|
|
|||||||
(State or other jurisdiction of
|
(I.R.S. Employer
|
|||||||
incorporation or organization)
|
Identification No.)
|
|||||||
|
||||||||
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
|
Accelerated filer ☐
|
||||
Non-accelerated filer ☐
|
Smaller reporting company
|
||||
Emerging growth company
|
Part I - Item 1. | Financial Statements (unaudited) | ||||
Part I - Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
Part I - Item 4. | Controls and Procedures | ||||
Part II - Item 1A. | Risk Factors | ||||
Part II - Item 6. | Exhibits |
Page | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
As Restated | As Restated | ||||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of products sold | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general, and administrative expenses | |||||||||||||||||||||||
Research and development expenses
|
|||||||||||||||||||||||
Goodwill impairment | |||||||||||||||||||||||
Restructuring and other costs | |||||||||||||||||||||||
Operating income (loss) | ( |
||||||||||||||||||||||
Other income and expenses: | |||||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Other expense (income), net | |||||||||||||||||||||||
Income (loss) before income taxes | ( |
||||||||||||||||||||||
Provision (benefit) for income taxes | ( |
||||||||||||||||||||||
Net income (loss) | ( |
||||||||||||||||||||||
Less: Net income attributable to noncontrolling interest | |||||||||||||||||||||||
Net income (loss) attributable to Dentsply Sirona | $ | $ | $ | $ | ( |
||||||||||||||||||
Net income (loss) per common share attributable to Dentsply Sirona: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | ( |
||||||||||||||||||
Diluted | $ | $ | $ | $ | ( |
||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
As Restated | As Restated | ||||||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | ( |
||||||||||||||||||
Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
Foreign currency translation (loss) gain | ( |
( |
|||||||||||||||||||||
Net gain (loss) on derivative financial instruments | ( |
( |
|||||||||||||||||||||
Pension liability gain | |||||||||||||||||||||||
Total other comprehensive (loss) income, net of tax | ( |
( |
|||||||||||||||||||||
Total comprehensive income (loss) | ( |
||||||||||||||||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests | |||||||||||||||||||||||
Total comprehensive income (loss) attributable to Dentsply Sirona | $ | $ | $ | $ | ( |
||||||||||||||||||
September 30, 2021 | December 31, 2020 | ||||||||||
As Restated | |||||||||||
Assets | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts and notes receivables-trade, net | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total Current Assets | |||||||||||
Property, plant, and equipment | |||||||||||
Operating lease right-of-use assets, net | |||||||||||
Identifiable intangible assets, net | |||||||||||
Goodwill | |||||||||||
Other noncurrent assets | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Equity | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Income taxes payable | |||||||||||
Notes payable and current portion of long-term debt | |||||||||||
Total Current Liabilities | |||||||||||
Long-term debt | |||||||||||
Operating lease liabilities | |||||||||||
Deferred income taxes | |||||||||||
Other noncurrent liabilities | |||||||||||
Total Liabilities | |||||||||||
Equity: | |||||||||||
Preferred stock, $
|
|||||||||||
Common stock, $
|
|||||||||||
|
|||||||||||
|
|||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( |
( |
|||||||||
Treasury stock, at cost,
|
( |
( |
|||||||||
Total Dentsply Sirona Equity | |||||||||||
Noncontrolling interests | |||||||||||
Total Equity | |||||||||||
Total Liabilities and Equity | $ | $ |
Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total Dentsply Sirona Equity |
Noncontrolling Interests |
Total Equity |
||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( |
— | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Funding of employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Treasury shares purchased | — | — | — | — | ( |
( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Restricted stock unit distributions | — | ( |
— | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Cash dividends ($
|
— | — | ( |
— | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit distributions | — | ( |
— | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Cash dividends ($
|
— | — | ( |
— | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | ( |
— | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Funding of employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit distributions | — | ( |
— | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Restricted stock unit dividends | — | ( |
— | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Cash dividends ($
|
— | — | ( |
— | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Balance at September
30, 2021, As Restated |
$ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||
Common Stock |
Capital in Excess of Par Value |
Retained Earnings |
Accumulated Other Comprehensive Loss |
Treasury Stock |
Total Dentsply Sirona Equity |
Noncontrolling Interests |
Total Equity |
||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net loss | — | — | ( |
— | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( |
— | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Funding of employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Treasury shares purchased | — | ( |
— | — | ( |
( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Restricted stock unit distributions | — | ( |
— | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Cash dividends ($
|
— | — | ( |
— | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net loss | — | — | ( |
— | — | ( |
( |
( |
|||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Treasury shares purchased | — | — | — | ( |
— | — | |||||||||||||||||||||||||||||||||||||||||
Restricted stock unit distributions | — | ( |
— | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Cash dividends ($
|
— | — | ( |
— | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock based compensation expense | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Funding of employee stock purchase plan | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Restricted stock unit distributions | — | ( |
— | — | ( |
— | ( |
||||||||||||||||||||||||||||||||||||||||
Cash dividends ($
|
— | — | ( |
— | — | ( |
— | ( |
|||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( |
$ | ( |
$ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
As Restated | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | $ | ( |
||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization of intangible assets | |||||||||||
Goodwill impairment | |||||||||||
Indefinite-lived intangible asset impairment | |||||||||||
Deferred income taxes | ( |
( |
|||||||||
Stock based compensation expense | |||||||||||
Other non-cash expense | |||||||||||
(Gain) loss on sale of non-strategic businesses and product lines | ( |
||||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts and notes receivable-trade, net | ( |
||||||||||
Inventories, net | ( |
||||||||||
Prepaid expenses and other current assets | ( |
||||||||||
Other noncurrent assets | ( |
||||||||||
Accounts payable | ( |
( |
|||||||||
Accrued liabilities | ( |
||||||||||
Income taxes | ( |
||||||||||
Other noncurrent liabilities | ( |
||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( |
( |
|||||||||
Cash paid for acquisitions of businesses and equity investments, net of cash acquired | ( |
( |
|||||||||
Cash received on sale of non-strategic businesses or product lines | |||||||||||
Cash received on derivative contracts | |||||||||||
Cash paid on derivative contracts | ( |
||||||||||
Proceeds from sale of property, plant, and equipment | |||||||||||
Net cash used in investing activities | ( |
( |
|||||||||
Cash flows from financing activities: | |||||||||||
Proceeds (repayments) on short-term borrowings, net | ( |
||||||||||
Cash paid for treasury stock | ( |
( |
|||||||||
Cash dividends paid | ( |
( |
|||||||||
Cash paid for acquisition of noncontrolling interest of consolidated subsidiary | ( |
||||||||||
Proceeds from long-term borrowings, net of deferred financing costs | |||||||||||
Repayments on long-term borrowings, net | ( |
( |
|||||||||
Deferred financing costs | ( |
||||||||||
Proceeds from exercised stock options | |||||||||||
Cash paid on derivative contracts | ( |
||||||||||
Other financing activities, net | ( |
( |
|||||||||
Net cash (used in) provided by financing activities | ( |
||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( |
( |
|||||||||
Net (decrease) increase in cash and cash equivalents | ( |
||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||
(in millions, except per share amounts) | As Previously Issued | Adjustment | As Restated | As Previously Issued | Adjustment | As Revised | ||||||||||||||||||||||||||||||||
Net sales | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
Cost of products sold | ( |
( |
||||||||||||||||||||||||||||||||||||
Gross profit | ( |
( |
||||||||||||||||||||||||||||||||||||
Selling, general, and administrative expenses | ( |
|||||||||||||||||||||||||||||||||||||
Research and development expenses | ||||||||||||||||||||||||||||||||||||||
Operating income | ( |
( |
||||||||||||||||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||||||||||||||
Other expense (income), net | ( |
|||||||||||||||||||||||||||||||||||||
Income before income taxes | ( |
( |
||||||||||||||||||||||||||||||||||||
Provision for income taxes | ( |
( |
||||||||||||||||||||||||||||||||||||
Net income | ( |
( |
||||||||||||||||||||||||||||||||||||
Net income attributable to Dentsply Sirona | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
Net income per common share attributable to Dentsply Sirona: | ||||||||||||||||||||||||||||||||||||||
Basic | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
Diluted | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||
(in millions, except per share amounts) | As Previously Issued | Adjustment | As Restated | As Previously Issued | Adjustment | As Revised | ||||||||||||||||||||||||||||||||
Net sales | $ | $ | ( |
$ | $ | $ | $ | |||||||||||||||||||||||||||||||
Cost of products sold | ( |
|||||||||||||||||||||||||||||||||||||
Gross profit | ( |
|||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | ( |
( |
||||||||||||||||||||||||||||||||||||
Research and development expenses | ||||||||||||||||||||||||||||||||||||||
Operating income (loss) | ( |
( |
( |
|||||||||||||||||||||||||||||||||||
Interest expense, net | ( |
|||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | ( |
( |
( |
|||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | ( |
( |
( |
|||||||||||||||||||||||||||||||||||
Net income (loss) | ( |
( |
( |
|||||||||||||||||||||||||||||||||||
Net income (loss) attributable to Dentsply Sirona | $ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||||||||||||||||
Net income (loss) per common share attributable to Dentsply Sirona: | ||||||||||||||||||||||||||||||||||||||
Basic | $ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||||||||||||||||
Diluted | $ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||||||||||||||||||||||
Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||
(in millions) | As Previously Issued | Adjustment | As Restated | As Previously Issued | Adjustment | As Revised | ||||||||||||||||||||||||||||||||
Net income | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
Total comprehensive income | ( |
( |
||||||||||||||||||||||||||||||||||||
Comprehensive income attributable to Dentsply Sirona | $ | $ | ( |
$ | $ | $ | ( |
$ |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||
(in millions) | As Previously Issued | Adjustment | As Restated | As Previously Issued | Adjustment | As Revised | ||||||||||||||||||||||||||||||||
Net income (loss) | $ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||||||||||||||||
Total comprehensive income (loss) | ( |
( |
( |
|||||||||||||||||||||||||||||||||||
Comprehensive income (loss) attributable to Dentsply Sirona | $ | $ | ( |
$ | $ | ( |
$ | $ | ( |
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||||||||||||||
September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||
(in millions) | As Previously Issued | Adjustment | As Restated | As Previously Issued | Adjustment | As Revised | ||||||||||||||||||||||||||||||||
Accounts and notes receivable-trade, net | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
Inventories, net | ||||||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||||||||||||||||||||||||||
Total Current Assets | ||||||||||||||||||||||||||||||||||||||
Other noncurrent assets | ||||||||||||||||||||||||||||||||||||||
Total Assets | ||||||||||||||||||||||||||||||||||||||
Accounts payable | ( |
( |
||||||||||||||||||||||||||||||||||||
Accrued liabilities | ||||||||||||||||||||||||||||||||||||||
Income taxes payable | ( |
( |
||||||||||||||||||||||||||||||||||||
Total Current Liabilities | ||||||||||||||||||||||||||||||||||||||
Deferred income taxes | ( |
( |
||||||||||||||||||||||||||||||||||||
Other noncurrent liabilities | ||||||||||||||||||||||||||||||||||||||
Total Liabilities | ||||||||||||||||||||||||||||||||||||||
Retained earnings | ( |
( |
||||||||||||||||||||||||||||||||||||
Total Dentsply Sirona Equity | ( |
( |
||||||||||||||||||||||||||||||||||||
Total Equity | ( |
( |
||||||||||||||||||||||||||||||||||||
Total Liabilities and Equity |
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||
(in millions) | As Previously Issued | Adjustment | As Restated | As Previously Issued | Adjustment | As Revised | ||||||||||||||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | $ | ( |
$ | $ | ( |
$ | $ | ( |
|||||||||||||||||||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||||||||||||||||
Other non-cash expense (income) | ( |
|||||||||||||||||||||||||||||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||||||||||||||||||||||||
Accounts and notes receivable-trade, net | ( |
( |
||||||||||||||||||||||||||||||||||||
Inventories, net | ( |
( |
( |
( |
||||||||||||||||||||||||||||||||||
Prepaid expenses and other current assets, net | ( |
( |
||||||||||||||||||||||||||||||||||||
Accounts payable | ( |
