NuVasive, Inc

NuVasive, Inc. Investor Day

December 10, 2015

Welcome Carol Cox

Executive Vice President, External Affairs and Corporate Marketing

©2015 NuVasive®, Inc.

Today’s Agenda

Topic Presenter

Carol Cox

Greg Lucier

Pat Miles

Steve Rozow

Matt Link

Jason Hannon

Quentin Blackford

Greg Lucier

Welcome

Why Invest in NuVasive

Take Share – Disruptive Technologies

Operational Excellence

Take Share – Commercialization

Take Share – Globalization

Deliver Shareholder Value

Key Takeaways

Question & Answer Session NUVA Management

3


Forward-looking information and non-GAAP measures Safe Harbor Statements

NuVasive, Inc. (“NuVasive,” “NUVA” or the “Company”) cautions you that statements included in this presentation that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause the Company's results to differ materially from historical results or those expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding the Company’s financial guidance for 2015, its preliminary expectations for 2016 and longer-term financial and business goals, including its growth plans to drive to $1 billion in revenue and beyond. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the risk that NuVasive’s financial guidance and expectations may turn out to be inaccurate because of the preliminary nature of the Company’s forecasts and projections; the risk of further adjustment to financial results or future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected growth and profitability; and those other risks and uncertainties more fully described in the Company’s news releases and periodic filings with the Securities and Exchange Commission.

Management also uses certain non-GAAP financial measures in this presentation which constitute “non-GAAP financial measures” as defined by the Securities and Exchange Commission. Management uses these non-GAAP financial measures to enable it to further and more consistently analyze the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional information to enable them to assess, in the same way management assesses, the Company’s current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures can be found on the Investor Relations section of the Company’s website.

4

Why Invest in NuVasive

Greg Lucier

Chairman and Chief Executive Officer


NuVasive Today

#3 player in the $9 billion global spine market

Pioneered lateral access spine surgery- XLIF®- 2003

Expert in

minimally invasive (MIS) maximum access surgery (MAS®)

The leading provider of

integrated MAS procedural systems

Clinical and economic value partners

6

Leading scale, innovative technology, strong partner relationships


Comprehensive Spine Portfolio Procedural solutions spanning lumbar, thoracic and cervical applications

Anterior/Lateral Posterior/Lateral

• XLIF®

• XLIF® Corpectomy

• ALIF®

• MAS® TLIF

• MAS® PLIF

• MAS® ILIF

• Open PLIF

• Open TLIF

• Posterior Fixation

Cervical Cervical

Thoracolumbar Thoracolumbar

• ACDF

• ACR

• PCM Cervical Disc

• Posterior Cervical Fusion

• Laminoplasty

Incredible breadth of solutions up and down the spine to address global market

7


NuVasive’s Purpose and Mission

Transforming Spine Surgery. Changing Lives.

Guiding principals driving the business forward

First be the Best. Then be the First.

8


Innovation Operational Excellence Profitable Growth

• Launched Integrated Global Alignment (iGA™) platform to help address proper alignment

• Introduced more than 10 new products and line extensions

• Strengthened lumbar performance

• Gained traction with new cervical offerings

Consistently Delivering on Commitments Achieved significant milestones over past 12 months

• Optimized organizational structure to become even more efficient and responsive

• Established world-class leadership team to drive next phase of growth and success

• Targeting new facility to support ~100% self-manufacturing goal

• Removed overhang of OIG investigation and NMP litigation

• Targeting ~7.9% constant currency full year 2015 revenue growth*

• Targeting full year 2015 non-GAAP operating profit margin of ~15.2%*

• Targeting full year 2015 adjusted EBITDA of ~25.4%*

• More than $450 million in cash, greatly adding to financial flexibility

*NuVasive financial performance guidance as of December 10, 2015 9


Strong History of Growth and Increasing Profitability

9.2%

11.4%

~15.2%*

5%

7%

9%

11%

13%

15%

2013 2014 2015

Disciplined execution of strategy delivers exceptional results

Global Revenue (In Millions)

Non-GAAP Operating Profit Margin

10 *NuVasive financial performance guidance as of December 10, 2015; ^On a constant currency basis

$685.2

$762.4

~$810.0*

$600

$650

$700

$750

$800

$850

2013 2014 2015(E) (E)


Momentum reflected in strong stock price performance Track Record of Shareholder Value Creation

11

50%

100%

150%

200%

250%

300%

350%

400%

^SPX - Share Pricing NasdaqGS:NUVA - Share Pricing

January 2013 December2015

NUVA Stock Up Nearly 225%

11


Relentless focus on driving shareholder

value

Operational excellence delivering significant

margin expansion

Compelling procedural solution fueling global

share-taking

NuVasive’s Formula for Success Optimizing approach to take business to the next level

12

Value


Driving Multi-Faceted Growth

Disruptive Technology: Category leader innovating at a generation above competitors

Commercial Success: Compel hospitals and surgeons to use more NuVasive technology and services

Globalization: Develop the scale to the grow International business to nearly double revenue contribution

Strong organic growth with numerous inorganic growth opportunities O

RGAN

IC

INO

RGAN

IC Strategic M&A: Pursue acquisitions and strategic partnerships that focus

on clear criteria: Support strategy Complementary to portfolio Geographic expansion Financial impact Add technological capabilities Proper return

13


Focus on operational excellence enhances long-term margin expansion Deliver Increasing Organic Profitability

11.4%

21.9%

~15.2%

~25.4% ~25.0%

~32.0%

0%

5%

10%

15%

20%

25%

30%

35%

2014 Actual 2015 Estimate Beyond $1 Billion in Revenue14 *NuVasive financial performance guidance as of December 10, 2015

