or senior unsecured notes; provided that such guarantee shall be reinstated upon the reversion date.

   These termination events are considered customary by the Securities and Exchange Commission pursuant to Section 2510.5 of the Financial Reporting Manual of the Division of Corporation Finance.

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 second lien notes and senior unsecured notes indentures will not guarantee the second lien notes or the senior unsecured notes. As of December 31, 2011, 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

December 31, 2011

(in thousands)

	Centaur Guernsey 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	$	411	$	142,652	$	—	$	72,363	$	—		$	215,426
Accounts receivable, net	—		211,187		53,097		137,674		—			401,958
Inventories, net	—		79,302		87,171		81,797		(70,027		)	178,243
Deferred income taxes	—		98,062		—		2,853		(77,645		)	23,270
Prepaid expenses and other	—		30,663		7,257		354,633		(346,531		)	46,022
Intercompany receivables	—		998,244		1,891,483		50,787		(2,940,514		)	—
Total current assets	411		1,560,110		2,039,008		700,107		(3,434,717		)	864,919
Net property, plant and equipment	—		341,646		69,452		311,063		(176,814		)	545,347
Debt issuance costs, net	—		111,397		—		—		—			111,397
Deferred income taxes	—		—		—		18,322		—			18,322
Goodwill	—		2,499,690		997,842		—		—			3,497,532
Identifiable intangible assets, net	—		528,524		2,124,821		222,391		—			2,875,736
Other non-current assets	—		2,149		149		96,728		(90,900		)	8,126
Intercompany loan receivables	—		848,552		323,884		75,020		(1,247,456		)	—
Intercompany investments	1,593,033		332,987		775,147		—		(2,701,167		)	—
	$	1,593,444	$	6,225,055	$	6,330,303	$	1,423,631	$	(7,651,054	)	$	7,921,379
Liabilities and Equity:
Current liabilities:
Accounts payable	$	—	$	23,233	$	14,884	$	11,781	$	—		$	49,898
Accrued expenses and other	—		194,940		235,137		70,497		(188,957		)	311,617
Intercompany payables	—		163,543		2,314,174		462,799		(2,940,516		)	—
Current installments of long-term debt	—		23,491		—		—		—			23,491
Income taxes payable	—		—		662		14,050		(14,712		)	—
Deferred income taxes	—		—		77,645		—		(77,645		)	—
Total current liabilities	—		405,207		2,642,502		559,127		(3,221,830		)	385,006
Long-term debt, net of current installments and discount	—		4,639,728		—		—		—			4,639,728
Non-current tax liabilities	—		31,114		—		7,181		—			38,295
Deferred income taxes	—		244,517		911,417		97,410		—			1,253,344
Other non-current liabilities	—		9,837		802		923		—			11,562
Intercompany loan payables	—		398,904		848,552		—		(1,247,456		)	—
Total liabilities	—		5,729,307		4,403,273		664,641		(4,469,286		)	6,327,935
Shareholders' equity	1,593,444		495,748		1,927,030		758,990		(3,181,768		)	1,593,444
	$	1,593,444	$	6,225,055	$	6,330,303	$	1,423,631	$	(7,651,054	)	$	7,921,379

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Balance Sheet

December 31, 2010

(in thousands)