( |
( |
( |
( |
|||||||||||||||||||||||||||||||||
Accrued liabilities | ( |
( |
||||||||||||||||||||||||||||||||||||
Income taxes | ( |
( |
( |
|||||||||||||||||||||||||||||||||||
Other noncurrent liabilities | ( |
( |
||||||||||||||||||||||||||||||||||||
Net cash provided by operating activities | ||||||||||||||||||||||||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||||||||||||||||
Other financing activities, net | ( |
( |
( |
( |
( |
|||||||||||||||||||||||||||||||||
Net cash (used in) provided by financing activities | ( |
( |
( |
|||||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Equipment & Instruments | $ | $ | $ | $ | ||||||||||||||||||||||
CAD/CAM | ||||||||||||||||||||||||||
Orthodontics | ||||||||||||||||||||||||||
Implants | ||||||||||||||||||||||||||
Healthcare | ||||||||||||||||||||||||||
Technology & Equipment segment net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Endodontic & Restorative | $ | $ | $ | $ | ||||||||||||||||||||||
Other Consumables | ||||||||||||||||||||||||||
Consumables segment net sales | $ | $ | $ | $ | ||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
United States | $ | $ | $ | $ | ||||||||||||||||||||||
Europe | ||||||||||||||||||||||||||
Rest of World | ||||||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Cost of products sold
|
$ | $ | $ | $ | ||||||||||||||||||||||
Selling, general, and administrative expense | ||||||||||||||||||||||||||
Research and development expense | ||||||||||||||||||||||||||
Total stock based compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
Related deferred income tax benefit | $ | $ | $ | $ |
(in millions) | Foreign Currency Translation Gain (Loss) | Gain (Loss) on Cash Flow Hedges | Gain (Loss) on Net Investment and Fair Value Hedges | Pension Liability Gain (Loss) | Total | |||||||||||||||||||||||||||
Balance, net of tax, at December 31, 2020 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications and tax impact | ( |
( |
( |
|||||||||||||||||||||||||||||
Tax (expense) benefit | ( |
( |
( |
( |
||||||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax, before reclassifications | ( |
( |
( |
|||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
Net (decrease) increase in other comprehensive loss | ( |
( |
( |
|||||||||||||||||||||||||||||
Balance, net of tax, at March 31, 2021 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||
Other comprehensive income before reclassifications and tax impact | ||||||||||||||||||||||||||||||||
Tax benefit (expense) | ( |
( |
||||||||||||||||||||||||||||||
Other comprehensive income, net of tax, before reclassifications | ||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
Net increase in other comprehensive income | ||||||||||||||||||||||||||||||||
Balance, net of tax, at June 30, 2021 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications and tax impact | ( |
( |
||||||||||||||||||||||||||||||
Tax expense | ( |
( |
( |
( |
||||||||||||||||||||||||||||
Other comprehensive (loss) benefit, net of tax, before reclassifications | ( |
( |
||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
Net increase in other comprehensive (loss) income | ( |
( |
||||||||||||||||||||||||||||||
Balance, net of tax, at September 30, 2021 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
(in millions) | Foreign Currency Translation Gain (Loss) | Gain (Loss) on Cash Flow Hedges | Gain (Loss) on Net Investment and Fair Value Hedges | Pension Liability Gain (Loss) | Total | |||||||||||||||||||||||||||
Balance, net of tax, at December 31, 2019 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications and tax impact | ( |
( |
( |
|||||||||||||||||||||||||||||
Tax (expense) benefit | ( |
( |
( |
|||||||||||||||||||||||||||||
Other comprehensive (loss) income, net of tax, before reclassifications | ( |
( |
( |
|||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
Net (decrease) increase in other comprehensive income | ( |
( |
( |
|||||||||||||||||||||||||||||
Balance, net of tax, at March 31, 2020 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications and tax impact | ( |
|||||||||||||||||||||||||||||||
Tax (expense) benefit | ( |
|||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax, before reclassifications | ( |
|||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
Net increase (decrease) in other comprehensive income | ( |
|||||||||||||||||||||||||||||||
Balance, net of tax, at June 30, 2020 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications and tax impact | ( |
( |
||||||||||||||||||||||||||||||
Tax benefit (expense) | ( |
|||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax, before reclassifications | ( |
( |
||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | ||||||||||||||||||||||||||||||||
Net increase (decrease) in other comprehensive income | ( |
( |
||||||||||||||||||||||||||||||
Balance, net of tax, at September 30, 2020 | $ | ( |
$ | ( |
$ | ( |
$ | ( |
$ | ( |
Basic Earnings (Loss) Per Common Share | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
(in millions, except per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Net income (loss) attributable to Dentsply Sirona | $ | $ | $ | $ | ( |
|||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Earnings (loss) per common share - basic | $ | $ | $ | $ | ( |
|||||||||||||||||||||
Diluted Earnings (Loss) Per Common Share | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
(in millions, except per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Net income (loss) attributable to Dentsply Sirona | $ | $ | $ | $ | ( |
|||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Incremental weighted average shares from assumed exercise of dilutive options from stock-based compensation awards | ||||||||||||||||||||||||||
Total weighted average diluted shares outstanding | ||||||||||||||||||||||||||
Earnings (loss) per common share - diluted | $ | $ | $ | $ | ( |
Weighted Average | ||||||||||||||
Useful Life | ||||||||||||||
(in millions, except for useful life) | Amount | (in years) | ||||||||||||
In-process R&D | $ | Indefinite | ||||||||||||
Total | $ | |||||||||||||
(in millions) | |||||||||||
Other current assets | $ | ||||||||||
Intangible assets | |||||||||||
Current liabilities | ( |
||||||||||
Net assets acquired | |||||||||||
Goodwill | |||||||||||
Purchase consideration | $ |
Weighted Average | ||||||||||||||
Useful Life | ||||||||||||||
(in millions, except for useful life) | Amount | (in years) | ||||||||||||
Developed technology | $ | |||||||||||||
Total | $ | |||||||||||||
(in millions) | |||||||||||
Cash and cash equivalents | $ | ||||||||||
Other current assets | |||||||||||
Intangible assets | |||||||||||
Current liabilities | ( |
||||||||||
Other long-term assets (liabilities), net | ( |
||||||||||
Net assets acquired | |||||||||||
Goodwill | |||||||||||
Purchase consideration | $ |
Weighted Average | ||||||||||||||
Useful Life | ||||||||||||||
(in millions, except for useful life) | Amount | (in years) | ||||||||||||
Developed technology | $ |
|
||||||||||||
In-process R&D | Indefinite | |||||||||||||
Total | $ | |||||||||||||
(in millions) | |||||||||||
Cash and cash equivalents | $ | ||||||||||
Current assets | |||||||||||
Intangible assets | |||||||||||
Current liabilities | ( |
||||||||||
Net assets acquired | |||||||||||
Goodwill | |||||||||||
Purchase consideration | $ |
Weighted Average | ||||||||||||||
Useful Life | ||||||||||||||
(in millions, except for useful life) | Amount | (in years) | ||||||||||||
Non-compete agreements | $ | |||||||||||||
Technology know-how | ||||||||||||||
Tradenames and trademarks | ||||||||||||||
Total | $ | |||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Technologies & Equipment | $ | $ | $ | $ | ||||||||||||||||||||||
Consumables | ||||||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Technologies & Equipment (a)
|
$ | $ | $ | $ | ||||||||||||||||||||||
Consumables (a)
|
||||||||||||||||||||||||||
Segment adjusted operating income (loss) | ||||||||||||||||||||||||||
Reconciling items expense (income): | ||||||||||||||||||||||||||
All other (b)
|
||||||||||||||||||||||||||
Goodwill impairment | ||||||||||||||||||||||||||
Restructuring and other costs | ||||||||||||||||||||||||||
Interest expense, net | ||||||||||||||||||||||||||
Other expense (income), net | ||||||||||||||||||||||||||
Amortization of intangible assets | ||||||||||||||||||||||||||
Depreciation and other adjustments resulting from the fair value step-up of property, plant, and equipment from business combinations | ( |
|||||||||||||||||||||||||
Income (loss) before income taxes | $ | $ | $ | $ | ( |
(in millions) | September 30, 2021 | December 31, 2020 | ||||||||||||
Finished goods | $ | $ | ||||||||||||
Work-in-process | ||||||||||||||
Raw materials and supplies | ||||||||||||||
Inventories, net | $ | $ |
Affected Line Item in the Consolidated Statements of Operations | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
Cost of products sold | $ | $ | $ | ( |
$ | |||||||||||||||||||||
Selling, general, and administrative expenses | ||||||||||||||||||||||||||
Restructuring and other costs | ||||||||||||||||||||||||||
Total restructuring and other costs | $ | $ | $ | $ |
Severance | ||||||||||||||||||||||||||
(in millions) | 2019 and Prior Plans |
2020 Plans | 2021 Plans | Total | ||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ||||||||||||||||||||||
Provisions | ||||||||||||||||||||||||||
Amounts applied | ( |
( |
( |
( |
||||||||||||||||||||||
Change in estimates | ( |
( |
( |
|||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ |
Other Restructuring Costs | ||||||||||||||||||||||||||
(in millions) | 2019 and Prior Plans |
2020 Plans | 2021 Plans | Total | ||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ||||||||||||||||||||||
Provisions | ||||||||||||||||||||||||||
Amounts applied | ( |
( |
( |
( |
||||||||||||||||||||||
Change in estimate | ( |
( |
||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ |
(in millions) | December 31, 2020 | Provisions | Amounts Applied |
Change in Estimates | September 30, 2021 | |||||||||||||||||||||||||||
Technologies & Equipment | $ | $ | $ | ( |
$ | ( |
$ | |||||||||||||||||||||||||
Consumables | ( |
( |
||||||||||||||||||||||||||||||
All Other | ( |
|||||||||||||||||||||||||||||||
Total | $ | $ | $ | ( |
$ | ( |
$ |
(in millions) | Aggregate Notional Amount | Aggregate Notional Amount Maturing within 12 Months | ||||||||||||
Cash Flow Hedges | ||||||||||||||
Foreign exchange forward contracts | $ | $ | ||||||||||||
Total derivative instruments designated as cash flow hedges | $ | $ | ||||||||||||
Hedges of Net Investments | ||||||||||||||
Foreign exchange forward contracts | $ | $ | ||||||||||||
Cross currency basis swaps | ||||||||||||||
Total derivative instruments designated as hedges of net investments | $ | $ | ||||||||||||
Fair Value Hedges | ||||||||||||||
Interest Rate Swaps | $ | $ | ||||||||||||
Foreign exchange forward contracts | ||||||||||||||
Total derivative instruments designated as fair value hedges | $ | $ | ||||||||||||
Derivative Instruments not Designated as Hedges | ||||||||||||||
Foreign exchange forward contracts | $ | $ | ||||||||||||
Total derivative instruments not designated as hedges | $ | $ | ||||||||||||
Three Months Ended September 30, 2021
|
||||||||||||||||||||||||||
(in millions) | Gain (Loss) recognized in AOCI | Consolidated Statements of Operations Location | Effective Portion Reclassified from AOCI into Income (Expense) | Recognized in Income (Expense) | ||||||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | Cost of products sold | $ | ( |
$ | |||||||||||||||||||||
Interest rate swaps | Interest expense, net | ( |
||||||||||||||||||||||||
Total for cash flow hedging | $ | $ | ( |
$ | ||||||||||||||||||||||
Hedges of Net Investments
|
||||||||||||||||||||||||||
Cross currency basis swaps | $ | ( |
Interest expense, net | $ | $ | |||||||||||||||||||||
Foreign exchange forward contracts | Other expense (income), net | |||||||||||||||||||||||||
Total for net investment hedging | $ | $ | $ | |||||||||||||||||||||||
Fair Value Hedges
|
||||||||||||||||||||||||||
Interest rate swaps | $ | Interest expense, net | $ | $ | ||||||||||||||||||||||
Foreign exchange forward contracts | Other expense (income), net | |||||||||||||||||||||||||
Total for fair value hedging | $ | $ | $ | |||||||||||||||||||||||
Three Months Ended September 30, 2020
|
||||||||||||||||||||||||||
(in millions) | Gain (Loss) recognized in AOCI | Consolidated Statements of Operations Location | Effective Portion Reclassified from AOCI into Income (Expense) | Recognized in Income (Expense) | ||||||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | ( |
Cost of products sold | $ | $ | |||||||||||||||||||||
Interest rate swaps | Interest expense, net | ( |
||||||||||||||||||||||||
Total for cash flow hedging | $ | ( |
$ | ( |
$ | |||||||||||||||||||||
Hedges of Net Investments
|
||||||||||||||||||||||||||
Cross currency basis swaps | $ | ( |
Interest expense, net | $ | $ | |||||||||||||||||||||
Total for net investment hedging | $ | ( |
$ | $ | ||||||||||||||||||||||
Nine Months Ended September 30, 2021
|
||||||||||||||||||||||||||
(in millions) | Gain (Loss) recognized in AOCI | Consolidated Statements of Operations Location | Effective Portion Reclassified from AOCI into Income (Expense) | Recognized in Income (Expense) | ||||||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | Cost of products sold | $ | ( |
$ | |||||||||||||||||||||
Interest rate swaps | Interest expense, net | ( |
||||||||||||||||||||||||
Total for cash flow hedging | $ | $ | ( |
$ | ||||||||||||||||||||||
Hedges of Net Investments
|
||||||||||||||||||||||||||
Cross currency basis swaps | $ | Interest expense, net | $ | $ | ||||||||||||||||||||||
Foreign exchange forward contracts | Other expense (income), net | |||||||||||||||||||||||||
Total for net investment hedging | $ | $ | $ | |||||||||||||||||||||||
Fair Value Hedges
|
||||||||||||||||||||||||||
Interest rate swaps | $ | Interest expense, net | $ | $ | ||||||||||||||||||||||
Foreign exchange forward contracts | Other expense (income), net | |||||||||||||||||||||||||
Total for fair value hedging | $ | $ | $ | |||||||||||||||||||||||
Nine Months Ended September 30, 2020
|
||||||||||||||||||||||||||
