Delaware | 39-1434669 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
221 West Philadelphia Street, York, PA | 17401-2991 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered |
Common Stock, par value $.01 per share | The NASDAQ Stock Market LLC |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
DENTSPLY SIRONA Inc. | ||||
Table of Contents | ||||
PART I | ||||
Page | ||||
Item 1 | Business | |||
Item 1A | Risk Factors | |||
Item 1B | Unresolved Staff Comments | |||
Item 2 | Properties | |||
Item 3 | Legal Proceedings | |||
Item 4 | Mine Safety Disclosure | |||
PART II | ||||
Item 5 | Market for Registrant’s Common Equity, Related Stockholder | |||
Matters and Issuer Purchases of Equity Securities | ||||
Item 6 | Selected Financial Data | |||
Item 7 | Management’s Discussion and Analysis of Financial Condition and | |||
Results of Operations | ||||
Item 7A | Quantitative and Qualitative Disclosures About Market Risk | |||
Item 8 | Financial Statements and Supplementary Data | |||
Item 9 | Changes In and Disagreements With Accountants on Accounting | |||
and Financial Disclosure | ||||
Item 9A | Controls and Procedures | |||
Item 9B | Other Information | |||
PART III | ||||
Item 10 | Directors, Executive Officers and Corporate Governance | |||
Item 11 | Executive Compensation | |||
Item 12 | Security Ownership of Certain Beneficial Owners and Management | |||
and Related Stock Matters | ||||
Item 13 | Certain Relationships and Related Transactions and Director | |||
Independence | ||||
Item 14 | Principal Accountant Fees and Services | |||
PART IV | ||||
Item 15 | Exhibits and Financial Statement Schedules | |||
• | Increasing worldwide population. |
• | Aging population in developed countries requires more dental care and is well positioned to pay for the required procedures since it controls sizable amounts of discretionary income. |
• | Natural teeth are being retained longer - Individuals with natural teeth are much more likely to visit a dentist in a given year than those without any natural teeth remaining. |
• | Earlier preventive care and a growing demand for aesthetic dentistry - Dentistry has evolved from a profession primarily dealing with pain, infections and tooth decay to one with increased emphasis on preventive care and cosmetic dentistry. |
• | Increasing demands for patient comfort and ease of product use and handling. |
• | Increasing demand for more efficiency and better workflow in the dental office, including digital and integrated solutions. |
• | Per capita and discretionary incomes are increasing in emerging markets. As personal incomes continue to rise in emerging economies, healthcare, including dental services, is a growing priority. Many surveys indicate the middle class population will expand significantly within these emerging markets. |
• | The Company’s business is less susceptible than many other industries to general downturns in the economies in which it operates. Many of the products the Company offers relate to dental procedures and health conditions that are considered necessary by patients regardless of the economic environment. Dental specialty products, dental equipment and products that support discretionary dental procedures are the most susceptible to changes in economic conditions. |
• | the inability to successfully combine DENTSPLY and Sirona’s businesses in a manner that permits Dentsply Sirona to achieve the full revenue and cost synergies anticipated to result from the Merger; |
• | complexities associated with managing the combined businesses, including the challenge of integrating complex systems, technology, networks and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies; |
• | coordinating geographically separated organizations, systems and facilities; |
• | addressing possible differences in business backgrounds, corporate cultures and management philosophies; |
• | integrating the workforces of the two companies while maintaining focus on providing consistent, high quality customer service; |
• | potential unknown liabilities and unforeseen increased or new expenses, delays or regulatory conditions associated with the Merger; |
• | Dentsply Sirona’s current and prospective employees may experience uncertainty about their roles within Dentsply Sirona following the Merger, which may have an adverse effect on the ability of Dentsply Sirona to attract or retain key management and other key personnel; and |
• | No assurance can be given that Dentsply Sirona will be able to attract or retain key management personnel and other key employees to the same extent that DENTSPLY and Sirona have previously been able to attract or retain employees, which could have a negative impact on their respective businesses. |
• | diversion of the attention of Dentsply Sirona’s management; |
• | disruption of existing relationships with distributors, suppliers and other manufacturers in the industry that drive a substantial amount of revenues to Dentsply Sirona; and |
• | the disruption of, or the loss of momentum in, Dentsply Sirona’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect Dentsply Sirona’s ability to maintain relationships with customers, suppliers, employees and other constituencies, Dentsply Sirona’s ability to achieve the anticipated benefits of the Merger, or which could reduce Dentsply Sirona’s earnings or otherwise adversely affect the business and financial results of Dentsply Sirona. |
• | the timing of new product introductions by Dentsply Sirona and its competitors; |
• | timing of industry trade shows; |
• | changes in customer inventory levels; |
• | developments in government reimbursement policies; |
• | changes in customer preferences and product mix; |
• | the Company’s ability to supply products to meet customer demand; |
• | fluctuations in manufacturing costs; |
• | changes in income tax laws and incentives which could create adverse tax consequences; |
• | fluctuations in currency exchange rates; and |
• | general economic conditions, as well as those specific to the healthcare and related industries. |
• | the pending patent applications that Dentsply Sirona has filed, or to which Dentsply Sirona has exclusive rights, may not result in issued patents or may take longer than Dentsply Sirona expects to result in issued patents; |
• | the allowed claims of any patents that are issued may not provide meaningful protection; |
• | Dentsply Sirona may be unable to develop additional proprietary technologies that are patentable; |
• | the patents licensed or issued to Dentsply Sirona may not provide a competitive advantage; |
• | other companies may challenge patents licensed or issued to Dentsply Sirona; |
• | disputes may arise regarding inventions and corresponding ownership rights in inventions and know-how resulting from the joint creation or use of intellectual property by Dentsply Sirona and Dentsply Sirona’s respective licensors; and |
• | other companies may design around the technologies patented by Dentsply Sirona. |
• | assert against others or defend Dentsply Sirona against claims of infringement; |
• | enforce patents owned by, or licensed to Dentsply Sirona from, another party; |
• | protect Dentsply Sirona’s trade secrets or know-how; or |
• | determine the enforceability, scope and validity of Dentsply Sirona’s proprietary rights or the proprietary rights of others. |
• | Economic and political instability; |
• | Import or export licensing requirements; |
• | Additional compliance-related risks; |
• | Trade restrictions and tariffs; |
• | Product registration requirements; |
• | Longer payment cycles; |
• | Changes in regulatory requirements and tariffs; |
• | Fluctuations in currency exchange rates; |
• | Potentially adverse tax consequences; and |
• | Potentially weak protection of intellectual property rights. |
• | making it more difficult for the Company to satisfy its obligations with respect to its indebtedness; |
• | requiring Dentsply Sirona to dedicate significant cash flow from operations to the payment of principal and interest on its indebtedness, which would reduce the funds the Company has available for other purposes, including working capital, capital expenditures and acquisitions; and |
• | reducing Dentsply Sirona’s flexibility in planning for or reacting to changes in its business and market conditions. |
Location | Function | Leased or Owned | ||
United States: | ||||
Milford, Delaware (1) | Manufacture of dental consumable products | Owned | ||
Sarasota, Florida (2) | Manufacture of orthodontic accessory products | Owned | ||
Des Plaines, Illinois (1) | Manufacture and assembly of dental handpieces | Leased | ||
Waltham, Massachusetts (2) | Manufacture and distribution of dental implant products | Leased | ||
Long Island City, New York (2) | Manufacture of dental technology products | Leased | ||
Charlotte, North Carolina (2) | Distribution of dental technology products | Leased | ||
Maumee, Ohio (1) | Manufacture and distribution of investment casting products | Owned | ||
Lancaster, Pennsylvania (3) | Distribution of dental products | Leased | ||
York, Pennsylvania (1) | Manufacture and distribution of artificial teeth | Owned |
and other dental consumable products | ||||
York, Pennsylvania (1) | Manufacture of small dental equipment, bone grafting | Owned | ||
products, and preventive dental products | ||||
Johnson City, Tennessee (1) | Manufacture and distribution of endodontic | Leased | ||
instruments and materials | ||||
Foreign: | ||||
Hasselt, Belgium (1) | Manufacture and distribution of dental products | Owned | ||
Petropolis, Brazil (1) | Manufacture and distribution of artificial teeth, | Owned | ||
dental consumable products and endodontic material | ||||
Pirassununga, Brazil (1) | Manufacture and distribution of artificial teeth | Owned/Leased | ||
Tianjin, China (1) | Manufacture and distribution of dental products | Leased | ||
Bensheim, Germany (2) | Manufacture and distribution of dental equipment | Owned | ||
Hanau, Germany (1) | Manufacture and distribution of precious metal dental | Owned | ||
alloys, dental ceramics and dental implant products | ||||
Konstanz, Germany (1) | Manufacture and distribution of dental consumable products | Owned | ||
Mannheim, Germany (2) | Manufacture and distribution of dental implant products | Owned/Leased | ||
Munich, Germany (1) | Manufacture and distribution of endodontic | Owned | ||
instruments and materials | ||||
Radolfzell, Germany (3) | Distribution of dental products | Leased | ||
Rosbach, Germany (1) | Manufacture and distribution of dental ceramics | Owned | ||
Bar Lev Industrial Park, Israel (2) | Manufacture and distribution of dental implant products | Owned/Leased | ||
Badia Polesine, Italy (1) | Manufacture and distribution of dental consumable products | Owned/Leased | ||
Otawara, Japan (1) (2) | Manufacture and distribution of precious metal dental | Owned | ||
alloys, dental consumable products and orthodontic products | ||||
Mexicali, Mexico (2) | Manufacture and distribution of orthodontic | Leased | ||
products and materials | ||||
Venlo, Netherlands (3) | Distribution of dental consumable products | Leased | ||
Katikati, New Zealand (1) | Manufacture of dental consumable products | Leased | ||
Warsaw, Poland (1) | Manufacture and distribution of dental consumable products | Owned | ||
Las Piedras, Puerto Rico (1) | Manufacture of crown and bridge materials | Owned | ||
Mölndal, Sweden (1) (2) | Manufacture and distribution of dental implant products and | Owned | ||
healthcare consumable products | ||||
Ballaigues, Switzerland (1) | Manufacture and distribution of endodontic | Owned | ||
instruments, plastic components and packaging material | ||||
Ankara, Turkey (1) | Manufacture and distribution of healthcare consumable products | Owned |
(1) | These properties are included in the Dental and Healthcare Consumables segment. |
(2) | These properties are included in the Technologies segment. |
(3) | This property is a distribution warehouse not managed by named segments. |
Market Range of Common Stock | Period-end Closing Price | Cash Dividend Declared | |||||||||||||
High | Low | ||||||||||||||
2016 | |||||||||||||||
First Quarter | $ | 63.68 | $ | 53.43 | $ | 61.63 | $ | 0.0775 | |||||||
Second Quarter | 65.83 | 58.84 | 62.04 | 0.0775 | |||||||||||
Third Quarter | 65.16 | 58.57 | 59.43 | 0.0775 | |||||||||||
Fourth Quarter | 62.92 | 55.01 | 57.73 | 0.0775 | |||||||||||
2015 | |||||||||||||||
First Quarter | $ | 53.85 | $ | 49.42 | $ | 50.89 | $ | 0.0725 | |||||||
Second Quarter | 53.72 | 49.81 | 51.55 | 0.0725 | |||||||||||
Third Quarter | 57.61 | 50.09 | 50.57 | 0.0725 | |||||||||||
Fourth Quarter | 63.45 | 49.48 | 60.85 | 0.0725 |
(in millions, except per share amounts) | Number of Shares that May Yet be Purchased Under the Stock Repurchase Program | |||||||||||||
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Cost of Shares Purchased | |||||||||||
October 1, 2016 to October 31, 2016 | 0.9 | $ | 58.28 | $ | 51.4 | 5.3 | ||||||||
November 1, 2016 to November 30, 2016 | 0.7 | 59.97 | 42.2 | 4.8 | ||||||||||
December 1, 2016 to December 31, 2016 | 0.4 | 57.90 | 21.9 | 4.6 | ||||||||||
2.0 | $ | 58.81 | $ | 115.5 |
(in millions, except share price) | |||||||
Plan Category | Securities to Be Issued Upon Exercise of Outstanding Options | Weighted Average Exercise Price per Share | Securities Available for Future Issuance | ||||
Equity compensation plans approved by security holders | 10.3 | $ | 41.08 | 36.4 |
12/11 | 12/12 | 12/13 | 12/14 | 12/15 | 12/16 | ||||||||||||
DENTSPLY SIRONA Inc. | 100.00 | 113.85 | 140.15 | 154.85 | 177.84 | 169.58 | |||||||||||
NASDAQ Composite | 100.00 | 116.41 | 165.47 | 188.69 | 200.32 | 216.54 | |||||||||||
S&P 500 | 100.00 | 116.00 | 153.58 | 174.60 | 177.01 | 198.18 | |||||||||||
S&P Health Care | 100.00 | 117.89 | 166.76 | 209.02 | 223.42 | 217.41 |
Year ended December 31, | |||||||||||||||||||
2016(a) | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Statement of Operations Data: | |||||||||||||||||||
Net sales | $ | 3,745.3 | $ | 2,674.3 | $ | 2,922.6 | $ | 2,950.8 | $ | 2,928.4 | |||||||||
Net sales, excluding precious metal content (b) | 3,681.0 | 2,581.5 | 2,792.7 | 2,771.7 | 2,714.7 | ||||||||||||||
Gross profit | 2,000.9 | 1,517.2 | 1,599.8 | 1,577.4 | 1,556.4 | ||||||||||||||
Restructuring and other costs | 23.2 | 64.7 | 11.1 | 13.4 | 25.7 | ||||||||||||||
Operating income | 454.7 | 375.2 | 445.6 | 419.2 | 381.9 | ||||||||||||||
Income before income taxes | 440.9 | 329.7 | 404.4 | 369.3 | 330.7 | ||||||||||||||
Net income | 431.4 | 251.1 | 322.9 | 318.2 | 318.5 | ||||||||||||||
Net income attributable to Dentsply Sirona | $ | 429.9 | $ | 251.2 | $ | 322.9 | $ | 313.2 | $ | 314.2 | |||||||||
Earnings per common share: | |||||||||||||||||||
Basic | 1.97 | 1.79 | 2.28 | 2.20 | 2.22 | ||||||||||||||
Diluted | 1.94 | 1.76 | 2.24 | 2.16 | 2.18 | ||||||||||||||
Cash dividends declared per common share | 0.310 | 0.290 | 0.265 | 0.250 | 0.220 | ||||||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||||
Basic | 218.0 | 140.0 | 141.7 | 142.7 | 141.9 | ||||||||||||||
Diluted | 221.6 | 142.5 | 144.2 | 145.0 | 143.9 | ||||||||||||||
Balance Sheet Data: | |||||||||||||||||||
Cash and cash equivalents | 383.9 | 284.6 | 151.6 | 75.0 | 80.1 | ||||||||||||||
Property, plant and equipment, net | 799.8 | 558.8 | 588.8 | 637.2 | 614.7 | ||||||||||||||
Goodwill and other intangibles, net | 8,909.6 | 2,588.3 | 2,760.1 | 3,076.9 | 3,041.6 | ||||||||||||||
Total assets | 11,656.1 | 4,402.9 | 4,646.5 | 5,073.6 | 4,966.8 | ||||||||||||||
Total debt, current and long-term portions (c) | 1,532.2 | 1,153.1 | 1,261.9 | 1,471.6 | 1,515.5 | ||||||||||||||
Equity | 8,125.9 | 2,339.4 | 2,322.2 | 2,578.0 | 2,249.4 | ||||||||||||||
Return on average equity | 8.2 | % | 10.8 | % | 13.2 | % | 13.0 | % | 15.2 | % | |||||||||
Total net debt to total capitalization (d) | 12.4 | % | 27.1 | % | 32.3 | % | 35.1 | % | 39.0 | % | |||||||||
Other Data: | |||||||||||||||||||
Depreciation and amortization | $ | 271.7 | $ | 122.9 | $ | 129.1 | $ | 127.9 | $ | 129.2 | |||||||||
Cash flows from operating activities | 563.4 | 497.4 | 560.4 | 417.8 | 369.7 | ||||||||||||||
Capital expenditures | 125.0 | 72.0 | 99.6 | 100.3 | 92.1 | ||||||||||||||
Interest expense (income), net | 33.9 | 53.7 | 41.3 | 41.5 | 48.1 | ||||||||||||||
Inventory days | 113 | 110 | 113 | 114 | 106 | ||||||||||||||
Receivable days | 58 | 54 | 55 | 56 | 53 | ||||||||||||||
Effective tax rate | 2.2 | % | 23.4 | % | 20.1 | % | 14.1 | % | 2.7 | % |
• | Business - a general description of Dentsply Sirona’s business and how performance is measured; |
• | Results of Operations - an analysis of the Company’s consolidated results of operations for the three years presented in the Consolidated Financial Statements; |
• | Critical Accounting Estimates - a discussion of accounting policies that require critical judgments and estimates; and |
• | Liquidity and Capital Resources - an analysis of cash flows; debt and other obligations; and aggregate contractual obligations. |
• | The Company closed its merger between DENTSPLY International Inc. and Sirona Dental Systems, Inc. on February 29, 2016 and established Dentsply Sirona as The Dental Solutions Company™ and the largest manufacturer of dental products for the professional dental market. The Company is best positioned to foster the development of differentiated integrated solutions for general practitioners and specialists. |
• | For the year ended December 31, 2016, net sales, excluding precious metal content, increased 42.6% compared to prior year. The increase in sales primarily reflects the impact of consolidating ten months of Sirona’s sales. For the year ended December 31, 2016, sales of our combined businesses (a non-US GAAP measure as referenced above), grew 3.6% on a constant currency basis. This includes a benefit of 1.7% from net acquisitions and was unfavorably impacted by discontinued products by approximately 50 basis points, which results in internal growth of 2.4%. |
• | For the year ended December 31, 2016, net income attributable to Dentsply Sirona increased 71.2%. Earnings per diluted share of $1.94 increased by 10.2% from $1.76 in the prior year. On an adjusted basis (a non-US GAAP measure as defined under the heading “Net Income attributable to Dentsply Sirona” ), full year 2016 net income grew 64.7% and earnings per diluted share grew 5.7% to $2.78 from $2.62 in the prior year. The Company’s results reflect a significant earnings headwind from currency rate changes compared to the prior year of approximately 3.0%, or $0.08 per diluted share. |
• | In 2016, the Company initiated merger and integration activities to capture cost and revenue synergies. The Company completed the elimination of certain corporate redundancies, the planning of country consolidation activities and the renegotiating of supply contracts with vendors. Additionally, the Company initiated reorganization activities that include manufacturing and logistics. The Company achieved tax savings as it realized complementary tax attributes of the combined businesses. With regard to revenue synergies, Dentsply Sirona launched combined commercial activities, such as bundling products and developing cross-selling opportunities. Investments in research and development have yielded new products and solutions which is expected to generate sales growth in the future. |
• | During 2016, the Company deployed cash in excess of $1.2 billion as it returned cash to shareholders through common share repurchases and dividend payments, as well as strengthened the business through acquisitions. During 2016, the Company completed two acquisitions with an aggregate purchase price of $341.1 million, including the acquisition of MIS Implants Technologies Ltd. (“MIS”), a manufacturer of dental implant systems, and a small acquisition of a healthcare consumable business. In addition, the Company repurchased $813.9 million of common shares outstanding in 2016. |
Year Ended December 31, | ||||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | ||||||||||
Net sales | $ | 3,745.3 | $ | 2,674.3 | $ | 1,071.0 | 40.0 | % | ||||||
Less: Precious metal content of sales | 64.3 | 92.8 | (28.5 | ) | (30.7 | %) | ||||||||
Net sales, excluding precious metal content | $ | 3,681.0 | $ | 2,581.5 | $ | 1,099.5 | 42.6 | % |
Year Ended | |||||||||||||||
December 31, | |||||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | |||||||||||
Net sales | $ | 3,745.3 | $ | 2,674.3 | $ | 1,071.0 | 40.0 | % | |||||||
Less: precious metal content of sales | 64.3 | 92.8 | (28.5 | ) | (30.7 | %) | |||||||||
Net sales, excluding precious metal content | 3,681.0 | 2,581.5 | 1,099.5 | 42.6 | % | ||||||||||
Sirona net sales (a) | 160.7 | 1,172.5 | (1,011.8 | ) | NM | ||||||||||
Merger related adjustments (b) | 13.5 | — | 13.5 | NM | |||||||||||
Elimination of intercompany net sales | (0.5 | ) | (2.3 | ) | 1.8 | NM | |||||||||
Non-US GAAP combined business, net sales, excluding precious metal content | $ | 3,854.7 | $ | 3,751.7 | $ | 103.0 | 2.7 | % |
Year Ended | |||||||||||||||
December 31, | |||||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | |||||||||||
United States | $ | 1,306.4 | $ | 958.8 | $ | 347.6 | 36.3 | % | |||||||
Europe | 1,421.7 | 1,065.3 | 356.4 | 33.5 | % | ||||||||||
Rest of World | 952.9 | 557.4 | 395.5 | 71.0 | % |
Year Ended | ||||||||||||||||
December 31, 2016 | ||||||||||||||||
(in millions) | United States | Europe | Rest of World | Total | ||||||||||||
Net sales | $ | 1,311.6 | $ | 1,463.2 | $ | 970.5 | $ | 3,745.3 | ||||||||
Less: precious metal content of sales | 5.2 | 41.5 | 17.6 | 64.3 | ||||||||||||
Net sales, excluding precious metal content | 1,306.4 | 1,421.7 | 952.9 | 3,681.0 | ||||||||||||
Sirona net sales (a) | 60.5 | 59.4 | 40.8 | 160.7 | ||||||||||||
Merger related adjustments (b) | 11.9 | 1.6 | — | 13.5 | ||||||||||||
Elimination of intercompany net sales | (0.1 | ) | (0.4 | ) | — | (0.5 | ) | |||||||||
Non-US GAAP combined business, net sales, excluding precious metal content | $ | 1,378.7 | $ | 1,482.3 | $ | 993.7 | $ | 3,854.7 |
Year Ended | ||||||||||||||||
December 31, 2015 | ||||||||||||||||
(in millions) | United States | Europe | Rest of World | Total | ||||||||||||
Net sales | $ | 965.9 | $ | 1,125.7 | $ | 582.7 | $ | 2,674.3 | ||||||||
Less: precious metal content of sales | 7.1 | 60.4 | 25.3 | 92.8 | ||||||||||||
Net sales, excluding precious metal content | 958.8 | 1,065.3 | 557.4 | 2,581.5 | ||||||||||||
Sirona net sales (a) | 406.4 | 394.0 | 372.1 | 1,172.5 | ||||||||||||
Elimination of intercompany net sales | (0.1 | ) | (2.2 | ) | — | (2.3 | ) | |||||||||
Non-US GAAP combined business, net sales, excluding precious metal content | $ | 1,365.1 | $ | 1,457.1 | $ | 929.5 | $ | 3,751.7 |
Year Ended December 31, | ||||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | ||||||||||
Gross profit | $ | 2,000.9 | $ | 1,517.2 | $ | 483.7 | 31.9 | % | ||||||
Gross profit as a percentage of net sales, including precious metal content | 53.4 | % | 56.7 | % | ||||||||||
Gross profit as a percentage of net sales, excluding precious metal content | 54.4 | % | 58.8 | % |
Year Ended | |||||||||||||||
December 31, | |||||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | |||||||||||
Selling, general and administrative expenses (“SG&A”) | $ | 1,523.0 | $ | 1,077.3 | $ | 445.7 | 41.4 | % | |||||||
Restructuring and other costs | 23.2 | 64.7 | (41.5 | ) | (64.1 | %) | |||||||||
SG&A as a percentage of net sales, including precious metal content | 40.7 | % | 40.3 | % | |||||||||||
SG&A as a percentage of net sales, excluding precious metal content | 41.4 | % | 41.7 | % |
Year Ended December 31, | ||||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | ||||||||||
Net interest expense | $ | 33.9 | $ | 53.7 | $ | (19.8 | ) | (36.9 | %) | |||||
Other expense (income), net | (20.1 | ) | (8.2 | ) | (11.9 | ) | NM | |||||||
Net interest and other expense | $ | 13.8 | $ | 45.5 | $ | (31.7 | ) |
Year Ended December 31, | |||||||||||
(in millions, except per share and percentage amounts) | 2016 | 2015 | $ Change | ||||||||
Effective income tax rate | 2.2 | % | 23.4 | % | |||||||
Net income attributable to Dentsply Sirona | $ | 429.9 | $ | 251.2 | $ | 178.7 | |||||
Diluted earnings per common share | $ | 1.94 | $ | 1.76 |
Year Ended December 31, 2016 | ||||||||
(in millions, except per share amounts) | Net Income | Per Diluted Common Share | ||||||
Net income attributable to Dentsply Sirona | $ | 429.9 | $ | 1.94 | ||||
Pre-tax non-US GAAP adjustments: | ||||||||
Business combination related costs and fair value adjustments | 162.2 | |||||||
Amortization of purchased intangible assets | 155.3 | |||||||
Restructuring program related costs and other costs | 17.0 | |||||||
Credit risk and fair value adjustments | 5.8 | |||||||
Tax impact of the pre-tax non-US GAAP adjustments (a) | (79.6 | ) | ||||||
Subtotal non-US GAAP adjustments | 260.7 | 1.17 | ||||||
Income tax related adjustments | (73.5 | ) | (0.33 | ) | ||||
Adjusted non-US GAAP net income | $ | 617.1 | $ | 2.78 |
Year Ended December 31, 2015 | ||||||||
(in millions, except per share amounts) | Net Income | Per Diluted Common Share | ||||||
Net income attributable to Dentsply Sirona | $ | 251.2 | $ | 1.76 | ||||
Pre-tax non-US GAAP adjustments: | ||||||||
Restructuring program related costs and other costs | 92.9 | |||||||
Amortization of purchased intangible assets | 43.7 | |||||||
Business combination related costs and fair value adjustments | 13.3 | |||||||
Credit risk and fair value adjustments | 8.3 | |||||||
Certain fair value adjustments related to an unconsolidated affiliated company | (2.8 | ) | ||||||
Tax impact of the pre-tax non-US GAAP adjustments (a) | (39.8 | ) | ||||||
Subtotal non-US GAAP adjustments | 115.6 | 0.82 | ||||||
Income tax related adjustments | 6.3 | 0.04 | ||||||
Adjusted non-US GAAP net income | $ | 373.1 | $ | 2.62 |
Year Ended December 31, 2016 | |||||||
(in millions, except percentage of net sales amount) | Operating Income (Loss) | Percentage of Net Sales, Excluding Precious Metal Content | |||||
Operating income attributable to Dentsply Sirona | $ | 454.7 | 12.4 | % | |||
Business combination related costs and fair value adjustments | 161.8 | 4.4 | % | ||||
Amortization of purchased intangible assets | 155.3 | 4.2 | % | ||||
Restructuring program related costs and other costs | 27.1 | 0.7 | % | ||||
Credit risk and fair value adjustments | 5.3 | 0.1 | % | ||||
Adjusted non-US GAAP Operating Income | $ | 804.2 | 21.8 | % |
Year Ended December 31, 2015 | |||||||
(in millions, except percentage of net sales amounts) | Operating Income (Loss) | Percentage of Net Sales, Excluding Precious Metal Content | |||||
Operating income attributable to Dentsply Sirona | $ | 375.2 | 14.5 | % | |||
Restructuring program related costs and other costs | 81.1 | 3.2 | % | ||||
Amortization of purchased intangible assets | 43.7 | 1.7 | % | ||||
Business combination related costs and fair value adjustments | 13.1 | 0.5 | % | ||||
Credit risk and fair value adjustments | 8.0 | 0.3 | % | ||||
Adjusted non-US GAAP Operating Income | $ | 521.1 | 20.2 | % |
Net Sales, Excluding Precious Metal Content | Year Ended December 31, | |||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | ||||||||||
Dental and Healthcare Consumables | $ | 1,994.3 | $ | 1,868.8 | $ | 125.5 | 6.7 | % | ||||||
Technologies | $ | 1,686.7 | $ | 712.7 | $ | 974.0 | 136.7 | % |
Segment Operating Income | Year Ended December 31, | |||||||||||||
(in millions, except percentage amounts) | 2016 | 2015 | $ Change | % Change | ||||||||||
Dental and Healthcare Consumables | $ | 544.5 | $ | 470.1 | $ | 74.4 | 15.8 | % | ||||||
Technologies | $ | 355.1 | $ | 93.7 | $ | 261.4 | 279.0 | % |
Year Ended | ||||||||||||
December 31, 2016 | ||||||||||||
(in millions) | Dental and Healthcare Consumables | Technologies | Total | |||||||||
Net sales | $ | 2,058.1 | $ | 1,687.2 | $ | 3,745.3 | ||||||
Less: precious metal content of sales | 63.8 | 0.5 | 64.3 | |||||||||
Net sales, excluding precious metal content | 1,994.3 | 1,686.7 | 3,681.0 | |||||||||
Sirona net sales (a) | 15.7 | 145.0 | 160.7 | |||||||||
Merger related adjustments (b) | — | 13.5 | 13.5 | |||||||||
Elimination of intercompany net sales | (0.5 | ) | — | (0.5 | ) | |||||||
Non-US GAAP combined business, net sales, excluding precious metal content | $ | 2,009.5 | $ | 1,845.2 | $ | 3,854.7 |
Year Ended | ||||||||||||
December 31, 2015 | ||||||||||||
(in millions) | Dental and Healthcare Consumables | Technologies | Total | |||||||||
Net sales | $ | 1,961.0 | $ | 713.3 | $ | 2,674.3 | ||||||
Less: precious metal content of sales | 92.2 | 0.6 | 92.8 | |||||||||
Net sales, excluding precious metal content | 1,868.8 | 712.7 | 2,581.5 | |||||||||
Sirona net sales (a) | 112.1 | 1,060.4 | 1,172.5 | |||||||||
Elimination of intercompany net sales | (2.3 | ) | — | (2.3 | ) | |||||||
Non-US GAAP combined business, net sales, excluding precious metal content | $ | 1,978.6 | $ | 1,773.1 | $ | 3,751.7 |
Year Ended December 31, | ||||||||||||||
(in millions, except percentage amounts) | 2015 | 2014 | $ Change | % Change | ||||||||||
Net sales | $ | 2,674.3 | $ | 2,922.6 | $ | (248.3 | ) | (8.5 | %) | |||||
Less: Precious metal content of sales | 92.8 | 129.9 | (37.1 | ) | (28.6 | %) | ||||||||
Net sales, excluding precious metal content | $ | 2,581.5 | $ | 2,792.7 | $ | (211.2 | ) | (7.6 | %) |
Year Ended December 31, 2015 | |||||||||||
United States | Europe | Rest of World | Worldwide | ||||||||
Internal sales growth | 3.1 | % | (0.3 | %) | 4.9 | % | 2.0 | % | |||
Net acquisition (divestiture) sales growth | (0.5 | %) | — | % | 0.4 | % | (0.1 | %) | |||
Constant currency sales growth | 2.6 | % | (0.3 | )% | 5.3 | % | 1.9 | % |
Year Ended December 31, | ||||||||||||||
(in millions, except percentage amounts) | 2015 | 2014 | $ Change | % Change | ||||||||||
Gross profit | $ | 1,517.2 | $ | 1,599.8 | $ | (82.6 | ) | (5.2 | %) | |||||
Gross profit as a percentage of net sales, including precious metal content | 56.7 | % | 54.7 | % | ||||||||||
Gross profit as a percentage of net sales, excluding precious metal content | 58.8 | % | 57.3 | % |
Year Ended December 31, | ||||||||||||||
(in millions, except percentage amounts) | 2015 | 2014 | $ Change | % Change | ||||||||||
SG&A expenses | $ | 1,077.3 | $ | 1,143.1 | $ | (65.8 | ) | (5.8 | %) | |||||
SG&A expenses as a percentage of net sales, including precious metal content | 40.3 | % | 39.1 | % | ||||||||||
SG&A expenses as a percentage of net sales, excluding precious metal content | 41.7 | % | 40.9 | % |
Year Ended December 31, | |||||||||||||
(in millions, except percentage amounts) | 2015 | 2014 | $ Change | % Change | |||||||||
Restructuring and other costs | $ | 64.7 | $ | 11.1 | $ | 53.6 | NM |
Year Ended December 31, | ||||||||||||||
(in millions, except percentage amounts) | 2015 | 2014 | $ Change | % Change | ||||||||||
Net interest expense | $ | 53.7 | $ | 41.3 | $ | 12.4 | 30.0 | % | ||||||
Other expense (income), net | (8.2 | ) | (0.1 | ) | (8.1 | ) | NM | |||||||
Net interest and other expense | $ | 45.5 | $ | 41.2 | $ | 4.3 |
Year Ended December 31, | |||||||||||
(in millions, except per share and percentage amounts) | 2015 | 2014 | $ Change | ||||||||
Effective income tax rate | 23.4 | % | 20.1 | % | |||||||
Equity in net loss of unconsolidated affiliated company | $ | (1.6 | ) | $ | (0.4 | ) | $ | (1.2 | ) | ||
Net income attributable to Dentsply Sirona | $ | 251.2 | $ | 322.9 | $ | (71.7 | ) | ||||
Diluted earnings per common share | $ | 1.76 | $ | 2.24 |
Year Ended December 31, 2015 | ||||||||
(in millions, except per share amounts) | Net Income | Per Diluted Common Share | ||||||
Net income attributable to Dentsply Sirona | $ | 251.2 | $ | 1.76 | ||||
Pre-tax non-US GAAP adjustments: | ||||||||
Restructuring program related costs and other costs | 92.9 | |||||||
Amortization of purchased intangible assets | 43.7 | |||||||
Business combination related costs and fair value adjustments | 13.3 | |||||||
Credit risk and fair value adjustments | 8.3 | |||||||
Certain fair value adjustments related to an unconsolidated affiliated company | (2.8 | ) | ||||||
Tax impact of the pre-tax non-US GAAP adjustments (a) | (39.8 | ) | ||||||
Subtotal non-US GAAP adjustments | 115.6 | 0.82 | ||||||
Income tax related adjustments | 6.3 | 0.04 | ||||||
Adjusted non-US GAAP net income | $ | 373.1 | $ | 2.62 |
Year Ended December 31, 2014 | ||||||||
(in millions, except per share amounts) | Net Income | Per Diluted Common Share | ||||||
Net income attributable to Dentsply Sirona | $ | 322.9 | $ | 2.24 | ||||
Pre-tax non-US GAAP adjustments: | ||||||||
Amortization of purchased intangible assets | 47.9 | |||||||
Restructuring program related costs and other costs | 12.5 | |||||||
Business combination related costs and fair value adjustments | 3.5 | |||||||
Credit risk and fair value adjustments | (0.7 | ) | ||||||
Certain fair value adjustments related to an unconsolidated affiliated company | (1.2 | ) | ||||||
Tax impact of the pre-tax non-US GAAP adjustments (a) | (19.6 | ) | ||||||
Subtotal non-US GAAP adjustments | 42.4 | 0.29 | ||||||
Income tax related adjustments | (4.3 | ) | (0.03 | ) | ||||
Adjusted non-US GAAP net income | $ | 361.0 | $ | 2.50 |
Year Ended December 31, 2015 | |||||||
(in millions, except percentage of net sales amount) | Operating Income (Loss) | Percentage of Net Sales, Excluding Precious Metal Content | |||||
Operating income attributable to Dentsply Sirona | $ | 375.2 | 14.5 | % | |||
Restructuring program related costs and other costs | 81.1 | 3.2 | % | ||||
Amortization of purchased intangible assets | 43.7 | 1.7 | % | ||||
Business combination related costs and fair value adjustments | 13.1 | 0.5 | % | ||||
Credit risk and fair value adjustments | 8.0 | 0.3 | % | ||||
Adjusted non-US GAAP Operating Income | $ | 521.1 | 20.2 | % |
Year Ended December 31, 2014 | |||||||
(in millions, except percentage of net sales amounts) | Operating Income (Loss) | Percentage of Net Sales, Excluding Precious Metal Content | |||||
Operating income attributable to Dentsply Sirona | $ | 445.6 | 16.0 | % | |||
Amortization of purchased intangible assets | 47.9 | 1.7 | % | ||||
Restructuring program related costs and other costs | 12.5 | 0.5 | % | ||||
Business combination related costs and fair value adjustments | 6.8 | 0.2 | % | ||||
Adjusted non-US GAAP Operating Income | $ | 512.8 | 18.4 | % |
Net Sales, Excluding Precious Metal Content | Year Ended December 31, | |||||||||||||
(in millions, except percentage amounts) | 2015 | 2014 | $ Change | % Change | ||||||||||
Dental and Healthcare Consumables | $ | 1,868.8 | $ | 2,013.2 | $ | (144.4 | ) | (7.2 | %) | |||||
Technologies | $ | 712.7 | $ | 779.5 | $ | (66.8 | ) | (8.6 | %) |
Segment Operating Income | Year Ended December 31, | |||||||||||||
(in millions, except percentage amounts) | 2015 | 2014 | $ Change | % Change | ||||||||||
Dental and Healthcare Consumables | $ | 470.1 | $ | 467.5 | $ | 2.6 | 0.6 | % | ||||||
Technologies | $ | 93.7 | $ | 111.3 | $ | (17.6 | ) | (15.8 | %) |
Contractual Obligations | Within 1 Year | Years 2-3 | Years 4-5 | Greater Than 5 Years | Total | ||||||||||||||
(in millions) | |||||||||||||||||||
Long-term borrowings | $ | 11.0 | $ | 128.3 | $ | 420.6 | $ | 968.3 | $ | 1,528.2 | |||||||||
Operating leases | 38.9 | 75.4 | 35.5 | 32.4 | 182.2 | ||||||||||||||
Interest on long-term borrowings, net | |||||||||||||||||||
of interest rate swap agreements | 32.5 | 64.1 | 58.1 | 67.5 | 222.2 | ||||||||||||||
Postemployment obligations | 16.1 | 31.6 | 34.6 | 99.1 | 181.4 | ||||||||||||||
Precious metal consignment agreements | 34.4 | — | — | — | 34.4 | ||||||||||||||
$ | 132.9 | $ | 299.4 | $ | 548.8 | $ | 1,167.3 | $ | 2,148.4 |
(1) | ARTICLE I, Sections 1 (Annual Meetings) and 2 (Special Meetings) were revised to provide that the Company may postpone, reschedule or cancel any annual or special meeting previously called by the Board of Directors. |
(2) | ARTICLE I, Section 3 (Place of Meeting) was revised by deleting that a waiver of notice signed by all stockholders entitled to vote at a meeting may designate any place as the place for such meeting. |
(3) | ARTICLE I, Section 4 (Notice of Meeting) was revised (i) to provide for the possibility of meeting attendance via remote communication and different record dates for notice and voting rights; and (ii) by deleting that notice may be delivered personally or by mail at the discretion of the Chief Executive Officer or the officer or persons calling the meeting. |
(4) | ARTICLE I, Section 5 (Fixing of Record Date) was revised (i) to provide for the possibility of different record dates for notice and voting rights as well as certain stipulation with regards to the fixing of record dates; and (ii) by deleting that the stock transfer books may not be closed before the record date for notice, voting or dividend rights. |
(5) | ARTICLE I, Section 6 (Quorum; Adjournments) was revised (i) to provide further detail regarding the adjournment and reconvening of meetings, and (ii) by deleting a provision by which a meeting is property constituted if notice was properly given, waived or deemed waived. |
(6) | ARTICLE I, Section 7 (Proxies) was revised to provide that proxies shall be valid for up to three years from their date of issuance and may only be irrevocable if coupled with an interest sufficient in law to support an irrevocable power. |
(7) | ARTICLE I, Section 8 (Voting of Shares) was revised (i) to provide for the possibility of different record dates for notice and voting rights; and (ii) by deleting that shares of a corporation may be voted by any officer or proxy appointed by any officer in the absence of express notice that such officer has no authority to vote. |
(8) | ARTICLE I, Section 9 (List of Stockholders) was revised to provide certain details with regards to the preparation and examination of the stock ledger, as well as providing for the possibility of access via an electronic network and meetings held solely by means of remote communication. |
(9) | ARTICLE I, Section 10 (Waiver of Notice by Stockholders) was revised to provide for the possibility of electronic transmission of a waiver. |
(10) | ARTICLE I, Sections 11 (Advance Notice) and 12 (Procedure for Nomination of Directors) were revised to provide that where the annual meeting is called for a date that is more than 30 days before or 60 days after its anniversary date, notice is timely if received not later than the close of business on the 90th day prior to the annual meeting or, if later, the 10th day following mailing of the notice or public disclosure of the annual meeting. |
(11) | ARTICLE I, Section 13 (Stockholder Voting) was revised to provide that all other proposals aside from director elections shall be decided by a majority vote of the shares present in person or by proxy and entitled to vote, unless otherwise required by applicable laws, rules or regulations, the Company’s Certificate of Incorporation or By-laws. |
(12) | ARTICLE I, Section 14 (Conduct of Meetings) was inserted to provide certain procedural guidelines for the conduct of meetings and stipulate certain powers of the presiding person. |
(13) | ARTICLE II, Section 1 (General Powers) was revised to provide that the business and affairs of the Company may be managed under the direction of the Board of Directors. |
(14) | ARTICLE II, Section 2 (Number of Directors, Tenure and Qualifications) was revised by deleting that any director filling a vacancy as the result of an increase in the number of directors shall hold office until the next annual meeting but a decrease in the number of directors shall not shorten the term of an incumbent director, and that an election shall be held at an adjournment or a special meeting if not held at the annual meeting. |
(15) | ARTICLE II, former Section 10 (Presumption of Assent) was deleted. |
(16) | ARTICLE II, new Section 10 (Committees) was revised to delete certain restrictions with regards to committees. |
(17) | ARTICLE II, Sections 11 (Action of the Board by Written Consent) and 12 (Conferences) were revised to provide for the possibility of electronic transmissions. |
(18) | ARTICLE III, Section 6 (Chief Executive Officer, President) was revised to provide that unless another officer has been elected President of the Company, the Chief Executive Officer shall also be President and as such may, together with the Secretary, sign certificates for shares of the capital stock of the corporation. |
(19) | ARTICLE III, Section 8 (Secretary and Assistant Secretaries) and ARTICLE IV, Section 1 (Shares of Stock) were revised to replace “Chief Executive Officer” with “President” as regards the signing of share certificates. |
(20) | ARTICLE V, Section 1 (Indemnification Generally) was revised to delete employees and agents of the Company. |
(21) | ARTICLE V, Section 4 (Determination that Indemnification is Proper) was revised to provide that present or former directors may demand that determination of entitlement to indemnification be made by independent counsel. |
(22) | ARTICLE VI (Exclusive Form) was revised to include fiduciary duties owed by stockholders, actions in connection with the Company’s Certificate of Incorporation or By-laws, and all claims covered by the internal affairs doctrine. |
(a) | Documents filed as part of this Report |
1. | Financial Statements |
2. | Financial Statement Schedule |
3. | Exhibits |
Exhibit Number | Description | |
2.1 | Agreement and Plan of Merger, dated as of September 15, 2015, by and among DENTSPLY International Inc., Sirona Dental Systems, Inc. and Dawkins Merger Sub Inc. (18) | |
3.1 | Amended and Restated Certificate of Incorporation (Filed herewith) | |
3.2 | By-Laws, as amended and restated (Filed herewith) | |
4.1 | (a) | United States Commercial Paper Dealer Agreement dated as of March 28, 2002 between the Company and Citigroup Global Markets Inc. (formerly known as Salomon Smith Barney Inc.)(formerly Exhibit 4.1(b)) (6) |
(b) | First Amendment to the United States Commercial Paper Dealer Agreement dated as of March 28, 2002 between the Company and Citigroup Global Markets Inc. (formerly known as Salomon Smith Barney Inc.) (17) | |
4.2 | (a) | United States Commercial Paper Dealer Agreement dated as of August 18, 2011 between the Company and J.P. Morgan Securities LLC (17) |
(b) | First Amendment to the United States Commercial Paper Dealer Agreement dated as of August 18, 2011 between the Company and J.P. Morgan Securities LLC (17) | |
