SEGMENT AND GEOGRAPHIC INFORMATION

The businesses are combined into operating groups, which have overlapping product offerings, geographical presence, customer bases, distribution channels and regulatory oversight. These operating groups are considered the Company’s reportable segments as the Company’s chief operating decision-maker regularly reviews financial results at the operating group level and uses this information to manage the Company’s operations. The accounting policies of the segments are consistent with those described for the consolidated financial statements in the summary of significant accounting policies (see Note 1, Significant Accounting Policies). The Company measures segment income for reporting purposes as net operating income before restructuring, impairments, and other costs, interest and taxes. Additionally, the operating groups are measured on net third party sales, excluding precious metal content. A description of the services provided within each of the Company’s four reportable segments is provided below. The disclosure below reflects the Company’s segment reporting structure.

During the first quarter of 2012, the Company realigned reporting responsibilities for multiple locations as a result of changes to the management structure. These changes also helped the Company gain operating efficiencies and effectiveness. The segment information below reflects the revised structure for all periods shown.

Dental Consumable and Laboratory Businesses

This segment includes responsibility for the design, manufacturing, sales and distribution of certain small equipment and chairside consumable products in the United States, Germany and certain other European regions. It also has responsibility for the sales and distribution of certain Endodontic products in Germany. This segment also includes the responsibility for the design, manufacture, sales and distribution of most dental laboratory products, excluding certain countries. This segment is also responsible for most of the Company’s non-dental business excluding medical products.

Orthodontics/Canada/Mexico/Japan

This segment is responsible for the world-wide manufacturing, sales and distribution of the Company’s Orthodontic products. It also has responsibility for the sales and distribution of most of the Company’s dental products sold in Japan, Canada and Mexico.

Select Distribution Businesses

This segment includes responsibility for the sales and distribution for most of the Company's dental products sold in France, United Kingdom, Italy, Austria and certain other European countries, Middle Eastern countries, India and Africa. Operating margins of the segment are reflective of the intercompany transfer price of products manufactured by other operating segments. Operating margins derived by the intercompany manufacture of the products are retained in those operating segments, and are not included in this group.

Implants/Endodontics/Healthcare/Pacific Rim

This segment includes the responsibility for the design, manufacture, sales and distribution of most of the Company’s dental implant and related products. This segment also includes the responsibility for the design and manufacturing of Endodontic products and is responsible for the sales and distribution of the Company’s Endodontic products in the United States, Switzerland, and locations not covered by other selling divisions. In addition, this business group is also responsible for sales and distribution of certain Endodontic products in Germany, Asia and other parts of the world. Additionally, this segment is responsible for the design and manufacture of certain dental consumables and dental laboratory products and the sales and distribution of most dental products sold in Brazil, Latin America (excluding Mexico), Australia and most of Asia (excluding India and Japan). This segment is also responsible for the world-wide design, manufacturing, sales and distribution of the Company's medical products (non-dental) throughout most of the world.

Significant interdependencies exist among the Company’s operations in certain geographic areas. Inter-group sales are at prices intended to provide a reasonable profit to the manufacturing unit after recovery of all manufacturing costs and to provide a reasonable profit for purchasing locations after coverage of marketing and general and administrative costs.

Generally, the Company evaluates performance of the segments based on the groups’ operating income, excluding restructuring and other costs, and net third party sales, excluding precious metal content.

The following table sets forth information about the Company’s segments for the years ended December 31, 2012, 2011 and 2010.



Third Party Net Sales
(in thousands)	2012			2011			2010

Dental Consumable and Laboratory Businesses	$	958,266		$	946,464		$	890,499
Orthodontics/Canada/Mexico/Japan	331,811			322,444			359,780
Select Distribution Businesses	294,643			300,544			272,622
Implants/Endodontics/Healthcare/Pacific Rim	1,347,380			973,296			701,417
All Other (a)	(3,671		)	(5,030		)	(3,304		)
Total net sales	$	2,928,429		$	2,537,718		$	2,221,014


(a)	Includes amounts recorded at Corporate headquarters.



Third Party Net Sales, Excluding Precious Metal Content
(in thousands)	2012			2011			2010

Dental Consumable and Laboratory Businesses	$	792,035		$	794,736		$	750,924
Orthodontics/Canada/Mexico/Japan	297,877			289,529			331,971
Select Distribution Businesses	288,348			292,087			264,743
Implants/Endodontics/Healthcare/Pacific Rim	1,340,109			961,267			687,422
All Other (b)	(3,671		)	(5,030		)	(3,304		)
Total net sales, excluding precious metal content	$	2,714,698		$	2,332,589		$	2,031,756
Precious metal content of sales	213,731			205,129			189,258
Total net sales, including precious metal content	$	2,928,429		$	2,537,718		$	2,221,014


(b)	Includes amounts recorded at Corporate headquarters



Intersegment Net Sales
(in thousands)	2012			2011			2010

Dental Consumable and Laboratory Businesses	$	220,229		$	220,671		$	223,504
Orthodontics/Canada/Mexico/Japan	4,000			4,065			4,105
Select Distribution Businesses	12,231			16,036			13,515
Implants/Endodontics/Healthcare/Pacific Rim	154,127			148,241			126,597
All Other (c)	221,867			211,658			179,780
Eliminations	(612,454		)	(600,671		)	(547,501		)
Total	$	—		$	—		$	—


(c)	Includes amounts recorded at Corporate headquarters and one distribution warehouse not managed by named segments.