(in millions) | Gain (Loss) recognized in AOCI | Consolidated Statements of Operations Location | Effective Portion Reclassified from AOCI into Income (Expense) | Recognized in Income (Expense) | ||||||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | ( |
Cost of products sold | $ | $ | |||||||||||||||||||||
Interest rate swaps | ( |
Interest expense, net | ( |
|||||||||||||||||||||||
Total for cash flow hedging | $ | ( |
$ | ( |
$ | |||||||||||||||||||||
Hedges of Net Investments
|
||||||||||||||||||||||||||
Cross currency basis swaps | $ | ( |
Interest expense, net | $ | $ | |||||||||||||||||||||
Foreign exchange forward contracts | Other expense (income), net | |||||||||||||||||||||||||
Total for net investment hedging | $ | ( |
$ | $ | ||||||||||||||||||||||
September 30, 2021 | ||||||||||||||||||||||||||
(in millions) | Prepaid Expenses and Other Current Assets | Other Noncurrent Assets | Accrued Liabilities | Other Noncurrent Liabilities | ||||||||||||||||||||||
Designated as Hedges: | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Interest rate swaps | ||||||||||||||||||||||||||
Cross currency basis swaps | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Not Designated as Hedges: | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
(in millions) | Prepaid Expenses and Other Current Assets | Other Noncurrent Assets | Accrued Liabilities | Other Noncurrent Liabilities | ||||||||||||||||||||||
Designated as Hedges: | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Cross currency basis swaps | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Not Designated as Hedges: | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total | $ | $ | $ | $ |
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 | $ | $ | $ | $ | ( |
$ | $ | |||||||||||||||||||||||||||||||
Interest rate swaps | ( |
|||||||||||||||||||||||||||||||||||||
Cross currency basis swaps | ( |
|||||||||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ( |
$ | $ | |||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | $ | $ | $ | ( |
$ | $ | |||||||||||||||||||||||||||||||
Interest rate swaps | ( |
|||||||||||||||||||||||||||||||||||||
Cross currency basis swaps | ( |
|||||||||||||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | ( |
$ | $ |
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 | $ | $ | $ | $ | ( |
$ | $ | |||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ( |
$ | $ | |||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Interest rate swaps | ( |
|||||||||||||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | ( |
$ | $ |
September 30, 2021 | ||||||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Cross currency basis swaps | ||||||||||||||||||||||||||
Foreign exchange forward contracts | ||||||||||||||||||||||||||
Long-term debt | ||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Cross currency basis swaps | ||||||||||||||||||||||||||
Foreign exchange forward contracts | ||||||||||||||||||||||||||
Contingent considerations on acquisitions | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ |
December 31, 2020 | ||||||||||||||||||||||||||
(in millions) | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Foreign exchange forward contracts | $ | $ | $ | $ | ||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Cross currency basis swaps | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign exchange forward contracts | ||||||||||||||||||||||||||
Contingent considerations on acquisitions | ||||||||||||||||||||||||||
Total liabilities | $ | $ | $ | $ | ||||||||||||||||||||||
(in millions) | Technologies & Equipment | Consumables | Total | |||||||||||||||||
Balance at December 31, 2020 | ||||||||||||||||||||
Goodwill | $ | $ | $ | |||||||||||||||||
Accumulated impairment losses | ( |
( |
||||||||||||||||||
Goodwill, net | $ | $ | $ | |||||||||||||||||
Acquisition related additions (a) | ||||||||||||||||||||
Translation and other | ( |
( |
||||||||||||||||||
Balance at September 30, 2021 | ||||||||||||||||||||
Goodwill | $ | $ | $ | |||||||||||||||||
Accumulated impairment losses | ( |
( |
||||||||||||||||||
Goodwill, net | $ | $ | $ |
September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||||
(in millions) | Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
Gross Carrying Amount |
Accumulated Amortization |
Net Carrying Amount |
||||||||||||||||||||||||||||||||
Developed technology and patents | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
Tradenames and trademarks | ( |
( |
||||||||||||||||||||||||||||||||||||
Licensing agreements | ( |
( |
||||||||||||||||||||||||||||||||||||
Customer relationships | ( |
( |
||||||||||||||||||||||||||||||||||||
Total definite-lived | $ | $ | ( |
$ | $ | $ | ( |
$ | ||||||||||||||||||||||||||||||
Indefinite-lived tradenames and trademarks | $ | $ | — | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||
In-process R&D (a)
|
— | — | ||||||||||||||||||||||||||||||||||||
Total indefinite-lived | $ | $ | — | $ | $ | $ | — | $ | ||||||||||||||||||||||||||||||
Total identifiable intangible assets | $ | $ | ( |
$ | $ | $ | ( |
$ |
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Net sales | $ | 1,040 | $ | 883 | $ | 157 | 17.8 | % | ||||||||||||||||||
% Change | ||||||||
Net sales | 17.8 | % | ||||||
Foreign exchange impact | 1.3 | % | ||||||
Acquisitions | 4.4 | % | ||||||
Divestitures and discontinued products | (7.3 | %) | ||||||
Organic sales | 19.4 | % | ||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Technologies & Equipment | $ | 612 | $ | 497 | $ | 115 | 23.0 | % |
% Change | ||||||||
Net sales | 23.0 | % | ||||||
Foreign exchange impact | 1.2 | % | ||||||
Acquisitions | 7.8 | % | ||||||
Divestitures and discontinued products | (9.3 | %) | ||||||
Organic sales | 23.3 | % | ||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Consumables | $ | 428 | $ | 386 | $ | 42 | 11.1 | % |
% Change | ||||||||
Net sales | 11.1% | |||||||
Foreign exchange impact | 1.3% | |||||||
Divestitures and discontinued products | (4.7%) | |||||||
Organic sales | 14.5% | |||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Technologies & Equipment (c)
|
$ | 134 | $ | 122 | $ | 12 | 9.8 | % | ||||||||||||||||||
Consumables (c)
|
123 | 114 | 9 | 7.9 | % |
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
United States | $ | 384 | $ | 312 | $ | 72 | 23.8 | % |
% Change | ||||||||
Net sales | 23.8 | % | ||||||
Foreign exchange impact | (0.1 | %) | ||||||
Acquisitions | 11.5 | % | ||||||
Divestitures and discontinued products | (6.0 | %) | ||||||
Organic sales | 18.4 | % | ||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Europe | $ | 393 | $ | 346 | $ | 47 | 12.9 | % |
% Change | ||||||||
Net sales | 12.9 | % | ||||||
Foreign exchange impact | 1.8 | % | ||||||
Acquisitions | 0.1 | % | ||||||
Divestitures and discontinued products | (6.1 | %) | ||||||
Organic sales | 17.1% | |||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Rest of World | $ | 263 | $ | 225 | $ | 38 | 17.0 | % |
% Change | ||||||||
Net sales | 17.0 | % | ||||||
Foreign exchange impact | 2.3 | % | ||||||
Acquisitions | 1.1 | % | ||||||
Divestitures and discontinued products | (10.9 | %) | ||||||
Organic sales | 24.5 | % | ||||||
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Gross profit | $ | 569 | $ | 432 | $ | 137 | 31.5% | |||||||||||||||||||
Gross profit as a percentage of net sales | 54.7% | 49.0% |
Three Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Selling, general and administrative expenses (“SG&A”) | $ | 395 | $ | 313 | $ | 82 | 25.9 | % | ||||||||||||||||||
Research and development expenses (“R&D”) | 39 | 29 | 10 | 35.6 | % | |||||||||||||||||||||
Restructuring and other costs | 3 | 18 | (15) | NM | ||||||||||||||||||||||
SG&A as a percentage of net sales | 37.9 | % | 35.4 | % | ||||||||||||||||||||||
R&D as a percentage of net sales | 3.7 | % | 3.2 | % |
Three Months Ended September 30, | ||||||||||||||||||||
(in millions) | 2021(a) | 2020 | $ Change | |||||||||||||||||
Net interest expense | $ | 14 | $ | 14 | $ | — | ||||||||||||||
Other expense (income), net | 5 | 1 | 4 | |||||||||||||||||
Net interest and other expense (income) | $ | 19 | $ | 15 | $ | 4 |
Three Months Ended September 30, | ||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | |||||||||||||||||
Provision for income taxes | $ | 29 | $ | 9 | $ | 20 | ||||||||||||||
Effective income tax rate | 25.8 | % | 16.4 | % | ||||||||||||||||
Net income attributable to Dentsply Sirona | $ | 84 | $ | 47 | $ | 37 | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Net sales | $ | 3,128 | $ | 2,263 | $ | 865 | 38.2 | % | ||||||||||||||||||
% Change | ||||||||
Net sales | 38.2 | % | ||||||
Foreign exchange impact | 4.8 | % | ||||||
Acquisitions | 6.3 | % | ||||||
Divestitures and discontinued products | (6.9 | %) | ||||||
Organic sales | 34.0 | % | ||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Technologies & Equipment | $ | 1,824 | $ | 1,327 | $ | 497 | 37.4% |
% Change | ||||||||
Net sales | 37.4% | |||||||
Foreign exchange impact | 5.1% | |||||||
Acquisitions | 10.8% | |||||||
Divestitures and discontinued products | (8.0%) | |||||||
Organic sales | 29.5% | |||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Consumables | $ | 1,304 | $ | 936 | $ | 368 | 39.3% |
% Change | ||||||||
Net sales | 39.3% | |||||||
Foreign exchange impact | 4.5% | |||||||
Divestitures and discontinued products | (5.3%) | |||||||
Organic sales | 40.1% | |||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Technologies & Equipment (b)
|
$ | 391 | $ | 231 | $ | 160 | NM | |||||||||||||||||||
Consumables (b)
|
426 | 166 | 260 | NM |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
United States | $ | 1,094 | $ | 758 | $ | 336 | 44.5 | % |
% Change | ||||||||
Net sales | 44.5 | % | ||||||
Foreign exchange impact | 0.8 | % | ||||||
Acquisitions | 18.1 | % | ||||||
Divestitures and discontinued products | (6.6 | %) | ||||||
Organic sales | 32.2 | % | ||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Europe | $ | 1,239 | $ | 934 | $ | 305 | 32.4 | % |
% Change | ||||||||
Net sales | 32.4 | % | ||||||
Foreign exchange impact | 7.6 | % | ||||||
Divestitures and discontinued products | (5.8 | %) | ||||||
Organic sales | 30.6 | % | ||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Rest of World | $ | 795 | $ | 571 | $ | 224 | 39.4 | % |
% Change | ||||||||
Net sales | 39.4 | % | ||||||
Foreign exchange impact | 5.6 | % | ||||||
Acquisitions | 1.0 | % | ||||||
Divestitures and discontinued products | (9.2 | %) | ||||||
Organic sales | 42.0 | % | ||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Gross profit | $ | 1,743 | $ | 1,089 | $ | 654 | 60.0 | % | ||||||||||||||||||
Gross profit as a percentage of net sales | 55.7 | % | 48.1 | % |
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | % Change | ||||||||||||||||||||||
Selling, general and administrative expenses (“SG&A”) | $ | 1,174 | $ | 929 | $ | 245 | 26.3 | % | ||||||||||||||||||
Research and development expenses (“R&D”) | 122 | 85 | 37 | 43.8 | % | |||||||||||||||||||||
Goodwill impairment | — | 157 | (157) | NM | ||||||||||||||||||||||
Restructuring and other costs | 11 | 62 | (51) | NM | ||||||||||||||||||||||
SG&A as a percentage of net sales | 37.5 | % | 41.1 | % | ||||||||||||||||||||||
R&D as a percentage of net sales | 3.9 | % | 3.7 | % |
Nine Months Ended September 30, | ||||||||||||||||||||
(in millions) | 2021(a) | 2020 | Change | |||||||||||||||||
Net interest expense | $ | 43 | $ | 31 | $ | 12 | ||||||||||||||
Other expense (income), net | 4 | 4 | — | |||||||||||||||||
Net interest and other expense | $ | 47 | $ | 35 | $ | 12 |
Nine Months Ended September 30, | ||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | |||||||||||||||||
Provision (benefit) for income taxes | $ | 97 | $ | (1) | $ | 98 | ||||||||||||||
Effective income tax rate | 24.9 | % | 0.5 |
% | ||||||||||||||||
Net income (loss) attributable to Dentsply Sirona | $ | 292 | $ | (178) | $ | 470 | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||
(in millions, except percentages) | 2021(a) | 2020 | $ Change | |||||||||||||||||
Cash provided by (used in): | ||||||||||||||||||||
Operating activities | $ | 435 | $ | 385 | $ | 50 | ||||||||||||||
Investing activities | (319) | (5) | (314) | |||||||||||||||||
Financing activities | (257) | 491 | (748) | |||||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | (16) | (4) | (12) | |||||||||||||||||
Net (decrease) increase in cash and cash equivalents | $ | (157) | $ | 867 | $ | (1,024) | ||||||||||||||
(in millions, except percentages) | September 30, 2021(a) | December 31, 2020 | ||||||||||||
Current portion of debt | $ | 151 | $ | 299 | ||||||||||
Long-term debt | 1,925 | 1,978 | ||||||||||||
Less: Cash and cash equivalents | 281 | 438 | ||||||||||||
Net debt | $ | 1,795 | $ | 1,839 | ||||||||||
Total equity | 5,063 | 4,935 | ||||||||||||
Total capitalization | $ | 6,858 | $ | 6,774 | ||||||||||
Total net debt to total capitalization ratio | 26.2 | % | 27.1 | % |
Exhibit Number | Description | |||||||
Section 302 Certification Statement Chief Executive Officer | ||||||||
Section 302 Certification Statement Chief Financial Officer | ||||||||
Section 906 Certification Statements | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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 | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
/s/ | Glenn G. Coleman | November 7, 2022 | |||||||||
Glenn G. Coleman | Date | ||||||||||
Executive Vice President and | |||||||||||
Chief Financial Officer |
|
1.
|
I have
reviewed this Form 10-Q/A 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 officer 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 officer 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/
|
Simon D. Campion |
Simon D. Campion | |
Chief Executive Officer |
|
1.
|
I have
reviewed this Form 10-Q/A 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 officer 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 officer 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/
|
Glenn G. Coleman |
Glenn G. Coleman | |
Executive Vice President and | |
Chief Financial Officer |
|
1.
|
The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly
presents, in all material respects, the financial condition and result of operations of the Company as of the date of the Report.