4.3 | $500.0 Million Credit Agreement, dated as of July 23, 2014 final maturity in July 23, 2019, by and among the Company, the subsidiary borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent, Citibank N.A. as Syndication Agent, Bank of Tokyo-Mitsubishi UFJ, LTD and Wells Fargo Bank, N.A., Commerzbank AG, and HSBC Bank USA N.A. as co-documentation agents, and J.P. Morgan Securities LLC and Citibank Global Markets Inc., as Joint Bookrunners and Joint Lead Arrangers (17) | |
(a) | First Amendment to the $500.0 Million Credit Agreement dated as of July 1, 2015 between the Company and the Subsidiary Borrowers party (19) |
(b) | Second Amendment to the $500.0 Million Credit Agreement dated November 30, 2015 between the Company and Subsidiary Borrowers party (19) | |
4.4 | $250.0 Million Private Placement Note Purchase Agreement, due February 19, 2016 dated as of October 16, 2009 (10) | |
4.5 | (a) | 65.0 Million Swiss Franc Term Loan Agreement, due March 1, 2012 dated as of February 24, 2010 (11) |
(b) | First Amendment to the 65.0 Million Swiss Franc Term Loan Agreement dated May 21, 2010 between the Company, the Lenders, and PNC Bank National Association, as Agent (19) | |
(c) | Second Amendment to the 65.0 Million Swiss Franc Term Loan Agreement dated August 31, 2011 due September 1, 2016, between the Company, the Lenders, and PNC Bank, National Association, as Agent (12) | |
(d) | Third Amendment to the 65.0 Million Swiss Franc Term Loan Agreement dated November 30, 2015 (19) | |
4.10 | $175.0 Million Credit Agreement dated August 26, 2013 among DENTSPLY International Inc., PNC Bank, National Association as Administrative Agent and the Lenders Party thereto (16) | |
(a) | First Amendment to the $175.0 Million Credit Agreement dated November 30, 2015 between the Company and PNC Bank, National Association as Administrative Agent and the Lenders Party thereto (19) | |
4.11 | Form of Indenture (13) | |
4.12 | Supplemental Indenture, dated August 23, 2011 between DENTSPLY International Inc., as Issuer and Wells Fargo, National Association, as Trustee (14) | |
4.14 | 12.55 Billion Japanese Yen Term Loan Agreement between the Company and Bank of Tokyo dated September 22, 2014 due September 28, 2019, between the Company, The Bank of Tokyo-Mitsubishi UFJ, LTD as Sole Lead Arranger, Development Bank of Japan, Inc. as Co-Arranger, The Bank of Tokyo-Mitsubishi UFJ, LTD, as Administrative Agent (17) | |
(a) | First Amendment to 12.55 Billion Japanese Yen Term Loan Agreement dated December 18, 2015 between the Company and Bank of Tokyo-Mitsubishi UFJ, LTD (19) | |
4.15 | United States Commercial Paper issuing and paying Agency Agreement dated as of November 4, 2014, between the Company and U.S. Bank N.A. (17) | |
4.16 | Note Purchase Agreement, dated December 11, 2015, by and among the Company and the purchasers listed in Schedule A thereto (19) | |
4.17 | Note Purchase Agreement, dated October 27, 2016, by and among the Company and the purchasers listed in Schedule A thereto (Filed herewith) | |
10.2 | 2002 Amended and Restated Equity Incentive Plan (8) | |
10.3 | Restricted Stock Unit Deferral Plan (19) | |
10.4 | (a) | Trust Agreement for the Company’s Employee Stock Ownership Plan between the Company and T. Rowe Price Trust Company dated as of November 1, 2000 (3) |
(b) | Plan Recordkeeping Agreement for the Company’s Employee Stock Ownership Plan between the Company and T. Rowe Price Trust Company dated as of November 1, 2000 (3) | |
10.5 | DENTSPLY Supplemental Saving Plan Agreement dated as of December 10, 2007 (8) | |
10.6 | Amended and Restated Employment Agreement entered February 19, 2008 between the Company and Bret W. Wise* (8) | |
10.7 | Amended and Restated Employment Agreement entered February 19, 2008 between the Company and Christopher T. Clark* (8) | |
10.10 | Amended and Restated Employment Agreement entered February 19, 2008 between the Company and James G. Mosch* (8) | |
10.11 | Amended and Restated Employment Agreement entered February 19, 2008 between the Company and Robert J. Size* (8) | |
10.12 | Amended and Restated Employment Agreement entered January 1, 2009 between the Company’s subsidiary, DeguDent GMBH and Albert Sterkenburg* (9) | |
10.13 | DENTSPLY International Inc. Directors’ Deferred Compensation Plan effective January 1, 2007, as amended* (9) | |
10.14 | Board Compensation Arrangement* (19) | |
10.15 | Supplemental Executive Retirement Plan effective January 1, 1999, as amended January 1, 2008* (9) | |
10.16 | Incentive Compensation Plan, amended and restated* (12) | |
10.17 | AZ Trade Marks License Agreement, dated January 18, 2001 between AstraZeneca AB and Maillefer Instruments Holdings, S.A. (3) |
10.18 | (a) | Precious metal inventory Purchase and Sale Agreement dated November 30, 2001, as amended October 10, 2006 between Bank of Nova Scotia and the Company (7) |
(b) | Precious metal inventory Purchase and Sale Agreement dated December 20, 2001 between JPMorgan Chase Bank and the Company (4) | |
(c) | Precious metal inventory Purchase and Sale Agreement dated December 20, 2001 between Mitsui & Co., Precious Metals Inc. and the Company (4) | |
(e) | Precious metal inventory Purchase and Sale Agreement dated January 30, 2002 between CommerzbankAG, Frankfurt, and the Company (8) | |
(f) | Precious metal inventory Purchase and Sale Agreement dated December 6, 2010, as amended February 8, 2013 between HSBC Bank USA, National Association and the Company (16) | |
(g) | Precious metal inventory Purchase and Sale Agreement dated April 29, 2013 between The Toronto-Dominion Bank and the Company (16) | |
10.19 | Executive Change in Control Plan for foreign executives, as amended December 31, 2008* (10) | |
10.20 | 2010 Equity Incentive Plan, amended and restated (19) | |
10.22 | Employment Agreement, dated December 11, 2015, between DENTSPLY International Inc. and Bret W. Wise* (19) | |
10.23 | Employment Agreement, dated February 12, 2016, between DENTSPLY SIRONA Inc. and Christopher T. Clark* (Filed herewith) | |
10.24 | Employment Agreement, dated February 12, 2016, between DENTSPLY SIRONA Inc. and Ulrich Michel* (Filed herewith) | |
10.25 | 2016 Omnibus Incentive Plan (Filed herewith) | |
10.26 | Employment Agreement, dated December 11, 2015, between DENTSPLY International Inc., Sirona Dental Systems, Inc. and Jeffrey T. Slovin* (Filed herewith) | |
10.27 | Amended and Restated U.S. Distributorship Agreement, dated May 31, 2012, by and between Patterson Companies, Inc. and Sirona Dental Systems, Inc. (20) | |
10.28 | Amended and Restated U.S. CAD-CAM Distributorship Agreement, dated May 31, 2012, by and between Patterson Companies, Inc. and Sirona Dental Systems GmbH (20) | |
10.29 | Sirona Dental Systems, Inc. Equity Incentive Plan, as Amended (Filed herewith) | |
10.30 | Sirona Dental Systems, Inc. 2015 Long-Term Incentive Plan (Filed herewith) | |
12.1 | Computation of Ratio of Earnings to Fixed Charges (Filed herewith) | |
21.1 | Subsidiaries of the Company (Filed herewith) | |
23.1 | Consent of Independent Registered Public Accounting Firm - PricewaterhouseCoopers LLP | |
31.1 | Section 302 Certification Statement Chief Executive Officer | |
31.2 | Section 302 Certification Statements Chief Financial Officer | |
32 | Section 906 Certification Statement | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Extension Labels Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
(1) | Incorporated by reference to exhibit included in the Company’s Registration Statement on Form S-8 dated June 4, 1998 (No. 333-56093). |
(2) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 1999, File No. 0-16211. |
(3) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2000, File No. 0-16211. |
(4) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2001, File No. 0-16211. |
(5) | Incorporated by reference to exhibit included in the Company’s Registration Statement on Form S-8 dated November 27, 2002 (No. 333-101548). |
(6) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2002, File No. 0-16211. |
(7) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2006, File no. 0-16211. |
(8) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2007, File No. 0-16211. |
(9) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2008, File No. 0-16211. |
(10) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2009, File no. 0-16211. |
(11) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2010, File no. 0-16211. |
(12) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2011, File no. 0-16211. |
(13) | Incorporated by reference to exhibit included in the Company’s Registration Statement on Form S-3 dated August 15, 2011 (No. 333-176307). |
(14) | Incorporated by reference to exhibit included in the Company’s Form 8-K dated August 29, 2011, File no. 0-16211. |
(15) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2012, File no. 0-16211. |
(16) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2013, File no. 0-16211. |
(17) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2014, File no. 0-16211. |
(18) | Incorporated by reference to exhibit included in the Company’s Form 8-K dated September 16, 2015, File no. 0-16211. |
(19) | Incorporated by reference to exhibit included in the Company’s Form 10-K for the fiscal year ended December 31, 2015, File no. 0-16211. |
(20) | Incorporated by reference to exhibit included in the Form 8-K/A, filed by Sirona Dental Systems, Inc. on July 12, 2012 (File no 000-22673). |
Additions | ||||||||||||||||||||||||
(in millions) | Balance at Beginning of Period | Charged (Credited) To Costs And Expenses | Charged to Other Accounts | Write-offs Net of Recoveries | Translation Adjustment | Balance at End of Period | ||||||||||||||||||
Description | ||||||||||||||||||||||||
Allowance for doubtful accounts: | ||||||||||||||||||||||||
For Year Ended December 31, | ||||||||||||||||||||||||
2014 | $ | 14.2 | $ | (1.7 | ) | $ | 0.5 | $ | (2.4 | ) | $ | (1.8 | ) | $ | 8.8 | |||||||||
2015 | 8.8 | 4.3 | 1.4 | (2.2 | ) | (1.6 | ) | 10.7 | ||||||||||||||||
2016 | 10.7 | 9.2 | 4.3 | (2.5 | ) | 1.0 | 22.7 | |||||||||||||||||
Deferred tax asset valuation allowance: | ||||||||||||||||||||||||
For Year Ended December 31, | ||||||||||||||||||||||||
2014 | $ | 228.9 | $ | 28.7 | $ | — | $ | — | $ | (4.3 | ) | $ | 253.3 | |||||||||||
2015 | 253.3 | 26.7 | — | — | (5.7 | ) | 274.3 | |||||||||||||||||
2016 | 274.3 | (99.9 | ) | 8.5 | — | (0.2 | ) | 182.7 |
/s/ | Jeffrey T. Slovin | /s/ | Ulrich Michel | |
Jeffrey T. Slovin | Ulrich Michel | |||
Chief Executive Officer | Executive Vice President and | |||
March 1, 2017 | Chief Financial Officer | |||
March 1, 2017 |
/s/ | PricewaterhouseCoopers LLP |
PricewaterhouseCoopers LLP | |
Harrisburg, Pennsylvania | |
March 1, 2017 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net sales | $ | 3,745.3 | $ | 2,674.3 | $ | 2,922.6 | |||||
Cost of products sold | 1,744.4 | 1,157.1 | 1,322.8 | ||||||||
Gross profit | 2,000.9 | 1,517.2 | 1,599.8 | ||||||||
Selling, general and administrative expenses | 1,523.0 | 1,077.3 | 1,143.1 | ||||||||
Restructuring and other costs | 23.2 | 64.7 | 11.1 | ||||||||
Operating income | 454.7 | 375.2 | 445.6 | ||||||||
Other income and expenses: | |||||||||||
Interest expense | 35.9 | 55.9 | 46.9 | ||||||||
Interest income | (2.0 | ) | (2.2 | ) | (5.6 | ) | |||||
Other expense (income), net | (20.1 | ) | (8.2 | ) | (0.1 | ) | |||||
Income before income taxes | 440.9 | 329.7 | 404.4 | ||||||||
Provision for income taxes | 9.5 | 77.0 | 81.1 | ||||||||
Equity in net loss of unconsolidated affiliated company | — | (1.6 | ) | (0.4 | ) | ||||||
Net income | 431.4 | 251.1 | 322.9 | ||||||||
Less: Net income (loss) attributable to noncontrolling interests | 1.5 | (0.1 | ) | — | |||||||
Net income attributable to Dentsply Sirona | $ | 429.9 | $ | 251.2 | $ | 322.9 | |||||
Earnings per common share: | |||||||||||
Basic | $ | 1.97 | $ | 1.79 | $ | 2.28 | |||||
Diluted | $ | 1.94 | $ | 1.76 | $ | 2.24 | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | 218.0 | 140.0 | 141.7 | ||||||||
Diluted | 221.6 | 142.5 | 144.2 |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Net Income | $ | 431.4 | $ | 251.1 | $ | 322.9 | |||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustments | (90.5 | ) | (188.1 | ) | (354.1 | ) | |||||
Net (loss) gain on derivative financial instruments | (8.6 | ) | 12.1 | 49.3 | |||||||
Net unrealized holding loss on available-for-sale securities | — | (8.5 | ) | (4.2 | ) | ||||||
Pension liability adjustments | (13.8 | ) | 32.2 | (63.7 | ) | ||||||
Total other comprehensive (loss) income | (112.9 | ) | (152.3 | ) | (372.7 | ) | |||||
Total comprehensive income (loss) | 318.5 | 98.8 | (49.8 | ) | |||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.3 | 0.5 | (0.7 | ) | |||||||
Comprehensive income (loss) attributable to Dentsply Sirona | $ | 318.2 | $ | 98.3 | $ | (49.1 | ) | ||||
December 31, | |||||||
2016 | 2015 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 383.9 | $ | 284.6 | |||
Accounts and notes receivable-trade, net | 636.0 | 399.9 | |||||
Inventories, net | 517.1 | 340.4 | |||||
Prepaid expenses and other current assets | 345.6 | 171.8 | |||||
Total Current Assets | 1,882.6 | 1,196.7 | |||||
Property, plant and equipment, net | 799.8 | 558.8 | |||||
Identifiable intangible assets, net | 2,957.6 | 600.7 | |||||
Goodwill, net | 5,952.0 | 1,987.6 | |||||
Other noncurrent assets, net | 64.1 | 59.1 | |||||
Total Assets | $ | 11,656.1 | $ | 4,402.9 | |||
Liabilities and Equity | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | 223.0 | $ | 133.6 | |||
Accrued liabilities | 462.7 | 310.1 | |||||
Income taxes payable | 64.2 | 20.2 | |||||
Notes payable and current portion of long-term debt | 21.1 | 12.1 | |||||
Total Current Liabilities | 771.0 | 476.0 | |||||
Long-term debt | 1,511.1 | 1,141.0 | |||||
Deferred income taxes | 848.6 | 160.3 | |||||
Other noncurrent liabilities | 399.5 | 286.2 | |||||
Total Liabilities | 3,530.2 | 2,063.5 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Preferred stock, $1.00 par value; .25 million shares authorized; no shares issued | — | — | |||||
Common stock, $.01 par value; | 2.6 | 1.6 | |||||
400.0 million and 200.0 million shares authorized at December 31, 2016 and 2015, respectively | |||||||
264.5 million and 162.8 million shares issued at December 31, 2016 and 2015, respectively | |||||||
230.1 million and 140.1 million shares outstanding at December 31, 2016 and 2015, respectively | |||||||
Capital in excess of par value | 6,516.7 | 237.8 | |||||
Retained earnings | 3,948.0 | 3,591.0 | |||||
Accumulated other comprehensive loss | (705.7 | ) | (594.0 | ) | |||
Treasury stock, at cost, 34.4 million and 22.7 million shares at December 31, 2016 and 2015, respectively | (1,647.3 | ) | (898.4 | ) | |||
Total Dentsply Sirona Equity | 8,114.3 | 2,338.0 | |||||
Noncontrolling interests | 11.6 | 1.4 | |||||
Total Equity | 8,125.9 | 2,339.4 | |||||
Total Liabilities and Equity | $ | 11,656.1 | $ | 4,402.9 |
DENTSPLY SIRONA INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||
Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Dentsply Sirona Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
Balance at December 31, 2013 | $ | 1.6 | $ | 255.3 | $ | 3,095.7 | $ | (69.1 | ) | $ | (748.5 | ) | $ | 2,535.0 | $ | 42.9 | $ | 2,577.9 | |||||||||||||
Net income | — | — | 322.9 | — | — | 322.9 | — | 322.9 | |||||||||||||||||||||||
Other comprehensive income | — | — | — | (366.5 | ) | — | (366.5 | ) | (0.7 | ) | (367.2 | ) | |||||||||||||||||||
Acquisition of noncontrolling interest | — | (42.0 | ) | — | (5.5 | ) | — | (47.5 | ) | (41.3 | ) | (88.8 | ) | ||||||||||||||||||
Exercise of stock options | — | (9.7 | ) | — | — | 58.7 | 49.0 | — | 49.0 | ||||||||||||||||||||||
Tax benefit from stock options exercised | — | 2.1 | — | — | — | 2.1 | — | 2.1 | |||||||||||||||||||||||
Stock based compensation expense | — | 25.4 | — | — | — | 25.4 | — | 25.4 | |||||||||||||||||||||||
Funding of Employee Stock Ownership Plan | — | 1.5 | — | — | 4.4 | 5.9 | — | 5.9 | |||||||||||||||||||||||
Treasury shares purchased | — | — | — | — | (163.2 | ) | (163.2 | ) | — | (163.2 | ) | ||||||||||||||||||||
RSU distributions | — | (11.2 | ) | — | — | 7.0 | (4.2 | ) | — | (4.2 | ) | ||||||||||||||||||||
RSU dividends | — | 0.3 | (0.3 | ) | — | — | — | — | — | ||||||||||||||||||||||
Cash dividends ($0.265 per share) | — | — | (37.6 | ) | — | — | (37.6 | ) | — | (37.6 | ) | ||||||||||||||||||||
Balance at December 31, 2014 | $ | 1.6 | $ | 221.7 | $ | 3,380.7 | $ | (441.1 | ) | $ | (841.6 | ) | $ | 2,321.3 | $ | 0.9 | $ | 2,322.2 | |||||||||||||
Net income | — | — | 251.2 | — | — | 251.2 | (0.1 | ) | 251.1 | ||||||||||||||||||||||
Other comprehensive loss | — | — | — | (152.9 | ) | — | (152.9 | ) | 0.6 | (152.3 | ) | ||||||||||||||||||||
Exercise of stock options | — | (8.2 | ) | — | — | 43.4 | 35.2 | — | 35.2 | ||||||||||||||||||||||
Tax benefit from stock options exercised | — | 11.6 | — | — | — | 11.6 | — | 11.6 | |||||||||||||||||||||||
Stock based compensation expense | — | 25.6 | — | — | — | 25.6 | — | 25.6 | |||||||||||||||||||||||
Funding of Employee Stock Ownership Plan | — | 1.1 | — | — | 3.6 | 4.7 | — | 4.7 | |||||||||||||||||||||||
Treasury shares purchased | — | — | — | — | (112.7 | ) | (112.7 | ) | — | (112.7 | ) | ||||||||||||||||||||
RSU distributions | — | (14.3 | ) | — | — | 8.9 | (5.4 | ) | — | (5.4 | ) | ||||||||||||||||||||
RSU dividends | — | 0.3 | (0.3 | ) | — | — | — | — | — | ||||||||||||||||||||||
Cash dividends ($0.29 per share) | — | — | (40.6 | ) | — | — | (40.6 | ) | — | (40.6 | ) | ||||||||||||||||||||
Balance at December 31, 2015 | $ | 1.6 | $ | 237.8 | $ | 3,591.0 | $ | (594.0 | ) | $ | (898.4 | ) | $ | 2,338.0 | $ | 1.4 | $ | 2,339.4 | |||||||||||||
Net income | — | — | 429.9 | — | — | 429.9 | 1.5 | 431.4 | |||||||||||||||||||||||
Other comprehensive loss | — | — | — | (111.7 | ) | — | (111.7 | ) | (1.2 | ) | (112.9 | ) | |||||||||||||||||||
Acquisition of noncontrolling interest | — | (0.1 | ) | — | — | — | (0.1 | ) | (0.3 | ) | (0.4 | ) | |||||||||||||||||||
Common stock issuance related to Sirona merger | 1.0 | 6,255.2 | — | — | — | 6,256.2 | 10.2 | 6,266.4 | |||||||||||||||||||||||
Exercise of stock options | — | (10.8 | ) | — | — | 48.1 | 37.3 | — | 37.3 | ||||||||||||||||||||||
Tax benefit from stock options exercised | — | 16.1 | — | — | — | 16.1 | — | 16.1 | |||||||||||||||||||||||
Stock based compensation expense | — | 41.3 | — | — | — | 41.3 | — | 41.3 | |||||||||||||||||||||||
Funding of Employee Stock Ownership Plan | — | 2.1 | — | — | 4.3 | 6.4 | — | 6.4 | |||||||||||||||||||||||
Treasury shares purchased | — | — | — | — | (815.1 | ) | (815.1 | ) | — | (815.1 | ) | ||||||||||||||||||||
RSU distributions | — | (25.5 | ) | — | — | 13.8 | (11.7 | ) | — | (11.7 | ) | ||||||||||||||||||||
RSU dividends | — | 0.6 | (0.6 | ) | — | — | — | — | — | ||||||||||||||||||||||
Cash dividends ($0.310 per share) | — | — | (72.3 | ) | — | — | (72.3 | ) | — | (72.3 | ) | ||||||||||||||||||||
Balance at December 31, 2016 | $ | 2.6 | $ | 6,516.7 | $ | 3,948.0 | $ | (705.7 | ) | $ | (1,647.3 | ) | $ | 8,114.3 | $ | 11.6 | $ | 8,125.9 | |||||||||||||
DENTSPLY SIRONA INC. AND SUBSIDIARIES | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(in millions) | Year Ended December 31, | ||||||||||
2016 | 2015 | 2014 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 431.4 | $ | 251.1 | $ | 322.9 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 116.6 | 79.1 | 81.2 | ||||||||
Amortization of intangible assets | 155.1 | 43.8 | 47.9 | ||||||||
Amortization of deferred financing costs | 4.5 | 11.3 | 4.6 | ||||||||
Deferred income taxes | (110.1 | ) | 27.4 | 17.5 | |||||||
Stock based compensation expense | 41.3 | 25.6 | 25.4 | ||||||||
Restructuring and other costs - non-cash | 9.7 | 43.3 | 5.8 | ||||||||
Stock option income tax benefit | (12.7 | ) | (11.6 | ) | (2.1 | ) | |||||
Equity in earnings from unconsolidated affiliates | — | 1.6 | 0.4 | ||||||||
Other non-cash (income) expense | (32.0 | ) | (13.1 | ) | 10.0 | ||||||
Loss on disposal of property, plant and equipment | 2.8 | 0.8 | 0.4 | ||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts and notes receivable-trade, net | (75.1 | ) | (0.9 | ) | 7.2 | ||||||
Inventories, net | 65.4 | 32.1 | 21.0 | ||||||||
Prepaid expenses and other current assets | (32.4 | ) | (9.5 | ) | (16.1 | ) | |||||
Other noncurrent assets | 2.6 | 3.3 | 4.9 | ||||||||
Accounts payable | 7.2 | 8.8 | 10.0 | ||||||||
Accrued liabilities | (12.2 | ) | (4.7 | ) | (12.2 | ) | |||||
Income taxes | (7.7 | ) | (8.1 | ) | 22.4 | ||||||
Other noncurrent liabilities | 9.0 | 17.1 | 9.2 | ||||||||
Net cash provided by operating activities | 563.4 | 497.4 | 560.4 | ||||||||
Cash flows from investing activities: | |||||||||||
Cash paid for acquisitions of businesses and equity investments | (341.8 | ) | (54.0 | ) | (8.6 | ) | |||||
Proceeds from the sale of businesses | 6.1 | — | 6.5 | ||||||||
Purchases of short term time deposits | (6.8 | ) | — | (2.3 | ) | ||||||
Liquidation of short term time deposits | — | — | 1.1 | ||||||||
Proceeds from redemption of long-term corporate bonds | — | 47.7 | — | ||||||||
Capital expenditures | (125.0 | ) | (72.0 | ) | (99.6 | ) | |||||
Cash assumed in Sirona merger | 522.3 | — | — | ||||||||
Purchase of company owned life insurance policies | (1.7 | ) | (1.4 | ) | (0.9 | ) | |||||
Cash received on derivative contracts | 20.1 | 30.7 | 67.2 | ||||||||
Cash paid on derivative contracts | (17.1 | ) | (6.3 | ) | (96.5 | ) | |||||
Expenditures for identifiable intangible assets | (1.1 | ) | — | (6.2 | ) | ||||||
Proceeds from sale of property, plant and equipment | 5.0 | 0.4 | 0.6 | ||||||||
Net cash provided by (used in) investing activities | 60.0 | (54.9 | ) | (138.7 | ) | ||||||
Cash flows from financing activities: | |||||||||||
Proceeds from long-term borrowings, net of deferred financing costs | 1,220.6 | 152.9 | 114.3 | ||||||||
Payments on long-term borrowings | (877.5 | ) | (267.5 | ) | (199.2 | ) | |||||
Decrease in short-term borrowings | (44.1 | ) | (2.2 | ) | (101.9 | ) | |||||
Proceeds from exercise of stock options | 41.0 | 35.5 | 49.0 | ||||||||
Excess tax benefits from stock based compensation | 12.7 | 11.6 | 2.1 | ||||||||
Cash paid for acquisition of noncontrolling interests of consolidated subsidiaries | (0.4 | ) | (80.5 | ) | — | ||||||
Cash paid for treasury stock | (813.9 | ) | (112.7 | ) | (163.2 | ) | |||||
Cash dividends paid | (64.6 | ) | (40.0 | ) | (37.3 | ) | |||||
Net cash used in financing activities | (526.2 | ) | (302.9 | ) | (336.2 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 2.1 | (6.6 | ) | (8.9 | ) | ||||||
Net increase in cash and cash equivalents | 99.3 | 133.0 | 76.6 | ||||||||
Cash and cash equivalents at beginning of period | 284.6 | 151.6 | 75.0 | ||||||||
Cash and cash equivalents at end of period | $ | 383.9 | $ | 284.6 | $ | 151.6 | |||||
Schedule of non-cash investing activities: | |||||||||||
Merger financed by common stock | $ | 6,256.2 | $ | — | $ | — | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Interest paid, net of amounts capitalized | $ | 36.7 | $ | 54.9 | $ | 47.8 | |||||
Income taxes paid | $ | 112.3 | $ | 71.4 | $ | 48.7 |
• | Services: Service revenue is generally recognized ratably over the contract term as the specified services are performed. Amounts received from customers in advance of rendering of services are classified as deferred income until the revenue can be recognized upon rendering of those services. |
• | Extended Warranties: The Company offers its customers an option to purchase extended warranties on certain products. The Company recognizes revenue on these extended warranty contracts ratably over the life of the contract. The costs associated with these extended warranty contracts are recognized when incurred. |
• | Multiple-Element Arrangements: Arrangements with customers may include multiple deliverables, including any combination of equipment, services and extended warranties. The deliverables included in the Company’s multiple-element arrangements are separated into more than one unit of accounting when (i) the delivered equipment has value to the customer on a stand-alone basis, and (ii) delivery of the undelivered service element(s) is probable and substantially in the control of the Company. Arrangement consideration is then allocated to each unit, delivered or undelivered, based on the relative selling price of each unit of accounting based first on vendor-specific objective evidence, if it exists, and then based on estimated selling price. |
• | Vendor-specific objective: In most instances, products are sold separately in stand-alone arrangements. Services are also sold separately through renewals of contracts with varying periods. The Company determines vendor-specific objective based on its pricing and discounting practices for the specific product or service when sold separately, considering geographical, customer, and other economic or marketing variables, as well as renewal rates or stand-alone prices for the service element(s). |
• | Estimated Selling Price: Represents the price at which the Company would sell a product or service if it were sold on a stand-alone basis. When vendor-specific objective evidence does not exist for all elements, the Company determines estimated selling price for the arrangement element based on sales, cost and margin analysis, as well as other inputs based on its pricing practices. Adjustments for other market and Company-specific factors are made as deemed necessary in determining estimated selling price. |
December 31, | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Warranty Expense | $ | 25.2 | $ | 6.0 | $ | 6.0 | |||||
Warranty Accrual | 11.2 | 3.8 | 4.0 |
(in millions, except for per share amounts) | Net income attributable to Dentsply Sirona | Shares | Earnings per common share | ||||||
Year Ended December 31, 2016 | |||||||||
Basic | 429.9 | 218.0 | $ | 1.97 | |||||
Incremental shares from assumed exercise of dilutive options and RSUs | 3.6 | ||||||||
Diluted | 429.9 | 221.6 | $ | 1.94 | |||||
Year Ended December 31, 2015 | |||||||||
Basic | 251.2 | 140.0 | $ | 1.79 | |||||
Incremental shares from assumed exercise of dilutive options and RSUs | 2.5 | ||||||||
Diluted | 251.2 | 142.5 | $ | 1.76 | |||||
Year Ended December 31, 2014 | |||||||||
Basic | 322.9 | 141.7 | $ | 2.28 | |||||
Incremental shares from assumed exercise of dilutive options and RSUs | 2.5 | ||||||||
Diluted | 322.9 | 144.2 | $ | 2.24 |
(in millions) | Foreign Currency Translation Gain (Loss) | Gain and (Loss) on Derivative Financial Instruments Designated as Cash Flow Hedges | Gain and (Loss) on Derivative Financial Instruments | Pension Liability Gain (Loss) | Total | ||||||||||||||
Balance, net of tax, at December 31, 2015 | $ | (401.2 | ) | $ | (1.2 | ) | $ | (110.2 | ) | $ | (81.4 | ) | $ | (594.0 | ) | ||||
Other comprehensive (loss) income before reclassifications and tax impact | (71.4 | ) | (0.8 | ) | (13.2 | ) | (25.4 | ) | (110.8 | ) | |||||||||
Tax (expense) benefit | (17.9 | ) | 0.5 | 6.6 | 7.9 | (2.9 | ) | ||||||||||||
Other comprehensive (loss) income, net of tax, before reclassifications | (89.3 | ) | (0.3 | ) | (6.6 | ) | (17.5 | ) | (113.7 | ) | |||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | — | (1.7 | ) | — | 3.7 | 2.0 | |||||||||||||
Net (decrease) increase in other comprehensive income | (89.3 | ) | (2.0 | ) | (6.6 | ) | (13.8 | ) | (111.7 | ) | |||||||||
Balance, net of tax, at December 31, 2016 | $ | (490.5 | ) | $ | (3.2 | ) | $ | (116.8 | ) | $ | (95.2 | ) | $ | (705.7 | ) |
(in millions) | Foreign Currency Translation Gain (Loss) | Gain and (Loss) on Derivative Financial Instruments Designated as Cash Flow Hedges | Gain and (Loss) on Derivative Financial Instruments | Net Unrealized Holding Gain (Loss) on Available-for-Sale Securities | Pension Liability Gain (Loss) | Total | |||||||||||||||||
Balance, net of tax, at December 31, 2014 | $ | (212.5 | ) | $ | (10.8 | ) | $ | (112.7 | ) | $ | 8.5 | $ | (113.6 | ) | $ | (441.1 | ) | ||||||
Other comprehensive (loss) income before reclassifications and tax impact | (178.0 | ) | 22.1 | 4.5 | (6.8 | ) | 39.9 | (118.3 | ) | ||||||||||||||
Tax (expense) benefit | (9.5 | ) | (3.3 | ) | (2.0 | ) | 2.0 | (13.3 | ) | (26.1 | ) | ||||||||||||
Other comprehensive income (loss), net of tax, before reclassifications | (187.5 | ) | 18.8 | 2.5 | (4.8 | ) | 26.6 | (144.4 | ) | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (1.2 | ) | (9.2 | ) | — | (3.7 | ) | 5.6 | (8.5 | ) | |||||||||||||
Net (decrease) increase in other comprehensive income | (188.7 | ) | 9.6 | 2.5 | (8.5 | ) | 32.2 | (152.9 | ) | ||||||||||||||
Balance, net of tax, at December 31, 2015 | $ | (401.2 | ) | $ | (1.2 | ) | $ | (110.2 | ) | $ | — | $ | (81.4 | ) | $ | (594.0 | ) |
(in millions) | |||||||||||||||
Details about AOCI Components | Amounts Reclassified from AOCI | Affected Line Item in the Statements of Operations | |||||||||||||
Year Ended December, 31 | |||||||||||||||
2016 | 2015 | 2014 | |||||||||||||
Realized foreign currency gain on liquidation of foreign subsidiary: | |||||||||||||||
Foreign currency translation adjustment | $ | — | $ | 1.2 | $ | — | Other expense (income), net | ||||||||
Gains and (loss) on derivative financial instruments: | |||||||||||||||
Interest rate swaps | $ | (2.9 | ) | $ | (10.1 | ) | $ | (3.7 | ) | Interest expense | |||||
Foreign exchange forward contracts | 4.8 | 18.0 | (6.4 | ) | Cost of products sold | ||||||||||
Foreign exchange forward contracts | 0.1 | 0.6 | (0.1 | ) | SG&A expenses | ||||||||||
Commodity contracts | (0.1 | ) | (0.5 | ) | (0.5 | ) | Cost of products sold | ||||||||
Net gain (loss) before tax | 1.9 | 8.0 | (10.7 | ) | |||||||||||
Tax impact | (0.2 | ) | 1.2 | 3.7 | Provision for income taxes | ||||||||||
Net gain (loss) after tax | $ | 1.7 | $ | 9.2 | $ | (7.0 | ) | ||||||||
Realized gain on available-for-sale securities: | |||||||||||||||
Available -for-sale-securities | $ | — | $ | 5.1 | $ | — | Other expense (income), net | ||||||||
Tax impact | — | (1.4 | ) | — | Provision for income taxes | ||||||||||
Net gain after tax | $ | — | $ | 3.7 | $ | — | |||||||||
Amortization of defined benefit pension and other postemployment benefit items: | |||||||||||||||
Amortization of prior service benefits | $ | 0.2 | $ | 0.2 | $ | 0.1 | (a) | ||||||||
Amortization of net actuarial losses | (5.3 | ) | (8.0 | ) | (2.9 | ) | (a) | ||||||||
Net loss before tax | (5.1 | ) | (7.8 | ) | (2.8 | ) | |||||||||
Tax impact | 1.4 | 2.2 | 1.0 | Provision for income taxes | |||||||||||
Net loss after tax | $ | (3.7 | ) | $ | (5.6 | ) | $ | (1.8 | ) | ||||||
Total reclassifications for the period | $ | (2.0 | ) | $ | 8.5 | $ | (8.8 | ) | |||||||
(in millions, except per share amount)* | ||||||||
Sirona common stock outstanding at February 29, 2016 | 56.1 | |||||||
Exchange ratio | 1.8142 | |||||||
DENTSPLY common stock issued for consideration | 101.8 | |||||||
DENTSPLY common stock per share price at February 26, 2016 | $ | 60.67 | ||||||
Fair value of DENTSPLY common stock issued to Sirona shareholders | $ | 6,173.8 | ||||||
Fair value of vested portion of Sirona stock-based awards outstanding - 1.5 million | ||||||||
at February 29, 2016 | 82.4 | |||||||
Total acquisition consideration | $ | 6,256.2 |
(in millions) | ||||
Cash and cash equivalents | $ | 522.3 | ||
Trade receivables | 143.0 | |||
Inventory | 220.7 | |||
Prepaid expenses and other current assets | 111.1 | |||
Property, plant and equipment | 237.1 | |||
Identifiable intangible assets | 2,435.0 | |||
Goodwill | 3,776.8 | |||
Other long-term assets | 10.7 | |||
Total assets | 7,456.7 | |||
Accounts payable | 68.0 | |||
Other current liabilities | 197.9 | |||
Debt | 57.5 | |||
Deferred income taxes | 771.6 | |||
Other long-term liabilities | 95.3 | |||
Total liabilities | 1,190.3 | |||
Noncontrolling interest | 10.2 | |||
Total identifiable net assets | $ | 6,256.2 |
(in millions, except for useful life) | Weighted Average | |||||
Useful Life | ||||||
Amount | (in years) | |||||
Customer relationships | $ | 495.0 | 14 | |||
Developed technology and patents | 1,035.0 | 12 | ||||
Trade names and trademarks | 905.0 | Indefinite | ||||
Total | $ | 2,435.0 |
Pro forma - unaudited | ||||||||
Year Ended | ||||||||
(in millions, except per share amount) | 2016 | 2015 | ||||||
Net sales | $ | 3,916.0 | $ | 3,830.0 | ||||
Net income attributable to Dentsply Sirona | $ | 437.0 | $ | 388.5 | ||||
Diluted earnings per common share | $ | 1.85 | $ | 1.58 |
(in millions, except for useful life) | Weighted Average | |||||
Useful Life | ||||||
Amount | (in years) | |||||
Customer relationships | $ | 91.3 | 15 | |||
Developed technology and patents | 37.4 | 15 | ||||
Trade names and trademarks | 25.3 | Indefinite | ||||
Total | $ | 154.0 |
Third Party Net Sales | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Dental and Healthcare Consumables | $ | 2,058.1 | $ | 1,961.0 | $ | 2,142.3 | |||||
Technologies | 1,687.2 | 713.3 | 780.3 | ||||||||
Total net sales | $ | 3,745.3 | $ | 2,674.3 | $ | 2,922.6 |
Third Party Net Sales, Excluding Precious Metal Content | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Dental and Healthcare Consumables | $ | 1,994.3 | $ | 1,868.8 | $ | 2,013.2 | |||||
Technologies | 1,686.7 | 712.7 | 779.5 | ||||||||
Total net sales, excluding precious metal content | $ | 3,681.0 | $ | 2,581.5 | $ | 2,792.7 | |||||
Precious metal content of sales | 64.3 | 92.8 | 129.9 | ||||||||
Total net sales, including precious metal content | $ | 3,745.3 | $ | 2,674.3 | $ | 2,922.6 |
Intersegment Net Sales | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Dental and Healthcare Consumables | $ | 233.0 | $ | 208.0 | $ | 210.8 | |||||
Technologies | 6.4 | 7.3 | 6.8 | ||||||||
All Other (a) | 239.5 | 214.6 | 239.2 | ||||||||
Eliminations | (478.9 | ) | (429.9 | ) | (456.8 | ) | |||||
Total | $ | — | $ | — | $ | — |
(a) | Includes amounts recorded at Corporate headquarters and one distribution warehouse not managed by named segments. |
Depreciation and Amortization | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Dental and Healthcare Consumables | $ | 78.1 | $ | 74.4 | $ | 78.2 | |||||
Technologies | 182.4 | 42.0 | 45.5 | ||||||||
All Other (b) | 11.2 | 6.5 | 5.4 | ||||||||
Total | $ | 271.7 | $ | 122.9 | $ | 129.1 |
(b) | Includes amounts recorded at Corporate headquarters. |
Segment Operating Income (Loss) | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Dental and Healthcare Consumables | $ | 544.5 | $ | 470.1 | $ | 467.5 | |||||
Technologies | 355.1 | 93.7 | 111.3 | ||||||||
Segment adjusted operating income before income taxes and interest | $ | 899.6 | $ | 563.8 | $ | 578.8 | |||||
Reconciling Items (income) expense: | |||||||||||
All Other (c) | 261.3 | 78.4 | 72.1 | ||||||||
Restructuring and other costs | 23.2 | 64.7 | 11.1 | ||||||||
Interest expense | 35.9 | 55.9 | 46.9 | ||||||||
Interest income | (2.0 | ) | (2.2 | ) | (5.6 | ) | |||||
Other expense (income), net | (20.1 | ) | (8.2 | ) | (0.1 | ) | |||||
Amortization of intangible assets | 155.4 | 43.7 | 47.9 | ||||||||
Depreciation resulting from the fair value step-up of property, plant and equipment from business combinations | 5.0 | 1.8 | 2.1 | ||||||||
Income before income taxes | $ | 440.9 | $ | 329.7 | $ | 404.4 |
(c) | Includes results of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments. |
Capital Expenditures | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Dental and Healthcare Consumables | $ | 42.1 | $ | 37.9 | $ | 62.2 | |||||
Technologies | 73.8 | 23.3 | 28.9 | ||||||||
All Other (d) | 9.1 | 10.8 | 8.5 | ||||||||
Total | $ | 125.0 | $ | 72.0 | $ | 99.6 |
(d) | Includes capital expenditures of Corporate headquarters. |
Assets | |||||||
(in millions) | 2016 | 2015 | |||||
Dental and Healthcare Consumables | $ | 2,616.6 | $ | 2,537.0 | |||
Technologies | 8,103.7 | 1,537.7 | |||||
All Other (e) | 935.8 | 328.2 | |||||
Total | $ | 11,656.1 | $ | 4,402.9 |
(e) | Includes assets of Corporate headquarters, inter-segment eliminations and one distribution warehouse not managed by named segments. |
(in millions) | United States | Germany | Sweden | Other Foreign | Consolidated | ||||||||||||||
2016 | |||||||||||||||||||
Net sales | $ | 1,383.0 | $ | 617.0 | $ | 53.2 | $ | 1,692.1 | $ | 3,745.3 | |||||||||
Property, plant and equipment, net | 192.5 | 244.1 | 82.5 | 280.7 | 799.8 | ||||||||||||||
2015 | |||||||||||||||||||
Net sales | $ | 1,027.4 | $ | 472.8 | $ | 42.3 | $ | 1,131.8 | $ | 2,674.3 | |||||||||
Property, plant and equipment, net | 178.5 | 92.1 | 92.3 | 195.9 | 558.8 | ||||||||||||||
2014 | |||||||||||||||||||
Net sales | $ | 1,015.9 | $ | 541.8 | $ | 48.9 | $ | 1,316.0 | $ | 2,922.6 | |||||||||
Property, plant and equipment, net | 170.8 | 109.3 | 103.9 | 204.8 | 588.8 |
December 31, | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Dental consumables products | $ | 1,770.3 | $ | 1,671.1 | $ | 1,807.6 | |||||
Dental technology products | 1,658.6 | 687.7 | 753.7 | ||||||||
Healthcare consumable products | 316.4 | 315.5 | 361.3 | ||||||||
Total net sales | $ | 3,745.3 | $ | 2,674.3 | $ | 2,922.6 |
December 31, | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Foreign exchange transaction (gains) losses | $ | (10.2 | ) | $ | (5.2 | ) | $ | 1.3 | |||
Other (income) expense, net | (9.9 | ) | (3.0 | ) | (1.4 | ) | |||||
Total other expense (income), net | $ | (20.1 | ) | $ | (8.2 | ) | $ | (0.1 | ) |
December 31, | |||||||
(in millions) | 2016 | 2015 | |||||
Finished goods | $ | 311.3 | $ | 218.2 | |||
Work-in-process | 77.1 | 52.3 | |||||
Raw materials and supplies | 128.7 | 69.9 | |||||
Inventories, net | $ | 517.1 | $ | 340.4 |
December 31, | |||||||
(in millions) | 2016 | 2015 | |||||
Assets, at cost: | |||||||
Land | $ | 52.8 | $ | 38.5 | |||
Buildings and improvements | 500.4 | 400.4 | |||||
Machinery and equipment | 1,218.8 | 846.7 | |||||
Construction in progress | 82.9 | 57.1 | |||||
1,854.9 | 1,342.7 | ||||||
Less: Accumulated depreciation | 1,055.1 | 783.9 | |||||
Property, plant and equipment, net | $ | 799.8 | $ | 558.8 |
(in millions) | Dental and Healthcare Consumables | Technologies | Total | ||||||||
Balance at December 31, 2014 | $ | 951.9 | $ | 1,137.4 | $ | 2,089.3 | |||||
Acquisition activity | 31.3 | — | 31.3 | ||||||||
Effect of exchange rate changes | (26.6 | ) | (106.4 | ) | (133.0 | ) | |||||
Balance at December 31, 2015 | $ | 956.6 | $ | 1,031.0 | $ | 1,987.6 | |||||
Merger related additions | 113.3 | 3,663.5 | 3,776.8 | ||||||||
Acquisition activity | 8.5 | 196.1 | 204.6 | ||||||||
Adjustment of provisional amounts on prior acquisitions | 1.6 | — | 1.6 | ||||||||
Effect of exchange rate changes | 11.2 | (29.8 | ) | (18.6 | ) | ||||||
Balance, at December 31, 2016 | $ | 1,091.2 | $ | 4,860.8 | $ | 5,952.0 |
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||||
(in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||
Patents | $ | 1,189.5 | $ | (177.3 | ) | $ | 1,012.2 | $ | 164.8 | $ | (95.0 | ) | $ | 69.8 | |||||||||
Trademarks | 65.3 | (38.7 | ) | 26.6 | 67.0 | (36.0 | ) | 31.0 | |||||||||||||||
Licensing agreements | 33.5 | (26.7 | ) | 6.8 | 33.7 | (24.9 | ) | 8.8 | |||||||||||||||
Customer relationships | 1,004.8 | (181.2 | ) | 823.6 | 437.7 | (125.4 | ) | 312.3 | |||||||||||||||
Total definite-lived | $ | 2,293.1 | $ | (423.9 | ) | $ | 1,869.2 | $ | 703.2 | $ | (281.3 | ) | $ | 421.9 | |||||||||
Trademarks and In-process R&D | $ | 1,088.4 | $ | — | $ | 1,088.4 | $ | 178.8 | $ | — | $ | 178.8 | |||||||||||
Total identifiable intangible assets | $ | 3,381.5 | $ | (423.9 | ) | $ | 2,957.6 | $ | 882.0 | $ | (281.3 | ) | $ | 600.7 |
December 31, | |||||||
(in millions) | 2016 | 2015 | |||||
Deferred taxes | $ | 172.1 | $ | 70.4 | |||
Deposits | 39.4 | 14.8 | |||||
Prepaid expenses | 36.5 | 24.1 | |||||
Fair value of derivatives | 14.1 | 28.1 | |||||
Other current assets | 83.5 | 34.4 | |||||
Prepaid expenses and other current assets | $ | 345.6 | $ | 171.8 |
December 31, | |||||||
(in millions) | 2016 | 2015 | |||||
Payroll, commissions, bonuses, other cash compensation and employee benefits | $ | 143.4 | $ | 110.0 | |||
Sales and marketing programs | 102.0 | 43.3 | |||||
Accrued vacation and holidays | 37.5 | 26.1 | |||||
Restructuring costs | 27.4 | 35.4 | |||||
Professional and legal costs | 20.2 | 14.3 | |||||
General insurance | 15.0 | 13.5 | |||||
Deferred income | 14.1 | 2.2 | |||||
Warranty liabilities | 11.2 | 3.8 | |||||
Third party royalties | 10.4 | 8.5 | |||||
Accrued interest | 8.1 | 8.9 | |||||
Accrued travel expenses | 6.9 | 5.6 | |||||
Accrued property taxes | 6.4 | 2.7 | |||||
Current portion of derivatives | 2.7 | 11.0 | |||||
Other | 57.4 | 24.8 | |||||
Accrued liabilities | $ | 462.7 | $ | 310.1 |
December 31, | ||||||||||||||
2016 | 2015 | |||||||||||||
Principal | Interest | Principal | Interest | |||||||||||
(in millions except percentage amounts) | Balance | Rate | Balance | Rate | ||||||||||
Brazil short-term loans | $ | 1.5 | 15.0 | % | $ | 2.5 | 15.1 | % | ||||||
China short-term loans | 6.8 | 3.5 | % | |||||||||||
Other short-term loans | 1.8 | 3.1 | % | 0.4 | 2.8 | % | ||||||||
Add: Current portion of long-term debt | 11.0 | 9.2 | ||||||||||||
Total short-term debt | $ | 21.1 | $ | 12.1 | ||||||||||
2016 | 2015 | |||||||||||||
Maximum month-end short-term debt outstanding during the year | $ | 49.0 | $ | 453.2 | ||||||||||
Average amount of short-term debt outstanding during the year | 15.5 | 265.3 | ||||||||||||
Weighted-average interest rate on short-term debt at year-end | 3.9 | % | 13.4 | % |
December 31, | ||||||||||||||
2016 | 2015 | |||||||||||||
Principal | Interest | Principal | Interest | |||||||||||
(in millions except percentage amounts) | Balance | Rate | Balance | Rate | ||||||||||
Private placement notes $250.0 million due February 2016 | $ | — | — | % | $ | 75.1 | 4.1 | % | ||||||
Fixed rate senior notes $300.0 million due August 2016 | — | — | % | 299.9 | 2.8 | % | ||||||||
Term loan 65.0 million Swiss francs denominated due September 2016 | — | — | % | 64.9 | 0.3 | % | ||||||||
Term loan 12.6 billion Japanese yen denominated due September 2019 | 107.5 | 0.7 | % | 104.4 | 0.8 | % | ||||||||
Term loan $175.0 million due August 2020 | 148.8 | 2.1 | % | 157.5 | 1.5 | % | ||||||||
Fixed rate senior notes $450 million due August 2021 | 295.7 | 4.1 | % | 295.6 | 4.1 | % | ||||||||
Private placement notes 70.0 million euros due October 2024 | 73.8 | 1.0 | % | — | — | |||||||||
Private placement notes 25.0 million Swiss franc due December 2025 | 24.5 | 0.9 | % | 25.0 | 0.9 | % | ||||||||
Private placement notes 97.0 million euros due December 2025 | 102.2 | 2.1 | % | 105.3 | 2.0 | % | ||||||||
Private placement notes 26.0 million euros due February 2026 | 27.4 | 2.1 | % | — | — | |||||||||
Private placement notes 58.0 million Swiss franc due August 2026 | 57.0 | 1.0 | % | — | — | |||||||||