Non-GAAP Operating Profit Margin*

Adjusted EBITDA*


Executing strategic goals to deliver compelling, profitable growth

Focused on Long-Term Value Creation

1. Drive revenue growth in mid to high single-digit range

2. Deliver nearly 1,000 basis points of non-GAAP operating profitability and improvement in adjusted EBITDA profile

3. EPS levers to deliver bottom-line growth ~2x revenue growth

4. Disciplined capital deployment delivers significant free cash flow improvement

15

Driving New Level of Success in a Dynamic Health Care Environment


Developed Countries Rising Costs of Care Aging Populations

Increase of Chronic or Degenerative Diseases

Cost per Capita $8,713 $3,235 $3,713 $4,819 $3,866 $1,048 $1,530

% of GDP 16.4% 8.5% 10.2% 11.0% 8.8% 6.2% 6.4%

Life Exp (yrs) 78.8 81.1 83.4 80.9 82.2 74.6 77.1

GLOBAL HEALTH CARE

$9,590,000,000,000 Spent Globally

Population of Treatable INCREASING

Why? Affluence

Innovation Social Expectation

Technology

Developing Countries Lack of Access

Lack of Infrastructure

US GER AUS MEX POL

Global health brings shared challenges and shared opportunities 17


Private Pay, 1.7

Govt, 1.4

U.S. HEALTH CARE

2014 Spend ($T)

11,000 baby boomers aging into Medicare

Daily

Consumerism Federal Government

5.8% Growth Rate 2014-2024

New Health Care Economy Technology/Data

High Deductible Plans, Exchanges, Retail Clinics

Value Insurers

Consolidating for Negotiating Power Proposed 2017 Value Multiplier for Community

Payment rate for High Quality/Low Cost Providers

+4.0X

Provider, Setter of Rules, Shaper of Markets

Information, Transparency, Remote Care

U.S. health care system is going though inescapable transformation 18


SPINE

600,000 Spine Surgeries Per Year in U.S.

Trends

$9.0 Billion Worldwide

$6.6 Billion U.S. – CAGR 2%

$2.4 Billion International – CAGR 7%

Back Pain is the Second Most

Popular Reason for Doctor’s

Visits

Spine Disorders Active Lifestyle Demographics

Surgery Proliferation

Non-Surgical Treatment Physical Therapy

Pain Management Chiropractic

Spine is a growing market with good trends 19


20

2.4

1.7 1.6

0.2

1.9 1.9

1.7

0.5

0.05

0.55

1.05

1.55

2.05

2.55

Market Dynamics Show Shift in Customer Perception

Higher scores indicate influencers who are more influential – today or in three years’ time – in hospitals’ purchasing decisions

Source: EY Pulse Hospital Survey of practicing physician and procurement officer customers from U.S., U.K., Germany and Spain

Today

In Three Years

Physicians CFO/Finance Procurement/Purchasing

Payers/ Insurers

Rank

ing

Physicians becoming less important influencers


21

Differentiating Differently Differentiation must be based on data and value

77%

55%

32%

22%

51%

27%

6%

77%

27% 22%

18%

62%

35%

25%

0%

20%

40%

60%

80%

100%

Price of Device PhysicianPreference forSpecific Device

User-FriendlyDesign

Training In Use DataDemonstrating

ClinicalOutcomes

DataDemonstrating

Value

Risk-SharingAgreements

Today

In Three Years

Participants asked to select three top factors in purchasing decisions today and those anticipated in three years’ time

Old Ways of Differentiation Are Less Relevant

Differentiation Based on Data and Value

Source: EY Pulse Hospital Survey of practicing physician and procurement officer customers from U.S., U.K., Germany and Spain


NuVasive’s Compelling Value Proposition

For customers and patients who want a partner dedicated to spine and only spine, NuVasive provides innovative predictable and reproducible procedurally integrated

solutions designed to deliver superior clinical outcomes that increase the value of care and tangible economic outcomes that decrease the cost of care.

NUVA Value Proposition

Superior Clinical Outcomes

Clinical Partners

Tangible Economic Outcomes

Economic Partners

Our product is a highly differentiated procedure

22


Patient Solutions Technology and patient driven solutions to engage, educate and maximize satisfaction

NuVasive’s Vision for the Future Focused on adding value through extended spine surgery continuum

From the exam room

To the operating room

Back to their “living” room

23

Diagnostics Technology to provide diagnosis objectivity - determine the “well-selected patient”

Devices and Therapies An integrated NuVasive Surgical Suite which addresses all requirements of spine surgery to enhance procedures and improve outcomes


24

Be part of something big and important. This isn’t a business strategy, it’s a MOVEMENT. It’s not evolutionary, it’s REVOLUTIONARY.

The NUVA Insurgency:


Taking it to new level with insurgency mindset Culture Remains Strongest Asset

25

Speed of Innovation Constantly introducing disruptive

innovation that offers value

Absolute Responsiveness Understanding, anticipating and

quickly responding to changing needs and priorities

Superior Clinical Outcomes Providing minimally invasive

procedural solutions that demonstrate outstanding results

Tangible Economic Outcomes Providing procedural predictability to

decrease cost of care


NuVasive’s Executive Leadership Team

Global Operations, Product Development, Clinical Resources & Product Marketing

Pat Miles, President & COO

U.S. Commercial Matt Link, President

Finance & Accounting Quentin Blackford, EVP & CFO

International Jason Hannon, EVP

External Affairs and Corporate Marketing

Carol Cox, EVP

Chairman & CEO Greg Lucier

Corporate Integrity & Human Resources

Pete Leddy, EVP

Enterprise IT Initiatives Johnson Lai, CIO

26

Strategy, Corporate Development, General Counsel

Jason Hanson, EVP


Relentless focus on driving shareholder value Why Invest in NuVasive

27

Disruptive Technology Commercial Success Globalization

Competitively positioned in large and growing global spine market with favorable transformative dynamics playing to NuVasive strengths