|
/s/
|
Simon D. Campion |
Simon D. Campion | |
Chief Executive Officer |
/s/
|
Glenn G. Coleman |
Glenn G. Coleman | |
Executive Vice President and | |
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Nov. 02, 2021 |
|
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | Dentsply Sirona Inc. (“Dentsply Sirona” or the “Company”) is filing this Amendment No. 1 to the Quarterly Report on Form 10-Q (this “Form 10-Q/A”) for the quarter ended September 30, 2021, originally filed with the Securities and Exchange Commission (the “SEC”) on November 4, 2021 (the “Form 10-Q” or “Original Filing”), to make certain changes described below. Restatement On October 29, 2022, the Company, in consultation with the Audit and Finance Committee of its Board of Directors (the “Audit and Finance Committee”), reached a determination that the Company’s consolidated financial statements and related disclosures for the three and nine months ended September 30, 2021 and for the fiscal year ended December 31, 2021 should no longer be relied upon because of certain misstatements contained in those financial statements. The Company has determined that it is appropriate to correct the misstatements in the Company’s previously issued financial statements by amending the Original Filing and its Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 Form 10-K”). The Audit and Finance Committee and management also discussed this conclusion with the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”). As first disclosed in the Company’s Form 12b-25 filed on May 10, 2022, the Audit and Finance Committee has been conducting an internal investigation into certain financial reporting matters. That investigation has been completed, and the results are discussed below in this Explanatory Note. As a result of a separate but concurrent review by the Company of the accounting for various customer incentive arrangements unrelated to the transactions subject to the internal investigation (the “Accounting Review”), management identified errors related to certain customer incentive programs. During the Accounting Review, it was also determined that the Company utilized incorrect accounting and assumptions in the determination of estimates related to its sales returns provisions, warranty reserve provisions and variable consideration. Management identified misstatements for the three and nine months ended September 30, 2021 and for the fiscal year ended December 31, 2021, in each case, that the Company deemed to be material when considered together with certain qualitative and quantitative considerations such as the fact that the misstatements masked a failure to meet internal financial targets and external financial analyst expectations for the three months ended September 30, 2021 and due to the material weaknesses identified through the course of the Audit and Finance Committee’s investigation. For a more detailed discussion of the correction of these accounting errors, refer to Note 1 Significant Accounting Policies and Restatement to the consolidated financial statements of the Company included in Part I, Item 1 of this Form 10-Q/A. For more information about the specific material weaknesses in internal control over financial reporting and the Company’s remedial actions, please see Part I, Item 4 Controls and Procedures of this Form 10-Q/A. Audit and Finance Committee’s Investigation North America Investigation On May 10, 2022, the Company announced that the Audit and Finance Committee, assisted by independent legal counsel and forensic accountants, commenced an internal investigation in March 2022 of allegations regarding certain financial reporting matters submitted by current and former employees of the Company. The Audit and Finance Committee’s investigation was focused on the Company’s use of incentives to sell products to certain distributors in North America in the third and fourth quarters of 2021, whether those incentives were appropriately accounted for, and whether the impact of the sales to which they were applied were adequately disclosed in the Company’s periodic reports filed with the SEC. The Audit and Finance Committee also investigated allegations that certain former members of senior management may have directed the Company’s use of these incentives and other actions to achieve executive compensation targets in 2021. We refer to this portion of the Audit and Finance Committee’s investigation as the North America Investigation. In the North America Investigation, the Audit and Finance Committee concluded that there was no evidence of intentional wrongdoing or fraud. The Audit and Finance Committee determined that certain former members of senior management, including the Company’s former Chief Executive Officer and former Chief Financial Officer, violated provisions of the Company’s Code of Ethics and Business Conduct. In addition, these former members of senior management did not maintain and promote an appropriate control environment focused on compliance in areas of the Company’s business, nor did they sufficiently promote, monitor or enforce adherence to the Code of Ethics and Business Conduct. The North America Investigation found that certain former members of senior management, including the former Chief Executive Officer and the former Chief Financial Officer, created a culture where employees did not feel comfortable raising concerns without fear of retaliation. In addition, the North America Investigation substantiated certain allegations regarding inappropriate tone at the top by the former Chief Executive Officer and the former Chief Financial Officer. The North America Investigation identified instances in which the Company’s distributors in North America were offered incremental incentives, including extended payment terms, to purchase products in order for the Company to attempt to meet certain internal sales targets in the third and fourth quarters of 2021. These incentives were offered in conjunction with net sales transactions amounting to approximately $38 million and $70 million in the third and fourth quarters of 2021, respectively, which in turn contributed to higher levels of distributor inventory at the end of such periods, and lower sales to these distributors in the first and second quarters of 2022. The North America Investigation’s analysis of the incremental incentives and related sales, which included examination of documents supporting the accounting and revenue recognition for both the incentives and related sales, identified two insignificant accrual errors. However, these incremental incentives and the sales to which they applied contributed to the Company’s ability to meet external financial analyst expectations in the third quarter of 2021. The North America Investigation also found that there were inadequate processes in place for approval of these incentives and that the Company also had inadequate processes for maintaining or providing copies of agreements or arrangements with distributors to the accounting department. The North America Investigation noted potential omissions in public disclosures made by the Company regarding the use of these incentives or their potential future impacts in the third and fourth quarters of 2021. However, the North America Investigation did not find evidence that the former Chief Executive Officer and former Chief Financial Officer specifically directed the Company’s use of incentives to achieve executive compensation targets in 2021. Additionally, the investigation noted that the Company’s independent registered accounting firm was not informed of these incremental incentive arrangements in conjunction with the 2021 audit of the consolidated financial statements. Finally, the North America Investigation also identified findings regarding potential control deficiencies. For more information about these material weaknesses and other identified material weaknesses in internal control over financial reporting and the Company’s remedial actions, please see Part I, Item 4 Controls and Procedures of this Form 10-Q/A. Based on the results of the North America Investigation, the Company further analyzed these product shipments and corresponding incentive arrangements between the Company and its distributors and determined that, with the exception of the errors pertaining to the Accounting Review described above, sales were properly recorded in each of the respective periods in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). China Investigation While the North America Investigation was ongoing, the Audit and Finance Committee was informed in June 2022 that the Company had identified higher returns of products from distributors in China during the fourth quarter of 2021 that did not align with historical trends identified through an operational audit executed by the Company’s Corporate Audit department. Accordingly, the Audit and Finance Committee determined that the scope of the internal investigation should be expanded to analyze the increase in returns of products in China during the fourth quarter of 2021. We refer to this portion of the Audit and Finance Committee’s investigation as the China Investigation. The China Investigation found that the Company processed returns and/or exchanges that were not in accordance with the return and/or exchange provisions contained in existing distributor agreements and sales contracts in China. The China Investigation also found that members of the Company’s local commercial team in China failed to provide information requested by the Company’s local accounting organization in connection with the return and/or exchange of products in China during the fourth quarter of 2021. The China Investigation concluded that these employees, as well as the head of the Company’s Asia-Pacific commercial organization, committed intentional wrongdoing by failing to provide requested information to the Company’s local accounting organization, by obstructing the work of the accounting team, and by lacking truthfulness in providing information to the Company and to the Audit and Finance Committee as part of the China Investigation. The China Investigation also determined that these actions by certain members of the Company’s local commercial team in China, as well as the former Chief Financial Officer and the head of the Company’s Asia-Pacific commercial organization, violated the Company’s Code of Ethics and Business Conduct. These employees, including the head of the Company’s Asia-Pacific commercial organization, also did not maintain and promote an appropriate control environment in certain areas of the Company’s business focused on compliance, nor did they sufficiently promote, monitor or enforce adherence to the Company’s Code of Ethics and Business Conduct. The China Investigation also identified concerns regarding control deficiencies, including ineffective communication among the China commercial operations, financial planning & analysis (“FP&A”) and accounting teams, resulting in a heightened risk of incomplete or insufficient information required to maintain accurate books and records related to incentive provisions, specifically concerning expanded concessions regarding the return or exchange of products from distributors. For more information about the specific material weaknesses in internal control over financial reporting and the Company’s remedial actions, please see Part I, Item 4 Controls and Procedures of this Form 10-Q/A. The failure to appropriately account for these returns and/or exchanges and allowing for the product exchanges referred to above resulted in an overstatement of Net sales in the third quarter of 2021 of approximately $4 million which should have been recorded in the fourth quarter of 2021, and is reflected in the restated interim financial statements for the three and nine month periods ended September 30, 2021 included in this form 10-Q/A. For a more detailed discussion of the correction of these accounting errors, refer to Note 1, Significant Accounting Policies and Restatement to the consolidated financial statements of the Company included in Part I, Item 1 of this Form 10-Q/A. Controls and Procedures In connection with the restatement of the financial statements and related disclosures for the three and nine months ended September 30, 2021 and for the fiscal year ended December 31, 2021, management re-evaluated the effectiveness of the Company’s internal control over financial reporting and identified material weaknesses in the Company’s internal control over financial reporting as of September 30, 2021. The Company’s current Chief Executive Officer and current Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of September 30, 2021, due to the material weaknesses described in Part I, Item 4 of this Form 10-Q/A. Accordingly, the Company is filing this Form 10-Q/A to amend management’s assessment of the Company’s disclosure controls and procedures to conclude that they were not effective due to the identification of material weaknesses as of September 30, 2021. Additionally, the Company is amending Part I, Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations to provide additional disclosure regarding the future impact of certain incremental incentive arrangements identified in the North America Investigation. Amendment to Form 10-Q In accordance with Rule 12b-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the following Items of the Original Filing have been amended and restated and the complete text of those is set out in this Form 10-Q/A: Part I - Item 1. Financial Statements (unaudited) Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Part I - Item 4. Controls and Procedures Part II - Item 1A. Risk Factors Part II - Item 6. Exhibits Please note that the only changes to the Original Filing are those related to the matters described herein and only in the Items listed above. Item 1A "Risk Factors" has been updated to reflect risks as of the date of this amended filing. Except as described above, no changes have been made to the Original Filing, and this Form 10-Q/A does not modify, amend or update any of the other financial information or other information contained in the Original Filing. In addition, in accordance with SEC rules, this Form 10-Q/A includes updated certifications from our Chief Executive Officer and Chief Financial Officer as Exhibits 31.1, 31.2 and 32. Otherwise, the information contained in this Form 10-Q/A is as of the date of the Original Filing and does not reflect any information or events occurring after the date of the Original Filing. Such subsequent information or events include, among others, the information and events described in the Company’s Amendment No. 1 on Form 10-K/A filed on November 7, 2022 (the “Form 10-K/A”), our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2022 and June 30, 2022, each of which are being filed concurrently with this Form 10-Q/A, and the information and events described in our Current Reports on Form 8-K filed subsequent to the date of the Original Filing. For a description of such subsequent information and events, please read our reports filed pursuant to the Exchange Act subsequent to the date of the Original Filing, which update and supersede certain information contained in the Original Filing and this Form 10-Q/A. | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 0-16211 | |
Entity Registrant Name | DENTSPLY SIRONA Inc. | |
Entity Central Index Key | 0000818479 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 39-1434669 | |
Entity Address, Address Line One | 13320 Ballantyne Corporate Place | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28277-3607 | |
City Area Code | 844 | |
Local Phone Number | 848-0137 | |
Title of 12(b) Security | Common Stock, par value $.01 per share | |
Trading Symbol | XRAY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 218,607,026 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 84 | $ 48 | $ 292 | $ (178) |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation (loss) gain | (68) | 84 | (130) | 40 |
Net gain (loss) on derivative financial instruments | 10 | (19) | 19 | (22) |
Pension liability gain | 2 | 2 | 8 | 5 |
Net (decrease) increase in other comprehensive loss | (56) | 67 | (103) | 23 |
Total comprehensive income (loss) | 28 | 115 | 189 | (155) |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 | 0 | 0 |
Total comprehensive income (loss) attributable to Dentsply Sirona | $ 28 | $ 115 | $ 189 | $ (155) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized (in shares) | 250,000 | 250,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 264,500,000 | 264,500,000 |
Common stock, shares outstanding (in shares) | 218,600,000 | 218,700,000 |
Treasury stock, shares (in shares) | 45,900,000 | 45,800,000 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
|
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividends (in dollars per share) | $ 0.11 | $ 0.11 | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT
ACCOUNTING POLICIES AND RESTATEMENT
Basis of Presentation
The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and the rules of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments (consisting only
of normal recurring adjustments) considered necessary for a fair statement of the results for interim periods have been included. Results for interim periods should not be considered indicative of results for a full year. These financial
statements and related notes contain the accounts of DENTSPLY SIRONA Inc. and subsidiaries (“Dentsply Sirona” or the “Company”) on a consolidated basis and should be read in conjunction with the consolidated financial statements and notes
included in the Company’s Amendment No. 1 on Form 10-K/A filed on November 7, 2022 (the “Form 10-K/A”) to amend its Annual Report on Form 10-K for the fiscal year ended December
31, 2021, originally filed with the Securities and Exchange Commission on March 1, 2022, to make certain changes described below.
The accounting policies of the Company, as applied in the interim consolidated
financial statements presented herein, are substantially the same as presented in the Company’s Form 10-K/A, except as may be indicated below. Certain prior period amounts within the Consolidated Statements of Operations have been reclassified in
order to conform with the current year presentation of separately reported Research and development expenses.
