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1、Driving Growth2017 Annual ReportTO OUR SHAREHOLDERSIn 2017,we made Integra LifeSciences an even stronger company.We completed two transformative acquisitions to solidify our global leadership position in neurosurgery and regenerative technologies.We launched a number of new products,made significant
2、 investments in our R&D capabilities,improved our supply chain management and maintained our focus on operational excellence.We invested in our sales channels to create specialization and achieve greater focus in addressing our customers needs.By year-end,we passed the$1 billion revenue milestone.Th
3、ese accomplishments strengthened our market position in key segments and enabled us to continue to deliver value to our shareholders.In 2017,we finished the year financially strong,with increased organic growth from our base business and solid performance from our recently acquired businesses.Total
4、revenues for 2017 were$1.19 billion,an increase of$196.2 million,or 19.8 percent,over the prior year.The Codman Specialty Surgical segment,which contributed 61 percent of our revenues,grew 13.9 percent to$720.3 million versus the prior year.We attribute this growth to revenue contributions from the
5、Codman Neurosurgery acquisition,the global launch of CUSA Clarity ultrasonic tissue ablation system,and growth in our dural access and repair franchise.The Orthopedics and Tissue Technologies segment grew 30.1 percent to$467.9 million versus a year ago,primarily driven by revenue contributions from
6、the Derma Sciences acquisition,strong performance in our regenerative technologies franchise including our private-label business and growth in our ankle and shoulder product portfolios.These encouraging results demonstrate we can achieve our goals by executing on clear strategies,capitalizing on ou
7、r strengths,and maintaining a relentless focus on growth.Of all our accomplishments,making a difference in the lives of patients serves as the inspiration that will drive greater success in the years to come.STRATEGIES TO DRIVE GROWTH In 2017,we evolved our strategy to focus on four key pillars that
8、 will sustain growth in the long-term build an execution-focused culture,achieve relevant scale,improve speed and agility,and become a leader in customer excellence.Throughout the year,we prioritized our strategic initiatives in these areas.Last year,we completed the acquisitions of Derma Sciences,I
9、nc.and the Codman Neurosurgery busi-ness of Johnson&Johnson to increase our scale and improve our competitive positions in advanced wound care and neurosurgery.The acquisition of Derma Sciences in February 2017 doubled the size of our outpatient wound care sales channel and expanded our portfolio to
10、 include market-leading products such as MediHoney and the TCC-EZ total contact cast system.This acquisition has enabled us to offer clinically and economically differentiated products for clinicians and patients.In October 2017,we completed the Codman Neurosurgery acquisition,the most transformatio
11、nal acquisition in our companys history,which allowed us to offer a comprehensive neurosurgery prod-uct portfolio and expanded our international sales channel so we can enter new markets around the world.To take advantage of the strong heritage of the Codman name,we renamed our Specialty Surgical di
12、vision as Codman Specialty Surgical to benefit our other franchises and enhance our com-petitive position.Another core focus is executing on research and development and new product introductions to sustain our long-term growth.In 2017,we achieved significant milestones in R&D and successfully launc
13、hed more than seven regenerative products a company record.Additionally,we introduced our largest electromechanical product,CUSA Clarity system,which has been well-received by our customers worldwide.We also enhanced our orthopedic product portfolio,launching Titan Press-Fit Reverse for shoulder art
14、hroplasty to treat humeral fractures,and commercially expanding the Cadence Total Ankle System in the United States and Europe.Both products are strong growth driv-ers for us.In addition to introducing new products,we funded studies to gather economic data and clinical ev-idence in support of our ex
15、isting products.For example,we began postmarket studies in the United States and Europe for the Cadence ankle to evaluate two-year implant survivorship in patients.We believe these studies will ensure market access and improve reimbursement.INVESTING IN OUR FUTUREThroughout the year,we continued to
16、invest in our business and lay the foundation for even greater success in the coming years.We made significant investments in our facilities,most notably opening the Center of Orthopedic Excellence in Austin,Texas,underscoring the importance of the orthope-dic segment to our overall business.We comp
17、leted the expansions of our Collagen Manufacturing Center in Plainsboro,New Jersey,and our instrument manufacturing facility in Saint-Aubin,France.Operationally,we advanced our key goals around manufacturing automation,quality improvements and supply chain management.On the commercial front,we expan
18、ded our global sales channels across our business segments and aligned our sales teams to further strengthen our customer relationships.We also advanced many customer experience initiatives,investing in technologies,tools and training for our customer-facing colleagues to strengthen our position as
19、a supplier of choice.Internationally,we began creating the commercial infrastructure to support our sales organization and maximize our opportunities.We expanded our offices in Tokyo,Japan,and Shanghai,China,to accommodate growth in the Asia Pacific region.We plan to build on the success of our prof
20、ession-al education programs to drive ongoing customer appreciation of our growing portfolio of medical technologies globally.We have always believed having the right people with the right skills,aligned with our values,is critical to our long-term success.Throughout the year,we made progress on our
21、 organizational pri-orities to attract,develop and retain strong talent.We further developed our leaders through the manager training program we launched a few years ago.Last year,we welcomed more than 1,300 new colleagues to our organization,including more than 700 colleagues from Derma Sciences an
22、d Codman Neurosurgery.We also made significant progress in driving our goals for diversity and inclusion.In 2017,we created the Womens Leadership Council,consisting of our senior female leaders,who are tasked with deter-mining ways to attract and retain female talent,advance the development of women
23、 into leadership roles,and increase cultural awareness of the value of diversity and inclusion.Integra believes a tal-ented and inclusive workforce is essential to sustaining a competitive and successful organization.Finally,we expanded our executive leadership team with the appointment of Michael M
24、cBreen as pres-ident of the international business.Mikes experience and knowledge of Codman Neurosurgery will be a strong asset as we continue to integrate this business.Additionally,earlier in 2018,we added Sravan K.Emany as treasurer and head of investor relations.Sravans solid experience in manag
25、ing financial and strategic issues for complex organizations will help us drive greater shareholder value.A WORD OF THANKSWe are proud of our accomplishments in 2017 and believe our results provide a solid foundation for the future.Our investments in our sales channels,combined with a strong pipelin
26、e of new products,registrations,and clinical and economic data,are expected to drive faster organic growth globally.I want to express our appreciation to the many people who contributed to our success last year.I thank our shareholders for investing in our company.We will continue to demonstrate you
27、r confi-dence in us is well-placed.I thank our customers for your trust in us.Be assured we remain committed to bringing high quality medical technologies,so you can provide exceptional care to your patients and enable them to live healthier and more productive lives.Finally,I thank the 4,400 talent
28、ed colleagues throughout Integra for their hard work and outstanding contributions to our success.In particular,in the aftermath of Hurricane Maria,we were inspired and motivated by the outpouring of support across Integra for our Puerto Rico-based colleagues.It is this spirit of giving and compassi
29、on for others that makes Integra a special company.With the support of our shareholders,the trust of our customers and the talent of our colleagues,we remain committed to bringing transformative healthcare products and solutions to millions of people around the world.Of all our accomplishments,makin
30、g a difference in the lives of patients serves as the inspiration that will drive greater success in the years to come.Peter ArduiniPresident and CEOSincerely,Peter J.ArduiniPresident and Chief Executive Officer,Integra LifeSciencesLloyd W.Howell,Jr.Chief Financial Officer and Treasurer,Booz Allen H
31、amiltonKeith Bradley,Ph.D.former Professor of International Management and Management Strategy,Open University and Cass Business School,U.K.,and Chair,Compensation CommitteeDonald E.Morel,Jr.,Ph.D.former Chief Executive Officer,West Pharmaceutical Services,Inc.Raymond G.Murphyformer Senior Vice Pres
32、ident and Treasurer,Time Warner Inc.,and Chair,Audit CommitteeStuart M.Essig,Ph.D.Managing Director,Prettybrook Partners,LLC,and Chairman of the BoardChristian S.SchadePresident and Chief Executive Officer,Aprea Therapeutics,and Chair,Finance CommitteeBarbara B.HillOperating Partner,NexPhase Capital
33、James M.Sullivanformer Executive Vice President of Lodging Development,Marriott International,Inc.,and Chair,Nominating and Corporate Governance CommitteeBOARD OF DIRECTORSMANAGEMENT TEAMSeated(L-R):Peter J.Arduini,Dan Reuvers,Judith E.OGrady,Glenn G.Coleman,Joseph VinhaisStanding(L-R):Maria Platsis
34、,William Compton,Kenneth Burhop,Robert T.Davis,Jr.,Richard D.Gorelick,Sravan K.Emany,Paul Gonsalves,John Mooradian,Michael McBreen,Lisa EvoliFor the past two years,Shelley Meyers was missing out on the things she loved the most walking the dog,riding her bike and going on her paddleboat.Chronic ankl
35、e pain limited Shelleys life,particularly her involvement in family activities.Diagnosed with arthritis,the doctor gave her several options to address the constant pain.Of the choices presented,Shel-ley opted to undergo total ankle reconstruction.She believed it was the best option for her to regain
36、 quality of life.The surgeon used Integras Cadence Total Ankle System,modeled after the human anatomy and replicating the natural ankle,providing the ability to reproduce the ankles natural movement.The Cadence system has garnered positive feedback among its users for ad-vancements in implant and in
37、strument design,along with a streamlined surgical technique.It incorporates several features to accommodate various patient anatomies,reduce potential clinical complications,and address common challenges associ-ated with ankle arthroplasty.“Making the decision to undergo total ankle reconstruction s
38、ur-gery was the best thing I ever did,”said Shelley.“I am starting to enjoy life again and I know it will only get better from here.”Seeking better quality of life.ORTHOPEDICS AND TISSUE TECHNOLOGIES Represented 39 percent of global revenues in 2017 Global leader in regenerative technologies,includi
39、ng skin substitutes and products to treat burnsThe Orthopedics and Tissue Technologies(OTT)segment pro-vides products and solutions that address soft tissue,nerve,and tendon repairs,as well as reconstruction in the hand,wrist,elbow,shoulder,ankle and foot.Integra is a pioneer and global leader in re
40、generative technol-ogies.Our Integra Dermal Regeneration Template was the first product approved by the FDA to regenerate dermal tissue.Since then,we have built our expertise in regenerative medi-cine to accommodate a broad range of specialties,including wound reconstruction,plastic and general surg
41、ery.Our re-generative products have been used successfully in more than 10 million procedures worldwide.These products are used to provide treatment for acute wounds such as burns,chronic wounds including diabetic foot ulcers,surgical tissue repair including hernia repair,peripheral nerve repair and