Industry-leading innovation and integrated procedural solutions

enables share-taking and premium pricing

Drive surgeon conversion, increase service line

partnerships and expand services integration

Double International revenue contribution in coming years

$9 Billion Global Spine Market

Drive for world-class operations

to deliver years of increasing

profitability

Achieve ~25% long-term non-GAAP operating

profit margin and ~32% adjusted EBITDA goals*

Optimized tax structure to help drive EPS growth

2x the rate of revenue growth*

Disciplined capital deployment for strategic M&A

and partnerships

Set to generate significant

increases in free cash flow

*NuVasive financial performance guidance as of December 10, 2015

Take Share – Disruptive Technologies Pat Miles

President and Chief Operating Officer

A Leading Pure-Play Spine Company

• Pioneered lateral approach to

spine fusion

• Focused on less invasive surgical procedures

• Extending expertise to entire spine procedure

• Focused on game-changing innovation

• Launched comprehensive alignment focused platform

Changing spine surgery and improving patient outcomes

29


Positioned as Industry Innovator Game-changing innovation designed to improve surgical outcomes

• Core focus on differentiated, less disruptive treatments • Providing clear clinical and economic value • Innovation and differentiation drive premium pricing and mix

benefits

30


Exceptionally Strong MIS Franchise Driving conversion from open to minimally invasive approach

31



Lumbar Cervical Biologics Monitoring

Complete breadth of offerings up and down the spine

Competitive Procedural Strength

32


33

• Investing in solutions for unmet clinical needs

• Focused on driving procedural evolution

• Constantly adding sophistication to competitively elevate offering

• Identify value aspects of procedure to avoid commoditization

• Exceptional innovation track record

Robust product planning to deliver 10 to 12 new products each year

R&D Focused on Adding Procedural Value

Decompression

Stabilization

Alignment

Three Tenets of Spine Surgery

Controlling Anterior Procedural Approach Highly differentiated anterior solutions provide superior outcomes

34

Drive innovation through focusing on unmet clinical needs and

demonstrating economic value

Improving Conventional Approaches

• PLIF (MAS PLIF) • TLIF (MAS TLIF) • ALIF (ACR)

PSO

ACR

High Morbidity

Low Morbidity

Constantly Adding Value to Procedure

• ALIF (ACR) • NuVaPlanning • InterOp Reconciliation • Surgical Access • Neuromonitoring • Intra-op CAS: Rod Bending

Conventional Approach

Anterior Approach

Procedural Integration


2016 Product Roadmap Continued strong pace of innovation throughout 2016

35



The Future of Spine

36

Image recognition

Data and information driven operative decisions

Robotics

Navigated guidance

3-D imaging and additive manufacturing

Combining innovation know-how with select technology solutions

Changing the Game Once Again

XLIF Created an Industry

Technology Development Market Making Commercial

Excellence

Clinical reality and application

Creation of core competency sets

Establish surgeon advisory board

Build market development, surgeon assistance, regulatory and clinical research teams

Clinical studies and peer-reviewed publications

Investments in cadaver labs and sales training teams

Operating Leverage

Deep expertise in bringing game-changing offering to market

Substantial sales investments

Surgeon education programs

Expand components of surgical solution

Customer facing sales and marketing teams

Significant infrastructure investments

Developed distribution facility

Dedicated clinical research teams

Substantive accounts contracted under national and strategic agreements

38



39

The above data represents typical outcomes of patients being treated for degenerative disc disease, spondylolisthesis and scoliosis; Source references include: 1) Oliveira L, et al. WscJ 2010;1:19-25, 2) Dakwar E, et al. Neurosurg Focus 2010;28(3):E8, 3) Dhall SS, et al. J Neurosurg Spine 2008;9:560-565, 4) Whitecloud TS, et al. J Spinal Disord 2001;14(2):100-103, 5) Deluzio KJ, et al. SAS Journal 2010;4:37-40, 6) Oszgur DM, et al. SAS Journal 2010;4:41-46, and 7) Park Y, et al. Spine 2007;32(5):537-543.

XLIF Delivers Exceptional Value Delivering superior, reproducible clinical and economic outcomes

BENEFITS XLIF SURGERY TRADITIONAL LUMBAR INTERBODY FUSION SURGERY

Blood Loss < 100 cc/level1,2 500-1,000 cc/level3,4

Hospital Stay 1-3 days1,5 3-6 days3-5

Walking Same day6 3 days7

Category-Winning Innovation with iGA™

Launch of Integrated Global Alignment (iGA) platform addresses next frontier in spine surgery – ALIGNMENT

Utilized in both minimally invasive and traditional approaches

Reshaping spine market with game-changing technology

40



Why Alignment is Important

41


iGA Solves Clinical Need Around Alignment

42


Extending iGA Reach to Degenerative Surgeons

43


Short-Segment Disease and Alignment

Sensitivity, specificity and positive predictive value of PI-LL mismatch of 12 degrees or more as

a predictor of symptomatic ALD/ASD

44



“I don’t need a plan for short segment surgery, I can eye it.”

45



PI: 70° LL: 43° PI-LL: 27°

PI: 70° LL: 49° PI-LL: 21°

“What I meant to say is can you bring that thing in?”

Focal vs. Regional View

46


Illustrative iGA Surgery Example Age: 65

Sex: Female

Physical Complaints: Bilateral radiating leg pain, low back pain

Previous Surgery: None

Surgical Plan: • L1-L5 XLIF with T10-S2 posterior fixation and possible

multi-level SPOs

• Intraoperative assessment using NuvaMap O.R. during Stage 1 allowed him to fuse and fixate less levels than surgical plan

• Surgical procedure: L2-L5 XLIF with L2-L5 posterior fixation (no SPOs needed!)

