INTEGRA LIFESCIENCES HOLDINGS CORP 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. Disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management has designed our disclosure controls and procedures to provide reasonable assurance of achieving the desired control objectives. As required by Exchange Act Rule 13a-15(b), we have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2024. Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2024 to provide such reasonable assurance. Management’s Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is 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 in the United States of America (“GAAP”). We recognize that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies and procedures may deteriorate. To evaluate the effectiveness of our internal control over financial reporting, management used the criteria described in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2024. Acquisition of Acclarent, Inc. The acquisition of Acclarent was completed on April 1, 2024. In accordance with the SEC Staff’s interpretative guidance for newly acquired businesses, we are permitted to exclude Acclarent from our assessment of internal control over financial reporting for up to one year from the acquisition date. Total assets and total revenues of Acclarent, a wholly-owned subsidiary, excluded from our assessment of internal control over financial reporting represent approximately $82.4 million and $95.0 million, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024. As this acquisition occurred in the second quarter of the year ended December 31, 2024, the scope of our assessment of our internal control over financial reporting does not include Acclarent as of December 31, 2024. The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION During the three months ended December 31, 2024, no director or officer of the Company, nor the Company itself, adopted or terminated a “Rule 10b5-1 trading arrangement” or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 56 PART III INCORPORATION BY REFERENCE The information called for by Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities relating to equity compensation plans , Item 10. Directors, Executive Officers and Corporate Governance, Item 11. Executive Compensation, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Item 13 . 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 9, 2025, 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. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE (a) Documents filed as a part of this report: 1. Financial Statements. The following financial statements are filed as a part of this report: Report of Independent Registered Public Accounting Firm (PricewaterhouseCoopers LLP, Florham Park, New Jersey, PCAOB ID# 238 ) F-1 Consolidated Statements of Operations for the years ended December 31, 202 4 , 202 3 and 202 2 F- 4 Consolidated Statements of Comprehensive Income for the years ended December 31, 202 4 , 202 3 and 202 2 F- 5 Consolidated Balance Sheets as of December 31, 202 4 and 202 3 F- 6 Consolidated Statements of Cash Flows for the years ended December 31, 202 4 , 202 3 and 202 2 F- 7 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 202 4 , 202 3 and 202 2 F- 8 Notes to Consolidated Financial Statements F- 9 All other schedules not listed above have been omitted, because they are not applicable or are not required, or because the required information is included in the consolidated financial statements or notes thereto. 2 . Exhibits required to be filed by Item 601 of Regulation S-K. 2.1(a) Agreement and Plan of Merger by among Integra LifeSciences Holdings Corporation and ACell Inc. dated as of December 15, 2020 (Incorporated by reference to Exhibit 2.1(b) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020) 2.1(b) Stock Purchase Agreement, dated December 12, 2023, among Ethicon, Inc., Integra LifeSciences Holdings Corporation and Integra LifeSciences Israel Ltd. (Incorporated by reference to Exhibit 2.1(c) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023) 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 fiscal 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 fiscal 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 fiscal 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) 57 3.1(e) Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Company dated May 9, 2024 (Incorporated by reference to Exhibit 3.1(e) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024) 3.2 Third Amended and Restated Bylaws of Integra LifeSciences Holdings Corporation, effective as of February 21, 2023 (Incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022) 4.1 Indenture, dated as of February 7, 2020, by and between Integra LifeSciences Holdings Corporation and Citibank, N.A., as trustee (including Form of 0.50% Convertible Senior Notes due 2025) (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 4.2 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* Integra LifeSciences Deferred Compensation Plan, effective as of May 16, 2019 (Incorporated by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-8 (Registration No. 333-231709) filed on May 23, 2019) 4.4+ Description of Securities 10.1(a) 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(b) 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(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) 10.2(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) 10.3(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) 10.3(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) 10.3(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) 10.3(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) 10.3(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) 10.3(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) 10.3(g)* Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 18, 2021) 10.3(h)* Amendment No. 1 to the Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 13, 2024) 58 10.3(i)* Form of Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan Restricted Stock Award Agreement – Directors (Incorporated by reference to Exhibit 10.3(h) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022) 10.3(j)* Form of Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan Restricted Stock Agreement – Executive Officers (Incorporated by reference to Exhibit 10.3(i) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022) 10.3(k)* Form of Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan Performance Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.3(j) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022) 10.3(l)* Form of Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan Non-Qualified Stock Option Award Agreement (Incorporated by reference to Exhibit 10.3(k) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022) 10.3(m)* Form of Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan Restricted Stock Award Agreement – OUS (Incorporated by reference to Exhibit 10.3(l) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 10.3(n)* Form of Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan Restricted Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024) 10.3(o)* Form of Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan Non-Qualified Stock Option Award Agreement – CEO (Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024) 10.4* Form of Indemnification Agreement, by and between Integra LifeSciences Holdings Corporation and each of its directors and executive officers (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 19, 2022) 10.5* Annual Executive Physical Medical Exam Arrangement (Incorporated by reference to the Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 29, 2013) 10.6* 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) 10.7* Integra LifeSciences Holdings Corporation 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 17 , 2024) 10.8* Amended and Restated Management Incentive Compensation Plan, as of January 1, 2008 (Incorporated by reference to Exhibit 10.43(c) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007) 10.9* Employment Agreement, dated November 4, 2024, by and between Integra LifeSciences Holdings Corporation, Integra LifeSciences Corporation and Mojdeh Poul (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 4, 2024) 10.10* Davis Promotion Summary, effective December 1, 2016 (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 5, 2016) 10.11(a)* Employment Agreement, dated October 28, 2021, by and between Integra LifeSciences Holdings Corporation, Integra LifeSciences Corporation and Jan De Witte (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 28, 2021) 10.11(b)* Letter Agreement, dated February 27, 2024 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 28, 2024) 10.11(c)+* Consulting Agreement, dated November 4, 2024, by and between Integra LifeSciences Holdings Corporation, Integra LifeSciences Corporation and Jan De Witte 10.12(a) 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) 59 10.12(b) Amendment No. 1 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty, dated as of March 29, 2019, by and among Integra Receivables LLC, Integra LifeSciences Sales LLC, as Servicer, PNC Bank, National Associations, as Administrative Agent, Committed Lender and Group Agent, Mizuho Bank, Ltd., as Committed Lender and Group Agent and 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 the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021) 10.12(c) Amendment No. 2 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty, dated as of July 17, 2020, by and among, Integra Receivables LLC, Integra LifeSciences Sales LLC, as Servicer, PNC Bank, National Associations, as Administrative Agent, Committed Lender and Group Agent, Mizuho Bank, Ltd., as Committed Lender and Group Agent and 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 the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021) 10.12(d) Amendment No. 3 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty, dated as of May 28, 2021, by and among, Integra Receivables LLC, Integra LifeSciences Sales LLC, as Servicer, PNC Bank, National Associations, as Administrative Agent, PNC Capital Markets LLC, as Structuring Agent, Committed Lender and Group Agent, and certain lenders and group agents that are parties thereto from time to time (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021) 10.12(e) Amendment No. 4 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty, dated as of April 17, 2023, by and among, Integra Receivables LLC, Integra LifeSciences Sales LLC, as Servicer, PNC Bank, National Associations, as Administrative Agent, PNC Capital Markets LLC, as Structuring Agent, Committed Lender and Group Agent, and certain lenders and group agents that are parties thereto from time to time (Incorporated by reference to Exhibit 10.4 to the Company Quarterly Report on Form 10-Q for the quarter ended March 31, 2023) 10.12(f) Amendment No. 5 to Receivables Financing Agreement and Reaffirmation of Performance Guaranty, dated as of December 15, 2023, by and among, Integra Receivables LLC, Integra LifeSciences Sales LLC, as Servicer, PNC Bank, National Associations, as Administrative Agent, PNC Capital Markets LLC, as Structuring Agent, Committed Lender and Group Agent, The Bank of Nova Scotia, as Committed Lender and Group Agent, and certain lenders and group agents that are parties thereto from time to time (Incorporated by reference to Exhibit 10.12(f) to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023) 10.13 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 10.2 to the Company’s Current Report on Form 8-K filed on December 28, 2018) 10.14 Seventh Amended and Restated Credit Agreement, dated as of March 24, 2023, among Integra LifeSciences Holdings Corporation, the lenders party thereto, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Citibank N.A., JPMorgan Chase Bank, N.A., Morgan Stanley MUFG Loan Partners, LLC, PNC Bank, N.A., Truist Securities, Inc. and Wells Fargo Bank, N.A., as Co-Syndication Agents, and The Bank of Nova Scotia, BMO Harris Bank N.A., BNP Paribas, Capital One, National Association, Citizens Bank, N.A., DNB Bank ASA, New York Branch, Santander Bank, N.A. and TD Bank, N.A., as Co-Documentation (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 24, 2023) 10.15 Base Call Option Transaction Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Citibank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.16 Ratification Agreement, dated as of March 24, 2023, between Integra LifeSciences Holdings Corporation, the Subsidiary Guarantors of Integra LifeSciences Holdings Corporation and Bank of America, N.A., as Administrative Agent (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 24, 2023) 10.17 Base Call Option Transaction Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Morgan Stanley & Co. International plc. (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.18 Base Call Option Transaction Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Wells Fargo, National Association. (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.19 Base Warrant Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Citibank, N.A. (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 60 10.20 Base Warrant Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Goldman Sachs & Co. LLC. (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.21 Base Warrant Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Morgan Stanley & Co. International plc. (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.22 Base Warrant Confirmation, dated as of February 4, 2020, between Integra LifeSciences Holdings Corporation and Wells Fargo, National Association. (Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.23 Additional Call Option Transaction Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Citibank, N.A. (Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.24 Additional Call Option Transaction Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Goldman Sachs & Co. LLC. (Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.25 Additional Call Option Transaction Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Morgan Stanley & Co. International plc. (Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.26 Additional Call Option Transaction Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Wells Fargo, National Association. (Incorporated by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.27 Additional Warrant Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Citibank, N.A. (Incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.28 Additional Warrant Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Goldman Sachs & Co. LLC. (Incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.29 Additional Warrant Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Morgan Stanley & Co. plc. (Incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.30 Additional Warrant Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and Wells Fargo, National Association. (Incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 10.31 Issuer Forward Repurchase Transaction Confirmation, dated as of February 5, 2020, between Integra LifeSciences Holdings Corporation and JPMorgan Chase Bank, National Association, New York Branch. (Incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K filed on February 7, 2020) 19.1(a)+ Integra LifeSciences Holdings Corporation Trading in Securities by Company Personnel Policy (as amended February 20, 2025) 19.1(b)+ Integra LifeSciences Holdings Corporation Trading Window Group Policy (as amended February 20, 2025) 21.1+ Subsidiaries of the Company 23.1+ Consent of PricewaterhouseCoopers LLP 31.1+ Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2+ Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1+ Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2+ Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 61 97.1 Integra LifeSciences Holdings Corporation Incentive Compensation Recovery Policy (Incorporated by reference to Exhibit 97.1 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 101.INS+# Inline XBRL Instance Document 101.SCH+# Inline XBRL Taxonomy Extension Schema Document 101.CAL+# Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Definition Linkbase Document 101.LAB+# Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE+# Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Indicates a management contract or compensatory plan or arrangement. + Indicates this document is filed as an exhibit herewith. # The financial information of Integra LifeSciences Holdings Corporation Annual Report on Form 10-K for the year ended December 31, 2024 filed on February 25, 2025 formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Operations, (ii) the Consolidated Statement of Comprehensive Income (Loss), (iii) the Consolidated Balance Sheets, (iv) Parenthetical Data to the Consolidated Balance Sheets, (v) the Consolidated Statements of Cash Flows, (vi) the Consolidated Statements of Changes in Stockholders’ Equity, and (vii) Notes to Consolidated Financial Statements, is furnished electronically herewith. The Company’s Commission File Number for Reports on Form 10-K, Form 10-Q and Form 8-K is 000-26224. ITEM 16. FORM 10-K SUMMARY None. 62 SIGNATURES Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INTEGRA LIFESCIENCES HOLDINGS CORPORATION By: /s/ Mojdeh Poul Mojdeh Poul President and Chief Executive Officer, and Director (Principal Executive Officer) By: /s/ Lea Knight Lea Knight Executive Vice President and Chief Financial Officer (Principal Financial Officer) By: /s/ Jeffrey A. Mosebrook Jeffrey A. Mosebrook Senior Vice President, Finance (Principal Accounting Officer) Date: February 25, 2025 63 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. Signature Title Date /s/ Mojdeh Poul President and Chief Executive Officer, February 25, 2025 Mojdeh Poul and Director (Principal Executive Officer) /s/ Lea Knight Executive Vice President and Chief Financial Officer February 25, 2025 Lea Knight (Principal Financial Officer) /s/ Jeffrey A. Mosebrook Senior Vice President, Finance February 25, 2025 Jeffrey A. Mosebrook (Principal Accounting Officer) /s/ Stuart M. Essig, Ph.D. Executive Chairman of the Board February 25, 2025 Stuart M. Essig, Ph.D. /s/ Keith Bradley, Ph.D. Director February 25, 2025 Keith Bradley, Ph.D. /s/ Shaundra Clay Director February 25, 2025 Shaundra Clay /s/ Jeffrey A. Graves Director February 25, 2025 Jeffrey A. Graves /s/ Barbara B. Hill Director February 25, 2025 Barbara B. Hill /s/ Renee W. Lo Director February 25, 2025 Renee W. Lo /s/ Raymond G. Murphy Director February 25, 2025 Raymond G. Murphy /s/ Christian S. Schade Director February 25, 2025 Christian S. Schade 64 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Integra LifeSciences Holdings Corporation 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, 2024 and 2023, 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, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company ’ s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Acclarent, Inc. (“Acclarent”) from its assessment of internal control over financial reporting as of December 31, 2024, because it was acquired by the Company in a purchase business combination during 2024. We have also excluded Acclarent from our audit of internal control over financial reporting. Acclarent is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately $82.4 million and $95.0 million, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024. Definition and Limitations of Internal Control over Financial Reporting 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; (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; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. F-1 Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. 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 a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate. Acquisition of Acclarent, Inc. – Valuation of Completed Technology As described in Notes 2 and 4 to the consolidated financial statements, on April 1, 2024, the Company completed the acquisition of Acclarent, Inc (Acclarent) for a net consideration of $277.8 million. Of the acquired intangible assets, $202.0 million of completed technology was recorded. Fair value is estimated by management using the multi-period, excess earnings method of the income approach for completed technology. Management’s cash flow projections for the intangible assets acquired included significant assumptions relating to revenue growth rates, cost of sales, the discount rate, obsolescence rate, and an assessment of the asset’s life cycle, as well as other factors. The principal considerations for our determination that performing procedures relating to the valuation of completed technology acquired in the acquisition of Acclarent is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the completed technology acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, cost of sales, the discount rate and the obsolescence rate; and (iii) 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 acquisition accounting, including controls over management’s valuation of the completed technology acquired. These procedures also included, among others (i) reading the purchase agreement; (ii) testing management’s process for developing the fair value estimate of the completed technology acquired; (iii) evaluating the appropriateness of the multi-period, excess earnings method used by management; (iv) testing the completeness and accuracy of the underlying data used in the multi-period, excess earnings method; and (v) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, cost of sales, the discount rate and the obsolescence rate. Evaluating management’s assumption related to the revenue growth rates involved considering (i) the current and past performance of the Acclarent business; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period, excess earnings method and (ii) the reasonableness of the discount rate and obsolescence rate assumptions. Interim Goodwill Impairment Assessment - Tissue Technologies Reporting Unit As described in Notes 2 and 7 to the consolidated financial statements, the Company’s goodwill balance was $1,097.0 million as of December 31, 2024, of which $381.2 million relates to the Tissue Technologies reporting unit. Goodwill is not subject to amortization but is tested for impairment at the reporting unit level annually in the third quarter. Additionally, management may perform interim tests of goodwill for impairment if an event occurs or circumstances change that could potentially reduce the fair value below its carrying value. During the first quarter of 2024, management performed a quantitative impairment assessment of its Tissue Technologies reporting unit. The quantitative test used by management to estimate the fair value of the Tissue Technologies reporting unit uses a combination of both an income approach and a market approach. The income approach utilizes the estimated discounted cash flows for the reporting unit while the market approach utilizes comparable publicly-traded companies’ revenue and EBITDA multiples. Significant assumptions made by management include revenue growth rates, cost of sales, terminal growth rates and the discount rate. The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessment for the Tissue Technologies reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Tissue