Private placement notes 106.0 million euros due August 2026 | 111.7 | 2.3 | % | — | — | |||||||||
Private placement notes 70.0 million euros due October 2027 | 73.7 | 1.3 | % | — | — | |||||||||
Private placement notes 7.5 million Swiss franc due December 2027 | 7.4 | 1.0 | % | 7.5 | 1.0 | % | ||||||||
Private placement notes 15.0 million euros due December 2027 | 15.8 | 2.2 | % | 16.3 | 2.2 | % | ||||||||
Private placement notes 140.0 million Swiss franc due August 2028 | 137.6 | 1.2 | % | — | — | |||||||||
Private placement notes 70.0 million euros due October 2029 | 73.8 | 1.5 | % | — | — | |||||||||
Private placement notes 70.0 million euros due October 2030 | 73.7 | 1.6 | % | — | — | |||||||||
Private placement notes 45.0 million euros due February 2031 | 47.4 | 2.5 | % | — | — | |||||||||
Private placement notes 65.0 million Swiss franc due August 2031 | 63.9 | 1.3 | % | — | — | |||||||||
Private placement notes 70.0 million euros due October 2031 | 73.8 | 1.7 | % | — | — | |||||||||
Other borrowings, various currencies and rates | 12.5 | 2.0 | ||||||||||||
$ | 1,528.2 | $ | 1,153.5 | |||||||||||
Less: Current portion | ||||||||||||||
(included in “Notes payable and current portion of long-term debt” in the Consolidated Balance Sheets) | 11.0 | 9.2 | ||||||||||||
Less: Long-term portion of deferred financing costs | 6.1 | 3.3 | ||||||||||||
Long-term portion | $ | 1,511.1 | $ | 1,141.0 |
(in millions) | |||
2017 | $ | 11.0 | |
2018 | 10.7 | ||
2019 | 117.6 | ||
2020 | 123.9 | ||
2021 | 296.7 | ||
2022 and beyond | 968.3 | ||
$ | 1,528.2 |
(in millions) | Shares of Common Stock | Shares of Treasury Stock | Outstanding Shares | |||||
Balance at December 31, 2013 | 162.8 | (20.5 | ) | 142.3 | ||||
Shares of treasury stock issued | — | 1.9 | 1.9 | |||||
Repurchase of common stock at an average cost of $49.88 | — | (3.3 | ) | (3.3 | ) | |||
Balance at December 31, 2014 | 162.8 | (21.9 | ) | 140.9 | ||||
Shares of treasury stock issued | — | 1.3 | 1.3 | |||||
Repurchase of common stock at an average cost of $52.50 | — | (2.1 | ) | (2.1 | ) | |||
Balance at December 31, 2015 | 162.8 | (22.7 | ) | 140.1 | ||||
Common stock issuance related to Merger | 101.7 | — | 101.7 | |||||
Shares of treasury stock issued | — | 1.7 | 1.7 | |||||
Repurchase of common stock at an average cost of $60.78 | — | (13.4 | ) | (13.4 | ) | |||
Balance at December 31, 2016 | 264.5 | (34.4 | ) | 230.1 |
December 31, | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Stock option expense | $ | 10.6 | $ | 8.1 | $ | 8.8 | |||||
RSU expense | 29.1 | 16.2 | 15.4 | ||||||||
Total stock based compensation expense | $ | 39.7 | $ | 24.3 | $ | 24.2 | |||||
Related deferred income tax benefit | $ | 10.9 | $ | 7.1 | $ | 6.7 |
December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Weighted average fair value per share | $ | 12.78 | $ | 10.87 | $ | 9.41 | |||||
Expected dividend yield | 0.52 | % | 0.51 | % | 0.59 | % | |||||
Risk-free interest rate | 1.54 | % | 1.59 | % | 1.61 | % | |||||
Expected volatility | 20.8 | % | 20.3 | % | 21.6 | % | |||||
Expected life (years) | 6.14 | 5.68 | 5.13 |
Outstanding | Exercisable | ||||||||||||||||||||
(in millions, except per share amounts) | Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value | Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value | |||||||||||||||
December 31, 2015 | 7.3 | $ | 38.85 | $ | 159.9 | 5.7 | $ | 36.38 | $ | 139.4 | |||||||||||
Granted | 0.7 | 57.52 | |||||||||||||||||||
Merger | 1.7 | 26.93 | |||||||||||||||||||
Exercised | (1.3 | ) | 30.73 | ||||||||||||||||||
December 31, 2016 | 8.4 | $ | 39.22 | $ | 155.9 | 6.7 | $ | 36.03 | $ | 144.9 |
Outstanding | Exercisable | ||||||||||||||||||
(in millions, except per share amounts and life) | Number Outstanding at December 31, | Weighted Average Remaining Contractual Life (in years) | Weighted Average Exercise Price | Number Exercisable at December 31, | Weighted Average Exercise Price | ||||||||||||||
Range of | |||||||||||||||||||
Exercise Prices | 2016 | 2016 | |||||||||||||||||
5.01 | - | 10.00 | 0.3 | 1.9 | $ | 6.50 | 0.3 | $ | 6.50 | ||||||||||
10.01 | - | 20.00 | 0.1 | 1.4 | 14.39 | 0.1 | 14.39 | ||||||||||||
20.01 | - | 30.00 | 0.9 | 2.3 | 25.68 | 0.9 | 25.68 | ||||||||||||
30.01 | - | 40.00 | 3.4 | 4.4 | 36.49 | 3.2 | 36.47 | ||||||||||||
40.01 | - | 50.00 | 2.3 | 5.6 | 44.11 | 1.9 | 43.69 | ||||||||||||
50.01 | - | 60.00 | 1.2 | 8.5 | 53.58 | 0.3 | 52.12 | ||||||||||||
60.01 | - | 70.00 | 0.2 | 9.2 | 60.74 | — | — | ||||||||||||
8.4 | 5.1 | $ | 39.22 | 6.7 | $ | 36.03 |
Unvested Restricted Stock Units | ||||||
Shares | Weighted Average Grant Date Fair Value | |||||
(in millions, except per share amounts) | ||||||
Unvested at December 31, 2015 | 1.1 | $ | 45.82 | |||
Granted | 0.4 | 56.40 | ||||
Merger | 1.0 | 46.64 | ||||
Vested | (0.5 | ) | 40.06 | |||
Forfeited | (0.1 | ) | 50.77 | |||
Unvested at December 31, 2016 | 1.9 | $ | 49.55 |
December 31, | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
United States | $ | 28.9 | $ | 26.8 | $ | 59.6 | |||||
Foreign | 412.0 | 302.9 | 344.8 | ||||||||
$ | 440.9 | $ | 329.7 | $ | 404.4 |
December 31, | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Current: | |||||||||||
U.S. federal | $ | 2.3 | $ | (3.0 | ) | $ | (12.8 | ) | |||
U.S. state | 5.6 | 1.7 | (0.3 | ) | |||||||
Foreign | 111.7 | 50.9 | 76.7 | ||||||||
Total | $ | 119.6 | $ | 49.6 | $ | 63.6 | |||||
Deferred: | |||||||||||
U.S. federal | $ | 27.6 | $ | 44.3 | $ | 32.3 | |||||
U.S. state | 1.3 | 0.3 | (9.9 | ) | |||||||
Foreign | (139.0 | ) | (17.2 | ) | (4.9 | ) | |||||
Total | $ | (110.1 | ) | $ | 27.4 | $ | 17.5 | ||||
$ | 9.5 | $ | 77.0 | $ | 81.1 |
December 31, | ||||||||
2016 | 2015 | 2014 | ||||||
Statutory U. S. federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
Effect of: | ||||||||
State income taxes, net of federal benefit | 1.1 | 0.4 | 0.7 | |||||
Federal benefit of R&D and foreign tax credits | (12.6 | ) | (11.2 | ) | (10.5 | ) | ||
Tax effect of international operations | (3.9 | ) | (6.4 | ) | (3.2 | ) | ||
Net effect of tax audit activity | (0.6 | ) | (0.4 | ) | 1.5 | |||
Tax effect of enacted statutory rate changes | (0.2 | ) | 0.2 | (0.3 | ) | |||
Federal tax on unremitted earnings of certain foreign subsidiaries | 0.1 | 2.5 | (0.1 | ) | ||||
Valuation allowance adjustments | (16.3 | ) | 0.2 | (2.1 | ) | |||
Other | (0.4 | ) | 3.1 | (0.9 | ) | |||
Effective income tax rate on operations | 2.2 | % | 23.4 | % | 20.1 | % |
December 31, 2016 | December 31, 2015 | ||||||||||||||
(in millions) | Deferred Tax Asset | Deferred Tax Liability | Deferred Tax Asset | Deferred Tax Liability | |||||||||||
Commission and bonus accrual | $ | 8.4 | $ | — | $ | 7.5 | $ | — | |||||||
Employee benefit accruals | 71.5 | — | 52.2 | — | |||||||||||
Inventory | 41.9 | — | 22.7 | — | |||||||||||
Identifiable intangible assets | — | 1,011.8 | — | 318.0 | |||||||||||
Insurance premium accruals | 5.5 | — | 4.9 | — | |||||||||||
Miscellaneous accruals | 16.0 | — | 11.3 | — | |||||||||||
Other | 19.6 | — | 20.5 | — | |||||||||||
Unrealized losses included in AOCI | 17.5 | — | 14.6 | — | |||||||||||
Property, plant and equipment | — | 54.8 | — | 39.3 | |||||||||||
Product warranty accruals | 1.6 | — | 1.3 | — | |||||||||||
Foreign tax credit and R&D carryforward | 137.9 | — | 135.7 | — | |||||||||||
Restructuring and other cost accruals | — | 8.1 | 5.5 | — | |||||||||||
Sales and marketing accrual | 8.0 | — | 7.4 | — | |||||||||||
Taxes on unremitted earnings of foreign subsidiaries | — | 2.1 | — | 10.2 | |||||||||||
Tax loss carryforwards and other tax attributes | 274.5 | — | 282.1 | — | |||||||||||
Valuation allowance | (182.7 | ) | — | (274.3 | ) | — | |||||||||
$ | 419.7 | $ | 1,076.8 | $ | 291.4 | $ | 367.5 |
December 31, | |||||||
(in millions) | 2016 | 2015 | |||||
Assets | |||||||
Prepaid expenses and other current assets | $ | 172.1 | $ | 70.4 | |||
Other noncurrent assets, net | 22.8 | 16.9 | |||||
Liabilities | |||||||
Income taxes payable | 3.4 | 3.1 | |||||
Deferred income taxes | 848.6 | 160.3 |
December 31, | |||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||
Unrecognized tax benefits at beginning of period | $ | 12.1 | $ | 21.9 | $ | 18.0 | |||||
Gross change for prior period positions | (2.0 | ) | (7.6 | ) | 5.1 | ||||||
Gross change for current year positions | 2.2 | 0.2 | 0.2 | ||||||||
Decrease due to settlements and payments | (1.3 | ) | (0.5 | ) | (0.2 | ) | |||||
Decrease due to statute expirations | — | (0.2 | ) | (0.6 | ) | ||||||
Increase due to effect of foreign currency translation | — | — | — | ||||||||
Decrease due to effect from foreign currency translation | (0.2 | ) | (1.7 | ) | (0.6 | ) | |||||
Unrecognized tax benefits at end of period | $ | 10.8 | $ | 12.1 | $ | 21.9 |
Other Postemployment | |||||||||||||||
Pension Benefits | Benefits | ||||||||||||||
December 31, | December 31, | ||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Change in Benefit Obligation | |||||||||||||||
Benefit obligation at beginning of year | $ | 378.9 | $ | 436.9 | $ | 14.1 | $ | 13.9 | |||||||
Service cost | 15.7 | 17.1 | 0.3 | 0.4 | |||||||||||
Interest cost | 8.0 | 7.3 | 0.6 | 0.6 | |||||||||||
Participant contributions | 3.8 | 3.7 | 0.3 | 0.4 | |||||||||||
Actuarial losses (gains) | 26.8 | (41.1 | ) | 1.4 | (0.4 | ) | |||||||||
Plan amendments | 0.3 | (0.3 | ) | — | — | ||||||||||
Acquisitions/Divestitures | 76.3 | (0.7 | ) | — | — | ||||||||||
Effect of exchange rate changes | (14.2 | ) | (28.7 | ) | — | — | |||||||||
Plan curtailments and settlements | (8.5 | ) | (1.6 | ) | — | — | |||||||||
Benefits paid | (14.0 | ) | (13.7 | ) | (0.6 | ) | (0.8 | ) | |||||||
Benefit obligation at end of year | $ | 473.1 | $ | 378.9 | $ | 16.1 | $ | 14.1 | |||||||
Change in Plan Assets | |||||||||||||||
Fair value of plan assets at beginning of year | $ | 142.0 | $ | 143.6 | $ | — | $ | — | |||||||
Actual return on assets | 6.5 | 0.5 | — | — | |||||||||||
Plan settlements | (8.0 | ) | (0.3 | ) | — | — | |||||||||
Acquisitions/Divestitures | 12.7 | — | — | — | |||||||||||
Effect of exchange rate changes | (2.4 | ) | (2.2 | ) | — | — | |||||||||
Employer contributions | 16.2 | 10.4 | 0.3 | 0.4 | |||||||||||
Participant contributions | 3.8 | 3.7 | 0.3 | 0.4 | |||||||||||
Benefits paid | (14.0 | ) | (13.7 | ) | (0.6 | ) | (0.8 | ) | |||||||
Fair value of plan assets at end of year | $ | 156.8 | $ | 142.0 | $ | — | $ | — | |||||||
Funded status at end of year | $ | (316.3 | ) | $ | (236.9 | ) | $ | (16.1 | ) | $ | (14.1 | ) |
Pension Benefits | Other Postemployment Benefits | ||||||||||||||||
Location On The | December 31, | December 31, | |||||||||||||||
(in millions) | Consolidated Balance Sheet | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Other noncurrent assets, net | Other noncurrent assets, net | $ | 0.1 | $ | — | $ | — | $ | — | ||||||||
Deferred tax asset | Other noncurrent assets, net | 31.7 | 27.0 | 1.4 | 0.9 | ||||||||||||
Total assets | $ | 31.8 | $ | 27.0 | $ | 1.4 | $ | 0.9 | |||||||||
Current liabilities | Accrued liabilities | (6.9 | ) | (4.2 | ) | (0.7 | ) | (0.7 | ) | ||||||||
Other noncurrent liabilities | Other noncurrent liabilities | (309.5 | ) | (232.7 | ) | (15.4 | ) | (13.4 | ) | ||||||||
Deferred tax liability | Deferred income taxes | (0.5 | ) | (0.8 | ) | — | — | ||||||||||
Total liabilities | $ | (316.9 | ) | $ | (237.7 | ) | $ | (16.1 | ) | $ | (14.1 | ) | |||||
Accumulated other comprehensive income | Accumulated other comprehensive loss | 82.3 | 71.5 | 2.2 | 1.5 | ||||||||||||
Net amount recognized | $ | (202.8 | ) | $ | (139.2 | ) | $ | (12.5 | ) | $ | (11.7 | ) |
Other Postemployment | |||||||||||||||
Pension Benefits | Benefits | ||||||||||||||
December 31, | December 31, | ||||||||||||||
(in millions) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net actuarial loss | $ | 115.3 | $ | 100.1 | $ | 3.5 | $ | 2.4 | |||||||
Net prior service cost | (1.8 | ) | (2.4 | ) | — | — | |||||||||
Before tax AOCI | $ | 113.5 | $ | 97.7 | $ | 3.5 | $ | 2.4 | |||||||
Less: Deferred taxes | 31.2 | 26.2 | 1.3 | 0.9 | |||||||||||
Net of tax AOCI | $ | 82.3 | $ | 71.5 | $ | 2.2 | $ | 1.5 |
December 31, | |||||||
(in millions) | 2016 | 2015 | |||||
Projected benefit obligation | $ | 458.7 | $ | 377.7 | |||
Accumulated benefit obligation | 427.2 | 361.0 | |||||
Fair value of plan assets | 142.3 | 140.7 |
Pension Benefits | Other Postemployment Benefits | ||||||||||||||||||||||
(in millions) | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||||
Service cost | $ | 15.7 | $ | 17.1 | $ | 14.0 | $ | 0.3 | $ | 0.4 | $ | 0.2 | |||||||||||
Interest cost | 8.0 | 7.3 | 11.1 | 0.6 | 0.6 | 0.5 | |||||||||||||||||
Expected return on plan assets | (5.1 | ) | (5.4 | ) | (5.5 | ) | — | — | — | ||||||||||||||
Amortization of prior service (credit) cost | (0.2 | ) | (0.2 | ) | (0.1 | ) | — | — | — | ||||||||||||||
Amortization of net actuarial loss | 5.1 | 7.8 | 2.8 | 0.2 | 0.2 | 0.1 | |||||||||||||||||
Curtailment and settlement loss (gains) | 1.2 | (0.8 | ) | 0.1 | — | — | — | ||||||||||||||||
Net periodic benefit cost | $ | 24.7 | $ | 25.8 | $ | 22.4 | $ | 1.1 | $ | 1.2 | $ | 0.8 |
Pension Benefits | Other Postemployment Benefits | ||||||||||||||||||||||
(in millions) | 2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||||
Net actuarial loss (gain) | $ | 20.3 | $ | (48.6 | ) | $ | 88.5 | $ | 1.4 | $ | (0.4 | ) | $ | 1.4 | |||||||||
Net prior service cost (credit) | 0.4 | (0.3 | ) | 0.4 | — | — | — | ||||||||||||||||
Amortization | (4.9 | ) | (7.6 | ) | (2.6 | ) | (0.2 | ) | (0.2 | ) | — | ||||||||||||
Total recognized in AOCI | $ | 15.8 | $ | (56.5 | ) | $ | 86.3 | $ | 1.2 | $ | (0.6 | ) | $ | 1.4 | |||||||||
Total recognized in net periodic benefit cost and AOCI | $ | 40.5 | $ | (30.7 | ) | $ | 108.7 | $ | 2.3 | $ | 0.6 | $ | 2.2 |
(in millions) | Pension Benefits | Other Postemployment Benefits | |||||
Amount of net prior service (credit) cost | $ | (0.2 | ) | $ | — | ||
Amount of net loss | 6.5 | 0.2 |
Pension Benefits | Other Postemployment Benefits | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Discount rate | 1.6 | % | 2.1 | % | 1.8 | % | 4.4 | % | 4.7 | % | 4.3 | % | |||||
Rate of compensation increase | 2.6 | % | 2.5 | % | 2.6 | % | n/a | n/a | n/a | ||||||||
Health care cost trend pre 65 | n/a | n/a | n/a | 7.8 | % | 7.6 | % | 8.0 | % | ||||||||
Health care cost trend post 65 | n/a | n/a | n/a | 8.5 | % | 8.2 | % | 7.0 | % | ||||||||
Ultimate health care cost trend | n/a | n/a | n/a | 4.5 | % | 5.0 | % | 5.0 | % | ||||||||
Years until trend is reached pre 65 | n/a | n/a | n/a | 9.0 | 9.0 | 8.0 | |||||||||||
Years until ultimate trend is reached post 65 | n/a | n/a | n/a | 9.0 | 9.0 | 7.0 |
Pension Benefits | Other Postemployment Benefits | ||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | ||||||||||||
Discount rate | 2.1 | % | 1.8 | % | 3.2 | % | 4.7 | % | 4.3 | % | 4.8 | % | |||||
Expected return on plan assets | 3.3 | % | 3.7 | % | 3.8 | % | n/a | n/a | n/a | ||||||||
Rate of compensation increase | 2.5 | % | 2.6 | % | 2.7 | % | n/a | n/a | n/a | ||||||||
Health care cost trend | n/a | n/a | n/a | 7.8 | % | 8.5 | % | 8.5 | % | ||||||||
Ultimate health care cost trend | n/a | n/a | n/a | 4.5 | % | 5.0 | % | 5.0 | % | ||||||||
Years until ultimate trend is reached | n/a | n/a | n/a | 9.0 | 8.0 | 8.0 | |||||||||||
Measurement Date | 12/31/2016 | 12/31/2015 | 12/31/2014 | 12/31/2016 | 12/31/2015 | 12/31/2014 |
Other Postemployment Benefits | |||||||
(in millions) | 1% Increase | 1% Decrease | |||||
Effect on total of service and interest cost components | $ | 0.2 | $ | (0.2 | ) | ||
Effect on postemployment benefit obligation | 2.6 | (2.1 | ) |
December 31, 2016 | |||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets Category | |||||||||||||||
Cash and cash equivalents | $ | 11.5 | $ | 11.5 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
International | 39.1 | 39.1 | — | — | |||||||||||
Fixed income securities: | |||||||||||||||
Fixed rate bonds (a) | 52.6 | 52.6 | — | — | |||||||||||
Other types of investments: | |||||||||||||||
Mutual funds (b) | 14.3 | 14.3 | — | — | |||||||||||
Common trusts (c) | 9.9 | — | 9.9 | — | |||||||||||
Insurance contracts | 25.1 | — | — | 25.1 | |||||||||||
Hedge funds | 4.0 | — | — | 4.0 | |||||||||||
Real estate | 0.3 | — | — | 0.3 | |||||||||||
Total | $ | 156.8 | $ | 117.5 | $ | 9.9 | $ | 29.4 |
December 31, 2015 | |||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets Category | |||||||||||||||
Cash and cash equivalents | $ | 9.2 | $ | 9.2 | $ | — | $ | — | |||||||
Equity securities: | |||||||||||||||
International | 39.2 | 39.2 | — | — | |||||||||||
Fixed income securities: | |||||||||||||||
Fixed rate bonds (a) | 52.4 | 52.4 | — | — | |||||||||||
Other types of investments: | |||||||||||||||
Mutual funds (b) | 14.5 | 14.5 | — | — | |||||||||||
Common trusts (c) | 9.0 | — | 9.0 | — | |||||||||||
Insurance contracts | 14.2 | — | 3.9 | 10.3 | |||||||||||
Hedge funds | 3.2 | — | — | 3.2 | |||||||||||
Real estate | 0.3 | — | — | 0.3 | |||||||||||
Total | $ | 142.0 | $ | 115.3 | $ | 12.9 | $ | 13.8 |
(a) | This category includes fixed income securities invested primarily in Swiss bonds, foreign bonds denominated in Swiss francs, foreign currency bonds, mortgage notes and pledged letters. |
(b) | This category includes mutual funds balanced between moderate-income generation and moderate capital appreciation with investment allocations of approximately 50% equities and 50% fixed income investments. |
(c) | This category includes common/collective funds with investments in approximately 65% equities and 35% in fixed income investments. |
Year Ended December 31, 2016 | |||||||||||||||
(in millions) | Insurance Contracts | Hedge Funds | Real Estate | Total | |||||||||||
Balance at December 31, 2015 | $ | 10.3 | $ | 3.2 | $ | 0.3 | $ | 13.8 | |||||||
Actual return on plan assets: | |||||||||||||||
Relating to assets still held at the reporting date | 2.1 | — | — | 2.1 | |||||||||||
Acquisitions/Divestitures | 12.7 | — | — | 12.7 | |||||||||||
Purchases, sales and settlements, net | 1.0 | 0.9 | — | 1.9 | |||||||||||
Transfers in and/or (out) | (0.2 | ) | — | — | (0.2 | ) | |||||||||
Effect of exchange rate changes | (0.8 | ) | (0.1 | ) | — | (0.9 | ) | ||||||||
Balance at December 31, 2016 | $ | 25.1 | $ | 4.0 | $ | 0.3 | $ | 29.4 |
Year Ended December 31, 2015 | |||||||||||||||
(in millions) | Insurance Contracts | Hedge Funds | Real Estate | Total | |||||||||||
Balance at December 31, 2014 | $ | 11.9 | $ | 1.8 | $ | 0.4 | $ | 14.1 | |||||||
Actual return on plan assets: | |||||||||||||||
Relating to assets still held at the reporting date | (0.6 | ) | 0.1 | — | (0.5 | ) | |||||||||
Purchases, sales and settlements, net | 0.3 | 1.4 | — | 1.7 | |||||||||||
Effect of exchange rate changes | (1.3 | ) | (0.1 | ) | (0.1 | ) | (1.5 | ) | |||||||
Balance at December 31, 2015 | $ | 10.3 | $ | 3.2 | $ | 0.3 | $ | 13.8 |
(in millions) | Pension Benefits | Other Postemployment Benefits | |||||
2017 | $ | 15.4 | $ | 0.7 | |||
2018 | 15.5 | 0.7 | |||||
2019 | 14.8 | 0.6 | |||||
2020 | 17.2 | 0.6 | |||||
2021 | 16.2 | 0.6 | |||||
2022-2026 | 95.9 | 3.2 |
Severances | |||||||||||||||
(in millions) | 2014 and Prior Plans | 2015 Plans | 2016 Plans | Total | |||||||||||
Balance at December 31, 2015 | $ | 1.5 | $ | 34.6 | $ | — | $ | 36.1 | |||||||
Provisions and adjustments | — | 4.7 | 11.4 | 16.1 | |||||||||||
Amounts applied | (0.8 | ) | (18.5 | ) | (2.8 | ) | (22.1 | ) | |||||||
Change in estimates | (0.1 | ) | (0.8 | ) | (0.4 | ) | (1.3 | ) | |||||||
Balance at December 31, 2016 | $ | 0.6 | $ | 20.0 | $ | 8.2 | $ | 28.8 |
Lease/Contract Terminations | |||||||||||||||
(in millions) | 2014 and Prior Plans | 2015 Plans | 2016 Plans | Total | |||||||||||
Balance at December 31, 2015 | $ | 0.8 | $ | 3.4 | $ | — | $ | 4.2 | |||||||
Provisions and adjustments | — | 5.4 | 0.5 | 5.9 | |||||||||||
Amounts applied | (0.4 | ) | (3.3 | ) | (0.2 | ) | (3.9 | ) | |||||||
Change in estimates | (0.2 | ) | (3.0 | ) | — | (3.2 | ) | ||||||||
Balance at December 31, 2016 | $ | 0.2 | $ | 2.5 | $ | 0.3 | $ | 3.0 |
Other Restructuring Costs | |||||||||||||||
(in millions) | 2014 and Prior Plans | 2015 Plans | 2016 Plans | Total | |||||||||||
Balance at December 31, 2015 | $ | 0.3 | $ | 0.6 | $ | — | $ | 0.9 | |||||||
Provisions and adjustments | 0.1 | 3.1 | 0.5 | 3.7 | |||||||||||
Amounts applied | (0.2 | ) | (3.0 | ) | (0.3 | ) | (3.5 | ) | |||||||
Change in estimates | — | (0.4 | ) | — | (0.4 | ) | |||||||||
Balance at December 31, 2016 | $ | 0.2 | $ | 0.3 | $ | 0.2 | $ | 0.7 |
(in millions) | December 31, 2015 | Provisions and Adjustments | Amounts Applied | Change in Estimates | December 31, 2016 | ||||||||||||||
Dental and Healthcare Consumables | $ | 35.7 | $ | 20.5 | $ | (24.4 | ) | $ | (3.9 | ) | $ | 27.9 | |||||||
Technologies | 4.3 | 4.9 | (4.1 | ) | (0.6 | ) | 4.5 | ||||||||||||
All Other | 1.2 | 0.3 | (1.0 | ) | (0.4 | ) | 0.1 | ||||||||||||
Total | $ | 41.2 | $ | 25.7 | $ | (29.5 | ) | $ | (4.9 | ) | $ | 32.5 |
Severances | |||||||||||||||
(in millions) | 2013 and Prior Plans | 2014 Plans | 2015 Plans | Total | |||||||||||
Balance at December 31, 2014 | $ | 1.0 | $ | 5.0 | $ | — | $ | 6.0 | |||||||
Provisions and adjustments | 0.1 | 0.7 | 59.0 | 59.8 | |||||||||||
Amounts applied | (0.7 | ) | (4.1 | ) | (19.3 | ) | (24.1 | ) | |||||||
Change in estimates | (0.1 | ) | (0.4 | ) | (5.1 | ) | (5.6 | ) | |||||||
Balance at December 31, 2015 | $ | 0.3 | $ | 1.2 | $ | 34.6 | $ | 36.1 |
Lease/Contract Terminations | |||||||||||||||
(in millions) | 2013 and Prior Plans | 2014 Plans | 2015 Plans | Total | |||||||||||
Balance at December 31, 2014 | $ | 0.5 | $ | 1.7 | $ | — | $ | 2.2 | |||||||
Provisions and adjustments | — | (0.5 | ) | 5.0 | 4.5 | ||||||||||
Amounts applied | (0.2 | ) | (0.7 | ) | (0.9 | ) | (1.8 | ) | |||||||
Change in estimates | — | — | (0.7 | ) | (0.7 | ) | |||||||||
Balance at December 31, 2015 | $ | 0.3 | $ | 0.5 | $ | 3.4 | $ | 4.2 |
Other Restructuring Costs | |||||||||||||||
(in millions) | 2013 and Prior Plans | 2014 Plans | 2015 Plans | Total | |||||||||||
Balance at December 31, 2014 | $ | — | $ | 1.1 | $ | — | $ | 1.1 | |||||||
Provisions and adjustments | — | 0.2 | 3.5 | 3.7 | |||||||||||
Amounts applied | — | (0.8 | ) | (2.8 | ) | (3.6 | ) | ||||||||
Change in estimates | — | (0.2 | ) | (0.1 | ) | (0.3 | ) | ||||||||
Balance at December 31, 2015 | $ | — | $ | 0.3 | $ | 0.6 | $ | 0.9 |
(in millions) | December 31, 2014 | Provisions and Adjustments | Amounts Applied | Change in Estimates | December 31, 2015 | ||||||||||||||
Dental and Healthcare Consumables | $ | 6.2 | $ | 54.3 | $ | (20.9 | ) | $ | (3.9 | ) | $ | 35.7 | |||||||
Technologies | 3.0 | 11.9 | (8.0 | ) | (2.6 | ) | 4.3 | ||||||||||||
All Other | 0.1 | 1.8 | (0.6 | ) | (0.1 | ) | 1.2 | ||||||||||||
Total | $ | 9.3 | $ | 68.0 | $ | (29.5 | ) | $ | (6.6 | ) | $ | 41.2 |
Aggregate Notional Amount | Aggregate Notional Amount Maturing within 12 Months | |||||||
(in millions) | ||||||||
Foreign exchange forward contracts | $ | 292.0 | $ | 219.9 | ||||
Interest rate swaps | 107.5 | — | ||||||
Total derivative instruments designated as cash flow hedges | $ | 399.5 | $ | 219.9 |
December 31, 2016 | ||||||||||||||
Gain (Loss) in AOCI | Consolidated Statements of Operations Location | Effective Portion Reclassified from AOCI into Income (Expense) | Ineffective Portion Recognized in Income (Expense) | |||||||||||
(in millions) | ||||||||||||||
Effective Portion: | ||||||||||||||
Interest rate swaps | $ | (0.4 | ) | Interest expense | $ | (2.9 | ) | |||||||
Foreign exchange forward contracts | (0.3 | ) | Cost of products sold | 4.8 | ||||||||||
Foreign exchange forward contracts | (0.2 | ) | SG&A expenses | 0.1 | ||||||||||
Commodity contracts | 0.1 | Cost of products sold | (0.1 | ) | ||||||||||
Ineffective Portion: | ||||||||||||||
Foreign exchange forward contracts | Other expense (income), net | $ | (0.6 | ) | ||||||||||
Total in cash flow hedging | $ | (0.8 | ) | $ | 1.9 | $ | (0.6 | ) |
December 31, 2015 | ||||||||||||||
Gain (Loss) in AOCI | Consolidated Statements of Operations Location | Effective Portion Reclassified from AOCI into Income (Expense) | Ineffective Portion Recognized in Income (Expense) | |||||||||||
(in millions) | ||||||||||||||
Effective Portion: | ||||||||||||||
Interest rate swaps | $ | (1.4 | ) | Interest expense (a) | $ | (10.1 | ) | |||||||
Foreign exchange forward contracts | 23.3 | Cost of products sold | 18.0 | |||||||||||
Foreign exchange forward contracts | 0.5 | SG&A expenses | 0.6 | |||||||||||
Commodity contracts | (0.3 | ) | Cost of products sold | (0.5 | ) | |||||||||
Ineffective Portion: | ||||||||||||||
Foreign exchange forward contracts | Other expense (income), net | $ | (0.7 | ) | ||||||||||
Total for cash flow hedging | $ | 22.1 | $ | 8.0 | $ | (0.7 | ) |
December 31, 2014 | ||||||||||||||
Gain (Loss) in AOCI | Consolidated Statements of Operations Location | Effective Portion Reclassified from AOCI into Income (Expense) | Ineffective Portion Recognized in Income (Expense) | |||||||||||
(in millions) | ||||||||||||||
Effective Portion: | ||||||||||||||
Interest rate swaps | $ | (0.7 | ) | Interest expense | $ | (3.7 | ) | |||||||
Foreign exchange forward contracts | 4.3 | Cost of products sold | (6.4 | ) | ||||||||||
Foreign exchange forward contracts | 0.5 | SG&A expenses | (0.1 | ) | ||||||||||
Commodity contracts | (0.2 | ) | Cost of products sold | (0.5 | ) | |||||||||
Total for cash flow hedging | $ | 3.9 | $ | (10.7 | ) | $ | — |
Aggregate Notional Amount | Aggregate Notional Amount Maturing within 12 Months | |||||||
(in millions) | ||||||||
Foreign exchange forward contracts | $ | 95.1 | $ | 95.1 |
December 31, 2016 | ||||||||||
Gain (Loss) in AOCI | Consolidated Statements of Operations Location | Recognized in Income (Expense) | ||||||||
(in millions) | ||||||||||
Effective Portion: | ||||||||||
Foreign exchange forward contracts | $ | (13.2 | ) | Other expense (income), net | $ | 6.7 | ||||
Total for net investment hedging | $ | (13.2 | ) | $ | 6.7 |
December 31, 2015 | ||||||||||
Gain (Loss) in AOCI | Consolidated Statements of Operations Location | Recognized in Income (Expense) | ||||||||
(in millions) | ||||||||||
Effective Portion: | ||||||||||
Foreign exchange forward contracts | $ | 4.5 | Other expense (income), net | $ | 4.1 | |||||
Total for net investment hedging | $ | 4.5 | $ | 4.1 |
December 31, 2014 | ||||||||||
Gain (Loss) in AOCI | Consolidated Statements of Operations Location | Recognized in Income (Expense) | ||||||||
(in millions) | ||||||||||
Effective Portion: | ||||||||||
Cross currency basis swaps | $ | 19.3 | Interest income | $ | 1.9 | |||||
Foreign exchange forward contracts | 43.1 | Interest expense | (1.6 | ) | ||||||
Other expense (income), net | 1.3 | |||||||||
Total for net investment hedging | $ | 62.4 | $ | 1.6 |
Consolidated Statements of Operations Location | Income (Expense) Recognized | ||||||||||||||
Twelve Months Ended December 31, | |||||||||||||||
(in millions) | 2016 | 2015 | 2014 | ||||||||||||
Interest rate swaps | Interest expense | $ | — | $ | 0.3 | $ | 0.2 |
Aggregate Notional Amount | Aggregate Notional Amount Maturing within 12 Months | |||||||
(in millions) | ||||||||
Foreign exchange forward contracts | $ | 267.2 | $ | 267.2 | ||||
Interest rate swaps | 1.0 | 0.8 | ||||||
Total for instruments not designated as hedges | $ | 268.2 | $ | 268.0 |
Consolidated Statements of Operations Location | Gain (Loss) Recognized | |||||||||||||
Twelve Months Ended December 31, | ||||||||||||||
(in millions) | 2016 | 2015 | 2014 | |||||||||||
Foreign exchange forward contracts (a) | Other expense (income), net | $ | (0.6 | ) | $ | 6.3 | $ | 33.2 | ||||||
DIO equity option contracts | Other expense (income), net | — | 0.1 | — | ||||||||||
Cross currency basis swaps (a) | Other expense (income), net | — | (1.8 | ) | (50.2 | ) | ||||||||
Total for instruments not designated as hedges | $ | (0.6 | ) | $ | 4.6 | $ | (17.0 | ) |
December 31, 2016 | ||||||||||||||||
(in millions) | Prepaid Expenses and Other Current Assets, Net | Other Noncurrent Assets, Net | Accrued Liabilities | Other Noncurrent Liabilities | ||||||||||||
Designated as Hedges | ||||||||||||||||
Foreign exchange forward contracts | $ | 12.8 | $ | 0.6 | $ | 1.0 | $ | — | ||||||||
Interest rate swaps | — | — | 0.2 | 0.3 | ||||||||||||
Total | $ | 12.8 | $ | 0.6 | $ | 1.2 | $ | 0.3 | ||||||||
Not Designated as Hedges | ||||||||||||||||
Foreign exchange forward contracts | $ | 1.3 | $ | — | $ | 1.5 | $ | — | ||||||||
Total | $ | 1.3 | $ | — | $ | 1.5 | $ | — |
December 31, 2015 | ||||||||||||||||
(in millions) | Prepaid Expenses and Other Current Assets, Net | Other Noncurrent Assets, Net | Accrued Liabilities | Other Noncurrent Liabilities | ||||||||||||
Designated as Hedges | ||||||||||||||||
Foreign exchange forward contracts | $ | 23.0 | $ | 7.9 | $ | 6.9 | $ | 0.4 | ||||||||
Commodity contracts | — | — | 0.1 | — | ||||||||||||
Interest rate swaps | 0.1 | — | 1.0 | 0.2 | ||||||||||||
Total | $ | 23.1 | $ | 7.9 | $ | 8.0 | $ | 0.6 | ||||||||
Not Designated as Hedges | ||||||||||||||||
Foreign exchange forward contracts | $ | 5.0 | $ | — | $ | 3.0 | $ | — | ||||||||
Total | $ | 5.0 | $ | — | $ | 3.0 | $ | — |
Gross Amounts Not Offset in the Consolidated Balance Sheets | ||||||||||||||||||||||||
(in millions) | Gross Amounts Recognized | Gross Amount Offset in the Consolidated Balance Sheets | Net Amounts Presented in the Consolidated Balance Sheets | Financial Instruments | Cash Collateral Received/Pledged | Net Amount | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Foreign exchange forward contracts | $ | 14.7 | $ | — | $ | 14.7 | $ | (2.8 | ) | $ | — | $ | 11.9 | |||||||||||
Total Assets | $ | 14.7 | $ | — | $ | 14.7 | $ | (2.8 | ) | $ | — | $ | 11.9 |
Gross Amounts Not Offset in the Consolidated Balance Sheets | ||||||||||||||||||||||||
(in millions) | Gross Amounts Recognized | Gross Amount Offset in the Consolidated Balance Sheets | Net Amounts Presented in the Consolidated Balance Sheets | Financial Instruments | Cash Collateral Received/Pledged | Net Amount | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Foreign exchange forward contracts | $ | 2.5 | $ | — | $ | 2.5 | $ | (2.5 | ) | $ | — | $ | — | |||||||||||
Interest rate swaps | 0.5 | — | 0.5 | (0.3 | ) | — | 0.2 | |||||||||||||||||
Total Liabilities | $ | 3.0 | $ | — | $ | 3.0 | $ | (2.8 | ) | $ | — | $ | 0.2 |
Gross Amounts Not Offset in the Consolidated Balance Sheets | ||||||||||||||||||||||||
(in millions) | Gross Amounts Recognized | Gross Amount Offset in the Consolidated Balance Sheets | Net Amounts Presented in the Consolidated Balance Sheets | Financial Instruments | Cash Collateral Received/Pledged | Net Amount | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Foreign exchange forward contracts | $ | 35.9 | $ | — | $ | 35.9 | $ | (7.4 | ) | $ | — | $ | 28.5 | |||||||||||
Interest rate swaps | 0.1 | — | 0.1 | — | — | 0.1 | ||||||||||||||||||
Total Assets | $ | 36.0 | $ | — | $ | 36.0 | $ | (7.4 | ) | $ | — | $ | 28.6 |
Gross Amounts Not Offset in the Consolidated Balance Sheets | ||||||||||||||||||||||||
(in millions) | Gross Amounts Recognized | Gross Amount Offset in the Consolidated Balance Sheets | Net Amounts Presented in the Consolidated Balance Sheets | Financial Instruments | Cash Collateral Received/Pledged | Net Amount | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Foreign exchange forward contracts | $ | 10.3 | $ | — | $ | 10.3 | $ | (6.3 | ) | $ | — | $ | 4.0 | |||||||||||
Commodity contracts | 0.1 | — | 0.1 | — | — | 0.1 | ||||||||||||||||||
Interest rate swaps | 1.2 | — | 1.2 | (1.1 | ) | — | 0.1 | |||||||||||||||||
Total Liabilities | $ | 11.6 | $ | — | $ | 11.6 | $ | (7.4 | ) | $ | — | $ | 4.2 |
December 31, 2016 | |||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||||
Foreign exchange forward contracts | 14.7 | — | 14.7 | — | |||||||||||
Total assets | $ | 14.7 | $ | — | $ | 14.7 | $ | — | |||||||
Liabilities | |||||||||||||||
Interest rate swaps | $ | 0.5 | $ | — | $ | 0.5 | $ | — | |||||||
Foreign exchange forward contracts | 2.5 | — | 2.5 | — | |||||||||||
Contingent considerations on acquisitions | 7.6 | — | — | 7.6 | |||||||||||
Total liabilities | $ | 10.6 | $ | — | $ | 3.0 | $ | 7.6 |
December 31, 2015 | |||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | |||||||||||
Assets | |||||||||||||||
Interest rate swaps | $ | 0.1 | $ | — | $ | 0.1 | $ | — | |||||||
Foreign exchange forward contracts | 35.9 | — | 35.9 | — | |||||||||||
Total assets | $ | 36.0 | $ | — | $ | 36.0 | $ | — | |||||||
Liabilities | |||||||||||||||
Interest rate swaps | $ | 1.2 | $ | — | $ | 1.2 | $ | — | |||||||
Commodity forward purchase contracts | 0.1 | — | 0.1 | — | |||||||||||
Foreign exchange forward contracts | 10.3 | — | 10.3 | — | |||||||||||
Long-term debt | 45.1 | — | 45.1 | — | |||||||||||
Total liabilities | $ | 56.7 | $ | — | $ | 56.7 | $ | — |
(in millions) | ||||
Balance, February 29, 2016 | $ | 7.1 | ||
Unrealized gain: | ||||
Reported in Other expense (income), net | 0.7 | |||
Effect of exchange rate changes | (0.2 | ) | ||
Balance at December 31, 2016 | $ | 7.6 |
(in millions) | |||
2017 | $ | 37.0 | |
2018 | 25.4 | ||
2019 | 19.3 | ||
2020 | 15.7 | ||
2021 | 13.8 | ||
2022 and thereafter | 26.1 | ||
$ | 137.3 |
First Quarter (a) | Second Quarter | Third Quarter | Fourth Quarter | Rounding and Other(b) | Total Year | ||||||||||||||||||
2016 | |||||||||||||||||||||||
Net sales | $ | 772.6 | $ | 1,022.0 | $ | 954.2 | $ | 996.5 | $ | — | $ | 3,745.3 | |||||||||||
Gross profit | 418.9 | 526.9 | 513.6 | 541.5 | — | 2,000.9 | |||||||||||||||||
Operating income | 72.7 | 121.2 | 126.6 | 134.2 | — | 454.7 | |||||||||||||||||
Net income attributable to | |||||||||||||||||||||||
Dentsply Sirona | 125.0 | 105.4 | 92.5 | 107.0 | — | 429.9 | |||||||||||||||||
Earnings per common share - basic | $ | 0.72 | $ | 0.45 | $ | 0.40 | $ | 0.46 | $ | (0.06 | ) | $ | 1.97 | ||||||||||
Earnings per common share - diluted | $ | 0.70 | $ | 0.44 | $ | 0.39 | $ | 0.46 | $ | (0.05 | ) | $ | 1.94 | ||||||||||
Cash dividends declared per common share | $ | 0.0775 | $ | 0.0775 | $ | 0.0775 | $ | 0.0775 | $ | — | $ | 0.3100 | |||||||||||
2015 | |||||||||||||||||||||||
Net sales | $ | 656.3 | $ | 698.0 | $ | 648.9 | $ | 671.1 | $ | — | $ | 2,674.3 | |||||||||||
Gross profit | 373.4 | 399.7 | 369.4 | 374.7 | — | 1,517.2 | |||||||||||||||||
Operating income | 97.7 | 85.8 | 98.6 | 93.1 | — | 375.2 | |||||||||||||||||
Net income attributable to | |||||||||||||||||||||||
Dentsply Sirona | 64.0 | 44.1 | 84.5 | 58.6 | — | 251.2 | |||||||||||||||||
Earnings per common share - basic | $ | 0.46 | $ | 0.32 | $ | 0.60 | $ | 0.42 | $ | (0.01 | ) | $ | 1.79 | ||||||||||
Earnings per common share - diluted | $ | 0.45 | $ | 0.31 | $ | 0.59 | $ | 0.41 | $ | — | $ | 1.76 | |||||||||||
Cash dividends declared per common share | $ | 0.0725 | $ | 0.0725 | $ | 0.0725 | $ | 0.0725 | $ | — | $ | 0.2900 |
DENTSPLY SIRONA INC. | ||
By: | /s/ | Jeffrey T. Slovin |
Jeffrey T. Slovin | ||
Chief Executive Officer |
/s/ | Jeffrey T. Slovin | March 1, 2017 | |
Jeffrey T. Slovin | Date | ||
Chief Executive Officer and Director | |||
(Principal Executive Officer) | |||
/s/ | Ulrich Michel | March 1, 2017 | |
Ulrich Michel | Date | ||
Executive Vice President and | |||
Chief Financial Officer | |||
(Principal Financial and Accounting Officer) | |||
/s/ | Bret W. Wise | March 1, 2017 | |
Bret W. Wise | Date | ||
Chairman of the Board of Directors | |||
/s/ | Dr. Michael C. Alfano | March 1, 2017 | |
Dr. Michael C. Alfano | Date | ||
Director | |||
/s/ | David K. Beecken | March 1, 2017 | |
David K. Beecken | Date | ||
Director | |||
/s/ | Eric K. Brandt | March 1, 2017 | |
Eric K. Brandt | Date | ||
Director | |||
/s/ | Michael J. Coleman | March 1, 2017 | |
Michael J. Coleman | Date | ||
Director | |||
/s/ | Willie A. Deese | March 1, 2017 | |
Willie A. Deese | Date | ||
Director | |||
/s/ | Harry M. Jansen Kraemer, Jr. | March 1, 2017 | |
Harry M. Jansen Kraemer, Jr. | Date | ||
Director | |||
/s/ | Thomas Jetter | March 1, 2017 | |
Thomas Jetter | Date | ||
Director | |||
/s/ | Arthur D. Kowaloff | March 1, 2017 | |
Arthur D. Kowaloff | Date | ||
Director | |||
/s/ | Francis J. Lunger | March 1, 2017 | |
Francis J. Lunger | Date | ||
Director | |||
1. | The name of the corporation is DENTSPLY SIRONA Inc. |
2. | The address of its registered office in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808. The name of the registered agent at such address is The Corporation Service Company. |
3. | The nature and business or purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the state of Delaware. |
4A. | Number of Shares and Classes. The aggregate number of shares of stock which the Corporation shall have authority to issue is Four Hundred Million Two Hundred Fifty Thousand (400,250,000) shares, which shall be divided into two classes as follows: |
(1) | Four Hundred Million (400,000,000) shares of Common Stock, par value One Cent ($.01) per share; and |
(2) | Two Hundred Fifty Thousand (250,000) shares of Preferred Stock, par value One Dollar ($1.00) per share. |
4B. | Preferred Stock. The Corporation’s board of directors is hereby expressly authorized to provide by resolution or resolutions from time to time for the issue of the Preferred Stock in one or more series, the shares of each of which series may have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualification, limitations or restrictions thereof, as shall be permitted under the General Corporation Law of the State of Delaware and as shall be stated in the resolution or resolutions providing for the issue of such stock adopted by the board of directors pursuant to the authority expressly vested in the board of directors hereby. |
4C. | Common Stock. |
(1) | Voting. Except as otherwise required by the General Corporation Law of the State of Delaware, this Second Amended and Restated Certificate of Incorporation or any series of Preferred Stock designated by the board of directors, all of the voting power of the Corporation shall be vested in the holders of the Common Stock and each holder of the Common Stock shall have one (1) vote for each share of such Common Stock held by him of record on all matters voted upon by the Stockholders. |
(2) | Dividends. Subject to the terms of any series of Preferred Stock, the board of directors of the Corporation may declare a dividend on the Common Stock out of the remaining unreserved and unrestricted surplus of the Corporation, and the holders of the Common Stock shall share ratably in such dividend in proportion to the number of shares of such Common Stock held by each. |
(3) | Liquidation. Except as otherwise required by any series of Preferred Stock designated by the board of directors, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after distribution in full of the preferential amounts to be distributed to the holders of any series of Preferred Stock, the remaining assets of the Corporation shall be distributed ratably among the holders of the Common Stock in proportion to the number of shares of such Common Stock held by each. |
5. | The business and affairs of the Corporation shall be managed by or under the direction of a board of directors consisting of such number of directors as is determined from time to time by resolution adopted by affirmative vote of a majority of the entire board of directors or such higher vote as may be required by the Corporation’s by-laws; provided, however, that in no event shall the number of directors be less than three (3) nor more than thirteen (13). Any additional director elected to fill a vacancy resulting from an increase in the number of directors shall hold office until the next annual meeting of stockholders, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, incapacitation or removal from office. Except as otherwise required by law, any newly created directorship shall be filled only by the affirmative vote of a majority of the board of directors then in office or such higher vote as may be required by the Corporation’s by-laws, provided that a quorum is present, and any vacancy occurring in the board of directors shall be filled by a majority of the directors then in office or such higher vote as may be required by the Corporation’s by-laws, even if less than a quorum, or by a sole remaining director. |
6. | The Corporation is to have perpetual existence. |
7. | Notwithstanding any other provision of this Second Amended and Restated Certificate of Incorporation or the Corporation’s by-laws (and notwithstanding the fact that some lesser percentage may be specified by law, this Second Amended and Restated Certificate of Incorporation or the Corporation’s by-laws), the Corporation’s by-laws may be amended, altered or repealed, and new by-laws enacted, only by the affirmative vote of not less than two-thirds (2/3) in voting power of the outstanding shares of capital stock of the Corporation entitled to vote at a meeting of stockholders duly called for such purpose, or by a vote of not less than a majority of the entire board of directors then in office; provided that, during the period beginning at the Effective Time (as defined in the Agreement and Plan of Merger, dated as of September 15, 2015, among the Corporation, Sirona Dental Systems, Inc., and Dawkins Merger Sub Inc.) and ending on the third (3 rd ) anniversary of the Effective Time, the provisions of Article VII of the Corporation’s by-laws may be modified, amended or repealed by the board of directors, and any by-law provision or other resolution inconsistent with Article VII of the Corporation’s by-laws may be adopted by the board of directors, only by an affirmative vote of the greater of (i) at least seventy percent (70%) of the entire board of directors and (ii) eight (8) directors. |
8. | Elections of directors need not be by written ballot unless the by-laws of the Corporation shall so provide. |
9. | A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived any improper personal benefit. If the General Corporation Law of the State of Delaware is hereafter amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended. No repeal or modification of this Section 9 shall adversely affect any right of or protection afforded to a director prior to such repeal or modification. |
10. | The stockholders of the Corporation shall have no authority to call a special meeting of the stockholders. |
11. | No action required to be taken or which may be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, and the power of the stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied. |
DENTSPLY International Inc. | ||