47


Calculate: Pre-Op Radiographic Evaluation

PT: -10° PI: 42° LL: -12° PI-LL: 30°

48


Calculate: Pre-Op Radiographic Evaluation

Surgical Plan: L1-L5 level XLIF with posterior fixation and SPOs from T10-S2

PT: -10° PI: 42° LL: -12° PI-LL: 30°

49


Correct: Intra-Op Radiographic Evaluation

PI: 42° LL: 30° PI-LL: 12°

“Thanks to NuvaMap O.R., the doctor realized he achieved enough correction from a 3-level XLIF and wouldn’t need additional compression from T12-S2”

50


Comparison: Radiographic Evaluation

PT: -10° PI: 42° LL: -12° PI-LL: 30°

Pre-Op and Intra-Op comparison after XLIF 3-level XLIF alone achieved 18° of correction

PI: 42° LL: 30° PI-LL: 12°

51


Correct: Intra-Op Radiographic Eval

Intra-Op assessment during stage 2 using NuvaMap O.R.

PI: 42° LL: 34° PI-LL: 8°

52


Calculate: Post-Op Radiographic Evaluation

PT: 16° PI: 42° LL: -38° PI-LL: 4°

53



PT: -10° PI: 42° LL: -12° PI-LL: 30°

Surgical Procedure: L2-L5 level XLIF with posterior

fixation from L2-L5

PT: 16° PI: 42° LL: -38° PI-LL: 4°

54


Confirm: Post-Op Reconciliation


PT: -10° PI: 42° LL: -12° PI-LL: 30°

PT: 16° PI: 42° LL: -38° PI-LL: 4°

Surgical Procedure: L2-L5 level XLIF with posterior

fixation from L2-L5

55


Strong early momentum at leading academic institutions Key Opinion Leaders Driving iGA Adoption

56


57

Increasing Awareness About iGA

Source: Raleigh-Durham ABC News affiliate


Industry-leading innovation remains foundation of category-winning technology that enables share-taking and premium pricing

Highly differentiated, integrated procedural solution provides demonstrated clinical and economic benefits to meet customer and patient demand

58

Disruptive Technologies Key Takeaways

Take Share – Commercialization Matt Link

President, U.S. Commercial


60

Accountable Care

Physician Employment

Aligned Incentives

Transparency

Supply Chain Disruptors

Value-Based Purchasing

New Care Models

Growing Evidence

Needs

Maturing Supply Chain

Consolidation

Current Health Care System Challenges Informing how NuVasive engages and sells into this market

Source: Healthcare Value Selling: (2014) Provines

Pressure on

Providers


Commercial Success through Business Model Innovation

• Clinical outcomes

• Technology • Personal time

Physicians

• Cost of surgical episode and clinical outcomes

Providers

• Total cost of quality care

Payers

• Total experience, cost and quick return to normal activities

Patients Who is influencing purchasing?

What do they care about?

Optimize Go-To-Market

Structure Position NuVasive to capitalize on changing market dynamics and take share!

Elevate Commercial

Strategy Surgeon Conversion Service Line Partnership Services Integration and Expansion

Structure to Drive Strategy

61

+ +


Taking Share: Commercial Success in Three Areas

Surgeon Conversion

Service Line Partnership

Service Integration

and Expansion

Commercial Success

62

Driving organic growth with multi-pronged go-to-market approach


63

• Focusing sales management on growth and territory development

• Aligning field staffing to support surgeon and account fulfillment

• Leveraging corporate strategy roles to drive market

• Optimizing management structure, resources and continued investment for growth

Optimize roles and responsibilities to fuel Commercial strategy Continuing to Evolve U.S. Field Sales Structure

• Focus on growth

• Perpetual emphasis on surgeon engagement

• Maintain a focus on procedural mix

Align Resources For Growth


NuVasive is a preferred destination for sale representatives Focused on Strategic Hiring

64

Strength of competitive offering attracting talented, experienced sales representatives

Implementing clinical associate model to allow for increased competitive conversion and drive sales force efficiencies

Expanding sales force in line with business needs while more effectively leveraging resources

NuVasive’s War Room


Shift focus in major markets for scalable growth and efficiencies Insurgency Approach to Market Growth

• Identified multiple large, underpenetrated major metropolitan U.S. markets

• Going deep in market and winning with differentiated offering

• Strategically investing in people and resources

• Dramatically increasing market share

• Driving revenue growth of 2x-3x greater than that of total Company

• Inherent operating efficiencies with scaling market

65


Drive Surgeon Engagement Leverage understanding of customer to inform initiatives

Spine Residency and Fellowship NuVasive

fellows and residents program

Practice Set-up

Continuous Surgeon

Education

Adopt New Technique

NuVasive business development programs

NuVasive surgeon education

NuVasive surgery Visiting Surgeon

Program (VSP) and peer-to-peer (P2P) meetings

Crucial Entry Points

NUVA Partnerships

66


Fellowships and Residencies Program

Current Program Spine Fundamentals: Pre-fellowship course Covers all spinal techniques

Intro To MAS: Early course to train chief neurosurgical residents and spine fellows