	Predecessor
	Centaur Guernsey 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	$	—	$	228,763	$	4,252	$	83,588	$	—		$	316,603
Accounts receivable, net	—		235,004		43,773		135,306		—			414,083
Inventories, net	—		74,623		86,422		91,488		(79,981		)	172,552
Deferred income taxes	—		23,224		4,364		2,524		—			30,112
Prepaid expenses and other	—		15,372		9,913		315,130		(306,216		)	34,199
Intercompany receivables	—		—		771,162		100,994		(872,156		)	—
Total current assets	—		576,986		919,886		729,030		(1,258,353		)	967,549
Net property, plant and equipment	—		234,354		54,199		222,742		(240,232		)	271,063
Debt issuance costs, net	—		22,622		—		—		—			22,622
Deferred income taxes	—		—		—		17,151		—			17,151
Goodwill	—		198,244		1,121,519		9,118		—			1,328,881
Identifiable intangible assets, net	—		5,402		437,075		11,325		—			453,802
Other non-current assets	—		8,962		1,779		5,820		(1,630		)	14,931
Intercompany loan receivables	—		—		142,960		—		(142,960		)	—
Intercompany investments	—		2,254,058		261,993		29,609		(2,545,660		)	—
	$	—	$	3,300,628	$	2,939,411	$	1,024,795	$	(4,188,835	)	$	3,075,999
Liabilities and Equity:
Current liabilities:
Accounts payable	$	—	$	29,351	$	17,936	$	12,850	$	—		$	60,137
Accrued expenses and other	—		132,121		230,188		57,103		(193,888		)	225,524
Intercompany payables	—		292,018		431,851		123,287		(847,156		)	—
Current installments of long-term debt	—		169,500		—		—		—			169,500
Current installments of intercompany debt	—		25,000		—		—		(25,000		)	—
Income taxes payable	—		—		662		31		(693		)	—
Total current liabilities	—		647,990		680,637		193,271		(1,066,737		)	455,161
Long-term debt, net of current installments and discount	—		935,290		—		—		—			935,290
Non-current tax liabilities	—		28,258		—		7,330		—			35,588
Deferred income taxes	—		5,082		158,304		—		—			163,386
Other non-current liabilities	—		908		1,917		670		—			3,495
Intercompany loan payables	—		140,000		—		2,960		(142,960		)	—
Total liabilities	—		1,757,528		840,858		204,231		(1,209,697		)	1,592,920
Shareholders' equity	—		1,543,100		2,098,553		820,564		(2,979,138		)	1,483,079
	—		3,300,628		2,939,411		1,024,795		(4,188,835		)	3,075,999

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss)

(in thousands)

	For the period from November 4 through December 31, 2011
	Successor
	Centaur Guernsey L.P. Inc. Parent Company			Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—		$	114,296		$	410		$	28,256		$	—		$	142,962
Sales	—			52,108			71,928			105,860			(68,094		)	161,802
Total revenue	—			166,404			72,338			134,116			(68,094		)	304,764
Rental expenses	—			59,157			618			48,612			(23,245		)	85,142
Cost of sales	11			70,472			24,188			40,860			(91,770		)	43,761
Gross profit	(11		)	36,775			47,532			44,644			46,921			175,861
Selling, general and administrative expenses	288			170,023			13,097			35,429			(1,120		)	217,717
Research and development expenses	—			7,118			5,631			1,368			—			14,117
Acquired intangible asset amortization	—			4,227			10,466			1,766			—			16,459
Operating earnings	(299		)	(144,593		)	18,338			6,081			48,041			(72,432		)
Non-operating intercompany transactions	—			49,423			10,426			(60,043		)	194			—
Interest income and other	—			11,453			2,042			100			(13,447		)	148
Interest expense	—			(117,028		)	(11,389		)	(22		)	13,447			(114,992		)
Foreign currency gain (loss)	—			25,873			(94		)	(3,529		)	—			22,250
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	(299		)	(174,872		)	19,323			(57,413		)	48,235			(165,026		)
Income tax expense (benefit)	—			(40,912		)	(322		)	(5,096		)	—			(46,330		)
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	(299		)	(133,960		)	19,645			(52,317		)	48,235			(118,696		)
Equity in earnings (loss) of subsidiaries	(114,570		)	397			(50,775		)	—			164,948			—
Earnings from continuing operations	(114,869		)	(133,563		)	(31,130		)	(52,317		)	213,183			(118,696		)
Earnings from discontinued operations, net of tax	—			(710		)	2,125			1,542			870			3,827
Net earnings (loss)	$	(114,869	)	$	(134,273	)	$	(29,005	)	$	(50,775	)	$	214,053		$	(114,869	)
Total comprehensive income (loss)	$	(120,710	)	$	(140,114	)	$	(34,846	)	$	(56,616	)	$	231,576		$	(120,710	)

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss)

(in thousands)

