SEGMENT AND GEOGRAPHIC INFORMATION

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The Company has numerous operating businesses covering a wide range of dental and certain healthcare products and geographic regions, primarily serving the professional dental market. Professional dental products represented approximately 89% and 88% of net sales for the three months ended March 31, 2015 and 2014, respectively.

The operating businesses are combined into operating groups, which generally 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 in the Company’s most recently filed Form 10-K in the summary of significant accounting policies. The Company evaluates performance of the segments based on the groups’ net third party sales, excluding precious metal content, and segment income. The Company defines net third party sales excluding precious metal content as the Company’s net sales excluding the precious metal cost within the products sold, and this is considered a non-US GAAP measure. The Company’s exclusion of precious metal content in the measurement of net third party sales enhances comparability of performance between periods as it excludes the fluctuating market prices of the precious metal content. The Company defines segment income as net operating income after the assignment of certain direct corporate costs and before restructuring and other costs, interest expense, interest income, other expense (income), net and provision for income taxes. A description of the products and services provided within each of the Company’s three reportable segments is provided below.

Significant interdependencies exist among the Company’s operations in certain geographic areas. Inter-segment 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.

During the first quarter of 2015, the Company realigned reporting responsibilities for multiple locations as a result of changes to the management structure. The segment information below reflects the revised structure for all periods shown.

Dental Consumables, Endodontic and Dental Laboratory Businesses

This segment includes responsibility for the design and manufacture of the Company’s chairside consumable products. It also has responsibilities for sales and distribution of certain small equipment and chairside consumable products in the United States, Germany and certain other European regions as well as responsibility for the sales and distribution of certain endodontic products in Germany and certain other European regions. In addition, this segment is responsible for the design, manufacture, sales and distribution of most of the Company’s dental laboratory products. This segment is also responsible for the design, manufacture, worldwide distribution and sales of certain non-dental products, excluding urological and surgery-related products

Healthcare, Orthodontic and Implant Businesses

This segment is responsible for the worldwide design, manufacture, sales and distribution of the Company’s healthcare products, primarily urological and surgery-related products, throughout most of the world. This segment also includes responsibility for the design, manufacture, sales and distribution of orthodontic and implant products, in most regions of the world. Additionally, segment is also responsible for the sales and distribution of most of the Company’s other dental products, including most dental consumables within Canada.

Select Developed and Emerging Markets Businesses

This segment has responsibilities for sales and distribution of chairside consumable, endodontic and dental laboratory products within certain European regions, Japan and Australia. This segment also includes the responsibility for the sales and distribution of most of the Company’s dental products, including most dental consumables, sold in Eastern Europe, Middle East, South America, Latin America including Mexico, Asia and Africa.

The following tables set forth information about the Company’s segments for the three months ended March 31, 2015 and 2014:

Third Party Net Sales

	Three Months Ended
(in thousands)	2015		2014
Dental Consumables, Endodontic and Dental Laboratory Businesses	$	310,316	$	339,281
Healthcare, Orthodontic and Implant Businesses	235,993		264,411
Select Developed and Emerging Markets Businesses	110,011		126,422
Total net sales	$	656,320	$	730,114

Third Party Net Sales, Excluding Precious Metal Content

	Three Months Ended
(in thousands)	2015		2014
Dental Consumables, Endodontic and Dental Laboratory Businesses	$	292,091	$	305,072
Healthcare, Orthodontic and Implant Businesses	235,810		264,204
Select Developed and Emerging Markets Businesses	103,645		119,906
Total net sales, excluding precious metal content	631,546		689,182
Precious metal content of sales	24,774		40,932
Total net sales, including precious metal content	$	656,320	$	730,114

Inter-segment Net Sales

	Three Months Ended
(in thousands)	2015			2014
Dental Consumables, Endodontic and Dental Laboratory Businesses	$	83,889		$	89,458
Healthcare, Orthodontic and Implant Businesses	1,774			2,461
Select Developed and Emerging Markets Businesses	2,876			3,517
All Other (a)	53,886			60,785
Eliminations	(142,425		)	(156,221		)
Total	$	—		$	—

(a) Includes amounts recorded at one distribution warehouse not managed by named segments.

Segment Operating Income (Loss)

	Three Months Ended
(in thousands)	2015			2014
Dental Consumables, Endodontic and Dental Laboratory Businesses	$	103,407		$	106,769
Healthcare, Orthodontic and Implant Businesses	26,529			24,524
Select Developed and Emerging Markets Businesses	(3,886		)	(1,292		)
Segment operating income	126,050			130,001
Reconciling Items (income) expense:
All Other (b)	22,915			23,638
Restructuring and other costs	5,426			793
Interest expense	10,668			10,955
Interest income	(742		)	(1,435		)
Other expense (income), net	609			388
Income before income taxes	$	87,174		$	95,662

(b) Includes the results of unassigned Corporate headquarter costs, inter-segment eliminations and one distribution warehouse not managed by named segments.

Assets

(in thousands)	March 31, 2015		December 31, 2014
Dental Consumables, Endodontic and Dental Laboratory Businesses	$	1,339,795	$	1,358,018
Healthcare, Orthodontic and Implant Businesses	2,456,208		2,655,622
Select Developed and Emerging Markets Businesses	341,380		369,844
All Other (c)	247,447		266,781
Total	$	4,384,830	$	4,650,265

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