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DISCONTINUED OPERATIONS | 9 Months Ended
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Sep. 30, 2015
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On October 29, 2014, Integra's Board of Directors approved the announcement of a plan to separate SeaSpine from Integra as a new, publicly traded medical technology company focused on the design, development and commercialization of surgical solutions for the treatment of patients suffering from spinal disorders. Integra's board of directors based this determination, in part, on its belief that the tax-free distribution of SeaSpine shares to Integra stockholders is the most efficient manner to separate our business from Integra's other medical technology businesses. On November 3, 2014, the Company announced its intention to separate its spine business, which was previously a separate reportable segment. On July 1, 2015, the Company completed the distribution of 100% of the outstanding common stock of SeaSpine to Integra stockholders, who received one share of SeaSpine common stock for every three shares of Integra common stock held as of the close of business on the record date, June 19, 2015. The Company and SeaSpine share three board members, including the chair of Integra’s board of directors who is lead director for SeaSpine. The separation agreement ensures that SeaSpine had approximately $47.0 million of total cash immediately following the distribution. No (gain) or loss was recognized on the part of the Company or shareholders as a result of the distribution resulting from the separation of the spine business. The historical results of operations, cash flows, and statement of financial position of SeaSpine have been presented as discontinued operations in the condensed consolidated financial statements and prior periods have been restated. Discontinued operations include results of SeaSpine's business except for certain allocated corporate overhead costs and certain costs associated with transition services provided by Integra to SeaSpine. These allocated costs will remain part of continuing operations. Discontinued operations also include other costs incurred by Integra to separate SeaSpine from Q4 2014 through Q2 2015. These costs include transaction charges, advisory and consulting fees, and information system expenses. For Q3 2015 and going forward, SeaSpine is a stand-alone public company that will separately report its financial results. Due to differences between the basis of presentation for discontinued operations and the basis of presentation as a stand-alone company, the financial results of SeaSpine included within discontinued operations for the Company may not be indicative of actual financial results of SeaSpine as a stand-alone company. The following table summarizes results from discontinued operations of SeaSpine included in the condensed consolidated statement of operations:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2015 |  | 2014 |  | 2015 |  | 2014
| (in thousands) |  | (in thousands)
Total revenue | $ | — |  |  | $ | 33,606 |  |  | $ | 65,775 |  |  | $ | 102,658 |
Costs and expenses | — |  |  | 32,986 |  |  | 80,618 |  |  | 102,077 |
Operating income (loss) | — |  |  | 620 |  |  | (14,843 | ) |  | 581 |
Other income (expense), net | — |  |  | (34 | ) |  | (766 | ) |  | (61 | )
Income (loss) from discontinued operations before tax | — |  |  | 586 |  |  | (15,609 | ) |  | 520 |
Provision (benefit) for income taxes | — |  |  | (231 | ) |  | (5,239 | ) |  | (428 | )
Net income (loss) from discontinued operations | $ | — |  |  | $ | 817 |  |  | $ | (10,370 | ) |  | $ | 948 |
No income or expense has been recorded for the SeaSpine business after the separation from Integra on July 1, 2015. The following table presents Integra's spine business assets and liabilities presented as discontinued operations as of December 31, 2014:
| December 31, 2014
| (in thousands)
Assets: |
Cash | $ | 260 |
Accounts receivable | 21,504 |
Inventory | 47,981 |
Other current assets | 30,040 |
Current assets of discontinued operations | 99,785 |
Property, plant, and equipment, net | 16,360 |
Intangible assets, net | 46,891 |
Other assets | 10,483 |
Non-current assets of discontinued operations | 73,734 |
Total assets of discontinued operations | $ | 173,519 |
Liabilities: |
Accounts payable | $ | 5,193 |
Accrued compensation | 6,300 |
Accrued expenses and other current liabilities | 2,287 |
Current liabilities of discontinued operations | 13,780 |
Other liabilities | 2,631 |
Long-term liabilities of discontinued operations | 2,631 |
Total liabilities of discontinued operations | $ | 16,411 |
The following table presents Integra's spine business assets and liabilities removed from the condensed consolidated balance sheet as of July 1, 2015:
| July 1, 2015
| (in thousands)
Assets: |
Cash | $ | 46,848 |
Accounts receivable | 21,273 |
Inventory | 49,380 |
Other current assets | 16,262 |
Current assets of discontinued operations | 133,763 |