42、 protection,and tendon repair.The OTT business segment also includes private-label sales of a broad set of our regenerative and wound care technologies,serving other medical technology companies that sell to end markets,primarily in orthopedics,spine,surgical and wound care.In early 2017,we acquired
43、 Derma Sciences,a leading provid-er of acute and chronic wound care products.This acquisi-tion contributed to OTTs growth in 2017,doubling the U.S.outpatient advanced wound care sales team and broadening the base portfolio of products to prepare,treat and protect wounds.It also has created opportuni
44、ties for expansion in the plastic and reconstructive surgery segments.In April 2017,Colette Potter,an elementary schoolteacher,no-ticed a blister on her foot,which progressively worsened over a three-month period and affected her mobility.Colette,who was diagnosed with Type II diabetes more than 20
45、years ago,sought the expertise of Dr.Eric Lullove,a podiatric surgical specialist.Dr.Lullove immediately diagnosed her with lower extremity sepsis,with gas gangrene tracking all the way through her foot and the lateral side of her leg.“Most diabetic patients with gas gangrene of the leg would be at
46、high risk for a major amputa-tion,”said Dr.Lullove.“It was important to get her to emergen-cy surgery to quickly address the source of infection.”After adequate surgical control of her severe infection,Dr.Lull-ove used PriMatrix Dermal Repair Scaffold to address the sig-nificant tissue loss.Colette
47、continued to receive wound care and repeated applications of PriMatrix as well as revisional sur-gery to treat osteomyelitis in her heel bone.Additionally,using a combination of the TCC-EZ casting and tissue regeneration strategies,Colette avoided amputation and has full weight bearing of her foot.O
48、n the road to recovery.Additionally,in 2017,OTT successfully launched a record num-ber of regenerative products.These new products include SurgiMend MP and SurgiMend PRS Meshed Collagen Ma-trix,Revize/Revize-X Collagen Matrix,Integra Dermal Re-generation Template Single Layer“Thin”in Europe,along wi
49、th new sizes of PriMatrix Dermal Repair Scaffold and Omnigraft Dermal Regeneration Matrix.The availability of new regenera-tive technology solutions provides surgeons with a variety of options to address their most complex procedures.The OTT division launched several orthopedic products,in-cluding t
50、he Titan Press-Fit Reverse for shoulder arthroplasty to treat humeral fractures.In addition,we expanded the com-mercial availability of Cadence Total Ankle System,our recent ankle prosthesis developed in partnership with world-leading foot and ankle surgeons.We also began postmarket studies in the U
51、nited States and Europe for the Cadence ankle to evalu-ate two-year implant survivorship in patients.Last year,a lead-ing trade publication recognized the Cadence ankle as one of the top 10 innovations in podiatry.In 2017,Integra opened its Center of Orthopedic Excellence in Austin,Texas.The new 56,
52、000-square foot facility,incorporat-ing a product development lab,training area,and workspace,is an investment in the business and our people,designed to provide an enhanced work environment to promote collabo-ration and teamwork among our employees.We envision this center of excellence as one of In
53、tegras hubs for innovation,attracting leading orthopedic surgeons from all over the world.In the last several years,we have made significant investments in our channel expansion in the United States.Most recently,to drive sustainable growth,we established four dedicated sales channels to create grea
54、ter focus and specialization within our call points.We have a specialized sales organization of directly employed sales representatives,as well as specialty distribu-tors,organized based on their call point.Our extremity ortho-pedics sales representatives call on surgeons who treat extrem-ity orthop
55、edic disorders,including osteoarthritis,rheumatoid arthritis,wrist,ankle and shoulder arthroplasty,and other conditions requiring foot or hand reconstruction.In addition,we sell our shoulder products through a network of special-ized sales agents who call on shoulder surgeons.Our wound reconstructio
56、n acute(inpatient)sales representatives call on surgeons performing procedures in limb salvage,trauma,wound reconstruction and burns,while our advanced wound care sales representatives call on physicians who treat chronic wounds in the outpatient wound care clinic setting.We also have a dedicated su
57、rgical reconstruction sales team with dif-ferentiated products focused on plastic and reconstructive surgery,and hernia procedures.Finally,we have a distributor network focused on biologics.Outside the United States,we have a direct sales presence,pri-marily in certain European countries,Australia,N
58、ew Zealand,and Canada,and have retained distributors and sales agents in other international markets to sell certain product lines.“I am pleased with the progress Colette has made,”said Dr.Lull-ove.“Her lateral leg and foot wounds have completely healed and her heel area,which is the hardest and lon
59、gest area to heal,has continued to slowly progress towards closure.She is well on her way to recovery and getting back to what she loves,teaching.”“Its an amazing advancement I wish we had years ago,”said Dr.Gerald Grant,associate professor of neurosurgery at Stan-ford University Medical Center.For
60、Dr.Grant,CUSA Clarity has transformed his approach to the removal of fibrous tissue.This new digital platform has an ergonomic design and is easy to operate.He likens the handpiece to a pencil light enough to reduce hand fatigue,which makes a difference in neurosur-gical procedures that can sometime
61、s last up to ten hours.CUSA Clarity is the only ultrasonic tissue ablation system that combines a tough tissue tip,continuous tissue contact,an er-gonomic handpiece,and adaptive power all in one system.These four integrated components provide a greater than 50 percent increase in the removal rate of
62、 fibrous tissue over the CUSA Excel+system.“Neurosurgery is a rapidly changing field and the new CUSA Clarity system is scalable and adaptable to support future en-hancements,”said Dr.Grant.“For hospitals and the operating team,this is a game changer.”CODMANSPECIALTY SURGICAL Represented 61 percent
63、of global revenues in 2017 Global leader in neurosurgeryEvery day,surgeons rely on Integra products for complicated procedures critical to saving lives.Our broad portfolio of ad-vanced surgical and post-care technologies,and general and specialty surgical instruments cater to an extensive range of s
64、pecialties,including neurosurgery,neuro-intensive care,and ear,nose and throat,among others.Our Codman Specialty Surgical(CSS)segment,previous-ly known as Specialty Surgical Solutions,offers global,mar-ket-leading technologies,brands and instrumentation.Our product portfolio represents a continuum o
65、f care from pre-op-erative,to the neurosurgery operating room,to the neu-ro-critical care unit and post-care for both adult and pediatric patients suffering from brain tumors,brain injuries,cerebro-spinal fluid pressure complications and other neurological conditions.Additionally,the CSS portfolio i
66、ncludes a range of surgical headlamps and instrumentation,as well as specialty instruments used in acute care surgical centers.CSS also offers valuable services to central sterile processing departments of hospitals with its proprietary asset management software and inventory support.In 2017,the CSS
67、 business segment achieved several notable milestones.The acquisition of Codman Neurosurgery from Johnson&Johnson increased our direct sales force and in-ternational presence.This acquisition expanded the product portfolio of our market-leading technologies in dural repair,ultrasonic tissue ablation
68、,intracranial pressure monitoring and hydrocephalus management,while providing a strong re-search and development pipeline for future growth.Making a difference in the operating room.For nearly seven years,Susan Kline experienced unexplained memory problems,cognitive decline,bladder issues,difficult
69、y balancing that led to frequent falls,and eventually,confine-ment to a wheelchair.She was initially diagnosed with Alzhei-mers disease and had no choice but to leave her home to live in a nursing facility.Through the persistence of a neurosurgeon,further testing revealed Susan had a condition calle
70、d normal pressure hydro-cephalus(NPH),an under-recognized neurological disease with symptoms similar to Alzheimers disease.After this diag-nosis,Susan was fitted with Integras Codman Hakim Pro-grammable Valve.This product has multiple pressure settings that allow the neurosurgeon to make precise adj
71、ustments to control intracranial pressure at any time.Less than a day after surgery,Susan was out of the wheelchair.Three weeks later,she moved back to her home and regained her independence.“NPH almost robbed me of a life with my children and grandchildren,”said Susan.“Today,all those symptoms are
72、gone and I have my life back.”Capitalizing on Opportunities in JapanJapan is an important market one that provides many opportunities for us.With our portfolio of products,market development efforts and expanded commercial organization,we believe we are well-po-sitioned to grow our business in this
73、market in the coming years.The acquisition of Codman Neurosurgery in 2017 en-abled us to create a strong direct commercial pres-ence in Japan,allowing us to better focus on address-ing customer needs locally.With many new product registrations on the horizon,we can offer important products to our cu
74、stomers.Additionally,we believe in the importance of medi-cal education and helping surgeons understand the capabilities of our products and the valuable support they bring to their practice and patient care.In Japan,we are using a unique simulation device to educate physicians on the role of hydroc
75、ephalus valves in the lives of patients.This program has been well-received and we are looking forward to introducing this sim-ulation to our other key markets around the world.We also announced the publication of a new economic study in the Journal of Health Economics and Outcomes Research.The stud
76、y demonstrated greater clinical effectiveness of Integ-ras DuraSeal dural sealant at preventing cerebrospinal fluid leaks after posterior fossa surgery,compared to fibrin glue.Moreover,this 200-patient study showed that DuraSeals clin-ical efficacy versus fibrin glue may help hospitals reduce costs,
77、averaging$1,666 in savings per patient.We introduced our next-generation CUSA Clarity ultrasonic tissue ablation system,which we developed with extensive feedback from more than 150 customers worldwide.Its ergo-nomic design,including an improved handpiece that provides sustained comfort and precisio
78、n,has been well-received by neurosurgeons and their operating teams.In our instruments franchise,we acquired an asset management application,pro-viding our sales teams with a comprehensive solution to hos-pitals for inventory management.Our broad portfolio of quality surgical instruments,combined wi
79、th our strong U.S.distribution model,enables us to serve the needs of hundreds of physician,dental and veterinary offices.Moreover,our global commercial network,which includes clinical specialists,a large direct sales force and strategic part-nerships and distributors,expands our reach to hospitals,
80、inte-grated health networks,group purchasing organizations,cli-nicians,surgery centers and health care providers throughout the world.Hakim is a registered trademark of Hakim USA,LLC and is used under license.Getting a life back.FINANCIAL HIGHLIGHTSTotal Revenues2015$882.72016$992.12017$1,188.202004
81、0060080010001200($in Millions)($in Millions)Operating Cash Flow20152016$116.4$117.12017$114.5020406080100120(Per Share Amounts)Diluted Earnings Per Share2015$0.102016$0.942017$0.820.00.20.40.60.81.02017 Revenues by Product Category2017 Revenues by Geographic Area12%REST OF WORLD13%EUROPE75%UNITED ST
82、ATES61%CODMAN SPECIALTY SURGICAL39%ORTHOPEDICS&TISSUE TECHNOLOGIES-5005010015020025012/31/121/31/132/28/133/31/134/30/135/31/136/30/137/31/138/31/139/30/1310/31/1311/30/1312/31/131/31/142/28/143/31/144/30/145/31/146/30/147/31/148/31/149/30/1410/31/1411/30/1412/31/141/31/152/28/153/31/154/30/155/31/1