By: | /s/ Christopher T. Clark | |
Name: Christopher T. Clark | ||
Title: President and Chief Operating Officer, Technologies |
ARTICLE I STOCKHOLDERS’ MEETINGS.................................................................................. | 1 |
Section 1. | Annual Meetings...........................................................................................1 |
Section 2. | Special Meetings........................................................................................... 1 |
Section 3. | Place of Meeting........................................................................................... 1 |
Section 4. | Notice of Meeting......................................................................................... 1 |
Section 5. | Fixing of Record Date.................................................................................. 2 |
Section 6. | Quorum; Adjournments.............................................................................. 2 |
Section 7. | Proxies........................................................................................................... 3 |
Section 8. | Voting of Shares........................................................................................... 3 |
Section 9. | List of Stockholders..................................................................................... 3 |
Section 10. | Waiver of Notice by Stockholders.............................................................. 4 |
Section 11. | Advance Notice of Stockholder-Proposed Business at Annual Meetings........................................................................................................ 4 |
Section 12. | Procedure for Nomination of Directors..................................................... 6 |
Section 12a. | Stockholder Nominations Included in the Corporation’s Proxy Statement...................................................................................................... 7 |
Section 13. | Stockholder Voting.....................................................................................16 |
Section 14. | Conduct of Meetings..................................................................................17 |
Section 1. | General Powers................................................................................ 17 |
Section 2. | Number of Directors, Tenure and Qualifications.......................... 18 |
Section 3. | Regular Meetings............................................................................. 18 |
Section 4. | Special Meetings............................................................................... 18 |
Section 5. | Notice.................................................................................................18 |
Section 6. | Quorum............................................................................................. 19 |
Section 7. | Manner of Acting............................................................................. 19 |
Section 8. | Vacancies........................................................................................... 19 |
Section 9. | Compensation................................................................................... 19 |
Section 10. | Committees....................................................................................... 19 |
Section 11. | Action of the Board by Written Consent....................................... 20 |
Section 12. | Conferences...................................................................................... 20 |
ARTICLE III OFFICERS...................................................................................................... | 20 |
Section 1. | Number.............................................................................................. 20 |
Section 2. | Election and Term of Office............................................................ 20 |
Section 3. | Removal............................................................................................ 20 |
Section 4. | Executive Chairman of the Board.................................................. 21 |
Section 5. | Lead Independent Directors........................................................... 21 |
Section 6. | Chief Executive Officer; President................................................. 21 |
Section 7. | Senior Vice President and Vice Presidents.................................... 21 |
Section 8. | Secretary and Assistant Secretaries................................................ 21 |
Section 9. | Treasurer and Assistant Treasurer................................................. 22 |
Section 10. | Salaries.............................................................................................. 22 |
Section 11. | Representation in Other Companies.............................................. 22 |
ARTICLE IV STOCK AND TRANSFER OF STOCK......................................................... | 22 |
Section 1. | Shares of Stock................................................................................. 22 |
Section 2. | Transfer of Shares............................................................................ 23 |
ARTICLE V INDEMNIFICATION OF DIRECTORS, OFFICERS,.................................... | 23 |
Section 1. | Indemnification Generally.............................................................. 24 |
Section 2. | Indemnification in Actions By or In the Right Of the Corporation...................................................................................... 24 |
Section 3. | Success on the Merits; Indemnification Against Expenses.......... 24 |
Section 4. | Determination that Indemnification is Proper.............................. 25 |
Section 5. | Insurance; Indemnification Agreements........................................ 25 |
Section 6. | Advancement of Expenses............................................................... 25 |
Section 7. | Rights Not Exclusive........................................................................ 26 |
Section 8. | Severability....................................................................................... 26 |
Section 9. | Modification...................................................................................... 26 |
ARTICLE VI EXCLUSIVE FORUM................................................................................... | 26 |
ARTICLE VII CERTAIN GOVERNANCE MATTERS....................................................... | 27 |
Section 1. | Definitions......................................................................................... 27 |
Section 2. | Composition of the Board............................................................... 27 |
Section 3. | Chairman, Chief Executive Officer, Lead Independent Director.............................................................................................. 28 |
Section 4. | Required Committees...................................................................... 28 |
Section 5. | Amendments..................................................................................... 28 |
ARTICLE I |
ARTICLE IV |
ARTICLE VII |
ARTICLE X |
ARTICLE XIII |
ARTICLE XVI |
EXECUTION COPY |
Page | |||
1. | Authorization of Notes | 1 | |
1.1. | U.S. Notes | 1 | |
1.2. | German Notes | 2 | |
2. | Sale and Purchase of Notes; GUARANTY | 2 | |
3. | Closing | 3 | |
4. | Conditions to Closing | 3 | |
4.1. | Representations and Warranties | 3 | |
4.2. | Performance; No Default | 4 | |
4.3. | Compliance Certificates | 4 | |
4.4. | Opinions of Counsel | 4 | |
4.5. | Purchase Permitted By Applicable Law, Etc | 4 | |
4.6. | Sale of Other Notes | 5 | |
4.7. | Payment of Special Counsel Fees | 5 | |
4.8. | Private Placement Number | 5 | |
4.9. | Changes in Corporate Structure | 5 | |
4.10. | Funding Instructions | 5 | |
4.11. | Proceedings and Documents | 6 | |
5. | Representations and Warranties of the ISSUERS | 6 | |
5.1. | Organization; Power and Authority | 6 | |
5.2. | Authorization, Etc | 6 | |
5.3. | Disclosure | 6 | |
5.4. | Organization and Ownership of Shares of Subsidiaries; Affiliates | 7 | |
5.5. | Financial Statements | 8 | |
5.6. | Compliance with Laws, Other Instruments, Etc | 8 | |
5.7. | Governmental Authorizations, Etc | 8 | |
5.8. | Litigation; Observance of Agreements, Statutes and Orders | 8 | |
5.9. | Taxes | 9 | |
5.10. | Title to Property; Leases | 9 | |
5.11. | Licenses, Permits, Etc | 10 | |
5.12. | Compliance with ERISA | 10 | |
5.13. | Private Offering by the Issuers | 11 | |
5.14. | Use of Proceeds; Margin Regulations | 12 | |
5.15. | Existing Debt; Future Liens | 12 | |
5.16. | Foreign Assets Control Regulations, Etc | 13 | |
5.17. | Status under Certain Statutes | 14 | |
5.18. | Environmental Matters | 14 | |
5.19. | Notes Rank Pari Passu | 15 | |
6. | Representations of the Purchaser | 15 | |
6.1. | Purchase for Investment | 15 |
Page | |||
6.2. | Accredited Investor | 16 | |
6.3. | Source of Funds | 16 | |
7. | Information as to COMPANY | 17 | |
7.1. | Financial and Business Information | 17 | |
7.2. | Officer’s Certificate | 20 | |
7.3. | Visitation | 21 | |
7.4. | Electronic Delivery | 21 | |
8. | Payment of the Notes | 22 | |
8.1. | Required Prepayments | 22 | |
8.2. | Optional Prepayments with Make-Whole Amount | 22 | |
8.3. | Prepayment of Notes Upon Change of Control | 23 | |
8.4. | Prepayment of Notes Upon Sale of Assets | 24 | |
8.5. | Allocation of Partial Prepayments | 24 | |
8.6. | Maturity; Surrender, Etc | 25 | |
8.7. | Purchase of Notes | 25 | |
8.8. | Prepayment in Connection with a Noteholder Sanctions Event | 25 | |
8.9. | Prepayment for Tax Reasons | 27 | |
8.10. | Make-Whole Amount and Modified Make-Whole Amount | 29 | |
8.11. | Swap Breakage | 34 | |
9. | Affirmative Covenants | 36 | |
9.1. | Compliance with Law | 36 | |
9.2. | Insurance | 36 | |
9.3. | Maintenance of Properties | 36 | |
9.4. | Payment of Taxes and Claims | 36 | |
9.5. | Corporate Existence, Etc | 37 | |
9.6. | [Reserved.] | 37 | |
9.7. | Notes to Rank Pari Passu | 37 | |
9.8. | Subsidiary Guarantors | 37 | |
9.9. | Books and Records | 38 | |
10. | Negative Covenants | 38 | |
10.1. | Financial Covenants | 39 | |
10.2. | [Reserved.] | 39 | |
10.3. | Limitation on Liens | 39 | |
10.4. | Sales of Assets | 40 | |
10.5. | Merger and Consolidation | 41 | |
10.6. | Transactions with Affiliates | 43 | |
10.7. | Terrorism Sanctions Regulations | 44 | |
10.8. | Line of Business | 44 | |
10.9. | Subsidiary Debt | 44 |
Page | |||
11. | Events of Default | 45 | |
12. | Remedies on Default, Etc | 48 | |
12.1. | Acceleration | 48 | |
12.2. | Other Remedies | 48 | |
12.3. | Rescission | 49 | |
12.4. | No Waivers or Election of Remedies, Expenses, Etc | 49 | |
13. | tax indemnification; fatca information | 49 | |
14. | Registration; Exchange; Substitution of Notes | 53 | |
14.1. | Registration of Notes | 53 | |
14.2. | Transfer and Exchange of Notes | 54 | |
14.3. | Replacement of Notes | 54 | |
15. | Payments on Notes | 55 | |
15.1. | Place of Payment | 55 | |
15.2. | Home Office Payment | 55 | |
16. | Expenses, Etc | 56 | |
16.1. | Transaction Expenses | 56 | |
16.2. | Survival | 56 | |
17. | Survival of Representations and Warranties; Entire Agreement | 56 | |
18. | Amendment and Waiver | 57 | |
18.1. | Requirements | 57 | |
18.2. | Solicitation of Holders of Notes | 57 | |
18.3. | Binding Effect, Etc | 58 | |
18.4. | Notes Held by Issuers, Etc | 58 | |
19. | Notices; english language | 58 | |
20. | Reproduction of Documents | 59 | |
21. | Confidential Information | 60 | |
22. | Substitution of Purchaser | 61 | |
23. | PARENT GUARANTY | 61 | |
23.1. | Unconditional Guaranty | 61 | |
23.2. | Obligations Absolute and Unconditional | 62 | |
23.3. | Certain Waivers | 63 | |
23.4. | Obligations Unimpaired | 63 | |
23.5. | Subrogation and Subordination | 64 | |
23.6. | Term; Reinstatement of Unconditional Guaranty | 65 |
Page | |||
24. | Miscellaneous | 65 | |
24.1. | Successors and Assigns | 65 | |
24.2. | Payments Due on Non-Business Days | 65 | |
24.3. | Accounting Terms; GAAP; Pro Forma Calculations | 66 | |
24.4. | Severability | 67 | |
24.5. | Construction | 67 | |
24.6. | Counterparts | 67 | |
24.7. | Governing Law | 67 | |
24.8. | Jurisdiction and Process; Waiver of Jury Trial | 67 | |
24.9. | Obligation to Make Payment in Euros | 68 | |
24.10. | Change of Currency | 69 |
iv |
Schedule A | - | Information Relating to Purchasers |
Schedule B | - | Defined Terms |
Schedule 5.3 | - | Disclosure Materials |
Schedule 5.4 | - | Subsidiaries of the Company, Ownership of Subsidiary Stock, Affiliates |
Schedule 5.5 | - | Financial Statements |
Schedule 5.15 | - | Existing Debt; Consignment Agreements; Unfunded Pension Obligations |
Schedule 5.16 | - | Anti-Money Laundering/Anti-Terrorism Disclosure |
Schedule 8.10 | - | Swapped Notes |
Schedule 10.3 | - | Existing Liens |
Schedule 10.9 | - | Existing Subsidiary Debt |
Exhibit 1A | - | Form of 0.98% Series N Senior Note |
Exhibit 1B | - | Form of 1.31% Series O Senior Note |
Exhibit 1C | - | Form of 1.31% Series P Senior Note |
Exhibit 1D | - | Form of 1.50% Series Q Senior Note |
Exhibit 1E | - | Form of 1.50% Series R Senior Note |
Exhibit 1F | - | Form of 1.58% Series S Senior Note |
Exhibit 1G | - | Form of 1.58% Series T Senior Note |
Exhibit 1H | - | Form of 1.65% Series U Senior Note |
Exhibit 1I | - | Form of 1.65% Series V Senior Note |
Exhibit 1J | - | Form of 0.98% Series A Senior Note |
Exhibit 1K | - | Form of 1.31% Series B Senior Note |
v |
Exhibit 1L | - | Form of 1.31% Series C Senior Note |
Exhibit 1M | - | Form of 1.50% Series D Senior Note |
Exhibit 1N | - | Form of 1.50% Series E Senior Note |
Exhibit 1O | - | Form of 1.58% Series F Senior Note |
Exhibit 1P | - | Form of 1.58% Series G Senior Note |
Exhibit 1Q | - | Form of 1.65% Series H Senior Note |
Exhibit 1R | - | Form of 1.65% Series I Senior Note |
Exhibit 4.4(a)(i) | - | Form of Opinion of General Counsel to the Company and the German Issuer |
Exhibit 4.4(a)(ii) | - | Form of Opinion of Special German Counsel to the German Issuer |
Exhibit 4.4(b) | - | Form of Opinion of Special Counsel to the Purchasers |
vi |
Issue | Series | Aggregate Principal Amount | Interest Rate | Maturity Date | ||||||
Senior Notes | Series N | € | 17,500,000 | 0.98% | October 27, 2024 | |||||
Senior Notes | Series O | € | 14,500,000 | 1.31% | October 27, 2027 | |||||
Senior Notes | Series P | € | 3,000,000 | 1.31% | October 27, 2027 | |||||
Senior Notes | Series Q | € | 15,500,000 | 1.50% | October 27, 2029 | |||||
Senior Notes | Series R | € | 2,000,000 | 1.50% | October 27, 2029 | |||||
Senior Notes | Series S | € | 6,500,000 | 1.58% | October 27, 2030 | |||||
Senior Notes | Series T | € | 11,000,000 | 1.58% | October 27, 2030 | |||||
Senior Notes | Series U | € | 10,500,000 | 1.65% | October 27, 2031 | |||||
Senior Notes | Series V | € | 7,000,000 | 1.65% | October 27, 2031 |
Issue | Series | Aggregate Principal Amount | Interest Rate | Maturity Date | ||||||
Senior Notes | Series A | € | 52,500,000 | 0.98% | October 27, 2024 | |||||
Senior Notes | Series B | € | 43,500,000 | 1.31% | October 27, 2027 | |||||
Senior Notes | Series C | € | 9,000,000 | 1.31% | October 27, 2027 | |||||
Senior Notes | Series D | € | 46,500,000 | 1.50% | October 27, 2029 | |||||
Senior Notes | Series E | € | 6,000,000 | 1.50% | October 27, 2029 | |||||
Senior Notes | Series F | € | 19,500,000 | 1.58% | October 27, 2030 | |||||
Senior Notes | Series G | € | 33,000,000 | 1.58% | October 27, 2030 | |||||
Senior Notes | Series H | € | 31,500,000 | 1.65% | October 27, 2031 | |||||
Senior Notes | Series I | € | 21,000,000 | 1.65% | October 27, 2031 |
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Very truly yours, | ||
DENTSPLY SIRONA INC. | ||
By: | /s/ William E. Reardon | |
Name: | William E. Reardon | |
Title: | Vice President & Treasurer | |
By: | /s/ Andrew M. Smith | |
Name: | Andrew M. Smith | |
Title: | Assistant Treasurer | |
SIRONA DENTAL SERVICES GMBH | ||
By: | /s/ Rainer Berthan | |
Name: | Rainer Berthan | |
Title: | Managing Director | |
By: | /s/ Michael Geil | |
Name: | Michael Geil | |
Title: | Managing Director |
By: | Metropolitan Life Insurance Company, its Investment Manager |
By: | /s/ John A. Wills | |
Name: | John A. Wills | |
Title: | Senior Vice President and Managing Director |
NEW YORK LIFE INSURANCE COMPANY | |||
By: | /s/ A. Post Howland | ||
Name: | A. Post Howland | ||
Title: | Vice President | ||
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION | |||
By: | NYL Investors LLC, its Investment Manager | ||
By: | /s/ A. Post Howland | ||
Name: | A. Post Howland | ||
Title: | Managing Director |
NATIONWIDE LIFE INSURANCE COMPANY | ||
By: | /s/ Stephen M. Jordan | |
Name: | Stephen M. Jordan | |
Title: | Authorized Signatory |
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY | |||
By: | Northwestern Mutual Investment Management Company, LLC, its investment adviser | ||
By: | /s/ Mark E. Kishier | ||
Name: | Mark E. Kishier | ||
Title: | Managing Director |
By: | Barings LLC, as Investment Adviser | ||
By: | /s/ Andrew T. Kleeman | ||
Name: | Andrew T. Kleeman | ||
Title: | Managing Director |
By: | Allianz Investment Management LLC | ||
as the authorized signatory and investment manager | |||
By: | /s/ Charles J. Dudley | ||
Name: | CHARLES J. DUDLEY | ||
Title: | MANAGING DIRECTOR |
By: | Hartford Investment Management Company | ||
Their Agent and Attorney-in-Fact | |||
By: | /s/ John Knox | ||
Name: | JOHN KNOX | ||
Title: | SENIOR VICE PRESIDENT |
By: | Delaware Investment Advisers, | ||
a series of Delaware Management Business Trust, | |||
Attorney in Fact | |||
By: | /s/ Philip Lee | ||
Name: | Philip Lee | ||
Title: | Vice President |
By: | /s/ Thomas M. Donohue | |
Name: | Thomas M. Donohue | |
Title: | Managing Director |
By: | /s/ Eve Hampton | |
Name: | Eve Hampton | |
Title: | Vice President, Investments | |
By: | /s/ Tad Anderson | |
Name: | Tad Anderson | |
Title: | Assistant Vice President, Investments |
By: | /s/ Tannis Fussell | |
Name: | TANNIS FUSSELL | |
Title: | Vice President |
By: | PGIM, Inc., as investment manager |
By: | /s/ Tannis Fussell | ||
Name: | TANNIS FUSSELL | ||
Title: | Vice President |
By: | /s/ Tannis Fussell | ||
Name: | TANNIS FUSSELL | ||
Title: | Assistant Vice President |
No. RN-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1A-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1A-2 |
No. RO-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1B-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1B-2 |
No. RP-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1C-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1C-2 |
No. RQ-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1D-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1D-2 |
No. RR-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1E-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1E-2 |
No. RS-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1F-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1F-2 |
No. RT-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1G-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1G-2 |
No. RU-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1H-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1H-2 |
No. RV-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1I-1 |
DENTSPLY SIRONA INC. | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Exhibit 1I-2 |
0.98% SERIES A SENIOR NOTE DUE OCTOBER 27, 2024 | |
No. RA-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1J-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1J-2 |
1.31% SERIES B SENIOR NOTE DUE OCTOBER 27, 2027 | |
No. RB-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1K-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1K-2 |
No. RC-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1L-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1L-2 |
No. RD-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1M-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1M-2 |
No. RE-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1N-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1N-2 |
No. RF-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1O-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1O-2 |
No. RG-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1P-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1P-2 |
No. RH-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1Q-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1Q-2 |
No. RI-[_______] | [Date] |
€[__________] | PPN [________] |
Exhibit 1R-1 |
SIRONA DENTAL SERVICES GMBH | ||
By: | ||
Name: | ||
Title: |
Exhibit 1R-2 |
A. | It is the desire of the Company to assure itself of the services of Executive effective as of February 29, 2016 (the “Effective Date”) and thereafter by entering into this Agreement. |
B. | Executive and the Company mutually desire that Executive provide services to the Company on the terms herein provided. |
1. | Employment. |
2. | Compensation and Related Matters. |
3. | Termination. |
4. | Severance Payments. |
5. | Covenants. Executive acknowledges that Executive has been provided with Confidential Information (as defined below) and, during the Term, the Company from time to time will provide Executive with access to Confidential Information. Ancillary to the rights provided to Executive as set forth in this Agreement and the Company’s provision of Confidential Information, and Executive’s agreements regarding the use of same, in order to protect the value of any Confidential Information, the Company and Executive agree to the following provisions, for which Executive agrees he received adequate consideration and which Executive acknowledges are reasonable and necessary to protect the legitimate interests of the Company and represent a fair balance of the Company’s rights to protect its business and Executive’s right to pursue employment: |
6. | Nondisclosure of Proprietary Information. |
7. | Inventions. |
8. | Injunctive Relief. |
9. | Maximum Payment Limit. If any payment or benefit due under this Agreement, together with all other payments and benefits that Executive receives or is entitled to receive from the Company or any of its subsidiaries, Affiliates or related entities, would (if paid or provided) constitute an excess parachute payment for purposes of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the amounts otherwise payable and benefits otherwise due under this Agreement will either (i) be delivered in full, or (ii) be limited to the minimum extent necessary to ensure that no portion thereof will fail to be tax-deductible to the Company by reason of Section 280G of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state or local income and employment taxes and the excise tax imposed under Section 4999 of the Code, results in the receipt by the Executive, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such benefits may be subject to the excise tax imposed under Section 4999 of the Code. In the event that the payments and/or benefits are to be reduced pursuant to this Section 9, such payments and benefits shall be reduced such that the reduction of cash compensation to be provided to the Executive as a result of this Section 9 is minimized. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Section 409A of the Code and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero. All determinations required to be made under this Section 9 shall be made by the Company’s independent public accounting firm, or by another advisor mutually agreed to by the parties, which shall provide detailed supporting calculations both to the Company and Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a payment or benefit subject to this Section 9, or such earlier time as is requested by the Company. |
10. | Clawback Provisions. |
11. | Assignment and Successors. |
12. | Certain Definitions. |
13. | Miscellaneous Provisions. |
(i) | If to the Company, to the attention of the General Counsel at its headquarters, |
14. | Executive Acknowledgement. |
A. | It is the desire of the Company to assure itself of the services of Executive effective as of the Effective Date and thereafter by entering into this Agreement. |
B. | Executive and the Company mutually desire that Executive provide services to the Company on the terms herein provided. |
1. | Employment. |
2. | Compensation and Related Matters. |
3. | Termination. |
4. | Severance Payments. |
5. | Covenants. |
6. | Nondisclosure of Proprietary Information. |
7. | Inventions. |
8. | Injunctive Relief. |
9. | Maximum Payment Limit. |
10. | Clawback Provisions. |
11. | Assignment and Successors. |
12. | Certain Definitions. |
13. | Miscellaneous Provisions. |
(i) | If to the Company, to the attention of the General Counsel at its headquarters, |
14. | Executive Acknowledgement. |
A. | It is the desire of the Company to assure itself of the services of Executive effective as of the Effective Date and thereafter by entering into this Agreement. |
B. | Executive and the Company mutually desire that Executive provide services to the Company on the terms herein provided. |
DENTSPLY INTERNATIONAL INC. | ||
By: | /s/ Bret W. Wise | |
Name: Bret W. Wise | ||
Title: Chairman and Chief Executive Officer | ||
SIRONA DENTAL SYSTEMS, INC. | ||
By: | /s/ Jonathan Friedman | |
Name: Jonathan Friedman | ||
Title: General Counsel | ||
EXECUTIVE | ||
By: | /s/ Jeffrey T. Slovin | |
Jeffrey T. Slovin |
1. | Purpose. |
2. | Definitions. |
3. | Administration. |
4. | Shares Available for the Plan; Limit on Awards. |
5. | Participation. |
6. | Incentive and Non-qualified Options and SARs. |
7. | Stock Appreciation Rights. |
8. | Restricted Stock. |
9. | Deferred Shares. |
10. | Dividend Equivalents. |
11. | Other Stock-Based Awards. |
12. | Performance Awards. |
13. | Change in Control. |
14. | Withholding Taxes. |
15. | Written Agreement; Vesting. |
16. | Transferability. |
17. | Listing, Registration and Qualification. |
18. | Transfers Between Company and Subsidiaries. |
19. | Adjustments. |
20. | Amendment and Termination of the Plan. |
21. | Amendment or Substitution of Awards under the Plan. |
22. | Other Tax Matters. |
23. | Commencement Date; Termination Date. |
24. | Severability. |
25. | Governing Law. |
DENTSPLY SIRONA Inc. | ||||||||||||||||||||
Computation of Ratios of Earnings to Fixed Charges | ||||||||||||||||||||
Exhibit 12.1 | ||||||||||||||||||||
(in millions except ratios) | Year Ended December 31, | |||||||||||||||||||
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Consolidated Earnings: | ||||||||||||||||||||
Pre-tax income from continuing operations | $ | 440.9 | $ | 329.7 | $ | 404.4 | $ | 369.3 | $ | 330.7 | ||||||||||
before adjustment for income or loss from | ||||||||||||||||||||
equity interests | ||||||||||||||||||||
Add fixed charges computed below | 58.3 | 83.8 | 69.7 | 72.7 | 82.2 | |||||||||||||||
Net adjustments for capitalized interest | 0.1 | 0.1 | 0.1 | 0.1 | — | |||||||||||||||
Consolidated Earnings Available for Fixed Charges | $ | 499.3 | $ | 413.6 | $ | 474.2 | $ | 442.1 | $ | 412.9 | ||||||||||
Consolidated Fixed Charges: | ||||||||||||||||||||
Interest expense per financial statements (a) | $ | 35.9 | $ | 55.9 | $ | 46.9 | $ | 49.6 | $ | 56.9 | ||||||||||
Interest expense - capitalized | 0.3 | 0.6 | 0.2 | 0.2 | 0.1 | |||||||||||||||
Amortization of deferred financing | 4.5 | 11.3 | 4.6 | 5.0 | 7.0 | |||||||||||||||
One-third of rental expense representing reasonable approximation of the interest factor | 17.6 | 16.0 | 18.0 | 17.9 | 18.2 | |||||||||||||||
Consolidated Fixed Charges | $ | 58.3 | $ | 83.8 | $ | 69.7 | $ | 72.7 | $ | 82.2 | ||||||||||
Consolidated Ratio of Earnings to Fixed Charges | 8.56 | 4.94 | 6.80 | 6.08 | 5.02 | |||||||||||||||
(a) Does not include interest related to uncertain tax positions. |
1. | Advanced Technology Research SRL (Italy) |
2. | Arges Imaging, Inc. (Delaware) |
3. | CCRI, Inc. (Delaware) |
4. | Ceramco Manufacturing B.V. (Netherlands) |
5. | D Luxembourg Sarl (Luxembourg) |
6. | DeguDent GmbH (Germany) |
7. | Dencril Comércio de Plásticos, Importação e Exportação Ltda. (Brazil) |
8. | Dental Implant Training Center Corp. (New Jersey) |
9. | Dentbras Indústria, Comércio, Importação e Exportação de Produtos Odontológicos Ltda. (Brazil) |
10. | Dentsply (Australia) Pty. Ltd. (Australia) |
11. | Dentsply (N.Z.) Limited (New Zealand) |
12. | Dentsply (Philippines) Inc. (Philippines) |
13. | Dentsply (Singapore) Pte. Ltd. (Singapore) |
14. | Dentsply (Thailand) Ltd. (Thailand) |
15. | Dentsply (Tianjin) International Trading Co. Ltd. (China) |
16. | Dentsply Acquisition S.a.r.l. (Luxembourg) |
17. | Dentsply Acquisition US LLC (Delaware) |
18. | Dentsply Argentina S.A.C.e.I. (Argentina) |
19. | Dentsply Asset Management GmbH & Co. KG (Germany) |
20. | Dentsply AT Sarl (Luxembourg) |
21. | Dentsply Benelux B.V. (Netherlands) |
22. | Dentsply Benelux Sarl (Luxembourg) |
23. | Dentsply BI Ltd. (Ireland) |
24. | Dentsply BX Sarl (Luxembourg) |
25. | Dentsply Canada Ltd. (Canada) |
26. | Dentsply CE S.a.r.l. (Luxembourg) |
27. | Dentsply CH Sarl (Luxembourg) |
28. | Dentsply Dental (Tianjin) Co. Ltd. (China) |
29. | Dentsply Dental GmbH (Germany) |
30. | Dentsply Dental S.a.r.l. (Luxembourg) |
31. | Dentsply DeTrey GmbH (Germany) |
32. | Dentsply DeTrey Sarl (Switzerland) |
33. | Dentsply Deutschland GmbH (Germany) |
34. | Dentsply Europe S.a.r.l. (Luxembourg) |
35. | DENTSPLY Finance Co. (Delaware) |
36. | Dentsply GAC Europe SAS (France) |
37. | Dentsply Germany GmbH (Germany) |
38. | Dentsply Germany Holdings GmbH (Germany) |
39. | Dentsply Germany Investments GmbH (Germany) |
40. | Dentsply Holdings S.a.r.l. (Luxembourg) |
41. | Dentsply Holdings Unlimited (U.K.) |
42. | Dentsply Iberia S.A. (Spain) |
43. | Dentsply IE Ltd. (Ireland) |
44. | Dentsply IH A/S (Denmark) |
45. | Dentsply IH AB (Sweden) |
46. | Dentsply IH AS (Norway) |
47. | Dentsply IH GmbH (Austria) |
48. | Dentsply IH GmbH (Germany) |
49. | Dentsply IH Holdings GmbH (Germany) |
50. | Dentsply IH Inc. (Delaware) |
51. | Dentsply IH LLC(Russia) |
52. | Dentsply IH Ltd (UK) |
53. | Dentsply IH Oy (Finland) |
54. | Dentsply IH Pty. Ltd. (Australia) |
55. | Dentsply IH S.A. (Switzerland) |
56. | Dentsply IH SP.z.o.o (Poland) |
57. | DENTSPLY Implants (China) Co. Limited (Hong Kong) |
58. | DENTSPLY Implants (HK) Co. Limited (Hong Kong) |
59. | Dentsply Implants Manufacturing GmbH (Germany) |
60. | Dentsply Implants NV (Belgium) |
61. | Dentsply Implants Taiwan Co, Ltd. (Taiwan) |
62. | Dentsply Implants Turkey (Turkey) |
63. | Dentsply India Pvt. Ltd. (India) |
64. | Dentsply Industria e Comercio Ltda. (Brazil) |
65. | Dentsply Israel Ltd. (Israel) |
66. | Dentsply Italia SrL (Italy) |
67. | Dentsply Korea Limited (Korea) |
68. | Dentsply Limited (Cayman Islands) |
69. | Dentsply LLC (Delaware) |
70. | Dentsply Mexico S.A. de C.V. (Mexico) |
71. | DENTSPLY North America LLC (Delaware) |
72. | Dentsply Peru SAC (Peru) |
73. | Dentsply Prosthetics Austria GmbH (Austria) |
74. | DENTSPLY Prosthetics U.S. LLC (Delaware) |
75. | Dentsply RU Limited Liability Company (Russia) |
76. | Dentsply Russia Limited (U.K.) |
77. | Dentsply Sarl (Luxembourg) |
78. | Dentsply SE Sarl (Luxembourg) |
79. | Dentsply Services (Switzerland) S.a.r.L. (Switzerland) |
80. | Dentsply Sirona France S.A.S. (France) |
81. | Dentsply Sirona Malaysia Sdn Bhd (Malaysia) |
82. | Dentsply Sirona Switzerland Sarl (Switzerland) |
83. | Dentsply Sirona Vietnam Company Limited (Vietnam) |
84. | Dentsply Sirona South Africa (Proprietary) Limited (South Africa) |
85. | Dentsply Sweden AB (Sweden) |
86. | Dentsply Ukraine LLC (Ukraine) |
87. | Dentsply US Inc. (Delaware) |
88. | DENTSPLY-Sankin K.K. (Japan) |
89. | Ducera Dental Verwaltungs GmbH (Germany) |
90. | Durango Bensheim GmbH & Co. KG (Germany) |
91. | Durango Bensheim Verwaltungs GmbH (Germany) |
92. | E.S. Healthcare NV (Belgium) |
93. | E.S. Tooling NV (Belgium) |
94. | FONA Dental s.r.o. (Slovakia) |
95. | FONA Dental Systems Co., Ltd. (China) |
96. | FONA s.r.l. (Italy) |
97. | Futuredontics, Inc. (California) |
98. | GAC (International) Pty Ltd (Australia) |
99. | GAC Deutschland GmbH (Germany) |
100. | GAC International Asia Pte. Ltd. (Singapore) |
101. | GAC International LLC (Delaware) |
102. | GAC Ortho AS (Norway) |
103. | GAC SA (Switzerland) |
104. | infiniDent Services GmbH (Germany) |
105. | Infinident, Inc. (Delaware) |
106. | JCM International Inc. (Delaware) |
107. | M Guide Dental Laboratory LLC (New Jersey) |
108. | Maillefer Instruments Consulting S.a.r.l. (Switzerland) |
109. | Maillefer Instruments Holding S.a.r.l. (Switzerland) |
110. | Maillefer Instruments Manufacturing S.a.r.l. (Switzerland) |
111. | Maillefer Instruments Plus Sarl (Switzerland) |
112. | Maillefer Instruments Trading S.a.r.l. (Switzerland) |
113. | Medical 3 Importacion Service Iberica SL (Spain) |
114. | Megalopolis Dental S.A. de C.V. (Mexico) |
115. | MHT Optic Research AG (Switzerland) |
116. | MHT S.p.A. (Italy) |
117. | MIS Asia Pacific Limited (Hong Kong) |
118. | MIS Belgium SA (Belgium) |
119. | MIS Germany GmbH (Germany) |
120. | MIS Implants B.V. (Netherlands) |
121. | MIS Implants Technologies France SRL (France) |
122. | MIS Implants Technologies GmbH (Germany) |
123. | MIS Implants Technologies HK Limited (Hong Kong) |
124. | M.I.S. Implants Technologies Inc. (New Jersey) |
125. | MIS Implants Technologies Ltd. (Israel) |
126. | MIS Implants Technologies UK Limited (UK) |
127. | Nectar Imaging s.r.l. (Italy) |
128. | Oasis Dis Ticaret Anonim Sirketi (Turkey) |
129. | Oasis Medikal Urunler Kimya Turizm Sanayi Ve Ticaret Anonim Sirketi (Turkey) |
130. | Ortho Concept Sarl (France) |
131. | Orthodental International, Inc. (California) |
132. | Orthodental S.A. de C.V. (Mexico) |
133. | Osteointegration Materials LLC (Delaware) |
134. | Planer Dentaprise GmbH (Austria) |
135. | Prident (Shanghai) Dental Medical Devices Co., Ltd. (China) |
136. | Prident International, Inc. (California) |
137. | PT Dedent Supply (Indonesia) |
138. | PT Dentsply Indonesia (Indonesia) |
139. | Qi An Hua Rui (Beijing) Technology Ltd. (China) |
140. | Raintree Essix Inc. (Delaware) |
141. | Ransom & Randolph Company (Delaware) |
142. | Shenzen Mi Yi Shi Commerce Company Ltd (China) |
143. | SiCAT GmbH & Co. KG (Germany) |
144. | SiCAT Verwaltungs GmbH (Germany) |
145. | Sirona Bermuda I Ltd. (Bermuda) |
146. | Sirona Bermuda II Ltd. (Bermuda) |
147. | Sirona Dental a/s (Denmark) |
148. | Sirona Dental Comércio de Produtos e Sistemas Odontológicos Ltda. (Brazil) |
149. | Sirona Dental GmbH (Austria) |
150. | Sirona Dental Limited Sirketi (Turkey) |
151. | Sirona Dental Mexico S. de R.L. de C.V. (Mexico) |
152. | Sirona Dental Services GmbH (Germany) |
153. | Sirona Dental Systems (Foshan) Co., Ltd. (China) |
154. | Sirona Dental Systems (HK) Ltd. (Hong Kong) |
155. | Sirona Dental Systems Co., Ltd (Thailand) |
156. | Sirona Dental Systems GmbH (Germany) |
157. | Sirona Dental Systems Inc. (Delaware) |
158. | Sirona Dental Systems K.K. (Japan) |
159. | Sirona Dental Systems Korea, Ltd. (South Korea) |
160. | Sirona Dental Systems Ltd. (United Kingdom) |
161. | Sirona Dental Systems O.O.O. (Russia) |
162. | Sirona Dental Systems Private Ltd. (India) |
163. | Sirona Dental Systems Pte. Ltd (Singapore) |
164. | Sirona Dental Systems Pty. Ltd. (Australia) |
165. | Sirona Dental Systems s.r.l. (Italy) |
166. | Sirona Dental Systems SAS (France) |
167. | Sirona Dental Systems South Africa (Pty) Ltd. (South Africa) |
168. | Sirona Dental Systems Trading (Shanghai) Co., Ltd. (China) |
169. | Sirona Dental Systems Trading, LLC (United Arab Emirates) |
170. | Sirona Dental, Inc. (Delaware) |
171. | Sirona Holding GmbH (Austria) |
172. | Sirona Immobilien GmbH (Germany) |
173. | Sirona Technologie GmbH & Co. KG (Germany) |
174. | Sirona Verwaltungs GmbH (Germany) |
175. | The Dental Trading Co., Ltd. (Thailand) |
176. | Tulsa Dental Products LLC (Delaware) |
177. | Tulsa Luxembourg LLC (Delaware) |
178. | Tuzodent S.A. de C.V. (Mexico) |
179. | VDW GmbH (Germany) |
180. | VIPI Indústria, Comércio, Exportação e Importação de Produtos Odontológicos Ltda. (Brazil) |
181. | VPN Administração e Participações S.A. (Brazil) |
182. | Zhermack GmbH (Germany) |
183. | Zhermack SpA (Italy) |
184. | Zhermack, Inc. (Nevada) |
185. | Zhermapol SP Zoo (Poland) |
1. | I have reviewed this Form 10-K of DENTSPLY SIRONA Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles: |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ | Jeffrey T. Slovin |
Jeffrey T. Slovin | |
Chief Executive Officer |
1. | I have reviewed this Form 10-K of DENTSPLY SIRONA Inc; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles: |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ | Ulrich Michel |
Ulrich Michel | |
Executive Vice President and Chief Financial Officer |
/s/ | Jeffrey T. Slovin |
Jeffrey T. Slovin | |
Chief Executive Officer |
/s/ | Ulrich Michel |
Ulrich Michel | |
Executive Vice President and Chief Financial Officer |
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DOCUMENT AND ENTITY INFORMAITON - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Feb. 21, 2017 |
Jun. 30, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | DENTSPLY SIRONA INC. | ||
Entity Central Index Key | 0000818479 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Trading Symbol | XRAY | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 229,680,818 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 14,454,589,603 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 431.4 | $ 251.1 | $ 322.9 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | (90.5) | (188.1) | (354.1) |
Net (loss) gain on derivative financial instruments | (8.6) | 12.1 | 49.3 |
Net unrealized holding loss on available-for-sale securities | 0.0 | (8.5) | (4.2) |
Pension liability adjustments | (13.8) | 32.2 | (63.7) |
Total other comprehensive (loss) income | (112.9) | (152.3) | (372.7) |
Total comprehensive income (loss) | 318.5 | 98.8 | (49.8) |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0.3 | 0.5 | (0.7) |
Comprehensive income (loss) attributable to Dentsply Sirona | $ 318.2 | $ 98.3 | $ (49.1) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par or stated value per share (in dollars per share) | $ 1.00 | $ 1.00 |
Preferred stock, shares authorized | 250,000 | 250,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 200,000,000 |
Common stock, shares issued | 264,500,000 | 162,800,000 |
Common stock, shares outstanding | 230,100,000 | 140,100,000 |
Treasury stock, shares | 34,400,000 | 22,700,000 |
SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Description of Business DENTSPLY SIRONA Inc. (“Dentsply Sirona” or the “Company”), is the world’s largest manufacturer of professional dental products and technologies, with a 130-year history of innovation and service to the dental industry and patients worldwide. Dentsply Sirona develops, manufactures, and markets a comprehensive solutions offering including dental and oral health products as well as other consumable healthcare products under a strong portfolio of world class brands. The Company’s principal product categories are dental consumable products, healthcare consumable products and dental technology products. The Company distributes its products in over 120 countries under some of the most well established brand names in the industry. On February 29, 2016, DENTSPLY International Inc. merged with Sirona Dental Systems, Inc. (“Sirona”) to form DENTSPLY SIRONA Inc. (the “Merger”). The Consolidated Statements of Operations for the year ended December 31, 2016 include the results of operations for Sirona for the period February 29, 2016 to December 31, 2016. The accompanying Consolidated Balance Sheets at December 31, 2016 includes Sirona’s acquired assets and assumed liabilities. See Note 4, Business Combinations, for additional information about the Merger. Unless otherwise stated herein, reference throughout this Form 10-K to “Dentsply Sirona”, or the “Company” refers to financial information and transactions of DENTSPLY International Inc. (“DENTSPLY”) prior to February 29, 2016 and to financial information and transactions of DENTSPLY SIRONA Inc., thereafter. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. Principles of Consolidation The consolidated financial statements include the accounts of the Company. All significant intercompany accounts and transactions are eliminated in consolidation. Investments in non-consolidated affiliates (20-50 percent owned companies, joint ventures and partnerships as well as less than 20 percent ownership positions where the Company maintains significant influence over the subsidiary) are accounted for using the equity method. Cash and Cash Equivalents Cash and cash equivalents include deposits with banks as well as highly liquid time deposits with maturities at the date of purchase of ninety days or less. Short-term Investments Short-term investments are highly liquid time deposits with original maturities at the date of purchase greater than ninety days and with remaining maturities of one year or less. Accounts and Notes Receivable-Trade The Company sells dental and certain medical products through a worldwide network of distributors and directly to end users. For customers on credit terms, the Company performs ongoing credit evaluation of those customers’ financial condition and generally does not require collateral from them. The Company establishes allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a provision for doubtful accounts, which is included in Selling, general and administrative expenses in the Consolidated Statements of Operations. Accounts receivable – trade is stated net of these allowances that were $22.7 million and $10.7 million at December 31, 2016 and 2015, respectively. The December 31, 2016 balance includes $7.4 million related to the Merger and acquisitions during the year. For the years ended December 31, 2016 and 2015, the Company wrote-off $2.5 million and $2.2 million, respectively, of accounts receivable that were previously reserved. The Company increased the provision for doubtful accounts by $9.2 million and $4.3 million during 2016 and 2015, respectively. Inventories Inventories are stated at the lower of cost or market. At December 31, 2016 and 2015, the cost of $8.6 million and $8.1 million, respectively, of inventories was determined by the last-in, first-out (“LIFO”) method. The cost of other inventories was determined by the first-in, first-out (“FIFO”) or average cost methods. If the FIFO method had been used to determine the cost of LIFO inventories, the amounts at which net inventories are stated would be higher than reported at December 31, 2016 and 2015 by $6.8 million and $6.6 million, respectively. The Company establishes reserves for inventory estimated to be obsolete or unmarketable equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market conditions. Valuation of Goodwill and Other Long-Lived Assets Assessment of the potential impairment of goodwill and other long-lived assets is an integral part of the Company’s normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on assumptions and reflects management’s best estimates at a particular point in time. The dynamic economic environments in which the Company’s businesses operate and key economic and business assumptions with respect to projected selling prices, increased competition and introductions of new technologies can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time at which such impairments are recognized. If there are unfavorable changes in these assumptions, future cash flows, a key variable in assessing the impairment of these assets, may decrease and as a result the Company may be required to recognize impairment charges. Future changes in the environment and the economic outlook for the assets being evaluated could also result in additional impairment charges being recognized. The following information outlines the Company’s significant accounting policies on long-lived assets by type. Goodwill Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually, during the Company’s second quarter, or when indications of potential impairment exist. The Company monitors for the existence of potential impairment throughout the year. This impairment assessment includes an evaluation of various reporting units, which is an operating segment or one reporting level below the operating segment. The Company performs impairment tests using a fair value approach. The Company compares the fair value of each reporting unit to its carrying amount to determine if there is potential goodwill impairment. If impairment is identified on goodwill, the resulting charge is determined by recalculating goodwill through a hypothetical purchase price allocation of the fair value and reducing the current carrying value to the extent it exceeds the recalculated goodwill. The Company’s fair value approach involves using a discounted cash flow model with market-based support as its valuation technique to measure the fair value for its reporting units. The discounted cash flow model uses five-year forecasted cash flows plus a terminal value based on a multiple of earnings. In addition, the Company applies gross profit and operating expense assumptions consistent with its historical trends. The total cash flows were discounted based on market participant data, which included the Company’s weighted-average cost of capital. The Company considered the current market conditions when determining its assumptions. Lastly, the Company reconciled the aggregate fair values of its reporting units to its market capitalization, which included a reasonable control premium based on market conditions. Additional information related to the testing for goodwill impairment is provided in Note 9 Goodwill and Intangible Assets. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets consist of tradenames and are not subject to amortization. Valuations of identifiable intangibles assets acquired are based on information and assumptions available at the time of acquisition, using income and market model approaches to determine fair value. In-process research and development assets are not subject to amortization until the product associated with the research and development is substantially complete and is a viable product. At that time, the useful life to amortize the intangible asset is determined by identifying the period in which substantially all the cash flows are expected to be generated and the asset is moved to definite-lived. These assets are reviewed for impairment annually or whenever events or circumstances suggest that the carrying amount of the asset may not be recoverable. The Company uses an income approach, more specifically a relief from royalty method. Significant management judgment is necessary to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. Royalty rates used are consistent with those assumed for the original purchase accounting valuation. Other assumptions are consistent with those applied to goodwill impairment testing. If the carrying value exceeds the fair value, an impairment loss in the amount equal to the excess is recognized. Identifiable Definite-Lived Intangible Assets Identifiable definite-lived intangible assets, which primarily consist of patents, trademarks, brand names, non-compete agreements and licensing agreements, are amortized on a straight-line basis over their estimated useful lives. Valuations of identifiable intangibles assets acquired are based on information and assumptions available at the time of acquisition, using income and market model approaches to determine fair value. These assets are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset may not be recoverable. The Company closely monitors all intangible assets including those related to new and existing technologies for indicators of impairment as these assets have more risk of becoming impaired. Impairment is based upon an initial evaluation of the identifiable undiscounted cash flows. If the initial evaluation identifies a potential impairment, a fair value is determined by using a discounted cash flows valuation. If impaired, the resulting charge reflects the excess of the asset’s carrying cost over its fair value. Property, Plant and Equipment Property, plant and equipment are stated at cost, net of accumulated depreciation. Except for leasehold improvements, depreciation for financial reporting purposes is computed by the straight-line method over the following estimated useful lives: buildings - generally 40 years and machinery and equipment - 4 to 15 years. The cost of leasehold improvements is amortized over the shorter of the estimated useful life or the term of the lease. Maintenance and repairs are expensed as incurred to the statement of operations; replacements and major improvements are capitalized. These asset groups are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset group may not be recoverable. Impairment is based upon an evaluation of the identifiable undiscounted cash flows. If impaired, the resulting charge reflects the excess of the asset group’s carrying cost over its fair value. Derivative Financial Instruments The Company records all derivative instruments on the consolidated balance sheet at fair value and changes in fair value are recorded each period in the consolidated statements of operations or accumulated other comprehensive income (“AOCI”). The Company classifies derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less. The Company has elected to classify the cash flow from derivative instruments in the same category as the cash flows from the items being hedged. Should the Company enter into a derivative instrument that included an other-than-insignificant financing element then all cash flows will be classified as financing activities in the Consolidated Statements of Cash Flows as required by US GAAP. The Company employs derivative financial instruments to hedge certain anticipated transactions, firm commitments, and assets and liabilities denominated in foreign currencies. Additionally, the Company utilizes interest rate swaps to convert floating rate debt to fixed rate. Pension and Other Postemployment Benefits Some of the employees of the Company and its subsidiaries are covered by government or Company-sponsored defined benefit plans. Many of the employees have available to them defined contribution plans. Additionally, certain union and salaried employee groups in the United States are covered by postemployment healthcare plans. Costs for Company-sponsored defined benefit and postemployment benefit plans are based on expected return on plan assets, discount rates, employee compensation increase rates and health care cost trends. Expected return on plan assets, discount rates and health care cost trend assumptions are particularly important when determining the Company’s benefit obligations and net periodic benefit costs associated with postemployment benefits. Changes in these assumptions can impact the Company’s earnings before income taxes. In determining the cost of postemployment benefits, certain assumptions are established annually to reflect market conditions and plan experience to appropriately reflect the expected costs as actuarially determined. These assumptions include medical inflation trend rates, discount rates, employee turnover and mortality rates. The Company predominantly uses liability durations in establishing its discount rates, which are observed from indices of high-grade corporate bond yields in the respective economic regions of the plans. The expected return on plan assets is the weighted average long-term expected return based upon asset allocations and historic average returns for the markets where the assets are invested, principally in foreign locations. The Company reports the funded status of its defined benefit pension and other postemployment benefit plans on its consolidated balance sheets as a net liability or asset. Additional information related to the impact of changes in these assumptions is provided in Note 15, Benefit Plans. Accruals for Self-Insured Losses The Company maintains insurance for certain risks, including workers’ compensation, general liability, product liability and vehicle liability, and is self-insured for employee related healthcare benefits. The Company accrues for the expected costs associated with these risks by considering historical claims experience, demographic factors, severity factors and other relevant information. Costs are recognized in the period the claim is incurred, and the financial statement accruals include an estimate of claims incurred but not yet reported. The Company has stop-loss coverage to limit its exposure to any significant exposure on a per claim basis. Litigation The Company and its subsidiaries are from time to time parties to lawsuits arising out of their respective operations. The Company records liabilities when a loss is probable and can be reasonably estimated. These estimates are typically in the form of ranges, and the Company records the liabilities at the low point of the ranges, when no other point within the ranges are a better estimate of the probable loss. The ranges established by management are based on analysis made by internal and external legal counsel who considers information known at the time. If the Company determines a liability to be only reasonably possible, it considers the same information to estimate the possible exposure and discloses any material potential liability. These loss contingencies are monitored regularly for a change in fact or circumstance that would require an accrual adjustment. The Company believes it has estimated liabilities for probable losses appropriately in the past; however, the unpredictability of litigation and court decisions could cause a liability to be incurred in excess of estimates. Legal costs related to these lawsuits are expensed as incurred. Foreign Currency Translation The functional currency for foreign operations, except for those in highly inflationary economies, generally has been determined to be the local currency. Assets and liabilities of foreign subsidiaries are translated at foreign exchange rates on the balance sheet date; revenue and expenses are translated at the average year-to-date foreign exchange rates. The effects of these translation adjustments are reported in Equity within AOCI on the Consolidated Balance Sheets. During the year ended December 31, 2016, the Company had gains of $15.6 million on its loans designated as hedges of net investments and translation losses of $109.4 million. During the year ended December 31, 2015, the Company had gains of $1.7 million on its loans designated as hedges of net investments and translation losses of $187.2 million. Foreign exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved and remeasurement adjustments in countries with highly inflationary economies are included in income. Net foreign exchange transaction gains of $10.2 million and $5.2 million and net foreign exchange transaction losses of $1.3 million in 2016, 2015, and 2014, respectively, are included in Other expense (income), net in the Consolidated Statements of Operations. Revenue Recognition Revenue, net of related discounts and allowances, is recognized when the earnings process is complete. This occurs when products are shipped to or received by the customer in accordance with the terms of the agreement, title and risk of loss have been transferred, collectibility is reasonably assured and pricing is fixed or determinable. Net sales include shipping and handling costs collected from customers in connection with the sale. Sales taxes, value added taxes and other similar types of taxes collected from customers in connection with the sale are recorded by the Company on a net basis and are not included in the Consolidated Statement of Operations. The Company offers discounts to its customers and distributors if certain conditions are met. Discounts are primarily based on the volume of products purchased or targeted to be purchased by the individual customer or distributor. Discounts are deducted from revenue at the time of sale or when the discount is offered, whichever is later. The Company estimates volume discounts based on the individual customer’s historical and estimated future product purchases. Returns of products, excluding warranty related returns, are infrequent and insignificant. Certain of the Company’s customers are offered cash rebates based on targeted sales increases. Estimates of rebates are based on the forecasted performance of the customer and their expected level of achievement within the rebate programs. In accounting for these rebate programs, the Company records an accrual as a reduction of net sales as sales take place over the period the rebate is earned. The Company updates the accruals for these rebate programs as actual results and updated forecasts impact the estimated achievement for customers within the rebate programs. A portion of the Company’s net sales is comprised of sales of precious metals generated through its precious metal dental alloy product offerings. As the precious metal content of the Company’s sales is largely a pass-through to customers, the Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal alloy sale prices are typically adjusted when the prices of underlying precious metals change. The precious metals content of sales was $64.3 million, $92.8 million and $129.9 million for 2016, 2015 and 2014, respectively. Revenue Recognition related to Multiple Deliverables Sales revenue arrangements can consist of multiple deliverables of its product and service offerings. Additionally, certain products offerings, primarily dental technology products, may contain embedded software that functions together with the product to deliver the product’s essential functionality. Amounts received from customers in advance of product shipment are classified as deferred income until the revenue can be recognized in accordance with the Company’s revenue recognition policy.
After separating the elements into their specific units of accounting, total arrangement consideration is allocated to each unit of accounting according to the nature of the revenue as described above and application of the relative selling price method. Total recognized revenue is limited to the amount not contingent upon future transactions. Cost of Products Sold Cost of products sold represents costs directly related to the manufacture and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, warehousing and the depreciation of manufacturing, warehousing and distribution facilities. Overhead and related expenses include salaries, wages, employee benefits, utilities, lease costs, maintenance and property taxes. Warranties The Company provides warranties on certain equipment products. Estimated warranty costs are accrued when sales are made to customers. Estimates for warranty costs are based primarily on historical warranty claim experience. Warranty costs are included in Cost of products sold in the Consolidated Statements of Operations. During 2016, the Company’s warranty expense and accrual increased as a result of the Merger. The following table presents the Company’s warranty expense and warranty accrual at December 31:
Selling, General and Administrative Expenses Selling, general and administrative expenses represent costs incurred in generating revenues and in managing the business of the Company. Such costs include advertising and other marketing expenses, salaries, employee benefits, incentive compensation, research and development, travel, office expenses, lease costs, amortization of capitalized software and depreciation of administrative facilities. Advertising cost are expensed as incurred. Research and Development Costs Research and development (“R&D”) costs relate primarily to internal costs for salaries and direct overhead expenses. In addition, the Company contracts with outside vendors to conduct R&D activities. All such R&D costs are charged to expense when incurred. The Company capitalizes the costs of equipment that have general R&D uses and expenses such equipment that is solely for specific R&D projects. The depreciation expense related to this capitalized equipment is included in the Company’s R&D costs. Software development costs incurred prior to the attainment of technological feasibility are considered R&D and are expensed as incurred. Once technological feasibility is established, software development costs are capitalized until the product is available for general release to customers. Amortization of these costs are included in Cost of products sold over the estimated life of the products. R&D costs are included in Selling, general and administrative expenses in the Consolidated Statements of Operations and amounted to $128.5 million, $74.9 million and $80.8 million for 2016, 2015 and 2014, respectively. Stock Compensation The Company recognizes the compensation cost relating to stock-based payment transactions in the financial statements. The cost of stock-based payment transactions is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity awards). The compensation cost is only recognized for the portion of the awards that are expected to vest. Income Taxes The Company’s tax expense includes U.S. and international income taxes plus the provision for U.S. taxes on undistributed earnings of international subsidiaries not deemed to be permanently invested. Tax credits and other incentives reduce tax expense in the year the credits are claimed. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are recognized if it is more likely than not that the assets will be realized in future years. The Company establishes a valuation allowance for deferred tax assets for which realization is not likely. The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company recognizes in the financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. Earnings Per Share Basic earnings per share are calculated by dividing net earnings by the weighted average number of shares outstanding for the period. Diluted earnings per share is calculated by dividing net earnings by the weighted average number of shares outstanding for the period, adjusted for the effect of an assumed exercise of all dilutive options outstanding at the end of the period. Business Acquisitions The Company acquires businesses as well as partial interests in businesses. Acquired businesses are accounted for using the acquisition method of accounting which requires the Company to record assets acquired and liabilities assumed at their respective fair values with the excess of the purchase price over estimated fair values recorded as goodwill. The assumptions made in determining the fair value of acquired assets and assumed liabilities as well as asset lives can materially impact the results of operations. The Company obtains information during due diligence and through other sources to establish respective fair values. Examples of factors and information that the Company uses to determine the fair values include: tangible and intangible asset evaluations and appraisals; evaluations of existing contingencies and liabilities and product line information. If the initial valuation for an acquisition is incomplete by the end of the quarter in which the acquisition occurred, the Company will record a provisional estimate in the financial statements. The provisional estimate will be finalized as soon as information becomes available, but will only occur up to one year from the acquisition date. Noncontrolling Interests The Company reports noncontrolling interest (“NCI”) in a subsidiary as a separate component of Equity in the Consolidated Balance Sheets. Additionally, the Company reports the portion of net income (loss) and comprehensive income (loss) attributed to the Company and NCI separately in the Consolidated Statements of Operations. The Company also includes a separate column for NCI in the Consolidated Statements of Changes in Equity. Segment Reporting The Company has numerous operating businesses covering a wide range of products and geographic regions, primarily serving the professional dental market and to a lesser extent the consumable medical device market. Professional dental products and equipment represented approximately 92%, 88% and 88% of sales for each of the years ended 2016, 2015 and 2014, respectively. The Company has two reportable segments and a description of the activities within these segments is included in Note 5, Segment and Geographic Information. Fair Value Measurement Recurring Basis The Company records certain financial assets and liabilities at fair value in accordance with the accounting guidance, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring financial instruments at fair value. The three broad levels defined by the fair value hierarchy are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level 2 - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable reported date. The nature of these financial instruments include, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from, or corroborated by observable market data. Level 3 - Instruments that have little to no pricing observability as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The degree of judgment utilized in measuring the fair value of certain financial assets and liabilities generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument. Financial assets and liabilities with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, financial assets and liabilities rarely traded or not quoted will generally have less, or no pricing observability and a higher degree of judgment utilized in measuring fair value. The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Additionally, the Company considers its credit risks and its counterparties’ credit risks when determining the fair values of its financial assets and liabilities. The Company has presented the required disclosures in Note 18, Fair Value Measurement. Non-Recurring Basis When events or circumstances require an asset or liability to be fair valued that otherwise is generally recorded based on another valuation method, such as, net realizable value, the Company will utilize the valuation techniques described above. Reclassification of Prior Years Amounts Certain reclassifications have been made to prior year’s data in order to conform to current year presentation. Specifically, during the first quarter of 2016, the Company realigned reporting responsibilities for multiple locations as a result of changes to the management reporting structure. New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” that seeks to provide a single, comprehensive revenue recognition model for all contracts with customers that improve comparability within industries, across industries and across capital markets. Under this standard, an entity should recognize revenue for the transfer of goods or services equal to the amount it expects to be entitled to receive for those goods or services. Enhanced disclosure requirements regarding the nature, timing and uncertainty of revenue and related cash flows exist. To assist entities in applying the standard, a five step model for recognizing and measuring revenue from contracts with customers has been introduced. Entities have the option to apply the new guidance retrospectively to each prior reporting period presented (full retrospective approach) or retrospectively with a cumulative effect adjustment to retained earnings for initial application of the guidance at the date of initial adoption (modified retrospective method). On July 9, 2015, the FASB issued ASU No. 2015-14, deferring the effective date by one year to annual reporting periods beginning after December 15, 2017. Early adoption is permitted. In April 2016, the FASB issued ASU No. 2016-10, which clarifies the “identifying performance obligations and licensing implementations guidance” aspects of Topic 606. In May 2016, the FASB issued ASU No. 2016-11, which amends and or rescinds certain aspects of the Accounting Standards Codification (“ASC”) to reflect the requirements under Topic 606. Additionally, the FASB issued ASU No. 2016-12, which clarifies the criteria for assessing collectibility, permits an entity to elect an accounting policy to exclude from the transaction price amounts collected from customers for all sales taxes, and provides a practical expedient that permits an entity to reflect the aggregate effect of all contract modifications that occur before the beginning of the earliest period presented in accordance with Topic 606. In December 2016, the FASB issued ASU No. 2016-20, which clarifies several additional aspects of Topic 606 including contract modifications and performance obligations. The Company will adopt these accounting standards on January 1, 2018. The Company has completed its analysis of revenue areas that will be impacted by the adoption of this standard. The primary areas affected are the Company’s promotional and customer loyalty programs. The Company is currently gathering and assessing the financial impact this will have on the financial position, results of operations, cash flows and disclosures. The Company is also in the process of implementing changes to systems, processes and internal controls to meet the standard update to reporting and disclosure requirements. The Company has not made a decision on the transition method of adoption. In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”. This newly issued accounting standard eliminates from generally accepted accounting principles the concept of Extraordinary items, events or transactions that are unusual in nature and occur infrequently. The amendments in this update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this accounting standard in the quarter ended March 31, 2016. The adoption of this standard did not materially impact the Company’s financial position or results of operations. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory.” This newly issued accounting standard requires that an entity measure inventory at the lower of cost or net realizable value, as opposed to the lower of cost or market value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Excluded from this update are the Last In First Out (“LIFO”) and retail inventory methods of accounting for inventory. The amendments in this standard are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. Prospective application is required for presentation purposes. The adoption of this standard did not materially impact the Company’s financial position or results of operations. In September 2015, the FASB issued ASU No. 2015-16, “Simplifying Accounting for Measurement Period Adjustments.” This accounting standard seeks to simplify the accounting related to business combinations. Current US GAAP requires retrospective adjustment for provisional amounts recognized during the measurement periods when facts and circumstances that existed at the measurement date, if known, would have affected the measurement of the accounts initially recognized. This standard eliminates the requirement for retrospective adjustments and requires adjustments to the Financial Statements as needed in current period earnings for the full effect of changes. The Company adopted this accounting standard for the quarter ended March 31, 2016. The adoption of this standard did not materially impact the Company’s financial position or results of operations. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes.” This accounting standard seeks to simplify the accounting related to deferred income taxes. Current US GAAP requires an entity to separate deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) into current and noncurrent amounts for each tax jurisdiction based on the classification of the related asset or liability for financial reporting. DTAs and DTLs not related to assets and liabilities for financial reporting are classified based on the expected reversal date. The new standard requires DTAs or DTLs for each tax jurisdictions to be classified as noncurrent in a classified statement of financial position. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2016 and is permitted to be adopted prospectively or retrospectively. The adoption of this standard is not expected to materially impact the Company’s financial position and disclosures. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This newly issued accounting standard seeks to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information as well as to improve and achieve convergence of the FASB and International Accounting Standards Board (“IASB”) standards on the accounting for financial instruments. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. It also requires enhanced disclosures about those investments and reduces the number of items that are recognized in other comprehensive income. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2017 and should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact that this standard may have on its financial position, results of operations, cash flows and disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” This newly issued accounting standard seeks to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities in the balance sheet and disclosing key information about leasing arrangements. Current US GAAP does not require lessees to recognize assets and liabilities arising from operating leases in the balance sheet. This standard also provides guidance from the lessees prospective on how to determine if a lease is an operating lease or a financing lease and the differences in accounting for each. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2018 and it is required to be applied retrospectively using the modified retrospective approach. Early adoption is permitted. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. In March 2016, the FASB issued ASU No. 2016-09, “Stock Compensation.” This newly issued accounting standard seeks to simplify the accounting for all entities that issue stock-based payment awards to their employees. The primary areas of change include accounting for income taxes, cash flow statement classification of excess tax benefits and employee taxes paid when an employer withholds shares, accounting for forfeitures and tax withholding requirements. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2016. Early adoption is permitted. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid in the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement should be applied prospectively. The adoption of this standard is not expected to materially impact the Company’s financial position, results of operations, cash flows and disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows.” This newly issued accounting standard seeks to clarify the presentation of eight specific cash flow issues in order to reduce diversity in practice. The topics of clarification include debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and separately identifiable cash flows. The amendments in this update are effective for interim and fiscal periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied using a retrospective transition method to each period presented. The Company is currently assessing the impact that this standard will have on the presentation of its Consolidated Statements of Cash Flows. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes.” This newly issued accounting standard seeks to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current US GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to a third party, which is an exception to the principle of comprehensive recognition of current and deferred income taxes in US GAAP. ASU No. 2016-16 eliminates this exception. The amendments in this update are effective for interim and fiscal periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations.” This newly issued accounting standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition or disposal of assets or businesses. The amendments in this update provide a screen to determine when a set of assets is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. The amendments in this update are effective for interim and fiscal periods beginning after December 15, 2017. Early adoption is permitted under certain conditions. The amendments in this update should be applied prospectively. The Company is currently assessing the impact that this standard will on its financial position, results of operations, cash flows and disclosures. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles, Goodwill and Other.” This newly issued accounting standard seeks to simplify the subsequent measurement of goodwill by eliminating step 2 of the goodwill impairment test which requires business to perform procedures to determine the fair value of its assets and liabilities at the impairment testing date. Under this amendment, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendments in this update are required for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The amendments in this update should be applied prospectively. The Company is currently assessing the impact that this standard will have on its financial position, results of operations and disclosures. |
EARNINGS PER COMMON SHARE |
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EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The following table sets forth the computation of basic and diluted earnings per common share:
The calculation of weighted average diluted shares outstanding excludes stock options and restricted stock units (“RSUs”) of 0.6 million, 0.9 million and 1.0 million shares of common stock that were outstanding during the years ended 2016, 2015 and 2014, respectively, from the computation of diluted earnings per common share since their effect would be antidilutive. |
COMPREHENSIVE INCOME |
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Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME | COMPREHENSIVE INCOME AOCI includes foreign currency translation adjustments related to the Company’s foreign subsidiaries, net of the related changes in certain financial instruments hedging these foreign currency investments. In addition, changes in the Company’s fair value of certain derivative financial instruments, pension liability adjustments and prior service costs, net are recorded in AOCI. These changes are recorded in AOCI net of any related tax adjustments. For the years ended December 31, 2016, 2015 and 2014, these tax adjustments were $166.4 million, $169.3 million and $195.4 million, respectively, primarily related to foreign currency translation adjustments. The cumulative foreign currency translation adjustments included translation losses of $412.4 million and $307.5 million at December 31, 2016 and 2015, respectively, and which included losses of $78.1 million and $93.7 million, respectively, on loans designated as hedges of net investments. Changes in AOCI by component for the years ended December 31, 2016, 2015 and 2014:
Reclassification out of accumulated other comprehensive income (loss) for the years ended December 31, 2016, 2015 and 2014:
(a) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost for the years ended December 31, 2016, 2015, and 2014, respectively (see Note 15, Benefit Plans, for additional details). |
BUSINESS COMBINATIONS |
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BUSINESS COMBINATIONS | BUSINESS COMBINATIONS Business Combinations 2016 Transactions On February 29, 2016, DENTSPLY merged with Sirona in an all-stock transaction and the registrant was renamed DENTSPLY SIRONA Inc. and the common stock continues to trade on the NASDAQ under the ticker “XRAY”. In connection with the Merger, each former share of Sirona common stock issued and outstanding immediately prior to February 29, 2016, was converted to 1.8142 shares of DENTSPLY common stock. The Company issued approximately 101.8 million shares of DENTSPLY common stock to former shareholders of Sirona common stock, representing approximately 42% of the approximately 242.2 million total shares of DENTSPLY common stock outstanding on the Merger date. DENTSPLY was determined to be the accounting acquirer. In this all-stock transaction, only DENTSPLY common stock was transferred and DENTSPLY shareholders received approximately 58% of the voting interest of the combined company, and the Sirona shareholders received approximately 42% of the voting interest. Additional indicators included the combined company’s eleven Board of Directors which includes six members of the former DENTSPLY board, and five members of the former Sirona board, as well as DENTSPLY’s financial size. The Merger combines leading platforms in consumables, equipment, and technologies which creates complimentary end to end solutions to meet customer needs and improve patient care. The combined company is positioned to capitalize on key industry trends to drive growth, including accelerating adoption of digital dentistry. The following table summarizes the consideration transferred:
*Table may not foot due to rounding The Merger was recorded in accordance with US GAAP pursuant to the provisions of ASC Topic 805, Business Combinations. The Company has performed a preliminary valuation analysis of identifiable assets acquired and liabilities assumed and allocated the consideration based on the preliminary fair values of those identifiable assets acquired and liabilities assumed, but there may be material changes as the valuation is finalized. In addition, completion of the valuation may impact the assessment of the net deferred tax liability currently recognized with any adjustment resulting in a corresponding change to goodwill. The amount of these potential adjustments could be significant. The following table summarizes the preliminary fair value of identifiable assets acquired and liabilities assumed at the date of the Merger:
Inventory held by Sirona included a fair value adjustment of $72.0 million. The Company expensed this amount through June 30, 2016 as the acquired inventory was sold. Property, plant and equipment includes a fair value adjustment of $33.6 million, and consists of land, buildings, plant and equipment. Depreciable lives range from 25 to 50 years for buildings and from 3 to 10 years for plant and equipment. Deferred income for service contracts previously recorded by Sirona now includes a fair value adjustment which reduced other current liabilities by $17.3 million. The consequence is that this amount cannot be recognized as revenue under US GAAP. Weighted average useful lives for intangible assets were determined based upon the useful economic lives of the intangible assets that are expected to contribute to future cash flows. The acquired definite-lived intangible assets are being amortized on a straight-line basis over their expected useful lives. Intangible assets acquired consist of the following:
The fair values assigned to intangible assets were determined through the use of the income approach, specifically the relief from royalty method was used to fair value the developed technology and patents and tradenames and trademarks and the multi-period excess earnings method was used to fair value customer relationships. Both valuation methods rely on management’s judgments, including expected future cash flows resulting from existing customer relationships, customer attrition rates, contributory effects of other assets utilized in the business, peer group cost of capital and royalty rates as well as other factors. The valuation of tangible assets was derived using a combination of the income approach, the market approach and the cost approach. Significant judgments used in valuing tangible assets include estimated reproduction or replacement cost, weighted average useful lives of assets, estimated selling prices, costs to complete and reasonable profit. The $3,776.8 million of goodwill is attributable to the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill is considered to represent the value associated with workforce and synergies the two companies anticipate realizing as a combined company. Goodwill of $3,663.5 million has been assigned to the Company's Technologies segment and $113.3 million has been assigned to the Company’s Dental and Healthcare Consumables segment. The goodwill is not expected to be deductible for tax purposes. Sirona contributed net sales of $1,039.9 million and operating income of $227.2 million to the Company's Consolidated Statements of Operations during the period from February 29, 2016 to December 31, 2016 which is primarily included in the Technologies segment. The following unaudited pro forma financial information reflects the consolidated results of operations of the Company had the Merger occurred on January 1, 2015. Sirona’s financial information has been compiled in a manner consistent with the accounting policies adopted by DENTSPLY. The following unaudited pro forma financial information for the year ended December 31, 2016 and 2015, has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the Merger occurred on January 1, 2015, nor is it indicative of any future results.