Covers XLIF and MAS TLIF

Preparing for a Career in Spine Surgery: Exiting course

Covers topics relevant to a surgeon starting a new practice

MVP- Intro to Spine course

MVP- Fundamentals

of Spine Surgery

Journal Club- Fusion

Fundamentals

Skills lab- Spine Approaches and Open Posterior Spine Fixation

Techniques

New practice considerations

e-learning presentation

Journal Club- XLIF

Fundamentals

Skill lab- Anterior Fusion

Techniques

Journal Club- Integrated

Global Alignment

Fundamentals

Preparing for a Career as a

Spine Surgeon MVP

Apply to Spine Fellowships

Orthopedic Boards

Arrival to Fellowship

Interviews for position upon

graduation

Accept an offer for new practice

Meet new local team

Graduation transition to new practice

Enhanced Approach

New course curriculum to create comprehensive NUVA experience

67

Jr. Ortho Resident

Ortho Chief

Resident August September October November December January February March April May June July


Surgeon Case Visitations to learn New Procedures

Surgeon Education Experience

Surgeon Education Today

San Diego Based Cadaveric Courses

San Diego Custom Product Training

Regional Peer Dinners for NuVasive Product Education

Customized surgeon experience based on

profile, influence, and background

Tailored programs when and where the surgeons want it

On-line education portals for surgeons to continuously learn

Technology to allow surgeons to connect with peers or proctors

Regional training within an hour flight from our top markets

Platinum experience programs in Brazil, Amsterdam, and San Diego

Reimagined Program Elements:

Surgeon Education Tomorrow

68

Leverage strong foundation and optimize usage to increase impact


The Need for Service Line Partnerships

Spine is growing in importance to a hospital

Spine contributes a significant amount to hospital’s bottom line

• Spine surgery is complex and risky with high degrees of variation in quality from great to very poor

• The larger players are not investing in spine

• Hospitals are seeking experts in the industry

69 Source: McKinsey & Co.


Aligning with Health Care Market Consolidation

From 2011 – 2014 the number of

hospital M&A deals doubled from

the previous four years

By 2020, the top 150 provider

systems will comprise 75% of spend

Focused beyond single surgeon needs to hospital system engagement

70 Source: McKinsey & Co.


Becoming a Preferred Partner for Spine Care Uniquely positioned to capitalize on dedicated service line partnerships

71

Clinical Fulfillment Design, Set-up and Supply OR

Patient Experience Attract Patients and Improve Satisfaction

Innovative Solutions Clinical Training, Support and Risk Sharing

• Standardized dual-source Neuro hardware agreement • Increased MAS/XLIF procedural training and adoption • Extensive training for attending and resident surgeons • Improved procedural integration/standardization • Single-sourced biologic supplier • Increased IOS integration • Enhanced operational efficiency

After NuVasive Service Line Partnership

• Hospital/physician alignment via co-management agreement • Desire to further standardize suppliers and pricing • Limited NuVasive presence • Multiple biologic suppliers • Multiple IOM service providers • Operational challenges with heavy dependence upon loaner

sets from numerous suppliers

Before NuVasive Service Line Partnership

Top 15 Health Care System Example


Roadmap for Services Expansion

• Global/hybrid billing increasingly challenged • Insurance collections much more volatile and less predictable • Product development needs to be linked to clinical feedback • IMI physician relations important to expedite acceptance of

technology • Responsiveness to customer’s clinical preference

Capitalize on market dynamics and drive services growth M

ARKE

T DY

NAM

ICS

G

ROW

TH • Target new territories where services and hardware bring value

• Target adjacent accounts within established markets • Seek preferred status, exclusivity or new contracts • Evaluate opportunities for inorganic services growth

72


Commercial success to drive surgeon conversion and lead to increased service line partnerships and increased services integration

Highly differentiated, integrated procedural solution provides demonstrated clinical and economic benefits to meet customer and patient demand

73

Commercial Key Takeaways

Take Share – Globalization Jason Hannon

Executive Vice President, International


Initial success and key learnings leading to reacceleration of momentum

• Japan, Australia, Italy – strong market presence

• Procedural strategy drives much of growth

• Go deep in key markets (first deep, then wide)

Strong International Growth to Over $100 Million

75

$55

$73

$103

$0

$20

$40

$60

$80

$100

$120

2012 2013 2014

International Revenue (In Millions)

*On a constant currency basis


~4% International market share leaves significant runway for growth NuVasive International Presence Today

76


Significant Opportunity to Take Share

LARGE >$100 Million*

• Japan - $350M • Germany - $275M • China - $250M • Brazil - $225M • UK - $140M • Italy - $130M • Australia - $130M • Spain - $110M

MEDIUM $25-$100 Million*

• Korea - $90M • Mexico - $75M • Benelux - $75M • France - $75M • Taiwan - $70M • Nordics- $60M • Argentina - $60M • Canada - $55M • Russia - $50M • India - $40M • Austria - $40M • Switzerland - $40M • Portugal - $30M

Global expansion to drive near doubling of International revenue

77 *NuVasive estimates


Established solid initial foothold in key markets globally International Success to Date

Most success in leading with core competencies around XLIF, procedural selling and superior clinical engagement

Strong early pioneering work

Traditional selling has been short-lived strategy

78

Clear Advantage of Procedural Focus

• Japan – Model of success – Superior clinical education for XLIF – In-country operators and logistics

• Procedural strategy is clear differentiator

– Requires sales force expertise – Capital intensive – Most protectable business

• iGA is significant International opportunity

– Market share growth projected in Western Europe, Japan, ANZ, Switzerland, Asia and Latin America

Demonstrated success in driving market and financial performance

79



Success Through Procedural Strategy

• Japan, Italy, ANZ, and Puerto Rico core procedural strategy (based on XLIF, later iGA) has been a recipe for success, strong pioneering work in U.K.

