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Item 9A. Controls and Procedures

2021-02-23 compared with 2020-02-21 · 738 added, 857 removed, 1273 unchanged (56% of the section changed)

25 unchanged sentences

Certain Relationships and Related Transactions, and Director Independence and Item 14.

Principal Accountant Fees and Services is incorporated herein by reference to the Company’s definitive proxy statement for its Annual Meeting of Stockholders scheduled to be held on May 13, 2020 , which definitive proxy statement is expected to be filed with the Commission not later than 120 days after the end of the fiscal year to which this report relates.

Principal Accountant Fees and Services is incorporated herein by reference to the Company’s definitive proxy statement for its Annual Meeting of Stockholders sche duled to be held on May 14, 2021, w hich definitive proxy statement is expected to be filed with the Commission not later than 120 days after the end of the fiscal year to which this report relates.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

15 unchanged sentences

and Integra LifeSciences Corporation (Incorporated by Reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 15, 2014)

2.1(a) Put Option Agreement, dated September 29, 2020, between the Company and certain of its subsidiaries and Smith & Nephew USD Limited, a subsidiary of Smith+Nephew (including the Purchase and Sale Agreement attached as Appendix 1 thereto) (Incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020).

2.2 Stock and Asset Purchase Agreement by and among Medtronic, Inc., Medtronic Xomed Instrumentation, SAS, and Integra LifeSciences Corporation, dated as of September 12, 2014 (Incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed on October 27, 2014)

7 unchanged sentences

2.7 Binding Offer Letter by and among Integra LifeSciences Holdings Corporation and DePuy Synthes, Inc., dated as of February 14, 2017 (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 15, 2017

Asset Purchase Agreement accepted and countersigned by DePuy Synthes, dated May 11, 2017 (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on May 15, 2017)

Asset Purchase Agreement, dated September 8, 2017, between the Company and certain of its subsidiaries and Natus Medical Incorporated (Incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q filed on October 26, 2017)

Amended and Restated Certificate of Incorporation of the Company dated February 16, 1993 (Incorporated by reference to Exhibit 3.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated May 22, 1998 (Incorporated by reference to Exhibit 3.1(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated May 17, 1999 (Incorporated by reference to Exhibit 3.1(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004)

Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated December 21, 2016 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 22, 2016)

Amended and Restated Bylaws of the Company, effective as of May 17, 2012 (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on April 13, 2012)

Second Amended and Restated Bylaws of Integra LifeSciences Holdings Corporation, effective as of December 11, 2018 (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-k filed on December 12, 2018)

2.8(a) Asset Purchase Agreement accepted and countersigned by DePuy Synthes, dated May 11, 2017 (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on May 15, 2017)

2.8(b) Asset Purchase Agreement, dated September 8, 2017, between the Company and certain of its subsidiaries and Natus Medical Incorporated (Incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q filed on October 26, 2017)

3.1(a) Amended and Restated Certificate of Incorporation of the Company dated February 16, 1993 (Incorporated by reference to Exhibit 3.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005)

3.1(b) Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated May 22, 1998 (Incorporated by reference to Exhibit 3.1(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998)

3.1(c) Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated May 17, 1999 (Incorporated by reference to Exhibit 3.1(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004)

3.1(d) Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated December 21, 2016 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 22, 2016)

3.2(a) Amended and Restated Bylaws of the Company, effective as of May 17, 2012 (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on April 13, 2012)

3.2(b) Second Amended and Restated Bylaws of Integra LifeSciences Holdings Corporation, effective as of December 11, 2018 (Incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-k filed on December 12, 2018)

4.1 Purchase Agreement, dated June 9, 2011, by and between Integra LifeSciences Holdings Corporation and J.P.

2 unchanged sentences

4.2 Indenture, dated June 15, 2011, by and between Integra LifeSciences Holdings Corporation and Wells Fargo Bank, National Association, as trustee (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on June 15, 2011)

4.2 (a) Indenture, dated as of February 7, 2020, by and between Integra LifeSciences Holdings Corporation and Citibank, N.A., as trustee (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on February 7, 2020) ( Indenture, dated as of February 7, 2020, by and between Integra LifeSciences Holdings Corporation and Citibank, N.A., as trustee (Incorporated by reference to Exhibit 4.

1 to the Company’s Current Report on Form 8-K filed on February 7, 2020).

4.2 (b) First Supplemental Indenture, by and between Integra LifeSciences Holdings Corporation and Citibank, N.A., as trustee (Incorporated by reference to Exhibit 4.

1 to the Company’s Current Report on Form 8-K filed on December 9, 2020)

4.3 Security Agreement, dated as of December 22, 2005, among Integra LifeSciences Holdings Corporation and the additional grantors party thereto in favor of Bank of America, N.A., as administrative and collateral agent (Incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2005)

5 unchanged sentences

4.9 Form of 2.375% Senior Convertible Note due 2012 (included in Exhibit 4.10) (Incorporated by reference to Exhibit B to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on June 12, 2007)

Registration Rights Agreement, dated June 11, 2007, among Integra LifeSciences Holdings Corporation, Banc of America Securities LLC, J.P.

4.10(a) Registration Rights Agreement, dated June 11, 2007, among Integra LifeSciences Holdings Corporation, Banc of America Securities LLC, J.P.

Morgan Securities Inc.

and Morgan Stanley & Co., Incorporated, as representatives of the several initial purchasers (Incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on June 12, 2007)

Registration Rights Agreement, dated June 11, 2007, among Integra LifeSciences Holdings Corporation, Banc of America Securities LLC, J.P.

4.10(b) Registration Rights Agreement, dated June 11, 2007, among Integra LifeSciences Holdings Corporation, Banc of America Securities LLC, J.P.

Morgan Securities Inc.

4 unchanged sentences

4.13 Description of Securities+

Lease Modification #2 entered into as of October 28, 2005, by and between Plainsboro Associates and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 2, 2005)

Lease Modification #3 entered into as of March 2, 2011, by and between Plainsboro Associates and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 3, 2011)

Lease Modification #4 entered into as of April 20, 2017, by and between Plainsboro Associates and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 25, 2017)

10.1(a) Lease Modification #2 entered into as of October 28, 2005, by and between Plainsboro Associates and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 2, 2005)

10.1(b) Lease Modification #3 entered into as of March 2, 2011, by and between Plainsboro Associates and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 3, 2011)

10.1(c) Lease Modification #4 entered into as of April 20, 2017, by and between Plainsboro Associates and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 25, 2017)

10.2 Equipment Lease Agreement between Medicus Corporation and the Company, dated as of June 1, 2000 (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2000)

Form of Indemnification Agreement for Non-Employee Directors and Officers (effective prior to February 15, 2019) (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 24, 2008)*

10.3 (c) Form of Indemnification Agreement for Non-Employee Director and Officers effective February 15, 2019.

10.3(a) Form of Indemnification Agreement for Non-Employee Directors and Officers (effective prior to February 15, 2019) (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 24, 2008)*

10.3(b) 10.3 (c) Form of Indemnification Agreement for Non-Employee Director and Officers effective February 15, 2019.

10.4 1996 Incentive Stock Option and Non-Qualified Stock Option Plan (as amended through December 27, 1997) (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 3, 1998)*

1 unchanged sentence

10.6 1999 Stock Option Plan (amended and restated as of July 26, 2005) (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005)*

Employee Stock Purchase Plan (as amended on May 17, 2004) (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Registration No.

10.7(a) Employee Stock Purchase Plan (as amended on May 17, 2004) (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 (Registration No.

333-127488) filed on August 12, 2005)*

First Amendment to Employee Stock Purchase Plan, dated October 26, 2005 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 1, 2005)*

2000 Equity Incentive Plan (amended and restated as of July 26, 2005) (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005)*

Amendment to 2000 Equity Incentive Plan (effective as of May 17, 2012) (Incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

Amendment to 2000 Equity Incentive Plan (effective as of January 1, 2013) (Incorporated by reference to Exhibit 10.8(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

2001 Equity Incentive Plan (amended and restated as of July 26, 2005) (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005)*

Amendment to 2001 Equity Incentive Plan (effective as of May 17, 2012) (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

Amendment to 2001 Equity Incentive Plan (effective as of January 1, 2013) (Incorporated by reference to Exhibit 10.9(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

Second Amended and Restated 2003 Equity Incentive Plan effective May 19, 2010 (Incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K filed May 21, 2010)*

Amendment to the Second Amended and Restated 2003 Equity Incentive Plan effective May 17, 2012 (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

Amendment to the Second Amended and Restated 2003 Equity Incentive Plan effective January 1, 2013 (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013)*

Third Amended and Restated 2003 Equity Incentive Plan effective May 22, 2015 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 29, 2015)*

Fourth Amended and Restated 2003 Equity Incentive Plan, effective May 23, 2017 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 25, 2017)

10.7(b) First Amendment to Employee Stock Purchase Plan, dated October 26, 2005 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 1, 2005)*

10.8(a) Second Amended and Restated 2003 Equity Incentive Plan effective May 19, 2010 (Incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K filed May 21, 2010)*

10.8(b) Amendment to the Second Amended and Restated 2003 Equity Incentive Plan effective May 17, 2012 (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

10.8(c) Amendment to the Second Amended and Restated 2003 Equity Incentive Plan effective January 1, 2013 (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013)*

10.8(d) Third Amended and Restated 2003 Equity Incentive Plan effective May 22, 2015 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 29, 2015)*

10.8(e) Fourth Amended and Restated 2003 Equity Incentive Plan, effective May 23, 2017 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 25, 2017)

10.8(f) Amendment to the Integra LifeSciences Holdings Corporation Fourth Amended and Restated 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020)*

10.9 Additional Call Option Transaction Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Morgan Stanley & Co.

International plc.

Letter Agreement dated June 7, 2012 between Stuart M.

10.10(a) Letter Agreement dated June 7, 2012 between Stuart M.

Essig and the Company (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2012)*

Indemnity letter agreement dated December 27, 1997 from the Company to Stuart M.

10.10(b) Indemnity letter agreement dated December 27, 1997 from the Company to Stuart M.

Essig (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 3, 1998)*

Additional Warrant Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Citibank, N.A.

10.11 Registration Rights Provisions for Stuart M.

Essig (Incorporated by reference to Exhibit B of Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 3, 1998)*

Registration Rights Provisions for Stuart M.

10.12(a) Registration Rights Provisions for Stuart M.

Essig (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 8, 2001)*

Registration Rights Provisions for Stuart M.

10.12(b) Registration Rights Provisions for Stuart M.

Essig (Incorporated by reference to Exhibit B of Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004)*

6 unchanged sentences

Arduini (Incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on October 26, 2017)*

10.17(a) Amendment to the Third Amendment to the Third Amended and Restated Employment Agreement between the Company and Peter J.

Arduini (Incorporated by reference to the Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020)*

10.18 Form of Notice of Stock Option Grant with Eight-Year Term for Peter J.

2 unchanged sentences

Arduini and Integra LifeSciences Holdings Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on February 25, 2013)*

Lease Contract, dated April 1, 2005, between the Puerto Rico Industrial Development Company and Integra CI, Inc.

10.20(a) Lease Contract, dated April 1, 2005, between the Puerto Rico Industrial Development Company and Integra CI, Inc.

(executed on September 15, 2006) (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006)

Amendment to Lease Contract dated as of November 2, 2011, between Integra CI, Inc.

10.20(b) Amendment to Lease Contract dated as of November 2, 2011, between Integra CI, Inc.

and Puerto Rico Industrial Development Company (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 7, 2011)

Termination of Amendment to Lease Contract, dated as of April 2, 2012, between Integra CI, Inc.

10.20(c) Termination of Amendment to Lease Contract, dated as of April 2, 2012, between Integra CI, Inc.

and Puerto Rico Industrial Development Company (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012)

1 unchanged sentence

Essig (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 3, 1998)*

Stock Option Grant and Agreement pursuant to 1999 Stock Option Plan dated December 22, 2000 between the Company and Stuart M.

10.22(a) Stock Option Grant and Agreement pursuant to 1999 Stock Option Plan dated December 22, 2000 between the Company and Stuart M.

Essig (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 8, 2001)*

Stock Option Grant and Agreement pursuant to 2000 Equity Incentive Plan dated December 22, 2000 between the Company and Stuart M.

10.22(b) Stock Option Grant and Agreement pursuant to 2000 Equity Incentive Plan dated December 22, 2000 between the Company and Stuart M.

Essig (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on January 8, 2001)*

Restricted Units Agreement dated December 22, 2000 between the Company and Stuart M.

10.23(a) Restricted Units Agreement dated December 22, 2000 between the Company and Stuart M.

Essig (Incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on January 8, 2001)*

Amendment 2006-1, dated as of October 30, 2006, to the Stuart M.

10.23(b) Amendment 2006-1, dated as of October 30, 2006, to the Stuart M.

Essig Restricted Units Agreement dated as of December 22, 2000 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 3, 2006)*

1 unchanged sentence

Essig (Incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004)*

Contract Stock/Restricted Units Agreement pursuant to 2003 Equity Incentive Plan dated July 27, 2004 between the Company and Stuart M.

10.25(a) Contract Stock/Restricted Units Agreement pursuant to 2003 Equity Incentive Plan dated July 27, 2004 between the Company and Stuart M.

Essig (Incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004)*

Amendment 2006-1, dated as of October 30, 2006, to the Stuart M.

10.25(b) Amendment 2006-1, dated as of October 30, 2006, to the Stuart M.

Essig Contract Stock/Restricted Units Agreement dated as of July 27, 2004 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 3, 2006)*

Amendment 2008-1, dated as of March 6, 2008, to the Stuart M.

10.25(c) Amendment 2008-1, dated as of March 6, 2008, to the Stuart M.

Essig Contract Stock/Restricted Units Agreement dated as of July 27, 2004 (Incorporated by reference to Exhibit 10.25(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007)*

Amendment 2011-1, dated as of May 17, 2011, to the Stuart M.

10.25(d) Amendment 2011-1, dated as of May 17, 2011, to the Stuart M.

Essig Contract Stock/Restricted Units Agreement dated as of July 24, 2004 (Incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011)*

5 unchanged sentences

Essig (Incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004)*

Form of Contract Stock/Restricted Units Agreement for Stuart M.

10.29(a) Form of Contract Stock/Restricted Units Agreement for Stuart M.

Essig (Incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)*

New Form of Contract Stock/Restricted Units Agreement (for Annual Equity Awards) for Stuart M.

10.29(b) New Form of Contract Stock/Restricted Units Agreement (for Annual Equity Awards) for Stuart M.

Essig (Incorporated by reference to Exhibit 10.28(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010)*

Form of Amendment 2011-1 to Contract Stock/Restricted Units Agreement between the Company and Mr.

10.29(c) Form of Amendment 2011-1 to Contract Stock/Restricted Units Agreement between the Company and Mr.

Essig (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011)*

Form of Performance Stock Agreement for Stuart M.

10.30(a) Form of Performance Stock Agreement for Stuart M.

Essig (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)*

Form of Restricted Stock Agreement for Stuart M.

10.30(b) Form of Restricted Stock Agreement for Stuart M.

Essig for 2009 (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed April 13, 2009)*

Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on February 25, 2013)*

Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 29, 2016)*

Form of Performance Stock Agreement for Peter J.

10.31(a) Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on February 25, 2013)*

10.31(b) Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 29, 2016)*

10.31(c) Form of Performance Stock Agreement for Peter J.

Arduini (Incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 8-K filed on February 29, 2016)*

Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018) *

Form of Performance Stock Agreement for Peter J.

10.31(d) Form of Performance Stock Agreement (Executive Officers) (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018) *

10.31(e) Form of Performance Stock Agreement for Peter J.

Arduini (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018)*

10.32 Performance Incentive Compensation Plan effective January 1, 2013 (Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013)*

First Amendment, dated as of February 15, 2017, to the Performance Incentive Compensation Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 17, 2017)

2018 Performance Incentive Compensation Plan, effective January 1, 2018 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 25, 2017)

10.33(a) First Amendment, dated as of February 15, 2017, to the Performance Incentive Compensation Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 17, 2017)

10.33(b) 2018 Performance Incentive Compensation Plan, effective January 1, 2018 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 25, 2017)

10.34 New Form of Contract Stock/Restricted Units Agreement pursuant to 2003 Equity Incentive Plan (for 2011) Annual Equity Award for Stuart M.

10 unchanged sentences

10.43 Form of Change in Control Severance Program (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 1 9 , 20 20 )*

Form of Restricted Stock Agreement for Non-Employee Directors under the 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

New Form of Restricted Stock Agreement for Non-Employee Directors under the 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.38(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 25, 2009)*

Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

New Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.38(e) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.8 to the Company’s Quarter Report on Form 10-Q for the quarter ended March 31, 2009)*

Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.6 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2012)*

New Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.38(h) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

Form of Restricted Stock Agreement for Mr.

10.44(a) Form of Restricted Stock Agreement for Non-Employee Directors under the 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

10.44(b) New Form of Restricted Stock Agreement for Non-Employee Directors under the 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.38(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

10.45(a) Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 25, 2009)*

10.45(b) Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)*

10.45(c) New Form of Restricted Stock Agreement for Executive Officers - Annual Vesting (Incorporated by reference to Exhibit 10.38(e) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

10.46(a) Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.8 to the Company’s Quarter Report on Form 10-Q for the quarter ended March 31, 2009)*

10.46(b) Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.6 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2012)*

10.46(c) New Form of Restricted Stock Agreement for Executive Officers - Cliff Vesting (Incorporated by reference to Exhibit 10.38(h) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012)*

10.47(a) Form of Restricted Stock Agreement for Mr.

Henneman for 2008 and 2009 (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on April 13, 2009)*

Form of Contract Stock/Restricted Units Agreement pursuant to 2003 Equity Incentive Plan for Mr.

10.47(b) Form of Contract Stock/Restricted Units Agreement pursuant to 2003 Equity Incentive Plan for Mr.

Henneman (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on December 24, 2008)*

Form of Option Agreement for John B.

10.47(c) Form of Option Agreement for John B.

Henneman, III (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 6, 2008)*

Form of Performance Stock Agreement for John B.

10.47(d) Form of Performance Stock Agreement for John B.

Henneman, III (Incorporated by reference to Exhibit 10.37(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007)*

Form of Contract Stock/Restricted Units Agreement (for Signing Grant) for Mr.

10.48(a) Form of Contract Stock/Restricted Units Agreement (for Signing Grant) for Mr.

Arduini (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on October 12, 2010)*

Form of Contract Stock/Restricted Units Agreement (for Annual Equity Awards) for Mr.

10.48(b) Form of Contract Stock/Restricted Units Agreement (for Annual Equity Awards) for Mr.