Restatement and Other Corrections of Previously Issued Consolidated Financial Statements
Subsequent to the issuance of the Company’s consolidated financial statements as of September 30, 2021 and for each of the three and nine months periods ended therein, and also
the consolidated financial statements as of December 31, 2021 and 2020 and for each of the three fiscal years in the period ended December 31, 2021 (collectively, the “previously issued financial statements”), management identified errors related
to certain customer incentive programs. It was also determined that the Company utilized incorrect accounting and assumptions in the determination of certain estimates related to its sales return provisions, warranty reserve provisions and
variable consideration. Additionally, the Company identified an error related to a failure to
appropriately account for certain returns and/or exchanges specific to sales transactions in China as a result of an investigation by the Company’s Audit and Finance Committee. Allowing for the product exchanges referred to above resulted in an
overstatement of net sales in the third quarter of 2021 of approximately $4 million which should have been recorded in the fourth
quarter of 2021. In conjunction with making these corrections, the Company has also made certain other restatements and revisions for previously identified errors. As a result of these collective errors, Net sales and Net income were overstated
in the Company’s financial statements for the nine month period ended September 30, 2021 by approximately $35 million and $27 million, respectively, with errors to both Net sales and Net income (loss) for the three months ended September 30, 2021 and 2020 as shown in the
tables below. Additionally, the correction of errors pertaining to periods prior to 2020 required an adjustment to opening retained earnings at January 1, 2020 of $45 million as reflected in the Consolidated Statements of Equity. Those errors related primarily to the timing,
recognition, and estimation of variable consideration associated with certain sales orders in the historical periods. These errors were deemed to be material when considered together with certain qualitative and quantitative considerations
such as the fact that the misstatements masked a failure to meet internal financial targets and external financial analyst expectations for the three months ended September 30, 2021 and due to the material weaknesses identified through the course
of the Audit and Finance Committee’s investigation.
Management has therefore restated for the three and nine months ended September 30, 2021 and revised for the three and nine months ended September 30, 2020, the accompanying
consolidated financial statements and related notes included herein to correct these accounting errors for all periods presented, as well as the accompanying footnotes affected by the accounting errors, as shown below. The Company has also
updated all accompanying footnotes and disclosures affected by the restatements and revisions, respectively, within Note 2, Revenue, Note 4, Comprehensive Income (Loss), Note 5, Earnings Per Common Share, Note 7, Segment Information, Note
8, Inventories, Net, and Note 11, Income Taxes.
The following tables present the effect of correcting these accounting errors on the Company’s
previously issued financial statements:
Use of Estimates
The preparation of financial statements in conformity with 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 Net sales and
expense during the reporting period. Actual results could differ materially from those estimates.
Specifically, for the nine months ended September 30, 2021, some of these estimates
and assumptions continue to be based on an ongoing evaluation of expected future impacts from the COVID-19 pandemic. The full extent to which the COVID-19 pandemic will directly or indirectly have a negative material impact on the Company’s
financial condition, liquidity, or results of operations in future periods is highly uncertain and difficult to predict. More specifically, the demand for the Company’s products has been, and continues to be, affected by social distancing
guidelines, dental practice safety protocols which reduce patient traffic, and some lingering patient reluctance to seek dental care. The Company’s 2020 results were materially impacted by the preventative measures implemented at the outset of
the pandemic, including the closure or reduced operations of dental practices. During 2021, demand for the Company’s products has largely recovered, although impacts from the pandemic continue to be experienced as evidenced by the more recent
shortages and higher prices of raw materials such as electronic components, higher related transportation costs, and labor shortages. In the current year, the Company has experienced supply chain constraints, which has impacted its ability to
timely produce and deliver certain products, and has also resulted in increases in shipping rates. To address these issues, the Company has taken steps to mitigate the impact of these trends, including continued emphasis on cost reduction and
supply chain efficiencies. However, uncertainties remain regarding how long these impacts will continue, whether customer demand will fully return to pre-COVID-19 levels upon lifting of remaining government restrictions, or whether future
variants of the virus may have an adverse impact on demand in affected markets.
Inventory
As of September 30, 2021, all of the Company’s inventories were determined by the
first-in, first-out (“FIFO”) or average cost methods. As of the end of the first quarter of 2021, the Company had $1 million of
inventories accounted for under the last-in first-out (“LIFO”) method of inventory costing. Effective as of the beginning of the second quarter, the method of accounting for these inventories was changed from LIFO to FIFO. This change in
accounting is preferable as the value of inventory for which cost was previously determined using a LIFO cost flow assumption has declined from prior years due to changes in the business, it allows for a more consistent methodology to be utilized
across the Company, and provides improved comparability with industry peers. The change in accounting principle was recognized during the second quarter of 2021 by adjusting these inventories to cost as determined using the FIFO method, resulting
in an increase in inventories of $4 million and a corresponding reduction to Cost of products sold in the Company’s Consolidated
Statements of Operations. The impact of this change was not material to the Company’s financial position as of December 31, 2020, or the Company’s results of operations for any previously reported prior periods nor is the cumulative effect of the
change material to the results of operations for the six months ended June 30, 2021. Therefore, prior period amounts have not been retrospectively adjusted.
Goodwill
& Intangible Assets
Effective
2021 and prospectively, the Company is performing its required annual goodwill impairment test as of April 1 rather than as of April 30 which was the Company’s previous practice. The Company believes this change is preferable as it more closely
aligns with the timing of the Company’s strategic business planning process. This change did not result in any delay, acceleration or avoidance of impairment. Furthermore, a retrospective application to prior periods is impracticable as the
Company is unable to objectively determine, without the use of hindsight, the assumptions which would be used in earlier periods.
Accounting Pronouncements Not Yet Adopted
In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848):
Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which was subsequently amended by ASU No. 2021-01 “Reference Rate Reform (Topic 848): Scope” in January 2021. The new standard provides optional expedients and
exceptions to contracts, hedging relationships, and other transactions that reference the London Interbank Offer Rate (“LIBOR”) or another rate expected to be discontinued due to the reference rate reform. This standard is permitted to be adopted
any time through December 31, 2022, and does not apply to contract modifications made or hedging relationships entered into or evaluated after December 31, 2022. The Company is currently assessing the impact that this standard will have on its
financial position, results of operations, cash flows, and disclosures.
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE
Revenues
are derived primarily from the sale of dental equipment and dental and healthcare consumable products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.
Net sales disaggregated by product category for the three and nine
months ended September 30, 2021 and 2020 were as follows:
Net sales disaggregated by geographic region for the three and
nine months ended September 30, 2021 and 2020 were as follows:
Contract Assets and Liabilities
The Company normally does not have contract assets in the course of its business.
Contract liabilities, which represent billings in excess of revenue recognized, are primarily related to advanced billings for customer aligner treatment where the performance obligation has not yet been fulfilled. The Company had $59 million and $53 million of deferred
revenue recorded in Accrued liabilities in the Consolidated Balance Sheets at September 30, 2021 and December 31, 2020, respectively. Prior year deferred revenue of approximately $35 million was recognized in the current year. The Company expects to recognize significantly all of the remaining deferred revenue within the next twelve months.
Allowance for Doubtful Accounts
Accounts and notes receivables-trade, net are stated net of allowances for doubtful
accounts and trade discounts, which were $14 million at September 30, 2021 and $18 million at December 31, 2020. For the three months and nine months ended September 30, 2021, changes to the provision for doubtful accounts including write-offs of
accounts receivable that were previously reserved were insignificant. For the three months ended September 30, 2020 changes to the provision were insignificant. For the nine months ended September 30, 2020, the Company wrote-off $10 million of accounts receivable that were previously reserved and increased the provision for doubtful accounts by $2 million. Changes to this provision are included in Selling, general, and administrative expenses in the Consolidated Statements of Operations.
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STOCK COMPENSATION |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK COMPENSATION | STOCK
COMPENSATION
The amounts of stock compensation expense recorded in the Company’s Consolidated
Statements of Operations for the three and nine months ended September 30, 2021 and 2020 were as follows:
|
COMPREHENSIVE INCOME (LOSS) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS) | COMPREHENSIVE
INCOME (LOSS)
Changes in Accumulated other comprehensive income (loss) (“AOCI”),
net of tax, by component for the nine months ended September 30, 2021 and 2020 were as follows:
At September 30, 2021 and December 31, 2020, the cumulative tax adjustments were $182 million and $216 million,
respectively, primarily related to foreign currency translation gains and losses.
The cumulative foreign currency translation adjustments included translation losses
of $113 million and $25
million at September 30, 2021 and December 31, 2020, respectively, and cumulative losses on loans designated as hedges of net investments of $204
million and $162 million, respectively. These foreign currency translation losses were partially offset by movements on derivative
financial instruments.
Reclassifications out of AOCI to the Consolidated Statements of Operations for the
three and nine months ended September 30, 2021 and 2020 were insignificant.
|
EARNINGS PER COMMON SHARE |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | EARNINGS PER
COMMON SHARE
The computation of basic and diluted earnings per common share for
the three and nine months ended September 30, 2021 and 2020 were as follows:
For the three and nine months ended September 30, 2021, the Company excluded from
the computation of weighted average diluted shares outstanding 0.9 million and 0.9 million, respectively, of equivalent shares of common stock from stock options and RSUs because their effect would be antidilutive. For the three and nine months ended
September 30, 2020, the Company excluded 3.5 million and 3.2 million, respectively, of equivalent shares of common stock outstanding from stock options and RSUs because their effect would be antidilutive.
The calculation of weighted average diluted common shares outstanding excluded 0.9 million of potentially diluted common shares because the Company reported a net loss for the nine months ended September 30, 2020.
During the nine months ended September 30, 2021, the Company repurchased
approximately 1.5 million shares pursuant to its open market shares repurchase plan for a net cost of $90 million at an average price of $60.62.
On July 28, 2021, the Board of Directors of the Company approved an increase in the
value of shares of common stock that may be repurchased under the share repurchase program, up to $1.0 billion. Share repurchases may
be made through open market purchases, Rule 10b5-1 plans, accelerated share repurchases, privately negotiated transactions or other transactions in such amounts and at such times as the Company deems appropriate based upon prevailing market and
business conditions and other factors.
|
BUSINESS COMBINATIONS |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATIONS | BUSINESS
COMBINATIONS
Acquisitions
2021 Transactions
On July 1, 2021, the effective date of the transaction, the Company paid $7 million to acquire the remaining interest in the dental business of a partially owned affiliate based in Switzerland that primarily develops highly
specialized software with a focus on CAD/CAM systems. The acquisition is expected to further accelerate the development of the Company’s specialized software related to CAD/CAM systems.
The preliminary fair values of the assets acquired and liabilities assumed in
connection with the acquisition of the affiliate included $4 million of Other current assets, $3 million of Intangible assets and $1 million of Other
long-term liabilities. The purchase price and the $4 million fair value of the previously-held interest in the entity prior to the
acquisition has been allocated on the basis of the preliminary estimates of fair values of assets acquired and liabilities assumed, resulting in the recording of $5 million in goodwill. This goodwill is considered to represent the value associated with the acquired workforce and synergies the two companies anticipate realizing as a combined company and is not expected to
be deductible for tax purposes. Management is continuing to finalize its valuation of certain assets including other intangible assets and will conclude its valuation no later than one year from the acquisition date.
Identifiable intangible assets acquired were as follows:
On June 1, 2021, the effective date of the transaction, the Company paid $132 million to acquire substantially all of the assets of Propel Orthodontics LLC, a privately-held company based in New York and California. Propel
Orthodontics manufactures and sells orthodontic devices and provides in-office and at-home orthodontic accessory devices to orthodontists and their patients primarily within the clear aligner market. The acquisition is expected to further
accelerate the growth and profitability of the Company’s combined clear aligners business.
The preliminary fair values of the assets acquired and liabilities assumed in
connection with the Propel Orthodontics acquisition were as follows:
The purchase price has been allocated on the basis of the preliminary estimates of
fair values of assets acquired and liabilities assumed, resulting in the recording of $63 million in goodwill, which is considered to
represent the value associated with the acquired workforce and synergies the two companies anticipate realizing as a combined company. The goodwill is expected to be deductible for tax purposes. Management is continuing to finalize its valuation
of certain assets including other intangible assets and will conclude its valuation no later than one year from the acquisition date. Measurement period adjustments made to the fair values of the assets acquired and liabilities assumed during
three months ended September 30, 2021 were immaterial to the financial statements, resulting in a reduction to goodwill of $2 million.
Identifiable intangible assets acquired were as follows:
On January 21, 2021, the effective date of the transaction, the Company paid $94 million with the potential for additional earn-out provision payments of up to $10 million, to acquire 100% of the outstanding shares of Datum
Dental, Ltd., a privately-held producer and distributor of specialized regenerative dental material based in Israel. The fair value of the earn-out provision has been valued at $9 million as of the transaction date, resulting in a total purchase price of $103 million.
The preliminary fair values of the assets acquired and liabilities assumed in
connection with the Datum acquisition were as follows:
The purchase price has been allocated on the basis of the preliminary estimates of
fair values of assets acquired and liabilities assumed, resulting in the recording of $39 million in goodwill, which is considered to
represent the value associated with the acquired workforce and synergies the two companies anticipate realizing as a combined company. The goodwill is not deductible for tax purposes. Measurement period adjustments made to the fair values of the
assets acquired and liabilities assumed during the first nine months of 2021 were immaterial to the financial statements, resulting in an increase to goodwill of $6 million. Management is continuing to finalize its valuation of certain assets including other intangible assets and will conclude its valuation no later than one year from the acquisition date.
Identifiable intangible assets acquired were as follows:
2020 Transactions
On December 31, 2020, the effective date of the transaction, the Company acquired 100% of the outstanding interests of Straight Smile, LLC (“Byte”), a privately-held company, for approximately $1.0 billion using cash on hand. Byte is a doctor-directed, direct-to-consumer, clear aligner business. The acquisition is expected to enhance scale
and accelerate the growth and profitability of the Company’s combined clear aligners business.