83、56/30/157/31/158/31/159/30/1510/31/1511/30/1512/31/151/31/162/29/163/31/164/30/165/31/166/30/167/31/168/31/169/30/1610/31/1611/30/1612/31/161/31/172/28/173/31/174/30/175/31/176/30/177/31/178/31/179/30/1710/31/1711/30/1712/29/175-Year IART and Peer PerformancePeer AverageIARTS&P 500HealthcareNASDAQR2
84、000UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,DC 20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the fiscal year ended December 31,2017orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934
85、For the transition period fromtoCOMMISSION FILE NO.0-26224INTEGRA LIFESCIENCES HOLDINGS CORPORATION(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)DELAWARE51-0317849(STATE OR OTHER JURISDICTION OFINCORPORATION OR ORGANIZATION)(I.R.S.EMPLOYERIDENTIFICATION NO.)311 ENTERPRISE DRIVEPLAINSBORO,NEW
86、 JERSEY08536(ZIP CODE)(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)REGISTRANTS TELEPHONE NUMBER,INCLUDING AREA CODE:(609)275-0500SECURITIES REGISTERED PURSUANT TO SECTION 12(b)OF THE ACT:Title of Each ClassName of Exchange on Which RegisteredCommon Stock,Par Value$.01 Per ShareThe Nasdaq Stock Market LLC
87、SECURITIES REGISTERED PURSUANT TO SECTION 12(g)OF THE ACT:NONEIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the SecuritiesAct.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Sec
88、urities ExchangeAct.Yes No Indicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of the SecuritiesExchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)ha
89、s been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405
90、of this chapter)during thepreceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and willnot be contained,to the bes
91、t of registrants knowledge,in definitive proxy or information statements incorporated by reference inPart III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smallerreportin
92、g company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smallerreporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company E
93、merging growth company(Do not check if a smaller reporting company)If an emerging growth company,indicate by check if the registrant has elected not to use the extended transition period forcomplying with any new revised financial accounting standards provided pursuant to Section 13(a)of the Exchang
94、e Act.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the ExchangeAct).Yes No As of June 30,2017,the aggregate market value of the registrants common stock held by non-affiliates was approximately$3,415.7 million based upon the closing sales price of the
95、registrants common stock on The Nasdaq Global Market on such date.Thenumber of shares of the registrants Common Stock,$0.01 par value,outstanding as of February 27,2018 was 78,494,242.DOCUMENTS INCORPORATED BY REFERENCE:Certain portions of the registrants definitive proxy statement relating to its s
96、cheduled May 17,2018 Annual Meeting ofStockholders are incorporated by reference in Part III of this report.INTEGRA LIFESCIENCES HOLDINGS CORPORATIONTABLE OF CONTENTSPagePART IItem 1.Business.1Item 1A.Risk Factors.12Item 1B.Unresolved Staff Comments.32Item 2.Properties.32Item 3.Legal Proceedings.32I
97、tem 4.Mine Safety Disclosures.33PART IIItem 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchasesof Equity Securities.34Item 6.Selected Financial Data.35Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.37Item 7A.Quantitativ
98、e and Qualitative Disclosures About Market Risk.59Item 8.Financial Statements and Supplementary Data.61Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.62Item 9A.Controls and Procedures.62Item 9B.Other Information.63PART IIIItem 10.Directors,Executive Offi
99、cers and Corporate Governance.64Item 11.Executive Compensation.64Item 12.Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters.64Item 13.Certain Relationships,Related Transactions,and Director Independence.64Item 14.Principal Accountant Fees and Services.64PAR
100、T IVItem 15.Exhibits and Financial Statements Schedules.65Item 16.Form 10-K Summary.79SIGNATURES.80PART IITEM 1.BUSINESSOVERVIEWThe terms“we,”“our,”“us,”“Company”and“Integra”refer to Integra LifeSciences Holdings Corporation,a Delaware corporation,and its subsidiaries,unless the context suggests oth
101、erwise.Integra,headquartered in Plainsboro,New Jersey,is a world leader in medical technology.The Companywas founded in 1989 with the acquisition of an engineered collagen technology platform used to repair andregenerate tissue.Since then,Integra has developed numerous product lines from this techno
102、logy for applicationsranging from burn and deep tissue wounds to repair of dura mater in the brain to repair of nerve and tendon.TheCompany has expanded its base regenerative technology business to include surgical instruments,neurosurgicalproducts,advanced wound care and orthopedic hardware,through
103、 several global acquisitions and by developingproducts internally to further meet the needs of its customers.Integra employs approximately 4,400 people dedicated to limiting uncertainty for surgeons,so that they canconcentrate on providing the best care for their patients.Integra provides innovative
104、 healthcare solutions in morethan 130 countries through its nearly 50 offices and its worldwide distribution network.VISIONWe aspire to be a multi-billion dollar diversified global medical technology company that helps patients bylimiting uncertainty for healthcare professionals.Our customers will r
105、ecognize us as a leader in specialty surgicalapplications,regenerative technologies and extremities orthopedics worldwide.STRATEGYIntegra is committed to delivering high quality products that positively impact the lives of millions ofpatients and their families.In 2017,we evolved our strategy to foc
106、us on four key pillars:1)building anexecution-focused culture,2)achieving relevant scale,3)improving agility and innovation,and 4)leading incustomer excellence.We believe that by sharpening our focus on these areas through improved planning andcommunication,optimization of our infrastructure,and str
107、ategically aligned tuck-in acquisitions,we can buildscale,increase competitiveness and achieve our long-term goals.To this end,our executive leadership team has established the following key priorities aligned to thisstrategy:Strategic Acquisitions.An important part of our strategy is pursuing strat
108、egic transactions and licensingagreements that increase relevant scale in the clinical areas in which we compete.In 2017,we closed theacquisitions of the Codman Neurosurgery business of Johnson&Johnson(“Codman Neurosurgery”)and DermaSciences,Inc.(“Derma Sciences”).Derma Sciences strengthens our lead
109、ership position in the advanced woundcare segment.Its portfolio of amniotic and placental tissue products complement and enhance our portfolio ofregenerative technologies.The Codman Neurosurgery acquisition expands our portfolio of neurosurgery productsand establishes us as the world leader in neuro
110、surgery.This acquisition also increased our international footprint,which will enable us to bring our entire portfolio of Integra products to local markets.Heading into 2018,integrating these businesses will remain a top priority.Portfolio Optimization and New Product Introductions.We are investing
111、in innovative product developmentto drive a multi-generational pipeline for our key product franchises.Our product development efforts focus onregenerative technologies and other projects with the potential for significant returns on investment.In 2017,we1achieved significant milestones in research
112、and development by successfully launching seven regenerativeproducts and our largest electromechanical product,the CUSAClarity.In addition to new product development,we are funding studies to gather clinical evidence to support launches,ensure market access and improvereimbursement for existing prod
113、ucts.We also continue to identify low-growth,low-margin products and productfranchises for discontinuation and will continue to look at other ways of optimizing our portfolio.Commercial Channel Investments.With acquisitions,new product introductions and a broader portfolio ofproducts,we have made in
114、vestments in our sales channels to create specialization and greater focus on reachingour customers and addressing their needs.Internationally,we have increased our commercial resourcessignificantly in all markets and are making investments to support our sales organization and maximize ourcommercia
115、l opportunities.We now have a strong international sales channel that will deliver our currentportfolio as well as position us for expansion.In addition,we continue to build upon our leadership brands acrossour product franchises to enable us to engage hospital systems through enterprise-wide contra
116、cts.Customer Excellence.We aspire to be ranked as a best-in-class provider and are committed to strengthenour relationships with all customers.We strive to consistently deliver outstanding customer service and continueto invest in technologies,systems and processes to improve the way our customers d
117、o business with us.Additionally,we expect to build on the success of our professional education programs to drive continuedcustomer appreciation of our growing portfolio of medical technologies globally.BUSINESS SEGMENTSWe currently manufacture and sell our products in the following two global repor
118、table business segments:Codman Specialty Surgical and Orthopedics and Tissue Technologies.We include financial informationregarding our reportable business segments and certain geographic information under“Item 7.ManagementsDiscussion and Analysis of Financial Condition and Results of Operations”and
119、 in Note 15,Segment andGeographic Information to our consolidated financial statements.Codman Specialty SurgicalOur Codman Specialty Surgical business,previously known as Specialty Surgical Solutions,offersglobal,market-leading technologies,brands and instrumentation.The product portfolio represents
120、 acontinuum of care from pre-operative,to the neurosurgery operating room,to the neuro-critical care unitand post care for both adult and pediatric patients suffering from brain tumors,brain injury,cerebrospinalfluid pressure complications and other neurological conditions.The acquisition of Codman
121、Neurosurgery from Johnson&Johnson increased our global direct salesrepresentation and international presence.This acquisition expanded the product portfolio of our world-renowned technologies in dural repair,ultrasonic tissue ablation,intracranial cranial pressure(“ICP”)monitoring,hydrocephalus mana
122、gement,and cranial stabilization systems,while providing a rich researchand development pipeline for growth.Rounding out the portfolio is a catalog of surgical headlamps,surgical instrumentation,as well as assetmanagement software and support,and after-market service.With thousands of surgical instr
123、umentproducts,including specialty surgical instruments,we call on the central sterile processing unit of hospitalsand acute care surgical centers.Additionally,through a strong U.S.distribution model,we can serve theneeds of hundreds of physicians,dental and veterinary offices.Our global commercial n
124、etwork includes clinical specialists,a large direct global sales force andstrategic partnerships and distributors that serve hospitals,integrated health networks,group purchasingorganizations,clinicians,surgery centers and health care providers in North America,South America,Europe,Asia Pacific,Midd
125、le East and Africa.2Orthopedics and Tissue TechnologiesOrthopedics and Tissue Technologies products serve some of the fastest growing markets in themedical technology industry and provide solutions that primarily address the needs of orthopedic,plastic,reconstructive and general surgeons.These produ
126、cts focus on addressing soft tissue,nerve,and tendonrepairs as well as reconstruction in the hand,wrist,elbow,shoulder,ankle and foot.We sell regenerative technology products that can be used to provide treatment for acute wounds,suchas burns,chronic wounds,including diabetic foot ulcers,surgical ti
127、ssue repair including hernia repair,peripheral nerve repair and protection,and tendon repair.For extremity bone and joint reconstructionprocedures,we sell hardware products,such as bone and joint fixation and joint replacement devices,implants and instruments,which provide for the orthopedic reconst
128、ruction of bone in the hand,wrist,elbowand shoulder(Upper Extremity),and the foot,ankle and leg below the knee(Lower Extremity).The acquisition of Derma Sciences in 2017 gives us relevant scale in outpatient wound care,doublingour sales force in the United States(the“U.S.”),and broadening our base o