Arduini (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on October 12, 2010)*

1 unchanged sentence

Arduini (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on October 12, 2010)*

Form of Restricted Stock Agreement for Mr.

10.50(a) Form of Restricted Stock Agreement for Mr.

Henneman (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on October 12, 2010)*

Form of Restricted Stock Agreement (Annual Vesting) for Mr.

10.50(b) Form of Restricted Stock Agreement (Annual Vesting) for Mr.

Henneman (Incorporated by reference to Exhibit 10.39(n) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011)*

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LeVahn (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 29, 2008)

Lease Agreement between 109 Morgan Lane, LLC and Integra LifeSciences Corporation, dated May 15, 2008 (Incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)

First Amendment to Lease Agreement between 109 Morgan Lane, LLC and Integra LifeSciences Corporation, dated March 9, 2009 (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009)

Lease Agreement dated as of July 1, 2013, between 109 Morgan Lane, LLC and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 1, 2013)

10.57(a) Lease Agreement between 109 Morgan Lane, LLC and Integra LifeSciences Corporation, dated May 15, 2008 (Incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)

10.57(b) First Amendment to Lease Agreement between 109 Morgan Lane, LLC and Integra LifeSciences Corporation, dated March 9, 2009 (Incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009)

10.57(c) Lease Agreement dated as of July 1, 2013, between 109 Morgan Lane, LLC and Integra LifeSciences Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on July 1, 2013)

10.58 Receivables Financing Agreement, dated as of December 21, 2018, by and among Integra Receivables LLC, Integra LifeSciences Sales LLC, as Servicer, PNC Bank, National Association, as Administrative Agent, PNC Capital Markets LLC, as Structuring Agent, and certain lenders and group agents that are parties thereto from time to time (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 28, 2018)

10.59 Purchase and Sale Agreement, dated as of December 21, 2018, by and among Integra LifeSciences Sales LLC, Integra LifeSciences Corporation and Integra Receivables LLC (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 28, 2018)

Fifth Amended and Restated Credit Agreement, dated as of May 3, 2018, among Integra LifeSciences Holdings Corporation, the other lenders party hereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, JPMorgan Chase Bank, N.A.

and Wells Fargo Bank, N.A., as Co-Syndication Agents, and PNC Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, Ltd., Citibank N.A., Citizens Bank, N.A., DNB Bank ASA, New York Branch, HSBC Bank plc, HSBC Bank USA, National Association, Suntrust Bank, TD Bank, N.A., Bank of Nova Scotia and Capital One, National Association, as Co-Documentation Agents (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on May 9, 2018)

Sixth Amended and Restated Credit Agreement, dated as of February 3, 2020, among Integra LifeSciences Holdings Corporation, the lenders party thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, Citibank N.A., Morgan Stanley MUFG Loan Partners, LLC and Wells Fargo Bank, N.A., as Co-Syndication Agents, and PNC Bank, N.A., Bank of Nova Scotia, Bank of the West, BBVA USA, Capital One, National Association, Citizens Bank, N.A., DNB Capital LLC, Santander Bank, N.A., TD Bank, N.A.

10.60(a) Sixth Amended and Restated Credit Agreement, dated as of February 3, 2020, among Integra LifeSciences Holdings Corporation, the lenders party thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, Citibank N.A., Morgan Stanley MUFG Loan Partners, LLC and Wells Fargo Bank, N.A., as Co-Syndication Agents, and PNC Bank, N.A., Bank of Nova Scotia, Bank of the West, BBVA USA, Capital One, National Association, Citizens Bank, N.A., DNB Capital LLC, Santander Bank, N.A., TD Bank, N.A.

and Truist Bank, as Co-Documentation Agents.

(Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 3, 2020).

10.60(b) Amendment, dated July 14, 2020, to that Sixth Amended and Restated Credit Agreement, among Integra LifeSciences Holdings Corporation, a syndicate of lending banks, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Citibank N.A., Morgan Stanley MUFG Loan Partners, LLC and Wells Fargo Bank, N.A.

as Co-Syndication Agents, and PNC Bank, N.A., Bank of Nova Scotia, Bank of the West, BBVA USA, Capital One, National Association, Citizens Bank, N.A., DNB Capital LLC, Santander Bank, N.A., T.D.

and Truist Bank, as Co-Documentation Agents (as amended, restated, modified and supplemented from time to time prior to the date hereof, the “Credit Agreement”) (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on July 20, 2020).

10.61 Base Call Option Transaction Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Citibank, N.A.

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(Incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K filed on February 7, 2020)

2.1(b) Agreement and Plan of Merger by among Integra LifeSciences Holdings Corporation and ACell Inc.

dated as of December 15, 2020+

21 Subsidiaries of the Company+

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99.9 Letter, dated June 30, 2015, from the United States Food and Drug Administration to Integra LifeSciences (Ireland) Limited (Incorporated by reference to Exhibit 99.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015)

XBRL Instance Document+#

XBRL Taxonomy Extension Schema Document+#

XBRL Taxonomy Extension Calculation Linkbase Document+#

XBRL Definition Linkbase Document

XBRL Taxonomy Extension Labels Linkbase Document+#

XBRL Taxonomy Extension Presentation Linkbase Document+#

101.INS XBRL Instance Document+#

101.SCH XBRL Taxonomy Extension Schema Document+#

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document+#

101.DEF XBRL Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Labels Linkbase Document+#

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document+#

* Indicates a management contract or compensatory plan or arrangement.

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/s/ Carrie L.

Corporate Vice President and Chief Financial Officer

Executive Vice President, Chief Financial Officer, and Treasurer

(Principal Financial Officer)

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons, on behalf of the registrant in the capacities indicated.

President and Chief Executive Officer,

February 21, 2020

and Director (Principal Executive Officer)

Signature Title Date

Arduini President and Chief Executive Officer, February 23, 2021

Arduini and Director (Principal Executive Officer)

/s/ Carrie L.

Corporate Vice President and

February 21, 2020

Chief Financial Officer (Principal Financial Officer)

Anderson Executive Vice President, Chief Financial Officer, February 23, 2021

Anderson and Treasurer (Principal Financial Officer)

/s/ Jeffrey A.

Senior Vice President, Finance

February 21, 2020

(Principal Accounting Officer)

Mosebrook Senior Vice President, Finance February 23, 2021

Mosebrook (Principal Accounting Officer)

/s/ Stuart M.

Chairman of the Board

February 21, 2020

/s/ Rhonda Germany Ballintyn

February 21, 2020

Chairman of the Board February 23, 2021

/s/ Rhonda Germany Ballintyn Director February 23, 2021

Rhonda Germany Ballintyn

/s/ Keith Bradley, Ph.D.

February 21, 2020

Director February 23, 2021

Keith Bradley, Ph.D.

/s/ Barbara B.

February 21, 2020

Hill Director February 23, 2021

Director February 23, 2021

/s/ Donald E.

Morel, Jr., Ph.D.

February 21, 2020

Director February 23, 2021

Morel, Jr., Ph.D.

/s/ Raymond G.

February 21, 2020

Murphy Director February 23, 2021

/s/ Christian S.

February 21, 2020

Schade Director February 23, 2021

Report of Independent Registered Public Accounting Firm

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Integra LifeSciences Holdings Corporation and its subsidiaries (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2019, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Integra LifeSciences Holdings Corporation and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations, of comprehensive income, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

Changes in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019 and revenues from contracts with customers in 2018.

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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures that

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Indefinite Lived Intangible Asset Impairment Assessment - Codman tradename

As described in Note 7 to the consolidated financial statements, the Codman tradename intangible asset balance was $163.1 million as of December 31, 2019.

During the third quarter of 2019, management elected to bypass the qualitative impairment assessment for its Codman tradename intangible asset and perform a quantitative impairment test.

In performing this test, management utilized projected sales growth rates, a royalty rate of 5%, a range of tax rates between 17.4-20.7%, and discount rate of 12.5%.

The principal considerations for our determination that performing procedures relating to the indefinite lived intangible asset impairment assessment of the Codman tradename is a critical audit matter are (i) there was significant judgment by management when developing the fair value measurement of the Codman tradename, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures relating to the fair value measurement;

(ii) there was significant audit effort in performing procedures to evaluate the fair value measurement and significant assumptions, including the projected sales growth rates, royalty rate, tax rates, and discount rate and (iii) the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the indefinite lived intangible asset impairment assessment, including controls over management’s significant assumptions used to estimate the fair value of the intangible asset.

These procedures also included, among others, testing management’s process for developing the fair value measurement;

evaluating the appropriateness of the method;

testing the completeness, accuracy, and relevance of underlying data used in the impairment assessment;

and evaluating the reasonableness of the significant assumptions, including projected sales growth rates, royalty rate, tax rates, and discount rate.

Evaluating management’s assumptions related to projected sales growth rates, royalty rate, and tax rates involved evaluating whether the assumptions used by management were reasonable considering the current and past performance of the business and whether these assumptions were consistent with evidence obtained in other areas of the audit and industry data.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the Company’s impairment assessment and reasonableness of certain significant assumptions, including the discount rate.

Excess or Obsolete Inventory Adjustments

As described in Note 2 to the consolidated financial statements, the Company’s inventory is stated at the lower of cost, the value determined by the first-in, first-out method, or net realizable value, and the net inventory balance was $316.1 million as of December 31, 2019.

At each balance sheet date, management evaluates inventories for excess quantities, obsolescence or shelf life expiration.

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To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products prior to their expiration, management adjusts the carrying value to estimated net realizable value.

The principal considerations for our determination that performing procedures relating to excess or obsolete inventory adjustments is a critical audit matter are (i) there was significant judgment by management when developing the excess or obsolete inventory adjustments, which in turn led to a high degree of auditor judgment and subjectivity in performing procedures relating to the excess or obsolete inventory adjustments;

and (ii) there was significant audit effort in performing procedures to evaluate management’s analysis and significant assumptions, including projections of future demand and risk of technological or competitive obsolescence for products.

The principal considerations for our determination that performing procedures relating to excess or obsolete inventory adjustments is a critical audit matter are the significant judgment by management when developing the estimate for excess or obsolete inventory adjustments, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s analysis and significant assumptions related to projections of future demand and risk of technological or competitive obsolescence for products.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the valuation of inventory, including controls over the excess or obsolete inventory adjustments and management’s projection of future demand and the risk of technological or competitive obsolescence for products.

These procedures also included, among others, testing management’s process for developing the estimate for excess or obsolete inventory, evaluating the appropriateness of the method, testing the completeness, accuracy, and relevance of underlying data used in the estimate;

and evaluating the significant assumptions including, projections of future demand and risk of technological or competitive obsolescence for products.

Evaluating management’s assumption related to projections of future demand involved evaluating whether the assumption was consistent with the product’s historical performance.

Evaluating management’s assumption related to the risk of technological or competitive obsolescence for products involved evaluating whether the assumption was consistent with technological or competitive obsolescence experiences during the product life cycle of existing products.

These procedures included testing the effectiveness of controls relating to the valuation of inventory, including controls over the estimate for excess or obsolete inventory adjustments and management’s projection of future demand and the risk of technological or competitive obsolescence for products.

These procedures also included, among others, testing management’s process for developing the estimate for excess or obsolete inventory adjustments, evaluating the appropriateness of the method, testing the completeness, accuracy, and relevance of underlying data used in the estimate;

and evaluating the reasonableness of significant assumptions related to projections of future demand and risk of technological or competitive obsolescence for products.

Evaluating the reasonableness of management’s assumption related to projections of future demand involved considering the product’s historical performance.

Evaluating the reasonableness of management’s assumption related to the risk of technological or competitive obsolescence for products involved considering the technological or competitive obsolescence experiences during the product life cycle of existing products.

Valuation of Transferred Intellectual Property Rights That Give Rise to Deferred Tax Benefits

As described in Note 13 to the consolidated financial statements, in December 2020, the Company completed an intra-entity transfer of certain intellectual property rights to one of its subsidiaries in Switzerland.

While the transfer did not result in a taxable gain, the Company’s Swiss subsidiary received a step-up in tax basis based on the fair value of the transferred intellectual property rights.

Management determined the fair value using a discounted cash flow model based on management’s expectations of revenue growth rates, royalty rates, discount rates and useful lives of the intellectual

The Company recorded a $59.2 million deferred tax benefit in Switzerland related to the amortizable tax basis in the transferred intellectual property.

The principal considerations for our determination that performing procedures relating to the valuation of transferred intellectual property rights that give rise to deferred tax assets is a critical audit matter are the significant judgment by management in developing the fair value of the intangible assets transferred, which is used as the basis for the recording of the deferred tax assets.

This in turn led to significant auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s estimates and assumptions related to revenue growth rates, royalty rates, discount rates and useful lives.

In addition, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the valuation of the intangible assets transferred.

These procedures also included, among others, testing management’s process for developing the fair value of the intangible assets transferred;

evaluating the appropriateness of the discounted cash flow model;

testing the completeness, accuracy, and relevance of underlying data used in the model;

and evaluating the reasonableness of significant assumptions used by management related to revenue growth rates, royalty rates, discount rates and useful lives.

Evaluating the reasonableness of management’s assumptions related to revenue growth rates and useful lives involved considering current and past performance of the products associated with the intellectual property rights and evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and the royalty rate and discount rate significant assumptions.

/s/ PricewaterhouseCoopers LLP

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CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,

(In thousands, except per share amounts)

Years Ended December 31,

2020 2019 2018

Total revenue, net $ 1,371,868 $ 1,517,557 $ 1,472,441

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Provision (benefit) for income taxes ( 40,372 ) 9,903 ( 3,398 )

Net income $ 133,892 $ 50,201 $ 60,801

Net income per share

Basic $ 1.58 $ 0.59 $ 0.73

Diluted $ 1.57 $ 0.58 $ 0.72

Weighted average common shares outstanding (See Note 14):

Basic 84,650 85,637 82,857

Diluted 85,228 86,494 83,999

The accompanying notes are an integral part of these consolidated financial statements.

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Years Ended December 31,

2020 2019 2018

(In thousands)

Net income $ 133,892 $ 50,201 $ 60,801

Other comprehensive income (loss), before tax:

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Unrealized gain (loss) on derivatives

Unrealized derivative (loss) gain arising during period

Reclassification adjustments for gains included in net income

Unrealized derivative gain (loss) arising during period ( 96,837 ) ( 13,671 ) 11,709

Reclassification adjustments for gain (loss) included in net income ( 24,442 ) 14,865 13,400

Unrealized loss on derivatives ( 72,395 ) ( 28,536 ) ( 1,691 )

Defined benefit pension plan - net (loss) arising during period

Total other comprehensive income (loss), before tax

Defined benefit pension plan - net gain (loss) arising during period 4,604 ( 8,973 ) ( 643 )

Total other comprehensive loss, before tax ( 14,428 ) ( 37,683 ) ( 21,493 )

Income tax benefit (expense) related to items in other comprehensive loss 16,771 6,724 ( 143 )

Total other comprehensive income (loss), net of tax

Total other comprehensive loss, net of tax 2,343 ( 30,959 ) ( 21,636 )

Comprehensive income, net of tax $ 136,235 $ 19,242 $ 39,165

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Trade accounts receivable, net of allowances of $ 6,439 and $ 4,303

225,532 275,296

Inventories, net 310,117 316,054

Assets held for sale 162,105 —

Prepaid expenses and other current assets 69,282 67,907

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Intangible assets, net 989,436 1,031,591

Deferred tax assets

Goodwill 932,367 954,280

Deferred tax assets, net 73,690 12,623

Other assets 11,277 14,644

Total assets $ 3,615,136 $ 3,303,240

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Current portion of borrowings under senior credit facility $ 33,750 $ 45,000

Current portion of borrowings under securitization facility 112,500 —

Current portion of lease liability - operating leases 12,818 12,253

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Accrued compensation 76,117 79,385

Liabilities held for sale 11,751 —

Accrued expenses and other current liabilities 94,194 76,809

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Long-term borrowings under securitization facility — 104,500

Long-term convertible securities 474,834 —

Lease liability - operating leases 88,118 97,504

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Total liabilities 2,100,269 1,886,504

Commitments and contingencies (Refer to Note 15)

Stockholders’ Equity:

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4,914 and 2,865 shares at December 31, 2020 and 2019, respectively

( 235,141 ) ( 119,943 )

Accumulated other comprehensive loss ( 74,059 ) ( 76,402 )

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Years Ended December 31,

2020 2019 2018

(In thousands)

OPERATING ACTIVITIES:

Net income $ 133,892 $ 50,201 $ 60,801

Adjustments to reconcile net income to net cash provided by operating activities:

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Non-cash impairment charges — 5,764 4,941

Deferred income tax benefit

Income tax expense (benefit) ( 64,138 ) ( 19,046 ) ( 8,184 )

Share-based compensation 19,590 21,255 20,779

Amortization of debt issuance costs

Amortization of debt issuance costs and expenses associated with debt refinancing 12,076 5,390 6,270

Non-cash lease expense 2,955 5,060 —

Realized loss on sale of short-term investments

Loss on disposal of property and equipment

Gain on divestiture of business

Accretion of bond issuance discount 15,415 — —

Loss on disposal of property and equipment and construction in-progress 7,855 1,821 1,385

Change in fair value of contingent consideration and others 951 1,119 1,214

Changes in assets and liabilities:

Accounts receivable 52,105 ( 9,428 ) ( 17,021 )

Inventories ( 48,348 ) ( 43,308 ) 8,300

Prepaid expenses and other current assets 1,632 13,071 3,933

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INVESTING ACTIVITIES:

Proceeds from sale of short-term investments

Purchases of property and equipment ( 38,890 ) ( 69,537 ) ( 77,741 )

Acquired in-process research and development and intangibles ( 25,000 ) ( 64,995 ) —

Proceeds from note receivable — 752 910

Cash used in business acquisitions, net of cash acquired — ( 30,509 ) 26,704

Acquired in-process research and development

Purchases of property and equipment

Proceeds from sales of property and equipment 3,657 37 422

Proceeds from divestiture of business

Net proceeds on swaps designated as net investment hedges

Net proceeds(payments) on swaps designated as net investment hedges ( 7,840 ) 1,584 —

Net cash used in investing activities ( 68,073 ) ( 162,668 ) ( 49,705 )

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Payments on debt ( 441,000 ) ( 246,100 ) ( 660,000 )

Purchase of option hedge on convertible notes ( 104,248 ) — —

Proceeds from convertible notes issuance 575,000 — —

Proceeds from sale of stock purchase warrants 44,563 — —

Payment of debt issuance costs ( 24,347 ) — ( 5,037 )

Purchase of treasury stock ( 100,000 ) — —

Proceeds from exercised stock options 5,232 6,948 9,392

Net cash paid for contingent consideration — — ( 38,196 )

Proceeds from the issuance of common stock, net of issuance costs — — 349,590

Debt issuance costs

Proceeds from exercised stock options

Cash taxes paid in net equity settlement ( 5,075 ) ( 6,514 ) ( 7,821 )

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Treasury Stock

Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Equity

Shares Amount Shares Amount

(In thousands)

Balance, January 1, 2018 81,306 $ 813 ( 2,927 ) $ ( 121,644 ) $ 821,758 $ ( 23,807 ) $ 285,186 $ 962,306

Other comprehensive income (loss), net of tax

Adoption of Update No.