The preliminary fair values of the assets acquired and liabilities assumed in
connection with the Byte acquisition for the year ended December 31, 2020 were as follows:
The purchase price has been allocated on the basis of the preliminary estimates of
fair values of assets acquired and liabilities assumed, which resulted in the recording of $626 million in goodwill. The amount of
goodwill is considered to represent the value associated with the acquired workforce and synergies the two companies anticipate realizing as a combined company, including alignment with the Company’s existing clear aligner business, and is
deductible for tax purposes. Measurement period adjustments made to the fair values of the assets acquired and liabilities assumed during the first nine months of 2021 were immaterial to the financial statements, resulting in a reduction to
goodwill of $5 million.
Intangible
assets acquired were as follows:
The results of operations for each of the acquired businesses above upon the
effective date of each transaction have been included in the accompanying financial statements. These results, as well as the historical results for the above acquired businesses for the periods ended September 30, 2021 and 2020, are not material
in relation to the Company’s net sales and earnings for those periods. The Company therefore does not believe these acquisitions represent material transactions either individually or in the aggregate requiring the supplemental pro-forma
information prescribed by ASC 805 and accordingly, this information is not presented.
Investments in Affiliates
On June 4, 2021, the effective date of the transaction, the Company paid $16 million to acquire a minority interest in a U,K.-based, privately-held provider of healthcare consumables. The Company records this investment and
subsequent profit or losses under equity method accounting within Other noncurrent assets.
Divestitures
On April 1, 2021, the Company disposed of certain orthodontics businesses based in
Japan previously included as part of the Technologies and Equipment segment in exchange for a cash receipt of $8 million. The
divestiture resulted in an immaterial loss recorded in Other expense (income), net in the Consolidated Statements of Operations for the nine months ended September 30, 2021.
On February 1, 2021, the Company disposed of an investment casting business
previously included as part of the Consumables segment in exchange for a cash receipt of $19 million. The divestiture resulted in a
pre-tax gain of $13 million recorded in Other expense (income), net in the Consolidated Statements of Operations for the nine months
ended September 30, 2021.
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SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT
INFORMATION
The Company’s two operating segments are organized primarily by product and generally have overlapping geographical presence, customer bases, distribution channels, and regulatory
oversight. These operating segments also comprise the Company’s reportable segments in accordance with how the Company’s chief operating decision-maker regularly reviews financial results and uses this information to evaluate the Company’s
performance and allocate resources.
The Company evaluates performance of the segments based on net sales and adjusted
operating income. Segment adjusted operating income is defined as operating income before income taxes and before certain corporate headquarters unallocated costs, restructuring and other costs, interest expense, net, other expense (income), net,
amortization of intangible assets and depreciation resulting from the fair value step-up of property, plant, and equipment from acquisitions.
A description of the products and services provided within each of the Company’s two reportable segments is provided below.
Technologies & Equipment
This segment is responsible for the design, manufacture, and sales of the Company’s
Dental Technology and Equipment Products and Healthcare Consumable Products. These products include dental implants, CAD/CAM systems, orthodontic clear aligner products, imaging systems, treatment centers, instruments, as well as consumable
medical device products.
Consumables
This segment is responsible for the design, manufacture, and sales of the Company’s
Dental Consumable Products which include preventive, restorative, endodontic, and dental laboratory products.
The Company’s segment information for the three and nine months ended September 30,
2021 and 2020 was as follows:
Net Sales
Segment Adjusted Operating Income
(a) Certain charges related to discontinuance of product lines which were previously
reported in adjusted operating income for the reportable segments, $33 million and $34 million for the three and nine months ended September 30, 2020, respectively, have been reclassified to the “All other” category to conform to current year presentation
and the Company’s internal reporting in the Chief Operating Decision Maker package. These amounts are not material to the measure of segment results for the years presented.
(b) Includes the results of unassigned Corporate headquarters costs and inter-segment eliminations.
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INVENTORIES |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES | INVENTORIES
Inventories, net were as follows:
The
Company’s inventory reserve was $89 million and $117 million at September 30, 2021 and December 31, 2020, respectively. Inventories are stated at the lower of cost and net realizable value.
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RESTRUCTURING AND OTHER COSTS |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RESTRUCTURING AND OTHER COSTS | RESTRUCTURING
AND OTHER COSTS
During the three and nine months ended September 30, 2021, the Company recorded net
restructuring and other costs of $6 million and $14 million, respectively, which consists of severance and other restructuring costs of $6 million and
$17 million, respectively, offset by adjustments to inventory reserves of $3 million for the nine months ended September 30, 2021.
During the three and nine months ended September 30, 2020, the Company recorded
restructuring and other costs of $52 million and $96 million, respectively, which consists of inventory write-downs of $25 million for both the
three and nine months ended, severance costs of $16 million and $21 million, respectively, accelerated depreciation of $9
million for both the three and nine months ended, and asset impairments of $2 million and $41 million, respectively.
The details of total restructuring and other costs for the three
and nine months ended September 30, 2021 and 2020 were as follows:
Restructuring Programs and Accruals
The Company announced on August 6, 2020 that it will exit its traditional
orthodontics business as well as both exit and restructure certain portions of its laboratory business (the “2020 Plan”). The traditional orthodontics business is part of the Technologies & Equipment segment and the laboratory business is
part of the Consumables segment. The Company is exiting several of its facilities and reducing its workforce by approximately 4% to 5%. The Company expects to record restructuring charges in a range of $60 million to $70 million for inventory write-downs, severance costs, fixed asset write-offs, and
other facility closure costs. The Company recorded total expenses of approximately $58 million related to these actions which consists
primarily of inventory write-downs of approximately $28 million, accelerated depreciation of approximately $14 million, and severance costs of approximately $11 million.
For the nine months ended September 30, 2021, the Company made a $3 million adjustment related to inventory reserves and recorded
severance costs of $2 million. The Company expects nearly all of the remaining restructuring charges to be completed by the first
quarter of 2022.
The Company’s restructuring accruals at September 30, 2021 were
as follows:
The cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment were as follows:
The associated restructuring liabilities are recorded in Accrued
liabilities and Other noncurrent liabilities in the Consolidated Balance Sheets.
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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 and interest rates. 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 fixed rate debt into variable rate debt or variable rate debt to fixed rate debt. The Company does not hold derivative
instruments for trading or speculative purposes.
Derivative Instruments
The following summarizes the notional amounts of cash flow hedges,
hedges of net investments, fair value hedges, and derivative instruments not designated as hedges for accounting purposes by derivative instrument type at September 30, 2021 and the notional amounts expected to mature during the next 12 months.
Cash Flow Hedges
Foreign Exchange Risk Management
The Company uses a program to hedge select anticipated foreign currency cash flows
to reduce volatility in both cash flows and reported earnings. 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 assessed 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 reported on a straight-line basis in Cost of products sold in the Consolidated Statements of Operations in the period which it is
applicable. Any cash flows associated with these instruments are included in operating activities in
the Consolidated Statements of Cash Flows.
These foreign exchange forward contracts generally have maturities up to 18 months, which is the period over which the Company is hedging exposures to variability of cash flows and the counterparties to the transactions are
typically large international financial institutions.
Interest Rate Risk Management
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 operating activities in the Consolidated Statements of Cash Flows.
AOCI Release
Overall, the derivatives designated as cash flow hedges are considered to be highly
effective for accounting purposes. At September 30, 2021, the Company expects to reclassify $1 million of deferred net losses on cash
flow hedges recorded in AOCI in the Consolidated Statements of Operations during the next 12 months. For the rollforward of derivative instruments designated as cash flow hedges in AOCI see Note 3, Comprehensive (Loss) Income.
Hedges of Net Investments in Foreign Operations
The Company has significant investments in foreign subsidiaries. The net assets of
these subsidiaries are exposed to volatility in currency exchange rates. The Company employs both derivative and non-derivative financial instruments to hedge a portion of this exposure. 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; which are designated as hedges of net investments and are included in AOCI. The time-value component of the fair value of the derivative is reported on a
straight-line basis in Other expense (income), net in the Consolidated Statements of Operations in the applicable period. 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, for which all cash flows are classified as financing activities in the Consolidated Statements of Cash Flows.
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.
On May 25, 2021, the Company re-established its euro net investment hedge portfolio
by entering into eight foreign exchange forward contracts, each with a notional amount of 10 million euro. The contracts have quarterly maturity dates through March 31, 2023.
On July 2, 2021, the Company entered into a cross currency basis swap totaling a
notional amount of $300 million which matures on June 3, 2030. The cross currency basis swap is designated as a hedge of net
investments. This contract effectively converts a portion of the $750 million bond coupon from 3.3% to 1.7%, which will result in a
net reduction of interest expense in 2021.
Fair Value Hedges
Foreign Exchange Risk Management
The Company has intercompany loans denominated in Swedish kronor that are exposed to
volatility in currency exchange rates. The Company employs derivative financial instruments to hedge these exposures. The Company accounts for these designated foreign exchange forward contracts as fair value hedges. The Company measures the
effectiveness of fair value 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 recorded in the Consolidated Statements of
Operations. The time-value component of the fair value of the derivative is reported on a straight-line basis in Other expense (income), net in the Consolidated Statements of Operations in the applicable period. Any cash flows associated with
these instruments are included in operating activities in the Consolidated Statements of Cash Flows.
On January 6, 2021 the Company entered into foreign exchange forward contracts with
a notional value of SEK 1.3 billion as a result of an increase in intercompany loans denominated in Swedish kronor. The foreign
exchange forwards are designated as fair value hedges.
On July 1, 2021, the Company entered into variable interest rate swaps with a
notional amount of $250 million, which effectively converts a portion of the underlying fixed rate of 3.3% on the $750 million Senior Notes
due June 2030 to a variable interest rate. Of the $250 million notional amount, $100 million has a term of five-years maturing on June 1, 2026
and $150 million has a term of nine years
maturing on March 1, 2030.
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 Company primarily uses foreign exchange forward contracts to hedge these risks. 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. Any cash flows
associated with these instruments are included in cash from operating activities in the Consolidated Statements of Cash Flows.
Gains and (losses) recorded in the Company’s Consolidated Statements of Operations
related to the economic hedges not designated as hedges for the three and nine months ended September 30, 2021 and 2020 were insignificant.
Derivative Instrument Activity
The amount of gains and losses recorded in the Company’s Consolidated Balance Sheets
and Consolidated Statements of Operations related to all derivative instruments for the three months ended September 30, 2021 and 2020 were as follows:
The amount of gains and losses recorded in AOCI in the Consolidated Balance Sheets
and Consolidated Statement of Operations related to all derivative instruments for the nine months ended September 30, 2021 and 2020 were as follows:
Consolidated Balance Sheets Location of Derivative Fair Values
The fair value and the location of the Company’s derivatives in
the Consolidated Balance Sheets were as follows:
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
September 30, 2021 were as follows:
Offsetting of financial assets and liabilities under netting
arrangements at December 31, 2020 were as follows:
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FAIR VALUE MEASUREMENT |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENT | FAIR
VALUE MEASUREMENT
The estimated fair value and carrying value of the Company’s total debt was $2,227 million and $2,076 million,
respectively, at September 30, 2021. At December 31, 2020, the estimated fair value and carrying value were $2,509 million and $2,281 million, respectively. The fair value of long-term debt is based on recent trade information in the financial markets of the Company’s public
debt or is determined by discounting future cash flows using interest rates available at September 30, 2021 and December 31, 2020 to companies with similar credit ratings for issues with similar terms and maturities. It is considered a Level 2
fair value measurement.
Assets and liabilities measured at fair value on a recurring basis
The Company’s financial assets and liabilities set forth by level within the fair
value hierarchy that were accounted for at fair value on a recurring basis were as follows:
There have been no transfers between levels during the nine months ended
September 30, 2021.
|
INCOME TAXES |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES
Uncertainties in Income Taxes
The Company recognizes the impact of a tax position in the interim consolidated
financial statements if that position is more likely than not of being sustained on audit based on the technical merits of the position.
It is reasonably possible that certain amounts of unrecognized tax benefits will
significantly increase or decrease within 12 months of the reporting date of the Company’s quarterly consolidated financial statements. Final settlement and resolution of outstanding tax matters in various jurisdictions during the next 12 months
are not expected to be significant.
Other Tax Matters
During the three months ended September 30, 2021, the Company recorded $4 million of tax expense for discrete tax matters.
During
the three months ended September 30, 2020, the Company recorded $2 million of tax expense for discrete tax matters.
|
FINANCING ARRANGEMENTS |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING
ARRANGEMENTS
At September 30, 2021, the Company had $607 million of borrowing available under lines of credit, including lines available under its short-term arrangements and revolving credit facility.
The Company has a $500 million commercial paper program. The $700 million
multi-currency revolving credit facility serves as a back-stop credit facility for the Company’s commercial paper program. At September 30, 2021 and December 31, 2020, there were no outstanding borrowings under the multi-currency revolving credit facility. The Company had $139 million outstanding borrowings under the commercial paper facility at September 30, 2021 and no outstanding borrowings under the commercial paper facility at December 31, 2020. As of September 30, 2021, the weighted-average interest rate for this short-term debt was
0.2%.
On July 2, 2021 the Company pre-paid the fixed rate Senior Notes totaling $296 million that were scheduled to mature on August 16, 2021 using cash and short-term commercial paper.