129、f business with advancedproducts such as Medihoney,weight offloading,and amniotic tissue.It also creates opportunities to furtherexpand our presence in the plastic and reconstructive surgery segments.We have made significant investments over the last two years with our channel expansion in the U.S.a
130、nd created four dedicated sales channels to have more focus and specialization within our call points todrive sustainable growth.We have a specialized sales organization composed of directly employed salesrepresentatives,as well as specialty distributors,organized based upon their call point.Our ext
131、remityorthopedics sales representatives call on surgeons who treat extremity orthopedic disorders,includingosteoarthritis,rheumatoid arthritis,wrist,ankle and shoulder arthroplasty,and other conditions requiringfoot or hand reconstruction.In addition,we sell our shoulder products through a specialty
132、 distributornetwork of sales agents who call on shoulder surgeons.Our wound reconstruction acute(inpatient)salesrepresentatives call on surgeons doing procedures in limb salvage,trauma,wound reconstruction and burns,while our advanced wound care sales representatives call on physicians who treat chr
133、onic wounds in theoutpatient wound care clinic setting.We also have a dedicated surgical reconstruction sales team focused onplastic and reconstructive surgery and hernia procedures with differentiated products.Finally,we have adistributor network focused on biologics.Outside the U.S.,we have a smal
134、l direct sales presence,primarily in certain European countries,Australia,New Zealand,and Canada,and use distributors in other international markets to sell certainproduct lines.This business segment also includes private-label sales of a broad set of our regenerative and woundcare technologies.Our
135、customers are other medical technology companies that sell to end markets primarilyin orthopedics,spine,surgical and wound care.RESEARCH AND DEVELOPMENT STRATEGYOur research and development activities focus on identifying unmet surgical needs and addressing thoseneeds with innovative solutions and p
136、roducts.We apply our core competency in regenerative technology toproducts for neurosurgical,orthopedic and wound applications,and we have extensive programs for our coreplatforms of orthopedic hardware and electromechanical technologies.We are focusing our research anddevelopment efforts on product
137、s and clinical studies to generate efficacy and health economic evidence.Regenerative Technologies.Integra was the first and only company to receive a United States Food andDrug Administration(“FDA”)claim for regeneration of dermal tissue and is a world leader in regenerativetechnology.Because regen
138、erative technology products represent a fast-growing,high-margin opportunity for us,3we allocate a large portion of our research and development budget to these projects.Our regenerativetechnology development program applies our expertise in bioengineering to a range of biomaterials includingnatural
139、 collagen and human tissues as well as synthetics such as polymers.These unique product designs are usedfor neurosurgical and orthopedic surgical applications,as well as dermal regeneration,including the healing ofchronic and acute wounds,tendon and nerve repair.Our regenerative technology platform
140、includes our legacyIntegraDermal Regeneration Template(IDRT)products and complementary technologies that we haveacquired over the last few years.Our collagen manufacturing capability,combined with our history ofinnovation,provides us with strong platform technologies for multiple indications.In 2017
141、,we introduced sevennew regenerative technology products,including new sizes of PriMatrixand Omnigraft.Orthopedic Reconstruction.We develop fixation and small joint reconstruction implants and instruments forupper and lower extremities to both provide next generation solutions and expand our product
142、 portfolio.Thisportfolio focuses on joint replacement products.Integra already has a strong shoulder portfolio,which includes atotal shoulder system and a reverse shoulder.We continue to work on advanced shoulder products and aredeveloping next generation anatomical designs and bone preserving techn
143、iques and a pyrocarbon hemi-shoulderproduct to add to that portfolio.We have a strong differentiated asset that resides in our exclusively licensedpyrocarbon products,and we continue to invest to bring new products to market with this technology,which hasshown significantly less wear on bone than tr
144、aditional metals.In 2017,we launched non-randomized,prospective,multi-center post-market studies in the U.S.,Europe and Canada to evaluate 2-year implantsurvivorship in subjects who received the CadenceTotal Ankle System for primary ankle arthroplasty.We willfurther evaluate implant survivorship at
145、5 and 10 years post-operatively.Electromechanical Technologies and Instrumentation.Because our electromechanical products andinstruments address significant needs in surgical procedures and limit uncertainty for surgeons,we continue toinvest in approvals for new indications and next generation impro
146、vements to our market-leading products.Wehave several active programs focused on life cycle management and innovation,for capital and disposableproducts in our portfolio.Our product development efforts are focused on core clinical applications in cerebralspinal fluid(CSF)management,neuro-critical ca
147、re(NCC)monitoring,electrosurgery and ultrasonic medicaltechnologies.We also work with several instrument partners to bring new surgical instrument patterns to themarket,enabling us to add new instruments with minimal expense.Finally,our lighting franchise is among themost dynamic in the industry,and
148、 we continue to invest in ongoing development in LED technology.COMPETITIONOur competitors for Codman Specialty Surgical are the Aesculap division of B.Braun Medical,Inc.,Medtronic,Inc.,Stryker Corporation and Becton,Dickinson and Company.In addition,we compete with manysmaller specialized companies
149、 and larger companies that do not otherwise focus on the offerings that CodmanSpecialty Surgical technologies does.We rely on the depth and breadth of our sales and marketing organization,our innovative technology,and our procurement and manufacturing operations to maintain our competitiveposition.O
150、ur competition in Orthopedics and Tissue Technologies includes the DePuy/Synthes business ofJohnson&Johnson,Stryker Corporation,Wright Medical Group,N.V.,Smith&Nephew plc,MiMedx Group,Inc.,LifeCell Corporation,a subsidiary of Allergan PLC,and Zimmer Biomet Holdings,Inc.,as well as othermajor orthope
151、dic companies that carry a full line of small bone and joint fixation and soft tissue products.Finally,in certain cases our products compete primarily against medical practices that treat a conditionwithout using a medical device or any particular product,such as medical practices that utilize autog
152、raft tissueinstead of our dermal regeneration products,duraplasty products and nerve repair products.Depending on theproduct line,we compete on the basis of our products features,strength of our sales force or distributors,sophistication of our technology and cost effectiveness of our solution.4GOVE
153、RNMENT REGULATIONWe are a manufacturer and marketer of medical devices,and therefore are subject to extensive regulation bythe FDA,the Center for Medicare Services of the U.S.Department of Health and Human Services,other federalgovernmental agencies and,in some jurisdictions,by state and foreign gov
154、ernmental authorities.Theseregulations govern the introduction of new medical devices,the observance of certain standards with respect tothe design,manufacture,testing,labeling,promotion and sales of the devices,the maintenance of certain records,the ability to track devices,the reporting of potenti
155、al product defects,the import and export of devices,and othermatters.United States Food and Drug AdministrationPrior to Integras acquisition of it,TEI Biosciences Inc.received a Warning Letter from the FDA datedMay 29,2015 for promoting the product SurgiMend for breast surgery applications that were
156、 not cleared in the510(k)process and do not have a PMA Approval for the indication.The FDA requested that TEI Biosciences Inc.immediately cease all activities that resulted in misbranding or adulteration of the product in commercialdistribution.The FDA also required TEI Biosciences Inc.to cease all
157、violations regarding promotion of theproduct for an indication that it was not cleared or approved for.TEI Biosciences Inc.responded with acorrective action plan to the FDA and took action to address the issues prior to the completion of the acquisition.The FDA agreed with the corrective action plan
158、 and cleared the Warning Letter on August 31,2017.The regulatory process for obtaining product approvals and clearances can be onerous and costly.The FDArequires,as a condition to marketing a medical device in the U.S.,that we secure a Premarket Notificationclearance pursuant to Section 510(k)of the
159、 Federal Food,Drug and Cosmetic Act(the“FD&C Act”)or anapproved PMA application(or supplemental PMA application).Obtaining these approvals and clearances cantake up to several years and may involve preclinical studies and clinical trials.The FDA also may require a post-approval clinical study as a c
160、ondition of approval.To perform clinical trials for significant risk devices in theU.S.on an unapproved product,we are required to obtain an Investigational Device Exemption(“IDE”)from theFDA.The FDA may also require a filing for approval prior to marketing products that are modifications ofexisting
161、 products or new indications for existing products.Moreover,after clearance/approval is given,if theproduct is shown to be hazardous or defective,the FDA and foreign regulatory agencies have the power towithdraw the clearance or approval,as the case may be,or require us to change the device,its manu
162、facturingprocess or its labeling,to supply additional proof of its safety and effectiveness or to recall,repair,replace orrefund the cost of the medical device.Because we currently export medical devices manufactured in the U.S.thathave not been approved by the FDA for distribution in the U.S.,we ar
163、e required to obtain approval/registration inthe country to which we are exporting and maintain certain records relating to exports and make these availableto the FDA for inspection,if required.Human Cells,Tissues and Cellular and Tissue-Based ProductsIntegra,through the acquisition of Derma Science
164、s and BioD LLC(“BioD”)is involved with the recovery,processing,storage,transportation and distribution of donated amniotic tissue.The FDA has specific regulationsgoverning human cells,tissues and cellular and tissue-based products,or HCT/Ps.An HCT/P is a productcontaining,or consisting of,human cell
165、s or tissue intended for transplantation into a human patient.Examplesinclude bone,ligament,skin and cornea.Some HCT/Ps fall within the definition of a biological product,medical device or drug regulated under theFD&C Act.These biologic,device or drug HCT/Ps must comply both with the requirements ex
166、clusivelyapplicable to HCT/Ps and,in addition,with requirements applicable to biologics,devices or drugs,includingpremarket clearance or approval from the FDA.Section 361 of the Public Health Service Act(“Section 361”),authorizes the FDA to issue regulations toprevent the introduction,transmission o
167、r spread of communicable disease.HCT/Ps regulated as“361”HCT/Ps5are subject to requirements relating to registering facilities and listing products with the FDA,screening andtesting for tissue donor eligibility,and Good Tissue Practice when processing,storing,labeling,and distributingHCT/Ps,includin
168、g required labeling information,stringent record keeping,and adverse event reporting.The American Association of Tissue Banks(“AATB”)has issued operating standards for tissue banking.Compliance with these standards is a requirement in order to become an AATB-accredited tissue establishment.In additi
169、on,some states have their own tissue banking regulations.We are licensed or have permits for tissuebanking in California,Florida,New York and Maryland.National Organ Transplant Act.Procurement of certain human organs and tissue for transplantation issubject to the restrictions of the National Organ
170、Transplant Act,which prohibits the transfer of certain humanorgans,including skin and related tissue for valuable consideration,but permits the reasonable paymentassociated with the removal,transportation,implantation,processing,preservation,quality control and storage ofhuman tissue and skin.Our su
171、bsidiary,BioD LLC is a registered Tissue Bank and is involved with the recovery,storage and transportation of donated human amniotic tissue.Amniotic tissue is considered an HCT/P.However,on June 22,2015,the FDA issued an Untitled Letteralleging that BioDs morselized amniotic membrane tissue based pr
172、oducts do not meet the criteria for regulationas HCT/Ps solely under Section 361 and that,as a result,BioD would need a biologics license to lawfully marketthose morselized products.Since the issuance of the Untitled Letter,BioD and more recently the Company havebeen in discussions with the FDA to c
173、ommunicate their disagreement with the FDAs assertion that certainproducts are more than minimally manipulated.The FDA has not changed its position that certain of the BioDacquired products are not eligible for marketing solely under Section 361.In November 2017,the FDA issued thefinal guidance docu
174、ment related to human tissue titled,“Regulatory Considerations for Human Cells,Tissues,and Cellular and Tissue-Based Products:Minimal Manipulation and Homologous Use”(the“HCT/P FinalGuidance”).The HCT/P Final Guidance maintains the FDAs position that products such as the Companysmorselized amniotic
175、membrane tissue based products do not meet the criteria for regulation solely as HCT/Ps.Inaddition,the FDA articulated a risk-based approach to enforcement and,while some uses for amniotic membranetissue based products would enjoy as much as thirty-six months of enforcement discretion,other high ris
176、k usescould be subject to immediate enforcement action.The Company does not believe the uses for its amnioticmembrane tissue based products fall into the high risk category.Revenues from BioD morselized amnioticmembrane based products for the year ended December 31,2017 were less than 1.0%of consoli
177、dated revenues.See“Item 1A.Risk FactorsCertain of our products are derived from human tissue and are subject toadditional regulations and requirements.”Medical Device RegulationsWe also are required to register with the FDA as a medical device manufacturer.As such,ourmanufacturing sites are subject
178、to periodic inspection by the FDA for compliance with the FDAs Quality SystemRegulations.These regulations require that we manufacture our products and maintain our documents in aprescribed manner with respect to design,manufacturing,testing and control activities.Further,we are requiredto comply wi
179、th various FDA requirements and other legal requirements for labeling and promotion.If the FDAbelieves that a company is not in compliance with applicable regulations,it may issue a warning letter,instituteproceedings to detain or seize products,issue a recall order,impose operating restrictions,enj
180、oin futureviolations and assess civil penalties against that company,its officers or its employees and may recommendcriminal prosecution to the U.S.Department of Justice.Medical device regulations also are in effect in many of the countries in which we do business outside theU.S.These laws range fro
181、m comprehensive medical device approval and Quality System requirements for someor all of our medical device products to simpler requests for product data or certifications.The number and scopeof these requirements are increasing.Under the European Union Medical Device Directive,medical devices must
182、meet the Medical Device Directive standards and receive CE Mark Certification prior to marketing in theEuropean Union(the“EU”).CE Mark Certification requires a comprehensive quality system program,technical6documentation and data on the product,which are then reviewed by a Notified Body.A Notified B
183、ody is anorganization designated by the national governments of the EU member states to make independent judgmentsabout whether a product complies with the requirements established by each CE marking directive.The MedicalDevice Directive,ISO 9000 series and ISO 13485 are recognized international qua
184、lity standards that are designedto ensure that we develop and manufacture quality medical devices.Other countries are also institutingregulations regarding medical devices or interpreting and enforcing existing regulations more strictly.Compliance with these regulations requires extensive documentat
185、ion and clinical reports for all of our products,revisions to labeling,and other requirements such as facility inspections to comply with the registrationrequirements.A recognized Notified Body audits our facilities annually to verify our compliance with the ISO13485 Quality System standard.Certain
186、countries,as well as the EU,have issued regulations that govern products that contain materialsderived from animal sources.Regulatory authorities are particularly concerned with materials infected with theagent that causes bovine spongiform encephalopathy(“BSE”),otherwise known as mad cow disease.Th
187、eseregulations affect our dermal regeneration products,duraplasty products,hernia repair products,biomaterialproducts for the spine,nerve and tendon repair products and certain other products,all of which contain materialderived from bovine tissue.Although we take great care to provide that our prod
188、ucts are safe and free of agentsthat can cause disease,products that contain materials derived from animals,including our products,may becomesubject to additional regulation,or even be banned in certain countries,because of concern over the potential forprior transmission.Significant new regulations
189、,a ban of our products,or a movement away from bovine-derivedproducts because of an outbreak of BSE could have a material,adverse effect on our current business or ourability to expand our business.See“Item 1A.Risk FactorsCertain of our products contain materials derivedfrom animal sources and may b
190、ecome subject to additional regulation.”Postmarket Requirements.After a device is cleared or approved for commercial distribution,numerousregulatory requirements apply.These include the FDA Quality System Regulations which cover the proceduresand documentation of the design,testing,production,contro
191、l,quality assurance,labeling,packaging,sterilization,storage and shipping of medical devices;the FDAs general prohibition against promoting productsfor unapproved or off-labeluses;the Medical Device Reporting regulation,which requires that manufacturersreport to the FDA if their device may have caus
192、ed or contributed to a death or serious injury or malfunctioned ina way that would likely cause or contribute to a death or serious injury if it were to recur;and the Reports ofCorrections and Removals regulation,which require manufacturers to report recalls and field corrective actionsto the FDA if
193、 initiated to reduce a risk to health posed by the device or to remedy a violation of the FD&C Act.Other regulationsAnti-Bribery Laws.In the U.S.,we are subject to laws and regulations pertaining to healthcare fraud andabuse,including anti-kickback laws and physician self-referral laws that regulate
194、 the means by which companiesin the health care industry may market their products to hospitals and health care professionals and may competeby discounting the prices of their products.Similar anti-bribery laws exist in many of the countries in which wesell our products outside the U.S.,as well as t
195、he United States Foreign Corrupt Practices Act(which addressesthe activities of U.S.companies in foreign markets).Our products also are subject to regulation regardingreimbursement,and U.S.healthcare laws apply when a customer submits a claim for a product that is reimbursedunder a federally funded
196、healthcare program.These global laws require that we exercise care in designing oursales and marketing practices,including involving interactions with healthcare professionals,and customerdiscount arrangements.See“Item 1A.Risk FactorsOversight of the medical device industry might affect themanner in
197、 which we may sell medical devices and compete in the marketplace.”Import-export.Our international operations subject us to laws regarding sanctioned countries,entities andpersons,customs,and import-export.Among other things,these laws restrict,and in some cases can prevent,U.S.companies from direct
198、ly or indirectly selling goods,technology or services to people or entities in certaincountries.In addition,these laws require that we exercise care in our business dealings with entities in and fromforeign countries.7Hazardous materials.Our research,development and manufacturing processes involve t
199、he controlled use ofcertain hazardous materials.We are subject to country-specific,federal,state and local laws and regulationsgoverning the use,manufacture,storage,handling and disposal of these materials and certain waste products.Webelieve that our environmental,health and safety procedures for h
200、andling and disposing of these materialscomply with the standards prescribed by the controlling laws and regulations.However,risk of accidentalreleases or injury from these materials is possible.These risks are managed to minimize or eliminate associatedbusiness impacts.In the event of this type of
201、accident,we could be held liable for damages that may result,andany liability could exceed our resources.We could be subject to a regulatory shutdown of a facility that couldprevent the distribution and sale of products manufactured there for a significant period of time,and we couldsuffer a casualt
202、y loss that could require a shutdown of the facility in order to repair it,any of which could have amaterial,adverse effect on our business.Although we continuously strive to maintain full compliance withrespect to all applicable global environmental,health and safety laws and regulations,we could i
203、ncur substantialcosts to fully comply with future laws and regulations,and our operations,business or assets may be negativelyaffected.Furthermore,global environmental,health and safety compliance is an ongoing process.Integra hascompliance procedures in place for compliance with Employee Health&Saf
204、ety laws,driven by a centrally ledorganizational structure that ensures proper implementation,which is essential to our overall business objectives.In addition to the above regulations,we are,and may be,subject to regulation under country-specific federaland state laws,including,but not limited to,r
205、equirements regarding record keeping,and the maintenance ofpersonal information,including personal health information.As a public company,we are subject to thesecurities laws and regulations,including the Sarbanes-Oxley Act of 2002.We also are subject to other present,and could be subject to possibl
206、e future,local,state,federal and foreign regulations.Third-Party Reimbursement.Healthcare providers that purchase medical devices generally rely on third-party payors,including,in the U.S.,the Medicare and Medicaid programs and private payors,such as indemnityinsurers,employer group health insurance
207、 programs and managed care plans,to reimburse all or part of the costof the products.As a result,demand for our products is and will continue to be dependent in part on the coverageand reimbursement policies of these payors.The manner in which reimbursement is sought and obtained variesbased upon th
208、e type of payor involved and the setting in which the product is furnished and utilized.Reimbursement from Medicare,Medicaid and other third-party payors may be subject to periodic adjustments asa result of legislative,regulatory and policy changes,as well as budgetary pressures.Possible reductions
209、in,oreliminations of,coverage or reimbursement by third-party payors,or denial of,or provision of uneconomicalreimbursement for new products may affect our customersrevenue and ability to purchase our products.Anychanges in the healthcare regulatory,payment or enforcement landscape relative to our c
210、ustomers healthcareservices have the potential to significantly affect our operations and revenue.Data Privacy and Cybersecurity Laws and Regulations.As a business with a significant global footprint,compliance with evolving regulations and standards in data privacy and cybersecurity(relating to the
211、confidentiality and security of our information technology systems,products such as medical devices,and otherservices provided by us)may result in increased costs,lower revenue,new complexities in compliance,newchallenges for competition,and the threat of increased regulatory enforcement activity.Ou
212、r business relies on thesecure electronic transmission,storage and hosting of sensitive information,including personal information,financial information,intellectual property,and other sensitive information related to our customers andworkforce.For example,in the U.S.the collection,maintenance,prote
213、ction,use,transmission,disclosure and disposalof certain personal information and the security of medical devices are regulated at the U.S.federal and state,andindustry levels.U.S.federal and state laws protect the confidentiality of certain patient health information,including patient medical recor
214、ds,and restrict the use and disclosure of patient health information by health careproviders.In addition,the FDA has issued guidance advising manufacturers to take cybersecurity risks intoaccount in product design for connected medical devices and systems,to assure that appropriate safeguards are in
215、place to reduce the risk of unauthorized access or modification to medical devices that contain software and8reduce the risk of introducing threats into hospital systems that are connected to such devices.The FDA alsoissued guidance on post market management of cyber security in medical devices.Outs
216、ide the U.S.,we are impacted by the privacy and data security requirements at the international,national and regional level,and on an industry specific basis.Legal requirements in these countries relating to thecollection,storage,handling and transfer of personal data and,potentially,intellectual pr
217、operty continue toevolve with increasingly strict enforcement regimes.In Europe,for example,we are subject to the EU dataprotection regulations,including the current EU Directive on Data Protection,which requires member states toimpose minimum restrictions on the collection,use and transfer of perso
218、nal data.A new EU General DataProtection Regulation(“GDPR”)that will become enforceable in May 2018 includes,among other things,arequirement for prompt notice of data breaches to data subjects and supervisory authorities in certaincircumstances and significant fines for non-compliance.The GDPR also
219、requires companies processing personaldata of individuals residing in the EU to comply with EU privacy and data protection rules.These laws and regulations impact the ways in which we use and manage personal data,protected healthinformation,and our information technology systems.They also impact our
220、 ability to move,store,and accessdata across geographic boundaries.Compliance with these requirements may require changes in businesspractices,complicate our operations,and add complexity and additional management and oversight needs.Theyalso may complicate our clinical research activities,as well a
221、s product offerings that involve transmission or useof clinical data.INTELLECTUAL PROPERTYWe seek patent and trademark protection for our key technology,products and product improvements,bothin the U.S.and in selected foreign countries.When determined appropriate,we have enforced and plan tocontinue
222、 to enforce and defend our patent and trademark rights.In general,however,we do not rely solely on ourpatent and trademark estate to provide us with any significant competitive advantages as it relates to our existingproduct lines.We also rely upon trade secrets and continuing technological innovati
223、ons to develop and maintainour competitive position.In an effort to protect our trade secrets,we have a policy of requiring our employees,consultants and advisors to execute proprietary information and invention assignment agreements uponcommencement of employment or consulting relationships with us
224、.These agreements also provide that allconfidential information developed or made known to the individual during the course of their relationship withus must be kept confidential,except in specified circumstances.AccuDrain,AmnioExcel,AmnioMatrix,BioDFactor,BioDFence,BioDOptix,BioDRestore,Bioguard,Bi
225、oMotion,Bold,Budde,Buzz,Cadence,Capture,Codman,Codman Certas,CodmanVersaTru,CRW,CUSA,DigiFuse,DirectLink,DuraGen,DuraSeal,First Choice,Hallu,HeliCote,HeliPlug,HeliTape,HeliMend,Helistat,Helitene,Integra,IntegraLink,IPP-ON,Isocool,Jarit,Licox,LimiTorr,Luxtec,MediHoney,MemoFix,MicroFrance,Miltex,Movem
226、ent,NeuraGen,NeuraWrap,NuGrip,Omnigraft,Omni-Tract,OSV II,Qwix,Padgett,Panta,PriMatrix,PyroSphere,Redmond,Ruggles,SafeGuard,Salto Talaris,Subtalar MBA,SurgiMend,TCC-EZ,TenoGlide,Ti6,Tibiaxys,TissueMend,Titan,TruArch,Uni-CP,Uni-Clip,Xtrasorband theIntegra logo are some of the material trademarks of I
227、ntegra LifeSciences Corporation and its subsidiaries.MAYFIELDis a registered trademark of SM USA,Inc.,and is used by Integra under license.EMPLOYEESAt December 31,2017,we had approximately 4,400 employees engaged in production and productionsupport for warehouse,engineering and facilities,quality as
228、surance,quality control,research and development,regulatory and clinical affairs,sales,marketing,administration and finance.Except for certain employees at ourfacilities in Austria,Belgium,Brazil,France,Germany,Italy and Mexico,none of our employees are subject to acollective bargaining agreement.9F
229、INANCIAL INFORMATION ABOUT GEOGRAPHIC AREASFinancial information about our geographical areas is set forth under“Item 7.Managements Discussionand Analysis of Financial Condition and Results of OperationsGeographic Product Revenues and Operations”and in our financial statements Note 15,Segment and Ge
230、ographic Information,to our consolidated financialstatements.SOURCES OF RAW MATERIALSIn general,raw materials essential to our businesses are readily available from multiple sources.For reasonsof quality assurance,availability,or cost effectiveness,certain components and raw materials are available
231、onlyfrom a sole supplier.Our policy is to maintain sufficient inventory of components so that our production will notbe significantly disrupted even if a particular component or material is not available for a period of time.Certain of our products,including our dermal regeneration products,duraplas
232、ty products,wound careproducts,bone void fillers,nerve and tendon repair products and certain other products,contain material derivedfrom bovine tissue.We take great care to provide that our products are safe and free of agents that can causedisease.In particular,the collagen used in the products th
233、at Integra manufactures is derived either from the deepflexor tendon of cattle less than 24 months old from New Zealand,a country that has never had a reported case ofbovine spongiform encephalopathy,or from the U.S.or from fetal bovine dermis.The World HealthOrganization classifies different types
234、of cattle tissue for relative risk of BSE transmission.Deep flexor tendonand fetal bovine skin are in the lowest-risk category for BSE transmission,and is therefore considered to have anegligible risk of containing the agent that causes BSE.SEASONALITYRevenues during our fourth quarter tend to be st
235、ronger than other quarters because many hospitals increasetheir purchases of our products during the fourth quarter to coincide with the end of their budget cycles in theU.S.In general,our first quarter usually has lower revenues than the preceding fourth quarter,the second andthird quarters have hi
236、gher revenues than the first quarter,and the fourth quarter revenues are the highest in theyear.The main exceptions to this pattern occur because of material intervening acquisitions.AVAILABLE INFORMATIONWe are subject to the informational requirements of the Securities Exchange Act of 1934,as amend
237、ed,(the“Exchange Act”).In accordance with the Exchange Act,we file annual,quarterly and special reports,proxystatements and other information with the Securities and Exchange Commission.You may view our financialinformation,including the information contained in this report,and other reports we file
238、 with the Securities andExchange Commission,on the Internet,without charge as soon as reasonably practicable after we file them withthe Securities and Exchange Commission,in the“SEC Filings”page of the Investor Relations section of ourwebsite at .You may also obtain a copy of any of these reports,wi
239、thout charge,from ourInvestor Relations department,311 Enterprise Drive,Plainsboro,NJ 08536.Alternatively,you may view orobtain reports filed with the Securities and Exchange Commission at the SEC Public Reference Room at100 F Street,N.E.in Washington,D.C.20549,or at the Securities and Exchange Comm
240、issions Internet site atwww.sec.gov.Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further informationon the operation of the public reference facilities.10SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSWe have made statements in this report,including statements under“Bus
241、iness”and“ManagementsDiscussion and Analysis of Financial Condition and Results of Operations”that constitute forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933,as amended(the“Securities Act”),and Section 21E of the Exchange Act.These forward-looking statements
242、 are subject to a number of risks,uncertainties and assumptions about us including,among other things:general economic and business conditions,both nationally and in our international markets;our expectations and estimates concerning future financial performance,financing plans and the impactof comp
243、etition;anticipated trends in our business;anticipated demand for our products,particularly capital equipment;our ability to produce collagen-based products in sufficient quantities to meet sales demands;our expectations concerning our ongoing restructuring,integration and manufacturing transfer and
244、expansion activities;existing and future regulations affecting our business,and enforcement of those regulations;our ability to obtain additional debt and equity financing to fund capital expenditures and workingcapital requirements and acquisitions;physicians willingness to adopt our recently launc
245、hed and planned products,third-party payorswillingness to provide or continue reimbursement for any of our products and our ability to secureregulatory approval for products in development;initiatives launched by our competitors;our ability to protect our intellectual property,including trade secret
246、s;our ability to complete acquisitions,integrate operations post-acquisition and maintain relationshipswith customers of acquired entities;our ability to remediate all matters identified in FDA observations and warning letters that we receivedor may receive;andother risk factors described in the sec
247、tion entitled“Risk Factors”in this report.You can identify these forward-looking statements by forward-looking words such as“believe,”“may,”“could,”“might,”“will,”“estimate,”“continue,”“anticipate,”“intend,”“seek,”“plan,”“expect,”“should,”“would”and similar expressions in this report.We undertake no
248、 obligation to publicly update or revise anyforward-looking statements,whether as a result of new information,future events or otherwise.In light of theserisks and uncertainties,the forward-looking events and circumstances discussed in this report may not occur andactual results could differ materia
249、lly from those anticipated or implied in the forward-looking statements.11ITEM 1A.RISK FACTORSRisks Related to Our BusinessOur operating results may fluctuate.Our operating results,including components of operating results such as gross margin and cost of productsales,may fluctuate from time to time
250、,and such fluctuations could affect our stock price.Our operating resultshave fluctuated in the past and can be expected to fluctuate from time to time in the future.Some of the factorsthat may cause these fluctuations include:economic conditions worldwide,which could affect the ability of hospitals
251、 and other customers topurchase our products and could result in a reduction in elective and non-reimbursed operativeprocedures;the impact of acquisitions and our ability to integrate acquisitions;the impact of our restructuring activities;expenditures for major initiatives,including acquired busine
252、sses and integrations thereof andrestructuring;the timing of significant customer orders,which tend to increase in the fourth quarter to coincide withthe end of budget cycles for many hospitals;market acceptance of our existing products,as well as products in development;the timing of regulatory app
253、rovals as well as changes in country-specific regulatory requirements;changes in the rates of exchange between the U.S.dollar and other currencies of foreign countries inwhich we do business;potential backorders,lost sales and expenses incurred in connection with product recalls or fieldcorrective a
254、ctions;disruption of our operations and sales resulting from extreme weather conditions or natural disastersthat damage our manufacturing or distribution facilities,the suppliers and service providers for thosefacilities,or the infrastructure in the locations of those facilities;our ability to manuf
255、acture and ship our products efficiently or in sufficient quantities to meet salesdemands;changes in the cost or decreases in the supply of raw materials,including energy,steel and honey;the timing of our research and development expenditures;reimbursement for our products by third-party payors such
256、 as Medicare,Medicaid,private and publichealth insurers and foreign governmental health systems;the ability to maintain existing distribution rights to and from certain third parties;the ability to maintain business if or when we opt to convert such business from distributors to a directsales model;
257、the ability of our new commercial sales representatives to obtain sales targets in a reasonable timeframe;the impact of changes to our sales organization,including channel expansion in the U.S.and increasedspecialization;peer-reviewed publications discussing the clinical effectiveness of the product
258、s we sell;inspections of our manufacturing facilities for compliance with Quality System Regulations(GoodManufacturing Practices)which could result in Form 483 observations,warning letters,injunctions or12other adverse findings from the FDA or from equivalent regulatory bodies,and corrective actions
259、,procedural changes and other actions that we determine are necessary or appropriate to address theresults of those inspections,any of which may affect production and our ability to supply our customerswith our products;changes in regulations or guidelines that impact the sales and marketing practic
260、es for products that wesell;the increased regulatory scrutiny of certain of our products,including products which we manufacturefor others,could result in their being removed from the market or involve field corrective actions thatcould affect the marketability of our products;enforcement or defense
261、 of intellectual property rights;changes in tax laws,or their interpretations;andthe impact of goodwill and intangible asset impairment charges if future operating results of theacquired businesses are significantly less than the results anticipated at the time of the acquisitions.The industry and m
262、arket segments in which we operate are highly competitive,and we may be unable tocompete effectively with other companies.There is intense competition among medical device companies.We compete with established medicaltechnology companies in many of our product areas.Competition also comes from early
263、-stage companies thathave alternative technological solutions for our primary clinical targets,as well as universities,researchinstitutions and other non-profit entities.In certain cases,our products compete primarily against medicalpractices that treat a condition without using a device or any part
264、icular product,such as the medical practices thatuse autograft tissue instead of our dermal regeneration products,duraplasty products and nerve repair products.Many of our competitors have access to greater financial,technical,research and development,marketing,manufacturing,sales,distribution,admin
265、istrative,consulting and other resources than we do.Our competitorsmay be more effective at developing commercial products.Our competitors may be able to gain market share byoffering lower-cost products or by offering products that enjoy better reimbursement methodologies from third-party payors,suc
266、h as Medicare,Medicaid,private and public health insurers and foreign governmental healthsystems.Our competitive position will depend on our ability to achieve market acceptance for our products,developnew products,implement production and marketing plans,secure regulatory approval for products unde
267、rdevelopment,obtain and maintain reimbursement coverage under Medicare,Medicaid,private and public healthinsurers and foreign governmental health systems,obtain patent protection and to produce products consistentlyin sufficient quantities to meet demand.We may need to develop new applications for o
268、ur products to remaincompetitive.Technological advances by one or more of our current or future competitors or their achievement ofsuperior reimbursement from Medicare,Medicaid,private and public health insurers and foreign governmentalhealth systems could render our present or future products obsol
269、ete or uneconomical.Our future success willdepend upon our ability to compete effectively against current technology as well as to respond effectively totechnological advances and changes in a customers requirements.Additionally,purchasing decisions of ourcustomers may be based on clinical evidence
270、or comparative effectiveness studies and,because of our vast arrayof products,we might not be able to fund the studies necessary to gain entry or maintain our position or providethe required information to compete effectively.Other companies may have more resources available to fundsuch studies.For
271、example,competitors have launched and have been developing products to compete with ourdural repair products,extremity reconstruction implants,regenerative skin,neuro critical care monitors andultrasonic tissue ablation devices,among others.Further,in the current environment of managed care,consolid
272、ation among health care providers,increased competition,and declining reimbursement rates,we havebeen increasingly required to compete on the basis of price.Competitive pressures could adversely affect ourprofitability.Given these factors,we cannot guarantee that we will be able to compete effective
273、ly or continue ourlevel of success in the areas in which we compete.13If there is a determination that the spin-off of SeaSpine is taxable for U.S.federal income tax purposes,then we and our stockholders that are subject to U.S.federal income tax could incur significant U.S.federalincome tax liabili
274、ties and,in certain circumstances,we could be required to indemnify SeaSpine formaterial taxes pursuant to indemnification obligations under the tax matters agreement.On July 1,2015,we completed the separation(the“Separation”)of our orthobiologics and spinal fusionhardware business,now known as SeaS
275、pine Holdings Corporation(“SeaSpine”),from the Company.Wereceived an opinion of Latham&Watkins LLP,tax counsel to us(the“Tax Opinion”),substantially to the effectthat(i)the contribution of the stock of SeaSpine Orthopedics Corporation to SeaSpine,together with the internaldistribution of the stock o
276、f SeaSpine to Integra(collectively,the“internal distribution”),will constitute areorganization under Sections 355 and 368(a)(1)(D)of the Internal Revenue Code of 1986,as amended(the“Code”)and(ii)the contribution of cash from us to SeaSpine(the“cash contribution”),together with thedistribution of the
277、 stock of SeaSpine to our shareholders(the“distribution”),will constitute a reorganizationunder Sections 355 and 368(a)(1)(D)of the Code.Based on this tax treatment,the distribution will be tax-free toIntegra and its stockholders for U.S.federal income tax purposes(except for any cash received in li
278、eu offractional shares).The Tax Opinion relied on certain facts,assumptions,representations and undertakings fromus and SeaSpine regarding the past and future conduct of the companiesrespective businesses and other matters.The Tax Opinion is not binding on the U.S.Internal Revenue Service(the“IRS”)o
279、r the courts.Notwithstandingthe opinion,the IRS could determine on audit that the internal distribution,the cash contribution and thedistribution should be treated as taxable transactions if it determines that any of the facts,assumptions,representations or undertakings we or SeaSpine have made is n
280、ot correct or has been violated,or that the internaldistribution,the cash contribution and the distribution should be taxable for other reasons,including as a result ofa significant change in stock or asset ownership after the distribution.If the distribution ultimately is determinedto be taxable,th
281、e distribution could be treated as a taxable dividend or capital gain to our stockholders for U.S.federal income tax purposes,and our stockholders could incur significant U.S.federal income tax liabilities.Inaddition,we would recognize gain in an amount equal to the excess of the fair market value o
282、f shares ofSeaSpine common stock distributed to our stockholders on the distribution date over our tax basis in such sharesof SeaSpine common stock.Moreover,we could incur significant U.S.federal income tax liabilities if it isultimately determined that the internal distribution does not qualify as
283、a transaction that is tax-free for U.S.federal income tax purposes.We may be subject to continuing contingent liabilities of SeaSpine following the spin-off.After the Separation,there are several significant areas where the liabilities of SeaSpine may become ourobligations.For example,under the Code
284、 and the related rules and regulations,each corporation that was amember of our consolidated U.S.federal income tax reporting group during any taxable period or portion of anytaxable period ending on or before the effective time of the spin-off is jointly and severally liable for the U.S.federal inc
285、ome tax liability of the entire consolidated tax reporting group for that taxable period.If SeaSpine isunable to pay any prior period taxes for which it is responsible,we could be required to pay the entire amount ofsuch taxes.Our current strategy involves growth through acquisitions,which requires
286、us to incur substantial costs andpotential liabilities for which we may never realize the anticipated benefits.In addition to internally generated growth,our current strategy involves growth through acquisitions.Between January 1,2015 and December 31,2017,we have acquired 7 businesses at a total cos
287、t of approximately$1.56 billion.We may be unable to continue to implement our growth strategy,and our strategy ultimately may beunsuccessful.A significant portion of our growth in revenues has resulted from,and is expected to continue toresult from,the acquisition of businesses or products complemen
288、tary to our own.We engage in evaluations ofpotential acquisitions and are in various stages of discussion regarding possible acquisitions,certain of which,if14consummated,could be significant to us.Any new acquisition could result in material transaction expenses,increased interest and amortization
289、expense,increased depreciation expense,increased operating expense,andpossible in-process research and development charges for acquisitions that do not meet the definition of a“business,”any of which could have a material,adverse effect on our operating results.Certain businesses thatwe acquire may
290、not have adequate financial,disclosure,regulatory,quality or other compliance controls at thetime we acquire them.As we grow by acquisition,we must manage and integrate the new businesses to bringthem into our systems for financial,disclosure,compliance,regulatory and quality control,realize economi
291、es ofscale,and control costs.If we cannot integrate acquired businesses and operations,manage the cost of providingour products or price our products appropriately,our profitability could suffer.In addition,acquisitions involveother risks,including diversion of management resources otherwise availab
292、le for development of our businessand risks associated with entering markets in which our marketing teams and sales force has limited experienceor where experienced distribution alliances are not available.Our future profitability will depend in part upon ourability to develop further our resources