Depreciation and Amortization
(in thousands)	2012		2011		2010

Dental Consumable and Laboratory Businesses	$	33,022	$	34,874	$	30,960
Orthodontics/Canada/Mexico/Japan	5,076		4,473		4,447
Select Distribution Businesses	1,311		1,203		1,476
Implants/Endodontics/Healthcare/Pacific Rim	87,324		41,886		22,297
All Other (d)	2,466		2,599		6,732
Total	$	129,199	$	85,035	$	65,912


(d)	Includes amounts recorded at Corporate headquarters.



Segment Operating Income (Loss)
(in thousands)	2012			2011			2010

Dental Consumable and Laboratory Businesses	$	227,912		$	210,239		$	208,873
Orthodontics/Canada/Mexico/Japan	16,596			15,753			42,106
Select Distribution Businesses	(339		)	2,496			12,197
Implants/Endodontics/Healthcare/Pacific Rim	282,436			210,900			209,384
All Other (e)	(118,949		)	(102,795		)	(81,303		)
Segment Operating Income	$	407,656		$	336,593		$	391,257

Reconciling Items:
Restructuring and other costs	25,717			35,865			10,984
Interest expense	56,851			43,814			25,089
Interest income	(8,760		)	(8,237		)	(4,254		)
Other expense (income), net	3,169			9,040			1,782
Income before income taxes	$	330,679		$	256,111		$	357,656


(e)	Includes results of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments. Amount recorded in 2011 includes $31.9 million of Astra Tech acquisition costs.



Capital Expenditures
(in thousands)	2012		2011		2010

Dental Consumable and Laboratory Businesses	$	18,912	$	20,391	$	15,639
Orthodontics/Canada/Mexico/Japan	9,071		7,494		2,432
Select Distribution Businesses	724		1,439		1,352
Implants/Endodontics/Healthcare/Pacific Rim	58,367		32,949		21,297
All Other (f)	4,998		8,913		3,516
Total	$	92,072	$	71,186	$	44,236


(f)	Includes capital expenditures of Corporate headquarters.



Assets
(in thousands)	2012		2011

Dental Consumable and Laboratory Businesses	$	1,007,307	$	1,180,001
Orthodontics/Canada/Mexico/Japan	294,348		328,376
Select Distribution Businesses	192,684		168,500
Implants/Endodontics/Healthcare/Pacific Rim	3,195,382		2,881,591
All Other (g)	282,576		196,930
Total	$	4,972,297	$	4,755,398


(g)	Includes assets of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments.

Geographic Information

The following table sets forth information about the Company's operations in different geographic areas for the years ended December 31, 2012, 2011 and 2010. Net sales reported below represent revenues for shipments made by operating businesses located in the country or territory identified, including export sales. Property, plant and equipment, net, represents those long-lived assets held by the operating businesses located in the respective geographic areas.



(in thousands)	United States		Germany		Sweden		Other Foreign		Consolidated

2012
Net sales	$	993,980	$	546,092	$	54,507	$	1,333,850	$	2,928,429
Property, plant and equipment, net	148,950		122,310		133,502		209,943		614,705

2011
Net sales	$	875,471	$	515,819	$	20,383	$	1,126,045	$	2,537,718
Property, plant and equipment, net	137,871		118,229		150,167		185,178		591,445

2010
Net sales	$	846,834	$	470,953	$	—	$	903,227	$	2,221,014
Property, plant and equipment, net	119,599		116,951		—		186,555		423,105

Product and Customer Information

The following table presents net sales information by product category:



	December 31,
(in thousands)	2012		2011		2010

Dental consumables products	$	768,098	$	766,385	$	717,718
Dental laboratory products	518,668		525,008		511,061
Dental specialty products	1,306,217		1,078,034		925,317
Consumable medical device products	335,446		168,291		66,918
Total net sales	$	2,928,429	$	2,537,718	$	2,221,014

Dental consumable products consist of dental sundries and small equipment products used in dental offices for the treatment of patients. DENTSPLY’s products in this category include dental anesthetics, infection control products, prophylaxis paste, dental sealants, impression materials, restorative materials, bone grafting materials, tooth whiteners and topical fluoride. The Company manufactures thousands of different consumable products marketed under more than a hundred brand names. Small equipment products consist of various durable goods used in dental offices for treatment of patients. DENTSPLY’s small equipment products include high and low speed handpieces, intraoral curing light systems and ultrasonic scalers and polishers.

Dental laboratory products are used in dental laboratories in the preparation of dental appliances. DENTSPLY’s products in this category include dental prosthetics, including artificial teeth, precious metal dental alloys, dental ceramics, crown and bridge materials, and equipment products used in laboratories consisting of computer aided machining (CAM) ceramic systems and porcelain furnaces.

Dental specialty products are specialized treatment products used within the dental office and laboratory settings. DENTSPLY’s products in this category include endodontic (root canal) instruments and materials, implants and related products, bone grafting material, 3D digital implantology, dental lasers and orthodontic appliances and accessories.

Consumable medical device products consist mainly of urological catheters, certain surgical products, medical drills and other non-medical products.

During 2012, the Company did not have any single customer that represented ten percent or more of DENTSPLY's consolidated net sales. In both 2011 and 2010, one customer, Henry Schein Incorporated, accounted for11% of DENTSPLY's consolidated net sales. Third party export sales from the U.S. are less than ten percent of consolidated net sales.