INTEGRA LIFESCIENCES HOLDINGS CORPIART
INTEGRA LIFESCIENCES HOLDINGS CORP Fair Value Disclosure
FAIR VALUE MEASUREMENTS
FASB Topic 820, Fair Value Measurement (“ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability.
Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three-level hierarchy of the inputs (i.e., assumptions that market participants would use in pricing an asset or liability) used to measure fair value, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable inputs in measuring fair value. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the entire fair value measurement. The three levels of the valuation hierarchy are defined as follows:
Level 1: Inputs to the valuation methodology are quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3: Inputs to the valuation methodology are unobservable inputs that are supported by little or no market activity and are based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company has investments in time deposits that are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices, as well as certain debt obligations that are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The investments in time deposits are classified as cash and cash equivalents and short-term investments on the consolidated balance sheets which is determined based on maturities at the time of purchase and re-evaluated at each balance sheet date.
The Company also has investments in derivative instruments, which are comprised of interest rate swaps, cross currency swaps, net investment hedges, and forward foreign currency contracts that are classified within Level 2 of the fair value hierarchy because they are valued using analyses obtained from independent third-party valuation specialists based on market observable inputs. The fair values of these derivative contracts represent the estimated amounts the Company would receive or pay to terminate the contracts. Refer to Note 6. Derivative Instruments for further discussion and information on these derivative contracts.
In addition, the Company has contingent consideration liabilities that are classified within Level 3 of the fair value hierarchy because they are measured at fair value using significant unobservable inputs, including management’s forecast of future revenues for the acquired businesses as well as management’s estimates of the likelihood of achieving the other specified criteria. Refer to Note 15. Commitments and Contingencies for additional information on these contingent consideration liabilities.
Assets and liabilities measured and recorded at fair value on a recurring basis as of December 31, 2025, 2024, and 2023 consisted of the following:
| Years Ended | ||||||||||||||
| Dollars in thousands | Fair Value Measurement | 2025 | 2024 | 2023 | ||||||||||
| Assets: | ||||||||||||||
| Cash and marketable securities | Level 1 | $ | 235,048 | $ | 246,375 | $ | 276,402 | |||||||
| Short-term investments | Level 1 | 28,693 | 27,192 | 32,694 | ||||||||||
| Interest rate swaps | Level 2 | 27,246 | 48,795 | 43,556 | ||||||||||
| Pension plan assets | Level 2 | 67,291 | 51,818 | 45,724 | ||||||||||
| Foreign currency forward contracts | Level 2 | 29 | ||||||||||||
| Foreign currency forward contracts (not designated as hedges) | Level 2 | 1,015 | 1,700 | 1,200 | ||||||||||
| Total Assets: | $ | 359,322 | $ | 375,880 | $ | 399,576 | ||||||||
| Liabilities: | ||||||||||||||
| Cross currency swaps | Level 2 | $ | 59,667 | $ | 4,367 | $ | 40,672 | |||||||
| Net investment hedges | Level 2 | 82,199 | 31,113 | 49,609 | ||||||||||
| Foreign currency forward contracts | Level 2 | — | 914 | — | ||||||||||
| Contingent consideration | Level 3 | 26,049 | 69,657 | 87,312 | ||||||||||
| Pension projected benefit obligation | 81,132 | 67,262 | 65,101 | |||||||||||
| Total Liabilities: | $ | 249,047 | $ | 173,313 | $ | 242,694 | ||||||||
There were no transfers into or out of Level 3 during the years ended December 31, 2025, December 31, 2024, and December 31, 2023.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company remeasures the fair value of certain assets and liabilities, including property, plant and equipment, operating lease - right of use assets, and goodwill and other intangible assets, upon the occurrence of certain events. The amounts recognized were recorded to remeasure the carrying amount of assets to the assets’ fair values, which were generally estimated, based upon a market participant’s perspective, using Level 3 measurements, including values estimated using the income approach.
Other than the fair value estimates disclosed in Note 4. Acquisitions and Divestitures, Note 7. Goodwill and Other Intangibles, and Note 11. Lease and Related Party Leases, there were no non-recurring fair value measurements during the years ended December 31, 2025, December 31, 2024, and December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.