2014-09 — — — — — — 1,854 1,854

Adoption of Update No.

2018-02 — — — — — — 532 532

Net income — — — — — — 60,801 60,801

Other comprehensive loss, net of tax — — — — — ( 21,636 ) — ( 21,636 )

Issuance of common stock through employee stock purchase plan — — — — 553 — — 553

Issuance of common stock for vesting of share-based awards, net of shares withheld for taxes

Exercise of warrants

700 4 46 1,030 52 — — 1,086

Equity offering

6,038 60 — — 349,529 — — 349,589

Share-based compensation — 3 — — 20,709 — — 20,712

Balance, December 31, 2018

Adoption of Update No.

Other comprehensive income (loss), net of tax

88,044 880 ( 2,881 ) ( 120,615 ) 1,192,601 ( 45,443 ) 348,373 1,375,796

Net income — — — — — — 50,201 50,201

Other comprehensive loss, net of tax — — — — — ( 30,959 ) — ( 30,959 )

Issuance of common stock through employee stock purchase plan

17 — — — 716 — — 716

Issuance of common stock for vesting of share-based awards, net of shares withheld for taxes

Equity offering

674 7 16 672 ( 961 ) — — ( 282 )

Share-based compensation — — — — 21,264 — — 21,264

Balance, December 31, 2019

Other comprehensive income (loss), net of tax

88,735 887 ( 2,865 ) ( 119,943 ) 1,213,620 ( 76,402 ) 398,574 1,416,736

Net income — — — — — — 133,892 133,892

Other comprehensive loss, net of tax — — — — — 2,343 — 2,343

Issuance of common stock through employee stock purchase plan

13 — — — 694 — — 694

Issuance of common stock for vesting of share-based awards, net of shares withheld for taxes

503 2 11 526 ( 1,066 ) — — ( 538 )

Share-based compensation — 4 — — 19,397 — — 19,401

Share repurchase and equity component of the convertible note issuance, net — — — — 42,539 — — 42,539

Accelerated shares repurchased — — ( 2,060 ) ( 115,724 ) 15,724 — — ( 100,000 )

Adoption of Update No.

2016-13 — — — — — — ( 200 ) ( 200 )

Balance, December 31, 2020 89,251 893 ( 4,914 ) ( 235,141 ) 1,290,908 ( 74,059 ) 532,266 1,514,867

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Integra LifeSciences Holdings Corporation (the “Company”) was incorporated in Delaware in 1989.

The Company, a world leader in medical devices, is dedicated to limiting uncertainty for surgeons through the development, manufacturing, and marketing of cost-effective surgical implants and medical instruments.

Its products are used primarily in neurosurgery, extremity reconstruction, orthopedics and general surgery.

The Company, a worldwide leader in medical devices, is dedicated to limiting uncertainty for surgeons through the development, manufacturing, and marketing of cost-effective surgical implants and medical instruments.

Its products are used primarily in neurosurgery, reconstruction and general surgery.

The Company sells its products directly through various sales forces and through a variety of other distribution channels.

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All intercompany accounts and transactions are eliminated in consolidation.

See Note 4, Acquisitions and Pro Forma Results , for details of new subsidiaries included in the consolidation.

See Note 5, Acquisitions , for details of new subsidiaries included in the consolidation.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses.

Significant estimates affecting amounts reported or disclosed in the consolidated financial statements include allowances for doubtful accounts receivable and sales returns and allowances, net realizable value of inventories, valuation of intangible assets and in-process research and development ("IPR&D"), amortization periods for acquired intangible assets, discount rates and estimated projected cash flows used to value and test impairments of long-lived assets and goodwill, estimates of projected cash flows, depreciation and amortization periods for long-lived assets, computation of taxes, valuation allowances recorded against deferred tax assets, the valuation of stock-based compensation, valuation of pension assets and liabilities, valuation of derivative instruments, and valuation of debt instruments and loss contingencies.

The preparation of consolidated financial statements is in conformity with generally accepted accounting principles in the United States ("GAAP") which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses.

Significant estimates affecting amounts reported or disclosed in the consolidated financial statements include allowances for doubtful accounts receivable and sales returns and allowances, net realizable value of inventories, in-process research and development ("IPR&D"), valuation of intangible assets including amortization periods for acquired intangible assets, discount rates and estimated projected cash flows used to value and test impairments of long-lived assets and goodwill, estimates of projected cash flows and depreciation and amortization periods for long-lived assets, computation of taxes, valuation allowances recorded against deferred tax assets, the valuation of stock-based compensation, valuation of derivative instruments, valuation of the equity component of convertible debt instruments, valuation of contingent liabilities, the fair value of debt instruments and loss contingencies.

These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the current circumstances.

Actual results could differ from these estimates.

The novel coronavirus (“COVID-19”) pandemic and the resulting adverse impacts to global economic conditions, as well as our operations, may impact future estimates including, but not limited to, inventory valuations, fair value measurements, goodwill and long-lived asset impairments, the effectiveness of the Company’s hedging instruments, deferred tax valuation allowances, and allowances for doubtful accounts receivable.

RECLASSIFICATIONS

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The Company evaluates the collectability of accounts receivable based on a combination of factors.

The Company recognizes a provision for doubtful accounts that reflects the Company’s estimate of expected credit losses for trade accounts receivable.

In circumstances where a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due to reduce the net recognized receivable to the amount that is reasonably expected to be collected.

For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company's historical experience.

For all other customers, the Company evaluates measurement of all expected credit losses for trade receivables held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses.

Account balances are charged off against the allowance when it is probable that the receivable will not be recovered.

Provision for doubtful accounts net of recoveries, associated with accounts receivable, included in selling, general and administrative expense, were $ 2.1 million , $ 0.6 million , and $ 2.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Provision for doubtful accounts net of recoveries, associated with accounts receivable, included in selling, general and administrative expense, were $ 3.6 million, $ 2.1 million, and $ 0.6 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, the value determined by the first-in, first-out method, or net realizable value.

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Total inventories, net $ 310,117 $ 316,054

At December 31, 2020, $ 52.8 million of inventories, net was presented separately as "Assets held for sale" in conjunction with the sale of the Extremity Orthopedics business.

See Note 3, Assets and Liabilities Held for Sale .

At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence or shelf life expiration.

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The cost of computer software developed or obtained for internal use is accounted for in accordance with the Accounting Standards Codification 350-40, Internal-Use Software.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Property, plant and equipment balances and corresponding lives were as follows:

2020 2019 Useful Lives

(In thousands)

Buildings and building improvements

Leasehold improvements

Machinery and production equipment

Surgical instrument kits

Information systems and hardware

Furniture, fixtures, and office equipment

Land $ 1,541 $ 1,476

Buildings and building improvements 17,345 16,262 5 - 40 years

Leasehold improvements 144,852 114,941 1 - 20 years

Machinery and production equipment 166,973 155,313 3 - 20 years

Surgical instrument kits 1,164 33,104 4 - 5 years

Information systems and hardware 143,770 138,398 1 - 7 years

Furniture, fixtures, and office equipment 20,843 22,145 1 - 15 years

Construction-in-progress 73,890 140,366

Total 570,378 622,005

Accumulated depreciation ( 282,849 ) ( 284,601 )

Property, plant and equipment, net $ 287,529 $ 337,404

At December 31, 2020, $ 37.9 million of property, plant and equipment, net was presented separately as "Assets held for sale" in conjunction with the sale of the Extremity Orthopedics business.

See Note 3, Assets and Liabilities Held for Sale .

Depreciation expense associated with property, plant and equipment was $ 42.1 million, $ 42.6 million, and $ 44.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

During the fourth quarter of 2020, the Company wrote-off certain construction in progress of $ 6.7 million related to a manufacturing project that the Company decided to discontinue.

The Company determined that the carrying amounts of these assets were not recoverable.

CAPITALIZED INTEREST

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Capitalization commences with the first expenditure for the project and continues until the project is substantially complete and ready for its intended use.

When no debt is incurred specifically for a project, interest is capitalized on project

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

expenditures using the weighted average cost of the Company's outstanding borrowings.

When no debt is incurred specifically for a project, interest is capitalized on project expenditures using the weighted average cost of the Company's outstanding borrowings.

For the years ended December 31, 2020 and 2019, respectively, the Company capitalized $ 2.3 million and $ 3.1 million of interest expense into property, plant and equipment.

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The operating results of the acquired business are reflected in the consolidated financial statements after the date of acquisition.

Acquired in-process research and development (“IPR&D”) is recognized at fair value and initially characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use.

Acquired IPR&D is recognized at fair value and initially characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use.

Contingent consideration is recognized at the estimated fair value on the acquisition date.

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Payments that would be recognized as contingent consideration in a business combination are expensed when probable in an asset acquisition.

Refer to Note 4, Acquisitions and Pro Forma Results for more information.

Refer to Note 5, Acquisitions for more information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

GOODWILL AND OTHER INTANGIBLE ASSETS

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The Company capitalizes costs incurred to renew or extend the term of recognized intangible assets and amortizes those costs over their expected useful lives.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

LONG-LIVED ASSETS

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These contributions were recorded in selling, general, and administrative expense.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company develops, manufactures, and sells medical devices globally and its earnings and cash flows are exposed to market risk from changes in interest rates and currency exchange rates.

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subsidiaries.

Foreign currency transaction loss of $ 0.3 million , $ 1.7 million and $ 2.9 million are reported in other income, net in the statements of operations, for the year ended December 31, 2019 , 2018 and 2017 , respectively.

Foreign currency transaction losses of $ 1.6 million, $ 0.3 million and $ 1.7 million are reported in other income, net in the statements of operations, for the year ended December 31, 2020, 2019 and 2018, respectively.

Income taxes are accounted for by using the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.

A valuation allowance is provided when it is more likely than not that some portion

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

or all of the deferred tax assets will not be realized.

A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted.

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cash needs without requiring the repatriation of foreign cash.

The Tax Cuts and Jobs Act (the “2017 Tax Act”), enacted in December 2017, imposed a toll tax on a deemed repatriation of undistributed earnings of foreign subsidiaries.

The Tax Cuts and Jobs Act (the “2017 Tax Act”), enacted in December 2017,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

imposed a toll tax on a deemed repatriation of undistributed earnings of foreign subsidiaries.

One time or unusual items that may impact the ability or intent to keep the foreign earnings and cash indefinitely reinvested include significant U.S.

acquisitions, loans from a foreign subsidiary, changes in tax laws.

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No.

118 to address the application of U.S.

GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act.

The Company recognized the provisional tax impacts related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017.

The Company applied the guidance of SAB No.

118 when accounting for the enactment date effects of the 2017 Tax Act in 2017 and throughout 2018.

The Company finalized its calculations and completed its accounting for the income tax effect of the 2017 Tax Act in December 2018.

acquisitions, loans from a foreign subsidiary and changes in tax laws.

REVENUE RECOGNITION

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Refer to Note 4, Revenue From Contracts With Customers for more information.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

RESEARCH AND DEVELOPMENT

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Otherwise, charges are recognized when management has approved a specific plan and employee communication requirements have been met.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

For the year ended December 31, 2020, the Company incurred restructuring costs of $ 4.9 million in cost of goods sold, $ 1.2 million in selling, general and administrative and $ 0.3 million in research and development related to employee terminations associated with a future plant closure in the consolidated statement of operations.

As of December 31, 2020, the restructuring costs of $ 6.4 million were included in other liabilities in the consolidated balance sheet.

STOCK-BASED COMPENSATION

The Company applies the authoritative guidance for stock-based compensation.

This guidance requires companies to recognize the expense related to the fair value of their stock-based compensation awards.

Relevant authoritative guidance requires companies to recognize the expense related to the fair value of their stock-based compensation awards.

Stock-based compensation expense for stock option awards are based on the grant date fair value using the binomial distribution model.

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PENSION BENEFITS

The Company maintains defined benefit pension plans that cover certain employees in Austria, France, Japan, Germany and Switzerland.

The Company maintains defined benefit pension plans that cover certain employees in France, Japan, Germany and Switzerland.

Various factors are considered in determining the pension liability, including the number of employees expected to be paid their salary levels and years of service, the expected return on plan assets, the discount rate used to determine the benefit obligations, the timing of benefit payments and other actuarial assumptions.

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The amount in excess of the corridor is amortized over the average remaining service period to retirement date of active plan participants.

Deferred Compensation Plan

In May 2019, the Company adopted the Integra LifeSciences Deferred Compensation Plan (the “Plan”).

Under the Plan, certain employees of the Company may defer the payment and taxation of up to 75 % of their base salary and up to 100 % of bonus amounts and other eligible cash compensation.

This deferred compensation is invested in funds offered under the Plan and is valued based on Level 1 measurements in the fair value hierarchy.

The purpose of the Plan is to retain key employees by providing them with an opportunity to defer a portion of their compensation as elected by the participant in accordance with the Plan.

Any amounts set aside to defray the liabilities assumed by the Company will remain the general assets of the Company until such amounts are distributed to the participants.

Assets of the Company's deferred compensation plan are included in Other current assets and recorded at fair value based on their quoted market prices.

CONCENTRATION OF CREDIT RISK

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A portion of the Company's trade receivables to customers outside the United States includes sales to foreign distributors, who then sell to government owned or supported healthcare systems.

None of the Company's customers accounted for 10% or more of the consolidated net sales during the years ended December 31, 2019 , 2018 and 2017 .

No ne of the Company's customers accounted for 10 % or more of the consolidated net sales during the years ended December 31, 2020, 2019 and 2018.

RECENT ACCOUNTING PRONOUNCEMENTS

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This update became effective for all annual periods and interim reporting periods beginning after December 15, 2018.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company adopted the New Lease Standard as of January 1, 2019 using a modified retrospective transition.

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The Company elected the ‘package of practical expedients’ which permits the Company not to reassess the prior conclusions about lease identification, lease classification and initial direct costs under the new standard.

The Company also elected the use-of-hindsight practical expedient.

The Company also

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

elected the use-of-hindsight practical expedient.

As most of the leases do not provide an implicit rate, the Company used the collateralized incremental borrowing rate based on the information available at the lease implementation date in determining the present value of the lease payments.

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Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.

The Company will adopt ASU 2016-13 effective January 1, 2020 utilizing a modified retrospective method of transition.

The adoption of this guidance will not have a significant impact on the Company's consolidated financial statements and related disclosures.

The ASU became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted this guidance on January 1, 2020 using a modified retrospective transition method which requires a cumulative-effect adjustment to the opening balance of retained earnings to be recognized on the date of adoption with no change to financial results reported in prior periods.

The cumulative-effect adjustment recorded on January 1, 2020 is not material.

The adoption of this ASU did not have a significant impact on the Company's consolidated financial statements and related disclosures.

The Company's exposure to credit losses may increase if its customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the COVID-19 pandemic, and other customer-specific factors.

Although the Company has historically not experienced significant credit losses, it is possible that there could be an adverse impact due to customer and governmental responses to the COVID-19 pandemic.

In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20):

Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans .

This guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans, including removing certain previous disclosure requirements, adding certain new disclosure requirements, and clarifying certain other disclosure requirements.

The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

Early adoption was permitted.

The Company adopted this guidance for the year ended December 31, 2020.

The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No.

2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) , relating to a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a vendor (e.g., a service contract).

Under the new guidance, a customer will apply the same criteria for capitalizing implementation costs as it would for an arrangement that has a software license.

Under this guidance, a customer will apply the same criteria for capitalizing implementation costs as it would for an arrangement that has a software license.

The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures.

The Company will adopt ASU 2018-15 effective January 1, 2020 utilizing a prospective method of transition.

The adoption of this guidance will not have a significant impact on the Company's consolidated financial statements and related disclosures.

The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

The Company adopted this guidance on January 1, 2020 using a prospective transition method.

The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures.

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes :

Simplifying the Accounting for Income Taxes intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

Simplifying the Accounting for Income Taxes, intended to simplify the accounting for income taxes by eliminating certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

This guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted.

The Company will adopt ASU No.

2019-12 effective January 1, 2021.

Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively.

The Company is currently assessing the impact of this standard on the financial condition and results of operations.

There are no other recently issued accounting pronouncements that are expected to have any significant effect on the Company's financial position, results of operations or cash flows.

The Company does not expect this guidance to have a material impact on our results or financial position.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform , which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

This amendment applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

This ASU became effective immediately and may be applied prospectively to contract modifications made and hedging

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

relationships entered into or evaluated on or before December 31, 2022.

In January of 2021, the FASB also issued ASU No.

2021-01, Reference Rate Reform- Scope which clarified certain optional expedients and exceptions to entities that are affected because of the reference rate reform.

The amendments in this ASU affect the guidance in ASU No.

2020-04 and are effective in the same timeframe as ASU No.

The Company is currently assessing the impact that this ASU will have on its consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No.

2020-06 Debt- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40)-Accounting For Convertible Instruments and Contracts in an Entity's Own Equity .

The guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP.

Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features.

The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify.

The guidance also simplifies the diluted net income per share calculation in certain areas.

The ASU will be effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

The Company will adopt this standard on January 1, 2021 using the modified retrospective method.

The estimated impact includes the convertible debt instrument being accounted for as a single liability measured at its amortized cost and elimination of the non-cash interest expense as the Company will not separately present the equity embedded conversion feature in such debt.

The Company also expects to adopt the if-converted method for earnings per share.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements , which updates various codification topics by clarifying or improving disclosure requirements to align with the SEC’s regulations.

The Company will adopt ASU 2020-10 as of the reporting period beginning January 1, 2021.

The adoption of this update is not expected to have a material effect on the Company’s consolidated financial statements.

There are no other recently issued accounting pronouncements that are expected to have a significant effect on the Company's financial position, results of operations or cash flows.

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

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NON-CASH INVESTING AND FINANCING ACTIVITIES

During the fourth quarter of 2019, the Company achieved the first developmental milestone which triggered a $ 5.0 million obligation to be paid to former shareholders of Rebound.