The pro forma financial information is based on the Company's preliminary assignment of consideration given and therefore subject to adjustment. These pro forma amounts were calculated after applying the Company’s accounting policies and adjusting Sirona’s results to reflect adjustments that are directly attributable to the Merger. These adjustments mainly include additional intangible asset amortization, depreciation, inventory fair value adjustments, transaction costs and taxes that would have been charged assuming the fair value adjustments had been applied from January 1, 2015, together with the consequential tax effects at the statutory rate. Pro forma results do not include any anticipated synergies or other benefits of the Merger. For the year ended December 31, 2016, in connection with the Merger, the Company has incurred $29.9 million of transaction related costs, primarily amounts paid to third party advisers, legal and banking fees, which are included in Selling, general and administrative expenses in the Consolidated Statements of Operations. In September 2016, the Company finalized the acquisitions of MIS Implants Technologies Ltd., a dental implant systems manufacturer headquartered in northern Israel and a small acquisition of a healthcare consumable business. Total purchase price related to these two acquisitions was $341.4 million, net of cash acquired of $61.4 million, and is subject to final purchase price adjustments. At December 31, 2016, the Company recorded a preliminary estimate of $206.4 million in goodwill related to the difference between the fair value of assets acquired and liabilities assumed and the consideration given for the acquisitions. Intangible assets acquired consist of the following:
The results of operations for these businesses have been included in the accompanying financial statements as of the effective date of the respective transactions. The purchase prices have been assigned on the basis of preliminary estimates of the fair values of assets acquired and liabilities assumed. These transactions were not material to the Company’s net sales and net income attributable to Dentsply Sirona for the year ended December 31, 2016. 2015 Transactions In October 2015, the Company purchased a South American-based manufacturer of dental laboratory products for $51.1 million. The Company recorded $31.3 million of goodwill related to the difference between the fair value of assets acquired and liabilities assumed and the consideration given for the acquisitions. The results of operations for this business have been included in the accompanying financial statements as of the effective date of the respective transactions. This transaction was immaterial to the Company’s net sales and net income attributable to Dentsply Sirona. 2014 Transactions On January 1, 2014, the Company recorded a liability for the contractual purchase of the remaining shares of one noncontrolling interest. The Company paid $80.4 million to settle this obligation during the first quarter of 2015. In addition during 2014, the Company had one acquisition and divestitures of two non-core product lines. These transactions were immaterial to the Company’s net sales and net income attributable to Dentsply Sirona. Investment in Affiliates On December 9, 2010, the Company purchased an initial ownership interest of 17% of the outstanding shares of DIO Corporation (“DIO”). In addition, on December 9, 2010, the Company invested $49.7 million in the corporate convertible bonds of DIO, which were permitted to be converted into common shares at any time. The bonds were designated by the Company as available-for-sale securities which are reported in, Prepaid expenses and other current assets, in the Consolidated Balance Sheets at December 31, 2014 and the changes in fair value were reported in AOCI. The contractual maturity of the bonds was December 2015. The Company had recorded the ownership in DIO under the equity method of accounting as it had significant influence over DIO. In September 2015, the Company sold the bonds at face value. The Company recorded an unrealized holding loss, net of tax, of $4.8 million for the year ended December 31, 2015, in the Consolidated Statements of Comprehensive Income. As a result of sale of the bonds, the Company recorded $3.7 million, net of tax, of realized foreign currency gains in Other expense (income), net, in the Consolidated Statements of Operations for the year ended December 31, 2015. The fair value of the DIO bonds was $57.7 million at December 31, 2014 and a cumulative unrealized holding gain of $8.5 million was recorded in available-for-sale securities, net of tax in AOCI. At December 31, 2015, the Company no longer has representation on the DIO Board of Directors and as a result the Company no longer has significant influence on the operations of DIO. In addition, the buyers of the convertible bonds exercised the conversion rights which resulted in DIO issuing additional shares and diluting the Company’s ownership position to 13%. As a result of these changes the Company now uses the cost-basis method of accounting for the remaining direct investment. The book value of the Company’s direct investment in DIO is $8.2 million and $8.5 million at December 31, 2016 and 2015, respectively, and is included in “Other noncurrent assets, net,” in the Consolidated Balance Sheet. At December 31, 2016 and 2015, the fair value of the direct investment is $63.4 million and $49.3 million, respectively. |
SEGMENT AND GEOGRAPHIC INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION | SEGMENT AND GEOGRAPHIC INFORMATION The operating businesses are combined into two operating groups, which generally have overlapping 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 Company evaluates performance of the segments based on the groups’ net third party sales, excluding precious metal content, and segment adjusted operating 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, which is considered a measure not calculated in accordance with US GAAP, and is therefore considered a non-US GAAP measure. Management believes that the presentation of net sales, excluding precious metal content, provides useful information to investors because a portion of Dentsply Sirona’s net sales is comprised of sales of precious metals generated through sales of the Company’s precious metal dental alloy products, which are used by third parties to construct crown and bridge materials. Due to the fluctuations of precious metal prices and because the cost of the precious metal content of the Company’s sales is largely passed through to customers and has minimal effect on earnings, Dentsply Sirona reports net sales both with and without precious metal content to show the Company’s performance independent of precious metal price volatility and to enhance comparability of performance between periods. The Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal dental alloy sale prices are typically adjusted when the prices of underlying precious metals change. 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 also evaluates segment performance based on each segment’s adjusted operating income before provision for income taxes and interest. Segment adjusted operating income is defined as operating income before income taxes and before certain corporate headquarter unallocated costs, restructuring and other costs, interest expense, interest income, other expense (income), net, amortization of intangible assets and depreciation resulting from the fair value step-up of property, plant and equipment from acquisitions. The Company’s segment adjusted operating income is considered a non-US GAAP measure. A description of the products and services provided within each of the Company’s two operating segments is provided below. During the March 31, 2016 quarter, the Company realigned reporting responsibilities as a result of the Merger and changed the management structure. The segment information below reflects the revised structure for all periods shown. Dental and Healthcare Consumables This segment includes responsibility for the worldwide design, manufacture, sales and distribution of the Company’s Dental and Healthcare Consumable Products which include preventive, restorative, instruments, endodontic, and laboratory dental products as well as consumable medical device products. Technologies This segment is responsible for the worldwide design, manufacture, sales and distribution of the Company’s Dental Technology Products which includes dental implants, CAD/CAM systems, imaging systems, treatment centers and orthodontic products. The following table sets forth information about the Company’s segments for the years ended December 31, 2016, 2015 and 2014.
Geographic Information The following table sets forth information about the Company’s operations in different geographic areas for the years ended December 31, 2016, 2015 and 2014. 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.
Product and Customer Information The following table presents net sales information by product category:
Dental Consumable Products Dental consumable products consist of value added dental supplies and small equipment used in dental offices for the treatment of patients. It also includes specialized treatment products used within the dental office and laboratory settings including products used in the preparation of dental appliances by dental laboratories. Dentsply Sirona’s dental supplies include endodontic (root canal) instruments and materials, dental anesthetics, prophylaxis paste, dental sealants, impression materials, restorative materials, tooth whiteners and topical fluoride. Small equipment products include dental handpieces, intraoral curing light systems, dental diagnostic systems and ultrasonic scalers and polishers. The Company’s products used in the dental laboratories include dental prosthetics, including artificial teeth, precious metal dental alloys, dental ceramics and crown and bridge materials. Dental laboratory equipment products include porcelain furnaces. Dental Technology Products Dental technology products consist of high-tech state-of-art dental implants and related scanning equipment and treatment software, orthodontic appliances for dental practitioners and specialist and dental laboratories. The product category also includes basic and high-tech dental equipment such as treatment centers, imaging equipment and computer aided design and machining “CAD/CAM” systems equipment for dental practitioners and laboratories. The Company is the only manufacturer that can fully outfit a dental practitioner’s office with dental equipment. Treatment centers comprise a broad range of products from basic dentist chairs to sophisticated chair-based units with integrated diagnostic, hygiene and ergonomic functionalities, as well as specialist centers used in preventative treatment and for training purposes. Imaging systems consist of a broad range of diagnostic imaging systems for 2D or 3D, panoramic, and intra-oral applications. Dental CAD/CAM Systems are products designed for dental offices and laboratories used for dental restorations, which includes several types of restorations, such as inlays, onlays, veneers, crowns, bridges, copings and bridge frameworks made from ceramic, metal or composite blocks. This product line also includes high-tech CAD/CAM techniques of CEramic REConstruction, or CEREC equipment. This equipment allows for in-office application that enables dentists to produce high quality restorations from ceramic material and insert them into the patient’s mouth during a single appointment. CEREC has a number of advantages compared to the traditional out-of-mouth pre-shaped restoration method, as CEREC does not require a physical model, restorations can be created in the dentist’s office and the procedure can be completed in a single visit. Healthcare Consumable Products Healthcare consumable products consist mainly of urology catheters, certain surgical products, medical drills and other non-medical products. Concentration Risk For the year ended December 31, 2016, two customers each accounted for more than ten percent of consolidated net sales. At December 31, 2016, one customer accounted for more than ten percent of the consolidated accounts receivable balance. For the year ended December 31, 2015, one customer accounted for more than ten percent of consolidated net sales. At December 31, 2015, there were no customers that accounted for ten percent or more of the consolidated accounts receivable balance. For the year ended December 31, 2014, the Company had no single customer that represented ten percent or more of consolidated net sales. For the years ended December 31, 2016, 2015 and 2014, third party export sales from the U.S. were less than ten percent of consolidated net sales. |
OTHER EXPENSE (INCOME), NET |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER EXPENSE (INCOME), NET | OTHER EXPENSE (INCOME), NET Other expense (income), net, consists of the following:
Foreign exchange transaction gains for the year ended December 31, 2016, included approximately $6.9 million foreign currency gains on foreign currency forwards designated as net investment hedges. Foreign exchange transaction gains for the year ended December 31, 2015, included approximately $5.1 million foreign currency gain on the sale of a convertible bond. Foreign exchange transaction losses for the year ended December 31, 2014, included approximately $1.1 million of interest income and fair value gains on non-designated hedges. |
INVENTORIES, NET |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES, NET | INVENTORIES, NET Inventories, net, consist of the following:
The Company’s inventory valuation reserve was $37.5 million and $36.3 million at December 31, 2016 and 2015, respectively. |
PROPERTY, PLANT AND EQUIPMENT, NET |
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PROPERTY, PLANT AND EQUIPMENT, NET | PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consist of the following
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GOODWILL AND INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The Company performed the required annual impairment tests of goodwill at April 30, 2016 on 20 reporting units. As discussed in Note 5, Segment and Geographic Information, effective in the first quarter of 2016, the Company realigned reporting responsibilities for multiple locations. For any realignment that resulted in reporting unit changes, the Company applied the relative fair value method to determine the reallocation of goodwill of the associated reporting units. To determine the fair value of the Company’s reporting units, the Company uses a discounted cash flow model with market-based support as its valuation technique to measure the fair value for its reporting units. The discounted cash flow model uses five-year forecasted cash flows plus a terminal value based on a multiple of earnings. In addition, the Company applies gross margin and operating expense assumptions consistent with historical trends. The total cash flows were discounted based on a range between 6.7% to 14.7%, which included assumptions regarding the Company’s weighted-average cost of capital. The Company considered the current market conditions both in the U.S. and globally, when determining its assumptions and reconciled the aggregated fair values of its reporting units to its market capitalization, which included a reasonable control premium based on market conditions. As a result of the annual impairment tests of goodwill, no impairment was identified. At December 31, 2016, three reporting units, all components of the Technologies operating segment, and one reporting unit, a component of the Dental and Healthcare Consumables operating segment, were created as a result of the Sirona merger on February 29, 2016. At the date of the Merger, the fair value of the businesses equaled book value with goodwill for the reporting units totaling $3,776.8 million. Given the limited time since the Merger date, the reporting units’ fair values approximate the book values of the reporting units. Slower net sales growth rates in the dental industry, an increase in discount rates, unfavorable changes in earnings multiples or a decline in future cash flow projections, among other factors, may cause a change in circumstances indicating that the carrying value of the Company’s goodwill may not be recoverable. There were no impairments of identifiable definite-lived and indefinite-lived intangible assets for the year ended December 31, 2016. Impairments of identifiable definite-lived and indefinite-lived intangible assets for the year ended December 31, 2015 was $3.7 million. There were no impairments of identifiable definite-lived and indefinite-lived intangible assets for the year ended December 31, 2014. Impairments of intangible assets are included in Restructuring and other costs in the Consolidated Statements of Operations. At December 31, 2016, indefinite-lived assets recorded on three reporting units, all within the Technologies operating segment, and indefinite-lived assets recorded on one reporting unit within the Dental and Healthcare Consumables operating segment, were identified and fair valued as result of the Sirona merger on February 29, 2016. At the date of the Merger, the fair value of the indefinite-lived assets equaled book value totaling $905.0 million. Given the limited time since the Merger date, the indefinite-lived asset’s fair values approximate the book values. Slower net sales growth rates in the dental industry, an increase in discount rates, unfavorable changes in earnings multiples or a decline in future cash flow projections, among other factors, may cause a change in circumstances indicating that the carrying value of the Company’s indefinite-lived assets may not be recoverable. A reconciliation of changes in the Company’s goodwill by segment and in total are as follows (the segment information below reflects the current structure for all periods shown):
Identifiable definite-lived and indefinite-lived intangible assets consist of the following:
Amortization expense for identifiable definite-lived intangible assets for 2016, 2015 and 2014 was $155.1 million, $43.8 million and $47.9 million, respectively. The annual estimated amortization expense related to these intangible assets for each of the five succeeding fiscal years is $180.1 million, $178.5 million, $178.3 million, $177.9 million and $172.6 million for 2017, 2018, 2019, 2020 and 2021, respectively. |
PREPAID EXPENSES AND OTHER CURRENT ASSETS |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following:
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ACCRUED LIABILITIES |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consist of the following:
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FINANCING ARRANGEMENTS |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS Short-Term Debt Short-term debt consisted of the following:
Short-Term Borrowings The Company has a $500.0 million commercial paper facility. At December 31, 2016 and 2015, there were no outstanding borrowings under this facility. The average balance outstanding for the commercial paper facility during the year ended December 31, 2016 was $0.2 million. Long-Term Debt Long-term debt consisted of the following:
In February 2016, the Company paid the final required payment of $75.0 million under the $250.0 million private placement notes by issuing commercial paper. The Company used the proceeds from the February 19, 2016 private placement notes issuance to pay the 2016 payment. On August 26, 2016, the Company paid the third annual principal amortization of $8.8 million representing a 5% mandatory principal amortization due in each of the first six years under the terms of the $175.0 million Term Loan with a final maturity of August 26, 2020. An amount of $8.8 million will be due in August 2017 and has been classified as current in the Consolidated Balance Sheets. The Company intends to use available cash, commercial paper and the revolving credit facilities to pay the 2017 payment. On February 19, 2016, the Company issued the following private placements notes under the December 11, 2015 Note Purchase Agreement: 11.0 million euros aggregate principal amount bearing interest of 2.05%, Series F Senior Notes due February 19, 2026; 15.0 million euros aggregate principal amount bearing interest of 2.05%, Series G Senior Notes due February 19, 2026; and 45.0 million euros aggregate principal amount bearing interest of 2.45%, Series H Senior Notes due February 19, 2031. On August 15, 2016, the Company issued the following private placements notes under the December 11, 2015 Note Purchase Agreement: 58.0 million Swiss francs aggregate principal amount of 1.01%, Series I Senior Notes due August 15, 2026; 40.0 million euros aggregate principal amount bearing interest of 2.25%, Series J Senior Notes due August 15, 2026; 66.0 million euros aggregate principal amount bearing interest of 2.25%, Series K Senior Notes due August 15, 2026; 140.0 million Swiss francs aggregate principal amount bearing interest of 1.17%, Series L Senior Notes due August 15, 2028; and 65.0 million Swiss francs aggregate principal amount bearing interest of 1.33%, Series M Senior Notes due August 15, 2031. The 2016 issuance of the private placement notes were used to finance the payments of $75.0 million on the $250.0 million private placement notes due February 19, 2016, the $300.0 million fixed rate senior notes that matured on August 2016 and the 65.0 million Swiss francs term loan that matured on September 1, 2016. On October 27, 2016, the Company executed a new Note Purchase Agreement in a private placement with institutional investors to sell 350.0 million euros aggregate principal amount of senior notes at a weighted average interest rate of 1.40%. The Company issued 87.5 million euros in the following series: 17.5 million euros aggregate principal amount bearing interest of 0.98%, Series N Senior Notes due October 27, 2024; 14.5 million euros aggregate principal amount bearing interest of 1.31%, Series O Senior Notes due October 27, 2027; 3.0 million euros aggregate principal amount bearing interest of 1.31%, Series P Senior Notes due October 27, 2027; 15.5 million euros aggregate principal amount bearing interest of 1.50%, Series Q Senior Notes due October 27, 2029; 2.0 million euros aggregate principal amount bearing interest of 1.50%, Series R Senior Notes due October 27, 2029; 6.5 million euros aggregate principal amount bearing interest of 1.58%, Series S Senior Notes due October 27, 2030; 11.0 million euros aggregate principal amount bearing interest of 1.58%, Series T Senior Notes due October 27, 2030; 10.5 million euros aggregate principal amount bearing interest of 1.65%, Series U Senior Notes due October 27, 2031; and 7.0 million euros aggregate principal amount bearing interest of 1.65%, Series V Senior Notes due October 27, 2031. The Company issued 262.5 million euros in the following series: 52.5 million euros aggregate principal amount bearing interest of 0.98%, Series A Senior Notes due October 27, 2024; 43.5 million euros aggregate principal amount bearing interest of 1.31%, Series B Senior Notes due October 27, 2027; 9.0 million euros aggregate principal amount bearing interest of 1.31%, Series C Senior Notes due October 27, 2027; 46.5 million euros aggregate principal amount bearing interest of 1.50%, Series D Senior Notes due October 27, 2029; 6.0 million euros aggregate principal amount bearing interest of 1.50%, Series E Senior Notes due October 27, 2029; 19.5 million euros aggregate principal amount bearing interest of 1.58%, Series F Senior Notes due October 27, 2030; 33.0 million euros aggregate principal amount bearing interest of 1.58%, Series G Senior Notes due October 27, 2030; 31.5 million euros aggregate principal amount bearing interest of 1.65%, Series H Senior Notes due October 27, 2031; and 21.0 million euros aggregate principal amount bearing interest of 1.65%, Series I Senior Notes due October 27, 2031. Proceeds from the senior notes were used to finance acquisitions in the fourth quarter of 2016. Effective June 30, 2016, the Company amended and extended its $500.0 million multicurrency revolving credit facility for an additional year thorough July 23, 2021. In addition, certain non-extending members of the bank group were replaced with existing and new lenders. The Company has access to the full $500.0 million through July 23, 2021. The facility is unsecured and contains certain affirmative and negative covenants relating to the operations and financial condition of the Company. The most restrictive of these covenants pertain to asset dispositions and prescribed ratios of debt outstanding to total capital not to exceed the ratio of 0.6 to 1.0, and operating income excluding depreciation and amortization to interest expense of not less than 3.0 times. Any breach of any such covenants or restrictions would result in a default under the existing debt agreements that would permit the lenders to declare all borrowings under such debt agreements to be immediately due and payable and through cross default provisions, would entitle the Company's other lenders to accelerate their loans. At December 31, 2016 and 2015, there were no outstanding borrowings under the revolving credit facility. The Company’s revolving credit facility, term loans and senior notes contain certain affirmative and negative covenants relating to the Company's operations and financial condition. At December 31, 2016, the Company was in compliance with all debt covenants. At December 31, 2016, the Company had $549.4 million borrowings available under unused lines of credit, including lines available under its short-term arrangements and revolving credit agreement. The table below reflects the contractual maturity dates of the various borrowings at December 31, 2016:
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EQUITY |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | EQUITY At December 31, 2016, the Company had authorization to maintain up to 39.0 million shares of treasury stock under its stock repurchase program as approved by the Board of Directors on September 21, 2016. During 2016, 2015 and 2014, the Company repurchased outstanding shares of common stock at a cost of $815.1 million, $112.7 million and $163.2 million, respectively. For the years ended December 31, 2016, 2015 and 2014, the Company received proceeds of $41.0 million, $35.5 million and $49.0 million, respectively, primarily as a result of stock options exercised in the amount of 1.2 million, 1.1 million and 1.5 million in each of the years, respectively. It is the Company’s practice to issue shares from treasury stock when options are exercised. The tax benefit realized for the options exercised during the year ended December 31, 2016, 2015 and 2014 is $16.1 million, $11.6 million and $2.1 million, respectively. The following table represents total outstanding shares of common stock and treasury stock for the years ended December 31:
On February 29, 2016, in conjunction with the Merger, the Company increased the authorized number of shares of common stock to 400.0 million. The Company maintains the 2016 Omnibus Incentive Plan (the “Plan”) under which it may grant non-qualified stock options (“NQSO”), incentive stock options, restricted stock, restricted stock units (“RSU”) and stock appreciation rights, collectively referred to as “Awards.” Awards are granted at exercise prices that are equal to the closing stock price on the date of grant. The Company authorized grants under the Plan of 25.0 million shares of common stock, plus any unexercised portion of canceled or terminated stock options granted under the legacy DENTSPLY International Inc. 2010 and 2002 Equity Incentive Plans, as amended, and under the legacy Sirona Dental Systems, Inc. 2015 and 2006 Equity Incentive Plans, as amended. For each restricted stock and RSU issued, it is counted as a reduction of 3.09 shares of common stock available to be issued under the Plan. No key employee may be granted awards in excess of 1.0 million shares of common stock in any calendar year. The number of shares available for grant under the 2016 Plan at December 31, 2016 is 36.4 million. Stock options granted become exercisable as determined by the grant agreement and expire ten years after the date of grant under these plans. RSU vest as determined by the grant agreement and are subject to a service condition, which requires grantees to remain employed by the Company during the period following the date of grant. Under the terms of the RSU, the vesting period is referred to as the restricted period. RSU and the rights under the award may not be sold, assigned, transferred, donated, pledged or otherwise disposed of during the restricted period prior to vesting. In addition to the service condition, certain key executives are granted RSU subject to performance requirements that can vary between the first year and up to the final year of the RSU award. If targeted performance is not met the RSU granted is adjusted to reflect the achievement level. Upon the expiration of the applicable restricted period and the satisfaction of all conditions imposed, all restrictions imposed on RSU will lapse, and one shares of common stock will be issued as payment for each vested RSU. Upon death, disability or qualified retirement all awards become immediately exercisable for up to one year. Awards are expensed as compensation over their respective vesting periods or to the eligible retirement date if shorter. The following table represents total stock based compensation expense and the tax related benefit for the years ended:
For the years ended December 31, 2016, 2015, and 2014, stock compensation expense of $39.7 million, $24.3 million and $24.2 million, respectively, was recorded in the Consolidated Statement of Operations. For the years ended December 31, 2016, 2015, and 2014, $39.1 million, $23.6 million and $23.5 million, respectively, was recorded in Selling, general and administrative expense and $0.6 million, $0.7 million and $0.7 million, respectively, was recorded in Cost of products sold. There were 1.7 million non-qualified stock options unvested at December 31, 2016. The remaining unamortized compensation cost related to non-qualified stock options is $11.8 million, which will be expensed over the weighted average remaining vesting period of the options, or 1.4 years. The unamortized compensation cost related to RSU is $42.0 million, which will be expensed over the remaining weighted average restricted period of the RSU, or 1.5 years. The Company uses the Black-Scholes option-pricing model to estimate the fair value of each option awarded. The following table sets forth the average assumptions used to determine compensation cost for the Company’s NQSO issued during the years ended:
The total intrinsic value of options exercised for the years ended December 31, 2016, 2015 and 2014 was $38.3 million, $22.3 million and $28.8 million, respectively. The total fair value of shares vested for the years ended December 31, 2016, 2015 and 2014 was $34.8 million, $22.7 million and $20.2 million, respectively. The following table summarizes the NQSO transactions for the year ended December 31, 2016:
The weighted average remaining contractual term of all outstanding options is 5.1 years and the weighted average remaining contractual term of exercisable options is 4.3 years. The following table summarizes information about NQSO outstanding for the year ended December 31, 2016:
The following table summarizes the unvested RSU transactions for the year ended December 31, 2016:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The components of income before income taxes from operations are as follows:
The components of the provision for income taxes from operations are as follows:
The reconciliation of the U.S. federal statutory tax rate to the effective rate for the years ended is as follows:
The tax effect of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:
Deferred tax assets and liabilities are included in the following Consolidated Balance Sheet line items:
The Company has $137.9 million of foreign tax credit carryforwards at December 31, 2016, of which $43.4 million will expire in 2023, $55.5 million will expire in 2024, $38.9 million will expire in 2025 and $0.1 million will expire in 2026. The Company has tax loss carryforwards related to certain foreign and domestic subsidiaries of approximately $1.1 billion at December 31, 2016, of which $442.8 million expires at various times through 2036 and $680.8 million may be carried forward indefinitely. Included in deferred income tax assets at December 31, 2016 are tax benefits totaling $209.6 million, before valuation allowances, for the tax loss carryforwards. The Company has recorded $175.3 million of valuation allowance to offset the tax benefit of net operating losses and $7.4 million of valuation allowance for other deferred tax assets. The Company has recorded these valuation allowances due to the uncertainty that these assets can be realized in the future. As of December 31, 2016, a deferred tax asset of $18.4 million, related to a non-US tax attribute, has been recognized. This benefit is a result of an agreement that has been filed to combine the profits and losses of certain entities, effective 1/1/2019. The Company has provided federal income taxes on certain undistributed earnings of its foreign subsidiaries that the Company anticipates will be repatriated. Deferred federal income taxes have not been provided on $599.0 million of cumulative earnings of foreign subsidiaries that the Company has determined to be permanently reinvested. It is not practicable to estimate the amount of tax that might be payable on these permanently reinvested earnings. Tax Contingencies The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company recognizes in the financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The total amount of gross unrecognized tax benefits at December 31, 2016 is approximately $13.7 million, of this total, approximately $13.3 million represents the amount of unrecognized tax benefits that, if recognized, would affect the effective income tax rate. It is reasonably possible that certain amounts of unrecognized tax benefits will significantly increase or decrease within twelve months of the reporting date of the Company’s consolidated financial statements. Final settlement and resolution of outstanding tax matters in various jurisdictions during the next twelve months are not expected to be significant. The total amount of accrued interest and penalties were $2.8 million and $6.5 million at December 31, 2016 and 2015, respectively. The Company has consistently classified interest and penalties recognized in its consolidated financial statements as income taxes based on the accounting policy election of the Company. During the years ended December 31, 2016 and 2015, the Company recognized income tax benefit of $3.4 million and $2.0 million respectively, related to interest and penalties. During the year ended December 31, 2014, the company recognized a $1.9 million tax expense related to interest and penalties. The Company is subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. The significant jurisdictions include the U.S., Germany, Sweden and Switzerland. The Company has substantially concluded all U.S. federal income tax matters for years through 2011. The Company is currently under audit for the tax years 2012 and 2013. The tax years 2014 and 2015 are subject to future potential tax audit adjustments. The Company has concluded audits in Germany through the tax year 2011 and is currently under audit for the years 2012 through 2014. The taxable years that remain open for Sweden are 2011 through 2015. The taxable years that remain open for Switzerland are 2006 through 2015. The Company had the following activity recorded for unrecognized tax benefits:
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BENEFIT PLANS |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BENEFIT PLANS | BENEFIT PLANS Defined Contribution Plans The Company maintains a number of defined contribution plans. The DENTSPLY Employee Stock Ownership Plan (“ESOP”) and 401(k) plans are designed to have contribution allocations of eligible compensation, with a targeted 3% going into the ESOP in Company stock and a targeted 3% going into the 401(k) as a non-elective contribution in cash. The Company sponsors an employee 401(k) savings plan for its U.S. workforce to which enrolled participants may contribute up to Internal Revenue Service defined limits. The ESOP is a non-contributory defined contribution plan that covers substantially all of the U.S. based non-union employees of the Company. All future ESOP allocations will come from a combination of forfeited shares and shares acquired in the open market. The share allocation will be accounted for at fair value at the point of allocation, which is normally year-end. Effective December 31, 2016, the DENTSPLY Employee Stock Ownership Plan was merged with the DENTSPLY 401(k) Savings Plan. The result of this merger will be the creation of the Dentsply Sirona Inc. 401(k) Savings and Employee Stock Ownership Plan (the "Plan"), effective as of January 1, 2017. In addition to these plans, the Company also maintains various other U.S. and non-U.S. defined contribution and non-qualified deferred compensation plans. The annual expense, net of forfeitures, were $28.0 million, $24.9 million and $25.4 million for 2016, 2015 and 2014, respectively. Defined Benefit Plans The Company maintains a number of separate contributory and non-contributory qualified defined benefit pension plans for certain union and salaried employee groups in the United States. Pension benefits for salaried plans are based on salary and years of service; hourly plans are based on negotiated benefits and years of service. Annual contributions to the pension plans are sufficient to satisfy minimum funding requirements. Pension plan assets are held in trust and consist mainly of common stock and fixed income investments. The Company’s funding policy for its U.S. plans is to make contributions that are necessary to maintain the plans on a sound actuarial basis and to meet the minimum funding standards prescribed by law. The Company may, at its discretion, contribute amounts in excess of the minimum required contribution. In addition to the U.S. plans, the Company maintains defined benefit pension plans for certain employees in Austria, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, Switzerland and Taiwan. These plans provide benefits based upon age, years of service and remuneration. Other foreign plans are not significant individually or in the aggregate. Substantially all of the German and Swedish plans are unfunded book reserve plans. Most employees and retirees outside the U.S. are covered by government health plans. The Company predominantly uses liability durations in establishing its discount rates, which are observed from indices of high-grade corporate bond yield curves in the respective economic regions of the plan. During the first quarter of 2016, the Company changed the method utilized to estimate the service cost and interest cost components of net periodic benefit costs for the Company’s major defined benefit pension plans in Germany, Switzerland and for all defined benefit pension and other postemployment healthcare plans in the United States. Historically, the Company estimated the service cost and interest cost components using a single weighted average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. The Company has elected to use a spot rate approach for the estimation of these components of benefit cost by applying the specific spot rates along the yield curve to the relevant projected cash flows, as the Company believes this provides a better estimate of service and interest costs. The Company considers this a change in estimate and, accordingly, accounted for it prospectively. This change does not affect the measurement of the Company’s total benefit obligation. Defined Benefit Pension Plan Assets The primary investment strategy is to ensure that the assets of the plans, along with anticipated future contributions, will be invested in order that the benefit entitlements of employees, pensioners and beneficiaries covered under the plan can be met when due with high probability. Pension plan assets consist mainly of common stock and fixed income investments. The target allocations for defined benefit plan assets are 30% to 65% equity securities, 30% to 65% fixed income securities, 0% to 15% real estate, and 0% to 25% in all other types of investments. Equity securities include investments in companies located both in and outside the U.S. Equity securities do not include common stock of the Company. Fixed income securities include corporate bonds of companies from diversified industries, government bonds, mortgage notes and pledge letters. Other types of investments include investments in mutual funds, common trusts, insurance contracts, hedge funds and real estate. These plan assets are not recorded in the Company’s Consolidated Balance Sheet as they are held in trust or other off-balance sheet investment vehicles. The defined benefit pension plan assets in the U.S. are held in trust and the investment policies of the plans are generally to invest the plans assets in equities and fixed income investments. The objective is to achieve a long-term rate of return in excess of 4% while at the same time mitigating the impact of investment risk associated with investment categories that are expected to yield greater than average returns. In accordance with the investment policies of the U.S. plans, the plans assets were invested in the following investment categories: interest-bearing cash, registered investment companies (e.g. mutual funds), common/collective trusts, master trust investment accounts and insurance company general accounts. The investment objective is for assets to be invested in a manner consistent with the fiduciary standards of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The defined benefit pension plan assets maintained in Austria, France, Germany, Japan, Norway, the Netherlands, Switzerland and Taiwan all have separate investment policies but generally have an objective to achieve a long-term rate of return in excess of 4% while at the same time mitigating the impact of investment risk associated with investment categories that are expected to yield greater than average returns. In accordance with the investment policies for the plans outside the U.S., the plans’ assets were invested in the following investment categories: interest-bearing cash, U.S. and foreign equities, foreign fixed income securities (primarily corporate and government bonds), insurance company contracts, real estate and hedge funds. In Germany, Sirona traditionally had an unfunded defined benefit pension plan whose benefits are based primarily on years of service and wage and salary group. This plan is closed to new participants. Sirona replaced its unfunded defined benefit pension plan in Germany with a defined contribution plan. All new hires now receive defined contributions to a pension plan based on a percentage of the employee’s eligible compensation. However, due to grandfathering provisions for certain existing employees hired before the new defined contribution plan was introduced, the Company continues to be obligated to provide pension benefits which are at a minimum equal to benefits that would have been available under the terms of the traditional defined benefit plans (the “Grandfathered Benefit”). The Grandfathered Benefit and contributions to the Sirona pension plan made for those employees are included in the disclosures for defined benefit plans. The Company accounts for the Grandfathered Benefit by recognizing the higher of the defined contribution obligation or the defined benefit obligation for the minimum benefit. The Sirona plan assets in Germany consist of insurance policies with a guaranteed minimum return by the insurance company and an excess profit participation feature for a portion of the benefits. Sirona pays the premiums on the insurance policies, but does not manage the investment of the funds. The insurance company makes all decisions on investment of funds, including the allocation to asset groups. The fair value of the plan assets which include equity securities, fixed-income investments, and others is based on the cash surrender values reported by the insurance company. Postemployment Healthcare The Company sponsors postemployment healthcare plans that cover certain union and salaried employee groups in the U.S. and is contributory, with retiree contributions adjusted annually to limit the Company’s contribution for participants who retired after June 1, 1985. The plans for postemployment healthcare have no plan assets. The Company also sponsors unfunded non-contributory postemployment medical plans for a limited number of union employees and their spouses and retirees of a discontinued operation. Reconciliations of changes in the defined benefit and postemployment healthcare plans’ benefit obligations, fair value of assets and statement of funded status are as follows:
The amounts recognized in the accompanying Consolidated Balance Sheets, net of tax effects, are as follows:
Amounts recognized in AOCI consist of:
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
Components of net periodic benefit cost:
Other changes in plan assets and benefit obligations recognized in AOCI:
The estimated net loss, prior service cost and transition obligation for the defined benefit plans that will be amortized from AOCI into net periodic benefit cost over the next fiscal year are $6.3 million. There will be an immaterial amount of estimated net loss and prior service credit for the other postemployment plans that will be amortized from AOCI into net periodic benefit cost over the next fiscal year. The amounts in AOCI that are expected to be amortized as net expense (income) during fiscal year 2017 are as follows:
Assumptions The assumptions used to determine benefit obligations and net periodic benefit cost for the Company’s plans are similar for both U.S. and foreign plans. The weighted average assumptions used to determine benefit obligations for the Company’s plans, principally in foreign locations, at December 31, 2016, 2015 and 2014 are as follows:
The weighted average assumptions used to determine net periodic benefit cost for the Company’s plans, principally in foreign locations, for the years ended December 31, 2016, 2015 and 2014 are as follows:
To develop the assumptions for the expected long-term rate of return on assets, the Company considered the current level of expected returns on risk free investments (primarily U.S. government bonds), the historical level of the risk premium associated with the other asset classes in which the assets are invested and the expectations for future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocations to develop the assumptions for the expected long-term rate of return on assets. Assumed health care cost trend rates have an impact on the amounts reported for postemployment benefits. An ongoing one percentage point change in assumed healthcare cost trend rates would have had the following effects for the year ended December 31, 2016:
Fair Value Measurements of Plan Assets The fair value of the Company’s pension plan assets at December 31, 2016 is presented in the table below by asset category. Approximately 75% of the total plan assets are categorized as Level 1, and therefore, the values assigned to these pension assets are based on quoted prices available in active markets. For the other category levels, a description of the valuation is provided in Note 1, Significant Accounting Policies, under the “Fair Value Measurement” heading.
The following table provides a reconciliation from December 31, 2015 to December 31, 2016 for the plan assets categorized as Level 3. During the year ended December 31, 2016, $0.2 million of plan assets were transferred out of the Level 3 category.
The following tables provide a reconciliation from December 31, 2014 to December 31, 2015 for the plan assets categorized as Level 3. During the year ended December 31, 2015, no assets were transferred in or out of the Level 3 category.