Technologies reporting unit; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the revenue growth rates, terminal growth rate, discount rate, and comparable publicly-traded companies’ revenue and EBITDA multiples; and (iii) 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 F-2 relating to management’s goodwill impairment assessment, including controls over valuation of the Tissue Technologies reporting unit. These procedures also included, among others, (i) testing management’s process for developing the fair value estimate of the reporting unit; (ii) evaluating the appropriateness of the income and market approaches used by management; (iii) testing the completeness and accuracy of underlying data used by management in the income and market approaches; (iv) evaluating the reasonableness of the significant assumptions used by management related to the revenue growth rate, terminal growth rate, and discount rate in the income approach and the comparable publicly-traded companies’ revenue and EBITDA multiples in the market approach. Evaluating management’s assumptions related to the revenue growth rates and terminal growth rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income and market approaches and (ii) the reasonableness of the discount rate and comparable publicly-traded companies’ revenue and EBITDA multiples assumptions. Annual Goodwill Impairment Assessment - Tissue Technologies, Neurosurgery, and Instruments and ENT Reporting Units As described in Notes 2 and 7 to the consolidated financial statements, the Company’s goodwill balance was $1,097.0 million as of December 31, 2024. Goodwill is not subject to amortization but is tested for impairment at the reporting unit level annually in the third quarter. Management performed the annual impairment assessment using quantitative tests of its Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units, using a combination of both an income approach and a market approach to determine the fair value of the reporting units. The income approach utilizes the estimated discounted cash flows for the reporting unit while the market approach utilizes comparable publicly-traded companies’ revenue and EBITDA multiples. Significant assumptions made by management include revenue growth rates, cost of sales, terminal growth rates and the discount rate for each reporting unit. Management determined, after performing the quantitative analysis, that the fair value of the goodwill of the reporting units was not less than the carrying amount. The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment of the Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the revenue growth rates, terminal growth rate, discount rate, and comparable publicly-traded companies’ revenue and EBITDA multiples for the Tissue Technologies reporting unit and revenue growth rate, cost of sales terminal growth rate, discount rate, and comparable publicly-traded companies’ revenue and EBITDA multiples for the Neurosurgery and Instruments and ENT reporting units; and (iii) the audit effort involved in 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 management’s goodwill impairment assessments, including controls over the valuation of the Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units; (ii) evaluating the appropriateness of the income and market approaches used by management; (iii) testing the completeness and accuracy of underlying data used by management in the income and market approaches; and (iv) evaluating the reasonableness of the significant assumptions used by management related to the revenue growth rate, cost of sales, terminal growth rate, discount rate in the income approach and the comparable publicly-traded companies’ revenue and EBITDA multiples in the market approach. Evaluating management’s assumptions related to the revenue growth rates and terminal growth rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income and market approaches and (ii) the reasonableness of the discount rate, the terminal growth rate and comparable publicly-traded companies’ revenue and EBITDA multiples assumptions. /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey February 25, 2025 We have served as the Company’s auditor since 1989. F-3 INTEGRA LIFESCIENCES HOLDINGS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share amounts) Years Ended December 31, 2024 2023 2022 Total revenue, net $ 1,610,527 $ 1,541,573 $ 1,557,666 Costs and expenses: Cost of goods sold 728,466 656,838 587,355 Research and development 115,377 104,192 101,193 Selling, general and administrative 716,983 656,641 616,316 Intangible asset amortization 21,290 12,376 13,882 Total costs and expenses 1,582,116 1,430,047 1,318,746 Operating income 28,411 111,526 238,920 Interest income 20,040 17,202 11,917 Interest expense ( 70,632 ) ( 51,377 ) ( 49,594 ) Gain from sale of businesses — — 644 Other income, net 3,944 3,718 12,007 (Loss) income before income taxes ( 18,237 ) 81,069 213,894 (Benefit) Provision for income taxes ( 11,293 ) 13,328 33,344 Net (loss) income $ ( 6,944 ) $ 67,741 $ 180,550 Net (loss) income per share Basic $ ( 0.09 ) $ 0.85 $ 2.18 Diluted $ ( 0.09 ) $ 0.84 $ 2.16 Weighted average common shares outstanding (See Note 13): Basic 77,010 80,089 82,997 Diluted 77,010 80,337 83,516 The accompanying notes are an integral part of these consolidated financial statements. F-4 INTEGRA LIFESCIENCES HOLDINGS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) Years Ended December 31, 2024 2023 2022 Net (loss) income $ ( 6,944 ) $ 67,741 $ 180,550 Other comprehensive (loss) income, before tax: Change in foreign currency translation adjustments ( 15,860 ) ( 20,821 ) ( 17,807 ) Unrealized gain (loss) on derivatives Unrealized derivative gain (loss) arising during period 62,638 ( 22,071 ) 104,351 Less: Reclassification adjustments for gain (loss) included in net income 53,882 ( 13,423 ) 18,859 Unrealized gain (loss) on derivatives 8,756 ( 8,648 ) 85,492 Defined benefit pension plan - net gain (loss) arising during period 1,557 ( 6,610 ) 7,429 Total other comprehensive (loss) gain, before tax ( 5,547 ) ( 36,079 ) 75,114 Income tax (expense) benefit related to items in other comprehensive gain (loss) ( 6,918 ) 10,708 ( 19,694 ) Total other comprehensive gain (loss), net of tax ( 12,465 ) ( 25,371 ) 55,420 Comprehensive (loss) income, net of tax $ ( 19,409 ) $ 42,370 $ 235,970 The accompanying notes are an integral part of these consolidated financial statements. F-5 INTEGRA LIFESCIENCES HOLDINGS CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) December 31, 2024 2023 ASSETS Current Assets: Cash and cash equivalents $ 246,375 $ 276,402 Short-term investments 27,192 32,694 Trade accounts receivable, net of allowances of $ 6,917 and $ 4,879 272,370 259,327 Inventories, net 429,090 389,608 Prepaid Expenses 77,001 67,362 Other Current Assets 29,653 32,643 Total current assets 1,081,681 1,058,036 Property, plant and equipment, net 405,723 340,199 Right of use asset - operating leases 144,042 156,184 Intangible assets, net 1,207,588 1,067,833 Goodwill 1,096,952 1,055,462 Deferred tax assets, net 34,923 46,080 Other assets 66,515 58,194 Total assets $ 4,037,424 $ 3,781,988 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Current portion of borrowings under senior credit facility $ 33,906 $ 14,531 Current portion of lease liability - operating leases 14,540 15,284 Convertible securities 573,170 — Accounts payable, trade 82,502 92,326 Contract liabilities 10,483 8,540 Accrued compensation 85,617 75,455 Accrued expenses and other current liabilities 121,908 100,844 Total current liabilities 922,126 306,980 Long-term borrowings under senior credit facility 1,087,917 825,563 Long-term borrowings under securitization facility 108,100 89,200 Long-term convertible securities — 570,255 Lease liability - operating leases 166,930 166,849 Deferred tax liabilities 60,833 35,317 Other liabilities 146,238 199,940 Total liabilities 2,492,144 2,194,104 Stockholders’ Equity: Preferred Stock; no par value; 15,000 authorized shares; none outstanding — — Common stock; $ 0.01 par value; 240,000 authorized shares; 91,610 and 90,920 issued at December 31, 2024 and 2023, respectively 916 909 Additional paid-in capital 1,323,431 1,302,484 Treasury stock, at cost; 14,445 and 12,751 shares at December 31, 2024 and 2023, respectively ( 691,411 ) ( 647,262 ) Accumulated other comprehensive (loss) ( 27,571 ) ( 15,106 ) Retained earnings 939,915 946,859 Total stockholders’ equity 1,545,280 1,587,884 Total liabilities and stockholders’ equity $ 4,037,424 $ 3,781,988 The accompanying notes are an integral part of these consolidated financial statements. F-6 INTEGRA LIFESCIENCES HOLDINGS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) Years Ended December 31, 2024 2023 2022 OPERATING ACTIVITIES: Net (loss) income $ ( 6,944 ) $ 67,741 $ 180,550 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 140,893 123,512 118,299 Non-cash impairment charges 12,209 — — Deferred income tax benefit ( 20,731 ) ( 11,885 ) ( 4,585 ) Share-based compensation 24,377 20,143 27,725 Amortization of debt issuance costs and expenses associated with debt refinancing 5,593 6,164 6,845 Non-cash lease expense 835 2,189 2,816 Lease incentive 8,452 — — Loss (Gain) on disposal of property and equipment and construction in-progress 1,496 777 ( 6,813 ) Gain from the sale of businesses — — ( 644 ) Change in fair value of contingent consideration and others ( 5,791 ) 12,888 ( 20,304 ) Changes in assets and liabilities: Accounts receivable 7,398 4,593 ( 33,905 ) Inventories ( 28,149 ) ( 59,773 ) ( 29,124 ) Prepaid expenses and other current assets ( 8,187 ) 2,652 8,612 Other non-current assets ( 2,842 ) ( 8,535 ) ( 2,182 ) Accounts payable, accrued expenses and other current liabilities ( 2,674 ) ( 20,229 ) 17,343 Contract liabilities 3,540 128 4,274 Other non-current liabilities ( 93 ) ( 410 ) ( 4,438 ) Net cash provided by operating activities 129,382 139,955 264,469 INVESTING ACTIVITIES: Purchases of property and equipment ( 104,418 ) ( 66,865 ) ( 42,343 ) Purchases of intangible assets ( 9,953 ) — — Proceeds from sale of business — — 23,960 Acquired in-process research and development and intangibles — — ( 4,742 ) Purchases of short term investments ( 48,997 ) ( 32,694 ) — Cash paid for business acquisitions, net of cash acquired ( 277,811 ) — ( 51,509 ) Proceeds from sales of property and equipment — — 11,145 Proceeds from maturities of short-term investments 54,500 — — Net proceeds on swaps designated as net investment hedges ( 4,129 ) 5,381 4,909 Net cash used in investing activities ( 390,808 ) ( 94,178 ) ( 58,580 ) FINANCING ACTIVITIES: Proceeds from borrowings of long-term indebtedness 486,500 165,100 40,750 Payments on debt ( 187,131 ) ( 110,600 ) ( 148,550 ) Payment of debt issuance costs — ( 7,879 ) — Purchase of treasury stock ( 52,471 ) ( 275,000 ) ( 125,000 ) Payments for contingent considerations ( 11,923 ) — — Proceeds from exercised stock options 6,398 4,317 5,465 Cash taxes paid in net equity settlement ( 3,510 ) ( 5,863 ) ( 24,618 ) Net cash provided by (used in) financing activities 237,863 ( 229,925 ) ( 251,953 ) Effect of exchange rate changes on cash and cash equivalents ( 6,464 ) 3,889 ( 10,723 ) Net decrease in cash and cash equivalents ( 30,027 ) ( 180,259 ) ( 56,787 ) Cash and cash equivalents at beginning of period 276,402 456,661 513,448 Cash and cash equivalents at end of period $ 246,375 $ 276,402 $ 456,661 The accompanying notes are an integral part of these consolidated financial statements. F-7 INTEGRA LIFESCIENCES HOLDINGS CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Dollars in thousands) Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Retained Earnings Total Equity Shares Amount Shares Amount Balance, January 1, 2022 89,600 $ 896 ( 4,899 ) $ ( 234,448 ) $ 1,264,943 $ ( 45,155 ) $ 698,568 $ 1,684,804 Net income — — — — — — 180,550 180,550 Other comprehensive income, net of tax — — — — — 55,420 — 55,420 Issuance of common stock through employee stock purchase plan 17 — — 1,078 — — 1,078 Issuance of common stock for vesting of share-based awards, net of shares withheld for taxes and forfeitures 859 7 14 738 ( 20,974 ) — — ( 20,229 ) Share-based compensation — 2 — — 27,778 — — 27,780 Accelerated shares repurchased — — ( 1,938 ) ( 129,152 ) 4,152 — — ( 125,000 ) Balance, December 31, 2022 90,476 905 ( 6,823 ) ( 362,862 ) 1,276,977 10,265 879,118 1,804,403 Net income — — — — — — 67,741 67,741 Other comprehensive (loss), net of tax — — — — — ( 25,371 ) — ( 25,371 ) Issuance of common stock through employee stock purchase plan 21 — — — 1,107 — — 1,107 Issuance of common stock for vesting of share-based awards, net of shares withheld for taxes and forfeitures 423 1 18 911 ( 3,566 ) — — ( 2,654 ) Share-based compensation — 3 — — 20,105 — — 20,108 Accelerated shares repurchased — — ( 5,946 ) ( 285,311 ) 7,861 — — ( 277,450 ) Balance, December 31, 2023 90,920 909 ( 12,751 ) ( 647,262 ) 1,302,484 ( 15,106 ) 946,859 1,587,884 Net (loss) — — — — — — ( 6,944 ) ( 6,944 ) Other comprehensive (loss), net of tax — — — — — ( 12,465 ) — ( 12,465 ) Issuance of common stock through employee stock purchase plan 23 — — — 965 — — 965 Issuance of common stock for vesting of share-based awards, net of shares withheld for taxes and forfeitures 666 2 25 1,269 654 — — 1,925 Share-based compensation — 5 — — 24,431 — — 24,436 Accelerated shares repurchased — — ( 1,719 ) ( 45,418 ) ( 5,103 ) — — ( 50,521 ) Balance, December 31, 2024 91,609 916 ( 14,445 ) ( 691,411 ) 1,323,431 ( 27,571 ) 939,915 1,545,280 The accompanying notes are an integral part of these consolidated financial statements. F-8 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BUSINESS Integra LifeSciences Holdings Corporation (the “Company”) was incorporated in Delaware in 1989. The Company is a worldwide leader in medical technology. The Company was founded with the acquisition of an engineered collagen technology platform used to repair and regenerate tissue. Since then, Integra has developed numerous product lines from this technology for applications ranging from burn and deep tissue wounds to the repair of dura mater in the brain, as well as nerves and tendons. The Company has expanded its base regenerative technology business to include surgical instruments, neurosurgical products, Ear, Nose, Throat (“ENT”) products, and advanced wound care through global acquisitions and product development to meet the evolving needs of its customers and enhance patient care. The Company sells its products directly through various salesforces and through a variety of other distribution channels. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION These financial statements and the accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America and conform to Regulation S-X under the Securities Exchange Act of 1934, as amended. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. See Note 4. Acquisitions and Divestitures , for details of new subsidiaries included in the consolidation. USE OF ESTIMATES 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; accounting for business combinations; valuation of goodwill and intangible assets including estimated projected cash flows, discount rates, and estimated useful lives used to value and test goodwill and intangible assets for impairment; income taxes and valuation allowances recorded against deferred tax assets; valuation of stock-based compensation; valuation of derivative instruments; valuation of contingent liabilities; and fair value of debt instruments. 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. CASH AND CASH EQUIVALENTS The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. SHORT-TERM INVESTMENTS The Company had short-term investments, which primarily consisted of time deposits with original maturities between three months and one year. The short-term investments, which are valued based on Level 1 measurements in the fair value hierarchy, totaled approximately $ 27.2 million at December 31, 2024 compared to $ 32.7 million at December 31, 2023. Interest and dividends are recorded in income when earned. TRADE ACCOUNTS RECEIVABLE AND ALLOWANCES FOR DOUBTFUL ACCOUNTS RECEIVABLE Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business but generally does not require collateral or any other security to support its receivables. 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, 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. F - 9 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 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. 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 charges of $ 3.4 million for the year ended December 31, 2024, $ 3.0 million for the year ended December 31, 2023, and $ 0.2 million for the year ended December 31, 2022. The below table shows the roll forward of the allowance for doubtful accounts for the years ended December 31, 2024, 2023, and 2022: Balance at Beginning of Period Charged to Costs and Expenses Acquisition Deductions Balance at End of Period Dollars in thousands Year Ended: December 31, 2024 $ 4,879 3,416 2,162 ( 3,540 ) $ 6,917 December 31, 2023 $ 4,304 2,963 — ( 2,388 ) $ 4,879 December 31, 2022 $ 4,735 238 — ( 669 ) $ 4,304 Deductions primarily relates to allowance for doubtful accounts written off during the year, net of recoveries and other adjustments. INVENTORIES 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. Inventories consisted of the following: December 31, Dollars in thousands 2024 2023 Finished goods $ 223,729 $ 196,402 Work in process 79,423 74,035 Raw materials 125,938 119,171 Total inventories, net $ 429,090 $ 389,608 At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence or shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of technological or competitive obsolescence for products, general market conditions, a review of the shelf life expiration dates for products, as well as the feasibility of reworking or using excess or obsolete products or components in the production or assembly of other products that are not obsolete or for which there are not excess quantities in inventory. 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, the Company adjusts the carrying value to estimated net realizable value. The Company capitalizes inventory costs associated with certain products prior to regulatory approval, based on management’s judgment of probable economic benefit. The Company could be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies or a decision by management to discontinue the related development program. No such amounts were capitalized at December 31, 2024 or 2023. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at historical cost less accumulated depreciation and any impairment charges. The Company provides for depreciation using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the lease term or the useful life. The cost of major additions and improvements is capitalized, while maintenance and repair costs that do not improve or extend the lives of the respective assets are charged to operations as incurred. The cost of computer software developed or obtained for internal use is accounted for in accordance with FASB Topic 350-40, Intangibles - Goodwill and Other - Internal-Use Software (“ASC 350-40”) . F-10 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Property, plant and equipment balances and corresponding lives were as follows: December 31, Dollars in thousands 2024 2023 Useful Lives Land $ 952 $ 978 Buildings and building improvements 19,748 14,859 5 - 40 years Leasehold improvements 179,904 171,062 1 - 20 years Machinery and equipment 214,786 202,023 3 - 20 years Information systems and hardware 171,739 160,899 1 - 7 years Furniture, fixtures, and office equipment 18,887 20,549 1 - 15 years Construction-in-progress 196,630 137,276 Total 802,646 707,646 Less: Accumulated depreciation ( 396,923 ) ( 367,447 ) Property, plant and equipment, net $ 405,723 $ 340,199 Depreciation expense associated with property, plant and equipmen t was $ 42.4 million , $ 40.9 million, and $ 40.1 million for the years ended December 31, 2024, 2023, and 2022, respectively. CAPITALIZED INTEREST The interest cost on capital projects, including facilities build-out and internal use software, is capitalized and included in the cost of the project. 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 expenditures using the weighted average cost of the Company’s outstanding borrowings. For the years ended December 31, 2024 and 2023, respectively, the Company capitalized $ 4.5 million and $ 2.4 million of interest expense into property, plant and equipment. ACQUISITIONS The Company accounts for the acquisition of a business in accordance with FASB Topic 805, Business Combinations (“ASC 805”). Amounts paid to acquire a business are allocated to the assets acquired and liabilities assumed based on their respective estimated fair values as of the date of acquisition in accordance with the fair value hierarchy described in FASB Topic 820, Fair Value Measurement (“ASC 820”). Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. Results of operations of acquired companies are included in the Company’s results of operations as of the respective acquisition dates. Contingent consideration is recorded at fair value as measured on the date of acquisition. The value recorded is based on estimates of future financial projections under various potential scenarios using either a Monte Carlo simulation or the probability-weighted income approach derived from revenue estimates and probability assessment with respect to the likelihood of achieving contingent obligations. Contingent payments related to acquisitions consist of development, regulatory, and commercial milestone payments, in addition to sales-based payments, and are valued using discounted cash flow techniques. Each quarter until such contingent amounts are earned, the fair value of the liability is remeasured at each reporting period and adjusted as a component of operating expenses based on changes to the underlying assumptions. The change in the fair value of sales-based payments is based upon future revenue estimates and increases or decreases as revenue estimates or expectation of timing of payment charges. The estimates used to determine the fair value of the contingent consideration liability are subject to significant judgment and actual results are likely to differ from the amounts originally recorded. The Company determines the fair value of acquired intangible assets based on detailed valuations that use certain information and assumptions provided by management. Determining the fair value of these intangible assets acquired as part of a business combination requires the Company to make significant estimates. These estimates include the estimated annual net cash flows including application of forecasted revenue growth rates, cost of sales, the discount rate that appropriately reflects the risk inherent in each future cash flow stream, the obsolescence curve, and an assessment of the asset’s life cycle, as well as other factors such as the consideration of legal, technical, regulatory, economic, and competitive risks. The fair value assigned to acquired intangible assets is determined by estimating the future cash flows of each project or technology and discounting the net cash flows back to their present values. The discount rate used is determined at the time of measurement in accordance with accepted valuation methodologies. F-11 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In-process research and development (“ IPR&D ”) acquired in connection with the acquisition of a business in accordance with ASC 805 is initially recognized at fair value and characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use. The Company uses the income approach to determine the fair value of developed technology and IPR&D acquired in a business combination. This approach determines fair value by estimating the after-tax cash flows attributable to the respective asset over its useful life and then discounting these after-tax cash flows back to a present value. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each product including net revenues, cost of sales, research and development costs , selling and marketing costs, general and administrative costs, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends impacting the asset and each cash flow stream. Research and development costs incurred after the acquisition are expensed as incurred. Upon receipt of regulatory approval, the indefinite-lived intangible asset is then accounted for as a finite-lived intangible asset and amortized on a straight-line basis or accelerated basis, as appropriate, over its estimated useful life. If the project is subsequently abandoned, the indefinite-lived intangible asset is charged to expense. Due to the uncertainty associated with research and development projects, there are risks that actual results will differ materially from the original cash flow projections or that the research and development project will not result in a successful commercial product. The risks associated with achieving commercialization include, but are not limited to, delay or failure to obtain regulatory approvals to conduct clinical trials, delay or failure to obtain required market clearances, delays or issues with patent issuance, or validity and litigation. If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to expense at the acquisition date. Payments that would be recognized as contingent consideration in a business combination are recognized when probable in an asset acquisition. Refer to Note 4. Acquisitions and Divestitures for more information. GOODWILL AND OTHER INTANGIBLE ASSETS The excess of the cost over the fair value of net assets of acquired businesses is recorded as goodwill. In accordance with FASB Topic 350, Intangibles - Goodwill and Other (“ASC 350”), goodwill is not subject to amortization but is tested for impairment at the reporting unit level annually in the third quarter. Additionally, the Company may perform interim tests of goodwill for impairment if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit below its carrying amount. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. Refer to Note 7. Goodwill and Other Intangibles for more information. The Company has two reportable segments with three underlying reporting units. Refer to Note 16. Segment and Geographic Information for more information on reportable segments. Other intangible assets include patents, trademarks, purchased technology, and supplier and customer relationships. Identifiable intangible assets are initially recorded at fair market value at the time of acquisition generally using an income or cost approach. Developed technologies and other definite-lived intangible assets are amortized over their estimated useful lives either using the straight-line method or, if reliably determinable, based on the pattern of which the economic benefit of the asset is expected to be utilized. The Company capitalizes costs incurred to renew or extend the term of recognized intangible assets, if applicable, and amortizes those costs over their expected useful lives. F-12 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In accordance with ASC 350, the Company tests its indefinite-lived intangible assets for impairment annually in the third quarter. Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of an indefinite lived intangible asset below its carrying amount. The Company tests indefinite-lived intangible assets for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of the intangible asset is less than its carrying amount. The Company may elect to bypass this qualitative evaluation and perform a quantitative test. The quantitative test uses an income approach to determine the fair value of the indefinite-lived intangible asset. The income approach utilizes the estimated discounted cash flows for the indefinite-lived intangible asset. Estimates and assumptions used in the income approach to calculate projected future discounted cash flows included revenue growth rates, cost of sales, terminal growth rate, and a discount rate for each indefinite-lived intangible asset. Discount rates are determined using a weighted average cost of capital 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 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. The assumptions used are inherently subject to uncertainty and slight changes in these assumptions could have a significant impact on the concluded value. The estimates and assumptions applied represent a Level 3 measurement in the fair value hierarchy described in ASC 820. Level 3 inputs are supported by limited or no market activity and reflect the Company’s assumptions in measuring fair value. Developed technologies and other definite-lived intangible assets are amortized over their estimated useful lives either using the straight-line method or, if reliably determinable, based on the pattern of which the economic benefit of the asset is expected to be utilized. Definite-lived intangible assets tested periodically for impairment in accordance with FASB Topic 360, Property, Plant and Equipment (“ASC 360”) when events or changes in circumstances indicate that an asset ’ s carrying value may not be recoverable. The evaluation for recoverability involves comparing the carrying amount of the definite-lived intangible asset to the Company’s expectations of the future undiscounted cash flows derived from the definite-lived intangible asset . In the event the carrying value of the definite-lived intangible asset exceeds the undiscounted future cash flows expected to be derived from the definite-lived intangible asset over its remaining estimated useful life , the definite-lived intangible asset is considered not recoverable and the definite-lived intangible asset is tested for impairment. An impairment loss is measured as the excess of the asset ’ s carrying value over its fair value, calculated using discounted future cash flows. The computed impairment loss is recognized in the period that the impairment occurs. Refer to Note 7. Goodwill and Other Intangibles for more information. LONG-LIVED ASSETS Long-lived assets held and used by the Company, including property, plant and equipment, intangible assets, and lease right-of-use assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets to be held and used, a recoverability test is performed using projected undiscounted net cash flows applicable to the long-lived assets. If an impairment exists, the amount of such impairment is calculated based on the estimated fair value of the asset. Impairments to long-lived assets to be disposed of are recorded based upon the difference between the carrying value and the fair value of the applicable assets. INTEGRA FOUNDATION The Company may periodically make contributions to the Integra Foundation, Inc. The Integra Foundation was incorporated in 2002 exclusively for charitable, educational, and scientific purposes and qualifies under IRC 501(c)(3) as an exempt private foundation. Under its charter, the Integra Foundation engages in activities that promote health, the diagnosis and treatment of disease, and the development of medical science through grants, contributions and other appropriate means. The Integra Foundation is a separate legal entity and is not a subsidiary of the Company; therefore, its results are not included in these consolidated financial statements. The Company contributed $ 0.3 million to the Integra Foundation in 2024, which was recorded in selling, general, and administrative expenses. The Company made no contributions to the Integra Foundation in 2023 and 2022. F-13 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) DERIVATIVES 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. The Company addresses these risks through a risk management program that includes the use of derivative financial instruments and operates the program pursuant to documented corporate risk management policies. All derivative financial instruments are recognized in the financial statements at fair value in accordance with the authoritative guidance. Under the guidance, for those instruments that are designated and qualify as hedging instruments, the hedging instrument must be designated as a fair value hedge, cash flow hedge, or a hedge of a net investment in a foreign operation, based on the exposure being hedged. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. The Company’s derivative instruments do not subject its earnings or cash flows to material risk, and gains and losses on these derivatives generally offset losses and gains on the item being hedged. The Company has not entered into derivative transactions for speculative purposes. From time to time, the Company may enter into derivatives that are not designated as hedging instruments in order to protect itself from currency volatility due to intercompany balances. All derivative instruments are recognized at their fair values as either assets or liabilities on the balance sheet. The Company determines the fair value of its derivative instruments using the fair value hierarchy described in ASC 820, by considering the estimated amount the Company would receive to sell or transfer these instruments at the reporting date and by taking into account expected forward interest rates, currency exchange rates, the creditworthiness of the counterparty for assets, and its creditworthiness for liabilities. In certain instances, the Company utilizes a discounted cash flow model to measure fair value. Generally, the Company uses inputs that include quoted prices for similar assets or liabilities in active markets, other observable inputs for the asset or liability and inputs derived principally from, or corroborated by, observable market data by correlation or other means. The Company has classified all of its derivative assets and liabilities within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of its derivative instruments. The Company classifies derivatives designated as hedges in the same category as the item being hedged for cash flow presentation purposes. The Company entered into foreign currency forward and foreign currency swap contracts that are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized into other income, net, on the consolidated financial statements. Refer to Note 6. Derivative Instruments for more information. FOREIGN CURRENCY All assets and liabilities of foreign subsidiaries which have a functional currency other than the U.S. dollar are translated at the rate of exchange at year-end, while elements of the income statement are translated at the average exchange rates in effect during the year. The net effect of these translation adjustments is shown as a component of accumulated other comprehensive income (loss). These currency translation adjustments are not currently adjusted for income taxes as they relate to permanent investments in non-U.S. subsidiaries. Foreign currency transaction net losses of $ 2.3 million, net losses of $ 4.4 million, and net gains of $ 3.3 million are reported in other income, net in the statements of operations, for the year ended December 31, 2024, 2023, and 2022, respectively. INCOME TAXES 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 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. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. Reserves are established for positions that don't meet this recognition threshold. The reserve is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. These reserves are classified as long-term liabilities in the consolidated balance sheets of the Company, unless the reserves are expected to be paid in cash during the next twelve months, in which case they are classified as current liabilities. The Company also records interest and penalties accrued in relation to uncertain tax benefits as a component of income tax expense. While the Company believes it has identified all reasonable exposures and the reserve it has established is appropriate under the circumstances, it is possible that additional exposures exist and that exposures may be settled at amounts different than the amounts reserved. It is also possible that changes in facts and circumstances could cause the Company to either materially increase or reduce the carrying amount of its tax reserve. F-14 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The Company continues to indefinitely reinvest substantially all of its foreign earnings unless there is a manner under which to remit the earnings without a material tax cost. The current provisional analysis indicates that the Company has sufficient U.S. liquidity, including borrowing capacity, to fund foreseeable U.S. cash needs, including potential repayment of the 2025 Notes, without requiring the repatriation of foreign cash. 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 and changes in tax laws. Refer to Note 12. Income Taxes for more information. REVENUE RECOGNITION Revenue is recognized upon the transfer of control of promised products or services to the customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services in accordance with FASB Topic 606, Revenue from Contracts with Customers (“ASC 606”) . Total revenue, net, includes product sales, product royalties and other revenues, such as fees received from services. For products shipped with FOB shipping point terms, the control of the product passes to the customer at the time of shipment. For shipments in which the control of the product is transferred when the customer receives the product, the Company recognizes revenue upon receipt by the customer. Certain products that the Company produces for private label customers have no alternative use and the Company has a right of payment for performance to date. Revenues from those products are recognized over the period that the Company manufactures these products, which is typically one month to three months . The Company uses the input method to measure the manufacturing activities completed to date, which depicts the progress of the Company’s performance obligation of transferring control of goods being manufactured for private label customers. A portion of the Company’s product revenue is generated from consigned inventory maintained at hospitals and distributors, and also from inventory physically held by field sales representatives. For these types of products sales, the Company retains control until the product has been used or implanted, at which time revenue is recognized. Revenues from sale of products and services are evidenced by either a contract with the customer or a valid purchase order and an invoice which includes all relevant terms of sale. For product sales, invoices are generally issued upon the transfer of control (or upon the completion of the manufacturing in the case of the private label transactions recognized over time) and are typically payable 30 days after the invoice date. The Company performs a review of each specific customer’s creditworthiness and ability to pay prior to acceptance as a customer. Further, the Company performs periodic reviews of its customers’ creditworthiness prospectively. The Company also maintains a provision for estimated returns and allowances in the same period that the related revenue is recorded. This reserve is based upon an analysis of actual credit memos issued for pricing issues or returned goods over an extended period, as well as assumptions about outstanding accounts receivable and judgment in interpreting the data. Refer to Note 3. Revenue from Contracts with Customers for more information. RESEARCH AND DEVELOPMENT Research and development costs, including salaries, depreciation, consultant and other external fees, and facility costs directly attributable to research and development activities, are expensed in the period in which they are incurred. EMPLOYEE TERMINATION BENEFITS The Company does not have a written severance plan, but has a history of providing benefits for employees in the case of involuntary termination. In situations outside the U.S., there are minimum statutory termination benefits requirements by country that must be paid to the affected employees. The Company records employee severance costs associated with these restructuring activities in accordance with the authoritative guidance for non-retirement post-employment benefits. Charges associated with these activities are recorded when the payment of benefits is probable and can be reasonably estimated. In situations where the Company pays out termination benefits in excess of statutory minimum amounts based on management’s discretion, the Company records these termination costs once communication is made to the affected employees. The timing of the recognition of charges for employee severance costs other than minimum statutory benefits depends on whether the affected employees are required to render service beyond their legal notification period in order to receive the benefits. If affected employees are required to render service beyond their legal notification period, charges are recognized over the future service period. Otherwise, charges are recognized when management has approved a specific plan and employee communication requirements have been met. F-15 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The Company incurred employee termination costs on restructuring activities in the consolidated statement of operations for the years ended December 31, 2024 and 2023. The following table summarizes the restructuring related accrual balances included within accrued expenses and other current liabilities in the consolidated balance sheet for the years ended December 31, 2024 and 2023. Years Ended December 31, (Dollars in thousands) 2024 2023 Balance, beginning of the year $ 2,113 $ 5,107 Charges: Cost of Goods Sold 377 — Research and development 602 — Selling, general and administrative 3,968 1,048 Payments and other adjustments ( 1,909 ) ( 4,042 ) Balance, end of the year $ 5,151 $ 2,113 STOCK-BASED COMPENSATION 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. The Company recognizes compensation expense for stock option awards, restricted stock awards, performance stock awards and contract stock awards over the requisite service period of the award. All excess tax benefits and tax deficiencies from stock-based compensation are included in the provision for income taxes in the consolidated statement of operations. Refer to Note 9. Stock Based Compensation for more information. RETIREMENT BENEFIT PLANS Defined Benefit Pension Plans The Company maintains defined benefit pension plans that cover certain employees in France, Japan, Germany, India, 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. Retirement benefit plan assumptions are reassessed on an annual basis or more frequently if changes in circumstances indicate a re-evaluation of assumptions are required. The key benefit plan assumptions are the discount rate and expected rate of return on plan assets. The discount rate is based on average rates on bonds that matched the expected cash outflows of the benefit plans. The expected rate of return is based on historical and expected returns on the various categories of plan assets. The Company uses the corridor approach in measuring the amount of net periodic benefit pension cost to recognize each period. The corridor approach defers all actuarial gains and losses resulting from variances between actual results and actuarial assumptions. Those unrecognized gains and losses are amortized when the net gains and losses exceed 10% of the greater of the market-related value of plan assets or the projected benefit obligation at the beginning of the year. 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 The Company maintains a deferred compensation plan in which 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. Refer to Note 10. Retirement Benefit Plans for more information. CONCENTRATION OF CREDIT RISK Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, which are held at major financial institutions, investment-grade marketable debt securities, and trade receivables. F-16 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The Company’s products are sold on an uncollateralized basis and on credit terms based upon a credit risk assessment of each customer. 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. No ne of the Company’s customers accounted for 10 % or more of the consolidated net sales during the years ended December 31, 2024, 2023, and 2022 . RECENT ACCOUNTING PRONOUNCEMENTS In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , and, in January 2021, subsequently amended the initial guidance in ASU 2021-01, Reference Rate Reform (Topic 848): Scope (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Inter-Bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In December 2022, the FASB issued ASU 2022-06 , Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 , which delayed the effective date from December 31, 2022 to December 31, 2024. The Alternative Reference Rates Committee, a group of private-market participants convened by the U.S. Federal Reserve Board and the New York Federal Reserve, has recommended the use of the Secured Overnight Financing Rate (“SOFR”) as a more robust reference rate alternative to LIBOR. On March 24, 2023, the Company entered into the seventh amendment and restatement (the “March 2023 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. In connection with the March 2023 Amendment, the Company replaced all LIBOR-based contracts with SOFR, which is calculated based on overnight transactions under repurchase agreements backed by Treasury securities. In addition, on April 17, 2023 the Company entered into an amendment (the “April 2023 Amendment”) of the Securitization Facility (as defined below) and amended the interest rate from LIBOR to a SOFR-indexed rate. (See Note 5. Debt ). In March 2023, the Company entered into a basis swap where the Company receives Term SOFR and pays daily compounded SOFR to convert the portfolio of swaps from daily compounded SOFR to term SOFR. The Company has elected to adopt the optional expedient under Topic 848, which will allow the interest rate swap hedging relationship to continue, without de-designation, due to the change in the indexed rate from LIBOR to SOFR. The adoption of this guidance did not have a material impact on the consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) which enhances the transparency of income tax disclosures by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company does not plan to early adopt and is currently evaluating ASU 2023-09 to determine its impact on the Company’s future disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 as of December 31, 2024 on a retrospective basis to all prior periods presented. The adoption did not have a material impact on the Company’s consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires additional disclosure of the nature of expenses included in the income statement. The standard requires disclosures about specific types of expenses included in the expense captions presented in the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The requirements should be applied on a prospective basis while retrospective application is permitted. We are currently evaluating the impact that the adoption of this guidance will have on our disclosures. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest during the years ended December 31, 2024, 2023, and 2022 was $ 64.4 million (net of $ 4.5 million that was capitalized into construction in progress), $ 44.3 million (net of $ 2.4 million that was capitalized into construction in progress), and $ 42.2 million (net of $ 1.4 million that was capitalized into construction in progress), respectively. Cash paid for income taxes, net of refunds, for the years ended December 31, 2024, 2023, and 2022 were $ 22.7 million, $ 23.6 million, and $ 35.9 million, respectively. F-17 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) NON-CASH INVESTING AND FINANCING ACTIVITIES Property and equipment purchases included in liabilities at December 31, 2024, 2023, and 2022 were $ 12.3 million, $ 10.0 million, and $ 10.5 million, respectively. Definite-lived intangible asset purchases included in liabilities at December 31, 2024 were $ 32.7 million. 3. REVENUES FROM CONTRACTS WITH CUSTOMERS Summary of Accounting Policies on Revenue Recognition Revenue is recognized upon the transfer of control of promised products or services to the customers in an amount that reflects the consideration the Company expects to receive in exchange for those products and services. Performance Obligations The Company’s performance obligations consist mainly of transferring control of goods and services identified in the contracts, purchase orders, or invoices. The Company has no significant multi-element contracts with customers. Significant Estimates Usage-based royalties and licenses are estimated based on the provisions of contracts with customers and recognized in the same period that the royalty-based products are sold by the Company’s strategic partners. The Company estimates and recognizes royalty revenue based upon communication with licensees, historical information, and expected sales trends. Differences between actual reported licensee sales and those that were estimated are adjusted in the period in which they become known, which is typically the following quarter. Historically, such adjustments have not been significant. The Company estimates returns, price concessions, and discount allowances using the expected value method based on historical trends and other known factors. Rebate allowances are estimated using the most likely method based on each customer contract. The Company’s return policy, as set forth in its product catalogs and sales invoices, requires review and authorization in advance prior to the return of product. Upon the authorization, a credit will be issued for the goods returned within a set amount of days from the shipment, which is generally 90 days. The Company disregards the effects of a financing component if the Company expects, at contract inception, that the period between the transfer and customer payment for the goods or services will be one year or less. 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. Contract Assets and Liabilities Revenues recognized from the Company’s private label business that are not invoiced to the customers as a result of recognizing revenue over time are recorded as a contract asset included in the prepaid expenses and other current assets account in the consolidated balance sheet. Upon invoicing to the customer, the balance is recorded in trade receivable, net in the consolidated balance sheet. Other operating revenues may include fees received under service agreements. Non-refundable fees received under multiple-period service agreements are recognized as revenue as the Company satisfies the performance obligations to the other party. A portion of the transaction price allocated to the performance obligations to be satisfied in the future periods is recognized as a contract liability. F-18 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following table summarized the changes in the contract asset and liability balances for the year ended December 31, 2024: Dollars in thousands Total Contract Asset Contract asset, January 1, 2024 $ 9,233 Transferred to trade receivable from contract asset included in beginning of the year contract asset ( 9,233 ) Contract asset, net of transferred to trade receivables on contracts during the period 6,146 Contract asset, December 31, 2024 $ 6,146 Contract Liability Contract liability, January 1, 2024 $ 16,252 Recognition of revenue included in beginning of year contract liability ( 10,307 ) Contract liability, acquired with Acclarent 3,984 Contract liability, net of revenue recognized on contracts during the period 9,874 Foreign currency translation ( 134 ) Contract liability, December 31, 2024 $ 19,669 At December 31, 2024, the short-term portion of the contract liability of $ 10.5 million and the long-term portion of $ 9.2 million is included in current liabilities and other liabilities, respectively, in the consolidated balance sheet. As of December 31, 2024, the Company is expected to recognize revenue from unsatisfied or partially satisfied performance obligations of approximately $ 10.5 million in 2025, $ 5.1 million in 2026, $ 2.9 million in 2027, $ 0.8 million in 2028, $ 0.2 million in 2029, and $ 0.1 million thereafter. Shipping and Handling Fees The Company elected to account for shipping and handling activities as a fulfillment cost rather than a separate performance obligation. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of underlying products is transferred to the customer. The related shipping and freight charges incurred by the Company are included in the cost of goods sold. Product Warranties Certain of the Company’s medical devices, including monitoring, ENT navigation and neurosurgical systems, are designed to operate over long periods of time. These products are sold with warranties which may extend for up to two years from the date of purchase. The warranties are not considered a separate performance obligation. The Company estimates its product warranties using the expected value method based on historical trends and other known factors. The Company includes them in accrued expenses and other current liabilities in the consolidated balance sheet. Taxes Collected from Customers The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer. F-19 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Disaggregated Revenue The following table presents revenues disaggregated by the major sources of revenues for years-ended December 31, 2024, 2023, and 2022 (dollar amounts in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Neurosurgery $ 803,816 $ 818,101 $ 794,017 Instruments 204,177 203,617 192,679 ENT (1)(2) 135,643 37,275 32,868 Total Codman Specialty Surgical 1,143,636 1,058,993 1,019,564 Wound Reconstruction and Care (3)(4) 350,565 373,986 406,689 Private Label 116,326 108,594 131,413 Total Tissue Technologies 466,891 482,580 538,102 Total revenue $ 1,610,527 $ 1,541,573 $ 1,557,666 (1) See Note 4. Acquisitions and Divestitures for details surrounding the acquisition of Acclarent on April 1, 2024. (2) Prior period revenues included within our instruments business have been reclassified under the ENT business. (3) See Note 4. Acquisitions and Divestitures for details surrounding the SIA acquisition on December 7, 2022. (4) See Note 4. Acquisitions and Divestitures for details surrounding the sale of the Company’s non-core traditional wound care (“TWC”) business on August 31, 2022. Note 16. Segment and Geographic Information , for details of revenues based on the location of the customer. 4. ACQUISITIONS AND DIVESTITURES Durepair® Acquisition On October 2, 2024, the Company completed the acquisition of the product rights for the Durepair ® Regeneration Matrix (“Durepair”), a non-synthetic dura substitute for repair of the dura mater during neurosurgical procedures, from Medtronic plc for total cash consideration of $ 45.0 million. The Company made a cash payment of $ 10.0 million upon the closing of the acquisition and will make additional cash payments of $ 15.0 million upon the first anniversary of the acquisition and $ 20.0 million upon the second anniversary of the acquisition. The additional cash payments to be paid in October 2025 and October 2026 were included at their present values in accrued expenses and other current liabilities and other liabilities, respectively, as of December 31, 2024. The acquisition of the product rights for Durepair, which consist of certain patents and trademarks, regulatory approvals, and other records, has been accounted for as an asset acquisition in accordance with ASC 805 as the acquisition does not include an assembled workforce and substantially all of the fair value of the assets acquired is concentrated in a single identifiable intangible asset. Acclarent, Inc. Acquisition On April 1, 2024, the Company completed the acquisition of all of the outstanding capital stock of Acclarent, Inc. (“Acclarent”), a developer and marketer of medical devices used in ENT procedures, from Ethicon, Inc., a subsidiary of Johnson & Johnson, for approximately $ 282.0 million in cash, subject to customary adjustments set forth in the purchase agreement related to working capital balances transferred to the Company. In September 2024, the Company finalized the working capital adjustment in the amount of $ 4.2 million, which resulted in a reduction to goodwill. This adjustment has been settled during the three months ending December 31, 2024. During the quarter ended December 31, 2024, the Company also recognized a measurement period adjustment to recognize deferred tax liabilities of $ 1.1 million with a corresponding increase to goodwill as a result of a change to the estimated deferred tax rate applied and the book-to-tax difference associated with fixed assets acquired. The addition of Acclarent’s ENT product portfolio, including sinus balloon dilation, eustachian tube balloon dilation, and surgical navigation systems technologies, and dedicated salesforce will enhance the Company’s position in the ENT specialty device market. Acclarent’s results of operations have been reported in the Company’s Codman Specialty Surgical reportable segment from the date of acquisition. The Company recorded revenue from Acclarent of approximately $ 95.0 million, in the consolidated statements of operations and comprehensive income for the year ended December 31, 2024. The net income or loss attributable to this acquisition cannot be identified on a stand-alone basis because it is in the process of being integrated into the Company’s operations. F-20 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Assets Acquired and Liabilities Assumed at Fair Value The Acclarent acquisition has been accounted for using the acquisition method of accounting in accordance with ASC 805. This method requires that assets acquired and liabilities assumed in a business combination are recognized at their fair values as of the acquisition date. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date: Dollars in thousands Estimated Fair Value Estimated Useful Life Current assets: Cash $ — Trade accounts receivable, net of allowances of $ 3,885 23,716 Inventories, net 20,294 Prepaid expenses 273 Other current assets 476 Total current assets $ 44,759 Property, plant and equipment, net 7,716 Right of use asset - operating leases 989 Intangible assets, net Completed technology 202,000 12 years Trademarks/brand names 3,000 5 years All other 17,000 4 years Goodwill 62,482 Deferred tax assets 6,895 Total assets acquired $ 344,841 Current liabilities: Accounts payable, trade $ 3,989 Contract liabilities 3,984 Accrued compensation 1,037 Accrued expenses and other current liabilities 2,278 Current portion of lease liability - operating leases 365 Total current liabilities $ 11,653 Lease liability - operating leases 624 Deferred tax liabilities 54,753 Total liabilities assumed $ 67,030 Net assets acquired $ 277,811 The carrying value of trade accounts receivable, prepaid expenses, other current assets, accounts payable, contract liabilities, accrued compensation, accrued expenses and other current liabilities, as well as certain other current and non-current assets and liabilities, generally represented the fair value at the date of acquisition. Intangible Assets The estimated fair value of the intangible assets acquired was determined using the multi-period, excess earnings method of the income approach, which estimates value based on the present value of future economic benefits attributable to the intangible assets. The significant assumptions used in developing the valuation included the estimated annual net cash flows including application of revenue growth rates, cost of sales, the discount rate that appropriately reflects the risk inherent in each future cash flow stream, obsolescence rate, and an assessment of the asset’s life cycle, as well as other factors. The assumptions used in the financial forecasts were based on historical data, supplemented by current and anticipated growth rates, management plans, and market-comparable information. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. The intangible assets acquired have a weighted average useful life of 11 years. The Company used a discount rate of 12.2 % to arrive at the present value for the acquired intangible assets to reflect the rate of return a market participant would expect to earn and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results. F-21 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Goodwill Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected synergies of the combined company and assembled workforce. Goodwill has been allocated to the Codman Specialty Surgical segment, as shown in Note 7. Goodwill and Other Intangibles . Goodwill recognized as a result of this acquisition is non-deductible for income tax purposes. Deferred Tax Liabilities Deferred tax liabilities result from identifiable intangible assets’ fair value adjustments. These adjustments create excess book basis over tax basis which is tax-effected by the statutory tax rates of applicable jurisdictions. Pro Forma Results (unaudited) The Company’s unaudited pro forma revenues for the years ended December 31, 2024 and 2023, giving effect as if Acclarent had been acquired as of January 1, 2023, were $ 1,638.1 million and $ 1,658.0 million, respectively. The calculation of unaudited pro forma net income for the years ended December 31, 2024 and 2023 is not practicable because of complexities associated with its hypothetical calculation due to the allocation of certain costs to Acclarent from Johnson & Johnson. The unaudited pro forma revenue is presented for illustrative purposes only and does not indicate the actual financial results of the Company if the acquisition of Acclarent in the current year had been completed on January 1, 2023, nor is it indicative of the results of operations in future periods. Surgical Innovation Associates, Inc. Acquisition On December 6, 2022, the Company completed its acquisition of Surgical Innovation Associates, Inc. (“SIA”) for an acquisition purchase price of $ 51.5 million (the “SIA Acquisition”) plus contingent consideration of up to $ 90.0 million. In addition to the purchase price, the acquisition includes two separate contingent consideration payments, which are dependent on (1) achieving certain revenue-based performance milestones in 2023, 2024, and 2025 (up to $ 50.0 million in additional payments), as well as (2) the approval by the United States Food and Drug Administration (the “FDA”) of the Premarket Approval (“PMA”) application for DuraSorb for certain uses by certain timing targets (up to $ 40.0 million in additional payments). SIA’s core technology, DuraSorb, is a fully resorbable scaffold of a globally accepted polymer, which is cleared for use in hernia repair, abdominal wall, and other soft tissue reinforcement. DuraSorb sales are reported within Integra’s Tissue Technologies segment. Assets Acquired and Liabilities Assumed at Fair Value The SIA Acquisition has been accounted for using the acquisition method of accounting. 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. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date: Dollars in thousands Final Valuation Weighted Average Life Current assets: Cash $ 4,438 Trade accounts receivable, net 1,551 Inventories, net 2,900 Prepaid expenses and other current assets 1,654 Total current assets $ 10,543 Intangible assets, net 75,000 14 years Goodwill 41,380 Total assets acquired $ 126,923 Current liabilities: Accounts payable and accrued expenses $ 2,044 Total current liabilities $ 2,044 Deferred tax liabilities 11,325 Contingent consideration 57,607 Total liabilities assumed 70,976 Net assets acquired $ 55,947 F-22 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Developed Technology The estimated fair value of the developed technology was determined using the multi-period excess earnings method of the income approach, which estimates value based on the present value of future economic benefits. Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each product including net revenues, cost of sales, R&D costs, selling and marketing costs, working capital, and contributory asset charges, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of the asset’s life cycle, and competitive trends impacting the asset and the cash flow stream. The Company used a discount rate of 18.0 % to arrive at the present value for the acquired intangible assets to reflect the rate of return a market participant would expect to earn and incremental commercial uncertainty in the cash flow projections. No assurances can be given that the underlying assumptions used to prepare the discounted cash flow analysis will not change. For these and other reasons, actual results may vary significantly from estimated results. Goodwill The Company allocated goodwill related to the SIA Acquisition to the 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. A key factor that contributes to the recognition of goodwill, and a driver for the Company’s acquisition of SIA, is the attractive growth opportunities presented by the surgical matrix business in the breast reconstruction market. Goodwill recognized as a result of this acquisition is non-deductible for income tax purposes. Contingent Consideration The Company determines the acquisition date fair value of contingent consideration obligations based on a probability-weighted income approach derived from revenue estimates and a probability assessment with respect to the likelihood of achieving contingent obligations. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined using the using the fair value hierarchy described in ASC 820. The resulting most likely payouts are discounted using an appropriate effective annual interest rate. At each reporting date, the contingent consideration obligation will be revalued to estimated fair value and changes in fair value will be reflected as income or expense in the consolidated statement of operations. Changes in the fair value of the contingent considerations may result from changes in discount periods and rates and changes in the timing and amount of revenue estimates. Changes in assumptions utilized in the contingent consideration fair value estimates could result in an increase in the contingent consideration obligation and a corresponding charge to operating results. As part of the acquisition, the Company is required to pay to the shareholders of SIA up to $ 90.0 million, dependent upon (1) achieving certain revenue-based performance milestones in 2023, 2024, and 2025 (up to $ 50.0 million in additional payments), as well as (2) the approval by the FDA of the PMA for DuraSorb for certain uses by certain timing targets (up to $ 40.0 million in additional payments). In the second quarter of 2024, the Company paid out $ 12.4 million related to the 2023 performance year. The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specific milestone for the revenue-based milestone. The Company used probabilities of achieving the conditions to calculate the fair value of the contingent consideration for the PMA approval milestone. See Note 15. Commitments and Contingencies to the Notes to Consolidated Financial Statements for further details. Deferred Tax Liabilities Deferred tax liabilities result from identifiable intangible assets’ fair value adjustments. These adjustments create excess book basis over tax basis which is tax-effected by the statutory tax rates of applicable jurisdictions. Sale of non-core traditional wound care business On August 31, 2022, the Company completed its sale of its non-core traditional wound care (“TWC”) business to Gentell, LLC (“Gentell”) for $ 28.8 million, which consists of $ 27.8 million in cash plus $ 1.0 million in contingent consideration which may be received upon achieving certain revenue-based performance milestones two years after the closing date. The proceeds from the sale of the TWC business of $ 27.8 million is presented in the consolidated statement of cash flows net of cash transferred of $ 3.5 million and other transaction fees. The transaction included the sale of the Company’s TWC products, such as sponges, gauze and conforming bandages, and certain advanced wound care dressings, such as supportive, calcium alginate, hydrogel, and foam dressings. F-23 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The divestiture did not represent a strategic shift that had 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 of the TWC business to the Company’s Tissue Technologies reportable business segment. In connection with the sale, the Company recognized $ 0.6 million as a gain from the sale of the business in the consolidated statement of operations for the year ended December 31, 2022. The transaction is subject to final working capital adjustments, which are pending finalization between the parties. In addition to the purchase and sale agreement, the Company also entered into a contract manufacturing agreement with Gentell. Under the terms of the agreement, Gentell received inventory, equipment, and tooling to manufacture certain MediHoney® and TCC-EZ® products on behalf of the Company. 