Property and equipment purchases included in liabilities at December 31, 2020, 2019 and 2018 were $ 1.6 million, $ 11.0 million and $ 5.4 million, respectively.

In December 2019, the Company achieved the first developmental milestone which triggered a $ 5.0 million obligation to be paid to former shareholders of Rebound Therapeutics Corporation ("Rebound").

In addition, the Company recorded $ 5.0 million as in-process research and development expense in the consolidated statements of operations.

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The milestone was paid during the first quarter of 2020.

Property and equipment purchases included in liabilities at December 31, 2019 , 2018 and 2017 were $ 11.0 million , $ 5.4 million and $ 7.8 million , respectively.

During the year ended December 31, 2017, the Company issued 2.8 million shares of common stock due to the exercise of 8.7 million warrants associated with convertible notes issued in 2011.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

ASSETS AND LIABILITIES HELD FOR SALE

On September 29, 2020, the Company and certain of its subsidiaries entered into an agreement to sell its Extremity Orthopedics business to Smith & Nephew USD Limited for approximately $ 240 million in cash.

The transaction includes the sale of the Company’s upper and lower Extremity Orthopedics product portfolio, including ankle and shoulder arthroplasty and hand and wrist product lines.

In connection with the transaction, the Company will pay $ 41.5 million to the Consortium of Focused Orthopedists, LLC (“CFO”) pursuant to the terms of certain agreements between Integra and CFO relating to the development of shoulder arthroplasty products.

On January 4, 2021, upon the terms and conditions set forth in the Divestiture agreement, the Company completed its previously announced sale of its Extremity Orthopedics business to Smith & Nephew USD Limited and received an aggregate purchase price of $ 240.0 million.

Refer to Note 18.

Subsequent Events for details of the transaction.

The Company considered the assets and liabilities associated with the Extremity Orthopedics business to be accounted as held for-sale as the six criteria under ASC 260 were met during the third quarter of 2020.

Upon designation of the assets and liabilities as held for sale, the Company recorded the assets at the lower of their carrying value or their estimated fair value, less

estimated costs to sell.

Goodwill was allocated to the assets and liabilities held for sale using the relative fair value method of the Extremity Orthopedics business to the Company's Orthopedics and Tissue Technologies reporting unit.

The fair value of the business less costs to sell exceeded the related carrying value.

The Extremity Orthopedics business was treated as a single disposal group and presented separately in the consolidated balance sheet as assets and liabilities held for sale as of December 31, 2020.

These balances are presented as current assets and liabilities as they are expected to be sold within twelve months.

The major classes of assets and liabilities classified as a held for sale consisted of the following as of December 31, 2020 (amounts in thousands):

Prepaid expenses and other current assets 713

Right of use asset - operating leases and Other assets 3,186

Deferred tax assets 6,589

Intangible assets, net 13,332

Property, plant and equipment, net 37,893

Goodwill 47,546

Inventories 52,845

Total assets held for sale 162,104

Other liabilities 336

Current portion of lease liability - operating leases 539

Accrued compensation 1,767

Deferred tax liabilities 3,440

Lease liability - operating leases 5,669

Total liabilities held for sale 11,751

REVENUES FROM CONTRACTS WITH CUSTOMERS

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The Company has no significant revenues recognized on payments expected to be received more than one year after the transfer of control of products or services to customers.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Contract Asset and Liability

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At December 31, 2020, the short-term portion of the contract liability of $ 5.3 million and the long-term portion of $ 6.7 million were included in accrued expenses and other current liabilities and other liabilities in the consolidated balance sheet.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of December 31, 2020, the Company is expected to recognize revenue of approximately $ 5.3 million in 2021, $ 2.9 million in 2022, $ 1.5 million in 2023, $ 0.8 million in 2024, $ 0.6 million in 2025, and $ 0.9 million thereafter.

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The following table presents revenues disaggregated by the major sources of revenues for years-ended December 31, 2020, 2019 and 2018 (amounts in thousands):

Year Ended December 31, 2019

Year Ended December 31, 2018

Year Ended December 31, 2017

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018

(amounts in thousands)

Precision Tools and Instruments

Neurosurgery 716,339 767,793 740,268

Instruments 178,492 $ 228,413 $ 223,661

Total Codman Specialty Surgical 894,831 996,206 963,929

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Total revenue $ 1,371,868 $ 1,517,557 $ 1,472,441

Prior period amounts were reclassified between categories within the Codman Specialty Surgical segment to conform to the current period presentation.

See Note 17, Segment and Geographical Information , for details of revenues based on the location of the customer.

Effect of Adoption of ASC Topic 606

On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method.

Results of operations for the reporting periods after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with Topic 605, Revenue Recognition .

The adoption of Topic 606 resulted in an increase to the opening retained earnings of $ 1.9 million , which was recorded net of taxes as of January 1, 2018 to reflect the change in timing of the recognition of revenue related to the Company's private label business from point in time to over time during the manufacturing process and goods in transit for which control was transferred to customers at the time of shipment.

Total assets and liabilities increased by $ 7.1 million and $ 5.2 million , respectively, as of January 1, 2018.

The impact of adoption of Topic 606 to the Company's consolidated statement of operations for the year ended December 31, 2018 was as follows:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended December 31, 2018

Excluding Impact of Topic 606

(Amounts in thousands)

Statement of Operations

Total revenue, net

Cost of goods sold

Income tax benefit

ACQUISITIONS AND PRO FORMA RESULTS

Arkis BioSciences Inc.

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This method requires that assets acquired and liabilities assumed in a business combination to be recognized at their fair values as of the acquisition date.

As of December 31, 2019, certain amounts relating to tax related matters have not been finalized.

The finalization of these matters could result in changes to goodwill.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:

Preliminary Valuation as of December 31, 2019

Weighted Average Life

The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition date:

Final Valuation Weighted Average Life

(Dollars in thousands)

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Intangible assets:

CerebroFlo developed Technology

Enabling technology license

CerebroFlo developed technology 20,100 15 years

Enabling technology license 1,980 14 years

Goodwill 27,153

Total assets acquired 52,228

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The estimated the fair value as of December 31, 2020 was $ 15.1 million.

This amount is included in other liabilities at December 31, 2019 in the consolidated balance sheets of the Company.

The Company recorded $ 3.4 million in accrued expenses and other current liabilities and $ 11.7 million in other liabilities at December 31, 2020 in the consolidated balance sheets of the Company.

Deferred Tax Liabilities

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The acquisition of Rebound was primarily concentrated in one single identifiable asset and thus, for accounting purposes, the Company has concluded that the acquired assets do not meet the accounting definition of a business.

The initial payment was allocated primarily to Aurora, resulting in a $ 59.9 million in-process research and development expense.

The initial payment was allocated primarily to Aurora, resulting in a $ 59.9 million IPR&D expense.

The balance of approximately $ 7.2 million, which included $ 2.1 million of cash and cash equivalents and a net deferred tax asset of $ 4.2 million, was allocated to the remaining net assets acquired.

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During the fourth quarter of 2019, the Company achieved the first developmental milestone which triggered a $ 5.0 million obligation to be paid to former shareholders of Rebound.

The Company recorded $ 5.0 million as in-process research and development expense in the consolidated statements of operations.

The Company recorded $ 5.0 million as IPR&D expense in the consolidated statements of operations.

The obligation was included in accrued expenses and other current liabilities at December 31, 2019 in the consolidated balance sheets.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the fourth quarter of 2020, the Company achieved another developmental milestone which triggered a $ 20.0 million obligation to be paid to the former shareholders of Rebound.

The Company recorded $ 20.0 million as an intangible asset in the consolidated balance sheet upon achieving the milestone.

The milestone was paid during the fourth quarter of 2020.

Integrated Shoulder Collaboration, Inc.

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The total upfront payment of $ 1.7 million was expensed as a component of research and development expense and the future milestone and option payments will be recorded if the corresponding events become probable.

Johnson & Johnson's Codman Neurosurgery Business

On February 14, 2017, the Company entered into a binding offer letter (the “Offer Letter”) with DePuy Synthes, Inc., a Delaware corporation (“DePuy Synthes”), a wholly-owned subsidiary of Johnson & Johnson, pursuant to which Integra made a binding offer to acquire certain assets, and assume certain liabilities, of Johnson & Johnson’s Codman neurosurgery business (the “Codman Acquisition”).

The assets and liabilities subject to the proposed Codman Acquisition relate to the research, development, manufacturing, marketing, distribution and sale of certain products used in connection with neurosurgery procedures.

The purchase price for the Codman Acquisition was $ 1.014 billion .

The Codman Acquisition was accounted for using the acquisition method of business combination under ASC 805, Business Combinations.

This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

During the third quarter of 2018, the Company completed the purchase accounting for the Codman Acquisition.

In connection with the closing of the Codman Acquisition, the Company and DePuy Synthes entered into certain additional ancillary agreements, including transition services agreements, a transition manufacturing services agreement and certain other customary agreements.

Amounts accrued and due to DePuy Synthes as of December 31, 2019 and 2018 were $ 2.1 million and $ 22.8 million , respectively.

The revenue and net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it has been integrated into the Company's operations.

The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition date and reflects measurement period adjustments subsequent to the acquisition date:

Final Valuation

Weighted Average Life

(Dollars in thousands)

Assets held for sale

Other current assets

Property, plant and equipment

Intangible assets:

Codman corporate trade name

Completed technology

Total assets acquired

Accrued expenses

Pension liabilities

Net assets acquired

During 2018, the Company received cash of $ 26.7 million from DePuy Synthes related to working capital adjustments, which was recorded within investing activities on the consolidated statements of cash flows.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company recorded measurement period adjustments to goodwill totaling $ 4.0 million .

During the first half of 2018, the Company adjusted goodwill by $ 3.2 million because of working capital adjustments of $ 6.2 million that were offset by inventory adjustments of $ 3.0 million .

During the third quarter 2018, the Company adjusted goodwill by $ 0.8 million after finalizing the valuation step up of property, plant and equipment of $ 5.5 million .

The adjustment for property, plant and equipment was offset by completed technology intangible asset adjustments of $ 4.7 million .

During the first three quarters of 2018, the Company paid $ 15.9 million for inventory that was included in the initial purchase accounting.

The payment was included within financing activities on the consolidated statements of cash flows.

The Company recorded $ 17.3 million in cost of goods sold related to fair value inventory purchase accounting adjustments for the year ended December 31, 2018.

Goodwill was allocated to the Codman Specialty Surgical segment.

Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce.

Goodwill recognized as a result of the acquisition is generally deductible for income tax purposes.

In the fourth quarter of 2017, the Company wrote-off construction in progress of $ 6.3 million related to a project acquired from Codman Neurosurgery that the Company decided to discontinue after the Codman Acquisition.

Derma Sciences

On February 24, 2017, the Company executed the Agreement and Plan of Merger (the "Merger Agreement") under which the Company acquired all of the outstanding shares of Derma Sciences, Inc., a Delaware corporation ("Derma Sciences") for an aggregate purchase price of approximately $ 210.8 million , including payment of certain of Derma Sciences' closing expenses and settlement of stock-based compensation plans of $ 4.8 million and $ 4.3 million , respectively.

The purchase price consisted of a cash payment to the former shareholders of Derma Sciences of approximately $ 201.7 million upon the closing of the transaction.

Derma Sciences is a tissue regeneration company focused on advanced wound and burn care that offers products to help manage chronic and hard-to-heal wounds, especially those resulting from diabetes and poor vascular functioning.

The revenue and net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it has been integrated into the Company's operations.

The Derma Sciences acquisition was accounted for using the acquisition method of business combination under ASC 805, Business Combinations.

This method requires that assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date.

The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition date and reflects purchase accounting adjustments subsequent to the acquisition date:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Final Valuation

Weighted Average Life

(Dollars in thousands)

Cash and cash equivalents

Short-term investments

Accounts receivable

Prepaid expenses and other current assets

Property, plant and equipment

Intangible assets:

Customer relationship

Trademarks/brand names

Completed technology

Non-compete agreement

Deferred tax assets

Total assets acquired

Accounts payable

Accrued expenses and other current liabilities

Contingent liability

Other liabilities

Net assets acquired

Goodwill related to the Derma Sciences acquisition was allocated to the Orthopedics and Tissue Technologies segment.

Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce.

Goodwill recognized as a result of this acquisition is not deductible for income tax purposes.

During the first quarter of 2018, the Company completed its purchase accounting of Derma Sciences.

Short-term Investments

Short-term investments recognized at the acquisition date of Derma Sciences are investments in equity and debt securities including certificates of deposit purchased with an original maturity greater than three months which are deposited in various U.S.

financial institutions and are fully insured by the Federal Deposit Insurance Corporation.

The Company considers securities with original maturities of greater than 90 days to be available for sale securities.

Securities under this classification are recorded at fair value and unrealized gains and losses are recorded within accumulated other comprehensive income.

The estimated fair value of the available for sale securities is determined based on quoted market prices.

The Company evaluates securities with unrealized losses to determine whether such losses, if any, are other than temporary.

Short-term investments are classified as Level 1 in fair value hierarchy.

Fair values of short-term investments are determined using the unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the balance sheet date.

In the second quarter of 2017 , the Company sold the acquired short-term investments and recognized a realized loss of $ 2.3 million included in other income, net in the consolidated statement of operations.

Deferred Taxes

The acquired deferred taxes of $ 14.5 million include a deferred tax asset of $ 39.7 million related to a federal net operating loss which the Company expects to utilize against income in future periods and a deferred tax asset of $ 16.4 million related to intangibles acquired by Derma Sciences in previous periods, offset by a deferred tax liability of $ 41.1 million for new intangibles for which the Company will not receive a tax benefit and deferred tax liability $ 0.5 million related to various deferred items.

In the second quarter of 2017, the Company decreased the preliminary estimated value of the net deferred tax assets by $ 1.5 million to reflect adjustments to preliminary estimated fair values of assets and liabilities acquired.

In fourth quarter of 2017, the Company decreased the preliminary value of the deferred tax asset by $ 3.3 million to reflect returns filed for periods prior to the acquisition date and adjustments for expected effective state tax rates.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

United States Food and Drug Administration ("FDA") Untitled Letter

On June 22, 2015, the FDA issued an Untitled Letter (the "Untitled Letter") alleging that BioD morselized amniotic membrane based products do not meet the criteria for regulation as human cellular tissue-based products (“HCT/Ps”) solely under Section 361 of the Public Health Service Act and that, as a result, BioD would need a biologics license to lawfully market those morselized products.

Since the issuance of the Untitled Letter, BioD and more recently, the Company have been in discussion with the FDA to communicate its disagreement with the FDA’s assertion that certain products are more than minimally manipulated.

The FDA has not changed its position that certain of the BioD acquired products are not eligible for marketing solely under Section 361.

In November 2017, the FDA issued the final guidance document related to human tissue titled, “Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue-Based Products:

Minimal Manipulation and Homologous Use” (the “HCT/P Final Guidance”).

The HCT/P Final Guidance maintains the FDA’s position that products such as the Company’s morselized amniotic membrane tissue-based products do not meet the criteria for regulation solely as HCT/Ps.

In addition, the FDA articulated a risk-based approach to enforcement and, while some uses for amniotic membrane tissue-based products would enjoy as much as thirty-six months of enforcement discretion, other high risk uses could be subject to immediate enforcement action.

The Company does not believe the uses for its amniotic membrane tissue-based products fall into the high-risk category.

As of February 21, 2020 , the Company has not received any further notice of enforcement action from the FDA regarding its morselized amniotic tissue-based products.

Nonetheless, the Company can make no assurances that the FDA will continue to exercise its enforcement discretion with respect to the Company’s amniotic membrane tissue-based products, and any potential action of the FDA could have a financial impact regarding the sales of such products.

The Company has been evaluating and is considering regulatory approval pathways for its morselized amniotic membrane tissue-based products.

Revenues from BioD morselized amniotic material-based products for the year ended December 31, 2019 were less than 1.0 % of consolidated revenues.

Contingent Consideration

The Company assumed contingent consideration incurred by Derma Sciences, Inc.

("Derma Sciences") related to its acquisitions of BioD and the intellectual property related to Medihoney products.

The Company accounted for the contingent liabilities by recording their fair value on the date of the acquisition based on a probability weighted income approach.

The Company has paid $ 33.3 million related to the aforementioned contingent liabilities.

One contingent liability remains which relates to net sales of Medihoney products exceeding certain amounts defined in the agreement between the Company and Derma Sciences.

The potential maximum undiscounted payment amounts to $ 3.0 million .

The estimated fair value as of December 31, 2019 and December 31, 2018 was $ 0.2 million included in other liabilities, in the consolidated balance sheets.

Pro Forma Results (unaudited)

The following unaudited pro forma financial information summarizes the results of operations for the years ended December 31, 2017 for the acquisitions of Codman Neurosurgery, Derma Sciences and divestiture to Natus, which were completed by the Company during 2017 had been completed as of the beginning of 2017.

The pro forma results are based upon certain assumptions and estimates, and they give effect to actual operating results prior to the acquisitions and adjustments to reflect (i) the change in interest expense, depreciation expense, intangible asset amortization and fair value inventory step-up, (ii) timing of recognition for certain expenses that will not be recurring in the post-acquisition period, which includes $ 2.9 million incurred by Derma Sciences prior to acquisition and $ 24.9 million incurred by Integra, (iii) gain from the sale of business of $ 2.6 million related to the Divestiture to Natus, and (iv) income taxes at a rate consistent with the Company’s statutory rate at the date of the acquisitions.

No effect has been given to other cost reductions or operating synergies.

As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisitions had taken place on the basis assumed above, nor are they indicative of the results of future combined operations.

Year Ended December 31, 2017

(In thousands except per share amounts)

Total revenue from continuing operations

Net income from continuing operations

Basic earnings per share from continuing operations

Divestiture to Natus

On September 8, 2017, to facilitate the acquisition of the Codman Neurosurgery Business, the Company and certain of its subsidiaries entered into an asset purchase agreement (the “Divestiture Agreement”) with Natus Medical Incorporated (“Natus”), pursuant to which the Company agreed to divest its Camino® Intracranial Pressure monitoring and the U.S.

rights to its fixed pressure shunts

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

businesses within its Codman Specialty Surgical segment together with certain neurosurgery assets acquired as part of the Codman Acquisition, which includes Codman U.S.

dural graft implant, external ventricular drainage catheter and cerebrospinal fluid collection systems businesses (the “Divestiture”).

The Divestiture Agreement was entered into in connection with the review of the Codman Acquisition by the Federal Trade Commission and the antitrust authority of Spain.

On October 6, 2017, upon the terms and subject to the conditions of the Divestiture Agreement, the Divestiture was completed and Natus paid an aggregate purchase price of $ 46.4 million .