Fair values for Level 3 assets are determined as follows: Common Trusts and Hedge Funds: The investments are valued using the net asset value provided by the administrator of the trust or fund, which is based on the fair value of the underlying securities. Real Estate: Investment is stated by its appraised value. Insurance Contracts: The value of the asset represents the mathematical reserve of the insurance policies and is calculated by the insurance firms using their own assumptions. Cash Flows In 2017, the Company expects to make contributions and direct benefit payments of $11.4 million to its defined benefit pension plans and $0.7 million to its postemployment medical plans. Estimated Future Benefit Payments
The above table reflects the total employer contributions and benefits expected to be paid from the plan and does not include the participants’ share of the cost. |
RESTRUCTURING AND OTHER COSTS |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING AND OTHER COSTS | RESTRUCTURING AND OTHER COSTS Restructuring Costs Restructuring costs of $20.9 million, $61.4 million and $9.9 million for the year ended 2016, 2015 and 2014, respectively, are reflected in Restructuring and other costs in the Consolidated Statement of Operations and the associated liabilities are recorded in Accrued liabilities and Other noncurrent liabilities in the Consolidated Balance Sheets. These costs consist of employee severance benefits, payments due under operating contracts, and other restructuring costs. In October 2016, the Company announced that it is proposing plans in Germany to reorganize and combine portions of its manufacturing, logistics and distribution networks within both of the Company’s segments. As required under German law, the Company has entered into a statutory co-determination process under which it will collaborate with the appropriate labor groups to jointly define the infrastructure and staffing adjustments necessary to support this initiative. The Company also initiated similar actions in other regions of the world. The Company estimates the cost of these initiatives to range up to $83.0 million, primarily for severance related benefits for employees, which is expected to be incurred as actions are implemented over the next two years. During 2015, the Company announced that it reorganized portions of its laboratory business and associated manufacturing capabilities within the Dental and Healthcare Consumables segment. During the year ended December 31, 2015, the Company recorded $37.3 million of costs that consist primarily of employee severance benefits related to these and other similar actions. Also during the year ended December 31, 2015, the Company recorded restructuring costs of $16.3 million within the Technologies segment that consists primarily of employee severance benefits related to the global efficiency initiative. These restructuring costs were offset by changes in estimates of $6.6 million, related to adjustments to the cost of initiatives in prior years. Other costs associated with 2015 plans of $7.4 million and $9.1 million were recorded in Cost of products sold and Selling, general and administrative expenses, respectfully, in the Consolidated Statements of Operations. During 2014, the Company initiated several restructuring plans primarily related to closing locations as a result of integration activities as the Company realigned certain implant and implant related businesses to better leverage the Company’s resources by reducing costs and obtaining operational efficiencies. These restructuring costs were offset by changes in estimates of $3.0 million, related to adjustments to the cost of initiatives in prior years. At December 31, 2016, the Company’s restructuring accruals were as follows:
The following table provides the cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment:
At December 31, 2015, the Company’s restructuring accruals were as follows:
The following table provides the cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment:
Other Costs For the year ended December 31, 2016, the Company recorded other costs of $2.3 million, which were primarily related to legal costs. For the year ended December 31, 2015, the Company recorded other costs of $3.3 million, which included $4.2 million of impairments of fixed assets and intangibles offset by income from legal settlements. For the year ended December 31, 2014, the Company recorded other costs of $1.2 million, which were primarily the result of legal settlements. |
FINANCIAL INSTRUMENTS AND DERIVATIVES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCIAL INSTRUMENTS AND DERIVATIVES | FINANCIAL INSTRUMENTS AND DERIVATIVES Derivative Instruments and Hedging Activities The Company’s activities expose it to a variety of market risks, which primarily include the risks related to the effects of changes in foreign currency exchange rates, interest rates and commodity prices. These financial exposures are monitored and managed by the Company as part of its overall risk management program. The objective of this risk management program is to reduce the volatility that these market risks may have on the Company’s operating results and equity. The Company employs derivative financial instruments to hedge certain anticipated transactions, firm commitments, or assets and liabilities denominated in foreign currencies. Additionally, the Company utilizes interest rate swaps to convert variable rate debt to fixed rate debt. Derivative Instruments Designated as Hedging Cash Flow Hedges The following table summarizes the notional amounts of cash flow hedges by derivative instrument type at December 31, 2016 and the notional amounts expected to mature during the next 12 months, with a discussion of the various cash flow hedges by derivative instrument type following the table:
Foreign Exchange Risk Management The Company uses a layered hedging program to hedge select anticipated foreign currency cash flows to reduce volatility in both cash flows and reported earnings of the consolidated Company. The Company accounts for the designated foreign exchange forward contracts as cash flow hedges. As a result, the Company records the fair value of the contracts primarily through AOCI based on the tested effectiveness of the foreign exchange forward contracts. The Company measures the effectiveness of cash flow hedges of anticipated transactions on a spot-to-spot basis rather than on a forward-to-forward basis. Accordingly, the spot-to-spot change in the derivative fair value will be deferred in AOCI and released and recorded in the Consolidated Statements of Operations in the same period that the hedged transaction is recorded. The time value component of the fair value of the derivative is deemed ineffective and is reported currently in Other expense (income), net in the Consolidated Statements of Operations in the period which it is applicable. Any cash flows associated with these instruments are included in cash from operating activities in the Consolidated Statements of Cash Flows. The Company hedges various currencies, primarily in euros, Swedish kronor, Canadian dollars, British pounds, Swiss francs, Japanese yen and Australian dollars. These foreign exchange forward contracts generally have maturities up to 18 months and the counterparties to the transactions are typically large international financial institutions. Interest Rate Risk Management The Company uses interest rate swaps to convert a portion of its variable interest rate debt to fixed interest rate debt. At December 31, 2016, the Company has one significant exposure hedged with interest rate contracts. The exposure is hedged with derivative contracts having notional amounts totaling 12.6 billion Japanese yen, which effectively converts the underlying variable interest rate debt facility to a fixed interest rate of 0.9% for a term of five-years ending September 2019. Another exposure hedged with derivative contracts had a notional amount of 65.0 million Swiss francs, and effectively converted the underlying variable interest rate of a Swiss franc denominated loan to a fixed interest rate of 1.8% for a term of five-years, that matured in September 2016. The Company enters into interest rate swap contracts infrequently as they are only used to manage interest rate risk on long-term debt instruments and not for speculative purposes. Any cash flows associated with these instruments are included in cash from operating activities in the Consolidated Statements of Cash Flows. Commodity Risk Management The Company enters into precious metal commodity swap contracts to effectively fix certain variable raw material costs typically for up to 18 months. These swaps are used to stabilize the cost of components used in the production of certain products. The Company generally accounts for the commodity swaps as cash flow hedges. As a result, the Company records the fair value of the contracts primarily through AOCI based on the tested effectiveness of the commodity swaps. The Company measures the effectiveness of cash flow hedges of anticipated transactions on a spot-to-spot basis rather than on a forward-to-forward basis. Accordingly, the spot-to-spot change in the derivative fair value will be deferred in AOCI and released and recorded in the Consolidated Statements of Operations in the same period that the hedged transaction is recorded. The time value component of the fair value of the derivative is deemed ineffective and is reported currently in Interest expense in the Consolidated Statements of Operations in the period which it is applicable. Any cash flows associated with these instruments are included in cash from operating activities in the Consolidated Statements of Cash Flows. The following tables summarize the amount of gains (losses) recorded in AOCI in the Consolidated Balance Sheets and income (expense) in the Company’s Consolidated Statements of Operations related to all cash flow hedges for the years ended December 31, 2016, 2015 and 2014:
Overall, the derivatives designated as cash flow hedges are considered to be highly effective. At December 31, 2016, the Company expects to reclassify $1.0 million of deferred net gains on cash flow hedges recorded in AOCI in the Consolidated Statements of Operations during the next 12 months. The term over which the Company is hedging exposures to variability of cash flows (for all forecasted transactions, excluding interest payments on variable interest rate debt) is typically 18 months. For the rollforward of derivative instruments designated as cash flow hedges in AOCI see Note 3, Comprehensive Income. Hedges of Net Investments in Foreign Operations The Company has significant investments in foreign subsidiaries the most significant of which are denominated in euros, Swiss francs, Japanese yen and Swedish kronor. The net assets of these subsidiaries are exposed to volatility in currency exchange rates. To hedge a portion of this exposure the Company employs both derivative and non-derivative financial instruments. The derivative instruments consist of foreign exchange forward contracts and cross currency basis swaps. The non-derivative instruments consist of foreign currency denominated debt held at the parent company level. Translation gains and losses related to the net assets of the foreign subsidiaries are offset by gains and losses in derivative and non-derivative financial instruments designated as hedges of net investments, which are included in AOCI. Any cash flows associated with these instruments are included in investing activities in the Consolidated Statements of Cash Flows except for derivative instruments that include an other-than-insignificant financing element, in which case all cash flows will be classified as financing activities in the Consolidated Statements of Cash Flows. The following table summarizes the notional amounts of hedges of net investments by derivative instrument type at December 31, 2016 and the notional amounts expected to mature during the next 12 months:
The fair value of the foreign exchange forward contracts and cross currency basis swaps is the estimated amount the Company would receive or pay at the reporting date, taking into account the effective interest rates, cross currency swap basis rates and foreign exchange rates. The effective portion of the change in the value of these derivatives is recorded in AOCI, net of tax effects. The following tables summarize the amount of gains (losses) recorded in AOCI in the Consolidated Balance Sheets and income (expense) in the Company’s Consolidated Statements of Operations related to the hedges of net investments for the year ended December 31, 2016, 2015 and 2014:
Fair Value Hedges The Company used interest rate swaps to convert a portion of its fixed interest rate debt to variable interest rate debt. The Company had U.S. dollar denominated interest rate swaps with an initial total notional value of $150.0 million to effectively convert the underlying fixed interest rate of 4.1% on the Company’s $250.0 million private placement notes (“PPN”) to variable rate, the debt and interest rate swap matured in February 2016. The notional value of the swaps declined proportionately as portions of the PPN matured. These interest rate swaps were designated as fair value hedges of the interest rate risk associated with the hedged portion of the fixed rate PPN. Accordingly, the Company carried the portion of the hedged debt at fair value, with the change in debt and swaps offsetting each other in the Consolidated Statements of Operations. Any cash flows associated with these instruments were included in operating activities in the Consolidated Statements of Cash Flows. The following tables summarize the amount of income (expense) recorded in the Company’s Consolidated Statements of Operations related to the hedges of fair value for the years ended December 31, 2016, 2015 and 2014:
Derivative Instruments Not Designated as Hedges The Company enters into derivative instruments with the intent to partially mitigate the foreign exchange revaluation risk associated with recorded assets and liabilities that are denominated in a non-functional currency. The gains and losses on these derivative transactions offset the gains and losses generated by the revaluation of the underlying non-functional currency balances and are recorded in Other expense (income), net in the Consolidated Statements of Operations. The Company primarily uses foreign exchange forward contracts and cross currency basis swaps to hedge these risks. Any cash flows associated with the foreign exchange forward contracts and interest rate swaps not designated as hedges are included in cash from operating activities in the Consolidated Statements of Cash Flows. Any cash flows associated with the cross currency basis swaps not designated as hedges are included in investing activities in the Consolidated Statements of Cash Flows except for derivative instruments that include an other-than-insignificant financing element, in which case the cash flows will be classified as financing activities in the Consolidated Statements of Cash Flows. The following tables summarize the aggregate notional amounts of the Company’s economic hedges not designated as hedges by derivative instrument types at December 31, 2016 and the notional amounts expected to mature during the next 12 months:
The Company had a Swiss franc denominated cross currency basis swaps to offset an intercompany Swiss franc note receivable at a U.S. dollar functional entity. The hedge matured during the second quarter to coincide with the repayment of the note. The following table summarizes the amounts of gains (losses) recorded in the Company’s Consolidated Statements of Operations related to the economic hedges not designated as hedging for the years ended December 31, 2016, 2015 and 2014:
Consolidated Balance Sheets Location of Derivative Fair Values The following tables summarize the fair value and consolidated balance sheet location of the Company’s derivatives at December 31, 2016 and December 31, 2015:
Balance Sheet Offsetting Substantially all of the Company’s derivative contracts are subject to netting arrangements, whereby the right to offset occurs in the event of default or termination in accordance with the terms of the arrangements with the counterparty. While these contracts contain the enforceable right to offset through netting arrangements with the same counterparty, the Company elects to present them on a gross basis in the Consolidated Balance Sheets. Offsetting of financial assets and liabilities under netting arrangements at December 31, 2016:
Offsetting of financial assets and liabilities under netting arrangements at December 31, 2015:
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FAIR VALUE MEASUREMENT |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT | FAIR VALUE MEASUREMENT The Company records financial instruments at fair value with unrealized gains and losses related to certain financial instruments reflected in AOCI in the Consolidated Balance Sheets. In addition, the Company has recognized certain liabilities at fair value. The Company applies the market approach for recurring fair value measurements. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value of financial instruments is determined by reference to various market data and other valuation techniques as appropriate. The Company believes the carrying amounts of cash and cash equivalents, accounts receivable (net of allowance for doubtful accounts), prepaid expenses and other current assets, accounts payable, accrued liabilities, income taxes payable and notes payable approximate fair value due to the short-term nature of these instruments. The Company estimated the fair value and carrying value of its total long-term debt, including current portion, was $1,525.7 million and $1,522.2 million, respectively, at December 31, 2016. At December 31, 2015, the Company estimated the fair value and carrying value was $1,160.7 million and $1,150.2 million, respectively. The interest rate on the $450.0 million Senior Notes is a fixed rate of 4.1% and the fair value is based on interest rates at December 31, 2016. For additional details on interest rates of long term debt, please see Note 12, Financing Arrangements. The variable interest rate on the Japanese yen term loan is consistent with current market conditions, therefore the fair value approximates the loan’s carrying value. The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at December 31, 2016 and 2015, which are classified as Cash and cash equivalents, Prepaid expenses and other current assets, Other noncurrent assets, net, Accrued liabilities, and Other noncurrent liabilities in the Consolidated Balance Sheets. Financial assets and liabilities that are recorded at fair value as of the balance sheet date are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Derivative valuations are based on observable inputs to the valuation model including interest rates, foreign currency exchange rates, future commodities prices and credit risks. The Company utilizes commodity contracts, certain interest rates swaps and foreign exchange forward contracts that are considered cash flow hedges. In addition, the Company at times employs certain cross currency interest rate swaps and forward exchange contracts that are considered hedges of net investment in foreign operations. Both types of designated derivative instruments are further discussed in Note 17, Financial Instruments and Derivatives. The Company’s Level 3 liabilities at December 31, 2016 are related to earn-out obligations on prior acquisitions that were assumed as part of the merger with Sirona. The following table presents a reconciliation of the Company’s Level 3 holdings measured at fair value on a recurring basis using unobservable inputs:
There were no additional purchases, issuances or transfers of Level 3 financial instruments in 2016 and 2015. |
COMMITMENTS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases The Company leases automobiles machinery, equipment and certain office, warehouse and manufacturing facilities under non-cancelable leases. The leases generally require the Company to pay insurance, taxes and other expenses related to the leased property. Total rental expense for all operating leases was $33.3 million, $30.4 million and $37.4 million for 2016, 2015 and 2014, respectively. Rental commitments, principally for real estate (exclusive of taxes, insurance and maintenance), automobiles and office equipment are as follows:
Litigation On June 18, 2004, Marvin Weinstat, DDS and Richard Nathan, DDS filed a class action suit in San Francisco County, California alleging that the Company misrepresented that its Cavitron® ultrasonic scalers are suitable for use in oral surgical procedures. The Complaint sought a recall of the product and refund of its purchase price to dentists who have purchased it for use in oral surgery. The Court certified the case as a class action in June 2006 with respect to the breach of warranty and unfair business practices claims. The certified class is defined as California dental professionals who, at any time during the period beginning June 18, 2000 through September 14, 2012, purchased and used one or more Cavitron® ultrasonic scalers for the performance of oral surgical procedures on their patients, which Cavitrons® were accompanied by Directions for Use that “Indicated” Cavitron® use for “periodontal debridement for all types of periodontal disease.” The case went to trial in September 2013, and on January 22, 2014, the San Francisco Superior Court issued its decision in the Company’s favor, rejecting all of the plaintiffs’ claims. The plaintiffs have appealed the Superior Court’s decision, and the appeal is now pending. The Company is defending against this appeal. On December 12, 2006, Carole Hildebrand, DDS, and Robert Jaffin, DDS, filed a Complaint in the Eastern District of Pennsylvania (the Plaintiffs subsequently added Dr. Mitchell Goldman as a named class representative). The same law firm that filed the Weinstat case in California filed this case. The Complaint asserts putative class action claims on behalf of dentists located in New Jersey and Pennsylvania. The Complaint asserts that the Company’s Cavitron® ultrasonic scaler was negligently designed and sold in breach of contract and warranty arising from alleged misrepresentations about the potential uses of the product because the Company cannot assure the delivery of potable or sterile water through the device. The Court granted the Company’s Motion for Dismissal of the case for lack of jurisdiction. Following that dismissal, the plaintiffs filed a second complaint under the name of Dr. Hildebrand’s corporate practice, Center City Periodontists, asserting the same allegations. The plaintiffs moved to have the case certified as a class action and the Company objected. The Court granted the Company’s Motion to Dismiss plaintiffs’ New Jersey Consumer Fraud and negligent design claims, leaving only a breach of express warranty claim. The Court subsequently denied the Company’s Motion for Summary Judgment on the express warranty claim. The Court held hearings during 2016 on plaintiffs’ class certification motion. The Court has not scheduled further hearings in the matter and the Company is awaiting a ruling on the class certification motion by the Court. On January 20, 2014, the Company was served with a qui tam complaint filed by two former and one current employee of the Company under the Federal False Claims Act and equivalent state and city laws. The lawsuit was previously under seal in the U.S. District Court for the Eastern District of Pennsylvania. The complaint alleges, among other things, that the Company engaged in various illegal marketing activities, and thereby caused dental and other healthcare professionals to file false claims for reimbursement with federal and state governments. The relators seek injunctive relief, fines, treble damages, and attorneys’ fees and costs. On January 27, 2014, the United States filed with the Court a notice that it had elected not to intervene in the qui tam action at this time. The United States’ notice indicated that the named state and city co-plaintiffs had authorized the United States to communicate to the Court that they also had decided not to intervene at this time. These non-intervention decisions do not prevent the qui tam relators from litigating this action, and the United States and/or the named states and/or cities may seek to intervene in the action at a later time. On September 4, 2014, the Company’s motion to dismiss the complaint was granted in part and denied in part. The Company filed a motion for summary judgment in December 2015. In April 2016, the Court granted the Company’s motion for summary judgment, which disposes of all remaining claims against the Company in the matter. The plaintiffs filed a notice of appeal in May 2016 and the matter has been assigned by the Court of Appeals for mediation. The Company will continue to vigorously defend itself. The Company does not believe a loss is probable related to the above litigation. Further, a reasonable estimate of a possible range of loss cannot be made. In the event that one or more of these matters is unfavorably resolved, it is possible the Company’s results from operations, financial position or liquidity could be materially impacted. In 2012, the Company received subpoenas from the U. S. Attorney’s Office for the Southern District of Indiana (the “USAO”) and from the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”) requesting documents and information related to compliance with export controls and economic sanctions regulations by certain of its subsidiaries. The Company has voluntarily contacted OFAC and the Bureau of Industry and Security of the U. S. Department of Commerce (“BIS”), in connection with these matters as well as regarding compliance with export controls and economic sanctions regulations by certain other business units of the Company identified in connection with an internal review by the Company. On September 1, 2016, the Company entered into an extension of the tolling agreement originally entered into in August 2014, such that the statute of limitations is now tolled until May 1, 2017. The Company is cooperating with the USAO, OFAC and BIS with respect to these matters. At this stage of the inquiries, the Company is unable to predict the ultimate outcome of these matters or what impact, if any, the outcome of these matters might have on the Company’s consolidated financial position, results of operations or cash flows. Violations of export control or economic sanctions laws or regulations could result in a range of governmental enforcement actions, including fines or penalties, injunctions and/or criminal or other civil proceedings, which actions could have a material adverse effect on the Company’s reputation, business, financial condition and results of operations. At this time, no claims have been made against the Company. In addition to the matters disclosed above, the Company is, from time to time, subject to a variety of litigation and similar proceedings incidental to its business. These legal matters primarily involve claims for damages arising out of the use of the Company’s products and services and claims relating to intellectual property matters including patent infringement, employment matters, tax matters, commercial disputes, competition and sales and trading practices, personal injury and insurance coverage. The Company may also become subject to lawsuits as a result of past or future acquisitions or as a result of liabilities retained from, or representations, warranties or indemnities provided in connection with, divested businesses. Some of these lawsuits may include claims for punitive and consequential, as well as compensatory damages. Based upon the Company’s experience, current information and applicable law, it does not believe that these proceedings and claims will have a material adverse effect on its consolidated results of operations, financial position or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or liquidity. While the Company maintains general, product, property, workers’ compensation, automobile, cargo, aviation, crime, fiduciary and directors’ and officers’ liability insurance up to certain limits that cover certain of these claims, this insurance may be insufficient or unavailable to cover such losses. In addition, while the Company believes it is entitled to indemnification from third parties for some of these claims, these rights may also be insufficient or unavailable to cover such losses. Purchase and Other Commitments From time to time, the Company enters into long-term inventory purchase commitments with minimum purchase requirements for raw materials and finished goods to ensure the availability of products for production and distribution. These commitments may have a significant impact on levels of inventory maintained by the Company. |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | QUARTERLY FINANCIAL INFORMATION (UNAUDITED) DENTSPLY SIRONA INC. Quarterly Financial Information (Unaudited) (in millions, except per share amounts)
(a) Includes the results of operations for Sirona for the period February 29, 2016 through March 31, 2016 (b) During the March 31, 2016 quarter, the Company issued 101.8 million shares related to the Merger. As a result, the calculation of the weighted average share count was lower in the March 31, 2016 quarter as compared to the weighted average share count for the year ended December 31, 2016. |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS |
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Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II DENTSPLY SIRONA INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 and 2014
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Dec. 31, 2016 | |||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||
Use Of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. |
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Principles of Consolidation | The consolidated financial statements include the accounts of the Company. All significant intercompany accounts and transactions are eliminated in consolidation. Investments in non-consolidated affiliates (20-50 percent owned companies, joint ventures and partnerships as well as less than 20 percent ownership positions where the Company maintains significant influence over the subsidiary) are accounted for using the equity method. |
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Cash and Cash Equivalents | Cash and cash equivalents include deposits with banks as well as highly liquid time deposits with maturities at the date of purchase of ninety days or less. |
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Short-term Investments | Short-term investments are highly liquid time deposits with original maturities at the date of purchase greater than ninety days and with remaining maturities of one year or less. |
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Accounts and Notes Receivable-Trade | The Company sells dental and certain medical products through a worldwide network of distributors and directly to end users. For customers on credit terms, the Company performs ongoing credit evaluation of those customers’ financial condition and generally does not require collateral from them. The Company establishes allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company records a provision for doubtful accounts, which is included in Selling, general and administrative expenses in the Consolidated Statements of Operations. |
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Inventories | Inventories are stated at the lower of cost or market. At December 31, 2016 and 2015, the cost of $8.6 million and $8.1 million, respectively, of inventories was determined by the last-in, first-out (“LIFO”) method. The cost of other inventories was determined by the first-in, first-out (“FIFO”) or average cost methods. If the FIFO method had been used to determine the cost of LIFO inventories, the amounts at which net inventories are stated would be higher than reported at December 31, 2016 and 2015 by $6.8 million and $6.6 million, respectively. The Company establishes reserves for inventory estimated to be obsolete or unmarketable equal to the difference between the cost of inventory and estimated market value based upon assumptions about future demand and market conditions. |
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Valuation of Goodwill and Other Long-Lived Assets | Assessment of the potential impairment of goodwill and other long-lived assets is an integral part of the Company’s normal ongoing review of operations. Testing for potential impairment of these assets is significantly dependent on assumptions and reflects management’s best estimates at a particular point in time. The dynamic economic environments in which the Company’s businesses operate and key economic and business assumptions with respect to projected selling prices, increased competition and introductions of new technologies can significantly affect the outcome of impairment tests. Estimates based on these assumptions may differ significantly from actual results. Changes in factors and assumptions used in assessing potential impairments can have a significant impact on the existence and magnitude of impairments, as well as the time at which such impairments are recognized. If there are unfavorable changes in these assumptions, future cash flows, a key variable in assessing the impairment of these assets, may decrease and as a result the Company may be required to recognize impairment charges. Future changes in the environment and the economic outlook for the assets being evaluated could also result in additional impairment charges being recognized. The following information outlines the Company’s significant accounting policies on long-lived assets by type. Goodwill Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired and liabilities assumed in a business combination. Goodwill is not amortized. Goodwill is tested for impairment annually, during the Company’s second quarter, or when indications of potential impairment exist. The Company monitors for the existence of potential impairment throughout the year. This impairment assessment includes an evaluation of various reporting units, which is an operating segment or one reporting level below the operating segment. The Company performs impairment tests using a fair value approach. The Company compares the fair value of each reporting unit to its carrying amount to determine if there is potential goodwill impairment. If impairment is identified on goodwill, the resulting charge is determined by recalculating goodwill through a hypothetical purchase price allocation of the fair value and reducing the current carrying value to the extent it exceeds the recalculated goodwill. The Company’s fair value approach involves using a discounted cash flow model with market-based support as its valuation technique to measure the fair value for its reporting units. The discounted cash flow model uses five-year forecasted cash flows plus a terminal value based on a multiple of earnings. In addition, the Company applies gross profit and operating expense assumptions consistent with its historical trends. The total cash flows were discounted based on market participant data, which included the Company’s weighted-average cost of capital. The Company considered the current market conditions when determining its assumptions. Lastly, the Company reconciled the aggregate fair values of its reporting units to its market capitalization, which included a reasonable control premium based on market conditions. Additional information related to the testing for goodwill impairment is provided in Note 9 Goodwill and Intangible Assets. Indefinite-Lived Intangible Assets Indefinite-lived intangible assets consist of tradenames and are not subject to amortization. Valuations of identifiable intangibles assets acquired are based on information and assumptions available at the time of acquisition, using income and market model approaches to determine fair value. In-process research and development assets are not subject to amortization until the product associated with the research and development is substantially complete and is a viable product. At that time, the useful life to amortize the intangible asset is determined by identifying the period in which substantially all the cash flows are expected to be generated and the asset is moved to definite-lived. These assets are reviewed for impairment annually or whenever events or circumstances suggest that the carrying amount of the asset may not be recoverable. The Company uses an income approach, more specifically a relief from royalty method. Significant management judgment is necessary to determine key assumptions, including projected revenue, royalty rates and appropriate discount rates. Royalty rates used are consistent with those assumed for the original purchase accounting valuation. Other assumptions are consistent with those applied to goodwill impairment testing. If the carrying value exceeds the fair value, an impairment loss in the amount equal to the excess is recognized. Identifiable Definite-Lived Intangible Assets Identifiable definite-lived intangible assets, which primarily consist of patents, trademarks, brand names, non-compete agreements and licensing agreements, are amortized on a straight-line basis over their estimated useful lives. Valuations of identifiable intangibles assets acquired are based on information and assumptions available at the time of acquisition, using income and market model approaches to determine fair value. These assets are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset may not be recoverable. The Company closely monitors all intangible assets including those related to new and existing technologies for indicators of impairment as these assets have more risk of becoming impaired. Impairment is based upon an initial evaluation of the identifiable undiscounted cash flows. If the initial evaluation identifies a potential impairment, a fair value is determined by using a discounted cash flows valuation. If impaired, the resulting charge reflects the excess of the asset’s carrying cost over its fair value. |
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Property, Plant and Equipment | Property, plant and equipment are stated at cost, net of accumulated depreciation. Except for leasehold improvements, depreciation for financial reporting purposes is computed by the straight-line method over the following estimated useful lives: buildings - generally 40 years and machinery and equipment - 4 to 15 years. The cost of leasehold improvements is amortized over the shorter of the estimated useful life or the term of the lease. Maintenance and repairs are expensed as incurred to the statement of operations; replacements and major improvements are capitalized. These asset groups are reviewed for impairment whenever events or circumstances suggest that the carrying amount of the asset group may not be recoverable. Impairment is based upon an evaluation of the identifiable undiscounted cash flows. If impaired, the resulting charge reflects the excess of the asset group’s carrying cost over its fair value. |
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Derivative Financial Instruments | The Company records all derivative instruments on the consolidated balance sheet at fair value and changes in fair value are recorded each period in the consolidated statements of operations or accumulated other comprehensive income (“AOCI”). The Company classifies derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less. The Company has elected to classify the cash flow from derivative instruments in the same category as the cash flows from the items being hedged. Should the Company enter into a derivative instrument that included an other-than-insignificant financing element then all cash flows will be classified as financing activities in the Consolidated Statements of Cash Flows as required by US GAAP. The Company employs derivative financial instruments to hedge certain anticipated transactions, firm commitments, and assets and liabilities denominated in foreign currencies. Additionally, the Company utilizes interest rate swaps to convert floating rate debt to fixed rate. |
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Pension and Other Postretirement Benefits | Some of the employees of the Company and its subsidiaries are covered by government or Company-sponsored defined benefit plans. Many of the employees have available to them defined contribution plans. Additionally, certain union and salaried employee groups in the United States are covered by postemployment healthcare plans. Costs for Company-sponsored defined benefit and postemployment benefit plans are based on expected return on plan assets, discount rates, employee compensation increase rates and health care cost trends. Expected return on plan assets, discount rates and health care cost trend assumptions are particularly important when determining the Company’s benefit obligations and net periodic benefit costs associated with postemployment benefits. Changes in these assumptions can impact the Company’s earnings before income taxes. In determining the cost of postemployment benefits, certain assumptions are established annually to reflect market conditions and plan experience to appropriately reflect the expected costs as actuarially determined. These assumptions include medical inflation trend rates, discount rates, employee turnover and mortality rates. The Company predominantly uses liability durations in establishing its discount rates, which are observed from indices of high-grade corporate bond yields in the respective economic regions of the plans. The expected return on plan assets is the weighted average long-term expected return based upon asset allocations and historic average returns for the markets where the assets are invested, principally in foreign locations. The Company reports the funded status of its defined benefit pension and other postemployment benefit plans on its consolidated balance sheets as a net liability or asset. |
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Accruals for Self-Insured Losses | The Company maintains insurance for certain risks, including workers’ compensation, general liability, product liability and vehicle liability, and is self-insured for employee related healthcare benefits. The Company accrues for the expected costs associated with these risks by considering historical claims experience, demographic factors, severity factors and other relevant information. Costs are recognized in the period the claim is incurred, and the financial statement accruals include an estimate of claims incurred but not yet reported. The Company has stop-loss coverage to limit its exposure to any significant exposure on a per claim basis. |
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Litigation | The Company and its subsidiaries are from time to time parties to lawsuits arising out of their respective operations. The Company records liabilities when a loss is probable and can be reasonably estimated. These estimates are typically in the form of ranges, and the Company records the liabilities at the low point of the ranges, when no other point within the ranges are a better estimate of the probable loss. The ranges established by management are based on analysis made by internal and external legal counsel who considers information known at the time. If the Company determines a liability to be only reasonably possible, it considers the same information to estimate the possible exposure and discloses any material potential liability. These loss contingencies are monitored regularly for a change in fact or circumstance that would require an accrual adjustment. The Company believes it has estimated liabilities for probable losses appropriately in the past; however, the unpredictability of litigation and court decisions could cause a liability to be incurred in excess of estimates. Legal costs related to these lawsuits are expensed as incurred. |
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Foreign Currency Translation | The functional currency for foreign operations, except for those in highly inflationary economies, generally has been determined to be the local currency. Assets and liabilities of foreign subsidiaries are translated at foreign exchange rates on the balance sheet date; revenue and expenses are translated at the average year-to-date foreign exchange rates. The effects of these translation adjustments are reported in Equity within AOCI on the Consolidated Balance Sheets. During the year ended December 31, 2016, the Company had gains of $15.6 million on its loans designated as hedges of net investments and translation losses of $109.4 million. During the year ended December 31, 2015, the Company had gains of $1.7 million on its loans designated as hedges of net investments and translation losses of $187.2 million. Foreign exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved and remeasurement adjustments in countries with highly inflationary economies are included in income. |
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Revenue Recognition | Revenue, net of related discounts and allowances, is recognized when the earnings process is complete. This occurs when products are shipped to or received by the customer in accordance with the terms of the agreement, title and risk of loss have been transferred, collectibility is reasonably assured and pricing is fixed or determinable. Net sales include shipping and handling costs collected from customers in connection with the sale. Sales taxes, value added taxes and other similar types of taxes collected from customers in connection with the sale are recorded by the Company on a net basis and are not included in the Consolidated Statement of Operations. The Company offers discounts to its customers and distributors if certain conditions are met. Discounts are primarily based on the volume of products purchased or targeted to be purchased by the individual customer or distributor. Discounts are deducted from revenue at the time of sale or when the discount is offered, whichever is later. The Company estimates volume discounts based on the individual customer’s historical and estimated future product purchases. Returns of products, excluding warranty related returns, are infrequent and insignificant. Certain of the Company’s customers are offered cash rebates based on targeted sales increases. Estimates of rebates are based on the forecasted performance of the customer and their expected level of achievement within the rebate programs. In accounting for these rebate programs, the Company records an accrual as a reduction of net sales as sales take place over the period the rebate is earned. The Company updates the accruals for these rebate programs as actual results and updated forecasts impact the estimated achievement for customers within the rebate programs. A portion of the Company’s net sales is comprised of sales of precious metals generated through its precious metal dental alloy product offerings. As the precious metal content of the Company’s sales is largely a pass-through to customers, the Company uses its cost of precious metal purchased as a proxy for the precious metal content of sales, as the precious metal content of sales is not separately tracked and invoiced to customers. The Company believes that it is reasonable to use the cost of precious metal content purchased in this manner since precious metal alloy sale prices are typically adjusted when the prices of underlying precious metals change. |
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Revenue Recognition related to Multiple Deliverables | Revenue Recognition related to Multiple Deliverables Sales revenue arrangements can consist of multiple deliverables of its product and service offerings. Additionally, certain products offerings, primarily dental technology products, may contain embedded software that functions together with the product to deliver the product’s essential functionality. Amounts received from customers in advance of product shipment are classified as deferred income until the revenue can be recognized in accordance with the Company’s revenue recognition policy.
After separating the elements into their specific units of accounting, total arrangement consideration is allocated to each unit of accounting according to the nature of the revenue as described above and application of the relative selling price method. Total recognized revenue is limited to the amount not contingent upon future transactions. |
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Cost of Products Sold | Cost of products sold represents costs directly related to the manufacture and distribution of the Company’s products. Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling, warehousing and the depreciation of manufacturing, warehousing and distribution facilities. Overhead and related expenses include salaries, wages, employee benefits, utilities, lease costs, maintenance and property taxes. |
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Warranties | The Company provides warranties on certain equipment products. Estimated warranty costs are accrued when sales are made to customers. Estimates for warranty costs are based primarily on historical warranty claim experience. Warranty costs are included in Cost of products sold in the Consolidated Statements of Operations. |
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Selling, General and Administrative Expenses | Selling, general and administrative expenses represent costs incurred in generating revenues and in managing the business of the Company. Such costs include advertising and other marketing expenses, salaries, employee benefits, incentive compensation, research and development, travel, office expenses, lease costs, amortization of capitalized software and depreciation of administrative facilities. Advertising cost are expensed as incurred. |
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Research and Development Costs | Research and development (“R&D”) costs relate primarily to internal costs for salaries and direct overhead expenses. In addition, the Company contracts with outside vendors to conduct R&D activities. All such R&D costs are charged to expense when incurred. The Company capitalizes the costs of equipment that have general R&D uses and expenses such equipment that is solely for specific R&D projects. The depreciation expense related to this capitalized equipment is included in the Company’s R&D costs. |
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Stock Compensation | The Company recognizes the compensation cost relating to stock-based payment transactions in the financial statements. The cost of stock-based payment transactions is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity awards). The compensation cost is only recognized for the portion of the awards that are expected to vest. |
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Income Taxes | The Company’s tax expense includes U.S. and international income taxes plus the provision for U.S. taxes on undistributed earnings of international subsidiaries not deemed to be permanently invested. Tax credits and other incentives reduce tax expense in the year the credits are claimed. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effect of such temporary differences is reported as deferred income taxes. Deferred tax assets are recognized if it is more likely than not that the assets will be realized in future years. The Company establishes a valuation allowance for deferred tax assets for which realization is not likely. The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company recognizes in the financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. |
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Earnings Per Share | Basic earnings per share are calculated by dividing net earnings by the weighted average number of shares outstanding for the period. Diluted earnings per share is calculated by dividing net earnings by the weighted average number of shares outstanding for the period, adjusted for the effect of an assumed exercise of all dilutive options outstanding at the end of the period. |
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Business Acquisitions | The Company acquires businesses as well as partial interests in businesses. Acquired businesses are accounted for using the acquisition method of accounting which requires the Company to record assets acquired and liabilities assumed at their respective fair values with the excess of the purchase price over estimated fair values recorded as goodwill. The assumptions made in determining the fair value of acquired assets and assumed liabilities as well as asset lives can materially impact the results of operations. The Company obtains information during due diligence and through other sources to establish respective fair values. Examples of factors and information that the Company uses to determine the fair values include: tangible and intangible asset evaluations and appraisals; evaluations of existing contingencies and liabilities and product line information. If the initial valuation for an acquisition is incomplete by the end of the quarter in which the acquisition occurred, the Company will record a provisional estimate in the financial statements. The provisional estimate will be finalized as soon as information becomes available, but will only occur up to one year from the acquisition date. |
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Noncontrolling Interests | The Company reports noncontrolling interest (“NCI”) in a subsidiary as a separate component of Equity in the Consolidated Balance Sheets. Additionally, the Company reports the portion of net income (loss) and comprehensive income (loss) attributed to the Company and NCI separately in the Consolidated Statements of Operations. The Company also includes a separate column for NCI in the Consolidated Statements of Changes in Equity. |
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Segment Reporting | The Company has numerous operating businesses covering a wide range of products and geographic regions, primarily serving the professional dental market and to a lesser extent the consumable medical device market. Professional dental products and equipment represented approximately 92%, 88% and 88% of sales for each of the years ended 2016, 2015 and 2014, respectively. The Company has two reportable segments and a description of the activities within these segments is included in Note 5, Segment and Geographic Information. |
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Fair Value Measurement | Recurring Basis The Company records certain financial assets and liabilities at fair value in accordance with the accounting guidance, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishes a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring financial instruments at fair value. The three broad levels defined by the fair value hierarchy are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. Level 2 - Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable reported date. The nature of these financial instruments include, derivative instruments whose fair value have been derived using a model where inputs to the model are directly observable in the market, or can be derived principally from, or corroborated by observable market data. Level 3 - Instruments that have little to no pricing observability as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The degree of judgment utilized in measuring the fair value of certain financial assets and liabilities generally correlates to the level of pricing observability. Pricing observability is impacted by a number of factors, including the type of financial instrument. Financial assets and liabilities with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of pricing observability and a lesser degree of judgment utilized in measuring fair value. Conversely, financial assets and liabilities rarely traded or not quoted will generally have less, or no pricing observability and a higher degree of judgment utilized in measuring fair value. The Company primarily applies the market approach for recurring fair value measurements and endeavors to utilize the best available information. Accordingly, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Additionally, the Company considers its credit risks and its counterparties’ credit risks when determining the fair values of its financial assets and liabilities. The Company has presented the required disclosures in Note 18, Fair Value Measurement. Non-Recurring Basis When events or circumstances require an asset or liability to be fair valued that otherwise is generally recorded based on another valuation method, such as, net realizable value, the Company will utilize the valuation techniques described above. |
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New Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” that seeks to provide a single, comprehensive revenue recognition model for all contracts with customers that improve comparability within industries, across industries and across capital markets. Under this standard, an entity should recognize revenue for the transfer of goods or services equal to the amount it expects to be entitled to receive for those goods or services. Enhanced disclosure requirements regarding the nature, timing and uncertainty of revenue and related cash flows exist. To assist entities in applying the standard, a five step model for recognizing and measuring revenue from contracts with customers has been introduced. Entities have the option to apply the new guidance retrospectively to each prior reporting period presented (full retrospective approach) or retrospectively with a cumulative effect adjustment to retained earnings for initial application of the guidance at the date of initial adoption (modified retrospective method). On July 9, 2015, the FASB issued ASU No. 2015-14, deferring the effective date by one year to annual reporting periods beginning after December 15, 2017. Early adoption is permitted. In April 2016, the FASB issued ASU No. 2016-10, which clarifies the “identifying performance obligations and licensing implementations guidance” aspects of Topic 606. In May 2016, the FASB issued ASU No. 2016-11, which amends and or rescinds certain aspects of the Accounting Standards Codification (“ASC”) to reflect the requirements under Topic 606. Additionally, the FASB issued ASU No. 2016-12, which clarifies the criteria for assessing collectibility, permits an entity to elect an accounting policy to exclude from the transaction price amounts collected from customers for all sales taxes, and provides a practical expedient that permits an entity to reflect the aggregate effect of all contract modifications that occur before the beginning of the earliest period presented in accordance with Topic 606. In December 2016, the FASB issued ASU No. 2016-20, which clarifies several additional aspects of Topic 606 including contract modifications and performance obligations. The Company will adopt these accounting standards on January 1, 2018. The Company has completed its analysis of revenue areas that will be impacted by the adoption of this standard. The primary areas affected are the Company’s promotional and customer loyalty programs. The Company is currently gathering and assessing the financial impact this will have on the financial position, results of operations, cash flows and disclosures. The Company is also in the process of implementing changes to systems, processes and internal controls to meet the standard update to reporting and disclosure requirements. The Company has not made a decision on the transition method of adoption. In January 2015, the FASB issued ASU No. 2015-01, “Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items”. This newly issued accounting standard eliminates from generally accepted accounting principles the concept of Extraordinary items, events or transactions that are unusual in nature and occur infrequently. The amendments in this update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2015. The Company adopted this accounting standard in the quarter ended March 31, 2016. The adoption of this standard did not materially impact the Company’s financial position or results of operations. In July 2015, the FASB issued ASU No. 2015-11, “Simplifying the Measurement of Inventory.” This newly issued accounting standard requires that an entity measure inventory at the lower of cost or net realizable value, as opposed to the lower of cost or market value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Excluded from this update are the Last In First Out (“LIFO”) and retail inventory methods of accounting for inventory. The amendments in this standard are effective for fiscal years beginning after December 15, 2016 and for interim periods within fiscal years beginning after December 15, 2017. Prospective application is required for presentation purposes. The adoption of this standard did not materially impact the Company’s financial position or results of operations. In September 2015, the FASB issued ASU No. 2015-16, “Simplifying Accounting for Measurement Period Adjustments.” This accounting standard seeks to simplify the accounting related to business combinations. Current US GAAP requires retrospective adjustment for provisional amounts recognized during the measurement periods when facts and circumstances that existed at the measurement date, if known, would have affected the measurement of the accounts initially recognized. This standard eliminates the requirement for retrospective adjustments and requires adjustments to the Financial Statements as needed in current period earnings for the full effect of changes. The Company adopted this accounting standard for the quarter ended March 31, 2016. The adoption of this standard did not materially impact the Company’s financial position or results of operations. In November 2015, the FASB issued ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes.” This accounting standard seeks to simplify the accounting related to deferred income taxes. Current US GAAP requires an entity to separate deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) into current and noncurrent amounts for each tax jurisdiction based on the classification of the related asset or liability for financial reporting. DTAs and DTLs not related to assets and liabilities for financial reporting are classified based on the expected reversal date. The new standard requires DTAs or DTLs for each tax jurisdictions to be classified as noncurrent in a classified statement of financial position. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2016 and is permitted to be adopted prospectively or retrospectively. The adoption of this standard is not expected to materially impact the Company’s financial position and disclosures. In January 2016, the FASB issued ASU No. 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities.” This newly issued accounting standard seeks to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information as well as to improve and achieve convergence of the FASB and International Accounting Standards Board (“IASB”) standards on the accounting for financial instruments. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. It also requires enhanced disclosures about those investments and reduces the number of items that are recognized in other comprehensive income. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2017 and should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The Company is currently assessing the impact that this standard may have on its financial position, results of operations, cash flows and disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases.” This newly issued accounting standard seeks to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities in the balance sheet and disclosing key information about leasing arrangements. Current US GAAP does not require lessees to recognize assets and liabilities arising from operating leases in the balance sheet. This standard also provides guidance from the lessees prospective on how to determine if a lease is an operating lease or a financing lease and the differences in accounting for each. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2018 and it is required to be applied retrospectively using the modified retrospective approach. Early adoption is permitted. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. In March 2016, the FASB issued ASU No. 2016-09, “Stock Compensation.” This newly issued accounting standard seeks to simplify the accounting for all entities that issue stock-based payment awards to their employees. The primary areas of change include accounting for income taxes, cash flow statement classification of excess tax benefits and employee taxes paid when an employer withholds shares, accounting for forfeitures and tax withholding requirements. The adoption of this standard is required for interim and fiscal periods ending after December 15, 2016. Early adoption is permitted. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements and forfeitures should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid in the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement should be applied prospectively. The adoption of this standard is not expected to materially impact the Company’s financial position, results of operations, cash flows and disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows.” This newly issued accounting standard seeks to clarify the presentation of eight specific cash flow issues in order to reduce diversity in practice. The topics of clarification include debt prepayment or extinguishment costs, settlement of zero-coupon debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and separately identifiable cash flows. The amendments in this update are effective for interim and fiscal periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied using a retrospective transition method to each period presented. The Company is currently assessing the impact that this standard will have on the presentation of its Consolidated Statements of Cash Flows. In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes.” This newly issued accounting standard seeks to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current US GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to a third party, which is an exception to the principle of comprehensive recognition of current and deferred income taxes in US GAAP. ASU No. 2016-16 eliminates this exception. The amendments in this update are effective for interim and fiscal periods beginning after December 15, 2017. Early adoption is permitted. The amendments in this update should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact that this standard will have on its financial position, results of operations, cash flows and disclosures. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations.” This newly issued accounting standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisition or disposal of assets or businesses. The amendments in this update provide a screen to determine when a set of assets is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. The amendments in this update are effective for interim and fiscal periods beginning after December 15, 2017. Early adoption is permitted under certain conditions. The amendments in this update should be applied prospectively. The Company is currently assessing the impact that this standard will on its financial position, results of operations, cash flows and disclosures. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles, Goodwill and Other.” This newly issued accounting standard seeks to simplify the subsequent measurement of goodwill by eliminating step 2 of the goodwill impairment test which requires business to perform procedures to determine the fair value of its assets and liabilities at the impairment testing date. Under this amendment, an entity should perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The amendments in this update are required for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment test performed on testing dates after January 1, 2017. The amendments in this update should be applied prospectively. The Company is currently assessing the impact that this standard will have on its financial position, results of operations and disclosures. |
SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Warranty Expense and Accrual | The following table presents the Company’s warranty expense and warranty accrual at December 31:
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EARNINGS PER COMMON SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share:
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COMPREHENSIVE INCOME (Tables) |
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Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in AOCI by component for the years ended December 31, 2016, 2015 and 2014:
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Reclassification out of Accumulated Other Comprehensive Income | Reclassification out of accumulated other comprehensive income (loss) for the years ended December 31, 2016, 2015 and 2014:
(a) These accumulated other comprehensive income components are included in the computation of net periodic benefit cost for the years ended December 31, 2016, 2015, and 2014, respectively (see Note 15, Benefit Plans, for additional details). |
BUSINESS COMBINATIONS (Tables) |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Business Combination | The following table summarizes the preliminary fair value of identifiable assets acquired and liabilities assumed at the date of the Merger:
The following table summarizes the consideration transferred:
*Table may not foot due to rounding |
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Summary of Intangible Assets Acquired | Intangible assets acquired consist of the following:
Intangible assets acquired consist of the following:
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Summary of Pro Forma Information | The following unaudited pro forma financial information for the year ended December 31, 2016 and 2015, has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the Merger occurred on January 1, 2015, nor is it indicative of any future results.