	For the period from January 1 through November 3, 2011
	Predecessor
	Centaur Guernsey L.P. Inc. Parent Company		Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—	$	594,764		$	1,455		$	150,597		$	—		$	746,816
Sales	—		253,341			315,939			429,085			(241,769		)	756,596
Total revenue	—		848,105			317,394			579,682			(241,769		)	1,503,412
Rental expenses	—		296,247			1,364			205,596			(152,295		)	350,912
Cost of sales	—		192,704			92,320			207,042			(301,139		)	190,927
Gross profit	—		359,154			223,710			167,044			211,665			961,573
Selling, general and administrative expenses	—		369,911			93,321			102,313			(33		)	565,512
Research and development expenses	—		36,898			24,343			8,360			—			69,601
Acquired intangible asset amortization	—		—			29,519			—			—			29,519
Operating earnings	—		(47,655		)	76,527			56,371			211,698			296,941
Non-operating intercompany transactions	—		85,085			113,318			(210,403		)	12,000			—
Interest income and other	—		747			26,920			231			(26,926		)	972
Interest expense	—		(88,697		)	9			(169		)	26,926			(61,931		)
Foreign currency gain (loss)	—		(3,193		)	409			6			—			(2,778		)
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	—		(53,713		)	217,183			(153,964		)	223,698			233,204
Income tax expense (benefit)	—		(7,153		)	78,561			2,959			—			74,367
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	—		(46,560		)	138,622			(156,923		)	223,698			158,837
Equity in earnings (loss) of subsidiaries			2,687			(139,737		)	—			137,050			—
Earnings from continuing operations	—		(43,873		)	(1,115		)	(156,923		)	360,748			158,837
Earnings from discontinued operations, net of tax	—		3,114			3,802			17,186			7,999			32,101
Net earnings (loss)	$	—	$	(40,759	)	$	2,687		$	(139,737	)	$	368,747		$	190,938
Total comprehensive income (loss)	$	—	$	(37,833	)	$	4,523		$	(137,901	)	$	365,075		$	193,864

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss)

(in thousands)

	For the year ended December 31, 2010
	Predecessor
	Centaur Guernsey L.P. Inc. Parent Company		Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—	$	731,305		$	908		$	179,653		$	—		$	911,866
Sales	—		287,336			342,179			433,811			(231,752		)	831,574
Total revenue	—		1,018,641			343,087			613,464			(231,752		)	1,743,440
Rental expenses	—		435,809			867			232,399			(200,100		)	468,975
Cost of sales	—		201,358			107,855			209,024			(288,715		)	229,522
Gross profit	—		381,474			234,365			172,041			257,063			1,044,943
Selling, general and administrative expenses	—		326,637			92,869			113,726			(2,514		)	530,718
Research and development expenses	—		40,927			26,874			17,790			—			85,591
Acquired intangible asset amortization	—		—			37,426			—			—			37,426
Operating earnings	—		13,910			77,196			40,525			259,577			391,208
Non-operating intercompany transactions	—		143,843			74,147			(273,890		)	55,900			—
Interest income and other	—		422			12,251			688			(12,510		)	851
Interest expense	—		(99,438		)	—			(125		)	12,510			(87,053		)
Foreign currency gain (loss)	—		442			177			(5,119		)	—			(4,500		)
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	—		59,179			163,771			(237,921		)	315,477			300,506
Income tax expense (benefit)	—		22,940			64,064			2,664			—			89,668
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	—		36,239			99,707			(240,585		)	315,477			210,838
Equity in earnings (loss) of subsidiaries	—		(117,195		)	(218,904		)	—			336,099			—
Earnings from continuing operations	—		(80,956		)	(119,197		)	(240,585		)	651,576			210,838
Earnings from discontinued operations, net of tax	—		10,809			2,002			21,681			10,754			45,246
Net earnings (loss)	$	—	$	(70,147	)	$	(117,195	)	$	(218,904	)	$	662,330		$	256,084
Total comprehensive income (loss)	$	—	$	(68,665	)	$	(120,118	)	$	(221,827	)	$	668,176		$	257,566

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Operations and Comprehensive Income (Loss)

(in thousands)

	For the year ended December 31, 2009
	Predecessor
	Centaur Guernsey L.P. Inc. Parent Company		Kinetic Concepts, Inc. and KCI USA, Inc. Borrower			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue:
Rental	$	—	$	731,589		$	616		$	187,154		$	—		$	919,359
Sales	—		288,259			288,686			464,855			(272,844		)	768,956
Total revenue	—		1,019,848			289,302			652,009			(272,844		)	1,688,315
Rental expenses	—		432,412			(1,891		)	202,185			(166,769		)	465,937
Cost of sales	—		201,512			92,201			192,852			(260,885		)	225,680
Gross profit	—		385,924			198,992			256,972			154,810			996,698
Selling, general and administrative expenses	—		321,148			83,933			99,945			(2,261		)	502,765
Research and development expenses	—		52,468			28,904			10,095			—			91,467
Acquired intangible asset amortization	—		—			40,634			—			—			40,634
Operating earnings	—		12,308			45,521			146,932			157,071			361,832
Non-operating intercompany transactions	—		128,072			118,107			(236,775		)	(9,404		)	—
Interest income and other	—		221			12,252			861			(12,515		)	819
Interest expense	—		(117,221		)	—			(212		)	12,515			(104,918		)
Foreign currency gain (loss)	—		(8,098		)	(29		)	4,123			—			(4,004		)
Earnings (loss) from continuing operations before income taxes (benefit) and equity in earnings (loss) of subsidiaries	—		15,282			175,851			(85,071		)	147,667			253,729
Income tax expense (benefit)	—		8,064			71,277			13,507			—			92,848
Earnings (loss) from continuing operations before equity in earnings (loss) of subsidiaries	—		7,218			104,574			(98,578		)	147,667			160,881
Equity in earnings (loss) of subsidiaries	—		35,111			(71,903		)	—			36,792			—
Earnings from continuing operations	—		42,329			32,671			(98,578		)	184,459			160,881
Earnings from discontinued operations, net of tax	—		28,305			2,440			26,675			10,401			67,821
Net earnings (loss)	$	—	$	70,634		$	35,111		$	(71,903	)	$	194,860		$	228,702
Total comprehensive income (loss)	$	—	$	77,567		$	38,933		$	(68,081	)	$	187,216		$	235,635

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Cash Flows

(in thousands)

	For the period November 4 through December 31, 2011
	Successor
	Centaur Guernsey 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)	$	(114,869	)	$	(134,273	)	$	(29,005	)	$	(50,775	)	$	214,053		$	(114,869	)
Adjustments to reconcile net earnings (loss) to net cash provided	299			(1,787,282		)	1,296,975			591,299			(63,996		)	37,295
Net cash provided by operating activities	(114,570		)	(1,921,555		)	1,267,970			540,524			150,057			(77,574		)
Cash flows from investing activities:
Net additions to property, plant and equipment	—			(38,479		)	(6,360		)	(46,262		)	61,251			(29,850		)
Dispositions of assets subject to leveraged lease, net	—			7,435			—			—			—			7,435
Increase in identifiable intangible assets and other non-current assets	—			1,261,578			(1,248,161		)	(103,896		)	89,262			(1,217		)
Cash used to acquire entity	—			(2,611,846		)	(1,716,581		)	(856,932		)	—			(5,185,359		)
Net cash used by investing activities	—			(1,381,312		)	(2,971,102		)	(1,007,090		)	150,513			(5,208,991		)
Cash flows from financing activities:
Capital contributions from limited partners	1,714,398			—			—			—			—			1,714,398
Distribution to limited partners	(543		)	—			—			—			—			(543		)
Repayments of long-term debt and capital lease obligations	—			(1,532,652		)	(989		)	(489		)	—			(1,534,130		)
Proceeds (payments) on intercompany loans	—			(449,648		)	524,668			(75,020		)	—			—
Settlement of convertible debt warrants	—			(280,220		)	—			—			—			(280,220		)
Settlement of convertible debt hedges	—			314,856			—			—			—			314,856
KCI acquisition financing:
Proceeds from B1, B2, 2nd lien notes and unsecured notes	—			4,685,896			—			—			—			4,685,896
Debt issuance costs – 2011 merger financing	—			(106,076		)	—			—			—			(106,076		)
Purchase of interest rate caps	—			(2,150		)	—			—			—			(2,150		)
Proceeds (payments) on intercompany investments	(1,598,874		)	179,279			1,179,453			540,712			(300,570		)	—
Net cash provided (used) by financing activities	114,981			2,809,285			1,703,132			465,203			(300,570		)	4,792,031
Effect of exchange rate changes on cash and cash equivalents	—			—			—			(1,925		)	—			(1,925		)
Net increase in cash and cash equivalents	411			(493,582		)	—			(3,288		)	—			(496,459		)
Cash and cash equivalents, beginning of period	—			636,234			—			75,651			—			711,885
Cash and cash equivalents, end of period	$	411		$	142,652		$	—		$	72,363		$	—		$	215,426

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Cash Flows

(in thousands)

	For the period January 1 through November 3, 2011
	Predecessor
	Centaur Guernsey 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)	$	—	$	(40,759	)	$	2,687		$	(139,737	)	$	368,747		$	190,938
Adjustments to reconcile net earnings (loss) to net cash provided	—		61,984			253,684			101,886			(120,524		)	297,030
Net cash provided by operating activities	—		21,225			256,371			(37,851		)	248,223			487,968
Cash flows from investing activities:
Net additions to property, plant and equipment	—		(81,054		)	(7,161		)	(68,851		)	54,049			(103,017		)
Dispositions of assets subject to leveraged lease, net	—		—			—			—			—			—
Increase in identifiable intangible assets and other non-current assets	—		3			(5,209		)	(14,434		)	—			(19,640		)
Net cash used by investing activities	—		(81,051		)	(12,370		)	(83,285		)	54,049			(122,657		)
Cash flows from financing activities:
Repayments of long-term debt and capital lease obligations	—		(20,624		)	—			(150		)	—			(20,774		)
Proceeds (payments) on intercompany loans	—		231,843			(178,883		)	(77,960		)	25,000			—
Proceeds from exercise of stock options and employee stock purchases	—		42,973			—			—			—			42,973
Proceeds from the purchase of stock in ESPP and other	—		8,059			—			—			—			8,059
Excess tax benefit from equity-based payment arrangements	—		2,439			—			—			—			2,439
Purchase of immature shares for minimum tax withholdings	—		(3,855		)	—			—			—			(3,855		)
KCI acquisition financing:
Debt issuance costs – 2011 merger financing	—		(7,879		)	—			—			—			(7,879		)
First quarter 2011 refinancing of senior credit facility:
Proceeds from senior credit facility – due 2016	—		146,012			—			—			—			146,012
Payments on senior credit facility – due 2013	—		(123,346		)	—			—			—			(123,346		)
Purchase of debt issuance costs	—		(14,676		)	—			—			—			(14,676		)
Proceeds (payments) on intercompany investments	—		206,351			(69,370		)	190,291			(327,272		)	—
Net cash provided (used) by financing activities	—		467,297			(248,253		)	112,181			(302,272		)	28,953
Effect of exchange rate changes on cash and cash equivalents	—		—			—			1,018			—			1,018
Net increase in cash and cash equivalents	—		407,471			(4,252		)	(7,937		)	—			395,282
Cash and cash equivalents, beginning of period	—		228,763			4,252			83,588			—			316,603
Cash and cash equivalents, end of period	$	—	$	636,234		$	—		$	75,651		$	—		$	711,885

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Cash Flows

(in thousands)

	For the year ended December 31, 2010
	Predecessor
	Centaur Guernsey 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)	$	—	$	(70,147	)	$	(117,195	)	$	(218,904	)	$	662,330		$	256,084
Adjustments to reconcile net earnings (loss) to net cash provided	—		515,557			(79,937		)	(40,707		)	(298,276		)	96,637
Net cash provided by operating activities	—		445,410			(197,132		)	(259,611		)	364,054			352,721
Cash flows from investing activities:
Net additions to property, plant and equipment	—		(52,187		)	(9,309		)	(91,537		)	77,781			(75,252		)
Increase in identifiable intangible assets and other non-current assets	—		(6,011		)	(424		)	(12,245		)	—			(18,680		)
Net cash used by investing activities	—		(58,198		)	(9,733		)	(103,782		)	77,781			(93,932		)
Cash flows from financing activities:
Repayments of long-term debt and capital lease obligations	—		(222,667		)	—			(60		)	—			(222,727		)
Proceeds (payments) on intercompany loans	—		(151,000		)	(2,960		)	2,960			151,000			—
Proceeds from exercise of stock options and employee stock purchases	—		12,221			—			—			—			12,221
Proceeds from the purchase of stock in ESPP and other	—		6,540			—			—			—			6,540
Excess tax benefit from equity-based payment arrangements	—		1,505			—			—			—			1,505
Purchase of immature shares for minimum tax withholdings	—		(1,741		)	—			—			—			(1,741		)
Proceeds (payments) on intercompany investments	—		122,185			211,568			259,082			(592,835		)	—
Net cash provided (used) by financing activities	—		(232,957		)	208,608			261,982			(441,835		)	(204,202		)
Effect of exchange rate changes on cash and cash equivalents	—		—			—			(1,141		)	—			(1,141		)
Net increase in cash and cash equivalents	—		154,255			1,743			(102,552		)	—			53,446
Cash and cash equivalents, beginning of period	—		74,508			2,509			186,140			—			263,157
Cash and cash equivalents, end of period	$	—	$	228,763		$	4,252		$	83,588		$	—		$	316,603

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidating Parent Company, Co-Issuers,

Guarantor and Non-Guarantor Statement of Cash Flows

(in thousands)

	For the year ended December 31, 2009
	Predecessor
	Centaur Guernsey 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)	$	—	$	70,634		$	35,111		$	(71,903	)	$	194,860		$	228,702
Adjustments to reconcile net earnings (loss) to net cash provided	—		270,751			(163,783		)	(17,943		)	69,794			158,819
Net cash provided by operating activities	—		341,385			(128,672		)	(89,846		)	264,654			387,521
Cash flows from investing activities:															—
Net additions to property, plant and equipment	—		(89,989		)	(9,940		)	(161,402		)	171,480			(89,851		)
Business acquired in purchase transaction, net of cash acquired	—		—			(173		)	—			—			(173		)
Increase in identifiable intangible assets and other non-current assets	—		(161,886		)	116,329			(14,586		)	(2,751		)	(62,894		)
Net cash used by investing activities	—		(251,875		)	106,216			(175,988		)	168,729			(152,918		)
Cash flows from financing activities:
Proceeds from revolving credit facility	—		105,000			—			—			—			105,000
Repayments of long-term debt and capital lease obligations	—		(334,000		)	—			—			—			(334,000		)
Proceeds (payments) from intercompany loans	—		176,000			—			—			(176,000		)	—
Proceeds from exercise of stock options and employee stock purchases	—		1,850			—			—			—			1,850
Proceeds from the purchase of stock in ESPP and other	—		5,938			—			—			—			5,938
Excess tax benefit from equity-based payment arrangements	—		1,214			—			—			—			1,214
Purchase of immature shares for minimum tax withholdings	—		(1,419		)	—			—			—			(1,419		)
Proceeds (payments) on intercompany investments	—		25,032			21,509			210,842			(257,383		)	—
Net cash provided (used) by financing activities	—		(20,385		)	21,509			210,842			(433,383		)	(221,417		)
Effect of exchange rate changes on cash and cash equivalents	—		—			—			2,204			—			2,204
Net increase in cash and cash equivalents	—		69,125			(947		)	(52,788		)	—			15,390
Cash and cash equivalents, beginning of period	—		5,383			3,456			238,928			—			247,767
Cash and cash equivalents, end of period	$	—	$	74,508		$	2,509		$	186,140		$	—		$	263,157

See accompanying notes to condensed consolidated financial statements.