Assets and liabilities divested consisted of the following as of October 6, 2017 (amounts in thousands):

Prepaid expenses and other current assets

Assets held for sale

Property, plant and equipment, net

Total assets divested

Deferred revenue

Accrued compensation

Total liabilities divested

Assets held for sale includes assets and liabilities related to U.S.

dural graft implant, external ventricular drainage catheters and cerebrospinal fluid collection systems businesses acquired as part of acquisition of Codman Neurosurgery.

The transitional supply agreement with Natus requires the Company to provide to Natus certain assets defined in the transitional supply agreement upon termination.

The Company recognized a liability of $ 1.3 million , included in other liabilities in consolidated balance sheet, related to estimated cost of assets to be provided to Natus upon termination of transitional supply agreement.

The Divestiture does not represent a strategic shift that will have a major effect on the Company's operations and financial statements.

Goodwill was allocated to the assets and liabilities divested using the relative fair value method.

The Company recognized a gain on sale of business of $ 2.6 million included in other income, net in its consolidated statement of operations for the year ended December 31, 2017.

Fifth Amended and Restated Senior Credit Agreement

On May 3, 2018, the Company entered into the fifth amendment and restatement (the "May 2018 Amendment") of its Senior Credit Facility (the "Senior Credit Facility") with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

The May 2018 Amendment extended the maturity date to May 3, 2023 and decreased the applicable rate, as described below.

The Company continues to have the aggregate principal amount of $ 2.2 billion available to it through the following facilities:

a $ 900.0 million Term Loan facility;

a $ 1.3 billion revolving credit facility, which includes a $ 60.0 million sublimit for the issuance of standby letters of credit and a $ 60.0 million sublimit for swingline loans.

In connection with the May 2018 Amendment, the Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) was modified to the following:

Fiscal Quarter

Maximum Consolidated Total Leverage Ratio

Execution of May 2018 Amendment through March 31, 2019

June 30, 2019 through March 31, 2020

June 30, 2020 through March 31, 2021

June 30, 2021 and thereafter

In connection with the sale of the Company's Extremity Orthopedic business, on January 4, 2021 the Company paid $ 41.5 million to CFO pursuant to the terms of certain agreements between the Company and CFO relating to the sale of shares of ISC effectively terminating our licensing agreement with ISC.

See Note 3, Assets and Liabilities Held for Sale and Note 18.

Subsequent Events for details of the transaction.

Amendment to the Sixth Amended and Restated Senior Credit Agreement

On February 3, 2020, the Company entered into the sixth amendment and restatement (the "February 2020 Amendment") of its Senior Credit Facility (the "Senior Credit Facility") with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

The February 2020 Amendment extended the maturity date to February 3, 2025.

The Company continues to have the aggregate principal amount of up to approximately $ 2.2 billion available to it through the following facilities:

(i) $ 877.5 million Term Loan facility, and (ii) a $ 1.3 billion revolving credit facility, which includes a $ 60.0 million sublimit for the issuance of standby letters of credit and a $ 60.0 million sublimit for swingline loans.

On July 14, 2020, the Company entered into an amendment (the "July 2020 Amendment") to the February 2020 Amendment of the Senior Credit Facility to increase financial flexibility in light of the unprecedented impact and uncertainty of the COVID-19 pandemic on the global economy.

The July 2020 amendment does not increase the Company’s total indebtedness.

In connection with the July 14, 2020 amendment, the Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) was modified to the following:

Fiscal Quarter Maximum Consolidated Total Leverage Ratio

Execution of July 2020 Amendment through June 30, 2021 5.50 to 1.00

September 30, 2021 through June 30, 2022 5.00 to 1.00

September 30, 2022 through June 30, 2023 4.50 to 1.00

September 30, 2023 and the last day of each fiscal quarter thereafter 4.00 to 1.00

Borrowings under the Senior Credit Facility bear interest, at the Company’s option, at a rate equal to the following:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

the Eurodollar Rate (as defined in the amendment and restatement) in effect from time to time plus the applicable rate (ranging from 1.00 % to 2.25 %), or

the highest of:

the weighted average overnight Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50 % , or plus the applicable rate (ranging from 0 % to 0.75 % ),

the weighted average overnight Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50 %

the prime lending rate of Bank of America, N.A.

plus the applicable rate (ranging from 0 % to 0.75 % ), and

the one-month Eurodollar Rate plus 1.00 % plus the applicable rate (ranging from 0 % to 0.75 % ).

The applicable rates are based on the Company’s consolidated total leverage ratio (defined as the ratio of (a) consolidated funded indebtedness less cash that is not subject to any restriction on the use or investment thereof to (b) consolidated EBITDA at the time of the applicable borrowing).

The Company will also pay an annual commitment fee (ranging from 0.15 % to 0.35 % ), based on the Company’s consolidated total leverage ratio, on the amount available for borrowing under the revolving credit facility.

At December 31, 2019 and 2018 , there was $ 375.0 million and $ 345.0 million outstanding, respectively, under the revolving portion of the Senior Credit Facility at a weighted average interest rate of 3.2 % and 4.0 % , respectively.

At December 31, 2019 and 2018 , there was $ 877.5 million and $ 900.0 million outstanding under the Term Loan component of the Senior Credit Facility at a weighted average interest rate of 3.2 % and 3.9 % , respectively.

the one-month Eurodollar Rate plus 1.00 %

The applicable rates are based on the Company’s consolidated total leverage ratio (defined as the ratio of (a) consolidated funded indebtedness as of such date less cash that is not subject to any restriction on the use or investment thereof to (b) consolidated EBITDA as defined by the July 2020 amendment, for the period of four consecutive fiscal quarters ending on such date).

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company will pay an annual commitment fee (ranging from 0.15 % to 0.30 %), based on the Company's consolidated total leverage ratio, on the amount available for borrowing under the revolving credit facility.

The Senior Credit Facility is collateralized by substantially all of the assets of the Company’s U.S.

subsidiaries, excluding intangible assets.

The Senior Credit Facility is subject to various financial and negative covenants and at December 31, 2019 the Company was in compliance with all such covenants.

The Company capitalized $ 4.2 million of incremental financing costs in 2018 in connection with the modifications of the Senior Credit Facility.

The Senior Credit Facility is subject to various financial and negative covenants and at December 31, 2020, the Company was in compliance with all such covenants and is expected to be in compliance over the next year.

In connection with the February 2020 Amendment, the Company capitalized $ 4.6 million of financing costs in connection with modification of the Senior Credit Facility and wrote off $ 1.2 million of previously capitalized financing costs during the first quarter of 2020.

In connection with the July 2020 amendment, the Company expensed $ 3.3 million of incremental financing costs in connection with the modification of the Senior Credit Facility during the third quarter of 2020.

At December 31, 2020 and 2019, there was $ 97.5 million and $ 375.0 million outstanding, respectively, under the revolving portion of the Senior Credit Facility at weighted average interest rates of 1.5 % and 3.2 %, respectively.

At December 31, 2020 and 2019, there was $ 877.5 million outstanding, respectively, under the Term Loan component of the Senior Credit Facility at weighted average interest rates of 1.5 % and 3.2 %, respectively.

At December 31, 2020, $ 33.8 million million of the Term Loan component of the Senior Credit Facility is classified as current on the consolidated balance sheet as the first mandatory repayment is due June 30, 2021.

The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit facility and Term Loan component at December 31, 2020 were approximately $ 98.4 million and $ 883.6 million, respectively.

These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company.

These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair value hierarchy.

Level 2 inputs represent inputs that are observable for the asset or liability, either directly or indirectly, and are other than active market observable inputs that reflect unadjusted quoted prices for identical assets or liabilities

Letters of credit outstanding as of December 31, 2020 and 2019 totaled $ 1.6 million and $ 0.8 million, respectively.

There were no amounts drawn as of December 31, 2020.

Contractual repayments of the Term Loan component of Senior Credit Facility are due as follows:

Year-ended December 31, 2019

Principal Repayment

Year-ended December 31, 2020 Principal Repayment

(In thousands)

The outstanding balance of revolving credit component of the Senior Credit Facility is due on May 3, 2023.

2021 $ 33,750

The outstanding balance of the revolving credit component of the Senior Credit Facility is due on February 3, 2025.

Convertible Senior Notes

On February 4, 2020, the Company issued $ 575.0 million aggregate principal amount of its 0.5 % Convertible Senior Notes due 2025 (the "2025 Notes").

The 2025 Notes will mature on August 15, 2025 and bear interest at a rate of 0.5 % per annum payable semi-annually in arrears, unless earlier converted, repurchased or redeemed in accordance with the terms of the Notes.

The portion of debt proceeds that was classified as equity at the time of the offering was $ 104.5 million, and that amount is being amortized to interest expense using the effective interest method through August 2025.

The effective interest rate implicit in the liability component is 4.2 %.

In connection with this offering, the Company capitalized $ 13.2 million of financing fees.

At December 31, 2020, the carrying amount of the liability component was $ 485.9 million, the remaining unamortized discount was $ 89.1 million, and the principal amount outstanding was $ 575.0 million.

The fair value of the 2025 Notes at December 31, 2020 was $ 638.1 million.

The 2025 Notes are senior, unsecured obligations of the Company, and are convertible into cash and shares of its common stock based on initial conversion rate, subject to adjustment of 13.5739 shares per $1,000 principal amounts of the 2025 Notes (which represents an initial conversion price of $ 73.67 per share).

The 2025 Notes convert only in the following circumstances:

(1) if the closing price of the Company's common stock has been at least 130 % of the conversion price during the period;

(2) if the average trading price per $1000 principal amount of the 2025 Notes is less than or equal to 98 % of the average conversion value of the 2025 Notes during a period as defined in the indenture;

(3) at any time on or after February 20, 2023;

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

specified corporate transactions occur.

As of December 31, 2020, none of these conditions existed with respect to the 2025 Notes and as a result the 2025 Notes are classified as long term.

On December 9, 2020, the Company entered into the First Supplemental Indenture to the original agreement dated as of February 4, 2020 between the Company and Citibank, N.A., as trustee, governing the Company’s outstanding 2025 Notes.

The Company irrevocably elected (1) to eliminate the Company’s option to choose physical settlement on any conversion of the 2025 Notes that occurs on or after the date of the First Supplemental Indenture and (2) with respect to any Combination Settlement for a conversion of the 2025 Notes, the Specified Dollar Amount that will be settled in cash per $1,000 principal amount of the 2025 Notes shall be no lower than $ 1,000 .

Holders of the Notes will have the right to require the Company to repurchase for cash all or a portion of their Notes at 100 % of their principal amount, plus any accrued and unpaid interest, upon the occurrence of a fundamental change (as defined in the indenture relating to the Notes).

The Company will also be required to increase the conversion rate for holders who convert their Notes in connection with certain fundamental changes occurring prior to the maturity date or following delivery by the Company of a notice of redemption.

In connection with the issuance of the 2025 Notes, the Company entered into call transactions and warrant transactions, primarily with affiliates of the initial purchasers of the 2025 Notes (the “hedge participants”).

The cost of the call transactions was $ 104.2 million for the 2025 Notes.

The Company received $ 44.5 million of proceeds from the warrant transactions for the 2025 Notes.

The call transactions involved purchasing call options from the hedge participants, and the warrant transactions involved selling call options to the hedge participants with a higher strike price than the purchased call options.

The initial strike price of the call transactions was $ 73.67 , subject to anti-dilution adjustments substantially similar to those in the 2025 Notes.

The initial strike price of the warrant transactions was $ 113.34 for the 2025 Notes, subject to customary anti-dilution adjustments.

During the twelve months ended December 31, 2020, the Company recognized cash interest related to the contractual interest coupon of $ 2.6 million and amortization of the discount on the liability component of $ 15.4 million for a total interest charge of $ 18.0 million on the 2025 Notes.

Securitization Facility

3 unchanged sentences

The amount of outstanding borrowings on the Securitization Facility at any one time is limited to $ 150.0 million.

The Securitization Facility agreement is for an initial three -year term and may be extended.

The agreement governing the Securitization Facility contains certain covenants and termination events.

An occurrence of an event of default or a termination event under this Securitization Facility may give rise to the right of its counterparty to terminate this facility.

At December 31, 2019, the Company was in compliance with the covenants, and none of the termination events had occurred.

The Securitization Facility Agreement ("Securitization Agreement") is for an initial three-year term and may be extended.

The Securitization Agreement governing the Securitization Facility contains certain covenants and termination events.

An occurrence of an event of default or a termination event under this Securitization Agreement may give rise to the right of its counterparty to terminate this facility.

As of December 31, 2020, the Company was in compliance with the covenants and none of the termination events had occurred.

The Company had $ 112.5 million and $ 104.5 million of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 1.3 % and 2.8 % as of December 31, 2020 and 2019, respectively.

The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit facility and Term Loan component at December 31, 2019 were approximately $ 381.1 million and $ 889.9 million , respectively.

At December 31, 2020, the total amount outstanding under the Securitization Facility is classified as current on the consolidated balance sheet as the total amount is due on December 21, 2021.

The fair value of the outstanding borrowing of the Securitization facility at December 31, 2020 was approximately $ 112.3 million.

These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company.

These inputs are corroborated by observable market data for similar liabilities and therefore classified within Level 2 of the fair value hierarchy.

Level 2 inputs represent inputs that are observable for the asset or liability, either directly or indirectly and are other than active market observable inputs that reflect unadjusted quoted prices for identical assets or liabilities.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Letters of credit outstanding as of December 31, 2019 and 2018 totaled $ 0.8 million and $ 0.6 million, respectively.

There were no amounts drawn as of December 31, 2019 .

DERIVATIVE INSTRUMENTS

3 unchanged sentences

The Company uses interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates.

These interest rate swaps apply a fixed interest rate on a portion of our expected LIBOR-indexed floating-rate borrowings.

The Company held the following interest rate swaps as of December 31, 2019 (dollar amounts in thousands):

Current Notional Amount

Designation Date

Effective Date

Termination Date

Fixed Interest Rate

Estimated Fair Value

Assets (Liabilities)

3-month USD LIBOR

February 6, 2017

June 30, 2017

June 30, 2020

1-month USD LIBOR

February 6, 2017

June 30, 2017

June 30, 2020

1-month USD LIBOR

March 27, 2017

December 31, 2017

June 30, 2021

1-month USD LIBOR

December 13, 2017

January 1, 2018

December 31, 2022

1-month USD LIBOR

December 13, 2017

January 1, 2018

December 31, 2022

1-month USD LIBOR

December 13, 2017

June 30, 2024

1-month USD LIBOR

December 13, 2017

June 30, 2024

1-month USD LIBOR

December 13, 2017

January 1, 2018

December 31, 2024

1-month USD LIBOR

October 10, 2018

June 30, 2025

1-month USD LIBOR

October 10, 2018

June 30, 2025

1-month USD LIBOR

October 10, 2018

June 30, 2025

1-month USD LIBOR

December 18, 2018

December 30, 2022

December 31, 2027

1-month USD LIBOR

December 18, 2018

December 30, 2022

December 31, 2027

Total interest rate derivatives designated as cash flow hedge

The Company held the following interest rate swaps as of December 31, 2018 (dollar amounts in thousands):

Current Notional Amount

Designation Date

Effective Date

Termination Date

Fixed Interest Rate

Estimated Fair Value

Assets (Liabilities)

3-month USD LIBOR

June 22, 2016

December 31, 2016

June 30, 2019

3-month USD LIBOR

June 22, 2016

December 31, 2016

June 30, 2019

1-month USD LIBOR

July 12, 2016

December 31, 2016

June 30, 2019

3-month USD LIBOR

February 6, 2017

June 30, 2017

June 30, 2020

1-month USD LIBOR

February 6, 2017

June 30, 2017

June 30, 2020

1-month USD LIBOR

March 27, 2017

December 31, 2017

June 30, 2021

1-month USD LIBOR

December 13, 2017

January 1, 2018

December 31, 2022

1-month USD LIBOR

December 13, 2017

January 1, 2018

December 31, 2022

1-month USD LIBOR

December 13, 2017

June 30, 2024

1-month USD LIBOR

December 13, 2017

June 30, 2024

1-month USD LIBOR

December 13, 2017

January 1, 2018

December 31, 2024

1-month USD LIBOR

October 10, 2018

June 30, 2025

1-month USD LIBOR

October 10, 2018

June 30, 2025

1-month USD LIBOR

October 10, 2018

June 30, 2025

1-month USD LIBOR

December 18, 2018

December 30, 2022

December 31, 2027

1-month USD LIBOR

December 18, 2018

December 30, 2022

December 31, 2027

Total interest rate derivatives designated as cash flow hedges

These interest rate swaps apply a fixed interest rate on a portion of the Company's expected LIBOR-indexed floating-rate borrowings.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company held the following interest rate swaps as of December 31, 2020 and 2019 (dollar amounts in thousands):

December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2019

Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value

Asset (Liability)

3-month USD LIBOR $ — $ 50,000 February 6, 2017 June 30, 2017 June 30, 2020 1.834 % $ — $ ( 2 )

1-month USD LIBOR — 100,000 February 6, 2017 June 30, 2017 June 30, 2020 1.652 % — 12

1-month USD LIBOR 100,000 100,000 March 27, 2017 December 31, 2017 June 30, 2021 1.971 % ( 929 ) ( 581 )

1-month USD LIBOR 150,000 150,000 December 13, 2017 January 1, 2018 December 31, 2022 2.201 % ( 6,152 ) ( 2,880 )

1-month USD LIBOR 150,000 150,000 December 13, 2017 January 1, 2018 December 31, 2022 2.201 % ( 6,405 ) ( 2,880 )

1-month USD LIBOR 100,000 100,000 December 13, 2017 July 1, 2019 June 30, 2024 2.423 % ( 7,724 ) ( 3,517 )

1-month USD LIBOR 50,000 50,000 December 13, 2017 July 1, 2019 June 30, 2024 2.423 % ( 3,778 ) ( 1,778 )

1-month USD LIBOR 200,000 200,000 December 13, 2017 January 1, 2018 December 31, 2024 2.313 % ( 16,243 ) ( 6,595 )

1-month USD LIBOR 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.220 % ( 9,836 ) ( 5,750 )

1-month USD LIBOR 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.199 % ( 9,826 ) ( 5,747 )

1-month USD LIBOR 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.209 % ( 9,783 ) ( 5,807 )

1-month USD LIBOR 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.885 % ( 10,407 ) ( 4,930 )

1-month USD LIBOR 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.867 % ( 10,431 ) ( 4,691 )

1-month USD LIBOR 125,000 — December 15, 2020 July 31, 2025 December 31, 2027 1.415 % ( 382 ) —

1-month USD LIBOR 50,000 — December 15, 2020 July 1, 2025 December 31, 2027 1.404 % ( 162 ) —

1-month USD LIBOR 225,000 — December 15, 2020 July 31, 2025 December 31, 2027 1.415 % ( 846 ) —

1-month USD LIBOR 225,000 — December 15, 2020 July 31, 2025 December 31, 2027 1.415 % ( 679 ) —

1-month USD LIBOR 75,000 — December 15, 2020 July 1, 2025 December 31, 2027 1.404 % ( 187 ) —

Total interest rate derivatives designated as cash flow hedge $ 1,875,000 $ 1,325,000 $ ( 93,769 ) $ ( 45,145 )

The Company has designated these derivative instruments as cash flow hedges.