Property, plant, and equipment, net | 21,079 |
Intangible assets, net | 42,837 |
Other assets | 4,449 |
Non-current assets of discontinued operations | 68,365 |
Total assets of discontinued operations | $ | 202,128 |
Liabilities: |
Accounts payable | $ | 7,065 |
Accrued compensation | 5,960 |
Accrued expenses and other current liabilities | 3,350 |
Current liabilities of discontinued operations | 16,375 |
Deferred tax liabilities | 13,329 |
Other liabilities | 2,500 |
Long-term liabilities of discontinued operations | 15,829 |
Total liabilities of discontinued operations | $ | 32,204 |
The removal of SeaSpine's net assets and unrealized accelerated currency translation adjustment is presented as a reduction in Integra's retained earnings. In order to effect the separation and govern Integra's relationship with SeaSpine after the separation, the Company entered into a Separation and Distribution Agreement and other agreements including a Tax Matters Agreement, an Employee Matters Agreement, several supply agreements, and a Transition Services Agreement. The Separation and Distribution Agreement governs the separation of the spine business, the transfer of assets and other matters related to the Company's relationship with SeaSpine. The Tax Matters Agreement governs the respective rights, responsibilities and obligations of SeaSpine and Integra with respect to taxes, tax attributes, tax returns, tax proceedings and certain other tax matters. The Employee Matters Agreement governs the compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of SeaSpine and Integra, and generally allocates liabilities and responsibilities relating to employee compensation, benefit plans and programs. The Employee Matters Agreement provides that employees of SeaSpine will no longer participate in benefit plans sponsored or maintained by Integra. In addition, the Employee Matters Agreement provides that each of the parties will be responsible for their respective former and current employees and compensation plans for such current employees. The Company entered into several Supply Agreements in which SeaSpine engaged Integra to be the product supplier of Integra's former Integra Mozaik TM product line ("Mozaik") for a three- year period following the separation after which there will be no defined terms and this will be considered a normal purchase/sale arrangement. This product line has been licensed to SeaSpine in conjunction with the spin-off. Prior to the spin-off, the sale of Mozaik products from an Integra facility to a SeaSpine facility eliminated in Integra's historical consolidated financial results of operations. The revenue and cost of goods sold related to prior sales of Mozaik to SeaSpine have been restated and are presented in Integra's continuing operations results of operations. The Company has recorded $1.9 million and $1.4 million in revenue related to the sale of Mozaik products for the three months ended September 30, 2015 and 2014, respectively and $1.1 million and $0.6 million in cost of goods sold for the three months ended September 30, 2015 and 2014, respectively, in its continuing operations. Additionally, the Company has recorded $7.5 million and $4.2 million in revenue for the nine months ended September 30, 2015 and 2014 and $2.4 million and $1.9 million in cost of goods sold for the nine months ended September 30, 2015 and 2014, respectively, in its continuing operations. Under the terms of the Transition Services Agreement, the Company agreed to provide administrative, site services, information technology systems and various other corporate and support services to SeaSpine over various periods after the separation on a cost or cost-plus basis. The most significant components of the service income is the provision of IT and legal services which the Company anticipates will be largely completed by the end of the first quarter of 2016. In the three and nine months ended September 30, 2015 other income (expense), net includes $1.8 million of income in respect of the provision of services to SeaSpine.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721533-107759 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721665-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5C -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51719941&loc=SL51724579-110230 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721663-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51719941&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5B -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721673-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721659-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721671-107760 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5D -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721677-107760 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1474-107760 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721683-107760 + Details
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