5. DEBT Amendment to the Seventh Amended and Restated Senior Credit Agreement On March 24, 2023, the Company entered into the seventh amendment and restatement (the “March 2023 Amendment”) of the Senior Credit Facility (the “Senior Credit Facility”) with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent. The March 2023 Amendment extended the maturity date to March 24, 2028, amended the contractual repayments of the term loan component, and amended the interest rate from LIBOR to SOFR-indexed interest. The Company continues to have the ability to borrow an aggregate principal amount of up to approximately $ 2.1 billion through the following facilities: (i) a $ 775.0 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. The terms of the Senior Credit Facility limit the amount of dividends we may pay. The Company’s maximum Consolidated Total Leverage Ratio (as defined in the March 2023 Amendment) in the financial covenants is outlined below. Concurrent with the Durepair acquisition (see Note 4. Acquisitions and Divestitures), in accordance with the terms of the March 2023 Amendment, the Company elected to increase the maximum Consolidated Total Leverage Ratio to 5.00 from the fiscal quarter ending December 31, 2024 through the fiscal quarter ending September 30, 2025. Fiscal Quarter Ending Maximum Consolidated Total Leverage Ratio March 31, 2023 through September 30, 2024 4.50 to 1.00 December 31, 2024 through September 30, 2025 5.00 to 1.00 December 31, 2025 through June 30, 2026 4.25 to 1.00 September 30, 2026 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: i. Term SOFR in effect from time to time plus 0.10 % plus the applicable rate (ranging from 1.00 % to 1.75 %), or ii. the highest of: 1. the weighted average overnight Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50 % 2. the prime lending rate of Bank of America, N.A. or 3. the one-month Term SOFR plus 1.00 % The applicable rates are based on the Company’s Consolidated Total Leverage Ratio (defined, as of any date of determination, as the ratio of (a) Consolidated Funded Indebtedness as of such date (as defined in the Seventh Amended and Restated Credit Agreement (the “Credit Agreement”)) less cash that is not subject to any restriction on the use or investment thereof to (b) Consolidated EBITDA (as defined by the Credit Agreement)), for the period of four consecutive fiscal quarters ending on such date. 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 component of the Senior 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, 2024, the Company was in compliance with all such covenants. The Company capitalized $ 7.6 million in deferred financing costs in connection with the March 2023 Amendment and wrote off $ 0.2 million of previously capitalized financing costs during the first quarter of 2023. F-24 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) At December 31, 2024 and 2023 there wa s $ 365.0 million and $ 70.0 million, respectively, ou tstanding under the revolving credit facility component of the Senior Credit Facility. At December 31, 2024 and 2023, there was $ 760.5 million and $ 775.0 million outstanding under the term loan component of the Senior Credit Facility. At December 31, 2024 and 2023, the weighted average interest rate of both the revolving credit facility component and term loan component of the Senior Credit Facility was 6.0 % and 6.8 %, respectively. As of December 31, 2024 and 2023 there was $ 33.9 million and $ 14.5 million, respectively, of the term loan component of the Senior Credit Facility classified as current on the consolidated balance sheet. The fair value of the term loan and revolving portion of the Senior Credit Facility at December 31, 2024 was $ 751.1 million, and $ 360.1 million, respectively. The fair value was 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 i nputs that reflect unadjusted quoted prices for identical assets or liabilities. Letters of credit outstanding as of December 31, 2024 and 2023 totaled $ 1.7 million. There were no amounts drawn as of December 31, 2024. Contractual repayments of the Term Loan component of the Senior Credit Facility are due as follows: Year Ended December 31, 2024 Principal Repayment Dollars in thousands 2025 $ 33,906 2026 38,750 2027 53,281 2028 634,532 $ 760,469 Future interest payments on the term loan component of the Senior Credit Facility based on current interest rates are expected to approximate $ 44.7 million in 2025, $ 42.4 million in 2026, $ 39.9 million in 2027, and $ 8.7 million in 2028. Interest is calculated on the term loan portion of the Senior Credit Facility based on SOFR plus the certain amounts set forth in the Credit Agreement. As the revolving credit facility and Securitization Facility (defined below) can be repaid at any time, no interest has been included in the calculation. Any outstanding borrowings on the revolving credit facility component of the Senior Credit Facility are due on March 24, 2028. Convertible Senior Notes On February 7, 2020, the Company issued $ 575.0 million aggregate principal amount of its 0.5 % Convertible Senior Notes due 2025 (the “2025 Notes”) pursuant to an indenture, dated as of February 7, 2020 (the “Original Indenture”), between the Company and Citibank, N.A., as trustee. 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 2025 Notes. In connection with this offering, the Company capitalized $ 13.2 million of financing fees. The 2025 Notes are senior, unsecured obligations of the Company, and are convertible into cash and shares of its common stock based on an 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 $1,000 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 specified in the Original Indenture; (3) if the Company calls the notes for optional redemption as described in the Original Indenture; or (4) if specified corporate transactions occur. As of December 31, 2024, none of these conditions existed and the 2025 Notes are classified as current convertible securities on the consolidated balance sheet, as they are due within one year. On December 9, 2020, the Company entered into the first supplemental indenture to the Original Indenture (the “First Supplemental Indenture” and, together with Original Indenture, the “Indenture”), pursuant to which 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 (as defined in the First Supplemental Indenture) for a conversion of the 2025 Notes, the Specified Dollar Amount (as defined in the First Supplemental Indenture) that will be settled in cash per $1,000 principal amount of the 2025 Notes shall be no lower than $ 1,000 . F-25 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Holders of the 2025 Notes will have the right to require the Company to repurchase for cash all or a portion of their 2025 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). The Company will also be required to increase the conversion rate for holders who convert their 2025 Notes in connection with certain Fundamental Changes (as defined in the Original Indenture) 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. At December 31, 2024 , the carrying amount of the liability of the 2025 Notes w as $ 575.0 million . The fair value of the 2025 Notes at December 31, 2024 was $ 555.6 million . Factors that the Company considered when estimating the fair value of the 2025 Notes included recent quoted market prices or dealer quotes. The 2025 Notes are valued based on Level 1 measurements in the fair value hierarchy. Level 1 inputs represent quoted prices in active markets for identical assets or liabilities. Securitization Facility In 2018, the Company entered into an accounts receivable securitization facility (the “Securitization Facility”) under which accounts receivable of certain domestic subsidiaries are sold on a non-recourse basis to a special purpose entity (“SPE”), which is a bankruptcy-remote, consolidated subsidiary of the Company. Accordingly, the assets of the SPE are not available to satisfy the obligations of the Company or any of its subsidiaries. From time to time, the SPE may finance such accounts receivable with a revolving loan facility secured by a pledge of such accounts receivable. The amount of outstanding borrowings on the Securitization Facility at any one time is limited to $ 150.0 million. The Securitization Facility Agreement (“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, 2024, the Company was in compliance with the covenants and none of the termination events had occurred. On December 15, 2023, the Company entered into an amendment (the “December 2023 Amendment”) of the Securitization Facility which extended the maturity date from May 28, 2024 to December 15, 2026. The Company incurred approximately $ 0.3 million of new issuance costs associated with the December 2023 Amendment which will be amortized over 3 years, the length of the Securitization Agreement as amended by the December 2023 Amendment. Due to the increase in borrowing capacity, the remaining $ 0.1 million of unamortized costs from the previous agreement will also be amortized over the length of the amended agreement, three years . In addition, on April 17, 2023 the Company entered into an amendment (the “April 2023 Amendment”) of the Securitization Facility and amended the interest rate from LIBOR to SOFR-indexed rate. The December 2023 Amendment and April 2023 Amendment did not increase the Company’s total indebtedness. At December 31, 2024 and 2023, the Company had $ 108.1 million and $ 89.2 million, respectively, of outstanding borrowings under its Securitization Facility at an interest rate of 5.4 % and 6.4 %, respectively. The fair value of the outstanding borrowing of the Securitization Facility at December 31, 2024 was $ 105.8 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 i nputs that reflect unadjusted quoted prices for identical assets or liabilities. F-26 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Estimated Fair Value of Debt Measurements The carrying amounts and the estimated fair values of debt as of December 31, 2024 and 2023 are as follows: December 31, 2024 December 31, 2023 Fair Value Measurement Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Dollars in thousands Senior credit facility - term loan Level 2 $ 760,469 $ 751,143 $ 775,000 $ 762,869 Senior credit facility - revolving component Level 2 365,000 360,144 70,000 68,902 2025 Notes Level 1 575,000 555,594 575,000 541,219 Securitization Level 2 108,100 105,831 89,200 87,069 Subtotal $ 1,808,569 $ 1,772,712 $ 1,509,200 $ 1,460,059 Debt issuance costs ( 5,476 ) ( 9,651 ) Total debt $ 1,803,093 $ 1,772,712 $ 1,499,549 $ 1,460,059 6. DERIVATIVE INSTRUMENTS Interest Rate Hedging The Company’s interest rate risk relates to U.S. dollar denominated variable interest rate borrowings. 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 the Company’s expected SOFR-indexed borrowings. In March 2023, the Company entered into a basis swap where the Company receives Term SOFR and pays daily compounded SOFR to convert the portfolio of swaps from daily compounded SOFR to Term SOFR. The Company held the following interest rate swaps as of December 31, 2024 and 2023 (dollar amounts in thousands): December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value Asset (Liability) 1-month Term SOFR Loan $ — $ 150,000 December 13, 2017 July 1, 2019 June 28, 2024 2.423 % $ — $ 2,105 1-month Term SOFR Loan — 200,000 December 13, 2017 January 1, 2018 December 31, 2024 2.313 % — 4,978 1-month Term SOFR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.220 % 421 1,349 1-month Term SOFR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.199 % 502 1,312 1-month Term SOFR Loan 75,000 75,000 October 10, 2018 July 1, 2020 June 30, 2025 3.209 % 403 1,346 1-month Term SOFR Loan 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.885 % 3,406 3,015 1-month Term SOFR Loan 100,000 100,000 December 18, 2018 December 30, 2022 December 31, 2027 2.867 % 3,507 3,052 1-month Term SOFR Loan 575,000 575,000 December 15, 2020 July 31, 2025 December 31, 2027 1.415 % 34,537 22,965 1-month Term SOFR Loan 125,000 125,000 December 15, 2020 July 1, 2025 December 31, 2027 1.404 % 7,848 5,263 Basis Swap (1) — — March 31, 2023 March 24, 2023 December 31, 2027 N/A ( 1,829 ) 0 ( 1,829 ) $ 1,125,000 $ 1,475,000 $ 48,795 $ 43,556 (1) The notional of the basis swap amortizes to match the total notional of the interest rate swap portfolio over time The interest rate 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 accumulated other comprehensive income (“AOCI”). For the years ended December 31, 2024 and 2023, the Company recorded gains of $ 22.7 million and $ 4.9 million, respectively, in AOCI related to the change in fair value of the interest rate swaps. F-27 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) For the years ended December 31, 2024 and 2023, the Company recorded gains of $ 17.5 million and $ 18.1 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the interest rate swaps. The estimated gain that is expected to be reclassified to interest income from AOCI as of December 31, 2024 within the next twelve months is $ 11.6 million. The Company has designated these derivative instruments as cash flow hedges. The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in AOCI, net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings. 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 AOCI to interest expense at that time. Foreign Currency Hedging From time to time, the Company enters into foreign currency hedge contracts intended to protect the U.S. dollar value of certain forecasted foreign currency denominated transactions. The Company assesses the effectiveness of the contracts that are designated as hedging instruments. The changes in fair value of foreign currency cash flow hedges are recorded in AOCI, net of tax. Those amounts are subsequently reclassified to earnings from AOCI as impacted by the hedged item when the hedged item affects earnings. 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, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities. The success of the Company’s hedging anticipated currency exchange gains or losses to the extent that there are differences 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. Cross-Currency Rate Swaps The objective of the 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 (“CHFs”) and receive interest in U.S. dollars. Upon the maturity of these contracts, the Company will pay the principal amount of the loans in CHF and receive U.S. dollars from the counterparties. On September 22, 2023, the Company amended the CHF-denominated intercompany loan to partially settle CHF 20.0 million and extend the termination date to September 2024 and as a result, the Company terminated the cross-currency swap designated as cash flow hedge of an intercompany loan with aggregate notional amount of $ 48.5 million. Simultaneously, the Company entered into a cross-currency swap agreement to hedge a notional amount of CHF 28.5 million equivalent to $ 31.5 million of this amended intercompany loan into U.S. dollars. Based on the closing exchange rates, the loss upon settlement was approximately $ 2.3 million which was offset by the gain on the settlement of the intercompany loan. 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. dollars. 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 intercompany loan requires quarterly payments of CHF 5.8 million plus accrued interest. As a result, the aggregate notional amount of the related cross-currency swaps will decrease by a corresponding amount. On February 19, 2025, the Company amended the CHF-denominated intercompany loan to extend the maturity to December 2030. Concurrently, the Company amended the cross-currency swap agreement, with a notional amount of $ 368.4 million, equivalent to CHF 328.1 million, to extend the maturity to December 2030. F-28 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The Company held the following cross-currency rate swaps as of December 31, 2024 and 2023 (dollar amounts in thousands): December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value Asset (Liability) Pay CHF December 21, 2020 December 22, 2025 3.00 % CHF 328,136 351,137 $ ( 4,367 ) $ ( 38,324 ) Receive U.S.$ 3.98 % $ 368,362 394,183 Pay CHF September 22, 2023 September 23, 2024 2.40 % CHF — 28,500 — ( 2,348 ) Receive U.S.$ 6.27 % $ — 31,457 Total $ ( 4,367 ) $ ( 40,672 ) 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 AOCI. For the years ended December 31, 2024 and 2023 the Company recorded a gain of $ 41.0 million and a loss of $ 27.4 million, respectively, in AOCI related to change in fair value of the cross-currency swaps. For the years ended December 31, 2024 and 2023, the Company recorded a gain of $ 32.2 million and a loss of $ 37.4 million in other income, net for the change in fair value related to the foreign currency rate translation to offset the gains and losses, respectively, recognized on the intercompany loans. For the years ended December 31, 2024 and 2023, the Company recorded gains of $ 4.7 million and $ 5.5 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 loss that is expected to be reclassified to other income (expense), net from AOCI as of December 31, 2024 within the next twelve months is $ 4.4 million. As of December 31, 2024, the Company does not expect any gains or losses will be reclassified into earnings because the original forecasted transactions will not occur. Net Investment Hedges The Company manages certain foreign exchange risks through a variety of strategies, including hedging. 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. In May 2024, the Company entered into a cross-currency swap agreement with a notional amount of CHF 68.5 million, equivalent to $ 75.0 million, where the Company agreed with third-parties to sell CHF in exchange for U.S. dollars at a specified rate at the maturity of the contract. The new cross-currency swap agreement was designated as a net investment hedge to partially offset the effects of foreign currency on foreign subsidiaries. In November 2023, May 2022, and October 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. On February 21, 2025, the Company entered into a cross-currency swap agreement with a notional amount of CHF 67.8 million, equivalent to $ 75.0 million, to be designated as a net investment hedge to partially offset the effects of foreign currency on foreign subsidiaries. F-29 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, 2024 and 2023 (dollar amounts in thousands): December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value Asset (Liability) Pay EUR October 3, 2018 September 30, 2025 — % EUR 38,820 38,820 $ 4,827 $ 2,475 Receive U.S.$ 2.19 % $ 45,000 45,000 Pay CHF May 26, 2022 December 16, 2028 — % CHF 240,175 288,210 ( 27,951 ) ( 48,047 ) Receive U.S.$ 1.94 % $ 250,000 300,000 Pay CHF November 17, 2023 December 17, 2029 — % CHF 66,525 66,525 ( 3,248 ) ( 4,037 ) Receive U.S.$ 2.54 % $ 75,000 75,000 Pay CHF May 6, 2024 December 18, 2030 — % CHF 68,483 — ( 4,741 ) — Receive U.S.$ 2.74 % $ 75,000 — Total $ ( 31,113 ) $ ( 49,609 ) 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 AOCI. For the years ended December 31, 2024 and 2023, the Company recorded a gain of $ 24.5 million and a loss of $ 30.7 million, respectively, in AOCI related to the change in fair value of the cross-currency swaps. For the years ended December 31, 2024 and 2023, the Company recorded gains of $ 10.1 million and $ 7.8 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 AOCI as of December 31, 2024 within the next twelve months is $ 9.4 million. Foreign Currency Forward Contracts The Company has entered into a hedge for forecasted intercompany purchases denominated in foreign currencies through the use of forward contracts designated as cash flow hedges. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in accumulated comprehensive loss. These changes in fair value will be recognized into earnings as a component of cost of sales when the forecasted-transaction occurs. Throughout 2024, the Company entered into foreign currency forwards to mitigate the exchange rate risk of CHF denominated intercompany purchases. These contracts typically settle at various dates within twelve months of execution. As of December 31, 2024 the notional amount of foreign currency forward contracts was CHF 16.9 million. For the year ended December 31, 2024 and 2023 the Company recorded losses of $ 1.1 million and gains of $ 0.4 million, respectively, in AOCI related to the change in fair value of the foreign currency forward contracts. For the year ended December 31, 2024 and 2023 the Company recorded losses of $ 0.4 million and gains of $ 0.4 million, respectively, in other income and cost of goods sold included in the consolidated statements of operations related to the amortization of forward points and rate translation on the foreign currency forward contracts. Counterparty Credit Risk The Company manages its concentration of counterparty credit risk on its derivative instruments by limiting acceptable counterparties to a group of major financial institutions with investment grade credit ratings, and by actively monitoring their credit ratings and outstanding positions on an ongoing basis. Therefore, the Company considers the credit risk of the counterparties to be low. Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency. Fair Value of Derivative Instruments The Company has classified all of its derivative instruments within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of the derivative instruments. The fair values of the interest rate swaps and cross-currency swaps were developed using a market approach based on publicly available market yield curves and the terms of the swap. The Company performs ongoing assessments of counterparty credit risk. F-30 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Effects of Derivative Instruments on Financial Position and Results of Operations The following table summarizes the fair value for derivatives designated as hedging instruments in the consolidated balance sheets as of December 31, 2024 and 2023: Fair Value as of December 31, Dollars in thousands 2024 2023 Location on Balance Sheet (1) : Derivatives designated as hedges — Assets: Prepaid expenses and other current assets Cash Flow Hedges Interest rate swap $ 12,320 $ 14,675 Cross-currency swap 537 Net Investment Hedges Cross-currency swap 8,605 2,938 Other assets Cash Flow Hedges Interest rate swap 38,302 30,710 Net Investment Hedges Cross-currency swap — 1,470 Total derivatives designated as hedges — Assets $ 59,227 $ 50,330 Derivatives designated as hedges — Liabilities Accrued expenses and other current liabilities Cash Flow Hedges Interest rate swap $ 684 $ 579 Cross-currency swap 4,367 4,813 Foreign Currency Forward Contracts 914 — Net Investment Hedges Cross-currency swap 210 2,903 Other liabilities Cash Flow Hedges Interest rate swap 1,145 1,250 Cross-currency swap — 36,396 Net Investment Hedges Cross-currency swap 39,507 51,114 Total derivatives designated as hedges — Liabilities $ 46,827 $ 97,055 (1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months. F-31 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the accompanying consolidated statement of operations during the years ended December 31, 2024 and 2023: Dollars in thousands Balance in AOCI Beginning of Year Amount of Gain (Loss) Recognized in AOCI Amount of Gain (Loss) Reclassified from AOCI into Earnings Balance in AOCI End of Year Location in Statements of Operations Year Ended December 31, 2024 Cash Flow Hedges Interest rate swap $ 43,556 $ 22,692 $ 17,454 $ 48,794 Interest expense Cross-currency swap ( 15,763 ) 41,013 36,871 ( 11,621 ) Other income, net Forward Currency Forward Contracts — ( 1,067 ) ( 443 ) ( 624 ) Cost of sales and other income, net Net Investment Hedges Cross-currency swap ( 45,498 ) 24,489 10,121 ( 31,130 ) Interest income $ ( 17,705 ) $ 87,127 $ 64,003 $ 5,419 Year Ended December 31, 2023 Cash Flow Hedges Interest rate swap $ 56,712 $ 4,899 $ 18,055 $ 43,556 Interest expense Cross-currency swap ( 20,271 ) ( 27,406 ) ( 31,914 ) ( 15,763 ) Other income, net Forward Currency Forward Contracts — 436 436 — Cost of sales and other income, net Net Investment Hedges Cross-currency swap ( 6,914 ) ( 30,738 ) 7,846 ( 45,498 ) Interest income $ 29,527 $ ( 52,809 ) $ ( 5,577 ) $ ( 17,705 ) Derivative Instruments Not Designated as Hedges: During 2024, the Company entered into foreign currency forward contracts to mitigate risk from the fluctuations in foreign currency exchange rates associated with intercompany receivables in Chinese yuan (“CNH”). These contracts typically settle at various dates within twelve months of execution. As of December 31, 2024, the notional amounts totaled CNH 140.0 million. During the second quarter of 2021, the Company entered into a foreign currency swap, with a notional amount of $ 7.3 million, to mitigate the risk from fluctuations in foreign currency exchange rates associated with an intercompany loan denominated in Japanese Yen (“JPY”). In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another currency at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company subsequently paid down a portion of this swap in the second quarter of 2023 and the second quarter of 2024, bringing the notional amount down to $ 4.6 million as of December 31, 2024. The fair value of the derivative instruments not designated as hedges was $ 1.7 million and $ 1.2 million as of December 31, 2024 and 2023, respectively. The following table summarizes the gains (losses) of derivative instruments not designated as hedges on the consolidated statements of income, which was included in other income: Dollars in thousands December 31, 2024 2023 Foreign currency forward contracts $ 598 $ — Foreign currency swaps 56 566 Total $ 654 $ 566 F-32 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 7. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill In accordance with FASB Topic 350, Intangibles—Goodwill and Other (“ASC 350”), goodwill is not subject to amortization but is tested for impairment at the reporting unit level annually in the third quarter. Additionally, the Company may perform interim tests of goodwill for impairment if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit below its carrying amount. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. The Company tests for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative evaluation for some or all of its reporting units and perform a quantitative test. The quantitative test uses a combination of both an income approach and a market approach to determine the fair value of the reporting unit. The income approach utilizes the estimated discounted cash flows for the reporting unit, while the market approach utilizes comparable publicly-traded companies’ revenue and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. Estimates and assumptions used in the income approach to calculate projected future discounted cash flows included revenue growth rates, cost of sales, terminal growth rates, and a discount rate for each reporting unit. Discount rates are determined using a weighted average cost of capital for risk factors specific to each reporting unit and other market and industry data. The assumptions used are inherently subject to uncertainty and slight changes in these assumptions could have a significant impact on the concluded value. The estimates and assumptions applied represent a Level 3 measurement in the fair value hierarchy. Level 3 inputs are supported by limited or no market activity and reflect the Company’s assumptions in measuring fair value. The key assumptions impacting the valuation included the following: • The reporting unit’s financial projections, including revenue growth rates and cost of sales, which are based on management’s assessment of regional and macroeconomic variables, industry trends and market opportunities, and the Company’s strategic objectives and future growth plans. • The projected terminal value for the reporting unit, which represents the present value of projected cash flows beyond the last period in the discounted cash flow analysis. 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 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. During the third quarter of 2024, the Company elected to bypass the qualitative evaluations of its Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units and perform quantitative tests. The quantitative test for the Tissue Technologies reporting unit utilized a terminal growth rate of 2.5 % and a discount rate of 12.5 % in the income approach. The Company determined, after performing the quantitative analysis, that the fair value of the Tissue Technologies reporting unit was not less than its carrying amount, with 21.2 % headroom. The quantitative test for the Neurosurgery reporting unit utilized a terminal growth rate of 2.5 % and a discount rate of 12.0 % in the income approach. The Company determined, after performing the quantitative analysis, that the fair value of the Neurosurgery reporting unit was not less than its carrying amount, with 11.7 % headroom. The quantitative test for the Instruments and ENT reporting unit utilized a terminal growth rate of 2.5 % and a discount rate of 11.5 % in the income approach. The Company determined, after performing the quantitative analysis, that the fair value of the Instruments and ENT reporting unit was not less than its carrying amount, with 22.1 % headroom. Based on the results of these quantitative tests, the Company recorded no impairment of goodwill for Tissue Technologies, Neurosurgery, or Instruments and ENT reporting units. The Company performed a hypothetical sensitivity analysis of the fair value for each reporting unit by increasing the discount rate by 50 basis points, decreasing the terminal growth rate by 50 basis points, and holding all other assumptions constant, which resulted in a decrease to the estimated fair value of the Tissue Technology reporting unit by 4.5 %, a decrease to the estimated fair value of the Neurosurgery reporting unit by 3.8 %, and a decrease to the estimated fair value of the Instruments and ENT reporting unit by 3.5 %. Based on the results of the hypothetical sensitivity analyses, the Company would still not have recorded an impairment of goodwill for Tissue Technologies, Neurosurgery, or Instruments and ENT reporting units. During the first quarter of 2024, due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Company’s manufacturing facility located in Boston, Massachusetts (the “Boston facility”), the Company elected to perform a quantitative analysis of its Tissue Technologies reporting unit. The F-33 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) quantitative test utilized a terminal growth rate of 2.0 % and a discount rate of 14.5 % in the income approach. An impairment loss is recognized when the reporting unit’s carrying amount exceeds its estimated fair value. The Company determined, after performing the quantitative analysis, that the fair value of the Tissue Technologies reporting unit was not less than its carrying amount, with 19.9 % headroom. Changes in the carrying amount of goodwill in 2024 and 2023 were as follows: Dollars in thousands Codman Specialty Surgical Tissue Technologies Total Goodwill at January 1, 2023 $ 656,219 $ 382,662 $ 1,038,881 SIA Acquisition — ( 382 ) ( 382 ) Foreign currency translation 10,718 6,245 16,963 Balance at December 31, 2023 $ 666,937 $ 388,525 $ 1,055,462 Acclarent Acquisition 62,482 — 62,482 Foreign currency translation ( 13,689 ) ( 7,303 ) ( 20,992 ) Balance at December 31, 2024 $ 715,730 $ 381,222 $ 1,096,952 F-34 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Other Intangible Assets The components of the Company’s identifiable intangible assets were as follows: December 31, 2024 Dollars in thousands Weighted Average Life Cost Accumulated Amortization Net Completed technology 17 years $ 1,452,545 $ ( 525,959 ) $ 926,586 Customer relationships 12 years 166,038 ( 137,186 ) 28,852 Trademarks/brand names 27 years 99,951 ( 42,173 ) 57,778 Codman trade name Indefinite 168,202 — 168,202 Supplier relationships 30 years 30,211 ( 19,126 ) 11,085 All other 6 years 22,820 ( 7,735 ) 15,085 $ 1,939,767 $ ( 732,179 ) $ 1,207,588 December 31, 2023 Dollars in thousands Weighted Average Life Cost Accumulated Amortization Net Completed technology 18 years $ 1,226,128 $ ( 448,519 ) $ 777,609 Customer relationships 12 years 193,895 ( 152,160 ) 41,735 Trademarks/brand names 28 years 98,892 ( 38,754 ) 60,138 Codman trade name Indefinite 174,531 — 174,531 Supplier relationships 30 years 30,211 ( 18,148 ) 12,063 All other 11 years 6,180 ( 4,423 ) 1,757 $ 1,729,837 $ ( 662,004 ) $ 1,067,833 Intangible Assets with Indefinite Lives The Company does not amortize intangible assets with indefinite lives but tests its intangible assets with indefinite lives for impairment annually in the third quarter in accordance with ASC 350. Additionally, the Company performs interim tests of its intangible assets with indefinite lives for impairment if an event occurs or circumstances change that could potentially reduce the fair value of a indefinite lived intangible asset below its carrying amount. The Company tests for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of the intangible asset is less than its carrying amount. The Company may elect to bypass this qualitative evaluation and perform a quantitative test. The quantitative test uses an income approach to determine the fair value of the indefinite-lived intangible asset. The income approach utilizes the estimated discounted cash flows for the indefinite-lived intangible asset. Estimates and assumptions used in the income approach to calculate projected future discounted cash flows included revenue growth rates, operating margins, and a discount rate for each indefinite-lived intangible asset. Discount rates are determined using a weighted average cost of capital 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 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. The assumptions used are inherently subject to uncertainty and slight changes in these assumptions could have a significant impact on the concluded value. The estimates and assumptions applied represent a Level 3 measurement in the fair value hierarchy described in ASC 820. Level 3 inputs are supported by limited or no market activity and reflect the Company’s assumptions in measuring fair value. For intangible assets with indefinite lives, the Company elected to bypass the qualitative evaluation for its Codman trade name intangible asset and perform a quantitative test during the third quarter 2024. In performing this test, the Company utilized a discount rate of 13.0 %. The assumptions used in evaluating the Codman trade name for impairment are subject to change and are tracked against historical results by management. Based on the results of the quantitative test, the Company recorded no impairment to the Codman trade name intangible asset. F-35 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Intangible Assets with Definite Lives Developed technologies and other definite-lived intangible assets are amortized over their estimated useful lives either using the straight-line method or, if reliably determinable, based on the pattern of which the economic benefit of the asset is expected to be utilized. Definite-lived intangible assets are periodically evaluated for impairment in accordance with FASB Topic 360, Property, Plant and Equipment , (“ASC 360”) whenever events or changes in circumstances indicate that a definite-lived intangible asset ’s carrying value may not be recoverable. The evaluation for recoverability involves comparing the carrying amount of the definite-lived intangible asset to the C ompany’s expectations of the future undiscounted cash flows derived from the definite-lived intangible asset . In the event the carrying value of the definite-lived intangible asset exceeds the undiscounted future cash flows expected to be derived from the definite-lived intangible asset over its remaining estimated useful life , the definite-lived intangible asset is considered not recoverable and the definite-lived intangible asset is tested for impairment. An impairment loss is measured as the excess of the definite-lived intangible asset’s carrying value over its fair value, calculated using market participant assumptions pursuant to ASC 820 using discounted future cash flows based on the present value of estimated future cash flows to be generated by the definite-lived intangible asset using a risk-adjusted discount rate. The impairment loss is recognized in the period that the impairment occurs. In the first quarter of 2024, due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Boston facility, the Company elected to perform quantitative impairment testing on certain definite-lived intangible assets including completed technology and customer relationships in accordance with ASC 360. The Company recorded an impairment charge related to the definite-lived intangible asset associated with the customer relationships of $ 7.1 million in intangible asset amortization in the consolidated statement of operations. With respect to the definite-lived intangible assets associated with the completed technology of SurgiMend® and PriMatrix®, the Company determined that the carrying amount of these definite-lived intangible assets were recoverable and, therefore, the intangible assets were not deemed to be impaired. In the second quarter of 2024, the Company approved a plan to transition the commercial distribution of SurgiMend® and PriMatrix® from the Boston facility to the Company’s manufacturing facility in Braintree, Massachusetts (the “Braintree facility”). The Company considered the impact to the update to the estimated timeframe to resume the commercial distribution of products manufactured in the Boston facility on the assumptions used in the quantitative assessment of the definite-lived intangible assets completed in the first quarter of 2024, which did not require further evaluation for impairment. The carrying values of SurgiMend® and PriMatrix® are $ 32.8 million and $ 24.4 million, respectively, as of December 31, 2024. Amortization expense (including amounts reported in cost of product revenues) for the years ended December 31, 2024, 2023, and 2022 was $ 105.2 million, $ 82.8 million, and $ 78.3 million, respectively. Annual amortization expense is expected to approximate $ 106.0 million in 2025, $ 105.8 million in 2026, $ 104.9 million in 2027, $ 101.3 million in 2028, $ 96.0 million in 2029, and $ 528.2 million thereafter. Amortization of product technology based intangible assets totaled $ 84.0 million, $ 70.4 million and $ 64.4 million for the years ended December 31, 2024, 2023, and 2022, respectively, and is presented by the Company within cost of goods sold. F-36 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 8. TREASURY STOCK As of December 31, 2024 and 2023, there were 14.4 million and 12.8 million shares of treasury stock outstanding with a cost of $ 691.4 million and $ 647.3 million, respectively, at a weighted average cost per share of $ 47.86 and $ 50.76 , respectively. On May 16, 2024, the Company entered into a $ 50.0 million accelerated share repurchase (“May 2024 ASR”) and received 1.3 million shares of common stock at inception of the May 2024 ASR, which represented approximately 70 % of the expected total shares under the May 2024 ASR. On July 31, 2024, the early exercise provision was exercised by the May 2024 ASR counterparty. The Company received an additional 0.4 million shares determined using the volume-weighted average price of the Company’s common stock during the term of the May 2024 ASR. On August 15, 2023, the Company entered into a $ 125.0 million accelerated share repurchase (“August 2023 ASR”) and received 2.3 million shares of the common stock at inception of the August 2023 ASR, which represented approximately 80 % of the expected total shares under the August 2023 ASR. On October 18, 2023 the early exercise provision was exercised by the August 2023 ASR counterparty. The Company received an additional 0.9 million shares determined using the volume-weighted average price of the Company’s common stock during the term of the August 2023 ASR. On January 26, 2023, the Company entered into a $ 150.0 million accelerated share repurchase (“January 2023 ASR”) and received 2.1 million shares of common stock at inception of the January 2023 ASR, which represented approximately 80 % of the expected total shares under the January 2023 ASR. The settlement of the January 2023 ASR agreement was completed in the second quarter of 2023, where the Company received 0.6 million shares, determined using the volume-weighted average price of the Company’s common stock during the term of the January 2023 ASR. On August 16, 2022, the Inflation Reduction Act of 2022 (the “Inflation Act”) was signed into law. The Inflation Act implements a new excise tax of 1.0% on the net share repurchases made by the Company effective for share repurchases performed January 1, 2023, or after. In the fourth quarter of 2024, the Company made an excise tax payment of $ 2.5 million related to the January 2023 ASR and the August 2023 ASR. On July 18, 2023, the Board of Directors authorized a new $ 225.0 million share repurchase program, replacing the existing $ 225.0 million program authorized in April 2022. A s of December 31, 2024, $ 50.0 million remained authorized . The program authorized in July 2023, and which expires on December 31, 2025, allows the Company to repurchase its shares opportunistically from time to time. The Company may utilize various methods to effect any repurchases, including open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, including accelerated share repurchases, or a combination of the foregoing, some of which may be effected through Rule 10b5-1 plans. The price and timing of any future purchases under the share repurchase program will depend on factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, dividends, economic and market conditions and stock price, and such repurchases may be discontinued at any time. 9. STOCK-BASED COMPENSATION Stock-based compensation expense - all related to employees and members of the Board of Directors - recognized under the authoritative guidance was as follows: Years Ended December 31, Dollars in thousands 2024 2023 2022 Cost of goods sold $ 649 $ 588 $ 549 Research and development 2,697 2,071 1,739 Selling, general and administrative 21,031 17,483 25,437 Total stock-based compensation expense $ 24,377 $ 20,142 $ 27,725 Total estimated tax benefit related to stock-based compensation expense 4,677 5,223 10,574 Net effect on net income $ 19,700 $ 14,919 $ 17,151 EQUITY AWARD PLANS As of December 31, 2024, the Company had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock unit awards outstanding under the Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”). The 2000 Equity Incentive Plan and the 2001 Equity Incentive Plan were terminated as of February 19, 2021, and no further awards may be issued under the plans. In May 2010 and May 2017, the stockholders of the Company approved amendments to the 2003 Plan to increase by 3.5 million and 1.7 million , respectively, the number of shares of common stock that may be issued under the 2003 Plan. The F-37 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Company has reserved 14.7 million shares under the 2003 Plan. The 2003 Plan permits the Company to grant incentive and non-qualified stock options, stock appreciation rights, restricted stock, contract stock, performance stock, or dividend equivalent rights to designated directors, officers, employees and associates of the Company. Stock options issued under the 2003 Plan became exercisable over specified periods, generally within four years from the date of grant for officers and employees, and within one year from the date of the grant for members of the Board of Directors. The awards generally expire eight years from the grant date for employees and from six to ten years for directors and certain executive officers, except in certain instances that result in accelerated vesting due to death, disability, retirement age or change in control provisions within their grant agreements. Restricted stock issued under the 2003 Plan vests ratably over specified periods, generally three years after the date of grant. The vesting of performance stock issued under the 2003 Plan is subject to service and performance conditions. Stock Options The Company values stock option grants using the binomial distribution model. Management believes that the binomial distribution model is preferable to the Black-Scholes model because it is a more flexible model that gives consideration to the impact of non-transferability and vesting provisions in valuing employee stock options. In determining the value of stock options granted, the Company considered that it has never paid cash dividends and does not currently intend to pay cash dividends, and thus has assumed a 0.0 % dividend yield. Expected volatilities are based on the historical volatility of the Company’s stock price. The expected life of stock options is estimated based on historical data on exercise of stock options, post-vesting forfeitures and other factors to estimate the expected term of the stock options granted. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected life of the options. The Company accounts for forfeitures as they occur. The following weighted-average assumptions were used in the calculation of fair value: Years Ended December 31, 2024 2023 2022 Dividend yield 0 % 0 % 0 % Expected volatility 33 % 30 % 30 % Risk free interest rate 4.09 % 3.86 % 2.01 % Expected life of option from grant date 7 years 7 years 7 years Weighted average grant date fair value of options granted $ 15.68 $ 21.58 $ 23.15 The following table summarizes the Company’s stock option activity: Shares Weighted Average Exercise Price Weighted Average Contractual Term in Years Aggregate Intrinsic Value Stock Options (In thousands) (In thousands) Outstanding at January 1, 2024 1,178 $ 50.64 3.65 $ 1,766 Granted 244 36.22 — — Exercised ( 162 ) 33.46 — — Forfeited or Expired ( 56 ) 50.21 — — Outstanding at December 31, 2024 1,204 $ 50.06 4.01 $ — Exercisable at December 31, 2024 798 $ 52.51 2.71 $ — The Company recognized $ 2.2 million, $ 1.4 million, and $ 3.5 million in expense related to stock options during the years ended December 31, 2024, 2023, and 2022, respectively. The intrinsic value of options exercised for the years ended December 31, 2024, 2023, and 2022 were $ 0.7 million, $ 1.8 million, and $ 4.0 million, respectively. Cash received from option exercises and employee stock purchase plan was $ 6.4 million, $ 4.3 million, and $ 5.5 million, for the years ended December 31, 2024, 2023, and 2022, respectively. The realized tax expense from options exercised was $ 0.5 million for the year ended December 31, 2024. Realized tax benefits of $ 0.1 million, and $ 0.6 million were recognized for the years ended December 31, 2023, and 2022, respectively. F-38 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) As of December 31, 2024, there was approximately $ 2.9 million of total unrecognized compensation costs related to unvested stock options. These costs are expected to be recognized over a weighted-average period of approximately three years . Awards of Restricted Stock, Performance Stock and Contract Stock The following table summarizes the Company’s awards of restricted stock, performance stock and contract stock for the year ended December 31, 2024: 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, 2024 584 $ 55.37 335 $ 57.53 Granted 650 33.28 387 36.05 Adjustments for performance achievement related to award target — — ( 160 ) 49.71 Cancellations ( 115 ) 46.31 ( 35 ) 49.23 Released ( 248 ) 58.04 ( 107 ) 33.37 Unvested, December 31, 2024 871 $ 39.33 420 $ 41.83 The Company recognized $ 22.1 million, $ 18.7 million and $ 24.3 million in expense related to such awards during the years ended December 31, 2024, 2023, and 2022, respectively. The total fair market value of shares vested and released in 2024, 2023, and 2022 was $ 11.3 million, $ 18.2 million and $ 65.0 million, respectively. Vested awards include shares that have been fully earned but had not been delivered as of December 31, 2024. Performance stock awards have performance features associated with them. Performance stock, restricted stock and contract stock awards generally have requisite service periods of three years . The fair value of these awards is being expensed on a straight-line basis over the vesting period. As of December 31, 2024, there were no performance stock units (“PSUs”) subject to vest and be released based on 2024 performance achievement. As of December 31, 2024, there was approximately $ 27.0 million of total unrecognized compensation costs related to unvested restricted stock, performance stock and contract stock awards. These costs are expected to be recognized over a weighted-average period of approximately two years . At December 31, 2024, there were approximately 3.7 million shares available for grant under the 2003 Plan. The Company capitalized share based compensation costs of $ 0.7 million, $ 0.6 million, and $ 0.6 million for the years ended December 31, 2024, 2023, and 2022, into inventory, respectively. Such share-based compensation was recognized as cost of goods sold when related inventory was sold. CEO Separation On February 27, 2024, the Company announced that Mr. De Witte would retire from his position as President and Chief Executive Officer and director of the Company following the completion of a succession process and entered into a letter agreement with Mr. De Witte to modify his current employment agreement and put forth the form of a post-employment consulting agreement. The Company applied modification accounting to the outstanding equity-based awards granted to Mr. De Witte as of that date, which revalued and accelerated stock-based compensation associated with equity-based awards granted to him over his expected service period to the Company. Pursuant to this letter agreement, Mr. De Witte’s unvested equity-based awards will continue to vest during his continued service period to the Company and vested stock options were modified such that they will remain exercisable until the earlier of (a) the stated term of the stock options and (b) six months following his cessation of continued service to the Company. As a result of the modifications, the Company recorded a total of $ 1.9 million in accelerated stock-based compensation expenses for the year ended December 31, 2024. EMPLOYEE STOCK PURCHASE PLAN The purpose of the Employee Stock Purchase Plan (the “ESPP”) is to provide eligible employees of the Company with the opportunity to acquire shares of common stock at periodic intervals by means of accumulated payroll deductions. The ESPP is a non-compensatory plan. Under the ESPP, a total of 3.0 million shares of common stock are reserved for issuance. These shares will be made available either from the Company’s authorized but unissued shares of common stock or from shares of common F-39 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) stock reacquired by the Company as treasury stock. At December 31, 2024, 1.9 million shares remain available for purchase under the ESPP. During the years ended December 31, 2024, 2023, and 2022, the Company issued 44,426 shares, 23,337 shares and 20,780 shares under the ESPP for $ 1.0 million, $ 1.0 million, and $ 1.1 million, respectively. 10. RETIREMENT BENEFIT PLANS DEFINED BENEFIT PLANS 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, 2024 and 2023 included the following (amounts in thousands): Year ended December 31, 2024 2023 Service cost $ 3,113 $ 2,226 Interest cost 866 1,157 Expected return on plan assets ( 1,639 ) ( 1,450 ) Amortization of prior service cost (credit) ( 585 ) ( 389 ) Settlements ( 144 ) — Actuarial losses 6 ( 391 ) Net periodic benefit cost $ 1,617 $ 1,153 The following weighted average assumptions were used to develop net periodic pension benefit costs and the actuarial present values of projected pension benefit obligations for the years ended December 31, 2024 and 2023, respectively: As of December 31, 2024 2023 Discount rate 1.14 % 1.51 % Expected return on plan assets 3.65 % 3.67 % Rate of compensation increase 2.12 % 2.00 % Interest crediting rate for cash balance plans 1.00 % 1.00 % The Company’s discount rates are determined by considering current yield curves representing high quality, long-term fixed income instruments. The resulting discount rates are consistent with the duration of plan liabilities. In 2024 and 2023, the discount rates were prescribed as the current yield on corporate bonds with an average credit rating of AA or AAA of equivalent currency and term to the liabilities. The expected returns on plan assets represent the average rate of return expected to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rates of return, the Company considers returns of historical market data as well as actual returns on the plan assets. 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. F-40 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The following sets forth the change in projected benefit obligations and the change in plan assets for the years ended December 31, 2024 and 2023 and a reconciliation of the funded status at December 31, 2024 and 2023, respectively (amounts in thousands): Year Ended December 31, 2024 2023 Change In Projected Benefit Obligations Projected benefit obligations, beginning of year $ 65,101 $ 50,364 Interest cost 866 1,157 Service cost 3,113 2,226 Actuarial loss 4,219 8,229 Plan amendments — ( 1,772 ) Plan settlements ( 870 ) ( 25 ) Employee contribution 1,265 1,182 Premiums paid ( 456 ) ( 406 ) Benefit payment ( 1,607 ) ( 812 ) Net transfer in/(out) 584 — Effect of foreign currency exchange rates ( 4,953 ) 4,958 Projected benefit obligations, end of year $ 67,262 $ 65,101 Year Ended December 31, 2024 2023 Change In Plan Assets Plan assets at fair value, beginning of year $ 45,724 $ 38,053 Actual return on plan assets 8,200 1,350 Employer contributions 2,874 2,700 Employee contributions 1,265 1,182 Plan settlements ( 870 ) — Benefits paid ( 1,581 ) ( 812 ) Premiums paid ( 456 ) ( 406 ) Net transfer in/(out) 322 — Effect of foreign currency exchange rates ( 3,660 ) 3,657 Plan assets at fair value, end of year $ 51,818 $ 45,724 Year Ended December 31, 2024 2023 Reconciliation Of Funded Status Fair value of plan assets $ 51,818 $ 45,724 Benefit obligations 67,262 65,101 Unfunded benefit obligations $ 15,444 $ 19,377 The unfunded benefit obligations are included in other liabilities in the consolidated balance sheets at December 31, 2024 and 2023, respectively. During the periods ended December 31, 2024 and 2023 , the Company had a net gain of $ 1.3 million and a net loss of $ 6.6 million, respectively, recognized within accumulated other comprehensive loss that has not been recognized as a component of net periodic benefit cost. The combined accumulated benefit obligations for the defined benefit plans was $ 60.1 million and $ 62.8 million as of December 31, 2024 and 2023, respectively. Unrecognized gains and losses are amortized over the average remaining future service for each plan. For plans with no active employees, they are amortized over the average life expectancy. The amortization of gains and losses is determined by using a 10% corridor of the greater of the market value of assets or the accumulated benefit obligation. Total unamortized gains and losses in excess of the corridor are amortized over the average remaining future service. F-41 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Prior service costs/benefits for the pension plans are amortized over the average remaining future service of plan participants at the time of the plan amendment. The net plan assets of the pension plans are invested in common trusts. Common trusts are classified as Level 2 in fair value hierarchy. The fair value of common trusts is valued at net asset value based on the fair values of the underlying investments of the trusts as determined by the sponsor of the trusts. 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 benefit plans in France and Germany had no assets at December 31, 2024. As of December 31, 2024, no plan assets are expected to be returned to the Company in the next twelve months. The following table is the summary of expected future benefit payments (in thousands): 2025 $ 2,514 2026 $ 2,230 2027 $ 2,149 2028 $ 2,332 2029 $ 2,348 Next five years $ 12,278 As of December 31, 2024, contributions expected to be paid to the plan in 2025 is $ 3.1 million. DEFINED CONTRIBUTION PLANS The Company also has various defined contribution savings plans offered to our U.S. and non-U.S. employees. The Company matches a certain percentage of each employee’s contributions as per the provisions of the plans. Total contributions by the Company to the plans were $ 10.4 million, $ 10.4 million and $ 9.8 million for the years ended December 31, 2024, 2023, and 2022, respectively. DEFERRED COMPENSATION PLAN The Company maintains a Deferred Compensation Plan in which 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 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, 2024 and 2023 was $ 6.7 million and $ 6.1 million. Offsetting liabilities relating to the deferred compensation plan are included in Other liabilities. 11. LEASES AND RELATED PARTY LEASES The Company leases administrative, manufacturing, research and distribution facilities and vehicles through operating lease agreements. The Company has no material finance leases as of December 31, 2024. Many of the Company’s leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs). For vehicles, the Company has elected the practical expedient to group lease and non-lease components. Most facility leases include one or more options to renew. The exercise of lease renewal options is typically at the Company’s sole discretion, therefore, the majority of renewals to extend the lease terms are not included in the Right of Use (“ROU”) assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates renewal options and when they are reasonably certain of exercise, the renewal period is included in the lease term. 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, 2024 and 2023, was $ 24.3 million and $ 24.0 million, respectively, which includes $ 0.3 million, in related party operating lease expense. F-42 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Supplemental balance sheet information related to operating leases at December 31, 2024 were as follows: December 31, 2024 December 31, 2023 (In thousands, except lease term and discount rate) ROU assets $ 144,042 $ 156,184 Current lease liabilities 14,540 15,284 Non-current lease liabilities 166,930 166,849 Total lease liabilities $ 181,470 $ 182,133 Weighted average remaining lease term (in years): Leased facilities 16.1 years 16.3 years Leased vehicles 2.3 years 1.9 years Weighted average discount rate: Leased facilities 5.4 % 5.9 % Leased vehicles 2.8 % 2.7 % Supplemental cash flow information related to leases was as follows: December 31, 2024 December 31, 2023 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 24,122 $ 20,655 ROU assets obtained in exchange for lease liabilities, net of modifications: Operating leases $ 3,565 $ 9,843 Future minimum lease payments under operating leases at December 31, 2024 were as follows: Related Parties Third Parties Total (In thousands) 2025 $ 296 $ 23,050 $ 23,346 2026 296 19,841 20,137 2027 296 19,405 19,701 2028 296 17,649 17,945 2029 246 17,480 17,726 Thereafter — 169,433 169,433 Total minimum lease payments $ 1,430 $ 266,858 $ 268,288 Less: Imputed interest 86,818 Total lease liabilities 181,470 Less: Current lease liabilities 14,540 Long-term lease liabilities $ 166,930 There were no material future minimum lease payments under finance leases at December 31, 2024. F-43 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Related Party Leases The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a principal stockholder of the Company. The term of the current lease agreement is through October 31, 2029 at an annual rate of approximately $ 0.3 million. The current lease agreement also provides (i) a 5-year renewal option for the Company to extend the lease from November 1, 2029 through October 31, 2034 at the fair market rental rate of the premises, and (ii) another 5-year renewal option to extend the lease from November 1, 2034 through October 31, 2039 at the fair market rental rate of the premises. Lease Impairment Charge The Company approved a plan to transition the commercial distribution of PriMatrix® and SurgiMend® from the Boston facility to the Company’s manufacturing facility in Braintree, Massachusetts and permanently cease use of the Boston facility. As a result, in the second quarter of 2024, the Company recorded a $ 4.6 million impairment charge in the Tissue Technologies reportable segment, as the carrying amounts of the operating lease right-of-use asset and fixed assets related to the Boston facility exceeded their fair values based on the Company’s estimates of future discounted cash flows through the end of the lease term and the end of their remaining useful lives, respectively. The $ 4.6 million impairment charge was comprised of a $ 1.7 million impairment of an operating lease right-of-use asset and a $ 2.9 million write-off of fixed assets, which was recorded as a component of cost of goods sold in the consolidated statements of operations. 12. INCOME TAXES Income before income taxes consisted of the following: Years Ended December 31, Dollars in thousands 2024 2023 2022 United States operations $ ( 172,273 ) $ ( 31,649 ) $ 92,642 Foreign operations 154,036 112,718 121,252 Total $ ( 18,237 ) $ 81,069 $ 213,894 A reconciliation of the U.S. Federal statutory rate to the Company’s effective tax rate is as follows: Years Ended December 31, 2024 2023 2022 Federal statutory rate 21.0 % 21.0 % 21.0 % Increase (decrease) in income taxes resulting from: State income taxes, net of federal tax benefit 15.3 % 2.9 % 0.1 % Benefit derived from foreign operations 22.4 % ( 17.2 ) % ( 1.6 ) % Nondeductible meals and entertainment ( 5.0 ) % 1.1 % 0.1 % Intercompany profit in inventory 4.2 % 3.3 % 0.3 % Research and development credit 24.1 % ( 5.7 ) % ( 1.4 ) % Nondeductible executive compensation & stock compensation shortfall ( 19.7 ) % 2.3 % ( 0.6 ) % Transaction and deal related costs ( 4.1 ) % 3.3 % ( 1.8 ) % Changes in valuation allowances ( 6.0 ) % 4.9 % — % Return to provision 10.1 % ( 0.8 ) % ( 0.5 ) % Other ( 0.4 ) % 1.3 % — % Effective tax rate 61.9 % 16.4 % 15.6 % Our effective tax rate was 61.9 % and 16.4 % of income before income taxes for the years ended December 31, 2024 and December 31, 2023, respectively. F-44 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In 2024, the Company’s effective tax rate was driven by federal, state, and international tax benefits generated from operating losses in certain jurisdictions, including a $ 4.4 million benefit from federal and state research tax credits, offset by the inclusion of Global Intangible Low-Taxed Income (“GILTI”). In 2023, the Company’s effective tax rate was primarily driven by the inclusion of GILTI, offset by a $ 5.8 million income tax benefit related to a four-year tax credit received by a Swiss subsidiary. The Company received an extension of the 2018 Swiss tax grant for three years, until the 2027 tax year. The net benefit of the tax credit, recorded as of December 31, 2023, was based on projections of use of the incremental tax grant. The Company’s Swiss subsidiary may offset the tax credit against cantonal and communal income and capital taxes during tax years 2024 through 2027. Any unused balance at the end of the 2027 tax period will be forfeited. In 2022, the Company’s lower effective tax rate was driven by a $ 5.1 million income tax benefit related to stock compensation and a $ 2.4 million income tax benefit related to the filing of amended federal and state returns for prior years. During 2024, the Company’s foreign operations generated a $ 0.4 million increase in income tax expense when compared to the same period in 2023, because of geographic and business mix of taxable earnings and losses, among other factors. The 2024 foreign effective tax rate is 12.3 % compared to 16.4 % in 2023. Changes to income tax laws and regulations, in any of the tax jurisdictions in which the Company operates, could impact the effective tax rate. Various governments, both U.S. and non-U.S., are increasingly focused on tax reform and revenue-raising legislation. On August 16, 2022, the Inflation Act was signed into law, for which the Company did not experience a material impact on the Company’s effective tax rate. Further, legislation in foreign jurisdictions may be enacted, in continued response to the base erosion and profit-sharing (“BEPS”) project begun by the Organization for Economic Cooperation and Development (“OECD”). The OECD released model rules related to a new 15% global minimum tax regime (“Pillar 2”). A number of the jurisdictions that the Company operates in have adopted some form of the model rules, which became effective beginning in 2024. The Pillar 2 rules are complex and provide for delays for implementing the tax during the early transition years, if certain conditions are met. The Company calculated an immaterial amount related to Pillar 2 tax liability for the year ending December 31, 2024, aided by certain transition safe-harbor results in Switzerland. Related changes in U.S. and non-U.S. jurisdictions could have an adverse effect on the Company’s effective tax rate. The provision for income taxes consisted of the following: Years Ended December 31, Dollars in thousands 2024 2023 2022 Current: Federal $ ( 257 ) $ 10,973 $ 24,201 State 1,330 2,851 3,835 Foreign 8,365 11,389 9,893 Total current $ 9,438 $ 25,213 $ 37,929 Deferred: Federal ( 27,148 ) ( 19,060 ) ( 11,591 ) State ( 4,093 ) 93 ( 2,316 ) Foreign 10,510 7,082 9,322 Total deferred $ ( 20,731 ) $ ( 11,885 ) $ ( 4,585 ) Provision for income taxes $ ( 11,293 ) $ 13,328 $ 33,344 F-45 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The income tax effects of significant temporary differences that give rise to deferred tax assets and liabilities, shown before jurisdictional netting, are presented below: December 31, Dollars in thousands 2024 2023 Assets: Doubtful accounts $ 3,370 $ 2,581 Inventory related items 34,731 41,466 Tax credits 17,922 18,859 Accrued vacation 2,447 2,184 Accrued bonus 5,279 4,259 Stock compensation 8,343 9,117 Deferred revenue 4,206 1,849 Net operating loss carryforwards 27,370 28,799 Capitalization of research and development expenses 68,311 61,138 Unrealized foreign exchange gain 8,655 13,907 Charitable contributions carryforward 212 206 Leases and Other 59,339 55,271 Total deferred tax assets 240,185 239,636 Less valuation allowance ( 15,504 ) ( 12,486 ) Deferred tax assets after valuation allowance $ 224,681 $ 227,150 Liabilities: Intangible and fixed assets ( 218,125 ) ( 168,229 ) Unrealized foreign exchange loss ( 11,280 ) ( 10,024 ) Leases and Other ( 21,186 ) ( 38,134 ) Total deferred tax liabilities $ ( 250,591 ) $ ( 216,387 ) Total net deferred tax (liabilities) assets $ ( 25,910 ) $ 10,763 The 2017 U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”) contained a provision which requires, for tax purposes, the capitalization and amortization of research and development expenses; effective for years beginning after December 31, 2021. The Company’s deferred tax assets increased by $ 10.4 million and $ 14.4 million at December 31, 2024 and December 31, 2023 respectively within the table above, related to the 2017 Tax Act. At December 31, 2024, the Company had net operating loss carryforwards of $ 51.2 million for federal income tax purposes, $ 106.7 million for foreign income tax purposes and $ 46.5 million for state income tax purposes to offset future taxable income. For the federal net operating loss carryforwards, $ 51.2 million will expire through 2037. For foreign net operating loss carryforwards, $ 87.5 million will expire through 2028, while the remaining $ 19.1 million have an indefinite carry forward period. The state net operating loss carryforwards expire through 2042. 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 valuation allowance at December 31, 2024 increased by $ 3.0 million, as compared to 2023, primarily driven by a $ 1.1 million increase related to the expiring Swiss federal tax credit. The valuation allowance for 2023 had increased by $ 2.8 million, as compared to 2022, primarily driven by the newly recognized Swiss tax credit. F-46 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Balance at Beginning of Period Charged to Costs and Expenses Other Deductions Balance at End of Period Description Dollars in thousands Year ended December 31, 2024 Deferred tax assets valuation allowance 17,823 5,330 ( 429 ) ( 367 ) 22,357 Year ended December 31, 2023 Deferred tax assets valuation allowance 14,672 3,069 26 56 17,823 Year ended December 31, 2022 Deferred tax assets valuation allowance 15,258 ( 515 ) — ( 71 ) 14,672 As of December 31, 2024, the Company has not provided deferred income taxes on unrepatriated earnings from foreign subsidiaries as they are deemed to be indefinitely reinvested unless there is a manner under which to remit the earnings with no material tax cost. The Company will repatriate foreign earnings when there is no need for reinvestment overseas and no material tax cost to bring the earnings back to the United States. Reinvestment considerations would include future acquisitions, transactions, and capital expenditure plans. A reconciliation of the beginning and ending amount of uncertain tax benefits is as follows: Years Ended December 31, Dollars in thousands 2024 2023 2022 (In thousands) Balance, beginning of year $ 812 $ 713 $ 676 Gross increases: Current year tax positions — — 37 Prior years' tax positions 35 372 — Lapse of statute ( 21 ) ( 273 ) — Balance, end of year $ 826 $ 812 $ 713 Approximately $ 0.8 million of the balance at December 31, 2024 relates to uncertain tax positions that, if recognized, would affect the annual effective tax rate. The Company has no uncertain tax positions at December 31, 2024 related to tax positions for which it is reasonably possible that the amounts could be reduced during the twelve months following December 31, 2024. The Company recognizes interest and penalties relating to uncertain tax positions in income tax expense. The Company recognized a minimal expense for the years ended December 31, 2024, 2023, and 2022. The Company had minimal interest and penalties accrued for the years ended December 31, 2024, 2023, and 2022. The Company files Federal income tax returns, as well as multiple state, local and foreign jurisdiction tax returns. The Company is no longer subject to examinations of its U.S. consolidated Federal income tax returns by the Internal Revenue Service (“IRS”) through fiscal year 2018. All significant state and local matters have been concluded through fiscal year 2018. All significant foreign matters have been settled through fiscal 2017. F-47 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) 13. NET INCOME PER SHARE Basic and diluted net income per share was as follows: Years Ended December 31, Dollars in thousands, except per share amounts 2024 2023 2022 Basic net (loss) income per share: Net (loss) income $ ( 6,944 ) $ 67,741 $ 180,550 Weighted average common shares outstanding 77,010 80,089 82,997 Basic net (loss) income per common share $ ( 0.09 ) $ 0.85 $ 2.18 Diluted net (loss) income per share: Net (loss) income $ ( 6,944 ) $ 67,741 $ 180,550 Weighted average common shares outstanding — Basic 77,010 80,089 82,997 Effect of dilutive securities: Stock options and restricted stock — 248 519 Weighted average common shares for diluted earnings per share 77,010 80,337 83,516 Diluted net (loss) income per common share $ ( 0.09 ) $ 0.84 $ 2.16 Common stock of approximately 1.3 million and 0.6 million shares at December 31, 2024, and 2023 that are issuable through exercise of dilutive securities, respectively, were not included in the computation of diluted net income per share because their effect would have been anti-dilutive. 14. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Comprehensive income for the years ended December 31, 2024 and 2023: Dollars in thousands 2024 2023 2022 Net (loss) income $ ( 6,944 ) $ 67,741 $ 180,550 Foreign currency translation adjustment, net of tax ( 18,904 ) ( 12,103 ) ( 17,807 ) Change in unrealized loss/(gain) on derivatives, net of tax 5,123 ( 6,658 ) 65,798 Pension liability adjustment, net of tax 1,316 ( 6,610 ) 7,429 Comprehensive income, net $ ( 19,409 ) $ 42,370 $ 235,970 Changes in accumulated other comprehensive loss by component between December 31, 2024 and 2023 are presented in the table below, net of tax: Dollars in thousands Gains and Losses on Derivatives Defined Benefit Pension Items Foreign Currency Items Total Balance at December 31, 2023 $ 21,489 $ 2,712 $ ( 39,307 ) $ ( 15,106 ) Other comprehensive gain (loss) 50,119 2,040 ( 11,123 ) 41,036 Less: Amounts reclassified from accumulated other comprehensive income, net 44,996 724 7,781 53,501 Net current-period other comprehensive gain (loss) 5,123 1,316 ( 18,904 ) ( 12,465 ) Balance at December 31, 2024 $ 26,612 $ 4,028 $ ( 58,211 ) $ ( 27,571 ) For the year ended December 31, 2024, the Company reclassified gains of $ 32.3 million and $ 21.2 million from accumulated other comprehensive loss to other income, net and interest income, respectively. 15. COMMITMENTS AND CONTINGENCIES In consideration for certain technology, manufacturing, distribution, and selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products that it sells. The royalty payments that the Company made under these agreements were not significant for any of the periods presented. F-48 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) In the ordinary course of its business, the Company is involved in, from time to time, various legal actions, including any matters described below, involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations, some of which have been settled by the Company. In the opinion of management, such matters are either adequately covered by insurance or otherwise indemnified, or are not expected, individually or in the aggregate, to result in a material, adverse effect on the Company’s financial condition. However, it is possible that the Company’s results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded and actual results may differ from these estimates. The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency. The Company consistently accrues legal fees expected to be incurred in connection with loss contingencies as those fees are incurred by outside counsel as a period cost. On December 21, 2023, Fortis Advisors, LLC (representative of the security holders of ACell, Inc. (“ACell”)) filed for arbitration against Integra Life Sciences claiming breach of contract related to the earnout consideration from the 2021 acquisition of ACell. Refer to the contingent consideration section of this footnote for additional information on the ACell contingent considerations. The Company believes that it has strong defenses to the allegations in the arbitration and intends to defend the matter vigorously. On September 12, 2023, a securities class action complaint, captioned Pembroke Pines Firefighters & Police Officers Pension Fund v. Integra LifeSciences Holdings Corporation , No. 23-cv-20321 (D.N.J.), was filed by a purported stockholder of the Company in the United States District Court for the District of New Jersey (the “Pembroke Litigation”) against the Company and certain of the Company’s current and former executive officers. The Pembroke Litigation, filed on behalf of a putative class of stockholders who purchased or acquired the Company’s common stock between March 11, 2019 and May 22, 2023, inclusive, alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, on the basis of purportedly materially false and misleading statements and omissions relating to certain quality systems issues identified by the FDA at the Company’s Boston, Massachusetts manufacturing facility, the Company’s efforts to remediate those issues, and the Company’s forecasts for certain products in its Tissue Technologies segment. The complaint seeks, among other things, compensatory damages, attorneys’ fees, expert fees, and other costs. The Company believes that it has strong defenses to the allegations in the Pembroke Litigation, and intends to defend the matter vigorously. On February 21, 2025, a derivative lawsuit captioned Grabowsky v. Integra LifeSciences Holding Corp. et al, No. 3:25-cv-01399 (D.N.J.) was filed in the United States District Court for the District of New Jersey. The action purports to assert derivative claims on behalf of the Company against its current Board of Directors and certain of its current or former officers and directors. The action asserts claims that the individual defendants breached their fiduciary duties and harmed the Company by making false and misleading statements and omissions relating to certain quality systems issues identified by the FDA at the Company’s Boston, Massachusetts manufacturing facility, the Company’s efforts to remediate those issues, and the Company’s forecasts for certain products in its Tissue Technologies segment. On March 17, 2021, a complaint was filed against the Company in the Court of Common Pleas of Philadelphia County in Pennsylvania asserting product liability claims relating to a surgical procedure in which the Company’s CUSA® Clarity allegedly was used. The plaintiff seeks damages against the Company based upon plaintiff’s claim that the CUSA® Clarity did not function as intended. The plaintiff also asserts separate claims against the surgeon and the hospital. In the second half of 2024, a settlement was reached, which has since been paid by the Company’s insurance carriers. F-49 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Contingent Consideration Contingent consideration is recorded at fair value as measured on the date of acquisition. The value recorded is based on estimates of future financial projections under various potential scenarios using either a Monte Carlo simulation or the probability-weighted income approach derived from revenue estimates and probability assessment with respect to the likelihood of achieving contingent obligations. Contingent payments related to acquisitions consist of development, regulatory, and commercial milestone payments, in addition to sales-based payments, and are valued using discounted cash flow techniques that are classified within Level 3 of the fair value hierarchy because they are measured at fair value using significant unobservable inputs, including management’s forecast of future revenues for the acquired businesses as well as management’s estimates of the likelihood of achieving the other specified criteria. Each quarter until such contingent amounts are earned, the fair value of the liability is remeasured at each reporting period and adjusted as a component of operating expenses based on changes to the underlying assumptions. The change in the fair value of sales-based payments is based upon future revenue estimates and increases or decreases as revenue estimates or expectation of timing of payment charges. The estimates used to determine the fair value of the contingent consideration liability are subject to significant judgment and actual results are likely to differ from the amounts originally recorded. The Company determined the fair value of contingent consideration during the twelve-month period ended December 31, 2024 and 2023 to reflect the change in fair value during the period. A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the years ended December 31, 2024 and 2023 is as follows (in thousands): Contingent Consideration Liability Related to Acquisition of: Arkis Location in Financial Statements Derma Sciences ACell Surgical Innovations Associates, Inc. Location in Financial Statements Balance as of January 1, 2024 $ 15,755 $ 2,557 $ 300 $ 68,700 Payments — — — ( 12,400 ) Change in fair value of contingent consideration liabilities ( 2,787 ) Research and development 129 ( 297 ) ( 2,300 ) Selling, general and administrative Balance as of December 31, 2024 $ 12,968 $ 2,686 $ 3 $ 54,000 Short-Term $ 8,560 $ — $ — $ 17,900 Accrued expenses and other current liabilities Long-Term 4,408 2,686 3 36,100 Other liabilities Total $ 12,968 $ 2,686 $ 3 $ 54,000 Contingent Consideration Liability Related to Acquisition of: Arkis Location in Financial Statements Derma Sciences ACell Inc. Surgical Innovations Associates, Inc. Location in Financial Statements Balance as of January 1, 2023 $ 12,895 $ 230 $ 3,700 $ 57,607 Additions — — — — Change in fair value of contingent consideration liabilities 2,860 Research and development 2,327 ( 3,400 ) 11,093 Selling, general and administrative Balance as of December 31, 2023 $ 15,755 $ 2,557 $ 300 $ 68,700 Short-Term $ 7,778 $ — $ — $ 13,400 Accrued expenses and other current liabilities Long-Term 7,977 2,557 300 55,300 Other liabilities Total $ 15,755 $ 2,557 $ 300 $ 68,700 F-50 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Arkis BioSciences Inc. As part of the acquisition of Arkis BioSciences Inc. (“Arkis”), the Company is required to pay the former shareholders of Arkis up to $ 25.5 million based on the timing of certain development milestones of $ 10.0 million and commercial sales milestones of $ 15.5 million, respectively. The Company used a probability weighted income approach to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specified milestone. The Company estimated the fair value of the contingent consideration to be $ 13.1 million at the acquisition date. Derma Sciences 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 already paid $ 33.3 million related to the aforementioned contingent liabilities. One contingent milestone 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. ACell, Inc. As part of the acquisition of ACell, the Company is required to make payments to the former shareholders of ACell up to $ 100 million in total for years 2022, 2023, and 2025 based on the achievement by the Company of certain revenue-based performance milestones. The 2022 and 2023 milestones were not achieved, leaving only one contingent milestone remaining. The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specific milestone. The Company estimated the fair value of the contingent consideration to be $ 23.9 million at the acquisition date. Surgical Innovations Associates, Inc. As part of the acquisition of SIA, the Company is required to pay to the former shareholders of SIA up to $ 90.0 million for two separate payments, which are dependent on (1) achieving certain revenue-based performance milestones in 2023, 2024, and 2025 (up to $ 50.0 million in additional payments), as well as (2) the approval by the FDA of the PMA application for DuraSorb for certain uses by certain timing targets (up to $ 40.0 million in additional payments). In the second quarter of 2024, the Company paid out $ 12.4 million related to the 2023 performance year. The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration for the revenue-based milestone that considered the possible outcomes of scenarios related to each specific milestone for the revenue based performance milestone. The Company used probabilities of achieving the conditions to calculate the fair value of the contingent consideration for the PMA approval milestone. The Company estimated the fair value of the contingent consideration for the revenue based milestone to be $ 32.6 million at the acquisition date and $ 25.0 million for the PMA approval milestone at the acquisition date. Other Commitments In October 2024, the Company entered into a definitive agreement to acquire its manufacturing facility located in Plainsboro, New Jersey currently leased by the Company for $ 10.4 million in cash at closing. The transaction closed in the first quarter of 2025. See Note 18. Subsequent Events . 16. SEGMENT AND GEOGRAPHIC INFORMATION The Company is organized primarily on the basis of products and operates two global reportable segments. Resources are allocated and performance is assessed by the Company’s President and Chief Executive Officer, which the Company has determined to be the Chief Operating Decision Maker (“CODM”). The two reportable segments and their activities are described below. • The Codman Specialty Surgical segment operations consist of (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; and (iii) the ENT business, which includes instrumentation, balloon technologies for sinus dilation and eustachian tube dilation, as well as surgical navigation systems. • The Tissue Technologies segment operations consist of such offerings as skin and wound repair, plastics and surgical reconstruction products, bone grafts, and nerve and tendon repair products. The Tissue Technologies segment includes the Company’s private label business. The Corporate and Other category includes (i) various executive, finance, human resource, information systems and legal functions, (ii) brand management, and (iii) share-based compensation costs, which are not allocated to the reportable segments. F-51 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The accounting policies of both segments are the same as those described in Note 2. Summary of Significant Accounting Policies . For both segments, the CODM uses segment revenue and segment operating income to assess the performance for each segment and in the annual budgeting and forecasting process. The CODM considers budget-to-actual variances on a quarterly basis for segment revenue and segment operating income when making decisions about allocating capital and personnel to the segments. The operating results of the various reportable segments as presented are not comparable to one another because (i) certain operating segments are more dependent than others on corporate functions for unallocated general and administrative and/or operational manufacturing functions and (ii) the Company does not allocate certain manufacturing costs and general and administrative costs to the segments. F-52 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The table below presents information about reported segments for the years ended December 31, 2024, 2023, and 2022 are as follows: Dollars in thousands Codman Specialty Surgical Tissue Technologies Corporate and Other Total 2024 Total revenue, net $ 1,143,636 $ 466,891 $ — $ 1,610,527 Cost of goods sold 384,422 162,535 181,509 728,466 Research and development 30,770 18,140 66,467 115,377 Selling, general and administrative 224,370 147,047 345,566 716,983 Intangible asset amortization — — 21,290 21,290 2024 Total cost and expenses 639,562 327,722 614,832 1,582,116 2024 Operating income (loss) $ 504,074 $ 139,169 $ ( 614,832 ) 28,411 Interest income 20,040 Interest expense ( 70,632 ) Other income, net 3,944 (Loss) before income taxes $ ( 18,237 ) Codman Specialty Surgical Tissue Technologies Corporate and Other Total 2023 Total revenue, net $ 1,058,993 $ 482,580 $ — $ 1,541,573 Cost of goods sold 364,144 164,966 127,728 656,838 Research and development 29,984 24,202 50,006 104,192 Selling, general and administrative 214,335 159,364 282,942 656,641 Intangible asset amortization — — 12,376 12,376 2023 Total cost and expenses 608,463 348,532 473,052 1,430,047 2023 Operating income (loss) $ 450,530 $ 134,048 $ ( 473,052 ) 111,526 Interest income 17,202 Interest expense ( 51,377 ) Other income, net 3,718 Income before income taxes $ 81,069 Codman Specialty Surgical Tissue Technologies Corporate and Other Total 2022 Total revenue, net $ 1,019,564 $ 538,102 $ — $ 1,557,666 Cost of goods sold 345,742 120,937 120,676 587,355 Research and development 35,902 28,936 36,355 101,193 Selling, general and administrative 220,047 154,427 241,842 616,316 Intangible asset amortization — — 13,882 13,882 2022 Total cost and expenses 601,691 304,300 412,755 1,318,746 2022 Operating income (loss) $ 417,873 $ 233,802 $ ( 412,755 ) 238,920 Interest income 11,917 Interest expense ( 49,594 ) Gain on sale of business 644 Other income, net 12,007 Income before income taxes $ 213,894 F-53 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) The Company does not allocate any long-lived assets to the reportable segments. Asset information by segment is not reported internally or otherwise regularly reviewed by the Chief Operating Decision Maker. The Company attributes revenue to geographic areas based on the location of the customer. Total revenue, net and tangible long-lived assets by major geographic area are summarized below: Dollars in thousands United States Europe Asia Pacific Rest of the World Consolidated Total revenue, net: 2024 $ 1,192,675 $ 158,496 $ 176,614 $ 82,742 $ 1,610,527 2023 1,100,730 165,221 193,096 82,526 1,541,573 2022 1,126,810 170,903 176,477 83,476 1,557,666 Total long-lived assets: 2024 534,336 52,385 28,264 1,295 616,280 2023 481,508 51,730 19,842 1,497 554,577 2022 440,223 60,857 12,975 2,721 516,776 17. FAIR VALUE MEASUREMENTS ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three-level hierarchy of the inputs (i.e., assumptions that market participants would use in pricing an asset or liability) used to measure fair value, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable inputs in measuring fair value. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the entire fair value measurement. The three levels of the valuation hierarchy are defined as follows: Level 1 : Inputs to the valuation methodology are quoted prices in active markets for identical assets or liabilities. Level 2 : Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 : Inputs to the valuation methodology are unobservable inputs that are supported by little or no market activity and are based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk. Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company has investments in time deposits that are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, as well as certain debt obligations that are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The investments in time deposits are classified as cash and cash equivalents and short-term investments on the consolidated balance sheets which is determined based on maturities at the time of purchase and re-evaluated at each balance sheet date. The Company also has investments in derivative instruments, which are comprised of interest rate swaps, cross currency swaps, net investment hedges, and forward foreign currency contracts that are classified within Level 2 of the fair value hierarchy because they are valued using analyses obtained from independent third-party valuation specialists based on market observable inputs. The fair values of these derivative contracts represent the estimated amounts the Company would receive or pay to terminate the contracts. Refer to Note 6. Derivative Instruments for further discussion and information on these derivative contracts. In addition, the Company has contingent consideration liabilities that are classified within Level 3 of the fair value hierarchy because they are measured at fair value using significant unobservable inputs, including management’s forecast of future revenues for the acquired businesses as well as management’s estimates of the likelihood of achieving the other specified criteria. Refer to Note 15. Commitments and Contingencies for additional information on these contingent consideration liabilities. F-54 INTEGRA LIFESCIENCES HOLDINGS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) Assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2024, 2023, and 2022 consisted of the following: Years Ended Dollars in thousands Fair Value Measurement 2024 2023 2022 Assets: Cash and cash equivalents Level 1 $ 246,375 $ 276,402 $ 456,661 Short-term investments Level 1 27,192 32,694 — Interest rate swaps Level 2 48,795 43,556 56,712 Pension plan assets Level 2 51,818 45,724 38,053 Foreign currency forward contracts (not designated as hedges) Level 2 1,700 1,200 1,100 Total Assets: $ 375,880 $ 399,576 $ 552,526 Liabilities: Cross currency rate swaps Level 2 $ 4,367 $ 40,672 $ 7,769 Net investment hedges Level 2 31,113 49,609 5,643 Foreign currency forward contracts Level 2 914 — — Contingent consideration Level 3 69,657 87,312 74,432 Pension project benefit obligation Level 2 67,262 65,101 50,364 Total Liabilities: $ 173,313 $ 242,694 $ 138,208 A rollforward of the fair value of the contingent consideration liabilities, as determined by Level 3 unobservable inputs, during the years ended December 31, 2024, December 31, 2023, and December 31, 2022 were as follows: Years Ended Dollars in thousands 2024 2023 2022 Balance at beginning of period $ 87,312 $ 74,432 $ 37,129 Change in fair value ( 5,255 ) 12,880 37,303 Payments ( 12,400 ) — — Balance at end of period $ 69,657 $ 87,312 $ 74,432 There were no transfers into or out of Level 3 during the years ended December 31, 2024, December 31, 2023, and December 31, 2022. Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis The Company remeasures the fair value of certain assets and liabilities, including property, plant and equipment; operating lease - right of use assets; and goodwill and other intangible assets, upon the occurrence of certain events. The amounts recognized were recorded to remeasure the carrying amount of assets to the assets’ fair values, which were generally estimated, based upon a market participant’s perspective, using Level 3 measurements, including values estimated using the income approach. Other than the fair value estimates disclosed in Note 4. Acquisitions and Divestitures , Note 7. Goodwill and Other Intangibles , and Note 11. Lease and Related Party Leases , there were no non-recurring fair value measurements during the years ended December 31, 2024, December 31, 2023, and December 31, 2022. 18. SUBSEQUENT EVENTS On January 15, 2025, the Company completed the purchase of its manufacturing facility located in Plainsboro, New Jersey. The Company made a cash payment of $ 10.4 million upon closing. F-55