1 unchanged sentence

If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the remaining amount of any gain or loss on the related cash flow hedge recorded in AOCL to interest expense at that time.

During the period ended December 31, 2019, interest rate swaps with an aggregate notional amount of $ 150 million matured.

Foreign Currency Hedging

5 unchanged sentences

If the hedged forecasted transaction does not occur, or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time.

For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income (expense), net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

During the fourth quarter of 2020, the Company entered into foreign currency forward contracts, with a notional amount of $ 9.7 million to mitigate the foreign exchange risk related to certain intercompany loans denominated in Canadian Dollar ("CAD") and intercompany receivables denominated in Japanese Yen ("JPY").

The contracts are not designated as hedging instruments.

The Company recognized a $ 0.2 million loss from the change in fair value of the contracts, which was included in other income, net in the consolidated statement of operations.

The fair value of the foreign currency forward contracts was $ 0.2 million as of December 31, 2020.

The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in foreign currency.

The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences between forecasted and actual activities during periods of currency volatility.

The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

between forecasted and actual activities during periods of currency volatility.

In addition, changes in currency exchange rates related to any unhedged transactions may affect earnings and cash flows.

On November 28, 2017, the Company entered into a foreign currency forward contract, with a notional amount of $ 8.9 million to mitigate the foreign currency exchange risk related to a certain intercompany loan denominated in Swiss Francs ("CHF").

The contract is not designated as a hedging instrument.

The foreign currency forward contract was settled on September 28, 2018.

For the years ended December 31, 2018 and 2017, the Company recognized a $ 0.2 million loss and a $ 0.1 million gain, respectively, from the change in fair value of the contract, which was included in other income (expense), net in the consolidated statement of operations.

Cross-Currency Rate Swaps

On October 2, 2017, the Company entered into cross currency swap agreements to convert a notional amount of $ 300.0 million equivalent to 291.2 million of CHF denominated intercompany loans into U.S.

The CHF denominated intercompany loans were the result of the purchase of intellectual property by a subsidiary in Switzerland as part of the Codman Acquisition.

The objective of these cross-currency swaps is to reduce volatility of cash flows associated with changes in the foreign currency exchange rate.

On October 2, 2017, the Company entered into cross currency swap agreements to convert a notional amount of $ 300.0 million equivalent to 291.2 million of Swiss francs ("CHF") denominated intercompany loans into U.S.

The CHF denominated intercompany loans were the result of the purchase of intellectual property by a subsidiary in Switzerland as part of an acquisition.

On December 21, 2020, the Company entered into cross-currency swap agreements to convert a notional amount of $ 471.6 million equivalent to 420.1 million of a CHF denominated intercompany loan into U.S.

The CHF denominated intercompany loan was the result of an intra-entity transfer of certain intellectual property rights to a subsidiary in Switzerland completed during the fourth quarter of 2020.

The objective of these cross-currency swaps is to reduce volatility of earnings and cash flows associated with changes in the foreign currency exchange rate.

Under the terms of these contracts, which have been designated as cash flow hedges, the Company will make interest payments in Swiss Francs and receive interest in U.S.

1 unchanged sentence

dollars from the counterparties.

The Company held the following cross-currency rate swaps designated as cash flow hedges as of December 31, 2019 (dollar amounts in thousands):

Effective Date

Termination Date

Aggregate Notional Amount

Asset (Liability)

October 2, 2017

October 2, 2020

The Company held the following cross-currency rate swaps as of December 31, 2020 (dollar amounts in thousands):

December 31, 2020

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value (Liability)

Pay CHF October 2, 2017 October 2, 2021 1.85 % CHF 48,533 ( 4,335 )

Receive U.S.$ 4.46 % $ 50,000

October 2, 2017

October 2, 2021

Pay CHF October 2, 2017 October 2, 2022 1.95 % CHF 145,598 ( 11,262 )

Receive U.S.$ 4.52 % $ 150,000

October 2, 2017

October 2, 2022

Pay CHF December 21, 2020 December 20, 2025 3.00 % CHF 420,137 ( 7,843 )

Receive U.S.$ 3.98 % $ 471,640

During the year ended December 31, 2019, the Company settled cross-currency swaps designated as cash flow hedges of an intercompany loan with an aggregate notional amount of $ 66.7 million .

The original maturity dates were October 2, 2020,

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

however, as the intercompany loan settlement was consummated, the cross-currency swap was settled simultaneously.

As a result of the settlements, the Company recorded a loss of $ 0.4 million in other income, net in the consolidated statement of operations.

Total $ ( 23,441 )

On October 2, 2020 in accordance with the termination date, the Company settled a cross-currency swap designated as a cash flow hedge of an intercompany loan with an aggregate notional amount of $ 33.3 million.

As a result of the settlement, the Company recorded a loss of $ 0.3 million in other income, net in the consolidated statement of operations.

The Company held the following cross-currency rate swaps as of December 31, 2019 (dollar amounts in thousands):

Effective Date

Termination Date

Aggregate Notional Amount

Asset (Liability)

October 2, 2017

October 2, 2020

December 31, 2019

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value (Liability)

Pay CHF October 2, 2017 October 2, 2020 1.75 % CHF 32,355 $ ( 101 )

Receive U.S.$ 4.38 % $ 33,333

October 2, 2017

October 2, 2021

Pay CHF October 2, 2017 October 2, 2021 1.85 % CHF 48,533 ( 119 )

Receive U.S.$ 4.46 % $ 50,000

October 2, 2017

October 2, 2022

Pay CHF October 2, 2017 October 2, 2022 1.95 % CHF 145,598 ( 289 )

Receive U.S.$ 4.52 % $ 150,000

Total $ ( 509 )

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the year ended December 31, 2019, the Company settled cross-currency swaps designated as cash flow hedges of an intercompany loan with an aggregate notional amount of $ 66.7 million.

The original maturity dates were October 2, 2020 however, as the intercompany loan settlement was consummated, the cross-currency swap was settled simultaneously.

As a result of the settlements, the Company recorded a loss of $ 0.4 million in other income, net in the consolidated statement of operations.

The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL.

For the years ended December 31, 2019 and 2018, the Company recorded a loss of $ 4.0 million and gain $ 2.2 million , respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the gains or losses recognized on the intercompany loan.

For the years ended December 31, 2019 and 2018, the Company recorded gains of $ 9.3 million and $ 9.1 million , respectively, in AOCL related to change in fair value of the cross-currency swaps.

For the years ended December 31, 2019 and 2018, the Company recorded gains of $ 7.0 million and $ 7.9 million , respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

For the years ended December 31, 2020 and 2019, the Company recorded a loss of $ 21.7 million and loss of $ 4.0 million, respectively, in other income, net related to change in fair value related to the foreign currency rate tran slation to offset the gains or losses recognized on the intercompany loans.

For the years ended December 31, 2020 and 2019, the Company reco rded a loss of $ 17.1 million and a gain of $ 9.3 million, respectively, in AOCL related to change in fair value of the cross-currency swaps.

For the years ended December 31, 2020 and 2019, the Company recor ded gains of $ 5.8 million and $ 7.0 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated gain that is expected to be reclassified to other income, net from AOCL as of December 31, 2020 within the next twelve months is $ 3.3 million.

3 unchanged sentences

The Company is exposed to foreign exchange risk from its international operations through foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business.

On October 1, 2018, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.

The Company held the following cross-currency rate swaps designated as net investment hedges as of December 31, 2019 and December 31, 2018, respectively (dollar amounts in thousands):

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

On October 1, 2018 and December 16, 2020, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.

The Company held the following cross-currency rate swaps designated as net investment hedges as of December 31, 2020 (dollar amounts in thousands):

December 31, 2020

Effective Date

Termination Date

Aggregate Notional Amount

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value

Asset (Liability)

October 3, 2018

September 30, 2021

Receive U.S.$

October 3, 2018

September 30, 2023

Pay EUR October 3, 2018 September 30, 2021 — EUR 44,859 $ ( 1,884 )

Receive U.S.$ 3.01 % $ 52,000

October 3, 2018

September 30, 2025

Pay EUR October 3, 2018 September 30, 2023 — EUR 51,760 ( 450 )

Receive U.S.$ 2.57 % $ 60,000

October 3, 2018

September 30, 2025

Pay EUR October 3, 2018 September 30, 2025 — EUR 38,820 92

Receive U.S.$ 2.19 % $ 45,000

October 3, 2018

September 30, 2025

Pay CHF December 16, 2020 December 16, 2027 — CHF 222,300 ( 3,794 )

Receive USD 1.10 % $ 250,000

Total $ ( 6,036 )

During the year ended December 31, 2020, the Company settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $ 167.5 million and 128.3 million Pound Sterling respectively as a result of an intra-entity transfer of certain intellectual property rights to a subsidiary.

The original settlement date was September 30, 2025.

As a result of the settlement, the Company recorded a loss of $ 7.8 million in AOCL.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company held the following cross-currency rate swaps designated as net investment hedges as of December 31, 2019 (dollar amounts in thousands):

December 31, 2019

Effective Date

Termination Date

Aggregate Notional Amount

Asset (Liability)

October 3, 2018

September 30, 2021

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value Asset (Liability)

Pay EUR October 3, 2018 September 30, 2021 — EUR 44,859 $ 2,459

Receive U.S.$ 3.01 % $ 52,000

October 3, 2018

September 30, 2023

Pay EUR October 3, 2018 September 30, 2023 — EUR 51,760 3,087

Receive U.S.$ 2.57 % $ 60,000

October 3, 2018

September 30, 2025

Pay EUR October 3, 2018 September 30, 2025 — EUR 38,820 2,032

Receive U.S.$ 2.19 % $ 45,000

October 3, 2018

September 30, 2025

Pay GBP October 3, 2018 September 30, 2025 1.67 % GBP 128,284 ( 154 )

Receive U.S.$ 2.71 % $ 167,500

October 3, 2018

September 30, 2025

Pay CHF October 3, 2018 September 30, 2025 — CHF 165,172 1,221

Receive GBP 1.67 % GBP 128,284

Total $ 8,645

During the year ended December 31, 2019, the Company settled a cross-currency swap designated as a net-investment hedge of with an aggregate notional amount of $ 30.0 million.

2 unchanged sentences

The cross-currency swaps were carried on the consolidated balance sheet at fair value and changes in the fair values were recorded as unrealized gains or losses in AOCL.

For the year ended December 31, 2019 and 2018, the Company recorded a gain of $ 20.5 million and $ 1.7 million , respectively, in AOCL related to the change in fair value of the cross-currency swaps.

For the year ended December 31, 2019 and 2018, the Company recorded a gain of $ 9.6 million and $ 2.4 million , respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

For the year ended December 31, 2020 and 2019, the Company recorded a loss of $ 14.9 million and a gain of $ 20.5 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.

For the years ended December 31, 2020 and 2019, the Company recorded a gain of $ 7.6 million and $ 9.6 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated gain that is expected to be reclassified to interest income from AOCL as of December 31, 2020 within the next twelve months is $ 3.4 million.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Counterparty Credit Risk

6 unchanged sentences

The Company performs ongoing assessments of counterparty credit risk.

The following table summarizes the fair value and presentation in the consolidated balance sheet for derivatives designated as hedging instruments:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the fair value for derivatives designated as hedging instruments in the consolidated balance sheets as of December 31, 2020 and 2019:

Fair Value as of December 31,

17 unchanged sentences

Interest rate swap (2)

$ 22,033 $ 6,635

Cross-currency swap 4,335 101

Net Investment Hedges

Cross-currency swap 1,884 —

Other liabilities

1 unchanged sentence

Interest rate swap (2)

71,736 38,522

Cross-currency swap 26,728 5,440

8 unchanged sentences

Balance in AOCL

Year Amount of

Recognized in

Amount of Gain (Loss)

AOCL Amount of Gain (Loss)

Reclassified from

Balance in AOCL

Earnings Balance in AOCL

End of Year Location in

Statements of

2 unchanged sentences

Cash Flow Hedges

Interest rate swap

Interest expense

Cross-currency swap

Other income, net

Interest rate swap $ ( 45,145 ) $ ( 64,778 ) $ ( 16,154 ) $ ( 93,769 ) Interest expense

Cross-currency swap 177 ( 17,147 ) ( 15,897 ) ( 1,073 ) Other income, net

Net Investment Hedges

Cross-currency swap

Interest income

Cross-currency swap 10,229 ( 14,911 ) 7,609 ( 12,291 ) Interest income

$ ( 34,739 ) $ ( 96,836 ) $ ( 24,442 ) $ ( 107,133 )

Year Ended December 31, 2019

Cash Flow Hedges

Interest rate swap

Interest expense

Cross-currency swap

Other income, net

Interest rate swap $ 619 $ ( 43,493 ) $ 2,271 $ ( 45,145 ) Interest expense

Cross-currency swap ( 6,190 ) 9,334 2,967 177 Other income, net

Net Investment Hedges

Cross-currency swap

Interest income

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Cross-currency swap ( 632 ) 20,488 9,627 10,229 Interest income

$ ( 6,203 ) $ ( 13,671 ) $ 14,865 $ ( 34,739 )

GOODWILL AND OTHER INTANGIBLE ASSETS

10 unchanged sentences

The terminal value reflects the Company's assumptions related to long-term growth rates and profitability, which are based on several factors, including local and macroeconomic variables, market opportunities, and future growth plans.

The discount rate used to measure the present value of the projected future cash flows is set using a weighted-average cost of capital method that considers market and industry data as well as the Company's specific risk factors that are likely to be considered by a market participant.

• The discount rate used to measure the present value of the projected future cash flows is set using a weighted-average cost of capital method that considers market and industry data as well as the Company's specific risk factors that are

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

likely to be considered by a market participant.

The weighted-average cost of capital is the Company's estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.

2 unchanged sentences

Changes in the carrying amount of goodwill in 2020 and 2019 were as follows:

Codman Specialty Surgical

Orthopedics and Tissue Technologies

Codman Specialty Surgical Orthopedics and Tissue Technologies Total

(In thousands)

Goodwill at January 1, 2019 $ 625,760 $ 300,715 $ 926,475

Codman acquisition measurement period adjustments

Arkis Acquisition

27,600 — 27,600

Foreign currency translation 140 65 205

Goodwill at December 31, 2019 $ 653,500 $ 300,780 $ 954,280

Arkis Acquisition

Foreign currency translation 18,475 7,158 25,633

Transfer to assets held for sale (See Note 3.

Assets Held for Sale )

$ — $ ( 47,546 ) $ ( 47,546 )

Goodwill at December 31, 2020 $ 671,975 $ 260,392 $ 932,367

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Other Intangible Assets

1 unchanged sentence

December 31, 2020

Life Cost Accumulated Amortization Net

(Dollars in Thousands)

Completed technology

Customer relationships

Trademarks/brand names

Codman trade name

Supplier relationships

Completed technology 19 years

$ 896,478 $ ( 248,088 ) $ 648,390

Customer relationships 12 years

213,270 ( 132,838 ) 80,432

Trademarks/brand names 28 years

104,209 ( 31,767 ) 72,442

Codman trade name Indefinite 170,226 — 170,226

Supplier relationships 27 years

30,211 ( 15,203 ) 15,008

All other (1)

9,995 ( 7,057 ) 2,938

$ 1,424,389 $ ( 434,953 ) $ 989,436

December 31, 2019

Life Cost Accumulated Amortization Net

(Dollars in Thousands)

Completed technology

Customer relationships

Trademarks/brand names

Codman trade name

Supplier relationships

Completed technology 19 years

$ 880,623 $ ( 213,702 ) $ 666,921

Customer relationships 12 years

222,575 ( 119,393 ) 103,182

Trademarks/brand names 28 years

103,873 ( 28,514 ) 75,359

Codman trade name Indefinite

163,126 — 163,126

Supplier relationships 27 years

34,721 ( 17,947 ) 16,774

All other (1)

10,869 ( 4,640 ) 6,229

$ 1,415,787 $ ( 384,196 ) $ 1,031,591

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(1) At December 31, 2020 and 2019, all other included IPR&D of $ 1.0 million, which was indefinite-lived.

At December 31, 2020, this IPR&D asset was presented separately as "assets held for sale" in conjunction with the sale of the Extremity Orthopedics business which is expected to be sold within twelve months.

See Note 3, Assets and Liabilities Held for Sale , for details.

At December 31, 2020, $ 13.3 million of Intangible assets, net were presented separately as "assets held for sale" in conjunction with the sale of the Extremity Orthopedics business.

See Note 3, Assets and Liabilities Held for Sale .

The Company tests intangible assets with indefinite lives for impairment annually in the third quarter in accordance with ASC Topic 350.

The Company elected to bypass the qualitative evaluation for its Codman tradename intangible asset and perform a quantitative test during the third quarter of 2019.

In performing this test, the Company utilized a range of projected sales growth rates, a royalty rate of 5.0 % , a range of tax rates between 17.4 - 20.7 % , and a discount rate of 12.5 % .

The Company elected to bypass the qualitative evaluation for its Codman tradename intangible asset and perform quantitative test during the third quarter of 2020.

In performing the test, the Company utilized a range of projected sales growth rates, a royalty rate of 5.0 %, a tax rate of 24.0 % and a discount rate of 11.5 %.

The assumptions used in evaluating the Codman tradename for impairment are subject to change and are tracked against historical results by management.

2 unchanged sentences

The impairment testing involves comparing the carrying amount of the asset or asset group to the forecasted undiscounted future cash flows.

In the event the carrying value of the asset exceeds the undiscounted future cash flows, the carrying value is considered not recoverable and an impairment exists.

In the event the carrying value of the asset exceeds the undiscounted future cash flows, the carrying value is considered not recoverable and impairment exists.

An impairment loss is measured as the excess of the asset's carrying value over its fair value, calculated using discounted future cash flows.

4 unchanged sentences

(collectively "TEI") due to revised future projections based on the contract termination.