• Strong requirement for clinical education • Proctor engagement critical • Integration of anterior (lateral) approaches allows pull-through of posterior fixation

and biologics

55% 37%

21% 16% 14% 1% 24%

27%

32% 43%

26% 26%

12%

31%

14% 23% 28%

21% 36%

18%

26%

3% 8% 7%

37% 24%

70%

19%

0%

20%

40%

60%

80%

100%

Germany UK Japan Italy ANZ PR Total

% o

f Tot

al C

ases

NUVA Products Delivered per Case (estimates)

(Fixation, Implants, Biologics, NM)

1 Offering 2 Offerings 3 Offerings 4 Offerings1. One case assumed to equal one invoice 2. Excludes NM only invoices in Japan and Germany

Cases * 2.7K 2.5K 5.5K 1.3K 3.4K 1.9K 17.4K

80


Lead with highly competitive and differentiated technology Reaccelerating International Growth

Core procedural strategy is the recipe for success

• Strong requirement for clinical education

• Proctor engagement critical

• Integration of anterior (lateral) approaches allows pull-through of posterior fixation and biologics

• International markets have “matured” faster with posterior fixation because of Company lifecycle

81


Build infrastructure and aggressive cultural approach required to win

Playing to Strength to Take Share Globally

Globalize our Business Growth

Revenue Growth Market Development Opportunistic Investments Market plans in core markets

Globalize our Infrastructure

IT Systems Product Forecasting & Fulfillment Clear lines – San Diego vs. Local Prioritize investment by country

Globalize our Mindset

Market Needs are Consistent and can be Standardized (technology, service, training)

Market Realities are Local

Globalize our Talent

Coordination across Regions Performance Standards = Success Develop Star Talent Balance Local vs. Expat Roles

82

Example: Italian Market Overview 2014

83

A few KOL influence other surgeons

How do surgeons relate to each other?

Importance of Key Opinion Leader Partnership

84

Build a strong partnership with KOL

Surgeon Ed Program Scientific Research Congresses Podium Presentations

Facilitate and accelerate MIS/MAS acceptance ©2015 NuVasive®, Inc.

Key Opinion Leader Partnership

BERJANO – LAMARTINA CLASSIFICATION

85


Highly Differentiated MIS Technology

2015 Product Focus MAS PLATFORM XLIF PORTFOLIO

86

Procedural approach = MAS/MIS

2016 Product Focus Full Procedures iGA integration



• XLIF ACR Reconstruction • XLIF – Unique Interbody Implants • Reline Posterior Fixation • SSEPs • Propel Biologic • iGA and NUVA Planning • Bendini • Anterior and Oblique TLIF • Cervical ACR • Brigade Standalone and ALIF ACR

87

2016 Product International Launches Just to name a few…


Taking steps to drive strong growth for years to come

International Key Takeaways

• Making steady progress in recovery strategy

• Replicate success in markets like Japan, Australia and Italy

• Lead with competitive XLIF and iGA technology and differentiated procedural sell

• Reacceleration plans to drive positive momentum

• Look to complement organic International growth with opportunistic inorganic expansion in key expansion markets like China

88

Reacceleration plans to drive near doubling of International revenue

Operational Excellence

Stephen Rozow

Vice President, Global Operations


Innovation drove growth that outpaced operational maturation NuVasive Operations 2015

90

Greater than 305 days on hand 10% of loaner set demand unfulfilled Key sale force distraction Could not scale rapidly Designed for low mix, high volume product portfolio

X X X X X


My industry experience Bringing Greater Focus to Operations

• Dental manufacturing operations turnaround at Zimmer with 99% backorder reduction, 12% standard cost reduction and 28% improvement in days on hand in first year

• Restored performance of Zimmer, BV manufacturing from last in performance among network to 2nd best in 6 months

• Developed network optimization plan worth $97 million in total landed cost savings

• Built state-of-the-art knee manufacturing facility in Ireland and state-of-the-art investment casting facility in U.S.

• Established comprehensive 21 CFR Part 820 compliant Quality System in privately-held company, while radically improving service levels and reducing product costs

91

Early Quality Control Improvements May 2015

Today

92

• Reduced lead times

• Enhanced service levels

• Improved efficiencies


Early Manufacturing Improvements

93

• Fill with sustainable product mix

• More direct connection to customer demand

• Decreased lead times

• Increased service levels

• Better inventory management


Plan to Achieve World-Class Operations Tremendous upside with laser-focus on S&OP and distribution

• Designed and piloted process

• Deployed to 75% of product portfolio

• Adding three countries

• Complete product and global roll-out

• Enhance forecasting capabilities with sophisticated demand planning tools

• Scrub SAP/MRP configurations to deliver S&OP execution efficiencies and scalability

Sales & Operations Planning

+

• Enhance customer service “know-how” and tightly align team with sales organization

• Lean-out flow of stocking/ replenishment, loaner set processing and configurations

• Deploy automation for “pick, pack and ship” processes

• Right-size sets in loaner pool to drive improved asset utilization and service levels

• Enhance global inventory and asset tracking systems

Distribution

=

• Remove sales force distractions due to inadequate service levels

• Reducing days on hand of inventory

• Reducing capital expenditures

• Reducing cost of product

Outcomes


New Manufacturing Facility in Ohio

• Build-out of new facility in West Carrollton, OH to support self-manufacturing of select implants and instruments

• Invest ~$45 million over next 24 months to construct and equip new facility with state-of-the art equipment

• Expect to employ ~300 full-time, high-tech positions

• Expect to add ~100 CNC machine tools and advanced inspection equipment, as well as clean-room operations

• Support acceleration of non-GAAP operating profit margins

• Further align R&D and product development teams to optimize and accelerate product launches

• Enhance manufacturing presence in U.S. 95



Drive for world-class operations to deliver years of increasing profitability on path to achieve 25% long-term non-GAAP operating profit margin target

Optimizing manufacturing and asset management critical to efficiently supporting field and ensuring exceptional customer service

96

Operational Excellence Key Takeaways

Deliver Shareholder Value

Quentin Blackford

Executive Vice President and Chief Financial Officer

Earnings growth of approximately 2x topline growth

Significant gains in free cash flow

Multiple Value Creation Opportunities Three clear paths to creating greater shareholder value

98

1. Growing revenue at multiples of the market

2. Expanding the profitability profile to ~25% non-GAAP operating profit margin, increasing from previous expectations

3. Significant reduction to effective tax rate


NuVasive, Inc.