293、to adapt to these new products or business areas and to identify and enterinto or maintain satisfactory distribution networks.Further,as a result of our acquisitions of other healthcarebusinesses,we may be subject to the risk of unanticipated business uncertainties,regulatory and othercompliance mat
294、ters or legal liabilities relating to those acquired businesses for which the sellers of the acquiredbusinesses may not indemnify us,for which we may not be able to obtain insurance(or adequate insurance),orfor which the indemnification may not be sufficient to cover the ultimate liabilities.We may
295、not be able toidentify suitable acquisition candidates in the future,obtain acceptable financing or consummate any futureacquisitions.Certain potential acquisitions are subject to antitrust and competition laws,which laws could impactour ability to pursue strategic acquisitions and could result in m
296、andated divestitures.If we are unsuccessful in ouracquisition strategy,we may be unable to meet our financial targets and our financial performance could bematerially and adversely affected.Our future financial results could be adversely affected by impairments or other charges.Since we have grown t
297、hrough acquisitions,we have$937.9 million of goodwill and$163.9 million ofindefinite-lived intangible assets as of December 31,2017.Under the authoritative guidance for determining theuseful life of intangible assets,we are required to test both goodwill and indefinite-lived intangible assets forimp
298、airment on an annual basis based upon a fair value approach,rather than amortizing them over time.We arealso required to test goodwill and indefinite-lived intangible assets for impairment between annual tests if anevent occurs such as a significant decline in revenues or cash flows for certain prod
299、ucts,or the discount ratesused in the calculations of discounted cash flow change significantly,or circumstances change that would morelikely than not reduce our enterprise fair value below its book value.If such a decline,rate change orcircumstance were to materialize,we may record an impairment of
300、 these intangible assets that could be materialto the financial statements.See“Managements Discussion and Analysis of Financial Condition and Results ofOperationsCritical Accounting Estimates”of this report.The guidance on long-lived assets requires that we assess the impairment of our long-lived as
301、sets,includingfinite-lived intangible assets,whenever events or changes in circumstances indicate that the carrying value maynot be recoverable as measured by the sum of the expected future undiscounted cash flows.As of December 31,2017,we had$995.7 million and$269.3 million of finite-lived intangib
302、le assets and property,plant andequipment,respectively.At December 31,2017,our trade names had a carrying value of$245.5 million and decisions relating to ourtrade names may occur over time.Additionally,we may discontinue certain products in the future as we continueto assess the profitability of ou
303、r product lines.As a result,we may need to record impairment charges oraccelerate amortization on certain trade names or technology-related intangible assets in the future.The value of a medical device business is often volatile,and the assumptions underlying our estimates madein connection with our
304、 assessments under the guidance may change as a result of that volatility or other factorsoutside our control and may result in impairment charges.The amount of any such impairment charges could be15significant and could have a material,adverse effect on our reported financial results for the period
305、 in which thecharge is taken and could have an adverse effect on the market price of our securities,including the notes and thecommon stock into which they may be converted.The adoption of healthcare reform in the U.S.and initiatives sponsored by other governments mayadversely affect our business,re
306、sults of operations and/or financial condition.Our operations may be substantially affected by potential fundamental changes in the global political,economic and regulatory landscape of the healthcare industry.Government and private sector initiatives to limitthe growth of healthcare costs are conti
307、nuing in the U.S.,and in many other countries in which we do business,causing the marketplace to put increased emphasis on the delivery of more cost-effective treatments.Theseinitiatives include price regulation,competitive pricing,coverage and payment policies,comparativeeffectiveness of therapies,
308、technology assessments and managed-care arrangements.The adoption of some or allof these initiatives could have a material,adverse effect on our financial condition and results of operations.For example,the Patient Protection and Affordable Care Act(the“Affordable Care Act”),which was signedinto law
309、 in March 2010,includes several provisions that impact our businesses in the U.S.The Affordable CareAct includes provisions that,among other things,reduce and/or limit Medicare reimbursement,require allindividuals to have health insurance(with limited exceptions),require detailed disclosure of gifts
310、 and otherremuneration made to healthcare professionals and impose new and/or increased taxes.Specifically,the lawrequires the medical device industry to subsidize healthcare reform by implementing a 2.3%excise tax,whichcommenced on January 1,2013,on the sale of certain medical devices by a manufact
311、urer,producer or importerof such devices in the U.S.In December 2015,President Obama signed into law The ConsolidatedAppropriations Act,which included a two-year moratorium on the 2.3%medical device excise tax,with theeffect such that medical device revenues earned in 2016 and 2017 were exempt from
312、such tax.On January 22,2018,President Trump signed into law a funding bill,which extended the moratorium on the medical deviceexcise tax for another two years through December 31,2019.Unless there is further legislative action during thattwo-year period,the medical device excise tax automatically wi
313、ll be reinstated for sales of medical devices on orafter January 1,2020.While this two-year moratorium on the medical device excise tax could provide a short-term benefit to the Company in terms of providing additional monies available to spend on various projects in2018 and 2019,we are unable to pr
314、edict what the long-term impact will have on our financial statements andfinancial performance.In addition,the Affordable Care Act encourages hospitals and physicians to work collaboratively throughshared savings programs,such as accountable care organizations,as well as other bundled payment initia
315、tives,which may ultimately result in the reduction of sales of medical devices and the consolidation of medical devicesuppliers that hospitals use.Since the adoption of the Affordable Care Act in 2010,the law has been challenged before the U.S.Supreme Court,and several bills have been and may contin
316、ue to be introduced in Congress to delay,defund orrepeal implementation of or amend significant provisions of the Affordable Care Act.In addition,there continuesto be ongoing litigation over the interpretation and implementation of certain provisions of the law.Furthermore,on January 20,2017,an exec
317、utive order was issued that,among other things,stated the intention of theadministration to repeal the Affordable Care Act and,pending that repeal,instructed the executive branch of theFederal government to defer or delay the implementation of any provision or requirement of the Affordable CareAct t
318、hat would impose a fiscal burden on any state or a cost,fee,tax or penalty on any individual,family,healthcare provider,health insurer,or manufacturer of pharmaceuticals or medical devices.On December 22,2017,President Trump signed into law the Tax Cuts and Jobs Act,which eliminates the penalty for
319、individuals who failto purchase acceptable health insurance starting in 2019 and will most likely result in the reduction in the numberof insured people in the U.S.We cannot predict whether the Affordable Care Act will be repealed,replaced,orfurther modified,what impact the Presidents executive orde
320、r will have on the implementation and enforcementof the provisions of the Affordable Care Act,or what impact the elimination of the penalty and resulting16reduction in the number of insured people in the U.S.will have on the demand and pricing for our products.Inaddition,if the Affordable Care Act i
321、s replaced or modified,we cannot predict what the replacement plan ormodifications would be,when the replacement plan or modifications would become effective,or whether any ofthe existing provisions of the Affordable Care Act would remain in place.As a result,while we are unable topredict the effect
322、 of the Affordable Care Act and the various activities surrounding it on our business,financialcondition or results of operations,changes to this law,or a new law that replaces it,could materially andadversely affect our business and results of operations.In addition to the Affordable Care Act,the M
323、edicare Access and CHIP Reauthorization Act of 2015(“MACRA”)repealed the Sustainable Growth Rate formula used to calculate Medicare payment updates forphysicians providing services to Medicare beneficiaries.In its place,MACRA introduced the Quality PaymentProgram(“QPP”),which is a value-based progra
324、m that focuses on quality and outcomes as a metric for physicianreimbursement.The Centers for Medicare and Medicaid Services released its final rules for the QPP in October2016.The QPP,which impacts more than 600,000 physicians and other practice-based clinicians,represents afundamental change in ph
325、ysician reimbursement,transitioning from a system that solely rewards volume of careto one that also rewards quality and value of care.While the full impact of QPP on physicians practices andproduct selection decisions will not be fully known until payment adjustments go into effect in 2019,2017repr
326、esented the first performance measurement year.The programs increased emphasis on quality and cost ofcare may encourage physicians to merge practices or seek direct employment with hospitals.This shift could leadto a consolidation of a portion of our customer base,which could have a negative impact
327、on the rate of adoptionand utilization of the Companys new and existing products.Although we believe that we are well positioned tominimize any such impact on our business,our inability to address the consolidation trend could materially andadversely affect our business and results of operations.Oth
328、er initiatives sponsored by government agencies,legislative bodies and the private sector to limit thegrowth of healthcare costs,including price regulation and competitive pricing,are ongoing in the markets wherewe do business.We cannot predict what healthcare programs and regulations will ultimatel
329、y be implemented atthe U.S.federal or state level or elsewhere,or the effect of any future legislation or regulation in the U.S.orelsewhere.That said,any changes that lower reimbursements for our products or reduce medical procedurevolumes could have a material,adverse effect on our business,financi
330、al condition and results of operations.Wecontinue to monitor the implementation of such legislation and,to the extent new market or industry trends ornew governmental programs evolve,we will consider implementing or implement programs in response.Changes in the healthcare industry may require us to
331、decrease the selling price for our products,mayreduce the size of the market for our products,or may eliminate a market,any of which could have anegative impact on our financial performance.Trends toward managed care,healthcare cost containment and other changes in government and privatesector initi
332、atives in the U.S.and other countries in which we do business are placing increased emphasis on thedelivery of more cost-effective medical therapies that could adversely affect the sale and/or the prices of ourproducts.For example:third-party payors of hospital services and hospital outpatient servi
333、ces,including Medicare,Medicaid,private and public health insurers and foreign governmental health systems,annually revise theirpayment methodologies,which can result in stricter standards for reimbursement of hospital chargesfor certain medical procedures or the elimination of reimbursement;several foreign countries have implemented reforms of their respective healthcare sectors in an effort tore
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