During the third quarter of 2018, the Company recorded an impairment charge of $ 4.9 million in cost of goods sold related to completed technology assets acquired from Koby Ventures II, L.P dba Metasurg ("Metasurg Technology") due to recent contract negotiations and revised future projections.

Metasurg Technology is included in the Orthopedic and Tissue Technology segment.

Of the total impairment charge of $ 4.9 million , $ 2.5 million was related to an out-of-period adjustment included in the twelve months ended December 31, 2018 .

The out-of-period adjustment is attributed to the timing of performing the impairment test based on the contract termination associated with the intangible asset.

The Company determined that the adjustment was not

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

material to the consolidated financial statements for any previously reported annual or interim period and the adjustment to correct the misstatements is not material to the period ended December 31, 2018 .

During the third quarter of 2017, the Company recorded an impairment charge of $ 3.3 million in cost of goods sold related to completed technology assets acquired from Tarsus Medical, Inc.

("Tarsus Technology"), since the underlying product will no longer be sold.

Tarsus Technology was included in the Orthopedic and Tissue Technology segment.

Amortization expense (including amounts reported in cost of product revenues, but excluding any possible future amortization associated with acquired IPR&D) for the years ended December 31, 2019 , 2018 and 2017 was $ 72.8 million, $ 71.6 million and $ 52.8 million, respectively.

Amortization expense (including amounts reported in cost of product revenues) for the years ended December 31, 2020, 2019 and 2018 was $ 74.5 million, $ 72.8 million and $ 71.6 million, respectively.

Annual amortization expense is expected to approximate $ 63.8 million in 2021, $ 61.4 million in 2022, $ 60.7 million in 2023, $ 60.2 million in 2024, $ 60.2 million in 2025 and $ 512.3 million thereafter.

1 unchanged sentence

TREASURY STOCK

There were 2.9 million shares of treasury stock outstanding as of December 31, 2019 and 2018 , with a cost of $ 119.9 million and $ 120.6 million, respectively, at a weighted average cost of $ 41.87 per share.

As of December 31, 2020 and 2019, there were 4.9 million and 2.9 million shares of treasury stock outstanding with a cost of $ 235.1 million and $ 119.9 million, at a weighted average cost per share of $ 47.86 and $ 41.87 , respectively.

On December 7, 2020, the Board of Directors authorized the Company to repurchase up to $ 225 million of the Company’s common stock.

1 unchanged sentence

The repurchase authorization expires in December 2022.

Purchases may be affected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing.

This stock repurchase authorization replaces the previous $ 150.0 million stock repurchase authorization, approved by the Board in 2016.

There were no treasury stock repurchases during the years ended December 31, 2019 and 2018 .

This stock repurchase authorization replaces the previous $ 225 million stock repurchase authorization, of which $ 125 million remained authorized at the time of its replacement, and which was otherwise set to expire on December 31, 2020.

During the twelve months ended December 31, 2020, the Company repurchased 2.1 million shares of Integra’s common stock as part of the previous share repurchase authorization.

The Company utilized $ 100.0 million of net proceeds from the offering of the Convertible Senior Notes to execute the share repurchase transactions.

This included $ 7.6 million from certain purchasers of the convertible notes in conjunction with the closing of the offering.

On February 5, 2020, the Company entered into a $ 92.4 million accelerated share repurchase ("ASR") to complete the remaining $ 100.0 million of share repurchase.

The Company received 1.3 million shares at inception of the ASR, which represented approximately 80 % of the expected total shares.

Upon settlement of the ASR in June 2020, the Company received an additional 0.6 million shares determined using the volume-weighted average price of the Company's common stock during the term of the transaction.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

STOCK-BASED COMPENSATION

1 unchanged sentence

Years Ended December 31,

2020 2019 2018

(In thousands)

Selling, general and administrative

Research and development

Cost of goods sold 344 317 449

Research and development 1,471 1,785 1,609

Selling, general and administrative $ 17,776 $ 19,153 $ 18,721

Total stock-based compensation expense 19,591 21,255 20,779

8 unchanged sentences

During the years ended December 31, 2020, 2019 and 2018, the Company issued 18,284 shares, 12,531 shares and 16,721 shares under the ESPP for $ 1.1 million, $ 0.7 million and $ 0.7 million, respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

EQUITY AWARD PLANS

15 unchanged sentences

The Company accounts for forfeitures as they occur.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following weighted-average assumptions were used in the calculation of fair value:

Years Ended December 31,

2020 2019 2018

Dividend yield 0 % 0 % 0 %

1 unchanged sentence

Risk free interest rate 0.89 % 2.51 % 2.79 %

Expected life of option from grant date

Expected life of option from grant date 7 years 7 years 8 years

Weighted average grant date fair value of options granted

$ 13.03 $ 18.74 $ 21.78

The following table summarizes the Company’s stock option activity.

Weighted Average Exercise Price

Weighted Average Contractual Term in Years

Aggregate Intrinsic Value

Stock Options

(In thousands)

Weighted Average Exercise Price Weighted Average Contractual Term in Years Aggregate Intrinsic Value

Stock Options (In thousands) (In thousands)

Outstanding at January 1, 2020 1,284 $ 34.83 — —

Granted 349 43.39 — —

Exercised ( 236 ) 19.20 — —

Forfeited or Expired ( 51 ) 49.12 — —

Outstanding at December 31, 2020 1,346 $ 39.25 4.41 $ 34,560

Vested or expected to vest at December 31, 2019

Exercisable at December 31, 2020 881,261 $ 35.19 3.20 $ 26,197

1 unchanged sentence

The intrinsic value of options exercised for the years ended December 31, 2020, 2019 and 2018 were $ 8.7 million, $ 14.6 million and $ 16.9 million, respectively.

The weighted average grant date fair value of options granted during the years ended December 31, 2019 , 2018 and 2017 was $ 18.74 , $ 21.78 and $ 16.95 , respectively.

Cash received from option exercises and employee stock purchase plan was $ 6.9 million , $ 9.4 million and $ 9.8 million , for the years

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

ended December 31, 2019 , 2018 and 2017 , respectively.

Cash received from option exercises and employee stock purchase plan was $ 5.2 million, $ 6.9 million and $ 9.4 million, for the years ended December 31, 2020, 2019 and 2018, respectively.

The realized tax benefit from options exercised were $ 1.7 million, $ 3.0 million and $ 3.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

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The following table summarizes the Company’s awards of restricted stock, performance stock and contract stock for the year ended December 31, 2020.

Restricted Stock Awards

Performance Stock and Contract Stock Awards

Weighted Average Grant Date Fair Value Per Share

(In thousands)

Restricted Stock Awards Performance Stock and Contract Stock Awards

Shares Weighted Average Grant Date Fair Value Per Share Shares Weighted Average Grant Date Fair Value Per Share

(In thousands) (In thousands)

Unvested, January 1, 2020 460 $ 54.31 192 55.38

Granted 286 44.78 234 43.63

Adjustments for performance achievement related to award target

Cancellations ( 42 ) 50.11 ( 31 ) —

Performance stock awards vested in 2018 and released in 2019

Released ( 232 ) 52.07 ( 157 ) 43.48

Vested but not released — — ( 55 ) 51.84

Unvested, December 31, 2020 472 $ 50.02 197 47.66

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company recognized $ 16.4 million, $ 18.1 million and $ 18.1 million in expense related to such awards during the years ended December 31, 2020, 2019 and 2018, respectively.

6 unchanged sentences

These costs are expected to be recognized over a weighted-average period of approximately two years .

At December 31, 2019 , there are approximately 0.5 million vested Restricted Units and 0.1 million vested performance share units held by various employees for which the related shares have not yet been issued.

As of December 31, 2020, there were approximately 0.5 million vested Restricted Units and 0.1 million vested performance share units held by various employees for which the related shares have not yet been issued.

The final determination of the number of shares to be issued is made by the Company's Compensation Committee of the Board of Directors which is is contingent upon achieving certain revenue and organic revenue growth performance metric.

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DEFINED BENEFIT PLANS

The Company has various defined benefit plans which covers certain employees in Austria, France, Japan, Germany and Switzerland.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The Company has various defined benefit plans which covers certain employees in France, Japan, Germany and Switzerland.

Net periodic benefit costs for the Company’s defined benefit pension plans for the years ended December 31, 2020 and 2019 included the following (amounts in thousands):

Year ended December 31,

Service cost $ 4,029 $ 3,815

Interest cost 219 517

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Recognized actuarial losses 787 65

Settlements ( 102 ) 602

Net period benefit cost $ 4,007 $ 3,693

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Rate of compensation increase 2.14 % 2.25 %

Interest crediting rate for cash balance plans 1.00 % 0.93 %

The Company’s discount rates are determined by considering current yield curves representing high quality, long-term fixed income instruments.

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Using this reference information, the long-term return expectations for each asset category are developed according to the allocation among those investment categories.

The assessment is determined using projections from external financial sources, long-term historical averages, actual returns by asset class and the various asset class allocations by market.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The assessment is determined using projections from external financial sources, long-term historical averages, actual returns by asset class and the various asset class allocations by market.

The following sets forth the change in projected benefit obligations and the change in plan assets for the years ended December 31, 2020 and 2019 and a reconciliation of the funded status at December 31, 2020 and 2019, respectively (amounts in thousands):

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Interest cost 219 517

Actuarial loss

Service cost 4,029 3,815

Actuarial (gain) loss ( 3,347 ) 12,188

Plan amendments — ( 3,133 )

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Premiums paid ( 388 ) ( 395 )

Plans transferred in

Effect of foreign currency exchange rates 2,997 406

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The unfunded benefit obligations are included in other liabilities in the consolidated balance sheets at December 31, 2020 and 2019, respectively.

During the periods ended December 31, 2019 and 2018, the Company had net losses of $ 9.0 million and $ 0.6 million , respectively, recognized within accumulated other comprehensive loss that has not been recognized as a component of net periodic benefit cost.

The loss recognized during the period ended December 31, 2019, is primarily attributed to a change in the discount rate used to estimate the projected benefit obligation for defined benefit plans which cover certain employees in Switzerland.

During the periods ended December 31, 2020 and 2019, the Company had a net gain of $ 4.6 million and a net loss of $ 9.0 million, respectively, recognized within accumulated other comprehensive loss that has not been recognized as a component of net periodic benefit cost.

The gain recognized during the period ended December 31, 2020, is primarily attributed to a change in the discount rate used to estimate the projected benefit obligation for defined benefit plans which cover certain employees in Switzerland.

The combined accumulated benefit obligations for the defined benefit plans was $ 61.5 million and $ 61.1 million as of December 31, 2020 and 2019, respectively.

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The investment strategy of the Company's defined benefit plans is both to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk profile.

The investment strategy for the Company’s defined benefit plans is both to meet the liabilities of the plans as they fall due and to maximize the return on invested assets within appropriate risk tolerances.

The benefit plans in Austria, France and Germany had no assets at December 31, 2019 .

The benefit plans in France and Germany had no assets at December 31, 2020.

As of December 31, 2020, no plan assets are expected to be returned to the Company in the next twelve months.

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Total contributions by the Company to the plans were $ 6.7 million, $ 8.6 million and $ 8.1 million for the years ended December 31, 2020, 2019 and 2018, respectively.

DEFERRED COMPENSATION PLAN

During the first quarter of 2020, employees participating in the Company's deferred compensation plan began to defer their compensation.

This deferred compensation is invested in funds offered under this plan and is valued based on Level 1 measurements in the fair value hierarchy.

Assets of the Company's deferred compensation plan are included in Other current assets and recorded at fair value based on their quoted market prices.

The fair value of these assets at December 31, 2020 was $ 2.0 million.

Offsetting liabilities relating to the deferred compensation plan are included in Other liabilities.

LEASES AND RELATED PARTY LEASES

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As most of the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.

Total operating lease expense for the year ended December 31, 2019 was $ 19.6 million , which includes $ 0.3 million , in related party operating lease expense.

Supplemental balance sheet information related to operating leases at December 31, 2019 were as follows:

Total operating lease expense for the year ended December 31, 2020 and December 31, 2019, was $ 19.7 million and $ 19.6 million, respectively, which includes $ 0.3 million, in related party operating lease expense.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Supplemental balance sheet information related to operating leases at December 31, 2020 were as follows:

December 31, 2020

December 31, 2019

(In thousands, except lease term and discount rate)

ROU assets $ 83,635 $ 94,530

Current lease liabilities 12,818 12,253

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Weighted average remaining lease term (in years):

Leased facilities

Leased vehicles

Leased facilities 11.6 years 12.8 years

Leased vehicles 2.3 years 2.6 years

Weighted average discount rate:

3 unchanged sentences

December 31, 2020

December 31, 2019

(In thousands)

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Future minimum lease payments under operating leases at December 31, 2020 were as follows:

Related Parties

Third Parties

Related Parties Third Parties Total

(In thousands)

2021 296 13,458 13,754

2022 296 13,992 14,288

2023 296 11,054 11,350

2024 296 10,254 10,550

2025 296 9,645 9,941

Thereafter 1,130 77,784 78,914

Total minimum lease payments $ 2,610 $ 136,187 $ 138,797

4 unchanged sentences

There were no future minimum lease payments under finance leases at December 31, 2020.

During 2018, the Company entered into an operating lease with a term of 18 years for a new corporate headquarters in Princeton, NJ.

The lease commenced during the second quarter of 2019 and the Company recorded a ROU asset and lease liability of $ 35.6 million.

Future minimum lease payments under operating leases at December 31, 2018 were as follows:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Related Parties

Third Parties

(In thousands)

Total minimum lease payments

Total operating lease expense for the year ended December 31, 2018 was $ 16.3 million and included 0.3 million, in related party lease expense.

There were no future minimum lease payments under capital leases at December 31, 2018.

Related Party Leases

The Company also leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a corporation whose shareholders are trusts, whose beneficiaries include family members of the Company’s principal owner and former Chairman and director.

The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a corporation whose stockholders are trusts, whose beneficiaries include family members of the Company’s former director.

The term of the current lease agreement is through October 31, 2029 at an annual rate of approximately $ 0.3 million per year.

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Years Ended December 31,

2020 2019 2018

(In thousands)

1 unchanged sentence

Foreign operations 78,438 98,463 78,621

Total $ 93,520 $ 60,104 $ 57,403

The 2017 U.S.

Tax Act was signed into law on December 22, 2017.

The 2017 Tax Act made significant changes to the previous tax law.

Included among the numerous changes were a reduction of the federal statutory rate from 35% to 21%, limitations on the deductibility of interest expense and executive compensation, and the elimination of certain tax deductions.

Additionally, the 2017 Tax Act imposed a one–time repatriation tax on accumulated foreign subsidiaries' untaxed foreign earnings (the "Toll Tax").

The Toll Tax, a one–time tax on deemed repatriated foreign earnings which were not previously taxed, is paid over an eight–year period beginning in 2018.

The Company's total Toll Tax liability, as finalized in 2018, was $ 4.5 million .

The 2017 Tax Act also implemented a territorial tax system and included base erosion provisions on non-U.S.

earnings, which subjects certain foreign earnings to additional taxation as global intangible low-taxed income (“GILTI”).

These provisions were effective on January 1, 2018.

Upon further analysis of the 2017 Tax Act during 2018, the Company elected to account for GILTI as a period cost in the year the tax is incurred.

Deferred tax assets and liabilities are measured at the enacted tax rate expected to apply when they are realized or settled.

During 2017, the Company recognized a provisional benefit of $ 43.4 million from the remeasurement of the Company's net deferred tax liabilities at the reduced rate of 21%.

The Company finalized the remeasurement of its net deferred tax liabilities, as a result of the reduced rate, as of December 31, 2018.

The Company finalized its calculations and completed its accounting for the income tax effect of the 2017 Tax Act in December of 2018.

A reconciliation of the U.S.

Federal statutory rate to the Company’s effective tax rate is as follows:

The 2017 Tax Act made significant changes to the previous tax law, which included the reduction of the federal statutory rate from 35% to 21% and the recognition of a one-time repatriation tax on accumulated untaxed earnings of foreign subsidiaries.

As of December 31, 2018, the Company finalized its calculations and completed its accounting for the income tax effect of the 2017 Tax Act, for which the finalization adjustments recognized during 2018 were not significant.

A number of these provisions continue to have an impact on our effective tax rate, including limitations on the deductibility of executive compensation and the elimination of certain tax deductions.

Additionally, the implementation of a territorial tax system, which subjects certain foreign earnings to additional taxation as global intangible low-taxed income, continues to adversely affect income tax expense.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

A reconciliation of the U.S.

Federal statutory rate to the Company’s effective tax rate is as follows:

Years Ended December 31,

2020 2019 2018

Federal statutory rate 21.0 % 21.0 % 21.0 %

14 unchanged sentences

Carryback of Federal net operating loss ("NOL") — % 0.1 % ( 3.7 ) %

Other 0.5 % 0.4 % — %

Swiss tax holiday — % ( 15.7 ) % — %

In-process research and development

Reduction of book gain on sale of assets

Tax reform — Toll Tax

Tax reform — remeasurement of deferred tax assets and liabilities

IPR&D expense

— % 22.7 % — %

Foreign-Derived Intangible Income ( 0.8 ) % — % — %

Transfer of Intra-entity of certain intellectual property - Rate Differential

on FMV Step-Up ( 63.3 ) % — % — %

Assets held for sale - Outside Basis Difference 2.8 % — % — %

Effective tax rate ( 43.2 ) % 16.5 % ( 5.9 ) %

Our effective tax rate was 16.5 % for the year ended December 31, 2019, compared to ( 5.9 )% for the year ended December 31, 2018.

The 2019 annual effective tax rate increased over 2018 due to the acquisition of Rebound, resulting in $ 64.9 million of non-deductible in–process research and development expense, which had a $ 13.6 million tax effect on the U.S.

federal rate.

This increase in the annual rate was offset by a tax benefit of $ 9.4 million ( $ 0.11 per share) related to a federal tax holiday in Switzerland, which was finalized during 2019.

Additionally, 2018 had $ 1.1 million of additional benefit pertaining to excess stock–based compensation deductions and $ 2.1 million of benefit from a federal net operating loss carryback, which does not repeat in 2019.

Our effective tax rate was ( 43.2 )% and 16.5 % of income before income taxes for the years ended December 31, 2020 and December 31, 2019, respectively.

In 2020, the Company’s lower worldwide effective tax rate, as compared to 2019, is primarily driven by an $ 59.2 million income tax benefit on an intra-entity transfer of certain intellectual property, substantially completed during the fourth quarter in 2020.

Excluding this transaction, the effective worldwide tax rate for 2020 is 20.2 %.

In December 2020, the Company completed an intra-entity transfer of certain intellectual property rights to one of its subsidiaries in Switzerland.