Significant Value Creation Opportunity Focused on closing the valuation gap

Evolving financial mindset with a focus on operational excellence will narrow the profitability gap over the next several years!

Revenue Multiple

Earnings Multiple

Peer Group*

Delta

~3.2x ~40x

~4.0x ~20x

~20% discount ~2x premium

*Peer group includes : JNJ, MDT, ZBT, SYK, GMED, LDRH, KTWO, ILS 99



Expanding MIS Market

Converting Traditional Market

International Growth

~$2.6 Billion U.S. Opportunity*

• Less disruptive treatments becoming standard of care

• Better patient outcomes • Demonstrated cost

savings • Differentiated products

and procedural solutions • Strategic service line

partnerships

Multiple Value Creation Opportunities Growing revenue at multiples of the market

~$4.0 Billion U.S. Opportunity*

• Applying leadership and “know-how” to improve traditional procedures

• Make traditional techniques less invasive

• Aggressively targeting new surgeon conversion to less invasive treatment

~$2.4 Billion Opportunity*

• Target large, rapidly-developing markets

• Direct sales effort established in key markets

• Refocusing market penetration to lead with XLIF technology

*NuVasive estimates 100

Driving U.S. Market Share Gains Innovation opens opportunities to new market segments

U.S. Market Share Estimates*

~11.0%

~12.5%

~14.0%

8%

9%

10%

11%

12%

13%

14%

15%

Today At $1 Billion in Revenue Beyond $1 Billion in Revenue

*NuVasive estimates ©2015 NuVasive®, Inc.

101

International Market Share Estimates*

~4.5%

~7.0%

~9.0%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


~13%

~14%

~73%

OUS Today OUS Share Gain U.S.

*NuVasive estimates ©2015 NuVasive®, Inc.

~27%

Geographic Revenue Contribution % of Total NUVA beyond $1 Billion

International Revenue Growth Significant Globalization provides scale to enable 2x revenue contribution

102


Executing well ahead of previous goals laid out in January 2015 Expanding Profitability Profile

103

11.4%

~15.2%

~20%

~25%

5%

10%

15%

20%

25%

30%

2014 2015 At $1Billion inRevenue

Beyond $1Billion inRevenue

11.4%

~14.4% ~15%

~20%

5%

10%

15%

20%

25%

30%

2014 2015 At $1Billion inRevenue


PREVIOUS Non-GAAP Operating Profit Margin Expansion Goals*

NEW Non-GAAP Operating Profit Margin Expansion Goals^

*NuVasive financial performance guidance as of February 24, 2015; ^NuVasive financial performance guidance as of December 10, 2015

~15.2%

~20%

~25%

~4.5%

~6.0%

~7.0%

2%

3%

4%

5%

6%

7%

8%


Increasing R&D Investment to Fuel Growth

Strategic R&D investments to fuel revenue growth

Exiting 2015 with portfolio of

90+ products

Goal of launching 10+ new products per year

Committed to innovation with incremental investment

R&D Investment Growing to ~7% of Revenue*

*NuVasive estimates 104



500

400

400

200

-

500

1,000

1,500

Core Operating Profit Margin Improvements

International Scalability – International non-GAAP operating profit margins moving to ~35%

In-Source Manufacturing – % select implants and instruments in-sourced moving to 100%

Asset Efficiencies – freight, SKU rationalization, set configurations, E&O reduction, facilities, support functions, etc.

Sales Force Efficiencies – tenure, coverage vs. quota carrying representatives, etc.

~1,500 Basis Points

105

Plans to capture ~1,500 basis points* of margin expansion

*NuVasive estimates

Asset Efficiencies Operational excellence driving~500 basis point* improvement

Asset Efficiencies

Inventory

Instruments

Freight

Facilities

IT Investments

Back-Office Support

Pre-Case Planning

Set Configuration

Manufacturing Cost Product Life Cycle

Management

Excess & Obsolescence

Lost, Damaged & Scrap

Inventory

# of Sets per Procedure

Set Depreciation

Consigned vs Loaned

Traceability of Assets

Manufacturing Cost

Instruments

106

©2015 NuVasive®, Inc. *NuVasive estimates

In-House Manufacturing Operational excellence driving ~400 basis point* improvement

~400 basis points of cumulative improvement from in-sourcing initiative

0.0% 0.0%

~1.0%

~1.5% ~1.5%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

2015 2016 2017 2018 2019

Key Benefits of In-House Manufacturing

Cost benefit vs. outsourcing Speed to market

Manage lead times Better manage supply risk

Key Components of Vertical Integration

Design engineering for manufacturability Process engineering for scalability

Efficient job scheduling Optimizing product mix

Reducing lead times and safety stock levels

Estimated Annual Benefits of In-Sourcing

107 *NuVasive estimates ©2015 NuVasive®, Inc.

International Scalability Operational excellence driving ~400 basis point* improvement

~13%

~20%

~27%

5%

10%

15%

20%

25%

30%

35%

40%

~11%

~25%

~35%

5%

10%

15%

20%

25%

30%

35%

40%

International Revenue Contribution %*

Non-GAAP Operating Profit Margin %*

International margins typically range from 35-45% for medical device companies As International revenue scales, operating profit margins move toward ~35%


Today Beyond $1 Billion in Revenue At $1 Billion in Revenue


Sales Force Efficiencies Operational excellence driving ~200 basis point* improvement

Sales Force Efficiencies

Direct vs Distributor

Mix

Reducing Spans & Layers

Aligning Incentives to Drive Growth

Investing In Quota

Carrying Reps

Investing In Clinical

Associates


Same account growth

New Surgeon Conversions

Incentives for Growth

Expanding Quota Carrying Reps & Clinical Associates

at a rate greater than revenue growth

Feet on the Street



(All figures are approximations)

2015 Estimate* Non-GAAP Operating

Profit Margin at ~20%*

Non-GAAP Operating Profit Margin at

~25%*

Gross Margin ~76.3% ~78.5% ~77.0% Sales, Marketing & Admin. ~56.6% ~52.5% ~44.5% Research & Development ~4.5% ~6.0% ~7.0% Operating Expenses ~61.1% ~58.5% ~51.5% Operating Margin ~15.2% ~20.0% ~25.0% EBITDA Margin ~25.4% ~28.0% ~32.0%

Driving non-GAAP operating profit margin toward ~25% beyond $1 billion in revenue with well-Identified long-term levers

Improvement Across Key Operating Metrics

110 *NuVasive financial performance guidance as of December 10, 2015

Enhanced expectations with updated long-term guidance


15.2%

~20%

~25%

1.2% 2.3%

2.4%

0.9% 0.7% 1.3%

1.6% 2.6%

4.0%

1.3%

10%

12%

14%

16%

18%

20%

22%

24%

26%

Operating Profit Margin Levers*


Closing the Gap in Profitability Performance Driving effective tax rate improvements in line with peer group

54%

~43%*

~33% ~30%

10%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

2014 2015 At $1 Billion in Revenue Beyond $1 Billion in Revenue

Effective Tax Rate*

112 *NuVasive financial performance guidance as of December 10, 2015 ©2015 NuVasive®, Inc.

Peer Group = ~32%

26%

7% 7%

40% 40% 40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Today At $1 Billion inRevenue

Beyond $1 Billionin Revenue

Earnings Mix : U.S. vs. International*

Significantly Reducing Effective Tax Rate

Operational structure implemented in 2014 and 2015

Increasing profitability in International business will lead to significant future

effective tax rate reductions

As International grows a greater portion of profits will be taxed in the

mid-high single digits driving the overall corporate rate significantly lower

(~13%) ~13%

~32%

113% ~87% ~68%

-20%

0%

20%

40%

60%

80%

100%

120%

Today At $1 Billion inRevenue


Effective Tax Rate*

X

X X

43%

33% 30%


Investments behind us to realize significant reduction in ETR


International U.S. Corporate


Multiple value creation components to drive significant EPS growth Multiple Levers for Value Creation

114

~7.0%

~6.0%

~4.0% ~15%

(~2.0%)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

Revenue Growth ProfitabilityImprovements

Reduced Tax Rate SharesOutstanding

Total

Contributions to Annual EPS Growth*



Significantly Improving Free Cash Flow Business optimization and prudent investment enhancing position

Cash Flow Drivers*

~25% CAGR*

Free Cash Flow Trend*

• Operating margin expansion

• Reducing ETR

• Improving inventory days on hand (DOH)

• Greater asset efficiencies to reduce CapEx

Focused on driving significant improvements to Free Cash Flow


~15.0%

~25.0%

Net Earnings Inventory CapEx &Other

Free CashFlow

~8% ~7% ~6%


Significantly Improving Free Cash Flow Focus on operational excellence to enhance free cash flow generation

CapEx % of Revenue*

• Reducing number of sets required per procedure

• Improving traceability of assets

• Set configurations

• Leveraging IT and facility investments

~ 305 ~ 270

~250


Inventory Days on Hand (DOH)* • Pre-case planning

• Set configurations

• Manufacturing cost reduction

• Optimizing supply chain

• Product life cycle management

• Minimizing excess and obsolete inventory



2015 2016 Longer-Term

Reiterated guidance from 3Q15 announcement

Expect 2015 revenue growth of ~7.9% constant currency

Expect 2015 operating profit margin of ~15.2%, or 380 basis point increase vs. 2014

Strong confidence in underlying performance and long-term prospects

Initiating revenue expectation of ~$870 million Expect ~100 basis points of operating margin profit improvement vs. 2015

Drive to mid to high single –digit constant currency growth

~25% non-GAAP operating profit margin beyond $1 billion in revenue

~32% adjusted EBITDA margin beyond $1 billion in revenue

Current Performance Expectations*


Key Takeaways Greg Lucier

Chairman and Chief Executive Officer


119

Hey… why don’t we manufacture

more???

Speed of Company and Culture Never Better

Moving at Cheetah Speed Six Months Later…

New 160,000 sq. ft. manufacturing facility in West Carrollton, OH


Relentless focus on driving shareholder value Why Invest in NuVasive

120

Disruptive Technology Commercial Success Globalization

Competitively positioned in large and growing global spine market with favorable transformative dynamics playing to NuVasive strengths

Industry-leading innovation and integrated procedural solutions

enables share-taking and premium pricing

Drive surgeon conversion, increase service line

partnerships and expand services integration

Double International revenue contribution in coming years

$9 Billion Global Spine Market

Drive for world-class operations

to deliver years of increasing

profitability

Achieve ~25% long-term non-GAAP operating

profit margin and ~32% adjusted EBITDA goals*

Optimized tax structure to help drive EPS growth

2x the rate of revenue growth*

Disciplined capital deployment for strategic M&A

and partnerships

Set to generate significant

increases in free cash flow


Questions and Answers

NuVasive, Inc. Investor Day

December 10, 2015

Documents

NuVasive, Inc