The Company’s revolving credit facilities and senior unsecured notes contain certain
affirmative and negative debt covenants relating to the Company’s operations and financial condition. At September 30, 2021, the Company was in compliance with all affirmative and negative debt covenants.
|
GOODWILL AND INTANGIBLE ASSETS |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL
AND INTANGIBLE ASSETS
The Company assesses both goodwill and indefinite-lived intangible
assets for impairment annually during the second quarter or more frequently if events or changes in circumstances indicate the asset might be impaired. The Company conducted its annual goodwill and indefinite-lived intangible assets impairment
test as of April 1, 2021. Based on the Company’s 2021 impairment test, it was determined that the fair values of its reporting units and indefinite-lived intangible assets more likely than not exceed their respective carrying values, resulting in
no impairment.
The fair values of reporting units were computed using a
discounted cash flow model with inputs developed using both internal and market-based data. Intangible assets were evaluated for impairment using an income approach, specifically a relief from royalty method, or using a qualitative assessment. A
change in any of the estimates and assumptions used in the annual test, a decline in the overall markets or in the use of intangible assets among other factors, could have a material adverse effect to the fair value of either the reporting units
or intangible assets and could result in a future impairment charge. There can be no assurance that the Company’s future asset impairment testing will not result in a material charge to earnings.
Subsequent to the annual impairment test, as of September 30,
2021, the Company considered whether any events or changes in circumstances had resulted in the likelihood that the goodwill or indefinite-lived intangible assets may have become impaired during the course of the quarter, and concluded that there
were no such indicators.
During the three months ended March 31, 2020, as a result of updating the estimates
and assumptions pertaining to the impact of the ongoing COVID-19 pandemic, the Company recorded a goodwill impairment charge of $157 million
related to the goodwill associated with the Technologies & Equipment segment. Additionally, during the three months ended March 31, 2020, the Company recorded an indefinite-lived intangible asset impairment charge of $39 million within the Technologies & Equipment segment which was driven by a decline in forecasted sales as a result of the COVID-19 pandemic and
an unfavorable change in the discount rate.
A reconciliation of changes in the Company’s goodwill by
reportable segment were as follows:
(a) Refer to Note 5, “Business Combinations” for more information regarding recent
acquisitions.
Identifiable definite-lived and indefinite-lived intangible assets
were as follows:
(a) Intangible assets acquired in a business combination that are in-process and used in research and
development (“R&D”) activities are considered indefinite-lived until the completion or abandonment of the R&D efforts. The useful life and amortization of those assets will be determined once the R&D efforts are completed.
During
the second quarter of 2021, the Company purchased certain developed technology rights for an initial payment of $3 million. The
purchase consideration also includes contingent payments of $17 million to be made upon reaching certain regulatory and commercial
milestones, which were not yet deemed probable at September 30, 2021.
|
COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS
AND CONTINGENCIES
Litigation
On January 25, 2018, Futuredontics, Inc., a former wholly-owned subsidiary of the
Company, received service of a purported class action lawsuit brought by Henry Olivares and other similarly situated individuals in the Superior Court of the State of California for the County of Los Angeles. In January 2019, an amended complaint
was filed adding another named plaintiff, Rachael Clarke, and various claims. The plaintiff class alleges several violations of the California wage and hours laws, including, but not limited to, failure to provide rest and meal breaks and the
failure to pay overtime. The parties have engaged in written and other discovery. On February 5, 2019, Plaintiff Calethia Holt (represented by the same counsel as Mr. Olivares and Ms. Clarke) filed a separate representative action in Los Angeles
Superior Court alleging a single violation of the Private Attorneys’ General Act that is based on the same underlying claims as the Olivares/Clarke lawsuit. On April 5, 2019, Plaintiff Kendra Cato filed a similar action in Los Angeles Superior
Court alleging a single violation of the Private Attorneys’ General Act that is based on the same underlying claims as the Olivares/Clarke lawsuit. The Company has agreed to resolve all three actions (Olivares, Holt, and Cato). The court in Cato
approved the settlement in that case, the settlement payment has been made, and the court dismissed the lawsuit. The parties to Olivares and Holt are in the process of seeking court approval of that settlement. The expected settlement amount,
which is immaterial to the financial statements, has been recorded as an accrued liability within the Company’s consolidated balance sheet as of September 30, 2021.
On June 7, 2018, and August 9, 2018, two putative class action suits were filed, and later consolidated, in the Supreme Court of the State of New York, County of New York claiming that the Company and certain
individual defendants, violated U.S. securities laws (the “State Court Action”) by making material misrepresentations and omitting required information in the December 4, 2015 registration statement filed with the SEC in connection with the
Merger. The amended complaint alleges that the defendants failed to disclose, among other things, that a distributor had purchased excessive inventory of legacy Sirona products and that three distributors of the Company’s products had been engaging in anticompetitive conduct. The plaintiffs seek to recover damages on behalf of a class of former Sirona
shareholders who exchanged their shares for shares of the Company’s stock in the Merger. On September 26, 2019, the Court granted the Company’s motion to dismiss all claims and a judgment dismissing the case was subsequently entered. On February
4, 2020, the Court denied plaintiffs’ post-judgment motion to vacate or modify the judgment and to grant them leave to amend their complaint. The plaintiffs appealed the dismissal and the denial of the post-judgment motion to the Supreme Court of
the State of New York, Appellate Division, First Department, and the Company cross-appealed select rulings in the Court’s decision dismissing the action. The plaintiffs’ appeals and the Company’s cross-appeal were consolidated and argued on
January 12, 2021. On February 2, 2021, the Appellate Division issued its decision upholding the dismissal of the State Court Action with prejudice on statute of limitations grounds. The Plaintiffs did not appeal the Appellate Division decision.
On December 19, 2018, a related putative class action was filed in the U.S. District
Court for the Eastern District of New York against the Company and certain individual defendants (the “Federal Class Action”). The plaintiff makes similar allegations and asserts the same claims as those asserted in the State Court Action. In
addition, the plaintiff alleges that the defendants violated U.S. securities laws by making false and misleading statements in quarterly and annual reports and other public statements between February 20, 2014, and August 7, 2018. The plaintiff
asserts claims on behalf of a putative class consisting of (a) all purchasers of the Company’s stock during the period February 20, 2014 through August 7, 2018 and (b) former shareholders of Sirona who exchanged their shares of Sirona stock for
shares of the Company’s stock in the Merger. The Company moved to dismiss the amended complaint on August 15, 2019. The plaintiff filed its second amended complaint on January 22, 2021, and the Company filed a motion to dismiss the second amended
complaint on March 8, 2021. Briefing on the motion to dismiss was fully submitted on May 21, 2021, and that motion is currently pending before the Court.
The Company intends to defend itself vigorously in these actions.
As a result of an audit by the IRS for fiscal years 2012 through 2013, on February
11, 2019, the IRS issued to the Company a “30-day letter” and a Revenue Agent’s Report (“RAR”), relating to the Company’s worthless stock deduction in 2013 in the amount of $546 million. The RAR disallows the deduction and, after adjusting the Company’s net operating loss carryforward, asserts that the Company is entitled to a refund of $5 million for 2012, has no tax
liability for 2013, and owes a deficiency of $17 million in tax for 2014, excluding interest. In accordance with ASC 740, the Company
recorded the tax benefit associated with the worthless stock deduction in the Company’s 2012 financial statements. In March 2019, the Company submitted a formal protest disputing on multiple grounds the proposed taxes. The Company and its
advisors discussed its position with the IRS Appeals Office Team on October 28, 2020 and, on November 13, 2020, submitted a supplemental response to questions raised by the Appeals Team. The Company’s position continues to be reviewed by the IRS
Appeals Office team. The Company believes the IRS’ position is without merit and believes that it is more likely-than-not the Company’s position will be sustained in 2021 upon further review by the IRS Appeals Office Team. The Company has not
accrued a liability relating to the proposed tax adjustments. However, the outcome of this dispute involves a number of uncertainties, including those inherent in the valuation of various assets at the time of the worthless stock deduction, and
those relating to the application of the Internal Revenue Code and other federal income tax authorities and judicial precedent. Accordingly, there can be no assurance that the dispute with the IRS will be resolved favorably. If determined
adversely, the dispute would result in a current period charge to earnings and could have a material adverse effect in the consolidated results of operations, financial position, and liquidity of the Company.
The Swedish Tax Agency has disallowed certain of the Company’s interest expense
deductions for the tax years from 2013 to 2018. If such interest expense deductions were disallowed, the Company would be subject to an additional $49 million
in tax expense. The Company has appealed the disallowance to the Swedish Administrative Court. With respect to such deductions taken in the tax years from 2013 to 2014, the Court ruled against the Company on July 5, 2017. On August 7, 2017, the
Company appealed the unfavorable decision of the Swedish Administrative Court. On November 5, 2018, the Company delivered its final argument to the Administrative Court of Appeals at a hearing. The European Union Commission has taken the view
that Sweden’s interest deduction limitation rules are incompatible with European Union law and supporting legal opinions, and therefore the Company has not paid the tax or made provision in its financial statements for such potential expense.
This view has now been confirmed by the European Union Court of Justice in a preliminary ruling requested by the Swedish Supreme Administrative Court. Subsequently, the Swedish Tax Authority has conceded in pending court proceedings that the
Company should be granted further interest expense deductions, but still claims that interest expense deductions incurring a maximum additional tax expense of $12 million should be disallowed on grounds not relating to European Union law. The Company intends to vigorously defend its position and pursue related appeals.
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.
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. Future minimum annual payments for inventory purchase commitments were immaterial as of September 30,
2021.
|
SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates |
Use of Estimates
The preparation of financial statements in conformity with 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 Net sales and
expense during the reporting period. Actual results could differ materially from those estimates.
Specifically, for the nine months ended September 30, 2021, some of these estimates
and assumptions continue to be based on an ongoing evaluation of expected future impacts from the COVID-19 pandemic. The full extent to which the COVID-19 pandemic will directly or indirectly have a negative material impact on the Company’s
financial condition, liquidity, or results of operations in future periods is highly uncertain and difficult to predict. More specifically, the demand for the Company’s products has been, and continues to be, affected by social distancing
guidelines, dental practice safety protocols which reduce patient traffic, and some lingering patient reluctance to seek dental care. The Company’s 2020 results were materially impacted by the preventative measures implemented at the outset of
the pandemic, including the closure or reduced operations of dental practices. During 2021, demand for the Company’s products has largely recovered, although impacts from the pandemic continue to be experienced as evidenced by the more recent
shortages and higher prices of raw materials such as electronic components, higher related transportation costs, and labor shortages. In the current year, the Company has experienced supply chain constraints, which has impacted its ability to
timely produce and deliver certain products, and has also resulted in increases in shipping rates. To address these issues, the Company has taken steps to mitigate the impact of these trends, including continued emphasis on cost reduction and
supply chain efficiencies. However, uncertainties remain regarding how long these impacts will continue, whether customer demand will fully return to pre-COVID-19 levels upon lifting of remaining government restrictions, or whether future
variants of the virus may have an adverse impact on demand in affected markets.
|
Inventory |
Inventory
As of September 30, 2021, all of the Company’s inventories were determined by the
first-in, first-out (“FIFO”) or average cost methods. As of the end of the first quarter of 2021, the Company had $1 million of
inventories accounted for under the last-in first-out (“LIFO”) method of inventory costing. Effective as of the beginning of the second quarter, the method of accounting for these inventories was changed from LIFO to FIFO. This change in
accounting is preferable as the value of inventory for which cost was previously determined using a LIFO cost flow assumption has declined from prior years due to changes in the business, it allows for a more consistent methodology to be utilized
across the Company, and provides improved comparability with industry peers. The change in accounting principle was recognized during the second quarter of 2021 by adjusting these inventories to cost as determined using the FIFO method, resulting
in an increase in inventories of $4 million and a corresponding reduction to Cost of products sold in the Company’s Consolidated
Statements of Operations. The impact of this change was not material to the Company’s financial position as of December 31, 2020, or the Company’s results of operations for any previously reported prior periods nor is the cumulative effect of the
change material to the results of operations for the six months ended June 30, 2021. Therefore, prior period amounts have not been retrospectively adjusted.
|
Goodwill & Intangible Assets |
Goodwill
& Intangible Assets
Effective
2021 and prospectively, the Company is performing its required annual goodwill impairment test as of April 1 rather than as of April 30 which was the Company’s previous practice. The Company believes this change is preferable as it more closely
aligns with the timing of the Company’s strategic business planning process. This change did not result in any delay, acceleration or avoidance of impairment. Furthermore, a retrospective application to prior periods is impracticable as the
Company is unable to objectively determine, without the use of hindsight, the assumptions which would be used in earlier periods.
|
Accounting Pronouncements Not Yet Adopted |
Accounting Pronouncements Not Yet Adopted
In March 2020, the FASB issued ASU No. 2020-04 “Reference Rate Reform (Topic 848):
Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which was subsequently amended by ASU No. 2021-01 “Reference Rate Reform (Topic 848): Scope” in January 2021. The new standard provides optional expedients and
exceptions to contracts, hedging relationships, and other transactions that reference the London Interbank Offer Rate (“LIBOR”) or another rate expected to be discontinued due to the reference rate reform. This standard is permitted to be adopted
any time through December 31, 2022, and does not apply to contract modifications made or hedging relationships entered into or evaluated after December 31, 2022. The Company is currently assessing the impact that this standard will have on its
financial position, results of operations, cash flows, and disclosures.
|
Revenue |
Revenues
are derived primarily from the sale of dental equipment and dental and healthcare consumable products. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.
|
Foreign Exchange Risk Management |
Foreign Exchange Risk Management
The Company uses a program to hedge select anticipated foreign currency cash flows
to reduce volatility in both cash flows and reported earnings. 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 assessed 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 reported on a straight-line basis in Cost of products sold in the Consolidated Statements of Operations in the period which it is
applicable. Any cash flows associated with these instruments are included in operating activities in
the Consolidated Statements of Cash Flows.
These foreign exchange forward contracts generally have maturities up to 18 months, which is the period over which the Company is hedging exposures to variability of cash flows and the counterparties to the transactions are
typically large international financial institutions.
|
SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments |
The following tables present the effect of correcting these accounting errors on the Company’s
previously issued financial statements:
|
REVENUE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue |
Net sales disaggregated by product category for the three and nine
months ended September 30, 2021 and 2020 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Geographic Areas |
Net sales disaggregated by geographic region for the three and
nine months ended September 30, 2021 and 2020 were as follows:
|
STOCK COMPENSATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Based Compensation |
The amounts of stock compensation expense recorded in the Company’s Consolidated
Statements of Operations for the three and nine months ended September 30, 2021 and 2020 were as follows:
|
COMPREHENSIVE INCOME (LOSS) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) |
Changes in Accumulated other comprehensive income (loss) (“AOCI”),
net of tax, by component for the nine months ended September 30, 2021 and 2020 were as follows:
|
EARNINGS PER COMMON SHARE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted |
The computation of basic and diluted earnings per common share for
the three and nine months ended September 30, 2021 and 2020 were as follows:
|
BUSINESS COMBINATIONS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets Acquired |
Identifiable intangible assets acquired were as follows:
Identifiable intangible assets acquired were as follows:
Identifiable intangible assets acquired were as follows:
Intangible
assets acquired were as follows:
|
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
The preliminary fair values of the assets acquired and liabilities assumed in
connection with the Propel Orthodontics acquisition were as follows:
The preliminary fair values of the assets acquired and liabilities assumed in
connection with the Datum acquisition were as follows:
The preliminary fair values of the assets acquired and liabilities assumed in
connection with the Byte acquisition for the year ended December 31, 2020 were as follows:
|
SEGMENT INFORMATION (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third Party Net Sales |
The Company’s segment information for the three and nine months ended September 30,
2021 and 2020 was as follows:
Net Sales
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Adjusted Operating Income |
Segment Adjusted Operating Income
(a) Certain charges related to discontinuance of product lines which were previously
reported in adjusted operating income for the reportable segments, $33 million and $34 million for the three and nine months ended September 30, 2020, respectively, have been reclassified to the “All other” category to conform to current year presentation
and the Company’s internal reporting in the Chief Operating Decision Maker package. These amounts are not material to the measure of segment results for the years presented.
(b) Includes the results of unassigned Corporate headquarters costs and inter-segment eliminations.
|
INVENTORIES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net |
Inventories, net were as follows:
|
RESTRUCTURING AND OTHER COSTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs |
The details of total restructuring and other costs for the three
and nine months ended September 30, 2021 and 2020 were as follows:
The Company’s restructuring accruals at September 30, 2021 were
as follows:
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Cumulative Amounts for the Provisions and Adjustments and Amounts Applied for All the Plans by Segment |
The cumulative amounts for the provisions and adjustments and amounts applied for all the plans by segment were as follows:
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FINANCIAL INSTRUMENTS AND DERIVATIVES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions |
The following summarizes the notional amounts of cash flow hedges,
hedges of net investments, fair value hedges, and derivative instruments not designated as hedges for accounting purposes by derivative instrument type at September 30, 2021 and the notional amounts expected to mature during the next 12 months.
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Schedule of Derivative Instruments |
The amount of gains and losses recorded in the Company’s Consolidated Balance Sheets
and Consolidated Statements of Operations related to all derivative instruments for the three months ended September 30, 2021 and 2020 were as follows:
The amount of gains and losses recorded in AOCI in the Consolidated Balance Sheets
and Consolidated Statement of Operations related to all derivative instruments for the nine months ended September 30, 2021 and 2020 were as follows:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value |
The fair value and the location of the Company’s derivatives in
the Consolidated Balance Sheets were as follows:
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Offsetting Derivative Assets and Liabilities |
Offsetting of financial assets and liabilities under netting arrangements at
September 30, 2021 were as follows:
Offsetting of financial assets and liabilities under netting
arrangements at December 31, 2020 were as follows:
|
FAIR VALUE MEASUREMENT (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities at fair value |
The Company’s financial assets and liabilities set forth by level within the fair
value hierarchy that were accounted for at fair value on a recurring basis were as follows:
|
GOODWILL AND INTANGIBLE ASSETS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill |
A reconciliation of changes in the Company’s goodwill by
reportable segment were as follows:
(a) Refer to Note 5, “Business Combinations” for more information regarding recent
acquisitions.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Definite-lived and Indefinite-lived Intangible Assets |
Identifiable definite-lived and indefinite-lived intangible assets
were as follows:
(a) Intangible assets acquired in a business combination that are in-process and used in research and
development (“R&D”) activities are considered indefinite-lived until the completion or abandonment of the R&D efforts. The useful life and amortization of those assets will be determined once the R&D efforts are completed.
|
SIGNIFICANT ACCOUNTING POLICIES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Significant Accounting Policies [Line Items] | ||||||||||
Net sales | $ (1,040) | $ (883) | $ (3,128) | $ (2,263) | ||||||
Net income | (84) | $ (96) | $ (112) | (48) | $ 92 | $ 134 | (292) | 178 | ||
Retained earnings | 1,419 | 1,419 | $ 1,198 | |||||||
Inventories, net | 548 | $ 1 | 548 | 476 | ||||||
Inventory adjustments | 4 | 4 | ||||||||
Adjustment | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Net sales | 29 | 12 | 35 | (3) | ||||||
Net income | 19 | $ 6 | 27 | $ (4) | ||||||
Retained earnings | (62) | (62) | (35) | $ 45 | ||||||
Inventories, net | 16 | $ 16 | $ 10 | |||||||
Adjustment | Product Exchanges Incorrectly Accounted For | ||||||||||
Significant Accounting Policies [Line Items] | ||||||||||
Net sales | $ 4 |
SIGNIFICANT ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) - USD ($) $ in Millions |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounting Policies [Abstract] | ||
Deferred income | $ 59 | $ 53 |
STOCK COMPENSATION (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 22 | $ 16 | $ 54 | $ 35 |
Related deferred income tax benefit | 2 | 2 | 6 | 4 |
Cost of products sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | 2 | 0 | 4 | 1 |
Selling, general, and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | 19 | 15 | 48 | 33 |
Research and development expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock based compensation expense | $ 1 | $ 1 | $ 2 | $ 1 |
BUSINESS COMBINATIONS - FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED (Details) - USD ($) $ in Millions |
Sep. 30, 2021 |
Jun. 30, 2021 |
Jun. 01, 2021 |
Jan. 21, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|---|
Business Acquisition [Line Items] | |||||
Intangible assets | $ 3 | ||||
Goodwill | $ 4,000 | $ 3,986 | |||
Propel Orthodontics | |||||
Business Acquisition [Line Items] | |||||
Other current assets | $ 4 | ||||
Intangible assets | 66 | ||||
Current liabilities | (1) | ||||
Net assets acquired | 69 | ||||
Goodwill | 63 | ||||
Purchase consideration | $ 132 | ||||
Datum Dental, Ltd | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 2 | ||||
Other current assets | 2 | ||||
Intangible assets | 76 | ||||
Current liabilities | (2) | ||||
Other long-term assets (liabilities), net | (14) | ||||
Net assets acquired | 64 | ||||
Goodwill | 39 | ||||
Purchase consideration | $ 103 | ||||
Straight Smile LLC | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 14 | ||||
Current assets | 17 | ||||
Intangible assets | 416 | ||||
Current liabilities | (28) | ||||
Net assets acquired | 419 | ||||
Goodwill | 626 | ||||
Purchase consideration | $ 1,045 |
SEGMENT INFORMATION - ADDITIONAL INFORMATION (Details) |
9 Months Ended |
---|---|
Sep. 30, 2021
segment
| |
Segment Reporting [Abstract] | |
Number of operating groups | 2 |
SEGMENT INFORMATION - THIRD PARTY NET SALES (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Revenue, Major Customer [Line Items] | ||||
Net sales | $ 1,040 | $ 883 | $ 3,128 | $ 2,263 |
Technologies & Equipment | ||||
Revenue, Major Customer [Line Items] | ||||
Net sales | 612 | 497 | 1,824 | 1,327 |
Consumables | ||||
Revenue, Major Customer [Line Items] | ||||
Net sales | $ 428 | $ 386 | $ 1,304 | $ 936 |
INVENTORIES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventory valuation reserve | $ 89 | $ 117 |
INVENTORIES - SUMMARY OF INVENTORY (Details) - USD ($) $ in Millions |
Sep. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Finished goods | $ 343 | $ 274 | |
Work-in-process | 73 | 68 | |
Raw materials and supplies | 132 | 134 | |
Inventories, net | $ 548 | $ 1 | $ 476 |
RESTRUCTURING AND OTHER COSTS - CONSOLIDATED STATEMENTS OF OPERATIONS (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other costs | $ 6 | $ 52 | $ 14 | $ 96 |
Cost of products sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other costs | 0 | 33 | (3) | 33 |
Selling, general, and administrative expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other costs | 3 | 1 | 6 | 1 |
Restructuring and other costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total restructuring and other costs | $ 3 | $ 18 | $ 11 | $ 62 |
RESTRUCTURING AND OTHER COSTS - PROVISIONS AND ADJUSTMENTS AND AMOUNTS APPLIED FOR ALL PLANS BY SEGMENT (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Restructuring Reserve [Roll Forward] | ||||
Provisions | $ 3 | $ 18 | $ 11 | $ 62 |
2021 Plans | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 34 | |||
Provisions | 21 | |||
Amounts applied | (30) | |||
Change in estimates | (7) | |||
Ending Balance | 18 | 18 | ||
Operating Segments | Technologies & Equipment | 2021 Plans | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 16 | |||
Provisions | 6 | |||
Amounts applied | (13) | |||
Change in estimates | (5) | |||
Ending Balance | 4 | 4 | ||
Operating Segments | Consumables | 2021 Plans | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 17 | |||
Provisions | 12 | |||
Amounts applied | (14) | |||
Change in estimates | (2) | |||
Ending Balance | 13 | 13 | ||
All Other | 2021 Plans | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning Balance | 1 | |||
Provisions | 3 | |||
Amounts applied | (3) | |||
Change in estimates | 0 | |||
Ending Balance | $ 1 | $ 1 |
FAIR VALUE MEASUREMENT - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 2,227 | $ 2,509 |
Carrying (Reported) Amount, Fair Value Disclosure | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 2,076 | $ 2,281 |
INCOME TAXES - ADDITIONAL INFORMATION (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Tax expense (benefit) for other discrete tax matters | $ 4 | $ 2 |
FINANCING ARRANGEMENTS (Details) - USD ($) |
9 Months Ended | |||
---|---|---|---|---|
Jul. 02, 2021 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Line of Credit Facility [Line Items] | ||||
Borrowings available under lines of credit | $ 607,000,000 | |||
Notes payable and current portion of long-term debt | 151,000,000 | $ 299,000,000 | ||
Repayments of long-term debt | 297,000,000 | $ 701,000,000 | ||
Line of Credit | Commercial paper | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 500,000,000 | |||
Notes payable and current portion of long-term debt | $ 139,000,000 | 0 | ||
Debt, weighted average interest rate | 0.20% | |||
Line of Credit | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 700,000,000 | |||
Notes payable and current portion of long-term debt | $ 0 | $ 0 | ||
Senior Notes | Fixed Rate Senior Notes Due August 2021 | ||||
Line of Credit Facility [Line Items] | ||||
Repayments of long-term debt | $ 296,000,000 |
GOODWILL AND INTANGIBLE ASSETS - NARRATIVE (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Sep. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Goodwill [Line Items] | ||||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 157 | ||
Indefinite-lived intangible asset impairment | 0 | $ 39 | ||||
Developed technology and patents | ||||||
Goodwill [Line Items] | ||||||
Payments to acquire intangible assets | $ 3 | |||||
Asset Acquisition, Contingent Consideration, Liability | $ 17 | $ 17 | ||||
Technologies & Equipment | ||||||
Goodwill [Line Items] | ||||||
Goodwill impairment | $ 157 | |||||
Technologies & Equipment | Equipment and Instruments Reporting Unit | ||||||
Goodwill [Line Items] | ||||||
Indefinite-lived intangible asset impairment | $ 39 |
COMMITMENTS AND CONTINGENCIES (Details) |
2 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Nov. 05, 2018
USD ($)
|
Nov. 04, 2018
USD ($)
|
Aug. 09, 2018
lawsuit
|
Sep. 30, 2021
USD ($)
|
Jun. 07, 2018
distributor
|
|
Loss Contingencies [Line Items] | |||||
Loss contingency, new claims filed, number | lawsuit | 2 | ||||
Number of distributors | distributor | 3 | ||||
Income tax effects allocated directly to equity, employee stock options | $ 546,000,000 | ||||
Tax Year 2014 | IRS | |||||
Loss Contingencies [Line Items] | |||||
Income tax penalties | 17,000,000 | ||||
Swedish Tax Agency | |||||
Loss Contingencies [Line Items] | |||||
Income tax examination, estimate of possible loss | $ 12,000,000 | $ 49,000,000 | |||
IRS | Tax Year 2012 | |||||
Loss Contingencies [Line Items] | |||||
Liability (refund) from income tax examination | (5,000,000) | ||||
IRS | Tax Year 2013 | |||||
Loss Contingencies [Line Items] | |||||
Liability (refund) from income tax examination | $ 0 |
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