While the transfer did not result in a taxable gain, the Company’s Swiss subsidiary received a step-up in tax basis based on the fair value of the transferred intellectual property rights.

The Company determined the fair value using a discounted cash flow model based on expectations of revenue growth rates, royalty rates, discount rates, and useful lives of the intellectual property.

The Co mpany recorded a $ 59.2 million deferred tax benefit in Switzerland related to the amortizable tax basis in the transferred intellectual property.

During 2020, the Company’s foreign operations generated a $ 48.2 million decrease in income tax expense when compared to the same period in 2019, because of the intra-entity transfer of certain intellectual property, geographic and business mix of taxable earnings and losses, among other factors.

The 2020 foreign effective tax rate is ( 57.1 )%, compared to 3.5 % in 2019.

The Company’s foreign tax rate is primarily based upon statutory rates and is also impacted by the intra-entity transfer of certain intellectual property as described above.

During 2019, the Company's foreign operations generated a $ 5.7 million decrease in income tax expense when compared with 2018, because of geographic and business mix of taxable earnings and losses, among other factors.

4 unchanged sentences

The Company also received a reduction in its rate for the cantonal and communal level taxes during the third quarter of 2019, pursuant to tax reform in Switzerland.

During 2018 , the Company's foreign operations generated a $ 3.1 million increase in income tax expense when compared with 2017, because of the geographic and business mix of taxable earnings and losses, among other factors.

The 2018 foreign effective tax rate is 11.6 % , a decrease of approximately 2.0 % over the rate in 2017 .

The Company's foreign tax rate is primarily based upon statutory rates.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

2 unchanged sentences

Years Ended December 31,

2020 2019 2018

(In thousands)

Federal $ 6,184 $ 14,597 $ ( 3,880 )

State 5,029 3,447 1,609

Foreign 12,553 10,905 7,057

Total current $ 23,766 $ 28,949 $ 4,786

Federal ( 5,079 ) ( 10,889 ) ( 7,202 )

State ( 1,760 ) ( 666 ) ( 3,048 )

Foreign ( 57,299 ) ( 7,491 ) 2,066

Total deferred $ ( 64,138 ) $ ( 19,046 ) $ ( 8,184 )

4 unchanged sentences

Inventory related items 47,034 39,548

Tax credits 18,319 19,134

Accrued vacation 3,403 3,206

6 unchanged sentences

Charitable contributions carryforward 203 235

Leases and Other 23,205 12,496

Total deferred tax assets 173,256 148,518

2 unchanged sentences

Intangible and fixed assets ( 90,274 ) ( 150,879 )

Leases and Other ( 15,585 ) ( 11,704 )

Total deferred tax liabilities $ ( 105,859 ) $ ( 162,583 )

Total net deferred tax liabilities

Total net deferred tax assets (liabilities) $ 57,500 $ ( 23,930 )

Prior period amounts were reclassified as it relates to Leases and Other between deferred tax asset and liabilities within this table to conform to the current period presentation.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The deferred tax assets and liabilities are measured based on the enacted tax rates that apply in years in which the temporary differences are expected to be realized or incurred.

The Company remeasured its deferred tax assets and liabilities as a result of the 2017 Tax Act, using a provisional estimate under SAB No.

118 during 2017.

The primary impact of the re-measurement was a decrease in the net deferred tax liability for the reduction of the U.S.

statutory income tax rate from 35.0% to 21.0%.

There were no material changes to the provisional amounts when the amounts were finalized in December of 2018.

At December 31, 2020, the Company had net operating loss carryforwards of $ 90.2 million for federal income tax purposes, $ 36.7 million for foreign income tax purposes and $ 41.6 million for state income tax purposes to offset future taxable income.

The majority of the federal net operating loss carryforwards expire through 2037, while $ 11.8 million have an indefinite carry forward period.

For foreign net operating loss carryforwards, $ 1.3 million expire through 2024, $ 0.9 million expire through 2025, and the remaining $ 35.3 million have an indefinite carry forward period.

For foreign net operating loss carryforwards, $ 0.3 million expire through 2025, and the remaining $ 36.4 million have an indefinite carry forward period.

The state net operating loss carryforwards expire through 2036.

A valuation allowance of $ 9.9 million , $ 7.0 million and $ 8.0 million is recorded against the Company’s gross deferred tax assets of $ 141.9 million , $ 105.0 million , and $ 96.5 million recorded at December 31, 2019 , 2018 and 2017 , respectively.

The valuation allowance relates to deferred tax assets for certain items that will be deductible for income tax purposes under very limited circumstances and for which the Company believes it will not satisfy the more likely than not threshold for realization of the associated tax benefit.

In the event that the Company determines that it would be able to realize more or less than the recorded amount of net deferred tax assets, an adjustment to the deferred tax asset valuation allowance would be recorded in the period such a determination is made.

The Company’s valuation allowance increased by $ 2.9 million , decreased by $ 1.0 million and increased by $ 4.4 million at December 31, 2019 , 2018 and 2017 , respectively.

The 2019 overall increase in the valuation allowance primarily resulted from certain assets from the Rebound and Arkis acquisitions.

The Company’s valuation allowance increased by less than $ 0.1 million, increased by $ 2.9 million and decreased by $ 1.0 million at December 31, 2020, 2019 and 2018, respectively.

The 2020 valuation allowance primarily remained unchanged from the prior period.The 2019 overall increase in the valuation allowance primarily resulted from certain assets from the Rebound and Arkis acquisitions.

As of December 31, 2020, the Company has not provided deferred income taxes on unrepatriated earnings from foreign subsidiaries as they are deemed to be indefinitely reinvested.

3 unchanged sentences

Years Ended December 31,

2020 2019 2018

(In thousands)

4 unchanged sentences

Gross decreases:

Prior years' tax positions

Statute of limitations lapses — — ( 21 )

Other — ( 53 ) —

Balance, end of year $ 702 $ 676 $ 676

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Years Ended December 31,

2020 2019 2018

(In thousands, except per share amounts)

Basic net income per share:

Net income $ 133,892 $ 50,201 $ 60,801

Weighted average common shares outstanding 84,650 85,637 82,857

1 unchanged sentence

Diluted net income per share:

Net income $ 133,892 $ 50,201 $ 60,801

Weighted average common shares outstanding — Basic 84,650 85,637 82,857

3 unchanged sentences

Diluted net income per common share $ 1.57 $ 0.58 $ 0.72

Common stock of approximately 0.4 million shares at December 31, 2019 , and 2018 that are issuable through exercise of dilutive securities were not included in the computation of diluted net income per share because their effect would have been anti-dilutive.

Common stock of approximately 0.3 million and 0.4 million shares at December 31, 2020, and 2019 that are issuable through exercise of dilutive securities, respectively, and were not included in the computation of diluted net income per share because their effect would have been anti-dilutive.

Performance Shares and Restricted Units that entitle the holders to approximately 0.5 million shares of common stock are included in the basic and diluted weighted average shares outstanding calculation from their date of issuance because no further consideration is due related to the issuance of the underlying common shares.

1 unchanged sentence

Changes in accumulated other comprehensive loss by component between December 31, 2020 and 2019 are presented in the table below, net of tax:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Gains and Losses on Derivatives

Defined Benefit Pension Items

Foreign Currency Items

Gains and Losses on Derivatives Defined Benefit Pension Items Foreign Currency Items Total

(In thousands)

Balance at December 31, 2019

Other comprehensive loss, net

$ ( 26,625 ) $ ( 9,709 ) $ ( 40,068 ) $ ( 76,402 )

Other comprehensive gain (loss) ( 74,394 ) 4,604 53,363 ( 16,427 )

Amounts reclassified from accumulated other comprehensive income, net

Net current-period other comprehensive loss

( 18,770 ) — — ( 18,770 )

Net current-period other comprehensive gain (loss) ( 55,624 ) 4,604 53,363 2,343

Balance at December 31, 2020

For the year ended December 31, 2019 , the Company reclassified gains of $ 2.3 million , $ 7.4 million and $ 1.7 million from AOCL to other income, net, interest income, and interest expense, respectively.

$ ( 82,249 ) $ ( 5,105 ) $ 13,295 $ ( 74,059 )

For the year ended December 31, 2020, the Company reclassified a loss of $ 12.2 million and $ 6.6 million from accumulated other comprehensive loss to other income, net and interest income, respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

COMMITMENTS AND CONTINGENCIES

9 unchanged sentences

The Company determined the fair value of contingent consideration during the twelve-month period ended December 31, 2020 and 2019 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period.

A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the year ended December 31, 2019 and 2018 is as follows (in thousands):

Year Ended December 31, 2019

Contingent Consideration Liability Related to Acquisition of Arkis (See Note 4)

Contingent Consideration Liability Related to Acquisition of Derma Sciences (See Note 4)

Location in Financial Statements

A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the years ended December 31, 2020 and 2019 is as follows (in thousands):

Year Ended December 31, 2020 Contingent Consideration Liability Related to Acquisition of Arkis (See Note 5) Contingent Consideration Liability Related to Acquisition of Derma Sciences Location in Financial Statements

Short-term Long-term Long-term

Balance as of January 1, 2020 $ — $ 14,210 $ 230

Transfers from long-term to current portion 3,415 ( 3,415 ) —

Loss from change in fair value of contingent consideration liabilities — 951 — Research and development

Balance as of December 31, 2020 $ 3,415 $ 11,746 $ 230

Year Ended December 31, 2019 Contingent Consideration Related to Acquisition of Arkis (See Note 5) Contingent Consideration Liability Related to Acquisition of Derma Sciences Location in Financial Statements

Long-term Long-term

Balance as of January 1, 2019 $ — $ 230

Additions from acquisition of Arkis 13,100 —

Loss from change in fair value of contingent consideration liabilities

Research and development

Loss from change in fair value of contingent consideration liabilities 1,110 — Research and development

Balance as of December 31, 2019 $ 14,210 $ 230

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Year Ended December, 2018

Contingent Consideration Liabilities Related to Acquisition of Derma Sciences (See Note 4)

Contingent Consideration Liability Related to Acquisition of Confluent Surgical, Inc.

Location in Financial Statements

Balance as of January 1, 2018

Transfers from long-term to current portion

Loss from change in fair value of contingent consideration liabilities

Selling, general and administrative

Balance as of December 31, 2018

Confluent Surgical

On January 15, 2014, the Company acquired all outstanding shares of Confluent Surgical, Inc., ("Confluent Surgical").

The purchase price included contingent consideration.

The potential maximum undiscounted contingent consideration of $ 30.0 million consisted of $ 25.0 million upon obtaining certain U.S.

governmental approvals (the "U.S.

Contingent Consideration") and $ 5.0 million upon obtaining certain European governmental approvals, both related to the completion of the transition of the Confluent Surgical business.

The fair values of contingent consideration related to the acquisition of Confluent Surgical were estimated using a discounted cash flow model using a discount rate of 2.2 % .

During the first quarter of 2018, the Company received the U.S.

governmental approvals and adjusted the related contingent consideration liability to $ 19.0 million , which the Company paid in April 2018.

During the third quarter of 2018, the Company received certain European governmental approvals.

The Company paid the remaining $ 5.0 million of contingent consideration related to Confluent Surgical in October of 2018.

SEGMENT AND GEOGRAPHIC INFORMATION

1 unchanged sentence

The two reportable segments and their activities are described below.

The Codman Specialty Surgical segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, and cranial stabilization equipment and (ii) the precision tools and instruments business, which sells more than 40,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, dental, podiatry, and veterinary offices.

• The Codman Specialty Surgical segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, and cranial stabilization equipment and (ii) the Instruments business, which sells more than 40,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, dental, podiatry, and veterinary offices.

• The Orthopedics and Tissue Technologies segment includes such offerings as skin and wound repair, bone and joint fixation implants in the upper and lower extremities, bone grafts, and nerve and tendon repair products.

2 unchanged sentences

Net sales and profit by reportable segment for the years ended December 31, 2020, 2019 and 2018 are as follows:

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Years Ended December 31,

2020 2019 2018

(In thousands)

7 unchanged sentences

Segment profit 516,287 539,657 512,846

Amortization ( 27,757 ) ( 27,028 ) ( 21,160 )

Corporate and other ( 337,160 ) ( 418,869 ) ( 380,688 )

4 unchanged sentences

Total revenue, net and long-lived assets (tangible) by major geographic area are summarized below:

United States*

Rest of the World

United States* Europe Asia Pacific Rest of the World Consolidated

(In thousands)

Total revenue, net:

2020 $ 971,975 $ 172,689 $ 157,174 $ 70,030 $ 1,371,868

2019 1,077,379 197,468 157,391 85,319 1,517,557

2018 1,045,887 201,354 144,253 80,947 1,472,441

Total long-lived assets:

2020 $ 324,893 $ 38,812 $ 13,121 $ 5,577 $ 382,403

2019 383,652 47,325 8,598 7,143 446,718

* Includes long-lived assets in Puerto Rico.

SUBSEQUENT EVENTS

Sixth Amended and Restated Senior Credit Agreement

On February 3, 2020, the Company entered into an the sixth amendment and restatement (the "February 2020 Amendment") of its credit agreement with a syndicate of lending banks.

The sixth amended and restated credit agreement makes an aggregate principal amount of up to approximately $ 2.2 billion available to the Company through the following facilities:

(i) a $ 877.5 million term loan facility (decreased from $ 900 million ), and (ii) a $ 1.3 billion revolving credit facility, which includes a $ 60 million sublimit for the issuance of standby letters of credit and a $ 60 million sublimit for swingline loans.

The sixth amendment and restatement extends the credit facility’s maturity date from May 3, 2023 to February 3, 2025.

The first mandatory repayment under the term loan portion of the sixth amended and restated credit agreement is due June 30, 2021.

In connection with the February 2020 Amendment, the Company’s maximum consolidated total leverage ratio in the financial covenants was modified to the following:

Fiscal Quarter

Maximum Consolidated Total Leverage Ratio

First fiscal quarter ending after the Closing Date through June 30, 2022

September 30, 2022 through June 30, 2023

September 30, 2023 and the last day of each fiscal quarter thereafter

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Convertible Notes

On February 4, 2020, the Company offered and sold in a private placement $ 575.0 million of 0.5 % convertible notes due in 2025.

Upon conversion, the Notes may be settled in shares of Company's common stock, cash or a combination of cash and shares of the common stock, at the election of the Company.

The initial conversion rate is 13.5739 shares of common stock per $1,000 principal amount of Notes.

In connection with the offering of the Notes, the Company entered into privately negotiated convertible note hedge transactions.

These transactions are expected generally to reduce potential dilution to the Company's common stock upon conversion of the Notes.

The Company also entered into warrant transactions with the option counterparties.

The warrant transactions could separately have a dilutive effect on the Company's common stock if the market price exceeds the strike price of the warrants.

The Company intends to use:

Approximately $ 59.7 million of the net proceeds from the offering to pay the cost of the convertible note hedge transactions (after such cost is partially offset by the proceeds from the sale of the warrant transactions).

$ 100.0 million of the net proceeds from the offering to repurchase shares of the Company's stock.

This includes up to approximately $ 7.6 million from certain purchasers of the convertible notes in conjunction with the closing of the offering.

$ 92.4 million of the proceeds will be used to repurchase shares through an accelerated share repurchase transaction ("ASR").

Total shares repurchased through February 21, 2020 were 1,438,615 .

The remainder of the net proceeds for general corporate purposes, which may include repayment of a portion of the indebtedness under the Company's Senior Credit Facility.

On February 10, 2020, the Company repaid $ 315.0 million of principal on the revolving portion of its Senior Credit Facility.

SUBSEQUENT EVENTS

Sale of Extremity Orthopedics Business

On January 4, 2021, upon the terms and conditions set forth in the Divestiture agreement (see Note 3, Assets and Liabilities Held for Sale), the Company completed its previously announced sale of its Extremity Orthopedics business to Smith & Nephew USD Limited.

The Company received an aggregate purchase price of $ 240.0 million from Smith and Nephew and concurrently paid $ 41.5 million to CFO effectively terminating our licensing agreement (see Note 5, Acquisitions) .

The transaction included the sale of the Company's upper and lower Extremity Orthopedics product portfolio, including ankle and shoulder arthroplasty and hand and wrist product lines.

On January 20, 2021, the Company acquired ACell, Inc.

for an acquisition purchase price of $ 300 million.

Under the terms of the definitive merger agreement, the Company paid the consideration for the merger as an upfront cash payment subject to a customary post-closing adjustment for certain working capital.

The Company is also required to pay the former shareholders of ACell Inc.

up to $ 100 million based upon achieving certain revenue-based performance milestones in 2022, 2023 and 2025.

Equity Award Plans

The 2000 and 2001 Equity Incentive Plans were terminated as of February 19, 2021, and no further awards may be issued under the plans.

SELECTED QUARTERLY INFORMATION - UNAUDITED

(In thousands, except per share data)

Total revenue, net

Net income (loss)

Per Share - Basic (1)

Per Share - Diluted (1)

Quarter Total revenue, net Gross margin Net income (loss) Per Share - Basic (1) Per Share - Diluted (1)

First 354,324 220,848 9,180 $ 0.11 $ 0.11

Second 258,665 153,187 ( 369 ) ( 0.00 ) ( 0.00 )

Third 370,232 235,421 32,337 0.38 0.38

Fourth 388,647 241,578 92,744 1.10 1.09

1,371,868 851,034 133,892

First 359,690 230,778 32,756 $ 0.38 $ 0.38

Second 383,645 239,974 29,736 0.35 0.34

Third 379,095 236,459 ( 27,610 ) ( 0.32 ) ( 0.32 )

Fourth 395,127 245,665 15,319 0.18 0.18

1,517,557 952,876 50,201

(1) Per common share amounts for the quarters and full years have been calculated separately.

Accordingly, quarterly amounts do not necessarily add to the annual amount because of differences in the weighted average common shares outstanding during each period principally due to the effect of the Company’s issuing shares of its common stock during the year.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

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SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

Balance at Beginning of Period

Charged to Costs and Expenses

Balance at End of Period

Balance at Beginning of Period Charged to Costs and Expenses Other Deductions Balance at End of Period

(In thousands)

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Year ended December 31, 2018

Allowance for doubtful accounts and sales returns and allowances

Allowance for doubtful accounts $ 8,882 $ 557 $ ( 4,649 ) (2) $ ( 1,071 ) (1) $ 3,719

Deferred tax assets valuation allowance 7,961 ( 894 ) — ( 94 ) 6,973

The above amounts primarily relate to amounts acquired through acquisition of Derma Sciences and effect of foreign currency translations.

(1) Deductions primarily relates to allowance for doubtful accounts written off during the year, net of recoveries and other adjustments.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures