I126 - KPMG & Integra Life Sciences: Determination and Oracle R12 Deployment in the Medical Industry

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Vedha ChampatiSenior Manager, KPMG

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Confidential and Proprietary

Vedha ChampatiVedha is a Senior Manager in the Transaction Tax Systems practice at KPMG LLP (KPMG), specializing in tax automation with Oracle and custom solutions.

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Dan NormanSenior Manager, Integra Life Sciences

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Confidential and Proprietary

Dan NormanDan is a Senior Tax Manager at Integra and is responsible for Indirect Taxes, Domestic Income Tax Compliance, and maintenance of ONESOURCE Determination.

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Confidential and Proprietary

ObjectivesUpon completion attendees will be able to recognize and analyze the challenges involved in Global implementation of ONESOURCE with Oracle.

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Confidential and Proprietary

Historical Project Scope and Challenges• Global deployment of ONESOURCE Indirect Tax Determination

• Oracle R12 for APAC, NA, and EMEA• Manufacturing• Supply Chain• Purchasing• Sales (Order to Cash)

• Challenges• Intercompany Cross Border Transactions• Intercompany Transactions • Service and Repair• VAT Reporting/Compliance• Kitting• Travel Sets

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Confidential and Proprietary

Agenda

Integra Background

Project Overview

Challenges

VAT reporting and Compliance

1010

Integra

of Organic Revenue Growth from

New Product Introductions(Long Term Target)

30%~40%

2019E Guidance

~4,500Employees

>$5.0B Total Enterprise

Value

Reported Revenue Growth 3% - 4% Organic Growth ~5% Adj. EBITDA 24% - 24.5% Adj. EPS Growth 10% - 12%

Sales from Regenerative

Technology Products

International Sales

65%

35%

Orthopedics & Tissue Technologies

Codman Specialty Surgical

10%+

~$1.515 –1.525B*

1111

2018 Business Mix Products Select Markets

Neurosurgery

Precision Tools & Instruments

Wound Reconstruction

ExtremityOrthopedics

Private Label

CSS

Business & Market Composition O

TT

46% Neurosurgery US 3-5% GrowthNeurosurgery Asia 6-8%

19% Specialty Instruments ~3% GrowthGeneral Surgery 2-3%

7% Mid-single Digit Growth

21% Outpatient Wound 10-12% GrowthReconstructive Surgery ~10% Growth

7% Ankle Arthroplasty ~16% GrowthShoulder Market ~7% Growth

RegenerativeProducts

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Confidential and Proprietary

Project Overview

Global rollout of OITD with Oracle Application R12

52 Legal entities configured in OITD for Purchases and Sales, Gradual roll out since 2012

Countries:

• US• Canada• Germany• Belgium• Austria• UK• Netherlands • France• Italy• Ireland• Switzerland• Australia• New Zealand• China• Japan• Slovakia• Czech Republic

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Confidential and Proprietary

Recent European Go Live (February 2019)

Countries:

Germany Belgium Austria UK Netherlands France Ireland Switzerland Luxembourg

20 Legal entities configured in OITD for Purchases and Sales

Global rollout of OITD with Oracle Application R12

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Confidential and Proprietary

Challenges

Master data

Italy: Hybrid Model was used for Italy to handle unique reporting requirements.

Transfer of inventory from manufacturer to distribution

Travel Kits

Trunk Stock

Ship-to vs Deliver-to

Service and Repair

Triangulation

Sales Rep crossing borders

Using D&A for testing validation

User Training

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Confidential and Proprietary

• Strong Dedicated Team‒ KPMG

• Multiple Transactional Tax System Experts• VAT Specialized Knowledge

‒ Integra• Integra Tax Team US• Integra Tax Team Ireland• Integra Oracle Team

‒ Consultants• Testing

‒ Mapping• High Level Mapping• Detailed Flow Mapping

– VAT Treatment at the transactional Level‒ Testing

• 150 separate tests‒ Weekly Meetings‒ Developed a taxability matrix

• Purchases• Sales

Keys to Success

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Confidential and Proprietary

Keys to Success -

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Confidential and Proprietary

Keys to Success – Detailed flow Mapping of Goods and Invoice for VAT Purposes

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Confidential and Proprietary

Keys to Success

• Testing regime

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Confidential and Proprietary

Keys to Success

• Weekly Implementation Meeting

2020

Confidential and Proprietary

VAT Reporting and Compliance

Using ONESOURCE reporting for country specific reporting requirements

Utilizing D&A for reconciliation and transaction validation

Formatted data extracts for the compliance team for US and VAT

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Confidential and Proprietary

Notice• Some or all of the services described herein may not be permissible for KPMG audit clients and

their affiliates or related entities.

• The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

• The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

• The KPMG name and logo are registered trademarks or trademarks of KPMG International.

• © 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Thank you

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Thomson Reuters Tax & Accounting Corporate Software & Services is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.