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SEGMENT AND GEOGRAPHIC INFORMATION (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales | The following table sets forth information about the Company’s segments for the years ended December 31, 2016, 2015 and 2014.
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Net Sales, Excluding Precious Metal Content |
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Intersegment Net Sales |
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Depreciation and Amortization |
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Capital Expenditures |
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Assets |
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Schedule Of Revenue And Long Lived Assets By Geographic Location | The following table sets forth information about the Company’s operations in different geographic areas for the years ended December 31, 2016, 2015 and 2014. 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.
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Schedule of Sales by Product Category | The following table presents net sales information by product category:
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OTHER EXPENSE (INCOME), NET (Tables) |
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Schedule of Other Expense (Income) | Other expense (income), net, consists of the following:
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INVENTORIES, NET (Tables) |
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Inventories, net | Inventories, net, consist of the following:
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PROPERTY, PLANT AND EQUIPMENT, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, plant and equipment, net | Property, plant and equipment, net, consist of the following
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Changes in the Company's Goodwill | A reconciliation of changes in the Company’s goodwill by segment and in total are as follows (the segment information below reflects the current structure for all periods shown):
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Identifiable Definite-Lived Intangible Assets | Identifiable definite-lived and indefinite-lived intangible assets consist of the following:
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Schedule of Indefinite-Lived Intangible Assets | Identifiable definite-lived and indefinite-lived intangible assets consist of the following:
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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Prepaid expenses and other current assets consist of the following:
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ACCRUED LIABILITIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued liabilities consist of the following:
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FINANCING ARRANGEMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Borrowings | Short-term debt consisted of the following:
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Long-Term Borrowings | Long-term debt consisted of the following:
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Contractual Maturity Dates of Various Borrowings | The table below reflects the contractual maturity dates of the various borrowings at December 31, 2016:
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EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Outstanding Shares | The following table represents total outstanding shares of common stock and treasury stock for the years ended December 31:
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Total Stock Based Compensation Expense and the Tax Related Benefit | The following table represents total stock based compensation expense and the tax related benefit for the years ended:
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Assumptions Used to Determine Compensation Cost for the Company's Non-qualified Stock Options Issued | The following table sets forth the average assumptions used to determine compensation cost for the Company’s NQSO issued during the years ended:
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Summary of the Non-qualified Stock Option Transactions | The following table summarizes the NQSO transactions for the year ended December 31, 2016:
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Summary of Information about Non-qualified Stock Options Outstanding | The following table summarizes information about NQSO outstanding for the year ended December 31, 2016:
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Summary of the Unvested RSU Transactions | The following table summarizes the unvested RSU transactions for the year ended December 31, 2016:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Before Income Taxes from Operations | The components of income before income taxes from operations are as follows:
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Components of the Provision for Income Taxes from Operations | The components of the provision for income taxes from operations are as follows:
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Reconciliation of the U.S. Federal Statutory Tax Rate to the Effective Rate | The reconciliation of the U.S. federal statutory tax rate to the effective rate for the years ended is as follows:
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Tax Effect of Significant Temporary Differences Giving Rise to Deferred Tax Assets and Liabilities | The tax effect of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:
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Deferred Tax Assets and Liabilities Included in the Consolidated Balance Sheet | Deferred tax assets and liabilities are included in the following Consolidated Balance Sheet line items:
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Unrecognized Tax Benefits | The Company had the following activity recorded for unrecognized tax benefits:
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BENEFIT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliations of Changes in the Defined Benefit and Postretirement Healthcare Plans' Benefit Obligations, Fair Value of Assets and Statement of Funded Status | Reconciliations of changes in the defined benefit and postemployment healthcare plans’ benefit obligations, fair value of assets and statement of funded status are as follows:
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Amounts Recognized in the Accompanying Consolidated Balance Sheets, Net of Tax Effects | The amounts recognized in the accompanying Consolidated Balance Sheets, net of tax effects, are as follows:
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Amounts Recognized in Accumulated Other Comprehensive Income | Amounts recognized in AOCI consist of:
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Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets | Information for pension plans with an accumulated benefit obligation in excess of plan assets:
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Components of Net Periodic Benefit Cost | Components of net periodic benefit cost:
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Other Changes in Plan Assets and Benefit Obligations Recognized in AOCI | Other changes in plan assets and benefit obligations recognized in AOCI:
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Amounts in AOCI that are Expected to be Amortized as Net Expense (Income) During Next Fiscal Year | The amounts in AOCI that are expected to be amortized as net expense (income) during fiscal year 2017 are as follows:
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Weighted Average Assumptions Used to Determine Benefit Obligations, Principally in Foreign Locations | The weighted average assumptions used to determine benefit obligations for the Company’s plans, principally in foreign locations, at December 31, 2016, 2015 and 2014 are as follows:
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Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost | The weighted average assumptions used to determine net periodic benefit cost for the Company’s plans, principally in foreign locations, for the years ended December 31, 2016, 2015 and 2014 are as follows:
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Effect of One Percentage Point in Assumed Healthcare Cost Trend Rates | Assumed health care cost trend rates have an impact on the amounts reported for postemployment benefits. An ongoing one percentage point change in assumed healthcare cost trend rates would have had the following effects for the year ended December 31, 2016:
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Fair Value Measurements of Plan Assets | The fair value of the Company’s pension plan assets at December 31, 2016 is presented in the table below by asset category. Approximately 75% of the total plan assets are categorized as Level 1, and therefore, the values assigned to these pension assets are based on quoted prices available in active markets. For the other category levels, a description of the valuation is provided in Note 1, Significant Accounting Policies, under the “Fair Value Measurement” heading.
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Reconciliation for the Plans Assets Categorized as Level 3 | The following table provides a reconciliation from December 31, 2015 to December 31, 2016 for the plan assets categorized as Level 3. During the year ended December 31, 2016, $0.2 million of plan assets were transferred out of the Level 3 category.
The following tables provide a reconciliation from December 31, 2014 to December 31, 2015 for the plan assets categorized as Level 3. During the year ended December 31, 2015, no assets were transferred in or out of the Level 3 category.
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Estimated Future Benefit Payments | Estimated Future Benefit Payments
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RESTRUCTURING AND OTHER COSTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Accruals | At December 31, 2016, the Company’s restructuring accruals were as follows:
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Cumulative Amounts for the Provisions and Adjustments and Amounts Applied for All the Plans by Segment | The following table provides the cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment:
At December 31, 2015, the Company’s restructuring accruals were as follows:
The following table provides the cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment:
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FINANCIAL INSTRUMENTS AND DERIVATIVES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table summarizes the notional amounts of hedges of net investments by derivative instrument type at December 31, 2016 and the notional amounts expected to mature during the next 12 months:
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table summarizes the amounts of gains (losses) recorded in the Company’s Consolidated Statements of Operations related to the economic hedges not designated as hedging for the years ended December 31, 2016, 2015 and 2014:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables summarize the fair value and consolidated balance sheet location of the Company’s derivatives at December 31, 2016 and December 31, 2015:
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Offsetting Derivative Assets and Liabilities | Offsetting of financial assets and liabilities under netting arrangements at December 31, 2016:
Offsetting of financial assets and liabilities under netting arrangements at December 31, 2015:
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Designated as Hedging Instrument | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The following table summarizes the notional amounts of cash flow hedges by derivative instrument type at December 31, 2016 and the notional amounts expected to mature during the next 12 months, with a discussion of the various cash flow hedges by derivative instrument type following the table:
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Not Designated as Hedging Instrument | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The following tables summarize the aggregate notional amounts of the Company’s economic hedges not designated as hedges by derivative instrument types at December 31, 2016 and the notional amounts expected to mature during the next 12 months:
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Cash Flow Hedging | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following tables summarize the amount of gains (losses) recorded in AOCI in the Consolidated Balance Sheets and income (expense) in the Company’s Consolidated Statements of Operations related to all cash flow hedges for the years ended December 31, 2016, 2015 and 2014:
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Net Investment Hedging | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following tables summarize the amount of gains (losses) recorded in AOCI in the Consolidated Balance Sheets and income (expense) in the Company’s Consolidated Statements of Operations related to the hedges of net investments for the year ended December 31, 2016, 2015 and 2014:
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Fair Value Hedging | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following tables summarize the amount of income (expense) recorded in the Company’s Consolidated Statements of Operations related to the hedges of fair value for the years ended December 31, 2016, 2015 and 2014:
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FAIR VALUE MEASUREMENT (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Assets and Liabilities that are Recorded at Fair Value and Classified Based on the Lowest Level of Input | The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at December 31, 2016 and 2015, which are classified as Cash and cash equivalents, Prepaid expenses and other current assets, Other noncurrent assets, net, Accrued liabilities, and Other noncurrent liabilities in the Consolidated Balance Sheets. Financial assets and liabilities that are recorded at fair value as of the balance sheet date are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
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Reconciliation of the Company's Assets Measured at Fair Value on a Recurring Basis Using Unobservable Inputs (Level 3) | The following table presents a reconciliation of the Company’s Level 3 holdings measured at fair value on a recurring basis using unobservable inputs:
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COMMITMENTS AND CONTINGENCIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Rental commitments | Rental commitments, principally for real estate (exclusive of taxes, insurance and maintenance), automobiles and office equipment are as follows:
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QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information |
(a) Includes the results of operations for Sirona for the period February 29, 2016 through March 31, 2016 (b) During the March 31, 2016 quarter, the Company issued 101.8 million shares related to the Merger. As a result, the calculation of the weighted average share count was lower in the March 31, 2016 quarter as compared to the weighted average share count for the year ended December 31, 2016. |
EARNINGS PER COMMON SHARE - COMPUTATION OF BASIC AND DILUTED EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Net income attributable to Dentsply Sirona | |||||||||||
Net income attributable to Dentsply Sirona, basic | $ 107.0 | $ 92.5 | $ 105.4 | $ 125.0 | $ 58.6 | $ 84.5 | $ 44.1 | $ 64.0 | $ 429.9 | $ 251.2 | $ 322.9 |
Net income attributable to Dentsply Sirona, diluted | $ 429.9 | $ 251.2 | $ 322.9 | ||||||||
Shares | |||||||||||
Basic (in shares) | 218.0 | 140.0 | 141.7 | ||||||||
Incremental shares from assumed exercise of dilutive options and RSUs (in shares) | 3.6 | 2.5 | 2.5 | ||||||||
Diluted (in shares) | 221.6 | 142.5 | 144.2 | ||||||||
Earnings per common share | |||||||||||
Basic (in dollars per share) | $ 0.46 | $ 0.40 | $ 0.45 | $ 0.72 | $ 0.42 | $ 0.60 | $ 0.32 | $ 0.46 | $ 1.97 | $ 1.79 | $ 2.28 |
Diluted (in dollars per share) | $ 0.46 | $ 0.39 | $ 0.44 | $ 0.70 | $ 0.41 | $ 0.59 | $ 0.31 | $ 0.45 | $ 1.94 | $ 1.76 | $ 2.24 |
EARNINGS PER COMMON SHARE - ADDITIONAL INFORMATION (Details) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Earnings Per Share [Abstract] | |||
Antidilutive common stock options not included in the computation of diluted earnings per common share | 0.6 | 0.9 | 1.0 |
BUSINESS COMBINATIONS - SUMMARY OF CONSIDERATION (Details) $ / shares in Units, shares in Millions, $ in Millions |
Feb. 29, 2016
USD ($)
$ / shares
shares
|
---|---|
Sirona Dental Systems Inc | |
Business Acquisition [Line Items] | |
Sirona common stock outstanding at February 29, 2016 | shares | 56.1 |
Fair value of vested portion of Sirona share based awards outstanding - 1.5 million at February 29, 2016 | $ | $ 82.4 |
Equity awards canceled, shares | shares | 1.5 |
Sirona Dental Systems Inc | |
Business Acquisition [Line Items] | |
DENTSPLY common stock per share price at February 26, 2016 (in dollars per share) | $ / shares | $ 60.67 |
Fair value of DENTSPLY common stock issued to Sirona shareholders | $ | $ 6,173.8 |
Total acquisition consideration | $ | $ 6,256.2 |
Sirona Dental Systems Inc | Common Stock | |
Business Acquisition [Line Items] | |
Exchange ratio | 1.8142 |
DENTSPLY common stock issued for consideration | shares | 101.8 |
BUSINESS COMBINATIONS - PRO FORMA INFORMATION (Details) - Sirona Dental Systems Inc - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | ||
Net sales | $ 3,916.0 | $ 3,830.0 |
Net income attributable to Dentsply Sirona | $ 437.0 | $ 388.5 |
Diluted earnings per common share (in dollars per share) | $ 1.85 | $ 1.58 |
SEGMENT AND GEOGRAPHIC INFORMATION - NET SALES (Details) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Sep. 30, 2015
USD ($)
|
Jun. 30, 2015
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2016
USD ($)
segment
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Net Sales (Detail) [Abstract] | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Net sales | $ 996.5 | $ 954.2 | $ 1,022.0 | $ 772.6 | $ 671.1 | $ 648.9 | $ 698.0 | $ 656.3 | $ 3,745.3 | $ 2,674.3 | $ 2,922.6 |
Dental and Healthcare Consumables | |||||||||||
Net sales | 2,058.1 | 1,961.0 | 2,142.3 | ||||||||
Technologies | |||||||||||
Net sales | $ 1,687.2 | $ 713.3 | $ 780.3 |
SEGMENT AND GEOGRAPHIC INFORMATION - NET SALES, EXCLUDING PRECIOUS METAL CONTENT (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Segment Reporting Information [Line Items] | |||||||||||
Total net sales, excluding precious metal content | $ 3,681.0 | $ 2,581.5 | $ 2,792.7 | ||||||||
Precious metal content of sales | 64.3 | 92.8 | 129.9 | ||||||||
Total net sales, including precious metal content | $ 996.5 | $ 954.2 | $ 1,022.0 | $ 772.6 | $ 671.1 | $ 648.9 | $ 698.0 | $ 656.3 | 3,745.3 | 2,674.3 | 2,922.6 |
Dental and Healthcare Consumables | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales, excluding precious metal content | 1,994.3 | 1,868.8 | 2,013.2 | ||||||||
Total net sales, including precious metal content | 2,058.1 | 1,961.0 | 2,142.3 | ||||||||
Technologies | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net sales, excluding precious metal content | 1,686.7 | 712.7 | 779.5 | ||||||||
Total net sales, including precious metal content | $ 1,687.2 | $ 713.3 | $ 780.3 |
SEGMENT AND GEOGRAPHIC INFORMATION - INTERSEGMENT NET SALES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Intersegment net sales | $ 0.0 | $ 0.0 | $ 0.0 |
Operating Segments | Dental and Healthcare Consumables | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Intersegment net sales | 233.0 | 208.0 | 210.8 |
Operating Segments | Technologies | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Intersegment net sales | 6.4 | 7.3 | 6.8 |
All Other | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Intersegment net sales | 239.5 | 214.6 | 239.2 |
Eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Intersegment net sales | $ (478.9) | $ (429.9) | $ (456.8) |
SEGMENT AND GEOGRAPHIC INFORMATION - DEPRECIATION AND AMORTIZATION (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of Depreciation by Segment [Line Items] | |||
Depreciation and amortization | $ 271.7 | $ 122.9 | $ 129.1 |
Operating Segments | Dental and Healthcare Consumables | |||
Reconciliation of Depreciation by Segment [Line Items] | |||
Depreciation and amortization | 78.1 | 74.4 | 78.2 |
Operating Segments | Technologies | |||
Reconciliation of Depreciation by Segment [Line Items] | |||
Depreciation and amortization | 182.4 | 42.0 | 45.5 |
All Other | |||
Reconciliation of Depreciation by Segment [Line Items] | |||
Depreciation and amortization | $ 11.2 | $ 6.5 | $ 5.4 |
SEGMENT AND GEOGRAPHIC INFORMATION - CAPITAL EXPENDITURES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Capital expenditures | $ 125.0 | $ 72.0 | $ 99.6 |
Operating Segments | Dental and Healthcare Consumables | |||
Capital expenditures | 42.1 | 37.9 | 62.2 |
Operating Segments | Technologies | |||
Capital expenditures | 73.8 | 23.3 | 28.9 |
All Other | |||
Capital expenditures | $ 9.1 | $ 10.8 | $ 8.5 |
SEGMENT AND GEOGRAPHIC INFORMATION - ASSETS (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 11,656.1 | $ 4,402.9 |
Operating Segments | Dental and Healthcare Consumables | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 2,616.6 | 2,537.0 |
Operating Segments | Technologies | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | 8,103.7 | 1,537.7 |
All Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 935.8 | $ 328.2 |
SEGMENT AND GEOGRAPHIC INFORMATION - INFORMATION ABOUT THE COMPANY'S OPERATINGS IN DIFFERENT GEOGRAPHIC AREAS (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 996.5 | $ 954.2 | $ 1,022.0 | $ 772.6 | $ 671.1 | $ 648.9 | $ 698.0 | $ 656.3 | $ 3,745.3 | $ 2,674.3 | $ 2,922.6 |
Property, plant and equipment, net | 799.8 | 558.8 | 799.8 | 558.8 | 588.8 | ||||||
U. S. | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,383.0 | 1,027.4 | 1,015.9 | ||||||||
Property, plant and equipment, net | 192.5 | 178.5 | 192.5 | 178.5 | 170.8 | ||||||
GERMANY | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 617.0 | 472.8 | 541.8 | ||||||||
Property, plant and equipment, net | 244.1 | 92.1 | 244.1 | 92.1 | 109.3 | ||||||
SWEDEN | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 53.2 | 42.3 | 48.9 | ||||||||
Property, plant and equipment, net | 82.5 | 92.3 | 82.5 | 92.3 | 103.9 | ||||||
Other Foreign | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 1,692.1 | 1,131.8 | 1,316.0 | ||||||||
Property, plant and equipment, net | $ 280.7 | $ 195.9 | $ 280.7 | $ 195.9 | $ 204.8 |
SEGMENT AND GEOGRAPHIC INFORMATION - SCHEDULE OF SALES BY PRODUCT CATEGORY (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 996.5 | $ 954.2 | $ 1,022.0 | $ 772.6 | $ 671.1 | $ 648.9 | $ 698.0 | $ 656.3 | $ 3,745.3 | $ 2,674.3 | $ 2,922.6 |
Dental consumables products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 1,770.3 | 1,671.1 | 1,807.6 | ||||||||
Dental technology products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 1,658.6 | 687.7 | 753.7 | ||||||||
Healthcare consumable products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 316.4 | $ 315.5 | $ 361.3 |
OTHER EXPENSE (INCOME) , NET (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Total other expense (income), net | $ (20.1) | $ (8.2) | $ (0.1) |
Total Other Expense (Income), Net | |||
Foreign exchange transaction (gains) losses | (10.2) | (5.2) | 1.3 |
Other (income) expense, net | (9.9) | (3.0) | (1.4) |
Total other expense (income), net | (20.1) | (8.2) | (0.1) |
Total Other Expense (Income), Net | Foreign exchange forward contracts | Not Designated as Hedging Instrument | |||
Foreign exchange transaction (gains) losses | $ (6.9) | $ (5.1) | $ (1.1) |
INVENTORIES, NET (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 311.3 | $ 218.2 |
Work-in-process | 77.1 | 52.3 |
Raw materials and supplies | 128.7 | 69.9 |
Inventories, net | $ 517.1 | $ 340.4 |
INVENTORIES, NET - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventory valuation reserve | $ 37.5 | $ 36.3 |
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 1,854.9 | $ 1,342.7 | |
Less: Accumulated depreciation | 1,055.1 | 783.9 | |
Property, plant and equipment, net | 799.8 | 558.8 | $ 588.8 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 52.8 | 38.5 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 500.4 | 400.4 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,218.8 | 846.7 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 82.9 | $ 57.1 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule Of Prepaid Expenses And Other Current Assets [Line Items] | ||
Prepaid expenses and other current assets | $ 345.6 | $ 171.8 |
Prepaid expenses and other current assets | ||
Schedule Of Prepaid Expenses And Other Current Assets [Line Items] | ||
Deferred taxes | 172.1 | 70.4 |
Deposits | 39.4 | 14.8 |
Prepaid expenses | 36.5 | 24.1 |
Fair value of derivatives | 14.1 | 28.1 |
Other current assets | $ 83.5 | $ 34.4 |
ACCRUED LIABILITIES (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Other Liabilities [Line Items] | ||
Accrued liabilities | $ 462.7 | $ 310.1 |
Accrued Liabilities | ||
Other Liabilities [Line Items] | ||
Payroll, commissions, bonuses, other cash compensation and employee benefits | 143.4 | 110.0 |
Sales and marketing programs | 102.0 | 43.3 |
Accrued vacation and holidays | 37.5 | 26.1 |
Restructuring costs | 27.4 | 35.4 |
Professional and legal costs | 20.2 | 14.3 |
General insurance | 15.0 | 13.5 |
Deferred income | 14.1 | 2.2 |
Warranty liabilities | 11.2 | 3.8 |
Third party royalties | 10.4 | 8.5 |
Accrued interest | 8.1 | 8.9 |
Accrued travel expenses | 6.9 | 5.6 |
Accrued property taxes | 6.4 | 2.7 |
Current portion of derivatives | 2.7 | 11.0 |
Other | $ 57.4 | $ 24.8 |
FINANCING ARRANGEMENTS - SHORT TERM BORROWINGS (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Short-term Debt [Line Items] | ||
Debt, current | $ 21.1 | $ 12.1 |
Add: Current portion of long-term debt | 11.0 | 9.2 |
Maximum month-end short-term debt outstanding during the year | 49.0 | 453.2 |
Average amount of short-term debt outstanding during the year | $ 15.5 | $ 265.3 |
Weighted-average interest rate on short-term debt at year-end | 3.90% | 13.40% |
Brazil short-term loans | ||
Short-term Debt [Line Items] | ||
Debt, current | $ 1.5 | $ 2.5 |
Fixed interest rate | 15.00% | 15.10% |
China short-term loans | ||
Short-term Debt [Line Items] | ||
Debt, current | $ 6.8 | |
Fixed interest rate | 3.50% | |
Other short-term loans | ||
Short-term Debt [Line Items] | ||
Debt, current | $ 1.8 | $ 0.4 |
Fixed interest rate | 3.10% | 2.80% |
FINANCING ARRANGEMENTS - CONTRACTUAL MATURITY DATES OF THE VAIROUS BORROWINGS (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Disclosure Contractual Maturity Dates Of The Various Borrowings [Abstract] | ||
2017 | $ 11.0 | |
2018 | 10.7 | |
2019 | 117.6 | |
2020 | 123.9 | |
2021 | 296.7 | |
2022 and beyond | 968.3 | |
Floating rate senior term loan | $ 1,528.2 | $ 1,153.5 |
EQUITY - TOTAL STOCK BASED COMPENSATION EXPENSE AND THE TAX RELATED BENEFIT (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Equity [Abstract] | |||
Stock option expense | $ 10.6 | $ 8.1 | $ 8.8 |
RSU expense | 29.1 | 16.2 | 15.4 |
Total stock based compensation expense | 39.7 | 24.3 | 24.2 |
Related deferred income tax benefit | $ 10.9 | $ 7.1 | $ 6.7 |
EQUITY - ASSUMPTIONS USED TO DETERMINE COMPENSATION COST FOR THE COMPANY'S NON-QUALIFIED STOCK OPTIONS ISSUED (Details) - Nonqualified Stock Options - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair value per share | $ 12.78 | $ 10.87 | $ 9.41 |
Expected dividend yield (in hundredths) | 0.52% | 0.51% | 0.59% |
Risk-free interest rate (in hundredths) | 1.54% | 1.59% | 1.61% |
Expected volatility (in hundredths) | 20.80% | 20.30% | 21.60% |
Expected life (years) | 6 years 1 month 20 days | 5 years 8 months 5 days | 5 years 1 month 18 days |
EQUITY - UNVESTED RSU TRANSACTIONS (Details) - Restricted Stock Units (RSUs) shares in Millions |
12 Months Ended |
---|---|
Dec. 31, 2016
$ / shares
shares
| |
Number of Shares | |
Unvested at December 31, 2015 | shares | 1.1 |
Granted | shares | 0.4 |
Merger | shares | 1.0 |
Vested | shares | (0.5) |
Forfeited | shares | (0.1) |
Unvested at December 31, 2016 | shares | 1.9 |
Weighted Average Grant Date Fair Value | |
Unvested at December 31, 2015 (in dollars per share) | $ / shares | $ 45.82 |
Granted (in dollars per share) | $ / shares | 56.40 |
Merger (in dollars per share) | $ / shares | 46.64 |
Vested (in dollars per share) | $ / shares | 40.06 |
Forfeited (in dollars per share) | $ / shares | 50.77 |
Unvested at December 31, 2016 (in dollars per share) | $ / shares | $ 49.55 |
INCOME TAXES - COMPONENTS OF INCOME BEFORE INCOME TAXES FROM OPERATIONS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
United States | $ 28.9 | $ 26.8 | $ 59.6 |
Foreign | 412.0 | 302.9 | 344.8 |
Income before income taxes | $ 440.9 | $ 329.7 | $ 404.4 |
INCOME TAXES - COMPONENTS OF THE PROVISION FOR INCOME TAXES FROM OPERATIONS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Current: | |||
U.S. federal | $ 2.3 | $ (3.0) | $ (12.8) |
U.S. state | 5.6 | 1.7 | (0.3) |
Foreign | 111.7 | 50.9 | 76.7 |
Total | 119.6 | 49.6 | 63.6 |
Deferred: | |||
U.S. federal | 27.6 | 44.3 | 32.3 |
U.S. state | 1.3 | 0.3 | (9.9) |
Foreign | (139.0) | (17.2) | (4.9) |
Total | (110.1) | 27.4 | 17.5 |
Provision for income taxes | $ 9.5 | $ 77.0 | $ 81.1 |
INCOME TAXES - THE RECONCILIATION OF THE U.S. FEDERAL STATUTORY TAX RATE TO THE EFFECTIVE RATE (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Statutory U. S. federal income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 1.10% | 0.40% | 0.70% |
Federal benefit of R&D and foreign tax credits | (12.60%) | (11.20%) | (10.50%) |
Tax effect of international operations | (3.90%) | (6.40%) | (3.20%) |
Net effect of tax audit activity | (0.60%) | (0.40%) | 1.50% |
Tax effect of enacted statutory rate changes | (0.20%) | 0.20% | (0.30%) |
Federal tax on unremitted earnings of certain foreign subsidiaries | 0.10% | 2.50% | (0.10%) |
Valuation allowance adjustments | (16.30%) | 0.20% | (2.10%) |
Other | (0.40%) | 3.10% | (0.90%) |
Effective income tax rate on operations | 2.20% | 23.40% | 20.10% |
INCOME TAXES - THE DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Deferred income taxes | $ 848.6 | $ 160.3 |
Prepaid expenses and other current assets | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Prepaid expenses and other current assets | 172.1 | 70.4 |
Other noncurrent assets, net | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Other noncurrent assets, net | 22.8 | 16.9 |
Income taxes payable | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Income taxes payable | 3.4 | 3.1 |
Deferred income taxes | ||
Schedule of Deferred Income Tax Assets and Liabilities [Line Items] | ||
Deferred income taxes | $ 848.6 | $ 160.3 |
INCOME TAXES - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at beginning of period | $ 12.1 | $ 21.9 | $ 18.0 |
Gross change for prior period positions | (2.0) | (7.6) | 5.1 |
Gross change for current year positions | 2.2 | 0.2 | 0.2 |
Decrease due to settlements and payments | (1.3) | (0.5) | (0.2) |
Decrease due to statute expirations | 0.0 | (0.2) | (0.6) |
Increase due to effect of foreign currency translation | 0.0 | 0.0 | 0.0 |
Decrease due to effect from foreign currency translation | (0.2) | (1.7) | (0.6) |
Unrecognized tax benefits at end of period | $ 10.8 | $ 12.1 | $ 21.9 |
BENEFIT PLANS - PENSION BENEFITS AND OTHER POSTRETIREMENT BENEFITS RECOGNIZED IN THE ACCOMPANYING CONSOLIDATED BALANCE SHEETS (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other noncurrent assets, net | $ 0.1 | $ 0.0 |
Deferred tax asset | 31.7 | 27.0 |
Total assets | 31.8 | 27.0 |
Current liabilities | (6.9) | (4.2) |
Other noncurrent liabilities | (309.5) | (232.7) |
Deferred tax liability | (0.5) | (0.8) |
Total liabilities | (316.9) | (237.7) |
Accumulated other comprehensive income | 82.3 | 71.5 |
Net amount recognized | (202.8) | (139.2) |
Other Postemployment Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other noncurrent assets, net | 0.0 | 0.0 |
Deferred tax asset | 1.4 | 0.9 |
Total assets | 1.4 | 0.9 |
Current liabilities | (0.7) | (0.7) |
Other noncurrent liabilities | (15.4) | (13.4) |
Deferred tax liability | 0.0 | 0.0 |
Total liabilities | (16.1) | (14.1) |
Accumulated other comprehensive income | 2.2 | 1.5 |
Net amount recognized | $ (12.5) | $ (11.7) |
BENEFIT PLANS - AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Pension Plans | ||
Schedule of Pension and Other Postretirment Benefits Recgonized in Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net actuarial loss | $ 115.3 | $ 100.1 |
Net prior service cost | (1.8) | (2.4) |
Before tax AOCI | 113.5 | 97.7 |
Less: Deferred taxes | 31.2 | 26.2 |
Net of tax AOCI | 82.3 | 71.5 |
Other Postemployment Benefits | ||
Schedule of Pension and Other Postretirment Benefits Recgonized in Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Net actuarial loss | 3.5 | 2.4 |
Net prior service cost | 0.0 | 0.0 |
Before tax AOCI | 3.5 | 2.4 |
Less: Deferred taxes | 1.3 | 0.9 |
Net of tax AOCI | $ 2.2 | $ 1.5 |
BENEFIT PLANS - PENSION PLANS WITH AN ACCUMULATED BENEFIT OBLIGATION IN EXCESS OF PLAN ASSETS (Details) - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Compensation and Retirement Disclosure [Abstract] | ||
Projected benefit obligation | $ 458.7 | $ 377.7 |
Accumulated benefit obligation | 427.2 | 361.0 |
Fair value of plan assets | $ 142.3 | $ 140.7 |
BENEFIT PLANS - COMPONENETS OF NET PERIODIC BENEFIT COST (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension Plans | |||
Service cost | $ 15.7 | $ 17.1 | $ 14.0 |
Interest cost | 8.0 | 7.3 | 11.1 |
Expected return on plan assets | (5.1) | (5.4) | (5.5) |
Amortization of prior service (credit) cost | (0.2) | (0.2) | (0.1) |
Amortization of net actuarial loss | 5.1 | 7.8 | 2.8 |
Curtailment and settlement loss (gains) | 1.2 | (0.8) | 0.1 |
Net periodic benefit cost | 24.7 | 25.8 | 22.4 |
Other Postemployment Benefits | |||
Service cost | 0.3 | 0.4 | 0.2 |
Interest cost | 0.6 | 0.6 | 0.5 |
Expected return on plan assets | 0.0 | 0.0 | 0.0 |
Amortization of prior service (credit) cost | 0.0 | 0.0 | 0.0 |
Amortization of net actuarial loss | 0.2 | 0.2 | 0.1 |
Curtailment and settlement loss (gains) | 0.0 | 0.0 | 0.0 |
Net periodic benefit cost | $ 1.1 | $ 1.2 | $ 0.8 |
BENEFIT PLANS - OTHER CHANGES IN PLAN ASSETS AND BENEFIT OBLIGATIONS RECOGNIZED IN AOCI (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss (gain) | $ 20.3 | $ (48.6) | $ 88.5 |
Net prior service cost (credit) | 0.4 | (0.3) | 0.4 |
Amortization | (4.9) | (7.6) | (2.6) |
Total recognized in AOCI | 15.8 | (56.5) | 86.3 |
Total recognized in net periodic benefit cost and AOCI | 40.5 | (30.7) | 108.7 |
Other Postemployment Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net actuarial loss (gain) | 1.4 | (0.4) | 1.4 |
Net prior service cost (credit) | 0.0 | 0.0 | 0.0 |
Amortization | (0.2) | (0.2) | 0.0 |
Total recognized in AOCI | 1.2 | (0.6) | 1.4 |
Total recognized in net periodic benefit cost and AOCI | $ 2.3 | $ 0.6 | $ 2.2 |
BENEFIT PLANS - THE AMOUNTS IN AOCI THAT ARE EXPECTED TO BE AMORTIZED AS NET EXPENSE (INCOME) DURING NEXT FISCAL YEAR (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Pension Plans | |
Schedule of Pension and Other Postretirment Benefits Expected Benefit Payments [Line Items] | |
Amount of net prior service (credit) cost | $ (0.2) |
Amount of net loss | 6.5 |
Other Postemployment Benefits | |
Schedule of Pension and Other Postretirment Benefits Expected Benefit Payments [Line Items] | |
Amount of net prior service (credit) cost | 0.0 |
Amount of net loss | $ 0.2 |
BENEFIT PLANS - WEIGHTED AVERAGE ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension Plans | |||
Schedule of Benefit Obligations Weighted Average Assumptions [Line Items] | |||
Discount rate | 1.60% | 2.10% | 1.80% |
Rate of compensation increase | 2.60% | 2.50% | 2.60% |
Other Postemployment Benefits | |||
Schedule of Benefit Obligations Weighted Average Assumptions [Line Items] | |||
Discount rate | 4.40% | 4.70% | 4.30% |
Health care cost trend pre 65 | 7.80% | 7.60% | 8.00% |
Health care cost trend post 65 | 8.50% | 8.20% | 7.00% |
Ultimate health care cost trend | 4.50% | 5.00% | 5.00% |
Years until trend is reached pre 65 | 9 years | 9 years | 8 years |
Years until ultimate trend is reached post 65 | 9 years | 9 years | 7 years |
BENEFIT PLANS - WEIGHTED AVERAGE ASSUMPTIONS USED TO DETERMINE NET PERIODIC BENEFIT COST TREND RATES (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension Plans | |||
Schedule of Net Periodic Benefit Costs Weighted Average Assumptions [Line Items] | |||
Discount rate | 2.10% | 1.80% | 3.20% |
Expected return on plan assets | 3.30% | 3.70% | 3.80% |
Rate of compensation increase | 2.50% | 2.60% | 2.70% |
Other Postemployment Benefits | |||
Schedule of Net Periodic Benefit Costs Weighted Average Assumptions [Line Items] | |||
Discount rate | 4.70% | 4.30% | 4.80% |
Health care cost trend | 7.80% | 8.50% | 8.50% |
Ultimate health care cost trend | 4.50% | 5.00% | 5.00% |
Years until ultimate trend is reached | 9 years | 8 years | 8 years |
BENEFIT PLANS - EFFECT OF ONE PERCENTAGE POINT IN ASSUMED HEALTHCARE TREND RATES (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Compensation and Retirement Disclosure [Abstract] | |
Effect of one percent increase on total of service and interest cost components | $ 0.2 |
Effect of one percent increase on postretirement benefit obligation | 2.6 |
Effect of one percent decrease on total of service and interest cost components | (0.2) |
Effect of one percent decrease on postretirement benefit obligation | $ (2.1) |
BENEFIT PLANS - ESTIMATED FUTURE BENEFIT PAYMENTS ON DEFINED BENEFIT PLAN (Details) $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2017 | $ 15.4 |
2018 | 15.5 |
2019 | 14.8 |
2020 | 17.2 |
2021 | 16.2 |
2022-2026 | 95.9 |
Other Postemployment Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2017 | 0.7 |
2018 | 0.7 |
2019 | 0.6 |
2020 | 0.6 |
2021 | 0.6 |
2022-2026 | $ 3.2 |
FINANCIAL INSTRUMENTS AND DERIVATIVES - CASH FLOW HEDGES (Details) - Dec. 31, 2016 - Cash Flow Hedging - Designated as Hedging Instrument SFr in Millions, $ in Millions |
USD ($) |
CHF (SFr) |
---|---|---|
Derivative [Line Items] | ||
Aggregate Notional Amount | $ 399.5 | |
Aggregate Notional Amount Maturing within 12 Months | 219.9 | |
Foreign exchange forward contracts | ||
Derivative [Line Items] | ||
Aggregate Notional Amount | 292.0 | |
Aggregate Notional Amount Maturing within 12 Months | 219.9 | |
Interest rate swaps | ||
Derivative [Line Items] | ||
Aggregate Notional Amount | 107.5 | SFr 65.0 |
Aggregate Notional Amount Maturing within 12 Months | $ 0.0 |
FINANCIAL INSTRUMENTS AND DERIVATIVES - NET INVESTMENT HEDGES (Details) - Net Investment Hedging - Designated as Hedging Instrument - Foreign exchange forward contracts € in Millions |
Dec. 31, 2016
EUR (€)
|
---|---|
Derivative [Line Items] | |
Aggregate Notional Amount | € 95.1 |
Aggregate Notional Amount Maturing within 12 Months | € 95.1 |
FINANCIAL INSTRUMENTS AND DERIVATIVES - FAIR VALUE HEDGES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Fair Value Hedging | Designated as Hedging Instrument | Interest rate swaps | Interest expense | |||
Derivative [Line Items] | |||
Recognized in Income (Expense) | $ 0.0 | $ 0.3 | $ 0.2 |
FINANCIAL INSTRUMENTS AND DERIVATIVES - HEDGES NOT DESIGNATED (Details) - Not Designated as Hedging Instrument $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Derivative [Line Items] | |
Aggregate Notional Amount | $ 268.2 |
Aggregate Notional Amount Maturing within 12 Months | 268.0 |
Foreign exchange forward contracts | |
Derivative [Line Items] | |
Aggregate Notional Amount | 267.2 |
Aggregate Notional Amount Maturing within 12 Months | 267.2 |
Interest rate swaps | |
Derivative [Line Items] | |
Aggregate Notional Amount | 1.0 |
Aggregate Notional Amount Maturing within 12 Months | $ 0.8 |
FINANCIAL INSTRUMENTS AND DERIVATIVES - GAIN (LOSS) RECORDED IN AOCI FOR HEDGES NOT DESIGNATED (Details) - Not Designated as Hedging Instrument - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Recognized in Income (Expense) | $ (0.6) | $ 4.6 | $ (17.0) |
Foreign exchange forward contracts | Other expense (income), net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Recognized in Income (Expense) | (0.6) | 6.3 | 33.2 |
DIO equity option contracts | Other expense (income), net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Recognized in Income (Expense) | 0.0 | 0.1 | 0.0 |
Cross currency basis swaps | Other expense (income), net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Recognized in Income (Expense) | $ 0.0 | $ (1.8) | $ (50.2) |
COMMITMENTS AND CONTINGENCIES - ADDITIONAL INFORMATION (Details) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Jan. 20, 2014
employee
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating leases, rent expense, total | $ | $ 33.3 | $ 30.4 | $ 37.4 | |
Former Employee | Eastern District Of Pennsylvania | ||||
Loss Contingencies [Line Items] | ||||
Number of employees | 2 | |||
Employee | Eastern District Of Pennsylvania | ||||
Loss Contingencies [Line Items] | ||||
Number of employees | 1 |
COMMITMENTS AND CONTINGENCIES - RENTAL COMMITMENTS (Details) $ in Millions |
Dec. 31, 2016
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2017 | $ 37.0 |
2018 | 25.4 |
2019 | 19.3 |
2020 | 15.7 |
2021 | 13.8 |
2022 and thereafter | 26.1 |
Future minimum payments due | $ 137.3 |
QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 29, 2016 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Net sales | $ 996.5 | $ 954.2 | $ 1,022.0 | $ 772.6 | $ 671.1 | $ 648.9 | $ 698.0 | $ 656.3 | $ 3,745.3 | $ 2,674.3 | $ 2,922.6 | |
Gross profit | 541.5 | 513.6 | 526.9 | 418.9 | 374.7 | 369.4 | 399.7 | 373.4 | 2,000.9 | 1,517.2 | 1,599.8 | |
Operating income | 134.2 | 126.6 | 121.2 | 72.7 | 93.1 | 98.6 | 85.8 | 97.7 | 454.7 | 375.2 | 445.6 | |
Net income attributable to Dentsply Sirona, basic | $ 107.0 | $ 92.5 | $ 105.4 | $ 125.0 | $ 58.6 | $ 84.5 | $ 44.1 | $ 64.0 | $ 429.9 | $ 251.2 | $ 322.9 | |
Earnings per common share - basic (in dollars per share) | $ 0.46 | $ 0.40 | $ 0.45 | $ 0.72 | $ 0.42 | $ 0.60 | $ 0.32 | $ 0.46 | $ 1.97 | $ 1.79 | $ 2.28 | |
Basic, rounding (in dollars per share) | (0.06) | (0.01) | ||||||||||
Earnings per common share - diluted (in dollars per share) (in dollars per share) | 0.46 | 0.39 | 0.44 | 0.70 | 0.41 | 0.59 | 0.31 | 0.45 | 1.94 | 1.76 | $ 2.24 | |
Diluted, rounding (in dollars per share) | (0.05) | |||||||||||
Cash dividends declared per common share | $ 0.0775 | $ 0.0775 | $ 0.0775 | $ 0.0775 | $ 0.0725 | $ 0.0725 | $ 0.0725 | $ 0.0725 | $ 0.31 | $ 0.29 | ||
Common Stock | Sirona Dental Systems Inc | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
DENTSPLY common stock issued for consideration | 101.8 |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Translation Adjustment | $ 175.3 | ||
Allowance for doubtful accounts | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 10.7 | $ 8.8 | $ 14.2 |
Additions - (credited) to costs and expenses | 9.2 | 4.3 | (1.7) |
Additions - charged to other accounts | 4.3 | 1.4 | 0.5 |
Write-offs Net of Recoveries | (2.5) | (2.2) | (2.4) |
Translation Adjustment | 1.0 | (1.6) | (1.8) |
Balance at End of Period | 22.7 | 10.7 | 8.8 |
Deferred tax asset valuation allowance | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 274.3 | 253.3 | 228.9 |
Additions - (credited) to costs and expenses | (99.9) | 26.7 | 28.7 |
Additions - charged to other accounts | 8.5 | 0.0 | 0.0 |
Write-offs Net of Recoveries | 0.0 | 0.0 | 0.0 |
Translation Adjustment | (0.2) | (5.7) | (4.3) |
Balance at End of Period | $ 182.7 | $ 274.3 | $ 253.3 |
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